Bitcoin mining company Marathon Digital attributes its 21% decline in Bitcoin mined in June to harsh weather conditions in Texas and a significant fall in transaction fees, according to a statement on July 5.
The firm’s main operations based in Texas produced 979 Bitcoin, markedly less than the previous month due to the impact of the transition from spring to summer.
National Weather Service data showed a considerable temperature increase in Texas, with an 8.4 degrees fahrenheit jump from an average of 75.6 degrees in May to 84 degrees in June.
Such changes in weather conditions have historically proven disruptive for crypto mining operations in the state.
READ MORE: Former BitMEX CEO Says Bitcoin Will Reach $760,000 as Currency of Artificial Intelligence
For instance, Riot Platforms, another crypto mining firm, experienced a temporary halt in its operations when 17,040 of its rigs went offline due to severe winter weather in February.
Further compounding Marathon Digital’s challenges, the company’s transaction fees dipped to roughly 5.1% of the total Bitcoin earnings for June, down from 11.8% in May.
This decline came despite the increased transaction fees brought about by the advent of Bitcoin Ordinals in May.
Although network congestion receded in June, Marathon Digital maintains an optimistic view regarding the long-term profitability of mining.
The recent downturn highlights the susceptibility of crypto mining operations to external factors, particularly weather conditions.
In 2022, Argo Blockchain, another crypto mining firm operating in West Texas, was forced to suspend its mining activities temporarily due to a conservation alert issued by the Electric Reliability Council of Texas.
In contrast, a July 5 report by Coin Metrics, a cryptocurrency analytics platform, revealed a bright spot for the broader industry:
Bitcoin miners accrued $184 million from transaction fees in Q2 2023, surpassing the total earnings from fees for the entirety of 2022. Despite individual setbacks, this suggests a thriving overall trend for the industry.
Bitcoin (BTC) has the potential to become the currency of choice for artificial intelligence (AI), according to Arthur Hayes, the former CEO of BitMEX.
In his recent essay titled “Massa,” Hayes argues that as fiat currencies become increasingly dysfunctional, the AI revolution will flourish, leading to a surge in BTC adoption.
Hayes predicts that the price per coin could reach $760,000 as a result.
Hayes believes that the future will witness a significant expansion of AI-related applications, making AI an integral part of everyday life.
READ MORE: Top Executives Depart Binance Amidst Legal Scrutiny and Compliance Concerns
The rapid advancements in computing power have brought us to the verge of an AI explosion that will revolutionize humanity.
Hayes cites the example of ChatGPT, which acquired 100 million monthly active users in just two months, highlighting the unprecedented pace of technological adoption.
When it comes to financial solutions for AI integration, Hayes suggests that Bitcoin, rather than a tailor-made altcoin, will be the preferred choice.
This is because AI systems are likely to perceive Bitcoin’s qualities, such as its fixed supply, digital scarcity, and status as “energy money,” as the most logical option.
AI systems are unlikely to rely on anything operated by human governments, thus making Bitcoin and gold the most suitable choices.
Hayes also outlines a potential path for Bitcoin’s price to reach $1 million.
He anticipates that the real impact of AI will be felt in approximately three years, and it could take another decade for the network value boost driven by AI alone to push BTC/USD to nearly $1 million.
Hayes emphasizes that his predictions aim to create a narrative that gains traction before the peak of what he calls “deranged growth investing” in 2025 to 2026.
Depending on the extent of investment, Bitcoin’s price could surge to $760,000 per coin.
Hayes concludes by stating that the market is most lucrative when it shifts from believing something is impossible to considering it as a possibility.
His optimistic outlook on Bitcoin’s future price is based on the expectation that the market will overvalue Bitcoin’s network growth if it sees a chance of his assumptions coming true.
Arthur Hayes is renowned for his bullish long-term perspective on Bitcoin and has previously advocated for a million-dollar price target, attributing it to the disintegration of fiat currencies.
Logan Paul has decided to not refund CryptoZoo investors, a source in the influencer’s camp told Crypto Intelligence News on Saturday.
