Users Plagued by Phishing and SIM Swap Scourge

Users of the web3 social earnings platform are reporting multiple attacks involving phishing and SIM swapping. The recently launched crypto social media platform appears to be following its Web2 counterparts in becoming a magnet for scammers. 

On October 3, users started reporting incidents of crypto thefts resulting from SIM swap attacks. 

Social Media SIM Swap Scourge

“I was just SIM-swapped and robbed of 22 ETH via,” reported one victim. 

Additionally, they admitted that they sold 34 of their own keys, which led to the rugging of anyone who held the key. They added,

“All the other keys I owned were sold, and the rest of the ETH in my wallet was drained.”

They reported that scammers accessed personal information, including the phone number from their X (Twitter) account. Spam calls inundated their phone, prompting them to activate silent mode. Furthermore, this resulted in the victim missing a message from Verizon alerting them about spurious account activity. 

“If your FT/Twitter is tied to a doxxed name, and you start getting rapidly spammed with phone calls, make sure you don’t get any texts from your carrier that you’re being distracted from!”

On September 30, another victim posted “got SIM swapped for 20+ ETH (they drained my … stay vigilant out there bros.”

On October 3, another user posted,

“My FT account was just compromised, hacker dumped all keys and moved everything to another address. Was about 6.5 ETH total.”

If attackers gain access to a account via a SIM swap or email phishing attack, they can drain the entire account.

Moreover, Manifold Trading observed:

“If you assume 1/3 of accounts are connected to phone numbers, that’s $20 million at risk from SIM swaps.” 

They suggested implementing two-factor authentication (2FA) but that does not appear to be an option with the crypto social media platform yet. UAW, Volume, Transaction. Source: DappRadar

X (Twitter) Users Targeted 

Recent phishing and SIM-swapping attacks have targeted X users. Industry experts have urged X to implement 2FA security measures to prevent the leaking of phone details. Furthermore, a SIM swap attack caused the high-profile hack of Vitalik Buterin’s account.

In August, co-founder of Blockchain Capita Bart Stephens sued a hacker for stealing $6.3 million via a similar attack.

Additionally, billionaire Mark Cuban fell victim to a wallet hack resulting in the theft of approximately $870,000 in crypto last month.

Scammers use a SIM swap attack as a technique to gain control of a victim’s mobile phone number. With control of the number, scammers can use two-factor authentication (2FA) to access social media and crypto accounts.

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Ethereum ETF Approvals May Signal SEC No Longer Considers ETH a Security

A raft of Ethereum futures exchange-traded funds (ETFs) went live in the United States this week following SEC approval, marking a first for the asset. Moreover, it may be a signal that the Security and Exchange Commission is softening its stance against ETH, according to industry experts. 

On October 2, nine Ethereum futures ETFs began trading in the United States. However, initial volumes were low and industry observers remained skeptical over whether their approvals by the SEC were bullish or not.

Ethereum Futures ETFs Signal SEC Shift 

Head of policy at a16z Crypto and former CFTC Commissioner Brian Quintenz commented that the move to approve an Ethereum ETF signals that the SEC may no longer consider ETH as a security. 

“By approving ETH ETFs based on ETH commodity futures contracts, the SEC has officially provided clarity on ETH’s status as a non-security.”

Futures ETFs are backed by futures contracts on the Chicago Mercantile Exchange, not the physical asset. Moreover, the SEC appears comfortable with allowing these to trade However, it still hasn’t approved anything spot-based for crypto. 

Quintenz added that with so much innovation being built on the Ethereum blockchain, “this creates a clearer path for builders,” before commenting: 

“It’s ridiculous and insulting that it took so long to get here, but it’s a big win for the crypto space, and more importantly for the future of the internet.”

The comments did get a lot of attention from Ethereum detractors who claim that it is a security. However, the SEC, and more importantly, US Congress, has yet to classify the asset either way. 

MV Capital CIO Tom Dunleavy wasn’t as bullish about the Ethereum futures ETF launches. He added,

“The only thing that matters is spot buying which a spot ETF facilitates because these funds need to be seeded.”

The funds must purchase the assets ahead of time regardless of market demand and prices. “Futures ETFs do not facilitate this latent demand,” Dunleavy concluded. 

ETH Price Outlook 

Ethereum prices are already retreating from their Monday spike above $1,700 as markets cool again.

ETH was down 2.9% on the day, changing hands for $1,667 at the time of writing. 

ETH Price in USD 24 Hours. Source: BeInCrypto 

ETH reached a monthly high on October 2 but sharply pulled back in search of its support zone near $1,650.

Ethereum is currently 66% down from its all-time high of $4,878 almost two years ago. 

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Crypto Venture Funding Flatlines as Bear Market Deepens

Venture capital funding for crypto and web3 startups continues to dry up as the bear market blues deepen. September’s VC funding report is out, and it comes as no surprise that figures are little changed from the previous month.

On October 2, industry analyst WuBlockchain released its September crypto venture capital funding report. Citing RootData statistics, it reported a total of 77 publicly announced investment projects in the crypto VC sector for the month.

Crypto VC Funding Flat

The number of crypto investment projects is slightly higher than in August, when there were 75. However, the figure is down 44% from September 2022, which had 138 projects raising funds. 

The total funding raised in September was $510 million, according to the report. This is a 24% decrease compared to August, which had $670 million. 

Infrastructure projects were dominant, accounting for approximately 30% of the financing in September. Furthermore, the second-highest category was DeFi projects, accounting for around 22%. 

The largest investment deal for the month was Bitmain, which announced that it would provide 27,000 S19J XP miners to bankrupt Core Scientific. These would be in exchange for $231 million in cash and $539 million worth of Core Scientific common stock. 

Other significant crypto venture funding rounds included Proof of Play ($33 million), Bastion ($25 million), Story Protocol ($25 million), and Supra ($24 million). 

According to DeFiLlama, crypto funding climbed to $353 million in September, up 25% from August figures. However, investments have fallen 78% from the same month in 2022, when investors put $1.59 billion into the sector.

Crypto VC funding by month. Source: DeFiLlama

Web3 Funding Woes

According to Crunchbase, Web3 startups raised $1.3 billion in the third quarter, down from around $2 billion in both Q1 and Q2. 

On average, Web3 startups raised more than $8 billion in every quarter between Q3 2021 and Q2 2022, reported TechCrunch

Moreover, the $4.5 billion that crypto startups raised in Q3 2022 was more than triple the amount raised in Q3, 2023. 

The trend is still down for Web3 and crypto venture funding, but large sums are still being invested. Bear markets are for building and the savvy investor knows that markets are cyclical and things will turn around again soon.

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Forget Bitcoin — AI Could Be the Next Energy Consumption Boogeyman

For years, the mainstream media has demonized Bitcoin over its energy consumption. The rise in artificial intelligence (AI) and the power-hungry processors that drive it may push aside the world’s most popular digital currency.

The pivot of Bitcoin mining to renewable power sources may give the network some reprieve over its energy consumption. Moreover, AI is taking the spotlight, and it is also a big consumer of energy, according to recent research. 

AI Energy Usage in the Spotlight 

Artificial intelligence is expected to have a huge impact on society, just like the internet. However, it will require a massive amount of additional energy to do so.

On Oct. 1, Bitcoin pioneer Nic Carter commented on the rise of AI and the power-hungry hardware needed to run it. 

“Everything they said about Bitcoin mining they will say about AI – especially if “unregulated” open source models emerge that they can’t control and regulate,”

The comments come in response to research from energy expert Brian Gitt. “New AI chips use an insane amount of electricity,” he said before adding: 

“A single Nvidia GPU chip consumes about the same amount of energy as a typical US home.”

Nvidia GPUs alone will consume more than the entire planned US data center capacity expansions over the next decade, he reported. 

Researchers at the University of Washington revealed that hundreds of millions of queries on ChatGPT can cost around 1 gigawatt-hour a day. Furthermore, this is the equivalent of energy consumed by 33,000 US households, according to reports

Moreover, the data centers that power cloud computing are becoming more reliant on power-hungry graphics processing units (GPUs) to run AI models.

Data center energy consumption. Source: X/@BrianGitt

A professor of electrical and computer engineering, Sajjad Moazeni, said:

“The energy consumption of something like ChatGPT inquiry compared to some inquiry on your email, for example, is going to be probably 10 to 100 times more power hungry,”

Energy Crisis Predicted

Additionally, Arijit Sengupta, founder and CEO of Aible, an enterprise AI solution company, added:

“The world is actually headed for a really bad energy crisis because of AI unless we fix a few things.” 

Energy usage for data centers grew 25% annually from 2015 to 2021, far outpacing the growth in renewable energy deployment. 

Furthermore, researchers are looking at ways data centers can shift computation to times when more renewable energy is available on the grid.

In September, it was reported that Microsoft was looking at next-generation nuclear reactors to power its data centers and AI. 

