US Treasury alerts crypto companies to their growing role in preventing ransomware payments and sanctioning evaders

Janet Yellen testifies before the House Finance Committee
  • The US Treasury reminded crypto companies of their growing responsibility to not enable ransomware payments, and to sanction evaders.
  • Ransomware payments have been on the rise this year as cryptocurrencies make payments by companies held hostage hard to trace.
  • “We need partners in the private sector to help prevent this illicit activity,” the US Treasury said.
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Crypto companies have a growing responsibility to help prevent ransomware payments and sanction evaders, the Treasury said in a statement on Friday.

Ransomware payments have surged in 2021 as cyber criminals take company data hostage and demand payment in the form of cryptocurrencies to unlock it. This makes payments both harder to trace and easier to make for companies looking to get their data back quickly.

Suspected ransomware payments hit $590 million in the first six months of the year, well above the $416 million paid in all of 2020, according to the Treasury department.

A ransomware attack against the Colonial Pipeline led to temporary gas shortages in the southeast earlier this year after the oil and gas company’s pipeline was shutdown for days. Colonial paid the ransomware attackers in cryptocurrency to remedy the situation.

“The virtual currency industry, including technology companies, exchangers, administrators, miners, wallet providers, and users, plays an increasingly critical role in preventing sanctioned persons from exploiting virtual currencies to evade sanctions and undermine U.S. foreign policy and national security interests,” the Treasury said in a statement.

This is the Treasury department’s first overt outreach to the crypto industry to help in preventing US sanction evaders and criminal activity that is enabled by cryptocurrencies, such as ransomware payments.

“Treasury is helping to stop ransomware attacks by making it difficult for criminals to profit from their crimes, but we need partners in the private sector to help prevent this illicit activity,” Deputy Treasury Secretary Wally Adeyemo said.

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NuCypher soars 1,134% in a single day as the altcoin touches $2 billion market valuation

NYSE trader

NuCypher, a little-known altcoin that bills itself as a decentralized threshold cryptography network, soared as much as 1,134% on Friday.

The surge catapulted NuCypher’s market valuation to more than $2 billion from about $200 million as one-day volume exploded 18,266% higher, according to data from CoinMarketCap. The altcoin hit a high of $3.58 before paring its gains by about 50% to $1.80.

While NuCypher celebrated its one-year anniversary on Friday, there was no clear indication as to what developments drove such a sharp surge in demand for the altcoin, which is now the 79th largest cryptocurrency by market value.

“One year ago today the NuCypher network launched. Since then, thousands of stakes and dozens of dapp developers have discovered threshold cryptography,” NuCypher’s Twitter profile said Friday morning.

The surge in NuCypher came as bitcoin continued its October rally and hit $60,000 amid ongoing speculation that the SEC may be close to approving the first bitcoin futures ETF.

NuCypher has 687.5 million coins in circulation and a max supply of 3.9 billion coins. NuCypher, which is built on the ethereum network, serves as an encryption service for public blockchains and offers end-to-end encrypted data sharing on public blockchains and decentralized storage solutions.

NuCypher’s white paper was first published in 2017, and the altcoin began trading on October 15, 2020, at a price of $0.23 and a market valuation of $2.4 million.

NuCypher chart price
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Bitcoin futures premium doubles ahead of SEC’s potential approval of an ETF next week

Bitcoin
Bitcoin

  • Bitcoin futures premium has doubled this month as the SEC rules on the potential of approval of several ETFs.
  • SEC Chairman has recently voiced his support for bitcoin ETFs that hold futures contracts rather than directly holding bitcoin.
  • The SEC is set to either approve, deny, or delay bitcoin ETF proposals from four firms over the next two weeks.
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The premium tied to bitcoin futures contracts has doubled this month as investors anticipate the SEC’s potential approval of several bitcoin ETFs over the next two weeks.

The SEC is set to either approve, deny, or delay bitcoin ETF proposals from ProShares, Valkyrie Investments, Invesco, and VanEck, which were all submitted to the regulatory agency in August.

