SEC targets Coinbase, Do Kwon arrested and FTX sells $95M in Mysten Labs: Hodler’s Digest, March 19-25 Keep up with the SEC’s probes into Coinbase businesses, the arrest of Terraform Labs' Do Kwon and FTX selling Mysten Labs stake. by Editorial Staff 6 min March 25, 2023 Top Stories This Week Coinbase could face SEC enforcement action for ‘potential violations of securities law’ Crypto exchange Coinbase received a Wells notice from the United States Securities and Exchange Commission (SEC) suggesting an upcoming enforcement action. According to Coinbase, the “legal threat” could potentially target its staking program, listed digital assets, wallet or Coinbase Prime services. The exchange’s chief legal officer, Paul Grewal, said the warning “comes after Coinbase provided multiple proposals to the SEC about registration over the course of months, all of which the SEC ultimately refused to respond to.” Coinbase CEO Brian Armstrong renewed calls for crypto users to “elect pro-crypto candidates” after the development.
FTX debtors agree to $95M sale of stake in Mysten Labs As bankruptcy proceedings for FTX move forward, debtors of the defunct crypto exchange have approved an agreement seeking to sell $95 million worth of its preferred stock in Mysten Labs, the company behind the Sui blockchain. Court approval is still pending, as is the potential for other bids on the stocks. In a related headline, FTX is seeking to recover $460 million of allegedly misappropriated customer funds from venture capital firm Modulo Capital, which received a sizeable investment from Alameda Research last year. The investment was reportedly directed by Sam Bankman-Fried, who faces multiple counts in federal court related to alleged fraud during his time as CEO.
Read also Features Building blocks: Gen Y can use tokens to get on the property ladder
Features How to bake your own DAO at home — With just 5 ingredients!
Do Kwon faces fraud charges from US prosecutors hours after arrest Just hours after being arrested in Montenegro, Terraform Labs CEO Do Kwon was charged with eight separate counts by United States prosecutors in New York, including commodities fraud, securities fraud, wire fraud, and conspiracy to defraud and engage in market manipulation. According to reports, Kwon is also facing criminal charges in Montenegro for allegedly forging travel documents. Prosecutors in South Korea issued an arrest warrant for Kwon in September last year, followed by a red notice listing from Interpol weeks later. The charges laid against him are in relation to his alleged role in the collapse of the $40 billion Terra Luna Classic token and TerraClassicUSD stablecoin in May 2022.
Mastercard to settle transactions for stablecoin wallet in APAC Mastercard is launching a stablecoin digital wallet integration to allow retail customers in the Asia-Pacific region to spend U.S. dollar-pegged stablecoins anywhere Mastercard is accepted. The international payment company plans to convert the USDC stablecoin into fiat and settle on its network by partnering with Australian stablecoin platform Stables. The service will be initially available for users based in Australia before expanding to Europe, the United States, the United Kingdom and most of the Asia-Pacific.
Celsius custody account holders can receive 72.5% of their crypto, says bankruptcy judge The judge overseeing the bankruptcy case for crypto lending firm Celsius Network has approved a settlement plan that allows custody account holders to get back 72.5% of their crypto assets. Holders will have 30 days to review the terms. If they opt in, the assets will be returned in two distributions — 36.25% up front and 36.25% upon plan resolution (or at end of year). The defunct platform announced in February that NovaWulf Digital Management would act as a sponsor for its restructuring plan, claiming that more than 85% of Celsius customers would recover roughly 70% of their crypto..
Winners and Losers At the end of the week, Bitcoin (BTC) is at $27,157, Ether (ETH) at $1,734 and XRP at $0.41. The total market cap is at $1.15 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Mask Network (MASK) at 24.22%, Flare (FLR) at 22.23% and XRP (XRP) at 11.89%.
The top three altcoin losers of the week are Arbitrum (ARB) at -89.76%, Immutable (IMX) at -25.82% and Toncoin (TON) at -15.12%.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Read also Features Beyond In-Game Assets: Blockchain Gaming, DAOs, Guilds, and Ragequitting
Features Green consumers want supply chain transparency via blockchain
Most Memorable Quotations
“What is happening in these months is just demonstrating that the Bitcoiners and Bitcoin maxis were right all along.”
Paolo Ardoino, chief technology officer of Tether
“It’s not crypto versus Goldman Sachs or crypto versus institutions. It’s a race to who can do crypto better.”
Oliver Linch, CEO of Bittrex
“Stablecoins will play a pivotal role in the new financial system and will be core to bridging the worlds of traditional and decentralized finance.”
Daniel Li, chief operating officer of Stables
“What the central bank digital currency is all about is surveilling Americans and controlling behavior of Americans.”
Ron DeSantis, governor of the U.S. state of Florida
“Bitcoin was designed in reaction to Lehman Brothers in the 2008 crisis. It was designed because you can’t trust central authorities.”
