Crypto Pirates

The CEO of the world's largest ride-hailing company says cryptocurrencies will most likely be accepted as payment in the future. 

In a new Bloomberg interview, Uber CEO Dara Khosrowshahi tells host Emily Chang that two major factors are preventing him from approving digital assets to cover the cost of fares and food delivery. 

It is entirely possible [that this will occur]. We're constantly conversing. 

I believe that right now, what we see with Bitcoin and some of the other cryptos is that they are quite valuable as a store of value [but] the exchange mechanism is expensive. It's not good for the environment." 

Khosrowshahi also claims that cheaper and greener cryptocurrency transactions may prompt Uber to reconsider using digital assets for payment. 

"As the exchange mechanism becomes less expensive and more environmentally friendly, I believe you will see Uber lean into crypto a little bit more." We're keeping a close eye on it. Is Uber planning to accept cryptocurrency in the future? Without a doubt, at some point." 

Exactly one year ago, Khosrowshahi stated that he had no plans to follow in the footsteps of other companies such as Tesla, which converted some of their cash holdings into Bitcoin (BTC). He did leave open the possibility of accepting cryptocurrency as payment for Uber and Uber Eats. 

From 2005 to 2017, Khosrowshahi was the CEO of travel booking website Expedia. 

Expedia became one of the first businesses to accept Bitcoin in 2014, after partnering with Coinbase to handle payment processing.

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Netflix has ordered a documentary series about a couple accused of laundering billions of dollars from the Bitfinex hack in 2016. Heather Morgan, an aspiring rapper, and her husband, Ilya "Dutch" Lichtenstein, were arrested this week in New York. In addition, the DOJ seized 94,636 bitcoins stolen in the Bitfinex hack.

Coming Soon to Netflix: A Documentary Series About the Bitfinex Hack and the Couple Involved 

The Bitfinex documentary series will be directed and executive produced by Chris Smith, who is best known for his work on "FYRE: The Greatest Party That Never Happened" and "Tiger King."

Furthermore, Nick Bilton, best known for his work on "Fake Famous," "The Inventor: Out for Blood in Silicon Valley," and "American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road," is set to executive produce the Bitfinex documentary series.

The documentary will tell the story of a couple who allegedly laundered more than $4 billion in bitcoin from the 2016 hack of cryptocurrency exchange Bitfinex.

According to Netflix,

Ilya 'Dutch' Lichtenstein and Heather Morgan were arrested on Tuesday, February 8, in their New York City apartment, and now face charges of conspiring to launder nearly 120,000 Bitcoin related to a 2016 hack of a virtual currency exchange.

While Lichtenstein, who has dual U.S. and Russian citizenship, co-founded Mixrank, a Y-Combinator-backed startup, Morgan is an aspiring rapper who goes by the stage name Razzlekahn.

The 31-year-old rapper and former Forbes contributor referred to herself as a "irreverent comedic rapper" and a "crocodile of Wall Street." Following her arrest, videos of her rapping went viral on social media.

The US Department of Justice (DOJ) announced Tuesday that Lichtenstein, 34, and his wife, Morgan, 31, were arrested for "alleged conspiracy to launder $4.5 billion in stolen cryptocurrency" from the Bitfinex hack in 2016. According to court documents, they "allegedly conspired to launder the proceeds of 119,754 bitcoin" stolen from the cryptocurrency exchange.

The DOJ also seized 94,636 BTC from them, which the department described at the time as the "largest cryptocurrency seizure to date, valued at more than $3.6 billion." At the time of press, the seized Bitcoin was worth more than $4 billion.

The court documents go on to describe the couple's "numerous sophisticated laundering techniques," which included using fictitious identities to open online accounts, using computer programmes to automate transactions, depositing stolen funds into accounts at various cryptocurrency exchanges and darknet markets, and leveraging "anonymity-enhanced virtual currency (AEC), in a practise known as 'chain hopping.'

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The BBC was set to air a programme about a "self-made crypto millionaire" on We Are England's "Bossing It" series, which featured entrepreneurs from across the country, on Wednesday night. However, the 30-minute feature, as well as an accompanying article on the BBC homepage that introduces the program's subject, were yanked hours before the 7:30 p.m. air time: Hanad Hassan, a 20-year-old from Birmingham, claimed he turned a $50 (£37) investment into $8 million (£5.9 million) in just nine months, a return of nearly 16,000,000 percent.

