Last month Reuters reported that Venezuela's state-run oil company "plans to increase digital currency usage in its crude and fuel exports as the U.S. reimposes oil sanctions on the country, three people familiar with the plan said." [The oil company] since last year had been slowly moving oil sales to USDT, a digital currency also known as Tether whose value is pegged to the U.S. dollar and designed to maintain a stable value. The return of oil sanctions is speeding up the shift, a move to reduce the risk of sale proceeds getting frozen in foreign bank accounts due to the measures, the people said...

Tether said in an email it respects the U.S. Treasury's list of sanctioned entities and "is committed to working to ensure sanction addresses are frozen promptly."
This week Reuters reported that now experts are saying the situation "will require greater scrutiny by regulators and law enforcement." They spoke to Kristofer Doucett, national security leader at U.S. blockchain analysis firm Chainalysis, who said "Structures must be set up to combat this type of money laundering." Reuters writes: Technology for digital transactions is changing fast and transactions are rapidly growing in developing regions including Latin America and Africa benefiting people without access to the banking system. But some corrupt governments are moving faster, making it difficult to prevent fraud, the experts said. Doucette and Sigal Mandelker, a lawyer who previously worked at the U.S. Treasury Department, said during a conference organized by the Wilson Center in Washington that the U.S. administration is making efforts to increase regulation and encourage other countries to improve supervision.
Slashdot reader RossCWilliams asks a loaded question. Whether this is "the beginning of the end of unregulated cryptocurrencies... the recognition of cryptocurrency as a national security threat that threatens international financial controls."

Crypto entrepreneur Sam Bankman-Fried was sentenced Thursday to 25 years [non-paywalled link] in prison for a massive fraud that unraveled with the collapse of FTX, once one of the world's most popular platforms for exchanging digital currency. From a report: Bankman-Fried, 32, was convicted in November of fraud and conspiracy -- a dramatic fall from a crest of success. U.S. District Judge Lewis A. Kaplan imposed the sentence in the same Manhattan courtroom where, four months ago, Bankman-Fried testified that his intention had been to revolutionize the emerging cryptocurrency market with his innovative and altruistic ideas, not to steal.

Kaplan said the sentence reflected "that there is a risk that this man will be in position to do something very bad in the future. And it's not a trivial risk at all." He added that it was "for the purpose of disabling him to the extent that can appropriately be done for a significant period of time." Prior to sentencing, Bankman-Fried had said, "My useful life is probably over. It's been over for a while now, from before my arrest."

A top executive from the crypto exchange Binance has escaped custody in Nigeria after being arrested for allegedly destabilizing the country's national currency. The Associated Press reports: Nadeem Anjarwalla, the regional manager for Binance in Africa, "fled Nigeria using a smuggled passport," the office of Nigeria's National Security Adviser said in a statement, calling for "whatever information that can assist law enforcement agencies to apprehend the suspect." Anjarwalla, who holds dual British and Kenyan citizenship, had been detained in Nigeria along with another colleague since Feb. 26 when they arrived in the country following a crackdown on the crypto platform. Tigran Gambaryan, the colleague who is an American citizen, remains in captivity.

Nigeria is Africa's largest crypto economy in terms of trade volume with many citizens using crypto to hedge their finances against surging inflation and the declining local currency. Binance stopped all trading with the Nigerian naira currency on its platform in early March after authorities accused it of being used for money laundering and terrorism financing -- without providing evidence publicly. It was not clear how Anjarwalla fled custody. The Abuja-based Premium Times newspaper, which broke the news of his escape, reported that he fled from a guest house in the capital city after guards led him to a nearby mosque for prayers. "The personnel responsible for the custody of the suspect have been arrested, and a thorough investigation is ongoing to unravel the circumstances that led to his escape from lawful detention," Zakari Mijinyawa, spokesman for the office of Nigeria's National Security Adviser said in a statement.

