| Take a look at the hits from today's Inside Cryptocurrency briefing: - A new lawsuit filed by the families of Hamas victims against Binance,
- The third-largest German bank's plans to pilot retail crypto trading service this year,
- Celsius Network's exit from bankruptcy, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | Families of several individuals falling victim to the attacks of the Palestinian militant group Hamas have sued Binance, the largest crypto exchange by trading volume, for facilitating the group's violence by providing material support to it. Lawyers defined the legal action as the first civil case targeting Hamas and its alleged networks. More: - The plaintiffs in the case include the family members of a woman taken hostage by Hamas in Gaza and the relatives of two men killed during the group's attacks.
- The lawsuit mainly accuses Binance of allowing Hamas to trade on its platform.
- The case pointed out that the assistance provided by Binance to Hamas helped finance the group's violent attacks and recruit individuals carrying out those attacks.
Zoom out: - The suit came more than two months after Binance admitted that it allowed terrorist groups, such as Hamas, Al Qaeda, Islamic State of Iraq and Syria, and Palestinian Islamic Jihad, to conduct crypto transactions on its platform as part of a regulatory and criminal investigation in the U.S.
- At the time, U.S. authorities charged the exchange with money laundering, unlicensed money-transmitting business operations, and sanction violations.
- Binance then had to agree to pay a $4.3B fine, one of the largest-ever corporate penalties in U.S. history, to continue its operations by settling the charges.
- Under the same settlement deal, Binance co-founder Changpeng Zhao (CZ) was also ordered to step down as the company CEO, pay a separate $50M penalty, and not engage in Binance's management for three years after pleading guilty to violating anti-money laundering requirements and sanctions in the U.S.
- The former CEO currently faces up to 10 years in prison and awaits his sentencing hearing on Feb. 23, though he is expected to get no more than 18 months under the plea deal.
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| 2 | | 
What the numbers say: Ether (ETH), the second-largest cryptocurrency by market cap, experienced volatility in price with slight ups and downs in January. The token's value reached as much as $2,712 within the month. The peak price marked the first time the cryptocurrency surpassed the $2,700 mark since May 2022 as it hit a 20-month high. However, the popular cryptocurrency closed January at the $2,200 level, retreating to its average levels at the beginning of the month. Ether saw its all-time high in November 2021 at $4,891. Relevance: The 20-month high in ETH price came on Jan. 12, two days after the U.S. Securities and Exchange Commission (SEC) approved all 11 spot Bitcoin exchange-traded fund (ETF) applications before it. The green light also created optimism around the pending spot Ether ETF applications. However, the token later saw price volatility as the industry leaders revealed their estimations related to the SEC's upcoming decisions on the much-hyped funds. Most recently, the U.K.-headquartered banking giant Standard Chartered's analysts have forecasted that the SEC would approve the pending spot Ether ETF applications in May. The bank analysts further pointed out that Ether's price could surpass the $4,000 level following the approvals, approaching its all-time high. However, investment bank TD Cowen shared an entirely different estimation, pointing out that Ether ETF applications will probably not be approved in the U.S. until late 2025 or early 2026. Brands that should care: The financial institutions waiting for the SEC to approve their spot Ether ETF applications in the U.S. include BlackRock, Fidelity Investments, Grayscale Investments, VanEck, Ark Invest, and 21Shares. | | | |
| 3 | | The collapsed crypto lender Celsius Network officially exited bankruptcy shortly after 98% of the firm's creditors approved the restructuring plan. The exit will see the firm repaying $3B in crypto and fiat currencies to its creditors and transforming into a new Bitcoin mining company dubbed Ionic Digital. More: - The new crypto mining firm will be owned by Celsius Network's creditors, who will receive a stake in the company, and its operations will be overseen by the U.S.-based mining company Hut 8 under a four-year management agreement.
- Hut 8's chief commercial officer, Matt Prusak, will also carry out the CEO role at Ionic Digital.
- The new firm's stock is expected to be publicly traded on an exchange once the company obtains necessary regulatory approvals.
- Celsius Network said it increased the amount of crypto available for distribution to creditors by around $250M by converting its altcoins to Bitcoin (BTC) and Ether (ETH) and through previous settlements.
- The funds will be distributed to the creditors through PayPal, Venmo, and Coinbase.
- Besides, Celsius Network will permanently wind down its operations and shut down its mobile and web applications in late February.
- The eligible users will be able to continue submitting their claims through a form on Celsius Network's applications until Feb. 28 to withdraw their funds stuck on the platform.
Zoom Out: - Celsius Network filed for Chapter 11 bankruptcy protection in July 2022 with more than $1.2B in debt, mainly due to its liquidity issues and the crypto market downturn triggered by the multi-billion-dollar Terra ecosystem's collapse.
