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| Take a look at the hits from today's Inside Cryptocurrency briefing: - Former Celsius Network CEO's new legal motion seeking dismissal of two charges against him,
- HashKey's achievement of unicorn status,
- Solana Mobile's plans to launch an affordable successor of its crypto-focused Saga smartphone, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | The bankrupt crypto lender Celsius Network's former CEO, Alex Mashinsky, has requested that a U.S. court drop two felony charges against him, including commodities fraud and market manipulation. Mashinsky's legal team also asked the court to prevent information and evidence related to Celsius Network's bankruptcy from being included in the case. More: - Mashinsky's lawyers argued that the commodities fraud charge is inconsistent with the securities fraud charge since it presents a conflicting view about the government's treatment of crypto.
- The legal team also said it is not clear if the government intends to argue that Celsius Network's services include the purchase and sale of securities or commodities products.
- The lawyers further sought the dismissal of the charge of market manipulation, claiming that the U.S. government invented a criminal offense for a civil violation.
- The move came six months after U.S. law enforcement agencies arrested Mashinsky with allegations related to his potential involvement in Celsius Network's collapse.
- The charges brought by U.S. prosecutors against Mashinsky in seven counts include securities fraud, commodities fraud, wire fraud, misleading investors, and conspiracy to manipulate the value of Celsius Network's native token, CEL.
- However, the former executive pleaded not guilty to all charges and was released on a $40M bail pending trial.
- The criminal trial against Mashinsky is scheduled for Sep. 17.
Zoom Out: - Celsius Network offered loans and paid high interest rates on crypto deposits.
- The company filed for Chapter 11 bankruptcy protection in July 2022 with more than $1B in debt, mainly due to its liquidity issues and the crypto market downturn triggered by the multi-billion-dollar Terra ecosystem's collapse.
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| 2 | | 
What the numbers say: The U.S.-based digital payments company PayPal's stablecoin that is pegged to the U.S. dollar (USD), PayPal USD (PYUSD), experienced an 88% jump in its market cap within the last one and a half months. The figure surged to $295M on Jan. 15, up from the $156.6M level at the beginning of December. The stablecoin's daily trading volume also saw a significant surge, increasing from $1.98M to $13.97M during the same period. The surge represents a more than 600% jump, indicating that many more investors now trade the token in various markets. Relevance: PayPal launched PYUSD in August last year, marking the first time a major financial services company introduced its own stablecoin. The Ethereum-based token is issued by Paxos and backed by USD deposits, short-term U.S. Treasuries, and similar cash equivalents. Holders can currently use PYUSD to make transfers between PayPal and external wallets, pay for goods and services, and convert them into other tokens. Brands that should care: On the other hand, the jump in PYUSD's market cap and daily trading volume was mainly triggered by the stablecoin's adoption by mainstream crypto trading platforms like Coinbase, Kraken, Crypto.com, Yellow Card, and BitPay. PayPal also made the token available in its popular Venmo app in addition to its main app. The stablecoin's key metrics reacted positively to increased adoption and broadened availability. | | | |
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| 3 | | The U.S. Securities and Exchange Commission (SEC) has agreed to postpone a trial, originally scheduled for Jan. 29, in its case against Do Kwon, the co-founder of the collapsed Terra ecosystem. In a court filing, the regulator pointed out that the move would allow Kwon to attend the trial after being extradited to the U.S. More: - The filing came several days after lawyers for Kwon requested a trial adjournment, saying the defendant would probably not be extradited from Montenegro and come to the U.S. until at least February or March.
- The legal team also recently sought a delay until March 18, stating they would not seek further adjournments if Kwon cannot attend the trial on the new date.
- The SEC requested the trial to be postponed to April 15.
- Whether the trial will be moved to a further date will be decided by U.S. Judge Jed Rakoff.
- The case concerning the trial was filed by the SEC in February 2023, accusing Kwon and Terraform Labs, the firm behind the Terra ecosystem, of defrauding customers and selling billions of dollars in digital assets that were unregistered securities.
- The lawsuit also claimed that the firm misled investors about the stability of its stablecoin pegged to the U.S. dollar (USD) and promised a value increase in its tokens.
- However, Kwon was later arrested at the Podgorica Airport in Montenegro in March while trying to fly to Dubai carrying falsified traveling documents.
- The co-founder is currently serving his prison sentence for document forgery in Montenegro, and his detention term was extended in December by two months to Feb. 15 at the request of U.S. and South Korean officials.
Zoom Out: - The multibillion-dollar Terra ecosystem collapsed in 2022 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.
- Both the U.S. and Kwon's native South Korea seek the co-founder's extradition, though neither has a direct extradition treaty with Montenegro.
- Kwon faces various charges in both countries, including fraud, securities law violations, deceiving investors, racket collecting, and building a Ponzi scheme.
