As cryptocurrency prices soared last year, no investor bet more on the sector than Andreessen Horowitz. The timing wasn't good. From a report: The storied venture-capital firm had developed a reputation as Silicon Valley's greatest crypto bull, thanks largely to a 50-year-old partner named Chris Dixon who was one of the earliest evangelists for how the blockchain technology powering cryptocurrencies could change business. His unit was one of the most-active crypto investors last year, and in May announced a $4.5 billion crypto fund, the largest ever for such investments.

The timing wasn't good. Prices for bitcoin and other cryptocurrencies have plunged this year in the midst of a broad market downturn, erasing billions of dollars in paper gains for Andreessen's funds. Consumer demand has vanished for some of the firm's most-prized crypto startups, while others are facing increased scrutiny from regulators. Andreessen's flagship crypto fund shed around 40% of its value in the first half of this year, according to people familiar with the matter. That decline is much larger than the 10% to 20% drops recorded by other venture funds, which have largely avoided the risky practice of purchasing volatile cryptocurrencies, according to fund investors. Despite the record cash pile, Andreessen has dramatically slowed the pace of its crypto investments this year.

Gizmodo points out that the United Kingdom's next prime minister, Rishi Sunak, "is a certified Crypto Bro who once requested that the Royal Mint issue an NFT." From the report: During his tenure as finance minister under former PM Boris Johnson, Sunak was in charge of advancing a number of crypto-related initiatives that sought to normalize digital currencies and integrate them into the British economy. By all accounts, he is the first crypto enthusiast to serve in the UK's top office. He's also the first person of color and the youngest PM -- 42 years old -- that Britain's had in 200 years. To be fair, Sunak's efforts at crypto promotion have at least trended towards regulation and taxation as opposed to total laissez faire deregulated madness -- though those efforts could, ultimately, simply normalize a phenomenon that critics say is redundant at best and a privacy hazard at worst. In April, Sunak announced a series of programs to turn the UK into what he called a "global cryptoasset technology hub." Among the initiatives announced at the time was a plan to integrate stablecoins into the national payment system, thus "paving their way for use in the UK as a recognized form of payment." Considered to be the least volatile form of cryptocurrency, stablecoins have seen more interest by governments than other forms of crypto -- though projects like Terra and Tether have shown the potential danger in putting too much faith in the assets' stability.

Sunak's plans also suggested creating additional regulations that would've helped further incorporate crypto into the UK's economic and legal framework, thus spurring greater investment in the space. "The measures we've outlined today will help to ensure firms can invest, innovate and scale up in this country," Sunak wrote in a press release published at the time. Another ambitious initiative pushed by Sunak was the Financial Services and Markets Bill, a piece of legislation that would give local governments in Britain broad discretion to regulate cryptocurrencies, thus further assimilating them into the nation's economy. The bill, which has not yet passed, is currently being looked at by Parliament.

At the same time, Sunak also recently backed a study to look at the potential benefits of creating a central bank digital currency (CBDC), or "Britcoin" as he dubbed it. Proponents of CBDCs argue that they could have benefits for spenders, making payments "faster, cheaper, and more secure," as one op-ed puts it. However, critics argue that they are unnecessary and could ultimately spell huge privacy troubles, given the trackable nature of crypto and digital currencies. Despite his crypto track record, analysts have suggested that is is unlikely Sunak will have time to focus much on any web3-related initiatives in the near term. Given Britain's current economic dumpster fire, any work on "Britcoin" might have to take a backseat.

The US unsealed charges claiming two Chinese intelligence officers tried to obstruct a criminal investigation of Huawei , and alleged others were working on behalf of a "foreign power" to try procure technology and recruit spies. Bloomberg reports: The charges were part of a series of recently unsealed cases the Justice Department announced Monday that officials said had disrupted criminal activity being conducted by the People's Republic of China. Ten of the 13 individuals charged were Chinese intelligence individuals, according to FBI Director Chris Wray. Deputy Attorney General Lisa Monaco added that the case involving alleged obstruction of a US probe of a telecommunications company -- which the DOJ wouldn't identify -- exposes the connection between the Chinese government and its companies. She said the telecom giant tried to "unlawfully gain an edge" to undermine the US investigation, and shows why Chinese companies shouldn't be trusted to handle the personal data of Americans.

