On July 30, the Law Commission of England and Wales insisted that the United Kingdom government categorize all crypto assets as a new form of personal property in its final report.

It published a supplemental report highlighting current legal inadequacies as an independent body primarily recommending and reviewing law reforms in its respective jurisdictions.

These inadequacies were of the current categorization of personal property and its legal implications concerning crypto assets.

The commission stated that legal “flexibility” allows for “the recognition of a distinct category of personal property,” capable of recognizing and protecting “certain digital assets.”

FTX class action lawyers move to block Sullivan & Cromwell’s dismissal motion

On July 29, FTX class action lawyers submitted a motion opposing the law firm Sullivan & Cromwell (S&C), claiming that the firm went beyond standard legal practices.

The class action lawyers alleged that S&C exceeded these legal practices in its efforts to actively facilitate the fraudulent activities of the defunct cryptocurrency exchange.

According to the submitted court documents, the class action lawyers stated that S&C lawyers created “misleading strategies that furthered FTX’s misconduct.”

The ongoing lawsuit seeks damages for multiple counts, including aiding and abetting fraud, aiding and abetting fiduciary breaches and civil conspiracy.

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Bill proposes to give Secret Service more power to pursue crypto crime

On Aug. 2, two United States Senators introduced a bill seeking to expand Secret Service powers to combat crypto-related criminal activity.

Nevada-based Catherine Cortex Masto and Iowa-based Charles Grassley introduced the “Combatting Money Laundering in Cyber Crime Act of 2024” bill.

If pushed through and approved, the bill would allow Secret Service authorities to investigate crypto transactions made by unlicensed money-transmitting businesses.

It would also enable the Service to investigate potential fraud against US financial institutions to put financial activity “on federal law enforcement’s radar.”

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Artists sue SEC over confusing security status of NFTs

On July 29, two artists sued the US Securities and Exchange Commission to determine whether non-fungible tokens (NFTs) fall within the agency’s regulatory remit.

The plaintiffs’ attorneys sought clarity on the acts that would trigger US securities laws during NFT creation and sales.

The SEC was questioned whether artists needed to “register” NFT art before selling to retail and whether public disclosures regarding “risks” were required.

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Ethereum co-founder Vitalik Buterin has just shared his vision for cross-chain interoperability between Ethereum layer-2 networks, which could vastly smoothen the experience within the Ethereum ecosystem. 

In a post on X on Aug. 6, Buterin responded to a question on the most promising paths to addressing cross-layer-2 interoperability.

The question followed Buterin’s Aug. 5 post stating “I think people will be surprised by how quickly ‘cross-L2 interoperability problems’ stop being problems and we get a smooth user experience across the entire Ethereum-verse.”

He added that he is seeing “lots of energy and will to make this happen,” before highlighting a number of Ethereum Improvement Proposals (EIPs) on the roadmap to cross-L2 compatibility.

Source: Vitalik Buterin

One stage on the roadmap is EIP-3370 which introduces a new address standard to be adapted by wallets and dApps to display chain-specific addresses by using a human-readable prefix.

Another step on the upgrade path is EIP-7683 which aims to create a standard way for different Ethereum layer-2 networks to communicate and execute trades across chains.

Currently, it's complex and often inefficient for users to trade assets between different networks so creating a new standard set of rules that all chains can follow would alleviate this issue.

Also on the roadmap is EIP-3668 which is a proposal that outlines a method for Ethereum smart contracts to access off-chain data in a standardized way.

Buterin calls this “layer-2 light clients” as it aims to standardize how Ethereum contracts can use off-chain data. This makes it easier and more efficient for developers to build applications that require large amounts of data without incurring high on-chain storage costs.

He also mentioned “cross-L2-replayable account state updates,” which he explained in a blog post in 2023. This refers to how layer-2s receive recent L1 state updates while maintaining security and low latency.

Buterin mentioned a few phase 2 updates to further improve cross-chain L2 compatibility including keystore rollups, and proof aggregation.

Related: Ethereum and layer-2 addresses surge 127% this year

With regards to compatibility with existing zero-knowledge and optimistic rollups, he said that these “stage 1” updates are “completely independent of the details of rollup tech,” before concluding:

“Eventually, I think all rollups will go zk (and existing zk rollups will have to redo their tech stack), in order to finalize to Ethereum once per slot. But that's like 5+ years away.”

Earlier this year, investment manager VanEck predicted that Ethereum L2 scaling networks would hit a $1 trillion market capitalization in six years.

Magazine: Here’s how Ethereum’s ZK-rollups can become interoperable

Kautuk Kundan, the founder and CEO of Stackr Labs says he hacked Atari’s latest crypto arcade game — built on Coinbase’s Ethereum layer-2 network Base — to prove that its Asteroids game was not built on a blockchain despite the claiming to be “on-chain.”

In an Aug. 6 post to X, Kundan shared that he and his team at Stackr Labs had sabotaged the leaderboard of Atari’s recently launched Asteroids game without playing a single game.

We hacked @base and @atari’s arcade and sabotaged the leaderboard without playing a single game -

And this is why people have trust issues with crypto apps ‍♂️

“On-chain” is becoming a throwaway term for a majority of consumer tech. As a community, we should be doing better than… pic.twitter.com/nAiMPi7cSs

— Kautuk ⟠ (@Kautukkundan) August 5, 2024

“The game is not actually on-chain. When the user starts the game nothing happens on-chain, at the end of the game when you get a score, you state that score and you put in an API call,” Kundan said.

Instead of playing the game and earning a genuine score, Kundan said he manipulated the official scoreboard of the game simply by sending “API calls to Web2 servers” — something that proves the game is not actually “on-chain” at all.

Additionally, he promised that while he and his team had not touched any other scores on the leaderboard, he suggested other actors may not have been as noble and could’ve easily manipulated their scores to rank higher on the list.

Source: Kautuk Kundan

Atari launched the Asteroids game in partnership with Coinbase layer-2 Ethereum network Base on July 25, with players being offered the chance to play the retro arcade game and climb the leaderboard to win prizes including a $1,000 Atari gift card.

Related: Play-to-earn games are the reason ‘real’ gamers hate crypto: Atari founder

“Even if the app runs off-chain, it should produce commitments that are on-chain verifiable,” Kundan said.

Kundan used the example to push something called Proof of Gameplay — an Ethereum roll-up system developed by his own firm Stackr — saying that if games and products want to call themselves “on-chain” they should be verifiable on the blockchain itself.

He reiterated that the hack was not a “negative call-out” but instead it was an “attempt to improve upon, and find solutions for persistent problems,” in crypto applications.

