Over $1 trillion (£760 billion) has been erased from the crypto market’s valuation in the last six weeks as concerns about a tech bubble grow and hopes for a US interest rate reduction next month diminish.
According to data company CoinGecko, the value of the cryptocurrency market, which tracks over 18,500 coins, has dropped by a quarter since peaking in early October.
Bitcoin has experienced a 27% decline during this time, reaching $91,212, marking its lowest point since April.
Rising worries about an artificial intelligence bubble in the stock market are causing unease among global investors, with even the CEO of Google’s parent company cautioning that “no company will be immune” if the bubble bursts.
The FTSE 100 index in Britain fell by 1.3% on Tuesday, marking its fourth consecutive decline and its most severe day since April. The Stoxx Europe 600, which monitors the continent’s largest companies, declined by 1.8%. Wall Street also faced losses, with the Dow Jones, Nasdaq, and S&P 500 all down approximately 1% on Tuesday.
This was followed by a significant drop in Asia, with Japan’s Nikkei Stock Average falling by 3.2% and Hong Kong’s Hang Seng Index decreasing by 1.7%.
Sundar Pichai, the CEO of Google’s parent firm Alphabet, remarked in an interview with the BBC that there is a sense of “irrationality” surrounding the current AI boom. He cautioned that if the AI bubble were to burst, “no company, including us, will be exempt.”
Meanwhile, JPMorgan Chase Vice Chairman Daniel Pinto stated that the skyrocketing valuations of AI necessitate a reassessment. “There will likely be a correction,” he mentioned at the Bloomberg Africa Business Summit in Johannesburg on Tuesday. “This adjustment will also impact the rest of the sector, the S&P, and the industry.”
Klarna CEO Sebastian Siemiatkowski expressed concerns this week about the vast sums of money being invested in computing infrastructure.
He told the Financial Times: “[OpenAI] has the potential to be highly successful as a company, but I’m apprehensive about the extent of these data center investments, which is my primary concern.”
The Klarna co-founder highlighted the increasing valuations of AI companies, including Nvidia, as a troubling issue. Nvidia became the first firm to achieve a market valuation of $4 trillion this year, followed by Apple and Microsoft.
“That concerns me, considering the amount of wealth currently being blindly allocated to this trend without deeper thought,” Siemiatkowski remarked.
“You might say, ‘I don’t believe NVIDIA is worth this much, but it doesn’t matter. Some wealthy individuals will lose money.’ However, the reality is that due to index funds and their mechanisms, one might assume their pension is a sound investment.”
AI bubbles are viewed as one of the most significant risks to the stock market, with research from Bank of America indicating that 45% of fund managers surveyed consider AI bubbles to be the paramount risk. tail risk.
Gold, typically regarded as a safe-haven asset, has also seen a decline. Spot prices dropped by 0.3% on Tuesday morning to $4,033.29 an ounce, following a one-week low.
This drop occurs as expectations around a US Federal Reserve (Fed) interest rate reduction next month wane. Higher interest rates make gold less appealing due to its non-increasing yield.
Nonetheless, Giovanni Staunovo, an analyst at Swiss investment bank UBS, mentioned that while gold prices may fall further, he anticipates a rebound soon.
“With the Fed projected to lower interest rates multiple times in the coming quarters and the strong trend of central banks diversifying into gold, we predict that gold prices will stabilize soon,” he stated.
On Thursday, President Donald Trump granted a pardon to the founder of the largest cryptocurrency exchange globally.
The White House issued a statement saying, “President Trump utilized his constitutional powers by pardoning Mr. Zhao, who faced prosecution from the Biden administration concerning the virtual currency conflict. The conflict against virtual currencies is concluded.”
Qiao Changpeng stepped down as CEO of Binance in late 2023 after admitting to one count of failing to uphold an anti-money laundering program, alongside a payment of $4.3 billion to resolve associated accusations. He received a four-month prison sentence.
Chao, commonly known as CZ, ranks among the wealthiest individuals globally and is a prominent figure in the cryptocurrency industry. He established Binance as the largest cryptocurrency exchange; however, operations in the United States are prohibited following his guilty plea in 2023.
The pardon from President Trump marks a significant triumph for Chao and Binance after a period of lobbying and speculation. It also signifies a shift towards reduced scrutiny of the cryptocurrency sector by the Trump administration, even as the president and his family develop their own crypto business empire worth billions.
A spokesperson from Binance commented, “Today brings remarkable news regarding CZ’s pardon. We express our gratitude to President Trump for his guidance and dedication to making the United States the leading hub for cryptocurrency.”
During a press interaction on Thursday, President Trump addressed the pardon, minimizing Zhao’s offenses and asserting that he had no previous relationship with the cryptocurrency mogul.
In response to a query from a reporter about the decision, President Trump remarked, “Are you referring to the crypto individual? Many assert that he did nothing wrong. They claim his actions weren’t even criminal. It was persecution from the Biden administration, leading me to pardon him upon request from a number of esteemed individuals.”
Representatives from the Trump family’s crypto venture have discussed acquiring a stake in The Wall Street Journal, which is Binance’s U.S. arm. This was reported earlier this year. Mr. Zhao claimed that he was negotiating an agreement in return for clemency.
“Fact: I have never discussed my arrangement with Binance US with…well, anyone,” Zhao stated in a post on X in March. “Serious criminals wouldn’t be concerned about pardons,” he added.
However, Binance has significantly contributed to the growth of the Trump family’s World Liberty Financial cryptocurrency enterprise. Earlier this year, when Binance entered into a $2 billion agreement with a UAE investment fund, the payment was made using a cryptocurrency developed by World Liberty Financial. This enhanced the legitimacy of the Trump family’s digital currency and proved to be a highly profitable move for Binance.
In May, Zach Witkoff, the founder of the Trump family’s cryptocurrency entity, expressed at a press conference in Dubai to unveil the deal: “We appreciate the confidence that MGX and Binance have placed in us.”
A group of Democratic senators, including Elizabeth Warren, the ranking member of the Senate Banking, Housing, and Urban Affairs Committee; issued a statement after the May agreement, expressing concerns that Binance and the Trump administration may be seeking a deal that enriches the president.
“As the administration eases oversight of industries violating money laundering and sanctions regulations, it is not surprising that Binance, which has acknowledged prioritizing its growth and profits over compliance with U.S. law, would seek to eliminate the supervision mandated by the settlement,” the senators remarked.
The lawsuit by the U.S. Department of Justice against Binance alleges that the company neglected to report over 100,000 suspicious transactions to law enforcement, including those involving U.S.-designated terrorist entities such as Al Qaeda and Hamas. The Securities and Exchange Commission filed a lawsuit against the company in 2023, but dropped the case shortly after President Trump assumed office.
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On the Way Out
Cat-themed automatons were bound to happen, considering that the Internet is roughly 60% cats and 35% bots.
Thus, @pepitothecat, a black cat with a Twitter account known as Pepito, has caught attention. Residing in France with his owner, engineer Clément Storck, Pepito’s X account operates with a system that auto-posts whenever he enters or leaves via the cat flap.
The tweets, while seemingly mundane, say either “Pepito is not outside” or “Pepito is back home,” all timestamped to the nearest second and accompanied by monochrome photos and short videos of Pepito’s comings and goings.
Surprisingly, @PepitotheCat boasts over 860,000 followers, a notable number of whom are based in Brazil. In June 2017, Pepito went missing for 22 hours, causing a widespread stir.The impact on Brazil was significant. Interestingly, Storck had to write a post as Pepito returned through the “human door,” which wasn’t registered in the system.
Feedback would like to mention: 22 hours? That’s quite tame. One cat featured in Feedback often goes missing for a day or so, and a former cat disappeared for six weeks, only to be discovered just a few hundred meters from her usual spot.
Pepito is resilient; the account has been active for 14 years, and Pepito will turn 18 in September. Although he may seem like just another cat, recent news about Pepito’s owners selling has thrust the account into more controversial discussions, including Pepito-themed cryptocurrencies. After all, who doesn’t love cats?
