From the erratic ups and downs in bitcoin and ethereum value, to the explosion in initial coin offerings, and the unstoppable demand for mining-ready GPUs, cryptocurrency has become an inescapable story. It's also become increasingly difficult to make sense of — as the industry expands, new currencies sprout up, and companies form overnight. Check here for the complete coverage of bitcoin, ethereum, litecoin, monero, Venezuela's petro, cryptocurrencies at large, and the ways that ICOs and the underlying blockchain technology are helping shape a burgeoning industry and giving life to a new wave of startups and entrepreneurs.
I’m pretty skeptical that the “crypto voter” exists — there are plenty of other issues that weigh higher in people’s minds — but there’s a lot of spending happening. That said, Sam Bankman-Fried spent a great deal and got nothing, so...
[The New York Times]
The settlement will resolve the SEC’s lawsuit that accused the bankrupt crypto firm and its former CEO Do Kwon of securities fraud. In addition to the hefty penalty, the settlement bans Terraform Labs and Kwon from buying or selling crypto assets. Kwon is still awaiting extradition in Montenegro.
A few years ago, Facebook accused Epoch Media Group of laundering pro-Trump posts using networks of fake accounts. Today, prosecutors announced the arrest of The Epoch Times CFO Bill Guan and accused him of laundering at least $67 million for himself and the company using gift cards and crypto.
The “media company” allegedly claimed the money came from donations, profits, or subscriptions, as NBC News reported last year.
People who participated in Gemini’s lending program, which suspended withdrawals in the wake of the FTX collapse, will get “approximately 97 percent” of their money. Perhaps predictably, the Earn program also had some legal issues.
Ryan Salame, a top lieutenant at FTX, got over seven years in prison. He’s the second FTX official sentenced, after SBF himself, and did not cooperate with the government — unlike several other members of the inner circle.
New York Attorney General Leticia James announced the state settled with Genesis, which it sued in October 2023, along with the crypto trading firm Gemini, owned by Cameron and Tyler Winklevoss. Genesis, one of the largest lenders to FTX, filed for bankruptcy in January last year.
James’ office reached a $1.1 billion settlement with Gemini in February.
Perhaps of note: their Binance accounts and their Deltec accounts; Deltec was allegedly key in giving FTX secret money to buy Tether. Criminal complaint here.
And though the charges are for laundering at least $73 million, the wallet in question received $341 million between April 2021 and the date of the indictment. Hm!
Canada’s financial intelligence agency issued the fine after finding that Binance didn’t comply with the country’s anti-money laundering and terrorist financing laws. In April, Binance CEO Changpeng Zhao was sentenced to four months in US prison for not doing enough to prevent money laundering on the crypto exchange.
Binance posted a blog in which Chief Executive Officer Richard Teng claimed Binance was approached about a “secret” payment “to make these issues go away.” Nigerian officials reject these claims in the strongest terms.
NBC News reports that a former Block employee is talking to the feds about apparent sanctions violations.
Prosecutors are allegedly finding that Square and Cash App failed to report certain Bitcoin, credit card transactions, and dollar transfers — some originating from terror groups. Block leadership apparently knew, according to internal documents.
You can read the details of Ver’s alleged misconduct here, but, with this news arriving as Binance founder Changpeng Zhao was sentenced for failing to establish adequate anti-money laundering protections, I’m reminded of this line from Ver, quoted in 2014:
“Money laundering is not a crime,” Ver says. “It’s just because certain men with guns don’t like what other people are doing with their own money, so they decide it’s okay to lock those people in a cage.
[www.justice.gov]
The rest of us are asked to remain sitting while he leaves. Unclear if there will be a press conference after.
The defense is requesting that Zhao be designated to SeaTac, at a date to be specified by the court. Zhao promises before the court that he will show up at the time, which is not yet decided.
We are taking a 10 minute break, but there are a few more matters to be ironed out.
But Jones isn’t going to take the government’s sentencing recommendation. He hasn’t yet announced the exact sentence.
He’s leaning forward, listening intently, and occasionally nodding.
However, the scale of the offense is remarkable, and Jones wants to consider deterring future crime. The letters sent to the court on Zhao’s behalf will play a significant role in the sentencing.
The court recognizes that he came voluntarily to the US, has not previously broken laws, and that he took “extraordinary steps and significant steps” in cooperation with law enforcement. But the nature of the events was “aggravating.”
Zhao says he wants to create a platform for online education for underprivileged kids. “I find this new work extremely rewarding and meaningful.”
Addressing the courtoom before being sentenced, the Binance begins by saying, “I’m sorry,” and says he wants to take responsibility for his “mistakes.” He notes that Binance did implement a KYC/AML program, and that it is cooperating with the US government.
“In my mind, I wanted to do everything possible before stepping down as CEO.”
Judge Richard Jones is back on the bench, and we are about to hear from Changpeng Zhao himself.
Gotta say, the government has not exactly covered itself in glory here. If Zhao’s statement is convincing, he might not serve time at all.
And because he’s so well-known as a wealthy man, and because Binance is cooperating with the government, there’s a real risk in being in certain facilities, Burck says.
Will the sentence deter other people? Government said Zhao should be punished or else there will be a perverse incentive to do what Zhao did. Burck is arguing that prison time will tell people not to come to the US and accept responsibility for their crimes.
If the government wanted to put Zhao in jail for serious time, why did they let him plead to something with such a short sentence? It makes me wonder about the matter under seal we keep hearing about.
He and Burck are having a back-and-forth now about the appropriateness of jail time as recommended by the probation department.
We know from CZ’s messages quoted in multiple court cases that avoiding anti-money laundering controls was not exactly a mistake but a strategy. The language cuts against the idea that CZ is taking “full responsibility” for his misconduct...