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Articles by Rue Abernai
Crypto Twitter Makes Fun of DOJ's 'Major Action' Against Obscure Russian Exchange Bitzlato
The U.S. Department of Justice seized Russian crypto exchange Bitzlato for its money laundering crimes and ties to a darknet marketplace called Hydra Market. The DOJ released a statement before announcing the charges, calling it “a major international cryptocurrency action.” Users on Twitter were quick to make fun of the DOJ’s decision to go after a small player and brag about it. Many of them said it was the first time they had heard of Bitzlato.
ConsenSys Lays Off 11% of Workforce Amid ‘Uncertain Market Conditions’
ConsenSys has laid off 96 employees.
Crypto Lender Genesis Is Preparing for Bankruptcy Filing
Genesis Global Capital might file for Chapter 11 bankruptcy protection as soon as this week if it fails to raise enough cash to cover its debts. The Digital Currency Group (DCG) lending subsidiary owes more than $3 billion to its creditors. Barry Silbert’s DCG is reportedly thinking of selling part of its $500 million venture capital portfolio to help cover Genesis’ debts. Crypto lender Genesis Global Capital is said to be preparing to file for Chapter 11 bankruptcy protection as soon as this week.
EU Delays Final Vote on MiCA Crypto Bill Again Due to Translation Issues
EU regulations require legal documents to be translated into all 24 official EU languages. MiCA has yet to be ready to be published. European Parliament officials are now expected to vote on the bill in April 2023. This is the second time in the last two months that the final vote on MiCA has been postponed. In November, it was delayed to February 2023 due to the same translation issues. The European Union (EU) will postpone the final vote on the landmark Markets in Crypto Assets (MiCA) crypto bill.
Ethereum (ETH) Blockchain Developer Numbers Record 5x Increase
Electric Capital reported that Ethereum monthly active developers increased from 1,084 in 2018 to 5,819 in 2022, a 5x increase. Ethereum scaling solutions like Polygon, Arbitrum, Starknet, and Optimism also grew exponentially in developer activity. Bitcoin saw a 3x increase in monthly active developers, from 372 in 2018 to 946 in 2022. There are 23,343 monthly blockchain developers as of December 2022. The number of full-time developers grew by 8% YoY. They make 76% of all code commits.
Crypto Bank Silvergate Posts $1 Billion Loss, Says Industry Is in 'Crisis of Confidence'
The average customer deposit in the fourth quarter of 2022 was $7.3 billion, which is much lower than the $12 billion Silvergate saw in the third quarter of the same year. Silvergate said that sustained lower prices of digital assets and events like the FTX bankruptcy made investors move to a “risk off” position. Silvergate CEO Allan Lane remained optimistic about the crypto industry and said that the company maintains a “highly liquid balance sheet”.
Davos: Scaramucci Calls FTX's SBF Bernie Madoff of Crypto
SkyBridge Capital managing partner Anthony Scaramucci said in Davos that he once believed Sam Bankman-Fried was the Mark Zuckerberg of crypto but was wrong. Scaramucci said he felt “betrayed” by SBF, with whom he had a close relationship. Scaramucci also alluded to Dante Alighieri’s Inferno and said that the “ninth circle of hell” is reserved for SBF.
Polygon (MATIC) Sets Date for Highly-Anticipated zkEVM Launch
Polygon co-founder Sandeep Nailwal said on Twitter on Monday that the team developing its zkEVM scaling solution has set a launch date. Nailwal didn’t specify the launch date but said it would happen “soon.” Polygon’s zkEVM has been in testnet since October of last year. Polygon (MATIC) is about to launch its highly-anticipated zkEVM Ethereum scaling solution on the Ethereum mainnet.
Binance to Allow Institutional Investors to Keep Collateral Off Exchange
Institutional investors can post collateral used for leveraged trading with Binance Custody. Binance Custody will hold customer assets off the internet in cold storage wallets. Users will be able to reaccess their assets once trades settle. Holding customer assets offline also helps keep them safe from potential on-chain hacking incidents.
