An anonymous reader shares a report: Justin Sun, a budding Chinese cryptocurrency mogul, walked through the shiny lofted atrium of the departure terminal at South Korea's Incheon International Airport. It was September 2017, an early height of the crypto craze, and Sun had every reason to be nervous after his first ICO. An ICO, or initial coin offering, is like an initial public offering for a new stock. It's the first time cryptocurrency traders have the opportunity to buy a brand-new token. But Sun wasn't anxious about the money he stood to gain if it took off or what he'd lose if the token flopped. In fact, his company, Tron, introduced a coin called TRX -- a huge success, selling out quickly for $70 million. The problem for Sun was that the Chinese government, just days before, had banned ICOs entirely. The state claimed ICOs were vehicles for financial fraud, pyramid schemes, and other illegal and criminal activities -- a credible claim because, in 2017, hundreds of new and highly dubious cryptocurrency tokens were being introduced.

People buy into initial coin offerings for all sorts of reasons: sometimes because the coin's underlying blockchain technology is promising, or sometimes because they're speculating that a cryptocurrency's value might rise astronomically over time, like Bitcoin has. But in many cases, the coin founders immediately sold all the tokens they held for a vast sum of money, crashing the its value in the process and every other buyer's investment. These were "exit scams" or "pump-and-dumps," and all told, they bilked crypto buyers for billions of dollars. People were swindled so frequently the United States Securities and Exchange Commission could barely file criminal charges fast enough. The Chinese government's ICO ban was why, a week later, Sun was waiting for a flight in Incheon International Airport. Sources who heard him tell this story say Justin believed he was a fugitive and was ready to take off at a moment's notice.

Sun's true escape route from Beijing to Seoul remains cloaked in rumor. But the reason for his getaway was simple: he likely knew the ICO ban was coming and went through with it anyway. Sun pushed TRX to finish its token sale the day before the ban was announced. Sun had been tipped off by Changpeng "CZ" Zhao, the founder and CEO of Binance, one of the world's busiest cryptocurrency exchanges. "They were in it together," a former employee told me. Allegedly, Zhao learned of the impending government ban from his own connections. But at some point after the ICO ban, Zhao made clear his relationship with Justin Sun was not personal, saying, "We have only talked business and haven't really 'hung out' in any way." But as recently as 2019, Zhao and Sun vacationed together on the shores of Lake Geneva. Over social media, they gave the impression it was a business trip.

President Biden signed an executive order on Wednesday instructing agencies across the federal government to study the possible risks presented by the explosion in popularity of cryptocurrencies and consider the creation of a U.S. digital currency. From a report: The executive order urges federal regulators to review the risks a roughly $1.75 trillion crypto market presents to consumers, investors and the broader economy. Federal agencies will have several months to prepare a report with their findings, which would then inform any new regulatory actions the White House takes. About 16% of adult Americans, or roughly 40 million people, have invested in, traded or used cryptocurrencies, according to a White House fact sheet. That growing prevalence of digital assets, which include volatile cryptocurrencies like bitcoin and so-called stablecoins pegged to assets like the U.S. dollar, has pushed the Biden administration to centralize its work on the topic. White House officials have been working with the crypto industry and experts for several months to prepare the executive order. "We must take strong steps to reduce the risks that digital assets could pose to consumers, investors, and business protections," Mr. Biden said in the order, adding that the White House will monitor cryptocurrencies' impact on financial stability, nationals security and climate change.

An anonymous reader quotes a report from GIzmodo: Ormeus is a cryptocurrency that was launched in 2017, the brainchild of John and Tina Barksdale -- two siblings and self-identified crypto marketers -- who are now facing federal securities charges in connection with their business. In a complaint unsealed Tuesday, the Securities and Exchange Commission charged the siblings with defrauding their investors out of $124 million. In an accompanying federal indictment unsealed the same day, the Justice Department announced multiple charges against John Barksdale -- wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud. Both agencies allege that the duo used misleading and outright fraudulent marketing techniques to lure in investors to a coin that wasn't nearly as valuable as they claimed.

