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Overall bitcoin-related crime fell last year, but one type of crypto hack is booming



Cryptocurrency-related crime fell last year to a small fraction of overall trading volume. But some targeted hacks boomed as criminals exploited people working from home during the pandemic.

Last year, illicit activity made up 0.34% of all cryptocurrency transaction volume, according to a report from blockchain data firm Chainalysis. That was down from roughly 2% a year earlier.

“We saw a significant decrease in the share of overall activity associated with illicit entities,” Kim Grauer, head of research at Chainalysis, told CNBC. “Still, ransomware was by far the biggest category in terms of activity growth and we’re seeing an all time high for dark-net market activity.”

Ransomware is malicious software hackers use to infect a computer, then demand a fee to unlock it. That bounty is often paid in bitcoin, or other cryptocurrencies.

The category made up just 7% of all crypto funds received by criminals, but increased by 311% year over year. Chainalysis pointed to more people working from home as a new vulnerability for companies — and an opportunity for criminals.

Dark net markets were the second-largest crime category, accounting for $1.7 billion worth of cryptocurrency activity — a roughly 30% increase from a year earlier. Also known as the dark web, the dark net is a network that uses the internet, but requires specific software and authorizations to access.

Chainalysis crypto-crime report


Source: Chainalysis
Criminals have turned to cryptocurrencies such as bitcoin for their ease of sending online instantly.

Cryptocurrencies are also pseudonymous. You can see where funds were sent, making it easy for firms like Chainalysis to track. But you can’t see who sent them.

Those features have caught the attention of regulators who fear crypto’s potential role in money laundering and terrorist financing.

President Biden’s Treasury Secretary nominee, Janet Yellen, mentioned the potential for misuse in her confirmation hearing this week, which analysts say weighed on bitcoin prices. The U.S. government needs to “look closely at how to encourage their use for legitimate activities,” while “curtailing their use for malign and illegal activities,” Yellen said.

Scams still made up more than half of all cryptocurrency-related crimes, but fell significantly year over year.

Chainlysis’ Grauer said that was due to more awareness of events like the PlusToken Ponzi scheme, which took more than $2 billion from victims in 2018.

“People learned a little bit following the ‘get-rich-quick’ mentality two years ago,” Grauer said. “That may have caused people to wise up on some of these really big Ponzi schemes.”

Bitcoin has taken off as a mainstream, Wall Street investment in recent months. The world’s largest cryptocurrency topped $40,000 in early January, boosted by interest from institutions and retail investors, who are now able to buy bitcoin through payment companies like PayPal.

The cryptocurrency fell below $30,000 on Thursday.

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NBA Commissioner Adam Silver supports new league that pays high schoolers $100,000



National Basketball Association commissioner Adam Silver is supportive of the new high school league that pays young players at least $100,000.

Silver spoke to media this weekend to provide his annual update on the NBA, a day before it hosts the 2021 All-Star game in Atlanta. The NBA boss discussed media company Overtime’s new basketball league (Overtime Elite) for 16-18-year-olds.

“I think it’s generally good for the community to have optionality, especially when very solid people, which appears to be the case in [OTE], are backing it and behind it,” Silver said. “That’s one thing we will pay a lot of attention to because those players are potentially the future of our league.”

On Thursday, OTE announced it would be starting in September and pay up to 30 players at least $100,000 if they decide to join. The league is backed by Overtime investors including NBA stars Kevin Durant and Carmelo Anthony, and venture capital firm Andreessen Horowitz.

Silver said he has “no opposition to paying young people” on a different path to becoming pro and skipping the NCAA.

An Overtime logo on a basketball court

Source: Overtime

“We created team Ignite in the G League as an opportunity for players who choose not to go to college and want to become professionals,” Silver said. “They can go directly into the G League and be well compensated.”

The NBA requires a player to be age 19 before entering the league. The Ignite program was created for individuals who decide to skip college but are not yet eligible. Ignite players are paid roughly $200,000 to $500,000 while they await eligibility. Silver said the NBA could change its rule around eligibility in the next collective bargaining agreement, but for now, the NBA will monitor OTE.

“It’s good for the game,” Silver said. “It’s more focus on the game, especially with all that’s happening right now in digital media; social media, new streaming services. There’s definitely interest in this content, so we’re paying attention to that.”

Back to regular business in the fall

On the call, Silver also mentioned the NBA anticipates a return to its regular schedule for the 2021-22 season with full arenas. The NBA reduced its schedule to 72 games this season due to Covid-19 impacts but wants to return to an 82-game season.

“The plan remains to try to resume our season as close to normal as possible next year,” Silver said, adding he’s “fairly optimistic” the league will start in October. “If vaccines continue on the pace they are and continue to be as effective as they have been against the virus and its variants, we’re hopeful that we’ll have relatively full arenas next season as well.”

NBA Commissioner Adam Silver

Stacy Revere | Getty Images

Asked by CNBC to provide a financial update on the NBA, which nearly a year ago suspended games due to the pandemic, Silver was optimistic. He said the league is “fortunate to be working under these circumstances” though its missing 40% of its revenue with fans still limited.

“The long-term health of the league is very solid,” Silver said. “Between last year and this year, we’re looking at considerable losses. I generally don’t talk about that publicly because teams are largely privately held, and we’re not suggesting that’s anybody else’s issue but ours.

“But last season and this season has required a significant investment on the part of the team owners – they accept that,” Silver continued. “Players will end up taking a reduction in salary this season because they are partners with teams and the league on revenue.”

