500 Episodes: Here Are Some That Stood Out to Laura Shin
Weekly News Recap: 🎤 500 episodes of Unchained!, 🤪 SBF blames his lawyers, ❌ Binance's layoffs, 👜 Gemini and Genesis lawsuit, and more ❕
Laura Shin Reflects on 500 Episodes of ‘Unchained’
In the fast-paced world of crypto where a single year feels like a decade in any other field, Laura Shin's wealth of experience is substantial.
In celebration of the 500th episode of Unchained, Laura takes a step back to be in the interviewee's chair, answering queries posed by Unchained Contributing Editor Zack Seward. They discuss memorable moments since the podcast's inception in 2018.
From the rapid ascent of Binance, the controversial interview with Martin Shkreli, to a conversation with Terra's founder Do Kwon, Laura peels back the curtain, offering a rare glimpse into her methodology, her cherished moments, and the evolution of key episodes over time.
Weekly News Recap
Bahamas Holds Key to Unraveling Charges Against SBF
The spotlight focused again this week on Sam Bankman-Fried. As U.S. prosecutors seek to proceed with a range of charges against the former CEO of the bankrupt FTX exchange, they have turned to the Bahamian government for a specialty waiver. In December, Bankman-Fried was extradited from the Bahamas, but now his legal team contends that any new charges violate the extradition treaty between the two countries.
The U.S. Justice Department, however, argues that the treaty does not limit the charges that can be brought post-extradition. While they maintain the validity of the charges, they have recognized the Bahamian government's authority to halt certain aspects of the case. As the Justice Department notes, the Bahamas' response will be "dispositive" in deciding how to proceed with the additional charges.
The three counts involve allegations of conspiracy to commit bank fraud, operating an unlicensed money-transmitting business, and violating the Foreign Corrupt Practices Act. A hearing on the motion to dismiss the charges is set for June 15.
In response to fraud charges, SBF's defense team is set to argue that he acted based on advice from law firm Fenwick & West. The team seeks documents relating to the firm's advice on crucial matters concerning FTX and Alameda Research, SBF’s proprietary trading shop. The documents include advice on the creation of North Dimension, allegedly to circumvent Silvergate Bank's account conditions, and the recommendation to use transient messaging apps for business communication.
Scrutiny Intensifies Over FTX Amid Push for Independent Examiner
The battle to appoint an independent examiner for FTX has escalated to the U.S. Third Circuit Court of Appeals, thanks to a ruling by District Judge Colm Connolly. The request, championed by the U.S. Trustee Andrew Vara representing the Department of Justice (DOJ), had been rejected by a bankruptcy judge citing significant costs estimated to be near or exceeding $100 million.
Four U.S. senators, including Elizabeth Warren (D-Mass.) and Cynthia Lummis (R-Wyo.), voiced support for the independent examination. They argued that the law firm representing FTX had a conflict of interest given its past association with the exchange. The senators stated: "The firm is simply not in a position to uncover the information needed to ensure confidence in any investigation or findings."
Binance Reportedly Reduces 20% of Workforce
Rumors of massive workforce cuts at Binance started with a tweet from journalist Colin Wu, who cited multiple sources claiming that Binance had commenced layoffs. Wu said the layoffs would represent approximately 20% of Binance’s 8,000 employees, or 1,600 people.
Binance was quick to respond, characterizing the move as a strategic initiative to optimize talent within the organization. The company stated: "We periodically review how we can best allocate our talent to the right teams with the right resources," underlining that this process may entail letting go of employees who may not be performing well or who might not be the right cultural fit.
CEO Changpeng Zhao (CZ) echoed these sentiments in his commentary on Binance’s "bottom out" program, which regularly reassesses staff.
Despite the layoffs, Binance is still looking to fill hundreds of roles. The changes come as the company grapples with a shrinking market share and enhanced regulatory scrutiny.
Moreover, Binance is reportedly considering a plan to allow certain institutional traders to hold their collateral in a bank, potentially using Bank Frick and FlowBank, as alternatives to keeping it on its platform.
In related news, blockchain data analytics platform Nansen announced a 30% reduction in its workforce to curtail costs amid the ongoing market conditions.
CEO of Crypto Bridging Protocol Multichain Goes Absent
Following technical problems, Multichain, one of the most extensive bridging protocols in the crypto ecosystem, reported that its CEO Zhaojun was missing in action.
