Forbes Presents 20 Crypto ‘Zombies’ and Declares Ripple and XRP Among the Undead

Audy Castañeda
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Forbes Presents 20 Crypto ‘Zombies’ and Declares Ripple and XRP Among the Undead

Among the cryptocurrencies and projects Forbes mentions are Ripple, XRP, Ethereum Classic (ETC), Tezos (XTZ), Algorand (ALGO), and Cardano (ADA).

In a controversial report, Forbes revealed a list of 20 “billion-dollar cryptozombies,” Layer 1 (L1) tokens, which the news outlet defines as crypto assets with substantial valuations but “limited utility beyond speculative trading.”

Ripple Labs, the company behind XRP, was highlighted as a prime example of a “cryptozombie.” Despite XRP’s active daily trading volume, Forbes suggests that its use does not go beyond market speculation.

Ethereum Classic (ETC) was also included on the list due to its high market value and relatively low network fees. ETC was created in 2016 as a result of a fork of the DAO incident and is considered a continuation of the original Ethereum blockchain.

Cardano’s inclusion in the list was seen as a surprise. The Forbes article suggests that the project capitalizes on the popularity of its founder, Charles Hoskinson, and raises questions about its educational claims.

However, Cardano supporters argue that its ecosystem is active and thriving, providing value and utility beyond mere speculation. They cite the network’s inputs and ongoing development activities as evidence of its vitality and relevance.

XRP and Ethereum Classic in the Spotlight

Ripple Labs, the company behind XRP, was highlighted as a prominent cryptozombie. However, Ripple Labs and XRP are not alone in this regard.

Forbes reveals that 50 blockchains, excluding Bitcoin (BTC) and Ethereum (ETH), are currently trading at values ​​exceeding $1 billion, and at least 20 of them are classified as “functional zombies.” Together, these 20 blockchains have a market value of $116 billion, despite having “limited user bases.”

According to Forbes, an example of a “functional zombie” is Ethereum Classic, which maintains the distinction of being the original Ethereum chain. While ETC has a market value of $4.6 billion, its commission generation in 2023 was less than $41,000, raising questions about the viability of the blockchain for the news organization.

Another crypto project in the Forbes report is Tezos, which raised $230 million through an initial coin offering (ICO) in 2017. Tezos’ XTZ token currently has a market capitalization of $1.2 billion. However, blockchain fee earnings were meager, at $5,640 in February 2024 and a total of $177,653 for all of 2023.

Algorand, once hailed as an “Ethereum killer” due to its ability to process 7,500 transactions per second, faces similar challenges. Despite a market capitalization of $2 billion and a treasury holding of $500 million, Algorand earned $63,000 in blockchain transaction fees throughout 2023. For Forbes, this casts doubt on its adoption and real usefulness.

‘Zombie’ Crypto Blockchains

Forbes classifies zombie blockchains into two groups: spin-offs and direct competitors of established blockchains like Bitcoin and Ethereum. Derivative zombies include Bitcoin Cash (BCH), Litecoin (LTC), Monero (XMR), Bitcoin SV (BSV), and Ethereum Classic.

These blockchains, collectively valued at $23 billion, supposedly arose from “disagreements” between programmers regarding the governance and direction of the original chains.

Overall, the report highlights a growing disparity between the valuations of certain projects in the cryptocurrency industry and their actual utility and use. Consequently, Forbes refers to these projects as “zombies.”

While Forbes’ statements may seem harsh to those who identify with the aforementioned communities, it is important to note that the researcher’s views and opinions may not always align with reality and are only part of a personal perspective. In fact, some of the projects mentioned have usability issues, while others represent vibrant ecosystems with strong cases.

By Audy Castaneda

Senator Warren: Cryptocurrencies Are “Preferred Payment” for Child Sexual Abuse, Urges Justice Department to Take Action

Leonardo Perez
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Senator Warren: Cryptocurrencies Are “Preferred Payment” for Child Sexual Abuse, Urges Justice Department to Take Action

U.S. Senators Elizabeth Warren and Bill Cassidy are committed to ensuring that Congress and the Administration have the tools necessary to end CSAM and hold those involved with its distribution accountable.

