Unchained - Bitcoin Is Worth Over $1 Trillion. How Much Will Coinbase’s New cbBTC Grab? - Ep. 703

Starting point is 00:00:00 There is so much Bitcoin. There's so much value tied up in that Bitcoin. And the power of this latent user demand being able to be sort of unleashed in this way, very directly onto on-chain applications, we think is going to lead to a ton of innovation. And that is ultimately great for Coinbase. Hi, everyone. Welcome to Unchained. you're a no-have resource for all things crypto. I'm your host Laura Shin, author of The Cryptopians.

Starting point is 00:00:35 I started coming crypto nine years ago and as a senior editor of Forbes was the first Metri Meter border to cover cryptocurrency full-time. This is the September 13th, 2024 episode of Unchained. Today's episode is brought to you by Gemini, a U.S-based crypto exchange built for new and advanced traders. Gemini is offering new customers $15 in BTC when they trade. Sign up today to earn your Bitcoin. Where can you find $700 million in real-world assets, 11 million daily operations with industry low fees, powered by 450,000 plus on and off-ramps across 180 countries, the stellar network?

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Starting point is 00:01:52 VP of Engineering at Coinbase. Welcome, Will. Thanks so much for having me. We're recording Thursday, which is the day that Coinbase has launched its version of wrapped Bitcoin called CBBT. Can you tell us what CBBT is and what you expect people will use it for? Absolutely. So CBBT is a new product from Coinbase that is attempting to add utility to Bitcoin, to the Bitcoin that people are already holding on Coinbase by allowing our users to wrap that Bitcoin and send it on chain onto the base network or onto the Ethereum L1. as a wrapped asset that is backed one to one with Bitcoin that Coinbase holds on platform. In terms of what we expect people to use it for, everything that exists in Defi today and 100 things that we can't yet imagine. So this is borrowing and lending protocols, money markets,

Starting point is 00:02:43 minting stable coins perhaps, dexes, all the things that you might want to do with crypto asset on a smart contract network. We're hoping to enable in a new way with CBBCC. And why did Coinbase decide to launch CBBT? Yeah, so Bitcoin is the granddaddy of all crypto assets. I think Bitcoin dominance right now in terms of the overall crypto market cap is somewhere over 50%. And a lot of that Bitcoin is held by Coinbase users, both our retail users and our institutional users.

Starting point is 00:03:17 Something like $137 billion worth of Bitcoin in our last public 10Q filing held on platform. And for a lot of that Bitcoin sitting in Coinbase behind our security, our best practices, and letting people hold that Bitcoin safely, that is already serving its highest and best use. And for the many people and a lot of Bitcoin that is under that category, that's great. And that will always be there. But we do hear from a lot of our users that they're looking for other things to do with that capital. Could I get yield on this? Is there utility for this? could I send and receive it in new ways? And we saw an opportunity with CBBT to put all of that existing Bitcoin or as much of it as our users want into contact with all the innovation that's happening on these smart contract chains.

Starting point is 00:04:06 There's been different setups for types of wrapped Bitcoin with varying degrees of decentralization. So for instance, the most well-known version of wrapped Bitcoin is WBTC in which crypto custody company, Bikko, custodies the Bitcoin as a centralized custodian. And you've kind of, I think, given a hint as to how CBBT will be set up. But could you describe when a user goes to mint CBBT, what happens in the background? Yeah, absolutely. So let's say you're a user on Coinbase today and you hold one BTC to keep things simple. You'd go to your Coinbase account and say, I want to send that Bitcoin. And when you go to send that Bitcoin, you'll have a choice now. You can say, I want to send it on the Bitcoin network. and that will send it as it always has. You can say I want to send it on the Lightning Network, which is support that we added in Coinbase at the beginning of this year, and that will do a Lightning Send for faster and faster send and cheaper fees of that Bitcoin.

Starting point is 00:05:00 Or now you could also say I'd like to send this on base, or I'd like to send this on Ethereum L1. If you choose to send on base or on Ethereum L1, then we will take that one Bitcoin, custody it safely, wrap it one for one, mint one new CBBT, and send that to your desired address on base or on Ethereum L1. And so how would you say that your version of wrapped Bitcoin differs from others that are available? Yep. So as you mentioned, there are a lot of wrappers and wrap Bitcoin products out in the world.