"In the past two days, the Multichain protocol has experienced multiple issues," the team said on its official Twitter account, adding that they were unable to contact Zhaojun for essential server access for maintenance. These access issues have also affected chains such as Kekchain, PublicMint, and Dyno Chain, among others.
Rumors had been circulating about the Multichain team's whereabouts, particularly in light of the recent alleged arrests in China.
Despite the unfolding drama and speculation, the price of Multichain's token remained resilient, with a 4% rise in the past 24 hours.
Gemini and Genesis Seek Dismissal of SEC Lawsuit
Gemini and Genesis Global Capital, under bankruptcy protection, are asking a U.S. court to dismiss a lawsuit filed by the Securities and Exchange Commission. The SEC accused the companies of selling unregistered securities through Gemini's 'Earn' program, which provided yield on crypto assets.
The companies have countered, stating that the lawsuit lacks legal or factual basis. They argued that the Earn program was not a case of selling unregistered securities, stating that "the SEC seeks to turn the Earn program into something it was not."
In the wake of the lawsuit, Genesis had to file for bankruptcy and has since been in mediated negotiations with its parent company, the Digital Currency Group (DCG), for a restructuring and settlement agreement.
Crypto Mining Breathes a Sigh of Relief
President Joe Biden's proposal of a 30% excise tax on crypto mining companies in his 2023 budget proposition was recently swept away in a debt ceiling deal. The excise tax, aimed at energy consumption for crypto mining, had been planned to be phased in over three years, with a 10% increase each year.
However, in an effort to circumvent a U.S. government debt default, this controversial tax has been dropped, as revealed by Ohio Representative Warren Davidson. According to Davidson, the draft bill will block the proposed tax on crypto miners' electricity usage. This draft legislation, which is currently awaiting congressional approval, would suspend the debt ceiling for two years, allowing the U.S. government to continue borrowing money and meeting its financial commitments, something that was seen as positive by many crypto traders.
Meanwhile, Bitcoin miners witnessed a surge in transaction fee revenue this May, reaching a two-year high, primarily due to the rise in Bitcoin NFTs, as the mining difficulty surpassed the 50 trillion line, according to data from BTC.com.
Additionally, stablecoin provider Tether is investing in a sustainable Bitcoin mining and energy production facility in Uruguay, with operations projected to begin by the third quarter of this year.
DAI Savings Rate to Experience a Surge
MakerDAO, the decentralized platform behind the DAI stablecoin, took center stage as it considered a substantial increase in the DAI Savings Rate (DSR). Earlier this week, Block Analitica, a DeFi risk management firm, proposed an increase in the DSR from its current rate of 1% to 3.3%. This proposed change, deemed a potential "huge tailwind for the entire DeFi ecosystem" by Primoz Kordez, founder of Block Analitica, could potentially boost the circulation of Dai and the stability of its price.
On Thursday, MakerDAO confirmed that the DSR will actually be raised to 3.49%, and that the proposal will be implemented through an upcoming executive vote within the Maker Governance system.
This increase is poised to change the landscape of DeFi, potentially drawing more yield farmers to the platform and spurring growth across the entire DeFi ecosystem. However, some analysts noted that as more capital flows into the DSR, there might be fewer stablecoins available for borrowing, leading to an overall increase in stablecoin rates.
Furthermore, MakerDAO made significant changes to its reserves. The community unanimously voted to remove $500 million worth of Paxos Dollar (USDP) from its holdings, which impacts approximately half of USDP's supply. This is a setback for Paxos, already under pressure from regulatory challenges.
Simultaneously, MakerDAO's community voted to invest an additional $1.28 billion in U.S. Treasury bonds via crypto asset manager BlockTower Capital. These moves are part of MakerDAO's strategy to diversify reserve assets.
Power Is Restored in Tornado Cash DAO
The Tornado Cash decentralized autonomous organization (DAO) experienced a dramatic turnaround as the attackers who had gained control over the DAO in the previous week reversed their actions. The anonymous group put forth a proposal to restore the usual governance state, which passed with 517,000 TORN votes, remarkably including votes from the attackers themselves.
While the protocol is slated to return to the hands of the original governance token holders, the motive behind this apparent surrender of control is unclear. There is speculation that the attackers could either have lost interest after swapping 483,000 TORN tokens for Ethereum (ETH), or they could be attempting to increase TORN's price before selling off the remaining tokens.
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Everyone’s been saying that the U.S. government is trying to kill crypto. Listen to Ginny from Unchained, who has some thoughts on whether it’s actually a secret…
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