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| 1 | | The U.S. state of New York has introduced a new bill that would make stablecoins a payment method for bail. The amended legislation would allow accused people to be temporarily released while awaiting trial by making a certain amount of stablecoin payment to ensure their appearance in court. More: - The draft law did not specify which stablecoins would be accepted as payment for bail.
- However, the legislation proposes the state not accept stablecoins whose value is not pegged to a fiat currency.
- The current criminal procedure law accepts cash, credit cards, and several bonds for bail payments.
- The amendment would expand the scope of this law to include fiat-pegged stablecoins, such as the U.S. dollar (USD)-collateralized Tether (USDT) and USD Coin (USDC).
Zoom Out: - The move came nearly five days after New York Attorney General Letitia James proposed new legislation dubbed the Crypto Regulation, Protection, Transparency and Oversight Act (CRPTO).
- The proposed bill mainly aims to increase the enforcement authority of the state regulators over the crypto industry and tighten the existing crypto regulations in New York.
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What the numbers say: Crypto and stock trading app Robinhood has recently published its earnings report for Q1, revealing that its crypto trading revenue declined by 30% in the first three months of the year compared to the same quarter of last year. The platform generated $38M in revenue from crypto trading during Q1 2023, down from $54M in Q1 2022. The figure also refers to a decline for three consecutive quarters. The firm's total revenue, on the other hand, saw a 47.5% increase YoY, reaching $441M from $299M. Details: The report also showed that the firm held $12B of crypto assets under custody in Q1, a 50% surge from the previous quarter. However, the figure accounted for a 42.5% decline compared to the same period in 2022. Relevance: Earlier this year, Robinhood hit the headlines with a subpoena served by the U.S. Securities and Exchange Commission (SEC) over its crypto services. The SEC claimed that some cryptocurrencies listed by the platform are securities. The subpoena, mainly concerning Robinhood's crypto listings and crypto custody services, was originally served shortly after popular crypto exchange FTX's bankruptcy in November 2022. At the time, Robinhood claimed it offered trading services for certain cryptocurrencies not considered securities under U.S. federal and state securities laws. In 2020, Robinhood had another legal conflict with the SEC after the agency accused the platform of deceiving customers about its revenue sources and had to pay $65M to settle SEC's charges. Brands that should care: Especially after FTX's collapse, many other crypto trading platforms, including Coinbase, Kraken, Bittrex, and Binance, came under increased scrutiny by the regulators in the U.S., such as the SEC, the Internal Revenue Service (IRS), and the Commodity Futures Trading Commission (CFTC). NOTE: Inside.com founder and CEO Jason Calacanis is an investor in Robinhood. | | | |
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| 3 | | The U.S. Internal Revenue Service (IRS), the country’s tax authority, has filed 45 claims against the bankrupt crypto exchange FTX and its subsidiaries, including Alameda Research and Ledger. The filings, dated April 27 and 28, were recently made public. More: - The claims are worth nearly $44B.
- The largest ones include a $20.4B and a $7.9B claim against Alameda Research LLC in partnership, income, and payroll taxes.
- Another two claims, totaling $9.5B, were also filed against Alameda Research Holdings Inc.
- The remaining claims concern the amounts assessed to other entities of FTX Group, including West Realm Shires and Blockfolio.
- The IRS filed its claims under the classification of administrative priority, which means that the agency will be prioritized over the claims of other creditors in a bankruptcy case.
- The bankrupt firm has recently recovered funds from several entities and is currently assessing the possibility of relaunching the exchange.
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.
- 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.
- SBF currently faces trial on 13 charges, including bank fraud, money laundering, and bribery, to which he pleaded not guilty.
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| 4 | | Recent reports from South Korean local media have pointed out that Do Kwon, the co-founder of the collapsed Terra ecosystem, has over $176M of frozen assets. The sales of these personal assets have been prohibited by Chief Judge Yun Chan-Young of the 12th Criminal Division of the Seoul Southern District Court as part of the ongoing criminal proceedings. More: - The frozen assets include the Galleria Foret apartment complex in Seoul, an officetel (building with commercial and residential spaces common in South Korea), a series of imported cars, and various financial funds.
- The disposition of Kwon’s financial assets, including securities, bank deposits, and crypto funds stored in personal accounts on digital asset exchanges, has also been banned.
- South Korean law prevents suspects from selling or disposing of their assets illegally acquired through criminal activity until a conviction is confirmed.
- Kwon was arrested at the Podgorica Airport in Montenegro in March with Han Chang-Joon, the chief financial officer of Terraform Labs, while trying to fly to Dubai carrying falsified traveling documents.
- The 31-year-old founder faces many lawsuits and investigations in several countries, including South Korea and the U.S., with allegations such as tax fraud, deceiving investors, racket collecting, and building a Ponzi scheme.
- Both the U.S. and Kwon's native South Korea seek the Terra founder's extradition, though they do not have a direct extradition treaty with Montenegro.
- Lawyers for Kwon have recently proposed $437,000 bail for Terra founder to be released while waiting for trial in Montenegro and denied charges of carrying falsified travel documents.
Zoom Out: - The multibillion-dollar Terra ecosystem collapsed last year after Luna's price plummeted nearly to zero in May 2022 and lost all its value against the U.S. dollar (USD), triggering a prolonged crypto winter.
- The collapse caused over $60B of money to be wiped off the crypto market.
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| 5 | | A recent Twitter post from the famous Tesla CEO Elon Musk has caused an NFT project dubbed Milady Maker to see a spike in trading volume. The collection's trading volume reached $13.5M on the popular NFT marketplace OpenSea after it hit 1,300 sales. More: - On May 10, Musk liked a reply involving Milady Maker to his former girlfriend and singer Grimes.
- The tweet included the word "Milady" and two memes related to the collection.
- The famous CEO also shared one of the memes in a separate tweet.
- The move paved the way for Milady NFTs, other Milady-related NFT collections, and a token under its name to skyrocket in trading volumes.
- Milady NFT collection currently holds the largest share of trading volume on OpenSea, with a nearly threefold amount of the popular Bored Ape Yacht Club (BAYC) collection.
- Milady meme coin (LADYS) similarly increased by 3,000% in value, even though it does not have an official link with the collection.
- The coin, released just a few days ago, also reached $200M in trading volume and $150M in market cap.
Zoom Out: - Musk previously caused Dogecoin's (DOGE) price to skyrocket many times through his Twitter posts.
- The famous CEO is even a defendant with his companies, including Tesla, SpaceX, and The Boring Company, in a $258B Dogecoin lawsuit that alleges him of conducting a Ponzi scheme to support the popular meme coin.
- The lawsuit claims that Musk deliberately caused Dogecoin's price to jump over 36,000% in two years before allowing it to plummet.
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| 6 | | The U.S.-based crypto mining firm Marathon Digital was served a second subpoena by the U.S. Securities and Exchange Commission (SEC) nearly one and a half years after the first one. The subpoena concerns an ongoing investigation related to the firm’s data center facility in Montana. More: - The SEC claims that the data center could have violated federal securities laws.
- The investigation is looking into whether there have been any violations.
- In a filing, Marathon Digital said it is willing to cooperate with the SEC.
- The company and its executives were first subpoenaed by the SEC in November 2021.
- The first subpoena requested the crypto miner to provide necessary documents and communications regarding the facility.
Zoom Out: - Marathon Digital is one of the largest publicly traded crypto mining firms by computing power, with its facilities across the U.S.
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 | 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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