This Week on Crypto Twitter: Binance’s CZ and the SEC’s Gary Gensler Face Stiff Criticism

Illustration by Mitchell Preffer for Decrypt

Once again, U.S. regulators offered very little to the international crypto community to chew on this week. VanEck’s SEC-approved Ethereum futures ETF was confirmed on Thursday, however, adding modest gains to the bags of Ethereum (ETH) holders. Beyond that, lawmakers in Washington still appear to be dragging their feet compared to their European counterparts—distracted as they were with a very close call with a government shutdown.

The denizens of Crypto Twitter were anything but sedentary, however. The week began with news of a $200 million exploit on Mixin Network, a decentralized exchange-slash-wallet project that enables cross-chain cryptocurrency transfers.

The weird part? Look how high that bounty offer is…

From @MixinKernel to the Mixin Network Exploiter: “… You can keep $20M of the assets as a BUG Bounty Reward for the BUG…” https://t.co/Zb9H43uYXA pic.twitter.com/DDHCpKzGbB

— PeckShield Inc. (@peckshield) September 27, 2023

In similar news, the Seychelles-based exchange HTX (formerly Huobi) was also exploited. TRON CEO and HTX advisor Justin Sun also offered the hackers a high bounty—he even offered them a job.

We are willing to offer 5% of the stolen amount (400,000 USD) as a white hat reward to encourage the hacker to return the stolen funds. If the hacker returns the funds, we will also hire them as a security white hat advisor for HTX.

— H.E. Justin Sun 孙宇晨 (@justinsuntron) September 25, 2023

Alexander Grieve, a government affairs lead at tech investment firm Paradigm, tweeted about the dangers of viewing computing power as a national resource. While this has not happened in the U.S. so far, Grieve’s reflections were sparked by a Semafor article that implied it could be a potential avenue for lawmakers to explore.

If we start viewing compute capacity in a similar way, and reporting on who is using how much of it, expect similar political and media pressure to be targeted at cloud service providers that service large crypto industry players. “Operation Chokepoint”, but for computing power.

— Alexander Grieve (@AlexanderGrieve) September 25, 2023

On Tuesday, popular crypto sleuth ZachXBT couldn’t resist doxxing Ben Armstrong (formerly known as crypto influencer “BitBoy”) after the latter tweeted that he was in a “special location.” Turns out Armstrong was arrested in the middle of his livestream to 2,500 people. The charge? Loitering at a former business partner’s house.

special location @inversebrah pic.twitter.com/WdcsjbIglt

— ZachXBT (@zachxbt) September 26, 2023

Crypto analyst Adam Cochran believes TRON CEO Justin Sun is in tougher financial straits than he lets on. While this is only speculation, Cochran’s warning recalls last year when ostensibly solvent crypto companies fell one after the other.

6/6

Based on these values + stUSDT and JustLend, I’d guess Justin has a debt of around $2.4B in user assets owed across Huobi and Tron ecosystems, all without users being any the wiser.

Not sure why anyone would expect different from “HTX”

🤷‍♂️

— Adam Cochran (adamscochran.eth) (@adamscochran) September 25, 2023

Bloomberg ETF analyst James Seyffert saw the SEC engage in yet more delaying tactics in dealing with the pending Bitcoin ETF applications the regulator has to review.

This may put the hammer down for any hopes of an ETF approval this year? If they went on Ark/21 shares already, we may see delays on all the other filings today too? BlackRock, Bitwise, VanEck, Invesco, Wisdomtree, Fidelity & Valkyrie a all due in mid Oct … pic.twitter.com/XiFbxIrIRK

— James Seyffart (@JSeyff) September 26, 2023

Grilled Gensler, anyone?

One popular fad on Twitter this week was sharing videos of SEC Chair Gary Gensler being interrogated by the House Financial Services Committee.

#WATCH: Chairman @PatrickMcHenry to SEC Chair Gensler:

“While your time in this role may be temporary, the repercussions of your actions may be permanent for the agency.”

📖 Read more 🔗https://t.co/o4DnDYY79W

📺 Watch his opening remarks 👇 pic.twitter.com/iiKedfCDlg

— Financial Services GOP (@FinancialCmte) September 27, 2023

Here’s Gensler fumbling when asked whether tokenized collectibles constitute securities.

BREAKING: GARY GENSLER CONFIRMS THAT THE PURCHASE OF A @Pokemon CARD DOES NOT CONSTITUTE A SECURITY TRANSACTION, BUT STUMBLES WHEN ASKED ABOUT THE PURCHASE OF A TOKENIZED @Pokemon CARD pic.twitter.com/KLJZf4o1yv

— DEGEN NEWS 🗞️ (@DegenerateNews) September 27, 2023

Aaand here’s a picture of a couple of blockchain fans in Washington who photobombed the Sheriff of Cryptoville.

There’s actually two and this gives me goosebumps! pic.twitter.com/Hs1YJDDVqv

— CryptoBusy (@CryptoBusy) September 27, 2023

The Binance—Russia connection

On Wednesday, Binance tweeted that it was liquidating its Russian arm.

Binance has entered into an agreement to sell the entirety of its Russia business to CommEX (https://t.co/JJRKCo9coA).

To ensure a smooth process for existing Russian users, the off-boarding process will take up to one year. All assets of existing Russian users are safe and…

— Binance (@binance) September 27, 2023

The exchange’s CEO Changpeng “CZ” Zhao must have been fielding many questions about the deal, because he hit Twitter to set the record straight.

Some answers about Binance/CommEx.

There will be crypto transfers between Binance & CommEx as users migrate with their funds. There are also older transactions during the testing phase of the integrations. This is expected.

A few ex-Binance CIS team members may join their team,…

— CZ 🔶 Binance (@cz_binance) September 28, 2023

Finally, Adam Cochran returned later in the week with an impressive 25-tweet thread exploring subtle connections between Binance, Russia, and Prigozhin, the Russian rebel who led a one-day rebellion against Putin earlier this year.

1/25

The past few weeks I’ve been suggesting Binance had OFAC violations and yesterday called out that Binance was laundering Russian money.

Today they announce they are selling their Russian business to Commex.

The one problem, is Commex doesn’t really exist… https://t.co/et6mBnTuJx

— Adam Cochran (adamscochran.eth) (@adamscochran) September 27, 2023

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