Day: April 22, 2023

Binance Executive Accuses Former FTX CEO of Spreading Fake Rumors

by Blockchain News

Binance executive Patrick Hillmann recently took to Twitter to accuse former FTX CEO Sam Bankman-Fried, also known as SBF, of spreading “fake rumors” about Binance CEO Changpeng “CZ” Zhao. Hillmann claimed that Bankman-Fried used his influence to label Zhao as an “evil Chinese” in an attempt to perpetuate his alleged scams at FTX.

The public relationship between SBF and CZ had been often antagonistic, with the two exchanges having financial ties. However, Hillmann’s recent comments suggest that Bankman-Fried had taken things further than what was publicly visible. Hillmann also claimed that the denigration of CZ was the norm at FTX and had nothing to do with the decision to sell the worthless FTT on the company’s books.

The rivalry between FTX and Binance came to a head when CZ announced plans for Binance to liquidate its position in FTX Token (FTT) prior to FTX’s bankruptcy, hinting that Binance would consider purchasing the competitor. However, when the deal fell apart, and FTX filed for Chapter 11, the two industry heads traded barbs through social media. CZ called SBF a “fraudster,” and the former FTX CEO suggested that Zhao lied about the buyout discussions.

Despite the animosity between the two leaders, Zhao continues to lead Binance as CEO and regularly posts messages on social media. In contrast, Bankman-Fried faces 13 federal charges, including those related to bribery and wire fraud. As part of his bail conditions, he has only limited internet access.

Bankman-Fried’s alleged actions to denigrate CZ raise concerns about the role of social media in perpetuating rivalries and conflicts within the crypto industry. As crypto exchanges continue to grow in size and importance, it is crucial for their leaders to maintain a professional and respectful public image. Failure to do so could lead to reputational damage and undermine investor trust in the entire industry.

The rivalry between FTX and Binance is not unique in the crypto industry. The space is known for its intense competition, with companies vying for dominance in an emerging market with vast potential. However, the leaders of these companies must remember that they have a responsibility to act with integrity and professionalism in their public statements and behavior.

In conclusion, Hillmann’s accusations against Bankman-Fried highlight the need for greater scrutiny of the conduct of crypto industry leaders. As the industry continues to grow and evolve, it is important for regulators and investors to demand transparency and accountability from these companies and their leaders. Only by doing so can we ensure that the promise of crypto technology is fulfilled in a way that benefits everyone.

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Solana Launches Real-Time Carbon Emissions Tracking Dashboard

by Blockchain News

The Solana Foundation has launched a real-time tracking dashboard to measure carbon emissions on its blockchain. The foundation collaborated with data platform Trycarbonara to create the dashboard, which is the first “major smart-contract blockchain” to measure carbon emissions in real-time. This marks an important step towards promoting transparency and accountability in the blockchain industry.

The new dashboard can be found on the Solana Climate website and displays the total node count, megawatt-hours, total carbon emissions average, and marginal use, alongside numerous other indicators. Furthermore, it contains several emissions comparison charts where users can view side-by-side conversions depicting Solana usage versus numerous other emission-producing activities.

According to a blog post from the foundation, the organization hopes that this initiative will set a new standard for measuring emissions in blockchain by publishing this data. The data used to power the Solana Foundation’s real-time carbon emissions dashboard is available open-source and is modeled on the estimated carbon footprint of the Dell PowerEdge R940.

It remains to be seen whether other blockchain outfits will adopt similar tracking systems, but this move from the Solana Foundation comes amid increasing global efforts to utilize blockchain technology to monitor carbon emissions around the world.

As part of its “Shaping Europe’s digital future” initiative, the European Commission has praised blockchain’s ability to serve as a foundation for the accurate measurement of carbon emissions in any sector. In an article on the EU’s digital strategy blog, the commission wrote, “Blockchain can be utilised through smart contracts to better calculate, track and report on the reduction of the carbon footprint across the entire value chain.”

This move towards using blockchain to track carbon emissions is particularly relevant given the global climate crisis and increasing demand for more sustainable and eco-friendly practices.

In the United States, President Joe Biden recently floated budget plans that would add an excise on electricity used for cryptocurrency mining in the amount of 30%. This shows that the government is also taking steps towards addressing the energy consumption concerns of the cryptocurrency industry.

Overall, the Solana Foundation’s real-time carbon emissions tracking dashboard is a positive step towards promoting transparency and accountability in the blockchain industry. As more blockchain outfits follow suit, the industry will become more eco-friendly, which is crucial for achieving a sustainable future.

