Cryptocurrency News

[LFC]

Another day, another crypto hack.

Hackers stole roughly $625 million in cryptocurrency from the Ronin blockchain and the play-to-earn Axie Infinity video game network that operates on top of it, according to a disclosure from the Ronin Network late Tuesday. The hack is believed to be the biggest theft of cryptocurency in history.

The hack occurred on March 23, but wasn’t discovered until Tuesday, according to an explanation posted online by the Ronin Network. The hackers made off with about 173,600 ether, the second most popular crypto coin behind bitcoin, and 25.5 million USDC, a stablecoin pegged to the U.S. dollar.

The hacker’s crypto wallet, which is available to view on Etherscan, shows that most of the funds haven’t been moved since they were extracted from the Ronin Network. But there’s evidence the hacker is trying to move tiny amounts of crypto in several transactions, perhaps a way to figure out what avenue might be safe for extracting the wealth.

Ronin explained in a substack post that the hackers were able to gain control of five of the nine validator nodes on the network.

[LFC]

Zuck Bucks and other tokens try to make a comeback.

Meta has drawn up plans to introduce virtual coins, tokens, and lending services to its apps, as Facebook’s parent company pursues its finance ambitions despite the collapse of a project to launch a cryptocurrency.

The company, led by chief executive Mark Zuckerberg, is seeking alternative revenue streams and new features that can attract and retain users, as popularity falls for its main social networking products such as Facebook and Instagram—a trend that threatens its $118 billion-a-year ad-based business model.

Facebook’s financial arm, Meta Financial Technologies, has been exploring the creation of a virtual currency for the metaverse, which employees internally have dubbed “Zuck Bucks,” according to several people familiar with the efforts.

This is unlikely to be a cryptocurrency based on the blockchain, some of the people said. Instead, Meta is leaning toward introducing in-app tokens that would be centrally controlled by the company, similar to those used in gaming apps such as the robux currency in the popular children’s game Roblox.

According to company memos and people close to the plans, Meta is also looking into the creation of “social tokens” or “reputation tokens,” which could be issued as rewards for meaningful contributions in Facebook groups, for example. Another effort is to make “creator coins” that might be associated with particular influencers on its photo-sharing app Instagram.

[LFC]

North Korea is doing quite the business in stealing cryptocurrency.

The hackers behind the March 23 theft of roughly $625 million worth of cryptocurrency from the Ronin blockchain are based in North Korea, according to a new announcement from the FBI. The federal law enforcement agency claims the Lazarus Group, North Korea’s most notorious hacker gang, is laundering the money for Kim Jong Un’s regime and the U.S. Treasury is working to stop the flow of funds however it can.

“The FBI continues to combat malicious cyber activity including the threat posed by the Democratic People’s Republic of Korea to the U.S. and our private sector partners. Through our investigation we were able to confirm Lazarus Group and APT38, cyber actors associated with the DPRK, are responsible for the theft of $620 million in Ethereum reported on March 29th,” the FBI said in a statement late Thursday.

“The FBI, in coordination with Treasury and other U.S. government partners, will continue to expose and combat the DPRK’s use of illicit activities – including cybercrime and cryptocurrency theft – to generate revenue for the regime,” the FBI statement continued.

The hackers made off with about 173,600 ether, according to the Ronin Network, and 25.5 million USDC, a stablecoin pegged to the U.S. dollar. Lazarus Group has allegedly been behind the theft of over $1 billion in crypto and cash over the years, becoming a successful source of revenue for North Korea’s heavily sanctioned economy.

[LFC]

I'm confused about this one. Every server room I've been in, including a multi-story hosting facility with many server rooms, is incredibly well insulated because the cooling costs would skyrocket if it wasn't. WTF are they doing that makes these crypto mining facilities noisy to those living outside?

