This is Microsoft’s largest investment in the area to date.
Microsoft is set to launch a $3.2-billion investment in the United Kingdom for artificial intelligence (AI) infrastructure and training.
This marks the company’s largest U.K.
.@Microsoft is committed as a company to ensuring that the UK as a country has world-leading #AI infrastructure, easy access to the skills people need, and broad protections for the safety and security.https://t.co/qtTrjH9IS9
Brad Smith, vice chair and president of Microsoft, described the investment in a company blog post.
“This infrastructure investment will help to meet the exploding demand for efficient, scalable and sustainable AI specific compute power and the needs of the private and public sector waiting to take advantage of the latest cloud and AI breakthroughs.”
Artificial intelligence training
Microsoft will also make a multimillion-dollar investment to “train one million people with the skills they need to build and work with AI.”
This includes initial training for unskilled workers hoping to break into the field of AI.
Smith said the training will include “the first Professional Certificate on Generative AI.” It will also offer follow-on and advanced training for industry professionals.
Prospective trainers must complete Microsoft’s “Responsible Generative AI” training to ensure they’re “adhering to the ethics and principles of developing AI solutions responsibly,” wrote Smith.
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In a shocking development to the international Bitcoin community, Binance founder and CEO Changpeng Zhao is stepping down from his role as part of a guilty plea on criminal and civil charges in the US.
Binance, the largest digital asset exchange in the world by volume, has seen its very future come into question as the result of a legal battle with the US Department of Justice (DoJ). Founder and CEO Changpeng Zhao, also known as CZ, pled guilty on September 21 to money laundering violations, and agreed to both resign from his post and pay a $50M fine, which may be reduced. Binance will also pay a whopping $4.3 billion fine, and this penalty seems fairly set in stone. This agreement comes at the end of a monthslong legal battle in which the DoJ charged him of several serious violations: Not only facilitating transactions with sanctioned groups such as Russian mercenaries fighting in Ukraine, but even encouraging users to cover their tracks on potential violating money-laundering statutes.
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Since its founding in 2017, Binance has steadily grown over the years to become the world’s most popular Bitcoin exchange. The firm was initially founded in China, but has moved locations several times over the years, even to different continents, and currently does not have an official headquarters. It has grown in notoriety despite requiring a different platform, Binance.US, to offer services of any sort inside the United States, but its biggest windfalls came as it absorbed FTX customers in the wake of that exchange’s apocalyptic collapse. CZ had long been one of the industry’s biggest players, but especially since FTX fell, Binance has indisputably been the largest in the space. And now, CZ’s deal seems like a last-ditch move to keep the company operational.
In his resignation letter, published one day after he pled guilty in Seattle, CZ claimed that “Binance will be fine. I will have to deal with some pain, but we will survive. We will get through, although with some changes in structure. It might not be a bad thing when we look back in a few years’ time,” adding that he “needed a break anyway.” Publicly, he tried to present an optimistic face, expressing confidence in his employees and encouraging a smooth transition for the new head, Richard Teng. Despite this confident facade, there are still new difficulties brewing for CZ and his company.
For one, since Binance needed to spin off a subsidiary to operate inside the United States, Binance.US is not strictly covered by the initial plea agreement with the Department of Justice. Indeed, as of November 27, the Securities and Exchange Commission (SEC) is actively investigating the US branch for misuse of consumer funds and a possible backdoor that CZ could use to continue accessing Binance.US assets. Binance lawyer Matthew Laroche claimed that the company “has withered under the stress and cost of the SEC lawsuit. The average monthly value of Binance.US assets is down almost 90% and Binance.US has lost almost half of its monthly users since the SEC filed its case.”
In addition to this continued attempt to limit CZ’s potential resources, his movements are also being curtailed. Changpeng Zhao has established ties in several nations: Having been born in China, his family immigrated to Canada during his childhood and he has citizenship there. Additionally, he is a citizen of the United Arab Emirates, and resides there with his wife and children. Considering that the latter nation has no extradition treaty with the US, and that CZ has massive resources to draw on, Seattle District Court Judge Richard Jones labeled him a flight risk. As part of his bail agreement, CZ is temporarily forbidden from leaving the United States, as the government claims that a multi-billionaire with foreign citizenship, a guilty plea and a possible prison sentence would be detained “in the vast majority of cases.” In other words, the fact that he’s free from jail in the US is itself a stretch, let alone leaving the country.
Clearly, the presumption that the company’s founder and head would engage in this sort of behavior does not portend well for the business. Already one of its main competitors is seeing a major boost in the same way that Binance benefitted from FTX’s collapse: Since CZ announced his resignation, the exchange Coinbase has seen a stock price growth of around 20% in five days. This boost for Coinbase comes on top of a very profitable year, as the company’s stock valuation overall has jumped nearly 90% in the last six months. Coinbase is itself even engaged in a legal battle with the federal government, but evidently it has been faring better in this respect.
Still, despite all these setbacks, the company is looking forward. New CEO Richard Teng told the press that he has a “robust timeline” for moving forward with company compliance. Stressing that “Binance is a six year old company—it’s a relatively young company by any measure,” he claimed that he intends to direct a change from the “disruptor” attitude of many tech startups and situate the firm into the world of traditional finance. A former banking regulator, Teng hopes to bring this moderating experience into the future for Binance. Additionally, even though other firms may stand to benefit from their competitors’ failure, a sense of solidarity does exist: Former BitMEX CEO Arthur Hayes called the treatment of CZ “absurd” compared to other money-laundering violators like former Goldman Sachs CEO Lloyd Blankfein, and questioned what these developments could mean for all digital asset exchanges.
Stepping away from Coinbase itself, one must take into account how Bitcoin as a whole has been taking these developments. Which is to say, it’s been fine: The price rally that began in October has continued unabated. Comparing this to the five-alarm fire that took place when FTX collapsed, it’s easy to see how the industry has matured: Commentators have taken notice of the general confidence that Bitcoin is here to stay. Several of the biggest crashes in Bitcoin’s history have coincided with the downfall of major exchanges, but headlines are full of general optimism and Bitcoin’s rally hasn’t even faltered. The state of things in 2023 seems clear: Although individual businesses may rise and fall, Bitcoin has achieved enough adoption and notoriety that it’ll take more than one business to seriously harm it. Binance may very well bounce back from setbacks like this, and if it does, there will be a bustling industry waiting for it.
Botanix Labs has officially launched the first-ever fully decentralized Ethereum Virtual Machine (EVM) equivalent Layer 2 on Bitcoin, according to a press release sent to Bitcoin Magazine. This represents over a year of dedicated research and development by the team, with a focus on enhancing user experience.
"We want to make it as easy as possible to start building on Bitcoin," said Willem Schroe, the Founder and CEO of Botanix. The initiative stems from the team's ambition to propel Bitcoin beyond its status as the pinnacle of digital currency and position it as the cornerstone of a novel decentralized financial ecosystem.
