Sam Bankman-Fried Found Guilty 👨‍⚖️

GM. This is Degen Scoop. It’s FRIDAY, and one of the biggest villains from the previous cycle has been taken care of. Here are the stories to close out the week:

• Sam Bankman-Fried Found Guilty 👨‍⚖️

• PayPal Receives SEC Subpoena Over Stablecoin ✉️

• Coinbase Beats Q3 Earnings 🏅

• Whale Moves 🐋

• Threads You CAN’T Miss 🧵

SBF Found Guilty Unanimously By Jury On Charges of Fraud and Conspiracy

A jury, comprised of nine women and three men, has unanimously found Sam Bankman-Fried, the founder of FTX, guilty on seven charges of fraud and conspiracy. The verdict, delivered in the Southern District of New York, marks a significant development nearly a year to the day after FTX's collapse, which affected the entire industry in some fashion.

While the jury's decision has been respected, Bankman-Fried's defense maintains his innocence and plans to vigorously fight the charges. The sentencing, which could lead to a maximum of 115 years in prison, will be determined by U.S. District Judge Lewis Kaplan at a later date.

Throughout the trial, key members of Bankman-Fried's inner circle, including co-founder Gary Wang, former Alameda CEO Caroline Ellison, and FTX's former head of engineering Nishad Singh, testified against him hoping for leniency in their own sentences. We’ll circle back to this when sentencing occurs next year.

PayPal Receives Subpoena From SEC Over Its Stablecoin PYUSD

PayPal disclosed that it received a subpoena from the SEC Division of Enforcement on November 1 over PYUSD, its stablecoin. The subpoena requests the production of documents, and PayPal stated that it is cooperating with authorities. In August, PayPal and Paxos announced their stablecoin PYUSD, backed by treasuries, dollar deposits, and other cash equivalents.

The stablecoin is expected to be pegged to the U.S. dollar and runs on Ethereum. Stablecoins aim to provide stability amid volatile cryptocurrency prices by pegging their value to a fiat currency. Stables have proven to be the killer app so far in crypto with countless new stables having joined the market in the past year.

PayPal's move enters a crowded market, but the company is banking on its brand to stand out. Analysts suggest that PayPal's foray into stablecoins is significant for the financial industry's next evolutionary step. Considering how lucrative stablecoins are in this interest rate environment, we fully expect many other companies to create their own and capitalize on the opportunity.

Coinbase Beat Q3 Earnings

Coinbase had their Q3 earnings call yesterday after-hours and only reported a third-quarter loss of $2.2 million, leading to a 4% drop in after-hours trading to $81 per share. Seeing as Coinbase posted a $1.1B loss and $550M loss in Q2 and Q3 last year respectively, this is a major improvement. Despite the loss, the company exceeded analysts' revenue expectations, earning $674M in Q3.

This marks the third time this year that Coinbase has outperformed predictions. The loss per share was $0.01, compared to the expected $0.70 loss, reflecting a turnaround from the same period last year when the firm lost $545 million amid lower cryptocurrency prices. Seeing as we’re technically in the midst of the next bull run already, we fully expect the company to perform well.

The company's diversified revenue streams, including its new layer 2 solution Base, contributed to its resilience. Coinbase's stock has surged nearly 150% since the beginning of the year despite regulatory challenges. We should note that $COIN is our largest position in legacy markets at the moment; with the full bull market around the corner, we are optimistic of its future.

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Conclusion

Touch grass, hit the gym, and don’t forget about what’s really important outside of magical internet coins.

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DISCLAIMER: This newsletter does not constitute financial advice. This is strictly educational and should not be used to make any financial decisions. Be responsible and do proper due diligence before aping.