Binance’s CZ must stay in US, Elon Musk seeks $1B for AI, and other news: Hodler’s Digest, Dec. 3-9
Top Stories This Week
Binance founder CZ must stay in US until sentencing, judge orders
Binance founder Changpeng “CZ” Zhao has been ordered to stay in the United States until his sentencing in February, with a federal judge determining there’s too much of a flight risk if the former crypto exchange CEO is allowed to return to the United Arab Emirates. On Dec. 7, Seattle District Court Judge Richard Jones ordered Zhao to stay in the U.S. until his Feb. 23, 2024 sentencing date. He faces up to 18 months in prison after pleading guilty to money laundering on Nov. 21 and has agreed not to appeal any potential sentence up to that length.
House committee passes bill to ‘preserve US leadership’ in blockchain
A United States Congress committee has unanimously passed a pro-blockchain bill, which would task the U.S. commerce secretary with promoting blockchain deployment and thus potentially increase the country’s use of blockchain technology. The act covers an array of actions the commerce secretary must take if passed, including making best practices, policies and recommendations for the public and private sector when using blockchain tech. The bill will now go to the House for a vote. If passed, it must also pass in the Senate before returning for final congressional and presidential approval.
SEC pushes deadline to decide on Grayscale spot Ether ETF
The United States Securities and Exchange Commission has delayed its decision on whether to approve or reject a spot Ether exchange-traded fund (ETF) offering from asset manager Grayscale. In a notice, the SEC said it would designate a longer period for considering a proposed rule change that would allow NYSE Arca to list and trade shares of the Grayscale Ethereum Trust. Grayscale first filed with the SEC to convert shares of its Grayscale Ethereum Trust into a spot Ether ETF in October, adding its name to the list of companies awaiting a decision from the regulator.
Elon Musk’s xAI files with SEC for private sale of $1B in unregistered securities
Elon Musk’s X-linked artificial intelligence modeler, xAI, has an agreement for the private sale of $865.3 million in unregistered equity securities, according to a filing with the United States Securities and Exchange Commission made on Dec. 5. The company is seeking to raise $1 billion. XAI’s product, a chatbot called Grok, has recently rolled out to X’s Premium+ subscribers. Musk announced the launch of xAI in July and claimed its goal was to “understand the universe.”
Bitcoin new high set for late 2024, Binance to lose top spot — VanEck
Bitcoin will hit a new all-time high in late 2024 because of a long-feared United States recession and regulatory shifts after the next U.S. presidential election, asset manager VanEck predicts. The firm is confident that the first spot Bitcoin ETFs will be approved in the first quarter of 2024. However, it also made a gloomy prediction for the general U.S. economy. VanEck is among several firms, including BlackRock and Fidelity, that are vying for an approved spot Bitcoin ETF. VanEck also believes that the BTC halving, due in April or May, “will see minimal market disruption,” but there will be a post-halving price rise.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $44,402, Ether (ETH) at $2,364 and XRP at $0.66. The total market cap is at $1.65 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Bonk (BONK) at 203.10%, ORDI (ORDI) at 134.34% and BitTorrent (BTT) at 114.32%.
The top three altcoin losers of the week are Maker (MKR) at -6.48%, UNUS SED LEO (LEO) at -6.22% and Kaspa (KAS) at 4.98%.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
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Most Memorable Quotations
“The expected approval of the ETF will be positive news for the crypto market, likely leading to significant growth.”
Adam Berker, senior legal counsel at Mercuryo
“The only true use case for it [crypto] is criminals, drug traffickers, money laundering, tax avoidance.”
Jamie Dimon, CEO of JPMorgan Chase
“Jamie Dimon is in no position to criticize Bitcoin with this sort of track record.”
Gabor Gurbacs, strategy adviser at VanEck
“So, for us, I think Bitcoin is our central bank. With that in mind, I think of Ethereum as our investment bank.”
Robby Yung, CEO of Animoca Brands
“The ETF is certainly a key driver in sentiment.”
Jon de Wet, investment chief of Zerocap
“It takes a community and the whole industry to figure out how to better educate people. That’s the hard part. It’s not a technology issue; it’s an operational problem.”
Eowyn Chen, CEO of Trust Wallet
Prediction of the week
‘Early bull market’ — Bitcoin price preps 1st ever weekly golden cross
Bitcoin is lining up an “early bull market” as a unique chart feature plays out for the first time in history.
In a post on X (formerly Twitter) on Dec. 7, entrepreneur Alistair Milne noted that should current performance continue, Bitcoin will witness a crossover of two weekly moving averages (MAs), which have never delivered such a bull signal before.
