| Hey Insider! The week is closing with the new details revealed in FTX's bankruptcy proceedings getting more and more complicated over time. Today's issue covers the new FTX management's lawsuit against former CEO Sam Bankman-Fried and three other ex-senior executives, OpenSea's new peer-to-peer NFT swapping feature, U.S. Department of Justice's plans to double the number of prosecutors in its crypto enforcement team, and more. I hope you enjoy your reading and have a great weekend! Doğa
p/dogayurduneri | |
| 1 | | Bankrupt crypto exchange FTX has filed a new lawsuit against former CEO Sam Bankman-Fried (SBF) and three other ex-senior executives to recover more than $1B of funds in doubtful transactions. The former executives were alleged of conducting various fraudulent transfers benefiting them personally but doing nothing for FTX. More: - Other defendants in the lawsuit include the former chief technology officer (CTO) Gary Wang, the former director of engineering Nishad Singh, and the former co-CEO of the sister company Alameda Research, Caroline Ellison.
- In one incident, SBF and Wang offered Alameda fake loans that did not require the executives to show any collateral and provided interest rates under commercial market rates.
- Only Ellison was authorized to extend the loans in Alameda.
- The lawsuit also claimed that SBF, Wang, and Singh took out fake loans to acquire $250M of stock from FTX.
- The case, along with several other lawsuits, is part of the new FTX management's wider efforts to recover funds, repay creditors, and ultimately relaunch the exchange.
- The new management recently began talks with investors about a potential restart, and a U.S. bankruptcy court set Sept. 29 as the deadline for former customers to submit their claims against FTX and its affiliated companies.
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 SBF used customer funds in FTX to compensate for losses at Alameda Research.
- The bankruptcy rules allow FTX to recover payments made before the firm filed for bankruptcy.
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| 2 | | 
What the numbers say: Decentralized finance (DeFi) lending and borrowing protocol Radiant Capital's native token RDNT recently experienced a jump in price. The token's price increased to $0.31, up from the $0.28 level earlier in the day. The figure represents a 10% surge, though the token is still 48% below its all-time high in September last year. Relevance: The increase in RDNT's price came shortly after Binance Labs, the venture capital (VC) arm of the largest crypto exchange by trading volume, announced that it invested $10M in Radiant Capital. The firm said the new funds would be spent on tech and product development. Brands that should care: Over the last several months, Binance Labs has ramped up its investments in the Web3 space. Most recently, the firm similarly pledged to invest $15M in the Web3 gaming startup Xterio. The unit's investment portfolio also includes Hooked Protocol, Mysten Labs, Mask Network, League of Kingdoms, and Numbers Protocol. | | | |
| 3 | | Terraform Labs, the firm behind the collapsed Terra ecosystem, has filed a motion to subpoena information from the bankrupt crypto exchange FTX. The company claimed that FTX's sister company Alameda Research was behind a coordinated attack by short sellers to pave the way for the failure of Terra ecosystem tokens. More: - The company said the requested documents would help Terraform Labs defend itself against the fraud charges brought by the U.S. Securities and Exchange Commission (SEC).
- In February, the SEC accused Terraform Labs and its former CEO, Do Kwon, of illegally offering unregistered securities in a fraud scheme.
- Terraform Labs requested FTX to present information about digital wallets used by short sellers from March to May 2022.
- Other requests include FTX's records about wallets, trading accounts, and assets used to trade Terraform Labs' cryptocurrencies on the exchange, the information on the sales of those tokens in large volumes, the data on the balances and holdings in the suspicious short sellers' wallets and trading accounts, and the identities of those wallet owners and controllers.
- The firm's lawyers also demanded information on the wallets used by Jump Trading LLC, accused by the SEC of helping Terraform Labs prop up the ecosystem tokens TerraUSD and Luna.
Zoom Out: - The multibillion-dollar Terra ecosystem collapsed last year after its native token Luna's price plummeted nearly to zero in May, and lost all its value against the U.S. dollar (USD), triggering a prolonged crypto winter.
- The collapse caused over $60B to be wiped off the crypto market.
