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- CZ released on $175M bond, could return to Dubai 👮🇦🇪
CZ released on $175M bond, could return to Dubai 👮🇦🇪
PLUS: New Zealand dollar stablecoin goes live through local crypto exchange. Someone Got $8.4 Million in Blur NFT Marketplace's Latest Airdrop.
Manan Vora
November 22, 2023
Snapshot Web3
November 22, 2023
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Regulatory and Legal News
Binance founder Changpeng "CZ" Zhao is set to pay a $175 million bond and commit to returning to the United States 14 days before his February 23, 2024, sentencing. This arrangement could potentially allow him to return to Dubai, where he has been based for several years. The bond document requires Zhao to share his residence information with the court and specifies penalties, including fines and potential jail time, for failure to comply. The bond is related to Zhao's guilty plea for a violation of the Bank Secrecy Act. The U.S. is expected to review the bail order, and if granted, the bond conditions will be effective on November 27, 2023.
Executives from Grayscale, including CEO Michael Sonnenshein and legal chief Craig Salm, met with the U.S. Securities and Exchange Commission (SEC) to discuss details of its Grayscale Bitcoin Trust (GBTC) and its conversion to a spot Bitcoin exchange-traded fund (ETF). The SEC memo revealed discussions about NYSE Arca's proposed rule change to list and trade GBTC shares. Grayscale has entered into a transfer agency and service agreement with BNY Mellon, which will act as the agent for GBTC. The SEC recently issued a mandate for a review of its decision to deny Grayscale's bid to convert GBTC to a spot ETF.
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Innovation and Launches
Easy Crypto, a New Zealand-based crypto exchange, has launched the New Zealand Dollar Stablecoin (NZDD) in collaboration with Australian blockchain development firm Labrys. The NZDD stablecoin will be backed 1:1 with cash in trust and regulated by the New Zealand Financial Markets Authority. Initially launched on Ethereum, the stablecoin plans to expand to other networks, including Polygon, BNB Smart Chain, Arbitrum, Optimism, and Coinbase’s Base. Easy Crypto aims to provide New Zealanders with a stablecoin pegged to their local currency, making it easier for them to maximize profits without relying on U.S. dollar-pegged tokens. The stablecoin launch is accompanied by a multicurrency self-custody wallet secured with multiparty computation cryptography.
Circle has introduced a "bridged USDC standard" that streamlines the process of launching its stablecoin, USDC, on new networks. The standard allows developers to launch the token through a two-phase process. In the first phase, the third-party developer controls the token contracts, backed by a native version on another network. In the second phase, Circle takes control of the contracts, and the token becomes backed directly by Circle's reserves. This standard eliminates the need for migrations and allows unofficial tokens held in a user's wallet to become official if developers and Circle decide to make the token official in the future.
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NFT, Gaming and Metaverse
During the latest airdrop in the Blur NFT marketplace's Season 2, a trader with the Ethereum wallet hanwe.eth received over $8.4 million worth of airdropped BLUR tokens. The trader was particularly active across NFT bids, listings, and lending activities during Season 2. Hanwe received 22.85 million BLUR tokens, the largest share of rewards for Season 2. Blur's token, BLUR, was valued at $0.37 at the time of the announcement, up about 8% over the past day. The upcoming Season 3 of Blur will be powered by a new Ethereum layer-2 network called Blast, with native yield backed by Paradigm and Standard Crypto.
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Scams and Hacks
The U.S. Department of Justice has seized around $9 million worth of USDT after Tether froze funds connected to a criminal organization involved in romance scams. The funds seized are part of Tether's efforts to freeze $225 million worth of USDT in "external self-custodied wallets" linked to the scam. The funds were tied to an organization involved in romance scams that convinced victims to invest in legitimate businesses. Tether's freezing of funds and the subsequent DOJ seizure highlight efforts to combat illicit activities in the cryptocurrency space. The U.S. government plans to announce "significant cryptocurrency enforcement actions" in coordination with the Treasury and CFTC.
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Interesting Reads
Binance and its founder, Changpeng "CZ" Zhao, have admitted to violating United States laws related to money laundering and terror financing, agreeing to pay $4.3 billion in fines. The U.S. Justice Department's investigation into Binance started years earlier, and in the meantime, other U.S. regulatory agencies launched their own actions against the cryptocurrency exchange. The penalties include fines imposed on Zhao and other individuals personally. The enforcement actions involve charges related to trading irregularities, market manipulation, unregistered securities sales, allowing U.S. customers to use the Binance exchange, and more. The settlement follows months of investigations and legal actions by various U.S. authorities.
Bitcoin dominance, often viewed as a key indicator of market strength, may be a misleading metric. The metric, representing Bitcoin's share of the total market capitalization of all cryptocurrencies, is largely influenced by trading activity between Bitcoin and Ether (ETH). The dominance metric can be distorted when major shifts occur in the ETH/BTC trading pair. The stablecoin Tether's (USDT) market cap growth further complicates the interpretation, as it often represents sidelined capital rather than direct cryptocurrency market activity. The dominance chart may not provide a comprehensive view of Bitcoin's position in the market, and a more nuanced approach to market metrics is suggested.
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Resource of the Day
Entrepreneurs and professionals entering the Web3 space are advised to temper expectations and plan for gradual success, as overnight success is rare in the crypto ecosystem. Community-building is emphasized as a critical aspect of success in Web3, as a strong community can provide early adoption, feedback for product-market fit, and active participation in project improvement. Other insights include the importance of diverse skills in the Web3 space, the significance of reputation as an asset, the rapid evolution of regulatory environments, the priority of security in all steps, the need to avoid emotion-driven decisions, the cultivation of healthy skepticism, and the constant change in the Web3 landscape. Additionally, experts recommend exploring Web3 in its entirety, growing a brand and the industry through specialized knowledge, understanding that Web3 isn't truly the "Wild West," acknowledging the constant change in the industry, and building a minimum viable product before approaching investors.
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Miscellaneous
Binance has appointed Richard Teng, its head of regional markets outside the United States, as the new CEO, following the resignation of founder and former CEO Changpeng "CZ" Zhao. The change comes after CZ and Binance agreed to a plea deal with the U.S. Department of Justice over alleged Anti-Money Laundering violations, resulting in a $4.3 billion settlement. CZ is barred from serving as an executive at any cryptocurrency company, faces a $50 million fine, but retains his shares and avoids jail time. Teng, with over three decades of financial services and regulatory experience, is tasked with leading Binance through its next phase of growth, focusing on security, transparency, compliance, and growth.
Creditors of Mt. Gox, the defunct Bitcoin exchange that suffered a hack in 2014, have received emails from the trustee, Nobuaki Kobayashi, hinting at the commencement of repayments. The email suggests that the first repayments to creditors in cash will start in 2023 and continue into 2024. Social media reports indicate that the news has sparked optimism among the Mt. Gox community, although some express skepticism due to the history of repayment delays. The trustee also announced the redemption of ¥7 billion (approximately $47 million) in trust assets for the repayment of claims.
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The information provided in this newsletter is for informational purposes only and should not be interpreted as investment advice, endorsement, or recommendation. Cryptocurrency investments carry significant risk due to their volatility. You should consider your financial situation, investment goals, and risk tolerance before making any investments. We strongly recommend consulting a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
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