Recap: DeFi Week Dec. 11
Hello Defiers! Happy weekend!
SBF finally went quiet. It wasn’t his choice, of course. The loquacious crypto entrepreneur had raised eyebrows during the weeks since FTX went bankrupt by giving a series of interviews. Then the Bahamanian police showed up at the door of his $40M condo in the island nation with handcuffs, and Sam Bankman-Fried was detained pending an extradition request from the U.S., as Aleks Gilbert reported in the first of a series of stories on this week’s drama. Chances are, we won’t here from SBF for some time to come.
Indicted by a federal grand jury on eight counts of fraud, conspiracy and campaign finance charges, SBF now faces the full force of U.S. law enforcement and regulatory authorities. The SEC and CFTC are coming after him, and it looks like his former colleagues are turning states evidence to mitigate their own legal vulnerability. The FTX crisis has moved into the legal reckoning phase.
Aleks covered the extraordinary congressional testimony of FTX’s court-appointed CEO, John Ray, who laid the failure directly at SBF’s feet, and The Defiant’s YouTube channel also weighed in with scintillating takes on the unfolding scandal. No sooner had SBF been charged than Sen. Elizabeth Warren and Sen. Roger Marshall introduced a bill that would severely regulate crypto. In a withering analysis, Coin Center, the influential think tank, unpacked the ramifications of this bill should it become law, and Aleks reported on their findings in an excellent analytical story.
Meanwhile, DeFi soldiered on. Owen Fernau reported on CowSwap’s new “surplus capturing” feature; Sam Haig reported on MetaMask’s launch of PayPal integration for Ethereum purchases; and IntoTheBlock delivered a fascinating research report on the ApeCoin staking launch.
And in a video feature, be sure to check out our Defiant Documentary and the strange and disturbing case of Alexey Pertsev, the dev who’s been detained in the Netherlands in connection with the Tornado Cash sanctions case. It’s an in-depth look into how the authorities are trying to prosecute code (and a coder).
In this week’s podcast, Cami Russo interviewed BitGo’s Mike Belshe on what’s next for WBTC and crypto custodians. It’s a super-informative take on how Bitcoin works on Ethereum.
Enjoy!
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Defiant Podcast
BitGo’s Mike Belshe on What’s Next for WBTC & Crypto Custodians
This week on The Defiant Podcast, we speak with Mike Belshe, the CEO of BitGo, a digital asset custodian, wallet, and issuer of wrapped Bitcoin (WBTC).
We start our conversation with an overview of BitGo and Mike’s crypto journey.
Wrapped Bitcoin is the most successful representation of Bitcoin on Ethereum. There’s about 200K Bitcoin in BitGo’s custody, which is the equivalent of $3.4B. WBTC is an important piece of the ecosystem as it enables Bitcoin holders to interact with DeFi. We dive into the recent selloff that saw WBTC lose its peg to Bitcoin.
In the final part of our conversation, we discuss the role of custodians in the crypto space. Especially after what happened this year with FTX and various other centralized entities, crypto has been given a wake up call to bring transparency and disclosures to CeFi. We explore the biggest lessons we can take away from this year.
Listen to the interview in this week’s podcast episode here:
Defiant Video
DeFi Documentary
The War On Code: Investigating the Tornado Cash Sanctions and the Arrest of Alexey Pertsev
Another Nonsense Crypto Bill From Warren
Prosecutors Throw Everything They’ve got at SBF, Hint There’s More to Come
Is Binance the next crypto giant to fall?
EIP Snub, Criticism Riles Uniswap Founder
Best of the Week
Crypto Legislation
Warren-Marshall Bill Assailed as a ‘Direct Attack’ on Crypto Users
Senators Say Law is Needed to Curb Money Laundering and Criminal Use of Cryptocurrencies
It’s the greatest legislative threat to crypto ever. That’s the conclusion drawn by Coin Center, the cryptocurrency industry think tank, after analyzing a bill introduced Wednesday by Sen. Elizabeth Warren (D-Mass.), and Sen. Roger Marshall (R-Kan.).
