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29 arrested after thousands swept up in cryptocurrency investment scam​

Story by Ahmed Shawkat • Yesterday 2:02 PM

Cairo — Egyptians who invested in a cryptocurrency mining app were hit last week with the daunting realization that the incredible profits they thought they were making all boiled down to fiction. The platform, called Hoggpool, was launched in August.

In a promotional video, a man introduced the company with a claim that it was founded in Colorado in

2019 and was investing in cutting-edge industries, from "life sciences technology" to "space tech and blockchain." He called it "one of the leading energy providers worldwide" and said it offered "cryptocurrency mining at all levels."



Worldwide crypto & NFT rug pulls and scams tracker​

In its March attestation, Circle had revealed that part of its $9.88 billion in cash reserves was held at SVB, although it did not disclose the total amount. Following the collapse of SVB, withdrawals from USDC mounted, with the crypto intelligence platform Nansen showing over $1 billion in redemptions from the stablecoin since SVB’s shutdown. USDC has a market cap just north of $40 billion.

As USDC lost its $1 peg across different crypto exchanges amid withdrawals, Circle sought to instill confidence, with the company tweeting at 6:50 pm ET that it would continue to operate normally, sharing that SVB was one of the six banking partners it uses for the 25% of its reserves that it keeps in cash, although still not disclosing the amount held at SVB.

Amid the worst banking crisis since 2008, four Republicans in the U.S. Senate, led by Senator Bill Hagerty (R-TN), have written a letter to the heads of several federal banking regulatory agencies asking them to explain the coordinated effort to crack down on crypto-related banking providers in recent months.

The letter was addressed to Federal Reserve Chair Jerome Powell, Federal Deposit Insurance Corporation (FDIC) Chair Marty Gruenberg, and Office of the Comptroller of the Currency (OCC) Chair Michael Hsu, seeking further insights into recent statements made by the banking regulators that have called for heightened supervision of crypto-related activities.

“These releases have caused banks to reevaluate their decision to provide banking services to the crypto sector, resulting in crypto firms’ bank accounts being unexpectedly closed,” the Senators wrote. “This coordinated behavior seems disturbingly reminiscent of Operation Choke Point… an Obama Administration initiative where federal regulators applied pressure on financial institutions to cut off financial services to certain licensed, legally operating industries simply because certain regulators and policymakers disfavored those industries.”

The result of an investigation into Operation Choke Point found that businesses were illegally targeted by government officials, and the FDIC was forced to take steps to clarify that banks are allowed to provide services to legal businesses and provide enhanced training to its examiners.

“Unfortunately, nearly four years after the enhanced training, banking regulators seem to be reverting to old practices,” the letter said. “Even if the actions towards the crypto economy emanate from different regulatory concerns – it appears that the desired outcome from the banking regulators is similar to that of Operation Choke Point – the de-banking of the crypto industry in America.”

Regarding post #135 above (bold emphasis is mine):
On Friday, Signature Bank customers spooked by the sudden collapse of Silicon Valley Bank withdrew more than $10 billion in deposits, a board member told CNBC.

That run on deposits quickly led to the third-largest bank failure in U.S. history. Regulators announced late Sunday that Signature was being taken over to protect its depositors and the stability of the U.S. financial system.

The sudden move shocked executives of Signature Bank, a New York-based institution with deep ties to the real estate and legal industries, said board member and former congressman Barney Frank. Signature had 40 branches, assets of $110.36 billion and deposits of $88.59 billion at the end of 2022, according to a regulatory filing.
According to Frank, Signature executives explored "all avenues" to shore up its situation, including finding more capital and gauging interest from potential acquirers. The deposit exodus had slowed by Sunday, he said, and executives believed they had stabilized the situation.

Instead, Signature's top managers have been summarily removed and the bank was shuttered Sunday. Regulators are now conducting a sales process for the bank, while guaranteeing that customers will have access to deposits and service will continue uninterrupted.
For his part, Barney, who helped draft the landmark Dodd-Frank Act after the 2008 financial crisis, said there was "no real objective reason" that Signature had to be seized.

"I think part of what happened was that regulators wanted to send a very strong anti-crypto message," Frank said. "We became the poster boy because there was no insolvency based on the fundamentals."

