The top three Bitcoin mining companies being traded on the US stock market lost more than $1 billion in the second quarter of 2022, according to a report from Bloomberg. The losses, which were matched by those of the crypto exchanges miners rely on to bring their funds into the real world, came after the collapse of cryptocurrency prices, which led to the value of the companies’ holdings being written down.

The three companies, Core Scientific Inc., Marathon Digital Holdings Inc. and Riot Blockchain Inc., posted quarterly earnings reports that show losses of $862 million, $192 million and $366 million, respectively. Elsewhere, the US crypto exchange Coinbase Global registered a loss of $1.1 billion in the same period, while major Bitcoin investor Microstrategy Inc. also lost more than $1 billion.

The cause seems to be the drop in cryptocurrency prices as miners sold off their coins to cover their costs and fund expansion, as well as repay their debts, and this appears to be continuing into the third quarter of the year despite signs prices were rising again.. July saw the second highest Bitcoin sales of the year so far, with 6,200 coins sold. This follows a June in which 14,600 coins were sold, though only 3,900 were produced, according to figures from Arcane Crypto. Core Scientific is thought to have sold 80% of its holdings.

At the same time, the big mining concerns are taking out loans, with Marathon Digital taking out $100 million (and selling off mining rigs to raise a further $58 million) and Core Scientific going for a $100 million common stock purchase agreement with a private equity firm.

Bitcoin remains profitable for large-scale commercial operations, with each block solved currently worth 6.25BTC, or roughly $120,000 at today’s prices. Energy consumption remains one of the major costs, with US electricity costs rising 12.6% in the last year. The price of the ASICs used to mine the coins has dropped, according to figures from Forbes, by up to 70% this year. As prices fluctuate, less efficient miners tend to give up, leaving the market in the hands of those with higher-performance mining equipment.

Mining profitability, measured in dollars per terahash per second, peaked in 2017 at $3.39/TH/s. Today it sits at around ten cents/TH/s, having been at 41 cents in 2021.

Meta’s Novi money-transfer service users have received messages informing them of the platform’s imminent demise, with the pilot project’s experimental subjects becoming unable to add money to their accounts after July 21. According to reporting from Bloomberg, they should withdraw their funds and download their transaction histories, if needed, as soon as possible before the service is closed down on September 1.

The message on the Novi website is certainly unequivocal: “The Novi pilot is ending soon” after just 11 months in service. For those not deeply entrenched in Web3 lore, Novi is the smoldering remnant of the project that used to be Diem, and also was once Libra before having to change its name following a legal challenge.

The original plan for Libra was for it to be a stablecoin, backed by other currencies and US treasury securities to avoid the volatility that has seen certain other cryptocurrencies soar and crash. The last gasp of Novi was as a money transfer service baked into Facebook Messenger and WhatsApp that used the currency’s digital wallet technology to facilitate its transfers. Even then, it was only available in parts of the US and Guatemala.

The pilot seems to have been something of a beta test, with a Meta spokesperson confirming to Bloomberg in an email that the underlying tech would be used in future Meta products. “We are already leveraging the years spent on building capabilities for Meta overall on blockchain and introducing new products, such as digital collectibles,” Meta said in the statement. “You can expect to see more from us in the Web3 space because we are very optimistic about the value these technologies can bring to people and businesses in the metaverse.”

Rather than using Diem, Novi provided transactions in the Paxos Dollar stablecoin, while Coinbase Global Inc safeguarded the funds. All of Diem’s assets were sold in January, with Silvergate Bank reportedly buying up its IP, while the leader of the project quit in November 2021. Financial regulators had been extremely interested in the goings-on. “Despite giving us positive substantive feedback on the design of the network, it nevertheless became clear from our dialogue with federal regulators that the project could not move ahead,” Diem CEO Stuart Levey said in a statement given to CNBC at the time of the Silvergate sale. 

This week we have reported on many firms withdrawing their products and services from Russia. However, fintech's problem children – cryptocurrency platforms – are steadfastly refusing to impose blanket bans on Russian users.

Coinbase and Binance, two of the world's biggest cryptocurrency exchanges, today rejected calls to ban all Russian users from trading. Are they being selfish in their resistance to limit Russian traders while other tech titans walk away?

"We believe everyone deserves access to basic financial services unless the law says otherwise," wrote Coinbase CEO Brian Armstrong today. On behalf of Binance, a spokesperson wrote to Reuters to protest, "We are not going to unilaterally freeze millions of innocent users' accounts."

So, in brief, the cryptocurrency exchange giants are staying open in Russia as they reckon they are helping innocent citizens who have nothing to do with the war or the political establishment.

However, a different view is held by European regulators. Those who would like to see Coinbase and Binance act decisively to block Russian traders say cryptocurrency exchanges are helping oligarchs and other sanctioned backers of Putin with money laundering activities. The regulators reason that the crypto avenue lessens the impact of other sanctions. Interestingly, the price of Bitcoin jumped with the onset of war (as did gold), giving it conflict currency credentials.

Shuttering the two major cryptocurrency exchanges isn't likely to have the impact of AMD or Intel closing up shop. Several other exchanges could facilitate the same activities. Thus we could see a whack-a-mole situation if the "big two" were pushed hard enough to deny Russians.

Despite their protestations concerning shuttering their services to the Russian populace, Coinbase and Binance aren't going to break any sanctions. Coinbase, for example, said that if the US government imposes a blanket ban that affects its services, it would follow that directive and fully comply.

The War in Tech News, a Brief Recap

The Russia – Ukraine war has naturally encroached upon technology news as the conflict continues and even seems to be intensifying. We have reported multiple times on the industrial and supply disruptions that are emerging. More recently, the most prominent names of tech have withdrawn products and services from customers in Russia.

Today we reported on Microsoft's withdrawal from the Russian market. Earlier in the week, AMD and Intel halted processor sales in the country, which is heavily impacting consumer pricing. We haven't reported on actions by the likes of Apple, Facebook, Twitter, TSMC, YouTube, or various video gaming companies – but they are all putting Russia blockades in place. Moreover, a week ago, we foretold this trend with a report about new export rules.