"As alleged, Barksdale operated like a traveling salesman and peddled lies, overstatements, and misrepresentations regarding a cryptocurrency called Ormeus Coin, which resulted in duping thousands of investors throughout the world," said Ricky J. Patel, Homeland Security Investigations New York Special Agent in Charge, in a statement. According to officials, the Barksdales claimed that their business was supported by "one of the largest crypto mining operations in the world" and that the company was raking in monthly mining revenue between $5.4 and $8 million. The Barksdales also heralded their token as a "new digital money system backed by a fully-audited industrial crypto-mining operation." But, according to federal officials, most of those claims were BS.

Officials say the Ormeus mining operations shut down in 2019 after drawing too little money, that it never reached even a million dollars per month. According to the DOJ, John Barksdale claimed to have $250 million worth of Bitcoin stored at the mining operation that would secure the token's value. In reality, the coins belonged to someone else, the indictment states. The indictment against him claims that misrepresentations and fabrications about the coin's value were promoted via Ormeus Global, a multi-level marketing company that used false and manipulative advertising to encourage hapless investors to go all-in on the coin.

Thursday the Washington Post reported the Ukrainian government had already received more than $42 million in cryptocurrency donations since last Saturday — "plus digital artwork including a limited edition worth roughly $200,000," according to blockchain analytics firm Elliptic. Some of the crypto donations have already been converted into traditional currency, primarily euros, according to Kuna.io, the Kyiv-based cryptocurrency exchange that helped the government set up and manage its crypto wallets for donations. The money was then used to buy critical supplies like drones, bulletproof vests, heat-sensitive goggles and gasoline, from both state actors and the private sector.

None of the more than 180 donated digital artworks — known as non-fungible tokens, or NFTs — have been sold, according to data from blockchains, which store information in an immutable, public digital ledger.... Ukraine, which hadn't asked for NFTs, received a map of the Donetsk area of eastern Ukraine, parts of which have been controlled by Russian-backed separatists, in the colors of the Ukrainian flag, plus photos of blue-and-yellow peace signs and an animated "fire dragon." NFT donations also included images from the Shibelon collection, which is "based on a mythology in which Elon Musk was granted genius powers by an alien, who also created bitcoin," wrote journalist
In addition to well-established cryptocurrencies, Ukraine received donations denominated in almost 100 obscure digital currencies, according to a Post analysis of data from Etherscan. They included a new one named Save Ukraine, another with a racially abusive name, and several themed after crypto community in-jokes focused on dogs and Musk, the Tesla CEO. The government's strategy has been to convert less popular cryptocurrencies into traditional money first and hold bitcoin and ether in reserves because they are more stable and liquid, Chobanian said. Donations were still streaming in as new efforts to raise crypto for the Ukrainian government cropped up.

Early Tuesday morning Ukraine time, Ukraine's 31-year-old deputy prime minister, Mykhailo Fedorov, announced AidForUkraine, a joint effort of his Digital Ministry, developers behind the Solana blockchain and Everstake. So far, AidForUkraine has raised $1.4 million, according to its website.... The speed with which the AidForUkraine fundraising effort came together was "magic," said Everstake's Vasylchuk, who fled Kyiv days before the invasion thanks to his pilot's license and is in temporary housing in Florida.... Beyond the official government-led effort, Come Back Alive, an NGO benefiting Ukraine's army, has also received millions in cryptocurrency donations — and is getting millions more from UkraineDAO, a group organized on the blockchain that held an auction to raise funds, according to blockchain data. The NGO organizers pivoted to crypto after their campaign was suspended from Patreon. But UkraineDAO is limiting spending to helping the victims of war, the New York Times reported. Patreon spokesperson Ellen Satterwhite said that would "absolutely be allowable under our guidelines."
Elsewhere On GoFundMe, Mila Kunis and Ashton Kutcher have already raised over $15 million for refugee and humanitarian aid — in just one day.

