{"id":26544,"date":"2024-04-07T23:07:05","date_gmt":"2024-04-07T23:07:05","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=26544"},"modified":"2024-04-08T08:31:35","modified_gmt":"2024-04-08T08:31:35","slug":"crypto-is-going-great-kucoin-busted-how-kickstarter-shot-itself-in-the-foot-with-blockchain-tether-goes-ai","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2024\/04\/07\/crypto-is-going-great-kucoin-busted-how-kickstarter-shot-itself-in-the-foot-with-blockchain-tether-goes-ai\/","title":{"rendered":"Crypto is going great: KuCoin busted, how Kickstarter shot itself in the foot with blockchain, Tether goes AI"},"content":{"rendered":"<p><em>By <strong>Amy Castor<\/strong> and <strong>David Gerard<\/strong><\/em><\/p>\n<ul>\n<li aria-level=\"1\">We write for money! Here\u2019s<a href=\"https:\/\/www.patreon.com\/amycastor\"> Amy\u2019s<\/a> Patreon and here\u2019s <a href=\"https:\/\/www.patreon.com\/davidgerard\/\">David\u2019s<\/a>. For casual tips, here\u2019s<a href=\"http:\/\/ko-fi.com\/amycastor\"> Amy\u2019s<\/a> Ko-Fi and here\u2019s<a href=\"https:\/\/ko-fi.com\/A1529D5\"> David\u2019s<\/a>.<\/li>\n<li aria-level=\"1\">If you liked this post, <b><i>tell just one other person<\/i><\/b>. Send them a link! This really helps.<\/li>\n<\/ul>\n<blockquote><p>&#8220;he actually is satoshi and has access to the satoshi bitcoin horde, but wants nobody to know this. so he&#8217;s convincing everyone he absolutely isn&#8217;t satoshi by claiming he is satoshi in the least believable way imaginable&#8221;<\/p>\n<p style=\"text-align: right;\">\u2014 SubG<\/p>\n<\/blockquote>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2024\/04\/07\/crypto-is-going-great-kucoin-busted-how-kickstarter-shot-itself-in-the-foot-with-blockchain-tether-goes-ai\/craig-wright-harry-potter-header\/\" rel=\"attachment wp-att-26545\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-26545\" src=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2024\/04\/craig-wright-harry-potter-header.png\" alt=\"\" width=\"510\" height=\"315\" srcset=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2024\/04\/craig-wright-harry-potter-header.png 680w, https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2024\/04\/craig-wright-harry-potter-header-300x185.png 300w, https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2024\/04\/craig-wright-harry-potter-header-348x215.png 348w\" sizes=\"auto, (max-width: 510px) 100vw, 510px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<h3>KuCoin busted<\/h3>\n<p>The KuCoin crypto exchange has been charged by the Justice Department with deliberate and knowing violation of the Bank Secrecy Act, as have its founders, Chun Gan and Ke Tang. [<a href=\"https:\/\/www.justice.gov\/usao-sdny\/pr\/prominent-global-cryptocurrency-exchange-kucoin-and-two-its-founders-criminally\"><i>press release<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.justice.gov\/media\/1345231\/dl\"><i>indictment<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>The prosecution is for large-scale money laundering \u2014 \u201cproceeds from darknet markets and malware, ransomware, and fraud schemes.\u201d<\/p>\n<p>The price of bitcoin is <a href=\"https:\/\/amycastor.com\/2024\/03\/19\/bitcoin-goes-up-so-it-must-come-down-what-goes-into-the-price-of-btc\/\">set in these unregulated offshore floating casinos<\/a> \u2014 and we expect them to keep getting busted, because they\u2019re all laundromats for money.<\/p>\n<p>KuCoin didn\u2019t even require customers to provide identification until July 2023, when it got wind of a US investigation.<\/p>\n<p>KuCoin was previously <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2023\/03\/12\/crypto-collapse-silicon-valley-bank-falls-and-takes-out-usdc-new-york-calls-eth-a-security\/\">charged by New York<\/a> in March 2023 for dealing unregistered securities to New York users. They <a href=\"https:\/\/amycastor.com\/2023\/12\/28\/crypto-collapse-mt-gox-payouts-tether-hooks-up-the-feds-sec-says-no-to-coinbase-crypto-media-mergers\/\">settled<\/a> in December 2023.