Markus Thielen of 10x Research unveiled a significant shift in his crypto strategy in response to mounting financial pressures and market instability, as detailed in an investor note released earlier today. Thielen, an influential figure in the analysis sector, cited a concerning outlook on risk assets, which encompasses both technology stocks and cryptocurrencies, primarily driven by unanticipated and ongoing inflation rates.
According to projections from Bank of America, US CPI headline inflation is expected to reach 4.8% by the November 2024 election. Over the past three months, month-over-month CPI inflation has averaged 0.4%. An acceleration at this speed would mean the rate is more than twice the Federal Reserve’s inflation target of 2% by November.
Why 10x Research Sold (Almost) All Crypto And Risk Assets
In light of this, 10x Research’s decision to divest from risky assets was catalyzed by an adverse shift in economic indicators. Notably, the US bond market is currently projecting fewer than three Federal Reserve rate cuts this year, a significant adjustment from earlier more optimistic forecasts. According to the CME FedWatch tool, the majority of market participants now think that a rate cut by the Fed will not come before the mid-September FOMC meeting.
Additionally, the 10-year Treasury Yields have reached a peak of 4.61% this month, marking the highest rate since November 2023, further complicating the investment landscape for risk assets including technology stocks and cryptocurrencies.
“Our growing concern is that risk assets are teetering on the edge of a significant price correction,” Thielen stated in the note. “We sold all our tech stocks last night as the Nasdaq is trading very poorly and reacting to the higher bond yield. We only hold a few high-conviction crypto coins. Overall, we are bearish on risk assets.”
The bearish stance is further supported by the disappointing performance of US-listed spot Bitcoin ETFs. Despite the SEC’s approval of nearly a dozen such ETFs in January, which initially spurred a surge in Bitcoin prices, the influx of capital has markedly slowed. This month, the five-day average net inflows into these ETFs plummeted to zero, a stark contrast to the nearly $12 billion that flowed into these investment vehicles earlier in the year.
Thielen’s comments also touched on the broader implications of the upcoming Bitcoin network’s quadrennial halving, scheduled for April 20. This event will reduce the reward for mining a block of Bitcoin by 50%, from 6.25 BTC to 3.125 BTC. While such halvings have historically spurred bullish sentiment and price increases due to a perceived scarcity of Bitcoin, Thielen suggests that the current market conditions might dampen any potential rallies.
“It is essential to understand that trading is a continuous game with high-conviction opportunities. The key is to keep analyzing the markets and uncovering those opportunities when the odds are in your favor. There are times when we advocate for a total risk-on approach and when the priority is safeguarding your capital, enabling you to seize opportunities at lower levels,” Thielen stated.
In a notable exchange with Matthew Graham of Ryze Labs, Thielen defended his firm’s trading strategy amid criticism for what was described as erratic decision-making. Graham pointed to recent fluctuations in 10x Research’s stance on Bitcoin, citing a research note from early April that predicted a potential rally to $80,000, followed by a more cautious view and the recent sell-off.
Thielen responded, “Actually, no. We have been cautious since March 8, and when the triangle breakout failed, we worked with the $68,300 stop loss. This is simply risk-reward trading.” This defense highlights the volatile nature of crypto trading and the necessity for agile strategies in response to rapidly changing market conditions.
Thielen concluded, promising a strong re-entry into the market under more favorable conditions: “Will buy back with both hands at 52,000 – promise.”
Featured image from Shutterstock, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
Bitcoin (BTC) and Solana (SOL) were two of the leading assets impacted by last week’s crypto market downturn. Meanwhile, Pepe (PEPE) experienced a steeper price drop.
This price crash reverberated throughout the entire cryptocurrency market, with the global crypto market cap losing over $280 billion over the last seven days in a massive 10% drop to $2.32 trillion at the time of writing.
Here is an overview of how some of the most impacted cryptocurrencies performed over the week:
BTC, SOL and PEPE prices – April 14 | Source: Santiment
BTC slips to 1-month low
Interestingly, Bitcoin began the week favorably, attempting to build on the momentum it recorded from April 3 to 7 last week. The premier crypto asset reclaimed the $70,000 threshold on April 8 for the first time in over a week, surpassing the $72,000 and closing the day with an impressive 3.25% increase.
However, the bears took control of the scene the following day, pushing BTC below the $70,000 mark and triggering a 3.45% loss, essentially erasing the gains recorded on Monday. The hotter-than-expected U.S. inflation data exacerbated the downward spiral. Bitcoin mustered a comeback when it dropped to the $68,318 support at the 21-day EMA.
A resurgence of strength saw Bitcoin recover the $71,000 zone, but the resistance that ensued hedged against any further rally. The rest of the week was marred by a consistent price decline, as tensions surrounding the looming Iran-Israel conflict contributed to the bearish pressure.
Bitcoin saw three consecutive days of declines from April 11 to 13, culminating in a shocking crash to a one-month low of $61,596 on April 13. Despite recovering from this floor, BTC remains in a downtrend, down 8% over the past two days as it struggles to reclaim and retain the $65,000 territory.
SOL breaks below 50-day EMA
Solana’s start to the week was not as significant as Bitcoin’s, but its subsequent price decline was much steeper. Despite only seeing a modest 0.67% rise on April 8 as BTC led the market to a short-term recovery, SOL crashed 4.63% the following day when BTC triggered a downtrend.
Similarly, its April 10 recovery only saw a 0.56% increase, with the rest of the week introducing one of the biggest price slumps for Solana this year. From April 11 to 13, Solana recorded a discouraging 21.19% drop, giving up the Fibonacci support levels at 0.618 ($171.09), 0.5 ($161.11) and 0.382 (151.14) in the process.
More significantly, Solana’s three-day downward spiral resulted in a collapse below the crucial 50-day EMA stationed at $162.30 as of April 12. SOL closed below this level for two consecutive days. The last time the asset witnessed this event was in September 2023.
Solana has also relinquished the psychological supports at $150 and $140, trading for $139.94 at the reporting time. The cryptocurrency is down 24% this week, having lost $19 billion from its market cap since April 8.
PEPE CCI drops to 9-month low
Pepe did not escape the bloodbath recorded in the broader market this week.
The frog-themed meme coin eventually dropped to a one-month low below the $0.000004 support. Its gains at the start of the week surpassed Bitcoin’s, but so did its losses — a testament to the heightened volatility in the meme coin market.
The meme coin surged 4.30% on April 8, reaching a high of $0.00000796, before it eventually dropped 9.28%, giving up not just the Monday gains, but most of the value it picked up last week.
After two days of a mild recovery push, Pepe saw a more substantial 19% intraday drop on April 12. This collapse marked its largest intraday decline in nearly a year (the last time Pepe saw such a price crash was when it dropped 30.47% on May 8, 2023, shortly after its launch).
Following the 19% collapse on April 12, Pepe slumped by another 14.86% the next day.
Despite a mild price increase today, Pepe still trades below $0.000006, changing hands at $0.00000525. The meme coin has dropped 29% this week, with its commodity channel index (CCI) crashing to -245, the lowest value in nine months.
Such a dramatically low CCI suggests that Pepe is largely undervalued, with ample room for growth. The last time the asset’s CCI hit this level, it witnessed three more months of consistent declines, dropping to a low of $0.00000061 on Oct. 19, 2023, before it eventually recovered.
Amid a widespread price correction affecting the majority of the top 100 cryptocurrencies, one digital asset has defied the trend, surging to impressive heights. Nervos Network, along with its native token CKB, has not only recorded significant gains but has also climbed to the 79th rank in the market, raising questions about the factors behind its surge.
Nervos Network Decoded
Nervos Network is a proof-of-work (PoW) Layer 1 (L1) blockchain designed to optimize application-specific Layer 2 chains. The network aims to establish its native asset, CKB, as a more sustainable store of value (SoV) compared to Bitcoin (BTC) while providing a more secure smart contract platform than Ethereum (ETH).
Bitcoin’s capped supply and decreasing block rewards raise concerns about long-term economic incentives for miners.
Notably, the Nervos Network tackles this issue by introducing a fixed annual secondary issuance of CKBs and the base supply, providing long-term incentives for miners.
Nervos Network also addresses the potential security risk associated with Ethereum. In Ethereum, the value of its native asset, ETH, is not directly linked to the value of Layer 2 apps built on top of it.
Nervos Network aims to mitigate this risk by ensuring that CKB is used for transaction fees and storage, creating a stronger economic relationship between the native asset and the overall network.
How Secondary Issuance And State Rent Drive Sustainability
Nervos utilizes a perpetual secondary issuance model to increase CKB’s SoV properties. This model incentivizes users to continuously lock up CKB in proportion to the size of their applications.
Furthermore, locked CKBs are subject to “state rent” through inflation, which automates state rent payments and ensures a sustainable economic model.
Nervos Network introduces a secondary market for chain space, enabling apps to unlock and sell CKBs without requiring relevant storage.
Investors can offset inflation by purchasing CKBs and depositing them into NervosDAO, a mechanism that receives a portion of the secondary issuance to counterbalance inflation. Interestingly, this resembles “treasury bonds” and offers potential investment opportunities.
Approaching ATH Amidst Bitcoin Integration Announcement
Having delved into the fundamentals, CKB has recently experienced a significant surge in value, breaking out of a long consolidation phase that lasted almost two years.
After trading in a range of $0.0024 to $0.0035, the cryptocurrency has broken through this price level since January 30th and has seen significant gains over the past few months.
Currently trading at $0.032, CKB is close to its all-time high (ATH) of $0.043, which was reached in March 2021. The token has seen notable price increases of 47%, 69%, 75%, and 14% over the past fourteen days, seven days, and 24 hours, respectively.
According to CoinGecko data, CKB has also seen a significant increase in trading volume, reaching $207 million in the last 24 hours, 9.7% from the previous day’s trading.
In addition, CKB’s market capitalization has increased significantly, nearly doubling from $740 million on April 2 to approximately $1.35 billion in just over a week.
