Paxos’ $500K Bitcoin fee, FTX tokens sales set to begin and other news: Hodler’s Digest, Sept. 10-16
Top Stories This Week
Paxos confirms it’s responsible for paying a $500K Bitcoin transaction fee
The Bitcoin miner who received 19.8 BTC in fees from blockchain infrastructure firm Paxos has returned the funds following Paxos’ claim that it made a mistake in paying over $500,000 in transfer fees. On Sept. 10, Paxos paid the six-figure fee to move $2,000, with the average network fee typically being around $2. The company later acknowledged the mistake, confirming the transfer came from its servers. Almost a day after Paxos’ claims, the Bitcoin miner who received the funds went on X (formerly Twitter) to express frustrations after agreeing to refund the amount to Paxos. The funds were returned on Sept. 15.
Court approves sale of FTX digital assets
A bankruptcy court has approved the sale of FTX digital assets in weekly batches through an investment adviser and under preestablished guidelines. The sale does not include Bitcoin, Ether and “certain insider-affiliated tokens,” which can be sold through a separate decision by FTX after 10 days’ notice. FTX sales are not expected to have a heavy impact on markets. According to a recent shareholder update, the bankrupt exchange has $833 million worth of Bitcoin and Ether. A total of $3.4 billion is held in Digital Assets A — the top 10 assets the company holds — which include Solana, Bitcoin, Ether, Aptos and others.
Gemini Earn users could recover all funds in new DCG remuneration scheme
Digital Currency Group has proposed a new agreement plan for the creditors of the now-bankrupt Genesis Global. The plan estimates unsecured creditors will receive “a 70–90% recovery with a meaningful portion of the recovery in digital currencies.” Additionally, the remuneration plan says the recovery of claims for Gemini Earn users would be projected at “approximately 95–110%” without any contribution from Gemini. According to the filing: “If Gemini were to agree to provide $100 million to Gemini Earn users under the Proposed Agreement, as it previously did, there would be little doubt Gemini Earn users would receive more than full recovery.”
Franklin Templeton files for spot Bitcoin ETF
Asset manager Franklin Templeton applied with the United States Securities and Exchange Commission to launch a spot Bitcoin exchange-traded fund (ETF). According to the application, the fund would be structured as a trust. Coinbase would custody the BTC, and The Bank of New York Mellon would be the cash custodian and administrator. Franklin Templeton has $1.5 trillion in assets under management and joins a long list of asset managers waiting for regulatory approval. The SEC recently delayed decisions on spot ETF applications from WisdomTree, Valkyrie, Fidelity, VanEck, Bitwise and Invesco on Aug. 31.
Two more top executives depart Binance.US amid layoffs, SEC action
The exodus of executives from crypto exchange Binance has reached the firm’s offshoot in the United States, as at least three top employees left Binance.US over the past few days. This week’s departures included the exchange’s CEO, Brian Shroder, alongside legal head Krishna Juvvadi and chief risk officer Sidney Majalya. The mass exit is believed to be tied to the ongoing U.S. investigation into Binance and Binance.US. The SEC sued Binance.US, Binance and CEO Changpeng Zhao in June for allegedly engaging in unregistered securities operations and other improprieties. On Aug. 28, the agency requested to file sealed documents in the case, fueling concerns about a criminal probe by the U.S. Department of Justice.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $26,465, Ether (ETH) at $1,628 and XRP at $0.50. 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 Toncoin (TON) at 21.30%, VeChain (VET) at 11.94% and Bitcoin Cash (BCH) at 11.36%.
The top three altcoin losers of the week are ApeCoin (APE) at -16.82%, Astar (ASTR) at 14.47% and Flare (FLR) at 12.61%.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
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Prediction of the Week
Bitcoin price all-time high will precede 2024 halving — New prediction
Bitcoin has a $250,000 target for after its next block subsidy halving — but new all-time highs will come sooner, according to the latest BTC price prediction from BitQuant, a popular social media commentator who sees a rosy future for the largest cryptocurrency.
