Tax season is here again but it doesn’t have to be a nightmare. Sort out your crypto taxes with Crypto Tax Calculator, a software supporting 300,000+ currencies across various L1s and L2s.
Dear Bankless Nation,
The post-FTX uneasiness seems to be wearing off and regulatory bodies are taking advantage of the calm moment to serve a litany of charges against controversial figures in the crypto world.
The SEC’s Hester Pierce gave a rousing speech on digital assets that gave many crypto supporters a glimmer of regulatory hope.
For our weekly recap, we dig into:
-
The SEC Gets Busy
-
Crypto Keeps Pumping
-
NFT Hacks and Migrations
-
DeFi Developments
-
A Busy Week for Ethereum
– Bankless Team
📅 Weekly Recap
Here’s a recap of the biggest crypto news from the final week of January.
1. The SEC Gets Busy
The SEC has their hands full this week. First, they’re charging ex-FTX lieutenants Caroline Ellison and Gary Wang for “their roles in a multiyear scheme to defraud equity investors in FTX”.
Ellison allegedly manipulated FTT’s price between 2019 to 2022 (at SBF’s direction) by buying large quantities to pump its price, then used it to mislead investors as overstated collateral for undisclosed loans in its sister hedge fund Alameda.
The SEC also claims that Ellison and Wang “created FTX’s software code that allowed Alameda to divert FTX customer funds, and used misappropriated FTX customer funds for Alameda’s trading activity”. (Press release here)
Next, the SEC is charging Avraham Eisenberg for market manipulation of the MNGO token on the Solana-based Mango Markets protocol. Eisenberg was arrested in Puerto Rico and currently awaits criminal charges in federal prison. (Press release here).
The SEC also fined Nexo $45M last week for failure to register its lending product, leading Nexo to announce its departure from American markets.
Finally, don’t miss out on SEC Commissioner Hester Pierce’s speech on digital assets. Some excerpts:
Crypto’s value proposition depends primarily on the builders of this technology, not on regulators like me, who lack technical expertise and stand on the periphery looking in.
Regulatory solutions, which tend to be inflexible, should be a last resort, not a first resort.
Privately designed and voluntarily implemented solutions are much better at fixing things than regulators using their inherently coercive power to impose mandatory solutions.
2. Crypto Keeps Pumping
As inflation subsides, numbers are going up in crypto markets. Genesis filed Chapter 11 bankruptcy and crypto prices still didn’t budge.
We’re not the only ones wondering… is the bottom finally in?
BTC and ETH continues to climb to $23,040 and $1,580 in the past week.
Fantom (FTM) is up 52%, ApeCoin (APE) 29% and Optimism (OP) 22.6%. Taking the largest gains is Aptos – up 126% to $17.84. Is Aptos overvalued? More on this in the Bankless newsletter next week 😉
3. NFT Hacks and Migrations
This week in NFT land, PROOF Collective CEO and Moonbirds creator Kevin Rose fell prey to a phishing attack that saw his wallet get drained for ~684 ETH ($1.09M) worth of NFTs. The stolen NFTs include 25 Chromie Squiggles, an Autoglyph, a Cool Cat, a QQL Mint Pass, several OnChain Monkeys and many more. Oof.
How the hack happened: Rose signed a malicious signature on the Seaport tool that lets users trade NFTs in bulk. You can listen to the full Twitter Space here.
<div class="tweet" data-attrs="{"url":"https://twitter.com/divergencearran/status/1618359162551009281?s=20&t=1nELI0ThrTI3ZUZMDOWj9A","full_text":"0/ Earlier this evening @kevinrose was phished into signing a malicious signature that allowed the hacker to transfer a large number of high-value tokens. Here is a breakdown of what happened, our immediate response, and our ongoing efforts…","username":"divergencearran","name":"Arran","date":"Wed Jan 25 21:24:26 +0000 2023","photos":[],"quoted_tweet":{},"retweet_count":198,"like_count":733,"expanded_url":{},"video_url":null,"belowTheFold":true}”>
Moral of the story: unless you’re a tech wizard, you’ll likely not know if what you’re signing is malicious. The answer is wallet segregation – move your overpriced JPEGs to a siloed vault for safekeeping and only move them out to a separate wallet for approvals to trade when you need to.
Elsewhere, a legal clause that Yuga Labs snuck into its new Dookey Dash game is coming to light. Minters of the Sewer Pass NFT needed to play Dookey Dash are implicitly agreeing in the T&C not to sue Yuga or participate in any class action lawsuit (Yuga was sued in December).
<div class="tweet" data-attrs="{"url":"https://twitter.com/flyabstractart/status/1616179578224926721","full_text":"The @BoredApeYC set a huge legal precedent yesterday for the whole #NFT space \n\nBut most of you are only excited to get that dookey \n\nIf you have a pass you agreed to this \n\n🥂 apes #BAYC #SEWERPASS ","username":"flyabstractart","name":"flyabstractart W3BSTOCK 🌴🎹💎🎹🌴","date":"Thu Jan 19 21:03:33 +0000 2023","photos":[{"img_url":"https://pbs.substack.com/media/Fm3Swn1WQB0U3WF.jpg","link_url":"https://t.co/rvqq3mXKrg","alt_text":null}],"quoted_tweet":{},"retweet_count":2,"like_count":12,"expanded_url":{},"video_url":null,"belowTheFold":true}”>
But most of you are only excited to get that dookey
If you have a pass you agreed to this
🥂 apes #BAYC #SEWERPASS