SEC, CFTC, IRS And Others: A Guide To US Regulating Bodies
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A guide to the complex crypto regulation framework in the US: Here’s how SEC, CFTC, FinCen and IRS view BitcoinRead More
[unable to retrieve full-text content]
A guide to the complex crypto regulation framework in the US: Here’s how SEC, CFTC, FinCen and IRS view BitcoinRead More
South African Police are pursuing an alleged major cryptocurrency investment fraud, according to a police statement released yesterday, May 25. According to the statement, over 28,000 investors are said to have suffered losses exceeding 1 bln rand ($80.4 mln).
The Hawks, an investigative unit of South Africa’s Directorate for Priority Crime Investigation (DPCI), have outlined the case, which they say involves “BitCaw Trading Company, commonly known as BTC Global”:
“[Targeted members of the public are believed to have been] encouraged by BTC Global agents to invest with promises of 2% interest per day, 14% per week and ultimately 50% per month. Payments were allegedly made every Monday. Some of the investors got paid in terms of the agreement. However, the payments suddenly stopped.”
Based on these unrealistic promises, a 4% referral program, and other warning signs, marketing agency SEO Spark last year contended that BTC Global was a fraudulent Ponzi-scheme, predicting investor losses.
BitCaw Trading has denied the company has had any involvement with BTC Global, telling Bloomberg that “BitCaw Trading […] do[es] not manage third-party money or offer any kind of investment […] We are shocked to see our name connected with [the alleged scam].”
According to BTC Global’s website, the blame for the abruptly terminated payments lies with an elusive former admin member, who the company claims it “cannot locate,” continuing:
“We are as shocked and angry as everyone. But we all knew the risks involved in placing funds with Steven. We all became complacent with Steven. And all of us funded him independently. Until Steven Twain resurfaces or is found there is nothing the admin team can do...”
The Hawks’ Lieutenant general Yolisa Matakata is calling on any further affected investors to come forward. “This may prove to be the tip of the iceberg with potentially thousands more yet to discover they’ve lost money,” he said in the statement.
Yesterday, May 25, Cointelegraph reported that South Africa’s central bank has chosen to call cryptocurrencies “cyber-tokens” because they “don’t meet the requirements of money.”
The U.S. government has moved to more actively educate investors against crypto-related fraud, specifically involving Initial Coin Offerings (ICOs). The U.S. Securities and Exchange Commission (SEC) recently launched a website for a fake ICO that was constructed to imitate classic “red flags” of fraudulent token sales.
First Deputy Governor of the Russian Central Bank Olga Skorobogatova has said that blockchain technology is not yet “mature” enough for industrial-scale use, local media outlet Prime reports today, May 26.
During a discussion at the St. Petersburg International Economic Forum, Skorobogatova suggested that the emerging technology still requires improvements. According to her, the technology has not yet been applied on an industrial scale, except for its use for cryptocurrencies, such as Bitcoin. The Deputy Governor focused on security and scalability as key issues that still need to be resolved before industrial scale implementation can take off.
Skorobogatova divided blockchain applications into two major use cases. Firstly, blockchain systems that offer a distributed settlement infrastructure, such as Corda and Ripple, that can be used for banks’ payment processing. Secondly, blockchain platforms that provide smart contract functionality such as Ethereum and Hyperledger.
"Technology for the sake of technology is pointless,” Skorobogatova said, adding that 2018 would be the year that Russia and the international community would come to “a pragmatic understanding” of the purposes for which blockchain is beneficial, after which they would transition to tackle industrial scale realization.
Skorobogatova has previously spoken of blockchain as “a revolutionary technology [that] certainly needs to be invested in,” while highlighting that understanding the associated risks and how to manage them was essential for the mainstream financial sector. Fully-controlled integration would require “seven to ten years,” according to her estimation in June of last year.
Just this week, news was released that the country’s first officially regulated ICO would be tested using the Russian central bank’s newly-established regulatory sandbox, with major state-owned Sberbank acting as the project’s anchor investor.
Also this week, the Russian parliament approved the first of three readings of new laws regulating the crypto and blockchain industries, which define both cryptocurrencies and crypto tokens as property.
