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🔥 Ronaldo in trouble for promoting crypto

& other updates on what's happening in the space

GM, frens! Ambire here with our weekly newsletter. As always, we hope everyone is staying safe and healthy during these challenging times.

Today we’ll be discussing Ronaldo getting smoked for promoting crypto, SBF trading fish in prison, CZ and Binance situation update, the son of European Central Bank’s Chief losing money in crypto and Montenegro court approving Do Kwon's extradition.

Let’s start:

Ronaldo in trouble for promoting crypto

Guess who's also feeling the heat from their involvement with a crypto CEX? None other than football superstar, Cristiano Ronaldo. A proposed class-action lawsuit has been filed against him for promoting Binance and allegedly participating in the ‘sale of unregistered securities’.

In mid-2021 during the height of the bullrun, Binance announced its partnership with Ronaldo to launch a collection of NFTs, supposedly created by Ronaldo himself, the lowest of which was priced at $77 at the time. This move was seen as a way for Binance to gain more popularity and attract new users to their platform. However, just a year later, the same NFT is now only worth around $1.

The plaintiffs state that Ronaldo's NFT collection had incredible success, with a reported 500% increase in searches for the exchange just one week after the launch of the NFTs. The lawsuit also claims that Ronaldo's promotion led to an increase in the use of the exchange for other purposes, such as investing in unregistered securities like Binance's own token, BNB, as the exchange was not registered with the U.S. Securities and Exchange Commission (SEC).

The plaintiffs, Michael Sizemore, Mikey Vongdara, and Gordon Lewis are seeking damages and funds for legal fees. The complaint points out that Ronaldo, as a celebrity endorser, should have disclosed any payments received for promoting crypto, but failed to do so. This is in line with SEC guidance warning celebrities about the need for such disclosures.

SBF's prison life: from one of the world’s youngest billionaires to trading mackerel

Sam Bankman-Fried, the convicted founder of FTX, currently languishing in Brooklyn's Metropolitan Detention Center, has been making some interesting moves. But instead of rugging investors and creating shady startups like he used to, SBF is now trading in a new exciting currency: prison mackerel.

Mackerel has become the new unofficial currency in US federal prisons after officials banned smoking, thus replacing the previously favored currency of cigarettes. Inmates can now use pouches of preserved fish, purchased from the commissary, to pay for services from one another.

Due to his financial background and experience in trading, Bankman-Fried has quickly adapted to this new economic system. He reportedly traded some mackerel pouches with a fellow inmate for a haircut before one of his court appearances.

Truth be told, life in the Brooklyn detention center is far from glamorous for Sam. He is only allowed one non-attorney visitor per week and spends most of his time using a specialized laptop to review legal material. However, his living conditions may actually improve after he is sentenced next March and transferred to a federal prison to serve his sentence. There he will have more freedom of movement, access to educational programs and recreation opportunities.

Meanwhile, SBF has been making the best of the situation by providing tips on crypto to prison guards and making new friends. Some of his fellow unit mates include the former President of Honduras, Juan Orlando Hernández, who is awaiting trial on drug trafficking and firearms charges, as well as Genaro García Luna, Mexico's former minister of public security who was convicted earlier this year for aiding the formidable Sinaloa cartel in smuggling more than 50 tons of cocaine into the U.S. so Sam also had an opportunity to make new important connects.

What can we say? The crypto community is super proud of you, Sam.

What’s going on with Binance and CZ? An update

Binance’s (now EX) CEO’s CZ's plans were dealt another blow this week as a U.S. federal judge ruled that he is not allowed to return to his home in the United Arab Emirates while awaiting sentencing for violating the Bank Secrecy Act. This just added further uncertainty to both CZ's personal situation and Binance's future.

The ruling, issued by Judge Richard Jones, came after prosecutors argued that CZ is a flight risk due to him being one of the richest people in crypto and the lack of an extradition treaty between the U.S. and UAE.

CZ, after posting a $175 million bond, is now required to stay in the U.S. until his sentencing date on February 24, 2024. He had hoped that the court would allow him to return to Dubai, but it seems that the judge had other plans.

