Meta’s shares dropped 15% in after-hours trading following announcements in April of plans for significant investment in AI, alongside a weaker revenue outlook and continued losses in its metaverse division, Reality Labs. The company anticipates its expenses will soar to between billion and billion for the fiscal year, attributing the increase to higher […]
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NYSE Considers 24-Hour Trading Model in Response to Crypto Market Trends
Cryptocurrency markets operate continuously, trading every day of the week, around the clock. In a similar vein, reports indicate that the New York Stock Exchange (NYSE) is exploring the possibility of shifting to 24/7 operations. The data team at NYSE has conducted a survey among its investors, revealing a strong interest in the availability of […]
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Japanese Firm Metaplanet to Add $659M in Bitcoin to Its Treasury, Shares Soar 90% in Response
According to the latest figures, Metaplanet, a company listed on the Japanese stock exchange, witnessed its share price soar by nearly 90% in just one day. This significant jump came on the heels of the company’s announcement regarding its intention to incorporate 1 billion yen in bitcoin into its balance sheet. Metaplanet Joins Forces With […]
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Crypto-Terrorism Concerns? Senator Warren And 100 Lawmakers Push Biden For Swift Response
In the middle of escalating tensions between Israel and Hamas, over 100 legislators, led by Senators Elizabeth Warren and Roger Marshall and Representative Sean Casten, have issued a bipartisan note urging the Biden administration to address alleged close relations between crypto and terrorism.
The lawmakers express alarm over reported evidence suggesting that Hamas successfully evaded US sanctions, acquiring millions of dollars through crypto assets. They are now pressing the administration to clarify its strategy for tackling this critical national security threat.
Lawmakers Sound Alarm On Crypto-Financed Terrorism
The bipartisan letter, addressed to National Security Advisor Jake Sullivan and Brian Nelson, Under Secretary for Terrorism and Financial Intelligence at the Department of the Treasury, highlights the concerns surrounding Hamas and Palestinian use of crypto funding.
The letter states that between August 2021 and June of the following year, these organizations allegedly raised over 0 million in digital assets, with millions being transferred between them.
The lawmakers stress the urgency of the situation, given the danger posed by the financing of militant organizations, and call on the Biden administration to provide details about its plan to prevent the use of crypto for terrorism financing.
In their letter, the lawmakers cite an article from the Wall Street Journal, which reports that researchers studying Hamas’s financing allegedly confirm that crypto remains one of several tools employed by the group to raise funds.
While it has not been determined whether the crypto received by Hamas directly financed the October 7th terrorist attack on Israel, the group’s explicit solicitations for crypto have left no doubt about their intentions.
Furthermore, the lawmakers highlight that both the Israeli and US governments have previously warned about the threat posed by crypto in the fight against terrorism. Israel has even seized crypto assets from terrorist organizations like Hamas and Hezbollah.
However, experts believe that only a fraction of the digital asset funds flowing through Hamas have been successfully captured.
Urgent Call To Curtail Alleged Illicit Activity
In light of this, the lawmakers call for decisive action to address the risks associated with illicit crypto activity to prevent further tragedies.
As Congress considers legislative proposals to mitigate alleged money laundering and illicit finance risks, they urge the Biden administration to swiftly and comprehensively act to curtail such activities and safeguard national security, as well as the security of US allies.
The lawmakers have set a deadline of October 31, 2023, for the Treasury and the Biden administration to respond to questions about their plans to address the serious national security threats arising from using crypto to finance terrorism.
As the debate surrounding the regulation of digital assets continues to intensify, the alleged crypto-financed terrorism adds another layer of complexity.
Featured image from Shutterstock, chart from TradingView.com
Lawyer Involved In Cryptoqueen’s OneCoin Scam Receives Shocking Response From Court
The OneCoin scam saga has continued to linger despite it being years since it took place, and this time around, a lawyer who was involved in the pyramid scheme has received a rather shocking response from the court.
OneCoin Lawyer Denied Retrial
According to a report by Bloomberg, a US court has denied Mark Scott’s request to be granted a new trial. The lawyer is said to have helped launder 0 million as part of the proceeds from the scheme and was found guilty by the court in November 2019 of money laundering and bank fraud conspiracy.
