This week in the world of cryptocurrency, former FTX CEO Sam Bankman-Fried received a 25-year prison sentence, Fidelity filed for an Ether ETF with staking options, and Coinbase faced a legal setback in its ongoing battle with the SEC. Here are the key takeaways from this eventful week in crypto.
Key Takeaways
- Sam Bankman-Fried Sentenced: Former FTX CEO Sam Bankman-Fried was sentenced to 25 years in prison for multiple felony charges, including witness tampering and perjury.
- Fidelity’s ETH ETF: Fidelity filed an S-1 application with the SEC to create a spot Ether ETF, which includes staking options.
- Coinbase’s Legal Setback: A U.S. court denied Coinbase’s motion to dismiss the SEC’s lawsuit, allowing the case to proceed.
- Ripple’s Legal Battle: The SEC is seeking a $2 billion penalty against Ripple Labs for alleged unregistered securities sales.
- QuadrigaCX Assets Seized: Canadian authorities seized assets linked to the co-founder of the now-defunct QuadrigaCX exchange.
Sam Bankman-Fried Sentenced to 25 Years in Prison
Former FTX CEO Sam Bankman-Fried will serve 25 years in prison following a sentencing hearing in federal court. On March 28, Judge Lewis Kaplan of the United States District Court for the Southern District of New York sentenced Bankman-Fried to 240 months and 60 months for his conviction on seven felony charges. Judge Kaplan found that SBF also committed witness tampering and perjury based on his testimony at trial over FTX user funds. SBF was the first person tied to FTX and Alameda Research to face prison time.
Fidelity Files for Spot ETH ETF with Staking
Fidelity filed an S-1 application with the United States Securities and Exchange Commission (SEC) on March 27 to create a spot Ether exchange-traded fund (ETF). The ETF will give Fidelity the option to stake part of the ETH it holds. Fidelity Digital Asset Services, affiliated with sponsor FD Funds Management, would serve as custodian of the trust’s ETH. The SEC has pushed back the approval deadline for other ETH ETFs to May 23, with eight applicants awaiting a decision.
SEC Can Proceed with Coinbase Lawsuit
A United States court has denied Coinbase’s motion to dismiss the SEC’s case against the exchange. The decision, made by U.S. District Judge Katherine Failla, allows the commission to pursue its lawsuit against Coinbase. The SEC sued Coinbase in June 2023, alleging the crypto exchange violated federal securities laws by listing 13 tokens it claimed were securities. Coinbase was seeking an order to drop the case, questioning the SEC’s authority over crypto exchanges.
SEC Seeks $2 Billion Penalty Against Ripple
Ripple Labs chief legal officer Stuart Alderoty said the U.S. SEC asked a federal judge for a $2-billion penalty against the blockchain firm. Filed by the SEC in December 2020, the lawsuit against Ripple, its CEO Brad Garlinghouse, and co-founder Chris Larsen alleged the firm raised $1.3 billion in unregistered securities through sales of XRP tokens. Alderoty claimed the regulator “trades in statements that are false, mischaracterized, and designed to mislead.” Ripple plans to file a response to the SEC request in April.
QuadrigaCX Assets Seized
The director of civil forfeiture in the Canadian province of British Columbia has made an unexplained wealth order to confiscate cash, 45 gold bars, and luxury items found in a safe deposit box linked to a co-founder of the QuadrigaCX cryptocurrency exchange. According to documents submitted to the British Columbia Supreme Court, the assets are allegedly the proceeds of criminal activities. QuadrigaCX became insolvent in February 2019, shortly after its co-founder, Gerald Cotten, died in India, taking the private keys to QuadrigaCX’s offline storage systems to the grave.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $69,437, Ether (ETH) at $3,482, and XRP at $0.62. The total market cap is at $2.62 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are:
- Core (CORE) at 105.58%
- Dogwifhat (WIF) at 80.50%
- Bitcoin Cash (BCH) at 48.69%
The top three altcoin losers of the week are:
- KuCoin Token (KCS) at -20.67%
- Fantom (FTM) at -14.00%
- Bittensor (TAO) at -11.27%
Memorable Quotations
“When not lying, [Sam Bankman-Fried] was evasive, hair splitting, trying to get the prosecutors to rephrase questions for him. I’ve been doing this job for close to 30 years. I’ve never seen a performance like that.”
