Bitcoin held above $23,000 after the Fed meeting, reports emerged of investigations into Coinbase and Kraken, Changpeng Zhao filed a lawsuit against Bloomberg, and other developments from the past week.
Fed raises key rate. Bitcoin holds above $23,000
On Wednesday, July 27, the US Federal Reserve (Fed) raised the target range for the federal funds rate by 75 basis points, to 2.25–2.50%. On July 28, the Bureau of Economic Analysis said that for the April–June period the country’s GDP shrank by 0.9% relative to Q1 2022.
Leading cryptocurrencies reacted to the news with gains. Over the past week Bitcoin rose by almost 6%, Ethereum by 10%. At the time of writing, the first asset trades near $23,750, the second around $1,700.
All digital assets in the top 10 by market cap finished the week in the green. Polkadot (DOT) posted the strongest move, rising by nearly 21%.
Experts’ opinions on the outlook were divided. Former Goldman Sachs executive and macro investor Raul Pal said that the market is preparing for a trend reversal as money supply grows.
In Guggenheim Partners they warned about possible declines in valuations. According to the firm’s chief investment officer Scott Minerd, the industry has not yet “cleared” itself of troubled participants.
Bloomberg: SEC opens investigation into Coinbase
The U.S. Securities and Exchange Commission (SEC) has opened an investigation into Coinbase Global over possible access being provided to U.S. residents to trade digital assets that could be regarded as securities, the agency found.
The information weighed on Coinbase’s stock. On July 25-26 COIN fell more than 20%. As a result, Cathy Wood’s ARK Invest sold a total of 1.41 million Coinbase shares worth about $75 million. However, the subsequent rebound in Bitcoin and the market offset part of the loss.
Changpeng Zhao files suit against Bloomberg for defamation
The Binance chief executive Changpeng Zhao filed a lawsuit in Hong Kong against Bloomberg Businessweek, accusing it of defamation.
The executive claims that the Chinese edition’s 250th issue, entitled “Changpeng Zhao’s Financial Pyramid,” contains material that defames and harms the image of the Binance CEO.
AntPool invests $10m in Ethereum Classic ecosystem amid PoS transition
The Bitmain-affiliated mining pool AntPool announced a $10m investment in the Ethereum Classic (ETC) ecosystem with plans to increase funding in the future. Over the past week ETC’s price rose by more than 60% and returned to the top-20 by market cap.
Community interest in ETC is fueled by news of Ethereum’s upcoming shift to Proof-of-Stake after the final merge on the Goerli testnet. Another key factor is the expected migration of miners to alternative networks. Previously Vitalik Buterin spoke of Ethereum Classic’s attractiveness to miners.
US media: authorities suspect Kraken of violating sanctions
OFAC of the U.S. Treasury could fine the exchange for sanctions violations. The investigation has been ongoing since 2019, reported in the NYT.
According to the publication, inside communication, Kraken CEO Jesse Powell circulated a table of verified accounts. It showed that the platform had 1,522 users in Iran, 149 in Syria and 83 in Cuba. The document was later removed.
Class action filed against Celsius Network in the United States
The suit is brought by law firm Bragar Eagel & Squire, P.C. Lawyers represent individuals and entities that invested in Celsius. Among the defendants are Celsius Lending LLC, Celsius KeyFi LLC and CEO Alex Mashinsky. They allegedly violated the Securities Act and misled investors about “their financial products.”
This week Celsius filed a motion to bring in former chief financial officer Rod Bolger as an advisor in bankruptcy proceedings. The company also suffered a data breach caused by a compromise of the Customer email service.
What to discuss with friends?
- The British man who lost 7,500 BTC will engage Boston Dynamics’ robodogs in the search.
- GameStop were accused of selling an “ethical” NFT.
- The meme token Teddy Doge depreciated by 100% in 24 hours .
- Solana will open a physical store in a prestigious New York mall.
Babel Finance loses $280m trading client funds
The crypto-financial services provider Babel Finance lost more than $280m due to ill-advised trading decisions with client funds. During the Bitcoin price drop from $30,000 to $20,000, uninsured positions worth 8,000 BTC and ~56,000 ETH were liquidated.
FTX offered Voyager clients an accelerated route to recover funds
FTX offered Voyager Digital clients accounts on the exchange where proceeds from their bankruptcy claims would be accumulated. If approved by the court, they would gain access to assets earlier than in a standard liquidation process.
This week, Ethos founder and former Voyager head of innovation Shingo Lavin filed an objection in court to the proposed restructuring plan by the crypto broker.
Lavin outlined his own eight-point plan for reorganizing the company, including the dismissal of Voyager’s leadership, ending lending-related operations, and launching a recovery token to pay obligations.
Lido community rejects sale of 10m LDO to Dragonfly Capital; Harmony users win compensation plan revision
The Lido Finance community voted against the proposal to sell 10 million LDO tokens to Dragonfly Capital. The proposed token sale was part of a plan to diversify Lido’s treasury and did not include a lock-up period.
Harmony founder Stephen Tse said the team would revisit the compensation offer to victims of the Horizon cross-chain bridge hack worth $100 million by issuing additional native ONE tokens.
The previous plan contemplated a hard fork and two payout variants — 2.4 billion ONE (to compensate 50% of the damage) or 4.97 billion ONE (to compensate 100%). The community criticized both options, as the additional ONE issuance could weigh on the token’s price.
Michael Saylor notes Ethereum may be unstable over the next three years
MicroStrategy chief executive Michael Saylor, speaking at the Blockchain Economy Summit in Istanbul, criticized Ethereum in the wake of The Merge. He said stabilization of the second-largest cryptocurrency may require more time.
He noted institutional investors want to see a finalised protocol that operates without hacks for 5–10 years. He allowed that Ethereum could be volatile over the next three years.
Also on ForkLog:
- The Cardano delayed the activation of the Vasil hard fork.
- In El Salvador they touted the benefits of Bitcoin legalization.
- The Aave community approved the launch of the decentralized stablecoin GHO.
- In Tether they pledged to eliminate the share of commercial paper in reserves.
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