Sam Bankman-Fried convicted, PayPal faces SEC subpoena, and other news: Hodler’s Digest, Oct. 19 – Nov. 4

Published

1 year ago

November 4, 2023

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Sam Bankman-Fried found guilty, what’s next for the ‘crypto king’?

Former FTX CEO Sam Bankman-Fried was found guilty of all seven charges by a jury in his criminal trial in New York after about four hours of deliberation. He was convicted of two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy and one count of money laundering conspiracy. He will return to court for sentencing by New York District Judge Lewis Kaplan on March 28, 2024. Government prosecutors will recommend a sentence, but Judge Kaplan will have the final say. Bankman-Fried’s crimes each carry a maximum sentence of between five and 20 years in prison with the wire fraud, wire fraud conspiracy and money laundering conspiracy carrying a maximum 20-year sentence. His lawyers, however, say the fight isn’t over yet.

Payment giant PayPal has received a subpoena from the United States Securities and Exchange Commission (SEC) regarding its U.S. dollar-pegged stablecoin. The subpoena requested that PayPal produce certain documents, the firm said. “We are cooperating with the SEC regarding this request,” PayPal noted in a financial report. The SEC has sued several of the largest local companies in the crypto industry, including its ongoing lawsuit against Coinbase. In October 2023, the regulator moved to dismiss its lawsuit against Ripple, the company behind the XRP token, one of the largest cryptocurrencies by market cap.

Invesco Galaxy spot Bitcoin ETF joins BlackRock on DTCC site

The ticker for Invesco and Galaxy’s spot Bitcoin exchange-traded fund (ETF) — BTCO — has appeared on the Depository Trust and Clearing Corporation’s (DTCC) website, marking a step forward in the application process for the two asset managers. A ticker added to the list of “ETF Products” on the DTCC’s site is not a guarantee of future approval for that product. However, according to a DTCC spokesperson, it is standard practice to add securities to the NSCC security eligibility file “in preparation for the launch of a new ETF to the market.” Recently, BlackRock and 21Shares’ application for a similar product were added to the DTCC website as well.

Top Swiss bank launches Bitcoin and Ether trading with SEBA

Switzerland’s St.Galler Kantonalbank (SGKB), one of the largest banks in the country, is moving into cryptocurrency by introducing Bitcoin and Ether trading to its customers. The bank has partnered with the SEBA Bank to offer its clients digital asset custody and brokerage services. SGKB plans to expand its offerings to additional cryptocurrencies based on client demand. Founded back in 1868, St.Galler Kantonalbank is reportedly the fifth largest bank in Switzerland, having had a total of 53.6 billion Swiss francs ($58.9 billion) in assets under management at the end of 2022.

Jack Dorsey’s Block had $5.62B in revenue, $44M in Bitcoin profits in Q3

Jack Dorsey-led Block published its third-quarter earnings report on Nov. 2, revealing a profitable quarter and surpassing analyst expectations. The firm had $5.62 billion in revenue in the third quarter of 2023, boosted by solid revenue growth in Cash App and Square, with $44 million in profit on its Bitcoin holdings thanks to a price surge in recent months. Block generated a gross profit of $1.90 billion, up 21% year-over-year.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $34,634, Ether (ETH) at $1,829 and XRP at $0.61. The total market cap is at $1.29 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are THORChain (RUNE) at 39.73%, Arweave (AR) at 32.15%, and Oasis Network (ROSE) at 24.88%.

The top three altcoin losers of the week are Quant (QNT) at -7.34%, Pepe (PEPE) at -6.49%, and Mina (MINA) at -4.13%.

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

Most Memorable Quotations

“He [Sam Bankman-Fried] lied to get customers’ trust.”

Danielle Sassoon, U.S. assistant attorney

“We respect the jury’s decision. But we are very disappointed with the result. Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him.”

Mark Cohen, attorney of Sam Bankman-Fried

“[Bitcoin] demand is going to increase, and supply is going to contract and this is fairly unprecedented in the history of Wall Street.”

