The on-chain options protocol Hegic recently made a suspected profit of US$17 million through internal transactions and the purchase of tokens issued by the affiliate project Whiteheart (hedging protocol).
Late last month, Hegic's anonymous developer Molly Wintermute announced that she was abandoning plans to develop Whiteheart, saying that Whiteheart would return $28 million in funding to investors and shut down. News of the redemption caused Whiteheart’s token to rise sixfold to $3,500. Blockchain data shows that three days before the announcement of the closure of the Whiteheart project, the Hegic Treasury (which is separate from the Whiteheart Treasury) purchased nearly one-third of the WHITE token supply. Including Hegic's previous purchase of WHITE in September, Hegic's treasury holds half of the funds of Whiteheart's treasury, that is, Ethereum worth $17 million.
Experts say that from a securities law perspective, Whiteheart's deal could raise questions about fiduciary duties, shareholder rights and information asymmetries in the unruly cryptocurrency market. Although Hegic and Whiteheart are not organized as traditional companies, and WHITE is not a stock, that may change as the U.S. SEC gets involved in cryptocurrency regulation. (CoinDesk)