I have been in the crypto space for quite some time. And yet, this story has to be one of the craziest that I have yet encountered.
It’s the story of those infamous BitFinex money launderers who managed to evade capture for over 6 years. All this while living in plain sight of the regulators and law enforcement agencies that were hot on their tail. Individuals who were the antithesis of what you would expect of sophisticated cybercriminals.
The story was covered extensively in the press. However, what I found most interesting about it is the lengths that the authorities went to trace them and how they managed to bring them down. So today, I will be breaking down the case. All the way from how the hack took place to how the authorities managed to track down the stolen funds.
There are also a number of other mysteries that surround this story. Mysteries that play a central part in not only how the funds were distributed, but whether they were returned at all.
This was a fascinating video to break down so I hope you enjoy it. You can watch it over here.
📊 Main Portfolio 📊
No changes to the portfolio this week. Hodling tight given that there appears to be a great deal of Macro uncertainty ahead of us for the next 2 weeks or so. I will of course keep you guys posted in my Telegram channel if there are any changes.
ETH 30.93% | BTC 24.11% | SOL 10.01% | DOT 9.39% | ATOM 6.05% | FTM 4.15% | UST 2.62% | MATIC 2.17% | HNT 1.98% | ADA 1.85% | RUNE 1.54% | INJ 1.38% | LUNA 1.19% | AR 0.82% | LINK 0.80% | YGG 0.70% | XDEFI 0.31%
🖼 NFT Portfolio 🖼
MAYC 95.23% | Meebit 4.76%
📈 Thoughts on Market 📈
If you’re wondering why the crypto market has been so wonky lately, I can explain in one word: uncertainty. There is nothing investors hate more than uncertainty. The content of the news doesn’t even necessarily matter. If it’s bad news, it can be priced in. If it’s good news, it can be priced in. If nobody knows what the news is or is going to be, that creates volatility.
These days there is no shortage of macro factors causing uncertainty. First and foremost, there’s the uncertainty around how much the Federal Reserve is going to raise interest rates in March. The March meeting is only a few weeks away, and investors are expecting a 0.5% rate hike. I personally don’t think we’ll see interest rates rise above 1% before something breaks, just based on this trend.
Another macro factor at play is the ongoing supply chain issues that are putting a dent in economies around the world. Although many of these are due to pandemic restrictions, there’s an interesting theory I heard on a podcast the other day. Basically, people have changed their spending habits because of the pandemic, and this is creating unexpected bottlenecks.
Then there’s the prospect of another major war as a result of the tension between Russia and Ukraine. This is a whole can of worms that I discuss a bit more below, but I should note that this isn’t the only point of tension as far as global conflict goes. The United States seems to be revving up its engines in the middle east as well.
There are a few factors specific to crypto that are causing uncertainty as well. For starters there’s the formation of a crypto specific unit by the FBI which will scan cryptocurrency blockchains for any suspicious activities and seek to seize funds wherever possible. Call me crazy, but I have a feeling that this recovered crypto will be sold at auction to institutional investors in the future.
Finally we have the upcoming executive order by the US president which pertains to cryptocurrencies and CBDCs. Plans for the executive order were first revealed late last month, and it looks like it might finally be put in place next week. All we know for now is that it will instruct various regulators to assess the risks and benefits of these technologies.
🇺🇦 War & Crypto 🇷🇺
It seems as if one of the biggest geo-political risks on the table right now is the prospect of a war between Russia and Ukraine.
However, the broader question is: What impact could a war have on crypto?
Well, the immediate impact of any hostilities could lead to a large scale “risk off” sentiment in global financial markets. This is something that we have already been seeing over the past few days. Stock markets have been falling globally and this has also been driving the crypto markets lower.
Investors are pivoting out of these risky assets into perceived safe havens like treasuries, gold and even cash. This is likely to continue in the event that there actually is a large-scale invasion. How far it will fall is hard to tell. However, I do think that it won’t be as severe as the stock market / crypto routes that we saw in the Covid crashes of 2020.
Then, when it comes to crypto-specific impacts, there are quite a few things that we should be looking out for.
Firstly, in terms of demand to hold cryptocurrencies like Bitcoin, a full blown war between Russia and Ukraine could lead to capital flight out of their respective currencies. We have already seen this with the fall in the value of these currencies over the past few days. As Russians and Ukraininins try to preserve their purchasing power, they could attempt to move it into crypto.
In the case of Ukraine, the country ranks highly in global adoption tables and has been trying to fuel this growth over the past year. This has further been cemented this week as the Ukrainian parliament passed a bill to legalise cryptocurrency. Given that they have easy access to crypto services, there could be a flood of people who attempt to sell their hryvnia in return for Bitcoin.
Then, when it comes to Russians, crypto could also be a safe haven. Russia could suffer sanctions which would cut it off from dollar clearing. This could make it impossible for Russians to convert their rubles into foreign currency to preserve their savings. Bitcoin is much easier to buy in RUB and would allow them to “offshore” their savings with crypto.
It’s also pretty likely that ultra high net worth oligarchs could be sanctioned. These include some of those linked to Putin’s inner circle. These individuals would also look for alternative methods of making their vast wealth liquid and outside of the reach of other countries.
However, while there could be more demand to hold Bitcoin and cryptocurrencies from these countries, there could also be an impact on the Bitcoin network. That’s because a war could lead to a greater cost of operation and potential disruption of Bitcoin miners.
