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| Take a look at the hits from today's Inside Cryptocurrency newsletter: - A judge order requiring the former FTX CEO to appear in court again on Feb. 21,
- TradeStation Crypto's $3M settlement deal with U.S. securities regulators,
- OKX's launch of its crypto exchange and Web3 wallet services in Argentina, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | U.S. Judge Lewis A. Kaplan has ordered the bankrupt crypto exchange FTX's former CEO, Sam Bankman-Fried (SBF), to appear in court again on Feb. 21 to address questions about potential conflicts of interest in his legal team. The appearance will mark the SBF's first return to court for a hearing since his criminal trial, which ended in November last year. More: - The order came shortly after U.S. prosecutors wrote a letter expressing concerns about lawyers Marc Mukasey and Torrey Young, who filed notices of appearance in both SBF's and the former Celsius Network CEO Alex Mashinsky's cases.
- Prosecutors pointed out that Celsius Network lent money to FTX's sister company, Alameda Research, and Mashinsky partially attributed his firm's collapse to SBF's actions.
- The prosecution said this tie could create a contrary position during the former CEOs' trials and sentencing.
- Mashinsky, whose criminal trial is scheduled for September, has yet to be served any order for a court appearance related to the issue.
- On the other hand, SBF was found guilty of all seven criminal charges brought by U.S. prosecutors against him, including money laundering and misappropriation of customer funds, in late November after a month-long trial process.
- The former CEO is currently awaiting his sentencing hearing on March 28 and faces a maximum sentence of 115 years in prison.
- Meanwhile, Mashinsky was released on a $40M bond in July 2023, shortly after being arrested by U.S. law enforcement agencies with charges related to Celsius Network's collapse in seven counts, to which he pleaded not guilty.
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, following the claims that SBF used customer funds in FTX to compensate for losses at Alameda Research.
- Crypto lender Celsius Network filed for bankruptcy in July 2022, mainly due to its liquidity issues and the crypto market downturn triggered by the collapse of the multi-billion-dollar Terra ecosystem.
- However, the firm officially exited bankruptcy in early February.
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| 2 | | 
What the numbers say: Digital asset platform and crypto payment app provider Bakkt's stock, BKKT, plummeted by 45% in value within the past 24 hours, decreasing from the previous day's high of $1.46 to as low as $0.80 today. The platform's shares opened the day with a sharp price decline, retreating under the critical $1 level. The figure later saw a slight recovery, though it failed to return to yesterday's levels. The firm first went public in 2021, listing its shares on a stock exchange and making them available for purchase by the general public. Within the same year, the BKKT price reached as much as $40. Relevance: The latest plummet in BKKT followed a document filed by Bakkt with the U.S. Securities and Exchange Commission (SEC). In the filing, the firm disclosed that it may not have enough cash to continue operating its business over the next 12 months. The company underlined that its cash is not sufficient to fund its operations, and it doubts it could expand to new markets and grow its revenue within the rapidly evolving environment of the crypto market. The document added that the firm's future success depends on its ability to raise additional capital. In this direction, the company revealed its intention to issue and sell up to $150M in registered securities to ease its financial troubles. Brands that should care: Bakkt was founded by Intercontinental Exchange, the owner of the New York Stock Exchange (NYSE), in 2018. The firm's platform allows institutions to buy, sell, store, and spend crypto assets. The platform made strategic partnerships with several major brands, including Starbucks and Amazon Web Services, to help their customers buy products and services with Bitcoin (BTC). The company also launched a digital wallet in 2021, which was discontinued last year. However, it later decided to focus only on crypto custody and trading services. | | | |
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| 3 | | A group of investors has filed a lawsuit against the National Basketball Association (NBA), the American professional basketball league, for allowing teams to promote the bankrupt crypto lender Voyager Digital. The lawsuit claimed the association's marketing ties with the firm caused $4.2B in losses. More: - In the case, investors accused the NBA of being grossly negligent while approving a marketing deal between Voyager and Mark Cuban, the former owner of the Dallas Mavericks team.
- The suit pointed out that the association deliberately decided to embrace the risks associated with the crypto exchanges.
- The plaintiffs also said the NBA's widespread promotion of Voyager Digital's unregistered securities makes it responsible for all resulting damages.
- McCarter & English, the law firm defending Voyager Digital, was similarly named as a defendant in the lawsuit for producing fraudulent legal opinions that the lender's native token, VGX, was not an unregistered security.
- Cuban signed a five-year partnership deal with Voyager Digital in 2021, making the VGX token the official cryptocurrency of the Dallas Mavericks and displaying the crypto lender's ads in the team's arena, American Airlines Center, during the 2021-2022 season.
- In 2022, the former owner also faced a separate lawsuit by investors following Voyager Digital's bankruptcy for promoting the lender and defrauding them by misrepresenting the platform's safety.
