| Here's your daily Inside Cryptocurrency briefing: - 🛅 Kraken's new crypto custody service for institutional clients,
- 📝 Former FTX CEO's response to U.S. prosecutors' sentencing recommendations,
- 💰 Immutable, King River Capital, and Polygon Labs' $100M fund for Web3 gaming, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | Kraken Institutional, the U.S.-based crypto exchange Kraken's unit catering to corporate clients, has launched a new crypto custody service dubbed Kraken Custody. The new service will create deposit accounts for the exchange's institutional customers and keep their digital assets under custody. More: - Kraken Custody will also allow institutions to store, manage, and transfer their digital asset funds through a single interface protected by the firm's in-house security tools.
- The service will hold all the digital assets in segregated accounts remote from the exchange itself.
- Besides, the assets of institutional clients will be held on a full-reserve basis, meaning the platform will offer all the deposits back if customers want to take out their funds.
- The institutional custody service will be facilitated by Kraken Financial, the exchange's banking arm holding a charter by the regulators in the U.S. state of Wyoming.
- Kraken Financial CEO Trevor Rutar said the banking arm is subject to some of the most rigorous security and operational checks under the supervision of Wyoming's Division of Banking.
Zoom Out: - Kraken Financial became the first crypto exchange to receive a banking charter in the U.S. in 2020 after obtaining a charter in Wyoming to offer comprehensive deposit, custody, and fiduciary services for digital assets.
- The exchange launched its institutional unit, Kraken Institutional, last month to offer crypto services to institutions, asset managers, hedge funds, and high-net-worth individuals.
- Some rival crypto exchanges, such as Coinbase, Gemini, and Binance, also actively offer crypto-related services to institutional clients, specifically targeting their needs through a dedicated service or unit.
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| 2 | | 
What the numbers say: Ether (ETH), the second-largest cryptocurrency by market cap, has seen strong volatility in price over the past 24 hours. The token's value experienced two major plummets on Wednesday. The initial decline caused ETH's price to retreat as low as $3,109, down from the $3,300 level a day earlier. The token later saw a brief recovery, though it lasted a short time. The second plummet came as ETH's price suddenly declined by nearly 6% from $3,385 to $3,186 within a few hours. Then, the popular cryptocurrency managed to gain value and started hovering around $3,300 again. Earlier in March, the token reached as much as $4,000 for the first time since December 2021. Relevance: The first plummet in the ETH price followed the U.S. Securities and Exchange Commission's (SEC) consecutive adjournments for its decision on several spot Ether exchange-traded fund (ETF) applications. Simultaneously, Bloomberg analysts also shared their forecasts that Ether ETF applications will not be approved by the SEC in May, changing their earlier predictions. The forecast cited the regulator's lack of engagement with the applicants, which creates a sharp contrast with the engagement level with the spot Bitcoin (BTC) ETF issuers receiving the green light in January. The second 6% plummet came right after the website of the Ethereum Foundation, a nonprofit organization dedicated to supporting the Ethereum blockchain, indicated that the entity is currently under a confidential investigation by a state authority. However, the related indications were removed from the website after the news broke out without an explanation. Ether reacted negatively to both news with a sudden price decline, though it later experienced a slight recovery. Brands that should care: The major financial institutions waiting for the SEC to approve their Ether ETF applications in the U.S. include BlackRock, Fidelity Investments, Grayscale Investments, VanEck, Ark Invest, and 21Shares. | | | |
| 3 | | Lawyers for the bankrupt crypto exchange FTX's former CEO, Sam Bankman-Fried (SBF), have filed a response to the U.S. prosecutors' sentencing memo, defining the recommendations as disturbing. In its response, the legal team said the prosecution's recommendation of up to five decades in prison distorts reality and paints the former executive as a depraved supervillain. More: - The response also pointed out that the prosecutors adopt a medieval view of punishment to reach a sentencing that would cause SBF to die in prison, underlining that such a sentence would not secure justice.
- The filing came less than a week after U.S. prosecutors made their sentencing recommendations for SBF in a 116-page memo, suggesting that the former CEO should receive 40 to 50 years in prison for his role in the FTX's collapse.
- The prosecution also asked U.S. Judge Lewis A. Kaplan to order SBF to forfeit more than $10B, equal to the loss resulting from the downfall.
- On the other hand, SBF's legal team recommended a prison sentence of up to six and a half years last month, stating that a just sentence would be in the range of 63 months to 78 months.
- The 32-year-old former CEO faces a maximum sentence of 115 years in prison under U.S. criminal sentencing guidelines.
- The former executive is currently at the Metropolitan Detention Center in New York, where he has been confined since his bail was revoked by Judge Kaplan in August last year.
- The ultimate punishment will be determined by Judge Kaplan at a sentencing hearing on March 28.
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 the sister company Alameda Research and spent those funds to finance political donations, invest in other companies, and purchase luxury real estate.