Read the full story in The Defiant
FTX Autopsy
FTX CEO Blames Exchange’s Collapse on SBF’s Mismanagement
“Old-fashioned Embezzlement,” John Ray Tells Congress
Several lawmakers slammed crypto during a widely publicized hearing on the collapse of FTX Tuesday. But to the company’s new CEO, appointed to clean up the mess left by Sam Bankman-Fried, the exchange’s demise was simply a case of “old-fashioned embezzlement.”
Read the full story in The Defiant
FTX Crisis: SBF Charged
Feds Accuse SBF of Plundering ‘Billions’ in Client Assets to Save Alameda
Bankman-Fried Charged with Fraud and Conspiracy by Three U.S. Authorities
In an action that abruptly ended Sam Bankman-Fried’s apology tour, a federal grand jury accused the disgraced co-founder of FTX with conspiring to defraud investors and the U.S. government in an indictment unsealed Tuesday morning in New York.
Prosecutors charged Bankman-Fried with eight counts of securities fraud, wire fraud, and conspiracy charges. The 30-year-old crypto entrepreneur is being detained by law enforcement authorities in the Bahamas, where FTX is based, pending an extradition request by the U.S. Department of Justice.
Read the full story in The Defiant
DeFi Governance
Balancer Ends Long Governance Battle With Whale
DEX’s Members Vote to Make Peace with Investor in Duel Over VE Tokenomics
By Samuel Haig
For months a long simmering battle has been roiling the governance practices at Balancer, the No. 4 decentralized exchange. On Tuesday, Balancer, which has $1.6B in total value locked, passed a peace treaty to settle the eight-month-long dispute with a yield farming whale known as “Humpy”.
Read the full story in The Defiant
NFT Royalties Debate
OpenSea To Transfer Control Of Royalty Enforcement Tool to Industry Collective
Manifold Releases Marketplace Blocker
By Owen Fernau
OpenSea, the leading NFT marketplace, is making waves once again in the ongoing debate over creator royalties. In the latest twist, OpenSea plans to transfer ownership of its Operator Filter Registry (OFR), a tool which only allows NFTs to be sold on marketplaces that enforce royalties, to a collective controlled by major players in the space.
Read the full story in The Defiant
NFT Research
An On-Chain Look Into The ApeCoin Staking Launch
Staking Mechanism Seeks to Spur Interest in Yuga Collections — Is it Working?
By IntoTheBlock
ApeCoin is the token of the Bored Ape Yacht Club ecosystem. In March, it launched and allocated 15% of its supply as an airdrop to NFT holders of the BAYC/MAYC/BAKC collections. On Monday, the DAO enabled its staking mechanism, which seeks to incentivize holders to lock their APE tokens in a smart contract and accrue benefits over time.
Read the full research report in The Defiant
Friday
News
- Markets Slide As Fed Says Higher Rates Are Here To Stay Markets turned lower after the Federal Reserve raised benchmark U.S. interest rates by 0.50% on Dec. 14 and the European Central Bank followed suit on Dec. 15.
- Privacy Protocol Aztec Raises $100M In a deal that highlights the risks investors may face as crypto privacy clashes with an intensifying law enforcement crackdown, Aztec Network, a London-based company that bills its technology as the VPN for Ethereum, has raised $100M in a funding round led by a16z.
- Coinbase Unveils Recovery Tool For Unsupported Assets Users who have accidentally sent unsupported Ethereum-based tokens to Coinbase may soon be able to recover them.
NFT Roundup
- Trump Drops Self-Styled NFT Trading Cards Donald Trump may not be a fan of crypto but he has launched “Trump Cards,” an NFT collection featuring pictures of — you guessed it — himself.
Thursday
News
- Warren-Marshall Bill Assailed as a ‘Direct Attack’ on Crypto Users It’s the greatest legislative threat to crypto ever. That’s the conclusion drawn by Coin Center, the cryptocurrency industry think tank, after analyzing a bill introduced Wednesday by Sen. Elizabeth Warren (D-Mass.), and Sen. Roger Marshall (R-Kan.).
