The Bank of Lithuania announced that it had completed the research phase of its blockchain project called LBChain. The central bank now plans to deploy the platform by the end of 2020 and expand its use cases beyond the financial sector. Bank of Lithuania to Expand its Blockchain Capabilities Beyond Financial Sector Earlier this week, the central bank of Lithuania successfully completed its third and final stage of the LBChain project. During the three phases, the bank developed a unique sandbox that merged technological and regulatory infrastructures. Now the bank is ready to develop the Lithuania Chain (LTChain). The latter is an upcoming blockchain platform to be used in the country’s energy, healthcare, and transport sectors. The bank will collaborate with other government agencies and attracts startups from the mentioned sectors. LBChain project manager Andrius Adamonis explained: LBChain has proved to have enormous potential. It is the cradle of future technologies, offering the opportunity of creating state-of-the-art solutions. Having been already tested by financial market participants, the platform may also be applied in such fields as energy or healthcare. As per Adamonis, the next step is to advance to the production phase and make the blockchain solution available to consumers. During its development stages, the platform was used by 11 fintech firms from eight countries. It was trialed in over a dozen financial products and services. The developers noted that most of the testing was done remotely. The LBChain platform uses the infrastructure provided by Hyperledger Fabric and R3’s Corda. The solution was developed by IBM Polska and TietoEVRY. Professional services giant Deloitte also took part in the development and testing of LBChain. The Bank of Lithuania says that LBChain is the world’s first blockchain platform developed by a financial market regulator. The bank has developed it in two years. The first stage focused on concept creation. The prototype was tested in the second phase, while the final stage was focused on the final development and testing. LBChain platform: source: https://www.lb.lt/en/lbchain Use Cases Included Bond Issuance and Regulatory Reporting During the three stages of development and trial, sandbox participants used the platform for various use cases. A startup used LBChain for a regulatory reporting solution. Another firm leveraged the technology for issuing green bonds. Other examples of tested solutions involved KYC system for AML compliance, smart contract for factoring, cross-border payments, unlisted share trading platform, payment token, and crowdfunding platform, among others. Adamonis said the project attracted foreign investment, encouraged cooperation with educational institutions and expanded the central bank’s technological capabilities with the help of blockchain. In the future, the Bank of Lithuania intends to attract more startups from abroad to improve cooperation between the public and private sectors.
Earlier this week, a federal judge ordered a case against Ripple and its CEO Bradley Garlinghouse be consolidated with a class action led by Bradley Sostack. In civil law, consolidation involves the merger of two or more cases that are similar in nature in order to optimize the judicial resources. BMA’s Suit Merged with Class Action At the beginning of May, Puerto Rican company Bitcoin Manipulation Abatement (BMA) filed a suit against Ripple and its CEO. The little-known firm accused the company of violating US federal rules when it distributed the XRP token. Specifically, BMA alleges that Ripple sold XRP as unregistered securities and misled investors by engaging in false advertising. On Thursday, Judge Phyllis J. Hamilton of the US District Court for the Northern District of California required that the BMA’s case be consolidated with a putative class action. The latter was initiated by Bradley Sostack in May 2018. Sostack also accused Ripple of selling XRP as an unregistered security, thus breaking the securities law. Hamilton considered that the two suits should be reviewed together, especially when they have the same defendants. She noted that the BMA’s allegations are “materially identical” to those in the class action. The judge commented: “Relating the BMA action to this action would avoid the duplication of labor and conflicting results that might otherwise arise. Plainly, a core contention at issue in this litigation —whether XRP qualifies as a security under federal and California state law — is novel and nuanced. While the court is less concerned about potentially conflicting results, its determination of that core contention, in addition to that of the other questions presented in this action, will require significant labor.” The Current State of Class Action Against Ripple As of the class action led by Sostack, it has been around for more than two years. The plaintiffs accuse Ripple of failing to register its token with the US Securities and Exchange Commission (SEC), creating 100 billion XRP out of nothing and launching an initial coin offering that has no end. At the end of last year, Ripple wanted to dismiss the class action suit. Garlinghouse’s company claimed that the accusations exceeded the three-year deadline stipulated in the statute of repose in federal securities laws. Basically, the plaintiffs should have acted within three years after the launch of XRP, Ripple noted. Nevertheless, in February, Judge Hamilton let the case move forward. She asked for more details about the allegedly fraudulent claims related to the token. The plaintiffs responded with an amended complaint about two months ago. They said that Ripple intentionally overstated XRP’s actual utility as a “bridge currency” for cross-border payments.
The French Competition Authority, called Autorité de la concurrence, is looking for feedback from the public and fintech industry executives on the evolution of the payments industry. The regulator wants to understand the latest developments of blockchain, cloud, cryptocurrencies, digital wallets, and their impact on payments. Competition Watchdog Notes Rapid Development of Crypto Assets and Blockchain Last week, the competition regulator launched a survey with a focus on the fintech industry. Specifically, the agency is interested in the impact of innovative technologies like blockhain and cloud on payment services. The Autorité de la concurrence wants to know how the new players entering the market will interact with traditional banking solutions. The survey will help the watchdog figure out whether blockchain and cloud startups and companies are bringing competition to old-fashioned banking. The regulator said that technological innovations had changed both the supply side, as crypto and cloud firms offer new possibilities, and the demand side, as more consumer are looking for payment systems that are in line with the latest trends. The competition authority has mentioned how Apple, Facebook, and Google are entering the payments industry. These giants, along with many startups, are directly challenging banks. Here Are Some of the Questions The respondents should submit their answers by June 19. Some of the questions are as follows: What are your views on the arrival of major digital players into the payments sector in France? Do you think major digital players compete with or complement the services offered by banks? What do you think are the impacts of technologies such as “cloud” and “blockchain” on the functioning of the payment services sector? Would you be able to identify competitive issues related to the development of crypto-assets? Would you be able to identify competitive risks linked to the use of blockchain technology by certain players in the sector of new technologies applied to payment activities? If yes, which ones? Banks Might Lose Their Dominance Indeed The interest of the French regulator is well-founded, as banking giants might lose dominance in the payments market. With or without Libra, many consumers are already using cryptocurrencies for payments more often than we think, at least according to a recent Visual Objects study. During the last few months, more crypto and blockchain firms have expanded their offerings to allow users to buy with crypto. Starting from March, Android users can connect their Coinbase card to their Google Pay wallets. Elsewhere, CoinPayments announced a strategic partnership with Shopify last week.
