It's the one-year anniversary of El Salvador's adopting Bitcoin as a legal tender, so Bloomberg follows up, finding a country where "Adoption has moved slowly, and steep declines in Bitcoin's price from those lofty levels last fall have dampened the early euphoria that swept across the nation."

"Bitcoin hasn't replaced El Salvador's hard currency, the U.S. dollar — it's not even close — but it also hasn't brought the financial ruin that some warned of either. Or not yet anyway." "No one really talks about Bitcoin here anymore. It's kind of been forgotten," said former El Salvador central bank chief Carlos Acevedo. "I don't know if you'd call that a failure, but it certainly hasn't been a success...."

As part of the rollout, Salvadorans were offered government-issued digital wallets preloaded with $30 worth of Bitcoin to help kick things off. Under the law, taxes can be paid in Bitcoin and businesses should accept it as a form of payment, unless they are technologically unable to do so. But the coin's volatility has spooked users, and cryptocurrency has seen broader acceptance in countries with poor payment networks or strict currency controls, such as Argentina, Venezuela and Cuba, Acevedo said. "In El Salvador we have a good payments network, so why transfer money with cryptocurrency?" he said.

Most Salvadorans haven't poured large amounts of money into Bitcoin, saving many from the recent bear market, Acevedo said. The same can't be said of the government itself, which started purchasing the token last year in the run-up to its launch as legal tender and has continued to add to its stockpile, conspicuously "buying the dip" during periods when Bitcoin declined. The result? It's sitting on losses. [Later the article points out "The government's 2,381 Bitcoin bought with public funds are worth $47.2 million at current prices, less than half what the administration paid for them."] A series of recent surveys found that only a relatively small minority of respondents continue to use digital wallets and few businesses have registered transactions in Bitcoin. And the central bank says only 2% of remittances have been sent via cryptocurrency wallets.

The government is still claiming victory, however. Bitcoin has attracted foreign investment and tourism and increased financial access to a largely unbanked population, according to Finance Minister Alejandro Zelaya. The government says its digital wallet, Chivo, has more than 4 million users. Tourism is on pace to surpass pre-pandemic levels this year and the central bank says 59 cryptocurrency and blockchain companies have registered offices in El Salvador.
Other observations from Bloomberg:

• While El Salvador's president remains popular, a May poll by a local university found 71.1% of respondents said the Bitcoin law didn't improve their family's finances.... "If you go to any market in El Salvador, you're more likely to receive an insult than be able to purchase something in Bitcoin," said the director of the university's public opinion institute. "It's not a part of people's daily routine."

• The IMF "has held off on approving a $1.3 billion program for the country citing risks from Bitcoin."

• Plans are still on for a Bitcoin-backed "volcano token".

Faruk Fatih Ozer, the founder and CEO of the now-defunct crypto exchange Thodex, has been arrested in the Albanian city of Vlore. PC Gamer reports: Ozer fled following the collapse of Thodex in April 2021: he initially claimed a halt in trading was due to cyberattacks, and that investors' money was safe, before disappearing. Almost immediately afterwards, Turkish police arrested dozens of Thodex employees and seized the firm's computers. It subsequently emerged that, in April 2021, Thodex had moved approximately $125 million worth of bitcoin to the established US crypto exchange Kraken. Given the number of investors in Thodex left with nothing, this looks like straightforward theft from a failing business.

It's not the whole story, either. Cryptocrime analysis firm Chainanalysis addressed Thorex specifically in its overview of 2021, in the wider context of a total $2.8 billion worth of crypto scams over this year being 'rug pulls': wherein a seemingly legitimate business is set up, operates as normal for a while, then suddenly all the money is gone. It's large-scale fraud. "We should note that roughly 90% of the total value lost to rug pulls in 2021 can be attributed to one fraudulent centralized exchange, Thodex, whose CEO disappeared soon after the exchange halted users' ability to withdraw funds," says the Chainanalysis report. That works out at an estimate of around $2.5 billion of crypto.

