Bitcoin

Judge Rejects Man From Retrieving $750 Million of Bitcoin From Landfill (crypto.news) 127

An IT engineer from Wales lost a decade-long legal battle to recover a hard drive containing 8,000 Bitcoins from a Newport landfill. The hard drive, accidentally thrown away in 2013, is now valued between $700-750 million. crypto.news reports: However, Judge Keyser KC ruled there were no "reasonable grounds" for the claim, citing environmental concerns and the council's ownership of the landfill contents. The landfill reportedly holds 1.4 million tonnes of waste, but Howells claims to have pinpointed the hard drive's location to a 100,000-ton section. Reacting to the ruling, Howells expressed frustration, calling it a "kick in the teeth," according to the BBC.
The Almighty Buck

A Tour Through History's Most Entertaining Price Anomalies (msn.com) 29

MicroStrategy's bitcoin holdings and a tech investment fund are commanding extraordinary premiums in U.S. markets, highlighting unusual price anomalies reminiscent of past market distortions. MicroStrategy shares are trading at more than double the market value of their main asset -- bitcoin holdings -- while closed-end fund Destiny Tech100 recently traded at 11 times its net asset value, down from 21 times earlier in 2024.

Similar market irregularities have emerged throughout history. In 1923, investor Benjamin Graham profited from a disconnect between DuPont and General Motors shares. During the 1929 bull market, closed-end fund Capital Administration Co. traded at a 1,235% premium to its net asset value. WSJ adds: The PalmPilot during the 1990s and early 2000s was a hand-held device and personal assistant that came with a touch-screen display and a stylus. Palm was the biggest maker of hand-held computer devices, with 70% market share, and it held its initial public offering in March 2000, about a week before the Nasdaq Composite Index's peak during the dot-com bubble.

Palm's shares jumped 150% on their first day of trading, giving Palm a stock-market value of about $53 billion. Palm was still 94%-owned by parent 3Com at the time. Yet on Palm's first day of trading, 3Com's shares fell 21%.

The funny part: According to the stock market, 3Com was worth about $23 billion less than the value of the Palm shares that 3Com owned. This made no sense, yet the valuations remained out of whack for months. In time, both stocks came down to earth, sanity prevailed and the world eventually moved on to smartphones.

Bitcoin

MicroStrategy's Big Bet On Bitcoin Went Stratospheric (theguardian.com) 33

MicroStrategy has transformed into a "bitcoin treasury company," investing billions in bitcoin through debt and equity issuance, driving its stock price up nearly 400% in 2024 despite declining software revenues and heightened financial risks. The Guardian reports: In the summer of 2020, as the Covid-19 pandemic upended economies around the world, an obscure U.S. software firm decided to diversify. MicroStrategy, whose head office is situated next to a shopping mall and metro station in Tysons Corner, Virginia, had decided the steady business of "software as a service" was not racy enough. Instead, it would branch out by investing up to $250 million in alternative assets -- "stocks, bonds, commodities such as gold, digital assets such as bitcoin or other asset types." Less than five years later, that bitcoin side hustle has gone stratospheric. MicroStrategy's share price has swollen twentyfold, lifting its market capitalization to almost $75 billion and catapulting the stock into the Nasdaq 100 index of top technology shares.
Bitcoin

North Korean Hackers Stole $1.3 Billion Worth of Crypto This Year 22

In 2024, North Korean state-sponsored hackers stole $1.34 billion in cryptocurrency across 47 attacks, marking a 102.88% increase from 2023 and accounting for 61% of global crypto theft. BleepingComputer reports: Although the total number of incidents in 2024 reached a record-breaking 303, the total losses figure isn't unprecedented, as 2022 remains the most damaging year with $3.7 billion. Chainalysis says most of the incidents this year occurred between January and July, during which 72% of the total amount for 2024 was stolen. The report highlights the DMM Bitcoin hack from May, where over $305 million was lost, and the WazirX cyberheist from July, which resulted in the loss of $235 million.