The price spike can be attributed to the announcement that Nervos Network’s CKB token will join the Bitcoin network. The token’s introduction of smart contract functionality, along with its interoperability and modularity features scheduled for 2024, has created excitement among investors.
As Bitcoin approaches the Halving that has historically increased its value, Nervos Network is well-positioned to benefit from its strong ties to the largest cryptocurrency in the market.
With its continued bullish momentum and the predicted increase in BTC’s price, CKB may be poised to reach new all-time highs soon.
Featured image from iStock, chart from TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
The system, says Hamilton, is designed to be “anti-fragile,” meaning it depends on no party’s good will to achieve its end. Nobody but the originator and recipient have access to the contents of the file, all other parties are financially incentivized to cooperate, and redundancies ensure the payload is always available. “Little strings of data control our lives,” says Hamilton. Because humans are “gooey”—that is, unreliable and prone to mistakes—the only sensible protection for those strings is cryptography, he adds.
There are various other ways, says Hamilton, that Sarcophagus might be applied outside of a crypto setting. A digital dead man’s switch could be used by a whistleblower to release incriminating material or by a dissident or journalist who suspects a threat to their life, as a kind of SOS. In a more mundane context, it could be used to pass account credentials from one generation of employees to the next.
ILLUSTRATION: ALBERTO MIRANDA
Sarcophagus has received $6 million in funding to date from investors including Placeholder, Blockchange, and Hinge Capital. The project is managed by a decentralized autonomous organization, or DAO—a collective that governs the Sarcophagus treasury and development process through a system of community voting. In its present state, Sarcophagus is best described as an “early beta,” says Hamilton. The service is operational but not widely used, and it does not generate significant revenue—only a small cut of every payment.
One barrier to broader adoption is that recipients must already have access to a crypto wallet, whose credentials are used to decrypt the data payload. There is an option to create a new wallet for someone, along with a PDF walking them through the process for accessing it, but a level of crypto literacy would certainly help.
As the generation of people comfortable with crypto grows older and begins to reckon more seriously with their mortality, Hamilton thinks a larger subset will begin to understand the need for a service like Sarcophagus. “Millennials are just starting to think about this problem,” he says. Hamilton imagines that more accessible services will be built atop Sarcophagus technology, too. These “boomer products,” as Hamilton calls them, one of which his own team is developing, will abstract away some of the technical complexity, such that people won’t realize they are using crypto infrastructure. (Although there is an inevitable trade-off between security and convenience.)
In any case, says Hamilton, the present system—whereby credentials to high-value crypto wallets might be stored in bank vaults protected by armed guards—approaches the absurd. The “billion-dollar file cabinet” has to go, says Hamilton. “We are still relying on heavy metal doors and guys with guns when cryptography itself can act as a steel wall of incredible thickness.”
This article originally appeared in the May/June 2024 issue of WIRED UK.
The defense attempted to draw a distinction between the failure of Terraform’s crypto assets, whose risk profile it implied was well understood by investors, and the acts of fraud alleged by the SEC. “Failure doesn’t equal fraud,” David Patton, attorney to Kwon, reportedly told the courtroom in his opening statement.
The defense also sought to undermine the credibility of the SEC whistleblowers, whom it reportedly suggested were in it only for the financial reward. The defense dismissed the account of the former Jump employee as hearsay and cast the Chai whistleblower as a disgruntled former staffer.
The defense also contended that Chai had utilized the Terraform blockchain, and argued that the SEC could not prove otherwise without access to the Chai source code. The messages between Shin and Kwon about “fake transactions,” Kwon’s lawyers claimed, related to a different project entirely.
The jury was ultimately unconvinced.
Having been found liable, Kwon and Terraform will be dealt a financial penalty, the size of which will be confirmed by the judge at a later stage. They’ll likely be prevented from participating in the US securities market in the future. But the implications of the case spill further afield.
Before the trial, the defense had called for dismissal on the grounds that the SEC had misclassified UST, LUNA, and other Terraform tokens as securities—a specific class of financial instrument from which investors expect to profit—and, therefore, lacked jurisdiction. The debate over the appropriate classification of crypto is central to multiple ongoing legal disputes in the US, between the SEC and Ripple, Coinbase, and other firms. The crypto industry has repeatedly accused the SEC of “regulation by enforcement”—of wielding legal action instead of articulating clear rules for the road—and making a jurisdictional land grab.
However, in an opinion issued before the trial, Judge Jed Rakoff, who presided over the Kwon case in New York, rejected the arguments for dismissal. The SEC should be allowed to “resolve new and difficult questions posed by emerging technologies where the technologies impact markets that on their face appear to resemble securities markets,” he ruled.
The opinion does not establish a rule that other US judges are duty bound to follow, but in combination with the verdict in favor of the SEC, sets a precedent of sorts for a crypto organization having violated US securities laws. “This case is before a well-respected judge who is thorough and careful. He’s influential,” says Lisa Bragança, attorney at Bragança Law and former branch chief at the SEC. “A decision from him will be cited over and over again by fellow judges.”
Terraform had already signaled prior to the trial its intention to appeal an unfavorable verdict, citing the ambiguity over the proper classification of its tokens. The absence of Kwon from the courtroom, which denied him the ability to “sit at the counsel table, hear the testimony of witnesses, and respond,” says Bragança, could support the appeal bid.
In the absence of legislative direction from the US Congress, says Silva, the classification question will be settled only when a crypto case moves through the appellate courts, perhaps arriving eventually at the US Supreme Court. “It’s an evolving area of the law,” he says. “It’s crystallizing with each case that comes down. It just hasn’t crystallized yet.”
From 4,500 miles away in Montenegro, Kwon will have played his part.
Today, I wanted to talk about some of the stuff people say about Gen Z kids these days.
It seems like every group thinks the younger ones must be totally weird and different from them. Lately, everyone’s talking about Gen Z, the ones born in the late 90s on up. Some folks make them sound super confusing! But you know what, while everyone talks about dumb internet stuff, these kids are actually doing big things to make the world better.
It’s not perfect being a Gen Z, though. They gotta deal with lots of challenges, just like we all did growing up. I’m gonna share some of my thoughts on what Gen Z is really like and why those of us who had to use dial-up on the computer sometimes just don’t get them.
Sound good? Alright, let’s break this down piece by piece so it makes sense:
The Curious Case of Nicotine Pouches
Remember when sneaking cigarettes was the pinnacle of teenage rebellion? Well, move over, Marlboro Man, because nicotine pouches are the new sheriffs in town.
No smoke, no vape, just a tiny sachet of nicotine that sits quietly under your lip. It’s like nicotine decided to go incognito, blending in at parties without leaving a trace.
Gen Z’s discreet way to get that buzz without the clouds of smoke or the telltale vape clouds. Parents and teachers are scratching their heads, while Gen Z is probably smirking behind those TikTok filters.
SnusDirect offers a wide range of nicotine pouches, from bold to barely-there flavors, so you can discreetly satisfy cravings anytime, anywhere, without all the smoke.
The “Cool” Factor
What’s fascinating is the branding gymnastics these pouches perform to appeal to the youth. With flavors that sound more like a Starbucks menu, it’s no wonder Gen Z finds the allure hard to resist.
It’s nicotine’s latest costume in the masquerade ball of teenage vices, and it’s hitting the mark.
Health Halo or Health Hazard?
Here’s the kicker: the debate rages on whether it’s a step forward or a bound backward. With sleek designs and clever marketing, these pouches are dancing in a gray area of health implications and ethical advertising.
But let’s not pretend we’re surprised. It’s just another day in the life of trying to figure out Gen Z’s choices.
A Love-Hate Story of Social Media
Social media is, without a shadow of a doubt, the digital air Gen Z breathes. It’s their town square, their diary, and their soapbox.
But for the older generations? It’s like reading a book where half the pages are ripped out. They see the highlights and the filtered snapshots, but what about the context? Lost in translation.
The irony is palpable – the most connected generation is also the most enigmatic.
The Influencer Economy
Scroll through any social platform, and you’ll stumble upon Gen Zers turning their passions into paychecks.
It’s impressive and baffling at the same time. The bedroom becomes a boardroom, and followers are currency. Meanwhile, the older generations are still marveling at the concept of email money transfers.
The Echo Chambers
Here’s a fun fact about social media: It’s kinda like having a friend who only tells you what you want to hear.
The younger generation is growing up where they mostly see others who feel the same way they do. This can be good or bad. If you want to find people talking about different ideas, you gotta dig through a LOT of hashtags and exaggerations!
Social media helps make “echo chambers” without even trying. People mostly see others who already agree with them. This keeps them from talking to folks with different views.
If someone says something you don’t like, you can just not listen to them anymore by blocking them. But that’s a topic for another time.
The Fashion Frenzy
One man’s trash is Gen Z’s treasure. Thrifting isn’t just shopping but a statement. Fast fashion? Cancelled.
Sustainability is the name of the game, and if you’re not upcycling, you’re not on trend. It’s a refreshing shift with a pinch of irony. The same generation known for digital consumerism is also championing eco-conscious living.
Welcome to the era of aesthetics, where your vibe attracts your tribe. Cottagecore, dark academia, e-girl, and more – if it can be hashtagged, it’s a movement.
It’s all about the visual identity, a stark contrast to the Gen X ethos of “less is more.” Now, it’s “more is more, as long as it’s curated.”
Cryptocurrency and the Digital Gold Rush
While some of us are still trying to figure out online banking, Gen Z is mining digital currencies in their dorm rooms.
Cryptocurrency has become the modern-day gold rush, with all the volatility and thrill of a rollercoaster at Six Flags. It’s a brave new world of finance, and guess what? The kids are leading the charge.
With their knowledge of technology, they are well versed in this area, while this is something that is completely lost on older generations. Interestingly, Bitcoin can also be used to purchase items ranging from luxury cars to even space travel tickets, expanding its utility far beyond conventional currency.
The Side Hustle Hustle
Things have changed from how we used to make money when we were kids, right? Remember delivering newspapers on your bike or working at the mall in the summer? These days, lots of young people have side jobs or side businesses to earn extra cash.