The reaction to last week's sudden wave of banking collapses led to a surge of fear across the market, which pushed crypto investors to exit positions en masse in an attempt to avoid a third major contagion event in less than a year.
As markets plunged into fear, traders used the opportunity to open short positions with the expectation that matters would continue to deteriorate over the weekend and into Monday as the banking contagion spread and investors exited the market.

Unfortunately for short sellers, the U.S. Federal Reserve stepped in and announced that it would be covering the deposits at both SIVB and Signature Bank, which led to a resurgence in crypto prices.

As a result of the turnaround, data provided by Coinglass shows that more than $311 million worth of short positions were liquidated across all crypto markets on Saturday and Sunday.

The liquidations continued Monday, with the latest Coinglass data indicating that a total of 89,121 traders have had their positions liquidated in the past 24 hours, with the amount liquidated totaling $367.28 million.

From the link:

According to the FBI's recently released annual internet crime report, $10.6 billion was lost due to online scams and frauds in 2022. This is up 46 percent from the $6.9 billion in losses in 2021. Furthermore, even though losses are way up, the number of complaints from scam victims made to the FBI's Internet Crime Complaint Center (IC3) were actually down from the previous year.

On Tuesday, Tom Emmer, Majority Whip of the U.S. House of Representatives, sent a letter to Federal Deposit Insurance Corporation (FDIC) chair Martin Gruenberg, calling on the FDIC head to answer the question as to whether the agency has specifically instructed banks not to provide services to crypto firms.

“Recent reports indicate that Federal financial regulators have effectively weaponized their authorities over the last several months to purge legal digital asset entities and opportunities from the United States,” Emmer wrote.

The representative cited the recent comments from former House Financial Services Committee chair Barney Frank, co-author of the Dodd-Frank Act, who said during an interview on Monday that the targeted nature of these regulatory efforts is meant to send the message that crypto is toxic and should be avoided.

“If this is the case, these actions to weaponize recent instability in the banking sector, catalyzed by catastrophic government spending and unprecedented interest rate hikes, are deeply inappropriate and could lead to broader financial instability,” Emmer wrote.

Emmer’s letter mentioned the joint statement released by the Fed, FDIC and the Office of the Comptroller of the Currency in January that discouraged banks from holding crypto or serving crypto clients, the Feds public statement issued in February that “seemingly turned this perspective into a final” without a public comment period and the Biden Administration’s “Roadmap to Mitigate Cryptocurrenices’s Risks” as further evidence of a coordinated effort to malign the industry.

“In under a week, regulatory statement-driven market fear drove mass withdrawals at the few remaining banks that provide legal crypto firms access to financial services,” Emmer said. “The Administration’s demonstrated effort to choke off digital assets from the United States financial system is a lazy and destructive regulatory strategy that is stagnating innovation and subjecting American users of digital assets to less sophisticated regulatory jurisdictions.”

Emmer added that while Congress is focused on working across the aisle to develop nonpartisan legislative solutions for the crypto community, “Reports indicate that this Administration may be driven by a political agenda that has already harmed everyday Americans.”

The Congressman has called on the FDIC to officially answer whether it has instructed banks under its supervision to not provide crypto firms banking services, and if so, to explain the analysis for this instruction and “the goal of the instruction if not to discourage banks from servicing digital asset clients.”

Emmer also wants the FDIC to indicate whether it has explicitly or implicitly communicated with any banks that “their supervision will be more onerous in any way if they take on new (or maintain existing) digital asset clients.”
Emmer is calling on Gruenberg and the FDIC to answer these questions no later than 5:00 p.m. on March 24.

Context for Rep. Emmer's letter mentioned in my last post:
Signature Bank is on the market after being shuttered by state regulators on Sunday, but any potential buyer reportedly has to agree to a major caveat: no crypto.

Reuters first reported the development on Wednesday evening, citing sources familiar with the matter.

The New York-based bank’s weekend closure came two days after the collapse of another bank, the California-based Silicon Valley Bank (SVB), and less than a week after the closure of another California-based bank, Silvergate Bank. All three of the now-defunct banks were known as being crypto-friendly financial institutions.

Signature Bank, whose crypto clients accounted for a quarter of its deposits, was reportedly under investigation by the Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) for potentially lax monitoring that may have enabled money laundering.