Zoom Out: - Voyager Digital filed for Chapter 11 bankruptcy in July 2022, nearly four years after its launch, citing volatility in the crypto market and its exposure to the collapsed crypto hedge fund Three Arrows Capital (3AC).
- Several other NBA teams also had marketing deals with crypto firms, including the Miami Heat's agreement with the bankrupt crypto exchange FTX.
- However, the collapse of FTX paved the way for a series of lawsuits against celebrities and brands who endorsed crypto projects, such as Tom Brady, Stephen Curry, Larry David, Kim Kardashian, and Trevor Lawrence.
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| 4 | | A Montenegrin appeals court has canceled the extradition of Do Kwon, the co-founder of the collapsed Terra ecosystem, to the U.S. or South Korea for the second time, accepting an appeal filed by Kwon's legal team last month. The latest ruling overturned the previous decision made by the High Court in December. More: - The appeals court ruled that the previous decision approving the extradition included violations of criminal procedure and the lack of clear reasons.
- The court also said there were procedural issues in the previous order about how the extradition requests were handled and the arrival order of the extradition requests from South Korea and the U.S.
- The case will again return to the first-instance court to be reconsidered.
- Kwon was arrested at the Podgorica Airport in Montenegro in March 2023 with Han Chang-joon, the chief financial officer of Terraform Labs, while trying to fly to Dubai carrying falsified traveling documents.
- Since then, both the U.S. and South Korea have sought Kwon's extradition to try him with various charges, including fraud, securities law violations, deceiving investors, racket collecting, and building a Ponzi scheme, though neither has a direct extradition treaty with Montenegro.
- Han Chang-joon was recently extradited to his native South Korea after completing his four-month prison sentence in Montenegro for document forgery.
- However, Kwon is still serving his prison sentence for document forgery in the country, 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 the U.S. dollar (USD).
- The downfall caused over $60B to be wiped off the crypto market, triggering a prolonged crypto winter.
- Terraform Labs, the firm behind the ecosystem, filed for bankruptcy last month, reporting both assets and liabilities in the range of $100M to $500M.
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| 5 | | Crypto platform TradeStation Crypto has agreed to pay a $3M fine to settle the charges of the U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA), a group of state securities regulators. The two agencies accused the platform of failing to register its crypto lending product with the regulators and offering and selling unregistered securities. More: - A $1.5M portion of the penalty will be paid to the SEC, while the remaining $1.5M will go to the NASAA to settle a year-long investigation conducted by a task force of eight state securities regulators.
- TradeStation Crypto neither admitted nor denied the regulators' allegations.
- The platform's crypto lending product, launched in August 2020, allowed customers to deposit or purchase crypto assets to earn interest.
- However, TradeStation Crypto stopped offering the service in June 2022 following a relevant order from the SEC.
- Earlier this year, the platform also announced that it would terminate its crypto-related products and services in the U.S. as of Feb. 22.
Zoom Out: - TradeStation Crypto's parent company, TradeStation, is a subsidiary of the Japanese financial services firm Monex Group.
- Over the past year alone, many other crypto platforms, including Binance, Coinbase, Kraken, Gemini, Bittrex, and KuCoin, came under increased crackdown by U.S. regulators and had to pay millions of dollars in fines to settle.
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| 6 | | Seychelles-based crypto exchange OKX has launched its crypto exchange and digital wallet services in Argentina. The move will allow Argentinian users to access OKX's crypto trading platform to sell and purchase various cryptocurrencies and non-custodial Web3 wallets to use their crypto funds in decentralized finance (DeFi), NFT, and decentralized app (dApp) platforms. More: - Verified regional users will also be able to access OKX's peer-to-peer (P2P) exchange, OKX P2P, which allows users to buy crypto from or sell crypto to other users in the marketplace through local currency.
- The P2P platform will support the Spanish language.
- OKX's president, Hong Fang, said Argentina represents a crucial point for their regional growth strategy.
Zoom Out: - OKX's launch in Argentina came more than two months after the platform also expanded its crypto trading and Web3 wallet services to Brazil.
- Last year, Chainalysis' data showed that Brazil and Argentina are among the largest crypto markets in Latin America, alongside Mexico.
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- Crypto mining firm Hut 8 Corp. has appointed a new CEO less than two months after being rebranded to a new U.S.-based mining entity from a merger between Hut 8 Mining Corp. and U.S. Bitcoin Corp.
- South Korean authorities have reportedly started investigating Seychelles-based crypto exchange OKX over complaints that the platform is operating in the country without proper registration.
- The governor of the Reserve Bank of India, Shaktikanta Das, has announced that the Indian central bank is working on offline solutions to increase the adoption of the country's central bank digital currency (CBDC), or the digital rupee, in remote areas with limited internet access.
- Thailand's Securities and Exchange Commission has filed charges against the CEO of the troubled crypto exchange Zipmex's local unit, Akarlap Yimwilai, accusing him of corruption and deception.
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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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