Hodler’s Digest, September 8-14 – Cointelegraph Magazine

Top news of the week

FBI Reports Americans Lost $5.6 Billion to Cryptocurrency Fraud in 2023

The FBI’s Internet Crime Reporting Center has released its 2023 Cryptocurrency Fraud Report. According to the report, Americans lost $5.6 billion to cryptocurrency fraud that year, a 45% increase over 2022. According to the FBI, cryptocurrency-related reports made up just 10% of all reports received, but nearly 50% of all losses that year.

According to the report, of the 69,000 cryptocurrency-related complaints the FBI received in 2023, people over the age of 60 were the most affected, accounting for about $1.6 billion in losses. About 71% of cryptocurrency scams involved investment schemes, while about 10% involved call center scams and government impersonation scams.

The FBI received complaints from over 200 countries, but most complaints and losses occurred in the United States. Most of the losses were the result of trust fraud. The FBI offered one key piece of advice to avoid this type of fraud:

“One thing these scammers usually don’t do is they don’t actually meet you. If an investment opportunity comes to you from someone you’ve never met in person (…) be very wary of that advice.”

Cryptocurrency Becomes US Presidential Election Issue for the First Time – Survey

Cryptocurrencies like Bitcoin are likely to play a significant role in the upcoming U.S. presidential election, as a growing number of U.S. cryptocurrency investors voice concerns about how candidates will regulate the cryptocurrency industry.

According to a new report from Gemini, the cryptocurrency exchange founded by the Winklevoss twins, most cryptocurrency owners in the United States plan to consider the cryptocurrency regulatory stances of U.S. presidential candidates in the upcoming election in November.

Gemini’s latest “Global State of Crypto” report, released on September 10, features a survey of 6,000 adults randomly selected from the consumer populations of the United States, the United Kingdom, France, Singapore, and Turkey. The survey was conducted online from May 23 to June 28, 2024.

According to Gemini’s survey, 73% of U.S. respondents who currently own cryptocurrency said a candidate’s stance on cryptocurrency would “somewhat influence” their vote.

Additionally, 37% of respondents said that a presidential candidate’s stance on cryptocurrency would have a “significant impact” on their vote.

Caroline Ellison Asks for Time Sentence for Cooperating with US Government

Lawyers representing former Alameda Research CEO Caroline Ellison have recommended that she serve time in prison after pleading guilty to seven felony counts in connection with the collapse of cryptocurrency exchange FTX.

In a paper filed Sept. 10 in the Southern District of New York, Ellison’s defense team submitted letters from friends, colleagues and family members recommending a lighter sentence. The attorneys recommended that the former Alameda CEO be sentenced to three years of probation at a hearing Sept. 24, under the terms of the Probation Department’s Pre-Sentence Report (PSR).

The submission states, “PSR bases this recommendation on Caroline’s outstanding cooperation with the government, her otherwise impeccable record, and numerous testimonies of Caroline’s honesty and ethical conduct both before she began working at Alameda and after she left Alameda.”

“Caroline is not a risk of reoffending and poses no threat to public safety. Therefore, it would be helpful to promote respect for the law to grant her a lenient sentence in recognition of her early disclosure of the crime, her full acceptance of responsibility for the crime, and most importantly, her extensive cooperation with the government.”

Ellison’s attorney added:

“Without in any way diminishing the very seriousness of the offences here, we respectfully submit that the policy objectives and the interests of justice do not require that Caroline be sent to prison and we therefore request a non-custodial sentence.”

Vitalik: Anything L2 that isn’t at least ‘level 1’ is dead to me.

Ethereum co-founder Vitalik Buterin has reiterated his stance on Layer 2 decentralization, saying he only plans to recognize scaling solutions at “phase 1” of decentralization.

In a September 12 post on X, Buterin said he was taking this “seriously” and planned to only publicly mention “Stage 1+” Layer 2 networks starting next year.

“There may be a short grace period for truly interesting new projects,” he added.

“It doesn’t matter if I invested or you were my friend. Step 1 or fail.”

Buterin said many zero-knowledge rollup teams will be “getting to stage one by the end of the year” and that he’s “excited to see that come to fruition.”

“The era of glorifying rollups as multisigs is coming to an end. The era of cryptographic trust has arrived,” he said.

Bitcoin ETFs, Next Big Target for North Korean Hackers – Cyvers

North Korean hackers, including the infamous Lazarus Group, may begin targeting large financial institutions, including U.S.-based Bitcoin exchange-traded funds (ETFs).

The Lazarus Group has been linked to some of the most notorious hacks in the cryptocurrency space, including the $625 million Ronin Bridge hack, the largest hack in decentralized finance.

According to Michael Pearl, VP of GTM Strategy at on-chain security firm Cyvers, hackers may be turning their attention to U.S. Bitcoin ETFs due to the significant potential profits.

In an exclusive interview with Cointelegraph, Pearl said:

“Just recently, the FBI issued a warning that North Korean hackers are trying to infiltrate ETFs and steal money. So every ETF (…) is storing the underlying bitcoin somewhere. And it’s clear that someone is already planning and thinking of a way to steal it.”

