FTX Crypto Purge: Court Greenlights $3.4 Billion Settlement Blitz

Audy Castañeda
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FTX Crypto Purge: Court Greenlights $3.4 Billion Settlement Blitz

A court approved FTX’s liquidation of $3.4 billion in various crypto assets, causing the market to crash. Galaxy Digital will manage the sale, which will be made in blocks of between $50 million and $100 million per week. The liquidation plan aims to avoid market and price instability despite the size of the holdings.

In a significant development for the cryptocurrency market, bankrupt exchange FTX received court approval to liquidate its crypto assets worth more than $3.4 billion. The decision, handed down by Judge John Dorsey, overturned the objections and allowed FTX to proceed with the sale, staking and hedging of its holdings.

Following this order, Galaxy Digital, under the leadership of Mike Novogratz, will oversee the sale following the dramatic fall and subsequent bankruptcy of FTX in November 2022. Discussions regarding the liquidation of FTX are predominantly influenced by traders concerned about an oversaturated market.

The exchange had made a presentation in August, arguing that such activities would mitigate downside risks and generate returns on dormant digital assets for the benefit of estates and creditors.

FTX Authorized to Liquidate Digital Asset Holdings

FTX crypto assets include several notable holdings, with $1.1 billion in SOL (Solana), $560 million in BTC (Bitcoin), $192 million in ETH (Ethereum), $137 million in APT, $119 million in dollars in XRP and 46 million dollars in STG. However, concerns have been raised within the crypto community regarding the potential implications on the prices of these cryptocurrencies as a result of the liquidation.

On this matter, renowned crypto expert Michael Van de Poppe suggests that the market impact of FTX’s approval to sell $3.4 billion in crypto assets, combined with Consumer Price Index (CPI) data worse than what is expected, is limited.

Market participants anticipate that FTX’s selling activities, including the weekly sale of up to $200 million in assets to applicable clients, may exert some additional selling pressure, although this is likely already factored into current prices.

From the market. In particular, an important aspect of FTX’s holdings is Solana, which comprises a substantial portion of the exchange’s assets. Van de Poppe highlights that most of SOL is up for grabs, so it is not available for sale. Only approximately 7 million SOLs can be sold, most of which have already been liquidated. This factor plays a critical role in shaping market expectations, as the forecast of a massive sell-off in Solana may not materialize due to the limited supply available for sale.

FTX’s court-approved liquidation of its crypto assets marks a significant development in the cryptocurrency landscape. The implications on market prices, investor sentiment, and the broader crypto community will be closely monitored as FTX navigates the process of selling, staking, and hedging its holdings.

Crypto Market Reaction to FTX News

Bitcoin saw a slight decline following the press release, falling 0.9%. Likewise, Ethereum fell 1%, while Solana suffered a 2.2% drop. However, previous news from earlier in the week had already taken much of this impact into account.

Currently, the company has assets exceeding $3.4 billion in digital format. It also has a venture investment portfolio valued at approximately $4.5 billion, complemented by $200 million in luxury real estate in the Bahamas and $529 million in securities.

By Audy Castaneda

Companies Will Soon Have to Declare All Their Cryptocurrency Transactions for Tax Purposes

Audy Castañeda
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Companies Will Soon Have to Declare All Their Cryptocurrency Transactions for Tax Purposes

This requirement is a must, according to the European Parliament, which has just validated a new common standard, the DAC8

Last May, the Council of Europe agreed on cooperation between the tax authorities of the different countries of the Union. Registration and reporting obligations will therefore be expanded and clarified to include cryptoassets. In this regard, Swedish Finance Minister Elisabeth Svantesson stated the following:

“We strengthened administrative cooperation rules and closed loopholes that were previously used to avoid income tax. This reduces the risk of cryptoassets being used as a safe haven. for the purposes of fraud and tax evasion.”

How Cryptocurrency Taxes Are Made

To understand DAC Directive 8, one must begin with a review of the fiscal responsibility of cryptocurrencies. Every holder of crypto assets must pay taxes on the profits obtained. It can be a tax on variable income or a flat tax on capital gains, depending on the country in which the holder has his tax residence. There may even be a holding period after which the gains become tax-free.

Regulations vary greatly between EU Member States, but they all have something in common: the holder of cryptoassets must declare profits to the tax authorities, just like with any other asset.

Traditional finance has additional reporting obligations. Thus, not only individual owners must declare their profits, but also the financial institutions that store the assets. Banks even collect capital gains tax on their clients’ holdings and turn it over to the tax authorities.

