Dunamu’s Upbit Reports 81% Profit Drop in Q3 2023

The revenues of Dunamu, the parent company of Upbit, one of the most prominent cryptocurrency exchanges in South Korea, dropped by an astounding 81% during the third quarter of 2023, according to the company’s report. The performance of the corporation during the same quarter of the previous year stands in striking contrast to this dramatic fall made by the company. Dunamu had reported a net profit of 159.9 billion KRW (about $123 million) in the third quarter of 2022, but this number dropped to only 29.5 billion KRW (roughly $23 million) in the third quarter of 2023.

The recent decline in the cryptocurrency market is the primary cause of the financial performance of Dunamu, which has seen a large decline overall. It was admitted by the corporation that the falling pricing of digital assets, in conjunction with an investment climate that was typically slow, were important factors to this collapse. It is important to note that the issues that many organizations in the bitcoin industry had during this time period are reflected in this larger economic situation.

Dunamu continues to be dedicated to the blockchain and cryptocurrency field, despite the present bear market and the financial hardships that its investors have experienced. The organization is of the opinion that increasing the number of people who use blockchain services is essential in order to successfully navigate current challenging market circumstances. As a component of their long-term plan, there is a significant emphasis placed on reviving the blockchain ecosystem and enhancing the broader investment environment.

An further obstacle that Upbit, Dunamu’s cryptocurrency exchange, had to contend with was a considerable rise in the number of attempts to hack the system. In comparison to the same time period in 2022, the number of hacking attempts that were made against Upbit increased by 117% during the first half of 2023. Nevertheless, it is significant that the platform has been able to prevent any big security breaches since the hacking incident that occurred in 2019 and included fifty million dollars that occurred.

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Tornado Cash Token Plummets Following Binance Delisting Announcement

Following the news that Binance, the biggest cryptocurrency exchange in the world in terms of volume, made about the delisting of the Tornado Cash (TORN) token, the value of the token witnessed a significant decline over time. It is important to note that the market value of TORN, which is the governing token for the cryptocurrency mixing protocol Tornado Cash, has seen a dramatic decline of more than fifty percent.

In accordance with the information provided by CoinGecko, the collapse was particularly severe, with the value of TORN falling from around $4.00 to $1.66, which represents a reduction of 57%. This precipitous decline happened at the same time that Binance announced that it will stop accepting deposits of TORN on December 8 and would totally stop taking withdrawals after March 7, 2024.

A portion of the decrease in the value of TORN may be ascribed to the penalties that were placed on Tornado Cash by the United States Office of Foreign Asset Control on August 8 for allegedly supporting operations related to money laundering. This resulted in a legal prohibition that prevented those living in the United States from utilising the protocol.

When Binance made the decision to delist TORN, it was affected by a number of different variables. On a regular basis, the exchange examines digital assets to make certain that they are up to the required standards. According to Binance, the delisting of TORN, along with other tokens such as BitShares (BTS), PERL.eco (PERL), and Waltonchain (WTC), was due to decreased development activity, poor liquidity and trading volume, and concerns about unethical behaviour or neglect. Other tokens to be delisted include Waltonchain (WTC), PERL.eco (PERL), and more. The date of the delisting is set for the seventh of December in the year 2023.

The values of other tokens, such as Waltonchain, PERL.eco, and BitShares, also saw significant drops, with falls of 56%, 54%, and 47%, respectively. This is an important development. As a result of this decision, Binance recently reached a settlement with the authorities in the United States that was worth $4.3 billion. Additionally, the company experienced a shift in its leadership, with the previous CEO Changpeng Zhao resigning from his position.

Binance’s decision to remove Tornado Cash from its list of cryptocurrencies and the following decline in the token’s value are two examples that illustrate the substantial influence that exchange choices have on cryptocurrency markets. Additionally, it is a reflection of the continued regulatory problems that the cryptocurrency sector is experiencing, as well as the critical role that compliance plays in preserving the integrity of the market.

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Nigerian Police Arrest Politician Wilfred Bonse for Involvement in Patricia Technologies Financial Fraud

The Nigeria Police Force (NPF) has announced a significant breakthrough in a complex financial fraud investigation involving Patricia Technologies Limited. On November 23, 2023, the Force Public Relations Officer, ACP Olumuyiwa Adejobi, detailed the arrest of politician Wilfred Bonse in connection with a security breach and financial fraud at Patricia Technologies.

