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Bitcoin of America indicted for operating unlicensed kiosks

by Blockchain NewsMarch 6, 2023

Bitcoin of America, a Bitcoin technology firm, and three of its executives are facing charges of money laundering, conspiracy, and other crimes connected to the operation of more than 50 unlicensed crypto kiosks in Ohio that knowingly benefited from victims of cryptocurrency scams. The firm, which operated as S&P Solutions, allegedly pocketed a 20% transfer fee each time a scam occurred and continued to do so even after learning they were fraudulent.

According to the prosecuting attorney Andrew Rogalski, romance scammers, law enforcement impersonators, and “robocallers” exploited the lack of Anti-Money Laundering protections in the firm’s systems to transfer funds out of users’ crypto wallets. These scammers directed the victims, who are often elderly or otherwise vulnerable, to specifically go to Bitcoin of America ATMs, take money that they’ve withdrawn from their savings accounts or 401Ks, and put the cash into the machine in exchange for BTC in a wallet they think is theirs but have no control over.

During a press conference, Rogalski commented that “these ATMs are ready-made for scammers,” adding that they take advantage of victims who are often elderly or otherwise vulnerable. In one instance, an elderly gentleman lost $11,250 in three transactions to one of the dodgy kiosks in under an hour to this scam.

The firm and its executives allegedly operated the kiosks without a money transfer license and were able to do so by making written misrepresentations regarding the nature of their business to government agencies. Authorities seized 52 Bitcoin ATMs last week, but the firm has more in Ohio and other states. Bitcoin of America made $3.5 million in profit from cash deposits at these unlawful kiosks in 2021, Rogalski said.

Officials believe the firm has been operating and evading regulatory safeguards and financial compliance requirements since 2018. The investigation into the firm and its executives was reportedly spearheaded by the United States Secret Service’s Cyber Fraud and Money Laundering Task Force.

This indictment comes after the FBI’s Miami Field Office warned in October that crypto ATMs were becoming a popular vehicle for scammers to defraud victims in an increasing trend of “pig butchering” scams. It highlights the importance of proper regulation and compliance in the cryptocurrency industry to protect vulnerable individuals from fraudulent activities.

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DeFi Funding Skyrockets 190 in 2022

by Blockchain NewsMarch 6, 2023

The world of digital finance has seen a major shift in investments in recent years, with decentralized finance (DeFi) emerging as a clear winner in 2022. According to a report by CoinGecko, investment in DeFi projects skyrocketed by a staggering 190% in 2022, with digital asset investment firms pouring $2.7 billion into this sector alone. In contrast, investments in centralized finance (CeFi) projects plummeted by 73% over the same time period, with just $4.3 billion invested.

This trend is particularly striking given that overall crypto funding figures fell from $31.92 billion in 2021 to $18.25 billion in 2022, due to the market shifting from bull to bear. Despite this downturn, DeFi investment saw a near three-fold increase, potentially pointing to it as the new high-growth area for the crypto industry. The report also suggests that the decrease in funding towards CeFi could be an indicator that the sector has reached a degree of saturation.

According to CoinGecko’s report, the largest DeFi funding in 2022 came from Luna Foundation Guard’s (LFG) $1 billion sale of LUNA tokens in February. This was followed by Ethereum-native decentralized exchange (DEX) Uniswap, which raised $164 million, and Ethereum staking protocol Lido Finance, which raised $94 million.

Meanwhile, FTX and FTX US were the largest recipients of CeFi funding, having raised $800 million in January 2022, accounting for 18.6% of CeFi funding in that year alone. However, both crypto exchanges later collapsed and filed for bankruptcy just 10 months later.

The report also noted that blockchain infrastructure and blockchain technology companies raised $2.8 billion and $2.7 billion, respectively, making them other areas of significant investment. This trend has remained strong over the last five years, according to CoinGecko.

Henrik Andersson, the chief investment officer of Australia-based asset fund manager Apollo Crypto, says his firm is currently focusing on four specific sectors within crypto. The first is “NFTfi,” a combination of DeFi and NFTs that includes NFT projects using DeFi to implement various trading strategies to earn passive income, or long or short-trade NFT projects, among other things.

Overall, the rise of DeFi investment is a clear indication of the rapidly changing landscape of digital finance. As the market continues to evolve, it will be interesting to see how DeFi and CeFi continue to compete and evolve, and what other trends and innovations emerge in this exciting and ever-changing industry.