Starting point is 00:05:34 And I'm not here to talk about any others specifically or compare and contrast. I want to be really clear about what we are doing. And I think that this is a model that others have used this or very similar to it. I think one difference that we believe we bring to the table is Coinbase is the largest custodian of crypto assets in the world with the longest track record and not a blemish on it in terms of any loss of any appreciable size of any user assets. We've been doing that for much longer and with a much bigger asset size than anyone else has. We also already today have, as I mentioned, all of this Bitcoin already on our platform. And some fraction of that is Bitcoin that users want to do

Starting point is 00:06:14 more with, if only they had an easy way. And so we think giving them this option being the easiest way for people who want to to get more utility out of their Bitcoin, that is the real difference that we bring into this space, that trust, that safety, and that existing user base and asset base that can be brought to bear. And so as you mentioned, CBBT has launched on ETH and on base. Are there plans to integrate with other layer twos? And if so, how will you decide which ones to add next? Yeah, so we are open to that and considering and looking at other chains. At the moment, though, we're really focused on this launch today, on base and on Ethel 1. We always say at Coinbase is not unique to us, but it's something we say all the time. Action generates information. And by putting

Starting point is 00:06:59 this launch out there and getting these two really critical data points, on base, how does this perform on a low-cost, very fast consumer-facing consumer-friendly chain? How does this behave there? What uses do people find for it? And then sort of another point in the spectrum, as we launch on Ethel 1, the most rock, solid, secure, censorship-resistant settlement layer with a really unblemish track record availability and so forth, like for large whale settlements, what uses do people find there? And I think we'll triangulate from those data points as we consider other chains in the future. And you're also launching with a number of defy partners. Can you give some examples of where users can use their CBBT right away and what they can do with it.

Starting point is 00:07:45 Yeah, absolutely. I like to refer to this as the Gangs-All here. So, you know, either day one partners or Dow votes that are sort of winding their way through and very close to settled on places like Ave, compound, uniswap, curve, aerodrome, moonwell. The list goes on and on. We tweeted a bunch of moments, and no offense to anyone I've forgotten to rattle off there. But the message was loud and clear. We had a teaser tweet just about a month ago, just saying CBVTC and the voices that came back from the community, both individual users and also these really influential protocols that were saying, oh my gosh, why, you know, what took you so long when, how big, how big,

Starting point is 00:08:31 really validated for us that we had a vision here that was resonating with people. And the fact that we've got so many protocols, so many market makers, and so many excited consumers really activated here with us on day one is validation of that. You know, as you mentioned, there are different Dow votes. And the AVE community is considering a proposal to add CBBT. But there's been concern in the community about adding it because of what people deem a centralization risk, you know, saying that Coinbase could be a single point of failure. What's your response to that? Yep. I totally understand the concern.

Starting point is 00:09:06 And I'll be honest, I like probably most of my colleagues at Coinbase, I'm a crypto believer and fan first and foremost. And I follow this space omnivorously. And I'm excited about all kinds of ways to ring utility to Bitcoin, Bitcoin L2s, Bitcoin side chains, the lightning network that I mentioned earlier, and various ways to wrap Bitcoin. And we're seeing innovation in that space with sort of, novel or more complicated forms of cryptography, trying to get different trust models and more trust minimized setups to wrap Bitcoin. And I would say, as a crypto lover and enthusiast,

Starting point is 00:09:45 I want a thousand flowers to bloom. And also, we have seen historically, and I think with some good reason, that there's a pretty large segment of the population that is comfortable with the simplicity of the model and clarity of the model of, okay, here is some Bitcoin. It is custody one to one with the custodian that I trust, and here is a marker of that thing that is on the chain that I want to be on. And that won't be for everybody. And I want to be really clear, like, that is how CBBC operates. But for a lot of people, and we've seen, there's about $13 billion of wrap Bitcoin of various sorts out in the world today. And most of it is in this model. So although everything's a tradeoff, this does seem to be a model that has product market fit, resonates with a lot of

Starting point is 00:10:32 people, and we think we've got unique strengths to bring to bear on that model. All right. So in a moment, we're going to talk about the wider ecosystem of similar assets, as well as other issues related to CBBT. But first, a quick word from the sponsors who make this show possible. FBT is an Omnichane BTC asset, contributed by Mantle Network and Antalphal Global. Launched in early July, FBTC's TPL has already passed $125 million, making the fastest-going BTC as it this summer. FBTC's points-inspired campaign, Sparkle, has officially started, with lucrative and sustainable yields, plus points and token airdrop from Babylon, Mantle's new token cook, and more. FBTC is the BTC solution you've been waiting for.

