Cryptocurrency

Trump to sign stablecoin bill that may make it easier to bribe the president

anti-cbdc bill, cbdc, central bank digital currency, clarity act, Cryptocurrency, digital assets, Donald Trump, genius act, Policy, stablecoins / Mike M. / July 18, 2025

Donald Trump’s first big crypto win “nothing to crow about,” analyst says.

Donald Trump is expected to sign the GENIUS Act into law Friday, securing his first big win as a self-described “pro-crypto president.” The act is the first major piece of cryptocurrency legislation passed in the US.

The House of Representatives voted to pass the GENIUS Act on Thursday, approving the same bill that the Senate passed last month. The law provides a federal framework for stablecoins, a form of cryptocurrency that’s considered less volatile than other cryptocurrencies, as each token is backed by the US dollar or other supposedly low-risk assets.

The GENIUS Act is expected to spur more widespread adoption of cryptocurrencies, since stablecoins are often used to move funds between different tokens. It could become a gateway for many Americans who are otherwise shy about investing in cryptocurrencies, which is what the industry wants. Ahead of Thursday’s vote, critics had warned that Republicans were rushing the pro-industry bill without ensuring adequate consumer protections, though, seemingly setting Americans up to embrace stablecoins as legitimate so-called “cash of the blockchain” without actually insuring their investments.

A big concern is that stablecoins will appear as safe investments, legitimized by the law, while supposedly private companies issuing stablecoins could peg their tokens to riskier assets that could tank reserves, cause bank runs, and potentially blindside and financially ruin Americans. Stablecoin scams could also target naïve stablecoin investors, luring them into making deposits that cannot be withdrawn.

Rep. Maxine Waters (D-Calif.)—part of a group of Democrats who had strongly opposed the bill—further warned Thursday that the GENIUS Act prevents lawmakers from owning or promoting stablecoins, but not the president. Trump and his family have allegedly made more than a billion dollars through their crypto ventures, and Waters is concerned that the law will make it easier for Trump and other presidents to use the office to grift and possibly even obscure foreign bribes.

“By passing this bill, Congress will be telling the world that Congress is OK with corruption, OK with foreign companies buying influence,” Waters said Thursday, CBS News reported.

Some lawmakers fear such corruption is already happening. Senators previously urged the Office of Government Ethics in a letter to investigate why “a crypto firm whose founder needs a pardon” (Binance’s Changpeng Zhao, also known as “CZ”) “and a foreign government spymaker coveting sensitive US technology” (United Arab Emirates-controlled MGX) “plan to pay the Trump and Witkoff families hundreds of millions of dollars.”

The White House continues to insist that Trump has “no conflicts of interest” because “his assets are in a trust managed by his children,” Reuters reported.

Ultimately, Waters and other Democrats failed to amend the bill to prevent presidents from benefiting from the stablecoin framework and promoting their own crypto projects.

Markets for various cryptocurrencies spiked Thursday, as the industry anticipates that more people will hold crypto wallets in a world where it’s fast, cheap, and easy to move money on the blockchain with stablecoins, as compared to relying on traditional bank services. And any fees associated with stablecoin transfers will likely be paid with other forms of cryptocurrencies, with a token called ether predicted to benefit most since “most stablecoins are issued and transacted on the underlying blockchain Ethereum,” Reuters reported.

Unsurprisingly, ether-linked stocks jumped Friday, with the token’s value hitting a six-month high. Notably, Bitcoin recently hit a record high; it was valued at above $120,000 as the stablecoin bill moved closer to Trump’s desk.

GENIUS Act plants “seeds for the next financial crisis”

As Trump prepares to sign the law, Consumer Reports’ senior director monitoring digital marketplaces, Delicia Hand, told Ars that the group plans to work with other consumer advocates and the implementing regulator to try to close any gaps in the stablecoin legislation that would leave Americans vulnerable.

Some Democrats supported the GENIUS Act, arguing that some regulation is better than none as cryptocurrency activity increases globally and the technology has the potential to revolutionize the US financial system.

But Hand told Ars that “we’ve already seen what happens when there are no protections” for consumers, like during the FTX collapse.

She joins critics that the BBC reported are concerned that stablecoin investors could get stuck in convoluted bankruptcy processes as tech firms engage more and more in “bank-like activities” without the same oversight as banks.

The only real assurances for stablecoin investors are requirements that all firms must publish monthly reserves backing their tokens, as well as annual statements required from the biggest companies issuing tokens. Those will likely include e-commerce and digital payments giants like Amazon, PayPal, and Shopify, as well as major social media companies.

Meanwhile, Trump seemingly wants to lure more elderly people into investing in crypto, reportedly “working on a presidential order that could allow retirement accounts to be invested in private assets, such as crypto, gold, and private equity,” the BBC reported.

Waters, a top Democrat on the House Financial Services Committee, is predicting the worst. She has warned that the law gives “Trump the pen to write the rules that would put more money in his family’s pocket” while causing “consumer harm” and planting “the seeds for the next financial crisis.”

Analyst: End of Trump’s crypto wins

The House of Representatives passed two other crypto bills this week, but those bills now go to the Senate, where they may not have enough support to pass.

The CLARITY Act—which creates a regulatory framework for digital assets and cryptocurrencies to allow for more innovation and competition—is “absolutely the most important thing” the crypto industry has been pushing since spending more than $119 million backing pro-crypto congressional candidates last year, a Coinbase policy official, Kara Calvert, told The New York Times.

