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California’s financial regulator released a barrage of 16 crypto scam alerts between Dec. 27 and 28, warning consumers of potentially fraudulent crypto websites and brokers. 

The California Department of Financial Protection and Innovation rarely releases more than one warning at a time, but seems to have made an exception for crypto. Its previous crypto scam alert bombardment took place on Jun. 15, when 26 notices were pushed out. 

From romantic swindling schemes to advance fee scams, victims totted up to losses of up to $1.2 million, the regulator said. Many fell into the trap following friendly social media messages that built a relationship between the victim and the scammer.

Some of the sites attempted to dupe well-known entities, with names such as “eth-Wintermute.net,” “UniSwap LLC” and “RB Hood.”

“The DFPI urges consumers to exercise extreme caution before responding to any solicitation offering investment or financial services,” the regulator wrote.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Bankrupt crypto lender Celsius is looking to push the deadline for creditors to file the amount of debt they are owed to early February, instead of Jan. 3. 

The motion to extend the deadline will be heard by the bankruptcy court handling the case at a Jan. 10 hearing, according to a Tweet Celsius wrote late on Wednesday. At the very least, the due date for customer claims is extended until the hearing. 

“Our goal is to provide account holders with additional time to file any proofs of claim,” Celsius added. The company will file a motion to request an extension for the bar date later this week.

Celsius filed for bankruptcy protection in July following a market slide. The troubled lender claimed more than 100,000 creditors in its petition. At the height of its success, Celsius managed more than $10 billion in assets for over 1.7 million users, it claimed.

Earlier this month, Celsius was also granted an extension that means it does not have to submit its Chapter 11 bankruptcy reorganization plan until mid-February.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

NFT sales have dipped leading up to Christmas for the second year in a row. 

NFT trading volume fell from over $24 million on Dec. 20 to $12.9 million on Dec. 25 of this year — a 46.5% decrease. 

In 2021, NFT trading volume decreased from $80.8 million on Dec. 22 to $64.3 million on Dec. 25, according to the NFT data tracker CryptoSlam. 

Christmas transaction volume fell 80% in 2022 compared to 2021, due to the depressed crypto market afflicting this year. The downturn affected NFT marketplace transactions considerably, leading to consecutive decreases in transaction volume for the past eight months, with December’s data incomplete.

Yuga Labs‘s NFT project Bored Ape Yacht Club (BAYC) rallied leading up to Christmas for the second year in a row, according to The Block’s Dashboard.

In the five days leading up to the holiday, the project’s floor price increased by 3.81 ETH in 2021 and 10.28 ETH in 2022. CryptoPunks’s floor price decreased in the lead-up to Christmas last year and remained steady around the holiday in 2022, despite comprising five of the 12 most expensive NFT sales this year. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Binance CEO Changpeng Zhao said he’s “reasonably sure” there were “wide spread API key leaks” from trading-bot platform 3Commas after fresh speculation about an October incident emerged on social media on Wednesday.

A 3Commas spokesperson confirmed the leak in a statement to The Block. 

“I strongly believe @tier10k is correct here,” he wrote on Twitter, referring to a post from a user that said an API leak had been published. “If you have ever put an API key in 3Commas (from any exchange), please disable it immediately.” 

An investigation conducted by 3Commas and the now-collapsed FTX crypto exchange in October revealed that API keys had been used to conduct unauthorized trades for DMG trading pairs. The 3Commas team was alerted to the incident on Oct. 20, when FTX API keys connected to the platform were used to perform unauthorized trades.

3Commas said at the time that the API keys were not taken from the company and had probably been obtained from a third-party phishing attack or hack.

3Commas confirms leak

A 3Commas spokesperson on Wednesday said the company had seen a message from the hacker and confirmed the data in the posted files was real.

“As an immediate action, we have asked that Binance, Kucoin and other supported exchanges revoke all of the keys that were connected to 3Commas,” the spokesperson said in an emailed response to questions from The Block. “We are sorry that this has gotten so far and will continue to be transparent in our communications around the situation.”

The company said that it has not found proof of an “inside job.”

“Only a small number of technical employees had access to the infrastructure and we have taken action since November 16 to remove their access,” the spokesperson said. “Since then, we have implemented new security measures and will not stop there; we are launching a full investigation involving law enforcement.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Disgraced FTX founder Sam Bankman-Fried will be arraigned by the U.S. District Court for the Southern District of New York next week.

Court documents set Bankman-Fried’s arraignment on Jan. 3. Bankman-Fried faces two charges of wire fraud and six counts of conspiracy. Reuters first reported on the court update. 

Associates of Bankman-Fried, Caroline Ellison and Gary Wang, are already cooperating with prosecutors on their roles in misleading investors about the nature of the relationship between FTX and linked trading firm Alameda Research. Those pleas likely provided the court with information about Bankman-Fried’s activities. 

Bankman-Fried also faces civil cases from federal regulators, the Commodity Futures Trading Commission, and the Securities and Exchange Commission. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

An official NFT collection from the Manchester United Football Club has been accused of looking a little too much like the work of a popular NFT artist known for his colorful animated monsters.

A Twitter user chided Manchester United for the similarities between its “The Devils” collection and the work of DesLucrece, the pseudonymous name of an NFT artist known for the Des Monsters collection that currently has a floor price of 17.5 ETH, or $20,825, on OpenSea. In a side-by-side comparison, nearly identical characters share a color scheme, similar eyes and horns.

“We need answers,” the user wrote. “This is total garbage.” 

