NY sues crypto firms, FTX’s Nishad faces 75 years in jail, and Grayscale’s new BTC filing: Hodler’s Digest, Oct. 15-21
Top Stories This Week
Grayscale files for new spot Bitcoin ETF on NYSE Arca
Major cryptocurrency investment firm Grayscale Investments has filed a new application with the U.S. Securities and Exchange Commission for a new spot Bitcoin exchange-traded fund (ETF). The new filing aligns with Grayscale’s ongoing effort to convert its Grayscale Bitcoin Trust into a spot Bitcoin ETF, according to a statement from the firm. The news comes weeks after Grayscale won an SEC lawsuit for its spot Bitcoin ETF review, with a court of appeals ordering the SEC to explain why it rejected Grayscale’s application in June 2023. The company also filed with the SEC to list an Ether futures ETF in September.
New York Attorney General sues Gemini, Genesis, DGC for allegedly defrauding investors
New York’s attorney general has filed a lawsuit against cryptocurrency firms Gemini, Genesis and Digital Currency Group (DCG) for allegedly defrauding more than 23,000 investors through the Gemini Earn investment program. The suit claims that Gemini assured investors that the program was a low-risk investment, while investigations carried out by the office of New York State Attorney General Letitia James found that Genesis’ financials “were risky.” The lawsuit also charges Genesis’ former CEO, Soichiro Moro, and its parent company’s CEO, Barry Silbert, with defrauding investors by attempting to conceal more than $1.1 billion in losses. In addition, the court case looks to ban Gemini, Genesis and DCG from operating in the financial investment industry in New York.
Former FTX engineering director faces up to 75 years in prison following guilty plea
Nishad Singh, the former engineering director at now-defunct crypto exchange FTX, faces up to 75 years in prison for charges related to defrauding users of the crypto exchange. He pleaded guilty to fraud charges as part of his cooperation agreement with the U.S. prosecutors. During his testimony this week, Singh said that when liquidity issues at FTX began in November 2022, he felt “suicidal for some days” while dealing with alleged inconsistencies between the exchange’s public statements and its activities behind the scenes. Singh also claimed that Bankman-Fried had the habit of deciding on purchases through Alameda Research by himself.
Binance shutting down European Visa debit card in December
Binance Visa debit card services will close down in the European Economic Area in December, marking the latest setback for Binance. The termination of the card services was announced a day after the exchange restored euro deposits and withdrawals, which had been unavailable for a month after payments processor Paysafe dropped the exchange. Binance is still not onboarding new users in the United Kingdom due to the loss of a third-party service provider.
Elon Musk, Mark Cuban team up to contest SEC trial strategies
Elon Musk, Mark Cuban and others have collaboratively submitted a shared amicus brief to the Supreme Court of the United States to raise concerns about the U.S. Securities and Exchange Commission’s (SEC) approach to conducting internal proceedings without the inclusion of juries. The context of this legal challenge centers around the SEC vs. Jarkesy case. George Jarkesy argues that the SEC’s internal adjudication process, which lacks a jury and is overseen by an administrative law judge appointed by the commission, contradicts his Seventh Amendment rights. Effectively resulting in a single entity fulfilling the roles of judge, jury and enforcer.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $29,590, Ether (ETH) at $1,607 and XRP at $0.52. The total market cap is at $1.12 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Bitcoin SV (BSV) at 59.00%, Stacks (STX) at 25.91% and MX TOKEN (MX) at 25.26%.
The top three altcoin losers of the week are Conflux (CFX) at -8.03%, Frax Share (FXS) and Sui (SUI) at -6.35%.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Read also
Most Memorable Quotations
“We are all part of a bigger game, and Bitcoin is one of the strongest levers in that.”
Edward Snowden, technologist and whistleblower
“Using publicly available information to learn is not stealing. Nor is it an invasion of privacy, conversion, negligence, unfair competition, or copyright infringement.”
“I felt betrayed, something I’d put in blood, sweat and tears for five years turning out so horrible.”
Nishad Singh, former engineering director of FTX
“The games funded 2 years ago are going live over the next 12 months. We will see hits.”
Robbie Ferguson, co-founder and president of Immutable
“After extensive DAO forum discussion followed by community vote, the sunsetting of the Lido on Solana protocol was approved by Lido token holders and the process will begin shortly.”
“Any innovation — especially this one with financial impact, cultural value and status — will attract questioning during its downs.”
Anjali Young, co-founder of Collab.Land
Prediction of the Week
BTC price hits 2-month high amid bet Bitcoin will break $32K ‘soon’
On Oct. 20, data from Cointelegraph Markets Pro and TradingView captured new two-month Bitcoin highs of $30,233 on Bitstamp. BTC price showed continued strength during the Asia trading session on the same day, with a slight comedown taking the spot price back below $29,500.
With volatility still evident, market participants argued that a weekly candle close was needed in order to establish the rally’s true staying power. For Keith Alan, co-founder of monitoring resource Material Indicators, the 100-week moving average (MA) at $28,627 was of particular importance.
