Day: February 4, 2023

FBI seizes $100,000 in cryptocurrency and NFTs

by Blockchain News

The Federal Bureau of Investigation (FBI) is said to have taken possession of 86.5 ether (ETH) as well as two nonfungible tokens (NFTs) with a combined value of over $100,000 from a phishing scammer.

The suspected con artist in issue, Chase Senecal, also known as Horror (HZ) online, was originally uncovered as a result of a comprehensive investigation that was conducted by an independent blockchain investigator named ZachXBT and publicised in September 2022.

The formal statement that was sent out by the FBI on February 3 said that Seneca’s property, which included a watch with a value of $41,000 made by Audemars Piguet called a royal oak watch, was “seized for federal forfeiture for violation of federal law.”

Aside from mentioning that all of the property was taken into custody on October 24, 2022, the letter from the FBI did not provide a great lot of more information on the incident. The confiscated non-fungible tokens (NFTs) included Bored Ape Yacht Club#9658 and Doodle #3114, which, at the time of the seizure, had respective values of $95,495 and $9,361.

At the time of the seizure, the value of the 86.5 ETH was determined to be $116,433, but it is now estimated to be $144,000.

At this moment, the exact extent of the legal procedures that have been brought against Senecal cannot be determined due to a lack of clarity. However, a law enforcement advisory published by the FBI states that federal forfeiture is a weapon that gives the government the ability to “remove without recompense for the person ownership of property engaged in a crime.”

According to the Federal Bureau of Investigation (FBI), this kind of thing “may arise in a civil proceeding, such a lawsuit against the item, or after the conviction of a person in a criminal prosecution.”

The on-chain detective ZachXBT revealed on February 3 through Twitter that the property seizure did “occur as a consequence” of his investigation, despite the fact that the FBI has not publicly acknowledged ZachXBT’s contribution to the case in any way.

ZachXBT commented, “I look forward to possibly seeing more phishing fraudsters face a similar fate in the future for injuring so many people in this arena.” “I look forward to seeing more phishing scammers suffer a similar fate in the future.”

People in the community have joked that as a result of the recent seizure of a Bored Ape NFT, the FBI will change its profile image to that of Ape #9658.

During the course of the inquiry, ZachXBT was able to uncover Senecal’s identity and on-chain behaviour with the assistance of many crucial indicators, one of which was the flashy watch.

ZachXBT explained that after seeing HZ brag about the new watch on social media, he asked “around a few mutual friends who sell watches” and eventually managed to get in contact with the person who sold that particular AP watch to Senecal. Zach’s explanation was included in a medium post that was published on September 2, 2022.

Unfortunately for Senecal, the transaction was reported to have been completed on the blockchain using USD Coin as the medium of exchange (USDC).

This is not the first time that research conducted by ZachXBT has been an important factor in assisting governmental officials. In October 2022, the national cyber unit of France acknowledged ZachXBT’s efforts in helping it capture and prosecute a gang of accused fraudsters suspected of stealing $2.5 million worth of NFTs using phishing schemes. ZachXBT was able to assist in the investigation because to information provided by ZachXBT.

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TZERO Shut Down Crypto Exchange

by Blockchain News

This information was sent to customers by the corporation on February 3 via its Twitter account in the form of a message. The cryptocurrency exchange known as tZERO is mostly owned by Overstock, and its last day of business will be March 6th of this year. As a result of the suspension, the company announced that it would maintain its concentration on the regulated securities products that it provides during the time that the United States Securities and Exchange Commission (SEC) and other authorities are working to clarify the legal status of crypto assets.

The city of New York is home to the headquarters of the firm known as tZERO, which is focused on developing technological solutions for the financial sector. This makes it considerably easier for private corporations to sell their assets on the public market whenever they find themselves in a position where they need to or want to do so. It is probable that the fact that tZERO provides investors with the opportunity to purchase tokenized shares is the factor that has contributed most to the company’s success in the cryptocurrency industry. Tokenized shares, which may also be referred to as “digital securities” due to their ability to be exchanged on a blockchain, are frequently referred to as “digital securities.”

The online retailer Overstock reportedly owns around 55% of the firm tZERO, as stated in a statement that was issued by the company on August 26 in the form of a press release.