- MetaMask Launches PayPal Integration For ETH Purchases MetaMask, the most popular web3 wallet, began rolling out a fiat on-ramp for ETH in partnership with leading payments processor, PayPal, on Dec. 14.
- PartyBid V2 Unlocks Community Control of NFTs After kicking off with a bang during last year’s NFT bull run, PartyDAO has launched the second iteration of its flagship PartyBid product.
Research
- An On-Chain Look Into The ApeCoin Staking Launch ApeCoin is the token of the Bored Ape Yacht Club ecosystem. In March, it launched and allocated 15% of its supply as an airdrop to NFT holders of the BAYC/MAYC/BAKC collections. On Monday, the DAO enabled its staking mechanism, which seeks to incentivize holders to lock their APE tokens in a smart contract and accrue benefits over time.
DeFi Explainers
- What are Swap Rates? According to CoinMarketCap, there are more than 20,000 cryptocurrencies on offer. This is a function of blockchain’s core feature — monetizing decentralization through digital assets. Because of this, even tiny protocols (dApps) in a wider blockchain network have their own tokens.
Wednesday
News
- FTX CEO Blames Exchange’s Collapse on SBF’s Mismanagement Several lawmakers slammed crypto during a widely publicized hearing on the collapse of FTX Tuesday. But to the company’s new CEO, appointed to clean up the mess left by Sam Bankman-Fried, the exchange’s demise was simply a case of “old-fashioned embezzlement.”
- Feds Accuse SBF of Plundering ‘Billions’ in Client Assets to Save Alameda In an action that abruptly ended Sam Bankman-Fried’s apology tour, a federal grand jury accused the disgraced co-founder of FTX with conspiring to defraud investors and the U.S. government in an indictment unsealed Tuesday morning in New York.
- Balancer Ends Long Governance Battle With Whale For months a long simmering battle has been roiling the governance practices at Balancer, the No. 4 decentralized exchange. On Tuesday, Balancer, which has $1.6B in total value locked, passed a peace treaty to settle the eight-month-long dispute with a yield farming whale known as “Humpy”.
- CowSwap Launches ‘Surplus-Capturing’ Limit Orders While the fallout from FTX’s implosion continues to cast a shadow over crypto, DeFi projects are still innovating and releasing new features. CowSwap, a decentralized exchange (DEX) aggregator, launched limit orders on Dec. 12. Limit orders are a way for traders to set specific prices at which to buy or sell an asset.
Markets
- Markets Rally Ahead Of Fed As US Inflation Cools With all eyes on the Federal Reserve ahead of tomorrow’s crucial decision on interest rates, investors breathed a sigh of relief Tuesday after U.S. inflation numbers came in below expectations.
DeFi Explainers
- What are DeFi Protocols? DeFi protocol is a set of codes that govern how digital assets are used on a blockchain network. Tapping smart contracts and virtual machines (VMs), DeFi protocols manage exchanges, enable users to lend and borrow, and run decentralized autonomous organizations (DAOs).
Tuesday
News
- SBF to Face U.S. Charges as Ray Prepares to Share Autopsy of FTX One month after FTX, the No. 2 crypto exchange worldwide, collapsed amid allegations of self-dealing, police in the Bahamas arrested its co-founder and former CEO, Sam Bankman-Fried, at the request of U.S. prosecutors.
- Binance Could Face Criminal Charges From U.S. Department of Justice FTX’s implosion has ratcheted up the pressure on all centralized exchanges in crypto. The U.S. Department of Justice is reportedly considering criminal charges against Binance, the world’s largest crypto exchange, according to Reuters.
- Uniswap’s Adams Fires Back at Opponents of His Support for Ethereum Upgrade Uniswap founder Hayden Adams lashed out Sunday at critics who have questioned his support for a proposed upgrade to Ethereum code. He called their criticism a “conspiracy theory.”
