US Department of Justice Apprehended NFT ‘Frosties’ Founders for “Rug Pulling”

Jenson Nunez
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US Department of Justice Apprehended NFT ‘Frosties’ Founders for “Rug Pulling”

The creators of ‘Frosties’ are on the list of the first NFT creators accused of “pulling out the rug” in a deceiving procedure that extracted more than $1 million from victims.

Two of the alleged creators of the non-fungible token (NFT) project ‘Frosties’got apprehended in the United States of America and would now face charges linked to money laundering and fraud.

Ethan Nguyen and Andre Llacuna, the pseudonymous creators of Frosties, got detained by the country’s law enforcement agencies in Los Angeles, California, for deceiving NFT investors of $1 million this year. The US Department of Justice (DOJ) revealed that the entity is acting against the pair of criminals for executing a “rug pull.”

Fraud, Money Laundering, and Lies

In 2022, Frosties used to be a collection of 8,000 NFTs that promised a range of advantageous features that usually come with this project, such as rewards and a metaverse game full of giveaways and other juicy features.

But the promises of ice cream-themed collectibles quickly got unveiled, as, after the sale took effect, their creators left the project and disappeared from the scene, leaving a high amount of losses among their victims.

US Attorney Damian Williams highlighted in the DOJ press release that Mr. Nguyen and Mr. Llacuna made investors a considerable amount of promises linked to the supposed benefits of Frosties NFTs.

Still, when they ran out, they pulled the rug out from under the victims almost in the blink of an eye, suspending the website and migrating the funds to unknown accounts, leaving behind a disastrous loss among the investors that believed in them.

The accused migrated approximately [USD]$1.1 million in cryptocurrency funds from the scheme to various wallets under their power in multiple transactions designed to obfuscate the source of funds.

The pair highlighted another NFT project named “Embers,” which got scheduled to see the light on Saturday this week. The duo expected to collect at least $1.5 million from the initiative, according to the report. As Vice revealed in a review, the ‘Embers’ Twitter account is still operative, with their most recent tweet posted 20 hours ago showing a lottery to enter the token pre-sale. That account counts more than 60,000 active followers.

DOJ’s first “carpet pull” case

Prosecutors in the Southern District of New York have charged both founders with wire fraud and conspiracy to commit money laundering in what appears to be the first criminal case prosecuted for an NFT “rug pull.” The charges in question count to a maximum of 20 years in prison.

Thomas Fattorusso expressed that his team focuses its efforts on digital assets, noting that NFTs also follow the same rules.

The individuals allegedly hid behind online pseudonyms. They promised investors huge rewards, giveaways, and exclusive chances before implementing their ‘rug-pulling’ strategy, leaving investors empty pockets and zero investment.

A rug pull speaks about a scenario in which the creators of a digital asset or NFT ask for funds from investors and suddenly abandon the project withholding. In various cases, the founders get to delete the social network profiles and thus vanish every trace from the Internet.

By: Jenson Nuñez

EU to Continue debating Its Crypto Regulatory Framework With No Provision to Ban Bitcoin

Jenson Nunez
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0
EU to Continue debating Its Crypto Regulatory Framework With No Provision to Ban Bitcoin

The ambitious legislative package of the European Union to regulate cryptocurrencies will go to the next stage of discussion without having a section to limit proof-of-work assets.

The framework for regulating digital assets of the European Union (EU), ‘Markets in Crypto Assets,’ reached the next discussion phase without the problematic provision to limit proof-of-work cryptocurrencies (PoW ) like Bitcoin. This information got revealed this Friday by many news outlets.

The Committee on Economic and Monetary Affairs of the European Parliament rejected the provision on Monday of last week in a vote with the majority of members in favor. The clause intended to ban the use and mining of PoW-based assets due to their high energy demand got left out of the preliminary draft of the MiCA.

