U.S. Prosecutors Drop Extortion Charges Against Early Adviser to Ethereum Network


His lawyers say their client was put in a van on the day of his arrest and given a clipboard with a list of names of hundreds of the top players in the crypto industry, from Ethereum founder Vitalik Buterin to Caitlin Long, the founder and CEO of Custodia Bank, and instructed to give the FBI dirt that would help them make “dozens of convictions” in exchange for a lighter sentence. They also claim that Hlady, Nerayoff’s employee, was an FBI informant who exchanged 100 texts and 45 phone calls with the investigating FBI agent ahead of the pair’s arrest.

Ex-Coinbase Product Manager Sentenced to 2 Years in Prison for Insider Trading


Ishan Wahi, a former product manager at the U.S.-based crypto exchange, was arrested in July 2022 and charged with wire fraud and insider trading for feeding his brother and another man insider information about upcoming crypto listings. From June 2021 to April 2022, authorities say the men made over $1 million trading on Wahi’s information.

Voyager Digital Plans to Liquidate Assets, Wind Down After Sale Dreams Crushed


Creditors who have any of the 67 “supported” tokens, including BTC and ETH, stuck on the platform, will be able to withdraw the allowable percent of their crypto directly. For those with any of the 38 “unsupported tokens,” including SOL and ALGO, Voyager will liquidate everything and pay customers back with USDC, a stablecoin.

Ex-OpenSea Exec Convicted of Wire Fraud, Money Laundering in Insider Trading Case


Chastain made more than $50,000 from June 2021 to September 2021 by buying NFTs he knew would be featured on the company’s website on the cheap, and then selling them at inflated prices after the increased attention caused prices to jump, prosecutors alleged. Chastain attempted to conceal his purchases by using anonymous wallets and OpenSea accounts.

Bahamian Prime Minister Doesn’t Regret FTX, Says SBF Put His Country ‘On the Map’ for Crypto


Speaking to audiences at CoinDesk’s annual Consensus festival on Thursday, Prime Minister Philip Davis said his country had not lost its “zeal for being at the forefront of the digital assets industry,” despite FTX’s failure and alleged fraud. He also lauded the strength of the Bahamas’ recently-overhauled regulatory framework.

In the Ukraine War, Stellar Aid Assist Is Using Crypto to Give Mass Aid


The first and most essential response to famine, war, natural disasters like earthquakes and tsunamis, or other crises is food, clothing and shelter. These are the essentials to staying alive. But once disaster victims are made stable and have the clothes and food they need, giving them more can actually become a burden.

In recent years, aid organizations have recognized that cash donations, which are easier and quicker to distribute than physical goods, are necessary to help disaster victims rebuild their lives. This temporary receipt of cash aid preserves the agency of choice for recipients, who can decide when and how to spend the money to help them to restart their lives.

But cash aid has its own issues. Moving physical cash around is difficult and dangerous in many disaster and post-disaster situations. The cash can depreciate in value and, in many cases, can be pilfered by corrupt middlemen. That’s why a number of aid organizations have turned to digital cash transfers to help reduce that risk.

With digital cash transfers, humanitarian organizations have to act quickly to figure out delivery systems that work wherever the crisis is located. They need to take cash from millions of well-meaning donors in multiple currencies, exchange the value into a currency that the recipients can use and also be transparent so they can report to donors how the funds were spent. On top of all of this, the aid organizations need to provide this cash efficiently and cost-effectively, because the most basic tenet of humanitarian aid is that the recipient does not pay for the assistance received.

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The idea: Stellar Aid Assist

If cash is king in times of crisis, but moving around physical cash is difficult and digital bank transfers can’t reach recipients without access to a bank account, is crypto the solution?

The Stellar Development Foundation (SDF) – the nonprofit that supports the growth and development of the open-source, decentralized Stellar Network – certainly thinks so. Shortly after the invasion of Ukraine by Russia last February, SDF got to work developing a disbursement platform designed to help relief organizations distribute cash aid more efficiently.

With input from the United Nations High Commissioner for Refugees (UNHCR), the U.N.’s refugee agency, SDF developed and launched Stellar Aid Assist in less than 10 months.

