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In a recent crypto crime webinar, Eric Jardine from Chainalysis revealed how scammers adapt their strategies to changes in market situations. While overall crypto scam revenue dropped in 2022, Jardine noted that not all scams behaved similarly. By sub-classing scams into types, he found that scammers were adapting to market conditions and turning to other strategies, such as giveaway and romantic scams, to prey on people’s emotions.

Jardine’s data revealed that as investment scams become less effective, romance and giveaway scams become more prevalent, indicating that scammers are not simply using the same script over and over again. They can adapt and change depending on market conditions. Additionally, Jardine highlighted that a multilevel marketing scam called hyperverse took a massive chunk out of the $5.9 billion lost to scams in 2022, racking up around $1.3 billion, which accounts for roughly 22% of scam revenue in that year.

The rise of romance and giveaway scams during the crypto winter is not surprising as scammers often prey on people’s emotions during difficult times. These scams are designed to target people who are feeling vulnerable and in need of support. Giveaway scams often promise free tokens or coins in exchange for personal information, while romance scams involve scammers posing as potential partners to gain access to victims’ personal information or money.

It’s important to note that these scams are not exclusive to the crypto world and have been used by scammers for years. However, the crypto world provides scammers with a new platform to reach a wider audience and target people who are investing in digital currencies. As the market conditions change, scammers will continue to adapt and find new ways to deceive people.

Investors and consumers must remain vigilant and educate themselves on the latest scams and tactics used by scammers. Platforms and exchanges can also play a significant role in detecting and preventing scams by implementing robust security measures and educating their users. By working together, we can help to mitigate the risks posed by scammers and protect the integrity of the crypto industry.

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Scammers adapt to survive during crypto winter Republished from Source https://blockchain.news/news/scammers-adapt-to-survive-during-crypto-winter via https://blockchain.news/RSS/

Australia’s Independent Reserve Eyes Expansion to Hong Kong Amidst Proposed Licensing Regime for Crypto Exchanges

Independent Reserve, a cryptocurrency exchange based in Australia, is looking into expanding its business in Hong Kong following the city’s recent proposal of a licensing regime for crypto exchanges. The move is in line with Hong Kong’s ambitions to become Asia’s next cryptocurrency hub.

The Hong Kong Securities and Futures Commission (SFC) announced on February 20, 2023, that it will release a proposed licensing regime for cryptocurrency exchanges set to take effect in June of the same year. Under the new regime, Hong Kong-based crypto companies must comply with various measures relating to the safe custody of assets, such as Anti-Money Laundering (AML), Know Your Customer (KYC), counter-financing of terrorism (CFT) countermeasures, and conflict of interest disclosures and audits.

Adrian Przelozny, CEO of Independent Reserve, expressed his interest in expanding the company’s business in Hong Kong, saying that “right now, it is looking very interesting” and that “the recent announcement by the regulators in Hong Kong does make Hong Kong look like a friendly jurisdiction.” He added that his team will visit Hong Kong next week to meet with banks, regulators, lawyers, and compliance experts to determine if the location suits the company.

If Independent Reserve decides to expand to Hong Kong, it will join other cryptocurrency exchanges such as Huobi and OKX. Hong Kong’s proximity to mainland China, where cryptocurrency is heavily regulated, may make it an attractive destination for crypto exchanges looking to tap into the Chinese market.

Przelozny also commented on the region’s political relationship with China, stating that he believes China is testing how a more relaxed cryptocurrency regime looks in Hong Kong. Despite concerns over the potential impact of China’s regulations on Hong Kong’s cryptocurrency industry, the city’s government has remained committed to developing the industry and positioning itself as a hub for digital assets.

Independent Reserve’s potential expansion to Hong Kong is a significant move for the company and a promising sign for Hong Kong’s burgeoning cryptocurrency industry. As the city continues to establish itself as a hub for digital assets, more and more companies are likely to follow suit.

