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Eighteen people and companies face charges for “widespread fraud and manipulation” after an FBI sting investigation in which authorities created their own cryptocurrency token, federal officials said on Wednesday.
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The US Department of Justice announced five defendants have pleaded or agreed to plead guilty and another three were arrested in Texas, the UK and Portugal this week in connection with a pump-and-dump probe, dubbed “Operation Token Mirrors”, which also seized more than $25mn in crypto assets.
The gist of the scheme was “on-demand market manipulation” on crypto trading platforms using algorithms or bots to generate “quadrillions of transactions and billions of dollars of artificial trading volume each day”, the Securities and Exchange Commission said.
Earlier this year, the SEC said, a supposed market maker called ZM Quant was retained to support trading in a token called NexFundAI. On paper, NexFundAI was a way to invest in early-stage artificial intelligence projects.
Employees of ZM Quant allegedly counselled the backers of NexFundAI on how to artificially drive up the price of the token before selling tokens to “cash out at the peaks”, federal officials said in an indictment. At one point in May, ZM Quant’s trades amounted to more than 80 per cent of NexFundAI’s trading volumes, according to the SEC.
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But ZM Quant was unaware that NexFundAI was not just another fledgling crypto token with dreams of a lofty valuation: it was a tool of federal law enforcement agents bent on dismantling the alleged pump-and-dump operation.
NexFundAI traded for only a single day, on May 31, generating $4,600 in artificial trading volume, according to the SEC.
“What we uncovered has resulted in charges against the leadership of four cryptocurrency companies, and four crypto ‘market makers’ and their employees who are accused of spearheading a sophisticated trading scheme that allegedly bilked honest investors out of millions of dollars,” said Jodi Cohen, an FBI special agent, in a statement. “The FBI took the unprecedented step of creating its very own cryptocurrency token and company to identify, disrupt and bring these alleged fraudsters to justice.”
Employees of market-makers Gotbit Consulting, CLS Global FZC and MyTrade MM also face charges, as do those of crypto companies Saitama, Robu Inu, VZZN and Lillian Finance.
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Saitama at one point “boasted a market value of $7.5bn” while its leadership “was actively manipulating the market for the Saitama token and secretly selling their Saitama tokens for tens of millions in profits”, according to the DOJ.
Federal law enforcement officials traced Saitama’s alleged campaign of market manipulation back to July 2021, when one Saitama leader sent a private message to another about a plan to “create an illusion of massive buys and new holders” that will “incite ppl to buy more”.
“Yep,” replied another Saitama backer, who later sent a GIF emblazoned with the words “Pump it up”.
The defendants face a range of charges, including market manipulation, conspiracy to commit money laundering and wire fraud, which can lead to sentences of up to 20 years in prison.
“Wash trading has long been outlawed in the financial markets, and cryptocurrency is no exception,” said acting US attorney Joshua Levy in a statement. “These are cases where an innovative technology — cryptocurrency — met a century-old scheme — the pump and dump.”
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Imagine that you’re 68 years old and have a long-term care insurance policy in place that will help you pay for this all-important type of care later in life. You pay $600 per month in premiums and tell yourself it’s a good investment, considering how expensive long-term care can be.
Consider working with a financial advisor if you need additional help planning for long-term care and other needs you’ll have later in life.
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The problem? Your premiums are well above the average monthly cost of long-term care coverage. Here’s what you should be thinking about if you’re interested in buying long-term care insurance or evaluating whether you’re paying too much for it.
What Is Long-Term Care Insurance?
Long-term care insurance helps pay for extended or residential treatment such as in-home care (like a home health aide) or residential/custodial care (such as a nursing home or assisted living).
Long-term care insurance generally doesn’t cover medical bills outside of the extended treatment itself. For example, if you stay in a nursing home and need to see the doctor, your long-term care insurance would pay for the nursing home while health insurance/Medicare would pay for the doctor’s appointment.
Health insurance and Medicare, on the other hand, don’t pay for residential care. This is what makes long-term care insurance so important for retirement planning. As the American Council on Aging found in 2021, staying in a nursing home can cost more than $100,000 per year. Meanwhile, the median cost of a private room in a nursing home is expected to reach $13,267 per month by 2034, according to Genworth. This is beyond the means of most households to pay out of pocket. While Medicaid can cover these costs you must fall below the program’s income and asset limits, which forces some middle-class retirees spend down their assets until they can qualify for care.
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It is not uncommon for people to sell off family homes and liquidate their retirement portfolios to afford assisted living. This can be tragic, particularly if you want to come home someday or leave those assets to your children. Long-term care insurance can potentially prevent that and a financial advisor can help you plan for it.
What Determines the Cost Of Long-Term Care Insurance?
Long-term care is structured around a monthly or annual premium that’s set when you buy the policy. Then, if you need care, the insurer pays your costs up to the limit of your coverage. For example, if you have a $100,000 per year policy your insurer will cover the first $100,000 in care that you receive each year and you will pay for the remainder. Many, if not most, policies offer lifetime coverage, meaning that if you need permanent care the program will cover you indefinitely.
