2024-11-15 07:53

BTC's rally has stalled amid hawkish comments from the Fed officials. The implied probability distribution is skewed to the left, suggesting expectations for price pullback. Shares in Trump media experienced a similar dynamic before the recent price slide. As bitcoin's (BTC) price struggles to secure a foothold above $90,000, developments in the Deribit-listed options market tied to the cryptocurrency resemble patterns that foreshadowed the recent price slide in the Trump media shares. The pattern referred to here is the implied probability distribution, representing markets' expectations for the underlying asset's future price derived from options prices at different strike prices and expiration dates. It shows the probabilities traders assign to the asset reaching different price levels. Per data tracked by crypto financial platform BloFin, the implied probability distribution now shows a "left shift," suggesting that the market participants see a higher probability of BTC trading at lower prices from here. "A typical indicator is the implied probability distribution: whether it is MSTR, COIN or Deribit's BTC options, the implied probability distribution of different expiration dates has shown a significant left shift," Griffin Ardern, head of options trading and research at crypto financial platform BloFin, told CoinDesk in a Telegram chat. "It seems that traders have an implied consensus that the prices of BTC and altcoins are still high, and more pullbacks may be on the way." Ardern added that a similar left shift was seen in the DJT options market, presaging the recent price slide. The share price has halved to $27 in just over two weeks, according to charting platform TradingView. DJT surged to a high of $54 at the end of October, as markets priced in a potential victory of Republican candidate Donald Trump's victory in the U.S. election held on Nov. 5. Well, pro-crypto Trump emerged victorious as expected, and since then, BTC has surged by over $20,000, tapping the $93,000 mark at one point. As of writing, the cryptocurrency changed hands at $88,100, according to CoinDesk data. Hawkish comments from the Fed officials support the case for a price pullback suggested by the implied volatility distribution. On Thursday, Chairman Jerome Powell said that the economy is not sending any signals that we need to be in a hurry to lower rates, dashing hopes for faster liquidity easing. Since September, the Fed has already cut rates by 75 basis points, offering bullish cues to risk assets. That said, most market participants continue to be bullish, taking bets that would profit from a potential price rise beyond the $100,000 barrier. https://www.coindesk.com/markets/2024/11/15/is-bitcoin-on-shaky-ground-market-signals-reflect-patterns-that-foretold-the-recent-slide-in-trump-media-shares/

2024-11-15 04:48

For her role in the theft and laundering of around 120,000 bitcoin, Razzlekhan will receive her sentence on Nov. 18. Lichtenstein was behind the theft of 120,000 bitcoin from Bitfinex in 2016. Prosecutors described his attempts to launder the money as “the most complicated” techniques IRS agents had seen to date. Ilya Lichtenstein was sentenced to five years in prison for his role in the theft of approximately 120,000 bitcoin (BTC) from crypto exchange Bitfinex, the U.S. Department of Justice has announced on Thursday. The 35-year-old hacked the network in 2016, using “advanced hacking tools and techniques”. Once inside the network, Lichtenstein fraudulently authorized more than 2,000 transactions transferring 119,754 bitcoin from Bitfinex to his own wallet. He then took steps to cover his tracks by deleting from Bitfinex’s network access credentials and other log files that could have revealed his conduct to law enforcement. Following the hack, Lichtenstein and his wife, Heather Morgan laundered the stolen funds. Morgan, also known by her rapper moniker “Razzlekhan”, will be sentenced on Nov. 18. Prosecutors have recommended she serve 18 months. According to court documents, the couple managed to laundered 25,111 bitcoin – 21% of the total pile Lichtenstein stole from Bitfinex – using a web of Eastern European bank accounts and bitcoin mixing services to hide the origin of the funds. Prosecutors described the methods as “the most complicated money laundering techniques [IRS agents] had seen to date.” Among the methods they used were are utilizing computer programs to automate transactions; depositing the stolen funds into accounts at a variety of darknet markets and cryptocurrency exchanges and then withdrawing the funds; converting bitcoin to other forms of cryptocurrency in a practice known as “chain hopping”; depositing a portion of the criminal proceeds into cryptocurrency mixing services; using U.S.-based business accounts to legitimize Lichtenstein’s and Morgan’s banking activity; and exchanging a portion of the stolen funds into gold coins. But despite their complexity, former founder and leader of cybercrime cartel Shadow Crew, Brett Johnson told CoinDesk last year that some of Lichtenstein’s laundering methods, such as using Coinbase accounts directly connected to him, “did not make sense” and suggested a lack of experience. “Ilya is a f***ing idiot. If you look at the way he was trying to launder money, he was doing absolutely everything wrong,” Johnson said at the time. Lichtenstein and Morgan were initially only suspected of laundering the money until the former outed himself as the hacker. Neither was charged in relation to the actual hack of Bitfinex despite Lichtenstein claiming responsibility. Instead, both pled guilty to one count of conspiracy to commit money laundering on Aug. 3, 2023, a charge that carries a maximum sentence of 20 years in prison. In addition to receiving the five year sentence requested by prosecutors, Lichtenstein will also serve three years of supervised release. https://www.coindesk.com/policy/2024/11/15/razzlekhans-husband-gets-five-years-prison-sentence-for-bitfinex-hack/

