Elizabeth Lopatto
Update: CZ has arrived.
And there’s motion in the courtroom. The hearing is expected to begin at 9AM PT.
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.
Elizabeth Lopatto
A relatively sedate morning in Seattle.
Unlike with the Sam Bankman-Fried trial, public interest in the sentencing of Binance founder Changpeng Zhao seems to be low. I did not spend hours standing in line this morning. And as far as I know, CZ is not yet in the building.
Elizabeth Lopatto
Yuga Labs fires staff.
The company responsible for Bored Ape Yacht Club is restructuring, and as a result, firing some of its employees. In a memo, its CEO complained that “The creative-first spirit that drove this company from inception has been getting muddied by labyrinthine corporate processes.”
Emma Roth
Prosecutors want to put Binance’s former CEO behind bars for three years.
In a filing on Tuesday, the DOJ says Changpeng Zhao’s alleged crimes “warrant meaningful prison time” and that the three-year term will “not just send a message to Zhao but also to the world.” Zhao’s lawyers followed up with a filing shortly after, saying he should just be sentenced to probation.
Elizabeth Lopatto
Crypto trader Avi Eisenberg found guilty of fraud in market-manipulation case.
Eisenberg sent the price of MNGO tokens up, then withdrew $110 million in crypto. He did not testify.
His defense pointed out the was permitted by the crypto’s code. Turns out code isn’t law!
Richard Lawler
Nike’s 404 Error Air Force 1 arrives on April 23rd.
Despite being a .Swoosh-exclusive this BSOD-themed shoe doesn’t have any NFT links or crypto wallet requirements (although you will need to register an account by April 18th).
Nike’s web3 plans for .Swoosh seem mostly dead, with a January blog post saying digital gaming item tie-ins will skip the blockchain and instead just link to Nike accounts.
1/7Nike Air Force 1 Low - “404” Image: Nike
Sean Hollister
“The first ever conviction for the hack of a smart contract.”
Shakeeb Ahmed — an ex-Amazon security engineer who admitted to stealing over $12.3M from two cryptocurrency exchanges using exploits — has been sentenced to three years in prison, will forfeit the stolen money, and pay $5M as well.
More about the exploits:
Elizabeth Lopatto
They’re all libertarians until...
Kraken founder Jesse Powell wanted to contribute to a recall campaign for Gavin Newsom without having his identity exposed. It didn’t work out that way, and he was publicly listed as one of the top donors to the recall. Now he’s suing, saying he was deceived.
Richard Lawler
Terraform Labs and Do Kwon found liable for defrauding crypto investors.
While Do Kwon remains in Montenegro awaiting extradition, the SEC’s lawsuit against him and Terraform Labs has concluded, with the jury ruling (PDF) they acted recklessly and are liable following the UST stablecoin’s collapse in 2022. Reuters reports the agency is seeking civil financial penalties and bans on both Kwon and Terraform.
Richard Lawler
Ripple is going to launch its own stablecoin.
With crypto prices high, it’s apparently time for Ripple — while battling an SEC lawsuit — to launch its own stablecoin in the US. If you’re not familiar with stablecoins, we have an explanation about these financial instruments that help crypto transactions flow.
Ripple says that, unlike the algorithmic UST coin that crashed, its stablecoin will be “backed by a 1:1 reserve of cash and cash equivalents” and that it “will publish monthly attestations of the assets.”
Elizabeth Lopatto
Richard Lawler
One of Sam Bankman-Fried’s most infamous quotes may have come back to bite him.
As Inner City Press notes, not only did the prosecution bring up Bankman-Fried’s “fuck regulators” DM sent to Vox reporter Kelsey Piper during the trial, the judge hasn’t forgotten either and mentioned it as evidence that SBF was only acting like he wanted regulation for the crypto industry.
Image: Vox.com
Richard Lawler
Now SBF is talking.
Paraphrased courtroom updates from Inner City Press on X capture SBF’s reflections on working with Gary Wang, Nishad Singh, and Caroline Ellison.
These former friends are now felons who testified against Bankman-Fried during his trial.
Richard Lawler
These arguments didn’t work on the jury.
Sam Bankman-Fried is being represented by new lawyers during today’s hearing, but their statements on his behalf sound familiar. The jury heard those and reached a guilty verdict in just a few hours; now, we’ll see how the judge responds.
Emma Roth
Sam Bankman-Fried is about to find out how much prison time he’s facing.
The FTX founder is in court now, waiting to see whether Judge Kaplan hands the 40 to 50 years in prison prosecutors recommend — or if his decision is closer to the more lenient five- to six-year sentence that Bankman-Fried’s lawyers are pushing for.
Sean Hollister
Go read how this “passive income” ChatGPT scam is stealing people’s faces and voices the old-fashioned way.
Matt Novak has a banger of a new entry for the Internet of Shit. Over at Gizmodo, he’s discovered a YouTube scam that doesn’t just drain your crypto wallet — it also scams the actors hired to read bullshit testimonials about how they make money while they sleep.
Who needs AI when you can get a real, live human to legitimize your scheme on camera?
Justine Calma
Justine Calma
What do soaring Bitcoin prices mean for the power grid and the environment?
Soundside, a daily broadcast program from Seattle’s NPR news station KUOW, breaks it down in this episode. Catch my interview about the energy and environmental costs of Bitcoin mining in the US, and the legal battle that killed the Department of Energy’s survey of miners’ electricity consumption.
As Bitcoin surges to new heights, so do concerns over its energy use
[KUOW Public Radio]
Emma Roth
Binance faces tax evasion charges in Nigeria after executive escapes custody.