An anonymous reader quotes a report from CoinTelegraph: As the West continues to impose more sanctions against Russian banks following Russia's invasion of Ukraine, one Ukrainian official has called for sanctions on Russians' cryptocurrency holdings as well. Mykhailo Fedorov, minister of digital transformation of Ukraine, took to Twitter on Sunday to urge the global cryptocurrency exchanges to block addresses of Russian users. He emphasized that exchanges should freeze not only the addresses tied to Russia and Belarus officially but also to "sabotage ordinary users." Fedorov subsequently pointed out that some industry-related services have already moved to freeze assets from Russia and Belarus, including the nonfungible token platform DMarket. "Funds from these accounts could be donated to the war effort. Nowadays Robin Hoods. Bravo," Fedorov stated. He also cited the ongoing measures taken by the social media giant Meta regarding Russia's attack on Ukraine. Fedorov's appeals could potentially be catastrophic for the Russian cryptocurrency market, as Russians were estimated to hold more than $200 billion in crypto as of early February.

Binance does not plan to freeze assets by Russians because this would contradict cryptocurrency's main principles of financial freedom, a spokesperson for the firm told Cointelegraph on Monday: "We are not going to unilaterally freeze millions of innocent users' accounts. Crypto is meant to provide greater financial freedom for people across the globe." The representative added that the exchange is taking measures to ensure that sanctions are against sanctioned entities in Russia while "minimizing the impact to innocent users." "Should the international community widen those sanctions further, we will apply those aggressively as well," the spokesperson added.

Some crypto executives believe that sanctions against Russia are eventually inevitable. However, they should target only select persons as the U.S. Office of Foreign Assets Control usually does. "We think that the sanctions will be inevitable by naming new sanctioned persons as US/OFAC has done in the past. However, banning all crypto companies from offering services to ordinary Russians would not make sense and would cause more harm for everyday people than good," LocalBitcoins chief marketing officer Jukka Blomberg told Cointelegraph. Kraken CEO Jesse Powell also said that the Kraken exchange will not be able to freeze the accounts of the exchange's Russian clients without a legal requirement. "Russians should be aware that such a requirement could be imminent," he added. Powell previously recommended Kraken users move their crypto assets out of the exchanges, referring to Canada's Emergency Act freezing the crypto of dissidents.

From the Hindustan Times: BitConnect founder Satish Kumbhani was indicted by a U.S. grand jury on charges he orchestrated a global Ponzi scheme that raised $2.4 billion from investors in a fraudulent cryptocurrency investment platform, according to a Justice Department statement. Kumbhani, 36, was charged in San Diego with misleading investors about BitConnect's purported propriety technology... BitConnect used money from new investors to pay earlier ones and also operated as an unlicensed money transmitting business, the U.S. said.
More details from the San Diego Union-Tribune: Investors around the world, including those in San Diego, were encouraged to buy BitConnect's open-source, decentralized cryptocurrency, called BCC, using Bitcoin for the purchase. Investors would then "lend" their BCC tokens to Bitconnect, which would purportedly invest the proceeds using proprietary technology known as the Trading Bot and Volatility Software. The technology was supposedly designed to trade automatically, and profitably, by buying and selling on the volatility of Bitcoin, according to the indictment.

But much of the technology remained a mystery to investors. When someone asked for a demonstration at an event in 2017, Kumbhani was evasive: "So you ask me very hard question," he told one interviewer. He added later, "For privacy reasons we are not disclosing anything..."

Prosecutors say the investments weren't being traded as promised but were instead used to pay out earlier investors, typical of a pyramid scheme. The funds would also be used to pay BitConnect's army of promoters, who would market the investment opportunity on social media and at live events. Glenn Arcaro, described by prosecutors as "one of the most prolific and successful" of the bunch overseeing the United States, also formed his own cryptocurrency education course called Future Money. But the course was really a way to funnel potential investors to BitConnect, prosecutors said.

Arcaro, a Los Angeles resident, pleaded guilty to conspiracy to commit wire fraud in September for his role in the scheme.
After shutting down abruptly, Kumbhani then "directed his network of promoters to fraudulently manipulate and prop up the price" of BCC, "to create the false appearance of legitimate market demand..." according to a press release from the U.S. Department of Justice: Kumbhani is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodity price manipulation, operation of an unlicensed money transmitting business, and conspiracy to commit international money laundering. If convicted of all counts, he faces a maximum total penalty of 70 years in prison.