Meanwhile, Binance itself is facing its own set of challenges. Rival crypto exchange Coinbase's shares are now up 18% since last week, plus, Coinbase is currently serving as custodian for 13 of the 19 spot crypto ETFs pending with the U.S. Securities and Exchange Commission (SEC). It’s not looking good CZ!

Richard Teng, who is the new CEO of Binance, also faces a number of problems. Despite the recent setbacks, Teng, a former regulator himself, still wants to transform Binance into a “conventional financial entity”. He believes that implementing transparency measures such as a proper board of directors, corporate structure, and disclosure of financials will help the company regain confidence. Wish him luck with that. And rather keep your coins away from big exchanges.

ECB Сhief's son ignores her warning, loses big in crypto

Ever felt devastated after losing your bag on a crypto rug? Well, you're not alone. Apparently, even if you're the son of a prominent figure like European Central Bank President Christine Lagarde, you can still lose.

Lagarde has been a vocal critic of crypto, often warning against crypto’s speculative nature and its use for illegal activities. In a town hall with students in Frankfurt this week, Lagarde shared that one of her sons had lost significant amounts of money by investing in crypto despite her warnings.

She described how her son "ignored her royally" and went on to lose "almost all" of his investments. Even though she did not specify, whether it was a large amount, Lagarde's son still lost about 60% of his investment.

The ECB has been advocating for global regulation of crypto assets to protect consumers and prevent criminal activities such as money laundering and terrorist funding (according to them). The bank has also launched its own digital euro project in response to concerns that "privately issued currencies could displace government money".

Lagarde's hate for crypto is evident, as she believes that individuals who disregard sound investment practices, such as diversification and research, and instead pour their entire wealth into highly volatile assets, should be protected from the consequences of their own stupidity. She also clearly advocates for restricting investments to only those approved by the ECB, as if the potential for financial loss is exclusive to non-ECB-sanctioned ventures.

A good point to consider here is how these banks perceive crypto's impact on their role in the financial system. With the rise of crypto and DeFi, many are questioning if banks will become a bit obsolete or even irrelevant in a future where individuals have full control over their finances through decentralized digital assets.

This change could potentially disrupt the centuries-old banking system and its reliance on centralized authorities. Hence, it's no surprise that central banks like the ECB are pushing for regulations to maintain their control and relevance in the financial world, despite them having zero evidence against crypto.

Montenegro court approves Do Kwon's extradition

A court in Montenegro approved last Friday the extradition of Do Kwon, a former crypto entrepreneur and Terra Labs founder, who is wanted by both South Korea and the United States. Kwon, also known as Kwon Do-hyung, had been arrested in March along with his former finance officer, Han Chang-joon, on charges of forging travel documents.

Kwon and Han were found with falsified passports and identity cards from several countries, including Costa Rica and Belgium. The arrest ended a months-long chase by South Korean authorities, who had enlisted Interpol's help to issue a red notice for the duo's arrest. The Terraform founder's company collapsed last year, resulting in the loss of approximately $40 billion of investors' money.

According to the Higher Court in Podgorica, all legal requirements for Kwon's extradition are met. But since he is wanted by both countries, the decision of who will receive him now lies with the justice minister of Montenegro.

Justice minister Andrej Milovic refused to say unequivocally which country will have the privilege of getting Do Kwon, but described the extradition process as "political".

Earlier this month South Korean prosecutor Dan Sunghan said that Kwon could actually be tried in both South Korea and the United States, and spend his sentence first in one country and then the other.

In South Korea, Kwon faces charges of breaching capital markets law and could face a 40-year prison sentence. Meanwhile, in the U.S. he’s wanted for financial crimes and attempts to manipulate capital markets. The Securities and Exchange Commission (SEC) has sued him for causing "devastating losses" to U.S. retail and institutional investors.

The nature is healing, after getting rid of these high profile scammers crypto can finally move on and focus on its true potential.

The fun page

Other worthy reads

A thread on tokenized equities by wassielawyer:

A longread from Vitalik:

Gaming x crypto? A meta thread by MTS:

That's all for now, frens.

We'll see you next week. And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Thanks for joining us, and we look forward to seeing you back next week. Cheers!

Yours, The 🔥 Team

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