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The Last Fortnight in Crypto - May (Part 1)

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LATEST STORIES

FTX Founder Sam Bankman-Fried Urges Court to Dismiss Charges

FTX founder and former CEO, Sam Bankman-Fried, has filed a motion in court to dismiss up to 10 criminal charges against him, ahead of his criminal trial in October. Bankman-Fried's legal team is seeking to dismiss four of the five additional charges that were added since his extradition agreement from the Bahamas in February. Bankman-Fried's lawyers argue that these charges violate the treaty's rule of specialty provision. The lawyers are also seeking to dismiss other charges relating to conspiracy to defraud the US and charges relating to wire fraud and conspiracy to commit wire fraud. The U.S. District Judge Lewis Kaplan will hear arguments on June 15 on this dismissal request.

Deloitte Integrates Blockchain for Digital Credentials

Accounting firm Deloitte has integrated blockchain technology to enable customers to store their verification credentials in a single digital wallet. The integration of KILT Protocol technology, a Polkadot parachain, will enable the issuance of reusable digital credentials to Deloitte's customers, streamlining its Know Your Customer (KYC) and Know Your Business (KYB) verification processes. The digital credentials will serve various use cases, including regulatory compliance for banking and decentralized finance, age verification for e-commerce, private logins, and fundraising. Deloitte retains the ability to modify the credentials using blockchain technology if circumstances change.

Former OpenSea Head of Product Convicted for Digital Asset Insider Trading

Nate Chastain, a former Head of Product at OpenSea, has been found guilty of wire fraud and money laundering for using nonpublic information to trade on non-fungible tokens (NFTs) ahead of OpenSea featuring them on its homepage. Chastain is facing up to 40 years in prison for pocketing tens of thousands of dollars in profit by buying and selling 45 NFTs in just five months. The case is being described as the first ever digital asset insider trading case, establishing a significant precedent for the prosecution of trading in digital assets based on inside information.

Concerns over US Banking Crisis Rise to 2008 Levels

The recent Gallup poll conducted in the United States revealed that 48% of respondents expressed concern about the safety of their money deposited with banks, with almost 20% indicating they were "very concerned." The level of worry was said to be on a par with that measured during the last bank-induced financial crisis in 2008. Experts at the Hoover Institution think tank suggest that if half of all uninsured savers withdrew their cash, 186 American banks would be at "potential risk of impairment." These banks have total assets of $300 billion but represent less than 5% of the estimated 4,135 FDIC insured commercial banks in the United States. Additionally, a report from the UK's Telegraph suggested that half of the banks in America could be insolvent, citing research by Stanford University banking expert Amit Seru, who estimated that more than 2,315 U.S. banks are currently sitting on assets worth less than their liabilities.

Bittrex has Filed for Bankruptcy

Crypto exchange Bittrex has filed for bankruptcy in the US state of Delaware, months after
announcing it would wind down operations in the country and weeks after being sued by the
Securities and Exchange Commission (SEC). The filing reportedly states that Bittrex has over
100,000 creditors, with liabilities and assets both estimated to be between $500m and $1bn.
Bittrex's US branch laid off 80 employees in February and announced in March that it would end all operations by the end of April. Despite Bittrex's impending exit from the US, the SEC sued the firm in mid-April on allegations it operated a national securities exchange, broker and clearing agency.

Ripple CEO: Defending SEC Lawsuit Cost $200M

Brad Garlinghouse, CEO of Ripple, revealed at the Dubai Fintech Summit that the company has spent $200 million defending the SEC lawsuit against it. Garlinghouse lamented the state of US crypto regulation and its "politics-first policy", advising entrepreneurs to avoid starting in the United States. He compared the US's regulatory progress to the United Arab Emirates and the recent Markets in Crypto-Assets bill in the European Union. Ripple was sued by the SEC in December 2020, which claimed Ripple illegally sold XRP tokens as an unregistered security. The case has been going on for two and a half years and is expected to be decided in the next three to six months.

Binance Halts Bitcoin Withdrawals Again

Binance, one of the largest cryptocurrency exchanges, has temporarily suspended Bitcoin withdrawals for the second time in 12 hours due to a large backlog of pending transactions. Binance announced on Twitter that it is "replacing the pending [Bitcoin] withdrawal transactions with a higher fee so that they get picked up by mining pools." The exchange also stated that it is working on enabling withdrawals via the Lightning Network, which may help mitigate such withdrawal halts in the future. The price of Bitcoin fell about 3.5% from its weekly high of over $29,700 on May 6, as per Cointelegraph data.

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