Some people buy and sell shoes online to make a profit. Others trade digital artworks called NFTs. It shows the entrepreneurial spirit – that’s a big word that means being your own boss and starting small businesses. This next generation is mixing that with the gig economy. That means doing different jobs, such as driving for Uber instead of a regular 9-to-5.
It’s shaping what work looks like for young adults in the future. When you stop and think about it, it’s good that today’s youth are resourceful. That means they’re good at finding ways to make things work with what they have. That gives me hope that the future is in good hands. They’ll know how to solve problems and keep things moving forward.
Pretty cool how the young folks are taking charge, right? Always good to see the new ideas the next generation comes up with. Keep hustling out there! Let me know if any other questions come up.
The Moral of the Story
So, what’s the takeaway from this whirlwind tour of Gen Z’s world? It’s simple: change is the only constant.
Each generation comes with its quirks, its innovations, and its challenges. Gen Z is no exception. They’re rewriting the rules, one nicotine pouch and thrifted outfit at a time.
And for the rest of us? Maybe it’s time to stop trying to explore every little detail in everything and just appreciate the complexity of the world they are creating. After all, confusion is the first step to enlightenment, or so they say.
A bitcoin top could signal trouble for stocks – and a shift in market leadership, according to Stifel. According to Barry Bannister, Stifel’s chief equity strategist, there’s evidence the cryptocurrency may be peaking, which could lead to a pullback in investor sentiment, weaker Big Tech stocks, and a rotation into value, he said in a note Wednesday. “Bitcoin & Nasdaq 100 reflect the speculative fever fostered by cheap money after dovish Fed pivots, such as occurred 4Q 2023,” Bannister said. “We show that if Bitcoin reflects euphoria after a dovish Fed, it is notable that Bitcoin (and the fever) may be peaking.” BTC.CM= YTD mountain Bitcoin, YTD “Investor mania around bitcoin coincides with extreme equity bullishness, which typically means equity indices are overbought and vulnerable to pullbacks,” he added. Bitcoin hit a new all-time high on March 14 after running up 71% since the start of the year, and has been trading in a roughly 7% range since then as investors take profits and digest the recent gains. Shortly after, on March 28, the S & P 500 reached a new intraday all-time high . .SPX YTD mountain S & P 500, YTD If was indeed its peak, that could mean a weaker Nasdaq 100 for six months, Bannister said. Other implications he highlighted include weakness in Big Tech Nasdaq stocks and a pullback in investors sentiment with a year-over-year change in S & P 500 performance. Additionally the S & P 500, which is cap weighted, could struggle against the equal-weight S & P 500 for about six months. “When the equal-weighted S & P 500 out-performs the S & P 500, then value tends to out-perform growth,” he said. —CNBC’s Michael Bloom contributed reporting.
Picture a dimly lit red-lacquered room in a fancy hotel. A group of men in hoodies, some in business suits, others in sunglasses, stands ominously around a table not with energy drinks or laptops but with women used as serving platters for sushi.
Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial.
Every week, crypto.news brings you #hashtag hearsay, a gossip column of scoops and stories shaping the crypto world. If you have a tip, email Dorian Batycka at [email protected]
No, this is not a Hollywood Weinstein-era casting call in the 1990s, but another episode of #hearsay, my weekly gossip column looking into the sultry underbelly of crypto.
In this week’s episode, we take you behind the story of Copper’s sushi model kerfuffle after the digital asset manager was busted by Financial Times using scantily clad models as serving platters for sushi during the company’s Digital Asset Summit afterparty.
The backstory? Of course it happened at the Mandrake Hotel, one of seediest in London, owned by the eponymous Lebanese party boy turned hotel entrepreneur Rami Fustok. Welcome to the world of underground crypto ‘bro’ culture, where cringe-core hotels serve as the backdrop for degen deals and misogyny gone amuck.
Copper Technologies, the digital asset company hosting the party, is no activist social justice enterprise either. The company has reputed links to weapons dealers and sanctioned bankers from Russia. In 2023 and 2024, both Jonatan Zimenkov and Mikhail Klyukin were found to have made transactions with the company in excess of $4.8 million and £15 million (approx. $18,9 million), respectively, both of whom are sanctioned by UK and US authorities.
Let’s be honest, though—crypto is a total sausage fest, a testosterone-fueled echo chamber where women are as rare as a Bitcoin in a bear market. Worse, they are often also the target of outright abuse.
In 2018, famed cryptocurrency journalist and host of the “Unchained” podcast Laura Shin wrote about her experiences with online harassment and threats from individuals within the crypto community. Over the years, she has documented specific instances of misogynistic comments and derogatory messages directed towards her on social media platforms such as X and Reddit. On March 24, the crypto influencer Jeremy Cahen (Pauly0x) called Shin a “whore” in an X space after she canceled (later postponed) an interview she had planned with the Porkcoin bro. Cahen himself is no stranger to controversy, having been found guilty alongside Ryder Ripps of fraudulently profiting from and defaming Yuga Labs, known as one of the greasiest crypto bros in the game.
How is this guy’s account still live He’s going after @laurashin in the most deranged, hateful way bc she cancelled an interview with him.
Tron (TRX), a token launched in 2018, faced waves of criticism after its launch featured a prominent partnership with a blockchain-based porn platform. Since crypto’s inception, it seems, women have fared as mere side pieces, mantles to be objectified rather than listened to.
Walk through any conference from Singapore to Miami: it’s no surprise that there are mostly men. Companies within the industry should do more or face criticism for their lack of gender diversity in executive teams and boardrooms, with names and statistics readily available in public reports. It’s all in the open; this is what decentralized governance can and should be about—greater equality and more equilibrium in markets and participants.
That’s not to say women are entirely excluded from crypto altogether. In fact, just last weekend, I attended DeSci in London, which featured an all-female panel including representatives from AthenaDAO, AsteriskDAO, and HairDAO. In London, there are women in web3-focused events, presumably because the men in London only want to meet at the Mandrake Hotel for female-plated sushi. One of my best friends in the industry, Aleksandra Artamonovskaja, is a crypto industry veteran with a penchant for digital art who studied at Sotheby’s Institute of Art.
My boss at Crypto.news, Catherine Mychka reminds me at least once a week that my EU shift is dominated by male writers. The evidence is, fellow men, right in our faces. While there are women in the industry, they remain the minority, thanks —I think—to the toxic male culture that tends to permeate our industry like a stinky fart.
What’s more, it’s hard to make it in crypto in less you are handed many structural conditions at birth: access to regular internet, not to mention food and shelter, schools for maths and coding, etc. But when keynote speaking engagements for marquee industry events feel dominated by self-proclaimed industry evangelists full of Christ-like white boys, the problem becomes that these Lamo-espousing industry figures permeate the industry like a foul-smelling bad body odor. I get it. You want to look like a baller, but please, crypto bros—chill!
Back when I first got into crypto, it felt like I was partaking in some new utopian vision and hope for a world empowered by decentralization. Instead, that promise seems foregone, replaced by some Kafkaesque caricature of an industry cannibalizing itself with greed and toxicity. Effective altruists whose only pursuit seems to be a twisted Silicon Valley 2.0 logic personified by white men feels, well, a bit boring to me. The thing with diversity is that it breeds innovation. Having more voices, more perspectives, and more ideas breeds those very forms exponentially.
As I finish my regularly plated sushi, a cautionary note. For one to condemn the crypto ‘bro’ culture I feel ashamed and apart of would be amiss to the fact I myself both a man and white. Dipping my sushi roll into its bath of soy and wasabi, I wondered: am I apart of the problem? Or could the future of crypto, a world where greed and misogyny seem to go hand in hand, be replaced with one where we’re talking about SushiSwaps instead of sushi rolls?
Sam Bankman-Fried was sentenced to 25 years in prison for his role in the sudden collapse of the FTX crypto exchange. Prosecutors say he defrauded customers out of more than $8 billion, one of the largest financial crimes in U.S. history. Errol Barnett reports.
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NEW YORK — Crypto entrepreneur Sam Bankman-Fried was sentenced Thursday to 25 years in prison for a massive fraud on hundreds of thousands of customers that unraveled with the collapse of FTX, once one of the world’s most popular platforms for exchanging digital currency.
Though he described Bankman-Fried as “extremely smart,” U.S. District Judge Lewis A. Kaplan delivered a blistering analysis of Bankman-Fried and his crimes before announcing a sentence that was half of what prosecutors sought and less than a quarter of the 105 years recommended by the court’s probation officers.
“There is absolutely no doubt that Mr. Bankman-Fried’s name right now is pretty much mud around the world,” Kaplan said of the 32-year-old California man who seemed atop the cryptocurrency universe before his businesses collapsed in November 2022, leaving customers, investors and lenders short over $11 billion, which the judge ordered him to forfeit.
He was convicted in November of fraud and conspiracy — a dramatic fall from a crest of success that included a Super Bowl advertisement, testimony before Congress and celebrity endorsements from stars like quarterback Tom Brady, basketball point guard Stephen Curry and comedian Larry David.
Kaplan imposed the sentence in the same Manhattan courtroom where, four months previously, Bankman-Fried testified that he had intended to revolutionize the emerging cryptocurrency market with his innovative and altruistic ideas, not steal.
The judge said Bankman-Fried repeatedly committed perjury on the witness stand in testimony that was “often evasive, hair-splitting, dodging questions.”
Kaplan said the sentence reflected the risk that Bankman-Fried “will be in position to do something very bad in the future. And it’s not a trivial risk at all.” He added that the sentence was fashioned “for the purpose of disabling him to the extent that can appropriately be done for a significant period of time.”
Kaplan said he would advise the Federal Bureau of Prisons to send Bankman-Fried to a medium-security prison near San Francisco because his notoriety, his association with vast wealth, his autism and his social awkwardness are likely to make him especially vulnerable at a high-security facility.