Magazine: How crypto bots are ruining crypto — including auto memecoin rug pulls

OpenAI co-founder John Schulman has left the artificial intelligence startup he co-founded in 2015 for competitor AI firm Anthropic, leaving just three original co-founders still serving the firm.

In addition to Schulman’s departure, OpenAI’s product manager Peter Deng also quietly left the company some time ago while president Greg Brockman is taking an extended leave of absence, according to an Aug. 5 report from The Information.

In an Aug. 6 post to X, Schulman announced his departure from OpenAI after working there for nearly nine years, saying he’d made the “difficult decision” to move to Anthropic to focus on “AI alignment” and pursue more “hands-on technical” work.

Source: John Schulman

“I’ve decided to pursue this goal at Anthropic, where I believe I can gain new perspectives and do research alongside people deeply engaged with the topics I’m most interested in,” Schulman wrote on X.

Despite the whirling controversy around OpenAI’s approach to AI safety, research, and regulation, Schulman clarified that he wasn’t leaving the company due to a lack of personal or professional support.

“I'm not leaving due to lack of support for alignment research at OpenAI. On the contrary, company leaders have been very committed to investing in this area,” Schulman said.

“My decision is a personal one, based on how I want to focus my efforts in the next phase of my career.”

Anthropic — a fierce rival of OpenAI — was founded in 2021 by OpenAI’s former vice president of research Dario Amodei and his sister Daniela Amodei, who was also an early employee at the firm.

Related: Microsoft declares OpenAI both ‘strategic partner’ and ‘competition’ in SEC filing

Following the departure of Schulman, only three of the firm’s 11 original founders remain at the company. They include OpenAI CEO Sam Altman, president Greg Brockman, and the firm’s language head Wojciech Zaremba.

Schulman played a key role in the creation of the firm’s AI-powered chatbot ChatGPT, leading OpenAI’s reinforcement training organization, which is responsible for training generative AI models to follow human instructions.

Schulman’s departure comes less than a day after Tesla CEO Elon Musk filed a new lawsuit against OpenAI and Altman.

In the latest filing, Musk alleges Altman “intentionally courted and deceived Musk, preying on Musk’s humanitarian concern about the existential dangers posed by artificial intelligence” and “assiduously manipulated Musk into co-founding their spurious non-profit venture, OpenAI.”

Musk co-founded OpenAI alongside Altman in 2015 and first sued the AI startup in February for allegedly violating promises to operate as a nonprofit.

AI Eye: $1M bet ChatGPT won’t lead to AGI, Apple’s intelligent AI use, AI millionaires surge

The United States Securities and Exchange Commission has again pushed back against Coinbase’s request for documents, including private emails from SEC Chair Gary Gensler.

On August 5, the SEC filed a motion in an attempt to deny Coinbase’s effort to access certain documents, including all SEC internal and external emails about the application of securities laws to digital assets.

The SEC argued that Coinbase's discovery requests are overly broad, seeking irrelevant material that is disproportionate to the needs of the case.

The agency claims to have already produced over 240,000 documents and is searching another 117,000 documents for responsive material.

Response from Coinbase CLO. Source: Paul Grewal

The agency stated that this “additional sweeping discovery,” including all SEC internal and external emails about the application of securities laws to digital assets is “not relevant to the Howey analysis or fair notice defense that will decide the case.”

It also argued that producing three million additional documents was “disproportional” to the requirements of the case.

“The burden of searching and producing or logging, one by one, an additional three million irrelevant external or assuredly privileged internal SEC documents that Coinbase’s limitless request entails is thus entirely disproportional to the needs of the case.”

However, Coinbase chief legal officer Paul Grewal said in a post on X on Aug. 6 that the documents were necessary to show “the record of the SEC’s inconsistent views of digital assets and its own regulatory reach.”

In July, Coinbase filed a motion asking for SEC Chair Gary Gensler’s private communications during his time at the agency as Chair from 2021, among other documents.

Grewal also argued that the agency should provide more transparency to the public.

“If the SEC is going to engage in an unprecedented regulation by enforcement campaign, the least they owe to those they target – and the public – is transparency.”

The SEC stated that it has “more than satisfied its discovery obligations,” and the motion should be denied.

Related: Coinbase files motion to compel in ongoing fight to get Gensler’s emails

The SEC sued Coinbase in June 2023, accusing the company of violating federal securities laws. It fingered 13 crypto assets that it deemed were securities, alleging that Coinbase operated as an “unregistered securities broker” since 2019.

Magazine: Godzilla vs. Kong: SEC faces fierce battle against crypto’s legal firepower

The Crypto Fear and Greed Index has just tipped into the “Extreme Fear” zone for the first time in two years, as United States spot Bitcoin exchange-traded funds reported outflows of $168.4 million in trading on Aug. 5.

The index, which measures market sentiment for Bitcoin and the broader cryptocurrency industry, fell to a score of 17 out of 100 on Aug. 5 — the lowest it has been since July 12, 2022.

The index score was 67 this time last week on July 29 — marking one of the biggest week-to-week declines in recent years.

Crypto Fear & Greed Index score. Source: Alternative.me

It comes as spot Bitcoin (BTC) ETFs reported $168 million in outflows on Aug. 5. Most came from the Grayscale Bitcoin Trust and the ARK 21Shares Bitcoin ETF at $69.1 million and $69 million respectively, Farside Investors data shows.

The Grayscale Bitcoin Mini Trust, VanEck Bitcoin ETF and Bitwise Bitcoin ETF managed to record inflows at $21.8 million, $3 million and $2.9 million, respectively, while BlackRock’s iShares Bitcoin Trust recorded a zero.

Spot Bitcoin ETF flows since Aug. 1. Source: Farside Investors

However, the spot Ether (ETH) ETFs saw a $48.8 million inflow, led by iShares Ethereum Trust at $47.1 million, according to Farside Investors.

VanEck and Fidelity’s Ether products also saw inflows of $16.6 million and $16.2 million, respectively.

Sentiment fell when Bitcoin and Ether (ETH) tanked 10% and 18% in a short two-hour window on Aug. 5.

Over $600 million in leveraged long positions were wiped out, including many altcoins that were hit far harder than Bitcoin and Ether.

Trillions of dollars were also wiped from the US stock market on Aug. 5.

The market stumble has been led by weak employment data, slowed growth among major tech stocks and revived fears of a recession.

Independent trader Bob Loukas described the last three days in a one in a 7 to 10 year event, which saw more than $500 billion wiped from the crypto market cap.

Related: Crypto market crash triggered by ‘aggressive’ selling by Jump Trading: Report

One Bitcoin analyst, Tuur Demeester, believes Bitcoin could bottom somewhere between $40,000 and $45,000 — though he cautioned against betting on it.

“In a Bitcoin bull market you don’t take bearish bets because prices can whipsaw back up in no time.”

