Yellow Capital Blog/Weekly Crypto Digest/Weekly Crypto Digest for May 6-12, 2024

Weekly Crypto Digest for May 6-12, 2024

Sunday, May 12, 2024

In the latest issue of Weekly Crypto Digest, read more about SEC warns Robinhood, SBF sells rice in jail, DWF is accused of market manipulations and more news..

Bitcoin mining difficulty has dropped

On May 9, the difficulty of Bitcoin mining decreased by 5.63% to 83.15 T due to a recalculation. This decrease is the most significant since December 2022. The average hashrate over approximately two weeks was 595 EH/s, compared to the previous 630 EH/s. This indicates that some miners may have shut down their equipment as it became unprofitable after the halving.

SEC warns Robinhood of possible lawsuit

Robinhood crypto vs SEC

The cryptocurrency division of the online brokerage firm Robinhood has been warned by the US Securities and Exchange Commission (SEC) that it may face a lawsuit. This warning comes in the form of a Wells notice, which informs the company that violations of securities laws have been found and that the case may be taken to court. Despite this, representatives from Robinhood remain confident that the crypto assets added to the platform are not classified as securities.

Pantera Capital called investments in TON a record for the fund

Pantera Capital, a venture capital firm, has announced that funding for The Open Network (TON) blockchain is the largest investment in the history of the fund. In their letter, the managing partners, Dan Morehead, Ryan Barney, and Eric Lowe, highlighted Telegram's extensive user base, impeccable user experience, and dynamic ecosystem. TON has the potential to become one of the most widespread blockchains. Although the exact amount of capital raised hasn't been disclosed, it's worth noting that Pantera Capital has already invested over $250 million in Solana.

Creditors unhappy with FTX compensation plan

On May 7, the FTX exchange, which had collapsed, proposed a new compensation plan for its creditors. The plan mentions that 98% of the creditors will receive a minimum of 118% of their claims within 60 days of court approval. The total cost of payments will be between $14.5 billion and $16.3 billion, which includes assets under the control of the exchange itself and its liquidators. More than 50% of the votes from creditors will be required to approve the plan. However, some of the creditors were dissatisfied with the proposal.
Sunil Kavuri, the spokesperson for FTX's largest group of affected clients, spoke out against the new compensation model. He opposes the plan because it limits the options for recipients of funds and exempts some defendants from liability. The proposed plan contains an "exculpatory clause" for the law firm Sullivan & Cromwell, which is allegedly involved in the collapse of FTX. This clause relieves the law firm of all potential obligations.
Other shortcomings of Kavouri's plan include payments in fiat and losses to creditors of around $10 billion due to the calculation of the value of assets at the time of bankruptcy declaration.

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Bankman-Fried sells rice in prison and lost 11 kg

Sam Bankman-Fried (SBF), the founder and former CEO of FTX exchange, recently gave an interview after the verdict was announced. Bankman-Fried shared his experience at the Brooklyn Metropolitan Center (MDC) during the interview. While in prison, he reportedly began trading commodities, specifically bags of rice, which are used as currency in the MDC. This information was shared in a media statement.

Binance employees accused DWF Labs of market manipulation

​Binance, a cryptocurrency exchange, hired investigators from the traditional financial sector to create a safe and reliable platform. During the investigation, the team identified “VIP clients” involved in market manipulation, and top traders accounted for two-thirds of the total trading volume on the platform. The group also noticed that accounts belonging to Binance were trading specific cryptocurrencies, and when asked who controlled these addresses, they received no response. The researchers further noted that DWF Labs received “VIP 9” status, which allows it to conclude transactions worth at least $4 billion per month and act as a market maker. Binance denied this information, stating that they knew nothing about these documents. However, a week after filing the report, the head of the investigative team was fired. In the following months, the company cut several more people involved in the investigation, which they explained as cost-saving measures, and “others quit of their own free will.”

South Korea to reconsider ban on cryptocurrency ETFs

In the recent parliamentary elections held in South Korea, the winning political party has expressed its intention to launch spot Bitcoin ETFs. As per local media reports, lawmakers will request the country's financial regulator reconsider the current cryptocurrency funds ban. The Democratic Party of Korea, which secured 175 out of 300 parliamentary seats, has confirmed its desire to fulfill one of its election promises. The party aims to make cryptocurrency ETFs accessible to all users. After the new National Assembly begins its work in June 2024, the party will apply to the Financial Services Commission of South Korea (FSC). Members of Parliament will ask the agency to explore the possibility of approving investment products based on crypto assets.

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