Two top executives from the crypto exchange Binance have been arrested in Nigeria for allegedly destabilizing the national currency. Quartz reports: According to a Wall Street Journal report, Tigran Gambaryan, head of financial-crime compliance at Binance who previously worked at the U.S. Internal Revenue Service (IRS), and Nadeem Anjarwalla, a British-Kenyan national and Binance's regional manager for Africa, have been held against their will for the past two weeks in the country. As per reports, Nigerian government officials invited Binance executives to discuss an ongoing dispute about the world's largest crypto exchange allegedly driving down the value of their national currency. Gambaryan and Anjarwalla arrived in Nigeria on February 25th; after their meeting with government officials, both were taken to their hotels. Later, they were instructed to pack their belongings and move to a guesthouse run by Nigeria's National Security Agency, as stated by their families, per reports.

The Nigerian government has accused Binance of exacerbating the country's foreign exchange challenges through rate manipulation for profit. The authorities have also accused the crypto exchange of illegal operations and have restricted access to the company's website. There are also reports that Nigeria sought a $10 billion penalty from Binance for processing around $26 billion in untraceable funds in the country. [...] The reason why and how Nigeria's economic crisis is linked with Binance is yet to be found out. Binance is hoping to resolve the matter soon, according to CoinDesk. The report notes that Nigeria is experiencing its worst economic crisis in recent years due to inflation and the devaluation of their currency, the naira.

A federal judge in Texas has granted a temporary order blocking the U.S. government from monitoring the energy usage of cryptocurrency mining operations, stating that the industry had shown it would suffer "irreparable injury" if it was made to comply. The Guardian reports: The US Department of Energy had launched an "eemergency" initiative last month aimed at surveying the energy use of mining operations, which typically use vast amounts of computing power to solve various mathematical puzzles to add new tokens to an online network known as a blockchain, allowing the mining of currency such as bitcoin. The growth of cryptocurrency, and the associated mining of it, has been blamed for a surge in electricity use as data centers have sprung up across the US, even reviving, in some cases, ailing coal plants to help power the mining. [...]

"The massive energy consumption of cryptocurrency mining and its rapid growth in the United States threaten to undermine progress towards achieving climate goals, and threaten grids, communities and ratepayers," said Mandy DeRoche, deputy managing attorney of the clean energy program at Earthjustice. Until now, a lack of publicly available information has only benefited an "industry that has thrived in the shadows," DeRoche added.

The crypto mining industry, however, has claimed it is the victim of a "politically motivated campaign" by Joe Biden's administration and has, for now, succeeded in averting a survey that it contends is unfairly onerous. "This is an attack against legitimate American businesses with the administration feigning an emergency to score political points," said Lee Bratcher, president the Texas Blockchain Council, one of the groups that sued to stop the survey. "The White House has been clear that they desire to 'to limit or eliminate' bitcoin miners from operating in the United States. "Although bitcoin is resilient and cannot be banned, the administration is seeking to make the lives of bitcoin miners, their employees, and their communities too difficult to bear operating in the United States. This is deeply concerning."

An anonymous reader quotes a report from The Guardian: A chief executive officer whose claimed qualifications appear to have no basis in fact was used to promote the HyperVerse crypto fund, alongside celebrity messages of support, as part of a push to recruit new investors into the scheme. A Guardian Australia investigation last month revealed thousands of people have lost millions of dollars to the HyperVerse crypto scheme, which was promoted by the Australian entrepreneur Sam Lee and his business partner, Ryan Xu, two of the founders of the collapsed Australian bitcoin company Blockchain Global. Blockchain Global owes creditors $58 million and its liquidator has referred Xu and Lee to the Australian Securities and Investments Commission for alleged possible breaches of the Corporations Act. Asic has said it does not intend to take action at this time. The HyperVerse investment scheme is among those that appear to have escaped scrutiny in Australia despite being flagged by regulators overseas, by one as a possible "scam" and another as a "suspected pyramid scheme." Lee has denied HyperVerse was a scam and disputes being its founder.

