The trial of Avraham Eisenberg, the individual accused of exploiting Mango Markets and siphoning off $116 million, has been postponed until April 8, 2023, following a successful motion by his legal representatives. Originally scheduled for December 4, the trial was delayed due to various factors affecting Eisenberg’s trial preparations.
The motion for a continuance was presented to District Court Judge Arun Subramanian on November 2 and was granted, as confirmed in a court filing on November 3.
United States prosecutors opposed the motion for continuance, but their efforts were unsuccessful.
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In addition to granting the continuance, Judge Subramanian instructed both U.S. prosecutors and Eisenberg’s legal team to submit a revised schedule for pretrial motions and submissions by November 7.
Eisenberg, who had previously confessed to his involvement in the Mango Markets exploit, pleaded not guilty to three criminal counts related to commodities fraud, commodity manipulation, and wire fraud in June.
In their motion, Eisenberg’s attorneys cited the need for additional time to review the extensive discovery materials provided by U.S. prosecutors.
They explained that the government had been continually delivering substantial evidence, which they were still in the process of analyzing and discussing with their client.
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Furthermore, the legal team faced an unexpected setback when Eisenberg was transferred to the Metropolitan Detention Center (MDC) in Brooklyn on October 26.
This move prevented him from accessing the discovery materials and other legal documents pertinent to his trial.
The attorneys argued that the relocation would significantly impede their ability to consult with Eisenberg.
It’s noteworthy that the MDC was also the prison where former FTX CEO Sam Bankman-Fried returned after being convicted on all seven fraud-related charges on November 2.
Additionally, the Securities and Exchange Commission had charged Eisenberg on January 20, alleging that he manipulated Mango Markets’ governance token, MNGO, by securing substantial loans against inflated collateral, leading to the depletion of Mango’s treasury.
Eisenberg was arrested in Puerto Rico on December 27, three weeks prior to the SEC’s charges.
Eisenberg publicly admitted to the exploit on October 15, 2022, contending that his actions were legally justified.
Initially, he returned $67 million to Mango Markets’ decentralized autonomous organization as part of a bounty arrangement.
Nevertheless, the Mango Markets team subsequently filed a lawsuit against Eisenberg, seeking $47 million in damages plus interest.
The United States Commodity Futures Trading Commission (CFTC) is taking a closer look at how companies handle customer assets, particularly in the context of futures commission merchants (FCMs) and derivative clearing organizations (DCOs).
The CFTC has recently proposed amendments to the rules governing these entities, with a specific focus on enhancing the protection of customer funds.
Presently, these companies are required to invest customer funds in highly liquid assets, but these rules don’t adequately address the unique operational model of LedgerX.
LedgerX operates as a DCO, but it stands out by establishing direct connections with clients, departing from the traditional intermediary role played by FCMs.
This unique approach has caught the attention of CFTC Commissioner Kristin Johnson, who has expressed concerns that the current regulatory framework is falling behind the rapidly evolving industry.
Previously affiliated with FTX and now a part of Miami International Holdings, LedgerX operates in a distinct sector by providing direct client access, a departure from established industry conventions.
What distinguishes LedgerX further is its effort to settle cryptocurrency transactions directly for clients, rather than involving intermediaries.
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The company has obtained several CFTC registrations and implemented enhanced consumer safeguards, including asset segregation.
Commissioner Johnson is advocating for a revised regulatory framework that would ensure uniform protection for retail clients, whether they trade through intermediaries or directly with non-intermediated DCOs like LedgerX.
This call for action coincides with a 75-day window for public feedback on the CFTC proposal.
This period of open dialogue holds the potential to guide the CFTC in addressing the regulatory deficiencies highlighted by Commissioner Johnson.
It is incumbent upon the CFTC to ensure that regulatory measures remain in sync with the constantly changing derivatives market.
This is vital not only to protect the interests of retail customers but also to maintain a level and equitable playing field for all market participants.
In an industry marked by innovation and evolution, regulatory adaptation is essential to safeguard the integrity and stability of financial markets.
