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Senator Accuses Crypto Billionaire of Dodging Puerto Rico Tax Evasion Investigation

by admin October 2, 2025



In brief

  • Sen. Ron Wyden (D-OR) alleged Wednesday that Pantera Capital founder Dan Morehead may have used Puerto Rican residency to improperly dodge U.S. taxes, and has avoided cooperating with an investigation into the matter for months.
  • In a letter sent this week, Wyden said Morehead’s attorneys “have all but disappeared” since pledging to cooperate with the inquiry in January.
  • Meanwhile, Pantera has greatly expanded its crypto footprint, including by launching a $1.25 billion Solana treasury company on Wall Street.

The top Democrat on the Senate Finance Committee has accused a prominent crypto investor of refusing to cooperate with an investigation into an alleged billion-dollar tax evasion scheme running through one of the digital asset community’s most popular enclaves: Puerto Rico. 

Sen. Ron Wyden (D-OR) first opened an investigation into the finances of Pantera Capital founder Dan Morehead in January, as part of a broader inquiry into how “ultra-high net worth” Americans have used Puerto Rican residency as a means to obtain lucrative tax exemptions. 

Wyden had not previously publicly announced that investigation until now, however. This week, the senator blasted Morehead in a published letter accusing the hedge fund manager and crypto investor of refusing to cooperate with the Senate’s investigation into his finances.



“While your attorneys initially suggested to my staff you were willing to cooperate with this inquiry, they have all but disappeared,” Wyden wrote, “heightening my concerns that you may have improperly avoided over $100 million dollars in federal taxes on capital gains that accrued while you still lived in San Francisco.”

The letter, sent to Morehead on Tuesday, said the crypto-focused venture capitalist may have received improper tax counsel which led him to obtain Puerto Rican residency shortly before earning hundreds of millions of dollars on the sale of a large Pantera position, and then declare that income exempt from U.S. taxes. 

Wyden argued this was an incorrect interpretation of Puerto Rican tax law, which he said requires new residents of the island territory to pay U.S. taxes on such transactions for 10 years following their move.

“These are serious allegations of potential abuse of Puerto Rico tax incentives to avoid the payment of U.S. taxes that you must immediately address,” Wyden wrote. 

Morehead did not respond to Decrypt’s request for comment on this story. 

As the Trump administration has moved aggressively to create favorable conditions for crypto companies and investors, Morehead’s Pantera Capital has spun up several new ventures to take advantage of the moment.

The firm has spent hundreds of millions of dollars investing in Wall Street-traded digital asset treasury companies, which have taken off in popularity this year amidst promises of lucrative, risky returns. It recently launched a $1.25 billion effort to convert a publicly traded neurotechnology company into a massive Solana treasury. 

Earlier this week, the company, Helius Medical Technologies—which once created medical devices designed to improve the lives of people with neurological diseases—formally changed its name to Solana Company. Tabs on the company’s website titled “Our Technology” and “Our Research” appear to have been deactivated. 

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October 2, 2025 0 comments
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Kentucky State Senator Sued Over Bitcoin Mining Business

by admin September 30, 2025



In brief

  • Kentucky Senator Brandon Smith faces two lawsuits over his Bitcoin mining repair company Mohawk Energy, including claims of misrepresentation and breach of contract.
  • Smith, who authored Kentucky’s 2021 crypto mining tax incentive bill, denies all allegations and has filed counterclaims against both plaintiffs.
  • The legal troubles highlight growing pains in the U.S. crypto mining sector, which expanded 23% between 2022 and 2024.

Kentucky Sen. Brandon Smith (R-Hazard) is facing two separate legal cases related to a Bitcoin mining repair business he founded in Letcher County, Kentucky.

Smith is the CEO and co-founder of Mohawk Energy, which in 2022 pivoted from coal cleanup operations to ASIC repair and other Bitcoin mining services.

Local outlet, Lexington Herald Leader, reports that Ricky Dale Cole sued Smith in Letcher Circuit Court in January, accusing the lawmaker of misrepresenting the value of Mohawk Energy.