The proposal, which got included in MiCA this March, highlighted that all digital assets would have to face minimum environmental sustainability standards concerning their consensus procedure to consolidate transactions before getting issued, offered, or admitted to trading.

The language of the project proposed a prohibition on the use of popular digital assets such as Bitcoin and Ethereum. However, the latter is updated to switch to a more environmentally friendly proof-of-stake (PoS) mechanism.

MiCA Passes Forward Without a PoW Ban

The draft bill is now migrating to a three-way debate between the European Parliament, the European Commission, and the European Council, without containing a provision to limit the use of PoW crypto assets.

European lawmakers have been talking about the legislative framework that intends to regulate digital assets. MiCA was a proposal that landed in 2020 as part of the European Commission’s Digital Finance package.

More recently, discussions heated up when the draft regulation added a set prohibiting digital asset such as Bitcoin. An earlier draft also added a similar policy, proposing a ban on crypto services based on environmentally unsustainable consensus procedures by 2025. But that section got rejected in early March due to different stances from industry players.

Although the proposal faced removal and Parliament voted in favor of exclusion on March 14, some actors exposed that the provision would appear again before the tripartite discussions. Stefan Berger, the representative who supervised the MiCA framework and stood against the condition, was one of them.

However, the period for a possible change before the final step for the tripartite discussion ended last week, Berger reported in a tweet. This action means that the draft has entered the next stage without significant changes. Berger said tripartite negotiations on MiCA got scheduled to start this week.

By: Jenson Nuñez

Costa Rica: Neither of the two presidential candidates Shows a Supportive Stance on Bitcoin Adoption

Jenson Nunez
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0
Costa Rica: Neither of the two presidential candidates Shows a Supportive Stance on Bitcoin Adoption

According to statements in a debate, the presidential candidates of Costa Rica do not have any policy to encourage the use of Bitcoin in the nation.

Despite the physical proximity between El Salvador and Costa Rica, the latter country does not follow close signs following the path of the Central American country that became the first to activate a policy to convert Bitcoin into legal tender.

Two candidates are currently competing for the presidency of Costa Rica, and they are precisely two pro-investment and pro-business politicians. The current candidates are Rodrigo Chaves of the Social Democratic Progress party and José María Figueres of National Liberation.

Both candidates have familiar ties with the economic environment. Chaves worked at the World Bank for about 30 years, while Figueres, president during the 1990s, and Minister of Foreign Trade, is an industrial engineer who defends that he wishes to turn the country into a “business-friendly” land. With such a scenario, one might think there is some openness towards crypto, but there is no sign of interest.

A Big NO to Bitcoin

This week, in a discussion created by Grupo Extra, both coincided on one precious point: they will not encourage the use of Bitcoin in Costa Rica.

As reported by CRHoy, Figueres highlighted that Bitcoin is an exciting item but needs more research. He got concerned about opening the crypto market due to its volatility; he said this market put people’s capital at risk because they can see this asset as a financial tool to invest in their savings.

Meanwhile, Chaves expressed that Bitcoin only plays a role as a storing value. In this sense, he criticized El Salvador, saying it was a grave mistake because the payment recipient got exposed to monstrous fluctuations.

Until now, Costa Rica has been a nation where there is a lot of interest in the crypto world. However, there is still a lack of framework under legality to support these assets. Many popular exchanges are active and working, and some merchants receive crypto as a payment method. There are at least seven Bitcoin ATMs currently operating in the nation, according to the CoinATMRadar report.

The Central American nation is quite interesting in the crypto space within the region due to the openness of the government and the diverse sectors of the citizenry to implement these currencies within the economic and social structures.

This behavior intends to improve all the local procedures and open new doorways to new technologies because of what the future will bring in the years to come.

By: Jenson  Nuñez

There Is a New Bitcoin Mining Site in Latin America

Alexander Salazar
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There Is a New Bitcoin Mining Site in Latin America

Panajachel and the areas in El Salvador that Bukele chose for mining Bitcoin offer volcanic energy, which does not harm the environment. Other projects in Costa Rica, Brazil, and Ecuador also seek to increase the awareness of the advantages of BTC among communities.

