Around $8.8 million was lost to crypto exploits in January, a massive decline from the figures this time last year.
Aside from the bullish crypto market rally in January, there’s been more positive industry news as the month saw a decline in losses from exploits compared to the same time last year.According to data from blockchain security firm PeckShield on Jan. 31, there were $8.8 million in losses from crypto exploits in January.There were 24 exploits over the month, with $2.6 million worth of crypto being sent to mixers such as Tornado Cash. The breakdown of assets sent to mixers includes 1,200 Ether (ETH) and around 2,668 BNB (BNB).The January figures are 92.7% lower than the $121.4 million lost to exploits in January 2022.#PeckShieldAlert ~24 exploits grabbed $8.8M in January 2023. As of January 31st, 2023, ~$2.6M worth of stolen funds (~2,668 $BNB & 1,200 $ETH) were transferred into Mixers (TornadoCash, Fixedfloat, and sideshift[.]ai). pic.twitter.com/KlGmDmKFbI— PeckShieldAlert (@PeckShieldAlert) January 31, 2023
PeckShield reported the largest exploit from last month, representing 68% of the total, was the one carried out on the DeFi lending and borrowing platform LendHub which lost $6 million on Jan. 12.Other notable exploits for the month included Thoreum Finance which lost $580,000 and Midas Capital which was exploited for $650,000 in a flash loan attack.January’s figure is also down 68% from December 2022 which saw almost $27.3 million in exploit losses, according to PeckShield.Other losses not included in the data include a $2.6 million rug pull on the FCS BNB Chain token, according to DeFiYield’s Rekt database. There was a further $150,000 lost to fake BONK tokens, and a $200,000 rug pull on the Doglands Metaverse gaming platform, DeFiYield reported.A phishing attack on the GMX decentralized trading protocol on Jan. 4 also resulted in a victim losing as much as $4 million. Related: Crypto wallets combat scammers with transaction previews and blocklistsDespite the relatively quiet month, blockchain security company CertiK told Cointelegraph in early January that there is unlikely to be a slowdown in attacks and exploits this year.The firm also reported that the $62 million in crypto stolen in December was the “lowest monthly figure” in 2022.As of the end of last year, the ten largest exploits of 2022 resulted in a whopping $2.1 billion stolen from crypto protocols.
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Tesla’s latest filing with the U.S. Securities and Exchange Commission (SEC) shows that the fair market value of the company’s bitcoin holdings was $191 million at the end of 2022. In addition, billionaire Elon Musk’s electric car company recorded $204 million of impairment losses resulting from changes in the prices of bitcoin. Tesla’s Digital Assets […]
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Randall Crater will pay back the millions lost by victims of his fraudulent crypto scheme and spend 100 months in jail followed by a three-year supervised release.
Founder of “My Big Coin” and convicted fraudster Randall Crater has been sentenced to 100 months in prison and has been ordered to pay over $7.6 million to the victims of his fraudulent scheme. The U.S. Department of Justice (DOJ) said on Jan. 31 that Crater was sentenced by United States District Court Judge Denise Casper in Massachusetts.The sentence comes around six months after Crater was convicted by a federal jury on Jul. 21, 2022, on four counts of wire fraud, three counts of unlawful monetary transactions and one count of operating an unlicensed money-transmitting business.Randall Crater, the founder of “My Big Coin,” a purported cryptocurrency company, was sentenced today to more than eight years in federal prison for a multi-million dollar fraud scheme uncovered by #FBI Boston and @USPIS_BOS. https://t.co/567NYPndRU pic.twitter.com/a3eKaogij4— FBI Boston (@FBIBoston) January 31, 2023
My Big Coin was founded by Crater in 2013 and falsely marketed as a cryptocurrency payment service, luring victims between 2014 and 2017.Crater claimed the coins on My Big Coin were fully functional cryptocurrencies backed by gold and that the platform had a partnership with Mastercard. Crater also marketed the “My Big Coin Exchange,” advertised as a crypto exchange where the coins could be swapped for U.S. dollars and other fiat currencies. Randall Crater’s LinkedIn account photo. Image: LinkedIn A significant portion of the $7.6 million obtained by Crater and his marketing team went towards a house, several cars and over $1 million in antiques, artwork and jewelry. U.S. Attorney Rachael Rollins said in a statement the damage done by Crater inflicted a serious amount of trauma and financial hardship on his victims:“For nearly four years, Mr. Crater perpetrated a brazen fraud scheme that preyed on investors and customers who put their faith in him and his fake business, resulting in victim losses of over $7.5 million.”