On November 4th, Bitcoin was on a quest to surpass the $35,000 mark as weekend trading activities continued to exhibit upward consolidation trends.
Market data from Cointelegraph Markets Pro and TradingView indicated that BTC’s price support remained resilient even after the closure of Wall Street trading.
Despite experiencing intraday lows the previous day, Bitcoin managed to maintain its short-term price floor at $34,000, effectively passing the test.
This performance had traders eagerly anticipating potential upward movements, making Bitcoin a preferred choice among investors.
In a recent video update, the well-known trader Credible Crypto highlighted the likelihood of Bitcoin surpassing the $35,000 threshold as the next logical step.
Credible Crypto employed Elliott Wave analysis and identified three crucial price levels to monitor: $34,314, $34,714, and $35,119, representing the lower limit, midrange point, and upper limit of the expected range.
Credible Crypto emphasized the importance of successfully reclaiming the midrange level, indicating a shift from a recovery based on range lows to one based on midrange levels.
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This approach was bolstered by robust trading volume, which Credible Crypto described as a “significant event,” along with a general reluctance to sell at the current price levels.
As traders contemplated the weekend and the upcoming weekly close, Daan Crypto Trades drew attention to the proximity of the CME Bitcoin futures closing price on November 3rd.
CME futures “gaps” had historically been closed in line with BTC’s spot price, with a notable exception near $20,000. This anomaly contributed to bearish predictions of a potential return to that price level in the months ahead.
Additionally, another trader named Jelle highlighted the significance of the 200-period exponential moving average (EMA) as a critical support line on 1-hour timeframes.
Crypto Tony, on the other hand, shared his strategy with subscribers, indicating that he would consider a hedge short position if Bitcoin dropped below $34,100, while still maintaining his long position as long as Bitcoin held above $33,000.
In summary, Bitcoin was aiming to surpass the $35,000 mark, with traders closely monitoring key price levels and indicators to determine the cryptocurrency’s future trajectory amidst the ongoing market consolidation.
The United States National Institute of Standards and Technology (NIST) and the Department of Commerce are actively seeking participants for their newly-established Artificial Intelligence (AI) Safety Institute Consortium.
This consortium aims to enhance the safety and reliability of AI systems and invites interested parties to join in this critical endeavor.
In a recent announcement made on November 2nd, NIST unveiled the formation of the AI consortium through a publication in the Federal Registry.
The announcement also officially solicited applications from individuals and organizations possessing the necessary qualifications.
According to the NIST document, this initiative represents the initial phase of NIST’s collaboration with non-profit organizations, universities, government agencies, and technology companies to address the challenges associated with AI development and deployment.
The primary objective of this collaboration is to formulate and implement precise policies and metrics that prioritize a human-centered approach to AI safety and governance.
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Participating members of the consortium will be tasked with a range of responsibilities, including the development of measurement tools, benchmarking systems, policy recommendations, red-teaming exercises, psychoanalysis, and environmental assessments, all geared towards enhancing AI safety.
These efforts have been spurred by a recent executive order issued by U.S. President Joseph Biden.
The executive order established six new standards for AI safety and security, although it appears that none of these standards have yet been formally enacted into law.
While European and Asian nations have taken proactive steps in implementing policies governing AI development with a focus on user and citizen privacy, security, and potential unintended consequences, the United States has lagged behind in this regard.
President Biden’s executive order represents a positive stride towards the formulation of specific policies governing AI within the U.S., and the establishment of the Safety Institute Consortium underscores this commitment to AI safety.
However, there is still a lack of clarity regarding the timeline for the implementation of comprehensive AI development and deployment laws in the U.S., beyond existing regulations applicable to businesses and technology.
Many experts believe that these existing laws are inadequate when applied to the rapidly evolving AI sector.
The United States Securities and Exchange Commission (SEC) has rejected the jury’s verdict on Terraform Labs’ alleged violations and is now seeking a summary judgment on all the claims.
The SEC’s stance was made evident in a court filing dated October 27, where they expressed dissatisfaction with the jury’s leniency towards Do Kwon’s alleged involvement in the fraudulent activities that ultimately led to the collapse of the Terra ecosystem.
