The R Roundup: Guilty, Guilty Caroline — Issue #68
As the year concludes, there is no doubt about which stories have blown us away, starting with the collapse of FTX & Alameda. Once touted as the brains next to the golden child of crypto, now seen as a compatriot to the industry's supervillain, Caroline Ellison, the ex-CEO of Alameda Research, pleaded guilty to her involvement in the FTX fraud.
Reports this week suggested that Ellison pleaded guilty to seven counts, including her actions leading up to the fraud on FTX customers & Alameda Research lenders. Aggregating all of her counts, if found guilty, she could serve an estimated 110 years in prison, which would suggest why she has decided to cooperate with the investigations.
Gensler Warns Crypto For Crackdown🇺🇸
Following on from one of the many crypto explosions that caught the SEC's eye in 2022, global regulators are all alert regarding finding a set of regulations that stifles the possibility of another “FTX.”
Leading that initiative, SEC chair Gary Gensler stated in a recent interview that the SEC’s crypto crackdown is just getting started. This led to the perception that the SEC has almost run out of patience with the crypto space and is actively looking for solutions.
Gensler stated the following:
“The runway is getting shorter to start following rules and register with the agency.” “The casinos in this ‘Wild West’ are non-compliant intermediaries” — Gary Gensler, SEC Chair
Gary also added that the proof-of-reserved auditing, which has become a significant trend for all top exchanges, isn’t accounting for the assets and liabilities of the company, citing a lack of satisfaction with the segregation of customer funds.
Opensea Complies With U.S. Sanctions🌊
NFTs have been known to be the area of the crypto market that almost has its own rules; however, that may soon be changing with leading NFT marketplace OpenSea actively delisting Cuban artists and users to comply with U.S. sanctions.
Opensea has grown immensely in terms of its user base and is regarded as one of the most reliable NFT marketplaces with support for numerous chains.
Opensea confirmed the banning of accounts after a Twitter account shared an email that cited the reason for the account being disabled as “due to activity that goes against our Terms of Service”
Opensea responded via a spokesperson stating that they comply with U.S. sanction law. They also added the following:
“Our terms of service explicitly prohibit sanctioned individuals, individuals in sanctioned jurisdictions, or services from using Opensea” — Opensea
FTX Wants Charitable Refunds🎗🚫
One of the more interesting angles of the FTX collapse was the contagion of SBF’s famous political donations. While he was still the crypto golden boy, these donations were seen as a fraction of his philanthropy and support for avenues he believes in. Still, since he turned into a well-known criminal and his $250m bail, those donations can now perhaps be concluded as a safety net.
With FTX trying to restore some degree of equilibrium, new CEO John J. Ray III has expressed the importance of every penny they can get, coinciding with a recent press release from FTX seeking the return of the political donations made on behalf of SBF.
The funds have been requested to satisfy the best interests of customers and investors while adding that if the funds are not returned voluntarily, actions will be taken.
As a reminder, this is not a trading signal or investment advice; it is an opinion, and each trader/investor should know and understand the risks of trading cryptocurrencies. This should not be regarded as financial advice; feel free to familiarise yourself with our NFA disclaimer.
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