Pseudonymous on-chain researcher ZachXBT has successfully recovered the majority of funds from the sale of a rare DeGods nonfungible token (NFT), which was pilfered in May 2023 following the original NFT holder’s unfortunate entanglement in a phishing scam.
In a post dated Feb. 24, ZachXBT relayed the outcome of his nine-month inquiry into the theft of the DeGods #3251 NFT to his 505,200 followers, revealing that most of the funds have now been restored to the victim.
The NFT was auctioned off in May 2023 for 99 Ether, valued at approximately £127,000 at the time.
“I am pleased to share that I was able to help recover a decent chunk of the stolen funds which have now been returned back to the victim,” said ZachXBT.
ZachXBT received a distress call from the victim in May 2023, shortly after the victim discovered his wallet had been emptied, seeking ZachXBT’s aid in reclaiming his digital artwork.
The duration of ZachXBT’s investigations can vary depending on the intricacies involved.
He frequently employs simple diagrams to elucidate to his followers how the phishing scams unfolded and to trace the movement of funds, even across cryptocurrency mixers.
“While recovery can sometimes be a protracted process, it is indeed achievable, and I am always eager to share such success stories,” he remarked.
ZachXBT also disclosed his intention to wrap up his pro bono blockchain investigation work soon.
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He made this revelation following feedback from users expressing frustration because he did not assist them in recuperating their pilfered cryptocurrency, notwithstanding his reiterated assurance that this service is provided free of charge.
“This is precisely why I am ceasing all public interest work shortly,” he asserted.
ZachXBT has been a prominent figure in various sectors of the cryptocurrency industry, aiding in unraveling crypto-related crimes for both individuals and national authorities.
In October 2022, Cointelegraph reported that French authorities were leveraging ZachXBT’s research to apprehend the perpetrators behind the theft of NFTs valued at $2.5 million.
Christophe Durand, deputy chief of France’s national cyber unit, informed the AFP that they became aware of the incident following ZachXBT’s investigation on social media.
In an endeavour to address the escalating cybercrimes, the Supreme People’s Procuratorate (SPP) of China – the nation’s highest prosecutorial authority – is directing its focus towards wrongdoers utilising blockchain and metaverse projects for unlawful activities.
The SPP expresses concern over the surge in online fraud, cyber violence, and infringement of personal information.
The SPP disclosed a notable increase in cybercrimes perpetrated on blockchains and within the metaverse.
Criminal elements are increasingly resorting to cryptocurrencies for the purpose of money laundering, rendering the tracking of their illegal gains a challenging task.
Ge Xiaoyan, the deputy prosecutor-general of the SPP, affirmed that charges related to cybercrime-associated telecom fraud have escalated by 64 percent year-on-year.
Concurrently, traditional offences such as gambling, theft, pyramid schemes, and counterfeiting have also expanded their reach into cyberspace.
Xiaoyan underscored that charges linked to internet theft have soared by almost 23%, whereas charges concerning online counterfeiting and the sale of substandard goods have surged by nearly 86%.
Procuratorates brought charges against 280,000 individuals in cybercrime cases between January and November, marking a 36% year-on-year increase and constituting 19% of all criminal offences, as disclosed by Xiaoyan.
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Zhang Xiaojin, the director of the Fourth Procuratorate of the SPP, cautioned both citizens and participants in digital assets regarding investment scams prevalent in the local crypto economy.
Xiaojin highlighted the emergence of novel cybercrimes involving the metaverse, blockchain, and binary options platforms, indicating that digital currencies have become focal points for such activities, thereby stressing the necessity for heightened vigilance.
China’s endeavours to clamp down on digital asset-related crimes diverge from those of Hong Kong.
The special administrative region of China has adopted a distinct approach by implementing regulations conducive to cryptocurrencies to standardise its digital asset ecosystem and safeguard investors without stifling innovation.
The People’s Bank of China (PBoC) addressed concerns pertaining to cryptocurrency regulation and decentralised finance in its most recent financial stability report.
The Chinese central bank dedicated a separate section to cryptocurrency assets in the report, emphasising the imperative for the industry to be regulated through collaborative efforts among different countries.
In 2021, the PBoC officially announced measures aimed at curbing crypto adoption in mainland China, advocating for enhanced inter-departmental coordination in combating crypto-related activities in the country.
Despite the ban encompassing virtually all crypto transactions and cryptocurrency mining, mainland China has persisted as a significant crypto-mining hub.