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Starting point is 00:12:00 Cameron and Tyler Winklevoss founded Gemini in 2014 and have been pioneers for the crypto industry for over a decade. Gemini operates with a security-first mentality. From being a licensed, full-reserve exchange and custodian to offering leading security features like pass keys, Gemini continues to set the bar for compliance and innovation. Head over to Gemini.com slash unchained and start trading to earn $15 in Bitcoin. Back to my conversation with Will. Shortly before Coinbase teased, the launch of CBBT and a tweet, Bikko's wrapped Bitcoin announced that there would be an upcoming change that was not super well received by the industry. And it was that Justin's son would now be involved in custodying the Bitcoin for WBTC's reserves.

Starting point is 00:12:47 And I wondered how much that announcement had to do with Coinbase's decision to launch its own version of wrapped Bitcoin. Yeah. Well, the reality is we have been working behind the scenes on CBBT going back to last year. So this is something that had been in the works that is on our roadmap and within our plans for adding utility to Bitcoin. Lightning network support was part of that earlier this year. And this is something that had been in the works for a long time. I'm not really here to comment on any other people in the ecosystem or any other specific assets. but I can tell you, in all honesty, you know, as someone who approved those plans late last year, this is something we've been working on for quite a while. Well, one other thing about Bikko's model for WBT is that it was known that it wasn't very profitable.

Starting point is 00:13:38 It only earned probably like a few million dollars over the years. And I wondered what Coinbase's business model would be around WBT. Around CBBT. Oh, right. CBBT. Sorry. No problem. Yes.

Starting point is 00:13:52 So it's a great question. And, you know, honestly, not to put too fine a point on it, but part of my answer to why Coinbase, why this product, why now is that we don't need to make money on CBBT. This is something that we see as an ecosystem enabler. And what is good for the crypto ecosystem as a whole will ultimately benefit Coinbase in addition to lots of other stakeholders out there in the world. we see 50 plus percent of crypto market cap being tied up, wrapped up in Bitcoin. And that is so much dry powder, so much potential to drive new product innovation in this space. And we think that we've got a role to play there.

Starting point is 00:14:38 And I think that you could imagine us building other first party products in the future. You can imagine knock on effects of increased usage on base and things like that. But we have the luxury, given the strength of all. of our other businesses not to need to make this a transactional high money-making enterprise. The other thing I'll say about Coinbase relative to this product is our costs for this are going to be quite low because it's so adjacent to all of our existing operations. What do we do all day, every day? We keep hundreds of billions of dollars worth of crypto assets safe and secure over more

Starting point is 00:15:15 than a decade. This is something where we have, I would claim the greatest core competency of anyone in the world. And so this is something where our costs are going to be quite low. The product we offer is going to be really, really compelling. And we can afford to not be short-sighted or myopic about needing to make every single dollar we can on it right away. I believe another issue with Bitco's WBT was the know-your customer aspect. The custodian may know, the customer who mince the WBT in the case of Bicco, but wouldn't necessarily know who was holding it as it was trading around the world on chain at any given moment. And so I wondered if Coinbase believed that could be an issue for itself with CBBT,

Starting point is 00:16:04 and if so, how does it plan to manage that? It's a great question. Unfortunately, I'm not a lawyer and I don't even play one on TV. What I will say is that we have, I would say, the best lawyers in the, the business, regulatory and compliance people in the business, who've done a thorough analysis of this. And similar to the analysis, by the way they did previously, a couple years ago, when we launched our CBET token. And they both function sort of similarly. Once these tokens are on chain, sends and receives are happening all over the place. And this is something where we

Starting point is 00:16:34 take our compliance responsibilities very seriously, but we don't believe that it's going to present a problem for us. And I saw on X that Pleditator tweeted, quote, Coinbase can freeze in blacklist addresses transacting with CBBDC directly via the smart contract. Bicco, on the other hand, cannot freeze in blacklist addresses from transacting with WBT. First of all, is that true? And then second, if so, why did Coinbase decide to go that route?

