Bitcoin

Father-Son Team Helps People Brute-Force Their Lost Bitcoin Wallets (vice.com) 18

Hundreds of people have lost access to their cryptocurrency, and recovering those lost Bitcoins has become a lucrative business. "Motherboard talks to some of the people trying to get back their crypto, and the people who are making that happen in the newest episode of CRYPTOLAND on YouTube," writes Slashdot reader em1ly. Here's an excerpt from an article accompanying the episode: It's hard to know exactly how much Bitcoin is locked forever in wallets whose owners forgot the password, or in hard drives thrown out. There's plenty of anecdotes of desperate people trying to recover their lost Bitcoin. Chainalysis, a firm that tracks cryptocurrencies to help companies and law enforcement, estimated in 2018 that up to 23% of all Bitcoin is lost forever -- around 3.79 million bitcoins or the equivalent of around $170 billion at today's conversion rate. Naturally, some of the people who own those lost Bitcoin are willing to do anything to get them back. And there's a market for companies or individuals who promise to recover the lost Bitcoin for a fee.

There's the mysterious Wallet Recovery Service, run by an anonymous person who goes by DaveBitcoin, or Crypto Asset Recovery, a father and son startup based in New Hampshire. In essence, what these organizations do is try as many password or passphrase combinations as fast as they can -- or as fast as their password cracking software and hardware will allow -- until they get the right one for a specific wallet they're trying to break into. They brute force the password, but they need help from their customers -- some guess, at least, of what their password may have been. Charlie Brooks, the son in the duo that runs Crypto Asset Recovery, told Motherboard that their success rate is 32 percent, without counting those customers that they believe have almost no chance of getting their Bitcoin back (who they decline to take on as clients).

Bitcoin

Nike Wants To 'Destroy' Unauthorized NFTs -- How Will That Work? (decrypt.co) 88

An anonymous reader quotes a report from Decrypt: When a company like Nike finds someone using its brand without permission, it can ask the courts to order the unauthorized goods to be destroyed. Nike has done this in the past, but its latest trademark lawsuit comes with a twist -- the products it wants to "destroy" are NFTs, which are inscribed permanently on the Ethereum blockchain. The case in question involves Detroit-based StockX, a site that lets people buy and sell used brands, including Nike sneakers. [...] In a complaint filed last month in New York federal court, Nike accused StockX of ripping off its brand in order to cash in on a "gold rush market" for NFTs. As a remedy for StockX's alleged infringement of its trademarks, Nike wants the company to turn over its profits and stop the NFT sneaker sales. It also wants a judge to "order that StockX be required to deliver to Nike for destruction any and all Vault NFTs."

According to Alexandra Roberts, a trademark law professor at the University of New Hampshire, it's fairly common for companies to ask to destroy goods that infringe their IP -- there's even a law that entitles them to do that. But whether a court will grant the order is likely to be informed by what the brand owner is looking to destroy. Where do NFTs fit into this? It's an open question since the courts have never had to address it before. And even if the New York court agrees to order the destruction of the StockX NFTs, there's the question of how exactly Nike would go about doing that.

Records on the blockchain show that StockX has indeed inscribed the NFTs on Ethereum, which means they are indestructible except in the extremely unlikely event that developers agree to fork the blockchain to get rid of them. According to some, the most practical thing for Nike to do would be to send the NFTs to a so-called burner wallet. This wouldn't destroy them but still achieve the same purpose: "This means that the best outcome for a brand that is seeking to have NFTs destroyed may be to have them sent to a burn address, which still does not actually destroy them but renders them incapable of being transferred anymore," writes the Fashion Law Blog.