<\/p>\n<p>The CFTC has also charged KuCoin for offering commodity derivatives to US customers without registering and for failing to identify its customers. [<a href=\"https:\/\/www.cftc.gov\/PressRoom\/PressReleases\/8884-24\"><i>Press release<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.cftc.gov\/media\/10421\/enfkucoincomplaint032624%20\/download\"><i>complaint<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>Users have been leaving KuCoin as fast as possible. The exchange announced a $10 million airdrop of its own KCS token and some bitcoin just after the charges were announced. [<a href=\"https:\/\/www.kucoin.com\/blog\/letter-from-kucoin-ceo-10-million-airdrop-in-kcs-btc-in-thanks-to-community-support\"><i>KuCoin<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.ph\/ySPim\"><i>archive<\/i><\/a>]<\/p>\n<h3>Blockchain case study: Kickstarter<\/h3>\n<p>Kickstarter is a crowdfunding platform. You put up a planned creative work, get pledges, and Kickstarter takes a percentage. This is pretty simple. There are very few ways to mess it up.<\/p>\n<p>One way you can mess it up is to go into growth-at-any-cost mode and do stupid things for the sake of funding.<\/p>\n<p>In December 2021, Kickstarter announced that it was <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2021\/12\/09\/news-craig-wright-loses-baseball-bitcoin-kickstarter-on-the-blockchain-australian-crypto-scams\/\">pivoting to blockchain!<\/a> Nobody had any idea what this meant \u2014 including Kickstarter, who couldn\u2019t advance a single coherent reason, let alone a plan. [<a href=\"https:\/\/www.kickstarter.com\/articles\/the-future-of-crowdfunding-creative-projects\"><i>Kickstarter<\/i><\/a><i>, 2021; <\/i><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-12-08\/kickstarter-blockchain-will-combine-crowdfunding-with-crypto\"><i>Bloomberg<\/i><\/a><i>, 2021<\/i>]<\/p>\n<p>Users revolted. They were disgusted at the idea of the platform that many of them relied on getting into bed with scammy nonsense \u2014 \u201cpretty much all we have seen in that time from the crypto space is rampant fraud, theft, and financial ruin,\u201d said Isaac Childres of Cephalofair Games.<\/p>\n<p>Before the blockchain announcement, board games and tabletop gaming had long-established relationships with Kickstarter. In fact, Kickstarter had a near-monopoly in the sector. After the announcement, the game creators largely moved to BackerKit and Gamefound.<\/p>\n<p>Fantasy author Brandon Sanderson used to pre-market his books at Kickstarter. His last Kickstarter campaign made $41 million \u2014 the largest project in Kickstarter\u2019s history. $2 million went to Kickstarter for just running the platform. Sanderson moved to BackerKit after Kickstarter\u2019s blockchain announcement; his present project is at $23.7 million as we write this. [<a href=\"https:\/\/www.cnbc.com\/2022\/03\/31\/authors-record-breaking-kickstarter-campaign-closes-at-41point7-million.html\"><i>CNBC<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.backerkit.com\/c\/projects\/dragonsteel\/words-of-radiance-leatherbound\"><i>Backerkit<\/i><\/a>]<\/p>\n<p>Why did Kickstarter do something so stupid? It turns out that Andreessen Horowitz, through their a16z Crypto unit, promised to buy $100 million of early Kickstarter investors\u2019 shares in return for 25% of the company \u2014 if Kickstarter would just say they were adopting \u201cblockchain.\u201d [<a href=\"https:\/\/fortune.com\/crypto\/2024\/03\/11\/kickstarter-blockchain-a16z-crypto-secret-investment-chris-dixon\/\"><i>Fortune<\/i><\/a><i>, <\/i><a href=\"https:\/\/web.archive.org\/web\/20240311124253\/https:\/\/fortune.com\/crypto\/2024\/03\/11\/kickstarter-blockchain-a16z-crypto-secret-investment-chris-dixon\/\"><i>archive<\/i><\/a>]<\/p>\n<p>The particular blockchain was <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2021\/02\/20\/facebook-whatsapp-pay-libra-diem-cbdc-news-diem-live-in-march\/\">Celo<\/a> \u2014 a basket-based stablecoin intended to <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2020\/05\/15\/news-9-billion-tethers-reddit-tokens-kik-is-doomed-singapore-joins-libra-chinas-cbdc\/\">copy<\/a> Facebook\u2019s ill-fated <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/libra\/\">Libra<\/a>, with Libra\u2019s original creator Morgan Beller on board as an advisor. Celo happens to be another a16z portfolio company.