Wallets associated with the financially troubled crypto firms Alameda Research and FTX have executed a series of cryptocurrency transfers, moving more than $10 million to exchange deposit accounts within a span of five hours between October 24th and 25th.
This activity, as per data sourced from the blockchain analytics platform Spot On Chain, suggests a potential intention by these firms to liquidate some of their assets to repay creditors.
According to Spot on Chain’s records, an address deemed “likely” belonging to FTX initiated the movement by transferring 2,904 Ether, valued at over $5 million at the time, to another address at 8:18 pm UTC on October 24th.
Subsequently, this address distributed $3.4 million to a Binance deposit address and $1.8 million to a Coinbase deposit address.
Approximately 39 minutes later, a wallet identified as belonging to Alameda Research sent $95 worth of tokens, including LINK, MKR, and AAVE, to this address.
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Over the next five hours, FTX and Alameda wallets continued to transfer cryptocurrency to this address, including COMP and RNDR, totaling an additional $5 million in value.
Around 2:00 am UTC on October 25th, this address dispatched roughly $2 million worth of LINK, $2 million worth of MKR, and $1 million worth of AAVE to a Binance deposit address.
In total, during this period, cryptocurrency amounting to $10,362,403 was sent to exchange deposit addresses, based on Spot on Chain data.
Earlier, on September 13th, a Delaware Bankruptcy Court had approved a plan to liquidate $3.4 billion worth of crypto assets held by FTX and Alameda Research.
This announcement had raised concerns about the potential market impact of liquidating such a substantial crypto holding.
Nonetheless, experts have contended that the gradual and phased approach to the liquidation should mitigate its influence on the market, helping to prevent a significant market downturn.
FTX, the crypto exchange currently undergoing bankruptcy proceedings, is making efforts to reclaim millions of dollars in payments it disbursed to a nonprofit organization known as the Center for AI Safety (CAIS).
According to documents filed in bankruptcy court on October 25, FTX alleges that it provided CAIS with $6.5 million in payments between May and September 2022, just months before the exchange’s financial collapse and subsequent declaration of bankruptcy.
FTX is now seeking approval from a Delaware Bankruptcy Court judge to issue subpoenas to CAIS in order to investigate whether the organization indeed received these payments.
The subpoenas are intended to inquire about any payments, funds, communications, agreements, or contracts that may have transpired between CAIS, FTX, its affiliates, and former executives.
FTX asserts that CAIS declined to cooperate voluntarily by providing an accounting of the received funds, despite attempts at communication, including a phone call in August and email exchanges in early October. As of now, CAIS has not responded to requests for comment.
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This move by FTX to investigate CAIS is seen as part of its broader strategy to recover funds that can be used to repay the exchange’s creditors and customers who were adversely affected by its collapse in November 2022.
In a June report, FTX disclosed that it had successfully recovered approximately $7 billion and needed an additional $1.7 billion to cover customer funds it alleges were mishandled.
CAIS gained notable recognition for its public stance on AI risk, particularly its published statement in May, which emphasized the importance of addressing existential threats posed by AI alongside concerns such as nuclear war.
The statement garnered support from prominent figures, including OpenAI CEO Sam Altman and AI pioneer Geoffrey Hinton.
FTX’s subpoenas request a broad range of documents and communications from CAIS, encompassing transfers, records, and correspondences associated with not only FTX but also its philanthropic arms, the FTX Foundation and the FTX Future Fund.
The request extends to officers, directors, contractors, and employees of FTX, including co-founders Sam Bankman-Fried and Gary Wang, as well as other key individuals like Joseph Bankman, Gabriel Bankman-Fried, Caroline Ellison, Can Sun, and Daniel Friedberg, among others.
In his address at the 2023 Securities Enforcement Forum, Gary Gensler, the Chair of the United States Securities and Exchange Commission (SEC), shed light on the extensive regulatory actions undertaken by the agency, resulting in a staggering $5 billion in judgments and orders.
However, it was Gensler’s remarks concerning the cryptocurrency market that ignited fervent discussions within the crypto community on social media platforms.
He emphatically stated, “Don’t get me started on crypto. I won’t even name all the individuals we’ve charged in this highly noncompliant field.”
Discussing the economic ramifications of the SEC’s enforcement endeavors, Gensler highlighted that the agency had initiated over 780 enforcement actions in 2023, with more than 500 of them being standalone cases.