Financial sanctions are easier than ever for Russians to evade. Thank Bitcoin CNN: 'Financial sanctions are easier than ever for Russians to evade. Thank Bitcoin' The senior editor of CNN Business writes: The West's initial salvo of financial sanctions against Russia failed to deter President Vladimir Putin from launching a full-scale invasion of Ukraine. Now the United States is taking a punitive approach, announcing another round of sanctions meant to tighten the screws on Russian banks and "corrupt billionaires." But some experts say those measures, which so far do not target Putin himself, are becoming increasingly easy to evade, thanks in part to a surge of cryptocurrency adoption in Russia.

The U.S. and EU sanctions rely heavily on banks to enforce the rules. If a sanctioned business or individual wants to make a transaction denominated in traditional currencies such as dollars or euros, it's the bank's responsibility to flag and block those transactions. But digital currencies operate outside the realm of standard global banking, with transactions recorded on a public ledger known as the blockchain. "If the Russians decide — and they're already doing this, I'm sure — to avoid using any currency other than cryptocurrency, they can effectively avoid virtually all of the sanctions," said Ross S. Delston, an expert on anti-money laundering compliance.

The U.S. Treasury is well aware of this problem. In an October report, officials warned that digital currencies "potentially reduce the efficacy of American sanctions" by allowing bad actors to hold and transfer funds outside the traditional financial system. "We are mindful of the risk that, if left unchecked, these digital assets and payments systems could harm the efficacy of our sanctions."
Meanwhile, the BBC reports Ukraine has received at least $11 million in anonymous bitcoin donations to support its war effort — with Forbes noting that includes $1.9 million from a wallet also associated with an auction of NFTs raising funds for WikiLeaks founder Julian Assange.

On Friday the Washington Post's live updates on the Russia-Ukraine situation included the story of a tech firm trying to get its employees out of Kyiv: John Sung Kim, chief executive of the software outsourcing company JetBridge, has been communicating with his 24 employees in Kyiv, all software developers, through Slack. Half of them are trying to leave Ukraine, but Kim says he is struggling to help them and has been unable to get them train tickets, a rental car or gasoline.

"The other half of my team wants to stay and fight," said Kim. "I got on an all-hands with them this morning and told them it's not their responsibility to be soldiers and there's other ways they can contribute since they're software engineers, but there's nothing I can say to dissuade them." Kim said JetBridge's clients are almost exclusively Silicon Valley tech companies that are publicly traded or have raised venture capital financing. "The universal issue other than transportation logistics seems to be grandparents. 'My babushka' is the common theme of why they're torn from actually leaving," he said. The fallout from Russia's invasion has also impacted JetBridge's employees in Belarus. "The males in Belarus are scared that there's going to be military conscription, and unlike the Ukrainians, my Belarusian engineers have zero desire to pick up a rifle. Zero," he said.

In anticipation of European Union sanctions on Belarus, Kim said JetBridge has started paying employees in bitcoin.

MattSparkes writes: Bitstamp, Europe's largest cryptocurrency exchange, says it has handed over information on some of its customers to the UK's intelligence agencies, MI5 and MI6. The news suggests that bitcoin and other cryptocurrencies are being used in serious organised crime and terrorism, as well as domestic crime.

The Security Service, also known as MI5, is responsible for preventing terrorism and espionage within the UK, while the Secret Intelligence Service, commonly known as MI6, is tasked with foreign intelligence. Neither organisation tackles ordinary crime, unless there is a threat to national security, and until now no cryptocurrency investigations have been confirmed.

The hottest spot in crypto right now is coins with prices that don't move. From a report: Stablecoins, cryptocurrencies which peg their value to assets such as the U.S. dollar, have ballooned in size over the past few months as Bitcoin and other coins whipsaw. The total market capitalization of stablecoins currently stands around $180 billion, up from roughly $38 billion a year ago, Coin Metrics data compiled by The Block show. By comparison, the total crypto universe is largely stagnant over the past year. The surge in market value shows that crypto traders are effectively moving their holdings to cash, according to James Malcolm of UBS. Bitcoin prices have collapsed by about 50% since mid-November, with many smaller coins posting even bigger declines. Rather than moving money off crypto-trading exchanges by converting back into fiat currencies -- a cumbersome and potentially costly process -- it's easier for investors to simply wait out the volatility in stablecoins, Malcolm said.

