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| Hey Insider! Welcome to the week's first Inside Cryptocurrency newsletter! Today's issue covers the most prominent crypto stories hitting the headlines during the weekend and within the day, including FTX co-founder Gary Wang's testimony on the bankrupt exchange's insurance fund, Yuga Labs' decision to reduce its headcount, the 5% price decline in Ether (ETH), and more. Enjoy your reading, and if you find this newsletter useful, please do not forget to share it with your friends and colleagues! Doğa
p/dogayurduneri | |
| 1 | | Yuga Labs, the firm behind the popular Bored Ape Yacht Club (BAYC) and CryptoPunks NFTs, has reduced its headcount without specifying the number of employees laid off. The company said the mass layoff was part of a broader internal restructuring in Yuga Labs. More: - The affected employees have been informed through an email from Yuga Labs CEO Daniel Alegre.
- In the email, Alegre stated that his first six months at the company showed that the business needed streamlining.
- Yuga Labs co-founder Greg Solano also pointed out that the firm still has more than 120 employees.
- In March 2022, the NFT firm raised $450M in funding at a valuation of $4B.
Zoom Out: - Yuga Labs' staff cut came amid a time when several other crypto-related firms, including Ledger and Chainalysis, also announced mass layoffs.
Q: What is your prediction about the main reason behind the mass layoffs across the crypto industry? Join the conversation here. |     | |
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What the numbers say: Ether (ETH), the second-largest cryptocurrency by market cap, dropped by nearly 5% within the day. The token's price retreated below the $1,600 mark, astonishing investors. The figure declined to as low as $1,556, down from the $1,637 level a day earlier. The popular cryptocurrency has yet to achieve to turn back to above $1,600. Relevance: The downward trend in ETH price started shortly after the Ethereum Foundation, a nonprofit organization dedicated to supporting the Ethereum blockchain network, swapped a significant portion of its Ether holdings. A crypto wallet belonging to the foundation recently sold more than 1,700 ETH for $2.7M of USD Coin (USDC). The move reduced the entity's ETH holdings to 240.68 ETH. The popular cryptocurrency reacted to the sell-off with a price decline, suggesting that the Ethereum Foundation is quite influential on the ETH price, though it is not an official or centralized entity. The organization similarly sold $30M of ETH in May, causing a 5% decrease in the token's value. Brands that should care: On the other hand, the Ethereum Foundation swapped its ETH holdings on the popular decentralized crypto exchange Uniswap. The sale was first detected by the crypto data analytics platform Arkham Intelligence. | | | |
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| 3 | | Speaking in court to testify in the ongoing trial against the bankrupt crypto exchange FTX's former CEO, Sam Bankman-Fried (SBF), the firm's former chief technology officer (CTO), Gary Wang, has stated that they used hidden Python code to misrepresent the amount in the company's $100M insurance fund. Wang said the fund was totally fabricated and never contained any of FTX's native token, FTT. More: - FTX's insurance fund was designed to prevent users from losing a high amount of funds in case of sudden market movements or huge liquidation events, covering their losses.
- However, the code amplified the size of the fund by multiplying the daily trading volume of FTT by a random number close to 7,500.
- Wang said the fund consisted of only U.S. dollars (USD), and its amount was insufficient to cover the potential losses since it did not match the amount in the database.
- The former CTO also revealed that the sister company Alameda Research was the only one authorized to trade more than the FTX's available funds through a feature dubbed allow negative.
- He underlined that SBF ordered Wang and FTX's former engineering director Nishad Singh to develop and implement the feature back in 2019.
- The feature allowed Alameda Research to achieve a negative balance, more than the amount FTX had in revenue in 2020.
- Wang was already among the names who pleaded guilty to charges over their involvement in the collapse, along with Nishad Singh and the former Alameda Research CEO Caroline Ellison.
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 with 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 | | Binance, the largest crypto exchange by trading volume, has launched a copy trading feature for futures products in selected markets. The new feature will allow users to replicate strategies and portfolios of experienced traders while trading futures. More: - Registered users will be able to act as both copy and lead traders on Binance.
