The Ethereum blockchain, the most important commercial highway in the digital-asset sector, successfully implemented a widely anticipated software upgrade. From a report: The so-called Shanghai update enables investors to queue up to withdraw Ether coins that they had pledged to help operate the network in return for rewards, a process called staking. Tim Beiko, who helps to co-ordinate the development of Ethereum, posted on Twitter on Wednesday that the upgrade is now "official." The network revamp -- also known as Shapella -- is designed to let people exit an Ether staking investment and has stirred debate on whether the appeal of the largest token after Bitcoin will increase over time.

"Ethereum is updating and navigating with great skill -- so far anyway -- and cementing its position as the No. 2 crypto," said Aaron Brown, a crypto investor who writes for Bloomberg Opinion. He added that the network is "moving to the future much faster than Bitcoin." About 1.2 million of Ether tokens -- worth approximately $2.3 billion at current prices -- are expected to be withdrawn over the next five days, according to researcher Coin Metrics. Some $36.7 billion of Ether is locked up for staking, data from Staking Rewards shows.

Bankrupt crypto exchange FTX has recovered over $7.3 billion in cash and liquid crypto assets, an increase of more than $800 million since January, the company's attorney said on Wednesday at a U.S. bankruptcy court hearing in Delaware. Reuters reports: FTX attorney Andy Dietderich said the company is starting to think about its future after months of effort devoted to collecting resources and figuring out what went wrong under the leadership of indicted ex-founder Sam Bankman-Fried. Bankman-Fried has pleaded not guilty. "The situation has stabilized, and the dumpster fire is out," Dietderich said.

FTX has benefited from a recent rise in crypto prices, Dietderich said. Its total recovery would be valued at $6.2 billion based on crypto prices from November 2022, when it filed for bankruptcy after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal. As it looks to the future, FTX is negotiating with stakeholders about options for restarting its crypto exchange, and it may make a decision on that in the current quarter, Dietderich said.

According to South Korean prosecutors, Terraform Labs co-founder Do Kwon converted most of the illicit funds associated with him and his associates into Bitcoin. CoinTelegraph reports: South Korean prosecutors have identified 414.5 billion won ($314.2 million) in illicit assets associated with Terraform Labs co-founder Do Kwon and his associates. Out of the identified illegal assets, prosecutors have linked about 91.4 billion won ($69 million) of the specified amount directly to Kwon. Although Kwon amassed millions, none of the assets tied to him are recoverable or under the jurisdiction of the South Korean authorities. This is mainly because the now-arrested former CEO reportedly converted most of the illicit funds into Bitcoin using overseas crypto exchanges instead of investing in physical assets, per a report published by local media outlet KBS.

The South Korean authorities have requested Binance to halt any withdrawal request associated with Kwon. Binance confirmed to Cointelegraph that they are cooperating with the prosecutors and offering any assistance they need. South Korean prosecutors are actively tracing properties associated with Terraform Labs executives to recover some illicit funds from the Terra debacle. On April 3, prosecutors seized homes and other assets to stop former Terra employees from selling things that might be tied to legal cases. In addition to the residences in Seoul owned by former CEO Shin Hyun-seong and others, the prosecutors also filed foreclosure actions against their foreign-registered vehicles, lands in Hwaseong and Gapyeong in Gyeonggi-do, and Taean in South Chungcheong Province. Kwon evaded arrest for almost a year before getting caught in Montenegro on March 23rd.

Australia's financial regulator has cancelled the local financial services licence of the world's biggest cryptocurrency exchange, Binance. The Guardian reports: Earlier this year, the Australian Securities and Investments Commission (Asic) found Binance had incorrectly classified hundreds of retail customers as wholesale investors. The Asic chair, Joe Longo, said the distinction was important because retail customers have access to more consumer protections under Australian law, including the right to dispute resolution. Binance's Australia's financial services (AFS) licence only allows it to provide derivatives products to sophisticated investors, rather than retail customers.

"It is critically important that AFS licensees classify retail and wholesale clients in accordance with the law," Longo said. "Retail clients trading in crypto derivatives are afforded important rights and consumer protections under financial services laws in Australia, including access to external dispute resolution through the Australian financial complaints authority. Our targeted review of these matters is ongoing, including focus on the extent of consumer harms."

