Randall Crater, Founder of “My Big Coin” Sentenced

Randall Crater, the person responsible for operating the fraudulent scheme known as “My Big Coin,” was given a sentence of one hundred months in prison and was ordered to make restitution payments totaling more than seven and a half million dollars to those who had lost money as a result of his scheme.

According to a statement that was released by the United States Department of Justice on January 31, the United States District Court Judge Denise Casper in the state of Massachusetts was the one who handed down the sentence that was given to Crater.

This sentence was handed down to Crater after he was found guilty by a federal jury on July 21 of four counts of wire fraud, three counts of unauthorised monetary transactions, and one count of operating an unregistered money-transmitting corporation. All of these charges were related to the same scheme. After adding up all of these fees, it became clear that Crater was running an unlicensed money transmission business.

Crater launched My Big Coin in 2013, and despite the fact that it was never intended to be a payment mechanism for cryptocurrencies, the company promoted itself as such. This resulted in the solicitation of potential victims between the years of 2014 and 2017, and the con was carried out right up to 2017.

According to Crater, the digital currencies that are available for purchase on My Big Coin are fully operational tokens that are backed by gold. Furthermore, the website has a collaboration with Mastercard to facilitate transactions.

In addition, Crater provided its users with access to a marketplace known as “My Big Coin Exchange,” which was promoted as a location at which users could trade their cryptocurrencies for fiat currencies such as the United States dollar and other currencies.

A substantial percentage of the $7.6 million in finance that Crater and his marketing team were successful in generating was used for the acquisition of a residence, many automobiles, and more than one million dollars’ worth of antiques, artwork, and jewellery.


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The January figures are 92.7% lower than the $121.4 million

During the month of January, there was a sharp drop in losses from exploits compared to the same time period last year. This was more encouraging news for the sector, which came on the heels of the bullish rise that occurred in the cryptocurrency market during the month of January.

PeckShield, a company that specialises in blockchain security, released statistics on January 31 indicating that crypto attacks caused $8.8 million worth of damages in the month of January.

During the course of the month, there were 24 exploits, and a total of $2.6 million worth of cryptocurrency was transmitted to mixers like Tornado Cash. The proportion of assets that were transferred to mixers is as follows: 1,200 Ether (ETH) and about 2,668 BNB (BNB).

The statistics for January are 92.7% lower than the $121.4 million that was lost to exploits during the same month in 2022.

According to PeckShield’s findings, the greatest exploit from the previous month was a Jan. 12 assault on LendHub that resulted in the theft of $6 million from the decentralised finance lending and borrowing platform. This attack accounted for 68% of the overall exploits.

Other major exploits that occurred during the month included an assault on Thoreum Finance that resulted in a loss of $580,000 and an attack on Midas Capital that resulted in a loss of $650,000 via a flash loan scam.

According to PeckShield, the number for January is also down 68% from the amount that was lost due to exploits in the month of December 2022, which was over $27.3 million.

According to DeFiYield’s Rekt database, there was a rug pull on the FCS BNB Chain token that cost $2.6 million but was not included in the data’s tally of losses. According to the data provided by DeFiYield, there was an additional loss of $150,000 due to bogus BONK tokens as well as a loss of $200,000 due to a rug pull on the Doglands Metaverse gaming platform.

On January 4, a phishing attempt was launched against the GMX decentralised trading system, which resulted in at least one victim losing as much as $4 million.

In addition, the company said that the amount of cryptocurrency that was taken in December, $62 million, was the “lowest monthly number” in 2022.

At the conclusion of the previous year, the ten greatest exploits of 2022 had resulted in a staggering $2.1 billion being stolen from various cryptographic algorithms.


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Celsius’ Official Creditor Committee Denies Rejected Bids

There have been rumours circulating that the bids for Celsius’ crypto assets have been turned down, however the attorney who represents the official creditor committee for Celsius has refuted such rumours.

Attorneys from White & Case LLP, Gregory Pesce and Aaron Colodny, addressed the so-called “leaked” bids for Celsius’ crypto assets that were shared by cryptocurrency blogger Tiffany Fong during a “town hall” event held on Twitter Space on January 31. The event followed the examiner’s report on Celsius.

Pesce said that the notion that the bids had been turned down was completely and utterly incorrect.

The post that Fong made on Substack on January 27 pointed to at least five companies that were reportedly interested in placing a bid on Celsius’ crypto assets. These companies included Binance, Bank To The Future, Galaxy Digital, crypto trading company Cumberland DRW, and digital asset investment firm NovaWulf.

