Hodler’s Digest, September 8 – 14 – Cointelegraph Magazine

The main news of the week

According to the FBI, Americans will lose $5.6 billion to cryptocurrency fraud by 2023.

The United States Federal Bureau of Investigation (FBI) Internet Crime Complaint Center has released its report on cryptocurrency fraud for 2023. Americans lost $5.6 billion to cryptocurrency fraud that year, up 45% from 2022. Crypto-related complaints represented 10% of the total received, but almost 50% of those lost that year, according to the FBI.

The report found that of the 69,000 crypto-related complaints the FBI received in 2023, more than 60 percent were victims, accounting for $1.6 billion in damages. 71% of crypto fraud is related to investment schemes, while 10% includes call center fraud and government impersonation fraud.

The FBI has received complaints from more than 200 countries, but the majority of complaints and losses come from the United States. Many of the losses are the result of confidence mechanisms. The FBI had one top tip for avoiding this type of scam:

“There's one thing these scammers typically don't do – they don't meet you in real life. If someone you've never met in person comes up with an investment opportunity. […] Be very careful with your advice. “

Crypto has become an issue in the US election for the first time – a survey

Cryptocurrencies like Bitcoin will play a role in the upcoming United States presidential election as a growing number of US crypto investors are concerned about the candidates' approach to controlling the industry.

A majority of crypto owners in the US plan to consider the crypto regulation stance of the US presidential candidates in November's election, according to a new report from crypto exchange Gemini, founded by the Winklevoss twins.

Gemini's latest “Global State of Crypto” report, released on September 10, featured a survey of 6,000 adults randomly representing consumer populations in the US, UK, France, Singapore and Turkey. The survey was conducted between May 23 and June 28, 2024.

According to Gemini's findings, 73% of US respondents who currently own crypto said a candidate's position on crypto would have “some influence” on their vote.

Additionally, another 37% of respondents said a presidential candidate's position on crypto would have a “significant influence” on their vote.

Caroline Ellison requested time to serve, citing cooperation with the US government.

Attorneys representing former Alameda Research CEO Caroline Ellison are recommending that she plead guilty to seven felony charges related to the collapse of cryptocurrency exchange FTX.

On Sept. 10, Ellison's legal team filed a letter with friends, co-workers and family members recommending a lighter sentence in a filing in the U.S. District Court for the Southern District of New York. At a Sept. 24 hearing, the former Alameda CEO recommended that she be sentenced to three years of supervised release, under the terms of the Probation Department's Pre-Sentence Report (PSR).

“PSR made this recommendation based on Caroline's exceptional cooperation with the government, her unblemished record and numerous testimonials to Caroline's integrity and ethics both before she began working at Alameda and since leaving Alameda,” he said.

“Caroline poses no risk of reoffending and poses no threat to public safety. Caroline thus promotes respect for the law in her early disclosure of the crimes, her disbelieving acceptance of her responsibility for them, and, above all, her extensive cooperation with the government.

Ellison's attorneys added:

“We respectfully present the goals and benefits of justice policy without downplaying the most serious crimes here. […] Don't ask to send Carolyn to jail, and ask for a non-custodial sentence accordingly.

Vitalik: At least non-‘level 1' L2s are dead to me.

Vitalik Buterin, the founder of Ethereum, has reiterated his position on layer-2 decentralization, only that he plans to recognize token solutions at the level of “level 1” decentralized standards.

In a September 12th post on X, Buterin said he takes this “seriously” and plans to officially refer to Layer-2 networks as “Level 1+” starting next year.

“There may be a short grace period for new, really exciting projects,” he added.

“It doesn't matter if I invest or if you are my friend. Level 1 or bust.

Buterin said many zero-knowledge crowdfunding groups have told him “they're on track to be No. 1 by the end of the year,” and he's “excited to see that happen.”

“The era of multi-sig glorified packages is coming to an end. The era of cryptographic trust is upon us,” he said.

Bitcoin ETFs are the next major target for North Korean hackers – cybers

North Korean hackers, including the notorious Lazarus group, may begin targeting large financial entities, including US-based Bitcoin exchange-traded funds (ETFs).

The Lazarus group is associated with some of the most notorious hackers in the cryptocurrency space, including the largest hack in decentralized finance – the $625 million Ronin Bridge hack.

Hackers may begin to shift their focus to US Bitcoin ETFs because of the potential payouts, according to Michael Perl, vice president of GTM strategy at on-chain security firm Syvers.

Pearl told Cointelegraph in an exclusive interview:

“Recently, the FBI issued a warning that North Korean hackers are trying to infiltrate and steal funds from the EFF. So, all those ETFs […] They are storing the base Bitcoin somewhere. And you can be sure that someone is thinking and thinking about how to steal it.

Winners and losers

At the end of the week, Bitcoin (BTC) at $60,436, Ether (ETH) at $2,444 and XRP at $0.57. According to CoinMarketCap, the total market cap is $2.11 trillion.

