Bitcoin and cryptocurrencies

Sam Bankman-Fried knowingly used FTX clients' funds without permission to invest through his personal hedge fund, the disgraced crypto titan's former business partner testifies in court.

Zixiao "Gary" Wang, a co-founder of FTX with Bankman-Fried, has already pleaded guilty to multiple counts related to the crypto trading platform's stunning collapse, and has agreed to cooperate with federal prosecutors.

He is the first major witness to appear at his former partner's trial, which began on Tuesday in New York and could last up to six weeks. — AFP

One of the co-founders of collapsed cryptocurrency hedge fund Three Arrows Capital has been apprehended in Singapore and jailed for four months, according to the company's liquidator.

The Singapore-based company filed for bankruptcy last year when its fortunes suffered a sharp decline after a massive sell-off of assets it had bet on as prices nosedived in crypto markets.

Su Zhu was detained at Singapore's Changi airport while trying to leave the city-state, Three Arrows' liquidator Teneo said in a statement late Friday. — AFP

Cryptocurrency firm Binance says on Wednesday it was selling its Russia business, months after reports suggested US authorities were investigating possible sanctions violations.

Bloomberg reported in May that the US Department of Justice was looking into claims Russians had used Binance to skirt US sanctions imposed over Moscow's invasion of Ukraine.

The firm, which has faced severe regulatory hurdles across the world, has previously denied breaking sanctions but in a statement on Wednesday said it was making a "full exit" from the Russian market. — AFP

A disgraced Turkish crypto founder who fled to Albania and his two brothers have been sentenced to 11,196 years in jail each, the Anadolu state news agency reports Friday.

Prosecutors had asked for Thodex boss Faruk Fatih Ozer, 29, to be sentenced to 40,562 years in prison for money laundering, fraud and establishing a criminal organisation.

"If I were to establish a criminal organisation, I would not have acted so amateurishly," Anadolu quoted Ozer as telling the court. — AFP

Several top executives have quit cryptocurrency firm Binance, as the company faces a widening net of legal probes across the world.

The firm is one of the biggest left in the crypto industry, which has seen a string of scandals, hacks and thefts and suffered plummeting values across the board.

Two US financial regulators are suing Binance and reports say the Justice Department is also probing the firm and its boss, Changpeng Zhao, over money laundering and sanctions busting. —AFP

Hong Kong opens its arms to the virtual asset world on Thursday, launching new retail-friendly rules for the city's crypto exchanges.

The Chinese finance hub is pivoting to embrace crypto despite high-profile failures in recent months, including the meltdown of trading platform FTX, which wiped out more than $1.5 trillion in the market.

China has had a strict crypto ban since 2021, but in Hong Kong -- which operates on a separate legal framework -- trading has been allowed though unregulated, meaning individual investors use unlicensed platforms. — AFP 

Retail investors in Hong Kong may soon be able to buy popular cryptocurrencies like bitcoin at government-licensed exchanges, thanks to new rules meant to bolster the city's standing as a digital asset hub.

Global crypto markets have yet to recover from a string of high-profile failures in recent months, including the spectacular downfall of trading platform FTX and crypto-friendly US banks Signature and Silvergate.

But the so-called "crypto winter" has not deterred Hong Kong authorities from embracing the sector, a pivot that began last October and culminated with new laws for crypto exchanges starting June 1.

Officials are also hoping the shift will be a boon for the city's economy, which continues to struggle in the wake of the pandemic, social unrest and the impact on business confidence from a Beijing-imposed national security law.

Crucially, observers say it will cement Hong Kong as a key route for mainland Chinese investors looking to trade crypto, which is outlawed in the country.  — AFP

Cryptocurrency investments in Britain should be regulated like the gambling industry, UK lawmakers say

The plea, from parliament's powerful cross-party Treasury Committee, came one day after EU ministers agreed on tougher tax rules for crypto transactions.

