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Genesis Bankruptcy Filings - Latest: Crypto Lender Set to File for Bankruptcy Amid 'Big' DoJ Move

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Cryptocurrencies at the World Economic Forum

Cryptocurrency firm Genesis Global Capital is planning to file for bankruptcy as early as this week, Bloomberg reported today.

The filing for bankruptcy has been expected since the fall of November for the FTX cryptocurrency exchange.

Meanwhile, the US Department of Justice announced that Anatoly Legkodymov, the Russian operator of China-based crypto exchange Bitzlato, has been arrested. Bitzlato was a cryptocurrency exchange that allegedly worked with the black market darknet Hydra Market, which dealt in illicit trade and served as a safe haven for ransomware attackers, according to the DOJ.

The US Department of Justice issued a vague statement on Wednesday that it would “announce a major international cryptocurrency enforcement action,” and noted that the US Treasury Department would also make its own statement.

The announcement comes at a time when former CEO of crypto exchange FTX Sam Bankman-Fried is facing charges of wire fraud, securities fraud and conspiracy. The DOJ stressed that criminals who use the crypto space for scams and other criminal activities should be aware that the agency will use “all tools” to crack down on their activities.

Bankman-Fried’s company — long considered one of the biggest cryptocurrency exchanges alongside Binance — has declared bankruptcy after allegedly using and losing client funds as investment capital.

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Crypto firms reduce Davos visibility after a year of losses and scandals

In recent years, crypto companies have dominated the tour at the World Economic Forum in Davos, but this year they appear to have reduced their visibility, reports CNBC.

With the exception of a lone, orange crypto advertisement sports car, advertisements for crypto companies were much less prominent this year.

An NFT store that sold digital tokens along with images closed this year after asset prices dropped significantly in 2022.

Cliff Sarkin, head of strategic relations at Casper Labs, told the outlet that the remaining crypto businesses at Davos are “substantive projects” and “real businesses.”

Graig GraziosiJanuary 19, 2023 07:00

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FBI Says It Will ‘Retirely’ Pursue Crypto Criminals

FBI Deputy Assistant Director Brian Turner said the law enforcement agency would “relentlessly pursue” criminals operating in the crypto space following the arrest of crypto exchange Bitzlato founder Anatoly Legkodymov.

“The FBI will continue to pursue actors who attempt to mask their criminal activities behind keyboards and use means such as cryptocurrency to evade law enforcement,” he said, according to the DOJ. “We, along with our federal and international partners, will work tirelessly to disrupt and dismantle these types of criminal enterprises. Today’s arrest should serve as a reminder that the FBI will impose risks and consequences on those who engage in these activities.”

Legkodymov, a Russian citizen living in China, was arrested in Miami on Wednesday.

Graig GraziosiJanuary 19, 2023 06:00

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Financial Leaders at World Economic Forum in Davos Criticize Cryptocurrencies, Insist Traditional Institutions Are Safe

Several financial leaders speaking at the World Economic Forum in Davos made it clear that they don’t trust cryptocurrencies and insisted to attendees that traditional banking and investment institutions were still safe to use.

Senior Minister Tharman Shanmugaratnam of Singapore said that cryptocurrencies were “a bit crazy”, eliciting laughter from the audience, according to Iris Market IQ.

UBS chairman Colm Kelleher said regulators had failed in their ability to police “non-bank” entities, which includes cryptocurrencies.

“Regulators – respectfully – took their eyes off the ball in terms of the non-banking sector,” Kelleher said, according to Reuters.

European Central Bank Board member François Villeroy de Galhau concurred, saying “we should rush for some urgent non-banking regulation, starting with cryptos.”

Graig GraziosiJanuary 19, 2023 04:59

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DOJ says Bitzlato boss was aware Hydra’s transactions were illicit, customers were ‘known to be criminals’

The Department of Justice alleged that Bitzlato’s founder, Anatoly Legkodymov, was aware of the illicit nature of Hydra Market’s transactions and knew that its users were using false identities when transacting.

