SBF Arrested & CPI Beats Expectations

Daily Bullets: Tuesday, December 13th

Dec 13, 2022

Ladies and Gentlemen, we got him! SBF has been arrested and in total he’s facing eight charges: conspiracy to commit wire fraud on customers, wire fraud on customers, conspiracy to commit wire fraud on lenders, wire fraud on lenders, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to defraud the U.S. and violate campaign finance laws. We are now officially in the Crypto Legal Saga.
The SEC also made official in their filings some of the incredulous claims that have been circulated recently such as:
Alameda Research had an "unlimited" line of credit
SBF directed customer funds to bank accounts that hid their links to Alameda
FTX hid Alameda's multi-billion dollar liability in an account called fiat@ftx.com
Alameda had an exemption from FTX's risk management engine - “God Mode”
Top FTX executives took nearly $2.2B in personal loans
Alameda was allowed to maintain a negative balance on FTX
FTX investments were made by using customer funds diverted to Alameda
If it didn’t actually happen before our eyes, then it might be hard to believe. Just a few months ago, SBF/FTX/Alameda were all some of the most highly regarded in the space. Lesson that nothing is too big to fail.
In more optimistic news, U.S. November CPI came in at 7.1%, under the expected 7.3% which caused markets to rally. This type of data will be crucial in determining the Fed’s monetary policy in 2023. Recall that they’re still claiming to stick to reaching a 2% inflation target. Tomorrow’s FOMC likely to deliver 50 bps.

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Daily Bullets:

SBF arrested and facing 8 different charges with the SEC detailing a list of wrongdoings
U.S. CPI: 7.1% YoY, 0.1% MoM. Expected: 7.3% YoY, 0.3% MoM - Better than expected
Binance FUD sees over $2B withdrawn from the exchange
Tether coordinating with Binance to convert 3B USDT from Tron to Ethereum ERC20 to address concerns
Tether intends to reduce secured loans in its reserves to zero in 2023
Discord's new Linked Roles include support for Solana
A federal judge ordered the CFTC to serve Ooki DAO founders Tom Bean and Kyle Kistner
Native USDC on Avalanche is now integrated on Coinbase
Canada enforcing stricter requirements for crypto following FTX including a ban on margin and leverage trading
Illuvium Labs released a new private beta for "Illuvium: Overworld”

Now for a more expanded and detailed look at the day for those who likes sources:

Crypto News:

The Royal Bahamas Police Force arrested FTX founder Sam Bankman-Fried after U.S. authorities filed criminal charges, and The Bahamas intends to extradite him. SEC announces 8 charges. He denied being part of a secret group titled “Wirefraud” just hours before his arrest by the Bahamian authorities

U.S. CPI: 7.1% YoY, 0.1% MoM Forecasted: 7.3% YoY, 0.3% MoM. US CPI Core: 6.0% YoY, 0.2% MoM Forecasted: 6.1% YoY, 0.3% MoM

Tether coordinating with Binance to perform a chain swap, converting 3B USDT from Tron to Ethereum ERC20 in response to large outflow of withdrawals

Tether intends to reduce secured loans in its reserves to zero in 2023

Bitcoin miner Argo is looking to sell assets and get a loan as it seeks to avoid bankruptcy and after it accidentally published a document implying it would file for Chapter 11

Discord's new Linked Roles include support for Solana – servers with the Solana app installed can prompt users to link and authenticate with their Solana wallet

MetaMask Institutional, Cobo and Gnosis DAO team up for soulbound token project

Investment fund manager M31 Capital has chosen Anchorage Digital Bank to custody the $100M Web3 Opportunity Fund it launched in October

Avalanche releases Core Mobile, a mobile version of its flagship non-custodial multichain wallet

Terra validators voted to expand its security measures with a $900,000 grant to SCV Security to identify and monitor vulnerabilities, risks and potential threats to the second version of the protocol

Algorand was selected to be the blockchain to support a digital guarantees platform in Italy - expected to become operational in early 2023

FC Barcelona, one of the biggest soccer clubs in the world, announced a new global partnership agreement with biggest European crypto exchange WhiteBIT

Axelar Network integrates with Secret Network to offer private cross-chain messaging and NFT transfers

Economic/Government/Regulatory:

A federal judge ordered the Commodities Future Trading Commission to serve founders Tom Bean and Kyle Kistner as part of an ongoing lawsuit against Ooki DAO

An affiliate of the Chinese tech giant Alibaba has claimed that it will allow customers to pay with the digital yuan on its Taobao e-commerce platform

Brazil is set to launch a Central Bank Digital Currency (CBDC) in 2024

Iris Energy (IREN), the bitcoin miner that last month said some of its mining equipment isn't producing enough cash to meet its financing obligations, was hit by a class action suit

Exchange News:

FTX CEO details wrongdoings of SBF including commingling customer assets, relationship between FTX.US and FTX and Alameda. Confirms SBF and FTX acted fraudulently

SBF contemplated closing Alameda Research in September, according to charges filed by the Commodity Futures Trading Commission and wrote announcement drafts

FTX employees did invoicing and expenses over Slack and used QuickBooks, consumer-level tax software, to handle its accounting

Binance CEO CZ addressed major USDC outflows with some $1.6B withdrawn over the past 24 hours on the Ethereum network alone

