State Sen. Wendy Rogers (R-AZ) has introduced a set of bills aimed at making bitcoin legal tender in Arizona and allowing state agencies to accept bitcoin. Bitcoin Magazine reports: The proposed legislation (PDF) aims to recognize bitcoin as a legal form of currency in Arizona, allowing it to be used to pay for debts, taxes and other financial obligations. This would mean that all transactions that are currently done in U.S. dollars could potentially be done with bitcoin, and individuals and businesses would have the option to use bitcoin as they see fit. Specifically mentioning bitcoin alone, the legal tender bill defines bitcoin as, "the decentralized, peer-to-peer digital currency in which a record of transactions is maintained on the Bitcoin blockchain and new units of currency are generated by the computational solution of mathematical problems and that operates independently of a central bank."

The acceptance bill is more broad, saying that, "A state agency may enter into an agreement with a cryptocurrency issuer to provide a method to accept cryptocurrency as a payment method of fines, civil penalties or other penalties, rent, rates, taxes, fees, charges, revenue, financial obligations and special assessments to pay any amount due to that agency or this state." The report notes that Sen. Rogers introduced the same amendment in January 2022, but it "died by the second reading."

CNN remembers how in 2016 Ruja Ignatova "touted her company, OneCoin, as a lucrative rival to Bitcoin in the growing cryptocurrency market." As OneCoin's co-founder, Ignatova told one audience in 2016 that "In two years, nobody will speak about Bitcoin anymore.

"Sixteen months later, Ignatova boarded a plane in Sofia, Bulgaria, and vanished. She hasn't been seen since." Authorities say OneCoin was a pyramid scheme that defrauded people out of more than $4 billion as Ignatova convinced investors in the US and around the globe to throw fistfuls of cash at her company. Federal prosecutors describe OneCoin as one of the largest international fraud schemes ever perpetrated. She is now one of the FBI's 10 most-wanted fugitives, alongside accused gang leaders and murderers, and is the only woman currently on that list....

Ignatova and her partners "conned unsuspecting victims out of billions of dollars, claiming that OneCoin would be the 'Bitcoin killer,'" US Attorney Damian Williams, New York's top prosecutor, said in a statement last month. "In fact, OneCoins were entirely worthless ... (Their) lies were designed with one goal, to get everyday people all over the world to part with their hard-earned money."
One subheading of CNN's story reads "She knew it was a scam from the start, court documents say." While [co-founder] Greenwood and Ignatova were working on the concept for OneCoin, they referred to it in emails as a "trashy coin," federal officials said in court documents. The documents show Greenwood described their investors as "idiots" and "crazy" in an email to Ignatova's brother, Konstantin Ignatov, who also took part in the scam and assumed OneCoin leadership after his sister vanished, according to prosecutors.... She also proposed an exit strategy should the company fail, saying in a 2014 email to Greenwood that they should "take the money and run and blame somebody else for this...."

Ignatova and her partners promised buyers a fivefold or even tenfold return on their investment, according to court documents. A buying frenzy ensued. Between the fourth quarter of 2014 and the fourth quarter of 2016 alone, investors gave OneCoin more than $4 billion, federal prosecutors said, citing records obtained in the course of their investigation. Some $50 million came from investors in the US, according to court documents. "She timed her scheme perfectly, capitalizing on the frenzied speculation of the early days of cryptocurrency," said Williams, the top federal prosecutor in Manhattan.
The FBI is now offering a $100,000 reward for information leading to her arrest, according to the article, which notes this line appearing at the bottom of her FBI wanted poster.

"Ignatova is believed to travel with armed guards and/or associates. Ignatova may have had plastic surgery or otherwise altered her appearance."

Bitcoin's (BTC) 2023 surge continues, with the crypto now above $20,000 for the first time since the FTX collapse in early November. CoinDesk reports: The largest cryptocurrency by market capitalization started the week near the $17,000 mark after hovering in the mid-$16,000 area since mid-December. Now at $20,250, bitcoin has gained more than 20% in the opening two weeks of this year. Still, the crypto -- which topped $65,000 in Nov. 2021 -- remains near the low end of a brutal bear market. Indeed, $20,000 "once [was] deemed a disturbing low but now potentially represents a sign of a revival," according to Craig Erlam, senior market analyst at foreign exchange market maker Oanda.

