The fallout from last year’s crypto crash continues to dominate the news agenda, with Sam Bankman-Friend and Do Kwon facing US charges. Top cryptocurrency bitcoin hovers around nine-month highs and options markets suggest traders are betting it will go higher. Here’s what you need to know:
1. FTX’s Bankman-Fried Pleads Not Guilty to Campaign Finance, China Alleges Bribery
2. Former CEO of Binance’s US firm has hired a lawyer for US investigations
3. Japan moves closer to issuing digital yen with plans for new panel
Five months have passed since the collapse of the US mega-exchange FTX, but the crypto world is still gripped by the bankruptcy process and the accusations against its founder, Sam Bankman-Fried. Last week, he entered a “not guilty” plea to new charges that he paid $40 million in bribes to Chinese officials and that he conspired to violate campaign finance laws by making more than 300 illegal political donations. Since his arrest in December, he has also pleaded not guilty to eight counts of fraud and conspiracy. The trial is due to start in October.
Speaking of fraud charges, Do Kwon (the man behind last year’s spectacular TerraUSD stablecoin crash) was charged by US prosecutors on Friday with two counts each of securities fraud, wire fraud, commodity fraud and conspiracy. He was arrested at an airport in Montenegro last month after months as a fugitive. Want a reminder of what happened to TerraUSD? Check out Reuters’ coverage from last May here and here.
Meanwhile, Elon Musk asked a US judge to throw out a $258 billion racketeering lawsuit accusing him of running a pyramid scheme to support the cryptocurrency meme “Dogecoin.” The lawsuit was filed by a Dogecoin investor last year, saying Musk boosted Dogecoin’s price by more than 36,000% over two years and then allowed it to crash. Musk’s lawyers argued in a filing on Friday that Musk’s tweets about the coin were “harmless and often stupid” and that there is nothing illegal about tweeting in support of a legitimate cryptocurrency. They rejected claims that Dogecoin is a security.
Dogecoin took off during the retail frenzy and is now the eighth largest cryptocurrency, according to CoinGecko data. Its wild price swings are closely tied to what Musk says or does.
It spiked last February when he tweeted about it and again in October when he sealed his $44 billion Twitter takeover deal. On Monday, as much as $4 billion poured into the token after Twitter’s logo was replaced with the image of a Shiba Uni dog that serves as the coin’s mark.
Crypto Essentials
* Binance withdrawals: Investors pulled $1.6 billion from Binance in the days after it was sued by the CFTC, including $852 million in a 24-hour period, according to Nansen data. That’s more than usual, but less than in December, when investors pulled $3 billion from the exchange due to concerns about Binance’s reserves, Nansen said.
* Ex-Binance exec lawyers up: Catherine Coley launched Binance.US in 2019 and left suddenly in 2021. Now she has hired a former federal prosecutor to represent her in the U.S. government’s investigation into Binance, according to a person with direct knowledge of the matter . Coley has not made any public comments since leaving the company.
* Digital yen: Japan creates a government advisory panel and launches a pilot program to explore the idea of a digital central bank currency. What is a CBDC? Check out the Reuters explanation. Important to note: there is little indication that a CBDC will be run on the blockchain.
* China regulation: China will step up its regulation of the digital economy, said the deputy governor of the country’s central bank. He said that new forms of finance should not be accepted blindly and that digital currencies, including cryptocurrencies, could create problems rather than solve them.
* Coinbase insider trading: The SEC is nearing a settlement with a former Coinbase product manager accused of insider trading, according to a lawsuit. Read about the case here.
Demand for bitcoin derivatives – options and futures – has increased in the past month, according to derivatives exchange Deribit. Most people are betting that bitcoin prices will go up.
What I read
* Markets are increasingly experiencing squeeze from the end of the easy-cash era. Check out these charts.
* With the cheapest mobile data speeds in the world and the explosive growth of social media and personal entertainment, Indian consumers are spending money online at a breakneck pace. Here’s what it means for investors.
* The CEO of JPMorgan says the current US banking crisis is still ongoing and will have repercussions “for years to come”. Full story here.
(Reporting by Elizabeth Howcroft; Editing by Louise Heavens)
