News Updates February 01, 2023
1. Tesla records $140M Bitcoin net loss in 2022
The electric vehicle maker earned $64 million in profits from Bitcoin trading, which was offset by a $204-million impairment.
According to a filing with the United States Securities and Exchange Commission on Jan. 31, electric vehicle manufacturer Tesla disclosed that it had recorded a $204-million gross impairment loss during 2022 on its Bitcoin
BTC $22,987 holdings. Simultaneously, Tesla recorded a gain of $64 million from converting BTC into fiat currency at various points during the year, resulting in a net loss of $140 million from its cryptocurrency trading activities.
The filing further explained the impact of volatile crypto prices on Tesla’s bottom line:
“Digital assets are considered indefinite-lived intangible assets under applicable accounting rules. Accordingly, any decrease in their fair values below our carrying values for such assets at any time subsequent to their acquisition will require us to recognize impairment charges, whereas we may make no upward revisions for any market price increases until a sale. For any digital assets held now or in the future, these charges may negatively impact our profitability in the periods in which such impairments occur even if the overall market values of these assets increase.”
In the first quarter of 2021, Tesla invested $1.5 billion in Bitcoin. At the time, its founder, Elon Musk, announced that the electric vehicle manufacturer would start accepting BTC payments from U.S.-based consumers.
The policy was retracted just months later, as Musk cited the need for “confirmation of reasonable (~50%) clean energy usage by [Bitcoin] miners with positive future trend” before the company would accept the means of payment again. Tesla reportedly sold 75% of its BTC holdings in the second quarter of 2022.
2. Ethereum Zhejiang testnet goes live; Is ETH on the verge of a huge rally?
Following the Merge upgrade that transitioned the Ethereum (ETH) blockchain to the proof-of-stake (PoS) protocol, the network’s development activity is entering a new stage.
Indeed, the Ethereum staking testnet dubbed Zhejiang is set to go live today, February 1, allowing users to trial the staked ETH withdrawal, the platform’s developer Barnabas Busa said in a tweet on January 31.
Notably, once the testnet goes live, users will not be able to try out the withdrawal features implemented in the Shanghai and Capella upgrades that will be triggered six days later.
“The Zhejiang public testnet is going live tomorrow (February 1 15:00 UTC, 2023). Shanghai+Capella will be triggered 6 days later (at epoch 1350). You will be able to deposit validators, practice BLS change and exit without risk,” Busa said.
At the same time, the developers are planning to use the testnet’s outcome to monitor the mass use of such features and resolve any potential issues arising.
Ethereum community anticipating the Shanghai hard fork
It is worth noting that the Ethereum developers are projecting to unveil the Shanghai hard fork by March. In this line, the Zhejiang testnet will showcase all Ethereum Improvement Protocols (EIPs) slated for the Shanghai upgrade.
Once the Shanghai hard fork goes live, it will mark the first major post-Merge upgrade on the network. Notably, the event is highly followed in cryptocurrency over the potential to influence ETH’s value.
Furthermore, the tetsnet is likely to be monitored closely, considering many organizations and crypto exchanges anticipate managing billions of dollars from the ETH staking activity. For instance, banking giant JPMorgan (NYSE: JPM) recently suggested that crypto exchange Coinbase might be among the biggest beneficiaries of the staking.
Analysts at the lender projected that Coinbase could earn about $500 million in annual revenue once the Shanghai upgrade goes live.
Ethereum price analysis
In the meantime, the price of Ethereum is consolidating below $1,600 after recording steady gains in 2023 to surge by about 30%. By press time, the asset was valued at 1,571, gaining by about 0.1% in the last 24 hours.
The asset currently controls a market cap of about $192.24 billion.
3. Cardano (ADA) Transactions Will Be Temporarily Suspended by Binance, Here's When and Why?
On the evening of Feb. 14, major cryptocurrency exchange Binance will temporarily suspend deposits and withdrawals on the Cardano network, it was reported. The reason for this decision is the upcoming Valentine's Day update of the Cardano network, called SECP.
The update, which stands for standards for efficient cryptography (SECP), is due to take place at block height 8,403,208. The point of the update is to add new built-in features to the language and smart contract programming platform for Cardano, Plutus. In particular, these features include updates to cryptographic primitives and support for ECDSA and Schnorr format signatures used on many networks outside Cardano. With this update, the plan is to optimize Plutus to make it easier for smart contracts developers to create interoperable cross-chain applications.