The unofficial Minecraft-inspired NFT game "Blockverse" appears to have become one of the latest scams in the crypto world. At launch, and in a mere eight-hour period, Blockverse raised more than $1 Million from a community of users through the sale of 10,000 NFTs (Non-Fungible Tokens) priced at 0.05 ETH (~$127) each. Little did the users know that they'll lose their funds soon after in a rug pull - a sadly classic cryptoverse move.

Rug pulls (the term coined for when blockchain-based projects disappear with users' funds) are a constant of the daily blockchain life - in 2021, around 3,300 projects pulled rugs on their users, stealing approximately $7 billion worth of investor's money. Rug pulls work in much the same way that snake-oil sellers did back in the day: promising a product but not delivering it; cue the charlatan running away with his clichéd dollar-marked bag of money. Blockverse seemingly carried this out a mere two days later. The project deleted its digital footprint - website, Discord server, and game server all disappeared, and so did the only connection from users to their investment - their access-granting NFTs rendered worthless.

The possession of one of these 10,000 NFTs would give the limited player pool of users access to the game upon its launch. Being a digital token, these NFTs are also inherently tradeable, meaning that single accounts could hold more than one of these "access slips." Blockverse pulled off a significant pre-order event if it were a legitimate project, selling the equivalent of 10,000 licenses. Users paid $127 for a digital pre-order game. But a digital trail may have forced Blockverse to come back - partially.

The game's community members managed to track down a Coinbase address linked with the Blockverse founders. This address had funded most of the efforts with establishing the Blockverse; alongside it was a Cloudflare IP. So it would certainly be enough for law enforcement (or someone with less stellar intentions) to arrive at the founders' identities.

Three days after closing all of Blockverse's digital presence, and with the paper trail leads already disseminated through the community, its founders took to Twitter to explain the events from the following previous days. First, they claimed the project's legitimacy and explained that the reason for the flight was nothing more than an attempt at protecting their safety. But, according to them, several overwhelming and concerning complaints regarding some of the Blockverse's elements - gas fee prices for the NFT acquisition, lack of player capacity at 10,000 users, and lack of utility in the $DIAMOND tokens that only served as an access license.

"The FUD [fear, uncertainty, and doubt] quickly descended into harassment, threats, and doxxing," the creators wrote on Twitter. "The team noticed all this and panicked, deleting the discord server on impulse. Everything else was closed to prevent the continuation of harassment that had occurred so far. Even then, the plan was to reopen once everyone had time to calm down."

"There is absolutely no reason for us to leave permanently, as all the technical work and infrastructure for the project thus far has already been put in place. It was more work to take things down than to leave it up, but again, everything was done in the interest of protecting personal safety."

Despite this relative show of face (the project website is still down, for example), investors appear to be on the edge regarding the legitimacy and intentions of the project's founders. However, many have lost confidence in the project's founders. As a result, a group of community members is now negotiating that the original Blockverse developers cede control of the project. Interestingly, Blockverse's founders have sat at this bargaining table and agreed to hand over all relevant contracts and code while keeping the 500 ETH raised by the initial token sale - essentially paying themselves around $1 million for the initial development work. Blockverse has also apparently made a similar proposal to ArkDev, the founder of blockchain gaming platform NFT Worlds, although there's no public information of where that offer stands.

Even more surprisingly, the troubled project community members seem to be willing to cut their losses by settling with the founders. They're eager to let them keep 100 ETH (worth approximately $250,000 at current market prices) for the project's data while using the remaining funds to hire a development team. 

"What we really want are the assets and 200-400ETH to hire people to run the project," they said. "Most rug pulls recover little of anything, so the community is realistic in terms of a settlement. We are in agreement to letting them keep some. We just want enough to run the project."

According to a new report, cryptocurrency-related scams weighed in at $7.7 billion in 2022. This might have been the year cryptocurrency officially went mainstream: Coinbase was listed on the Nasdaq stock exchange, non-fungible tokens (NFTs) became nigh-ubiquitous, and Bitcoin was made legal tender in El Salvador. But a Chainalysis report showed that Wall Street, crypto enthusiasts, and El Salvador's government weren't the only groups to benefit in 2021. So did cryptocurrency scammers.

The company published a preview of its 2022 Crypto Crime Report on Thursday focused specifically on cryptocurrency-related scams throughout 2021. Chainalysis said in the preview report that scammers made off with a record $7.7 billion worth of cryptocurrency this year—which means that "scams were once again the largest form of cryptocurrency-based crime by transaction volume" in 2021.

"As the largest form of cryptocurrency-based crime and one uniquely targeted toward new users," Chainalysis said, "scamming poses one of the biggest threats to cryptocurrency's continued adoption."

The company said the $7.7 billion worth of cryptocurrency stolen by scammers in 2021 was an 81 percent increase over the amount stolen in 2020. That's because in 2020, "scamming activity dropped significantly compared to 2019, in large part due to the absence of any large-scale Ponzi schemes," Chainalysis said. (Although some have argued that cryptocurrency is by its very nature a Ponzi scheme unto itself.)

That's where Finiko came in.

"Finiko was a Russia-based Ponzi scheme that operated from December 2019 until July 2021," Chainalysis said, "at which point it collapsed after users found they could no longer withdraw funds from their accounts with the company. Finiko invited users to invest with either Bitcoin or Tether, promising monthly returns of up to 30%, and eventually launched its own coin that traded on several exchanges."

The scheme was successful: Chainalysis said that Finiko "received over $1.5 billion worth of Bitcoin in over 800,000 separate deposits" from December 2019 to July 2021. It also noted that at least some of that $1.5 billion was paid out to keep the scheme running, of course, but said that Finiko "represents a massive fraud perpetrated against Eastern European cryptocurrency users" nonetheless.

Despite its scale, Finiko seemed like a fairly typical cryptocurrency scam, especially regarding how it moved the grifted funds. Chainalysis said the vast majority of scammers cashed out using mainstream cryptocurrency exchanges; a very small amount of the ill-gotten gains tracked by the company were used to make illicit purchases, sent to decentralized finance (DeFi) platforms, or managed in other ways.

