LesterL

Following an investigation into the hack of Ripple co-founder Chris Larsen’s personal wallets, Hacken has discovered links to XRP’s authorized wallets.
Hacken Investigation Traces Chris Larsen’s Stolen XRP Back to Official Wallets
Blockchain security firm Hacken has disclosed connections between the recent $112.5 million hack of Ripple co-founder and chairman Chris Larsen’s personal wallets and XRP’s authorized wallet. The disclosure came through a detailed investigation following the incident, which Hacken posted on X.
🚨 @Ripple Case: Insights That Went UnnoticedDriven by peculiar intricacies surrounding a recent XRP event, our team embarked on an in-depth inquiryThe key outcome of our investigation: two wallets, that took a central stage in the incident, are connected to XRP’s authorized… https://t.co/CQDU9ggkTF— Hacken🇺🇦 (@hackenclub) February 7, 2024
The hack, which took place on Jan. 31, resulted in Larsen losing 213 million XRP, valued at $112.5 million. Following the hack, Binance CEO Richard Teng announced that his exchange had frozen $4.2 million worth of XRP stolen in the attack.
Hacken’s post on social media platform X revealed that two wallets, central to the hack, were linked to XRP’s authorized wallet. The investigation, driven by the peculiar intricacies of the event, initially focused on a wallet with an address beginning with “rJNLz3A1”, identified as the compromised XRP wallet.
Through an analysis of both incoming and outgoing transactions, Hacken’s research pointed to the transfer of a large portion of the stolen funds to various exchange addresses, including one from Kraken, allegedly used to funnel out the funds. The analysis of wallet transactions pre-dating the incident revealed longstanding ties with XRP, suggesting an intricate network of transactions with some leading back to XRP itself.
Hacken’s findings revealed a wallet address beginning with “rU1bPM4” that had significant transactions with Larsen in the past, as well as connections to the wallets used in the hack. This account, with longstanding ties to XRP and predating the incident, sent $64.6 million in XRP to Larsen and was involved in transactions with the Kraken deposit address allegedly used to funnel funds from the attack.
While Hacken has stopped short of concluding the attack was an inside job, the connections between the wallets involved and XRP’s authorized wallet have raised eyebrows.
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$XRP

The Federal Reserve terminated its enforcement action against Washington-based Farmington State Bank, previously known as Moonstone Bank and linked to FTX’s Alameda Research.
Federal Reserve Terminates Enforcement Action of FTX-Linked Farmington Bank
The Federal Reserve Board has officially concluded its enforcement actions against Farmington State Bank and its parent company, FBH Corporation. This termination marks the end of a scrutinized period for the Washington-based bank, once intertwined with the now-defunct cryptocurrency exchange FTX.
Farmington State Bank, previously operating under the moniker Moonstone Bank, found itself at the center of regulatory oversight following its association with FTX’s trading arm, Alameda Research. The Federal Reserve’s decision to terminate the enforcement action comes after the bank completed its wind-down plan, effectively ceasing its banking operations.
The enforcement action, initiated in July 2023, aimed to ensure the orderly wind-down of Farmington’s operations, safeguarding the interests and deposits of its customers. The Federal Reserve in the recent announcement stated:
The Board’s enforcement action…ensured the bank’s operations would wind down in a manner that protected the bank’s depositors. Farmington has completed its wind down plan and no longer functions as a bank.
This move also coincides with the termination of two long-standing enforcement actions against BNP Paribas, showing the Federal Reserve’s willingness to close regulatory chapters with institutions that have complied with mandated corrective measures.
The link between Farmington Bank and the volatile world of cryptocurrency trading came under scrutiny after it received approximately $11.5 million from Alameda Research through FBH Corporation in March 2022. The collapse of FTX in November 2022 prompted a re-evaluation of Farmington’s engagement in the crypto space, with the bank expressing its intent to revert to its role as a community bank.

Ark Invest’s Big Ideas 2024
Ark Investment Management (Ark Invest) published its “Big Ideas 2024” on Wednesday. “Big Ideas offers a comprehensive analysis of technological convergence and its potential to revolutionize industries and economies,” the asset management firm explained. Citing Ark’s research, the report states that “bitcoin has emerged as an independent asset class worthy of a strategic allocation in institutional portfolios.”