As for what types of platforms suffered the most damage, DeFi platforms were followed by centralized services. Regarding the means, the analysts report that private key compromises accounted for 44% of the losses, while exploitation of security flaws corresponded to just 6.3% of stolen cryptocurrency. This is a sign that security audits have a significant effect on reducing exploitable flaws on the platforms. However, stricter security practices in the handling of private keys need to be implemented.
Bitcoin

El Salvador Strikes $1.4 Billion IMF Deal After Scaling Back Bitcoin Policies (bbc.com) 15

El Salvador secured a $1.4 billion loan deal with the IMF after agreeing to scale back its bitcoin policies, making cryptocurrency acceptance voluntary for businesses and limiting public sector involvement. The deal aims to stabilize the country's economy, with bitcoin's recent rally boosting the value of El Salvador's holdings. The BBC reports: In 2021, El Salvador became the first country in the world to make bitcoin legal tender. This week, the cryptocurrency briefly hit a fresh record high of more than $108,000.

"The potential risks of the Bitcoin project will be diminished significantly in line with Fund policies," the IMF announcement said. "Legal reforms will make acceptance of Bitcoin by the private sector voluntary. For the public sector, engagement in Bitcoin-related economic activities and transactions in and purchases of Bitcoin will be confined."
Last Friday, El Salvdaor purchased more than 11 BTC worth $1.07 million and executed another 11 BTC purchase on Sunday, according to crypto data platform Arkham. El Salvador's President, Nayib Bukele, is ramping up buys "with an interim goal of acquiring 20,000 more Bitcoin," reports the Daily Hodl.
The Courts

Craig Wright Convicted For Repeatedly Lying About Inventing Bitcoin 37

Craig Wright, an Australian computer scientist living in the UK, has been found guilty of contempt of court for persistently and falsely claiming to be Bitcoin's creator, Satoshi Nakamoto, despite a High Court ruling against his claim. He has been sentenced to 12 months in prison, suspended for two years, and faces jail if he continues his assertions. The BBC reports: [...] Wright, who appeared via videolink, refused to disclose where he was, saying only he was in Asia. It means an international arrest warrant would have to be issued if the UK authorities wanted to detain him.

Wright's actions were described in court as "legal terrorism" that "put people through personal hell" in his campaign to be recognised as Bitcoin's inventor. The judge, Mr Justice Mellor, said Wright arguments were "legal nonsense" but acknowledged that he was not in the UK and "appears to be well aware of countries with which the UK does not have extradition arrangements".
Bitcoin

Texas House Introduces Bill To Establish a Strategic Bitcoin Reserve 166

An anonymous reader quotes a report from CNBC: Legislation was introduced in the Texas House of Representatives on Thursday to establish a strategic bitcoin reserve, which could serve as a proving ground for the U.S. Treasury. The proposed bill would enable the state to start building a strategic bitcoin reserve by accepting taxes, fees and donations in bitcoin that would be held for a minimum of five years, Republican state Rep. Giovanni Capriglione announced on an X Spaces event Thursday.

The Texas bill aims to provide a way to strengthen the state's fiscal stability and establish it as a leader in bitcoin innovation, according to the Satoshi Action Fund, a nonprofit bitcoin advocacy group that worked with Capriglione on the bill. "Probably the biggest enemy of our investments is inflation," Capriglione said. "A strategic bitcoin reserve, investing in bitcoin, would be a win-win for the state." "I just filed the bill ... entitled 'An act relating to the establishment of a bitcoin reserve within the state treasury of Texas and the management of cryptocurrencies by governmental entities,'" he said later.
"My goal is to make this bill as big and as broad as possible," Capriglione said. "This initial step is to allow some optionality and flexibility on it, but if I am able to get support from other legislators, we will make it even stronger."

