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18-May-24
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Trader makes millions after PEPE price soars, a new gas model for Ethereum, and Tornado Cash developer convicted.
A savvy trader made $46 million in profit, which is an eye-watering 15,718-fold return on his initial $3,000 investment. The unknown wallet bought 4.9 trillion PEPE for $3,000 on April 15, which is currently worth over $56 million. The trader sold 1.41 trillion PEPE for $7.4 million and is currently sitting on 3.5 trillion PEPE, worth $38.9 million, according to a May 15 X post from Lookonchain. PEPEs market capitalization was around $4.5 billion on May 15, making it the third-largest memecoin behind Dogecoin (DOGE) and Shiba Inu (SHIB).
Ethereum co-founder Vitalik Buterin has proposed Ethereum improvement protocol, EIP-7706, which introduces a new gas model for transaction call data. This new fee would be separate from the existing gas fees for transaction execution and data storage. The proposal aims to reduce costs for transactions that are data-heavy but not computationally intensive by setting separate charges for call data, distinct from the costs of executing contract code or storing data in blobs. If the proposal is accepted, the Ethereum network will be responsible for setting the call data costs independently of other costs.
Alexey Pertsev, the developer of the cryptocurrency mixing protocol Tornado Cash, has been found guilty of money laundering, raising potentially severe implications for open-source code developers. The developer was sentenced to five years and four months in prison for allegedly laundering $1.2 billion worth of illicit assets on the platform. The sentencing came despite Tornado Cash being a noncustodial crypto mixing protocol meaning that the funds that go through the protocol are never held or controlled by it.
The Redmond company could be fined as much as 1% of its annual revenue if it doesn’t respond by May 27.
Microsoft faces a fine in the European Union of up to 1% of its annual revenue if it doesn’t respond to a request for information by May 27.
The threat stems from a request made under the E.U.’s Digital Services Act concerning the company’s Bing search engine and its associated generative artificial intelligence services.
A post on X.com compelling Microsoft to “provide information under the Digital Services Act on generative AI risks on Bing” was sent on May 17 disclosing the news to the public.
Geoffrey Hinton also warns that advanced AI could pose an existential threat within the next five to twenty years.
Geoffrey Hinton, a world-renowned artificial intelligence (AI) expert often referred to as the “Godfather of AI,” recently consulted with members of the United Kingdom’s government at Downing Street where he advised lawmakers to consider adopting a universal basic income (UBI) to deal with the impending threat of job loss.
Until recently, Hinton worked for Google developing high-level AI features for neural networks — the underlying technology that powers most modern generative AI systems such as Google’s Gemini and OpenAI’s ChatGPT.
According to Hinton, the AI revolution will mostly benefit the rich. Laypersons, blue collar workers, and those employed in jobs that can be automated stand to lose their means of income and “that’s going to be bad for society” he recently told the BBC in an interview.
Initially, the team identified over two million addresses as potential sybils but later refined their criteria to minimize false identifications, resulting in a more precise classification.
LayerZero Labs has officially announced that the sybil self-reporting phase of its solution to address sybil activity, or “airdrop farming,” is over.
According to LayerZero, addresses that meet the criteria will receive 15% of their anticipated token allocation, while the remaining 85% will be redistributed to eligible users. Following the review, a total of 803,093 addresses were identified as potential sybil addresses, which will not receive the total token allocation.
Initially, the team identified over two million addresses as potential sybils but later refined their criteria to minimize false identifications, resulting in a more precise classification.
XRP whale accumulation and cooling inflation in the U.S. are the top catalysts behind the cryptocurrency's ongoing price recovery.
The price of XRP (XRP) is up today, rising over 2% in the last 24 hours to reach $0.525. In doing so, the cryptocurrency is now up around 25% from its local low of $0.423, established a month ago.
Primary catalysts driving the XRP price upward today include a broader recovery sentiment across the crypto market and whale accumulation.
XRP's gains today are part of a rebound that started after the U.S. Consumer Price Index (CPI) reported a cooling inflation on May 15.
The Ethereum burn address is a null address where ETH and other Ethereum-based tokens are sent to be permanently removed from circulation.
The Ethereum burn address is a unique element within the Ethereum blockchain, specifically designed to permanently remove Ether tokens from circulation.
The Ethereum burn address is represented by the address 0x0000000000000000000000000000000000000000. The fundamental concept behind a burn address is the intentional destruction of tokens.
Following the recent resignations, OpenAI has opted to dissolve its “Superalignment” team and integrate its functions into other research projects within the organization.