Bitcoin may no longer be the energy bad boy. Last month, Bloomberg analyst Jamie Coutts reported that more than 50% of mining is now done using sustainable energy. 

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Coinbase Obtains Major Payment Licence from the Central Bank of Singapore

America’s leading crypto exchange, Coinbase, has announced that it has received a payments license from the central bank of Singapore. The move is the latest in ongoing efforts by US crypto firms to expand overseas amid harsh regulatory scrutiny on home soil. 

On October 1, Coinbase announced that it had obtained a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS). 

Coinbase Pushes Into Singapore 

The firm noted that the move “amplifies our commitment to the Singapore market.” It will enable Coinbase to expand our provision of Digital Payment Token services to both individuals and institutions in Singapore.

Moreover, the firm emphasized the “importance of clear regulation, innovation, and trust from our users,” in its international expansion drive. 

Singapore is home to over 700 web3 companies, it noted. This makes it a pivotal market for the growth of the crypto and web3 economy.

Tech and Web3 Companies in Singapore. Source: NodeFlair

“From our initial involvement in the Lion City, we’ve identified Singapore as a vital market for Coinbase. The nation’s progressive economic strategies and approach to regulation sync well with our global mission and objectives.”

Coinbase has tailored products and services for Singapore, like PayNow/FAST transfers, SingPass onboarding, and no-fee USDC purchases.

Beyond products, the firm is also committed to growing Singapore’s crypto ecosystem through hiring, investments, partnerships, community events, and university workshops.

The firm mentioned key local partners such as Nansen, Blockdaemon, and Infura, adding there were more collaborations in the pipeline. 

Coinbase has prioritized getting licenses from regulators in key countries as part of international growth amid increasing hostility at home. Over the last year, it has achieved virtual asset registrations in Spain, Italy, Ireland, and the Netherlands.

Uncle Sam’s War on Crypto

The Security and Exchange Commission sued Coinbase in early June. The regulator accused the firm of operating as an unregistered securities broker since 2019.

In August, the firm asked a federal judge to toss the case on the grounds that it doesn’t offer securities or ‘investment contracts.’ 

Stablecoin issuer Circle has also set up shop in Singapore. In June, the firm received its own Major Payment Institution license from the MAS. 

However, Singapore’s recently elected president, Tharman Shanmugaratnam, is known for his critical stance on digital assets. Therefore, it remains to be seen whether the Asian island nation will remain as crypto-friendly as it is today.

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How Will This Week’s Economic Calendar Impact Crypto Markets?

A busy economic calendar lies ahead this week with the Federal Reserve and oil prices in the spotlight. Moreover, crypto markets have been climbing over the weekend, but can the momentum be maintained? 

On October 2, macroeconomics outlet The Kobeissi Letter listed this week’s key economic events for the United States. Moreover, a government shutdown was averted over the weekend. 

Oil Prices, SBF Trial, and Potential ETH ETF Launch 

Federal Reserve chair Jerome Powell and his European Central Bank counterpart Christine Lagarde are both due to speak in the coming week. 

Powell will join Philadelphia Fed President Patrick Harker for a round-table discussion. They will address workers and small-business leaders on Monday, October 2.  

ISM manufacturing index figures are also due on Monday and a minor increase has been predicted. Also known as the purchasing managers’ index, the figures are a monthly indicator of US economic activity. 

Tuesday has the latest jobs data, which is expected to remain unchanged. Moreover, there is an OPEC meeting on Wednesday where oil output policy will be addressed, but no changes are expected. Oil prices have surged to their highest levels this year, partly due to OPEC output cuts and rising demand.

Thursday and Friday will see the latest employment figures released, which are expected to improve marginally from the previous month. The Kobeissi Letter noted,

“With 13 Fed speakers this week, we expect even more volatility.”

Crypto Market Outlook 

Furthermore, the high-profile Sam Bankman-Fried trial begins on October 3. Observers have cautioned that mainstream media is likely to sensationalize the trial to demonize crypto again, bringing back bad memories from the FTX collapse almost a year ago.

Late last week, derivatives experts also predicted that the first US Ethereum futures ETF would be greenlit this week. 

Crypto markets have made some progress, with weekend momentum pushing total capitalization to a six-week high of $1.15 trillion.

Around $40 billion has poured back into crypto over the weekend as markets gained 3% on the day. 

Total crypto market cap 60 days. Source: CoinGecko

Bitcoin has surged 3.8% on the day, topping $28,000 for the first time since August 17. However, the asset faces heavy resistance at this level. Ethereum is up 3.3% on the day to trade at $1,729 at the time of writing. 

The week’s economic calendar does not directly impact crypto, but momentum could continue should technical resistance levels be overcome. 

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Will Big $3.2B Bitcoin Options Expiry Keep Market Momentum Moving?

Friday is Bitcoin options expiry day, and a massive tranche of contracts is set to go today. Crypto markets are enjoying a rare day in the green, but will the big expiry have an impact?

On September 29, around 118,000 Bitcoin options contracts will expire with a notional value of a whopping $3.2 billion. The end-of-the-month expiry is usually a big one, and September will dwarf previous weeks’ expiry events

Big Bitcoin Options Expiry 

The max pain point for today’s big batch of expiring Bitcoin options contracts is $26,500. This is now lower than the spot BTC price, which topped $27,000 a few hours ago. 

The price level with the most open contracts is max pain, and it’s also the level where most losses occur when the contracts expire.

The put/call ratio is 0.58, meaning almost two-thirds of today’s expiring contracts are calls (longs). 

Greeks Live noted that this is a quarterly delivery, adding this year’s Q3 is as flat as in previous years. Moreover, the third quarter is generally the least active period, and “Put’s position share is significantly lower compared to weekly deliveries.” 

Liquidity has continued to deteriorate of late, with large position shifting being the main trading driver this week. With delivery just around the corner, IV continues its downward trend.”

IV is implied volatility which measures expected future volatility derived from the expiring derivatives contracts. The downtrend indicates that the market consolidation and low volumes will likely continue for a while.

Bitcoin options OI. Source: X/@GreeksLive

Big Day For ETH Contracts 

In addition to Bitcoin options, today also marks the expiration of 1.1 million Ethereum contracts.

These have a notional value of $1.8 billion and a max pain point of $1,650 which is exactly where ETH is trading at the time of writing. The put/call ratio for the Ethereum contracts is 0.46.

Ethereum options OI. Source: X/@GreeksLive
Ethereum options OI. Source: X/@GreeksLive

Crypto markets are experiencing a rare day in the green, with the total cap climbing 2% on the day to reach $1.11 trillion.

BTC topped $27,000 in late trading on Thursday but has already cooled and dropped back to $26,958. 

Meanwhile, Ethereum gained 2.8% on the day to reach $1,651. ETH momentum may have been driven by the premise of the first futures ETFs being launched in the US next week. 

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ETF Experts Confident Ethereum Futures Will Launch Next Week

Industry experts and analysts are confident that the US Securities and Exchange Commission will approve an Ethereum futures product in early October. If they’re right, it will be the first ETH futures ETF to be launched in the United States.

Exchange-traded fund analysts are eyeing signals that an Ethereum-based product could get the green light early next week.

Ethereum ETFs Before Shutdown? 

Bloomberg intelligence analyst James Seyffart said he was “watching for filings to indicate Ethereum futures ETFs are indeed being accelerated for launch next week,” on September 28.

“We expect a lot more filings from the SEC today as they continue to clear their desks as much as possible before the shutdown. Normalcy is out the window.”

Unless Congress can reach a deal to pass a spending bill by the end of this month, the US government faces a shutdown. This will impact all federal agencies, including the SEC. 

ETF Store President Nate Geraci commented that if SEC is allowing Ethereum futures ETFs to launch:

“You have to assume forcing closure/delisting of BTC futures ETFs is off the table.”

He added that he was fascinated to see the SEC’s response to the Grayscale court ruling. 

“Seems like the only options are to allow spot BTC ETFs or find another reason to deny [them which could be] custody”.

Earlier this week, fellow Bloomberg analyst Eric Balchunas said there was a 90% chance that Ether futures would start rolling out in early October. 

According to the pair, there are 15 Ethereum futures ETFs from nine issuers currently awaiting approval. Issuers waiting for ETH of or hybrid ETF products include Valkyrie, VanEck, ProShares, Grayscale, Volatility Shares, Bitwise, Direxion, and Roundhill.

Business as Usual

However, it has been business as usual at the SEC this week. The regulator has been busy postponing crypto ETFs and procrastinating on decisions. 

On September 28, the regulator extended the review period for BlackRock, Valkyrie, and Bitwise’s spot Bitcoin ETF applications.

Seyffart said, “We’re expecting the other three Bitcoin ETF delay orders tomorrow before the government shut down.” The remaining issuers are WisdomTree, VanEck, and Fidelity.

ETF approval queue. Source: X/@JSeyff

Earlier this week, the SEC delayed its decision on the ARK 21Shares Ethereum ETF and the VanEck Ethereum ETF until the end of 2023.