In a complaint made public Monday, the US claims Guochun He and Zheng Wang worked on behalf of the Chinese government to target the US, from 2019 until the present, for the benefit of the company. A person familiar with the matter confirmed it is Huawei. The US claims He and Wang bribed a law enforcement employee to provide what they believed was confidential information about witnesses, evidence and possible additional charges to be filed against the technology giant. He paid the employee $61,000 in Bitcoin, according to the criminal complaint. In a separate action, four people were charged in federal court in New Jersey with conspiracy to act as an illegal agent of a foreign government. The conspiracy allegedly involved Chinese intelligence officers posing as academics to recruit US law enforcement workers and others in seeking help procuring fingerprint technology and equipment for the US. They also allegedly pressured one former official to stop protests in the US along the 2008 Olympic torch route, according to court filings.

In addition, the Justice Department announced that seven people from China were charged in an indictment unsealed in the Eastern District of New York last week with conspiring to harass a Chinese citizen living in the US in hopes of causing the person to return. The actions were allegedly part of an effort by China, called "Operation Fox Hunt," to force the repatriation of alleged fugitives living in other countries. In the case involving the Huawei probe, the complaint includes conversations between He and Wang and a US government employee working as a double agent under supervision of the Federal Bureau of Investigation. They were using an encrypted messaging program that is not identified.

Freeway, a UK-based crypto platform that promised annual returns up to a mind-boggling 43%, halted withdrawals on Sunday, according to a notice published to the company's website. Freeway's native cryptocurrency, which goes by the ticker FWT, plummeted 74% following the announcement and, to top it all off, the Freeway website appears to be scrubbing the names and photos of some executives. From a report: Upset users have taken to the community Telegram channel for Freeway, expressing frustration that they can't access their accounts. People who told friends and family members to invest in the platform seemed the most angry, based on comments viewed by Gizmodo early Monday. The news, first reported by the crypto-watcher Twitter account FatManTerra, comes in the wake of other high-profile collapses in the crypto space this year, including Celsius, which has filed for bankruptcy. FatManTerra tweeted on Saturday that they believed Freeway was a Ponzi scheme which would likely collapse by this time next year. Well, apparently we didn't have to wait a whole year for things to collapse. It seems to have happened in just a day, as Freeway's website includes a varied assortment of confusing terms to explain that users can no longer access their money. And it sounds a lot like what Celsius said after it announced it was halting withdrawals back in June.

Harry Halpin helped create uniform cryptography standards for the World Wide Web Consortium, reports Quanta magazine — but "he also wanted to protect the lower, foundational level: the network through which the information is transmitted.

"In 2018, he started Nym Technologies to take on this problem.... Halpin spoke with Quanta from Nym's headquarters in Neuchâtel, Switzerland." Halpin: The trickier problem is this: How do I communicate with you so that no one else knows I'm communicating with you, even if our messages are encrypted? You can get a sense of what people are saying from the pattern of communication: Who are you talking with, when are your conversations, how long do they last...?

There are two key elements: One is the "mixnet," a technology invented by David Chaum in 1979 that my team has improved. It relies on the premise that you can't be anonymous by yourself; you can only be anonymous in a crowd. You start with a message and break it into smaller units, communications packets, that you can think of as playing cards. Next, you encrypt each card and randomly send it to a "mixnode" — a computer where it will be mixed with cards from other senders. This happens three separate times and at three separate mixnodes. Then each card is delivered to the intended recipient, where all the cards from the original message are decrypted and put back into the proper order. No person who oversees mixing at a single mixnode can know both the card's origin and its destination. In other words, no one can know who you are talking to.

Q: That was the original mixnet, so what improvements have you made?

Halpin: For one thing, we make use of the notion of entropy, a measure of randomness that was invented for this application by Claudia Diaz, a computer privacy professor at KU Leuven and Nym's chief scientist. Each packet you receive on the Nym network has a probability attached to it that tells you, for instance, the odds that it came from any given individual.... Our system uses a statistical process that allows you both to measure entropy and to maximize it — the greater the entropy, the greater the anonymity. There are no other systems out there today that can let users know how private their communications are.

Q: What's the second key element you referred to?

