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US Treasury Sanctions 2nd Cryptocurrency Exchange, DOJ Seizes $6.1 Million

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US Treasury Sanctions 2nd Cryptocurrency Exchange, DOJ Seizes $6.1 Million

US Treasury Sanctions 2nd Cryptocurrency Exchange, Seizes $6.1 Million

The U.S. Treasury Department has sanctioned a second cryptocurrency exchange “for facilitating financial transactions for ransomware actors.” Two ransomware operators have also been sanctioned and $6.1 million in funds were seized.

US Treasury Sanctions Another Cryptocurrency Exchange

The U.S. Department of the Treasury announced Monday that its Office of Foreign Assets Control (OFAC) has sanctioned ransomware operators and a cryptocurrency exchange.

Crypto exchange Chatex and its associated support network have been sanctioned “for facilitating financial transactions for ransomware actors,” the Treasury states. “Analysis of Chatex’s known transactions indicate that over half are directly traced to illicit or high-risk activities such as darknet markets, high-risk exchanges, and ransomware.”

Chatex has direct ties with Suex OTC, the first crypto exchange sanctioned by the OFAC on Sept. 21, the Treasury noted.

The OFAC also sanctioned Ukrainian Yaroslav Vasinskyi and Russian Yevgeniy Polyanin Monday “for their part in perpetuating Sodinokibi/Revil ransomware incidents against the United States.” The Treasury added that the two are “part of a cybercriminal group that has engaged in ransomware activities and received more than $200 million in ransom payments paid in bitcoin and monero.”

The Treasury explained: “All property and interests in property of the designated targets that are subject to U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from engaging in transactions with them. Additionally, any entities 50 percent or more owned by one or more designated persons are also blocked.”

The announcement describes:

While most virtual currency activity is licit, virtual currency remains the primary mechanism for ransomware payments, and certain unscrupulous virtual currency exchanges are an important piece of the ransomware ecosystem.

DOJ Seizes $6.1 Million in Funds Held at FTX Trading

The U.S. Department of Justice (DOJ) independently announced Monday that it has seized $6.1 million from Polyanin, noting that both Polyanin and Vasinskyi have been “charged with deploying Sodinokibi/Revil ransomware to attack businesses and government entities in the United States.”

The $6.1 million in funds seized are traceable to alleged ransom payments received by Polyanin, the Justice Department said. The funds were held in an “FTX Trading Limited account” in the name of “Evegnii Igorevich Polianin” and/or “Evgeniy Igorevich Polyanin,” the DOJ’s seizure warrant shows.

According to blockchain analytics firm Chainalysis, both individuals received substantial amounts of cryptocurrency. The firm detailed that across all sanctioned addresses named:

Polyanin received over $11.5 million worth of bitcoin and over $2 million worth of USDT_ETH, while Vasinskyi received over $900,000 worth of bitcoin.

What do you think about the U.S. Treasury sanctioning another crypto exchange and seizing $6.1 million? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Low inflation or bust: Analysts say the Fed has no choice but to continue raising rates

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Low inflation or bust: Analysts say the Fed has no choice but to continue raising rates

As economic conditions continue to worsen, financial experts worldwide are increasingly placing the blame at the feet of the United States Federal Reserve after the central bank was slow to respond to rising inflation early on.

Financial markets are currently experiencing their worst stretch of losses in recent history, and it doesn’t appear that there is any relief in sight. May 24 saw the tech-heavy Nasdaq fall another 2%, while Snap, a popular social media company, shed 43.1% of its market cap in trading on May 23. 

This past couple of months have been absolutely brutal for the markets… 8 consecutive weeks of red candles in the #SPX, #NASDAQ and #BTC… no significant bounces pic.twitter.com/hgU2VwIoxh

— Crypto Phoenix (@CryptoPheonix1) May 24, 2022

Much of the recent turmoil again comes back to the Fed, which has embarked on a mission to raise interest rates in an attempt to get inflation under control, financial markets be damned. 

