WIRED reveals that 569 Million Binance Hackers minted in the United States are Black Hole Recruiters, and they are Malicious

More than 90 false reports of active-shooter incidents in the US were investigated by WIRED, and they found connections between many of them. The director of programs and the co-founders of the Educator’s School Safety Network said that it was real to a number of people who experienced it. “There’s a period of time in these incidents where people are literally running for their lives, law enforcement is responding with their weapons, and people think it’s the real thing.”

Even after sanctions were imposed on Russia, investigators around the world are still working to curb the influx of capital to military and paramilitary groups. It is most likely the first time a corporate executive has been charged with a criminal offense related to data theft, because Joe Sullivan was a former executive of Uber and was found guilty of obstructing the FTC investigation. The Biden administration has an executive order that tries to assure Europeans that their data is safe when stored in the US despite government scrutiny, but it’s not a panacea.

Meta says that more than 400 malicious apps were harvesting Facebook credentials to take over users’ accounts. The toll of living online and the ways it can impact your sense of self were discussed in this report.

Plus, there is more. We highlight the news we did not cover in-depth. Click on the headlines below to read the full stories. And stay safe out there.

Source: https://www.wired.com/story/binance-hackers-minted-569-million/

The Mellman Moment of Elliptic Ventures: Why Binance and Sei Labs Came to a Closing Ceremony

Unfortunately for those hackers, even they didn’t seem prepared for their sudden windfall. Elliptic traded away a bit of their token for other cryptocurrencies. It allowed them to get more than $50 million inethereum-based token. But other cryptocurrencies that they traded their BNB for, like Tether and USDC, are more centrally controlled, allowing the funds to be frozen. Binance, meanwhile, managed to temporarily shut down its BNB blockchain to prevent the hackers’ newly mined currency from moving further. “So we have a very sophisticated exploit, managing to mint yourself $569 million,” says Elliptic research lead Thibaud Madelin. “But what followed was a complete shambles, to be honest.”

Samuel began to fear after learning that FTX had suspended withdrawals. The $25,000 in assets he keeps with the crypto exchange, equivalent to a decade’s worth of savings, was suddenly out of his reach.

Some industry insiders have said the company’s downfall had triggered a “Lehman moment,” referring to the 2008 collapse of the investment bank that sent shockwaves around the world.

The co- founder of the California-based Blockchain startup, which is known as Sei Labs, said it would take some time to recover from what was a trusted entity.

The company was valued at $32 billion in its latest funding round, and had recruited high-profile backers including SoftBank, Tiger Global, Singapore’s Temasek, as well as celebrities like Tom Brady, Gisele Bündchen and Naomi Osaka. The arena where the Miami Heat play is named after it.

The situation is still developing quickly. One concern is how it could impact the entire sector that was worth more than $1 trillion in August.

It’s been reported that Bankman-Fried, after transferring $10 billion from FTX to prop up Alameda research, left $1 billion to $2 billion in customers’ funds un accounted for. In a text message to Reuters, Bankman-Fried denied that the funds were secretly transferred, and reportedly replied “???” When asked what happened to the missing funds. The outlet also found that Bankman-Fried added a “backdoor” to FTX’s accounting system that reportedly allowed the founder to change the company’s financial records “without alerting other people.”

“The number of entities with stronger balance sheets able to rescue those with low capital and high leverage is shrinking within the crypto ecosystem,” strategists at JPMorgan said in a note to clients this week.

Traditional investors are reassuring clients they can handle the aftermath of the crash, as they also have been burned. The Ontario Teachers’ Pension Plan said that despite uncertainty, losses tied to its $95 million investment would have a “limited impact,” given the stake represents less than 0.05% of total assets.

Crypto Winter: David Binance, Larry David, and the FTX Derivative Filtering in the Light of Binance’s Letter of Intent

Soon after, another larger-than-life crypto personality entered the chat. Changpeng Zhao, CEO of the world’s biggest crypto exchange Binance, publicly announced that the exchange would liquidate its FTX holdings. Binance then signed a letter of intent to acquire FTX, a plan that Binance abandoned shortly after.

Prices of digital currencies fell again as the crisis engulfing the market deepened over the weekend. The world’s biggestcryptocurrencies, which is called Bitcoin, has plummeted so far. It was trading at about $16,500 on Monday, according to CoinDesk. Analysts think that it could fall below $10,000.

In that climate, the “crypto winter” is poised to get even worse, especially as fears about the broader economic backdrop continue to erode the appetite for risky assets.

