Crypto

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.

Sam Bankman-Fried’s defense finally woke up

Nishad Singh looks less reliable. Is it enough?

Elizabeth LopattoOct 18, 2023

Reddit’s blockchain-based Community Points are going away

Jay PetersOct 17, 2023

Richard LawlerOct 17, 2023

Binance.US says its users can’t directly withdraw their crypto holdings in cash.

CoinDesk notes that Binance.US just updated its terms of service, saying users can only withdraw funds in the form of stablecoins or other crypto instead of US dollars. Oh, and that US dollar funds in Binance.US wallets are not protected by FDIC insurance.

Earlier this year the SEC sued Binance, alleging it “defrauded equity, retail, and institutional investors about purported surveillance and controls over manipulative trading on the Binance.US Platform, which were in fact virtually nonexistent.”

While you wait for the next Liz Lopatto report on the Sam Bankman-Fried / FTX fraud case, you can relive her live reading of the SEC’s case against Binance from this summer.

The SEC’s case against Binance, a live reading by Liz Lopatto

Sam Bankman-Fried was a bad friend, too

Nishad Singh says he tried to get Bankman-Fried to do the right thing — but he wouldn’t listen.

Elizabeth LopattoOct 16, 2023

Richard LawlerOct 16, 2023

Don’t believe everything you read, especially if it’s about crypto.

Monday morning, the price of Bitcoin spiked 10 percent to $30,000 after a tweet from CoinTelegraph erroneously claimed the Securities and Exchange Commission approved a spot Bitcoin ETF for BlackRock. Crypto folks have been unsuccessfully trying to make this happen for years, to allow Bitcoin investment without using an exchange.

The SEC has not approved it, and the tweet was pulled about 30 minutes later, with CoinTelegraph promising to follow up with an investigation (we have not seen its results yet). Now the SEC has some advice on where to go for information about its activities.

Richard LawlerOct 16, 2023

FTX’s former head of engineering Nishad Singh is testifying against Sam Bankman-Fried.

The FTX fraud trial continues, now with testimony from Singh, who’d owned 7.8 percent of the company and pleaded guilty to fraud charges in February.

He’s admitted on the stand to committing fraud and campaign finance violations in a conspiracy with SBF, Alameda Research CEO Caroline Ellison, FTX CTO Gary Wang, and others.

Elizabeth LopattoOct 16, 2023

Sam Bankman-Fried on the stand?

There’s a Sunday evening filing from the defense team (PDF) in SBF’s fraud trial.

Turns out Bankman-Fried still doesn’t have access to his prescribed medication, which seems lousy. But that’s not the part that interests me. This is (emphasis mine, obviously):

However, as we approach the defense case and the critical decision of whether Mr. Bankrnan-Fried will testify, the defense has a growing concern that because of Mr. Bankman-Fried’s lack of access to Adderall he has not been able to concentrate at the level he ordinarily would and that he will not be able to meaningfully participate in the presentation of the defense case.

However, as we approach the defense case and the critical decision of whether Mr. Bankrnan-Fried will testify, the defense has a growing concem that because of Mr. Bankman-Fried’s lack of access to Adderall he has not been able to concentrate at the level he ordinarily would and that he will not be able to meaningfully participate in the presentation of the defense case.

That high-pitched noise you just heard was hundreds of journalists shrieking

Wes DavisOct 14, 2023

Turn your crypto into an Italian sports car.

If you were just itching to buy a Ferrari with your crypto stash, that’s apparently possible now. Reuters reported this morning that the company now accepts bitcoin, ether, and USDC BitPay payments in the US and will allow Europeans to do so next year.

Ferrari dealers aren’t taking on any extra risk, though; they’ll receive the payments as traditional money after BitPay converts it.

Ferrari to accept crypto as payment for its cars in the US

[Reuters]

Richard LawlerOct 13, 2023

Listen in to that infamous Alameda Research all-hands meeting.

Questions from Sam Bankman-Fried’s own lawyers allowed jurors to hear snippets recorded from a November 2022 all-hands Days before SBF resigned and the company filed for bankruptcy, Caroline Ellison admitted to employees that Alameda took customer money from SBF’s other big business, the FTX crypto exchange.