Six people have already been jailed for their role in Thodex, including family members of Ozer, while 20 other prosecutions are ongoing. The Turkish daily Harriyet reports that state prosecutors are out to set an example: "A prison sentence of 40,564 years is sought for each of these 21 people, including Ozer, as over 2,000 people are included in the indictment as complainants."

An anonymous reader shares a report: Partha Ranganathan came to realize about seven years ago that Moore's law was dead. No longer could the Google engineering VP expect chip performance to double roughly every 18 months without major cost increases, and that was a problem considering he helped Google construct its infrastructure spending budget each year. Faced with the prospect of getting a chip twice as fast every four years, Ranganathan knew they needed to mix things up. Ranganathan and other Google engineers looked at the overall picture and realized transcoding (for YouTube) was consuming a large fraction of compute cycles in its data centers. The off-the-shelf chips Google was using to run YouTube weren't all that good at specialized tasks like transcoding. YouTube's infrastructure uses transcoding to compress video down to the smallest possible size for your device, while presenting it at the best possible quality.

What they needed was an application-specific integrated circuit, or ASIC -- a chip designed to do a very specific task as effectively and efficiently as possible. Bitcoin miners, for example, use ASIC hardware and are designed for that sole purpose. "The thing that we really want to be able to do is take all of the videos that get uploaded to YouTube and transcode them into every format possible and get the best possible experience," said Scott Silver, VP of engineering at YouTube. It didn't take long to sell upper management on the idea of ASICs. After a 10-minute meeting with YouTube chief Susan Wojcicki, the company's first video chip project was approved. Google started deploying its Argos Video Coding Units (VCUs) in 2018, but didn't publicly announce the project until 2021. At the time, Google said the Argos VCUs delivered a performance boost of anywhere between 20 to 33 times compared to traditional server hardware running well-tuned transcoding software. Google has since flipped the switch on thousands of second-gen Argos chips in servers around the world, and at least two follow-ups are already in the pipeline.

Bitcoin represents 40% of the $1 trillion outstanding crypto assets, according to Forbes' director of data and analytics. "An estimated 46 million adult Americans already own it according to New York Digital Investment Group..."

"But can you trust what your crypto exchange or e-brokerage reports about trading in the most important digital currency?" One of the most common criticisms of bitcoin is pervasive wash trading (a form of fake volume) and poor surveillance across exchanges. The U.S. Commodity Futures Trading Commission defines wash trading as "entering into, or purporting to enter into, transactions to give the appearance that purchases and sales have been made, without incurring market risk or changing the trader's market position." The reason why some traders engage in wash trading is to inflate the trading volume of an asset to give the appearance of rising popularity. In some cases trading bots execute these wash trades in tokens, increasing volume, while at the same time insiders reinforce the activity with bullish remarks, driving up the price in what is effectively a pump and dump scheme. Wash trading also benefits exchanges because it allows them to appear to have more volume than they actually do, potentially encouraging more legitimate trading.

There is no universally accepted method of calculating bitcoin daily volume, even among the industry's most reputable research firms. For instance, as of this writing, CoinMarketCap puts the latest 24-hour trading of bitcoin at $32 billion, CoinGecko at $27 billion, Nomics at $57 billion and Messari at $5 billion....

As part of Forbes research into the crypto ecosystem using 2021 data, we ranked the 60 best exchanges in March. More recently we conducted a deeper-dive into the bitcoin trading markets.... Our study evaluated 157 crypto exchanges across the world. Here are our main findings:


- More than half of all reported trading volume is likely to be fake or non-economic. Forbes estimates the global daily bitcoin volume for the industry was $128 billion on June 14. That is 51% less than the $262 billion one would get by taking the sum of self-reported volume from multiple sources....

- The biggest problem areas regarding fake volume are firms that tout big volume but operate with little or no regulatory oversight that would make their figures more credible, notably Binance, MEXC Global and Bybit. Altogether, the lesser regulated exchanges in our study account for approximately $89 billion of the true volume (they claim $217 billion).
Forbes adds that their report "builds on top of the important work done by other digital asset researchers such as Bitwise, which estimated in a March 2019 white paper that 95% of CoinMarketCap's bitcoin trading volume was fake and/or non-economic."