New submitter LZ_Mordan writes: David Heinemeier Hansson, the Ruby on Rails web development framework creator, took to Twitter on Monday to tell his followers that he was no longer a Bitcoin skeptic. "I still can't believe that this is the protest that would prove every Bitcoin crank a prophet. And for me to have to slice a piece of humble pie, and admit that I was wrong on crypto's fundamental necessity in Western democracies," Hansson wrote. In a blog post titled "I was wrong, we need crypto," the Danish programmer mentioned that he's been skeptical about Bitcoin and the crypto industry in general since the early 2010s.

He noted that some of his biggest arguments against Bitcoin were the cryptocurrency's energy consumption, transaction fees, the lack of real decentralization, supposed fraud involving Tether (USDT) stablecoin and many others. But all these arguments do not provide enough reasons to disregard cryptocurrencies as a tool to support freedom and democracy in situations where countries like Canada impose martial law in response to peaceful protest movements, Hansson argued, stating: "It's clear to me now that I was too hasty to completely dismiss crypto on the basis of all the things wrong with it at the moment. Instead of appreciating the fundamental freedom to transact that it's currently our best shot at protecting."

Ethereum cofounder Vitalik Buterin has said many crypto developers wouldn't be unhappy to see a continued slide in the price of digital currencies, as the slump could clear out less-viable projects. From a report: Cryptocurrencies have fallen in recent weeks alongside stocks, as investors grow more cautious about taking risks given persistent rises in inflation, expected interest-rate hikes by the Federal Reserve, and geopolitical tensions. But the prospect of more losses and a bear market -- generally, where prices fall 20% from a recent high -- won't deter some in the crypto world, Buterin told Bloomberg. "The people who are deep into crypto, and especially building things, a lot of them welcome a bear market," he said in an interview published Saturday. [...] On the other hand, falling prices separate the curious from the serious, he argued. That is why a "crypto winter" -- when prices keep crashing and fail to recover for a long time -- could be seen as a positive. "The winters are the time when a lot of those applications fall away, and you can see which projects are actually long-term sustainable, like both in their models and in their teams and their people," the ethereum cofounder said.

"Vice examines the toll on mental health experienced by people who invest a large portion of their net worth into volatile cryptocurrencies," writes long-time Slashdot reader leathered.

Vice argues that "The stress and anxiety that goes with funneling your life savings into a volatile market is no joke." Countless people have watched thousands of pounds disappear before their eyes.... Many crypto-investors are ordinary people taking a risk with their life savings rather than elite traders who can swallow sudden losses. A recent CNBC survey of 750 crypto investors found that a third actually knew very little about what they were investing in. The question is: What happens to these people when they lose big...? It seems like this fast-growing investor community is generating its own fast-growing mental health crisis....

Contrary to the frequent declarations that investing is an everyman route to wealth and happiness, interviewees told me that crypto had nearly ruined their lives.... Despite the intense stress shared by some crypto investors, finding a space to discuss these experiences isn't easy. Across Reddit and Twitter conversations around crypto, there's usually one reaction to downturns: "Don't be an anxiety bitch, HODL [Hold on for Dear Life]" — in other words, don't you dare pull out. Memes regularly circulate that joke about the intense stress and torment that come with investing.

The need to put on this brave face could be down to the fact that voicing your anxiety has a direct impact on the markets, which are essentially a reflection of confidence. Coins go higher the more people invest and drop the more people pull out. Crypto might be anxiety-inducing, but people don't make money from acknowledging this and actively lose out if they do.... HODL has become a joke in the crypto space, but that's exactly what so many investors are trying and failing to do with their psychological wellbeing.