At the core of this initiative is Spiderchain, a decentralized network of multisigs empowering anyone to operate a full Botanix node and participate in the network. Introducing forward security, a concept derived from encryption systems, Spiderchain facilitates low-cost, swift transactions for Bitcoin deployments.
The innovative aspect of Botanix's Spiderchain is its seamless compatibility with Ethereum's EVM smart contracts. This compatibility enables developers to effortlessly replicate and deploy any EVM smart contract onto the Botanix testnet using Bitcoin.
Casa's co-founder & CTO Jameson Lopp, in his analysis of the Spiderchain's whitepaper, highlighted its implementation on Bitcoin without necessitating any protocol alterations at the base layer. “While there are a variety of proposals being discussed for enhancing Bitcoin's Layer 2 capabilities…one distinction with spiderchains is that they can be implemented on Bitcoin today without any protocol changes to the base layer,” he said.
Botanix Labs is now forging ahead to incubate the first-ever Bitcoin-enabled DeFi and NFT ecosystem. The testnet encompasses a Signet Bitcoin faucet, a bridge, and AvocadoSwap, akin to PancakeSwap, facilitating token swaps.
Moreover, Botanix is launching the "Botanix Testnet Accelerator," inviting 10 startups for enhanced BD support, co-marketing, and development resources ahead of the mainnet launch slated for early next year. Selection criteria encompass the product's development, transaction activity, and business potential.
The Botanix testnet is available for trial, inviting feedback from users at here.
FutureBit, a renowned innovator in consumer-centric Bitcoin products, today announced the Apollo II, a revolutionary personal home mining device. This new launch marks a significant stride in FutureBit's journey to introduce efficient, potent, and user-friendly mining products for household use. The Apollo II is a fusion of the latest 5nm ASIC technology and a modern, intuitive design, establishing a new benchmark in the personal Bitcoin mining industry.
Accompanying the Apollo II is the newly enhanced Apollo OS 2.0, featuring an integrated personal mining pool within the device itself. This innovation allows individuals, regardless of their technical expertise, to easily engage in solo mining directly to their Bitcoin node, offering a realistic opportunity to mine a complete Bitcoin block. This feature is particularly significant as it aids in the expansion of network decentralization, which is currently dominated by centralized mining pools.
John Stefanopoulos, the founder of FutureBit, emphasized the company's mission, stating, “Our goal is to return Bitcoin to a state where individual users have power over the Bitcoin network and not centralized farms and pools. This can only be accomplished by hardware that combines powerful ASIC hardware and a full Bitcoin node and getting hardware like the Apollo II out to millions of Bitcoin users.”
The Apollo II symbolizes FutureBit's dedication to decentralizing Bitcoin mining and making it accessible to a wider audience while empowering individual users in the Bitcoin network.
For more information on Apollo II and FutureBit, visit their website here.
OQC is also launching what it calls “the world’s first enterprise ready quantum computing platform.”
Oxford University physics spinout Oxford Quantum Circuits (OQC) recently announced the launch of Toshiko, a 32-qubit quantum computing services platform, alongside a $100-million Series B funding round led by Japan’s SBI Group’s investment arm.
The company claims that Toshiko is the “world’s first enterprise ready quantum computing platform.”
Great question! We are out of the lab and have deployed in colocation data centres, + there are multiple OQC Toshiko's to serve enterprise data needs. We’ve detailed what makes our offering so unique in our whitepaper, which you can access here.https://t.co/lXBSOZcRiH
OQC is working in partnership with Equinix, Nvidia, Amazon Web Service and McKinsey to “bring quantum out of the lab” and pave the way for “quantum advantage.”
Quantum advantage is a point of technological refinement at which a quantum computer is capable of solving a problem that no traditional binary computer could solve within a feasible amount of time.
There have been numerous claims of quantum advantage in the past decade, most notably by both Google and IBM, but, as of now, there is no industry-wide consensus.
While most quantum computing systems are still considered experimental, the onset of hybrid and cloud-based classical/quantum systems and the arrival of the industry’s first on-site commercial quantum platforms have led the sector to focus on enterprise solutions.
Tim Costa, director of HPC and quantum at Nvidia, said in a press release:
“Addressing the grand challenges of tomorrow requires the seamless integration of quantum with the GPU-accelerated supercomputing of today. By combining OQC Toshiko with the NVIDIA GH200 Grace Hopper Superchip through NVIDIA CUDA Quantum, a platform for integrated quantum-classical computing, OQC can better empower businesses and researchers to make breakthroughs across industries and in critical scientific domains.”
OQC is also announcing the launch of a $100-million Series B round. The fund raise will be led by Japan’s SBI Investments and will be joined by Oxford Science Enterprises (OSE), University of Tokyo Edge Capital Partners (UTEC), Lansdowne Partners, and OTIF.
The company previously raised approximately $43 million in Series A funding. According to OQC, both its Series A and Series B funding rounds represented the largest respective quantum computing startup funding rounds in United Kingdom history.
Traditionally, creating an n-of-n multisig using CHECKMULTISIG means you’ll publish a proportional number of signatures and public keys on the blockchain to signers in the transaction. This approach not only reveals the total number of participants in the transaction, but also incurs progressively higher transaction fees as the number of signers grow. MuSig, on the other hand, allows a group of users to collectively generate a single signature and public key to validate a transaction, which enhances privacy and lowers the transaction costs for all the signers involved.
When MuSig was initially introduced in 2018, its main shortcoming compared to CHECKMULTISIG was user experience, specifically the requirement for three rounds of interactive communication between signers. With the introduction of MuSig2 (BIP 327) in 2020, as the successor to the 2018 MuSig (also called MuSig1), we made significant progress in non-interactive signing, bringing us a much more desired experience.
How it Works
Mirroring the functionality of its predecessor, MuSig2 reduces the required communication rounds from three to two. The wallet setup for MuSig2 begins by collecting all of the participants’ extended public keys (xpubs), and the construction of descriptors by each of the wallets, all of which is consistent with existing multisig practices.
The MuSig2 signing phase then includes:
First-Round Message: During the wallet setup, nonces are generated, added to the Partially Signed Bitcoin Transactions (PSBTs), and shared amongst the other signers.
Second-Round Message: The nonces received are used to create a partial signature and are sent back to each of the other signers.
An alternative to having each signer directly communicate their nonce and partial signature to every other signer is to introduce a third-party coordinator to streamline the communication process.
In the signing process, each signer's nonce is composed of two elliptic curve points. These points are transmitted to other signers through the Partially Signed Bitcoin Transactions (PSBTs). These nonces require careful handling for accuracy and integrity in the process, but secure storage is not necessary since they are not confidential information. If all the individuals partial signatures are valid, then the produced Schnorr signatures are valid.
