Prager Metis, the former auditor for collapsed cryptocurrency exchange FTX, has agreed to pay $1.95 million to settle two cases brought by the US Securities and Exchange Commission (SEC). The settlement resolves allegations of negligence in auditing the exchange under the leadership of Sam Bankman-Fried, who has since been convicted of fraud. The SEC accused the New York-based firm of providing inaccurate audit reports for FTX in 2021 and 2022, failing to meet accepted auditing standards.
The audit firm was found to have misunderstood FTX’s operations, particularly its relationship with Alameda Research, a hedge fund tied to Bankman-Fried. Alameda suffered significant financial losses, prompting Bankman-Fried to misappropriate $8 billion from FTX customers to cover them. FTX’s sudden collapse in November 2022 led to its bankruptcy filing, leaving many investors defrauded and billions in losses.
As part of the settlement, Prager Metis will pay $1.75 million in civil fines alongside disgorged profits and interest, though the firm did not admit any wrongdoing. Additionally, the SEC settlement included charges related to auditor independence violations between 2017 and 2020. Prager Metis’ legal representative stated that the firm was also a victim of FTX’s internal fraud.
Meanwhile, Bankman-Fried is appealing his conviction and 25-year prison sentence. Caroline Ellison, former chief executive of Alameda and Bankman-Fried’s former girlfriend, pleaded guilty and testified against him. Her sentencing is set for later this month, and she is requesting leniency from the court.
Cryptocurrency adoption is on the rise in Peru, with Bitcoin purchases becoming increasingly common in physical locations. US-based platform Nemo Latam recently opened a physical office in Lima, offering face-to-face services to build customer trust. A personal approach allows users to interact with trained staff, a move aimed at making cryptocurrency more accessible and reducing the uncertainty often associated with the digital finance sector. Nemo Latam is particularly focused on inclusion, with most of its staff comprising Peruvian women.
The initiative is not unique in Peru. Platforms like 9780Bitcoin.com have been offering in-person cryptocurrency services for years, even expanding into Brazil. These efforts reflect a broader goal to promote the continued growth of cryptocurrency usage in Peru, where interest in digital assets has surged. According to a study by Sherlock Communications, Peru ranks as one of the top 50 countries for cryptocurrency adoption and sits 42nd globally for cryptocurrency use, based on Chainalysis data.
The increasing adoption is driven by the need for financial alternatives as Peruvians face rising living costs and economic challenges. Bitcoin has particularly gained traction among Indigenous communities, helping residents manage their finances independently for the first time. With more companies attracted to Peru’s growing crypto market, the government is now exploring the launch of a digital sol, a central bank digital currency (CBDC), to compete with cryptocurrencies.
Google Cloud has introduced a Blockchain Remote Procedure Call (RPC) service designed to help crypto developers interact more easily with blockchain data and improve the performance of decentralised applications (DApps). Initially supporting Ethereum’s mainnet and testnet, Google plans to expand to other blockchains in the future. The service offers a free tier with significant capacity, allowing up to one million requests per day and supporting Ethereum’s JSON-RPC standard, simplifying integration for developers.
The new service aims to address reliability issues that developers have faced with blockchain RPCs. Delays or errors can severely impact the performance of DApps, particularly during periods of high network activity. Issues like those seen in June with Ethereum’s layer-2 ZKsync network underscore the importance of reliable RPC services for transaction processing.
Google Cloud’s move into blockchain comes after the launch of its Web3 Portal in April, which offers blockchain developers a range of resources. However, this earlier product was met with mixed feedback, with some critics pointing to a poor user interface and a lack of support for key blockchain ecosystems such as Bitcoin.
Binance founder Changpeng Zhao, better known as CZ, is due to be released from a US prison on 29th September. Zhao, 47, has been serving a four-month sentence for breaching US anti-money laundering and sanctions laws, particularly for allowing transactions with sanctioned countries such as Iran and Cuba. His legal troubles started in November 2023 when Binance and Zhao admitted to multiple charges, resulting in a substantial $4.3 billion fine for the company and a personal penalty of $50 million for Zhao.
Initially facing a potential three-year term, Zhao’s sentence was significantly reduced after US District Judge Richard Jones determined there was insufficient evidence to prove his direct involvement. The judge also considered Zhao’s personal history and character as mitigating factors. As part of the settlement, Zhao agreed to step down as Binance’s CEO.
Although Zhao’s legal woes have rattled Binance, the exchange continues to operate. Following his release, there is speculation about his future role in the crypto world. Earlier in 2024, Zhao hinted at launching a new venture, Giggle Academy, a free educational platform for underprivileged children, signalling his intent to leave a legacy beyond cryptocurrency.
Ethereum has declined, hitting its lowest value against Bitcoin since April 2021. The cryptocurrency has fallen over 55% from its peak in 2021, now trading at 0.039 BTC, down 24% this year and 35% from its yearly high. Ethereum has also dropped to $2,300 in US dollar terms, marking its lowest price since February.
The downturn is largely due to a lack of interest from institutional investors, with Ether-focused ETFs seeing outflows of $581 million. This sharply contrasts with Bitcoin spot funds, which have attracted $18 billion in inflows. Meanwhile, Ethereum has faced competition from layer-2 networks like Base and Polygon, which offer faster transactions at lower costs.