Former FTX US President Blasts 'Insecure' SBF, Reveals Threats to His Reputation
Harrison said that FTX US management decision came from the Bahamas, where SBF lived and managed FTX International. Faced with criticisms, SBF would respond with “total insecurity and intransigence” as well as with “dysregulated hostility,” “gaslighting,” and manipulation.” Harrison wrote a formal complaint depicting the management issues the company was facing. He was told he would be fired and his professional reputation “destroyed” if he didn’t take back what he wrote and apologize to SBF.
Gemini's Winklevoss Responds to SEC's Charges, Calls Them 'Manufactured Parking Ticket'
Gemini co-founder Tyler Winklevoss called the Securities and Exchange Commission’s (SEC) decision to charge the crypto exchange for selling unregistered securities “totally counterproductive” and “super lame.” Winklevoss claimed that Gemini has been in talks with the SEC about its Earn program for 17 months. The Winklevoss twin said he didn’t understand the urgency to press charges since the Earn program was de facto shut down two months ago.
SEC Charges Genesis and Gemini, Alleges Genesis Loaned Customer Assets to DCG
The U.S. Securities and Exchange Commission (SEC) has charged crypto exchange Gemini and crypto lender Genesis for unlawfully selling unregistered securities. The SEC alleged that Genesis and Gemini offered unregistered securities to hundreds of thousands of investors, including Americans, through Gemini’s Earn program and made billions in profit. Gemini made massive profits by deducting a service fee, sometimes as high as 4.29%, from the returns paid to its investors.
DCG's Genesis Reportedly Owes Over $3 Billion to Its Creditors
Genesis’ parent company Digital Currency Group (DCG) is considering liquidating its $500 million venture capital portfolio to assist Genesis in covering the debt. DCG’s crypto-related portfolio includes over 200 companies, including exchanges, lenders, custodians, banks, and other projects. Genesis has yet to return over $900 million to Gemini Earn users. Genesis seems to be in bigger trouble than previously thought.
Nexo's Office in Bulgaria Raided on Suspected Money Laundering and Tax Crimes
A spokeswoman for Bulgaria’s chief prosecutors Siyka Mileva said that over 300 police officers, prosecutors, and national security agents are actively investigating Nexo. Mileva characterized Nexo’s operations as “illegal criminal activity”. Nexo co-founder and managing partner Antoni Trenchev denied any wrongdoings and called the allegations “absurd”.
Layer-2s Arbitrum and Optimism (OP) Flip Ethereum (ETH) in Combined Transactions
Ethereum Layer-2 scaling projects Arbitrum and Optimism flipped Ethereum mainnet regarding processed transactions on January 10. The two protocols processed 1.12 million transactions while Ethereum mainnet settled 1.02 million transactions. Optimism also overtook Arbitrum in terms of transaction volumes and daily active addresses. Arbitrum and Optimism have a combined market share of over 80%.
Gemini Terminates Genesis Loans, Ends Crypto Yield Program
Gemini has terminated the Master Loan Agreement (MLA) between Earn users and Genesis. The termination meant that the crypto yield program had ended. The loan agreement termination is effective January 8. Gemini said it would “operate with the utmost urgency” to return Earn users over $900 million stuck with Genesis. Crypto exchange Gemini has informed its Earn users that it has terminated Genesis’ loans and, in effect, ended the yield program.
Coinbase (COIN) Cuts Another 20% of Workforce amid Persistent Crypto Winter
Coinbase fired about 950 people – or around 20% of its workforce – on Tuesday. CEO Brian Armstrong said that the fresh round of job cuts is part of the company’s decision to reduce its operating costs by around 25%. Armstrong said that Coinbase is in a good position to weather the crypto storm despite the layoffs. Armstrong said he believes the FTX fiasco and other recent events have benefited his exchange. This is the third round of layoffs Coinbase has done in the last seven months.