- When a trader copies the trades of a lead trader, the latter will receive a 10% share of the profit.
- Binance will let users follow up to ten leader traders simultaneously.
- Copy traders will have the option to set their own risk preferences.
- The platform said copy trading would lower the barriers to entry into crypto while helping improve social engagement within the community.
- The exchange has yet to disclose the markets incorporating the feature, though a company spokesperson said the availability of the feature would be in line with local regulations.
Zoom Out: - Copy trading refers to a process in which a trader directly copies the positions taken by another trader, mostly sharing the profit from that trade.
- Binance has accelerated its regulatory compliance efforts after it faced increased crackdowns by regulators in many countries, including the U.S., Australia, Belgium, and France.
- The company also recently had to withdraw from several markets in the West, such as Canada, Austria, the Netherlands, Cyprus, the U.K., and Germany, mainly due to compliance issues.
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| 5 | | The Financial Conduct Authority (FCA), the U.K.'s financial market regulator, has recently added 143 crypto-related entities to its warning list that advises customers to avoid dealing with these firms. The 143 entities added to the list include several leading crypto exchanges such as HTX, formerly known as Huobi, and KuCoin. More: - The move came on Oct. 8, the same day the FCA's new rules for crypto promotions came into force.
- The 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 changes in the country.
- However, some other crypto exchanges, such as Binance, Coinbase, and OKX, have decided to adjust and restructure their business to comply with the new regulations, re-entering the U.K. market.
Zoom Out: - Crypto firms must be either registered with the FCA or granted temporary status to operate in order to run crypto asset activities in the U.K.
- In August, the FCA announced that it had received 291 registration applications from crypto-related companies since 2020 and approved only 38 of them.
- Currently, there are 42 entities registered as crypto asset service providers in the U.K., including Bitstamp, Revolut, and Gemini.
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| 6 | | OpenAI CEO Sam Altman has recently shared his opinions on Bitcoin (BTC), the crypto market, central bank digital currencies (CBDCs), and the U.S. government's approach to the industry during a recent podcast with Joe Rogan. In the conversation, Altman said he is concerned about the future of Bitcoin and other cryptocurrencies facing significant backlash from U.S. regulators. More: - OpenAI CEO added that he is disappointed with the authorities' approach to and recent actions about digital assets, which he defines as a war on crypto.
- During the podcast, Altman also defined Bitcoin as a super logical and important global currency outside the control of any government, emphasizing his enthusiasm about the leading cryptocurrency.
- Altman expressed his opposition to CBDCs, saying they could expand the surveillance and control of the state over money in the U.S.
- His comments on CBDCs came nearly 20 days after the U.S. House Financial Services Committee passed a bill dubbed the CBDC Anti-Surveillance State Act to prevent a federal issuance of a potential CBDC in the country.
- At the time, Rep. Tom Emmer, proposing the bill, defined the CBDCs as state-controlled programmable money that could give the federal government the ability to surveil and restrict U.S. citizens' financial transactions, underlining that such an instrument is incompatible with American values.
Zoom Out: - Sam Altman is most famous for his CEO position in OpenAI, the AI research lab behind the popular AI-powered chatbot ChatGPT.
- The worldwide-known CEO recently faced strong backlash from regulators over his crypto project Worldcoin's potential violations of data protection and privacy laws.
- Worldcoin defines itself as a digital passport helping holders prove their identity, humanness, and uniqueness securely and privately through iris-scanning devices dubbed the "Orb."
- The project has already come under scrutiny by data watchdogs in several countries, including the U.K., Argentina, France, Germany, and Kenya.
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- Seychelles-based crypto exchange HTX, formerly known as Huobi, has managed to claw back $8M of Ether (ETH) stolen during a recent cybersecurity incident targeting the platform, issuing a 250 ETH white hat reward to the hacker.
- U.S. judicial officials have announced that the former Alameda Research CEO, Caroline Ellison, would testify in court in the ongoing trial against the bankrupt crypto exchange FTX's former CEO, Sam Bankman-Fried (SBF), on Oct. 10.
- South Korean crypto exchange Upbit has revealed that it was targeted by hackers more than 159,000 times in H1 2023.
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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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