Daily Archives: January 8, 2022

Pakistanis Lose Millions to Crypto Scam, Pakistan Issues Notice to Binance

Pakistanis Lose Millions to Crypto Scam, Pakistan Issues Notice to Binance

Investors from Pakistan have become victims of a massive fraud using cryptocurrency. The country’s main law enforcement agency has issued a notice to crypto exchange Binance in relation to the scam which resulted in the loss of $100 million dollars for Pakistanis, media reports revealed.

Fraudsters Lure Pakistanis to Invest in Cryptocurrency Through Binance

Pakistan’s Federal Investigation Agency (FIA) has uncovered a crypto investment scam that has allegedly cost Pakistani citizens some 17.7 billion rupees (around $100 million). Providing details on the case, Imran Riaz, director of the FIA cybercrime wing, said on Friday that the organizers used cryptocurrency. Quoted by local media, Riaz announced:

We launched a probe after receiving complaints regarding a fraud involving billions of rupees being committed using nine online applications.

The fraudsters employed mobile apps offering Pakistanis crypto investment opportunities and people sent between $100 and $80,000, or an average of $2,000 per person. Investors were urged to register at Binance, the world’s leading crypto exchange, and transfer the money from the Binance wallet to accounts linked to the applications. On Dec. 20, authorities were contacted by many users who complained that around a dozen apps had suddenly stopped working.

“During the inquiry, it was found that the fraudulent accounts of different applications, namely, MCX, HFC, HTFOX, FXCOPY, OKMINI, BB001, AVG86C, BX66, 91fp, TASKTOK, were linked with Binance wallets,” officials detailed. Each had an average of 5,000 customers. The FIA has issued a notice to Hamza Khan, identified as Binance’s representative for Pakistan, and summoned him to appear in person on Jan. 10.

“The FIA Cyber Crime Sindh has issued order of attendance to Hamza Khan, General Manager/ Growth Analyst at Binance Pakistan (Crypto Currency Exchange) to explain his position on the linkage of fraudulent online investment mobile applications with Binance,” the FIA said, quoted by the Express Tribune and other news outlets. “A relevant questionnaire has also been sent to Binance Headquarters Cayman Islands and Binance US to explain the same,” the agency added in a press release.

Authorities to Keep Close Eye on Pakistani Crypto Transactions

The FIA claims that it has identified 26 wallet addresses at Binance used to transfer the money. “A letter has been written to Binance Holdings Limited to give the details of these blockchain wallet accounts as well as to debit block them,” the agency stated, adding it had also requested supporting documentation and information about the apps’ integration with the coin trading platform.

Noting that Binance is the “largest unregulated virtual currency exchange” where Pakistanis have invested millions of dollars, the FIA warns that in case of non-compliance, its cybercrime unit could recommend the State Bank of Pakistan (SBP) impose financial penalties. It has now started to closely monitor transactions made by Pakistanis on the exchange.

Law enforcement officials are also reaching out to the popular messaging app Telegram as members of the scheme were added to various groups spreading signals on the price fluctuations of bitcoin. The FIA is serving legal notices to social media influencers who have been promoting the apps and taking steps to block all bank accounts linked to the scam.

In December, the Federal Investigation Agency froze over 1,000 bank accounts and cards used by crypto traders from Pakistan. The purchase and sale of cryptocurrencies is still prohibited in the country as per a circular issued by the SBP in April 2018. Despite the ban, a recent report revealed that Pakistanis have invested $20 Billion in crypto assets. Calls have been mounting for the government to regulate related transactions.

Do you expect Pakistan to further restrict crypto investments and trading after this fraud case? Let us know in the comments section below.

Fed’s Outgoing Vice Chair Richard Clarida’s ‘Rebalancing’ Trades Ignite Fed Trading Ethics Scandal

Fed's Outgoing Vice-Chair Richard Clarida’s 'Rebalancing' Trades Ignite Fed Trading Ethics Scandal

Members of the U.S. Federal Reserve are getting criticized this week after the central bank published its minutes report from the policy meeting on December 14-15. Following the update, the outgoing vice chair of the Federal Reserve’s trading activities has reignited ethics conversations.