Seyffart concluded,

“Everything the SEC has done this week is due to the shutdown.”

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Bitcoin Miner Selling Pressure Mounts as Hash Rate Peaks

Bitcoin miners are coming under increasing pressure to offload some of their BTC, which could put more downward pressure on prices. The move comes amid soaring hash rates and persistently high energy costs. 

Bitcoin miners are sending more BTC to centralized exchanges, which could be a precursor to offloading the assets to cover escalating expenses.

Bitcoin Miners Selling

On September 28, crypto analyst Miles Deutscher highlighted one of Bitcoin’s biggest supply headwinds – increasing miner selling pressure.

Peak hash rates and difficulty, in addition to soaring energy prices, have combined to heavily affect mining profitability, he noted.

“With rewards set to be cut in half via the halving, miners may be forced to sell to shore up capital.”

This is already starting to happen with record amounts of Bitcoin being sent to exchanges from miners, according to Glassnode.

Percent of miner revenue sent to exchanges. Source: X/@milesdeutscher

The total hash rate hit an all-time high of 425 EH/s (exahashes per second) last week, according to Moreover, the metric has risen by 68% since the beginning of the year.

Network difficulty is also at an all-time high of 57T, having increased 63% so far this year. 

Both metrics make mining Bitcoin more competitive and intensive which results in decreasing profitability. 

Hash price, which is measured in dollars per terahash per second per day, has slumped to $0.06, according to the Hashrate Index. Moreover, mining profitability has slumped 85% since the bull market peak when it was $0.40/TH/s/day. 

Bitcoin ordinal inscriptions have provided some reprieve for distressed miners this year. However, it is not enough to offset the need to sell. 

Earlier this week, Glassnode noted that it is likely that miners are “on the edge of income stress, with their profitability to be tested unless BTC prices increase in the near term.”

BTC Mining ESG Improvements 

Depressed BTC prices are also not helping miners. The asset has failed to breach resistance above $30K three times this year, falling back to the $26,000 zone. 

On the bright side, Bitcoin’s ESG (environmental, social, and governance) properties are improving as mining uses more renewable energy than ever before.

On September 26, mainstream media picked up the recent KPMG report on Bitcoin’s potential contributions to global ESG frameworks. It concluded: 

“The recent KPMG report serves as a powerful testament to the positive contributions of Bitcoin in terms of ESG factors, further bolstering the perception of cryptocurrencies in the mainstream.”

Bitcoin’s pivot to renewables and recent research counters the mainstream concern about mining energy usage patterns. However, this is of little comfort to Bitcoin miners who are poised to offload some of their holdings.

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Real-World Asset (RWA) Market Encounters First Distressed Debt Scenario

The tokenization of real-world assets (RWA) has been one of the hottest crypto narratives in 2023. However, the emerging sector is not immune to distressed debt situations, which appears to be what has happened with Goldfinch. 

Decentralized credit protocol Goldfinch’s FIDU token has been trading at a discount to net asset value (NAV). This has created a “distressed debt opportunity,” according to RWA analysts. 

Real-World Asset Opportunities 

FIDU is a “digital receipt” that represents a liquidity provider’s supply into the Senior Pool of the Goldfinch Protocol. 

On September 27, analysts at industry outlet reported that FIDU was trading at a discount of -26%. 

Goldfinch, which is pioneering private credit in the RWA space, recently experienced a default in one of its loan deals. Moreover, the Goldfinch governance forum suggested there may be a total loss of the $5 million loan, the outlet noted. 

However, they added that,

“Investors should not suffer total loss from the default, since the distressed loan represents only one of eleven different deals in Goldfinch’s Senior Pool.”

Goldfinch Senior Pool structure. Source: X/@rwa_xyz 

Investors allocate capital to Goldfinch’s Senior Pool via the FIDU token, which has fully collateralized exposure across eleven different loans.

After accounting for the loan default, the NAV of FIDU can be calculated to be $1.08, the outlet noted. However, earlier this month, it traded on secondary markets as low as $0.80, where it is still priced at a discount. 

Furthermore, there is an entire industry in traditional finance seeking opportunities to buy credit at a discount to NAV, they said before asking:

“Could FIDU’s discount to NAV represent the first analogous opportunity in the RWA markets?”

Nevertheless, this situation presents growing pains for bringing real-world assets on-chain.

RWA Ecosystem Latest 

According to, there is currently $557.6 million in active loans for private credit in DeFi. 

Ethereum-based Goldfinch has $103.7 million in active loans with an average base yield of 11%. Other big real-world asset tokenization protocols include Centrifuge, Maple Finance, Clearpool, and TrueFi.

Moreover, there is $666.7 million in total value of tokenized US Treasuries, yielding an average of 5.25%. T-bills are currently more lucrative than holding USD, DeFi stablecoins, or bank deposit accounts. 

As reported by BeInCrypto, real-world asset tokenization reached an all-time high of over $3 billion in August.

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Meta Launches ChatGPT AI Competitor on Instagram and Messaging Services

Meta, the firm formerly known as Facebook,  has launched a new conversational AI assistant called Meta AI. The ChatGPT rival allows users to search and get information across its apps, including Instagram, WhatsApp, and Messenger.

The artificial intelligence race is heating up, and Meta is the latest to enter the fray with its own AI chatbot.

Artificial Intelligence Arms Race 

The September 27 launch of Meta AI puts the social media firm in direct competition with OpenAI’s ChatGPT, Google’s Gemini, and Anthropic’s Claude.

Meta AI relies on one of the company’s large language models and partnerships with Microsoft Bing. It is also launching 28 celebrity and cultural icon chatbots on its platforms, according to reports.

“Meta AI is your basic assistant that you can talk to like a person,” said Meta CEO Mark Zuckerberg in a keynote at the company’s developers conference.

The firm has long dominated AI research, but Google and OpenAI have received more credit.

Its AI chatbot is more than just a data provider and is intended to be more entertaining, transforming how people interact with Meta products. Zuckerberg added,

“I think this is going to transform the way that people use all of our products.”

Additionally, Meta is launching new AI image creation tools for Instagram, allowing users to transform photos with different styles and backgrounds.

The artificial intelligence assistant will have limited availability in the United States. Moreover, the firm expects to integrate it with its latest smart glasses and its newly released virtual reality headsets.

Meta is entering a crowded space that already has a plethora of chatbots to choose from. However, it wants to go beyond a flagship chatbot and create more of a personality-driven social assistant. 

AI Latest Roundup 

The Meta launch comes just two days after OpenAI announced it was enabling users to talk with its ChatGPT chatbot. 

The new voice feature for ChatGPT will be rolled out over the next two weeks. This will put an AI voice companion in the pockets of people seeking a more human conversation with the chatbot.

Additionally, OpenAI announced on September 27 that ChatGPT can now search the internet on its own. The firm said,

“It is no longer limited to data before September 2021.”

Also this week, Amazon said it had signed a deal to invest up to $4 billion in the AI start-up Anthropic, which created the Claude chatbot. 

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US Stock Market Downtrend Confirmed: Will Crypto Markets Follow in a Red October?

The bears are gaining strength for both crypto and stock markets, as the major US indexes now confirming downtrends. Furthermore, October is usually a red month for markets, so there may be more pains before gains. 

US stock markets have been in decline for the past two months, and the move is likely to continue into October. 

Will Crypto Markets Follow?

The Nasdaq has fallen below its previous low in August, forming a new lower low this week. The downtrend, which has been confirmed according to crypto analyst “Cold Blooded Shiller,” began in mid-July. 

Since then, the tech-heavy Nasdaq Composite Index has dropped 9% to 13,063, where it settled at the close of trading on September 26. 

Nasdaq 2023 performance. Source: X/@ColdBloodShill

Additionally, the Dow Jones Industrial Average has fallen by 5.6% since the beginning of August. 

Furthermore, the broader S&P 500 Index has mirrored the moves. It has fallen almost 7% since the downtrend began at the beginning of July to 4,273 after the bell on Tuesday.

Moreover, the S&P 500 is now down 340 points since the Fed removed “recession” from their forecast, according to the Kobeissi Letter.

It added that the Fed marked the exact high in the S&P 500, which just hit its lowest level since June:

“Since then, rate cut expectations were pushed out by a year and corporate bankruptcies hit their highest levels since the pandemic.”

S&P 500 3 months. Source: X/@KobeissiLetter
S&P 500 3 months. Source: X/@KobeissiLetter 

A number of high-profile banks aped the Fed in dropping their recession predictions, yet the markets appear to be defiant. 

Crypto markets have been slightly correlated with tech stocks this year but have remained in consolidation for most of it. 

Following an initial spurt of growth in the first quarter, crypto markets have been flat since mid-March. Moreover, they have dropped 19% since their 2023 high in mid-April, also exhibiting a downtrend.

A Red October? 