UK authorities have opened 24 investigations into cryptocurrency businesses over financial regulatory compliance, local media outlet CityWire reported May 25.
Responding to a freedom of information request, regulator the UK’s Financial Conduct Authority (FCA) also confirmed it had opened seven whistleblower reports since the start of the year.
While the FCA did not mention which specific businesses were on its radar, a response to CityWire stated that the investigations were being made in order to “determine whether they might be carrying on regulated activities that require FCA authorisation.”
Addressing possible consequences of its own investigation, the FCA meanwhile appeared to hint it would take action according to the seriousness of any offending business, without mentioning which parameters it would use to judge activities.
According to the FCA’s response, the investigations’ priority is consumer protection:
“If we conclude that they are, then we may investigate and take action, identifying and determining the most serious matters which pose the greatest risk to consumers.”
The FCA’s investigations join regulatory steps currently underway in other major jurisdictions regarding crypto business compliance.
Earlier this week, a joint U.S.-Canada investigation dubbed ‘Operation Cryptosweep’ was opened, targeting potentially fraudulent industry investment programs. Investigators have so far unearthed around 35, a press release from the North American Securities Administrators Association (NASAA) announced.
Across the globe in Singapore, the central bank issued warnings May 24 to eight local crypto exchanges that could potentially be breaking securities laws. The Monetary Authority of Singapore (MAS) also confirmed it had sent a demand to one ICO token issuer to halt its activities.
The Governor of the Bank of England Mark Carney said at the Riksbank Anniversary conference that he was open-minded about the prospect of a central bank digital currency (CBDC), Bloomberg reports May 25. Riksbank is the central bank of Sweden.
While he reportedly is not opposed to the idea of implementing a CBDC, Carney stressed that any such adoption of a digital currency would not happen soon. The UK central bank governor stated that cryptocurrencies do not currently constitute money.
In February of this year, Carney sharply criticized cryptocurrency at an event at London’s Regent’s University, saying that, “It [cryptocurrency] has pretty much failed thus far on... the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange."
Earlier this month, the Bank of England issued a working paper, laying out various scenarios of possible financial risks and instability issues of using a CBDC. The report found that in the scenarios described, there was no reason to believe that adopting a CBDC would negatively impact private credit or total liquidity provision to the economy.
At the 350th anniversary of Riksbank on May 25, Carney stressed that the “past, present, and future” of central banks have and do depend on maintaining public trust in the financial system. He added that, since Brexit, the Bank of England has overhauled their financial system which would make it more resilient to shocks such as those following the brinkmanship of events like Brexit.
Other central banks in Europe have also considered adopting a CBDC. Earlier this month, Norwegian central bank Norges Bank issued a working paper in which they consider developing a CBDC as a supplement to cash to “ensure confidence in money and the monetary system.” The aforementioned Riksbank is also considering an e-krona as the use of banknotes and coins declines in Sweden.
De Beers Group has announced that the world’s largest diamond jewelry retailer has joined their diamond supply blockchain platform Tracr, according to a press release published May 24. Signet Jewelers joined the project, which aims to bring transparency to the industry, in addition to boosting consumer confidence.
Signet will join the Tracr platform in its pilot version, which according to the press release, will enable the platform to complete a “digital link” from diamond production to its retail location. The parties will ensure that the platform corresponds to the needs of manufacturers and retailer, initially focusing on the tracking of diamond jewelry.
Tracr creates a digital certificate for each diamond, which will be registered on the platform and contain key attributes and transactions. This will reportedly let consumers verify that diamonds they purchase are natural and conflict-free. Bruce Cleaver, CEO at De Beers Group, commented on the partnership:
“...Tracr is focused on bringing the benefits of blockchain technology to the full diamond value chain - providing consumers with confidence, the trade with increased efficiency and lower costs, and lenders to the industry with greater visibility.”
Signet Jewelers is headquartered in Ohio and operates in Canadian, American, and British markets, where it holds the number one position among diamond retailers. In 2017 it made over $3.8 bln in diamond jewelry sales. According to their 2018 annual report, Signet Jewelers has a market share of 7 percent of the US jewelry market.
