gm friends —

Like I said last week, crypto news is consistently WILD.

This week, we discovered that the FBI (yes, the real one) created a crypto token called NexFundAI to “identify, disrupt, and bring… fraudsters to justice”.

Once the news broke, crypto degens created more tokens called NexFundAI to capitalize on the attention. And of course, many of these ended up being actual scams… gotta love crypto.

News Stories

Markets & Macro

• US Bitcoin ETFs Jump by $235M, Ether Funds Experience No Change [Bitcoin.com] U.S. Bitcoin exchange-traded funds (ETFs) saw significant inflows of $235.19 million, led by Fidelity's FBTC with $103.68 million, followed by BlackRock's IBIT at $97.88 million, while ether funds recorded no changes. The cumulative net inflows for Bitcoin ETFs since January now stand at $18.73 billion, representing 4.72% of Bitcoin's market cap. Meanwhile, Ether ETFs have seen no movement, with $553.66 million in net outflows since July and currently holding $6.7 billion in reserves.

  

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• Fed officials were divided on whether to cut rates by half a point in September, minutes show [CNBC] Federal Reserve officials agreed to a 50 basis point rate cut in September but were divided on the scale, with some preferring a smaller 25 basis point reduction, according to minutes from the meeting. Governor Michelle Bowman was the only official to vote against the larger cut, advocating for a smaller move. The decision marked the Fed's first half-point cut in four years, aimed at balancing inflation progress against labor market risks. Recent economic data, including stronger-than-expected job growth, suggests that while the Fed is in an easing cycle, future cuts may not be as aggressive.

Institutions, Regulation, & Politics

• SEC, FBI, DOJ coordinate takedown of 4 fraudulent crypto firms [CoinTelegraph] The SEC, DOJ, and FBI have charged three crypto firms—Gotbit Consulting, ZM Quant Investment, and CLS Global—with fraud and market manipulation, as well as nine individuals in connection with wash trading and pump-and-dump schemes. The FBI used a fake token, NexFundAI, to expose fraudulent activities. The accused allegedly manipulated over 60 tokens, including Saitama, defrauding investors through deceptive trading practices. Authorities have seized over $25 million in crypto, deactivated trading bots, and arrested several suspects across multiple countries in an operation named “Operation Token Mirrors.”

  

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• FTX creditors will make money on bankruptcy: $1.19 for every dollar [CNBC] A Delaware judge has approved FTX's reorganization plan, allowing the collapsed crypto exchange to pay out over $14 billion to its creditors, leading most to receive 119% of their allowed claims. The company has recovered between $14.7 billion and $16.5 billion for distribution, surpassing the $11.2 billion owed to creditors. FTX raised funds through asset sales, including its stake in AI startup Anthropic, worth nearly $900 million. The bankruptcy estate will announce distribution dates soon, marking a rare case where creditors profit from a bankruptcy situation.

• Crypto.com sues SEC after receiving a Wells notice from the agency [The Block] Crypto.com is suing the U.S. Securities and Exchange Commission (SEC) after receiving a Wells notice indicating the agency's plan to take enforcement action against the company. The crypto platform argues that the SEC is overreaching its jurisdiction, particularly concerning the regulation of secondary-market sales of tokens like SOL, ADA, and BNB. Crypto.com claims these tokens should not be considered securities and has also filed a petition with both the SEC and CFTC for clarification on cryptocurrency derivatives regulation. The SEC declined to comment on the lawsuit.

Crypto Products & Onchain Events

• Vaneck Launches $30M Fund to Boost Fintech, Crypto, and AI Startups [Bitcoin.com] Global investment firm VanEck has introduced a $30 million early-stage venture fund, VanEck Ventures, aimed at fintech, digital assets, and AI startups. Targeting 25-35 companies in the pre-seed and seed stages, the fund will offer investments between $500,000 and $1 million. Led by Wyatt Lonergan and Juan Lopez, formerly of Circle Ventures, the fund has already made four undisclosed investments. VanEck's venture into these sectors aligns with its history of backing transformative markets like gold and bitcoin.
  

  

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• Layer-2 Scroll Shares Plans for SCR Token Airdrop [CoinDesk] Scroll, the layer-2 network team, announced its plan to launch the SCR token as part of its strategy to support blockchain decentralization. The SCR token will serve as a governance and utility token for Scroll, with 15% of its supply allocated for airdrops, the first of which will distribute 7% on October 22. The total supply of SCR tokens is set at 1 billion, with 17% allocated to investors and 10% to the Scroll Foundation. The token will be launched via Binance Launchpool, with 5.5% allocated for rewards.

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