Halpin: Mixnets, as I said, have been around a long time. The reason they've never taken off has a lot to do with economics. Where do the people who are going to do the mixing come from, and how do you pay them? We think we have an answer. And the kernel of that idea came from a conversation I had in 2017 with Adam Back, a cryptographer who developed bitcoin's central "proof of work" algorithm. I asked him what he would do if he were to redesign bitcoin. He said it would be great if all the computer processing done to verify cryptocurrency transactions — by solving so-called Merkle puzzles that have no practical value outside of bitcoin — could instead be used to ensure privacy.

The computationally expensive part of privacy is the mixing, so it occurred to me that we could use a bitcoin-inspired system to incentivize people to do the mixing. We built our company around that idea....

A new paper that came out in June shows that this approach can lead to an economically sustainable mixnet....

We are not building a currency system or trying to replace the dollar. We just want to provide privacy to ordinary people.

Bruce66423 shares a report from the BBC: A hacker who stole two unreleased songs from Ed Sheeran and sold them on the dark web has been jailed for 18 months. Adrian Kwiatkowski traded the music by Sheeran and 12 songs by rapper Lil Uzi Vert in exchange for cryptocurrency. The 23-year-old, from Ipswich, managed to get hold of them after hacking the performers' digital accounts, the Crown Prosecution Service said. Kwiatkowski admitted 19 charges, including copyright infringement and possessing criminal property. He had made 131,000 pounds ($148,000) from the music, City of London Police said.

According to police, seven devices, including a hard drive that contained 1,263 unreleased songs by 89 artists, were seized. A document saved on the hard drive summarised the method he had used to obtain them along with a stash of Bitcoin which was seized. In August, Kwiatkowski pleaded guilty at Ipswich Magistrates Court to three charges of unauthorised access to computer material, 14 charges of selling copyrighted material, one charge of converting criminal property and two charges of possession of criminal property. Chief crown prosecutor Joanne Jakymec said Kwiatkowski had "complete disregard" for the musicians' creativity, hard work and lost earnings. "He selfishly stole their music to make money for himself by selling it on the dark web," she said. "We will be pursuing ill-gotten gains from these proceeds of crime."

Former Celsius executive Aaron Iovine has joined JPMorgan Chase & Co as executive director of digital assets regulatory policy, according to his LinkedIn profile, days after the bank's Chief Executive Jamie Dimon blasted cryptocurrencies as fraud and decentralized ponzi schemes. Reuters reports: Iovine was head of policy and regulatory affairs at bankrupt crypto lender Celsius, which he left in September after an eight-month stint. Celsius filed for bankruptcy in July, as risk assets including bitcoin were crushed by monetary policy tightening. Crypto markets were also squeezed by the collapse of major tokens TerraUSD and Luna in May. Mr. Iovine said he has "focused on developing policies that foster responsible innovation while emphasizing consumer protection and regulatory oversight" and has worked on issues related to crypto licensing, anti-money-laundering requirements and cybersecurity standards.

It took more than an hour to mine a block of bitcoin (BTC) on Monday, leaving thousands of transactions stuck in an unconfirmed state. CoinDesk reports: According to on-chain data from several block explorers, the interval between the two latest blocks mined by Foundry USA and Luxor was 85 minutes. According to Mempool, over 13,000 transactions were pending before the latest block was mined.

Last week Bitcoin underwent a difficulty adjustment to ensure block confirmations kept taking place every 10 minutes. With mining difficulty surging to 35.6 trillion it becomes more expensive to mine bitcoin, which heaps pressure on a mining industry that is dealing with soaring energy prices and a crypto bear market. Tadge Dryja, founder of the Lightning Network, tweeted that an 85-minute interval between blocks can be expected to happen once every 34 days, not taking into account difficulty changes.

A token created by Helium, a much-hyped crypto project hailed as one of the best use cases of Web3 technology, will be partially delisted from major cryptocurrency exchange Binance amid reports of poor revenue and misleading marketing at its parent company, as well as the network's abandonment of its native blockchain last month. From a report: In a blog post Thursday, Binance said that it would cease trading Helium Network Tokens, or HNT, with multiple trading pairs over the next week, effectively preventing token holders from exchanging HNT for Bitcoin or other tokens. Binance "strongly advised" people to close out their positions, or else it would "conduct an automatic settlement and cancel all pending orders" relating to HNT and its trading pairs on October 12. Users may continue to spot trade with the HNT/Binance USD (Binance's stablecoin, BUSD) pair.

