People queue outside a vaccination center in Sydney on June 24, 2021, as residents were largely banned from leaving the city to stop a growing outbreak of the highly contagious Delta Covid-19 variant spreading to other regions.
SAEED KHAN | AFP | Getty Images
The “delta variant” has come to dominate headlines, having been discovered in India where it provoked an extreme surge in Covid-19 cases before spreading around the world.
But now a mutation of that variant has emerged, called “delta plus,” which is starting to worry global experts.
India has dubbed delta plus a “variant of concern,” and there are fears that it could potentially be more transmissible. In the U.K., Public Health England noted in its last summary that routine scanning of Covid cases in the country (where the delta variant is now responsible for the bulk of new infections) has found almost 40 cases of the newer variant, which has acquired the spike protein mutation K417N, i.e. delta plus.
It noted that, as of June 16, cases of the delta plus variant had also been identified in the U.S. (83 cases at the time the report was published last Friday) as well as Canada, India, Japan, Nepal, Poland, Portugal, Russia, Switzerland and Turkey.
As is common with all viruses, the coronavirus has mutated repeatedly since it emerged in China in late 2019. There have been a handful of variants that have emerged over the course of the pandemic that have changed the virus’s transmissibility, risk profile and even symptoms.
Several of those variants, such as the “alpha” strain (previously known as the “Kent” or “British” variant) and then the delta variant, have gone on to be dominant strains globally, hence the attention on delta plus.
India’s Health Ministry reportedly said Wednesday that it had found around 40 cases of the delta plus variant with the K417N mutation. The ministry released a statement on Tuesday in which it said that INSACOG, a consortium of 28 laboratories genome sequencing the virus in India during the pandemic, had informed it that the delta plus variant has three worrying characteristics.
These are, it said: increased transmissibility, stronger binding to receptors of lung cells and the potential reduction in monoclonal antibody response (which could reduce the efficacy of a lifesaving monoclonal antibody therapy given to some hospitalized Covid patients).
India’s Health Ministry said it had alerted three states (Maharashtra, Kerala and Madhya Pradesh) after the delta plus variant was detected in genome-sequenced samples from those areas.
The detection of a variation to the delta variant largely blamed for India’s catastrophic second wave of cases has stoked fears that India is ill-prepared for a potential third wave. But some experts are urging calm.
Dr. Chandrakant Lahariya, a physician-epidemiologist and vaccines and health systems expert based in New Delhi, told CNBC on Thursday that while the government should remain alert to the progress of the variant, there is “no reason to panic.”
“Epidemiologically speaking, I have no reason to believe that ‘Delta plus’ alters the current situation in a manner to accelerate or trigger the third wave,” he told CNBC via email.
“If we go by the currently available evidence, Delta plus is not very different from Delta variant. It is the same Delta variant with one additional mutation. The only clinical difference, which we know till now, is that Delta plus has some resistance to monoclonal antibody combination therapy. And that is not a major difference as the therapy itself is investigational and few are eligible for this treatment.”
He advised the public to follow Covid restrictions and to get vaccinated as soon as possible. Analysis from Public Health England released last week showed that two doses of the Pfizer–BioNTech or Oxford-AstraZeneca Covid-19 vaccines are highly effective against hospitalization from the delta variant.
The WHO has said it is tracking recent reports of a “delta plus” variant. “An additional mutation … has been identified,” Maria Van Kerkhove, WHO’s Covid-19 technical lead said at a briefing last week.
“In some of the delta variants we’ve seen one less mutation or one deletion instead of an additional, so we’re looking at all of it.”
Musk’s SpaceX Starship complex, high risk
Billionaire American businessman Jeff Bezos walks with Blue Origin’s President and CEO Bob Smith after Bezos flew on the company’s inaugural flight to the edge of space, in the nearby town of Van Horn, Texas, U.S. July 20, 2021.