Financial services firm the Carlson Group has reportedly incorporated four out of the 10 Bitcoin exchange-traded funds (ETFs) into its offerings for registered investment advisers (RIAs).
The £30 billion investment firm prioritised asset growth, trading volume, and low fees in selecting funds from BlackRock, Fidelity, Bitwise, and Franklin Templeton, as reported by Bloomberg on 23rd February.
A total of £6.6 billion has been invested in BlackRock’s iShares Bitcoin Trust (IBIT) since its debut on 11th January, while Fidelity has seen £4.8 billion inflows to its Wise Origin Bitcoin Fund (FBTC).
The Bitwise Bitcoin ETF (BITB) and Franklin Bitcoin ETF (EZBC) have the lowest fees among issuers, charging 0.2% and 0.19% respectively.
“Bitwise and Franklin Templeton have committed to being the lowest-cost providers in the space, and have also seen large inflows and trading volumes.
READ MORE: Bitcoin Struggles Amidst Institutional Investment Slowdown
Both firms also have established in-house digital asset research teams and expertise that we feel are beneficial to the continuing growth and management of the products, as well as adviser research and education,” told Bloomberg Grant Engelbart, the company’s vice president and investment strategist.
Financial adviser platforms are crucial to introducing crypto products to new audiences, and large trading firms such as LPL Financial Holdings are examining recently approved Bitcoin ETFs.
The funds will be available to over 19,000 independent financial advisers overseeing £1.4 trillion in assets if approved. The ETFs are already available for financial advisers at Fidelity and Charles Schwab.
According to Bloomberg ETF analyst James Seyffart, due diligence from trading platforms may delay the Bitcoin fund’s adoption.
“A lot of the big institutions, these warehouses, these platforms where brokers or advisers work, they can’t just buy anything they want.
There’s like an approved list and a not approved list,” the analyst explained.
Hong Kong-based cryptocurrency exchange BitForex has ceased withdrawals for a minimum of three days without offering an explanation.
Prior to the suspension, approximately $56 million in cryptocurrency had been withdrawn from the exchange’s wallets.
According to an X post on February 23, on-chain investigator ZachXBT stated that three BitForex hot wallets experienced outflows of approximately $56.5 million in cryptocurrencies before the exchange halted transaction processing.
The exchange’s X account has not seen any updates since May 2023
BitForex users are encountering issues with their accounts, ranging from being unable to access them to finding that the dashboard displays no assets.
Numerous users have shared a pop-up screen indicating they are blocked from accessing the company’s website.
Attempts by Cointelegraph to access the BitForex website encountered the same issue. However, certain pages of the exchange’s website remain active.
For instance, an announcement dated January 31, disclosing the departure of BitForex CEO Jason Luo, was still accessible on the website at the time of writing.
READ MORE: Bitcoin Halving Threatens US Miner Profitability and Sparks Global Migration Talks
In September 2023, BitForex was among the foremost global cryptocurrency exchanges in terms of capitalization, with a daily trading volume of approximately $2.6 billion in cryptocurrency.
Currently, CoinMarketCap does not provide real-time data on BitForex.
In April 2023, Japan’s Financial Services Agency (FSA) accused BitForex of breaching the country’s fund settlement laws, alleging that the exchange conducted business in the country without proper registration.
GHowever, BitForex has not attracted significant attention from regulators or the media since then.
Last week, another Hong Kong-based exchange, Atom Asset Exchange (AAX), transferred around $55.6 million worth of Ether (ETH) from its wallets.
AAX ceased all operations on November 13, 2022, just two days after FTX filed for bankruptcy. Following its closure, AAX’s former CEO Thor Chan and board member Haoming Liang were arrested by Hong Kong police in 2022.
Nevertheless, the founder of AAX, whose identity remains undisclosed, is purportedly still evading authorities with 230 million Hong Kong dollars ($29.41 million) worth of users’ funds and private keys granting access to exchange wallets.
The United States Attorney’s Office has petitioned a federal judge to endorse additional travel constraints for former Binance CEO Changpeng “CZ” Zhao.
In a filing dated Feb. 23 in U.S. District Court for the Western District of Washington, U.S. Attorney Tessa Gorman urged Magistrate Judge Brian Tsuchida to ratify a motion outlining the terms for CZ to remain at liberty on bail.
Prosecutors requested that Zhao confine his travels to within the contiguous U.S. until his sentencing hearing on April 30 and furnish three days’ notice for any excursions to enable the government to lodge objections.