The episode has not just destroyed confidence in the crypto industry, but will also embolden global regulators to tighten the screws. If scrutiny restores faith in the industry, some of the biggest names in the business will welcome it.

“It reinforces the view that any sort of financial enterprise needs extensive regulation,” said James Malcolm, head of foreign exchange strategy and crypto research at UBS. The world will probably look a lot better by 2024.

He said that they had been set back a few years. “Regulators rightfully will scrutinize this industry much, much harder, which is probably a good thing, to be honest.”

In a Super Bowl ad for the FTX crypto exchange in February, Larry David sarcastically predicted that FTX wasn’t going to make it. The ad shows David’s character throughout history, naysaying humanity’s greatest inventions, including the wheel, the lightbulb, coffee and democracy.

Rival Binance had said it would explore an FTX bailout earlier this week but almost immediately backtracked after the company said FTX was essentially beyond saving.

Bankman-Fried was a top donor to the Democrats in the race for the election. He hired multiple former US regulators to serve in senior positions at FTX, and his parents are both professors at Stanford Law School. FTX had an application pending with the federal regulators to clear derivatives prior to the filing of the Chapter 11 case.

It is not known what charges will be brought against Bankman-Fried, the thirty-six year old celebrity who became a pariah last month when his company went bankrupt, leaving at least one million customers unable to access their funds.

Bankman- Fried seeks to give away as much money as possible in order to make more money. But the fate of his philanthropic endeavors is now in doubt.

Samuel, who asked to be referred to only by first name to preserve his anonymity, says he lives somewhere in Southeast Asia and is currently between jobs, which means money is tight. The cryptocurrency in his FTX account was his nest egg.

Samuel has a mostly cryptocurrencies portfolio, which is thought to have been depressed due to a lawsuit between its issuer and the US Securities and Exchange Commission. Samuel had been keeping a close eye on the legal battle because he was hoping that a favorable ruling would send the price of XRP skyward. He won’t be able to get the rewards for his patience now that he’s locked in FTX. “I could see the finish line, but this latest drama has me hanged by the balls,” he says. It is so much hardship.

The FTX moved users funds to offline wallets early Saturday morning after hundreds of millions of dollars were drained from the exchange. Ryne Miller, the general counsel at FTX US, didn’t confirm a hack, but said on Twitter that the company made the move to “mitigate damage” caused by the potential theft, as transferring funds offline, or to “cold storage,” helps prevents outsiders from gaining access to them.

However, Neal will not be taking over. He says he can’t serve in that position because of his ties to FTX, Inc.

Comments on Blockfi and the Collapse of the Bitcoin X-ray Platonic Exchange (Blockfi). Update: Sam Bankman-Fried and FTX Group

Blockfi, a coin services firm, froze customer withdrawals as a result of the FTX problems. The price of Bitcoin dropped after the announcement and is now under the $17,000 mark.

In a thread posted today, SBF said, “I was shocked to see things unravel the way they did earlier this week. I will be writing a complete post on the play by play once I do but I want to make sure I get it right when I do.

John J. Ray III is quoted as saying, “FTX Group has valuable assets that can only be effectively administered in an organized, joint process.” I wanted to make sure that the effort was conducted with diligence, thoroughness and transparency.

Update November 11th, 10:55AM ET: Added bankruptcy filing, tweets from Sam Bankman-Fried, and noted that Sir Lewis Hamilton’s F1 car will not bear FTX branding at this weekend’s upcoming race.

A large portion of that total has since disappeared, they said. One source put the missing amount at about $1.7 billion. The other said the gap was between $1 billion and $2 billion.

Bankman-Fried had a meeting with several executives in Nassau on Sunday to figure out the amount of outside funding he needed to cover FTX’s shortfall.

They said the “backdoor” allowed Bankman-Fried to execute commands that could alter the company’s financial records without alerting other people, including external auditors. The set-up meant the move of $10 billion to Alameda did not cause any internal compliance or accounting red flags.

There is a broadening inquiry into the collapse of FTX and it is not clear whether or not prosecutors have determined any wrongdoing by Bankman-Fried.

A Conversation with Tim Bankman-Fried about the Global Cryptocurrency and Blockchain (with an Emphatic Message at CoinDesk)

Editor’s Note: Emily Parker is executive director of global content at CoinDesk, a media, event, indices and data company, and a former policy advisor at the US State Department and writer/editor at The Wall Street Journal. She is the author of “Now I Know Who? My Comrades Are: Voices From the Internet Underground.” Her own opinions are included in this commentary. You can read more opinions at CNN.