Their article includes some other interesting findings, including an observation that Tether "continues to be a dominant player in the crypto trading economy, especially when it comes to trades against bitcoin. Its current market capitalization is $68 billion, despite questions about its reserves."

Thanks to Slashdot reader rrconan for sharing the article...

An anonymous reader quotes a report from Motherboard: Hackers are breaking into unsuspecting victims' Cash App accounts, a massively popular payment app, and stealing hundreds of dollars, according to victims Motherboard spoke to. In one person's case, they said, Cash App has not reimbursed them for the stolen funds. "It's scary!" Liz Shelby, who said their son was a victim of the hacking, told Motherboard in an online chat. "My son saved up some cash for a small vacation with his grandma. We put it in his Cash App before he left. He called me on Aug. 9, and told me that his money was gone." Shelby said that after she looked at the account she found that someone else had logged into it and sent themselves the money. Shelby said she's been emailing Cash App support, without success. Marvis Herring, another target, told Motherboard that hackers attempted to steal $1,400, in the form of two installments of $700. In those cases, Herring believes his bank blocked the fraudulent transactions.

Motherboard saw many other people reporting on social media that their Cash App accounts had been compromised in some way. "The main thing I thought was weird is that I went to change my account password and there really isn't a password for Cash App accounts," Herring added. When users sign up to Cash App, they can use either an email address or a phone number to open an account. After doing so, they receive a login code sent to either of those. On fraud websites, dark web marketplaces, and social media, multiple people appear to be selling login details associated with Cash App accounts. Some of these peoples' listings specify that the logs contain the email address and password for a linked email account. Some of the listings may be scams, but those on the dark web marketplaces come from fraudsters who have received positive feedback from alleged customers, according to the review system that is common on such sites. One listing for hacked Cash App accounts said the vendor has sold that specific item multiple times.

Fraudsters also appear to be offering Cash App accounts for another purpose: laundering money. Motherboard found multiple listings on a dark web marketplace offering these newly created and verified accounts. Cash App requires users to verify their identity to use some features, and this can require them providing their Social Security Number with the platform. These already verified accounts will allow fraudsters to buy Bitcoin through the Cash App without having to verify their identity, the listing suggests. [...] On its website, Cash App encourages users to make sure their linked email address has two-factor authentication enabled. The app also has an extra feature called Security Lock which means that each transfer requires the user to enter a PIN. "Preventing fraud is critically important to Cash App. We continue to invest in and bolster fraud-fighting resources by both increasing staffing and adopting new technology. We are constantly improving systems and controls to help prevent, detect, and report bad activity on the platform," a Cash App spokesperson told Motherboard in a statement. "For those who believe they have fallen victim to an identity-theft or account take-over scams, we encourage them to reach out to Cash App Support where we will review the account in question. If deemed fraudulent, we will take the necessary action starting with account closure and disablement of all applicable products."

A group of hackers managed to impersonate Binance chief communications officer (CCO) Patrick Hillmann in a series of video calls with several representatives of cryptocurrency projects. The attackers used what Hillman described as an AI hologram, a deepfake of his image for this objective, and managed to fool some representatives of these projects, making them think Hillmann was helping them get listed on the exchange. From a report: Hackers and scammers are refining their methods by including more technological tools in their schemes. Binance chief communications officer (CCO), Patrick Hillmann, reported last week about a new and sophisticated way in which attackers have used his image to perform a listing scam operation. Hillmann stated that hackers managed to program an AI (artificial intelligence) hologram of him, a kind of deepfake that was used to scam representatives of several cryptocurrency projects in Zoom calls. The hologram was able to fool these projects into believing that they were being considered for listing on Binance and that Hillmann was part of this operation. The listing scheme was discovered when these members contacted Hillmann to thank him for his help in the alleged listing opportunities. However, he had no knowledge of these meetings because he is not part of the listing process at Binance.