EU

EU Lawmakers Set To Tighten Up on Crypto Transfers (reuters.com) 16

European Union lawmakers were set on Thursday to back tougher safeguards for transfers of bitcoin and other cryptocurrencies, in the latest sign that regulators are tightening up on the freewheeling sector. From a report: Two committees in the European Parliament have thrashed out cross-party compromises to be voted on. Crypto exchange Coinbase has warned the rules would usher in a surveillance regime that stifles innovation. The $2.1 trillion crypto sector is still subject to patchy regulation across the world. Concerns that bitcoin and its peers could upset financial stability and be used for crime have accelerated work by policymakers to bring the sector to heel. Under the proposal first put forward last year by the EU's executive European Commission, crypto firms such as exchanges would have to obtain, hold, and submit information on those involved in transfers. That would make is easier to identify and report suspicious transactions, freeze digital assets, and discourage high-risk transactions, said Ernest Urtasun, a Spanish Green Party lawmaker helping to steer the measure through the parliament. The Commission had proposed applying the rule to transfers worth 1,000 euros ($1,116) or more, but under the cross-party agreement this 'de minimis' rule has been scrapped -- meaning all transfers would be in scope.
Bitcoin

Crypto Miners in Texas Need 'Approval to Energize' in New Grid Hurdle (bloomberg.com) 24

Texas has started requiring new large-scale cryptocurrency miners to seek permission to connect to the state's power grid in anticipation of a flood of requests expected to drive up electricity demand. From a report: The Electric Reliability Council of Texas is requiring utilities to submit studies on the impact of miners and other large users tapping the grid before they can get "approval to energize," according to a March 25 notice from the state's main grid operator. Ercot members voted Wednesday to form a task force to hash out details of an interim plan that's ultimately meant to protect the grid from being overwhelmed.
Bitcoin

Crypto Platforms Ask for Rules But Have a Favorite Watchdog (bloomberg.com) 20

As the SEC signals that it wants more oversight of digital asset markets, the industry makes it clear it prefers to be supervised by the smaller CFTC. From a report: It was a classic Washington networking party. Sam Bankman-Fried, the co-founder and chief executive officer of FTX, one of the world's largest crypto trading platforms, held court on a February evening in a private room at the Park Hyatt hotel on the edge of Georgetown. Drinks flowed from an open bar, and hors d'oeuvres were served to the clutch of congressional aides, financial lobbyists, and former regulators. The goal of Bankman-Fried, a 30-year-old billionaire, was to showcase his new lobbying operation -- and to persuade influential Washingtonians that crypto needs more regulation. It may seem strange that a crypto magnate is seeking federal oversight. But as lawmakers and bureaucrats grapple with how to police a fast-growing and risky $2 trillion market, new rules seem inevitable. In March, President Joe Biden signed an executive order calling on federal agencies to work out policies on crypto. Bankman-Fried, whose company last year bought the naming rights to the Miami Heat's basketball arena, is pushing his own ideas of what regulation ought to look like, as well as who his main watchdog should be.

He's arguing for a bigger role for the U.S. Commodity Futures Trading Commission. The relatively small agency monitors futures contracts in basic goods such as crude oil, corn, and pork, as well as financial derivatives such as interest-rate swaps. It also oversees U.S. futures and options contracts on the popular cryptocurrencies Bitcoin and Ether. A U.S. affiliate of the Bahamas-based FTX offers such crypto derivatives, so part of its business is already under the CFTC's purview. Bankman-Fried wants Congress to expand the CFTC's authority to cover trading in the coins themselves. Currently, the CFTC only claims jurisdiction over cash token markets in cases of suspected fraud or manipulation that could affect the performance of crypto derivatives. In February testimony to the Senate, he said this lack of clarity is bad for investors and the industry. Other trading platforms are also starting to see the merits of being overseen primarily by the CFTC, say industry leaders who asked not to be named talking about private discussions.

Bitcoin

Climate Campaign Pushes Bitcoin Network To Drop Energy-Hungry Code (theverge.com) 151

Greenpeace and other environmental groups launched a new campaign today to push the Bitcoin network to slash its growing greenhouse gas emissions. The Verge reports: The goal of the campaign, dubbed "Change the code, not the climate," is to switch up the energy-hungry process of verifying transactions and mining new Bitcoins. [...] In order to validate transactions, Bitcoin miners rely on specialized hardware to solve complex puzzles. Their computers gobble up a lot of energy in the process, and the miners get new tokens in return. It's a process called "proof of work," in which the energy used is sort of the price paid to verify transactions. The process is deliberately energy-intensive as a safety measure. The baked-in inefficiency is meant to discourage bad actors from manipulating the data because it would cost a lot of energy to do so.