These actions ultimately culminated in judgments and orders totaling $5 billion, with $930 million allocated for restitution to injured investors.
Additionally, Gensler disclosed that the SEC had instituted legal actions against 40 firms for various rule and regulation violations since December 2021, resulting in penalties exceeding $1.5 billion.
Furthermore, he revealed that the SEC had resolved recordkeeping-related charges with 23 firms in the previous fiscal year alone.
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Expanding on his views on cryptocurrency, Gensler reiterated his belief that a significant portion of the crypto market falls within the purview of securities and should therefore be subject to the same regulatory framework.
He expounded upon the broad definition of securities, particularly emphasizing the concept of an investment contract, which he asserted is closely resembled by a substantial segment of the cryptocurrency market.
Gensler maintained that most cryptocurrency assets would pass the investment contract test, thereby necessitating compliance with securities regulations.
Drawing parallels between the present cryptocurrency landscape and the financial environment of the 1920s when securities laws were yet to be established,
Gensler argued that the crypto industry is currently grappling with similar challenges – a lack of clear regulations leading to numerous scams, frauds, and bankruptcies.
He contended that these issues underscore the imperative need for more stringent regulations.
Gensler concluded his speech by stating, “Without prejudging any one asset, the vast majority of crypto assets likely meet the investment contract test, making them subject to the securities laws.”
While his criticism of the cryptocurrency market is a recurring theme in his tenure, calls for greater clarity on crypto regulations have grown louder, with members of Congress, the crypto community, and key U.S. businesses urging Gensler to provide more definitive guidance on this matter.
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ARK Investments Sells GBTC Shares Amid Bitcoin ETF Speculation and Surging Crypto Market
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ARK, the renowned investment firm led by the pro-Bitcoin advocate Cathie Wood, has recently made strategic moves in its portfolio, shedding Grayscale Bitcoin Trust (GBTC) shares worth $2.5 million.
This decision comes in the wake of a notable surge in the GBTC market, which has been stoked by the growing anticipation of a spot Bitcoin exchange-traded fund (ETF).
On October 23, ARK executed the sale of 100,739 GBTC shares, marking its first officially reported GBTC transaction since November 2022 when it acquired 450,272 GBTC shares valued at $4.5 million for its ARK Next Generation Internet ETF (ARKW).
The recent sale constitutes approximately 2% of GBTC’s total value in ARKW’s portfolio, equivalent to $122.6 million as of that date. Notably, GBTC is the flagship asset in ARKW’s holdings, representing 10.4% of the fund’s exposure, with Coinbase and Roku shares trailing at 9% and 7.4%, respectively.
The GBTC market has been on a remarkable ascent, hitting multi-month highs and breaching the $24.7 mark for the first time since May 2022.
TradingView data shows that GBTC has surged by over 200% year-to-date, with a nearly 30% increase in the past 30 days.
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One possible explanation for ARK’s move is the anticipation surrounding the decision of the United States Securities and Exchange Commission (SEC) regarding Grayscale’s registration statement for a Bitcoin-based ETF.
Grayscale filed this new BTC ETF registration statement with the SEC on October 19, shortly after ARK amended its own spot Bitcoin ETF filing on October 11.
Bitcoin advocate Samson Mow suggested that ARK’s GBTC sale aligns with the diminishing GBTC discount and their pending ETF filing.
Speculation has also arisen among online traders, suggesting that if ARK’s spot Bitcoin ETF gets approved, the firm might prioritize it as the primary holding in ARKW, potentially leading to the disposal of GBTC shares.
While ARK has not yet responded to requests for comment, the investment firm has also divested itself of 32,158 Coinbase shares from ARKW and 10,455 Coinbase shares from its ARK Fintech Innovation fund, totaling $3.4 million.
On a different note, ARK has increased its stake in Robinhood shares, adding 32,158 shares valued at $300,000 to ARKW’s portfolio on October 23.
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On October 24th, major cryptocurrency exchanges experienced a noteworthy net outflow of funds, coinciding with Bitcoin (BTC) briefly reaching the $35,000 mark for the first time in a year.
This exodus of funds from exchanges is viewed as a positive sign in the crypto space, indicating that traders are transferring their assets to secure storage, anticipating an uptick in prices.
According to data shared by crypto analytics firm CoinGlass, the largest outflow was witnessed on Binance, with more than $500 million leaving the platform over the past 24 hours.
