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Former Banker Charged with Crypto Investment Fraud

by Blockchain NewsApril 12, 2023

In a recent case in the federal court in Brooklyn, New York, a former investment banker and registered broker named Rashawn Russell has been charged with defrauding numerous investors. According to court documents, Russell misled investors by promising profits on fake cryptocurrency investments and then used the funds he received to finance his personal lifestyle. It is alleged that Russell took advantage of the growing interest in cryptocurrency investments to deceive multiple investors into reinvesting their fiat savings into cryptocurrencies. He promised significant or even “guaranteed” returns on their investments, but instead used their money to fund his own lavish lifestyle.

The court documents indicate that Russell’s fraud involved a scheme where he would convince investors to invest their money in cryptocurrency, promising high returns. However, rather than investing the money as promised, Russell is accused of diverting the funds to his personal accounts to finance his lifestyle. The documents also reveal that Russell made false statements to investors, providing them with misleading information and financial reports to give the impression that their investments were profitable.

The alleged victims of Russell’s scheme suffered significant losses as a result of his fraud. According to the court documents, Russell’s scheme caused his victims to lose over $1 million. The victims include a retired police officer, a retired teacher, and a small business owner. Russell is facing multiple charges related to securities fraud, wire fraud, and money laundering.

This case highlights the risks of investing in cryptocurrency and the importance of due diligence when making investment decisions. Investors must be wary of promises of high returns and conduct thorough research before investing their money in any investment opportunity. The case also emphasizes the need for regulatory oversight and enforcement to protect investors from fraudulent activities.

In conclusion, Rashawn Russell, a former investment banker and registered broker, has been charged with defrauding investors with fake cryptocurrency investments and misappropriating funds to finance his lifestyle. This case serves as a reminder of the risks associated with investing in cryptocurrency and the importance of conducting due diligence before making any investment decisions. It also highlights the need for regulatory oversight and enforcement to protect investors from fraudulent activities.

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Web3 Revolutionizes Startup and Investor Landscape

by Blockchain NewsMarch 23, 2023

At Paris Blockchain Week 2023, a panel of experts in Web3 gathered to discuss the ways in which this new paradigm is transforming the startup and investor landscape. The panel discussion titled “Crypto, Culture, and Capital: How Web3 is Changing the Game for Startups and Investors” focused on the opportunities and challenges that come with the emergence of Web3.

Web3 represents a fundamental shift from the traditional Web2 paradigm, with new opportunities for startups and investors. The panelists discussed how Web3 startups are different from Web2 startups, with different cultures shaping and affecting the various ecosystems.

Laurenz Apiarius, founder and managing partner of Blockwall Digital and Blockwall Capital, noted that there are positive and negative effects of the Web3 revolution. While there have been awesome milestones achieved by Web3 entrepreneurs, there are also negative effects resulting from entrepreneurs who take advantage of the Web3 narrative. Some entrepreneurs overestimate their valuation, failing to deliver on their promises, which harms investors who lose money in the process.

Amos Meiri, founding partner of Node Capital, emphasized the need for investors to understand the technical, legal, and marketing aspects of the projects being built. Meiri stated that it is crucial for investors to support entrepreneurs in the right way, helping them navigate the challenges of the Web3 landscape.

Igneus Terrenus, head of partner relations of BitDAO, spoke about the decentralized autonomous organization (DAO) model of Web3 startup governance. DAOs are organizations that operate through rules encoded as computer programs, with decisions made through a consensus mechanism. Terrenus noted that while the DAO is not a perfect model, it offers exciting opportunities for startups and investors. DAOs can help to reduce the need for intermediaries, increasing efficiency and reducing costs.

However, the success of DAOs depends on incentivization and education of stakeholders. DAO stakeholders need to be incentivized to participate in the decision-making process, and educated about the rules and processes involved.

The panelists also discussed the challenges that entrepreneurs face in navigating the Web3 landscape. Web3 startups require a deep understanding of technology and legal frameworks, which can be daunting for many entrepreneurs. In addition, the lack of clear regulatory frameworks for Web3 startups can make it difficult for entrepreneurs to operate in a compliant manner.

Despite these challenges, the panelists were optimistic about the potential of Web3 to transform the business landscape. With its disruptive potential and new opportunities for startups and investors, Web3 represents a major shift in the way we think about business and innovation.

The emergence of Web3 has also led to a renewed focus on building community resilience to crises through mutual aid. The Web3 paradigm emphasizes decentralized, peer-to-peer networks that enable individuals and organizations to collaborate and support each other. This can be seen in the rise of decentralized finance (DeFi) platforms that allow individuals to lend, borrow, and invest in a decentralized manner, without the need for intermediaries.

