The Estonian government has approved the extradition of HashFlare founders, Ivan Turogin and Sergei Potapenko, who are now set to face numerous charges on US soil. Despite a previous reprieve by an appeals court that nullified the initial ruling, the two entrepreneurs are once again in line for extradition.

In this instance, the Estonian government has bolstered its case with evidence, re-establishing the path for the founders to confront the consequences of their multi-million dollar scam in the United States.

Justice Prevails

Despite legal setbacks in the past, Estonia has now given the green light for the extradition of the masterminds behind the $575 million HashFlare Ponzi scheme. The initial approval was temporarily halted when the Tallinn Circuit Court intervened in November 2023, citing an inadequate investigation into essential circumstances and ordering compensation for the founders. However, armed with evidence concerning US detention conditions, the Estonian government has satisfied the necessary conditions to proceed with the extradition.

The defunct Bitcoin cloud miner, HashFlare, collapsed in 2019 after amassing $575 million. The charges against Turogin and Potapenko in the US include 18 counts of conspiracy, wire fraud, and conspiracy to commit money laundering, with potential sentences of up to 20 years in prison if convicted.

Cracking Down On Bad Actors

The founders were arrested in Estonia in 2022 following a joint investigation by US and Estonian law enforcement, leading to complex legal proceedings spanning multiple jurisdictions. Additionally, Turogin and Potapenko face allegations of obtaining $25 million via investors for creating a digital bank named Polybius.

The US Department of Justice contends that HashFlare misrepresented its capabilities, asserting the company lacked claimed equipment and possessed less than 1% of the computing power it professed to have. These charges highlight the dedication by the government toward regulating the crypto industry and cracking down on illicit activities, emphasizing the commitment to safeguarding investors and users.

Equities linked to Bitcoin exposure recently witnessed a substantial decline with this downturn following the initial excitement surrounding the introduction of cryptocurrency exchange-traded funds (ETFs) in the United States. Despite the launch of several Bitcoin ETFs in 2024, the price of BTC has not stabilized, down over 5% since the year began. 

Companies with substantial Bitcoin holdings, such as MicroStrategy and Coinbase, have observed a decrease in their stock prices in the past month. These stocks serve as a means for investors to participate in cryptocurrency markets without direct investment in digital assets. However, with the pressure on Bitcoin, the repercussions have extended to associated stocks.

The Impact On Crypto Stocks

MicroStrategy saw a 25% reduction in stock value during December 24th, 2023, to January 24th, 2024, with shares declining to $450.99. On January 10th, the US Securities and Exchange Commission (SEC) approved the launch of spot Bitcoin ETFs, resulting in the introduction of nine new funds. MicroStrategy, known for its significant Bitcoin holdings of 189,150 BTC valued at $7.5 billion, experienced the impact of this development.

During the same period, Coinbase witnessed a 29% drop in share price since its IPO in 2021, with shares trading at $121.34 as of the latest report this past Wednesday. Even stocks in the mining sector, typically rallying with the crypto market, were not immune.

Riot Platforms, a Bitcoin mining company holding over 7,358 Bitcoin, experienced a 41% decrease in stock value over the past month, trading just above $10. Marathon Digital Holdings Inc., specializing in cryptocurrency mining with 13,716 BTC, faced a 38% decline in stock price to $16 by January 24th, 2024.

The Struggle For Stability

The combined trading volume for Bitcoin spot ETFs, including products by BlackRock, Grayscale, Fidelity, Bitwise, and others, reached over $20 billion earlier on in the week.

According to a JPMorgan report, the nine new funds attracted approximately $270 million in inflows not too long ago. When factoring in outflows by spot BTC ETF by Grayscale Investments, the net outflows amounted to about $153 million on that day. The combined ten funds have experienced net withdrawals for three consecutive days, transitioning to an ETF after SEC approval. Since their inception, the nine new ETFs have attracted $5.2 billion in inflows, countering the $4.4 billion outflow by GBTC.

Blockchain developers recently revealed a novel platform aimed at propelling Bitcoin into the contemporary realm of decentralized finance. The newly introduced platform, labeled BitcoinOS, is positioned as a public good utilizing sovryn rollups to establish a foundational layer for decentralized applications on Bitcoin. The founders emphasize that any developer can contribute to it and create new tools using their preferred programming language.

