Bitcoin BTC price surges as congestion eases and investors ponder the next price surge

Good morning Here’s what happens:

Prices: When blockchain congestion eases, the price of bitcoin recovers. eToro’s Callie Cox said that inflation remains a top concern among crypto traders, but pointed to Bitcoin’s resilience in an interview with CoinDesk TV.

Insights: Extraterritoriality is once again at the heart of a crypto court case. Will we finally get answers as to how far US authorities can reach?

Bitcoin is showing green shoots as congestion begins to unravel

While bitcoin has traded sideways throughout the US business day, the opening of Asia has shown the first signs of a return to price growth amid declining congestion on the bitcoin blockchain.

But the question that plagued many people was what will cause the next big price move?

eToro investment analyst Callie Cox points to inflation as a top concern for everyone from the Fed to crypto traders.

In a recent appearance on CoinDesk TV, Cox argued that Americans want inflation to come down while maintaining job security, and the Fed is trying to offset that, but it’s a process that inevitably involves some pain.

“Powell really leaned into his megaphone and delivered very flexible language about the future of politics,” Cox said on CoinDesk TV. “They keep dropping hints and statements where they are basically changing language when future policy action is required. This could be an indication that the Fed is becoming more flexible.”

Meanwhile, despite the congestion, Bitcoin remains a defensive asset as it indicated that it has surprisingly outperformed the S&P 500 on most CPI and Fed days.

“After massive sell-offs, while still risky, bitcoin appears to be benefiting from both its traditional role and its emerging role as a store of value in lower interest rates,” she said.

Aside from bitcoin, what is Cox watching right now? Ether.

She views ether as a riskier investment, but recognizes its economic value and the number of projects being developed on the Ethereum blockchain.

“Ethereum is one of those blockchains that’s proving its worth right now, and I think investors are realizing that,” she said.

In a court filing released yesterday, Bankman-Fried moved that the majority of the charges against him be dismissed.

Part of his legal team’s effort to dismiss the allegations of merchandise fraud: extraterritoriality.

Bankman-Fried’s legal team argues in a filing that the commodity fraud charges would require extraterritorial application of the Commodities Exchange Act (CEA), which is not permissible because the CEA only applies to domestic conduct.

They further argue that previous case law dictates that the focus of the CEA is not on the geographic location of transactions but on preventing manipulation and ensuring market integrity.

Keep in mind that FTX did not serve US clients and, as lawyers point out in the filing, was initially headquartered in Hong Kong before moving to the Bahamas.

What exactly is the US Nexus?

We’ve walked this path before with BitMEX.

BitMEX has been charged under US money laundering laws despite not serving US customers nor holding bank accounts with US institutions.

“The CFTC’s increasingly expanded view of its jurisdiction will likely be challenged, particularly towards offshore exchanges and participants that have limited ties to the United States,” said Braden Perry, former enforcement attorney for the Commodity Futures Trading Commission and now a partner with Kennyhertz Perry back then. “This is dangerous territory for the CFTC.”

Unfortunately, for those interested in a case where the CFTC believes its mandate is international, a plea deal by Arthur Hayes and Ben Delo prevents a full court examination of these issues.

If it had gone to court, the case would have explored new considerations about the Bank Secrecy Act’s applicability to companies that don’t accept fiat currency or have limited ties to the United States, raising questions of jurisdiction and regulatory overshoot.

Part of the settlement between Hayes and Delo involved a hefty fine as well as house arrest for Hayes and probation for Delo.

That option is unlikely for Bankman-Fried. He has more incentive to fight his case.

Hopefully this means that we have the extraterritorial tendencies of US regulators tested in court and enshrined in case law. If anything, it would give the industry some certainty as to where the US can and can’t go, rather than playing a constant guessing game.

Crypto exchange Bittrex filed for bankruptcy in the state of Delaware on Monday, months after it announced it would cease operations in the country and weeks after it was sued by the Securities and Exchange Commission (SEC). This happened as Bitcoin (BTC) was hovering below $28,000. eToro US Investment Analyst Callie Cox provided her analysis of the crypto markets. Also, Sam MacPherson, co-founder and CEO of Phoenix Labs, spoke about the launch of MakerDAO’s Spark protocol today. Tiago Sada, Tools for Humanity’s Head of Product, also joined the conversation along with Navin Gupta, Managing Director of South Asia & MENA at Ripple.

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