Joe Skipper | Reuters
Jeff Bezos’ space company remains on the offensive in criticizing NASA’s decision to award Elon Musk’s SpaceX with the sole contract to build a vehicle to land astronauts on the moon, despite the government last week denying Blue Origin’s protest.
In an infographic published on Blue Origin’s website and seen on Wednesday, the company called SpaceX using Starship to transport NASA astronauts to the lunar surface an “immensely complex & high risk” approach. Blue Origin is referring to a criticism that NASA officials made in evaluating Starship for the lunar lander program.
“There are an unprecedented number of technologies, developments, and operations that have never been done before for Starship to land on the Moon,” Blue Origin wrote.
Last Friday, the U.S. Government Accountability Office denied Blue Origin’s protest of NASA awarding SpaceX with a $2.9 billion contract under the Human Landing System program. In three one-page documents, Blue Origin decried NASA’s decision as “wrong for America’s leadership in space” and repeated its prior critique that the space agency “ran an inconsistent and unfair competition” — even though the congressional watchdog ruled that NASA did not.
“NASA ran a flawed acquisition and ignored the significant risks of a one provider model,” Blue Origin wrote.
The company wants NASA to award a second contract under the original Human Landing System acquisition structure. While NASA has said it would offer future contracts under HLS through Lunar Exploration Transportation Services awards, those contracts are expected to be $45 million or less each.
Starship prototype rocket SN15 launches from Boca Chica, Texas.
Starship prototype rocket SN15 touches down on the company’s landing pad on May 5, 2021, in Boca Chica, Texas.
Blue Origin made additional technical comparisons, noting that SpaceX’s plan requires more than 10 Starship launches to land once on the moon and needs to be refueled in orbit, “a process that has also never been done before.”
Lastly, Blue Origin compared the height of the astronaut exit hatches. Starship’s exit is 126 feet off the ground, and conceptually uses an elevator to bring astronauts to the surface, while the Blue Origin lander is 32 feet off the ground and requires crew drop down a long ladder.
One comparison that Blue Origin did not make was in regard to cost. NASA cited cost as a major factor in its decision to only select one winner under the Human Landing System, due to Congress granting the agency a fraction of its requested budget for the program. SpaceX bid $2.9 billion, while Blue Origin was roughly double at $5.99 billion.
In the first round of Human Landing System contracts, NASA handed out nearly $1 billion in concept development awards – with SpaceX receiving $135 million, Dynetics getting $253 million, and Blue Origin receiving $579 million.
A mockup of the crew lander vehicle at NASA’s Johnson Space Center in August 2020.
Bezos originally unveiled a lunar lander called Blue Moon in May 2019, before pivoting the next year to partner with Lockheed Martin, Northrop Grumman and Draper on a different concept for the Human Landing System. While the company has not tested any spacecraft in orbit, its partners have — a point Blue Origin emphasized by saying that its lunar lander “system is entirely built on heritage systems and proven technologies that are flying today.”
For its part, Blue Origin leverages the rocket engine and landing technologies its honed with its suborbital space tourism rocket New Shepard over the course of 16 flights.
Blue Origin also emphasized that its approach was simpler than SpaceX’s, as Bezos’ lander “only requires three launches” and has “far fewer in-space rendezvouses.”
IRS has seized $1.2 billion worth of cryptocurrency this year
FBI agents finish loading materials into a truck out of the home of United Auto Workers President Gary Jones on Wednesday, Aug. 28, 2019.
Michael Wayland / CNBC
In June, the U.S. government casually auctioned off some spare litecoin, bitcoin and bitcoin cash.
Lot 4TQSCI21402001 — one of 11 on offer over the four-day auction — included 150.22567153 litecoin and 0.00022893 bitcoin cash, worth more than $21,000 at today’s prices. The crypto property had been confiscated as part of a tax noncompliance case.
This kind of sale is nothing new for Uncle Sam. For years, the government has been seizing, stockpiling and selling off cryptocurrencies, alongside the usual assets one would expect from high-profile criminal sting operations.
