The fallacy of the “crypto’s only good for money laundering” argument

We’ve all heard the lame excuses – cryptocurrency is only good for criminal activity, cryptocurrency is only useful for money laundering, cryptocurrency has no real purpose – in trying to derail crypto as a legitimate alternative to fiat. Of course, the statements need to always be taken with a grain of salt and the speaker needs to be identified. In every case, the person uttering the words was a definite fiat pundit who either didn’t understand crypto or who was too imbedded with fiat to be able to see the bigger picture. The truth has begun to surface, though, and none of those arguments stand up to scrutiny. Japan has just given us another good indication of the fallacy behind the arguments.

The Japan Times reports that, according to an “official police document,” the country has seen a total of 340,000 suspected cases of money laundering activity or abuse this year in all types of financial transactions. Of this amount, only 6,000 transactions were related to cryptocurrency. Quickly crunching numbers, that means that only about 2% of all the money-laundering activity was found in crypto.

6,000 is still a big number, for sure. However, given the fact that 334,000 cases of money laundering were recorded through fiat, it’s merely a drop in the bucket. Measures are already being undertaken to help reduce the number more, but the fact that money laundering can still be so prevalent in fiat after centuries of existence shows how difficult the activity is to control.

Japan is working diligently to provide better oversight of cryptocurrency entities and exchanges. It is introducing a number of measures that will help prevent tax evasion and control initial coin offerings (ICO) and the Japan Virtual Currency Exchange Association (JVCEA), a self-regulatory entities overseeing crypto exchanges, has authority to patrol the industry, as well.

Any system anywhere in the world can be used positively or negatively – nothing can escape this, not even cryptocurrency. However, it has already shown itself to be a viable option and one that allows users to take back control of their own money. It is not “that thing that criminals use” or “an environmental disaster.” It is a legitimate type of currency that continues to be accepted by more and more merchants every day.

The post The fallacy of the “crypto’s only good for money laundering” argument appeared first on CoinGeek.

Read More

Bitcoin SV continues to rise in the ranks

Markets are down all across the globe. Wall Street has seen significant declines in its prices, futures trading was temporarily suspended and the general sentiment has been somewhat bleak. According to CoinMarketCap, even Bitcoin Core (BTC) is down, dropping 2.81% in the past 24 hours. In fact, all of the top five cryptocurrencies have seen declines of as much as 13%. In all of the chaos, though, there is a beacon that is shining bright. As of this writing, Bitcoin SV (BSV) has climbed 24.80%.

BSV now sits in the number five spot in the cryptocurrency rankings by market cap. Its current price sits at $110.94 and doesn’t show any signs of slowing down. This makes BSV more valuable than Ether, which is trading at just $97.57. Bitcoin Cash (BCH), which includes the controversial Bitcoin ABC version of BCH following the hard fork earlier this month, has dropped by 18.32% in the same period and now sits in seventh place by market cap – below Tether.

One of the reasons BSV is gaining ground is because of miners. They have remained loyal to BSV and their loyalty is beginning to show signs of paying off. It has been a difficult road, but one that has been well worth it in order to continue to develop the only cryptocurrency that follows the original definition of what a digital currency should be.

BSV has seen increases of almost 40% over the past week. While it’s difficult to determine exactly why it continues to climb, there are educated conclusions that can be made. BCH was running solid when it was still being rightfully viewed as the original Bitcoin as defined by Satoshi. As soon as chatter began that there were discrepancies in the direction the blockchain would take, the wobbling began. That wobbling continued through the hard fork, leading to the unprecedented drops seen in the price of BCH.

BSV is moving forward with a model that will ensure that Bitcoin lives on. This is being recognized by crypto enthusiasts who are beginning to understand that BSV and its supporters were right all along. Of course, a lawsuit against everything Bitcoin ABC stood for doesn’t help BCH’s cause, either.

There’s no way to know whether or not this bullish trend will continue. However, things are certainly looking up for BSV.

The post Bitcoin SV continues to rise in the ranks appeared first on CoinGeek.