During that time, Fong said that the bids had been “abandoned for the most part,” which was a reference to a previous remark made by a Celsius lawyer declaring that the bids they had received up to that point “had not been persuasive.”

On the other hand, the counsel for the Celsius Official Committee of Unsecured Creditors (UCC) maintained that this was not the situation at all.

There has been no decision made on the proposals. That is completely false, and I have high hopes that I will be able to set the record straight about that misconception today.

The attorney would not clarify whether the bids that were referenced in the leak were true or not, but he did say that it was “regrettable” since it decreases the freedom that the committee has in the process of bargaining.

“Every day, we and the debtors are delivering public communications and private messages to possible investors about where they are in the process,” revealed Pesce. “These messages inform the potential investors about where they stand in the process.”

“The messages that we sent them are very planned out and structured so that we can play different parties against each other and make sure that we get the last dollar for Celsius account holders because the success of that process will determine recoveries here,” we wrote in one of our emails. “The messages that we sent them are very planned out and structured.”

“It’s thus unfortunate that this leak occurred,” the speaker said.

“It’s especially terrible that this has been commercialised by the source of that leak for the purpose of advertising her paid-for content page on Patreon,” he added, referring to Fong. “It’s particularly sad that this has been monetized by the source of that leak.”

Fong has given a response to the charge, in which he argues that the bids that were stolen are completely free and there is “no paywall.”

She said that the leaked bids are NOT hidden behind a paywall and that this is an odd assertion.

The crypto blogger shared information on the five bids on Substack the previous week, and as of the time of this writing, it is still possible to read the information without making a payment.

Pesce said that they are now conducting an investigation into how the leak happened and added that there was “serious worry that a possible investor that was engaged in the process may have been attempting to influence it for their personal gain.”

“With all of that being stated, we are putting in a lot of effort to guarantee that we will be able to make a decision as swiftly as possible and put an end to this bankruptcy. “We’re attempting to minimise the impact of that leak as much as we can,” he added.

In light of the most recent examiner’s findings on Celsius, the UCC lawyers provided some more commentary as well.

“I’ll be quite straightforward with you: the actions that Mr. Mashinsky and many other members of his staff took were unethical. Mr. Mashinsky has been dishonest. “By manipulating the tapes, they were able to cover up a good deal of his lying,” Colodny stated.

They put their own interests above that of the firm, and more significantly, they put their own interests ahead of those of the account holders.

The attorneys for the UCC have stated that they will continue to investigate a variety of options for recovery, such as rebranding the company as a new, publicly traded “recovery corporation,” selling off some of the company’s mining equipment, and investigating “winding down Celsius or transferring crypto to a third party.”


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BankProv Stops Offering Loans Secured by Crypto Mining Rigs

After wiping down $47.9 million in loans that were mostly secured by cryptocurrency mining rigs during the year 2022, the holding company for the cryptocurrency-friendly bank, BankProv, has announced that it would no longer provide loans that are secured by cryptocurrency mining rigs.

Since September 30, 2022, BankProv has, according to a document that was submitted to the United States Securities and Exchange Commission (SEC) on January 31, 2019, the percentage of its digital asset portfolio that is comprised of rig-collateralized debt has practically been cut in half.

As of the 30th of December in the previous year, the bank held a total of $41.2 million in loans related to digital assets. Of this total, $26.7 million was worth of loans that were collateralized by crypto mining rigs. However, this amount “will continue to decline as the Bank is no longer originating this type of loan.”

During the bull market of 2021, the cryptocurrency mining sector took on enormous amounts of debt, and miners often offered mining equipment that they owned as collateral in order to reduce their interest rates and save money.

The ensuing bear market that began in 2022 resulted in difficult circumstances for miners. As a consequence, many miners were obliged to sell the Bitcoin (BTC) mining rigs they possessed in order to fund their operational expenses, which resulted in a precipitous drop in the price of mining gear.

In spite of the lowering prices, several financial institutions that had issued debt that was secured by mining rigs were required to reclaim some of the miners that had been pledged as security.

A prior filing with the SEC indicates that on September 30, 2022, BankProv confiscated mining rigs in return for the forgiveness of $27.4 million in loans. As a consequence of this transaction, the company was required to write down an amount equal to $11.3 million.

