What happened with Bitcoin in 2023

Bitcoin has had a busy year in 2023, including increased enforcement actions from regulators and continued fallout from the bankruptcies of 2022.

Bitcoin Ordinals made waves this year, too. Popular yet controversial, the NFT-like Inscriptions caused problems for major firms — but also sparked hate from critics.

Meanwhile, intense drama ensued between Barry Silbert’s Digital Currency Group (DCG) and the Winklevoss twins’ Gemini.

Here’s a look at the most important events for Bitcoin this year.

Regulators hone in on Bitcoin and crypto

After the FTX collapse of November 2022, regulators seemed to step up enforcement actions. It would be easy to think that they got embarrassed by being hoodwinked by Sam Bankman-Fried’s former empire. Enforcement actions filed include:

February 10: Kraken agreed to suspend its staking-as-a-service program in the US and pay a $30 million fine in a settlement with the Securities and Exchange Commission (SEC).

March 27: The Commodity Futures Trading Commission (CFTC) alleged that Binance CEO Changpeng Zhao (CZ) controlled firms that traded against users on Binance US.

June 6: The SEC filed a lawsuit against Binance for allegedly listing securities on its exchange without filing the proper registrations. It also said that Binance misrepresented its level of control over Binance US.

June 6: The SEC alleged that Coinbase operated an unregistered securities and broker-dealer in a lawsuit. Coinbase CEO Brian Armstrong erroneously claimed that the SEC demanded Coinbase delist nearly every asset on the exchange.

Read more: CFTC lawsuit against Binance claims CZ traded against users

July 13: The US District Court for Southern New York ruled that $728 million in sales of XRP to institutions qualified as unregistered sales of securities. However, in a move that was interpreted as a partial victory for Ripple, the presiding judge, Analisa Torres, also ruled that $757 million in programmatic sales of XRP did not qualify as illegal securities transactions. The SEC said it was going to appeal the decision.

August 1: The presiding judge in SEC v. Terraform Labs rejected arguments that prevailed in SEC v. Ripple while ruling in favor of the SEC.

November 21: Kraken founder Jesse Powell fired back against the SEC after it filed another complaint against the exchange, alleging that it operated an unregistered exchange.

November 28: Some Coinbase users received a notification that the CFTC is seeking information on users who may have also interacted with Bybit. The CFTC may be investigating Bybit.

December 19: The US District Court for the Northern District of Illinois approved the settlement between Binance and the CFTC. Binance will pay $2.7 billion in fines and disgorgement and CZ will pay $150 million.

Ordinals become controversial and pricy

The Ordinals project and its NFT-like Inscriptions allow Bitcoin users to attach up to 4MB of data onto an individual satoshi every block. Though immensely popular throughout 2023, they aren’t officially recognized by Bitcoin Core.

Several critics like Luke Dashjr have proposed banning them altogether. Ordinals also drove up bitcoin transaction fees. The NFT-like feature also failed to solve claims about Bitcoin’s ability to fend off 51% attackers.

January 31: Ordinals started making waves as a numbering system for satoshis and a way to use Taproot to inscribe additional data on individual (numbered) satoshis.

March 8: Developers used Ordinals to create a sovereign rollup for Bitcoin.

Read more: Luke Dashjr calls Ordinals a spam ‘bug’ that should be ‘fixed’

May 8: Binance paused bitcoin withdrawals due to soaring fees caused by the Ordinals market. Ordinals-related transactions caused considerable network congestion.

May 19: Ordinal-based NFTs briefly came close to overtaking Ethereum-based NFT trading volume.

May 31: The Ordinals community debunked claims that a single wallet owns most Ordinals.

September 22: Ordinals developer Casey Rodarmor sparked controversy by suggesting revamping the Ordinals numbering system which he previously claimed was immutable.

DCG and Gemini drama

Barry Silbert’s Digital Currency Group (DCG) stirred up plenty of drama (and a tentative win) this year.

January 4: Cameron Winklevoss posted an open letter to Barry Silbert that blamed DCG subsidiary Genesis Global Capital for Gemini Earn’s failure. He demanded a meeting to resolve the matter and claimed that Silbert was avoiding any chance to do so.

January 18: DCG halted dividend payouts to “preserve liquidity” and blamed crime and fraud.

January 20: Genesis Global Capital filed for Chapter 11 bankruptcy. Barry Silbert blamed it on fallout from the Three Arrows Capital bankruptcy and FTX collapse. Meanwhile, Cameron Winklevoss again threatens legal action.

April 23: Creditors reject a proposed bankruptcy settlement, potentially slowing proceedings.

May 4: Court documents filed by FTX indicate that the exchange aimed to claw back almost $4 billion in loans and collateral owed by Genesis.

May 22: DCG failed to make a scheduled $630 million payment to Genesis. Meanwhile, Gemini said it might work with Genesis on a restructuring plan that doesn’t require DCG’s approval.

July 7: Gemini alleged that DCG covered up Genesis Global Capital’s insolvency in a lawsuit.

Read more: DCG fraudulently covered up 3AC-induced insolvency: Gemini lawsuit

August 29: A judge forced the SEC back to the drawing board with Grayscale’s proposed conversion of Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF. The ruling agreed with Grayscale’s argument that the SEC’s rejection of Grayscale’s application was “arbitrary and capricious.”

October 20: The New York Attorney General filed a lawsuit against Gemini and Genesis, alleging misbehavior on the part of both companies in relation to Gemini Earn.

November 13: Genesis reduced debt owed to Three Arrows Capital from $1 billion to $33 million in a settlement.

November 22: Genesis alleged that Gemini got $700 million in “unfair preferential transfers” in a new lawsuit.

November 29: Genesis and DCG outlined a proposed debt deal for creditors to vote on. 

December 1: While still riding the high of its legal victory against the SEC, Grayscale proposed that GBTC could commingle bitcoin in omnibus accounts “from time to time.”

December 19: Genesis blocked DCG from selling its stake in the company, likely in hopes of getting a tax credit if a sale can be delayed until after it exits Chapter 11 bankruptcy.

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