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Tagged : Cefi / Coingecko / CRYPTO FUNDING / DeFi / Investment / News

Decentralized finance (DeFi) platforms have suffered significant losses due to a series of exploits in February, with at least $21 million in crypto being drained from seven protocols, according to DeFi data analytics platform DefiLlama. Among the notable incidents were the flash loan reentrancy attack on Platypus Finance, which resulted in $8.5 million in losses, and the price oracle attack on BonqDAO, which saw an exploiter manipulating the price of AllianceBlock (ALBT) token, causing a loss of an estimated $120 million, although the attackers reportedly only managed to cash out $1 million due to a lack of liquidity on BonqDAO.

Other exploits included a reentrancy attack on Orion Protocol, resulting in a loss of roughly $3 million, and another on dForce network, leading to around $3.65 million in losses. However, in a surprising turn of events, all funds were returned to dForce when the attacker revealed themselves to be a white hat hacker. The attack on Platypus Finance was also notable because the team announced their intention to return 78% of the main pool funds by reminting frozen stablecoins.

Smart contract exploits were also prevalent, with the algorithmic stablecoin project Hope Finance losing roughly $2 million due to a smart contract exploit, and multichain exchange aggregator Dexible experiencing a loss of $2 million worth of cryptocurrency through an exploit that targeted the app’s selfSwap function.

Additionally, BNB Chain-based DeFi protocol LaunchZone suffered a loss of $700,000 worth of funds due to an attacker leveraging an unverified contract.

These incidents come after blockchain data firm Chainalysis revealed in its 2023 Crypto Crime Report that hackers had stolen $3.1 billion from DeFi protocols in 2022, accounting for more than 82% of the total amount stolen in the year.

Despite the losses, the DeFi space continues to grow, with the total value locked (TVL) in DeFi protocols reaching over $104 billion as of February 28, according to DefiLlama. The platform also noted that the number of users on DeFi platforms has steadily increased since 2020, with over 5.8 million unique addresses interacting with DeFi protocols in February 2023.

These incidents highlight the need for continued vigilance and improvement in DeFi security measures to prevent such exploits from occurring. While the DeFi space has seen significant growth and innovation in recent years, it is clear that security remains a crucial concern that must be addressed to ensure the continued success and sustainability of the ecosystem.

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Tagged : Attacks / Crypto / DeFi / Exploits / Losses / News

NFT Firm Yuga Labs Faces Criticism Over Bitcoin Auction Plan

by Blockchain NewsMarch 6, 2023

Yuga Labs, the non-fungible token (NFT) firm that gained prominence due to multiple Ethereum-based NFT collections, has drawn criticism from the cryptocurrency community over its plan to auction its new Bitcoin NFT collection. The “TwelveFold” collection, which comprises 300 NFT-like images inscribed on satoshis using the Bitcoin-native Ordinals protocol, opened bids on March 5.

However, Yuga’s plan for the auction has raised concerns among some members of the crypto community. According to the company’s press release, those participating in the bidding process must send their entire bid amount in Bitcoin (BTC) to a unique BTC address controlled by Yuga. Winners would then pay up the BTC they bid, while Yuga said it would return BTC to those who were unsuccessful in placing a top bid.

Critics have pointed out that Yuga’s plan to conduct refunds for unsuccessful bids manually is outdated and inefficient. The user behind an Ordinals-focused Twitter account, “ordinally,” called the auction model a “scammer’s dream.” Although he doubted Yuga would keep the BTC from failed bids, he argued that the way the company carries out the auction sets a “REALLY bad precedence.”

The criticism escalated when Bitcoin Ordinals creator, Casey Rodarmor, weighed in on the discussion, telling Yuga to “get fucked” and calling the conduct of the auction “degenerate bullshit.” He added that if Yuga were to conduct a similar auction in the future, he would encourage others to boycott the project.

Other users also highlighted the shortcomings of the auction system. Some suggested that it’s possible for some to overpay for a TwelveFold due to a potential significant price discrepancy between the highest and lowest bids in the top 288.

Despite the criticisms, some users appreciated the fact that Yuga is attempting to bridge the gap between Ethereum and Bitcoin. The Ordinal Pizza OG collection expressed excitement at Yuga’s BTC collection and called it a “massive net positive for Ordinals.”

Despite the backlash, bidders are still keen to secure a top spot in Yuga’s first BTC collection. At the time of writing, the top bid was 1.11 BTC (around $25,000), with the lowest bid registered showing as 0.011 BTC, or around $250, according to the TwelveFold website.