— Lewis Kaplan, senior judge of the U.S. District Court for the Southern District of New York
“Yes, over time, we continue to see greater adoption of nonprofits accepting cryptocurrency donations. The market has become too big to ignore.”
— Alex Wilson, co-founder of The Giving Block
“I’m very bullish on the long-term viability of Bitcoin.”
— Larry Fink, CEO of BlackRock
“Demand for Bitcoin is fast outstripping the new supply, and this is something we’ve never really had in previous cycles.”
— Simon Peters, market analyst at eToro
“Ripple is well-positioned to pay a significant civil penalty.”
— The U.S. Securities and Exchange Commission
“The [spot Ether ETF] case is just as strong as it was for spot #Bitcoin ETFs.”
— Craig Salm, chief legal officer at Grayscale
Prediction of the Week
Bitcoin is gearing up for a ‘massive’ short squeeze, with its price potentially going ‘vertical.’ As Bitcoin hovers around the $70,000 mark, there’s speculation that short-sellers are feeling the pressure due to diminishing downtrends and quicker-moving uptrends. This could drive Bitcoin’s price to $80,000, according to an analyst.
“This is a textbook sign that shorts are being squeezed as we hit fresh all-time high territory,” trading resource The Kobeissi Letter stated in a March 26 X post.
The Kobeissi Letter explained that the main factor for the BTC short squeeze is the margin between institutional long positions and hedge fund short positions is “at a record high.” If Bitcoin’s price reaches $71,000, $156.18 million in short positions will be liquidated, per CoinGlass data. A climb to $75,000 will liquidate $3.85 billion in short positions.
FUD of the Week
US Justice Department Charges KuCoin and Founders
U.S. Department of Justice (DOJ) officials unsealed an indictment against crypto exchange KuCoin and two of its founders for “conspiring to operate an unlicensed money transmitting business” and violations of the Bank Secrecy Act. The DOJ criminal charges were announced in parallel to a civil enforcement case from the U.S. Commodity Futures Trading Commission (CFTC), which charged KuCoin “with multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations” on March 26. According to the DOJ, KuCoin received more than $5 billion and sent more than $4 billion of “suspicious and criminal funds.”
Munchables Hacker Returns $62.8M Ether Without Ransom
Ethereum-based nonfungible token game Munchables reported a hack on March 26 that drained over 17,400 ETH from the GameFi app. Pseudonymous blockchain investigator ZachXBT claimed the exploit stemmed from the Munchables team hiring a North Korean developer known by the alias “Werewolves0943.” Nearly eight hours later, the hacker returned $62.8 million worth of Ether stolen without demanding a ransom.
US Lawmakers Demand SEC Clarify Position on Prometheum’s Plans for Ether
U.S. lawmakers, including House Financial Services Committee Chair Patrick McHenry and Vice Chair French Hill, are urging SEC Chair Gary Gensler to address crypto firm Prometheum’s intention to offer institutional custody services for Ether. According to lawmakers, the announcement is at odds with the Commodity Futures Trading Commission’s (CFTC) stance on recognizing ETH as a “non-security digital asset” under its purview.
Top Magazine Pieces of the Week
- 5 dangers to beware when apeing into Solana memecoins: Inept developers, presale teams running off with the funds, rug pulls, and sentiment collapsing are just some of the dangers of memecoins.
- Creating ‘good’ AGI that won’t kill us all: Crypto’s Artificial Superintelligence Alliance: SingularityNET and the Artificial Superintelligence Alliance aim to wrest control of AGI away from Big Tech.
- ‘SEAL 911’ team of white hats formed to fight crypto hacks in real time: If you have a problem, if no one else can help, and if you can find them. Maybe you can hire, the SEAL team of white hat hackers.
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