Cryptogpt News, November 29: Crypto firms are the only ones struggling in this bear market.

As top coins tank, crypto bros are going underground — a far cry from the heady days of last year, when the champagne was flowing.

Revealed: What BlockFi Owes Lenders 😱

The bankruptcy filing shows the scale of the challenge facing BlockFi.

The company estimates it has more than 100,000 creditors on the books, and the three largest owe more than $1 billion.

One of the debtors is the U.S. Securities and Exchange Commission, which owes $30 million, the court document shows.

This is tied to a $100 million settlement it agreed to in February after failing to register offers and sales of its crypto-lending product.

Overall, the largest unsecured creditor is Ancora Trust Company, which acted as trustee for interest-bearing accounts offered by BlockFi. It owes $729 million.

In another development, the Financial Times is reporting that BlockFi is suing Sam Bankman Freud in an attempt to take over Robinhood’s stake.

It is claimed that this stock was pledged as collateral in the days before FTX collapsed – creating a contagion effect that has spread throughout the crypto sector.

Elon Musk Attacks Apple 😬

Of all the feuds Elon Musk has waged since taking control of Twitter, the most dangerous may be the one he’s now waged with Apple — accusing them of blocking Twitter from the App Store. threatening

After complaining that “why won’t they tell us,” Musk posted a series of tweets accusing Apple of censorship of other companies, including charging for anything purchased through an iPhone. Attacked the 30 percent going fee.

It all started an hour after he tweeted:

“Apple has mostly banned ads on Twitter. Do they hate free speech in America?”

It’s like threatening to “thermonuclear name and shame” companies that pull ads on November 4th – and threatening your customers is rarely a successful strategy – as global media agency Omnicom put it. Concerns grow about what he allegedly told his clients. “A serious threat to brand safety” over Musk’s promise to restore free speech.

Potential for large losses

Among the posts was a 2020 retweet of the ad game maker Fortnite, based on Apple’s famous “1984” commercial, after it was banned for evading a 30 percent fee. Its tagline is:

“Epic Games defies App Store monopoly. In retaliation, Apple is blocking Fortnite from a billion devices. Join the fight to stop 2020 from becoming 1984.”

Spoiler: Fortnite is still not available on the App Store. Except now, it’s not on 1.2 billion iPhones.

Can you access Twitter from iPhone without the app? Sure, but it won’t be as pretty or smooth.

And like Apple, Android’s Google Play Store has fairly strict “appropriate content” standards — and both ban everything from hate speech, harassment and bullying to pornography and advertising of firearms and alcohol. On both platforms, these rules are both very broad and very, very subjective, as Apple makes clear:

“We will reject apps for any content or behavior that we believe is excessive. What line, you ask? Well, as a Supreme Court justice once said. Was [what pornography is or isn’t], ‘I’ll know it when I see it.’ And we think you’ll know it too when you cross it.”

In a November 18 New York Times op-ed, Twitter’s outgoing head of trust and safety, Joel Roth, warned:

“Twitter will have to balance its new owner’s goals against the practical realities of life on Apple and Google’s Internet…”

Crypto Hopes

As Musk revealed his plans for Twitter 2.0 as a super app, crypto has plenty of skin in the game.

Starting in the obvious, Dogecoin jumped 25% in the past week as speculation grew that it would merge its beloved meme coin as a payments currency.

But beyond that, a huge part of the crypto industry’s conversation takes place on Twitter, and it’s where many influencers flex their muscles, debate ideas and, of course, sow FUD. Is.

Just look at some of the inside jokes tweeting about wrapped Ether (wETH) going bankrupt and losing your “peg” to Ether – which isn’t really how it works, like the ETH token. is only held in a publicly viewable smart contract. Out of control pranksters had to apologize.

