FTX’s Sam Bankman-Fried Is Arrested in the Bahamas

THE NEW YORK TIMES: A statement by the government of the Bahamas said Mr. Bankman-Fried was arrested after prosecutors in the United States filed criminal charges.

Sam Bankman-Fried in the Bahamas in April. | Erika P. Rodriguez for The New York Times
Sam Bankman-Fried, the disgraced founder of the collapsed cryptocurrency exchange FTX, was arrested in the Bahamas on Monday after U.S. prosecutors filed criminal charges.

“S.B.F.’s arrest followed receipt of formal notification from the United States that it has filed criminal charges against S.B.F. and is likely to request his extradition,” the government of the Bahamas said in a statement.

The arrest was the latest stunning development in one of the most dramatic falls from grace in recent corporate history. Mr. Bankman-Fried, 30, was scheduled to testify in Congress on Tuesday about the collapse of FTX, which was one of the most powerful firms in the emerging crypto industry until it imploded virtually overnight last month after a run on deposits exposed an $8 billion hole in its accounts.

Prosecutors for the Southern District of New York confirmed that Mr. Bankman-Fried had been charged and said an indictment would be unsealed on Tuesday. Separately, the Securities and Exchange Commission said in a statement that it had authorized charges “relating to Mr. Bankman-Fried’s violations of our securities laws.” » | David Yaffe-Bellany, William K. Rashbaum and Matthew Goldstein | Monday, December 12, 2022

EU Moves to Rein in ‘Wild West’ of Crypto Assets with New Rules

THE GUARDIAN: MiCA law contains measures to guard against market abuse and manipulation

Cryptocurrency prices have slumped recently, with the total value of the market falling from $3tn last year to less than $900bn. Photograph: Dado Ruvić/Reuters
The EU has moved to rein in the “wild west” of crypto assets by agreeing a groundbreaking set of rules for the sector.

Representatives from the European parliament and EU states thrashed out an agreement on Thursday that contains measures to guard against market abuse and manipulation, as well as requiring that crypto firms provide details of the environmental impact of their assets.

“Today, we put order in the wild west of crypto assets and set clear rules for a harmonised market,” said Stefan Berger, the German MEP who led negotiations on behalf of the parliament.

Referring to the recent slump in cryptocurrency prices – the total value of the market has fallen from $3tn (£2.5tn) last year to less than $900bn – Berger added: “The recent fall in the value of digital currencies shows us how highly risky and speculative they are and that it is fundamental to act.” » | Dan Milmo Global technology editor | Friday, July 1, 2022

Crypto Crisis: How Digital Currencies Went from Boom to Collapse

THE GUARDIAN: Savers talk of devastating losses as assets such as bitcoin and ‘stablecoins’ like terra fell sharply

Falling bitcoin illustration: Guardian Design
Yuri Popovich had watched his neighbours’ houses burn down to the ground in Kyiv and he needed a safe place to put his money. So he did what millions of amateur investors have done in recent years: he turned to cryptocurrency.

“It was impossible and unsafe to store funds in the form of banknotes. There was a big risk of theft, we also had cases of looting. Therefore, I trusted a ‘stable and reliable’ cryptocurrency. Not for the purpose of speculating, but simply to save,” he says.

The digital asset that Popovich chose in April was terra, a “stablecoin” whose value was supposed to be pegged to the dollar.

It collapsed in May, sparking a rout in the cryptocurrency market whose victims include Popovich. He lost $10,000 (£8,200).

Popovich says his losses were “devastating”, although donations from sympathetic onlookers on social media have helped make up some of the shortfall. He says: “I stopped sleeping normally, lost 4kg, I often have headaches and anxiety.”

Popovich is one of many experiencing the deep chill of the current crypto winter, more than four years after the market’s cornerstone, bitcoin, marked the first digital freeze by tumbling from its then peak. » | Alex Hern and Dan Milmo | Wednesday, June 29, 2022

Crypto Panic as Digital Assets Follow Share Prices in a Downward Spiral

THE OBSERVER: Last week bitcoin fell 31% and Celsius put a hold on withdrawals – and some fear the turmoil is far from over

Investors used to buy bitcoin as a hedge against inflation, but it has proved to be vulnerable to the wider economic downturn. Photograph: Jakub Porzycki/NurPhoto/REX/Shutterstock
The cryptocurrency market could do with some respite but its convention-breaking nature means there is no hiatus. Trading in digital assets such as bitcoin and ethereum runs 24/7, unlike their conventional peers in equities on the New York and London stock exchanges, which at least get the weekend off.

