Crypto outlook at the World Economic Forum
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Cryptocurrency firm Genesis Global Capital plans to file for bankruptcy as early as this week, Bloomberg reported today.
The bankruptcy filing has been expected since the fall of cryptocurrency exchange FTX in November.
Meanwhile, the US Department of Justice has announced that Anatoly Legkodymov, the Russian operator of China-based crypto exchange Bitzlato, has been arrested. Bitzlato was a crypto exchange that, according to the DOJ, allegedly worked with dark web black market Hydra Market, which engaged in illicit trades and served as a safe haven for ransomware attackers.
The U.S. Department of Justice issued a vague statement on Wednesday that it would “announce a major international cryptocurrency enforcement action,” noting that the U.S. Treasury Department would also issue a statement of its own.
The announcement comes as former CEO of FTX crypto exchange Sam Bankman-Fried faces charges of wire fraud, securities fraud and conspiracy. The DOJ emphasized that criminals using the crypto space for fraud and other criminal activities should be aware that the agency will use “any tool” to crack down on their activities.
Mr. Bankman-Fried’s company, long thought to be one of the largest crypto exchanges alongside Binance, filed for bankruptcy after allegedly using client funds as investment capital and losing them.
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Crypto companies are reducing Davos visibility after a year of losses and scandals
In recent years, crypto companies have dominated the promenade at the World Economic Forum in Davos, but this year they seem to have scaled back their visibility, CNBC reports.
With the exception of a lone sports car with bright orange crypto advertisements, crypto company advertisements have reportedly been far less prominent this year.
An NFT shop that sold digital tokens alongside images closed this year after asset prices plummeted in 2022.
Cliff Sarkin, head of strategic relationships at Casper Labs, told the outlet that the remaining crypto deals in Davos are “substantial projects” and “the real deals.”
Graig Graziosi19. January 2023 07:00
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The FBI says it will pursue crypto criminals “relentlessly.”
FBI Assistant Assistant Director Brian Turner said law enforcement will “relentlessly pursue” criminals trading in the crypto space following the arrest of crypto exchange Bitzlato founder Anatoly Legkodymov.
“The FBI will continue to pursue actors who attempt to hide their criminal activities behind keyboards and use tools such as cryptocurrency to evade law enforcement,” he said, according to the DOJ. “We will work tirelessly, along with our federal and international partners, to disrupt and dismantle these types of criminal enterprises. Today’s arrest should serve as a reminder that the FBI will impose risks and consequences on those who engage in these activities.”
Mr. Legkodymov, a Russian citizen living in China, was arrested in Miami on Wednesday.
Graig Graziosi19. January 2023 06:00
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Financial leaders at Davos World Economic Forum lash out at crypto, insisting traditional institutions are safe
Several financial leaders speaking at the World Economic Forum in Davos made it clear that they do not trust cryptocurrencies, insisting to attendees that traditional investment and banking institutions are still safe to use.
According to Iris Market IQ, Singapore’s Senior Minister Tharman Shanmugaratnam said crypto assets are “a bit crazy,” which got the audience laughing.
UBS Chairman Colm Kelleher said regulators were faltering in their ability to oversee “non-bank” entities, including cryptocurrencies.
“Regulators, with all due respect, have taken their eyes off the ball on the non-banking sector,” Kelleher said, according to Portal.
European Central Bank Governing Council member Francois Villeroy de Galhau agreed, saying “we should rush for urgent non-bank regulation, starting with cryptos.”
Graig Graziosi19 January 2023 04:59
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DOJ says Bitzlato boss was aware Hydra transactions were illegal, customers were “known to be crooks”.
The Justice Department claimed that Bitzlato’s founder, Anatoly Legkodymov, was aware of the illegal nature of Hydra Market transactions and knew that its users were using false identities in transactions.