Michael Saylor, CEO of MicroStrategy

“The Bitcoin Ordinal protocol is better designed for decentralization and security than the Ethereum NFT protocol. High-value NFTs will win on Bitcoin.”

Danny Yang, CEO of Metagood

“I don’t own any Bitcoin, to be frank, but I should.”

Stanley Druckenmiller, billionaire investor

“Fuck regulators.”

Sam Bankman-Fried, former CEO of FTX

Prediction of the Week

Bitcoin to the moon! Top 5 BTC price predictions for 2024 and beyond

A lot can happen in Bitcoin within a short space of time, and with 2024 less than two months away, there is plenty of time for fresh BTC price volatility to take hold. Before the yearly candle close, some say BTC/USD will be higher than at present — to the tune of another 30%.

In a blog post in late October, Matrixport doubled down on a $45,000 year-end price target, which it initially revealed in January. It was based on a handful of in-house models, with Matrixport also successfully predicting Bitcoin’s October gains. “Bitcoin is breaking above the July $31,500 resistance level, showing that $45,000 is achievable by year-end,” it summarized.

For many, the halving is a watershed moment in every Bitcoin price cycle. In September, BitQuant stated that BTC/USD would surpass its current $69,000 peak before April 2024.

FUD of the Week

SafeMoon executive team charged with multiple fraud counts, arrests made

The United States Securities and Exchange Commission announced on Nov. 1 that it was charging SafeMoon and three of its executives with fraud and unregistered securities sales in connection with its SafeMoon Token. According to the SEC, SafeMoon executives Kyle Nagy, John Karony and Thomas Smith withdrew assets worth $200 million from the project and misappropriated investor funds. The Justice Department is charging the three with conspiracy to commit securities fraud, conspiracy to commit wire fraud and money laundering conspiracy.

Bitget, Floki teams accuse each other of manipulation after token listing

The teams behind the Floki protocol and Bitget crypto exchange have accused each other of market manipulation after the protocol’s token, TokenFi, was listed and delisted by Bitget. According to a social media post from the Floki team, Bitget listed the token before it was launched, referring to the Bitget listing as a “fake token.” In a blog post, Bitget claimed that the Floki team was “suspected of market manipulation by maliciously controlling the initial liquidity.”

Oyster Protocol founder gets 4 years jail for $5.5M tax evasion

Amir Elmaani, founder of the now-defunct Oyster Protocol, has been handed the maximum sentence of four years in prison for tax evasion. The United States Attorney’s Office said on Oct. 31 that Elmaani — also known by the alias “Bruno Block” — was sentenced to prison following his guilty plea where he admitted to secretly minting and selling Pearl tokens while not paying income tax on a swath of profits from the project. In addition to his four-year prison sentence, Elmaani was sentenced to one year of supervised release and was ordered to pay $5.5 million in restitution.

Crypto’s ‘pro-rioter’ glitch artist stirs controversy — Patrick Amadon, NFT Creator

Digital disobedience is in all of us, says provocative glitch artist Patrick Amadon.

Slumdog billionaire: Incredible rags-to-riches tale of Polygon’s Sandeep Nailwal

Sandeep Nailwal’s life story is an incredible rags-to-riches tale that goes one better than Oscar-winning film “Slumdog Millionaire.”

Slumdog billionaire 2: ‘Top 10… brings no satisfaction’ says Polygon’s Sandeep Nailwal

Part 2 of our Sandeep Nailwal special tells how Polygon nearly died in 2020 but went on to be one of the biggest projects in the space.

Editorial Staff

Cointelegraph Magazine writers and reporters contributed to this article.

Politics

Kenya drafts legislation to regulate cryptocurrencies

Published

2 hours ago

January 11, 2025

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Kenya drafts legislation to regulate cryptocurrencies

Kenya is preparing legislation to regulate cryptocurrencies with a draft proposal open for public feedback until Jan. 24.

Politics

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

Published

15 hours ago

January 11, 2025

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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

16 hours ago

January 11, 2025

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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”.

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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.”