The Disrupt Weekend

“U.S. prosecutors in Manhattan are examining the possibility that Mr. Bankman-Fried steered the prices of two interlinked currencies, TerraUSD and Luna, to benefit the entities he controlled, including FTX and Alameda Research.

TerraUSD lost its peg to the U.S. dollar in May after Terraform Labs flooded the market with Luna tokens to prop up the 1:1 UST-to-dollar peg. According to the Times, that drastic action was prompted by a torrent of sell orders for TerraUSD, which an unnamed source said came from FTX. At the same time, FTX had shorted the price of Luna, in an apparent attempt to yield “a fat profit.”

The investigation into Bankman-Fried’s potential involvement with TerraLuna is in its early stages.”

See Also: Sam Bankman-Fried’s Alameda Research Secretly Funded Crypto Media Site The Block and Its CEO

Goldman Sachs (GS), one of the world’s largest investment banks, is looking to spend tens of millions of dollars on crypto firms whose valuations have been hit after the implosion of FTX, Reuters reported on Tuesday. Goldman sees an increased need for trustworthy players in the industry, which the bank see as an opportunity.

We do see some really interesting opportunities, priced much more sensibly.”

See Also: Signature Bank to Reduce Crypto-Tied Deposits by as Much as $10 Billion
See Also: Grayscale, in the Spotlight as GBTC Discount Widens, Says DeFi Fund Now Trading
See Also: Bernstein Says Saving Grayscale Will Come at a Cost for Digital Currency Group

Ethereum developers determined on Thursday that the network’s next hard fork, called “Shanghai,” will have a target release time frame of March 2023. This upgrade will include code known as EIP 4895 that will allow Beacon Chain staked ether (ETH) withdrawals.

Developers also agreed to address the implementation of the “EVM Object Format” (EOF) in Shanghai, which is a collection of EIPs that essentially upgrade the Ethereum Virtual Machine. Developers also agreed to a second hard fork sometime in the fall of 2023 that would address another significant scaling upgrade – proto-danksharding, also known as EIP 4844.

Now that the full scope of what will be included in Shanghai is mostly settled, Ethereum developers will go ahead and work on testing the code. Developers are aiming to launch a new public testnet for Shanghai around Dec.15-16.”

In a strongly worded letter sent Tuesday, Representative Ritchie Torres (D-NY) called upon the Government Accountability Office (GAO) to conduct an independent review of the SEC’s actions—or lack thereof—in the months leading up to FTX’s implosion last month.

The letter specifically singled out SEC chair Gary Gensler for claiming exclusive regulatory dominion over crypto exchanges, while simultaneously failing to meaningfully regulate them.

If the SEC has the authority Mr. Gensler claims, why did he fail to uncover the largest crypto Ponzi scheme in US history? One cannot have it both ways, asserting authority while avoiding accountability.

The letter minced no words in claiming that Gensler is therefore ‘singularly responsible for the regulatory failures surrounding the collapse of FTX.'”

“In an exchange with YouTuber Coffeezilla, the former CEO disclosed that client funds weren’t segregated as promised. It turns out, there wasn’t much differentiation – at the very least during the final days the exchange was in business, Bankman-Fried admitted.

Thanks to skillful questioning by Coffeezilla, we know there were instead “omnibus” wallets and that spot and derivatives traders were essentially assuming the same level of risk.

At the time, we wanted to treat customers equally. That effectively meant that there was, you know, if you want to put it this way, like fungibility created‘ between the exchange’s spot and derivatives business lines. For Coffeezilla, this looks like a smoking gun that fraud was committed.

According to recent reporting, Alameda had an unclosable leveraged account on FTX. Almost by definition, if it was in the red and in debt and there was a wallet that commingled funds, Alameda was also partially funded by some FTX customers without their knowledge or consent.

There would be a “chargeable fraud case” if spot assets weren’t backed 1:1 as promised, or were used as collateral for loans or other purposes, Renato Mariotti, a former federal prosecutor, told CNBC. Bankman-Fried has said previously that “dollars” on the exchange and hedge fund were “generally fungible,” being used to reportedly fund personal loans to emloyees and make venture deals. Now, too, did he admit client funds were “effectively” interchange – at least in the final hours.

Bankman-Fried appears to have been deceptive from the beginning. FTX was an improperly organized firm at its founding. Customer assets were always precariously placed. And we know this now because of SBF’s own description of its end.”

