White House Report Casts Doubt on Cryptocurrencies

The White House’s recently released Economic Report of the President includes a chapter questioning the benefits of cryptocurrencies. This is the first time the White House has included a section on digital assets since it began issuing the annual economic policy report in 1950. The report includes 35 pages dedicated to debunking the “Perceived Appeal of Crypto Assets,” along with a short section on the FedNow payment system and central bank digital currencies.

The report argues that crypto assets fail to deliver on their touted benefits, such as improving payment systems, financial inclusion, and creating mechanisms to transfer value and intellectual property. It also argues that cryptocurrencies fail to perform the functions of sovereign money, as their prices fluctuate too wildly to be a stable store of value, nor can they function as a unit of account or medium of exchange. Stablecoins are also criticized, as they are subject to run risks and are therefore too risky to satisfy their role as a “fast payment” instrument.

Crypto executives have expressed frustration over the report, with the co-founder of digital asset investment firm Paradigm, Fred Ehrsam, remarking that 15% of the Economic Report was dedicated to “crypto FUD.” Kristin Smith, CEO of the Blockchain Association, called the report “disappointing,” stating that it shows some in the government appear “increasingly allergic” to the burgeoning crypto industry.

The report also takes aim at decentralization, arguing that blockchain-based applications are in practice neither decentralized nor trustless. Users access crypto assets by going to a limited set of crypto asset platforms, while a small group of miners performs the majority of mining in most crypto assets, it argues.

The latest annual economic policy report was published shortly after the collapses of Silvergate, Silicon Valley, and Signature banks, all of which had served aspects of the crypto industry. Dan Reecer, chief growth officer at decentralized finance platform Acala Network, claims that the report comes “just days” after Operation Chokepoint 2.0 was executed on crypto-friendly banks. He also noted an “obvious early warning” of an upcoming United States central bank digital currency, referencing a section of the report that seemingly touts the benefits of a U.S. central bank-controlled currency.

Despite the criticism, it is worth noting that the report is not a policy statement, and it remains to be seen how the Biden administration will approach the regulation of cryptocurrencies and digital assets in the coming months.


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Former OneCoin Executive Charged with Fraud

The United States Department of Justice has charged Irina Dilkinska, a former executive of the fraudulent cryptocurrency scheme OneCoin, with wire fraud and conspiracy to commit money laundering. Dilkinska, who was extradited from Bulgaria, now faces up to 40 years in prison for her alleged role in aiding the laundering of over $400 million of OneCoin’s proceeds.

OneCoin was a cryptocurrency scheme that has been accused of being a Ponzi scheme and a fraudulent operation. The scheme was founded in 2014 by Ruja Ignatova, who was later indicted by the US government for her role in the scheme. Ignatova is currently a fugitive, and her brother, Konstantin Ignatov, has pleaded guilty to his role in the scheme.

Dilkinska was OneCoin’s former head of legal and compliance and is accused of aiding in the laundering of OneCoin’s proceeds. According to the Department of Justice, Dilkinska allegedly destroyed incriminating evidence and sent incriminating messages upon hearing of a co-conspirator’s arrest. Each count of wire fraud and conspiracy to commit money laundering carries a maximum potential sentence of 20 years in prison.

The OneCoin scheme has been accused of defrauding investors of billions of dollars, and the US government has been actively pursuing legal action against those involved in the scheme. The scheme operated by convincing investors to buy OneCoin tokens, which were then traded on the OneCoin exchange. However, the exchange was found to be fraudulent, and the tokens were worthless.

The OneCoin scheme has been the subject of numerous investigations and legal actions around the world. In addition to the charges against Dilkinska and Ignatova, several other individuals have been indicted in connection with the scheme. The US government has also seized millions of dollars in assets and bank accounts connected to the scheme.

The case against Dilkinska is another example of the US government’s commitment to pursuing those involved in fraudulent cryptocurrency schemes. The government has been increasing its efforts to regulate the cryptocurrency industry and crack down on fraudulent schemes in recent years. The Department of Justice has created a cryptocurrency enforcement framework to help prosecutors identify and investigate cryptocurrency-related crimes.