- In November 2023, SBF was found guilty of all seven criminal charges brought by U.S. prosecutors against him, including wire fraud, money laundering, and misappropriation of customer funds, after a month-long trial process.
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| 4 | | A Montenegrin appellate court has recently confirmed the High Court's earlier decision to extradite Do Kwon, the co-founder of the collapsed Terra ecosystem, to his native South Korea rather than the U.S., denying an appeal from the former crypto executive. The confirmation could see Kwon being extradited to South Korea as early as this weekend since his prison sentence in Montenegro for document forgery will officially end on March 23. More: - The court said the High Court was right in its decision since the country requested the co-founder's extradition before the U.S. officials.
- Kwon's legal team stated that the ruling marks a final, and there will be no more complaints.
- A lawyer for Kwon also added that there will be the actual handover process next, with the coordination between justice ministries and police officials of South Korea and Montenegro.
- Still, the decision was considered a win for Kwon since his lawyers previously expressed a preference for his home country.
- Kwon was arrested at Podgorica Airport in Montenegro in March 2023 while trying to fly to Dubai carrying falsified traveling documents.
- Since his arrest, both the U.S. and South Korea have sought Kwon's extradition to try him on various charges, including fraud, securities law violations, deceiving investors, racket collecting, and building a Ponzi scheme.
- Officials pointed out that the South Korean government could still reach a deal with the U.S. authorities to allow Kwon to face a trial there first.
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 in January this year, reporting both assets and liabilities in the range of $100M to $500M.
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| 5 | | Web3 gaming platform Immutable has launched a $100M fund dubbed the Inevitable Games Fund (IGF) to invest in blockchain-based games in partnership with the venture capital (VC) firm King River Capital and Polygon Labs, the firm behind the Polygon blockchain network. The three firms have already raised $30M of the target $100M fund. More: - The fund will invest in early-stage and fast-growing Web3 gaming startups without prioritizing any ecosystem.
- King River Capital will lead the investment process and deploy the capital across select startups, while Immutable and Polygon Labs will serve as advisors by providing their expertise in Web3 gaming and identifying investment opportunities.
- The contributors of the first $30M capital include VC firm Alpha Wave Ventures, Web3 gaming community Merit Circle, TechCrunch co-founder Michael Arrington, the Algorand blockchain network's former CEO Steve Kokinos, Polygon co-founder Sandeep Nailwal, and Immutable co-founders James Ferguson and Robbie Ferguson.
- The IGF has already allocated investments in seven early-stage gaming projects, including Pixelmon, Metalcore, Guild of Guardians, and My Pet Hooligan.
Zoom Out: - The launch of the IGF came exactly a year after Polygon Labs entered into a strategic partnership with Immutable to accelerate the development of the Web3 gaming ecosystem.
- In June 2022, Immutable also launched a $500M fund for gaming and NFT startups building their projects on its ImmutableX platform.
- Web3 games refer to video games that are hosted on a blockchain and allow players to own their in-game digital assets like NFTs and tokens.
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| 6 | | American rapper Dennis David Coles, best known for his stage name Ghostface Killah and his role in the hip-hop group Wu-Tang Clan, has announced that he will release a piece of exclusive music in the form of Bitcoin Ordinals. The popular rapper has partnered with the inscription service OrdinalsBot, Bitcoin artist Rare Scrilla, and the NakaPepes collection for the initiative. More: - Coles' Ordinals will be offered through a free mint, meaning the buyers will cover the fees associated with the minting process rather than the rapper himself.
- Holders will have Creative Commons Zero (CC0) rights to the music, which would allow them to build upon, enhance, and reuse the work freely.
- Coles also attempted to launch a crypto project dubbed Cream Capital in 2017.
Zoom Out: - Ordinals refer to the digital assets permanently attached to a satoshi or 1/100,000,000 of a full Bitcoin (BTC).
- The Ordinals protocol was launched by programmer Casey Rodarmor in January 2023, allowing developers to inscribe various data file formats, including text, images, audio, videos, and video games, onto the Bitcoin network.
- The protocol also paved the way for Bitcoin-based NFTs, and since then, it gained massive popularity.
- Currently, there are only 1,290 audio files inscribed to the Bitcoin network.
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- Bankrupt crypto lender Genesis Global has received court approval for its $21M settlement deal with the U.S. Securities and Exchange Commission (SEC) over its joint crypto lending product with the U.S.-based crypto exchange Gemini.
- The U.S.-based crypto and stock trading platform Robinhood has rolled out its crypto wallet on Android a year after making the product available to iOS users.
- China-based online payment platform Alipay has partnered with the Avalanche blockchain network to create a new Web3-powered voucher program.
- Visa and Mastercard have reached a groundbreaking $5B settlement, reshaping the landscape of financial transactions as we know it.*
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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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