Bitcoin bounces back above $44,000 amid volatile start to 2024: CNBC Crypto World

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Ari Redbord of TRM Labs takes a look back at last year’s court hearings and trials against some of the biggest names in the industry. He also discusses what to expect in 2024.

Chapters:
00:00 – CNBC Crypto World, Jan 4, 2024
0:21 – Bitcoin bounces
0:51 – The headlines
4:08- Ari Redbord of TRM Labs

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Bitcoin bounces back above $44,000 amid volatile start to 2024: CNBC Crypto World

Today Bitcoin bounces back after yesterday’s tumble of more than 5% Kathy Woods Arc invest offloads more coinbase shares and AR RedBoard of trm labs takes a look back at last year’s Court hearings and trials against some of the biggest names in the industry and discusses what to expect in

2024 welcome to cnbc’s crypto world I’m Jordan Smith crypto prices in the green this morning Amit a volatile week for digital assets as of noon Eastern Bitcoin climbed nearly 3% inching closer $44,000 both ether and salana Rose about 25% with Solana’s Soul token crossing the $100 level once again crypto Focus

Stocks followed bitcoin’s momentum today with coinbase and micro strategy Rising about 4% as of no Eastern after being in the red yesterday the Bitcoin miners performed even better this morning with Marathon soaring nearly 8% all right let’s talk about the top stories Traders are on alert as the

January 10th deadline to approve spot Bitcoin ETFs approaches pomp Investments founder Anthony Pompano joined cnbc’s squawkbox this morning to discuss the various regulatory outcomes that could affect crypto trades he addressed what’s behind all the hype surrounding the potential for a spot Bitcoin ETF to launch in the US soon he also had a

Warning for Wall Street investors Wall Street is getting invited in anticipation of The Greatest Show on Earth right Bitcoin has been the best performing asset for the last 15 years and wall Street’s basically in booxed out of it they haven’t had access to this asset and so I think that what

You’re seeing in that pent up um excitement one thing that I do caution these Wall Street investors is you can’t trade this like other assets we saw just yesterday about a billion dollars of open interest got wiped out the guys over at reflexivity research did a fantastic job outlining saying you know

This asset in 202 uh1 went up almost 800% from uh before the pandemic started to the kind of the top of the market yeah during that time there was 5 30% draw Downs if you’re going to try to get levered long and think that hey ETF gets

Approved and this thing just goes to the moon you’re likely to get shaken out or get liquidated Pomano also addressed reports that crypto Investment services provider Matrix port expects that the SEC will reject all spot Bitcoin ETF applications and discuss what would happen to bitcoin’s price if the SEC

Were to deny or approve those applications if they approve it I think that there will be a lot of short-term volatility and then we’ll kind of get right back on track whether it goes up or down after the approval if they rejected I think the same thing would

Happen there would be a lot of kind of short-term volatility and we get right back on track the beauty is with Bitcoin if we go back we we saw something like this China had over 60% of all mining inside of their borders they completely banned Mining and kicked them all out

50% of the hash rate went offline by the end of that year may of 2021 is when to happened by the end of 2021 mining hash rate was back to an all-time high and so this thing is just resilient it’s antifragile and it continues to just do

What it was designed to do next coindesk reports that Goldman Sachs wants to help Black Rock and grayscale with their proposed spot Bitcoin ETFs the banking giant reportedly wants to be an authorized participant which are firms that help with the creation of shares and the Redemption process for ETFs this

Report comes about a week after Black Rock and other spot Bitcoin F applicants included APS in updated registration forms for their proposals with JP Morgan in Jane Street named in Black Rock’s filing we reached out to Goldman saxs and a spokesperson declined to comment last Kathy Woods Arc invest sold more

Than 166,000 coinbase shares worth more than $25 million from two of its ETFs the move comes one week after Ark sold shares of coinbase worth more than $27 million and dumped the remainder of its grayscale Holdings we spoke with Cathy wood last week and she said the recent

Moves to offload millions of dollars worth of grayscale Bitcoin trust and coinbase shares are essentially portfolio management the change in Holdings comes ahead of the much anticipated decision by the SEC on spot Bitcoin ETFs the first deadline is for Arc 21 shares and last week wood said

That Arc believes the probability of an approval has gone up because the SEC has been quote highly engaged compared to what was happening before all right for our main story we’re talking all about crypto crime 2023 was a year of Court hearings and sentencings for some of the biggest

Names in the industry so as the year was wrapping up I spoke with Ary redbard of trm labs about Sam bakman freed CZ and whether we can expect more crypto focused trials in 2024 so I I think we have to start this conversation with the Sam bakman free

Trial not because that was an issue specific to crypto fraud and conspiracy happen in any business um but I think that case was really held up as putting the entire industry on trial this year and now that we’re a few weeks away from that verdict what do you think that that

Argument has held up where does the crypto industry stand in Ard to the SPF trial yeah look it’s really extraordinary I think we’ve talked about this before you know look none of the fraud in the FTX case occurred on blockchains right it occurred in the same places that fraud has occurred for

Generations in the sort of opaque quarters of uh financial institutions right um the the the issue though is because crypto was involved it obviously becomes a referendum on cryptocurrency on the crypto industry a couple things still stand out to me about the case though uh first and foremost the speed right I

Mean it was absolutely extraordinary how quickly this case moved I mean it was basically a year ago right it was November of last year uh that FTX collapsed I mean when we were just crossing the the the into 2023 FTX was the story the collapse of FTS was the

Story and to have a guilty verdict at trial when extradition was involved millions of pages of documents three cooperating Witnesses uh that all had to plead guilty themselves that all had to you know cooperate with the government so this case moved so quickly and um I