Cole claims that he sold a warehouse to Mohawk, agreeing with Smith to sell the premises below market price in return for a 20% stake in the business.



Yet Cole’s suit alleges that the company has refused to share info about its finances and that he has not profited from the deal. He also alleged that Smith made false promises and representations.

This suit comes in addition to a case filed in November 2023 by Huobi-subsidiary HBTPower, which alleges breach of contract and misrepresentation, following an agreement with Mohawk Energy in June 2022.

According to HBT’s allegations, Smith had made a deal to work with HBTPower employees to train his own workers and acquire the in-house ability to repair Bitcoin mining machines.

However, Smith and other Mohawk representatives eventually asked HBTPower personnel to leave Mohawk’s premises, with HBTPower claiming that Smith did not own the warehouse at the time he entered into a contract with the Chinese company.

Smith has denied the allegations against him, and has filed counterclaims against both plaintiffs.

Despite the legal difficulties surrounding Mohawk’s pivot to crypto, Smith remains optimistic about the industry’s future in the US and in Kentucky.

Smith had been instrumental in securing the passage of several crypto-related bills in Kentucky, including a 2021 bill—which he authored—that provides tax incentives for investments in cryptocurrency mining.

Speaking to Decrypt in his capacity as Mohawk Energy CEO, Smith said that the company is “excited” to return to its mission of “job creation and training” once the litigation is over.

“While it is unfortunate that Huobi and its shell subsidiary HBTPower breached their eight year contract and refused to start operating at the Mohawk plant, that does not impact Mohawk’s long term plans to bring more jobs and technology training to the region,” he said. “Our counter suits to the complaints explain our position.”

Mohawk’s difficult pivot came during a period when the U.S. cryptocurrency mining sector witnessed rapid expansion, with Bitcoin mining sites in the U.S. increasing in number by 23% between 2022 and 2024, to 48.

According to Shanon Squires, the Chief Mining Officer at Compass Mining, such growth has continued this year, as evidenced by Bitcoin’s hashrate reaching new all-time highs recently.

“In the U.S., that momentum is especially visible in states like Texas and Wyoming,” she told Decrypt. “The expansion seems to be mostly coming from existing companies, rather than from new players entering the market.”

While affirming that the American cryptomining industry has become increasingly professionalized in recent years, there is still some degree of variability, with some endeavors “popping up and fading” quicker than others.

She added, “While Bitcoin mining is no longer the ‘wild west’ it once was, companies still need to do their homework and work with established partners that have proven themselves through multiple cycles.”

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September 30, 2025 0 comments
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‘Microsoft has become like an arsonist selling firefighting services to their victims’ says US senator, referring it to the FTC for a cybersecurity flaw, though Microsoft says it has a plan

by admin September 12, 2025



US senator Ron Wyden has written a letter to the FTC requesting that the organisation investigate Microsoft for what he calls “gross cybersecurity negligence.” His complaint is primarily related to a form of encryption still supported by the company’s Windows operating system, which the senator’s office believes is vulnerable to ransomware attacks.

In the letter [PDF warning], Senator Wyden reveals that an investigation his office conducted into a ransomware breach of healthcare provide Ascension last year found that support of the RC4 encryption cipher was a direct contributor to the attack (via Ars Technica).

“Because of dangerous software engineering decisions by Microsoft, which the company has largely hidden from its corporate and government customers, a single individual at a hospital or other organization clicking on the wrong link can quickly result in an organization-wide ransomware infection,” said Wyden.


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“Microsoft has utterly failed to stop or even slow down the scourge of ransomware enabled by its dangerous software.”

RC4, or Rivest Cipher 4, was developed in 1987 by mathematician and cryptographer Ron Rivest, and was considered a protected method of encryption until 1994, when it was compromised as a result of a leaked technical description. Despite this, RC4 was widely used in common encryption protocols until around a decade ago, and is still used by Microsoft to secure Active Directory, a Windows component used by system administrators to configure user accounts.