Bitcoin (BTC) mining has grown significantly worldwide, particularly in Latin America, in the last few months. The town of Panajachel in Guatemala now joins the activity through a project approved by the City Hall.

Local project Bitcoin Lake posted on Twitter that the announcement was great news for Panajachel and Bitcoin. They seek to do the same that happened with Bitcoin Beach, El Salvador, in Guatemala.

The post from the project pointed out that Panajachel is the first municipality with Bitcoin mining that people know in Central or South America. That activity allows confirming transactions and issuing new coins on that world network.

Panajachel shares a peculiarity with the areas in El Salvador where President Nayib Bukele decided to start mining Bitcoin. Three Guatemalan volcanoes, San Pedro, Tolimán, and Atitlán, provide a source of clean energy to do that activity.

The founder of Bitcoin Lake, Patrick Melder, said that they had already started mining Bitcoin in the town. The project contemplates an economic and environmental dimension in favor of the communities of Panajachel. He considers BTC is perfect for reducing poverty, creating clean energy, promoting financial education, and bringing hope.

Melder stated that volcanic energy is a free resource that can allow mining Bitcoin without harming the environment. He expects the activity to provide an economic incentive to clean up the lake and benefit the people around it.

The Number of Bitcoin Cities Grows in Latin America

Bitcoin has recently begun to gain ground in Panajachel thanks to Bitcoin Lake, as more than a dozen businesses accept BTC as payment. The project seeks to replicate the experience of El Zonte, El Salvador, in that Guatemalan town.

There are already other similar projects in the region besides El Zonte, the basis for the first country to adopt Bitcoin as legal tender. Cases in Costa Rica, Brazil, and Ecuador also seek to increase the awareness of the advantages of BTC among communities.

Beyond projects to build Bitcoin cities or communities, mining has recently become quite popular in Latin America. While large projects are emerging in countries like Argentina and Paraguay, Venezuela remains attractive for the activity thanks to its low electricity rates.

BTC is trading at around USD 49,934 and has accumulated a 5.2% gain over the last week. Its daily trading volume is above USD 23.21 billion, and its market capitalization is about USD 891.55 billion, according to CoinGecko.

Bitcoin mining is an increasingly relevant activity, which has led several governments to include it in their economic systems. However, regulators usually seek to control or ban it, alleging it harms the environment and contributes to illicit activities. However, various studies indicate that other industries generate more CO2 emissions, and criminals prefer to use fiat money.

By Alexander Salazar

According to Treasury in Spain, cryptocurrencies Would not Get Included in the Declaration of Assets Abroad

Jenson Nunez
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0
According to Treasury in Spain, cryptocurrencies Would not Get Included in the Declaration of Assets Abroad

Spanish taxpayers would not get required to include their digital assets in the Form 720 declaration.

The declaration of cryptocurrency holdings in Spain is not an easy quest, and many users of the crypto environment are aware of it. Undoubtedly, the extension of tax regulations to lead the new class of assets does not help make the task easier. Recently, a controversial tax obligation linked to assets abroad awoke uncertainty among taxpayers.

The good news for many users is that the Spanish Ministry of Finance assured this week that holders of cryptocurrencies did not get required to include their holdings in the Informative Declaration of Assets Abroad. Spaniards should not involve their crypto in the controversial Model 720, which focuses on the funds held abroad.

The Spanish Tax Agency revealed that citizens have no duty to report their digital holdings for the 2021 financial year. In model 720, virtual assets should not get reported. The informative declaration on abroad’s virtual assets is unnecessary concerning the 2021 financial year.

Model 720 Does not Include Digital Assets

The news portal El Economista gathered the information, highlighting that there is still no regulation for digital assets. On this matter, the outlet consulted Gibernau’s financial advisor and partner, Esaú Alarcón, who explained that users don’t have to declare their holdings.