The Big Ideas report discusses various topics, including four “major catalysts” that Ark expects to drive the price of bitcoin in 2024. The first is the launch of spot bitcoin exchange-traded funds (ETFs) in January. Ark explained that spot bitcoin ETFs “are traded on major stock exchanges, allowing investors to buy and sell shares through their existing brokerage accounts, and should reduce the learning curve and operational complexities associated with direct investments in bitcoin.” Ark was one of the asset managers that launched a spot bitcoin ETF on Jan. 11.
The second major catalyst is the upcoming Bitcoin halving, which occurs approximately every four years. The next one is slated for April. Ark detailed:
Historically, each halving event has coincided with the beginnings of a bull market. Expected in April 2024, this halving will reduce bitcoin’s inflation rate from ~1.8% to ~0.9%.
Another major catalyst is “regulatory developments,” the report states. Ark pointed out that “The bankruptcies of FTX and Celsius have advanced the push for more transparent and open global crypto regulation, including the potential passage of a U.S. bill establishing a regulatory framework for cryptocurrencies, and the implementation of Europe’s Markets in Crypto-Assets (MiCA) regulation, which mandates licensing for crypto wallet providers and exchanges in the EU.”
The fourth major catalyst for bitcoin this year is “institutional acceptance,” Ark said, elaborating:
The shift in perception of bitcoin — from a speculative instrument to a strategic investment in a diversified portfolio — should characterize its evolution in 2024.
The asset management firm noted: “Exemplifying this evolution, Larry Fink, CEO of Blackrock, has shifted his stance from bitcoin skepticism to its potential as a ‘flight to quality.'” Blackrock, the world’s largest asset manager, was among the firms that launched a spot bitcoin ETF on Jan. 11. Its Ishares Bitcoin Trust (IBIT) has since accumulated over 70K BTC.
Last month, Ark Invest CEO Cathie Wood said her firm expects spot bitcoin ETFs to attract “substantial institutional flows” that will push the price of bitcoin “much higher.” She also said the probability of bitcoin reaching $1.5 million by 2030 has increased.
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$BTC
ETF Shift: Grayscale Cuts Bitcoin Position as Rivals Accumulate
Grayscale’s Bitcoin Trust (GBTC) has been actively decreasing its holdings, with 3,426.99 BTC being deducted from its exchange-traded fund’s (ETF) assets after Monday and 2,565.39 BTC on Tuesday.
The trust’s current balance stands at 472,345.05 BTC, with its worth estimated at $20.34 billion. Since Jan. 12, 2024, GBTC has seen a reduction in its holdings by 144,734.94 BTC, translating to an approximate value of $6.23 billion. Bitmex research shows since Jan. 11, 2024, the day prior, GBTC has shed 147,792 BTC worth $6.37 billion.
Meanwhile, Blackrock’s IBIT has been climbing the ranks, amassing an extra 3,235.87 BTC after Monday, pushing its total to 75,702.51 BTC, valued at about $3.23 billion. On Tuesday, Feb. 6, 2024, Fidelity’s FBTC boasted a reserve of 62,787.62 BTC, with a market value of $2.66 billion.
Ark Invest’s 21shares ETF increased its holdings from 15,890 BTC to 16,415 BTC. Bitwise’s BITB also experienced growth, with its reserves climbing from 15,053.66 BTC to 15,320.82 BTC as of Tuesday. The Invesco Galaxy fund, BTCO, maintained its count at 7,081 BTC, identical to two days prior. Vaneck’s HODL ETF witnessed a bump in its holdings, moving from 2,998.48 BTC to 3,054.99 BTC after Tuesday’s transactions.
Valkyrie‘s BRRR maintained its holdings at 2,649.46 BTC, with no adjustments observed. The Franklin Templeton-managed EZBC fund stands firm at 1,479 BTC, showing no changes in the last day. Wisdom Tree’s reserves saw an uplift from 276 BTC to 313 BTC. Collectively, excluding GBTC, the nine ETFs hold a combined total of 184,803.4 BTC, valued at $7.96 billion.
On Tuesday, Bloomberg ETF analyst James Seyffart spoke about the GBTC reductions tapering off. “Outflows from GBTC continue shrinking. But so are the inflows to the other products,” Seyffart remarked on the social media channel X. Observers tracking the developments have also noted a decline in Grayscale’s outflows.
