Crypto Outlook at The World Economic Forum
Cryptocurrency firm Genesis Global Capital is planning to file for bankruptcy as early as this week, Bloomberg reported today.
The bankruptcy filing has been expected since the November fall of the FTX cryptocurrency exchange.
Meanwhile, the US Justice Department has announced that Anatoly Legkodymov, the Russian operator of the China-based crypto exchange Bitzlato, has been arrested. Bitzlato was a crypto exchange that allegedly worked with the darknet blackmarket Hydra Market, which dealt in illicit trade and served as a safe haven for ransomware attackers, according to the DOJ.
The US Justice Department issued a vague statement on Wednesday that it would “announce a major, international cryptocurrency enforcement action”, and noted that the US Treasury Department would also be making its own statement.
The announcement comes at a time when former FTX crypto exchange CEO Sam Bankman-Fried is facing charges of wire fraud, securities fraud, and conspiracy. The DOJ stressed that criminals using the crypto space for scams and other criminal activity should be aware the agency will use “every tool” to crack down on their activities.
Mr Bankman-Fried’s company – long considered one of the biggest crypto exchanges alongside Binance – declared bankruptcy after allegedly using, and losing, customers’ funds as investment capital.
Crypto companies scale back Davos visibility after year of losses, scandals
In recent years, crypto companies have dominated the promenade at the Davos World Economic Forum, but this year they appear to have scaled back their visibility, CNBC reports.
With the exception of a lone, flash orange crypto-advertising sports car, crypto company advertisements were reportedly far less prominent this year.
An NFT shop that was selling digital tokens alongside images closed up this year after prices for the assets dropped significantly in 2022.
Cliff Sarkin, chief of strategic relations at Casper Labs, told the outlet that the remaining crypto businesses at Davos are “subtantive projects” and “the real deals.”
Graig Graziosi19 January 2023 07:00
FBI says it will ‘relentlessly’ pursue crypto criminals
FBI Assistant Deputy Director Brian Turner said the law enforcement agency would “relentlessly pursue” criminals acting in the crypto space following the arrest of Bitzlato crypto exchange founder Anatoly Legkodymov.
“The FBI will continue to pursue actors who attempt to mask their criminal activity behind keyboards and use means such as cryptocurrency to evade law enforcement,” he said, according to the DOJ. “We, along with our federal and international partners, will work relentlessly to disrupt and dismantle these types of criminal enterprises. Today’s judgment should serve as a reminder the FBI will impose risk and consequences upon those who engage in these activities.”
Mr Legkodymov, a Russian national living in China, was arrested in Miami on Wednesday.
Graig Graziosi19 January 2023 06:00
Financial leaders at Davos World Economic Forum bash crypto, insist traditional institutions are safe
Several financial leaders speaking at the Davos World Economic Forum made clear they did not trust cryptocurrencies, and insisted to attendees that traditional investment and banking institutions were still safe to use.
Senior Minister Tharman Shanmugaratnam of Singapore said that crypto assets were “slightly crazy,” eliciting a laugh from the audience, according to Iris Market IQ.
UBS Chairman Colm Kelleher said that regulators had failed in their ability to police “non-bank” entities, which includes cryptocurrencies.
“Regulators have — with respect — taken their eyes off the ball in terms of the non-banking sector,” Mr Kelleher said, according to Reuters.
European Central Bank Governing Council member Francois Villeroy de Galhau agreed, saying “we should rush to some urgent non-bank regulation starting with cryptos.”
Graig Graziosi19 January 2023 04:59
DOJ says Bitzlato head was aware Hydra transactions were illicit, customers were ‘known to be crooks’
The Department of Justice claims that Bitzlato’s founder, Anatoly Legkodymov, was aware of the illicit nature of Hydra Market transactions, and knew that its users were using false identities while making transactions.
