Cryptocurrencies continued its muted performance early on Thursday, with market capitalization hovering close to the $810 billion level. The subdued performance in the crypto market continues amidst markets taking cognizance of the latest developments in the FTX saga, viz the SEC and CFTC filing charges against Caroline Ellison and Gary Wang of FTX group.
Overall crypto market capitalization is at $811 billion, versus $812 billion a day earlier. The Dollar’s weakness in the recent sessions too failed to revive sentiment in the digital assets market. The Dollar Index which measures the Dollar’s strength against a basket of six currencies is currently at 104.14, after dropping to as low as 103.75 earlier in the trade.
In a major development in the FTX case, the Securities and Exchange Commission on Wednesday charged Caroline Ellison, the former CEO of Alameda Research, and Zixiao (Gary) Wang, the former Chief Technology Officer of FTX Trading Ltd. (FTX), for their roles in a multiyear scheme to defraud equity investors in FTX, the crypto trading platform co-founded by Samuel Bankman-Fried and Wang. The Commodity Futures Trading Commission also filed charges against the duo on Wednesday.
The charges by the SEC include manipulating the price of FTT, an FTX-issued exchange crypto security token, by purchasing large quantities on the open market to prop up its price and thereby inflating the valuation of Alameda’s FTT holdings. The complaint also alleges that Wang created FTX’s software code that allowed Alameda to divert FTX customer funds, and Ellison used misappropriated FTX customer funds for Alameda’s trading activity.
The SEC’s complaint charges Ellison and Wang with violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. SEC has stated that both Ellison and Wang are cooperating with the SEC’s ongoing investigation.
According to CFTC’s complaint, Wang created features in the code underlying the FTX trading platform that allowed Alameda to maintain an essentially unlimited line of credit on FTX. As further alleged, at Bankman-Fried’s direction, FTX executives including Wang created other exceptions to FTX’s standard processes that allowed Alameda to have an unfair advantage when transacting on the platform, including quicker execution times and an exemption from the platform’s distinctive auto-liquidation risk management process. These critical code features and structural exceptions allowed Alameda to secretly and recklessly siphon FTX customer assets from the FTX platform.
As further alleged, Ellison made deceptive public statements in her capacity as Alameda’s CEO, including statements about the supposed separation between the operations of Alameda and FTX, in order to facilitate and perpetuate the fraudulent scheme.
Ellison and Wang are not contesting their liability on the CFTC’s claims. Both have agreed to the entry of consent orders of judgment as to their liability for engaging in fraud in violation of Section 6(c)(1) of the Commodity Exchange Act and CFTC Regulation 180.1.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced charges against Ellison and Wang.
Meanwhile, Sam Bankman-Fried arrived in New York following his extradition to the U.S. from the Bahamas where he was lodged in the Fox Hill prison.
Bitcoin traded between $16,895.71 and $16,755.91 in the past 24 hours. The lead cryptocurrency is currently changing hands at $16833.16, down 0.12 percent on an overnight basis. Bitcoin is currently placed 27th overall in the ranking of all assets as per companiesmarketcap.com.
Ethereum gained 0.22 percent in the past 24 hours and is currently trading at $1,216.68. Ethereum is currently placed 79th overall in the ranking of all assets as per companiesmarketcap.com.
Among the top 10 non-stablecoin cryptocurrencies, Dogecoin (DOGE) is the best performer with an overnight rally of 4.88 percent while BNB (BNB) is the greatest laggard with a decline of 1.43 percent.
In the wider crypto world comprising the top 100 cryptos, 92nd ranked Helium (HNT) is the best performer with a rally of more than 19 percent in the past 24 hours. 73rd ranked Chain (XCN) tops losses with a 5.4 percent overnight plunge.
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