Gemini's Winklevoss Accuses DCG CEO Silbert of Fraud, Demands His 'Immediate' Removal
Gemini co-founder Cameron Winklevoss has published another open letter on Twitter, this time addressing the DCG board. He asked the board to “immediately” remove DCG founder and CEO Barry Silbert from the company because he committed accounting fraud. Winklevoss said that Silbert and DCG falsely claimed that DCG had absorbed Genesis’ losses linked to the implosion of Three Arrows Capital (3AC).
Another One? Wyre Imposes Up to 90% Withdrawal Limit as Shutdown Rumors Intensify
Crypto payment platform Wyre has imposed an up to 90% withdrawal limit on its users. The company said this move is “in the best interest of our community.” The firm is “exploring strategic options” to better “navigate the current market environment.” Wyre CEO Yanni Giannaros has changed positions and is now Executive Chairman. Leaked Giannaros’ internal letter to employees suggests that the company plans to shut down its operations in the coming weeks.
Barry Silbert's DCG Faces SEC and DOJ Investigation Over Internal Transfers
Bloomberg reported that Barry Silbert’s DCG is facing an investigation from the SEC and the DOJ over internal transfers related to its subsidiary lender Genesis. The prosecutors have sent DCG requests for documents and interviews. A DCG spokesperson told Bloomberg that the company doesn’t know anything about active investigations into its businesses.
France's Villeroy Wants to Implement 'Obligatory' Crypto Licensing 'as Soon as Possible'
Francois Villeroy de Galhau, the Governor of the Bank of France, said in a speech on Thursday that crypto companies in France should be obliged to obtain a DASP license “as soon as possible.” The DASP license is currently optional in France. Crypto businesses offering trading and custody are only required to register with Financial Markets Authority (AMF). None of the 60 firms registered with the AMF hold a DASP license.
Three Arrows Capital Founders Ordered by Liquidators on Twitter to Provide Documents
Su Zhu and Kyle Davies, the founders of the infamous crypto hedge fund Three Arrows Capital (3AC), have been issued subpoenas through Twitter to provide documents related to its demise. Both of them were subpoenaed by the Supreme Court of Singapore. Davies also received a subpoena from U.S. authorities. The location of both founders is still unknown.
SEC Charges 8 over $45M Fraud Scheme as U.S. Regulators' Crypto Crusade Continues
The U.S. Securities and Exchange Commission (SEC) has charged five people and three entities related to the fraudulent crypto project CoinDeal with fraud. The defendants lured investors to put their money into the company by promising returns of over 500,000 times their initial investments.
Crypto Phishing Scams Likely Coming as Hacker Leaks Emails of 235M Twitter Users
The hacker who stole the personal data of 235 million Twitter users has made it publicly available. The database contains 63 GB of users’ email addresses, account names, handles, creation dates, and follower counts. The data seems to have been collected between early 2021 and December 14, 2022. Vitalik Buterin, Kevin O’Leary, and other well-known crypto people are included in the database.
Genesis Unlikely to Meet Gemini’s Deadline as CEO Says It Needs 'Additional Time' to Sort Liquidity Issues
Genesis interim CEO Derar Islim told investors in a letter on Wednesday that the company believes it can “arrive at a solution” related to the halted operations. He said the company needs “additional time” to solve its liquidity issues, and it is “a very complex process.” This makes it unlikely that Genesis can meet Gemini’s January 8 deadline to return more than $900 million owed to Gemini Earn program users.
U.S. Regulators Warn Banks Against Using Crypto, Claim It's Not 'Safe and Sound'
The Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) issued a joint statement on Tuesday warning banks that deal with crypto to be extra cautious. The regulators described multiple risks associated with participating in the crypto economy. The regulators said that issuing or holding crypto assets is “highly likely to be inconsistent with safe and sound banking practices”.