- In July 2023, Alex Mashinsky, the company's CEO at the time of bankruptcy, was arrested by U.S. law enforcement agencies with charges related to the collapse in seven counts, to which he pleaded not guilty, and was released on a $40M bond pending trial.
- The criminal trial for Mashinsky is scheduled for September this year.
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| 4 | | The U.S. Energy Information Administration (EIA) has announced that it would start tracking electricity consumption and power use by crypto mining companies actively operating in the U.S. The agency said the move is part of an emergency data collection request issued by the Office of Management and Budget, which runs directly under the executive office of the U.S. President. More: - As part of the request, the EIA will launch a new survey next week, requiring select Bitcoin (BTC) mining firms to respond in detail to the questions related to their energy use.
- The survey will focus on identifying how power demand for crypto mining is changing, the country's parts where mining growth is concentrated, and the power resources used for the mining operations.
- The agency pointed out that it has received requests from various sectors to begin compiling data related to energy use in the crypto-mining industry.
- In cryptocurrencies based on the proof-of-work (PoW) model, like Bitcoin and Dogecoin, computers have to perform complex algorithms to create new coins, requiring massive amounts of computing power and electricity that could harm the environment.
- Crypto miners have come under fire many times in recent years for their high electricity usage, burden on power grids, and adverse impacts on the environment due to the carbon emissions arising from their operations.
- Last year, the Rocky Mountain Institute, a U.S.-based non-profit organization, estimated that Bitcoin mining operations globally consume 127 terawatt-hours (TWh) of electricity in a year, more than the energy used by Norway annually.
Zoom Out: - The EIA is a principal agency of the U.S. Federal Statistical System, and it is responsible for collecting and analyzing data on the energy output and use in the country.
- U.S. President Joe Biden's administration plans to impose a 30% federal tax for all electricity usage for digital asset mining.
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| 5 | | DZ Bank, the third-largest bank in Germany by total assets, has announced its plans to pilot a new retail crypto trading service this year. The financial services giant pointed out that the offering will ultimately allow retail customers to purchase and sell cryptocurrencies directly within the bank. More: - The service will be initially conducted with cooperative banks and only support Bitcoin (BTC), the largest cryptocurrency by market cap.
- However, DZ Bank's board member responsible for capital market operations, Souad Benkredda, said they do not want the service to offer trading with just one cryptocurrency.
- Benkredda added that the offering will start supporting various cryptocurrencies moving forward.
- The bank official also underlined that the service will be completely based on self-decision, meaning customers will trade cryptocurrencies without any advice.
- The announcement came eight months after DZ Bank applied for a license with the German Federal Financial Supervisory Authority (BaFin), the country's financial market regulator, to be able to offer crypto trading services.
- In November last year, the lender also launched a crypto custody service that only caters to institutional clients.
Zoom Out: - Over the past years, several other German traditional financial firms, including Deutsche Bank, Commerzbank, Deutsche Börse AG, and Stuttgart Stock Exchange, similarly launched or announced their plans to introduce crypto services.
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| 6 | | Dubai-headquartered crypto exchange Bybit has recently applied for a virtual asset trading operator license in Hong Kong through its subsidiary Spark Fintech Limited to offer its crypto trading services to retail investors in the region in compliance with local regulations. The application was submitted to Hong Kong's Securities and Exchange Commission (SFC). More: - In an official statement, Bybit said obtaining a license in Hong Kong will be a significant step in catering to Asia Pacific (APAC) due to the region's strategic location and established financial infrastructure.
- The virtual asset trading operator license allows crypto firms to serve retail customers, while the virtual asset service provider license only allows companies to serve professional investors.
- Hong Kong's laws classify investors with holdings worth at least $1.03M as professional investors.
- On the other hand, Hong Kong's regulators officially approved the region's licensing regime for crypto exchanges in May 2023 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.
- The SFC has been accepting applications from crypto exchanges as part of the new regime since June last year.
- The agency currently reviews 14 virtual asset trading operator license applications.
Zoom Out: - HashKey and OSL are the only two licensed crypto exchanges in Hong Kong.
- Several other leading crypto firms, such as OKX, HTX, and Amber Group, also previously revealed their plans to apply for a license under Hong Kong's new regime.
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- Binance, the largest crypto exchange by trading volume, has launched a new marketplace that allows users to buy, sell, and mint inscription tokens like BRC-20 and EVM tokens.
- Tether, the issuer of the largest stablecoin USDT, has reported a record-breaking $2.85B of net profits for Q4 2023 in its latest earnings report.
- Hong Kong's Office of the Privacy Commissioner for Personal Data (PCPD) has started investigating OpenAI CEO Sam Altman's crypto project, Worldcoin, citing serious risks related to personal data privacy.
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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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