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

Stablecoin bill won’t target Trump as Senate aims to pass it next week

Published

2 hours ago

May 15, 2025

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Stablecoin bill won’t target Trump as Senate aims to pass it next week

The US Senate could pass a key bipartisan stablecoin bill as soon as next week after removing language targeting President Donald Trump and his family’s sprawling crypto interests.

Republican Senator Cynthia Lummis said onstage at an event by Coinbase’s lobbying arm, Stand With Crypto, that she thinks it’s a “fair target” to have the Guiding and Establishing National Innovation for US Stablecoins Act, or GENIUS Act, passed by May 26 — Memorial Day in the US.

Joining her onstage was Democratic Senator Kirsten Gillibrand, who hinted that the bill’s language was changed to scrap provisions that targeted Trump’s various crypto projects, which include memecoins, a crypto platform, a stablecoin, and a crypto mining company that plans to go public, among others.

“When this language comes out, people will see really good refinement, a lot of progress, on things like consumer protection, and bankruptcy protection, and ethics,” Gillibrand said. “Things beyond just ‘what’s the structure?’ and ‘what’s required for an issuer?’”

Congress, Stablecoin — *Source:* *Brian Armstrong*

Senate Democrats pulled support for the bill on May 8 and stalled its momentum, airing concerns that it wouldn’t help address multiple crypto-tied deals that will personally enrich Trump.

“A lot of what President Trump is engaged in is already illegal,” Gillibrand said. “I also think his issuance of a memecoin is illegal based on current law.”

“It’s literally offering anyone who wants to curry favor with the administration to just send him money — that’s about as illegal as it gets.”

“I’m not so worried about this bill having to deal with all President Trump’s ethics problems. What this bill is really intended to do is regulate the entire space of stablecoins,” she added.

Gillibrand said the revised bill includes “some ethics requirements,” but it was “not an ethics bill.”

“If we were dealing with all President Trump’s ethics problems, it would be a very long and detailed bill,” she added.

Coinbase CEO Brian Armstrong, also on stage, was hopeful the Senate would vote on the stablecoin bill “early next week.”

Armstrong, whose company cozied up to Trump by donating $1 million to his inauguration fund, declined to comment when asked if the President’s memecoin could impact the passage of bipartisan crypto bills.

“It’s not my place to really comment on President Trump’s activity,” he said. “What I do think is important is that this bill remains focused on stablecoins.”

Crypto bills “absolutely critical” to pass before midterms

The crypto industry is pushing for Congress to pass the GENIUS Act and a Republican-drafted crypto market structure bill before the midterm elections on Nov. 3, 2026, where all 435 House seats and a third of the 100 Senate seats are up for election.

“We have a very narrow window to get legislation through between now and the midterms,” Marta Belcher, the president of the crypto lobby group the Blockchain Association, told Cointelegraph at the Consensus conference in Toronto.

“I strongly suspect that window is going to close very quickly. I don’t know if we’re going to get another window like this to get legislation through,” she added.

“It’s absolutely critical that we get it through now, especially because there really is a real possibility that in the future we end up with an administration that is hostile to crypto.”

The Association’s communications director, Chris Jonas, added that it’s critical the bills pass before Congress takes a recess for the month of August.

“Once you get into the calendar year of the midterms, historically not a lot of legislation moves, so that’s why it’s so critical,” he explained.

Trump should be on track to sign both crypto bills before the August break, according to Bo Hines, the executive director of the Presidential Council of Advisers for Digital Assets.

Hines noted on stage at Consensus on May 13 that negotiations on both bills are still ongoing, but it was “the President’s desire” to sign both “stablecoin legislation and market structure legislation before the August recess.”

Legal Panel: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

Politics

Dems seek suspicious activity reports linked to Trump crypto ventures

Published

5 hours ago

May 15, 2025

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Dems seek suspicious activity reports linked to Trump crypto ventures

US Democrat lawmakers have sent a letter to the US Treasury demanding access to suspicious activity reports (SARs) on several Trump-backed crypto projects as part of the latest probe into the president’s digital ventures.