Also moving nicely higher is ether (ETH), ahead more than 20% year-to-date and threatening $1,500 for the first time since early November. The CoinDesk Market Index (CMI) rose 14% for the week. Crypto-related stocks also benefited from the rally this week: Exchange Coinbase (COIN) was up 39% while bitcoin miner Marathon Digital Holdings (MARA) surged 76%.

One of the prominent developers behind the bitcoin blockchain said he has asked the FBI to assist him in recovering $3.6 million worth of the digital coin that was stolen from his storage wallets on New Year's Eve. From a report: Luke Dashjr is a developer of the Bitcoin Core, an app that runs 97 percent of the nodes making up the bitcoin blockchain. Bitcoin Core derives from the software developed by the anonymous bitcoin inventor who uses the pseudonym Satoshi Nakamoto. That software was called simply Bitcoin but was later changed to Bitcoin Core to distinguish it from the coin. Dashjr has been contributing to the Bitcoin Core since 2011 and has long championed the concept of decentralization that the cryptocurrency was founded on.

On New Year's Day, Dashjr took to Twitter to report that his entire bitcoin holdings -- worth roughly $3.6 million -- were "basically all gone." He said the hack stemmed from the compromise of a PGP (Pretty Good Privacy) key that he used to ensure that his downloads of Bitcoin Core and a smaller app known as Bitcoin Knots weren't laced with malware. He said all his computers were compromised and urged people to hold off downloading new versions for the time being. "So to be clear: DO NOT DOWNLOAD BITCOIN KNOTS AND TRUST IT UNTIL THIS IS RESOLVED," he wrote. "If you already did in the last few months, consider shutting that system down for now." In the same thread, the developer said he had contacted the FBI and police but hadn't received a response. "What the heck @FBI @ic3. Why can't I reach anyone???" he wrote. "I paid those taxes and the police don't care. What a scam."

"Cryptocurrency went through a transformation in 2022," writes CNN, noting that its peak price last year occurred on January 1 of 2022, at over $47,000: Since then, the asset — along with other cryptocurrencies — has seen a steep fall in price, remaining well below $20,000 since early November.... [Current price: $16,585]

In the wake of the FTX collapse, Emily Parker rhetorically asked, "So who will save crypto now?" Whether the currency can be saved at all is a question that divides our prognosticators. [Political commentator] Alice Stewart is the most bullish on the future of bitcoin, predicting that its peak price in 2023 will be $103,000.

[Legal analyst] Elliot Williams isn't too far behind her, guessing the asset will top out at $70,000. [Opinion contributors] Jill Filipovic and Allison Hope, however, don't anticipate a rise in price at all — speculating that its peak value next year will be just $12,000 and $13,000 respectively. "I know nothing about Bitcoin," admits Hope, "but this seems like a conservative gloom and doom figure."
In their larger collection of predictions, two CNN opinion contributors expressed mild hopes for bitcoin Raul Reyes wrote that Bitcoin "seems like the steadiest investment in the volatile crypto world," before predicting its 2023 peak price would be about $29,400.

And Frida Ghitis predicted that "Speculators will swarm in, and Bitcoin will spike up above $36,000 — before falling back to Earth again."

Pro-Bitcoin politician Sitiveni Rabuka recently took office as the new Prime Minister of the Pacific Islands of Fiji. Now, it seems the new PM is actively considering the adoption of bitcoin as legal tender there. Bitcoin Magazine reports: While Rabuka himself hasn't been very public about his opinions on Bitcoin thus far, Lord Fusitu'a, a noble and former member of parliament of neighboring nation Tonga, has reportedly confirmed that the Fijian politician is a bitcoin bull. "The new PM is definitely pro-Bitcoin," Lord Fusitu'a assured Cointelegraph. Lord Fusitu'a also shared the news on Twitter. "A new pro-#Bitcoin friendly Prime Minister in the South Pacific. Fiji's newly elected Prime Minister @slrabuka," Lord Fusitu'a wrote, tagging Rabuka.

