In 2022, Shan Hanes, the chief executive of the Heartland Tri-State Bank in Kansas, met a friendly investment adviser from Australia on WhatsApp. The adviser persuaded Hanes to invest a few thousand dollars in an online cryptocurrency-trading platform, which generated impressive returns. Hanes ended up investing all his own money, $60,000 from his daughter's college fund, $40,000 from his local church and $47 million from the bank he ran.

The “adviser” was, it transpired, not in Australia but most likely in Asia; the “trading platform” was fake; and Hanes had become the highest-profile US victim of a practice known in Chinese as sha zhu pan, a “pig-butchering scam”. Some money was recovered, but investors lost $9 million, the bank collapsed, and Hanes was sentenced to 24 years in prison.

How do the scams work?

“Long cons” have been around for ever, but these – in which the scammers invest a lot of time in building a relationship with the victim, a process they liken to fattening a pig for slaughter – have distinctive features.

Scammers actively seek out victims on social media: pig-butchering originated on regional Chinese dating sites around 10 years ago, but it has since spread to platforms such as Telegram, WhatsApp and LinkedIn. They create trusting relationships with their victims, sometimes of a romantic nature; one former scammer told The Economist she’d been trained to target people who were “rich but not good-looking”.

They rely heavily on crypto, which is easy to launder and difficult to recover. These and other online scams are increasingly run out of Chinese-linked “scam hubs” or “fraud factories” in Southeast Asia.

How did such operations develop?

Gambling – illegal on mainland China – is one of the main revenue streams for domestic and foreign-based Chinese mafias. Casinos and online gambling hubs for Chinese-speakers, based in Cambodia and Myanmar, were one of their main enterprises until 2019, when Cambodia tightened its regulations; Covid lockdowns then emptied the casinos. The criminal syndicates refitted their properties as centres where teams of workers – often trafficked and coerced – run online scams at scale.

Chinese citizens were their original targets, followed by Chinese communities around the world. But they soon expanded to other nationalities, which also meant expanding their trafficking activities. In the four years from January 2020, at least $75 billion was taken in crypto scams; estimates suggest the industry generates over $500 billion a year, comparable to the global drugs trade.

Why do they traffic people?

Many of the gangs’ voluntary workers went home during Covid; not enough locals had the necessary language and computer skills, and recruiting people into cybercrime isn't always easy. The scammers’ solution was to lure people – typically young graduates from developing countries – to cities such as Bangkok with fake offers of legitimate employment, then drive them to compounds in Myanmar, Cambodia or Laos, and put them to work under threats of torture, organ harvesting and sexual slavery.

A UN report this February found that there is a workforce of at least 300,000 people from 66 countries, about 75% of them in the Mekong River region of Southeast Asia. Many live in vast compounds, like self-contained towns – some over 500 acres in size, heavily fortified, with armed guards. It's unlikely that all the workers are coerced, but many of them certainly are; some families have had to pay ransoms in cryptocurrency to get them out.

What are the nations doing about it?

Weak local governance, along with easy access to China, is the reason the gangs set up shop in the Mekong region in the first place. Myanmar's military junta doesn’t control the whole territory; much of it is controlled by insurgent groups and warlords; while Cambodian politics has been dominated by one family since the 1980s. Transparency International ranks both governments among the most corrupt in the world. Analysts calculate that Cambodia’s scam hubs generate earnings worth about 60% of the nation's GDP. According to the US Treasury Department, the Huione Group, a financial conglomerate with ties to Cambodia’s ruling Hun family, has provided the gangs with financial and practical services. Like Latin American “narco-states” before them, these countries are well on the way to becoming “scam states”.

Is there international pressure to close them down?

Influenced partly by stories like the kidnapping of the actor Wang Xing, and even a popular film about scam hubs, “No More Bets”, China has launched an aggressive crackdown. There have been heavily publicised rescues of coerced workers in the Mekong countries; under Chinese pressure, local law enforcement has dismantled notorious scam hubs like the KK Park complex in Myawaddy, Myanmar, thought to have been run by Macau-based triads. Thai forces shelled several other hubs during a border conflict with Cambodia last year. China has arrested hundreds of thousands of people over scams, and in January it executed 11 members of the “Ming family” crime group, who had been extradited from Myanmar.

Is the situation improving?

Experts worry that police raids on compounds in Cambodia and Myanmar are largely for show: the bosses are often tipped off in advance. In any case, they have globalised their operations, popping up as far afield as Peru and the Philippines. Police even closed down an operation targeting Chinese citizens on the Isle of Man in 2024. But developments in AI may mean that the scammers are getting less reliant on human trafficking for language skills. One report on AI-assisted scams found that they rose by 450% in 2024-25 compared with 2023-24. The scammers now often use “deepfakes” of increasingly good quality to groom their victims.

A British computer scientist who pioneered a forerunner of cryptocurrencies has denied reports that he is Satoshi Nakamoto, the pseudonymous creator of Bitcoin.

An investigation by The New York Times used biographical details and writing style comparisons to make the case that Adam Back was the cryptocurrency’s enigmatic founder.

Who is Adam Back?

Back, a 55-year-old computer scientist from London, “has long been seen as a potential candidate to be Nakamoto”, said The Times. “A pioneer of early digital asset research in the 1990s”, he “has a long-standing background in cryptography, the techniques used to secure and verify digital information”. This includes developing Hashcash, “a proof-of-work system that later influenced Bitcoin” and was referenced by Nakamoto in his Bitcoin “white paper”.

Back dismissed The New York Times’ use of writing analyses to link him to the elusive Nakamoto as “a combination of coincidence and similar phrases from people with similar experience and interests”. In reference to the claim that he disappeared from Bitcoin message boards when “Satoshi” was at his busiest, Back insisted that he “did a lot of yakking” on the forums at the time. “I’m not Satoshi,” he said.

Why is Nakamoto’s identity a secret?

Since Bitcoin launched in 2008, Nakamoto has chosen to stay anonymous. All their communication was written under their pseudonym and no verifiable personal details have ever been released or revealed. Since 2011, they have given no public statements at all, their seeming disappearance giving them a “cult-like status among crypto enthusiasts”, said The Times.

This anonymity was very on-brand for Bitcoin. The cryptocurrency was designed to have no central authority; if the identity of a real person were known they could become a leader or figurehead, which might contradict the founding principle of decentralisation. There is a security element, too: Nakamoto is thought to own $78 billion worth of bitcoin, so remaining anonymous lessens the risk of extortion or kidnapping.

It’s also possible that the mysterious founder is not one person, but rather a team of developers or cryptographers. Either way, the years of speculation have added to Bitcoin’s profile and acted as a useful indirect marketing tool.

Has anyone else been suggested?

In 2014, Newsweek identified a Japanese-American systems engineer called Dorian Satoshi Nakamoto as the creator of Bitcoin. He disputed this, and the claim has “largely been debunked”, said the BBC.

The following year, Wired suggested Nakamoto could be a pseudonym for Australian computer scientist Craig Wright. Unlike Back and Dorian Nakamoto, Wright went public to assert he was indeed Nakamoto, until a UK High Court judge ruled he was not the Bitcoin founder and barred him from continuing to claim he was.

In 2024, an HBO documentary claimed that Canadian crypto expert Peter Todd was the real Nakamoto, a suggestion he described as “ludicrous”.

Of all the tools and executive authorities available to President Donald Trump, perhaps none has been wielded with as much naked transactional ambition as his ability to effectively pardon any federal convict for virtually any crime. Domestically, Trump’s penchant for pardoning has seen commutations extended to celebrities and lawmakers alike, often coming with an explicit expectation of quid pro quo. However, Trump’s use of political pardons hasn’t stopped at the nation’s borders; the president is increasingly using pardons with an international theater in mind, letting the world know that crossing America’s justice system may not be as final an act as it once was.

Here are the influential foreign figures Trump has pardoned over his two terms in office.

Changpeng Zhao

Although Trump has extended clemency to several cryptocurrency-associated figures over the years, his October 2025 pardon of Binance founder Changpeng Zhao sparked the “most intense backlash of all crypto pardons,” said Benzinga. The move raised “immediate criticism” from lawmakers who said the pardon risked “serious ethical concerns.” Zhao, who was born in China before moving to Canada as a child, had previously pleaded guilty to charges that he enabled financial fraud and money laundering at the “world’s largest exchange for cryptocurrency or digital money on the internet,” CBS News said.

The “self-dealing aspect” of Trump’s pardoning of Zhao, in terms of the “benefit that it conferred on Trump and his family, and people in his inner circle,” is “unprecedented,” said former Justice Department pardon official Elizabeth Oyer to CBS. The pardon came amid the president’s pivot toward a “more friendly stance toward cryptocurrency than his predecessors,” the BBC said.

Juan Orlando Hernández

Elected as president of Honduras just two years before Trump, Juan Orlando Hernández, commonly known as JOH, earned his “place in infamy for the one-time U.S. ally in the war on drugs” in 2024 when he was convicted in New York City for cocaine trafficking, The Guardian said. Hernández’s actions “paved a cocaine superhighway to the United States,” Assistant U.S. Attorney Jacob Gutwillig claimed during the trial, in part by protecting certain traffickers “with the full power of the state.”

Trump’s December 2025 pardon of Hernández came after the former Honduran leader “sent the president a four-page letter casting himself as a victim of ‘political persecution’” while “comparing his fate to that of the American president,” The New York Times said. Speaking about the pardon, Trump affirmed a sense of kinship with Hernández, who was, he said, “treated like the Biden administration treated a man named Trump.”

Aviem Sella

While not a widely known figure himself, Israeli businessman and former IDF officer Aviem Sella played a central role in one of the biggest intelligence breaches in American history, serving as recruiter and handler for American intelligence analyst-turned-spy Jonathan Pollard. Sella was indicted in absentia on multiple espionage counts in 1987, but was not required to be extradited to the United States for what U.S. Attorney Joseph diGenova said was a “political offense,” said The New York Times.

Trump’s surprise pardon for Sella, delivered in the waning hours of his first term, was “requested” by Israeli officials to “close this unfortunate chapter in U.S.-Israel relations,” the White House said in a statement announcing the action. The pardon was “supported by the Prime Minister of Israel Benjamin Netanyahu, Israeli Ambassador to the United States Ron Dermer, the United States Ambassador to Israel David Friedman and Miriam Adelson.”

Ben Delo

Along with fellow BitMex founders Arthur Hayes and Samuel Reed, British tech entrepreneur Ben Delo pleaded guilty in 2022 to violating the Bank Secrecy Act, failing to enact requisite money laundering protections at the widely used crypto exchange. The Biden administration’s investigation and prosecution of BitMex and its founders was “among the first and most significant” legal actions to “target the crypto market,” said Bloomberg. Trump’s March 2025 pardon of Delo, along with a host of other finance and entrepreneurial figures, showed there’s “never been a better time to be a white-collar crook,” Axios said.

In a statement thanking Trump for the pardon, Delo said his company had been targeted for being the “most successful crypto exchange of its kind,” with him and his colleagues “wrongfully made to serve as an example, sacrificed for political reasons and used to send inconsistent regulatory signals.”

A Belgian billionaire has a quiet, ambitious plan to create the “Dubai of the Caribbean” on the island of Nevis, said The Brussels Times. Olivier Janssens, who holds Nevisian citizenship through an investment scheme, has unveiled plans for “Destiny”, a “libertarian community with its own legal system” on the Caribbean island. But for some Nevisians, a crypto state in their midst is a step too far.

A ‘network state’

The “multibillion-dollar project” is likely to involve a “massive reshaping of the south coast of the island” where the development “is already displacing long-term residents by buying their land”, said the Financial Times. Plans for Destiny include “villas and medical clinics” surrounded by “lush green terraces and pools” – and, crucially, a libertarian identity that, in Janssens’ so-far woolly definition, will “let us do our things”.

It forms part of a wider trend known as the “network state” movement, in which tech and cryptocurrency billionaires are attempting to establish “their own, more libertarian, territories”. Many, for the time being, “remain theoretical”.

Destiny is closer to fruition than most because St Kitts and Nevis recently passed new legislation to allow the creation of so-called Special Sustainability Zones, where “innovative approaches to the governance of tech and digital assets” can be trialled, said Cryptopolitan. But for some Nevisians, the prospect of an unregulated “state within a state” and its impact on existing infrastructure, services and “community life” is a cause for concern.

‘Neo-colonialism’

The optics of a “foreign-led takeover” of Nevisian land have sparked a “fiery” debate, said Jam Radio. Former prime minister Timothy Harris described the project as an instrument of “neo-colonialism”, urging citizens to reject what he called a “return to plantation-era subjugation”.

Janssens has promised that Destiny will be “open to Nevisians and remain under government jurisdiction”, said the Daily Mail, and has pledged a “$50 million [£37.3 million] investment in Nevis’ infrastructure”. And not all residents are sceptical. The project could create “a lot of much-needed opportunities for Nevisians and Kittitians”, said The St Kitts and Nevis Observer. If it goes ahead, it may end up as the “envy of the entire Caribbean”.

Ultimately, Nevis stands at a “crossroads”, said St Maarten’s The Daily Herald. Destiny will serve as a “defining test of how far the island is willing to go in reimagining development, law, and partnership with global capital”.

Regulation of cryptocurrency investments are set to be toughened up in a move to boost protections for investors.

The Treasury has revealed that platforms where users buy and sell cryptocurrencies such as bitcoin will be “backed to innovate and grow” as the government seeks to make the UK a “global destination for digital assets”.

The Financial Conduct Authority (FCA) is consulting on new rules to be introduced from 2027. A spokesperson for the City watchdog said “our goal is to have a regime that protects consumers, supports innovation, and promotes trust”.

Millions of people throughout the UK now own cryptocurrency, said ThisIsMoney, with numbers having “surged over the past year”.

How will new rules change how crypto is regulated?

Cryptocurrencies have become a popular alternative investment in recent years, helped by the bitcoin price hitting record highs.

Currently, crypto platforms have to register with the FCA only for money-laundering prevention purposes but the new rules will mean companies are “regulated in the same way as other financial products”, said The Guardian.

This creates a “shift from the current system”, said CoinCentral, and aligns the UK approach “more closely” with the US, while the EU has totally separate rules specifically for crypto.

The FCA said its changes could include new rules on what firms must tell investors “so people have the facts before they invest”, as well as new standards for exchanges to “keep trading safe and reliable”.

Some plans from earlier this year have been “diluted”, said the Financial Times. The regulator will no longer ban trading platforms from offering their own tokens, for example.

How will crypto regulation protect consumers?

Regulation could mean crypto firms are held to account more effectively, “so if you lose your money to a scam then you should be able to get help”, said The Sun.

New rules should also “make it easier for the government to find and address suspicious activity”, said ThisIsMoney.

Regulators will also be able to “impose sanctions or hold firms to account”, said The Independent.

But some areas of the new rules “remain undecided”, added the Financial Times.

The FCA said it would consult early in 2026 regarding whether the market should be covered by its consumer duty rules. These rules require regulated firms to ensure clients receive a good outcome.

Is cryptocurrency a safe investment?

More rules may be coming, but regulators continue to warn about the risks of cryptocurrency investing, said Reuters, especially that investors “should be prepared to lose all of their money”.

Commentators are describing the regulatory shift as a “watershed moment”, with David Heffron, expert in financial services regulation at Pinsent Masons, explaining it would help in “building trust and giving firms certainty”.

The consultation ends in February 2026 and the changes mean it will “likely only get easier” to invest in crypto, said MoneyToTheMasses. But crypto is still a “fundamentally risky investment” and will not be fully regulated in the UK until 2027.

“Bitcoin has proven to be one of the best-performing assets in modern history,” said Al Jazeera. With the value of cryptocurrency increasing “some 1,000 times” over the last decade, it was only a matter of time before governments and banks wanted in.

After being launched following the 2008 global financial crisis, bitcoin was widely dismissed as a “speculative asset with no intrinsic value”. But it has been taken increasingly seriously “by governments, financial institutions and investors alike”, with far-reaching implications for politics, the economy and the way we live.

‘Big bets’

“A number of countries have made big bets” on crypto in the last few years. El Salvador holds more than “$600 million worth of bitcoin reserves”, accepting the asset “as legal tender” from 2021 to 2025.

Donald Trump’s return to the White House marked an optimistic shift in the US’s recognition of crypto as a legitimate currency “after years of government-led crackdowns on the sector”. In January 2024, the US Securities and Exchange Commission approved bitcoin for spot exchange-traded funds (ETFs), which track real-time shifts in stock market value rather than futures. This move allowed investors “exposure to the asset on the stock exchange for the first time”.

Spot crypto ETFs also had “bipartisan support” in South Korea’s 2025 election, said The Block. Lee Jae-myung, of the centre-left Democratic Party, the election’s eventual winner, said crypto funds would “provide more opportunities for South Korea’s younger generation”.

Nigel Farage is an open “supporter of cryptocurrency” and has made Reform the first UK party “to accept donations in bitcoin”, said the BBC. A £9 million donation to Reform from Thailand-based British businessman Christopher Harborne, “the largest ever single donation by a living person to a British political party”, has raised questions about the role cryptocurrency investors may play in future elections.

