Project founders and executives experienced greater turbulence than crypto traders.
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Leaving no stone unturned
Indian regulators are worried that crypto exchanges are not complying with the country’s foreign exchange laws.
According to some reports, an Indian crypto exchange CoinSwitch Kuber, which was valued for around $1.9 billion last year, was searched by the Enforcement Directorate [ED], as the exchange allegedly violated forex laws by acquiring shares to the tune of over ₹ 20 billion. There was also an allegation that the company did not comply with some Know-Your-Customer [KYC] protocols.
A company spokesperson said that CoinSwitch Kuber stressed on transparency and engagement. Some of CoinSwitch Kuber’s notable investors include Andreessen Horowitz and Coinbase Ventures.
Shocking criminal stats
Technology research company Elliptic confirmed that a formidable amount of financial crime had indeed taken place worldwide. The company’s newly released 2022 NFT report revealed that more than $100 million in NFTs was stolen by scammers between July 2021 and July 2022. Last month alone more than 4,600 NFTs were stolen, breaking a new record.
However, those behind NFT thefts are not just lone wolf hackers or civilian tricksters.
“There is a growing threat to NFT-based services from sanctioned entities and state-sponsored exploits. This has been emphasized by the $540 million heist from Axie Infinity’s Ronin Bridge by North Korea’s Lazarus Group and the possession of NFTs by the US-sanctioned Chatex cryptoasset exchange. Digital assets worth more than $160,000 originating from sanctioned entities have been used to purchase NFTs,” stated Elliptic’s report.
Another opening scammers and hackers exploit is the Discord server or social media channels of NFT projects, despite account administrators using multi-factor authentication.
The report noted that though the crimes represented a small proportion of overall NFT trades, the information could hugely damage the NFT market’s image and spoil the trading experience for legal users.
Accusations of theft
Crypto investors and regulators worldwide are following the case of crypto lender Celsius Network LLC., which abruptly froze transfers and withdrawals on its platform on June 12 and filed for Chapter 11 bankruptcy around a month later.
On Tuesday this week, Celsius sued its former investment manager Jason Stone and his company KeyFi Inc., claiming that his failure to invest assets in a competent manner led to losses of “many tens of millions of dollars.”
KeyFi, meanwhile, earlier sued Celsius for allegedly running a Ponzi scheme, among other accusations.
According to court papers, Mr. Stone worked with Celsius for less than a year, until March 2021.
However, the crypto community is more keen to hear from Celsius founder and chief executive Alex Mashinsky. The CEO, once a frequent Tweeter who disagreed vocally with Celsius’ critics and skeptics, has not tweeted since around July 19. Celsius’ court proceedings could go a long way in showing the industry what taking accountability in the world of crypto looks like - if it ever happens.