According to Carol Houle, the chief financial officer of its parent firm Provident Bancorp, “As we look on 2022, we are eager to absorb its lessons and emerge a better, stronger bank.” The business’s decision to discontinue providing these sorts of loans was likely strongly influenced by the losses. In spite of the losses we incurred in 2022, we start 2023 in a strong financial position and with a diverse clientele.


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Hopes Dashed for India’s Crypto Community

The expectations of millions of cryptocurrency holders in India were dashed when the country’s federal budget for the year 2023 included no reference to cryptocurrencies or the technology known as blockchain. Many people in the cryptocurrency community in India had great hopes that the hefty cryptocurrency tax that was established in March 2022 will be lowered in some way.

Nirmala Sitharaman, the Indian Minister of Finance, delivered the union budget on February 1st, during which she announced many significant modifications to the income tax bands. However, over the course of the discussion, the minister did not discuss cryptocurrencies, digital currencies issued by central banks, or blockchain technology. As of the previous year, India imposed a tax of 30% on crypto earnings and a tax of 1% deducted at source (TDS) on all crypto transactions, which effectively put a stop to a growing business almost immediately.

The major goal of imposing a TDS on any and all cryptocurrency transactions was to compile an accurate count of the number of Indian people who are now engaging in cryptocurrency use. Beginning in May 2023, the information pertaining to this data will be made accessible to the government when Indians submit their income tax forms.

Within ten days of the new tax policy being implemented, the trading volume on major cryptocurrency exchanges in India plunged by 70 percent, and it dropped by almost 90 percent over the next three months. Cryptocurrency traders were driven to use offshore exchanges, and nascent cryptocurrency ventures were compelled to relocate outside of India as a result of the country’s stringent tax policy.

The previous Finance Secretary of India, Subhash Chandra Garg, said before that there should be a great deal more clarification about crypto taxation. He said that it was possible that the forthcoming budget for 2023 would not include any fresh modifications. In addition to this, Chandra was the head of the committee that was responsible for writing the first crypto law.


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U.K. Treasury Proposes Ambitious Crypto Regulations

His Majesty’s Treasury has finally released a long-awaited consultation document in preparation for the imminent regulation of cryptocurrencies in the United Kingdom. The comprehensive paper, which is 80 pages long, covers a wide variety of subjects, ranging from the challenges posed by algorithmic stablecoins to the concept of nonfungible tokens (NFTs) and initial coin offers (ICOs).

The Treasury has claimed that the recommendations aim to position the financial services sector of the United Kingdom in the forefront of crypto and to prevent harsh control measures that have gathered traction worldwide throughout the crypto winter. This is the intention behind the proposals.

It was declared by the Treasury that there would not be a distinct regulatory system for cryptocurrency since it will be governed under the framework of the Financial Services and Markets Act 2000 in the United Kingdom (FSMA). The objective is to create an environment in which crypto and conventional financial systems compete on an equal footing. However, the Financial Conduct Authority (FCA), which is Britain’s primary financial regulator, will modify the laws established by the FSMA in order to apply to the market for digital assets.

At the very least, one of the annoying effects of that ruling is that it requires participants in the cryptocurrency market to go through the registration process again. They were previously required to go through the procedure in order to get a licence under the FCA’s licencing framework, but now they will have to be evaluated “against a broader variety of indicators.”

The good news is that, unlike in the conventional banking industry, organisations dealing in cryptocurrencies won’t be required to frequently publish their market data. On the other hand, the exchanges would be obligated to store the data and ensure that it may be accessed at any time.

In contrast to several of its overseas peers, the Treasury Department has opted not to prohibit the use of algorithmic stablecoins. They will instead be classified as “unbacked crypto assets,” and not as “stablecoins,” as a result of this change. Despite this, the word “stable” cannot be used in any of the marketing for the algorithmic coins that are being done for cryptocurrencies.

According to the consultation document, a distinct regulatory framework for crypto lending platforms would be examined, and it should require lenders to take into consideration an acceptable collateral value and contingency preparations in case the participants’ main market counterparties collapse.

“Beginning immediately, the government need to promote deeper engagement with the business sector in order to design a comprehensive, risk-based framework that is in line with worldwide best practise.”

Nick Taylor, who is in charge of public policy for the EMEA region at the global cryptocurrency exchange Luno, believes that the sector is now through a watershed moment. He made the following observation: “Whilst there is still a distance to go until new laws come into place, we’re heartened by the size of the Government’s ambition.”