It's a startling statistic — and one that should prompt further investigation. However, the BBC overlooked some crucial and suspicious details. When The Guardian's media correspondent, Jim Watterson, expressed concerns about the programme, it was replaced with a different segment. The BBC also removed its glowing coverage of the subject.

WHAT IS THE PROBLEM WITH THIS CRYPTO SCAMMER? — Hassan, the program's subject, had created a cryptocurrency called OrfanoX. According to the article, he "wants to use his wealth to help people" and donated $270,000 of his profits to charitable organisations. The article, however, failed to mention that the coin was abruptly discontinued in October, causing confusion and outrage among investors who were left with nothing. Hassan claims it wasn't a rug pull, but if it looks, swims, and quacks like a duck...

The BBC article, titled "Birmingham's self-made crypto-millionaire giving back," shows Hassan's expensive apartment and describes how Hassan "decided he was going to become a millionaire while he was still a teenager." According to The Guardian, the corresponding documentary planned to show clips of Hassan distributing money to food banks.

OrfanoX claimed to give a 3 percent cut of every transaction to charity in order to "make the world a better place" and "bridge the gap between charity and the blockchain." However, the coin's philanthropic ethos did not appear to deter the founder from stealing everyone's money.

There is no shortage of crypto scams, but what makes this one stand out is that it almost got a puff piece on TV. Crypto bros with the right connections and a lot of confidence can prey on even the most established media. But, with ongoing fraud, environmental concerns, compromised decentralisation, and flashy swindlers plaguing the crypto space, now is not the time for sloppy reporting.

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According to reports on Thursday, investment management firm BlackRock, Inc. (BLK) may offer clients cryptocurrency trading services.

In the afternoon, BLK stock was down 1%.

Asset management and other financial services are provided by the New York-based company. It manages assets worth more than $10 trillion for customers.

According to reports, the company intends to enter the cryptocurrency market with a client support trading platform. Its customers would be able to borrow by putting up crypto assets as collateral.

Customers such as public pension funds and sovereign wealth funds will be able to trade in cryptocurrency through Aladdin, the company's integrated investment management platform.

Asset, Liability, Debt, and Derivative Investment Network (Aladdin) is an abbreviation for Asset, Liability, Debt, and Derivative Investment Network. Other aspects of the plan, however, remained unknown at the time.

ETF strategy by BlackRock

The company may have started looking for a leader for its Aladdin blockchain strategy in June of last year, when it began looking for a crypto plan. BlackRock is also rumoured to be planning the launch of a tech ETF that will track indexes associated with crypto-related technologies.

Bloomberg previously reported that BlackRock filed with the SEC in January to offer an ETF that would invest in companies involved in cryptocurrency technology.

In the fourth quarter of fiscal 2021, the company's revenue increased by around 14 percent year on year to $5.10 billion, while nett income was $1.64 billion, or $10.63 per diluted share. In fiscal 2021, the company earned US$19.37 billion.

Over the last year, the BLK stock has increased by 12.42 percent.

Bottomline

Several banks and financial institutions in the United States have recently expressed interest in the crypto industry. According to reports, investment banks such as Goldman Sachs, Morgan Stanley, and others are constructing crypto infrastructure.

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On Monday, Spanish authorities announced the arrest of seven people suspected of being members of a criminal network that trafficked cocaine and then used cryptocurrency to launder the proceeds.

More than 20 vehicles, two motorcycles, 200,000 euros (US$228,000) in cash, 20 kilos of cocaine, and links to cryptocurrency accounts were seized as part of Operation Grande-Tragadera. Several companies in Seville and Cadiz were also searched for possible links to the criminal network.

At the start of the year, the National Police were made aware of a sophisticated large-scale drug trafficking network.

The criminal organisation is thought to be linked to a network of businesses in Seville, including a car repair shop, that were used to launder money earned from drug sales and invest some of the profit in cryptocurrency.

Investigators discovered elaborate hidden compartments in vehicles using hydraulic openers to conceal weapons and drugs in a video released by the National Police.

The use of cryptocurrencies in criminal activities has recently grown in popularity.

In a separate incident, Spanish National Police investigators raided what was discovered to be an illegal cryptocurrency mining farm in the province of Seville less than two weeks prior. According to a statement released on January 28, investigators thought the location was a possible marijuana grow-up but instead discovered a series of Bitcoin mining servers.

