Crypto Roundup for December 16, 2022
By djKUPO | Blockchain in Paradise
Crypto Firm Amber Raises $300 Million to Tackle Damage From FTX (Bloomberg)
"Embattled crypto firm Amber Group has raised $300 million mainly for customers who lost money on the platform’s products due to FTX’s implosion, according to co-founder and and Chief Executive Officer Michael Wu. Amber, a leading crypto trading and lending platform, had planned to raise $100 million at a $3 billion valuation in multiple parts, but changed tack once Sam Bankman-Fried’s FTX exchange blew up, Wu said in an interview."
Incoming House Financial Services Committee Chair Asks Secretary Yellen to Delay Crypto Tax Provision (CoinDesk)
"The top Republican on the House Financial Services Committee wants the U.S. Treasury Department to delay implementing the crypto tax provisions in last year's Infrastructure Investment and Jobs Act until there is further clarity around who's covered by the bill. Rep. Patrick McHenry (R-N.C.), the current ranking member but who will its chair when Republicans take over the U.S. House of Representatives in the new Congress next month, wrote Treasury Secretary Janet Yellen saying the provision shouldn't be implemented until taxpayers know who will have to meet its requirements."
Coinbase Launches Asset Recovery Tool for Unsupported Ethereum-Based Tokens (Techcrunch)
"Coinbase, the second-largest crypto exchange globally, has launched a new tool to help its customers recover more than 4,000 unsupported ERC-20 tokens sent to its ledger, the company exclusively told TechCrunch. “ERC-20 token” is technical terminology for any cryptocurrency created using the Ethereum blockchain. While Coinbase supports hundreds of cryptocurrencies, there are thousands that it doesn’t. The ERC-20 self-service asset recovery tool allows customers to recover different kinds of tokens sent to a Coinbase address."
FTX Asks Court Permission to Sell Off Four Businesses, Including LedgerX (The Block)
"FTX's brand is so toxic it wants to jettison subsidiaries before they lose value by association. The company's new leadership asked a federal bankruptcy judge for permission to sell off parts of the failed crypto empire’s business early next year — while those subsidiaries of FTX are still valuable. Lawyers representing FTX filed a motion to begin an auction process for digital currency derivatives platform LedgerX, stock trading service Embed, as well as FTX Japan and FTX Europe."
Microsoft Bans Crypto Mining on Its Online Services Without Permission (CoinDesk)
"Tech giant Microsoft won't allow its customers to mine cryptocurrencies on its online services without prior written permission, according to a policy update that came into effect on Dec. 1. "Neither Customer, nor those that access an Online Service through Customer, may use an Online Service ... to mine cryptocurrency without Microsoft’s prior written approval," the update said. The company didn't have much explanation on the ban. However, in an update on Azure - its cloud platform - Microsoft said that crypto mining is prohibited in all online services as part of actions required to "secure the partner ecosystem.""
Binance CEO Zhao Warns Bumpy Road Ahead in Message to His Staff (Bloomberg)
"Binance Holdings Ltd. Chief Executive Officer Changpeng Zhao warned his colleagues to expect tough months ahead and said the firm will overcome current challenges, as the crypto billionaire tries to assuage concerns about the company’s financial health. In a memo sent to staff, CZ, as the founder of the world’s largest crypto exchange is known, said the industry for digital assets is going through ‘a historic moment’ and that Binance is in a strong financial position and ‘will survive any crypto winter.’"
Justice Department Charges Nine in Crypto Ponzi Schemes (Decrypt)
"The U.S. Department of Justice on Wednesday announced that the agency had filed charges against nine individuals for operating two crypto Ponzi schemes, IcomTech and Forcount, also known as Weltsys. “With these two indictments, this office is sending a message to all cryptocurrency scammers: We are coming for you,” U.S. Attorney Damian Williams said in a statement. “Stealing is stealing, even when dressed up in the jargon of cryptocurrency.”"
Top FTX Group Executive Tipped off Bahamas Authorities About Comingling of Funds in November (CoinDesk)
"A top executive of the FTX group of companies told Bahamas police that funds were commingled between the crypto exchange and its sister trading firm Alameda Research as early as Nov. 9, court documents show. Ryan Salame, the co-chief executive of FTX's Bahamas entity, called FTX Digital Markets, told the Bahamas Securities Commission on Nov. 9 that "clients’ assets which may have been held with FTX Digital were transferred to Alameda Research," according to a letter to the Bahamas Police Commissioner disclosed this week. This would constitute "misappropriation, theft, fraud or some other crime," Christina Rolle, executive director at Securities Commission of The Bahamas wrote to the Commissioner."
