Sam Bankman-Fried’s life in jail, Tornado Cash’s turmoil, and a B BTC whale: Hodler’s Digest, Aug. 20-26

Sam Bankman-Fried’s life in jail, Tornado Cash’s turmoil, and a $3B BTC whale: Hodler’s Digest, Aug. 20-26

Published

2 years ago

August 27, 2023

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Tornado Cash co-founders charged with money laundering, sanctions violations

United States officials pressed charges against the co-founders of crypto mixer Tornado Cash on Aug. 23. Roman Storm and Roman Semenov were both charged with conspiracy to commit money laundering, conspiracy to commit sanctions violations and conspiracy to operate an unlicensed money-transmitting business. Storm was arrested and released on bail a few days later, while Semenov was added to the U.S. list of Specially Designated Nationals and Blocked Persons. Combined, the charges carry a maximum sentence of 45 years in prison. The third Tornado Cash co-founder, Alexey Pertsev, was arrested in the Netherlands on money laundering charges in August 2022. The law enforcement actions are a continuation of a U.S. government crackdown on Tornado Cash that began last year due to its alleged role in laundering funds of the Lazarus Group, a North Korean-linked hacking collective. Tornado Cash has been implicated in several other hacks as well. All told, the mixer has laundered over $1 billion in ill-gotten gains, the U.S. Department of Justice alleges.

Sam Bankman-Fried is low on meds, living on $3 peanut butter in prison

FTX founder Sam Bankman-Fried appears to be having a tough time behind bars, eating only bread with peanut butter to accommodate his vegan diet while exhausting his supply of prescription medication. In the same hearing where Bankman-Fried pleaded not guilty to seven fraud-related charges, his lawyers pleaded for the former FTX CEO to receive better treatment inside Brooklyn’s notorious Metropolitan Detention Center. Also this week, Bankman-Fried was granted permission to meet with his legal team outside of jail with 48 hours’ notice. Every day, he will have roughly seven hours to prepare for his upcoming trial expected to begin in October.

Mystery solved: Bitcoin wallet accruing $3B in 3 months is identified

The mysterious Bitcoin wallet that surged up the ranks to become the third-largest holder of Bitcoin in the world in just over three months, has been identified. Blockchain intelligence platform Arkham Intelligence labeled the wallet as Robinhood: Jump Trading Custody. According to data from crypto statistics platform BitInfoCharts, the wallet address first received Bitcoin on March 8. Over the course of the next three months and two weeks, the wallet had accrued a staggering 118,000 BTC — worth $3.08 billion at current prices. The current largest Bitcoin wallets in the world, according to BitInfoCharts, are reportedly owned by Binance and Bitfinex — as Bitcoin cold wallets.

Prime Trust parent company lost $8M investing in TerraUSD

The parent company of crypto custodian Prime Trust — currently involved in Chapter 11 bankruptcy proceedings — has reported losing roughly $8 million in client and treasury funds through TerraUSD investments, presumably when the algorithmic stablecoin collapsed in May 2022. The company described the investment as well as a ramping up of spending in October and November 2022 — in the midst of FTX’s collapse — as contributing to its bankruptcy filing. Court documents show Prime Trust owed more than $85 million in fiat and $69.5 million in crypto to its clients. The collapse of the Terra ecosystem triggered a major market crash in 2022, affecting several firms including FTX, BlockFi, Celsius Network and Voyager Digital.

PEPE whale seizes dip opportunity, buys $529K worth of tokens

A Pepe holder bought 640 billion Pepe tokens for 320 Ether valued at $529,000 after the price of the frog-themed memecoin dropped by approximately 15% due to recent changes to a multisig wallet and concerns about potential developer manipulation. According to on-chain analytics platform Lookonchain, the whale purchased PEPE at an average price of $0.000001163. The value of the once-popular memecoin plunged after changes related to the amount of signatures required to sign transactions led to worries about a potential “rug pull,” which was later confirmed by one of the project’s co-founders.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $26,040, Ether (ETH) at $1,653 and XRP at $0.52. The total market cap is at $1.05 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Bone ShibaSwap (BONE) at 18.58%, Sui (SUI) at 12.86% and Toncoin (TON) at 11.97%.

The top three altcoin losers of the week are Pepe (PEPE) at -21.07%, XDC Network (XDC) at -9.62% and ApeCoin (APE) at -8.35%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“If history were to repeat itself, the next halving would see bitcoin rising to $35k before the halving and $148k after.”

Pantera Capital

“A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI.”

Jensen Huang, founder and CEO of NVIDIA

“Some of the people who currently think that there should not be effective law enforcement on-chain would feel differently if they got hacked, defrauded, or lost their private keys.”

Mike Kanovitz, CEO of Jurat

“You could never underestimate the damage the SEC’s lawsuit has caused – not only against Ripple – but #XRP. Three years of adoption – that’s what it’s caused.”