“The double declaration – of both individuals and institutions – makes sense,” says Dr. Max Bernt, legal director of Blockpit. “Until now, the obligation to declare taxes related to cryptocurrencies fell on the willingness of the asset owner to provide that information. Having institutions report their clients’ tax data creates an intelligent system of checks and balances.”

A key element of the DAC8 regulation will be to add the institutional declaration to the regulations of the EU Member States.

The DAC8 Regulation in Process in the European Union

The new directives, called “DAC8” exist along the MiCA regulations, which govern cryptocurrencies in the European Union. The DAC8 is the declarative aspect, meaning that the tax services of all the countries of the European Union will commit to following the same rules.

On September 13 in Strasbourg, the European Parliament voted in favor of validating this new framework by a very large majority: 535 votes in favor and 57 votes against (60 abstentions). The DAC8 will allow tax authorities to monitor and obtain information on all cryptocurrency transactions carried out by organizations located in Member States.

Horizon 2026 in Sight

The Parliament vote was the last step to validate the DAC8. From now on, Member States have until December 31, 2025 to implement these new rules. They will come into force on January 1, 2026. In France, the measures tighten existing reporting obligations.

Currently, French individuals are required to declare their taxable transactions, that is, their capital gains. Application of DAC8 will therefore add surveillance of businesses and all operations, even simple transfers and crypto-crypto exchanges.

These new directives are framed in a context of increasing surveillance of cryptocurrency operations in Europe. Tightening reporting obligations therefore shows a democratization of the sector, but also adds difficulties for operators, who will be faced with extremely large amounts of data to report.

By Audy Castaneda

Judge Kaplan Denies MDC-Brooklyn’s Repeated Requests to Release SBF

Leonardo Perez
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Judge Kaplan Denies MDC-Brooklyn’s Repeated Requests to Release SBF

Sam Bankman-Fried, who claims not being guilty of all charges against him, is scheduled to appear in court in October.

On Tuesday, Bankman-Fried lost a bid to leave the Brooklyn Metropolitan Detention Center to more effectively prepare for his October 3 trial. His legal team argues that conditions at the facility have made it “impossible” for him to properly examine prosecutors’ evidence. However, U.S. District Judge Lewis Kaplan stated that Bankman-Fried did not clarify what specific evidence he could not access.

On September 12, Mathew Russell Lee, from Inner City Press, posted on X that “Bankman-Fried’s ‘repeated’ request to be released from MDC-Brooklyn have this afternoon been denied by Judge Kaplan – without prejudice to yet another application if more persuasive and factually grounded…”

Interestingly, despite these alleged obstacles, Bankman-Fried has not requested a postponement of the trial. Kaplan has left the door slightly ajar for a “more detailed release request,” a potential lifeline that the defendant should take advantage of.

The Reason Behind Custody

Bankman-Fried was arrested on August 11 after Kaplan found probable cause that he had tampered with witnesses, including exchanging personal writings of his former romantic partner and colleague, Caroline Ellison, with a New York Times reporter. Ellison, former CEO of Alameda Research, pleaded guilty to fraud charges and is expected to testify against Bankman-Fried.

The Justice Department has leveled a series of allegations, including the theft of billions of dollars in FTX client funds to cover Alameda’s losses, as well as to fuel Bankman-Fried’s real estate ambitions and political efforts.

In a somewhat disconcerting move, Justice Department prosecutors dropped Count 8, campaign finance charges, at the Bahamas’ request on August 14. The nature of this request and the involvement of the Bahamas remain a mystery, casting yet another shadow over the already complicated case.

No Pretrial Release for Bankman-Fried

In a court filing on Tuesday (September 12, 2023), Judge Lewis Kaplan of the United States District Court for the Southern District of New York ruled that Sam Bankman-Fried failed to provide strong arguments regarding the release request of preventive detention.

In outlining the reasons for the denial, Judge Kaplan said Bankman-Fried’s claim of not having sufficient Internet access in prison to prepare for his trial fell short, stating that the former FTX boss had “ample access” after his initial release on bail prior to said bail was revoked.

Bankman-Fried’s lawyers previously stated in a September 8 letter that the former cryptocurrency mogul was not getting very limited access to a “laptop with Internet access.” However, Kaplan, in the recent filing, said: “The defendant has not demonstrated in detail the specific materials he claims to have been unable to access personally and the reasons why such personal inability would actually impede his defense.”

According to the district judge, Bankman-Fried’s legal team could provide the necessary materials on hard drives for his client at the MDC to review. Additionally, Kaplan said no represented defendant had the right to review and inspect every discovery.

On September 19, a three-judge panel of the U.S. Court of Appeals for the Second Circuit will hear arguments on the appeal of Bankman-Fried’s detention order. As the October 3 trial date approaches, the fate of SBF and FTX hangs in the balance.

