The Breakdown First Five - Friday, September 27, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Swan’s Mega Lawsuit

Swan Bitcoin has filed a sprawling lawsuit against several former employees for “stealing the crown jewels”. Swan alleges that the defendants stole code for mining software, used it to launch a rival company and even convinced Tether to cut Swan out of a joint venture deal. Swan referred to the plan as “rain and hellfire”. Execution of the plan coincided with Swan’s decline and massive wave of layoffs earlier this year.

4. Gensler’s Warning

During an interview with CNBC’s Squak Box, Gary Gensler warned the crypto industry “will not long persist without investor protection”. He avoided giving an opinion on Trump’s Bitcoin reserve, save for reiterating that it is not a security. Gensler seemed to urge investors to use the ETF, stating that investors now have a way to express their views. He also confirmed that BNY Mellon has been granted an exception to SAB121 and will be allowed to offer custody. 

3. WazirX Granted Moratorium

Indian crypto exchange WazirX has been granted a four-month moratorium on dealing with their affairs after losing $234M in a hack that impaired customer funds. The Singapore court found they were acting in “good faith” but urged the exchange to “think about” releasing a full list of remaining assets. The exchange said they were headed towards a winding up but will attempt to return tokens in kind to users. Customers are irate at both the platform and the government. 

2. Russia’s Crypto Network Disrupted

The DOJ has taken action to “disrupt a global cryptocurrency network” involved in Russian money laundering and sanctions evasion. In collaboration with global authorities several websites were taken down and two Russian nationals have been charged. Around $1.15B is claimed to have been transacted across the network, which the DOJ claimed had facilitated “darknet drug traffickers and ransomware operators."

1.  Tornado Cash Case Continues

Roman Storm has been unsuccessful in getting his criminal case dismissed. The judge ruled that there was no custody requirement in the legislative definition of a money transmitter, implicitly threatening the entire industry with additional requirements. Further she said that Storm had done more than merely writing code as protected speech and may have known he was handling dirty money even without direct collaboration. Storm will stand trial in December.