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Independent Reserve Considers Expansion to Hong Kong Republished from Source https://blockchain.news/news/independent-reserve-considers-expansion-to-hong-kong via https://blockchain.news/RSS/

In a recent development, Coinbase, the popular cryptocurrency exchange, has been issued a Wells notice by the United States Securities and Exchange Commission (SEC), which typically precedes an enforcement action. The news prompted Coinbase CEO, Brian Armstrong, to criticize the SEC for its lack of clarity around crypto regulation. In a series of tweets, Armstrong compared the SEC to “soccer refs” in a game of pickleball, arguing that they could not agree on the rules of the “new game” of crypto regulation.

Armstrong’s criticism comes as the crypto industry faces ongoing debates around who should be the primary body regulating crypto, with the SEC being just one of many potential regulators. There has been concern among crypto companies that regulators lack a clear understanding of the industry and that their regulatory efforts may stifle innovation and drive activity offshore.

The reference to a “call they made back in April 2021” refers to the SEC’s approval of Coinbase’s application to go public. Armstrong argued that the company’s filings “clearly explained” its asset listing process and “included 57 references to staking.” However, the recent Wells notice suggests that the SEC has reversed its earlier position and is now seeking to take enforcement action against Coinbase.

Coinbase’s chief legal officer, Paul Grewal, also criticized the SEC’s lack of clarity around crypto regulation, claiming that the agency had provided “no clear rule book” and that “efforts to engage with the SEC are met with silence or enforcement actions.” Both Armstrong and Grewal appear to welcome the chance to use the “legal process” to provide the crypto industry with regulatory clarity and to defend Coinbase against the SEC’s enforcement action.

The news of the Wells notice has been widely condemned by the crypto community, with many agreeing that the SEC has reversed its earlier position regarding Coinbase. The community also seems to be throwing their support behind Coinbase, believing that the company will be fighting on behalf of the entire U.S. crypto industry as an unclear regulatory environment drives activity offshore.

In conclusion, the recent Wells notice issued to Coinbase by the SEC has sparked a debate around the lack of clarity and understanding among regulators when it comes to crypto regulation. Coinbase’s CEO and chief legal officer have criticized the SEC’s lack of clarity and seem to be welcoming the chance to use the legal process to provide the industry with regulatory clarity. The crypto community has widely condemned the notice, with many agreeing that the SEC has reversed its earlier position regarding Coinbase.

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Coinbase CEO Compares SEC to Soccer Refs in Criticism of Lack of Clarity Around Crypto Regulation Republished from Source https://blockchain.news/news/coinbase-ceo-compares-sec-to-soccer-refs-in-criticism-of-lack-of-clarity-around-crypto-regulation via https://blockchain.news/RSS/

The US Commodity Futures Trading Commission (CFTC) held their first Technology Advisory Committee meeting in Washington D.C. on March 22. As part of the scheduled meeting, members from the crypto space gave presentations to the CFTC, providing a DeFi crash course on key issues impacting the space. CFTC commissioner Christy Goldsmith Romero opened the meeting with remarks on the importance of understanding how DeFi works, as policy decisions related to DeFi are currently being made by regulators and lawmakers.

The panel began with an explainer on DeFi and blockchain technology, outlining the claimed benefits of blockchains, namely transparency, immutability, and privacy. Ari Redbord, head of legal and government affairs at blockchain intelligence firm TRM Labs, provided an overview of decentralization, highlighting the total value that entered DeFi in the last two years. Redbord concluded that DeFi is absolutely here to stay, and regulators should lead it in the right direction.

Carole House, executive in residence of venture firm Terranet Ventures, and Jill Gunter, chief strategy officer of blockchain infrastructure company Espresso Systems, then provided an overview of the current solutions for digital identity and noncustodial wallets, using Ethereum Name Service and MetaMask wallet as examples.

Michael Shaulov, founder of Fireblocks, and Dan Guido, founder of Trail of Bits, then presented the exploits and vulnerabilities that have taken place in the market. Throughout 2022, the top 10 exploits in crypto alone saw over $2 billion lost, with DeFi on the receiving end of 113 exploits out of the 167 carried out across the year.

The DeFi portion of the meeting ended with members unanimously voting for creating a Digital Assets and Blockchain Technology Subcommittee, which will focus on the “why of DeFi,” what problems it solves, use cases, vulnerabilities, and proposed legal and policy frameworks.

