From SBF to Taylor Swift, BlackRock, CZ and Binance: The Best Crypto Stories of 2023

adminDecember 25, 2023

There’s always something happening in the cryptocurrency world, and this year was no exception.

From Sam Bankman-Fried and FTX to BlackRock, CZ and Binance, here are 12 top stories from 2023 to enjoy this Christmas.

USDC stablecoin loses peg as Circle exposes it to bankrupt Silicon Valley Bank.

Last March, the USDC stablecoin fell significantly from the US dollar, falling to $0.88. This comes after Circle announced it was holding $3.3 billion in reserves at the bankrupt Silicon Valley Bank.

The disclosure triggered significant USDC selling, with investors turning to other stablecoins like Tether’s USDT or exiting the cryptocurrency market to fiat altogether, causing USDC’s market cap to drop by 15% in just 24 hours. It has fallen. The situation was further complicated by major exchanges such as Coinbase and Binance suspending USDC conversion amid the chaos.

Euler Finance suffered a $197 million flash loan attack linked to Whitehat’s bug fix report.

Also in March, decentralized lending protocol Euler Finance was hit by a flash loan attack, including $136 million in staked Ether, $34 million in USDC, $19 million in wrapped Bitcoin, and $8.7 million in DAI. As a result, it suffered a loss of $197 million.

The attack exploited a vulnerability related to a bug fix that had been implemented as reported by white hackers, causing the price of Euler tokens to drop by approximately 70%. White hacker “Kankodu” received $50,000 for the discovery, but the bug fix inadvertently created a new vulnerability that led to an attack.

Despite significant losses, most of the leaked funds were later recovered by Euler Finance after the exploiters accepted the bounties offered by the project.

Exploits against cross-chain router Multichain and cryptocurrency exchange Poloniex were also among the largest of the year.

Taylor Swift did her homework on FTX and dodged a bullet, says lawyer suing Tom Brady and Shaq.

Adam Moskowitz, the lawyer who led the $5 billion class action lawsuit against high-profile promoters of the bankrupt FTX, emphasized Taylor Swift’s cautious approach when dealing with cryptocurrency exchanges during an April episode of The Scoop podcast with Frank Chaparro .

Swift reportedly questioned whether FTX was selling unregistered securities, a step most other celebrities, including Shaquille O’Neal and Tom Brady, have not taken. Moskowitz’s lawsuit targets numerous celebrities who promoted unregistered securities through FTX, and he was surprised by the lack of due diligence on the part of most influencers.

However, New York Magazine later reported that Swift signed on as an FTX sponsor and that it was disgraced former CEO Sam Bankman-Fried who decided to walk away from the deal, leaving Swift’s team feeling disappointed.

BlackRock has taken a huge leap forward toward a spot Bitcoin ETF with an SEC filing.

Last June, BlackRock filed a registration statement for its spot Bitcoin ETF with the Securities and Exchange Commission. A Delaware statutory trust known as the iShares Bitcoin Trust holds assets consisting primarily of Bitcoin held by a custodian named Coinbase Custody Trust Company.

The ETF is benchmarked against the CME CF Bitcoin Reference Rate by FCA-accredited cryptocurrency index Administrator CF Benchmarks, a subsidiary of Kraken, providing a more accessible option for investing in Bitcoin. aims to do so.

The move comes after BlackRock launched a private trust for institutional Bitcoin exposure in 2022, as the SEC continues to hesitate to approve spot Bitcoin ETFs despite continued attempts by several investment firms.

21Shares/Ark Invest, Bitwise, VanEck, WisdomTree, Invesco/Galaxy, Fidelity, Valkyrie, Global X, Hashdex, and Franklin Templeton are also seeking approval for spot Bitcoin ETFs.

Last October, the U.S. Court of Appeals for the D.C. Circuit issued a formal order to assert its August ruling that the SEC must reconsider Grayscale Investments’ bid to convert its flagship GBTC fund into a physical Bitcoin ETF.

SEC sues Binance and Coinbase

The SEC filed a lawsuit against Binance and its former CEO Changpeng Zhao in June, alleging violations of securities laws.

The SEC also sued Coinbase a day after the Binance lawsuit, accusing the cryptocurrency exchange of similar violations of operating without proper registration and consolidating brokers, exchanges and clearing houses, three functions that are typically separate in traditional securities markets. .

The lawsuit also names several cryptocurrencies as securities, including SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO.

The SEC previously issued Coinbase with a Wells Notice in March, a formal notice notifying an individual or company that the SEC plans to take enforcement action.

The agency also filed a new lawsuit against Kraken last November, accusing it of operating an online trading platform without registration.

Ripple wins sectional victory over SEC

Last July, a federal district court judge denied summary judgment on XRP’s unregistered security status, sending the ongoing lawsuit between the SEC and Ripple to trial.

Judge Analisa Torres ruled that XRP is not a security in the secondary market, but will become one when sold as part of an investment contract to institutional investors. Torres said she considered Ripple’s “programmatic” sales, in which the company used to automatically sell XRP on exchanges, as not constituting securities products because the buyers “had not invested in Ripple.”

