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[1/5]Zhao Changpeng, founder and chief executive officer of Binance speaks during an event in Athens, Greece, November 25, 2022. REUTERS/Costas Baltas/File Photo Acquire Licensing Rights

WASHINGTON, Nov 3 (Reuters) - Onetime crypto poster child Sam Bankman-Fried was on Thursday found guilty of defrauding customers of his now-bankrupt crypto exchange FTX, in a high-profile criminal case that rocked the industry.

But he's not the only one in regulators' sights. As token prices plummeted last year, the sector saw other stunning meltdowns that put several industry moguls into authorities' crosshairs.

Investigations are not necessarily an indication of wrongdoing, and charges may not result in convictions. All the executives below have denied wrongdoing.

Changpeng "CZ" Zhao

The U.S. Securities and Exchange Commission (SEC) sued Binance and its CEO Zhao in June for allegedly operating "a web of deception." Binance and Zhao were also sued by the U.S. Commodity Futures Trading Commission in March for operating what the regulator alleged were an "illegal" exchange and a "sham" compliance program.

The SEC alleged that Binance artificially inflated its trading volumes, diverted customer funds, failed to restrict U.S. customers from its platform and misled investors about its market surveillance controls.

The company has said the SEC's lawsuit was "unjustified by the facts, by the law, or by the Commission's own precedent." Zhao, a billionaire who was born in China and moved to Canada at the age of 12, called the CFTC's complaint "unexpected and disappointing" and said it contained an "incomplete recitation of facts."

Do Kwon

A South Korean national, Do Kwon co-founded Terraform Labs and developed the TerraUSD and Luna currencies. The market value of TerraUSD and Luna was once estimated at more than $40 billion, and their downfall precipitated a wider collapse in token prices.

Kwon faces multiple charges of fraud in the U.S. and was arrested in Montenegro earlier this year for allegedly forging documents, authorities said. The SEC has also filed civil charges against Kwon and Terraform Labs, accusing the two of "orchestrating a multi-billion dollar crypto asset securities fraud."

Kwon has denied forging documents, according to a Montenegrin court press release. In an Oct. 30 court filing, Terraform said the "SEC is evidentiarily no closer to proving that the defendants did anything wrong."

Alex Mashinsky

The founder and former CEO of crypto lender Celsius Network's company filed for bankruptcy in July 2022.

He has pleaded not guilty to U.S. fraud charges that he misled customers and artificially inflated the value of his company's proprietary crypto token. In January, New York state's attorney general sued Mashinsky, also alleging fraud. A lawyer for Mashinsky at the time said he denied those allegations and "looks forward to vigorously defending himself in court."

Mashinsky also faces lawsuits from the SEC, the CFTC and the U.S. Federal Trade Commission (FTC) that allege he touted Celsius as safe even as the company took increasingly risky steps to deliver promised returns of as much as 17%.

Barry Silbert

Silbert is the boss of crypto group Digital Currency Group whose subsidiary Genesis Global Capital filed for bankruptcy in January.

He was sued by New York Attorney General Letitia James last month along with Genesis and DCG, alleging that they defrauded customers of more than $1 billion.

Silbert called the allegations baseless and said he would fight the lawsuit in court.

"Last year, my and DCG's goal was to help Genesis weather the storm... and position Genesis for success going forward. It is unfortunate that this lawsuit omits that fundamental fact," he said.

Stephen Ehrlich

Stephen Ehrlich's Voyager Digital is another casualty of last year's crypto meltdown. The CFTC and the FTC have accused him of misleading customers about the safety of their assets while taking "excessive risks" that led to the crypto lender's demise.

Ehrlich has said he was being used as a "scapegoat for the bad actions of others at different companies."

"Having spent nearly my entire career working in regulated markets, including more than 10 years at public companies, I have never had a single blemish on my record," he said in a statement last month.

Justin Sun

The SEC in March charged Chinese cryptocurrency entrepreneur Justin Sun and his companies including the Tron Foundation with fraud, accusing him of artificially inflating trading volume for his companies' crypto tokens and concealing payment to celebrities to promote those tokens.

Sun said in a post on social media platform X that the complaint "lacks merit."

Source: Reuters stories

Reporting by Niket Nishant and Hannah Lang; editing by Michelle Price and Anil D'Silva

Our Standards: The Thomson Reuters Trust Principles.

Niket Nishant reports on breaking news and the quarterly earnings of Wall Street's largest banks, card companies, financial technology upstarts and asset managers. He also covers the biggest IPOs on U.S. exchanges, and late-stage venture capital funding alongside news and regulatory developments in the cryptocurrency industry. His writing appears on the finance, business, markets and future of money sections of the website. He did his post-graduation from the Indian Institute of Journalism and New Media (IIJNM) in Bengaluru.