Assistant U.S. Attorney Nicolas Roos had recommended a prison sentence of 40 to 50 years, saying it was the only way to ensure “the defendant doesn’t do it again.”
Prosecutors said tens of thousands of people and companies worldwide lost billions of dollars since 2017 after Bankman-Fried looted FTX customer accounts that he promised were safe to make millions of dollars of illegal political donations, bribe Chinese officials, make risky investments, buy luxury real estate in the Caribbean and live lavishly.
Kaplan agreed with prosecutors Thursday that Bankman-Fried should not be credited because some investors and customers might recover some money. He noted that customers lost about $8 billion, investors lost $1.7 billion and lenders were shorted by $1.3 billion.
When he spoke, Bankman-Fried stood and apologized in a rambling statement: “A lot of people feel really let down. And they were very let down. And I’m sorry about that. I’m sorry about what happened at every stage.”
He added, “My useful life is probably over. It’s been over for a while now, from before my arrest.”
Wearing his khaki-colored prison uniform and chained at the ankles, Bankman-Fried seemed to briefly get emotional as he spoke for about 20 minutes, expressing regret about “a lot of mistakes” but casting some blame onto others. His trademark messy and bushy hair had returned from the trimmer look he displayed at trial.
He praised some of his former executives and workmates, saying: “They threw themselves into it and then I threw all of that away. It haunts me every day.”
Kaplan later criticized Bankman-Fried’s remarks, saying he expressed “never a word of remorse for the commission of terrible crimes.”
As his misty-eyed client looked on, defense attorney Marc Mukasey said the portrayal of the Massachusetts Institute of Technology graduate as an “arrogant greedy swindler who thought he would get away with fleecing the hard-earned money of hard-working people” was wrong.
“Sam was not a ruthless financial serial killer who set out every morning to hurt people,” Mukasey said in court after urging in court papers that any prison sentence be in the single digits. “Sam Bankman-Fried doesn’t make decisions with malice in his heart. He makes decisions with math in his head.”
The judge later criticized Bankman-Fried’s calculations, saying he was indeed “a math nerd, who looked at decisions in terms of math, expected value.”
He cited trial testimony in which Bankman-Fried’s former girlfriend and fellow executive Caroline Ellison said Bankman-Fried once told her that his willingness to embrace risk was such that he’d be happy to flip a coin if it came up tails and the world was destroyed — as long as if it came up heads, the world would be twice as good.
The judge said Bankman-Fried utilized that risk-taking nature at his companies, “betting on expected value” and weighing the risk of getting caught with the probability of large gains.
“That was the game,” Kaplan said. “It’s his nature.”
Bankman-Fried’s attorneys, friends and family had urged leniency, saying he was unlikely to re-offend. They also said FTX’s investors have largely recovered their funds — a claim disputed by bankruptcy lawyers, FTX and its creditors.
“Mr. Bankman-Fried continues to live a life of delusion,” wrote John Ray, the CEO of FTX who has been cleaning up the bankrupt company. “The ‘business’ he left on November 11, 2022 was neither solvent nor safe.”
One FTX customer, Sunil Kavuri, spoke at sentencing, saying he’d traveled from London on behalf of over 200 victims who had sent impact statements to the judge.
He said he’d spoken to other “victims just like myself who had their dreams destroyed” and had lived “the FTX nightmare every day for almost two years, every day, every night, a lot of crying, sleepless nights.”
Bankman-Fried’s parents, both Stanford Law School professors, did not speak as they left the courthouse Thursday, but later issued a statement: “We are heartbroken and will continue to fight for our son.”
Bankman-Fried, of Palo Alto, California, was once worth billions of dollars on paper as the co-founder and CEO of FTX, which was the second-largest cryptocurrency exchange in the world at one time.
FTX let investors buy dozens of virtual currencies, from Bitcoin to more obscure ones like Shiba Inu Coin. Flush with billions of dollars of investors’ cash, Bankman-Fried took out a Super Bowl advertisement to promote his business and bought the naming rights to an arena in Miami.
But the collapse of cryptocurrency prices in 2022 took its toll on FTX, ultimately leading to its downfall. FTX’s hedge fund affiliate, Alameda Research, had bought billions of dollars of various crypto investments that lost considerable amounts of value in 2022. Bankman-Fried tried to plug the holes in Alameda’s balance sheet with FTX customer funds.
Three people from Bankman-Fried’s inner circle pleaded guilty to related crimes and testified at his trial.
Besides Ellison, two onetime friends of Bankman-Fried — Gary Wang and Nishad Singh — testified they felt they were directed by Bankman-Fried to commit fraud.
Opinions expressed by Entrepreneur contributors are their own.
Additional reporting by Sherin Shibu.
The collapse of Sam Bankman-Fried’sFTX crypto empire was not only felt by those deep in the crypto community — some big-name entrepreneurs and celebrities lost a lot of money, too.
Although SBF allegedly led investors to believe he could bring them high returns with little risk, more than a million people may have been affected by the collapse, and big-spending-crypto-newbies quickly found out that trading crypto isn’t for the faint of heart.
In November, Bankman Fried was found guilty on seven counts of fraud, embezzlement, and criminal conspiracy for orchestrating “one of the biggest financial frauds in American history” after a bank run exposed an $8 billion hole in company accounts and a piggy bank relationship with Alameda Research crypto trading firm.
Bankman-Fried was sentenced on Thursday in a Manhattan federal court to 25 years in prison.
Southern District of New York Judge Lewis Kaplan said that Bankman-Fried was “extremely smart” and agreed with prosecutors that Bankman-Fried “wanted to be a hugely, hugely politically influential person in this country.”
Kaplan stated that the loss amount to the victims of Bankman-Fried’s crimes surpassed $550 million and that investors lost billions.
Meanwhile, FTX’s new CEO John Ray, who stepped in for SBF after the company filed for bankruptcy, said the company has located $5 billion in cash and other assets, and while they are not done discovering unearthed funds, they plan to also sell over $4.6 billion in additional holdings as well.
It’s unclear how the recovered funds will be divvied up, but typically in bankruptcy proceedings, only bond-holders are eligible to recoup a portion of their losses, while those with equity stakes are left at a loss, according to Markets Insider.
Sequoia Capital likely suffered the greatest loss for an outside investor in the exchange with its $200 million investment, which peaked at $350 million in January 2022, according to data obtained by Forbes.
While Sequoia reportedly told investors its FTX investment was offset by its $7.5 billion in realized and unrealized gains, Singapore investment company Temasek didn’t get as lucky.
The company reportedly invested $210 million for 1% of FTX and $65 million for 1.5% of FTX U.S. but has since determined its stakes to zero.
Additionally, investment company Paradigm is said to have invested $215 million, while the Ontario Teachers’ Pension Plan invested $75 million, and has since written its investment to zero.
Here’s a look at some of the famous faces who lost big in the FTX crypto collapse.
Tom Brady
Tom Brady is the most famous face to promote and invest in FTX — and he also may have suffered the greatest individual loss. The Tampa Bay Buccaneers quarterback owned over 1.1 million common shares of FTX Trading, which equaled about $45 million before the company went bankrupt, according to Bloomberg.
While his investment is now zero in the wake of the collapse, he previously advocated for the exchange and appeared in several promotional ads with his now ex-wife Gisele Bündchen.
Gisele Bündchen
Along with her now ex-husband, Tom Brady, the supermodel also lost a significant portion of her wealth in the exchange. Bündchen reportedly owned 680,000 FTX shares, which were valued at about $25 million.
Kevin O’Leary
The Shark Tank entrepreneur was a fierce advocate for SBF’s FTX before the crypto exchange’s fall. As a paid spokesperson for the company, O’Leary owned 32,000 shares in FTX and 110,000 shares of FTX US. He said his shares were valued at $1 million during a U.S. Senate Banking Committee in December, adding that he has since “written them off to zero.”
O’Leary told CNBC’s “Squawk Box” in December that he was paid around $15 million to act as a paid spokesperson for the brand and put just under $10 million into the crypto exchange. But he said his crypto investment is now equal to zero.
Robert Kraft
New England Patriots owner Robert Kraft also fell victim to FTX. He reportedly owned about 630,000 total FTX-related shares through KPC Venture Capital LLC, an entity connected to the Kraft Group.
Using O’Leary’s valuation, the NFL team owner may have lost an eight-figure investment.
Robert Belfer
Billionaire oil baron Robert Belfer, who was once known as the heir to bankrupt gas company Enron, also reportedly lost millions with FTX’s collapse. Two firms linked to the Belfer family held shares in both FTX and FTX US with a combined stake of $34.5 million, according to court documents obtained by the Financial Times. Belfer was also notably entangled in Bernie Madoff’s infamous Ponzi Scheme.
Anthony Scaramucci
Donald Trump’s former communications director was also wrapped up in the FTX collapse with his alternative investment company, SkyBridge Capital. Last September, FTX acquired 30% of SkyBridge Capital, per The Street, and while the details of the deal are unknown, Scaramucci said he was also at a loss despite the purchase.
“We lost money in general because the overall portfolio is going down as a result of this debacle, so yes I guess yes,” he said when asked about the collapse in November at the Bloomberg New Economy Forum in Singapore.
Stephen Curry was one of the many celebrities to endorse FTX with his various commercials and his 2021 partnership with the brand. Like Brady and Bündchen, Curry also got a stake in FTX for his work with the company.
Curry’s team, theGolden State Warriors, was also entangled in the scandal after FTX agreed to pay $10 million for an international rights sponsorship deal that gave the exchange in-area signage, exclusive brand placements, and the rights to the team’s NFTs in December 2021.
Want to learn more about crypto? As the world’s leading crypto expert, @stephencurry30 has got you covered…or does he?
Curry is also named in a class action lawsuit that claims the celebrities who endorsed FTX participated in deceptive strategies to “induce confidence and to drive consumers to invest in what was ultimately a Ponzi scheme,” according to the lawsuit.
