Crypto

Opinion | Why the FTX trial is such a bad look for crypto

Published

1 year ago

October 8, 2023

Opinion | Why the FTX trial is such a bad look for crypto

FTX co-founder Sam Bankman-Fried, a poster child for the cryptocurrency industry’s worst excesses, is on trial in New York this week after adopting a new look: a solemn face and a jailhouse trim of his famously floppy hair. The change comes as prosecutors seek to portray him as the architect of a crypto empire that robbed investors of billions of dollars when the inflated market for digital currency burst, like asset bubbles always do.

The federal trial of Bankman-Fried, who has been likened to Bernie Madoff for allegedly running one of the biggest frauds in history, will stain the cryptocurrency industry — even if he beats the odds and wins an acquittal on seven criminal counts, including wire fraud and conspiracy to commit money laundering. That is perhaps the clearest outcome of this case. Nothing prosecutors or defense attorneys will present at SBF’s trial will absolve the industry of blame.

Bankman-Fried has become a stand-in for the cryptocurrency industry, the nefarious face of a business in dire need of regulation.

Bankman-Fried has become a stand-in for the cryptocurrency industry, the nefarious face of a business in dire need of regulation. He designed FTX as an exchange that would entice everyday Americans to take risks trading in digital assets, from the historically volatile Bitcoin to even wilder bets such as dogecoin, which was based on an internet dog meme and lauded on social media by Elon Musk.

In a now infamous Super Bowl ad starring Larry David, FTX was described as “a safe and easy way to get into crypto.” Other celebrities, such as retired NFL quarterback Tom Brady and NBA star Stephen Curry, endorsed the platform. Many investors in the United States agreed, and FTX grew into the second-largest crypto exchange in the world, behind only Binance.

Months before the November 2022 collapse of his company, SBF testified before the House and the Senate, outlining regulations he would like to see for the cryptocurrency sector. He cultivated a reputation as an honest broker, who dreamed of changing the world through altruism and dressed almost exclusively in shorts and T-shirts. Prosecutors are out to prove SBF, far from being honest, was a robber baron all along.

During the six weeks that SBF’s trial is expected to last, jurors will be introduced to a catalog of questionable spending. The indictment describes multimillion-dollar expenditures on politicians’ campaigns and more than $200 million in real estate purchases in the Bahamas.

The trial will also show just how quickly an average person’s investment in digital currency can fall down a rabbit hole of mismanagement. At the heart of the government’s case is the allegation that Alameda Research, a trading and investment firm founded by SBF, used an unlimited line of credit to divert billions of dollars in funds from FTX customers to make its own speculative investments in assets such as FTT, the native token of FTX. (Bankman-Fried has pleaded not guilty.)

In opening statements Wednesday, SBF’s attorneys gave no indication they planned to defend the standards and safeguards of the cryptocurrency industry. Instead, defense attorney Mark Cohen told jurors, according to media reports, that FTX was simply a startup with growing pains.

“Sam and his colleagues were building the plane as they were flying it,” Cohen said.

For their part, prosecutors are also not going to say the cryptocurrency industry has robust standards. The linchpin of the government’s case is that FTX simply violated its own terms of service which promised customers, “Title to your Digital Assets shall at all times remain with you and shall not transfer to FTX Trading.”

Those assurances were false, according to prosecutor Thane Rehn, who said in his opening statements that when panicked customers tried to retrieve their funds as FTX collapsed, “all that was left at FTX is what amounted to an I.O.U. from Alameda.”

Notably absent from the government’s case is any allegation SBF violated regulations specifically designed for the cryptocurrency market. Congress has not yet passed a law to regulate the cryptocurrency sector, although the Commodity Futures Trading Commission has assumed an oversight role and the Securities and Exchange Commission has taken action against the industry’s top players.

On June 5, the SEC filed 13 charges against Binance and its CEO Changpeng Zhao, accusing them of multiple securities violations, including operating unregistered exchanges. A day later, the SEC brought a similar complaint against Coinbase, another major cryptocurrency exchange.

