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  • What Happens to Crypto After They Are Seized? Crypto Forfeiture Laws Explained

    What Happens to Crypto After They Are Seized? Crypto Forfeiture Laws Explained

    As we have learned from the collapse of FTX, the crypto space is not shy of company bankruptcies and criminal activities. But what exactly happens to crypto seized by the government? As smart investors, it is helpful to know how crypto forfeiture laws work, as crypto regulations are on the rise.

    What are Forefeited Crypto Assets?

    The term “frozen, seized or forfeited” in the legal field refers to the state of an asset, including cryptocurrencies. When law enforcement seizes these assets, they are frozen at a specific address. If the government claims ownership of the seized cryptocurrencies, they are considered forfeited.

    The process of “crypto asset realization and legal forfeiture” enables the government to confiscate digital assets for law enforcement purposes by identifying, separating and seizing virtual currencies. With numerous reports of seized assets as well as warnings from leading regulators about digital assets, it is becoming increasingly evident that regulation of cryptocurrency is necessary, but currently in a state of uncertainty.

    How Crypto Exchanges Approach Suspicious Transactions

    Most crypto exchanges have compliance tools to monitor transactions and meet regulatory requirements. Suspicious activity may be detected based on the structure of the transactions, movement of value, or if the source or destination of funds is illegal.

    When a user engages in suspicious activity, the exchange will first request an explanation from the user, and temporarily limit their ability to transfer funds. Since crypto exchanges are centralized entities, they have the power to freeze the user’s funds or ban the user from the platform if they do not meet legal requirements.

    The actions taken will depend on the level of risk posed by the transaction, the user’s response, the user’s previous behavior, and the exchange’s regulatory obligations. Using KYC/AML procedures in place, the exchange will then file a report to law enforcement agencies or financial authorities — in the case of U.S., that would be the Financial Crimes Enforecement Network (FinCEN).

    What Happens to Crypto Seized in Criminal Investigations?

    Once a strong case has been built against a suspect, financial authorities and law enforcement agencies may work with the crypto exchange holding the suspect’s digital assets to either transfer them to a government-controlled wallet or freeze them indefinitely. Sometimes, the assets stay in the suspect’s personal wallet and they may surrender the funds in exchange for a reduced sentence.

    The seized cryptocurrencies are usually kept in this manner until a court decision is made. If the defendant is found not guilty, the assets are returned, but if they are convicted, the forfeiture of the assets is part of their sentence. If a conviction occurs, another process is initiated to determine any third-party ownership of the assets that the government aims to seize.

    Once all ownership interests have been addressed, the remaining funds are sold for fiat currency and distributed among the agencies involved in the case. The funds are usually used for compensating identified victims or going to government treasuries. This process altogether may lead to a dump on the market, depending on the size of the assets being sold.

  • Flare Launches Layer-1 Oracle Network with FLR Token Airdrop

    Flare Launches Layer-1 Oracle Network with FLR Token Airdrop

    Flare, a new layer-1 Ethereum Virtual Machine (EVM) blockchain has gone live with the launch of two core protocols as well as its FLR token airdrop. All existing XRP holders from participating crypto exchanges including Binance, Bybit, Kraken, and OKX have been distributed FLR tokens. The airdrop marks one of the largest token distributions in crypto history, with over a million users receiving 4.279 billion FLR tokens.

    Source: Twitter (Flare Community)

    Flare FLR Token Airdrop Details

    The initial airdrop began at 23:59 UTC on January 9, representing 15% of the FLR’s total token distribution. The remaining 85% of tokens will be distributed over the next 36 months according to the community vote on Flare Improvement Proposal 01 (FIP.01). If passed, the proposal would place a hard cap on FLR’s annual inflation at 5 billion tokens per annum.

    Over 4.28 billion Flare ($FLR) tokens were airdropped to XRP holders holding at least 1 XRP based on a snapshot taken in December 2020. FLR tokens were distributed at 1:1, meaning that XRP holders received 1 FLR for every 1 XRP held.

    Fortunately, Celsius Network (which is now bankrupt) obtained Court approval for XRP token holders to also receive the Flare ($FLR) token airdrop.

    What is Flare Network?

    The Flare network serves as an oracle network that allows developers to build apps that are interoperable with the internet and other blockchains. It leverages two interoperable protocols to power its application-building suite: the State Connector and the Flare Time Series Oracle (FTSO).

    • State Connector

    According to their white paper, the State Connector protocol enables smart contracts to interact securely with information and data from other blockchains and internet sources. This function offers powerful data to the network in a decentralized manner on-chain, facilitating the development of cross-chain solutions.

    • Flare Time Series Oracle (FTSO)

    The Flare Time Series Oracle (FTSO) provides prices and data series to DApps running on the layer-1 blockchain without relying on centralized data providers. It is essentially a decentralized data feed oracle that sources data from many independent data providers. In conjunction with the State Connector, it provides inputs for DeFi platforms as DApps can access timely information across different blockchains easily.