The U.S. Attorney’s Office also sought CZ’s surrender of his Canadian passport and “all other current and expired passports and travel documents” to his legal representatives.
Zhao, who also holds citizenship in the United Arab Emirates, had sought permission to journey there to visit relatives prior to his sentencing — a plea the judge dismissed.
As per the filing, “Zhao’s counsel object to this motion as written,” indicating that his legal team may persist in seeking a means for the former Binance CEO to depart the country.
In November 2023, CZ pleaded guilty to one felony count for failure to maintain an effective Anti-Money Laundering program at Binance.
READ MORE: Bitcoin Struggles Amidst Institutional Investment Slowdown
Since the indictment, he has remained at liberty on a $175 million bond.
Zhao resigned as Binance CEO as part of a $4.3 billion settlement between the crypto exchange and U.S. authorities.
On Feb. 23, Judge Richard Jones approved the $1.8 billion fine and forfeiture of $2.5 billion.
CZ, Binance, and Binance.US still face a civil case with the U.S. Securities and Exchange Commission, which filed a lawsuit in June 2023.
“This truly is a case where the ethics of the company were compromised by greed,” remarked Judge Jones during the Feb. 23 hearing.
Following CZ’s departure, Richard Teng, former Binance head of regional markets, assumed the role of CEO.
In a December 2023 interview with Cointelegraph, Teng portrayed the exchange as “completely different” compared to its operations six years prior.
Bitcoin mining firm Riot Platforms has reported a 19% increase in its Bitcoin production for 2023, mining a total of 6,626 BTC.
The surge in production contributed to a rise in annual revenue, primarily attributed to the higher average price of Bitcoin throughout 2023 compared to the bear market witnessed in 2022.
According to a report published by Riot Platforms on February 22, the average cost for the firm to mine a single Bitcoin in 2023 decreased by approximately $3,686 compared to the previous year.
“Riot’s cost to mine Bitcoin for 2023, net of power credits allocated to self-mining, averaged $7,539 per Bitcoin versus $11,225 in 2022, a decrease of 33% year-over-year,” the report highlights.
Moreover, the average value of Bitcoin in 2023 exceeded that of 2022, leading to a revenue increase for the year, totalling $280.7 million, compared to $259.2 million in the previous year.
“The increase in Bitcoin Mining revenue was driven by slightly higher values of Bitcoin mined in 2023, which averaged $28,859 per Bitcoin as compared to an average price of $28,245 per Bitcoin in 2022.”
The crypto market faced a severe downturn in 2022, marked by the collapse of several crypto firms, including major exchange FTX.
Riot’s share price witnessed a significant surge of 47.47% over the past month.
READ MORE: Bitcoin Struggles Amidst Institutional Investment Slowdown
However, it experienced a decline of approximately 10.65% over the five-day trading period last week, with its current share price standing at $14.85.
In December 2023, Cointelegraph reported Riot’s acquisition of 66,560 mining rigs from manufacturer MicroBT, marking one of the largest expansions of hash rate in the firm’s history ahead of the Bitcoin halving scheduled for April.
Other Bitcoin mining firms also reported varying production results in 2023. Core Scientific produced 19,274 Bitcoin, while CleanSpark experienced a 60% surge compared to 2022, mining over 7,300 Bitcoin during the year.
Marathon Digital mined 12,852 Bitcoin in 2023, with a notable increase of 1,853 Bitcoin in December alone, representing a 56% surge from November and a remarkable 290% increase over December 2022.
In more recent developments, Riot, alongside the Texas Blockchain Council, filed a lawsuit against the United States Department of Energy, Energy Information Administration, and the Office of Management and Budget for demanding invasive data from crypto miners.
Google and the social media platform Reddit have forged a partnership, with Reddit supplying its content to aid in training the artificial intelligence (AI) models of the search engine giant.
In an announcement, Reddit stated it would furnish Google with enhanced techniques for model training.
Under this collaboration, Google gains access to Reddit’s data application programming interface (API), delivering real-time content from Reddit’s platform.
This access enables Google to tap into Reddit’s vast content repository, facilitating the integration of Reddit content across Google’s suite of products.
In return, Reddit will utilise Vertex AI, Google’s AI-driven service tailored to improve search outcomes for businesses.
Reddit has clarified that this update does not alter the terms of its data API, maintaining restrictions on commercial access without prior approval for developers or enterprises.
