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Two US representatives introduced legislation aimed at mitigating the risks to the US of El Salvador adopting bitcoin as legal tender, following a Senate bill introduced in February that focuses on the same actions.

The bipartisan House bill, introduced by representatives Norma Torres (D-Calif.) and Rick Crawford (R-Ark.), aims to “mitigate the risks to the United States of El Salvador’s adoption of Bitcoin as legal currency.” It proposes legislation for a so-called Accountability for Cryptocurrency in El Salvador (ACES) Act, the name of the previous Senate bill.     

“Global financial institutions have studied and detailed the numerous risks of El Salvador’s adoption of Bitcoin, and the international community acknowledges the potential danger,” Rep. Torres said in a press release. “El Salvador is an independent democracy and we respect its right to self-govern, but the United States must have a plan in place to protect our financial systems from the risks of this decision, which appears to be a careless gamble rather than a thoughtful embrace of innovation.”

According to an April 4 announcement from Torres’ office, the bill “was introduced as companion legislation” to the Senate bill introduced on February 16 by Senators Jim Risch (R-Idaho), Bob Menendez (D-N.J.), and Bill Cassidy (R-La.). Like that Senate bill, the House version would also require the State Department to produce a report on El Salvador’s bitcoin adoption and a plan to mitigate possible risks. 

The more recent bill is denoted H.R. 7391. Like its Senate counterpart, the House version would “require reports on the adoption of a cryptocurrency as legal tender in El Salvador, and for other purposes.” The bill was referred to the House Committee on Financial Services and House Committee on Foreign Affairs.

Meanwhile, the Senate placed its own version of the bill on its legislative calendar, signaling that it has enough support from lawmakers to warrant further discussion. 

Rep. Torres serves as chair of the Central America Caucus, a bipartisan congressional group. Rep. Crawford is the ranking member of the House Permanent Select Committee on Intelligence’s Subcommittee on Counterterrorism, Counterintelligence, and Counterproliferation.

El Salvador’s president Nayib Bukele, a bitcoin supporter who made the cryptocurrency legal tender last September, responded to the original Senate bill with tweets challenging the US. “We are not your colony, your back yard or your front yard,” Bukele said in a February 16 tweet. “Stay out of our internal affairs.”

Bukele is scheduled to speak at the Bitcoin 2022 conference in Miami on April 7. 

© 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.

Quick Take

• Founded by Philippe Laffont in 1999, Coatue Management is a New York-based investment firm that manages over $70 billion worth of assets
• As far back as 2018, Coatue has been intrigued by the potential of digital assets where it participated in the significant mining manufacturer Bitmain’s Series B round
• In total, The Block has recognized and mapped out 14 crypto-related investments across eight verticals

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Marathon Digital Holdings is planning to move its Bitcoin miners out of a coal-powered facility in Montana and into a number of new undisclosed locations.

The company said on Tuesday that the move comes in an effort to meet its previously announced goal of becoming 100% carbon neutral by the end of 2022 and that the new locations will have “more sustainable sources of power.”

The transition should take place during the third quarter of 2022, according to the announcement.

Marathon had also previously announced a plan to deploy 199,000 bitcoin miners by early 2023, with the goal of reaching 23.3 exahash per second (EH/s). The company said that 100,000 miners would be deployed to several sites in Texas, mostly powered by wind and solar farms, in a partnership with Compute North.

Marathon’s new mining sites will source energy behind-the-meter, in an effort to avoid congesting transmission lines, the company said.

“With the majority of our fleet already scheduled to be deployed at renewable power facilities and deployments currently underway, we believe it is an appropriate time to transition our legacy operations away from fossil fuel generation and towards more sustainable sources of power,” said chairman and CEO of Marathon Fred Thiel.

Many other firms have touted their efforts to transition to greener power sources, as pressure has mounted from critics of the energy-intensive nature of bitcoin mining. Just this Monday, a new Intergovernmental Panel on Climate Change (IPCC) report cited crypto as a source of carbon emissions.

© 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.

Federal prosecutors in the Southern District of Florida forfeited about $34 million in crypto associated with illicit dark web activity. It’s “one of the largest cryptocurrency forfeiture actions ever filed by the United States,” according to the U.S. Department of Justice (DOJ). 

