CZ gets jail sentence, Gensler viewed Ether as security, and FBI targets mixers: Hodler’s Digest, April 28 – May 4
Top Stories This Week
Ex-Binance CEO Changpeng Zhao sentenced to four months in prison
Former Binance CEO Changpeng “CZ” Zhao has been sentenced to four months in prison for failing to maintain an effective Anti-Money Laundering program at the cryptocurrency exchange. The sentence was delivered by Judge Richard Jones in the U.S. District Court for the Western District of Washington on April 30, following Zhao’s guilty plea in November. Although prosecutors initially sought a three-year prison term, Judge Jones decided on a shorter sentence, noting that there was no evidence Zhao was directly informed of specific illegal activities at Binance.
SEC and Gensler believed Ether was security for at least a year
The lawsuit filed by Consensys against the U.S. Securities and Exchange Commission (SEC) has revealed details about the Commission’s view of Ether as a security. Based on court documents, the SEC and its chair, Gary Gensler, have reportedly considered Ether to be an “unregistered security” not in compliance with federal regulations for at least a year. The revelation is part of Consensys response to a Wells notice from the SEC with an unredacted complaint in a Texas federal court.
FBI warning against crypto money transmitters ‘appears’ to be aimed at mixers
An advisory issued by U.S. Federal Bureau of Investigation against using unregistered cryptocurrency money-transmitting services may be targeting smart-contract privacy tools, according to legal professionals. On April 25, the FBI issued a public service announcement advising Americans to only use registered crypto businesses that adhere to Know Your Customer and Anti-Money Laundering regulations. The FBI highlighted that it had taken action against unlicensed cryptocurrency services, warning that users of such services could face financial disruptions, especially if their funds are mixed with those obtained illegally.
Bitcoin post-halving price consolidation could last 2 months — Bitfinex
Bitfinex analysts predict that Bitcoin may enter a one to two-month period of price consolidation following the halving event, with potential price fluctuations of up to $10,000. According to the report, Bitcoin is expected to remain a key benchmark for price action in the crypto market throughout May and serve as a primary indicator for the overall market cap. Lastly, the report adds that any positive impact on Bitcoin’s price following the halving will be seen in later months.
Hong Kong Bitcoin, Ether ETFs attract over $200M on day 1
Spot Bitcoin and Ether exchange-traded funds (ETFs) in Hong Kong drew over $200 million in total assets on their debut on April 30. Arkham Intelligence data shows that the Bosera HashKey spot Bitcoin and Ether ETFs have gathered 964 Bitcoin (BTC) and 4,290 Ether (ETH), amounting to $71.94 million in assets under management as of the launch date. Additionally, ChinaAMC’s spot BTC and ETH ETFs have secured $123.61 million in assets. A survey conducted on April 28 by the Hong Kong-regulated crypto exchange OSL found that 76.9% of respondents familiar with cryptocurrency in the city intend to invest in the new crypto funds.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $61,769, Ether (ETH) at $3,081 and XRP at $0.52. The total market cap is at $2.29 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Helium (HNT) at 25.86%, Wormhole (W) at 24.16%, and Optimism (OP) at 22.34%.
The top three altcoin losers of the week are Stacks (STX) at -17.57%, Pendle (PENDLE) at -12.90%, and Neo (NEO) at -12.89%.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
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Most Memorable Quotations
“I will do my time, conclude this phase, and focus on the next chapter of my life (education).”
Changpeng Zhao, founder of Binance
“Good. [Roger Ver’s] been a net negative for Bitcoin.”
Dan Held, Bitcoin proponent
“We don’t expect the Bitcoin ETF slowdown to be a worrying trend, but believe it is a short-term pause before ETFs become more integrated with private bank platforms, wealth advisers and even more brokerage platforms.”
Gautam Chhugani and Mahika Sapra, analysts at Bernstein
“The judge has sent a message, not to CZ individually but to the entire industry, that Anti-Money Laundering compliance must be taken seriously.”
Aaron Lane, senior law lecturer at Melbourne’s RMIT Blockchain Innovation Hub
“The [United Arab Emirates] government is gradually doing for crypto what Silicon Valley did for tech. The country is quickly becoming the Coachella of the crypto world.”
Sam Blatteis, CEO of The MENA Catalysts
“Anything that increases usage and adoption of the Bitcoin blockchain is good for miners, and good for the Bitcoin ecosystem as a whole.”
Adam Swick, chief growth officer at Marathon
Prediction of the week
Bitcoin bottom in, now headed for a ‘slow grind higher’ — Arthur Hayes
Former BitMEX CEO Arthur Hayes believes Bitcoin has hit a local bottom and will slowly grind back up over the next few months. In a blog post on May 3, Hayes commented on the recent market slump, claiming that “The price action played out as I expected.”
Bitcoin hit a local low of around $58,600 earlier this week but will rally to above $60,000 and then remain rangebound between $60,000 and $70,000 until August, he said.
Hayes expects crypto markets to slowly grind higher after the recent sell-off, driven by increased dollar liquidity from the Federal Reserve’s quantitative tightening taper and the U.S. Treasury’s debt issuance plans.
“The slow addition of billions of dollars of liquidity each month will dampen negative price movement from here on out,” he added before predicting that prices will “bottom, chop, and begin a slow grind higher.”
FUD of the Week
US Justice Dept charges Roger Ver with tax fraud
Officials with the United States Department of Justice announced charges against early Bitcoin investor Roger Ver, known by many as “Bitcoin Jesus.” In an April 30 notice, the Justice Department said authorities in Spain had arrested Ver based on criminal charges in the U.S., including mail fraud, tax evasion and filing false tax returns. Ver allegedly defrauded the Internal Revenue Service (IRS) out of roughly $48 million by failing to report capital gains on his sale of Bitcoin and other assets. The government plans to extradite Ver to the United States for trial.
US probes Jack Dorsey’s Block, Inc. over financial transactions: Report
U.S. federal prosecutors are investigating Jack Dorsey’s fintech company, Block Inc., following allegations by a whistleblower of compliance violations within its payment divisions, Square and Cash App. Documents provided by a former employee to the Southern District of New York prosecutors reportedly show that the company processed transactions for users in sanctioned countries such as Iran, Russia, Cuba, and Venezuela, and facilitated crypto transactions for terrorist groups. According to NBC News, several small-dollar transactions were not reported to the government.
Nigerian court postpones money laundering trial of Binance and execs
The trial of Tigran Gambaryan, a Binance executive detained in Nigeria, has been postponed until May 17 due to a delay in court proceedings. According to reports, Binance’s lawyers did not receive the necessary documents to proceed with a money laundering case involving Gambaryan and regional manager Nadeem Anjarwalla. The trial is distinct from separate tax evasion charges faced by Binance and the executives involved, to which they have all pleaded not guilty.
Read also
Top Magazine Pieces of the Week
Memecoins: Betrayal of crypto’s ideals… or its true purpose?
There’s a big division between memecoin fans and those who hate memes for undermining crypto’s ideals and public image.
68% of Runes are in the red — Are they really an upgrade for Bitcoin?
Bitcoin Runes were ‘overhyped’ and most have dropped in price, but the tokens open up a whole new world for Bitcoin.
Pickup artists using AI, deep fake nudes outlawed, Rabbit R1 fail: AI Eye
AI Tupac vs AI Drake, fake nudes outlawed, Rabbit R1 fail, AI priest defrocked, heart disease deaths cut by 31%: AI Eye.
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