JPMorgan Chase Bank NA, the consumer and commercial branch of US banking giant JPMorgan, agreed to pay $2.5 million to settle a class action lawsuit. The suit is related to its previous decision to consider purchases of cryptocurrency with its credit cards as cash advances. Plaintiffs to Receive 95% of Damage For years, Chase processed credit card crypto payments as purchases. In 2018, the bank unexpectedly started to consider such operations as “cash advances,” which resulted in higher fees for cardholders. Shortly after the bank’s move, Brady Tucker initiated a class action against it. He was joined by Ryan Hilton, Stanton Smith, and other customers of Chase. The plaintiffs are satisfied with JPMorgan’s decision to settle the case and pay $2.5 million, even though the bank doesn’t admit any wrongdoing. According to a motion filed Tuesday in Manhattan federal court, Tucker and other customers told Judge Katherine Polk Failla: “This settlement represents an outstanding result for settlement class members.” Tucker said: “Plaintiffs estimate that the $2.5 million settlement fund constitutes more than 95% of the [damages allegedly sustained by] settlement class members. Such a high-percentage recovery stands far above the typical recovery for class actions such as this one.” In February 2018, JPMorgan Chase was among several US banking giants that announced they would no longer permit their credit cards to be used to purchase cryptocurrencies like Bitcoin. Plaintiffs Want Chase to Stop Imposing High Fees on Crypto Purchases Chase tried to end the suit on several occasions, claiming that the change in 2018 was not a violation of federal consumer protection laws. However, in 2019, plaintiffs managed to prove that the bank violated provisions of the federal Truth in Lending Act related to “clear and conspicuous” disclosures. This led to settlement negotiations with Chase. Eventually, Tucker, Hilton and Smith end up by leading a class that involved thousands of Chase cardholders who had bought cryptocurrency online and were forced to pay high fees. The clients seek an order declaring that the bank’s cardholder agreements don’t let it enforce such high fees on crypto purchases. Interestingly, earlier this month, JPMorgan has extended its banking services to cryptocurrency exchanges Coinbase and Gemini, according to a Wall Street Journal report. This is the first time when America’s largest bank accepts clients from the crypto space. JPMorgan’s recent moves might suggest that the bank is becoming more friendly towards the cryptocurrency market. However, time will show if this is indeed the case. Images from Shutterstock
Recently, NewsBTC reported that Russia planned to criminalize the use of cryptocurrency, as stipulated in the latest draft bill “on digital currency.” However, Russian lawyer Maria Agranovskaya told local media agency ForkLog that the bill limits the rights of cryptocurrency holders to judicial protection, which is against the country’s constitution. Russian Expert Says Draft Bill to Ban Cryptocurrency Has Many Problems The draft bill, titled “On Digital Currency,” says that those who hold Bitcoin or other coins can rely on judicial protection only in the case when the crypto holdings are declared. The local expert noted: “This directly violates the constitutional rights of citizens of the Russian Federation.” She admitted that the government should provide crypto holders the ability to declare their digital currencies. Nevertheless, the legality of their ownership should not be dependent on the declaration itself. Agranovskaya doesn’t agree with that fact that the bill in its current form stipulates criminal liability not only for those who are involved in the cryptocurrency market in a direct manner, but also touches upon programmers and even lawyers who advise on such matters. Another issue with the draft bill is that it might violate the principle of freedom of the media. The document proposes a ban on the promotion of the issuance and circulation of cryptocurrencies. In reality, reporting on various crypto-related events might also be interpreted as a form of promotion. Thus, any mention of crypto could go against the law if the bill is approved by parliament. Besides this, the expert is not satisfied with the terminology of the bill. She said: “There is total confusion amid draconian sanctions. Digital currencies are prohibited, while the purport of operating tokens (digital operating tokens – “операционные знаки” is a term coined specifically for this bill) are completely incomprehensible, although they are essentially the same.” Agranovskaya concluded that the bill will kill the nascent cryptocurrency market in Russia and the country’s digitalization efforts if the State Duma passes it in its current form. Other Experts Express Similar Opinions Other local experts also expressed their worries that the proposed bill wouldn’t fix the underground circulation of cryptocurrencies. Meanwhile, the law can destroy legal businesses. United Traders co-founder Anatoly Radchenko told local media agency RBK that the government wouldn’t be able to implement the ban because it’s difficult to track who owns Bitcoin. He noted that it doesn’t make sense at all. “It is like trying to ban YouTube or the Internet. It doesn’t make any sense,” the crypto executive said. The draft bill says that if an individual takes part in a cryptocurrency transaction and uses the cryptocurrency as a means of payment, he should pay a fine ranging from under $1 to about $14,000 or even face up to seven years in prison. The bill was developed by the Digital Economy think tank and the Skolkovo business accelerator. Featured image from Shutterstock.
