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Five headlines made headlines in crypto last week. Former FTX executive Ryan Salame pleaded guilty to two charges related to his conduct at FTX as former Celsius CEO Alex Mashinsky’s home and assets were ordered frozen. Meanwhile, the Lazarus group got away with stealing $41 million dollars, while another crypto investor lost $24 million to a phishing attack. Also, why is Texas paying bitcoin miners not to mine bitcoin? And is a regulation-friendly alternative to Tornado Cash possible?
Let’s take a closer look at each story in this recap.
$65 million was lost in two major incidents
The FBI has done it attributed the recent theft of $41 million from crypto sports betting platform Stake.com to the North Korean-affiliated Lazarus Group. The September 4 incident was one of several major robberies committed by the group, totaling the thefts committed by the group. more than $200 million This year. Blockchain Association Director Ron Hammond highlighted the growing concern surrounding such attacks, which was the trigger legislation such as the Crypto Asset National Security Improvement and Enforcement Act (CANSEE). These actions are designed to combat money laundering and other crypto-facilitated crimes.
Meanwhile, in a separate incident, an Ethereum user lost $24 million, appears to have been caused by a phishing attack, making it one of the most significant individual crypto phishing events on record. The security company believes this person is the perpetrator cheated to authorize malicious transactions via phishing links.
Another former FTX executive pleaded guilty
Former FTX executive Ryan Salame pleaded guilty in New York federal court on charges of conspiracy to make unlawful political contributions and conspiracy to operate an unlicensed money transfer business. Released on $1 million bail, Salame admitted to making $10 million in political contributions under the guise of a loan. He also agreed to surrender $1.6 billion in assets and forfeit two properties and a Porsche.
Salame is the fourth person to plead guilty in connection with the collapse of crypto exchange FTX. He, along with his co-conspirators, made more than 300 illegal political donations, often using straw donations, according to prosecutors. Previously, Salame was investigated for potential campaign finance violations related to his girlfriend Michelle Bond in the 2022 congressional elections. Although he pleaded guilty, Salame did not intend to testify at the upcoming criminal trial of former FTX CEO Sam Bankman-Fried.
Mashinsky’s assets were ordered frozen
Former Celsius CEO Alex Mashinsky’s assets and property have been damaged frozen following an order from the US District Court for the Southern District of New York, under Judge Jed Rakoff. The order includes funds at Goldman Sachs, Merrill Lynch, and SoFi Bank, as well as a residence in Austin, Texas.
Mashinsky’s arrest in July stemmed from allegations that he cheated customers and misrepresented Celsius’ profitability. The company, which declared bankruptcy last year, is under scrutiny from multiple regulators, including the Securities and Exchange Commission (SEC), which accused Celsius and Mashinsky of fundraising fraud and misleading investors about the company’s financial health. The Commodity Futures Trading Commission and the Federal Trade Commission have also filed lawsuits against Mashinsky. Despite these accusations, Mashinsky, who posted a $40 million bond in July, maintains his innocence.
Paying mining companies not to mine
In August, two leading Bitcoin mining companies, Riot Platforms and Iris Energy, received large energy credits from the state of Texas for voluntarily reducing their electricity consumption during peak demand periods. Riot Platforms, which operates North America’s largest bitcoin mining facility in Rockdale, Texas, limits its power usage by more than 95% and compensated with a record monthly amount of $31.7 million. In contrast, Iris Energy awarded A $2.3 million credit for voluntary restrictions on its Childress site.
Riot’s strategy to limit electricity usage resulted in huge revenue in August of $40.2 million, after factoring in credits and revenue from mining 333 bitcoins worth $8.5 million. By comparison, Iris Energy mined 410 bitcoins, generating $11.4 million in revenue, and, factoring in credits, spent $4.3 million on electricity, generating $7.1 million in profits.
While Riot has in the past focused only on large scale, Iris Energy emphasizes sustainable mining, with 97% of its energy sources coming from renewable energy and 3% from renewable energy credits. The actions of these two companies are a response to a Texas state program that provides incentives to bitcoin miners lower energy consumption during periods of network congestion.
The founder of Tornado Cash claims to be innocent because Vitalik offered his idea
Tornado Cash co-founder Roman Storm pleaded not guilty in New York District Court on charges of conspiracy to commit money laundering. If found guilty, he faces a maximum prison sentence of 20 years. Tornado Cash has been described by prosecutors as a cryptocurrency mixer that laundered more than $1 billion in illicit funds. Decision to penalty The Cash Tornado by the US Treasury Department has been criticized by crypto enthusiasts, and the Blockchain Association labeled it as “unprecedented and unlawful.”
In related news, Ethereum co-founder Vitalik Buterin, along with Ameen Soleimani, Jacob Illum, Matthias Nadler, and Fabian Schar, recently co-authored a research paper introduce privacy protocol called Privacy Pools. This protocol, which may serve as an alternative to Tornado Cash, is designed to ensure transactional privacy on the blockchain while complying with regulations. It uses zero-knowledge proofs to confirm the legality of users’ funds without revealing their complete transaction history. The goal is to strike a balance between privacy and regulatory requirements.
© 2023 Block. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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