But even the Finiko scheme didn't account for the enormous increase in cryptocurrency stolen by scammers in 2021. Chainalysis said that increase actually resulted from "rug pulls," which the company said, "emerged as the go-to scam of the DeFi ecosystem, accounting for 37% of all cryptocurrency scam revenue in 2021, versus just 1% in 2020." Without that bump, the amount stolen would've stayed flat.

And what exactly is a rug pull? "The definition of 'rug pull' isn't set in stone," Chainalysis said, "but we generally use it to refer to cases in which developers build out what appear to be legitimate cryptocurrency projects — meaning they do more than simply set up wallets to receive cryptocurrency for, say, fraudulent investing opportunities — before taking investors' money and disappearing."

The company said, "rug pulls are prevalent in DeFi because, with the right technical know-how, it’s cheap and easy to create new tokens on the Ethereum blockchain or others and get them listed on decentralized exchanges (DEXes) without a code audit." Those audits would typically detect the ability to indiscriminately drain funds from the liquidity pool, which is exactly what the scammers eventually do.

Rug pulls aren't exclusive to DeFi platforms. Chainalysis said the founder of Thodex, a Turkish cryptocurrency exchange, making off with $2 billion worth of crypto stolen from more than 300,000 users represented 90 percent of the amount stolen by this kind of scam. "However, all the other rug pulls in 2021 began as DeFi projects," it said. So it seems DeFi scams are far more prevalent but also much less profitable.

All of this means that the $600 million (briefly) stolen from Poly Network, the $150 million stolen from BitMart, and the $100 million stolen from VulcanForged pales in comparison to the amount of cryptocurrency lost to scammers in 2021. Crypto heists make for good stories, but when it comes to cryptocurrency-related crimes, the Chainalysis report showed traditional scams and rug pulls are where the money is.

Coinbase and CoinMarketCap both made crypto enthusiasts trillionaires—at least in theory—on Tuesday due to glitches in how cryptocurrency prices are displayed. The Block reported that CoinMarketCap priced Bitcoin at "an absurd $789 billion," for example, and MarketWatch reported that it put the price of Shiba Inu at $22,026 rather than the $0.000034 the crypto market tracker should have been showing.

CoinMarketCap acknowledged the issue with the following tweet:

But the company also poked fun at the incident by tweeting memes, asking if a capture of its website showing an incorrect price for Shiba Inu was "a screenshot from 2035," and posing this question to everyone who thought they'd made it big:

Not everyone appreciated CoinMarketCap's response to the error, but the company doesn't seem to be taking those complaints particularly seriously either, because it's responding to them with a variety of meme GIFs and videos as well.

All told, CoinMarketCap's status website claimed the erroneous prices were displayed for about an hour. It also said the service was "experiencing issues with API payments" at the time of writing, which could be related to the pricing errors.

Coinbase users also tweeted screenshots of the company's website showing Bitcoin's price above $867 billion on Tuesday. Others have shared images of the company showing extraordinarily high prices for XRP, Shiba Inu, and other coins.

Coinbase's response was a bit more professional than CoinMarketCap's:

The company later said that customers were having trouble accessing its service and that it was "continuing to investigate delays with some transactions," but those issues appear to have been resolved fairly soon after they were discovered.

These could seem like a relatively harmless error, but The Block reported that a decentralized finance (DeFi) protocol called DeFi Chain had to halt transactions because it relied on the CoinMarketCap API for its price data.

That reliance on CoinMarketCap's API—as well as Amazon Web Service's recent outage bringing down a "decentralized exchange" called dYdX—have raised questions about how exactly these platforms are decentralized.

CoinMarketCap's errant pricing data could also have influenced trading bots using its API, so although the company is making plenty of jokes about the error, it could have resulted in people spending actual money on digital currency due to fake price data.

Crypto often feels like the financial equivalent to "Whose Line Is It Anyway?"—the show where host Drew Carey always said "the rules are made up and the points don't matter"—but that's never been more true than it was on Tuesday.

Someone's been playing the long game. The Independent reported that a Bitcoin wallet last used in May 2010—when the cryptocurrency's pseudonymous creator, Satoshi Nakamoto, was still active in the community—has come back online.

That wallet is said to contain 50 BTC. When it went dormant, those coins were worth less than $4, according to The Independent. Now they're worth roughly $3,130,250. (Based on the $62,605 per-coin price of BTC shared by Coinbase at time of writing.)

It's not clear what prompted the wallet's activity more than 11 years after it went dormant. Maybe it's because the price of Bitcoin has risen by a million percent in that time; perhaps it's because the owner just remembered the wallet's access key.

Either way, the cryptocurrency has changed a lot since the last time this wallet was used. Back then, Bitcoin was something people could mine on their PCs in exchange for 50 BTC a block, which sounds fantastic, except it was also worth basically nothing.

Now mining the cryptocurrency requires incredibly powerful equipment designed specifically for the task, and the block reward is just 6.25 BTC. But Bitcoin is worth tens of thousands of dollars and can be used to buy things other than alpaca socks.

The Independent said that "sleeping whale" wallets—which contain a large amount of BTC and have been inactive for years—collectively hold "several million" BTC. For example, one wallet contains nearly 80,000 bitcoins worth more than $5 billion at current prices.

At least some of that wealth will probably remain dormant because their owners forgot the access keys or, to put it delicately, aren't here to cash in on Bitcoin's price increases. But the activity of this wallet (and two other sleeping whales that have awoken recently) shows at least some of that BTC will be recovered.

ETH's price rose above $4,400 this morning as the Shiba Inu cryptocurrency, which is also based on the Ethereum blockchain, enjoyed a massive surge in popularity.

Coinbase puts the price of ETH at $4,429 at the time of writing. That's a month-over-month increase of approximately 58 percent, and according to CoinDesk, it's at least partly because Ethereum burned more tokens than it emitted in the last 24 hours.