“His lies and deception inflicted real trauma, pain and hardship on the lives of 55 individual victims and their families who funneled their money into bank accounts Mr. Crater controlled and used to finance his extravagant lifestyle,” she added.Related: 800 victims of ‘massive’ Bitconnect fraud to receive $17M restitutionEven after his conviction, Crater continued to protest his innocence and stated in an Oct. 21, 2022, Youtube video that a My Big Coin credit card did in fact exist and claimed an investor testified under oath to having used the card multiple times.Legal action against Crater was first initiated when now-former Judge Rya Zobel of the Massachusetts District Court on Sept. 25, 2018, ruled against a motion to dismiss a case that had been launched by the U.S. Commodity Futures Trading Commission (CFTC). The DOJ officially laid the criminal charges against Crater shortly after on Feb. 19, 2019.After Crater’s 100-month tenure behind bars, he will be subject to a supervised release for the following three years.
A report suggests companies are able to register in the U.K. very easily which makes them appear more credible to potential scam victims.
The United Kingdom is host to at least 168 companies accused of running fraudulent crypto or foreign exchange (forex) scams according to an independent analysis.A Jan. 29 joint investigation by media firms the Bureau of Investigative Journalism and the Observer suggested organized crime groups are using the U.K. as their base due to its “lax regulation.”The actual number of U.K.-based crypto or forex companies involved in scams is likely far greater than 168 as the number was calculated by reviewing lists of suspected shell companies and cross-referencing them with reports of fraudulent activity on various websites.Around half of the companies found were linked to so-called “pig-butchering scams.”A pig-butchering scams is an insidious scheme where the scammer builds trust with the victim — often incorporating romance — before convincing them to deposit money or crypto onto a trading platform or virtual wallet the scammer controls.The scammer then continues to “fatten” the victim and build further trust before persuading them to transfer a much larger sum, only to then make off with the funds.Victims were often approached on social media or through dating websites such as Tinder according to the report.Additionally, many of the victims interviewed in the report suggested the companies appeared more legitimate as they were based in the U.K. and believed they would not have been scammed had they been located elsewhere.Registering a company in the U.K. costs as little as $14.85 (£12) and requires no form of identification, making it easy for fraudulent companies to register there and gain “sham credibility.”Companies are required to provide a U.K. office address to register, however, which has led to some residential addresses being bombarded with letters intended for companies that claim to have an office there. Letters that a U.K. resident claimed to have received that were intended for shell companies registered at their address. Source: The Observer“What’s been happening in the U.K. is unconscionable,” noted financial crime investigator Graham Barrow in the report. “We have known for 20 years at least that U.K. companies are being used in these scams and that we are probably the world’s biggest provider of scam companies.”Related: UK-native stablecoin integrates into 18,000 ATMs nationwideThe U.K. government has been trying to crack down on crypto companies in the region, with the U.K. Financial Conduct Authority requiring that all businesses who carry on crypto asset activity register with them as of Jan. 10, 2020.The regulator has been very stringent with its approvals, however, with many crypto-related businesses continuing to operate as unregistered businesses as it tries to find a balance between providing a safe environment for investors and supporting innovation in the industry.
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Asset management firm Devere Group says that 82% of millionaires surveyed have asked their financial advisors about adding cryptocurrencies, such as bitcoin, to their portfolios despite the crypto winter. “Wealthy investors understand that digital currencies are the future of money, and they don’t want to be left in the past,” the firm’s chief executive said. […]
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Positive signs of Bitcoin’s recovery can be seen in on-chain, spot exchange and futures data.