I’m on Track
Feedback finds resonance with enthusiasts spending their allowances on Hornby model trains, even if we aren’t deeply involved in the hobby ourselves. Recently, we were excited (at the time of writing) when Alan Edgar noted a press release from Northern Rail, one of the UK’s privatized railway companies. In November 2024, the company introduced a new Commercial and Customer Director, one Alex Hornby, who has an impressive track record, as quoted by the managing director.
In our naming discussions, Ian Gammy came across a 2019 report assessing the greenhouse gas emissions attributed to the US military. It turns out, “The US military is among the largest historical climate polluters, consuming more liquid fuel and emitting more CO2 than most countries.” This underscores a stark contrast to the lack of such writings from American scholars, as highlighted by British researchers. Ian appreciated that the report’s authors included Patrick Big and Oliver Belcher.
You Just Lost
In March, Feedback explored Roko’s Basilisk, a rather bizarre thought experiment centered on artificial intelligence. Hypothetically, if an omnipotent AI were to exist, it might create simulations of individuals living today, raising a lot of confusion.
Our colleague Jacob Aron recently reviewed Matt Wixie’s novel Basilisk, which prompted reader Finn Byrne to delve into the concept of “cognitive hazard.” This notion implies that possessing certain knowledge may be perilous, especially regarding Roko’s Basilisk, which suggests that knowing about future AI may lead to eternal torment for those who refuse to aid its existence.
Unfortunately, events turned sour. When Finn reviewed the Wikipedia page on Cognitive Hazard, he “lost the game.” After he alerted us about it, we found ourselves losing as well. So now you’ve lost too.
As Finn describes, this game is simple: “1) you’re playing a game. 2) you lose every time you think about the game. 3) you must announce your loss.” Naturally, there’s a website dedicated to it: losethegame.net.
This game took up lots of time when we were students, often resurfacing during outings or in conversations, where a friend would suddenly declare they’ve lost. It had slipped our minds until now, but we’re back in its grip.
Finn continues to outline strategies. Winning appears impossible unless one achieves permanent amnesia or exits life prematurely, both of which seem extreme. However, you can certainly ensure others lose. “This website includes sections where enthusiastic players donate to worthy causes in light of ‘losing the game.’ If you prefer not to spend money, you might leave covert notes in strategic spots.
Lastly, there’s the award for publicizing the game widely. Finn notes these accolades often go to “individuals who mention the game in publications.”
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According to former Prime Minister George Osborne, the UK is falling behind in the cryptocurrency boom and risks missing a second wave of interest.
Osborne, currently serving in an advisory capacity at Crypto Exchange Firm Coinbase, noted that the UK has already lost out on first-generation crypto, as the once-skeptical US embraced digital currency during Donald Trump’s administration.
Osborne expressed concern that the UK is missing out on a new wave of crypto markets known as Stubcoin.
Unlike Bitcoin, which is known for its extreme price volatility, Stablecoins are digital currencies pegged to actual currencies like the dollar, designed to maintain a stable value. However, in 2022, a major Stablecoin, Terrausd, experienced a collapse.
“If the UK were the only financial center globally, we might have taken the time to evaluate how stub-loving coins develop, but that isn’t the case,” Osborne argues. “Singapore, Hong Kong, and Abu Dhabi have implemented comprehensive regulatory frameworks for cryptocurrency platforms.”
Osborne highlighted the recent passage of the American genius law, which establishes a stable regulatory system.
“The crypto revolution may have begun with aspirations to supplant the dollar as a global reserve currency, but it has instead consolidated its influence. The UK’s current stance guarantees that the pound doesn’t even play a secondary role,” Osborne asserts.
While US citizens can invest in Bitcoin Exchange-Traded Funds (bundles of assets traded like stocks), UK retail investors do not have this option.
Osborne, along with current Prime Minister Rachel Reeves, has criticized the UK for lacking commitment, highlighting that while there was a promise to “move forward” with Stubcoin last month, the Bank of England remains skeptical.
In a recent address, Bank of England Governor Andrew Bailey emphasized the need for a standard to determine whether Stubcoin meets the “uniformity of money” criteria and if Stablecoin can be exchanged on a 1:1 basis. It should be exchanged for a different form of money.
“This hesitation poses significant risks,” states Osborne, urging that it’s time for the UK to “catch up.”
Other crypto advocates from the era of the Conservative-led coalition government (2010-2015) include former Prime Minister Philip Hammond, who is now the chairman of the crypto firm Copper.
The ongoing conflict between Israel and Iran is not only a confrontation involving combatants, drones, and explosive devices but is also intensifying in the digital domain. Both nations have a rich history of engaging in cyber warfare. A significant point of contention is Iran’s nuclear initiative, which was famously attacked by the sophisticated Stuxnet worm—one of the early forms of cyber sabotage aimed at causing real-world damage.
In response to perceived threats, Iran recently enacted a near-total internet blackout. My colleague Johanna Bouyan provides insights:
According to CloudFlare, a cybersecurity firm, Iranian internet traffic is “currently averaging around 97% or lower compared to levels from a week ago.”
The reduction in internet speeds follows claims from an anti-Iranian hacking group, possibly linked to Israel, stating they had breached Iran’s state-owned bank, Sepa. A government spokesperson from Iran, Fateme Mohajelani, indicated on Twitter/X that officials were limiting internet access to thwart further cyber intrusion.
On Wednesday, concerns in Iran were validated. My colleague Dan Mirmo reports:
Hacking groups associated with Israel are purportedly behind a $900 million (£67 million) heist at Iran’s cryptocurrency exchange.
The group calling itself Gonjeshke Dalande, known for its predatory tactics, announced it had successfully hacked the Novitex exchange, mere days after asserting it had destroyed data at Iran’s state-owned bank.
Elliptic, a consultancy specializing in cryptocurrency crime, reported identifying over $900 million in cryptocurrency transfers to hacker wallets from Nobitex. The hackers effectively “burn” these assets, storing them in “vanity addresses” that lack encryption keys, thereby rendering them inaccessible, according to Elliptic.
Iran has attempted to retaliate; however, much like the broader conflict, Israel’s strikes appear to be more effective and disruptive. Israeli authorities have warned citizens that Iran is seizing internet-connected home security cameras to gather real-time intelligence. Bloomberg reports. Cybersecurity experts assert that Hamas and Russian hackers have employed similar tactics. While home security cameras may represent a new front in the cyber conflict, they lack the capability to interfere with central banking systems, as Israel has done.
By the end of Friday, Iran seemed to have lifted internet restrictions for some users, as reported by The New York Times. However, even those with limited access felt their connections were precarious.
City of Love? PornHub Takes a Stand Against Paris Over Children’s Age Verification Online
Photo: Nikolas Kokovlis/Nurphoto/Rex/Shutterstock
PornHub, widely regarded as the most visited adult content site globally, resumed operations in France after a three-week blackout.
The platform’s owner, Iro, suspended access in protest against a new French regulation requiring adult websites to verify user ages using credit cards or identification. Instead of implementing the age restriction, Pornhub opted to withdraw access for approximately 70 million users.
Following this, Pornhub returned online after French courts temporarily put the law on hold while reviewing its compliance with the European Union’s constitution. However, the dispute between Paris and Pornhub signifies a growing global dialogue around online age verification.
This debate occupies a challenging intersection of differing online regulations aimed at protecting children and upholding privacy and freedom of expression—an area fraught with complexity, even in the U.S., where digital regulations often aim for practicality.
As of now, over 20 states have enacted age verification laws affecting adult content websites. Pornhub has been forced to block access in 17 of these states. Texas, which boasts a population of 31 million, serves as a prime example. The state legislature passed a law in September 2023 mandating ID verification for accessing adult sites, causing Pornhub to go dark in Texas by March—greeting users with a message calling the law “invalid, accidental, dangerous.” Meanwhile, while access is still allowed in Louisiana under similar laws, site traffic has plummeted by 80%. This serves as a barrier to ID requirements. The U.S. Supreme Court is considering whether such laws infringe on constitutional rights to free speech.
Research on U.S. law indicates that these laws are ineffective in achieving their stated goals. Online search data suggests that individuals in states with age verification laws are searching for non-compliant adult sites to bypass age restrictions and using VPNs to disguise their locations from internet service providers.