The entire OpenAI team focused on the existential dangers of AI have either resigned or been reportedly absorbed into other research groups within the company.
Days after Ilya Sutskever, OpenAI’s chief scientist and one of the company’s co-founders, announced his departure, Jan Leike, the former DeepMind researcher who was OpenAI’s superalignment team’s other co-lead, posted on X that he had also resigned.
According to Leike, his departure from the company was due to his worries about its priorities, which he thinks are more focused on product development than AI safety.
The scammers convinced victims to transfer millions of dollars into U.S. bank accounts, which were then used to launder the illicit funds.
United States authorities arrested two individuals accused of masterminding a money laundering scheme. The scheme involved funneling over $73 million through U.S. financial institutions and ultimately converting the funds into Tether’s USDT token.
The U.S. Justice Department announced on Friday, May 17, that Daren Li was arrested at Atlanta’s airport in the U.S. state of Georgia on April 12, and Yicheng Zhang was arrested in Los Angeles on Thursday, May 16. An indictment charging the pair was unsealed in a California court on May 16, revealing their alleged roles in the scheme.
Li, Zhang, and their cohorts allegedly ran a transnational criminal network that laundered millions from "pig butchering” crypto scams, where fraudsters gain victims’ trust, convince them to invest large sums, and then disappear with the funds.
According to Judge Lane, any available funds for distribution by Genesis are being exhausted by creditor claims, which take priority over DCG’s equity stake.
Bankrupt cryptocurrency lender Genesis Global has secured court approval to return about $3 billion in cash and cryptocurrency to its creditors. This decision leaves its parent company, Digital Currency Group (DCG), with no recovery from the bankruptcy.
Judge Sean Lane approved Genesis’s Chapter 11 repayment plan on Friday, May 17. The ruling clears the path for Genesis to unfreeze and return customer assets that have been locked up since the company halted withdrawals in November 2022 following the collapse of several major cryptocurrency firms.
However, Lane overruled an objection raised by DCG, which argued that Genesis should pay its customers and creditors no more than the value of the crypto assets in January 2023, when Genesis filed for bankruptcy. The price of Bitcoin (BTC) has increased significantly since then, from around $24,000 at the time to over $66,700 on May 17.
Coinbase institutional research analyst David Han believes “there is room for surprise to the upside on this decision.”
Despite unfavorable odds from several crypto analysts and the broader crypto community regarding the approval of spot Ether exchange-traded funds (ETF) by the United States Securities and Exchange Commission (SEC), some analysts suggest that “there is room for surprise.”
“If by some chance the SEC decides to approve then so many will be caught severely offside,” crypto trader Matthew Hyland told his 142,000 X followers in a May 17 post.
“If 90% of people think the ETH ETF will be denied, and the majority of those people think it will lead to a crypto crash then who will actually be selling?” he added before declaring that the expectation of denial is “priced in.” At the time of publication, Ether (ETH) is trading at $3,102, as per CoinMarketCap data.
The Australian Securities and Exchange Commission claims that John Louis Anthony Bigatton promoted the crypto lending platform at four seminars and via two social media posts.
An Australian man has pleaded guilty to his involvement in promoting cryptocurrency lending services for the now-defunct crypto exchange BitConnect — an infamous entity that allegedly ran as a Ponzi scheme and shut down in 2018 amid accusations of defrauding victims of more than $2.4 billion.
“Mr. Bigatton provided financial product advice without holding an Australian Financial Services license or authorization to provide financial services about the lending platform,” the Australian Securities and Exchange Commission (ASIC) declared in a May 17 statement.
ASIC alleged that in his role as BitConnect’s national promoter, John Louis Anthony Bigatton offered financial product advice on six occasions at different locations across Australia, at four seminars, and through two social media posts.
The U.S. Congress bipartisan vote has overwhelmingly demonstrated its rejection of the SEC’s SAB 121. President Biden threatened to veto the overruling. Will the executive branch overthrow Congress’s decision?
On May 16, 2024, a majority of lawmakers in the United States Senate passed a Congressional Review Act (CRA) to review the Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 121 (SAB 121).
U.S. Senators passed H.J.Res. 109 with 60 to 38 votes, an exceptional rate for the U.S. Congress.
In addition to the outstanding support for H.J.Res. 109, the vote was highly bipartisan, 51-49 in favor of Democrats. According to Senator Cynthia Lummis, the vote represented a new milestone as it was the first time that a session of Congress passed a “standalone crypto legislation.”
The United States Department of Justice alleges Thomas John Sfraga convinced a victim to invest in a “fictitious” cryptocurrency” wallet after promising significant gains.
