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| Hey Insider! Welcome back to the Inside Cryptocurrency newsletter! Today's issue again brings some of the most thrilling stories in the crypto market to your inbox, including Binance's decision to stop accepting new users in the U.K., BitGo's acquisition of HeightZero, a brief jump in Bitcoin's price, and more. Enjoy your reading, and if you find this newsletter useful, please do not forget to share it with your friends and colleagues! *Venture capitalists pitch to founders in our live-stream reverse demo day event, "Meet Our Fund 5," happening today. Check it out! Doğa
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| 1 | | Binance, the largest crypto exchange by trading volume, has temporarily stopped accepting new customers in the U.K. due to recent regulatory changes in the country. The move came nearly 10 days after the Financial Conduct Authority (FCA), the U.K.'s financial market regulator, enacted its new rules for crypto promotions. More: - The FCA's new rules classify crypto as restricted mass market investments, a category for high-risk investment products.
- The updated regulations also require crypto ads to contain clear risk warnings and prohibit incentives such as referrals and new joiner bonuses for crypto firms.
- Before the tightened rules took effect, several crypto-related platforms, including Bybit, PayPal, Luno, and CoinCorner, had to halt their crypto trading operations for customers in the U.K., citing recent regulatory developments in the country.
- However, Binance said it would adjust and restructure its business to comply with the new regulations and partnered with a local peer-to-peer (P2P) platform dubbed rebuildingsociety.com, demonstrating its commitment to the U.K. market.
- In response, the FCA blocked Binance's partner from approving financial promotions for the exchange and other crypto-related firms several days after the partnership announcement.
- In an official statement, Binance pointed out that it is working closely with the FCA and seeking another suitable FCA-authorized firm to approve its financial promotions, allowing it to accept new users in the market.
Zoom Out: - Binance's partial exit from the U.K. market came amid a time when the exchange faced increased scrutiny by regulators in many countries, including the U.S., Australia, Belgium, Brazil, and France.
- The company also recently had to withdraw from several other markets in the West, such as Canada, Austria, the Netherlands, Cyprus, the U.K., and Germany, mainly due to compliance issues.
Q: Do you think Binance will return to the U.K. market in the short term? Join the conversation here. |     | |
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What the numbers say: Bitcoin (BTC), the largest cryptocurrency by market cap, increased by more than 5% in value within the past 24 hours. The token's price jumped to nearly $29,500, up from $27,758 a few hours earlier. Then, the popular cryptocurrency's value retreated to the $28,000 level again, with a slight decline. Relevance: The brief jump in Bitcoin price came shortly after false news prevailed among media outlets. The news claimed that the U.S.-based investment management company BlackRock received approval for its application to launch a spot Bitcoin exchange-traded fund (ETF). Following the news, more than $85M of trading positions were liquidated in 24 hours. The fake news also triggered a significant price increase in Bitcoin. However, the popular token retreated to its average levels after BlackRock denied the news, and the media outlets releasing the false development published a correction. Brands that should care: Other companies waiting for approval for their applications to launch a spot Bitcoin ETF include some leading traditional finance (TradFi) giants like WisdomTree, Invesco Galaxy, Valkyrie, and Wise Origin. Most recently, the U.S. Securities and Exchange Commission (SEC) delayed its decisions on many applications. | | | |
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| 3 | | Bankrupt crypto exchange FTX's former engineering director, Nishad Singh, has recently testified in the ongoing trial against the former FTX CEO, Sam Bankman-Fried (SBF), as one of the key witnesses of the prosecution. In his testimony, Singh said he had only been aware of the misuse of customer funds at FTX since September 2022. More: - In court, Singh admitted he received loans from FTX's sister company, Alameda Research, to fund investments and acquisitions for FTX's U.S. arm with SBF and the company's former chief technology officer Gary Wang.
- The former FTX executive added that a lot of money spent for FTX-related political donations passed through his accounts, and Ryan Salame, the former CEO of FTX's Bahamian unit, had access to his account to make donations and contributions in the name of Nishad Singh.
- Singh's testimony revealed that when Singh proposed shutting down Alameda Research's account on FTX, former Alameda Research CEO Caroline Ellison said that was impossible since the firm could not repay the $13B fund it borrowed.
- Singh also stated that he said they needed to cut spending on endorsement deals when he learned that the amount reached $1B.
- At one point, the former FTX executive described a system at FTX that allowed FTX users to deposit their funds directly into Alameda Research's bank account.