The court filing, submitted in the U.S. District Court for the Southern District of New York, emphasized the SEC’s belief that Kwon should be held accountable for Terraform’s violations of Exchange Act Section 10(b) and Rule 10b-5 under Exchange Act Section 20(a).
According to the SEC, the evidence they have presented indicates Kwon’s role in misleading cryptocurrency investors by promoting Terra and its in-house Terra LUNA tokens as securities.
On the same day, Do Kwon and Terraform Labs requested that the judge dismiss the SEC’s lawsuit, arguing that Terra Classic (LUNC), TerraClassicUSD (USTC), Mirror Protocol (MIR), and its mirrored assets (mAssets) should not be considered securities as the SEC had alleged.
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Nevertheless, the SEC maintains that Kwon and Terraform Labs not only offered and sold securities but also conducted unregistered transactions involving LUNA and MIR, engaged in transactions with mAssets, and committed fraud.
While Terra’s co-founder, Daniel Shin’s lawyer, attributed the collapse of the Terra ecosystem to the “unreasonable operation of the Anchor Protocol and external attacks carried out by Do-hyung Kwon,” the company recently shifted blame onto market maker Citadel Securities.
Terra accused Citadel Securities of participating in an alleged “concerted, intentional effort” to cause the depeg of its TerraUSD (UST) stablecoin in 2022.
In response, Citadel Securities issued a statement to Cointelegraph, calling Terra’s motion “frivolous” and asserting that it was based on false social media posts.
Citadel Securities also emphasized that they had already provided information confirming their lack of involvement in the matter.
In summary, the SEC has challenged the jury’s decision regarding Terraform Labs’ alleged violations, and both parties continue to engage in legal battles over whether Terra’s assets should be classified as securities, while the blame for the Terra ecosystem’s collapse is shifting between internal and external factors.
The National Bank of Georgia (NBG) has chosen Ripple Labs, a blockchain payments network, as its official technology partner to spearhead the development of the digital lari, Georgia’s central bank digital currency (CBDC) initiative.
Ripple announced this strategic partnership, highlighting that it will encompass the deployment of the digital lari pilot program through the Ripple CBDC Platform.
This collaboration will enable the NBG to explore potential use cases for the digital lari, assessing its benefits for the government, businesses, and individual consumers.
Before earning the designation as the NBG’s technology partner, Ripple underwent a rigorous and comprehensive selection process.
In September, the NBG had revealed its plans to advance its CBDC project by introducing a limited-access live pilot environment.
In the initial phase of this process, the NBG identified nine companies renowned for their technological expertise, maturity, capability, relevant background, and eagerness to engage in practical assessments.
Ripple stood out among the selected partners, alongside Augentic, Bitt Inc., Broxus, Currency Network, DCM Corp, and others.
The selection committee meticulously evaluated several factors, including the partner firms’ understanding of the project’s objectives, their potential applications, and their unwavering commitment to the project’s success, as per the NBG’s announcement.
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Ripple’s dedication to advancing digital currencies and fostering innovation in the field of CBDCs has garnered recognition.
In July, the company received accolades from Currency Research for its contributions to digital currency advancement and its notable sustainability initiative.
Ripple’s role in supporting CBDC exploration and implementation was particularly lauded.
Prior to partnering with the NBG on the digital lari project, Ripple had already established collaborative relationships with organizations interested in exploring CBDC implementations.
Notably, Ripple had previously teamed up with Banco de la República, Colombia’s central bank, to explore the applications of blockchain technology in its digital peso pilot, leveraging the Ripple CBDC Platform.
The selection of Ripple as the technology partner for Georgia’s digital lari project underscores the growing importance of blockchain technology and CBDCs in modernizing financial systems and fostering innovation in the global economy.
This partnership marks a significant step forward in the development and adoption of digital currencies by central banks worldwide.
Former FTX CEO Sam Bankman-Fried has been found guilty of all seven charges against him by a New York jury, following approximately four hours of deliberation.