Cryptocurrency personality Thomas John Sfraga has pleaded guilty to wire fraud after allegedly deceiving more than a dozen victims into investing in nonexistent ventures, including fraudulent cryptocurrency schemes.
“Sfraga convinced a victim to invest in a fictitious cryptocurrency “virtual wallet,” the United States Department of Justice (DOJ) declared in a May 17 statement. The agency further explained that Sfraga has experience in podcasting and the crypto industry, including acting as the host of crypto events in New York.
“He promised the victims returns on their investments as high as 60% in three months,” the DOJ added. However, it appears he was operating a Ponzi scheme, where the returns paid to earlier investors came not from legitimate profits but from the investments of new participants.
On April 30, a judge sentenced the former Binance CEO to four months in federal prison but did not set a reporting date at his hearing.
The former CEO of cryptocurrency exchange Binance, Changpeng “CZ” Zhao, has suggested he plans to “write something” during his upcoming four-month incarceration.
At an April 30 hearing, Judge Richard Jones sentenced Zhao to four months in prison. The former Binance CEO pleaded guilty to one felony charge for failing to maintain an effective Anti-Money Laundering program at the exchange. Zhao is expected to report to either the Camp at the Federal Correctional Institution Sheridan in Oregon or the Federal Detention Center SeaTac in Washington at a date that had not been determined at the time of publication.
Before and after the sentencing hearing, CZ remained active on social media, hinting at his plans on X. The former Binance CEO launched a youth-focused crypto and blockchain education program called Giggle Academy. He also reached out to his 8.9 million X followers, hinting at suggestions on how to pass the time in prison.
Project DESFT is meant to encourage trade between small businesses using a CBDC and a stablecoin, emphasizing credentialing.
The Bank of Ghana (BOG) and the Monetary Authority of Singapore (MAS) have completed a proof-of-concept for the Digital Economy Semi-Fungible Token (DESFT) Project, according to various local press reports. The project is intended to encourage trade between micro, small and medium enterprises (MSMEs) in the two countries.
Within the project, live transactions have been carried out between the sides. To do so, they leveraged the Universal Trusted Credentials semi-fungible token protocol developed by the United Nations Development Program, according to Singapore-based Ample FinTech, which identified itself as the developer of the DESFT. The token contained verified licenses, certificates and trade records.
A stablecoin pegged to the Singapore dollar (XSGD) and the BOG’s e-cedi central bank digital currency (CBDC) were used for exchange within a Purpose Bound Money protocol on a distributed ledger.
The team behind the Bitcoin layer-2 developer has successfully frozen some exploited crypto after the attacker tried to cash out by sending funds to exchanges.
Bitcoin layer-2 developer Alex Labs has successfully frozen more than $3.9 million worth of crypto that was exploited from its BNB Smart Chain bridge, according to the team’s May 16 social media post. According to the post, the attacker sent the funds to several different centralized exchanges (CEXs), which allowed them to be frozen with the cooperation of the exchanges.
The team said it recovered the complete balances for 17 different tokens, including “all aBTC, sUSDT, xBTC, xUSD, ALEX, atALEX, LiSTX, LUNR, SKO, CHAX, $B20, ORDG, ORMM, ORNJ, TRIO, TX20 and STXS.”
$13.7 million worth of Stacks (STX) tokens were also exploited. Of these, the attacker made the mistake of sending “about 3 million” to centralized exchanges. The post links to a spreadsheet showing the STX balances at each exchange the hacker used to transfer funds. It shows that a total of $3.7 million is held at exchanges, whereas $9.6 million are held in wallets under the direct control of the attacker.
This week’s Crypto Biz features Galaxy Digital and CoinShares earning results, Franklin Templeton’s CEO betting on blockchain, Polymarket’s funding raise, and a leadership transition at dYdX.
Spot Bitcoin exchange-traded fund (ETF) managers have released their first financial results since the crypto funds began trading.
Galaxy Digital’s net income rose 40% in the first quarter, with management and performance fees reaching $17.8 million — a 113% increase from the previous quarter.
CoinShares, which recently completed the acquisition of Valkyrie’s spot Bitcoin (BTC) ETF, posted a 216% revenue gain in Q1 to 19.5 million British pounds ($24.5 million).
The investment figures come alongside a record high 2.9 million daily unique active wallets (dUAW) for the month.
Blockchain gaming saw investments totaling $988 million in the month of April, the highest since January 2021. The number of daily unique active wallets also reached a record-setting 2.9 million for blockchain gaming.