However, Scott was hoping to get a new trial on the grounds of “legal mistakes” and following evidence that the prosecution witness, who happens to be the brother of the “cryptoqueen” Ruja Ignatova, perjured himself on the witness stand.
As to the court’s reason for the decision, US District Judge Edgardo Ramos stated that he wasn’t convinced that Scott was innocent despite the fact that Ignatova’s brother, Konstantin Ignatov, lied in his testimony.
The judge may have reached this conclusion because the prosecution provided other irrefutable evidence to the fact that Scott was guilty, and the court’s ruling paves the way for Scott to be sentenced.
However, Bloomberg reports that Scott’s lawyer mentioned that his client intends to appeal the decision. According to him, it is disappointing that the court didn’t grant a new trial despite being provided with “undisputed evidence that the Government’s sole cooperating witness perjured himself.”
Ignatov had himself been prosecuted for his role in his sister’s fraudulent scheme. However, he pleaded guilty and agreed to cooperate with the prosecutor, including testifying against other alleged conspirators like Scott.
One Of The Largest Fraud Schemes
On September 12, US District Judge Edgardo Ramos sentenced OneCoin’s co-founder Karl Greenwood to 20 years imprisonment and ordered him to pay close to 0 Million in forfeiture. In the Department of Justice’s (DOJ) statement, Greenwood, alongside Ruja Ignatova, is said to have “operated one of the largest fraud schemes ever perpetrated.”
Karlwood and Ignatova reportedly made over billion from their fraudulent scheme, with many investors worldwide investing their money in the cryptocurrency OneCoin. At the time, Ignotova claimed that crypto would be the “Bitcoin killer.”
The “Cryptoqueen” still remains at large and is listed on the Federal Bureau of Investigation’s (FBI) top 10 most-wanted fugitives. She is also listed as one of the most wanted criminals in Europe, with Europol offering a reward of 5,000 Euros for information leading to her arrest.
The last known fact as to her whereabouts is that she boarded a plane from Bulgaria to Athens and has ‘disappeared’ since then.
Riot Showcases Demand Response Strategy: Bitcoin Mining’s Role in Strengthening Texas Energy Grid
Bitcoin mining aided the Electric Reliability Council of Texas, or ERCOT, when the bitcoin mining company Riot Platforms reduced its power usage amid a Texas summer heatwave. Riot said in its most recent production and operations update that it received .7 million in power and demand response credits for August.
Bitcoin Mining’s Win-Win: Riot Cuts Power, Boosts Texas Energy Stability
Politicians skeptical of bitcoin, like the Massachusetts Democrat Elizabeth Warren, might want to familiarize themselves with demand response systems and how bitcoin mining can enhance the efficiency of energy grids. Simply put, demand response is a tactic used in electricity grids that encourages users to decrease or adjust their power use during peak times in response to time-based rates or other financial incentives.
While it can be cost-efficient, only a handful of business operations can effectively implement significant demand response systems, and crypto mining might be the most optimal at shedding load. In a press release dated September 6, bitcoin mining company Riot Platforms reported it reduced its power use by 95% during peak electricity demand last month amid one of the summer’s harshest heatwaves. As a result, Riot received .7 million in power and demand response credits.
“August was a landmark month for Riot in showcasing the benefits of our unique power strategy,” the CEO of Riot, Jason Les said. “Riot achieved a new monthly record for power and demand response credits, totaling .7 million in August, which surpassed the total amount of all credits received in 2022.”
Riot’s CEO said that based on the average bitcoin price in August, the power and demand response credits they received were equivalent to about 1,136 BTC. He further noted that the credits substantially reduced Riot’s cost to mine bitcoin. Demand response systems have gained traction in the bitcoin mining industry. Last year, mining company Lancium collaborated with a Texas battery-storage provider. When power is curtailed, Lancium’s fleet can keep mining without diminishing its computational power.
In February 2021, Texas experienced blackouts due to a severe winter storm, prompting bitcoin miners to reduce their power to assist ERCOT. A similar situation occurred in February 2022 when operations using demand response systems dialed back power in anticipation of winter storms. Major energy grid operators are keenly interested in bitcoin mining in conjunction with demand response systems.