Read More

MikroTik cryptojacking still in play with over 400K affected routers

The number of MikroTik routers that have been affected by a malicious malware that mines privacy-centric cryptocurrency Monero (XMR) has risen to 415,000, according to security researchers.

The cryptojacking malware was first discovered in August. According to a Trustwave report, the malware attacked the MikroTik routers after their systems became vulnerable earlier this year in April. Initially, hackers had penetrated 175,000 routers and then expanded to Eastern Europe, where they attacked 25,000 more routers. The hackers were using Coinhive and 15 other malware to mine XMR.

Since it was discovered, Twitter user VriesHd and researchers from Bad Packets have been following the cryptojacking malware. In September, they reported the number of affected MikroTik routers have risen to 280,000. In his recent tweet, VriesHd explains that the numbers have doubled since the initial attacks.

According to VriesHd, the number is derived from checking three possible ways hackers could be abusing MikroTik, although the number could be higher since the data reflects IP addresses known to have been infected with cryptojacking scripts. He noted that it would not surprise him if the actual number totals to somewhere around 350,000 to 400,000.

The researcher further found that the hackers are no longer exclusively using Coinhive; they have been using other mining software like Omine and CoinImp to mine the privacy-centric cryptocurrency.

To protect themselves from the malware, Bad Packets Report security expert Troy MUrsch advises MikroTik router users to download the latest firmware version available for their device. This will prevent the malware from using their routers to mine cryptocurrencies.

VriesHD also points out that internet service providers (ISPs) can also be used to fight the spread of malware by forcing over-the-air updates to the routers.

Cryptojacking cases continue to rise with figures increasing by 500% this year. According to reports, Brazil is the leading country affected by the malicious malware. Research shows that Coinhive has hit the country over 81,000 times in October. India ranks second with 29,000 discovered incidents followed by Indonesia, which has more than 23,000 cryptojacking cases.

The post MikroTik cryptojacking still in play with over 400K affected routers appeared first on CoinGeek.

Read More

Vertcoin loses over $100,000 in 51% attack: report

Vertcoin (VTC) has fallen prey to a 51% attack, with some estimates suggesting losses have already surpassed $100,000 as a result of double spend transactions on the chain. It is the latest example of a 51% attack, where attackers take control of a majority share of a network, reflecting the inherent weaknesses in the proof of work model.

According to a Medium post by Mark Nesbitt, a security engineer at Coinbase who identified the attack, the requirement for ‘honesty’ in proof of work remains the key vulnerability to attacks of this kind. He wrote: “The “honesty” of more than half of miners is a core requirement for the security of [BTC] and any proof of work cryptocurrencies based on [BTC]. Honest action, in this context, means following the behavior described in the…white paper. This is sometimes described as a “security risk” or “attack vector,” but is more accurately described as a known limitation to the proof of work model.”

“Failure to meet this requirement breaks several core guarantees of the Bitcoin protocol, including the irreversibility of transactions,” according to Nesbitt.

The attack follows on from several other similar attacks this year, including those affecting MONA, BTG and XVG. According to Nesbitt, this demonstrates the vulnerability of the so-called ‘long tail’ of crypto assets, as well as the weaknesses of the proof of work system.

“These attacks on VTC are not the only examples of a successful 51% double spending attack. 51% attacks occurred in BTG, XVG, and MONA earlier this year; this is merely another incident that shows that threat actors exist that are both resourced and sophisticated enough to execute this kind of attack. This recent spate of successful 51% attacks has significant implications on what is often referred to as the “long tail” of cryptocurrency assets,” he explained.

“There are a large number of cryptocurrencies, including many based on [BTC], that implement their own proof of work based blockchains. Observers of the industry have claimed that these assets have the same properties as SegWit. This claim has now been undeniably, empirically proven to be false.”

With attacks of this kind becoming increasingly common, it looks as though more unsuspecting crypto investors will be caught out by investing in insecure tokens.

The post Vertcoin loses over $100,000 in 51% attack: report appeared first on CoinGeek.