DappRadar, in partnership with the Blockchain Gaming Alliance, released its April blockchain gaming report on 17 May. The banner month for the sector accompanies similar trends in the overall decentralized applications (Dapp) market.
According to the report, the recent boon can be attributed to several factors including renewed consumer interest in digital assets within the context of gaming:
ETH price hit $3,100, backed by a favorable court ruling and increased network activity.
Ether (ETH) price rose by 5.5% on May 17, nearing $3,100 for the first time in 10 days. Analysts attributed this rally to a decrease in demand for fixed-income instruments following stagnant United States retail sales data in April. This data increased the market’s expectation of a potential interest rate cut by the U.S. Federal Reserve to boost the economy.
Expansionary measures by the central bank are typically seen as bullish for risk-on markets, whether due to an increased monetary supply or reduced credit costs for businesses and individuals. Investors sought exposure to scarce assets, including cryptocurrencies, leading to gold reaching $2,410, just 0.8% below its all-time high.
Ether’s surge was also driven by a U.S. Department of Justice indictment unsealed on May 15. The indictment accused two individuals of wire fraud and money laundering by manipulating the Ethereum blockchain. The document stated that “Ethereum is a decentralized blockchain […] without the need for a trusted intermediary” and added, “No central actor runs the Ethereum Network.”
Need to know what happened in crypto today? Here is the latest news on daily trends and events impacting Bitcoin price, blockchain, DeFi, NFTs, Web3 and crypto regulation.
Crypto exchange Kraken is reportedly considering dropping support for Tether (USDT) in Europe. More than 80% of the tokens listed on crypto exchange Binance over the past six months have fallen in value compared to their listing price. Meanwhile, Solana memecoin tool pump.fun says an ex-worker.
United States crypto exchange Kraken is considering removing support for the USDT stablecoin in the European Union ahead of the implementation of the Markets in Crypto-Assets Regulation (MiCA).
As Bloomberg reported, Kraken is “actively reviewing” plans to comply with MiCA. Kraken’s global head of regulatory strategy, Marcus Hughes, told Bloomberg that many options are on the table, not just limiting activity related to Tether.
The Tornado Cash developer has been detained in the Netherlands since August 2022 after the United States government blacklisted Tornado Cash.
Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week.
The past week in DeFi saw the guilty verdict of the Tornado Cash developer for money laundering. Alexey Pertsev was sentenced to over five years in prison.
In other news, Binance found an antidote to the infamous address poisoning scam, Polymarket raised $70 million, attracting investment from Vitalik Buterin and Peter Thiel, and DeFi faces a challenging future in the European Union.
The Treasury’s fight against illicit finance will focus on better regulations, greater enforcement and AI.
The United States Treasury Department has released its biannual National Strategy for Combatting Terrorist and Other Illicit Financing. It contains four priority recommendations that may affect virtual assets in a variety of ways.
The Treasury strategy acknowledged that law enforcement is scrambling to keep up with developing financial technology. The first two Treasury priorities are to address regulatory gaps in Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) and create a more focused and effective supervisory framework. The Treasury said it would “assess the need for additional action on sectors not subject to comprehensive AML/CFT measures.”
Increasing enforcement is also on the agenda. The strategy said:
Bitcoin price aims to break its range resistance and hit a new all-time high. Will altcoins follow?
The bears' failure to sink and sustain Bitcoin (BTC) below the psychological level of $60,000 seems to have attracted buyers who are trying to propel the price toward the range resistance. The current upmove does not guarantee a breakout from the range but reduces the possibility of a sharp correction in the near term.
Bitcoin’s recovery has boosted the daily volume in United States spot Bitcoin exchange-traded funds. Market research firm Santiment said in a X post that the volume of the seven largest U.S. spot Bitcoin ETFs surged to $5.65 billion, the highest since March 24.
Bitcoin ETFs have been a massive success, with 937 professional firms investing in them as of March 31, according to a X post by K33 Research senior analyst Ventle Lunde. The post added that professional investors acquired $11.06 billion of spot Bitcoin ETFs, amounting to 18.7% of the total assets under management.
An April report revealed that Proton Mail assisted Spanish police with locating one of its users, leading to questions about its guarantees of privacy.
Proton AG — the Swiss company behind Proton Mail, the popular encrypted email service — came under fire in April for complying with a request from Spanish police for information about one of its users — a Catalan pro-independence activist.
It’s obvious why that was a controversial move. It feels gross when the “good guys” get “sold out” by a company that promises privacy. But if you’re pissed off at Proton for complying with legal requests, you need to reassess your fantasies about privacy tech.