Bitcoin has partially recovered, up 11.85% to $55,680 since Bitcoin bottomed out at $49,780 on Aug. 5, CoinGecko data shows.

Bitcoin’s change in price over the last week. Source: CoinGecko

Magazine: Could a financial crisis end crypto’s bull run?

Crypto experienced one of its worst days in years on Aug. 5. Few saw it coming, but traders’ addiction to leverage has been quietly amplifying marketwide risks for months. If leveraged trading was the kindling, the Japanese yen’s abrupt uptrend was the match. Thankfully, the fire may burn out as quickly as it started. 

Surging costs on yen-denominated loans caused the crash. Now, markets are set for a healthy rebound as traders finally pare back leverage and exposure to the yen. If broader markets stabilize — and they probably will — crypto may soon make a comeback.

Bargain-bin borrowing

It’s no secret crypto doesn’t trade on fundamentals. Prices are mainly driven by short-term institutional traders, who profit off crypto’s volatility. To boost returns, traders double down on positions with leverage, or borrowed funds — often in staggering amounts. Shortly before the crash, open interest, a measure of net borrowing, stood at almost $40 billion.

Related: US Bitcoin, Ethereum ETFs hit $6B volume amid market rout

All that borrowed money has to come from somewhere. Lately, that place has been Japan. In 2022, interest rates on United States Treasury bills rose above zero for the first time in years and kept climbing. In Japan, rates stayed rock-bottom. Trading firms cashed in — taking out huge Japanese loans to cheaply finance trades in other markets.

This is excellent. Kyle Bass breaks everything down in 5 minutes.

He thinks switching the Treasury auctions from long duration bonds to t-bills enabled the Treasury to throw another $2 trillion of liquidity into the market.

He then gets into the Yen/carry trade. pic.twitter.com/5qeV7cKKxc

— QE Infinity (@StealthQE4) August 5, 2024

It seemed like good timing. By 2023, the crypto’s bull market was in full swing. Leveraged trades — which can amplify gains or losses by 2x or more — paid off handsomely. Meanwhile, traders’ yen-denominated financing was nearly free.

This was the essence of the so-called yen carry trade, and it wasn’t unique to crypto. By 2024, yen-denominated loans to foreign borrowers reached some $2 trillion, up more than 50% from two years prior, according to a report from ING Bank.

An end to 17-year-old policy in Japan

Everything changed on July 31, when the Bank of Japan raised rates on short-term government bonds from 0% to 0.25%. (That came after a hike in March, when the bank raised the rate — for the first in 17 years — from -0.1%.) That seemingly innocuous move set off a cascade of events that eventually caused Bitcoin (BTC) and Ethereum (ETH) prices to plunge around 18% and 26%, respectively.

Even traditional markets were badly shaken, with the S&P 500 — an index of US stocks — down more than 5% on the day.

The catalyst wasn’t so much Japan’s rate hike as what followed: the surging value of the yen in foreign exchange markets. (Currencies often gain value when domestic interest rates rise.) From July 31, the USD/JPY exchange rate dropped from around 153 yen per dollar to 145. Suddenly, those yen-denominated loans became significantly more expensive.

Whether because of margin calls from lenders or general caution, traders started dumping positions by the billions. Jump Trading’s sale of more than $370 million in ETH between July 24 and Aug 4 caused a stir, but they didn’t trigger the downturn. At most, Jump amplified what was already destined to be a historic selloff.

Liquidation data for the 24 hours between the evenings of Aug. 4-5, 2024. Source: CoinGlass

In fact, more than $1 billion in leveraged trading positions — representing hundreds of thousands of trades — were liquidated between Aug. 4-5, according to CoinGlass.

Coming back stronger?

With some sicknesses, a fever is the cure. Hopefully, that’s what is happening with the markets. Traders were shaken out of high-risk leveraged positions and have finally pared back huge yen-denominated loan obligations. In crypto, net open interest now stands at $27 billion — almost $13 billion less than before the crash.

Related: Forget about Ethereum ETFs — Here's what you can do instead

Meanwhile, USD/JPY may not have room left to fall, according to ING.

If all else fails, there’s always rate cuts. Japan’s own stock market dropped some 12% on Aug. 5 — its worst one-day drop since 1987. That may force Japan’s central bank to intervene, softening the blow for borrowers. The US may be in for relief too, after a July report showed a sharp rise in unemployment.

In Japan, "If there was a shot at intervention working — this is the time," David Aspell, a senior portfolio manager at Mount Lucas Management, told Cointelegraph. “Given the recent data from the US, it looks like the Fed will be cutting much more aggressively than was thought a few months ago.”

If that scenario plays out, then crypto might be set for a late-summer rebound. Of course, crypto markets are as unpredictable as they come. If there’s one lesson in all this, it’s to think twice before aping into another leveraged trade.

Alex O’Donnell is a senior writer for Cointelegraph. He previously founded DeFi developer Umami Labs and worked for seven years as a financial journalist at Reuters, where he covered M&A and IPOs. He is also the crypto growth lead at startup accelerator Expert Dojo.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin’s decline since the April 2024 halving is starting to look similar to market movements ahead of the 2016 bull run, according to veteran trader Peter Brandt. 

In a post on X on Aug. 5, the analyst said that the “BTC decline since halving is now similar to that of the 2015-2017 halving bull market cycle.”

Brandt compared the depth of the market corrections since the halving dates noting they were very similar.

In 2016, the Bitcoin (BTC) halving was on July 9 and the asset price on that day was $650. The markets retreated during that cycle to a subsequent low of $474 in a 27% post-halving decline within a month before rocketing to a cycle high of $20,000 in December 2017.

Similarly, the recent Bitcoin slump below $50,000 now represents a 26% decline from the post-halving price of $64,962.

Source: Peter Brandt

However, some analysts warn Bitcoin could drop lower.

On Aug. 5, BTC prices dumped double figures in a fall to $49,221, according to CoinGecko.

It has lost 20% since tapping $70,000 in late July but has already shown signs of recovery reclaiming $56,000 during early trading in Asia on Aug. 6.

On Aug. 5, ITC Crypto founder Benjamin Cowen said in a post on X that the pattern had mirrored that of 2019 when markets surged for the first half of the year, then dumped in a massive correction for the second half.

Source: Benjamin Cowen

Related: $500B plunge: Largest 3-day wipeout for crypto in a year

Tim Kravchunovsky, founder and CEO of the decentralized telecommunications network Chirp, commented in a note to Cointelegraph that we could see crypto assets recover much more quickly than other risk assets as we did in 2020.

The massive selloff was not a crypto-specific issue as “macroeconomic factors are in the driving seat,” he said.

“Over the coming hours and days, we may well see a decoupling of crypto from traditional stocks, similar to what we saw in 2020.”