Richard Clarida’s Trades Under Scrutiny

The U.S. central bank can shake up markets and this was seen earlier this week when the Federal Reserve published last month’s policy meeting update which indicated the Fed’s plans to raise rates and cut back quantitive easing (QE). Not too long after, the New York Times (NYT) published a new disclosure report concerning the outgoing vice chair of the Federal Reserve, Richard Clarida.

NYT author Jeanna Smialek wrote that “corrected disclosures show that Vice Chair Richard H. Clarida sold a stock fund, then swiftly repurchased it before a big Fed announcement.” The reporter further added that “Clarida, the departing vice chair of the Federal Reserve, failed to initially disclose the extent of a financial transaction he made in early 2020 as the Fed was preparing to swoop in and rescue markets amid the unfolding pandemic.”

Trades Executed by Kaplan and Powell Criticized in the Past, Former Obama Administration Ethics Official Calls Clarida’s Trades ‘Peculiar’

It’s not the first time members of the U.S. central bank have been criticized for their trades. Last September, the Wall Street Journal (WSJ) published an article that revealed Dallas Fed president Robert Kaplan “made multiple million-dollar-plus stock trades in 2020, according to a financial disclosure form provided by his bank.” The controversy pushed Federal Reserve chairman Jerome Powell to direct his staff to start an ethics inquiry into the financial activities of Fed members.

Smialek’s report shows that Clarida’s trades are described as “rebalancing” and Clarida called the discrepancies “inadvertent errors.” Peter Conti-Brown, a Fed historian at the University of Pennsylvania told Smialek that the issue with Fed members is “deeply problematic.” Norman Eisen, an ethics official for the Obama administration told the NYT reporter that it was “peculiar.”

“It’s fair to ask — in what respect does this constitute a rebalancing?” Eisen further remarked.

Fed members are being scrutinized a great deal for the trades they did prior to the advancement of Covid-19-related monetary easing policies. Clarida’s trades, in particular, were reportedly settled the day before Powell announced the Fed’s emergency measures to help bolster the economy. The Fed member’s alleged trades have caused politicians like Senator Elizabeth Warren (D-Mass.) to call on the Securities and Exchange Commission (SEC) to investigate the ethical issues.

What do you think about the Federal Reserve members getting scrutinized and criticized this week for their stock trades? Let us know what you think about this subject in the comments section below.

$2.7 Billion in NFT Sales Recorded Last Month — Ethereum, Ronin, Solana Top 3 NFT Networks

This week Google Trends shows that the acronym NFT, which stands for non-fungible token, has reached a score of 100, the highest score a search query can get from the data analytics aggregator. Meanwhile, statistics indicate that during the last 30 days across ten different blockchains, there’s been $2.73 billion in NFT sales.

NFT Monthly Volume Sees Close to $3 Billion in Sales — Axie Infinity, Clonex, MAYC Sales Reign

While the crypto economy has seen a downturn, it’s too early to say whether or not it’s affecting NFT sales. However, monthly statistics show that across ten different blockchain networks including Ethereum, Ronin, Solana, Flow, Polygon, and more, there’s been $2.73 billion in NFT sales.

The collection with the most sales stemmed from the Ronin chain or the Axie Infinity blockchain video game NFT compilation. Over the last 30 days, metrics indicate Axie Infinity saw $219.5 million in sales. Month-over-month, Axie Infinity sales are down 66.51%.

The NFT collection Clonex pulled down $212 million over the last month according to cryptoslam.io metrics and Mutant Ape Yacht Club (MAYC) did $209.1 million in sales. MAYC was followed by Bored Ape Yacht Club (BAYC) with $196.2 million in 30-day sales.

The BAYC collection is followed by Cryptopunks ($144M), The Sandbox ($90M), Doodles ($85M), Prime Ape Planet ($76.4M), RTFKT Clonex Mintvial ($66M), and Adidas Originals ($60.2M).

Ethereum NFT Sales Rule the Roost, Cryptopunk #4156 Sells for $10.2 Million

Out of the top 20 NFT collections in terms of sales, the biggest gainers include the Solana NFT collection Shadowy Super Coder, up 170.46% this month, Bored Ape Chemistry Club, up 212.60%, and ​​Bored Ape Kennel Club, up 159.19%.

Notable collections during the last 30 days in the top 20 include Doodles (+72.50%), RTFKT Clonex Mintvial (+72.83%), and NBA Top Shot (+87.85%). The NFT collection Wolf Game lost 81.02%, Farmers World shed 89.51%, and Neo Tokyo Identities lost 53.05% this past month.

The top blockchain in terms of NFT sales this month is Ethereum (ETH) with $2.3 billion in sales. ETH is followed by Ronin, with $219 million in sales, and Solana captured $109 million in sales this past month.

ETH sales increased 34.41% and Flow sales spiked 87.33%, while the blockchain Polygon’s NFT sales jumped 98.93%. While Ronin sales are down 66.51%, cryptoslam.io stats indicate Solana sales are down 10.31%, Wax blockchain sales slipped 85.07%, and Theta chain NFT sales are down 90.31%.

The most expensive sale this month was Cryptopunk #4156 for $10.2 million and three Mega NFTs sold for between $3.6 million and $5.6 million in ether. Cryptopunk #2681 sold for $3.07 million and Meka #2194 went for $1.8 million this month. The Meka NFT was followed by BAYC #3562 for $1.6 million, Cryptopunk #9953 for $1.57 million, and Cryptopunk #2964 for $1.5 million.

What do you think about the NFT sales during the last 30 days? Let us know what you think about this subject in the comments section below.

Value Locked in Defi Slips 10% in 4 Days, Ethereum TVL Dominates at 58%

Value Locked in Defi Slips 10% in 4 Days, Ethereum TVL Dominates by 58%

Four days ago, the total value locked (TVL) in decentralized finance (defi) was coasting along at $255.84 billion and since then, the TVL has dropped ​​8.55% in value. During the last 24 hours, the TVL has slid 2.80%, and Curve’s $23 billion locked today represents 9.84% dominance.

Value Locked in Defi Takes a Hit, TVL Down 2.8% in 24 Hours

  • Since digital currency markets have been dropping in value during the last few days, the value locked in decentralized finance has slipped as well. In four days, the TVL in defi dropped 8.55% from $255.84 billion to today’s $233.95 billion.
  • Curve Finance holds the largest TVL today and is dominant by more than 9.84% with $23 billion locked. This is followed by Convex Finance, Makerdao, Aave, WBTC, and Instadapp, respectively.
  • The biggest seven-day drop in terms of a defi protocol’s TVL in the top ten protocols is Lido, which lost 14.03% this week. The decentralized exchange (dex) Uniswap lost 9.44% this week and WBTC shed 7.63% due to bitcoin’s (BTC) downward price drop.
  • Ethereum still holds the most TVL in defi as far as blockchains are concerned with $147.9 billion on Saturday. Ethereum’s TVL represents 58.18% of the aggregate TVL in defi today.
  • Ethereum is followed by Terra ($16.61B), Binance Smart Chain ($15.33B), Avalanche ($10.93B), Solana ($10.03B), and Fantom ($5.67B) respectively.
  • 30-day statistics for cross-chain bridges today show the TVL has slipped 10.4%. The top cross-chain bridge with the most TVL on Saturday is Polygon’s TVL with $6.1 billion. This is followed by Avalanche ($5.4B), Ronin ($4.9B), and Arbitrum ($2.8B).
  • The top six performing smart contract crypto assets during the last seven days include fuse (FUSE), cypherium (CPH), noah decentralized state coin (NOAHP), harmony (ONE), internet computer (ICP), and chainlink (LINK), respectively.
  • The six worst-performing smart contract crypto assets this week include poa network (POA), gather (GTH), dusk network (DUSK), kadena (KDA), enigma (ENG), and oneledger (OLT).

