Banned crypto mixer Tornado Cash has witnessed a surprising uptick in deposit volume in the first half of 2024, despite ongoing sanctions and continued legal strife for its founding team. 

According to data from Flipside Crypto, Tornado Cash has received some $1.9 billion in deposits in the first six months, a significant 50% increase from the total number of deposits through the entirety of 2023.

The Office of Foreign Assets Control (OFAC) officially sanctioned Tornado Cash in August 2022 after it was revealed that the North Korean hacking consortium Lazarus Group had used the protocol to launder around $455 million in illicit funds.

Tornado Cash deposits have jumped after more than a year of low activity. Source: Flipside Crypto

The OFAC sanctions mean that anyone who interacted with the protocol would be placed on a “blacklist” — banning their wallet from being accepted at all legally compliant crypto exchanges.

In short, any wallet that had interacted with the protocol would find it extremely difficult to withdraw that crypto into fiat from an OFAC-compliant centralized exchanges.

Despite these sanctions, the mixing service remains a popular destination for large hacking groups looking to obfuscate the flow of ill-gotten funds.

According to data from blockchain analytics firm Arkham Intelligence, the hacker behind the $100 million Poloniex exchange exploit has transferred $76 million to the mixer since May.

Additionally, the nefarious entities behind the HECO Bridge and Orbit Chain exploits shifted $166 million and $48 million respectively to the mixer through the first half of the year.

More recently, one of the confirmed wallet addresses used in the $235 million hack of Indian crypto exchange WazirX on July 18, was funded by way of a Tornado Cash deposit.

Ether remains the most popular crypto asset used on the mixing protocol. Source: Flipside Crypto

Several figures from the crypto industry have been challenging the Tornado Cash sanctions through an ongoing lawsuit, first filed in 2022.

The plaintiffs argued that sanctioning Tornado Cash is “unlawful and unconstitutional” as the anonymous mixing service cannot be viewed as a country or an “entity” and that blocking it violates the right to free speech under the US Constitution.

Related: Tornado Cash developer Alexey Pertsev denied bail while preparing appeal

The lawsuit has since been backed by several large crypto firms including Coinbase, and crypto advocacy groups The Blockchain Association and Coin Center, who also claim the sanctions are unlawful.

But the US Treasury says crypto mixers are a national security threat and Tornado Cash repeatedly failed to create controls to stop money laundering.

Meanwhile, the three co-founders of Tornado Cash, Alexey Pertsev, Roman Storm, and Roman Semenov have faced challenges following the legal and regulatory crackdown on their mixing protocol.

Alexey Pertev was sentenced to five years and four months in Dutch prison after being convicted on money laundering charges in 2023.

Roman Storm was arrested in the United States in August on money laundering charges and subsequently pleaded not guilty to all charges.

He was released on a $2 million bond shortly after his arrest and since filed a motion to dismiss all charges on March 31.

The third co-founder Roman Semenov remains at large.

Crypto-Sec: $11M Bittensor phish, UwU Lend and Curve fake news, $22M Lykke hack

WazirX hackers were preparing 8 days before the $235M theft

The hackers behind the $235 million WazirX crypto exchange breach began preparing onchain at least eight days prior, according to Polygon Labss security chief.

WazirX, one of Indias largest cryptocurrency exchanges, lost hundreds of millions to a multisig wallet hack on Thursday, July 18, which is being blamed on North Korean hacking organization Lazarus Group. 

Mudit Gupta, the Chief Information Security Officer of Polygon Labs, suggests the hackers had started practicing the hack onchain more than a week prior to executing the attack. 

It started with hackers upgrading the multisig to a malicious version that would later allow them to drain it, Gupta explained in a July 18 post on X. 

(Mudit Gupta)

Tarun Mangukiya, the co-founder of payment platform Copperx, believes the hackers may have tricked WazirX into upgrading its Safe Implementation Skeleton.

Why did they upgrade it instead of just draining? Gupta asked rhetorically.

Draining takes time and multiple transaction. They likely didnt have access to all the required private keys and were dependent on signature phishing which they cant do multiple times without getting caught.”

In a follow-up post on X, WazirX has described the attack as a force majeure event beyond our control.

We have already blocked a few deposits and reached out to concerned wallets for recovery, it added.

The exchange announced a temporary withdrawal freeze soon after the hack.

Indias crypto sector holds breath for tax relief

Elsewhere in India, the cryptocurrency industry is eagerly hoping for relief from the countrys stringent crypto tax regulations, with India Finance Minister Nirmala Sitharaman set to present the Union Budget for the next fiscal year on July 23. 

Since 2022, India has slapped one of the worlds most severe tax regimes on cryptocurrency, with a flat 30% capital gains tax on profits from digital assets, including non-fungible tokens (NFTs). 

Sumit Gupta, CEO of CoinDCX. (CoinDCX)

In addition, a 1% tax deducted at source (TDS) is levied on crypto transactions.

Indias crypto sector has been advocating a reduction in the TDS rate to 0.01% in the forthcoming budget. 

Sumit Gupta, CEO of CoinDCX, an exchange involved in pre-budget consultations, says this adjustment is seen as crucial to recapturing business that has shifted to offshore exchanges due to current heavy taxation.

We have also requested for a reduction in TDS rate from 1% to 0.01%, Gupta said in a statement shared with Magazine.

We have also requested for a reduction in capital gains tax rate from 30% to the actual [income bracket] of the assessee.

Since the introduction of these tax measures in Sitharamans 2022 Budget speech, Indian crypto exchanges have seen a drastic decline, with trading volumes plummeting by 97% and active users decreasing by 81%, according to a recent report by The National Academy of Legal Studies and Research (NASLAR).

NASLARs research found that the national treasury is losing approximately $700 million (59 billion Indian rupees) in tax revenue due to diminished activity on Indias leading exchanges. 

Effective “virtual digital assets” tax rates. (NASLAR)

The study suggests that reducing the TDS rate to 0.01% could potentially double the nations tax revenue in the upcoming fiscal year.

So far, India has had a hot and cold relationship with cryptocurrency while maintaining a positive outlook toward the potential of blockchain technology.

The industrys growth hit a wall in 2018 when the Reserve Bank of India, the central bank, prohibited financial institutions from servicing crypto businesses a ban that was overturned by the Supreme Court in 2020. 

More arrests in Hong Kong over fake cash for USDT scam

Hong Kong authorities have arrested three more suspects for allegedly selling counterfeit banknotes in exchange for stablecoin Tether (USDT).

Local media reported on July 15 that a 44-year-old businessman was deceived into transferring $399,000 (3.11 million Hong Kong dollars) in USDT.