- Adam Yedidia, a former FTX software developer, also previously testified that FTX customer deposits went to an account controlled by Alameda Research since the exchange was having trouble with opening a bank account.
- Singh is among the names who pleaded guilty to charges over their involvement in the collapse and agreed to cooperate with federal prosecutors, along with Caroline Ellison and Gary Wang.
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 31-year-old former CEO is currently being tried on seven charges, including money laundering and misappropriation of customer funds, to which he pleaded not guilty, facing a statutory maximum of 110 years in prison.
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| 4 | | U.S. Judge Jed Rakoff has ordered the bankrupt crypto lender Genesis Global to respond to a subpoena in five days in a case related to the multi-billion-dollar collapse of the Terra ecosystem. The court documents pointed out that the company failed to provide the necessary documents and information requested as part of the subpoena until Oct. 9. More: - The documents and information requested from Genesis through the court order have yet to be disclosed.
- The lawsuit was filed by the U.S. Securities and Exchange Commission (SEC) against Terraform Labs, the firm behind the Terra ecosystem, and the co-founder Do Kwon in February.
- In the case, the SEC accused Terraform Labs and Kwon of defrauding customers and selling billions of dollars in digital assets that were unregistered securities.
- In the filings, the regulator also claimed that the firm misled investors about the stability of its stablecoin pegged to the U.S. dollar (USD), TerraUSD (UST), and promised a value increase in its tokens.
- Kwon is currently under house arrest in Montenegro, where he was arrested while trying to fly to Dubai carrying falsified traveling documents.
- Both the U.S. and Kwon's native South Korea seek his extradition, though they do not have a direct extradition treaty with Montenegro.
- The co-founder also faces many lawsuits and investigations in several countries, such as South Korea, the U.S., and Montenegro, with allegations including tax fraud, deceiving investors, racket collecting, building a Ponzi scheme, and forgery.
Zoom Out: - The multibillion-dollar Terra ecosystem collapsed last year after the prices of its native tokens, Luna and TerraUSD, plummeted nearly to zero in May and lost all their value against USD, triggering a prolonged crypto winter.
- The downfall caused over $60B to be wiped off the crypto market.
- On the other hand, Genesis Global filed for bankruptcy in January this year, mainly due to its exposure to the collapses of the crypto exchange FTX and crypto hedge fund Three Arrows Capital (3AC).
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| 5 | | The U.S.-based crypto custody firm BitGo has acquired the digital asset management platform HeightZero. The financial terms of the sales deal have yet to be disclosed. More: - HeightZero provides software tools for wealth managers whose clients want to invest some portion of their portfolios in digital assets.
- The firm also offers portfolio rebalancing, statement generation, tax loss harvesting, and automated billing services for clients with crypto holdings.
- The company worked with BitGo to use its custody services in the past.
- The acquisition came two months after BitGo raised $100M in funding from entirely new investors at a $1.75B valuation.
- At the time, BitGo CEO Mike Belshe said the new funding would be used for strategic acquisitions, and at least two deals were already in progress.
Zoom Out: - On the other hand, shortly before securing $100M in funding, BitGo also terminated an acquisition deal with the troubled crypto custodian Prime Trust, facing financial difficulties due to its exposure to the bankrupt crypto lender Celsius.
- Following the termination, Prime Trust filed for Chapter 11 bankruptcy protection.
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| 6 | | Online gaming platform Roblox has started accepting payment protocol Ripple's native token, XRP, as a payment method. The move will see platform users start using XRP as a payment option for in-game purchases. More: - The new payment option was added to Roblox in partnership with Xsolla and BitPay.
- Xsolla, managing in-game payments on Roblox, began supporting XRP.
- Meanwhile, BitPay will be responsible for allowing users to connect their crypto wallet to Roblox seamlessly to make in-game purchases with XRP possible.
Zoom Out: - Roblox currently has 65.5 million daily and more than 200 million monthly active users across all mainstream platforms, including Windows, macOS, Android, iOS, Xbox One, and PlayStation 4.
- 44% of the platform's users are under the age of 13.
- In Q1 2023, Roblox users spent $773M on in-game purchases.
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- Binance.US, the U.S. arm of the largest crypto exchange by trading volume, has halted direct U.S. dollar (USD) withdrawals, updating its terms of use.
- Bankrupt crypto exchange FTX's debtors have reached a settlement agreement with creditors, which could see more than 90% of assets held by the platform returning to the customers by the end of Q2 2024.
- Decentralized crypto exchange Uniswap has started implementing a 0.15% fee on trading of certain cryptocurrencies on its web interface and digital wallet.
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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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