SBF trial underway, Mashinsky trial set, Binance’s market share shrinks: Hodler’s Digest, Oct. 1-7

Top Stories This Week

Opening arguments begin in Sam Bankman-Fried trial

The trial of former FTX CEO Sam “SBF” Bankman-Fried kicked off on Oct. 4 in New York after jury selection began the day before today. Assistant United States Attorney Thane Rehn told jurors that SBF used FTX customer funds to counterpoint himself and gain credibility amongst politicians through donations. “The defendant blamed a downturn within the crypto market. But he had committed fraud. That is what the evidence on this trial will show. You will hear from his inner circle. His girlfriend will let you know how they stole money together,” Rehn said. SBF’s attorney Mark Cohen said the “girlfriend,” former Alameda Research CEO Caroline Ellison, and Changpeng Zhao, CEO of rival cryptocurrency exchange Binance, share a few of the blame for the downfall of FTX. Check out our detailed recap on Sam Bankman-Fried’s first week at trial.

Alex Mashinsky’s jury trial scheduled for September 2024

Alex Mashinsky, former CEO of crypto lender Celsius, will likely be tried on charges of fraud and market manipulation in September 2024, a judge selected Oct. 3. Mashinsky will remain free on $40 million bail, subject to travel and financial restriction, within the meantime. Celsius filed for bankruptcy in July 2022 and Mashinsky was arrested in July of this yr. He is accused of defrauding investors out of billions of dollars. The United States Commodity Futures Trading Commission, Securities and Exchange Commission and Federal Trade Commission all have lively suits against Mashinsky as well. Former Celsius chief revenue officer Roni Cohen-Pavon pleaded guilty to 4 criminal charges in September.

Binance spot market share drops for seventh consecutive month

Cryptocurrency exchange Binance is continuous to lose market share for the seventh month in a row. Analysts say HTX (formerly Huobi), Bybit and DigiFinex were the beneficiaries of Binance’s slide. According to an evaluation by CCData reported by Bloomberg, Binance’s share of the spot market fell from 38.5% in August to 34.3% in September. On the derivatives market, Binance’s share fell from 53.5% to 51.5% in the identical period. Ongoing struggles with regulators within the United States were identified as one reason behind Binance’s market share decline, but additionally they identified the top of the exchange’s zero-fee trading promotion for major trading pairs and Binance’s withdrawal from the Russian market, which made up 7% of its traffic.

Alameda sent $4.1B of FTT tokens to FTX before crash: Nansen report

A report shared with Cointelegraph by blockchain data analyst Nansen shows that FTX moved $4.1 billion value of its native FTT tokens to Alameda Research between Sept. 28 and Nov. 1, 2022. FTX and Alameda Research controlled around 90% of the FTT supply. Nansen suggested that the businesses were using them to prop up one another’s balance sheets. FTX also transferred $388 million in stablecoin to Alameda Research in the course of the same period. Data implied that Alameda Research wouldn’t have been capable of undergo with its offer to Binance CEO Changpeng Zhao to purchase out that exchange’s FTT holdings at $22 on Nov. 6. Alameda Research CEO Caroline Ellison made the offer on X (formerly Twitter) because the two entities scrambled to regulate the turmoil sparked by revelations of irregularities of their balance sheets. FTX filed for bankruptcy days later.

Valkyrie backtracks on Ether futures contract purchases until ETF launch

Asset management firm Valkyrie said in a filing with the U.S. Securities and Exchange Commission (SEC) on Sept. 29 that it would not purchase Ether upfront of receiving approval for its exchange-traded fund (ETF). Valkyrie had previously told Cointelegraph that it planned on allowing investors exposure to ETF futures before launching its combined Bitcoin and Ether Strategy ETF in early October. Not only that, Valkyrie said it could sell the ETH futures it had already bought. Valkyrie is amongst several financial firms which are expected to start offering ETH futures ETFs soon. The SEC has delayed decisions on several of them. Observers say it might be because of concerns a couple of U.S. government shutdown.

Winners and Losers

At the top of the week, Bitcoin (BTC) is at $27,880, Ether (ETH) at $1,640 and XRP at $0.52. The total market cap is at $1.07 trillion, according to CoinMarketCap.

Among the largest 100 cryptocurrencies, the highest three altcoin gainers of the week are Trust Wallet Token (TWT) at 18.11%, Avalanche (AVAX) at 17.5% and Render (RNDR) at 17%. 

The top three altcoin losers of the week are ApeCoin (APE) at -9.5%, THORChain (RUNE) at -9.3% and Curve DAO Token (CRV) at -8.8%.

For more info on crypto prices, be sure that to read Cointelegraph’s market evaluation.

Most Memorable Quotations

“We allowed Alameda to withdraw unlimited funds.”