On April 30th, 2023, the consultation will come to an end. Up until that point, the British government is interested in hearing feedback from any and all relevant parties, including crypto companies, financial institutions, trade associations, representative bodies, academic institutions, law firms, and consumer advocacy organisations.


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Tether Denies Receiving Any Loans From Celsius

The company that is responsible for the most valuable stable coin in terms of market capitalization, Tether (USDT), alleges that they have never received a loan from the defunct cryptocurrency lender Celsius. This claim is based on the fact that Celsius no longer exists. The chief technical officer of the firm is the one who provided this information.

The chief technical officer of the cryptocurrency exchange Tether as well as the Bitfinex platform, Paolo Ardoino, went to Twitter on January 31 to make the statement that Tether has “never borrowed from Celsius.”

The tweet was issued as a response to the bankruptcy examiner report for Celsius, which claimed made a mistake in claiming that Tether was among Celsius’ creditors along with other firms like Three Arrows Capital, who borrowed $75 million from the company.

On the 31st of January, the examiner’s report was made public, and on page 183, it said that “Celsius’s loans to Tether were twice its credit limit.”

According to the report, “Tether’s exposure eventually grew to over $2 billion,” which became a problem in late September 2021 when it was described as presenting a “existential risk” to Celsius by the risk committee. The report also states that “Tether’s exposure eventually grew to over $2 billion.” In addition to this, the study states that “Tether’s exposure ultimately rose to more than $2 billion.”

Denying any exposure to problematic Celsius, Ardoino stated that examiner Shoba Pillay had jumbled up prepositions in the examiner report, and that what she really meant was “Celsius loans from Tether” rather than “Celsius loans to Tether.” This statement was made in response to the fact that Ardoino claimed that the examiner had made a mistake.

A contributor to the Financial Times called Kadhim Shubber started a dialogue on Twitter in which the chief technical officer of Tether remarked that the statement “Either is a mistake or a mischaracterization.”


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Binance’s New Blockchain Platform Aims to Build Web3 Infrastructure

In its recently published BNB Greenfield white paper, the cryptocurrency exchange Binance stated that it is interested in constructing a blockchain-based Web3 infrastructure. BNB Chain is a blockchain platform that was established by Binance.

According to the white paper, it is a decentralised storage infrastructure that is integrated into BNB Chain. This infrastructure grants users and decentralised applications (DApps) complete control of the data stored inside it. Hosting websites, maintaining personal clouds and data archives, publishing, and other applications are all examples of possible use cases.

The core team at BNB Chain is responsible for building the testnet for the planned Web3 infrastructure. This testnet is backed by community developer teams from Amazon Web Services, NodeReal, and Blockdaemon. BNB Greenfield is a distributed storage system that is currently in development. It will integrate smart contract functionality for Web3 apps and is powered by the BNB (BNB) token (previously known as Binance Coin).

Victor Genin, senior solution architect at BNB Chain, revealed the intention to create a new theme for the ownership and utility of data while discussing the motivation behind the upcoming initiative. He added that “BNB Greenfield will build utility and financialization opportunities for data that is in storage as well as bring programmability to the ownership of data.”

Users that have BNB tokens and a BNB Chain address are able to store data on BNB Greenfield, which functions in a manner similar to that of Web2 cloud storage systems such as DropBox. The creation of websites and the archiving of historical data are two more possibilities.

In addition to this, the system will make use of something called nonfungible tokens, or NFTs, in combination with smart contracts in order to govern who owns the data and who has permission to view it. On the backend, BNB Chain will be utilised to hold the storage metadata; however, the actual data storage will be handled by third-party storage providers.

Recent events have resulted in a cooperation between Mastercard and Binance for the introduction of a prepaid cryptocurrency card in Latin American countries. This desire for continued product growth has been pursued by Binance.

On January 30, the cryptocurrency exchange made the announcement that it will be launching the Binance Card in Brazil. The card will be issued by Dock, a payment institution that is licenced by the central bank.

The card enables real-time conversion of fiat currency to any of 14 different cryptocurrencies, and it comes with a number of enticing bonuses, such as the opportunity to earn up to 8% cash back in cryptocurrency on qualifying transactions and waived fees for certain ATM withdrawals.


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FTX and Affected Parties Request Subpoenas for Information from close relatives

As the bankruptcy procedures go forward, FTX and the impacted parties have issued subpoenas demanding information and documents from close relatives of the company’s former chief executive officer, Sam Bankman-Fried.