Here’s what several analysts are saying about how this process could play out and what it means for the price of Bitcoin (BTC) moving forward. 

Will the Fed tighten until the markets break?

Unfortunately for investors looking for short-term relief, economist Alex Krüger thinks that “The Fed will not stop tightening unless markets break (far from that) or inflation drops considerably and for *many* months.”

One of the main issues affecting the psyche of traders is the fact that the Fed has yet to outline what inflation would need to look like for them to take their foot off the rate-hike gas pedal. Instead, it simply reiterates its goal “’to see clear and convincing evidence inflation is coming down’ towards its 2% target.”

According to Krüger, the Fed will “need to see Y/Y [year-over-year] inflation drop 0.25%–0.33% on average every month until September” to meet its goal of bringing down inflation to the 4.3%–3.7% range by the end of the year.

Should the Fed fail to meet its PCE inflation target by September, Krüger warned about the possibility that the Fed could initiate “more hikes *than what’s priced in*” and also begin exploring the sale of mortgage-backed securities as part of a quantitative tightening campaign.

Krüger said:

“Then markets would start shifting to a new equilibrium and dump hard.”

A setup for double-digit sustained inflation

The Fed’s responsibility for the current market conditions was also touched on by billionaire investor and hedge fund manager Bill Ackman, who suggested that “The only way to stop today’s raging inflation is with aggressive monetary tightening or with a collapse in the economy.”

In Ackman’s opinion, the Fed’s slow response to inflation has significantly damaged its reputation, while its current policy and guidance “are setting us up for double-digit sustained inflation that can only be forestalled by a market collapse or a massive increase in rates.”

Due to these factors, demand for exposure to stocks has been muted in 2022 — a fact evidenced by the recent decline in stock prices, especially in the tech sector. For example, the tech-heavy Nasdaq index is now down 26% on the year. 

With the cryptocurrency sector being highly tech-focused, it’s not surprising that weakness in the tech sector has translated to weakness in the crypto market, a trend that could persist until there is some form of resolution to high inflation.

Related: Bitcoin price returns to weekly lows under $29K as Nasdaq leads fresh US stocks dive

How could Bitcoin fare going into 2023?

According to Krüger, the “base case scenario for upcoming price trajectory is a summer range that starts with a rally followed by a drop back to the lows.”

BTC/USDT 1-day chart. Source: Twitter

Kruger said:

“For $BTC, that rally would take price to the start of the Luna dump (34k to 35.5k).”

Crypto trader and pseudonymous Twitter user Rekt Capital offered further insight into the price levels to keep an eye on for a good entry point moving forward, posting the following chart showing Bitcoin relative to its 200-day moving average.

BTC/USD 1-week chart. Source: Rekt Capital

Rekt Capital said:

“Historically, #BTC tends to bottom at or below the 200-MA (orange). The 200-MA thus tends to offer opportunities with outsized ROI for $BTC investors (green). […] Should BTC indeed reach the 200-MA support… It would be wise to pay attention .”

The overall cryptocurrency market capitalization now stands at $1.258 trillion, and Bitcoin’s dominance rate is 44.5%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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ECB: One in ten households in eurozone population centers now own cryptocurrency

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ECB: One in ten households in eurozone population centers now own cryptocurrency

The survey took place in the EU’s major economic areas such as France, Germany, Italy, Spain, Belgium, and the Netherlands.

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ECB: One in ten households in eurozone population centers now own cryptocurrency

On Tuesday, the European Central Bank, or ECB, published the results of a new survey conducted in six eurozone areas; the Netherlands, Spain, Italy, Belgium, France, and Germany. Together, approximately 10% of respondents from the surveyed countries said they own cryptocurrencies. Out of this group, only 6% of respondents said they own digital assets worth more than 30,000 euros. Meanwhile, 37% of respondents said they owned up to 999 euros in crypto.