Ethical quandaries

In Trump’s Washington “crypto is ascendant”, said The Economist. Trump-appointed regulators are “more permissive” and investors are “piling into it”, while pro-crypto lobbying groups are throwing their weight behind political candidates who support it.

The president and his family also promote crypto. In January, the launch of the $TRUMP coin, a cryptocurrency mostly owned by “companies associated with the Trump family”, pointed towards the president’s direct financial interest in crypto. But “clear conflicts of interest” could ultimately do “more harm than good” for the industry.

Trump’s crypto endeavours are just one of a “myriad of entanglements that government ethics watchdogs have warned about for a decade now”, said The Guardian. One of the “primary worries” is the potential for “foreign actors to purchase influence” with the president via “investment in his cryptocurrency”.

In the UK, ministers believe “donations made with cryptocurrency pose a risk to the integrity of the electoral system”, said The Guardian. It is particularly difficult to “work out” who controls or owns crypto wallets based abroad, opening the door to influence by “foreign powers or criminals”.

Ministers are working on legislation that would ban cryptocurrency electoral donations, but the “complex nature of cryptocurrency” means that the proposal is unlikely to be ready in time for next year’s Elections Bill.

Crypto is supposedly the currency of the future, but it is not doing so well presently. The sector has lost more than $1 trillion in value over the last few weeks.

The crypto industry is having a “terrible, horrible, no good, very bad month,” said USA Today. Bitcoin has lost more than 10% of its value for the year, dropping from a high of $126,000 in October to under $90,000 last week. The drop in digital currency values is due to a “whirlwind of factors” that include shaky showings for artificial intelligence and technology stocks amid growing concerns about the overall economy. “No one can say” when the dust might settle.

“It was supposed to be crypto’s year,” said The Wall Street Journal. Since 2025 brought a “crypto-loving White House, Wall Street adoption and friendly legislation,” it seemed poised to erase the industry’s regulatory obstacles. Instead, the “sky-high expectations of a golden age” have foundered. Cryptocurrency’s original reputation was as an “antiestablishment asset” coming out of the Great Recession. Now the sector is trying to “go legit” but having trouble shedding its standing as the “deranged, foul-mouthed little sibling of Wall Street.”

What did the commentators say?

“Brutal” selloffs in the crypto sector happen “every few years, or whenever sentiment snaps,” said Emily Nicolle at Bloomberg. But those previous cycles did not match the “speed and scale” of crypto’s collapse in recent weeks. The difference this time is that crypto is now “woven into the fabric of Wall Street and the broader public markets.” That means its fate is now “tied to AI-fueled market optimism.” Amid growing fears of an AI bubble, though, it does not take much prompting to “spook investors into selling.”

Crypto in recent years has gone from an “object of mockery” to “broadly accepted, even encouraged” by mainstream financial institutions, said The Economist. That victory actually poses a problem. The “wider acceptance” has deepened crypto’s links to the broader financial markets, so that the “pain from a crypto crash will be felt more widely than in the past.” A government intervention seems remote, but “surprises can never be ruled out” in politics and in crypto.

What next?

Crypto believers see it as a “safe store of value against inflation and rising national debt,” said Marketplace. But the current instability comes amid “sticky inflation and a rising national debt.” The sector’s growing acceptance on Wall Street means your 401(k) probably includes some crypto stock. If the downturn lasts, that would produce “some knock-on effects on spending” in the broader economy, said Columbia Law School lecturer Todd Baker to the outlet.

There are now some fears of a “crypto winter,” said MarketWatch. But other observers say the sector is likely still in solid shape for the long term, thanks to its integration with financial markets. Banks like J.P. Morgan now accept crypto assets as collateral. We are not seeing a crypto winter, said Frontier Investments CEO Louis LaValle. “I think we’re watching bitcoin grow up.”

President Trump took another step into the muck last week, said Jim Geraghty in National Review, with an act “stunning in its shamelessness, recklessness, and moral inversion”: he officially pardoned Changpeng Zhao, the billionaire founder of the global crypto exchange Binance.

There aren’t many financial institutions “willing to do work with al-Qa’eda, Isis, Hamas, ransomware hackers, and kiddie-porn enthusiasts”, but Zhao’s Binance answered the call. Two years ago, however, the Chinese-born Canadian pleaded guilty to money laundering: his company agreed to pay $4.3 billion to the US authorities, and he himself paid a $50 million fine, was banned from running Binance and was sentenced to four months in jail.

But it was Binance – and Zhao still owns the bulk of Binance shares – that wrote the basic code of the “stablecoin” issued this year by World Liberty Financial, the Trump family’s crypto firm. So could his pardon have anything to do with the fact his company “is helping put billions into the Trump family coffers”? Trump has been trying to cast Zhao’s prosecution as a Biden-era crypto witch-hunt, said Max Chafkin on Bloomberg. That doesn’t really wash, seeing as how court records reveal that Binance executives openly “joked about Hamas operatives using the service to buy weapons”.

Trump is actually on an unprecedented “run of pardoning financial crooks”, said Alex Kirshner on Slate. He has already “pardoned or commuted the sentences of 18 people or companies... guilty of fraud”. They include Trevor Milton, who cheated investors in his electric truck company Nikola, and Ross Ulbricht, who had been serving two life sentences for operating the dark-web drug marketplace Silk Road.

Pardoning Zhao invites a key player back into the “casino economy”, said Kyla Scanlon in The New York Times. Trump campaigned on the idea of rebuilding US manufacturing; instead he has helped create an economy “built on speculation and risk”. The biggest winners are the creators of pointless crypto tokens and companies selling grand promises about the future of artificial intelligence.

Trump’s Republicans have attacked the institutions that help cushion risk, such as the Federal Reserve, and have cut back the social safety net to fund corporate tax cuts. Ordinary folk “bear the downside risk, while corporations and the wealthy collect the upside”. But that’s the casino economy for you: at the casino, “the house always wins”.

The Governor of the Bank of England, Andrew Bailey, has softened his sceptical views on the future of stablecoins in the UK, saying it would be wrong to dismiss the cryptocurrency “as a matter of principle”. Writing in the Financial Times, Bailey recognised their potential for “innovation in payments systems” but warned that the new technology “must still answer old central banking questions” to maintain public trust in money, which is “critical” to all economies.

What are stablecoins?

Stablecoin is a form of cryptocurrency, the digital currencies operated by private companies or individuals rather than central banks like the Bank of England (BoE) or the European Central Bank. Crypto, which is currently unregulated in the UK, has seen a major rise in recent years, based on risky “speculative trading”, according to the Financial Conduct Authority.

The most popular and well-known stablecoin is Tether (USDT), with other leading stablecoins including USD Coin (USDC-USD) and Stasis Euro (EURS-USD).

How is it different from other cryptocurrency?

Unlike cryptocurrencies like Bitcoin or Ethereum, which are completely detached from centralised financial institutions, stablecoins are “pegged” to tangible assets, like US dollars, the British pound, or gold prices.

They are designed to hold a steady value, only rarely dipping above or below a designated ratio. For example, a stablecoin with perfect efficiency to the US dollar, would consistently value one “coin” as one dollar. Some stablecoins have a reserve controlled by an algorithm to generate more coins or remove coins according to supply and demand.

Why is the UK government interested in it?

The market for this category of cryptocurrency is already valued at $200 billion (£148 billion) globally. With London responsible for 40% of foreign exchange turnover, the prospect of formal UK participation in stablecoins is an attractive one, according to a report by Innovate Finance.

The attraction of stablecoin is considerable. It bypasses traditional currency conversions, and facilitates “more predictable” and “lower-cost” payments internationally, said Yahoo Finance.

The government is intent on driving forward “developments in blockchain technology”, including stablecoins, Chancellor Rachel Reeves said in her Mansion House speech in July.

The BoE aims to publish a consultation paper, setting out a blueprint for the “UK’s systemic stablecoin regime”, to ensure the UK will “reap the benefits” of the new currency, said Bailey in the FT. The BoE had previously proposed that stablecoin holdings would be capped at as little as £20,000, with no interest offered to customers.

The European Union, Hong Kong, Japan (since 2023) and the United States have all implemented rules to make trading more transparent, a step which has been broadly welcomed by the crypto community.

What are the concerns?

Stablecoins can still be risky, even when pegged to tangible assets. If a stablecoin strays too far from its target value and this cannot be corrected, it can be “depegged”.

On a larger scale, if stablecoins were left unregulated, central banks could be caught on a tightrope. If a stablecoin crashes, the fallout could trigger “fire sales” – rapid sales at significantly low prices due to financial distress – to establish an equilibrium, said Bloomberg.

Conversely, if stablecoins “prove their worth”, allowing users to exchange and store vast sums of money, the “monetary monopoly” of the banks would be undermined.

And as with other cryptocurrencies, an unregulated system can be exploited for illegal activity. Trading is “anonymous, fast and cheap”, making stablecoins highly attractive for criminals to use to conduct scams or launder funds.

Quantum computing, the prospect of advanced computations beyond the binary limitations of ones or zeros, may be the harbinger of advancements to come. But cryptocurrency adherents are starting to wonder if their digital monetary system is ready for what this new age of data processing might bring.

Preparing for a 'potential catastrophe'

The "technological leap" of quantum computing could "pose new risks" to cryptocurrency users and potentially "undermine the cryptographic backbone of blockchain," said quantum computer developer Yuval Boger at Forbes. Although the "immediate risks are low," the future could see "large-scale, error-corrected quantum computers" capable of running algorithms that could break the elliptic curve cryptography (ECC) used by bitcoin as one of the industry's main security protocols.

While current quantum computers "aren't yet powerful enough," the "risk is real in the long term," said Isaac Kim, a computer science professor at UC Davis, in a recent interview with the crypto research firm Presto Labs. Despite "slight differences" between the levels of risk for each different type of cryptocurrency, "any blockchain that uses ECC, like bitcoin and ethereum, are vulnerable."

"Crypto is underprepared," researcher Rick Maeda said in an interview with CoinDesk on Monday. "The biggest risk is just waiting too long."

Although some members of the crypto community are willing to "shrug off" the looming threat posed by quantum computing, "behind closed doors," a number of leading figures in the field are "concerned about a potential catastrophe," said Decrypt. Experts now believe the industry has "less than a decade, even a handful of years" to enact "contingency plans." And even that might be optimistic: A new paper published last month by Google Quantum AI researcher Craig Gidney suggests that the RSA encryption used by bitcoin could be overcome using "20 times fewer quantum resources than previously estimated," Benzinga said.

'Post-quantum' protections

Given how serious the threat to cryptocurrency from quantum computing is, a "proactive approach" is "critical" to preempt disruption to an industry worth hundreds of billions of dollars annually, researchers from the University of Kent's School of Computing said in a late 2024 study detailing what such an approach might look like. The only way to prevent wide-scale quantum disruptions for an asset like bitcoin, the authors said, is "to upgrade — replace — the currently used public-key cryptosystems" to ones that have "no known vulnerabilities to quantum attacks." This is known as "post-quantum cryptosystems."

That type of complete "protocol update" would "take the cryptocurrency offline for 76 days," Fortune said. More "realistically," bitcoin could dedicate just a quarter of its server space to the upgrade — allowing users to "continue to mine and trade at a slower rate" — in which case the downtime would last an estimated ten months.

Broadly, that downtime risk speaks to what Maeda said is a "key barrier" to addressing the looming challenge. "It's difficult to create a way to monetize this," Maeda said to CoinDesk. But those preparations need to happen sooner rather than later, he added. "We can't wait until the threat is real to start taking it seriously. By then, it's already too late."

The relentless "mechanical howl" of a cryptocurrency mining facility has become "the soundtrack to life for hundreds of residents" in Granbury, a small rural town in Texas, said The Guardian.

"It echoes across agricultural land and forests, chasing away deer. It seeps into walls, vibrating bedrooms and dinner tables." One resident said it was as though a "jet engine is forever stationed nearby".

Bitcoin mining has exploded in the US over the past decade, particularly in the wake of Donald Trump's re-election to the White House and his embrace of cryptocurrency. But it's an energy-intensive process: the powerful computers that create and protect the cryptocurrency need fans on the go constantly to cool them down. And across rural, mostly Republican towns, residents are getting sick of the noise – and getting sick, full stop.

The 'mental and physical' toll

Much of America's Bitcoin mining industry is in Texas, said Time, "home to giant power plants, lax regulation, and crypto-friendly politicians". In Granbury, where Marathon – one of the world's largest Bitcoin holders – has a mine, a group of people are being "worn thin from strange, debilitating illnesses". Some were experiencing fainting spells, chest pains, migraines and panic attacks; others were "wracked by debilitating vertigo and nausea. The mine is causing "mental and physical" health issues, said one ears, nose, and throat specialist based in Granbury. "Imagine if I had vuvuzela in your ear all the time."

Their "singular grievance": the "dull aural hum" of the nearby Bitcoin mining facility. According to local law enforcement, it was "exceeding legal noise ordinances on a daily basis" when it first opened in 2024, said Time. Similar medical complaints were registered near facilities in Arkansas and North Dakota. However, a separate third-party study commissioned by the county in November 2024 showed that sound levels stayed below legal limits.

While there are not yet any major medical studies on the impact of living near large Bitcoin mines and data centres, scientists are increasingly linking "prolonged exposure to noise pollution with cardiovascular damage".

The political battleground

Bitcoin mining "boomed in the US" partly due to China's "crackdown" in 2021 over environmental concerns, said the BBC. Now at least 137 Bitcoin mines exist across 21 US states, and there are reports of "many more planned", attracted by "record-high cryptocurrency prices and cheap and abundant energy" to power the computers.

Trump said he wants to turn the US into the world's leading crypto-miner, but this has "implications for rural communities". In some places, his crypto-friendly policies are "meeting resistance" from the very voters who "drove his return to the White House".

This conflict between Republican allegiance and Bitcoin resistance is "being played out nationwide", which could spell trouble for Trump's pro-crypto agenda. Officials in Republican-voting areas are "likely to find themselves coming under continued pressure" from local residents who oppose Bitcoin mining expansion. "If this happens, could Trump's crypto dreams be derailed in his own backyard?".

The first legal battles around the health impacts of Bitcoin mining are "bringing home the realities of an industry" that at first glance seemed "removed from the real world".

With cryptocurrency investments continuing to peak, many wealthy investors in the crypto space are being subjected to a series of violent encounters with thieves, which have come to be known as wrench attacks. These attacks are increasingly commonplace as the public is starting to feel more angst toward the crypto industry, experts say.

Such attacks can involve kidnapping, torture and coercion, all done with the intent of trying to obtain the information of wealthy crypto moguls. Many individuals are living in fear as a result.

What is a wrench attack?

This is a colloquialism referring to "violent physical attacks on cryptocurrency investors," said NPR, with the goal of obtaining the investor's cryptocurrency or bitcoin password. The phrase was coined by an online meme that "mocked how easily high-tech security can be undone by hitting someone with a wrench until they give up passwords," said The Associated Press.

Experts are noting that sophisticated cybersecurity measures may not be useful under the threat of physical violence. Investors "are very proud of the digital locks they put around their crypto to guard it," crypto reporter Jeff John Roberts said to NPR. But "even if you have really, really good digital security, if you're being beaten with a wrench, you're probably going to tell the password, and the security won't do you any good anymore."

One high-profile attack happened in France in January, when abductors kidnapped crypto executive David Ballard and "cut one of his fingers off and bound his girlfriend and put him in a car," said Roberts. Another case involved a man who was reportedly "kidnapped and tortured for nearly three weeks in a townhouse in New York City in an effort to separate him from his fortune."

Why are wrench attacks happening?

The attacks mark a notable shift in strategy for crypto thieves; stealing crypto is "almost as old as cryptocurrency itself, but it's usually done by hacking. North Korean state hackers alone are believed to have stolen billions of dollars' worth of crypto in recent years," said the AP. In-person attacks represent a ramping up of violence against these investors.

Crypto has "surged in value, with bitcoin up 54% in the last year, minting a whole new array of potential deep-pocketed targets," said The Wall Street Journal. That is giving thieves new motivations to physically target people; beyond this, a "vast amount of personal data has been stolen and dumped in the past decade," allowing thieves to find out significant personal information about their victims. Cybercriminals "have become adept at figuring out their victims' home address by cross-referencing databases and even using paid sources of information." This type of data is "often made public in order to threaten and de-anonymize their victims, a form of online attack known as doxxing."

As crypto becomes more ubiquitous in the financial market, the statistics on wrench attacks keep rising. There were "eight reported physical attacks against people owning Bitcoin and other cryptocurrency" in 2023, according to Fortune, while there were 24 in 2024. The issue has become so widespread that a startup, AnchorWatch, which helps crypto owners insure their digital assets, has now gotten involved; the company "succeeded in persuading insurance giant Lloyd's of London to include wrench attacks in the policy that AnchorWatch offers to its customers."

Crypto "should be insurable. Since you can transfer it on chain, it's easy to see, and you have a better chance to recover it," Becca Rubenfeld, the cofounder of AnchorWatch, said to Fortune. The nature of these attacks "can make it seem amateurish, but it doesn't mean it's less dangerous."