Gary Gensler, the chair of SEC, writes in an op-ed: We can dispense with the idea that crypto lending isn't subject to regulation. On the contrary, the rules have been around for decades. The platforms aren't following them. Noncompliance isn't the inevitable result of the crypto business model or underlying crypto technology. Rather, it is as if these platforms are saying they have a choice -- or even worse, saying "Catch us if you can." As I said in a speech last year, "Make no mistake: If a lending platform is offering securities, it ... falls into SEC jurisdiction." On many occasions, the commission and state regulators have addressed how the relevant case law implicates crypto assets, including crypto lending.

There are costs of complying with securities laws, just as there are costs to car makers of adding seat belts. Platforms that offer crypto lending need to comply anyway, not merely because that's the law, but also because it helps protect investors and increase trust in our markets. Fortunately, there is a path forward. I encourage platforms offering crypto lending to come in and talk to SEC staff. Getting these platforms into compliance with the securities laws will benefit investors and the crypto market. In the meantime, the SEC will serve as the cop on the beat. As with seat belts in cars, we need to ensure that investor protections come standard in the crypto market.

Matt Damon's pitch to invest in crypto has disappeared from US television sets. Same goes for glitzy commercials starring LeBron James and Tom Brady. From a report: The drop in national TV marketing by the industry in the US has coincided with the selloff in Bitcoin and other crypto assets, according to the TV-ad measurement company ISpot.tv, which tracks the spots. Damon's commercial for Crypto.com, which ends with him uttering "fortune favors the brave," last aired in February during the Super Bowl. The four-month national campaign cost an estimated $65 million, according to ISpot, exceeding the outlays by others in investment services, including giants such as Fidelity and Vanguard, over the same stretch.

"Ad sellers shouldn't expect growth in this vertical the remainder of the year due to the crash in crypto valuations and emerging allegations of fraud among companies in the crypto market," said Eric Haggstrom, director of business intelligence at Advertiser Perceptions, an industry researcher. "Crypto has been a boom and bust industry since its inception, and advertising budgets will follow the same trajectory." Spending by major crypto firms, including the trading platforms Crypto.com, Coinbase and FTX, fell to $36,000 in July in the US, according to ISpot. That's the lowest monthly total since January 2021 and is down from a high of $84.5 million in February, when the industry flooded the airwaves around the Super Bowl.

An anonymous reader shares a report:Back in November 2021, cryptocurrencies, which saw a huge surge during most of the pandemic, suddenly began to nosedive. Joe Hovde, a New York-based data scientist, decided that this might be his moment to buy into crypto: He took a risk on the price plunge and bought some Ethereum, the next most popular crypto asset after Bitcoin, on Coinbase, a crypto exchange. A couple of months later, Hovde started getting emails from Coinbase notifying him of swings in the prices of Ethereum, Bitcoin, and other tokens. Though already a steady consumer of financial news and current events, Hovde used the notifications to passively keep tabs on his investment while juggling other things. So when crypto assets began to take another nosedive in April 2022, Hovde noticed that at some point, the emails seemed to have stopped coming.

Hovde, who has worked on projects culling trends and patterns from large data sets for both tech companies and media outlets, scraped his inbox and confirmed that he'd received no emailed price notifications from the end of February to when they started back up again at the beginning of June; during that time period, Bitcoin, Ethereum, and other currencies lost dozens of percent worth of value in the thousands and tens of thousands of dollars. Coinbase's decision to stop email notifications in the middle of a dramatic cryptocurrency crash has not been previously reported. But academics who spoke to Mother Jones note that Coinbase's decision likely contributed to losses for retail crypto investors who may otherwise have sold their holdings ahead of further devaluation. The change to price updates could run afoul of federal or state consumer protection laws, they said, particularly if it hurt the wallets of any of the relatively inexperienced traders who flocked to crypto in droves during the pandemic.

Union-organizing startup "Unit of Work" received a $1.4-million pre-seed investment led by the venture capital arm of billionaire Mike Bloomberg, reports the Los Angeles Times.

