Day: February 15, 2023

Former FTX CEO Sam Bankman-Fried Used VPN

by Blockchain News

The prosecutors who are handling the criminal case against Sam Bankman-Fried, the former chief executive officer of FTX, have asked for more time to investigate the potential legal ramifications of Bankman-use Fried’s of a virtual private network, sometimes known as a VPN.

The United States Attorney for the Southern District of New York, Damian Williams, stated in a document that was filed on February 13 with the United States District Court for the Southern District of New York that the Justice Department had discovered that Bankman-Fried accessed the internet on January 29 and February 12, with the latter date being the day of Super Bowl LVII. Williams claims that the government’s position was that the use of a virtual private network (VPN) “raises several potential concerns.” He cites the example of users based in the United States accessing certain international crypto exchanges, as well as the obscuring of data from websites that Bankman-Fried may be visiting.

In the petition, it was said that using a virtual private network (VPN) “allows data transfers without discovery via a secure, encrypted connection [and] is a more secure and covert manner of accessing the dark web.” “The defense contends that the defendant was not making use of a virtual private network (VPN) for any unlawful purpose, and it has stated that it would appreciate the chance to engage in negotiations with the government about the problem,”

Mark Cohen, an attorney with the company Cohen & Gresser who is defending SBF in the criminal action, claims that the former CEO of FTX utilized the VPN to watch sporting events, including the Super Bowl. He went on to say that until the controversy was settled among attorneys, Bankman-Fried would not employ a virtual private network (VPN).

“He watched the AFC Championship game on January 29, 2023, as well as the NFC Championship game, then he watched the Super Bowl on February 12, 2023. This usage of a virtual private network does not give rise to any of the concerns expressed by the government in its letter.

According to the court filing, Bankman-legal Fried’s team was reportedly considering whether the usage of a virtual private network (VPN) by the former CEO of FTX may be added as a condition of his release. Since SBF was arrested, the prosecution has already requested that the court place restrictions on Bankman-use Fried’s of specific messaging applications and order her to desist from making contact with current or former workers of FTX and Alameda Research. The attorneys for Bankman-Fried and the U.S. prosecutors have asked further time until February 17 to explore the potential implications of SBF utilizing a virtual private network (VPN) for his bail terms.

The criminal trial against Bankman-Fried is slated to begin in October, and he is expected to face eight charges connected to wire fraud and breaches of regulations governing campaign money. The civil lawsuits that SBF is facing from the United States Securities and Exchange Commission and the Commodity Futures Trading Commission will be put on hold until the end of the criminal case, according to a ruling that was handed down on February 13 by a court.

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Ark Invest continues to buy Coinbase shares

by Blockchain News

Despite the most recent decrease in the price of cryptocurrencies, the investment management business owned and operated by Cathie Wood, Ark Invest, continues to accumulate Coinbase (COIN) shares.

Ark made its first COIN acquisitions since the middle of January on February 10 and February 13, gaining substantial exposure to the most prominent cryptocurrency exchange in the United States.

The ARKK and ARKW funds of Ark resumed their accumulation of Coinbase stock on February 13, adding 102,281 and 16,414 COIN shares, respectively, to their holdings of the company’s equity. Given that COIN finished trading at $56.4 on Monday, the total cost of Ark’s acquisitions was around $6.7 million.

Ark invested approximately $16 million in Coinbase stock during the course of only two days, which is $3.5 million more than the entire amount it had held in COIN shares for the month of January. As of the 14th of February, Ark has purchased a total of 280,000 COIN shares on a monthly basis; however, during the month of January, Ark purchased more than 330,000 COIN shares.

The total number of COIN shares that Ark has acquired so far in 2023 is 614,657, and they were purchased for a total of $28.8 million.

The most recent acquisitions came as CEO and chief investment officer of Ark Invest, Wood, continues to have a strong stance on the cryptocurrency industry.