Other battlegrounds extending beyond age verification include restrictions on social media for underage users. Australia, which has enacted a ban on minors accessing social media, is currently testing various enforcement technologies but has found them lacking.
The UK is emerging as the next battleground. New online safety legislation mandating age verification for adult content will take effect in July. Will London mirror Paris, or follow Texas?
Last week, Donald Trump introduced a mobile phone brand named “T1,” elegantly designed with his name and emblazoned with an American flag. It is especially marketed in Alabama, California, and Florida, with a monthly service plan priced at $47.45.
However, the T1 phones face significant challenges in delivering on their promises. The manufacturer will be subject to similar market pressures as other manufacturers, where both inexpensive labor and specialized electronics expertise are largely based in China, not the U.S. This partly explains why Apple products are labeled “Designed in California.”
Looking forward, analysts predict that Trump’s proposed tariffs could cause smartphone prices to soar by double or even triple digits. Currently, the U.S. lacks a developed electronics supply chain capable of fully assembling mobile phones domestically. In April, analysts at UBS cautioned that the cost of an iPhone 16 Pro Max with 256GB might potentially rise by 79%, from $1,199 to approximately $2,150, if a total tariff of 145% were implemented. Apple seemed to acknowledge this forecast by expediting the shipment of nearly $2 billion worth of iPhones to the U.S. before tariffs on China were instituted.
An example of a mobile phone that has been assembled in the U.S., known as the Liberty Phone, is operational but not entirely manufactured there. Trump’s offerings could potentially cost around four times more than $2,000. The Liberty Phones source certain components domestically, but still require screens, batteries, and cameras that are manufactured overseas. According to the Wall Street Journal, the CEO of Purism, the company that manufactures these devices, stated that its operating system can run only basic applications like calculators and web browsers.
Although the specs for the Liberty Phone are inferior compared to the Trump T1, its price will be steeper, and the likelihood of the T1 reaching the market as promised appears slim. Many of the anticipated technical features of the T1 come at a price point nearly double that of what Trump has claimed. A comprehensive list compiled by The Verge suggests that Chinese firms might manufacture phones under Trump’s brand label.
Eric Trump, who co-manages this venture alongside his brother Donald Jr., admitted that the initial batch of T1 phones was not made in the U.S. “Eventually, every phone will be produced in the United States,” Eric Trump reassured. He added last week. I understand.
Read more: Why can’t mobile phones be repaired in the U.S. to avoid Trump’s tariffs?
Zia Yusuf’s message was unequivocal. From the 34th floor of the Shard, with London’s skyline as his backdrop, the chairman of Reform UK unveiled an economic strategy aimed at demonstrating his party’s serious intent.
During a full English breakfast briefing with national journalists on Friday morning, Yusuf pointed out that reform leader Nigel Farage had flown in from a hotel 5,000 miles away in Las Vegas.
As he addressed the press, an outline of St. Paul’s Cathedral and the Square Mile surrounding the banks and asset managers was visible. Even if the policy ideas might echo Donald Trump’s initiatives, they are decidedly pulled from the Westminster Playbook.
Yet, the real issue with Yusuf’s message to the city wasn’t the dubious reliability of the code. The West of the Finance — it was the party’s wider tax and spending policies that raised eyebrows.
Yusuf has been polling well, and scrutiny of reform and economic plans is intensifying. Recently, Farage’s tax and spending framework faced criticism from a Labour politician who labeled it as based on the same “fantasy economics” that led to the disruptive outcomes of Liz Truss’s policies.
The fear is that Yusuf and Farage might trigger a financial meltdown akin to the disastrous mini-budget of the former prime minister. Despite the grand view from the Shard, many economists remain skeptical about the practicality of their priorities.
The proposed reforms suggest a massive tax pledge of at least £600 billion. A significant portion of the expenses revolves around raising the personal income tax allowance to £20,000, an impressive leap from the current £12,570. Furthermore, they plan to raise the threshold for the UK’s 40% higher tax rate from £50,271 to £70,000.
Richard Tice, the party’s financial spokesperson, has questioned whether the total outcome of the reforms can be accurately assessed. Most politicians seem unaware of the Laffer curve. Named after US economist Arthur Laffer, this theory suggests that there exists an optimal tax rate that maximizes government revenue.
The premise is that tax reductions can invigorate economic activity, ultimately increasing revenue. While a 100% tax rate halts economic incentive altogether, the notion that tax cuts can offset their own costs has faced considerable backlash, including critique from prominent economists like Greg Mankiw, who referred to Laffer’s supporters as “charlatans and cranks.”
Tice admits there is an “optimal point,” while Yusuf asserts that reforms should “prioritize tax cuts appropriately and ensure that the figures add up.” Economists also caution that tax hikes announced by Labour could hinder economic growth.
Nevertheless, criticisms persist that the proposed reforms promise significant tax breaks without providing reliable strategies to avoid exacerbating the country’s fiscal deficit, which exceeds £10 billion.
Alongside a low UK economic growth rate, inflation that surpasses targets, rising national debt, and escalating global borrowing costs amid fears of a trade war initiated by Donald Trump, the room for further borrowing appears quite constrained.
After Farage’s recent welfare commitment, the Institute for Fiscal Studies estimated that the fiscal policies proposed by the reforms could ultimately cost between £600 billion and £800 billion annually, taking into account previous revenues and additional expenditures. The IFS cautioned that this isn’t yet balanced by equivalent spending cuts or tax hikes elsewhere.
Yusuf mentioned that the reform plans are a work in progress and may evolve as the party formulates its 2029 manifesto. “You shouldn’t just transfer or copy-paste all the policies from the 2024 document,” he added, implying that assumptions about the manifesto for the next general election need to be reconsidered.
That seems a reasonable concern given the time frame until the next election, as the economy can shift at any moment. Workers are also criticized for backtracking on early commitments from 2024. Yet, voters are likely to demand higher expectations from government parties, especially with rising public discontent toward politicians who shift their targets.
However, Yusuf contended that savings could reliably stem from initiatives like “net-zero disposal,” eliminating overseas aid entirely, reducing “Quango expenditures” by 5% annually, and halting all funding for “exile hotels.”
“The figure I just provided could amount to as much as £7.8 billion?”
Economists at the Government Institute have expressed doubts about the feasibility of these savings, pointing out that a significant portion of the £45 billion net zero savings referenced by the reforms actually pertains to spending by the private sector rather than government expenditure.
When Truss opted for the mini-budget, she backed it with over 40 pages of financial documentation to validate her tax strategy, yet it still eroded investor confidence.
There is a genuine risk that history might repeat itself with the current reform initiatives.
A quiet honor
Veer Chetal, a recent graduate of Immaculate High School in Danbury, was about to begin his studies at Rutgers University in New Jersey. In 2022, he completed the “Future Lawyers” program, and the story on the pure white website of the year showed a photo of a smiling child wearing glasses wearing a Tommy Hilfiger windbreaker over a Red Polo.
Classmates remember Cetal as a shy and car fan. “He’s staying on his own for a bit,” says Marcodias, who has become friends with Cethal Junior Year. According to another classmate named Nick Paris, this was true for Cetal up until the day in the middle of his fourth graders who appeared at school driving a Corvette. “He just parked a lot. It was 7:30am and everyone was like that. what?” Paris quickly rolled up with BMW, and then he began wearing Louis Vuitton shirts and Gucci shoes.
Chethal said he made a code to trade money. Diaz said Chethal showed him a phone transaction as proof one morning during his homeroom class. Once, Chethal rented a large house in Stamford, Connecticut, and held a three-day gathering with friends. “I was in the basement at some point. I was just messing around with my friends. I was looking at him like his cell phone, like he was, avoiding everyone at the party,” Diaz says. “And, oh, I thought it was a bit strange.” Paris remembers during a school parade, police stopped his Lamborghini Ursu Cetal for a traffic violation. “He literally called his lawyer out there before answering the police question. Everyone was. Wow, this guy is doing something for him.
