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Good morning. Here’s what’s happening:
Prices: Bitcoin slumped to its lowest point since late June, dipping below $29,700, before making a partial recovery.
Insights: Jarek Jakubcek, the Head of Law Enforcement Training at Binance, actively combats global cryptocurrency scams by providing comprehensive training to law enforcement officials on effective detection and prevention methods.
Prices
|
$30,167
−66.8 ▼ 0.2%
|
$1,915
−5.8 ▼ 0.3%
|
1,265
−2.9 ▼ 0.2%
|
|
S&P 500
4,522.79
+17.4 ▲ 0.4%
|
Gold
$1,958
−1.7 ▼ 0.1%
|
Nikkei 225
32,391.26
−28.1 ▼ 0.1%
|
BTC/ETH prices per CoinCryptoUs, as of 7 a.m. ET (11 a.m. UTC)
Bitcoin Recovers $30K
The euphoria that ensued after Ripple achieved a partial triumph over the SEC in a recent court ruling last week quickly faded, as bitcoin plummeted to $29,769 on Monday, marking its lowest point since late June.
However, the dominant cryptocurrency in terms of market capitalization managed to recover some of its losses and is currently trading at $30,130, showing little change in the past 24 hours. This price level has been its range for a significant portion of the previous month. Bitcoin experienced a surge above $31,700 last Thursday following a ruling by the U.S. District Court of the Southern District of New York, which stated that Ripple's distribution of XRP tokens via exchanges and algorithms did not qualify as investment contracts.
Analysts posit that bitcoin could face further downward fluctuations below the said threshold until the Securities and Exchange Commission (SEC) renders a verdict on the approval of any of the several spot bitcoin ETF applications submitted by major financial institutions, including BlackRock, last month. The filing of these applications ignited a notable upswing in BTC and other digital currencies in mid-June, as they yearned for a decisive factor to bolster their prices.
However, due to the SEC's consistent rejection of several spot BTC applications in the last couple of years, it is improbable that the agency will take action in the coming months. The SEC has a history of making decisions at a leisurely pace, and currently, they are still in the process of gathering information regarding the proposals.
"There's a continued focus solely on U.S. (ETFs)," Edward Moya, senior market analyst for foreign exchange market maker Oanda, said in a phone interview with CoinDesk. "People are not going to be as optimistic until we get a further update that we're going to get that ETF done in the States."
He added: "We may see a lot of back and forth before we get that firm sign-off (from the SEC)."
Ether, the second largest cryptocurrency in terms of market value, was trading at $1,913, a decrease of nearly half a percent compared to Sunday, and significantly lower than its peak last week above $2,000. Similarly, other major cryptocurrencies, which experienced significant growth last week, showed a decline on Monday before experiencing a slight recovery. XRP and ADA, the tokens of the Cardano smart contracts platform, saw a decrease of 1.5% and 0.6%, respectively, while SOL, the native cryptocurrency of the Solana blockchain, experienced a decline of over 2.8%.
The equity markets experienced a boost following the positive second quarter earnings reported by several major banks last week. This resulted in a slight increase in the Nasdaq Composite and S&P 500, with gains of 0.9% and 0.3% respectively. On Tuesday and Wednesday, Bank of America and Goldman Sachs are set to announce their Q2 results, adding further anticipation to the market.
In an email early Monday, Moya noted "some progress in small crypto companies finding banks that can help facilitate transactions, as Customers Bancorp has emerged as the winner from the downfall of Signature Bank and Silvergate Capital Corp."
