Monday, 19 September 2022

Market Summary

Market Summary 19 September 2022

Bitcoin Price: US$19,416.18 (-3.47%)
Ethereum Price: US$ 1,334.51 (-9.14%) 


SEC, Ripple Call for Immediate Ruling in Suit Over Whether XRP Sales Violated Securities Laws

  • The U.S. Securities and Exchange Commission (SEC) and Ripple Labs each want a federal judge to rule either that the crypto company affiliated with the XRP cryptocurrency violated federal securities laws or otherwise dismiss the lawsuit without requiring a lengthy trial.
  • The SEC and Ripple both filed motions for summary judgment in the Southern District of New York, asking District Judge Analisa Torres to make a ruling based on the arguments filed in accompanying documents. The documents were posted to a federal court database Friday.
  • The SEC sued Ripple Labs, CEO Brad Garlinghouse and Chairman Chris Larsen in December 2020 (a day before former SEC Chair Jay Clayton stepped down from the role) on allegations that it had raised over $1.3 billion by selling XRP in unregistered securities transactions. Ripple maintained that XRP sales and trading did not meet the tenets of the Howey Test, a Supreme Court case that has acted as a way to determine whether something is a security for the last several decades.
  • The parties have filed various discovery motions over the past two years, without really litigating the actual underlying issue – whether Ripple violated securities law by selling XRP. The motions for summary judgment mean the parties are asking the court to actually decide whether either the SEC or Ripple has provided enough to prove one way or another whether there was a violation.


Craig Wright Could Have ‘Bamboozled’ Andresen During Private ‘Satoshi’ Signing Session: Trial Witnesses Explain

  • OSLO, Norway — Expert witnesses in the ongoing trial between crypto Twitter personality Hodlonaut and Craig Wright – the Australian computer scientist who has long claimed (and failed to prove) he is the inventor of Bitcoin – told the court on Thursday that Wright could have used any number of tricks to fool Bitcoin developer Gavin Andresen into believing he was Satoshi during a private “signing session” in 2016.
  • Andresen has since all but denounced Wright, saying he had “bamboozled” him with “funky proof” on that day in 2016. Andresen’s faith in Wright’s identity as Satoshi has been a cornerstone of Wright’s defense in his trial against Hodlonaut (real name Magnus Granath), one of two simultaneous legal battles between the two men over a series of tweets in March 2019 in which Hodlonaut deemed Wright a pretender, and called him a “scammer” and a “fraud.”
  • Hodlonaut sued Wright in Norway to get a judge to rule that his tweets were protected by freedom of speech – and prevent a libel case filed by Wright in the U.K. seeking financial damages in connection to the tweets from moving forward.
  • During his testimony on Wednesday, Wright told Norwegian District Court Judge Helen Engebrigtsen that he would not be providing any cryptographic proof of his identity as Satoshi Nakamoto, claiming that he not only didn’t want to, but that doing so would be “incredibly difficult” after he destroyed the hard drive containing his private keys to Satoshi’s wallets after his signing session with Andresen.


Binance’s Attempt to Buy Voyager Digital’s Assets Complicated by National Security Concern: Sources

  • Binance’s attempt to purchase crypto lender Voyager Digital’s assets through a bankruptcy auction this week has been complicated by concerns the U.S. government would reject the transaction, according to people familiar with the matter.
  • Purchases of companies with U.S. operations by overseas entities are reviewed by the Committee on Foreign Investment in the United States (CFIUS), which blocks deals it worries pose a national security risk.
  • Under U.S. President Donald Trump, CFIUS took a dimmer view of takeovers by Chinese companies, and his successor Joe Biden just this week signed an executive order “designed to sharpen the federal government’s powers to block Chinese investment in technology in the United States and limit its access to private data on citizens,” the New York Times reported.