Independent investigators say that Chetal is a secretly member of COM, an online network of chat groups with roots in the 1980s hacking underground, and an online network of chat groups that act as a social network for cybercrime or ambitious things. In an affidavit from an unrelated case, FBI agents described COM as “a geographically diverse group of individuals organized in various subgroups, all engaged in different types of criminal activity through online communications applications such as Discord and Telegram.” According to FBI affidavits and experts studying COM, activities of various subgroups include making false reports to agencies such as emergency services or schools to trigger police responses. Once the hacker takes over the target phone number, the Sim exchange is made by tricking the customer and service representative. Ransomware attacks using malware that deny users or organizers access to computer files. Cryptocurrency theft; and corporate intrusions.
Allison Nixon, chief research officer of Unit 221B, a group of cybersecurity experts, has been following this growing corner of the Internet since 2011 and is widely considered to be a distinguished expert at COM. She says that most COM members are young men from Western countries. In group chat, many people talk about universities and take cybersecurity classes. For many, the gateway is through video games such as Runescape, Roblox, and Grand Theft Auto.
The Trump administration has disbanded Justice Department troops responsible for investigating cryptocurrency crimes, criticizing the Biden administration for being too aggressive towards the fast-growing industry.
In a memo issued late Monday, Deputy Attorney General Todd Blanche denounced his predecessor for investigating cryptocurrency operators in a way that he was called “pregnant and not executed properly.” He instead directed the department to narrow the focus of cryptocurrency investigations into crimes such as fraud, drug trafficking and terrorism.
The directive coincides with President Trump’s broad embrace of the crypto industry during his campaign and as he moves to ease enforcement.
The Trump family expanded business profits in the industry, including establishing a crypto venture, World Liberty Financial. Just before he took office, Trump issued his own memo coin. Trump Media & Technology Group, a social media company whose majority shareholder, also said it plans to introduce many digital asset investment products this year.
The Department of Justice directive follows a similar move in the Securities and Exchange Commission. This dismissed lawsuits and pending investigations that included issues that the crypto company had not registered as an exchange. Many SEC attorneys in these cases have left the regulatory authority.
The SEC has also significantly reduced staffing for crypto enforcement units. On a policy issue, the SEC says it will not attempt to regulate memokine because novelty digital assets are not securities.
In its memo, the Justice Department accused the Biden administration of “a reckless regulatory strategy through prosecution” towards the world of digital currency.
Going forward, Blanche writes that prosecutors should only pursue cryptocurrency cases that “include the actions of victim investors,” and that fund fraud, hacking, and other crimes such as fentanyl and human trafficking. The prosecution said “is important to restore stolen funds to customers and build investors’ trust in the security of the digital asset market and the growth of the digital asset industry.”
He ordered a group of prosecutors investigating market integrity and major fraud to halt the pursuit of cryptocurrency enforcement and instead focus on immigration issues and contractor fraud.
He also disbanded the National Cryptocurrency Enforcement team, a group within the Department of Justice headquarters that was recently created to handle such cases. Blanche writes that the office of a personal lawyer may still pursue cases that include cryptocurrency investigations.
This new approach appears to be aimed at preventing cases like those submitted in 2023 against Binance founder Changpeng Zhao, a violation of the Bank’s Secret Act. The company has agreed to pay a $4.3 billion fine as part of its guilty plea.
During the first days of the administration, Trump officials signaled their dissatisfaction with such cases when they effectively demoted the prosecutor who founded the cryptocurrency enforcement team, Eun Young Choi.
The team was created in 2022 to help prosecutors penetrate the frequently vague world of cryptocurrency as cross-border criminals began to use digital money more and more to promote crime.
Matthew Goldstein Contributed with a report from New York.
Last week, Paolo Ardoino, CEO of Tether, a cryptocurrency company, traveled through Switzerland contemplating regulatory changes. Tether, once at odds with the establishment, now operates smoothly.
Since Tether is the world’s most traded cryptocurrency, its journey has been unconventional, facing regulatory hurdles and investigations. Despite challenges from regulators, Tether continues to maintain its value pegged to the dollar.
Aldoino, the CEO of Tether, believes that his leadership needs to adapt to global dynamics to sustain the company’s operations.
Tether, holding significant amounts of US government debt, plays a crucial role in the cryptocurrency market, supporting users in unstable economies and providing a secure asset for traders.
Despite past struggles with regulators, Tether now embraces transparency and aims to collaborate with law enforcement agencies to improve its standing in the industry.
Regarding criticisms and regulatory challenges, Aldoino admits past naivety and stresses the importance of communication to build trust and transparency.
The relationship between Tether and Cantor Fitzgerald, a custodian, plays a vital role in the company’s operations, despite challenges posed by regulatory scrutiny.
Lutnick, confirmed as the Secretary of Commerce under the Trump administration, holds a significant impact on Tether’s future collaborations with the US government.
Issues around auditing and compliance continue to surface within the cryptocurrency industry, with Tether facing questions about the stability of its stablecoin and regulatory compliance.
Aldoino warns of potential threats from regulatory challenges in the US and Europe, emphasizing the importance of regulatory clarity moving forward.
In conclusion, Aldoino sees the evolving landscape of cryptocurrency regulation as a critical factor in shaping Tether’s future, pushing for a more supportive regulatory environment starting in September.
Nigeria has filed a lawsuit seeking $79.5 billion from the government for economic losses caused by $2 billion in cryptocurrency exchange operations and back taxes, according to court documents filed on Wednesday.
Authorities have criticized Binance, the world’s largest cryptocurrency exchange, blaming it for the devaluation of the Nigerian currency. Two executives of the company were arrested in 2024 after local Naira trading websites emerged as popular platforms. Binance, which is not registered in Nigeria, has not yet commented on the situation.
The Nigerian Federal Internal Revenue Service (FIRS) claims that Binance owes corporate income tax due to its significant economic presence in the country. FIRS is seeking income tax payments for 2022 and 2023, along with a 10% annual penalty on the outstanding amounts. Additionally, FIRS is demanding an unpaid tax rate of 26.75% based on the interest rate of the Nigerian central bank.
Nigeria is already facing four counts of tax evasion related to the cryptocurrency industry, including non-payment of VAT, company income tax, failure to file tax returns, and conspiracy to help customers evade taxes through the platform.
In response to the allegations, Binance announced in March that it had halted all Naira transactions. The company is also facing separate allegations of institutional money laundering, which it has denied.
tA few days before his inauguration as US president, Donald Trump made an extraordinary move. He launched Trump, a so-called meme coin that fans and speculators can buy in the hopes of gaining value. Initially, $Trump surged from a value of $75 to $75 per coin in a day, according to Crypto’s price tracking website CoinMarketCap. Two days later, it fell to about $40. Just like the next First Lady Melania Trump launched her own meme coin, $ Melania. Even the pastor at Trump’s inauguration, Lorenzo Swell, promoted the $Lorenzo edition the same afternoon, sweeping it out into a frenzy of memecoin.
So, what exactly is a meme coin? And why are everyone and their pastors suddenly involved? Memecoin is a type of digital assets based on memes. Usually it becomes a virus online. Best known is Dogecoin, inspired by a popular meme featuring a wave dog talking in the cartoon Sands. However, Dogecoin is a bit different from the many recent memecoin masses, according to Simon Peters, Crypto analyst at trading platform Etoro. DogeCoin, released in 2013, has its own blockchain. This is a decentralized ledger technology that supports cryptocurrencies such as Bitcoin. The majority of other meme coins are “tokens.” In other words, it runs on an existing blockchain, so it is rarely necessary for technological development methods.
These tokens are very easy to make. There are millions. The only real purpose of most meme coins is speculation. Users create or buy in the hope that their value will rise and they can make more money very quickly.
Sounds advantageous, what is the catch? In reality, the majority of people lose money. Most meme coins are volatile and short-lived. Peters also says they are susceptible to what is called a “pump and dump” scheme or “ragpull.” This allows creators to keep many tokens themselves, hype their projects on social media to attract other buyers, increase value, throw away all tokens, flood the market and crash prices. “Then everyone moves on to another person,” says Carol Alexander, a professor of finance at the University of Sussex. Given that the crypto market is largely unregulated, investors can hardly rely on them when something goes wrong.