Nathan Road, Tsim Sha Tsui, Hong Kong. (Edbert Als/Unsplash)

The businessman then received three bundles of 1,000 Hong Kong dollar notes, with the counterfeit notes sandwiched by genuine bills. 

Suspects met with the victim in a hotel in the major shopping district of Tsim Sha Tsui before being taking him to finalize the deal at Mong Kok district, which is about a 10-minute drive away.

Police have detained three suspects, a woman and two men, on suspicion of obtaining property by deception and possession of counterfeit banknotes. If convicted, they could face sentences ranging from 10 to 14 years in prison.

This case bears a striking resemblance to an incident in April 2024 when a victim was scammed for $128,000 (1 million Hong Kong dollars).

The case involved hell notes, which are unofficial paper money burned during traditional ancestral worship ceremonies. These notes represent offerings to ancestors in the afterlife.

Read also

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A 35-year-old man was shown stacks of these hell notes in exchange for USDT in a Tsim Sha Tsui shop. However, the alleged scammers refused to hand over the notes and disappeared.

Local media reported in May (a month after the victims police report) that three suspects were arrested and 3,000 hell notes were confiscated.

According to local media, counterfeit fiat scams are on the rise in the city. From January to April 2024, the police busted $326,130 worth of fake notes.

Severe insider trading cases may be punished by life imprisonment under South Koreas new investor protection laws. (Cathe/Pixabay)

Insider crypto trading in South Korea can now land you life in prison

South Koreas cryptocurrency investor protection law will officially come into force on Friday, July 19.

The Act on the Protection of Virtual Asset Users, enacted on July 18, 2023, aims to safeguard crypto investors assets and prohibit unfair trading practices.

The legislation mandates that users deposits be segregated from company funds and held by a regulated financial institution. To further protect users assets, the law requires that a large chunk of these assets 80% or more of their economic value be stored offline, such as in cold wallets.

Crypto businesses are also required to take measures to cover potential liabilities arising from hacking or system failures. These measures include obtaining insurance or setting aside reserves which must cover at least 5% of the economic value of assets not stored offline.

The law prohibits activities such as using undisclosed information for trading (insider trading), market manipulation, and fraud. Violations can result in severe penalties, including criminal charges and fines.

Criminal penalties may include imprisonment for at least one year, with fines ranging from three to five times the amount of illegal gains. If the illegal gains exceed $3.6 million (5 billion Korean won), the maximum penalty can be life imprisonment, along with fines amounting to twice the illegal gains.

Read also

Features Crypto as a ‘public good’ in the 22nd century

Features MakerDAOs plan to bring back DeFi summer Rune Christensen

Hackers send stolen crypto to marketplace with ties to Cambodia PMs family

North Koreas Lazarus Group is suspected of laundering at least $35 million in USDT on Tron so far this month through the online Cambodian marketplace Huione Guarantee.

Blockchain detective ZachXBT linked these laundered funds to the $305 million worth of Bitcoin stolen from DMM, a Japanese cryptocurrency exchange that suffered the years most significant breach in late May.

According to ZachXBT, offchain indicators and laundering techniques suggest that the Lazarus Group is the prime suspect in the DMM hack.

North Korean hackers have been linked to the years worst crypto theft. (ZachXBT)

Huione Guarantee is a multibillion-dollar marketplace owned by the Huione Group, which also operates the foreign exchange business Huione Pay.

An investigation by blockchain forensics firm Elliptic alleges that Hun To, a cousin of Cambodian Prime Minister Hun Manet, is one of the directors of Huione Pay.

Hun To was reportedly suspected of money laundering and drug trafficking by Australian authorities over a decade ago. Hun To has denied the allegations.

In a separate report on July 15, Reuters found that Huione Pay received approximately $150,000 from North Korean hackers. 

Reuters-cited blockchain analysts claiming that Huione Pay received funds from an anonymous digital wallet used by Lazarus to deposit stolen assets from three different crypto firms.

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BlackRock’s spot Bitcoin exchange-traded fund has continued to gather millions from investors since last Monday, despite a sharp fall in positive Bitcoin commentary.

The BlackRock-issued iShares Bitcoin Trust (IBIT) saw another $107 million in inflows on July 18 — marking the ninth straight day of inflows, according to Thomas Fahrer, co-founder of crypto data platform Apollo.

Seven of those nine days saw flows over $100 million, a feat rarely achieved in the ETF industry.

Source: Thomas Fahrer

However, crypto traders aren’t showing as much optimism. The amount of positive Bitcoin (BTC) commentary on social media has slumped compared to four months ago, while traders are increasingly taking up short positions on the asset, according to blockchain market intelligence firm Santiment.

“Positive commentary toward Bitcoin has plummeted despite the mid-sized crypto market bounce this week. Many traders, particularly on @binance, are opening shorts with the expectation of BTC dropping again.”

The amount of positive Bitcoin comments made on social media is about a third of what it was four months ago, Santiment’s chart shows.

Bitcoin positive sentiment since January 2024. Source: Santiment

Santiment typically measures social sentiment from social networks such Reddit, X, 4chan and BitcoinTalk.

Interestingly, Santiment revealed a surge in Bitcoin “buy the dip” mentions on these platforms at the start of the month when Bitcoin started falling toward its near-five-month low of $53,600 on July 5.

Related: Ethereum will outperform Bitcoin after ETF launch — K33 Research

Despite the fall in positive Bitcoin mentions, the Crypto Fear and Greed Index currently estimates market sentiment is in the “Greed” zone with a score of 60 out of 100.

Crypto Fear & Greed Index score. Source: Alternative.me

The current score is a strong rebound from the “Extreme Fear” zone reached on July 12 with a score of 25 out of 100 — the lowest it had been since January 2023.

Bitcoin is currently priced at $63,540, down 1.5% over the last 24 hours but up 11.5% over the last fortnight.

Magazine: ‘Bitcoin Layer 2s’ aren’t really L2s at all: Here’s why that matters

A metric aimed at representing retail interest in Bitcoin has just hit its lowest point in three years, and crypto analysts say a rebound is needed before the “real bull run” can begin.

“Bitcoin retail investor demand is at a 3-year low,” CryptoQuant founder Ki Young Ju wrote in a July 18 X post, basing his claim on the average monthly change in demand for Bitcoin (BTC) among retail investors — which has fallen below negative 15% over the past 30 days.

“It’s measured by the 30-day change in total transfer volume for transactions under $10K,” Ju explained.

Source: Ki Young Ju

While institutions generally execute larger Bitcoin transactions, many analysts and traders believe that major price rallies for Bitcoin cannot begin until retail investor interest surges.

“The real bull run typically begins with massive buying volume driven by retail investors,” CryptoQuant contributor Minkyu Woo explained, suggesting that an uptick in retail investors generally boosts market sentiment.