What do you think about the recent defi action this past week? Let us know what you think about this subject in the comments section below.

Investors in Collapsed South African Crypto Platform Push for Jailing of Africrypt Directors

A group of investors in Africrypt are reportedly pushing to have criminal charges pressed against directors of the now-defunct cryptocurrency investment platform. Opponents of the move have argued that this push is unlikely to succeed because many of the investors have already been reimbursed part of their funds.

Mystery Investor Injects More Than $5 Million Into Africrypt

In a new twist to the Africrypt saga, a group of investors in the collapsed cryptocurrency investment platform is reportedly taking steps to ensure criminal charges are leveled against the firm’s two missing directors. The move by these investors comes just a few weeks after a mystery investor paid more than $5 million to rescue Africrypt.

According to a Bloomberg report, this group of investors wants the matter resolved quickly and has raised the possibility of pursuing the case via a private prosecution. These investors are being represented by Sean Pierce of Coast to Coast Special Investigations. In an interview, Pierce explains why the investors want criminal charges pressed against the crypto platform’s two directors, Raees and Ameer Cajee. He said:

We are pushing for the brothers to be charged for fraud, theft, possibly money laundering. They can get 10 to 15 years for a first-time offense.

Criminal Charges

However, some — including a lawyer that is representing Africrypt — have suggested that the push to have the Cajee brothers criminally charged is unlikely to succeed. They argue an arrangement that a majority of investors agreed to before being reimbursed effectively gives control of all their claims against Afrcrypt to the mystery investor.

As previously reported by Bitcoin.com News, a majority of Africrypt investors had agreed to the terms proposed by Pennython Project Management LLC, a Dubai registered firm. Under the proposal, investors would be paid an equivalent of 65 cents for every dollar invested.

Although Pierce is quoted in the report admitting that some of the investors he represents were indeed reimbursed, he insisted, however, that investors “are still pushing forward with the criminal case as there is still money lost.”

Do you think these investors will succeed in their bid to have the Africrypt directors jailed? Tell us what you think in the comments section below.

CEO of Mirror Trading International Bitcoin Ponzi Scheme Arrested in Brazil

Johann Steynberg, the wanted CEO of Mirror Trading International was recently arrested by Brazilian law enforcement after he was caught using a fake document. The arrest, which took place in the country’s Goiás province, was carried out by the Brazilian military police.

Fake IDs, Laptops, and Credit Cards Seized

Johann Steynberg, the CEO of Mirror Trading International (MTI), a bitcoin Ponzi scheme, was recently arrested by Brazilian law enforcement after he was caught using a false document, reports from the South American country have said. Following the arrest, credit cards, laptops, and fake identification were also seized.

As per several Portuguese language reports, Steynberg, who is on Interpol’s wanted list, was apprehended in the Goiás province by members of an elite unit within Brazil’s military police.

In a statement confirming the arrest, the Brazilian military police also shared details of the steps taken before the decision to capture Steynberg was made. The statement explains:

After an intense work of identification and follow-up, and with the help of information passed on by the Federal Police, it was possible to identify and approach the suspect, who presented a false document at the time of the approach.

Steynberg Fined for Using False Document

On top of being arrested for his role as the key mastermind behind the MTI bitcoin Ponzi scheme, the Brazilian military police said Steynberg must also pay a fine relating to his use of a false document.

As previously reported by Bitcoin.com News, Steynberg disappeared in late December 2020 when reports emerged that several MTI investors were unable to withdraw their funds. Shortly after his disappearance, a South African court ruled that MTI had to be placed under provisional liquidation.

However, since then, other masterminds of MTI — which was named the biggest bitcoin scam in 2020 — have waged a battle to stall the process of liquidating the collapsed company. Meanwhile, a court ruling on a petition that seeks to have MTI declared an illegal business is still pending.

What are your thoughts on this story? Tell us what you think in the comments section below.