A request that was submitted to the United States Bankruptcy Court for the District of Delaware in an effort to get useful information from individuals such as Gabriel Bankman-Fried and Barbara Fried, the founder of FTX’s brother and mother, respectively, has been granted.

According to the complaint, FTX and its creditors are attempting to acquire estate assets that belong to the firm as well as the investors. On the other hand, not every member of Bankman-close Fried’s circle has responded with information demands. According to the petition, the only parties that have agreed to participate with information sharing are the legal representatives of Zhe “Constance” Wang, chief operating officer of FTX Trading, and Joseph Bankman, Sam’s father.

The complaint also takes aim at the former chief executive officer of FTX, arguing that his public vows to “help consumers” and “explain what occurred” on social media were little more than lip service given his refusal to voluntarily engage in the procedures of the bankruptcy.

Nevertheless, in spite of these assertions, Mr. Samuel Bankman-Fried has not voluntarily replied to or cooperated with the Requests. As a consequence of this, a subpoena that has been granted by the court is required.

It is not only Bankman-Fried who has disobeyed demands for assistance from FTX authorities; other insiders have done the same. Requests for information that were made to Gary Wang, the former chief technology officer of FTX group, and Caroline Ellison, the CEO of Alameda Research, were both turned down, while Barbara Fried “ignored” the requests entirely.

Nishad Singh and Gabriel Bankman-Fried, who were both co-founders of the FTX group, have not offered any “serious participation” or reaction in order to participate with the continuing bankruptcy procedures.

The subpoena that was issued to Bankman-Fried and his advisors in an effort to get further information is being promoted as a tool that will assist in the recovery of “significant additional estate assets” that were moved in the time leading up to the failure of FTX.

The brief also contended that courts often force former executives and advisors to submit documents in bankruptcy proceedings, and that similar action should be done with the FTX catastrophe because of the similarities between the two situations.


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Former FTX CEO ordered not to contact current or former employees

As a condition of his release from federal custody, the federal court who is presiding over the criminal case against Sam Bankman-Fried, the former chief executive officer of FTX, has ruled that he is not allowed to have any contact with the present or former workers of the exchange.

In a ruling issued on February 1, 2019, Judge Lewis Kaplan of the Southern District of New York stated that in order for Bankman-Fried to remain free on bail until the conclusion of his trial, he was to be prohibited from communicating with current or former employees of FTX or Alameda Research “except in the presence of counsel.” As part of his ruling, Kaplan added that SBF was not allowed to communicate with anyone using encrypted messaging applications such as Signal. Earlier filings made by the prosecution stated that the former CEO of FTX had used the app to communicate with the current general counsel of FTX US, Ryne Miller. Kaplan’s ruling prohibits SBF from communicating with anyone using such applications.

“The undisputed information that is available to the Court regarding the ‘nature and seriousness of the danger posed by [defendant’s continued] release’ on the existing conditions has changed substantially since he was released, and there appears to be a material threat of inappropriate contact with prospective witnesses,” said Kaplan. “The information has changed substantially since he was released, and there appears to be a material threat of inappropriate contact with prospective witnesses,” said Kaplan. “The Court concludes that this danger is obviously and persuasively sufficient to support the imposition of additional restrictions awaiting the entire argument of the cross-applications,” which was originally written as “that risk is clearly sufficient to warrant the imposition of further conditions.”

According to Kaplan, SBF was the driving force behind the decisions to delete all Slack and Signal communications between employees of FTX and Alameda beginning in 2021. SBF allegedly told the former CEO of Alameda that any potential legal case would be more difficult to build without proper documentation. In his judgement, he also referenced the Signal communications he had with Miller and other techniques for getting in touch with “other present and former FTX workers.”

The court has not yet made a decision about whether or not SBF would also be prohibited from accessing funds from FTX and Alameda as part of the terms of his release. In a document submitted on January 30, the Department of Justice alleged that Bankman-Fried had contacted FTX CEO John Ray to explore potential avenues for gaining access to the company’s money. A hearing on the subject is scheduled to take place on February 7, and Judge Kaplan has said that he will attend.

The trial of Bankman-Fried is set to get underway in October at the United States District Court for the Southern District of New York, where he is being prosecuted on eight felony charges, one of which is wire fraud. The bankruptcy proceeding for FTX is also now ongoing in the District of Delaware, where the debtors have recently sought subpoenas for information and documents from SBF’s family members.


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Bitcoin (BTC) $ 41,944.24 4.44%
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Bitcoin Cash (BCH) $ 234.82 7.61%