NY sues crypto firms, FTX’s Nishad faces 75 years in jail, and Grayscale…
Top Stories This Week
Major cryptocurrency investment firm Grayscale Investments has filed a new application with the U.S. Securities and Exchange Commission for a new spot Bitcoin exchange-traded fund (ETF). The new filing aligns with Grayscale’s ongoing effort to convert its Grayscale Bitcoin Trust into a spot Bitcoin ETF, according to a statement from the firm. The news comes weeks after Grayscale won an SEC lawsuit for its spot Bitcoin ETF review, with a court of appeals ordering the SEC to explain why it rejected Grayscale’s application in June 2023. The company also filed with the SEC to list an Ether futures ETF in September.
New York’s attorney general has filed a lawsuit against cryptocurrency firms Gemini, Genesis and Digital Currency Group (DCG) for allegedly defrauding more than 23,000 investors through the Gemini Earn investment program. The suit claims that Gemini assured investors that the program was a low-risk investment, while investigations carried out by the office of New York State Attorney General Letitia James found that Genesis’ financials “were risky.” The lawsuit also charges Genesis’ former CEO, Soichiro Moro, and its parent company’s CEO, Barry Silbert, with defrauding investors by attempting to conceal more than $1.1 billion in losses. In addition, the court case looks to ban Gemini, Genesis and DCG from operating in the financial investment industry in New York.
Nishad Singh, the former engineering director at now-defunct crypto exchange FTX, faces up to 75 years in prison for charges related to defrauding users of the crypto exchange. He pleaded guilty to fraud charges as part of his cooperation agreement with the U.S. prosecutors. During his testimony this week, Singh said that when liquidity issues at FTX began in November 2022, he felt “suicidal for some days” while dealing with alleged inconsistencies between the exchange’s public statements and its activities behind the scenes. Singh also claimed that Bankman-Fried had the habit of deciding on purchases through Alameda Research by himself.
Grayscale files for new spot Bitcoin ETF on NYSE Arca
Grayscale Investments, a cryptocurrency investment firm, has applied for a new spot Bitcoin exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC). This filing is part of Grayscale’s efforts to convert its Grayscale Bitcoin Trust into an ETF. The move comes after a court of appeals ordered the SEC to explain why it rejected Grayscale’s application in June 2023. Grayscale also filed with the SEC to list an Ether futures ETF in September. This filing could mark a significant development in the regulatory landscape for cryptocurrency investment products in the United States.
New York Attorney General sues Gemini, Genesis, DGC for allegedly defrauding investors
The New York Attorney General has filed a lawsuit against cryptocurrency firms Gemini, Genesis, and Digital Currency Group (DCG) for allegedly defrauding over 23,000 investors. The lawsuit alleges that Gemini, Genesis, and DCG participated in a fraudulent investment program called Gemini Earn, which falsely claimed to be a low-risk investment. The investigation conducted by the attorney general’s office revealed that Genesis’ financials were actually risky, and the program led to investors losing significant amounts of money. The lawsuit also accuses Genesis’ former CEO and DCG’s CEO of attempting to hide more than $1.1 billion in losses. If successful, the lawsuit could result in a ban on Gemini, Genesis, and DCG from operating in New York’s financial investment industry.
Former FTX engineering director faces up to 75 years in prison following guilty plea
Nishad Singh, the former engineering director of crypto exchange FTX, has pleaded guilty to fraud charges and could face up to 75 years in prison. Singh’s charges are related to defrauding users of the exchange during a period of liquidity issues in November 2022. He claimed that there were inconsistencies between FTX’s public statements and its actual activities. Singh also alleged that FTX’s CEO, Bankman-Fried, made purchasing decisions through Alameda Research without consulting others. Singh’s guilty plea could have significant implications for the ongoing legal and regulatory scrutiny of the cryptocurrency industry.
Binance shutting down European Visa debit card in December
Binance, one of the world’s largest cryptocurrency exchanges, is discontinuing its Visa debit card services in the European Economic Area (EEA) starting in December. This decision comes shortly after Binance restored euro deposits and withdrawals, which had been temporarily suspended due to a partnership issue. The termination of the Visa debit card services in the EEA is the latest setback for Binance, as it faces increased regulatory scrutiny and restrictions in various jurisdictions. Binance has also stopped onboarding new users in the United Kingdom because of the loss of a third-party service provider. The discontinuation of the Visa debit card services may impact Binance users in the EEA who relied on the card for crypto-related transactions.
