The Daily: FTX estate prepares to sell locked Worldcoin tokens at a discount, Bitwise files for a spot XRP ETF and more

Happy Wednesday! In today's newsletter, the FTX estate prepares to sell locked Worldcoin tokens at a discount, Bitwise files for a spot XRP ETF, Australia's "Operation Kraken" seizes over $6 million from hardware wallets and more.

Meanwhile, EigenLayer responds to community concerns over early investor staking transparency.

Let's get started.

FTX estate prepares to sell locked Worldcoin tokens at a discount

The FTX estate is set to auction all of its 22.3 million locked Worldcoin tokens valued at around $37.7 million, offering them at a "significant discount," three sources with direct knowledge of the matter told The Block.

• The sale is part of the estate's ongoing effort to recover funds for creditors.
• Bids for the tokens must be submitted by 8 p.m. ET on Wednesday, with discounts ranging from 40% to 75% off the current spot market price of $1.69 per WLD token, two of the sources said.
• Parties will be notified by Thursday if their bids are accepted.
• The tokens will unlock daily through 2028 — 20,539 WLD tokens per day from Dec. 1, 2024, to July 24, 2026, and 13,689 WLD tokens from July 25, 2026, to July 24, 2028, they added.Earlier this week, Figure Markets CEO Mike Cagney also noted the
• auction and mentioned the possibility of setting up a fund to participate, similar to its involvement in the FTX estate's sale of its discounted Solana (SOL) holdings earlier this year.
• The FTX estate appears to have now sold most of its cryptocurrencies, currently holding $594 million in crypto assets, according to Arkham, including $541 million in illiquid FTT tokens that are unlikely to be sold, having already been marked to zero.

Bitwise files for a spot XRP ETF

Crypto asset manager Bitwise filed a registration statement with the Securities and Exchange Commission for a spot XRP exchange-traded fund on Wednesday.

• "The trust's investment objective is to seek to provide exposure to the value of XRP held by the trust, less the expenses of the trust’s operations and other liabilities," the firm said in the S-1 filing.
• BNY will act as the trust's administrator, while Coinbase Custody Trust Company will be the custodian for the ETF.
• Bitwise also asserted that XRP is not a security, pushing back against the SEC's stance in the past.
• "XRP is a decentralized digital asset and ownership of it is reflected on a decentralized ledger. Additionally, XRP is not a security, and is thus not subject to the protections of the U.S. federal securities laws," it said.
• The SEC has never approved a spot XRP ETF and may face challenges due to its ongoing legal battle with Ripple over its $1.3 billion sale of XRP, which it deems an unregistered security.
• If XRP is found to be a security by a court, the ETF could face liquidation under the Investment Company Act of 1940, Bitwise warned.
• Bitwise's registration statement follows the firm's filing for an entity named Bitwise XRP ETF with Delaware's Division of Corporations on Monday.

Australian police seize over $6 million in crypto after deciphering seed phrases from organized crime wallets

Australian Federal Police seized $6.4 million in cryptocurrency following an investigation into the alleged mastermind behind the encrypted messaging platform Ghost as part of its "Operation Kraken" initiative.

• Ghost was an encrypted messaging service used by organized crime groups to coordinate illegal activities, such as drug trafficking and money laundering.
• The crypto assets were seized after analytics specialists at the AFP-led Criminal Assets Confiscation Taskforce deciphered the suspect’s seed phrases from analysis of hardware wallet devices found at his home, the AFP said on Wednesday.
• Crypto hardware wallets enhance asset security by keeping private keys offline, but skilled individuals with physical access to a device can potentially extract seed phrases to access the funds.
• The operation is not affiliated with the crypto exchange Kraken.

Crypto faces 'hangover' from venture capital 'glut' during previous bull market

In a fireside chat at Messari's Mainnet conference, Tushar Jain said the crypto venture capital market hasn't fully adjusted to the post-pandemic downturn reality .

• Overhyped valuations and stagnant token prices are major challenges for the crypto sector, according to the Multicoin Capital Managing Partner. "I would say the market still has a bit of a hangover to work through."
• However, the longtime crypto investor hasn’t completely lost faith.
• "I still fundamentally believe in the core principles that underlie the industry, and we've been through these cycles before," Jain said. "This is the most cyclical industry possibly in the history of capitalism, and a lot of times, people's emotions follow the price."

Crypto trader Ansem says there was a 'misalignment of incentives' in certain celebrity memecoins

On stage at Messari Mainnet, the mono-named crypto-trading personality Ansem acknowledged his past mistakes in backing certain celebrity memecoins following controversy over apparent rugpulls that enriched the famous and hurt retail traders.

• However, despite the recent cooling of the overall memecoin frenzy, Ansem still believes the trend has legs.
• Beyond memecoins, Ansem said he's also interested in emerging chains, including Monad, Berachain and Movement, as well as "alt-VMs" (as opposed to the Ethereum Virtual Machine) like Move-VM and Solana's SVM.

In the next 24 hours

• Eurozone PPI figures are released at 5 a.m. ET on Thursday. U.S. jobless claims data follow at 8:30 a.m.
• U.S. FOMC member Raphael Bostic will speak at 10:40 a.m.

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