The answer is no one because there isn’t a need for a special person. The whole point of crypto is that it is supposed to be decentralized and transparent. The rise of Bankman- Fried showed how far away the industry had deviated from the ideal. Today’s crypto world is one of opaque entities run by larger-than-life personalities. There is perhaps no better example than the leader of FTX.

It was not supposed to be this way. The financial crisis of 2008 caused a lot of disappointment in bankers and politicians. The basic idea was that the new system didn’t require you to trust anyone at all. No bad actor will be allowed to alter the data on the coin’s ledger, which can be seen by everyone.

In the case of crypto, many have long pointed out the risk of powerful centralized exchanges like FTX, with some people preferring to hold their own coins instead of storing them in an exchange. Another option is to actually use blockchain technology to provide greater visibility, something that Bankman-Fried is now promising to do. In his long Twitter thread on Thursday, he said his priority would be “radical transparency,” or “giving as close to on-chain transparency as it can: so that people know exactly what is happening on it.” It is probably too late in the case of FTX.

Bankman- Fried takes full responsibility for his mistakes. He said this week that he was the CEO and that he was responsible for ensuring things went well. I should have been on top of everything. I clearly failed in that. I’m sorry.”

The Cult of Personality: The Flippin’ of the Crypto World? Ryne Changpeng’s View on the Status of FTX

The cult of personality problem is not limited to crypto. We see it in social media as well. Musk is the richest man in the world, and he can make any changes he wants to.

FTX moved all of its digital assets offline on Friday, according to Ryne Miller. To protect against damage, the process was expedited Friday evening.

Ether, the world’s second most valuable cryptocurrency, isn’t faring much better. It lost 20% in a week, and was trading at about $1,230 on Monday.

Changpeng said there is a lot of risk. Things have gone crazy in the industry in the past week, so we need to do some regulations.

The man was speaking at a conference in Indonesia on Monday. Last week he said it was likely an accurate analogy to compare the current market turmoil to the 2008 global financial crisis.

FTX moved from Hong Kong to the Bahamas last year, with Sam Bankman-Fried saying it was one of the few places to put together a comprehensive framework for cryptocurrencies.

Miller said that FTX was looking into the movements of their coins.

As scrutiny of big players in the crypto world increases, Singapore-based Crypto.com admitted to accidentally sending more than $400 million in ether to the wrong account.

CEO Kris Marszalek said Sunday that the transfer of 320,000 ETH was made three weeks ago to a corporate account at competing exchange Gate.io, instead of to one of its offline, or “cold,” wallets.

The process and systems for managing internal transfers have been strengthened. The platform’s native token has fallen over 20% in the last 24 hours, according to CoinDesk.

Swan Mining: The First Twelfth Billionaire and the Rise and Fall of the Cryptoverse: A Conversation with Marszalek and Sequoia

Marszalek said Monday that his firm has acted as a “responsible, regulated player since inception” and will soon “prove all the naysayers …wrong with our actions.”

Warren and Smith theorize that the banking system may have a closer relationship with stairy firms than was previously understood. “Banks’ relationships with crypto firms raise questions about the safety and soundness of our banking system and highlight potential loopholes that crypto firms may try to exploit to gain further access.”

Bankman- Fried and his company are being investigated by the Department of Justice. The investigations likely center on the possibility that the firm may have used customers’ deposits to fund bets at Bankman-Fried’s hedge fund, Alameda Research, a violation of U.S. securities law.

“I care because it’s retail investors who suffer the most, and because too many people still wrongly associate bitcoin with the scammy ‘crypto’ space,” said Cory Klippsten, CEO of Swan Bitcoin, who for months raised concerns about FTX’s business model. Klippsten is publicly enthusiastic about bitcoin but has long had deep skepticism about other parts of the crypto universe.

The meeting with Bankman-Fried was described as “probably the world’s first trillionaire.” Several of Sequoia’s partners became enthusiastic about Bankman-Fried following a Zoom meeting in 2021. After several more meetings, Sequoia decided to invest in the company.

“I don’t know how I know, I just do. SBF is a winner,” wrote Adam Fisher, a business journalist who wrote a profile of Bankman-Fried for the firm, referring to Bankman-Fried by his popular online moniker. The article was removed from the website.

The Rise and Fall of Bernie Bankman-Fried, Voyager Digital, and FTX: Similarities with Bernie Madoff and the Ponzi Scheme

The Ontario Teachers’ Pension Fund said, “not all of the investments in this early-stage asset class perform to expectations.”

