SBF trial underway, Mashinsky trial set, Binance’s market share shrinks: Hodler’s Digest, Oct. 1-7

Published

1 year ago

October 7, 2023

admin

Opening arguments begin in Sam Bankman-Fried trial

The trial of former FTX CEO Sam “SBF” Bankman-Fried kicked off on Oct. 4 in New York after jury selection began the previous day. Assistant United States Attorney Thane Rehn told jurors that SBF used FTX customer funds to enrich himself and gain credibility among politicians through donations. “The defendant blamed a downturn in the crypto market. But he had committed fraud. That is what the evidence in this trial will show. You will hear from his inner circle. His girlfriend will tell you how they stole money together,” Rehn said. SBF’s attorney Mark Cohen said the “girlfriend,” former Alameda Research CEO Caroline Ellison, and Changpeng Zhao, CEO of rival cryptocurrency exchange Binance, share some of the blame for the downfall of FTX. Check out our detailed recap on Sam Bankman-Fried’s first week at trial.

Alex Mashinsky’s jury trial scheduled for September 2024

Alex Mashinsky, former CEO of crypto lender Celsius, will be tried on charges of fraud and market manipulation in September 2024, a judge decided on Oct. 3. Mashinsky will remain free on $40 million bail, subject to travel and financial restriction, in the meantime. Celsius filed for bankruptcy in July 2022 and Mashinsky was arrested in July of this year. He is accused of defrauding investors out of billions of dollars. The United States Commodity Futures Trading Commission, Securities and Exchange Commission and Federal Trade Commission all have active suits against Mashinsky as well. Former Celsius chief revenue officer Roni Cohen-Pavon pleaded guilty to four criminal charges in September.

Cryptocurrency exchange Binance is continuing to lose market share for the seventh month in a row. Analysts say HTX (formerly Huobi), Bybit and DigiFinex were the beneficiaries of Binance’s slide. According to an analysis by CCData reported by Bloomberg, Binance’s share of the spot market fell from 38.5% in August to 34.3% in September. On the derivatives market, Binance’s share fell from 53.5% to 51.5% in the same period. Ongoing struggles with regulators in the United States were identified as one cause of Binance’s market share decline, but they also pointed out the end of the exchange’s zero-fee trading promotion for major trading pairs and Binance’s withdrawal from the Russian market, which made up 7% of its traffic.

Alameda sent $4.1B of FTT tokens to FTX before crash: Nansen report

A report shared with Cointelegraph by blockchain data analyst Nansen shows that FTX moved $4.1 billion worth of its native FTT tokens to Alameda Research between Sept. 28 and Nov. 1, 2022. FTX and Alameda Research controlled around 90% of the FTT supply. Nansen suggested that the companies were using them to prop up each other’s balance sheets. FTX also transferred $388 million in stablecoin to Alameda Research during the same period. Data implied that Alameda Research would not have been able to go through with its offer to Binance CEO Changpeng Zhao to buy out that exchange’s FTT holdings at $22 on Nov. 6. Alameda Research CEO Caroline Ellison made the offer on X (formerly Twitter) as the two entities scrambled to control the turmoil sparked by revelations of irregularities in their balance sheets. FTX filed for bankruptcy days later.

Valkyrie backtracks on Ether futures contract purchases until ETF launch

Asset management firm Valkyrie said in a filing with the U.S. Securities and Exchange Commission (SEC) on Sept. 29 that it will not purchase Ether in advance of receiving approval for its exchange-traded fund (ETF). Valkyrie had previously told Cointelegraph that it planned on allowing investors exposure to ETF futures before launching its combined Bitcoin and Ether Strategy ETF in early October. Not only that, Valkyrie said it would sell the ETH futures it had already bought. Valkyrie is among several financial firms that are expected to begin offering ETH futures ETFs soon. The SEC has delayed decisions on several of them. Observers say it may be due to concerns about a U.S. government shutdown.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $27,880, Ether (ETH) at $1,640 and XRP at $0.52. The total market cap is at $1.07 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Trust Wallet Token (TWT) at 18.11%, Avalanche (AVAX) at 17.5% and Render (RNDR) at 17%.

The top three altcoin losers of the week are ApeCoin (APE) at -9.5%, THORChain (RUNE) at -9.3% and Curve DAO Token (CRV) at -8.8%.

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

Most Memorable Quotations

“We allowed Alameda to withdraw unlimited funds.”