Coinbase CLO 'Grateful' for $100M Settlement with NY over Compliance Failures
Coinbase Chief Legal Officer (CLO) Paul Grewal said on Twitter that he and the exchange are “grateful” for settling with New York regulators over compliance failures. Coinbase will pay a $50 million fine. The exchange also agreed to invest $50 million into its compliance program. Coinbase started having compliance issues back in 2018. They grew exponentially in 2021 when Coinbase experienced massive growth amid a roaring bull market.
Cardano (ADA) Overtakes Ethereum (ETH) as Protocol with Most Development Activity in 2022
Cardano (ADA) ranked first in Santiment’s development activity in 2022 report. Cardano was followed by Polkadot (DOT) and Cosmos (ATOM). Ethereum (ETH) was ranked fourth despite successfully upgrading its consensus mechanism to proof-of-stake in September. Solana (SOL) was not included in the report despite still having an active developer community. Ethereum layer 2 networks Optimism (OP) and Polygon (MATIC) also made the top 10 list.
Who Are Cameron Winklevoss and Barry Silbert? Gemini and DCG Conflict Explained
Cameron Winklevoss and Barry Silbert went head to head on Monday after Gemini co-founder published an open letter to Silbert on Twitter. Winklevoss is the co-founder of the crypto exchange Gemini and is known for suing Facebook with his brother in the early days of the social network. Barry Silbert is a crypto billionaire and one of the most influential people in the industry. He’s the founder and CEO of Digital Currency Group (DCG), a conglomerate of five crypto-focused companies.
Gemini's C. Winklevoss Issues Ultimatum to DCG Boss B. Silbert, Says DCG and Genesis Are 'Beyond Commingled'
Crypto exchange Gemini co-founder Cameron Winklevoss has published a public letter on Twitter heavily criticizing Digital Currency Group (DCG) founder and CEO Barry Silbert for “stalling” the process of repaying Gemini Earn users over $900 million. Winklevoss said that Gemini has tried time and time again over the last six weeks to contact Silbert and solve the liquidity issues. However, he said that it’s becoming clear that Silbert has been “engaging in bad faith stall tactics”.
SushiSwap (SUSHI) CEO Introduces New SUSHI Tokenomics: What Does It Mean for Investors?
SushiSwaip (SUSHI) CEO Jared Grey has introduced a redesigned tokenomics model for SUSHI. It will allow xSushi stakers to earn emissions-based rewards in time-locked tiers. Liquidity providers will be able to receive a portion of the 0.05% swap fee and earn extra emissions-based rewards. The redesigned tokenomics will also burn a fluctuating percentage of the 0.05% swap fee plus the staking and LP rewards that are pulled out from the programs prematurely.
The Great Solana (SOL) Migration: Why Are Projects Moving to Other Chains?
In the recent few weeks, multiple Solana-based projects announced their intention to go cross-chain or leave Solana altogether. For example, Solana’s largest NFT marketplace Magic Eden said it’s going to go cross-chain and integrate with Polygon, an Ethereum Layer-2 blockchain. But perhaps the most painful departure was that of the two most prominent NFT projects – DeGods and y00ts. Both of them have gone to Ethereum, with y00ts, like Magic Eden, integrating with Polygon.
Mango Markets Exploiter Arrested in Puerto Rico, Charged with Market Manipulation and Fraud
Avraham Eisenberg, the crypto trader behind the $110 million decentralized finance (DeFi) platform Mango Markets exploit, has been arrested in Puerto Rico and charged with market manipulation offenses. According to a complaint filed with the Southern District of New York and made public on December 27, the Federal Bureau of Investigation (FBI) charged Eisenberg with two criminal counts: commodities fraud and commodities manipulation.
Fidelity Plans to Launch NFT Marketplace and Offer Crypto Services in Metaverse
Fidelity Investments submitted three trademark applications to the United States Patent Trademark Office (USPTO). The applications show Fidelity’s intent to start offering crypto services like mutual funds, real estate, and retirement investment services “in the metaverse and other virtual worlds.” The investment giant said it might launch an NFT marketplace “featuring textual and graphic content” in the future. Fidelity also seems to be interested in providing crypto wallet and trading services.