By Leonardo Pérez

Writers Sue OpenAI, Creator of ChatGPT, for Copyright Infringement

Leonardo Perez
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Writers Sue OpenAI, Creator of ChatGPT, for Copyright Infringement

For authors, artificial intelligence (AI) would have been trained with texts protected by laws without prior authorization. Last July, some 10,000 writers pointed out a situation identical to the one evident now. The film industry also faces complaints over the use of AI.

A group of writers has sued technology company OpenAI, creator of ChatGPT, for allegedly infringing copyright by using their property illegally. For the authors, Artificial Intelligence (AI) would have been trained with texts protected by laws without prior authorization.

According to the complaint, filed publicly by authors Michael Chabon, David Henry Hwang, Rachel Louise Snyder, and Ayelet Waldman, OpenAI benefited and even made financial gains after ChatGPT used the content of their productions to generate a variety of texts.

What the Lawsuit Filed by Writers Against the Creator of ChatGPT Says

The writers’ lawsuit points to a problem that the aforementioned company has been facing for a long time: using other people’s work to benefit itself. Added to this is the fact of not paying for that usufruct.

The text presented by the workers states the following:

“OpenAI’s acts of copyright infringement were intentional, deliberate, and with disregard for plaintiffs. The company knew that the data sets used to train the generative AI contained protected materials.”

Writer Rachel Louise Snyder explained her motivations for joining the lawsuit. He did it by posting on the X platform:

“I’ve joined a lawsuit against OpenAI (owner of ChatGPT) over copyright infringement. This will, I hope, put some boundaries on AI in order to protect writers not only for my generation, but for many to come.”

Not The First Time Writers Have Spoken Out Against AI

Last July, some 10,000 writers pointed out a situation identical to the one evident now. On that occasion they said that it was an act of injustice to develop Generative Artificial Intelligence (IAG) with which profits were produced.

They pointed out that this same technology was trained with protected material such as their works. That is, a kind of circle that fed back to, possibly in the not so distant future, dispense with their services.

“Generative AI is deeply based on the language, stories, styles and ideas used by authors. Millions of copyrighted books, articles, essays, and poems serve as the foundation for AI systems, and receive no compensation for this contribution.”

The accusation went further. It has been argued that AI systems directly copy material into their software without even “reading” it. The president of the authors’ guild, Maya Shanbhag Lang, requested that her constituents receive part of the profits obtained from the material that arises from their work.

“Our work may not be used without our consent, credit, and compensation. All three things are a duty,” Shanbhag said.

The film industry also faces complaints over the use of AI. Amid the recent writers’ strike in Hollywood, the Alliance of Motion Picture and Television Producers (AMPTP) proposed new protections against the growing influence of AI.

In the case of authors who work for Hollywood studios, prior to the activation of the strike, they have pointed out the new technology in a list of complaints. The recording industry’s opinion on AI was much stronger than Hollywood’s.

Universal Music Group’s almost immediate response when AI-generated music began to appear on streaming services was a forceful message to remove it, as well as warning with lawsuits.

By Leonardo Pérez

Binance.US CEO Resigns, Is the Exchange on the Verge of Collapse?

Audy Castañeda
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Binance.US CEO Resigns, Is the Exchange on the Verge of Collapse?

Binance .US, the US branch of the global crypto platform, is facing major challenges, with 100 job cuts and the departure of its CEO, Brian Shroder. The Securities and Exchange Commission (SEC) has targeted the crypto exchange with aggressive regulatory actions, leading to layoffs.

As reported by Bloomberg, Brian Shroder, CEO of Binance.US, has resigned from his position. In addition to this major leadership change, the exchange has recently eliminated around a third of its workforce, equivalent to a staggering 100 jobs.

Binance has recently faced staff layoffs and notable senior executive departures this year. On September 6, the exchange parted ways with several executives in charge of its Russian operations.

In July, Binance drew attention when its chief strategy officer, Patrick Hillman, announced his departure, along with Steven Christie, a compliance officer who had joined the company in May 2022.

Why Are Binance Senior Executives Resigning?

Earlier this year, both the SEC and the Commodity Futures Trading Commission took legal action against Binance, Binance.US, and the exchange’s co-founder Changpeng “CZ” Zhao, which involved a variety of accusations, including the operation of an illegal platform. trading, the sale of unregistered securities, violations of commodity laws and mismanagement of client funds.

Binance.us acknowledged the impact of the SEC’s actions on its business and the crypto industry at large:

“The SEC’s aggressive attempts to criminalize our industry and the resulting impacts on our business have global consequences real for American jobs and innovation. and this is an unfortunate example of it.”