The charges include two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy, and one count of money laundering conspiracy.
On March 28, 2024, Bankman-Fried is scheduled to return to court for sentencing, to be determined by New York District Judge Lewis Kaplan.
While government prosecutors will provide a sentencing recommendation, Judge Kaplan will have the final authority in this matter.
These charges carry severe penalties, ranging from five to 20 years in prison. In particular, wire fraud, wire fraud conspiracy, and money laundering conspiracy could result in a maximum sentence of 20 years behind bars.
During a press conference outside the courtroom, New York Southern District U.S. Attorney Damian Williams characterized Bankman-Fried’s actions as part of a “multibillion-dollar scheme designed to make him the king of crypto.”
He labeled it one of the most significant financial frauds in American history.
Bankman-Fried’s attorney, Mark Cohen, expressed respect for the jury’s decision but also disappointment with the outcome.
Cohen maintained that Bankman-Fried asserts his innocence and will vigorously continue to fight the charges against him.
Notably, other key FTX executives, including former Alameda CEO Caroline Ellison, FTX co-founder Gary Wang, and former FTX engineering head Nishad Singh, have pleaded guilty to various charges and collaborated with the government to testify against Bankman-Fried during the five-week trial.
Throughout the trial, Bankman-Fried consistently pleaded not guilty to all charges.
He also took the stand to assert his innocence and described FTX’s collapse in November 2022 as “a series of significant errors.”
Bankman-Fried distanced himself from pivotal decisions, attributing blame to Wang for creating a function that allowed Alameda to trade funds it didn’t possess.
Regarding Alameda’s ballooning line of credit during the 2022 crypto market downturn, he claimed to be uncertain about the details.
Bankman-Fried also shifted responsibility onto Ellison for neglecting risk management and denied defrauding FTX customers, characterizing the situation as Alameda borrowing funds from the exchange, rather than outright deception of customers.
On November 2, the Dubai Financial Services Authority (DFSA) made significant strides in the realm of digital assets by officially recognizing two additional tokens, XRP and Toncoin.
These tokens have now joined the ranks of Bitcoin, Ether, and Litecoin as officially recognized digital currencies within the Dubai International Financial Centre (DIFC).
This recognition brings with it the significant implication that financial institutions operating within the DIFC will be permitted to conduct transactions involving these newly recognized tokens.
The DIFC, a bustling special economic zone, is currently home to over 4,000 companies, making it a pivotal hub for financial activities in the region.
In 2020, Ripple, the company behind XRP, established its MENA headquarters within the DIFC, highlighting the strategic importance of this location.
Ripple, which boasts approximately 20% of its customer base in the MENA region, expressed its enthusiasm for this development.
Ripple’s CEO, Brad Garlinghouse, emphasized the importance of the DFSA’s decision in advancing Dubai’s status as a global financial services hub, fostering foreign investment, and propelling economic growth.
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The DFSA, responsible for regulating the DIFC exclusively, initiated cryptocurrency regulations in October 2021 and further enhanced them in November 2022.
In late September, the DIFC introduced a proposed Digital Assets Law, which also included plans to repeal the existing 2005 Law of Security and the Financial Collateral Regulations.
Instead, the DIFC intends to introduce an updated Law of Security that encompasses collateral regulations in a more comprehensive manner.
This proposed digital assets law outlines the legal attributes of digital assets, their proprietary nature, as well as the protocols for their control, transfer, and handling by relevant parties.
These legal developments are currently undergoing a consultation period, set to conclude on November 5.
These advancements in digital asset regulation come shortly after the Abu Dhabi Global Market’s enactment of the Distributed Ledger Technology (DLT) Foundations Regulations, which became effective on November 1.
Meanwhile, in Dubai itself, the Dubai Virtual Asset Regulatory Authority was established in March 2022, acquiring jurisdiction over the entire emirate and its free trade zones, excluding the DIFC.
This move was accompanied by the introduction of a virtual assets law, signaling Dubai’s commitment to staying at the forefront of the evolving digital asset landscape.
