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.

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."

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.

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.

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.

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.

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.

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.

"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.

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."

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.

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 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.

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.

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.