Understanding The Technology

Sovryn rollups will reportedly leverage Bitcoin as a data availability layer, in contrast to ZK rollups where the rollup is governed by a smart contract on the parent chain, explained Edan Yago, a core contributor to BitcoinOS. Despite Bitcoin having a reputation for high security, its primary blockchain is acknowledged for its sluggishness compared to other blockchains and its elevated costs during periods of heightened activity. Furthermore, its restricted programming language has long impeded the implementation of truly decentralized transaction scaling solutions.

While existing technologies like sidechains can facilitate quicker transactions, they necessitate users to trust centralized, federated bridges to avoid misappropriation or freezing of their funds. Additionally, they encounter challenges related to limited liquidity with other blockchains, resulting in liquidity siloes for DeFi projects that have yet to gain traction. In contrast, BitcoinOS claims to offer everything developers desire in a scaling solution with minimal compromises, namely scalability, programmability, interoperability, and a nearly trustless security model.

A Reliable System

The integrated fraud system of the platform permits even a single honest participant to thwart fraudulent transactions, as per a press release via Sovryn, the DeFi project behind BitcoinOS. The system enables comprehensive smart contracts, allowing any developer to launch their own rollup, and all applications developed on these various rollups can be combined and interoperable with other rollups.

This implies that projects developed on BitcoinOS can seamlessly share users and activities since all rollups are constructed via the same modular components. Sovryn initially emerged as a protocol on Rootstock, despite feelings of limitations. Nevertheless, it has processed $2.2 billion in trades and loans and maintains $46.82 million in total value locked (TVL), according to DeFi Llama.

Canadian Prime Minister Justin Trudeau was recently deemed to have violated the local Charter of Rights and Freedoms by a judge who ruled against his use of the Emergencies Act in 2022 to quell the infamous truck drivers COVID-19 protests and Bitcoin fundraising.

The Context

In February 2022, a multitude protested mandates mandating full vaccination for truck drivers crossing the Canada-US border. Blockades on crucial roads paralyzed Ottawa, prompting a state of emergency declaration by the mayor. Trudeau then invoked the 1988 Emergencies Act to ban gatherings and cease crowdfunding efforts.

Despite a previous public inquiry in February affirming the alleged appropriateness of the government in invoking the Act, pressure by the Canadian Civil Liberties Association and the Canadian Constitution Foundation prompted a judicial review. Earlier this week, a federal court concluded that Trudeau and his cabinet were indeed unjustified in their response.

Escalating Tensions

Canadian truckers, enjoying widespread support, faced disrupted crowdfunding attempts on GoFundMe. Consequently, the Freedom Convoy 2022 shifted to the Bitcoin-powered platform Tallycoin, raising at least $540,000, including a 1 BTC donation by Kraken Chief Jesse Powell. The initiative, named Honk Honk Hodl, emphasized resistance exhibited by Bitcoin to censorship in contrast to traditional financial structures.

The pivotal ruling by Justice Richard Mosley has become ammunition for the various political opponents of Trudeau, particularly as Canada approaches its upcoming elections next year, where the Conservatives are polling significantly ahead of the Liberal party. While Mosley acknowledged having more information than the government did when invoking the act, Deputy Prime Minister Chrystia Freeland announced that the government intends to appeal the decision.

Trezor, the popular hardware wallet provider, recently verified that the source of a series of harmful emails sent to users in the past 12 hours was an unauthorized use of its third-party email provider. The company detected an unauthorized email posing as Trezor, originating through a third-party email service they employ. The deceptive email, sent by noreply trezor.io, prompts users to update their network to avoid fund loss, providing a harmful link that leads to a webpage asking for their seed phrase.

A Seed Of Evil

While Trezor has not confirmed any fund losses via the phishing attempt, it successfully deactivated the malicious link, ensuring user funds are secure unless the recovery seed was entered. For those who entered their seed phrase though, Trezor advises an immediate fund transfer to a new wallet. The investigation also revealed an unauthorized person accessed the email database of newsletter subscribers, utilizing the third-party email service employed by Trezor to send the deceptive emails.

