


Crypto Platform Vauld Suspends Withdrawals, Trading Amid 'Financial Challenges' (techcrunch.com) 91

Hacker Claims To Have Stolen Data of 1 Billion Chinese From Police (nikkei.com) 39

British Army's Twitter and YouTube Accounts Compromised to Promote Crypto Scams (engadget.com) 16
Although it has since been scrubbed, the army's verified Twitter account was briefly changed to look like a page for The Possessed, a project involving a collection of 10,000 animated NFTs with a price floor of 0.58 Ethereum (approximately $1,063). During that time, the account tweeted out multiple links to a fake minting website....
Over on YouTube, the army's channel [had] been made to look like a page for Ark Invest...livestreaming videos that repurpose old footage of Elon Musk, Jack Dorsey and Ark CEO Katie Wood discussing cryptocurrency. The clips feature an overlay promoting "double your money" Bitcoin and Ethereum scams. According to Web3 is Going Great, a similar scheme netted scammers $1.3 million this past May. It's unclear who is behind the attacks.

Is El Salvador's Bitcoin Experiment Authoritarian Propaganda? (nytimes.com) 73
"However, implying that the country's risk of default derives from the crypto-enthusiasm is wrong: The economic turmoil preceded and is bigger than that." The article notes that prior to their move into Bitcoin, "the Salvadoran economy was already stretched. Total debt amounted to about 90 percent of G.D.P., a large chunk of which had been accumulated by prior administrations or spurred by pandemic-related expenses."
But what are we missing with this focus on Bitcoin? Mr. Bukele has weaponized Bitcoin to whitewash his government's growing authoritarianism on the world stage. By spreading his propaganda, Bitcoin believers are promoting a product — and lining their pockets — at the expense of our rights and livelihoods.... Over the past three months, the government has used a state of emergency to imprison almost 40,000 people, often without defense. Mr. Bukele has begun to crack down on press freedom, through a gag law that prohibits reproducing messages from gangs and his government hasn't investigated the illegal use of Pegasus spyware to monitor dozens of journalists who cover El Salvador, including me, from independent news outlets between 2020 and 2021. Reporters have already fled the country, fearing reprisal for doing their jobs....
It's pretty obvious to anyone who visits any place in El Salvador other than its beaches that Mr. Bukele is not building a techno-utopia; he's building a run-of-the-mill authoritarian state in a tech disguise. Bitcoiners would do well to remember that when they cheer for Mr. Bukele, they're not ushering in the technology of the future; they're enabling a regime that's violating the human rights of its citizens. After all, the economic freedom Bitcoin promises is worth nothing to Salvadorans if it's the only freedom we can hope to have.
But even ignoring human rights issues — the Bitcoin experiment remains unpopular in El Salvador: Remittances account for more than 20 percent of El Salvador's G.D.P., because of a large diaspora mainly based in the United States. But, according to the Central Bank of El Salvador, only 1.5 percent of remittances went through digital wallets in April, which shows Salvadorans haven't gotten onboard with Bitcoin despite the promise of needed savings. And Mr. Bukele's plan for selling his Bitcoin bonds has stalled.
Just one year into Mr. Bukele's Bitcoin experiment, average Salvadorans can tell that Bitcoin isn't working for them. In May, a national poll showed that 71 percent of Salvadorans said they didn't see any benefit from the law for their family economy. Another found that about two of every 10 Salvadorans support the decision to adopt Bitcoin. Those Salvadorans haven't adopted the currency. A paper published in April by the National Bureau of Economic Research concludes that "despite the legal tender status of Bitcoin and the large incentives implemented by the government, the cryptocurrency is largely not an accepted medium of exchange in El Salvador...." A December national poll showed that only about 11 percent of respondents believed the main beneficiaries of the Bitcoin law are the people, while about 80 percent believed it's either the rich, foreign investors, banks, businesspeople or the government.

School Recovers Ransomware Paid in Bitcoin - Makes a Profit (dw.com) 51
As part of an investigation into the cyberattack, Dutch police tracked down a bank account belonging to a money launderer in Ukraine, into which a relatively small amount of the ransom money — around €40,000 worth of Bitcoin — had been paid.
Prosecutors were able to seize the account in 2020 and found a number of different cryptocurrencies. The authorities were then able to return the ransom back to the university after more than two years. But the value of the Bitcoin held in the Ukrainian account has increased from its then-value of €40,000 to €500,000.
A university official said the money will go into "a fund to help financially strapped students."