Next Steps for Implementation
Last month, Andy Chow put forward two BIP drafts, MuSig2 PSBTs and MuSig2 Descriptors, which are a necessary step in MuSig2 adoption and wallet integration. The first BIP adds fields for the nonces, public keys, and partial signatures in the PSBTs, and the second BIP provides a method for describing transaction outputs that are controlled by a MuSig2 wallet. Together, these BIPs and specifications are all we need for integration of MuSig2 wallets!
Many wallet developers and collaborative custody solutions have long requested this standardization of the MuSig2 protocol. Now, with the formalized BIPs in place, it's in the community's hands to review, give feedback, and help raise awareness. At Blockstream, we look forward to participating in the public discussions and letting the formal BIP review process take place.
This is a guest post by Kiara Bickers. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Hong Kong clients will be able to purchase Bitcoin and Ethereum in their personal accounts.
Interactive Brokers, one of the largest brokerage firms in the world, has opened crypto trading for retail clients in Hong Kong.
According to the Nov28 announcement, the service is offered in conjunction with OSL, one of the first crypto exchanges to receive a Virtual Asset Service Provider (VASP) in Hong Kong. "Interactive Brokers' retail investors in Hong Kong now have immediate access to digital asset trading through a single unified platform powered by OSL," developers wrote.
Per its website, Hong Kong clients of Interactive Brokers can hold Bitcoin (BTC) or Ether (ETH) in their personal accounts alongside stocks, derivatives, commodities, forex, and other assets. Each trade is charged a commission equal to 0.20% to 0.30% of the transaction value.
Last week, Cointelegraph reported that Interactive Brokers had received a license for retail virtual asset trading in Hong Kong. However, the license only grants the firm to broker trades of Bitcoin and Ethereum at the moment.
On Novembe 14, BC Technology Group, owned of the OSL exchange, announced it had received a $90 million equity investment from blockchain firm BGX. The firm had previously considered selling the OSL exchange for $1 billion Hong Kong dollars, or $128 million.
Although Hong Kong was one of the first jurisdictions to issue licenses for cryptocurrency exchanges, momentum has been somewhat stifled by a series of exchange scandals. In September, JPEX, one of the region's largest crypto exchanges, collapsed, leading to 66 arrests and an estimated 1.6 billion Hong Kong dollars ($205 million) in losses. On Nov 25, Hounax, another unlicensed crypto exchange in Hong Kong, reportedly scammed 145 residents out of 148 million HKD ($18.9 million) through an alleged Ponzi scheme.
Bitcoin is witnessing profit-booking near $38,000, but the correction is likely to be shallow as lower levels are likely to attract buyers.
Bitcoin (BTC) has started the week on a negative note. The failure of the bulls to pierce and sustain above the $38,000 resistance has given a small window of opportunity for the bears to try and make a comeback. Strong selling has pulled the price below $37,000 on Nov. 27.
However, lower levels are likely to attract buyers as the bulls will want to maintain the momentum going into the final month of the year. The bears are likely to have other plans as they will attempt to deepen the correction. That could boost volatility in the last few days of November as both the bulls and the bears try for a monthly closing in their favor.
While near-term uncertainty remains, Rich Dad Poor Dad author Robert Kiyosaki reiterated his long-term bullish view on Bitcoin, gold and silver in a X (formerly Twitter) post on Nov. 26. He cautioned investors to get out of fiat money, calling it a “FAKE money system.”
Will Bitcoin and altcoins bounce off their respective strong support levels, or will the bears prevail? Let’s analyze the charts to find out.
S&P 500 Index price analysis
The S&P 500 Index (SPX) continued its northward march higher after skyrocketing above the downtrend line. This indicates strong demand at higher levels.
The rally of the past few days has pushed the relative strength index (RSI) into the overbought zone, indicating that a minor correction or consolidation is possible in the near term. The 20-day exponential moving average (4,448) is the crucial level to watch out for on the downside.
If the price turns up from this level, it will suggest that the sentiment remains bullish and traders view dips as a buying opportunity. That enhances the prospects of a break above 4,650.
Conversely, a fall below the 20-day EMA will indicate that the bulls are losing their grip. The index may then slump to the 50-day simple moving average (4,346).
U.S. Dollar Index price analysis
The U.S. Dollar Index (DXY) attempted a recovery from the 50% Fibonacci retracement level of 103.46 on Nov. 21, but the bears were in no mood to relent.
Sellers stalled the relief rally at 104.21 on Nov. 22 and are trying to sink the price toward the 61.8% Fibonacci retracement level of 102.55. The downsloping 20-day EMA (104.54) and the RSI near the oversold zone indicate that bears are in command.
The first sign of strength will be a break and close above the 20-day EMA. Such a move will suggest that the correction may be over. The index may then attempt a rally toward the stiff resistance at 106.
Bitcoin price analysis
Bitcoin’s price action of the past few days is forming an ascending triangle pattern, which will complete on a break and close above $38,000.
The upsloping moving averages and the RSI in the positive territory indicate that the path of least resistance is to the upside. If the $38,000 resistance is scaled, the BTC/USDT pair may climb to $40,000. This level may again act as a roadblock, but if cleared, the pair may rise to the pattern target of $41,160.
The bears will have to pull the price below the uptrend line to invalidate the bullish setup. That may open the doors for a fall to $34,800. If the price rebounds off this level, it will suggest a range-bound action between $34,800 and $38,000. The bears will gain the upper hand on a break and close below $34,800.
Ether price analysis
Ether (ETH) surged close to the overhead resistance of $2,137 on Nov. 24, but the bulls could not overcome this barrier. That may have led to profit-booking, as seen from the long wick on the day’s candlestick.
The bears are trying to tug the price below the 20-day EMA ($1,998). If they can pull it off, the ETH/USDT pair may fall to $1,904. A break below this support will complete a double-top pattern. This reversal setup could start a deeper correction to the 50-day SMA ($1,834).
Instead, if the price snaps back from the 20-day EMA, it will suggest that lower levels continue to attract buyers. The pair may then climb to the overhead resistance zone between $2,137 and $2,200. Buyers will have to ascend this zone to complete a large ascending triangle pattern.
BNB price analysis
BNB’s (BNB) rejection at the 20-day EMA ($237) on Nov. 23 indicates that the bears are trying to flip the level into resistance.
The bears maintained their selling pressure and have pulled the price below the 50-day SMA ($229). The BNB/USDT pair could next slide to the solid support at $223 and below it to $219. Buyers are likely to defend this zone with vigor.
On the upside, the bulls will have to push and sustain the price above $240 to suggest that the selling pressure is reducing. That may start a rally to $255 and later to the major resistance at $265.
XRP price analysis
XRP (XRP) bounced off the 50-day SMA ($0.58) on Nov. 22 but hit a wall at the 20-day EMA ($0.61). This suggests that the bears are trying to flip the 20-day EMA into resistance.
Sellers will try to sink the price below the 50-day SMA and challenge the vital support at $0.56. If this level is breached, it will suggest that bears are back in command. The XRP/USDT pair may then gradually collapse to $0.46.