Notably, various experts believe that a recent cybersecurity incident involving MailerLite on January 23rd, 2024, resulting in phishing emails with branded domains, including those of Cointelegraph, WalletConnect, and Token Terminal, may indeed be connected to this attack.

Damage Control

Although it remains unclear whether Trezor uses the same email domain provider, losses exceeding $3.3 million have occurred due to these phishing attacks. Some speculate the recent assault might be linked to the security breach of the Trezor support portal on January 17th, 2024, exposing contact details of nearly 66,000 users.

On January 24th, digital asset lawyer Joe Carlasare described the phishing email as a sophisticated scam after personally receiving it. Trezor had cautioned users about a phishing attack last year, and in May, cybersecurity firm Kaspersky observed a fake hardware wallet impersonating Trezor in the market, attempting to steal funds through a manipulated microcontroller, taking control of user private keys.

Kaspersky Lab recently uncovered a sophisticated malware attack on Macbook users in the crypto realm. Cybercriminals repackaged cracked applications into the prevalent PKG files which are present on Macbook devices, distributing them through pirated software channels. Users unknowingly triggered the infection process, granting administrative privileges by inputting a password into a seemingly harmless application named Activator.

The Context

The malware, after examining the system, communicated with a command-and-control server, concealing its activities within DNS server traffic. It executed arbitrary commands received as Base64-encoded Python scripts, extracting sensitive information by the compromised system. Despite the C2 server being unresponsive during analysis, ongoing script updates indicated ongoing development by the malware operators.

It is worth mentioning that the infected sample established communication with a C2 server by generating a unique Uniform Resource Locator (URL) through a combination of hardcoded words and a random third-level domain name. This method allowed the malware to hide its activities within normal DNS server traffic, ensuring the payload download.

Malware Is To Blame

Notably, the malware targeted popular crypto wallets like Exodus and Bitcoin-Qt, replacing them with infected versions to steal wallet information. Kaspersky highlighted the persistent threat of distributing cracked applications to compromise numerous computers, exploiting trust during software installation. The innovative techniques utilized by the malware, like storing the Python script in a TXT record within a DNS server, were also underscored.

Additionally, the malware featured functionalities specifically targeting the aforementioned popular crypto wallet applications and when these applications were identified on the infected system, the malware sought to replace them with infected versions sourced via a distinct host. These compromised crypto wallets included mechanisms to pilfer wallet unlock passwords and secret recovery phrases through unsuspecting users.

US SEC Commissioner Hester Peirce opines that obtaining approval for spot Ether ETFs will not necessitate a legal battle. In response to a recent inquiry about whether the SEC will defer spot Bitcoin ETF approvals until a court case progresses through the legal system, Peirce emphasized that such an approach is not part of their approval process.

According to Peirce, the SEC should apply standard considerations to these products, similar to how they evaluate other comparable products. She emphasizes that the approval process should not rely on a court determining the arbitrariness and capriciousness of their approach. This statement follows the recent SEC approval of nearly a dozen spot BTC ETFs, which, while not entirely unexpected, raised uncertainties about the fate of spot Ether ETFs.

Criticizing The SEC

Entities like BlackRock, Ark 21Shares, and Grayscale have expressed interest in spot Ether ETFs. Grayscale, mirroring its strategy with the spot Bitcoin ETF, seeks to convert its Ethereum Trust into an ETF. However, SEC Chair Gary Gensler, in his comments on spot Bitcoin ETF approvals, expressed reservations about further approvals, emphasizing that the recent decision pertains specifically to ETPs holding one non-security commodity, namely Bitcoin.

Senator Warren has criticized the approval by the SEC pertaining to the Bitcoin ETFs, stating that the Commission is wrong on the law. The stance taken by Gensler indicates a cautious approach to approving listing standards for crypto asset securities.

Peirce Supports Crypto

Contrary to Gensler, Peirce believes that the SEC missed numerous opportunities over the past decade to approve these products. She argues that if the agency had applied the standards used for other commodity-based ETPs, these products could have been approved years ago. Peirce asserts that the reluctance shown by the regulatory agency persisted until a court intervention forced them to reconsider.