Gary Wang, co-founder and former chief technology officer of FTX

“He told me to use Signal. He told the entire company. It also had auto-delete. […] He said it [auto-delete] was all down-side to keep messages around. If regulators found things they didn’t like, it could be bad for the company.”

Adam Yedidia, former FTX employee and roommate of SBF

“Macroeconomic headwinds are limiting our ability to generate revenue, and in response to the current market conditions and business realities, we must reduce roles across the global business.”

Pascal Gauthier, CEO and chairman of Ledger

“The gravitational pull in crypto for the time being stays in BTC, with a promising event horizon down the line, still favoring aggressive accumulation.”

Vetle Lundem, senior analyst at K33

“It’s relatively difficult to innovate in traditional finance. In crypto, it’s a lot better and more efficient. And in terms of cost, it is a lot more cheap. So, you can see the pace is a lot faster, and we can serve an even bigger audience than traditional finance right now.”

Lennix Lai, global chief commercial officer at OKX

“Banks have trillions of dollars of transactions with each other at the end of the day, but there is a cut-off time where you simply cannot transact internationally. It’s a big pain point, and it’s also expensive and inefficient.”

Akshay Chopra, vice president, head of innovation and design for CEMEA at Visa

Prediction of the Week

Bitcoin bull market awaits as US faces ‘bear steepener’ — Arthur Hayes

With bond yields surging to 30-year highs, the financial markets are due for “mass liquidity injections” in the near future, according to BitMEX founder Arthur Hayes. This should provide the next catalyst for the crypto bull market, he said.

“Why do I love these markets right now when yields are screaming higher? Bank models have no concept of a bear steepener occurring,” Hayes argued. A “bear steepener” describes the phenomenon of long-term interest rates rising more quickly than short-term interest rates.

“The faster this bear steepener rises, the faster someone goes belly up, the faster everyone recognises there is no way out other than money printing to save govt bond markets, the faster we get back to the crypto bull market,” Hayes said.

FUD of the Week

Crypto suffered 153% YoY increase in hacks and scams in Q3

Blockchain security platform Immunefi released a new report on crypto hacks and scams for the third quarter. According to the report, the number of hacks and scams increased by over 153% from July to September 2023 compared to the same period in the previous year. In Q3 2022, there were only 30 incidents, whereas there were 76 incidents in Q3 2023. A total of over $680 million of crypto was lost from scams and hacks during the quarter. The largest hack of the quarter was of the Mixin protocol, which resulted in it being drained of over $200 million, while the Multichain hack for over $126 million was the second largest. The two most targeted networks were BNB Chain and Ethereum.

Bitcoin analysts still predict a BTC price crash to $20K

Bitcoin holders were elated when the coin began October at a six-week high, but technical analysts are warning that it may be headed for a fall to $20,000 soon. According to pseudonymous Bitcoin trader CryptoBullet, the current chart shows a classic “head and shoulders” pattern that generally means the price is about to fall. The bottom of the left shoulder of this pattern is at around $20,000, implying that the price will fall to that point before recovering. Joao Wedson, founder and CEO of crypto trading resource Dominando Cripto, went even further, claiming that Bitcoin may fall below $20,000. According to Wedson, the current price action is forming a fractal that looks similar to the 2020-2022 period. The last time this happened, the price increased greatly in the beginning, but then collapsed back to lower levels by the end of the fractal. In Wedson’s view, this implies that we may be in the early stages of a move below $20,000.

US Treasury sanctions crypto wallets as authorities crack down on fentanyl

The Office of Foreign Assets Control of the United States Department of the Treasury announced that it has sanctioned multiple wallets connected with manufacturers and dealers of the illicit drug, fentanyl. According to Deputy Treasury Secretary Wally Adeyemo, the wallets have “received millions of USD funds over hundreds of deposits” as payment for various Fentanyl-related criminal activities. The wallet sanctions were initiated as part of an indictment that targeted some Chinese-based chemical manufacturers. Valerian Labs, Hanhong Pharmaceutical, and Hebei Crovell Biotech were three of the parties named in the indictment.

The Truth Behind Cuba’s Bitcoin Revolution: An on-the-ground report

From addressing runaway inflation to providing a secure way to save money, Bitcoin can be a critical economic tool for Cubans.