John Deaton, pro-XRP lawyer

“AI will never replace human creativity because it will always lack the essential spark that drives the most talented artists to do their best work, which is intention.”

Neal Mohan, CEO of YouTube

“Blockchain and AI can certainly co-exist — they’re both pillars of Web3.”

Aydin Kilic, CEO of Hive Digital Technologies

Prediction of the Week

Bitcoin ‘overconfidence reigns’ but bulls must reclaim $27.8K — Trader

Bitcoin needs to reclaim one key moving average to “regain its bullish status,” argues popular pseudonymous analyst CryptoCon, warning that bulls remained too optimistic about the $26,000 BTC price support holding.

For CryptoCon, the 20-week exponential moving average (EMA), now at $27,750, must be won back as support in order for the uptrend to be safe. “I have been covering this moving average a lot recently, but I believe it is critical for Bitcoin to regain its bullish status,” he wrote.

The analysis compared current BTC price action to its rebound from 2018 cycle lows. “It is very important that Bitcoin both rises above and retests the 20 Week EMA as support,” CryptoCon noted with a chart showing the similarities between 2019 and 2023, with the retest and subsequent successful EMA reclaim circled.

FUD of the Week

Chinese official sentenced to life in prison for Bitcoin mining, corruption

A Chinese government official has been sentenced to life in prison for illegitimate business operations related to running a 2.4 billion Chinese yuan ($329 million) Bitcoin mining enterprise and for unrelated charges of corruption. Prosecutors say Xiao Yi — a former member of the Jiangxi Provincial Political Consultative Conference Party Group — “covered up” the mining operation by instructing relevant departments to fabricate statistical reports and adjust the classification of electricity consumption. From 2017 to 2020, his facility’s electricity consumption accounted for 10% of the city of Fuzhou’s total electricity consumption.

FBI flags 6 Bitcoin wallets linked to North Korea, urges vigilance in crypto firms

The United States Federal Bureau of Investigation (FBI) has flagged six Bitcoin wallets linked to North Korean state-backed hacking group Lazarus. The six wallets contain 1,580 BTC worth $40 million believed to be hoarded from various cryptocurrency hacks over the past year. The FBI in its investigation found that Lazarus Group moved approximately 1,580 BTC linked with several crypto exploits. The hacking group has been actively involved in multiple crypto-linked exploits over the years and are believed to have stolen nearly $2 billion in crypto since 2018.

OpenSea manager accused of insider trading sentenced to 3 months in prison, $50K fine

A federal judge has sentenced former OpenSea product manager Nathaniel Chastain to three months in prison for wire fraud and money laundering related to insider trading on the platform. He was accused of using insider information in his position at OpenSea to profit off the trading of NFTs. In his position as product manager, he had the authority to choose which NFTs would be featured on the OpenSea website. He purchased 45 NFTs prior to them being featured and then resold them.

Recursive inscriptions: Bitcoin ‘supercomputer’ and BTC DeFi coming soon

Some believe that Ordinals and recursive inscriptions could supercharge the Bitcoin network as a viable competitor to smart contract platforms. It’s not going to be easy, though.

AI Eye: Get better results being nice to ChatGPT, AI fake child porn debate, Amazon’s AI reviews

Being nice to ChatGPT gets better results, Wired’s weird child porn debate and the end of CATPCHAs.

NFT Collector: Giant Swan’s gothic VR dreamscapes… royalty nightmare on OpenSea

From crying in his car to putting the first 3D object onchain — the story of Giant Swan. Plus royalties race to the bottom accelerates due to OpenSea.

Editorial Staff

Cointelegraph Magazine writers and reporters contributed to this article.

Politics

China’s crypto liquidation plans reveal its grand strategy

Published

3 hours ago

August 2, 2025

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China’s crypto liquidation plans reveal its grand strategy

China’s plan to liquidate confiscated crypto through Hong Kong exchanges isn’t simply a policy — it’s to control global digital asset markets and outmaneuver the US.

Politics

Make ‘significant adjustments’ to Online Safety Act, X urges govt

Published

15 hours ago

August 2, 2025

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X criticises Online Safety Act - and warns it's putting free speech in the UK at risk

The Online Safety Act is putting free speech at risk and needs significant adjustments, Elon Musk’s social network X has warned.

New rules that came into force last week require platforms such as Facebook, YouTube, TikTok and X – as well as sites hosting pornography – to bring in measures to prove that someone using them is over the age of 18.

The Online Safety Act requires sites to protect children and to remove illegal content, but critics have said that the rules have been implemented too broadly, resulting in the censorship of legal content.

X has warned the act’s laudable intentions were “at risk of being overshadowed by the breadth of its regulatory reach”.

It said: “When lawmakers approved these measures, they made a conscientious decision to increase censorship in the name of ‘online safety’.

“It is fair to ask if UK citizens were equally aware of the trade-off being made.”