Ellison, SBF, and several others were aware of the scheme, she told the employees. Instead of the snippets jurors heard, Insider has posted the entire thing on SoundCloud, and this link will take you directly to the relevant segment.

You can click here to follow all of our updates from Sam Bankman-Fried’s fraud trial.

Caroline Ellison Alameda Research All Hands

[SoundCloud]

How is it still getting worse for Sam Bankman-Fried?

The defense botched the cross examination of Caroline Ellison.

Elizabeth LopattoOct 12, 2023

Alameda’s paper trail leads straight to Sam Bankman-Fried

And his “very valuable” hair, too.

Elizabeth LopattoOct 11, 2023

Richard LawlerOct 11, 2023

Things did, indeed, get worse.

That is a theme of Caroline Ellison’s remarks about Sam Bankman-Fried and FTX during his trial on charges of wire fraud and conspiracy.

As Liz Lopatto captured from Tuesday’s testimony:

“[SBF] was very ambitious,” she said. Besides telling her about his presidential chances, he also told her that if there was a coin flip where tails destroyed the world and heads made the world twice as good, he’d flip the coin. He called this being “risk-neutral,” which seems like a fancy way of saying he was a gambling addict.

Ellison is back on the stand today, and I can’t wait for the next big update.

Richard LawlerOct 11, 2023

Sam Bankman-Fried wanted to buy Snapchat.

That’s one of the things mentioned during the ongoing testimony of former Alameda Research CEO Caroline Ellison against her terrible ex-boyfriend, as well as the idea SBF sought to have regulators “crack down on Binance,” the competing crypto exchange that sparked the run that took FTX down.

You can expect more updates from Wednesday’s events in the Sam Bankman-Fried / FTX fraud trial to come later today.

Sam Bankman-Fried was a terrible boyfriend

Bankman-Fried thought Alameda’s brand wasn’t as good as FTX’s — so he put his sometime-lover in charge of it.

Elizabeth LopattoOct 10, 2023

Richard LawlerOct 10, 2023

Maybe it’s the new haircut?

Sam Bankman-Fried reportedly is sporting a jailhouse haircut during his fraud trial over FTX’s failure, and observers, including this NPR reporter and CNBC, note that his ex, Caroline Ellison, needed a little time to find him in the courtroom.

According to CNBC and the New York Times, once her testimony began, she wasted little time:

“Sam directed me to commit these crimes,” she said. He “directed us to take customer money to pay loans.”

Expect a full report from Liz Lopatto later today.

Richard LawlerOct 10, 2023

He’s over there...

Former Alameda Research CEO and ex-girlfriend of Sam Bankman-Fried Caroline Ellison has begun testifying in the fraud trial against SBF.

Richard LawlerOct 10, 2023

True, yet misleading.

On the stand today during Sam Bankman-Fried’s fraud trial, Gary Wang dove into his evolving explanation of the infamous (and now-deleted) SBF tweet saying that “FTX is fine. Assets are fine,” that he posted the day before Binance’s acquisition announcement, which is when things truly came apart.

Richard LawlerOct 10, 2023

The Sam Bankman-Fried fraud trial continues.

The Verge reporter Liz Lopatto is back in a New York City courtroom today, as Sam Bankman-Fried’s friends turned cooperating witnesses continue to take the stand in the case against the fallen FTX boss.

We broke down FTX CTO Gary Wang’s testimony / code review on Friday, and today the case restarted with him still on the stand, and former Alameda CEO and SBF ex Caroline Ellison is expected to make her appearance later today. Stay tuned here for all of the latest updates from the crypto exchange fraud trial.

The trial and sentencing of FTX co-founder Sam Bankman-Fried

Richard LawlerOct 10, 2023

BAYC layoffs.

Yuga Labs, the $4 billion outfit behind the Bored Apes and other NFT projects, announced recently “that a number of roles have been eliminated across the company,” with restructuring cutting jobs in the US and leaving international roles under evaluation.

Now Yuga’s going “all-in on our Otherside strategy,” referring to its metaverse gaming land grab.

Meanwhile, someone continues to trade the tokens at prices of more than $40,000, and despite the NFT market’s ongoing slide, projects like Starbucks Odyssey and Nike’s .SWOOSH keep trying to make it catch on.

