Sam Bankman-Fried Released on $250M Bail Secured by Parents (CoinDesk)
"A federal judge agreed to release former FTX CEO Sam Bankman-Fried after he appeared in U.S. federal court in New York on Thursday on charges that he was the mastermind behind the fraud and illicit movement of customer funds inside his former crypto empire. The judge set bail at $250 million. Bankman-Fried, who was brought to the U.S. overnight by the Federal Bureau of Investigation after his extradition from the Bahamas cleared on Wednesday, arrived at the courthouse in New York to face the U.S. felony charges for the first time. The case in the U.S. District Court for the Southern District of New York centers on accusations of fraud, money laundering and campaign-finance violations."
Kraken Pushes ‘Pro’ Product for Advanced Traders (The Block)
"Crypto exchange Kraken has publicly launched Kraken Pro, a suite of advanced trading tools and a new interface that unifies access to spot trading, margin trading, staking and portfolio management. As the name implies, Kraken Pro is geared toward advanced traders. It "leverages the latest technology to reduce latency and handle peak demand," a press release claims, and supports more than 21o coins or tokens."
Tron’s Justin Sun Was Secret Top Client of Crypto Asset Manager Valkyrie (CoinDesk)
"Tron founder Justin Sun is one of the richest figures in crypto, and a good chunk of his bitcoin (BTC) is stored in one place: U.S.-based Valkyrie Investments. The altcoin kingpin had more than $580 million of BTC stashed with the crypto asset manager at one point in August, according to a private financial document that CoinDesk reviewed. That amounted to over 90% of money at Valkyrie’s largest division, Valkyrie Digital Assets LLC, the document shows."
Crypto Exchange Bullish’s Ambitions for Public Listing Stumble as SPAC Deal Times Out (The Block)
"Bullish has ended a SPAC deal that would have brought the block.one-founded crypto exchange onto the New York Stock Exchange. Cayman Islands-registered Bullish and Far Peak, the acquisition vehicle led by former NYSE leader Tom Farley, put out a joint announcement on the end of the partnership, which they'd originally publicized in July 2021. Far Peak will be shutting down as an entity between now and March 7."
FTX Customer Committee Taps Paul Hastings for Chapter 11 Case (WSJ)
"A committee representing bankrupt crypto exchange FTX’s unsecured creditors, including millions of its customers, has hired a legal adviser to look out for their interest in bankruptcy. The nine-member committee has hired Paul Hastings LLP after taking pitches from various law firms for the role, according to people with knowledge of the matter. A process to select a financial adviser is still going on, the people said. Representatives at FTX and Paul Hastings didn’t immediately respond to requests seeking comment."
Alameda's Caroline Ellison, FTX's Gary Wang Plead Guilty to DOJ 'Fraud' Charges, Also Settle With SEC, CFTC (CoinDesk)
"Former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang pleaded guilty to charges tied to FTX's collapse, U.S. Attorney Damian Williams announced Wednesday night. The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) also announced charges against the two, saying Ellison manipulated the price of FTT, an exchange token issued by FTX, at exchange founder Sam Bankman-Fried’s direction."
SEC Calls FTT Exchange Token a Security (CoinDesk)
"FTX's exchange token FTT was sold as an investment contract and thus is a "security," the U.S. Securities and Exchange Commission said in a complaint filed late Wednesday, in a move that is sure to have a wide-ranging impact on the industry. "If demand for trading on the FTX platform increased, demand for the FTT token could increase, such that any price increase in FTT would benefit holders of FTT equally and in direct proportion to their FTT holdings," the SEC wrote in its complaint. "The large allocation of tokens to FTX incentivized the FTX management team to take steps to attract more users onto the trading platform and, therefore, increase demand for, and increase the trading price of, the FTT token.""
Publicly Traded Crypto Miner Core Scientific Files for Chapter 11 Bankruptcy (The Block)
"Core Scientific, the largest bitcoin miner by computing power, filed for Chapter 11 bankruptcy protection as this year's slump in crypto prices claimed another victim. The company estimated its assets and liabilities at between $1 billion and $10 billion, according to the filing with the U.S. Bankruptcy Court for the Southern District of Texas on Wednesday. Core’s struggles reflect those of the entire mining industry, which has seen profit margins continuously shrink, as bitcoin prices decline and energy costs go up. Revenues fell 20% just last month, according to data from The Block Research."