X claims the timetable for platforms to meet mandatory measures had been unnecessarily tight – and despite complying, sites still faced threats of enforcement and fines, “encouraging over-censorship”.

“A balanced approach is the only way to protect individual liberties, encourage innovation and safeguard children. It’s safe to say that significant changes must take place to achieve these objectives in the UK,” it said.

A UK government spokesperson said it is “demonstrably false” that the Online Safety Act compromises free speech.

“As well as legal duties to keep children safe, the very same law places clear and unequivocal duties on platforms to protect freedom of expression,” they added.

Users have complained about age checks that require personal data to be uploaded to access sites that show pornography, and 468,000 people have already signed a petition asking for the new law to be repealed.

In response to the petition, the government said it had “no plans” to reverse the Online Safety Act.

Reform UK’s leader Nigel Farage likened the new rules to “state suppression of genuine free speech” and said his party would ditch the regulations.

Technology Secretary Peter Kyle said on Tuesday that those who wanted to overturn the act were “on the side of predators” – to which Mr Farage demanded an apology, calling Mr Kyle’s comments “absolutely disgusting”.

Regulator Ofcom said on Thursday it had launched an investigation into how four companies – that collectively run 34 pornography sites – are complying with new age-check requirements.

These companies – 8579 LLC, AVS Group Ltd, Kick Online Entertainment S.A. and Trendio Ltd – run dozens of sites, and collectively have more than nine million unique monthly UK visitors, the internet watchdog said.

The regulator said it prioritised the companies based on the risk of harm posed by the services they operated and their user numbers.

It adds to the 11 investigations already in progress into 4chan, as well as an unnamed online suicide forum, seven file-sharing services, and two adult websites.

Ofcom said it expects to make further enforcement announcements in the coming months.

Politics

Inside Jeremy Corbyn’s new party and the battle for leadership

Published

18 hours ago

August 2, 2025

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Inside Jeremy Corbyn's new party and the battle for leadership

Zarah Sultana and Jeremy Corbyn may be the figureheads of a new left-wing party, but already there is a battle over leadership.

The confusion behind the initial launch speaks to a wider debate happening behind closed doors as to who should steer the party – now and in the future.

Already, in the true spirit of Mr Corbyn’s politics, there is talk of an open leadership contest and grassroots participation.

Some supporters of the new party – which is being temporarily called “Your Party” while a formal name is decided by members – believe that allowing a leadership contest to take place honours Mr Corbyn’s commitment to open democracy.

They point out that under Mr Corbyn’s leadership of the Labour Party, members famously backed plans to make it easier for local constituency parties to deselect sitting MPs – a concept he strongly believed in.

His allies now say the former Labour leader, who is 76, is open to there being a leadership contest for the new party, possibly at its inaugural conference in the autumn, where names lesser known than himself can throw their hat into the ring.

“Jeremy would rather die than not have an open leadership contest,” one source familiar with the internal politics told Sky News.

However, there have been suggestions that Ms Sultana appears to be less keen on the idea of a leadership contest, and that she is more committed to the co-leadership model than her political partner.

Those who have been opposed to the co-leadership model believe it could give Ms Sultana an unfair advantage and exclude other potential candidates from standing in the future.

One source told Sky News they believed Mr Corbyn should lead the party for two years, to get it established, before others are allowed to stand as leader.

They said Ms Sultana, who became an independent MP after she was suspended from Labour for opposing the two-child benefit cap, was “highly ambitious but completely untested as leader” and “had a lot of growing into the role to do”.

“It’s not about her – it’s about taking a democratic approach, which is what we’re supposed to be doing,” they said.

“There are so many people who have done amazing things locally and they need to have a chance to emerge as leaders.

“We are not only fishing from a pool of two people.

“It needs to be an open contest. Nobody needs to be crowned.”

While Mr Corbyn and Ms Sultana undoubtedly have the biggest profiles out of would-be leaders, advocates for a grassroots approach to the leadership point to the success some independent candidates have enjoyed at a local level – for example, 24-year-old British Palestinian Leah Mohammed, who came within 528 votes of unseating Health Secretary Wes Streeting in Ilford North.

Fiona Lali of the Revolutionary Communist Party, who stood in last year’s general election for the Stratford and Bow constituency, has also been mentioned in some circles as someone with potential leadership credentials.

However, sources close to Mr Corbyn and Ms Sultana downplayed suggestions of any divide over the leadership model, pointing out that their joint statement acknowledged that members would “decide the party’s direction” at the inaugural conference in the autumn, including the model of leadership and the policies that are needed to transform society.

A spokesperson for Mr Corbyn told Sky News: “Jeremy will be working with Zarah, his independent colleagues, and people from trade unions and social movements up and down the country to make an autumn conference a reality.

“This will be the moment where people come together to launch a new democratic party that belongs to the members.”

Sky News has approached Ms Sultana for comment.