When Bankman-Fried bought up the assets of bankrupt crypto firm Voyager Digital for $1.4 billion this summer, it brought a sense of relief to Voyager account holders, whose assets has been frozen since its own failure. That rescue is now in question.

As king of crypto, his influence was starting to pour into political and popular culture. FTX bought prominent sports sponsorships with Formula Racing and bought the naming rights to an arena in Miami. Notable politicians like Bill Clinton were invited to speak at the FTX conferences despite the fact that he had pledged to donate $1 billion to Democrats. Tom Brady invested in a company.

Sheila Bair, a top regulator during the 2008 financial crisis, told CNN there are eerie similarities between the dramatic rise and fall of Bankman-Fried and FTX and that of infamous Ponzi scheme mastermind Bernie Madoff.

Bair notes that 30-year-old Bankman-Fried, like Madoff, proved adept at using his pedigree and connections to seduce sophisticated investors and regulators into missing “red flags” hiding in plain sight.

Long before his Ponzi scheme collapsed, Madoff was known as a wizard on Wall Street. He was the former chairman of the Nasdaq Stock Market, served on Securities and Exchange Commission advisory panels and managed money for the rich and the famous.

“You get this herd mentality where if all your peers and marquee names in venture capital are investing, you’ve got to, too. And that adds credibility with Washington policymakers. It all feeds on itself,” said Bair, who sits on the board of directors at Paxos, a blockchain infrastructure company (Bair said she was speaking for herself, not Paxos).

A hearing on FTX’s financial mismanagement and cover up after the filing of the Decree Bankruptcy Investigation (Denver)

There was an elaborate scheme that involved repaying existing clients with new client deposits that led to the creation of this incredible track record.

Given the speed of its demise and media reports, serious questions have been raised about the accuracy and strength of FTX’s balance sheet. FTX’s bankruptcy filing indicates it had liabilities of $10 billion to $50 billion at the time of the filing.

After his arrest, Rep. Maxine Waters, chairwoman of the committee, said Bankman-Fried would no longer give testimony as scheduled Tuesday. The hearing was set to move ahead, however, beginning with testimony from FTX’s new CEO, John J. Ray III, who took over for Bankman-Fried on November 11 and is tasked with shepherding it through the bankruptcy process.

“You must answer for the failure of both entities that was caused, at least in part, by the clear misuse of client funds and wiped out billions of dollars owed to over a million creditors,” the senators wrote.

“I still do not have access to much of my data — professional or personal. So there is a limit to what I will be able to say, and I won’t be as helpful as I’d like,” Bankman-Fried said in a tweet Friday. On the 13th, I am willing to testify because the committee thinks it would be useful.

There are still many unanswered questions about how the funds were misappropriated, how clients were prevented from withdrawing their own money and how you orchestrated a cover up.

The Federal Reserve, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency were sent letters by Sen. Elizabeth Warren of Massachusetts and Tina Smith of Minnesota, asking them to evaluate the traditional banking system’s exposure to turmoil.

Waters: Why did he fail to disclose confidential information? The case of Bankman-Fried and the collapse of FTX and Alameda

“Based on your role as CEO and your media interviews over the past few weeks, it’s clear to us that the information you have thus far is sufficient for testimony,” Waters replied to Bankman-Fried earlier this week.

The Southern District of New York, which is investigating Bankman-Fried and the collapse of FTX and its sister trading firm Alameda, confirmed his arrest on Twitter.

Bankman-Fried, was arrested without incident at his apartment complex shortly after 6 pm ET Monday in Nassau, and is set to appear in court Tuesday, the Royal Bahamas Police Force said in a statement.

If charges are considered to be so serious that they could mean a year in both countries, the United States can return defendants to America.

“I didn’t knowingly commit fraud,” he told the BBC over the weekend. “I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”

Waters said they were still committed to getting to the bottom of the incident, despite not being able to hear from Bankman-Fried tomorrow.

While the probe isn’t completed, Ray said, FTX’s collapse appears to stem from the concentration of power “in the hands of a very small group of grossly inexperienced and unsophisticated individuals” who failed to implement virtually any corporate controls.

“There was no person who was chiefly in charge of positional risk of customers on FTX,” Bankman-Fried told DealBook. “And that feels pretty embarrassing in retrospect.”

Bankman-Fried has denied knowledge of any such backdoor. “I don’t even know how to code,” he told cryptocurrency vlogger Tiffany Fong in an interview last month.