Decentralized Diaries for the Week of 12/11/23


How far is too far for the cryptospace?

Binance may have more issues in the months to come with unsealed filings, noting stricter monitoring by the Feds.

Changpeng Zhao, the former CEO of Binance, is spending Christmas, New Years, and Valentine’s Day in the United States.

He will then face his fate.

There’s some progress in the ETF space.

Nobody knows what’s happening there (only SEC Chairman Gensler. Perhaps.)

And lawmakers in Washington (finally) got it together and cooperated on a few laws.

Plus, the U.K. central bank thinks tokenization activities are riskier than they look.

These are your decentralized diaries!

Bitcoin Hit $44k, Ranging at $41k

Bitcoin prices are cooling off from a $44,376.89 high to a $41,329.86 low. As of 12/11/23, Bitcoin prices are at $41,319.34.

The altcoins are also in similar straits.

Ethereum (ETH) is at $2,198.17, Avalanche (AVAX) is at $36.66, Polkadot (DOT) is at $6.61, Solana (SOL) at $69.62, and Chainlink (LINK) at $14.70.

A Federal Judge Ordered Changpeng Zhao to Stay in the U.S.

Seattle district court Judge Richard Jones ordered that Changpeng Zhao, Binance’s former CEO, remain in the United States pending his February 24, 2024, sentencing.

Agreeing with prior prosecutorial arguments over Changpeng’s flight risk status, Judge Jones indicated he has “favored status” with the United Arab Emirates (UAE), his abode.

Changpeng faces up to eighteen months in prison.

He also agreed not to appeal any sentence up to that limit as part of his settlement.

Unsealed DoJ filings indicate that Binance may not yet be in the clear.

According to the filings, the cryptocurrency exchange will face multiple levels of ongoing scrutiny and monitoring to ensure compliance.

Himalaya Exchange Sued the DoJ as Part of Efforts to Recover Frozen Funds

The customers of Himalaya Exchange via FormerFeds, a litigation firm, filed a lawsuit against the Department of Justice.

The move is part of a series of actions to secure the release of $634 million seized by the DoJ and FBI.

According to Bradford L. Geyer, the plaintiff’s representative, there was no evidence of mismanagement of funds.

Also, the lawsuit indicates that the seizure is antithetical to American interests.

The lawsuit also shed light on the effect of the actions on those who sought refuge from the Chinese Communist Party’s influence.

Multiple Crypto ETF Filing Applications Had Some Progress

There was some movement in the crypto ETF space, with the SEC playing its usual role.

The regulator postponed its decision on Grayscale’s spot Ether ETF till January.

Fidelity and Cboe BZX’s representatives met with SEC officials over rule changes and amendments for Fidelity’s Wise Origin Bitcoin Trust.

In related news, BlackRock warned in its latest Bitcoin ETF filing update that digital assets faced an uphill challenge per trading if the asset class received classification as securities.

Also, according to a recent filing, an unnamed investor purchased 4,000 shares for $100,000 at $25 per share on October 27, 2023.

VanEck’s S-1 form indicates its ETF has the “HODL” moniker (short for “Hold On for Dear Life”, a common phryase in the crypto community).

According to an SEC memo, BlackRock also interacted with the regulator.

Lawmakers Passed Bipartisan Legislation Combating Crypto‘s Use in Anti-Terrorism Funding

Terrorists will soon have more issues to deal with per crypto transactions with the passing of a new bipartisan bill seeking to counter funding via digital assets.

Sponsored by Sen. Mitt Romney (R-UT), Sen. Mark Warner (D-VA), Sen.Mike Rounds (R-SD), and Sen. Jack Reed (D-RI), the “Terrorism Financing Prevention Act” introduces sanctions to entities that aid terrorist organizations.

The entities are also subject to a provision of the “Crypto-Asset National Security Enhancement and Enforcement (CANSEE) Act.”

In related news, on Capitol Hill, the House Committee on Energy and Commerce unanimously passed the “Deploying American Blockchains Act of 2023″(HR 6572).

The Act mandates the Secretary of Commerce to take action to preserve America’s lead and competitiveness in the blockchain industry.

A recently submitted bill (5747) in New Jersey suggests classifying all cryptocurrencies issued and sold to institutional investors as securities.

Tether Unveiled Wallet Freezing Policy

Tether, the USDT stablecoin issuer, revealed a policy that allows it to freeze sanctioned wallets.

The actions will only affect people and entities on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) List.

In related news, the Bitcointalk forum’s moderators announced the prohibition of threads and conversations regarding mixers in the new year.

The Bitcointalk forum is the world’s first cryptocurrency message board.

A Bank of England Report Identified Tokenization‘s Systemic Risks

Across the pond, according to the recent Bank of England (BoE) financial report, tokenization on blockchains poses higher risks to ecosystems.

The report noted an increased positive response from banks towards tokenization and indicated that the increasing scope and pace of tokenization activities increased the interconnected nature of the markets.

As for recommendations, the BoE called for international coordination and iterated that it was monitoring developments in the sector.