The National Police Department also released a video depicting the size of the cryptocurrency farm. The discovery is Seville's first known illegal cryptocurrency mining farm. The Bitcoin mined from the illegal farm is worth 31,500 euros ($35,954), while the mining equipment is worth 13,000 euros ($14,838).

National Police investigators have not publicly announced any direct links between the two raids. Both investigations are still going on.

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Wells Fargo believes that crypto has risen from virtually nothing, and that adoption is nearing a tipping point. The banking behemoth claims that Bitcoin is in the same stage as the internet was in the mid-to-late 1990s.

Wells Fargo believes that it is not too late to purchase Bitcoin

Wells Fargo, a multinational financial services conglomerate, has a bullish outlook on cryptocurrency. The banking giant's global investment strategy team believes that Bitcoin's annualised gains of more than 200 percent do not indicate that it is "too late" to invest in the cryptocurrency.

Wells Fargo sees parallels between the early days of the internet and the rise of cryptocurrencies today.

According to the report:

We understand the 'too late to invest' argument, but we disagree. [Bitcoin] may soon exit the early adoption phase and reach a point of hyper-adoption.

According to Wells Fargo, Bitcoin is a digital invention with current infrastructure that has the potential for rapid adoption. Through "private placement," institutional investors have joined the race to acquire Bitcoin and gain exposure to the cryptocurrency.

According to the bank's analysts, the steep Bitcoin adoption curve is fuelled by regulatory clarity and institutional adoption. The banking behemoth claims that buying Bitcoin directly from an exchange requires complex technology.

According to the report:

We anticipate that cryptocurrencies, like recent digital inventions, will eventually follow an accelerated adoption path.

Bitcoin adoption has been steadily increasing over the last month. According to analysts, recent events and rising institutional capital inflows are fueling a bullish narrative for the Bitcoin price.

@CryptoSultan21, a crypto analyst and trader, believes Bitcoin has set its sights on the $47,000 mark.

According to FXStreet analysts, Bitcoin's price target is $50,000.

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The Central Bank of Ireland has stated that retail investment funds will most likely not be allowed to gain direct or indirect exposure to cryptocurrencies. The bank's stance is motivated by the risks in the cryptocurrency market.

The bank, on the other hand, believes that cryptocurrency is best suited for wholesale or professional investors who can properly assess the risk of the crypto market.

Ireland has long been welcoming to the crypto industry, and it is one of the countries where Binance, the world's largest crypto exchange, intends to establish a headquarters.

According to Ireland's Central Bank, cryptocurrency exposure is not yet appropriate for retail investors.

The Central Bank of Ireland's second annual Securities Markets Risk Outlook Report included a statement on the retail status of cryptocurrency.

The bank stated in the report that it has received numerous inquiries regarding whether Undertakings for Collective Investment in Transferable Securities (UCITS) or authorised investment funds (AIFs) – investment vehicles marketed to retail investors – can gain exposure to crypto-assets.

According to the bank, at this time, the risks inherent in the cryptocurrency market would preclude such funds from gaining direct or indirect exposure to cryptocurrency.

"At the moment, while such assets may be suitable for wholesale or professional investors," the report stated, "the Central Bank is highly unlikely to approve a UCITS or a Retail Investor AIF proposing any exposure (direct or indirect) to crypto-assets."

The reasons for the stance include "specific risks associated with crypto-assets" and "the possibility that appropriate risk assessment" may be difficult for non-professional investors to undertake.

Ireland is still willing to help the crypto industry by providing clarity.

Ireland has been one of the countries with the most open policies towards cryptocurrency. The bank stated in the report that the industry's main limitation remains that cryptocurrencies are largely unregulated. It does, however, acknowledge that crypto-assets are one of the country's fastest-growing innovations in the securities market.

Notably, Ireland is being considered as a location for one of several headquarters by Binance, the world's largest cryptocurrency exchange by trading volume. Binance has already registered four corporate entities in the country, according to a report by the Irish Independent, a local news outlet.

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The couple responsible for Bitfinex's 2016 hack have been apprehended.