On February 3, 2019, Wood reaffirmed her positive position on Bitcoin (BTC), stating that she believes the cryptocurrency would reach $1 million by the year 2030. Due to the robust nature of its network, the investing expert is of the opinion that Bitcoin should be used as an insurance policy for nations that are struggling with inflation.

Inflation and the possibility of a Fed policy shift are two factors that the chief executive officer of The Ark thinks will lead to a significant market shift in 2023.

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The United Kingdom Tax Reform Council Launches Campaign Against Bank of England

by Blockchain News

The United Kingdom Tax Reform Council has begun a campaign in opposition to the idea of the Bank of England to develop a digital currency that is controlled by the central bank (CBDC). The charitable organization issues a warning that such a step might pose a significant threat to the privacy of individuals and result in modifications to the taxation system that are too invasive.

On the advisory board of the recently established Tax Reform Council is monetary economist John Chown, who was also instrumental in the establishment of the Institute for Fiscal Studies. The Tax Reform Council is of the opinion that the implementation of a CBDC would result in an increase in the level of government monitoring, a larger level of intrusion by tax officials, and an increased danger of cyberattacks on the monetary system of the country.

The think tank is concerned about the same things as the Bitcoin (BTC) community in the United Kingdom, which has been quite outspoken about its opposition to CBDCs.

The co-founder of the Bitcoin Collective in the United Kingdom, Jordan Walker, said that “the deployment of CBDCs in the United Kingdom is risky on a number of fronts.” If we did this, the government and the central bank would have a greater degree of influence over our monetary system.

“This binds the monetary system even closer to the political system, which is a system that has produced big issues in the past and that continues to bring considerable problems in the present. Instead, we need to make it our goal to keep money and politics completely distinct.

“the choice of the Bank of England to pursue a British CBDC poses a number of very significant issues,” as noted by the advisory board economists, who include Patrick Minford, Julian Jessop, and Chown. The goal of the organization is to educate people about the potential for “greater government monitoring” offered by CBDCs.

CBDCs make the claim that they can improve financial inclusion, lower costs for both firms and consumers, and boost consumer and employee safety. Bitcoin, on the other hand, already provides these benefits and many more: By passing the Bitcoin legislation, El Salvador was able to bank large portions of its population, and Bitcoin also gives a path to freedom for those who are now living in oppressive regimes.

Both the Treasury and the Bank of England in the United Kingdom have been conducting recruitment for CBDC posts. In spite of opposition from the wider crypto community, the Bank of England has emphasized the “need” to develop a digital counterpart of the British pound.

According to the Tax Reform Council, every personal transaction carried out with the use of a CBDC would be logged on the private blockchain ledger maintained by the Bank of England. This would provide the tax collector with unparalleled access to the individuals’ financial histories. According to the press release, this is something that has already begun to occur in China with the renminbi CBDC.

Walker raised the alarm, stating, “I believe we are closer to the rollout than many realize, and until we have more education around this issue, we’ll see many individuals in this nation become dragged into this computerized monetary tyranny without ever realizing it.”

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Interactive Brokers Launches Crypto Trading Services for Institutional Clients

by Blockchain News

On February 14, the global brokerage business Interactive Brokers, which has its headquarters in the United States, made the announcement that it will be launching its cryptocurrency trading services in Hong Kong for institutional customers. In conjunction with OSL Digital Securities, a digital asset brokerage and trading platform for professional investors that is regulated by the Securities and Futures Commission, the cryptocurrency trading services have now been made available to the public.

Residents in Hong Kong who have investable assets totaling more than HK$8 million ($1 million) or institutions with investable assets totaling more than HK$40 million ($6 million) may now trade cryptocurrencies on the Interactive Brokers platform alongside other asset classes.

Previously, in order for investors to trade cryptocurrencies and other asset classes, they were required to utilize a wide range of trading platforms provided by a wide variety of brokers and exchanges. When utilizing the Interactive Broker platform, however, investors are able to trade cryptocurrencies and monitor their balances via a single platform that provides a consolidated picture of all their accounts.

In addition to Bitcoin (BTC) and Ether, clients of Interactive Brokers are able to trade stocks, options, futures, bonds, event contracts, mutual funds, and exchange-traded funds all from a single screen. Centralized cash management is used by these clients (ETH).

The introduction of trading services for cryptocurrencies takes place at a pivotal point in the development of the regulated digital asset market in Hong Kong. In January, Paul Chan, the finance secretary for Hong Kong, announced that the Hong Kong government is open to working with cryptocurrencies and fintech firms in 2023. Paul Chan also claimed that the Hong Kong government is open to working with fintech businesses in 2023. The official went on to say that many different corporate groups want either to expand their operations in Hong Kong or to list their companies on the local markets.

Legislators in Hong Kong reached a consensus on new legislation in December 2022 to establish a licensing system for businesses that provide services linked to virtual assets. This legislation was adopted. The goal of the newly proposed regulatory framework is to provide cryptocurrency exchanges with an equivalent degree of market acceptability to that which is already in place for conventional financial institutions.

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The United Kingdom’s Financial Conduct Authority is cracking down on unregistered cryptocurrency

by Blockchain News

The Financial Conduct Authority (FCA), which is in charge of regulating the financial sector in the United Kingdom, is planning to go after unregistered bitcoin automated teller machines (ATMs).

The Financial Conduct Authority (FCA) and the cyber unit of the West Yorkshire Police have taken action against a number of locations in and around the city of Leeds that are suspected of hosting illegally operating cryptocurrency ATMs.

When the news was announced on February 14, the Financial Conduct Authority (FCA) noted that there are no crypto ATM operators in the United Kingdom currency who are registered with the FCA. All cryptocurrency exchange providers, including operators of cryptocurrency ATMs, are required to be registered with the Financial Conduct Authority (FCA) and adhere to the money laundering legislation of the United Kingdom, according to the authority.

Mark Steward, executive director of enforcement for the FCA, was quoted as saying that unregistered cryptocurrency ATMs that operate in the United Kingdom are engaging in illegal activity. Steward also stated that the FCA will continue to disrupt unregistered cryptocurrency businesses in the country. The executive said that crypto goods are “currently unregulated and high-risk,” advising clients to be ready to lose all of their money if they invest in cryptocurrency.

According to the statements of police detective sergeant Lindsey Brants, local enforcement officials have sent multiple warning letters to operators of cryptocurrency ATMs, urging that they stop utilizing the machines immediately. He continued by saying that any violation of the restrictions will result in an inquiry under the money-laundering regulations.

According to the findings of Coin ATM Radar, there are at least 28 different sites in the United Kingdom that provide Bitcoin (BTC) ATMs. This means that the action that the FCA plans to take against cryptocurrency ATMs is likely to have a significant impact on the number of ATM operators. According to the statistics, more than half of these cryptocurrency ATM locations can be found in the city of London, with additional sites close to the cities of Birmingham, Manchester, and Nottingham.

This is not the first time that the Financial Conduct Authority has taken action against cryptocurrency ATMs in the United Kingdom. The same body published a similar declaration on the termination of Bitcoin ATMs in the country in March 2022, calling on ATM operators to “close down or face further action.” The announcement related to the discontinuation of Bitcoin ATMs in the country.

At the time of this writing, the Financial Conduct Authority (FCA) in the United Kingdom has granted registration to a total of 41 cryptocurrency businesses. These organizations include platforms like as Gemini, Zodia Custody, Bitpanda, and Revolut, amongst others.

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Bitcoin’s Average Block Size Hits All-Time Highs

by Blockchain News

Because to the introduction of the nonfungible tokens (NFTs) protocol Ordinals in January 2023, the average size of a Bitcoin block has surpassed 2.5 megabytes (MB) for the first time since the cryptocurrency’s foundation in 2009. This marks a new all-time high for the cryptocurrency.