In a joint effort to combat illicit trafficking in child sexual abuse material (CSAM), US Senators Elizabeth Warren and Bill Cassidy wrote a letter to the US Department of Justice (DOJ) and Department of Homeland Security (DHS) expressing their concern over the alleged use of cryptocurrencies to facilitate these activities.

Alleged Link Between Cryptocurrencies and Child Sexual Abuse

In the letter, the senators highlight the “pseudonym” provided by cryptocurrencies, which they say has enabled the rapid movement of CSAM payments into the cryptocurrency world. It was also stated that both Warren and Cassidy are committed to ensuring that Congress and the Administration have the tools necessary to end CSAM and hold those responsible for its distribution accountable.

The lawmakers’ concerns are based on a January 2024 report from blockchain analysis firm Chainalysis, which identifies cryptocurrency-based CSAM sales as “a growing problem.” The report reveals that virtual currency has become the preferred payment method for buyers and sellers of commercial child sexual abuse content.

To provide some context, CSAM is the acronym for child sexual abuse material. Consisting of any visual representation, including photos, videos and computer-generated images, that involves the use of an underage person in explicit sexual acts.

Additionally, a financial trend analysis by the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) indicates a growing trend of perpetrators using convertible virtual currencies to evade detection. People who engage in CSAM trading on the Internet resort to various methods to hide their activity, the senators emphasize, including using cryptocurrency mixer services and ATMs to hide the origin of funds used in transactions and launder (conceal) profits.

The senators cite troubling findings from FinCEN, which uncovered thousands of reports of suspicious activity related to online child sexual exploitation and human trafficking crimes involving Bitcoin.

These reports allegedly identified more than 1,800 unique Bitcoin wallet addresses associated with alleged crimes, with CSAM being specifically mentioned in 95% of the cases.

Senators Demand Accountability

The senators further noted that Homeland Security investigators played a key role in the indictment of a South Korean citizen and numerous users in the United States for operating a dark web pornography site funded by Bitcoin.

However, lawmakers note that the use of cryptocurrencies in illicit CSAM trading appears to be increasing. The Chainalysis review further reveals that while the size of the cryptocurrency-based CSAM market has decreased, sellers have become more “sophisticated and resistant” to detection and withdrawals.

According to the report, Bitcoin remains the most used cryptocurrency to purchase CSAM. To address these challenges, Senators Warren and Cassidy asked the DOJ and DHS a series of questions, seeking clarification on their current assessment of the alleged cryptocurrency’s role in facilitating CSAM, the sophistication of CSAM sellers, and “unique challenges” that poses the use of cryptocurrencies as payment in these crimes.

They also ask agency measures to fight the use of cryptocurrencies, privacy coins, and obscuration methods by CSAM sellers. Senator Warren’s previous efforts include the introduction of the Digital Asset Anti-Money Laundering Act, a bipartisan bill to counter illegal activities and misuse of digital currencies.

The bill seeks to make the digital asset ecosystem more compliant with anti-money laundering and anti-terrorist financing frameworks.

By Leonardo Perez

SEC Sues Crypto Mining Company for Misappropriation of Investor Funds, and other News

Audy Castañeda
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SEC Sues Crypto Mining Company for Misappropriation of Investor Funds, and other News

The SEC filed the lawsuit due to well-founded suspicions of financial misconduct by Geosyn.

The United States Securities and Exchange Commission (SEC) has filed a lawsuit against crypto mining company Geosyn and its co-founders. In it, they are accused of misappropriating $5.6 million from investors. The defendants, who include CEO Caleb Joseph Ward and former COO Jeremy George McNutt, are being targeted for fraudulent activity and misleading investors.

Geosyn allegedly deceived 64 investors between 2021 and 2022. The company promised to buy, maintain and operate cryptocurrency mining machines to distribute cryptoassets such as Bitcoin in exchange for a fee. However, according to the indictment, Geosyn failed to deliver on these promises.

The legal document maintains that the company did not acquire or operate the equipment necessary to carry out the promised mining. Of the 1,400 machines that were part of the investment plan, 400 were never purchased and those that were acquired mostly remained inactive. Furthermore, Geosyn restricted its mining activities exclusively to Bitcoin, despite having promised investors a broader range of cryptocurrencies.