Hannah Lang covers financial technology and cryptocurrency, including the businesses that drive the industry and policy developments that govern the sector. Hannah previously worked at American Banker where she covered bank regulation and the Federal Reserve. She graduated from the University of Maryland, College Park and lives in Washington, DC.

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The other crypto bosses in US authorities' crosshairs - Reuters

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Binance's open interest up by 10% as Bitcoin trading fervor hits 3 ... - CryptoSlate

Cryptocurrency exchange Binance has released its twelfth proof of reserve report, providing transparency into its reserves during a period of market instability. The latest report, with a snapshot date of November 1st, 2023, was calculated and verified by independent Chinese journalist Colin Wu.

The proof of reserve report aims to reassure users that Binance has sufficient cryptocurrency reserves to cover all customer balances and liabilities. This has become increasingly important amidst recent volatility and uncertainty in crypto markets that have led to liquidity issues at some exchanges.

Binance USD (BUSD)

USD Coin (USDC)

Litecoin (LTC)

XRP

Solana (SOL)

Chainlink (LINK)

Binance utilizes Merkle Tree cryptography to generate these reports. All customer net balances are consolidated into a Merkle Root, which acts as a cryptographic seal summarizing account balances on the snapshot date. An independent auditor then verifies that the balances match the exchanges liabilities.

For now, the transparency reports offer traders peered insights into the exchanges inner financial workings during turbulent times. The community had lost trust in centralized exchanges following the collapse of FTX in 2022. Reports like proof-of-reserves are a light at the end of the tunnel to ensure that there are enough reserves to back the customer balances.

Milk Road Writer

Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 5 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.

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Binance Releases 12th Proof of Reserve Report Is It Enough to ... - Milk Road

Bored Panda reached out to Olga to learn more about her and her work. First of all, she introduced herself: My name is Olga Vishnevskaya, I am 30 years old, I was born in the city of Kovrov, it is a small city with many military industries three hours from Moscow, but now I live in Tbilisi, Georgia. I have been drawing and painting since 2017 when Pepelangelo was born as a project and a phenomenon.

Olgas artwork featuring Pepe the Frog incorporated into iconic masterpieces is truly eye-catching. We were wondering what inspired Olga to merge a popular internet meme with classic art, and how she came up with the idea. She shared: It's a very long story. In 2017, I had no job and lived in a terrible apartment on the outskirts of St. Petersburg, now I understand that I was in a deep depression. I decided to take drawing lessons from a teacher friend of mine so that I would have at least some reason to leave the house. At first, my drawings were terrible and I failed everything I did, I often cried during the lessons. Then we decided to start working with color - I made watercolor still lifes from life. It became more fun.

For my birthday, my grandmother sent me a present - two of her old canvases. One was with Jesus and the other had a vase of irises. My grandmother is not an artist and she did not feel sorry for her work. She suggested to overpaint it with something.

I know that since ancient times, artists learn by copying the Old Masters, copying classical art. I decided to copy the portrait of Philip II by Anthonis Mor. But drawing a human head is very difficult - it consists of many shapes, in addition, every day we see humans' faces and even the slightest mistake in the drawing becomes visible - the portrait becomes ugly or frightening. Therefore, I decided to draw not a human head, but a frog's head. After all, Pepe was originally a 2D character and his head design is quite primitive. It seemed to me to embody this head in volume and make it more realistic is a good task for such an aspiring artist like me.

So I copied the costume but added Pepe's head. I did not plan to make money from this, for me it was an exercise in developing the skills of a draftsman and painter. The portrait came out very funny and I decided to make a few - to give to my friends for the New Year, because I had almost no work and money.

Olga continued: In my youth, I was a regular visitor to anonymous imageboards, and there I saw some Pepe memes. In the Russian-speaking segment of the internet, he has always been a symbol of loneliness, melancholy and bright sadness, he has never had a political context. Of course, I had a folder on my desktop with my favorite Pepes. Later, Pepe became for me a set of geometric shapes - here is light, and here is shadow. Here is yellow and here is green. And now his head is turned and the light falls in a different place ... Pepe has become my artist's training equipment. At some point, I was terribly tired of green paint, people only wanted Pepe paintings from me. It seemed to me that I was trapped, that I was a prisoner of Pepe. Now Pepe for me is a whole layer of culture and a huge community. In such a short time, Pepe's existence has become such a complex cultural phenomenon that it can no longer be explained in a small text. I'm glad to be a small part of this story.

Pepelangelo is my full-time job. Painting itself is not 100 percent of my time - there is also communication with customers, maintaining social networks, purchasing materials, searching for references, taking photos and videos. I also opened a bar in St. Petersburg, but now I dont manage it, my friend does it for me. It does not bring money, only expenses.

