Crypto Flipsider News – Regulators Monitor Banks; Logan Paul’s Response; SBF Pleads Not Guilty; DNP3 Founder Confession; U.S. Regulatory Clarity

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Read in the Digest:

• U.S. Regulators to Closely Monitor Banks With Cryptocurrency Exposure

• Logan Paul Responds to Coffeezilla’s Allegations, Threatens to File Lawsuit

• Sam Bankman-Fried Pleads Not Guilty to Fraud, Money Laundering Charges

• Founder of NFT DNP3 Admits to Losing Investors’ Funds Through Gambling

• Ripple’s CEO is Optimistic About U.S.’s Crypto Regulatory Clarity, Whale Moves 200 Million XRP

U.S. Regulators to Closely Monitor Banks With Cryptocurrency Exposure

In a joint statement, the Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) have warned banks about crypto.

The regulators warned banks about the “significant volatility and vulnerabilities” the crypto industry has experienced over the past year. The regulators added that banks with crypto exposure could especially be at risk.

The statement says regulators will carefully review future proposals from banks to participate in crypto-related services. This ensures that crypto-asset risks do not migrate to the banking system.

The aim is to align the crypto assets-related activities from banks with safe and sound banking practices. This would mean crypto services provided by banks comply with consumer protection, legal permissibility, and other laws.

Flipsider:

• The crypto community expects to see mass de-risking of blockchain-related companies by banks before mass adoption can begin.

Why You Should Care

The regulators would monitor banks with crypto exposure but will not prohibit nor discourage them from engaging with the crypto sector.

Logan Paul Responds to Coffeezilla’s Allegations, Threatens to File Lawsuit

Controversial YouTube creator, boxer, and director Logan Paul has responded to Coffeezilla (Stephen Findeisen), a fellow YouTube journalist, who accused him of indulging in fraudulent activities with his NFT game ‘Crypto Zoo.’

Coffeezilla accused Logan Paul of lying about the $1 million his team spent building Crypto Zoo. According to Coffeezilla, Logan Paul’s team copied a code from FlokiShibX and claimed it as their original game.

In a seven-minute YouTube clip, Logan hit back at Coffeezilla, accusing him of being addicted to clicks. He said that Coffeezilla had used his name to make money, threatening to sue him for misinformation and sharing an “illegal recording.”

According to Logan Paul, CryptoZoo’s lead developer Zack Kelling “lied” about the number of developers, saying they were 30 instead of the “three engineers” that worked on the project.

Flipsider:

• Zack Kelling, the engineer of CryptoZoo, has been previously arrested for fraudulent activities.

Why You Should Care

Although Logan Paul has clarified Coffeezilla’s claims, the involvement of Zack Kelling could affect his chances in a lawsuit.

Founder of NFT DNP3 Admits to Losing Investors’ Funds Through Gambling

On Tuesday, the well-known Twitch streamer DNP3, founder of several crypto projects including the Goobers NFT, metaverse platform Gridcraft Network, and charity-focused cryptocurrency CluCoin, acknowledged using investor funds to gamble.

In a Twitter post, the DNP3 founder admitted that the gambling addiction started with a sponsored stream and continued even when he made significant gains, eventually leading to the loss of everything, including his life savings.

In addition to losing his confidence, the Twitch streamer admitted to being completely financially and spiritually broke. The streamer, however, tendered a public apology and added that he was working with a support group to start the part to recovery.

Flipsider:

• DNP3 is also the founder of Gridcraft Network, a play-to-earn Web3 game, and the charity-focused cryptocurrency CluCoin.

Why You Should Care

The magnitude of the financial losses is uncertain, as investigations into the company’s books would need to be made.

Sam Bankman-Fried Pleads Not Guilty to Fraud, Money Laundering Charges

On January 3rd, Sam Bankman-Fried pleaded not guilty to criminal charges that he defrauded investors and caused losses worth billions of dollars, prompting the collapse of his cryptocurrency exchange FTX and hedge fund Alameda Research.

SBF was indicted on eight criminal counts, two of which are wire fraud and six on money laundering conspiracy. Authorities have accused Bankman-Fried of using FTX customer funds to support Alameda Research and making millions of dollars in political donations.

Manhattan District Judge Lewis Kaplan set the trial for October 2nd and accepted the request to extend the bail conditions of the 30-year-old entrepreneur, who is currently out on a $250 million bond.

Bankman-Fried, if convicted, could face up to 115 years in prison. He previously admitted to making a mistake while running FTX in a public statement but denied being criminally liable.

Flipsider:

• Kaplan however imposed a new bail condition that restricts Bankman-Fried’s access to FTX or Alameda assets.

Why You Should Care

His non-guilty plea was expected. SBF has previously said he didn’t intend to commit fraud but has acknowledged making mistakes while running the company.

Ripple’s CEO is Optimistic About U.S.’s Crypto Regulatory Clarity, Whale Moves 200 Million XRP

Ripple’s CEO, Brad Garlinghouse, has said he is optimistic about the U.S.’s regulatory clarity about crypto in 2023 in the wake of the collapse of multiple crypto exchanges and projects last year.

Commenting on the first day of the 118th Congress, Garlinghouse said despite the stalling of previous efforts at regulatory clarity, he is “cautiously optimistic that 2023 is the year we will (finally!) see a breakthrough.”

According to Garlinghouse, crypto regulations in the U.S. were not starting from scratch, pointing to the Securities Clarity Act, the Cryptocurrency Facilitation for Investors and Digital Assets Act (RFIA), and the Clarification for Digital Tokens Act.

His post comes amidst whales moving significant amounts of XRP tokens over the last few days after rapidly accumulating over the past five weeks. Whale Alert reported that whales had moved over 200 million XRP tokens over a short period.

Flipsider:

Garlinghouse emphasized that any effort to put together an ideal crypto regulatory framework should not be allowed to impede the progress of Congress’ legislation, despite the stakes never being higher.

Why You Should Care

Garlinghouse said the lack of agreement could provide more than a good starting point for debate in Congress for crypto regulation.

See original on DailyCoin