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| Here's your daily Inside Cryptocurrency briefing: - 📝 U.S. prosecutors' sentencing recommendations for former FTX CEO,
- 📋 Binance's tightened token-listing requirements,
- 🔚 Starbucks' decision to wind down its NFT rewards program, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | U.S. prosecutors have recently made their sentencing recommendations for the bankrupt crypto exchange FTX's former CEO, Sam Bankman-Fried (SBF), filing a 116-page memo with Judge Lewis A. Kaplan. In the memo, the prosecution said SBF should receive 40 to 50 years in prison for his role in the FTX's collapse, which caused more than 1 million investors to fall victim and over $10B to be lost. More: - The prosecutors also stated that a lighter sentence could pose a risk of future fraud by SBF since he showed unmatched greed and hubris and still refuses to admit his wrongdoing, underlining that justice requires a prison sentence of up to five decades in parallel with the extraordinary dimensions of his historic crime.
- 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, in November 2023 after a month-long trial process.
- The former executive is currently waiting for his sentencing hearing on March 28 at the Metropolitan Detention Center in New York, where he has been confined since his bail was revoked by Judge Kaplan in August last year.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 32-year-old former CEO faces a maximum sentence of 115 years in prison under U.S. criminal sentencing guidelines.
- However, SBF's lawyers recommended a prison sentence of up to six and a half years last month, suggesting that a just sentence would be in the range of 63 months to 78 months.
- At the time, the ex-CEO's legal team also said SBF should not be ordered to pay restitution or forfeit any assets as part of his sentencing since FTX's customers and creditors will receive their funds back through the firm's ongoing bankruptcy proceedings.
- On the other hand, U.S. prosecutors also asked Judge Kaplan to order SBF to forfeit more than $10B, suggesting that the money should be distributed in the FTX's bankruptcy.
- SBF's lawyers plan to file a response to the prosecutors' memo this week.
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.
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| 2 | | 
What the numbers say: A recent research study by the U.S.-based think tank Atlantic Council has revealed that a total of 135 countries and currency unions, representing 98% of the global economy, took a step into exploring central bank digital currencies (CBDCs) as of March 2024. The research showed that half of these countries and unions are in the advanced exploration phases. The Bahamas, Jamaica, and Nigeria have become the only three countries fully launching a CBDC. China's digital yuan project, also known as e-CNY, was described as the largest CBDC pilot in the world, reaching 260 million wallets across 25 cities. Relevance: The study also pointed out that progress on a retail CBDC has stalled in the U.S., leaving the country behind the global economy in developing the digital version of its currency. U.S. President Joe Biden signed an executive order in 2022 for the federal government to explore the potential use cases and risks of a CBDC. The move has ignited debates among lawmakers and politicians in the U.S. Several politicians, including presidential candidate Donald Trump, Florida Gov. Ron DeSantis, Rep. Alex Mooney, Rep. Tom Emmer, Rep. Warren Davidson, and Sen. Ted Cruz, have shown an anti-CBDC stance, arguing that the CBDCs could be used as a direct surveillance tool by the government and violate the privacy rights of American citizens. On the other hand, some politicians like Rep. Stephen Lynch urged the U.S. government to launch a digital dollar pilot, citing around 130 other countries working on a CBDC, such as Russia and China. However, Jerome Powell, chair of the U.S. central banking entity, the Federal Reserve, recently stated that policymakers are not close to taking action to adopt a CBDC, and something like a digital dollar is not remotely close to happening anytime soon. Brands that should care: The number of countries exploring CBDCs was only 35 in May 2020. The surge in the figure caused many brands, including Ripple, DBS Bank, Microsoft, and Visa, to jump on the bandwagon over the past few years by offering exclusive features and platforms for CBDCs or joining major CBDC pilot projects. | | | |
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| 3 | | Binance, the largest crypto exchange by trading volume, has tightened its requirements for projects looking to list new tokens on the platform as part of its efforts to boost investor protection. Sources familiar with the matter said the changes to token-listing requirements took effect in late 2023 without an official announcement, and the exchange only informed the projects showing interest in listing new tokens on Binance of the stricter rules verbally. More: - As part of the tightened requirements, projects seeking to list new tokens on the platform must agree to a cliff period of up to a year, up from the previous six-month requirement.
- During the cliff period, projects cannot sell tokens since a certain share of the total supply is locked up in a smart contract, and they are asked to make a security deposit.
- Once the cliff period ends, the smart contract gradually releases the tokens based on a predetermined schedule, and market makers responsible for maintaining liquidity are allocated a certain share of tokens to support trading.
- The stricter rules saw Binance asking for more tokens to be set aside for market makers in some cases to ensure adequate liquidity.
- A Binance spokesperson said the security deposit also aims to protect investor interest and handle extreme situations as a precautionary measure without specifying the size of the deposit.
- Some executives at Binance stated that the changes could pose a risk of undermining the exchange's profitability and making the token-listing process extremely burdensome.
- However, crypto exchanges have often come under fire for inadequate oversight of new token listings since some projects and market makers sell large amounts of tokens shortly after they begin trading, causing smaller investors to experience losses.