In the second part of his tweet, Lord Fusitu'a hinted at the legal tender legislation. "Let's go 2 for 2 - BTC Legal Tender Bills for the Pacific in 2023," the tweet reads, hinting at Tonga's own Bitcoin legal tender legislation that could reportedly go live as early as Q2 2023. The Bitcoin dream first started brewing in Tonga right after El Salvador's Bitcoin Law came into effect.

The crypto wallets associated with now-bankrupt trading firm Alameda Research, the sister company of FTX, were seen transferring out funds just days after the former CEO Sam Bankman Fried was released on a $250 million bond. CoinTelegraph reports: The transfer of funds from Alameda wallets raised community curiosity, but more than that, the way in which these funds were transferred grabbed the community's attention. The Alameda wallet was found to be swapping bits of ERC-20s for Ether/Tether, and then the ETH and USDT were funneled through instant exchangers and mixers. For example, a wallet address that starts with 0x64e9 received over 600 ETH from wallets that belong to Alameda, part of it was swapped to USDT while the other part of the transaction was sent to ChangeNow.

On-chain analyst ZachXBT noted that the Alameda wallet was eventually swapping the funds for Bitcoin using decentralized exchanges such as FixedFloat and ChangeNow. These platforms are often used by hackers and exploiters to hide their transaction routes. Many speculated that the pattern in which these funds are being swapped looks like an exploiter, but given Bankman-Fried's known criminal past now, many speculated it could be an insider job to take out whatever is left in those wallets. Others questioned the bail conditions and asked why was he given access to the internet. One user wrote that the former CEO was "desperately trying to funnel money out," adding, "why did his bail condition include no computer/internet access?"

An anonymous reader shares a report: The investment bank B Riley is so determined to persuade the troubled bitcoin miner Core Scientific to avoid filing for bankruptcy that it has offered as much as $72mn in fresh financing to keep the company from seeking a court-supervised Chapter 11 restructuring. "Bankruptcy is not the answer and would be a disservice to the Company's investors," B Riley wrote in a letter from early December. "It will destroy value for the Company's shareholders, reduce potential recoveries for the Company's lenders, deplete its limited resources and create massive uncertainty for all its stakeholders."

Core Scientific filed for bankruptcy anyway last week. Still, B Riley's aversion should be understandable. A series of players have succumbed to the ongoing crypto winter including FTX, BlockFi, Voyager Digital and Celsius with customer accounts largely frozen. The novel legal issues about digital asset ownership, the continuing problems in the sector and the deliberative nature of US bankruptcy proceedings have kept any of the major companies from exiting court protection yet. The costs are piling up and account holders are noticing. Lawyers, bankers and other advisers in the Celsius case that began in July recently submitted detailed fee requests to the New York federal bankruptcy court totalling $53mn.

Per US law, these official advisers will have these so-called "administrative expenses," subject to court approval, paid by the "estate" or the company which will naturally eat into the recoveries of account holders. Law firms involved including Kirkland & Ellis and White & Case which are usual powerhouses in corporate and private equity bankruptcies are involved in Celsius and have top lawyers billing more than $1,800 per hour. (This may remain a bargain as top lawyers in the FTX bankruptcy at Sullivan & Cromwell are charging in excess of $2,000 per hour).

The Bitcoin network hashrate has dropped by more than 38.8% from its peak, as many U.S.-based miners have been forced to switch down their facilities due to deadly blizzards. From a report: Bitcoin hashrate, the level of computing power used for mining and processing transactions, came in at 155.28 exahashes per second on Saturday, down from 253.88 exahashes on Wednesday, according to data from IntoTheBlock. A winter storm has claimed at least 32 lives across the U.S., as of Monday morning in Hong Kong, according to media reports.

Neal Stephenson coined the phrase "metaverse" in his 1992 book Snow Crash. 30 years later, Stephenson is part of a blockchain startup "optimized for the Open Metaverse" called Lamina1. This week they announced their "first-of-its-kind fund" for investing in early stage Layer 1 blockchain projects ("largely focused" on the Open Metaverse). .

