Key Events in Cryptocurrency: CZ Walks Free, Caroline Ellison Sentenced, and More

Binance Founder CZ Released from US Prison

Changpeng “CZ” Zhao, the founder of Binance, was released from a United States federal prison on September 27th after serving a four-month sentence for Anti-Money Laundering (AML) violations. This development follows his guilty plea in November, where he admitted to failing to implement proper AML controls at Binance, the largest cryptocurrency exchange by daily trading volumes. With an estimated net worth of $60 billion, CZ is the wealthiest individual to have served a prison sentence in the US.

Caroline Ellison’s Two-Year Prison Sentence

Caroline Ellison, the former CEO of Alameda Research, was sentenced to two years in a minimum-security prison on September 24th for her role in the collapse of FTX. The court, presided over by Judge Lewis Kaplan, also ordered her to forfeit approximately $11 billion earned from FTX. Despite the potential for a much longer sentence, Ellison received leniency due to her cooperation with the prosecution in the case against her former colleague, Sam Bankman-Fried.

Crypto CEO Charged with Bribery and Extortion

Adam Iza, the head of the crypto trading platform Zort, has been charged with fraud, bribery, and corrupt practices involving law enforcement officials. According to a United States Federal Bureau of Investigation affidavit, Iza used shell companies to conceal wealth, paid deputies for unlawful activities, and attempted to extort cryptocurrency from victims. Known as “The Godfather,” Iza allegedly spent up to $280,000 monthly to bribe law enforcement officers.

Cardano’s Governance Model vs. Ethereum’s ‘Dictatorship’

Charles Hoskinson, the founder of Cardano, criticized Ethereum’s governance model during an interview at Token2049 in Singapore. He argued that Ethereum operates as a “dictatorship” under the influence of its co-founder, Vitalik Buterin. In contrast, Hoskinson highlighted Cardano’s Voltaire-era governance overhaul, which aims to balance efficiency, effectiveness, and integrity through a decentralized model involving delegated representatives and a members-based organization called Intersect.

Kamala Harris on Crypto and AI Investment

US Vice President Kamala Harris made her first public statement on cryptocurrency during her presidential campaign. Speaking at a Wall Street fundraiser, Harris emphasized the importance of investing in artificial intelligence and digital assets while ensuring consumer protection. She also promised to create a transparent and consistent regulatory environment to foster innovation in these sectors.

Market Overview: Winners and Losers

By the end of the week, Bitcoin (BTC) stood at $66,048, Ether (ETH) at $2,685, and XRP at $0.59, with the total market cap reaching $2.33 trillion. Shiba Inu (SHIB), Wormhole (W), and Bonk (BONK) emerged as the top altcoin gainers, while Monero (XMR), Nervos Network (CKB), and TRON (TRX) were among the losers.

Memorable Quotes

• Judge Lewis Kaplan, addressing Caroline Ellison: “You’re a very strong person, Ms. Ellison, but not inviolable. Mr. Bankman-Fried had your kryptonite. You were vulnerable and you were exploited.”
• Charles Hoskinson on Ethereum: “Where does this idea of embracing layer 2s or rollups come from? Was it some random Ethereum engineer — or was it Vitalik Buterin writing a blog post about it, talking about it, and advocating for it?”
• Nic Carter on the US government’s actions: “The government’s desire to decapitate the domestic crypto industry through covert rulemaking aimed at crypto-focused banks both initiated and worsened the banking crisis of 2023, the largest since the great financial crisis in 2008.”

Prediction: Ethereum’s Future

Despite Ether’s recent rally, the odds of it reaching a new all-time high by 2025 are low. According to Polymarket, 85% of bettors believe ETH will not achieve a new ATH in 2024, following the SEC’s delay in approving options trading for spot Ethereum ETFs.

Legal Troubles and FUD

Swan Bitcoin Lawsuit

Swan Bitcoin is suing former employees for allegedly stealing its software code and using it to start a competing mining