The new campaign aims to move Bitcoin away from that energy-hungry proof of work process. The most popular alternative is called proof of stake. Cryptocurrencies that use proof of stake use vastly less energy because there are no puzzles to solve. Instead of essentially paying with electricity to participate in the process, you have to offer up some of your own tokens. This is supposed to prove that you have a "stake" in keeping the ledger accurate. If you mess anything up, you lose tokens as a penalty. While proof of stake might make solve a lot of Bitcoin's pollution problems, experts have been skeptical that miners would be willing to make the change. Miners invest a lot in their hardware and would be hard-pressed to abandon it. And some fans of proof of work maintain that it's the most secure way to maintain the ledger.
"We know Bitcoin stakeholders are incentivized not to change," the campaign acknowledges on its website. "Changing Bitcoin would render a whole lot of expensive infrastructure worthless, meaning Bitcoin stakeholders will need to walk away from sunk costs -- or find other creative solutions."

As the Guardian notes, the campaign is launching a huge digital advertising push via the Wall Street Journal, New York Times, Marketwatch, Politico, Facebook and others. "Organizers are also taking legal action against proposed mining sites and using their large memberships to push bitcoin's biggest investors and influencers to call for a code change." Additionally, the campaign is urging people to tweet at cryptocurrency influencers to support the campaign.
Security

Hackers Steal $600M From Play-to-Earn Game Axie Infinity's Ronin Network (vice.com) 38

A cryptocurrency affiliated with the popular free-to-play blockchain game Axie Infinity has been hacked in one of the largest crypto heists in history. From a report: The Ronin network is a blockchain launched in February 2021 to make interacting with the Ethereum-based Axie Infinity a little less costly. Whereas doing anything at all on Ethereum costs fees, Ronin allows 100 free transactions per day, per user. Axie Infinity is popular in the Philippines, for example, where users work playing the game in exchange for tokens, often on behalf of individuals or firms that may employ dozens or hundreds of so-called "scholars."

In a blog post published on Tuesday, Ronin revealed it had fallen victim to a security breach that has drained half a billion dollars in crypto. Hackers were able to exploit the Ronin bridge and make off with 173,600 ETH (worth about $591,242,019) and $25.5 million worth of the stablecoin USDC in two separate transactions by taking over the blockchain's validator nodes. Validator nodes verify and approve transactions in Ronin's Proof-of-Authority (PoA) model, which differs from the decentralized mining and approval process employed by Bitcoin. Ronin has nine validator nodes, five of which were needed to approve any particular deposit or withdrawal. According to the blog, the hackers "used hacked private keys in order to forge fake withdrawals." The attackers found a backdoor in the gas-free RPC node run by Sky Mavis -- the company that owns Axie Infinity -- allowing them to gain control over a validator node linked to the Axie DAO after it helped Sky Mavis distribute free transactions in November 2021 during an overload of users, according to the Ronin blog post. With Axie DAO's validator node and the four controlled by Sky Mavis, the attackers were able to approve the two transactions.

Bitcoin

Russia Considers Accepting Bitcoin For Oil and Gas (bbc.com) 80

An anonymous reader quotes a report from the BBC: Russia is considering accepting Bitcoin as payment for its oil and gas exports, according to a high-ranking lawmaker. Pavel Zavalny says "friendly" countries could be allowed to pay in the crypto-currency or in their local currencies. Earlier this week, Russian President Vladimir Putin said that he wanted "unfriendly" countries to buy its gas with roubles. The move is understood to be aimed at boosting the Russian currency, which has lost over 20% in value this year. Sanctions imposed by the UK, US and the European Union, following the invasion of Ukraine, have put a strain on Russia's rouble and raised its cost of living.

