SBF risks 115 years in jail, Binance’s FUD, and auditors quit crypto: Hodler’s Digest Dec. 11-17

Top Stories This Week

FTX founder Sam Bankman-Fried arrested, set to be extradited to US

Sam Bankman-Fried was taken into custody by the Royal Bahamas Police Force and is likely to stay there until February, after his application for bail was denied in Bahamian court. A second application for bail has been reportedly filed by SBF in the Supreme Court of the Bahamas. His arrest came after the United States government officially filed criminal charges against him — including eight counts of fraud. If convicted, Bankman-Fried could face 115 years in jail, but legal commentators have told us there is a “lot to play out” in the case. The domino effect resulting from FTX’s meltdown has also impacted the professional lives of Bankman-Fried’s parents, resulting in their courses at Stanford Law School being canceled. In other recent developments regarding FTX, a class-action lawsuit against Silvergate Bank was filed in California, aiming to hold the bank accountable for its alleged roles in placing FTX user deposits into the bank accounts of Alameda Research.

Binance ‘put FTX out of business’ — Kevin O’Leary

Venture capital investor Kevin O’Leary claimed at a U.S. Senate committee hearing that Binance and FTX “were at war with each other, and one put the other out of business intentionally.” The hearing was part of a larger investigation by lawmakers into FTX’s collapse, in which Binance had a significant role, O’Leary claimed. Recent days have seen Binance beset by fear, uncertainty, and doubt (FUD), resulting in a drop in the exchange’s liquidity. Crypto analytics firm Nansen reports that Binance had net withdrawals of more than $3.6 billion from Dec. 7 to Dec. 13.

Rep. Tom Emmer mulls bringing back bill aimed at reducing crypto red tape

United States lawmakers are under pressure to enact crypto regulations in light of the collapse of FTX, and Congressman Tom Emmer believes that this is “probably a good time” to re-introduce a bipartisan bill that would lift requirements for certain crypto businesses and projects to register as Virtual Asset Service Providers (VASPs). The bill, titled the Blockchain Regulatory Certainty Act, aims to remove some hurdles and requirements for “blockchain developers and service providers,” such as miners, multi-signature service providers and decentralized finance platforms.

No more proof-of-reserve checks? Auditors quietly drop crypto projects from portfolios

Two of the most prominent auditors have suddenly stopped offering crypto auditing services. At a critical moment for the crypto industry, Mazars Group removed Binance’s proof-of-reserve audits from its website just days after confirming the crypto exchange controlled 575,742 Bitcoin. The decision affected other crypto exchanges using Mazars’ services, such as Crypto.com and KuCoin. Later, Mazars explained the pause was due to “concerns regarding the way these reports are understood by the public.” Accounting firm Armanino has also ended its crypto auditing services. Armanino has worked with several crypto trading platforms like OKX, Gate.io and the embattled FTX exchange.

MetaMask to allow users to purchase and transfer Ethereum via PayPal

In another move into the crypto space, PayPal teamed up with MetaMask parent company ConsenSys to allow the purchase and transfer of Ether (ETH) through its platform. By logging into the MetaMask app, users will be able to access their PayPal account and complete transactions. Initially, only selected PayPal users in the United States will be able to test the service. Other traditional payments companies are seeking to integrate crypto into their services. In October, Western Union also filed three trademarks for managing digital wallets and exchanging digital assets.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $16,826, Ether (ETH) at $1,194 and XRP at $0.35. The total market cap is at $817.82 billion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Toncoin (TON) at 30.36%, Bitcoin SV (BSV) at 10.11%, and OKB (OKB) at 9.77%.

The top three altcoin losers of the week are Neutrino USD (USDN) at -33.77%, Trust Wallet Token (TWT) at -27.43%, and Chain (XCN) at -23.42%.