Asset forfeiture is a legal tool meant to deprive criminals of money they made illegally. In this case, law enforcement agents had identified a South Florida resident who was “raking in millions” by using an alias to make more than 100,000 sales of illegal items and hacked account information for services such as Netflix and Uber on dark marketplaces they accessed using the TOR Network, according to a DOJ report. 

Further, the individual obscured their transaction history on the blockchain by swapping various cryptocurrencies through tumblers and dark web money transmitters, which according to the DOJ violated federal money laundering regulations. “Law enforcement agents seized various cryptocurrency wallets associated with the illegal Dark Web conduct,” according to the DOJ.

The forfeiture action itself was spearheaded by a multi-agency group called the Organized Crime Drug Enforcement Task Forces (OCDETF). According to the DOJ, “the principal mission of the OCDETF program is to identify, disrupt, and dismantle the highest-level drug traffickers, money launderers, and other priority transnational criminal organizations that threaten the citizens of the United States.”

© 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 US Treasury has announced its latest sanctions targeting Russian cybercrime, this time against the largest darknet market in the world.

On Tuesday the Treasury announced sanctions on Hydra market and an associated crypto exchange called Garantex. The news follows German authorities’ announcement of the seizure of Hydra’s servers and shutdown of the market’s homepage earlier on Tuesday. 

As The Block reported in an investigation last year, Hydra had seemed to survive up to that point by virtue of connections to powerful entities within Russia. The marketplace’s crypto wallets were fairly seamlessly linked to traditional online payments processors like Qiwi and Yandex Wallet.

The current moves follow widespread political pressure to cut Russia out from economic services writ large. 

Garantex is the third crypto exchange that the Treasury has sanctioned, following two others associated with Russian ransomware this past fall. Though registered in Estonia, Garantex operates out of St. Petersburg and Moscow. 

According to the Treasury, “Analysis of known Garantex transactions shows that over $100 million in transactions are associated with illicit actors and darknet markets, including nearly $6 million from Russian RaaS gang Conti and also including approximately $2.6 million from Hydra.”

The Treasury’s Office of Foreign Asset Control, or OFAC, added 117 Bitcoin wallets associated with Hydra to its sanctioned list. It further included wallets for Bitcoin, Ether and USDT for Garantex.

Curiously, the bitcoin wallet for Garantex has only received 0.00951 BTC in its existence. The ether wallet has seen similarly little use, never having a balance of greater than $4,800. Meanwhile, the listed USDT address, 3E6ZCKRrsdPc35chA9Eftp1h3DLW18NFNV, is likely supposed to be a Bitcoin wallet that has processed 64.65 BTC, which is worth nearly $3 million as of press time.

© 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.

A Bored Ape Yacht Club (BAYC) NFT holder has lost multiple NFTs, including a “bubble gum ape” after they were tricked into exchanging valuable pieces for worthless PNGs in a fake swap transaction.

The pseudonymous 0xQuit posted details of how the victim, “s27,” lost BAYC #1584 and two Mutant Ape derivatives (#13168 and #13169) to the scammer.

BAYC #1584 is one of the 119 bubble gum apes (ape blowing a bubble gum) and has a rarity score of 111.99 out of 10,000, according to Rarity Tools. That implies it is relatively uncommon.

The victim entered into a direct swap trade with the scammer via a third-party service called swapkiwi. Unlike regular marketplaces like OpenSea, platforms like swapkiwi allow direct NFT swaps between collectors, reducing transaction (“gas”) fees.

Unknown to s27, the other participant in the trade put up knock-off NFTs in exchange for s27’s legitimate Bored Ape and Mutant Apes. The scammer used images of actual Bored Apes to create fake replicas and uploaded the same ones to OpenSea.

According to 0xQuit, the attacker took advantage of the way swapkiwi displays verified NFTs. Since the checkmark appears within the image, scammers can spoof this verification by simply taking an image of a Bored Ape and editing a checkmark onto it. 

0xQuit said that the checkmark should appear outside of the image itself to prevent copycat attacks. He added that if the collection is linked to the NFT’s contract address then it would be easier to check if the NFT was real.

Following the exchange, s27 received worthless pictures while the scammer made away with NFTs worth at least $570,000.

The rogue actor has since sold the bubble gum ape for 98 ETH ($337,000), which is significantly lower than the current BAYC floor price of 111 ETH ($382,000). Both Mutant Ape derivatives stolen in the fake swap transaction have also been sold off at prices lower than the floor price for the collection.