Global authorities are increasingly anxious of the lack of oversight of the sector, whose most popular units are bitcoin and ether. — AFP

Cryptocurrency investments in Britain should be regulated like the gambling industry, UK lawmakers said Wednesday.

The plea, from parliament's powerful cross-party Treasury Committee, came one day after EU ministers agreed on tougher tax rules for crypto transactions.

Global authorities are increasingly anxious of the lack of oversight of the sector, whose most popular units are bitcoin and ether.

"Unbacked cryptoassets have no intrinsic value, and their price volatility exposes consumers to the potential for substantial gains or losses, while serving no useful social purpose," the Treasury Committee said in a report.

"These characteristics more closely resemble gambling than a financial service, an impression reinforced by the evidence we have received of consumer behavior."

It continued: "We therefore strongly recommend that the government regulates retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service." — AFP

A meme-inspired cryptocurrency's price jumps on Tuesday after Elon Musk changed the bluebird logo of Twitter to a dog associated with the digital token, despite the mogul being sued over his previous promotion of the coin.

Musk bought Twitter in October last year for $44 billion and has since slashed the workforce, introduced paid-for accounts and reinstated banned users including former president Donald Trump.

His decision to change the logo to a Shibu Inu dog, whether permanent or another short-lived joke, caused the price of dogecoin to surge by more than 20%, from below $0.08 to more than $0.10. — AFP

Three Canadian cryptocurrency companies announce they are teaming up to create the largest and only fully regulated platform in the country, at a time when authorities are trying to compensate for a lack of legislation to regulate the industry. 

The announcement came months after the fall of industry giant FTX, whose founder Sam Bankman-Fried faces charges including bribery and fraud in a scandal that rocked the cryptocurrency world. 

When combined, the WonderFi, Coinsquare and CoinSmart companies will have over Can$600 million (410 million euros) in assets on deposit, according to a joint press release.  — AFP

South Korea will seek the extradition of fugitive crypto entrepreneur Do Kwon, prosecutors told AFP Friday, after the Terraform founder was arrested in Montenegro and hit with US fraud charges.

Kwon, whose full name is Kwon Do-hyung, has been accused of fraud over his company Terraform Lab's dramatic collapse last year, which wiped out about $40 billion of investors' money and shook global crypto markets.

The 31-year-old was arrested at the Podgorica airport in Montenegro on a South Korean warrant, the country's interior ministry said Thursday.

Shortly after, the United States charged him with eight counts, including securities fraud and wire fraud, which followed a lawsuit by the US Securities and Exchange Commission.

In South Korea, where Kwon is wanted for violations of the country's capital markets act, authorities confirmed Friday that they would seek his extradition.

"South Korean prosecutors will take steps to repatriate Kwon Do-hyung. We are working on the process," Kim Hee-kyung, a spokeswoman for the Seoul Southern District Prosecutors' Office, told AFP. -- AFP

Fugitive South Korean cryptocurrency entrepreneur Do Kwon, accused of orchestrating a multi-billion-dollar fraud that shook global crypto markets last year, has been arrested in Montenegro and faces fresh criminal charges in the United States.

Kwon was arrested along with another South Korean national, Montenegro's interior ministry said Thursday, which added that the tycoon was apprehended on a South Korean warrant.

"Kwon Do-hyung and Han Chang-joon were arrested and brought to the state prosecutor's office in Podgorica for the criminal act of document forgery," an interior ministry statement said.

During passport control for a flight to Dubai the two "used falsified travel documents from Costa Rica, which was established also by Interpol checks", it said.

Inspection of their luggage also found travel documents from Belgium and South Korea, while Interpol checks discovered that Belgian documents were forged, the ministry added. — AFP

Crypto banking colossus Silvergate says it will shut down in the face of market turmoil and regulatory pressure.

Silvergate Bank opened in 1988 and started "pursuing digital currency customers" in 2013, according to its parent company Silvergate Capital Corporation.