United Kingdom Expands Powers to Fight Cryptocurrency Crime

The National Crime Agency (NCA) and the UK police have been given new powers to “seize, freeze and destroy” cryptocurrencies linked to criminal activity. With these measures, authorities will be able to act more quickly and efficiently to combat the use of digital assets in crimes.

The new rules allow police to seize cryptocurrency assets without making a prior arrest. Which facilitates actions to prevent criminals from hiding their illicit profits. Additionally, law enforcement may confiscate cryptocurrency-related items, such as passwords and USB drives, to support their investigations.

Another key provision of the new laws is the ability of police to remove digital assets. Additionally, seized cryptocurrencies can be transferred to wallets controlled by authorities. Allowing victims of crime to request the recovery of funds that have been stolen from them.

Yuga Labs Announces Restructuring with Staff Cuts

Yuga Labs, the Web3 giant known for its non-fungible token (NFT) collection, has announced a restructuring that involves cutting several members of its team. Co-founder and CEO Greg Solano shared the news in a memo posted on social media last Friday.

“Today is a really hard day,” Solano said regarding the difficult decision to restructure the company. «I am committed to transforming Yuga and returning us to our roots, and that means making difficult decisions. The most difficult one, that is, saying goodbye to some talented team members,” he added.

The change in direction comes after a period of rapid expansion for Yuga Labs, which had seen significant growth in the NFT market. Solano stressed that the company “lost its way” and that the new approach will focus on building “a more agile and focused team.”

Hong Kong Approves Bitcoin and Ethereum Spot ETFs, but China Remains Out of Market

The recent launch of Bitcoin and Ether spot exchange-traded funds (ETFs) in Hong Kong will not open the market to mainland Chinese investors, Bloomberg data analyst Jack Wang explained. All this, during a Web seminar dedicated to this recent approval.

Hong Kong approved the first Bitcoin and Ethereum spot ETFs, established by three Chinese asset managers, China Asset Management, Harvest Global Investments and Bosera, through their subsidiaries in the region.

However, despite these close ties to the mainland, these funds will not be available to mainland Chinese investors. Wang cited a Chinese State Council statement issued in September 2021, which prohibits financial institutions from creating accounts, transferring funds or providing compensation for any cryptocurrency-related transactions.

By Audy Castaneda

USA: IRS Uses AI to Detect Tax Fraud with Cryptocurrencies

Leonardo Perez
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USA: IRS Uses AI to Detect Tax Fraud with Cryptocurrencies

The Treasury implements AI to improve the supervision of cryptocurrency transactions. The draft Form 1099-DA represents an important step in the implementation of crypto taxation. A House of Representatives committee is investigating the IRS’s use of artificial intelligence.

The Internal Revenue Service (IRS) is improving its oversight of cryptocurrency transactions through the use of artificial intelligence (AI).

In a groundbreaking move, the IRS released a draft Form 1099-DA for Digital Assets from Broker Transactions, marking a significant step forward in cryptocurrency tax compliance enforcement.

Concerns Mount as IRS Employs AI

Said development aligns with the agency’s proposed regulations introduced last year, aimed at refining the reporting of digital asset sales and exchanges by brokers.

The regulations stipulate that, starting January 1, 2025, exchanges, including digital asset trading platforms and payment processors, must report these transactions to the Treasury using the recently presented form.

Additionally, the reporting requirements extend to real estate transactions, and relevant entities are expected to disclose digital asset provisions and fair market values ​​in real estate transactions starting January 1, 2025.

In a separate but related revelation, the House of Representatives Committee has launched an investigation into the IRS’s use of AI to examine Americans’ financial data, expressing concerns about potential civil liberties infringements.

The Committee, led by Chairman Jim Jordan (R-Ohio) and Rep. Harriet Hageman (R-Wyo.), investigates allegations that the IRS uses AI without proper legal procedures to monitor private transactions and financial accounts.

However, recent reports charge that the IRS’s use of AI has also included active surveillance of bank accounts of American citizens en masse and without legal process. A video obtained by an investigative media outlet appears to capture Alex Mena, an IRS official who works in the agency’s Criminal Investigations Unit.