The 50-week and 200-week MAs are key trendlines for Bitcoin traders and analysts alike. The latter is the ultimate bear market support level, and it has so far never decreased in value.
BTC price strength is on the way to taking the 50-week MA trendline above the 200-week counterpart. Known as a “golden cross,” on lower timeframes, this is considered a classic bullish signal, and for Milne, the impetus is that considerable upside could be in store should the phenomenon play out.
“The 50-week moving average will now soon cross back above the 200-week MA making a ‘golden cross’ for the 1st time. QED: Early bull market,” he wrote.
FUD of the Week
Crypto is for criminals? JPMorgan has been fined $39B and has its own token
JPMorgan Chase CEO Jamie Dimon is being criticized by the crypto community after claiming Bitcoin and cryptocurrency’s “only true use case” is to facilitate crime. However, according to Good Jobs First’s violation tracker, JPMorgan is the second-largest penalized bank, having paid $39.3 billion in fines across 272 violations since 2000. About $38 billion of these fines came under Dimon’s watch, who has been CEO since 2005.
British regulator adds Justin Sun-linked Poloniex to warning list after $100M hack
The United Kingdom’s Financial Conduct Authority (FCA) has added crypto exchange Poloniex to its warning list of non-authorized companies. The Seychelles-based exchange is one of the three companies owned by or affiliated with entrepreneur Justin Sun that have suffered four hacks in the last two months. The warning to Poloniex was published on the FCA’s website on Dec. 6. It doesn’t offer a reason but says that “firms and individuals cannot promote financial services in the UK without the necessary authorization or approval.”
US senators target crypto in bill enforcing sanctions on terrorist groups
A bipartisan group of lawmakers in the United States Senate introduced legislation aimed at countering cryptocurrency’s role in financing terrorism, explicitly citing the Oct. 7 attack by Hamas on Israel. The bill would expand U.S. sanctions to include parties funding terrorist organizations with cryptocurrency or fiat. According to Senator Mitt Romney, the legislation would allow the U.S. Treasury Department to go after “emerging threats involving digital assets.”
Read also
Top Magazine Pieces of the Week
Lawmakers’ fear and doubt drives proposed crypto regulations in US
If the Digital Asset Anti-Money Laundering Act were to become law, many cryptocurrency providers would have to learn how to comply with the same regulations as traditional financial institutions.
Expect ‘records broken’ by Bitcoin ETF: Brett Harrison (ex-FTX US), X Hall of Flame
Brett Harrison taught a promising young Sam Bankman-Fried programming for traders at Jane Street, but wasn’t so impressed with the man SBF became.
Web3 Gamer: Games need bots? Illuvium CEO admits ‘it’s tough,’ 42X upside
Games overrun with bots just show bot owners care, claims Pixels founder. Plus we review Galaxy Fight Club, chat to Illuvium’s CEO and more.
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A US federal judge has agreed to pause a lawsuit filed by 18 state attorneys general and the crypto lobby group DeFi Education Fund against the Securities and Exchange Commission after all parties said new SEC leadership could make the action moot.
Kentucky District Court Judge Gregory Van Tatenhove ordered a 60-day stay on the case on April 16, noting a mid-March filing from the SEC that “this case could potentially be resolved” due to a leadership transition at the regulator.
He added that the parties must file a joint status report within 30 days.
Paul Atkins, a Wall Street adviser who has held board positions with crypto advocacy groups, was sworn in as the new SEC chair earlier this month, replacing acting chair Mark Uyeda and taking over from Gary Gensler.
The 18 attorneys general, all hailing from Republican states, filed the lawsuit with the DeFi Education Fund against the securities regulator in November, alleging that the SEC exceeded its authority when targeting crypto exchanges with lawsuits, accusing the regulator and then-chair Gensler of “gross government overreach.”
The plaintiffs included attorneys general from Nebraska, Tennessee, Wyoming, Kentucky, West Virginia, Iowa, Texas, Mississippi, Ohio, Montana, Indiana, Oklahoma and Florida, among others.
“Without Congressional authorization, the SEC has sought to unilaterally wrest regulatory authority away from the States through an ongoing series of enforcement actions,” the lawsuit stated.
DeFi groups drop case against IRS over killed broker rule
Meanwhile, the DeFi Education Fund, Blockchain Association, and Texas Blockchain Council dropped their lawsuit against the Internal Revenue Service on April 16.
“The parties hereby stipulate to voluntary dismissal of this action without prejudice because the case has become moot,” stated the filing.
The lawsuit, filed in December, argued that the so-called IRS DeFi broker rule went beyond the agency’s authority and was unconstitutional.