Many gold investors are not endorsing Bitcoin as an investment option. Nevertheless, digital asset manager CoinShares launched an index that tracks gold and five crypto assets. CoinShares’ CGCI is EU BMR Compliant Earlier on Tuesday, CoinShares launched CoinShares Gold and Cryptoassets Index (CGCI). It is promoted as the first EU Benchmark Regulations (EU BMR) compliant index for the crypto industry that merges gold and crypto assets. The index can be monitored on Bloomberg Terminals and Refinitiv. The goal of the new index is to offer exposure to digital assets while boosting average returns and smooth volatility. The CGCI combines the high volatility of cryptocurrencies, the low volatility of the precious metal, and the almost inexistent correlation between the two. However, during global crises, both gold and Bitcoin might be regarded as reliable safe-havens, which makes a case for a temporary correlation. Still, the index aims to give institutional investors access to more effective risk control to crypto assets by leveraging the stability of gold. While there are several crypto-oriented indexes that offer exposure to multiple crypto assets via capitalization weighting, most of them cannot boast genuine risk diversification given that there is a high correlation among cryptocurrencies. As of the beginning of May, crypto assets comprise 31.75% of the CGCI in five equally-weighted components, and gold comprises the remaining 68.25%. Performance of Bitcoin, Gold, and the CGCI index (source: https://coinshares.com/investment-products/index-strategies) CGCI Might Boost Crypto Adoption Among Institutional Investors Institutional investors have always been welcomed to the crypto industry, as they have the potential to push the market to new levels. However, Chainalysis found out that whales had driven the Bitcoin crash in mid-March. Thus, there is much room for institutions to come back, especially when COVID-related restrictions are lifted. CoinShares hopes that its index bodes well for the image of the cryptocurrency market and will bring more professional investors. The company’s executive chairman, Daniel Masters, commented: “Robustly researched and documented index products were the catalyst for institutional adoption of commodities in the late ’90’s through the advent of the Goldman Sachs Commodity Index. This crypto and gold index aims to do the same, by using academic research and its benchmark regulated status to pass muster with even the most stringent investment committees.” CoinShares has conducted academic research in collaboration with Imperial College London to figure out how gold and crypto assets would work together in terms of risk distribution. Professor Will Knottenbelt, who leads the Imperial College Centre’s Cryptocurrency Research and Engineering unit, explained: “The CGCI is the product of nearly 2 years of research, development and experimentation conducted by Imperial in close collaboration with CoinShares.” CoinShares is now thinking about turning the index into an investable benchmark as part of its passive products business. Featured image from Shutterstock.
India is one of the fastest-growing cryptocurrency markets in the world, according to a recent report by Coinpaprika and OKEx. The trend will likely continue as the government has recently made a u-turn by endorsing crypto operations. Immigrants, Govt Policies Are Driving Cryptocurrency Market’s Growth in India The report cites three main factors that are driving the crypto market – immigrants, finance, and government policies. The former two are supporting the demand side of the crypto space. Many immigrants use cryptocurrencies for cross-border remittance and exchange of fiat currencies. The fact that India has the largest population outflow in the world is generating a huge demand for remittances to the country. Traditionally, the volume of remittances by Indian immigrants has been among the highest in the world, and many of them are now turning to cryptocurrencies . Migrant remittance inflows in India (Source: knomad.org) Many Indians are using Bitcoin, XRP, and other cryptocurrencies as cross-border payment channels to save on remittance fees as much as possible. Besides remittances, Indians at home are using cryptocurrencies as a channel to convert rupees to the US dollar or other more stable fiat currencies. India is currently going through the worst recession in its history, which puts pressure on the local currency. The rupee has devalued against the US dollar and other fiat majors. In order to preserve their savings, many Indians would rather keep USD, but that’s often difficult considering the strict forex regulations. In these circumstances, Bitcoin and other cryptocurrencies come to the rescue. Many Indians would convert their rupees to Bitcoin and then to USD via P2P trading platforms like Paxful or LocalBitcoins. Government Friendlier to Crypto Another factor that helps the crypto market expand at a rapid pace is that the Indian government has become friendlier to this emerging space. In March of this year, the Supreme Court nullified the central bank’s ban against cryptocurrency. Since then, volume figures on most cryptocurrency exchanges operating in India have surged. Just recently, the Reserve Bank of India (RBI) clarified that it allows banks to provide accounts to crypto exchanges, companies, and traders. The central bank has responded to an information request by Harish BV, a co-founder of local crypto exchange Unocoin. Even though the Supreme Court lifted RBI’s ban on crypto-related businesses, uncertainties still persisted, as many banks didn’t know whether they could provide accounts for such clients. Some banks were still rejecting crypto businesses in early spring. The RBI’s latest intervention brings more clarity by openly admitting that banks should not restrict crypto exchanges and other companies.
Sberbank, Russia’s largest bank, is buying more contactless ATMs that are powered by blockchain, according to local news agency Izvestia. Interestingly, the move comes amid a proposed bill to penalize individuals and companies that use crypto and Bitcoin in financial transactions. Sberbank Leverages Blockchain for Contactless ATMs To avoid confusion, Sberbank’s ATMs have nothing to do with crypto as they don’t act as BTMs. The banking giant aims to cut the need for physical contact of clients with their bank cards amid the COVID pandemic. The blockchain-powered devices will support several contactless payment systems, including Google Pay, Apple Pay, Samsung Pay, Mir Pay, and Huawei Pay. The ATMs are also equipped with functionality for pattern recognition and are protected by anti-vandal systems. In total, Sberbank plans to buy 5,000 ATMs within a framework of a tender worth over $108 million. Consequently, each machine will cost around $22,000. While it is not a secret that Sberbank is a big fan of blockchain-related innovation, it is unclear how exactly do the new ATMs leverage the technology. About two years ago, the bank launched a blockchain lab to create and trial the technology for various tasks. For instance, in the fall of last year, Sberbank became the first Russian bank to patent a system that converts repo into smart contracts on blockchain. Today, Sberbank has about 75,000 ATMs across Russia, of which 55,000 are fully functional. Russia Might Punish Those Who Use Crypto Sberbank’s move is proving that the Russian state doesn’t want to stay aloof from the blockchain adoption, as the bank is owned by the government. On the other side, the country seems to have a problem with the free use of crypto, including Bitcoin. At the end of last week, Russian news agency RBK said that the bill on crypto, which has been stagnating for over two years, might go through some amendments that seek the prohibition of the issuance of cryptocurrencies and their operations on the Russian territory. Apparently, the distribution of information about related activities will also be interdicted. The draft bill, which was submitted by a group of deputies to the State Duma (the parliament’s lower house), proposes that individuals who use Bitcoin in financial transactions should face up to seven years in prison and penalties worth up to $7,000. Even China didn’t impose such drastic measures when it unexpectedly shut down crypto exchanges. If the bill becomes law, Russian citizens will be able to become owners of cryptocurrency only if they inherit it. Featured image from Shutterstock.
China’s Inheritance Law might soon be updated to include internet property and cryptocurrency, including Bitcoin. The draft bill is currently being reviewed by the government. New Inheritance Law to Be Part of China’s First Civil Code, and It Could Impact Bitcoin Recently, the Chinese parliament revealed the draft of its first civil code, which includes the protection of civil rights like property, personality, contract, marriage, infringement, and inheritance. The wide-ranging package of laws is expected to promote the country’s rule of law. In the law about inheritance, the Chinese government has introduced a key framework that could impact cryptocurrency and Bitcoin owners. The current “Inheritance Law,” whose original version was first established in 1985, included civil income, housing, trees, cultural relics, and copyrights. The new civil code replaced the above terms. It now stipulates that when a natural person dies, his/her legacy is the personal legal property. This touches upon internet property and virtual currency such as Bitcoin. Dovey Wan, founding partner at Primitive Ventures, tweeted that users should care more about their Bitcoin’s private keys rather than protective laws. China's Inheritance Law has expanded the scope of inheritance to include internet property and cryptocurrency (so Bitcoin is included) but I would rather my Bitcoin be protected by the key itself not the law tho , the problem with law is always enforcement not legislation — Dovey 以德服人 Wan (@DoveyWan) May 25, 2020 Lixin Zhang, Professor at Renmin University of China, reportedly said in an interview with China Central Television (CCTV) that the old version of Inheritance Law hasn’t been in line with the needs of the modern society. In the last few decades, China’s economy has boomed and inclined towards technology adoption and industrialization. New Chinese Civil Code to Speed up Modernization The draft legislative package was submitted to the annual session of China’s national legislature for review, although it still remains unclear as to how much it will impact Bitcoin. Li Zhanshu, chairman of the National People’s Congress (NPC) Standing Committee, delivered the committee’s annual work report earlier today at the third session of the 13th NPC. The official said that the NPC Standing Committee solicited public opinions on seven occasions during the compilation of the code, which has been in work since 2014. Wang Yi of Renmin University of China commented: “Having a civil code will be another crucial milestone in developing a socialist legal system with Chinese characteristics. It will greatly boost the modernization of China’s system and capacity for governance.” However, not everyone agrees that the new civil code will bring significant changes. Some experts argue that the code is nothing else than a mix of existing laws, suggesting that the impact will be minimal. Featured image from Shutterstock.
Deutsche Bank analyst Marion Laboure said that the major central banks that recently formed a think tank to explore digital currencies might take concrete actions within three years. The global pandemic is accelerating the process. COVID Pandemic Will Speedup CBDC Adoption When Bitcoin first came out, central banks ignored the potential of blockchain and even tried to curb crypto adoption. When they understood that cryptocurrency is not only hype, some of them hinted that sometime in the future we might see central bank digital currencies (CBDCs). However, their tone has always been as if this will happen in the post-homo sapiens era. Now they’re rushing to adopt blockchain so that they can control cash. While central bankers still despise Bitcoin, at least they can create their own version of digital currency that they could monitor. Deutsche Bank analyst Marion Laboure told Reuters that the central banks that recently formed a group to trial CBCDs would probably issue the first “general purpose digital currency” within about three years from now. The rush is caused by the current COVID-19 pandemic. In January of this year, Bitcoinist reported that the European Central Bank, along with the central banks of Canada, England, Japan, Switzerland and Sweden had formed a think tank to create