What happened

Coinbase, the largest U.S.-based cryptocurrency exchange, said Thursday that cybercriminals had hacked the company, stealing sensitive user data for a scheme to rob customers of crypto assets and extort the company.

The Securities and Exchange Commission is also investigating Coinbase for allegedly overstating its active users in securities filings, The New York Times reported Thursday.

Who said what

Coinbase said in an SEC filing that an undisclosed number of user names, addresses and government ID images were stolen by someone paying multiple now-fired "contractors or employees working in support roles outside the United States." It estimated it would have to spend $180 million to $400 million to fix the situation and reimburse customers.

The stolen data allowed the hacker to "conduct social engineering attacks" on users to "try to trick them into sending their funds," CEO Brian Armstrong said. Coinbase said the hackers had demanded $20 million in bitcoin to not release the user data, but the company instead would offer that same amount for information about the criminals. "We will prosecute you and bring you to justice," Armstrong said. "You have my answer."

What next?

The ongoing SEC investigation is a rare crypto-linked case that "began during the Biden administration and has continued" under President Donald Trump, the Times said. Since Trump took office, "the SEC has dropped more than a dozen lawsuits and investigations targeting crypto firms," including a separate 2023 case against Coinbase, and "largely disbanded its specialized crypto unit."

President Donald Trump claims not to email or text and has been impressed that "everything is computer" inside a Tesla. But for all of his Luddite tendencies, there's one field of technology he has embraced since his return to the White House: cryptocurrency. Trump has positioned his administration as a champion of the digital currency industry, and his adoption of crypto is also widely believed to be an avenue for personal enrichment.

'Eviscerating' financial boundaries

The "winds are shifting" at the Securities and Exchange Commission under Trump as the agency moves toward a "more structured, innovation-friendly approach to digital assets," said Forbes. At the same time, the president's personal and familial involvement in the crypto field — including the launch and sale of his eponymous $TRUMP memecoin — has "intensified scrutiny" of the agency's "independence." In particular, Trump's recently unveiled World Liberty Financial, a firm "largely owned by a Trump family corporate entity," is "eviscerating the boundary between private enterprise and government policy," said The New York Times. As "not only a major crypto dealer," Trump is also the "industry's top policymaker" who has "leveraged" his position in office in "ways that have benefited the industry and in some cases his own company."

The impact of Trump's crypto participation extends beyond his personal wealth. In the past, there may have been Democratic lawmakers "sort of amenable to supporting" crypto-favorable legislation, said Duke University lecturing fellow on economics Lee Reiners to The Hill. However, they are now "getting a bit skittish" over Trump's "blatant" mixing of "financial interest with his political power."

A 'sea change' or a 'crypto winter'?

Trump's crypto focus and his efforts to roll back some of the restrictions imposed during his predecessor's administration have "unleashed a flurry of crypto deals" by companies "seeking to capitalize on lighter U.S. regulation," said The Wall Street Journal. There is "genuine interest" in the market for "taking advantage of this regulatory moment," said Ryne Miller, the co-chair of the crypto practice at law firm Lowenstein Sandler, to the Journal.

At the same time, the Trump administration's crypto focus means that assets with "high price volatility" could pose risks "not only for investors but also potentially for financial stability" as a whole, said the Bank of Italy in a report published Tuesday. The risk is particularly acute given the "growing interconnections between the digital asset ecosystem, the traditional financial sector and the real economy," the Bank's report said.

The report is "one of the first to have been published since Trump's imposition of global tariffs unleashed market turmoil," said Bloomberg. The "extreme negative sentiment" surrounding Trump's existing tariffs and future escalations is one of the "converging signals" suggesting an upcoming "new 'crypto winter,'" said industry leader Coinbase in its April monthly outlook.

In Washington, however, Trump continues to push the loosening of crypto regulations and his own crypto investments, signaling a "total sea change" from just months ago, said crypto investment firm Castle Island Ventures founding partner Nic Carter to The Hill. Doomsaying predictions of global crypto collapse are just the work of "short-term folks in the industry that can't see the forest for the trees."

In 2021, El Salvador caught the world's attention by becoming the first country to make cryptocurrency legal tender, alongside the US dollar.

Last December, as the price of bitcoin broke $100,000 (£77,765) for the first time, the young president Nayib Bukele posted on social media that the Central American nation's crypto holdings had more than doubled in value. But now – as the price for securing a $1.4 billion (£1.1 billion) loan deal from the International Monetary Fund – the country has had to roll back its controversial bitcoin policies.

Salvadoran businesses are now free to decide whether or not to accept bitcoin, and taxes are no longer payable in the cryptocurrency. "The potential risks of the bitcoin project will be diminished significantly, in line with Fund policies," the IMF said. Effectively, bitcoin's days as legal tender in El Salvador are over.

'Cryptocurrency paradise'

Bukele's embrace of bitcoin was part of an attempt to "rebrand the tiny and impoverished" nation as a "surfing and cryptocurrency paradise", said the Financial Times. He announced plans to build a "Bitcoin City" in the jungle, "powered by geothermal energy on the slopes of a volcano".

The president claimed cryptocurrency would bring the "70% of Salvadorans who do not use traditional banks into the financial system", said France24. "Swatting away warnings about volatility risks", he ploughed an "undisclosed amount of public money into cryptocurrencies".

But the IMF always opposed Bukele's adoption of bitcoin, said the BBC, and warned that it would be an obstacle to any financial assistance. For a long time, the Salvadoran economy has "teetered on the edge of default", as the IMF stayed "wary" of lending to the country while the volatile currency – with its "potential use in money-laundering and other crimes" – was legal tender, said The Economist.

'More costs than benefits'

El Salvador is still "a focal point for the global bitcoin community", said Forbes. But the mood is now "somewhat subdued" among crypto enthusiasts, one local journalist told the news site.

"A lot of international bitcoiners moved to El Salvador for the Bitcoin Law; some Salvadorans returned," said Joe Nakamoto. "Now, doubt about the country's future with regards to bitcoin has crept in."

But bitcoin's "demotion may be more of a blessing than a concession", said The Economist. Crypto has brought El Salvador "more costs than benefits". The much-promised investment and tourism "have been small beer", while financial gains have been "meagre at best", because the currency "never really caught on". According to a poll published in January by Universidad Centroamericana, 92% of Salvadorans didn't use it at all last year.

Overall, the policy has cost $375 million (£291 million), according to estimates by rating agency Moody's – a sum that "far exceeds the profits on bitcoin holdings, which could still evaporate". There is still no Bitcoin City.

Bukele's "obsession with cryptocurrency has done little to ease El Salvador's economic woes", said the magazine. He is "just the latest crypto-utopian to see his wild ideas dissolve on contact with reality".

Donald Trump's plans to establish a government stockpile of cryptocurrencies took a notable step forward this past weekend, as the president unveiled the five assets he plans to include in his federal crypto reserve. The U.S. will be the "Crypto Capital of the World," Trump said in a Truth Social post touting relatively low-profile assets like XRP, solana and cardano as the first currencies to join better-known brands bitcoin and ether in a stockpile designed to "elevate this critical industry after years of corrupt attacks by the Biden Administration." Perhaps unsurprisingly, the value of the currencies named has skyrocketed in the wake of Trump's announcement.

At the same time, Trump's crypto-forward plans for the American economy have begun alarming financial experts who warn that crypto's extreme market volatility and susceptibility to manipulation could spell trouble for the country. As Trump continues pushing for a national cryptocurrency stockpile, why are economists raising their red flags, and what — if anything — can they do about it?

What did the commentators say?

Trump's crypto plan has produced a backlash from "conservatives and even ardent crypto backers" who cited concerns over "giveaways to an already wealthy community" and "delegitimizing the digital currency industry," The New York Times said. Some Republicans criticized the plan to use tax dollars to purchase crypto's "risky assets" rather than simply using the money for "paying down the national debt." Other critics pointed out that both Trump and his crypto czar, David Sacks, stand to personally benefit from the boost to the crypto industry.

Trump's announcement was met with an "unusual amount of skepticism among crypto and tech bigwigs," Forbes said, as insiders questioned the decision to "include assets other than 'digital gold' bitcoin in the fund." Those lesser assets differ from bitcoin by being "more akin to tech investments," James Butterfill, the head of research at asset manager CoinShares, said to Reuters. As currently understood, Butterfill said, Trump's plan "suggests a more patriotic stance toward the broader crypto technology space," rather than utilizing the "fundamental qualities" of each individual asset. With bitcoin as the "most battle tested and decentralized" of the cryptocurrencies, CNBC said, some observers worry that Trump's inclusion of non-bitcoin crypto "invites the government to pick winners and losers in the crypto market."

"People should be calling this what it is, which is a crypto bailout," said journalist Adam Serwer on Bluesky. Referencing members of the Trump family who have launched their own crypto businesses in recent months, he added: "They're cutting cancer research so they can bailout rich, degenerate gamblers."

"Borrowing more to 'invest' in bitcoin is about the worst idea I've heard," said Hoover Institute economist John Cochrane in a panel survey organized by the University of Chicago Booth's Kent A. Clark Center for Global Markets. "It will end up in Trump coin or similar." Andrew Lo, an economist at MIT Sloan, was similarly blunt in his survey response: "This can't possibly be a serious question." Of the more than three dozen economists surveyed by the Clark Center, none endorsed the proposal.

What next?

Crypto analysts from Bernstein Wealth Management — "arguably the most mainstream group covering digital asset industry," said Forbes — have cited "material unresolved questions" with Trump's proposal, including how the funds will be distributed across the various named assets, how the government will fund the project and whether such a reserve can be "created merely by [the] president's executive order," Business Insider said. Trump's proposal "lacks details on size, timing and whether it will be managed by the Federal Reserve or another new or existing entity," said Andrew O'Neill, the digital assets managing director for S&P Global Ratings, to Forbes.

Analysts now look ahead to this coming Friday's "first-of-its-kind" White House cryptocurrency summit, which will include "founders, CEOs and investors from the industry," The Hill said.

North Korea appears to have pulled off the world's biggest heist, another worrying sign of the hermit kingdom's growing prowess in cybercrime.

State-backed hackers stole about $1.5 billion from cryptocurrency exchange Bybit last week, according to the FBI. That's more than the largest known bank theft of all time, when Saddam Hussein stole $1 billion from Iraq's central bank on the eve of the 2003 war.

Pyongyang agents took more in the attack on the popular platform than all the funds stolen by North Korean cybercriminals last year, according to cryptoanalysts Chainalysis: more than $1.3 billion. Leader Kim Jong Un is increasingly relying on "elite units" of hackers to prop up the regime's "failing economy", said The Telegraph.

The 'magnum opus'

Just after 2pm on Friday 21 February, a "notorious group of hackers" pulled off what could be "their magnum opus", said The Independent. In just minutes, they stole from one of the world's most popular crypto exchanges and "funnelled" the digital currency "across the internet to anonymous wallets".

Investigators were able to follow the funds in real time using the blockchain – the online ledger of every crypto transaction. They noted a pattern of laundering "closely mirroring a technique" used by The Lazarus Group: one of the world's "most sophisticated hacking operations".

The group, allegedly "backed by North Korea since its inception in 2009", caused "worldwide chaos" in 2017 with the WannaCry ransomware attacks, which infected 200,000 computers across 150 countries – including NHS systems. But this latest theft would be the group's "largest strike to date" – the haul is equivalent to North Korea's entire annual defence budget.

Bybit CEO Ben Zhou has called for a "war against Lazarus", issuing a $140 million bounty to recover the funds. The move, a first for the industry, could mark the beginning of "coordinated global action" to "take down Lazarus".

A 'haven' for hackers

In the past, Pyongyang "relied on its elite hacking cadres to conduct espionage or steal trade secrets", said The Telegraph. Science prodigies are identified at a young age, and "pushed to compete in international maths and programming competitions".

But increasingly, these hackers are being used as "a weapon of economic warfare": a way to "bolster the coffers" of a regime battered by sanctions and the Covid-19 pandemic. And the "virtually unregulated" cryptocurrency industry is a "haven" for hackers.

Attacks by North Korean groups have "plagued the industry for years", said The New York Times.

Last year, hackers linked to the country stole more than $1.3 billion in cryptocurrency: a "dramatic jump" from the $660 stolen in 2023, reported The Guardian, and about 61% of the $2.2 billion stolen globally. The proceeds of The Lazarus Group's "audacious thefts" are believed to have funded the regime's nuclear and missile programmes.

"Hackers linked to North Korea have become notorious for their sophisticated and relentless tradecraft, often employing advanced malware, social engineering, and cryptocurrency theft to fund state-sponsored operations and circumvent international sanctions," Chainalysis said in its report.

These attackers are getting "better and faster at massive exploits".

The president of Argentina is facing legal action and calls for his impeachment after he promoted cryptocurrency on social media.

Javier Milei's controversial post "caused a political firestorm", said The New York Times, with opponents describing him as a "crypto scammer".

'Rug pull'

On Friday, Milei, a former private sector economist, posted on X about the $LIBRA coin which he promised would help fund small businesses and start-ups.

He shared a link to buy it, causing its price to "shoot up", said the BBC, but within a few hours, he deleted the post and the cryptocurrency "nosedived" in value, meaning investors lost most of their money.

He's been accused of a "rug pull" – where promoters of a cryptocurrency deliberately "draw in buyers", only to stop trading activity and "make off with the money raised from sales", said the broadcaster. But Argentina's presidential office insisted that the decision to remove the post was to avoid "speculation" following public reaction to the post.

"Few Argentines" were financially affected by the currency's crash, said the Financial Times, because analysis of X posts suggested most $LIBRA buyers were in the US and Asia, but the episode has still caused a headache for him at home.

'Slap in the face'

In a television interview, Milei said the scandal was a "slap in the face", and he described himself as a "techno-optimist" who was just trying to "help fund Argentine projects". Lashing out at political opponents who had criticised him, he said that "every day they confirm how lowly politicians are".

The "most interesting lesson" of the scandal, said Milei, is that "I need to put up more filters", adding that "it can't be so easy for people to reach me". So the president who is "reported to spend hours a day on X" might be "forced to become a little quieter", said The Spectator.

His opponents "appear unlikely" to secure the two-thirds majority needed in congress to impeach him, because centrist blocs said they won't support the proposal, but analysts said investigations into the president could "nonetheless weigh on his approval ratings", said the FT.

In the "medium to long term" this episode will "stain the president's credibility", Marcelo García, from the consultancy Horizon Engage, told the newspaper, particularly because he "brags about his abilities as an economist".

It is perhaps no surprise that the most well-off Americans have benefited tremendously from the AI-driven stock market expansion over the last year, continuing the trend of the planet's wealthiest individuals capturing a greater share of riches. But the degree to which President Donald Trump has personally enriched himself during his second term in office is shocking. By aggressively wielding the regulatory and national security powers of the U.S. government and leveraging his family's name and business reputation, Trump and his family have added billions to their bottom line since January 2025, often through quid pro quo arrangements conducted in broad daylight.

Many of Trump's most lucrative deals have involved the AI and crypto industries, both of which he substantially deregulated since taking office, despite concerns about conflicts of interest and the creation of speculative bubbles that could harm ordinary investors. The president remains completely unapologetic about using his office in this fashion and boosting his family's overseas business dealings with American policy and power. "I found out that nobody cared, and I'm allowed to," said President Trump in a January 8, 2026 interview with The New York Times. "I prohibited them from doing business in my first term, and I got absolutely no credit for it." This self-dealing, reminiscent of how developing world dictators like Nigeria's Sani Abacha use their positions in government, has yet to generate a substantial public backlash — especially given the current focus on the administration's other controversies, like mass deportations and the cost of living crisis.

In May 2025, the Trump administration lifted a national security restriction on the sale of advanced AI chips to the UAE, months after the UAE and Qatar invested more than $1.5 billion in an investment fund operated by Trump's son-in-law Jared Kushner. These deals "blurred the lines between personal and government business and raised questions about whether U.S. interests were served," said The New York Times. In January 2026, Saudi developer Dar Al Arkan announced that it would "launch two Trump-branded luxury projects in Riyadh and Jeddah with a combined value of $10 billion," said Reuters. The announcement followed Saudi ruler Crown Prince Mohammed bin Salman's November 2025 visit to the White House, during which President Trump announced the U.S. would sell advanced F-35 fighters to the Kingdom, as well as promising to lift restrictions on AI chip sales. Another representative example was Trump's October 2025 pardon of former Binance CEO Changpeng Zhao, who was convicted of money laundering in 2023. Binance was the recipient of a $2 billion investment by Emirati investment firm MGX, which was conveniently conducted in the brand-new USD1 stablecoin, operated by World Liberty Financial, in which the Trump family has a controlling interest. It was the largest crypto transaction in history. In December 2025, "Binance began paying users of its platform to hold USD1: Binance announced that, for the next month, it would give users a bonus equal to about 1.7% on up to fifty thousand dollars’ worth of USD1 holdings," said The New Yorker. The total volume of USD1 in circulation has subsequently more than doubled, to "roughly five billion, and most of that expansion appears to have taken place on the Binance platform." World Liberty also began selling "digital governance tokens," which have no fixed value and "do not entitle a buyer to any equity in World Liberty; nor to any share of its profits, raising many questions about why an investor might want to own them — other than for World Liberty's connection to the Trumps," said The New Yorker.

Also in December 2025, the Trump Media & Technology Group, which owns the microblogging site Truth Social, announced that it had merged with a speculative nuclear fusion company, TAE Technologies. Nuclear fusion is a technology that, even in best case scenarios, is many years away from commercial viability. That day, Trump "saw the value of his stake jump by about $400 million to about $1.6 billion with the 35% rally in the stock by midday," said Politico. When that deal was signed, the president had "recently signed an executive order to launch" the Department of Energy's Genesis Mission, "which seeks to accelerate fusion development with help from AI, advanced computing and the department's sprawling national labs." Overall, The New Yorker estimated in February 2026 that Trump and his family have made $4.05 billion just since his second inauguration on ventures that fundamentally depend on his role as the U.S. president.

Trump's net worth, according to Forbes, had soared $7.3 billion as of February 18, 2026, after falling as low as $2.3 billion prior to his reelection in 2024. Despite this flurry of wealth-building activity, Trump still falls short of inclusion on Bloomberg's list of the 500 richest people in the world. And figuring out the trajectory of the president's wealth is a significant challenge made all the more difficult by his refusal to release his tax returns or share the kinds of financial disclosures that were once routine in American politics.

How did Trump originally amass his fortune?

In Trump's telling, he is a self-made man who built his fortune with a small loan from his father. But in "every era of Mr. Trump's life, his finances were deeply intertwined with, and dependent on, his father's wealth," said The New York Times; the outlet claims that his parents ultimately transferred nearly $1 billion to their children while paying almost nothing in taxes. "Fred Trump was relentless and creative in finding ways to channel this wealth to his children," and much of his maneuvering was "structured to sidestep gift and inheritance taxes using methods tax experts described to The Times as improper or possibly illegal."

Trump's father, Fred, was a real estate tycoon who operated mostly in and around New York City, and Donald Trump "served his own apprenticeship in the less glamorous family business of renting apartments," said the Los Angeles Times. One of his earliest duties was "booting poor, nonpaying tenants" out of a Cincinnati apartment complex purchased by his father. After graduating from the University of Pennsylvania's Wharton School of Business in 1968, Trump returned to New York City and took on a larger role in the family business. He "took control of the company — which he renamed the Trump Organization — in 1971," said BBC. His "first big move" was "to negotiate an unusual arrangement with the government of New York City," including a 40-year tax abatement, in order to purchase the Commodore Hotel in New York City, said the Miller Center. The hotel was relaunched in 1980 and rebranded as the Grand Hyatt Hotel.

As his portfolio expanded, "the one that made him" was Trump Tower, said Curbed. In 1979, he bought the department store Bonwit Teller for $10 million and demolished it to make way for the mixed-use high-rise that would eventually bear his name. When it opened on October 1, 1983, Trump Tower "offered an unprecedented mix of high-end retail space and luxury condominiums," said The Hollywood Reporter. "Celebrity was a big ingredient" in its success, added Curbed, and Trump sold residential units to Hollywood stars including Steven Spielberg and Fay Wray. With his real estate empire expanding, Trump also embarked on a media blitz that "helped the real estate developer transition from a figure of note in New York City to a national celebrity and household name," said The Atlantic. In 1987, he published a ghostwritten book, "The Art of the Deal," that was a "phenomenal success, spending forty-eight weeks on the Times best-seller list," said The New Yorker. By 1990, his holdings included not just Manhattan high-rises and other real estate developments but also casinos, golf courses and the Eastern Airlines shuttle service he had purchased in 1989 and renamed Trump Shuttle.

Overcoming bankruptcy with a little help from family and reality TV

The Trump Organization fell on hard times in the 1990s. Hit hard by the 1990-1991 recession, "the amount of cash that Mr. Trump had available to him had fallen below $1.7 million and was expected to fall below $800,000 within months" in 1991, said The New York Times. The basic problem was that "Trump's empire could not keep pace with the enormous debt payments he owed," said NPR. Trump was forced to sell his airline to USAir in 1991. Those struggles pushed him into the "transaction that would eventually free him from his financial travails": taking his "struggling casinos public, selling stock to raise money and shifting his personal debt into the new company" in 1995.

In 1997, Fred Trump transferred his real estate holdings to his four children, which they sold off in 2004. Donald Trump received $177.3 million. Yet he filed an "individual tax return reporting $89.9 million in net losses from his core businesses for the prior year" in 2004, said The New York Times. It was also in 2004 that Trump began hosting NBC's reality show "The Apprentice," in which a group of contestants competes to win a contract from the Trump Organization. The show, which Trump hosted from 2004 to 2015, helped him make "some $197 million" over 16 years. In addition, "$230 million flowed from the fame" associated with the show.

Not everything that Trump touched during this time period turned to gold, however. Between 2005 and 2010, Trump operated Trump University, which ultimately had to pay out a $25 million settlement to "more than 6,000 Trump U students who paid thousands of dollars for courses they describe as worthless," said NPR. In 2006, he launched a self-branded vodka business that "stopped production in 2011, reportedly due to a lack of interest," said Time. Trump also operated an unsuccessful steak business, a failed travel search engine and a short-lived mortgage company between 2006 and 2012.

Assuming the presidency and pursuing social media

When Trump launched his bid for president in 2015, Forbes estimated his net worth at $4.5 billion. During his first term, he largely refrained from new ventures, while his "assortment of businesses brought in some $2.4 billion in revenue and some $550 million in income from 2017 to 2020," said Forbes. After leaving office in 2021, he founded the Trump Media and Technology group, which included his new far-right social media website, Truth Social. But legal troubles, including an $83.3 million judgment in a civil trial stemming from sexual assault allegations against him by journalist E. Jean Carroll and a $454 million fraud liability in New York, took their toll. By early 2024, his "political prospects were shaky, his financial future nightmarish," said Forbes.

However, over the following year, Trump "more than doubled his estimated fortune, from $2.3 billion to $5.1 billion, in large part by taking Truth Social public, delaying payment on his judgments and plunging himself into a third quest for the presidency. It was a bid he would ultimately win, setting the stage for an even more aggressive and norm-shattering plan to capitalize financially on his position as the country's chief executive.

New tariff regime sends markets into turmoil

If anything, the first eleven months of President Trump's second term have rendered it even harder to make a confident appraisal of his net worth. The "opaque ownership structure of the Trump businesses makes it difficult to assess changes in his net worth," said The New Yorker, and it is "hard to isolate his presidential profits, in part because estimating how much his businesses might have made if he weren't president would require detailed comparisons with similar enterprises that have non-presidential owners." Another significant contributor to that uncertainty was his decision to implement sweeping tariffs on nearly every country in the world on April 2, 2025, which he pledged to do during his campaign and for weeks preceding the announcement. He dubbed it "Liberation Day" and argued that the new tariffs "will free the U.S. from a reliance on foreign goods," said The Associated Press.

But the most immediate reaction was widespread fear that the levies "could push the U.S. economy into recession if they aren't quickly pulled back," said CNN. As many analysts expected, that maneuver sent stocks tumbling immediately and introduced almost unprecedented uncertainty into financial markets.

Reeling from that financial turmoil, President Trump announced a "pause" on April 9, 2025, saying that while his administration worked out individual trade deals with dozens of countries, he would impose a "universal tariff rate for the next 90 days" that would be "10% for virtually all countries, with the exception of China," said CBS News. That stabilized markets until the expiration date of the original "pause" approached in July, when he announced significant new tariffs on 14 countries that lacked new trade agreements, including South Korea and Japan, triggering another round of market mayhem.

Markets not only recovered, however, but thrived, driven by an ongoing AI investment boom that has many analysts worried about a massive bubble. By mid-February 2026, the Dow Jones Industrial Average was up nearly 6,000 points since his second inauguration. Those gains added hundreds of millions of dollars to the president's net worth, together with ongoing and aggressive maneuvers to boost the value of his various holdings. When Trump Media merged with the nuclear fusion company TAE Technologies, it sent shares of the former soaring and added another $500 million to his net worth. While his wealth is currently parked in an irrevocable trust managed by his son Donald Trump, Jr., President Trump "remains the sole donor and beneficiary, and is still able to earn income from his businesses," said Forbes. And the most important of those businesses, in terms of the spectacular growth of his net worth, are his crypto ventures.

Trump's crypto schemes boost his fortune

On January 17, 2025, days before being sworn in for his second term as president, Trump launched his own cryptocurrency, a meme coin, "sparking a feverish buying that apparently sent its market capitalization soaring to several billion dollars," said CBS News. His wife, Melania Trump, also launched a currency the same day. The decision to launch Trump-branded cryptocurrency on the eve of his presidency created a "mind-boggling number of potential conflicts of interest" and "aligns with the interests of rich crypto bros who want to seize the reins of government to make themselves even richer," said Rolling Stone. In addition, "President Donald Trump’s family took control of the crypto venture" World Liberty Financial in January 2025 and "grabbed the lion’s share" of funds the enterprise had raised," said The Associated Press. "It's as if a new bank had opened under the sitting President's name, and it was being sent large quantities of funds by various foreign businesses and political elites," said The New Yorker.

Very quickly, crypto came to constitute a substantial portion of Trump's financial portfolio. "A majority of his fortune, an estimated $3.3 billion of his total $5.5 billion, lies in the buzzy" crypto industry, said Forbes in an updated net worth appraisal in June 2025. That may help explain his administration's crypto-friendly policies, including appointing a "pro-crypto businessperson, Paul Atkins, to lead the Securities and Exchange Commission," and the creation of a federal Bitcoin reserve and the Emirati investment deal conducted in Trump's stablecoin. The Trump administration's determination to make the U.S. the "crypto capital of the world" has unleashed a wave of companies seeking to offer new products in the crypto marketplace. Many of them "have some connection to the Trump family's growing lineup of crypto companies, which have blurred the line between commerce and government," said The New York Times. Taken together, these developments suggest that even one of the world's richest men can, in fact, be bought — it just costs a lot.

What happened

President Donald Trump Tuesday pardoned Ross Ulbricht, the founder of dark-web drug marketplace Silk Road, 10 years into his life sentence for conspiracy to traffic narcotics, money laundering and other crimes. Trump also defended his decision to pardon or free more than 1,500 participants in the Jan. 6, 2021, Capitol assault, claiming they had been "treated unbelievably poorly" and "served years in jail" they "should not have served."

Who said what

Trump said on social media he had pardoned Ulbricht "in honor" of the Silk Road founder's mother and "the Libertarian Movement, which supported me so strongly." He called the life sentence "ridiculous" and the New York federal prosecutors who secured a jury conviction "scum." Prosecutors said Silk Road facilitated more than 1.5 million sales of heroin, cocaine and other illicit substances, contributing to the deaths of at least six people. A federal judge in Manhattan called Ulbricht "the kingpin of a worldwide digital drug-trafficking enterprise" at his 2015 sentencing.

But Ulbricht is a "cult hero in the cryptocurrency and libertarian worlds," The New York Times said. "Crypto enthusiasts" appreciated that he created "one of the first venues where people used Bitcoin to buy and sell goods," and libertarians generally oppose drug laws. Trump had promised to commute Ulbricht's sentence at the Libertarian Party national convention last May.

Congressional Republicans "struggled to defend" Trump's Jan. 6 pardons, especially for the rioters convicted of assaulting police officers, CNN said. Some said they disagreed with the pardons for violent rioters, but "most Republicans wouldn't weigh in on whether Trump had made the right decision."

What next?

Counterterrorism experts said Trump's clemency, especially for the Proud Boys and Oath Keeper leaders serving long sentences for seditious conspiracy, "could further embolden fringe groups" and boost political violence by far-right militias, The Washington Post said.

What happened

Bitcoin topped $100,000 for the first time Wednesday, hours after President-elect Donald Trump said he would nominate cryptocurrency advocate Paul Atkins to chair the Securities and Exchange Commission.

Who said what

Wednesday's high-water mark — $103,713 for a single bitcoin — capped an "extraordinary rally since Election Day," when the world's largest cryptocurrency was trading at $69,374, The Wall Street Journal said. A "wave of campaign spending" by crypto firms helped send 298 pro-crypto lawmakers to Congress and Trump to the White House. Trump in turn promised to make the U.S. "the crypto capital of the planet" and create a "strategic reserve" of bitcoin.

The crypto industry wants legislative and regulatory changes that, "generally speaking, aim for an increased sense of legitimacy without too much red tape," The Associated Press said. Atkins, a former SEC commissioner who co-chairs the Chamber of Digital Commerce's Token Alliance, is expected to be much friendlier to the industry than outgoing SEC Chair Gary Gensler.

What next?

Bitcoin, worth about $5,000 in early 2020, "now stands as arguably the most successful investment product of the last 20 years," The New York Times said. It also "remains prone to extreme volatility," significantly "contributes to climate change" has "long been used by scammers and thieves." But "who can prohibit it?" Russian President Vladimir Putin asked Wednesday, according to Reuters. "No one."

What's at stake as Trudeau takes on Modi? How would assisted dying change Britain? And are we running out of water? Olly Mann and The Week delve behind the headlines and debate what really matters from the past seven days.

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What are "pig-butchering" scams, and do they spell more trouble for cryptocurrency? Could those tangled cables in your drawer be the answer to the looming copper shortage? And should employers take a chance on older workers? Olly Mann and The Week delve behind the headlines and debate what really matters from the past seven days.

A podcast for curious, open-minded people, The Week Unwrapped delivers fresh perspectives on politics, culture, technology and business.

It makes for a lively, enlightening discussion, ranging from the serious to the offbeat. Previous topics have included whether solar engineering could refreeze the Arctic, why funerals are going out of fashion, and what kind of art you can use to pay your tax bill.

You can subscribe to The Week Unwrapped wherever you get your podcasts:

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"We start new companies like Google; we start new communities like Facebook; we start new currencies like bitcoin and ethereum; can we start new countries?"

These were the words of Balaji Srinivasan in 2023, a "rockstar in the world of crypto" who was outlining a vision of "the not-too-distant future", said the BBC. The "serial tech entrepreneur" and Silicon Valley venture capitalist calls his idea – effectively start-up nations – the "network state":

Cyber statelets

There is "nothing new about corporations having undue influence in the affairs of nation states". Beginning in the 1930s, a US company, United Fruit, "effectively ruled Guatemala for decades".

But the network state movement "doesn't just want pliant existing governments so that companies can run their own affairs". It wants to "replace governments with companies". Here's how it works: "communities form – on the internet initially – around a set of shared interests or values. Then they acquire land, becoming physical 'countries' with their own laws."

The entities would "exist alongside existing nation states", eventually replacing them. This would allow people to choose their nationality, "like you choose your broadband provider", and "become a citizen of the franchised cyber statelet of your choice".

These new states "are not merely theoretical constructs", said Forbes. "They represent a practical reimagining of how communities can organise and govern themselves in the digital age." And in today's "chaotic world" of "geopolitical clashes" and an increasing digital economy, this "sounds more realistic than ever before".

The idea is being powered by a "cultish tech movement that ultimately seeks to end countries as we know them", said The New Republic, and "decentralise governance in the same way that crypto seeks to decentralise finance". The ambitious plan would see "typically cash-strapped countries cede land to tech bros who want to play a real-life version of SimCity".

Another major player is the Coinbase CEO, Brian Armstrong, who told the "Moment of Zen" podcast that we can "tokenise real estate and actual physical land to create better forms of society". It's "hard to imagine any other American CEO openly discussing plans to undermine the US government and start their own country", said the news site, but "even more unimaginably", politicians "across the spectrum are openly embracing Armstrong".

Crowdfunding territory

The players behind this movement are slowly gaining more influence. In his 2022 book "The Network State: How to Start a New Country", Srinivasan – commonly known as just Balaji – said a network state would be "a highly aligned online community with a capacity for collective action" that "crowdfunds territory around the world and eventually gains diplomatic recognition from pre-existing states".

Srinivasan argued that "these new business-friendly hubs would soon compete with nation-states and, one day, replace them", said The New York Times. He said "The Network State" was inspired by the state of Israel. "What I'm really calling for is something like tech Zionism – when a community forms online and then gathers in physical space to form a 'reverse diaspora'."

His company, Praxis, is looking to build a new city on the Mediterranean, "governed and built by the community", said Forbes. The project has "significant funding" and it has hired a team that includes a former G7 prime minister to support negotiations and city planning.

Last October, Balaji announced "the network school": a three-month retreat for those interested in what he calls "decentralised countries". Details were "shrouded in secrecy", said Wired – even the location wasn't publicly disclosed, although there are indications that it is Forest City, a "duty-free zone" in Malaysia.

A "crucial step" for decentralised countries is "having physical territory": the network school "clears that bar". Balaji said he is working to "build out the real estate" with the goal of "scaling the school".

He also outlined the "values" to which students must conform, including "seeing bitcoin as the successor to the US Federal Reserve, and trusting AI over human courts and judges". "It's for those who want Silicon Valley without San Francisco," said Balaji.

