2023 dragged some of the rotten apples from the bear market, which brought negative repercussions for the public image of the crypto industry. Fortunately, the market has shifted into what some may call a proper bull market as the halving ticks closer.
This article reviews the 10 most influential tweets from the crypto community in 2023.
SEC charges Kraken for unregistered staking: Stake or steak?
United States Securities and Exchange Commission Chair Gary Gensler kicked off 2023 by suing crypto exchange Kraken in an attempt to put some pressure on the crypto industry.
The SEC charged Kraken with failing to register their crypto asset staking-as-a-service program. Kraken agreed to pay a $30 million fine and remove its staking services from the U.S. market.
Gensler provided a video explanation worthy of being a crypto meme. As if speaking to a five-year-old, he clarified he was talking about “S-T-A-K-E, not S-T-E-A-K.”
Today @SECGov charged Kraken for the unregistered offer & sale of securities thru its staking-as-a-service program.
— Gary Gensler (@GaryGensler) February 9, 2023
Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries must provide the proper disclosures & safeguards required by our laws.
The relevance of this case was that it went beyond simply Kraken and its products, as it sparked doubt among crypto users and companies surrounding the legality of staking in the United States.
While uncertainty and negative sentiment abounded amid the news, the SEC still hadn’t published clear guidelines for this kind of product for crypto-related services.
By the end of the year, the SEC upped the ante by alleging that Kraken operated as an unregistered exchange and adding that it mixed customer assets with its own. Kraken co-founder Jesse Powell expressed his disbelief, calling the SEC “masochists” who seemed not to be content with the prior $30 million fine. The lawsuit is ongoing, though there are signs of a possible SEC defeat.
Do Kwon: Catch me if you can
The fall of Luna and stablecoin TerraUSD (UST) was the catalyst for the last bear market.
The collapse of the stablecoin occurred in mid-2022, ditching retail victims around the globe and affecting many companies, such as Three Arrows, Voyager, Celsius, Digital Currency Group and many others.
Shortly after, the Republic of Korea authorities required Luna’s creator, Do Kwon, to explain what happened at Congress. The telephone rang, but the voicemail kicked in. Kwon was on the run to become the most wanted crypto fugitive in history.
As in the film Catch Me If You Can, several different crime organizations followed his trial in what seemed an impossible feat to catch him. Finally, the run was over on the 23rd of March when the Minister of Interior of Montenegro announced the arrest of Do Kwon as he was allegedly using falsified travel documents.
U PODGORICI UHAPŠEN JEDAN OD NAJTRAŽENIJIH SVJETSKIH BJEGUNACA
— Filip Adzic (@filip_adzic) March 23, 2023
Crnogrska policija lišila je slobode lice za koje se sumnja da je jedan od najtraženijih bjegunaca, južnokorejski državljanin Do Kwon, suosnivač i izvršni direktor Terraform Labs sa sjedištem u Singapuru.
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Kwon had been able to dodge authorities from South Korea, Singapur, Dubai, Interpol and several national forces from the Balcan territories. The fate of the Terraform Labs co-founder is to remain this Christmas in a cell in Montenegro, waiting for his possible extradition to the United States or South Korea; both outcomes seem dim for the Korean.
Cobie’s private encrypted tweet: the power of Crypto Twitter
Cobie is a prominent pseudonymous figure on Crypto Twitter and the broader crypto sector. His podcast UpOnly has many epic moments in crypto, such as when entrepreneur Martin Shkreli told Kwon in live streaming, “Jail is not that bad.”
Cobie connects with the sentiment of the crypto community; therefore, his tweets are heavily analyzed and influential.
On one occasion, more than $50 million was lost in liquidation as Binance’s BNB and Bitcoin prices plunged momentarily. A mediatic storm was created from a tweet from Cobie with a hash prediction.
A hash prediction is a message encrypted by SHA256 hash. The encryption should output an illegible string. Hashes are one-way functions that can be created but not reversed (without brute forcing). Therefore, this tool is perfect for proving a prediction made to the public without revealing the message. When the moment comes, the owner can decrypt it to show it to the public.
Unfortunately for Cobie, somebody was able to crack the post and spread the word. The encrypted message was “Interpol Red Notice for C.Z.” C.Z. is the diminutive of Changpeng Zhao, founder and former CEO of Binance.
AHHHHH IM HEARING THINGS
— hyuk (@hyuktrades) April 3, 2023
brb withdrawing a decent chunk just in case. pic.twitter.com/2weMwBMP7C
Hours later, former Chief Strategy Officer of Binance, Patrick Hillmann, reacted to the mediatic crisis by trying to calm the waters, although ultimately adding more fuel to the fire.