<\/p>\n<p>Kickstarter was profitable before this. But they didn\u2019t have a path to cancer-like growth at all costs. So they went along with a16z\u2019s blockchain promotion.<\/p>\n<p>Kickstarter had refused to recognize a union at the company in 2019 and illegally fired two of the union organizers. Kickstarter finally did recognize the union, but also had massive layoffs because so many creators had left the platform due to Kickstarter&#8217;s efforts not to recognize the union. They preferred to destroy their profitable company rather than allow a union to gain the slightest toehold.<\/p>\n<p>Everette Taylor, Kickstarter\u2019s fifth CEO in a decade, told TechCrunch a week after he started in September 2022 that \u201cwe\u2019re not committed to moving Kickstarter to the blockchain or doing anything specific there.\u201d [<a href=\"https:\/\/techcrunch.com\/2022\/10\/04\/kickstarter-ceo-everette-taylor\/\"><i>TechCrunch<\/i><\/a>]<\/p>\n<p>Taylor is still casting about for new revenue opportunities for Kickstarter \u2014 but not on the blockchain.<\/p>\n<h3>Tethers, right, but on the AI<\/h3>\n<p>Tether has announced a pivot to AI. This is definitely the most bizarre Tether news we\u2019ve heard in a while. But apparently Tether invested in Northern Data Group in September 2023. [<a href=\"https:\/\/tether.to\/en\/tether-makes-strategic-investment-into-northern-data-group-set-to-become-the-biggest-independent-ai-player-in-europe\/\"><i>Tether<\/i><\/a><i>, 2023, <\/i><a href=\"https:\/\/archive.ph\/Skg5X\"><i>archive<\/i><\/a>]<\/p>\n<p>Northern Data is a bitcoin miner based in Germany that\u2019s attempting its own pivot to AI. They have three lines of business: Taiga (NVidia cards in the cloud), Ardent (data center space), and bitcoin mining as Peak Mining.<\/p>\n<p>Northern Data as a whole seems to be losing money fast. Their 2022 financials are only just out and show considerable losses. [<a href=\"https:\/\/lp.northerndata.de\/hubfs\/Investor%20Relations\/Presentations%20and%20Conference\/Northern-Data-Group-2022-Financials.pdf\"><i>Northern Data<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>Peak Mining seems to be doing okay? Mining cost them 13,011 EUR per BTC in 2023 and they sold most of the fresh coins at a considerable profit. It was Northern Data who bought the Whinstone facility in Texas in 2020 and sold it to Riot in 2021. [<a href=\"https:\/\/markets.ft.com\/data\/announce\/detail?dockey=600-202402020130DGAP____CORPNEWS_corporate_1828531_en-1\"><i>press release<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/puhLz\"><i>archive<\/i><\/a>]<\/p>\n<p>Anyway, Tether is setting up its own new AI labs in London and Turkey. [<a href=\"https:\/\/tether.to\/en\/tether-expands-ai-focus-welcomes-top-talent-to-fuel-innovation\/\"><i>Tether<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.ph\/MR2SO\"><i>archive<\/i><\/a><i>; <\/i><a href=\"https:\/\/tether.recruitee.com\/o\/head-of-ai-research-and-development\"><i>Tether<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.ph\/m4tcJ\"><i>archive<\/i><\/a><i>; <\/i><a href=\"https:\/\/tether.recruitee.com\/o\/head-of-ai-research-and-development-2\"><i>Tether<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.ph\/YtNN4\"><i>archive<\/i><\/a>]<\/p>\n<p>In more normal Tether news, USDT appears to be the favored method to evade international sanctions on Russia, to the tune of $20 billion sent through the Garantex crypto exchange \u2014 <i>after<\/i> Garantex was sanctioned in April 2022 for cashing out ransomware payouts. \u201cThe trick is Tether.