News Updates January 16, 2023
1. Bitcoin fails to convince that bottom is in with $12K ‘still likely’
BTC price optimism is limited at best after multi-month highs, with Bitcoin traders fearing a reversion to macro lows.
Bitcoin be circling its highest levels in months, but few are convinced that the bull market is back.
Ahead of a key weekly close, BTC/USD remains near $21,000, data from Cointelegraph Markets Pro and TradingView shows, with analysts nervous about the good times ending all too soon.
Bitcoin to see new “depression” before bull run resumes
Bitcoin is dividing opinion after its week of brisk gains. Warnings over a potential pullback abound, while others are already commiserating bears ahead of time.
“Now bears will be caught in the vicious cycle of praying for pullbacks to go lower, not realizing the tides have shifted for a time and we’re going higher,” Chris Burniske, former head of crypto at ARK Invest, summarized.
Even more optimistic takes such as that of Burniske, however, do not foresee the upside continuing uninterrupted in a definitive end to Bitcoin’s latest bear market.
Uploading the classic “Wall Street Cheat Sheet” graphic over the weekend, popular commentator Lemon predicted that BTC/USD would still fall further.
“Sorry, I have to be true to my thoughts, I think we are here,” he told Twitter followers, pointing to Bitcoin sentiment — and price — heading toward macro lows.
2. Binance CEO Laughs at Crypto Skeptic Jim Cramer as BTC Crosses $20k
Changpeng Zhao, the CEO of Binance, the largest crypto exchange, pokes fun at the staunch crypto skeptic Jim Cramer, who often asked crypto investors to sell their Bitcoin holdings at a loss.
The Binance CEO derided Cramer yesterday on Twitter after the crypto skeptic’s pessimistic projection about crypto turned out false. Zhao sarcastically told him, ‘please continue’ spreading messages of fear, uncertainty, and doubt (FUD) about the crypto market.
"This is just too accurate now. Cramer posted this on Jan 9, the day before Bitcoin went from 16k to 20k".
Please continue to FUD crypto!
Jim Cramer@jimcramer
"Good chance AGAIN to get out of crypto and scale out of Chinese stocks as neither can be trusted"
On the day Bitcoin broke the $17k price point this month, Cramer told crypto enthusiasts it was an excellent opportunity to exit the market. In his words:
[It is a] good chance again to get out of crypto and scale out of Chinese stocks as neither can be trusted.
Due to the FTX fiasco, Bitcoin (BTC) fell from over $21,000 to a two-year low of $15,883 last November. The coin never recovered its $21k price until yesterday, when it traded at $21,075, the first time in nearly nine weeks, according to data from the market tracking platform, CoinMarketCap.
While the crypto market suffered significant price depreciation, Jim Cramer continuously told crypto investors that it was never too late to exit an awful position. In one of his shows on CNBC last month, he said:
You can’t just beat yourself up and say, ‘hey, it’s too late to sell.’ The truth is, it’s never too late to sell an awful position, and that’s what you have if you own these so-called digital assets.
However, in an exciting turn of events, the global crypto market cap is on track to cross the $1 trillion valuation again after it closed 2022 below $790 billion.
3. FTX Hacker Receives Tips On How To Launder $400 Million Loot.
Coinbase Director Conor Grogan spotted Ether transfers to the “FTX Accounts Drainer” with private notes on how to move the assets undetected.
The hacker was advised to leverage less popular and more privacy-based crypto mixer protocols.
The U.S. Justice Department launched an investigation into the matter after nearly $400 million was stolen from Sam Bankman-Fried’s bankrupt crypto exchange.
In a bizarre turn of events, the FTX hacker who drained roughly $400 million in digital assets from Sam Bankman-Fried’s crypto exchange received tips on how to launder the stolen funds using mixing protocols.
Coinbase Director Conor Grogan noticed Ether (ETH) transfers to the wallet labeled “FTX Account Drainer” on the block explorer Etherscan. The transaction carried a message directing the hacker on how to launder their massive lot.
In the text, the sender suggested using more privacy-focused crypto mixing services rather than popular protocols like ChipMixer. Crypto mixers allow users to obfuscate their transactions when moving assets around and are a common tool used by crypto criminals attempting to launder their illicit wealth.
The sender also offered to share more information with the hacker on suitable crypto mixers, providing their telegram username should the hacker wish to contact them. Director Grogan likened the attempt to a sales cold call.
Conor@jconorgrogan
"People are sending the FTX exploiter trace amounts of ETH along with a message on how to better launder the funds. Presumably they intend to get in touch with the exploiter and negotiate a consulting fee. They also registered a special ENS"
Web3 equivalent to the cold call
Notably, the sender also registered a peculiar Ethereum Name Service (ENS) address with more instructions for the hacker to consider – *swap-gray-crypto-for-white-stablecoins-check-input-data-utf8.eth”
FTX Hack Investigated By Justice Department
The U.S. Department of Justice launched investigations into a $400 million hack on FTX, as previously reported in later December 2022. Led by the DoJ’s National Cryptocurrency Enforcement Team, authorities said the criminal investigation would probe the identity of the hacker or hackers who drained Bitcoin (BTC), Ether (ETH), and other digital assets from SBF’s crypto exchange shortly after the company declared bankruptcy on November 12.