    Key Takeaway

    Flare initiated its token airdrop on Jan. 9, with 4.27 billion FLR tokens distributed to millions of existing XRP holders across various cryptocurrency exchanges including Bybit, Binance, Kraken, and OKX.

    The initial token distribution released 15 percent of the full public token allocation, with the remainder set to be released monthly over 36 months. The allocation method for the remaining token supply will be settled by a community vote through the Flare Improvement Proposal 01 (FIP.01).

    Flare Network is a layer-1 EVM blockchain that serves as an oracle network to provide developers a platform to build interoperable DApps such as DeFi solutions.

    Other Upcoming Token Airdrops!

    Hunting token airdrops is a great way to earn free money. There are many highly anticipated token airdrops that can get you to earn as high as $5000, including zkSync, Arbitrum, Quai Network, LayerZero, and zkLend.

  • Genesis Trading Insolvency Could Trigger a Bitcoin Collapse

    Genesis Trading Insolvency Could Trigger a Bitcoin Collapse

    What’s Happening with Genesis Trading?

    Genesis Trading is one of the world’s largest crypto trading desks for professional investors, primarily offering Bitcoin over-the-counter (OTC) trades and lending services. Recently, Genesis has temporarily suspended redemptions and new loan originations due to abnormal withdrawal requests in the aftermath of the collapse of FTX.

    Genesis stated that the withdrawal requests have exceeded its current liquidity, which raised concerns about the firm going insolvent. Because Genesis is directly affiliated with some of the largest crypto institutions, its fall could start another domino effect that is even more devastating than the FTX contagion.

    In case you are out of the loop, we have covered the entire timeline of the FTX contagion in chronological order listed down below:

    Fallback of Genesis Trading from Three Arrows Capital

    The lack of liquidity Genesis is undergoing is not only because of FTX. It is largely attributed to the fall of Three Arrows Capital (3AC) in the aftermath of the Terra Luna collapse.

    Genesis was the biggest creditor to 3AC, lending $2.4 billion. After 3AC went bankrupt, Genesis filed a $1.2 billion claim against them. When 3AC failed to provide the required collateral, the parent company of Genesis, Digital Currency Group (DCG), stepped in and assumed the $1.2 billion claim, leaving Genesis with no outstanding liabilities to 3AC.

    By Q3 2022, their market activity drastically fell, with loan originations falling from $50 billion in Q4 2021 to a mere $8.4 billion. Despite the situation, institutional investors still believe they were crypto’s safest counter-party.

    Gemini’s Exposure to Genesis Trading

    Gemini, one of the top crypto exchanges regulated in the U.S., announced that there would be withdrawal delays with its Earn product, in which Genesis is a lending partner. If you do not know how Genesis ties into Gemini Earn, here’s how it basically works:

    After the lenders give their crypto to Gemini, it will be given to Genesis for them to lend out to a fund. The borrowing party will pay fees for this, which will be shared between Gemini and the lenders. The problem now is that Genesis is having liquidity issues, thus they are unable to give Gemini back their crypto. This means that lenders on Gemini Earn cannot get their crypto back.

    Although Gemini assures this does not impact any other products and services, Gemini customers are rushing to get their funds out fearing the exchange is next to go down as the FTX contagion spreads. Over the past 24 hours at the time of writing, Gemini has seen $570 million in withdrawals and ETH withdrawals reached an all-time high on the exchange.

    Genesis Trading’s Impact on the Crypto Market

    It is not just Gemini but also many other CeFi platforms and major hedge funds use Genesis for their yield product. Moreover, many crypto whales opt to give their funds directly to Genesis to earn yields as well as custodial services. If Genesis is unable to give them back their crypto, many lenders worldwide could potentially lose their asset.

    Genesis is also a sister company of Grayscale, the world’s largest Bitcoin fund (GBTC) and one of the largest Bitcoin holders worth $11 billion at the time of writing. If Grayscale is affected by this, there is a possibility that Grayscale will dissolve GBTC to pay back lenders. This impact of this could be huge.

    However, Grayscale assured users that Genesis is not a counterparty or service provider for any Grayscale product, which means they will not be affected by Genesis suspending withdrawals. But in light of recent situations where FTX and Alameda claimed that they are two independent entities, sceptics are demanding a full audit to prove customer funds are safe.

    Genesis Trading Lays Off 30% of Workforce

    On 5th January 2023, Genesis Trading announced a large-scale layoff in order to reduce cost. According to sources close to the matter quoted by Coindesk, 30% of its workforce were cut, which especially affected the sales and business development departments. In addition to Genesis previously slashing 20% of its workforce in August, the company now has around 145 employees.