Solana Formally Acknowledges Problems With ‘High Compute’ Transactions Clogging the Network

solana

Solana, a top ten smart contracts-enabled cryptocurrency by market cap, has acknowledged it is facing a series of problems hindering the performance of its network. The official account of the status of the network, as well as the status page, reported this incident yesterday. This is the latest issue Solana is facing after experiencing several network disruptions during the past months.

Solana Facing Throughput Issues

Solana, a smart contracts-enabled cryptocurrency, has formally acknowledged its network is suffering performance issues affecting the throughput of the system and causing it to drop certain transactions. The report was issued by the Solana Status Twitter account of the project, which informed users of the situation yesterday.

The account explained:

[The network is experiencing] degraded performance due to an increase in high compute transactions, which is reducing network capacity to several thousand transactions per second. This is leading to increased loading and transaction processing times, and some failed transactions.

This report was posted on January 6, 16:11 UTC and at the time of writing, the issue has not yet been solved. It was also reported that the developers were working to address these issues and solve the problem.

Woes Aplenty

This is not the first time that the network has faced this kind of issue. The first incident of this kind — that affected the block production of the Solana validators — happened on September 14, when the Solana blockchain slowed almost to a crawl due to a resource exhaustion problem, according to the Solana Status account

The blockchain then faced another problem on December 4, when the whole network was stopped, and engineers had to restart it for it to work appropriately again. At that time, the network was halted for approximately 5 hours, with no transactions or blocks being issued during this period.

The project has faced other kinds of issues with congestion due to the release of specific projects that have also crowded the network, as occurred on December 13 when the launch of a project called Solchicks affected the stability of the blockchain.

Then again on January 4th, there were reports about Solana facing a DDoS attack via spam transactions. However, these reports were debunked by Anatoly Yakovenko, co-founder of Solana, who stated that “there was some congestion due to mismetered transitions, and some users experienced their txs timing out and had to retry.”

However, even with all these problems, the total number of Solana transactions outpaced that of its rivals for December, registering 45 billion transactions.

What do you think about Solana and the performance problems it’s been facing? Tell us in the comments section below.

JPMorgan Report States Ethereum Might Lose Defi Dominance Due to Scaling Issues

JPMorgan

A note from JPMorgan states that Ethereum might be at risk of losing defi dominance as a result of its inability to produce effective scaling solutions fast. The note, written by Nikolaos Panigirtzoglou, managing director of global markets strategy at the firm, further stated that other new smart contracts-enabled blockchains are the ones taking this market share, instead of Ethereum sidechains or other Ethereum-based solutions.

Ethereum Dominance at Stake According to JPMorgan

A note from JPMorgan states that Ethereum might keep losing dominance in the field of decentralized finance in the coming year. The note, written by Nikolaos Panigirtzoglou, managing director of global markets strategy at JPMorgan, states this dominance is at risk due to the problems Ethereum has had scaling its network.

On this, the note stated that scaling:

Which is necessary for the Ethereum network to maintain its dominance, might arrive too late.

Ethereum has centered on an L2 (Layer 2)-centric roadmap, that supports the rise of rollups and sidechains to try and find alternatives to the intensive activity and high fees that are happening on its Layer 1 blockchain. Even with this strategy, the percentage of defi dominance, which was estimated at almost 100% at the start of last year, has dropped to an estimate of 70% of the market right now.

The Rise of New Challengers

Panigirtzoglou further explains that what’s more problematic is the fact that Ethereum has lost part of its influence in the defi arena to other chains, instead of to its own L2 scaling solutions. Solana, Avalanche, BSC, and Terra, a group of smart contracts-enabled cryptocurrencies and networks known as “ethereum killers,” have been gaining market share and creating a community behind them.

This has also resulted in the price increase of their respective native tokens. While Ethereum managed to also increase the price of its network asset, ether (ETH), each one of the aforementioned tokens surpassed ETH’s performance last year. Sharding, which is the strategy Ethereum will use to scale in its L1 blockchain, won’t arrive until next year after the merge, which will change the proof-of-work (PoW) consensus to a more energy-friendly proof-of-stake (PoS) consensus.

