Research Summary
The report discusses the conviction of Sam Bankman-Fried, former CEO of FTX, on charges of fraud, conspiracy, and money laundering. It also covers President Biden’s Executive Order on managing AI risks, the launch of Celestia, a modular blockchain, and the increasing interest in Bitcoin futures. The report also provides updates on rollup technologies and other crypto news.
Key Takeaways
Conviction of FTX’s Former CEO
- Guilty Verdict: Sam Bankman-Fried, former CEO of FTX, has been found guilty on all seven federal charges of fraud, conspiracy, and money laundering. He potentially faces up to 115 years in jail. His lawyers are expected to appeal the decision.
President Biden’s Executive Order on AI
- AI Regulation: President Biden has signed an Executive Order aimed at managing the potential risks of AI systems. The order requires developers of powerful AI systems that pose risks to national security, economic security, or public health and safety to notify the federal government and share safety test results before deployment.
Celestia’s Launch
- Modular Blockchain: Celestia, the first modular blockchain, launched on mainnet on October 31. It uses a proof-of-stake consensus protocol and has professional staking providers like Bitcoin Suisse and Coinbase Cloud as validator node operators. Validators on Celestia are earning an annual percentage return of close to 25% on their stake.
Increasing Interest in Bitcoin Futures
- Bitcoin Futures: The notional open interest in current month Bitcoin futures on CME has tripled week-over-week, reaching nearly $3 billion, indicating increasing interest from traditional investors.
Rollup Technologies
- Rollup Adoption: Optimism and Arbitrum have seen the highest net deposits YTD, with Arbitrum receiving $1.67 billion in net inflows and Optimism receiving $631 million in net inflows. Optimistic rollups have been the only type of rollup technology with positive net cumulative bridge flows YTD, receiving $2.2 billion in net inflows.
Actionable Insights
- Legal Implications: The conviction of Sam Bankman-Fried underscores the importance of legal compliance in the crypto industry. Companies should ensure they are operating within the law to avoid similar consequences.
- AI Regulation: With the new Executive Order on AI, companies developing AI systems should prepare to comply with new safety and testing standards. This may require adjustments in their development processes.
- Blockchain Opportunities: The launch of Celestia presents opportunities for developers and investors. Developers can leverage its scalability to create their own blockchains, while investors can earn returns by becoming validator node operators.
- Bitcoin Futures: The increasing interest in Bitcoin futures suggests a growing acceptance of crypto among traditional investors. Companies in the crypto space should consider how they can cater to this demographic.
- Rollup Technologies: The success of Optimism and Arbitrum indicates a growing interest in rollup technologies. Companies should investigate the potential of integrating these technologies into their operations.
