Easy CZ: From Crypto Fame to Low-Security Game 🔒️

CZ goes to jail, ETH leaving exchanges, Do Kwon's a douche, and GameFi updates


Easy CZ: From Crypto Fame to Low-Security Game 🔒️ 

First Monday of the month, the last month of the quarter, and things are looking mighty nice and green on the screen. 💚 

In today’s Litepaper, CZ begins his four-month sentence in a low-security Santa Barbara prison—officially the richest prisoner in the U.S. ever.

Also on deck: how much Ethereum has left exchanges over the past week, Do Kwon’s settlement with the SEC, and some big GameFi news updates. 📰

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total and altcoin market cap YTD:

CZ Goes To Jail 👮‍♂️

From Bloomberg: Binance’s CZ swapping his CEO office for a low-security prison in California. Zhao, now inmate 88087-510, is heading to Lompoc for a four-month stint. 🔒️ 

CZ, the richest guy ever to hit a US federal lockup, was initially set for SeaTac in Seattle. Non-US citizen status usually lands you in less cozy quarters. But surprise, surprise—he got Lompoc, a minimum-security joint where inmates chill on horse farms and enjoy the outdoors.

SeaTac is usually packed with folks awaiting trial for fraud, murder, and everything in between. But Zhao lucked out with Lompoc, which houses 2,160 inmates across its camp and main facility.

Back in April, Zhao got a slap on the wrist with a four-month sentence, much to the dismay of prosecutors who wanted three years. But his crime? Skipping on an anti-money laundering program, letting all sorts of unsavory characters—hackers, terrorists, you name it—trade crypto.

In a deal with Uncle Sam, Binance admitted to breaking banking laws and sanctions, agreeing to cough up $4.30 billion to settle the score. 🏛️

ETH Supply Impacted Since ETF Approvals 🪙 

Since the SEC’s approval of $ETH ETFs, over $3 billion worth of Ether has vanished from centralized exchanges - at least that’s what X and other crypto news outlets are repeating. 📰 

But something just didn’t sound right to me because, well, literally every news site is repeating $3 billion and resharing/quoting info on CryptoQuant or CoinGlass—both of which are awesome on-chain companies that I personally subscribe to!

Maybe I’m just picky, but the $3 billion isn’t really telling the whole story.

For example, the image below shows Santiment’s Exchange Flow Balance for Kraken—a positive number tells us more Ethereum has entered the exchange (inflow) than has left (outflow). 📈 

Kraken Exchange Flow Balance, Santiment

The next image shows the aggregated centralized (CEX) and decentralized (DEX) Exchange Flow Balance of Ethereum:

All CEX and DEX Exchange Flow Balance, Santiment

Looks diferrent, right? Things are all over the place with these measurements. Here’s what the total Exchange Flow Balance of Ethereum is on some of the biggest exchanges for the past week. 👀 

  1. Coinbase -595 ETH

  2. Kraken -586,705

  3. Binance -101,488

  4. Bybit -19,898

  5. OKex +185

  6. Kucoin -467

  7. CryptoCom +1,519

If you add up all seven of those, you get 707,449 Ethereum moved off exchanges since May 27. That’s roughly $2.70 billion (at $3,800/ETH).

But the number is even bigger if you tally up all the CEX and DEXs out there, which Santiment does. How big is the number?

A whopping $6 billion worth of Ethereum moved off exchanges since May 27. Which might not sound like a lot, but given that only 10 to 14% of ETH’s total supply available is on the exchanges, that’s a big chunk missing. 🤯 

Do Kwon and Terraform Labs Settle with the SEC 💵 

Last week, Do Kwon and Terraform Labs finally decided to play nice with the SEC, agreeing to a "settlement in principle" over civil fraud allegations. 🚀

What does settlement in principle mean? A "settlement in principle" is a preliminary agreement where the main terms are agreed upon, but the final details and formal documentation are still pending. Basically, a verbal agreement.

The Devil Wears Adidas 👿 

Just because Kwon and Terraform Labs 'settled' this civil case doesn’t mean Kwon can breathe easy. He’s still facing criminal charges in both the U.S. and South Korea. The SEC's fraud charges are just the beginning. There’s also market manipulation, bribery, and a laundry list of other accusations awaiting him.

