Hi guys, Welcome to this week’s edition of our newsletter. As we’ve now come to the end of Q1 2023, it’s only right that we start with a snapshot of quarterly performance of the top ranking cryptocurrencies.
But before we get to that, here’s a list of the juicy headlines that ran the trends tables this week!.
It’ll be a long read, but seat tight.
With 70% year to date growth, Bitcoin has emerged as the best performing asset class in global finance. Outperforming the S&P 500 (7%) by a whopping 63% gap. Ethereum came in 2nd with 49% as the pioneer smart contract platform edges closer to the anticipated Shanghai Network Upgrade.
Also notably, as shown in the chart above, the stablecoin wars really heated up in Q1 with $USDT gaining market share while Circle got embroiled in the recent US banking crisis and this saw $USDC experience its largest de-peg to date. It’s no surprise that USDC has lost 26% market share.
On 24th of March South Korea police officially confirmed that Do Kwon, the fugitive founder and brain behind the $40bn (£32.5bn) collapse of the terraUSD and Luna tokens, has been arrested in Montenegro.
Before his recent arrest in Montenegro, Do Know was already a man of interest in 2 countries. South Korea and the United States.
Earlier this year, US prosecutors charged Mr Kwon and his company Terraform Labs in a lawsuit for “orchestrating a multi-billion dollar crypto asset securities fraud”. But prior to that, South Korean authorities issued a warrant for the arrest of Mr Kwon last September as they believed Terraform Labs had violated capital market rules.
News of his arrest was first shared on Twitter by Montenegro’s interior minister Filip Adzic, who said in a tweet that “one of the world’s most wanted fugitives” had been detained at the Podgorica airport.
Mr Adzic added that the suspect was allegedly traveling with fake documents issued under a false name. Authorities had to wait for official confirmation of the man’s identity, before any further communication, he said.
South Korea police later confirmed that the suspect in Montenegro was indeed Mr Kwon, after fingerprints sent from Montenegro matched his official records.
Do Kwon, a South Korean citizen now appears to face charges of forgery in Montenegro. Although the two nations do not have an extradition treaty, South Korea has since sent officials to Belgrade to negotiate for him to be transferred to the Asian country to face charges.
However, according to Montenegro’s criminal code, falsifying personal identification documents is punishable by up to five years in prison. And if convicted, it is expected that Do Kwon can only be extradited after having served the prison sentence.
Mr Kwon has separately been charged with fraud by US prosecutors. He faces charges of securities fraud, wire fraud, commodities fraud and conspiracy, according to an indictment made public at the US District Court in Manhattan.
Globally, investors in TerraLuna and the UST stablecoin lost an estimated $42bn, according to blockchain analytics firm Elliptic.
Mr Kwon has previously claimed that he was not in hiding, yet never revealed his location. It remains to be seen how the case will play out in the coming months.
Ripple’s native cryptocurrency XRP is soaring amid anticipation that it will be victorious in its infamous lawsuit against the SEC.
Back in December 2020, the U.S. Securities and Exchange Commission (SEC) had filed a lawsuit against Ripple Labs, Inc. and two of its top executives. In the suit, the US prosecutors alleged that Ripple violated federal securities laws. The SEC claims that Ripple, the parent company behind the XRP ledger blockchain network conducted an unregistered securities offering of $1.3 billion in XRP tokens in 2013 ICO.
According to the SEC, XRP, the native coin of Ripple’s XRP Ledger blockchain, is classified as a security under the Howey test —a legal concept used by the SEC to determine whether a transaction constitutes an investment contract or not.
Ripple has strongly disputed all of the SEC’s allegations, arguing that XRP is not a security and that the SEC has overstepped its legal regulatory authority.
In the latest development on March 21 2023, Ripple (XRP) recorded a 27% price surge. The price increase was largely attributed to buy pressure among investors who were front-running a potential victory in the Ripple vs. SEC case.
XRP price jumped as Ripple published a notice that cited a recent US Supreme court ruling concerning Binance.US’ bid to purchase collapsed crypto lender Voyager Digital. The judge had summarily rejected the SEC’s claims to label Voyager’s VGX token a ‘security’ and BinanceUS, an unregistered securities exchange.
XRP executives, and legal team anticipate the ruling in the Binance case to set a favorable precedent for their own on-going case. And going by the recent surge in the price of XRP, the crypto community thinks so too.
The Ripple vs. the SEC case is still ongoing, and its resolution could have a far-reaching impact on the broader cryptocurrency industry.
According to court documents filed on March 31, the US government has kicked off plans to sell 41,000 Bitcoin seized in a 2012 case connected to a darknet website called ‘Silk Road’ and its creator Ross Ulbricht.
In 2015, Ross Ulbricth was sentenced to life imprisonment without the possibility of parole for creating and operating the darknet market website Silk Road from 2011 until his arrest in 2013. The site operated as a hidden service on the Tor network and facilitated the sale of narcotics and other illegal products and service through the use of cryptocurrencies, mainly Bitcoin.