Experts say crypto will eventually bounce back — as it often seems to do — but you have to wonder just how much damage will be done to the lives of its investors before it does.

Federal investigators spent years hunting for clues in the 2016 hacking of the Bitfinex cryptocurrency exchange, when thieves stole bitcoin now worth $4.5 billion. In the end, what helped lead them to two suspects was something much more quotidian: a $500 Walmart gift card. From a report: That card and more than a dozen others like it, including for Uber, Hotels.com and PlayStation, were linked to emails and cloud service providers belonging to a young Manhattan couple, Ilya "Dutch" Lichtenstein and Heather R. Morgan, according to a criminal complaint. Authorities arrested the couple after seizing $3.6 billion worth of bitcoin allegedly in their control -- the Justice Department's largest financial seizure ever. New details have since emerged about the investigation, in particular how it took advantage of not only advanced forensic tools but also the growing push to rein in crypto crime, including by the industry itself. The discoveries would have been less likely to happen around the time of the hack, when bitcoin was far outside the mainstream of the financial world.

Senators Jim Risch, Bob Menendez, and Bill Cassidy's Accountability for Cryptocurrency in El Salvador (ACES) Act would require a State Department report on mitigating risks to the U.S. financial system from El Salvador's adoption of Bitcoin as legal tender. CoinDesk reports: "El Salvador recognizing Bitcoin (BTC) as official currency opens the door for money laundering cartels and undermines U.S. interests," said Bill Cassidy (R-La.). "If the United States wishes to combat money laundering and preserve the role of the dollar as a reserve currency of the world, we must tackle this issue head on." If passed, the bill would require the State Department to report on a laundry list of subjects with respect to El Salvador and Bitcoin, including the flow of remittances from the U.S. to El Salvador, bilateral and international efforts to combat transnational illicit activities, and the potential for reduced use by El Salvador of the greenback.

The move quickly drew a partly comic, partly angry response from El Salvador President Nayib Bukele: "OK boomers ... You have zero jurisdiction on a sovereign and independent nation. We are not your colony, your back yard or your front yard. Stay out of our internal affairs. Don't try to control something you can't control."

A top official of India's central bank has compared cryptocurrency to a "Ponzi scheme" and suggested an outright ban in its sharpest criticism just weeks after the government proposed taxation of the virtual digital asset and paved way to recognize it as legal tender in the world's second-largest internet market. From a report: T. Rabi Sankar, deputy governor of Reserve Bank of India (RBI), told an audience at a banking conference that cryptocurrencies have been "specifically developed to bypass the regulated financial system," and are not backed by any underlying cash flow. "We have also seen that cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and may even be worse," he said. "As a store of value, cryptocurrencies like bitcoin have given impressive returns so far, but so did tulips in 17th century Netherlands."

An anonymous reader quotes a report from Motherboard: The most insufferable part of every Super Bowl Sunday has historically, without fail, been the ads. This year was no exception, with an unrelenting barrage of ads trying to manifest the metaverse, convince viewers they're missing out on crypto, and lure new blood to online and physical casinos. Results were mixed. Coinbase, in one ad named WAGMI ("we're all going to make it"), crafted an advertisement that bounced a QR code around the screen, changing colors each time it hit the edge like an old-school DVD menu. Scanning the QR codewhich immediately forfeits your right to enter heaventakes the user to this page, where Coinbase offers $15 in Bitcoin for signing up as well as a chance to enter a contest to win one of three prizes for $1 million worth of Bitcoin. The linked webpage went down almost immediately thanks to the increased traffic from the ad, and ridicule at the idea of paying millions of dollars to send millions of viewers to a down site poured in from around the web.

To Coinbase, though, the ad was a success. In a blog post congratulating itself on the advertisement and interviewing Coinbase Chief Marketing Officer Kate Rouch about why the ad was so good, the company revealed it saw "20M+ hits on our landing page in one minute" which "led to us temporarily throttling our systems." Chief executive Brian Armstrong took to Twitter to gloat about the ad: ranked #1 by AdWeek and peaking at #2 in the Apple App Store, just ahead of apps for the Pepsi Super Bowl Halftime Show and the NFL. As it turns out, putting up nothing but a QR code in the middle of a widely-watched sports event and offering free money as well as a chance to win $3 million is a good way to build interest in your app. When Motherboard reached out to Coinbase about the ad, the company directed Motherboard to Rouch's blog post and reiterated its main points.