Disgraced Founder Sam Bankman-Fried denied ties to the hack on several occasions, claiming he did not “stash away millions and billions in crypto” in his latest “Pre-mortem” analysis on Substack.
Apart from eight criminal charges slammed against Bankman-Fried by U.S. authorities, federal prosecutors are also investigating SBF’s ‘inner circle’ including ex-CTO Gary Wang and former Alameda Research CEO Caroline Ellison. Both Ellison and Wang already flipped on Bankman-Fried, pleading guilty to fraud in exchange for plea deals.
Prosecutors also met with FTX’s former chief engineer Nishad Singh to weigh his information regarding the crypto exchange’s multi-billion crash in 2022.
4. Chartered Market Technician: BTC Price Signals Crypto Winter End.
Over the weekend, the price of the most popular crypto, Bitcoin (BTC), crossed the $21k price point for the first time since last November. Adrian Zduńczyk, a Chartered Market technician, said on live TV with Forbes that BTC’s recent price action could signal the end of the crypto winter.
Zduńczyk added that it was now an opportunity for crypto enthusiasts to enter the market.
Forbes Middle East
@Forbes_MENA_
"As bitcoin rallies, Chartered Market Technician @crypto_birb tells @RamiaFarrage this may signal the end of the crypto winter and an opportunity to enter the market"
Bitcoin currently trades at $20,826.51, with an impressive 20% increase over the last seven days. BTC’s closest rival, Ethereum (ETH), also took a significant price leap, crossing $1,550 for the first time in over nine weeks.
Similarly, the global crypto market experienced an in-flow of over $51 billion over the last 24 hours. Consequently, the market value of all cryptocurrencies is now above $978 billion, up by over $200 billion from December 31, according to data from the market tracking platform, CoinMarketCap.
Interestingly, some crypto chart analysts predicted the recent bull rally. Rekt Capital previously asserted that the end of the crypto bear market was near, given that it was 400 days since BTC touched $69,000. According to the analyst, it is the usual historical trend for BTC to find its absolute bottom price approximately 365 days after the peak of the previous bull market.
5. CFPB Probe Highlights Problems with US Cross-Border Payments, Can Crypto Help?
Digital payments still make 1% of remittances. Can crypto fill the obvious gap?
The Consumer Financial Protection Bureau is investigating if new remittance rules should be implemented to safeguard against less-than-transparent fees for remittance payments. Money transfer companies handle billions in such payments, making them a clear target for blockchain payment networks offering faster and cheaper transfers. But is it likely for crypto to capture a more significant share of cross-border payments?
Why Is CFPB Important?
Created as a response to the financial crisis of 2007-2008, the Consumer Financial Protection Bureau (CFPB) acts as an independent agency of the US government, born from the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. CFPB’s primary mission is to protect consumers from deceptive and abusive practices regarding financial products and services.
Since its creation, CFPB has delivered transparency rules on loans, credit cards, and financial accounts to give consumers accurate information on their money flows and obligations. Some of CFPB’s key contributions in the consumer-protection arena are the following:
The Ability-to-Repay Rule: mortgage lenders must consider borrowers’ loan repayment ability before issuing a mortgage.
The TILA-RESPA Integrated Disclosure (TRID) Rule: lenders must provide detailed disclosures on mortgage loans.
The Prepaid Card Rule: Providers must disclose fees and other terms before consumers obtain the card.
The Payday Lending Rule: lenders must verify the borrower’s ability to repay the loan, including by limiting the number of loan rollovers.
The Fair Credit Reporting Act (FCRA) Rule: credit reporting agencies must investigate and correct errors on credit reports, including enabling consumers to freeze their credit reports.
Like the Securities and Exchange Commission (SEC), CFPB can conduct investigations and issue new rules and regulations.
What Is the Most Recent Problem Detected by CFPB?
Last Friday, CFPB director Rohit Chopra released a letter to Sen. Elizabeth Warren (D-MA), serving on the Committee on Banking, Housing, and Urban Affairs and the Committee on Finance. Chopra informed the senator that the agency is probing money-transfer companies on deceptive fee structure practices:
“We continue to see a lack of transparency about fees, exchange rates, and taxes, which comprise the true cost to consumers of sending money abroad,”
In practice, this translates to consumers being misled about how much they pay for money transfers. For instance, money transfer companies may charge a fee as a percentage of the transfer, while others charge fixed fees. This makes it difficult for the end-user to gauge which service is more cost-efficient.
Likewise, money transfer companies may have zero upfront fees but at a higher exchange rate. This creates an illusion of the best money transfer deal that is more expensive. CFPB Director Rohit Chopra thinks that even existing remittance rules are not adhered to, such as exchange rate disclosure, which is why the agency is considering new money transfer restrictions.
