Market Trend｜SBF’s Bail Revealed To Total $250 Million; The SEC Is Cracking Down On Crypto Auditors; Former Ripple Executive Defends XRP’s Utility

2022-12-23, 08:00

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Despite the mixed performance witnessed in recent weeks, the cryptocurrency market once again appears to have slowed, with many of the top 100 assets sliding down a bearish spiral once again – with many having shed upwards of 10%. However, this week has been thwarted by regulatory and legal discussions, particularly as Sam Bankman-Fried arrived in the USA to face charges and as the Ripple vs SEC lawsuit intensifies. The growing discussion surrounding the former appears to negatively correlate with the wider market and push it further into bearish territory as apprehension grows.
<center/>**The Latest News**<center/>

**SBF’s Bail Revealed To Total $250 Million**

In the weeks following the FTX crash an international manhunt for the founder and CEO, Sam Bankman-Fried began. However, after his monumental arrest in the Bahamas late last week, SBF has been shipped to the USA to face charges including various fraud and conspiracy-related charges. If convicted on all of them, he could face up to 115 years behind bars. With his arrest occurring hours before he was set to testify before the US House Committee on Financial Services, many have speculated that various high-profile figures want him to refrain from public speaking.

Having consented to extradition, SBF has been restricted to his parents’ home in California until his trial, with a $250 million bond released. However, SBF isn’t personally liable for his bail, acting as a true historical outlier in US history, with the bail instead being secured against his parents’ home. With this bond classified as a personal recognisance bond, it is guaranteed that he will appear in court as specified by the presiding judge and consolidated with his signature, his parents, and an undisclosed party (who is set to be revealed on January 5th). The security interest collateralised against the equity of his parents’ residence is also due on January 12th. The coming weeks are anticipated to shed light on when SBF will be trialled.

![](https://gimg2.gateimg.com/image/article/1671768554001.png)
Sam Bankman-Fried (Image Courtesy of Tom Williams via Getty Images)
 
**Former Ripple Executive Defends XRP’s Utility**

With a lawsuit spanning over a year, the Ripple vs SEC case appears to be one with no end in sight. However, in recent months, Ripple appears to have been gaining more footing against the Securities and Exchange Commission, providing various testimonies and sources of evidence that support their claim that XRP is in fact not security. Moving to further support this side of the argument is a former Principal Developer Advocate at Ripple, Matt Hamilton, who has begun to defend the utility of the XRP token.

With the XRP token historically criticised for its unclear and arguably underdeveloped utility, Hamilton has stated that smart contracts are on their way to the cryptocurrency’s ledger. This would allow the XRP token and network to power decentralised applications in ways commonly seen via the BNB and Ethereum chains respectively. Hamilton has previously taken to Twitter to defend XRP against allegations that it is ‘heavily centralised’ and has ‘no utility’, stating that it is ‘literally being used for cross border payments, NFTs, web monetisation, etc.’.
![](https://gimg2.gateimg.com/image/article/1671768677002.png)
Ripple (Image Courtesy of Financial Times)
 
**The SEC Is Cracking Down On Crypto Auditors**

With the number of cryptocurrency exchanges and projects having imploded in recent months, the SEC has issued a warning to investors remaking that the audits performed on cryptocurrency companies could lack sufficient information to provide assurance that their infrastructure is robust, collateralised, and secure. With a flurry of auditors beginning to distance themselves from the blockchain world, it comes as no surprise that blockchain has recently become a hotspot for bankruptcy lawyers.

With many companies seeking to prove that they can retain their customer’s assets and meet obligations in light of the SEC crash, there has been a paucity of auditors to provide third-party assurances to investors and prospective customers due to the current market conditions. Furthermore, the SEC has cautioned investors to remain sceptical of these proof-of-reserve reports provided by the projects themselves, as many reports have been found to lack the relevant financial information, with some firms contesting this claiming that it violates customer confidentiality. Regardless, with the current market space being thwarted by illicit activity, it is more essential than ever to remain careful and secure when navigating decentralised finance.
![](https://gimg2.gateimg.com/image/article/1671768829003.png)
SEC Headquarters (Image Courtesy of Saul Loeb via Getty Images)
 
**Current Project Trends**

Based on data provided by CoinMarketCap, a majority of the top-gaining projects across the past week have been related to the Solana blockchain. In light of the FTX collapse, the Solana blockchain is amongst the heaviest hit, with several projects having their treasuries or funding wiped by the incident, thus spurring bankruptcies across the network. Various projects that have seen substantial gains across the past week have been built for the purpose of generating fundraising and encouraging trading on the Solana blockchain through products such as staking, governance, farming, and yield pools.
 
