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| Here's your daily Inside Cryptocurrency briefing: - 🛂 A U.S. judge ordering the former Binance CEO to give his passport to a third-party custodian until his sentencing,
- 💸 Crypto.com's $3.12M fine in the Netherlands,
- 📈 A 15% jump in Dogecoin's price following Elon Musk's new statement related to the token, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | U.S. Judge Richard A. Jones has recently restricted the bond conditions of the crypto exchange Binance's co-founder and former CEO, Changpeng Zhao (CZ), ordering the ex-executive to give his Canadian passport to a third-party custodian employed by his lawyers. The judge also ruled that CZ must notify the court's Pretrial Services before traveling in the U.S. More: - The ruling pointed out that the third-party custodian would accompany Zhao on any travel requiring identification documents.
- CZ was also ordered to deliver all current and expired passports belonging to him to his lawyers.
- Judge Jones blocked the former CEO from obtaining new passports without the court's permission.
- The latest ruling came nearly four months after Zhao pleaded guilty to violating anti-money laundering requirements and sanctions in the U.S. by allowing terrorist groups to make crypto transactions on Binance.
- Following his guilty plea, the co-founder was ordered to step down as Binance CEO, pay a $50M penalty, and not engage in the exchange's management for three years.
- The co-founder's several attempts to obtain permission to return to his home in the United Arab Emirates (UAE) while awaiting his sentencing were denied by U.S. judicial authorities, citing his flight risk due to his enormous wealth and property abroad.
- However, the former CEO is free in the U.S. under a $175M release bond.
- Zhao currently faces up to 10 years in prison and awaits his sentencing hearing on April 30, though he is expected to get no more than 18 months under a settlement agreement with U.S. regulators.
Zoom Out: - In November 2023, Binance, the largest crypto exchange by trading volume, also agreed to pay a $4.3B fine to settle the U.S. authorities' money laundering, unlicensed money-transmitting business operations, and sanction violation charges.
- The settlement deal, which marks one of the largest corporate penalties in U.S. history, allowed the platform to continue its operations in the U.S.
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| 2 | | 
What the numbers say: Dogecoin (DOGE) has recently experienced a notable price surge, reaching as much as $0.191 on Thursday. The token's value jumped by 15% from $0.1657 a few hours earlier. The popular cryptocurrency later saw a slight price decline and started hovering around the $0.17 level. However, the token is still significantly above the prices seen in the previous day. Relevance: The 15% jump in Dogecoin's price came shortly after Elon Musk stated that his electric vehicle (EV) manufacturing company, Tesla, could start accepting Dogecoin as an official payment method in the sales of the cars at some point. The worldwide-known CEO made the statement while interacting with the public at one of the company's manufacturing plants, the Berlin Gigafactory. During his appearance at the facility, an audience member asked if a Tesla car could be bought using DOGE soon. While answering the question positively, Musk also pointed out that customers can still purchase Tesla's merchandise with Dogecoin. The firm has been accepting the token as a payment method for some of its commercial products since January 2022. In 2022, Musk also said he would continue supporting Dogecoin wherever possible despite all the backlash and legal actions he faced. Brands that should care: Several other companies, of whom Elon Musk is the CEO, like SpaceX and The Boring Company, also currently support Dogecoin by accepting it in the sales of several commercial products and services. The crypto community speculates that X, known as Twitter before being sold to Musk, will support Dogecoin in its upcoming in-app payments feature. However, the anticipation has never been confirmed so far. | | | |
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| 3 | | U.S. Judge Edgardo Ramos has denied the U.S.-based crypto exchange Gemini and the bankrupt crypto lender Genesis Global's request for the dismissal of the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against them over their joint crypto lending product, Earn. The judge said the SEC could proceed with its lawsuit, accusing the two firms of offering unregistered securities to hundreds of thousands of investors through the service. More: - The SEC sued Gemini and Genesis Global in January 2023, seeking an order requiring the two firms to return the money they earned from the Earn program and pay civil penalties.
- The defendants requested the dismissal of the lawsuit last year, arguing that the transactions on Earn were loans.
- Genesis Global later agreed to pay a $21M civil penalty to settle the SEC's lawsuit in February, though Gemini has yet to settle with the agency over the case.
- The latest ruling pointed out that the financial products offered through Earn constituted a security transaction since customers invested in a common enterprise with an expectation of profit.
- Judge Ramos said the SEC plausibly alleges that the defendants offered and sold unregistered securities through Earn.
- The ruling also allowed both sides to continue gathering pretrial evidence, stating that Gemini and Genesis Global may seek the dismissal of the case again when they exchange records and take pretrial deposition testimony from witnesses.
Zoom Out: - The Gemini Earn service, launched in 2021, allowed more than 200,000 Gemini users to lend their crypto assets to Genesis to earn interest.
- However, Genesis Global filed for bankruptcy in January last year after freezing withdrawals in November 2022, mainly due to its exposure to the collapses of the crypto exchange FTX and crypto hedge fund Three Arrows Capital (3AC).
- The joint program was halted following the bankruptcy, causing some customer funds to be stuck.