Following this, crypto.com recorded $49.4 million in outflows, and OKX saw $31 million departing its exchange. Most other exchanges reported outflows of less than $20 million.
Concerns reminiscent of a “bank run” surfaced after the collapse of FTX in November 2022, with investors fearing a similar scenario.
However, the recent outflows appear to be more aligned with trader sentiment rather than panic-induced withdrawals during the peak of the bear market.
Data from Glassnode corroborates this trend, showing that Bitcoin outflows from exchanges have increased in tandem with the surge in BTC’s price.
This price surge also resulted in the liquidation of approximately $400 million worth of short positions, with 94,755 traders witnessing their derivative positions being liquidated within the last 24 hours. The largest single liquidation order took place on Binance, amounting to $9.98 million.
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On-chain analysts drew attention to the market value to realized value (MVRV) ratio, a key metric comparing an asset’s market value to its realized value.
It is calculated by dividing a cryptocurrency’s market capitalization by its realized capitalization, which is based on the average price at which each coin or token was last moved on-chain.
The current MVRV ratio stands at 1.47, just shy of the 1.5 threshold that historically heralds the beginning of a bull market.
The crypto market as a whole has seen a remarkable 7.3% increase in its total market capitalization over the last 24 hours, reaching $1.25 trillion, its highest valuation since April.
This surge is believed to be fueled by speculation surrounding the imminent launch of a spot Bitcoin exchange-traded fund (ETF), further amplifying the bullish sentiment in the crypto ecosystem.
With the MVRV ratio inching closer to 1.5, many enthusiasts are optimistic about Bitcoin’s potential to reach $40,000 in the coming days.
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According to lawyer Bill Morgan, closely following the ongoing lawsuit between Ripple and the United States Securities and Exchange Commission (SEC), the chances of the SEC winning its appeal are incredibly slim.
Morgan took to social media, specifically X (formerly Twitter), to express his opinion on the matter. He emphasized that there is no glaringly apparent error in the case that would support an appeal, except for one point that favors Ripple.
In particular, he pointed out that the sales of XRP, Ripple’s cryptocurrency, do not meet at least two key criteria of the Howey test, a legal standard used to determine whether an asset qualifies as a security.
Morgan generously assigned a mere 3% likelihood of success for the SEC’s appeal against Ripple.
Morgan’s assessment came in response to data shared by prominent attorney Jeremy Hogan, who presented statistics on the success rates of appeals in various types of lawsuits.
According to this data, the SEC faces a meager 14.2% chance of prevailing in its appeal against Ripple.
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This lawsuit between the SEC and Ripple has spanned three years, with a recent ruling by a judge declaring that the sale of XRP on cryptocurrency exchanges does not violate securities laws.
This ruling was a significant victory for Ripple, which had suffered substantial setbacks as major crypto exchanges delisted XRP during the lawsuit.
The SEC attempted to appeal this judgment but was unsuccessful, with Judge Analisa Torres ruling that the regulator had failed to demonstrate controlling questions of law or substantial grounds for differences of opinion.
In a surprising turn of events, the SEC decided to dismiss all charges against Ripple CEO Brad Garlinghouse and executive chair Chris Larsen.
Ripple’s chief legal officer, Stuart Alderoty, characterized this move by the SEC as a “surrender,” while Ripple itself referred to it as a “stunning capitulation.”
Morgan also highlighted that the SEC has now dismissed the remainder of the case, meaning there will be no trial in the coming year.
He predicted that a final judgment would likely be issued sometime next year, bringing an end to this protracted legal battle between Ripple and the SEC.
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A Web2 gaming studio entering Web3 is always an event. But the launch of Triumphia Origins, an NFT collection associated with the game Fight Me by Nekki was even more special, as the studio boasts a billion game downloads. It’s no surprise that the collection sold out in two minutes.
Triumphia Origins: your golden ticket to the Fight Me game by Nekki on Polygon
Nekki is the game publisher behind such action and strategy hits as Shadow Fight, Vector, and 11×11. The studio, which is partnered with Polygon and MetaMask, is now building its first Web3 game, Fight Me.
Watch the impressive cinematic trailer
The first part of the project to go live is the Triumphia Origins NFTs, a collection of 10,000 fighter characters named after Triumphia – the city where the events of Fight Me unfold.
