OpenAI’s Sam Altman ousted, BlackRock and Fidelity seek Ether ETF, and more: Hodler’s Digest, Nov. 12-18
Top Stories This Week
Sam Altman ousted from OpenAI, CTO Mira Murati named interim CEO
ChatGPT developer OpenAI removed founder Sam Altman from his CEO position on Nov. 17. Chief technology officer Mira Murati is now serving as interim CEO. According to a blog post, the board of directors engaged in a “deliberative review process,” which resulted in the conclusion that Altman “was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities.” Shortly after, OpenAI co-founder and president Greg Brockman revealed his exit from the organization.
BlackRock files S-1 form for spot Ether ETF with SEC
The world’s largest asset manager, BlackRock, officially filed for a spot Ether exchange-traded fund (ETF) with the United States Securities and Exchange Commission (SEC) on Nov. 15. The ETF, dubbed the iShares Ethereum Trust, aims to “reflect generally the performance of the price of Ether,” according to the S-1 filed with the SEC. The iShares brand is associated with BlackRock’s ETF products. The move by BlackRock comes nearly a week after it registered the iShares Ethereum Trust with Delaware’s Division of Corporations and almost six months after it filed its spot Bitcoin ETF application. Following BlackRock’s filing, asset manager Fidelity also sought a green light for its own Ether ETF.
Australia to impose capital gains tax on wrapped cryptocurrency tokens
The Australian Taxation Office (ATO) has issued guidance on capital gains tax (CGT) treatment with regard to decentralized finance and wrapping crypto tokens for individuals, confirming that Australians are liable for capital gains taxes when wrapping and unwrapping tokens. The transfer of crypto assets to an address that the sender does not control or that already holds a balance will be regarded as a taxable CGT event, the ATO said in its statement. The CGT event will trigger depending on whether the individual recorded a capital gain or loss. A similar approach has been considered for taxing liquidity pool users, providers and DeFi interest and rewards. In addition, wrapping and unwrapping tokens will also be subject to triggering a CGT event.
FTX Foundation staffer fights for $275K bonus promised by SBF
An employee of FTX’s charity wing recruited by Sam Bankman-Fried is trying to get paid $275,000, the remainder of his claimed 2022 salary bonus. Ross Rheingans-Yoo’s lawyers argued in a court filing that only $375,000 of his $650,000 bonus was paid by FTX. They claim the remaining funds were owed when the crypto exchange filed for bankruptcy in November 2022. The fate of Rheingans-Yoo’s bonus will be determined by a Delaware bankruptcy judge who is overseeing FTX’s Chapter 11 bankruptcy.
WisdomTree amends S-1 form spot Bitcoin ETF filing as crypto awaits SEC decisions
WisdomTree filed an amended Form S-1 spot Bitcoin ETF prospectus with the U.S. SEC on Nov. 16. The update comes a few months after WisdomTree refiled its spot Bitcoin ETF application in June 2023, proposing a rule change to list and trade shares of the WisdomTree Bitcoin Trust. The amended prospectus mentions that the WisdomTree Bitcoin Trust ETF will trade under ticker symbol BTCW, with Coinbase Custody Trust serving as the custodian holding all of the trust’s Bitcoin on its behalf.
Winners and Losers
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Celestia (TIA) at 103.39%, yearn.finance (YFI) at 88.04% and THORChain (RUNE) at 54.38% .
The top three altcoin losers of the week are Gas (GAS) at -64.85%, FTX Token (FTT) at -35.17% and Neo (NEO) at -20.27%.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Most Memorable Quotations
“Education and utility-based projects where there is real utility for usage is how we can get regulators onboard.”
Navin Gupta, managing director of South Asia, Middle East and North Africa at Ripple
“We believe derivatives will foster additional liquidity and hedging opportunities in crypto and represent the next critical step in this market’s continued growth.”
John Palmer, president of Cboe Digital
“I am very bullish about a whole bunch of different things going on in crypto. […] It will be a multichain world.”
Brad Garlinghouse, CEO of Ripple
“Phone and the internet aren’t to be blamed for terror financing and crypto shouldn’t either.”
French Hill, United States Representative
“I believe that code is a form of speech and is protected by the First Amendment.”
Vivek Ramaswamy, entrepreneur and U.S. presidential candidate
“The digital euro would also mean that each and every one of us could be totally monitored. […] Anyone who is against surveillance and for freedom does not need a digital euro!”
Joana Cotar, member of the German Bundestag
Prediction of the week
Bitcoin traders’ BTC price dip targets now include $30.9K bottom
Bitcoin circled $36,000 on Nov. 16 as analysis hoped for a deeper price comedown. Having failed to establish a breakout beyond 18-month highs during the week, Bitcoin was uninspiring for market participants, some of whom hoped to see a fresh correction to retest lower levels.