According to the NPF, the case revolves around criminal conspiracy, unauthorized computer and network data modification, and the illicit diversion of over 200 million Naira (approximately $246,153). The investigation led to the arrest of Wilfred Bonse, accused of laundering 50 million Naira ($61,538) from a total of 607 million Naira ($747,076) fraudulently diverted from Patricia Technologies. This diversion was facilitated through a cryptocurrency wallet.

Further, on November 20, 2023, the NPF-National Cybercrime Center (NCCC) arrested Njoku Kingsley, Chigozie Okorie, and Jideofor Sejus in connection with a separate case of conspiracy, identity theft, and romance scam. This operation in the Wumba District, Apo Area of the Federal Capital Territory, highlighted the suspects’ involvement in swindling victims through a fake profile named Anthony James.

In another development, the NPF-NCCC successfully recovered 179,372.6 USDT in a case involving Ummukulthum Basha and Sean Andres Delacruz, a US citizen. Basha, a cryptocurrency enthusiast, suffered a loss of 20,000 USDT in a fraudulent trading scheme. Sean Andres Delacruz, initially offering assistance, was later identified as the mastermind behind the criminal act. The collaboration with KuCoin was crucial in recovering the funds and identifying Delacruz.

The NPF has emphasized the importance of public vigilance, especially regarding high-yield investment programs that often turn out to be scams. They urge the public to exercise caution and report any suspicious financial activities to their e-reporting portal 

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Wallet of Satoshi Withdraws from the U.S. Market Amid Regulatory Challenges

The recent announcement by Wallet of Satoshi (WoS) to withdraw its app from the U.S. Apple and Google app stores and cease serving U.S. customers marks a significant shift in the Bitcoin wallet landscape. This decision reflects the increasingly challenging regulatory environment in the United States, which has affected not only WoS but other crypto service providers as well.

In a similar vein, GameStop, known for its video game retailing, terminated its crypto wallet service due to the uncertain regulatory climate in the U.S. Launched just a year prior, this service was integrated with Ethereum’s layer-2 scaling protocol and allowed users to hold, trade crypto, and access decentralized apps. However, unspecified regulatory uncertainties, likely related to the intensified scrutiny by U.S. authorities like the SEC and the Commodity Futures Trading Commission, led to its discontinuation​​.

Regulatory Pressures on Crypto

The U.S. federal government has been contemplating enforcing know-your-customer (KYC) rules on unhosted or self-hosted crypto wallets. This controversial proposal by the Financial Crimes Enforcement Network (FinCEN) requires crypto exchanges to collect detailed personal information for transactions involving private wallets. The crypto industry expressed concerns over the feasibility and burden of these rules, given the nature of certain wallets and individual privacy considerations​​.

Binance, the world’s largest cryptocurrency exchange, also faced regulatory hurdles. The SEC sued Binance and its U.S. operator for several allegations, including artificially inflating trading volumes and mismanaging customer funds. To ensure U.S. customer assets remain within the country, Binance.US reached an agreement with the SEC, restricting access to these assets to Binance.US employees only. This agreement is part of broader regulatory crackdown efforts in the U.S. crypto industry​​​​.

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Alchemy Pay Expands U.S. Footprint with Iowa Money Services License

The well-known fiat-crypto payment gateway Alchemy Pay has reached a noteworthy milestone when it obtained a Money Services License in the US state of Iowa. This achievement, which was declared on November 23, 2023, comes after they were successful in getting an Arkansas money transmitter license earlier. Obtaining these licenses is a significant milestone in Alchemy Pay’s ambitions to increase its market presence internationally as well as evidence of its regulatory compliance.

The regulatory body in charge of granting the Money Services License is the State of Iowa’s Division of Banking. Businesses that transact money or exchange currencies in Iowa are required to have this license, which is currently included in the Nationwide Multistate Licensing System (NMLS). For Alchemy Pay to continue operating in the money transfer and currency exchange industries, it is imperative that it uphold certain local regulatory criteria.

Robert McCracken, Ecosystem Lead, underlined the need of complying with current financial rules in the United States. He sees a well-organized regulatory framework as critical to the long-term growth of the cryptocurrency payment sector. This emphasis on compliance stems from our understanding of its importance in promoting long-term success in the quickly changing crypto payment ecosystem, in addition to being a strategic decision.

Established in 2017 in Singapore, Alchemy Pay functions in 173 nations and accepts various payment methods such as major credit cards and local mobile wallets. The company’s successful license in numerous countries like the United States, Lithuania, Indonesia, and Canada highlights its powerful worldwide team and reinforces its position in the crypto payment market. Due to its recognition as an approved third-party service provider by Visa and Mastercard, it has trust even in the conventional payment industry.