October is historically the most volatile month of the year for US and global markets. With a downtrend already confirmed, things will likely slide deeper into the red next month, including crypto. 

October’s record of market crashes makes it the most feared month on the financial calendar. The Bank Panic of 1907, the Stock Market Crash of 1929, and Black Monday 1987 all happened during the month of October.

In the 2022 bear market, crypto markets were flat for most of October, gaining marginally towards the end of the month. The bull market of 2021 saw large gains for crypto in October, but 2020 was similar to 2022. 

2019 saw a brief pump at the end of October, but all gains were lost the following month. The bear market of 2018 was another flat October. 

If history rhymes, crypto markets will remain flat next month, but be aware that November is usually much more volatile for this asset class. 

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Stablecoin Issuers Compete With Money Market Funds For T-Bills

Stablecoins, or dollar-pegged assets, are now being recognized and included by major financial institutions. Moreover, they are competing for short-term assets such as Treasury bills, which are used for collateralization and earnings. 

US banking giant JPMorgan has collated some useful data regarding the footprint of stablecoins. 

Competition for Treasury Bills 

On September 27, Chief Economist at stablecoin issuer Circle, Gordon Liao, shared some recent data from JPMorgan.

He noted that at around 2% of the Treasury bill market, “stablecoin issuers represent a small sliver of the overall market.”

However, stablecoin issuers are competing with money market funds for short-term assets like T-bills. The Federal Reserve limited access to a key facility called overnight reverse repo (ON RRP) earlier this year. 

That means stablecoins, seeking to put cash in liquid assets and unable to access the Fed facility, will likely have to compete with the $5.64 trillion money-market fund. 

This could potentially push those rates below the offering level on the RRP, which is currently 5.3%. Liao suggested that lowering T-Bill returns could cause an increase in bank deposits on those offering better returns.  

“The missing point is that the crowding-out of T-bill buyers is the crowding-in of bank deposits.”

Stablecoins as a percentage of the total market: Source: X/@gordonliao

JPMorgan strategists led by Teresa Ho wrote, “While it is a tail risk, the cryptocurrency market seems to be more prone to it.” 

Moreover, rapid liquidation of assets like T-bills by stablecoins could impact money market funds and other stablecoin issuers, prompting further liquidations, according to JPMorgan. 

Liao continued to state that as non-interest-bearing instruments, stablecoins compete with over $2 trillion of physical bills in circulation. Moreover, that is growing at a rate of $100-200 billion a year. 

“If stablecoins were to expand in a large way, the marginal t-bill sellers that are crowded out would deposit into banks. This is counter-intuitive, but more and more research suggests this to be the likely scenario.”

Stablecoin Decline Halted 

Stablecoin market capitalization may have been in decline for the past year, but the trend is slowing. 

Since mid-2022, overall stablecoin market capitalization has been in decline, suggesting industry outflows. However, those declines slowed to a plateau in August 2023. 

Stablecoin market capitalization. Source: X/@ThorHartvigsen
Stablecoin market capitalization. Source: X/@ThorHartvigse

DeFi researcher Thor Hartvigsen, who shared the chart, observed:

“Stablecoins are one of the biggest use cases of crypto currently and I expect the sector to grow significantly in a bull market.”

The total stablecoin market cap is currently $123.5 billion, equating to around 11.4% of the total crypto market cap, according to CoinGecko.

The post Stablecoin Issuers Compete With Money Market Funds For T-Bills    appeared first on BeInCrypto.

Bitcoin Ordinals Boosting Miner Revenue, But Halving Will Hurt

Bitcoin ordinals and inscriptions have been a significant buyer of block space this year. Moreover, they have made a positive impact on miner revenue due to increased transaction fees, but dark clouds are looming as the halving approaches. 

In its “week on-chain” report on September 26, analytics provider Glassnode delved into whether ordinals and inscriptions were displacing monetary transfers.

Bitcoin Ordinals Filling The Gaps

Since their introduction in February 2023, inscriptions have been buying block space and filling up the mempool. It noted that they have been filling in leftover space after higher-value monetary transfers. 

However, Glassnode observed that the number of pending transactions in its own mempool has increased significantly since May. It added that most of these unconfirmed transactions have a very small data footprint. 

Moreover, inscriptions are sensitive to absolute fee amounts, buying the cheapest block space and getting displaced by urgent monetary transfers.

The explosion of text-based inscriptions aligns clearly with the uptick in pending transactions within our mempool, it noted before adding:

“This confirms that these small-size text inscriptions have become a significant source of demand for blockspace.”

New Bitcoin ordinal inscriptions. Source: Glassnode

Nevertheless, it is not all good news for miners. Despite increased fees for miners from this new wave of inscriptions, their income is still low overall. This is because the hash price is at an all-time low, and the halving event is approaching.

Hashprice, which is measured in dollars per terahash per second per day, is just $0.059, according to the Hashrate Index. Moreover, this is down 50% from the Bitcoin ordinals pump in May and 85% from the bull market peak of $0.40.

Miners will now earn just 2.26 BTC per Exahash active on the network.

Halving Stress for Miners 

As a result, many miners may soon face income stress and unprofitability unless BTC prices rise substantially. The halving in April or May next year will slash their block rewards in half to 3.125 BTC. Glassnode noted: 

“The endless logarithmic descent of hashprice shows just how cut-throat and unforgiving the mining industry is.”

Miner hashprice over time. Source: Glassnode
Miner hashprice over time. Source: Glassnode

The analytics firm concluded that there is minimal evidence that inscriptions are displacing monetary transfers. 

“With extreme miner competition in play, and the halving event looming, it is likely that miners are on the edge of income stress, with their profitability to be tested unless BTC prices increase in the near term.”

Meanwhile, BTC prices had retreated to $26,236 during the Wednesday morning Asian trading session.

The post Bitcoin Ordinals Boosting Miner Revenue, But Halving Will Hurt appeared first on BeInCrypto.

Lazarus Group Becomes TRON Whale After CoinEx Hack, Holding 137M TRX

North Korean-sponsored hacking collective the Lazarus Group is a TRON whale, according to on-chain data. Moreover, it has been on the rampage recently, raking in illicit gains from crypto platforms. 

On September 26, blockchain security firm PeckShield reported that the CoinEx Drainer holds just over 137 million TRX valued at around $11.63 million.  

Lazarus Group Holdings Growing 

It added that this constitutes 0.154% of the total TRON supply, making it the 66th largest TRX holder. The total supply of TRX is 89 billion, and it has a market capitalization of $7.5 billion. 

CoinEx Drainer crypto holdings. Source: X/@PeckShieldAlert

On September 12, the CoinEx exchange suffered a hack that drained as much as $55 million from the platform. Around a fifth of it was in the Tron native token, TRX. Moreover, the token is currently trading at $0.084, having gained 8% over the past fortnight. 

Furthermore, the North Korean hacker group Lazarus was responsible for the attack, according to blockchain security firm SlowMist. CoinEx resumed deposits and withdrawals for selected crypto assets on September 21. 

According to a Dune Analytics dashboard from 21 Shares parent, the Lazarus group currently holds $45.8 million worth of crypto assets. 

Its holdings spiked to over $80 million in January and early September, the latter following the $41 million hack of

While it holds a lot of TRX, the majority of Lazarus’ holdings are in Bitcoin. According to Dune, the cybercrime group has around $42 million worth of BTC.

Lazarus balance over time. Source: Dune Analytics
Lazarus Group crypto balance over time. Source: Dune Analytics

It also holds $640,000 in stablecoins, predominantly Binance USD (BUSD). 

According to the Federal Bureau of Investigations, Lazarus stole almost $200 million from Atomic Wallet, Alphapo, and CoinsPaid in June and July. 

Researchers have frequently reported that the group has channeled its ill-gotten crypto gains into North Korea’s missile program. 

Hacking Rampage Continues 

According to crypto security firm Elliptic, there were five Lazarus attacks in 104 days, netting the nefarious group around $240 million.

The firm observed that some of the funds stolen from CoinEx were sent to an address that was used to launder funds stolen from Stake. It also noted a change of tactics this year:

“An analysis of Lazarus’ latest activity suggests that since last year, it has shifted its focus from decentralized services to centralized ones.” 

It also reported that the Group prefers to use social engineering as an attack vector. Lazarus malware is used to target employees of centralized crypto providers in sophisticated phishing attacks, it warned. 

The post Lazarus Group Becomes TRON Whale After CoinEx Hack, Holding 137M TRX  appeared first on BeInCrypto.

Microsoft Reportedly Planning Xbox Crypto Wallet According to Leaked Documents

Global software behemoth Microsoft is reportedly planning to integrate crypto wallet functionality into its flagship gaming console. Leaked documents from an ongoing legal battle have revealed a raft of upgrades for the Xbox, including one that could integrate digital assets. 

The Verge reported that someone has leaked unredacted documents from the Federal Trade Commission’s (FTC) case against Microsoft.

An Xbox Crypto Wallet Revealed?