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OPNX Reveals Venture Capital Backers

by Blockchain News

OPNX, a new exchange founded jointly by members of the Three Arrows Capital (3AC) and Coinflex teams, has revealed the venture capital firms that are backing the project. The announcement came in the form of a video posted by the company on April 21, in which CEO Leslie Lamb thanked some of the major backers of the project, including AppWorks, Susquehanna (SIG), DRW, MIAX Group, China Merchant Bank International, and Token Bay Capital.

Despite the announcement, OPNX has faced criticism in the crypto community due to its association with the bankrupt 3AC hedge fund. Some firms have claimed they may refuse to associate with anyone who helps fund the new exchange. However, the company behind the project has defended itself, arguing that it will help make customers of failed crypto ventures whole again.

According to early fundraising documents, OPNX will allow traders to buy and sell claims against bankrupt firms such as 3AC and FTX. The exchange aims to create a secondary market for these claims, allowing investors to potentially profit from them.

The backers of OPNX have previously funded various tech and financial projects. For example, SIG was one of the early backers of TikTok, and MIAX Group owns a U.S.-regulated equities and options exchange. AppWorks is also listed on Crunchbase as a partial owner of Uber.

However, at least one of the firms mentioned in the video has denied funding the project. DeFi trading firm Nascent stated that it bought Coinflex tokens issued by the company’s previous incarnation but did not participate in a funding round for OPNX.

Three Arrows Capital was a crypto hedge fund founded in 2012. In June, it was issued a notice of default by Voyager Digital after allegedly failing to pay 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC) that had been loaned to it. The hedge fund filed for bankruptcy on July 1, and some creditors have accused the founders of being “on the run” or hiding from the bankruptcy court.

Despite these controversies, OPNX seems determined to move forward with its plans. By creating a secondary market for claims against bankrupt firms, the exchange aims to provide a new avenue for investors to potentially profit from these types of investments. However, it remains to be seen how successful the venture will be, especially given the backlash it has received from some corners of the crypto community.

Overall, the emergence of OPNX highlights the growing interest in crypto-related investment opportunities, as well as the potential risks and rewards of these types of investments. As the crypto market continues to evolve, it is likely that we will see more projects like OPNX emerge, each with their own unique opportunities and challenges.

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US National Security at Risk Due to China’s Dominance in Mobile Payments, says former State Department Official

by Blockchain News

Former Department of State official Anja Manuel warns that if the US loses its dominance in financial innovation and payments, it could impact its national security policy, specifically on sanctions. Manuel stated that China is catching up on dominance in mobile payments, which could make enforcing sanctions against “bad actors” like Iran or North Korea more challenging. (Read More)

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US National Security at Risk Due to China Dominance in Mobile Payments, says former State Department Official

by Blockchain News

In a Twitter Spaces discussion with Coinbase CEO Brian Armstrong and listeners, former Department of State official Anja Manuel cautioned that the US’s ability to enforce sanctions on “bad actors” like Iran or North Korea could be threatened if it fails to maintain its leadership in financial innovation and payments. According to Manuel, the US’s status as one of the largest global leaders in payments enables it to enforce sanctions on countries and entities that are deemed to be a threat to national security. However, China seems to be catching up in mobile payments, both in sophistication and scale. If China’s payments solutions gain a dominant foothold in the developing world, enforcing sanctions could become significantly more challenging.

The Office of Foreign Assets Control of the Treasury Department enforces US sanctions, including sanctions on crypto wallets related to Russian nationals and groups’ involvement in the war on Ukraine. Manuel acknowledged that sanctions generally work in a world of traditional banks and responsible blockchain firms, but they are less effective when financial technology firms are available to individuals looking to circumvent restrictions.

There are several reasons why maintaining US dominance in financial innovation and payments is essential for national security. First, the ability to enforce sanctions against countries deemed to be a threat to national security is critical. Sanctions are a key tool in deterring countries from pursuing policies that threaten US interests. Second, financial innovation and payments are critical for US economic growth. The US’s ability to innovate and create new technologies has been a key driver of economic growth for decades.

The US government has historically played a significant role in fostering innovation and supporting the growth of new technologies. However, there are concerns that the US is losing ground to other countries, particularly China. China has made significant investments in technology and innovation and has developed a reputation as a global leader in several areas, including mobile payments.

To maintain its leadership in financial innovation and payments, the US must continue to support the growth of new technologies and create an environment that fosters innovation. This will require a significant investment in research and development, as well as regulatory frameworks that support the growth of new technologies while also protecting consumers and national security.

