Russia’s Top Bank Goes Bankrupt amid War with Ukraine

Jenson Nunez
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Russia’s Top Bank Goes Bankrupt amid War with Ukraine

A wave of withdrawals left the Russian bank without liquidity. Sberbank shares plunged up to 50% in the market.

Another face of Russia’s war with Ukraine got manifested in the economic sphere: now, the European subsidiary of Sberbank, the Russian central bank, is the one most affected. According to the European Central Bank (ECB) statements, Sberbank Europe AG would be in “bankruptcy or probable bankruptcy.”

The situation of the banking entity could be a consequence of a massive wave of withdrawals of funds from its clients amid geopolitical tensions. This situation would have caused a lack of liquidity that could not get reversed, preventing the institution from meeting its obligations.

The France24 news agency quoted the ECB’s banking supervision division saying that the bank would be unable to pay its debts or get rid of other responsibilities shortly. The European financial authority considers no positive prospects with “realistic possibilities” for the institution to restore its cash flow.

Meanwhile, the shares of Sberbank (SBER) plummeted more than 50% during the day this Sunday, February 27. This Monday, SBER has presented a slight recovery in the markets early this Monday.

However, slight recoveries look unrepresentative when it comes to a weekly context, down over 4% and down 47% over the past two 7-day periods, in TradingView data.

The Blockade of Russia

Previously, Russian banking entities would face exclusion from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), the leading interbank trade network worldwide.

Meanwhile, citizens from both sides desperately try to get their hands on money. Just as the Russians have chosen to withdraw their funds from Sberbank, on the Ukrainian side, there have been very long lines to withdraw cash from ATMs, amid a blockade on transactions with electronic money, as we reviewed in CriptoNoticias.

The Russian currency, the ruble, and the Ukrainian hryvnia have been equally affected in the foreign exchange markets. In both cases, the exchange rate against the dollar and euro has skyrocketed, although the one that comes out worst at the moment is the ruble.

The Central Bank of Ukraine developed a resolution to obstruct the foreign exchange market and movements with electronic money and limit the cash withdrawal of their internal currency. The procedure is one policy that comes together with the Martial Law declared after the armed attacks by Russia on many regions of that country.

By: Jenson Nuñez

Scammer who Extracted USD 2 Billion in Bitcoin Could Deal with a Sentence of at Least 70 Years in Prison

Jenson Nunez
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Scammer who Extracted USD 2 Billion in Bitcoin Could Deal with a Sentence of at Least 70 Years in Prison

Satish Kumbhani, from India, receives charges with ten counts of cryptocurrency fraud. The main person in Bitconnect got tried while he was still at large.

The US Department of Justice charged BitConnect founder Satish Kumbhani with misappropriating $2 billion through a digital currency Ponzi structure that amassed many victims behind the mask of a lending protocol.

According to the court file, 36-year-old Kumbhani commanded a network of promoters to boost the price of BitConnect Coin, committed wire fraud, and led a financial entity without the proper licenses. He received charges with ten counts in total, including international money laundering. If the courts find him guilty on all counts, he will struggle with a maximum sentence registered in 70 years in prison.

According to the Justice Department, Kumbhani has Indian Nationality and remains a fugitive. In September of 2021, he received a series of accusations from the Securities and Exchange Commission, together with one of the leading promoters.

Behind the mask of loan program,” Kumbhani and his promoters claimed that they had an alleged proprietary technology with which they operated the BitConnect Trading Bot and Volatility Software platforms. They could generate substantial profits, guaranteeing returns by using investors’ money to trade the cryptocurrency market’s volatility.

As mentioned in the accusation, BitConnect operated as a Ponzi scheme paying its older investors with new ones. In total, Kumbhani and his accomplices seized more than $2 billion from his victims.

 A Trap for Bitcoiners

To join BitConnect, investors had to use bitcoin to purchase BCC on the Bitconnect Exchange. Therefore, this network served as a trap to catch digital currencies. In exchange, the victims received a token with the promise that they could make a profit, as the court document highlights.

The platform got surrounded by heavy publicity on social media in February 2016. By December 2017, its coin was trading for $463, but its price subsequently plummeted, leaving victims trapped in a scam. Bitconnect afterward came to an end when in 2018, the SEC ordered it to cease operations.

However, US authorities announced last year that victims would receive compensation with the money confiscated from BitConnect’s leading promoter, Glenn Arcaro because their cryptocurrency holdings got housed in digital wallets handled by the US government for a few months.

World Justice Regarding BitConnect

After creating its cryptocurrency, the company got repeatedly accused of fraud. In 2018, US regulators put their eyes on the scheme, and the company ended up closing. That year, the token got banned from the last supported exchange due to many accusations against BitConnect.

Since then, dozens of accusations against the company have emerged in countries like the United States of America, the United Kingdom, Singapore, Australia, and India; the FBI even developed a program to detect victims of BitConnect.