Last year, the Ministry of Finance revealed that it was getting ready to extend surveillance on digital assets. In particular, it said that it would oblige taxpayers to include operations with said currencies in the declaration of holdings abroad.

The Congress of Deputies approved the Anti-Fraud Law in June. Its many regulations included the obligation to report on virtual currencies based abroad for goods valued at more than 50,000 euros. A new form would have to be created or include a detailed section in the 720 with the structure and data that this declaration should have.

Although the regulations have already come into effect, this tax obligation would not yet apply since the authorities still have to implement the rules for its application. According to The Objective, the declaration was subject to regulatory development that could get delayed for another year. The outlet highlighted the government’s 2022 Annual Tax and Customs Control strategy.

Other Features of the Tax Return did not Change

As El Economista collected, other fiscal areas did not change concerning the declaration of cryptocurrencies either. The income tax form (IRPF) does not adhere to a specific sector to include digital assets; the only change implemented is that digital currencies now have a particular industry that must get filled out by contributors.

As for the controversial Model 720, there are projects to include digital assets, and reports expect that new regulation could receive approval for next year’s tax season, corresponding to 2022.

By: Jenson Nuñez

Russia Studies the Possibility of Selling Natural Gas and Oil in Bitcoin

Jenson Nunez
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0
Russia Studies the Possibility of Selling Natural Gas and Oil in Bitcoin

Pavel Zavalny, Leader of the Energy Committee of the State Duma, revealed that digital assets were a payment alternative for allied nations.

Amid mounting economic sanctions against Russia, the government has revealed that the possibility of selling energy resources in exchange for digital assets is still alive. This information came from an official member of the State Duma, the subordinate house of the Russian Federal Assembly.

On Thursday, the State Duma Energy Committee Chairman, Pavel Zavalny, highlighted that Russia might start receiving payments in different assets for its exports, creating with oil and natural gas. The parliamentarian clarified that the terms will depend on the state of foreign relations of the importing country but that Bitcoin could be an alternative for allies nations to purchase Russian goods.

The statement arrived during a press conference on the situation in the energy sector in Russia and on world energy markets. The Bitcoin Magazine and Digital media outlets released the official words. He said that Russia offered friendly nations like China or Turkey to switch payments to national assets, like rubles and yuan. When it comes to Turkey, the exchange can get done both in lira and rubles.

Bitcoin Would Become a Payment Option for Russian Oil

Navalny’s comments arrived just a day after Russian President Vladimir Putin revealed that he would start requiring unfriendly nations to pay for their Russian gas purchases in rubles.

The president’s remarks caused market chaos, and gas prices in Europe soared on concerns that the move would aggravate the region’s energy crisis. Putin spoke Tuesday during a meeting with top government ministers that got televised by national media, CNBC reported.

The Russian leader stated that Russia would continue to bring natural gas according to the established volumes and prices in previously concluded contracts; the changes will only affect the payment currency, which would switch to Russian rubles.

At Wednesday’s conference, the Chairman of the Energy Committee reflected on Putin’s decision, adding that the country should also receive other assets. According to Bitcoin Magazine, in addition to Bitcoin, Zavalny proposed to obtain gold.

Although the Russian president’s message was blunt, it is unclear whether Russia can effectively unilaterally change the existing contracts.

On the other hand, Bitcoin payments for energy resource trading remain unclear. Last year, Putin had already ruled out such use during an interview for CNBC, in which he said that he couldn’t believe that digital assets could be helpful in the sector.

Meanwhile, authorities in the United States of America and the European Union have reiterated that the punishments applied on Russia expand their tentacles to digital currencies such as Bitcoin. Faced with concerns that Russia may use digital assets to avoid financial penalties, Western allies have been strengthening their rules to obstruct avenues of entry into the market.

By: Jenson Nuñez

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