Tag: cryptocurrency

Worldcoin isn’t as bad as it sounds: It’s worse

Worldcoin — a new financial system connected to sensitive biometric information, mostly harvested from poor people — sure sounds like a terrible idea.

“Terrible” doesn’t do it justice.

Worldcoin will need to assemble a vast database of iris data. But not everyone is eager to gaze into an Orb. In the bootstrapping phase, at least, you had to pay people to scan their eyes. And so Worldcoin turned to the global south — home to the cheapest eyeballs — and played a dark game of ‘what will people do for money?’

Incredibly, Worldcoin was unprepared for an obvious consequence of this rollout strategy: A black market for verified credentials. You can now seemingly buy a World ID for as little as $30. Anyone, then, with more than $30 on hand can command more than one digital identity (although Worldcoin is aware of this issue and has proposed solutions to resolve it). Connecting real people to digital identities is a thorny puzzle. 

Worldcoin does not fix this. And it’s unlikely it ever can, since nothing in the design can stop professional sybil attackers farming eyeballs on the ground level through nefarious means.

This does not inspire trust in the system or its designers. And yet trust is what they demand. Worldcoin’s promotional materials are full of promises — to delete sensitive biometric information, or keep it hidden from view, or not use it in nefarious ways. One blog post (quoted here; the original appears to have been changed since initial release) put it this way: “During our field-testing phase, we are collecting and securely storing more data than we will upon its completion… We will delete all the biometric data we have collected during field testing once our algorithms are fully-trained.”

“Trust us,” in other words. “We’ll totally delete the eyeball database.”

But when it comes to sensitive information, promises aren’t enough. And the very people who insist that you trust them are the ones who should command the most suspicion. The fact that Worldcoin’s co-founder Sam Altman also heads up OpenAI — a firm currently being sued over allegations of dubious uses of large data sets — asks more questions than it answers.

Sometimes Worldcoin’s privacy promises are conjoined with dazzling technical details. Zero-knowledge proofs, we’re told, will save the day, and allow users to prove humanity without connecting any particular financial activity to a World ID or other associated transactions.

There’s a grain of truth here. Zero-knowledge proofs can generate impressive privacy guarantees. But in the case of Worldcoin marketing, they’re more theater than substance. Taking off your shoes at the airport makes it look like important precautions are being taken (but doesn’t actually make you any safer); and long blog posts about zero-knowledge proofs distract from, but don’t in fact address, the problem of Worldcoin asking for users’ trust.

Linking immutable biometric traits to money could have dystopian consequences.

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Missing millionaire crypto influencer found dismembered in suitcase

Police have launched a murder investigation after the dismembered remains of missing millionaire Fernando Pérez Algaba, 41, were discovered by a group of children in Argentina over the weekend.

The grisly case came to light after the kids found a red suitcase filled with body parts while playing by a stream in the town of Ingeniero Budge, Buenos Aires Province, on Sunday, Jam Press reported.

The children’s parents notified the Buenos Aires police, who inspected the package and reportedly found the victim’s legs and forearm inside, discovering another whole arm in the stream.

On Wednesday, authorities discovered the missing head and torso, El País reported.

The body parts were cleanly amputated, suggesting the work of a professional, local media reported.

Meanwhile, a subsequent autopsy revealed that the victim had been shot three times before the dismemberment.

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Worldcoin May Have a Biometric Data Black Market Problem

Worldcoin, the digital identity and financial services crypto project that verifies people by scanning their irises, has found itself amid controversy after reports alleging that fraudsters are buying iris scans from the black market to register on the platform.

The project, which is headed by OpenAI CEO Sam Altman, is currently preparing to launch and has been registering users across the world with the help of its physical imaging device called the Orb. The project aims to give everyone on the planet some of its Worldcoin crypto token after registration while their accounts are anonymized.

The lure of free crypto that may be exchanged for real money in the future seems to have been too strong for some people. According to Chinese blockchain-focused outlet Blockbeat, fraudsters have been offering iris scans from Know Your Customer (KYC) merchants in Cambodia for less than $30. Other iris scan may come from African countries such as Kenya.

Blockbeat did not clarify whether the back market iris scans were genuine or whether they were successfully used for registration for Worldcoin.

In response to Gizmodo, Worldcoin said that the platform did not have an issue with iris scans on the black market but it did detect several hundred cases of fraud involving its digital passport World ID, the verification protocol used to determine real identities. The World IDs are being sent to a third-party World app on the black market. The company claims it has taken steps to increase security and create a new recovery process for users’ World ID.

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Biden proposes 30% climate change tax on cryptocurrency mining

The White House is trying to persuade Congress to pass a 30% tax on the electricity used in cryptocurrency mining in the next federal budget in order to minimize the nascent industry’s impact on climate change.

“Cryptominers’ high-energy consumption has negative spillovers on the environment, quality of life, and electricity grids where these firms locate across the country,” the president’s Council of Economic Advisers (CEA) argues in a blog post that will appear on the White House website on Tuesday, to which Yahoo News gained advance access. The post will lay out the case for the Digital Asset Mining Energy (DAME) excise tax, which the CEA writes is an “example of the Administration’s efforts to fight climate change and reduce energy prices.”

“Currently, cryptomining firms do not have to pay for the full cost they impose on others, in the form of local environmental pollution, higher energy prices, and the impacts of increased greenhouse gas emissions on the climate,” the CEA writes in its post. “The DAME tax encourages firms to start taking better account of the harms they impose on society.”