The goal is "to provide broad economic access to global accredited investors looking to support the next era of the internet," according to the announcement — and to also provide Web3 builders "a vehicle for raising capital for their Open Metaverse ventures." The fund will be led by Lamina1's co-founder Peter Vessenes (who, among other things, was the first Chairman of the Bitcoin foundation), "offering investors a chance to join him at the forefront of the emerging Open Metaverse economy..."

"Investors and builders can both apply to participate immediately." The fund launch will be closely followed by the much-anticipated launch of Lamina1's testnet.... The L1EF fund works by allowing accredited investors to access and co-invest in companies and entrepreneurs through quarterly subscriptions.

Investments will be largely focused on the technology and experiences users can access in the Open Metaverse, ranging from immersive computing to open AI at scale. To support the rapid advancement and expansion of the Open Metaverse, L1EF is simultaneously focused on investing in builders and creators who will foster the quality tech and infrastructure necessary to support the protocol, and create immersive experiences that bring Lamina1's vision of an Open Metaverse to life. Some of these early stage projects include layer 2 protocols, DeFi, GameFi, marketplaces, bridges, and many more.

"We're thrilled to introduce L1EF to serve both creators and investors who are actively promoting the development of an Open Metaverse," said Rebecca Barkin, President of Lamina1. "Peter has a deep understanding and demonstrated success of growing economies around a chain, and his approach to grant builders early access to capital — right as we're preparing to place testnet in their hands — is in perfect alignment with our mission to build the open infrastructure that brings together the most powerful creative community on the planet...."

In addition to capital, projects that are part of L1EF will receive early access and support for Lamina1 developer tooling through the forthcoming Lamina1 Early Access Program.
"The team has a front row seat to all happening in the ecosystem," Vessenes said this week, "and essentially gets a 'first look' at what many of the most compelling creators and storytellers of our time are doing, building, making, and producing around the world.

"We want to share that front row seat with as many people as possible."


In 2004 Neal Stephenson answered questions from Slashdot's readers.

Core Scientific, one of the largest miners of Bitcoin, became the latest crypto company to file for bankruptcy as the industry reckons with a plunge in digital-asset prices. From a report: The Austin, Texas-based company listed $1.4 billion of assets against $1.33 billion of liabilities in its Chapter 11 petition, which was filed in the Southern District of Texas. The company's shares, already down 98% this year to trade at a fraction of a dollar, lost a further 40% on Wednesday morning.

Chapter 11 bankruptcy allows a company to continue operating while it works out a plan to repay creditors. Core Scientific said in a statement that it intends to reach a restructuring agreement with a group of convertible bondholders and continue operating its mining and hosting business. The company contributes about 10% of the computing power to secure the entire Bitcoin network. It had 243,000 servers for Bitcoin mining with 143,000 for self-mining. It has provided hosting services to the largest miners in the industry.

Karl Sebastian Greenwood, co-founder of sham "Bitcoin-killer" OneCoin, pleaded guilty in Manhattan federal court to charges of conspiring to defraud investors and to launder money. "Greenwood was arrested in Thailand in July 2018 and subsequently extradited to the US," reports The Register. "OneCoin's other co-founder, 'Cryptoqueen' Ruja Ignatova (Dr. Ruja Ignatova -- she has a law degree), remains a fugitive on the FBI's Ten Most Wanted list and on Europol's Most Wanted list." From the report: "As a founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the largest international fraud schemes ever perpetrated," said US Attorney Damian Williams in a statement. "Greenwood and his co-conspirators, including fugitive Ruja Ignatova, conned unsuspecting victims out of billions of dollars, claiming that OneCoin would be the 'Bitcoin killer.' In fact, OneCoins were entirely worthless." The US has charged at least nine individuals across four related cases, including Greenwood and Ignatova, with fraud charges related to OneCoin. Authorities in China have prosecuted 98 people accused of trying to sell OneCoin. Police in India arrested 18 for pitching the Ponzi scheme.