Starting point is 00:17:01 Yeah. So I just want to be really clear here. We've got nothing to hide on this front, just like with CBEath, and very similarly to how USDC works, there is functionality within the smart contract for CBBTC that with a properly done law enforcement request or order, rather, we can blacklist an address, free funds and an address.

Starting point is 00:17:24 And I just want to be incredibly open and straightforward about that. Now, two things that I'll add as well. First, you can see this behavior on chain. You can see it as you look historically at USC and at CBE and get a sense for how much or how little this is actually happening. And the second thing I'll say is, although we take this seriously and we believe this is required for us to comply with our compliance responsibilities around the world, Coinbase has a history both of, I would say, the best compliance track record in crypto

Starting point is 00:17:56 and also very consistently and visibly fighting against perceived overreach if there are sweeping demands and things like that. So that is true. Like that capability does exist within the contract, I expect it to be incredibly rare as it has been with other assets. Okay. And so basically what triggers that is only a request from law enforcement or are there other instances beyond that? So I don't want to be imprecise or misspeak. So let me come back to you with the details if I can. But it is a very stringent process and very, very rare. All right. Well, so let's say that I was a. user who had CBBT and my CBBT did get frozen, would there be any recourse where I could go to

Starting point is 00:18:47 Coinbase or because this is all happening, you know, in this sort of on-chain way, maybe not with KIC. I don't know if, you know, a user can go to Coinbase to try to reverse that. Yep. So typically is not Coinbase making any policy decisions in this realm. So I'll give one example of like OFAC sanctioned entities. So if. OFAC has sanctioned you as an entity and said this on-chain address is on a sanctions list, no one is allowed to engage in commerce with them, then Coinbase will, I think, generally add that to the blacklist. And at that point, your discussion is with OFAC, not with Coinbase. Okay. I see. And so one other thing that I had to ask about, this is like a little nerdy thing that I sometimes am fascinated,

Starting point is 00:19:41 but you mentioned that Coinbase, you know, has this Bitcoin that it custodies and it's on its books. But I wondered in the case of CBBT, would that Bitcoin that's, it's custody for that be, you know, how would that be accounted for? Got it. I'm also not an accountant, but I think I know this one. So it is not on our books as Coinbase assets. And we've actually spelled out in updates to our terms of service as we rolled this out. And I can't quote it word for word, but please do check me on this and have a read. We spelled out that the Bitcoin that is custodyed backing the CBBT token does not become the property of Coinbase. It is the property of CBBT token holders. And we put in the most stringent

Starting point is 00:20:29 language we possibly can in place to make sure that that is clear. Also, and this is already implied by our existing user agreement, but I just think it pays to reemphasizes it. every time we can. We are never going to re-hypothecate this Bitcoin, loan it out to any other parties, use it as collateral on our balance sheet to take a Coinbase loan out. None of that will happen. The Bitcoin that is there backing CBBT will sit and do that and only that. And so something that interests me, as you said earlier, that the amount that Coinbase is currently custody adds up to, I think you said, $137 billion. And so if some good portion of people decide that they want to move that money to defy, then this could materially impact Coinbase's books.

Starting point is 00:21:21 And I think you, I can't remember the phrasing that you gave, but essentially you imply that, you know, this was going to, the launch of this product was going to benefit Coinbase. So could you just talk a little bit about your vision? because it sort of indicates a shift in mindset from the model that you're working with now, which is more around a centralized model, to something else, which is an interesting shift for a public company. So can you talk a little bit about that vision? Yeah, so we don't see it as like a hard pivot or a big shift away. I do see it as complimentary, right?