Given the unique challenges ERCOT has faced in recent years, demand response has become integral to its strategy for grid reliability. In July 2022, an analyst from Duke Energy, the second-largest U.S. energy company, mentioned that his company was exploring demand response systems and had teamed up with selected bitcoin miners for trials.
What do you think about Riot’s DR systems and bitcoin mining helping ERCOT continue sustainable operations? Share your thoughts and opinions about this subject in the comments section below.
Morgan Stanley Strategist Warns of Equities Sell-Off in Response to ‘Hawkish’ Fed Message
On Monday, Morgan Stanley’s equity strategist, Michael Wilson, shared his thoughts on the state of Wall Street. He expressed his belief that a sell-off could be imminent, and that this could occur as a result of U.S. Federal Reserve chairman Jerome Powell’s upcoming remarks on Wednesday. Furthermore, there has been a great deal of conjecture surrounding the possibility of the central bank cutting the federal funds rate multiple times throughout the year. However, Wilson believes that investors who are expecting this outcome will ultimately be disappointed.
Powell’s Message Could Spark a ‘Near-Term Negative Surprise for Equities’
This Wednesday, all eyes will be on the Federal Open Market Committee (FOMC) meeting, as the U.S. Federal Reserve is poised to raise the benchmark interest rate by 25 basis points (bps). While some economists predict that this hike will be the final one of the year, a few market observers anticipate multiple rate cuts in the future. These speculators point to the recent banking industry turmoil in the U.S. as a potential catalyst for the Fed to loosen its monetary policy.
However, there are several analysts who believe that investors expecting cuts are in for a rude awakening. They caution that the Fed’s commitment to holding rates high and not cutting this year is unwavering, due to persistent inflation. According to Morgan Stanley’s equity strategist, Michael Wilson, U.S. equity markets may be in for a rough ride this week if chairman Jerome Powell fails to meet the market’s expectations of a benchmark rate cut.
Wilson warns that a “hawkish” message from Powell could trigger a “near-term negative surprise for equities,” causing a sell-off. Wilson also notes that the market has grown increasingly reliant on tech stocks with large valuations, which could exacerbate the impact of any negative news. Furthermore, he warns that investors who are banking on the Fed cutting rates this year are likely to be frustrated with the outcome.
“We believe that equities are priced for an optimistic policy outcome (rate cuts in ’23 without the growth downside),” Wilson stated in his note to investors.
Fed Officials Desire to Avoid the Mistakes of Past Fed Chairs
The sentiment that the Federal Reserve will maintain its strict stance on interest rates is not limited to Morgan Stanley’s equity strategist. Claudia Sahm, an American economist and macroeconomic expert, echoed this sentiment on Sunday, stating that Powell had made it clear that the Fed would not cut rates this year and that people should “believe him.”
In a Twitter thread, Sahm thinks the Fed’s stance will be strict for three reasons: the desire to avoid the mistakes of past Fed chairs, the reverence for former chair Paul Volcker’s approach to monetary policy, and the personal experiences of current Fed officials with high inflation in the 1970s and early 1980s. Sahm tweeted:
Markets expect the Fed to cut multiple times this year—referred to as a pivot—while the Fed says it will hold rates high and not cut this year. I believe the Fed.
In response to Claudia Sahm’s comments on the Federal Reserve’s commitment to holding rates high, the Twitter account Wall Street Silver pointed out that while Paul Volcker’s monetary policy and the emergence of new oil sources in the early 1980s helped control inflation, the underlying problems persist.
“The Fed can’t solve this problem,” Wall Street Silver said. They can kill the economy, but as soon as rates come down, the same underlying problems exist and inflation roars back. The Fed only has one tool and will print us into oblivion eventually, because they can’t fix this.” Sahm clarified that she was merely explaining “how the history is viewed inside the Fed, not what’s true.”
Do you think the Federal Reserve’s commitment to holding rates high will be enough to control inflation, or will the underlying problems persist and lead to a potential economic crisis? Share your thoughts in the comments section below.