    The layoff follows shortly after Genesis Interim CEO Derar Islim sent a letter to clients on January 4, addressing the fact that the firm needs more time to sort out its financial issues. However, time is not something Genesis can afford as it faces increasing pressure from creditors.

    Genesis currently owes $900 million to Gemini, and is due to come up with a solution by 8th January 2023. Gemini co-founder Cameron Winklevoss believes that DCG is to blame and should be held responsible for its subsidiary company’s situation. In an open letter to DCG CEO Barry Silbert, Winklevoss accused him of “bad faith stall tactics” and claimed that a $1.675 billion loan from Genesis to DCG is the reason why Genesis is facing liquidity issues.

    Genesis Trading Considers Bankruptcy

    According to Wall Street Journal, Genesis hired investment bank Moelis & Company to review Chapter 11 bankruptcy filings. A Genesis spokesperson explained that it is to “preserve customer assets and drive the business forward.”

    As of 19th January 2023, Genesis is laying the groundwork for a bankruptcy filing, according to Bloomberg. Reports indicated that Genesis is in confidential negotiations with various creditor groups in an attempt to raise cash. However, if Genesis fails to raise capital, it is highly likely they will file for bankruptcy.

    Digital Currency Group (DCG) Under Severe Pressure Amid Genesis Crisis

    On 17th January 2023, DCG halted dividend payments to preserve cash. According to a letter to DCG shareholders reported by Bloomberg, DCG is focusing on strengthening their balance sheet by reducing operating expenses and preserving liquidity. As the parent company of Genesis, this move is most likely the result of the financial crisis Genesis is facing.

    Moreover, CoinDesk, whose parent company is DCG, is hiring advisors at investment bank Lazard to explore options for a potential sale, including a partial or full sale of the company. According to Wall Street Journal, CoinDesk has actually been privately seeking a deal for months, and has received numerous offers. Whether this is related to the Genesis and DCG crisis, no parties have responded to requests for comment.

    CONFIRMED: Genesis Trading Filed for Chapter 11 Bankruptcy Protection

    According to latest news by CNBC, Genesis Trading filed for Chapter 11 bankruptcy protection late Thursday night in Manhattan federal court. Over 100,000 creditors were listed in the company’s bankruptcy filing, with aggregate liabilities ranging from a whopping $1.2 billion to $11 billion.

    In its filing, Genesis stated that it anticipates that after the restructuring process, there will be funds available to pay off unsecured creditors – a group that can be completely eliminated in bankruptcy cases if the circumstances are particularly dire. They also noted the bankruptcy only affects its lending business, and that its derivatives and spot trading business will continue unhindered.

  • Coinbase Data Privacy: How to Opt Out of Financial Data Sharing

    Coinbase Data Privacy: How to Opt Out of Financial Data Sharing

    Coinbase Data Sharing Policy Takes Effect on 22nd January 2023

    On 23rd December 2022, Coinbase publicly announced that they would be sharing and selling customer data for marketing purposes as well as other business related purposes. According to their notice, this includes both active and former customers:

    “If you are a new customer, we can begin sharing your information 30 days from the date we sent this notice. When you are no longer our customer, we continue to share your information as described in this notice. However, you can contact us at any time to limit our sharing.”

    Reddit User Claims Coinbase Ignores Opt Out Requests for Data Sharing

    This is in accordance with U.S. financial law allowing users to opt out of financial and personal data sharing for marketing purposes under the Gramm-Leach-Bliley Act (GLBA). However, according to Reddit user u/durg0n, they had repeatedly request to opt out of data sharing with Coinbase over the past month, but Coinbase did not respond to their request.

    Despite the Reddit user filing a complaint with the Consumer Financial Protection Bureau (CFPB) and even closing their account in protest, Coinbase still did not agree to limit data sharing with marketers and affiliates.

    How to Opt Out of Coinbase Data Sharing?

    Based on feedback from other Reddit users, Coinbase customers can try the following methods to opt out of Coinbase’s data sharing.

    • If you have a current/active account, there is an opt-out setting on the website/app people are reporting success with:
      • Website: Settings > Privacy > Share my Personal Info
      • App: The 9 dots in the corner > Profile and Settings > Privacy > Share my Personal Info
      • Note — You should double-check it is properly set as it seems to be defaulting to sharing enabled, even in Europe.
      • Not all locations appear to have the opt-out setting available (ex: Argentina). If you live in such a country, try contacting Coinbase Support to opt-out manually.
    • If you have a closed/former account, the only option is to contact Coinbase support. Reddit user u/durg0n has tried this method, but mentions it is still worth a try.
    • If you have an old open account, you may be forced to agree to the new Terms of Service (ToS) in order to access the privacy settings. Please note that the newer ToS’s include other forms of data sharing and arbitration. Accepting it may open you up to data being used in other ways and limit your legal rights. According to Reddit comments, it is probably better to deal with Coinbase Support and send in a written request. But you could accept the new TOS and use the website to opt-out if you don’t care about the TOS.
    • If you have already ‘deleted’ your data, you should write in and opt-out anyway. Coinbase retains some ‘deleted’ data of former customers (ostensibly required for regulatory purposes), and this may be subject to the data sale. u/durg0n suggests writing in to Coinbase Support that you wish to limit data sharing to be safe, and carefully read the reply to see if they actually did it or not.
  • Will Digital Currency Group (DCG) file for Bankruptcy?

