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It has been another wild week in crypto marked by significant developments, most notably the trial of Sam Bankman-Fried. The former FTX boss’s trial concluded with a guilty verdict on all counts, a conviction that carries the possibility of a lengthy prison sentence.
However, that was not all. The Securities and Exchange Commission (SEC) was also on a spree as it announced charges against SafeMoon and its executive team for fraud and unregistered offering of crypto securities while launching a probe into PayPal’s stablecoin.
Here’s a list of this week’s outstanding crypto stories.
Bankman-Fried Convicted of Seven Criminal Fraud Counts
A jury found Bankman-Fried guilty of all criminal counts against him after the crypto boss’s monthlong trial wrapped up on Thursday. The FTX founder, convicted of seven counts of fraud, conspiracy, and money laundering, faces a maximum sentence of 115 years in prison.
Sam Bankman-Fried was found guilty on all seven criminal fraud counts (Crypto.News)
SBF’s Testimony Does Not Go as Planned!
Bankman-Fried’s decision to testify in his own defense during his trial backfired as the prosecution’s relentless cross-examination exposed numerous contradictions between his public statements and his private actions. The prosecution used these contradictions to strengthen their case, alleging that Bankman-Fried orchestrated a massive financial fraud.
Sam Bankman-Fried took a significant risk by testifying in his own trial. It did not go well (NPR)
U.K. Government Unveils Final Crypto Regulations
The U.K. government has released its final regulations for the crypto ecosystem, outlining a phased approach to implementing comprehensive oversight. The first phase will focus on introducing legislation for fiat-backed stablecoins, scheduled for early next year.
U.K. Publishes Final Proposals for Crypto, Stablecoin Regulation (CoinDesk)
Digital Asset Investment Funds Witness Record Inflows Amid Optimism for Bitcoin ETF Approval
Digital asset investment funds experienced a significant net inflow of $326 million last week, marking the most significant weekly inflow since July 2022. The surge in investor interest can be attributed to the growing optimism surrounding the potential approval of a spot-based Bitcoin exchange-traded fund (ETF) by the SEC.
Digital Asset Investment Products Register Record $326M in Inflows, Led by Bitcoin and Solana (Cryptonews.com)
The CFTC has received a record-breaking number of whistleblower tips this year, with a significant portion of them being related to the crypto industry. The federal agency has already paid out $16 million in incentives to whistleblowers in 2023. The 1,530 tips received this year represent the highest number reported in any given year.
The CFTC just received the most whistleblower tips ever. Most were crypto-related (Fortune)
SafeMoon Founder and Executives Charged with Fraud by SEC
The founder and two top executives of SafeMoon, a cryptocurrency token that reached a valuation of over $8 billion, are facing charges filed by the SEC. The indictment accuses founder Kyle Nagy, Chief Executive Braden John Karony, and former Chief Technology Officer Thomas Smith of conspiring to commit securities fraud, wire fraud, and money laundering.
SEC Charges Crypto Company SafeMoon and its Executive Team for Fraud and Unregistered Offering of Crypto Securities (SEC)
PayPal Subpoenaed by SEC Over Dollar-Linked Stablecoin Project
PayPal has received a subpoena from the SEC’s division of enforcement concerning its involvement in a dollar-linked stablecoin project. According to a regulatory filing, the subpoena requested PayPal to provide documents related to the project. The company has stated its cooperation with the investigation in the filing.
PayPal Receives SEC Subpoena Focused on Stablecoin Work (Bloomberg)
Crypto Market Remains Resilient Despite FTX Delimma
Dubbed ‘Uptober,’ October witnessed a 26% increase in Bitcoin’s price, accompanied by other altcoins also benefiting from the positive market sentiment. Ether, the second largest cryptocurrency, saw a monthly increase of 6.8%. The rally came despite the negative spotlight on crypto during the Bankman-Fried trial, which exposed some concerning aspects of the crypto industry.
SBF trial drama fails to dampen Bitcoin’s meteoric October (Forkast)
Turkey Aims to Revise Crypto-Asset Legislation to Exit FATF’s Grey List
Turkey is taking steps to introduce new legislation regarding crypto-assets in an effort to convince the Financial Action Task Force (FATF) to remove it from the “grey list” of countries that have been deemed insufficient in combating money laundering and terrorist financing. In 2021, the FATF downgraded Turkey to the grey list.
Turkey to toughen law on crypto assets – minister (Reuters)
Spain Accelerates Implementation of European Cryptoasset Regulation
The government of Spain has announced plans to expedite the implementation of the European regulation on the cryptoassets market (MiCA) by six months.
Spain brings forward the implementation of the world’s first crypto-assets market regulation (La Moncloa)
SEC Chair Gary Gensler Reflects on Bitcoin Whitepaper Anniversary
SEC Chair Gary Gensler commemorated the 15th anniversary of the Bitcoin whitepaper with a reflective and slightly humorous tweet. “If Satoshi Nakamoto went as Satoshi Nakamoto for Halloween, would we be able to tell? Happy 15th anniversary to Satoshi’s famous white paper that started crypto,” the SEC boss wrote.
Gary Gensler Posts Halloween-Tinged Wishes for Bitcoin White Paper Anniversary (The Defiant)
— RYAN SΞAN ADAMS – rsa.eth 🦄 (@RyanSAdams) October 31, 2023
The Bottom Line
While Bankman-Fried’s trial continued to attract massive attention, the indictments against SafeMoon also show that crypto is not immune from the courts when allegations of bad actors arise.
For one, there has been an increased call for crypto regulation, as evident from recent efforts by the U.K., Spain, and Turkey to bring crypto under regulatory oversight.