On the contrary, if the price turns up from the current level or $0.56 and rises above the 20-day EMA, it will indicate that the pair may continue to oscillate inside the large range between $0.56 and $0.74.
Solana price analysis
Solana (SOL) turned down from the immediate resistance at $59 on Nov. 26, indicating that the bears are trying to halt the relief rallies at this level.
The bears will try to strengthen their position further by pulling the price below the 20-day EMA ($53). The SOL/USDT pair will complete a head-and-shoulders pattern if it breaks below the neckline at $51. That could start a steep correction to the 50-day SMA ($40) and thereafter to the pattern target of $34.
The bulls are likely to have other plans. They will try to arrest the decline near $51. If the bounce off this level rises above $59, it will indicate that bulls are back in the driver’s seat. The pair may then retest the local high at $68.
The ADA/USDT pair could slide to the 20-day EMA ($0.37), which is likely to attract buyers. If the price bounces off this level with vigor, it will signal that the trend remains positive and traders are buying on dips. The bulls will then make one more attempt to overcome the obstacle at $0.40. If they succeed, the pair may soar to $0.46.
Contrarily, if the 20-day EMA cracks, the pair may slump to $0.34. Buyers are expected to guard this level because if it gives way, the pair may reach the 50-day SMA ($0.32).
Dogecoin price analysis
The bears tried to yank Dogecoin (DOGE) below the 20-day EMA ($0.08) on Nov. 26, but the bulls purchased the dip as seen from the long tail on the candlestick.
The bulls pushed the price above the $0.08 resistance on Nov. 27, but the long wick on the candlestick shows solid selling at higher levels. If the price dips below the 20-day EMA, the DOGE/USDT pair could slump to the 50-day SMA ($0.07).
On the contrary, if the price once again rebounds off the 20-day EMA, it will suggest demand at lower levels. The bulls will then again try to kick and sustain the price above $0.08. If they do that, the pair may pick up momentum and surge toward $0.10.
Chainlink price analysis
Chainlink (LINK) broke above the downtrend line on Nov. 26, but the bulls failed to build upon the momentum. This may have attracted selling, which pulled the price below the downtrend line on Nov. 27.
The 20-day EMA ($14) remains the key support to watch out for in the near term. If the price sinks and sustains below the 20-day EMA, it will suggest that the bears are attempting a comeback. The LINK/USDT pair could then decline to the 61.8% Fibonacci retracement level of $12.83.
On the other hand, if the price rebounds off the 20-day EMA, it will suggest that the sentiment remains positive and traders are buying on dips. That will enhance the prospects of a rally to the overhead resistance of $16.60.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Lightning is doomed. High fees from Ordinals have killed all hope of scaling Bitcoin non-custodially, there is no chance at all that people will be able to cost effectively open channels or enforce hung payments on-chain when necessary. It’s all over, pack it all up guys. Time to start shopping around and deciding whether Coinbase or Cashapp is a better platform for all of our Bitcoin needs now that we can’t afford to do it directly on-chain in a high fee environment.
It was fun while it lasted. We’ll always have the pixelated dick pics on the Lightning art site, the Lightning torch meme where everyone was scared to send it to people in countries the state told us is full of nothing but bad people, we’ll still have the zapping sats from custodial account to custodial account. Into the era of walled gardens we go!
If you took any of that seriously on any level go look at yourself in the mirror, and then give yourself a good hard slap in the face.
Clearing The Gaslighting Fumes
The original Lightning Network whitepaper specifically defined in the conclusion to the paper that for 7 billion people to be able to open two channels a year Bitcoin would require 133 MB blocks.
There is an entire section of the whitepaper called "Risks" (Section 9), that spells out all of the major problems people think means Lightning is "doooooooooomed" because of high fees. The first section of the paper discusses timelock windows. "Improper Timelocks." This is essentially the dynamic of fee rates versus confirmation time that has become a large concern lately. When you route a payment over the network, you define a success path based on a hashlock preimage, and a clawback path based on the refund timelock window. If fees get higher, that timelock window needs to be longer to guarantee that a preimage spend (the transaction succeeded) doesn't fail to confirm before a refund transaction becomes spendable.
I.e. if you have to confirm a successful payment on-chain the timelock on the refund path has to be long enough that you can confirm the successful payment path before your channel counterparty can claim the funds through the refund path. How long that timelock window has to be increases the higher feerates get, because the transaction fee decided ahead of time for pre-signed channel closure transactions can be too low to confirm as fast as you expected when you signed them.
Many people are freaking out and losing their shit over this dynamic as if it is some new realization, and it spells the doom of the Lightning Network. This was literally described as a risk in the original whitepaper specifying the first version of the Lightning protocol. It explicitly even described the opportunity cost tradeoff from an economic point of view: "There is a trade-off between longer timelocks and the time-value of money."
The next section is called "Forced Expiration Spam." It describes the general concept of the Flood and Loot Attack. An adversary opening a large number of channels and closing them all at once on-chain, specifically to take advantage of the fact that if the feerates got too high refund transactions could have a chance at double-spending success path transactions if something needed to be enforced on-chain. If you have a bunch of channels open with payments in mid-flight, and you close them all at once and drive fees up high enough, then every channel counterparty who has to confirm a successful payment on-chain could find themselves in a doublespend race if the fees are driven up high enough to let the timemlock transaction become valid before the successful one with the preimage is confirmed.
If you have enough channels open, and drive fees up high enough, you can profit from this. It was literally described in the whitepaper as an architectural concern. Depending on which version of the paper you count, this class of attack was described in 2015-2016. It wasn't formally modeled and introduced into the news cycle of this space until 2020.
The whitepaper described data loss, the situation of losing the pre-signed closure transactions and penalty keys for old states that would allow a malicious channel counterparty to steal your funds if they were aware of this. It brought up the situation of being incapable of broadcasting a penalty transaction, and the potential for watchtowers to solve this as a third party being paid to watch the blockchain and submit those transactions on your behalf. It literally described miners censoring channel penalty transactions as a risk, and suggested miner anonymity (and implicitly decentralization) as the mitigation for that risk.
But this is all new information. The Lightning Network is doomed to failure because no one saw any of these problems coming!!!!
The Blockchain You Idiots
Well, I guess we can just admit historical context is lost. Reason is lost. Logic and rationality is lost. We are in a reality where we are going to pretend like historical warnings don't exist, no one ever pointed out obvious problems destined to manifest in the future, and this is all just totally uncharted territory where no one ever thought about how things would play out.
What is the title of Section 9.6? Oh: Inability to Make Necessary Soft-Forks.
The original whitepaper explicitly spelled out the inability to coordinate soft forks as a risk to the success of the Lightning Network. Are you surprised? Have you never read any of this before? Personally I'm getting deja vu.