So one torrid week tends to run into another for this most cutting-edge of markets. Bitcoin – the cryptocurrency cornerstone – fell below the key level of $20,000 on Saturday morning, meaning it has dropped 34% in the past seven days, according to CoinGecko, which showed that ethereum, the other pillar of the market, had fallen 40% to $994 in the same period. There are fears bitcoin’s fall will trigger more sell-offs, leading to another tumultuous seven days for digital assets.

The entire crypto market fell below $1 trillion last week, a precipitous decline from its peak of $3tn in November last year. A number of factors drove the declines – a mix of crypto-specific events and wider macroeconomic issues – and some of them will continue to hang over the market this week as well. » | Dan Milmo, Global technology editor | Sunday, June 19, 2022

The Coin That Could Wreck Crypto

THE NEW YORK TIMES: As cryptocurrencies have plunged, attention has focused on a potential point of vulnerability: the market’s reliance on a so-called stablecoin called Tether.

SAN FRANCISCO — Cryptocurrency prices are plummeting. A so-called stablecoin lost all its value in a matter of days. A newfangled crypto bank halted withdrawals. And investors have been plunged into financial ruin.

Now the crypto industry is grappling with an even grimmer prospect: The worst may be yet to come.

Concern is mounting over another potential vulnerability in the crypto market: Tether, a company whose namesake currency is a linchpin of crypto trading worldwide. Long one of the most scrutinized companies in the industry, Tether is facing heightened pressure from regulators, investors, economists and growing legions of skeptics, who argue it could be another domino to fall in an even bigger crash.

“Tether is really the lifeblood of the crypto ecosystem,” said Hilary Allen, a finance expert at American University. “If it imploded, then the entire facade falls down.” » | David Yaffe-Bellany | Friday, June 17, 2022

The Crypto Crash Continues.

THE NEW YORK TIMES: Cryptocurrencies fell again on Wednesday, extending a rout that has dragged down digital currencies more steeply than many other markets. Bitcoin, the biggest cryptocurrency, traded at about $21,000 early on Wednesday, down 4 percent over the past 24 hours, 30 percent over the past week and 55 percent so far this year, according to CoinDesk.

Wall Street analysts have been keeping a close eye on cryptocurrencies to see if they might avoid the slowdown traditional assets have experienced. (The S&P 500 is in a bear market, down about 20 percent this year.) The pullback in the crypto market, however, illustrates the precariousness of the structure built around these risky and unregulated digital assets.

Stock prices of crypto companies have cratered, retail traders are fleeing and industry executives are predicting a prolonged slump that could put more companies in jeopardy, The New York Times’s David Yaffe-Bellany and Erin Griffith report.

“The tide has gone out in crypto, and we’re seeing that many of these businesses and platforms rested on shaky and unsustainable foundations,” said Lee Reiners, a former Federal Reserve official who teaches at Duke University Law School. “The music has stopped.” » | Eshe Nelson | Wednesday, June 15, 2022

‘The Music Has Stopped’: Crypto Firms Quake as Prices Fall

THE NEW YORK TIMES: Crypto companies are laying off staff, freezing withdrawals and trying to stem losses, raising questions about the health of the ecosystem.

Employees of Coinbase in Times Square last year for its initial public offering. On Tuesday, the company said that it was laying off 18 percent of its workers. | Gabby Jones for The New York Times
SAN FRANCISCO — No one wanted to miss out on the cryptocurrency mania.

Over the last two years, as the prices of Bitcoin and other virtual currencies surged, crypto start-ups proliferated. Companies that market digital coins to investors flooded the airwaves with TV commercials, newfangled lending operations offered sky-high interest rates on crypto deposits and exchanges like Coinbase that allow investors to trade digital assets went on hiring sprees.