Hacks on cryptocurrency exchanges are almost as old as the exchanges themselves. As long as there are gaps in an exchange's defences to exploit, bad actors will profit from those flaws. Some hacks result in massive losses, while others result in minor losses. The Bitfinex hack of 2016 was far from minor; hackers stole $60 million in assets. That stolen bag is now worth billions of dollars, six years after the hacking occurred. And many cryptocurrency investors thought the hackers got away with it. A pair of arrests made today, on the other hand, indicate otherwise.

Bitfinex, founded in Hong Kong in 2012, is one of the older cryptocurrency exchanges. It was created by iFinex Inc., the same company that created the Tether stablecoin (USDT). Today, the exchange is known as one of the largest platforms for trading digital assets; Bitfinex is the world's eighth-largest exchange by trading volume, with approximately $1 billion in assets traded each day.

In 2016, the exchange was robbed by two hackers who stole $60 million in Bitcoin (BTC). Six years later, the bag's worth has risen to $4.5 billion. Authorities have been on a wild goose chase since then, attempting to locate the stolen assets. Fortunately for them, the chase appears to be winding down.

Hackers Caught Laundering Bitcoin on Bitfinex

Bitfinex has the last laugh today. The United States Department of Justice has made two arrests in connection with the platform hack, and the hackers face a slew of charges.

Today, two New York City residents, Ilya Lichtenstein and Heather Morgan, were arrested in connection with the 2016 hack. The couple is scheduled to appear in court for the first time this afternoon, the first of many court appearances.

Last week, the situation in the case began to heat up significantly. Authorities admitted to closely monitoring the assets' movements. They were able to seize $3.5 billion in Bitcoin through this tracking, which was spread across 23 different transactions.

The couple is now at the mercy of the justice system, and they must prove their innocence in the face of a long list of complaints from the Justice Department. The body primarily accuses the couple of attempting to launder stolen funds and defraud the US. It accuses Lichtenstein and Morgan, in particular, of opening accounts with false identities and automating transactions. It also accuses the pair of chain-hopping and transferring the stolen funds to multiple accounts and exchanges.

The announcement represents a significant victory for American law enforcement. It demonstrates that they are legitimately capable of tracking stolen funds, even in the face of anti-money-laundering measures. The arrest has far-reaching implications for incoming crypto trading and reporting regulations.

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Wells Fargo, headquartered in the United States, has three recommendations for new cryptoasset investors, with a recent report released by the bank's Investment Institute answering the question that many people have: is it too early or too late to jump on the crypto train? The authors of the report advise new crypto investors to be patient, prudent, and cautious.

Please be patient

According to the analysis, there is no need to rush into crypto investments because the majority of the opportunity is already in front of investors.

In its assessment of the "too late to invest" argument, the study cites bitcoin's price compounding at a 216 percent annual rate since the cryptocurrency's first recorded transaction in 2010. In comparison, the total return of the S&P 500 index has compounded at a rate of 16 percent per year over the same time period.

"We understand but do not subscribe to the 'too late to invest' argument," the institute said. "We believe that focusing too much on past performance, particularly in the case of cryptocurrencies, can be deceptive to new investors. Performance figures are skewed because most cryptocurrencies started from almost nothing."

Be cautious

The authors believe that cryptoassets are in a "early, but not too early" investment stage, which is why they emphasise the importance of investor education, as investment options lag and continue to mature.

The authors then compared three major ways to gain exposure to cryptocurrency:

* acquiring cryptocurrency from an exchange,

* mutual funds, exchange-traded funds (ETFs) backed by crypto, and grantor trusts.

* personal placements.

The analysts concluded that they are looking forwards to regulators' approval of option 2, but, predictably, until that day arrives, the financial services provider itself recommends option 3: "For the time being, we recommend professionally managed private placements because the investment landscape is still maturing."

Take precautions

According to the bank's analysts, crypto users are rapidly growing globally from a low base, and cryptoassets appear to be approaching a hyper-adoption phase similar to that experienced by online businesses in the mid-to-late 1990s.

The authors believe bitcoin is on a similar path to the dot-com bull market and subsequent bubble burst of the 1990s.

"Crypto adoption rates appear to be following in the footsteps of other previously advanced technologies, such as the internet." According to Wells Fargo Investment Institute, if this trend continues, cryptocurrency "could soon exit the early adoption phase and enter an inflection point of hyper-adoption."