Paul found himself under increased security after crypto YouTuber and sleuth Coffeezilla published a video about the failed crypto gaming project in late December.
In the video, Coffeezilla criticised Paul and other senior figures of the project, and he also spoke to several victims, who cumulatively lost millions of dollars as a result of the failed project.
He later promised to refund some of the investors, after his initial tactic of blaming senior advisors failed.
READ MORE: Elon Musk Fights Back Against $258 Billion Dogecoin Lawsuit
However, over six months later, Paul is yet to have paid a dime in compensation, nor has he provided an update on the situation or how exactly investors can claim compensation.
Coffeezilla revealed in a recent video that Paul had been ignoring his messages regarding CryptoZoo, with only his lawyers responding to his requests for comment.
“Paul has not paid back his victims. He hasn’t talked about it since he first announced he was going to pay them back. And what’s worst of all, he doesn’t seem to have a plan in place to refund anyone,” he said.
A source with ties to Paul and the now-defunct project has now told Crypto Intelligence News that the American influencer has changed his mind about compensating investors.
Specifically, the source said that Paul was unhappy with the response he received online after he announced his intention of compensating investors from his own pocket, feeling that he didn’t receive enough credit.
Crypto Intelligence News has reached out to Logan Paul’s team for comment, but has not received a reply as of publishing this story.
Elon Musk and Tesla are fighting back against allegations of conflicts of interest in a $258 billion lawsuit related to Dogecoin.
Lawyers representing Musk and Tesla recently filed a response in a United States district court, requesting the dismissal of a motion that sought to have them sanctioned over alleged conflicts of interest.
The motion, filed by Evan Spencer, a lawyer representing the plaintiffs in the case against Musk, claimed that the defendants’ legal team was acting as “yes men” and had a conflict of interest by representing both Musk and Tesla.
READ MORE: Top Executives Depart Binance Amidst Legal Scrutiny and Compliance Concerns
Spencer argued that the lawyers’ true loyalty lay with Musk alone.
In their response, Musk and Tesla’s legal team firmly rejected Spencer’s allegations, referring to the motion as “unsubstantiated” and “frivolous.”
They cited New York law, stating that there is no conflict of interest when legal teams represent both company officers and the companies themselves, unless they are legal adversaries.
The response further criticized Spencer’s track record, accusing him of a history of filing frivolous motions to delay court procedures.
The defense team denied allegations that they leaked a letter disparaging Spencer’s behavior to the New York Post, instead claiming that it was Spencer who introduced the letter to the jury pool by publicly docketing and introducing it through the motion.
The legal battle between Musk, Tesla, and the plaintiffs revolves around allegations of Musk’s involvement in an illegal racketeering scheme tied to Dogecoin, a cryptocurrency currently valued at $0.07 per coin.
The plaintiffs are seeking a staggering $258 billion in damages.
Musk and Tesla’s lawyers characterized Spencer’s motion as an abuse of process, asserting that it wasted the court’s time and insulted the credibility of their legal team.
They emphasized their dedication to upholding the principles of the legal profession and expressed their commitment to vigorously defending their clients against the allegations.
As the case progresses, both sides will present their arguments and evidence to the court.
The judge will ultimately decide whether the motion to have Musk and Tesla’s legal team sanctioned holds merit.
The outcome of this lawsuit will have significant implications for Musk, Tesla, and the cryptocurrency industry as a whole.
Ryan Wyatt, who has served as president of Polygon Labs for over a year, has announced his decision to step down from his current role and transition into an advisory position within the company.
Wyatt revealed his plans to leave Polygon by the end of July but expressed his intention to remain involved in the crypto space by continuing to provide guidance and advice to the firm.
Taking on the mantle of the new CEO will be Marc Boiron, Polygon’s chief legal officer and former chief legal officer of dYdX.
READ MORE: BarnBridge DAO Halts Operations Amidst SEC Investigation
Meanwhile, Rebecca Rettig, currently serving as Polygon’s chief policy officer, will assume the role of chief legal officer following Boiron’s departure.