Starting point is 00:21:57 Like people at the center of this product, like most of our existing products, is some amount of trust. crypto is hard for most users to deal with. It's got sharp failure modes, a difficult risk model, and people have trusted, and we've earned the trust of people over more than a decade, they trust Coinbase with those responsibilities for them. And whether you're trusting us directly by holding Bitcoin as Bitcoin on our platform, on our retail platform, let's say, or you're trusting us sort of indirectly by saying, well, I want to turn around and mince some CVVTC and go do something else there. But the backing VTC, I'm sure it's going to stay there.

Starting point is 00:22:40 Coinbase has got my back. That trust component is still there. And with the launch of base, which is, you know, it feels like forever ago, it was only a year ago. We've signaled pretty loud and clear to the world. Like the future is on chain. We want to be there at the vanguard of that future, driving more on chain utility, getting people to build more applications, pumping up use of defy, like all of these things are incredibly exciting for us. And this, I think, is just another step really in line with that vision. And it's a unique asset and a unique user population. Again,

Starting point is 00:23:14 one of these things is not like the others. There is so much Bitcoin. There's so much value tied up in that Bitcoin. And the power of this latent user demand being able to be sort of unleashed in this way very directly onto on-chain applications, we think is going to lead to a ton of innovation. And that is ultimately great for Coinbase. The trillion-dollar question for all of crypto is, so what? Where does this go? And we're incredibly proud of our trading business. We're incredibly proud of everything that we have built.

Starting point is 00:23:50 And also, we want to push the world into on-chain utility to answer that so-what question once and for all. And just last quick question, do you have any projections for how, you know, large you expect CBBT to get within, I don't know, a year? That'd be telling. You know, we're six hours in to the launch. It'd be pretty presumptuous to me to throw out some huge number. But I guess what I really want to see is what demand is that unlock on day one? and then where are the gaps, right? Because there's going to be some users who say, that all sounds nice,

Starting point is 00:24:30 but holding my Bitcoin is all I want to do with my Bitcoin. That is the goal. And we love those users and we're never going to shove them into any other direction. There are going to be a bunch of other users say, that sounds great, but I got confused. The wallet was too confusing. I didn't understand the defy app. It felt too risky. I need more help somewhere else in the pipeline. So we think this is a great first unlock, but the job's not going to be done. All right. Well, thank you so much for coming on Unchained. Truly my pleasure.

Starting point is 00:24:59 Thanks, Laura. Don't forget, next up is the weekly news recap. Today, presented by Wondercraft AI. Stick around for this week in crypto after this short break. Pocod is the original and largest layer zero blockchain with over 2,000 plus developers. The anticipated Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem. upgrading the infrastructure with eight times higher transaction throughput and twice as fast block times, tailored court time for the needs of every protocol, trustless bridges to multiple chains,

Starting point is 00:25:30 and revise tokenomics with a token burn to reduce inflation. Perfect for GameFi and DeFi to build, grow, and scale. Get your Web3 ideas to market fast. Think big, build bigger with Pocod. Join the community at Pocodot.network slash ecosystem slash community. Did you know you can buy and sell crypto with tax benefits in an individual retirement account or IRA? I trust capital makes this possible. But what does this mean?

Starting point is 00:25:58 When you buy crypto outside an IRA, like on an exchange, you face taxes on gains. But in a Roth IRA, gains would be tax-free. I-Trust Capital also has the lowest fees in the industry and 24-7 accessibility. Start now and maximize your retirement savings with I-Trust Capital. Welcome to this week's Crypto Roundup. In today's recap, we dive into the partisan clashes from the first ever congressional hearing on DFI, Itoro's $1.5 million settlement with the SEC, and Kalsh's court victory allowing election betting.

Starting point is 00:26:32 We also cover the abrupt exit of friend.comst creators from their platform, the steep sell-off of Trump-themed meme coins after the recent debate, and Caroline Ellison's upcoming sentencing tied to the FTX scandal. Plus, we discuss FTX's $14 million settlement over. Robin Hood shares and the alarming rise in crypto scams, prompting new initiatives from Tron, Tether, and the CFTC. Thanks for tuning into the weekly news recap. Let's begin. Congressional Hearing on Defy reveals sharp partisan divide.

