Genesis to file for bankruptcy amid ‘major’ US cryptocurrency move – live
Crypto Outlook at The World Economic Forum
Cryptocurrency firm Genesis Global Capital is planning to file for bankruptcy as early as this week, Bloomberg reported today.
The bankruptcy filing has been expected since the November fall of the FTX cryptocurrency exchange.
Meanwhile, the US Justice Department has announced that Anatoly Legkodymov, the Russian operator of the China-based crypto exchange Bitzlato, has been arrested. Bitzlato was a crypto exchange that allegedly worked with the darknet blackmarket Hydra Market, which dealt in illicit trade and served as a safe haven for ransomware attackers, according to the DOJ.
The US Justice Department issued a vague statement on Wednesday that it would “announce a major, international cryptocurrency enforcement action”, and noted that the US Treasury Department would also be making its own statement.
The announcement comes at a time when former FTX crypto exchange CEO Sam Bankman-Fried is facing charges of wire fraud, securities fraud, and conspiracy. The DOJ stressed that criminals using the crypto space for scams and other criminal activity should be aware the agency will use “every tool” to crack down on their activities.
Mr Bankman-Fried’s company – long considered one of the biggest crypto exchanges alongside Binance – declared bankruptcy after allegedly using, and losing, customers’ funds as investment capital.
Influencer Logan Paul lays out roadmap for addressing Crypto Zoo scandal
Influencer Logan Paul announced Tuesday that he had developed a three-step plan for correcting course on his Crypto Zoo NFT game, which fellow YouTuber Coffeezilla alleged was a “scam” in a trio of investigative videos examining the project and the investors who lost money on the seemingly abandoned project.
Paul — who initially threatened to sue Coffeezilla but has since walked that back — said he and Crypto Zoo co-founder Jeff Levin would burn their tokens to ensure they did not have a financial stake in the NFT game project.
He also said he would personally invest 1,000 ETH — approximately $1.5m at its current market price — to refund Zoo token holders the initial mint price of 150 ETH — just over $225,000 at current price — so long as they burn their tokens.
That refund would not repay the investors in Zoo token who sold during the more than a year when the Crypto Zoo project sat dormant.
His third step is to finish the game as it was originally advertised by Paul more than a year ago.
Graig Graziosi19 January 2023 12:00
Indian finance leader tells Davos attendees idea that crypto will thrive while fiat falters is ‘nonsense’
Former Reserve Bank of India Governor Raghuram Rajan told attendees at the Davos World Economic Forum on Wednesday that the notion that cryptocurrencies would thrive while fiat money crashes is “nonsense.”
“The idea that somehow cryptos are going to maintain value, while the fiat currencies collapse. That’s nonsense,” he said.
He later told Reuters’ Global Markets Forum that “fiat currencies have won out in terms of which is more credible.”
Mr Rajan said that the collapse of the cryptomarket in late 2022 has made space to examine the “true value” of blockchain and smart contract technologies.
Graig Graziosi19 January 2023 11:00
Crypto users lambast DOJ over Bitzlato announcement
The crypto market took a dive early on Wednesday after the US Department of Justice announced “enforcement action” related to the cryptocurrency space.
While investors braced for the worst — as reflected in the market dive — the DOJ announced it had arrested the founder of Bitzlato, a Chinese crypto exchange run by a Russian national that dealth with an illicit darkweb market.
Many crypto enthusiasts had never heard of the exchange. Several mocked the DOJ in response.
Another user likened it to a small-town police department celebrating a minor drug bust.
Graig Graziosi19 January 2023 10:00
Genesis Global Capital to file for bankruptcy this week, sources say
Crypto brokerage firm Genesis Global Capital may be preapring to file for bankruptcy, according to a report from Bloomberg.
Citing sources with knowledge of the situation, the outlet reports that the firm is in negotiations with creditors amid a liquidity crunch. Bloomberg previously reported that the company said it may have to file for bankruptcy if it can’t raise the funds to stay afloat.
Genesis suspended withdrawls from its platform in November, shortly after the start of crypto exchange FTX’s collapse.
Graig Graziosi19 January 2023 08:00
Crypto companies scale back Davos visibility after year of losses, scandals
In recent years, crypto companies have dominated the promenade at the Davos World Economic Forum, but this year they appear to have scaled back their visibility, CNBC reports.
With the exception of a lone, flash orange crypto-advertising sports car, crypto company advertisements were reportedly far less prominent this year.
An NFT shop that was selling digital tokens alongside images closed up this year after prices for the assets dropped significantly in 2022.
Cliff Sarkin, chief of strategic relations at Casper Labs, told the outlet that the remaining crypto businesses at Davos are “subtantive projects” and “the real deals.”
Graig Graziosi19 January 2023 07:00
FBI says it will ‘relentlessly’ pursue crypto criminals
FBI Assistant Deputy Director Brian Turner said the law enforcement agency would “relentlessly pursue” criminals acting in the crypto space following the arrest of Bitzlato crypto exchange founder Anatoly Legkodymov.
“The FBI will continue to pursue actors who attempt to mask their criminal activity behind keyboards and use means such as cryptocurrency to evade law enforcement,” he said, according to the DOJ. “We, along with our federal and international partners, will work relentlessly to disrupt and dismantle these types of criminal enterprises. Today’s arrest should serve as a reminder the FBI will impose risk and consequences upon those who engage in these activities.”
Mr Legkodymov, a Russian national living in China, was arrested in Miami on Wednesday.
Graig Graziosi19 January 2023 06:00
Financial leaders at Davos World Economic Forum bash crypto, insist traditional institutions are safe
Several financial leaders speaking at the Davos World Economic Forum made clear they did not trust cryptocurrencies, and insisted to attendees that traditional investment and banking institutions were still safe to use.
Senior Minister Tharman Shanmugaratnam of Singapore said that crypto assets were “slightly crazy,” eliciting a laugh from the audience, according to Iris Market IQ.
UBS Chairman Colm Kelleher said that regulators had faltered in their ability to police “non-bank” entities, which includes cryptocurrencies.
“Regulators have — with respect — taken their eyes off the ball in terms of the non-banking sector,” Mr Kelleher said, according to Reuters.
European Central Bank Governing Council member Francois Villeroy de Galhau agreed, saying “we should rush to some urgent non-bank regulation starting with cryptos.”
Graig Graziosi19 January 2023 04:59
DOJ says Bitzlato head was aware Hydra transactions were illicit, customers were ‘known to be crooks’
The Department of Justice claimed that Bitzlato’s founder, Anatoly Legkodymov, was aware of the illicit nature of Hydra Market transactions, and knew that its users were using false identities while making transactions.
“Bitzlato’s customers routinely used the company’s customer service portal to request support for transactions with Hydra, which Bitzlato often provided, and admitted in chats with Bitzlato personnel that they were trading under assumed identities,” the DOJ said. “Moreover, Legkodymov and Bitzlato’s other managers were aware that Bitzlato’s accounts were rife with illicit activity and that many of its users were registered under others’ identities.”
According to internal chat logs obtained by the DOJ, Mr Legkodymov wrote to a colleague that their customers were “known to be crooks.” Officials at Bitzlato reportedly warned the founder that its users were “addicts who buy drugs [at Hydra]” and “drug traffickers.”
Graig Graziosi19 January 2023 04:00
ICYMI: Crypto market cap hit $1 trillion briefly before diving
Earlier today the crypto market cap touched $1 trillion for the first time since November, just before 2022’s mass sell-off and FTX collapse.
It’s unclear if the drop was the result of the DOJ’s announcement, or due to traders selling at the higher price, or both.
Despite the drop, Bitcoin has remained popular among investors, gaining 30 per cent this year.
Graig Graziosi19 January 2023 03:00
What was ‘Hydra Market’ ?
What was ‘Hydra Market,’ the darknet black market that was one of Bitzlato’s largest customers?
According to the Department of Justice, Hydra Market is “an anonymous, illicit online marketplace for narcotics, stolen financial information, fraudulent identification documents, and money laundering services that was the largest and longest running darknet market in the world.”
“Hydra Market users exchanged more than $700 million in cryptocurrency with Bitzlato, either directly or through intermediaries, until Hydra Market was shuttered by U.S. and German law enforcement in April 2022,” the DOJ wrote. “Bitzlato also received more than $15 million in ransomware proceeds.”
Graig Graziosi19 January 2023 02:00