In conclusion, the US’s ability to maintain its leadership in financial innovation and payments is critical to its national security. If the US loses ground to other countries, particularly China, enforcing sanctions and deterring countries from pursuing policies that threaten US interests could become much more challenging. The US must continue to invest in research and development and create regulatory frameworks that support innovation while also protecting national security.

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US Treasury to Increase DeFi Regulation

by Blockchain News

The decentralized finance (DeFi) sector has been booming in recent years, with a plethora of new projects and services popping up every day. However, with its rapid growth comes increased scrutiny from regulators, and the United States Treasury recently conducted a risk assessment of the sector to identify potential risks and areas where it may be lacking in compliance.

According to Assistant Treasury Secretary for Terrorist Financing and Financial Crime Elizabeth Rosenberg, the report found that DeFi was lacking in several ways, particularly in terms of Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) compliance. She stated that the lack of compliance had allowed scammers, money launderers, and North Korean hackers to benefit from the sector, which is a major concern for the Treasury.

Rosenberg spoke about the report’s findings at a recent event hosted by the Atlantic Council think tank, and she warned that the sector should be prepared for increased regulation in the future. The report was part of the Treasury’s response to U.S. President Joe Biden’s executive order on the responsible development of digital assets, which calls for increased oversight and regulation of the crypto industry.

One of the report’s key findings was that DeFi was not always as decentralized as it claimed to be. Many of the services and persons associated with DeFi services were found to be subject to AML/CFT obligations, meaning they were liable to comply with the Bank Secrecy Act. The report concluded that all DeFi services must comply with the Act, which is a major step towards increased regulation of the sector.

While some in the DeFi community may be concerned about the potential for increased regulation, others see it as a necessary step to ensure the sector’s long-term success. With more oversight and compliance measures in place, investors and users can be assured that they are participating in a safe and secure ecosystem that is less vulnerable to fraud and illicit activities.

Overall, the US Treasury’s risk assessment of DeFi has highlighted the need for increased compliance and regulation in the sector. As the DeFi industry continues to grow and evolve, it will be important for all participants to ensure they are following the necessary AML/CFT guidelines and complying with applicable laws and regulations. By doing so, they can help to create a more secure and sustainable future for the sector.

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Former US Secret Service Officer Warns of FTX Customer Targeting Risk

by Blockchain News

Jeremy Sheridan, a former assistant director of the United States Secret Service Office of Investigations, has warned of the potential risks to FTX customers if their personal information is made public. In an April 20th declaration, Sheridan supported a motion from the debtors of FTX, a failed cryptocurrency exchange, to withhold the confidential information of its users from public release.

According to Sheridan, who is currently a managing director for FTI Consulting, the release of names associated with the failed crypto exchange could lead to severe consequences. He stated that such disclosure could impose “a severe and unusual risk of identity theft, asset theft, personal attack, and further online victimization” on FTX customers.

The former Secret Service officer went on to explain that the public disclosure of FTX customers’ names would provide potential malefactors with an itemized list of vulnerable targets. He warned that releasing the schedules of assets and liabilities of FTX customers could provide attackers with a menu of potential targets and the cryptocurrency holdings of each debtor.

Sheridan’s warning comes in the wake of FTX’s recent bankruptcy filing in the United States. The company had been struggling financially for some time, and the filing was seen as an inevitable step for the exchange.

The motion to withhold confidential information was supported by Sheridan and several other experts in the field. They argued that the release of personal information could have a significant impact on FTX customers, particularly given the prevalence of identity theft and cybercrime.

In recent years, the number of cyberattacks and data breaches has increased dramatically, with companies and individuals around the world falling victim to hackers and other malicious actors. In many cases, these attacks have resulted in the theft of personal and financial information, leaving victims vulnerable to further exploitation.

Given this threat, it is clear that the release of personal information could have a severe impact on FTX customers. The potential for identity theft and asset theft, as highlighted by Sheridan, is a very real concern, and it is essential that measures are taken to protect the privacy and security of FTX users.

In conclusion, Sheridan’s warning highlights the need for caution when it comes to the release of personal information. As we move further into the digital age, it is clear that cybersecurity will become an increasingly important issue, and it is essential that individuals and companies take steps to protect themselves from the risk of cybercrime.

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Web3 Startup Funding Drops 82 percents YoY

by Blockchain News

According to recent data from Crunchbase, venture capital (VC) funding for Web3 startups dropped significantly by 82% YoY in Q1 2023, declining from $9.1 billion to $1.7 billion. This significant decline in funding is attributed to investors adopting a risk-off approach over the past few months by seeking out opportunities in industries they know best, such as cybersecurity or SaaS. The number of deals between VCs and Web3 startups also saw a decline of roughly 33%. The report from Crunchbase News highlights that this $1.7 billion figure for Q1 2023 marks the lowest amount of Web3 start-up funding since Q4 2020, a time in which many people had never heard of Web3.