CBDCs. The Bank for International Settlement (BIS) also joined the initiative. The group represents about 1.5 billion of the world’s population. Laboure said that the group of central bankers should have met this month to discuss digital currencies. However, the status of the meeting is unclear at the moment. Nevertheless, central banks have to deliver cash to companies and households at a massive rate during the worst economic crisis in many decades. Blockchain-powered digital currencies can help them streamline many processes. CBDC’s Will Help Central Banks Inject Cash to Households According to Laboure, CBDCs will help central banks improve their quantitative easing programmes, as they will be able to pump cash directly to companies and households. While we already have digital money in our banks and on credit cards, CBDCs will be different in that they will reside on permissioned blockchains. Individuals and companies will probably have digital wallets. Do you think CBDCs will give central bankers more power? Share your thoughts below! Images via Shutterstock
Bitcoin has tumbled below $7,000 on Friday, which has surprised many investors. If the current support level at $6,900 doesn’t hold, the chances are that the bearish mood will extend. Bitcoin Slips on Good Friday Most of the traditional markets are closed today in observance of Good Friday, but crypto exchanges don’t experience a significant drop in trading volumes. This suggests that the bearish move is genuine and might continue if bulls don’t hold at $6,900. On April 7, Bitcoin formed a double top, which is often a bearish pattern in technical analysis. Bitcoinist anticipated that the largest cryptocurrency might face a painful correction if it doesn’t break above the double top’s peak. It didn’t happen – Bitcoin had moved sideways within a range between $7,100 and $7,430 until finally giving up. It seems that the correction has been triggered by whale traders. Since yesterday, Twitter bot Whale Alert posted an unusually high number of large Bitcoin transactions, most of which moved from crypto exchanges to unknown wallets. Some of the largest moves might have been internal transfers, but most of them were too small to be considered internal reshuffles and too large to be ignored. 5,000 #BTC (36,484,419 USD) transferred from #Bitfinex to unknown wallet Tx: https://t.co/q9SmrKimeO — Whale Alert (@whale_alert) April 9, 2020 1,500 #BTC (10,892,932 USD) transferred from #OKEx to unknown wallet Tx: https://t.co/wPstDXwEX2 — Whale Alert (@whale_alert) April 9, 2020 3,746 #BTC (27,380,655 USD) transferred from #Bitmex to unknown wallet Tx: https://t.co/wZNuvEYsaq — Whale Alert (@whale_alert) April 9, 2020 What’s even more worrying is that some of these large transfers came less than two hours ago after the largest bearish candle. This suggests that the downtrend might get worse as the liquidations continue. 900 #BTC (6,270,023 USD) transferred from #OKEx to unknown wallet Tx: https://t.co/cVrAZb7Co8 — Whale Alert (@whale_alert) April 10, 2020 1,130 #BTC (7,880,735 USD) transferred from #RenrenBit to unknown wallet Tx: https://t.co/p2Dw3wsNOx — Whale Alert (@whale_alert) April 10, 2020 Bulls Will Come Back Stronger Even if the Bitcoin price will slip to $6,300 or even $6,000, it simply means a discount price for bulls, who will come back much stronger in the medium-term future. Many expected that the Fed’s further stimulus worth $2.1 trillion would push Bitcoin prices, but it seems that the recovery is postponed. The crypto market will also benefit from the halving, though the bold rally is expected after the event. Even in these conditions, Bitcoin might break above $7,500 soon if it manages to hold at the current level. Do you think Bitcoin will sleep to $6,000? Share your thoughts in the comments section! Images via Shutterstock, Twitter:@whale_alert , BTC/USD chart by TradingView
Binance reacted to recent allegations that it had embezzled hundreds of thousands of US dollars in cryptocurrency from a user, referring to recent reports covering the situation as false information. Binance Complied with Korean Law Enforcement’s Request On Wednesday, Bitcoinist reported that Binance was accused of embezzling almost $860,000 in crypto funds from a user based in Ukraine. On Thursday, Binance presented its side of the story. The crypto exchange admitted that the user’s account was blocked, but it explained that the action was taken after an investigation from South Korean law enforcement. According to Binance, on November 8, 2018, a Korean crypto project lost 3,995 ETH after falling victim to a listing fee scam. The project managers reported the incident to the local police. The Korean law enforcement then came across a suspect whose identity could not be confirmed, though he is treated separately from the Binance user at this point. The suspect somehow got unauthorized access to the project’s internal emails and discovered that it was seeking to list its token on several exchanges, including Binance. The suspect then started a social engineering scam, sending emails on behalf of Binance, pledging to list the victim’s token in exchange for a fee. The victim sent the suspect about 10 billion Korean Won in Ethereum, which is the equivalent of over $8.2 million. The South Korean police found that a Binance user had received “a majority of the stolen funds.” The crypto exchange refers to the user with the initials B.K. On January 18, 2019, the Korean police requested Binance to transfer the scammed crypto funds from B.K.’s account to the victim, which the company did. Moreover, the exchange informed B.K. about the Korean law enforcement’s request and advised to get in touch with his local law enforcement agency. Ukrainian Law Enforcement Gets Involved In April last year, a Ukrainian law enforcement agency reached Binance on behalf of the user. The company explained the incident and was told that no further assistance was needed, suggesting that the agency was satisfied with the explanation. The statement came with screenshots of the exchange’s communication with the Korean law enforcement. Binance stressed that it was working closely with law enforcement agencies worldwide and was ready to provide further documentation “to fight fraud and bring justice to these cases.” In the end, Binance warned that it would take legal action against those who “deliberately tarnishes its reputation through misrepresentation or misinformation.” What do you think about the incident? Share your thoughts in the comments section! Images via Shutterstock, Binance