From April 14, Binance clients will not be able to increase derivatives positions or open new positions. The exchange must close any remaining open positions by April 21. Binance can remain a member of the Australian financial complaints authority until April 8, 2024. "As we have said before, Asic supports a regulatory framework for crypto with a focus on consumer protection and market integrity. The final decision as to the regulatory settings is one for government," Longo said. Binance has been operating in Australia for many years but its now cancelled AFSL was with Oztures Trading, a company it acquired last year.

In every copy of macOS that has shipped since 2018, Apple has included the original Bitcoin whitepaper by Satoshi Nakamoto, and no-one seems to know why. From a report: The baffling discovery (or rediscovery - see below) was recently made by developer and waxy.org writer Andy Baio, who stumbled upon the PDF document while trying to fix a problem with his printer. Anyone with a Mac running macOS Mojave or later can see the PDF for themselves by typing the following command into Terminal:

open /System/Library/Image\ Capture/Devices/VirtualScanner.app/Contents/Resources/simpledoc.pdf

If you're running macOS 10.14 or later, the 184 KB Bitcoin PDF should immediately open in Preview. The document can also be located via Finder: Navigate to Macintosh HD -> System -> Library -> Image Capture -> Devices, then open the Contents -> Resources folder. The whitepaper titled "simpledoc.pdf" should be in there.

Dogecoin (DOGE) rose 12% after the Shiba Inu symbol representing the token replaced the familiar blue bird atop the Twitter homepage. From a report: Elon Musk in the past has suggested the meme coin may offer better payments functionality than bitcoin.

US banks, already hesitant to work with crypto customers, are now even warier of providing services to the industry after a string of regional-lender collapses and amid heightened scrutiny by regulators. From a report: The closure of crypto-friendly Silvergate Capital and seizure of Signature Bank has left crypto firms struggling to find new banks for depository and payment services. While there's no blanket ban on serving crypto clients, financial firms are imposing lengthy application procedures, turning away smaller companies and some retail platforms, and in some cases shutting the door on crypto businesses altogether, according to industry participants, investors and bank executives.

Cross River Bank, for example, received requests from more than 100 new clients -- not all of whom were crypto companies -- seeking a safe harbor for their deposits within days of SVB Financial Group's Silicon Valley Bank and Signature collapsing, according to a person with direct knowledge of the bank's business. The closely held company turned down almost all those requests, the person said. Among the few crypto companies that have won over the bank is stablecoin issuer Circle Internet Financial, which expanded a partnership with Cross River, announced after Silicon Valley Bank failed. Earlier this month, lenders that were bidding to buy failed Signature Bank from the Federal Deposit Insurance Corp. specifically asked not to take on the digital-assets business, according to a person familiar with the process. Signature's crypto business was not part of the eventual takeover by New York Community Bancorp, and the FDIC is still seeking to sell Signet, Signature's real-time payments network for crypto firms.

The Securities and Exchange Commission takes the lead in defining what a security is, not necessarily legislation, the regulator's Chair Gary Gensler said. From a report: After a House Appropriations Committee hearing on Wednesday, Gensler told reporters that existing securities laws "cover most of the activity that's happening in the crypto markets. If Congress were to act, though I don't think we need these authorities, not to undermine inadvertently through definitions of what's in or out, or in essence allowing for conflicts that we don't allow," Gensler said.

"I think there is one agency -- the Securities and Exchange Commission, overseen by two committees -- the House Financial Services and Senate Banking, and the courts that define what a security is and not individual crypto exchanges selecting that," Gensler later said. Lawmakers have introduced legislation over the years to regulate crypto. Sens. Kirsten Gillibrand, D-N.Y., and Cynthia Lummis, R-Wyo., have plans to reintroduce legislation next month that would, in part, assert that the Commodity Futures Trading Commission has control over digital asset commodities, such as bitcoin. "I think many of the legislative vehicles would, if adopted, would undermine the securities remit," Gensler added.

FTX founder Sam Bankman-Fried was charged with directing $40 million in bribes to one or more Chinese officials to unfreeze assets relating to his cryptocurrency business in a rewritten indictment unsealed Tuesday. CBS News reports: The charge of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act means Bankman-Fried faces now faces a total of 13 charges after being arrested in the Bahamas last December and brought to the United States soon thereafter. [...] The indictment said Chinese law enforcement authorities in early 2021 froze certain Alameda crypto-trading accounts on two of China's largest cryptocurrency exchanges. The accounts, it said, contained about $1 billion worth of crypto.