The SEC runs the risk of testing enforcement theories in the absence of a robust regulatory environment and players in the crypto industry run the risk of operating businesses without the clear guidance that regulations are intended to provide and having to defend against novel SEC theories. Given all this, it should not be surprising that the players themselves, such as Coinbase CEO Brian Armstrong, are asking Congress to pass legislation to regulate the industry. In the meantime, the enforcement of existing criminal laws at least reinforces the message that fraud is still fraud in any industry, and offers some assurance to investors that the most egregious bad actors, such as SBF, will be held accountable.

Crypto

Experts celebrate promising new breed of cryptocurrency: 'Not only promises efficiency …'

Published

11 hours ago

January 12, 2025

Press Room

Experts celebrate promising new breed of cryptocurrency: 'Not only promises efficiency …'

An up-and-coming player in the world of cryptocurrency is looking to revolutionize the industry through its unique processes that highlight sustainability.

According to Be3, cryptocurrency XRP, developed by Ripple Labs, could have a “transformative impact on both finance and environmental sustainability” thanks to its unique consensus mechanism that does not require mining and uses a negligible amount of energy even as it scales.

It generates a minuscule amount of pollutants per transaction while producing 1,110 pounds of electronic waste and impacting just over 8 cubic miles of natural resources.

This approach separates XRP from its contemporaries, which often rely on the notoriously power-hungry proof-of-work systems and hulking mining centers that can destabilize the grid.

Statistics provided by TRG Datacenters show that XRP is the second-most eco-friendly cryptocurrency behind IOTA, consuming just 0.0079 kilowatt-hours per transaction. Comparatively, bitcoin ranks last at a staggering 707 KWh per transaction.

Furthermore, the cryptocurrency became the first major global blockchain to achieve carbon net zero by purchasing enough renewable energy to offset its minimal energy requirements, per the XRP Ledger.

Be3 also noted other features that make XRP an attractive option for institutions focused on environmental responsibility, as it takes just three to five seconds to settle at fractions of a cent per transaction.

It’s a welcome addition to a sector that desperately needs more sustainable options. A study by the International Monetary Fund found that crypto mines, in conjunction with artificial intelligence data centers, accounted for 2% of global electricity demand and 1% of carbon dioxide pollution in 2022.

The United Nations found that the bitcoin mining network used 173.42 terawatt-hours of electricity between 2020 and 2021, resulting in a carbon footprint equivalent to burning 84 billion pounds of coal.

Coal and natural gas also supplied 66% of the energy for mining operations during this period, polluting the planet with planet-warming gases.

Luckily, the sector has made significant strides in recent times in an effort to become more eco-friendly.

Alephium, which utilizes a proof-of-work blockchain, has partnered with Gigatons to implement a proof-of-less-work consensus that is significantly more energy efficient.

Meanwhile, Ethereum has transitioned to a proof-of-stake system that has cut its energy consumption by nearly 100%.

“In a world increasingly attentive to environmental impact, XRP’s innovative technology not only promises efficiency but also a greener future,” Be3 wrote.

Join our free newsletter for good news and useful tips, and don’t miss this cool list of easy ways to help yourself while helping the planet.

Crypto

ZIUM Launches to Revolutionize Instagram and Cryptocurrency Solutions

Published

23 hours ago

January 12, 2025

Press Room

ZIUM Launches to Revolutionize Instagram and Cryptocurrency Solutions

Zagreb, Croatia–(Newsfile Corp. – January 12, 2025) – ZIUM, a cutting-edge agency founded to tackle some of the most pressing challenges in social media and digital marketing, is now officially open for business. Specializing in Instagram username claims, account unbans, and cryptocurrency marketing, ZIUM has positioned itself as a trusted partner for individuals and businesses seeking innovative solutions in the digital age.

The agency operates at the intersection of technology, social media, and blockchain marketing, empowering clients to unlock their full potential online. With a dedicated team of experts and a results-driven approach, ZIUM is redefining the way people navigate the ever-changing online landscape.

ZIUM

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A New Era of Digital Problem Solving
ZIUM’s services address real-world challenges in today’s digital ecosystem. Instagram, one of the largest and most influential social platforms, has become a critical tool for personal branding, business promotion, and community engagement. However, issues such as unavailable usernames or unfair account suspensions can hinder growth and cause frustration. ZIUM steps in to provide solutions that are fast, efficient, and tailored to each client’s needs.