2024-11-15 04:29

Clayton oversaw the SEC between 2017 and 2020. President-elect Donald Trump said former Securities and Exchange Commission Chair Jay Clayton would be his U.S. Attorney for the Southern District of New York, heading up the state's Department of Justice branch. Clayton, who has advised a number of crypto firms since leaving the SEC in December 2020, oversaw the production of the SEC's DAO Report, which claimed jurisdiction over a broad swath of the crypto industry, and famously once said he believed most initial coin offerings were securities, a view later echoed by his successor, current SEC Chair Gary Gensler. "[Clayton] is a highly respected business leader, counsel and public servant," Trump said. One of Clayton's final actions at the SEC was to sign off on its lawsuit against Ripple Labs. The case is currently winding its way through the federal appellate court system, after a judge ruled last year that the company had not violated federal securities laws in making XRP available to retail traders through exchanges. He's currently a senior policy advisor at the law firm Sullivan and Cromwell, alongside his various advisory roles. He did not immediately return a request for comment. Under current U.S. Attorney Damian Williams, the SDNY branch of the DOJ brought prosecutions against a number of people tied to financial and corporate malfeasance, including last year's high-profile trial against FTX founder Sam Bankman-Fried, which resulted in his conviction and 25-year-sentence on seven different fraud and conspiracy charges. Trump previously tried to nominate Clayton to the office, to replace then-U.S. Attorney Geoffrey Berman. In the week since his reelection, the former and now future president has named a number of individuals he intends to nominate to cabinet and other positions, including Robert F. Kennedy Jr. to the Department of Health and Human Services, Representative Matt Gaetz to be the U.S. Attorney General, Senator Marco Rubio to be Secretary of State and former Representative Tulsi Gabbard to be the Director of National Intelligence. He's also named Elon Musk and Vivek Ramaswamy to be the co-heads of a Department of Government Efficiency, though Congress would need to approve of that entity's creation as an actual department, as opposed to some sort of advisory committee. https://www.coindesk.com/policy/2024/11/15/trump-names-former-sec-chair-jay-clayton-to-doj-office-the-same-office-that-prosecuted-sbf/