Stellar Aid Assist allows humanitarian organizations to send bulk stablecoin payments – in the form of Circle’s dollar-pegged USD coin (USDC) – to recipients in need. Unlike traditional cash transfers, payments through Stellar Aid Assist can be made safely, nearly instantaneously and with complete transparency on where and when the funds arrived – all without the interference of potentially sticky fingered middlemen. It’s also basically free to use.

An aid organization would have to do approximately 100,000 transactions before seeing a dime in gas fees, said Tori Samples, a senior product manager at SDF who oversees Stellar Aid Assist. The wallet used by Stellar Aid Assist – the Vibrant wallet – is also free, though Samples said that could change in the future.

“One of the principles of humanitarian aid is that recipients never pay to receive any money,” Samples said. If Vibrant becomes a paid wallet some day, “that would be a negotiation between the off-ramp and the aid organizations sending funds to make sure that the recipients don’t receive any fees. If anything, those will be charged upstream to the organization.”

Stellar Aid Assist’s platform doesn’t just make things easier for the humanitarian aid organizations. It also benefits the end users, who get cash quickly and securely without needing a bank account.

As Samples pointed out, unlike donations of local currencies, USDC can serve as a hedge against inflation or local currency devaluation, and it’s protected digitally until the recipients need it. When they’re ready to cash out, the aid recipients can go to any MoneyGram location in the world and exchange their USDC for the equivalent amount of local currency, either in a physical or digital form.

Though Stellar Aid Assist can be used to give humanitarian aid in any crisis around the world, Samples said it was designed with Ukraine in mind.

The development of Stellar Aid Assist “was a response to the full-scale invasion of Ukraine in February of last year,” Samples said. “People have been doing cross-border payments on Stellar since 2014, but [the war was] when the need for this mass payout system became very clear.”

There are currently two public pilots using Stellar Aid Assist to give cash to refugees in Ukraine, one through the UNHCR and the other through the International Rescue Committee (IRC), a New York-based international humanitarian aid organization founded at the request of Albert Einstein.

These pilots appear to be quite small. A recent story in Wired about Stellar Aid Assist puts the number of test users in Ukraine who have received donations at less than 100. Samples declined confirm the size of the pilots.

Though that number is miniscule compared to the estimated 5 million Ukrainians who received cash assistance last year, it serves as a proof of concept that stablecoin-denominated cash payments could seriously improve the way humanitarian aid is done.

Since launching the first version of Stellar Aid Assist in December 2022, Samples said the SDF has been focused on expanding the platform to ensure that it can be more customizable for future crises, where recipients may not be as financially and digitally literate or connected as Ukrainians.

SDF has had “conversations with a lot of humanitarian organizations,” Samples told CoinDesk, but only the two currently known pilots in Ukraine have been made public.

In order for donations made through Stellar Aid Assist to be helpful to their intended recipients, it has to be easy to use for everyone, from the administrators at the aid organizations all the way down to the recipients, including people with zero crypto experience.

Making a user-friendly interface was top of mind when developing Stellar Aid Assist, said Stellar Development Foundation CEO and Executive Director Denelle Dixon.

“We built Vibrant with the notion of having the noncrypto user leverage it, so the [user experience] design is much different and much simpler,” Dixon said. “It’s much more in line with what a user might expect if they’re using a type of payment wallet or Venmo or whatever the equivalent might be.”

Dixon stressed that ease and efficiency is the project’s priority, not converting people into crypto users.

“The point of the aid is to get the aid to them so they can use it, hold it, do what they need to do with it and not to get them hooked on anything else,” Dixon said.

The importance of off-ramps

Stellar Aid Assist’s simplicity for end-users could not be achieved without its long-standing partnership with MoneyGram, the Dallas, Texas-based cross-border payments and money-transfer company.

Dixon told CoinDesk the partnership was nearly four years in the making when Stellar Aid Assist launched in December.

“We’ve always been very much about the on- and off-ramps, recognizing that if crypto and blockchain are really solving the problem for the unbanked and the underbanked, then you really shouldn’t need a credit card or a bank account to be able to join the solution,” Dixon said.

“Focusing on that cash on- and off-ramp was a really important piece of our work, holistically, and MoneyGram was the perfect partner for that because they have 400,000 agents all over the world,” Dixon added.