“This move is one to watch, but what I’m watching for right now is to see if this Weekly candle closes above the 100-Week MA and if next week’s candle can stay above it with no wicks below,” Alan wrote in part of an X post on the day. “Some might consider that a confirmation of a bull breakout, but this market is known for squeezes and fake outs so I’m looking for more confirmations. For me BTC will also need to take out prior resistance at $30.5k, $31.5k and ultimately $33k to call a bull breakout confirmed and validated.”
FUD of the Week
Fantom Foundation hot wallet hacked for $550K
The Fantom Foundation, the developer of the Fantom network, has been hacked for over $550,000 worth of cryptocurrency. The foundation confirmed the attack on X, claiming that most of the funds stolen belonged to other users and that 99% of the foundation’s funds remain safe. Blockchain security researchers initially reported that the attacker stole approximately $7 million in crypto. The Fantom Foundation later released an official statement saying that some of the wallets labeled “Fantom: Foundation wallet” were mislabeled by block explorers and that not all the stolen funds were from the foundation.
TrueCoin’s third-party vendor breach potentially leaks TUSD user data
TrueUSD (TUSD) announced a potential leak of certain Know Your Customer (KYC) and transaction history data after one of TrueCoin’s third-party vendors was compromised. The company was the operator of the TUSD stablecoin until July 13, 2023. The impact of the attack and the resultant data leak is yet to be identified, as the total number of users’ data was not revealed during the announcement. Data collected from such breaches — names, email addresses and phone numbers, among others — are typically used for phishing attacks. Attackers reach out to unwary investors by mimicking various crypto services, often promising high profits in short amounts of time.
Web3 game project allegedly hired actors to pose as executives in $1.6M exit scam
The development team for gaming project FinSoul carried out an alleged exit scam, siphoning away $1.6 million from investors through market manipulation, according to a recent report from blockchain security platform CertiK shared with Cointelegraph. The FinSoul team allegedly hired paid actors to pretend to be its executives, then raised funds for the sole purpose of developing a gaming platform. However, instead of actually creating the platform, the FinSoul team allegedly transferred $1.6 million in bridged Tether from investors to itself. Blockchain data indicates developers then laundered the funds through cryptocurrency mixer Tornado Cash.
Big Questions: What did Satoshi Nakamoto think about ZK-proofs?
What was once a passing interest of Bitcoin inventor Satoshi Nakamoto, zero-knowledge-proof technology is now a major part of the crypto world.
Ethereum restaking: Blockchain innovation or dangerous house of cards?
“Restaking” involves reusing staked Ether to earn fees and rewards. The restaked tokens can then help secure and validate other protocols. But many fear restaking could disrupt Ethereum’s chain itself.
Bitmain’s revenge, Hong Kong’s crypto rollercoaster: Asia Express
Bitmain allegedly fires staff for speaking out against salary cuts, Hong Kong investors lose faith in crypto after JPEX scandal, Bitget gets a new crypto credit card and more.
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Politics
Liz Truss calls for Trump-style ‘revolution’ in the UK after blaming Bank of England for her downfall
Liz Truss has defended her record as prime minister and called for “institutional change” in Britain in the same way she claims Donald Trump delivered “revolution in the US”.
The former Conservative leader has spoken to Sky’s Wilfred Frost on his The Master Investor Podcast nearly three years after she resigned as prime minister – 44 days after taking over from Boris Johnson.
Politics Hub: Follow live updates
Her downfall began when she and her then chancellor Kwasi Kwarteng unleashed £45bn of unfunded tax cuts on the markets in a mini-budget which sparked weeks of economic turmoil in 2022.
However, Ms Truss has now told Frost the fault for what happened during her premiership lay with the Bank of England (BoE) as she “wasn’t captain of the ship”.
She said: “The last time I looked, it’s the prime minister who is the democratically accountable person that runs the country, not the Bank of England… The Bank of England’s role is to work with the government to ensure financial stability, and they weren’t doing that. They were pursuing their own agenda.”
Ms Truss, the UK’s shortest-serving prime minister in history, added: “The fact is I wasn’t captain of the ship because I wasn’t running monetary policy. The Bank of England were running monetary policy. I’m very happy to take responsibility for things, provided I have the full ability to actually control them. I didn’t have the ability to control them.”
The former prime minister also accused the BoE and Office for Budget Responsibility (OBR) of briefing against her after the mini-budget.
She added: “My mistake, if you want to put it like that was underestimating the sheer malevolence of the economic blob in Britain.”
Liz Truss speaking in Washington in 2022. Pic: AP
‘We’ve lost our way’
Ms Truss also said there is “economic stagnation” and poor public services in the UK and this is at least party due to the “failures” of the BoE and the OBR as “institutions”.
She continued: “There’s no doubt we’ve lost our way. But I think what is happening now in Britain is the people are now realising how bad the situation is. And I think there is going be massive pressure… for institutional change in this country, and that is what we need, in a similar way to Trump delivering the revolution in the US.