"In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward," the parent company says in a release. — AFP

The owner of China-based cryptocurrency exchange Bitzlato was arrested in Miami on Wednesday, along with five associates in Europe, during an international operation against "darknet" markets.

Anatoly Legkodymov, 40, a Russian living in Shenzhen, China, appeared in handcuffs and leg shackles in a Miami courtroom on money laundering charges, and was denied bail by a judge who deemed him a flight risk.

He was detained for his role in allegedly transmitting a total of $700 million in illicit funds, the US Department of Justice charged, with officials saying that criminals used the exchange as a haven for narcotics trading and selling stolen financial information.

Five other men, mainly of Russian and Ukrainian nationalities, were arrested in Spain, Portugal and Cyprus, as part of a complex police swoop led by French authorities, officials in Paris said. -- AFP

Even by the extreme standards of cryptocurrency trading, the past few weeks have been a wild ride for Binance, the world's biggest exchange for crypto assets.

After the collapse of its rival FTX in a hail of allegations of fraud and criminality last month, trust in the entire sector has crumbled.

Customers pulled more than $3 billion from Binance in a single day last week as part of a three-day frenzy that saw more than $6 billion withdrawn.

On Friday, accountancy firm Mazars, engaged by Binance to provide a "proof of reserves" report, abruptly halted work with all crypto firms because of "public misunderstanding" of what they were providing.

A "proof of reserves" report is not a full audit and gives no information about liabilities. -- AFP

Disgraced cryptocurrency tycoon Sam Bankman-Fried was hit with multiple criminal charges Tuesday, accused of committing one of the biggest financial frauds in US history.

The 30-year-old founder of the FTX platform, who was arrested in the Bahamas Monday at the request of the United States, is facing a raft of accusations, including from US market regulators who say that the investor knowingly built a fraudulent house of cards.

A Bahamian judge denied Bankman-Fried bail and remanded him into custody as the one-time high-flyer began to battle his extradition in a Nassau court room, with his parents looking on. — AFP

Former FTX Chief Executive Sam Bankman-Fried apologizes for a "lot of mistakes" in the abrupt collapse of the cryptocurrency firm and says he did not knowingly behave fraudulently.

"I didn't ever try to commit fraud on anyone," Bankman-Fried tells the Dealbook conference hosted by CNBC and The New York Times.

"I'm deeply sorry about what happened," Bankman-Fried says. "Clearly I made a lot of mistakes or things I would be able to give anything to be able to do over again." — AFP

The world's largest cryptocurrency platform Binance announces its first licence in East Asia with the acquisition of Japan's officially regulated Sakura Exchange BitCoin.

Binance has been in the spotlight since the dramatic collapse of rival platform FTX this month.

Changpeng Zhao, the Chinese-Canadian head of Binance, pledges last week to release an audit into his firm while rejecting claims he sparked the demise of FTX.

 The Securities and Exchange Commission is warning the public against investing in virtual currency "Lodi Coins”, which is not licensed as an investment house.

SEC flagged Lodi Coins by Lodi Technologies Inc. for offering investment schemes without securing documentation and permits. "Lodi Soins is not registered as a virtual asset provider with the Bangko Sentral ng Pilipinas (BSP). Lodi Technologies also did not have the corresponding certificate of authority from the central bank as a money service business (MSB), as required under the BSP guidelines for virtual asset providers," SEC said.

SEC also stressed that the company is not registered as MSB with the Anti-Money Laundering Council. According to SEC, Lodi Technologies offered Lodi Coins to the public through Facebook, Twitter, Instagram and Discord. The investment packages ranged from P12,500.00 to P500,000.00 with the potential to earn at least ten times or 1,000 % of the total invested after Lodi Coin's initial offering.

A Baguio resident who claimed to have invested in Lodi Coins claimed that the only reply they got when they asked them regarding the SEC advisory is a simple statement with only two paragraphs and without any deeper explanation.  — The STAR/Artemio Dumlao

Interpol has issued a red notice for a South Korean cryptocurrency founder who is accused of fraud over the company's $40 billion collapse, prosecutors said Monday.