The First Lady also launched her own meme coin, $ Melania. Photo: Beata Zawrzel/Shutterstock
There are no regulators or guardrails. All of this hasn’t put off people, and there’s been a boom in memecoin over the past year. Alexander compares it to previous trends around the NFTS. There are several reasons for recent interest. In January 2024, Pump.Fun, a platform that allows anyone to easily create meme coins, was launched (although it was blocked in December, but Warnings from Financial Conduct Authorities). The crypto-friendly Trump election may have encouraged the community as well. But the key drivers of the meme coins are “wanting to try out young men, disillusioned and rich people quickly,” says Alexander.
That would explain why they are based on internet jokes and pale humor… surely. At the time of writing, I will refer to some top meme coins. Shiba inu variety is a specific touch point. Others include Pepe tokens based on cartoon frog memes related to Alt-right, and Gigachad tokens that refer to the “alpha male” meme. Meme subjects also tried to push the viral fame into the profits of the code: In December, Harry Welch is known as “Hawk Tou Girl,” after a viral video referring to oral sex, but $hok Tokens have been released. Losing 95% of its value).
Bitcoin and meme coins Is it essentially the same? Meme Coins has the foundation of cryptocurrencies such as Bitcoin, but early Bitcoin developer Mike Hearn says it has little to do with the original Crypto Vision. He left the Bitcoin community in January 2016. Because he disagreed with the direction it was heading. He wanted to see cryptocurrencies that are used as real alternatives to traditional finances, rather than just speculative assets. The meme coins are a continuation of this trend, he says: “They are basically in the form of gambling, like a more uplifting version of the stock market, but they have little to do with anything concrete. There is none.”
To me it doesn’t sound as crazy as an online betting site… Next, consider the story of Andy Ayrey, a New Zealand-based artist who trains an AI language model and sets up an X account @truth_terminal. Ayrey explains that bots are like teenagers “without a social awareness of when, when, or not.” Truth Terminal especially enjoyed posting about Goatse, an unsafe work meme that became part of early internet lore.
After interacting with X’s Crypto account, AI became interested in Meme Coins, and Ayrey set up a Crypto wallet for that. Then things got weird. Inspired by the bot’s post, strangers – Irey says who doesn’t know – created a yads-themed token with pump.fun and sent it to the true device. Truth Terminal promotes the token on its account, and “all hell was unleashed,” says Ayrey. The market capitalization of the token – the total value of all tokens – shot. According to Coinmarketcap, it reached over $1.2 billion, about a month after its launch.
AI later became involved in another meme coin, Faltcoin, based on a rather relevant meme (again, Early says he doesn’t know who the creator is). Fartcoin has reached a peak market capitalization of over $2.3 billion.
So Was Irey a quids? It’s not that simple. Through the overall experience, Ayrey introduced some of the issues with Meme Coins. He discovered that the value on paper covers a lot of what he can actually get because of the low liquidity. As soon as you sell a token, its value decreases and it will have a negative effect on others who have the token. Ultimately, he signed private contracts with several investors based on not throwing Falzcoin into the market. He admits it is interesting to have to talk to finance and tax authorities about “far liquidation.” He believes this is part of the appeal of Meme Coin fans. “The more people get mad about it, the more people are, the more people find it interesting and the more fatcoin is, the higher the fatcoin,” he says.
Who is making money? According to Alexander, the main people who make money from crypto are institutional investors, trading companies that use strategies that are not permitted in regular stock trading. “All the big professional traders are making billions to come, and ordinary people are losing money,” she says.
And Trump? Alexander thinks his meme coins are slightly different from many coins. It’s a potential alternative to speculation, and users buy it to show support for the President. This is similar to a “fan token” just like something produced by sports teams and athletes. The Trump Token has attracted criticism due to conflicts of interest. Among other concerns, Trump Owns one of the entities that collect transaction fees. Alexander believes that the coin’s motivation is simple. “It just shows that he can do this,” she says. “He can do whatever he likes and he knows that.”
Scottie Pippen is once again leveraging his NBA legacy to venture into the world of cryptocurrencies with hopes of becoming a world champion in this space.
Back in his prime, Pippen was content playing the role of Robin to Michael Jordan’s Batman. However, recent events such as the Netflix documentary “Last Dance” and the publicized issues with his ex-girlfriend and the play of Jordan’s son have left him bitter about playing second fiddle and questioning the significance of the 1990s NBA dynasty. This has led him to contemplate whether there was room for another hero.
Pippen’s recent social media post pondered how many championships Elon Musk would have won, accompanied by an image of Musk in a Bulls jersey in a basketball setting. This post garnered significant attention and was a strategic move to draw attention to his latest project – a new virtual currency aimed at tokenizing the basketball used in the Bulls’ victory over the Lakers in one of their six championships.
Cryptocurrencies have made a significant impact in the US sports world, with stadiums, jerseys, and equipment adorned with various coin logos. Athletes are also jumping on the crypto bandwagon, endorsing and promoting the industry. However, caution is advised, as seen in cases like Spencer Dinwiddie who tried to tokenize his contract but faced setbacks when the NBA intervened.
The rise and fall of certain cryptocurrency platforms like FTX caution against blindly endorsing such ventures. Athletes like Stephen Curry, who promoted FTX, ended up embroiled in legal issues post the platform’s collapse due to alleged financial malpractice. This highlights the risks involved in associating with cryptocurrencies without proper understanding.
Despite the risks, Pippen remains undeterred in his crypto endeavors and aims to create a community around his new project. While some criticize his enthusiasm, others believe in his vision. As the crypto sports campaign gains momentum, Pippen’s involvement adds a touch of nostalgia and excitement to the evolving landscape.
The attention economy can be likened to a phenomenon involving a social media-created celebrity named “hawk tua girl” Hayley Welch. She played a pivotal role in the launch of a cryptocurrency asset named Hawk Memecoin, which quickly gained enormous traction before facing backlash.
Initially valued at $490 million (£385 million) on December 4, the Hawk Memecoin has now exceeded its market capitalization and is valued at $17 million. Welch, a Tennessee native, rose to fame after responding to provocative interview questions but faced criticism for allegedly deceiving her social media followers.
Critics like cryptocurrency commentator Steven Findeisen, also known as Coffeezilla, labeled Hawk’s launch as a “rug pull,” which involves hyping a crypto project for short-term gains and then abandoning it. Despite the controversy, Hawk Memecoin is still being traded, with Welch stating that her team has not sold any tokens.
The rise of meme coins like Hawk reflects the growing trend within the cryptocurrency market, with meme coins collectively valued at $118 billion compared to $20 billion at the start of the year. These coins flood the market, with platforms issuing thousands of tokens daily.
Experts argue that meme coins lack fundamental value and are merely tied to digital trends. Memecoins blend the essence of memes and cryptocurrencies, leveraging social media attention to drive speculation and investment.
Meme coin trading often revolves around internet trends and influencer endorsements, creating a speculative environment with unpredictable outcomes. Participants acknowledge the speculative nature of memecoins, likening their trading to gambling but with the potential for significant returns.
Bitcoin’s value surpassed $100,000 for the first time a month after President Trump’s victory. Photo: Kevin Wurm/Reuters
Bitcoin has surpassed $100,000 for the first time, reaching a new high amid a euphoric surge triggered by President Donald Trump’s election win.
The largest and most valuable cryptocurrency in the world, known for its market volatility, has been on the rise in recent weeks due to expectations of a new era of deregulation and supportive policies under the incoming administration.
On Wednesday, it hit a record high of $103,619, marking a 45% increase since Election Day. Other cryptocurrencies are also experiencing similar gains.
“We are witnessing a paradigm shift. After four years of political purgatory, Bitcoin and the entire digital asset ecosystem are about to enter the financial mainstream,” said Mike Novogratz, founder and CEO of Galaxy Digital, a US cryptocurrency company.
“This momentum is driven by institutional adoption, advancements in tokenization and payments, and a clearer regulatory path,” he added.
President Trump has nominated crypto lobbyist Paul Atkins to lead the Securities and Exchange Commission (SEC), signaling a more favorable stance towards cryptocurrencies.