Web3 startups are defined as early-stage companies that are either working directly with crypto or blockchain tech (or both). The report also emphasized that the number of big Web3 start-up funding rounds hitting nine figures almost completely dried up over the past year. In Q1 2022, VC-backed startups raised 29 rounds of more than $100 million, including massive raises of $400 million or more by ConsenSys and Polygon Technology, as well as FTX and its U.S. affiliate FTX US. However, the most recently completed quarter saw only two rounds hit the nine-figure mark, as VCs have hit the brakes on spending big in the space.

Although the interest in Web3 start-ups has cooled off in recent times, the report from Crunchbase also acknowledges that venture funding is down in almost every sector. The decline in Web3 funding is attributed to investors opting for a risk-off approach over the past few months by seeking out opportunities in industries they know best, such as cybersecurity or SaaS.

The decline in Web3 startup funding is also attributed to the dramatic collapse of FTX and several other crypto lenders, as well as banking issues that rattled the economy in general. However, there are some positive signs as highlighted by the report, such as the significant price rallies of Bitcoin (BTC) and Ether (ETH) since the start of the year. Whether this is enough to bring more venture dollars back to the space, only time will tell.

In a different report published by Galaxy Research on April 11, the firm looked at the broader amount of VC investment into all crypto companies over the past 12 months. In a similar vein to the recent trend in Web3 funding, the report indicated that the $2.4 billion invested into all crypto firms in Q1 2023 marked an 80% decline from the $13 billion recorded in Q1 2022. Notably however, while capital investment plummeted significantly YoY, the report showed that the number of VC crypto deals had increased by around 20% in Q1 2023 compared to Q4 2022.

The head of firm-wide research at Galaxy, Alex Thorn, stated that historically, venture activity has tracked crypto asset prices pretty closely. Therefore, it will be interesting to see if crypto VC activity can rebound if prices remain resilient or constructive this year, despite the many macro and monetary headwinds.

In conclusion, the decline in Web3 startup funding is a significant concern for the industry. However, there are positive signs as highlighted by the report, such as the significant price rallies of Bitcoin (BTC) and Ether (ETH) since the start of the year. The rise in crypto asset prices could encourage more investment in Web3 startups in the future, especially if investors believe in the potential of these companies to disrupt traditional industries.

It’s worth noting that Web3 technology is still in its infancy, and many companies are still trying to figure out how to apply this technology to real-world use cases. As such, there is a certain level of risk involved in investing in Web3 startups, and many investors may be hesitant to take on that risk, especially given the current economic climate.

Furthermore, the decline in Web3 funding is not limited to this sector alone, as venture funding is down in almost every industry. The decline in VC investment is attributed to various factors such as inflation, supply chain disruptions, and global economic uncertainty. This has led many investors to be cautious with their investments, especially when it comes to early-stage companies.

Despite the challenges, there are still many reasons to be optimistic about the future of Web3 technology. The potential use cases for blockchain technology are vast and varied, ranging from supply chain management to digital identity verification, and many companies are working on innovative solutions to address these issues.

Moreover, the rise of decentralized finance (DeFi) has demonstrated the potential of blockchain technology to revolutionize the financial industry. As more people become aware of the benefits of DeFi and Web3 technology, it’s possible that we may see a resurgence in VC investment in this space in the coming years.

In conclusion, the decline in Web3 startup funding is undoubtedly a cause for concern, but it’s important to remember that this technology is still in its early stages. As the industry matures and more companies develop innovative solutions, we may see a renewed interest in Web3 startups from investors. Furthermore, the rise of DeFi and the increasing mainstream acceptance of cryptocurrencies could lead to a resurgence in VC investment in the Web3 space in the future.

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Over 1 in 3 TikTok Influencers Post Misleading Crypto Content

by Blockchain News

A recent study by dappGambl has revealed that TikTok influencers are posting misleading videos about cryptocurrency investments, with over one in three videos found to be deceptive. The social media platform has become an alternative to Google searches for many individuals, particularly younger generations. However, some influencers have been found to share unvetted misinformation on crypto investments, often trying to convince unwary viewers to put their hard-earned money into loss-making cryptocurrencies.

The analysis of over 1,161 TikTok videos with the hashtag “#cryptok” revealed that only 1 in every 10 cryptok accounts or videos contained some form of disclaimer that warned users about the risk of investments. Additionally, out of the lot, 47% of TikTok creators were found trying to push services to make money. This lack of accountability and transparency highlights the need for better regulation in the social media industry.

