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CZ Pleads Guilty, Forced to Leave Binance, $4.3B Settlement

The biggest penalty ever in U.S. Treasury history

Author

Ryan Allis
November 22, 2023

Issue Summary: Welcome back to Coinstack, the weekly newsletter for institutional crypto investors and industry insiders. We review the top news, stats, and reports in the digital asset ecosystem for our 170k weekly subscribers. This week we cover CZ pleading guilty and paying a $4.3B Binance fine to the U.S., BTC nearing an ATH in Argentina, Tether freezing $225M USDT, Arweave’s progress, and big new venture rounds for Blast ($20M) and Panoptic ($7M).

Price performance since we began writing Coinstack in January 2021

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💵 Weekly Crypto Fundraises & Deals

Here are all the crypto fundraises we heard about this week, ranked by size…

🗞️ Crypto News Recap: The Top 5 Stories

Welcome back to This Week in Crypto… everything you need to know in one scannable format. Here are the top 5 stories of the week… 

  1. ⚖️ Binance Founder Pleads Guilty to Violating Money Laundering Rules: Changpeng Zhao will pay a $50 million fine personally as part of a $4.3B total company settlement, and step down as chief executive of the company he created, the latest blow to the crypto world since the implosion of FTX last year. This was the largest penalty in U.S. Treasury history. Binance will pay a $3.4 billion civil monetary penalty to FinCEN, the financial crimes bureau within the Treasury department. That agreement comes with a 5-year monitorship and various agreements to bone up compliance and ensure the company's complete exit from the U.S. It will also pay a $968 million fine to OFAC, the Office of Foreign Assets Control.

  1. 🚀 Bitcoin nears all-time high in Argentina after Javier Milei wins presidential election: The price of bitcoin in Argentina is reapproaching all-time highs after pro-bitcoin libertarian Javier Milei’s victory in the country’s presidential election last night.

  1. ⚖️ Tether Freezes $225M USDT Feds Say Is Linked to Human Trafficking: Crypto giant Tether, which issues the third-largest digital currency USDT, today announced that it had frozen $225 million believed to belong to a human trafficking syndicate to help the U.S. Department of Justice.

  1. ⚖️ Fidelity Joins BlackRock in Race for Ethereum ETF: Financial services giant Fidelity Investments is seeking regulatory approval to launch an exchange-traded fund (ETF) that would hold the Ethereum cryptocurrency, according to a Thursday filing with the Securities and Exchange Commission. The filing comes a day after BlackRock submitted its own Ethereum application.

  1. ⚖️ SEC files new lawsuit against Kraken for allegedly operating online trading platform without registering: The U.S. Securities and Exchange Commission on Monday sued crypto exchange Kraken over alleged securities laws violations. "Without registering with the SEC in any capacity, Kraken has simultaneously acted as a broker, dealer, exchange and clearing agency with respect to these crypto asset securities.

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💬 Tweet of the Week

Source: @jacqmelinek

📊 Key Stats of the Week

Here are the most important and interesting stats in crypto this week...

1. Avalanche has experienced impressive growth of over 131% in the past 30 days.

Source: @MessariCrypto

2. NEAR crosses 833k Daily Active Addresses, Overtaking Ethereum and its L1 Peers

Source: @OurNetwork

3. TON Boasts 20-30K DAU and >900M $TON in regular transfers

Source: @OurNetwork

4. SUI crosses $130M in TVL

Source: @OurNetwork

5. SEI achieves an average 390ms time to finality, flips ETH lifetime blocks produced in 3 months

Source: @OurNetwork

📝 Highlights from the Top Crypto Reports

Here are the top highlights from the best crypto research reports this week…

About the Author: Paul Veradittakit, is a Managing Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing into blockchain companies and cryptocurrencies. This is an excerpt from the full article, which you can find here.

Introduction

Arweave, often hailed as the "Bitcoin for Data," is not just another cryptocurrency but a paradigm shift in how we store and access information on the internet. At its core, Arweave is a permanent and decentralized web built on an open ledger. It's a game-changer in the crypto landscape, addressing the shortcomings of traditional storage methods.

Behind the scenes, Arweave utilizes blockchain-based architecture to ensure permanent data storage and censorship resistance. Data is not stored in the conventional manner but is instead woven into the fabric of the Arweave blockchain. This approach ensures that once data is uploaded, it remains accessible indefinitely. Arweave achieves this through a robust consensus mechanism, data replication, and efficient data retrieval processes.

Arweave's consensus mechanism, known as "Proof of Access," is distinct from the traditional "Proof of Work" or "Proof of Stake" mechanisms found in other cryptocurrencies. In the Arweave network, miners compete to prove their ability to retrieve stored data rather than solve complex computational puzzles or stake tokens. This novel approach enhances efficiency and reduces energy consumption.

Key Advantages

The versatility of Arweave's architecture has given rise to a multitude of exciting advantages:

Preservation of Critical Data: Arweave is preserving humanity's most important data, from historical records to scientific research, all stored permanently and securely. Libraries, archives, and institutions worldwide are embracing Arweave to safeguard knowledge for future generations.

Immutable Content Publishing: Content creators, including journalists, bloggers, and artists, are turning to Arweave to publish their work without fear of censorship. Once published on the Arweave network, content is immutable, guaranteeing that it remains accessible to readers worldwide.

Data Distribution: The distributed nature of Arweave means that content is not stored on a single server or within a specific jurisdiction. This makes it highly resilient to censorship attempts.

Tamper-Proof: Once data is written to Arweave, it cannot be altered or removed. This ensures the integrity and permanence of the content, making it ideal for hosting websites, articles, or information that you want to remain accessible over time.

Uncensorable: Due to its decentralized nature, Arweave makes it extremely challenging for any single entity, including governments or corporations, to take down or censor specific content.

Permanent Data Storage: Decentralized applications built on Arweave benefit from its permanent and immutable data storage. This is crucial for dApps that rely on trusted historical data.

Decentralized Computation: In addition to data storage, Arweave provides a decentralized computation layer that dApps can leverage, enabling fully decentralized applications.

Snapshot Storage: Arweave is used by some blockchain projects to store snapshots of their blockchains at specific points in time. These snapshots include the state of the blockchain, transaction history, and other critical data.

🎧 Top Crypto Podcasts of The Week

Here are the crypto podcasts that are worth listening to this week...

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📰 The Coinstack Newsletter:

Tracking the most important blockchain stories of the 2020s, including a decentralized internet and the creation of a new open global monetary system that works for everyone. As always, published for informational purposes only. Please do your own research. Just our opinions. Not intended as financial advice as we are not financial advisors. We may own some of the digital assets we write about as we believe strongly in the sector. Please do your own research. Published and written weekly by Ryan Allis and Mike Gavela. 

Coinstack is a news and analysis newsletter for the digital asset industry. None of the information here is a recommendation to invest in any securities or other types of investments. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All investments involve risk and may result in loss.

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