The note concluded:

In other words, Ethereum is currently in an intense race to maintain its dominance in the application space with the outcome of that race far from given, in our opinion.

What do you think about JPMorgan’s opinion on Ethereum and its possible future in defi? Tell us in the comments section below.

Maker Co-Founder Calls UST and MIM ‘Solid Ponzis’ That Will Go to Zero

Maker

Rune Christensen, one of the founders of Maker, the decentralized autonomous organization behind the governance of stablecoin DAI, has spoken out against two competitors. He stated that UST, Terra’s dollar-pegged stablecoin, and MIM, another collateralized stablecoin, were “solid ponzis” and that the bear market would eventually lead their prices to zero.

Maker Co-Founder Calls Out Competitors

Rune Christensen, one of the co-founders of the organization behind the creation and development of DAI, a decentralized stablecoin, has called out two competitors. Christensen indicated that he got tired of being nagged by UST and MIM “reply guys” on Twitter, and indicated his opinion about these two relatively new stablecoins, comparing them with DAI. Christensen stated:

Look, UST and MIM are solid ponzis and I respect that. You can make good money off them for sure. But they are not built for resilience and they are going to 0 once the market turns for real.

Christensen elaborated by indicating that DAI was built for resilience while noting that the project is the most trustable when it comes to smart contracts and collateral security. However, UST flipped DAI as the most valuable stablecoin project back in December. Still, DAI is ranked second amongst decentralized stablecoin projects by market capitalization.

Engineered Differently

While MIM, UST, and DAI are all decentralized stablecoins in name, each one of them is engineered differently. While DAI and MIM are collateralized stablecoins — meaning that there are other assets backing their value in case of a selloff — UST is a pure algorithmic stablecoin, whose peg is maintained through arbitrage incentives.

Criticism of these collateralized stablecoins has come from the fact that some of the funds backing the assets are composed of centralized stablecoins. In fact, according to a graphic provided by Christensen, 37.4% of DAI generated is collateralized with USDC. However, Christensen pointed out that MIM also had problems in this regard, hinting at the possibility of it having a higher percentage of its backing based on centralized stablecoins.

The stablecoin sector grew massively last year, with USDT, the biggest stablecoin in the market, going from a $20 billion market cap at the start of 2020, to a near $80 billion capitalization starting in 2021. But decentralized alternatives grew even more, with UST multiplying its market cap by more than 50 times. In the same way, MIM has managed to reach a $4.6 billion capitalization since its inception last September.

What do you think about the Maker co-founder’s statements on UST and DAI? Tell us in the comments section below.

Cryptocurrency Worth $435 Million Seized by 12 UK Police Forces in Five Years

U.K. police have revealed how much cryptocurrency they have seized in the past five years in response to Freedom of Information requests. The London Metropolitan Police seized more bitcoins than other police boroughs.

UK Police Reveal Information About Seized Crypto


Twelve of the U.K.’s 43 police forces have seized cryptocurrency worth approximately £322 million ($435 million) in criminal investigations in the last five years, New Scientist reported Thursday, citing Freedom of Information (FOI) requests it submitted.

Bitcoin made up 99.9% of the cryptocurrencies seized in the U.K. However, Law enforcement also seized ethereum, monero, dash, and zcash, the publication conveyed.

The police force that seized the most cryptocurrencies was the London Metropolitan Police, which seized £294 million in BTC. The Greater Manchester Police seized £25 million. Some police boroughs did not respond to the requests.

Meanwhile, the U.S. tax authority, the Internal Revenue Service (IRS), revealed in November last year that $3.5 billion in crypto was seized during the fiscal year 2021. This represents 93% of all funds seized by the tax agency’s criminal investigation unit during the same time period. The agency expects to seize billions of dollars more in cryptocurrency this year.

What do you think about the amount of bitcoin seized by U.K. police? Let us know in the comments section below.