OneCoin Founder Resurfaces 😮

In today's edition: 🎙️ New show on MEV, 🤑 SBF wants money, 🏛️ White House's warnings, 💸 BlockFi's package, ❌ Silvergate's suspensions, and more!

January 30, 2023

Earn a Free Premium Tax Plan From CoinTracker!

We're currently testing out a new format for the Unchained Daily and would love to hear your thoughts on it. Fill out this survey for a chance to win 8 Premium Tax Plans from leading crypto tax filing solution CoinTracker!

On the Pod…

Welcome to “The Chopping Block!” – where crypto insiders Haseeb Qureshi, Tom Schmidt, and Tarun Chitra chop it up about the latest news. This week, Flashbots co-founder Phil Daian joins the show to go deep on what maximal extractable value (MEV) means and how it’s shaping the Ethereum ecosystem.

Show highlights:

  • how Phil started working in MEV and why he believes it resembles 'Alice in Wonderland'

  • Phil's definition of MEV and when he realized this was an actual problem

  • how Flashbots was born

  • the story of how Vitalik didn't care about sandwich attacks at the time Uniswap was released

  • whether it's possible to minimize MEV via more competition

  • the never-ending debate about whether MEV should be accepted

  • why Tarun thinks the concept of fair ordering is against nature 

  • how Bitcoin uses social norms to solve its weaknesses 

  • how Google is being called out in court for creating auction to front run its customers

  • how Flashbots worked prior to and after Ethereum's Merge

  • why Flashbots complies with OFAC sanctions 

  • what is the Suave project and how it aims to decentralize Flashbots

  • what the future of MEV looks like

What’s Poppin’?

What to Watch in Crypto This Week

  • Prosecutors Ask SBF to Stop Witness Tampering

  • Secret Network Drama

SBF Seeks Right to Access FTX Crypto

Former FTX CEO Sam Bankman-Fried is looking to access the cryptocurrency held on the exchange, according to a Jan. 28 letter filed by his lawyer Mark Cohen. The letter objects to the bail conditions which specifically prohibit him from transferring crypto held by FTX and Alameda Research; these were imposed when the court suspected he had been the culprit behind unauthorized transfers. 

“Nearly three weeks have passed since the initial pretrial conference and we assume that the Government’s investigation has confirmed what Mr. Bankman-Fried has said all along; namely, that he did not access and transfer these assets,” said Cohen in the letter.

White House Issues Warning About Crypto Risks

The Biden administration published a roadmap on mitigating crypto risks, calling for Congress to “step up its efforts” in aiding law enforcement. In a Jan. 27 letter, White House officials said that legislation should not greenlight mainstream institutions to dive into crypto.

Traditional finance’s limited exposure to crypto markets is what prevented market turmoil in the broader financial system, said the officials, calling any enacted legislation that reverses the course “a grave mistake.”

BlockFi’s $10 Million Employee Bonus Package Approved

New Jersey bankruptcy court Judge Michael Kaplan approved a $10 million bonus package for employees of crypto lender BlockFi. A Friday ruling reported by CoinDesk disclosed that 130 staff members will get a bonus equal to 42.5% of their salary paid in three installments through the year.

BlockFi’s chief people officer Megan Crowell said it was necessary to retain key executives in order to prevent further strain on the firm.

Last week, the firm accidentally revealed unredacted financial documents that showed it had $1.2 billion worth of exposure to FTX and Alameda Research. These figures were significantly higher than what was initially reported by their legal counsel.

Bitcoin Miner Argo Blockchain Faces Lawsuit Over Pre-IPO Claims

London-based Bitcoin mining firm Argo Blockchain has been hit with a class action lawsuit from investors, alleging that the firm misrepresented its finances and business prospects prior to its IPO in September 2021.

In the complaint, investors also alleged that Argo downplayed the risks associated with Bitcoin mining and produced less BTC in some months due to increased network difficulty.

Argo raised $112.5 million in its IPO, selling 7.5 million shares at a price of $15 each. The firm’s shares are currently trading at around $1.95, representing an 87% decline from its price at the time of its public offering.

Azuki Twitter Hacker Drains $750,000 Worth of Crypto in 30 Minutes

Popular NFT project Azuki’s official Twitter account was hacked on Friday, leading to $750,000 worth of USDC, ETH and NFTs stolen in just 30 minutes. The account’s exploiter lured unsuspecting users with a fake “land mint” with a link that connected their wallets to a smart contract that drained their funds.

The Azuki team confirmed that the project’s account was compromised in tweets from their personal profiles, later telling users in a Twitter Space that they were on top of the situation.

Silvergate Suspends Dividends to Preserve Capital

Crypto bank Silvergate has suspended paying out dividends, according to a Jan. 27 company announcement. The firm said the decision was in aid of maintaining a “highly liquid balance sheet” as it attempts to navigate the recent volatility in the market.

The NYSE-listed company plays a crucial role in the transfer of funds to and from crypto exchanges and has become caught up in regulators’ crosshairs after the collapse of FTX and Alameda – two insolvent firms of which Silvergate was the “go-to'' banking partner. (Listen to Marc Cohodes and Ram Ahluwalia discussing the impact of FTX’s collapse on Silvergate in a Dec. 13 episode of Unchained.)

In Other News…✍️✍️✍️

  • Dr. Ruja Ignatova, the founder of OneCoin, has recently reappeared after a prolonged absence of over five years, during which she was not seen or heard from in the public sphere. 

  • The Australian Securities and Investments Commission (ASIC) had begun investigating FTX's local operations in March 2022, several months before the crypto exchange's collapse.

  • OpenZeppelin audits of Matter Labs' zkSync revealed issues, most of which have been fixed. 40 out of 45 issues found in previous audits were resolved by Matter Labs team, including two critical and two medium-severity issues.

  • The South Korean Ministry of Justice plans to track crypto transactions to prevent money laundering, starting with third-party software and developing its own system later in 2023.

  • Layer 1 blockchain Fantom plans to introduce a revised version of its fUSD stablecoin with the aim of providing a more stable and economical system for developers, partners and users.

The $$$ Corner…

  • VitaDAO, which focuses on science research, raised $4.1 million in a round with participation from Pfizer's venture arm. 

  • Anthony Scaramucci's SkyBridge Capital investment firm experienced a 39% decline in its largest fund in the past year due to unfavorable investments in the crypto space, including a partnership with the now-defunct FTX cryptocurrency exchange.

What Do You Meme

📈 Your Market Update 📉

  • BTC is up 1.11%, trading at $23,183

  • ETH is up 1.2%, trading at $1,586

  • BTC dominance: 41.3%

  • Crypto market cap: $1.08 trillion

*All data as of today, 5 am ET

Recommended Reads

  1. A Forbes exclusive on Sam Bankman’s Fried hellish experience in a Bahamas prison 

  2. The Block’s Stephanie Murray on FTX’s bankruptcy

  3. Almost 50 flavors of crypto finance by Sébastien Derivaux

⛓️ Join Unchained Premium to get access to:

  • 🎙️ Behind-the-scenes interviews, in which I talk with crypto experts and entrepreneurs to learn all about the latest developments in the industry.

  • 💬 A subscriber-only Telegram group, where you can talk with the other members of the Unchained community, build a network in crypto, and talk directly with me and the Unchained team!

  • 📰 Transcripts of all the shows, for subscribers only.

If you liked what you read: