Category: money

The cryptocurrency exchange FTX owes creditors $3.1 billion, according to court documents filed late Saturday night….

Creditors’ names were not listed on the court filing, but the largest is owed $226,280,579, .

As part of its bankruptcy proceedings, FTX was required to list to the court its 50 largest creditors — either individuals or corporations — who are owed money. The second largest entity is owed $203,292,504, the court filing shows.

A video at the top of the article from ABC News adds that several celebrities “are being sued by a man who invested in the now-bankrupt crypto exchange… The lawyer behind the class claims that FTX was a massive ponzi scheme, only successful because it had a boost from celebrities.”

Meanwhile CNN adds that FTX “owes about $1.45 billion to its top ten creditors, it said in a court filing on Saturday, without naming them.”

The crypto exchange said on Saturday it has launched a strategic review of its global assets and is preparing for the sale or reorganization of some businesses. A hearing on FTX’s so-called first-day motions is set for Tuesday morning before a US bankruptcy judge, according to a separate court filing….

There could be more than 1 million creditors in the US cases that are already filed, FTX Group said, adding that it has been in touch with “dozens” of US and international regulatory agencies including the US Attorney’s Office, the US Securities and Exchange Commission and the Commodity Futures Trading Commission.

Meanwhile, authorities in the Bahamas — where FTX is based — are investigating whether any criminal misconduct occurred related to the company’s implosion, the Royal Bahamas Police Force said in a statement last Sunday. The Bahamian authorities have also taken control of cryptocurrency assets held by FTX Digital Markets, The Bahamas-based FTX unit that filed for Chapter 15 bankruptcy protection Tuesday.

“MyFitnessPal is obviously looking to maximize profits, but if the popular r/loseit subreddit is any indication, many users may consider switching to competing apps like Cronometer, Loseit, or Macros over this loss.”

The Saudi crown prince also unveiled funding details of Neom. First phase, which runs until 2030, will cost 1.2 trillion riyals, with about half of that covered by the Public Investment Fund. Officials will then seek to raise another 600 billion riyals from other sovereign wealth funds in the region, private investors in Saudi Arabia and abroad, and the planned IPO on Tadawul. The IPO, which could happen by 2024, will add more than 1 trillion riyals to the Kingdom’s stock market, the crown prince noted. In addition to the news about the IPO, a teaser video was released, revealing the design for The Line: a “vertical city” some 500 meters tall, 170 kilometers in length, and covered in mirrors.

“Although it looks like a wall, The Line is actually supposed to be comprised of two huge parallel buildings, connected via walkways and divided into neighborhoods that are supposed to offer all the amenities of city life within a five-minute walking distance,” reports The Verge.

“Vegetables will be ‘autonomously harvested and bundled’ from community farms; ‘a high-speed train will run under the mirrored buildings’; the Line will include a stadium ‘up to 1,000 feet above the ground,’ and there’ll be a marina for yachts under an arch between the buildings.” A report from the Wall Street Journal in 2019 also noted robots will outnumber humans and hologram teachers will education genetically-enhanced students.

Amazon blamed the price rises on “increased inflation and operating costs,” along with higher expenses tied to faster delivery and content production for its Prime Video streaming service, Reuters reported. The company is scheduled to report second-quarter earnings Thursday. The move follows similar price hikes Amazon announced in the U.S. earlier this year. In February, the company said it would raise the price of its annual Prime membership for Americans to $139 from $119.

The weaker consumer demand means DRAM inventories are building up at system vendors and distributors, which means they don’t need to buy as much in the near future. This, in turn, is why memory prices are dropping, the research firm said. On the PC side, DDR4 memory pricing is expected to drop three to eight percent in the third quarter of 2022 after only seeing a zero to five percent decline in the second quarter. DDR5 pricing, on the other hand, is set to drop by only zero to five percent in Q3 after seeing a three to eight percent plummet in the previous quarter. For certain DRAM products, prices could see a steeper decline of more than eight percent, according to TrendForce, though the firm didn’t say which products this would include. TrendForce said PC makers are focused on getting rid of their existing DRAM inventories, and a continuously “sluggish” market means they’ll be reticent to buy much more memory.

In a recent interview in Current Affairs he promulgates what he calls Weaver’s Iron Law of Blockchain. “When somebody says you can solve X with blockchain, they don’t understand X, and you can ignore them.” So for those pushing cryptocurrency for “Banking the unbanked,” Weaver points to M-Pesa, a payment system Vodafone started in Kenya in 2007 “about the same time as Bitcoin…”
It has eaten the Third World. It’s huge. Because it just basically attaches a balance to your phone account. And you can text to somebody else to transfer money that way…. So even with the most basic dumb phone you have easy-to-use electronic money. And this has taken over multiple countries and become a huge primary payment system. [Whereas] the cryptocurrency doesn’t work.”
Weaver also contends that when companies say they accept payments in Bitcoin, “They’re lying.” (They’re using a service which pays them in “actual money” after performing conversions on any Bitcoin proferred-up by a customer.) He believes cryptocurrency is only seriously used for payments for ransomware and drug deals — the things that non-decentralized currencies are legally obligated to block.

The reason I’ve gotten so sour on the cryptocurrency space is the ransomware. It’s doing tens to hundreds of billions of dollars worth of damage to the global economy. And it only exists because people can pay in Bitcoin.

Weaver also believes cryptocurrency lets venture capitalists “carry out securities fraud as a business model” when they sell one of their startup’s tokens to retail investors.
This is blatantly an unlicensed security. This is blatant securities fraud, but they didn’t commit the securities fraud. It was just the companies they invested in that did the securities fraud, and the SEC has not been proactively enforcing this. They only retroactively enforce against the initial coin offerings after they fail…. and when things fail, the only people to prosecute are the companies, not Andreessen Horowitz itself. So they’ve been able to make securities fraud a business in such a way that they are legally remote, so you will not be able to throw them in jail….
The SEC has the authority to stop those proactively rather than reactively. They choose not to…. Basically, there’s a fear among regulators — that I think started in the ’80s — of being accused of “stifling innovation.” There’s no innovation to stifle. So regulate away.

He’s also skeptical of cryptocurrency’s other supposed advantages. Weaver argues cryptocurrency incentivizes green power “the same way that a whole bunch of random shootings would incentivize bulletproof vests.” And even as an investment vehicle, Weaver sees it as “a self-created pyramid scheme.”
[Y]ou have to keep getting new suckers in. As soon as the number of suckers dries up, it collapses. And because it’s not zero-sum, but deeply negative-sum, there are actually a lot of mechanisms that can cause it to collapse suddenly to zero. We saw this just the other day with the Terra stablecoin and the Luna side token.
So when asked for the future of cryptocurrency, Weaver predicts “It will implode spectacularly.” (By which he means it will “collapse greatly.”)

The only question is when. I thought it would have actually imploded a year ago. But basically, what we saw with Terra and Luna, where it collapsed suddenly due to these downward positive feedback loops — situations where basically the system is designed to collapse utterly and quickly — those will happen to the larger cryptocurrency space….
[T]he Washington Nationals just the other day started doing a lot of tweets for their business relationship with Terra. That was $5 million for five years prepaid in advance in cash. So for the next five years, the Washington Nationals are obliged to hype a cryptocurrency that failed spectacularly already.

Thanks to Slashdot reader sdinfoserv for sharing the article…

“In the ruling, the judge called cryptocurrency’s reputation for providing anonymity to users a myth.”
He added that while some legal experts argue that virtual moneys such as bitcoin, ethereum or Tether are not subject to U.S. sanctions laws because they are created and move outside the traditional financial system, recent action taken by the Treasury Department’s Office of Foreign Assets Control [OFAC] require federal courts to find otherwise.

“Issue One: virtual currency is untraceable? WRONG … Issue Two: sanctions do not apply to virtual currency? WRONG,” Faruqui wrote…

“The Department of Justice can and will criminally prosecute individuals and entities for failure to comply with OFAC’s regulations, including as to virtual currency,” Faruqui said. In the opinion, Faruqui wrote that he adopted guidance issued in October by OFAC, which stated that sanctions regulations apply equally to transactions involving virtual currencies as those involving the U.S. dollar or other traditional fiat currencies.

Ari Redbord, who served in 2019 and 2020 as a senior adviser to the Treasury Department’s undersecretary for terrorism and financial intelligence, called the case the first U.S. criminal prosecution targeting solely the use of cryptocurrency in a sanctions case. He said the ruling made clear such conduct is traceable and “immutable — in other words, transactions using cryptocurrency are forever…. What we are seeing is that the Department of Justice is going to actively go after actors that attempt to use cryptocurrency, but also that it is hard to use cryptocurrency to evade sanctions,” Redbord said. “It shows, in many respects, cryptocurrency is not a good tool for sanctions evasion or money laundering.”

In this case, The Register reports, “An unnamed American citizen allegedly used a US-based IP address to run an online payments platform” in a sanctioned country.

The service advertised itself as being “designed to evade US sanctions” and claimed its transactions were untraceable, it was alleged. We’re told the defendant bought and sold Bitcoin using a US-based online currency exchange using fiat currency from a US bank account.

The Post argues that this prosecution represents “a new U.S. criminal sanctions enforcement push targeting cryptocurrency transactions at a time of rising concern over the extent to which illicit actors can use or are using such methods to launder money or do business with countries the United States has cut off from the dollar…”

“The price on Venus was last listed at about $0.107 while the market price was $0.01. In order to de-risk this situation, the protocol was paused using PauseGuardian via multisig. Upon this desyncing event, it was discovered that 2 accounts had suspiciously deposited a sum of 230,000,000 LUNA valued at over $24,000,000. Assets were borrowed totalling around $13,500,000.”

Venus Protocol has a “Risk Fund” that will be used to cover the shortfall, the Record reports. But they added that Venus Protocol wasn’t the only one having problems:

As the price of Luna cratered overnight, exchanges and markets were forced to make difficult choices on how to approach the cryptocurrency. Binance stopped all trading of Luna and UST on its platform but the moves have done little to stop all cryptocurrency values from being depressed across the board.

DeFi platform Blizz Finance announced that it was attacked in the same way Venus Protocol was, but they did not release an estimate on the losses incurred. But they said the protocol was “drained” before it could stop the process.

And then Blizz Finance posted a post-mortem early Sunday morning:

Large amounts of LUNA were deposited and used to drain all available lendable assets… Prior to the incident the Chainlink team did attempt to notify us that the oracle would pause, however we did not receive the message in time. We were unaware of Chainlink’s minimum price circuit breaker. This behaviour is not mentioned anywhere within Chainlink’s documentation…

Blizz has no treasury or development fund and a significant portion of the stolen assets belonged to our team. As such we regret to announce the protocol has been paused and we do not intend to resume operations. We will be shutting down the front-end and closing official communication channels in the coming days….

We are very sorry for the losses incurred by our users. We thank the community for their support on this journey and deeply regret that this is how it came to an end.

They posted one additional detail on Twitter. “We are reaching out to a Chinese community who is believed to have doxxed individuals who participated in the attacks.”

But the government has taken other actions:

After a dramatic spike in killings here over a single weekend last month, Salvadoran President Nayib Bukele’s reaction was swift — and extreme. He sent soldiers into poor neighborhoods to round up thousands of people who he claimed were gang members, then paraded them in front of news cameras in their underwear and handcuffs.
He tweeted pictures of detainees who had been bruised and bloodied by security forces, suggesting they “maybe fell” or “were eating fries with ketchup.” And he started feeding the nation’s prisoners two meals a day instead of three, warning that if violence continued, “I swear to God that they won’t eat a single grain of rice.”

It is a distinct look for Bukele, who has been focused in recent months on presenting himself to the world as a modern tech innovator on a quest to turn El Salvador into a cryptocurrency paradise. Not only is Bukele now embracing the mano duro techniques of past Latin American leaders, he is going much further, using the homicide spree — which left 87 people dead in three days — as a pretext for suspending civil liberties and attacking the press.

In recent days, Bukele and his loyalists in the Legislative Assembly ordered a state of emergency that restricts freedom of association, suspends the norm that detainees be informed of their rights at the moment of arrest and denies prisoners access to lawyers….

That Bukele would use the spate of homicides as a pretext to further consolidate power is no surprise to many of his critics, who believe he may be preparing to stay in office past 2024, when he is supposed to step down, even though El Salvador’s constitution bans consecutive presidential terms.

But they also say that there may be another motive for his new tough-on-crime stance: diverting attention from the deepening failure of his cryptocurrency experiment.

The IMF surveyed more than 110,000 respondents in over 55 countries, polling between 2,000 and 12,000 people in each country, about their cryptocurrency use….
“Crypto usage is empirically associated with higher perceived corruption and more intensive capital controls,” the study’s authors write. “[…] This evidence adds to the case for regulating crypto usage — for example, by requiring intermediaries to implement know-your-customer procedures.”

Bloomberg adds:
The report shows why countries might want to require intermediaries, such as digital currency exchanges, to implement know-your-customer procedures — ID verification standards that are designed to prevent fraud, money laundering and terrorism financing, the organization said. Some countries, like the U.S., have already instituted those kinds of controls.

Nations around the world are struggling over the best way to regulate the $2 trillion crypto market, with the level of oversight varying greatly from one country to another. The findings suggest that crypto assets “may be used to transfer corruption proceeds or circumvent capital controls,” the organization said, without singling out individual countries.