According to statistics obtained from Blockchain.com, the size of Bitcoin blocks increased by more than 2 MB in the weeks after the debut of the Ordinals Protocol. This surge in block size can be traced back to the beginning of February 2023.

Software developer Casey Rodarmor introduced the Ordinals protocol in the month of January. This protocol makes it possible for users of the Bitcoin network to create “digital artifacts.” These may include JPEG photographs, PDF documents, as well as audio and video files.

In the documentation for Ordinals, Rodarmor explains that each of these digital objects may be inscribed to a single satoshi, which is one of the component parts of a Bitcoin. The value of one bitcoin is equal to 100,000,000 satoshis.

Individual satoshis have the ability to be imprinted with any kind of data, allowing for the creation of one-of-a-kind digital artifacts that are original to Bitcoin. These artifacts may be stored in bitcoin wallets and moved via bitcoin transactions. The permanence, immutability, security, and decentralization of inscriptions are on par with those of Bitcoin itself.

The Bitcoin community is split on the issue of whether or not it should be possible to engrave digital items into the blockchain, and the reasons both for and against the proposal provide plenty of material for reflection. The greater use of block space for the inscription of several Ordinals has emerged as one of the primary topics of discussion.

Since July 2021 and continuing until February 2023, the typical size of a Bitcoin block has ranged between 0.7 and 1.5 megabytes. The average size of a Bitcoin block topped 2 megabytes for the first time on February 5, and it is now hovering at around 2.2 megabytes at the time of this writing.

According to statistics obtained by Glassnode, the introduction of Bitcoin Ordinals has also resulted in the network reaching a new high of 44 million non-zero addresses.

The most recent issue of Glassnode’s newsletter mentions that Ordinals compete for block space demand despite the fact that they have not yet materially influenced network pricing.

The introduction of Ordinals was referred to as a “new and unique point in the history of Bitcoin” by Glassnode. This is because innovation may promote network activity even without the “classical transfer of currency volume for monetary objectives.”

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SEC plans to propose new rule changes that could impact crypto firms

by Blockchain News

According to recent reports, the United States Securities and Exchange Commission (SEC) intends to propose new regulation changes this week that might have an effect on the kind of services that cryptocurrency businesses are permitted to provide their customers.

According to a report that was published on February 14 by Bloomberg, which cited “people familiar with the matter,” the securities regulator is working on a draft proposal that would make it more difficult for cryptocurrency companies to act as “qualified custodians” on behalf of their customers’ digital assets.

This might, in turn, have an effect on the many hedge funds, private equity companies, and pension funds who collaborate with cryptocurrency startups.

Those individuals who were quoted said that on February 15 a five-person SEC panel would decide on whether or not the plan will advance to the next level.

In order for the remaining members of the SEC to cast an official vote on the proposal, they will need to achieve a majority vote of three votes out of five. If the idea is accepted, it will be revised based on the input provided wherever required.

People who are aware with the situation have said that it is not obvious what particular modifications the United States Financial Watchdog is seeking. This is despite the fact that the SEC has been deliberating on what should be necessary to be a certified custodian of cryptocurrencies since March 2019.

According to Bloomberg, if the deal is confirmed, some cryptocurrency businesses may be required to relocate the digital asset holdings of their customers to another location.

According to the study, these financial institutions may be exposed to “surprise audits” on their custody ties or other ramifications. This information was included in the report.

After a story published on January 26 by Reuters said that the SEC may soon investigate Wall Street financial advisors over how they’ve given cryptocurrency custody to their customers, the news of the vote proposal that will be held on Wednesday comes as a surprise.

The Securities and Exchange Commission (SEC) has been quite busy in recent days dealing with Paxos Trust, the issuer of the Binance USD (BUSD) stablecoin. The SEC is of the opinion that Paxos Trust issued the cryptocurrency in the form of an unregistered security.

Paxos said that they were willing to “vigorously litigate” the matter if it came to it.