Sam Bankman-Fried, Tom Brady, Gisele Bundchen, Kevin O’Leary, Shaquille O’Neal, Udonis Haslem, David Ortiz, William Trevor Lawrence, Shohei Ohtani, Naomi Osaka, and Larry David were also mentioned in the suit.
Naomi Osaka
Tennis star Naomi Osaka also signed a long-term partnership agreement with FTX in March that was supposed to help bring women into the crypto world, according to Reuters. She was given an equity stake in the company and received compensation in the form of crypto.
A four-time Grand Slam champion, @naomiosaka is changing the game on and off the court. We’re incredibly proud to call her our newest partner!
Red Sox baseball legend David Ortiz also signed on to be an FTX ambassador in October 2021 and agreed to be compensated in cryptocurrency, per CoinDesk. At the time, he agreed to release multiple NFT collections, while FTX agreed to sponsor the David Ortiz Celebrity Golf Classic and donate to the David Ortiz’s Children’s Fund. It’s unclear if the fund will be required to repay the donations if they are found to have been made with customer money.
A US federal judge in the Southern District of New York has sentenced Sam Bankman-Fried, founder of bankrupt crypto exchange FTX, to 25 years in prison. In addition, Bankman-Fried has been ordered to forfeit $11 billion.
Last November, at the end of a month-long trial, Bankman-Fried—known colloquially as SBF—was found guilty of seven counts of fraud and conspiracy in connection with the collapse of FTX.
The exchange had fallen to pieces in November 2022 after running dry of funds with which to process customer withdrawals. The money was missing, the jury concluded, because Bankman-Fried had conducted an elaborate fraud whereby billions of dollars’ worth of user funds was swept into a sibling company and used to bankroll high-risk trading, venture bets, debt repayments, personal loans, political donations, and a lavish life in the Bahamas.
In a court filing, the US government described the affair as “one of the largest financial frauds in history.” Bankman-Fried had demonstrated “unmatched greed and hubris” and a “brazen disrespect for the rule of law,” it said.
“The judgment has to adequately reflect the seriousness of the crime. This was a very serious crime,” said Judge Lewis Kaplan, who presided over the case, before delivering the sentence. He cited the “enormous harm” inflicted by Bankman-Fried, the “brazenness of his actions,” and “his incredible flexibility with the truth.”
Kaplan also criticized Bankman-Fried for his conduct on the witness stand during trial. Not only did Bankman-Fried perjure himself, the judge claimed, he was also “evasive” and “hairsplitting” in his responses to the prosecution’s questions. “I’ve been doing this job for almost 30 years, and I’ve never seen a performance quite like this,” said Kaplan.
As Bankman-Fried received the sentence, he stood with his head lowered and hands together, an incongruously placid expression on his face.
The sentencing completes a remarkable fall from grace. Between 2019 and 2022, Bankman-Fried steered FTX to a $32 billion dollar valuation, becoming for a time the world’s youngest self-made billionaire. The 32-year-old fraternized with regulators, politicians, sports stars, and supermodels. He won the adoration of venture capitalists, who fawned over him, and the media, which lionized him as the “next Warren Buffett” and the “Michael Jordan of crypto.” Privately, Bankman-Fried reportedly told others that he aspired to be the President of the United States.
In his sentencing statement, Judge Kaplan cited political aspiration as one of the underlying motives of Bankman-Fried’s crime, pointing to his enormous contributions to candidates on both the left and right as “the biggest political financial crime in history.”
“He wanted to be a hugely politically influential person in this country,” Kaplan said. “The goal was power and influence.”
Instead of that political future—at least for years to come—Bankman-Fried will be consigned to a far less illustrious life in prison.
In considering the appropriate sentence for Bankman-Fried, the judge was required to take into account a blend of factors beyond the details of the underlying crimes. Those include the extent of the financial losses dealt upon the victims, the defendant’s character and history, whether any obstruction of justice had taken place, the likelihood of recidivism, and so forth.
Government exhibit in the case against former FTX CEO Sam Bankman-Fried.
Source: SDNY
While prosecutors are requesting that FTX founder Sam Bankman-Fried spend 40 to 50 years in prison for his crimes, the defense team is urging the judge to consider a sentence that’s roughly 90% shorter.
Bankman-Fried’s fate will be announced in Manhattan on Thursday morning by Judge Lewis Kaplan, who presided over the monthlong trial in November. Bankman-Fried was found guilty of seven charges tied to the collapse of crypto exchange FTX and the roughly $10 billion of customer deposits that went missing.
The hope for Bankman-Fried’s team is that Kaplan takes into account the increased likelihood that FTX customers will be able to recoup most, if not all, of the money they lost when the exchange spiraled into bankruptcy in 2022.
Lawyers representing the bankruptcy estate of FTX told a judge in Delaware last month that they expect to fully repay customers and creditors with legitimate claims. Bankruptcy attorney Andrew Dietderich, who works with FTX’s new leadership team, said “there is still a great amount of work and risk” ahead in getting all the money back to clients, but that the team has a “strategy to achieve it.”
It was a potentially dramatic change in the narrative surrounding FTX’s collapse 16 months ago. At the time, it was believed that many thousands of customers — reportedly up to a million — collectively lost billions of dollars that would be unrecoverable due to the lightly regulated and unsecured nature of the crypto industry. Those clients faced the real possibility that the vast majority of their money had evaporated, just like in other cases of hedge funds and lenders that failed during the so-called crypto winter of 2022.
Much of the government’s successful case against Bankman-Fried hinged on convincing the jury that the defendant had stolen billions of dollars worth of FTX customer money to make risky bets at Alameda.
For months, as FTX has wound its way through a Delaware bankruptcy court, new CEO John Ray III and his team of restructuring advisors have been clawing back cash, luxury property, and crypto, as well as tracking down missing assets. They’ve already collected more than $7 billion, and that doesn’t include valuables like $26 million in gifts and property to Bankman-Fried’s parents, or the $700 million handed over to K5 Global and founder Michael Kives, who invested FTX cash in companies like SpaceX that have since increased in value.
Bankman-Fried’s defense team has asked the court for a sentence in the range of 63 to 78 months. Beyond the fact that he’s a “first time, nonviolent offender,” attorneys for the FTX founder largely lean on the argument that Bankman-Fried’s risky bets paid off and the bankruptcy estate expects to fully repay FTX customers.
It’s a story that Bankman-Fried was trying to sell as he awaited trial.
“FTX US remains fully solvent,” Bankman-Fried wrote in a Substack post on Jan. 12, 2023, while he was under house arrest at his parents’ home in Palo Alto, California. He said the exchange “should be able to return all customers’ funds.”
One key asset in FTX’s portfolio is its stake in artificial intelligence startup Anthropic. Late last week, FTX’s bankruptcy estate struck a deal with a consortium of buyers to sell the majority of its Anthropic holdings for $884 million. Under Bankman-Fried’s leadership, FTX invested $500 million in the startup in 2021 before the boom in generative AI. The company’s valuation hit $18 billion in December 2023, which would put FTX’s roughly 8% stake at about $1.4 billion.
During Bankman-Fried’s trial, Kaplan denied the defense’s request that it be permitted to say that FTX’s investment in Anthropic was a smart bet.
Renato Mariotti, a former prosecutor in the U.S. Justice Department’s Securities and Commodities Fraud Section, told CNBC that the more money the estate is able to recover for clients, the better for Bankman-Fried.
“If true, that is relevant and the judge is required to consider victim restitution at sentencing,” Mariotti said. “But even if victims weren’t harmed, he is still guilty of the offense.”
Mariotti said he expects the sentence to fall somewhere in between what the prosecution and defense are asking, predicting it will be “at least 20 to 25 years.”
Joseph Bankman and Barbara Fried arrive for the trial of their son, former FTX Chief Executive Sam Bankman-Fried, who is facing fraud charges over the collapse of the bankrupt cryptocurrency exchange, at Federal Court in New York City, U.S., October 26, 2023.
Brendan Mcdermid | Reuters
In addition to the Anthropic gains, FTX customers can look at the rebound in crypto for signs of optimism. Bitcoin is trading at close to $70,000, up from less than $17,000 at the time of FTX’s collapse.
Solana fits into a category of so-called “Sam coins,” a group that also includes Serum, a token created and promoted by FTX and Alameda. Solana saw a huge run-up of late, climbing more than eightfold since the end of September.
Meanwhile, FTX’s bitcoin stash, which was worth $560 million at the time of the September report, when the coin was trading at around $25,000, has seen a significant uptick as well. Bitcoin’s value has increased by around 180% since then.
For FTX customers, being made whole, according to a judge’s ruling, means getting the cash equivalent of what their crypto was worth in November 2022. In other words, they’re not seeing any of the upside of FTX’s investments or being given virtual coins that would allow them to cash out at higher valuations.
Braden Perry, who was once a senior trial lawyer for the Commodity Futures Trading Commission, told CNBC that Bankman-Fried faces at least 70 months in prison based on his base level offense, number of victims, sophisticated means and leadership role — even if there’s no monetary loss to the victims. The massive losses that were originally expected would suggest 30 years to life, Perry added.
On March 12, Russian-Swedish national Roman Sterlingov was found guilty of money laundering conspiracy and other violations by a federal jury in Washington, DC, for having operated Bitcoin Fog, a service criminals used to launder what authorities claim was hundreds of millions of dollars in ill-gotten gains.
The conviction was heralded by the US Department of Justice as a victory over crypto-enabled criminality, but Sterlingov’s lawyers maintain the case against him was flawed and plan to appeal. They allege that the nascent science used to collect evidence against him is not fit for the purpose.
The DOJ investigation used blockchain forensics, a technique whereby investigators scrutinize the public trail of crypto transactions to map the flow of funds. In a statement, Lisa Monaco, deputy attorney general for the US, described the DOJ as “painstakingly tracing bitcoin through the blockchain” to identify Sterlingov as the pseudonymous administrator behind Bitcoin Fog.