Grayscale Investments Declares Rights to 3.1M ETHPoW

  • Grayscale Investments, a subsidiary of CoinDesk parent company Digital Currency Group, has filed with U.S. regulators to distribute Ethereum proof-of-work tokens (ETHPoW) or the cash equivalent to owners of some of its products.
  • The token was created as a “fork” in the wake of the “Merge,” the Ethereum blockchain’s big software update that was completed on Thursday.
  • Holders of ether were granted ETHPoW when the fork happened. As a result, the Grayscale Ethereum Trust now holds more than 3 million ETHPoW tokens, and the Grayscale Digital Large Cap Fund holds 40,000, according to a press release. Grayscale said it wants the right to sell the tokens and distribute the cash proceeds to shareholders “in its sole discretion,” provided there’s a market for the coin.
  • ETHPoW was trading at $11 on Friday afternoon, according to CoinMarketCap.
  • In its press release, Grayscale warned of ETHPoW’s “uncertainty” because it isn’t established, saying there’s doubt whether custodians will support the token and whether it will have a liquid market.


SEC Sues 2 Crypto Advisory Firms and Their Owner for Misappropriating Investors’ Funds

  • The U.S. Securities and Exchange Commission (SEC) on Thursday sued two crypto advisory firms and their owner for allegedly misappropriating investors’ funds that they had pledged to invest in digital assets.
  • The charges, filed in the federal district court in Manhattan, allege that Creative Advancement LLC and Edelman Blockchain Advisors LLC, and their owner, Gabriel Edelman, raised $4.3 million by offering and selling securities to four investors using “false and misleading statements” between February 2017 and May 2021. Those statements included promises to invest in digital assets, when, in reality, Edelman used their funds to bankroll his personal expenses, according to the complaint.
  • The complaint also alleges that Edelman engaged in “Ponzi-like” activities by sending some investors early repayments to encourage them to make larger investments in the scheme. It described the investors as elderly and “relatively unknowledgeable” about crypto.
  • The SEC is seeking court orders to halt the firms’ operations and force the businesses to relinquish the profits they made off the fraudulent transactions.


Goldman Sachs’ bearish macro outlook puts Bitcoin at risk of crashing to $12K

  • A team of Goldman Sachs economists led by Jan Hatzius raised their prediction for the speed of Federal Reserve benchmark rate hikes. They noted that the U.S. central bank would increase rates by 0.75% in September and 0.5% in November, up from their previous forecast of 0.5% and 0.25%, respectively.
  • Fed’s rate-hike path has played a key role in determining Bitcoin’s price trends in 2022. The period of higher lending rates — from near zero to the 2.25-2.5% range now — has prompted investors to rotate out of riskier assets and seek shelter in safer alternatives like cash.
  • Bitcoin has dropped by almost 60% year-to-date and is now wobbling around its psychological support of $20,000. Some analysts, including a pseudonymous trader Doctor Profit, believe BTC’s price has entered the bottom phase at current levels. However, the trader warned:
  • “Please consider FEDs next decisions. 0.75% [rate hike] already priced in, 1% and we see blood.”


FTX CEO Sam Bankman-Fried Says Firm Still Has $1,000,000,000 in Cash Left To Deploy for Acquisitions

  • The chief executive of crypto derivatives exchange FTX says that the company still has a sizable amount of cash left to burn on acquisitions.
  • In a new interview with CNBC’s Squawk Box, FTX CEO Sam Bankman-Fried says the firm still has about $1 billion in cash on the sidelines ready to help ailing crypto firms.
  • “We did not try to empty the coffers, so to speak. We had a couple billion going into this, and it lines up roughly with the amount that we’ve raised over the last year and on top of that we’ve been profitable.”
  • When asked if he had about a $1 billion left to deploy, Bankman-Fried said,
  • “Yeah, and you have the issue of how much we really feel comfortable deploying seeing as there’s another ballpark billion that is completely unencumbered. [That] certainly would get you within a factor of two [of] the right answer.”

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