They admitted that the IRS has ‘a new system’ that uses AI to locate ‘possible abusers’ by examining all returns, bank statements and related financial information to detect ‘possible fraud.’

New Measures to be Taken by the IRS

If the IRS perceives that there are citizens committing any of these crimes (tax evasion, not declaring taxes or profits and tax fraud) the intervention of Justice is immediately requested and there is talk of a prison sentence. There are different levels of sanctions, such as fines, prison sentences, restitution, disqualification and asset seizure, whose levels of punishment become increasingly harder.

The US will Heed Complaints against Cryptocurrency Fraud

The investigation follows reports of IRS officials using AI. In particular, to locate taxpayers’ bank accounts without a court order. These allegations, uncovered by investigative journalism, suggest that the IRS has widespread access to banking data.

Regarding this issue, on April 25, Wall Street Silver posted the following on X:

“ALERT: IRS Using AI to Target Middle Class.

What we have learned is that the IRS, in fact, has been using AI to access bank accounts of American citizens. Without any kind of search warrant.

This was something that was just discovered by an undercover journalist. What they found is that the IRS has claimed that they have access to every single person’s bank account.”

This raises questions about privacy and the extent of government oversight. Accordingly, the IRS’s foray into AI-powered enforcement illustrates the agency’s commitment. In particular, to modernize its approach to tax collection and maintain the integrity of the financial system. However, the balance between technological advancement and the protection of individual rights remains a critical dialogue in this evolving narrative.

By Leonardo Perez

39% of Canadian Institutional Investors Hold Cryptocurrencies

Audy Castañeda
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39% of Canadian Institutional Investors Hold Cryptocurrencies

Institutional interest in cryptocurrencies increases in Canada, with 39% exposure. A KPMG survey reveals that 50% of financial services already offer cryptoasset services. Factors driving growth include rising US debt, dollar inflation and regulatory clarity.

Canadian institutional investors have shown increasing interest in cryptocurrencies, with 39% direct or indirect exposure to crypto assets, a notable increase from 31% in 2021.

A recent survey by KPMG in Canada and CAASA revealed strong adoption of cryptoassets among financial organizations and institutional investors following a year of recovery and regulatory advancements.

KPMG received 65 responses, of which 31 identified themselves as institutional investors, the majority of which manage more than $500 million in assets, while the remaining 34 were financial services organizations.

According to KPMG, Cryptocurrencies Win Against Inflation in Canada

The survey, which collects information from Canadian financial services and institutional investors, indicates that 50% of financial services respondents offered cryptoasset services in 2023, up 9% from the previous year. The recovery of the crypto market, greater regulatory clarity and innovations in digital assets contribute to growth.

Co-head of KPMG’s Digital Assets practice, Kunal Bhasin, highlighted that cryptoassets are increasingly considered investable alternative assets. Bhasin attributes this boom to rising US debt and dollar inflation, which has led investors to seek out crypto assets as a hedge and stable store of value:

“The last time we did this survey in 2021, it was a strong year for crypto assets. The following year was a turbulent year, marked by fraud and collapses of major crypto asset trading firms, but those events had a cleansing effect on the industry.”

The report found that half of institutional investors surveyed have exposure to crypto assets through Canadian ETFs, closed-end funds or other regulated products, while 58% have exposure through the stock market, such as Galaxy Digital on the Toronto Stock Exchange, an increase from 36% in 2021.

More institutional investors are also gaining exposure through derivatives markets — now at 42% compared to 14% in 2021.

The only drop came from venture capital firms or hedge funds, which declined to 25% from 29% in 2021.

Other conclusions highlight that 75% of institutional investors hold crypto assets directly, and 50% were exposed through funds traded on exchanges or regulated products. Exposure to cryptocurrency-related public equities increased, with 58% of investors venturing into this type of asset.

Improving market infrastructure and strong performance metrics fueled the significant rally in cryptocurrency investments. Bitcoin, for example, rose 150% in 2023 and continues its rise in 2024.