It's "unlikely" a U.S. strategic bitcoin reserve will be established, "but it helps get animal spirits back into the market," Needham's John Todaro told CNBC. He said it's also "unlikely to drive material price gains, as we do not expect the U.S. government will purchase bitcoin in any meaningful capacity, but it's an item that drives excitement and optimism."
United States

Bitcoin Miner Purchases 112-Megawatt Texas Wind Farm, Takes it Off the Grid (chron.com) 104

This week a Florida-based Bitcoin-tech company named MARA Holdings announced it had bought a 114-megawatt Texas wind farm, reports Chron.com, "and will subsequently take it off the power grid and use it to energize its mining operations."

MARA's CEO tells the site they're "leveraging renewable resources that would have otherwise been curtailed" while "reducing our bitcoin production costs through vertical integration, and demonstrating MARA's commitment to environmental stewardship." The wind farms were not a part of the Electric Reliability Council of Texas (ERCOT) grid, but instead they were located within the Southwest Power Pool, which manages the market for the central U.S., including but not limited to most or parts of Oklahoma, Kansas, Nebraska, South Dakota and North Dakota... A 114-MW facility could power somewhere between 20,000 and 100,000 homes, depending on who you ask...

Historically, the facilities use up a lot of power and have generated backlash from neighbors who have complained about the noise of the machines inside. Texas has been a haven for cryptocurrency tech companies, primarily because of the state's space, deregulated power market and friendly business climate. Two weeks ago, the Public Utilities Commission adopted a rule requiring crypto and other virtual currency miners within the ERCOT grid to register their locations, ownership information and electricity demands, to further ensure that they could be watchful of this emerging source of energy consumption.

"Crypto mining operations currently consume around 2.3 percent of US electricity, and it requires roughly 155,000kWh to mine one Bitcoin," notes the site Data Centre Dynamics. This is the second off-grid power deal MARA has signed over the last few months. In October, it launched a 25MW micro data center operation across oil wellheads in Texas and North Dakota. The data center will be powered exclusively by excess natural gas from oilfield production that would have otherwise been flared. The operation will be distributed across wellheads in Texas and North Dakota, with operational status expected by January 2025.
Some context from Bloomberg: A few years ago Bitcoin miners took part in a global scramble for electricity to power their specialized computers... But the rise of AI, with its insatiable demand for electricity, dwarfed the needs of crypto and upended energy markets worldwide. Miners must now compete with much-larger tech firms for connections to electrical grids and power contracts. "Bitcoin miners are being forced to go look at marginal generation," said [MARA CEO Fred] Thiel. "The AI guys can afford to pay a much higher amount for energy than a Bitcoin miner"... MARA's plan to mine only when the wind is blowing makes economic sense because its mine will house last-generation computers that would otherwise have been retired, Thiel said.
"Thiel said he'd be interested to potentially buy more wind farms over time."
Bitcoin

Hard Drive Tossed in Landfill With Bitcoin Now Worth $800 Million. Lawsuits Continue (theguardian.com) 205

11 years ago his hard drive ended up in a U.K. landfill — with 8,000 bitcoin. It's now worth $800 million... and James Howell wants it back.

The Guardian reports that his "bid to become extremely rich reached a judge on Tuesday with a team of lawyers arguing that it was still possible to launch a hunt for his missing hard drive containing the bitcoin." They claimed that rather than searching for a "needle in a haystack", the position of the bitcoin hoard had been narrowed down to a small area and there was a "finely tuned" plan to retrieve it... [Howells] has been asking Newport city council for help in getting the hard drive back, and even said he would share the money with the authority, to no avail... James Goudie KC, representing the council, said Howells had no legal claim to the hard drive. He said: "Anything that goes into the landfill goes into the council's ownership."

