Wednesday, 22 November 2023

Market Summary

Market Summary 22 November 2023

Bitcoin Price: US$35,741.65 (-4.56%)
Ethereum Price: US$ 1,933.01 (-4.37%)  

Binance founder and former CEO Changpeng “CZ” Zhao has been released on a $175 million personal recognisance bond after pleading guilty to violating the Bank Secrecy Act. The plea came in response to allegations that he directed Binance to allow U.S. customers to use the platform without proper know-your-customer or anti-money laundering checks. As part of the release terms, Zhao is posting $15 million held in a trust account, agreeing to forfeit funds if he violates the terms, and finding two guarantors. A sentencing hearing is scheduled for February 23, 2024. Additionally, Binance, under Zhao’s leadership, is settling with various U.S. agencies, including the Department of Justice, the Financial Crimes Enforcement Network, the Office of Foreign Asset Control, and the Commodity Futures Trading Commission. The settlements include a record $1.35 billion fine from the CFTC, making it the largest ever secured by the regulator. Binance will pay a total of nearly $3 billion to settle the CFTC lawsuit. Zhao has resigned from Binance, which will pay $4.3 billion in penalties and undergo monitoring for the next five years. The SEC is still pursuing a separate action against Binance. Furthermore, Binance will make a “complete exit” from the U.S., paying billions in fines and appointing a monitor for five years to settle charges with FinCEN and OFAC. This move is part of a historic settlement with the U.S. Treasury Department’s money laundering and sanctions watchdogs. Binance is accused of violating the Bank Secrecy Act and sanctions programs, enabling illicit actors to transact on its platform, including individuals associated with terrorist organisations and sanctioned jurisdictions. Treasury Secretary Janet Yellen called the action the largest settlement in the department’s history.

As the U.S. Securities and Exchange Commission (SEC) approaches another set of deadlines for deciding on spot bitcoin exchange-traded funds (ETFs), analysts are weighing the potential impact on the crypto industry. Notably, large applicants such as BlackRock, Fidelity, and Franklin Templeton make this approval more significant than past milestones like the introduction of crypto futures by the Chicago Mercantile Exchange in 2017 or Coinbase’s public listing in 2021. Pantera Capital’s Dan Morehead believes that a BlackRock ETF could fundamentally change access to Bitcoin, differing from previous “buy the rumour, sell the news” events. JPMorgan analysts also acknowledge the substantial price increase in bitcoin, anticipating positive effects from an ETF approval. In other news, Wintermute Asia, the derivatives trading arm of Wintermute Group, completed its first options block trade through the Chicago Mercantile Exchange, catering to the growing institutional demand for exposure to digital assets. Meanwhile, the U.S. Department of Justice seized $9 million worth of Tether (USDT) linked to a “pig butchering” scam, where victims were lured in with romance scams, highlighting ongoing efforts to combat crypto-related criminal activities. The seizure followed a collaborative investigation involving the DOJ, crypto exchange OKX, and Tether.

Circle has introduced a new “bridged USDC standard” to facilitate the streamlined deployment of its stablecoin, USDC, on new networks. The standard employs a two-phase approach, allowing initial control of token contracts by third-party developers, backed by a native version on another network. In the second phase, Circle takes over, and the token is directly backed by Circle’s reserves. This standard aims to eliminate the need for migrations when transitioning from an unofficial to an official version, providing a smoother user experience. In other news, Tether’s bank partner, Britannia Financial, faces a lawsuit over a $1 billion deposit from Tether, with Arbitral International alleging failure to pay the full price for revenue-generating assets related to the deposit. Additionally, Aragon DAO is taking legal action against its founders following their decision to dissolve the Aragon Association without consulting the DAO, prompting dissatisfaction within the community. The DAO has voted to allocate 300,000 USD Coin to Patagon Management for legal action against the Aragon team, seeking the return of funds to former tokenholders who redeemed pro-rata.

dYdX founder Antonio Juliano revealed that the loss of $9 million in insurance funds on Nov. 17 was due to a targeted attack on the v3 chain, not an exit scam. Juliano stated that the dYdX chain was not compromised, and the v3 insurance fund was exploited to fill gaps in liquidation processes in the token market. Emphasising that dYdX has no plans to negotiate with the attackers, Juliano announced that the FBI is being informed of the progress made in identifying the attacker. The security breach, which caused a 43% drop in YFI token prices, targeted long positions in YFI tokens, liquidating nearly $38 million in positions. In a different development, the Fantom Foundation awarded a $1.7 million bounty to a security researcher who helped eliminate a vulnerability associated with a hack in October. The hack, which drained 1% of the foundation’s funds, exposed a dormant admin token that, if exploited, could have led to a potential loss of $170 million. The researcher’s discovery allowed the vulnerability to be quickly mitigated. In another legal development, Apple is facing a class-action lawsuit accusing the tech giant of conspiring to limit P2P payment options and blocking crypto technology in iOS payments apps, leading to inflated fees. The plaintiffs seek to recover excessive fees and overcharging due to Apple’s alleged anti-competitive conduct. Additionally, Kraken co-founder Jesse Powell criticised the U.S. SEC, referring to it as the “USA’s top decel,” after the regulator sued Kraken for securities law violations. Powell claimed the SEC was not satisfied with the previous $30 million settlement and warned other crypto companies to leave the “U.S. warzone” to avoid expensive legal battles.


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