The U.S. Department of Justice announced that the FBI has arrested two people related to the 2016 Bitfinex hack. Cryptocurrency exchanges had numerous ads on Super Bowl. The world’s largest investment company, Blackrock, plans to offer cryptocurrency trading. BlockFi ended up agreeing with the SEC. Binance made a $200 million investment in Forbes.
FBI arrests two people related to 2016 Bitfinex hack
Last week’s biggest news comes from the United States. On February 8th the country’s Ministry of Justice announced that it had arrested two people related to the 2016 Bitfinex hack. This is one of the biggest hacks in the history of the crypto industry.
At the time of the hacking Bitfinex was one of the leading cryptocurrency exchanges. However, its reputation was badly hit in August 2016, from which the exchange has still not fully recovered. Bitfinex lost about 120,000 bitcoins worth $5.2 billion at today’s price.
The Bitfinex hack was also the latest major data breach in the crypto industry that resulted in bail-in. This is the opposite of bail-out. Bitfinex deducted 36 percent of each customer’s balance in order to prevent the company from going bankrupt.
Now the FBI has arrested two people in connection with the case: Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31. Especially Morgan has caused debate on social media. In addition to the video below, also check this Twitter thread, which goes through all the details of the case.
As the video above shows, Heather Morgan is a wannabe rapper whose musical credentials are considered questionable, to say the least. And that’s not all. Morgan is also a former journalist of Forbes magazine who even an article titled Experts Share Tips To Protect Your Business From Cybercriminals!
You could imagine the billion-dollar scam duo retreating underground, but no. On top of everything, they have lived all along in New York, practically next door to the Justice Department.
Lichtenstein and Morgan managed to launder about 25,000 Bitcoins during these years. They had created numerous different fake identities as well as thousands of wallets. The last clue for the arrest was the FBI’s permission to access the cloud service Lichtenstein used. He kept Bitcoin addresses as well as private keys in the online cloud service where the FBI finally found them.
Although arrests have been made and assets seized, there are questions surrounding the case. Many analysts find it hard to believe that Lichtenstein and Morgan were really behind the hack. A quote from Decrypt’s article:
It seems impossible to marry the sheer extent of the alleged crime with the meme-rich videos of these two ‘influencers’ who appear as far away from being master criminals as it is possible to be.
Was the actual hack carried out by someone else who is still free? The second big question concerns bitcoins held by the U.S. government. Will they return the stolen bitcoins back to Bitfinex?
This is a huge case which will certainly provide a lot of interesting details for a long time. No wonder Netflix announced it had already ordered the production.
You can check out all known exchange hacks of the crypto industry from this site.
Coinbase’s Super Bowl ad crashed the site
The legendary Super Bowl was played on the night between Sunday and Monday. It’s the finale of the NFL season. This season’s champion was the Los Angeles Rams, who defeated the Cincinnati Bengals 23 vs 20.
Besides the game itself, Super Bowl is famous for its half-time show and commercials. The Super Bowl ad seconds might be the most expensive you’ll find on this planet. As expected, several ads from well-known cryptocurrency exchanges were seen this year.
The biggest headlines were made by Coinbase. According to public records, Coinbase spent up to $14 million on an ad featuring a QR code floating on a TV screen for a minute. Check the ad in the YouTube video below.
Scanning the QR code forwarded the user to a registration page, through which new customers received $15 worth of bitcoins when opening an account (for U.S. citizens only).
The huge traffic caused Coinbase to crash for about half an hour. At least it shows the ad was extremely popular and Coinbase certainly got visibility for the money they spent.
Another major advertiser was FTX. Over the past year, this exchange has made the most advertising and marketing in the entire sector. FTX made a commercial starring the popular actor Larry David. You can check the extended version of the video below.
Larry David plays a variety of characters who abandons new technologies as history goes by.
In addition to Coinbase and FTX, eToro and Crypto.com were also advertising in Super Bowl. You can check these ads from this link. It was a bit surprising that Binance US was not among the advertisers.
Blackrock will soon offer cryptocurrency trading
Last week we saw significant news from Blackrock. This company may not be familiar to hobby-level investors, but anyone who follows the investment world more closely knows the name. Blackrock is the world’s largest asset management company.
Blackrock currently controls more than $10 trillion worth of assets. It also has close relations with the U.S. Administration and the Federal Reserve. Blackrock can be said to be the world’s most important financial institution after major central banks.
Blackrock already owns as much as 16.3 percent of Microstrategy, which holds 125,000 bitcoins on its balance sheet. According to the latest information, Blackrock is now taking concrete steps to provide crypto trading for its customers.
According to Coindesk, Blackrock brings cryptocurrencies to its Aladdin platform for institutional clients. This is not an official announcement yet, it is only information from people working in the company.
At the moment, it seems that Blackrock’s entry into the crypto market is only a matter of time. The company has signaled its interest in cryptocurrencies in the past and is already offering Bitcoin futures trading.
Almost every Wall Street financial giant has given similar comments in recent years. Cryptocurrencies will soon be offered on all major trading platforms. The institutional game of cryptos is just beginning.
BlockFi pays a fine of $100 million
The most expensive agreement in the history of the crypto industry has been made with the SEC, the U.S. securities regulator. The other party, or the payer, is the well-known lending platform BlockFi.
The company has been arguing with the US authorities on an old and familiar subject: the definition of securities. In addition to the SEC, BlockFi has also been attacked by dozens of different U.S. states.
Anthony Pompliano talked about the subject in his The Best Business Show yesterday. You can also check out BlockFi’s founder, Zac Prince, Twitter thread.
The dispute has been about the BIA account, which is known also as the BlockFi Interest Account. Moreover, the problem has only been in the United States. The case, therefore, does not affect other users or other services, such as BlockFi’s debit card.
BlockFi has now made an agreement with the SEC. It will pay $50 million to the SEC and another $50 million to different states. Although the price is massive, BlockFi is very pleased with the decision and the clarifying of the legislation.
The company will have to register a new interest rate product with the SEC. However, this has also its own problems and the paperwork has just begun. SEC spokesman Hester Peirce, who criticized the decision, introduces the topic in more detail in his recent blog post.
It is still unclear how the decision will affect lending services more broadly. Coinbase, for example, canceled the launch of a similar product last year after the SEC threatened to sue it.
Celsius and Kraken offer at the moment similar services as BlockFi. Will they also have to go through a similar process and pay fines? What about DeFi services?
There are currently many different processes underway in the United States to regulate the cryptocurrency industry.
Binance invested $200 million in Forbes
Binance, the world’s leading cryptocurrency exchange, made a significant investment in Forbes magazine last week. If you are not familiar with Forbes, it is a financial magazine over 100 years old.
Binance’s investment was as much as $200 million. With that, the exchange will become one of Forbes’ largest owners. Binance will also have two chairs on Forbes’ board.
Binance founder Changpeng ‘CZ’ Zhao commented on the deal in the video below.
According to Zhao, Binance wants to lift Forbes from the Web 1.0 world to the Web 3.0 world. In addition, Binance intends to invest in other sectors in addition to the media industry.
Binance’s’ investment boosts Forbes’ plans to go public as a SPAC company.
You can check the official Forbes release from this link.