A US judge this week ordered a convicted fraudster to pay a $5 million civil penalty and $31 million in restitution related to a massive crypto and forex scheme he orchestrated. New York resident William Koo Ichioka kicked off his scheme in 2018 and swindled tens of millions of dollars in investment funds from more […]
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Galaxy Digital CEO Mike Novogratz believes regulators have got it "completely upside-down" on crypto vs AI regulation.
Mike Novogratz, the CEO of digital asset investment firm Galaxy Digital told investors he is shocked over the amount of regulatory attention for crypto rather than artificial intelligence (AI), a technology he believes will trigger a “deep fake” identity crisis.
The chief executive explained at the firm’s fourth-quarter conference call on March 28 that the U.S. government has it “completely upside-down” in choosing to focus so much on crypto regulation and yet turn a blind eye to AI:
“When I think about AI, it shocks me that we’re talking so much about crypto regulation and nothing about AI regulation. I mean, I think the government’s got it completely upside-down.”
This concern appeared to stem from Novogratz’s fear that AI will trigger a “deep fake” identity crisis.
“In lots of ways, one of the best use cases for crypto is going to be identity around AI, because pretty soon you’re going to get a fake Mike Novogratz, hopefully with hair [...] how do you prove identity in a world like that?” he said.
AI portrait Van Novo pic.twitter.com/ESnenSDmdb
— Mike Novogratz (@novogratz) July 16, 2022
However, he believes blockchain-based applications will play a “huge role” in combating some of the issues presented by AI:
“Crypto and blockchain is going to have a huge role in that. It is dumb to think that we should cache this industry because of Sam Bankman-Fried in his Bermuda shorts, period.”
That said, the U.S. Commodity Futures Trading Commission recently engaged in talks about AI and its impacts with the Technology Advisory committee last week.
As for the current state of the market, Novogratz said “seller exhaustion” and the reopening of China has helped the crypto industry recover remarkably thus far in 2023.
“All the selling that needed to get done got done, right? There was so much bad news, if you had to sell, panic selling and just the nervousness of “Oh my God! This thing could go to zero,” and people were in sheer panic, you had seller’s exhaustion,” he said.
Following a tough zero-COVID approach by the Chinese government, Novogratz said he has since noticed more crypto activity coming out of China.
“China took the regulatory boot off the necks of their tech companies, and that includes crypto, [so] you’re seeing more activity from Asia.”
Related: Could Hong Kong really become China’s proxy in crypto?
From a more technical lens, Novogratz was confident that the crypto market will continue in an upwards trajectory throughout the remainder of 2023:
“The market feels strong, and when I look at it technically on charts, we’ve had big weekly closes. I’m surprised to hear myself say this, given where my mindset was in late December, but it would not surprise if we were substantially higher three months, six months, nine months from now.”
The strong rebound in the crypto market reflected well on Galaxy’s balance sheet too with the firm today revealing in its quarterly results that it finally swung back into profit after a tough loss of $1 billion in 2022.
Magazine: Crypto winter can take a toll on hodlers’ mental health
Randall Crater was ordered to pay back the millions lost by victims of his fraudulent crypto scheme and spend 100 months in jail followed by a three-year supervised release.
Founder of “My Big Coin” Randall Crater has been sentenced to 100 months in prison and ordered to pay over $7.6 million to the victims of his fraudulent scheme.
The U.S. Department of Justice said on Jan. 31 that Crater was sentenced by United States District Court Judge Denise Casper in Massachusetts.
The sentence comes after Crater was convicted by a federal jury on July 21 on four counts of wire fraud, three counts of unlawful monetary transactions and one count of operating an unlicensed money-transmitting business.
Randall Crater, the founder of "My Big Coin," a purported cryptocurrency company, was sentenced today to more than eight years in federal prison for a multi-million dollar fraud scheme uncovered by #FBI Boston and @USPIS_BOS. https://t.co/567NYPndRU pic.twitter.com/a3eKaogij4
— FBI Boston (@FBIBoston) January 31, 2023
My Big Coin was founded by Crater in 2013 and falsely marketed as a cryptocurrency payment service, luring victims between 2014 and 2017.
Crater claimed the coins on My Big Coin were fully functional cryptocurrencies backed by gold and that the platform had a partnership with Mastercard.
Crater also marketed the “My Big Coin Exchange,” advertised as a crypto exchange where the coins could be swapped for U.S. dollars and other fiat currencies.
A significant portion of the $7.6 million obtained by Crater and his marketing team went toward a house, several cars and over $1 million in antiques, artwork and jewelry.
U.S. Attorney Rachael Rollins said in a statement the damage done by Crater inflicted a serious amount of trauma and financial hardship on his victims:
“For nearly four years, Mr. Crater perpetrated a brazen fraud scheme that preyed on investors and customers who put their faith in him and his fake business, resulting in victim losses of over $7.5 million.”
“His lies and deception inflicted real trauma, pain and hardship on the lives of 55 individual victims and their families who funneled their money into bank accounts Mr. Crater controlled and used to finance his extravagant lifestyle,” she added.
Related: 800 victims of ‘massive’ Bitconnect fraud to receive $17M restitution
Even after his conviction, Crater continued to protest his innocence, stating in an Oct. 21 YouTube video that a My Big Coin credit card did in fact exist and claiming that an investor testified under oath to having used the card multiple times.
Legal action against Crater dates back to Sept. 25, 2018, when now-former Judge Rya Zobel of the Massachusetts District Court ruled against a motion to dismiss a case launched by the U.S. Commodity Futures Trading Commission (CFTC).
The Department of Justice officially filed criminal charges against Crater on Feb. 19, 2019.
After Crater’s 100-month tenure behind bars, he will be subject to a supervised release for the following three years.
The U.S. Commodity Futures Trading Commission (CFTC) has filed market manipulation charges against the man behind the $100 million exploit of Mango Markets, a Solana (SOL)-based decentralized finance (DeFi) trading platform. In a complaint filed on Monday, the CFTC argues that Avraham Eisenberg “engaged in a manipulative and deceptive scheme to artificially inflate the price […]
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The now-defunct crypto hedge fund Three Arrows Capital (3AC) is reportedly continuing to face legal scrutiny from US regulators months after it filed for bankruptcy in July. Citing people familiar with the matter, Bloomberg reports that the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are looking into the possibility […]
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The head of the U.S. Commodity Futures Trading Commission (CFTC) is calling for regulating many digital assets as commodities. CFTC chair Rostin Behnam is supporting the proposed U.S. Senate bill 4760, the Digital Commodities Consumer Protection Act of 2022 (DCCPA), to give his agency oversight authority to regulate cryptocurrency assets the same way they do […]
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