Pascal Gauthier, CEO of Ledger

“We are in serious risk of seeing an entire strategic technology arena slip away from US leadership.”
Jeremy Allaire, CEO of Circle
Prediction of the Week Bitcoin likely to outperform all crypto assets following banking crisis, analyst explains The banking crisis could be the spark that will kick off the next crypto bull run, in which Bitcoin is likely to outperform all other cryptos, according to Mike McGlone, senior commodity strategist at Bloomberg Intelligence.
According to McGlone, the United States Federal Reserve’s unwillingness to ease monetary policy despite the banking crisis is driving the U.S. economy into a recession. This macro environment will ultimately favor Bitcoin, which is going to outperform all other cryptocurrencies.
“The more the Bitcoin can sustain above $25,000, then the more the S&P 500 potentially pressures below 4,000, you’re going to have an indication that Bitcoin is going to take off,” McGlone pointed out. “I think Bitcoin will outperform virtually all cryptos, including Ethereum,” he concluded.
FUD of the Week US Senator Ted Cruz tries again with new bill to block CBDC U.S. Senator Ted Cruz has introduced a bill to block the Federal Reserve from launching a “direct-to-consumer” central bank digital currency as it “could be used as a financial surveillance tool by the federal government.” According to Cruz, the federal government has “no authority to unilaterally establish” the digital dollar. A similar bill was introduced by Cruz with other senators on March 30, 2022, seeking to prohibit the Fed from issuing a CBDC directly to individuals. Nearly 12 months later, the bill still hasn’t moved past the introduction phase.
Hindenburg Research reports Block short position, claiming fraud facilitation and inflated metrics A report following a two-year investigation from Hindenburg Research claims digital payments company Block has “systematically taken advantage” of its users, alleging the firm inflated its user metrics and facilitated fraud. According to the report, Block’s practices allowed users to set up fraudulent accounts, catering to many criminals who used the platform to steal funds. Block labeled the report “factually inaccurate and misleading,” declaring it intends to take legal action against the research firm.
European banks head into another weekend of uncertainty as default risks surge European banks faced another weekend of renewed fears surrounding their future, as shares of Deutsche Bank plunged on the New York Stock Exchange on March 24, after a down day on Frankfurt’s markets. Shares of the German bank were impacted by an increase in the cost of insuring against its potential default risk, with its five-year credit default swaps climbing during the week and closing at 222 basis points on Friday. Fears about European banks are not limited to Deutsche Bank. European shares of Commerzbank, Société Générale, and UBS also fell in European trading.
Best Cointelegraph Features
Best and worst countries for crypto taxes — plus crypto tax tips Resident tax expert Elias Ahonen looks at the best and worst countries in the world for crypto taxes. Where do the U.S. and U.K. rank?
Creating ‘organic’ generative art from robotic algorithms: Emily Xie, NFT Creator When creating generative art, the world just disappears for this Harvard graduate living in New York.
US enforcement agencies are turning up the heat on crypto-related crime Recent high-profile indictments by the Department of Justice and collaborative agencies suggest that the federal government intends to aggressively go after alleged crypto criminals in the United States and abroad.
Subscribe The most engaging reads in blockchain. Delivered once a week. Editorial Staff Cointelegraph Magazine writers and reporters contributed to this article. Read also Features Are CBDCs kryptonite for crypto?
by Christos Makridis 8 min April 6, 2022 Our Man In Shanghai Shanghai Man: Crypto recovers, disasters strike, and China’s crackdown moves to other sectors
by Ben Yorke 4 min July 29, 2021 Most popular Hodler's Digest Silicon Valley Bank down, USDC depegged, FTX billed $34M in Jan.: Hodler’s Digest, March 5-11
byEditorial Staff March 11, 2023 Hodler's Digest SBF to enter plea deal, Mango’s exploiter arrested, and Celsius news: Hodler’s Digest, Dec. 25-31
byEditorial Staff 5 min December 31, 2022 Features ‘Account abstraction’ supercharges Ethereum wallets: Dummies guide
byAndrew Fenton 12 min March 1, 2023 Hodler's Digest Kraken’s staking down, FTX post-bankruptcy hell and Binance news: Hodler’s Digest, Feb. 5-11
byEditorial Staff 6 min February 11, 2023 Hodler's Digest SBF bail guarantor to go public, UK crypto framework and Celsius news: Hodler’s Digest, Jan. 29 – Feb. 4
byEditorial Staff 5 min February 4, 2023

The hacker behind the $196 million exploit on lending protocol Euler Finance has returned the majority of the stolen assets, according to on-chain data.