Retiring Sen. Toomey Introduces New Stablecoin Bill (The Block)
"Sen. Pat Toomey, R-Pa., introduced a bill that would establish a federal framework for stablecoins and aims to “guide Congress” toward future crypto regulation, less than two weeks before the Republican is set to retire. “I’ve put forward a regulatory model that won’t undermine competition by favoring entrenched incumbents,” Toomey said in a statement. Toomey is the ranking Republican on the Senate Banking Committee, and he is viewed as an influential figure on crypto policy. The Pennsylvania lawmaker’s new bill is called the "Stablecoin Transparency of Reserves and Uniform Safe Transactions Act of 2022.""
Sam Bankman-Fried Is Being Extradited Wednesday, Bahamas Attorney General Says (CoinDesk)
"FTX CEO Sam Bankman-Fried is being extradited to the U.S. on Wednesday, Ryan Pinder, attorney general of The Bahamas, said in a statement. "Today the Foreign Minister, who is the Minister responsible for the Extradition Act, signed the Warrant of Surrender for Sam Bankman Fried. This allows the extradition of the subject to the United States of America," a statement said. Bankman-Fried expressed his intent to fight extradition during his first hearing after being arrested. He reportedly changed his mind within days of being incarcerated after a judge denied him bail. He was arrested on Dec. 12, 2022, after U.S. prosecutors indicted him on eight different charges, including wire fraud, conspiracy to commit money laundering and violating campaign finance laws."
Coinbase’s Slump to All-Time Low Sends Market Cap Below Dogecoin (CoinDesk)
"Shares of Coinbase (COIN) hit a fresh all-time low on Tuesday as the U.S.-based exchange continues to struggle with low trading volume amid falling crypto prices. Continuing declines for the stock have driven Coinbase’s market cap to less than $8 billion versus roughly $10 billion for meme favorite dogecoin (DOGE), which has suffered its own major tumble in 2022."
EY Says It Is 'Aware' of 'Unauthorized' Quadriga Wallet Transfers (CoinDesk)
"Ernst & Young said it has "become aware" that bitcoin (BTC) that'd been sitting QuadrigaCX's cold wallets has been moved elsewhere, according to a statement Tuesday. The company, which is acting as the bankruptcy trustee for the defunct Canadian trading platform, made the announcement four days after more than 100 BTC moved out of the wallets, which the company said Quadriga did not have access to. CoinDesk reported on Monday that EY had not initiated the transactions, which EY confirmed in its Tuesday statement."
Polygon Co-founder Launches Web3 Startup Accelerator Beacon (The Block)
"Sandeep Nailwal, co-founder of Polygon and Symbolic Capital, has launched a web3 startup accelerator. Called Beacon, the New York City-based accelerator said it will support early-stage crypto projects through mentorship and financing. Fifteen startups have already received funding from Beacon, Nailwal told The Block. He declined to share names of those startups, saying they will be announced in January."
BlockFi Seeks to Reopen Withdrawals for Certain Users (The Block)
"Bankrupt crypto lender BlockFi is seeking to reopen withdrawals for users who have crypto locked in wallet accounts. The lender filed a motion on Dec. 19 with the U.S. Bankruptcy Court in the District of New Jersey. The motion seeks to authorize the debtors to honor withdrawals from wallet accounts, update the user interface to reflect transactions and conduct ordinary course reconciliation of accounts."
If Grayscale’s Bitcoin ETF Dreams Fail, Firm May Try a Tender Offer, CEO Says (WSJ)
"Grayscale Investments said the firm would explore new options to return a portion of the Grayscale Bitcoin Trust GBTC’s capital to shareholders if it fails to transform the world’s largest bitcoin fund into an exchange-traded fund. These options could include a tender offer for up to 20% of the outstanding shares of the $10.7 billion trust, Grayscale Chief Executive Michael Sonnenshein said in a letter to investors viewed by The Wall Street Journal. A tender offer would make a direct appeal to shareholders to sell—or tender—their shares at a specific price during a certain time."
a16z Crypto Funds Still Have Billions to Deploy, Says Co-founder Chris Dixon (The Block)
"The majority a16z's most recent crypto fund is still to be deployed, general partner and crypto fund founder Chris Dixon said in an interview on The Block's podcast The Scoop. The latest $4.5 billion fund, known as "Crypto Fund 4," launched in May and dedicated $1.5 billion to seed investments and $3 billion to venture investments. "We've deployed less than 50%, so we have the majority of our recent fundraise left," Dixon said."
