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    Look Back Crypto Market (Week of Sep 18 – 24)

    Cryptory.net - Look at the most important moves and news in crypto over the last week.

    Crypto whale places hundreds of millions of dollars on Ethereum

    As Greeks.Live reported, a crypto whale has traded nearly 92,600 Ethereum call option contracts worth $150 million on Deribit. On Deribit, each option contract represents 1 ETH.

    Call options allow the contract owner to buy a specific asset in the future at a predetermined price. Naked options are taken speculatively and highly risky because traders have no protection against adverse movement in the underlying asset’s price. So, spending hundreds of millions of dollars to buy ETH options shows this whale’s optimism about the bullish potential of ETH.

    AI has potential to send Bitcoin reach $760,000 in the future

    Former BitMEX CEO Arthur Hayes said that Bitcoin will be the currency of artificial intelligence (AI) and could reach a price per coin of $760,000 in the process. He believes with its inherent qualities – an immutable fixed supply, digital scarcity and its status as “energy money”, Bitcoin will be the logical currency choice for any AI.

    Hayes predicts that Bitcoin price will increase significantly if the AI-based economy adopts it. AI could account for a significant portion of global GDP, between 5% and 50%, by 2025 or 2026.

    Optimism announced the 3rd community airdrop

    On September 19, 2023, Optimism officially announced its 3rd community airdrop, which distributes 19.4 million OP ($26.5 million) to more than 31,870 valid wallet addresses. Eligibility was determined by whether holders delegated their OP holdings to participate in governance votes.

    Blockchain Capital raises $580 million for 2 new funds

    Blockchain Capital, a crypto-focused investment firm, has raised $580 million for two new funds. The funding is split between $380 million for its sixth early-stage fund, which will focus on newer companies and protocols in pre-seed and Series A rounds, and $200 million for its opportunities fund, which will target late-stage investments from Series B onward.

    It is unclear which projects will be invested in; however, it will be used towards investing in crypto gaming, DeFi, and infrastructure startups.

    SEC vs. Binance legal battle escalates

    The SEC urged a D.C. court to approve an inspection into Binance.US, accusing the company of failing to produce documents sought by the regulator in ongoing legal proceedings.

    The SEC also believes Ceffu, rebranded earlier this year from Binance Custody, may also be serving Binance.US, and therefore being used to shift U.S. customer funds out of the country in violation of a previous agreement to not do so. The regulator further accused the company of providing “inconsistent representations about key facts, slow-rolled small productions of documents and information, and stonewalled on entire categories of information that would likely shed light on its shaky assertions concerning the custody of customer assets.”

    The SEC seeks an order compelling BAM to produce documents and communications concerning any entity providing its wallet custody software and related services. Legal battle between the SEC and Binance.US intensifies, with the judge urging collaboration to expedite the case’s resolution, impacting cryptocurrency regulation. Changpeng Zhao, CEO of Binance has responded to the legal issues involving Binance.US and the SEC: “For the record. Binance US does not use, and have NEVER used Ceffu or Binance Custody.”

    Binance delists 15 spot trading pairs

    Trading pairs were delisted including: ACA/BUSD, ALPHA/BUSD, ALPINE/BUSD, ANT/BUSD, ASR/BUSD, ATM/BUSD, BAL/BUSD, DGB/BUSD, FIRO/BUSD, GAL/BUSD, OOKI/BUSD, PORTO/BUSD, PSG/BUSD, RVN/BUSD, TWT/BUSD.

    Community concerned over Binance’s reserves

    Adam Cochran, a notable figure in the crypto community, has been vocal about his concerns, echoing the findings of Binance’s external auditor. Cochran pointed to the findings by a Binance auditor, remarking that “If your own external auditor can’t say you are fully collateralized” that is a problem. 

    Cochran also spotlighted the exchange’s reliance on the “Ceffu” wallet custody system, previously known as Binance Custody. According to Cochran, this system serves both Binance International and Binance US. 

