The US President Issues an Executive Order on Crypto

The US President Issues an Executive Order on Crypto

by | Mar 9, 2022 | Cryptocurrency, News

U.S. President Joe Biden instructed federal agencies to coordinate efforts in drafting cryptocurrency regulations through an executive order.

According to a fact sheet accompanying the order, this governmental effort to regulate the crypto industry focuses on consumer protection, financial stability, illicit uses, leadership in the global financial sector, financial inclusion and responsible innovation.

This executive order, which is the first to be solely focused on the growing digital assets sector, directs federal agencies in communicating their work better but does not specify the positions that the administration would like agencies to take.

The order also did not set out any new regulations that cryptocurrency companies must follow.

Senior administration officials spoke neutrally about digital assets, telling reporters that the growing cryptocurrency sector could threaten the U.S. financial system and national security. Criminals could use cryptocurrency to hide funds or avoid sanctions if there is not enough oversight.

The official stated that digital assets could also offer American innovation, competitiveness, and financial inclusion opportunities. “Innovation is key to America’s story, our economy, creating jobs and new opportunities, building new industries and maintaining our global competitive edge.”

The U.S. executive order that focuses on digital assets, has six key points:

  • protecting U.S. interests
  • protecting global financial stability
  • preventing illicit uses
  • promoting “responsible innovation,”
  • financial inclusion
  • U.S. leadership

Around 40 million Americans have reported to be trading or investing in cryptocurrency, which is 16% of the entire U.S. population.

An administration official cited crypto’s volatility as one reason that investors could be hurt. He pointed out that the price of bitcoin at the start of the COVID-19 epidemic was $10,300. The price reached a peak of $69,000 in November 2021, before plummeting again at the beginning of 2022.

The official stated that the President had proposed a whole-of-government holistic approach to understand not only macroeconomic risks but also the microeconomic risk to each individual, investor, and business that interacts with these assets.

The official stated that investor protection will be a key goal. Understanding the technology that underpins digital assets is one part of this effort. Part of this effort will also include understanding the weaknesses and areas that are not serving all consumers in the current financial system.

The official stated that the order recognises that the assessment of potential risks and benefits of digital assets must also include an understanding of how the financial system meets current consumer needs in an equitable, inclusive, and efficient manner.

The “antiquated” payment infrastructure could make it difficult for consumers to access services. This was especially true for cross-border payments, the official stated.

The future of money 

A section of the order directs U.S. Treasury Department officials to prepare a report about “the future money and payment system.”

The effects of cryptocurrencies on economic and financial growth will be observed to the extent that technological innovation may influence that future.

Last November’s President’s Working Group report called for Congress to pass a bill that more clearly defines federal bank regulators’ oversight power over stablecoins. Moreover, the Financial Stability Oversight Council could act in place of legislation.

Yellen mentioned FSOC’s role, saying that the financial stability watchdog would examine any potential risks posed in the cryptocurrency sector and “assess whether appropriate safeguards” are already in place.

Digital dollar

In the executive order, the U.S. will ask agencies to assess how they could issue a CBDC (central bank digital currency). 

This order is tied to the Federal Reserve’s ongoing efforts to study digital currency issuance. In recent months, branches of the central bank published numerous reports evaluating both technological and policy questions before a central bank digital money (CBDC).

According to the administration official, CBDCs are being considered by more than 100 countries. These use cases can include both domestic and international transactions.

The official stated that many of these countries were also working together to establish standards for CBDC design, and cross-border systems.

Bitcoin Prices Go Up as the Russian Economy Sinks

Bitcoin Prices Go Up as the Russian Economy Sinks

by | Mar 1, 2022 | Bitcoin, News

The price of Bitcoin (BTC) surpassed the $40,000 level on intraday charts, as the leading cryptocurrency rose more than 15% in one day, despite the ongoing war between Russia and Ukraine.

The two largest cities in Ukraine, Kyiv and Kharkiv, are under attack from the Russian side. However, the huge economic sanctions imposed on Russia seemed to have brought the largest single-day gain Bitcoin had seen in a year. Most of the crypto markets are green, and Ethereum (ETH), the second-largest cryptocurrency, has risen by more than 12%. 

All banks worldwide have pledged to block SWIFT from Russia. The U.S. Treasury Department has placed a ban on U.S. entities interfacing with Russia’s central banks. Foreigners are prohibited from Moscow’s stock exchange for fear of stock-market sell-offs.