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Bitcoin Transfer Fee Insights from the First Five Weeks of 2024
Although network transaction fees in 2024 are still substantial, they haven’t reached the peaks observed in mid-December 2023, the latest data from Tuesday suggests. For example, on Dec. 17, 2023, the peak average transaction fee soared to $37.67 per BTC transfer. The initial five weeks of 2024 have seen the average fee stabilize at $9.39 per transaction across all 36 days.
2024’s peak day for Bitcoin’s network transaction fees occurred on Jan. 2, marking the average transfer cost at $17.32 per transaction. Additionally, data indicates that the lowest average fee in 2024 fell to $3.68 per transaction on Jan. 28. Average-sized bitcoin fees, determined by dividing the total transaction fees within 24 hours by the transaction count, give an overall sense of cost but may be influenced by significantly high or low fees.
In contrast, median-sized bitcoin fees, identifying the central value in a dataset of daily transaction fees when sorted, provide a more precise gauge of the typical expense for users, bypassing the distortion from outliers. Therefore, while average fees might imply elevated costs due to exceptional values, median fees more accurately reflect the transaction costs most users incur.
For 2024, the average median BTC fee per transaction stands at $4.02, with Jan. 14 witnessing the highest fee day at $10.28 per transfer. The day with the lowest median-sized fee was Jan. 27, dropping to $1.67 per transaction. Currently, the fee rate for high-priority transactions at 9:00 a.m. Eastern Time (ET) on Feb. 6, 2024, is between 18-29 satoshis per virtual byte. According to Mempool.space metrics, the mempool (Bitcoin’s transaction queue) is congested with 221,799 pending transactions.
In the last week, the average transaction fee was roughly $8.40 per transfer. The week’s highest fee day took place on Saturday, Feb. 3, with an average cost of $14.86, while the lowest fee day was on Jan. 30, plunging to $4.27 per transfer.
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The U.S. and U.K. Financial Regulatory Working Group has emphasized the importance of effective regulation and oversight of crypto assets and markets. They also reiterated their support for the international work on crypto assets.
US-UK Financial Regulatory Working Group Discusses Crypto Regulation
The U.S.-U.K. Financial Regulatory Working Group (FRWG) convened in London for its ninth official meeting on Jan. 31 and issued a statement summarizing their discussions on Feb. 5. Key topics discussed by the group included crypto regulation and central bank digital currencies (CBDCs).
Participants included officials from HM Treasury, the U.S. Department of the Treasury, the Bank of England, the Financial Conduct Authority (FCA), the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Securities and Exchange Commission (SEC)

$XRP
KEY POINTS:
A federal judge has ruled in favor of the U.S. Securities and Exchange Commission (SEC) and ordered Ripple to comply with the regulator’s post-complaint discovery requests concerning XRP. Ripple must also answer an interrogatory regarding the amount of XRP institutional sales proceeds it received after the SEC complaint was filed.
Judge Grants SEC’s Motion Against Ripple
On Monday, U.S. Magistrate Judge Sarah Netburn ruled in favor of the U.S. Securities and Exchange Commission (SEC) against Ripple Labs concerning XRP.
The securities regulator seeks an order compelling Ripple to produce “2022-2023 financial statements” and “post-complaint contracts governing ‘institutional sales.'” The SEC also wants the crypto firm to “answer an interrogatory regarding the amount of XRP institutional sales proceeds it received after the complaint was filed,” Monday’s court document details, adding:
The SEC’s motion is granted in full.
The court also addressed Ripple’s objections to the SEC’s motion. The crypto firm had argued that the securities watchdog’s requests are “untimely,” asserting that the agency “has failed to justify each of its requests on the merits.” Ripple also claimed that “the information the SEC seeks has no bearing on the court’s remedies determination.”
Regarding Ripple’s financial statements, the court document explains that “At this stage, the Court sees no basis to short-circuit that inquiry by denying access to readily available information that may be probative to the remedy stage.”
As for the post-complaint contracts, “The Court is not convinced that the production of these contracts will result in an improper or costly ‘mini-trial,'” as warned by Ripple. Regarding post-complaint XRP institutional sales proceeds, the judge ruled that “the SEC has made a sufficient showing that this information may assist the Court in fashioning its remedy,” noting that “Ripple must respond to the interrogatory.” The Court has set Feb. 12 as the deadline to complete the “remedies-related discovery.”
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