\u201d The US and UK are investigating. [<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-03-28\/crypto-transfers-to-russian-exchange-worth-20-billion-probed-by-us-uk\"><i>Bloomberg<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.ph\/q3Sq0\"><i>archive<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.wsj.com\/finance\/currencies\/crypto-fuelsrussian-shadow-trade-for-weapons-parts-1bfdc1a1\"><i>WSJ<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/XkBzL\"><i>archive<\/i><\/a>]<\/p>\n<p>The US has busted a tech support scam that took payment in tethers and has seized 14 million USDT. Tether has been keen to promote how helpful it was to the US government, if only because they didn\u2019t want to go to jail themselves. [<a href=\"https:\/\/www.justice.gov\/usao-ndil\/pr\/united-states-seizes-14-million-cryptocurrency-linked-alleged-tech-support-scam\"><i>Justice Department<\/i><\/a><i>; <\/i><a href=\"https:\/\/tether.to\/en\/tether-assists-us-government-in-seizure-of-illicit-funds-linked-to-tech-scam\/\"><i>Tether<\/i><\/a>]<\/p>\n<h3>We are all Satoshi. Not you, Craig<\/h3>\n<p>In the most stunningly obvious legal finding in history, the High Court of England and Wales has ruled that Craig Wright is not Satoshi Nakamoto:<\/p>\n<blockquote><p>First, that Dr Wright is not the author of the bitcoin white paper. Second, Dr Wright is not the person who adopted or operated under the pseudonym Satoshi Nakamoto in the period 2008 to 2011. Third, Dr Wright is not the person who created the bitcoin system. And, fourth, he is not the author of the initial versions of the bitcoin software.<\/p><\/blockquote>\n<p>This will tremendously help anyone that Wright has <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2019\/04\/18\/news-craig-wright-sues-to-be-called-satoshi-kleiman-deposition-satoshis-treasure-quadriga-eos\/\">sued and made legal threats against<\/a> for saying that he is not Satoshi.<\/p>\n<p>Wright was <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/01\/08\/news-el-salvador-volcano-bonds-to-sell-for-tethers-bitcoin-didnt-cause-kazakhstan-riots-lawsuits-on-the-blockchain-mobilecoin-live-on-signal-craig-wright-sued-again\/\">sued in 2021<\/a> by a conglomerate of crypto companies called the Crypto Open Patent Alliance \u2014 who wanted to stop what they saw as Wright\u2019s abuse of the English legal system to silence critics.<\/p>\n<p>COPA\u2019s lawyer, Jonathan Hough KC, told the court that Wright\u2019s claim to be Satoshi was a \u201cbrazen lie and elaborate false narrative supported by forgery on an industrial scale.\u201d [<a href=\"https:\/\/www.theguardian.com\/technology\/2024\/mar\/14\/australian-craig-wright-not-bitcoin-creator-satoshi-nakamoto-high-court-rules\"><i>Guardian<\/i><\/a>]<\/p>\n<p>COPA will be suggesting perjury action against Wright over all the ineptly forged documents he submitted for the case.<\/p>\n<p>The judge has ordered that \u00a36 million of Wright\u2019s assets be frozen to cover court costs. [<a href=\"https:\/\/www.coindesk.com\/policy\/2024\/03\/29\/uk-judge-freezes-craig-wright-assets-to-prevent-him-evading-court-costs\/\"><i>CoinDesk<\/i><\/a><i>; <\/i><a href=\"https:\/\/bitcoindefense.org\/wp-content\/uploads\/2024\/03\/COPA-v-Wright-WFO-Approved-Judgment-28.03.2024.pdf\"><i>Bitcoin Defense<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>Rory Cellan-Jones, the former BBC technology reporter who was one of the three journalists to publicize Wright&#8217;s initial claims, wrote up the ruling. [<a href=\"https:\/\/rorycellanjones.substack.com\/p\/craig-wright-the-man-who-isnt-satoshi\"><i>Substack<\/i><\/a>]<\/p>\n<p>Calvin Ayre, Wright\u2019s billionaire backer, didn\u2019t quite do a victory lap. Ayre will be disappearing from Twitter for a while. [<a href=\"https:\/\/twitter.com\/CalvinAyre\/status\/1768619693449883862\"><i>Twitter<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/iAD4Z\"><i>archive<\/i><\/a>]<\/p>\n<p>The <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2019\/06\/15\/craig-wright-has-to-show-up-in-florida-on-28-june-or-else\/\">Kleiman