"Back then, crypto staged a much faster and more pronounced recovery from the pandemic-driven collapse than traditional stock markets, and we may well see something similar this time,” he added.

Magazine: Hodler's Digest Criminal at Bitcoin 2024, BTC Strategic Reserve Bill, and more: Hodler’s Digest, July 28 – Aug. 3

Cryptocurrency critic Molly White and consumer advocacy group Public Citizen have filed an updated complaint to the Federal Election Commission as it continues to allege Coinbase violated United States campaign finance laws.

The original complaint, filed on Aug. 1, claimed Coinbase breached campaign finance laws after it started negotiating the Marshals Service contract in early March.

They claim the cryptocurrency exchange donated $25 million to the pro-crypto advocate Fairshake Super PAC in May breached campaign finance laws as they were a “federal contractor.”

Coinbase denied the allegations, with Coinbase’s chief legal officer, Paul Grewal posting on X that Coinbase is exempt from certain campaign finance laws because the Marshals Service isn’t paying Coinbase with Congressionally appropriated funds, therefore not making Coinbase a federal contractor.

White and Public Citizen’s updated complaint, filed on Aug. 5, has challenged this rebuttal:

“Since the Assets Forfeiture Fund is a Congressional appropriation, Coinbase was paid for the performance of a contract from funds appropriated by the Congress, and is thus a federal contractor."

Source: Molly White

Coinbase responds again

Grewal has since responded to White and Public Citizen’s most recent updated complaint, stressing that seized cryptocurrencies are not Congressionally appropriated funds.

The seized assets came from collapsed cryptocurrency exchange FTX and the Silk Road platform. Grewal added:

“It’s also worth noting that Coinbase has donated to Dem and GOP super PACs equally with $500K to House and Senate funds for each party, respectively, for 2024.”

“White and Public Citizen appear to want to report a political bias which does not exist.”

Related: UK authorities will soon have fewer restrictions when seizing crypto

In a separate statement, Rick Claypool, Research Director at Public Citizen slammed Coinbase for “aggressively” exploiting the law laid out in the Citizens United case in 2010.

“The crypto corporation’s eye-popping contributions — made in apparent violation of longstanding pay-to-play prohibitions — demonstrate how lax enforcement emboldens corporate lawbreaking. The FEC must step up.”

White runs the platforms “Web3 is Going Just Great” — highlighting various hacks, scams and failed promises in the cryptocurrency industry — and “Follow the Crypto” — which tracks cryptocurrency industry spending to influence the upcoming US election.

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

The United States Bitcoin and Ether ETFs recorded nearly $6 billion in trading volume amid market turmoil on Aug. 5. 

According to data from CoinGlass, spot Bitcoin (BTC) ETFs registered a total daily volume of $5.24 billion on the day, with more than half coming from BlackRock’s iShares Bitcoin Trust (IBIT).

Spot Ether (ETH) ETFs recorded $715.3 million in trading volume, led mainly by Grayscale’s Ethereum Trust (ETHE) and BlackRock’s iShares Ethereum Trust (ETHA).

US spot Bitcoin ETF trading volumes on Aug. 5 Source: CoinGlass

Total volume between the two spot crypto ETF categories amounted to $5.96 billion. 

In a post to X earlier in the trading day, Bloomberg ETF analyst warned that “crazy volume” during a market rout is generally a “pretty reliable measure of fear.”

Source: Eric Balchunas

“On flip, deep liquidity on bad days is part of what traders and institutions love about ETFs, so you also want to see volume too, good for the long term,” he explained. 

Crypto markets began to plunge into the red on Aug. 4 as news emerged of Jump Trading moving hundreds of millions of Ether to exchanges. The price fall dramatically increased yesterday following big falls on the Nikkei and the Japanese Yen carry trade unwound, with Bitcoin briefly falling under $50,000 near the start of US trading hours on Aug. 5.

Related: Europe’s fourth largest hedge fund put nearly $500M in Bitcoin ETFs — Filing

Bitcoin has since bounced back slightly, trading currently at $54,288 according to data from CoinMarketCap.

Preliminary inflow data starts to trickle in

Preliminary daily inflow data from CoinGlass before the final tallies are in show mixed results across Bitcoin and Ether ETFs.

The Grayscale Bitcoin Trust and ARKB each posted outflows of $69 million on the day, while the Bitwise Bitcoin ETF (BITB) and the Grayscale Bitcoin Mini Trust (BTC) recorded inflows of $2.9 million and $21.8 million, respectively.

The Grayscale Ethereum Trust meanwhile saw outflows of $46.8 million on the day, while Bitwise and Franklin Templeton’s ETFs saw inflows of $7.2 million and $900,000 respectively.

However, in a Aug. 5 post on X, Bloomberg ETF analyst James Seyffart predicts the Bitcoin ETFs will end up with net inflow once all the data is published.

Source: James Seyffart 

Magazine: Hodler's Digest Criminal at Bitcoin 2024, BTC Strategic Reserve Bill, and more: Hodler’s Digest, July 28 – Aug. 3

Five United States Senators and three House representatives have renewed calls for the commodities regulator to ban betting on the 2024 presidential election.

They claimed that such markets “could influence and interfere with elections and further erode public trust in democracy” in an Aug. 5 letter to the Commodity Futures Trading Commission Chair, Rostin Benham.

“Allowing billionaires to wager extraordinary bets while simultaneously contributing to a specific candidate or party, and political insiders to bet on elections using non-public information, will further degrade public trust in the electoral process.”

“We urge you to promptly finalize and implement this rule to prevent the commodification of U.S. elections.”

The letter was signed by Senators Jeff Merkley, Richard Blumenthal, Chris Van Hollen, Elizabeth Warren, Sheldon Whitehouse and Representatives Jamie Raskin, John Sarbanes and Eleanor Holmes Norton.

Lawmakers’ letter to CFTC Chair Rostin Benham. Source: Congress

The lawmakers stressed that elections are not a “for-profit enterprise” as that would cheapen the sanctity of the democratic process.

“Political bets change the motivations behind each vote, replacing political convictions with financial calculations.”

All eight lawmakers are members of the Democratic party.

Related: Australia cracks down on online gambling with crypto, credit card ban

It comes as decentralized prediction platform Polymarket has seen more than $500 million in bets placed on the “Presidential Election Winner 2024” market, while the “Democratic Nominee 2024” market has tallied $319.7 million in bets.

Punters from all around the world can place bets on these markets.

Polymarket settled a $1.4 million fine with the CFTC in January, 2022, for offering more than 900 event-based binary option event contract markets without obtaining registration.

The US presidential election is now three months away.