“Bitzlato’s customers routinely used the company’s customer service portal to request support for transactions with Hydra, which Bitzlato often provided, and admitted in chats with Bitzlato personnel that they were trading under assumed identities,” the DOJ said. “Moreover, Legkodymov and Bitzlato’s other managers were aware that Bitzlato’s accounts were rife with illicit activity and that many of its users were registered under others’ identities.”
According to internal chat logs obtained by the DOJ, Mr Legkodymov wrote to a colleague that their customers were “known to be crooks.” Officials at Bitzlato reportedly warned the founder that its users were “addicts who buy drugs [at Hydra]” and “drug traffickers.”
Graig Graziosi19 January 2023 04:00
ICYMI: Crypto market cap hit $1 trillion briefly before diving
Earlier today the crypto market cap touched $1 trillion for the first time since November, just before 2022’s mass sell-off and FTX collapse.
It’s unclear if the drop was the result of the DOJ’s announcement, or due to traders selling at the higher price, or both.
Despite the drop, Bitcoin has remained popular among investors, gaining 30 per cent this year.
Graig Graziosi19 January 2023 03:00
What was ‘Hydra Market’ ?
What was ‘Hydra Market,’ the darknet black market that was one of Bitzlato’s largest customers?
According to the Department of Justice, Hydra Market is “an anonymous, illicit online marketplace for narcotics, stolen financial information, fraudulent identification documents, and money laundering services that was the largest and longest running darknet market in the world.”
“Hydra Market users exchanged more than $700 million in cryptocurrency with Bitzlato, either directly or through intermediaries, until Hydra Market was closed by US and German law enforcement in April 2022,” the DOJ wrote. “Bitzlato also received more than $15 million in ransomware proceeds.”
Graig Graziosi19 January 2023 02:00
ICYMI: Bitcoin price plummets amid major DOJ crypto announcement
The price of bitcoin has fallen by 5 per cent in the space of an hour after the US Department of Justice announced plans to introduce major international cryptocurrency enforcement action.
The world’s leading crypto dropped from $21,500 to around $20,500, reversing an upward trend that had seen its price rise by nearly a third since the start of the year.
Read more from The Independents Anthony Cuthbertson in his story below…
Graig Graziosi19 January 2023 01:00
‘Dr Doom’ economist says ’90 per cent of crypto is a scam’ at Davos
Dr Nouriel Roubini — who is sometimes called “Dr Doom” for his grim economic predictions — said that “literally 90 per cent of crypto is a scam” during the Davos World Economic Forum on Wednesday.
“FTX and SBF are not an exception — they’re a rule,” he said during a Yahoo Finance event.
He went on to predict a forthcoming bust.
“Literally 90% of crypto is a scam. A criminal activity,” he said. “A total real bubble Ponzi scheme that is going bust.”
Graig Graziosi19 January 2023 00:00
ICYMI: Crypto crime network shut down in ‘significant blow’ to fraudsters, DOJ announces
The US Department of Justice has announced that it has dealt a “significant blow” to the crypto crime landscape after arresting a Russian national alleged to have founded a major criminal online platform.
Cryptocurrency exchange Bitzlato processed more than $700 million dollars’ worth of illicit funds, according to the DOJ, advertising its services to users who were “known to be crooks”.
Alleged founder Anatoly Legkodymov was arrested in Miami on Tuesday. Read more from The Independents Anthony Cuthbertson in his story below…
Graig GraziosiJanuary 18, 2023 11:00 PM
Crypto exchange targeted by DOJ responding with ‘oops, sorry’ to customers on automated social media channel
Chinese-based cryptocurrency exchange Bitzlato — whose CEO Anatoly Legkodymov, was arrested by the DOJ in Miami on Tuesday — is responding to its customers through an automated message on Telegraph with the phrase “oops, sorry” along with a sad face emoji, according to NBC News.
The DOJ alleges the company frequently dealt with Hydra Market, an illicit digital marketplace and haven for ransomware attackers. The agency alleged that Mr Legkodymov was aware that his customers were involved in criminal activity and using aliases to hide their identities.
Graig GraziosiJan 18, 2023 9:30 PM
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