Republicans and industry see the CLARITY Act as critical because it strips the Securities and Exchange Commission of power to police cryptocurrencies and digital assets and gives that power instead to the Commodity Futures Trading Commission, which is viewed as friendlier to industry. If it passed, the CLARITY Act would not just make it harder for the SEC to raise lawsuits, but it would also box out any future SEC officials under less crypto-friendly presidents from “bringing any cases for past misconduct,” Amanda Fischer, a top SEC official under the Biden administration, told the NYT.

“It would retroactively bless all the conduct of the crypto industry,” Fischer suggested.

But Senators aren’t happy with the CLARITY Act and expect to draft their own version of the bill, striving to lay out a crypto market structure that isn’t “reviled by consumer protection groups,” the NYT reported.

And the other bill that the House sent to the Senate on Thursday—which would ban the US from creating a central bank digital currency (CBDC) that some conservatives believe would allow for government financial surveillance—faces an uphill battle, in part due to Republicans seemingly downgrading it as a priority.

The anti-CBDC bill will likely be added to a “must-pass” annual defense policy bill facing a vote later this year, the NYT reported. But Rep. Marjorie Taylor Greene (R.-Ga.) “mocked” that plan, claiming she did not expect it to be “honored.”

Terry Haines, founder of the Washington-based analysis firm Pangaea Policy, has forecasted that both the CLARITY Act and the anti-CBDC bills will likely die in the Senate, the BBC reported.

“This is the end of crypto’s wins for quite a while—and the only one,” Haines suggested. “When the easy part, stablecoin, takes [approximately] four to five years and barely survives industry scandals, it’s not much to crow about.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

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GOP’s pro-industry crypto bills could financially ruin millions, lawmaker warns

clarity act, Consumer protection, crypto scams, crypto week, Cryptocurrency, Donald Trump, fraud, FTX, genius act, Policy, stablecoins / Kelly Newman / July 15, 2025

Trump’s crypto bills could turn trusted Big Tech companies into the next FTX.

It’s “Crypto Week” in Congress, and experts continue to warn that legislation Donald Trump wants passed quickly could give the president ample opportunities to grift while leaving Americans more vulnerable to scams and financial ruin.

Perhaps most controversial of the bills is the one that’s closest to reaching Trump’s desk, the GENIUS Act, which creates a framework for banks and private companies to issue stablecoins. After passing in the Senate last month, the House of Representatives is hoping to hold a vote as soon as Thursday, insiders told Politico.

Stablecoins are often hyped as a more reliable form of cryptocurrency, considered the “cash of the blockchain” because their value can be pegged to the US dollar, Delicia Hand, Consumer Reports’ senior director monitoring digital marketplaces, told Ars.

But the GENIUS Act doesn’t require stablecoins to be pegged to the dollar, and that’s a problem, critics say. The law’s alleged flaws allow large technology companies to peg their stablecoins to riskier assets that could make both their cryptocurrency tokens and, ultimately, the entire global financial system less stable.

For Americans, the stakes are high. In June, Hand warned that Consumer Reports had “a number of concerns about the GENIUS Act.” Chief among them were “insufficient consumer protections” that Americans expect when conducting financial transactions.

Stablecoin issuers will likely include every major payment app, social media app, and e-commerce platform. There is already interest from Amazon, Meta, PayPal, and Shopify. But unlike companies providing traditional bank services, stablecoin providers will not be required to provide clear dispute-resolution processes, offer deposit insurance, or limit liability for unauthorized transactions on their customers’ accounts.

Additionally, with limited oversight, big tech companies could avoid scrutiny while potentially seizing sensitive financial data for non-bank purposes, pushing competition out of markets, and benefiting from other conflicts of interest from other areas of their businesses. Last month, Congressional researchers highlighting key issues with the GENIUS Act advised that possibly restricting stablecoin regulation to only apply to financial institutions would likely have required big tech firms to divest chunks of their business to prevent them from using stablecoins to illegally dominate the digital payments industry. But Republicans have not yet adopted any recommendations.

Most ominously in light of recent collapses of crypto exchanges like FTX—which made it difficult for customers to recover billions—”the bill does not provide adequate authority to federal and state regulators to ensure consumers have full protection and redemption rights for stablecoin transactions,” Consumer Reports warned. Hand reiterated this concern to Ars as the House mulls the same bill this week.

“I think one major concern that we have is if the bill doesn’t guarantee that consumers can redeem their stablecoins quickly or at all in a crisis, and that’s kind of what is the irony is that at its core, the notion of a stablecoin is that there’s some stability,” Hand said.

Pro-industry crypto bills could financially ruin millions

House Republicans are hoping to pass the bill as is, Politico reported, but some Democrats are putting up a fight that could possibly force changes. Among them is Rep. Maxine Waters (D-Calif.), who penned an op-ed this week, alleging that “Crypto Week” legislation was written “by and for the crypto industry” and “will open the floodgates to massive fraud and financial ruin for millions of American families.”

“All they really do is replicate the same mess that led to past financial crises: They call for few regulations, minimal enforcement, weak consumer protections, and more industry consolidation,” Waters wrote. And “on top of that, these bills have a special, intentional wrinkle that makes them especially dangerous: They would legitimize and legalize the unprecedented crypto corruption by the president of the United States.”