The FTC has been attempting to block Microsoft’s $69 billion purchase of Activision Blizzard. Moreover, the leaked documents from the case have provided a detailed look at Microsoft’s near-future plans for the Xbox.

Upgrades to the popular gaming console included plans for a new disc-less Xbox Series X, a gyro controller, and a next-gen hybrid Xbox to be released in 2028.

The documents also included an Xbox roadmap from May 2022. According to reports, this detailed plans to integrate a crypto wallet into the next version of the console.

Xbox chief Phil Spencer confirmed that the documents were a year old and expressed regret that the case unintentionally disclosed the plans.

Michael Silberberg, head of investor relations at AltTabCapital, said, “In concept, digital assets and gaming have always been closely tied,” and added:

“Microsoft’s inclusion of cross-chain wallets in Xbox will allow the next generation of game developers to enable players to create and retain real value from in-game worlds, facilitating actual digital asset ownership, decentralized player-driven markets, and reduced fraud in digital economies.”

He added that integrating crypto can disrupt and supercharge the $76 billion in-game microtransaction market.

Microsoft and Activision have pushed the merger deadline to October 18 in order to tie up “remaining regulatory concerns.” 

Web3 and Gaming Marriage 

There were no further details on Microsoft’s crypto ambitions, but rumors have been abound for years. In addition to Microsoft, tech giants like Amazon, Google, Sony, and Meta have also been linked with crypto integration concepts. 

However, this year’s war on crypto by US regulators has dampened enthusiasm for the digital asset industry.

Web3, blockchain gaming, and digital assets perfectly fit into the gaming industry.

Therefore, it is likely only a matter of time before one of the tech giants integrates a crypto wallet. The rest are likely to follow when that happens. 

The post Microsoft Reportedly Planning Xbox Crypto Wallet According to Leaked Documents  appeared first on BeInCrypto.

US National Debt Alarm: $14 Billion Added Per Day

The national debt in the United States has been surging since it surpassed a record $33 trillion last week. Moreover, the amount piled on daily is larger than the market capitalization of the seventh-largest crypto asset. 

On September 26, macroeconomics outlet The Kobeissi Letter reported that total US debt has jumped by $100 billion since it crossed $33 trillion exactly one week ago.

US National Debt Crisis

Moreover, that equates to $14.3 billion per day being added to US debt over the last week. This is more than the total amount of Ethereum staked on Lido, which is valued at around $13.8 billion.

Add in around $3 billion per day of interest expenses, and that is over $17 billion per day, Kobeissi added.

That equates to more than the total market capitalization of Cardano and Solana combined being added PER DAY. 

“US debt and interest expense are on track for exponential growth. When will this be called a “crisis?””

US national debt. Source: X/@KobeissiLetter

The outlet added that deficit spending has become so large that the US is issuing $2 trillion in bonds over 6 months which is driving rates higher:

“Simultaneously, the US is refinancing debt at current rates which have more than doubled.”

Moreover, the debt ceiling remains unlimited until January 2025, so these whopping figures will be the new normal. The US debt clock tracker predicts that it will reach an epic $45 trillion over the next four years. 

Not Just America 

The parabolic debt problem is not limited to Uncle Sam. Central banks worldwide have been printing money, pushing global debts to a record high of $307 trillion. 

However, markets such as the United States and Japan were driving the rise, according to the Institute of International Finance (IIF). Global debt in dollar terms had risen by $10 trillion in the first half of 2023 and by $100 trillion over the past decade, it reported last week. 

Meanwhile, crypto markets are a minnow compared to these figures. The total capitalization of all digital assets is just a trillion dollars. More than this amount has been piled onto the US national debt so far this year. 

Crypto markets remain lackluster, with sentiment at bear market lows. As a result, there has only been a minor move upward over the past 24 hours, pushing the total market cap to $1.09 trillion. 

The post US National Debt Alarm: $14 Billion Added Per Day appeared first on BeInCrypto.

Weekly Economic Events Impact on Crypto Markets: Fed Chair’s Speech in Focus

The coming week is shaping up to be busy for the financial-economic calendar, with several key events taking place. Crypto market volatility is likely to return, and bears are in the driving seat at the moment. 

On September 25, macroeconomics outlet The Kobeissi Letter listed this week’s key events. The one to watch for is the Federal Reserve chair’s speech on September 28.

A Week of Economic Events 

On September 26, a new data report for US building permits and new home sales will be released. The numbers have been forecast to dip a little, suggesting slightly weaker real estate markets, but it should not impact crypto markets. 

Also on Tuesday are the month’s US consumer confidence index figures, which are reflective of the broader economy. They are expected to remain subdued at August levels, suggesting the economy remains sluggish.

This would be bearish for crypto markets since there is less appetite for high-risk asset investments. 

The second quarterly GDP (gross domestic product) figures are expected to be released on September 28. The median forecast is a rise from 2.1% to 2.3%. 

Moreover, there will be two Fed speakers on Thursday, Fed Governor Lisa Cook and Chair Jerome Powell. However, neither is expected to have much impact on digital asset markets as Powell will hold a town hall meeting for educators. 

Last week, the Fed decided to leave rates unchanged at 5.25%-5.5%, as widely expected by the markets.

Friday will see new figures for the Personal Consumption Expenditures (PCE) index. The Core PCE inflation is also known informally as the Federal Reserve’s preferred inflation gauge. Core PCE year-on-year is expected to fall from 4.2% to 4.0%. 

Changes in Core PCE. Source: Statista 

Speaking on financial markets, Kobeissi noted,

“The return of volatility is fantastic news for traders.” It added, “More Fed uncertainty is back and we are ready for it.”

Crypto Market Outlook 

Crypto markets remain deep in bear territory, so it is unlikely that this week’s economic events will rouse the bulls. 

Total capitalization has fallen by around $10 billion over the weekend. As a result, it currently stands at $1.08 trillion, where it has been for the past fortnight. 

BTC dropped sharply during the Monday morning Asian trading session, shedding 2.4%. The asset fell to $26,000 which served as support for a slight rebound to $26,106.

However, a fall below this level is expected this week as sentiment slides. Additionally, October is usually very bearish for stock and crypto markets, and it is just around the corner. 

The post Weekly Economic Events Impact on Crypto Markets: Fed Chair’s Speech in Focus appeared first on BeInCrypto.

Mixin Network Attacked for $200M in Latest DeFi Exploit

The crypto bear market has not deterred cyber criminals who continue to target crypto and DeFi platforms. The latest one to be attacked is the high throughput blockchain platform Mixin Network.

On September 23, the Mixin Network’s cloud service provider database was attacked by hackers. Moreover, this resulted in the loss of around $200 million, according to Mixin Kernel, which reported the incursion on September 25.

DeFi Exploit Season

The team stated that they have contacted Google and blockchain security company SlowMist to assist with the investigation. 

Deposit and withdrawal services on the Mixin Network have been temporarily suspended, it added. Moreover, the team said that services would be reopened once the vulnerabilities were confirmed and fixed but did not provide further details.

Mixin founder Feng Xiaodong will explain this incident in a livestream at 13:00 HKT on September 25, the team said. Additionally, they added that an English language version will follow. 

Some observers pointed out that Mixin, a decentralized network, relied on a centralized database, which became the point of failure. 

Moreover, the protocol total value locked has fallen around $30 million since the attack. It is currently $352 million, according to DeFiLlama

Mixin offers a high-speed peer-to-peer transactional network for digital assets. Furthermore, it enables other blockchain-distributed ledgers to gain high transactions per second, fast confirmations, and zero transaction fees. 

In its weekly security report, SlowMist detailed seven security incidents over the past week, not including Mixin. 

“The week observed an unsettling rise in multifaceted attack methods, from phishing to rug pulls and DNS hijacking.”

Finally, it concluded that the diversity of these attacks underlined the crucial necessity for comprehensive security strategies for crypto protocols.

XIN Prices Tank

Mixin’s native token, XIN, has fallen 8.5% over the past 24 hours as news of the attack spreads. 

XIN was trading at $195 at the time of writing, falling from a weekend level of around $216.

XIN Price in USD 1 day. Source: BeInCrypto

Furthermore, XIN is currently down 90.7% from its January 2018 all-time high of $2,095. It failed to recover half of its peak price during the 2021 bull market. 

Additionally, the latest DeFi exploit follows attacks on Linear Finance and Balancer last week.  

The post Mixin Network Attacked for $200M in Latest DeFi Exploit appeared first on BeInCrypto.

Vitalik Buterin Continues Cashing Out of Ethereum, Further Downsides Expected

The Ethereum co-founder has been moving ETH to centralized exchanges recently. Moreover, Ethereum’s price, on-chain activity, and sentiment have been dwindling for the world’s second-largest crypto asset. 

On September 25, Lookonchain reported that Vitalik Buterin had just deposited 400 ETH valued at around $632,000 on Coinbase. The move may be innocent, but large sums moving to centralized exchanges usually signal that sales preparations are being made. 

