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Monday, September 28, 2020
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Saturday, September 26, 2020
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Friday, September 25, 2020
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Thursday, September 24, 2020
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Wednesday, September 23, 2020
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Monday, September 21, 2020
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Saturday, September 19, 2020
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The Fed today announced interest rates will stay near 0% through 2023. Alternative investments may well become more attractive.
In brief
The Federal Reserve today concluded its two-day policy meeting.
The Fed said that interest rates would be near 0% for another three years.
This could see investors turn to Bitcoin.
The Federal Reserve today said it would keep interest rates near 0% through 2023 in a move that could push investors toward Bitcoin.
At the conclusion of a two-day policy meeting, during which the Federal Reserve Board of Governors discussed how to actualize its general strategy of letting inflation rise, the Fed said that near-zero interest rates would likely be in place through 2023 to help the US recover from the economic fallout from the coronavirus pandemic.
Fed Chairman Jerome Powell today told a press conference: “With regard to interest rates, we now indicate that we expect it will be appropriate to maintain the current 0 to 0.25% target range for the federal funds rate until labor market conditions have reached levels consistent with the committee’s assessment of maximum employment and inflation has risen to 2% and is on track to exceed 2% for some time.”
He added that while economic activity and employment have picked up in recent months, they still remain well below their January 2020 levels. Unemployment is still high in the US, and the hospitality and travel sector have been hit particularly hard.
But what do low interest rates mean for the US economy—and crypto at large?
During times of economic hardship, the Fed has frequently slashed its benchmark rates to kickstart the economy: low interest rates mean lower borrowing costs for consumers and businesses. That’s great for borrowers. However, when interest rates are low, investors are less likely to put their money in interest-bearing investments—like bonds or debt-based financial instruments—precisely because they generate less interest.
With interest rates this low in 2020, it is possible investors will look to invest in non-interest-bearing assets—like Bitcoin—Charles Bovaird, Vice President of Content at Quantum Economics, told Decrypt.
“If investors are traditionally drawn to certain assets because they pay interest, and Fed policy places downward pressure on interest rates, those same investors have less incentive to put their money into those assets,” he said. “If we have an environment of sustained low interest rates, this gives investors greater incentive to put their money into non-interest-bearing assets, for example stocks and digital currencies.”
The world of traditional finance is already looking to gold, Bitcoin and other digital assets as the response to the coronavirus outbreak exposes weaknesses to the US dollar. Last week, the correlation between gold and Bitcoin prices reached record-highs, suggesting that the digital currency is becoming more of a safe-haven asset.
That could continue if low interest rates create a snowball effect.
“If this era of low interest rates becomes a new normal, it makes me wonder whether that will make people even more skeptical about the current financial system,” said Bovaird.
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Seven alleged international hackers have been charged by the United States, with two Malaysian nationals already arrested.
In brief
The United States government has charged seven alleged international hackers.
Hijacking remote computers to mine cryptocurrency is one of the alleged crimes.
Two Malaysian individuals have been arrested, while five Chinese nationals remain at large.
The United States Department of Justice today announced that it has charged seven individuals—five Chinese and two Malaysian nationals—with a host of cyber-crimes, including hacking companies and organizations, planting ransomware, and remotely using computers to mine cryptocurrency.
The grand jury indictments, originally issued in August 2019 and August 2020, were unsealed today upon news that Malaysian authorities had arrested the two nationals charged by the US. The United States is seeking their extradition. Currently, the five Chinese nationals remain at large.
According to a release, the August 2019 indictment charged Chinese nationals Zhang Haoran and Tan Dailin with 25 counts, including conspiracy, money laundering, wire fraud, and aggravated identity theft. The duo’s alleged hacking conspiracy targeted tech companies, while a video game-centric plot saw them allegedly hack game publishers to steal or generate digital items and currency that they then resold. They also reportedly targeted rival criminal groups to edge out the competition.
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Meanwhile, an August 2020 indictment against Chinese nationals Jiang Lizhi, Qian Chuan, and Fu Qiang included nine counts, including racketeering conspiracy, identity theft, and money laundering. Through a firm called Chengdu 404 Network Technology, the trio allegedly launched attacks against more than 100 international companies, including those based in the United States. The release specifically calls out a ransomware attack against a non-profit organization that battles global poverty.
The two Malaysian nationals arrested this week, Wong Ong Hua and Ling Yang Ching, are charged with 23 counts, including racketeering, conspiracy, identity theft, and access device fraud. Through Malaysian company Sea Gamer Mall, the duo is accused of targeting video game companies in the United States and elsewhere, and allegedly worked with other hackers (including the aforementioned Chinese duo) to attack game developers.
One of the five Chinese nationals reportedly “boasted of connections to the Chinese Ministry of State Security.” The Department of Justice’s release doesn’t mince words about the Republic of China’s view toward the hacking of other nations, and the likelihood of arresting those charged individuals.
“The Department of Justice has used every tool available to disrupt the illegal computer intrusions and cyberattacks by these Chinese citizens,” said Deputy Attorney General Jeffrey A. Rosen, in a release. “Regrettably, the Chinese Communist Party has chosen a different path of making China safe for cybercriminals so long as they attack computers outside China and steal intellectual property helpful to China.”
Microsoft worked with the various US agencies to help mitigate risks discovered during the investigation. The DOJ also thanked Google, Facebook, and Verizon for its assistance.
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The regulated US exchange was quick to list UNI after Uniswap surprised users with an airdrop on Thursday morning.
US crypto exchange Coinbase said it would soon list UNI, the native token of decentralized exchange Uniswap, on its professional trading platform Coinbase Pro, per an announcement earlier today. The famed “Coinbase pump” followed shortly after, causing UNI to surge by 22% to $4 at press time.
Only inbound transfers are currently accepted on Coinbase Pro. Trading is expected to begin later in the day after sufficient “liquidity conditions” are met—to prevent a one-sided market or large UNI holders from manipulating the market.
But the listing didn’t happen out of nowhere. Coinbase is an investor in Universal Navigation Inc, the parent company and developer of Uniswap, and holds UNI tokens. The exchange said, “Coinbase intends to maintain its investment in UNI for the foreseeable future and maintains internal policies that address the timing of permissible disposition of its digital assets, including UNI tokens.”
The move came hours after Uniswap airdropped its tokens to everyone who used its platform prior to September 1. This included liquidity providers, casual traders, and even those who tried transacting on the network but failed to do so because of high gas fees. A minimum of 400 UNI was airdropped regardless.
As per data on crypto price tracker CoinGecko, the 400 UNI airdrop was currently worth over $1,500 at press time, a few hundred dollars more than what US citizens received as part of their stimulus package earlier this year.
Coinbase has listed several DeFi tokens in recent weeks, such as yearn.finance, Loopring, and others, to provide users with a wider range of cryptocurrencies. It looks like that trend will continue.