Since January 2021, the 28,000 citizens in Cherokee County, North Carolina, have dealt with 24/7 noise and vibration from a Bitcoin mining facility run on land owned by ANKR Mining Solutions Inc. When construction began on a second crypto mine Nov. 15, 2021, Roberson drafted a petition that was signed by 2,000 people in an attempt to stop it from opening, amid concerns over increased pollution and ecological damage. According to Roberson, at least 700 of these signatures came from citizens in the county.

Yet the second crypto mine opened anyway this past February. “We used to have bald eagles off our deck, and we haven’t seen them in months,” Roberson told The Daily Beast. “So many deer have been hit on the road right out in front of it [the crypto mining facility].”

Phoebe Thompson, who lives across from the new facility, has also seen an increase in the amount of deer being hit on the road and horses trying to escape their pasture. Anthropogenic noise pollution, like the constant humming of a crypto mine, can alter the behaviors and breeding patterns of animals and can even affect pollination of certain plants.

Despite these disruptions, three out of the five members of the Cherokee County Board of Commissioners refuse to impose any zoning regulations. That includes the head of the board, Dan Eichenbaum, a staunch libertarian who runs a podcast called Dr. Dan’s Freedom Forum.

These types of sites are springing up more and more in the U.S. these days, after China banned crypto mining in 2020. But noise pollution is just a minor part of the environmental devastation wrought by crypto mining. Annually, Bitcoin uses as much electrical energy as Thailand and has a carbon footprint comparable to that of the Czech Republic.

[indy]

May 3, 2022 14:40:47 GMT LFC said:

I'm confused about this one. Every server room I've been in, including a multi-story hosting facility with many server rooms, is incredibly well insulated because the cooling costs would skyrocket if it wasn't. WTF are they doing that makes these crypto mining facilities noisy to those living outside?

Since January 2021, the 28,000 citizens in Cherokee County, North Carolina, have dealt with 24/7 noise and vibration from a Bitcoin mining facility run on land owned by ANKR Mining Solutions Inc. When construction began on a second crypto mine Nov. 15, 2021, Roberson drafted a petition that was signed by 2,000 people in an attempt to stop it from opening, amid concerns over increased pollution and ecological damage. According to Roberson, at least 700 of these signatures came from citizens in the county.

Yet the second crypto mine opened anyway this past February. “We used to have bald eagles off our deck, and we haven’t seen them in months,” Roberson told The Daily Beast. “So many deer have been hit on the road right out in front of it [the crypto mining facility].”

Phoebe Thompson, who lives across from the new facility, has also seen an increase in the amount of deer being hit on the road and horses trying to escape their pasture. Anthropogenic noise pollution, like the constant humming of a crypto mine, can alter the behaviors and breeding patterns of animals and can even affect pollination of certain plants.

Despite these disruptions, three out of the five members of the Cherokee County Board of Commissioners refuse to impose any zoning regulations. That includes the head of the board, Dan Eichenbaum, a staunch libertarian who runs a podcast called Dr. Dan’s Freedom Forum.

These types of sites are springing up more and more in the U.S. these days, after China banned crypto mining in 2020. But noise pollution is just a minor part of the environmental devastation wrought by crypto mining. Annually, Bitcoin uses as much electrical energy as Thailand and has a carbon footprint comparable to that of the Czech Republic.

It's the cooling fans. Insulation just isn't that effective against noise. You need noise ordinances and in the rural areas where these things are being built the noise ordinances are pretty lax to accommodate farmers.

[goldenvalley]

May 3, 2022 14:40:47 GMT LFC said:

I'm confused about this one. Every server room I've been in, including a multi-story hosting facility with many server rooms, is incredibly well insulated because the cooling costs would skyrocket if it wasn't. WTF are they doing that makes these crypto mining facilities noisy to those living outside?

Since January 2021, the 28,000 citizens in Cherokee County, North Carolina, have dealt with 24/7 noise and vibration from a Bitcoin mining facility run on land owned by ANKR Mining Solutions Inc. When construction began on a second crypto mine Nov. 15, 2021, Roberson drafted a petition that was signed by 2,000 people in an attempt to stop it from opening, amid concerns over increased pollution and ecological damage. According to Roberson, at least 700 of these signatures came from citizens in the county.