A global industry worth hundreds of billions of dollars rose up practically overnight. Now it is crashing down. After weeks of plummeting cryptocurrency prices, Coinbase said on Tuesday that it was cutting 18 percent of its employees, after layoffs at other crypto companies like Gemini, BlockFi and Crypto.com. High-profile start-ups like Terraform Labs have imploded, wiping away years of investments. On Sunday, an experimental crypto bank, Celsius, abruptly halted withdrawals.

The pullback in the crypto ecosystem illustrates the precariousness of the structure built around these risky and unregulated digital assets. The total value of the cryptocurrency market has dropped by about 65 percent since autumn, and analysts predict the sell-off will continue. Stock prices of crypto companies have cratered, retail traders are fleeing and industry executives are predicting a prolonged slump that could put more companies in jeopardy. » | David Yaffe-Bellany and Erin Griffith | Tuesday, June 14, 2022

Bitcoin Falls below $25,000, Celsius and Binance Pause Withdrawals

Jun 13, 2022 • Yahoo Finance Live anchors Julie Hyman, Brad Smith and Brian Sozzi discuss bitcoin trading below $25,000 and some crypto companies pausing withdrawals in response.

Der Bitcoin-Kurs fällt und fällt: Der Kryptomarkt taumelt: Grund ist auch ein amerikanisches Unternehmen, das in Deutschland beworben wurde. Betroffen sind zahlreiche Digitalwährungen. »

Bitcoin drops 18 percent to lowest price since 2020: The cryptocurrency market melted down again on Monday, as the price of Bitcoin plummeted to its lowest point since 2020, wiping away years of investments »

As Energy Prices Soar, the Bitcoin Miners May Find They Have Struck Fool’s Gold

THE OBSERVER: The rising price of electricity and the plunging value of the cryptocurrency could burst the speculative bubble for today’s prospectors

In the bad old days, prospecting for gold was a grisly business involving hysterical crowds, pickaxes, digging, the wearing of appalling hats, standing in rivers panning for nuggets, “staking” claims and so on. The California gold rush of 1848-55, for example, brought 300,000 hopefuls to the Sierra Nevada and northern California and involved the massacre of thousands of Indigenous people.

In our day, the new gold is bitcoin, a cryptocurrency, and prospecting for it has become a genteel armchair activity, although it is called “mining”, for old times’ sake. What it actually involves is using computers to perform unfathomably complicated calculations to create cryptographic “hashes” – codes that are, in practical terms, uncrackable. » | John Naughton | Saturday, June 11, 2022

Cryptocurrency Crash Causes Trillions of Dollars’ Worth of Damage | 60 Minutes Australia

It's the oldest saying in the book: What goes up must come down. In the volatile world of cryptocurrency, that's proving to be a brutal truth. Crypto's market value has halved since its peak late last year, haemorrhaging an eye watering $2.2 trillion. And it's not just crypto geeks whose dreams have been shattered, but also ordinary mum and dad investors sucked in by the hype the currency had gone mainstream. However, while many millionaires have become overnight paupers, cryptocurrency's true believers say don't worry, the good times will return. The question is: Who's brave enough to believe them?

Crypto Mania: Behind the Hype of Cryptocurrencies | Four Corners

May 30, 2022 • Cryptocurrency is the hottest financial product in the world.

The hype is everywhere, with forms of the digital currency endorsed and advertised by celebrities daring you to invest in this brave new world.

Not everyone is convinced by the glossy ads and bold claims.

Four Corners investigates what lies behind the slick marketing and big promises to examine if it's a fad, a fraud or the future.

You Should Care about the Crypto Meltdown. Here’s Why. | Amanpour & Company

May 18, 2022 • This week, markets were shaken by plunging prices in cryptocurrencies. If you’re not an investor in crypto, you might wonder why it should matter. Instability in cyberspace, it turns out, could potentially impact the entire economy. Hari Sreenivasan gets the details from Stacy-Marie Ishmael, managing editor of crypto for Bloomberg. Originally aired on May 18, 2022.

Cryptocurrencies in Freefall: What Are the Ripple Effects? | DW News

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Cryptocurrencies Melt Down in a ‘Perfect Storm’ of Fear and Panic

THE NEW YORK TIMES: A steep sell-off that gained momentum this week starkly illustrated the risks of the experimental and unregulated digital currencies.