“It could be 10 boats, 12 cars, and then one of the lots is X number of bitcoin being auctioned,” explained Jarod Koopman, director of the IRS’ cybercrime unit.
Koopman’s team of IRS agents don’t fit the stereotypical mold. They are sworn law enforcement officers who carry weapons and badges and who execute search, arrest and seizure warrants. They also bring back record amounts of cryptocash.
“In fiscal year 2019, we had about $700,000 worth of crypto seizures. In 2020, it was up to $137 million. And so far in 2021, we’re at $1.2 billion,” Koopman told CNBC. The fiscal year ends Sept. 30.
As cybercrime picks up — and the haul of digital tokens along with it — government crypto coffers are expected to swell even further.
Interviews with current and former federal agents and prosecutors suggest the U.S. has no plans to step back from its side hustle as a crypto broker. The crypto seizure and sale operation is growing so fast that the government just enlisted the help of the private sector to manage the storage and sales of its hoard of crypto tokens.
The 2013 takedown of Silk Road — a now-defunct online black market for everything from heroin to firearms — is where federal agents really cut their teeth in crypto search and seizure.
“It was totally unprecedented,” said Sharon Cohen Levin, who worked on the first Silk Road prosecution and spent 20 years as chief of the money laundering and asset forfeiture unit in the U.S. Attorney’s Office for the Southern District of New York.
Silk Road, which operated on the dark web, dealt entirely in bitcoin. It was good for users, because it promised them some degree of anonymity. Despite the reputational hit, it was good for bitcoin at the time, helping to pump up its price by giving the token a use case beyond programming circles.
When the government began to dismantle Silk Road, federal agents had to figure out what to do with all the ill-gotten bitcoin.
“There was a wallet with approximately 30,000 bitcoin in it, which we were able to identify and seize. At the time, it was probably the largest bitcoin seizure ever, and it sold for around $19 million,” said Levin.
“No one had ever done anything like it. In fact, there weren’t really companies that you could go to in order to sell the assets. The Marshals Service stepped up and conducted their own auction of the assets where they took bids,” she said.
That bitcoin batch went to billionaire venture capitalist Tim Draper. “It seemed like a large sum of money at the time, but if the government had retained those bitcoins, it would be worth way more today.”
The cache of coins sold in 2014 would be worth more than $1.1 billion as of Wednesday morning. But hindsight is 20/20, and the government isn’t in the business of playing the crypto markets.
What this entire exercise did accomplish, however, was to establish a workflow that remains in place today, one that uses legacy crime-fighting rails to deal with tracking and seizing cryptographically built tokens, which were inherently designed to evade law enforcement.
“I’ve just observed that the government is usually more than a few steps behind the criminals when it comes to innovation and technology,” said Jud Welle, a former federal cybercrime prosecutor of 12.5 years.
“This is not the kind of thing that would show up in your basic training. But I predict within three to five years … there will be manuals edited and updated with, ‘This is how you approach crypto tracing,’ ‘This is how you approach crypto seizure,'” Welle said.
“‘Follow the money’ is not new. Seizure is not new. What we’re just doing is trying to find a way to apply these tools and techniques to a new fact pattern, a new use case,” he said.
There are three main junctures in the flow of bitcoin and other cryptocurrencies through the criminal justice system in the U.S.
The first phase is search and seizure. The second is the liquidation of raided crypto. And the third is deployment of the proceeds from those crypto sales.
In practice, that first stage of the process is a group effort, according to Koopman. He said his team often works on joint investigations alongside other government agencies — think government arms such as the Federal Bureau of Investigation, Homeland Security, the Secret Service, the Drug Enforcement Agency, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
“A lot of cases, especially in the cyber arena, become … joint investigations, because no one agency can do it all,” said Koopman, who worked on the two Silk Road cases and the 2017 AlphaBay investigation, which culminated in the closure of another popular and massive dark web marketplace.
