XRP is not a security, Celsius CEO arrested on criminal charges, and more: Hodler’s Digest, July 9-15

Published

2 years ago

July 15, 2023

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Judge rules XRP is not a security in SEC’s case against Ripple

Ripple Labs scored a victory in a district court in New York on July 13, with Judge Analisa Torres ruling partially in favor of the company in a case brought forth by the U.S. Securities and Exchange Commission (SEC) dating back to 2020. According to court documents, Judge Torres granted summary judgment in favor of Ripple Labs, ruling that the XRP token is not a security, but only in regard to programmatic sales on digital asset exchanges. XRP’s price skyrocketed within minutes of the news breaking. The case has been ongoing since December 2020, when the SEC sued Ripple and two of its executives over allegations of offering an unregistered security. Despite the positive outcome, several lawyers warned against celebrating too soon, noting the ruling is only partial and does not set a precedent. In addition, the SEC may appeal the decision, which could result in a reversal by a higher court.

XRP becomes 4th largest crypto after Ripple’s partial win over SEC

XRP has become the fourth-largest cryptocurrency by market capitalization this week after Ripple’s partial victory over the SEC. The price of XRP surged as much as 98% in the hours following the decision, reaching as high as $0.93, according to data from TradingView. Meanwhile, its market cap surged a whopping $21.2 billion to reach a new yearly high of $46.1 billion. The new ruling has also sparked a fresh wave of re-listing activity from mainstay U.S. exchanges, with Coinbase, Kraken and iTrustCapital making the token available for trading on their respective platforms.

Celsius Network fined $4.7B by FTC, and CEO arrested under criminal fraud charges

U.S. authorities have announced charges against the former CEO of bankrupt crypto lender Celsius, Alex Mashinsky, over securities fraud, commodities fraud and wire fraud. Former chief revenue officer Roni Cohen-Pavon and Mashinsky will also face charges of conspiracy, securities fraud, market manipulation and wire fraud related to manipulating the price of the Celsius token. Authorities arrested Mashinsky as part of the indictment, which includes seven criminal counts. In parallel, the Commodity Futures Trading Commission announced a complaint against Celsius along with a $4.7 billion fine, claiming its co-founders marketed the platform as a “safe place” for consumers to deposit their cryptocurrency while misappropriating over $4 billion in consumers’ assets. Under similar allegations, the SEC also filed a lawsuit against the company. While Celsius is cooperating with regulators, Mashinsky pleaded not guilty to charges of misleading customers and inflating the CEL token.

Europe’s first spot Bitcoin ETF eyes 2023 debut after year-long delay

Europe’s first spot Bitcoin exchange-traded fund (ETF) is set to debut later this year after a long delay. The Bitcoin ETF, created by London-based Jacobi Asset Management, was set to debut in July 2022 but was postponed due to market conditions. The asset manager now sees a gradual shift in demand compared with 2022. A related development also took place in Argentina this week, as the nation welcomed its first Bitcoin futures contract. According to Matba Rofex, the trading platform behind the investment vehicle, it is the first Bitcoin futures contract in Latin America.

Binance headcount reduction hits 1,000 employees

Binance has reportedly laid off hundreds of employees in recent weeks. According to former employees, cuts were global and customer service workers were heavily affected, particularly in India. Including this week’s layoffs, over 1,000 employees have lost their jobs at the exchange. Before the slash, Binance’s global headcount was estimated at 8,000. The reorganization could cost Binance more than a third of its staff. The crypto exchange announced the 20% reduction in staff on May 31, claiming it was not downsizing but reallocating resources amid the ongoing crackdown in the United States. Binance’s most enduring challenge is reportedly an ongoing investigation of its activities and executives by the U.S. Justice Department.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $30,227, Ether (ETH) at $1,923 and XRP at $0.72. The total market cap is at $1.21 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are XRP (XRP) at 54.20%, Stellar (XLM) at 37.88% and Synthetix (SNX) at 31.92%.

The top three altcoin losers of the week are eCash (XEC) at -21.82%, Bitcoin SV (BSV) at -16.75% and Maker (MKR) at -7.87%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“This [Ripple ruling] is a big deal. […] It’s been clear since this case was filed that it would have implications across the entire industry.”

Sheila Warren, CEO of the Crypto Council for Innovation

“What I do think is BlackRock, Invesco [and] the group of ETF providers is a real signal that adoption is coming.”

Mike Novogratz, founder and CEO of Galaxy Digital

“I think the next crypto cycle will be driven by consumer apps that are powered by crypto, but users won’t know it’s crypto unless they look closely.”

0xDesigner, pseudonymous Web3 UI/UX designer

“XRP is not a security. This victory for Ripple is a win for the entire industry and a step toward regulatory clarity in the U.S.”

Ripple Labs, developers of the Ripple payment protocol

“[It] is our expectation that the price of Bitcoin will repeat its historical pattern of rallying both ahead of and following each Bitcoin halving.”

Berenberg Capital Markets, New York-based investment firm

“I think if we want Bitcoin to be more than payments, it needs more scaling solutions.”