Bankman-Fried understood that the accounts had been frozen by Chinese authoritIes as part of an ongoing probe of a particular Alameda trading counterparty, the indictment said. After Bankman-Fried failed several attempts to unfreeze the accounts through the use of lawyers and lobbying, the 31-year-old ultimately agreed to direct a multimillion dollar bribe to try to unfreeze the accounts, the indictment said.

"Bankman-Fried and others sought to regain access to the assets to fund additional Alameda trading activity, in order to assist Bankman-Fried and Alameda in obtaining and retaining business," court documents state. The bribe payment of cryptocurrency -- then worth about $40 million -- was moved from Alameda's main trading account to a private cryptocurrency wallet in November 2021 and the frozen accounts were unfrozen at about the same time, the indictment said.

Plans for a government backed non-fungible token (NFT) produced by the Royal Mint have been dropped, the Treasury has announced. The BBC reports: Rishi Sunak ordered the creation of a "NFT for Britain" that could be traded online, while chancellor in April 2022. The Treasury announced it was "not proceeding with the launch" following a consultation with the Royal Mint. But economic secretary Andrew Griffiths said the department would keep the proposal "under review."

Responding to the announcement, Harriet Baldwin, chair of the Treasury Select Committee, said: "We have not yet seen a lot of evidence that our constituents should be putting their money in these speculative tokens unless they are prepared to lose all their money. "So perhaps that is why the Royal Mint has made this decision in conjunction with the Treasury."

The Treasury is working to regulate some cryptocurrencies and had planned to enter the NFT market as part of a wider bid to make the UK a hub for digital payment companies. In April 2022, the then-chancellor Mr Sunak said: "We want to see the [cryptocurrency] businesses of tomorrow - and the jobs they create - here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term."

The US chip-maker Nvidia has said cryptocurrencies do not "bring anything useful for society" despite the company's powerful processors selling in huge quantities to the sector. From a report: Michael Kagan, its chief technology officer, said other uses of processing power such as the artificial intelligence chatbot ChatGPT were more worthwhile than mining crypto. Nvidia never embraced the crypto community with open arms. In 2021, the company even released software that artificially constrained the ability to use its graphics cards from being used to mine the popular Ethereum cryptocurrency, in an effort to ensure supply went to its preferred customers instead, who include AI researchers and gamers. Kagan said the decision was justified because of the limited value of using processing power to mine cryptocurrencies.

The first version ChatGPT was trained on a supercomputer made up of about 10,000 Nvidia graphics cards. "All this crypto stuff, it needed parallel processing, and [Nvidia] is the best, so people just programmed it to use for this purpose. They bought a lot of stuff, and then eventually it collapsed, because it doesn't bring anything useful for society. AI does," Kagan told the Guardian. "With ChatGPT, everybody can now create his own machine, his own programme: you just tell it what to do, and it will. And if it doesn't work the way you want it to, you tell it 'I want something different.'" Crypto, by contrast, was more like high-frequency trading, an industry that had led to a lot of business for Mellanox, the company Kagan founded before it was acquired by Nvidia. "We were heavily involved in also trading: people on Wall Street were buying our stuff to save a few nanoseconds on the wire, the banks were doing crazy things like pulling the fibres under the Hudson taut to make them a little bit shorter, to save a few nanoseconds between their datacentre and the stock exchange," he said. "I never believed that [crypto] is something that will do something good for humanity. You know, people do crazy things, but they buy your stuff, you sell them stuff. But you don't redirect the company to support whatever it is."

An anonymous reader quotes a report from Reuters: El Salvador's President Nayib Bukele said on Thursday he will send to the country's Congress next week a bill to eliminate all taxes on technology innovations as well as computing and communications hardware manufacturing. "Next week, I'll be sending a bill to congress to eliminate all taxes (income, property, capital gains and import tariffs) on technology innovations, such as software programming, coding, apps and AI development," he said on Twitter. The tax cut would also encompass computing and communications hardware manufacturing, Bukele added. In 2021, the Salvadoran leader introduced legislation to make El Salvador the world's first sovereign nation to adopt bitcoin as legal tender. He also unveiled plans to build a "Bitcoin City" at the base of a volcano.

The founder of Terraform Labs, Do Kwon, appears to have been arrested in Montenegro, according to a tweet by the country's minister of interior, Filip Adzic. CoinDesk reports: "Montenegrin police have detained a person suspected of being one of the most wanted fugitives, South Korean citizen Do Kwon, co-founder and CEO of Singapore-based Terraform Labs," Adzic tweeted. Kwon has been the target of several investigations and was even on Interpol's red notice after stablecoin terraUSD (UST) and its $40 billion ecosystem imploded last year, sending shockwaves across the crypto markets. The suspect was detained at the Podgorica airport with falsified documents, Adzic added, saying he was still waiting for official confirmation of identity.