Earlier this month, a South Korean court issued an arrest warrant for Do Kwon, 31, who flew from South Korea to Singapore ahead of the crash in May.

But questions about his whereabouts intensified after the Singapore Police Force said that he was not in the country.

South Korean prosecutors had requested Interpol place him on the red notice list and asked the foreign ministry in Seoul to revoke his passport, saying that Kwon was "on the run".

"Interpol has issued a red notice for Kwon," an official from the Seoul Southern District Prosecutors' Office told AFP without giving further detail.

On Twitter, Kwon denied that he was on the run but did not reveal his whereabouts. -- AFP

The world's second biggest cryptocurrency after bitcoin, ethereum, will soon overhaul its blockchain technology to curb the network's much-criticized environmental impact.

Ethereum, whose digital unit ether tumbled in a crypto crash earlier this year, will in September undergo a major technical revolution. — AFP

The closest most people get to owning a world-famous artwork is to buy a cheap poster from a gallery, but art dealers are determined to harness technology to draw in new collectors.

Anaida Schneider, a former banker based in Switzerland, is among those promoting new ownership schemes -- for a small fee, investors can buy a digital chunk of a painting and share in the profits when she sells.

"Not everyone has $1 million to invest," she told AFP. "So I came up with the idea to split, to make like a mutual fund but on the blockchain."

Each buyer gets an NFT, the unique digital tokens created and stored on the blockchain, the computer code that underpins cryptocurrencies. -- AFP

Starting with the lofty goal of competing with traditional banks, cryptocurrency lending giants and their clients now face financial ruin due to their appetite for risk and a paucity of regulatory guardrails.

Celsius Network, which suspended withdrawals in mid-June, had advertised a seemingly difficult-to-reconcile mix of interest rates, charging just 0.1 percent for loans, but paying more than 18 percent on deposits.  

Weeks later, savings accounts, that amounted to $11.8 billion in mid-May, remained frozen. — AFP

Bitcoin tumbled Monday to an 18-month low under $25,000 as investors shunned risky assets in the face of a global markets selloff.

The world's most popular cryptocurrency dived about 10 percent to hit $24,692 in morning London deals, striking a level last seen in December 2020.

World stock markets have plunged since Friday when data showed US inflation at a fresh four-decade high, increasing recession fears. -- AFP

US regulators on Thursday said they are suing the Gemini Trust cryptocurrency exchange, which is run by Cameron and Tyler Winklevoss, for giving misleading answers in 2017 about a bitcoin project.

The Commodity Futures Trading Commission lawsuit filed in federal court in New York accuses Gemini of not being upfront about how easy it would be to manipulate a bitcoin futures project proposed at the time, the agency said in a statement.

The futures contract launched at the end of 2017 and stopped trading two years later, according to blog posts from Gemini and a partner company. — AFP

In the Central African Republic (CAR), nine out of 10 people do not have internet, and only one in seven has electricity — that is, when there are no power cuts.

Yet the CAR has just followed El Salvador in adopting bitcoin as legal tender, a currency that requires access to the net to be bought, sold or used.

Foreign experts and CAR citizens themselves are struggling to understand why the world's second least developed economy has announced this leap into monetary hyperspace.

Among people queueing at one of the rare automatic teller machines (ATMs) in the capital Bangui, the word "bitcoin" stirred befuddlement.

"What is it?" asked Sylvain, a man in his 30s, waiting for his turn at the cash machine, which was operating thanks to a generator.

"I don't know what cryptocurrencies are — I don't even have internet," said Joelle, a vegetable hawker nearby. — AFP

North Korean-tied hackers were responsible for a $620-million cryptocurrency heist last month targeting players of the popular Axie Infinity game, US authorities said Thursday.