Most cryptocurrency betting platforms have Republican candidate Donald Trump as clear favorite to win the US election — however presumptive Democrat candidate Kamala Harris has been closing that gap in recent weeks.

Magazine: THORChain founder and his plan to ‘vampire attack’ all of DeFi

In a recent interview with streamer and influencer Adin Ross, former president Donald Trump cautioned the current administration against selling the United States' Bitcoin (BTC) holdings.

The 2024 presidential candidate reiterated his stance that if the United States does not innovate on the digital asset front, other countries will, noting that China, the United States' most significant geopolitical rival, is already making advances in the cryptocurrency and artificial intelligence sectors. Trump then turned his attention to praising the virtues of the Bitcoin industry.

"It's a very modern currency, it's a very modern form, and I know a lot of very good people that are really into that world, and into that market, they're smart, they're good people, and they think it's going to be very beneficial."

The 2024 GOP frontrunner steered the conversation surrounding Bitcoin mining and artificial intelligence toward the energy generation that underpins both activities.

Bitcoin mining under a Trump administration

Fred Thiel, chairman and CEO of Bitcoin mining company MARA, took the stage at Bitcoin 2024 in Nashville, Tennessee, to share his belief that the Bitcoin mining industry would thrive under Trump.

Thiel's fellow panelists were also inclined to agree, with Jason Les of Riot Platforms saying he did not expect the policies of a potential Harris administration to deviate from that of the Biden administration.

Related: Trump made many promises to Bitcoiners — Can he keep them?

Trump's comments that the United States needs to invest heavily in energy infrastructure to support the industries of the future have been echoed by analysts and industry spokespeople alike, who see investments into Bitcoin mining infrastructure and AI data centers as ways to reinforce the energy grid.

Bitcoin as a way to pay off the $35 trillion national debt

Trump recently floated the idea of using a small amount of Bitcoin to pay off the US government's massive $35 trillion national debt.

The former pesident alluded to the power of the supply-capped asset to completely wipe away US government debt by simply appreciating against the inflating US dollar over time and slowly siphoning the value out of the crumbling fiat system.

This would allow the United States to avert a full-blown economic disaster, traditionally seen during currency collapses, by slowly and gradually transitioning most of the country's wealth into a new store of value and a sound monetary system constrained by hard mathematics.

Magazine: Bitcoin $500K prediction, spot Ether ETF ‘staking issue’— Thomas Fahrer, X Hall of Flame

Bitcoin (BTC) tumbled below $50,000 during the early Asian trading hours on Aug. 5 as risk-off sentiment gripped global markets. Bitcoin is down nearly 31% over the last three days in a “once in a 7-10 yr event” that has left analysts with mixed opinions on whether BTC will recover in the short term.

BTC/USD daily chart. Source: TradingView

Bitcoin’s drop below $50,000 has seen more than $500 billion wiped out of the crypto market in just 24 hours, accompanied by the liquidation of many leverage positions.

According to data from Coinglass, approximately $1.08 billion worth of leverage positions have been liquidated across derivatives markets, with long liquidations accounting for 74% of these, at $803.76 million.

Over the same period, more than $404.63 million worth of Bitcoin positions were liquidated, of which $282.81 million were long liquidations.

Total crypto liquidations. Source: Coinglass

The market has mixed opinions about a Bitcoin price recovery

The current correction in Bitcoin price comes against a backdrop of numerous factors, including weak US economic and jobs data on Aug. 2 that ignited recession fears and rising tensions in the Middle East.

‘Have we been hit by the perfect storm?” QCP analysts said in an Aug. 5 post on X.

Independent trader Bob Loukas referred to this as a “once in a 7-10 yr event,” which makes it difficult to tell which move the market will take immediately after such a drawdown.

Loukas is of the opinion that that correction may go on until mid-September, with a good rally at some point. “Will just look like a deeper cycle pullback by the end of it,” he added.

Fellow analyst McKenna warned Bitcoin investors not to expect a sharp recovery in the short term, adding that the market could move “sideways for 1-2 months.”

“This isn’t a v-bottom scenario. I believe the value will remain cheap for some time and enter an accumulation market phase.”

Michael van de Poppe, the founder of MN Capital, took a more neutral stance, saying the ongoing correction in BTC’s price could either define the cycle’s bottom or initiate the start of a “big crisis.”

“It’s binary. Either V-Shape back up, and it’s going to rotate towards $BTC as a safe haven alongside Gold and $ETH, taking over with DeFi as the safe haven for banking systems.”

BTC/USD daily chart- Source: TradingView

If a V-shaped recovery scenario plays out, BTC could rise sharply over the next few days, rising 32% to retest the $70,000 level. The relative strength index (RSI) is in the oversold region at 28, suggesting that the downward momentum could soon run out of steam, leading to a recovery if bulls begin to buy on the dips.

Related: Bitcoin analyst sees seller ‘exhaustion’ as BTC price rebounds 10%

Analysts target $40,000 Bitcoin

The ongoing market correction has left market participants wondering how low Bitcoin price can go before a trend reversal occurs.

CryptoQuant founder Ki Young Ju set the lower target within the $45,000 to $55,000 demand zone, which is the cost basis of “mining companies” and “Binance traders,” respectively. Traders’ cost basis has been known to support prices during bull markets.

Young Ju warns that if the price drops below this demand zone, it will confirm a bear market, as it did in November 2018, March 2020, and May 2022.

Bitcoin cost-basis comparison. Source: CryptoQuant

For popular analyst Scott Melker, Bitcoin’s price could drop below $45,000 before September.

“Polymarket traders are betting that Bitcoin will continue to drop, predicting a 45% chance it will fall below $45,000 before September. This sentiment spiked to 65% during early European trading hours amid many liquidations,” Melker said in an Aug. 5 post.

Continuing, Tuur Demeester, a Bitcoin analyst, spotted BTC trading just above $51,000, saying that the $45,000 to $40,000 demand zone could be a technical downside target for BTC.

Source: Tuur Demeester

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Financial services firm Swan Bitcoin has canceled a cryptocurrency conference it planned to host in California in October.

In an Aug. 5 X post, Swan Bitcoin CEO Cory Klippsten announced that the company would not hold the Pacific Bitcoin Festival in 2024. The event, initially planned to be held in Santa Monica, California, from Oct. 18 to Oct. 19, was roughly two months away at the time of cancellation.

“We’re fully focused on [Swan Bitcoin’s] core business right now, and after going through a staff reduction last month it just doesn’t feel like the right time for a festival,” said Klippsten.

Source: Cory Klippsten

Klippsten announced in July that the financial services firm had scrapped its immediate plans for an initial public offering after shutting down its crypto mining arm, which was first launched in 2023. At the time, the CEO said there had been “staff cuts across many functions.”