Known for her outspoken views on the stringent crypto approach adopted by both Gensler and the SEC in general, Peirce previously called out the enforcement-focused regulation strategy of the agency, stating that there appears to be a lack of coherence in many of the cases brought forward.

The cryptocurrency market continues to witness a general downward trend, with Bitcoin falling below the $40,000 threshold, which it had been resisting for several days. Currently, Bitcoin is trading at just above the $40K mark, but experts believe this will not last long.

The Main Reason

Taking an overview, there has been an approximately 5% decrease in BTC price over a 24 hour period. The trend extends to altcoins as well, with many experiencing declines at rates comparable to Bitcoin. The main reason behind this decline is linked to the outflows by the Grayscale GBTC product, leading to substantial BTC sales.

Recent developments reveal that the FTX bankruptcy management has sold around $1 billion worth of BTC since GBTC transitioned into a spot ETF. Following the sell-off, the GBTC product now holds 563,000 BTC, compared to the previous 613,000 BTC when it functioned as a spot ETF.

Institutional Manipulation

In terms of liquidations, the recent downturns have resulted in a total of $65 million in liquidation in the cryptocurrency market within a very short amount of time. Out of this, $63 million represents liquidations in long positions, while $2 million pertains to short positions.

Breaking down the long position liquidations, $25 million occurred in Bitcoin, $12 million in Ethereum, and $4 million in Solana. Many believe that this is primarily because of BlackRock manipulating the price so they can buy more BTC for cheaper. Some have even said that there is little to no reason for a correction of this size at this time, as not a single catalyst can be named other than institutional manipulation.

Meta Platforms Inc is under investigation by US lawmakers regarding its five outstanding trademark applications related to cryptocurrencies. On January 22nd, Maxine Waters, a member of the US House Financial Services Committee, wrote a letter to Meta CEO Mark Zuckerberg and COO Javier Olivan expressing concerns about the open cryptocurrency and blockchain-oriented trademark applications filed by the company in March 2022.

Renewed Interest

Waters raised apprehensions about the implications of these applications, referencing ongoing interest by Meta in expanding its presence in the digital asset sector. This contradicts the initial statement that Meta made to the Democratic Financial Services Committee in October 2023, where it claimed to have no active digital asset projects.

Moreover, thanks to its initial filings on March 18th, 2022, the application submissions by Meta appear to represent a continued intention to expand the involvement of the company in the digital assets ecosystem.

Clarity Is Needed

Waters posed questions about the plans that Meta has for a crypto-supporting payments platform and how its technology facilitates various aspects of cryptocurrencies within its platforms, including the Metaverse. Despite the abandonment of earlier plans for a stablecoin, Diem, and a digital wallet, Novi, due to legislative challenges, the new trademark applications indicate renewed interest by Meta in services related to crypto and blockchain assets trading, exchange, payments, transfers, wallets, and associated hardware and software infrastructure.

Meta is required to respond to the first Notice of Allowance (NOA) issued in August 2023 by February 15th and the most recent NOA issued in January by July 16th. Waters has requested Meta to provide details of its responses to these NOAs, along with its plans for Web3, cryptocurrency, or digital wallet initiatives, including any intentions to launch a cryptocurrency payments platform.

On behalf of the Web3 community, we would like to extend our warmest congratulations to the companies that announced their success in fundraising between 16th-22nd January, 2024. We are thrilled to see such tremendous support from all involved. Well done! 


0xScope raised $8M. With the new capital, 0xScope aims to create an inclusive, open-source ecosystem that enables seamless uploading, validation, processing and downloading of Web2 and Web3 data.

Canza Finance raised $5.75M. This funding round empowers Canza Finance to further develop innovative tools and services, dedicated to easing the expense of conducting business across the African continent.

Fetcch raised $1.5M. Fetcch provides infrastructure for digital payments and rewards platforms for the Web3 payments ecosystem with a focus on cross-chain payments.

Safary 🦁 raised $ 2.4M. This funding will be leveraged to add firepower to Safary's team and accelerate the development of Safary's marketing attribution platform, which enables Web3 teams to analyze their marketing CAC, channel ROI, and customer LTV.