Dixon described the platform’s relationship with MoneyGram as “transformational” but said the project – which launched in the immediate aftermath of the FTX crypto exchange’s spectacular collapse in November – hasn’t gotten a lot of attention from either the media or lawmakers.

Ultimately, Dixon said, it didn’t really matter whether anyone was paying attention – only that the platform was helping get aid into the right hands.

“It just doesn’t matter, because we’re going to do this and we’re doing what’s right, and we’re using this technology in a way that’s fit for purpose,” Dixon said. “It will get the right amount of attention from regulators, policymakers and humans when they’re ready to absorb it.”

Dixon said that while Stellar Aid Assist might be a good demonstration of the value of blockchain technology, it’s more importantly a rail that aid organizations can use to help more people.

“Giving [relief organizations] a tool that helps them to put more dignity and humanity into the hands of those who might not feel any of that in the moment … it’s such a beautiful way to show the value of payments and really get to the humans on both sides” of aid distribution, Dixon said.

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.

Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.

Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.

FTX’s Bankruptcy Lawyers: ‘The Dumpster Fire Is Out’


“Mr. Bankman-Fried repeatedly, pervasively, and often persuasively lied to stakeholders and customers and creditors in order to maintain a digital con game,” Dietderich told the court. “[FTX] was a facade, a digital Potemkin village, or, perhaps more apt, a video game,” he continued. Behind the user interface, there was no correspondingly sophisticated reality, no equivalent process for segregating assets or reconciling trades, no reliable relationship between the positions reflected in the online game and the underlying positions held in the real world.”

Crypto Exchange FTX Could Reopen, Its Attorney Says; Firm’s FTT Token Surges


FTX, the cryptocurrency exchange that collapsed spectacularly in November, is considering reopening at some point in the future as it navigates bankruptcy, its attorneys from Sullivan & Cromwell said in a court hearing on Wednesday.

Sen. Warren, Rep. AOC Ask Circle, BlockFi Why They Banked at SVB


They have also been asked to provide information about the alleged “coddling” of any of their executives or board members by SVB, including details about financial relationships between the executives and SVB, any trips executives took that were sponsored by SVB, and whether any executive ever raised a red flag internally about SVB’s exposure to uninsured assets.

Wyoming Defends ‘Legitimacy’ of Its Crypto Charter Framework in Custodia Lawsuit


The state of Wyoming is taking umbrage at the Federal Reserve Board’s insinuations that its regulatory framework for special purpose depository institutions (SPDIs) – state-chartered banks that can handle digital assets – are not up to snuff.

Former FTX US President Reportedly Quit After ‘Protracted Disagreement’ With Bankman-Fried


A new report from the failed crypto exchange FTX’s current leadership says that former FTX US President Brett Harrison resigned last September partly because of a “protracted disagreement” with CEO Sam Bankman-Fried and members of his inner circle.

NYDFS Chief Dismisses ‘Choke Point 2.0’ Theory of Signature’s Closure as ‘Ludicrous’


“When you have rules on the books, when they are transparent, when it’s in black and white, and everybody knows what they are, that is the best way,” Harris said. “And frankly, it’s the fastest way to grow a robust and responsible ecosystem that can innovate, that can integrate with traditional financial services system, that can serve customers, and make our markets more efficient.”

Federal Reserve Says Custodia’s Crypto-Focused Business Model Is ‘Inconsistent’ With Approval


“Recent events, including the bankruptcies of crypto-asset intermediaries Celsius, Voyager, BlockFi, and FTX, have highlighted that the global and largely unregulated or noncompliant crypto-asset sector lacks stability and that dislocations in the sector can result in stress at financial institutions focused on serving the crypto-asset sector,” the Board reasoned.

U.S. Supreme Court to Hear First Ever Crypto Case Tomorrow


The U.S. Supreme Court will hear arguments in its first ever crypto-related case on Tuesday, when lawyers for San Francisco-based crypto exchange Coinbase will attempt to convince the nine Justices to pause a pair of class action lawsuits against the exchange.

SEC Chairman Gensler Suggests Again That Proof-of-Stake Tokens Are Securities: Report


U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler is doubling down on his opinion that proof-of-stake tokens could meet the definition of securities under the Howey test, thus bringing them under his agency’s regulatory authority.

