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IRS Targets Bankrupt FTX with $44 Billion Claims: Crypto Exchange Under Fire

The US Internal Revenue Service (IRS) has submitted claims totaling almost $44 billion against the estate of the now-defunct cryptocurrency exchange FTX and its associated companies.> Bankruptcy documents filed on April 27 and 28 indicate that the IRS presented 45 claims against various FTX entities, including West Realm Shires (FTX.US's legal entity), Ledger Holdings (parent company of LedgerX and LedgerPrime), and Blockfolio, among others.> The most substantial claims involve a $20.4 billion demand against Alameda Research LLC and a $7.9 billion claim against Alameda Research Holdings Inc., as well as two other claims totaling $9.5 billion.> Designated as "Admin Priority" claims, the IRS's demands could potentially take precedence over other creditors' claims in bankruptcy proceedings. Continue here.

Marathon Digital Faces Another SEC Subpoena Over Montana Data Center

Bitcoin mining company Marathon Digital has revealed that it received a second subpoena from the US Securities and Exchange Commission (SEC) concerning its 100-megawatt data center located in Hardin, Montana.> In a quarterly report filed on May 10, Marathon disclosed that the subpoena, issued on April 10, was connected to "transactions with related parties" that took place during the facility's construction in Montana.> The company stated, "We understand that the SEC may be investigating whether or not there may have been any violations of the federal securities law. We are cooperating with the SEC." Details here.

Virtual Protests for Abortion Rights: Amnesty International Partners with Wistaverse

Wistaverse has officially entered The Sandbox open metaverse as the premier global virtual protest platform with tangible impact, beginning with an abortion rights rally organized by Amnesty International from May 11 to 14.> The innovative platform aims to offer a secure, non-violent alternative for those unable to attend real-life protests while fostering universal inclusion and access to events.> The first mass protest, scheduled for May 13th and 14th, will focus on women's rights and abortion and is organized by Amnesty International.> The event will feature prominent activists and celebrities from the movement. Amnesty International aims to use the blockchain environment to reach a new audience, promoting human rights in a more interactive and decentralized fashion. Continue here.

Ethereum Locks Away Billions, Cryptocurrency Enters Uncharted Territory

Ethereum has reached a new milestone with 19,375,242 ETH locked, setting a record for the cryptocurrency, and bringing the total value locked (TVL) to $27.7 billion.> This achievement follows a minor dip due to recent withdrawals and has significant implications for Ethereum and its investors, particularly regarding the potential for continued rapid growth.> The locked ether can be categorized into various segments, such as ether staked on the Beacon chain, ether sent to the Beacon contract but not yet validating, and ether rewarded on the Beacon chain.> Collectively, these categories represent the amount of ETH that is "out of circulation," reducing the total available ETH, which could potentially boost demand and price. Full report here.

Silvergate Capital Announces Major Headcount Reduction Amid Bank Liquidation

Silvergate Capital Corporation has announced that it will begin a series of substantial headcount reductions starting May 12, 2023.Approximately 230 employees will be affected in this first wave of separations.> Further reductions are expected to take place on June 30, August 30, and November 30, 2023, or later.> The decision comes as part of the Company's ongoing efforts to wind down operations and voluntarily liquidate its wholly-owned subsidiary, Silvergate Bank in an orderly manner, complying with applicable regulatory processes.> Following the initial reduction in May, the remaining 80 officers and employees will concentrate on implementing the Bank Liquidation, preserving the residual value of the Company's assets, and addressing pending regulatory and other inquiries and investigations concerning the Company and the Bank. Continue reading.

Do Kwon Faces Montenegro Trial: Bail Proposal Awaits Court Decision

Attorneys representing Terraform Labs founder Do Kwon have suggested supervised bail as an alternative to detention while he faces charges in Montenegro for attempting to travel using counterfeit documents.> Kwon and Terra executive Han Chang-Joon were arrested in March by Montenegrin authorities, who subsequently charged them with document forgery.> Both defendants denied any wrongdoing and presented their defense during a court hearing in Podgorica, Montenegro's capital, on Thursday.> According to a notice from the hearing, the defense lawyers proposed, "Instead of detention, bail and supervision measures be imposed, prohibiting them from leaving the apartment and periodically reporting to a certain state authority." Full report here.

