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Crypto Conglomerate DCG Under Investigation By U.S Authorities.




Digital Currency Group, better known as DCG, is currently under investigation by U.S. authorities. 

According to a report by Bloomberg, U.S. prosecutors in New York – specifically, the city of  Brooklyn  – are assessing the internal transfers between the multibillion-dollar crypto conglomerate and its crypto lending arm, Genesis Global Capital.

The crypto lending company has been in the spotlight for a long time following its heavy losses last year. 

Based on anonymous sources that are close to the investigation, the federal prosecutors are already conducting interviews with certain personnel and requesting office documents. 

Commenting on the matter, a DCG spokesman denied the American venture capital firm was under any investigation.

He said:

“DCG has a strong culture of integrity and has always conducted its business lawfully. We have no knowledge of or reason to believe that there is any Eastern District of New York investigation into DCG.”

That said, Bloomberg’s report indicated that DCG could be involved in a two-way battle as the company is also being investigated by the Securities and Exchange Commission(SEC). However, there has been no indictment on DCG by any party so far, nor has any tangible information been disclosed by both U.S authorities. 

DCG And Its Relationship With Genesis

The problems of Genesis Global Capital started mid-last year following the collapse of prominent hedge fund company Three Arrows Capital. During this period, the crypto lending services recorded severe losses of $1.2 billion.

A few months later, Genesis also suffered another hit after the billion-dollar crypto exchange FTX filed for bankruptcy. The fall of FTX created a liquidity crisis for Genesis, resulting in the company placing a suspension on withdrawal and loan requests to date.

To assuage public concerns, DCG has always distanced itself from Genesis’s ongoing words stating the firm operated as an autonomous entity. 

In a circular to its shareholders in November 2022, DCG’s CEO and founder, Barry Silbert, disclosed all existing loans between both companies. He further said that all loans were made on an “arm’s length basis”, and the repayment was structured according to existing market interest rates at that time. 

Will The Crypto Market Survive A Hit On DCG?

Digital Currency Group is one of the biggest crypto conglomerates in the industry, with an AUM value of $50 billion as of September 2021. 

In addition to Genesis Global Capital, the company also owns other subsidiaries, including Grayscale Investments – a major digital asset manager that holds over 600 BTC tokens, CoinDesk media publication, popular Bitcoin mining service Foundry, and Luno, a cryptocurrency exchange with over 10 million customers.

If the current investigations into DCG by the U.S. authorities reveal any information that causes a negative sentiment around the conglomerate and its subsidiaries, the ripple effect could be quite catastrophic for the entire crypto market. 

However, there is currently no indication of such happening, and investors may remain calm pending the release of any further information on the investigations. 

So far, the crypto market has been steadily recovering following the FTX collapse in November. At the time of writing, the market leader, Bitcoin has gained by 2.4% in the last seven days and is currently trading at $16,937.52 according to data from Coinbase. The premier cryptocurrency holds the largest supply of crypto assets, with a total market cap of  $326.141 billion.

BTC trading with a market cap of $326.141B | Source: BTC Chart on

Featured Image: Daily FX, Chart from

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Why Real Regulatory Change In Crypto Has Not Happened



Why Real Regulatory Change In Crypto Has Not Happened

Legislators need to educate themselves on Web3 if they care about protecting consumers, Steven Eisenhauer, chief risk and compliance officer at Ramp, writes.

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South Korea to deploy cryptocurrency tracking system in 2023



South Korea to deploy cryptocurrency tracking system in 2023

The Ministry of Justice in South Korea announced plans to introduce a crypto-tracking system to counter money laundering initiatives and recover funds linked to criminal activities.

The “Virtual Currency Tracking System” will be used to monitor transaction history, extract information related to transactions and check the source of funds before and after remittance, according to local media outlet khgames.