- Terraform Labs recently appointed Chris Amani as its new interim CEO to replace Do Kwon, who currently deals with legal proceedings and charges stemming from the collapse.
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| 4 | | Speaking at a recent event in Washington, D.C., a senior official from the U.S. Department of Justice (DOJ), Nicole Argentieri, has announced that the federal agency will more than double the number of prosecutors in its National Cryptocurrency Enforcement Team (NCET). Argentieri also said the NCET will become a permanent unit within the Computer Crime and Intellectual Property Section (CCIPS) as part of the reorganization. More: - Also, Claudia Quiroz will be the new leader of the NCET as the acting director as the current director Eun Young Choi departed to move on to a new position within the DOJ.
- The CCIPS director will also serve as the deputy chief of the crypto enforcement unit.
- Argentieri stated that the NCET would be able to access more resources by integrating into the CCIPS amid strong growth in its caseload.
- The move will also put the prosecutors in the NCET in the same status as the ones in the CCPIS.
- The restructuring in the unit came shortly after DOJ officials said cryptocurrency started playing a bigger role in almost every area of the criminal world.
Zoom Out: - The DOJ launched its crypto enforcement unit in 2021 amid concerns about the increase in crypto-related crimes, such as money laundering and terrorism financing.
- Since then, the unit helped other federal agencies in many investigations, including those into the previously third-largest crypto exchange FTX's collapse and Binance's alleged violations of U.S. laws.
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| 5 | | Popular NFT marketplace OpenSea has launched a new feature dubbed Deals to allow traders on the platform to exchange their NFTs with each other. The new peer-to-peer (P2P) feature aims to help collectors engage with other traders directly, encourage more users to join NFT communities by simplifying the swapping process, and make the NFT swapping trustworthy. More: - The Deals function was built on OpenSea's native NFT protocol Seaport.
- Users can also include Wrapped Ether (WETH) in their deals to make them more attractive.
- To use the function, traders need to enter the username, ENS name, or wallet address of the person they want to make a deal with.
- Then, they can choose up to 30 NFTs and add the amount of WETH if they want to include any.
- The process is followed by the selection of the assets to be offered to trade, and then the deal can be sent to the other party for consideration.
- NFTs to be traded must be on the same blockchain and from verified collections on both sides of the deal.
- OpenSea currently charges no fee for the feature on its own account or for the creator royalties, though the users need to pay gas fees for the transfers once the deal is accepted.
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| 6 | | Former First Lady Melania Trump has released a new NFT dubbed Man on the Moon, potentially violating NASA rules on image usage in NFTs. In its Regulations on Merchandising Requests and Media Usage Guidelines, the federal agency explicitly prohibits the use of its images in connection with an NFT project and says that it does not approve any merchandising applications related to the NFTs. More: - The NFT features astronaut Buzz Aldrin's iconic photograph from 1969 when he took part in NASA's Apollo 11 lunar landing mission.
- In the guidelines, NASA points out that companies or individuals wishing to use its imagery, emblems, or identifiers on merchandise have to seek the agency's approval, adding that it uses strict regulations during this approval process.
- Melania Trump's latest NFT was released on the USA Memorabilia NFT platform, also making the marketplace responsible for the violation.
- On the other hand, some NFT enthusiasts argued that images produced by federal agencies, like NASA, are public property and can be used for free.
Zoom Out: - Trump is an active member of the NFT community, just like former U.S. President Donald Trump.
- The former First Lady launched her first NFT projects in late 2021 on the Solana blockchain.
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| 7 | | Quick Hits: - Elevate your cloud expertise with the AWS Cookbook. Practical, concise, AWS-focused: This resource is your key to cloud success.*
- Indonesia has officially launched its national crypto exchange and clearing house after delaying the launch twice.
- U.S. House Republican committees have introduced a joint bill for digital assets to establish a regulatory framework for the crypto industry.
- The recent bankruptcy court filings have revealed that Alameda Research's former co-CEO, Caroline Ellison, was aware of an over $10B cash deficit at FTX.com nearly eight months before the crypto exchange's bankruptcy.
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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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