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Tagged : Auction / Bitcoin / CRYPTOCURRENCY COMMUNITY / News / NFT / Yuga Labs

Pakistan Banks Develop Blockchain-based KYC Platform

by Blockchain NewsMarch 6, 2023

The Pakistan Banks’ Association (PBA), a group of 31 traditional banks operating in Pakistan, has signed off on the development of a blockchain-based Know Your Customer (KYC) platform. The move aims to strengthen the country’s Anti-Money Laundering (AML) capabilities while countering terror financing – an initiative led by the State Bank of Pakistan (SBP).

As reported by the Daily Times, the PBA signed a contract on March 2 to develop Pakistan’s first blockchain-based national eKYC banking platform. The Avanza Group has been tasked to develop the blockchain-based eKYC platform named “Consonance,” which will be used by member banks to standardize and exchange customer data via a decentralized and self-regulated network. This will enable banks to assess existing and new customers, and to share customer details based on consent.

The member banks of PBA include international establishments such as the Industrial and Commercial Bank of China, Citibank, and Deutsche Bank. The blockchain platform will improve operational efficiencies, primarily aimed at improving customer experience during onboarding.

Joining other countries in the race to develop a central bank digital currency (CBDC), Pakistan has recently signed new laws to ensure the launch of a CBDC by 2025. The SBP will issue licenses to electronic money institutions for CBDC issuance. “These landmark regulations are a testament to the SBP’s commitment toward openness, adoption of technology, and digitization of our financial system,” said Deputy Governor of SBP Jameel Ahmad.

The use of blockchain technology for KYC purposes offers numerous benefits to the banking industry, including reduced costs and enhanced security. The development of Pakistan’s first blockchain-based national eKYC banking platform is a significant step towards the country’s digitalization of its financial system. By standardizing and sharing customer data, Pakistan’s banking industry will be better equipped to fight money laundering and terror financing while improving customer experience during onboarding.

Overall, the development of the blockchain-based KYC platform demonstrates the PBA’s commitment to providing its members with cutting-edge technology to improve operations and customer experience. The move also reflects Pakistan’s willingness to embrace blockchain technology as a means of strengthening its financial system and combatting financial crimes.

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Tagged : Anti-Money Laundering / Blockchain / KYC PLATFORM / News / OPERATIONAL EFFICIENCIES / PAKISTAN BANKS' ASSOCIATION

Iran Completes Pre-Pilot Phase for Digital Rial

by Blockchain NewsMarch 6, 2023

Iran’s Central Bank is making progress with its plans to launch a digital version of the national currency, the rial. The Central Bank of Iran (CBI) recently completed the pre-pilot phase for the country’s central bank digital currency (CBDC), according to an official statement by CBI’s research arm, the Monetary and Banking Research Institute (MBRI). The news was announced by Mohammad Reza Mani Yekta, head of the CBI office for supervising payment systems, at the ninth annual conference on electronic banking and payment systems on February 20.

Mani Yekta stated that the pre-pilot phase ended successfully, with valuable achievements. The CBDC pilot will soon be launched in other ecosystems and used by more users. He also noted that the rules governing the digital rial will align with those established for rial banknotes. The CBDC will be distributed among individuals and banks, and its infrastructure will recreate some blockchain features.

Ten banks in Iran have reportedly applied to join the digital rial project, including Bank Melli, Bank Mellat, and Bank Tejarat, which were involved in the experimental phase. All banks and credit institutions in Iran are expected to start offering electronic wallets for the digital currency. The CBDC pilot aims to improve financial inclusion and compete with global stablecoins.

The CBI started planning to launch a CBDC pilot in January 2022, following years of initial research since 2017. The regulator reportedly started rolling out the CBDC pilot in September 2022. Iran’s digital rial project, also known as the “crypto rial,” is pegged to the national currency at a 1:1 ratio. The digital currency runs on a platform known as Borna, which was developed using Hyperledger Fabric, the open-source enterprise blockchain platform established by IBM.

The news comes amid reports that Iranian authorities are preparing to meet with the Bank of Russia’s governor, Elvira Nabiullina, who is expected to visit Iran in the near future. Russia and Iran have reportedly been working together to create a gold-backed stablecoin that would serve as a payment method in foreign trade. While the two projects are separate, they both indicate a trend toward digital currencies being used to facilitate cross-border transactions.