Cryptocurrency is successfully used as means of payment more often than generally believed. A study carried out by Visual Objects found out that crypto owners use Bitcoin and other crytpocurrencies to buy food and clothing, though one-third of respondents believe that it’s mostly used to buy stocks and illegal items. Contrary to Popular Belief, Crypto Owners Mostly Buy Foods and Clothes The high volatility of Bitcoin and its brethren is an obstacle for those who want to promote the cryptocurrency as a reliable means of payment, but a recent study discovered that crypto owners don’t mind to buy stuff with it, and most of it is about legal and mundane purchases. Visual Objects surveyed 983 people familiar with cryptocurrency and 157 cryptocurrency owners. The first group was asked what they believed crypto owners prefer to buy. 40% of them said that cryptos are mainly used to buy stocks, while 30% mentioned illegal items. Very few suggested that crypto owners buy clothing (15%) and food (14%). In reality, the picture is quite different, at least from the perspective of cryptocurrency owners themselves. They said that they use their crypto wallets to buy food (38%), clothing (34%), stocks (29%), and gold (21%). 15% admitted that they purchased weapons and 11% bought drugs with crypto. Sourse: Visual Objects The survey suggested that cryptocurrency is used for day-to-day purchases more often that the general public believes. 72% of the crypto owners said that they use to buy items with their digital wallets. Bitcoin is the most popular cryptocurrency among group of owners, with 70% of the respondents holding it. Ethereum (27%), Litecoin (20%), and Dogecoin (15%) come next. Cryptocurrency Community Paying More Attention to Utility People will learn to use cryptocurrencies to buy goods, especially when the fiat money will become less reliable due to the inflationary pressure. At the beginning of the year, Bitcoinist reported that 36% of American SMEs accept crypto payments, according to a survey commissioned by American insurer Hartford Steam Boiler (HSB). Last month, Coinbase announced that its card could be used to make purchases on Google Pay. Do you think that the Bitcoin price will stabilize some day and will be used for payments? Share your expectations in the comments section! Images via Shutterstock, Visual Objects
Coinbase CEO Brian Armstrong made the list of 15 youngest billionaires based in the US. Recently, Forbes released its famous World’s Billionaires List, while Business Insider compiled the youngest Americans from it. Coinbase CEO Is Worth $1 Billion Brian Armstrong is the oldest among the 15 youngest billionaires listed by Business Insider. Aged 37, his net worth is estimated at $1 billion, which puts him on the 1990th position in the Forbes list. Armstrong co-founded Coinbase together with Fred Ehrsam, who has previously been listed both in Forbes 30 Under 30 and TIME Magazine’s 30 Under 30 people who are changing the world. Coinbase is the largest cryptocurrency exchange in the US right now. It also operates Coinbase Pro, formerly known as GDAX. The company was valued at $8 billion in 2018 when it raised $300 million from venture capital giants like Tiger Global Management, Andreessen Horowitz, and Polychain. Armstrong’s net worth accounts for only 1% of the $100 billion owned by America’s 15 youngest billionaires. The richest one in the list is Facebook CEO Mark Zuckerberg, who is 35-years-old. His net worth is estimated at $54.7 billion. We may count Zuckerberg in a crypto-oriented billionaires list since he terrified central bankers and governments with the Libra project. Interestingly, Michael Novogratz and Winklevoss brothers didn’t make the Forbes list, which includes over 2,000 billionaires. Ripple co-founder Chris Larsen reached the 804th position with $2.6 billion. Larsen was Ripple CEO until December 2016, and now he’s executive chairman. Billionaires Are $700B Poorer The coronavirus pandemic triggered an economic crisis, putting much pressure on the stock markets. As of March 18, Forbes counted 2,095 billionaires, 58 fewer compared to the same period in 2019, and 226 226 fewer than only about 2 weeks earlier. 51% of the listed billionaires are poorer than they were in 2019. Their combined net worth is $8 trillion, down $700 billion from last year. Do you think we’ll see more crypto billionaires in the coming years? Share your expectations in the comments section! Image via Observer
Crypto exchange Binance was accused of freezing an account worth around $1 million. The owner accuses the platform of embezzlement, but the company says it simply followed the requirements of the South Korean police. Binance Blocks Account Worth Almost $1M In November 2018, Binanace blocked an account that had over $850,000 worth of crypto funds. The owner claims that the exchange led by Changpeng Zhao (CZ) stole the money, Russia-based crypto news site Forklog reports, citing HackControl. The account owner claims that Binance froze crypto funds worth $$858,999 at the time. Specifically, Binance blocked: 4.5609 BTC (worth $28,610 at the time and $33,416 as of today); 1,600.215 ETH ($342,446 at the time and $271,159 as of today); 4,290.39 ETC ($40,244 at the time and $24,582 at the moment of blocking by Binance); 726 LTC ($73,763 at the time and $55,000 as of today); 169,646 IOTA ($98,395 at the time and $28,619 as of today); 33,895.14 EOS ($187,780 at the time, $92,194 at the moment); 810 807 TRON ($16,216 at the time and $11,002 as of today); 365 ZEC ($29,557 at the time, $8446 as of today); 128 XMR ($14,336 at the time); 6 DASH ($26,000 at the time); 765 BCH ($482 at the time); 1170 USDT. What Happened? Binance required additional KYC/AML verification procedures and an explanation regarding the origins of the funds. The exchange said that the account was blocked at the request of the South Korean police, though the user claims that he had not received any complaints from South Korean authorities. It all started with an Ethereum transaction. Binance turned its attention to 2,844.881 ETH transferred to the trading account. While the owner claims that he had explained the origins of the funds, Binance insisted on suspension, citing a request from the South Korean police. Binance spokespersons told ForkLog that a portion of ETH transferred by the user had been stolen from a Korean project on November 8, though it didn’t disclose its name. Binance said that it eventually transferred the amount to the South Korean police. In April last year, Ukrainian law enforcement spoke to Binance, to which the exchange responded with the same explanation. However, the user cannot find any ruling by the South Korean police. The latter denies that they made any claims about the Binance account owner. User’s correspondence with South Korean police. Source: ForkLog.com Also, the police stressed that they hadn’t asked to freeze or transfer any crypto funds, the user says. He added that he sent the correspondence with the South Korean police to Binance, but the exchange is unresponsive. The user concluded: I have every reason to believe that Binance misappropriated my money for itself. Communication with them continues from November 21, 2018. It has been 18 months already. It seems that it’s not the first incident with the exchange. HackControl discovered similar cases whose damages total $3 million. The users will launch a class action lawsuit against CZ’s company. Interestingly, Binance and 10 other crypto firms have been recently accused of selling unregistered securities on the US territory. Do you think Binance’s move was illegal? Share your thoughts in the comments section! Images via Shutterstock, ForkLog