v. Wright<\/a> case from <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2018\/12\/28\/news-bitmain-fires-half-its-employees-and-all-of-bitcoin-cash-bitcoin-private-exploit-kleiman-v-wright-proceeds\/\">2018<\/a>, which Wright <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2021\/12\/09\/news-craig-wright-loses-baseball-bitcoin-kickstarter-on-the-blockchain-australian-crypto-scams\/\">lost in 2021,<\/a> is <i>still ongoing<\/i>. Wright was found in civil contempt for messing around in discovery and must pay Kleiman\u2019s attorney fees. [<a href=\"https:\/\/www.courtlistener.com\/docket\/6309656\/kleiman-v-wright\/?filed_after=&amp;filed_before=&amp;entry_gte=&amp;entry_lte=&amp;order_by=desc\"><i>Case docket<\/i><\/a>]<\/p>\n<h3>ETFs will surely save bitcoin<\/h3>\n<p>The UK has been more cautious than the US when it comes to bitcoin-based securities. The FCA allows ETNs (exchange-traded notes, a bit like ETFs) based on crypto in the UK \u2014 but only for professional and institutional traders, not for retail mums and dads. The London Stock Exchange will start listing bitcoin ETNs on May 28. [<a href=\"https:\/\/www.fca.org.uk\/news\/statements\/fca-updates-position-cryptoasset-exchange-traded-notes-professional-investors\"><i>FCA<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.coindesk.com\/business\/2024\/03\/25\/london-stock-exchange-will-start-market-for-bitcoin-and-ether-etns-may-28\/\"><i>CoinDesk<\/i><\/a>]<\/p>\n<p>All US bitcoin ETFs are cash-create only, but Bloomberg Intelligence thinks that Hong Kong is likely to approve bitcoin ETFs and that they&#8217;ll allow in-kind creation \u2014 deposit your bitcoins directly for shares. This will be an extremely handy money laundromat. [<a href=\"https:\/\/www.coindesk.com\/business\/2024\/03\/26\/hong-kong-likely-to-allow-in-kind-creations-for-spot-bitcoin-etfs-bloomberg\/\"><i>CoinDesk<\/i><\/a>]<\/p>\n<p>US bitcoin ETFs have shown a consistent net inflow of funds since they were created in January. In late March, this started reversing on many days \u2014 it seems that total demand may substantially have been filled, for all the furious marketing. Grayscale&#8217;s GBTC continues being drained. [<a href=\"https:\/\/www.theblock.co\/data\/crypto-markets\/bitcoin-etf\/spot-bitcoin-etf-total-net-flow\"><i>The Block<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.coindesk.com\/markets\/2024\/03\/26\/bitcoin-etfs-snap-outflows-streak-accumulate-154m\/\"><i>CoinDesk<\/i><\/a><i>; <\/i><a href=\"https:\/\/cointelegraph.com\/news\/cathie-wood-arkb-bitcoin-etf-outflow-record-surpasses-grayscale-gbtc\"><i>CoinTelegraph<\/i><\/a>]<\/p>\n<p>Grayscale wants a new mini-ETF for bitcoins, to be spun off from GBTC. The new fund will offer lower fees \u2014 though Grayscale hasn\u2019t said how low. Maybe they hope this will stem the bleeding. Or they think they can get the \u201cBTC\u201d stock market ticker. Grayscale holders will get some percentage of the new trust. [<a href=\"https:\/\/www.coindesk.com\/business\/2024\/03\/12\/grayscale-plans-low-fee-gbtc-spinoff-the-bitcoin-mini-trust\/\"><i>CoinDesk<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.sec.gov\/Archives\/edgar\/data\/2015034\/000119312524065444\/d785023ds1.htm\"><i>S-1<\/i><\/a>]<\/p>\n<p>BlackRock attempts to temper market expectations: yeah, bitcoin is gonna suck for future returns, but that&#8217;s <i>good<\/i> news for bitcoin. [<a href=\"https:\/\/www.cnbc.com\/2024\/03\/26\/blackrock-says-bitcoin-returns-likely-to-come-down-now-that-it-has-been-embraced-by-wall-street.html\"><i>CNBC<\/i><\/a>]<\/p>\n<p>The SEC is looking to classify ether (ETH) as a security, in an ongoing investigation that began after Ethereum shifted to <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/08\/20\/proof-of-stake-is-better-than-proof-of-work-but-ethereums-merge-wont-fix-any-other-problem-with-cryptocurrency\/\">proof of stake<\/a>. This may delay an ETH spot ETF. [<a