Waters joined critics warning that the GENIUS Act is deeply flawed, with “weak consumer protections” and “no funding provided to regulators to implement the law.” Additionally, the CLARITY Act—which seeks to create a regulatory framework for digital assets and cryptocurrencies to allow for more innovation and will likely come to a House vote on Wednesday before heading to the Senate—”actually creates space for similar schemes” to Sam Bankman-Fried’s stunning fraud that caused FTX’s collapse.

She accused Republicans of rushing the votes on these bills to benefit Trump, whose “shady crypto ventures” have allegedly enriched Trump by $1.2 billion. (The White House has said that Trump has no conflicts of interest, as the crypto ventures are managed by his children.)

Further, “the GENIUS Act opens the floodgates to foreign-controlled crypto that poses serious national security risks, all to appease Trump’s inner circle, which has ties to crypto,” Waters wrote.

Waters has so far submitted amendments that would “block any US president, vice president, members of Congress and their immediate families from promoting or holding crypto” and stop the US from deeming “a foreign country to have a stablecoin regime comparable to that of the US if the current leader of that country has described themselves as a dictator,” CoinTelegraph reported.

Pushback from Democrats may not be enough, as White House crypto advisor Bo Hines seemed to predict on X that the GENIUS Act would be signed into law without much debate this week.

Tim Scott, a chairman of the Senate Committee on Banking, Housing, and Urban Affairs, counted concerns about consumer protections among “myths” he claims to have busted in advocating for the bill. Scott suggested that “simple monthly disclosure” of reserves backing stablecoins and annual statements from the biggest companies issuing stablecoins would be enough to protect consumers from potential losses, should stablecoins be mismanaged.

He also defended not requiring “essential insolvency protections for consumers” by noting that customers will be “explicitly” prioritized above creditors in any insolvency proceedings.

But Waters did not buy that logic, warning that the “Crypto Week” bills becoming law without any amendments will “eventually” trigger the first American crypto financial crisis.

Widespread stablecoin adoption will take time, bank says

If these bills pass without meaningful changes, Hand told Ars that consumers should be wary of stablecoins, no matter what trusted brand is pushing a new token.

In a post detailing risks of allowing big tech companies to “open banks without becoming banks,” Brian Shearer, the director of competition and regulatory policy at the Vanderbilt Policy Accelerator, provided an example.

Imagine if Apple—which “already has quite a bit of power to force adoption of ApplePay”—issues a stablecoin through a competing “payment card” accessed through its popular devices. Apple could possibly lure merchants to adopt the payment form by charging lower fees, and customers “probably wouldn’t revolt because it would be free for them.” Eventually, Apple could be motivated to force all payments through stablecoins, cutting banks entirely out, then potentially raising fees to merchants.

“It’s not a stretch to imagine a scenario where Google, Apple, Amazon, PayPal, Block, and Meta all do something like this and quickly become the largest payment networks and banks in the world,” Shearer wrote. And Hand told Ars that these trusted brands “could kind of imbue some sort of confidence that may be not necessarily yet earned” when rolling out stablecoins.

Bank of America’s head of North American banks research, Ebrahim Poonawala, told Business Insider that “it could take between three to five years to fully build out the infrastructure needed for widespread stablecoin adoption.”

Mastercard’s chief product officer, Jorn Lambert, agreed, telling Bloomberg that stablecoins have a “long road to mainstream payments.” Specifically, Lambert suggested that consumers broadly won’t embrace stablecoins without “a seamless and predictable user experience” and current “friction” causing online checkout hurdles—even for an experienced company like Shopify—”will be difficult to clear in the near-term.”

In the meantime, customers will likely be pushed to embrace stablecoins as being more reliable than other cryptocurrencies. Hand advised that anyone intrigued by stablecoins should proceed cautiously in an environment lacking basic consumer protections, conditions which one nonpartisan, nonprofit coalition, Americans for Financial Reform, suggested could create “an incubator for even more predatory and scammy activity” plaguing the entire crypto industry.

Hand told Ars she is not “anti-digital assets or crypto,” but she recommends that customers “start conservatively” with stablecoin investments. Consider who is advertising the stablecoin, Hand recommended, suggesting that celebrity endorsements should be viewed as red flags without more research. At least to start, treat any stablecoins acquired “more like a prepaid card than a bank account,” using it for certain payments but keeping life savings in less volatile accounts until you learn more about the risks of holding stablecoins.

Possibly most critically, customers should explore companies’ promised resolution processes before investing in stablecoins, Hand said, and fully vet customer support. In China, regulators are already struggling with stablecoin scams, where “a group of semi-informed people is being deceived by ill-intentioned people” luring them into stablecoin deposits that cannot be withdrawn, the South China Morning Post reported.

“Just because something is called a coin or digital dollar doesn’t mean it’s regulated like cash,” Hand said. “Don’t wait until you get in trouble to know what you can expect.”

In this potential future, stablecoin issuers could never really be considered “stable institutions,” Shearer said. Shearer referenced a possible “sci-fi disaster” that could end in bank runs, leading the government to one day bail out tech companies who bungle stablecoin investments but become “too big to fail.”

Hand told Ars that Consumer Reports will work with other consumer advocates and the implementing regulator to try to close any gaps that would leave Americans vulnerable. Those groups would submit comments and feedback to help with rule-making around implementation and monitoring and provide consumer education resources.

However, these steps may not be enough to protect Americans, as the crypto industry continues to be deregulated under self-described “pro-crypto President” Trump.

“Sometimes if something is just fundamentally flawed, I’m not quite sure, particularly in the current regulatory or deregulatory environment, whether any amount of guidance or rulemaking could really fix a flawed framework,” Hand told Ars.

At the same time, Trump’s Justice Department has largely backed off crypto lawsuits and probes, creating an impression of Wild West-like lawlessness where even a proven fraudster like Bankman-Fried dares hope he may be pardoned for misdeeds.

“The CLARITY Act handcuffs the Securities and Exchange Commission, preventing it from proactively protecting people against fraud,” Waters wrote. “Regulators would have to wait until after investors have already been harmed to act—potentially after a company has collapsed and life savings have vanished. We’ve seen this before. FTX collapsed because insiders illegally operated the exchange, controlled customer funds and traded against their own clients. The CLARITY bill does nothing to address that.”

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

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Israel-tied Predatory Sparrow hackers are waging cyberwar on Iran’s financial system

Biz & IT, crypto exchange, Cryptocurrency, Iran, Israel, nation state hacking, Security, syndication / DJ Henderson / June 19, 2025

Elliptic also confirmed in its blog post about the attack that crypto tracing shows Nobitex does in fact have links with sanctioned IRGC operatives, Hamas, Yemen’s Houthi rebels, and the Palestinian Islamic Jihad group. “It’s also an act of sabotage, by attacking a financial institution that was pivotal in Iran’s use of cryptocurrency to evade sanctions,” Robinson says.

Predatory Sparrow has long been one of the most aggressive cyberwarfare-focused groups in the world. The hackers, who are widely believed to have links to Israel’s military or intelligence agencies, have for years targeted Iran with an intermittent barrage of carefully planned attacks on the country’s critical infrastructure. The group has targeted Iran’s railways with data-destroying attacks and twice disabled payment systems at thousands of Iranian gas stations, triggering nationwide fuel shortages. In 2022, it carried out perhaps the most physically destructive cyberattack in history, hijacking industrial control systems at the Khouzestan steel mill to cause a massive vat of molten steel to spill onto the floor, setting the plant on fire and nearly burning staff there alive, as shown in the group’s own video of the attack posted to its YouTube account.

Exactly why Predatory Sparrow has now turned its attention to Iran’s financial sector—whether because it sees those financial institutions as the most consequential or merely because its banks and crypto exchanges were vulnerable enough to offer a target of opportunity—remains unclear for now, says John Hultquist, chief analyst on Google’s threat intelligence group and a longtime tracker of Predatory Sparrow’s attacks. Almost any conflict, he notes, now includes cyberattacks from hacktivists or state-sponsored hackers. But the entry of Predatory Sparrow in particular into this war suggests there may yet be more to come, with serious consequences.

“This actor is very serious and very capable, and that’s what separates them from many of the operations that we’ll probably see in the coming weeks or months,” Hultquist says. “A lot of actors are going to make threats. This is one that can follow through on those threats.”

This story originally appeared on wired.com.

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Senate passes GENIUS Act—criticized as gifting Trump ample opportunity to grift

Binance, Cryptocurrency, Donald Trump, genius act, memecoin, Policy, stablecoin, world liberty financial / Shannon Garcia / June 19, 2025

“Why—beyond the obvious benefit of gaining favor, directly or indirectly, with the Trump administration—did you select USD1, a newly launched, untested cryptocurrency with no track record?” the senators asked.

Responding, World Liberty Financial’s lawyers claimed MGX was simply investing in “legitimate financial innovation,” CBS News reported, noting a Trump family-affiliated entity owns a 60 percent stake in the company.

Trump has denied any wrongdoing in the MGX deal, ABC News reported. However, Warren fears the GENIUS Act will provide “even more opportunities to reward buyers of Trump’s coins with favors like tariff exemptions, pardons, and government appointments” if it becomes law.

Although House supporters of the bill have reportedly promised to push the bill through, so Trump can sign it into law by July, the GENIUS Act is likely to face hurdles. And resistance may come from not just Democrats with ongoing concerns about Trump’s and future presidents’ potential conflicts of interest—but also from Republicans who think passing the bill is pointless without additional market regulations to drive more stablecoin adoption.

Dems: Opportunities for Trump grifts are “mind-boggling”

Although 18 Democrats helped the GENIUS Act pass in the Senate, most Democrats opposed the law over concerns of Trump’s feared conflicts of interest, PBS News reported.

Merkley remains one of the staunchest opponents to the GENIUS Act. In a statement, he alleged that the Senate passing the bill was essentially “rubberstamping Trump’s crypto corruption.”

According to Merkley, he and other Democrats pushed to remove the exemption from the GENIUS Act before the Senate vote—hoping to add “strong anti-corruption measures.” But Senate Republicans “repeatedly blocked” his efforts to hold votes on anti-corruption measures. Instead, they “rammed through this fatally flawed legislation without considering any amendments on the Senate floor—despite promises of an open amendment process and debate before the American people,” Merkley said.

Ultimately, it passed with the exemption intact, which Merkley considered “profoundly corrupt,” promising, “I will keep fighting to ban Trump-style crypto corruption to prevent the sale of government policy by elected federal officials in Congress and the White House.”

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Incorporated in US: $8.4B money launderer for Chinese-speaking crypto scammers

crypto scams, Cryptocurrency, investment scams, Security, syndication, Xinbi Guarantee / Beth Washington / May 14, 2025

Before crackdown, this was one of the ‘Net’s biggest markets for Chinese-speaking scammers.