The startup's outside investors "have made fortunes backing technologies such as artificial intelligence, cryptocurrencies and video games. One is among California's foremost critics of public-sector labor unions." But the head of the startup's lead investment firm says that "whenever a community has a want that's going unfilled, there's an opportunity for companies." [T]hese people used to multibillion-dollar sales and IPOs see a big opportunity in the atomized, restive condition of America's workforce and the possibility of transforming it through a new era of unionization. "We only invest in areas where we think we can get a return," said Roy Bahat, head of Bloomberg Beta, the venture arm of billionaire Mike Bloomberg's media empire.

Unit's business model works like this: The startup's organizers provide free consulting to groups of workers organizing unions within their own workplaces — helping them build support to win elections, advising them on strategy in contract-bargaining sessions, guiding them through paperwork filings and around legal obstacles. Once a contract is in place, members of the new union can decide to pay Unit a monthly fee — similar to traditional union dues — to keep providing support.... Once the company starts earning income, it plans to buy out its investors and give their equity to the unions it helped organize, effectively transitioning corporate control to the customer base.

The approach has attracted some strange bedfellows. The second investment firm in the round, Draper Associates, is led by Tim Draper, a third-generation venture capitalist, bitcoin evangelist and outspoken critic of organized labor... [H]e launched a ballot initiative to ban public-sector unions in California.... "Unit of Work is making unions decentralized," Draper wrote in an email explaining his investment. "That will be awesome. Centralized unions tend to restrain trade, and government unions create bloated bureaucracy and poor government service on the whole.... "

Despite Draper's enthusiasm for independent unions, as opposed to nationally affiliated labor organizations, Unit's leaders and its website make clear that they support their clients if they decide to affiliate with a larger union.

In preliminary second-quarter financial results announced today, Nvidia's year-over-year growth is "down from a previously forecasted $8.1 billion, a miss of $1.4 billion," reports Ars Technica. "Nvidia blamed this shortfall on weaker-than-expected demand for its gaming products, including its GeForce graphics processors." The full results won't arrive until the end of the month. From the report: Nvidia pointed to "a reduction in channel partner sales," meaning that partners like Evga, MSI, Asus, Zotac, Gigabyte, and others were selling fewer new GPUs than anticipated. This drop can be attributed partly to a crash in the value of mining-based cryptocurrencies like Bitcoin and Ethereum -- fewer miners are buying these cards, and miners looking to unload their GPUs on the secondhand market are also giving gamers a cheaper source for graphics cards. "As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our Gaming partners to adjust channel prices and inventory," said Nvidia CEO Jensen Huang. That means we may see further price drops for existing GeForce GPUs, which have already been dropping in price throughout the year. Some cards still haven't reverted to their originally advertised prices, but they're getting closer all the time.

In better news for Nvidia, the small overall increase in revenue [$6.7 billion] is driven almost exclusively by the company's data center business, including GPU-accelerated AI and machine learning applications and GPU acceleration for cloud-hosted virtual machines. Nvidia's data center revenue is projected to be up 61 percent from last year, from $2.37 billion to $3.81 billion. Nvidia will supposedly launch its next-generation RTX 4000 series GPUs later this year. Based on the new Lovelace architecture, these GPUs may appeal to some gamers who originally sat out the RTX 3000 series due to shortages and inflated prices and are now avoiding the GPUs because they know a replacement is around the corner.

An anonymous reader quotes a report from Bloomberg: Riot Blockchain earned about $9.5 million in credits last month from shutting down its Bitcoin mining rigs at a Texas facility while the region weathered a historic heat wave. The amount will be credited against the company's power usage. The value of the credit is equal to around 439 Bitcoin. Riot also mined 318 coins during the month, according to the company's monthly production and operations update.

The publicly traded miner has a 750-megawatt facility and is building another one-gigawatt site in the Lone Star State. The sites are two of the largest mining farms in the world. Nearly all industrial scale miners shut down their rigs in Texas while the state experienced a severe power crunch during the record heat wave in early July. While the power crunch sent electricity prices soaring and made Bitcoin mining operations unprofitable, some large-scale miners such as Riot were able to sell electricity purchased earlier at a lower price back to the grid with a premium.

