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| 1 | | The U.S.-based crypto exchange Coinbase’s former product manager, Ishan Wahi, has been sentenced to two years in prison in the first insider trading case involving crypto. Wahi was charged with sharing confidential information about the new cryptocurrencies to be listed on Coinbase before the public announcement with his brother, Nikhil Wahi, and their friend, Sameer Ramani. More: - The sentence was served by U.S. District Judge Loretta Preska in Manhattan federal court.
- Ishan Wahi was arrested in May while boarding a one-way flight to India and pleaded guilty to two counts in February.
- In September 2022, Nikhil Wahi also pleaded guilty to conducting trades based on confidential information obtained from his brother due to his position at the firm.
- Last month, the brother was sentenced to 10 months in prison and $470,000 of restitution.
- Ishan Wahi asked the court not to serve him a prison sentence longer than his brother’s, citing the penalties in other insider trading cases, but the result has not been parallel with his request.
- Wahi’s term of imprisonment will be followed by two years of supervised release, and the former executive is expected to be deported to his native India.
- Prosecutors said three defendants generated $1.5M of illegal profits by trading 55 digital assets between June 2021 and April 2022.
- Sameer Ramani is still on the loose.
Zoom Out: - The leading NFT marketplace OpenSea’s former product manager, Nathaniel Chastain, was also recently convicted of wire fraud and money laundering in an NFT-related insider trading case.
- In the lawsuit, the court ruled that Chastain used confidential information inside the company about the assets to be featured on the home page, gaining $50,000 in illegal profit by trading NFTs.
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What the numbers say: Crypto price tracking site CoinMarketCap's recent data has shown that Tether (USDT) keeps its leading position long ahead of other stablecoins, with an $82.5B market cap. In the top five, the largest stablecoin is respectively followed by USD Coin (USDC), Binance USD (BUSD), Dai (DAI), and TrueUSD (TUSD). Crypto data website CoinGecko's data also pointed out that USDT closed May 9 with a 64.72% market dominance, maintaining a steady share above 60% for over a month. The second stablecoin with the highest market dominance rate has become USDC, with a 23.78% share of the cake. Relevance: USDT's leading position paved the way for mainstream platforms that adopt the largest stablecoin in its services. The prolonged crypto winter and the volatile nature of the non-backed cryptocurrencies also caused rising popularity and a relatively reassuring investor perception of stablecoins, including USDT and USDC, whose value is pegged to a fiat currency. Most recently, Xapo Bank, a crypto-friendly private bank headquartered in the British overseas territory of Gibraltar, has announced that it would start supporting USDT deposits and withdrawals by the end of May. The 10-year-old bank said it would not charge any fees for USDT transactions. The bank also introduced USDC support in March and has received $48M in deposits and $4.5M in withdrawals so far. Brands that should care: The popular messaging app Telegram similarly added the ability to transfer USDT through chats in March. The new feature allowed users to buy and sell the largest stablecoin between each other directly within chats, just as sending a text or photograph. | | | |
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| 3 | | U.S. President Joe Biden has recently shared an infographic on Twitter, calling to remove tax loopholes that only help wealthy crypto investors. The president said cutting these loopholes would cause the government to save $18B. More: - The post got both supportive and critical reactions.
- In the tweet, Biden did not specify which loopholes exist and what reforms are required to remove them.
- Dogecoin (DOGE) co-founder Billy Markus has become one of the users who showed a critical approach towards the infographic, arguing that he gave the government more money than he generated with crypto.
- Markus has also added that most Americans use crypto since they cannot make ends meet.
Zoom Out: - Biden’s latest Twitter post came shortly after the White House published a new blog post reiterating the U.S. government’s plans to impose a 30% federal tax for electricity usage from all digital asset mining.
- The president’s fiscal 2024 budget proposal, revealed in March, also suggested doubling the capital gains tax rate and banning crypto wash sales.