    Will Digital Currency Group (DCG) file for Bankruptcy?


    Digital Currency Group (DCG) is a leading cryptocurrency conglomerate. DCG however has been in the spotlight recently due to issues surrounding its subsidiaries- Genesis Global Capital, Silvergate Capital and CoinDesk. This article looks at the recent troubles surrounding the Digital Currency Group (DCG) and whether it will file for bankruptcy.

    Learn more: Genesis Trading Insolvency Could Trigger a Bitcoin Collapse

    Who is Digital Currency Group (DCG)?

    Digital Currency Group (DCG) is a venture capital company with a specific focus on cryptocurrencies. They are a conglomerate whose subsidiaries include trading desks (Genesis Global Capital), crypto banks (Silvergate Capital), crypto media (CoinDesk) and asset managers (Grayscale).

    What is happening at Digital Currency Group (DCG)?

    DCG has been struggling financially due to the recent market downturn and has been unable to raise additional capital. In a tweet from its CEO, Barry Silbert, the Company talks about how “bad actors and blow-ups” have negatively affected the industry, to which DCG is not immune.

    https://twitter.com/BarrySilbert/status/1612890612507807753?s=20&t=vUGresXpmYnlfR3NA311Jg
    Tweet from Barry Silbert on 11th January 2023

    DCG halts dividends until further notice

    Furthermore, on 17th January 2023, DCG wrote to its shareholders indicating that it has plans to halt quarterly dividends until further notice. DCG states that the reason for this is to reduce operating expenses and preserve liquidity.

    Genesis Global Capital planning to file for bankruptcy

    The halt in declaring dividends stems from the fact that its subsidiary, Genesis Global Capital, is in serious trouble. Genesis Global Capital is said to owe its creditors over US$3 billlion, and has US$175 million locked up in FTX exchange after its collapse.

    Genesis has halted customer withdrawals since 16th November 2022, and there is no news as to when it will reopen.

    Learn more about the troubles surrounding Genesis and the potential implications of it going bankrupt: Genesis Trading insolvency could trigger a Bitcoin collapse

    Silvergate Capital loses deposits, fires 40% of staff

    However, there is the suggestion that simply halting dividends may not be enough to save DCG. This is especially since one of DCG’s subsidiaries, Silvergate Capital, had announced that total crypto deposits from its customers fell almost 68% to US$3.8 billion on 31st December 2022, from US$11.9 billion mere months ago in September 2022. In response, Silvergate laid off about 40% of its workforce and sold around US$5.2 million in debt securities. This is to ensure that the Company would be able to maintain a cash position that exceeds its deposits.

    Learn more- Silvergate Capital’s Exposure to FTX Collapse: What Investors Need to Know

    CoinDesk exploring a full or partial business sale

    Rumours of potential trouble at DCG were further deepened by the news that its subsidiary, CoinDesk Inc, has hired investment bank Lazard Ltd to look into a sale of its business. According to CoinDesk CEO Kevin Worth, CoinDesk is exploring a full or partial sale of its business as a way to attract growth capital.

    Disputes between DCG’s CEO and Gemini exchange

    Gemini is a major cryptocurrency exchange and one of DCG’s partners. The two companies had partnered together on Earn, a crypto lending product. However, not all is going well with this partnership resulting in a public spat between Gemini exchange Co-Founder Cameron Winklevoss and DCG CEO Barry Silbert.

    On 10th January 2023, Cameron Winklevoss wrote an open letter to the Board of DCG calling for them to remove Barry Silbert as CEO. In the letter, Winklevoss accused Genesis, DCG, Silbert and other key personnel of defrauding Gemini and its over 340,000 Earn customers. The letter claims that Genesis owes Gemini US$900 million which Silbert has been unable to satisfactorily resolve.

    Tweet from Cameron Winklevoss on 10th January 2023

    Conclusion: Will Digital Currency Group (DCG) file for bankruptcy?

    Digital Currency Group is fighting a battle from multiple directions. There is news of trouble coming from several of DCG’s subsidiaries including Genesis, Silvergate, and CoinDesk. Digital Currency Group’s CEO, Barry Silbert, is also facing accusations as to his running of DCG. With subsidiary Genesis Global Capital reportedly filing for bankruptcy this week, there are fears that DCG will also go bankrupt. Especially as DCG owes US$575 million to Genesis’ crypto lending arm, which is to be repaid in May 2023.

