SBF Faces Criminal Charges, Bitcoin Market Cap Surpasses Meta, USDC Regains $1 Peg – July 2024

Most sensible Tales This Week

Sam Bankman-Fried petitions courtroom to prioritize

reimbursing his felony charges

Sam Bankman-Fried (SBF) is seeking to utilize FTX’s company insurance policies to cover his legal expenses, according to a court filing on March 15. The filing states that the policies provide “priority of payment” to insured individuals like Bankman-Fried, potentially placing the former CEO at the top of the FTX payout list. Another headline reveals that Bankman-Fried’s inner circle received $3.2 billion in payments and loans from FTX-linked entities. These amounts exclude over $240 million used for the purchase of luxury properties in the Bahamas, political and charity donations, as well as “substantial transfers” to non-FTX subsidiaries. Additionally, FTX debtors reported $11.6 billion in claims and $4.8 billion in assets, indicating a $6.8 billion gap in the exchange’s balance sheet.

Signature Financial institution closed through New York

regulators for now not offering information

Crypto-friendly Signature Bank was officially closed down and taken over by the New York Department of Financial Services on March 12 for “failing to provide consistent and reliable data.” The bank has been under investigation by two United States government bodies to determine if it took adequate measures to monitor and detect potential money laundering by its clients. Former U.S. House of Representatives member Barney Frank suggested that New York regulators closed Signature as part of a seeming display of power against the crypto market.

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USDC bounces again towards $1 peg after Fed

announcement

Circle’s stablecoin, USD Coin (USDC), regained its $1 peg following positive developments regarding Circle’s $3.3 billion worth of reserves held at Silicon Valley Bank and its new banking partners: redemptions of USDC will now be processed by Cross River Bank and BNY Mellon. The stablecoin depegged from the U.S. dollar on March 10 following SVB’s sudden collapse, triggering the depeg of many other stablecoins. This depegging led to an increase in loan repayments over the weekend, allowing borrowers to save more than $100 million on loans.

US Fed declares $25B in investment to backstop banks

United States federal regulators announced “decisive actions” to “fully protect depositors” at both Silicon Valley Bank and the now-shuttered Signature Bank, including $25 billion worth of funding aimed at backstopping banks and other depository institutions. The Federal Reserve is investigating the failure of Silicon Valley Bank, including an internal probe into how the Fed supervised and regulated the financial institution. Amid the sudden collapse, SVB’s U.K. arm was sold to HSBC for 1 British pound ($1.21), with loans of 5.5 billion pounds ($6.7 billion) and deposits of 6.7 billion pounds ($8.1 billion).

Bitcoin marketplace cap flips tech massive Meta, widens

hole on Visa

Despite a turbulent week for crypto following the downfall of Silicon Valley Bank and Signature Bank, Bitcoin’s market cap has managed to surpass that of tech giant Meta. On March 14, Bitcoin’s market cap reached $471.86 billion, surpassing Meta’s $469 billion, according to data from Companies Market Cap. The leading cryptocurrency climbed to the eleventh spot among top assets by market cap, sitting behind electric vehicle maker Tesla. Bitcoin’s market capitalization has added over $190 billion in 2023, outperforming top Wall Street bank stocks, particularly as fears of a global banking crisis are rising.

Winners &Losers

At the end of the week, Bitcoin (BTC) is at $27,571, Ether (ETH) at $1,823, and XRP at $0.38. The total market cap is at $1.18 trillion, according to CoinMarketCap.

Among the largest 100 cryptocurrencies, the top three altcoin gainers of the week are Conflux (CFX) at 186.02%, Mask Network (MASK) at 120.56%, and Stacks (STX) at 102.97%.

The top three altcoin losers of the week are UNUS SED LEO (LEO) at -2.22%, Tether (USDT) at -0.35%, and Binance USD (BUSD) at -0.16%.

For more information on crypto prices, be sure to read Cointelegraph’s market analysis.

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Most Memorable Quotation

“The new shutdowns of financial institutions may be the opportunity for crypto to achieve mass adoption.”

Johnny Lyu, CEO of KuCoin

“We believe that parts of the future of finance will be blockchain-enabled, and we’re already witnessing rapid change in the tokenization market.”

— Drew Bradford, Executive General Manager, Markets at National Australia Bank

“Mainstream adoption by major companies and their customers is imminent due to recent advancements in scaling and privacy technology.”

Mark Smargon, CEO of Fuse Community

“Drop the blockchain/NFT/play-to-earn (P2E)/metaverse/Web3 talk. […] Players just want an entertaining gaming experience—not a science lesson.”

— Peter Bergstrom, former producer of Age of Empires & CEO of BitBlock Ventures

“We’re going to have a credit crunch in the U.S. and globally. […] You need to be long gold and silver […] and you need to be long Bitcoin.”

“I believe regulators are using crypto as a scapegoat for their own lapses in oversight of traditional banking.”

— Cathie Wood, CEO of ARK Invest

Prediction of the Week

Bitcoin Price Hits $27K in New 9-Month High as Fed Injects $300B Bitcoin reached new nine-month highs on March 17, with BTC/USD hitting $27,025 on Bitstamp before consolidating. This surge was fueled by recent developments in the U.S. banking crisis, which have buoyed crypto markets. Data from Cointelegraph Markets Pro and TradingView revealed that a key catalyst for the recent upside was the Federal Reserve’s balance sheet update, showing nearly $300 billion injected into the economy as part of the response to the banking crisis.

Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm 8, identified key levels to watch for Bitcoin.

“Chopperino land on Bitcoin means we’ll likely see some sideways action,” he wrote on Twitter. “Needs to hold $26K. If that holds, $28–30K is next. If it loses $26K, I’m looking around $25K for some longs. Pretty straightforward.”

FUD of the Week
Euler Finance hacked for over $195M in flash mortgage

assault

Lending protocol Euler Finance faced a flash loan attack on March 13, with the exploiter executing multiple transactions to steal nearly $196 million in stablecoins DAI and USDC, as well as staked Ether and wrapped Bitcoin. The attack has been labeled the largest hack of 2023 so far. Following the incident, a portion of the stolen funds began being transferred to the crypto mixer Tornado Cash shortly after a $1 million bounty was announced for information leading to the hacker. As of March 18, only a small portion of the funds have been recovered—approximately 3,000 Ether ($5.4 million).

Europol seizes $46M from crypto mixer after $2.88B

allegedly laundered

Law enforcement agency Europol has seized assets of cryptocurrency mixer ChipMixer worth $46 million for its alleged involvement in money laundering activities. ChipMixer’s website has been shut down, and four servers hosting the application have been seized. Europol claims that ChipMixer has laundered over 152,000 BTC ($2.88 billion) since its inception in 2017.

FBI, NY government probes cave in of TerraUSD

stablecoin

The U.S. Department of Justice is reportedly investigating the collapse of the TerraClassicUSD (USTC) stablecoin, which led to a $40 billion wipeout within the Terra ecosystem last May. Former staff at Terraform Labs have been interrogated in recent weeks by U.S. agencies, including the FBI. The investigation parallels a lawsuit filed against Terraform Labs and its founder, Do Kwon, by the U.S. Securities and Exchange Commission in February, which alleges deceptive practices towards investors.

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Cointelegraph Magazine writers and journalists contributed to this newsletter.