Winners and Losers

Bitcoin on the weekend (Bitcoin) is in $60,436ether (Ethereum) ~ in $2,444 and Ripple (XRP) ~ in $0.57. Total market capitalization is $2.11 According to CoinMarketCap, it is worth around $1 trillion.

Among the top 100 cryptocurrencies, the top 3 altcoins that rose the most this week are Nervos Network. (CKB) 84.94% of Popcat (SOL) (Popcat) 50.15% and Bittensor (Tao) 37.63%

The top three altcoin losers this week are Helium. (HNT) 2.99% of TRON (transformation) +0.84% ​​​​and Unus Sed Leo (Leo) +1.13% up. For more information on cryptocurrency prices, read Cointelegraph’s market analysis.

Most memorable quotes

“We firmly believe that digital assets are not a passing trend, but a fundamental shift in the financial architecture.”

Bill WintersStandard Chartered CEO

“Pump.fun and Solana are the current fads for finding new gems, but they also target a specific type of anomalous trader, (…) which is completely different from leveraging and trading established memes like Pepe on major centralized exchanges.”

Iliad the SaviorFlooz’s Growth Lead

“Insurance for third-party custodians is a joke. It is simply not economical to insure the full value of these assets, given the risks involved and the difficulty in recovering lost funds.”

Jameson RaceCo-founder and Chief Security Officer of Casa

“For the first time in American history, cryptocurrency has become a major campaign issue in a presidential election.”

GeminiCryptocurrency Exchange

“Without in any way diminishing the very seriousness of the offences here, we respectfully submit that the policy objectives and the interests of justice do not require that Caroline be sent to prison and we therefore request a non-custodial sentence.”

Caroline Ellison’s Legal Team

“If history repeats itself, Bitcoin could see three consecutive months of positive gains. Monthly returns.”

Rect Capitalpseudonymous crypto analyst

Forecast for this week

VanEck, StoneX Analysts Predict Ether Price Rise to $12K-$22K

The spot price of Ethereum (ETH) could rise to between $12,000 and $22,000 by the end of this decade in a bullish scenario, according to estimates from two analysts at cryptocurrency brokerage StoneX Digital and asset manager VanEck.

Matthew Siegel, head of digital asset research at VanEck, estimates that the Ethereum network could generate up to $66 billion in annual free cash flow by 2030, which would push the spot price of ETH to $22,000 per token.

StoneX data scientist David Kroeger predicts that the ETH price will rise to around $4,600 in the next 18 months.

“But the upside is much higher, around $12,621, especially when you consider some of the upcoming technical upgrades that Ethereum is working on,” Kroger said during a StoneX panel with Siegel on Sept. 10.

These estimates are based on the expected increase in value that ETH holders will accrue from transaction fees as Ethereum grows its share of global transactions.

FUD of the week

Brazilian Bank Halts Trading of Local Crypto Token After Price Drops 97%

Nubank, one of the largest crypto banks in Latin America and backed by Warren Buffett’s Berkshire Hathaway, announced on September 10 that it would immediately suspend trading of its own cryptocurrency, Nucoin, which has fallen by more than 97% in price over the past year.

Nubank announced on October 19, 2022 that it will create Nucoin tokens on the Polygon blockchain. Almost two years after the announcement, the bank has closed the deal. The bank has given customers who hold at least 10 reals in Nucoin the option to convert them to Bitcoin or the stablecoin USDC until December 9.

As Cointelegraph Brazil reports, if a user does not proceed with the conversion, the cryptocurrency will be held for accumulation and “future benefits of the rewards program.”

According to press reports, Nubank said in an email to customers that “due to the potential reaction to this update, we have decided to immediately suspend trading in order to protect you and all participants from potential fluctuations in the market value of Nucoins.”

Kraken Denies SEC Claims, Says Digital Assets Are Not Securities

Centralized cryptocurrency exchange Kraken has responded to allegations from the U.S. Securities and Exchange Commission (SEC) that it violated federal securities laws. The SEC alleged that several digital assets offered by the cryptocurrency exchange constitute unregistered securities.

Kraken has categorically denied the claims in a legal filing, arguing that the assets in question do not meet the legal definition of securities under U.S. law.

The exchange’s defense is based on the strong argument that digital assets traded on Kraken, including Cardano (ADA), Algorand (ALGO), and Cosmos (ATOM), are not investment contracts.

eToro US to suspend nearly all cryptocurrency trading following SEC settlement

Popular stock trading platform eToro is suspending trading in almost all cryptocurrencies after reaching a settlement with the U.S. Securities and Exchange Commission.

eToro has been accused of operating an unregistered brokerage and clearing organization in connection with its cryptocurrency trading platform.

The SEC announced on September 12 that the trading platform had agreed to pay $1.5 million to resolve costs associated with operating as an unregistered broker-dealer and clearing organization.

As part of the settlement, eToro agreed to “limit the range of crypto assets that can be used for trading” in the United States and to cease and desist from violating applicable federal securities laws.

Under the agreement, eToro’s US customers will only be able to trade Bitcoin, Bitcoin Cash, and Ethereum tokens, and customers will be able to sell other cryptocurrencies for up to 180 days starting September 12.

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Editorial staff

Cointelegraph Magazine staff and reporters contributed to this article.