The exchange has issued a statement to highlight its financial strength, according to which the measures taken guarantee that Binance is financially stable to operate flawlessly for more than seven years.

Impact on Customers and the Global Crypto Market

Binance.US has seen a huge drop in its business. Customers can no longer use US dollars to purchase cryptocurrencies on the platform. Monthly trading volumes have dropped from $10.58 billion in January to just $70 million this month.

According to Kaiko Data, in April, Binance.US had a large share of the cryptocurrency market in the United States, around 22%. At the end of June, though, it dropped sharply to only around 0.9%.

The Crypto Community Reacts

Prominent voices within the cryptocurrency community have offered their thoughts on this development.

Clemente, a well-known crypto analyst, noted that Binance.US has seen a significant reduction in daily trading volume, making it less attractive to Binance’s global operations, especially considering the regulatory and legal risks involved.

Bias, another respected trading analyst, echoed similar sentiments, suggesting that the SEC’s legal actions against Binance could be reaching a resolution.

While the outcome remains uncertain, speculation ranges from possible federal charges to substantial fines. Adam Cochran, a prominent figure in the crypto space, raised questions about the timing of Shroder’s departure, highlighting his absence from social media during the last eight months.

Cochran speculated that recent negative developments, such as sealed SEC filings and impending action by the Department of Justice, could have influenced this decision.

The cryptocurrency world, known for its volatility, has served Binance.US as a reminder that this is not just limited to market charts. The coming months will be crucial in determining whether Binance.US can regain its position as a major player in the American crypto space.

By Audy Castaneda

Binance CEO Contributed to Solve the iPhone Case

Audy Castañeda
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Binance CEO Contributed to Solve the iPhone Case

Recently, CEO of cryptocurrency trading firm Binance, Changpeng Zhao, helped spread the alarm about iPhones.

Binance CEO Changpeng Zhao recently contributed to solving an urgent issue regarding iPhone users. Apple’s flagship device owners were for some time exposed to hacker attacks due to a vulnerability.

Spyware research organization Citizen Lab was responsible for discovering the vulnerability and notifying Apple. Basically, the zero-click, zero-day technique was hidden in the computers’ software without the parent company realizing it.

Immediately, the manufacturer released a security update to patch the two vulnerabilities that would have been highly costly for users. It would have allowed criminals to extract numerous personal data, as well as to access bank accounts and cryptocurrency funds.

Binance CEO Leveraged His Influence

For the CEO of Binance, this was a very serious issue that could affect iPhone users who own digital currencies, and therefore, he contributed to solving the matter. Thus, the businessman took advantage of his influence to ask the owners of these mobile phones to update them immediately.

“The Apple iOS/iPadOS 16.6.1 updates today include a security patch to an iMessage vulnerability that allows remote code execution WITHOUT ANY INTERACTIONS from the victim. It is being exploited in the wild by the Pegasus threat group already. Update immediately,” Zhao wrote on his X account.

This breach technique is executed through the Pegasus software developed by NSO Group. The latter is an Israeli intelligence firm that developed the program to spy on people’s phones in search of enemies of the state. Either way, the Pegasus is now a weapon in the hands of hackers.

With this vulnerability, victimized users do not have to do anything. The software automatically works to extract any type of information from the computers, which would have helped criminals extract cryptocurrencies, among other belongings, from users. Hence, the CEO of Binance was quick to warn about the dangers of the software.

“Once again, civil society is serving as a cybersecurity early warning system for billions of devices around the world,” John Scott-Railton, senior researcher at Citizen Lab, posted on X (Twitter). “Including you, if you’re reading this on your iPhone. Or Mac.”

Apple Surrounded by Problems

The problems surrounding Cupertino’s company are becoming more and more persistent. Its shares’ performance on the stock market is not the best in recent weeks. Since the beginning of August, problems began. Consequently, from $195.61 per share on August 1, the price is now $179.75, according to data from Yahoo Finance.

The state of massive shares sell-off occurs just before the release of the new iPhone model, scheduled for September 12. Shares are expected to take a breather during today’s trading as a result of the announcement.

Among the reasons that affect the company’s actions, the recent blows from China should not be overlooked. The Huawei company, despite the sanctions, launched a new high-generation mobile model (Mate 60 Pro) with a 5-nanometer chip developed by local companies. This means that the firm will be able to break the sanctions and return strongly as a serious competitor to Apple in the Chinese market.

Chinese authorities reinforce the ban on iPhones among government employees. Added to this is the recent vulnerability that the CEO of Binance warned about. Taken as a whole, these are complex times for the most valuable company in the world.

By Audy Castaneda

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