I remember years and years ago, a large contingent of Bitcoiners screaming that the blockchain itself was hitting scaling limits, that it would fail unless we fundamentally altered the entire nature of the decentralization trade offs of the system. Blockchains were fundamentally useless if people couldn't directly submit all of their transactions on-chain and have them cost effectively confirmed.
The entire foundation of the Bitcoin ecosystem was rocked to its core when people started arguing over the cost effectiveness of the blockchain at scale, that was literally the entire cause of the blocksize war. What was at the core of this disruption? People's expectations of what role the blockchain would play in the puzzle of Bitcoin's evolving ecosystem. Everyone is going to buy their coffee on-chain at a cost-effective feerate, or Bitcoin is a total failure.
Everyone with that mentality just completely misjudged the entire situation. They were trying to stuff a square peg into a round hole. It's the exact same thing with Lighting.
Square Peg, Round Hole
The blockchain was sorely misjudged, it was really just a place to put channel openings and closings, not a place to buy your coffee. There's no real chance that people misjudged Lightning though, that is surely the place to put your coffee payments. No one could possibly have misjudged that this time. See how silly that sounds when you put it like that in proper context? Lightning has issues with enforcing payments on-chain; if the value of the payment is less than the fee to submit the transaction to the chain, this is a problem. It makes no economic sense to try to enforce it on-chain. This was a very well known problem. It's essentially the exact same problem of low value payments happening directly on-chain, except in the optimistic case things just work because people cooperate off-chain. But when they don't cooperate, there are problems.
This problem was so well known that there was actually a good deal of debate years ago about a solution to it with different trade-offs, packetized payments. If an HTLC is too small to be able to enforce trustlessly on-chain, you can stream a payment sat by sat (or larger chunks of sats) in a trusted manner, and stop streaming and pick another route if someone in a hop decides they're going to steal a sat from you. The idea is that while it is a trusted payment routing mechanism, you can only lose a few sats to an attacker who steals a tiny piece of your payment, and if someone steals from you while routing a payment you just never route through those nodes again. The citation above is from 2019, but this idea was discussed earlier than that.
Lightning has a problem! (And also a solution to that problem most people reading probably never heard about). All of these issues people seem to think means the sky is falling are issues well understood from the very beginning of Lightning. This begs a question: were we wrong again?
Not wrong in the sense that Lightning is a doomed dead end, but wrong in the sense that Lightning is not going to be used long term in the way we thought it was initially, just like the blockchain itself. We already see Lightning dominated by custodial applications, and people are working on deploying things specifically designed to sit on top of Lighting. Chaumian ecash mints, Uncle Jim setups like LNBits where people are given a custodial account on someone's Lightning node. We even have proposals like Ark being built out in the proof-of-concept phase on Liquid, which can interact atomically with Lightning payments.
What if Lightning isn't going to be the killer protocol that consumers directly interact with in order to make their payments online? What if, just like the blockchain itself, it simply winds up being a piece of a settlement layer that other things are built on top of?
Would that be the end of the world? Would that be a failure of Lightning? I would argue absolutely not. From the very beginning of development on Lightning it was incredibly clear what its scaling limitation would be. The whitepaper literally brings up the issue of not getting support for softforks needed in the future as a limitation of Lightning's potential scalability.
Lightning is proving definitively right now that it can function as a layer for interactivity between different custodians, and that it works smoothly and very effectively for that. There is no reason at all Lightning cannot function as a similar connectivity layer for other layer twos that have superior trust models than a explicit custodian. If channels are not something individuals can cost effectively have for their daily spending activity, that doesn't mean they are not cost effective for LSPs who run new protocols in addition to Lightning to link between each other, allowing their users to interact with each other. Arks, Statechains, and whatever new ideas people develop over the coming years.
It can be a translator layer for other systems that scale the end users ability to onboard and transact on those layers, exactly like we wound up realizing the blockchain would have to be. And there is nothing wrong with that.
This is a guest post by Shinobi. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Paradigm, one of Blast’s seed investors, criticized the protocol’s decision to launch a bridge before its L-2 and withdraw capability.
Crypto venture capital firm Paradigm criticized Blast’s protocol marketing strategy, claiming the startup “crossed lines in both messaging and execution." The VC firm is a seed investor in Blast.
The head of research at Paradigm, Dan Robinson, shared a statement on X (formerly Twitter) expressing disagreement about Blast’s decision to launch a bridge before its layer-2 network and to not allow withdrawals for three months. “We think it sets a bad precedent for other projects,” Robinson wrote, adding that “much of the marketing cheapens the work of a serious team.”
There are a lot of components of Blast that I’m excited about and would be interested in engaging with people on. That said, we at Paradigm think the announcement this week crossed lines in both messaging and execution. For example, we don’t agree with the decision to launch the…
Paradigm has been in touch with Blast about its concerns, Robinson noted, emphasizing that “there are still many points of disagreement” between the companies.
Despite the criticism, the head of research also acknowledged that Blast’s team is formed by “world-class builders,” with demonstrated “ability to build great products.” Blast's governance structure is unclear, as is Paradigm's role in the startup's decision-making process. According to Robinson:
"We invest in strong, independent founders who we don’t always agree with. But we understand that people may look to us to set an example on best practices in crypto. We don’t endorse these kinds of tactics and take our responsibility in the ecosystem seriously."
In addition, Watts noted that Blast "is just a 3/5 multisig”, meaning that if an attacker gains access to three out of five team members' keys, they can steal all cryptocurrency deposited into Blast's contracts.
Watts also claimed that Blast “is not a layer 2,” but simply “accepts funds from users” and “stakes users’ funds into protocols like LIDO” without using any bridges or testnet. Additionally, he criticized the lack of withdrawal functionality. To withdraw in the future, users must trust that developers will add withdrawal functionality in the future.
In spite of the controversy surrounding its launch, Blast has amassed over $555 million in total value locked (TVL) since its launch a few days ago. The protocol claims to be “the only Ethereum L2 with native yield for ETH and stablecoins.” An airdrop is scheduled for January.
Bitcoin is facing resistance at $38,000, but UNI, IMX, VET and ALGO may extend their up-move in the short term.
Bitcoin (BTC) rose above $38,000 on Nov. 24, but the bulls could not build upon this strength. This suggests hesitation to buy at higher levels. Bitcoin is on track to form a Doji candlestick pattern on the weekly chart for the second consecutive week. This signals indecision among the bulls and the bears about the next directional move.
With Bitcoin maintaining near its 18-month high, BitMEX co-founder Arthur Hayes retained his bullish stance. In a X (formerly Twitter) post, Hayes said that the United States dollar liquidity was increasing, which is likely to push Bitcoin higher.
Another bullish projection came from PlanB, creator of the stock-to-flow family of BTC price models, who said in a post on X that Bitcoin may not stay at the current levels for long. PlanB expects Bitcoin to maintain an average price of at least $100,000 between 2024 and 2028.