Zoom Out: - Binance had to increase its efforts to boost investor protection mainly after it agreed to pay a $4.3B fine to U.S. authorities in November 2023 and pledged to strengthen its compliance by working more closely with regulators.
- The $4.3B fine, one of the largest corporate penalties in U.S. history, has settled U.S. regulators' money laundering, unlicensed money-transmitting business operations, and sanction violation charges against Binance.
- At the time, Binance's co-founder, Changpeng Zhao (CZ), also agreed to step down as Binance CEO after pleading guilty to violating anti-money laundering requirements and sanctions in the U.S. by allowing terrorist groups to make crypto transactions on Binance.
- Besides, under a plea deal, the former CEO was ordered to pay a separate $50M penalty and blocked from engaging in Binance's management for three years.
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| 4 | | Seychelles-based crypto exchange OKX has announced that it ended its support for Tether (USDT) trading pairs in the European Economic Area (EEA), which covers the 27 member states of the European Union (EU) along with Iceland, Norway, and Liechtenstein. The announcement was made through an email sent to the traders residing in the region. More: - A customer support representative said USDT trading pairs became unavailable to traders in the EEA as of March 14.
- In the email, the exchange cited regulatory requirements while explaining its decision.
- The move came ahead of the EU's region-wide crypto regulations, Markets in Crypto Assets (MiCA).
- The law's provisions related to stablecoins will come into effect as of July 2024 in all 27 member states of the EU, while other aspects regarding the crypto asset service providers will enter into force as of January 2025.
- The new legislation will restrict the use of certain stablecoins in the bloc.
- However, OKX did not explicitly attribute its decision to the upcoming regulations.
Zoom Out: - The MiCA was approved by the European Parliament (EP), the legislative body of the EU, with a final vote in April 2023 after three years of development.
- USDT is currently the largest stablecoin with its $103B market cap.
- Stablecoins, whose value is pegged to another reference asset like a fiat currency, are generally used by customers to trade with different cryptocurrencies without converting funds back into fiat currencies.
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| 5 | | Self-custody software crypto wallet MetaMask has partnered with CoinLedger, a crypto tax reporting software provider, to make tax reporting easier for crypto traders. The partnership will allow MetaMask users to upload their transaction history into CoinLedger in a single click by connecting their accounts. More: - The collaboration aims to reduce the burden of gathering, transferring, and combining crypto transaction records from various accounts or wallets for tax purposes.
- The partnership has mainly integrated MetaMask's Portfolio offering with CoinLedger.
- MetaMask Portfolio offers users a dashboard that gathers all their assets and activities in one window, aggregating their portfolio across multiple accounts and blockchain networks.
- As part of the partnership, users who synchronize their portfolio with CoinLedger will be able to generate tax forms automatically.
- CoinLedger's co-founder and CEO, David Kemmerer, said they will make the crypto ecosystem more accessible to everyone by reducing the difficulties associated with calculating and reporting taxes.
Zoom Out: - MetaMask's self-custody wallets let users manage their private keys, which are the passwords used to access crypto assets, providing complete control of their assets and reducing personal financial risks from a potential collapse.
- The firm's solutions currently have more than 30 million monthly active users.
- The platform has partnered with many other leading firms and platforms, including Mastercard, Robinhood, and Revolut, over the past few months to make its services more accessible and interoperable.
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| 6 | | Starbucks, the largest coffee chain, has announced that it would shut down the beta testing platform of its NFT rewards program, Odyssey, as of March 31. The company said it continues evolving the program, though it did not specify whether the program will turn back with NFT support. More: - The Starbucks Odyssey program allowed members to participate in entertaining and interactive coffee-themed activities called Journeys.
- Once they completed the quests, members earned points and stamps in the form of Polygon-based NFTs that unlock access to new benefits and coffee experiences.
- The platform's Journeys will remain available until March 25.
- However, Odyssey's server on Discord will shut down as soon as Monday.
- The NFT stamps will be accessible on the NFT platform Nifty Gateway, the technical partner of Starbucks on the initiative, as the Odyssey marketplace, where users trade their stamps, shut down and is integrated into Nifty Gateway.
- Besides, the holders will be able to transfer their NFT stamps to external wallets and trade them on other marketplaces.
Zoom Out: - Starbucks first announced its Odyssey loyalty program in partnership with the Polygon blockchain network and Nifty Gateway in September 2022.
- The program's beta testing was launched in December 2022 and remained in closed beta without being expanded to a large number of users.
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- Binance, the largest crypto exchange by trading volume, has announced that it will offer rewards of $100,000 to $5M for those reporting potential insider trading cases or corruption within the exchange.
- El Salvador President Nayib Bukele has stated that the country will continue buying one Bitcoin (BTC) daily until the leading cryptocurrency becomes unaffordable with fiat currencies.
- The U.S.-based crypto mining firm Marathon Digital has reached a deal with Applied Digital to purchase its 200-megawatt (MW) facility in Texas for $87.3M.
- 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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