In conclusion, the charges against Dilkinska highlight the ongoing legal action against those involved in the OneCoin scheme. Dilkinska faces a potential prison sentence of up to 40 years for her role in aiding the laundering of OneCoin’s proceeds. The case is another example of the US government’s efforts to crack down on fraudulent cryptocurrency schemes and regulate the cryptocurrency industry.


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Ted Cruz Introduces Bill to Block Fed CBDC

In a bid to prevent the Federal Reserve from launching a “direct-to-consumer” CBDC, Republican Senator Ted Cruz has introduced a bill aimed at blocking the move. Cruz is concerned that a retail CBDC could be used by the federal government for financial surveillance, and is seeking to protect American citizens’ financial privacy while maintaining the dollar’s dominance and promoting innovation. This is not the first time that Cruz has attempted to block the Fed’s CBDC initiative. He previously introduced a similar bill, along with fellow Republican Senators Braun and Grassley, in March 2022, but it failed to progress beyond the introduction phase.

Meanwhile, the Federal Reserve Bank of New York and several large financial firms have made significant progress on a U.S. dollar CBDC since President Joe Biden signed an executive order entitled “Ensuring Responsible Development of Digital Assets” in March 2022. In November, they participated in a 12-week digital dollar pilot program with Mastercard and SWIFT.

Cruz, Braun, and Grassley are not alone in their opposition to CBDCs. Florida Governor Ron DeSantis has also called on state lawmakers to introduce legislation banning the digital dollar in Florida.

However, proponents of CBDCs argue that they have the potential to revolutionize the way we use money, making transactions faster, cheaper, and more secure. CBDCs could also help to reduce the risks associated with cryptocurrencies, such as volatility and lack of regulation. They could also improve financial inclusion by providing access to banking services to people who are currently underserved by traditional banks.

It remains to be seen whether Cruz’s bill will gain any traction, but it is clear that the debate over CBDCs is far from over. As more countries explore the possibility of launching their own digital currencies, it is likely that we will see increasing calls for regulation and oversight to ensure that CBDCs are developed responsibly and with the best interests of citizens in mind.


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BitBoy Crypto accused of threatening class-action lawsuit lawyers

In a court filing on March 20, lawyers for the class-action lawsuit accused Ben Armstrong, also known as BitBoy Crypto, of making multiple threats against them after they filed a lawsuit against him and other FTX influencers for promoting FTX crypto fraud without disclosing compensation. The lawyers claimed that Armstrong harassed them with endless phone calls, tweets, and emails, as well as insulting and threatening posts on social media. The court filing alleged that Armstrong made up to 21 calls within a 45-minute period, leaving voicemails full of vulgarities that specifically targeted the lawyers. The voicemails also included warnings of First Amendment protesters around their houses 24/7 day and night and that the lawyers’ home addresses were being circulated on Reddit.

The court filing also alleged that Armstrong made threats to Adam Moskowitz, one of the lawyers in the class-action suit, including a message that prompted a report to authorities, warning the lawyer that “these people are dangerous” and can result in “you and your family shot.” Armstrong also allegedly called Moskowitz a “bitch” and an “unbelievably dumb mother fucker” in an email before stating that he “never even promoted FTX” and warning Moskowitz to expect a counter-suit.

The court filing claimed that Armstrong encouraged others to join the attacks and posted a YouTube video directed at the lawyers and those who bought the suit, allegedly warning them that he was “coming at them with full force.” The lawyers noted that this was not the first time Armstrong had caused threatening controversy, as he had filed and later dropped a defamation suit against fellow YouTube content creator Erling Mengshoel Jr, who goes by “Atozy.”

Armstrong filed the defamation suit against Mengshoel in response to a November 2021 video titled “This YouTuber scams his fans…Bitboy Crypto,” which alleged that Armstrong was dishonestly promoting assets to his audience for his own benefit. However, Armstrong dropped the lawsuit a few weeks later and claimed that Mengshoel had won after raising more than $200,000 for his defense in less than 24 hours.