While taking a victory lap for the apparent success of its ad, Coinbase took the time to explain why this is definitely not at all like the dotcom bubble, which many critics have said is an apt comparison for Sunday's ads. "There have been a lot of comparisons to the dot.com era and speculation that many of the crypto companies advertising in this year's Super Bowl will inevitably fail," said Rouch in Coinbase's blog post. "We don't think about it that way and judging from the early response we've seen, Super Bowl viewers don't either." Rouch insisted that the sheer number of crypto ads in the Super Bowl was "yet another signal that crypto is bursting into the mainstream, and at the center of the cultural zeitgeist." Further reading: This Year's Super Bowl Broadcast May Seem 'Crypto-Happy'. But the NFL Isn't

As cryptocurrencies gain wider acceptance, the division of the family stash has turned into a major source of contention, with estranged couples trading accusations of deception and financial mismanagement. From a report: An ugly divorce tends to generate arguments about virtually everything. But the difficulty of tracking and valuing cryptocurrency, a digital asset traded on a decentralized network, is creating new headaches. In many cases, divorce lawyers said, spouses underreport their holdings, or try to hide funds in online wallets that can be difficult to get into. "Originally, it was under the mattress, and then it was the bank account in the Caymans," said Jacqueline Newman, a divorce lawyer in New York who works with high-net-worth clients. "Now it's crypto." The rise of cryptocurrencies has provided a useful medium of exchange for criminals, creating new opportunities for fraud. But digital assets are not untraceable. Transactions are recorded on public ledgers called blockchains, enabling savvy analysts to follow the money.

Some divorce lawyers have come to rely on a growing industry of forensic investigators, who charge tens of thousands of dollars to track the movement of cryptocurrencies like Bitcoin and Ether from online exchanges to digital wallets. The investigative firm CipherBlade has worked on about 100 crypto-related divorces over the last few years, said Paul Sibenik, a forensic analyst for the company. In multiple cases, he said, he has traced more than $10 million in cryptocurrency that a husband hid from his wife. "We're trying to make it a cleaner space," Mr. Sibenik said. "There needs to be some degree of accountability." In interviews, nearly a dozen lawyers and forensic investigators described divorce cases in which a spouse -- usually the husband -- was accused of lying about cryptocurrency transactions or hiding digital assets. None of the couples agreed to be interviewed. But some of the divorces have created paper trails that shed light on how these disputes unfold.

During today's telecast of the Super Bowl, 100 million Americans will see at least three commercials promoting cryptocurrency, reports the Washington Post, "and though Tom Brady may be gone from the game, he hovers over it, hawking crypto exchange FTX."

"Yet the hype belies a more complicated relationship. Unlike the National Basketball Association, the National Football League, the country's most popular sports league, has essentially prohibited its teams from using crypto." It's a microcosm of the broader cultural battle between those touting the currency as the shiny future and others warning of its dangers.... [T]he headlines often come with a negative tint. New York Times columnist and economist Paul Krugman warned last month about crypto's parallels to the subprime mortgage crisis. This week, the FBI arrested a New York couple for allegedly conspiring to launder billions in crypto. That can scare the large corporate entities of professional sports, particularly the NFL, whose love of fresh revenue sources is matched only by its fear of public relations disasters.... In September, a memo revealed by the Athletic showed the league's restrictive attitude toward crypto... "Clubs are prohibited from selling, or otherwise allowing within club controlled media, advertisements for specific cryptocurrencies, initial coin offerings, other cryptocurrency sales or any other media category as it relates to blockchain, digital asset or as blockchain company, except as outlined in this policy," it said.

