Caroline Ellison, the former CEO of Alameda Research, revealed in her 10-hour testimony during Sam Bankman-Fried’s trial that she had planned to step down from her position at Alameda months before the collapse of the crypto exchange FTX. However, she was concerned about a potential bank run on FTX amidst the downturn in the crypto market. Ellison’s testimony provided jurors with deeper insights into the events leading up to the FTX debacle in November 2022.
During the trial, a recording was presented as evidence, capturing the moment when Ellison informed employees about Alameda’s use of FTX customer deposits. This revelation was one of the key moments of the trial, along with revelations of fabricated balance sheets intended to deceive crypto lenders and the testimony of BlockFi CEO Zac Prince.
In addition to the trial, there were other significant developments in the crypto space this week. The United States Securities and Exchange Commission (SEC) reportedly decided not to appeal a court decision that favored Grayscale Investments. This ruling requires the SEC to review Grayscale’s spot Bitcoin exchange-traded fund (ETF) application. While this doesn’t guarantee approval, it does set the stage for further examination of the application.
Terraform Labs, a blockchain company, accused market maker Citadel Securities of playing a role in the collapse of its stablecoin, TerraUSD, in 2022. Terraform Labs filed a motion to compel Citadel Securities to produce documents related to its trading activity at the time of the depegging of TerraUSD Classic. This motion is part of Terraform Labs’ defense against a lawsuit filed by the SEC, alleging securities fraud.
Mastercard announced the successful completion of a trial involving the wrapping of central bank digital currencies (CBDCs) on different blockchains. This trial, conducted in collaboration with the Reserve Bank of Australia, allowed CBDC owners to purchase nonfungible tokens (NFTs) listed on the Ethereum blockchain using wrapped CBDC tokens.
In terms of cryptocurrency prices, Bitcoin was trading at $26,892, while Ether was at $1,551, and XRP was at $0.48. The total market cap stood at $1.05 trillion. Among the top gainers were Loom Network, Trust Wallet Token, and Tether Gold, while the top losers were Mantle, Rocket Pool, and Avalanche.
In other news, NFTs made headlines again, with questions arising over a significant purchase of a CrypToadz NFT for $1.6 million. The average price of CrypToadz NFTs had not exceeded $1,000, raising suspicions about the transaction. Additionally, real estate-backed stablecoin USDR lost its peg to the US dollar due to a rush of redemptions, resulting in losses for investors.
Huobi Global’s crypto exchange HTX successfully recovered stolen funds worth $8 million and issued a bounty of 250 ETH to the hacker responsible for the theft. The exchange had employed negotiation tactics and agreed not to take legal action if the hacker returned 95% of the funds.
Lastly, there was growing interest in zero-knowledge proofs, a cryptographic technology that has the potential to address the need for both privacy and truth in various sectors, including voting and finance.
Overall, this week saw significant developments in the crypto space, from the revelations and testimonies in the ongoing trial involving Sam Bankman-Fried to the progress made in the regulatory and technological aspects of digital assets.