Companies like Alchemy Pay are well-positioned for expansion as long as U.S. authorities keep creating comprehensive laws for the cryptocurrency sector. They are actively working to fit with both established and developing frameworks. Their proactive strategy to securing licenses for worldwide compliance highlights their ability to adjust to regulatory changes and take advantage of emerging market possibilities.

The purchase of the Iowa Money Services License by Alchemy Pay is a major step forward in the company’s U.S. market strategy. This action strengthens its adherence to legal requirements and expands its capacity to provide safe payment services internationally. By consistently pursuing new licenses, Alchemy Pay is proactively establishing itself as a progressive and law-abiding participant in the global cryptocurrency payment space.

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BlackRock and SEC Discuss iShares Bitcoin Trust Listing on Nasdaq

On November 20, 2023, a critical meeting was held between the United States Securities and Exchange Commission (SEC) and representatives from BlackRock, Inc., and the Nasdaq Stock Market LLC. The meeting’s primary focus was the discussion of the iShares Bitcoin Trust and its potential listing on Nasdaq as a spot Bitcoin exchange-traded fund (ETF).

The SEC’s Division of Trading and Markets hosted the meeting, attended by key personnel including David Shillman, Tom McGowan, Randall Roy, Ray Lombardo, Molly Kim, Edward Cho, Sarah Schandler, and Stacia Sowerby. Representing BlackRock were Rachel Aguirre, Adithya Attawar, Shannon Ghia, Robert Mitchnick, Charles Park, Marisa Rolland, and Ben Tecmire. Additionally, Eun Ah Choi, Jonathan Cayne, Giang Bui, and Ali Doyle represented The NASDAQ Stock Market LLC.

BlackRock’s presentation to the SEC included a detailed exposition of two potential models for the iShares Bitcoin Trust: the “In-Kind Redemption Model” and the “In-Cash Redemption Model.” These models outlined the mechanics of how the ETF could operate, focusing on the redemption process involving market makers, bitcoin custodians, and various exchanges.

The In-Kind Redemption Model entails a process where the ETF issuer instructs the Bitcoin Custodian to release bitcoin to a market maker, who may then unwind the bitcoin position. This model involves various parties, including a U.S. Registered Broker/Dealer, spot crypto exchanges, and a listing exchange.

The In-Cash Redemption Model, on the other hand, involves the ETF issuer trading with the market maker to sell bitcoin for USD. This model includes additional steps involving the Bitcoin Custodian moving cash out of cold storage and the market maker delivering shares to the Transfer Agent via an Authorized Participant.

The SEC’s response to BlackRock’s presentation and proposed models remains unclear, with no information on whether the SEC plans to approve the listing of a spot Bitcoin ETF. The approval of such an ETF would represent a major milestone in the acceptance of cryptocurrency in mainstream financial markets.

This meeting comes amid ongoing reviews by the SEC of various proposals for spot crypto ETFs from several firms, including Fidelity, WisdomTree, Invesco Galaxy, Valkyrie, VanEck, and Bitwise, alongside BlackRock. The push for a spot Bitcoin ETF has seen several delays and denials, creating a sense of anticipation and uncertainty in the crypto and financial markets.

The SEC has also met with executives from Grayscale on the same day to discuss their proposal for a Bitcoin ETF. The meeting with BlackRock and the ongoing reviews indicate the SEC’s active engagement in understanding and potentially integrating cryptocurrencies into regulated financial products.

BlackRock’s application to list a spot Bitcoin ETF on the Nasdaq was initially filed in June 2023. The discussion around Bitcoin ETFs has been fueled by a 2019 video of SEC Chair Gary Gensler, where he criticized the commission’s “inconsistent” approach to Bitcoin products. The approval of a spot Bitcoin ETF by the SEC would be a landmark decision, potentially paving the way for wider acceptance and integration of cryptocurrencies in the mainstream financial sector.

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SEC Accuses Kraken of Operating Without Registration, Alleges Mixing of Funds

The U.S. Securities and Exchange Commission (SEC) has filed a complaint against Payward Inc. and Payward Ventures Inc., collectively known as Kraken, for operating their cryptocurrency trading platform without the necessary registrations. The complaint, filed in San Francisco, alleges violations dating back to September 2018. Kraken is accused of functioning as an unregistered exchange, broker, dealer, and clearing agency, amalgamating the roles of these entities without proper registration. This reportedly deprived investors of crucial protections, such as SEC inspection and safeguards against conflicts of interest.