Additionally, ZIUM excels in cryptocurrency marketing, offering projects and startups a strategic edge in the fast-paced blockchain industry. By combining deep knowledge of crypto trends with cutting-edge marketing strategies, the agency helps blockchain projects stand out in an increasingly crowded market.

Core Services Offered by ZIUM

Instagram Username Claims
In the crowded social media space, having the perfect Instagram username can make all the difference. Whether it’s for a brand, influencer, or business, ZIUM specializes in acquiring sought-after usernames to align with clients’ goals and identities. The agency handles the process from start to finish, ensuring a smooth and hassle-free experience.
Instagram Account Unbans
Account suspensions on Instagram can be devastating, especially for businesses and influencers relying on the platform for engagement and revenue. ZIUM offers expert account recovery services, helping clients navigate Instagram’s policies to regain access to their accounts quickly and effectively.
Cryptocurrency Marketing
The cryptocurrency space is highly competitive, and visibility is key. ZIUM provides end-to-end marketing strategies tailored to blockchain projects, ensuring they reach the right audience. From brand development to targeted campaigns, ZIUM helps crypto ventures grow and thrive in an ever-evolving market.

Crypto

Donald Trump Embraces Meme Coins—A Presidential First

Published

1 day ago

January 12, 2025

Press Room

Donald Trump Embraces Meme Coins—A Presidential First

Donald Trump is making news once more, but this time it’s not for political reasons; it’s about cryptocurrency. As he prepares to return as the 47th President of the United States, Trump will become the first sitting president to own meme currencies, a decision that has stirred both enthusiasm and skepticism in the crypto community.

Trump: A Significant Crypto Portfolio

Recent sources claim that Trump’s crypto wallet consists largely of meme coins and is valued roughly $8 million. Among the assets are $1.5 million in a meme currency with Trump-themed design and $5.5 million in TROG tokens.

In addition, he has about 1.3 billion GUA coins, which amounts to nearly $400,000, and $167,000 in TRUMPIUS tokens. This is a first of its kind, where Trump becomes an oddity in the world of politics and cryptocurrency, considering his earlier reluctance towards digital assets.

DONALD J. TRUMP WILL BE THE FIRST SITTING US PRESIDENT TO HOLD MEMECOINS pic.twitter.com/ODlNXDaKIT
— Arkham (@arkham) January 10, 2025

From Skepticism To Support

Trump’s journey into the crypto world is notable. He had been a strong critic of Bitcoin and other cryptocurrencies, calling them scams. But that all changed in 2024 when he started publicly endorsing Bitcoin and speaking out for the right to own it. That’s a broader trend among politicians, who are increasingly recognizing the potential of cryptocurrencies and their growing popularity among voters.

Trump’s financial success in the digital sphere was also aided by his venture into non-fungible tokens (NFTs) on Ethereum. Trump reportedly made a good living from these endeavors, and he currently owns roughly 496.77 ETH, which is worth about $1.6 million.

BTC is currently trading at $94,144. Chart: TradingView

Implications For Regulation

Many people are eager to see how Trump’s administration will regulate cryptocurrencies now that he is back in office. A possible change toward a more advantageous regulatory climate for digital assets is hinted at by the nomination of important individuals like David Sacks as “Crypto Czar” and Paul Atkins as SEC chair. This could result in more precise rules for investors and businesses involved in the cryptocurrency industry.

Trump

Donald Trump. Image: Ronda Churchill/Reuters

The policies by Trump are already changing market dynamics as everybody is anxiously awaiting them. During this time when Bitcoin hit a record high of $108k, while meme coins surged, analysts still feel that Trump could make the year 2025 a major turning point in cryptocurrencies.

Meme Coin Boom

The rise of Trump-owned meme coins is indicative of a broader cultural shift among younger investors who are fed up with established financial institutions. This combination of the political influence of Trump and the speculative nature of meme coins puts a scenario under which political events could significantly affect cryptocurrency markets. Thus, while the investors go about this, they are not ignorant of the volatility that is usually associated with meme coins.

Featured image from Fortanix, chart from TradingView