Market Watch | Bitcoin | $10,584 | 7 day: -0.9% | | Ethereum | $346 | 7 day: -0.4% | | All crypto | $336b | 7 day: unch | | Bitcoin dominance | 58% | 7 day: -0.4% | Prices as of 12:30 p.m. EDT
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 Futures and swaps are securities More on arguably crypto's biggest headline of the year: BitMEX and Arthur Hayes' indictment. We covered the initial headlines about this multi-billion-dollar charge in yesterday's edition of Inside Cryptocurrency. Below are some additional notes from the fallout. - Hayes claimed to process $1 trillion in transactions during 2019. Even today, BitMEX reports $2.4b in 24hr volume.
- Among many actions, the Department of Justice arrested Samuel Reed and filed criminal charges against him, CEO Hayes, and others.
- Bitcoin crashed $450 intraday when the news broke. Fear and uncertainty always impact markets, and BitMEX held approximately 160,000 bitcoin (worth $1.7b) as of the time of the announcement, according to Chainalysis Chief Economist Philip Gradwell. Bitcoin has fallen 5% since yesterday.
- Indeed, BitMEX claims to hold 36,569 bitcoin worth $387m in its insurance fund alone.
- Gradwell expects BitMEX customers to withdraw "tens of thousands of bitcoin" today. (Over 32,000 have already been withdrawn.)
- Mainstream news and TV outlets have interviewed Hayes' in the past, allowing him to talk about his "invention" of perpetual bitcoin futures, and stratospheric price predictions like $50,000 bitcoin by December 2018, and $100,000 for a DeFi token called yearn.finance (YFI).
- Bloomberg interviewed Hayes who claimed that he processed $1t in transactions within one year. RealVision gave Hayes a glowing review.
- Whether futures or swaps actually traded on BitMEX, or were simply rendered on internal servers, might never be known. The lawsuit alleges that BitMEX was tantamount to "a casino with loaded dice, manipulating both its systems and the market its customers use for its own substantial financial gain."
- BitMEX proudly offered risky leverage to retail investors, amplifying gains and losses by up to a factor of 100.
- The DoJ claims that BitMEX actively sought U.S. customers, even after purportedly withdrawing service from the country.
- The complaint quotes Hayes' saying that the price to bribe officials in the Seychelles, where BitMEX was registered but never actually conducted business, was just "a coconut."
- In June, SaaS providers Twilio and Intercom possessed tens of thousands of emails for U.S. BitMEX customers.
- In May, BMA LLC alleged that 15% of BitMEX's 2019 trading volume, or about $138b worth of transactions, was attributable to traders located in the U.S. It also described the "sheer magnitude" of BitMEX's unlawful activity as "truly staggering."
U.S. Dept. of Justice 
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 October 2020 Report from the ECB The European Central Bank (ECB) releases a lengthy report on its progress toward a central bank digital currency (CBDC), a digital euro. - ECB President Christine Lagarde writes that although she cannot commit to a "specific design," the ECB's Governing Council is nevertheless advancing work on the "possible" issuance of a digital euro.
- The report identifies several catalysts to accelerate the timeline of a digital euro launch, such as "if foreign digital money took over," the report says, a reference to China's CBDC.
- Lagarde concludes that the ECB should be ready to introduce a CBDC "shall the need arise," but for now "we maintain the options open as to whether and when this should happen."
European Central Bank
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 NicolΓ‘s Maduro Venezuelan President Nicolás Maduro said during a recent speech that his government is expanding into cryptocurrencies beyond his Petromoneda (PETRO). His government needs to evade sanctions, with dwindling Venezuelan gold reserves, minimal oil production, and the failure of Maduro's oil-backed PETRO to attract international liquidity. - Just this week, 100 protests have sweept across Venezuela due to fuel shortages and the constant failure of public services.
- Venezuela's central bank is also trying to launch a central bank digital currency (CBDC) as a way to attract investments and liquidate assets abroad.
AMB Crypto
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 PwC Crypto Tax Index PricewaterhouseCoopers (PwC) ranks countries by their crypto tax rules. The top five countries are, in order, Liechtenstein, Malta, Australia, Switzerland, and Singapore. The U.S. ranks 13th. - PwC measured jurisdictions have issued guidance to address 20 taxation issues relevant to cryptocurrencies.
- The report highlights the shortcomings of categorizing cryptocurrencies as property for tax purposes.
- There are many other ways to earn cryptocurrencies, as well, such as mining, yield farming, airdrops, forks, interest, rewards, and many other types of transactions.
- PwC concludes that in almost all countries, tax regulations have "not kept up to date with recent developments in the industry."
PricewaterhouseCoopers
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Quick Hits: - At Coinbase, the fallout continues from CEO Brian Armstrong's startling blog post, his oddly generous exit package for employees who disagreed with his views, and the ensuing "clampdown" on politics and activism at work, according to an update from Bloomberg.
- CoinTelegraph researchers provide an update on the DeFi industry.
- A former Russian oligarch has invested over $10m in a DeFi project called Independent Decentralized Finance Ecosystem (InDeFinEco).
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 |  | Written and curated by wide-eyed bitcoin watcher since $1, Aaron Wise. Streaming headline junkie, Associated Press fanboy, eye-strained news terminal watcher, 2017 founder of Cryptocurrency Newsfeed. Temporarily based in Florida while awaiting the construction of cryptopia. |  | | Editor | Edited by Eduardo Garcia in New York. Eduardo is writing an illustrated book about climate change that will be published by Ten Speed Press, an imprint of Penguin Random House. Bylines in The New York Times, The Guardian, Slate, Scientific American, and others. In one of his previous lives, Eduardo worked as a Reuters correspondent in Latin America for nearly a decade. | |
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