Bitcoin and other cryptocurrencies have acquired an undeserved reputation for being less traceable than conventional money, but evidence collected this way has brought down many criminals over the past decade. Blockchain forensics was crucial to the trial of Ross Ulbricht, founder of the infamous Silk Road marketplace. But in the Bitcoin Fog case, the defense has pulled this investigative technique into the spotlight, effectively putting crypto tracing on trial in place of their client. The case is a “first-of-its-kind,” says Tor Ekeland, legal counsel to Sterlingov. “Nobody has challenged blockchain forensics before, because it’s brand-new.”
Before Sterlingov’s trial, his attorneys asked the presiding judge to determine the admissibility of evidence from blockchain forensics experts that had used software from a firm called Chainalysis, which expedites the otherwise tedious process of sifting through the blockchain. He ruled the evidence was admissible.
That decision has been characterized by Michael Gronager, Chainalysis CEO, as an endorsement of his firm and its methods. “We are now the only company in the world with a stamp of approval for our ability to look at a blockchain and create evidence,” he says. But Ekeland says he will work with Sterlingov to appeal both the guilty verdict and the judge’s ruling on the validity of blockchain forensics. The conviction of Sterlingov is the latest example of the unhappy phenomenon, claims Ekeland, whereby “newly emergent junk science leads to unjust verdicts.”
Beth Bisbee of Chainalysis, formerly the company’s head of US investigations, disputes that characterization. “The evidence that the government presented to the jury demonstrated the exact opposite,” says Bisbee, who testified as an expert witness at the trial. “Our methods are transparent, tested, reviewed, and reliable.”
Natsec Threat
Until it was shut down by US law enforcement in 2021, Bitcoin Fog supplied what’s known as a crypto mixing or crypto tumbling service. Funds belonging to many parties are pooled, jumbled up, and spat out into brand-new wallets, masking the origin of the coins held in each. Mixers were originally promoted as a way to improve the level of privacy cryptocurrency could afford consumers, but they have been readily co-opted for the purpose of money laundering. Bitcoin Fog was among the first mixers to emerge, in 2011, making it “the longest-running bitcoin money laundering service on the darknet,” the DOJ says.
In the past few years, the US government has cracked down on crypto mixers, which it considers a threat to national security. After taking down Bitcoin Fog, the US Treasury sanctioned Tornado Cash, another mixer, in 2022. The year after, it took down another, ChipMixer, and charged the founder with money laundering. To identify the individuals behind these operations, investigators had to follow the crypto money.
There are a couple of events to watch out for this week, as they could prove pivotal in determining the future trajectory of the crypto market. These events could provide some certainty to the market or cause investors to wait on the sidelines for more favorable market conditions.
Events That Could Affect The Market This Week
Some Federal Reserve officials are scheduled to speak at different events this week. One of them is Governor Lisa Cook, who will give a lecture on March 25. Fed Chair Jerome Powell will also participate in a discussion at the Monetary Policy Conference on March 29.
Their speeches are significant as they could provide valuable insights into the current state of the economy and what to expect from the Federal Reserve regarding interest rates in its fight against inflation. Macroeconomic factors like interest rates usually impact the crypto market and partly determine the sentiments among crypto traders.
The crypto market is usually bullish whenever the Federal Reserve adopts a dovish stance on whether or not to hike interest rates. Therefore, these officials sounding positive in their speeches could help boost investors’ confidence in the crypto market since they would be less worried about things on the macro side.
Meanwhile, several economic data will be released this week, including the Consumer Confidence and Consumer Sentiment data and the Personal Consumption Expenditures (PCE) index. These releases offer insights into the economy’s strength and guide the Fed in deciding on future interest rate decisions.
Crypto Needs A Big Win This Week
Stakeholders and investors in the industry will no doubt hope that the events lined up for this week will provide a momentum boost for the crypto market. Last week was one to forget as things cooled after weeks of seeing the flagship crypto, Bitcoin, and altcoins make significant runs. This downward trend is believed to have been due to some external factors.
One of them is the net outflows that the Spot Bitcoin ETFs recorded throughout last week, with many investors taking profits from the various funds. These Bitcoin ETFs had previously seen an impressive amount of inflows into them, which positively affected Bitcoin’s price. As such, a trend of outflows was also expected to influence Bitcoin’s price, although negatively.
These Spot Bitcoin ETFs will again be in the spotlight this week, with the crypto community waiting to see if the sentiments among the ETF investors will change. A sustained trend of profit-taking this week could spark another decline in the crypto market.
Featured image from CNBC, chart from Tradingview.com
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AUSTIN — There is a sort of clubhouse for Austin’s bitcoin believers on the second floor of the Littlefield Building at the corner of Congress Avenue and Sixth Street. The hideaway is at the crossroads of two worlds — the majestic thoroughfare that leads to the Texas State Capitol and the iconic, albeit notorious, stretch of bars, restaurants, and live music that define the capital’s party vibes. It’s an apt metaphor for the space itself.
The Bitcoin Commons is, at once, many things.
By day, it functions as an open plan, fluorescent-lit co-working space for the more corporate-minded bitcoin operators, but at night, it moonlights as a safe space for underground meet-ups of the industry’s rogue actors. Periodically, it plays host to conferences that draw in a mix of attendees ranging from venture capitalists to armed preppers living entirely off the grid. And on some afternoons, once happy hour hits, the kitchen at the back is retrofit with a stowaway bar.
“We also fund developers, and we help them advance their projects,” said Parker Lewis, one of the stewards of the Commons, as well as the author of a new book on bitcoin called “Gradually, Then Suddenly.”
“We help advance bitcoin through education and actually developing the monetary network, the code base, and the applications,” said Lewis, who is widely considered to be one of Texas’ de facto bitcoin ambassadors.
Francisco Chavarria was born in Mexico City and spent time in Salt Lake City, but three years ago, he made the move to Austin to be a part of a community of like-minded thinkers. His company, Yopaki, which is a neobank for bitcoin focused on the Latin American market, just won first place in a hackathon put on at the Commons.
“If you talk to other builders in the competition, a lot happens here,” said Chavarria. “There definitely is a sense of, ‘I don’t need for others to lose for me to win.’ There really is a relationship and a collaboration for bitcoin to succeed.”
“Right now it feels like we’re all winning because of the price, but those of us who have been building in the bear market, we know,” Chavarria added.
Austin’s “Bitcoin Commons” hosts regular meetups and conferences for the city’s bitcoiners.
CNBC
Bear or bull market, bitcoiners have flocked to Austin because of a combination of pro-crypto policies, abundant, renewable energy, and an ever-growing network of some of the brightest developers and miners on the planet. And even in the price doldrums, they typically bring the same level of enthusiasm to the conversation — though bitcoin’s recent stretch of record-breaking price moves has gone a long way toward boosting morale.
In March, bitcoin hit multiple, fresh all-time highs, as trader enthusiasm for the digital asset sector soared. A lot of that price run-up has to do with the record flows into the newly-launched spot bitcoin exchange-traded funds in the U.S., led by the world’s largest asset manager Blackrock and its $15.5 billion iShares Bitcoin Trust, which have helped to solidify bitcoin’s place as an asset class that’s here to stay.
Collectively, these spot ETFs have brought in around $60 billion, and in some cases, they have been breaking records for ETF flows altogether.
“The biggest driver is certainly the ETF flows, which have surpassed the expectations of all but the most bullish pundits,” said Castle Island Venture’s Nic Carter of bitcoin’s record price moves this month. “And these blockbuster flows have materialized before the major wirehouses, asset managers, and RIAs have actually approved the ETF for their clients.”
Carter added that there is also new liquidity coming into bitcoin from Asian markets via two main pathways: bitcoin’s version of non-fungible tokens known as ordinals, as well as bitcoin-issued coins called BRC20 tokens.
In the last 20 years, Austin has matured into one of the country’s leading tech centers, a trend accelerated by the Covid pandemic, which saw industry leaders migrate en masse from California.
“Bitcoin was founded in 2009. A lot has happened post-financial crisis. Austin was already emerging as a tech center, and you know, enter bitcoin, and it just became the logical home,” said Lewis, who runs business development at Zaprite, a bitcoin-native financial services firm.
It helps that Texas is a libertarian-friendly state that actively supports free market policies. It has proven to be a big draw for a group of people who think of bitcoin as a way of life — that is, a monetary network that is decentralized, borderless, and doesn’t answer to central banks or governments.
Austin’s “Bitcoin Commons” draws in an eclectic mix of people, including venture capitalists, bitcoin miners, and coders.
CNBC
Many hardcore bitcoiners ironically embrace the term maximalist or maxi as a way to self describe. In Texas, though maxis exist along a professional spectrum from venture capitalists, to miners, coders, company executives, and generalist techies, the eclectic tribe have a few things in common. Many are family-oriented, patriotic carnivores with an aversion to the overreach of government and a strong belief in the right to bear arms, among multiple other personal, individual liberties.
Bitcoin’s eponymous Austin lair, which is adorned with the Texas state flag and bitcoin memorabilia, has adopted Chatham House rules for many of its events to protect the identities of those conversing within its walls. One such meetup is the monthly BitDevs (short for bitcoin developers) gathering, where bitcoin builders, investors, and the bitcoin curious are all welcomed, so long as no pictures or videos are taken.
At these meetings, topics run the gamut, from detailed discussions about code to concerns that the Microsoft-maintained GitHub may pose a greater existential threat to the bitcoin network since much of the development work and conversations among coders happen on that platform. At one such gathering, the moderator of the two-hour session asked the room who ran a bitcoin node. More than half of the people in attendance raised their hands.
After attending multiple Austin BitDev meetups over the last three years, a few common conversation themes have emerged, including the focus on identifying threat vectors to the network and brainstorming workarounds. Beyond software, there are also concerns over hardware vulnerabilities, given that the ASIC chip used in bitcoin mining rigs are manufactured out of China, a country which has proven hostile to the crypto sector in recent years.
The “Bitcoin Commons” functions as a sort of clubhouse for the city’s bitcoin believers. It puts on a mix of programming, including conferences and hackathons, as well as hosts a co-working space by day.