On Sept. 15, the pseudonymous “central banker and Bitcoiner” revealed a pre-halving target above $69,000. “No, Bitcoin is not going to top before the halving,” he wrote in part of the commentary.
Bitcoin has just over six months before the halving, the event that cuts miner rewards earned per block by 50% every four years. “No, BTC is not going to $160K because the magnitude of every pullback is large,” he wrote, adding that “this means it will peak after the halving, in 2024. And yes, the target price is around $250K.”
FUD of the Week
SEC charges company behind Stoner Cats NFT series with unregistered securities sale
Stoner Cats 2 LLC (SC2), the company behind the Stoner Cats animated web series, has agreed to a cease-and-desist order and other measures imposed by the U.S. Securities and Exchange Commission after being charged with conducting an unregistered offering of crypto-asset securities in the form of nonfungible tokens (NFTs). According to the SEC, SC2 sold more than 10,000 NFTs for about $800 apiece. The sale took 35 minutes and occurred on July 27, 2021, and the proceeds were used to fund the series. Besides agreeing to the cease-and-desist order, SC2 will pay a civil penalty of $1 million.
OneCoin co-founder Greenwood gets 20 years in US jail for fraud, money laundering
Karl Greenwood, co-founder of OneCoin with Ruja Ignatova, was sentenced in the United States to 20 years in prison and ordered to pay $300 million on Sept. 20. Ignatova remains at large. Greenwood, who is a citizen of the United Kingdom and Sweden, was sentenced in a court in New York. In a statement by the Justice Department, U.S. Attorney Damian Williams called OneCoin “one of the largest fraud schemes ever perpetrated.” The multilevel marketing and Ponzi scheme reaped $4 billion from 3.5 million victims, the statement said. Ignatova has not been seen since October 2017 and is on the U.S. Federal Bureau of Investigation’s Ten Most Wanted List.
North Korea’s Lazarus Group responsible for $55M CoinEx hack
The attack on crypto exchange CoinEx, which drained at least $55 million, was carried out by the North Korean hacker group Lazarus, according to blockchain security firm SlowMist and pseudonymous on-chain investigator ZachXBT. The hacker group was identified after it inadvertently exposed its address, which was the same one used in the recent Stake and Optimism hacks. On Sept. 12, CoinEx saw large outflows of funds to an address without any prior history. Security experts immediately suspected that the exchange was breached, with initial estimates reaching approximately $27 million.
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US Representative Stephen Lynch pressed Federal Reserve Vice Chair Michelle Bowman on Tuesday over her past remarks encouraging banks to “engage fully” with digital assets, questioning the Fed’s role in advancing crypto frameworks while showing confusion over the definition of stablecoins.
In a Tuesday oversight hearing, Lynch asked Bowman, the Fed vice chair for supervision, about remarks she had made at the Santander International Banking Conference in November. According to the congressman, Bowman said she supported banks “[engaging] fully” with respect to digital assets.
However, according to Bowman’s comments at the conference, she referred to “digital assets” rather than specifically cryptocurrencies. The questioning turned into Lynch asking Bowman about distinctions between digital assets and stablecoins.
The Fed official said that the central bank had been authorized by Congress — specifically, the GENIUS Act, a bill aimed at regulating payment stablecoins — to explore a framework for digital assets.
“The GENIUS Act requires us to promulgate regulations to allow these types of activities,” said Bowman.
While the price of many cryptocurrencies can be volatile, stablecoins, like those pegged to the US dollar, are generally “stable,” as the name suggests. Though there have been instances where some coins have depegged from their respective currencies, such as the crash of Terra’s algorithmic stablecoin in 2022, the overwhelming majority of stablecoins rarely fluctuate past 1% of their peg.
Related: Atkins says SEC has ‘enough authority’ to drive crypto rules forward in 2026
Bowman said in August that staff at the Fed should be permitted to hold small “amounts of crypto or other types of digital assets” to gain an understanding of the technology.
FDIC acting chair says stablecoin framework is coming soon
Also testifying at the Tuesday hearing was Travis Hill, acting chair of the Federal Deposit Insurance Corporation. The government agency is one of many responsible for implementing the GENIUS Act, which US President Donald Trump signed into law in July.