Enter Shiba Inu. It's a memecoin that uses the same mascot as Dogecoin—which has also experienced a significant increase in price and popularity—and is based on Ethereum. Coinbase data currently puts Shiba Inu's price at $0.00007170.

Don't let the number of zeroes following that decimal point fool you: Shiba Inu is massive. Its price has risen by about 930 percent month-over-month (93,062,286.75 percent year-over-year) and it currently has a $39.9 billion market cap.

What does that have to do with the price of ETH? Well, CoinDesk cited Tokenview data showing that "Ethereum produced 15,109.34 ETH and burned 16,710.2 ETH in the past 24 hours," which means the net supply of ETH fell by about 1,600.

ETH's scarcity, Bitcoin's recent price increases, and an optimistic crypto market all pushed the price of ETH to a record high. Shiba Inu was the third-largest contributor to ETH's burn rate, CoinDesk said, so it can take some credit for this bump. Ruff.

Bitcoin set a new record price this morning by rising above $66,000 per BTC. Coinbase put Bitcoin's price at $66,102 at the time of writing; CoinDesk had it at $66,444. Both price trackers say that's a roughly 7 percent increase—7.19 for Coinbase and 7.53 for CoinDesk—to the cryptocurrency's value over the previous 24 hours.

CoinDesk reported that BTC's rising price likely had something to do with ProShares introducing the first Bitcoin-linked exchange-traded fund (ETF) to receive the U.S. Securities and Exchange Commission's approval to the New York Stock Exchange.

The ProShares Bitcoin Strategy ETF trades on the NYSE under the BITO symbol. Yahoo Finance data shows that its price has risen approximately 9.3 percent at the time of writing; Bitcoin appears to be enjoying the benefits of that favorable debut.

This latest increase means it's no longer fair to compare Bitcoin's price fluctuations throughout 2021 to a roller coaster. Instead, that implies BTC climbed a steep hill, took a massive drop, and then rose again without quite reaching that first peak.

The pieces were all there before: Bitcoin peaked at roughly $64,000 in May before dropping below $30,000 just a month later due to China's ban on mining crypto, among other factors, and then it slowly recovered throughout the summer.

But now BTC pricing has set a new peak, well, the roller coaster analogy no longer works. Perhaps at this point, it would be more accurate to compare Bitcoin's pricing to a trampoline—a massive fall just adds momentum to the inevitable bounce back.

So much for China's ban causing problems for Bitcoin, huh?

It's been 150 days since provinces throughout China started to ban cryptocurrency mining. That crackdown was expected to cause problems for Bitcoin, given that Chinese mining operations contributed more to its hash rate than miners in any other country. However, Cointelegraph argued that BTC actually thrived following the ban.

Perhaps the most important part of Cointelegraph's argument is that BTC's value has risen since China's ban. That wasn't always true—the price of Bitcoin dropped from about $64,000 in May to less than $30,000 in June. It's rebounded in the months since, though, with Coinbase putting its price at roughly $62,500 at the time of writing.

There have been other signs that the loss of Chinese mining operations wouldn't be as bad for Bitcoin as originally expected. The hash rate has recovered faster than many thought it would, for example, and miners have moved their rigs to other countries so they can keep their operations going despite the ban in their homeland.

Companies have also pushed to deploy large-scale Bitcoin mining operations in the last few months. Setting up mining equipment in power plants has become a trend, for example, as has establishing operations that rely on renewable energy sources so they can deflect some of the criticism regarding Bitcoin's environmental impact.

Cointelegraph also noted that losing China—with the exception of illegal mining operations that are currently being hunted down—helped decentralize Bitcoin. The U.S. accounts for about one-third of the hash rate now, per the Cambridge Centre for Alternative Finance, but that pales in comparison to China's peak of 75 percent.

That probably means further regulatory actions will have even less of an impact than China's ban. Lawmakers around the world can target the cryptocurrency for its role in enabling the proliferation of ransomware all they want, but China has shown us that it may all be for naught.

El Salvador became the first country to declare Bitcoin legal tender on Tuesday. It might not take long for other countries to follow suit, because on Wednesday Panamanian congressman Gabriel Silva introduced a bill with similar intentions.

Everything about Silva's announcement was digital native: The crypto-focused bill was revealed in a tweet with an embedded video of the Panamanian congressman expressing his enthusiasm for the proposal, along with a shortened link to a PDF containing the bill's text stored on Google Drive. Welcome to modern politics.

Silva's bill is actually more expansive than El Salvador's so-called Bitcoin Law. His proposal would see Panama declare multiple cryptocurrencies, including but not limited to Bitcoin and Ethereum, as legal tender. It would also explore the use of blockchain technology for other purposes, such as handling identification services.

It remains to be seen if the precedent set by El Salvador will help or hinder Silva's efforts. El Salvador's rollout didn't go well: BBC reported that Apple and Huawei didn't offer the Chivo digital wallet at the start, which limited its reach, yet its servers had to be taken down after they failed to keep up with user registration attempts.

Bitcoin's value also plummeted shortly after El Salvador declared the cryptocurrency legal tender. Coinbase data puts the price of BTC at roughly $52,944 at 11pm ET on September 6; less than 24 hours later it had dropped to approximately $42,830. That's a big loss for a country that purchased 400 BTC on September 6.

Now we'll see how that influences Silva's efforts to have Panama fully embrace Bitcoin and Ethereum. The bill is certainly more permissive than similar crypto-related legislation introduced recently: CNBC reported that Cuba, the U.S., Germany, and Ukraine have all taken (much smaller) steps to allow official cryptocurrency usage.

Coinbase CEO Brian Armstrong accused the U.S. Securities and Exchange Commission of "engaging in intimidation tactics behind closed doors" on Twitter after it blocked the launch of the company's Lend program without explanation.

Lend is supposed to provide a platform through which USD Coin owners can, well, lend their cryptocurrency to other people in exchange for a 4 percent Annual Percentage Yield (APY). Coinbase would guarantee the principal on any loans and ensure the lent USD Coin is only going to "verified borrowers" in most of the U.S.

