Trump, Biden Reach Out To Crypto Industry, Mt. Gox Transfers Roughly $9B in BTC, and Ether Spot ETFs Gather Momentum

Takeaways

• Trump, Biden change tone on crypto: Donald Trump has promised to make the US a leader in digital assets during recent campaign events. And President Joe Biden’s aides have responded by reaching out to major players in the crypto market.
• Ether's price surges to nearly $4k, then pulls back: After the SEC approved eight Ether ETFs last week, analysts expect anticipated inflows to be 15-30% of Bitcoin ETF levels. So far, the price of ether has remained relatively flat since the SEC approved ETH ETFs.
• Former FTX executive gets jail time: Ryan Salame, the former CEO of FTX Digital Markets, received a seven-and-a-half year prison sentence and significant financial penalties for his involvement in unlawful political contributions and operating an unlicensed money transmitting business.
• Argentina's securities regulator meet with El Salvador's digital assets commission to discuss strategies for cryptocurrency adoption: Argentina is seeking to leverage El Salvador's experience as the first country to adopt Bitcoin as legal tender.

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Trump, Biden Court Crypto as Election Season Looms

Donald Trump and President Joe Biden have both recently extended an olive branch to the crypto industry, signaling that both candidates want to court major players in the digital asset space ahead of what’s expected to be a tightly contested November election.

Prediction markets indicate that Trump's strong pro-crypto stance may be bolstering his lead over Biden. At a recent event, Trump pledged to commute the sentence of Silk Road founder Ross Ulbricht and promised to position the US as a leader in digital assets. As a result, Biden's chances of re-election, according to PredictIt, have reportedly dropped from 46% to 44%, while Trump's odds have improved by two points on Polymarket, now standing at 56%.

Aides for Biden’s re-election campaign have contacted major crypto industry players for help guiding crypto policy and the broader community. That marks a major shift for Biden, who has opted to mostly stay away from thorny issues facing digital assets while allowing SEC chair Gary Gensler to pursue a policy viewed by many as hostile to the crypto space.

Trump had previously said he didn’t like Bitcoin, in part because it competed against the US dollar. The shift for both candidates highlights the potential impact of digital asset policies on the upcoming election.

Significant Bitcoin Transfers from Mt. Gox Wallets Impact Market

Earlier this week, wallets from Mt. Gox transferred more than 140,000 bitcoin, valued at roughly $9 billion, to an unknown address. Executed in thirteen transactions, the transfers are believed to be part of a plan to repay creditors by October 31, 2024. The market reacted negatively, with BTC’s price dropping to a low of around $67,800 after crossing $70,000 earlier in the week.

Mt. Gox, once the world's largest Bitcoin exchange, collapsed in 2014 following a massive hack that resulted in the loss of hundreds of thousands of bitcoins. Since then, creditors have been waiting for reimbursement, a process that many anticipate will exert additional selling pressure on the BTC market.

The transactions included a preliminary test transfer of $3 on May 20, followed by another smaller transfer of $160 early Tuesday. Subsequent transactions ranged significantly in value, from $1.2M to a staggering $2.2B worth of bitcoin. It is believed that all of Mt. Gox's bitcoin has now been consolidated into a single wallet. This marks the first significant movement from Mt. Gox's cold wallets in over five years.

Ether Nears $4K Amid ETH ETF Approvals

Ether is making significant gains, having come close to breaking through the $4,000 mark just days after the approval of eight Ether ETFs. Currently trading at around $3,800, Ether has surged by approximately 15% over the past month. Ether hasn't reached the $4,000 threshold since March.

While traders are optimistic, they note that there may be a delay of weeks to months before these ETH ETFs begin trading. Expected inflows from these ETFs are anticipated to be about 15-30% of what Bitcoin ETFs saw. Despite the surprise approval, this delay gives issuers time to prepare and align potential inflows. The crypto community is watching closely to see how these developments will impact the broader market.

Former FTX Executive Ryan Salame Sentenced to 7.5 Years in Prison

Former FTX executive Ryan Salame was sentenced to seven-and-a-half years in prison. The U.S. Attorney's Office for the Southern District of New York announced the sentence, which also includes more than $6 million in forfeiture and over $5 million in restitution.

Salame's offenses included conspiracy for unlawful political contributions and operating an unlicensed money-transmitting business – actions that were deemed to contribute to undermining public trust in American elections and the financial system. Despite his cooperation with US authorities and his role in initiating the FTX investigation, his plea for leniency resulted in a substantial prison term. Additionally, Salame will face three years of supervised release following his prison sentence.

The news comes just weeks after the unexpected announcement that FTX will be able to repay all of its customers in full and has more funds than required to do so. The exchange’s founder and ex-CEO Sam Bankman-Fried remains in prison serving a 25-year prison sentence.

Argentina Collaborates with El Salvador on Bitcoin Adoption Insights

On May 23, the National Securities Commission (CNV) of Argentina met with El Salvador’s National Commission of Digital Assets (CNAD) to discuss crypto regulation and adoption strategies.

During the meeting, CNV president Roberto Silva, CNV vice president Patricia Boedo, and CNAD president Juan Carlos Reyes shared insights on El Salvador's landmark decision to adopt Bitcoin as legal tender in September 2021.

The discussions focused on the practical applications and regulatory approaches to cryptocurrency in global economies, with a particular emphasis on El Salvador’s pioneering experience. This collaboration comes as Argentina advances its own crypto regulations, having introduced registration requirements for crypto firms in April.

The country's interest in cryptocurrency has surged since Bitcoin-friendly politician Javier Milei became president in late 2023. This meeting could mark a significant step in Argentina's journey towards integrating digital assets into its financial system.

-From Team Gemini