But the network state project "has its detractors", said Wired. Some argue that by acquiring low-cost land and relying on low-wage labour, using such network states to allegedly "hoard personal and corporate wealth", founders "exacerbate colonialism and inequality".

Donald Trump has long been an innovator in the field of branded marketing and merchandise, with product lines that well precede his current status as a once and potentially future president. Everything from beef to boardgames and even bottled water has all borne the vaunted Trump brand — and the implied promise therein of a similarly luxuriant lifestyle to his.

In spite of this lifetime of branded sales pitches, the past few weeks have nevertheless seen a marked uptick in high-end Trump-hawked items, even as the 2024 presidential campaign enters its final stretch. Since late September, Trump has cut promotions for silver coins ("The ONLY OFFICIAL coin designed by me"), luxury watches ("these Watches are truly special — You're going to love them") and a cryptocurrency exchange ("We're embracing the future with crypto and leaving the slow and outdated big banks behind") — all on the heels, as it were, of this year's earlier "Never Surrender High-Tops" sneaker launch.

That Trump would lend his name and brand to a suite of merchandise is not, in and of itself, particularly shocking. But with time quickly running out until Election Day next month, the Republican nominee's focus on unrelated commercial products seems a notable, if somewhat confounding, distraction from his campaign for the White House. At the same time, by hawking self-branded products during a presidential race, Trump has once again muddied the legal and ethical waters when it comes to fundraising and electioneering.

What did the commentators say?

Many of the recent Trump-branded products are sold on websites that note "proceeds from their sales do not directly benefit Trump or his campaign," NY1 said. However, the products are "subject to a 'paid license agreement,'" which is the "same mechanism that allowed Trump, well before he entered politics, to profit for years from sales of everything from water, vodka and steaks." While it's "unclear where the watches are being manufactured or the maker," the TheBestWatchesOnEarth LLC company licensed to use Trump's name on the product line "lists its address as a suite located in a building in Sheridan, Wyoming, the same address as the company selling Trump's $499 sneakers," CBS News said. "The suite is near a Wendy's fast-food location and Sherwin-Williams paint store."

Trump is hardly the first president to earn a post-presidential living, however, no other "modern one-term president has seriously sought to reclaim his old job," Business Insider said. According to his recent financial disclosure forms, Trump's various product sales "amount to big business" from which he's made "more than $12 million alone just by selling NFTs and books."

"There's no precedent in history at all, and certainly not in modern history, for somebody who has monetized the office or running for office of president the way he has," former Office of Government Ethics general counsel Don Fox said to The Washington Post. His campaign "feels like it only exists to support his true passion: bringing back the late-night TV infomercial," said New York magazine. In regards to Trump's newly launched cryptocurrency exchange, "taking a pro-crypto stance is not necessarily troubling," said Citizens for Responsibility and Ethics in Washington spokesperson Jordan Libowitz to the Associated Press. "The troubling aspect is doing it while starting a way to personally benefit from it" — particularly if he wins in November. After initially panning cryptocurrency, Trump is now leading his campaign's "effort to build what it calls a 'crypto army' leading up to Election Day," the AP said.

Trump's branded sales are part of an "extraordinary effort to mix his personal finances with his bid to return to political power," The New York Times said. In particular, he does much of his campaigning on Truth Social, a "social platform owned by the Trump Media & Technology Group" where "since he announced his new election effort" he has hawked a host of products "all branded with his name, image or campaign themes."

What next?

With Kamala Harris showing signs of taking the lead in recent polls, the Trump camp "appears to be scrambling to make hay while the sun still shines," Vanity Fair said. While Trump largely is "interested in licensing deals and one-off deals where he does not have to make large time commitments," his focus on personal branding and sales "also further a narrative that Democrats say resonates with voters: that the former president only cares about himself," The Washington Post said. Win or lose, it's unlikely that dynamic is set to change anytime soon.

The FBI has warned about a potentially devastating cryptocurrency scam called "pig butchering".

The con, which CBS News said could "wipe out someone's life savings", has been growing in scale over the last five years and, as China has cracked down on the operation, it has spread around the globe.

'Fattening up'

The operation is given its eye-catching name because it involves "fattening up" victims before taking everything they have. The operators assume false online identities and spend months "financially grooming" their victims to win their trust and get them to invest on "fraudulent cryptocurrency websites", said CNN.

The process involves "building seemingly intimate relationships with victims", explained Wired, and the "attacks often start by texting potential targets out of the blue and getting them talking".

The attackers "begin to build a rapport and introduce the idea of a special or unique investment opportunity" and victims send funds – typically cryptocurrency – through a "malicious platform meant to look like a legitimate money management service", before the money is laundered from there.

Deepening the criminality involved, a CNN investigation last year found that many of the scammers are themselves victims of human trafficking.

The FBI estimates that pig butchering scams stole nearly $4bn in total from tens of thousands of American victims last year, a 53% increase from the year before. It's "theft at a scale so large", said CNN, that investigators are calling it a "mass transfer of wealth from middle-class Americans to criminal gangs".

Nigeria to the Isle of Man

Beijing has "made a concerted effort" in recent months to "crack down on pig butchering schemes", said Wired, but the activity is now "proliferating around the world".

Since 2021, Dubai has emerged as "the largest epicentre of pig butchering outside Southeast Asia" and it's also prominent in "multiple African countries" because of "an existing culture of organised scamming".

In Nigeria, for instance, "readily available" prefab cryptocurrency investment platforms, templates and scripts are "available for sale online to anyone who wants to get started". The fraud has reached eastern Europe with at least two centres  uncovered by law enforcement in Georgia, and scam compounds "have also been broken up" in Peru and Sri Lanka.

Closer to home, a "seaside hotel and former bank offices on the Isle of Man" have been used by scammers conning victims in China out of millions of dollars, a BBC World Service investigation found earlier this year.

Serious money

Mina Chiang, the founder and director of Humanity Research Consultancy, told Wired that fraud is "not being seen as a serious crime – not like drugs, not like terrorism" and "we need to start shifting that idea, because it creates the same kind of damage", and "maybe even more because the amount of money we're talking about is so huge".

As criminals "learn that they can make serious money" pig butchering, they’re going to make those pivots", Ronnie Tokazowski, a researcher on the issue told the outlet, so pig butchering "is cropping up in more and more countries" and "even with all the interventions" from the authorities, there is "little to no sign of this stopping".

An important new question for presidential candidates: Where do you stand on cryptocurrencies? Donald Trump has already made friendly gestures to the crypto sector. Now Kamala Harris appears to be joining in.

In an "overture to young men," Axios said, Harris has signaled her "friendliness to cryptocurrency." The signal came at a recent Wall Street fundraiser. "We will encourage innovative technologies like AI and digital assets, while protecting investors and consumers," she told attendees. Why now? Election-year outreach. Younger men are "more likely than any other voter group to own cryptocurrencies," said Axios, and they're also trending toward Donald Trump and the GOP at a rate that is "alarming" to Democrats.

"Welcome to the crypto election," Claire Williams said at American Banker. The industry has become one of the "most visible and vocal" business sectors trying to influence the 2024 presidential and congressional elections — with a campaign "war chest" that already exceeds the banking industry's contributions. That's an "enormous" amount of power for a "fledgling industry," said Williams. The aim? To see more "industry-friendly regulators and legislation come 2025."

Looking for a 'breakout year'

Cryptocurrency was "once on the fringe of finance" but now stands ready for a "breakout year" after the November election, Laurent Belsie said at The Christian Science Monitor. But the industry has also attracted the attention of regulators — including Democrats and Republicans in Congress — who see both "potential and pitfalls" in digital currencies. Trump has indicated his own warmth to crypto, backing his sons' World Liberty Financial project and speaking at the Bitcoin conference. But some in the industry have kept an eye on Harris."You don't win statewide elections on several occasions in California without being tech-forward," said a speaker at last month's Crypto4Harris fundraiser.

The election could "define the future of crypto," said the BBC. The Biden administration has led a "sweeping crackdown" on crypto firms — prosecuting FTX founder Sam Bankman-Fried for fraud and Binance co-founder Changpeng Zhao for allowing criminals to launder money on his platform. Those prosecutions might be why the number of Americans using cryptocurrencies dropped to 7% last year. A tight presidential race, though, could give the industry some leverage with both candidates. "Every vote is going to count," said one executive, and "crypto votes are no exception."

A 'dialogue' between campaign, crypto industry

Money may be a bigger factor than votes. The industry has already spent $119 million on this year's elections, "magnitudes more" than in previous cycles, Whizy Kim said at Vox. Crypto can muster that financial power even though the product itself has "struggled to gain any real traction with the public." Digital currencies have been around since 2009, but crypto "still hasn't penetrated" as a mainstream payment method. Instead, it is mostly used as a "vehicle for speculative investment." That might be why companies "redoubled their efforts to help elect pro-crypto politicians."

Harris' fundraiser comments were "deliberately broad," Jesse Hamilton said at CoinDesk. But she is unlikely to offer a "deep dive" into potential crypto policies before the November election. Her campaign has kept "dialogue running with a narrow group of industry executives and insiders." That's "progress" one executive told Hamilton. "All we want are sensible rules," said Coinbase's Paul Grewal, "and we'll follow them."

"If bitcoin is going to the Moon, I want America to be the nation that leads the way."

Channelling his inner JFK, Donald Trump marked his full conversion to the cult of cryptocurrency by vowing to turn the US into a "bitcoin superpower" if he is returned to the White House in November.

Using what The New York Times called the same "rhetoric of persecution" that he has applied to himself and his supporters to appeal to cryptocurrency enthusiasts who want to see less regulation, the Republican presidential nominee told a sell-out conference in Nashville that he would end Joe Biden and Kamala Harris's "anti-crypto crusade".

The speech capped a "complete about-face" by the former president towards "an asset class he considered a crime-riddled scam while he was in office", said Bloomberg. It also marked what is "more and more looking like the merger of a once-outsider political machine with an outsider financial movement that is also punching its way into the mainstream".

Why has he changed his view?

"Conventional wisdom has it that this gambit is simply a classic Trumpian transactional relationship," said Bloomberg.

With November's presidential election likely to go down to the wire, both sides are looking to pick up money and votes wherever they can. But with the Democrats still sceptical of the famously unregulated crypto market, Trump and his team have sensed a wedge issue they can exploit. 

His dramatic U-turn from bitcoin sceptic to one of its most vocal cheerleaders has already won him the backing of influential figures such as Tesla and X owner Elon Musk as well as a growing army of online fans.

Yet something else has also played an important role in Trump's conversion to crypto believer, said Bloomberg: "flattering images of himself". "Simply put, he fell in love with Trump-themed nonfungible-tokens (NFTs) – and the supporters who bought them – and that passion has turned into a broader appreciation for the industry."

What has he promised to do?

Despite previous warnings that bitcoin could undermine the position of the US dollar in the global economy, Trump has now promised a series of measures to deregulate and grow the cryptocurrency market.

He vowed to end efforts by the US government to create a central bank digital currency, an initiative that cryptocurrency enthusiasts have "long been critical of", said the NYT, vowing instead to establish a "bitcoin and crypto presidential advisory council". He said he will order the government to not sell the crypto it has seized in criminal cases and instead use it as the basis for what he called a strategic national bitcoin reserve.

He also announced that on his first day in office he would fire US Securities and Exchange Commission chairman Gary Gensler, who has cracked down on the crypto market after the FTX exchange collapsed in 2022 and its founder, Sam Bankman-Fried, was convicted of fraud. Trump also promised to commute the life sentence of Ross Ulbricht, the mastermind behind the dark web Silk Road marketplace, who has become "something of a martyr" among cryptocurrency enthusiasts, said the NYT.

What impact could this have on the election?

Trump has sought to convey his new-found support for crypto to both working-class voters and in the context of super-power politics, said Quartz. He described bitcoin as "the steel industry of 100 years ago" and warned that if it was not mined, minted and made in the US then it could leave the door open for the likes of China to lead the way.

But while it may seem a canny realignment, there is "political risk" for Trump to be so closely associated with such a notorious asset class, said Bloomberg, "should another FTX-like situation arise – or even a simple downturn in prices that sours sentiment".

There is also a risk for the crypto industry itself to be so ideologically aligned with the Republican Party, said Hilary Allen, a professor at American University's Washington College of Law. "That may prove to alienate some users, given that crypto itself is a pretty ideological thing to invest in," she added. Trump's involvement "may increase appeal among Republican users, but it may alienate Democrat users".

Paraguay is no stranger to "drug busts and bank heists" but in recent years the South American country has become a "mecca" for a very different type of crime: illegal Bitcoin mining.

Power worth around $60m a year, "enough to light up a city", is being stolen by unlicensed cryptocurrency miners, said The Economist, and there is heated debate over how to tackle the issue.

Rotting food

Besides "soybeans, timber and a massive cow population", Paraguay has "very cheap electricity", said El País, and this is why "more and more Bitcoin generators" are heading here.

Paraguay's massive Itaipú and Yacyretá hydroelectric dams, powered by the "very long and mighty" Paraná and Paraguay rivers, theoretically generate plentiful energy. Looking to capitalise on the excess supply, the government has encouraged cryptocurrency operators to set up in Paraguay in exchange for paying a tariff to ANDE, the state energy firm. Local laws offer mining companies other benefits, including "tax exemptions and a light regulatory framework".

However, the licensed crypto generators who have set up shop in Paraguay have been joined by dozens of cowboy operations that don't pay the tariff, and engage in energy theft that "annoys many Paraguayans", which is now starting to impact the country's energy security. The country’s "creaking transmission lines" are "increasingly overloaded" and Asunción, the capital, suffers from regular power cuts, causing "food to rot and office workers to broil in the sub-tropical heat", said The Economist.

Alarming outlook

The government had declared what it calls an "all-out attack" on crypto cowboys. Earlier this month, the Senate approved jail sentences of up to 10 years for energy thieves.

Authorities recently confiscated 450 Bitcoin mining machines  – bringing the total number seized from illegal operators this year to over 10,000. During a raid in May, police and prosecutors found more than 2,700 computers in a criminal crypto compound that had been operating less than two miles from an ANDE substation. The energy firm is investigating claims that seven of its engineers illegally installed crypto farms, complete with their own power transformers.

The recent raids mean that Paraguay is now "keeping pace" with a regional crackdown which has seen Venezuela take similar steps, said Cryptonews, but the country's future relationship with crypto remains unclear. Advocates claim that, properly regulated, crypto mining could benefit the Paraguayan economy "greatly" but the central bank has warned that it could be used to launder drug money and finance terrorism.

A group of "industrial players" has advised against moves that could "kill off" the sector, claiming that a clampdown could hurt Paraguay's standing in the international business community, cost the nation $1.5 billion and jeopardise "hundreds" of jobs.

Just like the nation's soya bean and cattle industries, hydroelectric output is "vulnerable to climate change". As drought and heatwaves worsen, Itaipú will produce less energy and the cooling systems required by crypto farms will demand more. Official projections suggest Paraguay's electricity surplus will be used up by as early as 2030. "The outlook is alarming," Lis García, co-author of a report by Tedic, a local think-tank, told The Economist.

What happened

A federal judge in New York on Thursday sentenced Sam Bankman-Fried to 25 years in prison for defrauding customers, money laundering and other crimes tied to the collapse of his cryptocurrency exchange FTX. He was also ordered to forfeit $11 billion in assets.

Who said what

Judge Lewis Kaplan said Bankman-Fried deserved a long sentence because he lied at trial, failed to show remorse and there's significant "risk that this man will be in a position to do something very bad in the future." Bankman-Fried, 32, said he is "sorry about what happened at every stage" and "my useful life is probably over now."

The commentary

The stiff sentence sets a "crucial" example for aspiring crypto fraudsters, Crypto Council for Innovation CEO Sheila Warren told The Washington Post. "What we don't want to do is incentivize people to say, 'Oh, you just pay a big fine and do whatever you want.' No, you go to jail if you lie, if you steal."

What next?

Kaplan said he will advise that Bankman-Fried be sent to a low- or medium-security prison near San Francisco. The fallen "crypto king" will probably serve 17 to 20 years, The Wall Street Journal said, citing prison consultants. Bankman-Fried is young enough that "he will see the light of day," said Ira Lee Sorkin, a defense lawyer whose client Bernie Madoff died in prison, to The New York Times. "But he is going to spend a lot of time in a cell."

Bitcoin is about to undergo a "halving" event for only the fourth time in its 15-year history – and its value could skyrocket even further.

The cryptocurrency has rallied to a near record high of $65,000 in recent weeks, a remarkable turnaround after falling to less than $16,000 in late 2022. The recovery has been particularly "fast and furious" in recent weeks, said Fast Company.

And crypto investors and traders are now in a "buying frenzy" ahead of a halving, or "halvening", that is expected to occur by the middle of April.

What is a 'halving' event?

Bitcoin halving is when the reward for mining the cryptocurrency is cut in half, reducing the rate at which new bitcoins are generated. 

Some crypto enthusiasts describe a halving event as being essentially the opposite of quantitative easing, and sometimes refer to it as "quantitative hardening", said The Independent. 

A halving takes place roughly every four years, or whenever 210,000 blocks have been mined. This year it is predicted to take place around 19 April, and will see the reward fall from 6.25 bitcoins for every block harvested to 3.125 bitcoins.