Armstrong said yesterday that Coinbase was "planning to go live in a few weeks," so the company "reached out to the SEC to give them a friendly heads up and briefing." (Which seems like an odd way to characterize notifying a regulator about a new product, but it shows that Coinbase believed the process would be quick, at least.)

But it seems the exchange wasn't friendly for long:

Armstrong said this wasn't the first time Coinbase was snubbed by the SEC. He said he met with "members of Congress and heads of various federal agencies" shortly after the company went public in April, but "the SEC was the only regulator that refused to meet with me, saying 'we're not meeting with any crypto companies'."

That comes as a surprise given the SEC's increasing activity in the crypto scene. The commission has recently targeted fake cryptocurrency trading bots, settled complaints about companies violating financial regulations, and published guidance for investors in an effort to protect them from falling prey to crypto-related scams.

Coinbase also published a blog post attributed to Paul Grewal, its chief legal officer, explaining that the SEC threatened to sue the company if Lend goes live. "The net result of all this is that we will not be launching Lend until at least October," Grewal said, but that might change as the back-and-forth over the program continues.

The SEC filing a lawsuit might not actually be the worst outcome. "If we end up in court we may finally get the regulatory clarity the SEC refuses to provide," Armstrong said. "But regulation by litigation should be the last resort for the SEC, not the first."

El Salvador today became the first country to accept Bitcoin as legal tender, which means it can be used for everything from purchasing goods to paying taxes. And it bought 400 BTC yesterday to help its citizens get started with the cryptocurrency.

El Salvador President Nayib Bukele announced on Monday that his government had purchased 200 BTC ahead of the so-called Bitcoin Law going into effect. Less than four hours later he announced the government's purchase of another 200 BTC.

The value of BTC fluctuated between those announcements, but Coinbase data puts it around $52,000 per coin, which means El Salvador spent approximately $20.8 million on Bitcoin in the hours leading up to its plan to formally adopt the cryptocurrency.

Bitcoin's value enjoyed a slight hike after the news—Coinbase data shows it peaking at $52,945 shortly before El Salvador's Bitcoin Law went into effect. But the cryptocurrency's price has dropped to roughly $50,860 at the time of writing.

Bukele announced in June that El Salvador's government would give $30 worth of BTC to citizens who use the new Chivo wallet (which was criticized for its reliance on facial recognition software) to kick-start mass adoption of the cryptocurrency.

He also said the country would use its volcanoes to mine Bitcoin without raising concerns about the environmental impact because just one volcanic well could provide "approximately 95MW of 100% clean, 0 emissions geothermal energy.”

So begins the grand experiment. El Salvador is now the first country to consider a  cryptocurrency—not a central bank digital currency—legal tender. Now the world will watch to see what that means for the country and for Bitcoin.

Ethereum miners are watching their Ether go up in smoke—just like the network intended. Bitcoin News reported that changes introduced by the London hard fork have resulted in more than $12,000 worth of ETH being destroyed every minute.

The report cited a Dune Analytics dashboard called "Ethereum after 1559" that is tracking the amount of Ether burned after London went live on August 5. Bitcoin News said on August 22 that 73,784 ETH—approximately $230 million at that day's exchange rates—was burned in the 17 days after the hard fork's introduction.

Those numbers have grown in the days since. The dashboard now indicates that 83,873 ETH has been burned to date. Coinbase puts the price of Ether at roughly $3,309 at time of writing, which means about $277,535,757 worth of the cryptocurrency has been destroyed as a result of the London hard fork.

This is all working as planned. One of the changes that debuted with London was Ethereum Improvement Proposal (EIP) 1559. That proposal introduced a base fee that's algorithmically determined for each transaction on the network, and instead of giving that fee to Ethereum miners, the network destroys the associated Ether.

EIP 1559's authors explained that "ensuring the miner of a block does not receive the base fee is important because it removes miner incentive to manipulate the fee in order to extract more fees from users." The proposal was also designed to protect ETH, fight inflation, and reduce the "risks associated with miner extractable value."

Miners still receive the block reward, and transactions can include a supplemental fee that serves as a gratuity, but EIP 1559's changes mean the Ethereum network is effectively burning more than $12,000 worth of ETH every single minute just to prevent miners from profiting so much off transactions conducted on the platform.

Other changes introduced with the London hard fork also served as a stark reminder that Ethereum plans to shift from its proof-of-work model to proof-of-stake, which would effectively obviate miners. The market responded favorably to that shift; Coinbase data shows Ether's price has rebounded from $2,153 on July 24.

CoinMarketCap data today revealed that Bitcoin’s recent price surge has allowed the overall crypto market cap to rise above $2 trillion for the first time in three months.

The crypto market surpassed the $2 trillion milestone in April because the prices of Bitcoin, Ethereum, and other cryptocurrencies rose ahead of the Coinbase exchange’s initial public offering. Bitcoin alone contributed $1 trillion to the crypto market cap at the time.

Then in May the U.S. considered a capital gains tax increase and the Chinese government cracked down on cryptocurrency mining operations. Those obstacles led Bitcoin’s price to drop from an all-time high of $64,000 to less than $30,000. The crypto market cap tumbled with it.

But the price of Bitcoin has rebounded recently, with CoinDesk data putting it at $46,300 at time of writing. That’s below the $53,000 minimum Reuters said it needed to maintain its $1 trillion market cap, but still enough to push the rest of the crypto market above that $2 trillion mark.

Bitcoin’s had some assistance from Ethereum, of course, which has aslo partially recovered from its own price drops. That’s probably at least partly because of Bitcoin’s own resurgence, but a recent hard fork that brought Ethereum closer to a proof-of-stake model has also helped.

The crypto market still has its share of obstacles, not least among them being the U.S. government’s recent indecisiveness regarding how digital assets should be regulated and how Bitcoin mining is going to recover following the loss of Chinese mining operations.

Still, passing the $2 trillion milestone means the crypto market doesn’t have to worry about living in a shadow of its former glory. Or at least it won't have to if the recovery continues. Technically it peaked at roughly $2.5 trillion in May, per CoinMarketCap, so it has another half a trillion dollars to go before it hits its previous peak.