In a statement to Forbes, Binance spokesperson Jessica Jung said the exchange periodically reviews "each digital asset we list to ensure that it continues to meet a high level of standard. When a coin or token no longer meets this standard or there are changes in the industry, we conduct a more in-depth review and potentially delist it in order to protect our users." In response, Scott Sigel, COO at the Helium Foundation, which manages the community, said in a statement to Forbes that "there is no basis for Binance to delist several HNT pairs. There has been no change to the integrity of HNT and it continues to meet all of the standards the exchange sets."

Crypto lender Celsius' top three executives withdrew $42.13 million in cryptocurrency between May and June 2022, right before the company suspended withdrawals and filed for bankruptcy, new court records show. From a report: According to a Statement of Financial Affairs filed late Wednesday, former CEO Alex Mashinsky, former CSO Daniel Leon and CTO Nuke Goldstein withdrew the funds largely from custody accounts in the form of bitcoin (BTC), ether (ETH), USDC (USDC) and CEL tokens (CEL). Over a dozen other executives, including the company's Chief Compliance Officer, Oren Blonstein, Chief Risk Officer Rodney Sunada-Wong and new CEO Chris Ferraro did not make any significant withdrawals during that time period, according to the document, one of several filed to the Bankruptcy Court for the Southern District of New York. Mashinsky withdrew about $10 million in cryptocurrency in May 2022. Leon withdrew about $7 million (and an additional $4 million worth of CEL denoted as "collateral") between May 27 and May 31. Goldstein withdrew around $13 million (and an additional $7.8 million worth of CEL also denoted "collateral").

California Governor Gavin Newsom vetoed a bill that would require crypto financial-service businesses to get a special license to operate, calling it premature and costly. Bloomberg reports: Newsom on Friday declined to sign the legislation known as the Digital Financial Assets Law, which was passed by the state assembly and senate last month. While the governor said he shares the bill's intent to protect Californians from financial harm and provide clear rules for the industry, his administration has been conducting research and gathering input on the right approach. The bill would require a loan of "tens of millions of dollars" from the general fund during the first several years, a "significant" commitment that needs to be accounted for in the state's annual budget process, Newsom added.

"It is premature to lock a licensing structure in statute without considering both this work and forthcoming federal actions," Newsom said in a statement. "A more flexible approach is needed to ensure regulatory oversight can keep up with rapidly evolving technology and use cases, and is tailored with the proper tools to address trends and mitigate consumer harm."

Code repositories for the Ethereum-based mixer Tornado Cash were relisted on GitHub on Thursday. CoinDesk reports: The U.S. Treasury Department's Office of Foreign Assets (OFAC) banned Americans last month from using Tornado Cash, a decentralized privacy service that mixes cryptocurrencies together to obfuscate the original address. The mixer was blacklisted and designated under the Specially Designated National list because the North Korean hacking group Lazarus had used it in the past.

GitHub is a centralized internet hosting service for software development often used by Ethereum developers. Within hours of the OFAC announcement, GitHub, along with other platforms, removed Tornado Cash from their sites in order to comply with the new U.S. regulation. Ethereum developers -- believing that computer code is protected speech under the First Amendment of the U.S. Constitution -- have called for platforms that host the Tornado Cash code to reverse their bans. In particular, Ethereum core developer Preston Van Loon asked for GitHub to relist the mixer's code on Sept. 13. Further reading: Treasury Says Sanctions On Tornado Cash Don't Stop People From Sharing Code

Coinbase is being sued by Veritaseum Capital LLC, which alleges that the crypto exchange has infringed on a patent awarded to Veritaseum founder Reggie Middleton. CoinDesk reports: According to Veritaseum, Coinbase has used the patent for some of its blockchain infrastructure, and the company is seeking at least $350 million in damages. Middleton and Veritaseum in 2019 settled a case with the U.S. Securities and Exchange Commission (SEC), paying nearly $9.5 million over charges surrounding the initial coin offering (ICO) for the company's VERI token/ "Veritaseum's website says it 'builds blockchain-based, peer-to-peer capital markets as software on a global scale,'" adds Reuters, which first reported the lawsuit. "Thursday's lawsuit accuses Coinbase features including its website, mobile app and Coinbase Cloud, Pay, and Wallet services of infringing a patent covering a secure method for processing digital-currency transactions."