US Senators Warren, Marshall Introduce Digital Assets Anti-Money Laundering Bill (CoinDesk)
"U.S. Senators Elizabeth Warren (D-Mass.) and Roger Marshall (R-Kan.) are introducing a bill to crack down on money laundering and financing of terrorists and rogue nations via cryptocurrency. If it becomes law, the Digital Asset Anti-Money Laundering Act will bring know-your-customer (KYC) rules to crypto participants such as wallet providers and miners and prohibit financial institutions from transacting with digital asset mixers, which are tools designed to obscure the origin of funds."
Gemini Reports Third-Party Phishing Campaign That Affected Some Customer Data (The Block)
"Crypto exchange Gemini said Wednesday that a phishing campaign led to the collection of some customer email addresses and partial phone numbers. "Some Gemini customers have recently been the target of phishing campaigns that we believe are the result of an incident at a third-party vendor," the company said in a statement. No account information or systems were impacted, and all customer accounts remain secure, Gemini said."
FTX Founder Bankman-Fried in Custody After Fraud Charges, Bail Denied (Reuters)
"A Bahamian judge denied FTX founder Sam Bankman-Fried bail on Tuesday, hours after U.S. prosecutors accused the 30-year-old of misappropriating billions of dollars and violating campaign laws in what has been described as one of America's biggest financial frauds."
Tether Vows to Remove Secured Loans Amid Rush to Show Solvency (The Block)
"Tether intends to remove all secured loans from its backing in 2023 after The Wall Street Journal said that the stablecoin operator's increasing roster of loans might make it unable to pay back redemptions in the event of a crisis. The company told the WSJ that its loans reached $6.1 billion, or 9% of Tether's total assets, as of Sept. 30. The group's consolidated total assets reached more than $68 billion in the third quarter. Tether claimed to make sure borrowers offer "extremely liquid" collateral for these loans, but now the operator plans to scrap them altogether."
New York Regulator and Bitlicense Proponent Gets Seat on Federal Counsel of Agency Leaders (The Block)
"Adrienne Harris, the leader of New York's state banking and financial regulatory agency that oversees the state's BitLicense, has been named to a non-voting seat on the Financial Stability Oversight Counsel, or FSOC. Harris is the superintendent of New York's Department of Financial Services, or NYDFS. The Conference of State Bank Supervisors, or CSBS, appoints a state representative to fill the federal seat that Harris is taking."
Binance Resumes USDC Stablecoin Withdrawals After Temporary Pause (The Block)
"Binance has resumed processing withdrawal requests of the USD Coin (USDC) stablecoin after pausing them for several hours. Binance, the world's largest cryptocurrency exchange platform by daily volume, temporarily stopped processing USDC withdrawals due to inadequate USDC reserves on the platform, according to Binance CEO Changpeng Zhao. Binance holds a large majority of its stablecoin holdings, more than $11.5 billion in Paxos-issued BUSD, according to Nansen data. To increase its USDC reserves, it made efforts to swap its BUSD holdings with USDC."
Financial Stability Board to Hold Crypto Providers to ‘Same Standards as Banks’ (Decrypt)
"The Financial Stability Board (FSB), the world’s largest financial services regulator, has said it is set to hold crypto firms “to the same standards as banks . . . if they provide the same service that banks provide.” A spokesperson for the global watchdog told the Financial Times it is set to lay out a new set of international rules governing cryptocurrencies in early 2023, which would then be implemented by local governments."
Sam Bankman-Fried Arrested in the Bahamas on Eve of Congressional Testimony (The Block)
"Sam Bankman-Fried, the former CEO of the FTX crypto exchange, was detained in the Bahamas just one day before he was scheduled to testify virtually before the U.S. House Financial Services Committee for its first hearing on the collapse of the company. The surprise arrest followed receipt of formal notification from the U.S. that it filed criminal charges against Bankman-Fried and is likely to request his extradition."