Earlier this month, Cointelegraph reported that De Beers tracked 100 high-value diamonds from the mine to the retailer by means of blockchain technology. This was reportedly the “first time a diamond’s journey has been digitally tracked from mine to retail.” De Beers said that the Tracr platform is expected to launch later this year and will be open to the entire diamond industry.
Yesterday, two leading diamond industry players, KGK Diamonds and Alrosa, agreed to work with blockchain startup D1 Mint Limited to tokenize diamonds. It is believed that the innovation of blockchain can transform the precious gem industry by making natural diamonds into an investment asset class with wider appeal across “various investor groups, driv[ing] higher demand.”
The Shenzhen Municipal Office of the State Administration of Taxation has partnered with technology firm Tencent, according to an official announcement May 25. The partnership aims to establish an “Intelligent Tax” Innovation Laboratory focused on tax management modernization and fighting tax fraud with blockchain technology.
On May 24th, the Chinese regulator and Tencent signed an agreement on establishing an “Intelligent Tax” Innovation Laboratory. The newfound organization will reportedly employ cloud computing, artificial intelligence, blockchain, and big data to improve taxation management and find a technological solution to fraudulent fapiao, according to China Money Network.
A fapiao is an official invoice issued by the Chinese Tax Bureau for goods and services purchased in the country, which helps the government to track tax payments. However, there is a large underground market in the country for counterfeit or copied fapiao. Buyers use fraudulent receipts to evade taxes or defraud employers, claiming falsified expenditures for which they are reimbursed.
According to China Money Network, vendors for fake fapiao can be found easily in crowded urban areas, such as subway exits, and outdoor marketplaces.
The digital invoice solution based on the Tencent blockchain will reportedly be the first product of the laboratory, as well as the nation’s first blockchain-based research on the application of invoices. Li Wei, deputy director of the Shenzhen Municipal Bureau of State Taxation, said:
“The digital invoice based on blockchain technology has features such as complete traceability of the whole process and non-disruptive information, which consistent with invoice logic, can effectively avoid false invoices, and improve the invoice supervision process.”
Since 2015, Tencent has used its technology to aid local tax bureaus in China. Shenzhen residents can use the vastly popular app WeChat to declare and pay taxes, as well as to get fapiao.
Earlier this week, China’s Ministry of Industry and Information Technology published a Blockchain Industry White Paper, revealing that the domestic blockchain industry saw “exponential” growth in 2017. The report states that “blockchain technology has risen to the level of a national science and technology strategy,” noting that China’s policy and regulatory framework for blockchain has “gradually improved”.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The market data is provided by the HitBTC exchange.
Larger players always have an unfair advantage over the retail traders as they have the money and the resources to manipulate prices. Many crypto investors have been complaining against the manipulation in the markets, which hurts small investors.
If the U.S. Department of Justice (DoJ) can identify and nail the culprits, it will immensely benefit the cryptocurrencies in the long-term. Many other traders also agree that these crackdowns will have positive influence on the markets.
A study by Weiss Ratings showcases that if the US Federal Reserve dilutes the “Volcker Rule” - which restricts the banks from indulging in risky assets to earn profits - Americans are likely to turn to cryptocurrencies.
Considering the flow of positive news in cryptos, we have been bullish for a while but are waiting for the opportune time to buy. Due to the highly volatile nature of digital currencies, we want to identify our risk before buying.
Let’s see if we get some low-risk buy setups today?
Bitcoin is sliding towards its lower target objective of $7,000. The attempt by the bulls to pull back on May 24 could not find buyers at higher levels, and prices have turned down once again. Currently, the digital currency is trying to hold the trendline support. If successful, a relief rally to $9,000 is probable.
If the trendline breaks, the next major support zone is between $6,075.04-$7,000, which will be strongly defended by the bulls. Due to the strong support just beneath the trendline, we are disregarding the formation of a symmetrical triangle.
Any sharp decline below $7,000 can offer the traders a good buying opportunity for the long-term. If purchased, the position should be protected with a stop below the February 06 lows of $6,075.04 because if this level breaks, we may see some panic selling.
