Major Chinese Banks Extend Olive Branch to Crypto Firms
The China narrative around crypto seems to be—or is about to start—heating up again. Last week, Bloomberg reported that there had been an unexpected apparent green light from Beijing for a crypto push. Considering that major banks have ignored the sector following a Chinese government ban in 2022, the report says the move has been seeing Chinese banks, including China’s state-owned banks, directly reaching out to crypto businesses over the past few months. Citing people with knowledge of the matter, the report suggests that the Hong Kong arms of Bank of Communications Co., Bank of China Ltd., along with Shanghai Pudong Development Bank have either started offering banking services to local crypto firms or have made inquiries in the field.
Later in the week, Bloomberg reported there was a meeting between Hong Kong regulators, crypto firms, and bankers “to facilitate direct dialog” and “share practical experiences and perspectives in opening and maintaining bank accounts”.
Ethereum Announces Shapella Upgrade Activation Date
Last week saw the Ethereum Foundation announce that the Shapella upgrade is scheduled to be activated on the Ethereum network by April 12, 2023. Coined from the names of the fork on the execution client side, Shanghai, and Capella on the consensus layer client side, the Shapella upgrade will introduce new features, including enabling validators to fully and partially withdraw their staked 32 Ether from the Ethereum Beacon Chain back to the execution layer. Partial withdrawals would see validators be able to withdraw balances in excess of 32 ETH i.e. earned rewards and still be a part of the Beacon Chain, while full withdrawals will force the validator to exit and stop being a part of the chain as the entire 32 ETH principle and any rewards are withdrawn.
Prosecutors Allege FTX’s Bankman-Fried Bribed Chinese Officials
New information emerged last week about the ex-founder of the collapsed FTX exchange, Sam Bankman-Fried (SBF). Federal prosecutors alleged in a new indictment that he had bribed “one or more Chinese government officials” with over $40m in crypto to unfreeze accounts belonging to his hedge fund, Alameda Research, in 2021. According to a CNBC report, the accounts contained over $1 billion worth of crypto. A spokeswoman for the Chinese foreign ministry denied they had any knowledge of the claim.
The allegation surfaced around the time when FTX’s identified creditors started receiving an email informing them of a Scheduled Claim Information and Unique Customer Code as well as a list of all the assets (crypto, fiat, and shares) they owned when FTX collapsed. OKX also announced its readiness to turn over $157m in frozen assets related to FTX and Alameda Research.
News Reports Suggest What’s Next for Do Kwon
A judge in Montenegro last week ruled that the founder of Terraform Labs, Do Kwon, be detained for 30 days while his forgery case is being investigated, according to DL News.
On the US and South Korea seeking Kwon’s extradition, Bloomberg reported that Montenegro’s justice minister has indicated that a judge will decide whether to extradite him, although he may first have to serve time in Montenegro if convicted of traveling on fake documents.
Meanwhile, in another report, an unnamed criminal defense lawyer in the country suggests that it will take about a year for an extradition agreement to be reached, with the probability of his being extradited to South Korea being higher.
Burger King Installs Crypto-Accepting Power Banks in Restaurants
Major fast-food chain, Burger King, has had Instpower power bank rental machines that accept crypto payments installed at its Paris restaurants. Alchemy Pay, a payment gateway that connects crypto and global fiat currencies for businesses, developers, and users, reported the development last week.
Alchemy Pay and Binance Pay are the crypto payment providers that enable Instpower users to pay with cryptocurrency for power bank devices at more than 14,000 locations worldwide. While power banks’ use in the European market is just picking up, the borderless nature of crypto supposedly makes it the ideal payment method for the service that affords travelers a way to charge their devices while on the go.
Vitalik Explains How ZK-EVMs Can Help Ethereum Network
The same technology that has given some Layer 2 chains the name they have in the crypto space is likely coming to Layer 1 too, Vitalik Buterin has suggested in a new article. Zero-knowledge rollups (ZK-rollups)—the protocols responsible for improving efficiency on Layer 2 chains—may work hand-in-hand with Ethereum Virtual Machines (EVM) to verify execution on Layer 1 as well, according to Buterin.
In the piece, Buterin highlights how high gas-per-block targets on Layer 1 forced user activity to move to Layer 2 protocols. In the longer term, Buterin suggests that ZK-EVMs are not going to be just for rollups, but to be used for verifying Layer 1 transactions as well.
ZK-EVMs coming to Layer 1 will see the chain serve as a clearing house for Layer 2 protocols, verify their proofs, and occasionally facilitate large funds transfers between them. Some popular examples of rollups include Arbitrum, Metis, and Optimism.
US Govt Agrees to Recommended Sentence for Man Behind $3.36 Billion Crypto Seizure
Ahead of the sentencing of James Zhong, who pleaded guilty to committing wire fraud in September 2012 when he unlawfully obtained over 50,000 Bitcoin from the Silk Road dark web internet marketplace, the US Government last week agreed that a below-Guidelines sentence, and a sentence even below the 24 months recommended by Probation, would be appropriate.
They made the consideration on the basis of mitigating factors such as Zhong’s youth, his autism, and his assistance to law enforcement in accessing multiple billions of dollars of crime proceeds, according to court documents.
Nevertheless, the Government submits that a prison sentence is necessary, in light of the seriousness of Zhong’s nearly decade-long conduct, his post-theft actions to conceal his identity, the source of the crime proceeds, and to avoid signaling to anyone that such conduct presents little risk beyond simply being asked to pay back whatever remains of the crime proceeds.
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