"Bitcoin’s range of $29,500 and $31,500 may hold until we get a major crypto headline," he added.
| Asset | Ticker | Returns | DACS Sector |
|---|---|---|---|
| Gala | GALA | +13.3% | Entertainment |
| Chainlink | LINK | +9.7% | Computing |
| Terra | LUNA | +3.5% | Smart Contract Platform |
| Asset | Ticker | Returns | DACS Sector |
|---|---|---|---|
| Stellar | XLM | −2.5% | Smart Contract Platform |
| Solana | SOL | −1.6% | Smart Contract Platform |
| XRP | XRP | −1.1% | Currency |
Insights
Petty Crooks Moving from TradFi to DeFi, Fake Law Enforcement Subpoenas, and Dodging Politically Sensitive Requests: a Day in the Life of Binance’s Jarek Jakubcek
Jarek Jakubcek, the head of Binance Law Enforcement Training and a former cryptocurrency specialist in Europol Cybercrime Centre's (EC3) Dark Web team, never experiences a dull moment.
Jakubcek, headquartered in Dubai, oversees global operations, with a particular focus on the Asia Pacific region. This region has witnessed a remarkable surge in retail cryptocurrency adoption, alongside a rise in malicious actors and fraudulent activities.
"Cryptocurrencies, as practical technology, are basically bound to be abused by criminals because it is convenient and because it is practical," he said.
Jakubcek dedicates a significant portion of his time to providing law enforcement training across the region on the acquisition of evidence and the pursuit of perpetrators involved in these schemes. It is noteworthy that these wrongdoers frequently overlap with those found in conventional financial crimes, specifically operating scam centers in Southeast Asia.
“We all know that there is no such thing as high guaranteed profits. But to many people who are more financially naive, this may sound like a reasonable proposition,” he explains. “This is why it is really important to promote crypto literacy and raise awareness of the potential risk connected with cryptocurrencies.”
Years of investigations
Over the years, law enforcement has been actively investigating crypto crimes and has achieved considerable operational success, primarily due to the inherent transparency of blockchain technology.
In addition to its user-friendly nature, which unfortunately extends to criminals, this technology proves advantageous for investigators due to the transparent nature of on-chain activity, unlike the concealed trails within bank records and shell corporations.
In many cases, it is often more efficient to trace wallets back to cryptocurrency exchanges and request KYC (Know Your Customer) data rather than relying on tracing IP addresses to telecommunications companies due to the widespread use of VPNs and other methods of concealing connections.
Although Jakubcek dedicates a significant amount of his time collaborating with legitimate law enforcement agencies worldwide, his team occasionally encounters deceptive inquiries. These requests do not always involve malicious individuals, but rather private investigators attempting to impersonate police officers in order to gather additional information for their clients.
Not satisfied with Binance's initial refusal to disclose customer data to a private individual, the private investigator, Jakubcek, resorted to a more cunning approach. He decided to send a second request, but this time using a fabricated domain name.
“It was not the usual law enforcement domain, so we checked the domain, and we discovered it was registered one day prior to the request,” Jakubcek said. “It was kind of obvious that the private investigator wanted to pretend to be something that he was not.”
Fake court orders and political problems
His team has also encountered fraudulent court orders requesting fund transfers, which pose another challenge.
“We are very lucky to have a team of almost 30 ex-law enforcement people, because we know how law enforcement requests should look like," he said.
Operating in numerous markets worldwide, global companies such as Binance inevitably encounter the complexities of geo-politics, making it challenging to avoid their impact.
Law enforcement requests can occasionally clash with the national interests of different countries. As an example, in 2020 and 2021, the United States imposed a series of sanctions on prominent individuals within Hong Kong's political leadership and law enforcement. These measures were taken in response to their involvement in undermining Hong Kong's autonomy and enforcing a contentious national security law, which sparked widespread controversy.
There is still no definitive answer on how Binance effectively manages a lawful request from law enforcement within the boundaries of local regulations while considering conflicting global interests.
"There are jurisdictions with which we have to be sensitive; we also have to consider the nature of the crime, and who is the target of inquiry. For some of the requests, if the individuals are of sensitive nationality, then we are not responding,” he said.
So far, from Hong Kong, Jakubcek says that 90% of the requests are “purely fraud related.”
“Personally, I don’t remember any politically sensitive requests coming from Hong Kong,” he said. “I’m not saying there hasn’t been any, but in my investigations career in APAC, I don’t remember it happening.”