href=\"https:\/\/www.coindesk.com\/business\/2024\/03\/20\/ethereum-foundation-under-investigation-by-state-authority\/\"><i>CoinDesk<\/i><\/a><i>; <\/i><a href=\"https:\/\/fortune.com\/crypto\/2024\/03\/20\/sec-gary-gensler-ethereum-security-commodity-crypto-foundation\/\"><i>Fortune<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/ZNt54\"><i>archive<\/i><\/a>]<\/p>\n<h3>It came from Chapter 11<\/h3>\n<p>Genesis has sold its GBTC! &#8230; and bought 32,000 bitcoins with the proceeds. This is <i>not usual<\/i> \u2014 but the largest creditors are crypto firms and they seem to have agreed to take bitcoins rather than dollars. This includes the Gemini Earn customers.<\/p>\n<p>This is a gamble that the price of bitcoin will still go up \u2014 at a market peak. It could be one of the stupidest things we\u2019ve heard this week. [<a href=\"https:\/\/restructuring.ra.kroll.com\/genesis\/Home-DownloadPDF?id1=MzA5NDA4NA==&amp;id2=-1\"><i>Doc 1546<\/i><\/a><i>, PDF; <\/i><a href=\"https:\/\/www.coindesk.com\/business\/2024\/04\/05\/genesis-completes-redemption-of-gbtc-shares-buys-32k-bitcoins-with-proceeds\/\"><i>CoinDesk<\/i><\/a>]<\/p>\n<p>Gemini will be returning up to $1.1 billion to Earn customers \u2014 whatever they don\u2019t get back from Genesis \u2014 and will pay a $37 million fine to New York. [<a href=\"https:\/\/www.dfs.ny.gov\/reports_and_publications\/press_releases\/pr202402282\"><i>DFS<\/i><\/a>]<\/p>\n<p>Genesis has settled <a href=\"https:\/\/amycastor.com\/2023\/01\/13\/sec-sues-genesis-and-gemini-genesis-owes-3-billion-to-creditors\/\">the SEC\u2019s case against them<\/a> over Gemini Earn \u2014 a $21 million fine payable at the end of the bankruptcy. [<a href=\"https:\/\/www.sec.gov\/news\/press-release\/2024-37\"><i>SEC<\/i><\/a>]<\/p>\n<p>BlockFi has settled with FTX and Alameda and will receive $874.5 million once FTX\u2019s bankruptcy plan is approved. $250 million of this will be treated as a secured claim. The court still needs to approve this. [<a href=\"https:\/\/www.coindesk.com\/policy\/2024\/03\/06\/blockfi-settles-with-ftx-alameda-estates-for-8745m\/\"><i>CoinDesk<\/i><\/a>; <a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.njb.1094078\/gov.uscourts.njb.1094078.2172.0.pdf\"><i>Doc 2172<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>BlockFi was dead after Three Arrows Capital blew up. FTX kept BlockFi\u2019s head above water with a $400 million line of credit \u2014 but then FTX imploded in turn. <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/11\/13\/ftx-files-for-bankruptcy-and-the-fallout-begins-whos-next\/\">FTX filed for bankruptcy<\/a>, and <a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.njb.1094078\/gov.uscourts.njb.1094078.2172.0.pdf\">BlockFi followed<\/a>. The companies sued each other over pre-bankruptcy loans in 2023.<\/p>\n<h3>The searing light of regulatory clarity<\/h3>\n<p>FTX founder\u00a0Sam Bankman-Fried has been sentenced. We are delighted not to have to think about him again for at least 12 years, if not the full 25. Sam got up to speak for himself during the sentencing hearing and, of course, tried <i>yet again<\/i> to throw Caroline Ellison under the bus. Molly White\u2019s post goes into depth. [<a href=\"https:\/\/www.citationneeded.news\/sam-bankman-fried-sentenced\/\"><i>Citation Needed<\/i><\/a>]<\/p>\n<p>The SEC is still going in hard against crypto exchanges for dealing in unregistered securities. It just settled with Erik Voorhees\u2019 ShapeShift crypto exchange for a $275,000 fine and a bar from dealing in unregistered securities \u2014 even though ShapeShift left the US in 2021. [<a href=\"https:\/\/www.coindesk.com\/policy\/2024\/03\/06\/shapeshift-settles-sec-charges-it-sold-crypto-securities\/\"><i>CoinDesk<\/i><\/a>; <a href=\"https:\/\/www.sec.gov\/files\/litigation\/admin\/2024\/34-99676.pdf\"><i>Order<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>Do Kwon, perpetrator of the <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/05\/10\/terras-stablecoin-does-a-2008-crisis-ust-crashes-and-takes-bitcoin-with-it\/\">Terra-Luna<\/a> crash