Mr Zavalny, who heads Russia's State Duma committee on energy, said on Thursday that the country has been exploring alternative ways to receive payment for energy exports. He said China and Turkey were among "friendly" countries which were "not involved in the sanctions pressure." "We have been proposing to China for a long time to switch to settlements in national currencies for roubles and yuan," said Mr Zavalny. "With Turkey, it will be lira and roubles." Mr Zavalny added: "You can also trade bitcoins."

Analysts said Russia may benefit from accepting the popular cryptocurrency, despite the risks. "Russia is very quickly feeling the impact of unprecedented sanctions," said David Broadstock, a senior research fellow at the Energy Studies Institute in Singapore. "There is a need to shore up the economy and in many ways, Bitcoin is seen as a high growth asset." However, he noted that the value of Bitcoin has swung by as much as 30% this year. In comparison, the dollar has traded within 5% against the euro. "Clearly accepting Bitcoin, compared with other traditional currencies, introduces considerably more risk in the trade of natural gas," Mr Broadstock said. "Moreover, one of the major 'friendly' trade partners for Russia is China, and cryptocurrency is banned for use in China," he added. "This clearly limits potential for payment using Bitcoin."

Bitcoin

Over a Dozen Researchers and Critics Respond To New York Times' 'Thinly-Veiled Cryptocurrency Ad' (mollywhite.net) 39

Molly White: On March 20, 2022, the New York Times published a 14,000-word puff piece on cryptocurrencies, both online and as an entire section of the Sunday print edition. Though its author, Kevin Roose, wrote that it aimed to be a "sober, dispassionate explanation of what crypto actually is", it was a thinly-veiled advertisement for cryptocurrency that appeared to have received little in the way of fact-checking or critical editorial scrutiny. It uncritically repeated many questionable or entirely fallacious arguments from cryptocurrency advocates, and it appears that no experts on the topic were consulted, or even anyone with a less-than-rosy view on crypto. This is grossly irresponsible. Here, a group of around fifteen cryptocurrency researchers and critics have done what the New York Times apparently won't.
Bitcoin

Exxon Weighs Taking Gas-to-Bitcoin Pilot to Four Countries (bloomberg.com) 60

Exxon Mobil is running a pilot program using excess natural gas that would otherwise be burned off from North Dakota oil wells to power cryptocurrency-mining operations and is considering doing the same at other sites around the globe, Bloomberg News reported, citing people familiar with the matter. From the report: The oil giant has an agreement with Crusoe Energy Systems to take gas from an oil well pad in the Bakken shale basin to power mobile generators used to run Bitcoin mining servers on site, said the people, who asked to not be named because the information isn't public. The pilot project, which launched in January 2021 and expanded in July, uses up 18 million cubic feet of gas per month that would have otherwise been burned off -- or flared -- because there aren't enough pipelines. Exxon, the largest U.S. oil producer, is considering similar pilots in Alaska, the Qua Iboe Terminal in Nigeria, Argentina's Vaca Muerta shale field, Guyana and Germany, one of the people said.
Bitcoin

Young Ukrainian Escapes War With USB Stick Holding 40% of His Life Savings In Crypto (finbold.com) 166

A 20-year-old Ukrainian man named "Fadey" managed to escape the war and cross into Poland with 40% of his life savings in bitcoin contained on a USB stick. Finbold reports: His experience starts with the invasion and the realization that he would soon have to flee his homeland, for which he needed money. Cash was out of the question. "I couldn't withdraw cash at all, because the queues to ATMs were so long, and I couldn't wait that much time," he said. However, he had a USB stick that contained around $2,000 in Bitcoin, equalling around 40% of Fadey's life savings. The funds on the drive were accessible to him with a unique passcode, allowing him to pay for his survival in another country. "I could just write my seed phrase on a piece of paper and take it with me," he explained. The story was first reported by CNBC.
Bitcoin

Solana Stablecoin Project Cashio Plummets To Zero After Multi-Million Dollar Hack (decrypt.co) 32

