Crypto fear and greed index hits 'neutral' as Bitcoin ETFs fail to raise prices
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The Crypto Fear and Greed index has fallen back to a “neutral” level of 52 for the first time since October, just days after the historic launch of spot Bitcoin ETFs in the US. The index weighs various factors like volatility, volume, social media, and Bitcoin’s dominance to score general market sentiment.
A new UN report shines an unflattering light on the prominent role Tether’s USDT stablecoin has assumed in facilitating financial crimes across Southeast Asia. The analysis flags USDT as a go-to vehicle for laundering illicit funds and enabling illegal gambling and romance scams in the region.
An unknown attacker recently attempted to exploit the partial payments feature on the XRP blockchain to steal from crypto exchange Bitfinex. The hacker tried to trick Bitfinex into accepting a $15 billion XRP transaction that never actually occurred. Fortunately, Bitfinex’s systems were properly configured to detect the attack and the hack ultimately failed.
Today’s Newsletter
- Crypto fear and greed index hits ‘neutral’ as Bitcoin ETFs fail to raise prices
- USDT usage for money laundering surges in East and Southeast Asia: UN report
- Bitfinex prevents $15 billion exploit, reveals XRP Ledger vulnerability
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MARKETS
Crypto fear and greed index hits ‘neutral’ as Bitcoin ETFs fail to raise prices
The index hit a peak of 76 on January 9th amid anticipation of ETF approvals but has since plunged back down despite the long-awaited spot Bitcoin ETFs coming to market. Meanwhile, there has been some uncertainty around the spot Bitcoin ETFs since their hotly-anticipated launch. Conflicting data has emerged regarding their early trading volumes and performance.
The rapid change in market sentiment per the Fear and Greed index highlights the fickle nature of crypto markets. Just a week ago, optimism reigned supreme as the market hovered in greed territory for months, awaiting the game-changing spot Bitcoin ETFs. Yet with the products now live, prices have stalled and apprehension has set back in, bringing the index right back down to middle-ground neutrality. [cryptobriefing]
STABLECOINS
USDT usage for money laundering surges in East and Southeast Asia: UN report
The UN report builds on Tether’s own admissions about working with authorities to freeze funds linked to criminal activity involving USDT. Just this past November, Tether froze $225 million related to an international human trafficking syndicate running “pig butchering” scams. While Tether pushes back against the report’s focus on illicit uses of its stablecoin, the analysis provides a sobering case study on crypto’s growing role as an instrument for moving dirty money.
Law enforcement efforts have disrupted several money laundering networks funneling huge sums of dirty Tether, recovering over $735 million last August in one Singapore-based operation. Tether’s prominence on the Tron network for money laundering points to lingering compliance and enforcement gaps. As virtual assets witness exponential growth, especially across Asia-Pacific, authorities must act quick to rein in illegal uses even as they balance supporting innovation. [cryptobriefing]
EXCHANGES
Bitfinex prevents $15 billion exploit, reveals XRP Ledger vulnerability
According to Bitfinex CEO Paolo Ardoino, his exchange recently foiled an attack that aimed to game the partial payments capability in the XRP Ledger. This feature allows transactions to go through even if the sender lacks the full balance. By submitting a transaction that falsely showed $15 billion worth of XRP being sent, the attacker hoped to create an accounting discrepancy they could likely exploit before being detected. However, because Bitfinex cross-checks the amount sent versus delivered, it was able to catch the hack attempt and prevent any loss of funds.
The unknown attacker also unsuccessfully targeted crypto exchange Binance with a similar partial payments attack showing over $50 billion in XRP being transacted. This exploit method takes advantage of integrations that only check the amount field of XRP payments without validating delivered funds. It aims to create a window where balances appear much higher before the discrepancy is caught. [cryptobriefing]
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