Analysts have turned increasingly bullish in the past few days, but traders should exercise caution because every uptrend is bound to have corrections.
Could Bitcoin soar above $38,000 or start a corrective phase? Let’s look at the charts of the top 5 cryptocurrencies that may outperform in the near term.
Bitcoin price analysis
Bitcoin’s march higher has hit a wall near $37,980 but the bulls are not hurrying to close their positions. This shows that traders expect the uptrend to progress further.
The immediate support on the downside is the 20-day exponential moving average ($36,546). If the price snaps back from this support, it will signal that every minor dip is being purchased. That will increase the possibility of a break above $37,980.
If that happens, the BTC/USDT pair could rally to $40,000. This level may pose a strong hurdle to the bulls, but if buyers flip the $38,000 level into support on the downside, the rally could stretch to $48,000.
Conversely, if the price plummets below the 20-day EMA, it will indicate that traders are booking profits. The pair may then dump to $34,800.
BTC/USDT 4-hour chart. Source: TradingView
The bulls are trying to maintain the price above the moving averages but are finding it difficult to overcome the obstacle at $37,980. The relative strength index (RSI) is just above the midpoint, indicating that the bullish momentum is weakening.
If the price slips below the 50-simple moving average, the pair may plunge to the uptrend line. The bulls are expected to defend this level with vigor. On the upside, a break and close above $38,500 will indicate that bulls are in the driver’s seat.
Uniswap price analysis
Uniswap (UNI) fell below the 20-day EMA ($5.44) on Nov. 21, but the lower levels attracted aggressive buying by the bulls. That started a sharp rally on Nov. 22, which pushed the price to $6.60 on Nov. 24.
UNI/USDT daily chart. Source: TradingView
The up-move is facing selling near the overhead resistance of $6.70. The UNI/USDT pair has pulled back to the 38.2% Fibonacci retracement level of $5.92, and the next stop could be the 50% retracement level of $5.71.
A strong bounce off this zone will suggest that traders view the dips as a buying opportunity. That may enhance the prospects of a breakout above $6.70. Such a move will complete a double bottom pattern, which has a target objective of $9.60. The bullish momentum is likely to weaken below the 61.8% Fibonacci retracement level of $5.50.
The bulls tried to protect the 20-EMA, but the bears had other plans. They pulled the price below the 20-EMA, starting a deeper correction. If the price sustains below the 20-EMA, the pair may tumble to the 50-SMA.
If the price turns up from the current level or bounces off the 50-SMA, it will suggest that lower levels are being bought. The bulls will then again try to propel the price to the overhead resistance of $6.70. If this resistance is surmounted, the pair may skyrocket to $7.80.
Immutable price analysis
Immutable (IMX) has been sustaining above the breakout level of $1.30 for the past several days, suggesting that bulls have the edge.
IMX/USDT daily chart. Source: TradingView
The price may pull back to the zone between $1.30 and the 20-day EMA ($1.20). This zone is likely to witness a tough battle between the bulls and the bears, but If the buyers prevail, the IMX/USDT pair could climb to $1.86.
Instead, if sellers tug the price below the support zone, it may trigger stops of short-term traders. That could accelerate selling and result in a sharper correction to the psychological level of $1.
The 20-EMA on the 4-hour chart has flattened out, and the RSI is just below the midpoint, indicating a possible consolidation in the near term. The first support on the downside is $1.30. If buyers maintain the price above this level, it will suggest that the $1.30 is acting as a new floor.
On the upside, a break above $1.50 will signal the resumption of the up-move. The pair may travel to $1.59 and then to $1.63. Contrary to this assumption, a fall below $1.20 could tilt the short-term advantage in favor of the bears.
Buyers propelled VeChain (VET) above the overhead resistance of $0.023 on Nov. 26 but are struggling to sustain the higher levels as seen from the long wick on the candlestick.
VET/USDT daily chart. Source: TradingView
Sellers will try to trap the aggressive bulls and pull the price to the 20-day EMA ($0.021). If the price rebounds off this level, it will suggest a positive sentiment. The bulls will then again attempt to overcome the obstacle at $0.023. If they can pull it off, the VET/USDT pair could rise to $0.027 and thereafter try to reach the pattern target of $0.031.
On the contrary, if bears sink the price below the 20-day EMA, it will indicate that the pair may remain stuck inside a large range between $0.014 and $0.023 for a while longer.
The pair has slipped back below the breakout level of $0.023, indicating that the bears have not given up and are selling at higher levels. The pair could next reach the 20-EMA, which is an important level to watch out for.
If the price rebounds off the 20-EMA, the bulls will make another attempt to drive the price above $0.023 and start the next leg of the rally to $0.027. On the other hand, a break below the 20-EMA may start a deeper correction to $0.020.
Algorand price analysis
Algorand (ALGO) reached the overhead resistance of $0.14 on Nov. 25, where the bears are expected to mount a strong defense.
ALGO/USDT daily chart. Source: TradingView
If the bulls do not give up much ground from the current level, it will suggest that traders are holding on to their positions, expecting a move higher. That increases the likelihood of a rally above the $0.14-$0.15 resistance zone. If that happens, the ALGO/USDT pair will complete a cup-and-handle pattern. This reversal setup has a pattern target of $0.20.
If bears want to prevent the up-move, they will have to drag the price below the critical support at $0.12. If this level gives way, the pair may tumble to $0.11 and then to $0.09.
The 4-hour chart shows that the pair is oscillating inside the $0.12 to $0.15 range for some time. In a range, traders usually buy near the support and sell close to the resistance. It is difficult to predict the direction of the breakout with certainty; hence, traders may consider waiting for the breakout before taking large bets.
If the price breaks above $0.15, the pair is likely to start the next leg of the up-move. The pair may first rise to $0.18 and then to $0.20. This positive view will be invalidated if the price turns down and falls below $0.12.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
According to the U.S. Sentencing Guidelines, CZ could receive a 12-18 month sentence, but the Department of Justice is willing to fight for a longer term.
A recent court filing suggests that Changpeng "CZ" Zhao's legal challenges are just beginning, despite pleading guilty to violating the United States Anti-Money Laundering requirements in a settlement with the Department of Justice.
Zhao is expected to be sentenced in February 2024. He is currently challenging the government's efforts to prevent his return to the United Arab Emirates (UAE) while awaiting sentencing with his family. In a filing from Nov. 24, however, authorities indicated that he may face a harsher punishment than initially anticipated:
"The defense claims that Mr. Zhao faces merely a “brief” sentence and has no incentive to flee. The reality is that the top-end of the Guidelines range may be as high as 18 months, and the United States is free to argue for any sentence up to the statutory maximum of ten years."
A potential lengthier sentence opposes legal experts' consensus. According to an analysis from former Securities and Exchange Commission official John Reed Stark, Zhao would possibly receive a 12–18-month sentence at a minimum-security prison under the U.S. Sentencing Guidelines. Although his legal team is likely to ask for no jail time or an alternative sentence, combining prison time with home detention and probation.
