Last Week [In] Crypto: 3AC Founders Vanish, Celsius Faces Class Action Lawsuit, Binance Accused of Breaking Sanctions on Iran

Be[in]Crypto has scoured the crypto industry for the leading stories that reverberated during the last week. The stories range from the weak Reserve Risk Indicator for Bitcoin, crypto personalities rubbing shoulders with individuals from TradFi, 3AC founders going dark, Vauld about to be purchased by Nexo, and the Uniswap V3 phishing saga.

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Tough times for Bitcoin 

Bitcoin had yet another harrowing week, inundated with low prices and unfavorable stances with regulators. The network’s mining hashrates fell by 26% over the last 30 days, spelling a winter for the mining industry. Leading mining firms have been forced to lay off some staff, while others are selling their Bitcoin holdings as a coping strategy for the falling revenues.

The Bitcoin Reserve Risk Indicator fell to new lows according to the latest data from Glassnode. The indicator measures longer-term holder confidence, and current metrics suggest that the asset price could drop significantly in the near term.

The U.S. Securities and Exchange Commission (SEC) further doused the enthusiasm of the community after it delayed making a decision on the ARK 21Shares spot Bitcoin fund. The regulator extended its decision by 45 days after rejecting Grayscale’s application a few days earlier.

The bigger picture shows increasing crypto adoption

Away from low prices, crypto adoption is steadily reaching new heights. Last week, Senator Kirsten Gillibrand received over $150,000 from donations from crypto executives including Sam Bankman-Fried and Brett Harrison.

Top crypto personalities made the cut for the list of the most popular figures in finance. MicroStrategy’s CEO and Bitcoin maximalist, Michael Saylor, and Dogecoin enthusiast Elon Musk formed part of the exclusive list that respondents looked up for investment advice.

In the UK, a judge has approved legal documents to be served through Non-fungible tokens (NFTs) on the blockchain. The historic ruling came during the case between the owner of a gambling company and top crypto exchanges and will serve as a precedent regulating service of process in the UK and other common law jurisdictions.

Crypto adoption is on steroids in Indonesia, as the governor of the country’s apex bank has hailed the potential of crypto for the economy. At the top of his list was the improvement of financial inclusion, but he warned stakeholders of the salient and systemic risk it posed.

The 3AC saga

The liquidators of 3AC scored a significant win in court after the issuance of a subpoena for the embattled founders of the hedge fund. Reports indicate that the founders are not cooperating with the liquidators as they try to uncover the repositories of investors’ funds.

The industry was left dazed after a filing indicated that the founders of the hedge fund had gone into hiding. Kyle Davis and Su Zhu, founders of 3AC had ordered the company’s offices in Singapore to be vacated and employed the evasive tactics of “turning off audio and video” in a zoom call.

3AC, once a major force in the crypto ecosystem with over $3 billion worth of assets under its belt, is struggling to stay afloat. The company transferred over $25 million worth of stablecoins to KuCoin as it struggled to remain afloat.

Celsius and Vauld face steep obstacles

Troubled Celsius was slammed with a class-action lawsuit that threatened to expose the firm as one big Ponzi scheme. Part of the claims by aggrieved parties in the suit includes the fact that Celsius sold unregistered securities through the Celsius Earn Rewards. 

Taylor Goines, an Arkansas resident, noted that the company adopted the unethical strategy of using the funds of new investors to settle old investors.

Vauld, another troubled firm, announced a $70 million shortfall that it discovered in an attempt to put its house in order. Vauld filed for a moratorium that will “protect” the company from legal attacks amid reports of acquisition from Nexo.

The lawbreakers

A report from Reuters sent shudders down the spine of the industry as it alleged that Binance had been circumventing U.S. sanctions and allowed users from Iran to use the exchange. In response, Changpeng Zhao noted that his company is not a US company and out of respect for the rules, Binance halted services in Iran but conceded that it was possible for users to use VPNs to bypass the protocols.

Uniswap V3 users were the victims of a phishing attack that led to the losses of over 7,500 ETH. Harry Denley, a blockchain security expert stated that 73,399 addresses were given malicious tokens as a ploy to commit the heist.

Experts advised investors not to click on suspicious links while Uniswap’s team clarified that the breach was “totally separate from the protocol.” Phishing attacks are becoming commonplace in the industry with the fallout running into billions of dollars.