This Week in Crypto: Can the Rally Sustain?

Bitcoin and other cryptocurrencies continued to trade sideways throughout the week, with the world's largest cryptocurrency inching above US$23,500 before paring gains.

At the time of writing, Bitcoin (BTC) is trading at US$22,823.73 (-1.62%) while Ethereum (ETH) is trading at US$1,571.38 (-2.68%). Major altcoins such as BNB, Avalanche (AVAX), and Polkadot (DOT) have also been trading in red within the same period.

Meanwhile, the broader financial markets continued to outperform, with the S&P 500 and the tech-heavy Nasdaq Composite gaining 1.10% and 1.76% respectively on Thursday. While investors are somewhat encouraged by a better-than-expected GDP report, both the crypto and broader financial markets will be looking towards next week's Federal Reserve meeting, and any further price rallies will likely be dependent on whether the Feds scale back their rate hikes.

"Bitcoin pared losses as soft-landing hopes returned following better-than-expected US GDP data. Bitcoin still looks poised to consolidate here until next week’s FOMC decision," said Oanda's Edward Moya on Thursday.

Celsius to issue bankruptcy tokens

Bankrupt crypto lender Celsius Network might be issuing a digital token as a regulated platform to repay its creditors.

In a video court hearing on Tuesday, Celsius attorney Ross M Kwasteniet said that reorganising Celsius into a licensed, publicy-traded company would enable it to raise more funds for creditors, more so than liquidating assets at today's prices. He also added that the company has been in negotiation with a number of creditors to finalise a payout plan which will involve the new token.  

Earlier this year, another US bankruptcy judge ruled that Celsius actually owns most the customer deposits in its "Earn' accounts due to the platform's "ambiguous" terms of service, which means users would likely be prevented from recovering the full amount that they deposited.

The platform halted withdrawals in June before filing for bankruptcy the following month.

Australia minister says crypto is a "duck"

Australia is set to introduce legislation in 2023 to regulate the local crypto industry.

According to Stephen Jones, the country's Financial Services minister, regulators are considering treating certain cryptocurrencies as financial products under the law, with the government planning to launch a “token mapping” exercise that would indicate which crypto assets it plans to regulate.

Jones also highlighted that the recent collapse of FTX "puts beyond the doubt" the need for crypto regulation, and the government will be focusing on crypto assets that behave like financial products despite being unregulated.

“I don’t want to pre-judge the outcomes of the consultation process we are about to embark on. But I start from the position that if it looks like a duck, walks like a duck and sounds like a duck then it should be treated like one,” Jones said interview with The Sydney Morning Herald

“I’m not that attracted to setting up a completely separate regulatory regime for something that is, for all intents and purposes, a financial product," he added.

Related: Singapore Minister Seeks Uniformity for Crypto, TradFi Regulation

Elon hodls

EV giant Tesla did not offload any BTC in the second half of 2022 despite the rapid market downturn, according to the company's Q4 report on Wednesday.

The company's financials indicate that it did not buy or sell any BTC for the second quarter in row, after it offloaded 75% of its BTC holdings in Q2. At the time of the sale, Tesla CEO Elon Musk said that the move was to “prove liquidity of Bitcoin as an alternative to holding cash on a balance sheet.”

The documents also show that Tesla is holding on to US$184 million worth of digital assets as of December 31, down from US$218 million due to crypto market's decline.

Troubles at Coinbase

US-based crypto exchange Coinbase has been slapped with a US$3.6 million fine by Dutch regulators after it was revealed that the company failed to register itself correctly before offering services.

According to the Dutch central bank (DNB), the exchange was out of compliance between Novermber 2020 and "at least" August 2022, before it eventually registered itself in September. Crypto companies operating in the European nation are required to register as money transmitters under the country's AML (anti-money laundering) rules.

Meawhile, Coinbase's CPO Surojit Chatterjee will be leaving the company after 3 years into his five-year contract as a multi-millionaire, with the executive stepping away with an estimated US$105 million he made from stock sales in addition to his US$1 million annual salary.

According to disclosures filed with the SEC (Securities and Exchange Commission), Chatterjee will also be retaining 249,315 shares of Coinbase stock, valued at US$53.02 per share at the time writing, which means that he will be walking away with a further US$13.5 million.

Despite Chatterjee's generous severance package, financial troubles continue to plague with Coinbase, with the exchange reducing its global headcount by more than 2,000 employees since June amid the crypto market downturn.

Mango bites back at SEC, Eisenburg

DeFi protocol Mango Markets is reportedly pushing forward with its relaunch despite the SEC alleging that the project's token is a security.

The platform is also suing Avraham Eisenberg for the US$47 million that Eisenberg allegedly still holds from his exploit of the protocol plus damages.

It was previously reported that Eisenburg returned US$67 million out of the US$116 million that was drained from the protocol. In October, Eisenberg and his team left Mango’s treasury with a negative balance of -US$116.7 million, according to data from OtterSec.

Assets drained include USDC, MSOL, SOL, BTC, USDT, SRM, and the platform’s native Mango coin (MNGO), effectively draining all available liquidity from Mango.

Read more: Mango Storm a-Comin’

Trading Volume

According to data from CoinMarketCap, the global crypto market cap stands at US$1.04 trillion, a 1.79% decrease since yesterday. The total crypto market volume over the last 24 hours is US$55.18 billion, which makes a 8.88% decrease.

Fear & Greed Index

Risk appetites in crypto continue to climb – the Crypto Fear and Greed Index currently stands at 51, indicating “greed."

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.