According to the Justice Department, Greenwood and Ignatova founded OneCoin in Sofia, Bulgaria, in 2014. Until 2017 or so, they're said to have marketed OneCoin as a cryptocurrency to investors. The OneCoin exchange was shut down in January 2017, but trades evidently continued among affiliated individuals for some time. The OneCoin.eu website remained online until 2019. In fact, OneCoin was a multi-level marketing (MLM) pyramid scheme in which network members received commissions when they managed to recruit people to buy OneCoin. The firm's own promotional materials claim more than three million people invested. And between Q4 2014 and Q4 2016, company records claim OneCoin generated more than $4.3 billion in revenue and $2.9 billion in purported profits. At the top of the MLM pyramid, Greenwood is said to have earned $21 million per month. Greenwood and others claimed that OneCoin was mined using computing power like BitCoin and recorded on a blockchain. But it wasn't. As Ignatova allegedly put it in an email to Greenwood, "We are not mining actually -- but telling people shit."

OneCoin's value, according to the Feds, was simply set by those managing the company -- they manipulated the OneCoin exchange to simulate trading volatility but the price of OneCoin always closed higher than it opened. In an August 1, 2015 email, Ignatova allegedly told Greenwood that one of the goals for the OneCoin trade exchange was "always close on a high price end of day open day with high price, build confidence -- better manipulation so they are happy." According to the Justice Department, the value assigned to OneCoin grew steadily from $0.53 to approximately $31.80 per coin and never declined.

More than 100 bitcoins tied to the defunct Canadian crypto exchange QuadrigaCX were transferred out of cold wallets thought to be beyond anyone's control over the weekend, after sitting dormant for more than three years. From a report: The company's bankruptcy trustee, Ernst and Young, did not initiate the transfers, CoinDesk has learned. QuadrigaCX went bankrupt in 2019 after the apparent death of founder and CEO Gerald Cotten. At the time of its collapse, Quadriga was believed to have owed thousands of customers nearly $200 million in various cryptocurrencies -- a staggering failure for what was once Canada's largest crypto exchange.

EY, which is acting as the trustee for Quadriga's estate, announced in February 2019 that it lost control of about 100 BTC after mistakenly sending the coins to Quadriga-operated cold wallets that the Big Four financial services firm said it couldn't access. At the time, the bitcoin was worth around $355,000 (C$470,000).

The world's biggest crypto exchange, Binance, is battling to shore up confidence after a surge in customer withdrawals and a steep drop in the value of its digital token. Reuters reports: The exchange said it dealt with net outflows of around $6 billion over 72 hours last week "without breaking stride" because its finances are solid and "we take our responsibility as a custodian seriously." After the collapse of rival exchange FTX last month, Binance's founder Changpeng Zhao promised his company would "lead by example" in embracing transparency. Yet a Reuters analysis of Binance's corporate filings shows that the core of the business -- the giant Binance.com exchange that has processed trades worth over $22 trillion this year -- remains mostly hidden from public view.

Binance declines to say where Binance.com is based. It doesn't disclose basic financial information such as revenue, profit and cash reserves. The company has its own crypto coin, but doesn't reveal what role it plays on its balance sheet. It lends customers money against their crypto assets and lets them trade on margin, with borrowed funds. But it doesn't detail how big those bets are, how exposed Binance is to that risk, or the full extent of its reserves to finance withdrawals. Binance is not required to publish detailed financial statements because it is not a public company, unlike U.S. rival Coinbase, which is listed on the Nasdaq. Nor has Binance raised outside capital since 2018, industry data show, which means it hasn't had to share financial information with external investors since then.

In an effort to look inside Binance's books, Reuters reviewed filings by Binance units in 14 jurisdictions where the exchange on its website says it has "regulatory licenses, registrations, authorisations and approvals." These locations include several European Union states, Dubai and Canada. Zhao has described the authorisations as milestones in Binance's "journey to being fully licensed and regulated around the world." The filings show that these units appear to have submitted scant information about Binance's business to authorities. The public filings do not show, for example, how much money flows between the units and the main Binance.com exchange. The Reuters analysis also found that several of the units appear to have little activity. Former regulators and ex-Binance executives say these local businesses serve as window dressing for the main unregulated exchange. Binance Chief Strategy Officer Patrick Hillmann said the Reuters analysis of the units' filings in the 14 jurisdictions was "categorically false."