Yet the second crypto mine opened anyway this past February. “We used to have bald eagles off our deck, and we haven’t seen them in months,” Roberson told The Daily Beast. “So many deer have been hit on the road right out in front of it [the crypto mining facility].”

Phoebe Thompson, who lives across from the new facility, has also seen an increase in the amount of deer being hit on the road and horses trying to escape their pasture. Anthropogenic noise pollution, like the constant humming of a crypto mine, can alter the behaviors and breeding patterns of animals and can even affect pollination of certain plants.

Despite these disruptions, three out of the five members of the Cherokee County Board of Commissioners refuse to impose any zoning regulations. That includes the head of the board, Dan Eichenbaum, a staunch libertarian who runs a podcast called Dr. Dan’s Freedom Forum.

These types of sites are springing up more and more in the U.S. these days, after China banned crypto mining in 2020. But noise pollution is just a minor part of the environmental devastation wrought by crypto mining. Annually, Bitcoin uses as much electrical energy as Thailand and has a carbon footprint comparable to that of the Czech Republic.

They probably went as cheap as they could so either the material is bad or they didn't bother with enough insulation.  They're out in the boonies of North Carolina and figured the locals wouldn't know what to demand before approving building permits.  

[LFC]

May 3, 2022 15:55:24 GMT indy said:

It's the cooling fans. Insulation just isn't that effective against noise. You need noise ordinances and in the rural areas where these things are being built the noise ordinances are pretty lax to accommodate farmers.

I'm still staggered that the fans can be heard outside of the building. It must be built of cardboard.

On noise ordinances I suspect that there are few to none that even cover this case. It's a constant low hum. I believe these ordinances only care about decibels and perhaps time of day. I doubt a low decibel hum is covered at all, no matter how awful it would be to live around.

[pnwguy]

May 3, 2022 16:04:55 GMT LFC said:

May 3, 2022 15:55:24 GMT indy said:

It's the cooling fans. Insulation just isn't that effective against noise. You need noise ordinances and in the rural areas where these things are being built the noise ordinances are pretty lax to accommodate farmers.

I'm still staggered that the fans can be heard outside of the building. It must be built of cardboard.

On noise ordinances I suspect that there are few to none that even cover this case. It's a constant low hum. I believe these ordinances only care about decibels and perhaps time of day. I doubt a low decibel hum is covered at all, no matter how awful it would be to live around.

Not to agree with Dumpster, but that can be said about poorly located wind turbines as well.  But even worse than the noise can be the strobe effect from either a rising or setting sun creating shadowing that can make people feel like they took an acid hit.  Turbine site approval needs to take in those considerations.  

[LFC]

People are clearly not running to crypto as a hedge against a recession.

The price of one bitcoin briefly fell below $27,000 on Thursday morning, the lowest price for the cryptocurrency since 2020. The world's leading virtual currency bounced back later in the day and now trades at $28,600. But that's still 20 percent below the price one week ago and 57 percent below last November's peak.

Bitcoin's fall is part of a broader cryptocurrency sell-off. Ethereum is currently down 8 percent over the last 24 hours and 28 percent over the last week. Additionally, cardano (39 percent), dogecoin (36 percent), and litecoin (32 percent) have all fallen during the past week.

Perhaps most alarming for the cryptocurrency world: "Stablecoin" tether lost its peg to the US dollar early Thursday, briefly dipping to 96 cents. Tether is now trading at $1 once again.

Paolo Ardoino, the CTO of Bitfinex, the company that created tether, tweeted on Thursday morning that the company had redeemed $300 million worth of tether to defend the peg "without a sweat drop." He vowed to redeem as much as necessary to keep its price at par with the dollar.

[LFC]

Meanwhile El Salvador is doubling down on Bitcoin.