- The two firms also previously faced lawsuits by the New York Department of Financial Services (NYDFS), the New York Attorney General (NYAG), and each other over the Gemini Earn product.
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| 4 | | U.K. Judge Edward Mellor has ruled that Craig Wright is not the inventor of Bitcoin (BTC) after a two-month trial, putting an end to one of the most prolonged controversies in the crypto industry. Wright had been claiming to be Bitcoin's pseudonymous creator, Satoshi Nakamoto, and to own the copyright to the Bitcoin white paper for years. More: - The Crypto Open Patent Alliance (COPA), whose members include Jack Dorsey-led digital payments company Block, the U.S.-based crypto exchange Coinbase, and the largest corporate Bitcoin holder MicroStrategy, filed a lawsuit against Wright in the U.K.
- The lawsuit mainly sought to prevent Wright from continuing to claim that he had invented Bitcoin and using this claim to expand his influence over the crypto sector.
- During the trial, Wright was accused of fabricating documents provided as evidence through numerous misleading edits and the use of AI many times.
- At the end of the trial, Judge Mellor decided that Wright was not Nakamoto, not the author of the Bitcoin white paper, not the creator of Bitcoin's initial software, and not the inventor of the Bitcoin system.
- COPA said the decision is a win for developers, the entire open-source community, and the truth.
Zoom Out: - The Bitcoin white paper is the original thesis paper written by Satoshi Nakamoto in 2008 to lay out the basic structure and technical details of the Bitcoin blockchain network.
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| 5 | | The De Nederlandsche Bank (DNB), the central bank of the Netherlands, has disclosed that it fined Singapore-headquartered crypto exchange Crypto.com $3.12M in October last year for operating in the country without registration. The regulator said the exchange offered crypto services in the country without registering with the DNB from May 21, 2020, to at least Nov. 8, 2022, though the agency introduced registration requirements in May 2020. More: - Crypto service providers are required to register with the DNB to operate in the country under the Dutch Anti-Money Laundering and Anti-Terrorist Financing Act.
- Crypto.com received registration in the Netherlands in July 2023, and the fine was served for a two-year period before the company obtained registration in the country.
- The DNB said the base amount of the fine was around $2.1M but was increased later, considering the severity of the violation, the degree of the non-compliance, and the significant number of Crypto.com customers in the Dutch market.
- The regulator added that Crypto.com enjoyed an advantage over its competition during the period it operated without registration since it did not pay supervisory fees and compliance costs to the DNB.
- The agency also pointed out that the exchange did not report unusual transactions to the Dutch authorities during the period of non-compliance.
- A Crypto.com spokesperson stated that they filed an objection to the fine on Oct. 9, underlining that the penalty is related to a past and rectified incident.
Zoom Out: - Several other crypto exchanges, including Binance and Coinbase, also previously faced hefty fines in the Netherlands for operating without registration.
- Currently, 41 virtual asset service providers have been registered with the DNB, including Coinbase, Crypto.com, BitPay, and eToro.
- Some crypto exchanges, such as Binance, Bitpanda, and Gemini, had to withdraw from the country in recent months, citing their inability to meet the DNB's requirements on crypto trading platforms.
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| 6 | | Web3 and blockchain-focused investment firm Hivemind Capital Partners has started raising at least $50M for a new NFT fund dubbed the Hivemind Digital Culture Fund that would invest in projects at the intersection of digital art and blockchain technology. The firm said it has already secured about half of the $50M target, underlining that the fund showed interest from museums, art collectors, high-net-worth individuals, and family offices. More: - Hivemind Capital Partners will continue raising capital for the fund during the rest of 2024 and deploy the funding over the next three years.
- The firm will mostly focus on Ethereum-based and high-end art NFTs rather than popular profile picture NFT collections like Bored Ape Yacht Club (BAYC).
- The firm's founder and managing partner, Matt Zhang, stated that the company acquired the digital artworks in the portfolio of Starry Night Capital, an NFT fund launched by the founders of the bankrupt crypto hedge fund Three Arrows Capital (3AC), in the past few months.
- Zhang also pointed out that NFTs will eventually catch up with other crypto assets like Bitcoin (BTC), even though they are still experiencing stress and weakness.
- The founder added that the digital art, digital culture, and generative art markets today are at the point where the cryptocurrency market was 12 months ago.
- Zhang underlined that NFTs are ready to move on from crypto winter, stating that the digital art pieces have drawn attention from newly wealthy investors.
Zoom Out: - Hivemind Capital Partners also launched a $1.5B crypto fund in early 2022 and a $300M crypto trading fund in April last year.
- Half of the $1.5B crypto fund has already been deployed.
- The firm previously invested in several well-known Web3 startups, such as Trust Machines and LimeWire.
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- The U.S.-based business intelligence firm MicroStrategy has announced that it would offer convertible senior notes in less than two weeks for the second time to buy additional Bitcoin, boosting its existing reserves.
- The families of the two Binance executives under detention in Nigeria have stated that the employees will remain under custody until at least March 20.
- The New York Stock Exchange (NYSE) has warned the crypto payment app provider Bakkt that it would delist the firm's stock if its average closing price does not return to above $1.
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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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