    With these factors in mind, it appears that Digital Currency Group (DCG) is in a precarious financial situation and there are fears that it may file for bankruptcy. It remains to be seen if DCG will be able to overcome these troubles surrounding it and its subsidiaries. However, as we’ve seen from the collapse of other crypto industry giants in the past, the contagion effect when a crypto company collapses can be huge and wide.

  • Meme Coins 2023: How Smart People Get Rich Investing in Them

    Meme Coins 2023: How Smart People Get Rich Investing in Them

    2023 started off with the explosive rise of Bonk ($BONK), a Solana-based meme coin. In the process, some people made a lot of money, and some did not even have to invest a dime as they were eligible for $BONK airdrops as Solana users. It is important to remember that meme coins are purely speculative and extremely volatile, but smart traders are able to recognize patterns and trends, allowing them to capitalize on these opportunities.

    What are Meme Coins?

    Meme coins are cryptocurrencies that are created for the purpose of entertainment and humor. They are often based on popular internet memes. Dogecoin is the most famous example, a dog-themed token based on the viral Doge meme in 2013.

    What started as a joke quickly became a driving force in the crypto market. Thanks to Dogecoin’s success in 2021, the meme coin market rapidly expanded, and is now valued over $17 billion in total market capitalization.

    Why are Meme Coins So Popular?

    Investing in meme coins present a low-entry barrier. Since meme coins are typically valued at pennies per token, investors can acquire large amounts of tokens for a relatively small price. As a result, investors can gain significant profits if these tokens spike up in price. Many investors view meme coins as a way to make a quick profit, as they are often volatile and can be traded for a profit.

    In contrast to actual blockchain projects such as Ethereum or Aptos, meme coins have no utilities at all. They are less about technology and solutions, and more about fun and community engagement. Additionally, meme coins are often seen as a way to show support for a particular meme or cause, which can be a powerful motivator for investors. Instead of complex blockchain terminologies, meme coin communities focus on building on their biggest facility — humor. Because of this, meme coins are a good at exposing newcomers to the crypto space.

    The Psychology Behind Investing in Meme Coins

    The originator of the term “meme” is Richard Dawkins. In his book “The Selfish Gene”, he explains that when a cultural meme becomes viral and is attached to an exchangeable value, it can theoretically become an actual currency. With blockchain technology, memes can literally become cryptocurrencies.

    As such, they have become increasingly popular in the cryptocurrency space due to their ability to post rapid gains and reach incredible market capitalization and popularity levels in a very short period. This phenomenon can be attributed to two main factors: Social Media Hype and Fear of Missing Out (FOMO).

    Social Media Hype

    We are currently living in the Internet age, where our average attention span is short. As such, memes could prove to be a powerful marketing tool because they are simple, entertaining, and engaging. When used properly, memes are a low-effort marketing strategy that can drive organic engagement.

    Generating hype via social media channels has been a successful strategy for many meme coin projects. By creating shills and utilizing prominent influencers and mainstream celebrities, projects can generate excitement and attract potential investors, even if there is limited information available about the project. This growth, although organic, is based on “unverified beliefs” and inflated utility. Meme coins have been particularly successful in leveraging this strategy, leading to a surge in their token prices.

    Fear of Missing Out (FOMO)

    The volatile nature of the crypto market is often driven by ambitious investors who jump into new projects with the hope of making a profit or not missing out on the project’s potential success. This fear of missing out on further profits has been a major factor in the success of meme coins.

    The price growth that follows the hype marketing is further augmented by FOMO and widespread hype. This trend has enabled meme coins to gain hundreds of thousands of followers, mainly due to their meme culture, before they adopted a reasonable utility. Additionally, as meme coins generally appeal to less experienced retail investors, they tend to jump on the bandwagon in hopes of making profit and being part of a large community.

    The Risk of Investing in Meme Coins

    While meme coins can be a great way to make a quick profit, they also come with a certain amount of risk. As with any investment, there is always the potential for losses. Additionally, because meme coins have no utilities, they are purely speculative assets. Therefore, they are often highly volatile, meaning that prices can change quickly and without warning. As such, it is important to do your research and understand the risks before investing in meme coins.

    Key Takeaway

    At its core, meme coins are purely speculative, and investing in them is somewhat of a gamble. However, smart traders are able to identify trends before they break out. Because meme coins typically rely on hype, they monitor activities on the niche market via social media channels or word-of-mouth. Because these tokens are usually valued at pennies per token, they are able to secure a position before any price surge or drop. But from that point on, it is really just a bet.

  • Will Bitcoin (BTC) Market Rally Continue Throughout Q1 2023?

    Will Bitcoin (BTC) Market Rally Continue Throughout Q1 2023?

