The Vermont Department of Financial Regulation (DFR) recently issued a stern warning to its citizens about the growing menace of cryptocurrency investment scams flourishing on popular social media platforms.
The DFR’s advisory comes in the wake of a distressing incident where a 74-year-old man, Naum Lantsman, lost his entire life savings of $340,000 to a crypto scam orchestrated on Instagram and Telegram.
This tragic case underscores the urgency for Vermonters to exercise extreme caution and vigilance when engaging in cryptocurrency transactions.
Instagram has been identified by the Federal Trade Commission (FTC) as the leading platform associated with crypto fraud, and Lantsman’s unfortunate encounter with a scammer took place on this very platform.
He was lured by a post from a fraudulent entity called SpireBit, which purported to be an “international financial broker” specializing in cryptocurrencies.
Without conducting any due diligence, Lantsman created an account on SpireBit, only to be contacted by a representative through Telegram.
Over the course of several days, the scammer coerced him into making substantial investments.
What started as a seemingly harmless $500 investment quickly snowballed into a staggering loss of over $340,000.
Fake platforms like SpireBit deceive users by displaying fabricated profits on every trade, enticing victims to invest even more of their hard-earned savings.
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Lantsman, like many others, had heard about crypto scams but never imagined he would fall prey to one.
The DFR points to the increasing complexity and personalization of these scams, with con artists employing layers of deception, forging bank documents, and engaging in friendly conversations to dupe unsuspecting individuals.
The DFR emphasizes the importance of remaining vigilant and conducting thorough background checks when dealing with cryptocurrency investments.
Promptly reporting any fraudulent activities can help mitigate financial damage and assist in apprehending the criminals responsible for these scams.
The issue of decentralized finance hacks is gaining prominence, with Eun Young Choi, director of the U.S. Justice Department’s National Cryptocurrency Enforcement Team, highlighting the significant threat posed by North Korean state-sponsored hackers.
The Justice Department is actively pursuing crypto firms that either engage in criminal activities or turn a blind eye to suspicious transactions designed to obscure the trail of illicit funds.
In conclusion, Vermont’s financial regulatory agency is taking proactive steps to safeguard its citizens against the rising tide of crypto investment frauds on social media platforms.
By raising awareness and urging caution, they aim to empower Vermonters to protect themselves from falling victim to deceptive schemes.
Furthermore, the broader issue of decentralized finance hacks remains a concern, and the Justice Department is actively working to bring those responsible to justice.
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Why You Should Be Bullish Despite Bitcoin Price Falling Below $30,000
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Bitcoin (BTC) is showing signs of an impending burst of volatility, comparable to the significant 40% gains it experienced in January.
On-chain data, as reported in analytics firm Glassnode’s weekly newsletter, The Week On-Chain, points to the tightest Bollinger Bands for BTC since the beginning of 2023.
BTC’s price has remained in a narrow range for a whole month, with $30,000 acting as a pivotal point for sideways movement.
This situation is testing both bullish and bearish traders, leaving them uncertain about the future direction of the market.
Analyst Aksel Kibar observed on July 21 that the prolonged sideways action is often a precursor to strong price movements, although he remains unsure of the direction.
To prepare for the upcoming surge in volatility, he sticks to his well-defined boundaries and awaits the directional move.
Bollinger Bands, a classic volatility indicator, are currently signaling that the days of rangebound BTC price action are limited. These bands use standard deviation around a simple moving average to determine when a shift in trend is likely.
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At present, the upper and lower bands are closer together than at any point during BTC’s upside in 2023, indicating a potentially significant move soon.
The market is experiencing a period of extremely low volatility, with the 20-day Bollinger Bands indicating an extreme squeeze, marking the “quietest BTC market since the lull in early January.”
Such a scenario previously led to a breakout in January, resulting in substantial gains throughout the month.
Glassnode also observed that, despite BTC’s price gains since January, there is little active selling for profit or loss at current levels.
This lack of “realized” activity is a common occurrence after price cycle lows.
Investors seem reluctant to spend their coins on-chain, as evidenced by the relatively small sum of profits and losses locked in by the market, amounting to approximately $290 million per day.
This figure, although significant on a nominal basis, is comparable to the situation in 2019 and October 2020, even though the Bitcoin market cap has approximately doubled since then.
In summary, Bitcoin’s tight Bollinger Bands and the lack of active selling indicate an imminent surge in volatility.
Traders and investors are eagerly anticipating the directional move, as it has the potential to rival the significant gains witnessed in January.
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Cerebras Systems, a Silicon Valley-based company, has secured a substantial deal worth approximately $100 million with G42, a technology group headquartered in the United Arab Emirates (UAE).
The agreement encompasses the provision of an initial installment of an artificial intelligence (AI) supercomputer, with the potential of delivering up to nine more units, as stated in a press release on July 20.
G42 has committed to obtaining three Condor Galaxy systems from Cerebras, which form an innovative network comprising nine interconnected supercomputers.
The first supercomputer in this network, known as Condor Galaxy 1 (CG-1), boasts an impressive performance of 4 exaflops and is built on a framework of 54 million cores.
To expedite deployment, the manufacturing of these systems will take place in the United States. The first supercomputer, CG-1, is slated to be operational by the end of this year, while CG-2 and CG-3 are expected to go online in early 2024.
The timing of this agreement is significant, as cloud computing providers worldwide are actively seeking alternatives to Nvidia chips, which currently dominate the AI computing market.
With Nvidia’s products facing shortages due to high demand from AI services like ChatGPT and others, Cerebras and other startups are striving to challenge Nvidia’s market dominance in the AI computing sector.
Cerebras CEO Andrew Feldman revealed that discussions are already underway for the potential acquisition of up to six additional supercomputers by late 2024.
The company, in collaboration with G42, aims to expand the supercomputer network, with plans to establish an impressive 36 exaflops of AI computing power in the coming year.
To support the advancement of its computing services using the supercomputers, Feldman expressed his intention to relocate to the UAE for three months, working closely with G42.
He views this endeavor as a “rare opportunity to revolutionize a massive market.”
G42, based in Abu Dhabi, intends to leverage the Cerebras systems to offer AI computing services to healthcare and energy companies.
In response to inquiries, Cerebras has not yet provided further details on the terms of the deal or its future plans.
Overall, this partnership between Cerebras and G42 represents a significant move in the AI computing industry, as it not only addresses the current challenges posed by chip shortages but also seeks to expand and revolutionize the potential of AI computing services.
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Conic Finance, a liquidity pool balancing platform associated with the decentralized finance (DeFi) protocol Curve, has recently fallen victim to an exploit on the Ethereum omnipool, resulting in a loss of $3.26 million in Ether (ETH).
As of July 21, the value of ETH has dipped to $1,892, following the incident, according to Beosin Alert, a Web3 risk-alert source.
Beosin Alert’s data revealed that the majority of the stolen cryptocurrency was consolidated and transferred to a new Ethereum address in a single transaction, hinting at the sophistication of the attack.
Etherscan’s analysis of the address highlighted the involvement of a flashloan exploit on Coin ETH Pool.
Promptly responding to the breach, Conic Finance took to Twitter to confirm the news and assured users that they are actively investigating the exploit. They promised to share updates as soon as they become available.
Peckshield, a blockchain security firm, conducted an initial analysis of the incident, which revealed that the root cause of the exploit originated from the new CurveLPOracleV2 contract.
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Interestingly, their audit had already identified a similar read-only reentrancy issue, but it was noted that the newly introduced CurveLPOracleV2 contract, which was not part of the audit scope, was the source of the vulnerability.
Within an hour of the initial report, Conic Finance took further precautionary measures and disabled ETH Omnipool deposits on their platform’s front end.
Curve Finance, associated with Conic Finance, confirmed the situation and informed users that only the ETH omnipool was affected.
Unfortunately, DeFi hacks have become increasingly common within the industry.
A recent report by De.Fi, a Web3 portfolio app, highlighted that in the second quarter of 2023 alone, hackers managed to steal more than $204 million through various DeFi hacks and scams.
Despite this alarming figure, the losses from DeFi exploits and scams in Q2 were comparatively lower than those recorded in Q1, with CertiK reporting a staggering $320 million lost from January to March.