This partnership follows reports from Bloomberg indicating that Reddit had secured a $60 million training deal with an undisclosed AI firm.
Reddit had previously outlined intentions to levy charges for API usage. Notably, the collaboration with Google represents Reddit’s inaugural known agreement with a prominent AI developer.
In 2023, Google revised its privacy policy to permit the use of publicly available data for AI training purposes.
This amendment followed closely after OpenAI, the developer of ChatGPT, faced a class-action lawsuit in California, alleging the unauthorized scraping of private user data from the internet.
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However, as per updates to the commercial terms of service for the Claude developer, Anthropic, the generative AI startup pledged to abstain from utilising client data for large language model (LLM) training beginning January 2024.
Despite this landmark agreement, Google and Reddit have not always seen eye to eye.
Reddit had previously threatened to block Google’s crawlers from accessing its site, citing concerns that companies might exploit its data for AI model training purposes.
Reddit commenced its initial public offering (IPO) on Feb. 22, aiming to bolster its valuation, which exceeded $10 billion in 2021.
The IPO filing, slated for March, marks the first major social media IPO since Pinterest’s in 2019.
In recent months, developers of AI models have actively pursued agreements with content providers to diversify their training data beyond extensive web scraping.
This move comes amidst claims from numerous content owners that their material was utilised without authorisation.
Potential inertia in the price of Bitcoin following the Bitcoin halving could destabilise the share prices of high-cost public miners in the United States, potentially compelling some to relocate overseas.
“We might see a mining stock bloodbath as investors realise these companies are barely making money,” says Jaran Mellerud, founder and chief mining strategist of Hashlabs Mining, alluding to the potential outcome if the Bitcoin price fails to experience a significant rise after the halving.
Mellerud is currently observing the three to four-month period post-halving to gauge the impact on miner profitability due to the reduction in block rewards.
The upcoming Bitcoin halving is anticipated to take place on April 24, according to CoinMarketCap.
It will decrease Bitcoin miner rewards from 6.25 BTC (£234,750) to 3.125 BTC (£117,375), although historical trends suggest a subsequent surge in the Bitcoin price.
During the last halving event on May 11, 2020, Bitcoin was valued at $8,750 and experienced a staggering 430% increase five months later in October, soaring from $11,500 to $61,300 by mid-March 2021.
However, if Bitcoin fails to rally significantly within that three to four-month timeframe, “a significant portion of the network might need to power down their machines, particularly those paying hosting rates of $0.07 per kWh or more,” Mellerud noted, highlighting a notable concentration of these inefficient miners in the United States.
Consequently, Mellerud anticipates a shift in some of Bitcoin’s hash rate from the U.S. to countries with lower electricity rates, particularly in Africa and Latin America.
“My company, Hashlabs, is currently witnessing substantial demand from US-based miners who wish to relocate their machines to Ethiopia, where hosting rates are 30-40% lower than in the United States.”
Concerns regarding profitability surfaced in late January when Cantor Fitzgerald reported that 11 publicly listed Bitcoin miners would not be profitable post-halving if Bitcoin’s price remained around $40,000 (the price of Bitcoin at the time).
Cantor Fitzgerald’s “all in per coin” metric encompasses the total costs a Bitcoin miner would incur in producing a single Bitcoin, encompassing electricity costs, hosting fees, and other expenses.
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Nonetheless, with Bitcoin’s price currently standing at $51,000, only four of the 13 mining firms fall below the profitability threshold.
However, head analyst at Bitcoin mining firm Blockware Solutions, Mitchell Askew, informed Cointelegraph that most U.S. public miners would maintain profitability, especially those that invested in more efficient machines during the bear market.
Askew refuted Mellerud’s claim that most inefficient miners are based in the U.S., asserting that they constitute only a small fraction of Bitcoin’s total hash rate, making any hash rate loss negligible.
Nevertheless, even in the event of unprofitability, Askew outlined several reasons preventing U.S. miners from relocating overseas.
“[Many of them] are bound by fixed hosting contracts and must continue mining regardless of profitability,” while others mine primarily to accumulate non-Know Your Customer Bitcoin and are less concerned with profitability, according to Askew.
Mellerud identified Ethiopia, Nigeria, and Kenya as the most promising African countries to attract a larger share of the hash rate in the event of a mining migration.
Mellerud particularly highlighted Ethiopia’s “massive hydropower surplus” and the influx of Chinese miners as factors contributing to its appeal, projecting the African nation to capture 5–10% of Bitcoin’s total hash rate over the next few years.