The NBA missed revenue projections by $1.5 billion due to Covid-19, according to the Associated Press. But by resuming its games last July and concluding its 2020-21 campaign, it fought off massive losses. Should it resume normal operations for 2021-22, Silver said all NBA players would not require vaccinations.

“I don’t see every player needing to get vaccinated as an impediment to fans returning to the arena,” Silver said. “No more do I think the fact that every fan won’t be vaccinated is an impediment to fans coming back in the arena.”

Men walk past a poster at an NBA exhibition in Beijing, China October 8, 2019.

Jason Lee | Reuters

NBA-China business update

Asked about the NBA’s affairs in China, Silver suggested its business as usual.

“Our business has continued there,” Silver said. “We have hundreds of millions of fans in China, and we see it as our business to serve those fans.”

NBA team executive Daryl Morey’s 2019 Twitter comments supporting Hong Kong protesters started the rift with China. Morey’s action led to China suspending NBA games on CCTV, and streaming platform Tencent also restricted NBA content. The media companies returned NBA games during the Finals.

During the 2020 All-Star game, Silver initially suggested the feud could result in a $400 million loss. The NBA valued its business in China at over $5 billion following a $1.5 billion media rights agreement with Tencent in 2019.

“Our values remain the same, and our business continues,” Silver said. “And it’s largely the business of exporting American basketball and the culture that comes with it to China.”

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U.S. coronavirus relief package, currency moves, oil



Vehicles are reflected in a window as electronic boards display stock information at the Australian Securities Exchange, operated by ASX.

Lisa Maree | Bloomberg | Getty Images

SINGAPORE — Asia-Pacific markets were set to trade higher Monday as investors reacted to last week’s U.S. jobs report that trounced expectations and fueled hopes for a faster economic recovery.

Australian shares opened in the green. The benchmark ASX 200 climbed 1.73% in early trade as all sectors traded higher, with the heavily-weighted financials subindex adding 1.83%. Major banking and mining stocks rose: Shares of Commonwealth Bank jumped 1.86% while Rio Tinto added 2.54%, Fortescue was up by 2.49% and BHP gained 2.57%.

Nikkei futures pointed to opening gains in Japan.

Monday’s session in Asia-Pacific is set to follow a wild day in U.S. markets last Friday, where stocks roared back from a sharp sell-off as a stronger-than-expected nonfarm payrolls report improved optimism for a quicker economic recovery.

“Investors remain wary of the impact that the massive Biden fiscal experiment will have on longer-term interest rates, making for a fragile equity environment,” analysts at ANZ Research said in a morning note on Monday. “That defensiveness may prevail into the mid-March (Federal Open Market Committee) meeting.”

U.S. relief package

The U.S. Senate passed a $1.9 trillion coronavirus relief package over the weekend that includes direct payments of up to $1,400 to most Americans. The bill is expected to pass in the Democratic-held House this week and sent to President Joe Biden for his signature before a March 14 deadline to renew unemployment aid programs.

Last month, Fed Chair Jerome Powell told lawmakers that the U.S. economy was a long way from its employment and inflation goals and that it will likely take time for substantial further progress to be achieved. He said that inflation is still “soft” and that the Fed was committed to current policy, which implied interest rates are likely to remain low for now.

Currencies and oil

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Stock futures jump after Senate passes $1.9 trillion Covid relief bill, Dow futures up 200 points



Traders work on the floor of the New York Stock Exchange.


U.S. stock futures jumped on Sunday evening as a new stimulus package from Washington headed toward final passage this week.

Futures contracts tied to the Dow Jones Industrial Average jumped 219 points, or 0.7%. Those for the S&P 500 and the Nasdaq 100 composite gained 0.5% and 0.6%, respectively.

The move in futures came after the Senate passed a $1.9 trillion economic relief and stimulus bill on Saturday, paving the way for extensions to unemployment benefits, another round of stimulus checks and aid to state and local governments. The Democrat-controlled House is expected to pass the bill later this week. President Joe Biden is expected to sign it into law before unemployment aid programs expire on March 14.

The fresh round of government spending could cause ripples in the U.S. Treasury market, where the benchmark 10-year yield has risen sharply in recent weeks. The yield rose as high as 1.62% on Friday after starting the calendar year below the 1% mark.

The rapid move in the bond marked has unnerved equity investors as well, contributing to weakness in stocks with high valuations.

Futures contracts tied to the 10-year fell 0.2% on Sunday night at the open of trading, implying higher yields.

“10-year yields finally caught up to other asset markets. This is putting pressure on valuations, especially for the most expensive stocks that had reached nosebleed valuations,” Mike Wilson, the chief U.S. equity strategist at Morgan Stanley, said in a note.

The stock market is coming off an afternoon rally on Friday that took some of the sting out of a rough week for high-flying momentum names. The tech-heavy Nasdaq finished with a week-to-date loss of 2.1%, while the S&P 500 gained 0.8%. The Dow, more reliant on cyclical stocks, rose 1.8%.

The Friday turnaround doesn’t signal that the recent weakness for the market is over, but the divergence between tech and cyclical plays shows that the bullish story remains intact, Morgan Stanley’s Wilson said.

“The bull market continues to be under the hood, with value and cyclicals leading the way. Growth stocks can rejoin the party once the valuation correction and repositioning is finished,” Wilson said.

On the economic front, investors will get a look at wholesale inventory data from January on Monday. Several economic measures in recent weeks have shown a recovery that is picking up steam, including a better-than-expected February jobs report released on Friday.

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