The Securities and Futures Commission (SFC) of Hong Kong has taken significant steps to regulate the burgeoning field of digital asset tokenization.
In this regard, the SFC has issued two important circulars that provide comprehensive guidelines and directives for intermediaries involved in tokenized securities activities.
These circulars also outline the specific criteria that must be met when tokenizing investment products that are authorized by the SFC.
The SFC has firmly established its stance on tokenized securities, considering them to be equivalent to traditional securities but with an added layer of tokenization.
As a result, the legal and regulatory requirements that traditionally apply to securities markets also extend to tokenized securities.
To maintain regulatory compliance, the SFC has specified that tokenized securities offerings must adhere to the Companies Ordinance’s Prospectus Regime and the Securities and Futures Ordinance pertaining to offers of investment.
Furthermore, intermediaries engaged in activities such as providing advice on tokenized securities, managing tokenized funds, and facilitating secondary market trading on virtual asset trading platforms must adhere to the existing conduct requirements applicable to securities-related activities.
The issuance of these regulatory guidelines comes at a time when Hong Kong is actively exploring tokenization opportunities.
In February, the Hong Kong Monetary Authority made history by launching the world’s first tokenized green bond, successfully raising approximately $100 million.
The SFC’s circulars also address the security concerns associated with tokenized securities trading platforms.
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Trading platforms with licenses are required to establish SFC-approved compensation arrangements to safeguard against potential security token losses.
These protective measures can include transfer restrictions and whitelisting protocols, ensuring the security of tokenized securities.
The recent surge in discussions about tokenization has not gone unnoticed by the SFC.
The regulatory body has observed a heightened interest from financial institutions in tokenizing traditional financial instruments within the global financial markets.
In response, the SFC has been actively reviewing various proposals related to the tokenization of investment products, encompassing both primary offerings and secondary trading on SFC-licensed virtual asset trading platforms.
In conclusion, the SFC acknowledges the significant potential benefits of tokenization for financial markets, including increased efficiency, enhanced transparency, reduced settlement times, and lowered costs for traditional finance.
However, the regulatory body remains vigilant about the new risks associated with this technology and is committed to balancing innovation with safeguarding the integrity of financial markets.
Former BitMEX CEO Arthur Hayes has openly acknowledged his recent purchase of Solana’s SOL cryptocurrency, despite its possible local peak in value.
Hayes remains bullish on the cryptocurrency’s future prospects. This move came after SOL had already experienced a remarkable 500% rebound from its December 2022 low of around $8.
Hayes’ purchase coincided with a prediction by VanEck, an asset management firm overseeing $76.4 billion in assets, forecasting a staggering 10,600% price increase for SOL by 2030.
This prediction was based on Solana’s potential to capture market share from its top competitor, Ethereum.
Furthermore, an analyst from FieryTrading suggested that SOL could see a 150% increase once it breaches the resistance level at $38.
In October 2023, SOL witnessed an impressive 80% price surge, reaching a 14-month high of approximately $46.75.
It appears that Hayes acquired SOL around this same price point, displaying confidence in its continued upward trajectory, possibly influenced by Solana’s ongoing scalability efforts.
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However, caution is warranted as technical and fundamental indicators are signaling the possibility of a 30% price decline in November.
The daily relative strength index (RSI), a momentum indicator, has reached its most overbought levels since January 2023. Historically, such overbought RSI readings have preceded 35% to 50% price corrections throughout 2023.
In the event of a correction, the next support level to watch is near $30.25, which corresponds to the June-November 2022 support level and represents a 30% drop from current prices.
Notably, this level aligns with SOL’s 200-3D exponential moving average (200-3D EMA), denoted by the blue wave in the chart.
A break below this level could lead to a test of SOL’s ascending trendline support, situated near $26, marking a 37.50% decrease from current price levels.
Arthur Hayes’ bullish outlook on Solana remains intact, but the cryptocurrency market’s inherent volatility suggests the possibility of a significant correction in the near future.
SOL investors should monitor these technical and fundamental indicators closely to make informed decisions about their holdings.