Weekly Watch on Cryptocurrency, El Salvador’s tryst with Bitcoin

This week is significant because El Salvador became the first nation in the world to formally embrace Bitcoin as legal money on September 7, 2022. A day before the law went into effect, the cost of one bitcoin exceeded USD 50,000. However, on Friday, it was valued USD 20,634.97.

El Salvador’s Bitcoin experiment: On June 8, 2021, the South American nation’s legislative assembly approved the Bitcoin Law. President Nayib Bukele began tweeting about his most recent cryptocurrency purchases for the nation in September, even as Bitcoin prices reached their peak and then plummeted. El Salvador was forewarned by the IMF that the decision carried financial risks that might have an impact on consumers.

According to the website Nayib Tracker, El Salvador held about 2,381 BTC as of Friday and had lost 54.07 percent  on its investment.

Residents of El Salvador have also expressed dissatisfaction with the government-run Chivo virtual wallet, which they utilise for Bitcoin transactions. These included claims of missing money and identity theft. In February 2022, the El Salvadorian government switched the wallet’s technology vendor.

The nation has also denied allegations that its investments have lost money. Alejandro Zelaya, El Salvador’s finance minister, had noted that no Bitcoin had been sold at the current market values and that the country’s investment in bitcoin represented less than 0.5 percent  of its total budget. A Bitcoin bond issuance is likewise currently on hold.  El Salvador experienced a sharp increase in tourist in the year it adopted Bitcoin, despite market conditions.

Ronin’s returns are secure:  On September 8, the blockchain analytics platform Chainalysis stated that its Crypto Incident Response Team has assisted in the seizure of more than USD 30 million in cryptocurrencies that had been taken by North Korean-affiliated hackers.

This occurred six months after the Ronin Network hack in March 2022, which resulted in the theft of about USD 600 million in cryptocurrency. It is still one of the biggest cryptocurrency hacks ever known to have occurred. The monies used to purchase the stolen cryptocurrency were mixed through Tornado Cash, which makes it more difficult to identify the source of both genuine and stolen cryptocurrency funds.

Although, the U.S. In August, Tornado Cash received a sanction from Treasury’s Office of Foreign Assets Control (OFAC). The Lazarus cyber group then surprisingly employed decentralised finance (DeFi) platforms to launder its stolen cryptocurrency. Law enforcement agencies and crypto organisations were able to locate some of the stolen assets as a result.

Crypto hacking is thought to be a strategy used by North Korean hacking groups like Lazarus to bypass financial and economic restrictions.

Direct language for Celsius:  The unpredictability of DeFi platform Celsius’s decision to halt user withdrawals and transfers in June shocked the cryptocurrency sector. Since Celsius filed for Chapter 11 bankruptcy in the US, more than 1.7 million clients are anxious to discover what will become of their funds.

On September 7, the Vermont Department of Financial Regulation harshly criticized Celsius in a document submitted to the United States Bankruptcy Court in the Southern District of New York.

According to the state commission, Alex Mashinsky, CEO of Celsius, “made false and misleading statements to investors” about the platform’s legal compliance and safety.

Customers of Celsius are currently awaiting word on whether an appointed examiner would formally look into the company’s operations.

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