A crash in cryptocurrency prices has wiped away more than $300 billion in value this week. | Samuel Corum for The New York Times
SAN FRANCISCO — The price of Bitcoin plunged to its lowest point since 2020. Coinbase, the large cryptocurrency exchange, tanked in value. A cryptocurrency that promoted itself as a stable means of exchange collapsed. And more than $ 300 billion was wiped out by a crash in cryptocurrency prices since Monday.

The crypto world went into a full meltdown this week in a sell-off that graphically illustrated the risks of the experimental and unregulated digital currencies. Even as celebrities such as Kim Kardashian and tech moguls like Elon Musk have talked up crypto, the accelerating declines of virtual currencies like Bitcoin and Ether show that, in some cases, two years of financial gains can disappear overnight.

The moment of panic amounted to the worst reset in cryptocurrencies since Bitcoin plummeted 80 percent in 2018. But this time, the falling prices have broader impact because more people and institutions hold the currencies. Critics said the collapse was long overdue, while some traders compared the alarm and fear to the start of the 2008 financial crisis.

“This is like the perfect storm,” said Dan Dolev, an analyst who covers crypto companies and financial technology at the Mizuho Group. » | David Yaffe-Bellany, Erin Griffith and Ephrat Livni | Thursday, May 12, 2022

Absturz von Tech-Aktien und Kryptowährungen: der Beginn einer neuen Ernsthaftigkeit an der Börse: Das viele billige Geld der Zentralbanken hat in den vergangenen Jahren dafür gesorgt, dass die Investoren immer grössere Risiken eingegangen sind. Die jüngsten Kursverluste könnten das Ende dieser Ära markieren. »

Bitcoin Paradise? Briton Creates ‘Crypto Utopia’ in South Pacific

THE GUARDIAN: Anthony Welch and partner try to woo cryptocurrency investors to regulation-free island on Vanuatu archipelago

Vanuatu is a South Pacific Ocean nation made up of approximately 80 islands. Photograph: Westend61/Getty Images
For the past 12 years Anthony Welch and his partner Theresa have been living a Robinson Crusoe life alone on a South Pacific island mostly untouched by humanity.

Welch, a retired British property investor, hopes the tranquility will soon be shattered by 21,000 cryptocurrency investors he is trying to convince to move to his island and form a regulation-free “crypto utopia”.

Under Welch’s plan, the 3,000m sq metre (32,000m sq ft) island, which is part of the Vanuatu archipelago between Australia and Fiji, would be transformed from 90% undisturbed rainforest into a “sustainable smart city”, filled with multistorey apartment blocks and offices for cryptocurrency investors from around the world.

Welch, who has renamed the island from its native name Lataro to Satoshi (in a nod to Satoshi Nakamoto the pseudonym of the person who invented bitcoin), has joined forces with cryptocurrency evangelists to create a “blockchain-based democracy” and “the crypto capital of the world”.

However, Welch will first have to unwind his previous marketing of the island as a “wildlife nature reserve” home to rare giant crabs. » | Rupert Neate, Wealth correspondent | Saturday, February 12, 2022

How Crypto Became the New Subprime

OPINION : PAUL KRUGMAN
THE NEW YORK TIMES: If the stock market isn’t the economy — which it isn’t — then cryptocurrencies like Bitcoin really, really aren’t the economy. Still, crypto has become a pretty big asset class (and yielded huge capital gains to many buyers); by last fall the combined market value of cryptocurrencies had reached almost $3 trillion.

Since then, however, prices have crashed, wiping out around $1.3 trillion in market capitalization. As of Thursday morning, Bitcoin’s price was almost halfway down from its November peak. So who is being hurt by this crash, and what might it do to the economy?

Well, I’m seeing uncomfortable parallels with the subprime crisis of the 2000s. No, crypto doesn’t threaten the financial system — the numbers aren’t big enough to do that. But there’s growing evidence that the risks of crypto are falling disproportionately on people who don’t know what they are getting into and are poorly positioned to handle the downside. » | Paul Krugman, Opinion Columnist | Thursday, January 27, 2022

Bitcoin Could Become ‘Worthless’, Bank of England Warns

THE GUARDIAN: People investing in the cryptocurrency should be aware of risks, central bank says

Bitcoin peaked above $67,000 a piece in early November but could ‘practically drop to zero’, said the Bank of England’s deputy governor, Sir John Cunliffe. Illustration: Dado Ruvić/Reuters
The Bank of England has said that bitcoin could be “worthless” and people investing in the digital currency should be prepared to lose everything.