The price of Cashio's dollar-pegged stablecoin CASH has fallen from $1 to $0.00005 after an "infinite mint glitch" enabled attackers to mint tokens without providing collateral. Decrypt reports: Cashio developer 0xGhostChain took to Twitter to warn people "not to mint any CASH," adding that the team "are investigating the issue and we believe we have found the root cause. Please withdraw your funds from pools. We will publish a postmortem ASAP." According to DeFiLlama, roughly $28 million of value has been drained from Cashio's protocol due to the exploit. Still, Samczsun, a research partner at Web3 investment firm Paradigm, shared a bleaker picture on Twitter today. The researcher wrote: "Another day, another Solana fake account exploit. This time, Cashio App lost around $50M (based on a quick skim). How did this happen?" The project has not responded to Decrypt to confirm the scale of the attack.
Security

HubSpot Hack Leads To Data Breaches at BlockFi, Swan Bitcoin, NYDIG and Circle (coindesk.com) 4

A data breach at HubSpot, a tool used by many companies to manage marketing campaigns and on-board new users, has affected BlockFi, Swan Bitcoin, NYDIG and Circle. From a report: However, all the companies said their operations were not affected and their treasuries were not at risk. HubSpot is a customer relationship management (CRM) tool used to store users' names, phone numbers and email addresses for marketing purposes, and measure the effectiveness of marketing campaigns. While user information was leaked to hackers, the affected companies said passwords and other internal information were not affected. In outreach emails seen by CoinDesk, the companies said HubSpot is an external tool and hackers did not gain access to internal systems. HubSpot said the breach was the result of a bad actor getting access to an employee account and using it to target stakeholders in the cryptocurrency industry. The company said 30 clients were affected, but has not published a full list.
Bitcoin

India To Tax Each Crypto Investment Independently (techcrunch.com) 12

India's proposed taxation law of virtual digital assets won't permit individuals to offset loss from one asset against profit of another, the Ministry of Finance said Monday in a move that the head of the nation's top cryptocurrency exchange termed as "detrimental" and "regressive." From a report: India proposed law for taxing virtual currencies in February this year. It proposed taxing income from the transfer of any virtual assets at 30%. To capture details of all such crypto transactions, New Delhi proposed a 1% tax deduction at source on payments made related to purchase of virtual assets. In a clarification posted on Monday, the Ministry of Finance today announced its intention to tax each digital asset investment independently, a departure from how the nation regulates transactions at the stock market.
Bitcoin

Inside a Bitcoin Mine At a Natural Gas Well In Texas (vice.com) 51

"Motherboard's new CRYPTOLAND documentary series went to West Texas to get into the weeds about cryptocurrency mining and its impact on the environment," writes an anonymous Slashdot reader. From the report: Motherboard visited Giga Energy Solutions in east Texas for the latest episode of CRYPTOLAND, an eight-part documentary series on how cryptocurrency is affecting our world. Mines like Giga's are at the center of heated debate over cryptocurrency's environmental impact. To critics, turning natural gas into bitcoins is emblematic of everything wrong with the growing industry. To Giga Energy co-founders Brent Whitehead and Matt Lohstroh, though, they're undertaking an environmental service -- generating virtual currency using harmful gas that would otherwise be sent into the atmosphere. Instead of combusting surplus natural gas from an oil rig, they're diverting it into a generator, which converts it into electricity to power computers that mine for bitcoin. There's been a lot of skepticism around crypto's impact on the environment as well. The report continues: Alex De Vries, a data scientist at the Netherlands' central bank and founder of Bitcoin energy tracking project Digiconomist who spoke with Motherboard reporter Audrey Carleton as well as Hines and CRYPTOLAND host Krishna Andavolu, says Bitcoin's reliance on the fossil fuel sector is making vast and irreversible contributions to climate change, however.

"Most people are putting their money in Bitcoin simply because they expect the value of Bitcoin to go up," he said. "If that's the situation, where there is just not much possible practical use, but there is a very large energy impact, then my verdict would be that's absolutely not worth it."
The full episode is available on YouTube.