A man named Steven Reece Lewis was introduced as the chief executive officer of HyperVerse at an online global launch event in December 2021, with video messages of support from a clutch of celebrities released on Twitter the following month, including from the Apple co-founder Steve Wozniak and actor Chuck Norris. Promotional material released for HyperVerse, which was linked to a previous scheme called HyperFund, said Reece Lewis was a graduate of the University of Leeds and held a master's degree from the University of Cambridge. A brief career summary of Reece Lewis, which was presented in a video launch for potential investors, said he had worked for Goldman Sachs, sold a web development company to Adobe and launched an IT start-up firm, before being recruited to head up HyperVerse by the HyperTech group. This was the umbrella organization for a range of Hyper-branded crypto schemes.

Lee spoke at the launch event as "chairman" of the HyperTech group, while Xu was introduced as the group's "founder." The company praised Reece Lewis's "strong performance and drive," citing his credentials as the reason for his recruitment. Guardian Australia has confirmed that neither the University of Leeds nor the University of Cambridge has any record of someone by the name Steven Reece Lewis on their databases. No records exist of Steven Reece Lewis on the UK companies register, Companies House, or on the US Securities and Exchange Commission. Adobe, a publicly listed company since 1986, has no record of any acquisition of a company owned by a Steven Reece Lewis in any of its public SEC filings. It is understood that Goldman Sachs could find no record of Reece Lewis having worked for the company. Guardian Australia was unable to find a LinkedIn profile for Reece Lewis or any internet presence other than HyperVerse promotional material. A Twitter account in Reece Lewis's name was set up a month before he appeared in the HyperVerse video launch and was used to promote the scheme on the platform for just six months before the account became inactive.

Four Republican candidates for U.S. president debated Wednesday — and moderator Megyn Kelly had a tough question for former South Carolina governor Nikki Haley. "Can you please speak to the requirement that you said that every anonymous internet user needs to out themselves?" Nikki Haley: What I said was, that social media companies need to show us their algorithms. I also said there are millions of bots on social media right now. They're foreign, they're Chinese, they're Iranian. I will always fight for freedom of speech for Americans; we do not need freedom of speech for Russians and Iranians and Hamas. We need social media companies to go and fight back on all of these bots that are happening. That's what I said.

As a mom, do I think social media would be more civil if we went and had people's names next to that? Yes, I do think that, because I think we've got too much cyberbullying, I think we've got child pornography and all of those things. But having said that, I never said government should go and require anyone's name.

DeSantis: That's false.

Haley: What I said —

DeSantis:You said I want your name. As president of the United States, her first day in office, she said one of the first things I'm going to do --

Haley: I said we were going to get the millions of bots.

DeSantis: "All social medias? I want your name." A government i.d. to dox every American. That's what she said. You can roll the tape. She said I want your name — and that was going to be one of the first things she did in office. And then she got real serious blowback — and understandably so, because it would be a massive expansion of government. We have anonymous speech. The Federalist Papers were written with anonymous writers — Jay, Madison, and Hamilton, they went under "Publius". It's something that's important — and especially given how conservatives have been attacked and they've lost jobs and they've been cancelled. You know the regime would use that to weaponize that against our own people. It was a bad idea, and she should own up to it.

Haley: This cracks me up, because Ron is so hypocritical, because he actually went and tried to push a law that would stop anonymous people from talking to the press, and went so far to say bloggers should have to register with the state --

DeSantis:That's not true.

Haley: — if they're going to write about elected officials. It was in the — check your newpaper. It was absolutely there.
DeSantis quickly attributed the introduction of that legislation to "some legislator".

The press had already extensively written about Haley's position on anonymity on social media. Three weeks ago Business Insider covered a Fox News interview, and quoted Nikki Haley as saying: "When I get into office, the first thing we have to do, social media companies, they have to show America their algorithms. Let us see why they're pushing what they're pushing. The second thing is every person on social media should be verified by their name." Haley said this was why her proposals would be necessary to counter the "national security threat" posed by anonymous social media accounts and social media bots. "When you do that, all of a sudden people have to stand by what they say, and it gets rid of the Russian bots, the Iranian bots, and the Chinese bots," Haley said. "And then you're gonna get some civility when people know their name is next to what they say, and they know their pastor and their family member's gonna see it. It's gonna help our kids and it's gonna help our country," she continued... A representative for the Haley campaign told Business Insider that Haley's proposals were "common sense."