Financial markets and war in Ukraine

Russian President, Vladimir Putin, initiated the conflict in Ukraine. The entire world is watching, and most nations are sending humanitarian aid and military equipment. However, observers fear that the almost 200,000 strong invading force that was defeated by the surprisingly strong Ukraine resistance will resort to more brutal tactics. As sanctions from the United States and Europe began to bite into Russia’s economy, the Russian and Ukrainian delegations held an initial peace talk at the Belarus border during the fifth day of the conflict.

Although nobody had expected Ukraine to fight off the invading forces for so long, with each day that passes, more economic sanctions and escalations are taking place. 

Mykhailo Fedorov, Ukraine’s Vice Prime Minister and Minister for Digital Transformation asked that all major crypto exchanges block Russian addresses during the fifth day of the conflict.

The U.S. and the European Union have removed certain Russian banks from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a messaging network that supports global financial transactions. This is the system that both Ripple and Stellar are trying to replace with lighting speed networks and significantly lower transaction fees. 

Is cryptocurrency a way to avoid sanctions?

These economic sanctions are without precedent in the modern economy, and some militate for adopting blockchain products to bypass some of these constraints. As investors see the potential for massive investments in decentralised finance (DeFi) after the Russian sanctions, Bitcoin and all other top altcoins are rallying today.

Due to the ban from the SWIFT payment system, Russian banks are now prohibited from interbank transactions with non-Russian entities. It is expected that the Russian banks will try to use crypto as a way of circumventing this sanction and other measures meant to isolate them from the global financial system.

Russian citizens are now unable to use their credit cards outside Russia, and the effects of the harsh sanctions on the Russian central bank had caused the ruble to drop 30% in one day, on February 28, when $1 was around 101 Russian Rubles. In an attempt to stop the price from plummeting even further, the Russian central bank froze the Russian exchange market and ordered Russian businesses to sell 70% of their foreign cash assets. Also, the central bank ordered brokers not to execute sell orders from foreign shareholders.

The DeFi space is still an innovation, but considering the strict Russian financial environment, it could help increase the number of people focusing on it. Military conflicts have always posed a huge threat to economies, and investors often wonder where else they can put their money. This looks like one of those smart bets, and DeFi could be one of the few solutions left to this fast degrading economy. 

Without a doubt, the sanctions imposed on Russia by Western powers are biting hard on the country’s economic system. Russia’s ruble is sinking.

Crypto Prices Declining as Russia Makes Plans to Invade Ukraine

Crypto Prices Declining as Russia Makes Plans to Invade Ukraine

by | Feb 22, 2022 | News

Major cryptocurrencies have declined on Monday, February 21, as Russia publicly recognised two pro-Russian republics in Eastern Ukraine. 

There are no concrete plans for a summit between Putin and U.S. President Joe Biden. However, 150,000 Russian troops are reported to have moved closer to the Ukraine border. 

Investors have become more cautious in recent weeks as they fear rising energy prices, sanctions from the U.S. and its European allies against Russia. This will likely impact a global economy already suffering from inflation and delays in supply chains.

Russia deployed troops in Ukraine

After recognising the two regions as independent on February 21st, Russian President Vladimir Putin directed the deployment of troops in the two eastern Ukraine breakaway areas. This accelerated a crisis that the West fears could lead to a major war.

These moves were condemned by the United States of America and the European Union. They promised new sanctions. However, it was unclear whether the West would view the Russian military action as a start of an invasion. In practice, the area was already controlled both by Russian-backed separatists as well as Moscow.

It is expected to see the U.S. announce new sanctions soon as a response to Russia’s decisions. 

Political tensions cause crypto prices to decrease

Although the price of Bitcoin has been steady throughout the week, some analysts predict a volatile few more weeks.

After a strong February during which we saw the cryptocurrency rebound from six-month lows at 2022’s beginning, BTC settled in the $41,000 to 45,000 range.

However, things changed as the Biden administration announced sanctions against the separatist Ukraine republics following Putin’s speech. The price per barrel of brent crude oil rose to $97, which represents an almost 4% increase.

Bitcoin, the most popular cryptocurrency, dropped to around $36,000 in the following hours. This is a drop of over 5.5% from the previous 24 hours. Ether, which is the second-largest crypto by market capitalization, lost 7% during the same time period. Other cryptos suffered from negative numbers.

The U.S. equity market was closed due to the National Presidents Day holiday. However, major European stock exchanges including the FTSE 100 and the DAX in Frankfurt, as well as the CAC 40 in Paris, finished in the red. Major Asian indexes lost ground Monday as well, including the Japanese Nikkei225, Hong Kong’s Hang Seng, and the Asia Dow.

