- The most significant development of the week was the agreement reached between the U.S. Department of Justice and the world’s largest cryptocurrency exchange, Binance, and its CEO Changpeng Zhao, on November 21.
- On November 21, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against the cryptocurrency exchange Kraken, accusing it of violating securities laws.
- According to COINOTAG on November 23, BlackRock, the world’s largest asset management company, met with the SEC to discuss a potential physically backed Bitcoin
ETF.
The Bitcoin and cryptocurrency world is entering the last week of November after a challenging week. What can investors expect?
Summary of Last Week: Highlights!
The most significant development of the week was the agreement reached between the U.S. Department of Justice and the world’s largest cryptocurrency exchange, Binance, and its CEO Changpeng Zhao (commonly known as “CZ”). CZ pleaded guilty to violating U.S. anti-money laundering laws as part of the agreement. As part of the deal, Zhao stepped down from the CEO position. Binance agreed to pay a fine of over $4 billion, and CZ admitted to the failure to implement effective anti-money laundering procedures within Binance. Currently, CZ faces unspecified legal consequences, and he is banned from participating in Binance’s operations for three years.
SEC Files New Lawsuit Against Kraken for Unregistered Trading Platform Claim
On November 21, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against the cryptocurrency exchange Kraken, accusing it of violating securities laws. The SEC alleged that “Kraken acted as an intermediary, broker, exchange, and clearing agency without registering with the SEC in any capacity concerning these crypto assets. By doing so, Kraken created risks for investors and collected billions of dollars in fees and transaction revenue without meeting or even accepting the requirements designed by U.S. securities laws to protect investors.”
The SEC also mentioned that Kraken sometimes mixed customer crypto assets with its own assets valued at over $33 billion and paid operational expenses directly from customer cash balances valued at over $5 billion. The SEC seeks a judgment containing a permanent injunction, a prohibition from violating securities laws, and orders to return ill-gotten gains.
In response to the lawsuit filed by the SEC, the cryptocurrency exchange Kraken released a statement stating that it disagrees with the SEC’s allegations and plans to quickly defend its position. Kraken emphasized that the SEC’s allegations would not affect its current product and service offerings and assured that the company would continue to provide uninterrupted service to its customers. Additionally, Kraken pointed out that despite the SEC’s repeated requests for cryptocurrency exchanges to register, there is no clear legal basis or established registration path supported by current laws. Kraken stated that it would continue to defend the effective regulation of the U.S. market for digital assets with unique risks.
F2Pool Acknowledges Filtering Four Bitcoin Transactions Subject to U.S. Sanctions
On November 22, according to a message sent by Bitcoin developer 0xB10C, it is speculated that the Bitcoin mining pool F2Pool deliberately filtered addresses subject to U.S. Treasury sanctions in recent weeks. The author mentioned that there could be various reasons for transactions not being included in blocks, such as differences in how transactions spread across the network, each node having its effective transaction set, and mining pools prioritizing private payments. However, in the case of F2Pool not including these four transactions, the author analyzed the fee rate distribution of missing transactions, alternative transactions not included (the previous ones offering higher miner fees), block space availability (sufficient space to host but actually not included), and concluded that it was a deliberate filtering situation.
As reported by COINOTAG on November 24, F2Pool acknowledged that it filtered Bitcoin transactions from addresses subject to U.S. Treasury sanctions. Following strong opposition within the community after the post by Bitcoin developer 0xB10C, founder Wang Chun admitted that these transactions were intentionally filtered using compliance filters. F2Pool announced that these transactions would be disabled until a consensus was reached in the community. F2Pool stated that it would continue to track the information and, if the hacker did not return 90% of the stolen funds on November 25 to an address starting with 0x8180, it would continue to track the information.
Bloomberg Intelligence Predicts Potential Size of $100 Billion for Spot Bitcoin ETF
On November 20, Bloomberg Intelligence estimated that physically backed Bitcoin ETFs, potentially involving major companies such as BlackRock, Fidelity, and Invesco, could reach a value of $100 billion. According to an internal source, Galaxy Digital, which applied together with Invesco, held a conference meeting with 300 investment professionals earlier this month discussing how to allocate Bitcoins when launching physically backed Bitcoin ETFs.