Bitcoin is fast approaching the much-awaited halving event, but its main forks will start first. BCH will reduce its block reward today, while BSV will do this later this week. BCH, BSV Price Hit 1-Month High The Bitcoin community is preparing for one of the most important events that takes place once every three or four years – the halving. After block 630,000, Bitcoin miners’ reward will be reduced from 12.5 to 6.25. The resulted scarcity is expected to push prices to new highs. Bitcoin’s main forks, BCH and BSV will start earlier. Bitcoin Cash will slash the reward later today. At the time of writing, 629,933 have been mined so far. The price of BCH is already surging, gaining 7.70% during the last 24 hours, to $274, as per Coinmarketcap data. The BCH/BTC ratio is also increasing, hitting the highest level since March 7. While the halving event will likely impact the supply/demand ratio in Roger Ver’s cryptocurrency, about a third of BCH coins haven’t been moved since the fork, which makes it scarcer than thought, at least for now. What about Bitcoin Cash? Circulating supply is generally reported as 18.4M, but is it really 12.4M? Since 6M $BCH has never moved since the fork, should they be considered as circulating supply? pic.twitter.com/Udo9ODhIVP — CoinMetrics.io (@coinmetrics) April 6, 2020 Elsewhere, Craig Wright’s BSV will experience its halving event tomorrow or on Thursday. However, the coin is performing even better than BCH for now, as it jumped 13% in the last 24 hours, making it the second-best performer among top 100 coins. BSV is now trading at $213. The halving of BCH and BSV is happening earlier than in BTC because BCH had a different blockchain algorithm at one point, which eased the difficulty of mining. BSV forked from BCH in November 2018. Some analysts expect the halving to be a disaster for BCH, suggesting that many will move Bitcoin. Will Bitcoin See Similar Price Surge in May? It’s interesting to observe the price rally in BCH and BSV. It is very likely that Bitcoin will experience the same. The media attention and the general fuss about it will probably support a rally, even though some investors claim that the halving has been already priced in. But Bitcoin might turn bullish even before halving, as BCH and BSV miners will move to BTC for a while given that the two are less profitable now. Besides, Bitcoin will benefit from its safe-haven status amid the market turmoil and the Fed’s cash injections. Bitcoin halving is expected to happen on May 13. Currently, the cryptocurrency is trading below $7,350, gaining 0.60% during the last 24 hours. Do you think Bitcoin will surge next month? Share your expectations in the comments section! Images via Shutterstock, Investing.com, Twitter:@coinmetrics
Billionaire Michael Novogratz said that the recent rebound in stocks might lead to another decline soon. Instead, he is confident in Bitcoin and gold. Bitcoin Will Be Among Ideal Safe-Havens Novogratz, CEO of crypto merchant bank Galaxy Digital, told CNBC’s “Squawk on the Street” that investors shouldn’t be misled by the recent spike in stock prices. Instead, buying non-stock assets, including cryptocurrency and gold, would be the right approach. The US stock indexes have been bullish amid cautious optimism around the coronavirus pandemic. However, Novogratz doesn’t buy it. I think this is short covering. I think one or two more days and people will sell into it, the billionaire said. He stressed that he was still bullish on Bitcoin, even though the largest cryptocurrency experienced one of its worst crashes last month. The price has recovered a big chunk of its losses since then however, and is currently trading above $7,300. Novogratz added: I have a big bitcoin position. I continue to add to it partly because I think this is an amazing environment for both being long gold and long Bitcoin. He suggested that the fiat supply is growing on steroids, as the Fed is pumping trillions to save the US economy. Money is growing on trees right now. And I learned when I was a little kid that money really doesn’t grow on trees. And when you have a global, money printing orgy going on… at one point that comes home to roost, and so I think hard assets are going to be a big buy, Novogratz concluded. Should You Listen to Novogratz? Galaxy Digital boss has always been bullish on Bitcoin, so there is nothing unusual about his latest comments. The interesting thing about Novogratz is that he has big connections on Wall Street, and his voice might reflect the mood of some of his fellows from the financial elite. For example, the billionaire is a member of Kappa Beta Phi, a very secretive Wall Street organization that has been around for about a century. The society, whose recruits are dressed in drag and ridiculed by veterans, includes top executives and officials like former New York City mayor Michael Bloomberg and BlackRock CEO Laurence Fink. Interestingly, BlackRock was hired by the Fed to buy corporate bonds and other assets on behalf of the US Treasury. Do you think Bitcoin will update the ATH by the end of this year? Share your thoughts in the comments section! Image via Shutterstock
BitMEX parent company HDR Global Trading Limited has become a partner of nonprofit Shadowserver Foundation. HDR will sponsor the nonprofit by offering $400,000 over the next four years. BitMEX Operator Becomes Member of Shadowserver Industry Alliance Shadowserver Foundation is an organization that collects and analyzes data on malicious activity on the Internet. HDR has become a member of the nonprofit’s industry alliance aimed at improving the Internet security. Shadowserver was established in 2004 and has been supported exclusively by charitable donations and sponsorships. The organization brands itself as one of the leading Internet security reporting resources. It conducts investigations on malicious activity and offers free public services for the Internet community, supporting Internet service providers (ISPs) to identify and remove malware infections. The reports and services provided by Shadowserver are used by 107 national computer emergency response teams (CERTs) in 136 countries, over 4,600 vetted network owners, and over 90% of