    It has been an explosive week for the crypto market, as most cryptos see double-digit gains for the first time since the FTX contagion started in November 2022. This rally was led by Bitcoin (BTC) and Ethereum (ETH), which surpassed the $21,000 and $1,590 mark respectively. It is important to understand what factors are causing these uptrends, so that we, as investors, can recognize and capitalize on these patterns.

    Why is Bitcoin (BTC) Pumping in January 2023?

    Over the past week, Bitcoin has seen large numbers of purchases with robust trading volume. According to Glassnode, the exchange outflow volume of BTC has hit an early year-to-date high, with nearly $300 million worth of withdrawn BTC moving into crypto wallets. Moreover, most of these withdrawals were made in large installments ranging from $1 million to $10 million of BTC. This is corroborated by on-chain aggregator Santiment, where Bitcoin whales have been loading up their wallets with a lot of BTC, suggesting institutional action.

    Across the broader crypto market, more than $1.3 billion of crypto assets in short positions were liquidated over the past 8 days, according to data sourced from Coinglass. Additionally, more than 200,000 traders were liquidated, with the most significant liquidation being a $6.84 million short position against Bitcoin, contributing to the surging price movement in the crypto market.

    Apart from market activities within the space, there are other macroeconomic conditions that contribute to Bitcoin’s pump.

    Inflation Slowing Down According to U.S. Consumer Price Index (CPI)

    The price surges in the crypto market also reflects the market’s expectations that inflation is cooling ahead of the release of the U.S. Consumer Price Index (CPI) data. Bitcoin began the week trading at $17,207 and has since seen an upward trajectory, with the CPI report meeting market expectations indicating that inflation in the U.S. economy is slowing. Other equities markets have also responded positively as a result.

    Investors are now anticipating comments from the Federal Reserve which should hint at future policy, including the size of interest rate hikes. The Federal Open Market Committee (FOMC) meeting will be held between January 31 and February 1. According to CME FedWatch Tool, the committee is currently expected to yield a hike of 25 basis points istead of the previous 50 basis points.

    Now, the prevailing narrative is that U.S. inflation has peaked in 2022, which means softer rate hikes going forward. This stimulates all economic activities including in speculative markets, but with the crypto industry, any surprises could spark additional volatility.

    Bitcoin Halving Event in 2024

    Another factor contributing to Bitcoin’s pump this month is the upcoming Bitcoin halving event in 2024, in which Bitcoin rewards to miners are cut in half. This event occurs after every 210,000 blocks are created, which is roughly every four years. Around next year, miner’s payout will be reduced from 6.25 BTC to 3.125 BTC.

    Historically, halving events have been seen as a positive sign for Bitcoin’s price, as it helps to contract the supply of BTC. This is due to the fact that Bitcoin has a fixed supply, and the halving event directly relates to Bitcoin’s deflationary tendency, driving its price up as a result of supply and demand mechanisms. According to Coindesk, we can see from Bitcoin’s halving history, the events have always been able to establish long-term bullish drivers for Bitcoin’s price.

    Correlation with the U.S. Dollar Index (DXY)

    Another factor contributing to Bitcoin’s price movement is its relationship with the U.S. Dollar Index (DXY). The crypto market generally correlates negatively to the DXY due to the purchasing power of fiat currencies. When the DXY declines, investor sentiment for riskier assets such as crypto tends to increase. This year, the DXY dropped to seven-month lows, momentum has slowed as it is beginning to retract. Typically when this happens, it is followed by Bitcoin price moving in the opposite direction.

  • MetaMask Security Guide: Protect Yourself from “Address Poisoning” Scams

    MetaMask Security Guide: Protect Yourself from “Address Poisoning” Scams

    Wallet Address Poisoning Scam: What You Need to Know

    MetaMask warned crypto users of a new scam that is running rampant called “address poisoning”. This scam involves malicious actors copying and pasting wallet addresses in order to steal funds from unsuspecting users. In this article, we will discuss how address poisoning works and what users can do to protect themselves. Also, check out Gemmy’s video for more information on how to secure your MetaMask contacts! (https://prodavinci.com)

    How Does Wallet Address Poisoning Work?

    Address poisoning is a scam that exploits copy-and-paste tendency of most crypto wallet users. Since wallet accounts have cryptographically-generated address with long hexadecimal numbers, users tend to only remember the first and last few characters of their address. As a result, users rely on copying and pasting their addresses to save time. MetaMask addressed this in their blog post, and here’s how it essentially works:

    Attackers usually has softwares that monitor token transfers. If they pick up on your address, they can use vanity address generators to create an address that looks very similar to yours. The attacker then sends you worthless tokens to “poison” your transaction history. If you are not careful, you might copy and paste their address from your transaction history, sending funds to the attacker’s address.

    This method is rather amateurish, compared to other scam types, blockchain attacks, or smart contract exploits. While this would not give the attacker access to user wallets, it relies on user carelessness and haste — something that is common in Web3 when users want to send funds quickly to capitalize on DeFi opportunities.