Rettig’s expertise in legal matters and her recent appointment by Caroline Pham of the United States Commodity Futures Trading Commission (CFTC) to the CFTC’s Global Markets Advisory Committee’s Subcommittee on Global Market Structure, Technical Issues, and Digital Asset Markets further bolsters her qualifications for the position.
This change in leadership comes at a pivotal time for Polygon, as the platform has been diligently working on a series of upgrades known as “Polygon 2.0” with the aim of establishing the “Value Layer” of the internet.
One of the key milestones in this endeavor is the implementation of “decentralized governance,” which Polygon plans to achieve by July 17.
These upgrades and advancements will contribute to Polygon’s growth and solidify its position in the blockchain and cryptocurrency industry.
Polygon has already achieved significant milestones, as demonstrated by its ascent to become the second-largest blockchain gaming network in terms of the number of unique active wallets, surpassing Hive.
The growing popularity of the platform and its underlying cryptocurrency, Polygon (MATIC), is a testament to its success.
As of the time of this article’s publication, the price of Polygon (MATIC) stood at $0.6804, signifying its market value.
With the upcoming changes in leadership and the continued pursuit of Polygon 2.0, the future of Polygon Labs looks promising, poised to make further advancements in the realm of decentralized finance and beyond.
Bitcoin Mining Stocks Outperform BTC with Impressive Gains, but Potential Risks Loom
Bitcoin mining companies have significantly outperformed Bitcoin itself amid the recent bullish price action in the cryptocurrency market.
The top nine publicly traded Bitcoin mining firms have seen an average year-to-date stock price gain of 257.14% in 2023, nearly three times higher than Bitcoin’s gain in the same period.
The leveraged beta effect explains the higher gains of mining stocks.
READ MORE: Crypto Investor Discovers $322,000 Worth of Ether (ETH)
When Bitcoin experiences an upward trend, these stocks tend to outperform, while they face greater downside risk during Bitcoin slumps.
Consequently, the performance of Bitcoin will remain a crucial factor in determining the direction of mining stocks.
While miners are positioning themselves for the long term by expanding their operations and purchasing more machines, the accumulation levels have not matched those of previous bull markets.
This suggests that the upward trend in mining stocks may stall in the medium term.
Recent developments within the mining sector have added to positive sentiments and long-term value.
Some mining companies have made significant moves, such as Hut 8 Mining merging with US Bitcoin Corp, increasing its total hash rate to become the third-largest public mining entity in the US.
Cleanspark also invested to increase its hash rate, and Riot Blockchain entered a deal with mining hardware manufacturer MicroBT to double its hash rate capacity by 2024.
However, on-chain data reveals that miners have been selling a significant portion of their holdings, which could indicate an impending downturn.
Additionally, some mining stocks, like Marathon Digital Holdings, Riot Blockchain, and Cipher Mining, have attracted a substantial amount of short interest, possibly due to excessive debt and stock dilution, which can impact existing shareholders’ profitability.
While mining profits have improved, miners continue to sell their Bitcoin holdings.
The network’s total hash rate reached a new all-time high initially but has since dropped due to heat waves in Texas, where some mining farms are located.
The profitability of running miners has increased with Bitcoin’s price surpassing $30,000, but companies with operations in Texas may face losses due to the adverse climate conditions.
Despite revenue improvements, miners have been allocating funds to expansion and operation costs, suggesting that a full-fledged crypto bull market is yet to materialize.
The expansion plans of mining companies and the decline in on-chain miner holdings indicate a potential sideways price action or a correction in mining stocks if the BTC price drops.
According to a report from The New York Times on July 6, the Federal Bureau of Investigation (FBI) conducted a search of Kraken co-founder Jesse Powell’s home in March as part of an investigation into allegations of hacking and cyber-stalking against a nonprofit arts group.
The Verge Center for the Arts, which Powell founded, claimed that he had interfered with computer accounts by blocking access to emails and other messages from contributors.
Three individuals with knowledge of the matter informed The NYT that the FBI, along with the U.S. Attorney’s Office for the Northern District of California, had been investigating Powell since at least September 2022.