    A pressing question that Cochran posits is: if the “Ceffu” system struggles with the presumably smaller operations of Binance US, how can it efficiently manage the vast international numbers? Cochran believes that if Binance US actually complied with regulations and was insulated from its international branches as they claim, these problems would not have occurred.

    Thereby, Cochran concluded that this exchange had abused users’ funds, leading to losses. In other words, Binance no longer has enough liquidity.

    Balancer was attacked again, causing damage of $238,000

    Balancer’s domain has been hijacked and the hackers were prompting users to approve harmful contracts designed to siphon funds from their wallets.  In spite of the platform’s warnings, the attacker managed to successfully transfer some funds. A report from PeckShieldAlert revealed that the attacker had made off with approximately $238,000 worth of cryptocurrency.

    Balancer is one of the leading automated market makers on Ethereum with a total value locked (TVL) of over $710 million. Previously on August 22, this project was also attacked with total damage of nearly $900,000.

    SEC warns more charges coming to exchanges, DeFi

    David Hirsch, who runs the agency’s office that handles crypto enforcement, said that apart from Coinbase and Binance, there are other exchanges and DeFi straying from the law. Hirsch said that the SEC may bring new charges against cryptocurrency brokers, dealers, exchanges, and several other businesses in the industry, because they are not registered with the SEC. Besides exchanges, DeFi projects won’t escape the enforcement division’s attention, either.

    Grayscale abandon rights to ETHW

    On September 15, 2022, Ethereum launched an update called “The Merge”. The goal of converting to PoS is to help the Ethereum network become more sustainable in the future. However, not all Ethereum miners have accepted this change. Some miners continued using the original PoW chain to mine ETH, leading to the emergence of Ethereum PoW (ETHW). ETHW aims to maintain the PoW mining mechanism, not using the new PoS mechanism.

    Notably, all ETH holders before The Merge were airdropped ETHW tokens. Even Grayscale, an institution holding over $4.9 billion in ETH, received ETHW tokens via airdrop. Grayscale and their shareholders were distributed more than 3.1 million ETHW, worth about $155 million at that time.

    Although Grayscale had considered buying ETHW from their shareholders and selling them, they delayed for the past year. The reason is that ETHW’s price has dropped more than 44 times from its highest price (ATH) at $58 the previous year.

    Poor liquidity could cause significant losses to shareholders. Therefore, Grayscale has made the final decision to abandon all rights to ETHW and it will no longer be involved in the management or holding of ETHW tokens in the future.

    Optimism sells $160M in OP tokens 

    The Optimism network announced that it is selling 116 million OP tokens in a series of planned sales. Optimism also revealed that the tokens are being sourced from the unallocated portion of the OP token treasury, meaning that they are not part of the circulating supply.

    Mt. Gox delays repayment deadline by a year

    Mt. Gox, the crypto exchange from which bitcoin now worth almost $23 billion was stolen nearly a decade ago, has delayed the deadline for repaying people by a year. The new deadline for the now-defunct exchange is Oct 31, 2024, instead of Oct 31 of this year. According to the balance sheet, Mt. Gox currently holds 142,000 BTC, 143,000 BCH and 69 billion Japanese yen.

    ETH gas fee suddenly soars 300 times

    The fee on the ETH mainnet has gone up from less than 10 to approximately 300. This marks the largest fluctuation in gas fees on Ethereum in 2023.

    Wu explains this sudden surge in gas price by the high on-chain activity of the Binance 14 hot wallet, which belongs to the leading crypto exchange spearheaded by Changpeng Zhao (CZ). Wu added that the amount of gas consumed by transactions made via this wallet today has surged to 362 ETH, with the overall number of transactions reaching 94,000.

    Coinbase is the largest Bitcoin holder in the world

    Blockchain intelligence platform Arkham recently identified that crypto exchange Coinbase holds almost 1 million Bitcoin in its wallets. The coins are worth more than $25 billion at current market prices for BTC. This amount is equivalent to 5% of all existing Bitcoin. With 5% of the total Bitcoin supply, Coinbase is currently the entity holding the most Bitcoin in the world.

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