While still wary of a pure bitcoin ETF due to concerns for potential fraud, SEC Chairman Gary Gensler has voiced his support in recent weeks for a bitcoin ETF that buys underlying futures contracts on the cryptocurrency rather than directly buying bitcoin itself.

Since Gensler has made clear his thoughts on the possibility of bitcoin futures-based ETF, several issuers have submitted new ETF applications that would utilize that same approach, including Cathie Wood’s ARK Invest.

With approval of a bitcoin futures ETF looking more likely than ever, the annualized premium of CME bitcoin futures prices over bitcoin’s spot value was 15%, compared to an average of 7.7% over the first nine months of the year, according to the Wall Street Journal.

Given that there could very soon be a surge in demand for bitcoin futures contracts due to the onslaught of new ETFs, the Chicago Mercantile Exchange is planning to raise the limit on the number of bitcoin futures contacts a single firm can hold.

The SEC also seems to be ramping up education about bitcoin futures contracts ahead of their decision on the ETFs later this month. On Thursday, the SEC Investor Education Twitter account shared a link to more information on bitcoin futures and said, “Before investing in a fund that holds Bitcoin futures contracts, make sure you carefully weigh the potential risks and benefits.”

Whichever firm receives approval for the first bitcoin futures-based ETF could see a significant first-mover advantage as investors seek exposure to bitcoin in their traditional brokerage and retirement accounts. Bitcoin is up more than 30% so-far in October, and is up just over 100% year-to-date.

Bitcoin price chart
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Beijing expands regulatory crackdown to brokerages that give Chinese investors access to US stocks

china chinese stock market traders investors screen
  • Beijing’s regulatory crackdown that began last year is now spreading to Chinese brokerage firms.
  • China’s personal data privacy law that takes effect on November 1 could lead to violations and compliance risks for brokerages.
  • Shares of UP Fintech and Futu Holdings fell 24% and 15%, respectively, in Thursday trades.
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The year-long regulatory crackdown from Beijing has now spread to Chinese brokerage firms that give mainland investors access to trade US stocks.

The state-run People’s Daily newspaper said Chinese online brokerages could face violations and compliance risks once a new data privacy law takes effect on November 1, according to Reuters. They give Chinese investors access to securities that trade in other markets like the US and Hong Kong.

This latest regulatory crackdown follows an ongoing trend of Chinese authorities going after different industries, from Jack Ma’s Alibaba and Ant Group, to private tutoring companies and video game firms.

The new data privacy rule will regulate the export of personal information, which would make compliance difficult for online brokerage firms that offer cross-border trading services.

Shares of UP Fintech and Futu Holdings fell as much as 24% and 15%, respectively, in Thursday trades. These Chinese brokerages don’t have licenses in mainland China, but allow Chinese citizens to open up accounts after submitting personal information derived from IDs, tax records, and bank statements.

The People’s Daily asked, “after personal information is collected, where does it go?”

If brokerage firms are unable to comply or adapt to the new privacy data law taking effect next month, they could be forced to cut off mainland Chinese investors’ access to trading US and other foreign stocks.

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Plug Power jumps 13% after it partners with Airbus to study and develop hydrogen-powered air travel

Plug Power
Plug Power forklift system.

  • Plug Power surged 13% on Wednesday after the company inked hydrogen partnerships with Airbus and Phillips 66.
  • The hydrogen fuel-cell developer will work with Airbus on a hydrogen-powered airport feasibility study.
  • Plug Power also said it signed a MOU with Phillips 66 to collaborate on hydrogen business opportunities.
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Plug Power surged as much as 13% on Wednesday after the hydrogen fuel-cell developer said it inked partnerships with Airbus and Phillips 66.

The Latham, NY-based company partnered with Airbus to conduct a feasibility study of bringing hydrogen to future aircraft and airports. Airbus is working towards a goal of bringing zero-emission aircraft to market by 2035, and it thinks hydrogen could play a role in that goal.

Airbus will work closely with Plug Power to develop a joint study and roadmap that could deliver hydrogen to aircraft and the airport ecosystem in the future. Plug Power will build deployment scenarios for green hydrogen infrastructure at airports, while Airbus will provide insight on hydrogen aircraft characteristics.