"We all know that America's enemies use anonymous bots to spread anti-American lies and sow chaos and division within our borders. Nikki believes social media companies need to do a better job of verifying users so we can crack down on Chinese, Iranian, and Russian bots," the representative said.
The next day CNBC reported that Haley "appeared to add a caveat... suggesting Wednesday that Americans should still be allowed to post anonymously online." A spokesperson for Haley's campaign added, "Social media companies need to do a better job of verifying users as human in order to crack down on anonymous foreign bots. We can do this while protecting America's right to free speech and Americans who post anonymously."

Privacy issues had also come up just five minutes earlier in the debate. In March America's Treasury Secretary had recommended the country "advance policy and technical work on a potential central bank digital currency, or CBDC, so the U.S. is prepared if CBDC is determined to be in the national interest."

But Florida governor Ron DeSantis spoke out forecefully against the possibility. "They want to get rid of cash, crypto, they want to force you to do that. They'll take away your privacy. They will absolutely regulate your purchases. On Day One as president, we take the idea of Central Bank Digital Currency, and we throw it in the trash can. It'll be dead on arrival." [The audience applauded.]

An anonymous reader quotes a report from Wired: Hamas' attacks against Israel on October 7 have shifted the geopolitical landscape and triggered a looming Israeli ground assault in the Gaza Strip. Now the ripple effects are reaching the cryptocurrency industry, where they've become the United States Department of the Treasury's rallying cry for a crackdown on cryptocurrency anonymity services. The US Treasury's Financial Crimes Enforcement Network (FinCEN) [on October 19th] released a set of proposed rules that would designate foreign cryptocurrency "mixers" -- services that blend users' digital funds to offer more anonymity and make them harder to trace -- as money laundering tools that pose a threat to national security and would thus face new sanctions and regulations. The new rules, if adopted following a 90-day period of public comment and debate, would potentially represent the broadest restrictions imposed yet on the mixing services and could make it far harder for cryptocurrency holders to put their money through the services before cashing it out at a US cryptocurrency exchange, or even at a foreign exchange that accepts US customers.

While the proposed rules were almost certainly in the works long before October 7, the Treasury's announcement tied the push for a change in policy directly to the use of cryptocurrency by Hamas and militant groups in Gaza. "The Treasury Department is aggressively combatting illicit use of all aspects of the CVC ecosystem by terrorist groups," Wally Adeyemo, deputy secretary of the Treasury, wrote in a statement, using the term "CVC" to mean convertible virtual currency. Adeyemo says that this includes Hamas and Palestinian Islamic Jihad, a militant group that often aligns with Hamas, which Israel blamed for an explosion at a hospital in Gaza earlier this week.

Cryptocurrency mixers have existed almost as long as Bitcoin itself. They offer to take in a user's cryptocurrency, blend it with that of other users, and return the funds so that they are harder to follow from their origin to destination on blockchains, which generally record every transaction in full public view. The Treasury's rule change would designate those cryptocurrency-mixing services -- or at least the majority of them that are based outside the US -- as a "primary money laundering concern." They would thus be considered a threat to US national security as defined by section 311 of the Patriot Act, a section of the law designed to restrict how domestic financial institutions interact with potential sources of terrorist financing. The rule change would mean that US financial services, as well foreign ones with US customers -- including cryptocurrency exchanges -- would have to go through extra record-keeping and reporting requirements for funds that have touched a foreign cryptocurrency mixer, and it might even allow the Treasury to block US exchanges from handling those funds. "We've never seen anything like this before," says Ari Redbord, the head of global policy for TRM Labs, a blockchain analysis firm. Redbord notes that the rule change isn't proposing a blanket ban on foreign mixing services, only new rules for interacting with them. "The reality, however, is that 311 actions oftentimes have a sort of name-and-shame effect, where people are just not wanting to engage with these platforms out of fear of being caught up in money laundering or other type of illicit activity."