In conclusion, the exploit on Conic Finance’s liquidity pool has resulted in substantial losses, raising concerns about the security and vulnerability of DeFi protocols.
With the industry continuously evolving, it is crucial for platform developers and security firms to work together to address and prevent such incidents to safeguard users’ funds and maintain trust in the DeFi ecosystem.
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According to a market report from Bitfinex, Bitcoin (BTC) mining companies are adopting derisking strategies by selling BTC to exchanges.
The report highlights a recent surge in miners offloading large volumes of BTC to exchanges, resulting in an increase in the value of shares in Bitcoin mining companies. Institutional interest in BTC is also growing in 2023.
The report points out that Poolin has been responsible for the highest amount of BTC sold in recent weeks. Bitfinex analysts note that the Bitcoin mining difficulty recently reached an all-time high, which they consider an indicator of strong miner confidence.
The report states that miners are bullish on Bitcoin and are committing more resources to mining, leading to increased mining difficulty. However, they are also hedging their position by dispatching more Bitcoin to exchanges.
The report suggests that miners are hedging their positions on derivatives exchanges, with 70,000 BTC transferred in the first week of July 2023.
This volume of transfers to exchanges is considered rare and potentially showcases new miner behavior.
Bitfinex also mentions data from Glassnode, indicating that Poolin has been responsible for a significant portion of this activity, offloading BTC to Binance.
The report discusses various plausible reasons behind this mining behavior, including hedging activities in the derivatives market, carrying out over-the-counter orders, or transferring funds through exchanges for other purposes.
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The increase in mining difficulty suggests the addition of new mining power to the Bitcoin network.
Analysts interpret this as a sign of improved network health and increased confidence in mining profitability, driven by higher BTC prices or improved hardware.
Additionally, the report suggests that on-chain Bitcoin movements reflect a transfer of supply from long-term holders to short-term holders.
This behavior is commonly observed during bull market conditions, with new market traders seeking quick profits while long-term holders capitalize on increased prices.
To shed light on the increase in Bitcoin outflows from miners in the past month, Cointelegraph has reached out to several mining companies and pools for clarification.
In June 2023, miners sent over $128 million in revenue to exchanges, as reported previously.
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The dYdX Foundation, a non-profit organization dedicated to supporting the dYdX protocol in decentralized finance (DeFi), has announced the launch of a public testnet for its latest version, v4.
This achievement has put dYdX ahead of schedule for the anticipated release of the v4 mainnet, marking a significant milestone towards complete decentralization for the platform.
As outlined in its roadmap towards decentralization, the recent testnet launch represents the fourth out of five milestones set by dYdX.
Currently, the live version of dYdX is considered partially centralized, utilizing a centralized order book and matching system while not holding custody of user assets.
The forthcoming v4 version is expected to resolve this issue and achieve full decentralization.
dYdX is currently the world’s largest decentralized exchange for perpetuals, which are bonds without a maturity date, facilitating over $1 billion in daily fund transfers.
Charles d’Haussy, CEO of the dYdX Foundation, discussed the move towards complete decentralization and its impact on centralized providers of perpetuals.
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According to d’Haussy, centralized providers are not direct competitors to the dYdX protocol, as they have played a crucial role in supporting the market, with BitMex being credited as the originator of perpetuals.
He views the industry as transitioning towards a state of “decentralized disruption,” but emphasizes that centralized organizations can coexist and collaborate with DeFi platforms, benefiting the broader crypto community.
D’Haussy envisions a future where centralized exchanges serve as gateways to decentralized exchanges, offering customers an enhanced experience and seamless integration.
Drawing a parallel with traditional financial institutions, he suggests that banks often provide additional services alongside their core business.
He believes this model can be applied to crypto, as long as it empowers users to adopt crypto services in ways that suit their preferences.
The CEO views this as a positive development for the ecosystem, emphasizing that people have diverse consumption preferences.
If a centralized entity can provide a more accessible and comfortable means of managing crypto assets, while also facilitating access to DeFi, it would be beneficial for users.
In conclusion, the dYdX Foundation’s launch of the v4 testnet has propelled the platform closer to achieving complete decentralization.
The CEO’s perspective highlights the potential for collaboration between centralized and decentralized providers, with centralized exchanges serving as gateways to DeFi, offering users a seamless and personalized crypto experience.