“This partnership with Plug Power will enable us to leverage their expertise to decarbonize airports while preparing them for the arrival of hydrogen aircraft by 2035,” Airbus Vice-President Glenn Llewellyn said.

Separately, Plug Power signed a memorandum of understanding to collaborate on the development of hydrogen-based business opportunities with Phillips 66, a diversified oil refiner that also operates retail gas stations.

The companies will explore how to deploy Plug Power’s technology within Phillips 66’s operations, including scaling hydrogen into the industrial sector, advancing hydrogen fueling opportunities, and developing hydrogen-related infrastructure.

Also aiding to a boost in Plug Power’s stock on Wednesday is an upgrade from Morgan Stanley. The bank raised its price target on Plug Power to $40 from $35, representing potential upside of 34%, and upgraded it to “Overweight” from “Equal-weight.”

Plug Power stock price
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Bitcoin could hit $100,000 by 2023 as the cryptocurrency’s latest rally draws momentum traders, Fidelity director says

Bitcoin and fiat
Bitcoin and fiat currency.

  • Bitcoin still has more upside left, with Fidelity director Jurrien Timmer expecting a surge to $100,000 by 2023.
  • Timmer believes the recent rally in bitcoin will be further fueled by momentum traders.
  • Bitcoin’s 31% October rally is “sustainable” and is “not a bubble that’s about to burst,” Timmer said.
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The ongoing rally in bitcoin can continue to record heights over the next two years, according to Fidelity director of Global/Macro Jurrien Timmer.

Based on his proprietary supply-and-demand model, Timmer sees bitcoin reaching $100,000 by 2023 as momentum traders begin to buy into the recent rally.

“This rally has come with little fanfare and doesn’t seem driven by momentum chasers. The percentage of coins held by short-term ‘tourists’ is down to just 15%. This tells me there could be room to run if momentum chasers pile in,” Timmer said.

Most price bottoms in bitcoin have occurred when coins held by short-term “tourists” was closer to 30%, he added.

Bitcoin rose 2% to $56,917 on Tuesday and is up 31% so far in October, with the popular cryptocurrency reclaiming several key resistance levels.

But Timmer doesn’t see bitcoin’s recent move as “excessive,” based on the relative price action between bitcoin and gold. “This is actually is a pretty sustainable move, and it’s not a bubble that’s about to burst,” he said an interview with CNBC on Wednesday.

If bitcoin does hit $100,000 price, many believe the cryptocurrency could become a threat to the US dollar and its status as the reserve currency of the world. But Timmer says not so much.

“I really don’t think bitcoin threatens the dollar or the dollar’s reserve status. Bitcoin’s value proposition is that ultimately it goes from just being a store of value to also being a medium of exchange, and that depends on second layer [developments] that are being built right now,” Timmer said.

In fact, Timmer believes bitcoin’s growing reach could strengthen the US dollar’s status as the reserve currency used globally.

“Maybe [bitcoin] actually further ensures that the dollar will maintain its reserve status because all of a sudden currency is going to be available in farther flung reaches of the world, through bitcoin, and it’s still probably going to be connected to the dollar in some way,” Timmer said.

Bitcoin supply and demand chart
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Volatile energy markets are here to stay if investment in sustainable power fails to keep up with energy demand, IEA warns

Solar installer working
Solar panels.

  • Recent volatility in energy prices could become the norm if investments in renewable sources aren’t enough to meet demand, the IEA warned.
  • “We are not investing enough to meet future energy needs, and the uncertainties are setting the stage for a volatile period ahead,” the agency said.
  • More investments in renewable energy are necessary to reduce carbon emissions and to prevent an economic shock from a surge in oil prices, the IEA said.
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A surge in energy prices in Europe and Asia due to an ongoing supply crunch could become the norm if investments in renewable sources aren’t accelerated, the International Energy Agency warned in its annual outlook report.