Goudie said Howells' offer to share some of the bitcoin with Newport council amounted to a bribe. He said: "He is trying to buy something the council is not in a position to sell...." Before the hearing, a spokesperson for Newport council said: "The council has told Mr Howells multiple times that excavation is not possible under our environmental permit and that work of that nature would have a huge negative environmental impact on the surrounding area. "Responding to Mr Howells' baseless claims are costing the council and Newport taxpayers time and money which could be better spent on delivering services."

Howells was 28 when he lost the hard drive, and has said he may as well keep trying to recover it — because he'll always know that it's out there. Howells' legal teams are "working pro bono," the article notes, "on the basis that they get a share of the bitcoin profits if successful..." And TechSpot points out that "There's also the question of whether the data on the drive would still be accessible after more than a decade of sitting under a pile of rotting garbage.

"Howells has a team of data recovery engineers who are also working pro bono..."

Thanks to Slashdot reader jjslash for sharing the news.
Crime

Founder of Cryptocurrency Lender 'Celsius Network' Pleads Guilty to Fraud (reuters.com) 16

59-year-old Alex Mashinsky, the founder/former CEO of cryptocurrency lender Celsius Network, "pleaded guilty on Tuesday to two counts of fraud," reports Reuters.

He'd been indicted in July on seven counts of fraud, conspiracy and market manipulation charges, according to the article, and federal prosecutors in Manhattan "said he misled customers of Celsius to persuade them to invest, and artificially inflated the value of his company's proprietary crypto token." On Tuesday, during a hearing before U.S. District Judge John Koeltl, Mashinsky said he pleaded guilty to two out of the seven counts he was initially charged with: commodities fraud, and a fraudulent scheme to manipulate the price of CEL, Celsius' in-house token. In court, Mashinsky admitted to giving Celsius customers "false comfort" by giving an interview in 2021 in which he said Celsius had received approval from regulators for its "Earn" program, which it had not. That program offered to deploy customers' cryptocurrency assets to yield investment returns. He said he also failed to disclose that he had been selling his holdings of CEL, the platform's in-house token.

"I know what I did was wrong, and I want to try to do whatever I can to make it right," Mashinsky said. As part of his plea deal with prosecutors, Mashinsky agreed not to appeal any sentence of 30 years or less — the maximum he faces for the two counts. Koeltl is set to sentence him on April 8, 2025.

Federal prosecutors in Manhattan have said Mashinsky also personally reaped approximately $42 million in proceeds from selling his holdings of the Cel token. "Mashinsky made tens of millions of dollars selling his own CEL at artificially high prices, while his customers were left holding the bag when the company went bankrupt," Damian Williams, the U.S. Attorney in Manhattan, said in a statement on Tuesday... Founded in 2017, Celsius filed for Chapter 11 bankruptcy protection in July 2022 after customers rushed to withdraw deposits as crypto prices fell. Many were initially unable to access their funds... Celsius' former chief revenue officer, Roni Cohen-Pavon, pleaded guilty in September 2023 and agreed to cooperate with prosecutors' investigation.

"The company exited bankruptcy on Jan. 31, and has pivoted to Bitcoin mining..."
Bitcoin

Coinbase Expands Crypto Buying Reach With Apple Pay Integration (techcrunch.com) 23

Major cryptocurrency exchange Coinbase has integrated Apple Pay into its Onramp service, enabling third-party apps to offer direct cryptocurrency purchases through Apple's payment system.

The move significantly streamlines the traditionally complex process of converting traditional currencies to cryptocurrencies, eliminating multiple steps and extra fees previously required. It also marks a notable shift in Apple's historically cautious stance toward cryptocurrency, following years of restricting crypto-related features and removing major exchanges from its App Store in certain markets.
Bitcoin

Bitcoin Heads for Nearly 40% November Gain, Edging Closer to $100,000 (cnbc.com) 170

November 5: Bitcoin's price reaches an all-time high of $74,200.

November 11: Bitcoin sets a new record of $84,000.