Coinbase Shares Wells Response, Challenges SEC’s Change in Attitude Towards Its Core Businesses
On April 27, Coinbase, the crypto exchange based in San Francisco, made public the disclosure of its response to the Wells notice it had received from the U.S. Securities and Exchange Commission (SEC) back in March. The company maintained that the regulatory body’s enforcement actions were in direct contrast to the agency’s previous approval of the firm’s public listing via its S-1 filing. Coinbase asserted in its response to the SEC that it is the “innocent investors who stand to lose the most from the commission’s abrupt about-face.”
Coinbase Responds to U.S. Securities Watchdog’s Wells Notice
Coinbase’s CEO, Brian Armstrong, presented his company’s response to the U.S. securities regulator on Thursday, divulging their Wells response. In direct opposition to the SEC’s enforcement actions, Coinbase maintains a firm disagreement, while the correspondence made it clear that the regulator should have been aware of this stance when Coinbase went public.
The animosity between the two entities was further highlighted in Coinbase’s response, where the exchange explained that the SEC had neglected to provide clear guidelines for the regulator’s recent enforcement actions.
“If the commission had believed in April 2021 that Coinbase’s core businesses violated securities law, it would have been required by its own mandate to prevent the S-1 from becoming effective to protect the investing public,” the response says. “Instead, it allowed the offering to proceed, and millions of members of the public invested their savings in Coinbase. Investors could only infer by this approval that the Commission did not think Coinbase’s core business was unlawful.”
Coinbase CEO: ‘We’re Confident in the Facts and on the Law’
On Thursday, Armstrong reaffirmed Coinbase’s commitment to creating innovative products that promote economic freedom. “We are committed to building in the U.S. and around the world,” declared the Coinbase CEO. “We will defend ourselves and stand up for the rule of law.”
Coinbase’s Wells response conveyed its bewilderment at the regulatory body’s abrupt change in attitude, particularly given the exchange’s extensive interaction with the SEC during its public listing process. “The staff’s laundry list of proposed charges all rest on three primary legal theories, each of which is flawed and untested,” asserted the missive.
Coinbase’s Wells response comes on the heels of the company’s announcement that it had initiated legal proceedings in federal court, demanding that the SEC respond to their petition filed in July of 2022. Similarly, the Wells response pledged to continue cooperating with the SEC in the hopes of amicably resolving the matter.
What are your thoughts on Coinbase’s response to the SEC’s Wells notice and its stance on the regulatory body’s enforcement actions? Let us know in the comments section below.
Opensea Drops Fees to Zero and Announces New Creator Earnings Model in Response to Shifting NFT Landscape
The largest marketplace for non-fungible tokens (NFTs), Opensea, has announced major changes to its fee structure and policies in response to a shift in the NFT ecosystem. The company detailed that it will drop fees to zero for a limited time and offer an optional creator earnings model with a minimum of 0.5% for all collections that do not use onchain enforcement.
Opensea Drops Fees While Facing Tough Competition from Rivals Like Blur, Looksrare, and X2Y2
Opensea, the NFT marketplace, announced on Friday that it is dropping fees in response to a major change that started in October 2022. “We began to see significant volume and users migrate to NFT marketplaces that do not fully enforce creator earnings,” Opensea said. “Today, that shift has accelerated dramatically despite our best efforts.”
Opensea pointed out that roughly 80% of the total ecosystem volume is not paying full creator earnings, and most of the sales volume has moved to a no-fee environment. The NFT market has faced competition recently from the new market Blur, which has captured .4 billion in all-time sales volume in a short period. However, Blur’s all-time sales are small in comparison to Opensea’s .53 billion in all-time sales.
The NFT marketplace also faces competition from digital collectible markets Looksrare and X2Y2. Opensea hopes the new changes will strike the right balance of incentives and motivations for all ecosystem participants, including creators, collectors, and power buyers and sellers. Additionally, the company announced it is updating its operator filter to allow sales using NFT marketplaces with the same policies, including Blur. “This is the start of a new era for Opensea. We’re excited to test this model,” the company said.
What do you think about Opensea’s decision to drop fees to zero and introduce a new creator earnings model in response to changes in the NFT landscape? Share your thoughts in the comments below.
Did Celsius’ Withdrawal Trigger The Terra/ LUNA Collapse? Claim & Response
Did Celsius set off the domino effect? Almost a month ago, The Block Crypto reported that Celsius pulled at least 0M from the Anchor protocol before the collapse. Two weeks ago, blockchain analytics firm Nansen identified Celsius among the seven big wallets that allegedly triggered the bank run on Anchor. Recently, Celsius responded.