The conventional cryptocurrency exchange known as “tZERO Crypto” was officially introduced in the year 2019, when tZERO celebrated its 10th anniversary. On this particular platform, users had the ability to purchase, trade, and store a wide variety of cryptocurrencies, some of which were Bitcoin (BTC), Ether (ETH), and Litecoin (LTC), amongst others. On the other side, the corporation stated in the most recent notice that it will stop operations of this exchange on March 6th. This notification was sent out on February 3rd and was the most current one that was sent.

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CFTC Chair Rostin Behnam Continues Calls for Non-Security Tokens Regulations

by Blockchain News

The chairman of the United States Commodity Futures Trading Commission, often known as the CFTC, is Rostin Behnam, and he has said that he would continue working toward the agency’s goal of regulating non-security tokens.

Behnam cited “bankruptcies, failures, and runs” as part of the argument for Congress to grant the CFTC the ability to handle regulation for cryptocurrencies in statements that were made public on February 3 and were intended for an event hosted by the American Bar Association. The head of the Commodity Futures Trading Agency (CFTC) said that the commission was “ideally positioned” to resolve any regulatory deficiencies; nonetheless, the commission deferred to U.S. politicians to go forward with legislation.

“Regulation is important to protect consumers and to avoid failures which cannot reliably be confined within any limits across the local and global financial systems,” said Behnam. “Regulation is necessary to protect customers and to prevent failures.” “It makes no difference if one or more of these things happen in 2023 or 2033; we still need to take action. There is a new Congress, and I want to continue participating in legislative drafting and offering my expertise in that capacity whenever it is required.

According to the head of the Commodity Futures Trading Commission (CFTC), funding increases for the commission would also help the agency develop its enforcement staff, which has brought 69 crypto-related proceedings to far – a list that includes FTX, Ooki DAO, and other entities. Behnam said that the team was “working towards another strong year of precedent-setting cases” against dishonest or unlawful operations using digital assets.

Even if the political composition of the 118th Congress will be somewhat different from that of the one before it, it is still unknown whether or not the CFTC will be granted further jurisdiction under Behnam’s leadership. The Lummis-Gillibrand Responsible Financial Innovation Act was initially proposed in June 2022 with the intention of addressing the roles of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) with regard to cryptocurrency regulation. This bill may be one of the pieces of legislation that lawmakers consider revising.

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Binance Acquires Majority Stake in Gopax

by Blockchain News

Through its recent purchase of the South Korean cryptocurrency trading platform Gopax, the major cryptocurrency exchange Binance is making its way back to South Korea.

Binance has reentered the South Korean market after leaving it two years ago, according to an announcement made by the business on February 3, stating that it has purchased a controlling position in Gopax, which is funded by Digital Currency Group. The financing for the deal was provided by a finance-initiated investment initiative called as the Industry Recovery Initiative, to which Binance committed an amount equal to one billion dollars.

Binance, according to the CEO of the company, Changpeng Zhao, is not only responsible for safeguarding cryptocurrency consumers, but also the cryptocurrency industry as a whole. “The Industry Recovery Initiative was established in order to provide help to promising businesses that were knocked back as a result of the happenings of the previous year. We have high hopes that taking this step with GOPAX will contribute to the further revitalization of the blockchain and cryptocurrency industries in Korea,” he said.

According to reports, Binance Chief Business Officer Yibo Ling said that the company has bought a “significant” stock holding at Gopax. However, Ling did not disclose the specifics of the transaction. Previous reports stated that Binance bought a 41% interest from Gopax’s main shareholder, Lee Jun-hang, despite the fact that the transaction was initially scheduled to be revealed a year ago.

After Gopax temporarily suspended withdrawals from some products in November 2022 in response to the collapse of the FTX exchange, the transaction was finalised a few months later.

As a response to problems encountered by the crypto lending company Genesis Global Capital, which has now gone out of business, Gopax has suspended the withdrawal of principal and interest payments via its decentralised finance (DeFi) service GoFi. According to reports, before to filing for bankruptcy, Genesis was Gopax’s second biggest stakeholder and a crucial commercial partner, contributing its GoFi product.

Binance intends to invest the newly acquired funds into the Gopax exchange in order to facilitate client withdrawals and interest payments for GoFi after the completion of the transaction. In addition to promoting crypto education, the programme intends to foster close engagement with the authorities in South Korea and the players in virtual asset markets.

According to what Ling had to say about the matter, “the essential aim of this arrangement was to help clients and make sure that any customers who wish to withdraw their assets have the chance to do so.”