Related: NY attorney general urges Congress to keep pensions crypto-free — ‘No intrinsic value’
On April 11, President Donald Trump signed a bill to revoke the rule that would have required DeFi protocols to report transactions to the IRS.
It comes as the SEC has paused or dropped several high-profile lawsuits against crypto companies this year under its new leadership.
Magazine: Illegal arcade disguised as … a fake Bitcoin mine? Soldier scams in China: Asia Express
Panama’s capital city will accept cryptocurrency payments for taxes and municipal fees, including bus tickets and permits, Panama City mayor Mayer Mizrachi announced on April 15, joining a growing list of jurisdictions globally that have voted to accept such payments.
Panama City will begin accepting Bitcoin (BTC), Ether (ETH), Circle’s USDC (USDC), and Tether’s USDt (USDT) stablecoin for payment once the crypto-to-fiat payment rails are established, Mizrachi posted on the X platform.
Mizrachi said previous administrations attempted to push through similar legislation but failed to overcome stipulations requiring the local government to accept funds denominated in US dollars.
In a translated statement, the Panama City mayor said that the local government partnered with a bank that will immediately convert any digital assets received into US dollars, allowing the municipality to accept crypto without introducing new legislation.
Panama City joins a growing list of global jurisdictions on the municipal and state level accepting cryptocurrency payments for taxes, exploring Bitcoin strategic reserves to protect public treasuries from inflation and passing pro-crypto policies to attract investment.
Related: New York bill proposes legalizing Bitcoin, crypto for state payments
Municipalities and states embrace digital assets
Several municipalities and territories around the globe already accept crypto for tax payments or are exploring various implementations of blockchain technology for government spending.
The US state of Colorado started accepting crypto payments for taxes in September 2022. Much like Panama City said it will do, Colorado immediately converts the crypto to fiat.
In December 2023, the city of Lugano, Switzerland, announced taxes and city fees could be paid in Bitcoin, which was one of the developments that earned it the reputation of being a globally recognized Bitcoin city.
The city council of Vancouver, Canada, passed a motion to become “Bitcoin-friendly city” in December 2024. As part of that motion, the Vancouver local government will explore integrating BTC into the financial system, including tax payments.
North Carolina lawmaker Neal Jackson introduced legislation titled “The North Carolina Digital Asset Freedom Act” on April 10. If passed, the bill will recognize cryptocurrencies as an official form of payment that can be used to pay taxes.
Magazine: Crypto City: The ultimate guide to Miami
As digital assets gain mainstream adoption, establishing a legal framework for stablecoins is a “good idea,” said US Federal Reserve Chair Jerome Powell.
In an April 16 panel at the Economic Club of Chicago, Powell commented on the evolution of the cryptocurrency industry, which has delivered a consumer use case that “could have wide appeal” following a difficult “wave of failures and frauds,” he said.
Powell delivers remarks at the Economic Club of Chicago. Source: Bloomberg Television
During crypto’s difficult years, which culminated in 2022 and 2023 with several high-profile business failures, the Fed “worked with Congress to try to get a […] legal framework for stablecoins, which would have been a nice place to start,” said Powell. “We were not successful.”
“I think that the climate is changing and you’re moving into more mainstreaming of that whole sector, so Congress is again looking […] at a legal framework for stablecoins,” he said.
“Depending on what’s in it, that’s a good idea. We need that. There isn’t one now,” said Powell.
This isn’t the first time Powell acknowledged the need for stablecoin legislation. In June 2023, the Fed boss told the House Financial Services Committee that stablecoins were “a form of money” that requires “robust” federal oversight.
Related: Stablecoins are the best way to ensure US dollar dominance — Web3 CEO
Support for stablecoin legislation is growing
The election of US President Donald Trump has ushered in a new era of pro-crypto appointments and policy shifts that could make America a digital asset superpower.
Washington’s formal embrace of cryptocurrency began earlier this year when Trump established the President’s Council of Advisers on Digital Assets, with Bo Hines as the executive director.
Hines told a digital asset summit in New York last month that a comprehensive stablecoin bill was a top priority for the current administration. After the Senate Banking Committee passed the GENIUS Act, a final stablecoin bill could arrive at the president’s desk “in the next two months,” said Hines.
Bo Hines (right) speaks of “imminent” stablecoin legislation at the Digital Asset Summit on March 18. Source: Cointelegraph
Stablecoins pegged to the US dollar are by far the most popular tokens used for remittances and cryptocurrency trading.
The combined value of all stablecoins is currently $227 billion, according to RWA.xyz. The dollar-pegged USDC (USDC) and USDt (USDT) account for more than 88% of the total market.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom
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