Further contributing to the drop are large-scale sales from key figures like Vitalik Buterin and the Ethereum Foundation. High-profile investors, including Jump Trading, have also reduced or completely liquidated their Ether holdings, further fuelling concerns about Ethereum’s future.
Donald Trump has unveiled a new cryptocurrency business, World Liberty Financial, during a live event on X Spaces. However, few details were provided about the company, its formation, or financing. The timing of the launch, just before the upcoming election, is unusual, but Trump aims to attract digital asset advocates.
The former president, once a critic of cryptocurrencies, has now embraced them, pledging to make the US the ‘crypto capital of the planet’. He promises minimal regulation and a national bitcoin reserve. This shift is seen as part of his strategy to appeal to tech-savvy voters.
Trump’s two sons, Eric and Donald Jr., have actively promoted the project, claiming it will revolutionise digital asset finance. Despite these bold statements, specifics about how World Liberty Financial will operate remain unclear.
Trump’s cryptocurrency move, combined with his evolving stance on digital assets, signals his focus on emerging financial technologies as a key aspect of his re-election campaign, looking to capitalise on the growing interest in the sector.
A growing number of countries, representing 98% of the global economy, are exploring digital versions of their currencies, with almost half of them at an advanced stage of development. Countries like China, the Bahamas, and Nigeria have already seen a noticeable increase in the usage of their central bank digital currencies (CBDCs).
Research by the Atlantic Council reveals that all G20 nations are now investigating CBDCs, with 44 countries currently piloting them, up from 36 last year. Authorities are accelerating these efforts in response to decreasing cash usage and the potential threat from cryptocurrencies like Bitcoin and big tech companies.
Notable growth has been observed in the CBDCs of the Bahamas, Jamaica, and Nigeria, while China’s digital yuan (e-CNY) has seen its transaction value almost quadruple to 7 trillion yuan ($987 billion). The European Central Bank has also launched a multi-year digital euro pilot, while the US, despite being slower to act, has recently joined a cross-border CBDC project with six other central banks.
Meanwhile, the United States is grappling with privacy concerns over CBDCs. Although a bill prohibiting a ‘retail’ CBDC has been passed by the US House of Representatives, the issue remains prominent in the country’s political discourse. Elsewhere, Russia’s digital rouble pilot has expanded to Moscow’s metro, and Iran is working on a digital rial.
MicroStrategy has announced plans for its third debt offering this year, aiming to raise $700 million by issuing convertible senior notes due in 2028. The company intends to use the funds to pay off $500 million in existing senior secured notes and purchase more Bitcoin, with any remaining proceeds going towards general corporate purposes. The notes will be unsecured and will begin paying interest from March 2025, available only to qualified institutional buyers.
This marks MicroStrategy’s third debt offering in 2024, following similar issuances in March and June. The company, one of the largest public holders of Bitcoin, currently holds 244,800 BTC, valued at approximately $14 billion. However, the volatility of its Bitcoin holdings has affected its financial performance, with the company posting a net loss of $102.6 million in the second quarter of 2024, largely driven by a $180.1 million digital asset impairment.
Despite concerns about its significant exposure to Bitcoin, MicroStrategy’s stock has performed well. Its share price has surged nearly 295% over the past year, with a 96% increase so far in 2024, reaching $134 as of 16 September.
Bitcoin experienced a 4.1% drop between 15th and 16th September, falling to $57,595 after failing to break through the $60,000 resistance level. This decline erased the gains made on 13 September when the price briefly surged to $60,580. While some analysts attributed Bitcoin’s earlier rise to a weakening US dollar and inflows into Bitcoin ETFs, the cryptocurrency has struggled to sustain momentum as traders remain cautious ahead of key economic events, such as the upcoming Federal Reserve interest rate decision.
Investors are closely watching the Federal Open Market Committee (FOMC) meeting on 18 September, where a 0.50% interest rate cut could potentially boost risk on markets like Bitcoin. However, if the Fed opts for a smaller 0.25% cut, it may negatively impact market sentiment, especially with lingering concerns over corporate earnings and China’s economic slowdown. In addition, regulatory pressure has intensified, with the US Securities and Exchange Commission (SEC) expanding its lawsuit against Binance, further weighing on investor confidence.
In the short term, Bitcoin’s price faces both macroeconomic and regulatory challenges. Despite ongoing demand from institutions like MicroStrategy and positive inflows into spot Bitcoin ETFs, investor sentiment has been shaken by a large, dormant Bitcoin address selling $12.7 million worth of BTC and the growing legal scrutiny of major exchanges.
Forty of the world’s top commercial banks have joined a new digital currency pilot known as the Agora project in collaboration with the New York Federal Reserve and several central banks from Europe, Korea, and Japan. The initiative aims to explore the use of tokenised bank deposits and central bank digital currencies (CBDCs) to improve cross-border payment systems. Specifically, it focuses on ‘wholesale’ CBDCs, which are used between banks.
The project will address the complexities of cross-border transactions, such as time zone differences, legal frameworks, and varying regulatory and technical systems. Major banks participating include JPMorgan, HSBC, UBS, and Japan’s MUFG.
Led by the Bank for International Settlements and the Institute of International Finance, Agora differs from another CBDC project called mBridge. It involves central banks from China, Hong Kong, Thailand, the UAE, and Saudi Arabia.