Bitcoin's price has plunged in recent days, briefly falling below $30,000 on Monday evening and again on Wednesday morning. Nayib Bukele, the bitcoin-boosting president of El Salvador, sees bitcoin's low price as a buying opportunity. He announced on Monday that El Salvador had purchased another 500 bitcoin. With one bitcoin worth around $31,000, this represented a $15.5 million bet.

Bukele has made the embrace of bitcoin a signature of his presidency. Last year, El Salvador became the first nation in the world to make bitcoin legal tender alongside the US dollar. In an effort to encourage adoption of bitcoin, El Salvador launched wallet software called Chivo and offered Salvadorans $30 if they gave it a try.

Bloomberg calculates that El Salvador has accumulated a total of 2,301 bitcoins since it started buying them last September. Most were bought at prices above $45,000, so this nation of 6 million people has lost tens of millions of dollars speculating on bitcoin.

A precarious financial situation

The government of El Salvador is heavily in debt and has an $800 million debt payment coming due in January. Last week, ratings agency Moody's downgraded El Salvador's debt, warning that the Central American nation may be forced to default. El Pais reports that Salvadoran bonds are trading at around 40 percent of their face value, a sign that traders see this as a serious risk.

El Salvador's bitcoin experiment has worsened the country's already precarious financial situation. That's not only because Bukele has tied up tens of millions of dollars in the volatile cryptocurrency. It has also damaged Bukele's relationship with the International Monetary Fund, which is currently considering whether to offer El Salvador a $1.3 billion line of credit.

In January, the IMF recommended that El Salvador liquidate its bitcoin holdings in order to shore up its fragile balance sheet. The Bukele administration reacted angrily, with Treasury Minister Alejandro Zelaya declaring that "no international organization is going to make us do anything, anything at all." Bitcoin's price has fallen by about 17 percent since the IMF made its recommendation.

[LFC]

Dafuq? I guess somebody shouldn't have been "investing" (i.e. gambling) in crypto.

Do Kwon, the founder of the cryptocurrency Luna and the stablecoin TerraUSD, has reportedly been in contact with police after a possible investor in the coin “trespassed” at his home, according to a new report from South Korea’s largest newspaper, The Chosun Ilbo. Crypto News reports the investor lost roughly $1.56 million in the collapse of Luna, a claim Gizmodo could not independently verify.

An unnamed man rang the doorbell to Kwon’s apartment around 6:23 p.m. local time Thursday night, according to Chosun, and Kwon’s wife answered the door. The man reportedly asked something like, “Is your husband home?” and then proceeded to run off.

Luna was worth over $54 as recently as Monday morning, when it was the fourth most popular crypto coin in the world, but plunged below $0.01 on Thursday. The coin has been pulled from major exchanges like Binance and the operation of its blockchain has been halted, making Luna effectively worthless as of Friday.

[indy]

Beanstalk describes itself as a “decentralized credit based stablecoin protocol.” It operates a system where participants earn rewards by contributing funds to a central funding pool (called “the silo”) that is used to balance the value of one token (known as a “bean”) at close to $1.

Like many other DeFi projects, the creators of Beanstalk — a development team called Publius — included a governance mechanism where participants could vote collectively on changes to the code. They would then obtain voting rights in proportion to the value of tokens that they held, creating a vulnerability that would prove to be the project’s undoing.

The attack was made possible by another DeFi product called a “flash loan,” which allows users to borrow large amounts of cryptocurrency for very short periods of time (minutes or even seconds). Flash loans are meant to provide liquidity or take advantage of price arbitrage opportunities but can also be used for more nefarious purposes.

According to analysis from blockchain security firm CertiK, the Beanstalk attacker used a flash loan obtained through the decentralized protocol Aave to borrow close to $1 billion in cryptocurrency assets and exchanged these for enough beans to gain a 67 percent voting stake in the project. With this supermajority stake, they were able to approve the execution of code that transferred the assets to their own wallet. The attacker then instantly repaid the flash loan, netting an $80 million profit.