Gary Wang, co-founder and former chief technology officer of FTX

“He told me to make use of Signal. He told the complete company. It also had auto-delete. […] He said it [auto-delete] was all down-side to maintain messages around. If regulators found things they didn’t like, it might be bad for the corporate.”

Adam Yedidia, former FTX worker and roommate of SBF

“Macroeconomic headwinds are limiting our ability to generate revenue, and in response to the present market conditions and business realities, we must reduce roles across the worldwide business.”

Pascal Gauthier, CEO and chairman of Ledger

“The gravitational pull in crypto in the interim stays in BTC, with a promising event horizon down the road, still favoring aggressive accumulation.”

Vetle Lundem, senior analyst at K33

“It’s relatively difficult to innovate in traditional finance. In crypto, it’s quite a bit higher and more efficient. And by way of cost, it’s quite a bit more low cost. So, you may see the pace is quite a bit faster, and we will serve a fair greater audience than traditional finance at once.”

Lennix Lai, global chief business officer at OKX

“Banks have trillions of dollars of transactions with one another at the top of the day, but there may be a cut-off time where you just cannot transact internationally. It’s a giant pain point, and it’s also expensive and inefficient.”

Akshay Chopra, vice chairman, head of innovation and design for CEMEA at Visa

Prediction of the Week 

Bitcoin bull market awaits as US faces ‘bear steepener’ — Arthur Hayes

With bond yields surging to 30-year highs, the financial markets are due for “mass liquidity injections” within the near future, based on BitMEX founder Arthur Hayes. This should provide the subsequent catalyst for the crypto bull market, he said.

“Why do I like these markets at once when yields are screaming higher? Bank models haven’t any concept of a bear steepener occurring,” Hayes argued. A “bear steepener” describes the phenomenon of long-term rates of interest rising more quickly than short-term rates of interest.

“The faster this bear steepener rises, the faster someone goes belly up, the faster everyone recognises there isn’t a way out aside from money printing to save lots of govt bond markets, the faster we get back to the crypto bull market,” Hayes said.

FUD of the Week 

Crypto suffered 153% YoY increase in hacks and scams in Q3

Blockchain security platform Immunefi released a latest report on crypto hacks and scams for the third quarter. According to the report, the variety of hacks and scams increased by over 153% from July to September 2023 in comparison with the identical period within the previous yr. In Q3 2022, there have been only 30 incidents, whereas there have been 76 incidents in Q3 2023. A complete of over $680 million of crypto was lost from scams and hacks in the course of the quarter. The largest hack of the quarter was of the Mixin protocol, which resulted in it being drained of over $200 million, while the Multichain hack for over $126 million was the second largest. The two most targeted networks were BNB Chain and Ethereum.

Bitcoin analysts still predict a BTC price crash to $20K

Bitcoin holders were elated when the coin began October at a six-week high, but technical analysts are warning that it might be headed for a fall to $20,000 soon. According to pseudonymous Bitcoin trader CryptoBullet, the present chart shows a classic “head and shoulders” pattern that generally means the worth is about to fall. The bottom of the left shoulder of this pattern is at around $20,000, implying that the worth will fall to that time before recovering. Joao Wedson, founder and CEO of crypto trading resource Dominando Cripto, went even further, claiming that Bitcoin may fall below $20,000. According to Wedson, the present price motion is forming a fractal that appears just like the 2020-2022 period. The last time this happened, the worth increased greatly at first, but then collapsed back to lower levels by the top of the fractal. In Wedson’s view, this suggests that we could also be within the early stages of a move below $20,000.

US Treasury sanctions crypto wallets as authorities crack down on fentanyl

The Office of Foreign Assets Control of the United States Department of the Treasury announced that it has sanctioned multiple wallets connected with manufacturers and dealers of the illicit drug, fentanyl. According to Deputy Treasury Secretary Wally Adeyemo, the wallets have “received thousands and thousands of USD funds over a whole bunch of deposits” as payment for various Fentanyl-related criminal activities. The wallet sanctions were initiated as a part of an indictment that targeted some Chinese-based chemical manufacturers. Valerian Labs, Hanhong Pharmaceutical, and Hebei Crovell Biotech were three of the parties named within the indictment.

The Truth Behind Cuba’s Bitcoin Revolution: An on-the-ground report

From addressing runaway inflation to providing a secure approach to lower your expenses, Bitcoin generally is a critical economic tool for Cubans.

Singer Vérité’s fan-first approach to Web3, music NFTs and community constructing

Is music the subsequent frontier of blockchain adoption? Some musicians think the technology might help them carve out a sustainable profession within the industry.

6 Questions for JW Verret — the blockchain professor who’s tracking the cash

The Harvard-educated attorney answers questions on crypto adoption and regulation.

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Cointelegraph Magazine writers and reporters contributed to this text.