Zhao's relevance to the crypto industry may also influence his fate. Stark believes that if the "DOJ does not secure a sentence for CZ that deters future money laundering conduct in the cryptoverse (and elsewhere), then this "plea deal" could end up backfiring on DOJ."
Screenshot: Government's reply to motion for review Zhao's travel restrictions. Source: Reuters.
For the DOJ, seeking longer jail time for Zhao may not be as easy as it seems. According to Stark's analysis, the government officials would have to produce more substantial evidence implicating him in criminal activity. "Hopefully, DOJ has got something up their sleeve, or perhaps the Binance monitoring and other remedial requirements will reveal more egregious and chargeable crimes," he wrote on X (formerly Twitter).
Zhao was released under a $175 million bond that requires him to return to the U.S. 14 days before his sentencing date scheduled for Feb. 24, 2024. In his comments, Stark noted that Judge Richard A. Jones is expected to consider the government’s motion on Nov. 27, with the possibility of strengthening the bail requirements through additional bond conditions or delaying a decision.
Binance-CZ's case is stirring controversy among legal and business experts. According to Omid Malekan, author and adjunct professor at Columbia Business School, the DOJ's approach to the exchange differs significantly from what is seen in traditional finance.
“If [banks] they’d been held to the Binance Standard there’d be hundreds of managing directors in jail and less money for shareholder buybacks (or lobbying). But the bankers were smart enough to never question the game.”
On Nov. 21, Zhao reached a $4.3 billion settlement with the U.S. government for allegedly allowing individuals engaged in illicit activities to transfer funds through the exchange. He stepped down as CEO as part of the settlement.
In a recent report, California Governor Gavin Newsom emphasized the significance of preparing for the next generation of skills essential to thrive in the GenAI economy.
California Governor Gavin Newsom has stressed the importance of people staying ahead of the curve in generative artificial intelligence (GenAI) by acquiring new skills and becoming acquainted with the emerging technology.
As outlined in the report, there is a suggestion that residents of California should have access to educational and training opportunities in GenAI, noting:
"To support California’s state government workforce and prepare for the next generation of skills needed to thrive in the GenAI economy, agencies will provide trainings for state government workers to use state-approved GenAI to achieve equitable outcomes.”
It stated that this is considered essential in response to the notable employment impact indicated by recent reports on GenAI.
The report cited Goldman Sachs' forecast, indicating that GenAI is expected to affect 300 million jobs worldwide, despite the potential productivity gains expected to be achieved.
“As such, the State must lead in training and supporting workers, allowing them to participate in the AI economy and creating the demand for businesses to locate and hire here in California,” it noted.
It further stated that GenAI education initiatives should commence at higher education institutions and vocational schools.
— OECD ➡️ Better Policies for Better Lives (@OECD) July 11, 2023
The research goes on to label “high-skill, white collar jobs” as the most exposed to AI.
Furthermore, the areas showing the most progress are those areas requiring “non-routine, cognitive tasks such as information ordering, memorization, and perceptual speed.”
Cryptocurrency exchange Zipmex has announced it has suspended trading in Thailand due to ensuring it is compliant with local regulations.
Cryptocurrency exchange Zipmex has announced it is taking immediate action by suspending all digital asset trading in Thailand as part of its efforts to comply with regulations.
According to a statement issued on November 25, Zipmex has opted to temporarily halt its operations to align with regulatory requirements with the Securities and Exchange Commission (SEC) in Thailand:
“To ensure that the business operations of Zipmex Company Limited ("Company") are appropriate and compliant with the criteria set by the SEC Thailand, the company is required to temporarily suspend the trading and depositing of all types of assets, effective from November 25, 2023, at 1:00 PM onwards.”
Additionally, the statement emphasized that following the year-end, customers must directly contact the exchange if they wish to withdraw funds or assets.
“After January 31, 2024, when the company suspends withdrawals through the website and mobile application, customers are required to contact Customer Support for withdrawals,” the statement noted.
This follows a series of reported challenges for Zipmex in recent times.
On April 18, Cointelegraph reported that Zipmex had a delay in paying its customers due to an attempt to "maximize returns for customers."
The exchange requested another extension that would allow for a longer moratorium on its debt in Singapore amid the firm's liquidity issues.
Meanwhile, on January 10, Zipmex was the focus of a new probe by the Securities and Exchange Commission (SEC) of Thailand for a breach of new local rules.
On January 11, Zipmex was reportedly just given one day to admit or deny to the SEC if it had been operating as a digital asset fund manager without permission.
Binance settlement highlights banks’ and crypto firms’ ambiguous treatment, says Columbia Business School adjunct professor Omid Malekan.
Recent events surrounding the crypto exchange Binance sparked significant debate about the United States’ crackdown on crypto firms. According to Omid Malekan, adjunct professor at Columbia Business School and author, the Department of Justice’s approach in the case is very different from what is seen in traditional finance.
“People who sincerely believe that crypto is some unique enabler of bad people doing bad things don’t understand how the rest of the financial system actually works,” Malekan wrote on X (formerly Twitter), adding that companies that follow Anti-Money Laundering best practices still process large sums of illicit funds. “But that’s all considered OK because somebody did the paperwork.”
Malekan also argued that many on Wall Street would be jailed if traditional firms were given the same treatment as Binance in similar cases.
“If they’d been held to the Binance Standard there’d be hundreds of managing directors in jail and less money for shareholder buybacks (or lobbying). But the bankers were smart enough to never question the game.”
Despite criticism, Malekan believes the exchange was still “wrong to lie to its customers and wrong for not being compliant.” Binance and its co-founder, Changpeng “CZ” Zhao, recently reached a billionaire settlement with the U.S. government for allegedly allowing individuals engaged in illicit activities to move “stolen funds” through the exchange. CZ stepped down as CEO as part of the settlement.
Malekan also praised Binance’s contribution to financial inclusion over the past few years:
"It did a reasonably decent job of onboarding tens of millions of poor, brown, and otherwise underprivileged people into the financial system, something the world’s compliant financial firms have chronically failed to do."
ICIJ investigation into global money laundering
Some of the world’s largest banks allowed trillions of dollars to be laundered by criminals, according to leaked documents obtained by the International Consortium of Investigative Journalists (ICIJ).
The investigation, disclosed on Sept. 2020, analyzed over 2,100 suspicious activity reports (SARs) involving transactions worth more than $2 trillion between 1999 and 2017 that were flagged as potential money laundering or criminal activity by financial institutions’ internal compliance officers. Banks facilitating these transactions included major institutions such as the Bank of New York Mellon, Deutsche Bank, and HSBC.
The ICIJ organized more than 400 journalists from 110 news organizations in 88 countries to investigate banks potentially involved in money laundering.
