Bitcoin pares weekly losses after better-than-expected September jobs data: CNBC Crypto World

Today, Bitcoin bounces back after much stronger than expected jobs numbers. Coinbase tells European customers it will delist non-compliant stablecoins. Sam Kessler of Coindesk shares how he found crypto companies reportedly hired North Koreans on accident. Welcome to CNBC's Crypto World. I'm Tanaya McKeel. Crypto markets largely in the green after new data this morning showed the U.S. labor market growing much more than expected. By noon Eastern, Bitcoin rose 2%, trading at $61,800. Ether is also up, trading at the $2,400 level. Meanwhile, XRP was flat at $0.52, following an uncertain week for the token, spurred by legal challenges for Ripple Labs and a step toward an XRP ETF. Today's gains still don't make up for the volatile first week of Q4. Bitcoin dropped nearly 6% in the past seven days, while Ether fell 10.5%. XRP fared the worst of the three, dropping more than 11%. Okay, let's talk about the top stories. The DOJ and SEC are taking interest in a crypto-focused legal battle involving AI giant NVIDIA. The two agencies told the Supreme Court in an amicus brief Wednesday that a class action should move forward. That suit alleges that NVIDIA made misleading statements on hardware sales to crypto miners, which shareholders claim had notoriously volatile demand. The two agencies say they each have a strong interest in the case, as private actions are an essential supplement to prosecutions and enforcement actions brought by both. The Supreme Court picked up the case following a legal battle that has raged in lower courts since 2018. NVIDIA declined CNBC's request for comment. Next, Coinbase will start delisting non-compliant stablecoins for some customers by the end of the year. This comes after Amica, the European regulatory framework for digital assets, began to roll out back in June. In a statement to CNBC, Coinbase said it will restrict services for stablecoins that do not meet Amica requirements by December 30, 2024 for customers in the EU. Coinbase recommended that users consider switching to compliant stablecoins like USDC and EURC. And finally, we have a small update on a story we told you about yesterday. A CFTC subcommittee advanced a recommendation to let banks like BlackRock and others use blockchain tokens as collateral. That proposal still faces the larger Global Markets Advisory Committee. When we reported that story yesterday, we reached out to the CFTC for comment, and it tells us that the full GMAC committee does not have a set date for its next meeting, where it could consider this change, but it might happen before the end of the year. All right, for our main story, let's turn to Coindesk's report from earlier this week, where it detailed accounts of North Koreans infiltrating crypto companies. Coindesk found that fake documents and identities were used to gain employment at crypto firms and potentially send the money back to the DPRK. I spoke with Sam Kessler, the reporter on that story, to find out how these workers made their way onto the payrolls and whether crypto made it easier to skirt U.S. sanctions. All right, well, Sam, thank you so much for joining us today. Tell me, how did you even begin unraveling this story? What tipped you off to this idea that North Koreans may be finding ways onto these companies' payrolls? Yeah, thanks. Thanks so much for having me. So I think it was in 2022 when U.S. authorities started warning about the threat of DPRK, North Korean IT workers, infiltrating not just crypto companies, but tech companies generally in the United States. And then around a month ago, maybe a bit over that, in July, Zack XB2, who's this great online Twitter sleuth investigator, posted a bunch of evidence, a big, long list of developers who had apparently been working in companies. So somebody reached out based on that, and then we went down this whole rabbit hole of many more developers than that original list, and we found them in tons of different companies. What did you find as the shortcoming when it comes to catching these operatives before they're hired? Is there something to do with the actual background check and screening process, or a culture problem? Where was the breakdown that you found? Yeah. So there's a whole litany of different things, a long list of things that one can do to kind of suss out whether these developers are who they claim to be. But if there's one big takeaway, it's that the firms that I've spoken to, at least most of them that decided to go on the record, did not use professional background checking services when they did the KYC Know Your Customer ID checking on their end. So if you use these professional background checking services, you'll be able to see that this Texas driver's license that you looked at, that looked completely authentic, was not real. And what usually tipped off these companies that something was awry, and what did the sorts of losses look like momentarily? Yeah. I mean, this is one of the most interesting parts of doing an investigation like this, is you hear a whole range of wild anecdotes, as you can imagine. It was tons of different things. So in the story alone, we have examples of people who hired an employee who was ostensibly from Tokyo, from Tokyo, Japan, had a Japanese accent, and then one day lost that accent. That became a hint. If you don't know what to look out for, that might just seem weird, but it was probably multiple people masquerading as a single individual. In other instances, people just refused to use their cameras, or would have different accents than their names, or their supposed work location. Sometimes you would hear noises in the background, as if they're working in some sort of a factory, is the word that came up a few times, because there were probably a lot of different people working similar sorts of jobs in individual locations. I mean, IP addresses also being mismatches, tons of different things. Well, you mentioned some of the payments that the FBI investigated after a North Korean coder was hired at one of these companies. The agency was able to do so because of the openness of the blockchain, but it also seems like the blockchain enabled these payments because of KYC, or anti money laundering failings, or just how difficult it may be for these operatives to get a traditional bank account. Do you see crypto as enabling this sort of tactic, or is this more of a security and fraud issue? All of the above. One thing that should be made clear is that crypto is not the only industry in the United States, or globally, that has fallen victim to these sorts of workers duping employers. Even Fortune 100 companies, there was a report that came out recently from Google's security division that found these employees in other Fortune 100, many of them tech companies. But crypto is uniquely vulnerable and uniquely attractive to these sorts of exploits. On one hand, just the culture of the industry, hiring anonymous developers, globally distributed companies that say they're quote-unquote decentralized, mean that you can fall into hiring these people more easily in some cases. But also, it's attractive to hackers. North Korea is, by and large, the main perpetrator that we know of of crypto hacks, and we've learned recently that around, according to some of my reporting, half of the recent hacks that we've seen in 2024 have been enabled by these sorts of IT workers. So the industry is attractive to those who just want to get in and steal some funds. So for sanctions evasions and all of those other things, there are also, of course, attributes of cryptocurrency that make it attractive to something like the heavily sanctioned North Korean regime for moving around money. All right, that's all for Crypto World this week. We'll be back again on Monday and we'll see you then.