BitBoy Crypto has not yet responded to the recent allegations made against Armstrong. The class-action lawsuit seeks $1 billion in damages from Armstrong and other FTX influencers.


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eNaira Adoption Grows Amid Nigeria’s Cash Shortages

Nigeria’s central bank launched its own digital currency, the eNaira, in 2021, and nearly 18 months later, the CBDC is seeing increased adoption in the country. The acute cash shortage in Nigeria is due to the central bank’s decision to replace older banknotes with bigger denominations, which has caused severe shortages in national fiat reserves. In a country where cash accounts for about 90% of transactions, the lack of physical cash has forced Nigerians to turn to the eNaira.

According to a recent Bloomberg report, the value of eNaira transactions has increased by 63% to 22 billion nairas ($47.7 million), indicating a growing adoption of the CBDC. Furthermore, the total number of eNaira wallets has grown more than 12 times compared to October 2022, and is currently at 13 million, as reported by Godwin Emefiele, the governor of the Central Bank of Nigeria.

The demonetization, which reduced the circulating cash supply from 3.2 trillion nairas to 1 trillion nairas, prompted Nigeria to mint over 10 billion eNairas to compensate for the decline. The use of eNaira payouts in government initiatives and social schemes has also contributed to the increase in CBDC adoption.

For developing countries like Nigeria, CBDCs present a way to overcome challenges presented by the fiat economy, including reducing operating costs and strengthening Anti-Money Laundering initiatives. The eNaira, in particular, has emerged as the electronic payment channel of choice for financial inclusion and executing social interventions, according to Emefiele.

In addition to the increased adoption of the eNaira, Nigerians have also been presented with another option for procuring cryptocurrencies. MetaMask’s parent firm ConsenSys recently announced a new MoonPay integration, which allows Nigerians to purchase crypto via bank transfers. This new feature is available within the MetaMask mobile and Portfolio DApp, significantly simplifying buying crypto without using credit or debit cards in Nigeria.

It is clear that the adoption of CBDCs like the eNaira in Nigeria is becoming increasingly important in the face of cash shortages and other economic challenges. The use of digital currencies presents a viable solution to revamp the fiat capabilities of developing nations and to provide greater financial inclusion to citizens. As such, it will be interesting to see how the adoption of eNaira and other CBDCs continues to evolve in Nigeria and beyond.


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Visa Reports Record-Breaking Cryptocurrency Thefts in 2022

Visa, one of the world’s leading payment providers, has released its biannual threat report, revealing that 2022 saw a record-breaking number of cryptocurrency thefts, with over $3 billion stolen in on-chain exploits. The report covers all types of digital payment system violations worldwide, including plastic card fraud schemes and malware, but has a separate section dedicated to cryptocurrency and digital platforms.

The report identifies token bridges as a common target for threat actors. These bridges enable the exchange of cryptocurrencies between different blockchain networks, but fraudsters often exploit smart contracts within the bridge service to either create new transactions or allow for unauthorized transactions to be approved. Between January and early October 2022, a total of $2 billion was stolen via token bridges.

Visa’s report also highlights a cryptocurrency-focused phishing campaign that targeted crypto exchanges. The attackers impersonated a crypto exchange in emails to collect the victim’s account login data. When the actual exchange prompted the threat actor for two-factor authentication (2FA), the attacker used the spoofed site to obtain the victim’s 2FA information, allowing them to complete the login process using the genuine 2FA from the spoofed site.

In February, it was reported that Visa and Mastercard would delay the launch of new partnerships with crypto firms due to high-profile bankruptcies in the industry. However, Cuy Sheffield, Visa’s head of product, refuted the claims, stating that Visa would continue to partner with crypto companies to enhance fiat on and off-ramps and create new products to facilitate stablecoin payments.

Despite the delay, the cryptocurrency market has continued to grow, with Bitcoin’s market capitalization surpassing Visa’s for the third time in history on February 20. By March 14, the gap between the two had grown to over $20 billion in favor of Bitcoin.

Cryptocurrency thefts have been a recurring problem in the industry, with exchanges and users often targeted by hackers. In 2019, the infamous hack of Japan-based exchange Coincheck resulted in the loss of over $500 million worth of cryptocurrency. Similarly, the 2021 Colonial Pipeline ransomware attack involved a demand for payment in Bitcoin.

