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Weekend Wrap: Fed vs. Mashinsky, Crypto Karaoke Hack and Beyond

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Weekend Wrap: Fed vs. Mashinsky, Crypto Karaoke Hack and Beyond

United States federal prosecutors have rejected former Celsius CEO Alex Mashinsky’s request to dismiss commodities fraud and market manipulation charges against him. They claim that his arguments lack legal relevance and that he misread the indictment and misunderstood relevant case law. The prosecutors argue that the alleged fraud concerning the sale of Bitcoin constitutes commodities fraud and reject Mashinsky’s fair notice argument to dismiss the market manipulation charge. They assert that Mashinsky knew about and publicly denied CEL token price increases due to Celsius’s undisclosed purchases of the token, indicating an understanding of the law prohibiting manipulative conduct. The trial is scheduled for September 2024.

Decentralized finance (DeFi) protocol Goledo Finance has confirmed that it experienced a flash loan attack and has offered a 10% bounty to the attacker or threatened further legal action. The attack resulted in the theft of $1.7 million worth of cryptocurrency. Goledo Finance has identified the attacker’s wallet addresses and asked crypto exchanges to freeze the related accounts. Law enforcement agencies have been notified, and the affected lending pool and loan interests remain temporarily frozen.

Blockchain-backed karaoke platform Somesing has disclosed that it suffered a hack resulting in the theft of $11.5 million worth of its SSX tokens. About 504 million tokens that were planned for release next year and 226 million tokens held by the company were stolen. Somesing stated that the hack was conducted by professional hackers and not by any member of its team. The incident has been reported to the Cyber Investigation Unit of South Korea’s National Police Agency, and Interpol will also be contacted. Crypto exchanges listing SSX have temporarily suspended deposits and withdrawals of the token to track the on-chain transfers and identify the attackers.

The head of NFT marketplace OpenSea, Devin Finzer, has expressed an open-minded approach to acquisitions and being acquired. Although the company is not actively seeking a buyer and has no plans for acquisition, Finzer stated that if the right partnership came along, they would consider it. OpenSea has seen a decline in trading volumes and market share compared to rival Blur. Finzer criticized Blur’s approach to regulation and legalities and emphasized OpenSea’s focus on maintaining user safety by delisting fraudulent or problematic collections.

In other news, Commodity Futures Trading Commission Chair Rostin Behnam warned that the approval of spot Bitcoin exchange-traded funds (ETFs) could be misinterpreted as regulation of the asset when there is no firm oversight in place. The Hong Kong Securities and Futures Commission (SFC) cautioned against staking programs associated with the Floki ecosystem that promise annual returns of up to 100%, citing potential risks. The Floki team responded by stating that the SFC’s complaint is that the staking programs perform too well.

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