2024-11-15 04:24

“We believe that the underlying strength in BTC represents a systematic shift in the market in anticipation of Trump’s return to office,” QCP Capital traders said in a Friday broadcast. Bitcoin fell to $88,000 from a peak of $93,000 leading to $120 million in liquidations. The market is now pricing in a 66% chance of a 25 basis point cut in the December FOMC meeting, down from Thursday’s 83%. XRP zoomed 17% in the past 24 hours to beat gains in bitcoin {{BTC}] and majors, as shifting U.S. regulatory climate supported growth in tokens previously hampered by the Securities and Exchange Commission’s (SEC) actions. XRP traded above 82 cents in early Asian trading hours Friday, extending 7-day gains to 50% as it reached levels last seen in June 2023. The jump came as 18 U.S. states filed to sue the SEC and commissioners, including chairman Gary Gensler, accusing them of unconstitutional overreach of the crypto industry. The speculative optimism among traders is that a crypto-friendly Trump administration could benefit tokens linked to U.S.-based companies, such as Ripple Labs (related to XRP) and Uniswap (UNI), as the firms are more involved in boosting value for token holders. Meanwhile, BTC and majors slid as much as 4% amid profit-taking in late U.S. hours Thursday, an expected market reaction following several days of growth. The drop was catalyzed as Fed chair Jerome Powell delivered hawkish comments in his latest speech, dampening hopes of swifter rate cuts. "The economy is not sending any signals that we need to be in a hurry to lower rates," said Powell in prepared remarks at a Dallas conference. "The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully." As of Friday, the market is pricing in a 66% chance of a 25 basis point cut in the upcoming December FOMC meeting, down from Thursday’s 83%. BTC fell to $88,000 from a peak of $93,000 on Thursday, with the drop causing over $120 million in liquidations on both bullish and bearish bets. Ether (ETH) and Solana’s SOL fell 3.5%, while dog-themed dogecoin (DOGE) and shiba inu (SHIB) lost as much as 5%. The broad-based CoinDesk 20 (CD20), a liquid index tracking the largest tokens by market capitalization, was little changed. New top-20 token pepe (PEPE) corrected 8% after a 75% surge on Thursday following a Coinbase listing that briefly put the frog-themed meme at a $10 billion market capitalization for the first time. Bullish sentiment for bitcoin and the broader market remains unchanged, however. “In view of bitcoin’s impressive rally since the US election, our view is that $100,000 – $120,000 may not be too far off,” traders at QCP Capital said in a Telegram broadcast. “We believe that the underlying strength in BTC represents a systematic shift in the market in anticipation of Trump’s return to office” “His (Trump’s) idea of launching a strategic BTC reserve and rotation from Gold to BTC, provides a strong narrative that supports BTC prices,” QCP added. https://www.coindesk.com/markets/2024/11/15/xrp-jumps-17-outperforms-rest-of-the-market-as-rally-cools-trader-thinks-120k-bitcoin-target-still-in-play/

2024-11-15 00:08

The suit wants a court to block the SEC from suing crypto exchanges moving forward. A group of state attorneys general and the DeFi Education Fund sued the U.S. Securities and Exchange Commission and its five commissioners alleging the agency was overstepping its bounds in bringing enforcement actions against crypto exchanges. The lawsuit, filed Thursday afternoon in the U.S. District Court for the Eastern District of Kentucky, asks a federal judge to block the SEC from bringing enforcement actions, arguing "the SEC's 'crypto policy' is 'unlawful executive action'" and that it violated the Administrative Procedures Act. "The SEC’s sweeping assertion of regulatory jurisdiction is untenable. The digital assets implicated here are just that — assets, not investment contracts covered by federal securities laws," the lawsuit said. The case comes as Gary Gensler, the SEC's Chair under President Biden, is on his way out, with once and future president Donald Trump expected to appoint a more industry-friendly successor. The SEC's approach to crypto is encroaching upon states' rights to police the industry on their own, the suit argued. The suit also pointed to the major questions doctrine, a Supreme Court precedent that says federal agencies shouldn't litigate issues not directly assigned to them by Congress. Other federal courts have rejected the doctrine's application to SEC lawsuits against crypto companies. Miller Whitehouse-Levine, the chief executive officer of DEF, said in a statement that the suit was targeting SEC "overreach." "DeFi, and crypto broadly, promises to make financial services and the digital economy more accessible, efficient, interoperable, dependable, and consumer-focused," he said. "The SEC currently stands as a barrier to realizing this promise." An SEC spokesperson said, "We don’t comment on litigation. State securities regulators have been strong partners in efforts to uncover and prosecute misconduct in the crypto markets." Earlier Thursday, Gensler spoke briefly about the SEC's approach to crypto, saying it followed in the footsteps of his predecessor, Trump appointee Jay Clayton. "This is a field in which over the years there has been significant investor harm," Gensler said. "Further, aside from speculative investing and possible use for illicit activities, the vast majority of crypto assets have yet to prove out sustainable use cases." Kentucky Attorney General Russell Coleman said the suit aimed to "keep the federal government from reaching into Kentuckians' wallets." “Kentuckians of all ages and backgrounds are eager to access crypto to assert their financial freedom and guard against historic inflation," he said. "Instead of encouraging this vibrant new digital industry, the Biden-Harris Administration is unlawfully cracking down on cryptocurrency." https://www.coindesk.com/policy/2024/11/15/republican-state-ags-and-defi-lobby-sue-sec-over-crypto-enforcement-actions/