Ethereum Downsides Expected

Furthermore, Ethereum price, sentiment, and momentum are flat at the moment, and it did not move in tandem with Bitcoin last week. 

“There are no signs of buying pressure from Ethereum whales yet,” observed @Ali_Charts late last week. ETH whales with balances greater than 10,000 have declined this month, as has the asset’s price. 

ETH whale balances. Source: X/@ali_charts

“Immortal Crytpo” also eyed further downsides for Ethereum. On September 25, he predicted that prices could fall back to $1,300 to $1,500 over the next few weeks.

However, the investor was unperturbed, saying that he planned to keep accumulating at these levels. 

“I think ETH will outperform BTC at some point but not like in the previous cycle.”

Most of the respondents agreed that accumulation was a slow and steady strategy for solid gains next year when cycle momentum changes. 

On-chain analytics platform CryptoQuant warned of a potential short squeeze for Ethereum. Moreover, analysts observed the negative funding rates on derivatives markets. 

Funding rates represent the periodic payments made to traders based on the difference between perpetual contract markets and spot prices. 

“This indicates that futures traders have adopted a pessimistic outlook on ETH, enhancing the possibility of a further price drop,” it stated before adding: 

“Consistent negative funding rates can potentially trigger a cascade of short liquidations, which in turn could lead to a sudden price rebound.”

Ethereum funding rates. Source: X/@cryptoquant_com
Ethereum funding rates. Source: X/@cryptoquant_com

Ethereum Price Outlook 

The Ethereum price has dipped again during the Monday morning Asian trading session. As a result, ETH is down 1% on the day, falling to an intraday low of $1,570 a few hours ago. 

ETH Price in USD 1 day. Source: BeInCrypto
ETH Price in USD 1 day. Source: BeInCrypto 

The asset had rebounded slightly to trade at $1,580 at the time of writing, but further declines looked likely. 

October is traditionally a bearish month for both stocks and crypto. Therefore, those price predictions above may play out over the coming weeks.

However, Ethereum staking remains bullish, hitting new milestones, so the long-term outlook is positive. 

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Can $590 Million Bitcoin Options Expiry Stop the Bears?

Friday is Bitcoin options contracts expiry day, and a sizable stack is about to expire. Crypto markets have turned bearish again, retreating as the week comes to a close, but will the options make an impact?

On September 22, around 22,000 Bitcoin options contracts will expire with a notional value of $590 million. Furthermore, it is a smaller expiry event than in previous weeks, with a huge chuck expiring next Friday. 

Bitcoin Options Expiry 

The max pain point of today’s batch of expiring Bitcoin options contracts is $26,500, which is not far off current spot prices of $26,660. 

Max pain is the price level with the most open contracts and at which most losses will be made when they expire.

The put/call ratio for the contracts is 1, which means longs and shorts are evenly matched. 

GreeksLive noted that the percentage of put positions has increased significantly this week. There are more investors actively buying puts in the face of significantly worse market liquidity recently, it added before noting:

“BTC’s recent trend has been significantly stronger than ETH, and BTC IV is also higher than ETH at full term, which makes ETH’s monthly Put a more worthwhile investment on balance.”

Bitcoin OI. Source: X/@GreeksLive

Bitcoin has moved more over the past week, reaching its highest price of the month on Monday at $27,400. Comparatively, Ethereum has remained stagnant. 

Implied volatility (IV) is a measure of expected future volatility derived from the expiring derivatives contracts.

Ethereum Contracts Coming to a Close

Around 147,000 Ethereum options contracts are also set to expire today. These have a notional value of $230 million and a max pain point of $1,600. 

The put/call ratio for these is 0.94, which is also pretty evenly distributed between long and short contract sellers. 

Ethereum OI. Source: X/@GreeksLive
Ethereum OI. Source: X/@GreeksLive

Bitcoin is currently down 2.6% from its Monday high, dipping to $26,664 at the time of writing. Moreover, today’s expiring BTC options will unlikely impact markets very much. 

BTC is hovering just above support at $26,500, but further declines could result in a loss of the $26,000 price level again.

The post Can $590 Million Bitcoin Options Expiry Stop the Bears?  appeared first on BeInCrypto.

Billionaire Investor Tim Draper Launches Crypto Accelerator in Bear Market

Tim Draper has unveiled a new crypto venture studio and accelerator as the billionaire investor seeks to defy the bear market blues. Draper Goren Blockchain (DGB) aims to accelerate DeFi innovations, among others.

On September 20, Tim Draper, Alon Goren, and David Bleznak unveiled their new incubator. The accelerator is focused on web3, crypto, and blockchain “in the midst of the bear market.”

Tim Draper Does Some Bear Market Building

Draper Goren Blockchain (DGB) is a venture studio and general partnership focused on accelerating crypto startups, according to the announcement

Bitcoin bull Draper is no stranger to investing in crypto and blockchain. He is also known for known for early investments in Coinbase, Robinhood, Tesla, Skype, and others.

Moreover, he has made some grand price predictions calling for a $250,000 BTC in late December.

Speaking about his new venture, Tim Draper said:

“It’s a cliche that bear markets are a time for builders to build, but that means there are incredible projects currently being developed that are in need of capital and support.”

DGB aims to amplify crypto projects that are advancing the industry in “anticipation of an influx of millions of new users and institutions in the coming months and years,” he added.

Founding partner Alon Goren said,

“We’ve been backing Bitcoin and crypto founders for many years now and intend to be here for the long haul.”

DGB’s third partner, David Bleznak, who was recently at Coinbase, added: 

“We’re particularly excited about innovations in DeFi, blockchain Layer-2 infrastructure, and consumer applications in gaming, social, and more,”

The team plans to spend the next ten years working with web3 firms. It will invest between $25,000 and $100,000 in pre-seed startups during this period.

Previously, Draper’s venture studio, Draper Goren Holm, launched a $25 million blockchain fund back in 2020. 

On September 16, he announced the launch of Draper Nation, what appears to be an ambitious metaverse project. 

Crypto Market Outlook

Despite the billionaire’s bullish outlook, crypto markets are still deep in bearish territory. As a result, total market capitalization dropped 1.6% on the day, falling to $1.09 trillion. 

Bitcoin had retreated to $26,615 at the time of writing after shedding 1.6% on the day.

BTC/USD 1 day. Source: BeInCrypto

Meanwhile, Ethereum was back below $1,600, having lost 1.8% over the past 24 hours. 

The altcoins were a sea of red. However, most of the high-cap coins limited their losses to around 2%.

The post Billionaire Investor Tim Draper Launches Crypto Accelerator in Bear Market appeared first on BeInCrypto.

Linear Finance DeFi Exploit Collapses LUSD Stablecoin to Zero

Decentralized finance protocol Linear Finance has reported an attack that has resulted in liquidity being drained in its Linear USD (LUSD) token. It is the latest DeFi exploit in what has been a busy month for them so far. 

On September 21, Linear Finance reported that it was subject to an attack that resulted in the draining of all LUSD liquidity on both PancakeSwap and Ascendex.

DeFi Exploit Season

The attacker was able to mint an unlimited supply of LAAVE and subsequently traded the liquid asset to LUSD on the Linear Exchange. They then sold the tokens on PancakeSwap and Ascendex decentralized exchanges.

The team has halted all smart contracts and bridges on the protocol, it stated in a blog post. There have been no updates on the DeFi protocol’s X (Twitter) feed since the initial alert

The Linear Team said they have engaged an “industry-leading team to track the attacker(s) and bring them to justice.”

“Wallets known to have taken part in the exploit have been shared with all major exchanges and authorities. Restoring the protocol and un-doing the damage for our users will be our highest priority until the issue is fully resolved.”

There were no further details of the attack or the amount lost at the time of writing. 

The protocol supports cross-chain liquid and synthetic asset trading. It has a collateralized debt pool that allows users to deposit collateral to mint Linear USD, which is used to trade synthetic assets on the Linear Exchange.

The protocol is governed by the LINA token, which is used for voting and staking rewards. Furthermore, Linear Finance offers two main tokens: LINA is used for governance and staking, and LUSD is a stablecoin pegged to the US dollar used to trade synthetic assets.

LUSD Collapse 

According to DeFiLlama, Linear Finance’s total value locked is around $8 million. Moreover, it doesn’t appear to have tanked as a result of this DeFi exploit. 

The same cannot be said about the protocol’s stablecoin. LUSD collapsed to zero when the stablecoin liquidity pools were drained.

LUSD/USD 24 hours. Source: BeInCrypto

Remarkably, the protocol’s LINA token appears to be unaffected by the DeFi exploit. LINA was trading flat on the day at $0.011 at the time of writing. 

The DeFi token has actually gained 3.5% over the past week but remains down 96% from its March 2021 peak of $0.298.

The post Linear Finance DeFi Exploit Collapses LUSD Stablecoin to Zero appeared first on BeInCrypto.

