The top news for last week: the former CEO of the collapsed FTX exchange, Sam Bankman-Fried, got arrested. Interesting, though, is Donald Trump’s foray into the NFT world, and JP Morgan’s findings about U.S. household crypto asset use. Happy reading!
FTX’s Sam Bankman-Fried Arrested, Faces Up to 115 Years in Prison
Last week, Sam Bankman-Fried — the former CEO of the collapsed FTX exchange — was arrested in the Bahamas and later extradited to the US. The arrest, at the request of the US Government, is based on a sealed indictment filed by the United States District Court for the Southern District of New York.
It was later revealed that he is facing eight federal indictments with charges including wire fraud, securities fraud, and money laundering. The charges carry a maximum sentence of 115 years in prison if the founder and former CEO of the bankrupt cryptocurrency exchange is convicted and given the maximum sentence. FTX filed for bankruptcy protection in November.
Trump Joins NFT Train, Issues Trading Card Series
Like several public figures in the past, including his wife, Melania Trump, Donald J. Trump has joined the NFT bandwagon with the launch of the “Trump Digital Trading Card” series. Through his Truth Social platform, the 45th US president is issuing a total of 45,000 NFTs on the Polygon chain at the cost of $99. According to crypto data provider, Dune, almost all the trading card NFTs have been minted within a 24-hour period. More than $4.3m was raised and 12,874 addresses were recorded to have minted their first NFT on Polygon while it puts the number of wallets that minted more than 45 of the NFTs at 225.
IRC, Stellar Pilot first-of-its-kind blockchain-powered aid disbursement system in Ukraine
The International Rescue Committee (IRC) and the Stellar Development Foundation (SDF) which supports the public Stellar blockchain network last week piloted a first-of-its-kind blockchain-powered aid disbursement system in Ukraine. With more than 6.5 million IDPs in Ukraine, the IRC seeks faster, cheaper, and more effective aid distribution methods for its ‘cash first’ approach. The pilot, based on leveraging a digital dollar backed by fully reserved assets — USDC and distributed almost instantly to a digital wallet on a client’s smartphone through Vibrant — seeks to test the impact of stablecoins and measure their effectiveness in humanitarian settings. It allows individuals to remotely receive, hold digital dollars as a store of value to hedge against inflation, and transport them securely across borders instead of the risks attached to physical cash.
ConsenSys Partners PayPal to Bring Buying Crypto to MetaMask
Top Web3 company, ConsenSys, last week announced that MetaMask users in the US are now able to purchase Ether (ETH) from within the app using PayPal. As the world’s leading self-custodial wallet and the first Web3 wallet to leverage PayPal for on-ramp transactions, MetaMask’s integration with PayPal will allow select PayPal users in the US to buy crypto seamlessly and easily explore the Web3 ecosystem.
The MetaMask wallet allows millions of users to interact with applications that include NFT marketplaces, play and earn games, decentralized autonomous organizations (DAOs), decentralized finance (DeFi) applications, and metaverse worlds.
Hong Kong’s Financial Regulatory Body Warns Investors on High Risks of Virtual Asset Offers
Hong Kong’s Securities and Futures Commission (SFC) has warned investors of the risks associated with virtual asset (VA) platforms that claim to offer returns saying they may suffer significant or even total loss in the event of fraud or collapse of the platform.
The SFC says the vast majority of the VA platforms offering the arrangements are unregulated and may lack transparency in their operations. It urged investors to be wary of the potential high risks associated with VA arrangements. It adds that it is an offense under the Securities and Futures Ordinance (SFO) for a person to carry on a business of marketing or distributing interests in a collective investment scheme (CIS) in Hong Kong or targeting Hong Kong investors without an SFC license unless an exemption applies.
Solana is First Blockchain Supported on Discord’s Linked Roles
AsDiscord users and developers can now use a new type of role that is created by authenticating their profile with an account outside of Discord, the Linked Roles include support for Solana — a first for any blockchain.
Servers with the Solana app installed can prompt users to link and authenticate with their Solana wallet, and assign Linked Roles based on the wallet. Server admins can create roles and gate channels based on metadata from a Solana wallet, such as holdings, number of transactions, or the age of the wallet. The new feature also enables Discord users to show off their official Discord Connections directly on their profiles as well as certain details from connected accounts, such as follower count and site activity.
JP Morgan Makes Four Key Findings About U.S. Household Crypto Asset Use
Based on the de-identified data of nearly 5 million active checking account customers, over 600,000 of which had conducted transfers to crypto accounts, JPMorgan Chase & Co investment bank made some interesting findings about crypto usage in the US after linking the dynamics of such transfers with demographic indicators, enabling analysis of heterogeneity across income, gender, and racial groups.
- Most crypto users made their first transactions during spikes in crypto-asset prices. The share of the population that has ever transferred funds into a crypto-related account tripled during the COVID-19 pandemic, rising from a cumulative 3% prior to 2020 to 13% as of June 2022. The majority of new crypto users in the sample (between 2015 and 2022) made their first transactions in a set of days spanning less than five months, to coincide with a monthly price change exceeding 25%.
- Crypto usage of crypto is broader and deeper for men, Asian individuals, and younger individuals with higher incomes. It is also more prominent among younger individuals — 20% for millennials, 11% for Generation X, and 4% for baby boomers
- Crypto holdings for most individuals are relatively small — as median flows equal less than one week’s worth of take-home pay — but almost 15% of users have net transfers of over one month’s worth of pay to crypto accounts. The median gross amount transferred to crypto accounts over the period from 2015 through the first half of 2022 was approximately $620.
- Most individuals who transferred money to crypto accounts did so when crypto-asset prices were significantly higher than current levels, and those with lower incomes likely made purchases at elevated prices relative to higher earners.
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