**The Current BTC Trend**

Following suit from last weeks gradual decline in light of the Federal Reserve hiking interest rates by 50 basis points, [Bitcoin](https://www.gate.io/trade/BTC_USDT) has further plummeted below the $18,000 threshold, dipping into the lower regions of the $16,000 zone. Entering the week with a sharp downturn, [Bitcoin](https://www.gate.io/trade/BTC_USDT) has progressed along a relatively horizontal pattern, with brief, sharp dips breaking the hegemony throughout the week. However, despite this ensuing bearish resistance, [Bitcoin](https://www.gate.io/trade/BTC_USDT) could overcome this hurdle as it begins to attempt an upside break above $16,800. Providing BTC can break through the $16,800-$17,000 zone, it could begin to demonstrate clear signs of recovery and near $18,000 once again. Yet, despite this positive movement, [Bitcoin](https://www.gate.io/trade/BTC_USDT) was subject to a rapid onset selling momentum earlier this week as a high was formed at $17,067, forcing [Bitcoin](https://www.gate.io/trade/BTC_USDT) into a downside correction and below its 100-hour simple moving average. Additionally, the price declined below the 50% Fib retracement level of the up move from the $16,260 swing low to the $17,067 high.

On the flip side, [Bitcoin](https://www.gate.io/trade/BTC_USDT)’s MVRV (market value to realised value) has remained relatively horizontal across the past week, bottoming at a 0.839 ratio and reaching a high of 0.841, down from a high of 0.896 the previous week. Considering the value remains below one, this signals that the [Bitcoin](https://www.gate.io/trade/BTC_USDT) market may be at a ‘possible market bottom’, indicating that taking a gradual long position may be a beneficial tactic in the current market climate, as [Bitcoin](https://www.gate.io/trade/BTC_USDT) is reportedly trading below its realised value. This demonstrates a more bullish prospect for the [Bitcoin](https://www.gate.io/trade/BTC_USDT) market and suggests that the current bearishness may remain for the time being, yet that recovery could be viable in the long term.
![](https://gimg2.gateimg.com/image/article/1671768945004.png)
Monthly MVRV Data For BTC (Data Courtesy of Blockchain.com)
 
**The State Of ETH Gas Fees**

As of the 23rd of December, there has been a moderate increase in the total gas used across the past week in comparison to the former, with the lowest figure attained on the 16th, totalling 108,372,601,375. The highest figure attained this week was 108,911,616,701, which is a minor decrease from the previous week, suggesting that gas usage remains relatively consistent on a current month-by-month basis.

As a result, Ethereum gas fee boundaries this week have taken a notable decline from the week prior. The low gas boundaries remained between 10-72 gwei, the average boundaries were between 10-73 gwei, and the high boundaries were between 10-76 gwei – demonstrating a vast disparity in gas fees across the past week.

Across the past 24 hours, the top ‘Gas Guzzlers’ according to Etherscan were Seaport 1.1 (with fees totalling $152,009.62 or 124.15 ETH), Uniswap V3: Router 2 (with fees totalling $151,950.01 or 124.10 ETH),  and OKX Football Cup: OKXFC Token (with fees totalling $79,243.87 or 64.72 ETH).

The estimated cost of transactions across the likes of OpenSea: Sale, Uniswap V3: Swap, and USDT: Transfer, has been suggested to be between $0.80 and $2.94, according to Etherscan.
 
**The Current Macro Situation**

**CPI Data**

According to data released on December 13th, the CPI has demonstrated that the current rate of inflation is at 7.1% y/y, as opposed to the previously forecasted 7.3% y/y. This suggests that the economic markets could be privy to recovery or bullish momentum in the coming months.

**Unemployment Rate**

According to the U.S Bureau Of Labor Statistics, the current rate of unemployment in the USA sits at 3.7%. However, 45 surveyed economists have predicted that the unemployment rate will soar to a figure between 5.5% and 6.5%, with some suggesting that an increase to 7% could be possible, despite the Federal Reserve’s aims to stifle historic levels of inflation.

Additionally, 85% of the surveyed economists have predicted that the National Bureau of Economic Research will declare a recession by next year.

**Federal Reserve Conferences**

Contrary to the previously mentioned bullish CPI forecast, the recent Federal Reserve conference revealed that interest rates are brewing hiked by a further 50 basis points, thus intensifying the current rate of inflation. As a result, the likes of [Bitcoin](https://www.gate.io/trade/BTC_USDT) felt the aftermath of this revelation, as it began to fall through the $18,000 threshold. This interest rate increase suggests that the current period of inflation is far from over and that it could intensify in the coming months.

**What Could Be Coming In The Week Ahead?**

Based on the aforementioned data and the current overarching bearish sentiment within the market, it can be ascertained that the bear market will ensue in the coming months. However, the prospect of SBF being charged for his involvement with the FTX crash and the mounting evidence supporting Ripple’s testimony, it could become a very real possibility that the cryptocurrency market will be subject to an increase in regulation and justice for investors and projects who have been affected by illicit activity.

Author: Gate.io Researcher: **Matthew Webster-Dowsing**
This article represents only the views of the researcher and does not constitute any investment suggestions.
Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.

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