“We have not yet seen this volume from retail investors,” he added.

However, in April, VanEck CEO Jan van Eck told Cointelegraph that the majority of inflows into spot Bitcoin exchange-traded funds (ETF) in the United States are likely from retail investors.

“I was surprised, but I don’t think it’s traditional investors yet. I still think 90% of the flows are retail,” van Eck told Cointelegraph on April 11.

Spot Bitcoin ETF inflows in the United States fell by 87% on July 17 compared to the previous day, recording a total of $53.3 million across the 11 tracked products, according to Farside.

Bitcoin is up 12.36% over the past seven days. Source: CoinMarketCap

Meanwhile, Bitcoin is struggling to hold onto a crucial support level that traders believe is necessary before it can move into the next price bracket.

On July 17, Bitcoin ended a 27-day streak of trading below $65,000, reaching $65,686, before retracing back to $63,521. It has yet to surface above the level since.

At the time of publication, Bitcoin is trading at $63,975, according to CoinMarketCap data.

Related: Bitcoin’s next leg could hit $110K, despite ‘lower highs and lower lows’

Meanwhile, search interest for the term “Bitcoin” — tracked over the past 12 months — has dropped 44% over the past three months since the Bitcoin halving to a score of 43, down almost 57% since Bitcoin reached all-time highs of $73,679 on March 13, according to Google data.

This indicator, which often spikes during major Bitcoin events, tends to give insight into retail investors’ general interest.

Magazine: Coinbase will not mention ‘crypto’ in five years: Avichal Garg, X Hall of Flame

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Italy’s state-owned bank Cassa Depositi e Prestiti SpA has just completed a $27.2 million digital bond issuance with trillion-dollar investment bank Intesa Sanpaolo using Ethereum layer-2 Polygon.

The transaction was part of a trial conducted by the European Central Bank to identify new solutions for central bank money settlement of wholesale transactions carried out on blockchains, Intesa Sanpaolo explained in a July 18 statement.

It was the first transaction of its kind since Italy introduced its FinTech decree law, which governs the issuance and circulation of financial instruments in digital form.

Cassa Depositi’s $27.2 million (25 million euro) bond will mature over four months — terminating on Nov. 18, 2024 — and offers a fixed coupon at 3.63%, calculated on an annual basis. Intesa Sanpaolo was the sole institutional investor in the trial.

Source: Intesa Sanpaolo

The cash flow was settled the same day via the Bank of Italy’s "TIPS Hash Link” tool that allows interoperability between blockchains and traditional payment rails.

“This transaction demonstrates how public blockchains are a powerful technology for financial institutions, making transactions faster and safer,” Niccolò Bardoscia, head of digital assets trading and investments at Intesa Sanpaolo explained in a July 18 LinkedIn post.

“This technological change will impact not only bonds but every asset class over the coming years.”

Source: Eric Balchunas

Tokenization has also been championed by BlackRock’s CEO Larry Fink, who believes every stock and bond will move on blockchain rails in the future.

Related: Italian central bank backs DeFi tokenization project with Polygon, Fireblocks

Not everyone shares Fink’s views though.

Last month, financial law professor Hilary Allen told the United States Congress that public blockchains are too “fragile” to tokenize trillions of dollars in real-world assets as they’re highly inefficient and can’t handle large transaction volumes.

Meanwhile, Boston Consulting Group forecasts the tokenized asset market could reach $16 trillion by 2030, while fellow consulting firm McKinsey predicted a more modest $2 trillion over the same timeframe.

Over $89 billion of tokenized assets are on blockchain rails, according to data compiled by 21Shares on Dune Analytics.

Polygon sits fourth among blockchains by tokenized value at $40.3 million — trailing only Ethereum, Stellar and Mantle.

Magazine: Crypto exposes sudden rift among Democrats months ahead of election

The S&P 500 index experienced a 2.6% decline over the past two days, testing the 5,523 level on July 18. This correction erased gains from the previous two weeks but saw decent buying activity in the last trading hours after chipmaker Taiwan Semiconductor Manufacturing Company (TSM) reported earnings above market consensus.

Investor morale was negatively affected, which partially explains why Bitcoin (BTC) and Ether (ETH) traded down on July 18. Understanding the reasons behind the US stock market decline is essential to determine whether cryptocurrencies should sustain a positive correlation.

Bitcoin/USD index (left) vs. S&P 500 index futures (right), 1-hour. Source: TradingView

Rising jobless claims and economic concerns

Fear of rising inflation due to unsustainable government debt might present a short-term negative impact but it also opens an opportunity as investors seek alternative scarce assets. However, if investors feel that the economy is worsening, especially in the job market, traders are likely to seek protection in cash and short-term government bonds.

On July 18, the US Department of Labor reported that continuing jobless claims increased to a seasonally adjusted 1.867 million during the week ending July 6, the highest level since November 2021.

This metric focuses on the number of people receiving benefits after an initial week of aid, thus serving as a proxy for hiring. This data is especially negative for the real estate market, which in turn puts the financial sector at risk.

Federal Reserve chair Jerome Powell told the US Senate Banking Committee on July 9 that the commercial real estate sector poses major risks, especially for small banks with concentrated exposure, according to CRE Daily. Powell stressed the importance of banks honestly assessing and managing their risks, as the commercial sector’s challenges are expected to persist for years due to hybrid work.

Additionally, minutes from the June FOMC meeting revealed that credit quality deteriorated further in April and May, especially in the office, hotel, and retail sectors, with rising overdue delinquency rates. This scenario partially explains the weakness in the banking sector on July 18, with JP Morgan (JPM) trading down 3.2%, Wells Fargo (WFC) down 2.8%, and Bank of America (BAC) declining 2%.

Possible tech export restrictions impact on markets

Meanwhile, US-listed tech stocks were negatively impacted after Bloomberg reported that the US is analyzing rules to control the exports of American technology, a lynchpin to artificial intelligence. Although focused on curbing China’s edge in chipmaking processes, such a move would curb billions of dollars in sales for these companies. Shares of Advanced Micro Devices (AMD) traded down 3.1%, while ASML Holding (ASML) declined 2%.

Jim Covello, head of equity research at Goldman Sachs, issued a warning that the artificial intelligence (AI) investment frenzy may lead to an economic bubble, as reported by Bloomberg. Covello notes that AI investments have yielded modest returns, with Microsoft, Google, and Amazon attributing only 7% of cloud service sales growth to AI. Yet, Covello doesn’t see this happening soon, as ongoing investments keep driving stocks like Nvidia.

Related: Meta won’t launch new AI products in EU, citing ‘regulatory uncertainty’

David Bahnsen, founder and chief investment officer at the Bahnsen Group, echoes this caution, avoiding large tech stocks, fearing a repeat of the dot-com bust, and anticipating significant investor losses if they don’t divest in time. Bloomberg cites a survey conducted by Lucidworks, which shows that less than half of the companies investing in AI have yet to see a significant return.