2024-11-14 22:08

After years of legal wrangling with the U.S. securities regulator, President-elect Donald Trump's win was taken by the crypto industry as a definitive sign that their courtroom shackles and enforcement actions would be thrown off when he takes the oath of office again. The Securities and Exchange Commission may have to slowly drag itself out of the legal mire with the crypto industry, even with an industry-friendly commission. Dropping existing cases would need a commission vote, lawyers say, and Republicans won't enjoy an SEC majority for a while. Coinbase's top lawyer says it's still counting on rapid action from the regulator. After years of legal wrangling with the U.S. securities regulator, President-elect Donald Trump's win was taken by the crypto industry as a definitive sign that their courtroom fights and enforcement pressures would be cast away when he takes the oath of office again. But shedding the enforcement legacy of Securities and Exchange Commission Chair Gary Gensler is not quite that simple, according to former agency officials and lawyers interviewed by CoinDesk, some of whom now represent crypto clients. While an incoming chairman appointed by Trump, a recent crypto convert, could effectively clear the decks of future enforcement actions, dealing with the many cases already being litigated is a stickier prospect. Turning the SEC ship could take several months into 2025 — maybe longer. And even then, the lawyers say, dramatic case dismissals might not even happen. What may be the most prominent of those outstanding federal cases is the SEC's battle with Ripple Labs, representing the first big dispute in which the agency accused the company of acting as a securities exchange without registering. The chairman then was Jay Clayton, not the industry-loathed Gensler. And the president who appointed him? Donald Trump. "The reality is that the SEC's current approach to crypto really began under the last administration," said Ladan Stewart, a partner at White & Case who was a top enforcement lawyer at the SEC and led some of its big crypto cases. "Gensler gets a lot of heat in the press about the Ripple case, but that case was actually brought in the waning days of the Clayton SEC," Stewart said. "In many ways, the SEC approach to crypto under Gensler is just a continuation of what the Clayton approach was." Read More: Gary Gensler's Contentious Reign Over Crypto Approaches Its Twilight The agency will now have some questions to answer anew: Does the legal standard known as the Howey test properly account for crypto tokens as securities or not? Do crypto securities keep the securities label when they're traded on secondary markets, such as Coinbase Inc.? Will the SEC fall back on Howey to police bad behavior in the crypto markets that would remain out of its reach if it doesn't pin its securities tag on the involved assets? On the first question, the agency has — since Clayton — viewed the basic business model of crypto platforms as a violation of securities law. Many tokens are securities, the agency has found, and they can't be legally traded if the exchange isn't registered. That's at the heart of the Ripple case and the enforcement action against Coinbase (COIN). Unlike the SEC's more familiar Wall Street cases that usually don't pose make-or-break threats to the involved companies, this core question decides whether the most prominent crypto exchanges can move forward in the U.S. or not. Are crypto tokens securities? "When I arrived in 2021, the commission under Chairman Jay Clayton had already brought some 80 actions, including the Ripple case, against participants in the crypto markets that were not following the common-sense rules of the road," Gensler said in a Thursday speech to the Practising Law Institute, noting that on his watch the agency "has continued that vigilance." The agency, which didn't respond to a request for comment on its current legal strategy, has put the weight of its crypto position on a U.S. Supreme Court ruling known as Howey, which defines what makes an asset a security. So far, the agency has had a mixed record of crypto decisions in the frontline federal courts. All of its cases asserted "very strong claims of violation of law," noted Patrick Daugherty, a former SEC lawyer who now represents crypto clients at Foley & Lardner in Chicago. The agency likely needs to go back and take a close look at them one-by-one, he said, and "each one has to be determined on its own merits." If nothing had changed, the cases would likely have landed in the Supreme Court's lap. But the