As the underground industry of crypto investment scams has grown into one of the world’s most lucrative forms of cybercrime, the secondary market of money launderers for those scammers has grown to match it. Amid that black market, one such Chinese-language service on the messaging platform Telegram blossomed into an all-purpose underground bazaar: It has offered not only cash-out services to scammers but also money laundering for North Korean hackers, stolen data, targeted harassment-for-hire, and even what appears to be sex trafficking. And somehow, it’s all overseen by a company legally registered in the United States.

According to new research released today by crypto-tracing firm Elliptic, a company called Xinbi Guarantee has since 2022 facilitated no less than $8.4 billion in transactions via its Telegram-based marketplace prior to Telegram’s actions in recent days to remove its accounts from the platform. Money stolen from scam victims likely represents the “vast majority” of that sum, according to Elliptic’s cofounder Tom Robinson. Yet even as the market serves Chinese-speaking scammers, it also boasts on the top of its website—in Mandarin—that it’s registered in Colorado.

“Xinbi Guarantee has served as a giant, purportedly US-incorporated illicit online marketplace for online scams that primarily offers money laundering services,” says Robinson. He adds, though, that Elliptic has also found a remarkable variety of other criminal offerings on the market: child-bearing surrogacy and egg donors, harassment services that offer to threaten or throw feces at any chosen victim, and even sex workers in their teens who are likely trafficking victims.

Xinbi Guarantee is the second such crime-friendly Chinese-language market that Robinson and his team of researchers have uncovered over the past year. Last July, they published a report on Huione Guarantee, a similar Cambodia-based service that Elliptic said in January had facilitated $24 billion in transactions—largely from crypto scammers—making it the biggest illicit online marketplace in history by Elliptic’s accounting. That market’s parent company, Huione Group, was added to a list of known money laundering operations by the US Treasury’s Financial Crimes Enforcement Network earlier this month in an attempt to limit its access to US financial institutions.

Telegram bans

After WIRED reached out to Telegram last week about the illicit activity taking place on Xinbi Guarantee’s and Huione Guarantee’s channels on its messaging platform, Telegram appears to have responded Monday by banning many of the central channels and administrator accounts used by both Xinbi Guarantee and Huione Guarantee. “Criminal activities like scamming or money laundering are forbidden by Telegram’s terms of service and are always removed whenever discovered,” Telegram spokesperson Remi Vaughn wrote to WIRED in a statement. “Communities previously reported to us by WIRED or included in reports published by Elliptic have all been taken down.”

Telegram had banned several of Huione Guarantee’s channels in February following an earlier Elliptic report on the marketplace, but Huione Guarantee quickly re-created them, and it’s not clear whether the new removals will prevent the two companies from rebuilding their presence on Telegram again, perhaps with new accounts or even new branding. “These are very lucrative businesses, and they’ll attempt to rebuild in some way,” Robinson said of the two marketplaces following Telegram’s latest purge.

Elliptic’s accounting of the total lifetime revenue of the biggest online black markets.Courtesy of Elliptic

Xinbi Guarantee didn’t respond to multiple requests for comment on Elliptic’s findings that WIRED sent to the market’s administrators on Telegram.

Like Huione Guarantee, Xinbi Guarantee has offered a similar “guarantee” model of enabling third-party vendors to offer services by requiring a deposit from them to prevent fraud. Yet it’s flown under the radar, even as it grew into one of the biggest hubs for crypto crime on the Internet. In terms of scale of transactions prior to Telegram’s crackdown, it was second only to Huione’s market, according to Elliptic.

Both services “offer a window into the China-based underground banking network,” Robinson says. “It’s another example of these huge Chinese-language ‘guaranteed’ marketplaces that have thrived for years.”

On Xinbi Guarantee, Elliptic found numerous posts from vendors offering to accept funds related to “quick kills,” “slow kills,” and “pig butchering” transactions, all different terms for crypto investment scams and other forms of fraud. In some cases, Robinson explains, these Xinbi Guarantee vendors offer bank accounts in the same country as the victim so that they can receive whatever payment they’re tricked into making, then pay the scammer in the cryptocurrency Tether. In other cases, the Xinbi Guarantee merchants offer to receive cryptocurrency payments and cash them out in the scammer’s local currency, such as Chinese renminbi.

Not just money laundering

Aside from Xinbi Guarantee’s central use as a cash-out point for crypto scammers, Elliptic also found that the market’s vendors offered other wares for scammers such as stolen data that could be used for finding victims, as well as services for registering SIM cards and Starlink Internet subscriptions through proxies.

North Korean state-sponsored cybercriminals also appear to have used the platform for money laundering. Elliptic found through blockchain analysis, for instance, that about $220,000 stolen from the Indian cryptocurrency exchange WazirX—the victim of a $235 million theft in July 2024, widely attributed to North Korean hackers—had flowed into Xinbi Guarantee in a series of transactions in November.

Those money-laundering and scam-enabling services, however, are far from the only shady offerings found on Xinbi Guarantee’s market. Elliptic also found listings for surrogate mothers and egg donors, with one post showing faceless pictures of the donor’s body. Other accounts have offered services that will, for a payment in Tether, place a funeral wreath at a target’s door, deface their home with graffiti, post damaging statements around their home, have someone verbally threaten them, throw feces at them, or even, most bizarrely, surround their home with AIDS patients. One posting suggested these AIDS patients would carry “case reports and needles for intimidation.”

Other listings have offered sex workers as young as 18 years old, noting the specific sex acts that are allowed and forbidden. Elliptic says that one of its researchers was even offered a 14-year-old by a Xinbi Guarantee merchant. (The account holder noted, however, that no transaction for sex with someone below the age of 18 would be guaranteed by Xinbi. The legal age of consent in China is 14.)