The potential financial risk for unwary investors remains equally high, despite TikTok influencers having a smaller reach than their mainstream counterparts. The study also discovered that popular crypto-related hashtags such as crypto, cryptok, cryptoadvice, cryptocurrency, cryptotrading, and cryptoinvesting have cumulatively churned over 6 billion views on TikTok. The platform has become a breeding ground for unverified information on crypto investments, causing viewers to overlook the ill-intent of their favorite influencers and trust their content purely based on the high number of views or likes.

The consequences of this trend are severe, with individuals investing their hard-earned money into cryptocurrencies without proper research, often resulting in significant financial losses. The United States Securities and Exchange Commission (SEC) has also cracked down on the promotion of cryptocurrencies by influencers. The SEC forced Kim Kardashian to pay $1.26 million in penalties for the promotion of EthereumMax (EMAX). Other mainstream influencers such as Jake Paul and Soulja Boy have also been accused of promoting cryptocurrencies to their millions of fans without disclosing payments received.

On April 2, a $1 billion lawsuit was filed against crypto exchange Binance, its CEO Changpeng “CZ” Zhao, and three crypto influencers for promoting unregistered securities. The Moscowitz Law Firm and Boies Schiller Flexner, who filed the lawsuit, referred to the case as a “classic example of a centralized exchange, which is promoting the sale of an unregistered security.”

In conclusion, the study by dappGambl highlights the need for stricter regulations and accountability measures for social media platforms. Both new and seasoned investors are advised to do extensive research on crypto projects prior to making any form of investment. With the potential financial risk for unwary investors remaining high, it is crucial that social media platforms such as TikTok take responsibility for the content shared by their influencers, and ensure that users are properly warned about the risks of investing in cryptocurrencies.

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Terraform Labs Co-Founder Argues Against SEC Lawsuit

by Blockchain News

In recent news, Terraform Labs co-founder Do Kwon’s lawyers have made arguments in court against the US Securities and Exchange Commission’s (SEC) lawsuit alleging that Kwon illegally offered unregistered securities to US investors. Kwon’s lawyers have requested the lawsuit be dismissed, citing that US law prohibits regulators from using federal securities law to assert jurisdiction over the digital assets in the case. According to Bloomberg, the lawyers also claim that the SEC has failed to prove that Kwon defrauded US investors in connection with the $40 billion collapse of TerraUSD (UST) and Luna (LUNA) cryptocurrencies. The lawyers argue that the stablecoin in question is a currency and not a security.

The legal proceedings began when Kwon was arrested in Podgorica airport, Montenegro, on March 23, while attempting to fly to Dubai using fake documents. Following his arrest, both South Korean and American authorities requested the entrepreneur’s extradition. At present, it is unclear which country, if any, will be granted the extradition of Kwon.

The Seoul Southern District Court recently denied an arrest warrant for Terraform Labs co-founder Shin Hyun-Seong. Although prosecutors saw Kwon’s arrest as an opportunity to apprehend Shin, the court denied the request citing unconfirmed allegations and the unlikeliness of Shin being a flight risk or destroying evidence.

Montenegrin Justice Minister Marko Kovač, through an interpreter, stated that determining to which state Kwon would be extradited would be based on several factors such as the severity of the committed criminal offense, the location and time when the criminal offense was committed, the order in which the request for extradition was received, and several other factors.

Terraform Labs, which is behind the development of the Terra blockchain and several stablecoins, has gained attention in the cryptocurrency industry in recent years. The company has been working on a variety of projects, including an online marketplace and decentralized finance applications. The SEC lawsuit against Kwon is just one of several legal battles that the company has been involved in, including a lawsuit filed by the South Korean financial watchdog against the company’s stablecoin, Terra.

In conclusion, the legal battle between Do Kwon and the SEC is ongoing, and the outcome remains uncertain. However, Kwon’s lawyers’ arguments that the stablecoin in question is a currency and not a security may have implications for the broader cryptocurrency industry. Additionally, the issue of Kwon’s extradition remains unresolved, and it is unclear which country, if any, will be granted the request for his extradition. The Terraform Labs legal battles highlight the regulatory challenges faced by the cryptocurrency industry as it continues to grow and develop.

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Bitcoin (BTC) $ 26,637.14 1.55%
Ethereum (ETH) $ 1,595.00 1.75%
Litecoin (LTC) $ 65.04 0.25%
Bitcoin Cash (BCH) $ 209.73 1.88%