Microsoft is testing a built-in cryptocurrency wallet for the Edge browser​

3/17/2023, 4:14 PM

Microsoft appears to be testing a built-in cryptocurrency wallet for Edge, according to screenshots pulled from a beta build of the browser. The feature, which the screenshots say is strictly for internal testing, was unearthed by Twitter user @thebookisclosed, who has a history of digging up present-but-disabled features in everything from new Windows 11 builds to ancient Windows Vista betas.


I wouldn't trust it. Browsers seem to be easily compromised by malware.
not a bad month for BitCoin

up about 35%

how high will BC go by Dec 2023 is anyone’s guess eh

Bold emphasis is mine:
WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) entered into a purchase and assumption agreement for substantially all deposits and certain loan portfolios of Signature Bridge Bank, National Association, by Flagstar Bank, National Association, Hicksville, New York, a wholly owned subsidiary of New York Community Bancorp, Inc., Westbury, New York.

The 40 former branches of Signature Bank will operate under New York Community Bancorp's Flagstar Bank, N.A., on Monday, March 20, 2023. The branches will open during their normal business hours. Customers of Signature Bridge Bank, N.A., should continue to use their current branch until they receive notice from the assuming institution that full-service banking is available at branches of Flagstar Bank, N.A.

Depositors of Signature Bridge Bank, N.A., other than depositors related to the digital banking business, will automatically become depositors of the assuming institution. All deposits assumed by Flagstar Bank, N.A., will continue to be insured by the FDIC up to the insurance limit. Flagstar Bank's bid did not include approximately $4 billion of deposits related to the former Signature Bank's digital banking business. The FDIC will provide these deposits directly to customers whose accounts are associated with the digital banking business. Questions may be directed to (866) 744-5463.

FDIC has split off and debanked Signature's crypto clients. Operation Choke Point is in full effect.
Last edited:
Operation Choke Point making it's way to the UK:
U.K. banks should be given a “whitelist” of registered crypto firms to avoid the sector being cut off from the financial system, lobby group CryptoUK has said in letters sent to regulators Tuesday.

Concerns over legitimate crypto companies getting debanked have spread to the U.K., where major lenders say they discourage access to riskier financial products for their customers’ own good.

anyone care to guess on how the Fed decision today will affect Bitcoin , up or down?
anyone care to guess on how the Fed decision today will affect Bitcoin , up or down?
I'm guessing sideways as American crypto industry is largely unbanked currently. I'm guessing most crypto trading right now is happening outside of USA borders and therefore less likely to be reactive on Fed interest rate news. But I could definitely be very wrong on this.
I'm guessing sideways as American crypto industry is largely unbanked currently. I'm guessing most crypto trading right now is happening outside of USA borders and therefore less likely to be reactive on Fed interest rate news. But I could definitely be very wrong on this.

if this mornings movement , oh gawd that sounds awful , is any indication , up up and away

is it to early to say To the moon! ?

or ,

the train is leaving the station?

Operation Choke Point 2.0 continues:

i do not completely understand staking

but i did opt in for it the other day as Coinbase gave all their customers the option…

based upon my history of returns , i opted in lol
any chance of a Bitcoin ticker at the Top of the Page with the gold and silver?
I would need to find one that has similar dimensions to the existing charts. We do have finviz charts for BTC and ETH at the side or bottom of the page depending upon whether you are browsing with a computer or phone.

Nasdaq Inc., the firm behind the Nasdaq stock market, has revealed that it plans to launch a custody service for digital assets by the end of the second quarter, according to a Bloomberg report.

This development comes amid a crackdown on ties between the banking industry and the crypto sector but serves as a sign of hope for many crypto proponents who see it as a move by larger firms to step in and fill the void left by smaller crypto-supporting banks that have experienced difficulties.

Ira Auerbach, senior vice president and head of Nasdaq Digital Assets, has said that the global exchange group is working to get all the necessary technical infrastructure and regulatory approvals in place so that it can launch its services in the near future.

Nasdaq has applied with the New York Department of Financial Services for a limited-purpose trust company charter, which would oversee the new business that was originally announced in September.

This marks Nasdaq’s first major foray into the world of cryptocurrencies. The lack of large, trusted custody solutions had been a significant barrier to adoption for institutional investors and larger firms.