Binance's Hillmann did not comment on the Reuters estimates. "The vast majority of our revenue is made on transaction fees," he said, adding that the exchange has been able to "accumulate large corporate reserves" by keeping expenses down. Binance's "capital structure is debt free" and the company keeps its money made from fees separate from the assets it buys and holds for users, Hillmann said.

Further reading: Binance US To Buy Bankrupt Voyager Digital's Assets for $1 Billion

Slashdot reader lowvisioncomputing shares a story from the CBC about an elaborate heist discovered "when the chief administrative officer of a southwestern Manitoba rural municipality [population: 3,300] noticed the series of unusual cash withdrawals from its bank account...." It began with a job advertisement. A seemingly legitimate company, with a professional website and a Nova Scotia address, claimed it was looking for cash processors. The contract was for one month. Employees could work from home.

They were told they would receive payments to their credit cards, which they would be expected to move to their bank accounts. They would then withdraw the payments, convert them into bitcoin, and send that to another account.... The majority of the 18 people hired were young and lived in various communities across the country.... Anyone who did an internet search for the company would find a professional website, with information matching what was provided in the employment agreement.

In early December 2019, the cybercriminals sent a phishing email to multiple people at the municipal office of WestLake-Gladsone, a municipality about 150 kilometres west of Winnipeg, on the southwestern shore of Lake Manitoba. At least one person clicked on the link, which allowed the hackers to get into the municipality's computers and bank accounts. But weeks went by and nothing happened, so the municipality didn't report it to the police. It was only after the money disappeared that the municipality discovered the two incidents were connected, said Kate Halashewski, who at the time was the assistant chief administrative officer for the Municipality of WestLake-Gladstone....

Court documents say that on Dec. 19, 2019, a person logged into the municipality's bank account and changed the password, along with the personal verification questions. Over the next 17 days, the cyberattackers added the 18 "employees" hired as payees and began systematically making withdrawals, transferring the money to the employees' credit cards. Dozens of withdrawals were made, totalling $472,377, according to court documents — a considerable amount for a municipality with an entire annual budget of $7 million.

Those withdrawals weren't discovered until Jan. 6, when Halashewski saw 48 bank transfers — each less than $10,000 — going to unfamiliar accounts.... Once they'd completed the initial transfers and conversion, the bitcoin was then sent to the private account of the scammers — who cybersecurity experts say likely aren't in Canada....

The municipality finally announced it had lost nearly half a million dollars in an Oct. 12, 2020, news release.... No arrests have been made in connection with the WestLake-Gladstone cyberattack and RCMP say it is no longer under active investigation.

Microsoft has quietly banned cryptocurrency mining from its online services, and says it did so to protect all customers of its clouds. The Register reports: The Windows and Azure titan slipped the prohibition into an update of its Universal License Terms for Online Services that came into effect on December 1. That document covers any "Microsoft-hosted service to which Customer subscribes under a Microsoft volume licensing agreement," and on The Register's reading, mostly concerns itself with Azure. Microsoft's Summary of Changes to the license states: "Updated Acceptable Use Policy to clarify that mining cryptocurrency is prohibited without prior Microsoft approval." Within the license itself there's hardly any more info.

A section headed "Acceptable Use Policy" states: "Neither Customer, nor those that access an Online Service through Customer, may use an Online Service: to mine cryptocurrency without Microsoft's prior written approval." Microsoft appears not to have publicized this decision beyond the Summary of Changes page and, in recent hours, in an advisory to partners titled: "Important actions partners need to take to secure the partner ecosystem." That document states "the Acceptable Use Policy has been updated to explicitly prohibit mining for cryptocurrencies across all Microsoft Online Services unless written pre-approval is granted by Microsoft," and adds: "We suggest seeking written pre-approval from Microsoft before using Microsoft Online Services for mining cryptocurrencies, regardless of the term of a subscription." Microsoft told The Register it made the change because "crypto currency mining can cause disruption or even impairment to Online Services and its users and can often be linked to cyber fraud and abuse attacks such as unauthorized access to and use of customer resources."