“Bitzlato’s customers routinely used the company’s customer service portal to request assistance for transactions with Hydra, which Bitzlato frequently provided, and in chats with Bitzlato employees admitted that they were acting under assumed identities,” the DOJ said. “In addition, Legkodymov and Bitzlato’s other managers were aware that Bitzlato’s accounts were riddled with illegal activity and that many of its users were registered under the identities of others.”
According to internal chat transcripts obtained by the DOJ, Mr. Legkodymov wrote to a colleague that their clients were “known to be crooks.” Bitzlato officials reportedly warned the founder that its users were “addicts who buy drugs [at Hydra]’ and ‘drug dealers’.
Graig Graziosi19. January 2023 04:00
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ICYMI: The crypto market cap hit $1 trillion just before the plunge
Earlier today, crypto market cap hit $1 trillion for the first time since November, just ahead of the 2022 mass sell-off and FTX collapse.
It’s unclear whether the decline was a result of the DOJ’s announcement or traders selling at higher prices, or both.
Despite the decline, Bitcoin remains popular with investors and has gained 30 percent this year.
Graig Graziosi19. January 2023 03:00
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What was the “Hydra Market”?
What was “Hydra Market”, the dark web black market that was one of Bitzlato’s biggest clients?
According to the Justice Department, Hydra Market is “an anonymous, illegal online marketplace for narcotics, stolen financial information, fraudulent identification documents, and money laundering services that has been the largest and longest-standing dark web market in the world.”
“Hydra Market users traded more than $700 million in cryptocurrency with Bitzlato, either directly or through intermediaries, until Hydra Market was shut down by U.S. and German law enforcement agencies in April 2022,” the DOJ wrote. “Bitzlato also received more than $15 million in ransomware proceeds.”
Graig Graziosi19 January 2023 02:00
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ICYMI: Bitcoin price plummets amid major crypto announcement from DOJ
Bitcoin’s price has fallen 5 percent in an hour after the US Department of Justice announced plans to introduce major international cryptocurrency enforcement measures.
The world’s leading crypto fell from $21,500 to around $20,500, reversing an uptrend that has seen its price rise by almost a third year-to-date.
Read more from The Independent’s Anthony Cuthbertson in his story below…
Graig Graziosi19. January 2023 01:00
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“Dr. Doom” economist says in Davos: “90 percent of cryptocurrencies are fraud”.
dr Nouriel Roubini – sometimes dubbed “Dr. Doom” — said Wednesday during the World Economic Forum in Davos that “literally 90 percent of crypto is a scam.”
“FTX and SBF are not the exception — they are the rule,” he said during a Yahoo Finance event.
He went on to predict impending bankruptcy.
“Literally 90% of cryptocurrencies are scams. A criminal activity,” he said. “A total Ponzi scheme going bust.”
Graig Graziosi19 January 2023 00:00
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ICYMI: Shutdown of Crypto Crime Network Deals “Significant Blow” to Scammers, DOJ Announces
The U.S. Department of Justice has announced that it has dealt a “significant blow” to the crypto-crime landscape after arresting a Russian national who allegedly founded a major online criminal platform.
Cryptocurrency exchange Bitzlato processed more than $700 million worth of illicit funds and promoted its services to users who were “known to be crooks,” according to the DOJ.
Alleged founder Anatoly Legkodymov was arrested in Miami on Tuesday. Read more from The Independent’s Anthony Cuthbertson in his story below…
Graig Graziosi18. January 2023 23:00
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Crypto exchange targeted by the DOJ responding with “Oops, sorry” to customers on an automated social media channel
China-based cryptocurrency exchange Bitzlato — whose CEO Anatoly Legkodymov was arrested by the DOJ in Miami on Tuesday — is responding to its customers through an automated message on the Telegraph with the phrase “Oops, sorry,” along with a sad emoji, according to NBC News.
The DOJ claims the company has frequently engaged with Hydra Market, an illegal digital marketplace and haven for ransomware attackers. The agency claimed Mr Legkodymov knew his clients were engaged in criminal activity and were using aliases to disguise their identities.
Graig Graziosi18. January 2023 21:30