Crypto News Headlines (06-June-2023)

On-chain statistics for May show a mixed picture regarding bitcoin (BTC) and ether (ETH) adoption, Goldman Sachs (GS) said in a report on Monday.

Changes to ether balances across cohort groups have been largely unchanged, but bitcoin addresses with balances of more than 100,000 BTC seeing a monthly decrease of 31%, the report said.

The spent output profit ratio (SOPR) for bitcoin, which indicates the degree of realized profit, saw a number of spikes during the month, reaching levels not seen since December 2020, “suggesting that considerable profit taking has taken place in the spot markets,” the bank said.

Tether is increasing its investments in recent times, having announced a mining project in Uruguay and revealing an investment in the Georgia-based payment processing company The stablecoin company, responsible for the largest stablecoin asset by market cap (USDT), disclosed on Monday that it participated in a $1 billion investment in Volcano Energy, which is backed by Max Keiser.

The funds obtained by Volcano Energy will be utilized for a 241-megawatt (MW) renewable energy mining facility in Metapán. The data center will harness photovoltaic solar and wind power to fuel the company’s operations. Tether and Volcano Energy anticipate a substantial increase in the proportion of sustainable bitcoin mining in the forthcoming years.

“Volcano Energy represents one of the most ground-breaking and strategic initiatives we are investing in and we look forward to working alongside Josue Lopez and his team to make El Salvador a global force in renewable energy production,” Tether’s CTO Paolo Ardoino said on Monday.

Reginald Fowler has been sentenced to 75 months in prison for his role in facilitating over $750 million worth of crypto transactions through unregulated shadow banking services to the crypto industry, according to the U.S. Attorney’s Office in the Southern District of New York.

Fowler, who formerly co-owned the NFL’s Minnesota Vikings, is also serving time for violating U.S. money laundering laws, lying to U.S. banks, and defrauding the Alliance of American Football (AAF). 

Fowler’s criminal enterprise began back in 2018 when he established Global Trading Solutions LLC (GTS), a payments processor that was ostensibly established to provide Israeli blockchain businesses—collectively known in the case as “Crypto Companies”—with a means of exchanging fiat for crypto.

Coinbase Ventures, the investment arm of American crypto giant Coinbase, added four new crypto projects to its investment portfolio last month. The venture capital firm participated in funding rounds that raised a total of $20.7 million in May 2023. These investments include zkLink, Dolomite, Hourglass, and PYOR.

Altcoin Daily recently posted a video on Youtube that took a closer look at Coinbase Ventures’ recent investments. According to the data gathered by the crypto news channel, Coinbase Ventures participated in a strategic funding round for zkLink at the beginning of May. The unified multi-chain trading project raised a total of $10 million.

A week after funding zkLink, Coinbase Ventures participated in a funding round for Dolomite. The funding round was led by Draper Goren Holm, raising $2.5 million. Dolomite is a margin trading and lending protocol on Arbitrum. Coinbase Ventures invested an undisclosed amount in the DeFi project.

​​Turbos Finance, a decentralized exchange (DEX) built on the newly live layer 1 Sui blockchain, is now offering smart-routing for stablecoin swaps on the network, establishing multiple USDC variant liquidity pools.

The launch will allow customers to seamlessly trade any variant of bridged USDC assets wrapped by the Wormhole bridge against native Sui assets, the company said in a press release.

Currently, users have to wrap their USDC on the source’s network in order to access the stablecoin on Sui. Wrapped tokens are used to move assets between blockchains that are incompatible with each other via a bridge.

Turbos is offering a smart routing system on Sui to offer multiple USDC variant liquidity pools, the press release said. “This advancement unlocks the untapped potential of all USDC variants on Sui, irrespective of their origin networks,” said the release.

The U.S. Securities and Exchange Commission (SEC) has claimed that 12 crypto tokens are securities in its lawsuit filed Monday against crypto exchange Binance and its CEO, Changpeng Zhao (CZ). The lawsuit also names Bam Trading Services, which operates crypto trading platform Binance.US, and its parent company Bam Management US Holdings as defendants. According to the lawsuit, Zhao owns 81% of Bam Management.

The SEC alleged that the defendants have “unlawfully solicited U.S. investors to buy, sell, and trade crypto asset securities through unregistered trading platforms available online at and Binance.US.”

The regulator added that since the Binance platforms launched, the defendants “have made available for trading on them crypto assets that are offered and sold as investment contracts, and thus as securities.” The SEC’s lawsuit details:

This includes, but is not limited to, BNB, BUSD, and the units of each of the crypto asset securities further described below — with trading symbols SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI.

Security firm Elliptic Connect has traced the funds from the recent $35 million Atomic Wallet hack to a coin mixing service.

Called Sinbad, the mixer is also preferred by the infamous North Korean hacker cell Lazarus.

Elliptic reported that the “stolen funds are being swapped for Bitcoin (BTC)” before being laundered through Sinbad.

Coin mixers enable anonymity in cryptocurrency transactions by randomly mixing crypto transfers to obscure the origin and destination of the funds. Last year, the Department of Justice blacklisted Tornado Cash, another popular Ethereum mixing service, essentially banning American citizens from using the service. The agency said it sanctioned the project due its ties in helping ciminals launder money.

OKX, the world’s second largest cryptocurrency exchange by trading volume, has enlisted the services of digital asset storage firm Komainu, allowing institutional users to keep their crypto within the Nomura-backed custodian while using those funds to trade on the exchange.

It’s a partnership that demonstrates how vertically integrated crypto exchanges can start to emulate traditional finance, segregating operations using third party custodians, in a bid to avoid the possibility of another FTX collapse.

OKX is the first client to use Komainu Connect, a regulated settlement and custody system for institutional customers that offers 24/7 trading with a mix of cold storage, multiparty computation (MPC) and hardware security modules (HSMs).

Two members of the United States Congress have penned a letter to the heads of the Treasury and the Internal Revenue Service, demanding the implementation of tax regulations for the crypto industry.

In a letter addressed to Treasury Secretary Janet Yellen and IRS Commissioner Daniel Werfel, U.S. Representatives Brad Sherman and Stephen Lynch raised concerns about the compliance practices in crypto, stating:

“For years now, that (crypto) industry has been a major source of tax evasion and a significant part of the nation’s (United States) tax gap.”

The duo highlighted an audit report from September 2020, wherein the Treasury Inspector General for Tax Administration pointed out the IRS’ inability to identify pro-crypto taxpayers owing to the lack of reporting.

The Blockchain Association and the DeFi Education Fund have become the latest industry advocates to file their support of Coin Center’s lawsuit against the United States Treasury over its “unlawful” sanctions against Tornado Cash.

On June 2, the two cryptocurrency industry advocacy groups filed a joint amicus brief in support of Coin Center, arguing that the U.S. sanctions against the crypto mixer should be dropped.

They called the sanctions imposed by the Treasury’s Office of Foreign Assets Control (OFAC) “both unprecedented and unlawful,” and added:

“OFAC’s sanctions are unlawful. OFAC lacks statutory authority to sanction software like Tornado Cash, and regardless, its decision lacks any factual predicate that could render the sanctions lawful.”

The associations argued Tornado Cash is software and while OFAC has the legal authority to sanction people or property, it cannot sanction a decentralized protocol.