Koopman explained that his division at the IRS typically handles crypto tracing and open source intelligence, which includes investigating tax evasion, false tax returns, and money laundering. Other agencies that have more money and resources focus on the technical components.
“Then we all come together when it’s time to execute any type of enforcement action, whether that’s an arrest, a seizure or a search warrant. And that could be nationally or globally,” he said.
During the seizure itself, multiple agents are involved to ensure proper oversight. That includes managers who establish the necessary hardware wallets to secure the seized crypto. “We maintain private keys only in headquarters so that it can’t be tampered with,” Koopman said.
Once a case is closed, the U.S. Marshals Service is the main agency responsible for auctioning off the government’s crypto holdings. To date, it has seized and auctioned more than 185,000 bitcoins. That cache of coins is currently worth nearly $7 billion, though many were sold in batches well below today’s price.
It’s a big responsibility for one government entity to take on, which is part of why the Marshals Service no longer shoulders the task alone.
The U.S. General Services Administration, an agency that typically auctions surplus federal assets such as tractors, added confiscated cryptocurrencies to the auction block earlier this year.
And just last week, following a more than yearlong search, the Department of Justice hired San Francisco-based Anchorage Digital to be its custodian for the cryptocurrency seized or forfeited in criminal cases. Anchorage, the first federally chartered bank for crypto, will help the government store and liquidate this digital property. The contract was previously awarded to BitGo.
“The fact that the Marshals Service is getting professionals to help them is a good sign that this is here to stay,” said Levin.
The process of auctioning off crypto, in blocks, at fair market value, likely won’t change, according to Koopman. “You basically get in line to auction it off. We don’t ever want to flood the market with a tremendous amount, which then could have an effect on the pricing component,” he said.
But other than spacing out sales, Koopman said, trying to “time” the market to sell at peak crypto prices isn’t a thing. “We don’t try to play the market,” he said.
In November, the government seized $1 billion worth of bitcoin linked to Silk Road. Because the case is still pending, those bitcoins are sitting idle in a crypto wallet. Had the government sold its bitcoin stake when the price of the token peaked above $63,000 in April, coffers would have been a whole lot bigger than if they liquidated at today’s price.
Once a case is closed and the crypto has been exchanged for fiat currency, the feds then divvy the spoils. The proceeds of the sale are typically deposited into one of two funds: The Treasury Forfeiture Fund or the Department of Justice Assets Forfeiture Fund.
“The underlying investigative agency determines which fund the money goes to,” Levin said.
Koopman said the crypto traced and seized by his team accounts for roughly 60% to 70% of the Treasury Forfeiture Fund, making it the largest individual contributor.
Once placed into one of these two funds, the liquidated crypto can then be put toward a variety of line items. Congress, for example, can rescind the money and put that cash toward funding projects.
“Agencies can put in requests to gain access to some of that money for funding of operations,” said Koopman. “We’re able to put in a request and say, ‘We’re looking for additional licenses or additional gear,’ and then that’s reviewed by the Executive Office of Treasury.”
Some years, Koopman’s team receives varying amounts based on the initiatives proposed. Other years, they get nothing because Congress will choose to rescind all the money out of the account.
Tracking where all the money goes isn’t a totally straightforward process, according to Alex Lakatos, a partner with DC law firm Mayer Brown, who advises clients on forfeiture.
The Justice Department hosts Forfeiture.gov, which offers some optics on current seizure operations. This document, for example, outlines a case from May where 1.04430259 bitcoin was taken from a hardware wallet belonging to an individual in Kansas. Another 10 were taken from a Texas resident in April. But it is unclear whether it is a comprehensive list of all active cases.
“I don’t believe there’s any one place that has all the crypto that the U.S. Marshals are holding, let alone the different states that may have forfeited crypto. It’s very much a hodgepodge,” said Lakatos. “I don’t even know if someone in the government wanted to get their arms around it, how they would go about doing it.”