Traders should avoid buying when the BTC/USD pair is plummeting. The purchase should be made when it shows signs of stabilizing in the 4-hourly chart.
We are suggesting a buy because we believe that the virtual currency will remain range bound between $6,075.04-$12,12172.43.
Ethereum fell to the 61.8 percent Fibonacci retracement levels of the recent rally on May 24. The bulls attempted a rebound from this level, but it fizzled out at the 50-day SMA. If the bears break below the intraday low of May 24, a decline to $464 will be on the cards.
If the bulls hold the supports, the ETH/USD pair can rally to the neckline of the head and shoulders pattern, which also coincides with the resistance line of the descending channel.
Aggressive traders can attempt this trade, but the risk-averse traders should wait until a new buy setup forms.
Ripple is taking support at the bottom of the range at $0.56. On May 24, it attempted to bounce off the supports but met with selling pressure at higher levels.
Currently, the XRP/USD pair is again retracing the previous day’s pullback. If the $0.56 level breaks down, a fall to $0.45 is likely.
If the support holds, aggressive traders can take a long position above $0.65 with a stop just below the recent lows. This is a very risky trade because the moving averages will offer a stiff resistance on any rally. Hence, the trade should be attempted only with about 30 percent of the usual position size.
A fall to the bottom of the range should be purchased when it shows signs of a rebound, hence, we believe that this trade can be attempted if the buy levels are reached.
Bitcoin Cash has completed a breakdown from a head and shoulders pattern that has a lower pattern target of $650. However, for the past two days, the bulls are trying to provide support at the $1,000 levels. If this level holds, the digital currency can pull back to the $1,200 levels, which is a major hurdle as both the moving averages are located close to this level.
If the BCH/USD pair breaks below $950, it should slide to $750, which is the next minor support. We suggest waiting for the decline to end and a new setup to form before initiating any long positions.
EOS is trying to rebound from the $10 levels but is facing stiff resistance at the top trendline of the descending channel and the 50-day SMA.
If the bulls succeed in breaking out of these overhead resistances, long positions can be initiated. Traders can wait for the price to scale above the moving averages and the recent swing high of $14.19 on May 20. Positions can be initiated above $14.25 with a suitable stop loss. The target objective of this trade is a rally to $18.67.
On the other hand, if the bears force a breakdown below $10, the EOS/USD pair can sink to $7.8 and below that to $5.961.
Long positions should not be attempted inside the channel.
Litecoin has formed a bearish descending triangle pattern, which will complete on a breakdown and close (UTC) below $107. This level has not been breached since December 09 of last year. Therefore, we consider this to be strong support.
On May 24, the bulls tried to pull back from the immediate support of $115 but could not break above the overhead resistance of $127.
Below $115 the LTC/USD pair will slip to $107. The first sign of strength will be when prices sustain above $127. Until then, it is best to take no action.
Cardano is looking weak because the pullback attempt from the $0.19 support level on May 24 did not sustain the higher levels. If this support level breaks, a fall to $0.13 is likely.
If the price slides to $0.13 and holds, it will confirm the formation of a large range, which can be traded by buying on a rebound from the lows and selling close to the upper end of the range.
A break above the descending channel will be the first sign of a probable change in trend. Currently, the ADA/USD pair is falling. We shall wait for prices to stabilize and turn around before proposing any buys.
For the past few days, we have been watching a probable head and shoulders top in Stellar. However, after the previous two days of price action and realigning the trendlines, we find a falling wedge pattern developing. This is a bullish setup that will complete on a break out of the upper resistance line. As traders, we should be quick to identify any new setup and change our opinion according to the charts.
Considering the overall negativity, we suggest waiting for the price to break out and close (UTC) above the 20-day EMA before buying. The minimum price target is $0.44, which is close to the overhead resistance of $0.47766719. Traders should keep a close stop loss, preferably below the recent lows because if the break out fails to find buyers at higher levels, the digital currency can slump to $0.184 levels.
If the XLM/USD pair moves contrary to our expectation and breaks down, instead of breaking out, traders should not initiate long positions. They should remain on the sidelines until a new buy setup forms.