Market analysts noticed that the sudden deterioration of diplomatic relationships can have a strong effect on financial markets. The cryptocurrency market was already sensible and the investor’s confidence, which was already shallow, has quickly disappeared. 

Some of the biggest losers are Theta Fuel (TFUEL), Gala (GALA), Harmony (ONE), Quant (QNT) and New (NEO), as they all lost over 16% in value in the last 24 hours. 

Other cryptocurrencies that are popular, Cardano and Solana, have fallen by around 12% in the past day. Memecoins such as Dogecoin and Shiba Inu have seen their value drop by 7-10% during this period.

Overall, the crypto market has fallen by 6% in the past day and is now valued at $1.67 trillion.

The chart is mostly in red and shows no signs of recovery.

Stocks extend losses as investors weigh likelihood of Russia invading Ukraine

Most financial markets experience downturns by the prospect of war between Russia, Ukraine and other countries. The increasing political tensions have shaken both the crypto and other commodities market. As investors waited for developments in Russia-Ukraine, worldwide shares keep losing value. 

Shares fell in all Asian markets. Tokyo’s Nikkei225 index fell 1.8% to 26,426, while Hong Kong’s Hang Seng lost 3.29%, to 23,575. The Kospi in Seoul fell 1.69% to 2,695.80. The Shanghai Composite index also fell 1.44%, to 3,440.

S&P 500 e-mini futures slid 1.81%. Dow Jones industrial average futures e-mini fell 1.37%, while Nasdaq 100 futures e-mini dropped 2.65%. The stock market was closed in the US due to the President’s Day holiday. 

The Couple Responsible for the 2016 Bitfinex Hack Got Arrested

The Couple Responsible for the 2016 Bitfinex Hack Got Arrested

by | Feb 15, 2022 | News

On February 8, 2022, the U.S. Justice Department announced that it had seized over $3.6 billion worth of stolen Bitcoin. They arrested a couple who were accused of laundering the cryptocurrency stolen in the Bitfinex heist six years ago.

Ilya Lichtenstein (34) and Heather Morgan (31) were charged with conspiring to launder the 119,754 Bitcoin stolen in 2016 from Bitfinex, one of the largest cryptocurrency exchanges in the world.

The capture of the lost funds, at the beginning of February 2022, make it the largest financial seizure of all time – considering the price of one Bitcoin at around $40,000. 

An official from the Justice Department declined to comment on whether Mr Lichtenstein or Ms Morgan were involved in the 2016 Bitfinex theft.

What happened during the 2016 Bitfinex hack?

Over the years, many crypto thefts highlighted the security flaws in the cryptocurrency’s relatively new world. Even though most of the funds were eventually recovered, they still led to the loss of large amounts of digital currency. Another important aspect of these hacks is the news itself, which causes crypto to lose significant value. 

The 2016 Bitfinex breach was one of many cryptocurrency exchange hackings and it resulted in the theft of 119,754 Bitcoins. 

After Bitfinex, one of the largest crypto exchanges in the world was hacked, the price of Bitcoin’s plunged around 20%.

The US court documents prove that Bitfinex’s hackers sent 2,000 transactions, adding up to 119,754 BTC, to a cryptocurrency wallet that belonged to Ilya Lichtenstein. The documents also show that around 25,000 BTC was transferred from that wallet over the past five years. The funds underwent a series of complicated transactions in an attempt to conceal their true origin. 

However, thanks to the underlying blockchain technology, the funds were traced. Part of those funds ended up in accounts owned by the two defendants, while some were spent on gold, NFTs and gift store certificates. 

On January 31, 2022, the law enforcement officers gained access to Lichtenstein’s wallet, including his encrypted files stored in a cloud account. This led investigators to confiscate 94,636 Bitcoins that were still in that wallet, which are now worth around $3.6 billion. In 2016, when the hacking took place, the 119,754 BTC stolen were worth approximately $71 million. As of 2022, the amount would be worth over $4.5 billion. 

The couple was released on bond

On February 8, 2022, Mr Lichtenstein and Ms Morgan appeared in Manhattan’s federal court. The judge released them on bond at $5 million for Mr Lichtenstein’s case and $3 million for Ms Morgan’s case. There was no response on their part. 

Ilya Lichtenstein has American and Russian citizenship and describes himself as a tech entrepreneur. According to her LinkedIn profile, Heather Morgan is a serial entrepreneur. According to the complaint, the couple is accused of conspiring to defraud the United States.

