Caroline Ellison speaks on FTX-Binance war, SEC won’t appeal Grayscale BTC ETF: Hodler’s Digest, Oct. 8-14

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2 years ago

October 14, 2023

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Caroline Ellison wanted to step down but feared a bank run on FTX

Caroline Ellison, former CEO of Alameda Research, testified for over 10 hours this week at Sam Bankman-Fried’s trial, offering deeper details on the events that anticipated the FTX debacle in November 2022. From Ellison’s testimony, jurors learned that she planned to leave Alameda months before its collapse, but feared a bank run on FTX amidst the crypto market downturn. The week also featured a recording presented as evidence in the case showing the exact moment Ellison told employees about Alameda’s use of FTX customer deposits. Among the key moments of Bankman-Fried’s trial were revelations of fabricated balance sheets in order to deceive crypto lenders, as well as BlockFi CEO Zac Prince’s testimony. Check out this week’s highlights from Cointelegraph’s team on the ground.

Months before the collapse of crypto exchange FTX, former CEO Sam Bankman-Fried was “freaking out” about buying shares in Snapchat, raising capital from Saudi royalty and getting regulators to crack down on rival crypto exchange Binance, according to evidence presented in court this week as a part of the ongoing criminal trial. Bankman-Fried believed Binance leaked an Alameda balance sheet to the media in 2022. According to a document from Nov. 6, 2022, Bankman-Fried wrote that Binance had been “engaging in a PR campaign against us.” It continued, saying that Binance “leaked a balance sheet; blogged about it; fed it to Coindesk; then announced very publicly that they were selling $500m of FTT in response to it while telling customers to be wary of FTX.”

SEC reportedly won’t appeal court decision on Grayscale Bitcoin ETF

The United States Securities and Exchange Commission reportedly has no plans to appeal the recent court decision that favored Grayscale Investments. The ruling requires the SEC to review the firm’s spot Bitcoin exchange-traded fund (ETF) application. The SEC’s supposed decision not to appeal doesn’t necessarily mean Grayscale’s application is set to be approved. If the reports are true, the SEC will need to follow the court’s August order and review Grayscale’s application to change its Grayscale Bitcoin Trust into a spot Bitcoin ETF.

Terraform Labs contends Citadel Securities had a hand in its stablecoin collapse

Terraform Labs has again pointed the finger at market maker Citadel Securities for its role in an alleged “concerted, intentional effort” to cause the depeg of its TerraUSD stablecoin in 2022. On Oct. 10, Terraform Labs filed a motion in the United States to compel Citadel Securities to produce documents relating to its trading activity in May 2022, when TerraUSD Classic depegged. In its motion, Terraform argued that the documents are crucial for its defense in the lawsuit filed by the U.S. Securities and Exchange Commission in February, which alleged Terraform Labs and its founder, Do Kwon, had a hand in “orchestrating a multi-billion dollar crypto asset securities fraud.” Citadel Securities has, however, previously denied trading the TerraUSD stablecoin in May 2022.

Mastercard announces successful wrapped CBDC trial results

Mastercard has completed a trial involving wrapping central bank digital currencies (CBDCs) on different blockchains, similar to wrapped Bitcoin and wrapped Ether. The trial was conducted with the Reserve Bank of Australia and the country’s Digital Finance Cooperative Research Centre CBDC. Mastercard said the solution allowed a CBDC owner to purchase a nonfungible token (NFT) listed on Ethereum. “The process ‘locked’ the required amount of a pilot CBDC on the RBA’s pilot CBDC platform and minted an equivalent amount of wrapped pilot CBDC tokens on Ethereum,” the payment processor wrote.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $26,892, Ether (ETH) at $1,551 and XRP at $0.48. The total market cap is at $1.05 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Loom Network (LOOM) at 86.71%, Trust Wallet Token (TWT) at 16.72% and Tether Gold (XAUt) at 5.16%.

The top three altcoin losers of the week are Mantle (MNT) at -17.27%, Rocket Pool (RPL) at -14.39% and Avalanche (AVAX) at -13.39%.

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

Most Memorable Quotations

“That’s our homework, actually. To really educate people about the benefit of using blockchain.”

Grace Sabandar, co-founder of the Indonesia Blockchain and Metaverse Center

“Crypto-assets markets, including DeFi, do not represent meaningful risks to financial stability at this point.”

European Securities and Markets Authority

“I was worrying about customer withdrawals from FTX, this getting out, people to be hurt. […] I didn’t feel good. If people found out [about Alameda using FTX funds], they would all try to withdraw from FTX.”

Caroline Ellison, former CEO of Alameda Research

“It’s alarming and should be a wakeup call for lawmakers and regulators that digital wallets connected to Hamas received millions of dollars in cryptocurrencies.”

Elizabeth Warren, U.S. senator

“Bitcoin and Ethereum may seem like opposites, but they can co-exist and complement each other.”

