Americans Have Lost Over $1 Billion to Crypto Scams. This Week's Top Bitcoin and Crypto News – CNET
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Also: The former manager for an NFT marketplace is charged with insider NFT trading.
Julian is a staff writer at CNET. He’s covered a range of topics, such as tech, travel, sports and commerce. His past work has appeared at print and online publications, including New Mexico Magazine, TV Guide, Mental Floss and NextAdvisor with TIME. On his days off, you can find him at Isotopes Park in Albuquerque watching the ballgame.
The US Federal Trade Commission says crypto scams have cost US consumers more than a billion dollars. A former manager of the largest NFT marketplace is charged with insider NFT trading. Technologists sign an open letter to lawmakers on crypto risks. Chipotle now accepts cryptocurrency payments at all US locations. Here’s what happened in crypto over the week.
Since the start of 2021, more than 46,000 Americans have collectively lost over $1 billion to crypto scams, according to an analysis released Friday by the US Federal Trade Commission. Out of all the money reported lost during this period, roughly one in four dollars were lost to crypto scams.
The analysis cited investment scams as the largest reason why so many people lost money. Romance scams involving cryptocurrency impacted the second-highest number of people but accounted for a much smaller percentage of lost money compared with investment scams.
The median amount lost to cryptocurrency scams since January 2021 was $2,600. The top three cryptocurrencies that scammers lifted were bitcoin (70%), tether (10%), and ether (9%).
Charges of insider NFT trading were brought against a former manager of the popular OpenSea NFT marketplace by the US Attorney’s Office for Manhattan, according to a Wednesday announcement. This is the first time the Justice Department has pursued an insider trading case over NFTs.
The suspect was a product manager at OpenSea last year. In his role, the suspect reportedly was aware of which NFTs would be featured on the market’s homepage. NFTs generally gain value through word of mouth, so if an NFT gets posted on the homepage of a large NFT marketplace, the boost in visibility could increase its value, at least temporarily.
The indictment alleges that the suspect “launched an age-old scheme to commit insider trading by using his knowledge of confidential information to purchase dozens of NFTs in advance of them being featured on OpenSea’s homepage.”
On Friday, a company spokesperson responded to CNET’s request for comment. “When we learned of Nate’s behavior, we initiated an investigation and ultimately asked him to leave the company,” the spokesperson said in an email statement. “His behavior was in violation of our employee policies and in direct conflict with our core values and principles.”
A group of 26 academics and technologists signed an open letter to lawmakers on Wednesday calling for new rules to govern blockchain technology and the cryptocurrency industry. Blockchain refers to the record-keeping technology that underpins cryptocurrency and other crypto-related assets.
“Blockchain technologies facilitate few, if any, real-economy uses,” the letter reads. “On the other hand, the underlying crypto-assets have been the vehicle for unsound and highly volatile speculative investment schemes that are being actively promoted to retail investors who may be unable to understand their nature and risk.”
The letter also cites ransomware, scams, money laundering, financial instability, susceptibility to bank runs and massive climate emissions from proof-of-work technology as ongoing issues with blockchain technology and cryptocurrency.
You can now buy a burrito at Chipotle with bitcoin. The burrito chain has partnered with payment platform Flexa and now accepts a number of cryptocurrencies, including bitcoin, ether and dogecoin, as payments through Flexa via app and QR code.
“We are constantly exploring innovation that will enhance our guest experience, and that includes now accepting digital currency payments with Flexa in Chipotle’s US restaurants,” Chipotle CTO Curt Garner said in a statement to CNET.
You can use select cryptocurrencies to buy items at any Chipotle location in the US, according to Flexa’s announcement.
Thanks for reading. If you’re looking for more, by Daniel Van Boom on the strange tale of the Goblintown NFT collection.