Penned by representatives Gerald Connolly, Joseph Morelle, and Jamie Raskin, the May 14 letter asks Treasury Secretary Scott Bessent for all SARS filed since 2023 related to World Liberty Financial (WLF) and the Official Trump (TRUMP) token.

Financial institutions in the US must file SARs with the Financial Crimes Enforcement Network, a bureau within the Department of the Treasury, when they detect suspicious activity, including potential money laundering or fraud.

The sweeping probe asks for any SARs mentioning WinRed, America PAC, Elon Musk, political action committee, PAC, Trump, World Liberty Financial, WLF, TRUMP, MELANIA and Justin Sun, no later than May 30.

The Democratic lawmakers say their probe is to “determine whether legislation is necessary to prevent violations of campaign finance, consumer protection, bribery, securities fraud, and other anti-corruption laws” and to guard against “financial misconduct connected to prospective or current federal officials.”

Democrats argue WLF and Trump coin could be misused

As part of the letter, the lawmakers argue WLF could be misused as a “vehicle for foreign influence peddling” because it served part of its token sale for foreign investors, who are “generally subject to less stringent regulation than US investors.”

Justin Sun’s investment in WLF and the subsequent pause of the SEC’s lawsuit that alleged the crypto entrepreneur broke securities laws has also been flagged as a concern.

Trump’s token has come under fire as well because the lawmakers argue in their letter that the identities of the coin purchasers are not publicly disclosed, which could open the door for bad actors to “curry favor with Trump” by purchasing the coin.

At the same time, SARS related to Republican digital fundraising WinRed, Elon Musk’s super PAC, which poured $250 million into Trump’s election campaign, and two other PACs are being sought.

This effort is the latest Democrat-led salvo against Trump’s crypto ventures.

A group of Democratic senators reportedly sent a letter to leadership at the US Department of Justice and the Treasury Department expressing concerns about Trump’s ties to crypto exchange Binance and potential conflicts of interest in regulating the industry, according to a May 9 Bloomberg report.

US Democratic lawmakers also launched a multi-angle attack on May 6, targeting Trump’s ability to profit from his crypto initiatives with two bills and a subcommittee inquiry.

Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions

Politics

Top Tory caught admitting Brexit drawback in leaked clip

Published

10 hours ago

May 14, 2025

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Leaked recording reveals top Tory knew of flaws in post-Brexit plan to return illegal migrants

One of Kemi Badenoch’s top team has admitted there were flaws in the plan to return illegal migrants after Brexit, Sky News can reveal.

Boris Johnson repeatedly told the public that Brexit would mean taking back control of Britain’s borders and migration system.

Plans unveiled to ease prisons crisis – politics latest

But in a leaked recording obtained by Sky News, Chris Philp, now shadow home secretary, said Britain’s exit from the EU – and end of UK participation in the Dublin agreement which governs EU-wide asylum claims – meant they realised they “can’t any longer rely on sending people back to the place where they first claimed asylum”.

Mr Philp appeared to suggest the scale of the problem surprised those in the Johnson government.

“When we did check it out… (we) found that about half the people crossing the Channel had claimed asylum previously elsewhere in Europe.”

In response tonight, the Tories insisted that Mr Philp was not saying the Tories did not have a plan for how to handle asylum seekers post Brexit.

Mr Philp’s comments from last month are a very different tone to 2020 when as immigration minister he seemed to be suggesting EU membership and the Dublin rules hampered asylum removals.

In August that year, he said: “The Dublin regulations do have a number of constraints in them, which makes returning people who should be returned a little bit harder than we would like. Of course, come the 1st of January, we’ll be outside of those Dublin regulations and the United Kingdom can take a fresh approach.”

Mr Philp was also immigration minister in Mr Johnson’s government so would have been following the debate closely.