One of two things is true:
— Patrick Hillmann (@PRHillmann) April 3, 2023
1. It's bullshit
2. A law enforcement agent is illegally leaking elements of a case file through encrypted messages (ala QAnon) on Github, which is a felony and arguably a much bigger news story.
My bet is #1
Hillmann offered two explanations for the decrypted message. The second option opened the door for an open case of law enforcement against Binance.
Cobie eventually told the public what may have happened, resulting in him narrowing down his circle of trust:
This particular case demonstrated the volatility and power of Crypto Twitter over the crypto market.
Coinbase ready to confront SEC in court
The SEC was determined to be considered the most influential entity in the crypto market of the year 2023.
On the 6th of June, the SEC charged Coinbase for the unregistered sale of securities with its staking-as-a-service program. The SEC crusade against the U.S. crypto industry was on.
Coinbase knew what was coming after receiving a Wells notice months before letting them know a possible enforcement action was looming around. Coinbase argued that they often asked for clear guidelines and rules in the American crypto market. Coinbase was prepared and replied in a 40-second clip with their point of view of the matter.
The SEC may have expected an easy victory with a settlement like the Kraken case. Despite the high stakes of going to court, Brian Armstrong, co-founder and CEO of Coinbase, decided to take the bull by the horns and fight the SEC charges in court.
Regarding the SEC complaint against us today, we're proud to represent the industry in court to finally get some clarity around crypto rules.
— Brian Armstrong ️ (@brian_armstrong) June 6, 2023
Remember:
1. The SEC reviewed our business and allowed us to become a public company in 2021.
2. There is no path to "come in and…
Coinbase is the most regulated crypto company in the U.S. market as it is publicly traded in the open market with its stock COIN. Armstrong’s stance is essential for the company and the entire crypto industry.
BlackRock spot Bitcoin ETF: the catalyst for the new crypto bull market
At the mid-pickle of 2023, the biggest bullish news was launched. The largest asset manager in the world, BlackRock, filed for a spot Bitcoin ETF.
Fun fact: BlackRock's record of getting ETFs approved by the SEC is 575-1. That's another reason this is so big, they don't play around. https://t.co/f7YIhGRmLf
— Eric Balchunas (@EricBalchunas) June 16, 2023
Additionally, Coinbase was selected as the custodian of the ETF midst nine days prior to the ETF announcement the SEC had charged the exchange for its staking program and Coinbase accepted the fight in court.
BlackRock has a clean record regarding ETF proposals, with virtually 99,9% of them eventually being approved. The ETF success rate of BlackRock is 575 to 1. For the investors, when BlackRock presented its spot Bitcoin ETF to the SEC, it meant the question had changed from if to when a spot Bitcoin ETF would be approved.
Retail and particularly institutional investors, who may have been hesitant to enter the crypto market directly due to compliance and regulatory impediments, could flood the crypto markets with new money. The effect would be an increase in demand, and thus, a rise in the price of Bitcoin.
Some even speculate that a similar effect occurred with gold when the first gold ETF was listed on the New York Stock Exchange, surging 250% on an 8-consecutive year bull run.
SEC surrenders the Ripple case
The SEC ignited 2020 a serious case against Ripple and its co-founder, Chris Larsen, and CEO, Brad Garlinghouse.
The Ripple versus SEC case revolves around allegations that Ripple Labs conducted an unregistered securities offering by selling its XRP cryptocurrency. The Ripple case was paramount for the crypto market as if XRP was considered a security; many other tokens could be placed into the same basket.
The case notoriously impacted Ripple and its native token. Garlinghouse was thrown temporally into the shadows and plunged the price of XRP, dethroning the legendary pole position of its currency in the top 5 cryptocurrencies by market cap.
After almost two years of fighting, Ripple gained small victories until the 19th of October, when the SEC dismissed the case against Garlinghouse and Larsen. For Stuart Alderoty, Chief Legal Officer of Ripple, this was a clear surrender of the SEC.
The SEC made a serious mistake going after Brad & Chris personally – and now, they’ve capitulated, dismissing all charges against our executives. This is not a settlement. This is a surrender by the SEC. https://t.co/TOsG64ZdEx
— Stuart Alderoty (@s_alderoty) October 19, 2023
The XRP army, as the non-sympathetic of Ripple, celebrated the latest win. It was perceived as a bullish event for the crypto markets. As per Ripple, the case had demonstrated that “XRP is not, in and of itself a security.”
Sam Bankman-Fried is sentenced to 110 years in jail
The awaited moment arrived on Nov. 3, when U.S. Attorney Damian Williams called Bankman-Fried’s crimes “a multibillion-dollar scheme designed to make him the king of crypto” and one of the biggest financial frauds in American history.
