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Top Stories of The Week
Partner of ex-FTX exec hit with campaign finance charges
United States authorities have charged Michelle Bond, the partner of former FTX Digital Markets co-CEO Ryan Salame, with violations of campaign finance law.
In an indictment unsealed on Aug. 22 in the U.S. District Court for the Southern District of New York, U.S. Attorney Damian Williams alleged Bond and an unnamed co-conspirator illegally funded her run for the U.S. House of Representatives in 2022. Prosecutors charged Bond with conspiracy to cause unlawful campaign contributions, causing and accepting excessive campaign contributions, causing and receiving an unlawful corporate contribution, and causing and receiving a conduit contribution.
The unnamed co-conspirator — Bond’s “romantic partner” and a “high-level executive at a now-defunct cryptocurrency exchange,” likely referring to Salame — allegedly arranged a $400,000 payment from the firm to Bond. Prosecutors alleged she made false statements to the Federal Election Commission and a congressional committee to conceal her and her co-conspirator’s conduct.
McDonald’s Instagram hackers make $700K shilling Grimace memecoin
Scammers who hacked the official McDonald’s Instagram page on Aug. 21 made off with over $700,000 in Solana after using the fast food giant’s social media page to promote and rug-pull a memecoin called “GRIMACE.”
According to screenshots shared on X, the McDonald’s Instagram page made a series of posts promoting a sham token based on the fast food chain’s purple mascot, Grimace.
Several posts described the sham memecoin as a “McDonald’s experiment on Solana,” which was blasted to its 5.1 million followers around the world.
According to data from blockchain analytics service Bubblemaps, the hacker first used Solana memecoin deployer pump.fun to snap up 75% of the total circulating supply of the Grimace token before splitting it between roughly 100 different wallets.
Following the posts from the official McDonald’s account, the value of the GRIMACE memecoin rallied from a market capitalization of a few thousand dollars to as high as $25 million within 30 minutes, per Dex Screener data. The token’s price then plummeted as the hacker dumped their holdings, and within 40 minutes, the value of the memecoin slumped as low as $650,000.
CZ and Binance face new lawsuit for alleged laundering of stolen crypto
Binance and its former CEO, Changpeng “CZ” Zhao, are facing a new class action lawsuit from three crypto investors who say they couldn’t recover their stolen assets because the exchange failed to prevent money laundering.
In an Aug. 16 class action suit filed in the United States District Court for the Western District of Washington, Seattle, the plaintiffs allege their crypto was stolen, and those funds were sent to Binance by the thieves to “remove the connection between the ledger and their digital assets,” making them untraceable. The plaintiffs argued that a key attribute of crypto transactions is “a permanent record of those transactions” on the blockchain, which makes them “permanently and accurately traceable.”
“Therefore, without a place to launder crypto, such as Binance.com, if a bad actor steals someone else’s crypto, there is a risk the authorities would eventually track them down by retracing their steps on the blockchain,” the class action suit alleges.
The plaintiffs say Binance was an essential part of the money laundering process, which violates the Racketeer Influenced and Corrupt Organizations Act.
RFK Jr says he is suspending, not terminating, presidential campaign
Speaking in a live-streamed event from Phoenix on Aug. 23, Kennedy said he was “simply suspending,” but not ending, his campaign for the U.S. presidency in 2024. RFK Jr. said his name would “remain on the ballot in most states,” but he would remove himself in 10 background states to avoid being a “spoiler” for either Democrat Kamala Harris or Republican Donald Trump.
“In an honest system, I believe I would have won the election,” said Kennedy. “In my heart, I no longer believe that I have a realistic path to electoral victory in the face of this relentless, systematic censorship and media control, so I cannot in good conscience ask my staff and volunteers to keep working.”
Independent United States presidential candidate Robert F. Kennedy Jr., also known as RFK Jr., announced he was not dropping out of the 2024 race, heavily criticising the Democratic Party and media outlets.