After the arrest, the deputy attorney general stated that this outcome only comes to prove that cryptocurrency does not provide a safe haven to criminals. Despite the defendants’ efforts to launder the stolen funds, digital anonymity couldn’t be preserved. The police managed to follow the stolen Bitcoin each time it was moved to a new wallet.

Cryptocurrency is not for the criminals

As more Americans are buying and selling cryptocurrency like Bitcoin, regulators have placed some large American exchanges under their official supervision.

However, cryptocurrencies are moved through decentralized computer networks, which aren’t under the control of any government or central entity. As such, most trading occurs on unregulated exchanges, like Bitfinex. These exchanges give little information to consumers about their operations.

These security issues that keep threatening the world of cryptocurrency exchanges, can only weaken consumer confidence and slow down widespread adoption. Mt. Gox, the first Bitcoin exchange, got shut down after it was hacked in 2014 and $500 million were stolen. 

A music festival is offering NFTs as lifetime passes

A music festival is offering NFTs as lifetime passes

by | Feb 3, 2022 | News, NFTs

Coachella, the famous US music festival, has launched lifetime festival passes. But the truly surprising news is that these passes will be sold as NFT. Coachella has partnered with FXT.US to create the Coachella NFT marketplace. The NFTs will be put on sale on February 4, and need to be redeemed by February 25, 2022. 

What is an NFT?

Non-fungible tokens, or NFTs, are unique digital items, that are registered on a blockchain (such as Ethereum, Polygon, Terra, Solana, Tezos and any other blockchain that supports NFTs) in order to retain ownership of that item. Unlike cryptocurrency, NFTs are not fungible, and cannot be exchanged for another, as each one has a different meaning and potential value. 

The main advantage of NFTs is transparency. Think of NFTs are items registered on a public ledger, where anyone and everyone can check the exact trading history of that item. All dates and prices for previous sales are fully disclosed and all events are transparent. 

The consent of NFTs has been around since 2012 when the concept of coloured coins on the blockchain emerged. 

The first digital artist to create an NFT was Kevin McCoy, in May 2014. He minted a GIF image, of a hypnotizing collection of shapes that keep pulsating, entitles “Quantum”. 

The NFTs continued to evolve and take different shapes and have different purposes. In 2021, the market exploded, as it grew from $94.9 million to over 24.9 billion, considering total sales volumes. 

The concept of NFT became popular for almost everyone in the digital space, from big brands such as Coca Cola to local digital artists. 

What is an example of an NFT?

NFTs can be almost anything that can have a digital representation. The tokenisation process is required to register that digital item on the blockchain and actually turn it into an NFT. 

While NFTs were mostly used for digital art and some in-game assets at the beginning, the concept is now rapidly expanding. NFTs can be songs, music albums, digital art, in-game digital assets, assets with real-life benefits, and more. 

The key to creating and using NFTs is that these tokens can be traded. Gamers, for instance, are now able to make a profit from their gaming efforts. 

Coachella festival NFTs 

Coachella is a huge California-based music festival. It started in 1999 and it has grown tremendously since then. 

As of 2021, Coachella will introduce NFTs to grant lifetime access to the festival. This is a limited 10-item NFT collection, which features 10 different keys, to offer VIP access to the festival grounds. 

Coachella offers three different NFT collections for sale:

  • Coachella Key Collection
  • Sights and Sounds Collection
  • Desert Reflections Collection

The 3 Coachella NFT collections

The Coachella Keys Collection will be auctioned by the company. This collection includes 10 NFTs that grant holders lifetime tickets to Coachella. The token holders will receive passes to Coachella each year and access to Coachella-produced virtual experiences forever. NFTs can also be purchased to get special perks at the 2022 festival, such as front row access and a celebrity chef dinner.

It’s not surprising that the festival is getting into the NFT craze. In November 2021 Coachella parent AEG renamed the LA arena, Staples Center into Crypto.com Arena. Other traditional companies have also shown that there is plenty of money to make by attaching physical products or services to digital goods. NFT resales can also generate profits for the original seller which could prove to be a bonus for permanent items such as lifetime passes. In the case of these Coachella NFTs, the festival, artists who have created art installations and designers will be paid a royalty if the NFTs are sold again.

The other two collections feature never before heard soundscapes and posters. Owners can redeem their NFTs for a physical copy.

The Sights and Sounds Collection include 10 digital collectables, of which a total of 10,000 will be minted and each one can be bought for $60. 

The Desert Reflections Collection represents 10 posters from Coachella’s history. Buyers will receive a random NFT of the collection. Only 1,000 items will be minted and the floor price is $180. 

Coachella will donate a portion from NFT sales to HelpDirectly and Lideres Campesinas.