Intel revealed in a filing with the U.S. Securities and Exchange Commission that it has a stake in Coinbase, the cryptocurrency exchange operator that went public in April.

The company said it owns 3,014 Class A shares of Coinbase, with a total value of approximately $763,000. This disclosure only applies to a reporting period that ended on June 30, however, so Intel's stake in Coinbase may have changed by now.

Barron's noted that Intel didn't make a similar disclosure at the end of the first quarter, so either it owned less than a 5 percent stake in Coinbase before the initial public offering, or it purchased the shares after they were made publicly available.

Coinbase's listing on the Nasdaq stock exchange helped push the price of Bitcoin to an all-time high of roughly $64,000, as crypto enthusiasts and institutional investors celebrated the latest sign that digital assets were becoming more mainstream.

Yahoo Finance data showed Coinbase's share price reaching about $430 the day it went public, but its value dropped shortly after, and it's currently trading at roughly $254. But Intel could still enjoy a return on its investment. Its 3,014 shares are currently worth $767,063; that's $4,063 more than the value cited in its SEC filing.

But that probably isn't the point. Coinbase was among three companies included in that filing, which suggests Intel sees its potential, even if the market isn't hyping up the cryptocurrency exchange as much as it did when Bitcoin was at its peak.

Not that Intel's been shy about its interest in cryptocurrency. The company has been granted patents related to Bitcoin mining, for example, and it joined the Enterprise Ethereum Alliance to work on digital currency with other leading companies.

Amazon has denied a report that claimed it would start accepting Bitcoin payments soon, and in the process, it might have slowed the cryptocurrency's rebound.

UK newspaper City A.M. reported Monday that Amazon planned to accept Bitcoin payments "by the end of the year." The report's anonymous source also said "Ethereum, Cardano and Bitcoin Cash will be next in line before they bring about eight of the most popular cryptocurrencies online" and that Amazon would have its own token ready by 2022.

The report coincided with rapid increases to the prices of Bitcoin, Ethereum, and other cryptocurrencies. Bitcoin had previously struggled to maintain a $30,000 per-coin price, for example, but Coinbase data shows it peaked at $40,593 on Monday. City A.M.'s report could have contributed to that rise, but the fantasy was short-lived.

"Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true," a company spokesperson said in a statement to Reuters, CoinDesk, and other publications. "We remain focused on exploring what this could look like for customers shopping on Amazon."

Bitcoin's price dropped after that statement was released: It dropped as low as $36,413 before reaching $38,330 at time of writing, according to Coinbase's data. The cryptocurrency's value is still up approximately 24% week-over-week, and the drop was likely related to other factors as well, but the recovery definitely slowed.

Amazon's statement doesn't preclude the possibility of accepting cryptocurrency payments in the future, however, or of introducing its own token. The company didn't jump off the crypto hype train; it just stopped adding more coal to the engine.

CoinDesk reported that U.S. Federal Reserve chair Jerome Powell said Wednesday that his agency plans to publish a report exploring central bank digital currencies (CBDCs), stablecoins,and cryptocurrencies writ large sometime in September.

The Federal Reserve says CBDC "is a generic term for a third version of currency that could use an electronic record or digital token to represent the digital form of a nation's currency" that would be managed by the central bank and "could be used for a variety of purposes by individuals, businesses, and financial institutions."

Most cryptocurrencies are similar to stocks in that their value can drastically change based on the market's whims. The price of Bitcoin reached an all-time high in April, for example, because the Coinbase trading platform was preparing to go public. Then its value was halved after China decided to shut down cryptocurrency miners.

Stablecoins attempt to avoid that issue by connecting their value to another asset. CBDCs effectively do the same thing, but instead of being issued by a private organization, they're managed by a government's central banking system - which is exactly why the Federal Reserve is looking into both.

“I think the issue is that stablecoins are a lot like money market funds or bank deposits or a narrow bank,” Powell told the U.S. House Committee on Financial Services, according to CoinDesk. He also said that "you wouldn't need stablecoins" if "you had a digital U.S. currency" that could serve a similar function.

The Federal Reserve branch in Boston told CoinDesk that it's still on track to publish the report in question in the third quarter of 2021. In the meantime the World Bank, the Bank for International Settlements, and the International Monetary Fund all published a report in favor of CBDCs to the G20 on July 9.

China’s move to shut down cryptocurrency mining operations is having a profound effect on the crypto market. CoinDesk today reported that Bitcoin’s price fell below $30,000 for the first time since January as its value dropped by around 10% in 24 hours. Other cryptocurrencies followed suit.

This decline has all but undone the massive gains Bitcoin enjoyed for much of the year. Its per-coin price rose above $44,000 in February when Tesla acquired $1.5 billion worth of the cryptocurrency, and it established a new record high price of $64,000 after Coinbase was listed on the Nasdaq stock exchange on April 13.

That valuation didn’t last long—the price fell to roughly $47,000 just 10 days later as President Joe Biden considered new capital gains taxes. At the time of writing, the cryptocurrency is priced at about $29,700 per coin, according to the CoinDesk price index, which means it has lost more than half its value in just two months.

This drop has mostly been attributed to China’s new (or newly enforced) restrictions on cryptocurrencies. Mining operations throughout the country were shut down over the weekend, and on Monday, the People’s Bank of China forbid banks within the country from handling most transactions involving cryptocurrencies.

China was responsible for most of the world’s cryptocurrency mining; losing that production was bound to have an impact on the crypto market. It’s not just Bitcoin—the price of Ethereum has fallen more than 10% in the last 24 hours, too, and lesser-known cryptocurrencies have seen their values drop alongside those leading coins.

The crypto market isn’t the only one affected by these falling prices: Reports indicate that graphics cards prices have fallen as much as 45% in China as a result of the crackdown on cryptocurrency mining operations. Graphics card pricing has fallen in Europe, too, so there might finally be some (real-time ray traced) light at the end of the tunnel for enthusiasts who’ve been hoping to upgrade their systems with one of the best graphics cards. Fingers crossed!