“Would be happy to see this latest rally complete the round trip back to $35k. Would be even happier to see a retest of $33k,” monitoring resource Material Indicators wrote in part of the day’s commentary on X (formerly Twitter).
A snapshot of BTC/USDT order book liquidity showed support building at $35,000. Material Indicators co-founder Keith Alan added that Bitcoin’s rising 21-day simple moving average had been functioning as support in recent days.
“BTC continues to fight for the range above $36.5k,” he commented.
Popular pseudonymous trader Daan Crypto Trades likewise flagged $35,700 and $38,000 as the main downside and upside levels to watch, respectively. Fellow pseudonymous trader Gaah, a contributor to on-chain analytics platform CryptoQuant, meanwhile warned that a steeper correction could take the market closer to $30,000.
FUD of the Week
Cybersecurity team claims up to $2.1B in crypto stored in old wallets is at risk
Cybersecurity company Unciphered disclosed a vulnerability dubbed “Randstorm,” which it said affects millions of crypto wallets that were generated using web browsers from 2011 to 2015. According to the firm, while working to retrieve a Bitcoin wallet, it discovered a potential issue for wallets generated by BitcoinJS and derivative projects. The issue could affect millions of wallets and around $2.1 billion in crypto assets, according to the cybersecurity company.
Swan Bitcoin to terminate customer accounts that use crypto-mixing services
Bitcoin services platform Swan Bitcoin warned its customers that it would be forced to terminate accounts found interacting with crypto-mixing due to the regulatory obligations of its partner banks. Customers learned about the new policy in a letter suggesting the changes are due to the United States Financial Crimes Enforcement Network’s proposed rule establishing new responsibilities on firms processing transactions from mixing services.
ENS developers urge Unstoppable Domains to drop patents or face lawsuit
The founder and lead developer of Ethereum Name Service (ENS), Nick Johnson, is urging blockchain domains company Unstoppable Domains to drop a recently awarded patent or face a lawsuit, according to an open letter shared on X (formerly Twitter). According to Johnson, Unstoppable’s recently awarded patent is “based entirely on innovations that ENS developed and contains no novel innovations of its own.” Unstoppable Domains’ founder Matthew Gould responded in the thread, claiming that there are “multiple naming systems.”
Top Magazine Pieces of the Week
I spent a week working in VR. It was mostly terrible, however…
Cointelegraph Magazine journalist Felix Ng spent a week working in virtual reality. It was mostly terrible… but does have some potential.
Breaking into Liberland: Dodging guards with inner-tubes, decoys and diplomats
“Bitcoin is really one of the most foundational parts of Liberland — 99% of our reserves are in BTC.”
No civil protection for crypto in China, $300K to list coins in Hong Kong? Asia Express
Hong Kong exchanges expand amidst continued investor interest, Philippines to issue $180M in tokenized bonds, China rules out civil protection for crypto, and more!
The most engaging reads in blockchain. Delivered once a
Rishi Sunak suggests more tax cuts are on the way – but refuses to commit to triple lock manifesto pledge
Rishi Sunak has suggested more tax cuts are on the way because the economy has “turned a corner”.
The prime minister told reporters that while he would not comment on specifics, trimming taxes was “the direction of travel from this government”.
But it came as he refused to say if the pensions triple lock would be in the next Conservative Party manifesto – despite Downing Street insisting in September that it was “committed” to the policy.
Mr Sunak’s comments echo similar remarks by his ministers in recent weeks.
Chancellor Jeremy Hunt also said last month that the economy had “turned a corner” just before he unveiled a cut to National Insurance in the Autumn Statement.
However, four million people could also end up paying higher taxes if their wages rise after the government decided to continue the freeze on tax thresholds.
Reports suggest the Conservatives are considering additional cuts in 2024 as the party tries to woo voters and reduce Labour’s 20-point lead in opinion polls ahead of the next general election, which must take place by January 28 2025.
Cuts to stamp duty and inheritance tax are among the options reportedly being looked at by ministers.
When asked about the two policies, Mr Sunak said: “I would never comment on specific taxes. But what I will just say, though, is we have turned a corner.
“We have got inflation down, as I said we would, we have grown the economy and we are now focused on controlling spending and controlling welfare so we can cut taxes. So when we can do more, we will.”
He added: “We want to grow the economy, we want to reward people’s hard work and aspirations and cut their taxes responsibly. That is the direction of travel from this government.
“If you want controlled public spending, controlled welfare and your taxes cut, then vote Conservative.”