"I think the challenge for regulators is, how do we thread the needle between stopping illicit actors from using these platforms but at the same time allow regular users to enable some degree of privacy?" Redbord added. "I think the concern is that this could very much be throwing the baby out with the bathwater."

New York Attorney General Letitia James is suing three cryptocurrency companies -- Gemini, Genesis, and Digital Currency Group (DCG) -- over claims they misled investors, leading to the loss of over $1 billion. From a report: In a lawsuit filed on Thursday, James says their alleged fraudulent schemes affected over 230,000 investors. The lawsuit targets Gemini, the crypto exchange owned by Cameron and Tyler Winklevoss, and its Earn program. The firm marketed Gemini Earn as a high-yield program that involved customers investing with Genesis Global Capital, which is owned by DCG. However, James alleges that Gemini knew investing with Genesis was risky and misled customers as a result.

The U.S. government is one of the world's biggest holders of bitcoin, but unlike other crypto whales, it doesn't care if the digital currency goes up or down in value. From a report: That is because Uncle Sam's stash of some 200,000 bitcoin was seized from cybercriminals and darknet markets. It is primarily offline in encrypted, password-protected storage devices known as hardware wallets that are controlled by the Justice Department, the Internal Revenue Service or another agency. What the federal government does with its bitcoin has long been a topic of interest among crypto traders because any sale could potentially swing prices or cause other ripple effects in the $1 trillion digital-asset market.

The U.S. has been notoriously slow to convert its stash of bitcoin into dollars. It isn't HODLing, crypto parlance for "holding on for dear life" and never intending to sell. Nor is it waiting for bitcoin to go "to the moon" so it can sell its holdings for a hefty profit. Rather, that big pile of bitcoin is more a byproduct of a lengthy legal process than strategic planning. "We don't play the market. We basically are set by the timing in our process," said Jarod Koopman, executive director of the IRS's cyber and forensics services section, which oversees all activities focused on cybercrimes.

Reddit announced a contributor program on Monday, which awards users actual, real money for their fake internet points. From a report: Now, eligible users will be able to convert their Reddit gold and karma into fiat currency (no, not crypto), which is dispersed once per month. So far, the Reddit contributor program is limited to users in the United States (to start, at least) who are over the age of 18 and can verify their identity via Persona and Stripe. Accounts must have existed for over 30 days, and only safe for work posts can be monetized.

An anonymous reader shares a news story: A report by dappGambl based on data provided by NFT Scan and CoinMarketCap showed that out of 73,257 NFT collections the researchers looked at, 69,795 of them, or slightly over 95%, had a market cap of zero ether. By their estimates, almost 23 million people hold these worthless assets. "This daunting reality should serve as a sobering check on the euphoria that has often surrounded the NFT space," the researchers said. "Amid stories of digital art pieces selling for millions and overnight success stories, it is easy to overlook the fact that the market is fraught with pitfalls and potential losses."

NFTs are digital representations of art or collectibles tied to a blockchain, typically ethereum, and each one has a unique signature that cannot be duplicated. In 2021 and 2022, the NFT market saw a huge bull run, at one point leading to $2.8 billion in monthly trading volume. During that time, popular collections such as Bored Apes and CryptoPunks were selling for millions of dollars, and celebrities such as Stephen Curry and Snoop Dogg participated in the hype. The boom coincided with cryptocurrency's peak when bitcoin was trading close to $70,000. On Wednesday, the price of the crypto hovered just above $27,000. dappGambl's study shows 79% of all NFT collections currently remain unsold, and the surplus of supply over demand has created a buyer's market that isn't doing anything to revive enthusiasm.

An anonymous Slashdot reader shared this report from the New York Times: The collapse in cryptocurrency prices last year forced a procession of major firms into bankruptcy, triggering a government crackdown and erasing the savings of millions of inexperienced investors. But for a small group of corporate turnaround specialists, crypto's implosion has become a financial bonanza.