Binance.US Agrees to Buy Voyager's Assets for $1.02B (CoinDesk)
Voyager Digital, the bankrupt crypto lender, said Binance.US has agreed to buy its assets for $1.022 billion, the firm said on Monday. The bid represents the fair market value of Voyager's cryptocurrency portfolio, which has a current market value of around $1.002 billion, and an additional consideration of $20 million in incremental value. "The Binance.US bid aims to return crypto to customers in kind, in accordance with court-approved disbursements and platform capabilities," Voyager said in the statement."
FTX’s Bankman-Fried Gave Ex-Jane Street Traders Who Formed Modulo Capital $400M (CoinDesk)
"When a spreadsheet listing Sam Bankman-Fried’s venture investments was published by the Financial Times earlier this month, a couple of lines stood out. They showed the former cryptocurrency kingmaker’s hedge fund, Alameda Research, had invested a total of $400 million into a company called Modulo Capital. Though this amounted to one of Bankman-Fried’s largest venture capital bets, Modulo’s identity was a mystery, giving rise to plenty of speculation. Was it a Brazilian fund manager with a nearly identical name (besides an accent mark over the first letter O)?"
Visa Proposes Using StarkNet for Automatic Recurring Payments (The Block)
"Visa said that StarkNet, a layer 2 blockchain built on top of Ethereum, may help bridge the gap between crypto and the real world by letting people who use self-custodial wallets pay their bills more easily. While automatic recurring payments are common on traditional mobile banking apps, it's a harder task on the blockchain, according to a crypto thought leadership proposal from Visa. The team utilized a novel concept called account abstraction to explore how smart contracts can be implemented to enable automated and programmable payments."
No Withdrawals on OKX for Almost Seven Hours Amid Cloud Failure (The Block)
"Crypto exchange OKX hasn't processed any withdrawals for almost seven hours owing to a failure with its cloud services provider. The exchange shows a partial outage for deposits and withdrawals for all coins and tokens on its platform and one of its main hot wallets shows that it hasn't processed withdrawals since 2:47 a.m. UTC."
Sam Bankman-Fried to Reverse Decision on Contesting Extradition (Reuters)
"Former FTX Chief Executive Sam Bankman-Fried is expected to appear in court in the Bahamas on Monday to reverse his decision to contest extradition to the United States, where he faces fraud charges, a person familiar with the matter said on Saturday. The 30-year-old cryptocurrency mogul was indicted in federal court in Manhattan on Tuesday and accused of engaging in a scheme to defraud FTX customers by using billions of dollars in stolen deposits to pay for expenses and debts and to make investments for his crypto hedge fund, Alameda Research LLC."
Digital Currency Group Tokens Red Across Board, Sparking Market Speculation (The Block)
"Assets on the Digital Currency Group portfolio have taken a hit over the last 24 hours, triggering market speculation. It has been a month since troubled crypto lender Genesis Global Capital, daughter company of DCG, suspended redemptions. “DCG and Genesis have highly competent teams. In normal circumstances neither would pay 15%-30% of slippage to rapidly exit long-held positions over the weekend, so observers are naturally speculating this was a forced event of some kind,” Rich Rosenblum, president of trading firm GSR, told The Block on Saturday."
Co-Founder of OneCoin Pyramid Scheme Pleads Guilty; ‘CryptoQueen’ Still Wanted (CoinDesk)
"One of the founders behind OneCoin pleaded guilty to federal U.S. charges on Friday after one of the largest financial scams of all time, according to the Department of Justice. The purported cryptocurrency project was fraudulent from its 2014 beginnings, prosecutors said, with OneCoin – co-founded by Karl Greenwood – setting up a pyramid scheme to market it to millions of people, generating as much as $4 billion in revenue. Greenwood, 45, who allegedly called the investors “idiots” in an internal message, pleaded guilty to wire fraud and conspiracy to launder money."
Trump’s NFT Collection Swings up and Down Over the Weekend (The Block)
"The floor price for Donald Trump's NFT collection went up and down during its first weekend. The former president's collection sold out hours after its release on Thursday. The so-called digital trading card collection peaked at 0.839 ETH late Saturday afternoon and has since gone back down to 0.295 ETH, data from OpenSea shows."