Such analysis justifies the 2.5% decline in Amazon's (AMZN) stock and 2.2% in Google (GOOGL) and Apple's (AAPL) stock, which in turn spread pessimistic sentiment to other markets, including cryptocurrencies.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Tyler Winklevoss, co-founder of Gemini and Winklevoss Capital, announced a $500,000 donation to attorney John Deaton's Senate campaign on July 18.

The investor and entrepreneur laid out his case in a lengthy social media thread that was highly critical of incumbent Elizabeth Warren, characterizing the Massachusetts Senator as the "chief architect" behind the Biden administration's war on the crypto industry.

Winklevoss claimed that President Joe Biden granted Elizabeth Warren, who is a senior member of the Democrat Party, veto power over his regulatory nominees in exchange for endorsing his 2020 presidential campaign.

According to Winklevoss, this gave Warren the tremendous power to shape regulatory agencies and pull the strings behind the scenes, effectively making the heads of these agencies her puppets and giving rise to the Federal Deposit Insurance Corporation's (FDIC) Operation Chokepoint 2.0. "Crypto has the capacity to level the financial playing field and promote financial inclusion, fairness, and freedom for all," Winklevoss wrote before turning his attention back to Warren.

"Elizabeth Warren should be embracing it. Instead, she has tried to kill it. Why? Because she can’t control it. Her lust for power and control is so great that she puts it ahead of the individual consumer that she pretends to care about and protect."

Source: Tyler Winklevoss

Senator Lummis endorses another GOP candidate 

Related: Winklevoss twins refunded for exceeding Bitcoin donation limit to Trump

Wyoming Senator Cynthia Lummis, a longtime ally of the crypto industry, recently endorsed Ian Cain as Senator for Massachusetts, citing his understanding of both the blockchain and current political issues.

Cain is a co-founder of Qubic Labs, a firm that invests in tech entrepreneurs and start-ups focused on finance and government applications. According to Qubic Labs' Linkedin page, the firm is particularly interested in leveraging blockchain and other emerging technologies.

Ripple Labs sends $1 million donation to Deaton's campaign 

 In May 2024, Ripple Labs donated $1 million to Deaton's Senate campaign. The Senate candidate has a long history with Ripple Labs and made a name for himself in the crypto industry representing thousands of XRP (XRP) token holders in the ongoing lawsuit brought by the Securities and Exchange Commission against Ripple Labs in 2020.

Magazine: Pro-XRP lawyer John Deaton ‘10x more into BTC, 4x more into ETH’: Hall of Flame

Pixelverse, a non-fungible token (NFT) and gaming platform on The Open Network (TON), launched its native token, PIXFI, in a much-anticipated airdrop on July 18.

The token traded up almost 50% in the first hours after listing and approached approximately $200 million in fully-diluted market capitalization before pulling back later in the day, according to CoinMarketCap.

The PIXFI token is now listed on several centralized exchanges, including Bybit, HTX, Gate, Bitget, MEXC, according to another Pixelverse X post.

Pixelverse airdropped 10% of PIXFI’s total supply to holders of its Rare, Epic, and Legendary NFT collections, according to a post by Pixelverse on the X platform. The project will distribute another 20% of its tokens to Pixelverse and Pixelchain users over time.

Pixelverse is the project behind the hit Telegram game PixelTap, a cyberpunk-themed minigame that reportedly attracted 50 million new users in June alone. It resides on TON, a layer-1 blockchain originally developed by the team behind the Telegram messaging app and now managed by the TON Foundation.

PixelTap will be introducing the character “Pudgy” of Pudgy Penguins. Source: withblaze.app

Related: Pixelverse to put Pudgy Penguin character on Telegram mini game

The airdrop was designed to avoid the sharp selloffs that often follow free token distributions. Airdropped tokens are automatically “staked” for additional rewards and immediately withdrawing the tokens comes with a 90% penalty, Pixelverse said on X.

“Although early airdrops were seen as a way to reward real users and were welcomed by the community, farming and sybil attacking have since taken over amongst industrious users and airdrops these days usually lead to community outrage and negative price action on tokens,” Pixeverse said in its airdrop documentation.

PixelTap—along with other Web3 gaming hits such as Hamster Kombat—pioneered the “Tap-to-Earn” social gaming phenomenon, which rewards players for regular engagements. Gamers adopt in-game characters modelled after iconic memes—such as Doge from the Dogecoin memecoin—that wage upwards of 10 million battles daily, according to Pixelverse.

On July 16, Pixelverse announced that it would introduce the character “Pudgy”—the face of the popular NFT collection Pudgy Penguins—into the PixelTap game.

In May, Pixelverse closed on a $5.5 million funding round led by Delphi Ventures, Merit Circle, Mechanism Capital.

Magazine: Trauma bonding through crypto rubble puts the Lads on top: Tristan Yver, NFT Creator

US-based artificial intelligence firm OpenAI announced the launch of a new generative AI model dubbed “GPT-4o mini” on July 18.

According to a blog post from OpenAI, the new model is “an order of magnitude more affordable than previous frontier models,” and “more than 60% cheaper than GPT-3.5 Turbo.”

Performance vs power

GPT-4o mini is essentially the cost-effective version of the current top-of-the-line consumer model for OpenAI’s flagship product, ChatGPT.

Per OpenAI, the tradeoff between power and performance are minimal. Despite operating with a much smaller energy consumption footprint, GPT mini doesn’t appear to be lacking.

The company writes:

“GPT-4o mini surpasses GPT-3.5 Turbo and other small models on academic benchmarks across both textual intelligence and multimodal reasoning and supports the same range of languages as GPT-4o.”

GPT Mini

The new model supports much of the same functionality as its predecessor, however it is currently limited to text and vision. OpenAI says support for audio and video are coming soon.

It’s unclear at this time if the mini model has any environmental benefits over other models. OpenAI hasn’t released information pertaining to the actual methodology used to reduce running costs. This could indicate the benefits don’t extend to actual energy savings but instead may only apply to end-user cost savings.

Source: Sam Altman.

OpenAI at large

The launch comes amid a steady stream of activity from the company and no shortage of actions against it.

As Cointelegraph recently reported, OpenAI is allegedly working on an AI model capable of advanced reasoning relative to GPT-4o. Dubbed “Strawberry,” the new model will purportedly be capable of more humanlike responses. Reportedly, Strawberry is an extension of the company’s mysterious Q* project.

At the other end of the news spectrum, OpenAI could end up in the crosshairs of the Securities and Exchange Commission after whistleblowers called on the agency to investigate potential wrongdoing relative to the company’s use of non-disclosure agreements.