Kwon is also crypto enemy number one to many in the industry. The $60 billion collapse of $LUNC and $UST was a real total loss for individuals. Yes, FTX’s collapse was bad - but most of the money was recovered. Even people stuck with Voyager and Celsius got something back.

But for those in LUNC and UST? Gone. If you don’t remember, there were rumors and stories of people who committed suicide because of the total collapse; it even prompted a Terraluna member to post international suicide prevention numbers on Reddit. 😢 

And don’t forget this gem on YouTube. A few months after the May 2022 collapse, Coinage (owned by Do Kwon/Terra Luna) gets an exclusive interview with Do Kwon. Kwon the Con’s first answer to a question is a nice way of saying, “You’re dumb and not smart enough to understand.”

Even after the interviewer tells Do Kwon that his co-founder had a close personal friend commit suicide because of Terra’s collapse, Do Kwon offers zero empathy in his response.

Kwon, currently out on bail in Montenegro, is in limbo, awaiting either extradition or the bug that’s been hitting a lot of high-profile criminals recently… 🤷‍♂️ 

GameFi MadnesS: Square Enix, Pudgy Penguins, and DeLorean Dive In 🐧 

Square Enix Goes All-In with Arbitrum for Symbiogenesis NFTs

Source: SquareEnix

Square Enix ($SQNF) just made a power move by adopting Arbitrum ($ARB) for its next Symbiogenesis NFT drop. After minting the first batch on Ethereum's ($ETH) mainnet, they've switched to Arbitrum to slash transaction costs by 1/1000. 🚀

Follow their official X or hit up their website. 👍️ 

Pudgy Penguins and Mythical Games Team Up for a New Mobile Game

Source: PudgyPenuins

Mythical Games, the masterminds behind NFL Rivals and Blankos Block Party, are coming out with a new mobile game featuring Pudgy Penguins. Set to drop in 2025, this game will run on the Mythos Chain, a Polkadot ($DOT)-based network, using the same engine as Blankos Block Party.

And remember,Pudgy Penguins isn't just about NFTs anymore—they're in Walmart ($WMT) and Target ($TGT) with toys. How do I know? Because the ones I bought from Walmart didn't get delivered in time for my son's fourth birthday, and here they sit:

DeLorean and MoonPay Roll Out a Web3 Vehicle Registration Marketplace

Source: Delorean

DeLorean, the iconic automaker with the legendary DMC-12 from 'Back to the Future,' is going Web3. They're launching a marketplace with MoonPay that lets you buy, sell, and trade vehicle reservation slots using blockchain tech.

Launching by Q4 2024 on DeLorean.com, they hope to make the reservation process transparent and track vehicle performance analytics with immutable records. 🚗 

Crypto News In Three Sentences 📰

💸 Uniswap Fee Switch Delay Tanks UNI 

Uniswap's ($UNI) delay in flipping the fee switch led to a 5% drop in UNI token value. The postponed governance vote spooked investors. This hiccup highlights the messy reality of DeFi governance and upgrades. From BeinCrypto.

🐳 Whales Bet Big on Dogecoin 

Crypto whales just dropped $110 million on Dogecoin ($DOGE), betting on a memecoin rally. This move shows serious confidence in Doge's potential. The memecoin craze isn't slowing down anytime soon. Finbold has more.

🪙 Ted Cruz Goes Bitcoin Mining 

Senator Ted Cruz bought three Bitcoin miners and kicked off his own mining operations. Cruz's move shows his strong support for crypto. It's part of his broader pro-crypto stance. Full story at Cryptopolitan.

🌐 Sergey Nazarov’s Big Prediction 

Chainlink's ($LINK) Sergey Nazarov says 2024 will see crypto merge with the global financial system, bringing in hundreds of trillions. It's a bold prediction that underscores blockchain's rising influence. Nazarov's vision is nothing short of transformative. More at the DailyHODL.

💼 Galaxy Digital CEO on Crypto Regulation 

Galaxy Digital’s Mike Novogratz believes common sense will eventually shape US crypto regulation. He expects a balanced approach that fosters innovation while ensuring security. Novogratz is optimistic about the regulatory future. From CryptoGlobe.

📈 Bitcoin to Hit $150K by 2025? 

Peter L. Brandt predicts Bitcoin will reach $150,000 by September 2025. His forecast is based on Bitcoin's historical halving patterns. Brandt’s bullish outlook adds to the growing excitement in the crypto world. More from Peter Brandt.

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