Citing Climate Concerns, New York Denies Permit to Bitcoin Mining Plant (nbcnews.com) 27
Renewing the air permit for the Greenidge facility on Seneca Lake "would be inconsistent with or would interfere with the attainment of statewide greenhouse gas emission limits," the Department of Environmental Conservation, or DEC, said in its ruling. It added that the company, which burns natural gas at its plant, has "failed to demonstrate that the continued operation of the facility is justified notwithstanding this inconsistency, as it has not provided any electric system reliability or other ongoing need for the facility." Greenhouse gas emissions from the plant have increased "dramatically" since a previous permit was issued to Greenidge in 2016 and after the 2019 enactment of New York's Climate Leadership and Community Protection Act, DEC said.
Local residents and environmental groups lauded the decision. Greenidge said it would continue to operate the plant under its current permit while it challenged the DEC ruling....
Greenidge took over a mothballed power plant on the shores of Seneca Lake in 2014 and requested permits to operate it as a so-called peaker plant, providing electricity to the grid in times of heavy use. While the operation initially supplied most of its power to the grid, DEC found its main purpose has become bitcoin mining.
The article adds that the global usage of electricity for bitcoin mining "roughly equals the consumption of Pakistan, according to the University of Cambridge Bitcoin Electricity Consumption Index."

EU Moves To Rein in 'Wild West' of Crypto Assets With New Rules (theguardian.com) 21

No AML Checks For Most Transfers To Unhosted Crypto Wallets, EU Policymakers Decide (coindesk.com) 6
Just under an hour following the publication of this article, EU lawmaker Ondrej Kovarik confirmed the provisional deal in a tweet, saying that it "strikes the right balance in mitigating risks for fighting money laundering in the crypto sector without preventing innovation and overburdening businesses." Outside the meeting room, Kovarik told CoinDesk that negotiators had found a "good balance" that would not prevent innovation. "It will allow the further development of crypto in Europe," Kovarik said.
For the rules on transfers to unhosted wallets, Kovarik said the final result had "moved quite far from the initial proposal of the European Parliament" -- something likely to be met by a sigh of relief by many in the industry. Kovarik said those unhosted wallet rules would only apply when transfers were made to a person's own private wallet, and only when the value was over 1,000 euros ($1,052). [...] Lawmakers and governments overturned European Commission plans to exempt small transactions, arguing that price volatility and the ability to break up payments into smaller chunks would make it unworkable for crypto. Further reading: Crypto Rules To Make Europe a Global Leader As Prices Plunge (The Associated Press)

Crypto Hedge Fund Three Arrows Set for Court-Ordered Liquidation (bloomberg.com) 56

Bitcoin is the Only Coin the SEC Chair Will Call a Commodity (axios.com) 65

Russian Parliament Approves Tax Break For Issuers of Digital Assets (reuters.com) 38
The current rate on transactions is 20%, the same as for standard assets. Under the new law, the tax would be 13% for Russian companies and 15% for foreign ones. The draft must still be reviewed by the upper house and signed by President Vladimir Putin to become law.

Robinhood Almost Imploded During the GameStop Meme Stock Chaos (techcrunch.com) 75
House Financial Services Committee Chairwoman Maxine Waters (D-CA) called for a deep dive into what happened behind closed doors, and the new report, "Game Stopped: How the Meme Stock Market Event Exposed Troubling Business Practices, Inadequate Risk Management, and the Need for Regulatory and Legislative Reform," collects the committee's findings. The report, embedded below, is culled from a number of hearings, 95,000 pages of documents and 50 interviews. "My Committee's investigation into the matter showed we need better market regulation to address the troubling business practices that were uncovered during our investigation," Waters said. "Payment for order flow and gamification make it profitable for a new generation of trading apps to push retail investors to make as many trades as possible, making the markets more volatile than ever."
The committee described Robinhood's business as "troubling," citing its preference for aggressive growth without adequate risk management. The report also found that the majority of financial firms the committee examined don't have any plans in place to prepare for another risky phase of "extreme" market volatility. According to the report: "On the morning of January 28, 2021, Robinhood had approximately $696 million in collateral already on deposit with the NSCC, leaving it with a collateral deficit of approximately $3 billion, which it was required to post to satisfy the NSCC's clearing fund requirement or risk being in violation of the NSCC's rules and potentially losing the ability to clear trades for their customers altogether. [President and Chief Operating Officer for Robinhood's clearing operation] Swartwout confirmed that this amount came as a surprise to Robinhood and explained to Committee staff that they had anticipated and prepared for the $1.4 billion of collateral deposit requirements that represent 'core' charges, but because they did not model for Excess Capital Premium charges, Robinhood therefore did not expect and had not arranged adequate funding for the additional $2.2 billion Excess Capital Premium charge. On the morning of January 28, 2021, Jim Swartwout texted Gretchen Howard at 6:29 a.m. EST, writing 'Huge liquidity issue.'" "Ultimately, the company secured a waiver for its collateral requirements, paused some trades and averted disaster but there's no guarantee that history won't repeat itself and shake out a different way," concludes the report. "In light of the report, Waters called for 'significant' legislative reforms to prevent another Robinhood-style near-meltdown."
Further reading: FTX Exploring a Deal To Buy Robinhood