In a warning over the potential risks for investors, the central bank questioned whether there was any inherent worth in the most prominent digital currency, which has soared in value this year to close to $50,000 (£37,786) a piece.

The cryptocurrency peaked above $67,000 in early November, but suffered a sell-off after news first broke of the Omicron variant of coronavirus, before stabilising around its current level in the past week.

The Bank’s deputy governor, Sir Jon Cunliffe, said it had to be ready for risks linked to the rise of the crypto asset following rapid growth in its popularity. “Their price can vary quite considerably and they [bitcoins] could theoretically or practically drop to zero,” he told the BBC.

The market capitalisation of crypto assets has grown tenfold since early 2020 to about $2.6tn, representing about 1% of global financial assets. About 0.1% of UK households’ wealth is in bitcoin and similar crypto assets, such as ethereum and Binance coin. As many as 2.3 million people hold crypto assets, at an average amount of about £300 each. » | Richard Partington, Economics correspondent | Tuesday, December 14, 2021

Crypto Rally Lifts Ether to New Record, Bitcoin at Near 3-week High

THE GUARDIAN: Meanwhile in the cryptocurrency world, bitcoin rallied toward its all-time high on Monday and ether has climbed to a fresh record.

Bitcoin is over 6% overnight to reach $66,357, approaching the previous record around $67,000 set on October 20.

Ether - which underpins the ethereum network - has risen to a fresh record at a record top of $4,767.55 on Coindesk.

Reuters says that “momentum, flows, favourable news and inflation fears” are all lifting crypto assets: » | Graeme Wearden | Monday, November 8, 2021

China Cracks Down on Cryptocurrency, Banning Transactions and Mining.

THE NEW YORK TIMES: China intensified its crackdown on cryptocurrency on Friday, calling all financial transactions involving cryptocurrencies illegal and issuing a nationwide ban on cryptocurrency mining.

In a joint statement by 11 Chinese government entities, authorities vowed to work closely to punish “illegal” crypto mining activities to help prevent the “hidden risks caused by the blind and disorderly development” of the industry and to help the country achieve its carbon reduction goals.

China’s central bank announced that services offering trading, order matching, token issuance and derivatives for virtual currencies would be strictly prohibited. The bank also said that overseas crypto exchanges providing services in mainland China were also illegal.

Less than three hours after the notice was posted by China’s central bank, Bitcoin, the world’s largest cryptocurrency, had dropped by about 7 percent, to around $41,100. » | Amy Qin | Friday, September 24, 2021

Crypto’s Rapid Move into Banking Elicits Alarm in Washington

THE NEW YORK TIMES: The boom in companies offering cryptocurrency loans and high-yield deposit accounts is disrupting the banking industry and leaving regulators scrambling to catch up.

BlockFi, a fast-growing financial start-up whose headquarters in Jersey City are across the Hudson River from Wall Street, aspires to be the JPMorgan Chase of cryptocurrency.

It offers credit cards, loans and interest-generating accounts. But rather than dealing primarily in dollars, BlockFi operates in the rapidly expanding world of digital currencies, one of a new generation of institutions effectively creating an alternative banking system on the frontiers of technology.

“We are just at the beginning of this story,” said Flori Marquez, 30, a founder of BlockFi, which was created in 2017 and claims to have more than $10 billion in assets, 850 employees and more than 450,000 retail clients who can obtain loans in minutes, without credit checks.

But to state and federal regulators and some members of Congress, the entry of crypto into banking is cause for alarm. The technology is disrupting the world of financial services so quickly and unpredictably that regulators are far behind, potentially leaving consumers and financial markets vulnerable.

In recent months, top officials from the Federal Reserve and other banking regulators have urgently begun what they are calling a “crypto sprint” to try to catch up with the rapid changes and figure out how to curb the potential dangers from an emerging industry whose short history has been marked as much by high-stakes speculation as by technological advances. » | By Eric Lipton and Ephrat Livni | Sunday, September 5, 2021

Artwork for The New York Times by Dalbert B. Vilarino.