(Image credit: Witthaya Prasongsin via Getty Images)

While Windows will use AES encryption by default, the senator’s office discovered that Windows servers will still respond to RC4-based authentication requests, which potentially opens them up to “Kerberoasting.” This is a technique in which administrative privileges are gained via exploiting encryption on one affected machine in order to install ransomware on others.

In the case of Ascension, the senator claims that a contractor clicking on a malicious link led to hackers “moving laterally” within its server network, exploiting the weak encryption in order to push ransomware to thousands of other other computers in the organisation and ultimately stealing the sensitive data of 5.6 million patients.

Keep up to date with the most important stories and the best deals, as picked by the PC Gamer team.

While the senator says that his office contacted Microsoft about the vulnerability, and that the company eventually posted a blog post with actions that organisations could take to protect against it, a promised security update to fix the issue is yet to arrive.

(Image credit: Future)

“The Ascension hack illustrates how it is Microsoft’s customers, and, ultimately, the public, who bear the cost of Microsoft’s dangerous software engineering practices and the company’s refusal to inform its customers about the pressing need to adopt important cybersecurity safeguards,” the senator continues.

“There is one company benefiting from this status quo: Microsoft itself. Instead of delivering secure software to its customers, Microsoft has built a multibillion dollar secondary business selling cybersecurity add-on services to those organizations that can afford it. At this point, Microsoft has become like an arsonist selling firefighting services to their victims”


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The senator ends his letter by urging the FTC to investigate Microsoft, and hold the company responsible for what the senator claims is the “serious harm it has caused by delivering dangerous, insecure software to the U.S. government and to critical infrastructure entities, such as those in the U.S. health care sector.”

(Image credit: Maciej Toporowicz, NYC via Getty Images)

Microsoft has since released a statement to multiple outlets, including Ars Technica, directly addressing the senator’s claims:

“RC4 is an old standard, and we discourage its use both in how we engineer our software and in our documentation to customers – which is why it makes up less than .1% of our traffic. However, disabling its use completely would break many customer systems,” the company said.

“For this reason, we’re on a path to gradually reduce the extent to which customers can use it, while providing strong warnings against it and advice for using it in the safest ways possible. We have it on our roadmap to ultimately disable its use. We’ve engaged with The Senator’s office on this issue and will continue to listen and answer questions from them or others in government.”

Microsoft also says that in the first quarter of 2026, “Any new installations of Active Directory Domains using Windows Server 2025 will have RC4 disabled by default, meaning any new domain will inherently be protected against attacks relying on RC4 weaknesses. We plan to include additional mitigations for existing in-market deployments with considerations for compatibility and continuity of critical customer services.”

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September 12, 2025 0 comments
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Philippine Senator Suggests Putting National Budget On-chain

by admin August 28, 2025



In brief

  • Senator Bam Aquino called for budget transactions to be recorded on-chain.
  • A formal bill proposing the measure is yet to be filed.
  • Blockchain solutions aren’t “a silver bullet against corruption,” a local blockchain infrastructure firm told Decrypt.

Philippine Senator Bam Aquino wants the country’s national budget placed on a blockchain platform, a move he said would make every peso spent traceable by citizens.

“No one is crazy enough to put their transactions on blockchain, where every single step of the way will be logged and transparent to every single citizen. But we want to start,” Aquino said in a statement at the Manila Tech Summit held on Wednesday.



“If we’re able to do this, I think we’ll be the first country to have our budget on the blockchain,” Aquino said, adding he’s unsure what kind of support he’d receive.

At the time of writing, no formal proposal on a blockchain-powered budget management system scaled for the country’s entire national budget has been filed. Representatives for Senator Aquino did not immediately return Decrypt’s request for comment.

But once formalized, Senator Aquino’s plan would build upon the Department of Budget and Management’s existing blockchain platform, which already records select financial documents and is the first live on-chain budget platform in Asia.

BayaniChain, the local blockchain infrastructure firm behind the DBM’s on-chain platform, welcomed Aquino’s remarks but clarified it is not directly involved with the senator.