Elon Musk, Mark Cuban team up to contest SEC trial strategies
Elon Musk, CEO of Tesla and SpaceX, and Mark Cuban, billionaire entrepreneur and owner of the Dallas Mavericks, have joined forces to challenge the trial strategies of the U.S. Securities and Exchange Commission (SEC). They have submitted a shared amicus brief to the Supreme Court of the United States expressing concerns about the SEC’s approach to conducting internal proceedings without the inclusion of juries. The amicus brief is related to the SEC vs. Jarkesy case, in which the defendant argues that the SEC’s internal adjudication process violates his Seventh Amendment rights. The case raises questions about the fairness and transparency of the SEC’s enforcement actions and could have implications for future regulatory proceedings in the crypto industry.
Winners and Losers
At the end of the week, Bitcoin (BTC) is priced at $29,590, Ether (ETH) at $1,607, and XRP at $0.52. The total market cap is $1.12 trillion, according to CoinMarketCap.
Among the top 100 cryptocurrencies, the top three gainers of the week are Bitcoin SV (BSV) with a 59.00% increase, Stacks (STX) with a 25.91% increase, and MX TOKEN (MX) with a 25.26% increase. The top three losers of the week are Conflux (CFX) with an -8.03% decrease, Frax Share (FXS) and Sui (SUI) with a -6.35% decrease. These trends in the cryptocurrency market indicate both opportunities and risks for investors.
Prediction of the Week
Bitcoin (BTC) has reached a two-month high with the price hitting $30,233 on Bitstamp. This rally has led to speculation that Bitcoin will break the $32,000 mark soon. However, market participants are cautious and believe that a weekly candle close above the 100-week moving average at $28,627 is needed to confirm the strength of the rally. It is important to watch for confirmations and resistance levels at $30.5k, $31.5k, and $33k to determine if the bull breakout is confirmed. The cryptocurrency market remains volatile, and investors should exercise caution as they navigate these price movements.
FUD of the Week
The Fantom Foundation, the developer of the Fantom network, has experienced a hack resulting in the theft of over $550,000 worth of cryptocurrency. The majority of the stolen funds belonged to other users, and the foundation assures that 99% of its own funds remain secure. Initial reports suggested that the attacker had stolen approximately $7 million, but the Fantom Foundation clarified that some wallets labeled as belonging to the foundation were mislabeled by block explorers. This hack highlights the ongoing security challenges faced by cryptocurrency projects and serves as a reminder for users to exercise caution and take necessary precautions to protect their digital assets.
TrueUSD (TUSD) has reported a potential leak of Know Your Customer (KYC) and transaction history data after one of its third-party vendors was compromised. The breach occurred at a vendor that had previously operated the TUSD stablecoin. The full extent of the data leak and the number of affected users is currently unknown. However, such data breaches can pose risks such as phishing attacks, where attackers use stolen information to target unsuspecting users. Users should remain vigilant and be cautious of unexpected communications related to their cryptocurrency accounts.
The development team behind the gaming project FinSoul has been accused of carrying out an exit scam and defrauding investors of $1.6 million. The team allegedly hired actors to pose as executives and raised funds for a gaming platform that was never developed. Instead of using the funds as intended, the team allegedly transferred the money to themselves. This case highlights the importance of conducting due diligence and verifying the credibility and integrity of cryptocurrency projects before investing. Investors should be cautious of projects with limited transparency or suspicious practices.
Big Questions: What did Satoshi Nakamoto think about ZK-proofs?
Zero-knowledge proof (ZK-proof) technology has become an integral part of the cryptocurrency industry. But what did Bitcoin’s creator, Satoshi Nakamoto, think about this technology? While there is no definitive answer, ZK-proofs align with Satoshi’s vision of privacy and security in transactions. ZK-proofs enable the verification of information without revealing sensitive data, helping to maintain users’ privacy and protect against fraud. As the crypto world continues to evolve, ZK-proofs and other privacy-enhancing technologies will likely play a crucial role in ensuring the widespread adoption and trust in digital currencies.
Ethereum restaking: Blockchain innovation or dangerous house of cards?
“Restaking” refers to the practice of reusing staked Ether to earn fees and rewards. While restaking can offer benefits such as increased liquidity and the ability to support other protocols, some experts have raised concerns about the potential risks involved. Critics argue that restaking could create a concentration of power and wealth among large stakers, potentially compromising the decentralization and security of the Ethereum network. As Ethereum explores new consensus mechanisms like proof-of-stake, it is crucial to carefully consider the potential implications and balance the benefits and risks of restaking.
Bitmain’s revenge, Hong Kong’s crypto rollercoaster: Asia Express
In recent news from Asia, Bitmain has allegedly fired staff for speaking out against salary cuts. In Hong Kong, investors are losing faith in cryptocurrency following the JPEX scandal. Bitget, a cryptocurrency exchange, has launched a new crypto credit card, adding to the growing adoption of digital assets in the region. These developments highlight the dynamic and evolving nature of the cryptocurrency industry in Asia, where regulatory challenges, market manipulation, and innovative products and services continue to shape the landscape.
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