The watchdog group said that while demand for energy continues to surge as global population growth continues and millions of people are lifted out of poverty every year, it will be essential for supply to play catch-up to avoid an ongoing surge in oil, coal, and natural gas prices.

“We are not investing enough to meet future energy needs, and the uncertainties are setting the stage for a volatile period ahead,” the IEA said.

A lack of investment in renewable energy sources like solar and wind could be a lose-lose situation for the global population, as it would lead to a continued rise in carbon emissions and could also contribute to an economic shock if energy prices stay elevated.

To achieve the goal of transitioning to net-zero emissions by 2050, the energy grid needs to play a delicate balancing act in matching supply with demand when transitioning away from fossil fuels and toward less carbon-heavy alternatives.

“If the supply side moves away from oil or gas before the world’s consumers do, then the world could face periods of market tightness and volatility. Alternatively, if companies misread the speed of change and over-invest, then these assets risk under-performing or becoming stranded,” the IEA report said.

The world is grappling with that imbalance after coming out of the pandemic, as demand was underestimated and energy suppliers are struggling to catch up. Oil prices are up 60% year-to-date, and US natural gas prices have more than doubled.

To meet the expected surge in energy demand and at the same time reach a net-zero emission goal by 2050, the IEA forecasts that $4 trillion in annual spending on renewable energy will be needed by 2030. Much of that funding must come from the private sector, but leadership is required.

“Clear signals and direction from policy makers are essential. If the road ahead is paved only with good intentions, then it will be a bumpy ride indeed,” the IEA report said.

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SEC rule meant to protect retail investors from pump-and-dump schemes ended up giving an edge to professionals

nyse trader
  • A new SEC rule meant to protect retail investors from pump-and-dump schemes has also blocked access to thousands of over-the-counter stocks.
  • The new rule prevents brokers from providing price quotations on OTC stocks that don’t release up-to-date financials.
  • But the rule has also restricted individual investors’ ability to buy stocks of sound companies, giving professional investors an edge.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

A new SEC rule created to protect investors from pump-and-dump schemes has had the unintended consequence of giving professional investors an edge over individual investors since it went into effect at the end of September.

As most pump-and-dump operations take advantage of illiquid, over-the-counter securities that don’t provide current financial information, the rule sought to prevent brokers from providing price quotations on securities that don’t have up-to-date financials.

Technological advancements related to the rule change “enable us to require that information in the OTC market be more timely, enabling investors to make better informed investment decisions, and reducing fraud in these markets where retail presence is significant and, unfortunately, pump-and-dump and other frauds are too common,” former SEC Chairman Jay Clayton said last year.

Of the more than 12,000 securities that trade on the OTC Markets, more than 2,000 of them are currently subject to the price-quotation limitation.

But while the rule change might make it harder for schemers to inflate stock prices with false or misleading information and then dump shares on unwitting investors, it also makes it nearly impossible for retail investors to buy OTC securities of profitable, dividend-paying businesses that don’t post updated financials.

That has led to a drop in demand for many OTC securities, resulting in sharp declines in stock prices. Retail investors that hold an OTC stock that now falls under the new SEC rule are only left with the option of selling their security, not buying more.

One OTC security that saw a big drop after the rule went into effect was Canandaigua National, an upstate New York community bank that is profitable and offers a 4% dividend yield. The stock, which barely traded hands even before the rule change, saw its price fall 27% virtually over night.

“We find ourselves in a situation where there are real opportunities sitting in front of us, but we can’t take advantage of them!” retired investor Dave Wetzel told The Wall Street Journal.

But professional investors can still buy OTC stocks that fall under the SEC rule, which is meant to protect individual investors who may have access to less information.

And David Waters of Alluvial Capital Management is doing just that. “It’s created an opportunity for professionals at the expense of retail investors. It’s an unfair transfer of value,” Waters told The Wall Street Journal.

