This Week in Crypto: Recession and an Accidental Millionaire

Bitcoin and other cryptocurrencies traded sideways throughout the week, with the world’s largest cryptocurrency hovering slightly above US$20,000 for now.

At the time of writing, Bitcoin (BTC) is trading at US$20,218.56 (+0.79%) while Ethereum (ETH) is trading at US$1,598.20 (+2.98%). Major altcoins such as Solana (SOL), Avalanche (AVAX), and Polkadot (DOT) have also been trading in red within the same time period.

Federal Reserve chair Jerome Powell’s recent hawkish commentary seems to have plunged the market into uncertainty again, with investors now growing wary of a possible recession.

Last week, Powell said that the Fed would continue to raise interest rates to curb inflation, and that will likely “bring some pain to households and businesses.” He also added that the Federal Reserve has an “overarching focus right now” to bring inflation back down to its 2% goal.

“Instead of looking to the broader rate path, or the terminal rate, markets are back to trading the 21 Sep FOMC odds – whether they will hike 50bp or 75bp,” QCP Capital said in its note Wednesday.

FTX says no to buying Huobi

FTX founder and CEO Sam Bankman-Fried has denied rumors that the crypto exchange has plans to acquire rival Huobi.

In a Twitter post Monday, Bankman-Fried clarified that the company is “not planning to acquire Huobi.”

Just to be explicit because apparently a lot of people are saying this:

No, we are not planning to acquire Huobi.
— SBF (@SBF_FTX) August 29, 2022

According to Bloomberg, who cited people familiar with the matter, Huobi founder Leon Li was looking to sell a 60% stake in the company, with Justin Sun and Sam Bankman-Fried’s FTX among those who were in contact with Huobi regarding the proposed stock sale.

Crypto.com accidentally creates overnight millionaire

Singapore-based crypto exchange accidentally gifted an Australian woman US$7.2 million instead of a refund of US$68.

The initial transfer occurred in May 2021 after an employee accidentally typed an account number in the payment amount field. Crypto.com only realised the mistake when conducting an audit in December 2021.

Thevamanogari Manivel reportedly failed to notify Crypto.com of the error and instead transferred the cash to a joint account. A court granted Crypto.com a freeze on the account in February 2022 but by then, most of the money had been moved to other accounts that were later frozen.

Manivel is also believed to have have spent nearly US$1 million on a five-bedroom home and transferred ownership of it to her sister. A court has ordered the sale of the property as soon as possible and for the funds to be returned to Crypto.com with interest. The case will return to court in October.

Crypto.com has been taking the brunt of crypto winter hard and is evidently cash-strapped, which leaves no room for multimillion-dollar errors. The exchange recently “lied” about only laying off 5% (260 employees) in June. Instead, company is engaging in a second round of layoffs, which are rumored to be worse than in June.

Former Bithumb chairman wins lawsuit in Singapore

Former Bithumb Holdings chairman Lee Jeong-hoon has won a lawsuit in a Singapore court regarding the listing of Bithumb coin BXA.

According to Bithumb, the court ruled on 26 August that BK Medical Group chairman Kim Byung-Kun has to return the proceeds from the ale of coins owned by BTHMB – a Singapore-based consortium.

BTHMB was jointly set up by both Lee and Kim to acquire a 50% stake in Bithumb for about 400 million won (approximately US$293 million). However, the deal collapsed after Kim failed to pay the final balance.

Kim had originally filed a suit against Lee for embezzling about 130 billion won (US$95 million), claiming that Lee failed to help Kim list the BXA token on Bithumb to raise money to finance the acquisition.

BTHMB later filed a civil suit against Kim in a Singapore court in June 2019, demanding that Kim return the proceeds from the sale of cryptocurrencies owned by the company.

After deliberation for about three years, the Singapore court ruled in favour of BTHMB. A trial on a criminal case about Kim’s embezzlement and breach of trust is also currently in progress in Singapore.

Trading Volume

According to data from CoinMarketCap, the global crypto market cap stands at US$988.57 billion, a 1.27% increase since yesterday. The total crypto market volume over the last 24 hours is US$62.46 billion, a 7.30% decrease.

Fear & Greed Index

Risk appetites are very sapped – the Crypto Fear and Greed Index currently stands at 25, indicating extremefear. The index uses 5-6 measurements to assess the current sentiment of the market and then rates that level of emotion on a scale of 1-100 – 1 is extreme fear and 100 is extreme greed.