STATEMENT FROM THE TEAM OF SAM BANKMAN-FRIED —
— Teddy Schleifer (@teddyschleifer) November 3, 2023
“We respect the jury’s decision. But we are very disappointed with the result. Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him." pic.twitter.com/Q69w6nKB34
In 2022, SBF was considered one of the year’s most influential people. One year later, he is regarded as a white-collar criminal.
Recent: SBF was almost extorted for ‘protection’ in Brooklyn jail, recalls ex-inmate
Many celebrities, politicians, and investors fell into his spell using his effective altruistic philosophy and connections. SBF became the impersonator of the crypto hype. His marketing team and personal ego pushed him to place himself as the hero of the crypto industry.
The soap opera created by SBF’s uprise and downfall came to an end. Crypto needed to close this chapter once and for all to evolve. The crypto industry celebrated this closure as possibly the end of the looming ghosts from the bear market.
BlackRock spot Ethereum ETF on the go
Months after the BlackRock spot Bitcoin ETF, the world’s largest fund filed its spot Ethereum ETF.
UPDATE: BlackRock #Ethereum ETF confirmed. They just submitted a 19b-4 filing with Nasdaq pic.twitter.com/pLhuhhK7jo
— James Seyffart (@JSeyff) November 9, 2023
The BlackRock spot Ethereum ETF was in the queue with five other firms that filled the petition: VanEck, ARK 21Shares, Invesco, Grayscale and Hashdex.
The price of ETH rose immediately after the news spread out. With the new proposal of BlackRock, the intentions of dominating the future spot in the ETF crypto arena are clear.
Changpeng Zhao steps down from Binance
One of the most surprising events of the year may be Changpeng “CZ” Zhao, founder and former CEO of Binance, stepping down from the company he built from the ground up. At the moment of his exit, Binance was the most dominant cryptocurrency exchange in the world in terms of volume activity.
Binance and CZ faced strong accusations from several U.S. authorities of intentionally violating Anti-Money Laundering (AML) policies with U.S. clients. The case was opened as, according to the regulator, Binance had failed to register as a securities exchange and operated illegally in the United States.
After Binance checked the case, the big boom exploded. U.S. Justice Department settled with Binance to pay $4 billion in fines in exchange for being able to operate in the U.S. in a compliant manner. As part of the agreement, CZ would face the possibility of criminal charges as part of an investigation into “alleged money laundering, bank fraud and sanctions violations.”
Cz announced he would take an extended break and announced Richard Teng as the new global CEO of Binance.
Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself.
— CZ BNB (@cz_binance) November 21, 2023
Binance is no longer a baby. It is…
CFTC Chair Rostin Behnam said in December to CNBC that CZ will eventually end up in jail. Before, this option was challenging to fulfill as he lived in UAE, a country with no extradition deal with the USA. Now, this could happen as when he pleaded guilty, he had to enter the United States and a judge prohibited him from leaving the country.
El Salvador Bitcoin investments turn green
El Salvador has placed itself on the global map and the history of cryptocurrencies as the first country to adopt Bitcoin as legal tender. The decision of Salvadoran President Nayib Bukele shocked the world. The 9th of June 2021 will be marked forever as a milestone for any maximalist.
Bukele announced the adoption of BTC as one of the national currencies in the latest months of the last bull market. Since then, the Latin American state has purchased Bitcoin with public funds.
As the bear market kicked in, Bukele gained detractors in the national and international sphere for his irresponsible actions. Bad press and pressures from different organizations became the norm, whereas Bukele doubled down and said El Salvador would be buying one BTC per day.
The winds began to shift in favor of Bukele’s plan. El Salvador dismissed insolvency rumors by paying off the investors holding the Eurobond due on Jan. 24, 2023, a total of $800 million plus interest. Bukele roared against legacy media as, in his opinion, they were prosecuting him for creating a false narrative.
In the past year, almost every legacy international news outlet said that because of our “#Bitcoin bet”, El Salvador was going to default on its debt by January 2023 (since we had an 800 million dollar bond maturing today).
— Nayib Bukele (@nayibbukele) January 24, 2023
Literally, hundreds of articles https://t.co/rEiK7K13U4
After over two years, Bukele was finally served his most desired cold meal. In December 2023, El Salvador’s investment in Bitcoin not only recovered its original fiat value but was in profits.
El Salvador's #Bitcoin investments are in the black!
— Nayib Bukele (@nayibbukele) December 4, 2023
After literally thousands of articles and hit pieces that ridiculed our supposed losses, all of which were calculated based on #Bitcoin’s market price at the time...
With the current #Bitcoin market price, if we were to sell… pic.twitter.com/gvl2GfQMfb
2023 may have seemed like a bitter, sour year at times, but it has laid the groundwork for a bullish scenario for 2024. There’ll be many more influential tweets to follow up on.
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