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An SEC rule meant to protect retail investors from pump-and-dump schemes ended up restricting access to markets, giving an edge to professionals

nyse trader
  • A new SEC rule meant to protect retail investors from pump-and-dump schemes has also blocked access to thousands of over-the-counter stocks.
  • The new rule prevents brokers from providing price quotations on OTC stocks that don’t release up-to-date financials.
  • But the rule has also restricted individual investors’ ability to buy stocks of sound companies, giving professional investors an edge.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

A new SEC rule created to protect investors from pump-and-dump schemes has had the unintended consequence of giving professional investors an edge over individual investors since it went into effect at the end of September.

As most pump-and-dump operations take advantage of illiquid, over-the-counter securities that don’t provide current financial information, the rule sought to prevent brokers from providing price quotations on securities that don’t have up-to-date financials.

Technological advancements related to the rule change “enable us to require that information in the OTC market be more timely, enabling investors to make better informed investment decisions, and reducing fraud in these markets where retail presence is significant and, unfortunately, pump-and-dump and other frauds are too common,” former SEC Chairman Jay Clayton said last year.

Of the more than 12,000 securities that trade on the OTC Markets, more than 2,000 of them are currently subject to the price-quotation limitation.

But while the rule change might make it harder for schemers to inflate stock prices with false or misleading information and then dump shares on unwitting investors, it also makes it nearly impossible for retail investors to buy OTC securities of profitable, dividend-paying businesses that don’t post updated financials.

That has led to a drop in demand for many OTC securities, resulting in sharp declines in stock prices. Retail investors that hold an OTC stock that now falls under the new SEC rule are only left with the option of selling their security, not buying more.

One OTC security that saw a big drop after the rule went into effect was Canandaigua National, an upstate New York community bank that is profitable and offers a 4% dividend yield. The stock, which barely traded hands even before the rule change, saw its price fall 27% virtually over night.

“We find ourselves in a situation where there are real opportunities sitting in front of us, but we can’t take advantage of them!” retired investor Dave Wetzel told The Wall Street Journal.

But professional investors can still buy OTC stocks that fall under the SEC rule, which is meant to protect individual investors who may have access to less information.

And David Waters of Alluvial Capital Management is doing just that. “It’s created an opportunity for professionals at the expense of retail investors. It’s an unfair transfer of value,” Waters told The Wall Street Journal.

Read the original article on Business Insider

Bitcoin just flashed a counter-trend signal that suggests a pullback is likely as crypto becomes overbought, according to Fairlead Strategies

Bitcoin
Bitcoin

  • A counter-trend signal in bitcoin has Katie Stockton of Fairlead Strategies advising clients to hold off on buying the cryptocurrency for now.
  • Stockton expects a two-week period of sideways consolidation that could include a 16% pullback before bitcoin’s long-term uptrend continues.
  • “We would view any resulting consolidation as temporary,” Stockton said.
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Bitcoin’s 33% rally in October has catapulted the cryptocurrency into short-term overbought territory and flashed a counter-trend signal that could lead to choppy trading ahead, according to Katie Stockton of Fairlead Strategies.

In a note to clients on Sunday, Stockton advised clients who are looking to add crypto exposure to hold off on buying bitcoin for the next two weeks after a DeMARK “13” signal flashed for bitcoin.

The counter-trend exhaustion signal suggests a two-week consolidation phase is in store for bitcoin, which could include a pullback to its cloud support level near $48,000. That represents short-term downside potential of 16% from current levels.

The DeMARK sell signal was also affirmed by a downturn in the daily stochastics indicator from overbought levels, according to Stockton. But the long-term uptrend in bitcoin remains intact, leading Stockton to view any resulting consolidation as “temporary.”

“We would liken this signal to the one that was generated in January,” Stockton said. In January, the same counter-trend signal flashed right before bitcoin fell 25% from about $40,000 to about $30,000. That consolidation phase lasted about three weeks before bitcoin went on to print new all-time highs for three consecutive months.

And after bitcoin decisively cleared the $52,900 resistance level last week, Stockton sees the cryptocurrency targeting its prior all-time-highs of about $65,000, representing potential upside of at least 13% from current levels.

Despite the counter-trend signal triggered on Sunday, bitcoin continued its grind higher, jumping about 2% in Monday’s trading session.

Bitcoin technical analysis chart
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