Fear, Uncertainty, and Doubt (FUD) in Crypto: 2023’s Biggest Concerns
Manipulating the market and controlling user sentiment are common tactics in the crypto world. Let’s take a closer look at the major FUD of 2023.
What’s Behind Crypto FUD in 2023?
Recent news revealed that over 100 U.S. Senators, led by Sen. Elizabeth Warren, expressed concerns to the Biden administration about how Hamas and the Palestinian Islamic Jihad (PIJ) raised millions of dollars through cryptocurrency. The letter highlighted that the two groups had collectively garnered over $130 million in crypto between August 2021 and June 2023, demanding information on actions taken by the Treasury Department and other entities to prevent the use of crypto in financing terrorism.
The impact of the letter was evident when less than 24 hours later, the U.S. Treasury Department announced sanctions against several individuals and entities supporting Hamas’s operations.
Misinformation Campaign?
The data on terrorism financing mentioned in Sen. Warren’s letter stemmed from a Wall Street Journal (WSJ) news report released on October 10th, attributing its information to findings by blockchain forensics firm Elliptic and Tel Aviv software company BitOK. However, skepticism emerged within the industry due to public blockchains and blockchain analytics capabilities.
The Aftermath
In response to the controversy stirred by the Wall Street Journal report, blockchain analytics firm Chainalysis conducted an investigation, debunking the data quoted by WSJ. According to Chainalysis, the actual figure was approximately $450,000, not the reported $82 million. Elliptic also clarified that WSJ had misinterpreted their data in its July report.
Hot Take: False Narratives and Misinformation
Despite clarification from Elliptic and Chainalysis, it is unlikely to deter critics like Sen. Warren from their negative stance on the crypto industry as peddling misinformation can be more convenient when it aligns with certain agendas.
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