Disgraced FTX founder Sam Bankman-Fried dominated headlines once again as the one-time celebrated wunderkind was arrested in the Bahamas and formally charged with fraud. U.S. lawmakers then followed with some news of their own when they announced a new bill aimed at tightening U.S. anti-money laundering rules regarding digital assets.
Finally, whether aghast or elated, it’d be hard to argue against naming former U.S. President Donald Trump crypto’s big winner of the week after his NFT collection sold out in a matter of hours, potentially making him millions of dollars in the process.
Bankman-Fried eyes rock bottom
The week kicked off with Bahamian authorities arresting Bankman-Fried after the small island nation received notification the U.S. had filed criminal charges against Bankman-Fried and is likely to request his extradition.
Bankman-Fried’s detainment came a day before he was supposed to testify virtually before the U.S. House Financial Services Committee in order to answer questions related to the spectacular collapse of the cryptocurrency exchange he founded and which appears to have lost billions of dollars in customer money.
Bahamian Prime Minister Philip Davis said his country and the U.S. “have a shared interest in holding accountable all individuals associated with FTX who may have betrayed the public trust and broken the law,” according to a statement distributed by local press.
Bankman-Fried is being charged with fraud both criminally and civilly. While a U.S. grand jury charged 30-year-old Bankman-Fried with committing or conspiring to commit fraud on FTX’s customers and lenders plus counts of money laundering, the Securities and Exchange Commission is charging him with defrauding investors. The SEC also alleges Bankman-Fried used customer funds for political donations and to fund an extravagant lifestyle.
Bipartisan push for stricter crypto regulation
Working together, high-profile Democratic Sen. Elizabeth Warren and Republican Sen. Roger Marshall introduced a new bill on Wednesday meant to fortify U.S. authorities’ ability to police money laundering among digital assets. The move could be characterized as one more ripple effect caused by FTX’s collapse.
If approved, the new legislation would expand know-your-customer rules to wallet providers, miners, validators and other network participants. It also takes aim at transaction mixers, which are used to obscure the source of funds on blockchains.
Additionally, the bill includes information filing requirements for offshore digital asset transactions of $10,000 or more, and a mandate that cryptocurrency ATMs in the U.S. verify customer identity and regularly provide the locations of machines they own to federal officials.
The proposed law could trigger outcry from digital-asset proponents. Coin Center, a D.C.-based crypto advocacy group, has already called the legislation an “opportunistic, unconstitutional assault.”
The legislation could struggle to pass through Congress before the end of the year and may end up being reintroduced in January.
Trump’s NFT drop sizzles
Love him or hate, Trump ended the week on a high note as the former president and perpetual entrepreneur’s 45,000-item digital trading card collection sold out within hours, according to OpenSea data.
Some in the media publicly shamed Trump on Thursday after he teased a "major announcement" in order to gin up interest in his NFT drop. But then the collection sold out in less than 24 hours and racked up more than 648 ETH, or about $785,000, in trading volume as of early Friday, also according to OpenSea.
Trump unveiled plans for his NFT drop via his Truth Social account. Setting the initial mint price at $99, acquiring one of the NFTs automatically entered buyers into a sweepstakes. Prizes include a group cocktail party at Mar-A-Lago, a dinner in Miami or a golfing trip with the former president, or a group Zoom call.
People who buy 45 or more NFTs will be invited to a gala dinner with Trump, the announcement said.
Trump may have already netted about $4.5 million from the drop.
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