Read More

US regulator calls for global cooperation to stop fraudulent ICOs

Initial coin offerings (ICOs) are outright frauds that need to be stopped, according to the U.S. Securities and Exchange Commission (SEC). This is why it has become hard for regulators to monitor ICOs activities in different jurisdiction because often money raised in ICOs comes from investors in America and other parts of the world.

While speaking at Harvard Law School’s Program on International Financial System, SEC Co-Director for Enforcement Division Steven Peikin noted how the ICO market has exploded from a mere concept to a phenomenon within a short period of time. In 2016, ICOs raised $100 million, while in 2018, they raised $22 billion—a 22,000% increase. The novelty of ICOs, accompanied with the excitement surrounding blockchain technology, has been a key attraction that enterprising people have been using to lure investors, according to Peikin.

The hype and growth of the  ICOs can obscure the fact that most of these offering are high-risk investments. At times, the issuers may lack established records of accomplishment. They may also not have viable products business model or proper security measures safeguarding the digital assets from hackers. Without considering all these investors are quick, to pour out their money to projects that eventually fraudulently shut down.

Peikin recalled the case of ICO fraud conducted by Canadian Dominic Lacroix, who defrauded many U.S. investors out of some $15 million by promising a 13-fold profit in less than a month. Lacroix turned out to have had a long history of doing similar financial frauds in Quebec and Canada.

Peikin believes in fighting the fraudulent activities in ICOs and the crypto space there should be global cooperation. He acknowledges collaboration between, the United stated and Canada in Operation Crypto Sweep. The operation was launched in May 2018 by the two countries, which is conducting over 70 investigations into cryptocurrency scams and fraud in ICOs. So far, the North American Securities Administrators Association has sent cease letter to operators of fraudulent crypto companies I more than forty jurisdictions in both countries.

According to Peikin, “The sponsors of ICOs are, in many instances, located outside the United States. And international cooperation is critical to our ability to investigate and, where appropriate, recommend that the Commission bring enforcement action.”

Meanwhile, SEC lawyers recently warned celebrities from endorsing ICOs to avoid being charged with fraud. A few celebrities, such as Floyd Mayweather and Dj Khaled, have already fallen victims to such fraudulent ICOs.

The post US regulator calls for global cooperation to stop fraudulent ICOs appeared first on CoinGeek.

Read More

Chile’s Supreme Court decides against crypto exchange

The Supreme Court in Chile has issued a decision allowing the state bank Banco del Estado de Chile to close the account of cryptocurrency exchange Orionx on concerns over the nature of transactions being conducted on the exchange.

The ruling, reported by local news outlet Emol, reverses earlier decisions of the country’s Court of Appeals, and its anti-monopoly court, that had allowed the bank accounts of Orionx and several other plaintiffs to remain open.

According to the Supreme Court’s third division, the bank did not violate the Constitution, and that its acts did not arbitrarily curtail Orionx’s rights.

The decision stated that the assets being traded by Orionx, including ETH, XRP, LTC, and BTC, lacked physical manifestation and had “no intrinsic value,” in that they were not backed by any government or company. Rather, the digital currencies were viewed as controlled in a decentralized network of users.

The Supreme Court said that because of the nature of the assets, the bank could not comply with regulations requiring specific identities involved in transactions, which made the closure of the accounts justifiable.

The Banco del Estado de Chile was one of 10 banks that had closed accounts of cryptocurrency-related companies. Aside from Orionx, Buda and Crypto MKT had filed complaints with the anti-monopoly court of Chile. The move of banks to deny services to those in the cryptocurrency sector had been criticized as the act of a few in positions of power, who had not recognized measures put up by the companies to promote transparency and security.

Other countries’ banking sectors have shown greater openness to provide services for those using blockchain and cryptocurrencies, though not without conflict among regulators. Switzerland, where ‘Crypto Valley’ Zug is located, has had the government study how blockchain companies could be assisted in opening up bank accounts. Also, the Hypothekarbank Lenzburg has moved to accommodate such companies. However, the Swiss Financial Market Supervisory Authority (FINMA) has maintained a tough stance, requiring invested cryptocurrency assets to be covered by eight times their amount in fiat, to take into account the perceived risk associated with volatility of cryptocurrencies.