Kraken goes lightly with sanctions penalties 💸

If you want to know why it’s better to ‘admit your mistakes’, you need look no further than Kraken, a regulated US cryptocurrency exchange that has allowed Iranian citizens to use its services. Has paid $362,000 in fines for violating tax restrictions.

Eight hundred and twenty six times.

Which sounds bad until you read the statement the US Treasury Department released on November 28 announcing the settlement. Especially:

“The statutory maximum civil monetary penalty applicable in this case is $272,228,964.”

Which means Kraken paid 0.133% of a fine that could have been north of a quarter of a billion dollars.

There are a few reasons why the fine was so low: Kraken self-reported the breach, the problem was a technical glitch that allowed the Iranians to learn about Kraken’s generally good customer controls, and The company agreed to spend another $100,000. To improve its compliance system.

Increasing restrictions

But it’s also notable because the Treasury Department’s Office of Foreign Assets Control (OFAC), which imposes and regulates sanctions, is currently keeping its eye firmly on crypto.

OFAC set a new precedent on Aug. 8, when it imposed restrictions on Tornado Cash, a crypto-mixing service designed to make it difficult, if not impossible, to track cryptocurrency transactions — in which case In, North Korean government hackers known as the Lazarus Group. to launder $455 million of the $620 million allegedly stolen from Axie Infinity’s Ronin bridge in March.

Among other things, this meant that anyone holding funds on Tornado Cash had to apply for a special OFAC license to legally repossess their assets — something that would require a transfer of personal data. A wide amount is required to be collected, as well as the wallet addresses of the sender and recipient, and the amount involved.

Which means exactly what users of the mixing service are trying to avoid – to protect their privacy according to supporters and either to launder money or avoid taxes according to critics.

Another crypto prankster pointed to another problem with smart contract-managed DeFi projects that sent small amounts of ether to a large number of high-profile crypto users with known wallet addresses — including talk show host Jimmy. Fallon, influencer Logan Paul and NFT artist Biple. others

Since crypto transaction recipients cannot technically refuse refunds sent to them, this puts them all technically in violation of the sanctions, which could lead to serious criminal charges. The Treasury Department said it would not “prioritize enforcement” against “dusting” recipients — but stopped short of saying no action would be taken.

Another U.S.-based cryptocurrency exchange, Coinbase, is supporting a lawsuit challenging the legality of the ban, which states that Tornado Cash is a decentralized financial project that does not rely on a person or business — a legal “person.” ” on – rather than software code. According to crypto industry group Coin Center and the Electronic Frontier Foundation (EFF), this is unprecedented and raises serious First Amendment issues, which focus on tech and the Internet. is a civil rights group.

However, Dutch authorities arrested Tornado Cash’s developer, Alexey Pertsev, in August on charges of facilitating money laundering – even though he had no control over Tornado Cash. The latest reports are that he will be kept at least until February.

Miami nightclubs face trouble in bear market

The bear market has led to a number of high-profile casualties among crypto businesses — but according to the Financial Times, they aren’t the only victims.

A new report shows that nightclubs in Miami have seen a marked drop in big spenders since the major cryptocurrencies fell in value, dragging NFTs down with them.

The FT spoke to one hotel group who said crypto entrepreneurs were prepared to blow $500,000 on an exclusive club hire for an evening – spending a “crazy” sum.

Andrea Vimercati said 95% were men and young people “with some kind of quirk” – and at first it didn’t seem like they were rich. Documenting the excesses seen in 2021, he said:

“They wanted to show that they didn’t have any limits. They were ordering 12 or 24 bottles of the most expensive champagne and just showering themselves without even drinking.”

Vimercati claimed that the crypto-brothers had now “completely disappeared” from the scene, gone in the blink of an eye.

Another club that now accepts crypto as a payment method said it processed $6 million in transactions last year, but that has dropped to just $10,000 in the past three months.

While some executives told the paper they believe crypto markets will bounce back — and demand for high-end clubbing — others believe it’s a flash in the pan that will never be repeated.

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