"Veritaseum Capital's attorney Carl Brundidge of Brundidge Stanger said Friday that Coinbase was 'uncooperative' when they tried to settle out of court."

Compute North, one of the largest operators of crypto-mining data centers, filed for bankruptcy and revealed that its CEO stepped down as the rout in cryptocurrency prices weighs on the industry. CoinDesk reports: The company filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas and owed as much as $500 million to at least 200 creditors, according to a filing. Compute North in February announced a capital raise of $385 million, consisting of an $85 million Series C equity round and $300 million in debt financing. But it fell into bankruptcy as miners struggle to survive amid slumping bitcoin (BTC) prices, rising power costs and record difficulty in mining bitcoin. The filing is likely to have negative implications for the industry. Compute North is one of the largest data center providers for miners, and has multiple deals with other larger mining companies.

"The Company has initiated voluntary Chapter 11 proceedings to provide the company with the opportunity to stabilize its business and implement a comprehensive restructuring process that will enable us to continue servicing our customers and partners and make the necessary investments to achieve our strategic objectives," a spokesperson told CoinDesk in an emailed statement. CEO Dave Perrill stepped down earlier this month but will continue to serve on the board, the spokesperson added. Drake Harvey, who has been chief operating officer for the last year, has taken the role of president at Compute North, the spokesperson said. Compute North has four facilities in the U.S. -- two in Texas and one in both South Dakota and Nebraska, according to its website.

Five luxury cars, including two BMWs, two McLarens, and a Lamborghini, have been seized from 23-year-old Aiden Pleterski, the self-described "crypto king" of Canada, during bankruptcy proceedings according to a new report from the CBC. But those cars are only worth a fraction of the $35 million that Pleterski allegedly took from investors who thought he'd make them rich in the cryptocurrency market, and it's not clear whether they'll ever see their money again. Gizmodo reports: Pleterski and his company AP Private Equity Limited are facing at least two civil lawsuits after 140 people have come forward to say they invested a combined $35 million with Pleterski. Those people believed they were investing in cryptocurrency, and Pleterski's online presence -- including photos of the 23-year-old on private jets and next to luxury cars-- helped create the image that he knew what he was doing.

Pleterski's YouTube channel and Instagram account have been deleted but it appears he purchased articles on websites like Forbes.mc (the top level domain for Monaco) and the far-right news outlet Daily Caller to get his name associated with success in crypto investment. The Daily Caller article from December 2021 includes a photo of Pleterski looking at his phone in what appears to be a private jet. Notably, December 2021 was a time when cryptocurrencies like bitcoin and ethereum were trading near all-time highs. The headline reads, "Aiden Pleterski: Meet the Young Canadian Investor Who Is Taking the World of Crypto By Storm."

The question remains whether Pleterski actually invested any of the money in crypto to begin with, and speaks to just how strange the crypto market has been over the past year. For all anyone knows, Pleterski may have actually invested the money and lost it like so many others since the peak of November 2021. Bitcoin is down 56% since its price a year ago, while ethereum is down 57%. Pleterski insists he invested the money but that he's just bad with record-keeping. But some investors suspect Pleterski didn't even bother investing the money, instead pocketing it for himself, according to people who spoke with the CBC. Investors are trying to get their money back through the bankruptcy court and two civil lawsuits, but criminal charges haven't been pursued, even though some have reported their incidents to Toronto police, according to the CBC.

Jamie Dimon didn't mince words when a US lawmaker mentioned the executive's history of criticizing cryptocurrencies. From a report: "I'm a major skeptic on crypto tokens, which you call currency, like Bitcoin," the JPMorgan Chase chief executive officer said in congressional testimony Wednesday. "They are decentralized Ponzi schemes." Stablecoins -- digital assets tied to the value of the US dollar or other currencies -- wouldn't be problematic with the proper regulation, and JPMorgan is active in blockchain, Dimon said. The comments represent the latest criticism leveled against digital currencies by Dimon, who once called Bitcoin "a fraud" before eventually saying he regretted the comments.