Starting point is 00:27:03 The first congressional hearing dedicated to decentralized finance took place this Tuesday, exposing significant partisan differences. Republicans, led by Representative French Hill, lauded decentralized finance as a groundbreaking financial innovation that enhances economic freedom by eliminating intermediaries. Defi is crucial for maintaining the U.S. leadership in global markets, Hill asserted. In contrast, Democrats expressed grave concerns about the risks associated with unregulated Defi platforms, emphasizing the potential for fraud, tax evasion, and criminal activities. Representative Brad Sherman argued that Defy poses serious threats, benefiting bad actors at the expense

Starting point is 00:27:45 of honest citizens. This system favors criminals and and tax evaders, Sherman warned. The hearing featured testimonies from several industry experts who advocated for balanced regulation that addresses risks without stifling innovation. However, the discussions highlighted the deep partisan divide over how to manage the rapidly growing defy sector, which now boasts a market cap of $67 billion and a total value locked of $89 billion. Itoro settles with SEC for $1.5 million, scales-back crypto offerings. Financial services, firm A. Toro has settled with the U.S. Securities and Exchange Commission for $1.5 million over allegations that it operated as an unregistered broker and clearing agency in its crypto business.

Starting point is 00:28:31 Without admitting or denying the charges, Aitoro agreed to limit its crypto trading offerings to a select few, including Bitcoin, Bitcoin Cash, and Ether. Law professor Drew Hinkies wrote on X that this settlement represents more ammo for the contention that those assets are not securities. However, he also said that the SEC is not helping market actors by not naming the securities. We continue to guess which assets the SEC thinks are and are not securities, and anyone whose token was listed on E. Toro is now an even more regulatory purgatory. The SEC noted that E. Toro's decision to remove certain tokens from its platform

Starting point is 00:29:08 aligns with regulatory requirements and enhances investor protection, as the company continues its operations in the U.S. Calci wins court battle against CFTC launches election contracts. Calci, a New York-based prediction market platform, has launched its election contracts after a federal judge ruled in its favor against the Commodity Futures Trading Commission challenged Calci's ability to offer election-based betting contracts. The contracts, which allow users to bet on which party will control the Senate and House, went live Thursday after the judge rejected the CFTC's attempt to block them.

Starting point is 00:29:45 The ruling followed a nearly year-long legal battle in which the CFTC argued that such contracts could undermine election integrity. However, U.S. District Judge G.A.M. Cobb ruled that the CFTC had overstepped its authority in trying to ban the contracts. Despite the judge's decision, the CFTC swiftly appealed, expressing concerns that the contracts could be manipulated, potentially affecting public trust in elections. Kalsh's ability to offer these contracts would give it a significant edge over competitors, as Polymarket, which is currently barred from serving U.S. customers. Friend.Tech creators abandoned Ethereum-based social platform. The creators of the social media web 3 platform friend.com have effectively exited the project just four months after launching its token.

Starting point is 00:30:32 On Saturday, they transferred control of the platform's smart contracts to a burn address, indicating that no further development will occur. Friend.com, which allowed users to buy and sell keys, linked to Twitter, now X accounts for access to private chats, saw significant early success, but user activity and token value quickly declined. The platform generated nearly $90 million in fees since its launch, half of which went to the development team. However, the price of its friend token plummeted by 97% from its peak, reflecting the platform's dramatic decline. While the friend.com protocol will continue to operate without the ability to be updated or collect fees, its future remains uncertain.

Starting point is 00:31:13 Investors are left grappling with significant losses, although others could potentially revive the project through a fork. Presidential debate features silence on crypto, followed by meme coin sell-off. During the highly anticipated debate between Donald Trump and Kamala Harris on Tuesday night, neither candidate mentioned cryptocurrency. A topic that some speculated might be discussed. Despite Trump's previous statements about making the U.S. a leader in crypto, the debate focused on other issues, reflecting the first. fact that crypto remains a low priority for most voters. However, the debate had a noticeable impact on the market for Trump-themed meme coins. Following the event, several of these tokens experienced significant sell-offs, with Polydify meme coins dropping 9% in market capitalization. Notably,