BlockFi: Judge Rules $300M in Custodial Wallets Belong to Clients, BIA Customers Left Empty-handed

BlockFi clients can expect the return of almost $300 million held in custodial wallets, following a decision by New Jersey Judge Michael Kaplan on Thursday, May 11.> He ruled that these assets belong to the customers and not the bankrupt crypto lender's estate.> However, Kaplan denied the repayment of an additional $375 million that clients attempted to withdraw from BlockFi's interest-bearing accounts (BIA) after the company froze funds last year due to the FTX collapse's impact on the crypto sector.> Judge Kaplan stated, "The court finds that all digital assets held by the debtors in custodial omnibus wallets are indeed client property, and not property of the bankruptcy estates, subject, of course, to possible avoidance and clawback rights." Continue reading

IRS Teams Up with Chainalysis to Track Sanctions Evaders Using Cryptocurrency

In a bid to combat sanctions evasion using cryptocurrency, the IRS criminal investigation division has announced its collaboration with blockchain analytics firm Chainalysis and Ukrainian investigators.> The joint effort aims to track Russian individuals who may be using digital assets to conceal their assets following Russia's invasion of Ukraine.> As part of the collaboration, the IRS is sponsoring Ukrainian investigators' access to a specialized tool provided by Chainalysis, which assists in conducting crypto-related investigations.> Additionally, the agency is conducting virtual and in-person training sessions for Ukrainian law enforcement to enhance their skills in tracing blockchain transactions.> Highlighting the significance of information-sharing, Jim Lee, Chief of IRS Criminal Investigation, stated, "Sharing tools not only safeguards the US financial system, but the global economy."Full report here

Paradigm Files Amicus Brief in Support of Coinbase Against SEC: The Fight for Clarity in the Crypto Industry

Leading cryptocurrency investment firm Paradigm has filed an amicus brief in support of Coinbase's ongoing lawsuit against the U.S. Securities and Exchange Commission (SEC).> The lawsuit aims to compel the SEC to respond to Coinbase's rulemaking petition, which seeks practical guidance for the crypto industry.> Paradigm's filing highlights its belief that SEC Chair Gary Gensler's repeated call for crypto projects to register is insincere, as it lacks clear regulatory guidance necessary for compliance.> In the amicus brief, Paradigm argues that the SEC has a legal obligation to provide explicit rules and regulations for the crypto industry, allowing individuals and companies to conform their conduct accordingly. More here.

Bitcoin and Ether Hold Steady Amid Market Uncertainty: Crypto Market Update

Continuing its downward trend from the previous day, Bitcoin, the cryptocurrency market leader, slipped to figures reminiscent of late March, dipping below $27,000.> Bitcoin was trading around $27,052, registering a minor setback of 1.8% over the last day.> The popular digital currency has been fluctuating between $25,000 and $30,000 throughout the season. Market observers anticipate this trend to continue unless a convincing incentive prompts a move upward or downward.> Ether, the runner-up in the crypto market, was trading at approximately $1,800, showing a small decrease of about 1.9% from the same time on the previous day.> Despite the successful implementation of the Ethereum Shanghai upgrade earlier in April a move that transitioned the blockchain from a proof-of-work to a more energy-efficient proof-of-stake protocol Ether's price has mostly stayed within its recent range.> The fever surrounding Pepecoin-inspired memes appears to be cooling down, less than a week after it hit a surprising market cap of $1.8 billion.> According to data from cryptocurrency intelligence company Nansen, by late Thursday morning (ET), "smart money" wallets those crypto accounts owned by individuals or institutions known for their lucrative trades had trimmed their PEPE holdings by $3 million in the last day.Most other leading cryptocurrencies were also experiencing a slight downturn during this period.

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Cryptocurrency roundup for May 12: FTX and Affiliates Face Massive $44 Billion IRS Claims: Unraveling the... - Moneycontrol