The post Chile’s Supreme Court decides against crypto exchange appeared first on CoinGeek.

Read More

Poloniex exchange launches institutional trading platform

The Poloniex cryptocurrency exchange is looking for big money. It announced in a Medium post this past Tuesday that it is moving forward with a plan to offering support for institutional accounts that will be made available for a number of trading pairs and APIs (application programming interface).

The post reads, in part, “We are excited to announce that institutional accounts are now available on Poloniex! Institutions large and small can enjoy the benefits of our large curated selection of crypto asset trading pairs, dedicated support and robust API services. Poloniex customers also enjoy no fees on BTC/USDC trades in the month of December.”

Poloniex was acquired by Goldman Sachs-backed Circle this past February for $400 million. With the new accounts, Circle will give investors the ability to conduct over-the-counter (OTC) trades using its Circle Trade platform, provided they’re ready to make an investment of at least $250,000. In addition, Circle will offer institutional services through Poloniex, as well as trading pairs with the Circle-created USDC stablecoin.

When 2018 kicked off, everyone expected to see a lot of institutional investors joining the crypto space. The rollout has been extremely slow, with only Coinbase being the major exchange to go after the investment class this past May. Coinbase is also looking to introduce an OTC crypto desk, but that isn’t expected to be introduced until sometime next year.

Poloniex has had a rough year. It has seen the exchange shuffle around its services a number of times and announced in October that it would be removing margin trading and lending products for U.S. customers by the end of the year. This past summer, it received a lot of backlash from users who had become locked out of their accounts after the exchange introduced new verification procedures. It had to deal with mounting pressure at the end of last year as users began flocking to the platform in response to the meteoric rise of Bitcoin Core’s (BTC) price, and wasn’t able to keep up with the load.

Poloniex is still in a solid position, despite the bumps in the road. This past October, a report by DRW Holdings Inc. showed that institutional investors now make up the largest segment of crypto buyers for transactions of more than $100,000, displacing high net worth individuals at the top of the list.

The post Poloniex exchange launches institutional trading platform appeared first on CoinGeek.

Read More

NASDAQ confirms Bitcoin futures launch coming early next year

There has been a lot of talk by several mainstream financial entities in the past two years that they could be considering launching different cryptocurrency products. While some, such as the CME Group and CBOE exchanges, have already taken the step, many others are still trying to get the ball rolling. One, the NASDAQ exchange, has had plans in the works for a while and has now confirmed that it hopes to launch its platform beginning sometime early next year and that it will start with Bitcoin Core (BTC) futures.

In a recent interview with news outlet The Express in the UK, NASDAQ VP of Communications Joseph Christinat reiterated the company’s position that it is still moving forward, despite the current market slump. He said that there’s been “more than enough work dedicated into the endeavor to make remove the question of regulatory approval. We will do this, and it is definitely happening.” Christinat added that the biggest challenge now is to receive approval by the U.S. Commodity Futures Trading Commission (CFTC).

NASDAQ, the world’s second largest stock exchange, has been developing its crypto portfolio for the past several years. It had hoped to launch one or more products this past summer, but revealed that it would postpone the launch in order to develop a platform that would be “unique enough” to attract a large following.

Christinat added, “We have put in plenty of financial resources and energy into delivering the capability to make this operational, and we’ve been on it for quite some time. Long before the market turbulence. The current atmosphere won’t affect our timeline in any way. We are going to do this no matter what comes.”

NASDAQ is joined by companies such as Fidelity Investments and the Intercontinental Exchange (ICE) that are preparing to introduce cryptocurrency trading products. Fidelity has said that it is still on target for a December launch for its offerings, while ICE, which is developing the Bakkt platform, has had to delay its launch from December to next January at the earliest.