the Internet (by IPv4 space and ASN). BitMEX co-founder and CTO Samuel Reed commented: Shadowserver is an extremely highly regarded player in the botnet defence community. They work tirelessly and make a tangible difference to ensure the Internet is more secure for all users. Cross-industry collaboration is going to be essential to the future security of the Internet at large, and not least the cryptocurrency industry. We’re keen to play our part championing security over the long term by supporting such a brilliant organisation. HDR’s Help Comes at the Right Time BitMEX’s parent decided to sponsor Shadowserver when it needed it the most. At the end of February, the nonprofit’s largest US sponsor, Cisco Systems, told the organization that it could no longer support it. As a result, the Internet security organization has called for help. Besides, it is planning to establish the Shadowserver Industry Alliance, which will be announced soon. HDR is already a member, but the alliance will include other founding anchor members too. The foundation released several posts on its official website, calling for financial support. On the article reads: The Shadowserver Foundation urgently needs your financial support, to help quickly move our data center to a new location and continue being able to operate our public benefit services. While it is not clear whether HDR’s funds will be used for transferring the data center, BitMex parent’s funds will contribute to Shadowserver survival. What do you think about BitMex parent’s move? Share your thoughts in the comments section! Images via Shutterstock, Shadowserver.org
A new report from PricewaterhouseCoopers (PwC) showed that crypto-related fundraising and mergers and acquisitions (M&As) tumbled last year, but that doesn’t mean the crypto market is extinguishing. Long Awaited Institutional Investors Don’t Come In It seems that the crypto industry cannot attract investments from institutional investors, as many had hoped. Professional services giant PwC said that the number and value of crypto fundraising and M&As showed a steep decline last year. The value of crypto-related M&As sank 76% to $451 million in 2019, from over $1.9 billion in the previous year. The amount of funds raised fell 40% to $2.24 billion. The cryptocurrency space couldn’t attract mainstream investment even though Bitcoin surged in the second and third quarters of 2019. It peaked at over $13,500 in July. The cryptocurrency community has hoped for rapid adoption Bitcoin and the crypto market in general once institutional investors came in. Crypto Outlook is Gloomy as Well Given the current COVID pandemic, the report authors argue that the cryptocurrency market will not attract mainstream investment any time soon. The high volatility caused by the coronavirus panic and the economic collapse do not bode well for the emerging space. Henri Arslanian, PwC’s head of global crypto, was cited by Bloomber as saying: The crypto industry is not immune to the global headwinds and the number and value of crypto fund-raising and M&A deals may be impacted in 2020. Cryptocurrency-oriented firms’ main source of funding come from traditional and crypto-oriented venture capital (VC) funds, family offices, and incubators. The authors predict that more investors from Asia and the Middle East would drive the market this year. The report reads: We expect to see more APAC and EMEA based family offices looking at the market turbulence as a good time to invest in promising crypto companies. Is It Really that Bad? Bloomberg’s rhetoric that the crypto space is becoming less relevant because institutional investors don’t rush into the market is a bit misleading. To begin with, Bitcoin was not designed for Wall Street investors in the first place. Secondly, now that the Fed is unleashing its money printing potential at a full scale, the best thing one can do to protect against the imminent economic crisis and devaluing fiat money is to buy genuine safe-haven assets like Bitcoin. Do you think that the lack of funding from institutional investors is a big problem for the cryptocurrency market? Share your thoughts in the comments section! Image via Shutterstock
The COVID-19 pandemic will bring the end of cash and speed up the adoption of digital banking services, including central bank crypto, according to Edwin Bautista, CEO of UnionBank. Going Digital Is the Right Approach Amid Pandemic In an interview with Euromoney, the head of UnionBank, the Philippines’ ninth-largest bank, said that this might be the beginning of the end of hard cash, at least for the Philippines, a country whose lockdown measures are challenging for the people living in over 2,000 islands. This is also difficult for the country’s central bank, which has to improve its ability to deliver banknotes to banks and ATMs dispersed across the islands. The most reasonable option is to bet on the digitization of the financial system to the point where people can use digital money for the day to day needs. Bautista anticipates that ultimately the banks will be forced to test and issue digital cash and maybe even crypto. He said: “One key realization here is that the longer the disruption, the more tenuous the traditional cash supply chain becomes. Thus I expect that banks will be more open to testing, developing and deploying digital cash and currencies, QR codes and maybe even crypto currencies and digital tokens.” Bautista is proud that UnionBank is already among the most digitally advanced bank in the region. The bank launched several offsite command-and-control systems for its digital system and asked all non-frontline employees to work from home. Thus, 95% of the bank’s branches are currently open even though 75% of the staff is working remotely. Last month, Union opened 7,000 new accounts that are fully digital, while 20,000 clients downloaded its digital app during the month. Last week, the company’s board members held their first fully digital meeting. As for Filipino consumers, many of them turned to online banking given the current conditions. Central Banks Might Speed Up Adoption of Central Bank Crypto There is an increase of cash money even though it’s not clear whether they represent a real risk. In Singapore, the Monetary Authority of Singapore (MAS), which acts as the central bank and the main financial regulator, is encouraging the public to use online and contactless payments like crypto and wash the hands after touching cash. Ultimately, central banks around the world could turn to blockchain-powered currencies or crypto. Earlier this year, Bitcoinist reported that several major central banks formed a group to test central bank crypto assets(CBDCs). Do you think the world will turn cashless and move to crypto soon? Share your expectations in the comments section! Image via Shutterstock