of May 2022, is still in Montenegro. The legal wrangling continues over whether he gets extradited to the US or to South Korea. In the meantime, Kwon and Terraform Labs were found guilty of civil fraud in the SEC\u2019s case against them over Terra-Luna. [<a href=\"https:\/\/www.coindesk.com\/policy\/2024\/04\/05\/new-york-jury-finds-do-kwon-terraform-labs-liable-for-fraud-in-sec-case\/\"><i>CoinDesk<\/i><\/a>]<\/p>\n<p>Roman Sterlingov, the founder of old-school crypto mixing service Bitcoin Fog, has been convicted of money laundering. Sterlingov was initially <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2021\/04\/30\/news-bitcoin-mining-is-not-green-miners-versus-programmers-gold-is-cleaner-than-bitcoin-exchanges-collapse-nft-forgery\/\">busted by the IRS and the FBI in 2021<\/a>. Ilya Lichtenstein, a witness in the case, said he used the mixer to launder some of the massive pile of bitcoins that he and his wife Heather &#8220;Razzlekhan&#8221; Morgan <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/02\/12\/could-morgan-and-lichtenstein-have-done-the-2016-bitfinex-hack-im-not-ruling-it-out\/\">stole from Bitfinex in 2016<\/a>. [<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2024-03-12\/crypto-mixer-convicted-of-money-laundering-on-bitcoin-fog?embedded-checkout=true\"><i>Bloomberg<\/i><\/a><i>, <\/i><a href=\"https:\/\/archive.is\/5nDcM\"><i>archive<\/i><\/a>]<\/p>\n<h3>More good news for bitcoin<\/h3>\n<p>We detailed in April last year how the Federal Reserve <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2023\/04\/09\/so-much-for-wyoming-blockchain-regulatory-capture-the-fed-blocks-custodia-bank\/\">told Custodia Bank of Wyoming to just go away<\/a> \u2014 they definitely weren\u2019t going to be allowed to start a money-laundromat stablecoin backed by Fed dollars. As well as being dangerously incompetent.<\/p>\n<p>Custodia sued, but their case was thrown out in summary judgment. Judge Scott Skavdahl thinks the letter and intent of the law is extremely clear here. [<a href=\"https:\/\/storage.courtlistener.com\/recap\/gov.uscourts.wyd.61107\/gov.uscourts.wyd.61107.317.0.pdf\"><i>Order<\/i><\/a><i>, PDF<\/i>]<\/p>\n<p>Dan Davies, author of <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2021\/09\/23\/dan-davies-lying-for-money-not-a-book-about-crypto-except-it-totally-is\/\"><i>Lying for Money<\/i><\/a>, has a new book out: <i>The Unaccountability Machine: Why Big Systems Make Terrible Decisions \u2014 and How The World Lost its Mind<\/i>. You should also read his newsletter, it\u2019s great. [<a href=\"https:\/\/amzn.to\/3vGNpe6\"><i>Amazon UK<\/i><\/a><i>; <\/i><a href=\"https:\/\/amzn.to\/3VPU946\"><i>Amazon US<\/i><\/a><i>; <\/i><a href=\"https:\/\/backofmind.substack.com\/\"><i>Substack<\/i><\/a>]<\/p>\n<p>Amy got a bizarre email from Matthew Ledvina, a US tax advisor based in Switzerland, asking her to remove his name from <a href=\"https:\/\/amycastor.com\/2020\/01\/26\/news-cbdcs-are-whats-hot-vodafone-pulls-out-of-libra-more-wb21-stuff\/\">a post she wrote in 2020<\/a>. Ledvina pleaded guilty to a pump-and-dump in 2019 and was sentenced to 30 months probation and ordered to pay a fine \u2014\u00a0 but in his email, he said he was \u201cexonerated.\u201d Unfortunately, it turns out he was not exonerated \u2014 he pleaded guilty and was duly sentenced. Ledvina sent similar requests to Offshore Alert, who also noticed that his claims didn\u2019t check out \u2014 and they made his request public. [<a href=\"https:\/\/amyhcastor.files.wordpress.com\/2024\/03\/matthew-ledvina-email.png\"><i>Amy Castor<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.offshorealert.com\/stop-violating-my-privacy-writes-swiss-tax-adviser-convicted-securities-fraudster-matthew-ledvina\/\"><i>Offshore Alerts<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.offshorealert.com\/remove-my-name-writes-swiss-convicted-fraudster-struck-off-attorney-matthew-ledvina\/\"><i>Offshore Alerts<\/i><\/a><i>; <\/i><a