U.S. Justice Dept Is Split Over Charging Binance as Crypto World Falters (Reuters)
"Splits between U.S. Department of Justice prosecutors are delaying the conclusion of a long-running criminal investigation into the world's largest cryptocurrency exchange Binance, four people familiar with the matter have told Reuters. The investigation began in 2018 and is focused on Binance's compliance with U.S. anti-money laundering laws and sanctions, these people said. Some of the at least half dozen federal prosecutors involved in the case believe the evidence already gathered justifies moving aggressively against the exchange and filing criminal charges against individual executives including founder Changpeng Zhao, said two of the sources. Others have argued taking time to review more evidence, the sources said."
Binance Withdrawals Surge as Concerns About Its Reserve Report Spook Traders (CoinDesk)
"Binance, the world’s largest crypto exchange by trading volume, endured a wave of withdrawals on Monday amid concerns about its proof of reserve report. Net outflows, the difference between the value of assets arriving and leaving the exchange, hit $902 million in the past 24 hours, according to data by blockchain intelligence platform Nansen."
Coinbase Says Law Enforcement Requests Rose 66% From Year Ago (CoinDesk)
"Coinbase (COIN) said that total worldwide law enforcement and agency requests increased 66% to 12,320, according to its latest transparency report, released Monday. The report, the exchange's fourth, covers the period from Oct. 1, 2021, through Sept. 30, 2022. Coinbase, which has more than 108 million customers around the world, attributed the increase in requests to a combination of the company’s expansion and “an overall increase in law enforcement and regulatory interest in the crypto industry.”"
S Korea Says Crypto-Fugitive Do Kwon Is in Serbia (BBC)
"The Seoul Southern District Prosecutors' Office said it would work with Serbia to detain him. Mr Kwon, 31, was charged with fraud and breaches of capital markets law after the tokens imploded in May. In September Interpol issued an international warrant for his arrest."
Congressional Committee Confirms SBF as FTX Hearing Witness (The Block)
"Disgraced FTX founder Sam Bankman-Fried is slated to testify in a congressional hearing on the collapse of the company, the U.S. House of Representatives Committee on Financial Services confirmed. Bankman-Fried’s panel was added to the list of witnesses for a hearing on Tuesday, Dec. 13, the committee said. Before Bankman-Fried testifies, the committee will call upon current FTX CEO John J. Ray III."
Uniswap ‘Fee Switch’ Proposal for Popular Ether Pools Stirs Up Community Debate (CoinDesk)
"Crypto markets remained calm over the weekend as investors girded themselves for what will likely be the last significant events on 2022's inflation front, the release of November's Consumer Price Index (CPI) report on Tuesday and the U.S. Federal Reserve's latest interest rate decision a day later. Bitcoin was recently trading at $17,114, slightly below where it stood 24 hours earlier, and when it started the weekend. With just a couple of glitches, the largest cryptocurrency by market capitalization has held firmly above $17,000 for the past two weeks as the fallout from crypto exchange FTX's implosion and other industry debacles has slowed."
US Probes FTX Founder for Fraud, Examines Cash Flows to Bahamas (Bloomberg)
"US prosecutors, laying the groundwork for a potential fraud case against Sam Bankman-Fried and others involved in the collapse of cryptocurrency giant FTX, are scrutinizing how funds held by the exchange operator moved outside the US as it was hurtling toward bankruptcy, according to a person familiar with the matter. Prosecutors are closely examining whether hundreds of millions of dollars were improperly transferred to the Bahamas around the time of FTX’s Nov. 11 bankruptcy filing in Delaware, the person said, asking not to be named without authorization to discuss the case publicly."
Caroline Ellison Hires SEC’s Former Top Crypto Cop for FTX probe (Bloomberg)
"Ex-Alameda Research CEO Caroline Ellison has hired a former SEC official who oversaw many of the regulator’s biggest crypto cases as her lawyer in the federal probe into cryptocurrency exchange FTX’s calamitous collapse. Stephanie Avakian, former enforcement division chief at the Securities and Exchange Commission, is representing Ellison along with other lawyers at her firm, WilmerHale, according to people familiar with the matter."
Amber Group Owes Troubled Crypto Lender Vauld’s CEO $130 Million (The Block)
"Amber Group, a struggling crypto trading firm, owes around $130 million to troubled crypto lender Vauld's CEO Darshan Bathija. In July, Vauld mentioned in its affidavit that it has a loan receivable worth around $130 million net from an unnamed "Counterparty 1" and that counterparty is Amber, a source with direct knowledge of the matter told The Block."
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