All Triumphia Origins holders are entitled to a variety of privileges:
- a whitelist spot on the main Fight Me mint, planned for November 2023 on Magic Eden;
- early access to the Fight Me game (Q1 2024);
- member-only contests and VIP activities on Discord, and more.
What happened during the Triumphia Origins mint on Magic Eden?
Triumphia Origins held a free mint on Magic Eden on October 13. It started at 5 pm UTC with two hour-long rounds for the Discord OGs – a logical step, considering how much Nekki values its community. The next round was first come, first served – and saw 6,000 Triumphia NFTs minted in
less than two minutes. As a result, the mint never got to the public round.
Such a level of interest is not surprising, given the large following of Fight Me. In just a few short months, Nekki built one of the most passionate and active Discord communities in all of GameFi.
The server hosts regular tournaments between the two leading fighter squads, as well as frequent contests. The recent contest where users were asked to share their personal achievements garnered thousands of submissions.
About Nekki and Fight Me
Nekki is a Cyprus-based game publisher known for its high-quality action and strategy franchises, including Shadow Fight – one of the industry’s biggest fighting franchises. Overall, Nekki’s games have been downloaded over a billion times – and all of this growth has been organic. Among the studio’s other achievements:
- Over 12 million followers across all franchises’ social accounts;
- Never had to raise funds from outside investors.
- Released successful mobile, browser, and social games;
- 300+ professionals working for the studio;
- Built the popular animation tool Cascadeur, used by 100,000 animators and developers.
The company’s first Web3 title, Fight Me, is a Polygon-based browser game that combines Play-to-Own and Compete-to-Earn elements.
In Fight Me, players will be able to collect fighters, form fight clubs, helping their squads win titles in tournaments. Along the way, they will unlock weapons, skills, and random power-ups. Users can then sell their upgraded fighters in the secondary market.
Fight Me’s relaxed gameplay, no-download browser format, and fiat-friendly economics will also appeal to Web2 games – an audience that already knows and loves Nekki’s products.
The main Fight Me NFT mint is scheduled for November 2023 – with whitelist spots reserved for all the Triumphia Origins holders, like we noted above. Follow Fight Me on X and Discord for updates.
Ripple recently celebrated a significant legal victory in its ongoing battle with the U.S. Securities and Exchange Commission (SEC).
On October 19th, the SEC announced its intention to dismiss all claims against Ripple CEO Brad Garlinghouse and Executive Chair Chris Larsen.
This development marked a crucial moment in the civil case initiated by the SEC in late 2020, offering a glimmer of hope for Ripple.
However, the cryptocurrency community’s elation over this news was tempered by another announcement on the same day. LBRY, a prominent blockchain file-sharing and payment network, revealed that it was shutting down its operations.
LBRY cited mounting debts, owed to the SEC, its legal team, and a private creditor, amounting to several million dollars.
LBRY’s creators are renowned for their work on Odysee, an open-source video-sharing platform aimed at providing a decentralized alternative to mainstream platforms like YouTube.
LBRY had been embroiled in its legal dispute with the SEC, which filed a lawsuit against the platform in March 2021 for alleged securities law violations, mirroring its action against Ripple.
Despite the SEC reducing LBRY’s initial $22 million penalty to around $111,000, the company chose not to pursue further legal action.
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The crypto community reacted with mixed emotions. While celebrating Ripple’s victory, many expressed concern about the regulatory overreach and its consequences for smaller players in the industry.
Notably, XRP, Ripple’s cryptocurrency, boasts a market capitalization of $27 billion, while LBRY credits were valued at only $5.5 million at the time.
Critics argued that the stark contrast in resources between Ripple and LBRY underscored how well-funded entities can leverage their financial strength in legal battles against regulatory bodies.
Some questioned the SEC’s priorities, criticizing it for targeting a small American company like LBRY while failing to prevent major issues in the cryptocurrency space.
Pro-XRP lawyer John Deaton condemned the SEC’s actions against LBRY, citing the agency’s inability to secure a substantial penalty despite the considerable resources expended.
He labeled the SEC as a “broken, failed, and inept agency.”
Despite Ripple’s legal win, industry observers anticipate that the legal battle with the SEC is far from over.
The penalty phase of the litigation remains contentious, with lawyers predicting a protracted struggle over the appropriate penalties for Ripple’s institutional sales of XRP.