Riot is participating in the 4 Coincident Peak program from the state power operator known as the Electric Reliability Council of Texas. Riot's 750-megawatt Whinstone Facility in Rockdale, Texas, is encouraged, though not required, to curtail consumption when called during the four summer months of peak energy demand. The company sold 275 mined coins for about $5.6 million in July. The 318 Bitcoin mined represents a decrease of 28% in production compared to the prior month, according to the update.

MicroStrategy co-founder Michael Saylor gave up his chief executive officer title and said he'll focus more on Bitcoin after the enterprise-software maker reported a loss of more than $1 billion related to the second-quarter plunge in the price of the cryptocurrency. Bloomberg reports: Saylor, who founded the Tysons Corner, Virginia-based company in 1989, will continue to serve as executive chairman as retains its Bitcoin buying strategy. MicroStrategy President Phong Le will take on the chief executive role. The company also filed with the Securities and Exchange Commission to register 450,000 shares. MicroStrategy took a $917.8 million impairment charge related to the decline in the value of the Bitcoin it holds. Bitcoin tumbled 59% in the quarter, and traded about 45% lower than the price at the end of the year-earlier period.

Revenue dropped to $122.1 million. Analysts polled by Bloomberg expected revenue of $123.25 million in the second quarter. Net quarterly loss of $1.062 billion compared with a loss of $299.3 million in the same quarter of last year. The quarterly loss is almost exactly twice the company's revenue in the last 12 months. As of June 30, the carrying value of the company's 129,699 Bitcoins was $1.988 billion, the company said, reflecting the cumulative impairment loss of $1.989 billion. The cumulative amount is now more than Bitcoin on the company's balance sheet. "MicroStrategy's original strategy and consulting business needs full-time attention," said Henry Elder, head of decentralized finance at Wave Financial. "Now Michael can focus on what he does best, promoting Bitcoin. And the company can focus on making more money to buy more Bitcoin. They are basically doubling down."

An anonymous reader quotes a report from The Guardian: For years Craig Wright has claimed that he is the mythical figure who created bitcoin. But a legal bid by the Australian computer scientist to defend his assertion that he is Satoshi Nakamoto resulted in a pyrrhic victory and a tarnished reputation on Monday. A high court judge ruled (PDF) Wright had given "deliberately false evidence" in a libel case and awarded him one pound in damages after he sued a blogger for alleging that his claim to be the elusive Nakamoto was fraudulent. "Because he [Wright] advanced a deliberately false case and put forward deliberately false evidence until days before trial, he will recover only nominal damages," wrote Justice Chamberlain.

Wright had sued blogger Peter McCormack over a series of tweets in 2019, and a video discussion broadcast on YouTube, in which McCormack said Wright was a "fraud" and is not Satoshi. The issue of Nakamoto's identity was not covered by the judge's ruling because McCormack had earlier abandoned a defense of truth in his case. Wright claimed that his reputation within the cryptocurrency industry had been "seriously harmed" by McCormack's claims. He said he had been invited to speak at numerous conferences after the successful submission of academic papers for blind peer review, but 10 invites had been withdrawn following McCormack's tweets. This included alleged potential appearances at events in France, Vietnam, the US, Canada and Portugal.

But McCormack submitted evidence from academics challenging Wright's claims, which were then dropped from his case at the trial in May. Wright later accepted that some of his evidence was "wrong" but said that this was "inadvertent," Chamberlain said in his judgment. The judge noted that there was "no documentary evidence" that Wright had a paper accepted at any of the conferences identified in the earlier version of his libel claim, nor that he received an invitation to speak at them except possibly at one, and that any invitation was withdrawn. Wright's explanation for abandoning this part of his case because the alleged damage to his reputation from the "disinvitations" was outside England and Wales "does not withstand scrutiny," the judge added. He concluded: "Dr Wright's original case on serious harm, and the evidence supporting it, both of which were maintained until days before trial, were deliberately false." [...] [T]he judge said that Wright's pre-trial case over the serious harm to his reputation made it "unconscionable" that he should receive "any more than nominal damages." In statement Wright said: "I intend to appeal the adverse findings of the judgment in which my evidence was clearly misunderstood. I will continue legal challenges until these baseless and harmful attacks designed to belittle my reputation stop."