Related: OpenAI partners with lab that created atomic bomb, but for bioscience

Ether (ETH) price rallied 12.5% between July 12 and July 15, but strong resistance at $3,500 halted the bullish momentum. The subsequent correction down to $3,400 on July 18 occurred despite the United States Securities and Exchange Commission (SEC) approving two additional spot Ethereum exchange-traded funds (ETFs). Despite this positive development, Ether’s derivatives market has shown little excitement.

Analysts predict $5,000 ETH price, but is it realistic?

The SEC reportedly gave preliminary approval to at least three issuers to begin trading spot Ether ETFs on July 23. A total of eight spot Ether ETFs are awaiting final regulatory approval after amendments to the funds' S-1 filings. Bitwise Chief Investment Officer Matt Hougan expects Ether’s price to reach $5,000 by the end of 2024, citing its low equivalent inflation rate, lack of significant cost for validators, and 28% supply locked in staking.

Given the total crypto market capitalization gained 43% year-to-date in 2024, it is puzzling why Ether’s investors lack bullishness, despite the spot ETH ETF momentum. Furthermore, volumes on Ethereum decentralized applications (DApps) rose 7% in the last 30 days to $221 billion, according to DappRadar data. In comparison, competitor BNB Chain saw a 25% decline in activity, while Solana experienced a 16% drop in volumes.

Blockchains ranked by 30-day DApps volumes, USD. Source: DappRadar

In terms of DApps deposits, the Ethereum network remains the leader with 17.5 million ETH in total value locked (TVL), equivalent to $59.8 billion, according to DefiLlama data. This metric remained flat from the prior month, while competitors Solana and BNB Chain hold approximately $4.8 billion each. Additionally, activity in Ethereum’s layer 2 ecosystem increased, with the aggregate native TVL rising by 8.5% over the past 30 days to $14 billion, according to L2Beat data. Thus, Ethereum onchain data shows no signs of weakness.

From a macroeconomic perspective, the latest US Producer Price Index was 2.6% above the prior year, slightly above the market consensus of 2.3%. This indicates that the US Federal Reserve (Fed) still has work to do to curb inflation, meaning price pressure will continue to hurt demand for a while. Moreover, China’s disappointing 4.7% yearly gross domestic product growth could spell trouble for global stock markets.

Additionally, the US Department of Labor reported 243,000 initial jobless claims were filed in the week ending July 13, the highest level since August 2023. The signs of a cooling labor market increase the odds of the US Fed cutting interest rates over the next couple of months, according to Goldman Sachs chief economist Jan Hatzius, as reported by Yahoo Finance.

There is no indication that investors are exiting risk markets, which is evident as the S&P 500 index is only 2% below its all-time high from July 16. Meanwhile, Ether’s price needs to gain 43% to surpass the $4,868 mark set in November 2021.

Ether futures do not anticipate an imminent price pump

To assess whether crypto traders are gaining confidence, one should analyze the Ether futures premium. In normal markets, these contracts should trade 5% to 10% higher than regular spot markets to account for their extended settlement period.

Related: Bitcoin ETFs have 4-8X more BTC price influence than miners — Research

Ether 2-month futures contracts premium. Source: Laevitas.ch

The Ether fixed-month contracts annualized premium, or basis rate, currently stands at 11%, indicating moderate optimism. However, this indicator has not sustained levels above 12% for the past month, which is somewhat concerning given the potential inflows from the upcoming spot ETF launch in the US. For comparison, Bitcoin’s basis rate also stands at 11%, indicating there is no excessive bullishness among Ethereum investors.

Ether bulls might argue that the current lack of confidence leaves room for a surprise if the expectation of strong spot ETF net inflows is confirmed. Still, given that Ether’s price failed to rally despite a bullish scenario for risk-on assets, the ETH derivatives metrics point to investors’ lack of appetite, making a bull run above $4,000 less likely.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

A day after winding up the consultation period on stablecoin issuer regulations, the Hong Kong Monetary Authority (HKMA) announced the first participants in its stablecoin issuer sandbox. They are a company linked to a large Chinese e-commerce retailer, a local fintech and a coalition of Standard Chartered Bank, Animoca Brands and Hong Kong Telecommunications.

The participants will undergo an assessment process as the hopeful stablecoin users test their operational plans and communicate with regulators on the proposed regulatory regime. They will be prohibited from handling or soliciting funds from the public for activities related to the sandbox. HKMA deputy CEO Darryl Chan released comments on the sandbox in which he wrote:

“A key consideration is the need to propose concrete use cases for the stablecoin to help address pain points in economic activities and create value and new opportunities for our economy and financial services.”

Animoca Brands teams up with major local companies

Hong Kong-based Web3 software developer and venture capital firm Animoca Brands released a statement emphasizing the common interest of Animoca, Standard Chartered Bank (Hong Kong) and HK Telecom in developing Hong Kong’s digital asset ecosystem and its applications in the real world.

Source: Animoca Brands

The Animoca statement mentioned that the coalition will use the services of Zodia Custody. Zodia Custody, which is majority-owned by the bank and provides cold storage of digital assets, launched services in Hong Kong in October.

Local tech firms want a go at stablecoin issuance too

Jingdong Coinlink Technology Hong Kong is another participant in the stablecoin sandbox. Jingdong is an e-commerce retailer in China that does business as JD.com. It created a blockchain arm in 2018.

The final participant, RD InnoTech, is a subsidiary of RD Technologies. That company intends to “conduct testing for various use cases of its proprietary Hong Kong Dollar stablecoin, ‘HKDR,’ such as digital asset trading and cross-border trade payments.” The HKDR is described on the company’s website as “coming soon.”

Related: Don’t rule out algorithmic stablecoins, Crypto Council tells Hong Kong

RD Technologies produces an electronic wallet for fiat currencies and an app called RD ezLink that allows companies to create a verified business profile to share with financial institutions.

The HKMA and Financial Services and the Treasury Bureau released updated proposed regulations for stablecoin issuers on July7.

Magazine: 6 Questions for Yat Siu of Animoca Brands

The political action committee (PAC) Protect Progress has used more than $1.3 million to support the campaign of a Democratic candidate for Arizona’s 3rd Congressional District. 

According to expenditures filed with the Federal Election Commission, the Protect Progress Super PAC disseminated more than $1.3 million in a media buy to support Yassamin Ansari. The Arizona Democrat will compete for the congressional seat in a July 30 primary against Raquel Terán and Duane Wooten.

Though Terán’s and Wooten’s policy positions on crypto and blockchain were unclear at the time of publication, Ansari’s campaign website stated she supported “lead[ing] the way in the blockchain and crypto innovation.” The Democratic candidate also completed Coinbase’s Stand With Crypto questionnaire, suggesting she would support pro-crypto legislation if elected to Congress.