The entry of major financial industry players like Nasdaq will help solve this issue, but many critics say the U.S. government also needs to develop a comprehensive regulatory framework so that institutions can know what they are getting into and avoid running afoul of financial laws.

Safekeeping Bitcoin and Ether would be the first step to building a broad suite of services for the group’s digital assets division, eventually, including execution for financial institutions, Auerbach said.

This one is a bit different.

From the link:

An alleged crypto “prodigy” from Canada who bilked clients out of millions of dollars was reportedly kidnapped and then tortured late last year.

According to various reports, 24-year-old self-described “crypto king” Aiden Pleterski collected AT LEAST $40/$41.5 million from clients that he was then supposed to invest into cryptocurrency and the foreign exchange market.

But instead of investing the money, he spent at least 38 percent — nearly $16 million — on living the high life, as seen below via his Instagram:


"The entire banking system in Africa is completely and utterly broken, even amongst the mobile money providers, the telcos," said Youssef from Paxful, a peer-to-peer crypto marketplace where users can directly buy and sell tokens with one another.

"Two thousand payment networks and only 2% of them talk to each other. That number continues to grow. It's not getting better, it's actually getting worse," continued Youssef.

Companies like Western Union and MoneyGram offer an expansive physical network of storefronts around the world designed to move money for those who are unbanked. That cash network was extraordinarily difficult and expensive to build, which is why there aren't a lot of direct competitors. It is also why those cash transfers often incur substantial fees.

Bitcoin could eliminate all these intermediaries, allowing citizens to send digital payments directly to one another, without relying on credit and without incurring multiple settlement fees along the way.

"We're going to move to a model where we can make payments without IOUs, or credit, or promises, or fiat," said Alex Gladstein, chief strategy officer for the Human Rights Foundation, an organization that works with activists from authoritarian regimes around the world. "It's literally like sending a piece of gold or a $20 bill instantly somewhere else."

Binance, the world's largest cryptocurrency exchange, and its CEO Changpeng Zhao (CZ) have been sued by the U.S. Commodity Futures Trading Commission (CFTC) for allegedly breaking trading and derivatives rules, according to a report from Bloomberg.

The lawsuit was filed on Monday in a federal court in Chicago, with the CFTC accusing Binance of neglecting its obligations by not properly registering with the regulator.

Crypto markets are tanking on the news. I'm not sure how much practical effect it's going to have though as Binance had long ago separated the main Binance company/platform from a us based subsidiary. Most of their business is located outside the borders of the USA.
regulating crypto in general and Bitcoin specifically will end up like the regulation of cannabis during the War On Drugs

what do we call this one , War On Cryptos or Crypto Madness?


From the .PDF:
Cooper & Kirk

Operation Choke Point 2.0: The Federal Bank Regulators Come For Crypto​

Executive Summary

Recent stories in the financial press have uncovered a coordinated campaign by prudential bank regulators to drive crypto businesses out of the financial system. Bank regulators have published informal guidance documents that single out cryptocurrency and cryptocurrency customers as a risk to the banking system. Businesses in the cryptocurrency marketplace are losing their bank accounts, or their access to the ACH network, suddenly, and with no explanation from their bankers. The owners and employees of cryptocurrency firms are even having their personal accounts closed without explanation. And over the past two weeks, federal regulators have shut down a solvent bank that was known to be serving the crypto industry and, although it is required to resolve banks through the “least cost resolution” to the Deposit Insurance Fund, the FDIC chose to shutter rather than sell the part of the bank that serves digital asset customers, costing the Fund billions of dollars.

This pattern of events is not random, and we have seen it before. This is not the first time that federal bank regulators, working with their State-level counterparts, have abused their supervisory authority to label businesses unworthy of having a bank account and worked in secret to purge disfavored lines of commerce from the financial system. Beginning in 2012, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve System carried out a coordinated campaign to weaponize the banks against industries that had fallen out of favor with the administration—including gun stores, pawn shops, tobacco stores, payday lenders, and a host of other brick and mortar businesses. That campaign was called Operation Choke Point.