Starting point is 00:32:02 tokens such as Mega and Super Trump saw declines of over 16%, while other Trump-centric tokens plummeted by more than 20%. Analysts attributed this reaction to Trump's perceived underperformance in debate, leading to a sell-the-news response among investors. Former Alameda CEO Caroline Ellison faces sentencing. Caroline Ellison, the former CEO of Alameda Research, is set to be sentenced on September 24th in New York for her involvement in the collapse of FTX, the crypto exchange that left consumers facing billions in losses. Ellison, who pleaded guilty in December 2022 to multiple fraud charges, including wire fraud

Starting point is 00:32:41 and money laundering, has been a very important. a key cooperating witness in the investigation. Her attorneys are pushing for leniency, arguing that Ellison's extensive cooperation with prosecutors, in addition to her role in recovering substantial assets for FTX creditors, justifies a sentence of time served and supervised release. They emphasize that she poses no threat to public safety and has fully accepted responsibility for her actions. Ellison's sentencing follows the conviction of FTCS founder Sam Bankman-Fried, who was sentenced to 25 years in prison. Other former FTX executives, Gary Wang and Nishad Singh, are also awaiting sentencing later this year.

Starting point is 00:33:20 Speaking of FtX executives, Ryan Salame, who previously accused federal prosecutors of reneging on a plea deal regarding his partner, Michelle Bond, now faces potential sanctions after admitting he lied about the agreement. On Thursday, a federal judge revealed that Salame falsely testified last year, claiming prosecutors promised to cease investigations into Bond as part of his plea deal. The judge, expressing first. frustration over the deception indicated that Salami might face consequences for his actions. Salome, who pleaded guilty to campaign finance violations and other charges, is required to report to prison on October 11th while the judge considers the next steps. FTX seeks $14 million deal over Robin Hood shares.

Starting point is 00:34:03 Last little bit on FTCS. The bankrupt crypto exchange has proposed a $14 million settlement with emergent fidelity technologies, an investment firm co-founded by Sam Bankman Freed. The deal involves emergent assigning its claims to over $600 million in Robin Hood shares to FTX debtors. FTX CEO John Ray III stated that this settlement is crucial to avoiding costly litigation and advancing FTX's reorganization plan. The agreement, which also addresses emergence bankruptcy in Antigua,

Starting point is 00:34:34 is seen as a significant step in maximizing creditor repayments. Cryptoscams reach record high as authorities cracked down. In 2023, investors lost a staggering $5.6 billion to crypto scams, marking a 45% increase from the previous year, according to an FBI report. The majority of these losses stemmed from investment fraud, particularly pig-butchering schemes, in which scammers build trust over time with victims before convincing them to invest in fraudulent platforms. In response to the growing threat, Tron, Tether, and TRM labs have launched the Taurus. T3 financial crime unit to combat illicit activity involving USDT, especially on the Tron blockchain, which has been linked to nearly 45% of all illicit crypto transactions. Meanwhile, the CFTC has partnered with multiple organizations to raise awareness about

Starting point is 00:35:28 pig-butchering scams. The CFTC's outreach efforts include developing educational materials to help potential victims recognize and avoid these increasingly common fraud schemes. PayPal and Venmo integrate Ethereum, name service for crypto payments. PayPal and Venmo have integrated the Ethereum name service into their platforms, allowing U.S. users to send cryptocurrency by entering an ENS name instead of a traditional wallet address. Announced by ENS Labs, this feature links ENS names to the correct wallet addresses automatically, streamlining the process of crypto transactions. The integration is expected to help users avoid errors when sending funds and is initially available to users in the United

Starting point is 00:36:11 States. And that's all. Thanks so much for joining us today. If you enjoyed this recap, go to Unchained Crypto.substack.com. That is Unchained Crypto.com. And sign up for our free newsletter so that you can stay up to date with the latest in crypto. Unchained is produced by Laura Shin with help from Matt Pilchard, Juan Aronovich, Megan Gavis, Pam Majumdar, and Margaret Korea. The weekly recap was written by Juan Aronovich and edited by Nelson Wang. Thanks for listening. Unchained is now a part of the Coin Desk Podcast Network. For the latest in digital assets, check out markets daily, five days a week, with host Noel Atchison.

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Unchained - Bitcoin Is Worth Over $1 Trillion. How Much Will Coinbase’s New cbBTC Grab? - Ep. 703

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