Willem Schroé, CEO of Botanix Labs

“People who believe SBFraud is a ‘good guy’ who made ‘mistakes’, and FTX grew too fast and it all got away from him, should NEVER be in charge of other people’s money.”

John Deaton, attorney and crypto advocate

Prediction of the Week

Ethereum losing streak vs. Bitcoin hits 15 months — Can ETH price reverse course?

The price of Ethereum’s native token, Ether, is trading around a 15-month low versus Bitcoin, and the lowest since Ethereum switched to proof-of-stake. The ETH/BTC pair dropped to as low as 0.056 BTC earlier this week. In doing so, the pair broke below its 200-week exponential moving average (200-week EMA; the blue wave) near 0.058 BTC, raising downside risks further into 2023.

The 200-week EMA has historically served as a reliable support level for ETH/BTC bulls.

ETH/BTC stares at similar selloff risks in 2023 after losing its 200-week EMA as support. In this case, the next downside target looks to be around its 0.5 Fibonacci line near 0.051 BTC in 2023, down about 9.5% from current price levels.

Conversely, ETH price may rebound toward its 50-week EMA (the red wave) near 0.065 BTC if it reclaims the 200-week EMA as support.

FUD of the Week

Mistake or money laundering? User pays $1.6 million for CrypToadz NFT

One of the CrypToadz NFTs, whose average price doesn’t exceed $1,000, was bought for an astonishing 1,055 wrapped Ether, an equivalent of $1.6 million. The CrypToadz collection was launched during the NFT boom of 2021 and surpassed a trading volume of $38 million worth of Ether during its first 10 days on the market. The price paid by the anonymous user for the NFT raised questions among the community. Two weeks ago, this item was acquired for 0.95 ETH (around $1,600), only to be sold for a price a thousand times higher.

USDR stablecoin depegs to $0.53, but team vows to provide solutions

Real estate-backed stablecoin USDR lost its peg to the United States dollar after a rush of redemptions caused a draining of liquid assets such as Dai from its treasury. USDR, backed by a mixture of cryptocurrencies and real estate holdings, is issued by the Tangible protocol, a decentralized finance project that seeks to tokenize housing and other real-world assets. During the crisis, a trader reportedly exchanged 131,350 USDR for 0 USD Coin, resulting in a complete loss on investment.

HTX claws back $8M in stolen funds, issues 250 ETH bounty to hacker

Huobi Global’s crypto exchange HTX has confirmed the return of the funds stolen by a hacker in late September and issued a 250 Ether bounty after resolving the issue. One of HTX’s hot wallets was drained of 5,000 ETH on Sept. 25, worth roughly $8 million at the time. Shortly after the hack occurred, the firm contacted the hacker and claimed to know their identity. HTX ultimately offered to pay a 5% bounty worth around $400,000 and not to take any legal action if they returned 95% of the funds before a deadline of Oct. 2.

Beyond crypto: Zero-knowledge proofs show potential from voting to finance

An emerging cryptographic technology may provide help with two gaping 21st-century needs: Privacy and truth.

Eleanor Terrett on impersonators and a better crypto industry

Fox Business producer Eleanor Terrett’s following exploded after she began providing commentary on the SEC v. Ripple lawsuit.

SBF’s alleged Chinese bribe, Binance clarifies account freeze: Asia Express

SBF allegedly bribes Chinese officials with $150 million to unfreeze accounts, Binance justifies blocking Hamas users, meanwhile, Huobi hacker returns all $8M in stolen assets.

Editorial Staff

Cointelegraph Magazine writers and reporters contributed to this article.

Politics

New home secretary to host talks on people smuggling as small-boat crossings hits 30,000

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5 hours ago

September 8, 2025

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New home secretary to host talks on people smuggling as small-boat crossings hits 30,000

The new home secretary will host talks on how to stop people smuggling in her first major engagement in the role.

Shabana Mahmood will host the so-called Five Eyes security alliance, holding talks between counterparts from the US, Australia, Canada and New Zealand.

The security alliance discussion comes after an estimated 1,000 people arrived by small boat in Britain over the course of a single day, with French authorities saying 24 people were rescued while trying to cross the English Channel.

Ms Mahmood said the numbers, which take the yearly total to more than 30,000 in record time, were “utterly unacceptable” and that she expected migrant returns under a deal agreed last month with France to begin “imminently”.

She was promoted into the role Friday during a dramatic reshuffle of Keir Starmer’s top team, which followed in the wake of Angela Rayner’s resignation over her tax affairs.

Politics latest: ‘One of the worst PMs in history’

Sir Keir will now be hoping to draw a line under the fallout of his former deputy’s departure, as well as a summer dominated by criticism of his government’s handling of the small boats crisis.

Ms Mahmood said the Five Eyes intelligence sharing pact would “agree new measures to protect our border”. The group will also discuss new measures to tackle child sexual abuse online, as well as the spread of deadly synthetic opioids, the Home Office said.