Three collections of NFTs will be available for sale starting February 4th.

NFTs and digital tickets

Digital tickets are one of the top potential use cases for NFTs. In 2021, the NFL announced that it will add NFTs to tickets. However, those NFTs will not grant you access to any football event. The NFL has eliminated paper tickets from the 2021 season, so digital ticketing and resales can be done without NFTs.

And there are other companies that have also tied NFTs to physical products or real-life experiences. For example, the Bored Ape Yacht Club gives exclusive access to parties. Companies ranging from Gap up to Adidas all have sold NFTs that include physical merchandise.

Is the ETH Stolen From Crypto.com Accounts Laundered via Tornado Cash?

Is the ETH Stolen From Crypto.com Accounts Laundered via Tornado Cash?

by | Jan 18, 2022 | Ethereum, News

Crypto.com has stopped withdrawals on the platform for a few hours to investigate suspicious withdrawals. Supposably, the stolen funds have then been laundered through the Ethereum coin mixer, Tornado Cash. 

Crypto.com suspends withdrawals 

On January 17, a new threat has been detected on one of the most popular cryptocurrency exchanges. According to the official Crypto.com Twitter account, the platform disabled withdrawals for all users, to investigate a suspicious activity reported by a group of users. 

While the exchange didn’t give many details about the “unauthorized activity” that has been reported, it did mention that all funds are safe and that this is a mere safety precaution. 

The exchange sent out an update several hours later advising users to sign back in and reset their two-factor authentication (2FA). A few hours later, at 4 pm UTC time, CEO Kris Marszalek tweets that final checks and that withdrawals will be resumed within the next 30-60 minutes.

At around 5:40 pm UTC, Crypto.com announced that users can now withdraw their funds and that all funds are safe, but some delays can be expected. 

While safety is a big concern to custodial cryptocurrency exchanges, including Crypto.com, many investors are suspicious when it comes to such news. During periods of high volatility, crypto exchanges are known to suspend withdrawals or other services when there is a spike in demand. One such instance was in November 2021 when Binance stopped all crypto withdrawals because of a large backlog.

Were funds stolen from Crypto.com?

Dogecoin founder, Billy Markus, was the first to notice on-chain suspicious activity. In fact, there was a pattern in transactions with one wallet receiving multiple transactions. He also asked if the funds were secure and if it was an internal job.

While Crypto.com claims that all funds are secure, many users dispute this claim.

Ben Baller, a crypto enthusiast and famous jeweller, claimed his account was hacked and 4.28 ETH (~$15,000) were stolen. The theft occurred despite the fact that he had a 2-factor authentication. Others have had the same experience and many pointed out that they lost part of their assets from their Crypto.com accounts.

The users have claimed to be missing digital assets from their accounts, including Shiba Inu, Dogecoin, Ether and Bitcoin. Users also noted that even though withdrawals were halted, assets were still disappearing and transactions were being processed.

Customer support has been contacted by a user who claimed that he lost his Bitcoin during the event. However, the exchange has yet to confirm that some users were affected by the incident.

But none of the official channels mentioned anything about this and Crypto.com underlined that all funds remain safe but has introduced new procedures to increase security for all accounts. Users will now need to sign back into the Crypto.com App or Exchange accounts and reset their 2FA.

Crypto stolen from Crypto.com is laundered via Tornado Cash

According to on-chain data, the $15 million worth of ether (4600 ETH), stolen from Singapore-based cryptocurrency exchange Crypto.com, is currently being laundered by Tornado Cash, an Ethereum Mixer.

Tornado Cash, an Ethereum mixer protocol, was launched in 2020 and is a service that promises to increase transaction privacy by obscuring any on-chain link between source and receiver of ether. Mixer protocols or cryptocurrency tumblers are sometimes used to conceal identities. However, they are also used to launder funds related to organized crime.

Peck Shield first noticed on-chain data suggesting that the 4,600 ether is being sent through a mixer in batches of 100.

Roman Storm, Tornado Cash’s co-founder, previously stated that the protocol works with regulators. Tornado Cash V2 includes a cryptographic notice in the transaction history for ether sent through its pipes. This note can be used to establish fund provenance. Storm stated that it was very important for us to comply with the regulations and that they’re different from other crypto mixers – “We do what feels right.”

It has been speculated that the total value of lost funds is around $15 million, but some speculated that it’s probably much more. However, some of the funds seem to have found their way back to their owners. 

crypto com stolen funds 2

We’ll probably have to wait and see if all was a big coincidence or if Crypto.com account really did get scammed.