Chinese Businessman With Ties to Steve Bannon Arrested, Charged With Fraud, Including $500M Crypto Scam


Exiled Chinese businessman Guo Wengui was arrested in New York on Wednesday morning and charged with fraud for allegedly orchestrating a series of fraudulent schemes that bilked retail investors out of a collective $1.4 billion.

U.S. DOJ Appeals New York Judge’s Decision to Approve Voyager’s Sale to Binance.US


“Things have to be done. We have creditors who are waiting and who in the midst of all of this uncertainty have no access to property in which they’ve invested, in some cases, their life savings, so we have to take some kind of action,” Wiles said. “We have to do something.”

Airbit Club Founders, Lawyer Plead Guilty to $100M Fraud Scheme


Though none have been sentenced yet, each could face a maximum sentence of 70 years in prison. As part of their guilty plea, the defendants must forfeit their ill-gotten gains, including U.S. currency, bitcoin and real estate valued at a collective $100 million.

‘Tonight Show’s’ Jimmy Fallon Files to Be Removed From Subpoena in Bored Apes Trademark Case


Fallon’s lawyer, Dana Seshens, argued that the motion should be denied because it places an undue burden on Fallon, and the same documents and information have already been sought from Yuga Labs and its alleged agent, Hollywood talent agent Guy Oseary, who was accused in the class action lawsuit of being the broker between celebrities and Yuga Labs.

SEC Accuses Utah-Based Green United of Running $18M Crypto Mining Scam


According to the SEC’s complaint, Green United and two individuals – the company’s founder, 46-year-old Utah resident Wright Thurston, and its main promoter, 43-year-old Utah resident Kristoffer Krohn – offered investments in $3,000 “Green Boxes,” specialized crypto mining machines that purported to mine GREEN tokens on the Green Blockchain.

SEC Files Emergency Action Against BKCoin for Running $100M ‘Ponzi-like’ Scheme


The SEC has accused Kang of misappropriating at least $371,000 in customer funds for his personal use, including paying for vacations, tickets to sporting events and rent on his New York apartment. According to the SEC, Kang tried to cover his tracks by giving investors falsified documents with “inflated bank account balances.” He also allegedly told investors that BKCoin had been audited by a “top four auditor,” which the SEC said never happened.

Bankman-Fried Remains Out on Bond, but Judge Warns ‘Revocation’ Proceedings Possible in Future


Federal prosecutors sent a letter to the court earlier this week claiming that Bankman-Fried had violated a previous court order against using encrypted technology when he used a virtual private network (VPN) to watch the Super Bowl, and urged the court to consider stricter measures, including blocking Bankman-Fried from using cellphones, computers, or any internet-connected devices except in limited, case-related circumstances.

Mt. Gox’s 2 Largest Creditors Pick Payout Option That Won’t Force Bitcoin Selloff: Sources


Creditors have waited nearly a decade to get a portion of their money back after Mt. Gox – one of the first and, at one time, the largest crypto exchanges in the world – was hacked in 2014. Hackers made off with 850,000 BTC, a sum valued at $460 million at the time. After the hack, Mt. Gox was left with approximately 142,000 BTC, 143,000 bitcoin cash (BCH), and 69 billion Japanese yen.

Binance Bracing Itself for Fines From US Regulators to Settle ‘Past Conduct’: WSJ


As U.S. regulators continue to sniff around Binance, the world’s largest crypto exchange is prepared to pay monetary penalties to “make amends” for past regulatory violations, according to The Wall Street Journal.

Celsius’s CEL Token May See 20 -Cent Value in Recovery Process, Attorney Says


An attorney for bankrupt crypto lender Celsius said the company might value its CEL token at 20 cents, down significantly from its current market value of 54 cents.

Circle Sounded Alarm on Paxos, Told NYDFS Binance’s Stablecoin Wasn’t Fully Backed: Bloomberg


Bloomberg reported on Monday that Circle tipped off the New York Department of Financial Services (NYDFS) in the fall of 2022, complaining that blockchain data revealed Binance did not have enough reserves to back up the BUSD tokens it had issued through Paxos. Bloomberg cited a source familiar with the matter.