Caroline Ellison Apologizes for Defrauding Customers, Says She 'Knew It Was Wrong'
Former Alameda Research CEO Caroline Ellison apologized for her involvement in the FTX debacle. This is according to a transcript of her plea reviewed by The New York Times. Ellison said she “knew it was wrong” to funnel customer funds from FTX to Alameda. Ellison further admitted she agreed with others, including disgraced former FTX CEO Sam Bankman-Fried, to “borrow several billion dollars from FTX” to repay Alameda’s loans.
Crypto in 2023: 10 Things to Be Excited About in the Next 12 months
The final day of our ‘12 days of Cryptomas‘ feature series is upon us. There have been times this year when 12 days felt like 12 months, so it’s only appropriate that we take a look at the year ahead. Next year could potentially be make or break for crypto, but within that, there is a lot to be excited about. This year has been full of uncertainty and disappointment for crypto enthusiasts–prices crashed, companies went bankrupt, and the momentum generated in 2021 was significantly blunted.
Marshall Islands Legally Recognize DAOs as Domestic Limited Liability Companies
Marshall Islands have legally recognized decentralized autonomous organizations (DAOs) as domestic limited liability companies (LLCs). The Decentralized Autonomous Organizations Act is applicable to both for-profit and nonprofit DAOs. Those DAOs wanting to have an LLC structure will have to add “DAO LLC” to their names. The legislation recognizes DAO governance principles and voting processes and frameworks.
SEC General Counsel Dan Berkovitz to Depart Agency After Reportedly Dining with SBF
SEC General Counsel Dan Berkovitz will depart the agency on January 31. He’ll be replaced by Megan Barbero, the SEC Principal Deputy General Counsel. Berkovitz joined the SEC in November of last year. Previously he worked as a Commissioner at the Commodity Futures Trading Commission (CFTC). Berkovitz is reported to have dined with Sam Bankman-Fried and other FTX executives last year when he was still a Commissioner at the CFTC.
SBF's $250M Bail Bond: How Does It Work and Who Paid It?
A bail bond is an agreement between the defendant and the court to appear for trial or pay an agreed sum of money as punishment for not doing so. A bail bond is also known as an appearance bond. A bond bail requires collateral. In SBF’s case, his parents had to put up a 10% collateral for the $250 million bond. They chose their Palo Alto house as the collateral. If SBF violates any of the court’s requirements, his parents will lose their home.
Retiring U.S. Senator Pat Toomey Introduces New Comprehensive Stablecoin Bill
Republican Senator Pat Toomey has released a bill that provides a regulatory framework for payment stablecoins. The Stablecoin Transparency of Reserves and Uniform Safe Transactions (TRUST) Act says that stablecoins aren’t securities or commodities and should be regulated by the Office of the Comptroller of the Currency (OCC).
Polygon (MATIC) Introduces Last zkEVM Tesnet Before Launching Mainnet
Polygon has launched the second tesnet for its zkEVM. The testnet will be the last one before the mainnet launch. The second testnet will have almost all the features the mainnet version is expected to have. The features include recursion, something that will allow Polygon to use one zero-knowledge proof to validate other batches of zero-knowledge proofs. Polygon gave no timeline on when the mainnet version will launch.
Uniswap (UNI) DAO Votes in Favor of New Governance Process
Uniswap DAO almost unanimously voted in favor of a proposal to make the governance process more frictionless. The first off-chain Snapshot vote will be replaced with a “Request for Comment” post. The quorum for the remaining off-chain Snapshot poll in the second phase will be increased to ten million UNI tokens. It’s unclear when the new changes in Uniswap’s governance process will be implemented.