Overall, the panel discussion highlighted the exciting opportunities and challenges that come with the Web3 revolution. With its potential to disrupt traditional business models and provide new opportunities for startups and investors, Web3 is set to transform the way we think about innovation and entrepreneurship.

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Tagged : Culture / Daos / Investors / News / Startups / Web3

Investors Rally to Support Silicon Valley Bank Amidst Possible Closure

by Blockchain NewsMarch 12, 2023

Silicon Valley Bank (SVB) has been a major player in the tech industry for over 40 years, providing banking and funding services to countless startups and established companies alike. However, recent reports have indicated that the bank may be facing financial difficulties and could be winding down operations in the near future. This news has sent shockwaves throughout the industry, as many tech companies rely heavily on SVB for their banking needs.

In response to these concerns, a group of over 125 venture capitalists and investors have banded together to support SVB and limit the potential fallout from the bank’s collapse. The investors, which include some of the biggest names in the industry such as Sequoia Capital and General Catalyst, have signed a statement pledging their support for the bank and offering to help it find new sources of capital if necessary.

The statement reads in part, “We, the undersigned venture capitalists and investors, recognize the critical role that Silicon Valley Bank has played in the growth and success of the tech industry. We believe that it is essential to support SVB during this challenging time, and we stand ready to assist in any way we can to ensure that the bank continues to serve the needs of tech companies for years to come.”

The investors’ support for SVB comes at a time when many tech companies are already struggling due to the ongoing COVID-19 pandemic and its economic fallout. Losing access to funding and banking services from SVB could be a major blow for many companies, and could even lead to some going out of business altogether.

To avoid this outcome, the investors are offering to help SVB find new sources of capital, whether through traditional financing or alternative methods such as crowdfunding or community fundraising. They also plan to work with the bank to explore new business models and revenue streams that can help it remain viable in the long term.

Despite the challenges that SVB is currently facing, the bank remains a critical component of the tech industry and has a strong track record of supporting startups and other companies in their early stages. By rallying around SVB and offering their support, these investors are demonstrating their commitment to the industry as a whole and their belief that together, they can weather even the toughest storms.

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Tagged : Collapse / Investors / News / SILICON VALLEY BANK / TECH COMPANIES / VENTURE CAPITALISTS

Grayscale CEO Calls on SEC to Protect Investors

by Blockchain NewsMarch 4, 2023

Grayscale Investments’ CEO Michael Sonnenshein has called on the United States Securities and Exchange Commission (SEC) to protect Grayscale investors by returning the true asset value to them. In a recent interview on the popular podcast “What Bitcoin Did” hosted by Peter McCormack, Sonnenshein stated that he “can’t imagine” why the SEC “wouldn’t want” to protect Grayscale investors by approving the Grayscale Bitcoin Trust (GBTC) as a spot Bitcoin exchange-traded fund (ETF).

Sonnenshein explained that the SEC acted arbitrarily by denying approval for GBTC to be a spot Bitcoin ETF while approving Bitcoin Futures ETFs. He added that the SEC violated the administrative procedures act, which ensures that the regulator doesn’t show “favoritism” or act “arbitrarily.” According to Sonnenshein, Grayscale is currently suing the SEC over the denial of its initial application, and a decision on the case could be reached by fall 2023.

If GBTC were approved as a spot Bitcoin ETF, there is a “couple billion dollars” of capital that would immediately go back into investors’ pockets, on an “overnight basis,” as the fund would “bleed back” up to its net asset value (NAV). Sonnenshein explained that this is due to GBTC currently trading at a discount to its NAV, but if it were to convert to an ETF, there would be an “arbitraged mechanism” embedded, and there would no longer be a discount or a premium.

Grayscale has over a million investor accounts, with investors worldwide counting on the firm to “do the right thing for them.” Sonnenshein “can’t imagine” why the SEC wouldn’t want to “protect investors” and “return that value” to them. He added that Grayscale isn’t going “to shy” away from the fact that it has a “commercial interest” in this approval.

This comes after the SEC filed a 73-page brief with the U.S. Court of Appeals for the District of Columbia in December 2022, outlining its reasons for denying Grayscale’s request to convert its $12 billion Bitcoin Trust into a spot-based Bitcoin ETF in June 2022. The SEC based its decision on findings that Grayscale’s proposal did not sufficiently protect against fraud and manipulation. The agency had made similar findings in several earlier applications to create spot-based Bitcoin ETFs.