Bitcoin is falling back to earth. This morning, the cryptocurrency's price was nearly 25% lower than the all-time high set a few weeks ago, and reports that U.S. President Joe Biden plans to nearly double the capital gains tax might be partly responsible.

The cryptocurrency's value peaked at nearly $65,000 per coin on April 13 as the Coinbase trading platform prepared to go public. Its per-coin price fell as low as $47,467 this morning, according to Coindesk, before starting to rebound.

It's possible that Bitcoin's value would have fallen even without the Bloomberg report Thursday afternoon on President Biden's planned increase to the capital gains tax. The crypto market is fickle, and not even Bitcoin's price can be expected to rise forever.

Other cryptocurrencies have also declined in value today. Coindesk's data puts Ethereum's price down 10.5% in the last 24 hours, and it's fared better than other coins, some of which have seen their prices fall by as much as 24% at time of writing.

Even the beloved Dogecoin, returns for which rose 6,000% year-over-year just last week, has seen its per-coin price fall by roughly 20%. But at least Dogecoin is a meme rather than the cornerstone of an entire industry.

Does this mean the crypto boom is over? Probably not. The market isn't known for its stability, and efforts to capitalize on it will continue, despite these falling prices. And, of course, we doubt it'll be easier to find the best graphics cards today than it was yesterday.

But at least enthusiasts who missed out on the Bitcoin craze will be able to watch the cryptocurrency's price fall for a while instead of climbing up, up, up like it was before. 

According to Reuters the price of Bitcoin reached an all-time high today as Coinbase, a platform for buying and selling cryptocurrency, prepared for its initial public offering. The company is set to be listed on the Nasdaq stock exchange today under the “COIN” ticker symbol.

Coinbase said in the IPO announcement that it‘s “building the cryptoeconomy—a more fair, accessible, efficient, and transparent financial system enabled by crypto.” Time will tell if it will ever realize that goal. As for the company’s effect on Bitcoin’s value, well, that became obvious in the hours leading up to its listing on Nasdaq.

Bitcoin’s price reached $63,191 today, according to Coindesk, which said that is the cryptocurrency’s all-time highest value. It previously peaked at $60,743 per coin in  March before the price started to fluctuate between around $55,000 and $59,000.

Those prices make Bitcoin the most significant cryptocurrency by far in terms of market cap. The crypto market writ large had a market cap of $2 trillion earlier this month; Bitcoin represented over $1 trillion of that figure by itself. This new $63,191 peak is well above the $42,000 per coin price needed to maintain that milestone.

Leading the crypto market also means that what’s good for Bitcoin can be good for other cryptocurrencies. Coindesk’s figures indicate that Ethereum’s price has risen fairly steadily throughout the week to a current per-coin value of $2,220 despite a drop earlier in the month. Those increases could be related to Bitcoin’s rise.

That isn’t necessarily good news for enthusiasts looking for the best graphics cards, because Ethereum miners are making it even harder to find recent GPUs in stock amid the global chip shortage, but early cryptocurrency adopters might be able to cash in on Coinbase’s efforts to normalize crypto in the mainstream market.

The silver lining: Bitcoin mining is far more resource-intensive than Ethereum mining. An industrial miner recently purchased $30 million worth of Nvidia’s  Cryptocurrency Mining Processor (CMP) offerings. Anyone serious about mining Bitcoin isn’t going to be competing with enthusiasts over a single graphics card.

The Office of the New York State Attorney General (OAG) released a report on the integrity of cryptocurrency exchanges on September 18. However, a professional League of Legends player, Team Liquid's Yiliang "Doublelift" Peng, had already offered the perfect example of the dangers of relying on these exchanges a few days prior. How? By having roughly $200,000 stolen by someone who gained access to his Coinbase account--and therefore his bank account--after compromising the T-Mobile phone number he used for two-factor authentication.

Doublelift recounted the story on September 14 but said it actually happened several weeks ago. According to the gamer, his phone had been acting strange before the attack, but after contacting T-Mobile, he thought it was just the result of a weird glitch. Now, he believes someone was conducting a port-out scam to gain access to his phone number. Once that happened, the attacker could bypass the two-factor authentication to access his Coinbase account. From there, the hacker emptied Doublelift's virtual wallet--and his actual one, too, because his bank account was connected to Coinbase.

Doublelift expects his finances to be restored after his bank determines that it was fraud and that he didn't, in fact, overdraft on Coinbase transactions. But apparently Coinbase has no intention of reimbursing him for the stolen cryptocurrency (he didn't say how much of the $200,000 was in cryptocurrency and how much was in USD).

"Coinbase says, 'You're sh** out of luck, dude. You can't get any of it back ... it's irreversible," Doublelift said.

We've reached out to Coinbase to learn more about its policies regarding theft and will update this piece if it responds.

Interestingly, this is exactly what the OAG warned about in its report.

"Customers of virtual asset trading platforms face significant risks. In recent years, hackers have infiltrated trading platforms and stolen billions of dollars' worth of virtual currency, leaving customers with little or no recourse. Delays and outages on trading platforms are common, leaving customers unable to withdraw funds and susceptible to significant losses given volatile prices. Public reports have also linked certain trading platforms to deceptive and predatory practices, market manipulation and insider abuses ...," the report says.

"Protections for customer funds are often limited or illusory. Generally accepted methods for auditing virtual assets do not exist, and trading platforms lack a consistent and transparent approach to independently auditing the virtual currency purportedly in their possession; several do not claim to do any independent auditing of their virtual currency holdings at all. That makes it difficult or impossible to confirm whether platforms are responsibly holding their customers' virtual assets as claimed. Customers are highly exposed in the event of a hack or unauthorized withdrawal."

The report was published as a result of the OAG's Virtual Markets Integrity Initiative, which was announced in April and based on information provided voluntarily by nine cryptocurrency exchanges, including Coinbase. Much of the report confirms what many who have followed cryptocurrency for any length of time already knew: that it's hard to judge an exchange based on the limited information available to their customers, that there are few protections against market manipulation and that security has to be taken on faith.