Related: Emergency ‘wall of liquidity’ to prop up yen bullish for Bitcoin — Swan

According to the Swan Bitcoin CEO, the firm would host a “smaller one-day event” on Oct. 17 but planned to return to a full conference in 2025. The announcement came just a few weeks after one of the biggest cryptocurrency conferences in the United States, Bitcoin 2024, was held in Nashville.

Speakers at the Pacific Bitcoin Festival would have included Bitcoiner Max Keiser, who has been behind many efforts to push Bitcoin adoption in El Salvador, and Marathon CEO Fred Thiel.

Magazine: How crypto bots are ruining crypto — including auto memecoin rug pulls

According to Arkham Intelligence, a wallet believed to be controlled by the United States government transferred 300 Ether (ETH), valued at approximately $699,000, to a wallet address ending in “d46” on Aug. 5.

The onchain analytics firm also claimed that the funds within the wallet, which now shows a balance of $0, resulted from a US government seizure.

Source: Arkham Intelligence

Ethereum's price action

This reported transfer of ETH by the United States government follows days of disappointing price action following the highly anticipated launch of Ethereum exchange-traded funds (ETFs) in the United States.

Independent analyst Crypto Lion said that ETH’s struggling price action following the ETF launch was mainly attributable to a lack of demand for the smart contract asset on exchanges.

The lack of demand coincides with a significant downturn across financial markets due to an interest rate increase by the Bank of Japan that sent the price of Ethereum tumbling further.

Related: Jump Trading’s Ether dump: Smart move or sign of trouble?

A snapshot of Ethereum's price action. Source: TradingView

Ether encountered significant selling pressure largely attributable to a handful of market makers, who unloaded approximately 130,000 ETH, valued at $290 million at the time of writing, onto the market. This caused Ether to sink to lows of around $2,100 on Aug. 5, and the digital asset continues to trade well below its 200-day exponential moving average.

Ethereum ETF outflows

According to the CoinShares weekly inflows report dated Aug. 5, digital asset investment vehicles recorded their first capital outflow in four weeks.

Outflows for Ethereum investment funds and products totaled $146 million for the week, bringing the total outflow figure since the launch of the Ethereum ETF in the United States to $430 million.

Flow data for digital asset investment vehicles. Source: CoinShares

CoinShares noted that the data was impacted by $603 million in outflows from Grayscale’s Ethereum Trust, which was introduced in 2017 and has seen significant outflows since the introduction of Ethereum ETFs in late July.

CoinShares analyst James Butterfill reinforced the theory that the current market downturn is primarily driven by macroeconomic factors and geopolitical tensions. This negative sentiment among investors may potentially signal a longer recovery period for ETH than was initially expected.

Magazine: Ethereum price will lag for ‘months’ as Bitcoin surges: X Hall of Flame, Roman

On Aug. 2, $2.9 trillion vanished from the stock markets, resulting in the worst day of trading since the COVID-19 crash in 2020. Mounting recession fears and other factors have also plunged the crypto markets, flooding the sentiment with fear. 

Snapshot from the $ 2.9 trillion crash from Aug. 2, 2024. Source: Radar Hits

Bitcoin (BTC) has dropped by 27%, Ether (ETH) by 34%, and more than $1.13 billion in futures positions have been liquidated. The last-day market action has dramatically changed the Fear & Greed Index from greed (74) to fear (26), very close to extreme fear. 

ear & Greed Index from Aug. 5, 2024. Source: Alternative

The CBOE Volatility Index (VIX), which measures stock market volatility based on S&P 500 index options, reached 65, the highest level since the pandemic crash. This indicates that markets could enter an extreme turbulence phase. The reasons for this downfall are not crypto-specific but clearly affect Bitcoin and especially the altcoin market. 

On Aug. 5, 2024, during an emergency analyst call, Maximiliaan Michielsen, a financial researcher at 21Shares, highlighted the potential drawbacks of the crypto market’s unique 24/7 trading availability. He noted that “crypto was the only asset that was traded all over the weekend,” making it the sole tradable asset as the adverse events unfolded.

What is driving the recent sell-off, and how have markets changed so drastically? Recent market data reflects widespread skepticism about the ability of global policymakers, particularly the US Federal Reserve, to curb inflation without inflicting significant collateral damage. Additionally, many conditions need to be factored into the equation.

The markets believe a recession could hit the US economy

On Aug. 2, the US nonfarm payrolls report showed a steep slowdown in hiring in July, with employers adding just 114,000 payrolls instead of the expected 175,000. With this new data entry, the Sahm Rule—developed by former Fed economist Claudia Sahm—hit 0.53%, according to Fed data, surging from 0.43% in June.

Real-time Sahm Rule Recession Indicator. Source: Federal Reserve of St. Louis

The Sahm Rule is designed to detect recessions as they begin, not as they unfold. A recession signal is triggered if the three-month moving unemployment rate average increases by 0.5 percentage points or more from its 12-month low.

The indicator has successfully identified the onset of every recession in the US since 1970. Therefore, the markets could have understood this latest data entry as a possible sign of an upcoming recession and acted accordingly. 

Claudia Sahm explained to Yahoo Finance that the tool was created so that others would notice when to take action. Despite the negative signal for a recession, she believes that “there is a runway, and we are not in that danger zone yet.”

The sudden market upheaval has led numerous market participants and economists to advocate for an emergency rate cut by the Federal Reserve. Jeremy Siegel, an economist and finance professor at the University of Pennsylvania, has called for a 75-basis-point rate cut, with a subsequent 75-basis-point reduction expected at the Federal Reserve’s September policy meeting.

Japan’s yen carry trade sell pressure

A significant factor behind this abrupt market shift is the Bank of Japan’s (BOJ) decision to raise its interest rates for only the second time since 2007. Though modest, at just 0.25% from its previous range of 0% to 0.1%, the BOJ’s increase has been enough to prompt a notable reaction in global markets.

Since the 1990s, Japan has experienced persistent stagflation, characterized by simultaneous rises in unemployment and inflation. To stimulate the economy, the BOJ set interest rates to nearly 0%, which created a conducive environment for arbitrage, known as the carry trade.

Under these market conditions, a prevalent strategy involved borrowing money in yen, converting it into dollars, and investing in assets like stocks, real estate, or cryptocurrencies to earn higher returns. The key to this carry trade was achieving a yield greater than the borrowing interest rate. When executed wisely, this strategy could effectively turn into almost free money, leading many traders to adopt it.

Japan’s recent interest rate increase sets a new precedent for future adjustments, potentially aligning with the trend of other global central banks implementing record-high hikes. While some traders may have managed to sell their positions in time to secure gains, many market participants may have been forced to sell in a panic to cover their operations.