After admonishing crypto lender Voyager Digital for "false and misleading" statements on the subject, the FDIC said banks must ensure that crypto firms they partner with are clear about whether customer deposits are insured. From a report: In industry guidance published Friday, the Federal Deposit Insurance Corp. said insured banks should monitor that crypto firms they work with do not misrepresent the availability of deposit insurance and "should take appropriate action to address such misrepresentations." The notice comes a day after the FDIC and Federal Reserve demanded Voyager Digital correct what it called misrepresentations that suggested some of its customers were covered by federal insurance if the firm collapsed.

When Voyager filed for bankruptcy earlier this month, its banking partner, Metropolitan Commercial Bank, issued a statement clarifying that FDIC insurance is available "only to protect against the failure of Metropolitan Commercial Bank," not Voyager. Metropolitan is holding about $350 million in customer funds, which Voyager has told customers will be released after the bank undergoes a fraud prevention process. Metropolitan is far from the only bank holding deposits on behalf of crypto companies, and now the FDIC wants to ensure customers are not further confused about how, or if, their assets are covered.

Babel Finance, the troubled Asian crypto lender that abruptly halted client withdrawals last month, suffered heavy losses due to proprietary trading with customer funds, according to its restructuring proposal deck obtained by The Block. From a report: The deck, dated July 2022, reveals that Babel Finance lost more than $280 million in bitcoin (BTC) and ether (ETH) due to its proprietary trading failure. Specifically, it lost around 8,000 BTC and 56,000 ETH in June after facing liquidation due to a significant market downturn. "In that volatile week of June when BTC fell precipitously from 30k to 20k, unhedged positions in [proprietary trading] accounts chalked up significant losses, directly leading to forced liquidation of multiple Trading Accounts and wiped out ~8,000 BTC and ~56,000 ETH," reads the deck. Due to these massive losses, Babel's lending and trading departments were unable to meet margin calls from counterparties.

"Conclusion: Single point of failure - The Proprietary Trading team's failed operation falls outside of the company's normal business which has otherwise been running smoothly with proper management and control," according to the deck. Babel Finance describes its proprietary trading business as a "risky" business yet it failed to hedge its positions. "A Proprietary Trading team operates several Trading Accounts not controlled or monitored by Trading Department; no trading mandate or risk controls were implemented for these accounts; no PnL [profit and loss] was reported," per the deck.

Nirvana Finance, a Solana-based yield protocol, suffered a $3.5 million exploit utilizing flash loans to manipulate and drain its liquidity pools, blockchain data shows. CoinDesk reports: The price of the protocol's native ANA token fell over 80% in the past few hours, while its NIRV stablecoin lost its peg to the U.S. dollar and dropped to 8 cents at writing time, CoinGecko data shows. Nirvana allowed users to earn annual yields of over 100% on their locked assets by creating and destroying tokens based on user demand as the ANA tokens were bought from and sold to the protocol. Over $3.5 million worth of ANA was locked on the protocol before the attack on Thursday.

Data from blockchain explorers shows the attack used over 10 million USDC sourced from lending tool Solend in a flash loan. At that point over $10 million worth of ANA was minted, or created, and the entire amount swapped to receive $3.5 million worth of tether (USDT) from Nirvana's treasury wallet. This was possible because the treasury considered the 10 million USDC infusion to be genuine. However, it wasn't, and the protocol was hence tricked into releasing its treasury's liquidity. The total value locked (TVL) on Nirvana fell to 7 cents in European morning hours following the attack. Its entire liquidity pool was effectively drained, data from DeFi Llama shows.

The 10 million USDC was returned to Solend after the exploit. The stolen funds were transferred to the Ethereum network using Wormhole, a blockchain tool that connects Solana to other networks, and converted to DAI, an Ethereum-based stablecoin, blockchain data shows. The attacker address -- 0xB9AE2624Ab08661F010185d72Dd506E199E67C09 -- currently holds over $3.5 million worth of DAI, blockchain data shows. Nirvana's trading functions were suspended by developers following the attack, as per messages by admins on the protocol's Telegram channel.