By: Jenson Nuñez

BTC Keeps Recovering, but Nobody Knows Where the Price Is Heading Next

Alexander Salazar
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BTC Keeps Recovering, but Nobody Knows Where the Price Is Heading Next

If the bulls breakthrough USD 39,500, the ground will be clear for USD 44,500, the most significant resistance. There are still increasingly low lows, but the support zone around USD 35,000 indicates the long-term upward trend continues.

The conflict between Russia and Ukraine caused the price of various risk assets to drop sharply, but those losses have disappeared. The value of Bitcoin (BTC) has been increasingly high in the last week, but nobody knows where it is heading next.

Bitcoin is trading at around USD 38,251 and has accumulated a loss of 0.6% in the last week. Its daily trading volume is above USD 19.40 billion, and its market capitalization is about USD 725.63 billion, according to CoinGecko.

Although the price has had a significant rally, the risk of another drop remains.

The cryptocurrency market recently moved in a highly correlated way with the stock market due to the growing war tension in Europe.

Investors seem to have taken advantage of the fear to buy at low prices regardless of the conflict. They probably foresaw that the value of Bitcoin had already reached the bottom. Asserting that would be somewhat hasty, but nobody rules out that scenario.

If the tension between Russia and Ukraine continues to grow, investors will likely reduce their risk exposure. That would lead to further drops in the cryptocurrency market as a whole.

However, it would not be of concern in the medium/long term since the global situation may generate more increases in price. Quantitative expansion, low-interest rates, excess liquidity, geopolitical uncertainty, and inflation will contribute.

Weekly Prediction about the BTC Price

The daily BTC chart shows that buying pressure swallowed up the recent losses, leaving a significant rejection of low prices.

The market movement prevented the support from breaking at USD 36,800, somewhat stabilizing the balance of probabilities.

The bulls now want to drive the price, but the resistance at USD 39,500 hampers them. If they break through it, the ground will be clear for USD 44,500, the most significant resistance. The price must overcome that level to confirm that the bulls have resumed control.

If the value of Bitcoin does not break through resistance at USD 39,500 in the next few hours, the risk of a further drop increases.

The price will likely touch the support zone around USD 35,000 again. However, the rejection of low prices is a good sign for those trusting in the medium/long term.

Weekly Analysis of the Bitcoin Price

The weekly BTC chart clearly shows the recent rally is not too big, as there are still increasingly low lows.

However, the significant support zone around USD 35,000 is a good sign, as it indicates that the long-term upward trend remains intact.

The rejection of low prices indicates that there could be a higher rally in the next few hours/days.

However, that will depend on the evolution of the conflict in Europe. An action that makes the markets shake will cause the price of Bitcoin to stagger.

To conclude, this weekly prediction about the BTC price leans slightly towards the buyers. However, the price should at least break through resistance at USD 43,000 to confirm a significant rally.

By Alexander Salazar

Cryptocurrencies Could Help Russia Circumvent International Sanctions

Alexander Salazar
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Cryptocurrencies Could Help Russia Circumvent International Sanctions

Russian billionaires could circumvent the sanctions by using cryptocurrencies to buy goods and services abroad. People need to move fiat money through banking institutions that can track, freeze or block it, unlike what happens with cryptocurrencies.

Russia and its billionaires could use cryptocurrencies to circumvent the impact of the sanctions imposed by the United States and its allies. The Eurasian country faces those restrictions due to the military advances against Ukraine.

The US president, Joe Biden, reacted to the invasion of Ukraine by Russia by authorizing a series of economic sanctions against the latter. In that way, he seeks to limit their ability to do business in US dollars and other international currencies.

The United States imposed restrictions on five Russian banks with an accumulated capital of around USD 1 billion worth of assets. Some sanctions will also affect many Russian elites and their relatives.

The sanctions by the United States and its allies against Russian companies and individuals could close the door for them on the West. However, billionaires could circumvent those restrictions by using cryptocurrencies, which allow them to pay for goods and services outside of the country.

Mati Greenspan, CEO of Quantum Economics, said that two people or organizations could do business through Bitcoin. If wealthy people are concerned that the sanctions may cause their accounts to freeze, they can protect themselves with the pioneering cryptocurrency.

In October, the US Treasury Department warned that cryptocurrencies potentially reduce the effectiveness of US sanctions. They said that those assets allowed bad actors to hold and transfer funds outside the traditional financial system.

Cryptocurrencies as a Hedge against International Sanctions

An account holder needs to move fiat currencies through banking institutions that can track, freeze or block them. However, one person can send cryptocurrencies directly to another anonymously and without restrictions due to government sanctions.

In addition, cryptocurrency holders can set up a network of wallets with different addresses on various exchanges. That makes it too difficult to track transactions or link them to a particular individual. They can also choose crypto exchanges in jurisdictions that do not impose sanctions and do not require complying with regulations.

However, experts consider that Russian citizens cannot easily convert crypto assets into fiat currencies in the conflict with Ukraine. That may affect business transactions and operations in Russia, as not all companies and institutions accept cryptocurrencies.

The sanctions would affect the Russians who personally benefited from the policies of the Kremlin. US President Joe Biden stated that his government would keep pace with those designations against corrupt billionaires in the coming days.