Grayscale is a digital currency investment firm that offers a range of investment products, including the Grayscale Bitcoin Trust, which is designed to provide investors with exposure to the price of Bitcoin without the challenges of buying, storing, and safekeeping Bitcoin directly. The trust is listed on the OTCQX market and is available to both accredited and non-accredited investors. GBTC was launched in 2013, and as of January 2022, it held over $30 billion in assets under management. Grayscale’s Bitcoin Trust is one of the most popular ways for investors to gain exposure to Bitcoin, and the firm has been at the forefront of the movement to bring Bitcoin to the mainstream.

The SEC has been hesitant to approve Bitcoin ETFs, citing concerns about fraud, manipulation, and the lack of regulation in the cryptocurrency market. In the past, the SEC has rejected several proposals for Bitcoin ETFs, citing concerns about market manipulation and insufficient investor protection. However, the agency has recently shown a more favorable attitude toward Bitcoin, with several Bitcoin Futures ETFs receiving approval.

In the case of Grayscale’s GBTC, the SEC has raised concerns about the trust’s structure and the potential for market manipulation. Grayscale’s proposal to convert GBTC into a spot-based Bitcoin ETF was denied in June 2022, with the SEC citing concerns about the lack of regulation in the Bitcoin market and the potential for market manipulation.

Grayscale has challenged the SEC’s decision, arguing that the agency acted arbitrarily and violated the administrative procedures act. Grayscale’s CEO, Michael Sonnenshein, has been vocal in his criticism of the SEC’s decision, arguing that it has hurt investors by preventing them from realizing the true value of their investment in GBTC.

The case is currently making its way through the U.S. Court of Appeals for the District of Columbia, and a decision is expected by fall 2023. If Grayscale is successful in its challenge, it could pave the way for other Bitcoin ETFs to be approved, opening up a new avenue for investors to gain exposure to Bitcoin.

Overall, the Grayscale-SEC dispute highlights the challenges facing regulators as they try to balance investor protection with the need to foster innovation in the cryptocurrency market. As the market for digital assets continues to grow, it is likely that we will see more clashes between regulators and industry participants as they try to navigate this rapidly evolving landscape.

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Tagged : Bitcoin / Etf / Grayscale / Investors / News / SEC

69 % Female Crypto Investors in U.S. Adopt Holding Strategy, Survey Shows

by Blockchain NewsOctober 25, 2022

Female Americans continue to be resilient as cryptocurrency owners, despite the broad market turmoil being experienced, according to a survey by global crypto financial services company BlockFi.

Through the latest edition of the Real Talk survey, BlockFi suggested that female crypto investors on American soil had a long-term outlook because they had adopted the buy-and-hold strategy. Per the report:

“When asked specifically what best describes their crypto investment style, the majority of female crypto owners (69%) said they hold crypto and remain hold-only.”

Flori Marquez, BlockFi’s founder and COO, added:

“The crypto landscape and the number of players look completely different than it did six months ago when we last issued this survey and yet the faith in the crypto markets and its potential as a long-term investment strategy remains. This resiliency is extremely promising.”

On the other hand, interest in this asset class has also not significantly decreased among female Americans. BlockFi noted:

“More than one in five women (22%) still intend to buy crypto in the next 12 months, down slightly from 28% the year prior.”

Some of the reasons why female investors in America are attracted to cryptocurrencies is because they believe it’s an inflationary hedge. Per the survey:

“When asked, one in five women believe crypto to be a good hedge against inflation. Even more, 20% of Gen Z women noted Bitcoin as the best long-term investment when presented with a list of options including individual stocks and real estate.”

Nevertheless, the study revealed a generational gap because one in ten women on American soil chose crypto as their first investment.

Meanwhile, an Ipsos survey showed that the intention of investing in cryptocurrencies or using them as a payment option was higher among Americans compared to Canadians, Blockchain.News reported.

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Tagged : America / Blockfi / Cryptocurrency / FEMALE / Investors / Research / United States / Women in Blockchain

3 Good Reasons Why Investors Should be Optimistic About the Future of Crypto

by Blockchain NewsOctober 10, 2022

The digital currency ecosystem that was once presented as a mystical industry is now one that is being widely spoken about in the media, and everyone is jostling to take a bite of it.

Realistically, the cryptocurrency industry has grown remarkably since Bitcoin (BTC) was first introduced by Satoshi Nakamoto more than 13 years ago.

The industry has passed through unique iterations and evolution, some of which have attracted new users into the ecosystem.

