Autor Cointelegraph By Brian Quarmby

Crypto ATMs emerging as popular method for crypto scam payments: FBI

The Federal Bureau of Investigation (FBI) Miami Field Office has warned that crypto ATMs are emerging as a popular method that scammers use to receive funds from defrauded victims. The information was revealed as part of an Oct. 3 public warning about “pig butchering scams” where scammers pose as long-lost friends or potential romantic partners to swipe money from victims.  The scammers “fatten up” their victims by showing a supposedly genuine interest in them to win their trust, and then gradually introduce investment discussions into the relationship.In the public service announcement in cooperation with the Internet Crime Complaint Center (IC3), the FBI warned that victims of these pig butchering crypto scams generally have no chance of getting their funds back. However, the FBI noted that they’ve noticed scammers have been increasingly directing their victims to transfer funds via crypto ATM machines, alongside more well-known methods such as wire transfers and prepaid cards, noting:“Many victims report being directed to make wire transfers to overseas accounts or purchase large amounts of prepaid cards. The use of cryptocurrency and cryptocurrency ATMs is also an emerging method of payment. Individual losses related to these schemes ranged from tens of thousands to millions of dollars.”The FBI noted that in “pig butchering” scams, victims are “coached through an investment process” and “encouraged to make continuous deposits by the fraudsters.” “When the victims attempt to cash out their investments, they are told they need to pay income taxes or additional fees, causing them to lose additional funds.” Crypto ATMs have long been utilized by scammers who pose as public officials, law enforcement agents, or employees of local utility companies, and coerce victims to send them payments under the guise of paying off bills or unpaid taxes to avoid further penalties. There are nearly 33,500 cryptocurrency ATMs in the United States as per data from Coin ATM Radar, with the U.S. accounting for 87.4% of the global crypto ATM distribution.The U.S. Federal Trade Commission sent out a warning regarding crypto ATM scams in January, while also noting that the scammers do sometimes pose as potential romantic partners. The FBI urged people to “verify the validity of any investment opportunity” introduced by these types of people, keep an eye out for domain names impersonating legitimate exchanges, misspelled URLs, and to not download any apps if the legitimacy cannot be verified. Related: Beeple’s Discord URL ‘hijacked,’ directing users to wallet drainerLaw enforcement agencies across the U.S. have warned about pig butchering and romance scams on several occasions, and while it could be assumed that the victims are not well-educated regarding technology or investing, this isn’t always the case. In June, it was reported that tech-savvy professionals from Silicon Valley were being duped by a wave of pig butchering scams in San Fransico, with multiple people losing more than $1 million apiece to this type of financial fraud.

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Insolvency not in 'Nexo's reality,' says co-founder during AMA

Bankruptcy or insolvency is not in “Nexo’s reality” according to the crypto lending platform’s co-founder and managing partner, Kalin Metodiev. In an Ask Me Anything (AMA) video posted via YouTube on Oct. 4, founders and managing partners Metodiev and Antoni Trenchev addressed community questions and recent FUD-related rumors that Nexo could soon face insolvency issues. Responding to a question about the insolvency/bankruptcy rumors and whether Nexo will be the “next Celsius and Voyager,” Metodiev explicitly stated that: “Insolvency, bankruptcy are nowhere in Nexo’s reality, and we believe, we hope, we aspire, [and] we[‘re] work[ing] very hard to deliver a very strong and sustainable future for our users.” “Finding resemblances with these two names [Celsius and Voyager] or other names in the space, is very far from reality and I think this is very easily verifiable,” he added. Adding to Metodiev’s comments, Trenchev noted: “that I didn’t want to mention [any] names but I’m going to mention a few names; you know, no exposure to the Terra (LUNA) debacle, absolutely no lending to Three Arrows Capital.” “In the two names that were mentioned in the question, in the bankruptcy filings you can see the creditors list, Nexo is not on that,” he said. The rumors appear to have originated in part, from a claim in a Sept. 26 cease and desist order from the Kentucky Department of Financial Institutions that Nexo’s “liabilities would exceed its assets” if its Nexo (NEXO) token holdings were excluded from the equation. This is just one of several cease and desist orders filed against Nexo. Market analysts such as Dirty Bubble Media author Mike Burgersburg previously alleged that Nexo is facing insolvency risks because it holds the vast majority of NEXO’s token supply on its platform, similar to Celsius which owned more than 50% of its native token, CEL. In line with such thinking, a sharp decline in the price of NEXO could significantly impact the company, he alleged. However, a Nexo spokesperson promptly denied the allegations to Cointelegraph, stating that the data they provided to Kentucky regulators was for one of the Nexo Group’s entities, and that “NEXO tokens represent less than 10% of the company’s total assets.”In the AMA, the Nexo founders also addressed a question relating to the firm’s recent attestation, which indicated that Nexo’s $3.7 billion worth of customer liabilities are 100% collateralized but doesn’t provide any further details than that. Related: Nexo ‘surprised’ by state regulators’ actions, says co-founderAsked whether the firm plans to “include a breakdown of assets within the attestation rather than just a total dollar figure?” Metodiev outlined that Nexo will provide greater transparency, but didn’t outline what that will entail as he suggested the company also needs to balance the need for privacy to stave off competition. “The more transparency we can provide that will be helpful to our community, to our users, to decision makers for investment purposes. We would continue increasing this transparency, but making sure that this transparency, first of all, doesn’t diminish our competitive edge.”“I think you know that while we commit and will continue increasing the transparency, it needs to be done with the proper degree of duty and responsibility to make sure that this transparency is constructive and beneficial for decision making purposes,” he added.