Binance executives Nadeem Anjarwalla and Tigran Gambaryan were detained in Nigeria last month after visiting the country amid concerns about crypto’s effect on local currency.
However, Binance tells CNBC it has been “made aware” that Anjarwalla is no longer in Nigerian authorities’ custody. The Nigerian government has since accused Binance of four counts of tax evasion, including failure to file tax returns.
Richard Lawler
Starbucks is giving up on its NFT odyssey.
Two years ago, Starbucks announced a web3 NFT project that was supposed to expand its Rewards loyalty program by using the blockchain... somehow.
One year ago, Starbucks delivered the first paid Odyssey NFTs, selling 2,000 in twenty minutes during the same week Facebook and Instagram quit NFTs.
Now, Starbucks says the Odyssey Beta will shut down on March 31st, and I’m wondering which big brand’s NFT project will last through March 2025.
Richard Lawler
Prosecutors recommend a 40- to 50-year sentence for Sam Bankman-Fried.
The former crypto billionaire was found guilty on all seven charges he faced in November, and the judge is scheduled to deliver a sentence on March 28th. Bankman-Fried’s lawyers suggested a five- to six-year prison sentence, but a filing submitted by the prosecution on Friday disagrees:
While a Guidelines sentence – which would exceed 100 years, effectively a life sentence – is not necessary, the Government urges the Court to impose a sentence that underscores the remarkably serious nature of the harm to thousands of victims; prevents the defendant from ever again committing fraud; and sends a powerful signal to others who might be tempted to engage in financial misconduct that the consequences will be severe.
A sentence of 40 to 50 years is necessary to serve such purposes.
Jon Porter
Craig Wright is not Satoshi Nakamoto and did not invent Bitcoin, British judge says.
Almost eight years after Wright publicly claimed to be the digital currency’s enigmatic inventor, UK Judge James Mellor has said the “overwhelming” evidence is that this isn’t the case. In a post on X Jack Dorsey, one of the backers of the organization that brought the legal challenge against Wright, quoted the judge’s verdict:
Mia Sato
Andreessen Horowitz was behind Kickstarter’s doomed Web3 pivot.
According to Fortune, the crowdfunding platform got a $100 million investment from the VC firm’s crypto fund — and the 2021 deal was meant to get Kickstarter into the Web3 hype cycle.
If you recall, the pivot was a disaster: after public outrage, Kickstarter formed a community advisory council, and the company ultimately decided to shift its attention away from the blockchain.
Correction March 12th 10:56AM ET: The Web3 pivot wasn’t a formal stipulation of the deal, as initially stated.
Richard Lawler
Y’all aren’t going to believe this, but Coachella is doing NFTs again.
In 2022, Coachella sold thousands of NFTs, including 10 digital “lifetime passes.” But it partnered with FTX US, Sam Bankman-Fried’s fall took the tokens with it, and owners were left chasing their promised benefits. Now Bitcoin is back, and Coachella’s trying NFTs again.
Each $1,499 NFT in the initial collection comes with a 2024 VIP Festival Pass and access to an exclusive bar.
Of 1,024 NFTs offered, three have been minted so far.
Justine Calma
The price of Bitcoin hit a new peak, rising above $69,000 today.
That’s the highest it’s been since 2021, before the long, cold crypto winter brought that price crashing down to less than $20,000.
A friendly reminder: the higher that price gets, the more energy Bitcoin mining typically burns through and the greater its greenhouse gas emissions.
Justine Calma
The US Department of Energy has to start over if it wants to survey Bitcoin miners’ electricity use.
The DOE reached a settlement with crypto miners who sued to block data collection. The agency tried to make companies disclose their energy use through an emergency data request. But a federal judge placed a temporary restraining order on it in February, saying the situation probably didn’t warrant emergency authorization. On Friday, the DOE agreed to destroy information it’s already collected. It can start over without emergency authorization, but would have to propose a new survey and give the public 60 days to comment.
Justine Calma
Elizabeth Warren is still pushing crypto mines to divulge their electricity use.
Warren has been urging federal agencies to scrutinize energy-hungry Bitcoin mines. But crypto groups secured a temporary pause on the Department of Energy’s survey of their electricity consumption.
“The Department is asking cryptominers to report basic information about their energy usage—like other industries have done for decades—so the public and lawmakers better understand how cryptomining’s electricity use and carbon emissions affect the power grid and environment,” Warren said in a statement to The Verge after the news came out.
Elizabeth Lopatto
Do Kwon, the Terra / Luna creator, is coming to a U.S. courtroom to face fraud charges
He might even arrive in time for the SEC’s fraud lawsuit, which is scheduled to begin jury selection in March. He’s also facing eight criminal counts.
Elizabeth Lopatto
Three Arrows Capital cofounder on jail: “I think it’s definitely good for you.”
That’s Su Zhu; Kyle Davies is still on the lam. But their woes may not yet be over:
Among the most incriminating evidence brought forward against Zhu and Davies is a document they sent to at least one creditor as crypto markets were collapsing in May 2022, claiming 3AC had nearly $2.4 billion under management. Both lenders and people close to the liquidators now believe this number was false, grossly overstating the fund’s assets. “We firmly believe they committed fraud.”
👀
‘They Are Very Comfortable With Lying’
[Intelligencer]
Jacob Kastrenakes
The NFT world is consolidating.
Yuga Labs, the group behind Bored Apes, is purchasing Kevin Rose’s NFT group, Proof. Yuga previously bought CyrptoPunks, too.
As Yuga scoops up more of the NFT world, the question remains: who’s still buying? And is there anything worth doing with them?