Source: Follow the Crypto

Linda Sánchez, a Democrat representing California’s 38th Congressional District and former chair of the Congressional Hispanic Caucus, reportedly called Protect Progress’ support of Ansari as a means “to buy a seat in Congress” and subvert democracy. Cointelegraph reached out to Ansari’s campaign but did not receive a comment at the time of publication. 

Protect Progress’ website states the Super PAC “supports Democratic candidates committed to securing the United States as the home to innovators building the next generation of the internet,” explicitly citing blockchain technology. The group is also affiliated with the Fairshake PAC, which has funded attack ads against Democratic candidates in California and New York.

Crypto on the ballot

In April, Protect Progress spent roughly $3.7 million to support Democratic candidates in Texas’ 32nd Congressional District and Alabama’s 2nd Congressional District. Shomari Figures and Julie Johnson will face off against Republican candidates in their respective races in the Nov. 5 general election.

Related: Vitalik Buterin warns of politicians claiming to be ‘pro-crypto’

For the first time in a US election, major party presidential candidates have taken a position on crypto, making it more likely that single-issue voters could be swayed by promises of protecting Bitcoin (BTC) mining or otherwise. Republican candidate Donald Trump will accept his party’s nomination for president on July 18, having moved from calling BTC a “scam” in 2019 to accepting campaign contributions in crypto in 2024.

Magazine: Crypto voters are already disrupting the 2024 election — and it’s set to continue

A new type of attack against mobile applications is posing a growing threat to crypto users, according to July 18 statements from Asaf Ashkenazi, CEO of cybersecurity firm Verimatrix.

The new threat is called an “overlay attack.” It works by creating a fake interface on the user’s device. This interface is then used to phish information from the user, including usernames, passwords, and even 2FA codes, Ashkenazi stated. Once this information is obtained, the attacker uses it to submit information in the real interface for a target application.

To carry out an overlay attack, the attacker needs to first convince the user to download an application on their mobile device. Screen overlay exploiters are usually disguised as games or other fun applications. When the user opens the application, it appears to work as intended.

“Whatever game it is, [it] could be even [...] a copy of a popular game and it will do this functionality” Ashkenazi stated. Because the app works as intended, the user generally doesn’t suspect that it is malicious.

In fact, the app “doesn’t have any malicious activity besides one thing, it monitors when [...] the target app is launched.” The target app could be a bank, crypto exchange, crypto wallet, or other sensitive application. Once the target app is launched by the user, the malicious app creates an “exact same copy” of the interface used in the target app.

For example, if the user launches their exchange app, the malicious app creates a fake user interface that looks exactly like the exchange interface, but is in fact controlled by the attacker. Whatever information the user enters into the fake interface is captured by the attacker, and this information is then passed into the real app, giving the attacker access to the account.

Diagram of an overlay attack. Source: Verimatrix

Ashkenazi warned that two-factor authentication (2FA) usually cannot protect the user against this kind of attack. If 2FA is enabled, the attacker will simply wait for the user to enter their text message or authenticator app code, which will then be captured just like the other credentials.

Related: Authy 2FA app leaked phone numbers that may be used for text phishing

In many cases, the malicious app will cause the user’s screen to go dark, making them believe that their phone has run out of power or crashed. “Once they [get] into your account, they put the black screen on your phone,” the Verimatrix CEO stated. “So your phone is still running, but you cannot see anything[,] [s]o you think that your phone is dead.” This gives the attackers time to drain the victim's accounts, as they are unlikely to realize they are being attacked until it is too late.

Ashkenazi stated that banking apps are one of the biggest targets of overlay attacks. However, crypto exchanges are also at risk since they rely on the same username/password/2FA paradigm that bank apps use. The CEO claimed he had not seen a non-custodial crypto wallet app targeted by this attack, but that could change in the future. 

Ashkenazi emphasized that overlay attacks are performed on the user’s own device, which contains a wallet’s private key, so requiring a cryptographic signature for each transaction will not necessarily protect the user.

Verimatrix has attempted to work with Google to remove overlay attack apps from the Google Play store. But catching all of them is difficult. Unlike most malicious apps, overlay attack apps do not perform any malicious actions until after the user loads the target app.

For this reason, these apps usually appear to be innocent when they are screened by malware detection programs. “They see a game, they don't see the malicious activity because it doesn't do anything,” Ashkenazi stated.

He recommended that centralized services should use monitoring systems to detect overlay attacks and block them from within the application’s database. This is one of the services Verimatrix provides to clients.

Overlay attack detection. Source: Verimatrix

However, he suggested that consumers can take action to protect themselves even if their favorite apps do not use such monitoring services.

First, users should be skeptical of applications that appear too good to be true. “If you see something that gives you games that usually cost money or something that is really good and it's free, [...] you need to suspect it,” he stated. Second, users should not give applications permissions that they don’t need, as overlay attacks can’t be performed without a user giving an app a permission to create an overlay.

Third, parents should consider getting a separate mobile device for their children, as Verimatrix found in its research that many overlay attack apps are downloaded by children without their parents’ knowledge. This is because attackers often disguise their apps as games that appeal to children.

“If you can afford it and you have something that is fun for the kids, don’t mix,” the CEO stated. “Let them do the fun. But then don't access anything important from that device.”

Malware continues to threaten crypto users. On March 29, malware database Vx-underground warned that Call of Duty cheaters were having their Bitcoin stolen by their cheat software. In January, another set of crypto-draining malware targeted users of pirated apps that run on macOS devices.

Magazine: Crypto-Sec: Evolve Bank suffers data breach, Turbo Toad enthusiast loses $3.6K

Following the $11.6 million exploit of the Li.Fi protocol, an API used to bridge and swap digital assets across blockchains, the Li.Fi team released an update outlining the technical details of the breach.

According to the security update, the deployment of a new smart contract facet was ground zero for the malicious attack. A vulnerability in the code allowed users calling the smart contract to initiate calls to any contract without prior validation.

This function is a result of code taken from the LibSwap library, used to facilitate calls between decentralized exchanges, service providers, and clients to coordinate the asset bridging and swapping processes.

Normally, these calls are screened against whitelisted addresses to ensure validation. However, Li.Fi explained that human error in deploying the offending smart contract facet was the root cause of the vulnerability exploited by the malicious actor.

The Li.Fi team confirmed the attack occurred on the Ethereum and Arbitrum networks and affected 156 wallets with the “infinite approvals” option turned on. Users without this option turned on were not affected by the exploit.