The haul of BTC being auctioned off by US authorities was recovered from a man called James Zhong who managed to steal the keys off the Silk Road platform, prior to its shutdown.
The crypto stash was seized in November 2021 from the home of James Zhong — and at the time, he had hidden the Bitcoin in an underground safe in a single-board computer which was concealed under blankets in a popcorn tin.
Mr Zhog was charged last November and has since pleaded guilty to one count of wire fraud. The haul of 50,000 BTC worth around $3.4 billion at the time of seizure, was the U.S. Department of Justice’s second-largest seizure ever.
According to the March 31 filing, officials have already sold roughly 9,861 BTC. This leaves roughly 41,491 BTC remaining in custody of prosecutors.
BTC retraced nearly 7% when the government sold the first tranche of 9,861 BTC for $215.7 million on March 14, 2023. This has sparked concerns across the cryptosphere.
“The Government understands that the seized Bitcoin is expected to be liquidated in four more batches over the course of this calendar year,” said the court filing.
“The Government understands from IRS Criminal Investigation – Asset Recovery & Investigative Services that the second round of liquidation will not be sold prior to Zhong’s sentencing date.”
Market analysts anticipate that if the liquidation of huge volumes of BTC could destabilize the market, albeit, momentarily,
Crypto Experts and Influencers Express Worry as US Senate Conducts Hearing about a Possible TikTok ban
Crypto stakeholders including experts, CEOs and popular YouTubers have taken to the internet to express concerns that ongoing TikTok ban hearing is not really about TikTok, and could be used to go after the crypto industry itself.
On March 23, the world watched as United States lawmakers grilled and questioned TikTok CEO Shou Chew, at a House Energy and Commerce Committee hearing in Washington DC. During the hearing, lawmakers questioned the CEO over suspicions that the Chinese government is unlawfully gathering user data through the app.
Intense exchanges have ensued has clips from the hearing went viral online, with many believing that a ban may be imminent as typified in the Restricting the Emergence of Security Threats that Risk Information and Communications Technology (RESTRICT) Act recently introduced by the US Senate.
While the TIKTOK is not a crypto-native app, a ban on TikTok may have several implications for the crypto space.
First, the social media platform is actively used by many crypto community members to access and distribute crypto-related content.
U.S.-based crypto think tank “Coin Center” believes that the RESTRICT act has a similar precept to the International Emergency Economic Powers Act, which allowed the Treasury’s Office of Foreign Assets Control (OFAC) to prohibit U.S. citizens from transacting with sanctioned entities.
This may mean that influencers and crypto companies based in the US will be effectively banned from advertising on Tiktok or generating revenue from the platform.
But many analysts think that the implication could even be grimmer. Some think it could be used to regulate the freedom of writing and distribution of software code, which is currently guaranteed by the First Amendment.
According to reports on March 27, lawmakers have hinted at moving forward with the bill. This follows the grilling of TikTok CEO Shou Zi Chew last week.
House of Representatives speaker Kevin McCarthy said that the House would be moving forward with the bill because “TikTok can’t be honest.”
He believes that the Chinese government has access to TikTok user data. And with the social media platform having an estimated 150 million users in the United States. McCarthy wants to “protect Americans from the technological tentacles of the Chinese Communist Party.”
Meanwhile, Congresswoman Alexandria Ocasio-Cortez took to TikTok to speak on the need for nationwide data and privacy protection policies. She opined that the core of the issue is not TikTok but social media companies collecting “troves of deeply personal data” from users.
AOC Speaks Out on Potential TikTok Ban in Her First Post on the App
If passed, the new legislation will grant the U.S. government sweeping powers to crack down on any technologies and services it sees as a threat. Remarkably, tha may include VPN technology.
However, those opposing the bill say it will give the state the power to police the entire internet and any platforms on it. Some have even referred to it as the “Chinafication of America” —in reference to China, which currently has some of the world’s harshest internet censorship.
| Name (Ticker) | Price ($) | 7-day Drop (-%) | Market Cap |
|---|---|---|---|
| Celer Network (CELR) | $0.02249 | -18.62% | $159,348,625 |
| Nexo (NEXO) | $0.67090 | -9.66% | $375,702,808 |
| Alethea Liquid Intelligence (ALI) | $0.03494 | -9.28% | $125,378,548 |
| HEX (HEX) | $0.07938 | -5.35% | $13,764,584,580 |
| Stacks (STX) | $5.17592 | -3.7% | $1,227,977,656 |
| Name (Ticker) | Price ($) | 7-day Drop (-%) | Market Cap |
|---|---|---|---|
| Celer Network (CELR) | $0.02249 | -18.62% | $159,348,625 |
| Nexo (NEXO) | $0.67090 | -9.66% | $375,702,808 |
| Alethea Liquid Intelligence (ALI) | $0.03494 | -9.28% | $125,378,548 |
| HEX (HEX) | $0.07938 | -5.35% | $13,764,584,580 |
| Stacks (STX) | $5.17592 | -3.7% | $1,227,977,656 |
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Here’s where we’ll leave it at for this week. Catch up with us again next week. We might even have a few surprises, who knows?
Don’t miss it!
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