The hack was one of the biggest to hit the crypto world, raising huge questions about security in an industry that only recently burst into the mainstream thanks to celebrity promotions and promises of untold wealth.

Last month's theft from the makers of Axie Infinity, a game where players can earn crypto through game play or trading their avatars, came just weeks after thieves made off with around $320 million in a similar attack.

"Through our investigations we were able to confirm Lazarus Group and APT38, cyber actors associated with (North Korea), are responsible for the theft," the FBI said in a statement. — AFP

An NFT of the first tweet ever posted on Twitter was struggling to attract bidders on Thursday, with the highest offer so far just shy of $10,000 — a year after it was bought for $2.9 million.

In what could signal waning interest in non-fungible tokens (NFTs) hawked by athletes, artists, celebrities and tech stars, the famed inaugural Twitter post authored by co-founder Jack Dorsey seemed headed for an epic fail.

It has spent more than a week on the auction block at NFT marketplace OpenSea. The top offer was in the cryptocurrency Ether, its current value translating to just under $10,000, according to the website.

The historic first tweet from the account of @Jack reads "just setting up my twttr." — AFP

Four years ago, fried-chicken chain KFC tweeted from its Canadian account that it would accept bitcoin as payment for its "buckets".

The company told AFP its tongue-in-cheek campaign — "digital tender for chicken tenders" — sold out in an hour and the chain has not taken crypto payments since, but online articles regularly recycle the claim that KFC "accepts" bitcoin.

Many other companies have tried to harness crypto payments before abandoning their efforts, Tesla and Dell among them.

Bitcoin will almost certainly never be practical for everyday purchases because its value fluctuates wildly, and each transaction is expensive, energy-hungry and takes at least half an hour.

"No one's going to walk into a KFC to buy a chicken burger and then have to wait 30 minutes for a payment," South African developer and crypto expert Andre Cronje told AFP.

But there are now thousands of smaller cryptocurrencies with faster processing times and more stable prices.

Analysts say the total market value of cryptocurrencies has now topped $2 trillion, roughly half of which is bitcoin.

Companies are gagging to get in on the act and developers like Cronje are building the infrastructure to enable the virtual coins to be used to pay for everyday items.

But public buy-in is crucial, and corporations seem to be struggling to find the perfect formula. — AFP

Facebook's parent company Meta is exploring the potential of digital money referred to internally as "Zuck Bucks" in a play on the founder's name, the Financial Times reported on Wednesday.

Meta abandoned its effort to create a global cryptocurrency — first called Libra but eventually re-branded as Diem — in the face of fierce backlash by financial regulators around the world.

However, founder and chief Mark Zuckerberg has spoken about the importance of e-commerce and financial tools to his vision for an immersive online world called the metaverse.

Products being considered at Meta include digital tokens similar to those use for transactions in video games, with the internet company's version nicknamed "Zuck Bucks" by those working on it, according to the Financial Times. — AFP

Investigators are on the trail of hackers who spirited away more than $600 million in cryptocurrency last week, watching the money as it moves around a system that critics call the Wild West of finance.

This week's theft from the makers of Axie Infinity, a game where players can earn crypto through game play or trading their avatars, came just weeks after thieves made off with around $320 million in a similar attack.

"We are seeing more hacks because there is more money in blockchain," said Roman Bieda of Coinfirm, a crypto security company, referring to the technology that underpins cryptocurrencies. — AFP

Drug cartels in Mexico and Colombia are increasingly using cryptocurrencies such as bitcoin to launder money, the UN-linked International Narcotics Control Board (INCB) says.

Mexican cartels are estimated to launder $25 billion a year in Mexico alone, the board's annual report said, describing them "as among the richest and most powerful organized criminal groups" in the world.

"The use of bitcoin to launder money is increasing, in particular among drug gangs such as the Jalisco New Generation Cartel and the Sinaloa Cartel," it says. -- AFP

The US Justice Department announces it had recovered more than 94,000 bitcoin stolen in 2016, currently valued at $3.6 billion, a record seizure.