Exactly why Xinbi Guarantee is legally registered in the US remains a mystery. Its incorporation record on the Colorado Secretary of State’s website shows an address at an office park in the city of Aurora that has no external Xinbi branding. The company appears to have been registered there in August of 2022 by someone named “Mohd Shahrulnizam Bin Abd Manap.” (WIRED connected that name with several people in Malaysia but couldn’t determine which one might be Xinbi Guarantee’s registrant.) The listing is currently marked as “delinquent,” perhaps due to failure to file more recent paperwork to renew it.

For fledgling Chinese companies—legitimate and illegitimate—incorporating in the US is an increasingly common tactic for “projecting legitimacy,” says Jacob Sims, a visiting fellow at Harvard’s Asia Center who focuses on transnational Chinese crime. “If you have a US presence, you can also open US bank accounts,” Sims says. “You could potentially hire staff in the US. You could in theory have more formalized connections to US entities.” But he notes that the registration’s delinquent status may mean Xinbi Guarantee tried to make some sort of inroads in the US in the past but gave up.

While Telegram has served as the chief means of communication for the two markets, the stablecoin cryptocurrency Tether has served as their primary means of payment, Elliptic found. And despite Telegram’s new round of removals of their channels and accounts, Xinbi Guarantee and Huione Guarantee are far from the only companies to use Tether and Telegram to create essentially a new, largely Chinese-language darknet: Elliptic is tracking close to 30 similar marketplaces, Robinson says, though he declined to name others in the midst of the company’s investigations.

Just as Telegram shows new signs of cracking down on that sprawling black market, Tether, too, has the ability to disrupt criminal use of its services. Unlike other more decentralized cryptocurrencies such as Bitcoin, Tether can freeze payments when it identifies bad actors. Yet it’s not clear to what degree Tether has taken measures to stop Chinese-language crypto scammers and others on Xinbi Guarantee and Huione Guarantee from using its currency.

When WIRED wrote to Tether to ask about its role in those black markets, the company responded in a statement that it encourages “firms like Elliptic and other blockchain intelligence providers to share critical data with law enforcement so we can act swiftly and in coordination.”

“We are not passive observers—we are active players in the global fight against financial crime,” the Tether statement continued. “If you’re considering using Tether for illicit purposes, think again: it is the most traceable asset in existence. We will identify you, and we will work to ensure you are brought to justice.”

Despite that promise—and Telegram’s new effort to remove Huione Guarantee and Xinbi Guarantee from its platform—both tools have already been used to facilitate tens of billions of dollars in theft and other black market deals, much of it occurring in plain sight. The two largely illegal and very public markets have been “remarkable for both the scale at which they’re operating and also the brazenness,” says Harvard’s Jacob Sims.

Given that brazenness and the massive criminal fortunes at stake, expect both markets to attempt a revival in some form—and plenty of competitors to try to take their place atop the Chinese-language crypto crime economy.

This story originally appeared on wired.com.

Wired.com is your essential daily guide to what’s next, delivering the most original and complete take you’ll find anywhere on innovation’s impact on technology, science, business and culture.

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Celsius founder Alex Mashinsky sentenced to 12 years for “unbank yourself” scam

Alex Mashinsky, Celsius Network, Cryptocurrency, cryptocurrency fraud, Policy, securities fraud / DJ Henderson / May 9, 2025

As the case dragged on, Mashinsky and his family appeared unremorseful, victims said, even while facing threats of violence and significant public shaming. Some victims accused Mashinsky of lying to their faces and pushing them to continue depositing funds even when the end was near and he knew that the money would be lost.

In victim statements sent to US District Judge John Koeltl, customers accused Mashinsky of weaponizing his family-man brand to scam many naïve investors out of their life savings. Some suicides were reported, victims said, and elderly victims were among the most vulnerable, with many becoming homeless after retirement funds were drained. Among the victims was Rien Vanmarcke, who confessed to feeling haunted by guilt after convincing his aging mother to invest in Celsius and losing the majority of their savings.

And “Mashinsky’s cruelty didn’t end with the collapse,” Vanmarcke wrote. “His family mocked victims with ‘unbankrupt yourself’ merchandise funded by stolen savings, while flaunting luxury lifestyles online.”

Other victims also described feeling palpable shame, even if they felt their road to recovery wasn’t as bad as others. One victim, Daniel Frishberg, was still in high school when he lost 70 percent of his crypto to Mashinsky’s false promises.

“I am lucky that I am young and have plenty of time to make back the money I lost due to naively trusting Mr. Mashinsky—many are not as fortunate,” Frishberg wrote.

Celsius founder Alex Mashinsky sentenced to 12 years for “unbank yourself” scam Read More »

Trump says bitcoin reserve will change everything. Crypto fans aren’t so sure.

Bitcoin, bitcoin reserve, Cryptocurrency, digital assets, Donald Trump, Policy / Mike M. / March 9, 2025

Ahead of the first-ever White House Crypto Summit Friday, President Donald Trump signed an executive order establishing a strategic bitcoin reserve that a factsheet claimed delivers on his promise to make America the “crypto capital of the world.”

Trump’s order requires all federal agencies currently holding bitcoins seized as part of a criminal or civil asset forfeiture proceeding to transfer those bitcoins to the Treasury Department, which itself already has a store of bitcoins. Additionally, any other digital assets forfeited will be collected in a separate Digital Assets Stockpile.

