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Coming to an inbox near you…
- Alameda Sues Grayscale for $250M
- Tornado Cash Part 2: Electric Boogaloo
- Yuga Labs BTC NFTs Got $16.5M in Bids
- Amazon Launching an NFT Market??
- Hong Kong Lost $217M in Crypto Scams
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FTX’s sister company is suing Barry Silbert’s Grayscale to the tune of $250M to try and get any money for FTX creditors that they can.
Alameda Research is suing Grayscale Investments for over $250M in asset value on behalf of FTX Debtor's customers and creditors.
— Crypto Crib (@Crypto_Crib_)
Mar 7, 2023
On the one hand, this legal move comes as a surprise in that no one was expecting Sam Bankman-Fried’s failed companies to actually go after Barry Silbert’s own failed company. But on the other hand, it’s no surprise at all that FTX is willing to do anything and everything to fill its ~$9B balance sheet hole.
This lawsuit has been initiated while FTX’s new CEO John Ray is piloting the company. In his relatively short time at the company, he’s quickly done exactly what he was hired to do — searching for any advantage or forgotten capital that can help make the bankruptcy process smoother for FTX and help “make their customers whole,” as Sam Bankman-Fried is fond of saying.
@GRDecter Don't worry, they are owed $12.8 billion from a creditor that will hopefully pay them back!
It's called "Alameda Research"
Oh, wait...
— Grit Capital (@Grit_Capital)
Mar 6, 2023
The purpose of the lawsuit is to give shareholders access to $9B in value that’s locked up in Grayscale Bitcoin and ETH Trusts and to get $250M in immediate assets to pay back FTX customers with.
The main argument Alameda is making against Grayscale is that they made excuses for preventing investors from selling their shares, which caused them to tank almost 50% in value.
Alameda suing Grayscale in DE Chancery Court
this should be very very interesting--not only for crypto, it could have broader implications for 'corporate law' re: fiduciary duties and the covenant of good faith and fair dealing
h/t @chancery_daily
— _gabrielShapir0 (@lex_node)
Mar 7, 2023
The plaintiff made the final claim regarding Alameda that the worth of FTX debtors’ shares could be as high as $550M total, which is around 90% more than their current value, if Grayscale would reduce its redemption fees and stop blocking redemptions entirely.
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Soleimani, a former Tornado Cash developer, has announced “Privacy Pools” a new crypto mixer that’s meant to address the problems that earned Tornado Cash its controversial reputation.
#cryptonews: An early developer of the U.S.-sanctioned #Tornado Cash crypto mixing service has forked it to create Privacy Pools, which lets users blacklist shady wallets.
— CoinMarketCap (@CoinMarketCap)
Mar 6, 2023
For those who don’t know, Tornado Cash is a smart contract crypto mixer protocol that allows users to deposit their crypto and have it “mixed” with other people’s, leaving no connection between the deposit and withdrawal.
The protocol has been used by countless criminals to launder crypto and get away with withdrawing it to unrelated wallet addresses. However, crypto mixers aren’t all bad — at their core, they’re just meant to serve as a way to preserve user anonymity and transaction privacy.
Here’s some history on Tornado to catch you up to speed:
- It was created for simple transaction privacy, made for the everyday ETH user
- Only the 2nd deployed zkSNARK in history
- But then it all went downhill when the Lazarus Group started laundering crypto through Tornado Cash
- Normal users can’t ensure that they aren’t involving themselves with criminals now
And that’s exactly the problem that Privacy Pool aims to solve. Soleimani’s new crypto mixer actually enables users to specifically choose not to mix their crypto with any wallets from a predetermined list of addresses “associated with stolen or laundered funds,” according to Cointelegraph.
Imagine being jailed for almost a year purely for writing code? It's even worse when you consider that crypto's biggest fraudsters aren't facing the same treatment. That's the case of the Tornado Cash and it's time for an update
— Coin Bureau (@coinbureau)
Feb 28, 2023
This topic is especially pressing because Alexey Pertsev, the creator of the original Tornado Cash, is in jail on charges of money laundering, even though he really only wrote the code for the program. No wonder Soleimani’s being intentional with the way he sets up Privacy Pool — it seems like regulators are just looking for people to blame…
What percentage of laundered Ethereum has Tornado Cash processed since its launch?
A. 10%
B. 25%
C. 50%
D. 75%
Scroll down to the bottom to see if you're right!
Other Top Stories Today 📢
The controversial Bitcoin-Ordinals-based “Twelvefold” NFT collection from the creators of the Bored Ape Yacht Club (BAYC) NFTs has earned Yuga $16.5M in 24 hours. The auction has ended and winning bidders will be receiving their NFTs soon. Here was Yuga Labs’ tweet regarding the finish of the auction: “The TwelveFold auction has ended. Congratulations to the top 288 bidders - you will receive your inscription within one week. Valid bids that did not rank in the top 288 will have their bid amount returned to their receiving address within 24 hours.” The collection has received criticism from the community because of its auction method, where bidders had to send BTC straight to a Yuga Labs wallet and simply trust that the firm would send it back if they didn’t win.
The biggest name in e-commerce could be diving headlong into the world of NFTs next month. Amazon shared in January that it was fully planning on launching an NFT marketplace, but that it was still working out the foundational structure and details regarding the project — but according to “sources familiar with the matter,” the platform is set to launch on April 24th, according to Watcher.guru. Furthermore, it looks like the marketplace will only be accessible by US users, and it’s going to focus not only on NFTs but also on blockchain gaming.
In 2022 alone, Hong Kong residents lost $407M total in tech-based crimes — and crypto scams accounted for more than half of that figure. This is more than a 100% increase from the previous year, even though the industry was spiraling through a bear market all throughout 2022. In total, there were 2,336 individual crypto scam cases in Hong Kong last year, according to the South China Morning Post (SCMP).
❓ Trivia Answer
Answer: D.
Tornado Cash has processed 75% of all laundered Ethereum since its launch, and has received an estimated $7B total of digital assets.
Web3 Resource of the Day
The WORST Crypto Injustice: Tornado Cash Dev Still in Jail!? 🤯 | Video Podcast from Bankless
We wanted to provide a resource today that would give you a deeper understanding of and helpful context for the Tornado Cash case. The creator is in jail, the US government is possibly overstepping its own authority, and the Lazarus Group, a cyberterrorist corp., continues to use Tornado Cash for laundering stolen crypto. Meanwhile, Sam Bankman-Fried is at his parents’ house in California, quite possibly playing video games…
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DISCLAIMER: This is not financial advice. This newsletter is strictly educational and is not investment advice to buy or sell any assets or to make any financial decisions. Do your own research.