While it will be a major oversight if we fail to highlight how the interest of regulators in the ecosystem has peaked over the past few years, it is definitely worth noting that innovators in the space are introducing new solutions that are not fitting into the current context of extant laws.

This is to show that the industry’s evolution, as presented by proponents, is still in its infancy, irrespective of the milestones that have been covered. Despite the industry taking significant hits by reason of the crypto winter which has led to bouts of bankruptcies, job cuts, and top executive resignations, the market still shows resilience, one that sends new signals for futuristic investors to hinge their bets on.

Amidst the ups and downs the market has experienced in recent times, here are the top three reasons to stay positive as the market journeys onto more maturity.

The influx of Institutional Money

The influx of institutional money has shown how well the industry is maturing. With Venture Capital (VC) firms showing interest in protocols building innovative solutions in the ecosystem with deep capital injections, innovators can be sure that the monetary backing is there to churn out solutions that can help drive massive adoption of blockchain and crypto-related technologies.

The major VCs injecting liquidity into the space include but are not limited to Andreessen Horowitz (a16z), Paradigm Capital, Binance Labs, and Tiger Global.

Ongoing Industry Metamorphosis

As it stands, the crypto and blockchain industry is undergoing a very unique metamorphosis as it concerns how innovators are churning out new solutions.

It is worth noting that the industry is still shaping up, and while the world is yet to get the best of Decentralized Finance (DeFi) as a primary financial offshoot of the ecosystem, we have seen the advent of Non-Fungible Tokens (NFT) and the broad-based marketplace and use cases that have been ushered in by it.

At this pace, we may see the introduction of more yet-to-be-seen protocols, most of which will be branded as a subsect of the Metaverse or Web3.0. The thought that more innovations that can make internet usage and life easier are major selling points for investors.

Automated Industry Self-Purge

While this may be counter-intuitive, the advent of crypto winters is good for the industry as it helps fish out companies whose business models are hinged on unsustainable practices or bad management.

Since its inception, the crypto industry has undergone a series of crypto winters and at each point, protocols and platforms whose ideals are not consistent with what can make the industry thrive are dropped, and they pave the way for the most resilient protocols to serve users.

For investors, knowing the ecosystem has a way of fishing out the bad projects is a certainty that investments in protocols that survives the crypto winters can turn a massive bet in the near future.

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Tagged : Bitcoin / Blockchain / Crypto / Investors / Metaverse / Opinion / Web3

The Merge: Why Ethereum Investors Must Remain Cautious as Bellatrix Upgrade Goes Live

by Blockchain NewsSeptember 6, 2022

The Bellatrix Upgrade is set to go live on the Beacon Chain of the Ethereum Network today as the entire community prepares for the forthcoming Merge of the current Proof-of-Work (PoW) chain with the Proof-of-Stake (PoS) model.

Over 2 years, the process of migrating Ethereum from the PoW chain to the new one has been in the works. Developers, particularly those from the Ethereum Foundation, have committed quite a number of resources and efforts to the Merge, which is now slated to go live in the mainnetdays’ time.

By design, the current upgrade of Bellatrix is a pivotal event that will set the pace for the Merge. Many investors and Ethereum users are preparing for this event in a whole number of different ways as expectation mounts.

Ethereum miners have a different agenda. Knowing the ‘Difficulty Bomb’ that will be introduced as soon as the Merge is complete, making mining very hard, more computing power is being plugged in at this time to harvest as much as possible now. This has recently pushed the Ethereum mining difficulty to a new All-Time High (ATH).

Investors Need to Watch Out

That the Ethereum Foundation came out to debunk some myths about this forthcoming merge event is a sign that expectations might be too bogus and might not be met.

For now, we know the new PoS protocol will only be more energy-efficient and not necessarily make transactions faster or gas fees cheaper. Investors’ expectations that the new Ethereum protocol will lead to a massive upsurge might not also be correct, even though this price action is hard to predict.

Two key factors may negatively impact the price of Ethereum post-merge. One is that the miners dump some of their coins in protest, as the new protocol will generally make them obsolete. The second is if there is a hard fork with an accompanying token that now catches the interest of many investors, either retail or institutional.

These two events can weigh down the price of Ethereum, and as such, investors will need to take caution when making their investment bets at this time.

At the time of writing, Ethereum was changing hands at $1,634.99, up 3.93% during the Asia trading session, per data from CoinMarketCap.