Canadian Institutional Investors Have an Appetite for Cryptocurrencies

The SEC’s approval of spot Bitcoin ETFs marked a turning point, attracting traditional asset managers to the crypto industry in anticipation of the approval of an Ethereum ETF. Kareem Sadek, Head of Emerging Technologies Risk and Co-Head of KPMG’s Digital Assets Practice, said:

“A pivotal moment for cryptoassets came in January 2024, when the US Securities and Exchange Commission (SEC) approved Bitcoin spot ETFs. This was considered a milestone for many market participants. “This attracted many traditional asset managers with strong reputations to the crypto asset sector.”

Therefore, as the Canadian market shows an appetite for cryptocurrencies, experts like Bhasin advise financial institutions and investors interested in increasing their exposure to cryptocurrencies to educate themselves in the sector, develop a strategic vision and implement sound policies to navigate this evolving landscape.

By Audy Castaneda

Crypto Market Dominance: Upbit Handles 80% of South Korea Trading Volume

Leonardo Perez
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Crypto Market Dominance: Upbit Handles 80% of South Korea Trading Volume

Different platforms have unsuccessfully challenged the dominance of the exchange in the country and the upcoming regulatory framework has affected them.

A recent report revealed that South Korean exchange Upbit dominates the local crypto market with over 80%. Furthermore, Upbit rose to fifth place in the list of top five global exchanges.

Upbit Enters List of Top Five Global Crypto Exchanges

Media outlet Bloomberg reported on Upbit’s latest feat after eclipsing the Korean market. The main Korean stock exchange holds more than 80% of the country’s trading volume.

Notably, Upbit’s level of dominance has not been matched by other exchanges in any prominent crypto hub. According to official figures cited by Bloomberg, more than 6 million Koreans, around 10% of the population, traded cryptocurrencies in the first half of 2023.

The increase in volume during this bull run has propelled the exchange to fifth place among global exchanges. Upbit’s $2.84 billion daily trading volume is on par with Coinbase’s $2.86 billion.

According to the report, South Korea’s foreign exchange transactions accounted for almost a fifth of its banking partners’ total deposits last year. Similarly, altcoins account for 80% of Korean exchanges’ trading volume, while global platforms record much lower volume at 50%.

Despite the looming shadow of the $40 billion merger of Do Kwon and Terra Labs, the Korean market continues to grow and become a market with the “most enthusiastic cryptocurrency traders with a taste for high-risk, high-risk tokens.” reward” of the world.

Furthermore, recent reports revealed that the South Korean won surpassed the US dollar as the leading currency for cryptocurrency trading globally in the first quarter of 2024. The rise suggests mass appeal and growing popularity of cryptocurrencies among South Koreans.

As a result, campaigns for the upcoming elections attempted to attract voters, with candidates promising to work on regulations and taxes.

Does the New Regulatory Framework Favor Upbit’s Dominance?

South Korean regulators will implement the Virtual Asset User Protection Law in July 2024. The new regulatory framework will implement stricter requirements and consequences on exchanges, including possible life imprisonment for criminal acts.

Additionally, operators must “take measures to meet responsibilities” after attacks or system failures. The requirements require significant “capital and labor,” according to Nam Hyeon Joon, a spokesperson for Bithumb, Korea’s second-largest exchange.

The new regulatory landscape was “designed to protect investors” after the Terra Labs collapse, but has hit smaller exchanges. Platforms such as Huobi Korea, Cashierest and Coinbit have closed since the bill was passed last year.

Simon Seojoon Kim, CEO of venture capital firm Hashed, believes that well-resourced crypto exchanges like Upbit will make it easier to meet the requirements. “For existing and new participants, the cost of meeting these requirements could be substantial,” Kim said.

Korbit Research analyst Min Seung Kim agrees with this sentiment, adding that competition will be limited as trading remains “increasingly focused on the major exchange.”

Platforms trying to compete with Upbit’s dominance have launched zero-fee campaigns. According to the report, Bithumb briefly challenged Upbit after reaching a peak market share of 39.2% in January. However, participation fell by more than half after its promotion ended.

Ultimately, entering the South Korean crypto market remains difficult. As seen recently with Crypto.com, meeting the country’s regulatory requirements requires a defined strategy and vast resources.

By Leonardo Perez

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