Visa’s report highlights the importance of securing token bridges and exchanges, as well as the need for continued efforts to enhance security measures in the cryptocurrency industry.


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Bitzlato Partially Restores User Access

In recent news, Bitzlato, a Russia-linked cryptocurrency exchange, has partially restored access to user funds, despite being officially seized by European authorities. The exchange has enabled its users to withdraw up to 50% of their assets that were stuck on the platform due to enforcement from the United States and Europol. Bitzlato made the announcement on its Telegram channel on March 20, stating that users can now restore half of their assets using the Telegram bot called bz_phoenix_bot. The bot allows users to move assets from the web Bitzlato account to an external wallet or exchange.

All withdrawals from Bitzlato are processed in Bitcoin (BTC) as the platform converted all altcoin holdings by users into BTC when the service was halted on January 18. The firm converted user balances to Bitcoin due to technical difficulties associated with servicing multiple altcoins after Bitzlato was seized. Several alleged Bitzlato users have confirmed being able to move their Bitcoin to exchanges like ByBit and Binance. Some users also reportedly used software wallets like Trust Wallet and ViaBtc, and hardware wallets like Ledger, to withdraw their Bitcoin.

Bitzlato’s 50% withdrawal option follows its previously announced roadmap on restoring users’ access to the platform and resuming operations. According to the plan, Bitzlato will continue its work to restore the platform and aims to provide a service for peer-to-peer (P2P) cryptocurrency trading by early April 2023.

However, Bitzlato users should not expect to recover the remaining 50% of their assets once the P2P exchange is launched. A Bitzlato spokesperson clarified that there will be no second half once the P2P is opened since these are two unrelated questions and processes.

Bitzlato is a peer-to-peer cryptocurrency exchange that was launched in 2015 by a group of cryptocurrency enthusiasts. The exchange offers trading in a wide variety of cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Dash. It has a presence in several countries, including Russia, Ukraine, Venezuela, and Nigeria. Bitzlato was officially seized by European authorities on January 18, 2022, following a joint operation by the United States and Europol. The exchange was accused of being involved in money laundering and providing services to individuals involved in illegal activities.


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ARK Invest Sells Portion of Coinbase Shares

Cathie Wood’s investment management firm ARK Invest has sold a portion of its Coinbase shares as the stock sees significant growth in price. After three months of active buying, ARK made its first sale of Coinbase stock in 2023, accounting for 23% of all shares acquired in March and 9% of all shares purchased this year. The remaining 1.6 million Coinbase shares held by ARK are currently valued at over $132 million.

Coinbase’s stock, which trades as COIN, has been on the rise, hitting multi-month highs as of March 21. The shares reached a price level not seen since September 2022, according to data from TradingView. Despite a 54% drop in the past year, the stock has recovered more than 130% since the start of 2023.

The upward trend of Coinbase’s stock price aligns with the positive trend in the cryptocurrency market, with Bitcoin hitting multi-month highs amid the ongoing global banking crisis. On March 22, Bitcoin surpassed $28,000, reaching its highest level in nine months. This marks a significant recovery in price levels triggered by industry crises like the collapse of FTX.

ARK Invest’s recent sale comes shortly after its largest purchase of Coinbase stock in 2023. On March 9, the investment manager bought 301,437 Coinbase shares for its ARK Innovation ETF (ARKK) and 52,525 shares for the ARK Next Generation Internet ETF (ARKW). At the time of purchase, the stock was worth about $20.5 million, but has since increased to nearly $30 million in value.

ARK Invest’s decision to sell a portion of its Coinbase shares may indicate the firm is taking profits and diversifying its portfolio. It’s worth noting that ARK Invest has been a strong supporter of the cryptocurrency industry, with Cathie Wood herself being vocal about the potential for cryptocurrencies like Bitcoin to revolutionize the financial system.