Based on the duration of an Aave flash loan, the entire process took place in less than 13 seconds.

www.theverge.com/2022/4/18/23030754/beanstalk-cryptocurrency-hack-182-million-dao-voting

[LFC]

Crypto is getting bloodied in the current economy. BTW Bitcoin started the year at 47,733. Today it's at 21,154 and that's a slight recovery from its YTD low less than a week ago.

The great crypto implosion of 2022 is starting to look more and more like a classic run on the banks.

Crypto futures and lending exchange platform Coinflex shocked users on Thursday with an announcement saying it would pause all withdrawals, citing “extreme market conditions” and continued uncertainty. Users are, as of press time, unable to pull any money out of their Coinflex accounts. The hectic pause comes one week after similar sudden withdrawal freezes at Celsius and Binance, two of the biggest cryptocurrency exchanges in the world.

In his blog post, Coinflex CEO Mark Lamb said he was “confident” the situation would be repaired and result in a restoration of withdraws. Market conditions aren’t looking good, though. Bitcoin recently dipped to its lowest point in 18 months and sent droves of crypto owners swimming for shore. Lamb gave an estimated date for when withdrawals would be allowed again: June 30, with an update pegged for June 27.

“Please note that these dates are estimates based on our current understanding of the situation,” Lamb said. “We will give more clarity on the details and updates to the situation as soon as possible.” Coinflex did not immediately respond to a request for comment.

Coinflex wasn’t’ the only one feeling the heat this week. On Wednesday, trading platform Voyager announced it decided to cut its daily withdrawal limit by more than half, $25,000 to $10,000. Voyager’s belt-tightening came after it announced it was considering issuing a notice of default to the hobbling crypto hedge fund Three Arrows Capital. Voyager claims Three Arrows Capital owes it a devilish $666 million worth of Bitcoin in unpaid loans. The hedge fund reportedly failed to meet its margin calls from lenders earlier this month. Voyager did not immediately respond to a request for comment.

The crypto withdrawal halting horrorshow kicked off last week with Celsius. Babel Finance, another major player in the space, followed suit days later due to what it described as “major fluctuations,” in the crypto market.

[AnBr]

[LFC]

Oops.

Celsius, the crypto trading platform that halted all withdrawals a month ago and filed for bankruptcy yesterday, has a $1.2 billion sized hole in its balance sheet, according to a bankruptcy filing and new report from the Financial Times. What does that mean for users? You’re probably not getting all your money back, if you see some at all.

Celsius lists $5.5 billion of liabilities in its bankruptcy filing, $4.7 billion of which is owed to Celsius users. The problem is that Celsius lists just $4.3 billion of assets, many of it illiquid, and that’s even assuming those have been calculated properly. A large part of Celsius’s holdings is in its own crypto token, also known as Celsius, which has taken a nosedive in the past year. And roughly $1 billion of assets are tied up in the company’s bitcoin mining center.

Celsius was notorious for offering absurdly high interest rates on crypto—as high as 18% in some cases—but it has to make increasingly risky bets to pay those off. Where did all the money go? Celsius explains in the filing that the company made bad gambles.

[goldenvalley]

Jul 15, 2022 18:38:47 GMT LFC said:

Oops.

Celsius, the crypto trading platform that halted all withdrawals a month ago and filed for bankruptcy yesterday, has a $1.2 billion sized hole in its balance sheet, according to a bankruptcy filing and new report from the Financial Times. What does that mean for users? You’re probably not getting all your money back, if you see some at all.

Celsius lists $5.5 billion of liabilities in its bankruptcy filing, $4.7 billion of which is owed to Celsius users. The problem is that Celsius lists just $4.3 billion of assets, many of it illiquid, and that’s even assuming those have been calculated properly. A large part of Celsius’s holdings is in its own crypto token, also known as Celsius, which has taken a nosedive in the past year. And roughly $1 billion of assets are tied up in the company’s bitcoin mining center.

Celsius was notorious for offering absurdly high interest rates on crypto—as high as 18% in some cases—but it has to make increasingly risky bets to pay those off. Where did all the money go? Celsius explains in the filing that the company made bad gambles.