Why does it happen?

A halving event isn't controlled or governed by a centralised body. Instead, it was hard-coded into bitcoin's mining algorithm by the cryptocurrency's mysterious creator (or creators) Satoshi Nakamoto back in 2008. 

Bitcoin was developed as an answer to the perceived flaws in the financial system that contributed to the 2007-08 financial crisis. By cutting the supply of bitcoin, halving events are intended to counteract inflation by maintaining its scarcity, mimicking the scarcity of other finite resources such as gold.

Halving is also intended to slow the supply of coins as it approaches its total supply. Bitcoin was created with a cap of 21 million, and more than 19 million bitcoins have already been mined. By current estimates, the last bitcoin will be mined around the year 2140.

What does this year's halving mean for bitcoin?

When the first halving happened in 2012 – in the early days of the currency – the halving event had a "negligible" effect on bitcoin's value, said Forbes Advisor. 

But the 2016 event was preceded by a 300% rise in bitcoin's value, while in the 16 months that followed the 2020 halving, the price of bitcoin rose by more than 600%. 

While the simplest explanation for these price increases is the basic economic principle of supply and demand – a drop in supply while demand is high pushes prices higher – the "decentralised and semi-anonymous nature of bitcoin means it is difficult to attribute specific gains or losses to a specific event", said The Independent. 

Periods around halving events have certainly seen "tremendous growth" for the cryptocurrency, said Forbes. But "past performance is no indication of future results". 

The price of bitcoin this week topped $50,000 for the first since the end of 2021, marking a dramatic return for the world's most popular cryptocurrency. 

The rise was fuelled by "a rush of new-investor enthusiasm" and growing hype about a "cryptic-sounding" event known as "the halving" said CNN Business. Bitcoin's comeback has been "one of the more surprising market stories" of recent months, said Yahoo Finance, and followed an "epic" collapse that "burned many investors and took down some of the industry's biggest names".

'A remarkable comeback'

Since its 2009 launch, bitcoin has amassed an army of "loyal proponents who only see it rising in price over long timeframes", said The Times Money Mentor. These fans include some of the world's most respected trading firms, despite the digital currency's many ups and downs.

Bitcoin currently remains a "way off its all-time high" of almost $69,000, in November 2021 said The Independent. But this week marked a "major milestone" in its recovery from below $20,000 at the start of last year.

Bitcoin's resurgence has has been "remarkable", agreed CNN Business, with the price surging by more than 200% from a 2022 low of $16,000.

The latest rise has been driven by an influx of demand and by new money from investors in newly launched bitcoin exchange-traded funds. In January, the US Securities and Exchange Commission (SEC) approved the first ever spot exchange-traded funds (ETFs) for bitcoin, opening up the asset to billions of dollars' worth of institutional investment.        

For Wall Street to finally start trading ETFs of bitcoin represents a "new era in the world of cryptocurrencies" said New York magazine. ETFs are "part of the finance industry's lifeblood". And crypto ETFs make it easier for financial institutions and pension account holders to trade and profit from digital currencies "without having to worry about encryption keys, or getting hacked, or anything like that".

'Not for the faint-hearted'

Some analysts believe the current rally could see the price of bitcoin climbing to a record new high, driven in large part by an upcoming "halving", in April. The event is "hard-coded into bitcoin's underlying network", said The Independent, and takes place roughly every four years, when rewards for mining the cryptocurrency are "slashed in half". This reduces the rate of new coins entering circulation, pushing the price of bitcoin higher.

Previous halvings have preceded record-breaking price rallies, and the next promises to deliver another "scorcher for crypto", said Antoni Trenchev, the co-founder of crypto lender Nexo Capital. “Now that $50,000 has been topped, $69,000 followed by $100,000 look achievable in 2024," he told CNN Business. 

Investment bank Standard Chartered is also predicting that the bitcoin price will reach the $100,000 mark by the end of this year.

Yet experts warn that bitcoin remains hugely volatile. January was "crypto in a nutshell", said Trenchev. Following the endorsement of a spot bitcoin ETF, the cryptocurrency’s price soared to $49,000, but then dipped to $38,500. New investors who endured that "baptism of fire" may now be celebrating this week's gains, but crypto is "not for the faint-hearted".

US regulators have approved the country's first investment products set up to directly track the price of Bitcoin.

The US Securities and Exchange Commission (SEC) last week approved the launch of 11 exchange traded funds (ETFs), which follow the price of Bitcoin, and are known as spot ETFs.

The SEC has previously opposed these products, explained MoneyWeek, "claiming the asset is open to fraud and manipulation" but it has given the go-ahead after courts queried its opposition.

Gary Gensler, chairman of the SEC, remains cautious though. He said that while listings from investment providers such as BlackRock, Fidelity and Grayscale were approved, "investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto".

What is Bitcoin?

Bitcoin is the world's oldest and best-known cryptocurrency.

It is a digital token that was launched in 2008 by someone calling themselves Satoshi Nakamoto, explained BBC News, and "remains the most valuable and famous".

The price of Bitcoin and other cryptocurrencies is very volatile though, depending on supply, demand and sentiment. The Bitcoin price hit $70,000 or £50,000 in 2021, before falling to $16,000 in 2022 "as scandals shook the industry", but in recent months it has risen "steadily" to around $44,000.

What is a Bitcoin ETF?

An ETF aims to replicate the performance of a broad index such as the FTSE 100 or individual assets such as shares or bonds.

A Bitcoin ETF gives investors a "regulated way to gain exposure without needing to hold it directly", said The Times.

Cryptocurrencies such as Bitcoin are unregulated, so there is no investor protection if a trading platform collapses or your money is stolen.

A Bitcoin ETF gives you exposure to the cryptocurrency's "huge swings in value", added The Times, but in theory you are still protected by the Financial Services Compensation Scheme if the investment firm behind the ETF were to fail.  

The SEC approval doesn't remove the volatility of Bitcoin though, added MoneyWeek, as the price is "still subject to wild price swings depending on sentiment and there are risks of big losses".

Who can invest in a Bitcoin ETF?

The latest Bitcoin ETFs are only available to US investors. 

There would be "regulatory hurdles" to selling a Bitcoin ETF to UK investors, said Financial News. US-based ETFS are "not permitted" to be sold to UK investors, so asset managers would have to launch "specifically tailored" products for the UK or European market.

The Financial Conduct Authority (FCA) has already "cracked down" on crypto marketing and banned the sale of crypto-backed exchange traded products to UK investors, added ThisIsMoney, and has "made it clear" that it thinks there are risks that come with cryptocurrency investing. This makes the path to any UK approval "a long one".

There are other ways for UK crypto fans to get exposure to Bitcoin.

One option is to invest directly in Bitcoin through an FCA-regulated platform, said Morningstar, or "for those feeling somewhat more cautious", you could buy shares of companies involved or exposed to cryptocurrency mining or blockchain.

Existing crypto investors may also benefit from more money going into Bitcoin, added MoneyWeek, "but it also risks making the value more volatile".

Cryptocurrency has been around for over a decade but has become ubiquitous in the past few years. And it seems that the financial platform reached a breaking point in 2023, which appeared to be crypto's year of highs — and lows. 

There are plenty of stories, many of them recent, of people who started with nothing and built themselves into millionaires through crypto investments. For every one of these stories, though, there are also headlines about the other side of crypto, ones that involve fraud, prison and environmental concerns. Here are some of cryptocurrency's ups and downs in 2023. 

Sam Bankman-Fried and FTX

Any mention of "the year of cryptocurrency" would be incomplete without Sam Bankman-Fried, the founder of collapsed crypto exchange FTX. Bankman-Fried started his company in 2019 and it eventually grew to become one of the industry's largest players. At its peak, FTX was valued at $32 billion. 

The success of the company also made Bankman-Fried extremely wealthy. In September 2022, one month before FTX's collapse, Forbes valued his net worth at $17.2 billion, and he "became a prominent figure in the crypto space while becoming one of the wealthiest people by the age of 30," the outlet noted.  

Behind FTX's success, though, was a much darker story, and the company began to fall apart when the SEC began investigating allegations of a widespread Ponzi scheme with Bankman-Fried at the helm. FTX declared bankruptcy in November 2022. Bankman-Fried was eventually charged with financial securities violations, wire fraud and conspiracy. Throughout 2023, additional information came out showing that FTX had conned its investors out of at least $10 billion. Bankman-Fried was found guilty on seven counts in a New York court in November and faces decades in prison, with sentencing scheduled for March 2024. His downfall represents "the deceit fundamental to the crypto market itself," the Los Angeles Times reported. 

Environmental issues

Cryptocurrency has long been the bane of environmentalists who express concern over the waste generated by crypto-mining. While all crypto creates environmental hazards, it was the popular choice Bitcoin that made headlines this year. 

The controversy first emerged in 2021 when the state of Texas ended up paying Bitcoin's parent company $18 million to keep their computers off during a winter storm so that electricity could be redirected to the power grid. While power plants struggled to stay running, these so-called "Bitcoin mines" were being used to power the homes of thousands of people trading crypto. Despite the harm that came from this power outage, the usage of Bitcoin mines remains common throughout the country. In April of this year, an investigation by The New York Times found "identified 34 such large-scale operations ... in the United States, all putting immense pressure on the power grid and most finding novel ways to profit from doing so." 

These mines "can create costs — including higher electricity bills and enormous carbon pollution — for everyone around them," the majority of whom have no stake in Bitcoin. One mine in Dalton, Georgia, is "using nearly as much power as the surrounding 97,000 households," the Times found. The largest Bitcoin mine in the U.S. is located in Rockdale, Texas, and "uses about the same amount of electricity as the nearest 300,000 homes," the Times reported. So it seems that the industry is just getting larger — with taxpayers in Texas and elsewhere stuck with the bill. 

Stocks and lobbying

Despite many negative stories, 2023 wasn't all bad in the crypto world. Many have argued that crypto is still a worthwhile investment, and there is some data to support this despite its volatility. 

Numerous crypto-related stocks rose at the beginning of December as part of a "new surge of momentum fueled by U.S. interest rate cut expectations and traders betting that American regulators will soon approve exchange-traded spot bitcoin funds," Reuters reported. Bitcoin's stock passed $42,000 per share for a short time, representing a 20-month high. The currency has seemingly "[cast] off the gloom that had settled over crypto markets following the collapse of FTX and other crypto-business failures," Reuters added. 

The outlet additionally reported that the crypto industry is "on track to hit a new record for federal lobbying spending." The major crypto companies spent $18.96 million on lobbying in the first three quarters of 2023, according to Reuters, compared with $16.1 million during the same period in 2022. So while cryptocurrency as a whole remains controversial, its financial peaks and valleys remain fluid. 

Rishi Sunak is harming the UK's climate reputation

Financial Times editorial board

"Even by the usual standards of governments a year away from an election, Prime Minister Rishi Sunak's legislative agenda unveiled in Tuesday's King Speech is thin gruel," writes the Financial Times's editorial board. "Given the scale of challenges facing the UK", it is particularly unfortunate that it "put so much focus on drawing short-term political divides with the Labour opposition". This is especially apparent "in the plan to mandate annual licensing rounds for North Sea oil and gas drilling".

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A ban on laughing gas is long overdue

Lucy Dunn for The Spectator

"On the surface, laughing gas appears to be a fairly harmless drug," writes Lucy Dunn for The Spectator. "It doesn't have a giveaway smell or any obvious adverse side-effects – and it's cheap." But "laughing gas-induced nerve damage is, in fact, fast becoming an epidemic" and "treating it as harmless for so long has left too many young people disabled".

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Act now or we risk turning reading into a niche hobby

Jacqueline Wilson in The Times

"It's frightening for the National Literacy Trust to report that in 2023 only 43% of children and young people say they read for pleasure," says children's author Jacqueline Wilson. "Reading supports empathy and creativity" so it's "worrying that reading is in danger of becoming a niche hobby" and "so important for every primary school to have an attractive, fully stocked library". 

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Sam Bankman-Fried and the Achilles heel of Crypto

Molly White in The New York Times

"Although some might try to dismiss the FTX collapse as a unique case, it is far from it: the funding model has become all too normal in the cryptocurrency world," writes cryptocurrency researcher Molly White in The New York Times. "Entrepreneurs thought they had found a free money machine in 2017" but the "collapse of the FTX exchange revealed the massive duplicity underlying many crypto exchanges".

Read more

Sam Bankman-Fried, who ran one of the world's biggest cryptocurrency exchanges, faces decades in prison after he was found guilty of fraud and money laundering.

The trial in New York of the 31-year-old "tousle-haired mogul", who founded the FTX cryptocurrency exchange, "laid bare the hubris and risk-taking across the crypto industry", said The New York Times.

The verdict "capped what prosecutors called one of the biggest financial frauds in American history", said Politico. But commentators are at odds over exactly what it means for the future of the crypto industry.

What did the papers say?

For the "broader cryptocurrency business", the conviction "could provide a long-awaited chance to move forward", said Reuters.

For some in the sector, Bankman-Fried's conviction on seven counts of fraud and conspiracy "points to the end of an era of risky and wrongful practices", and "a more regulated future", said Bloomberg.

But others outside the industry are "taking a much tougher line", arguing that the verdict "confirms crypto as a sector riven with weaknesses that attract criminals, hackers and rogue states".

Bankman-Fried, who was arrested last year after his firm, FTX, went bankrupt, has "done irrevocable damage to this industry", said Sky News, "reinforcing the narrative of a Wild West where consumers have no protection". So it will "take years for the crypto world to rehabilitate its image, if it ever does at all", added the broadcaster.

Jordan Estes, a former prosecutor, told Wired that the US Department of Justice will consider the conviction a "signature victory" and its first high-profile crypto scalp. He was "crypto royalty", which "lends his conviction a symbolic importance".

But "despite widespread predictions of cryptocurrency's demise", there is "still a market for virtual assets", said Reuters, noting that the price of bitcoin has more than doubled this year as "large financial institutions" like BlackRock "seek to make the virtual currency more respectable". 

What next?

Further legal headaches are expected for crypto. After Bankman-Fried "met his fate" with the justice system, "much of the rest of the industry is facing its own legal showdowns with the [US] government", said Politico.

"Crypto giants" like Binance, Coinbase and Gemini are "still heading for courtroom clashes" with regulators that could "prove an even greater peril to the market's future" than FTX’s collapse in 2022.

Closer to home, the UK government unveiled plans earlier this week to regulate the crypto industry in a similar way to traditional financial investments that would require all crypto companies to be authorised by the Financial Conduct Authority (FCA).

But this plan has already come under attack by a former head of the regulator, noted the Financial Times. Charles Randell, who quit as chair of the FCA last year, warned that "investors risked being harmed if crypto assets were labelled as regular investments".

We can expect some within the sector to try to position themselves as non-crypto projects, said The New York Times. Several crypto companies have "tried rebranding", it said. Autograph, an NFT start-up co-founded by former American football star Tom Brady, "quietly removed some of the crypto language from its marketing", and Paradigm Capital "erased mentions of the word 'crypto' from its website", instead describing itself as a “research-driven technology investment firm".

Meanwhile, the broader tech industry has "done what it does best: move on to the next thing", it added. Silicon Valley is "no longer fixated on crypto" and although crypto firms "may come back around in a few years", for now "they are out of style and therefore irrelevant".

As for Bankman-Fried, it is unclear whether he will appeal against the verdict. He had pleaded not guilty to all the charges, insisting that he had acted in good faith. His sentencing has been set for 28 March next year.

Sam Bankman-Fried, the founder of the FTX crypto exchange, which collapsed last November, is scheduled to appear in a New York court next week, charged with eight counts of fraud, which, if proven, could mean a 115-year prison sentence. 

"It is a matter of public record that customer funds have been mishandled," said Zoe Williams in The Guardian: at least $4 billion in client funds was transferred from the crypto platform to Bankman-Fried's private trading firm, Alameda Research. So the question for the jury is essentially: "conman or idiot". 

Yet much more is at stake. Worth $26 billion in his short-lived prime, Bankman-Fried has become "the embodiment of crypto: his rise astronomical, his demise spectacular". The case will shed light on the wild west-style regulation that allowed him to operate. It isn't just "the crypto king" who's on trial; "it's the future of crypto regulation".

'A mammoth recovery task'

Ahead of the proceedings, FTX's current CEO and restructuring expert, John Ray, has been overseeing "a mammoth recovery task", said Teresa Xie on Bloomberg. Ray helped untangle the mess following energy giant Enron's bankruptcy in 2007. And of late, he has been "accelerating efforts to recoup billions of dollars" – notably suing Bankman-Fried's parents, professors at Stanford Law School, for allegedly siphoning off millions from FTX in "fraudulently transferred and misappropriated funds". 

Outside investors are trying to get a piece of the bankruptcy pie too. "Distressed-debt investors", including Silver Point Capital, Diameter Capital and Attestor Capital, have bought more than $250 million worth of FTX debts – "betting that the company's lengthy bankruptcy process will uncover additional valuable assets".