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BUSD, Paxos, and the Recent Scrutiny of Paxos

by Blockchain News

Financial services using cryptocurrencies The head of research at Matrixport is of the opinion that the current investigation of Paxos and its Binance USD (BUSD) token is not an assault on stablecoins in and of itself.

Matrixport’s Markus Thielen noted in a study that was published on February 14 that the BUSD issuer, Paxos Trust Company, may not have been as severe as it should have been with its control of the token.

In addition, he said that it “does not seem to be about stablecoins” as the root of the problem.

According to Thielen’s argument, “Paxos had failed its commitment to undertake targeted, periodic risk assessment and due diligence of Binance and Paxos-issued BUSD consumers.” Paxos is the company that issues the BUSD tokens.

“as a consequence of multiple outstanding problems connected to Paxos’ management of its connection with Binance,” the New York Department of Financial Services (NYDFS) ordered Paxos to cease the issuing of BUSD on February 13th.

Paxos has also just disclosed that the United States Securities and Exchange Commission (SEC) sent a Wells notice to the stablecoin issuer on February 3, for the alleged failure of the issuer to register the offering in accordance with federal securities laws.

According to Thielen, BUSD has issued $11 billion worth of tokens on Ethereum, but there is also $4.8 billion worth of Binance-Peg BUSD Tokens on the BNB Smart Chain. Binance offers a service for pegged tokens in which BUSD is locked on Ethereum and Binance-Peg BUSD is released on BNB Chain in addition to other blockchains such Avalanche and Polygon.

“It seems that NYDFS is now apprehensive that the $4.8 billion may not be fully supported or have had difficulty with being 1:1 backed,” he added. “This looks to be a concern on the part of NYDFS.”

Paxos, on the other hand, said as recently as February 13 that “BUSD tokens created by Paxos Trust have and always will be backed 1:1 by US dollar-denominated reserves, completely segregated and stored in separate distant accounts.” Paxos made this claim.

Thielen points out that the event on January 24 in which Binance mingled client money with collateral might have also been a catalyst for some of the regulatory steps that have been taken.

Some people are still under the impression that other stablecoins might be in danger as a result of the recent steps taken against BUSD.

Paxos has asserted as of late that “there are categorically no further complaints against Paxos,” in addition to the ongoing controversy surrounding BUSD.

“USDC is a regulated dollar digital currency that was issued as stored value in accordance with United States money transfer legislation,” claims Circle.

“Facts and circumstances in any type of regulatory action like this are all different, as are the structural and regulatory considerations with each of the cryptocurrencies that are in circulation around the world,” Disparte added. “Facts and circumstances in any type of regulatory action like this are all different.”

However, Thielen has emphasized to those in the sector that they need not be excessively anxious about what the future holds for BUSD.

“Binance has shot itself a little bit in the foot here, but they are working on it and it should be rectified. The question is, “Should we truly be worried?” Thielen stated.

“I don’t believe that’s the case. Is the peg going to break? NO. We are no longer in a bear market, which is characterized by investors being concerned about potential losses; while, in bull markets, investors are more focused on potential gains.

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Reversing Censorship on Ethereum

by Blockchain News

Since October 11, the proportion of Ethereum blocks that are compliant with orders made by the United States Office of Foreign Asset Control (OFAC) has decreased to its current level of 47%, which is the lowest level since that date.

The most recent achievement in the fight against censorship comes about two and a half months and one day after the proportion of OFAC-compliant blocks reached its all-time high of 79% on November 21.

OFAC-compliant blocks are ones that do not include any transactions that involve parties who have been blacklisted by the Office of Foreign Assets Control within the United States Treasury Department.

Those individuals who are opposed to censorship inside the Ethereum ecosystem may see a decrease in the number of compliant blocks as a victory.

According to a statement released by the blockchain consulting company Labrys, the originator of MEV Watch, the decline may be linked to more validators choosing to utilize MEV-boost relays that do not filter transactions in compliance with OFAC standards.