Coinbase, which went public via a direct listing in April 2021, has had a turbulent year, with the company facing regulatory scrutiny and a significant drop in the price of cryptocurrencies earlier in 2022. However, the recent surge in Coinbase’s stock price, along with the positive trend in the cryptocurrency market as a whole, may signal a brighter future for the company.


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MetaMask Launches Ethereum Staking Marketplace

The most recent product that MetaMask Institutional has to offer is a staking marketplace that is designed to make the process of institutional staking for Ethereum more straightforward. This action represents a big step forward for institutions who are working for validator status on the Ethereum network.

Institutions who make use of MetaMask’s institutional-grade wallet and custody service now have the ability to handle their Ether (ETH) staking via a total of four different vendors. These vendors are ConsenSys Staking, Allnodes, Blockdaemon, and Kiln. The staking marketplace will provide an alternative to solo staking that is more streamlined and will make it simpler for institutions to participate in the Ethereum network as validators.

Because of the many costs, terms and conditions, rebates, and reporting criteria involved in institutional staking, a new marketplace for staking has been developed in order to handle this complexity. The solution provided by MetaMask streamlines the procedure and makes it easier for institutions to use it.

It is anticipated that the new offering would entice other institutions to engage in the Ethereum network, which will subsequently increase the network’s decentralization as well as its security. The risk of assaults and other breaches in network security will decrease as more institutions join the network and take on the role of validators. In addition, validators have the opportunity to receive benefits for their engagement in the network, which further serves to encourage such participation.

This most recent turn of events comes on the heels of a declaration made by Shanghai that it would facilitate deposit withdrawals for Ethereum validators. This indicates that solo stakers who have staked the required 32 ETH can now access their accumulated staking rewards and withdraw their tokens from their staked wallets. In the past, only liquidity provider pools permitted users to deposit and withdraw amounts of ETH that were below a certain threshold.

It is anticipated that the staking marketplace offered by MetaMask Institutional will prove to be a significant step forward for institutional staking on the Ethereum network. The procedure is made easier to understand and is made available to a greater number of institutions as a result. Ethereum’s decentralization and security are strengthened as more institutions become validators on the network. This makes Ethereum an even more robust and secure blockchain ecosystem than it already was.


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USD Coin Chief Strategy Officer Twitter Account Hacked

In a security breach, the Twitter account of Circle’s USD Coin (USDC) stablecoin chief strategy officer Dante Disparte has been compromised. The hack resulted in the promotion of fake loyalty rewards for long-time USDC users, which was tweeted from Disparte’s account and later deleted. Prior to the incident, the account had been tweeting about the regulatory developments of the firm and its participation in Paris Blockchain Week.

The security breach comes less than a month after the USDC briefly depegged due to reserve deposits left in the custody of defunct American tech bank Silicon Valley Bank. However, the incident was resolved, and the USDC has repegged, although there is still a slight variance with the stablecoin’s peg at the time of publication.

Circle’s USDC stablecoin is a regulated cryptocurrency that is backed by US dollars on a one-to-one basis. The stablecoin has been gaining popularity as a means of conducting transactions on cryptocurrency exchanges due to its stability compared to other cryptocurrencies, which are known for their volatility.

Hacking incidents have been prevalent in the cryptocurrency industry, with high-profile cases including the 2014 Mt. Gox hack, which resulted in the loss of around 850,000 bitcoins. In response to the incident, Circle has not provided any further details about the security breach or the steps it has taken to mitigate the damage caused by the hack. However, it is likely that the company will conduct a thorough investigation to determine the extent of the breach and prevent similar incidents from occurring in the future.

The security of cryptocurrencies and their related infrastructure is a pressing concern for regulators and market participants alike. In response to these concerns, regulatory bodies around the world have been implementing new measures to safeguard cryptocurrency exchanges and other digital asset platforms. The recent hack of Circle’s USDC stablecoin chief strategy officer’s Twitter account highlights the need for increased security measures and greater vigilance in the cryptocurrency industry.


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Bitcoin (BTC) $ 26,838.19 1.98%
Ethereum (ETH) $ 1,638.55 2.21%
Litecoin (LTC) $ 64.64 1.58%
Bitcoin Cash (BCH) $ 242.16 6.47%