Lawyers, accountants, consultants, cryptocurrency analysts and other professionals have racked up more than $700 million in fees since last year from the bankruptcies of five major crypto firms, including the digital currency exchange FTX, according to a New York Times analysis of court records. That sum is likely to grow significantly as the cases unfold over the coming months. Large fees are common in corporate bankruptcies, which require complex and time-intensive legal work to untangle. But in the crypto world, the mounting fees have sparked widespread outrage because many of the people owed money are amateur traders who lost their personal savings, rather than corporations with the ability to weather a financial crisis. Every dollar in fees is deducted from the pool of funds that will be returned to creditors at the end of the bankruptcies.

The fees are "exorbitant and ridiculous," said Daniel Frishberg, a 19-year-old investor who lost about $3,000 when the crypto company Celsius Network filed for bankruptcy last year. "At every hearing, they have an army of people there, and most of them don't need to be there. You don't need 20 people taking notes."

Agence France-Presse reports that "Two years ago, El Salvador shrugged off a chorus of warnings and adopted Bitcoin as legal tender in a bid to revitalize its economy and improve access to financial services.

"It has not worked... Economist Cesar Villalona told AFP that Bitcoin 'does not exist in the local economy' in any significant way, because in El Salvador 'everything' is paid in dollars: wages, services and goods." Bitcoin has lost more than half its value since then and though President Nayib Bukele is wildly popular for his clampdown on criminal gangs, his currency gamble has not gone down equally well... [T]wo years after El Salvador became the first country in the world to adopt Bitcoin as its currency, alongside the U.S. dollar, "the goals that were pursued... have not been achieved, people hardly use it, they don't have much trust" in crypto, economist and former Reserve Bank governor Carlos Acevedo told AFP. "The experiment has not worked, it is a crypto winter," he said.

There are no figures available on how many Salvadorans have taken up Bitcoin. But a poll conducted in May by the Central American University found that 71 percent believed the cryptocurrency "has in no way helped to improve their family economic situation."

On the streets of San Salvador, the verdict is harsh. "I don't see that money working, it's just propaganda. Where's the benefit? There's no benefit. It's a bad investment," newspaper vendor Juan Antonio Salgado, 65, told AFP. "It's robbery," he added, in reference to the currency's volatility.
Even a video report from Al Jazeera opens by asking "So has the experiment succeeded? The general verdict — not yet, at least."

They report that even though one fifth of El Salvador's GDP comes from remittances, less than 2% of its remittances went through crypto currency and digital wallets so far this year. Building has yet to begin on "Bitcoin City" — and the country has yet to actually issue the "Volcano Bonds" that would fund its creation.

And meanwhile, the government's bitcoin purchases have now lost an estimated $45.4 million.

BlackRock's move into crypto fits into the asset management giant's broader mission of creating products that are easy to use and cheap for investors, CEO Larry Fink said Friday. From a report: "We believe we have a responsibility to democratize investing. We've done a great job, and the role of ETFs in the world is transforming investing. And we're only at the beginning of that," Fink said. BlackRock applied for a spot bitcoin ETF on June 15, which appeared to spur a rally in cryptocurrencies and a flurry of similar filings from other asset managers. The initial filing for the iShares Bitcoin Trust did not include a management fee.

[...] Fink had previously been critical of crypto, saying in 2017 that the popularity of digital currencies was do in large part to money laundering. However, interest from clients and the high cost of transactions motivated BlackRock to take a closer look at entering the space, Fink said. He also added that crypto can serve a diversification role in investor portfolios. "It has a differentiating value versus other asset classes, but more importantly, because it's so international it's going to transcend any one currency," Fink said.