Court denies Kraken’s motion to dismiss SEC lawsuit
A United States federal court denied crypto exchange Kraken’s motion to dismiss a U.S. Securities and Exchange Commission (SEC) lawsuit alleging that Kraken is operating an unregistered securities exchange, according to an Aug. 23 court filing.
In November, the SEC charged Kraken with “operating [a] crypto trading platform as an unregistered securities exchange, broker, dealer, and clearing agency.”
“The SEC has plausibly alleged that at least some of the cryptocurrency transactions that Kraken facilitates on its network constitute investment contracts, and therefore securities, and are accordingly subject to securities laws,” according to the opinion of the U.S. District Court in Northern California.
The ruling is a setback in the industry’s ongoing tussle with the SEC to define which cryptocurrencies, if any, qualify as “securities” under U.S. law and, therefore, fall under the SEC’s jurisdiction.
“Once again, a court confirmed that the framework used to identify securities for nearly 80 years still applies, regardless of the labels used,” an SEC spokesperson said in a statement. “Investors in crypto assets offered or sold as securities should get the same protections as investors in other securities, even when they are traded using intermediaries.”
Crypto trading platforms should register with the SEC and “ensure they have safeguards against fraud and manipulation, the commingling of customer assets, and conflicts of interests. Until they do so, investors will continue to get hurt,” the spokesperson said.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $64,714, Ether (ETH) at $2,791 and XRP at $0.61. The total market cap is at $2.27 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Popcat (SOL) (POPCAT) at 71.30%, Artificial Superintelligence Alliance (FET) at 44.64% and Klaytn (KLAY) at 39.01%.
The top three altcoin losers of the week are Helium (HNT) at 3.06%, Zcash (ZEC) at 1.47% and Litecoin (LTC) at +0.65%. For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Most Memorable Quotations
“In the last Bitcoin halving cycle, the bull rally began in Q4. Whales won’t let Q4 be boring with a flat YoY performance.”
Ki Young Ju, co-founder and CEO of CryptoQuant
“LLMs should have crypto wallets. Let’s help AI agents get work done (on your behalf) and participate in the economy.”
Brian Armstrong, CEO of Coinbase
“I think it all comes down to the one thing that no other blockchain ecosystem could offer to builders: the 950 million users of Telegram that TON is converting.”
Tim Wong, chairman of the Catizen Foundation
“Technical indicators are improving, and with some traders holding short positions, there’s potential for a short squeeze.”
Markus Thielen, CEO of 10x Research
“Ask yourself if you really know what you are investing in. Scammers can create fake news and reviews to make an investment seem legitimate.”
Australian Securities and Investments Commission, Australian securities regulator
“This acquisition allows us to serve European investors, to offer clients global insight, and to expand the product suite with innovative ETPs.”
Hunter Horsley, CEO of Bitwise Asset Management
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Prediction of The Week
Bitcoin must ‘clear resistance’ at $62K to avoid another ‘Black Monday’
Bitcoin is at a critical tipping point: It needs to hit $62,000 and stay there to avoid a retest of $49,000, according to an analyst note from one crypto exchange. However, several crypto traders believe Bitcoin is unlikely to drop below $50,000 anytime soon.
“The price action suggests a corrective pattern rather than a strong bullish reversal,” Kraken stated in an Aug. 21 technical market update viewed by Cointelegraph.
At the time of publication, Bitcoin is trading at $60,691, having not reached $62,000 since
Aug. 9, according to CoinMarketCap data.
The market update further explained that Bitcoin is trading near its 200-day exponential moving average of $59,500, which gives more weight to the most recent price data.
To avoid retesting $49,000, Bitcoin needs to “clear resistance” at $62,000, said Kraken.
Bitcoin last fell below $50,000 to $49,842 on Aug. 5, which is referred to as “Crypto Black Monday,” marking its first visit to that level since February.
A move to $62,000 would be an unexpected move for a large number of future traders, wiping out $1.04 billion in short positions, according to CoinGlass data.