But while Trump likely anticipates that bitcoin fans will be over the moon about this news—his announcement of the reserve and looser crypto regulations helped send bitcoin’s price to its all-time high of $109,000 in January, Reuters noted—some cryptocurrency enthusiasts were clearly disappointed that Trump’s order confirmed that the US currently has no plans to buy any more bitcoins at this time.

Bitcoin’s price briefly dropped by about 5 percent to $85,000 on the news, Reuters reported. Charles Edwards, the founder of a bitcoin-focused hedge fund called Capriole Investments, took to X (formerly Twitter) to declare that Trump’s order is “a pig in lipstick.” Currently, bitcoin’s price is around $90,500.

“This is the most underwhelming and disappointing outcome we could have expected for this week,” Edwards wrote. “No active buying means this is just a fancy title for Bitcoin holdings that already existed” with the government.

A digital assets managing director at S&P Global Ratings, Andrew O’Neill, agreed, telling Reuters that the “significance” of Trump’s order was “mainly symbolic” and provides no timeline for when more bitcoin might be acquired by the US.

In the factsheet, the White House insisted that the strategic reserve and digital assets stockpile would harness “the power of digital assets for national prosperity rather than letting them languish in limbo.”

Trump says bitcoin reserve will change everything. Crypto fans aren’t so sure. Read More »

How North Korea pulled off a $1.5 billion crypto heist—the biggest in history

Biz & IT, Cryptocurrency, hacking, North Korea, Security / Beth Washington / February 25, 2025

The cryptocurrency industry and those responsible for securing it are still in shock following Friday’s heist, likely by North Korea, that drained $1.5 billion from Dubai-based exchange Bybit, making the theft by far the biggest ever in digital asset history.

Bybit officials disclosed the theft of more than 400,000 ethereum and staked ethereum coins just hours after it occurred. The notification said the digital loot had been stored in a “Multisig Cold Wallet” when, somehow, it was transferred to one of the exchange’s hot wallets. From there, the cryptocurrency was transferred out of Bybit altogether and into wallets controlled by the unknown attackers.

This wallet is too hot, this one is too cold

Researchers for blockchain analysis firm Elliptic, among others, said over the weekend that the techniques and flow of the subsequent laundering of the funds bear the signature of threat actors working on behalf of North Korea. The revelation comes as little surprise since the isolated nation has long maintained a thriving cryptocurrency theft racket, in large part to pay for its weapons of mass destruction program.

Multisig cold wallets, also known as multisig safes, are among the gold standards for securing large sums of cryptocurrency. More shortly about how the threat actors cleared this tall hurdle. First, a little about cold wallets and multisig cold wallets and how they secure cryptocurrency against theft.

Wallets are accounts that use strong encryption to store bitcoin, ethereum, or any other form of cryptocurrency. Often, these wallets can be accessed online, making them useful for sending or receiving funds from other Internet-connected wallets. Over the past decade, these so-called hot wallets have been drained of digital coins supposedly worth billions, if not trillions, of dollars. Typically, these attacks have resulted from the thieves somehow obtaining the private key and emptying the wallet before the owner even knows the key has been compromised.

How North Korea pulled off a $1.5 billion crypto heist—the biggest in history Read More »

SEC’s “scorched-earth” lawsuit against Coinbase to be dropped, company says

coinbase, Cryptocurrency, cryptocurrency exchange, Donald Trump, Policy, SEC, Securities and Exchange Commission / Shannon Garcia / February 23, 2025

On Friday, a Coinbase executive declared the “war against crypto” over—”at least as it applies to Coinbase.”

According to Coinbase Chief Legal Officer Paul Grewal, the US Securities and Exchange Commission (SEC) plans to drop its lawsuit against the largest US cryptocurrency exchange as the agency shifts to embrace Donald Trump’s new approach to regulating cryptocurrency in the US.

The SEC sued Coinbase in 2023, accusing Coinbase of “operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency” and “failing to register the offer and sale of its crypto asset staking-as-a-service program.”

“Since at least 2019, Coinbase has made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities,” the SEC alleged.

At that time, the SEC claimed that Coinbase’s supposedly dodgy operations were depriving investors of “significant protections, including inspection by the SEC, recordkeeping requirements, and safeguards against conflicts of interest, among others.” The litigation was intended to protect Coinbase customers, the SEC said, by holding Coinbase to the same standards as any service acting as an exchange, broker, or clearing agency.

Former SEC Chair Gary Gensler, long considered an adversary in the crypto industry, had warned that Coinbase “deliberately” flouted rules to cheat investors out of protections for financial gain. That left customers exposed to risks, Gensler claimed, and allowed for insider trading that resulted in a settlement.

“You simply can’t ignore the rules because you don’t like them or because you’d prefer different ones: the consequences for the investing public are far too great,” Gensler said.

SEC’s “scorched-earth” lawsuit against Coinbase to be dropped, company says Read More »

Man offers to buy city dump in last-ditch effort to recover $800M in bitcoins

bitcoins, climate change, crypto mining, Cryptocurrency, Policy, solar farm / Kelly Newman / February 15, 2025

Howells told The Times that he envisions cleaning up the site and turning it into a park, but the council’s analysis seems to suggest that wouldn’t be a suitable use. Additionally, the council noted that there aren’t viable alternative sites for the solar farm, which, therefore, must be built on the landfill site or else potentially set back the city’s climate goals.