According to a recently discovered patent application, Mastercard plans to develop software optimized for bitcoin and blockchain transactions. The second-largest payment-processing corporation also aims to facilitate crypto-based transactions by reducing connections between virtual asset service providers. Crypto News reports: The trademark application is a fascinating window into Mastercard's plans for the future of digital currency. Details have been revealed about creating a downloadable application programming interface (API) designed to verify transactions inside blockchain networks and ease the handling or trading of cryptocurrency. By standardizing this API software, communication between VASPs may be streamlined and crypto transactions easier. Mastercard wants to set up a platform for financial institutions to exchange customer information to verify compliance. This new step is significant for Mastercard's fast-growing presence in the cryptocurrency sector. The corporation announced its intention to offer a limited number of cryptocurrencies on its network in February 2021.

In 2020 Nigeria had the third-most cryptocurrency transactions in the world (behind the U.S. and Russia). But "Nigeria's history with crypto has been a bittersweet one where the citizens have embraced digital assets with open arms but the government remains vehemently against it," writes the site Bitcoinist.

In early 2021 the BBC reported that "In an effort to regulate the market, Nigeria's central bank banned banks from facilitating cryptocurrency-related transactions in 2017, but the ban remained largely unenforced. However, this year the institution doubled down on its stance." In a statement released on 7 February [2021] it cited the need to protect the general public and safeguard the country from potential threats posed by "unknown and unregulated entities" that are "well-suited for conducting many illegal activities". Since then, many Nigerians have reported that their bank accounts have been frozen due to cryptocurrency-related activity...

However many investors with the possibility say they will continue to trade using their overseas bank accounts. They say they can easily revert to peer-to-peer transactions. This means that rather than transferring funds between a financial institution and a cryptocurrency online trading platform, investors transfer funds directly to each other or through a middle person as they buy and sell. This is the method the cryptocurrency community used before the development of the virtual currency marketplace ecosystem in Nigeria...

At the heart of the rise of Bitcoin is a distrust of centralised financial systems and top-down economic control, investors say. Many express their frustrations with government policy and the decline of the Nigerian economy.
This week the Lagos-based Nigerian newspaper The Nation published this explanation of that crackdown from the Central Bank's deputy governor, Kinsley Obiora. "When the central bank started reacting to COVID with what we call printing money and responding to the crisis, a lot of people in the private sector felt that printing of money could lead to hyper-inflation and these private sector people decided to respond by creating cryptocurrencies." Over time, the creators of cryptocurrency, he added, felt that central banks should not be left with the authority to do whatever they like with money. Fearing that such a mindset might cause inflation and reduce the purchasing power of households, the CBN he said responded to what he called "the good aspect of that change because a lot of people actually took to crypto currencies". Fed up with the antics of the cryptocurrency operators, Obiora said the "we kicked them out of our banking system because the opacity of the system is still a threat to financial system stability".

In the U.S., at least three early candidates for president from both parties "want to make it clear they would not support any proposals for a central bank-backed digital US dollar," reports Bloomberg — which may be a little premature, because "A central bank digital currency, or CBDC, is far from reality in the U.S." Some officials at the Federal Reserve have expressed doubt over the need for one, especially for use by everyday Americans. The Fed has also said it would want approval from Congress before moving forward with a digital dollar. But that hasn't stopped the relatively niche issue from emerging as a flash point for individuals eyeing a presidential run.

The idea of a digital dollar has already faced backlash from Wall Street and other banks, because lenders are worried about it acting as a direct competitor to private bank deposits. Digital-asset companies like Circle Internet Financial LLC that issue stablecoins — a form of cryptocurrency traditionally tied to reserve assets like the US dollar or gold and that offers similar features to a retail digital dollar — have also pushed back against certain CBDCs. Circle's Head of Global Policy Dante Disparte said he'd be opposed to a digital dollar if it allows the Fed to control users' access to funds, compromises privacy or disrupts a two-tiered banking and payments system. "I've gone as far as saying that's the version that is un-American," he said in an interview. In a report published last year in response to a Federal Reserve discussion paper, Circle also warned that a digital dollar could "destabilize" the banking sector.

In Congress, Republicans on Capitol Hill have introduced legislation to ban such direct-to-consumer CBDCs, saying they could be used by the federal government to surveil US citizens.