In a transaction on March 25, the exploiter returned 51,000 Ether (ETH) worth around $88 million at the time of writing. A second transfer of 7,737 ETH was made on the same day, worth over $13 million. Previously, on March 18, the hacker sent 3,000 ETH to the protocol, worth nearly $5.4 million at the time. The exploiter still controls some of the stolen assets.
On March 13, the hacker carried out multiple transactions stealing nearly $196 million from the protocol in a flash loan attack, dubbed the largest DeFi hack of 2023 so far. Stolen assets include 8.8 million DAI, 849,000 wBTC, 85 million stETH, and 34 million USDC stablecoin.
Funds stolen from Euler Finance. Source: BlockSec.A few days after the hack, the exploiter sent an on-chain message to Euler calling for an agreement with the protocol. “We want to make this easy on all those affected. No intention of keeping what is not ours. Setting up secure communication. Let us come to an agreement,” they said.
Related: Euler attack causes locked tokens, losses in 11 DeFi protocols, including Balancer
The protocol had previously tried to negotiate with the exploiter, requesting that they return 90% of the funds they stole within 24 hours, and otherwise they would face legal action. No response was received, and 24 hours later Euler offered a $1 bounty reward for any information leading to the capture of the exploiter.
Other transactions have been made by the hacker, including a transfer of 1,000 nETH, approximately $1.65 million at the time, through sanctioned crypto mixer Tornado Cash.
According to blockchain analytics firm PeckShield, around 100 ETH was sent to a wallet address likely owned by one of the victims. An on-chain message sent by the wallet address had earlier pleaded for the attacker to return their “life savings.”

A nonfungible token (NFT) from the CryptoPunks collection worth 77 Ether (ETH) was sent to a burn address to be permanently destroyed. However, the collector’s intent was just to borrow some money against it to buy another NFT.
NFT collector Brandon Riley added CryptoPunk #685 to his collection on March 13 by paying 77 ETH, hoping to hold it for the long term.
As a seasoned investor, Riley knew the importance of procuring new NFTs right before crypto markets took off into a new bull market. As a result, he decided to borrow some money against CryptoPunk #685 by using a popular technique known as wrapping.
While going through the unfamiliar process of wrapping NFTs, Riley accidentally sent the asset to a burn address — which permanently deleted the NFT from circulation, as shown below.
Trading history of CryptoPunk $#685. Source: dappradar.com“I was told to follow the directions exactly, so I did,” explained Riley, but in the process, he ended up losing 77 ETH, which was worth $135,372.16. He explained:
“I was not wrapping this punk to sell it on Blur. It was to be my “forever punk.” The number is exact reverse of my ape. I was only wrapping it because I needed to borrow some liquidity from it.”While members of Crypto Twitter believed that the NFT collector must have had “deep pockets,” Riley contradicted the rumors by revealing that he had purchased CryptoPunk #685 through borrowed money.
“I just shouldn’t have attempted this on my own I guess,” was Riley’s takeaway from the conundrum. On the other hand, Crypto Twitter also blamed confusing user interfaces and complex instructions for the investor’s loss. As a result, the community unanimously agreed on the need to revamp the front-end processes for crypto ecosystems.
Related: Improving Bitcoin NFT marketplace infrastructure sets the stage for ecosystem growth
NFT wash trading increased by 126% in February, confirmed a CoinGecko report. The top six NFT marketplaces — Magic Eden, OpenSea, Blur, X2Y2, CryptoPunks and LooksRare. X2Y2, Blur and LooksRare — saw a rise in wash trading for the fourth straight month, with a total volume of $580 million.
NFT wash trading volume, January 2022–February 2023. Source: CoinGecko, Footprint AnalyticsAs Cointelegraph previously reported, the issue of wash trading stems from a lack of clear regulations.
Magazine: 4 out of 10 NFT sales are fake: Learn to spot the signs of wash trading

The banking crisis could be the spark that will kick off the next crypto bull run, in which Bitcoin (BTC) is likely to outperform all other cryptos, according to Mike McGlone, the senior commodity strategist at Bloomberg Intelligence.
Following the collapse of major banks such as Silicon Valley Bank and Credit Suisse, confidence in traditional financial institutions is being shaken and Bitcoin is becoming more attractive as a “hedge against banking risk,” thinks McGlone.
According to McGlone, the United States Federal Reserve's unwillingness to ease monetary policy despite the banking crisis is driving the U.S. economy into a recession.
This macro environment will ultimately favor Bitcoin, which is going to outperform all other cryptocurrencies.
“The more the Bitcoin can sustain above $25,000, then the more the S&P 500 potentially pressures below 4,000, you're going to have an indication that Bitcoin is going to take off,” McGlone pointed out. “I think Bitcoin will outperform virtually all cryptos, including Ethereum,” he concluded.
To find out how the banking meltdown is sparking the next Bitcoin bull market, watch the full interview on our YouTube channel, and don’t forget to subscribe!