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Tagged : Blockchain / CBDC / Central Bank Digital Currency / DIGITAL RIAL / Iran / News

Singapore authorities investigate Terraform Labs

by Blockchain NewsMarch 6, 2023

Since Do Kwon and Terraform Labs were accused of engaging in fraudulent activity by the United States Securities and Exchange Commission (SEC) a month ago, the authorities in Singapore have begun an investigation into the firm that Kwon helped build, Terraform Labs. According to the allegations made in the action brought by the SEC, Kwon stole about 10,000 bitcoin from the Terra platform and the Luna Foundation Guard, which he then turned into fiat currency. The Securities and Exchange Commission (SEC) asserts that Kwon has cleaned more than one hundred million dollars’ worth of bitcoins since the original collapse of the site.

An email issued by the Singaporean police on March 6 said that “investigations have began in respect to Terraform Laboratories,” as stated in a report by Bloomberg. In addition, the email said that the investigations are “ongoing,” and that Kwon is not in the city-state at the present time.

Several participants in the cryptocurrency industry have voiced their disapproval of the case on the grounds that it might pave the way for the SEC to target stablecoins in future litigation. The comparisons of assets made by the SEC have even been described as “wild” by lawyers working in the business.

The beginning of this whole affair can be traced back to May 2022, when the stablecoin known as Terra USD (UST) was unpegged from the US dollar. The following demise of the Terra ecosystem was responsible for a huge implosion in the market for digital assets, which resulted in losses of approximately $40 billion.

Authorities in South Korea have also conducted an investigation into Terraform Laboratories, and a warrant has been issued for Kwon’s arrest in that country. In an attempt to identify Kwon, South Korean law enforcement officers headed to Serbia. On February 15, South Korean prosecutors filed a warrant to arrest a local e-commerce executive who they accused of taking Terra (LUNA) in exchange for promoting Terra Labs. The executive was suspected of receiving the payment for marketing Terra Labs.

As at the time this article was written, Kwon has not made any comments. During the whole of the incident, the co-founder of Terraform Labs has been quite active on social media. On the other hand, it is the beginning of February and he has not tweeted since then.

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Tagged : Do Kwon / Fraud / News / PROBE / Singapore / TERRAFORM LABS

Bybit Launches Debit Card for Crypto Payments

by Blockchain NewsMarch 6, 2023

Bybit, the Singapore-based cryptocurrency exchange, has announced the launch of its new debit card that will allow users to make payments and withdraw cash using their cryptocurrency holdings. The Bybit card will operate on the Mastercard network and will initially allow fiat-based transactions by debiting cryptocurrency balances when used to pay for goods and services. The new service begins with the launch of a free virtual card for online purchases, while physical debit cards are set to be available in April 2023. The card will work with Bitcoin, Ether, Tether, USD Coin, and XRP balances on user accounts. Payments made with the Bybit card will automatically convert the balances of these initial cryptocurrencies into euros or pounds, depending on the user’s country of residence.

ATM withdrawals and global payments will be limited to the aggregated cryptocurrency holdings of a user’s Bybit account. The cards will be issued by London-based payments solutions provider Moorwand. Bybit’s move into the debit card space comes just days after the exchange announced the suspension of U.S. dollar bank transfers, citing “service outages” by one of its processing partners. Bybit users can continue to make USD deposits using Advcash Wallet and credit cards, while users are urged to carry out any pending U.S. dollar wire withdrawals by March 10.

The virtual and physical debit card offerings are a major step forward for Bybit, as they allow users to seamlessly use their cryptocurrency holdings in the real world. This move follows a report at the end of February 2023 that suggests Mastercard and Visa would hold off on announcing or embarking on further direct partnerships with the cryptocurrency and blockchain industry. However, Mastercard has been exploring payment options in USDC through new partnerships, while Visa has hinted at plans to allow customers to convert cryptocurrencies into fiat on its platform in 2023.

Overall, Bybit’s new debit card offering is a significant development for the cryptocurrency industry, as it marks a major step towards the integration of digital assets into everyday life. The ability to use cryptocurrency for daily transactions has long been seen as a key milestone in the industry’s development, and the Bybit card is a major step towards achieving that goal. With the popularity of cryptocurrency continuing to grow, it is likely that we will see more companies launching similar services in the coming years.

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Tagged : Bybit / Cryptocurrency / Debit Card / News / Payments / Withdrawals