The NFL has made some forays into NFTs, or non-fungible tokens, the digitally watermarked tools that are crypto's less controversial cousin, signing up for a partnership with Ticketmaster for NFTs of Super Bowl tickets and an NFT video highlight program with Dapper Labs, one of the leaders in the space. And of course the Super Bowl is taking place at SoFi Stadium, named for the digitally minded financial firm. But sponsorships from crypto exchanges remain off-limits, and the idea of the NFL creating a cryptocurrency, which some enthusiasts have advocated, is the stuff of fantasy. Even the Super Bowl commercials going for as much as $7 million for 30 seconds — which the league authorizes — include only exchanges such as FTX and not currencies themselves....

The NFL has formed an internal working group to study the regulatory, brand and other consequences of partnering with crypto companies but has set no timetable for when its rules could be revised. Renie Anderson, the NFL's chief revenue officer, said the league is moving slowly by design. "We don't want to put everything and the kitchen sink into this," she said by phone from the site of Super Bowl events in Los Angeles. "We don't know where a lot of this is going, so what we're trying to do is testing and learning so we can understand." She cited regulatory and market forces that are still coming into focus. (The Treasury Department and other federal agencies have been ramping up their efforts to create a regulatory framework for crypto, but there remains a degree of murkiness around what the future limits might be.) The NFL, Anderson said, would rather act after there's clarity. "It's hard to unwind something like a naming rights deal," she said, "and I'd rather not have to undo opportunities two years later because there are rules against advertising or marketing certain things."

National Basketball Association executives, however, say they see a major opportunity right now.
The article also points out that one football star even says he converted his $750,000 salary to Bitcoin. Though one sports analyst calculates that if the purchase was made on November 12th, after federal and state taxes it's now worth about $35,000.

What's the lesson after $3.6 billion in stolen bitcoin was seized by America's Justice Department from the couple who laundering it?

Wired argues it all just shows how hard it is to launder cryptocurrency: In the 24 hours since, the cybersecurity world has ruthlessly mocked their operational security screwups: Lichtenstein allegedly stored many of the private keys controlling those funds in a cloud-storage wallet that made them easy to seize, and Morgan flaunted her "self-made" wealth in a series of cringe-inducing rap videos on YouTube and Forbes columns. But those gaffes have obscured the remarkable number of multi-layered technical measures that prosecutors say the couple did use to try to dead-end the trail for anyone following their money.

Even more remarkable, perhaps, is that federal agents, led by IRS Criminal Investigations, managed to defeat those alleged attempts at financial anonymity on the way to recouping $3.6 billion of stolen cryptocurrency. In doing so, they demonstrated just how advanced cryptocurrency tracing has become — potentially even for coins once believed to be practically untraceable.

Ari Redbord, the head of legal and government affairs for TRM Labs, a cryptocurrency tracing and forensics firm...points to the couple's alleged use of "chain-hopping" — transferring funds from one cryptocurrency to another to make them more difficult to follow — including exchanging bitcoins for "privacy coins" like monero and dash, both designed to foil blockchain analysis. Court documents say the couple also allegedly moved their money through the Alphabay dark web market — the biggest of its kind at the time — in an attempt to stymie detectives....Lichtenstein and Morgan appear to have intended to use Alphabay as a "mixer" or "tumbler," a cryptocurrency service that takes in a user's coins and returns different ones to prevent blockchain tracing....

In July 2017, however — six months after the IRS says Lichtenstein moved a portion of the Bitfinex coins into AlphaBay wallets — the FBI, DEA, and Thai police arrested AlphaBay's administrator and seized its server in a data center in Lithuania. That server seizure isn't mentioned in the IRS's statement of facts. But the data on that server likely would have allowed investigators to reconstruct the movement of funds through AlphaBay's wallets and identify Lichtenstein's withdrawals to pick up their trail again, says Tom Robinson, a cofounder of the cryptocurrency tracing firm Elliptic.
The arrests and "largest financial seizure ever show that cryptocurrency is not a safe haven for criminals..." Deputy Attorney General Lisa O. Monaco said in a press release. "Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes."

Or, as Wired puts it, "Even if your rap videos and sloppy cloud storage accounts don't get you caught, your clever laundering tricks may still not save you from the ever-evolving sophistication of law enforcement's crypto-tracers."