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Binance opens two new offices in Brazil as team doubles since March

Changpeng Zhao (CZ) led crypto exchange Binance has opened up two offices in Brazil as the firm looks to tap the country’s emerging crypto market, with reportedly more than 34.5 million crypto users there.According to an Oct. 3 announcement, Binance has now opened offices in São Paulo and Rio de Janeiro, with more than 150 employees to be spread across the firm’s operations in Brazil. “The exchange operates in full compliance with the Brazilian regulatory landscape and believes that regulation is the only way for the digital asset industry to grow and reach the general public, allowing more people to enjoy the benefits that cryptocurrencies and blockchain offer,” the announcement reads. #Binance opens two offices in Brazil in a move to expand in the country and to grow crypto adoption in Latin America.The offices were announced by @cz_binance, who visited the country in March this year. Since then, we have more than doubled the team dedicated to Brazil.— Binance (@binance) October 3, 2022Binance stated that it has been working on a Brazilian expansion since CZ initially visited in March, with the firm doubling the size of its team focused on the country since then. In September, Binance also hosted a series of crypto and blockchain workshops for law enforcement agencies in Brazil and Argentina to help them identify and fight crypto crime, suggesting it may hold a decent relationship with Latin American regulators. The company has notably upped its focus on working with regulators after a spate of regulatory reviews and investigations from several government agencies in 2021. Brazil looks to be a market prime for further growth, with blockchain research firm Chainalysis recently ranking the country seventh on the 2022 Global Crypto Adoption Index report. The firm ranked Brazil just two places behind the U.S. and five places ahead of Latin American counterpart Argentina. Binance expansionIn what has been a productive week for the company, Binance also announced on Monday that it had signed a memorandum of understanding (MoU) with the Financial Monitoring Agency of the Republic of Kazakhstan as a part of its global law enforcement training program.Under the MoU, Binance will work with the local government to help identify and block digital assets obtained illegally and used to launder criminal proceeds and finance terrorism.Related: Binance Global Law Enforcement Training Program is official after year of activitiesOn Sept. 29 Binance also announced that it had registered with New Zealand’s Ministry of Business, Innovation and Employment and opened local offices in the country. “New Zealand is an exciting market with a strong history of fintech innovation,” CZ said. Last 48 hrs or so:CZ (me) in some mountain in Africa, preaching crypto#Binance opens 2 offices in Brazil #Binance signs MOU with Kazakhstan #Binance burns $1.8m worth of LUNC from Binance’s income.— CZ Binance (@cz_binance) October 3, 2022

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CoinShares' Butterfill suggests 'continued hesitancy' among investors

