FTX proposes ‘billions in compensation’ but not everyone is happy?

Hey there, Degens!

Looks like Gary Gensler isn't pulling any punches when it comes to his views on crypto journalism.

Things got spicy yesterday when Andrew Ross Sorkin from CNBC decided to turn up the heat during their interview with Gensler.

According to Gensler, while crypto may seem like a mere blip on the financial radar, it's punching above its weight when it comes to scams, fraud, and all-around shady business.

He's not mincing words: too much ink is spilled and too many airwaves filled with crypto chatter for something that, in his eyes, occupies such a small corner of the market.

Ah, just another day in the wild world of crypto.

Here’s what we got for you today:

• Another crypto lawsuit 👀

• FTX proposes ‘billions in compensation’ 💸

• Grayscale pulls its futures ETF plan 💬

• News from the decentralized world 🗺️

• Tweet of the week + Meme of the week + Degen of the week 😎

SEC is back again with a third crypto lawsuit ⚔️

The SEC is on a lawsuit spree, and Robinhood is the latest victim. 

They’ve been slapped with a Wells notice, which is basically a warning that the regulator might take legal action against them.

Just like last year when Coinbase got sued after a Wells notice.

The SEC alleges that:

• Robinhood violated certain securities laws related to broker-dealer registration and clearing agencies. 

• It's unclear if they'll also target specific tokens that the SEC considers securities, like they did with Coinbase and Binance.

But here's the interesting part:

Robinhood's chief legal officer, Dan Gallagher, is a former SEC Commissioner himself! 

He's basically calling the SEC's case against Robinhood "weak" and insisting that the assets listed on their platform aren't securities. 

It's like a clash of the titans!

But they're not alone - Consensys (MetaMask) and Uniswap also got Wells notices recently.

Just when the bull market was getting exciting, the SEC seems determined to rain on everyone's parade.

Resultingly, Robinhood’s stock was down nearly a percent at the close afterwards, but it’s still up 95% over the past year.

FTX proposes ‘billions in compensation’ but not everyone’s happy

And the FTX saga continues to unfold. 

The bankrupt crypto exchange just revealed its grand plan to repay creditors, plus "billions in compensation" for the time value of their investments.

Sounds good, right? 

Well, here's the catch - only creditors with claims under $50,000 will get up to 118% back. For everyone else, it's a 100% repayment.

Secondly, it will reimburse creditors for the value of their assets at the time of its bankruptcy in November 2022 when the bankruptcy happened. 

With all the crypto price moves since then, creditors now feel shortchanged.

According to FTX, this 118% deal will cover 98% of creditors by number, but of course, the big fish creditors are left out. The FTX CEO is trying to spin it as a positive, saying they're "pleased to propose a plan for 100% repayment plus interest."

So while FTX is estimating they'll dish out between $14.5 billion to $16.3 billion to creditors, the debate rages on about whether this plan is really fair and makes everyone whole?

One thing’s clear, money does not make everyone happy.

Traders rush to short Ether as Grayscale pulls its futures ETF plan

In the last 24 hours, Ether traders have been piling on the short positions, betting that Ether's price is headed down.

And this comes right after Grayscale withdrew their application for an Ether futures ETF! 

The timing couldn't be more suspicious. Three weeks before the SEC was supposed to decide on it.

The numbers don't lie:

Liquidation data shows $345 million worth of shorts are set to get wiped out if Ether rebounds just 3% from here. Meanwhile, the longs only have $237 million on the line for a 3% drop.

Even on prediction markets, a whopping 92% of participants think the SEC will deny those spot Ether ETF applications by the May 23rd deadline. 

Some analysts are raising concerns about Ethereum's lacking usage and tepid speculative interest compared to Bitcoin. They're saying the burn mechanism can't even keep up with validator issuance right now.

But just days ago, some traders were optimistically calling for an Ether breakout by late 2024 based on fractal patterns. The mood has soured in a hurry after Grayscale's move.

The traders have clearly picked their side for now.

News from the decentralized world 🗺️

• Ethereum notched $30 million of inflows, finally breaking a seven-week streak of outflows, per CoinShares data.

• Fintech firm Revolut is launching a crypto exchange for traders in the UK. 

• Bitcoin exchange inflows drop to 10-year lows after $74K all-time highs.

• Satoshi-era dormant Bitcoin address wakes up after 10 years.

• Bitcoin mining revenue hits post-halving yearly low.

• Crypto is ‘top of mind for voters’ in US swing states — Harris Poll.

• Fantasy Top is taking over X and even outpacing Solana in revenue generation…. $1.4M > $1.37M over 24hrs.

Tweet of the week 🐤

Meme of the week 🤡

Degen of the week 🤠

That’s a wrap! See you next week for more BTC madness.