According to Hill, the FDIC will propose a stablecoin framework “later this month,” which will include requirements for supervising issuers.
Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice
Over a third of people think Rachel Reeves exaggerated economic bad news in the run-up to the budget – twice as many as thought the chancellor was being honest, a new Sky News poll has found.
Some 37% told a YouGov-Sky News poll that Ms Reeves made out things were worse than they really are. This is much higher than the 18% who said she was broadly honest, and the 13% who said things were better than she presented.
This comes in an in-depth look at the public reaction to the budget by YouGov, which suggests widespread disenchantment in the performance of the chancellor.
Just 8% think the budget will leave the country as a whole better off, while 2% think it will leave them and their family better off.
Some 52% think the country will be worse off because of the budget, and 50% think they and their family will be worse off.
This suggests the prime minister and chancellor will struggle to sell last week’s set-piece as one that helps with the cost of living.
Some 20% think the budget worried too much about help for older people and didn’t have enough for younger people, while 23% think the reverse.
The poll found 57% think the chancellor broke Labour’s election promises, while 13% think she did not and 30% are not sure. Some 54% said the budget was unfair, including 16% of Labour voters.
And it arguably gets worse…
This comes as the latest Sky News-Times-YouGov poll showed Labour and the Tories are now neck and neck among voters.
The two parties are tied on 19% each, behind Reform UK on 26%. The Greens are on 16%, while the Liberal Democrats are on 14%.
This is broadly consistent with last week, suggesting the budget has not had a dramatic impact on people’s views.
However, the verdict on Labour’s economic competence has declined further post-budget.
Asked who they would trust with the economy, Labour are now on 10% – lower than Liz Truss, who oversaw the 2022 mini-budget, and also lower than Jeremy Corbyn in the 2019 election.
The Tories come top of the list of parties trusted on the economy on 17%, with Reform UK second on 13%, Greens on 8% and Lib Dems on 5%. Nearly half, 47%, don’t know or say none of them.
Only 57% of current Labour voters say the party would do the best job at managing the economy, falling to 25% among those who voted Labour in the 2024 election.
Some 63% of voters think Ms Reeves is doing a bad job, including 20% of current Labour voters, while just 11% of all voters think she is doing a good job.
A higher proportion – 69% – think Sir Keir Starmer is doing a bad job.
Paul Atkins, chair of the US Securities and Exchange Commission, said that the agency can continue advancing digital asset regulation without legislation from Congress, signaling his expectations for the industry in 2026.
In a CNBC interview released on Tuesday, Atkins said the SEC was providing “technical assistance” as Congress considered legislation for digital asset regulation, likely referring to the market structure bill working its way through the US Senate. Atkins said that although the agency’s operations were impacted by the longest US government shutdown in the country’s history, he continued to make progress on “rules that are focused on helping [the crypto] sector.”
“We have enough authority to drive forward,” said Atkins. “I’m looking forward to having an innovation exemption that we’ve been talking about now. We’ll be able to get that out in a month or so.”
Atkins, whom the US Senate confirmed to chair the SEC in April after his nomination by US President Donald Trump, has taken steps to reduce the number of enforcement actions against crypto companies, including by issuing no-action letters for decentralized physical infrastructure networks.
His actions align with many of the policy directives from the White House under Trump, who has issued several executive orders touching on crypto and blockchain.
Related: Republicans urge action on market structure bill over debanking claims
The SEC chair rang the opening bell at the NYSE on Tuesday, outlining his plans for the agency “on the cusp of America’s 250th anniversary.”
US regulators are still awaiting progress on a market structure bill
Lawmakers on the US Senate Agriculture Committee and the Senate Banking Committee are taking steps to move forward with a digital asset market structure bill, which will outline the regulatory authority of agencies, including the SEC and Commodity Futures Trading Commission, over cryptocurrencies.
Senate Banking Chair Tim Scott said that the committee planned to have the bill ready for markup in December.
Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice
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