Would argue in part uh it was actually because um you know prosecutors were able to quickly um you know understand the evidence in the case um because you had very very uh frankly good cooperating Witnesses and you had a judge that wanted to move the trial

Along um and I think from a crypto industry perspective I think that definitely people are very happy to have this case behind them in 23 um mostly because it created um you know a a a regulatory storm um or you know a storm from policy makers who were using FTX even though it

Wasn’t about crypto per se to um to talk about sort of you know broader regulation in the industry yeah I also want to move to binance which is sort of perfect to talk about right after SBF because of how closely tied those businesses and those Founders were we’re

Still in progress in in that settlement and a potential um sentencing for CZ in 2024 uh but my my question is what’s the takeaway from that settlement where the crypto industry’s argument is that it can sort of avoid consequences in certain jurisdictions um does that that argument still hold water both now and

Heading into 20124 yeah look I I think that I understanding sort of the ways people have lumped them together to of the largest exchanges of their time and all these sorts of issues I think they are very very different cases um and uh particularly the criminal case involving

Um CZ is very very different from the criminal case involving Sam bankman free first of all um FTX was a house of cards right uh that collapsed and then a criminal case sort of began ultimately what this settlement allows is for binance to uh continue operating to

Build compliance controls and to sort of meet the moment meet the requirements that are going to be set up for it um by the US Treasury and and others so it’s on the one hand you have the collapse of a cryptocurrency business here you have a massive fine but the ability for the

Crypto business to build compliance and move forward from a pure criminal perspective um I spent about 11 years as a a USA as a federal prosecutor and the cases are really interesting because it shows on the one hand uh where someone did not cooperate did not accept responsibility took the government to

Trial um and and and denied all responsibility ultimately lost and now is staring down the barrel of a very very long sentence uh that’s in the S SPF case in the CZ case you have something entirely different right you have uh lawyers who apparently came in the defendant came in met with

Prosecutors cooperated with the government ultimately came to the US willingly from a jurisdiction that would not extradite him likely um and now is is looking at a much um much much lesser sentence if if any sort of time served at all so I say all that to say as an a

USA um it is uh it is very different uh to have a a defendant that that you know that forces the issue uh than one that cooperated and the one that cooperated is going to be treated much much better especially um when you’re accepting responsibility which it seems

Like he’s done in this case uh with that CZ has done in this case yeah the one other case that we’ve been tracking a lot this year is dquan um in the teral Luna case which precipitated so much of the the issues that we saw in 2022 that

We’re still dealing with in 2023 we just found out recently that the appeal process in in his extradition has met has met a hiccup that it could potentially be delayed um what do you make of the cooperation between jurisdictions between the Us and other countries in terms of of Prosecuting

These criminal cases these crypto cases how much work still needs to be done there to to make that work around the world yeah it’s interesting I mean the promise of cryptocurrency is this idea of crossb value transfer at the speed of the internet uh but when you’re talking

About you know Criminal Justice System it creates a lot of um a lot of issues potentially interestingly all three of these cases that we’re talking about today involve extradition in one way or another you know how to go get that individual from a from another country you had ultimately Sam bankman feed

Fight and then eventually wave jurisdiction uh wave extradition rather I think within 24 hours or less um in the Bahamas obviously you had CZ come willingly to the US from the UA and then finally joequan who’s fighting extradition currently um in Montenegro and the question for him is whether he

Ends up going to Korea which is asked for his extradition or the United States and we’ll kind of see how that plays out but I think that look the nature of cryptocurrency which is everywhere um it means that you’re going to need more and more International cooperation I will

Say that you do see that and you saw it in 2023 in the cases right you see so many cases Hydra and and and darket markets and um you know some of these uh you know large treasury actions doj actions a lot of them involve foreign counterparts so you’re seeing it happen

Where you’re seeing uh Global law enforcement cooperate cross border uh but it’s still it’s still very early and I think we’re going to see more and more of that yeah a little more forward-looking do you think prosecutors are headed into the new year feeling more emboldened to take on these crypto

Businesses or individuals or maybe take on some of these more complicated cases that require the extradition to that require um so much of that research or backend effort or are we in a place where it’s still uncertain you know I think this what’s interesting is we’re seeing the ecosystem Evol right and it’s

The lawful crypto ecosystem it’s it’s it’s growing and as the year ends 2023 I think we’re seeing tremendous growth in the space we’re seeing institutions get involved that means we’re going to see more and more crypto in criminal cases in criminal prosecutions because Bad actors always follow the money and

They’re going there’s going to be more and more transactions in crypto what we’ve seen over the last decade really is a Cadre of us and Global law enforcement who are tracers who use tools like trm to tra trace and track the flow of funds and build investigations the Department of Justice

Today has a national cryptocurrency enforcement team I think that at some point every prosecutor is going to need to understand how to track and Trace crypto every investigator is going to understand how to track and Trace crypto because just like cash crypto will be in every case and I think we’re just

Starting to see that trm recently did a study um with uh us mostly US law enforcement but globally and it basically says that we’re seeing more and more crypto in cases today and I think that’s a trend that we’re going to continue um the IRS irsi one of the most

Important um investigations uh investigators in the in the crypto space just did their sort of top 10 their you know Billboard charts of of moneya laundering crimes in 2023 or money laundering cases four of the top 10 involveed cryptocurrency so the reality is we’re seeing more crypto and cases

And prosecutors and law enforcement are needing the tools and the training to to track and ra those funds so to answer your question I think we’re going to see a lot more of this but we’re going to see more and more expertise also from law enforcement all right that’s all for

Crypto world today but we’ll be back again tomorrow with analysis on what prompted this week’s crypto price swings and we’ll see you Then