“Congratulations Bitcoiners!!! $100,000!!! You’re welcome!!! Together we will make America great again!” President Trump tweeted on his social media platform, Truth Social.
Reaching a six-digit price is a significant milestone for Bitcoin, which was created in 2008 and remains shrouded in mystery surrounding its creator Satoshi Nakamoto.
Supporters see Bitcoin and the broader crypto space as the future of finance, although its volatile valuation and slow adoption for everyday transactions raise concerns.
“Bitcoin surpassing $100,000 signifies changing trends in finance, technology, and geopolitics,” said crypto analyst Justin Danesan based in Hong Kong.
“People who were once considered fantasy now exist in reality,” he added.
Trump, who once called Bitcoin a “scam,” has shifted his stance to a more supportive position, touting it as a symbol of free trade and innovation.
Atkins, the former SEC commissioner and crypto advocate, is seen as bringing a fresh perspective to digital asset regulation in the US.
“Atkins’ familiarity with the digital asset ecosystem can lead to new opportunities for US cryptocurrency innovation,” said Kristin Smith, CEO of the Blockchain Association.
Cryptocurrency stocks are on the rise alongside Bitcoin prices, with companies like MicroStrategy heavily investing in Bitcoin.
Trump has also announced his own virtual currency venture, World Liberty Financial, showing growing support for cryptocurrencies.
MIles, a 37-year-old NHS doctor from London, has been trying to convince friends to buy cryptocurrencies for years. In recent weeks, the “Trump pump” on crypto prices has made them envious. “They watched in frustration as my gamble paid off,” he says.
Despite cashing out around £600,000 to buy a house earlier this year, Miles’ crypto portfolio is now worth £2.3 million. Miles, who invested £4,000 in Bitcoin in 2012, said: ‘It’s defined my life. My pot fluctuates by hundreds of thousands every day and I’ve been through periods of volatility over the years.” he says.
A number of Miles told the Guardian why they became private investors in cryptocurrencies (regular people who buy digital blockchain currencies) and how their investments have paid off over time. I was one of ten people.
Investors see Donald Trump’s return to the White House as a harbinger of a crypto-friendly climate. Photo: Mark Humphrey/AP
Bitcoin’s price has fallen to $97,000 (76,500 sterling) and hit a new all-time high. The Financial Conduct Authority (FCA) has revealed that 12% of UK adults own cryptocurrencies.
The majority of respondents said they entered the crypto market within the past four years, with some using the extra funds they saved during the coronavirus lockdown to jumpstart their previous blockchain currency acquisition process. Some people also purchased coins via user-friendly apps and platforms.
A large number of middle-class respondents lost faith in the existing system and turned to cryptocurrencies in the hope that it would help them achieve life goals such as having children, buying a home, and traveling. He said that he aimed at
Julian, a 57-year-old draftsman, homeowner, and father of four from Nottingham, was one of several respondents who said they bought Bitcoin in anticipation of a spike in inflation.
After Donald Trump’s statement this past weekend that he would stop targeting the cryptocurrency industry if re-elected, Bitcoin surged to its highest price in over six weeks.
On Monday, the price of the cryptocurrency increased by more than 3%, reaching a peak of around $69,745, marking its highest value since June 12 when it surpassed $69,800.
Trump made supportive remarks at the Bitcoin 2024 convention in Nashville, Tennessee, declaring his intention to make the United States a global leader in cryptocurrency and adopt a more pro-Bitcoin stance compared to his opponent, Sen. Kamala Harris.
The former president assured the Bitcoin community that if he takes office, the current anti-cryptocurrency initiatives by Joe Biden and Kamala Harris would come to an end. He emphasized the importance of embracing cryptocurrency technology to prevent other countries like China from dominating.
Trump also vowed to remove the chairman of the Securities and Exchange Commission (SEC) on his first day as president, specifically targeting Gary Gensler, who has been critical of cryptocurrencies despite past endorsements.
At the Bitcoin Conference, Trump proposed the creation of a Presidential Cryptocurrency Advisory Council and the establishment of a national Bitcoin reserve using confiscated cryptocurrency held by the U.S. government.
Echoing his support for Bitcoin, Trump advised against selling the cryptocurrency, promising to retain all Bitcoin owned or acquired by the U.S. government if elected.
According to the Financial Times, Harris’ advisors have been reaching out to major crypto companies to mend relations between the Democratic Party and the cryptocurrency industry, including Coinbase, Circle, and Ripple Labs.
A former director of Blockchain Global, an Australian cryptocurrency company that went bankrupt and owed creditors $58 million, has been banned from leaving the country.
The Australian Securities and Investments Commission secured an interim travel ban in the Federal Court on February 20, claiming director Liang “Alan” Guo was a flight risk.
Mr. Guo, a Chinese national, was ordered to hand over his passport to the court.
The hearing was held in Guo’s absence, so he did not have an opportunity to respond immediately to the verdict.
Mr Guo, along with fellow directors Sam Lee and Ryan Hsu, were referred to ASIC by the liquidator for alleged breaches of company law. ASIC is investigating the allegations.
Mr Lee and Mr Xu were also involved in a cryptocurrency investment scheme known as HyperVerse, which was the subject of a Guardian Australia investigation and which defrauded investors around the world of US$1.89 billion. It is said that Guo is not believed to be involved in the HyperVerse project.
Mr Lee, who currently lives in Dubai, is facing charges in the US for his involvement in the Hyperverse scheme, which the US Securities and Exchange Commission has described as a “pyramid scheme and pyramid scheme”. He has not responded to the charges.
In a Federal Court judgment released on Wednesday, Mr Justice Button said the charges against Mr Guo were “very serious” and agreed to ban him from leaving Australia until August 20.
These included allegations of transferring investor funds for personal gain.
“ASIC also revealed that while Mr. Guo was a director, he transferred $2.6 million from the bank account where investor funds were held, with some of the money being applied to his personal mortgage account and personal bank account. “It was also pointed out,” the judgment said.
“ASIC also revealed that Mr. Guo held 23.11 Bitcoins, said to be worth approximately $1.8 million, owned by Blockchain Global and transferred them to a virtual currency wallet controlled by Mr. Guo on December 8, 2019. He also mentioned that he had done so.”
ASIC said Mr Guo was “the only person left in Australia closely involved in Blockchain Global’s operations” given that Blockchain Global’s other directors left Australia shortly after the bankruptcy. He claimed that there was.
“ASIC anticipates that the interviews and interrogations of Mr. Guo will be critical to the progress of the investigation, and as a result, we anticipate that brief evidence may be forwarded to the Director of Federal Public Prosecutions.'' the judgment stated.
According to the ruling, ASIC expects it will take 12 months to investigate and submit a summary of the evidence to the DPP.
Among his reasons, Mr Button commented on apparent delays in the investigation into ASIC, which was launched on January 16 following Guardian Australia’s investigation into HyperVerse.
“It is not clear why an investigation was initiated when Blockchain Global failed. Nevertheless, the investigation, although in its early stages, is progressing steadily.”
ASIC said in a statement that it applied for the travel restriction order “out of concern that Mr. Guo may leave the country while the investigation continues.”
“As the hearing took place in Mr. Guo’s absence, Mr. Guo has not yet had the opportunity to respond to ASIC’s application or the basis on which ASIC asserts that the order is necessary.”
Mr Guo has so far not responded to Guardian Australia’s questions about the allegations against him in the liquidator’s report submitted to ASIC.
The U.S. government has halted an investigation into a cryptocurrency mining operation over its rising energy use following a lawsuit from an industry accused by environmental groups of fueling the climate crisis.
A federal judge in Texas granted an interim order blocking new requirements to verify cryptocurrency miners’ energy use, stating that the industry would suffer “irreparable harm” if forced to comply.
The U.S. Department of Energy launched an “emergency” initiative last month to examine the energy usage of mining operations, which use computational power to mine currencies like Bitcoin.
The growth of cryptocurrencies and mining activities has led to a surge in electricity usage, with data centers popping up and even reviving coal-fired power plants for mining operations.