“His vision aligns with ours: creating more transparent and accountable systems for the Philippines,” Paul Soliman, co-founder and CEO of BayaniChain, told Decrypt. “While blockchain is not a silver bullet against corruption, it creates immutable records that ensure accountability from government officials.”

Soliman said BayaniChain’s role is to provide the technology that links the Department of Budget and Management’s internal system to a public blockchain.

This setup allows key budget documents, such as Special Allotment Release Orders (SAROs) and Notices of Cash Allocation (NCAs), to be published and verified online, with the records secured on-chain.

Prismo, an orchestration layer, manages data handling, encryption, and validation. The DBM’s budget platform uses Polygon’s Proof-of-Stake network, an Ethereum scaling solution fully compatible with the Ethereum Virtual Machine, as its consensus and transparency layer.

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August 28, 2025 0 comments
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Crypto’s U.S. Policy Aims May Pivot on Resistance from Democratic Senator Warner

by admin August 26, 2025



One of the crypto industry’s central lobbying aims — to protect software developers from being held legally responsible when criminals abuse their technology — may be in jeopardy from Democrats led by U.S. Senator Mark Warner, according to people familiar with legislative negotiations.

The Senate is set to return to work in Washington next week, with the completion of a crypto market structure bill as one of its top agenda items. In the bipartisan talks over that bill, Warner is said to have held reservations about the approach in the U.S. House of Representatives’ version of the bill known as the Digital Asset Market Clarity Act, which gave developers legal cover, according to three people with knowledge of the negotiation.

Warner, a Virginia Democrat who is the vice chairman of the Senate Select Committee on Intelligence, maintains a close focus on national security issues, and he’s said to have balked at the rampant hacks and money laundering concerns that he’s associated with the decentralized finance (DeFi) end of the crypto sector. In the past, he’s raised objections over reports that cryptocurrency may have been used to move assets to terrorist groups, and he pushed a bill in 2023 that looked to saddle DeFi platforms with the same anti-money laundering (AML) requirements that traditional finance firms must meet — a potentially existential threat to the way the decentralized projects operate without core management.

Back then, Warner said such an effort would “help maintain the robust AML and sanctions enforcement we need to protect our national security, while allowing participants who play by the rules to continue to take advantage of the potential of distributed ledger technologies,” additionally noting his views that “criminals and rogue states continue to use crypto to launder money, evade sanctions, and conceal illicit activity.”

Then he pursued an appropriations provision last year that would have automated a process to sanction “foreign digital asset transaction facilitators” – including crypto exchanges – linked to users who support terrorism groups. So he has a background in seeking to hold digital assets insiders responsible for the illicit use of their products.

A spokesperson for the senator didn’t immediately respond to a request for comment on his position in the latest negotiations, but Republican senators have been seeking to fast-track the Senate’s market structure bill, trying to follow the House in a wide, bipartisan approval.

Warner is among the Democrats on the Senate Banking Committee — one of the two panels that needs to come to agreement on the crypto legislation before it can move on to a floor vote.

Unlike with the more aggressive stance of fellow Democrat Senator Elizabeth Warren, the industry generally sees Warner as a member with a balanced view on crypto issues, having supported the sector in previous votes, such as in the recent passage of the bill to regulate U.S. stablecoin issuers — still standing as the industry’s biggest achievement in Washington. Digital assets political organization Stand With Crypto gives him an “A” grade as a lawmaker who “strongly supports crypto.”

When the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act was still moving through the Senate before its passage by a wide margin in June, some Democrats had halted the process on that bill to object to security and illicit-finance aspects of the industry (in addition to the potential conflicts posed by President Donald Trump’s own stablecoin business interests.) The disagreements were kicked down the road in favor of an easy passage of that earlier bill, with the knowledge that this market structure legislation would be a better place to hash out those concerns.

That debate is now arriving for the bill that’s the lynchpin of the digital assets sector’s Washington plans. This legislation to set out tailored regulations for U.S. crypto transactions is seen as necessary for the industry to come into its own and to bring remaining institutional players and hesitant retail investors into the realm of digital tokens.