In response to the incident, swapkiwi has published a statement saying that it was working on improvements to its platform to prevent future occurrences.

The incident marks another case of a high-value NFT owner falling victim to social engineering hacks. While poor UI/UX on the part of NFT platforms is partly to blame, the situation is another reminder that web3 participants should be security conscious.

BAYC holders, along with other bluechip NFT collectors are likely to remain targets for rogue actors given the value of the possessions.

© 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.

Leap, a non-custodial crypto wallet for accessing the Terra ecosystem, has raised $3.2 million in a seed funding round.

CoinFund and Pantera Capital co-led the round, with Arrington Capital, Accel and Terraform Labs participating.

This was a private token sale round and will be used to increase Leap’s team size and launch mobile apps, the project’s founder Sanjeev Rao told The Block.

The current headcount of Leap is six and the firm plans to hire several people across product, engineering, design and growth functions. As for Android and iOS mobile apps, they are expected to launch in the next few months. Rao said early invites for the mobile apps will be sent later this month.

The Leap wallet was launched in November and is currently available as a Chrome browser extension. It allows users to store, send, swap and stake tokens on the Terra blockchain. Leap currently has over 4,500 users, according to Rao.

Leap can be seen as MetaMask for Ethereum and Phantom for Solana. Its closest competitors include Terraform Labs’ own wallet called Terra Station and XDEFI. When asked what Leap’s unique advantage is, Rao said the wallet has a user-friendly design, also being suitable for new-to-crypto users.

Leap started with a $50,000 grant from Terraform Labs. It plans to remain focused on Terra at least in the foreseeable future, although it is open to exploring going multi-chain, said Rao.

The Terra ecosystem is growing fast. It currently has the second-largest total valued locked (TVL), only after the Ethereum ecosystem, according to DeFi Llama. Terra’s current TVL is around $25 billion, while Ethereum’s is at over $125 billion, per DeFi Llama.

© 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.

Quick Take

• Avalanche is one the fastest growing L1 in the crypto space due to its EVM compatibility, low fees and latency, as well as its fast transaction finality 
• To further bolster the scalability of the Avalanche blockchain, Ava Labs introduced the concept of subnets, where unique ecosystems in the Avalanche network can be operated by different sets of validators
• Crabada, a popular game on Avalanche, recently launched its own native subnet on the Fuji testnet with its own set of validators
• Subnets are useful for scaling Avalanche because they allow a select subset of validators from the primary network to validate their own set of blockchains

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Quick Take

• Citi has emerged as a launchpad for execs hoping to get access to the booming digital assets space. 
• The Block has counted no fewer than 15 moves from Citi to a range of different crypto companies.

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Boba Network, an Ethereum Layer 2 scaling project that utilizes optimistic rollups, has raised $45 million in Series A funding at a $1.5 billion valuation.

Investors included Crypto.com, Huobi, BitMart, Kinetic Capital, Infinite Capital, Hack VC, Will Smith-led Dreamers VC and M13 Ventures (founded by Paris Hilton’s husband, Carter Reum). There was no lead investor for the round.

This was Boba’s first funding round and realized via a token sale, the project’s founder Alan Chiu told The Block. Chiu declined to share the terms of the token sale, but it appears that investors bought the BOBA token at a higher price than its current market price of around $1.50. BOBA’s current fully diluted valuation stands lower at about $740 million.

Chiu said the round was closed in the fourth quarter of 2021 “when market conditions were more bullish.” BOBA’s all-time high price was at around $8 in November.

With fresh capital in hand, Boba plans to scale its team and bring more developers to its platform, said Chiu. The current headcount of Boba is over 30 people and Chiu plans to double the team by the end of this year. As for growing the developer ecosystem, he intends to provide grants, launch an accelerator program and spend more on marketing.

Boba Network was launched in September by Enya, a core contributor of OMG Foundation. The network is built on Optimism, but its computational layer is different, said Chiu. It has a proprietary Hybrid Compute platform that addresses Ethereum’s computational limitations, according to Chiu.

“We built Boba to address the computational limitations of Ethereum. Everyone else was focused on making Ethereum faster and cheaper, which of course, is necessary, but there’s an additional dimension of scalability that’s been neglected — computational complexity,” said Chiu.

Boba’s current total value locked (TVL) is over $170 million, according to tracker L2Beat. Its rival Metis’s TVL stands far higher at around $530 million.

© 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.