If Howells can’t turn the landfill into a park, he suggested that he could simply clear it out so that it can be used as a landfill again.

But the Newport council does not appear to be entertaining his offer, the same way the council seemingly easily rejected his prior offer to share his bitcoin profits if granted access to dig up the landfill. When asked about Howells’ most recent offer, a council spokesperson directed The Times to a 2023 statement holding strong to the city’s claims that Howells gave up ownership of the bitcoins the moment the hard drive hit the landfill and his plans for excavation would come at “a prohibitively high cost.”

“We have been very clear and consistent in our responses that we cannot assist Mr. Howells in this matter,” the spokesperson said. “Our position has not changed.”

Howells insists his plan is “logical”

But Howells told The Guardian that it was “quite a surprise” to learn the city planned to close the landfill, reportedly in the 2025–26 financial year. This wasn’t disclosed in the court battle, he said, where the council claimed that “closing the landfill” to allow his search “would have a huge detrimental impact on the people of Newport.”

“I expected it would be closed in the coming years because it’s 80–90 percent full—but didn’t expect its closure so soon,” Howells told The Guardian. “If Newport city council would be willing, I would potentially be interested in purchasing the landfill site ‘as is’ and have discussed this option with investment partners and it is something that is very much on the table.”

Man offers to buy city dump in last-ditch effort to recover $800M in bitcoins Read More »

US selling 69K seized bitcoins could mess with Trump plans for crypto reserve

Bitcoin, Cryptocurrency, department of justice, Donald Trump, Federal Reserve, Policy, Silk Road, US bitcoin reserve / DJ Henderson / January 9, 2025

At the end of 2024, a US court authorized the Department of Justice to sell 69,370 bitcoins from “the largest cryptocurrency seizure in history.”

At bitcoin’s current price, just under $92,000, these bitcoins are worth nearly $6.4 billion, and crypto outlets are reporting that DOJ officials have said they’re planning to proceed with selling off the assets consistent with the court’s order. The DOJ had reportedly argued that bitcoin’s price volatility was a pressing reason to push for permission for the sale.

Ars has reached out to the DOJ for comment and will update the story with any new information regarding next steps.

A hacker initially stole these bitcoins from Silk Road—an illegal online marketplace where goods could only be bought and sold with bitcoins—in 2012, shortly before the US government shut down the marketplace. The US later discovered the stolen bitcoins in 2020 while conducting further investigations of Silk Road, eventually securing a consent agreement that year from the hacker, who signed the bitcoins over to the government.

Whether the government’s seizure of those bitcoins was proper has been disputed by Battle Born Investments, a company that purchased the assets of bankruptcy estate from an individual who they believed to be either the hacker whose bitcoins were seized or someone “associated with him.”

After a court battle failed to return the bitcoins, Battle Born attempted to unmask the hacker through a Freedom of Information Act (FOIA) request, which sparked a new court fight. But ultimately, in late December, the court agreed with the US government that the hacker had a right to privacy as someone who was the subject of a criminal investigation and shouldn’t be unmasked. That ended Battle Born’s claim to the bitcoins and cleared the way for the government’s sale.

US selling 69K seized bitcoins could mess with Trump plans for crypto reserve Read More »

Do Kwon, the crypto bro behind $40B Luna/Terra collapse, finally extradited to US

Cryptocurrency, do kwon, Policy / DJ Henderson / January 3, 2025

The US government finally got its metaphorical hands on Do Hyeong Kwon, the 33-year-old Korean national who built a financial empire on the cryptocurrency Luna and the “stablecoin” TerraUSD, only to see it all come crashing down in a wipeout that cost investors $40 billion.

As private investors filed lawsuits, and as the governments of South Korea and the United States launched fraud investigations, Do Kwon was nowhere to be found. In 2022, the Korean government filed a “red notice” with Interpol, seeking Kwon’s arrest and his return to Korea. A few months later, the Securities and Exchange Commission charged Kwon with fraud in the US.

On September 17, 2022, Kwon famously tweeted, “I am not ‘on the run’ or anything similar”—but he also wouldn’t say where he was. He didn’t help his case when he was arrested in March 2023 by the authorities in Montenegro. At an airport. With fake travel documents. On his way to a country with no US extradition agreement.

After serving some time in a Montenegro prison, Kwon battled extradition to both Korea and the US. This delayed the process by some months, but on December 31, 2024, he was shipped off to US authorities. Today, he appeared in front of a federal judge in New York City, where he pled “not guilty” to fraud.

The US Justice Department crowed about the extradition, with US Attorney General Merrick Garland pointing out that the US can sometimes get to people in surprising ways.

“We secured this extradition despite Kwon’s alleged attempt to cover his tracks by laundering proceeds of his schemes and trying to use a fraudulent passport to travel to a country that did not have an extradition treaty with the United States,” Garland said in a statement. “This extradition from Montenegro is an example of the Justice Department’s international partnerships, which enable the pursuit of criminals wherever they attempt to hide.”

Five alleged misrepresentations

As for the charges, the US also unsealed a massive indictment against Kwon today, which you can read here (PDF) if you want all the gory details.

The basic claim is that Kwon “defrauded investors by falsely advertising the company’s blockchain products as decentralized, reliable, and effective, and by engaging in market manipulation, ultimately resulting in more than $40 billion in investor losses,” according to the US government. This, the government alleges, happened in five key ways:

Do Kwon, the crypto bro behind $40B Luna/Terra collapse, finally extradited to US Read More »