“That is what we need. And I think that will happen.”
Read more politics news:
Mee the ‘eco-populist’ Green Party leader
What is the UK-France migrant returns deal?
Ms Truss later said she believes the UK is heading for “calamity” under Prime Minister Sir Keir Starmer and claimed the economy is in a worse state now than when she was in office.
She said she sees Sir Keir and Chancellor Rachel Reeves as part of the “economic orthodoxy” and added: “That has ruined this country, and we are heading for a calamity because of that.”
Ms Truss also said she doesn’t expect the Conservatives to win the next election and this will be partly due to a failure to take on the “leftist establishment”.
“So I don’t think (Tory leader Kemi Badenoch) is going to be prime minister at this stage,” she added.
Asked by Frost whether she will ever return to frontline politics, Ms Truss said: “I never rule anything out… what I’ve always been obsessed with is I want Britain to be a great nation again, and I’m depressed about how far we’ve sunk. The dire state of our economy is in the deindustrialisation. The fact that we don’t make things the same way we used to.”
The full conversation also includes an extensive debate about the mini-budget. Liz Truss was speaking on The Master Investor Podcast with Wilfred Frost, available to watch here and listen here.
In a joint statement, the SEC and CFTC said existing law does not block regulated exchanges from listing spot crypto products.
The new leader of the Green Party has revealed he spoke to Jeremy Corbyn this week amid suggestions there could be a pact between their two parties.
Zack Polanski, who comfortably beat his rivals Adrian Ramsay and Ellie Chowns to win the Green Party’s leadership election, told the Politics Hub with Sophy Ridge that he spoke to the former Labour leader on Monday.
There have been suggestions that the Greens could join forces with Mr Corbyn’s new party – which does not yet have a formal name – to avoid splitting the vote on the left.
Politics latest: Reeves’ authority not dented by reshuffle, No 10 says
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Polanski on Corbyn, NATO and flags
The question of a future potential pact with Mr Corbyn and his co-leader, the independent MP Zarah Sultana, became an issue in the Green Party’s leadership election, with Mr Polanski more keen on the idea than his co-leadership rivals.
Mr Polanski, who secured 20,411 votes – comfortably beating the 3,705 votes cast for the joint leadership bid of Mr Ramsay and Dr Chowns – praised Mr Corbyn for holding his own inquiry into the government’s conduct in Gaza, which will begin later this week.
The former Labour leader had tabled a private members’ bill calling for an independent public inquiry into the UK’s involvement in Israeli military operations in Gaza, but it did not progress in the House of Commons.
Speaking to the Politics Hub with Sophy Ridge, Mr Polanski said: “I spoke to him [Mr Corbyn] briefly yesterday.”
He said Mr Corbyn’s inquiry was “the exact kind of example where even if someone is from a different party, but I’m absolutely aligned with what they’re doing, then I’ll always call out what I think is good for this country and good for our global politics”.
My Corbyn congratulated Mr Polanski for his “stunning victory” after the results were announced, and added: “Your campaign took on the rich and powerful, stood up for the dignity of all marginalised communities, and gave people hope! Real change is coming. I look forward to working with you to create a fairer, kinder world.”
Mr Polanski, who is currently serving as deputy leader, won the election on a platform of “eco-populism”, which he says will make the Greens a real alternative to Labour and Reform UK.
The London Assembly member, who is not an MP, will now become the party’s only leader, after Bristol MP Carla Denyer stepped down from her joint role with Mr Ramsay, triggering the contest.
While Mr Polanski has strongly criticised the policies of Nigel Farage, he has acknowledged his cut-through with voters, and has argued that the Green Party needs to offer a bolder message to voters, in the guise of wealth taxes and net zero policies.
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In full: Tuesday’s Politics Hub
The new Green leader also weighed into the debate about flying the St George’s Cross, after the prime minister Sir Keir Starmer said he had one in his office – while also cautioning against the flag being used as a political statement.
Read more:
Inside Jeremy Corbyn’s new party and the battle for leadership
Hundreds of empty flats sum up UK’s housing crisis
Asked what he thought of the St George’s Cross, Mr Polanski said: “I think that migration is at the heart of this country. Migrants contribute a huge amount. That’s not a new thing – that has been traditionally throughout our history and that the English flag means different things to different people.
“And I think if people want to wave it because they’re being patriotic, particularly at football tournaments, I think there’s a huge space for patriotism in this country.
“But I’m also aware that for lots of people who have arrived in this country or people who aren’t even migrants, to be frank, Black and Asian communities, the flag can mean very different things around colonialism and empire. And that’s the thing about flags. It means different things to different people.”
Zack Polanski. Pic: PA
He said he believed the idea of flying the English flag outside homes not in the context of sport was “quite imported from America”.
“If people want to do that then I think that’s up to people what they want to do.
“But I think at times of heightened tensions, I would say patriotism is actually about loving your neighbour, whether they’re from this country or not.”
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