Well they can't say it was scam.  

[LFC]

Another day, another scam.

The CEO of a purported cryptocurrency investment company pleaded guilty for his role in a crypto fraud scheme that raised $21 million from investors, the Department of Justice said.

Michael Alan Stollery (aka "Michael Stollaire"), 54, was CEO and founder of the California-based Titanium Blockchain Infrastructure Services (TBIS). He pleaded guilty Friday to one count of securities fraud in US District Court for the Central District of California and faces up to 20 years in prison at his scheduled sentencing in November, according to a Department of Justice announcement Monday.

Stollery launched his fraudulent crypto offering in January 2018, according to the DOJ. The Securities and Exchange Commission previously sued Stollery and his company and won a judgment that will return at least some of the money to defrauded investors.

The DOJ said Stollery lured investors to purchase his company's cryptocurrency "through a series of false and misleading statements." Stollery "admitted that he did not use the invested money as promised but instead commingled the ICO investors' funds with his personal funds, using at least a portion of the offering proceeds for expenses unrelated to TBIS, such as credit card payments and the payment of bills for Stollery's Hawaii condominium," according to the DOJ press release.

[LFC]

Only in Texass. The private companies get the spoils and the end user gets the shaft. ERCOT is working exactly as intended.

At least one big bitcoin mining operation in Texas that was not actually mining much bitcoin during this season’s record-breaking heat netted millions of dollars in profits—more than they would have if they just kept on mining without any shutdowns. It’s thanks to power purchase agreements signed with the local grid, allowing them to sell electricity they purchased earlier back to the provider for a tidy sum.

Riot Blockchain itself announced it had made an estimated $9.5 million in power credits thanks to the multiple times it shut down its mining rigs. This was even more than the amount the company gained in selling bitcoin that month. The company’s page said it sold 275 bitcoin, with net proceeds equalling just $5.6 million. This is compared to last year when the company said it produced 444 bitcoin, worth approximately $16 million just before the price of BTC really spiked toward the tail end of 2021.

This net profit has proved that even despite the downturn in the crypto market and disruptions to mining operations, these companies are still set on their path to keep on keeping on with their incredibly power-hungry operations. Digiconomist’s bitcoin energy graph shows that kilowatt hours per year peaked in the beginning of June but then tanked throughout June/July. That line’s starting to inch up once again, and even at its depleted state it’s still way above U.S. bitcoin energy consumption back in March, 2021.

[LFC]

Crypto is starting to face U.S. regulatory agencies and that means some things won't be tolerated.

If you have paid casual attention to crypto news over the past few years, you probably have a sense that the crypto market is unregulated—a tech-driven Wild West in which the rules of traditional finance do not apply.

If you were Ishan Wahi, however, you would probably not have that sense.

Wahi worked at Coinbase, a leading crypto exchange, where he had a view into which tokens the platform planned to list for trading—an event that causes those assets to spike in value. According to the US Department of Justice, Wahi used that knowledge to buy those assets before the listings, then sell them for big profits. In July, the DOJ announced that it had indicted Wahi, along with two associates, in what it billed as the “first ever cryptocurrency insider trading tipping scheme.” If convicted, the defendants could face decades in federal prison.

On the same day as the DOJ announcement, the Securities and Exchange Commission made its own. It, too, was filing a lawsuit against the three men. Unlike the DOJ, however, the SEC can’t bring criminal cases, only civil ones. And yet it’s the SEC’s civil lawsuit—not the DOJ’s criminal case—that struck panic into the heart of the crypto industry. That’s because the SEC accused Wahi not only of insider trading, but also of securities fraud, arguing that nine of the assets he traded count as securities.

This may sound like a dry, technical distinction. In fact, whether a crypto asset should be classified as a security is a massive, possibly existential issue for the crypto industry. The Securities and Exchange Act of 1933 requires anyone who issues a security to register with the SEC, complying with extensive disclosure rules. If they don’t, they can face devastating legal liability.