BlackRock meets with SEC over Bitcoin ETF, Binance’s new era begins after settlement in the United States and Sam Bankman-Fried loses release bid.
Top Stories This Week
US officials announce $4.3B settlement with Binance, plea deal with CZ
Binance and its co-founder, Changpeng CZ Zhao, have reached a settlement over criminal and civil cases with the United States Department of Justice. CZ will plead guilty to one felony charge as part of the negotiated agreement. Attorney General Merrick Garland announced the settlement, claiming Binances policies allowed criminals involved in illicit activities to move stolen funds through the exchange. As part of the settlement, CZ announced on X (formerly Twitter) that he had stepped down as CEO and that Binances global head of regional markets, Richard Teng, will assume the position. He added he was proud to point out that U.S. officials didnt allege that Binance misappropriated funds or manipulated markets. CZ was released on bail and is battling government efforts to bar his return to the United Arab Emirates to be with his family. His sentencing is scheduled for February.
BlackRock met with SEC officials to discuss spot Bitcoin ETF
Representatives from BlackRock and Nasdaq met with the U.S. Securities and Exchange Commission (SEC) to discuss the proposed rule allowing the listing of a spot Bitcoin exchange-traded fund (ETF). BlackRock provided a presentation detailing how the firm could use an in-kind or in-cash redemption model for its iShares Bitcoin Trust. Many reports have suggested the SEC could be nearing a decision on a spot BTC ETF for listing on U.S. markets. SEC officials also met with Grayscale representatives this week to discuss the listing of a Bitcoin ETF. BlackRock is one of many firms with spot crypto ETF applications in the SEC pipeline awaiting a response, including Fidelity, WisdomTree, Invesco Galaxy, Valkyrie, VanEck and Bitwise.
Bitcoin user pays $3.1M transaction fee for 139 BTC transfer
A Bitcoin user paid $3.1 million in fees for transferring 139.42 BTC. The transaction fee is the eighth-highest in Bitcoins 14-year history. A wallet address tried transferring 139.42 BTC only to pay more than half the actual value of the transaction fee. The destination address received only 55.77 BTC. The mining pool Antpool captured the absurdly high mining fee on block 818087. This is the largest Bitcoin transaction fee ever paid in dollar terms, knocking off Paxos’s September transfer of $500,000.
SEC sues Kraken alleging its an unregistered exchange, mixes user funds
The U.S. Securities and Exchange Commission has sued Kraken, alleging it commingled customer funds and failed to register with the regulator as a securities exchange, broker, dealer and clearing agency. Additionally, the SEC alleged Krakens business practices and deficient internal controls saw the exchange commingle up to $33 billion worth of customer assets with its own. The SEC said this resulted in a significant risk of loss for its clients. In a follow-up blog post, Kraken said the SECs commingling accusations were no more than Kraken spending fees it has already earned, and the regulator doesnt allege any user funds are missing.
Appeals court rejects Sam Bankman-Frieds bid for release
Sam Bankman-Fried will stay jailed after failing to convince a United States appellate court that he should be freed while his legal team appeals his conviction. Government prosecutors accused Bankman-Fried of leaking Caroline Ellisons journals to The New York Times in July, which caused his bail to be revoked by a New York District Court. Bankman-Fried was found guilty of seven fraud and money laundering-related charges on Nov. 2. The former FTX CEO will remain behind bars while he awaits his sentencing on March 28 next year.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $37,710, Ether (ETH) is at $2,079, and XRP is at $0.62. The total market cap is at $1.43 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Blur (BLUR) at 99.25%, FTX Token (FTT) at 39.05% and KuCoin Token (KCS) at 24.82%.
The top three altcoin losers of the week are Celestia (TIA) at -19.89%, ORDI (ORDI) at -17.63% and THORChain (RUNE) at -15.53%.
We, the employees of OpenAI, have developed the best models and pushed the field to new frontiers, [but] the process through which you terminated Sam Altman […] has jeopardized all of this work and undermined our mission and company.
Enjoy sub-$40K Bitcoin PlanB stresses $100K average BTC price from 2024
Bitcoin buyers should enjoy the chance to add to their stack below $40,000, according to PlanB, pseudonymous creator of the stock-to-flow family of BTC price models. He believes Bitcoin will rise much higher than its recent 18-month highs.
Bitcoin bear market bottoms are characterized by the spot price dipping below the realized price, while bull markets begin once the spot crosses the two-year and five-month realized price levels. BTC/USD is now once again above all three realized price iterations.
Enjoy sub-$40k bitcoin … while it lasts, PlanB commented on an accompanying chart.
Asked whether the market should expect lower levels from here, PlanB would not be drawn, saying that he simply expected an average BTC price of at least $100,000 between 2024 and 2028 Bitcoins next halving cycle.
FUD of the Week
HTX to restore services within 24 hours after $30M hack
Crypto exchange HTX, formerly known as Huobi Global, resumed deposits and withdrawals within 24 hours after suffering a $30 million exploit on Nov. 22. The exploit was reported to be $13.6 million around the time of the incident, but has since increased in value. HTX’s hot wallets were compromised alongside a coordinated $86.6 million attack against the HTX Eco (HECO) Chain bridge, consisting of HTX, Tron and BitTorrent. The company has promised to fully compensate users for any losses incurred as a consequence of the hack.
CZ an unacceptable risk of flight, should stay in US: DOJ
United States prosecutors are trying to stop former Binance boss Changpeng CZ Zhao from leaving the country, expressing concern about his potential flight risk. The government requested a review and overturn of a judges decision that would allow Zhao to return to his home in the United Arab Emirates (UAE) on a $175 million bond under the condition that he returns to the U.S. two weeks before his February 2024 sentencing. In a proposed order, prosecutors wrote that Zhao presents an unacceptable risk of flight, arguing that his ties and favored status in the UAE, along with the countrys lack of an extradition treaty with the U.S., are reasons to block him from leaving the country.
KyberSwap hacker offers $4.6M bounty for return of $46M loot
The decentralized exchange KyberSwap has offered a 10% bounty reward to the hacker who stole $46 million on Nov. 22 and left a note of negotiation. The exchange wants 90% of the loot returned. The hacker made away with roughly $20 million in Wrapped Ether, $7 million in wrapped Lido-staked Ether and $4 million in Arbitrum tokens. The hacker then siphoned the loot across multiple chains, including Arbitrum, Optimism, Ethereum, Polygon and Base.
This is your brain on crypto: Substance abuse grows among crypto traders
According to some addiction experts, the high-stress atmosphere of cryptocurrency trading can provide a perfect environment for substance abuse.
Michael Saylors a fan, but Frisby says bull run needs a new guru: X Hall of Flame
Bitcoin enthusiast Dominic Frisby has a wild journey, from penning one of the first-ever Bitcoin books to plastering Bitcoin fixes this on the Bank of England.
6 Questions for Alex O’Donnell about financial journalism and the future of DeFi