While the system is slated to be deployed in the first half of 2023, the South Korean ministry shared plans to develop an independent tracking and analysis system in the second half of the year. A rough translation of the ministry’s statement reads:

“In response to the sophistication of crime, we will improve the forensic infrastructure (infrastructure). We will build a criminal justice system that meets international standards (global standards).”

The South Korean police previously established an agreement with five local crypto exchanges to cooperate in criminal investigations and ultimately create a safe trading environment for crypto investors.

Related: South Korean prosecutors request arrest warrant for Bithumb owner: Report

The South Korean Supreme Court ruled that crypto exchange Bithumb must pay damages to investors over a 1.5-hour service outage on Nov. 12, 2017.

The finalized ruling from the supreme court ordered damages ranging from as little as $6 to around $6,400 be paid to the 132 investors involved.

“The burden or the cost of technological failures should be shouldered by the service operator, not [the] service users who pay commission for the service,” the court stated.

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Data Shows 50% Of Bitcoin Hashrate Controlled By Two Mining Pools



50% of Bitcoin hashrate Controlled by Two Mining Pools

Bitcoin hashrate is becoming highly centralized, with a few mining pools controlling most of the blockchain mining power. The latest data from Mempool indicates that 50% of the total hashrate is held by Foundry USA and Antpool. 

A Highly Centralized Mining Network

Foundry USA has maintained a hashrate of over 30% of the total Bitcoin network for several weeks. It became the first mining pool of non-Chinese origin to lead the list in November 2021, following the ban on Bitcoin mining in China in the middle of the same year. 

Back then, Foundry USA contributed 17% of the total Bitcoin hashrate. Today, the US-based pool averages 34.1% of the mining power, equivalent to about 104 EH/s, considering that the Bitcoin hashrate is around 300 EH/S. 

Related Reading: First Bitcoin Mining Powered By Nuclear Energy To Open In The U.S. In Q1 This Year 

Antpool comes in second with about 18.0% of the total hashrate equivalent to about 58 EH/s. The Chinese-based pool used to be the largest Bitcoin pool but was affected by the ban on crypto mining which caused several miners in the region to migrate. 

Bitcoin Pool distribution records on Dec. 29, 2022 (3-day stats)/

What Is Behind This Trend?

The graph shows that over 80% of Bitcoin’s mining power is concentrated among just 5 pools. This contrasts with the beginning of 2022, when these five mining pools barely exceeded 60% of the hashrate. 

Some factors could have contributed to this rise. One of which is the location of the servers of the said pools. The closer the servers are to the pools and mining facilities, the lower the information transfer latency. This means that a miner will likely get more shares in the mining process and earn more Bitcoin (BTC) by connecting to a closer server. 

Bitcoin hashrate difficulty
Bitcoin hashrate difficulty for January/

Another factor is the financial incentives offered by these major mining pools. Bigger mining pools can consistently distribute profits to their members, who pay a commission for mining with their resources, driving more miners to their ecosystem. This is evident with the high mining difficulty in recent weeks due to the bullish movement of Bitcoin, making it difficult for smaller mining pools to be profitable. 

Related Reading: Why The S&P 500 Could Help Send Bitcoin Soaring Higher

However, Bitcoin’s highly centralized mining system poses significant dangers to the cryptocurrency. The miners could agree to reject transactions that do not meet a specific parameter leading to a 51% attack. 

We’ve seen such attacks occur on other Proof-of-Work blockchains like Ethereum Classic, which could be a problem for Bitcoin. In addition, these pools are recognized companies and could face pressures from regulatory agencies trying to control activities on the Bitcoin network. 

Bitcoin Price

So far, Bitcoin is still maintaining its bullish trend, with the leading cryptocurrency up by 40% since the start of the year. As of the time of writing, Bitcoin is trading at $23,400, according to data from 

Bitcoin Price on January 28| Source: BTCUSDT on Binance, TradingView
Bitcoin Price on January 28| Source: BTCUSDT TradingView

Featured image from Pixabay, charts from Trading View, Coinwarz, and Mempool

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