In a separate episode published on Wednesday, Motherboard unearthed found footage from one of the first Bitcoin conferences: Bitcoin 2013 in San Jose.
Bitcoin

Unearthing Found Footage From One of the First Bitcoin Conferences (vice.com) 14

em1ly writes: Motherboard found old footage from one of the first major Bitcoin conferences: Bitcoin 2013 in San Jose. They filmed at the conference -- where Bitcoin cost $118 at the time -- and in the basement of the organizer and founder of BitInstant, Charlie Shrem [who would later get arrested and go to jail because his company was found to be laundering money for users on the Silk Road drug market]. The footage is a part of a documentary series Motherboard is airing on YouTube called CRYPTOLAND, about the "environmental, political, and cultural implications of the crypto gold rush." "[W]e shot this footage and then it never turned into a documentary," writes Motherboard's Jason Koebler. "People who worked on it left the company or moved on to other projects, we got busy, the footage went onto a server somewhere. Years passed. The legend of the lost Bitcoin tapes began."
Bitcoin

Elizabeth Warren's Anti-crypto Crusade Splits the Left (politico.com) 123

Democratic lawmakers are entering a crypto collision course. Politico reports: Questions around how to police digital currency and whether to support its adoption are driving a rift not just between the party's liberal and centrist wings but also among progressives who often see eye-to-eye on financial regulation. Sen. Elizabeth Warren of Massachusetts -- who has long led the left's charge to crack down on banks and Wall Street -- has emerged as one of the party's most vocal cryptocurrency critics, warning that it exposes consumers to danger, is ripe for financial crimes and is an environmental threat because of its electricity usage. But a new generation of progressives -- and a number of other senior Democrats -- are embracing the startup industry. They're arguing against regulations that could stifle what proponents say is a new avenue for financial inclusion and a breakthrough alternative to traditional banks. "The project of radically decentralizing the internet and finance strikes me as a profoundly progressive cause," Rep. Ritchie Torres (D-N.Y.) said in an interview. "You should never define any technology by its worst uses. ... There's more to crypto than ransomware, just like there's more to money than money laundering."

The simmering conflict is set to intensify in the coming months. President Joe Biden last week asked federal agencies to start solidifying the federal government's approach to crypto, framing the step as supportive of innovation rather than an industry crackdown. The price of Bitcoin surged on the news. Separately, Democratic lawmakers have started to draft a host of crypto regulation bills that are also exposing a wide range of views on the government's role in the $1.7 trillion market for digital assets. The lack of consensus among Democrats means it's unlikely Congress will act anytime soon to pass major legislation laying out the direction of regulation of the new market. Some Democrats and lobbyists had expected initial votes early this year, but that timeline has slipped.

Bitcoin

Russians Liquidating Crypto in the UAE To Seek Safe Havens (financialpost.com) 58

Crypto firms in the United Arab Emirates (UAE) are being deluged with requests to liquidate billions of dollars of virtual currency as Russians seek a safe haven for their fortunes, Reuters is reporting, citing company executives and financial sources. From the report: Some clients are using cryptocurrency to invest in real estate in the UAE, while others want to use firms there to turn their virtual money into hard currency and stash it elsewhere, the sources said One crypto firm has received lots of queries in the past 10 days from Swiss brokers asking to liquidate billions of dollars of bitcoin because their clients are afraid Switzerland will freeze their assets, one executive said, adding that none of the requests had been for less than $2 billion.
Bitcoin

Why Isn't Bitcoin Booming? (nytimes.com) 168

"Bitcoin was seen by many of its libertarian-leaning fans as a kind of doomsday insurance," argues a columnist in the New York Times, "a form of 'digital gold' that would be a source of stability as the world grew more chaotic and unpredictable....