Across all of the countries surveyed, investors in the fifth income quintile (or the wealthiest 20% of the population) consistently had the highest proportion of cryptocurrency ownership relative to other income groups. The Consumer Expectation Survey asked adults aged 18 to 70 if they or anyone in their household owned financial assets in various categories, such as crypto-assets.

The survey was included in a new report published by the ECB the same day regarding the growing adoption of crypto assets despite their risk factors. As cited by the ECB, 56% of respondents in a recent Fidelity survey said they had some exposure to crypto-assets, up from 45% in 2020. Increased availability of crypto-based derivatives and securities on regulated exchanges, such as futures, exchange-traded notes, exchange-traded funds, and OTC-traded trusts, have contributed to the momentum.

In addition, increased regulation has been taken as a sign that public authorities endorse crypto. As an example, the ECB cited Germany allowing institutional funds to invest up to 20% of their holdings in crypto. However, the ECB highlighted at the end of the report that if current trends in digital asset adoption continue, then they will eventually pose a threat to financial stability.

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Weak stocks and declining DeFi use continue to weigh on Ethereum price

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Weak stocks and declining DeFi use continue to weigh on Ethereum price

Ether’s (ETH) 12-hour closing price has been respecting a tight $1,910 to $2,150 range for twelve days, but oddly enough, these 13% oscillations have been enough to liquidate an aggregate of $495 million in futures contracts since May 13, according to data from Coinglass.

Ether/USD 12-hour price at Kraken. Source: TradingView

The worsening market conditions were also reflected in digital asset investment products. According to the latest edition of CoinShare’s weekly Digital Asset Fund Flows report, crypto funds and investment products saw a $141 million outflow during the week ending on May 20. In this instance, Bitcoin (BTC) was the investors’ focus after experiencing a $154 weekly net redemption.

Russian regulation and crumbling U.S. tech stocks escalate the situation

Regulatory uncertainty weighed on investor sentiment after an updated version of the Russian mining law proposal came to light on May 20. The document in the lower chamber of the Russian parliament no longer contained the obligation for a crypto mining operators registry nor the one-year tax amnesty. As cited by local media, the legal department of the Duma stated that these measures could “possibly incur costs on the federal budget.”

Additional pressure on Ether price came from the Nasdaq Composite Index’s 2.5% downturn on May 24. In addition, the heavily-tech stock-driven indicator was pressured after social media platform Snap (SNAP) tumbled 40%, citing rising inflation, supply chain constraints and labor disruptions. Consequently, Meta Platforms (FB) shares fell by 10%.

On-chain data and derivatives are in favor of bears

The number of active addresses on the largest Ethereum network’s decentralized applications (DApps) has dropped by 27% from the previous week.

Ethereum network’s most active DApps in USD terms. Source: DappRadar

The network’s most active decentralized applications saw a substantial reduction in users. For instance, Uniswap (UNI) V3 weekly addresses decreased by 24%, while Curve (CRV) faced 52% fewer users.

To understand how professional traders, whales and market makers are positioned, let’s look at Ether’s futures market data.

Quarterly futures are used by whales and arbitrage desks due, primarily, to their lack of a fluctuating funding rate. These fixed-month contracts usually trade at a slight premium to spot markets, indicating that sellers request more money to withhold settlement longer.

These futures should trade at a 5% to 12% annualized premium in healthy markets. This situation is technically defined as “contango” and is not exclusive to crypto markets.

Ether futures 3-month annualized premium. Source: Laevitas

Related: Bitcoin price returns to weekly lows under $29K as Nasdaq leads fresh U.S. stocks dive

Ether’s futures contracts premium went below the 5% neutral-market threshold on April 6. There’s an evident lack of conviction from leverage buyers because the current 3% basis indicator remains depressed.

Ether might have gained 2% after testing the $1,910 channel resistance on May 24, but on-chain data shows a lack of user growth, while derivatives data point toward bearish sentiment.

Until there’s some morale improvement that boosts the use of decentralized applications and the Ether futures premium regains the 5% neutral level, the odds of the price breaking above the $2,150 resistance seems low.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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