Genesis Bankruptcy Filings – Latest: Crypto Lender Will File for Bankruptcy Amid ‘Major’ DoJ Move

Crypto Outlook at the World Economic Forum

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

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

Meanwhile, the US Department of Justice has announced that Anatoly Legkodymov, the Russian operator of China-based crypto exchange Bitzlato, has been arrested. Bitzlato was a crypto exchange that allegedly worked with darknet blackmarket Hydra Market, which traded illegally and served as a safe haven for ransom attackers, according to the DOJ.

The US Department of Justice issued a vague statement on Wednesday that it would “announce a major, international enforcement action against cryptocurrency”[ads1];, noting that the US Treasury Department would also issue its own statement.

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

Mr Bankman-Fried’s company – long considered one of the biggest crypto exchanges alongside Binance – declared bankruptcy after allegedly using and losing customers’ funds as investment capital.


Crypto companies scale back Davos visibility after years of losses, scandals

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

With the exception of a lone, flash orange sports car with a crypto advertisement, crypto company ads were reportedly far less prominent this year.

An NFT store that sold digital tokens alongside images closed this year after prices of the assets fell significantly in 2022.

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

Graig Graziosi19 January 2023 at 07.00


The FBI says it will “relentlessly” pursue cryptocriminals

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

“The FBI will continue to pursue actors who try to mask their criminal activity behind keyboards and use means like cryptocurrency to evade law enforcement,” he said, according to the DOJ. “We, along with our federal and international partners, will work relentlessly 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 residing in China, was arrested in Miami on Wednesday.

Graig Graziosi19 January 2023 at 06.00


Financial leaders at Davos World Economic Forum bash crypto, insist traditional institutions are safe

Several financial leaders speaking at the Davos World Economic Forum made it clear they did not trust cryptocurrencies, insisting to attendees that traditional investment and banking institutions were still safe to use.

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

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

“Regulators have – respectfully – taken their eye off the ball when it comes to the non-banking sector,” Kelleher said, according to Reuters.

European Central Bank Governing Council member Francois Villeroy de Galhau agreed, saying “we should rush to some urgent non-bank regulation starting with crypto.”

Graig Graziosi19 January 2023 04:59


DOJ says Bitzlato boss was aware Hydra transactions were illegal, clients were ‘known to be crooks’

The Department of Justice claimed that Bitzlato’s founder, Anatoly Legkodymov, was aware of the illegal nature of Hydra Market transactions, and knew that users were using false identities while making transactions.

“Bitzlato’s customers routinely used the company’s customer service portal to request support for transactions with Hydra, which Bitzlato often provided, and admitted in chats with Bitzlato personnel that they were transacting under assumed identities,” the DOJ said. “Furthermore, Legkodymov and Bitzlato’s other managers were aware that Bitzlato’s accounts were full of illegal activity and that many of the users were registered under someone else’s identity.”

According to internal chat logs obtained by the DOJ, Legkodymov wrote to a colleague that their clients were “known to be crooks.” Officials at Bitzlato reportedly warned the founder that the users were “addicts who buy drugs [at Hydra]” and “drug dealers.”

Graig Graziosi19 January 2023 04:00


ICYMI: The crypto market cap hit $1 trillion briefly before you took the plunge

Earlier today, the crypto market cap hit $1 trillion for the first time since November, just ahead of 2022’s mass selloff and FTX collapse.

It is unclear whether the drop was a result of the DOJ’s announcement, or due to traders selling at the higher price, or both.

Despite the decline, Bitcoin has remained popular with investors, gaining 30 percent this year.

Graig Graziosi19 January 2023 at 03.00


What was “Hydra Market”?

What was “Hydra Market”, the online black market that was one of Bitzlato’s biggest customers?

According to the Department of Justice, Hydra Market is “an anonymous, illegal online marketplace for drugs, stolen financial information, false identification documents, and money laundering services that was the largest and longest-running dark web marketplace in the world.”

“Hydra Market users exchanged more than $700 million in cryptocurrency with Bitzlato, either directly or through intermediaries, until Hydra Market was shut down by US and German law enforcement in April 2022,” the DOJ wrote. “Bitzlato also received more than $15 million in ransomware revenue.”

Graig Graziosi19 January 2023 02:00


ICYMI: Bitcoin Price Falls Amid Major DOJ Crypto Announcement

The price of bitcoin has fallen by 5 percent in an hour after the US Department of Justice announced plans to introduce major international cryptocurrency enforcement actions.

The world’s leading crypto fell from $21,500 to around $20,500, reversing an upward trend that had seen prices rise by almost a third since the start of the year.

Read more from The Independent’s Anthony Cuthbertson in his story below…

Graig Graziosi19 January 2023 at 01.00


“Dr Doom” economist says “90 percent of crypto is a scam” at Davos

Dr Nouriel Roubini – who is sometimes called “Dr Doom” for his gloomy economic predictions – said that “literally 90 percent of crypto is a scam” during the Davos World Economic Forum on Wednesday.

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

He went on to predict an upcoming bust.

“Literally 90% of crypto is a scam. A criminal activity,” he said. “A total bubble Ponzi scheme going bust.”

Graig Graziosi19 January 2023 at 00:00


ICYMI: Cryptocrime network shut down in ‘significant blow’ to fraudsters, DOJ announces

The US Department of Justice has announced that it has dealt a “significant blow” to the crypto-crime landscape after arresting a Russian national who is alleged to have founded a major online criminal platform.

Cryptocurrency exchange Bitzlato processed more than $700 million worth of illegal funds, according to the DOJ, and advertised its services to users who were “known to be crooks.”

Alleged founder Anatoly Legkodymov was arrested in Miami on Tuesday. Read more from The Independent’s Anthony Cuthbertson in his story below…

Graig Graziosi18 January 2023 at 11 p.m


Crypto exchange targeted by DOJ responds with “oops, sorry” to customers on an automated social media channel

China-based cryptocurrency exchange Bitzlato — whose CEO Anatoly Legkodymov was arrested by the DOJ in Miami on Tuesday — is responding to its customers through an automated message on the Telegraph 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 illegal digital marketplace and haven for ransomware attackers. The agency alleged that Legkodymov was aware that his clients were involved in criminal activity and used aliases to hide their identities.

Graig Graziosi18 January 2023 21:30

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