Singer Vérité’s fan-first approach to Web3, music NFTs and community building

Is music the next frontier of blockchain adoption? Some musicians think the technology can help them carve out a sustainable career in the industry.

6 Questions for JW Verret — the blockchain professor who’s tracking the money

The Harvard-educated attorney answers questions about crypto adoption and regulation.

Editorial Staff

Cointelegraph Magazine writers and reporters contributed to this article.

Politics

Wolf Capital co-founder pleads guilty to $9.4M Ponzi, promised 547% returns

Published

2 hours ago

January 11, 2025

admin

Wolf Capital co-founder pleads guilty to .4M Ponzi, promised 547% returns

According to the US Department of Justice, Wolf Capital’s co-founder has pleaded guilty to wire fraud conspiracy for luring 2,800 crypto investors into a Ponzi scheme.

Politics

Rachel Reeves lands in China amid pressure to cancel trip over market turmoil

Published

3 hours ago

January 11, 2025

admin

Rachel Reeves lands in China amid pressure to cancel trip over market turmoil

Making Britain better off will be “at the forefront of the chancellor’s mind” during her visit to China, the Treasury has said amid controversy over the trip.

Rachel Reeves flew out on Friday after ignoring calls from opposition parties to cancel the long-planned venture because of market turmoil at home.

The past week has seen a drop in the pound and an increase in government borrowing costs, which has fuelled speculation of more spending cuts or tax rises.

The Tories have accused the chancellor of having “fled to China” rather than explain how she will fix the UK’s flatlining economy, while the Liberal Democrats say she should stay in Britain and announce a “plan B” to address market volatility.

However, Ms Reeves has rejected calls to cancel the visit, writing in The Times on Friday night that choosing not to engage with China is “no choice at all”.

👉 Click here to follow Electoral Dysfunction wherever you get your podcasts 👈

The chancellor will be accompanied by Bank of England governor Andrew Bailey and other senior executives.

She will meet with her counterpart, Vice Premier He Lifeng, in Beijing on Saturday to discuss financial services, trade and investment.

She will also “raise difficult issues”, including Chinese firms supporting Russia’s invasion of Ukraine and concerns over constraints on rights and freedoms in Hong Kong, the Treasury said.

But it did not mention whether Ms Reeves would raise the treatment of the Uyghur community, which Downing Street said Foreign Secretary David Lammy would do during his visit last year.

On Friday, Culture Secretary Lisa Nandy defended the trip, telling Sky News that the climbing cost of government borrowing was a “global trend” that had affected many countries, “most notably the United States”.

“We are still on track to be the fastest growing economy, according to the OECD [Organisation for Economic Co-operation and Development] in Europe,” she told Anna Jones on Sky News Breakfast.

“China is the second-largest economy, and what China does has the biggest impact on people from Stockton to Sunderland, right across the UK, and it’s absolutely essential that we have a relationship with them.”

Read more – Ed Conway analysis: The chancellor’s gamble with China

However, former prime minister Boris Johnson said Ms Reeves had “been rumbled” and said she should “make her way to HR and collect her P45 – or stay in China”.

While in the country’s capital, Ms Reeves will also visit British bike brand Brompton’s flagship store, which relies heavily on exports to China, before heading to Shanghai for talks with representatives across British and Chinese businesses.

It is the first UK-China Economic and Financial Dialogue (EFD) since 2019, building on the Labour government’s plan for a “pragmatic” policy with the world’s second-largest economy.

Sir Keir Starmer was the first British prime minister to meet with China’s President Xi Jinping in six years at the G20 summit in Brazil last autumn.

Relations between the UK and China have become strained over the last decade as the Conservative government spoke out against human rights abuses and concerns grew over national security risks.

Navigating this has proved tricky given China is the UK’s fourth largest single trading partner, with a trade relationship worth almost £113bn and exports to China supporting over 455,000 jobs in the UK in 2020, according to the government.

During the Tories’ 14 years in office, the approach varied dramatically from the “golden era” under David Cameron to hawkish aggression under Liz Truss, while Rishi Sunak vowed to be “robust” but resisted pressure from his own party to brand China a threat.

The Treasury said a stable relationship with China would support economic growth and that “making working people across Britain secure and better off is at the forefront of the chancellor’s mind”.

Ahead of her visit, Ms Reeves said: “By finding common ground on trade and investment, while being candid about our differences and upholding national security as the first duty of this government, we can build a long-term economic relationship with China that works in the national interest.”