The Commons hosted a hackathon, BitDevs, and a one-day conference dubbed the Bitcoin Takeover on the sidelines of the annual South by Southwest tech festival, which put on virtually no crypto programming this year.
Across those multiple gatherings, there was a newfound interest in talking about the burgeoning ecosystem of projects building on top of bitcoin’s blockchain, which began to heat up with the introduction of ordinals in Jan. 2023 — bitcoin’s version of non-fungible tokens.
One underrated driver of bitcoin’s recent rally is new programming innovations that may allow it to reach technological parity with ethereum. These advancements involve beefing up the bitcoin ecosystem with tools like smart contracts, which are programmable pieces of code that help to eliminate middlemen like banks and lawyers from transactions. That makes it easier for developers to create products and applications for consumers.
BitVM, for example, has a promising plan to do just that. It is ultimately trying to bring smart contracts to the bitcoin network, which has helped spur this renaissance of interest in layer two technology — that is, the startups being built on top of bitcoin’s base chain.
“I’ve never seen deal pacing move this aggressively in the bitcoin space in my entire career,” Carter tells CNBC.
Indeed, the VC appetite for these layer two bitcoin projects has been picking up in the last few months.
PitchBook says that the fourth quarter of 2023 was the first time in almost two years that deal value in the crypto sector had increased, reaching $1.9 billion — up 2.5% from the previous quarter. While still well off the 2021 high of $31 billion, funds are building back interest, and trust, in the space.
Grant Gilliam spent 15 years working in private equity in New York before pivoting to run a bitcoin VC fund called Ten31. This investment platform, which is focused exclusively on bitcoin, has invested $125 million of equity in aggregate since launching five years ago. More than $100 million was deployed in the last two years during the bear market.
“We invest across the bitcoin ecosystem across every major theme,” Gilliam told CNBC. “Anything that is relevant to bitcoin infrastructure, we like to say the picks and shovels of companies building products and services for holders of bitcoin.”
Gilliam, who spent a few years commuting from New York to Austin every month for the BitDevs meetup, said that some of the layer two bitcoin investments are more hype than substance, but he’s still bullish overall on the deal space.
“There’s been a lot of L2 hype lately, mainly driven by the ordinals, and inscriptions, developments or innovations, if you want to call it that,” Gilliam said. “There’s a lot of activity in that right now, but we haven’t been as focused on that. It’s our firm view that the ordinals will prove to be a passing fad.”
Gilliam says that Ten31 is focused on basic building blocks of the ecosystem, such as companies that are providing financial services, which could be custody trading and lending, or projects that are working to scale the lightning network.
Lightning, with is the layer two payment technology meant to realize bitcoin’s original vision of being peer-to-peer cash continues to struggle with the issue of reaching scale. Developers tell CNBC that a lot of engineering work remains to close that gap.
The Boys Club put on its own Austin summit on the sidelines of SXSW with programming on the new internet, crypto, and digital culture.
“Number go up” is a big mantra among bitcoiners, but as the community evolves, so too does the thinking about the price of the coin.
“Price is really an output of many inputs of human beings, building tools to make bitcoin both more secure and a greater utility,” Lewis said. “Price is the best indicator of more people coming to the conclusion that bitcoin is money, and it’s a better store of value, so it is very relevant.”
Every four years, bitcoin undergoes a market making event known as the halving. It cuts the production of new bitcoin in half, and it has typically come before a major run-up in the price of bitcoin.
Miners from around the world flocked to Texas when China banned the practice in 2021, attracted by the abundant renewable energy and a grid that’s friendly to flexible buyers of power — both ideal conditions for miners.
In April, however, the profits for these bitcoin miners will be cut in half.
For some, it may prove an Armageddon-level event. Others have braced for impact by swapping out their fleet of machines for more efficient rigs. The price run-up in bitcoin has also helped to give some of these companies a buffer in their profit margins.
West Texas miner Jamie McAvity has 60 megawatts at his mining site. It runs on a part of the grid that is 90% powered by a mix of solar and wind power.
“If you’ve been in for more than one cycle, you have situated yourself in a place where you can resist the halving to the best of your ability,” McAvity told CNBC at Austin’s Bitcoin Commons.
McAvity, who previously worked for ten years as a trader on the floor of the New York Mercantile Exchange, added that ETF flows have helped to change the pricing dynamics for the world’s largest coin.
“The spot ETF inflows are so massive that reducing the available supply of newly mined bitcoins from 900 to 450, is probably going to be immaterial relative to that,” he said.
“But who knows, the ETFs could cool off for a while, and it’s hard for someone to credibly say that a reduction in supply is not going to change the market price equilibrium, because that’s a fundamental principle of market economics,” he added.
A ten minute walk west from the Bitcoin Commons is the Austin Proper Hotel, a five-star establishment where the lighting is intentionally dim to strike a certain mood. Here, the Boys Club, a popular and buzzy, female-led organization which self-describes as a “social collective bringing new voices to the new internet” put on its own crypto conference on the sidelines of South by Southwest.
The Boys Club caters to a more blockchain agnostic crowd, where the focus is less on exclusivity to one coin or chain — and more about borrowing the best features from across the ecosystem to solve problems in the real world.
CNBC caught up with Micha Benoliel at the one-day summit. Benoliel built Nodle, a decentralized wireless network that’s now getting into the business of using the blockchain to battle AI-powered deepfakes.
“Blockchain is the only way to make a record that is immutable, and is going to prove the time at which this photo has been taken, or video, and also to help you prove the location and other elements that are going to reinforce that proof, so it creates a real immutable proof of authenticity,” he said.
The Boys Club put on its own Austin summit on the sidelines of SXSW with programming on the new internet, crypto, and digital culture.
CNBC
The one-day popup event gathered together more of a web3 crowd to talk about everything from the latest trends in tokenization to the resurgence of on-chain meme culture.
Similar to other bull runs in the price of bitcoin, some altcoins have seen a meteoric rise alongside blue chip names in crypto, because they’re seen as a comparatively cheaper buy.
Dogecoin, a meme-coin that was started as a joke, now has a market cap of nearly $25 billion, placing it in the top ten most valuable cryptocurrencies on the planet. Boden, a coin named after President Joe Biden, saw a run-up of more than 800% in a six-hour window after Super Tuesday, and the newly popular DogWifHat is collectively worth more than $2 billion.
Typically, this is the bellwether of a peak bubble moment, but analysts say that despite frothy conditions, this bull run is different to past cycles.
The price of bitcoin is cyclical, and it sees price run-ups roughly every four years. Each time, the price floor is higher. What’s also a departure this time around is the fact that institutional money is here in a way that it hasn’t been during past bull runs.
Fundamentals in the crypto market are playing a big role, as well.
In a note from JPMorgan on Mar. 15, analysts credit ether, the world’s second-biggest crypto token by market cap, for being a significant driver of crypto’s recent gains, including Coinbase‘s stock price rise. Ether has rallied nearly 50% so far this year, recently breaching the $4,000 price level and outpacing bitcoin’s returns, before paring back some gains.
“While the focus of the cryptocurrency marketplace has been the net new money going into U.S. spot Bitcoin ETFs and the positive impact on Bitcoin token prices (here, the spot Bitcoin ETF and its ultimate launch in January has driven the cryptoecosystem over the past several months), we see impact of ETH appreciation also as particularly meaningful,” JPMorgan wrote.
Regulators in the U.S. remain a universal concern for the crypto sector, especially amid reports of the Securities and Exchange Commission probing crypto companies building on the ethereum network.
Still, many in the space, including coders and investors remain optimistic.
Ethereum, the blockchain that underpins ether, underwent a major upgrade on Mar. 13 dubbed Dencun. Developers told CNBC it was expected to slash transaction fees by up to 90%. That is game-changing not just for the end-users, but also for the coders building apps on top of ethereum.
Base, crypto exchange Coinbase’s self-built layer two network, is ethereum-based and allows developers to more easily build decentralized apps. Coinbase’s Base lead, Jesse Pollak, anticipates this will open the door to applications in both the gaming and decentralized social media arena now that it is no longer nearly as cost prohibitive to build these types of programs.
“The thing that is happening with Dencun is we’re going to create a whole new kind of storage on ethereum that’s purpose built for Layer 2s like Base,” Pollak told CNBC.
“That means that right now we pay a ton to ethereum, and we’re going to pay a lot less, which is going to lower the fees for everyone. Because ethereum is basically going to build a product purpose built for us,” continued Pollak.
Chris Dixon, crypto chief at venture firm a16z, echoed that sentiment, noting that part of their portfolio is focused on these startups.
“The core idea is that if you build a social network, or a game or a financial service, on top of the blockchain, it has all sorts of benefits where the money and control flow out to the users and the creators that access the network, as opposed to the companies that control it,” said Dixon. “In the same way that steel was a better way to build bridges and buildings than wood was in the Industrial Revolution, blockchains are a building material.”
The Office of the Colorado State Public Defender has acknowledged personal data may have been stolen during a ransomware attack that crippled the statewide agency in early February — but won’t say much else about the ongoing effort to restore its systems after the hack.
Files “were copied without permission” during the cyberattack, which was discovered on Feb. 9, and those files may have included names, Social Security numbers, driver’s license numbers, medical information and health insurance information, the agency said in a statement Friday.
Officials from the public defender’s office are still investigating whose personal data may have been stolen, and whether the personal data of attorneys or their clients was compromised, they said. A statement on the agency’s website urges “individuals” to remain vigilant against identity theft and fraud.
It’s been more than a month since public defenders across the state were locked out of their computers and files in the ransomware attack and hundreds of court hearings were delayed over the next week because public defenders couldn’t do their jobs.
Officials this week refused to answer questions from The Denver Post about what particular parts of the agency’s systems remain inoperable. In a ransomware attack, hackers use malware to hold an organization’s data hostage then demand a payment in cryptocurrency in order for organizations to regain access to that data.
The public defender’s office also would not disclose the amount of ransom demanded or whether a ransom was paid. A statement on the agency’s website says the office has “made progress in returning to full operations.”
