Five major stories made headlines in crypto this past week. Binance.US has been rocked by staff departures as regulators expressed concerns, while CoinEx was hacked for $55 million by the North Korean state-sponsored Lazarus Group. Meanwhile, the SEC has charged a star-studded NFT project for an unregistered offering as the bankruptcy cases for FTX and DCG drag on.
Let’s take a closer look at each story in this recap.
Binance.US rocked by departures
In a significant organizational shift, Binance.US reduced its staff by one third, and Brian Shroder, the president and CEO of the company, departed in order to take “a deserved break,” according to CZ. This was followed by the exit of the head legal executive and the chief risk officer.
Amidst these departures, Binance announced a new addition to its leadership team by appointing Rachel Conlan as its Chief Marketing Officer. She will spearhead global efforts to enhance Binance's partnerships and online influencer collaborations.
Regulatory concerns loom large, with the company's growth reportedly stunted until Changpeng 'CZ' Zhao either sells his stake or addresses these regulatory issues. This has made potential investors hesitant.
The Securities and Exchange Commission (SEC) also expressed concerns over Binance.US's cooperation in an ongoing investigation. The SEC's dissatisfaction stems from the limited and unsatisfactory documents provided by Binance.US. Earlier in the year, the SEC had taken legal action against Binance and its founder, Changpeng 'CZ' Zhao, for alleged misrepresentations related to the oversight of the Binance.US platform. With all these events unfolding, the future trajectory of Binance.US remains uncertain.
CoinEx hacked by North Korea’s Lazarus Group
On-chain data suggests that North Korea’s Lazarus Group was likely the orchestrator behind the $55 million hack of crypto exchange CoinEx. This conclusion was drawn by crypto sleuth ZachXBT from a link found between the CoinEx exploit and a recent attack on the betting platform Stake.com, which the FBI had previously attributed to the Lazarus Group.
Despite the breach, CoinEx promptly assured its users that their funds remain secure. CoinEx has also committed to compensating affected parties in full for any losses incurred due to this breach.
SEC targets star-studded Stoner Cats NFT show
The Securities and Exchange Commission (SEC) has charged the creators of the "Stoner Cats" NFT show, Stoner Cats 2 LLC, for an unregistered offering that raised $8 million. The show, which was among the first to be fully funded by NFTs, featured celebrity voices like Ashton Kutcher and Jane Fonda. The decision was criticized by the two Republican SEC commissioners in a statement. In response, Stoner Cats 2 has agreed to pay a $1 million penalty and will destroy all the NFTs they hold.
DCG’s spat with Gemini continues as new recovery plan is outlined
Digital Currency Group (DCG) has proposed a new creditor agreement in Genesis's bankruptcy proceedings, potentially allowing Gemini Earn users to recover all their crypto holdings. This proposal offers unsecured creditors a 70-90% baseline recovery. However, Gemini has criticized DCG's plan, accusing them of "gaslighting" and attempting to bait Gemini into accepting a deal that would let DCG pay the firm less than they owe. This ongoing feud between DCG and Gemini started when Genesis froze withdrawals from the Gemini Earn program.
Separately, Genesis has announced that it will cease digital asset derivatives trading through GGC International. This move signifies that Genesis will no longer offer trading services across any of its business units, a decision made for business reasons. The termination of these services will be effective from September 21.
FTX estate receives approval to sell assets
The FTX estate recently gained court approval to start liquidating its vast crypto holdings after declaring bankruptcy. Among its notable assets are $1.2 billion in solana (SOL) tokens and a collection of 38 properties situated in the Bahamas. This unfolding situation has stirred the crypto market, leading to a noticeable dip in bitcoin's price, which plunged below $25,000 earlier in the week. The market's apprehension is fueled by speculations surrounding FTX's potential massive asset sales.
In a parallel development, legal tensions are rising as prosecutors challenge the line of questioning proposed by lawyers for FTX's CEO, Sam Bankman-Fried. As he faces a trial with potential charges that could result in a century-long prison term, the questions seem to highlight his philanthropic endeavors, causing contention in the courtroom.
With assistance from ChatGPT-4
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.