- The Runway is Getting Shorter: Gensler Crypto lender Nexo on Monday announced it would leave the US market, blaming a “lack of regulatory clarity.” Two days later, the country’s de facto crypto regulator had a simple message for the company: Don’t let the door hit you on the way out.
- Grayscale DeFi Fund Starts Trading Digital asset manager Grayscale’s new DeFi-focused product has started trading on public markets.
NFTs & GameFi
- OpenSea To Transfer Control Of Royalty Enforcement Tool to Industry Collective OpenSea, the leading NFT marketplace, is making waves once again in the ongoing debate over creator royalties. In the latest twist, OpenSea plans to transfer ownership of its Operator Filter Registry (OFR), a tool which only allows NFTs to be sold on marketplaces that enforce royalties, to a collective controlled by major players in the space.
- Illuvium’s New Offering Buoys Web3 Gaming In a sign the GameFi market hasn’t completely cratered, Illuvium, the web3 game studio, released its second game, Overworld, in beta on Wednesday.
Community Love
Thanking all the amazing Defiers for the support and love this week (and always)!
IT'S TIME TO VOTE FOR THE DEFIER OF THE YEAR 2022🎉
We want to highlight one individual who went above and beyond to help push the crypto/web3 community forward this year.
🗳👇
— The Defiant (@DefiantNews) December 15, 2022
Doesnt matter what chain you’re on, its an issue that impacts the industry as a whole https://t.co/VtEaZO7tB7
— manosdediamante.algo (@coy_ca) December 10, 2022
Great journalistic work done by @DefiantNews with The War On Code – a documentary on the unfair arrest of Alexey Pertsev and the Tornado Cash sanctions.https://t.co/KRrECPEdKR
— Paul Razvan Berg (@PaulRBerg) December 11, 2022
This is a fantastic documentary from @DefiantNews & @CamiRusso 👏🏽👏🏽 https://t.co/0RcLXPorhQ
— NewBie Truth (@Newbie_Truth) December 11, 2022
Fascinating documentary on @TornadoCash by @DefiantNews congratulations to @CamiRusso https://t.co/ytHqUFWXIz
— Miko (@mikojava) December 11, 2022
I'm proud to be part of this amazing team. https://t.co/sEkxwHQkpZ
— Diego 🦇🔊 (@DiegoCabral__) December 10, 2022
great documentary @CamiRusso @DefiantNews! does a good job of sketching out the complexity and the importance of the Tornado Cash case and Alexey Pertsev’s detention https://t.co/ZbxM0RKvax
— Noelle Acheson (@NoelleInMadrid) December 11, 2022
I made this poster for @thedefiant's documentary on the arrest of @TornadoCash developer Alexey Pertsev. It's already out, you can watch it here > https://t.co/tDaz0niyFK pic.twitter.com/NmVSQp6ixN
— pab (@pprhsk) December 10, 2022
Alex Pertsev has been imprisoned for 122 days.
We went to find out the real motive behind his arrest – Is this about money laundering, or is there more than what meets the eye?https://t.co/as3hoelylK
— Alp (@alpGasimov) December 10, 2022
So far this is really well done. Excellent explanations of the issues.
Nice job @DefiantNews – thank you!
The War On Code: Investigating the Tornado Cash Sanctions and the Arrest… https://t.co/LUWZLumUkD via @YouTube
— Brad Nickel – DeFi.canto (@b05crypto) December 10, 2022
📺 Going live now with @DefiantNews print team to analyze the main news of the week in DeFi and crypto
Join us! 👇https://t.co/e0ONGdbYb2 https://t.co/f3pjkF0UFV
— Camila Russo (@CamiRusso) December 9, 2022
Alerta de vídeo novo!
Trabalhando na web3 & The Defiant com @DiegoCabral__ https://t.co/j8DxEHMjZn via @YouTube
— Criptonita.eth (🦇🔊) (@cripto_nita_) December 7, 2022
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