FUD of The Week
SEC opposes Richard Heart’s bid to dismiss $1B securities lawsuit
The U.S. Securities and Exchange Commission (SEC) has pushed back on Hex (HEX) founder Richard Heart’s bid to toss its $1 billion securities suit, arguing it has the full authority to bring the case to Heart.
“In his Motion asking the Court to dismiss all the claims against him, Heart disregards the well-pleaded allegations of the Complaint and the applicable law,” the SEC said in its opposing argument, filed in a New York federal court on Aug. 22, but dated July 8.
In a dismissal motion filed on Aug. 22 that was shared with the SEC on April 8, Heart — real name Richard Schueler — claimed the regulator has no sway over him as he “lives abroad and is not alleged to have set foot in the United States during the relevant period.”
It added that the SEC didn’t allege Heart “engaged in any conduct” directed at the U.S. and didn’t claim any U.S.-based “entities, employees, contracts, payment accounts, marketing efforts, or travel associated with Mr. Heart.”
The SEC hit back, claiming he “directed many of his promotional efforts specifically toward investors in the United States” as Heart twice appeared virtually before a Las Vegas conference in March and September 2022 to promote HEX, Pulsechain and PulseX — which it claims are unregistered securities.
Nearly 80% of hacked cryptocurrencies never recover in price — Immunefi
The majority of hacked cryptocurrencies are unable to recover from the exploit in terms of pricing, according to the latest onchain security report.
Over 77.8% of hacked cryptocurrencies suffered sustained negative price impact six months after the hack. Moreover, 51.1% of hacked tokens saw over 50% price declines six months after the protocol was hacked, according to an Immunefi report shared with Cointelegraph.
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However, hacked protocols sustain most of the damage after the hack, according to Mitchell Amador, the founder and CEO of Immunefi. He told Cointelegraph:
“The millions lost to the hack immediately anticipate even larger losses, caused by market impact and dependency impact, alongside many months of lost time spent rebuilding your emotionally shattered team and operations.”
Spot Ethereum ETFs record longest outflow streak amid drying investments
United States-based spot Ether exchange-traded funds (ETFs) have recorded five straight days of outflows, their longest period of continuous outflows since they launched on July 23, losing $92.2 million in five days from Aug. 15–21.
Most of the investments made by the recently approved nine spot Ether ETFs have been overshadowed by outflows from the Grayscale Ethereum Trust (ETHE), which have exceeded over $2.5 billion as of Aug. 21.
Outflows from ETHE have been daily, except on Aug. 12, when the Grayscale fund reported no net flows, according to Farside Investors data.
During this period, the Grayscale Ethereum Trust (ETHE) reported $158.6 million in outflows. However, comparable inflows from BlackRock’s iShares Ethereum Trust ETF (ETHA), the Fidelity Ethereum Fund (FETH) and Bitwise Ethereum ETF (ETHW) helped reduce the damage.
Top Magazine Stories of The Week
Dorsey’s ‘marketplace of algorithms’ could fix social media… So why hasn’t it?
Censorship isn’t the answer to fake news and toxicity on social media. We need to give users more choice over the content they are forced to consume.
11 critical moments in Ethereum’s history that made it the No.2 blockchain
Nine years after Ethereum launched, we look back on the critical turning points that has seen ETH become the second most popular cryptocurrency.
Bitcoin miners steamrolled after electricity thefts, exchange ‘closure’ scam: Asia Express
Malaysia steamrolls Bitcoin mining rigs, China state firm wants to export its culture as NFTs.
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Cointelegraph Magazine writers and reporters contributed to this article.
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Powers On… Don’t worry, Bitcoin’s adoption will not be stopped
Bitcoin is bigger than the United States and the FED/SEC so stop worrying, its adoption and acceptance will continue.
Bitcoin’s grim close, Tesla’s crypto sell-offs, Ether’s jaw-dropping surge: Hodler’s Digest, April 25–May 1
The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — one week on Cointelegraph in one link!