Daily chart USD/Yen. Source: Trading view

Traders facing significant losses and margin calls are selling their US stocks to raise US dollars and convert it back to Japanese yen to be able to pay back their loans. This sudden change in forex trading can lead to more selling pressure on US stocks or cryptocurrencies in the short term. 

Disappointing US tech reports reignite fear of potential AI bubble

The latest data on the US economy, combined with shifting global forex conditions, has coincided with disappointing results from tech stocks. Technology shares, which have been a leading force in the US market, represent 42% of the S&P 500 index, a benchmark tracking the performance of the top 500 US companies.

On Aug. 1, Amazon fell 9% after the e-commerce giant reported weaker-than-anticipated quarterly revenue. Intel stock plunged as it announced a $10 billion cost reduction plan that would lay off 15% of its workforce. 

Despite positive revenue reports from companies like Meta, Apple or Nvidia, tech stocks have been adversely affected, suggesting that investor concerns extend beyond earnings results. This has reignited fears of a potential AI stock bubble, further intensifying market anxiety and contributing to increased sell pressure.

Investors resort to cash with geopolitical tensions

Geopolitical tensions have been affecting the markets since the Russian incursion into Ukraine in 2022. Nevertheless, the markets have progressed despite the turbulence. However, the latest tensions between Israel and Iran have made the market fear a possible greater war in the Middle East.

The last time that Iran attacked Israel was on April 15, which was in response to Israel’s attack on an Iranian embassy in Damascus, Syria, Following the attack, the price of Bitcoin nosedived as the world shook with the uncertainty of a possible war between both countries. There is a fear that a war between these archenemies could escalate into a broader global confrontation, given that the US is a staunch ally of Israel, while Russia and China have strategic alliances with Iran.

​​The extent of other countries’ involvement will hinge on their willingness to directly engage in the conflict. Nonetheless, a regional conflict in the Middle East could have widespread collateral effects, particularly on nations involved in oil production, potentially impacting global markets.

Leena ElDeeb, the research associate of 21Shares, noted in an analyst meeting that despite Bitcoin’s narrative as a safe haven, it does not consistently fulfill that role. 21Shares views BTC as an emerging store akin to gold; however, ElDeeb mentioned that during crises, like the current sell-off, “people don’t resort to gold; people resort to cash,” which can extrapolate to Bitcoin’s price. 

Bitcoin price correct expected to intensify

All these conditions exert pressure on all markets, including the crypto markets, where money is converted into cash. The popular analyst Rekt Capital, believes Bitcoin’s price downside may last for two months before a new bullish chart pattern could emerge to a breakout. 

As for its price range, the analyst told Cointelegraph to prepare for price levels close to $40.000:

“At its lowest point, Bitcoin dipped below its 50-week moving average. Without strong buyer support right now, it goes even lower, and it would trigger an even more active sell-off as it did in late 2021 and early 2022. If it doesn’t hold either, it’s worth preparing for a failure toward $42,000.”

A perfect storm appears to be brewing in the crypto market, with participants needing to take a broader perspective and stay attuned to macroeconomic events that could potentially steer the market back into positive territory.

According to public disclosures filed on Aug. 5, Capula Management, Europe’s fourth-largest hedge fund, invested nearly $500 million in Bitcoin (BTC) exchange-traded funds. 

The hedge fund, which is based in the United Kingdom and manages upward of $30 billion in investor assets, holds shares in Fidelity Wise Origin Bitcoin Fund (FBTC) and BlackRock’s iShares Bitcoin Trust (IBIT).

According to the filing, Capula owns shares worth more than $464 million in total, reflecting its portfolio as of June 30. The filings do not indicate that Capula owns any other crypto assets.

The severe market drawdown that started in July has reversed inflows into BTC ETFs, which saw nearly $175 million in net outflows between July 31 and Aug. 2, Morningstar Inc., a fund researcher, told Cointelegraph.

BlackRock’s IBIT and Fidelity’s FBTC are emerging as blue chips among BTC ETFs, with strong uptake among professional financial advisers, Roxanna Islam, head of sector and industry research at VettaFi—a fund researcher—told Cointelegraph.

Other hedge funds are also reporting sizable positions in Bitcoin ETFs. Millennium Management in May disclosed BTC ETF holdings worth nearly $2 billion, as well as a variety of Bitcoin-related assets.

ETFs bring crypto to a multi-trillion dollar market. Source: Statista

Related: Crypto ready for next phase of adoption: Winning over financial advisers

Since first listing in January, Bitcoin ETFs have pulled upwards of $50 billion in net investor inflows. Ether (ETH) ETFs followed in June and now command approximately $8 billion in assets.

The ETF structure offers benefits—including low fees, robust investor protections, and easy accounting—that make crypto more palatable to mainstream investors. Morgan Stanely, the largest wealth manager in the United States, has reportedly started allowing its 15,000 financial advisers to recommend Bitcoin to clients.

In the US alone, ETFs represent a $9 trillion market, according to Cerulli Associates, a fund researcher.

On Aug. 5, BTC ETFs saw some of the highest-ever trading volumes, with upward of $1 billion worth of shares changing hands within minutes of the market’s opening.

“[I]t’s unlikely that significant players will invest amid high volatility and unpredictable prices,” Markus Thielen, founder of 10x Research, told Cointelegraph.

Magazine: Ethereum’s recent pullback could be a gift: Dynamo DeFi, X Hall of Flame

Ether (ETH) extended its slump on Aug. 5, plunging to eight-month lows just above $2,100, as ETH transfers by Jump Trading, rising geopolitical tensions and concerns about the health of the global economy triggered a correction in all markets.

Data from Cointelegraph Markets Pro and TradingView shows that ETH fell from a high of $3,016 on Aug. 3, dropping approximately 30% to a low of $2,116 on Aug. 5.

ETH/USD daily chart. Source: TradingView

The last time Ether traded around this level was on Jan. 3, during an uptrend fueled by the anticipation of the first spot Bitcoin exchange-traded funds (ETFs) being approved in the United States.

On Aug. 5, Ether’s price fell as much as 22%, the largest one-day decline since May 2021. It emerged that popular market maker Jump Trading moved $315 million of ETH tokens to exchanges as it prepares to unwind its crypto positions.

Ethereum investment products shed over $146 million due to recession fears

As Ether dropped to $2,100, analysts fear that additional outflows could potentially drive prices below $2,000.

According to an Aug. 5 report by CoinShares, crypto investment funds saw “outflows for the first time in 4 weeks” during the week ending Aug. 3 as investors withdrew more than $528 million.

Weekly inflows into crypto investment products. Source: CoinShares

The crypto asset management firm attributed the large outflows to fears of a global recession, which “saw US$10bn wiped off total ETP AuM.”