El Salvador's finance minister defended the country's strategy to adopt Bitcoin as legal tender even as critics urge the nation to ditch the experiment as the cryptocurrency world suffers through a bear market. From a report: Almost a year into the country's bet on Bitcoin, Alejandro Zelaya said the digital currency has brought financial services to a largely unbanked population and attracted tourism and investments. While its use as a means of exchange is low, he said he remains a believer in digital money and added the government is still planning to issue a Bitcoin-backed bond using blockchain technology. "For some, it's something new and something they don't entirely understand, but it's a phenomenon that exists and is gaining ground and will continue to be around in the coming years," Zelaya said in an interview on Wednesday.

The government has purchased 2,381 Bitcoin with public funds, which, today, are worth about 50% less than what authorities paid for them, according to calculations by Bloomberg based on tweets by President Nayib Bukele. A survey by the U.S. National Bureau of Economic Research found that most businesses and consumers in El Salvador still prefer to use hard currency to pay for goods and services and send remittances. The International Monetary Fund has urged the nation to strip Bitcoin of its legal standing. The government is negotiating a $1.3 billion extended fund facility with the IMF, but no deal has yet been reached.

A bill was introduced in the Senate today that would prevent Americans from needing to disclose capital gains or losses on most smaller-scale crypto transactions. From a report: Introduced by senators Patrick Toomey (R-PA) and Kyrsten Sinema (D-AZ), the Cryptocurrency Tax Fairness Act would exempt reporting crypto transactions of less than $50, or trades in which a person earns less than $50. "While digital currencies have the potential to become an ordinary part of Americans' everyday lives, our current tax code stands in the way," said Toomey, adding that the bill would help Americans "use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee." Right now, similar bills are working their way through Congress. The Responsible Financial Innovation Act, introduced by senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), would remove the obligation to provide information on crypto gains of $200 or less to the Internal Revenue Service.

An anonymous reader quotes a report from Gizmodo: Former IT worker James Howells -- who once stood on the very forefront of the crypto boom and could have been a multimillionaire -- is desperate to scour a UK landfill located in Newport, Wales where he might find a missing drive that contains the passcode for a crypto wallet containing 8,000 bitcoin, worth close to $176 million as of writing. Howells said he accidentally dumped the wrong hard drive back in 2013. Though the price of crypto remains in the proverbial dumpster, this data cache represents millions of dollars simply stuck on the blockchain, with nobody able to access the wallet without the required passcode. It's been a long road, and he hasn't given up on his quest to rescue his missing millions. Only problem is finding that hard drive would require digging through a literal mountain of garbage.

In an interview with Business Insider released Sunday, Howell said he has a foolproof scheme to rescue his bitcoin from an actual trash pile. He's put together an $11 million business plan which he'll use to get investors and the Newport City Council on board to help excavate the landfill. His proposal would require them to dig through 110,000 tons of trash over three years. A $6 million version of the plan would go over 18 months. A video hosted by Top Gear alum Richard Hammond said the bitcoin "proponent" has already reportedly secured funding from two Euro-based venture capitalists Hanspeter Jaberg and Karl Wendeborn, if Howells can get approval from the local government.

The garbage would be sorted at a separate pop-up facility near the landfill using human pickers and an AI system used to spot that hard drive amidst all that other refuse. He's even brought on eight experts in artificial intelligence, excavation, waste management, and data extraction, all to find a lone hard drive in a trash pile. The plan also involves making use of the Boston Dynamics robotic dogs. The former IT worker told reporters the machines could be used as security and CCTV cameras to scan the ground, looking for the hard drive. When they were released, each "Spot" robot model cost $74,500. Even with that price tag, Howells said he already has names for the two. Insider reported he would name one Satoshi, named after Satoshi Nakamoto, the person or group behind the white paper that first proposed bitcoin back in 2008. The other one would be named "Hal" -- no, not that HAL -- but Hal Finney, the first person to receive a bitcoin transaction. A spokesperson for the local government told Insider Howells could present or say "nothing" that would convince them to go along with the plan, citing ecological risk. If the council says no -- again -- Howells told reporters he'd take the government to court.