Behind closed doors, crypto lobbyists are wondering if Warner’s background in venture-capital work for technology firms will help them make a case for protecting software-writing innovators from legal liability. In light of cases such as Tornado Cash developer Roman Storm’s recent criminal conviction, the urgency to establish a shield is amplifying.

Read More: Roman Storm Guilty of Unlicensed Money Transmitting Conspiracy in Partial Verdict



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August 26, 2025 0 comments
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Senator Tim Scott courts Democrats for crypto bill as Warren rallies opposition
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Senator Tim Scott courts Democrats for crypto bill as Warren rallies opposition

by admin August 19, 2025



By putting a number on his expected Democratic support, Senator Scott appears to be applying pressure and cracking a public whip count that might force hesitant senators to declare their position, turning a policy debate into a political test of loyalty and vision.

Summary

  • Senator Tim Scott predicts 12 to 18 Democrats may back the CLARITY Act in September.
  • The bill seeks to establish U.S. crypto market structure and regulatory clarity.
  • Scott identifies Senator Elizabeth Warren as a key obstacle to bipartisan support.

Speaking at the Wyoming Blockchain Symposium on August 19, Republican Senator Tim Scott publicly quantified his expected Democratic support for the upcoming CLARITY Act, predicting between 12 to 18 cross-aisle votes.

The Senate Banking Committee Chairman detailed his outreach to Democrats, framing the vote as a necessary step to provide regulatory certainty in the crypto industry and to deliver on President Trump’s stated goal of making the U.S. a global hub for digital finance.

Notably, Scott directly addressed the primary obstacle, naming Senator Elizabeth Warren as the central “force to overcome” for Democrats who might otherwise be inclined to support the market structure legislation.

Warren’s objections and the politics of crypto regulation

The Senate’s draft bill, which builds upon the House’s CLARITY Act, seeks to clarify how the SEC and CFTC divide oversight and provide legal certainty for exchanges and token issuers.

For its backers, the bill represents a long overdue modernization of financial rules to accommodate crypto, a sector that has grown far faster than regulators’ ability to police it. Scott and other Republicans argue that without a comprehensive structure, innovation will drift overseas, leaving American markets behind.

Warren, the Banking Committee’s top Democrat, has cast the bill in starkly different terms. She has lambasted the Republican draft as an “industry handout,” arguing it creates a bespoke regulatory regime with weaker consumer protections and lighter compliance burdens than those mandated for traditional banks and financial institutions.

The Senator’s central critique is that the bill, shaped significantly by industry input, prioritizes the wishes of the crypto lobby over the financial safety of everyday Americans, potentially exposing the economy to systemic risks. She ties this to a broader narrative of corruption, highlighting the potential for conflicts of interest.

The political elephant in the room

Senator Elizabeth Warren’s line of criticism dovetails with a potent political attack from Democrats focused on President Trump’s business interests. They point to the estimated $620 million in profits his family has reportedly garnered from various crypto ventures, including DeFi projects and memecoins, as evidence that the administration’s pro-innovation stance is less about national policy and more about personal enrichment.

This framing appears to taint the entire legislative effort, making support for the bill politically toxic for Democrats by associating it with the President’s private financial gains.

Despite this formidable hurdle, Scott’s optimism is fueled by more than just hope. It is rooted in the unprecedented alignment of a crypto-friendly executive branch. He is counting on the Trump administration to act as a powerful ally, both in lobbying hesitant legislators and in preparing the regulatory machinery for a swift implementation should the bill pass.

“We now have a team that’s leaning in and we feel like we have to get it done now. Executive action is not enough – period. If one president hated it, this one loves it, we need a Senate and a House that gets legislation passed,” Scott said in a statement.

What is at stake in September is nothing less than the immediate future of the American digital asset industry. Senator Scott’s self-imposed end-of-month deadline for committee action is a critical test of his political capital and his ability to forge a working coalition. 



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August 19, 2025 0 comments
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