For the reasons stated previously, the authors warn crypto investors to be cautious and remember the lessons of the 1990s, as "picking long-term technology winners is no walk in the park."

"As many a dot-com company and investor can attest from 20 years ago, early-stage investing is often fraught with violent boom and bust cycles." Today, there are over 16,000 cryptocurrencies, and if history is any guide, many will fail (or at least fail to scale)," the analysis concludes.

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The introduction of the e-CNY is the latest chapter in China's tumultuous relationship with cryptocurrency.

As athletes from all over the world descend on Beijing for the Winter Olympics, China used the occasion to launch the digital Yuan.

The introduction of the e-CNY is the latest chapter in China's tumultuous relationship with cryptocurrency.

In June 2021, Chinese officials renewed their crackdown on the cryptocurrency industry, ordering crypto miners to cease operations in China's Sichuan province, which was once one of the country's largest mining centres.

Advantages of 'First Mover'

China's central bank released pilot versions of its digital yuan wallet application in early January, as the country ramps up efforts to develop its official digital currency.

Senator Pat Toomey of Pennsylvania expressed concern about the digital yuan.

Toomey stated in a letter to Treasury Secretary Janet Yellen and Secretary of State Antony Blinken that "analysts have raised the e-potential CNY's to undermine US sanctions, facilitate illicit money flows, enhance China's surveillance capabilities, and provide Beijing with 'first mover' advantages, such as setting standards in cross-border digital payments."

"China's crackdown provides an opportunity for the United States to be a forerunner in crypto innovation, grounded in individual freedom and other American and democratic principles," Toomey added.

In terms of what's going on in the real world, Wall Street Journal reporter Liza Lin tweeted, "I haven't seen anyone use the digital currency yet."

Although China has cracked down on the crypto industry, "prohibiting the mining and use of bitcoin as a form of payment," Tammy Da Costa, analyst at DailyFX, stated that "digital Yuan allows regulators and the government to trace all payments made without the need for banks or other financial intermediaries."

A Danger to Global Regulators

"With global central banks now following suit," Da Costa said, "bitcoin continues to pose a threat to global regulators eager to improve the transparency of blockchain transactions." However, with stricter regulations now in place, the original cryptocurrency may be able to coexist with digital currencies."

"The Yuan is already one of the world's largest and most dominant currencies," said Keegan Francis, Finder's bitcoin and crypto specialist. "Creating a digital version will allow for greater accessibility, scalability, and efficiency when compared to government currencies that do not have a digital version."

While most currencies are already digital, Francis claims that they are not part of a central bank digital currency, or CBCD system.

"A CBDC is a single ledger controlled and operated by the respective country's central bank," he explained. "The CBDC that China is constructing is distinguished by the fact that all instances of digital Yuan are subject to centralised control."

This means that "individual accounts can easily be frozen, payments to specific destinations can be censored, and every transaction may be tracked to enhance the profile of Chinese citizens within the already established social credit system," according to Francis.

"Some of these new features contradict the development that has occurred within the world of cryptocurrency," he said. "Bitcoin transactions, on the other hand, cannot be stopped, addresses cannot be frozen, and all transactions are permanent."

Follow in the Footsteps of China

According to Francis, the implementation of a CBDC becomes an attack vector for cryptocurrencies because "the central bank can now stop transactions wherein citizens wish to acquire cryptocurrency."

"Having said that, the implementation of more authoritarian-style CBDCs creates an opposing demand for money that is more representative of freedom," he continued. "The adoption and mandatory use of CBDCs may have the opposite effect on cryptocurrencies." Instead of limiting their growth, it may draw attention to the importance of cryptocurrencies such as bitcoin."

Valentina Drofa, founder and CEO of Drofa Comms, stated that "it is obvious that the ban imposed on bitcoin by Chinese authorities aided the successful trials for the Digital Yuan project."

"While many countries are developing their own CBDCs, with a few having launched theirs, China remains the largest economy that has made significant progress, and the Olympic Games debut justifies the country's ban on bitcoin and all things crypto in the past year," she said. "By implication, other regulators may want to follow in China's footsteps, as cryptocurrencies' popularity will always pose a threat to established sovereign monetary systems."

While China serves as an example for many other countries, Drofa believes that "those who choose to regulate crypto in order to coexist with fiat and CBDC have a tendency to have a more robust and competitive financial landscape."

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