Vitalik Buterin, co-founder of Ethereum

Prediction of the Week

Can XRP price hit $1? Watch these levels next

The price of XRP has skyrocketed after a federal court ruling declared that its sales on crypto exchanges complied with United States securities laws. At its highest during the week, the XRP/USD pair reached $0.93, its best level since December 2021.

Certain indicators show that XRP’s ongoing price pump may not be just a short-term reaction to the positive news for Ripple. For instance, the duration of XRP’s massive pump coincides with its trading volumes reaching a 10-month high.

The number of XRP whale transactions — wallets holding more than $100,000 — climbed to their best level in 2023, suggesting that the wealthiest investors back the XRP rally. “If key whale and shark addresses are increasing their supply going into this pump, then it is a get foreshadowing signal that the pump may just be getting started,” stated pseudonymous analyst Brian Q from data analytics platform Santiment.

From a technical standpoint, XRP can test the key $1 level in the coming days, but its potential to continue the rally beyond looks weak for the time being. If the XRP price decisively breaks above $1, then its next price target by September will likely be near $1.35.

FUD of the Week

Blockchain Association calls for investigation into Prometheum over alleged ‘sweetheart’ SEC deal

The Blockchain Association has submitted a letter to the U.S. SEC calling for an investigation into crypto firm Prometheum. In the letter, the Blockchain Association requested the regulator to take a look at Prometheum’s special purpose broker-dealer license approval by the Financial Industry Regulatory Authority. The group also raised concerns about the means by which co-CEO Aaron Kaplan secured a seat testifying before the U.S. House Financial Services Committee in June. Prometheum has reportedly changed its public position from calling for regulatory clarity from the SEC to claiming that “there exists a clear pathway to registration for digital assets and legislation is unnecessary” in the country.

New York prosecutor charges hacker over $9M exploit of Solana-based exchange

A former security engineer for an international technology firm has been arrested and charged for allegedly using a smart contract bug to steal $9 million in cryptocurrency from a Solana-based decentralized crypto exchange. The attack was carried out in July 2022 and involved exploiting a vulnerability in the exchange’s smart contracts to generate inflated fees with flash loans. The exploiter later returned most of the funds but was allowed to keep $1.6 million as a white hat bounty. The indictment indicates that the U.S. Department of Justice will “pursue criminal charges if a person intentionally uses a protocol in a way that it was not *intended* to be used,” crypto lawyer Orlando Cosme said on Twitter.

Algorand decentralized lending protocol Algofi to shut down by end of year

Algofi, the borrowing and lending protocol built on decentralized finance blockchain Algorand, will soon shut down. According to a July 11 announcement, developers’ “belief in the strength of Algorand’s technology and novel consensus algorithm has not wavered.” Liquidity Mining programs will be halted and several collaterals will be reduced to 0% until December. The Algofi protocol has around $25 million in total value locked, down from its $135 million peak in February.

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Editorial Staff

Cointelegraph Magazine writers and reporters contributed to this article.

Politics

Stablecoins are the best way to ensure US dollar dominance — Web3 CEO

Published

9 hours ago

April 6, 2025

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Stablecoins are the best way to ensure US dollar dominance — Web3 CEO

Stablecoins are the single best tool for the United States government to maintain the US dollar’s hegemony in global financial markets, according to LayerZero Labs CEO and founder Bryan Pellegrino.

In an interview with Cointelegraph, the CEO of LayerZero Labs, which created the LayerZero interoperability protocol recently chosen by Wyoming to be the distribution partner for the Wyoming stablecoin, said that the cross-border accessibility of dollar-pegged tokens makes them an obvious choice to drive US dollar demand. Pellegrino added:

“Stablecoins for the US dollar are the single best tool — the last Trojan Horse or vampire attack on every single other currency in the world — whether it is Argentina, whether it is Venezuela, whether it is all of the countries that have massive inflation.”

The CEO said he expects support for stablecoins on both the federal and state levels to grow because of the obvious boost stablecoins give to the US dollar in foreign exchange markets and the financial moat stablecoin-driven demand will create around the US dollar’s global reserve currency status.

Dollar, US Government, Stablecoin — *Stablecoin market overview. Source:* *RWA.XYZ*

US government looks to stablecoins to protect US dollar

Pellegrino cited Tether’s emerging role as one of the largest buyers of US Treasury bills in the world as evidence of the demand for US debt instruments from stablecoin issuers.

Tether recently became the seventh-largest holder of US Treasuries, beating out Canada, Germany, Norway, Hong Kong, and Saudi Arabia.

Speaking at the White House Crypto Summit on March 7, US Treasury Secretary Scott Bessent said the Trump administration would leverage stablecoins to extend US dollar hegemony and indicated this would be a top priority for officials in 2025.

According to a 2023 report from Chainalysis, over 50% of all the digital asset value transferred to countries in the Latin American region, including Argentina, Brazil, Columbia, Mexico, and Venezuela was denominated in stablecoins.