Among the largest 100 cryptocurrencies, the top three altcoin gainers for the week were Nervos Network (CKB) at 84.94%, Popcat (SOL) (POPCAT) at 50.15% and Bittensor (TAO) at 37.63%.

The top three altcoin losers of the week were Helium (HNT) up 2.99%, TRON (TRX) up +0.84% ​​and Unus Seed Leo (LEO) up +1.13%. Be sure to read Cointelegraph's market analysis for more information on crypto prices.

The most memorable quotes

“We firmly believe that digital assets are not just a passing trend, but a fundamental shift in the financial landscape.

Bill Winters, CEO of Standard Chartered

“Pump.fun and Solana have been the craze of the moment for new gems, but that also caters to a certain type of spoiled marketer. […] It's completely different from trading an established meme like Pepe on major centralized exchanges.

Elias Salvatore, Head of Development at Flooz

“Insurance coverage for third-party custodians is a joke. Given the risks and difficulties involved in recovering lost funds, it is simply not economical to insure the full value of these assets.”

Jameson Lopp, co-founder and chief security officer of Kasa

“For the first time in US history, crypto has become a significant campaign issue in a presidential election.”

Gemini, cryptocurrency exchange

“We respectfully present the goals and benefits of justice policy without undermining the most serious crimes here. […] Don't ask to send Carolyn to jail, and ask for a non-custodial sentence accordingly.

Carolyn Ellison Law Group

“If history repeats itself, Bitcoin could lead to three consecutive months of positive monthly returns.”

Rekt Capital, anonymous crypto analyst

Forecast of the week

VanEck, StoneX analysts estimate the price of Ether between 12 thousand and 22 thousand dollars.

The spot price of Ether (ETH) is projected to rise from $12,000 to $22,000 by the end of this decade.

Matthew Siegel, VanEck's head of digital asset research, expects the Ethereum network to generate up to $66 billion in annual free cash flow by 2030, with ETH's spot value of up to $22,000 per token.

David Kroeger, a data scientist at StoneX, sees the price of ETH rising to around $4,600 in the next 18 months.

“But the high is too high – to $12,621 – especially considering some of the technological improvements that Ethereum is making,” said Kroger, speaking with Siegel at the September 10 StoneX panel.

As Ethereum continues to grow from a growing number of global transactions, the estimates are based on the expected value of transaction fees for ETH holders.

FUD of the week

The bank of Brazil stopped trading the native crypto token following a 97% price drop

Nubank, one of Latin America's largest crypto banks and backed by Warren Buffett's Berkshire Hathaway, announced on September 10 that it will immediately halt trading of NuCoin. The token's value has fallen by more than 97 percent over the past year.

Nubank announced the creation of NuCoin token on the Polygon blockchain on October 19, 2022. About two years after the announcement, the bank closed the business. The bank has given customers with at least Rs 10 in nucoins the option to convert to Bitcoin or the stablecoin USDC by December 9.

According to Cointelegraph Brazil, if a user does not proceed with the conversion, the cryptocurrencies will be stored and kept for “future use of the reward program”.

According to a media report, Nubank said in an email to customers that “to protect you and all participants from the volatility in the market price of nucoins due to possible reactions to this update, we have chosen to suspend your trading immediately.”

Kraken denies the SEC's claims, arguing that digital assets are not securities.

Kraken, a centralized cryptocurrency exchange, has responded to a United States Securities and Exchange Commission (SEC) inquiry that it violated federal securities laws. The SEC alleged that many of the digital assets the crypto exchange offers are qualified unregistered securities.

In its legal filing response, Kraken strongly denied the allegations, arguing that the assets in question did not meet the legal definition of securities under US law.

The exchange's defense rests on its assertion that Cardano (ADA), Algorand (ALGO), Cosmos (ATOM) and other digital assets sold by Kraken are not investment contracts.

eToro US will stop almost all crypto trading following the SEC agreement

Popular stock trading platform eToro is ceasing trading for all crypto assets after reaching a settlement with the US Securities and Exchange Commission.

Etoro is accused of operating an unregistered brokerage and clearing agency in connection with the crypto trading platform.

The trading platform agreed to pay $1.5 million to settle charges related to unregistered brokerage and clearing agency operations, the SEC announced on September 12.

As part of the agreement, eToro agreed to “offer limited crypto assets for trading” in the US and to cease violating applicable federal securities laws.

As part of the deal, eToro's US customers will be able to trade only Bitcoin, Bitcoin Cash and Ether tokens for up to 180 days starting September 12, allowing customers to sell their other crypto assets.

Top magazine stories of the week

The proposed change could save Ethereum from L2's ‘roadmap to hell'

Critics say ETH is in its death throes, along with fee income and extractive L2s. But researchers have plans to make Ethereum great again.

China's ‘Dots Run' Crypto Scam, Pork Butchers Kill Children: Asia Express

In China, a new scam known as “point run” will arise, Indox has responded to the hacking of free money, pork scammers are robbing children.

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Cointelegraph magazine writers and reporters contributed to this article.