Cryptocurs will remember the past week for the long-awaited bitcoin drain, the closure of the once popular LocalBitcoins crypto exchange, and another US Securities and Exchange Commission crusade against the cryptocurrency industry. Cryptons, despite the extremely sad news, continued to joke and post memes, and the funniest and most relevant got into our weekly digest.
bitcoin
The first cryptocurrency has finally fallen this week, as analysts warned us. The asset has grown by 47% since the beginning of the year, and Glassnode specialists were about to announce the end of the crypto winter. But experienced cryptors have seen bitcoin gradually drop to the 50-half-day moving average (50MA), so that the price of $21,000, which seemed fantastic at the beginning of the week, is now a very real prospect for digital gold.
By the end of the week, the American regulator, the Securities and Exchange Commission (SEC), was able to drop the price of bitcoin to almost $21,400 when it declared war on cryptocurrency staking. Now traders are worried about the question: is this the return of the bear market, or just a strong fear of threats from SEC Chairman Gary Gensler? The most cowardly cryptans are rushing with might and main to fall to the level of $10,000, but experienced specialists in the first cryptocurrency believe that it is too early to talk about the next round of crypto winter.
Cryptowinter
While Bitcoin battled Gensler’s claims, the rest of the cryptocurrency industry was reaping the benefits of a disastrous 2022. The most important news was the closure of the oldest and once the largest peer-to-peer exchange LocalBitcoins. The management of the Finnish company did a lot to stop its work – LocalBitcoins was one of the first to expand the requirements for KYC and AML, and also limited the ability for its users to maintain privacy. Shortly before this, the company banned making transactions for cash – a popular option that allows you to buy or sell cryptocurrency in person has disappeared from the site’s website without a trace. In general, the closure of the site was a matter of time, and, finally, this time has come. Let’s remember.
The specialists of the cryptocurrency data aggregator CoinGecko were not too lazy and counted the number of layoffs in the industry in January 2023. As a result of the latest wave of layoffs, 2,806 people lost their jobs. The lion’s share of the cuts in January fell on crypto exchanges – 84% of those laid off worked in this sector. And something tells us that this is not the limit. If bitcoin continues to fall, and Gary Gensler continues his attack on the industry, then crypto startups risk being left without states at all.
The situation with Kraken
The situation with the popular American crypto exchange Kraken seemed completely normal to many – another platform that the American regulator ran into – what could be strange here? But the market reacted sharply, which means there is something to talk about. As always, Bloomberg was the first to speak about the claims of the Securities and Exchange Commission. The news broke on Wednesday evening. The journalists did not provide details, they only wrote that the exchange is at the stage of resolving problems with the SEC.
As early as Friday, Kraken agreed to pay a nominal $30 million fine and close the staking program on its platform for US users (that is, almost everyone). Why is it important? For example, because cryptocurrency staking programs may have to be closed by all US exchanges. And also to those who provide services to Americans.
A fine from the SEC is only half the trouble. The U.S. Internal Revenue Service (IRS) has filed a lawsuit to force crypto exchange Kraken and its affiliates to disclose customer information. According to court documents, the IRS is trying to identify all US citizens who conducted cryptocurrency transactions from 2016 (!) to 2020 to determine if they have met their tax obligations.
Securities and Exchange Commission Chairman Gensler made it clear in an interview with CNBC that the regulator will now pursue crypto staking that violates the right of U.S. investors to unconditional profit.
FTX news
We hoped that we would not hear anything more about the collapsed FTX cryptocurrency exchange, but the media do not let it be forgotten, pulling out new details. This week’s news, as always, is about money. The FTX Group sent closed letters to politicians who received donations from the former head of the exchange, Sam Bankman-Freed.
The letters contain demands for the return of donations. The amount of $93 million appears in court documents – that is how much client funds the ex-head of the exchange spent on American politicians.
The new head of FTX, John Ray, is working tirelessly and has already earned a lot of money from the bankruptcy of the exchange. From Nov. 11 to Dec. 31, 2022, he received $690,000 in fees. The head of FTX earns $1,300 per hour and worked an average of 75 hours a week. The thing is that John Ray – dear girl a unique specialist in the field of crisis management. Despite his extensive experience, he repeatedly admitted that such a catastrophic situation with reporting and in general, as in FTX, he had never seen in his career. And we have always drowned for the uniqueness of the crypto industry!
Ray is not the only one who is making good money from the collapse of the crypto empire. Lawyers working for FTX billed for their services. A total of five companies raking in the legal problems of the ill-fated exchange are claiming $ 20 million. And this is only for the first couple of months of operation. Clients seem to be at risk of being left without payments, not because Sam Bankman-Fried spent everything on prostitutes, but because lawyers are able to master any arbitrary amount in the time remaining before the trial.
By the way, there is also news about Bankman-Fried. He allowed Forbes USA journalists to spend one day next to him and spoke about the hardships of imprisonment. In prison, where the young former billionaire spent nine days, what he missed most was the internet, vegan food and a comfortable pillow. But now everything is in order: after being released on bail, the builder of a crypto empire does not come off the computer, playing Storybook Brawl and writing on his new blog. The game so captivated Bankman-Fried that he did not become distracted from it even during a conversation with reporters.
And to medical news
Everyone knows that cryptocurrencies are dangerous. Specialists of a luxury rehabilitation center in Spain know exactly how much. According to them, about 1% of crypto traders suffer from an “extreme” form of trading addiction. However, you should not despair. For just some $75,000, they are ready to rid the unfortunate cryptans of pathological passion. And this is not too high a price – one of the clients recently turned to the center, because he could not stop trading, making transactions in the amount of $ 200,000 daily.
In general, now you know what to do if you spend cosmic amounts on the crypt.
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