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Core Scientific to Pay Outstanding Debt with Mining Machines

by Blockchain News

The New York Digital Investment Group (NYDIG) and the cryptocurrency mining company Core Scientific came to an agreement wherein Core Scientific would pay off an outstanding debt of $38.6 million by giving over more than 27,000 mining devices that were used as collateral.

The corporation said in a document submitted to the court that the mining rigs were no longer necessary to its operations and future plans. The company is now awaiting clearance from the United States Bankruptcy Court for the Southern District of Texas, which is in control of the procedures at this point.

Core Scientific emphasised that the long-term advantages of paying off its debt “outweigh the immediate loss,” despite the fact that the business acknowledged that the action would have a detrimental effect on the company’s sales. The company that mines cryptocurrencies views the move as the first step toward becoming more lucrative and sustainable in the long run.

Additionally, the company is transitioning its operations to a fleet of mining rigs that it describes as “slightly smaller, but more efficient.” These mining rigs had been stored away and were not actively mining Bitcoin (BTC). The business intends to reduce some of the losses sustained as a result of the transfer of assets by putting into operation the S19 XP mining rigs that are not being used at the present time.

On December 21st, the cryptocurrency mining firm filed its Chapter 11 bankruptcy petition. A number of months had passed since the firm disclosed in a statement with the Securities and Exchange Commission that it was going through a difficult financial period before this file was made. The firm said at the time that its financial difficulties were due to higher power costs, an increase in the worldwide Bitcoin hash rate, low Bitcoin values, and the bankruptcy of Celsius.

The mining company’s attempt to replace its current credit with a new loan worth $70 million was given the go-ahead by the bankruptcy court on January 31. Because of this, the investment bank B. Riley, which is also one of Core Scientific’s debtors, will now be able to provide the company with a loan.

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Core Scientific to Pay Outstanding Debt with Mining Machines

by Blockchain News

The New York Digital Investment Group (NYDIG) and the cryptocurrency mining company Core Scientific came to an agreement wherein Core Scientific would pay off an outstanding debt of $38.6 million by giving over more than 27,000 mining devices that were used as collateral.

The corporation said in a document submitted to the court that the mining rigs were no longer necessary to its operations and future plans. The company is now awaiting clearance from the United States Bankruptcy Court for the Southern District of Texas, which is in control of the procedures at this point.

Core Scientific emphasised that the long-term advantages of paying off its debt “outweigh the immediate loss,” despite the fact that the business acknowledged that the action would have a detrimental effect on the company’s sales. The company that mines cryptocurrencies views the move as the first step toward becoming more lucrative and sustainable in the long run.

Additionally, the company is transitioning its operations to a fleet of mining rigs that it describes as “slightly smaller, but more efficient.” These mining rigs had been stored away and were not actively mining Bitcoin (BTC). The business intends to reduce some of the losses sustained as a result of the transfer of assets by putting into operation the S19 XP mining rigs that are not being used at the present time.

On December 21st, the cryptocurrency mining firm filed its Chapter 11 bankruptcy petition. A number of months had passed since the firm disclosed in a statement with the Securities and Exchange Commission that it was going through a difficult financial period before this file was made. The firm said at the time that its financial difficulties were due to higher power costs, an increase in the worldwide Bitcoin hash rate, low Bitcoin values, and the bankruptcy of Celsius.

The mining company’s attempt to replace its current credit with a new loan worth $70 million was given the go-ahead by the bankruptcy court on January 31. Because of this, the investment bank B. Riley, which is also one of Core Scientific’s debtors, will now be able to provide the company with a loan.

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Australia Opens Public Consultation on National Taxonomy of Crypto Assets

by Blockchain News

In response to the ongoing regulatory arms race taking place throughout the world, Australia has initiated a public consultation over the classification of its own cryptocurrency assets. The national authorities want to differentiate between four primary categories of items that are connected to the cryptocurrency business.

The Australian Treasury issued a consultation document on “token mapping” on February 3, claiming that it would serve as a fundamental step in the government’s multistage reform strategy to regulate the market. This announcement was made. It is intended to contribute to “a fact-based, consumer mindful, and innovation-friendly” approach to the formulation of public policy.

In this study, some fundamental definitions for cryptographic concepts are proposed using a methodology that is both “functional” and technology-neutral.