As reported by COINOTAG on November 23, the world’s largest asset management company BlackRock met with the SEC to discuss a potential physically backed Bitcoin ETF. Bloomberg analyst Eric Balchunas stated that there is currently no issue with approvals because issuers rejected the SEC’s cash redemption requirement. Cash redemption means that investors’ shares will be sold by the fund company and redeemed in cash. BlackRock and Ark Invest firmly support in-kind redemption, where market makers receive Bitcoin as redemption and then sell it for cash. Analysts suggest that this could be more tax-effective for investors.
MtGox Trustee Board Plans to Start Repaying Creditors Soon
On November 22, some MtGox creditors received an email from the bankruptcy trustee stating that they plan to start making payments to creditors soon and attempt to make cash payments in 2023. However, due to the large number of rehabilitation claims and different types of claims that will continue until 2024, which require different preparation and processing times, repayments will extend until 2024. Mt. Gox will distribute assets, including 142,000 BTC, 143,000 BCH, and others.
Tether and OKX Announce the Largest USDT Freeze in History
On November 20, Tether announced that, in collaboration with OKX and the Department of Justice, they voluntarily and proactively froze approximately 225 million USDT in a self-custodial wallet associated with an international human trafficking group responsible for a global Ponzi scheme in Southeast Asia. This action constitutes the largest USDT freeze in history.
Sam Altman Returns to OpenAI as CEO, New Board of Directors Formed
According to Bloomberg on November 22, Microsoft stated that it would allow Sam Altman to return to OpenAI actively if certain conditions were met. These conditions included expanding the board of directors of OpenAI and increasing the required level of experience for its members. Microsoft has invested approximately $13 billion in OpenAI and expects a new board to emerge. Altman has initiated discussions with members of the OpenAI board and interim CEO Emmett Shear to explore the possibility of the reinstatement of the former CEO and founder.
Shortly after, OpenAI announced that Sam Altman would return as CEO and that they had reached a preliminary agreement to form a new initial board of directors consisting of Bret Taylor (Chairman), Larry Summers, and Adam D’Angelo.
In a post, Sam Altman said: “I love OpenAI, and everything I have done in the last few days has been to keep the team and its mission strong. When I decided to join Microsoft on Sunday, it was clear that this was the best option for me and my team. With the new board and the support of Satya, I look forward to continuing our strong foundation of collaboration with Microsoft.”
KyberSwap Under Attack, Loses Over $47 Million
On November 23, it was reported by COINOTAG that the decentralized exchange (DEX) aggregator KyberSwap was likely under attack, resulting in losses of approximately $47 million. These funds included $20.7 million on Arbitrum, $15 million on Optimism, $7 million on Ethereum, $3 million on Polygon, and $2 million on Base. According to the DeFi tracking firm, the attacker transferred 1,000 WETH (approximately $2.06 million) to an address starting with 0x84e on the Arbitrum chain, which had previously interacted with an exploit of Indexed Finance about 705 days ago.
The KyberSwap team published on-chain messages stating that they knew how the attacker organized the attack based on their information. They suggested an agreement where they would allow the hacker to keep 10% of the stolen funds as a reward for the safe return of all user funds. KyberSwap stated that they would continue to track the information, and if the hacker did not return 90% of the stolen funds to an address starting with 0x8180 on November 25, they would continue to track the information.
Over $100 Million Stolen from HTX and HECO BRIDGE
On November 22, HTX Hot Wallet and HECO BRIDGE were hacked, resulting in a theft of over $100 million, including $86 million from HECO BRIDGE and $12.4 million from the HTX Hot Wallet address (TU1ZA). The stolen funds were converted to ETH and TRX through DEXs by the hacker. Huobi is trying to determine the source of the attack, and temporarily suspended deposits and withdrawals for HTX on the Huobi platform and HECO chain gateway. The losses from the HTX Hot Wallet will be fully compensated.
What to Expect Next Week?
Next week, November will come to an end, and December, the last month of the year, will begin. In the last days of November, the crypto market is awaiting two important economic data: the 3rd quarter growth reports and personal consumption expenditure data in the U.S. These two pieces of data could create volatility in Bitcoin and cryptocurrencies.
Apart from economic data, on December 1, Federal Reserve Chairman Jerome Powell will make a speech. Powell’s economic statements will be closely monitored by investors. If there are hints about the Fed’s future policies during the speech, it could lead to market volatility.
You can find other crypto developments in the calendar shared below!
Important developments of next week ⚡️#US #Bitcoin #BTC $BTC #FED #Crypto pic.twitter.com/VOEfkXcHil
— COINOTAG NEWS (@coinotagen) November 26, 2023