Army of Fortune Metaverse raised $3M. A primary motivator for this funding round was to execute full throttle on their roadmap initiatives to be the go-to mobile gaming ecosystem in Web3.

WOO Network raised $9M. WOO Network is a crypto exchange that provides traders with a range of products aimed at improving the trading process. Its current services cover both CeFi and DeFi trading needs.

Kiln raised $39M. Kiln plans to use the capital to fund its global expansion plans, including growing its APAC division following the opening of its regional headquarters in Singapore in Q1.

zbyte raised $5M. The platform enables the Web3 ecosystem by removing the complexity for developers and enterprises to develop decentralized applications.

Flowdesk raised $80M. The funds raised will be used to consolidate their position as a leading market-making service provider and expand their OTC offering.

DeBox raised $2M. DeBox operates as a Web3 social platform that leverages blockchain DID technology. It enhances social information authenticity and offers decentralized social features, such as token-based chat and DAO integration, to Web3 communities.

Root Protocol (NFT3) is pleased to announce the successful closure of $10M in funding across two seed rounds, bringing the total valuation of the project to $100M.


Follow CryptoWeekly to stay updated with all the latest news about future Web3 Funding Rounds.

In a surprising twist of events, the TerraUSD (UST) stablecoin project and its creator, Terraform Labs, are currently contending with Chapter 11 bankruptcy in the United States. The upheaval commenced with the catastrophic detachment of UST in May 2022, sending shockwaves throughout the cryptocurrency market and causing the disappearance of billions of dollars for investors.

Uncertainty Looms

As the bankruptcy proceedings unfold, the once optimistic financial standing of Terraform Labs now presents a harsh reality. The approximated assets and liabilities fall within the range of $100 million to $500 million, a significant departure compared to the lofty ambitions the company once pursued.

Adding complexity to the situation, a multitude of creditors, estimated between 100 and 200, including influential entities like TQ Ventures and Standard Crypto, now confront an uncertain future in the aftermath.

The Fight Continues

Various legal challenges loom for Terraform Labs, with battles in both Singapore and the United States adding to the complexities. The most formidable challenge comes via the US Securities and Exchange Commission (SEC), armed with a $40 billion fraud lawsuit that casts a long shadow over the company's future.

A recent US court ruling complicates matters further, classifying Luna and Mirror (MIR) tokens as securities, adding a layer of intricacy to an already unclear situation. The repercussions of the UST crash and the bankruptcy of Terraform Labs resonate through the cryptocurrency sphere. Analysts in the industry anticipate that the bankruptcy could have lasting implications for the stablecoin market. Regulatory scrutiny is expected to heighten, potentially resulting in stricter controls and increased investor skepticism.

Solana, a network that has gained attention for its rising network activity and developer retention rates, is emerging as a notable hub for stablecoins. Outperforming competitors such as Ethereum, Cardano, and Polygon across various metrics, Solana aims to distinguish itself with its latest accomplishment, a record-breaking volume of stablecoin transfers.

Success In Stablecoins

The stablecoin transfer volume on Solana has followed an impressive trajectory, reaching a new peak in January by exceeding $300 billion, according to blockchain analytics platform Artemis. This figure represents a substantial increase regarding the $297 billion mark in December 2023 and a remarkable surge of 2,500% compared to the $12 billion volume recorded in January 2023.

This outstanding growth has elevated the market share of Solana to 32%, a significant rise compared to its 1% share just a year ago, almost matching the 33% market share of Ethereum. In contrast, Ethereum has reported a stablecoin transfer volume of $317 billion this month.

Still A Ways To Go

The recent success shown by Solana in the stablecoin sector can be attributed to substantial USDC transfers and the introduction of the new Paxos stablecoin, USDP. Additionally, the platform has witnessed a substantial increase in DeFi activity, reflected in its Total Value Locked (TVL) reaching $1.36 billion, the highest since September 2022, as reported by DeFiLama.

However, despite Solana trying to distance itself regarding FTX, the now-defunct exchange still holds millions in SOL tokens, most of which will enter the market in 2025. Moreover, the recent rise exhibited by Solana has reignited discussions about it potentially replacing Ethereum itself. Still, Anatoly Yakovenko of Solana promptly rejected this label and advocated for co-existence.