DeFi, short for decentralized finance, is a financial system built on public blockchains that seeks to disrupt traditional financial systems by enabling peer-to-peer transactions without the need for intermediaries. DeFi platforms provide access to financial services such as lending, borrowing, trading, and investing, with a focus on openness, transparency, and decentralization. The DeFi ecosystem has grown significantly in recent years, with DeFi’s total value locked reaching around $49.1 billion, according to DefiLlama, rising from around $15 billion at the beginning of January 2021.

Blockchain technology, the underlying technology powering DeFi, is a distributed ledger technology that enables decentralized transactions, immutability, and transparency. By removing intermediaries and enabling direct peer-to-peer transactions, blockchain technology provides a more efficient, secure, and transparent way of conducting transactions.

Digital identity is another critical aspect of DeFi, as it enables individuals to participate in the DeFi ecosystem without having to disclose their personal information. Digital identity solutions such as Ethereum Name Service and MetaMask wallet provide users with noncustodial wallets, enabling them to hold their own private keys and manage their own funds.

Exploits and vulnerabilities are an ongoing concern in the DeFi ecosystem, as the space remains largely unregulated. Hacks and exploits can result in significant financial losses for users, highlighting the need for more robust security measures and protocols.

In conclusion, the CFTC’s Technology Advisory Committee meeting highlighted the importance of understanding DeFi and its key issues, including blockchain technology, decentralization, digital identity, and exploits and vulnerabilities. The meeting also emphasized the need for regulators to lead DeFi in the right direction and proposed legal and policy frameworks to address current issues and vulnerabilities.

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CFTC Receives DeFi Crash Course Republished from Source https://blockchain.news/news/cftc-receives-defi-crash-course via https://blockchain.news/RSS/

The recent collapse of Silicon Valley Bank (SVB) has prompted an internal investigation by the Federal Reserve to look into the failure of the bank and the Fed’s regulation of it. Federal Reserve Chairman Jerome Powell has admitted to being blindsided by the sudden collapse of SVB despite being under their supervision. This has raised concerns about the effectiveness of the Federal Reserve’s oversight of banks in the United States.

SVB’s collapse has been linked to the Federal Reserve’s successive interest rate hikes aimed at taming inflation, which eroded SVB’s long-term bonds purchased at near-zero rates. When SVB announced that it suffered a $1.8 billion after-tax loss and was looking to raise $2.25 billion, the market panicked, leading to a $160 billion wipeout in its market cap in 24 hours. Despite SVB CEO Greg Becker urging investors to “stay calm” and not to “panic”, depositors began to request withdrawals from SVB en masse, causing a bank run.

On March 10, the United States Federal Deposit Insurance Commission stepped in, taking possession of SVB to help depositors get access to their money. Emergency measures were put in place by the government soon after to guarantee all deposits at SVB. This has raised concerns about the stability of the banking system and the need for stronger regulatory measures to prevent such occurrences in the future.

Powell has confirmed that Vice Chairman Michael Barr will be testifying next week as part of the internal investigation. Powell’s interest is in identifying what went wrong and how it can be prevented in the future. However, some politicians, including U.S. Senator Elizabeth Warren, have expressed their frustration with Powell and his regulatory approach toward large banks in the U.S. over the last five years, which they believe has been weak.

Warren believes that Powell’s nine consecutive interest rate hikes to 5% pose a risk to the economy, potentially pushing it into a recession. She has also criticized Powell’s approach to banking regulation, stating that it is a factor to blame for the recent banking crisis. The collapse of SVB has highlighted the need for stronger regulatory measures to ensure the stability of the banking system and prevent future occurrences.

In conclusion, the collapse of Silicon Valley Bank has raised concerns about the effectiveness of the Federal Reserve’s oversight of banks in the United States. The internal investigation into the failure of the bank and the Fed’s regulation of it will hopefully identify what went wrong and how to prevent it in the future. The incident has also highlighted the need for stronger regulatory measures to ensure the stability of the banking system and prevent future occurrences.

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Federal Reserve Admits Blindsided Oversight of SVB Collapse Republished from Source https://blockchain.news/news/federal-reserve-admits-blindsided-oversight-of-svb-collapse via https://blockchain.news/RSS/