'Pivotal' evidence of former girlfriend

In all, Bankman-Fried is charged with causing the loss of more than $8bn in customer assets, said Sheelah Kolhatkar in The New Yorker. Victims range from the supermodel Gisele Bündchen to "construction workers, small-business owners and college students". 

Ironically, before the collapse, SBF, as he was known, was regarded as a white knight in the wider crypto meltdown and an altruistic philanthropist. That profile, and the backing of venture capitalists such as Sequoia Capital, persuaded many investors that his company was sound, despite his eccentric media appearances and reports of louche living at FTX's Bahamas HQ. 

It won't help Bankman-Fried's case that four of his close lieutenants – including his on/off girlfriend Caroline Ellison, who ran Alameda Research – have reached deals with prosecutors, said James Gordon in the Daily Mail. Her evidence is likely to be "pivotal". This promises to be a fascinating financial trial, but a powerful human story too.

The smartest insight and analysis, from all perspectives, rounded up from around the web:

"The sun may be setting on the cryptocurrency craze," said Michael Hiltzik in the Los Angeles Times. Crypto's decline from a peak market capitalization of more than $3 trillion in late 2021 to about $800 billion today means that late-stage investors likely reaped "enormous losses." And now, initiatives in Congress that were aimed at liberalizing the crypto market "appear to be running out of steam" as regulators have "tightened the screws." Evangelists for the new form of currency had claimed it was a financial innovation that would allow those on the margins of the financial system to prosper. But after 14 years of bubbles and scams, it's become clear that crypto is merely a speculative asset, something to buy in the hope that someone else will buy it for more. That's "often described as the 'greater fool' theory." What the unbanked really need are simple and inexpensive ways to save their money, but crypto transactions, bristling with hidden fees, "tend to be just the opposite."

"Crypto's free pass is getting yanked" because of the sudden failure of crypto exchange FTX last year, which lost investors billions, said Yueqi Yang, Katanga Johnson, and Austin Weinstein in Bloomberg. To prevent a repeat of the 2008 financial crisis, authorities are now trying to "build a wall" between the crypto trading market and the banking and securities markets. The Federal Reserve and other top financial regulators jointly issued a blunt New Year's warning to banks to ensure that "crypto-related risks" don't affect the banking system, and since then regulatory actions have come thick and fast. In late January, the Fed barred crypto firm Custodia Bank from "coveted access to the central bank's payment system." In just the past week, the SEC fined a crypto promoter and sued a startup that issued digital coins, while New York's financial services department ordered the company Paxos to stop issuing BUSD, a popular stablecoin.

In response, bankers "are re-evaluating any exposure to the crypto sector, no matter how small," said Rachel Louise Ensign and David Benoit in The Wall Street Journal. Banks that were once "deep into crypto" are reducing or even eliminating their exposure, while those that kept their distance are now actively "shunning customers" with crypto ties. This restructuring is bringing to light the extent to which crypto businesses that pitched themselves as an alternative to banks still rely on those institutions for access to hard currency. When Citigroup Inc. "abruptly closed" the account of Swan Bitcoin, for example, the company had to scramble to pay its employees.

This "aggressive government crackdown" has caused "outrage and anxiety" in the crypto industry, said David Yaffe-Bellany in The New York Times. Kristin Smith of the Blockchain Association, an industry group, called it a "crypto carpet bombing." After the SEC reached a settlement with the U.S. crypto exchange Kraken, removing one of its products from the market, the company's founder briefly "posted an obscene meme" about the agency's chief. And this upheaval won't end any time soon. Industry lawyers say the spate of enforcement is likely just "a prelude to a protracted spell of legal wrangling."

This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.

North Korean hackers stole a record $1.7bn of cryptocurrency last year, according to a New York-based data firm.

The figure is four times as much as the country’s previous record for cryptocurrency theft – $429m in 2021 – and constituted 44% of the $3.8bn stolen in 2022, which Chainalysis called “the biggest year ever for crypto hacking”.

With many countries having imposed heavy sanctions on the Pyongyang regime, North Korea is turning to crypto theft to fund its nuclear arsenal. “Despite being unable to feed its people”, it has “found innovative ways to fund its missiles programme”, said The Economist.

The hackers “typically launder crypto” through “mixers”, which “blend cryptocurrencies from various users to obscure the origins of the funds”, Chainalysis told the BBC. Other analysts have said that North Korea launders stolen crypto through brokers in China and non-fungible tokens (NFTs).

Crypto mixers are software that “allows users to obfuscate the sources and destinations of cryptocurrency holdings” and are “used by hackers in attempts to exchange crypto into fiat currency”, said Bloomberg.

“Last month, the FBI claimed that North Korea-affiliated Lazarus Group was responsible for a $100m crypto heist on a blockchain network called Horizon bridge last year,” said the BBC.

CNN reported that Pyongyang-backed hackers have conducted ransomware attacks on healthcare providers and other key sectors in the US and South Korea and used the takings to fund further cyberattacks on government agencies in the two nations.

Last summer, an investigation by the broadcaster found at least one cryptocurrency entrepreneur who unwittingly paid a North Korean tech worker tens of thousands of dollars.

In 2019, PCMag reported that North Korean hackers “have been blamed for using email-based phishing attacks to trick employees at cryptocurrency exchanges” to download malware to their computers. Security experts “also suspect the country’s hackers were behind several heists on the Swift banking network back in 2016”, the tech site added.

Sam Bankman-Fried, the self-styled ‘King of Crypto’, is to plead not guilty to criminal charges relating to cheating investors and looting billions of dollars at his now bankrupt FTX cryptocurrency exchange.

Forbes said “it’s a stunning fall from grace for Bankman-Fried, who had been heralded as a modern J.P. Morgan for swooping in to save troubled crypto firms before his own firm blew up.”

What is his background?

Born in 1992 in California, where both his parents taught as professors at the Stanford Law School, Sam Bankman-Fried, known as SBF, attended the prestigious Massachusetts Institute of Technology, where he graduated with a bachelor’s degree in physics and a minor in mathematics.

In 2017, he co-founded Alameda Research, a quantitative trading firm, before launching FTX, a cryptocurrency derivatives exchange, in 2019.

The Guardian said the “30-year-old crypto mogul rode a boom in the value of bitcoin and other digital assets to become a billionaire several times over and an influential political donor in the United States”.

He poured hundreds of millions of dollars into mainstream marketing to promote his exchange, including the naming rights to leading esports league TSM and the NBA Miami Heat’s arena. It was also reported he offered to help Elon Musk part-fund his takeover of Twitter.

His wealth peaked at $26 billion in early 2022, when he was ranked the 60th richest person in the world by The World's Billionaires. However, by October 2022 his fortune had dropped to an estimated $10 billion and was wiped out almost overnight when FTX collapsed in early November after a wave of withdrawals. He was freed on a $250 million bond following his extradition in December from the Bahamas, where he lived and where the exchange was based.

He faces charges of wire fraud, commodities fraud, securities fraud, money laundering and campaign finance law violations, and could serve up to 115 years in prison if convicted.

A man of ‘striking contradictions’

“Bankman-Fried is marked by striking contradictions”, said Yahoo! Finance, which ran a profile of him in 2021.

“On the one hand, he is a classically driven businessman who sleeps four-hour nights, famously catnapping in a beanbag chair at the office so subordinates can wake him at any hour for guidance,” said the news site. “Yet Bankman-Fried is also disarmingly reflective, candid, and almost academic in his apparent effort to give dispassionate and truthful answers.”

A self-described “Benthamite,” “effective altruist” and vegan, he was reported as having “a Robin Hood-like philosophy” by Bloomberg in April last year, after the billionaire vowed to give away his fortune.

Yet there is another, darker side to him which manifested in the way he ran his companies, according to John Ray, who oversaw the $23 billion bankruptcy of Enron and took over as CEO of FTX after Bankman-Fried stepped down in November.

In what Forbes described as “a scathing rebuke of Bankman-Fried’s leadership”, Ray said, “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”

“From compromised systems integrity and faulty regulatory oversight abroad to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” he added.

“Looming over our whole conversation,” said Kelsey Piper in Vox after Bankman-Fried began an exchange with her on Twitter in November last year, “was the fact that people who trusted him have lost their savings, and that he’s done incalculable damage to everything he proclaimed only a few weeks ago to care about.”

“The grief and pain he has caused is immense, and I came away from our conversation appalled by much of what he said. But if these mistakes haunted him, he largely didn’t show it,” she concluded.

Cryptocurrency valuations have been hit this year amid regulatory crackdowns and collapses of high-profile exchanges.

That may make people nervous about getting involved in this area, but there is a less volatile way to use crypto-related assets: a type of financial product known as stablecoins.

Crypto exchange Coinbase co-founded the Centre Consortium in 2018 to develop a stablecoin called the USD Coin or USDC, with the aim of boosting “economic freedom in the world” by developing a form of digital dollar that can be used by anyone.

What is a stablecoin?

Cryptocurrencies have emerged over the past decade with the aim of decentralising money supply, supporting people without bank accounts and providing a faster and cheaper form of payments.

Most people have heard of cryptocurrencies such as bitcoin and ethereum. They are the oldest and largest cryptocurrencies by market capitalisation and their value depends on a range of factors such as investor sentiment and levels of supply and demand.

Stablecoins fall into various categories of crypto-asset but can work differently. USDC is a fiat-backed stablecoin whose value is pegged to the US dollar, so it is always clear what one USDC will be worth.

For example, a user would always be able to redeem one stablecoin for one dollar, making it easier to monitor than the value of bitcoin, for example, which can change significantly on a daily basis.

Stablecoin purchases and valuations are managed using blockchain technology, which promises to make transactions more quickly and more securely than traditional banking software is able. The idea is that the stablecoin can therefore be used around the world as a convertible form of digital money for lending, payments or just for those who may not have access to a bank account.

How does USDC work?

Unlike most cryptocurrencies, the USDC is issued by regulated and licensed financial institutions, Coinbase and Circle, both of which are established crypto exchanges.

Transfers made using USDC can be completed in under an hour using blockchain technology. By contrast, international bank transfers often take several business days. There are also no added intermediary costs as you don’t have to pay a banker or broker for arranging the transfer – a typical saving of up to 7% of the sum transferred. Eligible Coinbase customers can earn rewards for every USD Coin they hold, worth up to 1% annual yield. They can also enjoy no commission fees upon purchase of USDC.*

USDC aims to be a transparent stablecoin and maintains full reserves of the equivalent fiat currency, which is reported and verified by the accountancy firm Grant Thornton each month.

What else is USDC used for?

While many cryptoassets have become speculative investments or hedges against inflation, stablecoins are intended to be used as currency.

According to Coinbase, that means USDC will have several applications. As well as international transfers, it can be used as a secure store of wealth for those living in parts of the world with limited access to banking or other financial services.

It could also generate opportunities in the new “web3” world. This is seen as the next stage of the internet, in which online tools are decentralised and run in a collection of virtual worlds known as the metaverse. Many of these applications rely on a blockchain-based currency such as USDC.

They are already used in areas such as gaming, insurance, saving, lending and borrowing – and even on job platforms that let freelancers get paid from anywhere in the world in ethereum or stablecoins.

While recent setbacks have dented the reputation of some digital currencies, USDC may signal a more stable, practical future for crypto assets.

* No commission fees attributed to Coinbase will be charged until further notice. However, spread, and processing fees charged by third party processors, will continue to apply. This feature may not be available to all regions. See terms for USDC APY

For more information on the USD Coin, visit the Coinbase website

Upon purchase of USDC, you will be automatically opted into rewards. If you’d like to opt out or learn more about rewards, click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.

Cryptocurrency is unregulated in the UK. The value of investments can go down as well as up. Profits may be subject to Capital Gains Tax.'

Sam Bankman-Fried, the disgraced founder of cryptocurrency exchange FTX, is in FBI custody and en route from the Bahamas to New York City to face federal fraud charges tied to FTX's collapse, Manhattan U.S. Attorney Damian Williams said Wednesday night.

Bankman-Fried has indicated he will plead not guilty to the eight criminal charges filed against him. But Williams also announced in his video message that two of Bankman-Fried's top associates, Caroline Ellison and Gary Wang, secretly pleaded guilty to similar charges and "are both cooperating with the Southern District of New York."

Ellison, the former CEO of trading firm Alameda Research, pleaded guilty on Dec. 19 to seven counts including wire fraud and conspiracy to commit securities fraud. Bankman-Fried founded and owns most of Alameda, and he and Ellison were romantically involved at times, The Wall Street Journal reports. Wang, a software engineer who cofounded FTX and Alameda with Bankman-Fried, pleaded guilty to wire fraud and three other counts.

Without a plea deal, Ellison, 28, faced up to 110 years in prison, while Wang, 29, could get up to 50 years. In exchange for their cooperation, the Justice Department agreed to recommend a reduction in their sentences. "Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness," Wang's lawyer Ilan Graff said in a statement. Williams encouraged anyone else who participated in Bankman-Fried's alleged fraud to come forward. "We are moving quickly and our patience is not eternal," he said.

It isn't clear if Bankman-Fried, 30 and facing the possibility of life behind bars, knew about the plea deals of his top associates before he agreed to be extradited to the U.S.

Ellison and Wang also agreed to settle a parallel civil security and commodities fraud lawsuit filed by the Securities and Exchange Commission and Commodity Futures Trading Commission.

Another chapter in “the spectacular rise and fall of Sam Bankman-Fried”, founder of the failed crypto exchange FTX, said DealBook in The New York Times: he was arrested in the Bahamas on Monday.

Federal prosecutors in Manhattan are seeking extradition on multiple charges, including defrauding investors and money laundering. “The arrest took many by surprise.” Lawyers said the government may have “moved faster than expected” to avoid “muddying the waters” following Bankman-Fried’s recent “media tour”.

Still, the loquacious entrepreneur hasn’t always helped his own cause. “Like I, like, kind of vaguely knew, kind of, sort of maybe, um, on a qualitative level what was going on,” he told listeners on the Unusual Whales podcast, just before his arrest.

“[He] built a house of cards on a foundation of deception while telling investors it was one of the safest buildings in crypto,” said Gary Gensler, head of the SEC, which has also filed civil charges. Wall Street’s main regulator alleges that FTX raised more than $1.8bn from backers by “orchestrating a scheme to defraud”.

A big part of that, said Bloomberg, was keeping them in the dark about the undisclosed “diversion” of some $8bn in FTX customer funds to its trading affiliate, Alameda Research.

More than 100 FTX-related companies, including Alameda, have filed for bankruptcy. Yet, so far, the criminal and civil charges “have focused entirely on Bankman-Fried” – raising questions about whether other executives “have been cooperating with prosecutors”.

Indeed, Bankman-Fried could be forgiven “for mulling over past financial scandals with a degree of envy”, said Antony Currie on Reuters Breakingviews. No bank bosses, after all, were brought to book for their role in the financial crisis. Unlike them, he lacks the “cover of systemic risk”.

El Salvador has put an estimated 2% of the country’s adult population – roughly 100,000 people – behind bars as part of its war on gangs.

President Nayib Bukele’s crackdown has put the nation in an extended state of emergency with important constitutional rights set aside, as part of a mano dura, or “iron fist”, anti-gang policy.

The measures have drawn criticism from human rights groups but have won the backing of the majority of the Salvadorean public. But could a free trade deal with China unravel Bukele’s soaring popularity?

Why have so many people been arrested?

El Salvador is home to two of the world’s most notorious gangs: Barrio 18 and MS-13. Prior to the clampdown, around 70,000 active gang members had made it “virtually impossible” for politicians and other officials to “avoid engaging with them”, said the Crisis Group.

This year’s crackdown was “prompted by a bloody killing spree by gangs that saw dozens of people killed in March”, said CNN. During the country’s “bloodiest weekend in more than two decades”, more than 80 people were killed, added Al Jazeera. The MS-13 gang was blamed.

How have laws and rights been changed?

In the wake of the deadly weekend, a “state of exception” was imposed, which suspended key civil liberties and led to mass incarceration.

A report by Human Rights Watch and the NGO Cristosal found that there have been widespread abuses, including arbitrary arrests, due process violations, enforced disappearances, torture and deaths in state custody.

At least 90 people have died in custody since March, according to government statistics, and several of those who have been released from jail reported inhumane conditions and harsh treatment, including beatings and waterboarding.

In one incident earlier this month, the government of El Salvador sent 10,000 soldiers and police to seal off a town on the outskirts of the nation’s capital to search for gang members. “Starting now, the township of Soyapango is completely surrounded,” Bukele wrote on Twitter, as he shared videos showing ranks of soldiers.

The anti-gang measures were “supposed to be temporary”, said The New York Times, but, eight months on, “the military patrols the streets, mass arrests are a daily occurrence and jails are filled to the brim, edging El Salvador toward what is effectively a police state”.

Bukele has given the NGOs’ claims short shrift. Writing on Twitter, he said that “their fear is that we are successful, and that other governments will want to imitate us”.

What has public reaction been?

Public opinion appears to be mostly on his side: some 75% support the crackdown, according to a recent survey by the Public Opinion Institute at San Salvador’s Central American University.

Bukele himself is still basking in an 86% approval rating found during an October survey of 12 Latin American countries by CID Gallup, making him the most popular leader in the region.