CNBC reached out to the U.S. Marshals to ask whether they have a central database that outlines all active and past crypto seizure cases. We also asked whether there is a centralized forum to track where the proceeds of crypto auctions end up. We did not immediately hear back.
But what does appear clear is that more of these crypto seizure cases are being trumpeted to the public, like in the case of the FBI’s breach of a bitcoin wallet held by the Colonial Pipeline hackers earlier this spring.
“In my experience, folks that are in these positions in high levels of government, they may be there for a short period of time, and they want to get some wins under their belt,” said Welle.
“This is the kind of thing that definitely captures the attention of journalists, cybersecurity experts, right, a lot of chatter around it.”
Here’s what billionaire Ray Dalio thinks
For Ray Dalio, bitcoin is like a digital version of gold — but the billionaire clearly values one higher than the other.
“If you put a gun to my head, and you said, ‘I can only have one,'” says Dalio. “I would choose gold.”
Dalio, who turns 72 on Sunday, revealed in May that he owns an undisclosed amount of bitcoin, after previously raising concerns about cryptocurrencies for years. Still, he isn’t completely sold on the concept.
“I own a very small amount of bitcoin. I’m not a big owner,” Dalio now tells CNBC Make It. “There are certain assets that you want to own to diversify the portfolio, and bitcoin is something like a digital gold.”
In 2017, Dalio stepped down as co-CEO of Bridgewater Associates after building his company into the world’s largest hedge fund. He now serves as Bridgewater’s chairman and co-chief investment officer, and reemerged into the entrepreneurial world last year by launching Principles, a people management software startup.
He has long been a bit of a gold bull: In 2019, he wrote on LinkedIn that adding gold can help balance one’s portfolio because it is both risk-reducing and return-enhancing. Last year, Bridgewater poured more than $400 million into gold during the second quarter.
Globally, central banks currently hold more than 35,000 metric tons of gold, about a fifth of all gold ever mined, according to Reuters. Typically central banks hold gold to diversify their reserves — and since gold is a finite physical commodity, it is a natural hedge against inflation.
Bitcoin can also help hedge against inflation, as Dalio himself told Coindesk in May. But if forced to choose between gold and bitcoin, he says he’d pick gold due to its long history as a “storehold of wealth,” meaning an asset that can be held and converted into money at a relatively similar rate as its purchase price.
In other words, bitcoin’s volatility is a concern for Dalio — and not his only one.
In Dalio’s mind, there is “a reasonable chance” that bitcoin could eventually be outlawed by the federal government. The nearly century-old precedent: In 1934, President Franklin D. Roosevelt signed the Gold Reserve Act, transferring all of the country’s privately held gold titles and certificates to the United States Department of Treasury.
At the time, the U.S. adhered to the gold standard; Roosevelt hoped to boost the country’s economy coming out of the Great Depression by devaluing the dollar. Any major economic downturn or inflationary event, Dalio told Yahoo Finance in March, could prompt similar action on bitcoin and other cryptocurrencies from federal governments across the world.
He’s not alone. Federal Reserve chair Jerome Powell isn’t a fan of cryptocurrencies either, calling them “vehicles for speculation” in April. Powell also compared cryptocurrencies to gold, noting that humans have long given gold “a special value that it doesn’t have.”
In recent months and years, many financial experts have warned of cryptocurrency’s volatility, recommending that people only invest money they can afford to lose. For Dalio, bitcoin is only one small piece of his larger investment puzzle. “I just think of it as diversification,” he says. “By and large, I don’t really know whether bitcoin is going to go up or down. I could argue both sides of that.”
The key, he says, is to continually reevaluate those investments — and avoid buying more of an asset like bitcoin just because it’s temporarily performing well. “Be careful about what you’re putting your money in,” he says. “And make the diversification global, not just in the United States.”
As of Wednesday afternoon, one bitcoin is valued at roughly $39,000, down from its mid-April high of around $63,000, according to cryptocurrency tracker Coindesk. An ounce of gold is currently worth $1,800, up slightly from $1,776 over the same period.
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