"But Bitcoin hasn't boomed.... Bitcoin prices are down 10 percent in the past month, and Ether, the second most popular crypto coin, is down roughly 15 percent.Day-to-day usage of cryptocurrencies isn't picking up the way you'd expect, either. Bitcoin trading volume rose after Russia invaded Ukraine, but it has remained relatively flat since, suggesting that people aren't rushing to trade their rubles and hryvnia (Ukraine's currency) for digital currencies. Russian oligarchs don't appear to be using crypto to evade sanctions en masse, either, despite initial fears that they might...."

The column ultimately argues that bitcoin isn't playing a central role in the unfolding crisis. "Which raises the obvious question: Why not?" One possibility is that crypto is still too confusing and too difficult for normal people to use, especially during a war. Internet access is spotty in many parts of Ukraine, and reports have suggested that even the country's elites are struggling to convert their assets into crypto.

Another possibility, popular among skeptics of Bitcoin and other cryptocurrencies, is that Bitcoin is still too volatile to be useful as a hedge against economic and political instability. "The Bitcoin and crypto communities have been selling a false narrative all these years that Bitcoin is supposed to be a safe haven from the traditional financial markets," said Jimmy Nguyen, the president of the Bitcoin Association, a cryptocurrency trade group. (His group promotes a Bitcoin spinoff, Bitcoin SV, that sees itself as a more useful version of the cryptocurrency.) Bitcoin is doomed, Mr. Nguyen argues, because it can be slow and expensive to process transactions, making it less useful for paying for things. "And so a lot of Bitcoin supporters have had to come up with this argument that it's meant to be a reserve asset," he said.

Kevin Werbach, a professor of legal studies and business ethics at the Wharton School at the University of Pennsylvania, floated a different theory. Bitcoin's earliest and most vocal adopters, he said, tended to be libertarians who saw cryptocurrency as a kind of insurance policy against hyperinflation and government corruption. But the more recent price swings in the crypto markets attracted a surge of speculators who viewed Bitcoin and other cryptocurrencies mainly as investments, and cared less about their political implications. "There's a tremendous amount of rhetoric around Bitcoin in particular that suggests that it's predominantly a means of escaping from the government-issued fiat currency system," he said.

"And yet most of the activity, according to basically every rigorous study that's been done, is predominantly people speculating...."

CNN got another reaction from Eswar Prasad, a professor at Cornell's Dyson School of Applied Economics and Management, also a senior fellow at the Brookings Institution and the author of "The Future of Money: How the Digital Revolution is Transforming Currencies and Finance."

The professor's opinion? While bitcoin "has failed in its stated purpose as a medium of exchange for conducting transactions, it has become a speculative financial asset..." The Russian government cannot count on bitcoin to evade sanctions — after all, payments for international transactions still need to be settled in real money such as dollars or euros. Furthermore, cryptocurrencies cannot in any significant way prevent a country's currency from collapsing in value relative to major reserve currencies since those values are determined in formal financial markets. Cryptocurrencies might in fact hurt Russia if they are seen by the country's citizens as a better option than the plunging domestic currency. Thus, bitcoin might end up precipitating a flight of deposits from Russia's banking system and even as a conduit for capital flight out of the country.
United Kingdom

Bitcoin ATMs Declared Illegal in UK by Financial Regulator (gizmodo.com) 45

Bitcoin and other cryptocurrency ATMs that allow people to buy and sell crypto are illegal in the UK, according to a letter made public on Friday by Britain's Financial Conduct Authority. From a report: That means anyone currently operating a Bitcoin ATM is doing so illegally and will have to stop, according to the government regulator. "Crypto ATMs offering cryptoasset exchange services in the UK must be registered with us and comply with UK Money Laundering Regulations," the Financial Conduct Authority announced on its website. "None of the cryptoasset firms registered with us have been approved to offer crypto ATM services, meaning that any of them operating in the UK are doing so illegally and consumers should not be using them," the FCA continued. It's unclear how many bitcoin ATMs may currently be in operation throughout Britain, though the online tracker Coin ATM Tracker claims there are currently 84 in the UK. The same website lists over 34,000 crypto ATMs in the U.S. alone, by far the largest number in the world.

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