Caroline Ellison, the former CEO of Alameda Research, testified for over 10 hours this week at Sam Bankman-Fried’s trial, providing more insight into the events leading up to the FTX debacle in November 2022. According to Ellison’s testimony, she had planned to leave Alameda months before the collapse but was concerned about a bank run on FTX due to the downturn in the crypto market.
During the trial, a recording was presented as evidence, capturing the exact moment when Ellison informed employees about Alameda’s use of FTX customer deposits. These revelations, along with testimony from BlockFi CEO Zac Prince, were key moments in Bankman-Fried’s trial.
Evidence presented in court also revealed that Bankman-Fried had been “freaking out” about various issues before the collapse, including buying shares in Snapchat, raising capital from Saudi royalty, and getting regulators to crack down on Binance, a rival crypto exchange. Bankman-Fried believed that Binance had leaked an Alameda balance sheet to the media in 2022, leading to a negative PR campaign against Alameda.
In other news, the United States Securities and Exchange Commission (SEC) reportedly has no plans to appeal a recent court decision that favored Grayscale Investments. The ruling requires the SEC to review Grayscale’s spot Bitcoin exchange-traded fund (ETF) application. This decision does not guarantee approval for Grayscale’s application, but it does mean that the SEC must follow the court’s order and review the application.
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Terraform Labs has once again accused market maker Citadel Securities of being involved in a deliberate effort to cause the collapse of its TerraUSD stablecoin in 2022. Terraform Labs has filed a motion to compel Citadel Securities to produce documents relating to its trading activity during the time of the stablecoin’s depegging. Citadel Securities has denied trading the TerraUSD stablecoin during that period.
Mastercard has announced the successful completion of a trial involving wrapping central bank digital currencies (CBDCs) on different blockchains. This trial, conducted with the Reserve Bank of Australia and the country’s Digital Finance Cooperative Research Centre CBDC, allowed a CBDC owner to purchase a nonfungible token (NFT) listed on Ethereum using a wrapped CBDC.
In the cryptocurrency market, Bitcoin (BTC) is trading at $26,892, Ether (ETH) at $1,551, and XRP at $0.48. The total market cap is at $1.05 trillion. The top three altcoin gainers of the week are Loom Network (LOOM) at 86.71%, Trust Wallet Token (TWT) at 16.72%, and Tether Gold (XAUt) at 5.16%. The top three altcoin losers of the week are Mantle (MNT) at -17.27%, Rocket Pool (RPL) at -14.39%, and Avalanche (AVAX) at -13.39%.
In terms of quotes, Grace Sabandar, co-founder of the Indonesia Blockchain and Metaverse Center, emphasized the importance of educating people about the benefits of blockchain technology. The European Securities and Markets Authority stated that crypto-assets, including decentralized finance (DeFi), do not pose significant risks to financial stability at this point. Caroline Ellison expressed her concerns about customer withdrawals from FTX and the potential harm it could cause to people if they found out about Alameda using FTX funds.
In other news, the price of Ether has dropped to a 15-month low against Bitcoin, trading at 0.056 BTC. This drop has raised downside risks for the ETH/BTC pair, and if the price continues to decline, the next target could be around 0.051 BTC in 2023. Conversely, if ETH price rebounds and reclaims the 200-week exponential moving average (200-week EMA) as support, it may rise toward its 50-week EMA near 0.065 BTC.
In the realm of NFTs, questions were raised when one of the CrypToadz NFTs was purchased for 1,055 wrapped Ether, equivalent to $1.6 million. This raised concerns about possible money laundering or a mistake in the transaction. The stablecoin USDR lost its peg to the US dollar after a rush of redemptions caused a draining of liquid assets from its treasury. The Tangible protocol, which issued USDR, suffered a complete loss on investment when a trader exchanged 131,350 USDR for 0 USD Coin. Huobi Global’s crypto exchange HTX confirmed the return of funds stolen by a hacker and issued a 250 Ether bounty after resolving the issue.
Finally, zero-knowledge proofs, an emerging cryptographic technology, could potentially address the needs for privacy and truth in various industries, including voting and finance. This technology provides a way to validate information without revealing the underlying data, offering a balance between privacy and transparency.
Overall, this week featured significant developments in the ongoing trial of Sam Bankman-Fried, as well as news about regulatory decisions, stablecoin issues, and advancements in blockchain technology.