Judge Torres denied the SEC’s request for an interlocutory appeal of the case in October, noting that it would “not substantially advance the final conclusion of the litigation.”

3AC co-founder Su Zhu arrested in Singapore

Su Zhu, co-founder of defunct cryptocurrency hedge fund Three Arrows Capital, was arrested at Singapore Changi Airport in September for failing to comply with a liquidation investigation. Three Arrows Capital filed for bankruptcy amid the cryptocurrency market turmoil in 2022 and owes creditors more than $3.5 billion.

The fund’s liquidator, Teneo, said in a statement on September 29 that it had received a committal order against Zhu after he failed to cooperate with the company’s liquidation investigation despite a previous Singapore court order. The order sentenced Zhu to four months in prison.

On November 28, he was sentenced to serve the remainder of his sentence under house arrest. He was released on December 20 after serving two-thirds of his sentence. The whereabouts of Zhu’s co-founder, Kyle Davies, are still unknown.

A photo obtained by The Block shows the moment Zhu was arrested.

Su Zhu was arrested at Changi Airport. Image: Block Pro.

SBF was found guilty on all counts by the jury. He fooled investors

Sam Bankman-Fried, FTX’s former CEO, was found guilty on Nov. 2 of all seven criminal counts, including wire fraud and conspiracy, related to defrauding FTX’s customers, lenders and investors.

The ruling came after a trial that scrutinized the management of the cryptocurrency exchange and its sister trading firm, Alameda Research. Bankman-Fried’s testimony failed to sway the jury, despite his claims of oversight and business errors.

He now faces up to 115 years in prison and is scheduled to be sentenced by Judge Lewis Kaplan on March 28. Bankman-Fried also faces five additional charges, including bank fraud and operating an unlicensed money transfer business, at a trial scheduled for March.

DOJ settles criminal case against Binance for $4.3 billion

The U.S. Justice Department reached a settlement with cryptocurrency exchange Binance in November, concluding a criminal investigation into alleged money laundering and sanctions violations, one of the largest corporate settlements in U.S. history. The settlement included a $4.3 billion fine and criminal charges against CEO Changpeng Zhao.

The DOJ has been investigating Binance and its executives since at least December 2022 over concerns about money laundering and sanctions violations, and additional financial regulators have stepped up their investigations into the company throughout 2023.

Changpeng ‘CZ’ Zhao pleads guilty and resigns as Binance CEO

Binance co-founder Changpeng Zhao, commonly known as “CZ,” has agreed to step down as CEO as part of a plea deal with the Justice Department. Richard Teng, a Binance veteran with extensive experience in the regulatory sector, has been named as his successor.

Zhao pleaded guilty to violating the Bank Secrecy Act and will pay a $50 million fine. Zhao also posted a $175 million personal recognizance bond and could face up to 18 months in prison.

Zhao’s sentencing is scheduled for February 2024, and he must remain in the United States ahead of his hearing, at least until further review. If Mr. Zhao fails to appear in court in February 2024, as stipulated in his appearance bond, he faces up to 10 years in prison and a $250,000 fine.

Zhao also resigned as Chairman of the Board of Directors of Binance.US.

Approval of Mr. Do Kwon’s extradition to Korea and the United States

Montenegro’s High Court approved the extradition of Terraform Labs co-founder Kwon Do-do to South Korea or the United States last November, and the final decision on destination will be made by Montenegro’s Minister of Justice.

Kwon, who is currently serving a four-month sentence in Montenegro for document forgery, is facing financial crime charges in both countries following the collapse of the Terra ecosystem in 2022. This includes native cryptocurrency Luna and algorithmic stablecoin Terra USD, which suffered losses of approximately $40 billion. In a matter of days, the investor’s assets were reduced.

Montenegro’s Court of Appeal later accepted an appeal from the Terraform Labs co-founder’s lawyers and annulled the High Court’s November 17 decision, revoking Do Kwon’s extradition approval. The case has now been remanded to the trial court for a retrial.

the numbers go up

After the trials and tribulations of a tumultuous 2022 for the cryptocurrency market, 2023 is ending in a much better place. Bitcoin is up more than 160% since it started the year at around $16,600, according to price data from The Block. Ethereum lagged behind the leading cryptocurrency by market capitalization, but is still up more than 90% after starting the year at $1,200. The supply of Bitcoin and Ethereum moved last year also fell to an all-time low.

Solana has had the biggest gain among the top 10 cryptocurrencies by market capitalization, up more than 1,000% from $9.80 in January. With anticipation of a spot Bitcoin ETF, a Bitcoin halving event, and a potential new cryptocurrency bull cycle, 2024 could offer plenty of opportunities for cryptocurrency experts and institutional investors alike.

Disclaimer: This article was written with the help of OpenAI’s ChatGPT 3.5/4 and has been reviewed and edited by our editorial team.

Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.

adminDecember 25, 2023