Olgas reinterpretation of classic art with Pepe adds a humorous and satirical dimension. We asked Olga what messages or emotions she aims to convey through these juxtapositions.

I love the idea that a fascination with memes and characters from a certain underground internet culture can become art if you put the time, effort and skill into it. I believe that art is hard work, hours of effort and 90% craft and not a talent given by nature. I enjoy the idea that my art helps people show their hobbies to family and guests - showing art on the wall is much cooler than a picture on a smartphone. We spend a lot of time online and memes have become an integral part of our lives, they evoke a lot of emotions in us, this is modern culture. My painting helps make this hobby more real to the physical world, because we still live in the physical world. 🙂 In short, I just like to prove with my paintings that our feelings about memes are serious, they matter, shared Olga.

We were also curious to know what are the biggest challenges that Olga faces in her creative process. She wrote: Its still hard for me to believe that Im an artist, sometimes it seems to me that Im deceiving people, but in fact Im not an artist, I just create images with colored spots. It's hard for me to think about being an artist and try to take it seriously - have plans, think of it as a career. I also get upset when I see 'art' that someone created in an evening without trying very hard being sold at a high price. I would also like to find time for professional art education. I think I'll be a very bad student, but that's no reason not to try.

And lastly, Olga added: It seems cool to me that you can spend tens of hours and thousands of dollars on a comic frog. This makes us believe that human thought and hard work can make any seemingly insignificant thing interesting, beautiful and deep. There is a lot of fast in the modern world - fast fashion, fast food, fast art. It's hard to enjoy this. I believe that to enjoy something you have to know a lot about the thing you enjoy and spend a lot of time.I would really like to try myself not only in painting, but also in sculpture and design. I plan to finish a few large paintings and stop taking commissions to focus on new directions. I would also like to work on a personal exhibition. I have so many ideas and plans, I will be happy even if I manage to realize half of them.

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40 Renowned Art Pieces Replicated By This Artist But With Pepe ... - Bored Panda

Numerous GROK tokens have emerged after the launch of X's new chatbot AI. But be wary of investing too quickly.

The release of Elon Musks new AI chatbot Grok has triggered an explosion of speculative cryptocurrency tokens seeking to cash in on the hype. In just one weekend, nearly 400 different GROK tokens were anonymously created on platforms like Ethereum.

But what are they and are they worth trading? Well, there are plenty of reasons to stay away if youre not prepared to make a swift exit.

On Saturday, November 4, 2023, the eccentric billionaire Elon Musk unveiled Grok an AI chatbot with a rebellious streak. Grok is designed to challenge popular AI chatbot ChatGPT, which has taken the world by storm in recent months.

According to Musk, Grok has been in development by his new company xAI and has access to posts on X, the social media platform formerly known as Twitter which Musk now owns. Musk revealed that Grok will initially be available only to premium subscribers on X, before eventually being released to the wider public.

However, as with all events adjacent to crypto-world (of which Musk is tangentially a part), quick-fingered individuals have already created a number of tokens with the Grok name. None of them have been claimed by X, Grok or Musk.

Some of these tokens attracted millions in trading volumes and delivered huge short-term gains, letting early investors multiply their money almost overnight. One GROK token on the Base network reached a market cap of $4.56 million with $4.78M in 24-hour trading volumes at the time of writing.

Another GROK token launched on Ethereum rallied over 1300% from its debut, hitting a market cap of over $9 million. There are currently numerous tokens across several chains, including Ethereum, Base, BNB Chain, Pulse and Solana. None of which are endorsed by Grok, X, their teams, or owners.

Grok-mania appears to be another manifestation of the shitcoin phenomenon, where tokens are rushed out to exploit buzz around hot topics. Unlike memecoins, which are based on memes like Doge or Pepe the frog, Grok tokens arent even purporting to be funny.

However, these Grok-inspired tokens have no inherent utility and lack fundamentals beyond the initial excitement around Grok itself. Their anonymous creators are looking to capitalize on hype rather than building anything of lasting value.

While potentially lucrative in the short term, investing in these assets is undoubtedly risky due totheir uncertain fundamentals. The mania could quickly evaporate once the hype around Grok dies down. We have seen similar market pumps and sudden evaporation of interest with AI tokens, which exploded in popularity earlier in 2023.

As one crypto sector falls out of favor, they simply jump on the next hot trend. For now, the Grok token craze represents the endless creativity of crypto developers to exploit pump and dump dynamics. But its still uncertain whether any of these tokens can evolve to offer meaningful utility in the long run.

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Grok Tokens Market Cap Hits Over $10M: Be Wary of Musk's AI ... - CCN.com