Bitcoin (BTC) had a rough year all throughout 2022.But fresh on-chain and futures market data show positive signs that the leading cryptocurrency by market capitalization has started to recover. After a bevy of short liquidations, the futures market is pointing toward renewed equilibrium. According to data from Glassnode, short position liquidations cleared out unhealthy market speculators, on-chain and exchange data now point to an improving spot market and exchange netflows. A large group of investors that were previously at a loss is now back in the category that Glassnode analysts label as “unrealized profits.” Massive short liquidations set the groundwork for new investors to thriveFutures data typically hold an equilibrium between longs and shorts. As the market moves, investors tend to update their futures to avoid liquidation. Conversely, in mid-January investors were caught off guard which resulted in an all-time high of 85% short liquidations. Futures liquidation long versus short ratio. Source: GlassnodeThe short liquidation dominance has helped fuel the current Bitcoin rally. In January 2023, over $495 million in short futures were liquidated. Liquidated shorts create automatic Bitcoin purchases thus driving up the BTC price. The year-to-date liquidations have three large waves that peaked at $165 million in one day of liquidations.Total liquidations. Source: GlassnodeAfter the historic amount of short liquidations, the futures market is trending towards longs. On Jan. 30, 51.46% of open interests are long positions rather than shorts. Long versus short ratio. Source: CoinglassThe liquidation of shorts not only helped Bitcoin price rally but also seemingly suggests a return of positive sentiment in the BTC market.Glassnode researchers said:“Across both perpetual swap, and calendar futures, the cash and carry basis is now back into positive territory, yielding 7.3% and 3.3% annualized, respectively. This comes after much of November and December saw backwardation across all futures markets, and suggests a return of positive sentiment, and perhaps with a side of speculation.”Bitcoin annualized premium. Source: GlassnodeCentralized exchange netflows reach equilibrium In March 2020 centralized exchange (CEX) Bitcoin balances reached an all-time high. Since the all-time high was reached, Bitcoin has flowed out of spot exchanges. Approximately 2.25 million BTC are currently held across 21 of the top exchanges, which is a multi-year low. The 11.7% of the total Bitcoin supply held on centralized exchanges was last witnessed in February 2018.Bitcoin exchange balance. Source: GlassnodeTypically throughout Bitcoin’s history, exchange inflows and outflows are similar creating an even balance. The balance was disrupted in November 2022 when net outflows of Bitcoin from exchanges reached $200 million to $300 million per day. The large outflow during this period was historic, reaching negative 200,000 Bitcoin leaving exchanges for the month. Bitcoin net position change on exchanges. Source: GlassnodeAs Bitcoin started gaining bullish momentum in January 2023, centralized exchange inflow and outflow has normalized. The netflows are now closer to neutral showing a reduction in the high outflow trend.Multiple Bitcoin investor cohorts return to the “unrealized profit” zoneBitcoin’s movement in and out of exchanges helps provide analysts an estimate for investors’ BTC acquisition price. During the 2022 bear market, only investors from before 2017 were in potential profit. Investors arriving to Bitcoin after 2018 were all at an unrealized loss. According to Glassnode researchers,“Through the 2022 downtrend, only those investors from 2017 and earlier avoided hitting a net unrealized loss, with the class of 2018+ seeing their cost basis taken out by the FTX red candle. The current rally however has pushed the class of 2019 ($21.8k) and earlier back into an unrealized profit.”Bitcoin average withdrawal price. Source: GlassnodeThe fact that a growin number of investor cohorts have returned to profitability is a good sign, especially after Bitcoin witnessed record realized losses in December 2022. Two of the largest investor groups, those who purchased BTC on Coinbase and Binance, hold an average BTC acquisition price of $21,000. As Bitcoin continues to try to reach $24,000, any upcoming correction caused by macro factors may push down the unrealized profits in these groups. Exchange average withdrawal price. Source: GlassnodePositive signs of Bitcoin’s price recovery can be seen in on-chain, spot exchange and futures data. The futures market is indicating a renewed equilibrium following a record-high amount of short liquidations. The market is now showing improved exchange netflows and spot market activity suggests that investors are slowly trickling back into the crypto market.The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.