Crypto Weekly Recap

Welcome to Melega Finance's weekly crypto recap, where we unravel the most compelling stories of the week with a spotlight on legal and bankruptcy developments. From FTX's legal battles and Genesis settling with the SEC to a congressional pushback against an SEC rule, this week's news is packed with regulatory twists.
But that's not all—cryptocurrency projects unlocking $900 million in tokens and the emergence of Celsius from bankruptcy add more layers to the narrative.
For transparent and decentralized crypto trading and to list your crypto token for free, don’t forget to visit our website and follow Melega Finance (@melegadex) on Twitter for more on all things cryptocurrency.

TOP CRYPTO NEWS RECAP (JANUARY 28–FEBRUARY 03, 2024)

• FTX's $400M Hack Linked to SIM-Swap Trio: 3 Charged by Feds
• Genesis Settles SEC Lawsuit for $21M in Bankruptcy Deal
• Celsius Emerges from Bankruptcy, Initiates $3B Return to Creditors
• FTX Plans Full Repayment, Shelves Restart Amid Bankruptcy
• Crypto Projects to Unlock $900M in Vested Tokens in February
• Congressional Move to Overturn SEC Rule on Crypto Custody Sparks Debate

FTX's $400M Hack Linked to SIM-Swap Trio: 3 Charged by Feds

In a major development, three individuals—Robert Powell, Carter Rohn, and Emily Hernandez—have been charged by U.S. prosecutors for orchestrating SIM-swap attacks, directly linked to the $400 million FTX hack in 2022. The trio allegedly stole identities, convincing telecom providers to transfer victims' numbers to their phones. The court filing revealed that Hernandez impersonated an employee, enabling Powell to access FTX's AT&T account, transfer over $400 million in virtual currency from crypto wallets just hours after the exchange filed for bankruptcy. FTX's CEO cited poor security, making it an attractive target for the alleged attackers.

Genesis Settles SEC Lawsuit for $21M in Bankruptcy Deal

Bankrupt firm Genesis Global Holdco and its affiliates have reached a $21 million settlement with the SEC over the "unregistered offer and sale of securities" through the Gemini Earn program. The proposed deal, subject to a Feb. 14 hearing, aims to resolve the SEC's civil lawsuit and eliminate the uncertainties of protracted litigation. The settlementstems from actions between February 2021 and November 2022, leading to Genesis' bankruptcy in January 2023. This marks the latest SEC settlement in ongoing crypto-related lawsuits, echoing similar cases with firms like Bittrex.

Celsius Emerges from Bankruptcy, Initiates $3B Return to Creditors

Crypto lender Celsius has successfully exited Chapter 11 bankruptcy, marking a significant turnaround since its collapse in 2022. The company plans to distribute over $3 billion in crypto and fiat to creditors, facilitated by the creation of Ionic Digital, a Bitcoin mining company.
Approximately 98% of Celsius creditors approved the exit plan, allowing the distribution process to commence. Additionally, Celsius has increased the amount available for distribution by $250 million through strategic conversions. The bankruptcy exit is a result of a collaborative effort, defying initial expectations of a complete disappearance. Former CEO Alex Mashinsky faces legal challenges amid the company's restructuring.

FTX Plans Full Repayment, Shelves Restart Amid Bankruptcy

FTX's legal team, in a United States Bankruptcy Court hearing, revealed plans to fully repay users and creditors without restarting the exchange, citing the lack of investor commitment for FTX 2.0. The bankruptcy lawyer highlighted the challenges posed by former CEO Sam Bankman-Fried's mismanagement, emphasizing the high costs and risks of resurrecting the defunct exchange.
Bankman-Fried, found guilty of fraud, awaits sentencing in March. FTX Token's price briefly surged amid the announcement. The court ruling favored debtors' reimbursement proposals based on crypto asset prices at the time of bankruptcy, rejecting creditors' "in kind" repayment proposition.

Crypto Projects to Unlock $900M in Vested Tokens in February

In February, crypto projects such as Avalanche, Aptos, The Sandbox, Optimism, and Sui are poised to release nearly $900 million in vested digital assets. Vested tokens, locked for a predetermined time, prevent early investors from quick profit-taking and encourage long-term commitment.
Avalanche leads with 9.5 million tokens, valued at around $320 million, set for release on Feb. 22. Aptos, The Sandbox, Optimism, and Sui follow suit with substantial releases. However, the sudden influx of tokens could potentially impact cryptocurrency market prices, as per tokenomics considerations.

Congressional Move to Overturn SEC Rule on Crypto Custody Sparks Debate

Members of the U.S. Congress, led by Representatives Mike Flood, Wiley Nickel, and Senator Cynthia Lummis, arepushing to repeal the Staff Accounting Bulletin 121 (SAB 121) imposed by the Securities and Exchange Commission (SEC). The rule requires banks to hold clients' cryptocurrency assets on their balance sheets, impacting the willingness of regulated banks to serve as crypto custodians.
Critics argue that SAB 121, which lacks prior consultation, treats crypto holdings differently and poses risks to consumer protection. A Congressional Review Act resolution seeks to formally disapprove the SEC's rule, prompting a broader debate on regulatory oversight.

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