At the most fundamental level, it provides an explanation of the fundamental ideas behind cryptographic networks, cryptographic tokens, and smart contracts. A decentralised computer network that is capable of hosting crypto tokens is what the Treasury envisions when it talks about what a crypto network is. The storing of information and the processing of user commands are its two fundamental functions. According to the research study, Bitcoin and Ethereum are the two public crypto networks that have the largest name recognition.

A unit of digital information that may be “exclusively utilised or controlled” by a person who does not administrate the host hardware where the token is recorded is referred to as a crypto token. This is the definition of a crypto token. According to the research report, one of the most important characteristics that set crypto tokens apart from other types of digital records is the ability to exercise “exclusive use and control.”

A computer code that is submitted to the database of a crypto network is what constitutes a smart contract. It entails intermediaries or agents executing tasks under promises or other arrangements or processes being carried out by cryptographic networks without the need of intermediaries or agents, as well as without the use of promises.

Using these straightforward concepts as a foundation, the study presents its taxonomy of four distinct categories of crypto-related products:

Although the study does not present any legislative efforts and rather suggests to begin the conversation on this taxonomy, the authors of the article predict that a significant section of the crypto ecosystem will be able to comply with current regulations with only minor modifications. It is the parts of the ecosystem whose services are being assured by public, self-service software that may need the development of a whole new regulatory framework.

The Treasury Department will keep an open mind and listen for input until March 3. Midway through the year 2023, a similar report will be published on the potential licencing and custody framework for cryptocurrencies. This will be the next key stage in the ongoing process of a national regulatory debate.

The consultation document that His Majesty’s Treasury of the United Kingdom had prepared for the crypto regulation was also released on February 1. In it, the financial authority stressed the lack of requirement in the separate law, given that the current Financial Services and Markets Act is capable of covering digital assets. This is due to the fact that the Financial Services and Markets Act was amended in 2013.

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Binance Bans WazirX From Using Its Services

by Blockchain News

The ongoing dispute between the global cryptocurrency exchange Binance and Zanmai, the operator behind the Indian cryptocurrency exchange WazirX, continues with a new blog post claiming that Binance is prohibiting WazirX from making use of its services. This is the latest development in the ongoing conflict between the two parties.

Binance published a statement on February 3 in which it recognised the continuing “public dispute” that it is having with Zanmai about Zanmai’s assertions that Binance is involved in operating WazirX. On January 26, Binance said that it has given WazirX the ultimatum of retracting its remarks and continuing to use Binance wallet services or terminating its use. WazirX chose to continue utilising Binance wallet services.

According to the notification, Zanmai did not reverse their statement, and the company now has until February 3, 2023 at 23:59 UTC to withdraw all of their cash from the accounts that are utilised for WazirX activities.

At the time this article was written, Binance explained that Zanmai had monies that are still present in Binance wallets that are being utilised for operational reasons.

This comes less than a month after WazirX disclosed that it stores 90% of the cash belonging to its customers in wallets associated with Binance, while the remaining 10% are kept in wallets associated with cold storage.

This declaration was made after a number of cryptocurrency exchanges published proofs-of-reserves in response to the issue involving FTX.

The biggest cryptocurrency exchange in India is called WazirX. In spite of this, it has been getting into trouble with the local authorities over the course of the last year. The Indian authorities accused the exchange of helping to launder around 130 million dollars worth of illicit funds.

During the time that the inquiry was ongoing, the exchange had froze the access to millions of dollars worth of user cash. It was at this time that Binance started openly distancing itself from the Indian exchange. This was done in the form of a tweet from the CEO of Binance, Changpeng Zhao, who stated that Binance does not control the exchange.

Binance quickly took the side of the Indian authorities conducting the investigation into WazirX and disabled the ability to conduct off-chain financial transactions with the exchange once this announcement was made.

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Russia largest bank is moving forward with the plan

by Blockchain News

Sberbank, the biggest bank in Russia, is pushing ahead with the plan to deploy its decentralised financing (DeFi) platform. The bank is now getting ready to test out the product within the next few months.

The head of Sberbank’s Blockchain Lab, Konstantin Klimenko, said on February 3 that the financial institution anticipates beginning open trials of its DeFi platform by May 2023. This information was published by the regional news outlet Interfax.

According to Klimenko, the new DeFi platform from Sberbank is now undergoing testing in a private beta phase. By the end of April, the platform will be completely open, allowing users to engage in the first commercial transactions.