The Korean National Police Agency said that it had confirmed the suspect appeared to be Kwon based on checking age, name, and nationality of his ID card, according to a report by the Yonhap news agency. The unverified account of Adzic is followed by the official account of the prime minister of Montenegro, Dritan Abazovic. The tweet announcing Kwon's arrest was also retweeted by Abazovic's account. Adzic's account has previously been cited in official tweets.

New submitter Kitkoan writes: Hackers had gained control of Linus Tech Tips' YouTube channel to promote a cryptocurrency scam. Earlier on Thursday, hackers had gained control of the Linus Tech Tips YouTube channel and used it to promote a fake crypto giveaway that falsely used the name of Elon Musk and the Tesla brand (obviously without the permission of either party). Thankfully, the Linus Tech Tips crew quickly worked to re-establish control of the channel, but not before the channel had started two live streams to promote AI, chat GPT, Bitcoin, and their aforementioned (fake) crypto giveaway.

turp182 shares a report from Ars Technica: Hackers drained millions of dollars in digital coins from cryptocurrency ATMs by exploiting a zero-day vulnerability, leaving customers on the hook for losses that can't be reversed, the kiosk manufacturer has revealed. The heist targeted ATMs sold by General Bytes, a company with multiple locations throughout the world. These BATMs, short for bitcoin ATMs, can be set up in convenience stores and other businesses to allow people to exchange bitcoin for other currencies and vice versa. Customers connect the BATMs to a crypto application server (CAS) that they can manage or, until now, that General Bytes could manage for them. For reasons that aren't entirely clear, the BATMs offer an option that allows customers to upload videos from the terminal to the CAS using a mechanism known as the master server interface.

Over the weekend, General Bytes revealed that more than $1.5 million worth of bitcoin had been drained from CASes operated by the company and by customers. To pull off the heist, an unknown threat actor exploited a previously unknown vulnerability that allowed it to use this interface to upload and execute a malicious Java application. The actor then drained various hot wallets of about 56 BTC, worth roughly $1.5 million. General Bytes patched the vulnerability 15 hours after learning of it, but due to the way cryptocurrencies work, the losses were unrecoverable. [...] Once the malicious application executed on a server, the threat actor was able to (1) access the database, (2) read and decrypt encoded API keys needed to access funds in hot wallets and exchanges, (3) transfer funds from hot wallets to a wallet controlled by the threat actor, (4) download user names and password hashes and turn off 2FA, and (5) access terminal event logs and scan for instances where customers scanned private keys at the ATM. The sensitive data in step 5 had been logged by older versions of ATM software.

Going forward, this weekend's post said, General Bytes will no longer manage CASes on behalf of customers. That means terminal holders will have to manage the servers themselves. The company is also in the process of collecting data from customers to validate all losses related to the hack, performing an internal investigation, and cooperating with authorities in an attempt to identify the threat actor. General Bytes said the company has received "multiple security audits since 2021," and that none of them detected the vulnerability exploited. The company is now in the process of seeking further help in securing its BATMs.

The Securities and Exchange Commission issued crypto exchange Coinbase a Wells notice, warning the company that it identified potential violations of U.S. securities law. CNBC reports: "Based on discussions with the Staff, the Company believes these potential enforcement actions would relate to aspects of the Company's spot market, staking service Coinbase Earn, Coinbase Prime and Coinbase Wallet," Coinbase said in a regulatory filing. "The potential civil action may seek injunctive relief, disgorgement, and civil penalties."

Coinbase described the investigation as "cursory," and said the Wells notice provided relatively little information about potential violations. "Although we don't take this development lightly, we are very confident in the way we run our business -- the same business we presented to the SEC in order for us to become a public company in 2021," Coinbase Chief Legal Officer Paul Grewal said in a blog post. The company said that until the resolution of any legal processes, the exchange's offerings would continue to operate as usual.

An anonymous reader quotes a report from CoinDesk: Crypto ads in Belgium must be accurate and warn investors of the risks under new laws announced by the country's financial regulator Monday. Powers published in Belgium's Official Gazette on Friday mean any mass-media campaign to promote a digital currency would have to be submitted to the Financial Services and Markets Authority (FSMA) 10 days in advance, allowing the regulator to intervene if needed.