Source: Li.Fi protocol

In statements to Cointelegraph, spokespeople for Li.Fi said they contained the exploit, addressed the critical vulnerability, and contacted the proper law enforcement authorities to trace stolen funds. At the time of this writing, the issue has been fixed, and Li.Fi is operating normally.

Related: Lazarus is moving millions from $305M DMM Bitcoin hack — ZachXBT

Not the first time

In March 2022, Li.Fi was hit by a similar exploit affecting users with the “infinite approval” option turned on. The hackers drained $600,000 from the protocol from 29 wallets before the vulnerability was addressed.

The protocol was quick to reimburse investors for their losses, refunding 24 wallets directly from its treasury and offering the remaining five wallets a voluntary compensation plan akin to that received by early angel investors of Li.Fi.

Crypto hacks put the damper on the industry in 2024

Unfortunately, hacks and exploits continue to plague the crypto industry and the decentralized financial sector, in particular.

A chart comparing 2022-2024 losses from crypto hacks. Source: TRM.

According to a recent report from security firm Cyvers, 2024 losses from crypto exploits are nearing $1.4 billion, driven primarily by phishing attacks, and have risen sharply since 2023.

Magazine: Best and worst countries for crypto taxes — plus crypto tax tips

Solana memecoin Dogwifhat (WIF) is back among the top 50 cryptocurrencies by market capitalization after experiencing a 41.44% uptick over the past week.

Data from Cointelegraph Markets Pro and TradingView shows WIF trading at $2.33, up 10% over the 24 hours.

WIF/USD daily chart. Source: TradingView

In comparison, the total memecoin market capitalization is down 5.3%, with most of the top-cap cryptocurrencies in this sector posting losses on July 18, according to data from CoinGecko.

“Dogwifhat is back to the top 50 coins, sitting on a $2.4B cap with just another 2x from hitting a new ATH,” declared independent analyst Eldorado OPM in a July 17 post.

“$WIF is a $40B cap project, which means it still got more energy to grow above current price.”

Dogwifhat remains the fourth largest memecoin by market capitalization, positioned below Pepe (PEPE), which has nearly two times the market cap of Dogwifhat at $4.87 billion.

Meanwhile, pseudonymous analyst Altcoin Sharper spotted WIF’s price trading at $2.36 and said that if WIF breaks above $2.50, it would “go back within the trading range between 2.40-$3.00.”

“It’s pretty hard to see what the levels are in that area, but I think this goes higher as long as BTC plays nice”

WIF/USD daily chart. Source: Altcoin Sherpa

The price spike has seemingly caused futures traders to hold back from betting on Dogwifhat’s near-term direction. Open Interest (OI) — the total value of all outstanding or unsettled WIF futures contracts across exchanges — has dropped 4.1% from $296.67 million to $284.32 million over the last 48 hours, according to CoinGlass data.

If the memecoin corrects by approximately 3% to $2.235, around $7.87 million in long positions will be wiped out.

WIF exchange liquidation heatmap. Source: Coinglass

Meanwhile, sentiment surrounding memecoins remains positive in 2024 as this asset class remains among the top narratives in 202, according to a recent report by CoinGecko.

Most popular crypto narratives by traffic share in Q2 2023. Source: CoinGecko

Memecoins have also emerged as one of the biggest trends in the crypto industry in 2024, posting the highest returns of 1,312% on average across the top tokens by market capitalization.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

According to analysts, Bitcoin has shown a number of bullish signals on multiple timeframes, suggesting that the “push higher continues” following a 10% rally over seven days. 

Despite the recent drawdown, which saw Bitcoin’s (BTC) price lose 16% of its value between July 1 and July 5, setting a low at $53,499, “Bitcoin has rallied ~21%,” Glassnode co-founders Negentropic wrote in a July 18 X post.

They were referring to Bitcoin’s meteoric rise over the weekend, which reached a high of $66,139 on July 17.

Negentropic highlighted that the rally has seen the price of the pioneer cryptocurrency flip several levels into support, including the 200-day exponential moving average (EMA) currently at $58,448 and the $62,600 area embraced by both the 50-day and 100-day EMA.

The analysts said that they remain bullish as they set their eyes on the “next likely level of 69K before 74K and onward.”

“BTC’s push higher continues!”

BTC/USD daily chart. Source: Negentropic

Negentropic also observed that the daily relative strength index (RSI) “broke the downside momentum after a bullish divergence,” which suggested strength among buyers.

Analyst and podcast host Scott Melker, known as the “Wolf of All Streets,” made similar observations on lower time frames, saying that the four-hour RSI signals a clue as to where the market would head next.

Source: The Wolf Of All Streets

Analysing the Bitcoin historical index, anonymous analyst Moustache was optimistic of further upside after BTC price produced a bullish cross on the monthly time frame.

“It’s been almost 8 years since $BTC last saw this bullish cross,” Moustache declared in a July 18 post on X, adding that it was followed by the 2017 bull run. This suggested that if the bullish cross holds, Bitcoin could lead the rest of the market in a parabolic uptrend.

“Do what you want with the information, I’m just saying it happened again”

BTC/USD historical index. Source: Moustache

Bitcoin establishes support around $64,000

Data from Cointelegraph Markets Pro and TradingView shows Bitcoin price trading at $63,498, after being rejected from the $65,000.

After reaching $66,000 on July 17, BTC price recoiled back below $65,000 and retested this level for most of July 18 before dropping lower.

Chartered market technician Aksel Kibar said, $65,000 was acting as a “strong resistance,” and the fact that the BTC/USD pair is not significantly “backing from it” is “very bullish long-term. ”

“Sticking to a resistance and no intention of selling off is usually a sign of a pending breakout.”

Source: Aksel Kibar

Data from IntoTheBlock supported Bitcoin’s upside with the In/Out of the Money Around Price (IOMAP) model showing that Bitcoin price enjoyed relatively strong support on the downside, compared to the resistance it faced in its recovery path.

For example, the immediate support provided by the 100-day and 200-day EMAs around $62,700 is close to the zone where approximately 840,920 BTC were previously bought by 1.7 million addresses. Increased demand from this zone is likely to push the price higher.

Bitcoin IOMAP chart. Source: IntoTheBlock

This suggested that the path with the least resistance for Bitcoin is upward.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The payments application Cash App, launched by Block, will be ceasing operations in the United Kingdom after six years.

In a July 18 notice on the payment app’s terms of service, Cash App UK said it would close starting on Sept. 15. According to the app, users can expect “their funds remain safeguarded until withdrawn, even after our service closes.”

“We do not make decisions like this lightly, as we know they impact our customers, our partners, and our team members who have helped us build to where we are today,” said the app.