Those warnings are likely to fall on deaf ears when they reach cryptocurrency enthusiasts. The potential upside of getting in early on the next Bitcoin or Ethereum--which basically ruined the graphics card market for several months until prices finally started to drop--is too high. The OAG's hope is to convince people who only became interested in cryptocurrency after Ethereum's rise was so well-publicized, the creation of new cryptocurrencies became commonplace and exchanges started hawking their services to anyone looking to dabble with the new money.

A California federal court ordered Coinbase, one of the largest and most popular cryptocurrency exchanges in the U.S., to release the data on 14,355 clients to the IRS. The IRS initially asked Coinbase to release the data on all of its customers, but Coinbase fought to limit the request.

Centralized Cryptocurrency Exchanges

Because they are peer-to-peer technologies, Bitcoin and most other cryptocurrencies don’t need a centralized exchange service such as Coinbase to enable the transfer of money from one user to another or from one user to a service. In fact, one of the primary reasons why Bitcoin was created was to have a peer-to-peer electronic money system that isn’t controlled by centralized institutions (with all the pros and cons such a system might entail).

However, back in the real world, there’s a small wrinkle in this plan. In order to get Bitcoins or any other cryptocurrency, you first have to exchange it from fiat currency, such as dollars, and the easiest way to get cryptocurrency for dollars is to go through an exchange service.

Exchange services that trade dollars for cryptocurrencies are bound by “Know Your Customer” (KYC) and Anti-Money Laundering (AML) laws, which means their customers must provide real identities when they sign up. This makes it easy for governments to then go to one of these services and ask them for data on their customers whenever they suspect someone is committing tax evasion or some other financial crime.

However, privacy laws typically require the government to have reasonable suspicion that someone is committing said crime, and to also name the suspects. Otherwise, the government could go on a fishing expedition, analyze the data on millions of people’s transactions, and then find the “criminals.” Fishing expeditions are also unconstitutional in the U.S. as per the Fourth Amendment.

Decentralized exchange applications exist, but either they are in an early stage of development or they can’t reach critical mass in users as long as centralized exchanges continue to remain popular. Without that critical mass of users, it’s too difficult to find buyers or sellers for the cryptocurrency you would like to trade (low liquidity).

IRS Coming After Cryptocurrency Profits

Last year, the IRS issued an order to Coinbase to gain access to data regarding all of its almost half a million customers for the period between 2013 and 2015. The data on each person included the following pieces of information:

Account/wallet/vault registration records for each account/wallet/vault owned or controlled by the user during the period stated above including, but not limited to, complete user profile, history of changes to user profile from account inception, complete user preferences, complete user security settings and history (including confirmed devices and account activity), complete user payment methods, and any other information related to the funding sources for the account/wallet/vault, regardless of date.Any other records of Know-Your-Customer due diligence performed with respect to the user not included in paragraph 1, above.

Coinbase hit back at the time, saying that it’s “extremely concerned with the indiscriminate breadth of the government’s request,” and the exchange promised to oppose the government’s request in court.

Coinbase Scores A Narrow Win

Coinbase was not successful in completely denying IRS’s request to gain access to thousands of users at once. Instead of having to get an order for every person the IRS suspects of tax evasion, the IRS will be able to get the data on anyone who has traded more than $20,000 between 2013 and 2015 in any single transaction. Then the IRS will be able to check to see which of those people didn’t properly file their taxes.

Of the almost 500,000 customers it had until 2015, Coinbase will have to reveal the data of 14,355 customers. Since 2015, Coinbase’s user base has grown more than tenfold (it currently has 6 million customers ), so the next time IRS comes back knocking at Coinbase’s door, Coinbase may have to give up the data of many more users.

Coinbase said it will continue to work with the IRS to create a reasonable tax reporting system that makes sense for both virtual currency service providers and consumers alike.

Bitcoin, the grandfather of the cryptocurrency market, continues to rise to unprecedented highs. The controversial digital currency platform is now valued at more than $5,000 per unit.

This has been a banner year for cryptocurrencies. Bitcoin and Ethereum, along with a handful of other less well-known cryptocurrencies, enjoyed meteoric rises in value. In just over a year, Bitcoin has risen nearly 1,000%, and Ethereum enjoyed similar gains over the course of the year.

The rapid rise in the value of these alt-coins spurred a ton of controversy this year. The days of mining Bitcoin with your GPU are long behind us, but Ethereum’s Ethash algorithm is well suited for GPU-based mining. When Ethereum’s value rose to triple digits, people started buying up GPUs by the truckload, which caused a worldwide shortage of graphics cards and prompted AMD to change its marketing strategy for Vega to avoid runaway pricing. 

Bitcoin also had its fair share of ups and downs, the most recent of which happened in early September. At the beginning of the month, Bitcoin seemed poised to break the $5,000 mark for the first time, but on September 14, BTC China, one of the largest cryptocurrency exchanges in the region, announced that it would shut down on September 30. The announcement kicked off a panic sell from people trying to get their money out before the exchange closed down, which caused the global value of Bitcoin to plummet. In a matter of hours, Bitcoin’s value tanked by more than $550, and it continued to drop for the remainder of the day. In the wee hours or September 15, Bitcoin was trading for as low as $3,072.

When we reported on the drop in September, we posited that sudden drops in value could pose a great opportunity for Bitcoin faithfuls, and sure enough, the following day, Bitcoin regained some of its market value. Now, it’s worth more than ever. For the first time, Bitcoin hit and promptly surpassed $5,000 value. Last night, the cryptocurrency was trading at roughly $4,850, but today it's upwards of $5,250.

The rapid increase in value is largely due to a major announcement from one of the most prominent US cryptocurrency exchanges. Early today, Coinbase announced that it is now able to accept money directly from US bank accounts to purchase Bitcoin, Ethereum, and Litecoin--up to $25,000 worth. Before this announcement, Coinbase could accept payments from credit cards only, and those purchases were subject to much lower limits and transaction delays.

Coinbase’s instant bank transaction system is now live, which explains the rapid increase in purchase volumes. It’s not much easier to invest in cryptocurrency, and it’s obvious the market is hungry for easier ways to buy into this new store of value.