    The Increasing Cases of Wallet Address Poisoning

    According to an article jointly published by crypto analysts X-explore and Wu Blockchain on 2nd December 2022, over 340,000 addresses have been poisoned on-chain, resulting in $1.64 million stolen from unsuspecting victims. The cases began spiking at the end of November, and is still a prevalent issue now.

    The article suggested that MetaMask should improve its UI features to prevent such attacks from happening, such as letting users identify trusted wallet addresses in transaction history using color markers or other prompts.

    How to Protect Yourself from Address Poisoning

    Metamask recommends users to always double-check the address before sending funds, making sure every single character is correct. As the attacks are still ongoing, users are also advised to avoid copying addresses from transaction histories and block explorers. Users can also add trusted wallet addresses in Settings > Contacts.

    More importantly, it is much safer to use hardware wallets when transferring funds, as users are required to check and confirm any address they are sending funds to before the transaction is authorized. If you are interested in getting a hardware wallet, feel free to check these out:

    Click here to purchase a Ledger wallet!

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    Or a Trezor wallet!

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  • The Flippening: Will Ethereum Overtake Bitcoin in 2023?

    The Flippening: Will Ethereum Overtake Bitcoin in 2023?

    The Flippening Narrative: Bitcoin vs Ethereum

    The concept of the “Flippening” has been increasingly gaining traction in the crypto space. It refers to the hypothetical moment when Ethereum (ETH) surpasses Bitcoin (BTC) as the most valuable cryptocurrency by market capitalization. The Flippening is important because it would signify a major shift in the overall direction of the crypto landscape, signalling a change in investor sentiment and adoption patterns.

    https://www.youtube.com/watch?v=0lQ8bz9QRBo

    While the Flippening is not set in stone, there are compelling data that indicate it is coming, and sooner than you think… Here’s why:

    The Case for Bitcoin

    Being the world’s first cryptocurrency, Bitcoin has maintained its throne on the crypto market since its genesis block in 2009. It is often considered as the safest digital store of value by investors, with its limited supply structure similar to the scarcity of gold, hence its nickname “digital gold.” As such, Bitcoin is usually the primary choice of cryptocurrency for financial institutions looking to get involved. As far as mainstream adoption goes, Bitcoin has led the way so far.

    However, Bitcoin’s Proof-of-Work (PoW) consensus model is highly energy-intensive, sparking criticisms of the network’s impact on the environment. Additionally, the usage of Bitcoin is only limited to exchanging and storing value. This is where Ethereum has much more to offer.

    The Case for Ethereum

    As the second most valuable cryptocurrency, Ethereum is designed to be used as the foundation of a decentralized, blockchain-based internet — an idea that is become known as Web3. Apart from exchanging and storing value, Ethereum introduced smart contract functionalities that allows developers to do all kinds of innovative and creative things on the network. This brought about a proliferation of financial products that have enabled a much broader range of investors.

    Ethereum earned its nickname “digital oil” because it is a utility-based asset like oil, fuel or gas, and its value is largely dictated by supply and demand mechanisms. Similar to how the world’s global supply chain is fueled by crude oil, Ethereum lays at the heart of the Decentralized Finance (DeFi) space as well as GameFi and Non-Fungible Token (NFT) market. And as the Web3 landscape progresses, demand will increase as more and more people are recognizing the potential of a decentralized internet. It is only a matter of time when Web2 evolves to Web3, and Ethereum is at the centre of that.

    Do “Ethereum Killers” Hinder the Flippening?

    It is worth noting that Ethereum faces competition from other prominent layer-1 blockchains such as Aptos, Cardano, Solana, BNB Chain, Polkadot, and Avalanche. There is a trending “Ethereum Killer” narrative in which user adoption will be distributed amongst these blockchains instead of focusing on Ethereum only. However, most of these blockchains in fact depend on Ethereum, as one way or another they are associated with the network’s smart contract. As shown in the image below by Cryptowatch, all of the top layer-1 blockchains are closely correlated with Ethereum’s price action.

    Comparing Market Share between Bitcoin and Ethereum

    As of 11th January 2023, Ethereum’s market share increased by 3% among global crypto assets, signalling its dominance on the rise. According to Coinmarketcap, Ethereum’s market dominance is at 19%, valued at around $856 billion. On another note, Coingecko’s metrics were slightly different, indicating Ethereum’s dominance at 18.3%. But both aggregation websites show that Bitcoin’s market dominance is decreasing, from 40% to 38%.

    It is unclear whether this trend will continue, but according to data sourced from Blockchain Center, the Flippening has been on an uptrend since July 2021. And we are nearly halfway for it to happen. It is also worth noting that Ethereum came closest to the Flippening in 2017, when Bitcoin’s market dominance’s dropped by 40.6% and Ethereum took over 32% of the market amidst the situation.

