Daily Crypto News | August 17th, 2022

Daily Crypto News | August 17th, 2022

Daily Crypto News | August 17th, 2022

Welcome to Barmy’s Daily Crypto News – August 17th, 2022

1. Google has lavishly invested $1.5B on blockchain startups.

Google parent company Alphabet poured the most amount of capital into the blockchain industry compared to any other public company. The company invested $1.5 billion into the space, concentrating on four blockchain companies including digital asset custody platform Fireblocks, Web3 gaming company Dapper Labs, Bitcoin infrastructure tool Voltage and venture capital company Digital Currency Group.

This is in stark contrast to last year when Google diversified its much smaller $601.4M funding effort across 17 blockchain-based companies, which again included Dapper Labs, along with Alchemy, Blockchain.com, Celo, Helium and Ripple.

With $6B invested over this time period, Google has raised its investment in the blockchain sector in line with the other top 40 publicly traded firms, up from $506M in all of 2020 and $1.9B between January 2021 and September 2021. Similar to Google, Morgan Stanley and BlackRock took a more focused approach during this time, only investing in two or three businesses. However, with investments in 13 different businesses, Samsung was by far the most active investor.

The report also showed that banks have begun to boost their exposure to blockchain and cryptocurrency businesses as a result of rising customer demand for these services. United Overseas Bank, Commonwealth Bank of Australia, and BNY Mellon are three institutions that have emerged as the top cryptocurrency investors.

2. Crypto scams fall 65% after gullible noobs exit the market.

According to a new crypto crime study, fewer people have been scammed by bitcoin so far in 2022 as a result of dropping asset values and novice cryptocurrency users leaving the industry.

The total revenue generated by cryptocurrency scams year to date is currently estimated to be $1.6B, according to a Chainalysis report published on August 16. This represents a 65% decrease from the same period last year, which is thought to be related to the falling prices of cryptocurrencies. The report’s author, Eric Jardine, Cybercrimes Research Lead at Chainalysis, argues that bull markets, when investment opportunities and outsized returns are most enticing to victims, are when scams on cryptocurrency investors are most likely to succeed.

Jardine also proposed that during bull markets, the number of new, inexperienced crypto users is often larger, increasing their vulnerability to scams. Although scam revenue has decreased this year, Jardine points out that cryptocurrency-based hacking has defied the trend, rising by 58.3% to $1.9B through July 2022 (a figure that excludes the $190M Nomad bridge hack that started on August 1). According to Jardine, this surge is primarily due to the explosion in DeFi apps in 2021. DeFi protocols were particularly vulnerable to hacking since their open source code could be thoroughly examined by attackers searching for exploits.

The research also revealed that a significant portion of these hackers originated from elite North Korean cyber outfits like Lazarus Group, with these entities accounting for about half of the cryptocurrency stolen in hacks.

3. Celsius CEO Accused of Controlling Crypto Company’s Trading Scheme and Placing Bad Bets.

The founder and CEO of Celsius Network, Alex Mashinsky, who is Israeli-American, allegedly made a number of poor bets with significant amounts of bitcoin (BTC) and other assets while overseeing the company’s trading strategy, according to a new report that was released on Tuesday. According to the report, which cited numerous persons with knowledge of the situation, Mashinsky sold bitcoin worth millions of dollars in anticipation of doing so at a discount. However, after the CEO purportedly made this bet, bitcoin markets went in the opposite direction, and the top cryptocurrency asset made some gains.

One of the sources included in the article said that he was slugging around sizable amounts of bitcoin while also directing the dealers to massively trade the book based on false information. Although the Celsius CEO’s viewpoint may have been said aloud, the source FT cited in the piece stated Mashinsky was not in charge of the trading department.

The accusations against Mashinsky come after consumers of the cryptocurrency loan company wrote petitions to the bankruptcy court and begged the authorities to return their money. Customers spoke about their financial struggles as a result of Celsius suspending their cash and stressed how urgent it was to get their money back.

Furthermore, five days ago, a representative of Ripple Labs told Reuters that the distributed ledger company Ripple was “interested in learning about Celsius and its assets.” In 2022, there will be a lot of troubled cryptocurrency businesses, as Voyager Digital, Babel Finance, Three Arrows Capital (3AC), Hodlnaut, and Vauld have all experienced financial difficulties this year. Celsius is one among them. The majority of these businesses have turned to the courts or financial regulators for assistance in resolving their insolvencies.

4. The community responded with various sentiments against the Terra CEO Do Kwon.

The community reacted negatively to the Terra CEO after co-founder and CEO Do Kwon broke his silence on the failure of the algorithmic stablecoin TerraUSD Classic (USTC) and LUNA 2.

Podcaster Eric Conner contrasted Do Kwon’s predicament to that of the Tornado Cash creator who has been detained in a tweet. Conner claims that while Tornado Cash developers developed some programming for privacy and are now “fearing for their life,” Kwon stole billions of dollars and is still “partying.”

According to a tweet from FatManTerra, the CEO of Terra lied on a number of occasions throughout the interview and attempted to describe fraud in a way that avoided being implicated but failed to do so.

Cory Klippsten, a proponent of Bitcoin (BTC), advised anyone who lost money in the Terra crash to sue Do Kwon. On the other hand, expert Hailey Lennon feels that the public should not pay attention to the Do Kwon interview.

While the most recent Do Kwon interview has received a lot of criticism. Some continue to promote LUNA 2 and think Kwon is innocent. A Twitter user said that the Terra CEO did not change the name of his daughter and is instead constructing a “better LUNA.”

South Korean authorities took action against those connected to the Terra collapse in July. Investigators searched 15 locations, including Upbit, Bithumb, Coinone, Korbit, and Gopax exchanges. The act was a response to the many legal complaints against the company for the stablecoin incident.

5. US Fed Reminds Banks to Check for Legal Permissibility prior to engaging with crypto.

The U.S. Federal Reserve published an open letter on Tuesday advising Fed-supervised banks to confirm that any cryptocurrency-related operations they wish to engage in are legal before proceeding. The letter began by stating that while the cryptocurrency industry “may pose risks,” it also “presents potential opportunities” for banks and their clients.

The relative youth of the technology supporting cryptocurrencies, worries about cybercrime and money laundering, hazards to consumer protection, and potential threats to financial stability are some of the challenges.

According to a press release, the growing crypto asset market offers banking institutions, their clients, and the entire financial system great opportunities, but it may also pose hazards to consumer protection, financial stability, safety and soundness, and banking organizations.

The letter comes a day after the Fed published new instructions outlining how it would go about granting master account access to new banks, including novel financial entities with state licenses like Wyoming’s special purpose depository institutions. The action may pave the way for banks that operate exclusively in cryptocurrencies to offer services to a wider industry.

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