The CEO said that the blockchain platform would be compatible with the Ethereum blockchain. This will enable users to transfer their assets using significant wallets, such as MetaMask, which was mentioned in the previous sentence. Klimenko also said that users would have the ability to move their assets from other platforms to this one.

The blockchain executive noted that Sberbank’s DeFi platform is working toward the goal of becoming a leading participant in the DeFi ecosystem in Russia. In addition to this, he was positive about the potential of decentralised finance systems to supplant the conventional financial services market.

This news is in keeping with Sberbank’s previously revealed intentions to permit DeFi apps on the bank’s infrastructure, therefore it makes sense that the bank would make this announcement now. Sberbank made the announcement in November 2022 that its proprietary blockchain technology will soon be compatible with smart contracts and apps running on the Ethereum network. This was one of the new features that was introduced.

It is not obvious how the future platform is going to be controlled, which may be due to the fact that Russia has not yet developed any regulations regarding digital money. Anatoly Aksakov, the chairman of the Duma’s Committee on Financial Market, claims that Russia would “certainly” implement cryptocurrency legislation in the year 2023.

According to earlier reports, Sberbank had a difficult time launching several blockchain products over the last few years since the Russian central bank repeatedly delayed their registration. Sberbank had anticipated launching its digital asset issuance platform in 2021, but it did not gain clearance from the Bank of Russia until the spring of 2022. The Russian government owns 50% plus one share of Sberbank, making it the institution’s largest stakeholder.

On February 2, Alfa Bank, which is one of the largest private banks in Russia, was granted permission to issue digital assets, joining Sberbank, the state-backed tokenization platform Atomyze, and the fintech company Lighthouse. Sberbank was the first financial institution in the country to be granted this permission.

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WisdomTree cryptocurrency funds lose value in fourth quarter

by Blockchain News

As a result of the protracted bear market in Bitcoin (BTC) and other cryptocurrencies, the value of the digital asset assets managed by WisdomTree, a fund management company based in the United States, fell by a significant amount during the fourth quarter.

The cryptocurrency funds managed by WisdomTree had a total asset value of $136 million as of the end of the year 2022, which was down from $163 million at the beginning of the quarter and represented a depreciation of $23 million, the company disclosed in its quarterly earnings report on February 3, 2023. During the period under review, there was a total of just $4 million worth of redemptions or outflows from the funds. In the previous year, the cryptocurrency portfolios managed by WisdomTree contained a total value of assets equal to $357 million.

Although the fund manager’s operational revenues grew to $73.31 million in the fourth quarter, the manager reported a net loss of $28.3 million for the period. It was the eleventh consecutive quarter in which positive inflows were recorded, and net flows came in at $5.3 billion.

The loss in WisdomTree’s cryptocurrency portfolio of over 62% year-over-year is comparable with the decline in the larger cryptocurrency market during the same time period. According to CoinMarketCap, the overall market value of cryptocurrencies reached more than $2.2 trillion by the end of 2021. However, this figure dropped to about $795 billion the following year.

During the second quarter of 2022, WisdomTree’s portfolio saw a loss of $235 million, which was the company’s largest cryptocurrency loss to date. The crypto markets were in a state of disarray at the time because of the failure of Terra Luna and the knock-on consequences it had on other firms, including as the hedge fund Three Arrows Capital and the cryptocurrency lender Celsius, both of which declared bankruptcy in July.

WisdomTree has a number of funds that are focused on blockchain technology and allow investors access to the digital asset market via the use of conventional financial infrastructure. In December, the United States Securities and Exchange Commission gave WisdomTree the go-ahead to list nine new blockchain-enabled funds on its platform. However, the securities regulator has repeatedly shot down proposals to create an exchange-traded fund that would invest in spot Bitcoin transactions.

According to the cryptocurrency financial services platform Matrixport, institutional investors have been stepping up to purchase the drop despite the recent pessimism that has been surrounding crypto assets. According to the data given by the company, it seems that institutional investors residing in the United States have been responsible for the majority of Bitcoin purchases in recent months.

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Bitcoin (BTC) $ 26,592.12 0.09%
Ethereum (ETH) $ 1,595.44 0.22%
Litecoin (LTC) $ 64.69 0.01%
Bitcoin Cash (BCH) $ 207.56 0.13%