Heavily redacted emails and text messages released to The Post by the Governor’s Office of Information Technology this week in response to an open records request mention the cyberattack recovery law firm Mullen Coughlin. Chief Deputy Public Defender Zak Brown would not confirm whether the public defender’s office is working with the firm.
“We have provided all the information we are able to at this time,” he said in an email.
A message left with the Pennsylvania-based law firm was not returned Wednesday.
The Governor’s Office of Information Technology redacted more than half of the text messages exchanged between members of its office and Colorado Public Defender Megan Ring between Feb. 9 and 23 on the grounds the messages were exempt from the state’s open records law. The office cited exemptions around attorney-client privilege, deliberative process, security arrangements and law enforcement investigations.
“OIT withholds these documents on the grounds that their release would result in substantial injury to the public because it would limit OIT’s ability to engage in honest and frank discussion of cybersecurity issues and provide uninhibited opinions to state agencies, thereby impeding OIT in the performance of its duties,” Chief Information Security Officer Jill Fraser wrote in an affidavit provided with the open records materials.
A South Korean altcoin issuer was arrested by the Seoul Southern District Prosecutors’ Office’s Virtual Asset Crime Joint Investigation Team on March 19, facing fraud charges.
The unnamed individual is accused of defrauding investors of $16.1 million, an arrest that follows after a crypto market maker’s failed attempt to flee by sea in December last year.
On Dec. 20, 2023, the individual, known under the alias Jon Bur Kim and real name Park, aged 42, was intercepted by Coast Guard officials while attempting to escape to China via a fishing boat from Jindo. His escape was hindered by a storm, leading to the boat’s docking at Mokpo.
Park, who had garnered a significant social media following by showcasing his luxury sports car collection, is currently detained and undergoing trial at the Haenam Branch of the Gwangju District Court. He is charged with illegally manipulating coin transaction prices, including providing bribes to crypto exchange employees to artificially inflate prices.
Prosecutors allege that from February 2021 to April 2022, Park collaborated with the arrested token issuer to launch and promote fraudulent cryptocurrencies, commonly referred to as “scam coins.” They are accused of using deceitful practices such as false data disclosure and market manipulation to convince investors of the legitimacy of their coins.
The prosecution further suggests that the duo might have engaged a “coin listing broker” to facilitate the listing of these coins, which subsequently led to rapid price surges, enabling them to sell their holdings for substantial profits.
The case against Park includes investigating his potential involvement in the crimes attributed to the unnamed token issuer as authorities continue to unravel the extent of their collaboration. The incident is part of a broader trend of scrutiny against altcoin issuers in South Korea amid growing concerns over the proliferation of scam coins and the involvement of celebrities in low-cap altcoin controversies.
Meanwhile, on March 8, U.S. prosecutors revealed preparations to appeal a Montenegrin high court ruling on the extradition of Terraform Labs’ former CEO, Do Kwon, to South Korea. The development is part of a complex legal battle involving multiple nations, including South Korea and the United States, both of which are seeking Kwon’s extradition on charges relating to the Terra ecosystem’s $40 billion collapse.
The charges against Kwon in the U.S. include fraud and market manipulation, with South Korea also pressing charges of fraud and capital markets law violations. Kwon’s legal team has shown a preference for his extradition to South Korea, emphasizing the proximity to his family and the potential for a 40-year prison sentence.
In a win for privacy advocates, Airbnb announced on Monday that it will ban the use of indoor security cameras at short-term rental properties around the world. The ban extends to outdoor areas where there is a “greater expectation of privacy,” such as saunas or outdoor showers. The company has long banned the use of hidden cameras and required hosts to tell guests where it has security cameras installed. Hosts who violate the security cam ban could have their properties removed from Airbnb.
Cryptocurrency firm Binance’s troubles have gone from bad to downright scary. Two of the company’s executives—Tigran Gambaryan, a former financial crimes investigator for the IRS, and UK-based government affairs specialist Nadeem Anjarwalla, have been held for weeks by Nigeria’s government amid its broader crackdown on cryptocurrency. Neither man has been charged with any crime, and their families are asking the US and UK governments for help securing their release.
In case you’re wondering: No, the US government isn’t hiding evidence of aliens, according to a new Pentagon report. But it sure seems to be hiding something, raising more questions about what’s out there if that thing isn’t UFOs. Elsewhere in the world of government secrets, the US House Intelligence Committee chair recently held a closed-door meeting in which he urged lawmakers to block privacy reforms to a major US surveillance program by citing how it could be used to surveil US-based protesters, further raising civil liberties concerns. Congress’ efforts to renew that program, known as Section 702, remain ongoing.
Donald Trump this week earned enough delegates in the 2024 Republican primary to officially win the party’s nomination. If Trump does win another term in the White House, experts fear he could use a slate of “emergency powers” to carry out an authoritarian agenda—and there’s little the other branches of government could do to stop him.
Finally, reporters at Der Spiegel, Recorder, TheWashington Post, and WIRED collaborated on an investigation into a global network of violent predators who use major platforms like Discord, Telegram, and even Roblox to target children and extort them into committing horrific acts of abuse—or worse.
And that’s not all. Each week, we round up the security news we didn’t cover in-depth ourselves. Click the headlines to read the full stories, and stay safe out there.
Insurance companies have long offered discounts to drivers who’ll carry GPS devices or download smartphone apps that track their driving habits. But when wary drivers refuse, insurers find other ways of monitoring their driving. Data brokers like LexisNexus are buying people’s car data directly from manufacturers, such as General Motors, which are making a killing by selling it off. This data is then used to create “risk” scores for individual drivers, which insurance providers use to set premiums. The businesses claim the data-sharing is consensual, but most drivers have no idea what’s happening. Drivers whose risk scores are shared with insurance providers often see their monthly insurance payments skyrocket.
The operator of a darknet cryptocurrency “mixing” service called Bitcoin Fog faces a maximum of 20 years in prison after his conviction this week by a federal jury in Washington, DC. Roman Sterlingov, 35, ran Bitcoin Fog between 2011 and 2021, moving roughly $400 million worth of currency, much of which, prosecutors say, was tied to narcotics, identity theft, and cybercrime. Sterlingov had denied founding Bitcoin Fog in interviews with WIRED; however, the US Justice Department countered that claim in court with blockchain analysis and a trial of financial paperwork.
Two commercial safe makers have been called out for installing backdoors in their safes, according to a letter by Ron Wyden, a US senator from Oregon. The reset codes are one reason the Department of Defense has banned the safes from being used inside the US government. Knowledge of the codes, which Wyden says leaves consumers vulnerable to criminals and spies, was made public through a letter he wrote to the National Counterintelligence and Security Center. In it, he asks the agency to issue an alert, warning Americans about the risks posed by the safes.
Federal prosecutors asked a New York judge on Friday to sentence FTX founder Sam Bankman-Fried to between 40 and 50 years in prison for cryptocurrency crimes they described as a “historic fraud.”
Prosecutors made the request as they submitted their presentence recommendations to a federal judge who will sentence the man who at one time dazzled the cryptocurrency world with his promotional skills, including his access to famous people willing to promote his businesses.
Bankman-Fried, 32, is scheduled to be sentenced in Manhattan federal court on March 28 following his November conviction on fraud and conspiracy charges.
Prosecutors say he cost customers and investors in FTX and its related companies at least $10 billion from 2017 through 2022.
He was extradited to the United States in December 2022 from the Bahamas after his companies collapsed a month earlier. Originally permitted to remain at home with his parents in Palo Alto, California, he was jailed last year weeks before his trial after Judge Lewis A. Kaplan concluded that he had tried to tamper with trial witnesses.
In their presentence submission, prosecutors described Bankman-Fried’s crimes as “one of the largest financial frauds in history, and what is likely the largest fraud in the last decade.”
Sam Bankman-Fried leaves Manhattan federal court in New York on Feb. 16, 2023.
Seth Wenig / AP
“The defendant victimized tens of thousands of people and companies, across several continents, over a period of multiple years. He stole money from customers who entrusted it to him; he lied to investors; he sent fabricated documents to lenders; he pumped millions of dollars in illegal donations into our political system; and he bribed foreign officials. Each of these crimes is worthy of a lengthy sentence,” they wrote.
Prosecutors invoke Bankman-Fried’s political donations, bribes
They said his “unlawful political donations to over 300 politicians and political action groups, amounting to in excess of $100 million, is believed to be the largest-ever campaign finance offense.”
And they said his $150 million in bribes to Chinese government officials was one of the single largest by an individual.
“Even following FTX’s bankruptcy and his subsequent arrest, Bankman-Fried shirked responsibility, deflected blame to market events and other individuals, attempted to tamper with witnesses, and lied repeatedly under oath,” prosecutors said, citing his testimony at trial.
FTX’s bankruptcy in November of 2022 cast a cloud over the entire crypto industry, as the sudden collapse of other major industry players vaporized billions in client wealth.
“So many people believed in him, he was a genius,” Natalie Tien, a former FTX employee, told CBS News last year.
Tien said attending the trial of her former boss was cathartic after experiencing months of confusion and depression when his empire collapsed and she too “lost a lot of money.”
Two weeks ago, Bankman-Fried’s lawyers attacked a probation office recommendation that their client serve 100 years in prison, saying a sentence of that length would be “grotesque” and “barbaric.”
They urged the judge to sentence Bankman-Fried to just a few years behind bars after calculating federal sentencing guidelines to recommend a term of five to 6 1/2 years in prison.
They cited their client’s medical conditions, which include autism, as well as his goals to improve the world through his now-defunct crypto exchange, according to the Wall Street Journal.
“Sam is not the ‘evil genius’ depicted in the media or the greedy villain described at trial,” his lawyers wrote. “Sam is a 31-year-old, first-time, nonviolent offender, who was joined in the conduct at issue by at least four other culpable individuals, in a matter where victims are poised to recover —were always poised to recover— a hundred cents on the dollar.”