CoinShares analyst James Butterfill said,

“We believe it is a reaction to fears of a recession in the US, geopolitical concerns and consequent broader market liquidations across most asset classes.”

The poor sentiment was mostly focused on the two largest cryptocurrencies by market capitalization, Bitcoin (BTC) and Ether, which saw $400 million and $146.3 million outflows, respectively.

Flows by asset. Source: CoinShares

Net outflows from Ether investment products have now reached $430 million since the market debut of US-based spot Ethereum ETFs on July 23

“This data masks the positive inflows of US$430m last week from the newly launched US ETFs, but offset by US$603m outflows from the incumbent Grayscale trust.”

According to data from SoSo Value, spot Ether ETFs saw a total of $229.77 outflows against $60.42 million inflows during the week of July 29 to Aug. 2.

Total spot Ethereum ETF flows. Source: SoSo Value

Ethereum’s onchain activity slumps

The crash in Ether’s price also coincides with a decline in network activity, as evidenced by the number of new and active addresses. According to data from The Block, the number of new addresses on the later-1 token has been dropping over the last month, with the sharpest decline witnessed between July 27 and Aug. 3, from 93,840 wallets hitting year-to-date lows of 82,540.

The average number of active addresses on the Ethereum network has also dropped by 13.5% from 486,740 on July 5 to 421,259 on Aug. 2.

New and active addresses on Ethereum. Source: The Block

Daily transactions on the network have also plunged from 1.17 million on July 6 to 1.11 million on Aug. 4.

Number of daily transactions on the Ethereum network. Source: The Block

The decline in these metrics following the recent launch of spot ETH ETFs in the US is an indication that some investors prefer gaining exposure to Ether through the funds rather than directly buying and owning the token.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

After more than a week of tabulating ballots, a Democratic primary between candidates in Arizona’s 3rd Congressional District could come down to a single vote.

According to data from the Associated Press, as of Aug. 5, Democrat Yassamin Ansari was ahead of Raquel Terán by a mere 67 votes, with 99% of the votes counted in Arizona’s 3rd District. Ansari has the backing of the Protect Progress Super political action committee (PAC) — an affiliate of Fairshake and Defend American Jobs — which spent more than $1.3 million to support the Democratic candidate.

Source: Washington Post

Election officials have hundreds of ballots, if not more, to tabulate before news outlets may declare a winner in the Democratic primary on July 30. However, the race will likely go to a recount, as the margin for victory will be within 0.5% of the total votes cast — roughly 40,000 to 50,000 — and required under Arizona law.

“We are still hard at work ensuring that every vote is counted,” said Ansari in an Aug. 3 statement.

Terán, who initially trailed Ansari by a few percentage votes, said on Aug. 3 that she was “narrowing the gap” and the race was “too close to call.” Cointelegraph reached out to Fairshake for comment but did not receive a response at the time of publication.

Both Ansari and Terán expressed pro-crypto views before the primary. Ansari’s campaign website proposed “lead[ing] the way in the blockchain and crypto innovation,” while Terán’s said she was supportive of “collaborative approaches to studying blockchain and crypto innovation.”

On July 16, the Protect Progress PAC used more than $1.3 million in a media buy to support Ansari. The Defend American Jobs PAC also disseminated roughly $600,000 in a media buy to support Republican Blake Masters, who lost his primary to Abraham Hamadeh in the state’s 8th Congressional District.

Democrat Andrei Cherny, supported by a Protect Progress media buy, lost his primary to Amish Shah in Arizona’s 1st Congressional District. Shah, a former state representative, voted against an Arizona House bill to clarify income tax issues around crypto and non-fungible tokens in 2022.

Crypto influencing elections?

The potential losses in the Arizona primary would come as many experts scrutinize the role money from crypto-focused interest groups may play in the 2024 election season. California Representative Linda Sánchez reportedly called Protect Progress’ support of Ansari as a means to “buy a seat in Congress” and “silence the voices” of certain voters.

Related: Coinbase denies accusation it violated campaign finance laws

Since its creation, the Fairshake PAC and its affiliates have funded ads in favor of or against politicians in several US states, seemingly either to support ‘pro-crypto’ candidates or hamper the ambitions of ‘anti-crypto’ ones. In April, Protect Progress spent roughly $3.7 million to support Democratic candidates in Alabama and Texas who won their primaries.

As of July, Fairshake had reportedly raised more than $202 million, but Federal Election Commission records suggest that some crypto contributions may have been counted twice. The Super PAC has backed and funded media buys opposing candidates in Missouri’s Democratic and Republican primaries, scheduled for Aug. 6.

Magazine: Crypto voters are already disrupting the 2024 election — and it’s set to continue

Elon Musk filed a new lawsuit against ChatGPT-maker OpenAI and its CEO, Sam Altman, reigniting the legal fight after appearing to drop the case in June, according to an Aug. 5 complaint filed in a United States federal court in California. 

Musk co-founded OpenAI alongside Altman in 2015 and sued the company in February for allegedly violating promises to operate as a non-profit. Musk filed a motion to drop his lawsuit in June after OpenAI published a blog post revealing some of Musk’s private exchanges at OpenAI.

Related: X faces controversy over using user data for training AI chatbot Grok: Report

In the latest filing, Musk alleges Altman “intentionally courted and deceived Musk, preying on Musk’s humanitarian concern about the existential dangers posed by artificial intelligence” and “assiduously manipulated Musk into co-founding their spurious non-profit venture, OpenAI, Inc.”

AI companies fetch loftly valuations. Souce: CBInsights

In support of OpenAI’s non-profit mission, Musk “lent his name to the venture, invested significant time, tens of millions of dollars in seed capital, and recruited top AI scientists.” Then, as OpenAI approached a market-ready AI product, “Altman flipped the narrative and proceeded to cash in,” according to the filing.

In its March blog post, OpenAI revealed private emails suggesting that Musk was aware of OpenAI’s for-profit pivot. He even appears to endorse the idea, arguing that only for-profit enterprises such as Musk’s flagship business “Tesla…could even hope to hold a candle to Google” and other technology giants.

“In early 2017, we came to the realization that building AGI will require vast quantities of compute,” OpenAI said. “We and Elon recognized a for-profit entity would be necessary to acquire those resources.”

Musk has since become a critic of OpenAI — and of for-profit AI technology in general — calling the ChatGPT creato a “closed source, maximum-profit company effectively controlled by Microsoft,” in a 2023 post on the X platform.

Musk’s social media platform X is reportedly under scrutiny by Irish regulators amid reports that a change in default settings allowed users’ X data to be fed into the training of Musk’s artificial intelligence chatbot, Grok.

Magazine: How crypto bots are ruining crypto — including auto memecoin rug pulls