By Tim Hakki
5 min read
Illustration by Mitchell Preffer for Decrypt
It was a challenging week for the crypto community as the leading coins fell yet again. As usual on Crypto Twitter, prices were everyone’s least concern. Instead, the drama centered on the seemingly interminable saga of Tesla CEO Elon Musk’s bid to buy Twitter. There were also more accusations of foul play leveled at Terraform Labs CEO Do Kwon in the wake of UST’s collapse.
On Monday, Musk made it clear in a letter to Twitter’s General Counsel that his $44 billion acquisition bid is “temporarily on hold” pending confirmation that less than 5% of the microblogging platform’s users are spambots. In the amended document, which was filed with the United States Securities and Exchange Commission, Musk accused Twitter of “actively resisting and thwarting his information rights.”
Alex Weprin, a journalist for The Hollywood Reporter, argued that Musk's latest move was either tactical or a sign of cold feet. Decrypt’s EIC thinks Musk's gripe about bots is his attempt to back out of the deal. Musk's apparent wiggling was the talk of Crypto Twitter, since many in the community have high hopes for the crypto features Musk would implement if he does buy Twitter.
Musk remained tight-lipped about the deal on his account, although he later shared a meme about YouTube content monitoring tweeted to him by a follower. Perhaps he has YouTube lined up in his M&A crosshairs next?
Musk also shared a laugh with Twitter’s Bitcoin-maxi co-founder Jack Dorsey about creating a Dogecoin-powered “Web69” together.
On Tuesday, crypto asset manager Grayscale, which stewards $43.6 billion as of the end of last year, tweeted a short thread on its decision to hire Donald Virilli Jr., former U.S. Solicitor General under President Obama, in the firm’s ongoing campaign to convert its world-leading Bitcoin fund into an SEC-approved ETF.
Grayscale began the formal application in October last year and expects an answer from the SEC by July 6. Grayscale also recently launched an advertising campaign asking consumers to help by advocating for the ETF directly to the SEC in writing. Should the company succeed, it would be the first regulated spot ETF crypto product in the United States.
Also on Tuesday, decentralized finance watchdog DeFi Safety ranked Solana the second worst blockchain out of the fifteen it has ranked so far, putting the chain only above Axie Infinity in terms of technical risk. The ranking came a week after Solana’s third major crash of the year. DeFi Safety unpacked its findings in a mammoth 28-tweet thread, some of which were refuted by Solana to Decrypt.
On Wednesday, Bitcoin maximalist MicroStrategy CEO Michael Saylor tweeted a clip from an interview with CNBC with the words: “If #bitcoin is not going to zero then it’s going to a million.”
MicroStrategy currently holds $3.5 billion in Bitcoin at today’s prices. In the clip, Saylor pointed to the bipartisan Responsible Financial Innovation Act proposed by crypto-friendly senators Cynthia Lummis and Kirsten Gillibrand as a sign that attitudes towards crypto are changing rapidly and fostering inter-party cooperation in Washington.
Also on Wednesday, Financial Times writer Sujeet Indap shared screenshots from subscription-only law publication Law360 that alleges SEC lawyers are leaving the federal agency because of SEC Chair Gary Gensler’s alleged proclivity to draw out cases indefinitely, rather than settling them.
In light of the gossip, one can only wonder where the SEC’s case against Ripple fits into this.
In the fallout from Terra’s collapse, this week it was the SEC’s turn to crank up the heat on Terraform Labs CEO Do Kwon. Some attorneys at the agency believe Terra may have violated federal investor-protection regulations.
Meanwhile, in a separate Do Kwon legal issue, his appeal of a September 2021 SEC subpoena was overruled on Wednesday when a U.S. court determined he must comply with investigations into Mirror Protocol.
On top of all that, Kwon has been accused by the South Korean press of having committed several financial crimes, including tax evasion, fraud and insider trading.
The local press was back at it this week, this time accusing Kwon of allegedly cashing out $80 million a month from Terra and sending it to secret wallets for an eye-watering total of $2.7 billion. A number of big Crypto Twitter influencer accounts amplified the claim on Saturday.
Kwon took to Twitter on Sunday to insist his innocence in a sharp thread.
Kwon says he took only a “nominal cash salary” from Terraform Labs. “I lost most of what I had in the crash too,” he added. “I’ve said this multiple times but I really don’t care about money much.”
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