A couple accused of seeking to launder the bitcoin were arrested in New York, the department said. Ilya Lichtenstein, 34, and his wife Heather Morgan, 31, were set to appear in federal court over the charges.

Lichtenstein and Morgan allegedly sought to launder the proceeds of 119,754 bitcoin — then valued at $65 million — that were stolen during a 2016 hack of the virtual currency exchange Bitfinex. — AFP

The Facebook-backed digital currency project Diem announces the winding down and $182-million sale of its technology, capping a years-long initiative that drew significant concern from regulators.

Facebook's announcement in 2019 of plans to design a cryptocurrency and payment system raised immediate red flags for global finance officials, who expressed a barrage of criticism about the security and reliability of a private network.

"The idea of Facebook doing a cryptocurrency was a bridge too far for regulators," says analyst Rob Enderle of Enderle Group.

"They have made it clear they don't trust Facebook with what they are doing now, so sure as heck were not going to let it go into the money business." — AFP

The price of bitcoin hit record highs in 2021 thanks to support from traditional finance, but cryptocurrency specialists are struggling to predict next year's outcome for the volatile sector.

Having more than trebled in value to $60,000 between December 2020 and April, bitcoin has lost some shine to trade at under $50,000 heading into the new year.

"The current choppy and directionless price action with a possibility of further pressure to the downside has introduced a lot of uncertainty to the digital asset market," notes Loukas Lagoudis, executive director at cryptocurrency investment fund ARK36. — AFP

Indian Prime Minister Narendra Modi's Twitter account was hacked Sunday with a message declaring his country had adopted bitcoin as legal tender and was distributing the cryptocurrency to citizens.

Modi is a prolific tweeter and is the world's most popular incumbent politician on the platform, with more than 73 million followers on his main account.

A swiftly deleted tweet from his main @narendramodi handle said the Indian government had officially bought 500 bitcoin and was "and distributing them to all residents of the country", along with a scam link. — AFP

The idea of spending millions on non-existent land may sound ludicrous — but feverish predictions of a virtual reality future are pushing investors to bet big on digital real estate.

This week, New York-based company Republic Realm announced it had spent a record-breaking $4.3 million on digital land through The Sandbox, one of several "virtual world" websites where people can socialize, play games and even attend concerts.

That came hot on the heels of a $2.4-million land purchase in late November on a rival platform, Decentraland, by Canadian crypto company Tokens.com. And days before that, Barbados announced plans to open a "metaverse embassy" in Decentraland. 

Such websites bill themselves as a prototype of the metaverse, a future internet where online experiences like chatting to a friend would eventually feel face-to-face thanks to virtual reality (VR) headsets. — AFP

Indian Prime Minister Narendra Modi on Thursday warned that bitcoin presents a risk to younger generations, sounding a hawkish tone as his government prepares to introduce legislation to regulate cryptocurrencies.

Speaking at an online cybersecurity forum, Modi framed virtual money — highly popular in India and exist beyond state and central bank control — as a domain that needs to be closely policed. 

"Take cryptocurrency or bitcoin, for example," he told a forum hosted by the Australian Strategic Policy Institute. "It is important that all democratic nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youths." 

Critics of cryptocurrencies allege that largely anonymous unregulated transfers make them a perfect tool for drug traffickers, people smugglers or money laundering. — AFP

Bitcoin takes another step closer to mainstream investing with the launch of a new security on Wall Street tied to futures of the cryptocurrency.

To mark the occasion, ProShares, leader in exchange-traded funds, a type of investment linked to an index, rang the opening bell of the New York Stock Exchange on Tuesday.

The Bitcoin Strategy ETF, trading under the "BITO" ticker, rose 4.9 percent to $41.94 in its first session, an eagerly-anticipated event in the world of crypto-money that boosted bitcoin futures.

Find the latest cryptocurrency updates here. Photo courtesy of MichaelWuensch from Pixabay.