Over the next few years, we’ll find out just how many crypto entrepreneurs have exposed themselves to that legal risk. Gary Gensler, whom Joe Biden appointed to chair the SEC, has for years made clear that he believes most crypto assets qualify as securities. His agency is now putting that belief into practice. Apart from the insider trading lawsuit, the SEC is preparing to go to trial against Ripple, the company behind the popular XRP token. And it is investigating Coinbase itself for allegedly listing unregistered securities. That’s on top of a class-action lawsuit against the company brought by private plaintiffs. If these cases succeed, the days of the crypto free-for-all could soon be over.

[LFC]

Oct 6, 2021 21:07:34 GMT LFC said:

Both TrumpCoin and MAGACoin are rumbling around in some state or another. From July:

For fun I took a quick look at quotes for TrumpCoin ($0.01192 USD) and MAGA Coin ($0.001258 USD). Gee, if only I had invested back then I could have lost most of my retirement funds by now.

[LFC]

Ethereum just killed the industry built around mining them.

Ethereum developers today executed the "Merge," an upgrade that eliminates mining and dramatically reduces the energy consumption of the world's second-biggest cryptocurrency. Today's action "completed Ethereum's transition to proof-of-stake consensus, officially deprecating proof-of-work and reducing energy consumption by ~99.95 percent," the Ethereum.org Merge page said.

The Ethereum blockchain has existed since July 2015, and planning for today's change has been in the works for several years. Because a botched transition could have caused chaos, Ethereum developers over the past year have "repeatedly pushed back the date of 'the Merge' to give themselves more time to prepare," as Ars writer Timothy B. Lee previously wrote in a detailed feature on the transition. The Merge will "put the world's Ethereum miners out of work," as the new system doesn't require the powerful graphics cards previously needed to maintain the blockchain and create new ether, Lee wrote.

The switch was highly anticipated. "When the Merge officially kicked in at 6:43 a.m. UTC, more than 41,000 people were tuned in on YouTube to an 'Ethereum Mainnet Merge Viewing Party,'" CoinDesk wrote. "They watched with bated breath as key metrics trickled in suggesting that Ethereum's core systems had remained intact. After about 15 long minutes, the Merge officially finalized, meaning it could be declared a success."

Before the Merge, Ethereum's annualized power consumption was comparable to the country of Chile's, and its carbon footprint was similar to Hong Kong's, according to Digiconomist's Ethereum Energy Consumption Index.

Interesting side effect.

For most of the world, yesterday's long-awaited Ethereum "Merge"—which took the cryptocurrency from proof-of-work mining to a proof-of-stake model—is notable for cutting Ethereum's energy consumption by 99.95 percent. But for gamers, the Merge has already contributed to a dramatic shift in the market for GPUs and could continue to drive down graphics card prices going forward.

In recent years, crypto miners had been scooping up as many GPUs as they could to power their mining rigs, leading to short supplies and heavily inflated prices for consumers who just wanted better graphics on their PC games. That trend seems to have reversed itself in late 2021, though, as dollar-denominated prices for most cryptocurrencies began a long slide that made GPU mining unprofitable in many areas.

Prices for GPUs have already plummeted throughout 2022, leading to GPUs routinely going for significantly less than their MSRP on auction sites like eBay. GPU manufacturers have been left with an unexpected surplus of excess inventory.

[LFC]

This is the best and most succinct explanation of crypto I've ever read.

[LFC]

More trouble in crypto paradise.

The Department of Justice and Securities and Exchange Commission are investigating FTX, a crypto platform that halted withdrawals on Tuesday, according to a new report from the Wall Street Journal. And while the SEC’s investigation has reportedly been going “for months,” the agency’s scrutiny has only expanded this week following the liquidity crisis at FTX, which has caused the entire cryptocurrency market to tank.

The investigations by the SEC concern FTX’s U.S. exchange, FTX.us, and the coins listed there, according to the Wall Street Journal. The SEC is also looking into whether FTX lending products might be considered securities, which would require the company to register them with the SEC.