He also points to encouraging crime figures: between January and the end of October, 463 people were killed in El Salvador, a 50% drop on the same period last year.

Why has the bitcoin crash hurt El Salvador?

Last month FTX, one of the largest cryptocurrency exchange platforms, filed for bankruptcy, prompting a dramatic fall in the price of bitcoin.

This “caused all eyes to turn to El Salvador”, explained DW, because Bukele had made bitcoin legal tender in 2021 and also invested a large part of the country’s fiscal reserves in the digital currency.

On the day the insolvency was announced, the vice-president, Félix Ulloa, said that China had offered to buy the country’s $21bn of foreign debt as part of a free trade agreement. A deal with Beijing could benefit El Salvador economically but there are fears that it “puts the country’s sovereignty up for sale”, said the news site.

Therefore, said DW, “uncertain” is “perhaps the word that best describes the current situation in El Salvador”.

Crypto has come under intense scrutiny following the crash of FTX, a $32 billion cryptocurrency exchange. However, many remain unaware that cryptocurrency actually has a steep environmental cost. Here's everything you need to know:

What is cryptocurrency?

Cryptocurrency is a digital currency that is not monitored by a centralized authority. It is based on blockchain technology. There are over 9,000 cryptocurrencies in existence, the top two being Bitcoin and Ethereum. Because the currency is decentralized, nobody monitors its value the way regular currency is monitored.

Digital currency can be used to make some purchases; however, most people choose to invest in cryptocurrency, Forbes writes. Cryptocurrency transactions are verified using an encryption system and recorded in a public ledger known as the blockchain. New crypto units are produced through a process called mining, in which computers perform complicated mathematical analyses, resulting in crypto coins.

The process of mining cryptocurrency, as well as recording and storing transactions in the blockchain, places substantial pressure on the environment.

What is blockchain?

The blockchain is essentially a secure database shared between computer nodes that stores information electronically. The information is stored in groups called blocks, which have a maximum capacity. Once it's reached, the block closes and links to the block before it, hence the chain. The system allows for the blockchain to be a clear timeline of transactions that anyone can view.

In order for transactions to be added to the blockchain, they must go through a verification method. The two main ones are proof of work and proof of stake.

The main culprit for environmental damage is the proof of work method. It involves mining, where the first computer to solve a math puzzle is rewarded with the currency that is then recorded in the blockchain. In order to do so, many use application-specific integrated circuit (ASIC) miners, which are very powerful computers designed to mine a certain cryptocurrency, writes Insider. The more ASIC miners there are, the higher the competition. "The more machines on the market, the more difficult it becomes to mine," explains Junior Theomou, the founder of Miners DeFi, to Insider. "So now you have a competition going on, with more and more machines, mining and competing within each other." The method of verification requires intense processing power.

Proof of stake is a newer method that uses less processing power, where a certain amount of cryptocurrency is staked, and anyone who stakes currency can verify transactions. The more you stake, the more you can verify. "It's almost like bank collateral," explains Buchi Okoro, co-founder, and CEO of cryptocurrency exchange Quidax, to Forbes. This method is much faster and doesn't require energy-intensive equation solving.

How does it affect the environment?

Mining cryptocurrency is responsible for high levels of energy consumption, especially since proof of work is still the most dominant verification method. According to the University of Cambridge, Bitcoin, the largest global cryptocurrency, alone produces over 40 million tons of carbon dioxide per year and consumes an average of over 80 terawatt-hours of energy per year. Also every four years, the amount of coins earned after mining gets halved, requiring double the amount of energy to produce one coin, Insider explains.

While Bitcoin is just one type of cryptocurrency, research from the White House Office of Science and Technology Policy (OSTP) found that cryptocurrency in general produces about 120 and 240 billion kilowatt-hours per year, which exceeds the total energy use of Argentina or Australia and accounts for between 0.4 percent to 0.9 percent of global energy usage. It also accounts for approximately 0.3 percent of global annual greenhouse gas emissions.

Crypto mining also produces a large amount of electronic waste. Bitcoin produces an average of 40 kilotons of e-waste per year. This is largely due to how quickly mining technology becomes obsolete due to new advancements. Research has shown that mining technology only lasts an average of 1.29 years, per BBC. The ASIC miners are incredibly specialized, making them impossible to repurpose once they are no longer useful.

Many in favor of crypto argue that the technology uses renewable energy to function; however, there have been conflicting numbers on this. One source even found that Bitcoin's renewable energy usage actually dropped in 2021, Time reports. There is plenty of evidence to show the harms of greenhouse gas emissions as well as waste, including rising sea levels and harm to wildlife. The world is also in the midst of an energy crisis due to Russia's war on Ukraine, which calls cryptocurrency energy usage into further question.

Can crypto become less environmentally harmful?

Many crypto companies have acknowledged the environmental impact and have made strides to improve the system.

For example, the second-largest cryptocurrency Ethereum has announced that it plans to move away from proof of work verification and move toward proof of stake verification, which has a greatly reduced ecological footprint. Many independent crypto groups also came together to form the Crypto Climate Accord aiming to make the industry net zero by 2030 and completely decarbonized by 2040.

In the U.S., the Biden administration has made curbing crypto emissions more of a pressing issue. In a White House press release, the administration listed recommendations from the OSTP including improving energy efficiency as well as investing in more research on technologies that could lower environmental damage.

However, Bitcoin doesn't show any signs of changing its system. "It's only as secure as it is because it hasn't changed ever. And that is what people love about it," explains Theomou to Insider. This isn't due to a lack of options. There are plenty of mining methods that don't require as much energy and the crypto industry can opt to switch to renewable energy sources. Many smaller currencies have already opted to use proof of stake verification and over 200 currencies signed the Crypto Climate Accord.

Theomou concludes, "The more people learn about crypto, they learn about all the options, and they can easily decide not to use one crypto and therefore use another which is more environmentally friendly."

Sam Bankman-Fried, founder of the collapsed cryptocurrency exchange FTX, was arrested in the Bahamas Monday after being charged with fraud by the U.S. Securities and Exchange Commission (SEC).

In the SEC's official court filing, the agency documented a list of missteps that eventually led to the collapse of the company, and some of the details are truly unbelievable.

SBF allegedly used funds improperly from the start

Thousands of FTX customers bought into SBF's lies, the filing alleged. But SBF was using his customer's funds improperly from the very beginning of his time at the helm of the company, according to a copy of the filing shared by DL News editorial director Jim Edwards. He would allegedly funnel his customers' money into his company's hedge fund, Alameda. These funds reportedly contained a number of large undisclosed financial ties, including "venture investments, lavish real estate purchases, and large political donations." The filing went on to say that SBF "used Alameda as his personal piggy bank to buy luxury condominiums, support political campaigns, and make private investments, among other uses."

He allegedly continued misusing funds even as the company sank

FTX began to see the writing on the wall in May, when the crypto market began to collapse and the exchange was unable to pay back practically anybody. Even as this was occurring, SBF continued defrauding investors, the SEC alleged. "When prices of crypto assets plummeted in May 2022, Alameda's lenders demanded repayment on billions of dollars of loans," the filing said. "Despite the fact that Alameda had, by this point, already taken billions of dollars of FTX customer assets ... SBF directed FTX to divert billions more in customer assets to Alameda," ensuring he could continue to amass investors.

At least one major account was associated with someone who had no ties to FTX

The SEC alleged that a number of parties were in control of investment accounts being funneled through Alameda. One of these, an $8 billion liability, was allegedly directed by SBF to be "moved to an account that would not be charged interest." While the details of this liability were not revealed in the filing, the SEC claims that "the account was associated with an individual that had no apparent connection to Alameda. As a result, this change had the effect of further concealing Alameda's liability in FTX's internal systems."

Sam Bankman-Fried, founder of the failed cryptocurrency exchange FTX, was arrested Monday in the Bahamas at the request of the U.S. government.

In a statement, the government of the Bahamas said the arrest came after officials received "formal notification from the United States that it has filed criminal charges against SBF and is likely to request his extradition."

This was confirmed by the U.S. Attorney for the Southern District of New York, Damian Williams, who said Bahamian officials arrested Bankman-Fried "at the request of the U.S. government, based on a sealed indictment." He added that the indictment will likely be unsealed on Tuesday morning, "and we will have more to say at that time."

On Nov. 11, FTX filed for bankruptcy after a run on deposits "exposed an $8 billion hole in the company's accounts," The New York Times writes. Bankman-Fried was soon being investigated by the Department of Justice and the Securities and Exchange Commission, with federal prosecutors in Manhattan looking into whether any laws were broken when FTX transferred billions of dollars to Alameda Research, a crypto hedge fund started and owned by Bankman-Fried.

Bankman-Fried made several public appearances after the bankruptcy filing, and at the recent DealBook Summit, he pinned FTX's collapse on "huge management failures." He had been scheduled to testify before a congressional committee on Tuesday.

While the cryptocurrency community has seen its recent share of problems, one famous techie is getting in on the ground floor.

Silicon Valley executive Tony Fadell revealed his newest product on Tuesday — a specialized wallet that can store crypto offline.

The 53-year-old Fadell was previously one of the highest-ranking executives at Apple, working under the company's late founder, Steve Jobs. During his decade at Apple, Fadell almost singlehandedly oversaw the creation of the company's portable music player, with Reuters calling him the "father of the iPod." He was also instrumental in the development of the first iterations of the iPhone.

His newest venture, though, is Stax, a cryptocurrency wallet created in partnership with French tech firm Ledger. The company is known for creating hardware wallets for digital assets, and Reuters noted that Fadell's product will allow users to trade crypto in a more secure environment.

"[The hope is] to have that iPod moment for digital assets," Fadell told WIRED. "You can't just integrate it into a phone, no matter how much you try. You need to have a real physical key in your life that holds the digital."

The product from one of the tech industry's early innovators comes amidst a watershed moment for crypto. Heightened scrutiny has been swirling around the digital currency following the recent pitfalls of a number of large crypto players. This includes the multi-billion crypto exchange FTX, which filed for bankruptcy after a total collapse.

It seems the market has been hit with a bit of a cryptocurrency crisis. Crypto exchange FTX recently filed for Chapter 11 bankruptcy, a towering fall from grace for a company once valued at $32 billion. The assets of thousands of customers were wiped out in an instant, and FTX founder Sam Bankman-Fried is now facing federal charges. Beyond this, the industry was just hit with another major loss, as one of crypto's top lending companies, BlockFi, has similarly filed for bankruptcy. The companies were preceded in similar bankruptcies this past summer by two other companies, Celsius and Voyager.

Given all of these events, is it still a good idea to invest in cryptocurrency? Or is it a market on the way out, whose demise has been in the works?

Cryptocurrency has been a poor option for a long time

Volatility in the crypto market is hardly a new concept, Taimur Hyat, COO of Prudential's asset management arm, writes for CNBC. "The most profound risks to cryptocurrency investing may still lie ahead, rather than in the rear-view mirror," he says, adding that investors looking to invest in cryptocurrency for the long term "should remain wary."

Hyat adds, "Despite all the hype about their being digital gold, cryptocurrencies have failed to demonstrate either 'safe haven' or inflation-fighting properties when faced with actual market volatility or the first real bout of serious inflation in developed markets." He noted that, between 2010 and 2022, Bitcoin had "29 episodes of drawdowns of 25% or more. By comparison, equities and commodities recorded just one each."

Hyat adds, "cryptocurrencies remain deeply problematic from an environmental, social, and governance perspective. Most troubling are the governance issues that have been highlighted by the FTX implosion."

Investing in cryptocurrency could have lasting negative effects

Allison Schrager, a Manhattan Institute fellow and economic opinion columnist for Bloomberg, writes that she'd "been rooting for the crypto market to crash and burn. Not because I never invested in it ... but because I don't understand it, what value it serves or what problem it solves."

Schrager also writes that "it doesn't seem that FTX.com or even the entire crypto market poses a systematic risk — by design, crypto is supposed to lie outside the traditional financial markets." Despite this, she believes "there are still reasons to worry about what the FTX situation portends for investors." Schrager believes the whole market is in trouble and people are losing money, and adds, "That's never good. It's especially worrying that many of the newest investors to crypto, the ones who bought high and watched it fall, tended to be lower-net-worth investors, some new to financial markets."

This opinion was echoed by noted economist Paul Krugman, who writes in an op-ed for The New York Times, "Recent events have made clear the need to regulate crypto ... but it also seems likely that the industry couldn't survive regulation." Krugman does note, though, that falling prices don't necessarily mean cryptocurrency is doomed, as assets fluctuate all the time. However, he adds, "Even if the value of Bitcoin doesn't go to zero (which it still might), there's a strong case that the crypto industry, which loomed so large just a few months ago, is headed for oblivion."

A similar warning was given in 2021 by economist Eswar Prasad, who tells CNBC in an interview, "Cryptocurrencies may contribute to monetary and financial instability, especially if they were to spawn a large and unregulated financial system that lacks investor protection." Prasad adds, "[Cryptocurrency] could end up worsening inequality" due to people having a poor sense of financial literacy, and that "any financial risks arising from investing in cryptocurrencies and related products might end up falling especially heavily on naïve retail investors."

Even with market volatility, investing in cryptocurrency is still a good option

However, even with the cryptocurrency market in its current state, USA Today columnist and investor Alex Kellogg writes that "the current turmoil represents a right-sizing of the space that will look more like a bump in the road in the long run." Despite the volatility of the industry, Kellogg adds that the actual promise of cryptocurrency "feels more real today than even a few years ago, and with some institutional investors getting on board, it seems unlikely that the entire ecosystem will collapse, even if a right-sizing was overdue."

In Kellogg's column, he also reaches out to Ariel Zetlin-Jones, the director of the Blockchain Initiative at Carnegie Mellon University's Tepper School of Business. Zetlin-Jones compares the cryptocurrency market to the early days of the digital age, and says it's "very reminiscent of the internet in the late 1990s. Lots of individual stocks and companies were over-valued and collapsed, but Amazon and Google are still around."

Cryptocurrency may be down, but it's not out

Even amid evidence that cryptocurrency is nearing its end, some people still believe it may have a heartbeat. Maria Bustilla, a journalist, blockchain expert, and founder of Popula, writes for The New York Times, "The crypto market is wildly volatile not because of cryptocurrency's underlying technology, but because of the uneasy and often dangerously unstable junction between emerging technologies and regular money," something that she says is not new.

However, Bustilla adds, even as cryptocurrency may be crashing, blockchain itself looks primed to live on. "Responsible players in the crypto market have been calling for and helping to develop sensible regulatory frameworks for many years," she says. "A bedrock of crypto regulations already exists."

Bustilla uses the example of the dawn of the internet age as a precursor to blockchain, writing, "Today's internet is deeply woven into the world's economies, media, politics, industry, and social life, in good ways and bad, [and] a similar evolution is in the works for crypto." She adds, "Blockchain, the technology that makes cryptocurrency possible, has the potential to be just as transformative as the internet innovations on which we depend every day."

In the post-FTX world, staffers at Forbes' investment brand Q.ai write that some crypto could be "more of a black swan event rather than the start of an era." However, Q.ai notes, as most other experts have, that investments are always risky. "The key takeaway remains the same — if an investment seems too good to be true, it is," Q.ai adds. "Investors who are bullish on crypto should still be cautious about investing too much of their savings into these volatile assets ... diversification is still the best strategy."

The story that the Silicon Valley investors who call themselves "venture capitalists" like to tell about themselves is that for decades they've been the engine of America's economic vitality. Blessed, they say, are the financiers, for without their investments in Apple way back when there would be no iPhone. Entrepreneurs who arrive in Silicon Valley are warned early on that while these investors are mouthing platitudes about innovation, they will also be rifling through your pockets. Most entrepreneurs try to keep them at arm's length, valuing their money more than their advice.

Silicon Valley's investors usually have impressive technical degrees, but their stock-in-trade is ultimately not technological innovation but financial engineering. This is why Silicon Valley loves "crypto," or digital currencies, so much. All the innovation was done for free; the only work left was taking in the profits. Those, of course, should come in what the crypto world liked to dismiss as "fiat" currency, also known as dollars.

That crypto edifice seems to be crumbling, speeded along by the implosion of the high-profile crypto exchange FTX and the humiliation of its wunderkind chieftain, Sam Bankman-Fried. Just one week after FTX declared bankruptcy, with billions in customer funds apparently gone, it so happens that Theranos founder Elizabeth Holmes was sentenced to 11 years in prison. That was also a black mark for Silicon Valley, but at least many of the highest-profile venture investors had quietly steered clear of the blood-testing company.

Not so with Bankman-Fried. He and his posse might have lived in a group house in the Bahamas, but he was a pure creature of Sand Hill Road, venture capital's epicenter. The investors saw a man after their own hearts, and jumped into what now looks like every other Ponzi scheme (Bankman-Fried even promised depositors 12 percent returns, same as Bernie Madoff). As with just about any high-class con, Sam Bankman-Fried's key selling point was "He's so smart. He doesn't need to rip anyone off." Not coincidentally, that's what Silicon Valley's financial engineers would have you believe about them, too.

This is the editor's letter in the current issue of The Week magazine.