The SEC has signaled its intent to pursue this aspect further, and discussions between the two parties are set to continue until November 9, 2023.
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On October 20th, Bitcoin made a significant move, surging to $30,000 as Wall Street opened its doors. Analysts were closely monitoring the weekly closing price to gauge the strength of this rally.
BTC’s price reached a two-month high of $30,233 on Bitstamp, maintaining its strength during the Asian trading session.
However, as of the time of writing, it experienced a slight dip, dropping just below $29,500.
The ongoing volatility in the market had experts emphasizing the importance of a strong weekly candle close to confirm the sustainability of the rally.
One key metric being watched closely was the 100-week moving average (MA) at $28,627. Keith Alan, co-founder of Material Indicators, emphasized the significance of the weekly candle closing above this level, with subsequent candles staying above it without any downward wicks.
He noted that Bitcoin would need to overcome resistance levels at $30.5k, $31.5k, and ultimately $33k to validate a bull breakout.
Trader Pentoshi identified $28,900 as a critical support level that bulls needed to maintain. Meanwhile, another trader, Skew, suggested that a sweep of late long positions could create an entry opportunity before the upside resumed.
Taking a longer-term perspective, the trading team at Stockmoney Lizards remained optimistic, predicting that the resistance just above $30,000 would soon be breached.
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They pointed to a chart fractal comparing BTC/USD in 2023 to its 2020 breakout, suggesting that significant upward movement was imminent.
The approval of the United States’ first Bitcoin spot price exchange-traded fund (ETF) was seen as a potential catalyst for this surge.
In their commentary, Stockmoney Lizards addressed concerns about the timing relative to the 2020 halving event, stating that the current circumstances, including mass adoption and potential ETF approval, would be the driving forces behind Bitcoin’s price movement.
They also mentioned the upcoming block subsidy halving scheduled for April 2024, which could further impact the cryptocurrency landscape.
In conclusion, Bitcoin’s price surged to $30,000 on October 20th, with market participants closely monitoring the weekly candle close to confirm the strength of the rally.
Key support and resistance levels were identified, and traders remained optimistic about the cryptocurrency’s future, especially in the context of potential ETF approval and upcoming halving events.
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In the ongoing fraud trial of Sam Bankman-Fried, prosecutors have taken a significant step by requesting the judge to clarify to the jury that the defendant’s claim of being an effective altruist should not serve as a valid defense.
Bankman-Fried stands accused of embezzling billions of dollars from FTX customers for personal purposes, including political contributions, real estate investments, and other ventures.
In a letter submitted to the court, the prosecution pointed out that Bankman-Fried’s legal team has attempted to argue that he should not be charged with fraud because he intended to reimburse customers through strategies like FTX’s growth and profitable investments.
However, the prosecution strongly contends that this line of argument lacks relevance and does not absolve him of the serious fraud allegations he faces.
Bankman-Fried’s defense strategy has been centered around portraying him as a philanthropist deeply committed to creating a positive global impact.
They argue that his support for effective altruism, a philosophical movement that advocates for impactful ways of helping others, such as charitable donations or pursuing meaningful careers, reflects his underlying motivations.
The prosecutors, on the other hand, maintain that effective altruism cannot serve as a valid defense against fraud.
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They describe it as an “unconventional philosophy regarding the ethics of deception and theft” and assert that it has no bearing on the necessary mental state (mens rea) required for committing fraud.
The trial, which is currently in its third week in New York, has featured several key witnesses presented by the prosecution. These witnesses include Caroline Ellison, former CEO of Alameda Research; Nishad Singh, former engineering chief of FTX and Alameda; and Gary Wang, a co-founder of the now-defunct FTX.
According to their testimonies, Bankman-Fried directed them to acquire funds from FTX customers without their knowledge or consent for purposes unrelated to FTX’s regular operations.
Furthermore, they contend that Bankman-Fried was well aware of the potential risks and consequences of his actions and actively concealed them from regulatory authorities, auditors, and the public.
The prosecution has backed up these claims with a trove of evidence, including emails, messages, spreadsheets, and bank records that expose the extent of Bankman-Fried’s deceptive scheme.
The trial is approaching its conclusion, with the finalization of jury instructions expected next week, followed by closing arguments. Subsequently, the jury will begin deliberations to determine the legal fate of Sam Bankman-Fried.
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