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During his speech at the Ethereum Community Conference (EthCC), Mudit Gupta, the chief information security officer of Polygon, shed light on the practical challenges associated with private or mnemonic keys despite their security advantages.
Gupta emphasized the disparity between theoretical and practical security within the blockchain and crypto space.
While the industry is rapidly progressing in terms of theoretical security, Gupta believes it lags significantly behind in practical security.
He specifically highlighted the difficulties of safeguarding private keys compared to passwords. Private keys, once leaked, cannot be changed, unlike passwords.
Gupta explained that the responsibility of keeping a mnemonic or private key safe poses a far more challenging problem.
The consequences of failing to secure mnemonic keys are significant, with billions of dollars already lost due to individuals misplacing or losing their keys.
Gupta stressed the urgency of addressing this issue, as countless users’ wallets contain billions of dollars that are improperly secured.
Gupta acknowledged that private keys are theoretically 100% secure, as long as they remain unknown to others.
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However, he recognized practical challenges that can arise, such as ensuring access to funds for loved ones in the event of the owner’s death or dealing with compromised keys.
Furthermore, Gupta discussed the inherent difficulties faced by defenders in the security realm. He pointed out that attackers have an easier time than defenders since they only need to exploit a single vulnerability.
Defenders, on the other hand, must cover every possible entry point, leaving no room for any oversight.
Despite these challenges, Gupta emphasized the importance of defending against cyber threats.
He acknowledged that security professionals have a tougher role compared to hackers and exploiters, as defenders must diligently cover all bases to ensure the integrity of systems.
In conclusion, Mudit Gupta highlighted the practical challenges surrounding private or mnemonic keys, even though they offer enhanced security.
He called for greater attention to securing mnemonic keys, considering the billions of dollars at risk due to improper security measures.
Additionally, Gupta emphasized the arduous task faced by defenders, who must safeguard every aspect of a system against attackers seeking vulnerabilities.
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United States-based cryptocurrency mining company Marathon Digital is facing legal action as its shareholders accuse CEO Fred Thiel and other top executives of breaching fiduciary duties, enriching themselves unfairly, and misusing corporate assets.
On July 8, a shareholder complaint was filed against Fred Thiel and nine other Marathon executives in the United States District Court for the District of Nevada.
The lawsuit includes five claims, including violations of the U.S. Securities Exchange Act, breach of fiduciary duties, unjust enrichment, and misappropriation of corporate assets.
The plaintiffs are also seeking potential compensation from Thiel, Merrick Okamoto, Simeon Salzman, and Hugh Gallagher for their alleged wrongful acts leading to a complaint filed by the U.S. Securities and Exchange Commission (SEC) against the company.
The shareholders’ legal team did not specify a specific amount of compensation, leaving it to the court to decide.
Furthermore, the shareholders aim to rectify the company’s governance by enhancing the board’s oversight of operations, nominating at least four candidates from shareholders to the board, and eliminating the previous procedure for directors’ elections.
According to the legal team, the company’s management has downplayed its issues, artificially inflated Marathon’s valuation, received excessive compensation, engaged in lucrative insider sales, and obtained undeservedly high bonuses based on false and misleading statements.
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In May, Marathon received a subpoena from the SEC, which was related to transactions with related parties that took place during the construction of its facility in Montana.
In 2021, the regulator had previously requested the firm to provide documents and communications regarding the same mining facility.
Despite facing these challenges, Thiel expressed optimism in May when outlining the company’s strategy to reduce its net loss from $12.9 million ($0.12 per share) in Q1 2022 to $7.2 million ($0.05 per share) in 2023.
While the decline in the price of Bitcoin also impacted Marathon’s quarterly results, the mining firm managed to reduce its debt in March.
It paid off a term loan with Silvergate Bank, allowing the release of the 3,132 BTC held as collateral for the loan.
Marathon stated that this move would eliminate $50 million of debt and reduce its annual borrowing costs by $5 million.
Cryptocurrency lending firm Celsius, currently facing bankruptcy, has submitted a request to the court seeking relief regarding the distribution of funds obtained from the sale of its self-custody platform, GK8.