The debate over whether crypto tokens are securities or currency has been raging for years, with crypto advocates trying to argue that crypto like Bitcoin is a currency. If crypto is indeed a currency, that means investors wouldn’t face serious tax implications, just as people typically aren’t taxed for holding U.S. dollars. But if they’re securities, as the head of the SEC, Gary Gensler, has previously argued, then Bitcoin can be regulated like shares you might buy on a stock exchange, complete with the tax implications of any other security.

[LFC]

The FTX bankruptcy is a shitshow.

Just how bad do you have to be for a 40-year veteran of corporate undoings to call you one of the most faulty, most compromised entities he’s ever seen? John J. Ray III was tapped to handle the chapter 11 bankruptcy proceedings of FTX’s multiple major corporate entities. In his latest bankruptcy filing released Thursday, Ray noted that in his 40 years of legal and restructuring experience:

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

He cited the companies’ failed system integrity and faulty regulatory oversight. He also noted that FTX had concentrated company control “in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals.”

It’s unclear exactly whom he’s calling “potentially compromised,” but the buck might very well stop at former CEO Sam Bankman-Fried. The once-leader in the crypto space has remained out of arms reach in the Bahamas, where his many company holdings were based out of. All the while he’s been trying to somehow repair his image by claiming he’s working hard to reclaim the millions of dollars of users’ funds that were locked in their exchange accounts.

There was apparently money movement between companies that was not disclosed and possibly illegal.

[LFC]

Looks like shilling for a company that is completely incompetent and may have engaged in outright illegal activity carries some risk. Now that the company has collapsed people are going after the famous shills to get their money back. It will be interesting to see if these suits succeed.

Things are looking pretty, prettyy, prettyyy bad for Larry David, as well as a slew of other famous people who previously helped to promote the now-wrecked cryptocurrency exchange FTX.

A class action lawsuit filed in Florida on Tuesday lists as defendants a host of celebrities who shilled for the platform, including David, football god Tom Brady, his ex-wife Gisele Bundchen, basketball stars Shaq and Steph Curry, and others. The suit also lists the firm’s former CEO and founder, Sam Bankman-Fried, or SBF, as a defendant, and accuses the company of being a “deceptive” business that engaged in harmful and fraudulent behavior.

All I can think is: poor Larry. The maestro behind Seinfeld and Curb Your Enthusiasm unfortunately starred in a Super Bowl ad earlier this year promoting the exchange. The ad, which is honestly quite funny, shows the comedian missing out on a number of technological innovations throughout history (the wheel, forks, a toilet), only to turn down investment in FTX, too. The ad ends with the tagline DON’T BE LIKE LARRY, implying the viewer should invest in the crypto exchange because it is the way of the future.

You can sorta imagine David being hectored into appearing in the advert by his agent, though it’s still a bit disappointing that the Curb star actually did it. Now, obviously, he might be all kinds of trouble.

The lawyers filing the new lawsuit, powerhouse New York attorney David Boies and Adam Moskowitz, write that FTX was a “Ponzi scheme” and argue that the actions of the defendants constituted fraud that impacted “thousands, if not millions, of consumers nationwide.” FTX itself has admitted to owing money to at least a million customers. The legal argument revolves around the idea that FTX and its supporters were ilegally promoting unregistered securities—which is a claim that has been made in previous lawsuits against crypto companies:

“...FTX’s fraudulent scheme was designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments. As a result, American consumers collectively sustained over $11 billion dollars in damages.”

Big stars getting sued over this kind of thing isn’t exactly anomalous these days. In recent years, a swell of celebrity crypto endorsements has led to more and more legal action. Kim Kardashian, who notoriously promoted a little-known shitcoin last year, was sued for her role in driving investors to the project. Critics alleged that the coin had all the markings of a pump-and-dump scheme.

Many of the celebrities listed in the new FTX lawsuit served as “brand ambassadors” for the company—using advertisements and press appearances to help promote the exchange and shore up its reputation as one of the most stable and successful crypto entities on the market.