“Bitzlato customers routinely used the company’s customer service portal to request support for transacting with Hydra, which Bitzlato frequently provided, and admitted in chats with Bitzlato personnel that they were trading under false identities,” the DOJ said. . “Furthermore, Legkodymov and Bitzlato’s other managers were aware that Bitzlato’s accounts were rife with illicit activity and that many of its users were registered under other people’s identities.”

According to internal chat logs obtained by the DOJ, Legkodymov wrote to a colleague that his clients were “known criminals.” Bitzlato employees allegedly warned the founder that its users were “addicts who buy drugs”. [at Hydra]” and “drug dealers”.

Graig GraziosiJanuary 19, 2023 04:00

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ICYMI: Crypto Market Cap Hits $1 Trillion Briefly Before Diving

Earlier today, the cryptocurrency market cap hit $1 trillion for the first time since November, just before the 2022 mass sell-off and FTX meltdown.

It is unclear whether the decline was a result of the DOJ announcement, or due to traders selling higher, or both.

Despite the slump, Bitcoin has remained popular with investors, gaining 30% this year.

Graig GraziosiJanuary 19, 2023 03:00

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What was ‘Hydra Market’?

What was the ‘Hydra Market’, the darknet black market that was one of Bitzlato’s biggest customers?

According to the Department of Justice, the Hydra Market is “an anonymous, illicit online marketplace for narcotics, stolen financial information, fraudulent identification documents, and money laundering services that was the oldest and largest darknet marketplace in the world.” .

“Hydra Market users exchanged more than $700 million worth of cryptocurrencies with Bitzlato, either directly or through intermediaries, until Hydra Market was closed down by US and German authorities in April 2022,” the DOJ wrote. “Bitzlato also received over $15 million in ransomware assets.”

Graig GraziosiJanuary 19, 2023 02:00

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ICYMI: Bitcoin Price Plunges Amid Major Cryptocurrency Announcement From DOJ

The price of bitcoin dropped 5% in the space of an hour after the US Department of Justice announced plans to introduce a major international cryptocurrency enforcement action.

The world’s top cryptocurrency has dropped from $21,500 to around $20,500, reversing an uptrend that has seen its price rise by nearly a third since the start of the year.

Read more from the independents Anthony Cuthbertson in his story below…

Graig GraziosiJanuary 19, 2023 01:00

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‘Dr Doom’ Economist Says ‘90% of Cryptocurrencies Are a Scam’ in Davos

Nouriel Roubini — who is sometimes referred to as “Dr Doom” for his grim economic predictions — said that “literally 90% of cryptocurrencies are a scam” during the World Economic Forum in Davos on Wednesday.

“FTX and SBF are not an exception – they are the rule,” he said during a Yahoo Finance event.

He went on to predict an imminent bust.

“Literally 90% of cryptocurrencies are a scam. A criminal activity,” she said. “A real bubble Ponzi scheme that is failing.”

Graig GraziosiJanuary 19, 2023 00:00

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ICYMI: Crypto Network Shut Down in ‘Significant Slam’ for Fraudsters, DOJ Announces

The US Department of Justice has announced that it has dealt a “significant blow” to the crypto crime scene after arresting a Russian citizen who allegedly founded a major online criminal platform.

Cryptocurrency exchange Bitzlato processed more than $700 million in illicit funds, according to the DOJ, advertising its services to users who were “known to be criminals”.

The alleged founder Anatoly Legkodymov was arrested in Miami on Tuesday. Read more from the independents Anthony Cuthbertson in his story below…

Graig GraziosiJanuary 18, 2023 11:00 pm

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Crypto exchange targeted by DOJ responding with ‘oops sorry’ to customers on automated social media channel

Chinese cryptocurrency exchange Bitzlato — whose CEO Anatoly Legkodymov was arrested by the DOJ in Miami on Tuesday — is responding to its customers via an automated Telegraph message with the phrase “oops, sorry” along with a sad face emoji. , according to NBC News.

The DOJ alleges that the company frequently traded with Hydra Market, an illicit digital marketplace and haven for ransomware attackers. The agency alleged that Mr. Legkodymov was aware that his clients were involved in criminal activities and used pseudonyms to hide their identities.

Graig GraziosiJanuary 18, 2023 21:30

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