On December 13, 2022, Samuel Bankman-Fried, founder and CEO of worldwide cryptocurrency alternate FTX, was charged with two counts of wire fraud conspiracy, two counts of wire fraud, and one depend of conspiracy to commit cash laundering. Final week, Bankman-Fried, referred to colloquially as “SBF,” was sentenced to 25 years in jail and ordered to repay greater than $11 billion.
Lots has occurred on the planet of cryptocurrencies between that December indictment and SBF’s sentencing. Listed here are 5 issues that happened on the planet of crypto between that day and this one.
Bitcoin Boomed
By the point Bankman-Fried was charged in December of 2022, the worth of bitcoin had been in a dizzying plunge for practically a 12 months. Topping out at simply over $59,700 in November 2021, bitcoin was buying and selling at $16,700 by mid-December of the next 12 months.
Since then, cryptocurrencies on the whole and bitcoin in particular, have been on a tear. Bitcoin is up practically 3x from these mid-December lows, buying and selling north of $66,000. Ethereum is up 2.8x from its December lows.
Observers consider that the present increase in cryptocurrencies is completely different from the earlier increase which in some ways put crypto on the cultural map. A part of this has to do with the “cleansing out” of unhealthy actors reminiscent of SBF (and others), in addition to rising regulatory consideration of the respectable objectives of the great ones. And whereas this generally has contributed to its share of complications, it has additionally led to one of the promising developments in crypto: the launch of spot bitcoin ETFs.
The Spot ETFs are Right here!
One of the vital anticipated developments within the cryptocurrency area was the launch of U.S. spot bitcoin ETFs. And inside a month of Bankman-Fried’s charging, these spot bitcoin ETFs arrived.
As we reported in Tales from the Crypto in January, the U.S. Securities and Change Fee accepted of 11 spot bitcoin exchange-traded funds. The ETFs had been a direct hit; digital asset supervisor CoinShares famous that greater than $870 million poured into the brand new funds within the first three days. And just like the underlying asset they monitor (and monitor higher than earlier bitcoin ETFs that had been based mostly on bitcoin spinoff holdings), these funds have soared within the weeks and months since inception.
Crypto Crime Collapses
“Collapse” could also be a bit robust, however “2023 noticed a big drop in worth obtained by illicit cryptocurrency addresses,” in response to a report issued earlier this 12 months by Chainalysis. The report – 2024 Crypto Crime Traits – famous that from a excessive of $39.6 billion in 2022, the overall cryptocurrency worth obtained by illicit cryptocurrency addresses dropped to $24.2 billion in 2024, just a bit over 2021’s $23.2 billion mark. The report additionally confirmed a decline within the illicit share of all cryptocurrency transaction quantity from 0.42% in 2022 to 0.34% in 2023. A decline in each crypto scamming and hacking income in 2023 was additionally reported.
It’s nonetheless a harmful world on the market. The Chainalysis report additionally confirmed an increase in ransomware and darknet market exercise and expressed specific concern concerning the former. “The expansion of ransomware income is disappointing following the sharp declines we coated final 12 months,” the report reads, “and means that maybe ransomware attackers have adjusted to organizations’ cybersecurity enhancements.” The report hyperlinks to its earlier reporting on this development.
Extra Crypto Indictments
SBF was not the one crypto entrepreneur to run afoul of the regulation over the previous 12 months and half since his arrest in late 2022. Alex Mashinsky, co-founder and former CEO of cryptocurrency lending platform, Celsius Community, was indicted and arrested in July of 2023 on fees of fraud and market manipulation. Mashinsky’s arrest adopted a civil lawsuit filed in opposition to him by the Legal professional Basic of New York accusing him of securities fraud whereas serving as Celsius CEO. The SEC has additionally charged Mashinsky with violating Federal safety legal guidelines. Mashinsky has pled not responsible to the legal fees.
Changpeng Zhao, co-founder and former CEO of cryptocurrency alternate big Binance, was one other high-profile participant within the crypto area who bumped into main authorized points in 2023. Zhao launched Binance in 2017 and, inside eight months, grew the corporate into the most important cryptocurrency alternate on the planet by buying and selling quantity. Due to this, nevertheless, regulators started to pay nearer consideration to Zhao and Binance and, by 2023, the scrutiny had yielded penalties. In June, the SEC sued him and his alternate for violations of U.S. securities guidelines. By November, Zhao had agreed to resign from Binance and pay a nice of $50 million as a part of his responsible plea. The alternate additionally pled responsible and paid $4.3 billion in fines.
Ripple Wins and Loses Towards SEC on XRP
Whereas the time between December 2022 and March 2024 represented in lots of cases the correcting hand of authority placing some restraint on the business, there have been some cases during which it was authority that discovered itself restrained. In July of final 12 months, for instance, a Federal choose sided with Ripple in its argument in opposition to the Securities and Change Fee with regard to the standing of its token XRP. The SEC had argued that XRP was a safety and thus topic to its jurisdiction. Ripple, alternatively, contended that XRP was not a safety when bought on the open market by way of crypto exchanges.
Sadly for Ripple, the choose additionally dominated that Ripple’s institutional gross sales of XRP did symbolize unregistered securities choices. And this week we discovered the extent of the punishment the SEC desires to mete out for this offense: $1.95 billion. In a statement on X, Ripple CEO Brad Garlinghouse was unequivocal in his opinion on what the SEC is asking for:
“The SEC plans to ask the choose for $2B in a case that concerned no allegations (not to mention findings) of fraud or recklessness,” Garlinghouse wrote. “There’s completely no precedent for this. We are going to proceed to reveal the SEC for what they’re after we reply to this.”
Photograph by KATRIN BOLOVTSOVA