Mt. Gox Rehabilitation Trustee Changes Repayment Deadline (Yet Again)

The Mt. Gox exchange trustee responsible for paying back the firm’s creditors has officially changed the deadline, extending it for another year. This outcome will not please those whom the defunct crypto exchange still owes money to.

On September 21, Nobuaki Kobayashi, the Mt. Gox trustee and attorney, wrote that he has extended the repayment deadline from October 31, 2023, to October 31, 2024.

Mt. Gox Repayments Delayed 

He stated that the extension had been granted with the permission of the Tokyo District Court. Moreover, it extends the deadline for the base repayment, the early lump-sum repayment, and the intermediate repayment.

The letter noted that repayments could be made as early as the end of this year for rehabilitation creditors who have already provided the necessary information.

It stated that they extended the deadline due to time restraints on gathering information from rehabilitation creditors. Confirming information and sharing it with banks and exchanges also caused delays, according to the letter. 

“The rehabilitation trustee will not be able to complete the repayments by the deadline of the base repayment, the early lump-sum repayment, and the intermediate repayment, all of which were set for October 31, 2023.” 

Mt.Gox Rehabilitation Trustee letter. Source: X/@WuBlockchain

Mt.Gox holds 142,000 BTC, 143,000 BCH, and 69 billion yen (around $465 million), among others, noted industry observer Colin Wu. 

There have been multiple extensions to deadlines for creditors of the failed Tokyo Bitcoin exchange. Selection and registration deadlines were extended first to March 10 and then eventually to April 6, 2023.

Defense With a Calculator

On September 13, Mt. Gox co-founder Mark Karpelès said a scientific calculator he bought in jail was sufficient to prepare a defense.

At the time, he said the calculator was the preferred tool for accounting-related crimes, which helped him prove the company earned more than it spent.

Ripple co-founder Jed McCaleb launched the exchange in 2010. However, Mt. Gox filed for bankruptcy protection in Tokyo in February 2014. This followed the loss of more than 800,000 BTC due to suspicious wallet activity. 

Mt. Gox was one of the first crypto exchanges, facilitating more than 70% of all BTC trades at its peak.

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Crypto Industry May Get Respite From SEC if US Government Shuts Down

The crypto industry has been under heavy fire from US regulators for most of this year. However, it might be due a welcome period of respite if the federal government goes into a temporary shutdown. 

Securities and Exchange Commission chair Gary Gensler has expressed concern about his agency’s ability to police crypto should the US government shut down.

Government and SEC Shutdown Looming 

The US government will run out of funding after September 30. Unless Congress can reach a deal to pass a spending bill by the end of the month, it faces a shutdown.

This could restrict the activities of federal regulators such as the SEC, which may have its hands tied for a while. 

SEC Capabilities and Responsibilities. Source: Robinhood

Gary Gensler told Bloomberg that without his policing of markets, there would be no oversight of major events. He said:

“The public should understand we’ll largely be a skeletal staff. The normal oversight we have on markets will not be possible.”

Gensler, who was accused of creating a ‘banana republic’ at the SEC, added that companies that want to go public might not be able to have their filings reviewed. 

However, considering the amount of time the SEC takes in their reviewing process, this is unlikely to be an issue. 

The silver lining is that the crypto industry would get some respite, and the avalanche of litigation may ease for a while. 

Furthermore, Bloomberg ETF analyst Eric Balchunas reported other aspects of the interview. He was asked about whether courts have any effect on his thinking regarding crypto. 

Gensler said, “I wish something the court could say would bring compliance sooner.” Then he went into his usual anti-crypto tirade, labeling industry players and investors as “fraudsters and hucksters.”

Bitcoin ETF Rejection Possibility 

The SEC chair was also asked if a Grayscale loss could result in revoking Bitcoin ETFs, according to Balchunas. Gensler was evasive, replying:

“I’m not going to get ahead of the staff work. We take into consideration any time a court rules, and we consider it and think it through, and deal with filings that are in front of us.”

Additionally, Crypto Law’s response was actually closer to the truth of the matter: 

“The courts are actually bringing Gary Gensler into compliance on crypto. He has wasted untold millions of public dollars on ridiculous lawsuits that are failing one after the other, while massive frauds go off like bombs right under under his nose.”

Moreover, there has been no reaction from crypto markets, which remain at $1.1 trillion capitalization today. 

The post Crypto Industry May Get Respite From SEC if US Government Shuts Down appeared first on BeInCrypto.

Kraken Exchange Partner Sued by Australian Securities Commission for Non-Compliance

The regulatory crypto crackdown and the deluge of litigation targeting the industry are not limited to the United States. Australian securities regulators have sued a crypto exchange providing services for Kraken in the country.

The Australian Securities and Investments Commission (ASIC) sued Bit Trade Pty Ltd on September 21, as reported.

Australian Crypto Crackdown? 

Furthermore, Bit Trade is the provider of the Kraken crypto exchange to Australian customers. 

The Australian securities regulator said it had initiated civil proceedings against the company for “failing to comply with design and distribution obligations for its margin trading product,” according to Reuters.

The design and distribution obligations require companies to design financial products that meet the needs of consumers and distribute them in a targeted manner.

ASIC claims the crypto exchange failed to create a “target market determination” for the product before launching it.

The margin trading product is a credit facility providing customers credit to buy and sell certain crypto assets on Kraken.

According to the regulator, customers can receive an extension of credit of up to five times the value of the assets they use as collateral.

Moreover, it added that at least 1,160 customers had used the margin trading product. These incurred a total loss of about $US8.35 million since the product was launched in October 2021.

The report added that ASIC is seeking declarations, pecuniary penalties, and injunctions prohibiting Bit Trade’s ongoing conduct. 

Additionally, ASIC Deputy Chair Sarah Court said:

“These proceedings should send a message to the crypto industry that products will continue to be scrutinised by ASIC to ensure they comply with regulatory obligations in order to protect consumers,”

Speaking to the AFR, Kraken’s local managing director Jonathon Miller said:

“We are both surprised and disappointed to have received today’s enforcement action. We believe this product is offered in compliance with Australian law, and will continue our efforts to receive clarity on this matter.”

Share of people who own cryptocurrency in Australia 2019-2022. Source: Statista

No Clear Regulations Down Under Yet 

In related news, the embattled Hong Kong crypto exchange JPEX has applied for deregistration in Australia. Hong Kong regulators cracked down on JPEX earlier this month, arresting employees with charges of fraud for operating an unlicensed crypto exchange. 

In July, ASIC canceled FTX Australia’s license, prohibiting its operations as a crypto exchange and impacting 30,000 customers at the time.

Crypto exchanges operating in Australia include Kraken, BTC Markets, Swyftx, and Coinbase. Moreover, they are still waiting for the government to introduce regulations to govern the sector. 

The post Kraken Exchange Partner Sued by Australian Securities Commission for Non-Compliance appeared first on BeInCrypto.

BitBoy Begging Bowl Amid HIT Network Drama Riles Crypto Community

Crypto influencer BitBoy, also known as Ben Armstrong, has started a donation campaign to fund an ongoing legal battle. He has raised some funds, but not everyone is enamored with the crypto YouTuber.

On September 20, Ben Armstrong asked for donations to help his legal fund. Media firm HIT Network has “taken all my money from me so I can’t fight,” he lamented. 

BitBoy Asking For Donations

The influencer then went on to ask for crypto donations: 

“I’m humbly asking anyone who has ever benefitted from my content or anything I’ve done to help donate to my legal fund to get BitBoy Crypto back.”

The address he provided already had 24.7 ETH worth around $40,000 in it at the time of writing. Moreover, small donations of a fraction of an ETH were trickling in over the past four hours. 

Ben Armstrong Posted Tweet Asking for Money. Source: X/@BenArmstrongsX

Armstrong claims to have been the victim of blackmail, extortion, public humiliation, death threats, outright lies, and more. “I have receipts and proof 100%,” he said. 

BJ Investment Holdings, the parent company of HIT Network and BitBoy Crypto, removed the crypto influencer from the company in late August. 

HIT Network responded on September 20, stating:

“To be clear, the hearing last Thursday was for the emergency motion Ben filed seeking to have his position restored with the company, which the Judge promptly denied because it had no merit. The legal process is not concluded, but we are confident the Court will continue to validate the steps we took to protect the company and its employees.”

In late August, Armstrong filed a lawsuit against fellow YouTuber Erling Mengshoel, who uses the alias Atozy. However, he dropped the defamation suit shortly after, claiming he didn’t want it to go public. 

A few days later, Mengshoel made his gratitude known to the crypto community, who helped him raise $200,000 to fight the case brought by BitBoy.

No Funding From These Fellows 

Blockchain sleuth ZachXBT asked

“How about all the people who lost money as a direct result of you promoting sketchy projects and more recently meme coins?”