Both collections were minted on the Tezos blockchain.

View on Twitter.

Manchester United first partnered with the Tezos Foundation earlier this year and released “The Devils” beginning on Dec. 21. The collection of 7,777 NFTs, each priced at about $36, has since sold out. 

DesLucrece, Manchester United, Tezos co-founder Arthur Breitman and Trilitech, the platform behind the Manchester United NFT collection, did not immediately respond to requests for comment from The Block.

DesLucrece said on Twitter that he and Breitman are in talks about a solution and awaiting comment from Manchester United.

“I think the resolution here should be beneficial for everyone involved,” he wrote, noting that he wanted to protect art and artists on the Tezos platform. “Dinner with Ronaldo isn’t off the table.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Four FTX customers filed a class action lawsuit demanding priority in repayment, citing $2 billion in customer funds which have gone missing.

The suit was filed in the U.S. Bankruptcy Court for the District of Delaware, where FTX’s bankruptcy proceedings are ongoing. Retail customers who suffered financial losses following the bankruptcy filing of FTX and sister company Alameda Research “should not have to stand in line” with other creditors waiting for fund recovery, the complaint argues. 

Customer funds at FTX were misappropriated to cover financial gaps in closely affiliated investment fund Alameda Research, former Alameda CEO Caroline Ellison told prosecutors in a statement. The plaintiffs said that “unlawful” FTX transfers to Alameda were “in direct violation of FTX’s own customer agreements and terms of service, as well as common law and basic principles of honesty and fair dealing.”

A committee representing unsecured creditors was formed in mid-December for over 100 entities invested in the collapsed exchange and its affiliated companies who did not have collateral for what FTX owes them. 

“Cash and assets traceable to customers, which never belonged to FTX or Alameda and do not belong to the estates, should be earmarked solely for customers, and victimized customers should likewise have priority to any other cash possessed or recovered by [the group of affiliated debtors],” the court filing reads. 

FTX and Alameda co-founder Sam Bankman-Fried faces multiple fraud charges that could land him up to 115 years in prison. Ellison and FTX co-founder Gary Wang pled guilty to criminal and civil charges earlier this month, increasing the already intense legal pressure on Bankman-Fried.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto prices dipped after a week of relatively flat trading, while crypto-related stocks traded higher with Coinbase adding 2%.

Bitcoin traded at around $16,700 at 9:30 a.m. ET, dropping about 1% over the past 24 hours, according to TradingView data.  

BTCUSD chart by TradingView

Ether shed 1% to trade at $1,200, and altcoins sold off more sharply. Ripple’s XRP was down 1.4% in the past day, while Cardano’s ADA dropped 2.6%. 

Dog-themed memecoins were down as well. Dogecoin dropped 3.4%, and shiba inu slipped 2.6%.

Crypto stocks

U.S. stock indices were trading higher shortly after the market opening. The S&P 500 and Nasdaq 100 rose 0.4% and 0.6%.

Coinbase gained 0.8% to trade above $32.90. The company’s shares fell 8% to an all-time low of $32.65 yesterday.

Silvergate shares recovered some recent losses, rising almost 1.4% to trade around $16.

Block shares were trading around $60, down 0.7%.

MicroStrategy dipped almost 0.2% to $148. Michael Saylor’s firm sold bitcoin for the first time on Dec. 22, according to a Wednesday Form 8-K filing. The company sold 704 bitcoin worth $11.8 million at the time of sale, according to the filing. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Kraken is quitting Japan. A month after laying off 30% of its workforce, the crypto exchange will cease operations in the country as of Jan. 31.

“Current market conditions in Japan in combination with a weak crypto market globally mean the resources needed to further grow our business in Japan aren’t justified at this time,” the company said in a blog post. “The decision is part of Kraken’s efforts to prioritize resources and investments in those areas that align with our strategy and will best position Kraken for long term success.”

Kraken said it is fully funded and that all affected clients can withdraw assets in a timely manner. Users can withdraw crypto holdings to an external wallet or liquidate funds and transfer to a domestic bank account.

“Funds currently staked with Kraken can be unstaked and transferred or converted as desired,” the company said. “Kraken will soon be distributing additional info regarding the ETH unstaking process shortly.”

Exchanges have seen volumes slump since 2021 along with cryptocurrency prices, according to The Block Research.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Winklevoss twins and their Gemini Trust Co. are facing a potential class action lawsuit for failing to register its interest-bearing accounts as securities.

Investors accused the company and its founders of fraud and violations of the Exchange Act in a proposed class-action complaint filed Tuesday in Manhattan at the U.S. District Court for the Southern District of New York. 

“Gemini marketed GIAs with repeated false and misleading statements, including that GIAs were a secure method of collecting interest,” the complaint stated, referring to the interest-bearing accounts. “Gemini also omitted and concealed significant information concerning the risks associated with Gemini Earn, including information concerning its so-called partner and borrower in connection with the program.”

Gemini Trust Earn products promised returns of as much as 8%. Last month, redemptions were halted because of liquidity issues at Genesis Global resulting from the collapse of the FTX crypto exchange.

Gemini “refused to honor any further investor redemptions, effectively wiping out all investors who still had holdings in the program,” the investors said in the complaint. Had the products been registered, the investors said they would’ve received disclosures that would have let them assess the risks better.

“Without these disclosures, they were left to fend for themselves as their purportedly safe investments experienced the return characteristics of the unregistered and highly speculative securities that they were,” the complaint said.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.