The costs of a long-term care policy are based on a few key factors, including:
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Your age when you buy the policy
Your gender
The policy’s coverage amount
The duration of coverage (if it covers lifetime stays vs. a limited stay)
Inflation coverage (if the policy grows by a percentage each year)
The younger you are when you buy the policy the longer it will be until you will likely need it. As a result, your premiums will likely be lower. Women pay significantly more than men because they have a longer life expectancy, and so will likely use more care if they need assisted living.
Coverage growth protects your policy from inflation. At a 2% rate of inflation, prices will double roughly every 30 to 35 years, meaning that a policy you buy at 55 may lose half its spending power by the time you’re 85. If you need help assessing your options for long-term care insurance or even purchasing a policy, speak with a fiduciary financial advisor.
Is $600 Per Month Too Much For Long-Term Care Insurance?
The question is, what should your policy cost, and more specifically, is $600 per month too much for a 68-year-old single person to be paying? Long-term care insurance isn’t cheap, and it gets more expensive the later in life you purchase it but it doesn’t have to be this expensive.
According to the American Association for Long-Term Care Insurance, you should probably pay somewhere between $100 and $400 per month for your insurance. While there’s a lot of variability, if you’re an individual with $165,000 in coverage and 2% inflation protection, an average policy will cost:
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$1,650 per year ($137.50 per month) for a male purchasing at age 55
$2,725 per year ($227 per month) for a female purchasing at age 55
$2,600 per year ($217 per month) for a male purchasing at age 65
$4,230 per year ($352.50 per month) for a female purchasing at age 65
Just going off these average premiums, a 68-year-old can pay a lot less than $600 per month for long-term care coverage. However, a premium that high isn’t completely out of the ordinary. For example, the average cost of coverage for a 65-year-old woman who wants an annual 5% inflation adjustment is $7,225 per year or just over $600 per month.
Like all insurance, long-term care policies tend to get more expensive the longer you wait to purchase one. Buying a new policy at 68 won’t be cheap, but it may be cheaper than doing so at 73. Consider working with a financial advisor to determine how much coverage you may need and how much you’ll be able to afford.
Bottom Line
A year at a nursing home can cost over $100,000, placing immense financial strain on the person who needs it and/or their family. While Medicare typically does not cover these costs, long-term care insurance can fill that gap. However, it isn’t cheap. If you can buy it well in advance, though, it can protect your future for a couple hundred dollars per month.
Retirement Insurance Tips
Insurance in retirement can be a very complicated subject. Among the many moving pieces here is the concept of life insurance as a savings account. Depending on the policy you hold, your life insurance policy can act as a retirement portfolio from which you can withdraw assets. See how these policies stack up against standard investments.
A financial advisor can potentially help you plan for your insurance needs. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid — in an account that isn’t at risk of significant fluctuation like the stock market. The tradeoff is that the value of liquid cash can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks.
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As Hurricane Helene’s devastating toll rises to at least 215 fatalities, with thousands still missing, homeowners across the country are taking a hard look at where they live and the risks they face.
According to data issued by Realtor.com, more than 730,000 homes remain without power over a week after the storm, prompting many Americans to consider safer ground for their next move.
The scope of 2024’s extreme weather has been unprecedented. According to the report, natural disasters have inflicted over $25 billion in damage nationwide just this year. Climate change has driven a 20% increase in global floods since 2000, while U.S. wildfire-burned acreage has surged 320% since 1996.
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For homeowners seeking refuge from nature’s fury, Realtor.com identified the top 10 states with the lowest risk of extreme weather damage:
Nevada leads with 90.6% of homes at the lowest risk, representing $440.4 billion in property value.
Nebraska follows at 90.2%, though with a lower total property value of $159 billion.
Colorado ranks third at 89.5%, with over $1 trillion in low-risk property value.
Kansas claims fourth place, with 88.8% of homes in safe zones.
Iowa, Washington, Ohio, South Dakota, and Missouri complete the list, all with over 87% of homes in low-risk areas.
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“Hurricanes present substantial challenges for homeowners, including property damage, increased financial costs, community recovery issues, and emotional stress,” said Realtor.com economist Jiayi Xu. “Opting for a property in states with a lower hurricane risk can help alleviate these concerns.”
The impact of extreme weather extends beyond immediate damage. Insurance premiums have skyrocketed in high-risk areas, with some Florida homeowners abandoning coverage. Each region faces challenges: the West battles wildfires while the Southeast contends with floods. Cities like Austin, Baton Rouge, and Coral Gables grapple with extreme heat damage to properties.
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For those contemplating relocation, Xu suggests using a Realtor’s environmental risk scores to evaluate potential homes. “Prospective homeowners can use these scores to identify safer locations before making their final decision,” she notes.
The reality remains. According to data issued by insurance company Universal Property, Florida has endured 120 hurricanes since 1851, with 37 reaching Category 3 or higher. Texas follows with 64 hurricanes, while North Carolina – surprisingly, the most hurricane-prone state outside the Gulf Coast – has weathered 55.
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