In public, members of the Johnson administration were claiming this would not be an issue since asylum claims would be “inadmissible”, but gave no details on how they would actually deal with people physically arriving in the country.

A Home Office source told journalists once the UK is “no longer bound by Dublin after the transition”, then “we will be able to negotiate our own bilateral returns agreement from the end of this year”.

This did not happen immediately.

In the summer of 2020, Mr Johnson’s spokesman criticised the “inflexible and rigid” Dublin regulations, suggesting the exit from this agreement would be a welcome post-Brexit freedom. Mr Philp’s comments suggest a different view in private.

The remarks were made in a Zoom call, part of a regular series with all the shadow cabinet on 28 April, just before the local election.

Mr Philp was asked by a member why countries like France continued to allow migrants to come to the UK.

He replied: “The migrants should claim asylum in the first safe place and that under European Union regulations, which is called the Dublin 3 regulation, the first country where they are playing asylum is the one that should process their application.

“Now, because we’re out of the European Union now, we are out of the Dublin 3 regulations, and so we can’t any longer rely on sending people back to the place where they first claimed asylum. When we did check it out, just before we exited the EU transitional arrangements on December the 31st, 2020, we did run some checks and found that about half the people crossing the channel had claimed asylum previously elsewhere in Europe.

“In Germany, France, Italy, Spain, somewhere like that, and therefore could have been returned. But now we’re out of Dublin, we can’t do that, and that’s why we need to have somewhere like Rwanda that we can send these people to as a deterrent.”

Mr Johnson announced the Rwanda plan in April 2022 – which Mr Philp casts as the successor plan – 16 months after Britain left the legal and regulatory regime of the EU, but the plan was blocked by the European Court of Human Rights.

Successive Tory prime ministers failed to get any mandatory removals to Rwanda, and Sir Keir Starmer cancelled the programme on entering Downing Street last year, leaving the issue of asylum seekers from France unresolved.

Speaking on Sky News last weekend, Home Secretary Yvette Cooper said there has been a 20% increase in migrant returns since Labour came to power, along with a 40% increase in illegal working raids and a 40% increase in arrests for illegal working.

Britain’s membership of the EU did not stop all asylum arrivals. Under the EU’s Dublin regulation, under which people should be processed for asylum in the country at which they first entered the bloc.

However, many EU countries where people first arrive, such as Italy, do not apply the Dublin rules.

The UK is not going to be able to participate again in the Dublin agreement since that is only open to full members of the EU.

Ministers have confirmed the Labour government is discussing a returns agreement with the French that would involve both countries exchanging people seeking asylum.

Asked on Sky News about how returns might work in future, the transport minister Lilian Greenwood said on Wednesday there were “discussions ongoing with the French government”, but did not say what a future deal could look like.

She told Sky News: “It’s not a short-term issue. This is going to take really hard work to tackle those organised gangs that are preying on people, putting their lives in danger as they try to cross the Channel to the UK.

“Of course, that’s going to involve conversations with our counterparts on the European continent.”

Pressed on the returns agreement, Ms Greenwood said: “I can confirm that there are discussions ongoing with the French government about how we stop this appalling and dangerous trade in people that’s happening across the English Channel.”

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A Conservative Party spokesman said: “The Conservative Party delivered on the democratic will of this country, and left the European Union.

“The last government did have a plan and no one – including Chris – has ever suggested otherwise.

“We created new deals with France to intercept migrants, signed returns agreements with many countries across Europe, including a landmark agreement with Albania that led to small boat crossings falling by a third in 2023, and developed the Rwanda deterrent – a deterrent that Labour scrapped, leading to 2025 so far being the worst year ever for illegal channel crossings.

“However, Kemi Badenoch and Chris Philp have been clear that the Conservatives must do a lot more to tackle illegal migration.

“It is why, under new leadership, we are developing g new policies that will put an end to this problem – including disapplying the Human Rights Act from immigration matters, establishing a removals deterrent and deporting all foreign criminals.”