Burning fossil fuels to create electricity accounts for 25% of annual U.S. greenhouse gas emissions and releases harmful air pollutants such as nitrogen oxides and particulate matter.

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US House Committee publishes draft bill that would call for the exploration of CBDCs

The House Financial Services Committee has published a draft bill that would regulate stablecoins. The bill proposes a moratorium on stablecoins backed by other crypto assets until a study is conducted and requests a study on a central bank digital currency (CBDC).

The bill follows two major incidents involving stablecoins over the past year. The first was the fall of terraUSD (UST), which was backed by the LUNA token, and the second was the USD coin (USDC) temporarily not being backed by the dollar.

The moratorium on stable coins would last until a study is conducted.

The bill also calls for confidential briefings on, “implications for CBDCs, foreign and potentially from the United States, of the engagement of these organizations and governments in developing the standards being used or to be used for CBDCs.”

The bill further states that “the Secretary shall consider the following standards,” and one of those is, “interoperability among CBDCs and other public and private elements of the financial system.”

Finally, it adds that the “convertibility and availability for users, including methods by which users will hold and use CBDCs,” should also be explored.

We obtained a copy of the draft bill for you here.

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2022 Biggest Year Ever For Crypto Hacking with $3.8 Billion Stolen, Primarily from DeFi Protocols and by North Korea-linked Attackers

2022 was the biggest year ever for crypto hacking, with $3.8 billion stolen from cryptocurrency businesses.

Hacking activity ebbed and flowed throughout the year, with huge spikes in March and October, the latter of which became the biggest single month ever for cryptocurrency hacking, as $775.7 million was stolen in 32 separate attacks.

Below, we’ll dive into what kinds of platforms were most affected by hacks, and take a look at the role of North Korea-linked hackers, who drove much of 2022’s crypto hacking activity and shattered their own yearly record for most cryptocurrency stolen. 

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Bankman-Fried Asks Judge To Hide Identities Of Bail Guarantors

FTX founder Sam Bankman-Fried has asked a judge to conceal the identities of two people who will help secure his bail in addition to his parents’ house in Palo Alto, California, Bloomberg reports.

“If the two remaining sureties are publicly identified, they will likely be subjected to probing media scrutiny, and potentially targeted for harassment, despite having no substantive connection to the case,” wrote SBF’s lawyers in a letter filed on Tuesday seeking redactions of the names of the two individuals who intend to sign as sureties to his bail.

“Consequently, the privacy and safety of the sureties are “countervailing factors” that significantly outweigh the presumption of public access to the very limited information at issue,” the letter continues.

Bankman-Fried’s $250 million bail package – granted in his first appearance on US soil since his arrest in the Bahamas, was secured by his parents’ Palo Alto home, which is worth nowhere near that amount. The judge in the case also required that two people of “considerable means,” at least one of whom cannot be a relative, also sign the bond.

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FED Chairman Jerome Powell Met with FTX’s SBF in February 2022 When the FED Was Examining a Federal Digital Currency

The FED’s Jerome Powell met with then CEO and founder of FTX, Sam Bankman-Fried (SBF) in February 2022.  This was the same time that the FED was examining the implementation of a federal digital currency. 

FTX’s founder SBF is sleeping in his parents’ basement after being rated one of the youngest billionaires in the world.  The former crypto king is now facing nine counts by the DOJ in the Southern District of New York related to defrauding its customers.

During his incredible rise, SBF was meeting some of the world’s top financial operatives.  In February of 2022, SBF met with FED Chairman Jerome Powell.

It’s unknown what was shared at this meeting but a short time later in June 2022, the FED announced its plans to develop a central bank digital currency.

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SBF Was Meeting With Senior White House Officials Shortly Before FTX Collapse

FTX founder and accused crypto-crook Sam Bankman-Fried met with senior White House officials on at least four occasions in the months leading up to his firm’s massive implosion, Bloomberg reports.

On Sept. 8, SBF met with senior Biden adviser Steve Ricchetti in a previously unreported encounter, White House officials familiar with the matter said. The meeting was “the latest in a handful of sessions,” according to the report.

What’s more, Bankman-Fried’s brother, Gabriel, held a March meeting of his own and was also at the May 13 meeting – bringing the total number up to five meetings that involved one or bother brothers. 

According to one source, “politics” were not discussed despite SBF being a Democrat megadonor credited as a major factor in President Biden’s 2020 win. Instead, the brothers allegedly talked about general matters related to the ‘crypto industry and exchanges,’ as well as “pandemic prevention related to the foundation, Guarding Against Pandemics, run by Gabe Bankman-Fried,” according to an official.

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Alameda Wallets Suddenly Become Active Day After SBF’s Bail-‘Out’

The crypto wallets associated with now-bankrupt trading firm Alameda Research, the sister company of FTX, were seen transferring out funds just days after the former CEO Sam Bankman Fried was released on a $250 million bond.

The transfer of funds from Alameda wallets raised community curiosity, but more than that, the way in which these funds were transferred grabbed the community’s attention. The Alameda wallet was found to be swapping bits of ERC-20s for Ether/Tether, and then the ETH and USDT were funneled through instant exchangers and mixers.

For example, a wallet address that starts with 0x64e9 received over 600 ETH from wallets that belong to Alameda, part of it was swapped to USDT while the other part of the transaction was sent to ChangeNow.

On-chain analyst ZachXBT noted that the Alameda wallet was eventually swapping the funds for Bitcoin using decentralized exchanges such as FixedFloat and ChangeNow. These platforms are often used by hackers and exploiters to hide their transaction routes.

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