Is this the explanation for the Terra/ LUNA collapse? Was this whole situation not a deliberate attack? Were natural market forces responsible instead? The estimation is that 75% of all UST in existence was locked in the Anchor Protocol, a service that offered a suspiciously high 19.5% yield. That number was one of the main drivers behind UST and LUNA’s success. It’s only logical that the bleeding started there.
According to this theory, how did all of this happen? Let’s explore the facts and explanations provided by all parties involved.
Nansen Identifies Celsius
When the Terra/ LUNA crash happened, a deliberate attack on a perceived vulnerability was the first and main theory. According to Nansen’s “On-Chain Forensics: Demystifying TerraUSD De-peg” report, “This on-chain study refutes the narrative of one “attacker” or “hacker” working to destabilize UST.” How did it happen, then? Well, the natural market forces unraveled the poorly designed algorithmic stablecoin. Back to Nansen:
“Our analysis leveraged on-chain data to demystify what happened before and during the UST de-peg. Through the examination of on-chain activities, we found that a small number of wallets and a likely even smaller number of entities behind these wallets led to imbalances in the Curve liquidity protocols that were regulating the parity between UST and other stablecoins.”
One of those wallets belonged to Celsius. Did they know a collapse was incoming? Or did they just react first to a dangerous situation?
UST price chart on Coinbase | Source: UST/USD on TradingView.com
Celsius ’ Explanation Puts Things In Perspective
The Terra/ LUNA collapse began on May 9th. Two days later, Celsius tweeted this cryptic message: “As part of our responsibility to serve our community, Celsius Network implemented and abides by robust risk management frameworks to ensure the safety and security of assets on our platform. All user funds are safe. We continue to be open for business as usual.”
As part of our responsibility to serve our community, @CelsiusNetwork implemented and abides by robust risk management frameworks to ensure the safety and security of assets on our platform.
All user funds are safe. We continue to be open for business as usual.
— Celsius (@CelsiusNetwork) May 11, 2022
What did Celsius mean? The circumstances forced them to explain themselves. In the article “Search Continues for Source of TerraUSD Crypto Bank Run,” the Wall Street Journal paraphrases them:
“Celsius said that its risk-management group recognized “shifts in the stability” of the platform that prompted it to remove its assets only for the sake of protecting its customers’ money. The company didn’t profit from the instability, it said.”
It also confirms that one of Celsius ‘ business models was to simply accept deposits from their customers, lock the funds in Anchor at a 19.5% yield, offer their clients a 14% yield, and pocket the difference. However, “it wasn’t clear to investors that their money in a Celsius account might have been invested in the Anchor platform. Celsius, Voyager and others in the industry don’t usually disclose their counterparties.”
Where Does The Money Come From?
The Wall Street Journal article went deeper than the Terra/ LUNA collapse. It pointed a magnifying glass at DeFi in general.
“In DeFi, it isn’t easy to understand who provides money for loans, where the money flows or how easy it is to trigger currency meltdowns. This is one reason regulators are concerned about the impact of DeFi on investors and the broader financial system.”
As an example of that, check out The Block Crypto’s explanation of how Celsius staked its money in the Anchor Platform. Apparently, doing all of this instead of buying UST directly is what saved the company:
“The process of depositing funds to Anchor Protocol was convoluted. Igamberdiev explained that it involved first staking ETH using Lido to receive Staked ETH (stETH); then sending stETH to Anchor vault on Ethereum in order to mint and send bETH (a token representation of stETH) to Wormhole, a crypto bridge; minting bETH on Terra using Wormhole; before finally depositing bETH to Anchor Protocol.”
We gave Celsius the right to reply. It’s only fair that we end this with Cory Klippsten’s criticism of the service, Swan Bitcoin’s CEO said:
“It’s being marketed as a better savings account and it’s not. What you really are doing is, you’re an unsecured lender. They’re gathering retail loans and investing it out the back end in lightly regulated activities.”
Do what you will with all of the information in this article. Plus, do your own research.
Featured Image de Bradyn Trollip en Unsplash | Charts by TradingView
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