The Russian citizens sanctioned by the United States and its allies have not yet revealed whether they are cryptocurrency holders. However, those who own crypto assets like Bitcoin will have an advantage over those who do not.

Decentralized cryptocurrencies play a relevant role in the economy, which is evident in the context of a war or any other crucial conflict. Since no government or state controls them, people can transfer money directly to others across borders.

By Alexander Salazar

A Citizen Fled Ukraine with Bitcoins in His Wallet

Jenson Nunez
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A Citizen Fled Ukraine with Bitcoins in His Wallet

The features of Bitcoin allow war refugees have total power over their money. The war between Russia and Ukraine highlights all the advantages of a currency like Bitcoin.

The case of a user who fled from Ukraine during the war with Russia and managed to take all his money with him became famous because he possesses Bitcoin.

Francesco Madonna, CEO of the Helios Fund firm, went to Twitter to highlight that one of his employees managed to leave Ukraine a few moments before a ban on leaving the country applied to male citizens between 18 and 60 years of age became active.

This man managed to store his bitcoins in a hardware wallet and flee directly to Poland, a nation that shares borders with Ukraine and where he intends to go to an ATM to turn said BTC into fiat money.

In a series of displayed text messages, this person highlighted that he couldn’t withdraw his money because the banks were completely inactive. He managed to purchase 600 dollars, but the national entities obstructed every international transaction, and he couldn’t even send those funds to a country like Poland.

According to CoinATMRadar, a tool he used to locate ATMs, there are 171 Bitcoin ATMs in Poland. Madonna said that Bitcoin saved his life. If he had wasted his time trying to get the cash he needed at the moment, he would have missed the opportunity to cross the border and be forced to go to war.

The Ideal ally of Ukraine

Ukraine is facing this war without the support of its allies, but Bitcoin paved the way for the European country to find new ways to finance their supplies.

At least 113 BTC entered the country as donations intended to back up the Ukrainian cause. At the same time, the Patreon platform obstructed some gifts that got sent to finance weapons and military equipment.

Some nodes of Lightning, Bitcoin’s second layer network, could receive damage, and the price of BTC might crumble down due to fear in the market environment. Its technological features make it the best item to deal with the slashes of the war.

Due to its deflationary features, fully transparent transaction log, a shield against censorship, and ease of trading; bitcoin stands out as the ultimate financial item.

Amid an economic and political conflict, the affected citizens are looking for more than just tools to shield them against the horrors of war, but also for items that could make their routines easier in times like this; bitcoin shines due to its versatility.

Purchasing futures in gold or jewelry to keep capital safe would be possible with Bitcoin. Still, it’s also likely that some will see value in bitcoin’s features to bring citizens power over their money.

By:Jenson Nuñez

Hackers Attacked the Ukrainian Government

Jenson Nunez
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0
Hackers Attacked the Ukrainian Government

This week the Ukrainian government struggled with the attack of cybercriminals. A group of Hackers could have spied on and then erased the stolen information.

A war occurs on every corner of Kyiv and elsewhere in Ukraine, but a silent war is also raging on Ukrainian ground: cyber warfare. Last Wednesday, cyberattacks got spotted on Ukrainian government institutions, media outlets, and websites. Russia has also experiencing cyberattacks since the invasion of Ukraine started.

Hackers who attacked Ukraine deleted the Ministry of Internal Affairs of that nation’s stolen information by using malicious programs. It is unclear if these attacks come from Russian areas or if the Russian government is currently leading them. However, the probability is high, given the nature of this problem between those two nations.

According to Bloomberg, using three sources and remaining anonymous, much data belonging to the Interior got eliminated from the devices. This government entity is responsible for tracking the national police entities and carrying out other duties related to security in the area.

According to one of the sources, the attackers could have applied intelligence strategies, tracking and examining the relevant information concerning Ukraine’s security plans, and then erased the entire information pack.

Likewise, the three sources explained that weeks ago, before Russia attacked Ukraine; the attackers would have been vanishing vital data from the Ukrainian telecommunications platforms and activating malware to damage the infrastructure.

The extent of the damage is unclear, but more operations to investigate the crime are already on the way; the government has not revealed further information on the matter.

On the other hand, the operators of the Conti ransomware released a statement presenting their supportive stance on behalf of the Russian government, which could become a threat to Ukraine and any actor encouraging the situation against Russia.

Ukraine Gets Ready for Defense against Russian Cyber-Offensive

However, Ukraine is not alone, and the reaction from allied hackers has been prompt and constant. , According to Reuters, last Thursday, a hacker secretly operating for the Ukrainian administration highlighted that requires more volunteers to develop a cyber shield and protect their communications and IT infrastructure.

The hacker that revealed these intentions is Yegor Aushev, who currently leads a cybersecurity entity. He expressed that the Ukrainian Defense Ministry hired him as a recruiter of experts to release a cyber-defensive campaign against Russia.

Also, this week the famous group, Anonymous revealed that there would be a technological war on Russia, but reports show zero attacks from this group.

By: Jenson Nuñez

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