READ MORE: Larry Fink Advocates for Crypto, Fuels Hopes for Bitcoin ETF Amid Regulatory Uncertainty
During the search, electronic devices were seized from Powell’s home in Brentwood, Los Angeles.
However, it is important to note that prosecutors have not formally charged Powell with any crimes.
Powell’s lawyer, Brandon Fox, stated that the investigation primarily focused on the allegations made by the nonprofit and was unrelated to Powell’s involvement in the cryptocurrency arena.
This statement was reportedly supported by a spokesperson from Kraken.
When approached for comment, Jesse Powell did not immediately respond to Cointelegraph’s request.
Powell founded the Sacramento-based arts group in 2007, although his LinkedIn profile indicates that he has been working as a founder and board member since April 2010.
Kraken, the cryptocurrency exchange co-founded by Powell, currently holds the position of the second largest U.S.-based exchange, trailing behind Coinbase according to CoinMarketCap.
However, in February, Kraken faced enforcement action from the U.S. Securities Exchange Commission (SEC) for its failure to register the offer and sale of their staking service program.
As a result, Kraken reached a settlement with the SEC, agreeing to pay a substantial $30 million fine.
The investigation into Jesse Powell’s alleged activities involving the Verge Center for the Arts is ongoing, and it remains to be seen whether any charges will be brought against him in relation to these accusations.
Binance’s chief strategy officer, Patrick Hillmann, has confirmed his departure from the cryptocurrency exchange amidst reports of other top compliance executives resigning in the United States.
In a tweet on July 6, Hillmann stated that he is leaving Binance on good terms after two years with the company.
He mentioned that it is time for him to move on to the next challenge, especially as he is expecting his second child.
Fortune had previously reported that several Binance executives, including Hillmann, left the exchange due to CEO Changpeng “CZ” Zhao’s response to the U.S. Justice Department’s investigation, citing an internal source.
READ MORE: Coinbase, Binance and Gemini have least happy employees
It was further revealed that the general counsel, Han Ng, and the senior vice president for compliance, Steven Christie, have also departed from the exchange.
In response to these reports, Zhao dismissed them as “FUD” (fear, uncertainty, and doubt) in a tweet, claiming that the reasons for the executive departures were fabricated and completely false.
According to another report from Bloomberg, Binance’s head of legal for APAC and MENA, Eleanor Hughes, will assume the role of the new general counsel, replacing Ng.
Meanwhile, Noah Perlamn, who joined as the chief compliance officer in February, will continue to work at the company. When asked for comment on the matter, Binance referred to Zhao’s tweet.
The U.S. Justice Department is reportedly investigating Binance for allegedly permitting Russians to use the exchange in violation of U.S. sanctions.
Additionally, in June, the Securities and Exchange Commission filed a lawsuit against Binance, accusing them of offering unregistered securities and misusing customer funds.
Earlier in March, the Commodities Futures Trading Commission also sued Binance, alleging that the exchange failed to properly register with the regulator.
As Binance faces these legal challenges and the departure of key compliance executives, the cryptocurrency exchange will need to navigate through these obstacles and maintain transparency to regain trust within the industry and with regulatory authorities.
Concerns are rising as abnormally large outflows from the Multichain MPC bridge platform have sparked fears of a potential multimillion-dollar exploit.
On July 6, significant amounts of cryptocurrency were withdrawn from Multichain’s bridges on different chains, leading to suspicions of unauthorized activities.
The withdrawals from Multichain’s Fantom bridge on the Ethereum side amounted to approximately $102 million worth of crypto. In addition, $666,000 was withdrawn from Dogechain, and $5 million was taken from Moonriver.
Specifically, the Fantom bridge’s Ethereum smart contract witnessed the withdrawal of 7,214 Wrapped Ether (WETH) tokens valued at $13.6 million, 1,024 Wrapped Bitcoin (WBTC) worth $31 million, and $58 million worth of USD Coin (USDC).