Looking back at the experience of preparing for Cardano's previous major upgrade, Vasil hard fork, let's look at node compliance and exchange readiness. Thus, according to the website of Cardano's parent company, Input Output Global, more than 75% of staking pool operators are running the appropriate versions of the nodes.
4. S Korean Crackdown Has Not Dampened Youth’s Thirst for Bitcoin-powered Drug Dealing.
Crypto-powered drug trading is still booming in South Korea – and a recent police crackdown on online Bitcoin (BTC) and altcoin drug deals has done little to dampen the demand for web-traded narcotics.
Per Kuki News, Twitter and Telegram are still rife with posts from South Korean drug dealers seeking clients – and would-be buyers looking for dealers. Many dealers wrote that they could offer “nationwide delivery.”
Cryptonews.com also discovered a number of recent Korean-language Twitter posts making use of narcotics-related slang. Many of these directed users to Kakao chat rooms or Telegram channels. And many of these chat rooms and channels appeared to be populated with hundreds of younger South Korean users. These users variously wrote – anonymously – about their drug use and drug buying experiences.
Kuki News reported that in one of the Telegram channels it had visited, a user posted a photograph of several bags of narcotics and their own gloved hands. The accompanying caption read: “Time to go and make a few deliveries.”
South Korean Crackdown on Bitcoin-powered Drugs Deals – How Effective Has it Been?
The media outlet noted that while South Korean law enforcers have the power to pressure domestic chat apps such as Kakao to hand over details of users they suspect to be involved in drug trafficking, this is not the case for “overseas” platforms such as Telegram.
Drug buyers and dealers appear to be aware of this, and seem to have continued to use the platforms with impunity – in spite of a recent crackdown.
While police struggle to shut down social media activity like that described above, they have been more successful in tracking down drug payments made using BTC.
Officers have invested heavily in blockchain analytics software and other tools. They say these have helped them track down a number of dealers and drug users. The police have also been given training that officials say will help local forces find and prosecute narcotics traders who make use of crypto.
Typically, dealers in South Korea use “dead drop” methods to distribute narcotics. Here, customers pay upfront in BTC and dealers later leave bags of drugs hidden in public places for buyers to pick up once the dealers have left the area. But police have used this tactic against them, too – coupling blockchain transaction data with CCTV footage to secure convictions.
Police say their crackdown has yielded results. The National Police Agency’s recently formed drugs task force arrested 1,495 drug offenders last year, at least 533 of whom used BTC or altcoins to buy or sell narcotics.
5. £2 Million, 100 Victims; Oxford Student Runs Extensive Crypto Scam
Dutch national Wybo Wiersma was arrested for stealing from over 100 people worldwide in a crypto fraud of £2 million. He is sentenced to jail for four and half years.
Wybo Wiersma, a research student from Gorredijk (Netherlands), was studying at the Internet Institute of St. Cross College, when he hatched up the plan to create a phony website that would eventually rob people of their life savings and businesses.
As per report, The Oxford University graduate set up a fake website, iotaseed.io, under a false name and convinced people that it would generate a ‘seed’ for those investing in an online currency called lota.
The users believed these ‘seeds’ or passwords would simply be a random string of 81 characters, including capital letters and the number 9. However, it was a predetermined code by Wiersma to steal the funds and transfer it to his own account.
Regarding the complexity of the case, Prosecutor Julian Christopher KC states:
Anyone who knows the seed can access, and so can transfer and trade the Iota crypto.
The 40-year-old converted the stolen funds into Bitcoin and Monero using Bitfinex, the crypto exchange site. Upon finding suspicious activity on the accounts, Bitfinex quickly froze them.
When Bitfinex requested identification, Wiersma presented fake documents. Bitfinex continued the status quo which was when Wiersma moved to Binance, another crypto exchange. He had five accounts there, before they froze them as well.
The case was particularly hard to track, as stated by Detective Inspector Rob Bryant in a report:
This was a particularly complex investigation involving more than 100 victims worldwide.
In 2018, reports had been filed with the German police, who traced the crime to the UK and passed the case to the South East Regional Organised Crime Unit, who managed to trace the crime to Wiersma. British police seized a number of devices. Wiersma pled guilty in Oxford Crown Court presided by Judge Michael Gledhill KC.