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| 4 | | Binance, the largest crypto exchange by trading volume, has launched its trading services in Thailand through a joint venture with Thailander private power producer Gulf Energy Development. The new exchange, Gulf Binance, will allow users to purchase and sell digital assets with Thai baht (THB) trading pairs. More: - The exchange will also have integration with local banks in Thailand.
- Gulf Binance obtained a license from Thailand's Securities and Exchange Commission in May 2023 to operate as a registered digital asset exchange and to offer crypto brokerage services in the country.
- At the time, the approval marked Binance's first license in Southeast Asia.
- However, the Thailander securities regulator granted the final approval to Gulf Binance in November last year, allowing the joint venture to commence its crypto exchange services.
- Gulf Energy Development's financial technology (fintech) arm, Gulf Innova, and Binance first signed a deal to launch a joint venture in 2022.
- Gulf Energy Development holds a 51% stake in the joint venture, while Binance owns the remainder.
Zoom Out: - Binance started launching its operations in some jurisdictions through joint ventures with local firms to increase its compliance after it faced heightened regulatory scrutiny in many countries, including the U.S., Australia, France, Belgium, and Brazil.
- The company also had to withdraw from several markets in recent months, such as Russia, Canada, Austria, the Netherlands, Cyprus, the U.K., and Germany, mainly due to compliance issues.
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| 5 | | The Hong Kong-based digital asset firm HashKey Group has raised nearly $100M in a recent funding round. Through the latest investment, the firm also achieved unicorn status, with its valuation exceeding $1B. More: - The funding round increased HashKey Group's valuation to $1.2B.
- The company said the round included both existing and new investors.
- One source familiar with the matter claimed that OKX Ventures, the investment arm of the Seychelles-based crypto exchange OKX, was among the lead investors in the financing round.
- The firm pointed out that the new funding will be used to create a Web3 ecosystem and new licensed products in Hong Kong.
- HashKey Group currently offers crypto exchange, venture funding, and asset management services in Hong Kong and Singapore.
- The firm's trading platform is one of the only two licensed crypto exchanges in Hong Kong, along with OSL.
- In January 2023, the company also raised $500M in funding to increase the mass adoption of blockchain and crypto.
Zoom Out: - Hong Kong's regulators officially approved the long-awaited licensing regime for crypto exchanges in May to turn the region into a crypto hub, allowing retail investors to trade major tokens such as Bitcoin (BTC) and Ether (ETH) on licensed platforms.
- As part of the new regime, the region's Securities and Futures Commission (SFC) started accepting applications for digital asset trading platform licenses in June 2023.
- HashKey obtained one of the first licenses under the new regime, and it has increased the number of its registered users to over 155,000 since then.
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| 6 | | Solana Mobile, the mobile division of the Solana blockchain ecosystem, has started planning to launch a second crypto-focused smartphone as an affordable successor to its Saga phone, according to a recent report citing sources familiar with the matter. The upcoming phone will have the same fundamental features as Saga, including a built-in crypto wallet, a custom Android operating system, and a decentralized application (dApp) store listing crypto apps. More: - However, the new phone will have a cheaper price tag and different hardware.
- The Saga phone was priced at $1,000 during its launch in May last year, and its price was later cut to $599.
- Last month, the Solana founders disclosed that they planned to discontinue the device due to disappointing sales.
- However, an exclusive airdrop for the Solana-based BONK token caused a massive jump in sales as the phone owners sought to receive the dog-themed cryptocurrency for free.
- Shortly after the airdrop, the limited stock of 20,000 Saga phones sold out in the U.S. and Europe.
- The following airdrops also supported the reversal in the device's fate, triggering an increase both in the phone's sales and the relevant tokens' prices.
- Amid the hype, the crypto-focused smartphone's sales price reached as much as $5,000 on eBay, and secondary device sales are still receiving bids as high as $3,200.
Zoom Out: - Saga was first unveiled by Solana co-founder Anatoly Yakovenko at a New York City event in June 2022.
- The device comes with a 6.67-inch OLED display, a fingerprint scanner, two versatile back camera lenses, the flagship-level Qualcomm Snapdragon 8+ Gen1 processor, 12 GB RAM, and 512 GB of storage.
- Unlike other smartphone devices, Saga also allows users to send, receive, trade, and store crypto assets within the device directly and securely.
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- Seychelles-based crypto exchange OKX has obtained a conditional virtual asset service provider license in Dubai from the region's Virtual Assets Regulatory Authority (VARA) through its local arm, OKX Middle East Fintech FZE.
- South Korean regulators have started considering imposing sanctions against crypto-mixing services like Tornado Cash to combat the use of these services for money laundering.
- Stablecoin issuer Circle's CEO, Jeremy Allaire, has stated that he believes the U.S. will pass the long-awaited stablecoin law in 2024.
- The firms behind the Klaytn and Finschia blockchains, backed by South Korean entities, have proposed merging their networks to create Asia's largest Web3 ecosystem.
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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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