Meanwhile, Mellerud identified Argentina and Paraguay as the most promising mining destinations in South America.
Bankrupt cryptocurrency exchange FTX has received approval from Judge John Dorsey of the Delaware Bankruptcy Court to sell more than £1 billion worth of its shares in the artificial intelligence startup Anthropic.
The ruling, delivered during a hearing on February 22, allows the sale to proceed following FTX’s accommodation of some customers who had objected to the sale.
These customers contended that the Anthropic shares did not belong to FTX, alleging they were acquired with misappropriated customer funds, referencing evidence presented during the criminal trial of FTX co-founder Sam Bankman-Fried.
However, they agreed to the sale on the condition that they would later be able to claim proceeds from it for FTX users.
Andrew Dietderich, representing FTX from Sullivan & Cromwell, informed the court that they are selling the Anthropic shares “as we are selling everything and putting the money in the bank.”
He further stated that FTX intends to reimburse users using the proceeds from selling its Anthropic stake, augmenting the existing £6.4 billion it holds in reserve — a sum more than sufficient to repay those who can substantiate their entitlement to a portion of the proceeds.
Earlier this month, FTX filed a motion to sell its 7.84% stake in Anthropic.
The exchange initially invested approximately £530 million in the AI startup in April 2022, prior to its collapse and subsequent filing for Chapter 11 bankruptcy in November of the same year.
READ MORE: Hong Kong Sees Surge in Crypto License Applications as Regulator Receives 18 Bids
Following Anthropic’s subsequent funding rounds, FTX’s stake was diluted from over 13.5%.
According to The Information’s report on February 16, the latest funding round valued Anthropic at £15 billion, elevating the worth of FTX’s stake to over £1.1 billion.
Dietderich informed the court last month that FTX anticipates it could fully reimburse creditors and has abandoned plans to revive the exchange.
However, creditor repayments will be calculated based on cryptocurrency prices at the time of FTX’s bankruptcy over 15 months ago, when Bitcoin was trading at around £16,800 — it currently stands at over £51,000, reflecting a more than 200% increase.
Meanwhile, Bankman-Fried is scheduled to be sentenced on March 28 following his conviction for embezzling over £8 billion in customer funds.
The former FTX chief maintains his innocence and has expressed his intention to appeal the verdict.
Recent data from cryptocurrency data aggregator CoinGecko suggests that holding a newly airdropped crypto token for more than 14 days often means missing out on the chance to sell at its highest value.
Since 2020, interest in airdrops has surged significantly.
The most common method of obtaining free airdropped tokens is by engaging in pre-launch activities or promotional tasks within blockchain networks.
On February 1, Cointelegraph highlighted a report of a 17-year-old crypto investor who purportedly earned over $1 million from the Solana-based Jupiter (JUP) airdrop.
A recent CoinGecko report reveals that over the past four years, approximately 46% of the top 50 crypto token airdrops, including notable tokens such as Ethereum Name Service, Blur, and LooksRare, reached their peak values within a fortnight of their launch.
The report specifies that “23 out of the 50 largest airdrops (46%) witnessed peak token prices during the initial 2 weeks of their airdrop date.”
Among the airdropped tokens that peaked within this timeframe are Manta Network (MANTA), Anchor Protocol (ANC), and Heroes of Mavia (MAVIA).
While certain projects achieved peak gains within days, only one airdropped token out of the top 50 in the past four years took more than a year to reach its peak value.
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Optimism (OP) took one year and seven months to achieve its highest value.
In contrast, Sweat (SWEAT) reached its peak within two days of the airdrop, while Wen (WEN) saw peak gains in just three days.
However, significant sell-offs of airdrops shortly after listing can lead to a sharp decline in value, diminishing the token’s attractiveness.
On February 22, Cointelegraph reported a roughly 60% drop in the token of Ethereum layer-2 network Starknet (STRK), as Ethereum infrastructure firm Nethermind and airdrop participants offloaded millions of dollars’ worth of the airdropped token.
Furthermore, technical glitches during the claiming process may cause participants to perceive the network as unreliable, prompting them to consider selling the token.
In March 2023, the volume of Arbitrum (ARB) tokens moved to exchanges was 150% higher than inflows to wallets, triggering a significant sell-off.
This followed reports of the airdrop claim page crashing within an hour of the process starting due to overwhelming requests.