According to the filing made by Celsius Network’s debtors on July 17, an agreement has been reached among the Series B holders to allocate $25 million from the proceeds of GK8’s sale.
This settlement was agreed upon by the debtors, the creditors’ committee, and the initial consenting Series B preferred holders.
The document outlines that $24 million will be designated for legal expenses, while the remaining $1 million will be distributed among the holders.
The debtors have shown support for this proposed allocation, emphasizing that the primary objective of the settlement is to reduce administrative costs.
The filing states that the proposed allocation provides reciprocal benefits to the initial consenting Series B holders.
The settlement agreement was primarily based on the mutual desire to avoid expensive litigation and a lengthy confirmation process, which would entail additional professional fees.
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The document highlights the benefits of the settlement, stating that it not only unlocks substantial value for the creditors but also provides clarity and certainty for all parties involved.
Consequently, the filing requests the court to overrule any objections and grant the relief sought in the motion.
Celsius had acquired the Israeli self-custody startup GK8 in late 2021 for $115 million but was compelled to sell it as part of the restructuring plan following the company’s collapse in 2022.
The investment firm Galaxy Digital, led by Mike Novogratz, emerged as the winner of the bidding process to purchase GK8 in late 2022.
As part of the acquisition, Galaxy obtained GK8’s team of 40 experts and their Tel Aviv office. In July 2023, GK8 held a meeting with financial executives at its New York offices.
These recent developments come at a time when Celsius is grappling with various legal challenges.
On July 13, the United States Securities and Exchange Commission filed a lawsuit against Celsius, coinciding with reports of the former CEO Alex Mashinsky’s arrest.
Additionally, the U.S. Federal Trade Commission imposed a $4.7 billion fine on Celsius on the same day.
Mashinsky, after pleading not guilty to charges of misleading customers and inflating the Celsius CEL token, was released on bail of $40 million.
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Data suggests that the price of Bitcoin is likely to drop below $29,000 in the near future.
The inability to break above $31,800 on July 13 led to a 6.3% correction, bringing the price down to $29,700 on July 17.
Investors are concerned that ongoing regulatory developments and macroeconomic challenges could push Bitcoin below the $29,000 level, last seen on June 21.
Bitcoin futures indicate increased demand, but Asian markets are slowing down. Typically, Bitcoin futures trade at a slight premium compared to spot markets, indicating sellers’ willingness to delay settlement for more money.
Healthy markets usually exhibit BTC futures contracts trading at a 5% to 10% annualized premium.
Between July 14 and July 17, BTC futures maintained a 7% premium, surpassing the 5% threshold, suggesting moderate conviction among bulls after the unsuccessful attempt to break above $31,800.
However, the premium of Tether (USDT) in Asia has been decreasing. The stablecoin premium serves as an indicator of demand from China-based retail crypto traders, measuring the difference between peer-to-peer trades and the U.S. dollar.
The recent Tether premium in Asia reached a discount of 1.8%, its lowest point in over six months.
This widening discount trend, starting on July 12, indicates moderate sell pressure.
Regulatory concerns continue to affect the crypto sector.
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While the July 13 ruling that the sale of XRP via exchanges and over-the-counter desks did not violate securities regulations boosted markets, it did not definitively determine whether XRP’s initial coin offering was classified as a security offering.
This lack of clarity unsettles some investors, raising the possibility of other cryptocurrencies facing similar designations.
Additionally, Binance’s layoff of 1,000 employees and the departure of key executives, along with ongoing court actions from the Securities and Exchange Commission, have raised concerns about the future of the exchange.
Macroeconomic trends also pose challenges for Bitcoin and risk-on assets. China’s second-quarter gross domestic product growth fell short of expectations due to factors like the trade war with the United States and the government’s efforts to address debt.
These external factors, along with impending court decisions that could negatively impact major exchanges, increase the likelihood of Bitcoin dropping below $29,000.
In terms of trading, BTC futures indicate higher confidence among professional traders using leverage. However, sell pressure from retail investors in Asia limits the overall upside potential for cryptocurrencies.
Without a specific catalyst to drive it higher, Bitcoin’s price is susceptible to worsening macroeconomic conditions and indications of interest rate increases by the Federal Reserve in 2023.
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