What is still not known is how the BTC futures will operate. When CME and CBOE introduced their futures products last year, they were offered as cash-backed futures. Bakkt has said that it anticipates being the first to offer futures that are physically settled and would more than likely maintain those bragging rights even if NASDAQ decided to go the same route.

The post NASDAQ confirms Bitcoin futures launch coming early next year appeared first on CoinGeek.

Read More

US Congressman introduces federal crypto regulations

The U.S. could be inching closer to creating a regulatory framework for cryptocurrencies and initial coin offerings (ICO). Representative Warren Davidson from Ohio has been working on a new bill that is designed to pave the way for crypto and ICO regulations, according to media outlet Cleveland.com, and would clarify the definition of cryptocurrencies.

The bill will be presented to the House of Representatives for discussion. It looks to create a new and unique asset class that would cover crypto and ICOs, allowing the government to regulate the crypto space more thoroughly. The legislation is designed to prevent digital assets from being classified as securities and would allow the federal government to maintain complete regulatory oversight of token offerings.

There is a lot of confusion in the U.S. regarding how to define cryptocurrencies. The Securities and Exchange Commission (SEC) has said that, with the exception of Bitcoin Core (BTC) and Ether (ETH), the majority of cryptocurrencies are securities. On the other hand, the Commodities Futures Trading Commission (CFTC) asserts that they are commodities.

Two additional agencies, the U.S. Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN), both say that crypto is money. Without a central definition in place, standard regulations cannot be created.

Davidson is somewhat of a proponent of cryptocurrencies, or at least of the space in general. He has been pushing for regulation of crypto and assisted in the writing of a letter to the SEC this past September in which he asked that the commission speed up its introduction of legislation in order to prevent tech companies from leaving the U.S. The letter read, in part, “Current uncertainty surrounding the treatment of offers and sales of digital tokens is hindering innovation in the United States and will ultimately drive business elsewhere. We believe that the SEC could do more to clarify its position.”

Even if the bill were to pass through the House, it would still need to be considered by the Senate. Ultimately, this means that regulations shouldn’t be expected to come anytime soon. Perhaps they’ll be implemented sometime next year, but there’s still a long road ahead.

The post US Congressman introduces federal crypto regulations appeared first on CoinGeek.

Read More

‘Relaxed’ Swiss license allows fintech startups to accept public deposits

The Swiss financial regulator has issued fresh guidelines for fintech startups, giving leeway to licensees to accept up to CHF100 million ($100.1 million) in public deposits, in a radical move designed to boost innovation in the sector.

The move comes as part of the new Banking Act, which has been designed in part to create more favourable conditions for fintech businesses, including expanding the options for crowd-lending models within a regulatory sandbox environment.

The guidelines are part of a wider strategy of supporting the crypto sector by the Federal Council of the Swiss Financial Market Supervisory Authority, which aims to boost Switzerland’s profile as a global destination for crypto and fintech startups.

Crucially, the new guidelines give crypto businesses the ability to accept deposits from the public without the need for the same authorisations as a bank, enabling them to explore innovative models without the full range of compliance expectations.

According to a statement from FINMA, which will oversee firms in the regulatory sandbox and is responsible for issuing the new licenses, the measures will begin to come into effect at the turn of the year. It explained, “With the new measure, companies with special authorisation can accept public funds of up to CHF100 million from 1 January 2019, provided they neither invest nor pay interest on these funds.”

The statement goes on to reference amendments to the Bank Ordinance (BankO), which will come into force in April 2019, noting, “In the BankO, the sandbox will additionally be extended to include crowdlending business models, whereby public funds up to a total amount of CHF1 million can one day be brokered not only for commercial and industrial purposes but also for private consumption.”

The fintech license is aimed at startups looking to explore models of taking deposits, without investing or paying interest on those deposits.

The policy is designed to help cement the reputation of Switzerland and the city of Zug as a haven for cryptocurrency innovation, with an already established and booming crypto sector in the country.  

The post ‘Relaxed’ Swiss license allows fintech startups to accept public deposits appeared first on CoinGeek.

Read More
Top