This week in The Context, the SBF saga gets put to bed, KuCoin gets a wake-up call, and Nigeria puts a sleeper hold on Binance.
[SBF Grade]
Here’s a story (and person) that’s about to go away: Former FTX CEO Sam Bankman-Fried, who was convicted in November on fraud charges, will be sentenced on Thursday.
What Journalists Said 🧑💻:
Prosecutors want 40 to 50 years, the defense is arguing for five to seven, and he could get as many as 110, summarized Kia Kokalitcheva (Axios). But “experts are predicting his sentence will likely be closer to what prosecutors are asking for.”
Kollen Post (Unchained) surveyed multiple lawyers and industry insiders, all of whom agreed that SBF is due for a few decades behind bars. Part of the reason wasn’t merely the crimes he committed but “his behavior since being indicted,” including contacting witnesses and perjuring himself.
There are a few pros in SBF’s favor, noted Jacob Shamsian (Business Insider). For starters, it looks like FTX customers will be made whole, something Judge Kaplan may consider. Moreover, SBF’s allies have said the former CEO ”exhibits behavioral characteristics associated with neurodivergent people” and should be judged less harshly as a result.
PR Perspective:
From the beginning of the FTX fiasco, Bankman-Fried insisted on telling his story to anyone who would listen. We obviously advocate for having cordial relations with journalists…but this was a case where letting the lawyers talk would have been more prudent. Now, SBF may get an extra-long sentence because he treated PR like so much else in his fallen empire: a DIY project that could be handled while playing video games.
[Ku-risis at KuCoin]
Stop us if you’ve heard this one before: U.S. prosecutors have charged crypto exchange KuCoin and two founders with violating anti-money-laundering laws under the Bank Secrecy Act.
What Journalists Said 🧑💻:
According to the Justice Department, KuCoin “lied to at least one of its investors about operating in the U.S. and failed to both register with U.S. government entities and maintain an anti-money laundering program,” wrote Nikhilesh De & Oliver Knight (CoinDesk).
Not only that, but the government alleges that U.S. customers were “’ actively prevented’ from identifying themselves when they opened accounts,” said Katherine Ross (Blockworks). The DOJ says that “by skirting AML policies,” the exchange took in $5 billion.
“KuCoin doesn’t have the market dominance or name recognition of Coinbase or Binance,” said Leo Schwartz (Fortune), but its derivatives and high-yield products propelled it to a spot among the top exchanges even as FTX and competitors were sucked under.
PR Perspective:
You can’t spell “katastrophe” without a K. This is obviously a PR disaster, so all KuCoin can do is try to assure its customers that things are operating as normal (which it quickly did). Otherwise, PR is the least of its concerns as it navigates this legal crisis.
[Taxi Tax for Binance]
Three stories, three exchanges in trouble. This week, Nigeria charged crypto exchange Binance with tax evasion after a regional African manager escaped from custody.
What Journalists Said🧑💻:
Nadeem Anjarwalla was detained in Nigeria on February 26, along with Binance's head of financial crime compliance, after the country banned certain crypto trading platforms, reported Camillus Eboh & Felix Onuah (Reuters). Although sources suggest authorities detained Anjarwalla unlawfully without charges, Nigeria wants him back.
Meanwhile, the country’s revenue service officially charged Binance with “non-payment of value added tax, company income tax, failure to file tax returns and complicity in aiding customers to evade taxes through its platform,” wrote Anne Soy & Nkechi Ogbonna (BBC).
Due to Binance’s status as “something of an international pariah,” it could be “that Nigeria sees Binance as something to extort,” conjectured Daniel Kuhn (CoinDesk). But it looks like Nigeria is interested in going after crypto more broadly.
PR Perspective:
As seasoned pros in the crisis communication game, Binance seems to have the situation handled. They are focussing on the things that matter most and have stated that their primary focus is on the safety of their employees and resolving the issue quickly.
[Tweet Of The Week]
Credit: @NEARProtocol
[DeFi Definitions]
A segment exploring one particular aspect of DeFi. View previous entries here.
This week: ‘’Real World Assets” by Leila Stein
Real-world assets (RWAs) are tangible or physical assets that are tokenized and represented on-chain. Physical assets such as real estate and commodities are digitized into cryptographic tokens, allowing them to be securely traded, tracked, and managed within decentralized ecosystems.
The tokenization of real-world assets involves converting ownership rights into programmable digital tokens, which can be divided into smaller fractions, facilitating fractional ownership and enabling broader participation in traditionally illiquid markets. These tokens are typically governed by smart contracts, which enforce the rules relating to ownership rights, transferability, and revenue distributions.
By tokenizing real-world assets on-chain, Web3 platforms aim to enhance transparency, liquidity, and efficiency in asset trading and investment, while also opening up new opportunities for financial innovation.
The usual disclaimer: This newsletter collates the main themes and headlines of the week in DeFi/crypto/metaverse/Web3/NFT land and tries to provide unbiased context. It's aimed at anyone who wants to keep an eye on the space. It's put together by a team at YAP and doesn't contain any promotion of our clients (if one is mentioned, we'll flag that).
The team: Founder Samantha Yap and consulting editor Jeff Benson, Sam O'Donohoe, Ewan Brewster, Andrew Wickerson, Tiffany Mac Sherry, Liam Quinn, Becky Corbel and Delon Chan. Your feedback is, as always, welcome. Ping us at thecontext@yapglobal.com. Old newsletters can be found here.
This newsletter is prepared by YAP Global, an international P.R. Consultancy focusing on helping cryptocurrency, Decentralised Finance (DeFi) and brands through impactful storytelling. Find out more about us here.