On Today's News

[Yuga Labs News]

Elizabeth LopattoOct 9, 2023

FTX liquidation could further hurt crypto startups.

Before they collapsed, FTX and Alameda Research “massed a roster of portfolio companies that included major names in the industry, such as stablecoin providers Circle and Paxos, blockchain developer Aptos Labs and crypto bank Anchorage Digital,” Bloomberg writes.

But venture funding for the crypto world has plunged; selling those stakes could further depress startup valuations.

FTX Trial, 63% Drop in Startup Funding Plague Crypto Industry

[Bloomberg]

Elizabeth LopattoOct 9, 2023

Michael Lewis would like Sam Bankman-Fried’s jury to read his book.

“If I were a juror, I would rather hear my story than either defense or prosecution,” Lewis tells Andrew Chow at Time. Also:

I want to ask about some details that appeared in various charging documents and complaints against Sam but are featured less prominently or not at all in your book. One is that Bankman-Fried allegedly bribed Chinese officials to release money from a frozen Alameda account.
I know too much about that, and it seemed like a distraction.

Michael Lewis On His New Book About Sam Bankman-Fried

[TIME]

The FTX jury suffers through a code review

Gary Wang supervised the code that gave Alameda special privileges at FTX. But it’s hard to conclude anyone but Sam Bankman-Fried gave the orders.

Elizabeth LopattoOct 6, 2023

Richard LawlerOct 6, 2023

Former FTX CTO Gary Wang is on the stand.

The government’s prosecution of Sam Bankman-Fried continues where it left off Thursday, with another former college roommate and alleged co-conspirator testifying against the former FTX CEO about exactly how all that customer money ended up being used for SBF’s other interests.

You can read up on all of the details about the missing billions right here, ahead of another trial update later today from The Verge’s Liz Lopatto, who is in the courtroom right now.

Was Sam Bankman-Fried’s bean bag chair a lie too?

Two of Bankman-Fried’s MIT roommates make a damning case for the prosecution.

Elizabeth LopattoOct 6, 2023

Kevin NguyenOct 5, 2023

Full court press.

Liz Lopatto is on the ground, covering the Sam Bankman-Fried trial. But if you want even more curly-haired crypto baby in your life, our pals at New York will be reporting it out in their excellent newsletter Court Appearances.

[New York Magazine]

Elizabeth LopattoOct 5, 2023

SBF Day 3: Bankman-Fried’s roommate’s testimony continues.

I expect to hear a lot more about that expensive Bahamas penthouse during today’s hearings in the case of the former FTX CEO, and possibly some fireworks on the cross, as Adam Yedidia is immunized from prosecution.

Is Sam Bankman-Fried’s defense even trying to win?

The prosecution came out swinging. Oddly, Bankman-Fried’s defense didn’t.

Elizabeth LopattoOct 4, 2023

David PierceOct 4, 2023

Today on The Vergecast: Big Tech goes to court.

The government is in the middle of a trial with Google, heading toward one with Amazon, and in general trying to change the way we think about monopolies. Also: Sam Bankman-Fried’s trial has begun, and it has already been eventful. All that, and an ebook debate, on the flagship podcast of the Sherman Act.

Elizabeth LopattoOct 4, 2023

Day 2: We expect opening arguments in the Sam Bankman-Fried trial today.

We don’t have a jury yet for the trial of the former crypto CEO, but we will soon. After that, it’s opening arguments and, if I’m lucky, our first witness.

Elizabeth LopattoOct 3, 2023

Day 1: Sam Bankman-Fried got a haircut and other matters.

The first day of the trial is over, but we haven’t selected a jury yet.

Bankman-Fried, who appeared with a shorter haircut and sporting a suit, wasn’t offered a plea deal because when the government raised the question of plea discussions, the defense said no, said Nicholas Roos, one of the federal prosecutors. Two prospective jurors lost money in crypto, one along with his twin brother; another potential juror’s fiancé lost in crypto as well.

There were a couple Madoff mentions, as well. We should have a jury and opening statements tomorrow.

Elizabeth LopattoOct 3, 2023

Hello from the line!