Trader “EmperorBTC” posted a photo of Armstrong sitting on the hood of a Lamborghini, telling his 360,000 X followers: 

“Don’t donate a single Penny to this Scammer. Shilled garbage to his innocent audience. Partnered with shady coins, promoted and dumped it on Poor People. Wants people to donate to him, what about the people who lost their life savings because of him? Lowest of the low Scum.”

Image source: @EmperorBTC
Image source: @EmperorBTC

Meanwhile, “Satoshi Flipper” said

“If you’re sending Bitboy money, you don’t give 2 shits about this place. Just part of the disease crippling the trust that normal & honest influencers are trying to build with their followers. Shame on you for sending him 2 pennies. People are destitute because of his past.”

Investor “Crypto Tony” told his 338,000 X followers:

“Literally woke up to seeing Bitboy begging for money. This is a guy who has made millions and millions. Doesn’t really get more pathetic than this, and another low towards his community.”

“Certainly must be near a bear market low now,” he added. 

The post BitBoy Begging Bowl Amid HIT Network Drama Riles Crypto Community   appeared first on BeInCrypto.

Balancer Under Attack Again, Loses $238K in Latest DeFi Exploit

The decentralized finance (DeFi) protocol Balancer has been attacked in what appears to be the latest industry exploit. The protocol alerted users of the incursion, warning them not to interact with it.

On September 20, Balancer alerted users that its front end was under attack. “The issue is currently under investigation,” it noted around five hours ago. 

Balancer DeFi Website Compromised 

The team warned users not to “interact with the Balancer UI until further notice!” There were no further updates from the Balance X (Twitter) feed at the time of writing. 

However, blockchain security firm PeckShield reported that $238,000 worth of crypto assets had been stolen in the attack

Crypto sleuth ZachXBT confirmed the amount, posting an image and the attacker’s address.

Screenshot from Balancer attack. Source: X/@zachxbt

In its most recent update, PeckShield noted the Balancer frontend attacker had swapped 15.4 ETH for around 2,730 AVAX and transferred them to the Mexc exchange.

Industry commentator Colin Wu reported that a DNS hijacking attack had hit Balancer, but confirmation of this remains pending.

However, visiting the website generated a red flag for those that have MetaMask installed. 

“MetaMask flagged the site you’re trying to visit as potentially deceptive. Attackers may trick you into doing something dangerous.”

Screenshot from compromised Balancer website. Source: BeInCrypto/ 
Screenshot from compromised Balancer website. Source: BeInCrypto/ 

Web3 analyst “cyclop,” said their website had been “injected with Drainer,” a malicious program that deducts tokens from wallets. They added:

“Website is generating approval transactions that enable a malicious contract to transfer all of your funds.”

As a precaution, users should disconnect all wallets. Cyclop expressed disapproval that Balancer had yet to make a statement on the situation:

“Very strange that Drainer is embedded in the actual Balancer website, looks like an exit scam. Balancer needs some kind of response to what’s happening!”

BAL Price Unmoved

BAL prices spiked to $3.45 before dumping to $3.27 in the hours following the attack. However, BAL is only down around 2% on the day as the full fallout has yet to take effect. 

Balancer BAL Price Chart. Source: BeInCrypto
Balancer BAL Price Chart. Source: BeInCrypto

The DeFi token has lost a whopping 95% since its May 2021 peak, however. 

Moreover, the protocol’s total value locked was unaffected by the attack and remained at $710 million, according to DeFiLlama

It is the second time in as many months for the DeFi liquidity protocol. On August 22, Balancer Labs stated that it had received a critical vulnerability report affecting a number of V2 Pools. It also warned of a potential exploit in January. 

The post Balancer Under Attack Again, Loses $238K in Latest DeFi Exploit appeared first on BeInCrypto.

Former US Congressman Charged With Insider Trading—Is Nancy Pelosi Next?

A US court ordered a former Republican congressman from Indiana to spend 22 months in prison for trading on inside information. In March, US District Judge Richard Berman in New York found Stephen Buyer guilty and sentenced him.

The politician, who served in Congress from 1993 to 2011, traded using information he had on mergers while working as a consultant after leaving office.

Insider Trading Conviction

On September 19, the court handed down the sentence. According to reports, they ordered the buyer to report to prison on November 28. 

He was found guilty of making nearly $350,000 in insider trading. He had prior knowledge ahead of T-Mobile US Inc.’s 2018 announcement of plans to acquire Sprint Corp in a $26.5 billion merger. Prosecutors said Buyer bought tens of thousands of shares after a T-Mobile executive told him about the merger on a Miami golf weekend.

Buyer also traded on Guidehouse Inc.’s 2019 acquisition of Navigant Consulting Inc.

After the March verdict, attorney Damian Williams said that Buyer:

“Leveraged his position as a corporate advisor to twice use his clients’ material nonpublic information to commit insider trading.”

However, Buyer declared his intention to appeal and told the judge that his life was characterized by “good acts.”

The politician served on the House Subcommittee on Communications and Technology, which oversees the US telecoms industry. After leaving Congress in 2011, he formed a consulting firm advising companies in the sector.

Forget insider trading and learn copy trading with our guides: 6 Best Copy Trading Platforms in 2023

The heavy sentencing has put the spotlight back on other potential insider trading misdemeanors. Even Elon Musk has been sued over his Dogecoin shilling. 

High-profile figures, such as US Speaker of the House of Representatives Nancy Pelosi, may implicate themselves. In June, Nancy Pelosi’s husband exercised roughly $2.6 million worth of Apple and Microsoft stock options.

Paul Pelosi has faced backlash over his stock trades that seem to coincide with legislation in the technology sector. Additionally, Nancy has repeatedly stated that her husband’s trades have nothing to do with her political knowledge. 

In July 2022, Paul Pelosi sold millions worth of stock Nvidia. This was a day before the Senate passed a multibillion-dollar bill aimed in part at boosting US chip manufacturing. 

Paul Pelosi Sells Nvidia Shares. Source: Forbes

Delving Deeper into Policician’s Investments

On September 15, internet culture outlet the Daily Dot questioned Nancy Pelosi’s stock trading habits. The pair have accrued millions of dollars in real estate and other investments, casting light on their stock holdings.

“The American public has long suspected that members of Congress use their power and knowledge to give them an edge in the stock market.”

There are even Nancy Pelosi stock-tracking X (Twitter) accounts that have the goal of “getting them banned from trading.” 

Furthermore, reports from September 14 estimate that her entire portfolio has increased by around 30% this year. They also added that “Other politicians have seen even larger increases.”

The post Former US Congressman Charged With Insider Trading—Is Nancy Pelosi Next? appeared first on BeInCrypto.

Binance CEO Defends Donations Following Crypto Charity Criticism

Binance chief executive Changpeng Zhao has commented on feedback following the firm’s large crypto donation for Morocco earthquake relief. In the true nature of social media, the move was criticized by a handful of people. 

On September 12, Binance donated $3 million in its native token, BNB, to Morocco’s earthquake relief efforts. 

Crypto Charity Conundrum 

“Guess what? You can be criticized when you donate $3 million dollars worth of crypto after an earthquake.”

This was an exclamation from Changpeng Zhao on September 18. CZ added that issues raised were typically from traditional charity organizations unfamiliar with crypto. 

He went on to list five common issues raised regarding crypto donations. 

People need food and water, not crypto, he said, noting that Binance has dual programs. The company has previously donated food, water, masks, and even oxygen tanks, but these take time. Crypto is instant. 

Binance Charity division claims to have helped nearly 2.1 million people across 54 countries. Source: Binance Charity

One point of contention was that it is not easy to convert BNB into Moroccan Dirham (MAD) in the country. However, CZ disagreed over the difficulty of conversion, saying that crypto can be easily converted into cash. 

“A non-crypto person saying crypto is not cash is like a blind person saying lights are useless.”

Donations only help Binance/BNB users and not all people in need, which was another criticism. On that, he agreed, noting that they can only reach their users at speed:

“We are not saying we can solve all problems, but we try to help the little bit where we can. That’s what donations are.”  

Another criticism was that some of the users receiving the donations were not in affected areas. CZ said that a tiered system where users closer to the epicenter get more is used.

“We believe the earthquake has a long-term economic impact on the country as a whole. Helping our users can’t hurt.”

It was also asked why Binance doesn’t donate through traditional charity organizations. CZ said that the firm does, but traditional charities have their own issues, and there are traceability problems. 

Libya Also Receives BNB Donations 

Binance also donated $500,000 worth of BNB to support those impacted by the devastating floods in Libya. Changpeng Zhao concluded:

“With crypto, I can tell you we helped about 70,000 people in Morocco and another 12,000 people in Libya. We believe in direct giving.”

On September 18, Binance published a blog post on “how crypto can transform charitable giving.”

Furthermore, Binance donated $7 million directly to the UN and various humanitarian organizations in its Ukraine Emergency Relief effort.

The post Binance CEO Defends Donations Following Crypto Charity Criticism  appeared first on BeInCrypto.