Read in the Digest:
- Alameda’s Caroline Ellison and FTX’s Gary Wang plead guilty to fraud
- MetaMask Swaps add support for Layer-2 networks Arbitrum and Optimism
- Senator Toomey presents stablecoin bill as congressional session winds up
- Crypto could lead to the next financial crisis, India’s RBI head warns
- British Columbia to suspend new electricity connections for crypto miners
Alameda’s Caroline Ellison and FTX’s Gary Wang Plead Guilty to Fraud
Caroline Ellison, the former chief executive of Alameda Research, and Gary Wang, a co-founder of FTX, have both pleaded guilty to the charges brought against them in their involvement in the collapse of the crypto exchange.
According to the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), Ellison manipulated the price of FTT, the native token of the beleaguered crypto exchange.
The enforcement agencies also said the pair are cooperating as their plea agreements offer reduced sentencing. This comes in exchange for assistance in ongoing investigations into wrongdoing at FTX/Alameda that prove “substantial.”
Also in the case, Sam Bankman-Fried, the founder of FTX, has been confirmed to be in the custody of the FBI and “on his way back to the United States,” where he will be transported to the Southern District of New York to appear before a judge “as soon as possible.”
Flipsider:
- Southern District of New York Attorney Damian Williams has noted that his office was “not done” levying additional charges against the former execs.
Why You Should Care
Following their pleas, Ellison and Wang will likely be used as key witnesses for the feds in the ongoing SBF case.
MetaMask Swaps Add Support for Layer-2 Networks Arbitrum and Optimism
The leading Web3 cryptocurrency wallet, MetaMask, has announced support for its Swaps feature on Layer-2 networks such as Arbitrum and Optimism. This adds to the existing networks of Ethereum, Binance Smart Chain (BSC), Polygon, and Avalanche.
MetaMask Swaps allow users to convert tokens from their desktop or mobile wallets while also aggregating data across decentralized exchanges (DEXs) and market makers and getting the best price at the lowest market fees.
The recent expansion now means users can swap cryptos and non-fungible tokens (NFTs) on Arbitrum and Optimism. Users can also use MetaMask Swap to view multi-chain token balances and NFTs and bridge to different networks.
Flipsider:
- Following the addition of Optimism, Santiment reported that the USDT or USDC transaction volume on the chain shot up above $1 billion.
Why You Should Care
MetaMask Swaps gather data from a DEX, allowing users to access a wide range of crypto and more flexibility for choosing their investments on the supported chains.
Senator Toomey Presents Stablecoin Bill as Congressional Session Winds Up
One of crypto’s favorite U.S. senators, Pat Toomey, put forward a stablecoin bill in the final days of the congressional session. He believes it will provide a guide for stablecoin legislation next year.
In his final days in office, Toomey hopes the bill he introduced will provide a “groundwork for my colleagues to pass legislation next year safeguarding customer funds without inhibiting innovation.”
As part of the bill, stablecoins will retain their privacy in transactions. If passed, the bill will set up the Office of the Comptroller of the Currency as a licenser of companies issuing payment stablecoins. However, the Federal Reserve will be kept away from stablecoins.
In addition, stablecoins must be fully backed by reserves, and non-bank entities issue the tokens. While it nods toward maintaining existing state-based supervision, stablecoin issuers would not need to worry about securities laws.
Flipsider:
- With the Republicans a minority in the Senate, the stablecoin bill could not receive as much attention as it would have if they had the majority votes.
Why You Should Care
Senator Toomey’s bill, coming at a critical time, could be looked into as the United States aims to put together a framework to regulate crypto.
Crypto Could Lead to the Next Financial Crisis, India’s RBI Head Warns
Shaktikanta Das, the governor of the Reserve Bank of India (RBI), has warned banking executives and lawmakers that failing to regulate the growing crypto industry could ignite the next financial crisis.
According to the RBI governor, crypto has a huge inherent risk to the nation’s macroeconomic stability. However, he urged the adoption of a new e-Rupee for digital banking needs.
Highlighting the recent implosion of FTX and other crypto crises this year, Das said, “if cryptos grow, mark my words, the next financial crisis will come.” He also believes that crypto has no underlying value.
According to Das, “crypto or private cryptocurrency is a fashionable way of describing what is otherwise a 100% speculative activity.” Das also adds that more central banks will turn away from private cryptocurrencies to embrace digital currencies.
Flipsider:
- Das’ major argument about crypto is that they don’t believe in central banks and a regulated financial world.
Why You Should Care
Additionally, the position and views of the RBI chief could be used in influencing the type of regulator framework for cryptos in India.
British Columbia to Suspend New Electricity Connections for Crypto Miners
The government of British Columbia, Canada, is moving to stop new electricity-connection requests from cryptocurrency miners from drawing power from its main electricity distributor BC Hydro for 18 months.
According to the British Columbia Ministry of Energy, Mines, and Low Carbon Innovation, 21 crypto miners request 1,403 megawatts, which can power around 570,000 homes annually.
Energy Minister Josie Osborne said the move would conserve electricity for other uses, especially for individuals adopting electric vehicles, heat pumps, and businesses producing economic opportunities or undertaking a green mission.
By suspending new requests, the province hopes to ease power restraints while BC Hydro also develops a permanent regulatory framework for crypto mining by engaging with the local industry.
Flipsider:
- Manitoba in central Canada also suspended energy connection requests from new crypto miners for 18 months.
Why You Should Care
The policy will affect crypto miners yet to apply for an electrical connection as well as those in the early stages of the connection process, not already existing miners.