FTX lawyers laid out evidence and allegations that SBF, Bahamian attorneys, and the Bahamian government are in violation of U.S. bankruptcy law preventing selective payments to creditors

U.S.-based customers of Binance are now able to use Binance Pay to send money on their mobile app

Native USDC on Avalanche is now integrated on Coinbase

Canada’s financial watchdog is enforcing stricter requirements for crypto firms following the collapse of FTX including a ban on margin and leverage trading

DeFi News:

Chainlink whale ‘Oldwhite’ used more than 150 wallets to avoid staking limits and staked over 1 million LINK tokens

Yearn now on Ledger - get the best risk-adjusted yields in DeFi, directly from your hardware wallet

MakerDAO to execute a bundle of eight governance actions including pay for delegates, raising the DAI interest rate and offboarding renBTC as collateral for DAI

NFT/Gaming/Metaverse News:

Illuvium Labs has released a new private beta for "Illuvium: Overworld,” the second of six games the team has planned over the next two decades. A third title, Illuvium: Zero, could also have an alpha release before Christmas

Microsoft’s attempt to acquire Activision Blizzard - a move originally aimed toward building Metaverse initiatives - hit a roadblock after an intervention by the United States Federal Trade Commission (FTC)

More than 5 million NFTs have been minted through Reddit’s Collectible Avatars initiative

Morningstar Ventures launch of 37xDubai art gallery in Q1 2023 - immersive and interactive digital art gallery located in the Burj Daman Tower

Fundraises:

Dogami, a web3 game that enables players to adopt and raise virtual dogs, raised $7M in a seed extension round led by European venture capital firm XAnge

Sooho.io, a provider of DeFi services, raised $4.5M in Series A+ funding round to help forge links between separate blockchains in South Korea led by Woori Technology Investment

MetaVersusWorld, a web3 hyper-realistic and interactive, persistent virtual multiverse, raised $2M in a seed funding round

Early Stage Projects:

zkSync 2.0 roadmap

ConsenSys launches zkEVM private beta testnet - over 150,000 signups so far

Fantom Gitcoin Grants Round 1 - 85+ projects, donations decide where grants will flow

DIMO Network, a decentralized automotive data insight network, launched its mainnet, which aims to give users more control over - and potentially earn rewards from - driving data

SynFutures, a DEX on the Polygon network, new V2 upgrade will allow for permissionless listing of futures trading pairs

Announcing the Quicksilver launch - a sovereign Cosmos-SDK zone providing liquid staking for the Interchain

LlamaNode RPCs are live - a reliable public good built for the decentralized world

Bridge Protection: now live on Socket. Powering Cross-Chain Innovation with Secure Bridging

Limit orders from CoW Protocol are officially live

Neon EVM’s Mainnet Launch delayed

Hooked Protocol’s Roadmap for 2023

Introducing the Moonbeam Accelerator - helps growth-stage projects on Moonbeam refine their ideas & reinforce skills for running successful Web3 startups

MOOAR Incubator Programme - exclusive mentorship programme from the Co-Founder of Find Satoshi Lab and the mastermind behind STEPN

Governance token and DAO for ParaSpace targeting a Q1 2023 launch

Data:

TL;DR: Over the past 7 days, a net $2B was withdrawn off Binance as it faces fresh insolvency FUD. For all exchanges, we can see that the top 5 coins being withdrawn are USDC, ETH, USDT, BUSD and APE. Binance TVL fell from $65.7B yesterday to $61.8B today. Also, CPI came in for November better than expected at 7.1%. We can see that we are down 2% since peaking in June at 9.1%. Economic data such as this will help shape the Fed’s future monetary policy. Remember that they have a stated goal of reaching 2% inflation.

Exchange Stablecoin Outflows:

Exchange Token Outflows:

Binance TVL:

CPI:

Research/Reads:

SEC Charges Samuel Bankman-Fried with Defrauding Investors in Crypto Asset Trading Platform FTX - source

JPMorgan -The Dynamics and Demographics of U.S. Household Crypto-Asset Use - source

Crypto Products, But Increasingly Useful - source

Adoption of DeFi, ZK Tech, NFTs and More Will Continue to Increase in 2023 - source

Coinbase is proud to publish our fourth Transparency Report 2022 - source

Have you seen our institutional-quality research?

M6 Research

Crypto Twitterverse:

GPT-nic @nic__carter

that's curtains for SBF. FTX CEO John Ray testifies before him tomorrow. Sam will be utterly hamstrung by this. financialservices.house.gov/uploadedfiles/…

Cumberland @CumberlandSays

After a very busy month, price action is consolidating. Given the nature of crypto and the tectonic shifts occurring beneath it, we do not expect this paradigm to last 🧵👇

Ignas.lens | DeFi Research @DefiIgnas

1/ Modular blockchains could be the key to a whole new world of crypto. And it's a growing narrative for the next bull run. What makes them special, and why should you care?🧵

Sisyphus @0xSisyphus

Lawsuit against Compound alleging, among other things, that COMP is an unregistered security Plantiffs own <$100 of COMP tokens

Did we miss anything or is there anything you want to discuss? We’d Love to hear your feedback and engage with the community! Feel free to leave a comment and let us know your thoughts on the Crypto market!