The low transaction fees, relative stability, and near-instant settlement times for dollar-pegged stablecoins make these real-world tokenized assets ideal for remittances and stores of value for residents in developing countries suffering from high inflation and capital controls.

Magazine: Bitcoin payments are being undermined by centralized stablecoins

Politics

CFPB likely to step back from crypto regulation — Attorney

Published

11 hours ago

April 6, 2025

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CFPB likely to step back from crypto regulation — Attorney

The Consumer Financial Protection Bureau (CFPB) will likely see a reduced role in crypto regulations as other federal agencies like the Securities and Exchange Commission (SEC) and state-level regulators assume a bigger role in crypto policy, according to Ethan Ostroff, partner at the Troutman Pepper Locke law firm.

“I think with the current administration, my sense is, we are highly likely to see a significant pullback by the CFPB in the context of the activity by other regulators,” Ostroff told Cointelegraph in an interview.

State regulators also have the authority under the Consumer Financial Protection Act (CFPA) to assume some of the regulatory roles of the CFPB, the attorney said but also added that some regulatory functions will continue to fall within the purview of the CFPB as a matter of established law.

Ostroff cited the New York Department of Financial Services (NYDFS) and the California Department of Financial Protection and Innovation (DFPI) as regulators to keep an eye on as potential leaders of crypto regulations at the state level.

However, the attorney clarified that while the CFPB may see a diminished role during the Trump administration, the agency would not be outright dismantled during the current regime due to “statutorily mandated obligations and requirements” that require acts of Congress to change.

Trump administration targets CFPB in efficiency push

The Trump administration targeted the CFPB as part of a broader push by the Department of Government Efficiency (DOGE) to slash government spending and reduce the federal debt.

Russell Vought, the recently appointed head of the CFPB, announced major funding cuts to the agency and scaled back operations within days of assuming the helm at the CFPB in February 2025.

Bitcoin Regulation, US Government, United States, Donald Trump — *Source:* *Russell Vought*

Massachusetts Senator Elizabeth Warren criticized Elon Musk for dismantling the CFPB, which the US senator co-founded back in 2007.

Warren characterized Musk as a “bank robber” and claimed that the Trump administration dismantled the CFPB to undo consumer protection rules and have greater control over the financial system.

In a February 12 interview with Mother Jones, the senator stressed that the Executive Branch of government does not have the statutory authority to fully dismantle the CFPB, which can only be done through Congressional approval.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

Politics

Nearly 400,000 FTX users risk losing $2.5 billion in repayments

Published

18 hours ago

April 6, 2025

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Nearly 400,000 FTX users risk losing .5 billion in repayments

Nearly 400,000 creditors of the bankrupt cryptocurrency exchange FTX risk missing out on $2.5 billion in repayments after failing to begin the mandatory Know Your Customer (KYC) verification process.

Roughly 392,000 FTX creditors have failed to complete or at least take the first steps of the mandatory Know Your Customer verification, according to an April 2 court filing in the US Bankruptcy Court for the District of Delaware.

FTX users originally had until March 3 to begin the verification process to collect their claims.

“If a holder of a claim listed on Schedule 1 attached thereto did not commence the KYC submission process with respect to such claim on or prior to March 3, 2025, at 4:00 pm (ET) (the “KYC Commencing Deadline”), 2 such claim shall be disallowed and expunged in its entirety,” the filing states.

Nearly 400,000 FTX users risk losing $2.5 billion in repayments — *FTX court filing. Source:* *Bloomberglaw.com*

The KYC deadline has been extended to June 1, 2025, giving users another chance to verify their identity and claim eligibility. Those who fail to meet the new deadline may have their claims permanently disqualified.

According to the court documents, claims under $50,000 could account for roughly $655 million in disallowed repayments, while claims over $50,000 could amount to $1.9 billion — bringing the total at-risk funds to more than $2.5 billion.

The next round of FTX creditor repayments is set for May 30, 2025, with over $11 billion expected to be repaid to creditors with claims of over $50,000.

Under FTX’s recovery plan, 98% of creditors are expected to receive at least 118% of their original claim value in cash.

How FTX users can complete KYC

Many FTX users have reported problems with the KYC process.

However, users who were unable to submit their KYC documentation can resubmit their application and restart the verification process, according to an April 5 X post from Sunil, FTX creditor and Customer Ad-Hoc Committee member.

Impacted users should email FTX support (support@ftx.com) to receive a ticket number, then log in to the support portal, create an account, and re-upload the necessary KYC documents.

FTX’s Bahamian subsidiary, FTX Digital Markets, processed the first round of repayments in February, distributing $1.2 billion to creditors.

The crypto industry is still recovering from the collapse of FTX and more than 130 subsidiaries launched a series of insolvencies that led to the industry’s longest-ever crypto winter, which saw Bitcoin’s (BTC) price bottom out at around $16,000.

While not a “market-moving catalyst” in itself, the beginning of the FTX repayments is a positive sign for the maturation of the crypto industry, which may see a “significant portion” reinvested into cryptocurrencies, Alvin Kan, chief operating officer at Bitget Wallet, told Cointelegraph.