November 12: Bitcoin pushes past $90,000. And Friday, CNBC reported: Bitcoin is on pace to post a 38% gain for November, according to Coin Metrics, which would make the month its best since February, when it gained 45% following the launch of spot bitcoin ETFs... Bulls expect bitcoin's price to reach $100,000 by the end of 2024 and potentially double by the end of 2025.
Bitcoin

Tornado Cash Sanctions Overturned By US Appeals Court (coindesk.com) 35

A U.S. federal appeals court ruled that sanctions against Tornado Cash, a crypto transaction anonymization service, must be abandoned, stating that its immutable smart contracts do not constitute "property" under U.S. law and that the Treasury overstepped its authority. The ruling is available here (PDF). CoinDesk reports: The decision answers a controversial privacy debate on whether the government -- via a sanctions list maintained by the U.S. Treasury Department -- has a right to target the technology because it's associated with criminals. The ruling reversed a district court's August ruling that had sided with the government's pursuit of what it had characterized as a "notorious" crypto-mixing service.

OFAC had sanctioned Tornado Cash last year, contending that it was a vital tool used by bad actors including North Korea's Lazarus Group to launder crypto tokens pilfered from platforms and games such as Axie Infinity. Coinbase (COIN) and others had sued the government, claiming it had overreached. Paul Grewal, chief legal officer of crypto exchange Coinbase, cheered the ruling in a Tuesday post on X, calling it a "historic win for crypto." "These smart contracts must now be removed from the sanctions list and U.S. persons will once again be allowed to use this privacy-protecting protocol," Grewal wrote. "Put another way, the government's overreach will not stand."
"We readily recognize the real-world downsides of certain uncontrollable technology falling outside of OFAC's sanctioning authority," the judges said, referencing the ineffectiveness of a law that was established well before the world moved online. "But we must uphold the statutory bargain struck (or mis-struck) by Congress, not tinker with it."

Tornado Cash's TORN token has since rallied 500%, passing the $20 mark.
Bitcoin

Crypto Miners In Texas' ERCOT Region Required To Register, Report Power Demand 66

A new rule passed in Texas requiring cryptocurrency miners using the grid maintained by the Energy Reliability Council of Texas (ERCOT) to register and report key details about their facilities. CoinTelegraph reports: Under the Public Utilities Commission of Texas (PUCT) rule (PDF), passed on Nov. 21, Bitcoin miners must share the location, ownership information and demand for electricity of their facilities with the state agency. Miners have only one working day after the date their facility connects to the ERCOT grid to register and must renew every calendar year on or before March 1.

ERCOT is an independent system operator representing 90% of the state's electric load. According to PUCT Chairman Thomas Gleeson, the new rule was designed to help manage the power grid as more mining facilities come online. "To ensure the ERCOT grid is reliable and meets the electricity needs of all Texans, the PUCT and ERCOT need to know the location and power needs of virtual currency miners," he said. Bitcoin miners who fail to register under the PUCT rule will face a Class A violation, which can result in up to $25,000 in daily fines.
Bitcoin

SEC Chair Gary Gensler To Step Down (axios.com) 81

Gary Gensler will step down as chair of the U.S. Securities & Exchange Commission at noon on Inauguration Day, the agency announced on Thursday. From a report: Gensler has had an aggressive tenure, marked by controversial rulemaking and a combative approach with the cryptocurrency industry.
Bitcoin

Five-Year Prison Sentence for Man who Stole 120,000 Bitcoin from Bitfinex in 2016 (apnews.com) 25

More than 120,000 bitcoin were stolen in a 2016 breach of Bitfinex. Seven years later the perpetrator pleaded guilty.

And Thursday he was sentenced to a five-year prison term, reports the Associated Press: Ilya Lichtenstein masterminded one of the largest-ever thefts from a virtual currency exchange before he and his wife, Heather Rhiannon Morgan, carried out an elaborate scheme to liquidate the stolen funds, according to federal prosecutors... "Over half a decade, the defendant engaged in what IRS agents described as the most complicated money laundering techniques they had seen to date," prosecutors wrote... The couple successfully laundered about 21 percent of the funds stolen from Bitfinex. The laundered money was worth at least $14 million at 2016 prices. Its value would have exceeded $1 billion at the time of their 2022 arrest.

