The biggest crypto news and ideas of the day |
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The amount of money stashed in decentralized finance, or DeFi, protocols has dwindled to the lowest level since February 2021, according to data compiled by DefiLlama. Specifically, total value locked, or TVL, has slumped to $37.5 billion, slipping below the previous post–bull market nadir of $38 billion set in December. Typically, when the largest crypto assets fall, traders pull liquidity out of more speculative assets like those within DeFi to mitigate risk. That certainly played out last year, when bitcoin slumped 77% from its all-time high while several altcoins plunged by more than 95% from records. However, DeFi has fared worse than ETH this year. ETH is up about 40% since December even as DeFi TVL has shrunk, suggesting DeFi's issues are specific to it, not its key token. |
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Data compiled by CoinDesk shows XRP, among the world's largest tokens by market capitalization, has lost nearly all gains after Ripple Labs' landmark court ruling over the U.S. Securities and Exchange Commission (SEC) in July. XRP exchanged hands at 50 cents on Wednesday, down 14% in the past week and 30% over a 30-day period. Price-chart data shows the tokens hit a yearly high of 83 cents on July 20., but Wednesday's prices are back to levels before the SEC ruling. In 2020, the SEC sued Ripple on allegations that the firm sold unregistered securities. But in July 2023, a U.S. judge ruled the sale of XRP tokens on exchanges did not constitute investment contracts, putting a pause on what was one of the longest and most controversial legal cases in the crypto market. The ruling will be appealed by the SEC. |
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Register for Mainnet 2023, Messari's agenda-setting annual summit and the premiere crypto event of the year! Taking place from Sept 20 - 22 and located at Pier 36 in NYC, Mainnet fosters real-world discussions, collaborations, and solutions that will shape the future of crypto. Attendees can look forward to hearing from 100+ in-person speakers from across the crypto and TradFi landscapes, featuring leading builders & operators including Coinbase's Brian Armstrong, Circle's Jeremy Allaire, Brad Garlinghouse of Ripple, Denelle Dixon of Stellar, EY's Paul Brody, PayPal's Jose Fernandez da Ponte, Onyx by J.P. Morgan's Tyrone Lobban, and many more. With a focus on investors, builders, leaders, & TradFi, Mainnet 2023 presents 3 days of learning, innovation, & networking with a diverse group of attendees. Come join us this fall and secure your spot before ticket prices increase! |
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Lazarus Brings Its BTC to Life |
North Korean hackers may attempt to cash out stolen bitcoin (BTC) worth more than $40 million, the Federal Bureau of Investigation (FBI) said in a statement on Tuesday. The North Korea-based Lazarus Group and APT38 were reportedly behind a series of cryptocurrency hacks earlier this year, including the $60 million theft from payment processor Alphapo and the $100 million exploit of Atomic Wallet, the FBI said. Six wallets containing a total of 1,580 bitcoin ($41 million) were identified as connected to the hacker groups, and the FBI warned cryptocurrency companies against interacting with those wallets. |
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The Takeaway: SBF's Legal Strategy |
(Michael M. Santiago/Getty Images) |
News emerged today that Sam Bankman-Fried has settled on a legal strategy ahead of his criminal trial this October, and it amounts to this:
The lawyers made me do it.
"Sam Bankman-Fried intends to argue he was acting in 'good faith' in loaning funds to FTX and Alameda executives, in setting Signal messages to auto-delete and in setting up a set of North American entities because he was following the advice of lawyers, including law firm Fenwick & West," Nikhilesh De, CoinDesk's regulatory editor, wrote Thursday.
De reports on a letter from SBF's lawyers, published Wednesday, that details this so-called "advice of counsel" strategy.
SBF is accused by federal prosecutors of "multiple schemes to defraud," including wire, commodities and securities fraud, and he faces decades in prison if found guilty.
His emerging strategy defense is certainly clever in theory, and aligns with some of the other messaging that SBF has been making since the spectacular collapse of FTX last November. The 31-year-old fallen crypto king has been presenting himself as young and hapless, too callow to have orchestrated any great evil. As he tells it, he was simply out of his depth, a creature molded by older, more experienced collaborators – like his lawyers at Fenwick & West, a mid-sized firm specializing in advising tech startups.
The question is whether this blame-the-lawyers strategy will work.
CoinDesk reached out to several defense attorneys and crypto-specialist legal minds for comment. Ira Lee Sorkin, a defense lawyer best known for advising Bernie Madoff, said the "advice of counsel" strategy was fairly common in white-collar cases and could be productive for him. The prosecutors have to show that SBF intended to defraud, so a strategy to show that he acted on outside advice, rather than independently, could be useful.
But it comes with risks for SBF's team. For one, his former lawyers at Fenwick & West could well be called upon as witnesses by the prosecution, an eventuality with an uncertain outcome.
"It can be precarious because you are putting people who have advised you in the firing line," Sorkin told CoinDesk. The judge would also have to decide whether the advice SBF was given is covered by attorney-client privilege or whether it could be fully revealed in court. Joseph Tully, a criminal defense lawyer at Tully & Weiss, thinks the "blame-the-lawyer" strategy is a good one for SBF. "[He] can't deny that he did the actual acts that constitute the crimes [but] by saying he was just following the advice of his lawyers, he can negate the 'intent' element required to prove the case against him. If an accused can negate any element in a criminal case, the whole charge falls apart," Tully told CoinDesk via email. "The only possible issue that this brings up is that he would waive his otherwise confidential communications with his lawyers and everything, or most everything, that he and his lawyers discussed would be discoverable to prosecutors."
Joseph Klayman, U.S. head of fintech, blockchain and digital assets at Linklaters, said the strategy's success or otherwise would come down to whether SBF consistently followed the advice he was given.
"In my view, it would be premature to take a view concerning the likelihood of success," she told CoinDesk in an email response. "With this type of defense, I would expect that this would involve a highly facts-and-circumstances-specific inquiry, including with respect to the substance and form of the advice allegedly given and whether any such alleged legal advice was followed without variation and in good faith."
Tully agrees with Klayman. "If the lawyers did look over everything and gave him this advice, [SBF's] fine. However, if there's anything in the communications that says otherwise, he's sunk," he said.
It's notable on this score that SBF has been known to disregard legal advice before, not least from numerous lawyers who've said he should remain quiet while he awaits trial.
Given the drama and scale of SBF's alleged crimes, his trial is likely to be extensively covered in both the specialist and mainstream press. If the latest news is anything to go by, we can expect the lawyers in the case to play a pivotal role, both in directing strategy and becoming part of it.
– B.T.S @btschiller ben@coindesk.com |
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Phemex, Seeking to Decentralize, Tests a New Idea From Vitalik The trading platform finds a home for users' 'souls' on the exchange Now that we've figured out, thanks to NFTs, how to digitally guarantee the provenance of an object or event, we should be able to guarantee the provenance of a human being. And the team behind Phemex, a centralized exchange that intends to partially decentralize, think they've figured out how. Continue reading here. |
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We're going big for our final 2-for-1 flash sale before Consensus 2024 registration officially opens next month.
Get two Pro passes for the price of one — just $1,198. With only 1,000 passes available, it's your last chance to save thousands on your Consensus experience. Grab your passes now and use code 2FOR1 at checkout. |
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XRP and DeFi TVL Fall Sharply