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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Homelessness minister Rushanara Ali has resigned after reportedly hiking the rent on a property she owns by hundreds of pounds – something described by one of her tenants as “extortion”.
That was just weeks after the previous tenants’ contract ended, The i Paper said.
Four tenants who rented a house in east London from Ms Ali were sent an email last November saying their lease would not be renewed, and which also gave them four months’ notice to leave, the newspaper reported.
The property was then re-listed with a £700 rent increase within weeks, the publication added.
In a letter to the prime minister, Ms Ali said that remaining in her role would be a “distraction from the ambitious work of this government”.
She added: “Further to recent reporting, I wanted to make it clear that at all times I have followed all relevant legal requirements.
“I believe I took my responsibilities and duties seriously, and the facts demonstrate this.”
Laura Jackson, one of Ms Ali’s former tenants, said she and three others collectively paid £3,300 in rent.
Weeks after she and her fellow tenants had left, the self-employed restaurant owner said she saw the house re-listed with a rent of around £4,000.
“It’s an absolute joke,” she said. “Trying to get that much money from renters is extortion.”
Sir Keir Starmer said Ms Ali’s work in government would leave a ‘lasting legacy’. Pic: PA
Ms Ali’s house, rented on a fixed-term contract, was put up for sale while the tenants were living there, and was only relisted as a rental because it had not sold, according to The i Paper.
The government’s Renters’ Rights Bill includes measures to ban landlords who end a tenancy to sell a property from re-listing it for six months.
The Bill, which is nearing its end stages of scrutiny in Parliament, will also abolish fixed-term tenancies and ensure landlords give four months’ notice if they want to sell their property.
Something Sir Keir’s increasingly unpopular government could have done without
Rushanara Ali’s swift and humiliating demise is a classic example of paying the price for the politician’s crime of “Do as I say, not as I do”.
She was Labour’s minister for homelessness, for goodness’ sake, yet she ejected tenants from her near-£1m town house then hiked the rent.
A more egregious case of ministerial double standards it would be difficult to imagine. She had to go and was no doubt told by 10 Downing Street to go quickly.
MP for the East End constituency of Bethnal Green and Stepney, Ms Ali was the very model of a modern Labour minister: a degree in PPE from Oxford University.
In her resignation letter to Sir Keir Starmer, she said she is quitting “with a heavy heart”. Really? She presumably didn’t have a heavy heart when she ejected her four tenants.
She’d previously spoken out against “private renters being exploited” and said the government would “empower people to challenge unreasonable rent increases”.
She was charging her four former tenants £3,300 a month. Yet after they moved out, she charged her new tenants £4,000, a rent increase of more than 20%.
In an area represented by the left-wing firebrand George Galloway from 2005 to 2010, Ms Ali had a majority of under 1,700 at the election last year.
Ominously for Labour, an independent candidate was second and the Greens third. No doubt Jeremy Corbyn’s new party will also stand next time.
In her resignation letter to the PM, Ms Ali said continuing in her ministerial role would be a distraction. Too right.
A distraction Sir Keir and his increasingly unpopular government could have done without.
Responding to her resignation, shadow housing secretary Sir James Cleverly said: “I said that her actions were total hypocrisy and that she should go if the accusations were shown to be true.”
A Liberal Democrat spokesperson said: “Rushanara Ali fundamentally misunderstood her role. Her job was to tackle homelessness, not to increase it.”
Read more:
First migrants detained under returns deal with France
Tropical Storm Dexter to bring potential heatwave next week
Previously, a spokesperson for Ms Ali said the tenants “stayed for the entirety of their fixed term contract, and were informed they could stay beyond the expiration of the fixed term, while the property remained on the market, but this was not taken up, and they decided to leave the property”.
The prime minister thanked Ms Ali for her “diligent work” and for helping to “deliver this government’s ambitious agenda”.
Sir Keir Starmer said her work in putting in measures to repeal the Vagrancy Act would have a “significant impact”.
And he said she had been trying to encourage “more people to engage and participate in our democracy”, something that would leave a “lasting legacy”.
Politics
Rushanara Ali: Humiliating demise for Labour minister after a most egregious case of double standards
Rushanara Ali’s swift and humiliating demise is a classic example of paying the price for the politician’s crime of “do as I say, not as I do”.
She was Labour’s minister for homelessness, for goodness’ sake, yet she ejected tenants from her near-£1m town house and then hiked the rent.
Politics Hub: Minister’s resignation as it happened
A more egregious case of ministerial double standards it would be difficult to imagine. She had to go and was no doubt told by 10 Downing Street to go quickly.
Rushanara Ali reportedly hiked the rent on a property she owns. Pic: PA
‘A heavy heart’ – really?
MP for the East End constituency of Bethnal Green and Stepney, Ms Ali was the very model of a modern Labour minister: A degree in PPE from Oxford University.
In her resignation letter to Sir Keir Starmer, she said she is quitting “with a heavy heart”. Really? She presumably didn’t have a heavy heart when she ejected her four tenants.
She’d previously spoken out against “private renters being exploited” and said her government would “empower people to challenge unreasonable rent increases”.
The now former minister was charging her four former tenants £3,300 a month. Yet after they moved out, she charged her new tenants £4,000 – a rent increase of more than 20%.
Read more politics news:
Fact-checking Farage’s claims
Why chancellor has little to cheer
The report about the Labour MP first emerged in the i newspaper. Pic: UK Parliament
A fragile constituency for Labour?
In an area represented by the left-wing firebrand George Galloway from 2005 to 2010, Ms Ali had a majority of under 1,700 at the election last year.
Ominously for Labour, an independent candidate was second and the Greens third. No doubt Jeremy Corbyn’s new party will also stand next time.
In her resignation letter to the PM, Ms Ali said continuing in her ministerial role would be a distraction. Too right.
A distraction Sir Keir and his increasingly unpopular government could have done without.
Federal Reserve Board of Governors member Adriana Kugler announced her resignation on Aug. 1, paving the way for a Trump nominee at the US central bank.
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