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  • 🔥 What do SBF, Tether and a Caribbean island have in common?

🔥 What do SBF, Tether and a Caribbean island have in common?

Definitely more than you think!

GM to both our old and new frens!

Each week in the crypto world is an exhilarating journey for investors, traders and enthusiasts alike.

With a wide range of new projects, upgrades and developments constantly being announced, there is never a dull moment in this fast-paced world.

This week we’re discussing:

  • 🥥 What do SBF, Tether and a Caribbean bank have in common?

  • ⏺️ Arthur Hayes vs Cardano

  • 🐒 Reddit delves deep into the world of crypto

  • ⚖️ SEC’s hopeless battles

Let’s get down to it:

What do SBF, Tether and a Caribbean bank have in common?

  • A look at the recently published documents as part of a new filing in a Florida Federal court has revealed a complex relationship between three major (some former) players in the crypto world - SBF, Deltic Bank, and Tether.

  • The lawsuit alleges that SBF's trading arm, Alameda Research, used a secret line of credit from Deltec Bank to artificially inflate the growth of Tether, leading to the creation of billions of USDT tokens.

According to the documents, this alleged scheme began in 2018 when SBF's companies started opening accounts at Deltec Bank for easier access to Tether.

👉️ Alameda would then transfer funds from its Deltec account to Tether's, creating USDTs and profiting from arbitrage opportunities.

The lawsuit also reveals that Deltec played a major role in facilitating SBF's misappropriation of customer funds by transferring them between FTX and Alameda accounts 💸 

The relationship between the two was not one-sided, as Deltec allegedly received generous compensation for its assistance.

  • In return, FTX aided Deltec by providing a $50 million loan to its parent company when it failed to raise capital.

  • Despite these allegations, Deltec denies any wrongdoing and claims they were not aware of FTX's scam activities until they became public.

Tether, on the other hand, has yet to respond to the lawsuit

This could have serious implications for USDT's legitimacy, which has already faced endless rumors and conspiracy theories in the past.

Text messages between Tether's CFO and Alameda traders show a close friendship and celebration of milestones, raising further questions about the relationship between the two:

“We are a big family…we will conquer the world”

- Tether's CFO to Alameda

🤔 With Tether's marketcap standing at almost $100 billion, this lawsuit could have significant consequences for the entire crypto industry, if it goes the wrong way.

So far, Tether's silence on the matter is only adding fuel to the fire of speculation and doubt surrounding its operations. Only time will tell how this legal battle unfolds and what it means for the future of crypto.

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Arthur Hayes vs Cardano

Crypto and drama always go hand in hand, and the latest feud to catch the attention of the crypto world involves Arthur Hayes, founder of BitMEX, and Charles Hoskinson, founder of Cardano (ADA).

  • In a post on February 21st, Hayes didn't hold back his criticism of Cardano, calling it "dog 💩" and challenging Hoskinson to educate him about the platform's usability for building dApps.

This isn't the first time Hayes has publicly spoken out against Cardano. In an interview with Coin Bureau, he referred to it as a "wannabe Ethereum" and questioned its relevance.

Hoskinson responded on Twitter, asking why Hayes was throwing shade at Cardano, but received even more insults in return 👿 

Despite the drama, Cardano's native token has shown strong performance in the market, with a 6% increase in the past week and an impressive 31% growth over the month, unlike BMEX, that never seen its ATH again since it was launched 🤔 

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Reddit goes deep with crypto

Reddit is one of the biggest social media platforms, with millions of users worldwide. Recently, Reddit officially submitted its S-1 filing with the US SEC, taking a major step toward its upcoming initial public offering 📃 

But that's not the most interesting part

  • In the filing, Reddit disclosed that it had invested in crypto assets such as Bitcoin and Ether and even acquired Polygon's MATIC tokens 🪙 

  • According to the filing, Reddit made these investments using its excess cash reserves and also accepted payment for virtual goods in Ether and MATIC 🧠 

However, the company clarified that these investments did not make a significant impact on their financials for the periods covered in the IPO paperwork 💰️ 

Reddit also sees potential in blockchain technology and plans to integrate it into its operations by offering new forms of payment for virtual goods.

The future for tech companies

This illustrates the growing openness of tech companies to delve into the possibilities of crypto and blockchain technology, primarily by incorporating it into their business strategies 📈 

Will we witness an increasing number of tech platforms emulating Reddit by venturing into crypto investments? The likelihood is significant.

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SEC’s hopeless battles

The US SEC has been on the losing end of recent crypto-related lawsuits, having sued every major crypto player they could and yet subsequently (or potentially) losing most of the important lawsuits 👇️ 

  • Kraken has recently filed to dismiss the SEC's lawsuit against it.

  • SEC sued Kraken's parent companies in November, claiming that they were operating an unregistered securities exchange, broker, dealer, and clearing agency.

  • The SEC has initiated a similar legal action against Coinbase.

Kraken has stated in a recent blog post that the SEC's complaint does not mention any consumer harm or fraud and is flawed as it is based on registration requirements. Kraken has argued that crypto tokens are investment contracts.

The famous Ripple (XRP) vs SEC saga has also come to an important phase. The discovery deadline has passed, which could pave the way for a settlement or continued litigation.

Settlement Rumors and Potential Benefits

The potential benefits of an early resolution have been widely speculated in the crypto community 👂️ 

With looming deadlines and hefty penalties at stake, both parties may come to a mutually beneficial agreement through negotiations 💬 

  • So far, SEC has failed to gain any major wins against the crypto industry, despite their aggressive approach 🥱 

  • A settlement with Ripple could shift SEC's strategy and result in more favorable outcomes for other crypto companies facing similar legal battles.

  • One of the possible outcomes of a settlement could be establishing a regulatory framework for crypto, providing clarity and legitimacy to the market.

Will the SEC back off?

That is uncertain, as the SEC still has options to pursue.

The current war on crypto is not new, and many other regulators worldwide have taken similar stances.

However, with recent setbacks and mounting pressure to provide clarity for the crypto market, there is a big chance that the SEC may decide to back off or pursue alternative strategies.

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Other worthy reads:

Potential points of interest by Andy:

Some other stuff happening in the space by Salazar:

Some analysis by Quinn Thompson:

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That's all for now, frens.

We'll meet in a week! And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Thanks for joining us, and we look forward to seeing you back next week. Cheers!

Yours, The 🔥 Team

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