Authorities seized the remaining funds, collectively valued at over $6 billion at current prices... An attorney for Bitfinex said the hack "devastated" its finances and its reputation with its customers, with the stolen funds accounting for approximately 36% of the company's assets at the time of theft. "Bitfinex had to take unprecedented and immediate action to ensure that any losses from the Hack would ultimately be borne by Bitfinex and its shareholders alone, not its customers," the lawyer, Barry Berke, wrote in a letter to the judge.

A prosecutor said Lichtenstein immediately began cooperating with federal authorities after his arrest, helping them with other cybercrime investigations. Over 96% of the stolen funds have been recovered, with help from Lichtenstein, according to defense attorney Samson Enzer. The "vast bulk" of the stolen money was never spent, the lawyer said.

Lichtenstein also "pleaded with the judge to spare his wife from prison, blaming himself for her involvement," according to the article. His wife — a rap artist who records under the name Razzlekhan — will be sentenced Monday, but has pleaded guilty to the same charge, and prosecutors are recommending an 18-month sentence.
Bitcoin

Bitcoin Pushes Past $90,000 (cointelegraph.com) 92

After setting a record high yesterday, Bitcoin continued its remarkable rally, briefly surging past the $90,000 mark. Since Election Day, the cryptocurrency has gained nearly 30%, adding approximately $20,000 to its value. From a previous report: Bitcoin hit a peak of $90,000 on Coinbase at 12:56 PST on Nov. 12 and is up 11% over the past day, per TradingView data. The cryptocurrency is now just over 11% away from reaching $100,000.
The Courts

FTX Sues Crypto Exchange Binance and Its Former CEO Zhao For $1.8 Billion 7

The FTX estate has filed a lawsuit against Binance and former CEO Changpeng Zhao, seeking to recover $1.76 billion, alleging a "fraudulent" 2021 share deal that involved funding from FTX's insolvent Alameda Research. The suit also accuses Zhao of misleading social media posts that allegedly spurred customer withdrawals and contributed to FTX's collapse. CNBC reports: In a Sunday filing with a Delaware court, FTX cites a 2021 transaction in which Binance, Zhao and others exited their investment in FTX, selling a 20% stake in the platform and a 18.4% stake in its U.S.-based entity West Realm Shires back to the company. The FTX estate alleges that the share repurchase was funded by FTX's Alameda Research division through a combination of the company's and Binance's exchange tokens, as well as Binance's dollar-pegged stablecoin.

"Alameda was insolvent at the time of the share repurchase and could not afford to fund the transaction," the suit claims, labeling the deal agreed with FTX co-founder Sam Bankman-Fried -- who's now serving a 25-year sentence over fraud linked to the downfall of his exchange -- a "constructive fraudulent transfer." Binance denies the allegations, saying in an emailed statement, "The claims are meritless, and we will vigorously defend ourselves."
Bitcoin

Bitcoin Sets Another Record as Bullish Bets Continue (nytimes.com) 206

Cryptocurrency backers continue to bid up Bitcoin prices, pushing the digital token to a new high of about $84,000 on Monday. The New York Times: The cryptocurrency has surged since Election Day, on investor hopes that President-elect Donald J. Trump and his appointees would be friendlier to the industry after the Biden administration's aggressive enforcement of securities law that targeted several crypto companies.

Cryptocurrencies have become a major component of the so-called Trump trade. Bitcoin exchange-traded funds, which got the regulatory green light to trade this year, have been booming over the past week. Crypto-related companies have also jumped in value: Riot Platforms, a Bitcoin miner, is up 68 percent since Election Day and Coinbase, a crypto exchange, is up 69 percent over the same period.

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