The Ethereum contract of the Dogechain bridge saw a withdrawal of $666,000, which accounted for over 86% of its total deposits, leaving only around $100,000 remaining.
READ MORE: Larry Fink Advocates for Crypto, Fuels Hopes for Bitcoin ETF Amid Regulatory Uncertainty
Similarly, the Multichain Moonriver bridge contracts experienced the withdrawal of $5,872,661 worth of USDC and Tether (USDT), leaving approximately $700,000 in assets behind.
The event triggered suspicions of an exploit, with blockchain security firm PeckShield alerting the Multichain team through a tweet highlighting the transactions.
Other on-chain investigators shared similar concerns, referring to the incident as a possible hack.
At the time of publication, it was not confirmed whether the contracts were fully drained or if users had simply withdrawn significant amounts of funds.
Cointelegraph reached out to the Multichain team but did not receive a response by the time the article was published.
Multichain later acknowledged the abnormality of the movements on Twitter and stated that the team was currently investigating the situation.
Multichain operates as a multi-party computation (MPC) bridging network, facilitating the transfer of assets between different chains.
The process involves confirming the locking of assets on one chain and minting derivative assets on the target chain.
Withdrawals reverse this process by ensuring the destruction of derivative coins on the second chain and releasing the backing assets on the first chain.
The Multichain team claims that the cryptographic keys controlling these processes are distributed across multiple shards within the network, making unauthorized withdrawals theoretically impossible.
However, the platform has faced technical issues in recent weeks, including the CEO going missing and delayed transactions.
Binance even suspended withdrawals of some Multichain derivative tokens due to the network’s failure to process transactions promptly.
Governments worldwide are facing significant challenges in effectively taxing cryptocurrencies, according to a recent working paper by the International Monetary Fund (IMF).
The paper highlights the complexity arising from crypto’s semi-anonymous nature, its dual role as an investment vehicle and payment method, and its high volatility.
Furthermore, the emergence of blockchain technology and the diverse range of crypto assets it has spawned adds another layer of complexity to tax systems that were designed before this technology existed.
The IMF acknowledges that crypto’s high fees and volatility make it less attractive for tax evasion.
However, it suggests that if governments could harness the potential for crypto tax collection, it could serve as a corrective measure to counter the undesirable macroeconomic impacts of crypto and contribute to environmental goals.
The paper highlights the need for exploring mechanisms such as green taxation but emphasizes that more consideration is required in this area.
Although there is a wealth of data available on cryptocurrency transactions, there is a lack of analytical work and empirical evidence on this subject.
READ MORE: Hong Kong Government Urged To Challenge Tether and USDC
The IMF also notes the challenges faced in emerging economies, where technology for tax collection may be limited.
Even in cases where crypto is seized, such as by the U.S. Federal Bureau of Investigation, the process for doing so remains unclear.
Another factor that complicates taxation is the division between large crypto holders (“whales”) and small holders, which may require distinct approaches.
The paper suggests that proper tax design is crucial and proposes the possibility of imposing a flat-rate tax on anonymous transactions.
The primary challenge lies in the technology itself, as tax authorities struggle to insert themselves into blockchain transactions.
The paper highlights the potential value of distributed ledger technology and smart contracts in facilitating tax administration and ensuring compliance.
Centralized exchanges are seen as more amenable to enforcing tax compliance than decentralized exchanges, although implementing such measures would require significant work.
The IMF argues that Anti-Money Laundering and Know Your Customer measures, while necessary for other purposes, are insufficient for effective tax reporting.
To enhance tax compliance, the IMF suggests imposing greater reporting requirements on crypto miners.
Additionally, it emphasizes the need to address the inconsistencies surrounding sales and value-added taxation in the context of cryptocurrencies.
In conclusion, governments are grappling with the complexities of taxing cryptocurrencies due to their unique characteristics and the technological advancements that underpin them.
Addressing these challenges will require innovative tax design, leveraging distributed ledger technology, and establishing clear reporting requirements.
As the popularity of cryptocurrencies continues to grow, it is crucial for governments to find effective solutions to ensure fair and efficient taxation in this evolving landscape.