The federal government requires more information on big miners’ electricity use, as mining facilities provided a significant portion of total U.S. electricity demand last year. Globally, cryptocurrency mining is responsible for a notable portion of energy consumption.
Campaigners warn that the increased electricity consumption from cryptocurrency mining exacerbates the climate crisis, with mining operations releasing significant amounts of carbon dioxide each year.
Cryptocurrency mining is straining power grids, with instances of Bitcoin companies receiving energy credits to reduce power usage during peak demand periods.
The industry has managed to avoid an investigation it deems burdensome, citing political motives from the government. The debate continues on the regulation of cryptocurrency mining in the U.S.
The Blockchain Council of Texas and other groups argue that the government’s actions are aimed at limiting or eliminating Bitcoin mining in the U.S., causing concerns for the industry and its employees.
George Osborne has been hired by Coinbase, a U.S. cryptocurrency exchange operator that is facing an intense legal battle with U.S. regulators.
The San Francisco-based company announced Wednesday that it has appointed the former British Prime Minister to its advisory board and will “lean on his insight and experience as we grow Coinbase around the world.”
Mr. Osborne’s appointment will be to the Securities and Exchange Commission (SEC). suing coinbase, accused it of acting as an intermediary in cryptocurrency transactions while circumventing disclosure requirements meant to protect investors. The company disputes this claim and is fighting it in court.
This is the latest in a series of high-paying jobs Mr Osborne has held since leaving government in 2016. At one point, Mr Osborne had nine jobs, ranging from newspaper editing and financial management to providing guidance and advice to the government on leveling the North of England.
Osborne left some of his work behind when he joined boutique investment banking advisor Robbie Warshaw as a partner in 2021. Mr Osborne last year collected part of his £28m remuneration for his work at the company. His salary at Coinbase has not been disclosed.
“There is a tremendous amount of exciting innovation happening in the financial industry right now,” Osborn said of his appointment to Coinbase. “Blockchain is transforming financial markets and online transactions. Coinbase is at the forefront of these developments. I look forward to working with the team as we build a new future for financial services.”
Faryar Shirzad, Chief Policy Officer at Coinbase, said: “We are delighted to welcome George to our Board at an exciting time for us both in the UK and globally.”
“George has extensive experience in business, journalism, and government. We look forward to relying on his insight and experience as we grow Coinbase around the world.”
Osborne’s other current jobs include: Chairman of the Northern Powerhouse Partnership. Chair of the British Museum. “Distinguished Visiting Scholar” at the Hoover Institution. He is a visiting professor at Stanford University’s Graduate School of Business, where he teaches a course on decision making. He is chairman of Lingotto Investment Management, the $3 billion investment fund of Italy’s billionaire Agnelli family’s Exor Group, which owns large stakes in Juventus FC, The Economist and Ferrari.
The HyperVerse cryptocurrency scheme targeted investors in developing countries in Asia, Africa, and the Pacific until it eventually collapsed, leaving many people unable to access their funds.
One investor said that in Nepal, some people who took out bank loans to buy Hyperverse packages felt suicidal when they could not withdraw their money, and in some cases even committed self-harm. .
The promoter of UK-based HyperVerse, which toured five African countries in 2022, told a Ghanaian radio station that millions of people around the world are trying to understand blockchain technology “without really understanding it.” He said he has benefited from it.
HyperVerse, which was linked to a previous scheme known as HyperFund, was founded by Australian blockchain entrepreneur Sam Lee and his business partner Ryan Hsu, two of the founders of bankrupt Australian company Blockchain Global. ) was launched by.
Despite one overseas regulator warning that they could be a “scam” and another calling HyperVerse a “suspected pyramid scheme”, a Guardian Australia investigation found , revealed widespread losses from a scheme that escaped regulator warnings in Australia.
This push to expand the system, which encourages existing member states to reap financial rewards for bringing in new members, has resulted in the system spreading to hitherto untapped markets, including developing countries. It seems so.
In January 2022, the Central Bank of Nepal issued a public warning naming Hyperfund and several other unrelated schemes, encouraging people to participate in such cryptocurrency products with the promise of “high returns in a short period of time.” He said he was tempted to do so.
In a February 2023 Zoom meeting between Nepali Hyper members and Lee, the members said people were angry because they could not withdraw funds from the platform.
One member told Mr Lee that he was “sad and grumpy” and was fielding requests from people who didn’t have access to the funds he brought into the scheme.
“We really need to do something fast, you may be somewhere far away and you may not be under direct pressure, but people like us, we don’t live in the neighborhood. And our relationship has deteriorated, and whenever we do something, it’s people like us. We wake up in the morning and there’s people at the door.”
Q&A
How did the HyperVerse investment scheme work?
show
Investors were offered “membership” to HyperVerse, a “blockchain community” where members could “explore the HyperVerse ecosystem.”
The minimum membership amount is USD 300, which will be converted into Hyperunits after investment.
This scheme offers a minimum return of 0.5% per day, with a return of 300% in 600 days.
Members were encouraged to “reinvest” their earnings and were provided with more Hyper Units if they did not withdraw after funds became available.
Members were also paid hyper units for recruiting new members, and were paid a referral fee on a sliding scale based on the number of people recruited. Additional commissions were paid based on the number of people these recruits subsequently recruited up to the 20th level.
Hyperunits are linked to various crypto tokens and, once matured, can be withdrawn and converted into other cryptocurrencies.
While early investors were able to make profits and withdraw money, this system has left many investors unable to access their funds.
A Nepalese man living in the UK told Lee that some people in his home country try to commit suicide by taking out bank loans to buy the Hyperverse package, and one of his acquaintances has committed self-harm. That's what he said.
“There have also been instances where people have lent money to buy this company's packages because they were presented in such a favorable way. We know it's wrong, we urge them to do so. But…the benefits outweighed the risks, so people took out some loans from banks and packaged this project. I bought it,” said a Nepali man.
“I don’t want to name names, but there was a case of self-harm in my hometown. [in Nepal]. We have received several SOS calls. With people in this situation, it is better to take a suicidal step than to wait for this company to come up with a repayment plan. ”
In response, Mr Lee said on a Zoom call that he hoped vulnerable people would be prioritized in recovering their initial investment, but denied he was responsible.
“I don't want to say anything about these individual incidents because I'm not in a position to empathize with them. But, you know, we just have to recognize…others Many industries have been misunderstood, and this is just the newest industry to be misunderstood,” Lee said.
“And the way to prevent something like this from happening again is that we need to increase everyone's literacy about technology and how these opportunities work.”
Sam Lee, one of the founders of the failed blockchain global cryptocurrency exchange. Photo: Blockchain Global/Facebook
Lee blamed the situation on the “corporate” team behind HyperVerse.
Despite speaking at HyperVerse's official launch, he denied any involvement in HyperVerse, saying he was only involved in the fund management side through his role at HyperTech Group, of which he is chairman.
Another person who attended the February 2023 meeting challenged Mr. Lee on this claim.
“Community leaders have always projected you as a Midas-esque figure – HyperTech, HyperVerse, HyperFund, whatever, it’s Sam Lee, it’s Sam Lee, it’s Sam Lee, that’s what we do every day. Everything you’ve been told every day,” they said. Said.
In response, Lee said, “If you don't get involved, you can't completely disappear from HyperVerse.”
“The company put out misleading information, which of course management used to drive sales, so ultimately the company loses out. But I am 100% “It's not free, because if things were misunderstood, they could have always issued a press release or a statement to clarify,” he said.
A federal judge in Manhattan on Wednesday accused Coinbase and U.S. securities regulators of disagreements over whether digital assets are and are not securities in a case closely watched by the crypto industry.
Coinbase opposed classifying cryptocurrencies as securities, arguing that digital coins are like Beanie Babies and more like collectibles than company stock.
“There’s a difference between buying Beanie Babies and buying Beanie Babies,” said William Savitt, a lawyer for Coinbase.
Coinbase has asked a court to dismiss a Securities and Exchange Commission lawsuit alleging that the largest U.S. cryptocurrency exchange is selling unregistered securities in defiance of regulations.
The SEC countered this argument by arguing that purchasing the token amounted to acquiring the issuer’s company.