Ms Mahmood said: “Rebuilding our reputation on the world stage is how we tackle serious organised crime and secure our borders.”

“The Five Eyes might be drawn from different corners of the globe, but we are united by our alliance,” she added.

“As the security threats we all face become more complex and span continents, we are stronger and safer together.”

She will be joined at the talks by US secretary of homeland security Kristi Noem, Canadian public safety minister Gary Anandasangaree, Australian home affairs minister Tony Burke and New Zealand minister Judith Collins.

The Prime Minister has told his new ministers to “go up a gear” in delivering on Labour’s agenda, part of which now involves a toughened immigration policy as he faces pressure in the polls from Nigel Farage’s Reform UK.

In Ms Mahmood’s first full day in the job, she met the head of Scotland Yard to receive a briefing on the policing operation in response to protests in London.

“Supporting Palestine and supporting a proscribed terrorist group are not the same thing,” she said.

“An honour to visit Sir Mark (Rowley) and the Metropolitan Police to see them at work policing protests yesterday.”

Almost 900 people were arrested in central London at a protest against the banning of Palestine Action.

Politics

Labour ‘failing to deliver change that people voted for’ – TUC chief

Published

6 hours ago

September 7, 2025

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Labour 'failing to deliver change that people voted for' - TUC chief

The leader of Britain’s trade unions is to accuse Sir Keir Starmer of failing to deliver the change Labour promised during the election campaign last year.

In his keynote speech at the TUC conference in Brighton, general secretary Paul Nowak will claim that for too many people change still feels like a slogan, not a reality.

After a troubled first year in government that has seen Labour lose support to Reform UK, Mr Nowak will warn the lack of change cannot continue and the government must deliver on jobs, public services and living standards.

And he will claim Rachel Reeves’ budget on 26 November must include windfall taxes on bank profits and gambling companies, a wealth tax on millionaires and the lifting of the two-child benefit cap introduced by George Osborne during the coalition government.

Mr Nowak’s speech comes just days after the unions lost their champion in cabinet, Angela Rayner, prompting fears among delegates in Brighton that the government is poised to weaken its flagship legislation on workers’ rights.

The Conservatives have responded to Ms Rayner’s demise by writing to the new business and trade secretary, Peter Kyle, calling on him to scrap the Employment Rights Bill, claiming it will reduce jobs and mean more red tape and bureaucracy.

But Labour is losing support to Nigel Farage’s party, not the Tories, and will also – potentially – to left-wing parties in future. And in an unusual move, the new left-wing leader of the Green Party, Zack Polanski, will also address the TUC later.

Labour’s election manifesto last year showed a black and white photo of a shirt-sleeved Sir Keir on the front cover with the single word “Change” in red.

In his attack on the government’s first year in office, Mr Nowak will say: “The Tories took Britain to the brink. That’s why last July, the government was elected on a manifesto that promised change.

“But we have to be honest – for too many people, change still feels like a slogan not a lived reality.

“This can’t continue. Throughout our history, we’ve been at our best when we’ve been ambitious for working people.

“So today, my message to the government is simply this.

“Deliver the manifesto on which you won a huge majority last July. Deliver good jobs, decent public services and better living standards in every corner of the country. Deliver the change people voted for.

“And show working-class communities whose side you are on.”

On the budget, which Labour MPs believe will be crucial to the government’s hopes of recovery in its fortunes, Mr Nowak will declare: “Introduce a windfall tax on record bank profits and gambling companies. And back it with new taxes on wealth.

“If billionaires can afford fleets of private yachts. Day trips into space. Weddings that shut down Venice – they can pay a bit more tax.

“Do what’s best for those who go out to work, day in, day out, and still can’t get by. Deliver the Employment Rights Bill and deliver it in full.

“And make it clear – a Labour government will never stand aside and watch a child’s potential be wasted because of poverty. Lift the two-child cap, and give our kids the future they deserve.”

And on the issue set to dominate this week’s conference, workers’ rights, Mr Nowak will say: “The government has a manifesto promise to make work pay.

“Stronger rights at work are overwhelmingly popular with voters across the political spectrum.

“The public knows decent work is the best way to deliver the reset this country needs.

“The best way to improve living standards.

“And the best way to rebuild our communities hit hard by low pay and insecure work.

“So here is our challenge to government.

“Deliver that Employment Rights Bill in full and deliver the change you promised at the election.”

But the Tories’ shadow business secretary Andrew Griffith, in a letter to Mr Kyle, claims the bill will be deeply damaging to economic growth and reduce living standards.

“Rather than proceed at this time with a measure which on the government’s own impact assessment will reduce employment and growth, now is the time to put the national interest first,” he wrote.

“Any credible ‘reset’ of this government requires that this bill be shelved and the government look afresh at measures to promote the growth and competitiveness of the UK economy.”