The SEC’s complaint outlines several concerns, including Kraken’s provision of a marketplace for securities transactions, effectively operating as an exchange; engaging in securities transactions for customers, thus acting as a broker; buying and selling securities for its own account, functioning as a dealer; and serving as an intermediary in settling transactions in crypto asset securities, thereby operating as a clearing agency. The complaint also alleges that Kraken’s business practices, including deficient internal controls and poor recordkeeping, pose risks to customers. Notably, Kraken is accused of commingling customer funds with its own, leading to potential loss risks.

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, emphasized the agency’s stance on Kraken’s preference for profits over investor protection. The SEC seeks injunctive relief, disgorgement of profits plus interest, and penalties. Earlier in February, Kraken agreed to a $30 million penalty and ceased offering crypto asset staking services.

This lawsuit is part of a wider SEC crackdown on cryptocurrency exchanges operating without proper registrations. Similar allegations were made against other exchanges like Binance and Coinbase. The SEC’s list of unregistered securities includes tokens like ALGO, MATIC, and NEAR. Kraken’s response, as expressed by CEO Dave Ripley, disputes the SEC’s claims and defends their position of not listing securities. The debate continues over the SEC’s approach to cryptocurrency exchanges and the absence of clear regulatory pathways.

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Celsius to Transition to Mining-Only NewCo following Bankruptcy Court’s Confirmation of Plan

Celsius Network LLC, a global cryptocurrency platform, is set to undergo a significant transformation following the confirmation of its Chapter 11 plan by the United States Bankruptcy Court for the Southern District of New York. This change comes after facing challenges with the U.S. Securities and Exchange Commission (SEC).

The restructuring plan initially involved creating a new company with Fahrenheit, LLC, focusing on various crypto business activities. However, the SEC’s request for more information about Celsius’ assets has led to a strategic pivot. Celsius is now planning to transition to a publicly traded Bitcoin mining company, owned by its customers, known as Mining NewCo​​​​​​.

Fahrenheit, an investment vehicle, had emerged as a key player in Celsius’ reorganization plans. The SEC’s involvement and requests for detailed information about Celsius’ assets and business operations have significantly influenced the new direction. There are ongoing discussions about the management and future of Mining NewCo​​.

Celsius had filed for Chapter 11 bankruptcy in July 2022, revealing a $2 billion deficit in its balance sheet. The plan included returning cryptocurrencies to its customers and creating a new company focused on Bitcoin mining. This pivot to mining is a response to the regulatory scrutiny, particularly from the SEC, which has been a significant factor in shaping the company’s post-bankruptcy trajectory​​​​​​.

The confirmation of Celsius’ restructuring plan marks a new chapter in the company’s journey. While the company initially faced a significant deficit and regulatory challenges, the transition to a mining-only model under NewCo represents a strategic shift. This shift aims to address regulatory concerns and set a path for recovery and growth in the evolving cryptocurrency landscape. Celsius’ focus on Bitcoin mining signifies its adaptation to the changing regulatory and business environment.

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U.S. Justice Department Seizes $9M in Crypto from Romance Scam Ring

On November 21, 2023, the U.S. Justice Department announced a significant disruption in cybercrime activities, seizing nearly $9 million in Tether (USDT) from an international scam organization. This organization was involved in executing romance scams and cryptocurrency confidence scams, infamously known as “pig butchering.”

The scam network targeted over 70 victims across the United States, luring them with fake investment opportunities through non-existent trading platforms. Acting Assistant Attorney General Nicole M. Argentieri stated that this operation aimed at deceiving ordinary investors, leaving them with substantial financial losses. The U.S. Secret Service’s thorough analysis and tracing of cryptocurrency transactions were instrumental in identifying and seizing the fraudulent funds. These funds were quickly laundered through multiple cryptocurrency addresses and exchanged across various digital currencies, a tactic known as “chain hopping.”

The successful seizure is a result of the collaborative efforts between the Justice Department and the U.S. Secret Service. U.S. Attorney Ismail J. Ramsey emphasized the department’s commitment to justice for fraud victims, particularly in prominent cryptocurrency hubs like Silicon Valley. Special Agent in Charge Shawn Bradstreet of the USSS San Francisco Field Office reaffirmed the agency’s dedication to protecting the financial security of U.S. citizens.