href=\"https:\/\/www.justice.gov\/usao-ma\/pr\/swiss-attorney-sentenced-participating-global-pump-and-dump-scheme\"><i>DOJ<\/i><\/a><i>, PDF<\/i>]<\/p>\n<h3>Media stardom<\/h3>\n<p>David spoke to an Al Jazeera podcast about <a href=\"https:\/\/davidgerard.co.uk\/blockchain\/2022\/04\/14\/news-facebooks-zuck-bucks-worldcoin-wants-your-eyeballs-bitcoin-miners-still-cant-sell-their-coins-nft-gaming-fails\/\">Worldcoin<\/a> and its <a href=\"https:\/\/amycastor.com\/2023\/08\/15\/crypto-collapse-sam-bankman-fried-goes-to-jail-sec-appeals-ripple-ruling-prime-trust-bankrupt-the-tangled-tale-of-trueusd-and-tron\/\">hunger for eyeballs<\/a>. He comes on around 8:30 for literally two sentences. But he did supply a pile of the background and gets a credit, so that\u2019s fine! [<a href=\"https:\/\/www.aljazeera.com\/podcasts\/2024\/3\/13\/the-take-why-are-millions-scanning-their-eyes-for-worldcoin\"><i>Al Jazeera<\/i><\/a>]<\/p>\n<p>Amy and David both went on the BBC to talk about Sam Bankman-Fried\u2019s sentencing, but BBC News doesn\u2019t put clips up. David\u2019s clip on CGTN, six minutes after the sentence dropped, is available. You can tell they had to throw away the question list at the last second. [<a href=\"https:\/\/www.youtube.com\/watch?v=r63lFi5dhzM\"><i>YouTube<\/i><\/a>]<\/p>\n<br><br><div align=\"center\"><p><a href=\"https:\/\/www.patreon.com\/bePatron?u=8420236\"><img src=\"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/10\/become_a_patron_button.svg\" alt=\"Become a Patron!\" title=\"Become a Patron!\" width=217 height=51><\/a><br><p style=\"align:center;\" class=\"patreon-badge\"><i>Your subscriptions keep this site going. <a href=\"https:\/\/www.patreon.com\/bePatron?u=8420236\">Sign up today!<\/a><\/i><\/p><\/div>","protected":false},"excerpt":{"rendered":"<p>We are all Satoshi. Not you, Craig.<\/p>\n","protected":false},"author":1,"featured_media":26545,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[3515,2653,612,3756,21,2247,783,74,1795,3757,747,1777,3755,167,2646,146,3440,2104,493,2949,1047,82,3758,166,1515,1798,3760,3093,652,2890,280,2733,3754,3761,674,751,1154,1328,3763,1717,1451,594,3759,2246,312,137,2491,170,3762,33,875,2946,39,457,1556],"class_list":["post-26544","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorised","tag-ai","tag-alameda","tag-andreessen-horowitz","tag-backerkit","tag-bitcoin","tag-bitcoin-fog","tag-blackrock","tag-blockchain","tag-blockfi","tag-brandon-sanderson","tag-calvin-ayre","tag-celo","tag-cephalofair-games","tag-cftc","tag-copa","tag-craig-wright","tag-custodia","tag-dan-davies","tag-dave-kleiman","tag-do-kwon","tag-etf","tag-ethereum","tag-everette-taylor","tag-fca","tag-federal-reserve","tag-ftx","tag-garantex","tag-gbtc","tag-gemini","tag-genesis","tag-hong-kong","tag-ilya-lichtenstein","tag-isaac-childres","tag-jonathan-hough","tag-justice-department","tag-kickstarter","tag-kucoin","tag-libra","tag-matthew-ledvina","tag-mining","tag-morgan-beller","tag-new-york","tag-northern-data","tag-roman-sterlingov","tag-rory-cellan-jones","tag-russia","tag-sam-bankman-fried","tag-satoshi-nakamoto","tag-scott-skavdahl","tag-sec","tag-shapeshift","tag-terra","tag-tether","tag-united-kingdom","tag-wyoming"],"jetpack_featured_media_url":"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2024\/04\/craig-wright-harry-potter-header.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/26544","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/comments?post=26544"}],"version-history":[{"count":22,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/26544\/revisions"}],"predecessor-version":[{"id":26567,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/26544\/revisions\/26567"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media\/26545"}],"wp:attachment":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media?parent=26544"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/categories?post=26544"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/tags?post=26544"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}