Minor inflows for digital asset investment products over the last few weeks suggest a “continued hesitancy” towards crypto amongst institutional investors amid a slowdown of the U.S. economy. In the latest edition of CoinShares’ weekly “Digital Asset Fund Flows” report, Coinshares head of research James Butterfill highlighted stand-offish institutional sentiment towards crypto investment products, which saw “minor inflows” for the third week in a row. “The flows remain low implying continued hesitancy amongst investors, this is highlighted in investment product trading volumes which were US$886m for the week, the lowest since October 2020.”Between Sept. 26 and Sept. 30, investment products offering exposure to Bitcoin (BTC) saw the most inflows at just $7.7 million, with Ether (ETH) investment products close behind with $5.6 million worth of inflows. Short BTC products represented the only other notable inflows of $2.1 million. These inflows were offset by more than $3.5 million worth of outflows for investment products offering exposure to altcoins such as Polygon (MATIC), Avalanche and Cardano (ADA), while multi-asset and Solana funds also shed $700,000 and $400,000 during that week. Commenting on the current state of the crypto market, and the institutional outlook of late, Markus Thielen, head of research and strategy at Singapore-based crypto financial services platform Matrixport noted that:“The market is currently in a wait-and-see environment whereas a potential positive shift after the US Mid-Term elections could have significant regulatory changes.”“Last night’s US economic data, notably the ISM index, showed that growth has materially slowed down in the US economy and there is now the possibility that the Fed will become less hawkish. The USD rally appears to have lost one of its key drivers and this could signal a pause in rate hikes. This could be very bullish for digital assets into year-end,” he added.Looking at the month-to-date (MTD) flows as of Sept. 30, ETH products have been the most offloaded by institutional investors despite the Merge going through on Sept. 15, with $65.1 million worth of outflows. “Looking back, the Merge was not good for sentiment with outflows totaling US$65m in September. Increased regulatory scrutiny and a strong US Dollar being the likely culprits as the shift to Proof of Stake was executed successfully,” said Butterfill. In contrast, Short BTC funds and BTC investment products saw minor inflows of $15.2 million and $3.2 million MTD. Crypto ETF outflows slowing While there has been limited action of late for crypto investment products tracked by CoinShares, Bloomberg Intelligence has observed a notable trend in crypto exchange-traded funds (ETFs). Related: A crumbling stock market could create profitable opportunities for Bitcoin tradersAccording to Bloomberg Intelligence data, institutional investors offloaded $17.6 million from crypto ETFs during Q3 2022, providing a stark contrast to the “record $683.4 million withdrawn from such funds” in Q2 2022. “The outflows mainly took place in the past two months. In July, investors poured upwards of $200 million into crypto ETFs,” Bloomberg noted in a Sept. 30 article, adding that the decreased outflows was likely due to “narrow fluctuations” in crypto prices during Q3.

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Sam Bankman-Fried sheds light on how FTX would approach a Celsius bid

FTX founder and CEO Sam Bankman-Fried have shared details on how his firm would approach a buy-up of Celsius’ tassets. The comments come in light of FTX US snapping up bankrupt crypto lender Voyager Digital’s assets for $1.3 billion via auction last week and a recent report that FTX was considering a bid for Celsius’ assets as well. Responding to a tweet from BnkToTheFuture founder Simon Dixon alleging FTX was “raising finance at a $32Billion valuation” in order to buy Celsius’ assets at “cents on the dollar,” Bankman-Fried clarified that his firm’s bid is determined at “fair market price, no discounts.”You up for discussing a plan to make up the difference with equity? I have some ideas that will make the community very happy with the deal? DM me. This has really impacted many people lives.— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) October 2, 2022Bankman-Fried his company’s goal “isn’t to make money buying assets at cents on the dollar,” and is instead focused on making customers whole again, stating: “[The] goal isn’t to make money buying assets at cents on the dollar, it’s to pay $1 on the $1 and get the $1 back to customers. If we were to get involved in Celsius, it would be the same.”Reports that FTX had secured the winning bid for the assets of Voyager Digital first emerged on Sept. 27, with the deal reportedly valued at $1.4 billion. Little information was given around the fate of Voyager customers andtheir crypto holdings, with the platform only mentioning that the FTX US platform “will enable customers to trade and store cryptocurrency after the conclusion of the company’s chapter 11 cases.“However, Celsius’ depositors appear to be in a worse state of limbo at this stage, though there is a general feeling that the firm could look to auction off its billions of dollars worth of assets, although other plans could be floated, such as a customer repayment in Celsius (CEL) tokens. Related: Celsius founder reportedly withdrew $10M before bankruptcy filing: FTMuch of this will weigh on how Celsius bankruptcy proceedings play out moving forward, with an independent examination in the works to determine the scope of the beleaguered firm’s financials. Multiple regulators have submitted objections to Celsius selling off its stablecoin holdings, while the Department of Justice has also objected to the firm’s motion to open up withdrawals to certain customers until the examiner report is complete.

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