Opening arguments began in the trial of former FTX CEO Sam “SBF” Bankman-Fried on October 4 in New York. The trial comes after jury selection took place the previous day. Assistant United States Attorney Thane Rehn accused SBF of using FTX customer funds for personal gain and to gain favor with politicians through donations. Rehn stated that SBF committed fraud and that evidence presented in the trial would support this claim. SBF’s attorney, Mark Cohen, placed some of the blame for FTX’s downfall on former Alameda Research CEO Caroline Ellison and Binance CEO Changpeng Zhao.
Alex Mashinsky, the former CEO of crypto lender Celsius, is set to go on trial for charges of fraud and market manipulation in September 2024. Mashinsky was released on $40 million bail and will face travel and financial restrictions until his trial. Celsius filed for bankruptcy in July 2022, and Mashinsky was arrested in July of this year. He is accused of defrauding investors out of billions of dollars. The United States Commodity Futures Trading Commission, Securities and Exchange Commission, and Federal Trade Commission all have active lawsuits against Mashinsky. Former Celsius chief revenue officer Roni Cohen-Pavon pleaded guilty to four criminal charges in September.
Binance, the popular cryptocurrency exchange, has seen its market share decline for the seventh consecutive month. According to an analysis by CCData reported by Bloomberg, Binance’s share of the spot market fell from 38.5% in August to 34.3% in September. In the derivatives market, its share dropped from 53.5% to 51.5% during the same period. Analysts attribute Binance’s decline to ongoing regulatory struggles in the United States, the end of its zero-fee trading promotion, and its withdrawal from the Russian market.
A report from blockchain data analyst Nansen reveals that FTX transferred $4.1 billion worth of its native FTT tokens to Alameda Research between September 28 and November 1, 2022. Nansen suggests that this movement of tokens was aimed at propping up the balance sheets of both companies. FTX also transferred $388 million in stablecoin to Alameda Research during the same period. The report indicates that Alameda Research would not have been able to go through with its offer to buy out Binance CEO Changpeng Zhao’s FTT holdings. FTX filed for bankruptcy shortly after.
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Asset management firm Valkyrie has backtracked on its plans to purchase Ether (ETH) in advance of receiving approval for its exchange-traded fund (ETF). In a filing with the U.S. Securities and Exchange Commission, Valkyrie stated that it would not proceed with the purchase and would sell the ETH futures it had already bought. Valkyrie is among several financial firms expected to offer ETH futures ETFs soon, but decisions on these have been delayed, possibly due to concerns about a U.S. government shutdown.
In the cryptocurrency market, Bitcoin (BTC) is valued at $27,880, while Ether (ETH) is at $1,640 and XRP at $0.52. The total market cap is at $1.07 trillion. The top three altcoin gainers of the week are Trust Wallet Token (TWT), Avalanche (AVAX), and Render (RNDR), with gains ranging from 17.5% to 18.11%. The top three altcoin losers of the week are ApeCoin (APE), THORChain (RUNE), and Curve DAO Token (CRV), with losses ranging from -8.8% to -9.5%.
BitMEX founder Arthur Hayes predicts that the surge in bond yields will lead to “mass liquidity injections” in the near future, which will provide the next catalyst for the crypto bull market. Hayes believes that as long-term interest rates outpace short-term interest rates, the financial markets will experience significant challenges, leading to the need for money printing to save government bond markets. This, in turn, will drive the crypto bull market.
A report from blockchain security platform Immunefi reveals that crypto hacks and scams increased by over 153% in the third quarter of 2023 compared to the same period in the previous year. During this quarter, over $680 million worth of crypto was lost due to scams and hacks. The largest hack of the quarter targeted the Mixin protocol, resulting in the loss of over $200 million.
Technical analysts warn that Bitcoin may be headed for a fall to $20,000. They point to a classic “head and shoulders” pattern in the current chart, which typically indicates a price decline. According to pseudonymous trader CryptoBullet, the bottom of the left shoulder of this pattern aligns with the $20,000 mark.
Overall, this week saw the beginning of the trial of former FTX CEO Sam Bankman-Fried, the scheduled trial of Alex Mashinsky in 2024, a decline in Binance’s market share, revelations about FTX’s movement of tokens to Alameda Research, Valkyrie’s decision to backtrack on Ether purchases, and predictions of a Bitcoin price crash.