FTX Exploring a Deal To Buy Robinhood (yahoo.com) 13
In recent days, Bankman-Fried's companies -- FTX and Alameda Research -- have offered loans to crypto firms in rough financial straits, with some likening his actions to those of Warren Buffett's during the Financial Crisis. Bankman-Fried's crypto exchange FTX offered crypto lender BlockFi a $250 million line of credit. Meanwhile, the 30-year old billionaire's trading firm, Alameda Research, has given Canadian crypto exchange Voyager a total line of credit in cash and crypto equal to more than $500 million. Similar to what Binance's founder, Changpeng Zhao, told Yahoo Finance, Bankman-Fried's actions could be interpreted both as a profit-making opportunity and a way to squash contagion in a sector where firms remain deeply intertwined in their financial dealings.

Three Arrows Capital, a Prominent Crypto Hedge Fund, Defaults on a $670 Million Loan (cnbc.com) 45

European Crypto Exchange Bitpanda Cuts Staff By Hundreds (coindesk.com) 43
"We reached a point where more people joining didn't make us more effective, but created coordination overheads instead, particularly in this new market reality," Bitpanda wrote. "Looking back now, we realize that our hiring speed was not sustainable. That was a mistake." In addition, recent offers will be retracted, and employees have been notified.

Goldman Sachs Raising Funds to Buy Celsius Assets (coindesk.com) 24
As of Monday, the company said it's still working on "stabilizing [their] liquidity and operations."

Senator Posts Cryptocurrency Bill On GitHub, Chaos Ensues (theverge.com) 41
However, the more common response has been trolling. One flagged issue is titled, "You Know You Can Find Someone To Do Findom Using Google, Right." Another is titled only with the eggplant emoji. In a related thread, a user commented, "Feds are not looking post floppa," accompanied by a picture of a popular Russian caracal who has gained an internet following under the name "Big Floppa." The trolling also extends to commit requests, where one user proposed replacing the bill with the source code of the popular first-person shooter Doom. "This bill would do far more to benefit everyday Americans if its text was replaced with the source code of Doom," reads a comment responding to the request. "Devs should merge asap."

Solana Launches Web3-Focused Smartphone Saga To Improve Crypto-Mobile Relationship (techcrunch.com) 52
Saga aims to implement digital asset products and services, so users can easily transact with their cryptocurrency through the device, opposed to a laptop browser. In addition to the announcement of Saga, Yakovenko shared the launch of the Solana Mobile Stack, or SMS, which is a web3 layer for Solana built on the phone. SMS will consist of a number of products including a seed vault, a custody solution, a mobile wallet adapter, Solana Pay for Android and its decentralized application (dApp) store. It "provides a new set of libraries for wallets and apps, allowing developers to create rich mobile experiences on Solana," a press release said.
A number of crypto companies including FTX, Phantom and Magic Eden will partner with SMS and there is also a $10 million developer fund for people who build apps on it. "The builders are coming and they are higher quality than before," Raj Gokal, COO at Solana Labs said. "They're ready for the next leg of user growth." The $1,000 device will have 512 GB of storage with a 6.67-inch OLED display and is available for preorder with a $100 deposit and deliveries will occur in Q1 2023, Yakovenko said.