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| 4 | | Crypto analytics platform Arkham Intelligence's data has revealed that the wallets connected to the bankrupt crypto exchange FTX's sister company Alameda Research recently received $60M in crypto from the Seychelles-based crypto exchange OKX. The transfer was estimated to be a part of the efforts to recover funds to pay back FTX creditors. More: - The funds were moved through 16 separate transactions.
- The $60M of digital assets included $1.3M of the Mask Network token (MASK) and $57.77M of Tether (USDT) stablecoin.
- Alameda Research's crypto wallets currently hold more than $284M of assets, with larger portions from USDT, BitDAO (BIT), Ether (ETH), and Stargate Finance (STG).
- OKX froze $157M worth of funds, which it held on behalf of FTX and Alameda Research, in November when FTX filed for bankruptcy.
- In late March, the exchange announced its plans to return those funds, followed by a motion filed by FTX to compel OKX to free the funds to repay the customers.
- The bankrupt exchange also recently filed another motion to recover $3.9B in cash and crypto from the bankrupt crypto lender Genesis and a non-bankrupt affiliate GGC International.
Zoom Out: - FTX, previously the third-largest crypto exchange, filed for Chapter 11 bankruptcy in November 2022, with all the 130 entities under the roof of FTX Group, including Alameda Research.
- The downfall followed the claims that the former CEO Sam Bankman-Fried (SBF) used customer funds in FTX to compensate for losses at Alameda Research.
- The bankrupt firm is also currently assessing the possibility of relaunching the exchange and is expected to make a final decision within Q2.
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| 5 | | Binance, the largest crypto exchange by trading volume, has launched a new platform dubbed Capital Connect to lay a bridge between institutional investors seeking to invest in crypto and crypto investment fund managers. The company said the platform aims to reduce information asymmetry, the lack of common standards, and network inefficiencies within the crypto industry. More: - Capital Connect is currently only used by Binance's VIP users involving brokers, hedge funds, family offices, and high-net-worth individuals.
- The platform will allow institutional clients to invest in crypto assets safely and efficiently.
- Users will be able to access information about the assets under management (AUM) of different funds, their performance records, and minimum investment amounts.
- Interested investors will be able to request contact, and investment managers will review this request, along with the client's information, before accepting a connection.
- The client's information will be kept anonymous until both parties agree upon a connection.
- Binance will not get involved in discussions and deals between the two sides.
- The platform currently lists more than 20 funds, and Binance plans to increase this number in the upcoming months.
Zoom Out: - Binance reported an 8.3% increase in the number of new institutional clients in Q1 from the previous quarter and a 65% rise in active institutional users in 2022.
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| 6 | | The U.K.'s tax authority, the HM Revenue and Customs (HMRC), has proposed a new regulation that would authorize it to seize cryptocurrencies of companies that do not pay their tax liabilities. If approved, the new legislation would allow the country's tax agency to access the online wallets in centralized crypto exchanges, including Binance, Coinbase, and Kraken, and the accounts on digital payments services like PayPal. More: - The move will be a part of the country's efforts to modernize the way of collecting taxes.
- The HMRC already has the authority to seize funds in the bank accounts.
- The proposed regulation aims to expand this authorization to include online payment accounts and crypto wallets.
Zoom Out: - In the annual budget revealed in March, the U.K.'s finance minister, Jeremy Hunt, also announced the country would require taxpayers to report their crypto assets on tax forms separately as of next year.
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- Joseph O’Connor, the U.K. national behind a 2020 Twitter hack involving a crypto scam, has been extradited to U.S. authorities and pleaded guilty to multiple charges regarding cybercrime.
- Crypto mining firm Marathon Digital Holdings has partnered with digital assets infrastructure company Zero Two to launch a new large-scale, more sustainable mining operation in Abu Dhabi.
- Crypto exchange OKX has taken aim at its rival Coinbase in its new global ad campaign, arguing that the system does not need an update but a rewrite.
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INSIDE CRYPTOCURRENCY LEADERBOARD (30 DAYS) |
 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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