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

Top Stories This Week

Opening arguments start 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 choice started the day past. Assistant United States Attorney Thane Rehn told jurors that SBF used FTX customer funds to complement himself and acquire credibility amongst politicians by means of donations. “The defendant blamed a downturn in the crypto market. But he had committed fraud. That is what the evidence in this trial will show. You will hear from his inner circle. His girlfriend will tell you how they stole money together,” Rehn mentioned. SBF’s lawyer Mark Cohen mentioned the “girlfriend,” former Alameda Research CEO Caroline Ellison, and Changpeng Zhao, CEO of rival cryptocurrency trade Binance, share among 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 be tried on charges of fraud and market manipulation in September 2024, a decide selected Oct. 3. Mashinsky will stay free on $40 million bail, topic to journey and monetary restriction, within the meantime. Celsius filed for chapter in July 2022 and Mashinsky was arrested in July of this 12 months. He is accused of defrauding buyers out of billions of {dollars}. The United States Commodity Futures Trading Commission, Securities and Exchange Commission and Federal Trade Commission all have lively fits towards Mashinsky as effectively. Former Celsius chief income officer Roni Cohen-Pavon pleaded responsible to 4 felony expenses in September.

Binance spot market share drops for seventh consecutive month

Cryptocurrency trade Binance is continuous to lose market share for the seventh month in a row. Analysts say HTX (previously Huobi), Bybit and DigiFinex have been 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 interval. Ongoing struggles with regulators within the United States have been recognized as one reason for Binance’s market share decline, however additionally they identified the top of the trade’s zero-fee buying and selling promotion for main buying and selling pairs and Binance’s withdrawal from the Russian market, which made up 7% of its site visitors.

Alameda despatched $4.1B of FTT tokens to FTX earlier than crash: Nansen report

A report shared with Cointelegraph by blockchain knowledge analyst Nansen reveals that FTX moved $4.1 billion worth of its native FTT tokens to Alameda Research between Sept. 28 and Nov. 1, 2022. FTX and Alameda Research managed round 90% of the FTT provide. Nansen steered that the businesses have been utilizing them to prop up one another’s steadiness sheets. FTX additionally transferred $388 million in stablecoin to Alameda Research throughout the identical interval. Data implied that Alameda Research wouldn’t have been capable of undergo with its provide to Binance CEO Changpeng Zhao to purchase out that trade’s FTT holdings at $22 on Nov. 6. Alameda Research CEO Caroline Ellison made the provide on X (previously Twitter) as the 2 entities scrambled to manage the turmoil sparked by revelations of irregularities of their steadiness sheets. FTX filed for chapter days later.

Valkyrie backtracks on Ether futures contract purchases till ETF launch

Asset administration agency Valkyrie mentioned in a submitting with the U.S. Securities and Exchange Commission (SEC) on Sept. 29 that it will not purchase Ether upfront of receiving approval for its exchange-traded fund (ETF). Valkyrie had beforehand instructed Cointelegraph that it deliberate on permitting buyers publicity to ETF futures earlier than launching its mixed Bitcoin and Ether Strategy ETF in early October. Not solely that, Valkyrie mentioned it will promote the ETH futures it had already purchased. Valkyrie is amongst a number of monetary companies which might be anticipated to start providing ETH futures ETFs quickly. The SEC has delayed choices on a number of of them. Observers say it might be as a result of issues a couple of U.S. authorities 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 whole market cap is at $1.07 trillion, according to CoinMarketCap.

Among the most important 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 high 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 extra information on crypto costs, be sure to learn Cointelegraph’s market analysis.

Most Memorable Quotations

“We allowed Alameda to withdraw unlimited funds.”

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

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

Adam Yedidia, former FTX worker and roommate of SBF

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

Pascal Gauthier, CEO and chairman of Ledger

“The gravitational pull in crypto for the time being stays in BTC, with a promising event horizon down the line, still favoring aggressive accumulation.”

Vetle Lundem, senior analyst at K33

“It’s relatively difficult to innovate in traditional finance. In crypto, it’s a lot better and more efficient. And in terms of cost, it is a lot more cheap. So, you can see the pace is a lot faster, and we can serve an even bigger audience than traditional finance right now.”

Lennix Lai, international chief business officer at OKX

“Banks have trillions of dollars of transactions with each other at the end of the day, but there is a cut-off time where you simply cannot transact internationally. It’s a big pain point, and it’s also expensive and inefficient.”

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

With bond yields surging to 30-year highs, the financial markets are due for “mass liquidity injections” in the near future, according to BitMEX founder Arthur Hayes. This ought to present the subsequent catalyst for the crypto bull market, he mentioned.

“Why do I love these markets right now when yields are screaming higher? Bank models have no concept of a bear steepener occurring,” Hayes argued. A “bear steepener” describes the phenomenon of long-term rates of interest rising extra rapidly than short-term rates of interest.

“The faster this bear steepener rises, the faster someone goes belly up, the faster everyone recognises there is no way out other than money printing to save govt bond markets, the faster we get back to the crypto bull market,” Hayes mentioned.

FUD of the Week 

Blockchain security platform Immunefi released a new report on crypto hacks and scams for the third quarter. According to the report, the variety of hacks and scams elevated by over 153% from July to September 2023 in comparison with the identical interval within the earlier 12 months. In Q3 2022, there have been solely 30 incidents, whereas there have been 76 incidents in Q3 2023. A complete of over $680 million of crypto was misplaced 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, whereas the Multichain hack for over $126 million was the second largest. The two most focused networks have been BNB Chain and Ethereum.

Bitcoin analysts nonetheless predict a BTC worth crash to $20K

Bitcoin holders have been elated when the coin started October at a six-week excessive, however technical analysts are warning that it might be headed for a fall to $20,000 soon. According to pseudonymous Bitcoin dealer CryptoBullet, the present chart reveals a basic “head and shoulders” sample that usually means the value is about to fall. The backside of the left shoulder of this sample is at round $20,000, implying that the value will fall to that time earlier than recovering. Joao Wedson, founder and CEO of crypto buying and selling useful resource Dominando Cripto, went even additional, claiming that Bitcoin might fall beneath $20,000. According to Wedson, the present worth motion is forming a fractal that appears much like the 2020-2022 interval. The final time this occurred, the value elevated vastly at first, however then collapsed again to decrease ranges by the top of the fractal. In Wedson’s view, this means that we could also be within the early phases of a transfer beneath $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 introduced that it has sanctioned multiple wallets linked with producers and sellers of the illicit drug, fentanyl. According to Deputy Treasury Secretary Wally Adeyemo, the wallets have “received millions of USD funds over hundreds of deposits” as cost for numerous Fentanyl-related felony actions. The pockets sanctions have been initiated as a part of an indictment that focused some Chinese-based chemical producers. Valerian Labs, Hanhong Pharmaceutical, and Hebei Crovell Biotech have been three of the events named within the indictment.

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Singer Vérité’s fan-first method to Web3, music NFTs and group constructing

Is music the next frontier of blockchain adoption? Some musicians assume the know-how can assist them carve out a sustainable profession within the business.

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

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

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Cointelegraph Magazine writers and reporters contributed to this text.