The bulls are trying to hold the 50-day SMA on TRON while the bears are defending the 20-day EMA. The price has been stuck between these two moving averages for the past two days.
We believe that the zone between $0.0565 and the 50-day SMA will act as strong support. However, we want to see buying emerge at the critical support levels before recommending a long position because if the support zone breaks, the TRX/USD pair can plunge to $0.04 levels.
On the upside, the small downtrend line may act as a resistance. The digital currency might remain range-bound for a few more days before making a decisive move.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.
A Czech gas and energy company Pražská plynárenská is planning to crowdfund energy projects in and around Prague with cryptocurrency, local news outlet Hospodářské noviny reported May 25.
The gas company is looking to establish a new investment platform in the field of green and gas projects in the country, allowing interested parties to contribute both in Czech koruna and digital currency. In addition to making crowdfunding in crypto available, the company will also accept digital currencies as a form of payment for their services.
Pavel Janeček, chairman of the board at Pražská plynárenská, said the company’s initiative is a means to attract a younger generation of customers, saying:
“We are trying to go to the young customers across the street, we do not want to be perceived as old dysfunctional moths.”
According to Janeček, the company will have an operational payment gateway as soon as June. Digital currencies which are used for payment will be automatically converted into fiat currency. Janeček said, “...we will not speculate on the development of crypto. But if someone wants to pay [with] an alternative, we want to make it possible."
With over 42,000 consumers, Pražská plynárenská is reportedly the only Czech company in the industry to accept cryptocurrency for the services it provides.
The announcement comes shortly after the company reported record profits. Helped in part by the hard winter, net profit rose by 30 mln koruna to 1.19 bln koruna ($53.9 mln), while sales totalled nearly 12 bln koruna ($544 mln). The company forecasts higher turnovers and more customers this year, but expects overall profitability to be lower.
In August last year, the Czech National Bank claimed that cryptocurrencies like Bitcoin do not pose a threat to the conventional banking system. A statement posted by the bank entitled “Don’t be afraid of Bitcoin,” argues that fiat currencies are still more suitable for commerce.
The mining pool of HDAC, a Korean blockchain-based IoT platform and issuer of the Hyundai-DAC token (DAC), has been hacked. This forced the company to temporarily halt withdrawals, TokenPost reported Thursday, May 24.
HDAC’s founder Chung Dae-sun is the nephew of the CEOs of Hyundai Group and Hyundai Motors, the globally renowned car manufacturer. HDAC’s ICO was launched in 2017 by a conglomerate that includes Dae-sun’s software and construction firm Hyundai BS&C and its fintech and blockchain subsidiary HyundaiPay.
According to TokenPost, HDAC’s mining pool server was breached by attackers who gained access to the pool’s internal system. In the wake of the hack, HyundaiPay told TokenPost that:
“The HyundaiPay team does not intervene in the operations of the [DAC token] mining pool. HyundaiPay’s servers and the HDAC blockchain itself are not impacted by the breach… not all of the [299 mining pool] participants have been affected. While HyundaiPay cannot provide exact details in regards to the reach of the hack, the team estimates that the vast majority of miners have been affected.”
Although HyundaiPay states that it is not involved in the DAC token mining pool, according to TokenPost it is one of the official developers of the HDAC platform, which aims to use its blockchain-based IoT technology to improve security for smart factories and homes, among other IoT-related applications.
The HDAC team suggested in a recent interview that the Hyundai-DAC token “could be used to pay for a car rental, toll roads, car parking fees, and gas.” They explained that the platform’s “family ties” to the internationally renowned Hyundai Motors are helping initial growth, as well as influencing the project.
Porsche came out in February of this year as “the first” car manufacturer to test blockchain systems for use by drivers, as well as for driverless cars. Earlier this month, Cointelegraph reported on the launch of the Mobility Open Blockchain Initiative (MOBI), which involves thirty participants, including BMW, GM, Ford, Renault, Hyperledger, IBM and IOTA.
Ford has also filed a blockchain patent this year aiming to influence driver behavior by using the exchange of crypto tokens to facilitate traffic flow between cars.