return of Trump — the self-declared "crypto president" — will produce a new Republican leadership at the agency that is probably going to look more favorably on each of the major crypto cases. "In the most extreme case, they could simply dismiss," Daugherty said. But dumping the cases abruptly is "a big ask and might not be justified." The alternative could be structured settlements in which crypto firms don't admit wrongdoing but agree to stay inside whatever guardrails the agency sets down. "Those things take a little bit of time to put together and do correctly," Daugherty said. "I do think that it would be foolish to expect any significant change on the very first day," said Paul Grewal, the chief legal officer for Coinbase, who has led the company's fight with the SEC. But he told CoinDesk he does expect Trump's team to move swiftly, despite the messy track record of his first term in the White House. "I will gently disagree with those who suggest that this will take forever." Grewal's first choice is complete dismissal, but he suggested he's open to discussion. Need a commission majority On all the crypto cases, Anne Kelley, a longtime former SEC official who is now at Mercury Strategies, agreed that "the SEC could vote to stop litigating or to settle — maybe on the cheap," she told CoinDesk. "But that decision can’t be made unilaterally by a chairman. It needs to be voted on by the commission." The problem for all of the major decisions — dismissals, settlements and enforcement actions — is that they can't be handled only by a new chairman and the senior legal staff he or she brings in. At the federal appellate court level, for instance, the agency's general counsel supervises those matters, according to Tom Krysa, another former SEC enforcement lawyer who also works at Foley & Lardner in Denver. While that office may be able to pursue a stay (a formal delay) under the close watch of the chair's office, it would need the commission's majority approval to withdraw an appeal entirely. If Trump promotes Republican SEC Commissioner Mark Uyeda to be acting chairman of the agency in January, as is widely expected, Uyeda would still only have one other Republican on the five-member commission for a time. Even if Gensler chooses to leave the agency entirely after his chairmanship, rather than stay to finish his term as a commissioner that ends in June of 2026, there are still two other Democrats there who can stand in the way of a pro-crypto shift. While Commissioner Caroline Crenshaw's term expired in June, she's entitled to stay on until the end of 2025 or until she's replaced by a candidate who survives what can sometimes be a months-long confirmation process conducted by the U.S. Senate. In the nearer term, what the agency can quickly change is how it's handling cases that haven't yet been brought or investigations still short of their conclusions. Stewart's guess for the immediate future: "We're not going to see registration-only cases" like the ones that have plagued several prominent crypto firms. Coinbase's Grewal said he assumes the new SEC will quickly begin conducting "a careful separation of those cases that focus on fraud or scams" from the ones that are more technical in nature "but haven't resulted in any consumer harm whatsoever," such as the registration complaint against his company. For his part, Commission Uyeda has said he favors a halt in new actions against crypto firms for registration violations while the regulator figures out that process. "We need to lay out some clear guidance and interpretations on what exactly falls within and falls outside of the securities laws," Uyeda was reported as saying. John Reed Stark, a former SEC chief of the office of internet enforcement, said in a live session on X earlier this month that the crypto industry's weight has been felt and it'll probably get a very friendly SEC leadership. The eventual new enforcement director will be "the most important of all the positions that the chair will pick," he said, and they'll look at all the crypto cases — investigations and litigation — and likely direct all the resources to the "cases that involve egregious fraud" and pull the plug on those that don't. So crypto enforcement wouldn't stop entirely, but its nature could shift. "It'll be a very important transition; a lot of money is at stake in these cases," Daugherty said. More than that, he said, "the industry's future is largely at stake in the United States." https://www.coindesk.com/news-analysis/2024/11/14/ex-sec-lawyers-agree-crypto-enforcement-shackles-may-take-time-to-resolve/