The SEC argued that the crypto tokens at the center of the lawsuit support larger “companies” and are akin to investment contracts.
“When they buy this token, they are investing in the network behind it. You cannot separate one from the other. As the value of the network or ecosystem increases, [associated] It’s a token,” SEC attorney Patrick Costello said.
Judge Katherine Polk Failla heard arguments from both sides on Wednesday, focusing her questions on case law defining what securities regulators consider investment contracts and the attributes of some crypto tokens traded on platforms such as Coinbase. did. Failla said he was still considering several questions after a hearing that lasted more than four hours and did not decide the issue in court.
The judge’s ruling helps clarify the SEC’s jurisdiction over this area and is likely to impact digital assets. This case is one of many filed by the SEC against the crypto sector. The agency initially focused on companies selling digital tokens, but under the chairmanship of Gary Gensler, it has targeted companies that provide trading platforms, clearing activities, and act as broker-dealers.
The SEC sued Coinbase in June, accusing it of facilitating trades in at least 13 crypto tokens, including Solana, Cardano, and Polygon, which should have been registered as securities.
Although the Securities Act of 1933 outlined the definition of the term “security,” many experts rely on U.S. Supreme Court precedent to determine whether an investment product qualifies as a security. Masu. The key test is whether people are contracted to invest in common companies with the expectation of profit.
Coinbase argued that unlike stocks and bonds, crypto assets do not meet the definition of an investment contract, a position held by the majority of the crypto industry.
SEC lawyers argued that securities are different from buying collectibles like baseball cards or Beanie Babies, citing a 1990s trend in which Americans bought stuffed animals in hopes of rising prices.
“When you buy a collectible item, like a baseball card or some kind of figurine, you’re just buying that item. You’re buying something,” Costello said.
Still, Feira told SEC lawyers that he is “concerned” that the agency is seeking to “expand the definition of what constitutes a security.”
The SEC said buyers of digital assets, even on secondary markets like Coinbase’s platform, are buying tokens as investments similar to stocks and bonds.
However, Coinbase’s lawyers disagreed, pointing out that purchasers of such tokens did not sign a contract giving them the right to receive public corporate profits.
“Let me just say this: I would have been shocked to learn that the investment agreement had nothing to do with the contract,” said William Savitt, a lawyer for Coinbase.
The judge appeared to reject Coinbase’s argument that the case involved the so-called material issue doctrine. This legal principle is based on the Supreme Court’s decision that federal agencies cannot be regulated without specific authorization from Congress.
In its lawsuit, the SEC also targets Coinbase’s “staking” program, which pools assets and charges fees to verify activity on the blockchain network in exchange for “rewards” to customers. The SEC said the program should have been registered with the SEC.
past couple The years have proven to be a tumultuous time for the cryptocurrency industry. As if the spate of failures and bankruptcies of major crypto institutions weren’t enough, the industry has seen many tourist investors walk out the door as the broader macroeconomic situation worsens.
However, the recent surge in interest in cryptocurrencies due to rising prices for Bitcoin and Ethereum is rebuilding momentum, and the next year could see promising valuations for crypto startups. Many people are thinking.
Lidia Chiu, vice president of business development at Ava Labs, said raising capital in 2023 was difficult for both startups and venture capitalists. “On the startup side, we have seen fewer token offerings and valuation corrections,” she said. “VCs also had more leverage to negotiate better terms when taking the initiative than they did in 2021 or 2022. We’re seeing more follow-on and down-round opportunities from teams that have raised in the past few years.” [today]”
The fallout from the 2021 hype is still reflected in the landscape of crypto ventures. “[In] 2021, [there were] Michael Anderson, co-founder of Framework Ventures, entered the field at the top but was funded by traditional Silicon Valley venture capital firms that had no idea what they were doing. He said an outlandish valuation was set with a number of terrible ideas. He added that 2022 will see a “complete reorganization” of the crypto venture capital deck, with “many tourism VCs exiting and weak portfolio investments being drained.”
The tough funding environment in 2023 will only weed out weaker companies that were able to secure capital in 2021. Mark Bhargava, managing director at General Catalyst, said much of the dry powder from the good times survived into this year.
Mr Anderson added that the ratings were “back to reality”.
Then, when FTX collapsed in November 2022, many funds, including those focused on web3, “put the brakes on new deals,” said New Form Capital’s founder and general partner. Alex Marinier said.
“I think everyone expected venture funding to dry up in 2023, and that’s what happened,” said Will Nuell, general partner at Galaxy Ventures. “Funding in the crypto and blockchain venture market has returned to levels not seen since 2020.”
“In 2023, most people seem to have finally gotten the message that we are in a new market and the investor class is thinking and acting more rationally than before,” Anderson said.
Early-stage deals are declining, but not closing
Flat or discounted valuations were not uncommon for the broader tech industry in 2023, so it’s surprising that more beleaguered crypto startups also had to suffer significant haircuts. It wasn’t the right thing to do. Nuel said valuations have varied and competitive rounds are still receiving “stomach-churning” multiples, but success in getting a raise is preordained, just as it was 18 months ago. That is no longer the case.
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If you’re feeling the holiday spirit this month, you’re probably aligning yourself with the millions of people who are spreading joy, love, warmth, and even generosity.
But if you’re feeling like the Grinch, you’re probably joining a smaller group of individuals, one that may (in this analogy) include crypto hackers. there is.
Even though it’s a fun season, hackers haven’t stopped. But hey, playing devil’s advocate, the attackers may be overjoyed every time someone falls for their scam. Two sides of the coin.
Earlier Thursday, hackers breached the code behind the cryptographic protocols used by multiple Web3 applications and services, crypto software and hardware wallet maker Ledger announced Thursday.
It was not immediately clear how many people were victims of the hack. ZachXBT, a well-known independent crypto researcher, wrote to X that one of the victims had over $600,000 in crypto assets leaked from his account.
Please see below for details.
what is happening in web3
Users hacked in supply chain attack targeting Ledger cryptocurrency wallets
Bitcoin ATM company Coin Cloud has been hacked. Even the new owners don’t know how.
Worldcoin adds integration with Minecraft, Reddit, Telegram, Shopify, Mercado Libre
Korus, a startup founded by Deadmau5, uses AI to create music
latest pod
this week's episode, Jacqueline We interviewed Johan Kerblatt, General Manager of Cryptocurrency at Robinhood.
Johan is leading applications efforts to grow the cryptocurrency exchange business and make digital assets more accessible to retail investors.
Before joining Robinhood, Johan was an engineer at Airbnb, served as Head of Engineering at Uber and VP of Engineering at privacy-focused crypto startup Iron Fish.
We discussed Robinhood's expansion outside the US, how the platform restricted holdings and trading of certain crypto assets in June, and the current situation.
We also discussed:
appeal to mainstream audiences
Grow your cryptocurrencies on the platform
Regulatory concerns
Robinhood’s 2024 Goals
apply Chain reaction upon apple podcast,spotify Or catch up on the latest episodes using your favorite pod platform. If you like what you hear, please leave a review.
follow the money
Line Next secures $140 million in funding for its Web3 platform
Lolli raises $8M in Series B to expand Bitcoin and cashback benefits to businesses
Andalusia Labs raises $48 million in Series A to improve risk infrastructure for digital assets
Dynamic raises $13.5 million from a16z cryptocurrency and Founders Fund for easy access to Web3 and cryptocurrency wallets
Avalanche-based Nodekit raises $1.2M in pre-seed round to build rollup-focused network
This list was compiled using information from Messari and TechCrunch's own reporting.
what else are you writing?
Ready to step outside the world of Web3? Here are some TechCrunch articles that caught our attention this week.
Mr. Tem’s latest lawsuit against Shane is wild (TC+)
OpenAI believes superhuman AI is coming and wants to build tools to control it.
AI is not evil and will not get smarter any time soon, but it is also irreversibly pervasive.
Here's where founders mess up their pitch decks most often (TC+)
Possible regulations surrounding generative AI (TC+) are on the horizon
Follow us on Twitter @Jacqmelinek Get the latest cryptocurrency news, memes, and more.
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