Read more from Sky News:
Starmer’s praise of Margaret Thatcher sparks party backlash
Fury as COP28 head questions ‘science’ of cutting fossil fuels
Abu Dhabi fund moves to take control of Daily Telegraph
Mr Sunak was unable to make similar promises about the triple lock, which ensures the state pension must rise every April by whichever is highest out of average earnings, inflation or 2.5%.
The policy has come under fire in recent months by critics who claim it has become too expensive and gives the government less financial “headroom” to deal with economic shocks.
Some senior Tories have called for it to be scrapped and Labour has refused to guarantee the triple lock will remain in place if it wins the next election.
While the government continued with the policy in its recent Autumn Statement, ensuring the state pension will rise by 8.5% in April 2024 to £221.20 a week, Mr Sunak refused to be drawn when asked directly if it would be in the next Tory manifesto.
Speaking to journalists as he flew between the UK and Dubai for the COP28 summit, he replied: “[I’m] definitely not going to start writing the manifesto on the plane, as fun as that would be.”
Mr Sunak acknowledged there had been “some scepticism” about if policy was going to form part of the Autumn Statement, but said its inclusion had been “a signal of our commitment to look after our pensioners who have put a lot into our country”.
Binance’s explosive growth led to compliance failures – CEO Richard Teng on $4.3B settlement
“As part of the settlement, CZ cannot be involved in the day-to-day running of the company’s operations,” Richard Teng explains.
Despite that, the incumbent CEO of Binance cuts the figure of a man reveling in the challenges ahead. Speaking to Cointelegraph just two weeks after taking over from outgoing CEO Changpeng ‘CZ’ Zhao, Teng seems to be relishing being at the helm of the world’s largest cryptocurrency exchange:
“I’m taking the baton and pushing ahead with our growth agenda while working very closely with global regulators.”
Teng believes that the “overcast” conditions clouding Binance in recent months are lifting following its staggering $4.3 billion settlement with the United States Justice Department relating to a raft of violations of U.S. regulations and sanctions programs.
$4.3B settlement a result of early gaps in compliance
The exchange has paid dearly for mistakes made during its meteoric growth from 2017 onwards. Teng recalls how Zhao built Binance from a team of six people to a global operation consisting of thousands of employees that serves a user base estimated to be more than 166 million.
“In those very early days while we were building up the company, there were gaps in terms of compliance. That resulted in all these breaches and mistakes, but these are historical issues,” Teng says.
The shortcomings of its early compliance regime have led to the largest crypto-related settlement in U.S. history. However, Teng contends the company has always ensured its user funds, security, and safety have remained “sacrosanct.”
“U.S. agencies have scrutinized our operations in great detail for us to reach this settlement, and there’s no allegation of any misappropriation of user funds,” he adds.
Binance’s obligations to U.S. authorities
Binance is now left to shoulder the ongoing cost and scrutiny that its settlement with U.S. authorities involves. This includes a five-year monitorship and significant compliance undertakings to ensure “Binance’s complete exit from the United States.”
Teng wouldn’t be drawn into the details of Binance.US’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) over alleged securities violations. Still, he maintains the company has factored in the costs of meeting the requirements set out in its settlement and its case with the SEC.
The Binance CEO is also bound to non-disclosure agreements relating to its $4.3 billion settlement and would not comment on the means of payment of the penalty. Cointelegraph understands that Binance is in the process of paying its assessment, while a separate case brought against CZ will be paid personally by the former CEO.
The company also confirmed that the movement of some $3.9 billion worth of USDT tokens reported on Nov. 21 was “unrelated to resolution matters” with the U.S. Justice Department.
Was Binance treated unfairly?
Prominent figures in the cryptocurrency space, including former BitMEX CEO Arthur Hayes and Galaxy Digital’s Mike Novogratz, have commented on the disparity between the treatment of Binance and mainstream finance firms in recent years.
Teng weighed in on the perception that “Wall Street Banks” have not been subject to the same treatment despite arguably even bigger failings.
“Fines in terms of the financial sector are not uncommon. If you do a Google search of the list of fines paid by financial institutions, that list is close to $90 billion in fines,” Teng says.
Whether Binance has been made an example of is not a consideration. Nevertheless, the exchange could be the “most regulated exchange globally”, given that Binance operates in 18 different jurisdictions.
Binance is keenly focused on compliance from now on. The company has grabbed headlines for headhunting strategic individuals to navigate regulatory requirements in different jurisdictions.
Teng says the company has “invested heavily” in this regard, pointing to key talent in its compliance team with backgrounds in regulatory agencies like the SEC and traditional financial institutions, including the likes of Morgan Stanley and Barclays.
Building out of UAE, France
Binance remains a global operation but the company has set down two regional headquarters. The United Arab Emirates (UAE) serves as its headquarters for MENA region operations, while France is its European base.