See Also: Why Isn’t Sam Bankman-Fried Behind Bars?
See Also: Bankman-Fried Is a ‘Master of Deflection,’ Securities Lawyer Says
See Also: Knockoff Lotions, Weight Loss Drugs, Chinese News Sites: Inside Alameda’s Investment Portfolio

“With the Stax, Ledger was hoping to develop a more stylish and functional device than the previous Nano S – which looks more like a USB thumb drive – and one that can win mass adoption by crypto users. The wallet is a credit card-sized device with embedded magnets so that multiple devices can easily be stacked. The outside is a wraparound e-ink display that can show transaction details and even NFTs. The Ledger Stax will retail for $279.

We wanted to do something that is more fun and fits with where culture is going.

The Ledger Stax will be available in the first quarter of 2023 with pre-ordering available on It uses secure USB-C to connect to the Ledger Live app on a laptop, and Bluetooth to connect to the mobile app on a smartphone. It will also utilize the upcoming wallet extension Ledger Connect to connect to Web3 apps.”

The marketplace aims to streamline access to decentralized applications for users and developers. Oftentimes, Web3 products are fragmented, meaning dapps are scattered across different websites and protocols, which can reduce users’ trust when using blockchain technologies.

Alchemy said that while its app store is centralized it’s not a monetized product, and aims to provide free access to Web3-curious users and developers. Last week, Coinbase halted mobile non-fungible token (NFT) transfers due to Apple’s app store demanding 30% of the gas fees associated with transfers.”

See Also: Aave Acquires NFT Mobile Game Sonar for Lens Social Media Integration

Starbucks on Thursday launched a beta test of its highly anticipated Odyssey program, which combines customer loyalty rewards with non-fungible token (NFT) collecting and other gamified elements.

The popular coffee chain opened the Web3 extension to its Starbucks Rewards program to a “small group of waitlist members,” allowing them to engage in interactive “Journeys” that earn “Journey Stamps” in the form of Polygon-based NFTs. In addition, users also get “Odyssey Points” that will open access to new benefits and experiences in the future, including virtual espresso martini-making classes, exclusive events and trips to Starbucks roasteries and coffee farms.

Starbucks Odyssey is an experience, surrounded by a digital community, where members can come together, interact, and share their love of coffee. Web2 brands are awakening to the opportunity for a clear use case of the blockchain. And it exists in the form of next-generation loyalty – we have a word for that, we call it experiential loyalty.”

“On Wednesday, Apple Inc. made an announcement that might sound minor: It will now offer end-to-end encryption for most material its users backup on its iCloud storage service.

Until now, most materials on iCloud could be accessed by Apple under duress, such as when a search warrant or other court order forced them. But the new encrypted storage system will render the legal debate moot: law enforcement and intelligence agencies will not be able to subpoena or otherwise compel Apple to hand over user data, because Apple will simply not have the technological ability to comply.

The move towards end-to-end encryption should in turn help normalize online financial privacy, a major agenda item for the cryptocurrency industry. Crypto privacy has been under mounting attack in cases such as the sanctioning of Tornado Cash.

The new Apple systems will benefit crypto more directly in two other ways. First, they will have some direct impact on the security of things like crypto keys and wallets. Whether through negligence or truly bad judgment, some crypto users have been known to store their security keys in iCloud backups. That makes them vulnerable to both hackers and, in one notorious instance, the FBI – but with Apple’s new encryption that risk will be massively reduced.

The final notable upside for crypto is that Apple’s new system will introduce a huge new user base to security practices and interface features also widespread in crypto. It will be the first time many users are asked to manage their own personal encryption keys, without a centralized recovery process. It’s not dissimilar to how non-custodial crypto apps and protocols require users to keep track of private keys to “be their own bank.”

To mitigate this downside, Apple will also introduce a process known as “social recovery” to a mass audience, according to the Washington Post. An encrypted iCloud user can name another person who will have to participate if they ever lose their encryption key. Social recovery or other “multi-signature” backup schemes are becoming more widespread in crypto as a solution to the risk of key loss.

The most influential digital hardware and software maker on the planet, in short, is making a strong stand for the idea that real digital privacy should be allowed to exist, [while] hundreds of thousands of users are about to be introduced to private key management.”