"Virtual currencies are all the rage at the moment, but they involve considerable risk," the FSMA said in a statement. "They are often subject to wild price fluctuations and are vulnerable to fraud and IT-related risks." The new rules, which will take effect on May 17, require ads to state that "the only guarantee in crypto is risk." Belgium joins European countries such as Spain and the U.K. in imposing restrictions on publicity campaigns, which often mirror those already in place for traditional finance.

Axios remembers that it was just nine days ago that there were "concerns" about Silicon Valley Bank at venture capital firm. And soon Founders Fund's top operations executives "were on the phone, quickly deciding to move firm capital to a number of bigger banks." Firm founder Peter Thiel was not part of the conversation. One source says that the assumption was that they'd return the money to SVB after the crisis had ended....

Founders Fund wasn't the only venture capital firm giving this sort of warning to portfolio companies, nor necessarily the first, but word of its advice spread like wildfire (it also ended up in media reports, including one from Axios). Almost immediately, the firm came under withering criticism from some other venture capitalists, accusing Founders Fund (and Thiel personally) of sparking a bank run that ultimately led to $42 billion in withdrawals. Some even speculated that it was intentional, as payback for some unknown grudge between the two groups.
Earlier this week the Washington Examiner chronicled some of that criticism: "There should be more scrutiny of Peter Thiel and [hedge fund manager] Bill Ackman for yelling fire in a crowded theater in this SVB collapse," tweeted CNBC host Sara Eisen [on Monday]. Others turned their focus to Thiel's promotion and subsequent profiting off of crypto investments after the market crashed as a reason to be suspicious of his withdrawals. "You mean the guy who was touting crypto and trashing critics while he was selling crypto? That guy? Shocker!" tweeted tech journalist Kara Swisher.
But Peter Thiel says he actually left his own money in the bank, reports Business Insider: "I had $50 million of my own money stuck in SVB," he told the Financial Times.... Thiel told the Financial Times that he did not believe the SVB would fail last week.

Other venture capital firms — including Coatue Management, Union Square Ventures, and Founder Collective — had similarly advised startup clients to transfer money from SVB after the bank revealed a $1.8 billion loss and the bank's share price collapsed. These firms have pushed back against accusations that they were spreading panic, saying that they were giving financial advice they believed would be in the best interest of their clients....

Thiel told the Financial Times that his account was frozen on Friday when regulators stepped in and took control of the bank. However, it is once again accessible after the US government stepped in earlier this week and shored up all customer deposits in SVB.

On Monday, Binance said it would suspend withdrawals and deposits for anybody using UK currency. The news came after the world's largest crypto exchange's banking partner in the UK, Paysafe, said it was abandoning crypto, at least as far as Binance was concerned. Gizmodo reports: In a statement to Gizmodo, a Paysafe spokesperson said that it was "too challenging" to offer its embedded wallet cryptocurrency services to UK customers because of the regulatory atmosphere in the UK. Paysafe is based in London, and said this decision was "taken in an abundance of caution." Paysafe did not clarify whether it was abandoning crypto altogether, or just in its partnership with Binance. Paysafe called its UK portion of its crypto business "small" but clarified it was still working with Binance elsewhere in Europe and in Latin America.

Binance suspended withdrawals and deposits for any new customers using British pounds late on Monday, and according to Bloomberg the crypto exchange plans to suspend all GBP transactions for all customers starting May 22. The company is reportedly working to find "an alternative solution" to again allow customers to trade GBP for crypto.

Meta's head of commerce and financial technologies Stephane Kasriel posted on Twitter that the company will sunset its NFT and digital collectibles features on Instagram and Facebook. TechCrunch reports: This short-lived product only began testing with select Instagram creators last May, plus some Facebook users in June. By July, Meta expanded NFT support on Instagram for creators in 100 countries. Less than a year later, Meta is moving on from NFTs. "We're winding down digital collectibles (NFTs) for now to focus on other ways to support creators, people, and businesses," Kasriel wrote in a Twitter thread.

A Meta spokesperson told TechCrunch that it is shifting its investments away from NFTs toward products like Meta Pay, as well as features that enable creators to earn money directly on Meta platforms, like its tipping feature called gifts. The company also said it is testing ways for creators to earn ad revenue on Reels. "Let me be clear: creating opportunities for creators and businesses to connect with their fans and monetize remains a priority, and we're going to focus on areas where we can make impact at scale, such as messaging and monetization opps for Reels," Kasriel wrote.