Uniswap (UNI) to Allow Users to Buy Crypto with Debit, Credit Cards and Bank Accounts
Uniswap has partnered with MoonPay to offer direct fiat on-ramp services for its users. Users will be able to buy digital assets with their debit and credit cards, as well as with their bank accounts. At launch, Uniswap will support DAI, ETH, MATIC, USDC, USDT, WBTC, and WETH tokens. However, token availability depends on different regions and the regulatory frameworks in place. Uniswap said it has negotiated for its users “low spread and processing fees on all supported currencies”.
Bitcoin Miner Core Scientific Files for Bankruptcy, Continues Mining while Repaying Debt Holders
Core Scientific, one of the world’s largest publicly traded Bitcoin mining companies, has filed for Chapter 11 bankruptcy protection. The company has from $1 to $10 billion in assets and liabilities and 1,000 to 5,000 creditors. The firm still has a positive cash flow, but it’s smaller than its debt for leasing mining hardware. Core Scientific will continue its mining operations while planning a restructuring deal. CORZ plummeted by more than 30% on the news.
Binance Finalizes Acquisition of Indonesian Exchange Tokocrypto (TKO), Fires 58% of Employees
Binance has finalized the acquisition of Tokocrypto, a regulated crypto exchange in Indonesia. Binance first invested in Tokocrypto in 2020. Changpeng Zhao said on Twitter that Binance “just injected more cash” and “increased our shareholding a bit.” Tokocrypto CEO Pang Xue Kai has left the company. Before leaving, he fired 58% of the firm’s employees, a second job cut round this year for Tokocrypto. Tokocrypto’s native token TKO pumped by 37% on the news but has since erased almost all gains.
Grayscale Might Consider Tender Offer If It Fails to Convert GBTC Fund into ETF
Grayscale CEO Michael Sonnenshein said on Monday that the company might consider a tender offer if it’s unable to convert its GBTC fund into an ETF. Such a tender offer would be for no more than 20% of the outstanding shares of GBTC. Sonnenshein said the company still believes that it will win its lawsuit against the SEC and get approval for the conversion. Grayscale would need to get approval from the SEC and its shareholders to do a tender offer.
Binance.US to Buy Bankrupt Crypto Lender Voyager's Assets for $1.02 Billion
Binance.US, an independent Binance unit operating in the US, is said to have reached an agreement with Voyager Digital to buy its assets. The deal is valued at $1.02 billion. It’s comprised of Voyager’s crypto portfolio worth $1.02 billion and “an additional consideration” worth $20 million.
RAY Fails to Recover After Hacker Drains Decentralized Exchange for $2.2 Million
Solana-based decentralized exchange Raydium’s native token RAY is trading at $0.154, just 3% higher than it did on Friday. Before the hack that saw $2.2 million drained from Raydium, RAY traded as high as $0.214. RAY is down 99% from its all-time high of $16.83. An unidentified hacker attacked Raydium on Friday using one of the protocol owner’s private keys.
Bitcoin Legend Hal Finney's Twitter Account Just Got Reactivated
Hal Finney’s Twitter account was reactivated after more than 12 years of being dormant. Finney’s wife, Fran Finney, said she activated the account so it wouldn’t be “purged by Elon,” referring to Elon Musk’s tweet that over 1.5 billion inactive accounts will be deleted to free up handles. Finney is known to be the first Bitcoin recipient. He received ten Bitcoins from Satoshi Nakamoto on January 12, 2009.
FTX Wants to Sell Solvent Subsidiaries, Says It Already Received 'Dozens' of Inquiries
FTX is asking for permission to sell its four solvent subsidiaries: LedgerX, also known as FTX Derivatives, FTX Japan, FTX Europe, and Embed Business. FTX said these units operated on “a generally independent basis” and had separated customer accounts, management teams, and IT systems. FTX wants to sell the businesses quickly. The bankrupt exchange has received “dozens” of unsolicited inquiries about the acquisition of the said units.
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