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Monthly Wrap-Up — January 2023

FTX co-founder pleads ‘Not Guilty,’ Gemini faces heat from investors, while Bitcoin nears $24k 

Even though it seems like 2022 just finished yesterday, we’re already into the month of February. How time flies!

That said, the past month has been quite good for the crypto market, with the total capitalization of this space rising from $828 billion to a relative high of $ 1.18 trillion, thus signaling a growth of nearly 5%.

Here are some of the most noteworthy events from January that you need to know about.

FTX co-founder SBF Pleads ‘Not Guilty’; SEC Initiates Investigation into the exchange’s Key Clients

Sam Bankman-Fried, the former CEO of now-defunct cryptocurrency exchange FTX, has stated in a new plea (submitted to a New York federal court) that he is not guilty of fraud, money laundering, or other similar wrongdoings in connection to FTX or its sister firm Alameda Research.

At the same time, the United States Securities and Exchange Commission (SEC) is questioning investors connected with the FTX debacle to disclose their dealings with the company. They will face legal ramifications for not having conducted their due diligence before associating themselves with the exchange. That said, it is still unclear how many of FTX’s former clients are under regulatory investigation.

Gemini Puts a Hold on its ‘Earn’ Program

In the wake of the crypto contagion that affected the market for a better part of 2022, cryptocurrency exchange Gemini recently announced that it was halting customer withdrawals related to its $900 million Earn program. While the move does not impact any of the company’s other services/products, many investors have interpreted it as a sign of potential weakness. In fact, over the last 30-day stretch, the number of BTC coming into Gemini has slowed down considerably.

Nexo slapped with a $45 million fine by SEC.

The US SEC issued crypto lender Nexo with a hefty $45 million fine for not adequately registering a product called Earn Interest Product (EIP) with the regulatory body. Recent documents show that the crypto giant will pay $22.5 million of the SEC fine while the remaining sum will be settled with various state agencies.

It should also be mentioned that Nexo is facing legal issues in other countries. For example, late last month, Bulgarian officials noted that they were looking into Nexo’s operations because they believed the company indulged in activities such as money laundering, tax violations, etc.

Coinbase’s Japanese Services Halted

In light of the ongoing crypto winter, popular digital asset trading platform Coinbase revealed that it had temporarily suspended its services within Japan, at least for the foreseeable future. To elaborate, on Jan 20, the firm stopped accepting deposits while giving its customers up until Feb 16 to initiate withdrawals, failing which the remaining funds will be automatically converted to Yen and sent to the Japanese Legal Affairs Bureau.

Genesis Global Capital Files for Bankruptcy Protection

Genesis Global Capital, a crypto brokerage firm dealing primarily with institutional clients, has filed for bankruptcy protection in the wake of FTX’s implosion. Currently, the company’s executive brass is negotiating with several creditor groups to chart out a sustainable near-term plan of action (one that involves paying back investors at the earliest).

Bitcoin nears $24k while Ethereum rises by 14%

During the second half of January, the crypto market forged a remarkable recovery, with Bitcoin soaring as high as $24k on Jan. 30, its highest level in nearly four months. Similar spikes were also witnessed with other top digital currencies, including Ethereum, Cardano, Solana, etc.

Experts are now waiting to see if the flagship crypto can breach the all-important $25k resistance zone, as such a move could signal the commencement of a new bull run.

Coinbase Fined $3.6 million by Dutch Authorities.

The central bank of the Netherlands recently issued a $3.6 million fine to Coinbase for operating in the country without the required adequate registrations. To elaborate, the crypto firm failed to adhere to the European nation’s anti-money laundering and terrorist financing regulations. Coinbase has been given leeway till the first week of March to either contest the fine or appeal a part of the penalty.

South Korean Crypto Exchange Bithumb Faces Intense Legal Scruity

A little under a week ago, cryptocurrency exchange Bithumb’s offices were raided by local law enforcers. This was done to ascertain whether the company had been indulging in any sort of market price manipulation. As per a representative for the Seoul Southern District Prosecutor’s Office, the entire operation is carried out in relation to a specific coin (currently listed on the exchange) and not Bithumb as a whole.

New York is Introducing Crypto Payments — Well, Almost

The American state of New York recently took a bold step by introducing a bill seeking to make digital assets a legal form of payment within the state’s borders. Per the bill, there have been specific mentions of key cryptos like Bitcoin, Ethereum, Litecoin, and Bitcoin Cash as acceptable payment options.

In recent months, several regulatory agencies — both at the national and state level — have been trying to find a way to harness the power of these assets, especially from a payment standpoint.