Our firm successfully challenged Operation Choke Point, and it was brought to a halt. The current bout of regulatory overreach against the crypto industry is illegal for much the same as reason as its predecessor. Specifically:

• Operation Choke Point 2.0 deprives business of their constitutional rights to due process in violation of the Fifth Amendment. It is well settled that when a federal agency attaches a derogatory label to an individual or business, and this stigmatizing label causes the business to lose a bank account or broadly precludes them from the pursuit of their chosen trade, the agency has violated the Due Process Clause of the Fifth Amendment, unless if first afforded the individual or business a right to be heard. This is precisely what the federal bank regulators responsible for Operation Choke Point 2.0 have done and continue to do by labeling crypto businesses a threat to the financial system, a source of fraud and misinformation, and a risk to bank liquidity.

• Operation Choke Point 2.0 violates both the non-delegation doctrine and the anticommandeering doctrine, depriving Americans of key structural constitutional protections against the arbitrary exercise of governmental power.

• By leveraging their authority over the banks to acquire the power to pick and choose the customers whom the banks may serve, the bank regulators have exceeded their statutory authority. The bank regulators are charged with supervising the safety and soundness of the banks; their effort to anoint themselves the gatekeepers of the financial system and the ultimate arbiters of American innovation and American economic life cannot be permitted to stand.

• The federal bank regulators are also refusing to perform their non-discretionary duties when doing so will benefit the cryptocurrency industry. State banks that are statutorily entitled to access the federal reserve system are being denied their rights solely because they serve the crypto industry. The federal bank regulators are not free to pick and choose which statutory obligations they duties they wish to perform.

• The federal bank regulators are evading the notice and comment rulemaking requirements of the administrative procedure act by imposing binding requirements on the banking industry through informal guidance documents. This is undemocratic, since it deprives the public of the right to comment on proposed rules, and it also runs contrary to the principle of judicial review, since courts lack the power to review “informal” agency actions.

• Finally, the federal bank regulators are acting in an arbitrary and capricious fashion by failing to adequately explain their decisions, by failing to engage in reasoned decisionmaking, and by failing to treat like cases alike. It is difficult to imagine a more arbitrary and capricious agency action than simultaneously placing a solvent bank into receivership solely because it provided financial services to the crypto industry, while permitting insolvent institutions not tied to the crypto industry to continue operating.

We therefore urge Congress to perform its oversight role and hold these agencies to account. In section IV of this paper, we propose a series of questions that need to be answered— and a series steps that Congress should take in an effort to obtain those answers.

First, Congress should require the bank regulators to produce their communications with supervised financial institutions and state regulatory agencies regarding the denial or regulation of access to the financial system by crypto businesses and banks that serve the crypto industry.

Second, Congress should require the federal bank regulatory agencies to explain the basis for their conclusion that the safety and soundness of the financial system require the insulation of the banks from blockchain technology, from customers who operate in the crypto space, and from state-chartered depository institutions that are currently serving those customers.

Third, Congress should make clear to the federal bank regulators, and all federal agencies, that the notice and comment rulemaking requirements of the Administrative Procedure Act are not optional. The requirements imposed by the APA are not obstacles to be evaded by the use of informal guidance documents.

Fourth, Congress should investigate the role of federal regulators in the decision by the New York Department of Financial Supervision’s decision to shutter Signature Bank. Congress should also determine the FDIC’s role in excluding bidders who wished to acquire Signature’s digital asset businesses from the bidding process.

Fifth, Congress should investigate whether bank regulators are acting to squelch private sector innovation in order to clear the field of competition for the benefit of existing federally regulated banks or for a federal cryptocurrency alternative. The persistent unwillingness of the nation’s bank regulators to follow the law and obey the Constitution calls out for Congressional action. Cracks are starting to form in the American financial system as its regulators increasingly abuse their power to achieve aims outside their authority and beyond their competence.
Zero-knowledge proofs use cryptography to prove the validity of information without revealing the information itself. Using a zk-proof to validate the Bitcoin blockchain means nodes can sync almost instantly instead of taking hours (and sometimes days) to download the chain’s current 500GB of data.

ZeroSync has already produced a working prototype that allows users to validate the state (who owns what right now) and transaction history of the Bitcoin blockchain without downloading the entire chain or trusting a third party.

The prototype can verify Bitcoin consensus rules but not transaction signatures. It’s also a bit clunky and still needs to be optimized for speed and security, so it’s not ready for prime time just yet, but the important thing is – it works.

Zero knowledge proofs could mean improvements to transaction speeds and cost for transactions with Bitcoin.
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