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Block 1: Essential news
- Spot Bitcoin ETF race continues in the US
Fidelity Investments and Ark Invest are vying for SEC approval for their own Bitcoin Spot ETF. Fidelity, already invested in cryptocurrencies since 2018, is entering the race again after a first refusal in 2022. Ark Invest, headed by Cathie Wood, is expecting a response to its application in August, putting it in the lead for the time being. This competition illustrates Wall Street's growing interest in recent weeks in obtaining the first Bitcoin Spot ETF .
- MicroStrategy continues to accumulate bitcoins
Between April 2023 and today, MicroStrategy has acquired over 12,000 bitcoins for a total in excess of $347 million, bringing their balance sheet to over 152,000 BTC. This represents more than 0.7% of total bitcoins in circulation. This testifies to the company's absolute confidence in the future evolution of bitcoin.
- End of collaboration between Paysafe and Binance.
Binance has announced that its partner, Paysafe, will end its collaboration for SEPA transfers in euros from September 25. This won't affect users of the cryptocurrency platform much, however, as withdrawal services will remain functional. Users will need to use new bank account details to make euro deposits after this date. Binance has not specified the reasons for ending the partnership with Paysafe or named a possible new partner.
- Mastercard presents the Multi-Token Network
Mastercard has unveiled its Mastercard Multi-Token Network (MTN) project, a hub dedicated to the creation of financial services on blockchain, aiming to facilitate interoperability between different blockchains. The platform is based on Mastercard Crypto Credential standards and will enable services to communicate between different blockchains. Mastercard plans to beta test the solution in the UK, focusing on tokenized bank deposits. The MTN project is one of Mastercard's most ambitious efforts in the field of digital assets.
- SAP works on cross-border stablecoin payments
SAP, the enterprise software giant, is developing software to facilitate cross-border payments in stablecoins. The software, called "SAP Digital Currency Hub", will be integrated into SAP's suite of ERP systems, providing a blockchain interface while accounting for transactions in the financial balance sheet. The stablecoins used will be Circle's USDC and EUROC. Currently in the test phase, the solution will allow companies to run free trials with fictitious values on a testnet before the full rollout, the date of which has not yet been announced.
Block 2: Crypto Analysis of the week
The restructuring team led by John J. Ray III has published a damning report on now-defunct cryptocurrency platform FTX and its sister company, Alameda Research. The document paints a stark picture of wide-ranging illicit activity and claims that FTX's top brass, including co-founder and CEO Sam Bankman-Fried, were aware of the disappearance of customer funds since August 2022.
The report details financial flows between companies controlled by Bankman-Fried's close associates, revealing a labyrinthine fraud network. In particular, it asserts that Bankman-Fried himself played a decisive role in this large-scale scam.
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A word of caution before going any further: these revelations are based on allegations made by FTX's liquidators, and will be subject to further verification in the impending criminal trial against Bankman-Fried, scheduled for October.
The report dissects questionable financial transactions, such as the $20 million in FTX customer funds that were diverted to "Guarding Against Pandemics (GAP)" a so-called non-profit organization run by Bankman-Fried's brother, Gabe. This allegation, if true, could reinforce suspicions that the Bankman-Fried family is involved in the reported fraudulent activities.
The report also describes operations that look more like smokescreens designed to conceal the misuse of client funds, than genuine transactions. Under the guise of "venture investments", the report reveals that $450 million of FTX customer funds were channeled to a company called Modulo Capital, a firm founded by Bankman-Fried close associates Duncan Rheingans-Yoo and Xiaoyun "Lilly" Zhang.
The debtors' report also mentions the granting of substantial personal loans to FTX executives, apparently earmarked for illegal political donations. The document states that these were not real loans, but financial mechanisms designed to promote fraudulent activities. IL FTX executives were already aware, in August 2022, of a deficit of over $8 billion in customer funds. This deficit was cleverly concealed under a fictitious account designated as belonging to "our Korean friend".
Further damning evidence is an agreement, physically signed by Bankman-Fried, which was designed to conceal the illegal flow of FTX customer funds through Alameda Research accounts. This document, falsely dated June 1, 2019, would be potentially catastrophic for Bankman-Fried's defense at his criminal trial, as it testifies to his active participation in the fraud and its concealment.
Ultimately, these revelations suggest an even bleaker outlook for Bankman-Fried's legal position. As his trial approaches in October, it appears that Bankman-Fried is now in a very poor position to defend himself.
Block 3: Gainers & Losers
Block 4: Readings of the week
Prepare for the battle of the metaverse (Wired)
There will never be another Second Life (The Atlantic)
Welsh mining towns had alternative currencies 200 years ago - here's what the crypto world could learn (The Conversation)
Big winners from the Bitcoin boom; FTX's messy Web (The Information)