We all love encryption and its attached ideals. But encryption isn’t a panacea, and the more we encrypt, the more metadata matters. When it comes to privacy, metadata is an exercise in minimization — but centralized services have natural limits on how mini they can make their metadata collection.
Bitcoin has flipped its old resistance into support as USDT’s market cap continues to grow rapidly in 2024.
Tether’s USDT (USDT), the world’s largest stablecoin, has minted another $1 billion, bringing its market capitalization above $110 billion, which could catalyze Bitcoin’s (BTC) next move to new all-time highs.
Tether’s treasury has minted $1 billion worth of USDT during the past 24 hours, bringing its yearly total to $31 billion.
The newly minted USDT was a big reason why Bitcoin price climbed from $27,000 to $73,000, according to a May 17 post from Lookonchain:
With new regulations in Europe set to enforce strict limits on transactions and reserve requirements, Kraken is assessing its stablecoin listings.
Crypto exchange Kraken is considering removing support for stablecoin Tether (USDT) in the European Union as the Markets in Crypto-Assets Regulation (MiCA) is set to take effect.
According to a Bloomberg report on May 17, Kraken is “actively reviewing” plans to comply with the upcoming MiCA framework. The regulation will be applied in two phases: rules applicable to stablecoins (asset-referenced, or ARTs, and e-money tokens, or EMTs) will come into force on June 30, 2024, while rules applicable to crypto service providers will take effect on Dec. 30, 2024.
“We’re absolutely planning for all eventualities, including situations where it’s just not tenable to list specific tokens such as USDT,” said Marcus Hughes, Kraken’s global head of regulatory strategy. “It’s something that we’re actively reviewing, and as the position becomes clearer, we can take firm decisions on that.”
Lawmakers expect to vote on a bill clarifying how regulators handle digital assets by June after a majority in both chambers passed a resolution against an SEC crypto rule.
Several cryptocurrency companies and advocacy groups urged United States lawmakers to support legislation clarifying the roles of the country’s financial regulators over digital assets.
In a May 16 letter to the U.S. House of Representatives leadership, roughly 60 firms represented by the Crypto Council for Innovation (CCI) called on lawmakers to pass H.R.4763, or the Financial Innovation and Technology for the 21st Century (FIT21) Act. The bill, passed out of the House Financial Services Committee in July 2023, would clarify how the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) regulate digital assets.
“We recognize that FIT 21 will introduce new compliance challenges for digital assets companies, but regulatory clarity is indisputably more responsible, safer for consumers, and preferable to the status quo,” said the CCI. “Currently, digital assets firms are instructed to somehow comply with U.S. securities laws that were designed nearly 100 years ago without consideration of the technological advances of today, including the ability for transactions to move at the speed of the internet.”
The suit alleges that delays in delivery caused purchased NFTs to lose 97% of their value.
A disgruntled customer has filed a class-action lawsuit against Italian fashion brand Dolce & Gabbana and digital assets platform UNXD after alleged delays in delivering nonfungible token (NFT) products caused the digital assets to lose 97% of their value.
According to a report from Bloomberg, a customer identified as Luke Brown paid $6,000 for “DGFamily NFTs,” a Dolce & Gabbana product combining digital and physical assets as privileges and experiences within the brand’s greater ecosystem.
The NFTs were allegedly delivered over a week late, during which their value plummeted by $5,800. A set of accompanying “outfits” for the NFTs, purportedly meant for display in the metaverse, was further delayed by 11 days after the initial delivery.
Bitcoin is dishing out the bull signals on lower timeframes, but can BTC price action overcome key resistance?
Bitcoin (BTC) kept up the pressure on overhead liquidity on May 17 as analysis eyed a new golden cross on lower timeframes.
Data from Cointelegraph Markets Pro and TradingView showed BTC price action lingering near its highest levels since mid-April.
Liquidity at $67,000 and above remained a force containing upside, this totaling around $75 million at the time of writing, per data from monitoring resource CoinGlass.
Progress has been made in streamlining the Web3 onboarding process, but the flood of mainstream users has not yet arrived.
Web3 has been the subject of speculation for many years now, and predictions about what will spur mass adoption are frequent, as are possible obstacles slowing the onboarding process.
Some, like Web3 gaming execs, have speculated crypto market hype, and several highly anticipated blockchain games could be the key to mass onboarding.
According to a Feb. 22 survey report from key management network Web3Auth, which had 3,378 responses from Web3 users, developers and decision-makers worldwide, respondents think there are still several issues that need ironing out before mass adoption can become a reality.
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