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Tagged : BELLATRIX UPGRADE / Crypto / Ethereum / Investors / Market / Merge

ADDX Introduces Cash Management Tool ADDX Earn

by Blockchain NewsAugust 29, 2022

ADDX has introduced a cash management tool for investors, which consists of a solution that aims to withstand short-term volatility while preserving capital.

The new ADDX Earn will provide one more option to investors with excess funds in their wallets to make interest, instead of their funds sitting idle, according to the statement.

Per the private market exchange company, ADDX Earn has been built to boost investors’ returns deposited in their ADDX wallets and has not yet decided on which private market product to take part in. It added that some of the idle capital may also have come from previous investment earnings on ADDX.

The plan of the new management tool is also to beat short-term bank deposit rates by providing higher target returns for products under ADDX Earn. Many investors usually store undeployed capital in short-term bank deposit rates.

“The first two funds to be launched under the ADDX Earn umbrella are by Lion Global Investors, a fund manager that is a part of the OCBC Group,” ADDX said.

The two funds named the LionGlobaI SGD Enhanced Liquidity Fund and LionGlobaI USD Enhanced Liquidity Fund, are diversified over a range of issuers and tenors through investments in high-quality portfolios of debt instruments.

‘The two funds have weighted average portfolio durations of less than a year, which gives Lion Global the flexibility to adjust portfolio allocations in response to changing interest rates and market conditions,” ADDX said.

According to ADDX, investments can be redeemed on a weekly basis.

The funds are also targeting low-volatility assets. These are being done as they are “well-suited” for the current market environment that has seen increased volatility in other asset classes, ADDX announced.

Interest is accrued daily for both funds. As of July 31, the LionGlobaI SGD Enhanced Liquidity Fund had a weighted average yield to maturity of 2.22% p.a., while that of the LionGlobaI USD Enhanced Liquidity Fund was 2.38% p.a. These rates change monthly depending on the prevailing interest rate environment and the underlying assets held by the funds.

Gerard Lee, Chief Executive Officer of Lion Global Investors, said, “our liquidity funds are typically used by financial advisers and digital players. We are therefore delighted to have a private market exchange use our liquidity funds to provide a solution for their investors’ excess cash.”

The SGX-backed ADDX was founded in 2017. It is currently serving individual investors from 39 countries across the Asia Pacific, Europe and the Americas – except the US.

The company has started using blockchain and smart contract technology to reduce manual interventions in issuing, custody and distributing private market products.

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Tagged : ADDX / Bitcoin / Blockchain / Crypto / Earn / Exchanges / Interest / Investors

46% of American Crypto Investors Says it Has Done More Worse than Good – Report

by Blockchain NewsAugust 28, 2022

Investing in the digital currency ecosystem has earned many of the early comers a fortune but the narrative is changing for those embracing the nascent industry now.

According to a recent survey from the Pew Research Center, as many as 16% of US adults have invested in cryptocurrencies, particularly the top two coins, Bitcoin (BTC) and Ethereum (ETH).

According to the report, 46% of these investors said that their investments have done worse than they had expected. Of the surveyed number, exactly 16% said their investments have yielded a better than expected return while 31% said their investments in the volatile asset class had remained just as they had expected. Overall, 8% of the respondents are not sure if their investments are performing well or not.

The broad-based slump in the digital currency ecosystem began with the crash of Terra-LUNA and the bankruptcies of major digital currency companies like Celsius Network and Voyager Digital resulted in major losses for investors.

Some respondents to the Pew Research have never invested in digital currencies, despite being well aware of what crypto is per the growing publicity in mainstream media. According to the published data, a massive 71% of respondents say they have never invested in the asset class despite having heard at least a little about it.

Besides pointing out the potential profitability in the industry, those who have invested in the asset class have a lot of divergent views when it comes to the reasons why they chose to invest in the assets. While 78% said they invested in the asset because they needed an alternative way to invest, about 54% of the respondents acknowledged that digital currencies offer an easier way to invest than other available options.

The United States of America is an advanced country, and while the use of crypto is very robust in the country, other developing nations with devaluating currencies are recording a more aggressive pace of adoption.

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Tagged : Bankruptcy / Crypto / Investors / News

46% of American Crypto Investors Says it Has Done Worse than Good – Report

by Blockchain NewsAugust 28, 2022

Investing in the digital currency ecosystem has earned many of the early comers a fortune but the narrative is changing for those embracing the nascent industry now.

According to a recent survey from the Pew Research Center, as many as 16% of US adults have invested in cryptocurrencies, particularly the top two coins, Bitcoin (BTC) and Ethereum (ETH).

Image source: Shutterstock

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Tagged : Bankruptcy / Crypto / Investors / News