The latest moves in crypto markets, in context By Lyllah Ledesma, CoinDesk reporter Was this newsletter forwarded to you? Sign up here. |
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Happy Thursday! Here’s what you need to know today in crypto: |
- Binance may face U.S. fraud charges, but prosecutors worry about a bank run.
- ETF issuer Direxion joins race for a crypto futures exchange-traded fund.
- Twitter bots pump coins linked to Alameda Research after FTX lists the tokens.
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Crypto exchange Binance could face U.S. Department of Justice fraud charges, though prosecutors are weighing alternatives given the risk of an FTX-style bank run, news site Semafor reported, citing people familiar with the matter. U.S. officials are worried an indictment could imperil the broader cryptocurrency industry, according to Semafor. For that reason, they are weighing alternatives such as "fines and deferred or non-prosecution agreements," sources told the publication. Binance declined to comment. The Justice Department didn't immediately respond to CoinDesk's request for comment. It was already publicly known U.S. officials were scrutinizing Binance. Earlier this year, the Commodity Futures Trading Commission sued the company and founder and CEO Changpeng Zhao for "willful evasion" of U.S. laws. |
Exchange-traded fund issuer Direxion filed for a bitcoin and ether futures product Wednesday, joining a whole raft of companies hoping to launch similar crypto-related trading products in the U.S. According to a filing with the Securities and Exchange Commission, the Direxion Bitcoin Ether Strategy ETF would invest in bitcoin and ether futures contracts. The fund may also include investments in other ETFs that have exposure to futures products. The move comes the same week six other companies filed to launch ether futures ETFs. They join a crowded field of crypto ETF hopefuls as the SEC is reviewing more than half a dozen applications to launch a spot bitcoin ETF. A legion of Twitter bots pumped the price of crypto tokens traded by Sam Bankman-Fried's quant trading firm Alameda Research shortly after FTX listed the tokens, according to a report from the Network Contagion Research Institute. NCRI, an institution that studies cybersecurity and social-media threats, published a report on Wednesday that shows that "inauthentic chatter" on Twitter, now X, heavily influenced the prices of five FTX-listed tokens traded by Alameda insiders. The coins were BOBA, GALA, IMX, RNDR and SPELL. Fake tweets regarding the coins surged — by as much as 30% in some cases — after FTX officially listed them, with "inauthentic" comments eventually comprising roughly half of all Twitter posts about the tokens. |
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Market Insight: Traders Track ETH 'Slippage' |
Traders use several technical and fundamental indicators to navigate the speedy and risky crypto market. They can consider adding one more to the list: A gauge of "slippage" in the ether market. The indicator has consistently identified trend changes in the price of the second-largest cryptocurrency this year. Slippage is the difference between the price at which a trading order is executed and the price at which it was requested. It occurs in fast-moving, highly volatile market conditions or when liquidity is low. |
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- The discount in shares in the Grayscale Ethereum Trust (ETHE) relative to the fund's net-asset value has narrowed from 41.5% to 37.16% in two days.
- The bounce comes as six companies – Volatility Shares, Bitwise, Proshares, Roundhill, VanEck and Grayscale – have applied for exchange-traded funds tied to ether futures.
- Speculation is that these applications will be withdrawn by the end of the week, according to Lewis Harland, a portfolio manager at Decentral Park Capital,
- "Despite ETH futures being decidedly liquid and large enough to handle an ETF, this would be considered to be too large of a position change for the SEC," Harland said in a market update.
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State of Crypto: Policy & Regulation |
It is now more important than ever to set industry standards and align on practical short-term and long-term objectives through pointed conversations with the best legal minds and Washington D.C.’s most important decision makers.
Join us at State of Crypto: Policy and Regulation on October 24 in Washington D.C. for an unprecedented opportunity to evaluate, dissect and ultimately shape crypto regulatory frameworks that support a vibrant, secure and healthy future for the digital economy. Save 10% with code FM10. Learn more and register. |
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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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