"We made this change to further protect our customers and mitigate the risk of disrupting or impairing services in the Microsoft Cloud." Permission to mine crypto "may be considered for Testing and Research for security detections."

Global accounting firm Mazars is pausing its work with all cryptocurrency clients [Editor's note: the link may be paywalled; alternative source] worldwide, soon after it published several "proof of reserve reports" for digital-asset platforms. From a report: Earlier this month, a five-page letter from a partner at the South African affiliate of Mazars reported on the crypto exchange Binance's bitcoin assets and bitcoin liabilities. The letter wasn't an audit report, didn't address the effectiveness of the company's internal financial-reporting controls, and said Mazars did "not express an opinion or an assurance conclusion," meaning it wasn't vouching for the numbers.

An anonymous reader quotes a report from the Australian Financial Review: Members of the inner circle of power at collapsed cryptocurrency exchange FTX formed a chat group called "Wirefraud" and were using it to send secret information about operations in the lead up to the company's spectacular failure. On Monday (Tuesday AEDT) Mr Bankman-Fried denied being part of the chat saying, "If this is true then I wasn't a member of that inner circle (I'm quite sure it's just false; I have never heard of such a group). The news of the chat group heightens concerns about the prospect of wrongdoing by Mr Bankman-Fried and his colleagues. Last week, Mr Bankman-Fried said he no longer had access to many of his own private communications. He was scheduled to testify virtually before the House Financial Services Committee on the 13th, but was arrested by the Royal Bahamas Police Force the day before. That said, Forbes published a transcript of SBF's planned testimony, where he at no point admits fraudulent behavior and does not address the (multi-)billion dollar loans that helped contribute to the collapse.

Most recently, we learned that FTX's chief engineer made a secret change to the cryptocurrency exchange's software that allowed FTX to use client money.

U.S. Senators Elizabeth Warren (D-Mass.) and Roger Marshall (R-Kan.) are introducing a bill to crack down on money laundering and financing of terrorists and rogue nations via cryptocurrency. CoinDesk reports: If it becomes law, the Digital Asset Anti-Money Laundering Act (PDF) will bring know-your-customer (KYC) rules to crypto participants such as wallet providers and miners and prohibit financial institutions from transacting with digital asset mixers, which are tools designed to obscure the origin of funds. The act would also allow the Financial Crimes Enforcement Network (FinCEN) to implement a proposed rule requiring institutions to report certain transactions involving unhosted wallets -- wallets where the user has complete control over the contents rather than relying on an exchange or other third party.

Tether said it is winding down its practice of lending out its own stablecoins to customers by next year, addressing a broad risk to the wider crypto world. From a report: In a blog post published on its website Tuesday, the company said it would reduce secured loans issued and denominated in tether to zero throughout 2023. The growth in Tether's secured-loan program was the subject of a Wall Street Journal article earlier this month. With about $66 billion tether in circulation, tether is the market's largest stablecoin, a digital asset that is supposed to have a fixed value pegged to the U.S. dollar. The appeal of tether is that, unlike bitcoin and other cryptocurrencies that experience volatile price swings, one coin could be sold or redeemed for $1.

Tether isn't a household name, but it is a cornerstone to the crypto ecosystem. Traders often use tether as an easier way to buy crypto than through bank accounts or wire transfers. Stablecoin issuers take pains to demonstrate that they have ample funds available for redemptions. Cash and other safe financial instruments easily convertible into dollars make up the vast majority of the assets Tether lists in quarterly financial reports, but the company's secured-loan program has been growing. Tether can't be certain the loans will be paid back, that it could sell the loans to a buyer for dollars in a pinch or that the collateral it holds will be adequate. That could make it difficult for Tether to cover a large volume of redemptions in a crisis.