    In reference to the data provided by Blockchain Center, there are also other metrics apart from market cap that determines the Flippening. As of now, Bitcoin is still by far superior in trading volume, which is a crucial metric for adoption usage. However, Ethereum has Bitcoin beat in active addresses, transaction count and volume, and total USD transaction fees.

    Outperformance of Ethereum will be primarily driven by the strength of its post-Merge fundamentals. The upcoming Shanghai Upgrade will significantly reduce the risk and opportunity cost of staking ETH, which is likely to attract participation from more crypto users.

    Key Takeaway

    Despite Ethereum’s increasing adoption and market dominance, Bitcoin still reigns supreme in the crypto space. In fact, Bitcoin saw significant adoption in 2021-2022 from retail and institutional investors, public companies, and even countries. As of now, El Savador and the Central African Republic (CAR) have adopted Bitcoin as a legal currency. This is a monumental step towards mainstream adoption.

    But that is not to say the Flippening will never happen — it is certainly a possibility. After all, both Bitcoin and Ethereum have different visions. Bitcoin aims to become the global reserve currency, whereas Ethereum aims to become the infrastructure of a global digital economy. The Technology Acceptance Model (TAM) applies to both assets, but it all comes down to supply and demand mechanisms. If demand in digital money is higher, then Bitcoin dominates. But if demand in utility-based asset in building out a decentralized ecosystem is higher, then Ethereum is generally favored.

  • FTX Victims Must Read: US Government to Help Recover Lost Funds?

    FTX Victims Must Read: US Government to Help Recover Lost Funds?

    ​​U.S. Government Launches Website for Victims of FTX Collapse

    The U.S. government has launched a website for victims of the FTX collapse to communicate with law enforcement in regards to former FTX CEO Sam Bankman-Fried’s “alleged” fraud. In an order late Friday night, U.S. District Judge Lewis Kaplan in Manhattan authorized federal prosecutors to use the website to speed up the process given the massive scale of the FTX collapse.

    FTX owes money to at least 1 million people including creditors and customers. This would help prosecutors with their case immensely as it is ‘”impractical” to contact each victim individually and get their testimony, the prosecutors remarked in the court filing.

    Federal Law Requires Prosecutors to Contact FTX Victims

    Federal law requires prosecutors to contact possible crime victims to inform them of their rights, including the rights to obtain restitution, be heard in court and be protected from defendants. “If you believe that you may have been a victim of fraud by Samuel Bankman-Fried, A/K/A/ ‘SBF,’ please contact the victim/witness coordinator at the United States Attorney’s office using the email address listed below for assistance in verifying whether you are a victim in this case,” stated in the website.

    In criminal cases, prosecutors are required to notify victims ahead of plea or sentencing proceedings and allow them enough time to give testimony if they want to be heard. Based on the number of victims who provide such notice, the court will rule on the manner in which victims will be heard at such proceedings,” Kaplan wrote in his court order.

    FTX Victim Testimonies Strengthen Arguments

    Recently, Bankman-Fried has pleaded not guilty to eight counts of wire fraud and conspiracy over the FTX collapse. Prosecutors have said he stole billions in customer deposits to pay debts for his hedge fund, Alameda Research, and lied to investors about the exchange’s financial condition.

    Though Bankman-Fried has acknowledged risk management shortcomings, he did not consider himself criminally liable. In such a case, the direct evidence regarding the case may not be enough, hence testimonies of the victims can greatly strengthen arguments. Moreover, for the many other victims who did not come forward to cite legal trouble or other factors, this website could help them take the first step to recover their funds, and build a stronger and more compelling case with their testimonies, given the massive scale of damage Bankman-Fried has done.

    FTX Owes Money to Over 1 Million People

    The US Attorney suggests more indictments to follow. According to FTX’s bankruptcy filing on November 11, it owes money to more than 100,000 creditors and at least 1 million affected FTX and FTX US users.

    John Ray, currently CEO of FTX, testified at the U.S. House Financial Services Committee in December, asserting that his team is implementing a restructuring plan that will potentially help customers and creditors get their money back.

    One of the core objectives is asset protection and recovery. It involves extensive tracing of money flows and asset transfers from the time of FTX’s founding. Ray said that they are in the process of “collecting and reviewing dozens of terabytes of documents and data, including records of billions of individual transactions.”

    U.S. Customers Accounted for 2% of All FTX Traffic

    In an analysis of monthly active user data by CoinGecko, customers in the U.S. accounted for 2% of all traffic. Ray mentioned in his testimony that there were 2.7 million users in FTX US and 7.6 million users in FTX. But since “a small number of U.S. customers” were also among the FTX users, he overstates the actual customer relationships due to the possibility a customer may have more than one account.

    Therefore, Ray aims to get to the bottom of the actual customer numbers. And the website for FTX victims can help speed up the process by providing information and clarity, since it is unlikely that most customers will not be able to appear at the Manhattan court in person.