Coinbase Global has been searching for new ways to make money. One business it flirted with was controversial: using its own money to speculate on cryptocurrencies. WSJ: Last year, Coinbase -- which operates a large cryptocurrency exchange that handles bitcoin and other digital coins -- hired at least four senior Wall Street traders and launched a group to generate profit, in part, by using the company's cash to trade and "stake," or lock up, cryptocurrencies, according to people close to the matter. The activity was described as "proprietary" trading by the people at the company. Earlier this year, the team completed a $100 million transaction that the group viewed as a test trade of the new effort, according to the people. The transaction came after Coinbase executives testified to members of Congress last year that the company didn't buy and sell digital currencies for its own account. The monthslong effort to launch the Coinbase Risk Solutions group underscores how Coinbase, which has seen its shares tumble about 70% over the past year, has entertained more aggressive strategies as it tries to develop new businesses. Coinbase says some at the company examined pursuing proprietary trading but decided against it.

Jesse Powell, co-founder of crypto exchange Kraken, is planning to step down as CEO, Kraken confirmed with CoinDesk. The Wall Street Journal first reported on the news. From the report: Kraken's current chief operating officer, Dave Ripley, will take over as CEO once someone is hired to fill Ripley's position. According to a press release issued by the company, Powell plans to remain involved with Kraken. He will become chairman of Kraken's board and will continue working on product development and crypto industry advocacy.

The outspoken Powell, an early advocate of bitcoin (BTC) who founded Kraken in 2011, has been at the center of several company-related controversies this year. In June, Powell criticized a contingent of "woke activists" inside the company and told unhappy employees to quit, sparking a social-political debate that roiled the crypto industry and beyond. In July, reports emerged that Kraken was being investigated by the U.S. Treasury Department for allegedly allowing Iranian users to use the platform -- a violation of international sanctions against the Iranian regime.

Powell has denied that these controversies spurred his decision to step down as CEO, telling Bloomberg that he informed Kraken's board of his impending departure over a year ago. Instead, he chalked up the decision to something much more banal -- boredom. "As the company has gotten bigger, it's just gotten to be more draining on me, less fun," Powell told Bloomberg.

Craig Wright told a Norwegian court on Wednesday that he "stomped on the hard drive" that contained the "key slices" required to grant him access to Satoshi Nakamoto's private keys, making it "incredibly difficult" to cryptographically prove he is the creator of Bitcoin -- a title he has claimed but failed to prove since 2016. From a report: Wright's inability to back up his claims with acceptable evidence is the issue at the center of his trial in Norway, one of two simultaneous legal battles between Wright and crypto Twitter personality Hodlonaut (real name Magnus Granath) over a series of tweets Hodlonaut -- then, a public school teacher with roughly 8,000 Twitter followers -- wrote in March 2019, deeming Wright a pretender and calling him a "scammer" and a "fraud."

Wright previously attempted to prove he was Satoshi in 2016 by demonstrating "proof" that he controlled Satoshi's private keys -- first, in private "signing sessions" with Bitcoin developer Gavin Andresen and former Bitcoin Foundation Director Jon Matonis (Andresen later said he'd been "bamboozled" by Wright and Matonis went on to work for a company owned by Wright), and later, in a public blog post offering "proof" that was thoroughly debunked by several well-known cryptography experts. In Norway, however, Wright is no longer attempting to convince the court he is Satoshi with cryptographic evidence -- partly because he claims to have intentionally destroyed his only proof shortly after attempting suicide in May 2016, following his signing session with Andresen, and partly because he now claims cryptographic proof is inconclusive and that "identity is not related to keys."

Poolin, one of the world's biggest crypto mining pools, is suspending bitcoin and ether withdrawals from its wallet service due to "liquidity problems." From a report: "As you may have known, Poolin Wallet is currently facing some liquidity problems due to recent increasing demands on withdrawals. But please be assured, all user assets are safe and the company's net worth is positive," the firm said in an announcement Monday. Poolin said that it would "make a snapshot of the remaining BTC and ETH balances on pool on September 6th to work out the balances." "The daily mined coins after September 6th will be normally paid out per day. Other coins are not affected. The details of payout schedule for remaining balances will be released when details are set," the post continued. The Beijing-based company is among the latest industry firms to suspend withdrawals due to liquidity problems amid this year's decline in crypto asset prices. Lenders Voyager Digital and Vauld both halted withdrawals in July. Voyager has since begun restoring some access to customers.