Saturday, September 23, 2023

This article originally appeared in First Mover, CoinDesk’s daily newsletter putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

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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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  • 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 Investments, VanEck and Grayscale Investments – 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.

– Omkar Godbole

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Edited by Mark Nacinovich.

#Mover #Americas #Justice #Department #Charge #Binance #Fraud #Report

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