Message sent to Cash App UK users on July 18

Related: Cash App Bitcoin revenue tops $2B in the first quarter

Former Twitter CEO Jack Dorsey founded Square in 2009, with the firm rebranding to Block in 2021. Cash App, one of Block’s products, allows users to purchase cryptocurrencies like Bitcoin (BTC). The firm reported more than $2.5 billion in revenue from BTC on Cash App in the fourth quarter of 2023.

Magazine: Coinbase will not mention ‘crypto’ in five years: Avichal Garg, X Hall of Flame

Asset manager 21Shares has launched an Injective exchange-traded product (ETP) on Euronext exchanges. Injective thus joins a small group of cryptos available to investors through traditional financial products.

The Injective Staking Exchange Traded Product (AINJ) will track the performance of Injective (INJ) and capture staking yield for reinvestment in the ETP. Injective is a decentralized blockchain designed for financial applications.

The ETP will be physically backed by INJ kept in cold storage by a custodian. It will trade on the Euronext Paris and Euronext Amsterdam exchanges with the support of 25 financial institutions, including such large players as Interactive Brokers, Saxo Bank, Swissquote and eToro.

AINJ has $128.6 million in assets under management and charges a fee of 2.5%. Securities listed on Euronext markets are regulated under the single Euronext Rule Book, which harmonizes all applicable regulations where it operates.

Source: Injective

One more fund with staking 

Because Injective uses a proof-of-stake consensus mechanism, AINJ can stake INJ to secure the network and receive rewards for it. 21Shares stated in a report released last year that it stakes only a portion of the assets underlying its ETPs to guarantee liquidity for investor redemptions.

According to Coinbase, INJ is paying an estimated 19.38% staking reward at the time of writing, and the rate is falling. INJ has a market cap of $2.4 billion.

Related: DeFi to reach mass adoption via institutional participation, DEX founder says

A variety of staking ETPs are available in Europe. 21Shares launched an Ethereum staking ETP in 2019. It launched the Staking Basket Index ETP (STAKE) with seven underlying coins last year. CoinShares began offering eight ETPs with staking in Germany last year.

Fidelity proposed a similarly structured Ethereum fund in the United States, but later changed its S-1 application to the Securities and Exchange Commission to remove the staking feature. Grayscale introduced the Grayscale Dynamic Income Fund targeted to qualified US investors in March. Grayscale specified that the fund would prioritize staking income over capital growth.

A boost  for INJ

Injective debuted on the Cosmos ecosystem in 2021 with backing from Binance and investor Mark Cuban. It integrated with the Ethereum and Solana chains in 2022. In an overview published on July 4, 21Shares noted that the chain has only 60 validators and:

“Ranking outside the top 50 in TVL [total value locked] at $105M among all chains indicates that Injective needs to increase its user base and liquidity to compete effectively with higher-ranking protocols.”

It has competitive advantages in its open liquidity pool and real-world asset module, the report added.

Magazine: Historic turning point for crypto, Ethereum ETFs, FIT21, Trump: Hodler’s Digest, May 19-25

Outlier Ventures and Morgan Creek Digital have teamed up to launch their first accelerator program in Latin America. 

According to a July 18 announcement, the chosen teams will receive up to $200,000 in investment funding along with three months of mentorship from industry experts in exchange for 6% equity or future token supply.

Other perks include token engineering support, an optional $30,000 interest-free repayable loan to help with initial legal costs and access to a network of investors.

The program targets startups working on consumer fintech solutions, borrowing and lendin applications, on-and-off ramps, cross-border payments and other financial solutions based on blockchain innovation. Support will be offered in English, Spanish, and Portuguese during the 12-week virtual program, which begins in September.

“We have seen firsthand the incredible founders in LATAM that are already in our portfolio and we are excited to focus on a program specifically for the region, as we continue to help build Web3 ecosystems globally,” said Benjamin Meyer, chief growth officer at Outlier Ventures.

Source: Outlier Ventures

According to Outlier, fintech companies in Latin America receive $5 billion of the $7.5 billion invested in the region, with Latin Americans receiving 20% of the total global remittance volume in 2021.

The Web3 market in the region was estimated at around $520 million in 2023 and is projected to reach a value of $7.93 billion by 2032, with a compound annual growth rate (CAGR) of 54.3%.

“As Latin America’s Web3 startup ecosystem continues to evolve and mature at incredible pace, we are looking forward to the kickoff of this program and supporting the cohort throughout their journey,” noted Mark Yusko, managing partner of Morgan Creek Digital.

Outlier Ventures claims to have over 300 Web3 startups in its portfolio. The Middle East and North Africa (MENA) region will also be included in Outlier’s accelerator program later this year.

Morgan Creek Digital is actively involved in the Web3 space, focusing on investments in blockchain technology, artificial intelligence, and data-centric chips. The company recently announced plans to raise $500 million for a new venture fund dedicated to AI and blockchain.

Magazine: ‘Bitcoin Layer 2s’ aren’t really L2s at all: Here’s why that matters

Meta is the latest US-based tech giant to pause artificial intelligence releases in the European Union. The company joins Apple, who in June announced that it would be withholding several AI-powered iPhone features from customers in the EU.

Neither company, so far, has given a timeline or described what, exactly, needs to happen for the embargoes to lift, but both companies have cited “regulatory uncertainty” as the catalyst.

In a statement sent exclusively to Axios on July 17, a Meta spokesperson said:

"We will release a multimodal Llama model over the coming months, but not in the EU due to the unpredictable nature of the European regulatory environment."

As Cointelegraph recently reported, Apple gave a similar statement in June. Citing regulatory uncertainty at the time, the Cupertino company claimed that the EU’s Digital Markets Act (DMA) could “force us to compromise the integrity of our products in ways that risk user privacy and data security.”

EU laws

While the two cases are similar, the companies appear to be protesting different aspects of EU law. At the heart of Apple’s issue lies language in the DMA that requires so-called “gatekeepers” such as Meta and Apple to develop products and services in such a way that associated software works on rival platforms. This, essentially, is to stop one company from using proprietary technology to corral the consumer market.

Meta, however, seems to be concerned over language in the EU’s General Data Protection Regulation (GDPR) limiting how companies can utilize user-generated data.

Meta artificial intelligence

Meta was ordered by the Irish Data Protection Commission, the independent regulator responsible for enforcing GDPR, In June to pause its AI assistant rollout in the EU over data privacy concerns.

The company uses data generated by Facebook and Instagram users to train its AI models, however Meta claims it does so only with consent and that users have the option to opt-out.

According to Axios, Meta still intends to roll out future AI products — including an upcoming version of its Llama AI model that supports audio and video — in the United Kingdom. Despite the UK’s GDPR being nearly identical to the EU’s, Meta reportedly claimed that EU regulators were working much slower and that it foresaw no problems with its data collection policies in the UKs regulatory environment.

Related: Meta faces backlash in EU for AI data usage without user consent