Proponents of a CBDC have argued that it could offer real benefits, including making payments — especially cross-border payments — faster and ensuring the dollar's dominance in the global economy. It could be particularly useful for settling certain financial-market transactions, such as interbank transfers, some Fed officials have said. The government has also indicated it would prefer to have private-sector intermediaries offer accounts and facilitate CBDC payments, rather than taking on that role itself. Supporters have argued it can be tailored in a way to protect consumer privacy, which the Fed has also said is critical if it decides to move forward.
Bloomberg also summarized the analysis of one political consultant specializing in cryptocurrency. "In addition to the potential appeal to libertarian voters and to constituents in banking and crypto, pushing back against a U.S. digital dollar can provide a relatively safe avenue for candidates to attract votes from conspiracy theorists who have rallied around the anti-CBDC movement."

Canada's $190bn Ontario Teachers' Pension Plan says it is steering clear of the cryptocurrency sector after writing off a $95mn investment in FTX, the failed digital currency exchange. From a report: OTPP was among a number of big-name money managers to back FTX, with investments in 2021 and early 2022. The move was widely seen as a sign that high-profile, blue-chip investors were giving their stamp of approval to the fast-growing but lightly regulated crypto sector. But in November 2022 OTPP wrote off its entire stake, following FTX's dramatic collapse. The exchange's high-profile founder, Sam Bankman-Fried, is now facing fraud charges. "We're still working through what exactly happened there and you're going to be careful," OTPP chief executive Jo Taylor told the Financial Times. "It'd be unwise for us to rush" into another crypto investment based in part on "feedback from our members," he added.

Federal authorities are making arrests and seizing funds with the help of new tools to identify criminals through cryptocurrency transactions. From a report: James Zhong appeared to have pulled off the perfect crime. In December 2012, he stumbled upon a software bug while withdrawing money from his account on Silk Road, an online marketplace used to hide criminal dealings behind the seemingly bulletproof anonymity of blockchain transactions and the dark web. Mr. Zhong, a 22-year-old University of Georgia computer-science student at the time, used the site to buy cocaine. "I accidentally double-clicked the withdraw button and was shocked to discover that it resulted in allowing me to withdraw double the amount of bitcoin I had deposited," he later said in federal court. After the first fraudulent withdrawal, Mr. Zhong created new accounts and with a few hours of work stole 50,000 bitcoins worth around $600,000, court papers from federal prosecutors show.

Federal officials closed Silk Road a year later on criminal grounds and seized computers that held its transaction records. The records didn't reveal Mr. Zhong's caper at first. Authorities hadn't yet mastered how to track people and groups hidden behind blockchain wallet addresses, the series of letters and numbers used to anonymously send and receive cryptocurrency. One elemental feature of the system was the privacy it gave users. Mr. Zhong moved the stolen bitcoins from one account to another for eight years to cover his tracks. By late 2021, the red-hot crypto market had raised the value of his trove to $3.4 billion. In November 2021, federal agents surprised Mr. Zhong with a search warrant and found the digital keys to his crypto fortune hidden in a basement floor safe and a popcorn tin in the bathroom. Mr. Zhong, who pleaded guilty to wire fraud, is scheduled to be sentenced Friday in New York federal court, where prosecutors are seeking a prison sentence of less than two years.

Mr. Zhong's case is one of the highest-profile examples of how federal authorities have pierced the veil of blockchain transactions. Private and government investigators can now identify wallet addresses associated with terrorists, drug traffickers, money launderers and cybercriminals, all of which were supposed to be anonymous. Law-enforcement agencies, working with cryptocurrency exchanges and blockchain-analytics companies, have compiled data gleaned from earlier investigations, including the Silk Road case, to map the flow of cryptocurrency transactions across criminal networks worldwide. In the past two years, the U.S. has seized more than $10 billion worth of digital currency through successful prosecutions, according to the Internal Revenue Service -- in essence, by following the money. Instead of subpoenas to banks or other financial institutions, investigators can look to the blockchain for an instant snapshot of the money trail.