The former region is familiar territory to Teng, who previously lived in the UAE for nine years and served as CEO for local regulator Abu Dhabi Global Markets. His role involved laying down a cryptocurrency framework for the local ecosystem.
“When I first got in touch with crypto, my take was this is the future of finance. But for this to really gain traction and for mass adoption to be brought about, you need two elements,” Teng explains.
Clarity of rules and regulations was the first consideration, and the second was fostering institutional adoption. The latter point remains crucial to Teng as it brings in investors and liquidity and drives research.
As a result, the UAE has emerged as a proverbial oasis for the cryptocurrency and blockchain sector. It continues to attract global players as a base of operations in the MENA region.
The implementation of Europe’s Markets in Crypto-Assets regulations also bodes well for Binance’s prospects in the region.
“You have clarity of rules to operate in 27 different jurisdictions,” Teng says, which provides a blanket set of requirements for the industry that has to date suffered from “disparity in terms of rules”.
Binance was forced to terminate its services in the Netherlands in June 2023 after failing to satisfy registration requirements to obtain a local virtual asset service provider (VASP) license. MiCA could serve as a means to expand into new markets through 2024 and beyond.
Stepping into CZ shoes
Undoubtedly, stepping into CZ’s shoes is an unenviable task. Teng describes Binance’s founder as an inspirational leader and great mentor focused on execution.
The incumbent is also honest in his understanding that he cannot replace CZ’s role as a founder-CEO, but the current landscape also lends to the merits of a fresh face and new approaches.
“What I can do is bring my own values and expertise to the table in a maturing company. Six years ago, compared to now, Binance is totally different,” Teng explains. The new CEO will report to a board of directors, which will act as the governing authority of the company.
If and when he has time to blow off some steam, Teng hopes to maintain routine in his private life. The CEO enjoys exercising, doing a mix of “weights, cardio and core”. He’s also a bookworm, citing Elon Musk’s biography by Walter Isaacson as his most recent read.
NHS will remain free at point of use ‘as long as I’m alive’, new health secretary Victoria Atkins vows
The new health secretary has promised the NHS will remain free at the point of use as long as she is “alive” as the service gears up for another difficult winter.
Victoria Atkins, who replaced Steve Barclay in Rishi Sunak’s most recent reshuffle, made the commitment while discussing the “unique” pressures the NHS faces every year.
“We have 11 million inpatients a year so the scale of the NHS is unique around the world,” she told Sunday Morning with Trevor Phillips on Sky News.
“It is also unique because of the very fact that our care is free at the point of use. And that will continue for as long as I’m alive.”
Her commitment came as the NHS continues to suffer acute pressures, including a waiting list of an estimated 6.5 million people at the end of September and a high number of staff vacancies.
The difficulties facing the NHS has generated questions about its future, with the British Social Attitudes survey finding that the British public is the unhappiest it has ever been with the health service – but that it still supports it in principle.
Ms Atkins admitted there would be a “winter crisis” in the health service over the coming weeks and months as temperatures drop and people contract more illnesses.
She said the government had started preparing for the winter with an urgent and emergency care plan and that, having met its target to recruit 50,000 more nurses, it was “beginning to meet” the target of 5,000 more beds in hospital in a bid to cut delays.
Asked about the fact that three coroners had written to her to warn that ambulance delays were already causing unnecessary deaths, Ms Atkins said she was “very concerned” but that 800 new ambulances would be brought into the service.
She also claimed that category two ambulance times – which cover urgent calls for problems including strokes, and demand a response time of 18 minutes – had already improved.
Sir Trevor read out statistics from NHS England which showed that in 2014, the total number of people who had to wait 12 hours for hospital admission after a decision had been taken to admit them was 489.
In October this year, the average number of people who had to wait over 12 hours stood at 1,440 – nearly three times as many, he said.
Asked what she would do to solve the problem, Ms Atkins said hospital discharge was key.
“What we are doing to address this is almost looking at the end rather than the beginning, because if we can move people out of the system more quickly, then the flow through the hospitals is much smoother and quicker.”
Elsewhere in the interview, Ms Atkins was asked about how the NHS would fill 121,000 vacancies if the UK looks to cut immigration, with statistics showing that in June this year 265,000 people in its workforce came from abroad.
Ms Atkins said that while those from overseas who worked in the NHS were “incredibly important to the system”, “immigration as a whole is too high”.
Last week, figures from the Office for National Statistics showed that net migration hit a record high of 745,000 in 2022 – revised up from a previous estimate of 606,000.
Ms Atkins said the government’s long-term workforce plan will see more nurses and doctors in the UK trained and retained in the system.
“We are working across government to tackle immigration because we understand it’s of great concern, but we can do this in a way that protects the NHS,” she added.
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