The earlybirds are here for the Sam Bankman-Fried trial. Yes, I’m one of them.

<em>The jet lag is real and it’s magnificent.</em>

1/2

The jet lag is real and it’s magnificent.

Photo by Liz Lopatto / The Verge

Alex HeathOct 2, 2023

Kenya is probably going to ban Sam Altman’s eyeball-scanning crypto orbs.

One of OpenAI CEO Sam Altman’s other companies, Worldcoin, is in hot water for giving people free crypto in exchange for scanning their eyeballs into the startup’s proprietary orb.

For example, the Kenyan government appears to be on the verge of banning Worldcoin’s operations in the country “until there is a legal framework for regulation of virtual assets,” according to Reuters.

Worldcoin doesn’t appear to be slowing down its expansion efforts, though. The last press release I got from the company said that more than 1 percent of Chile’s entire population had signed up.

Elizabeth LopattoOct 2, 2023

The scariest thing about prison for Sam Bankman-Fried is the lack of internet.

Michael Lewis, interviewed on his time with Sam Bankman-Fried, says:

I do think that if he had the internet, he could survive jail forever. Without having a constant stream of information to react to— I think he may go mad. If you gave Sam Bankman-Fried a choice (this is quite serious) of living in a $39 million penthouse in the Bahamas without the internet, or the Metropolitan Detention Center in Brooklyn with the internet, there’s no question in my mind he’d take the jail.

FTX founder Sam Bankman-Fried's rise and fall at center of new Michael Lewis book "Going Infinite"

[CBS News]

The co-founder of a collapsed crypto hedge fund was arrested in Singapore

Emma RothSep 29, 2023

The FTX trial is bigger than Sam Bankman-Fried

‘Is he going to throw the entire industry under the bus?’

Elizabeth LopattoSep 28, 2023

Elizabeth LopattoSep 21, 2023

Wait, Tether is lending again?

Controversial stablecoin Tether is making loans to its customers. Bloomberg columnist Matt Levine walks through why that’s kind of weird:

If you are in charge of Tether and someone shows up at your office to pitch you on a clever investment that will get you a higher return with only a little risk, you should put your fingers in your ears and scream “NO” and kick them out of your office. You can make billions of dollars of pure profit taking no risk!

Anyway, the implications are even weirder: Tether might be propping up crypto prices.

Tether Keeps Lending Tethers

[Bloomberg]

Elizabeth LopattoSep 21, 2023

“We are eating your market share like a birthday cake and you can do nothing.”

There’s another Twitter spat going on, this time between market-makers DWF Labs, GSR and Wintermute. Worth keeping an eye on, because at least once when there was this kind of Twitter trash-talking — between FTX’s Sam Bankman-Fried and Binance’s Changpeng “CZ” Zhao — FTX melted down.

And they call themselves... the future of finance!

‘You Can Do Nothing’: Crypto Trading Titans Are Yelling at Each Other on Elon Musk’s X

[CoinDesk]

Richard LawlerSep 21, 2023

How to be 5 percent wrong about NFTs.

This Rolling Stone article sourcing some kind of report claiming 95 percent of NFTs are worthless almost feels like the sunshine of reality peeking into the world of crypto mania.

The only problem? Even people who sell NFTs have long said almost all of them will be worthless (usually, the person who says this implies their own NFTs are in the special 5 percent), and the article still includes NFT promoters’ claims the tokens might be useful for concert tickets or games.

It also doesn’t mention Rolling Stone hyping BAYC with a limited edition issue in 2021, followed by a second collaboration just last year.

“Sold out.”

Image: Rolling Stone

Wes DavisSep 20, 2023

Venmo your PayPals and PayPal your Venmos.

PayPal is rolling out the ability to buy PayPal USD, its US-dollar-backed stablecoin cryptocurrency, to “select users” today, with a full rollout coming later.

PayPal’s release says users can transfer PYUSD between Venmo and PayPal wallets for free, but warns that other compatible wallets will be subject to blockchain fees.

That ups the number of cryptocurrencies Venmo users can buy through the app from four to five.

PayPal to let Venmo users buy new stablecoin after unveiling PYUSD to wide applause from the crypto industry

[Fortune]