The majority of the shift in market share has been taken up by the BloXroute Max Profit relay, the Ultrasound Money relay, and the Agnostic Boost relay in particular.

MEV-boost relays play the role of trustworthy middlemen between block producers and block builders, which paves the way for Ethereum validators to delegate the construction of their blocks to third-party block builders.

The Chief Executive Officer of Labrys, Lachlan Feeney, issued a statement on February 14 in which he expressed his satisfaction with the manner in which the Ethereum community has reacted to the censorship problem ever since it first appeared during the Merge event.

He pointed out that the recent decline of censorship-compliant blocks was especially noteworthy since it was accomplished without the involvement of a user-activated soft fork (UASF). He made the observation that “many individuals” of the Ethereum community had requested the soft fork prior to the Merge in order to resist censorship.

“I am incredibly proud of the Ethereum community for the progress we have made with this issue,” said Feeney, adding: “When we released the MevWatch tool drawing attention to a flaw within Ethereum, the community did not stick its head in the sand but instead rose to the occasion and made significant progress addressing the issue.” “When we released the MevWatch tool drawing attention to a flaw within Ethereum, the community did not stick its head in the sand but instead rose to the occasion and made significant progress

However, as Feeney emphasized, “there is still a great deal more work to be done.”

On August 8, OFAC sanctioned wallet addresses that transact using the Ethereum-based privacy mixing technology Tornado Cash. These wallet addresses are associated with Ether (ETH) and USD Coin (USDC).

On September 16, during the first 24 hours of Ethereum’s new proof-of-stake consensus mechanism, just 9% of blocks were filtered by OFAC.

Nevertheless, this number shot up dramatically over the subsequent two months, reaching its highest point of 79% on November 21.

After then, the proportion of OFAC-compliant blocks stayed anywhere between 68 and 75% until the 29th of January, when it dropped to 66%. Since then, in spite of a few brief increases, it has been consistently going down.

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Binance sees surge in withdrawals amid spooked investors

by Blockchain News

As a direct result of the recent announcement that Paxos and its stablecoin Binance USD might be subject to regulatory action, the cryptocurrency exchange Binance has experienced a significant increase in the number of withdrawals that have been made over the course of the last twenty-four hours (BUSD).

Peckshield claims that there was a total of 342 million BUSD worth of tokens that were destroyed over the course of the previous twenty-four hours. These redemptions took occurred close to the same time period when substantial activity was taking place with the BUSD token.

On the 12th of February, it was made public that the statement that the United States Securities and Exchange Commission had given notice of possible enforcement action against Paxos had been made. This statement was made public because it was made by the United States Securities and Exchange Commission. Paxos refutes the corporation’s allegation, which was that the stablecoin is an unregistered security. The corporation’s claim can be found in the previous sentence. Paxos challenges the validity of this assertion in his response.

Binance had multichain token net outflows of $788.5 million during the course of twenty-four hours, as shown by the numbers that were produced by the blockchain intelligence platform Nansen. During the time period in question, this was a result of withdrawals of $2.7 billion exceeding inflows of around $1.97 billion during that time period.

According to the numbers that were provided by Dune analytics, this is the greatest 24-hour net outflow that has occurred since December 17, when Binance’s proof-of-reserve audits were pulled down from the website of auditor Mazars. This happened when Binance’s proof-of-reserve audits were pulled down from the website of auditor Mazars.

The market “handled with ease” a recent sell-off that lasted for twelve hours and featured withdrawals worth “more than one billion,” according to the spokeswoman for the exchange. According to the information presented in the article, the market was successful in accomplishing this goal in spite of the fact that it encompassed “more than one billion.”

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Bitcoin (BTC) $ 27,556.38 1.58%
Ethereum (ETH) $ 1,665.85 3.57%
Litecoin (LTC) $ 66.24 2.56%
Bitcoin Cash (BCH) $ 250.23 2.51%