The USSS San Francisco Field Office led the investigation, with Trial Attorney Georgiana MacDonald and Assistant U.S. Attorneys Chris Kaltsas and Galen Phillips managing the case and related forfeiture actions. Additionally, Tether’s cooperation in transferring the seized assets was acknowledged by the department.

Victims of cryptocurrency scams are encouraged to report incidents to the FBI’s Internet Crime Complaint Center (IC3) and the Federal Trade Commission’s (FTC) Consumer Sentinel Network.

This seizure is part of a broader effort by U.S. authorities to combat cryptocurrency-related fraud and crime. The U.S. government has previously demonstrated its capability to recover illegal funds in similar scenarios, such as the seizure of about 70,000 Bitcoins connected to the Silk Road in 2020. An October report by 21.co indicated that the U.S. government holds over $5 billion in seized cryptocurrency assets.

The Justice Department’s recent seizure of $9 million in Tether underscores the U.S. government’s ongoing commitment to combating cyber-enabled financial fraud and protecting investors. This case serves as a cautionary tale about the risks associated with cryptocurrency investments and the importance of vigilance in the digital finance landscape.

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Binance Undergoes Leadership Shakeup Amid DOJ Investigation

Binance, the biggest cryptocurrency exchange in the world, is about to embark on a new section of its history with Richard Teng serving as its Chief Executive Officer. Changpeng Zhao, the creator of Binance, made the announcement on this consequential shift in leadership. Not only does Teng’s appointment come at a vital moment for the exchange, but it also marks a new direction in the administration and strategy of the exchange.

There is a striking coincidence between the selection of a new CEO and the departure of Changpeng Zhao, sometimes known as “CZ,” who was leaving under extraordinary circumstances. After pleading guilty to violating anti-money laundering rules in the United States, Zhao resigned from his position. A massive $4.3 billion settlement with United States authorities was reached as a result of this plea, making it one of the highest corporate fines in the history of the United States. Following closely on the heels of the conviction for fraud that was handed down to FTX founder Sam Bankman-Fried, Zhao’s departure represents a major change in the world of cryptocurrencies.

Binance is at a crossroads as a result of Zhao’s abrupt departure from his role as CEO. According to a statement, he said that he was experiencing mental distress as a result of his decision to stand down, but he highlighted that accepting responsibility for his actions was in the best interest of both himself and the Binance community.

Since at least 2018, the Department of Justice (DOJ) has been conducting an investigation against Binance and Zhao which has been going on for a considerable amount of time. In the course of the investigation, possible allegations of money laundering conspiracy and breaches of criminal penalties are being considered. Those who invest in cryptocurrencies have been anxiously anticipating the conclusion of this study since it would reduce a significant risk element that is hurting the market as a whole. As of late, there has been discussion over a resolution, with the Department of Justice apparently requesting more than four billion dollars from Binance as a component of the proposed settlement.

Not only are the recent events that have taken place at Binance crucial for the firm, but they also have wider-reaching ramifications for the cryptocurrency market and the community as a whole. An already turbulent market has been further exacerbated by the departure of Zhao and the investigation into Binance that has been conducted by the Department of Justice. The eventual settlement of these legal challenges, in conjunction with the selection of a new chief executive officer, has the ability to stabilize the situation and restore trust among investors and users.

Binance’s freshly acquired Chief Executive Officer, Richard Teng, offers a plethora of expertise to the company. In order to successfully navigate Binance through the issues it is now facing, his experience and skills in the financial and regulatory areas might prove to be quite insightful. The cryptocurrency community will be paying careful attention to Teng’s vision for the future of Binance since it may indicate a change in the way the business approaches regulatory compliance and market strategy because of the potential implications of this vision.

With regard to the cryptocurrency business as a whole, the scenario involving Binance and Zhao is illustrative of a bigger trend that is characterized by heightened scrutiny by regulatory organizations. The completion of Binance’s legal concerns with the Department of Justice has the potential to establish a standard for the manner in which other cryptocurrency exchanges and platforms interact with regulatory bodies. The need of complying with anti-money laundering legislation and other financial regulations inside the cryptocurrency field is brought into further focus by this situation.

The cryptocurrency sector is now experiencing a key moment as a result of the leadership shift at Binance and its continuing relations with the Department of Justice. With Richard Teng taking over as CEO, the corporation is confronted with a variety of obstacles as well as possibilities. Not only will the manner in which Binance navigates this era be vital for its survival, but it will also be crucial for the cryptocurrency industry as a whole, which is rapidly being scrutinized by authorities from across the world.

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