For example, if Russia does invade Ukraine, this could lead to oil & energy prices skyrocketing. If Russia’s energy sector is sanctioned, then you will have less supply which, with constant demand will mean higher prices. Europe is already struggling with energy costs and is heavily reliant on Russian gas.
So, higher energy prices mean more costs for the Bitcoin miners. In fact, this risk of rising energy prices is something that I talked about in a video last year. If the energy crisis gets so bad in these countries then it’s even possible that miners either shut down rigs or the grids ration power away from the miners.
We should also not forget that Russia makes up a sizable portion of the global hashrate with over 13% emanating from the country. Any disruptions in energy to these miners could lead to a fall in that hashrate as they go offline.
It’s also possible that this spills over beyond Russia’s borders and impacts on energy supply to neighbouring countries. Perhaps the biggest risk here is any impact on miners in Kazakhstan. They contribute the second most to global hash rate and we have already seen the network impact when these miners are put offline. Falling hash rate means reduced security, higher transaction fees and slower transactions.
While that is concerning, I still think that as a longer term hedge and store of value, Bitcoin & cryptocurrency is one of the best assets to hold. Yes, it’s going to be a volatile ride as it’s swept up in market hysteria. But, what I care about is how things look when the ride is done. Eventually, fundamental value is borne out.
🤫 A Preview of the Power of CBDCs 🤫
Last week, the Canadian government invoked a controversial law for the first time in response to the protests against pandemic restrictions taking place in the country’s capital. The Emergencies Act gives the Canadian government unprecedented powers, and in this case it used those powers to freeze the bank accounts of both protestors and the supporters of the protests.
Shortly after the emergency law went into effect, Canadian banks saw a sudden spike in outages which is believed to have been caused by citizens frantically withdrawing their money. This is likely because nobody knows what the threshold is for their bank accounts to be frozen. The prime minister actually refused to clarify what the criteria are during parliamentary debates.
To make matters worse, a full list of the donors to the crowdfunding campaign for the protests was leaked by hackers a day before the government invoked the Emergencies Act. This means the Canadian government conveniently has a list of financial supporters it could target. Those who oppose the protests have taken matters into their own hands by targeting supporters.
In the crypto world, the Emergencies Act made the headlines because it also included a “freeze” on roughly 40 cryptocurrency wallets associated with the protests. The crypto media was quick to point out that this wasn’t a freeze of cryptocurrency wallets, but an instruction to crypto-fiat on/off ramps to watch out for transactions from those wallets and freeze them if and when they come.
While these events have inspired admittedly awesome memes such as this one, they are simultaneously a terrifying glimpse into what awaits if and when central bank digital currencies are rolled out. The difference is that there will be no need for any emergency measures to enact these kinds of policies. As I’ve mentioned in my videos, this will be the default setting for CBDCs.
Put simply, anyone who opposes the government will be frozen out of the financial system, and as Kraken CEO Jesse Powell pointed out, any crypto-fiat on/off ramps will be forced to comply on the fiat side. The only protection will be decentralised finance solutions which have immutable and (hopefully) fair laws built into the code according to Ethereum founder Vitalik Buterin.
What these events have made clear however is that it’s not just the ability to transact, but the ability to transact privately that matters. This is something I mentioned in my video about the worst case scenario for cryptocurrencies. Without privacy, financial freedom is not possible, because you can always be coerced in other ways. Let this be a wake up call to the world.
🎧 My New Podcast 🎧
I am proud to announce that my new podcast has just been released! This new show is in collaboration with iHeartPodcasts and is co-hosted by my childhood friend, Mad Mike!
In it, Mike and I talk about all things crypto and give you the lowdown about all things in the cryptoverse, with none of the hype!
Interested in my crypto banter with Mike and hearing our educational insights? Well, check out our first episode where we tell you what money really is!
Also, if you enjoy the podcast please help a chap out and share it with your friends.
🔥 Deal of The Week 🔥
It’s been a pretty rough week in crypto land and if you are like me then you have been holding on for dear life. However, did you know that there is a way to earn while you HODL that digital gold?
Yep, you could use a crypto lending platform to retain all that price exposure and earn interest at the same time.
At Nexo you can earn up to 18% interest on dozens of different cryptocurrencies such as BTC, ETH and a plethora of different alts. Even better, those interest payments are made daily. So, unlike other lending platforms (which payout monthly) you won’t have to worry about losing that crypto interest if you quickly want to reallocate some of that crypto into a hot altcoin you have discovered.
👉 Try Out Nexo & Get Up To 18% Interest!
🔮 Video Pipeline 🔮
- The worst advice in crypto: What to ignore!
- Defi Insurance: How To Protect Your Sats!
- Is Crypto Systemically Risky? Deep Dive!
- The biggest corporate moves in the Metaverse
- Helium update: Still worth it?
- Olympus Dao: All you need to know!
- Crypto Transaction Fees: All The Coins Compared
- When fiat fails: The story of fiat failures in the 20th century!
🏆 What’s New At CoinBureau.com This Week? 🏆
✅ Wear-to-earn NFTs: For Real?
✅ The Pavia Metaverse – Cardano’s Decentraland or something more?
That’s all for this week folks. However, I want to thank you on behalf of the whole Coin Bureau team for your support.
Many years ago, I could have never imagined that even 1,000 people would care enough to subscribe to the channel. Or that I would get the opportunity to pursue my lifelong dream to create a podcast!
Sometimes it is overwhelming. However, I know that all these opportunities are thanks to you guys. That’s not lost on me or Coin Bureau’s ever growing team!
Guy your crypto guy