Wendy McElroy: Free-Market Law Enforcement for Crypto

Wendy McElroy: Free-Market Law Enforcement for Crypto

News The Satoshi Revolution: A Revolution of Rising Expectations.Section 4: State Versus SocietyChapter 9, Part 6 Government is a law factory. It passes laws in the same manner that another type of factory extrudes metal molding…But, whereas a factory which extrudes metal molding is providing a product which is useful to the citizens generally, and which certain citizens will purchase voluntarily; the government factory extrudes compulsion which is useful principally to the government, itself, but is purchased [through taxes and other ‘fees’] in advance by the people, who are never in a position to refuse to buy. -Robert LeFevre, The Nature of Man and His Government A key difference between state and society: the latter does not force people to buy products or services they do not want. Society does not require them to use central banks, to purchase law enforcement, or to finance military protection against foreign nations. People can decline that type of product altogether, or they can use a competing private supplier. By contrast, the state compels the purchase of such products on the grounds that they are essential to the social good. Not only that, government claims that monopolies are needed to act as trusted third parties (TTPs). At the core of the conflict between state and society lies antithetical views of TTPs. The state insists on a neutral or benevolent definition; that is, a TTP is an entity that facilitates the quality or honesty of interactions between people who invest it with trust. The description can be accurate. People can use a lawyer, for example, as an intermediary in a business deal. But a TTP is neutral or benevolent only if no one is forced to use or to finance it. Both groups, like the cypherpunks, and individuals, like Satoshi Nakamoto highlighted a bitter irony in what the word “trusted” had come to mean in TTPs. The word was a mockery of itself. A state TTP could not be trusted to act on behalf of those forced to consume its products and services; it always acted in its own interests. The world badly needed alternate systems and approaches for which no trust was necessary because transactions could be verified independently. The blockchain was designed to be a law unto itself,…

FinCEN Director: Agency Receives 1,500 Suspicious Activity Reports on Crypto per Month

FinCEN Director: Agency Receives 1,500 Suspicious Activity Reports on Crypto per Month

Kenneth A. Blanco, director of the U.S. Financial Crimes Enforcement Network (FinCEN), has revealed that the agency has seen a surge in filings of crypto-related Suspicious Activity Reports (SARs). The number of complaints now exceeds 1,500 per month, according to him. Blanco’s remarks were made as part of a speech he delivered at the 2018 Chicago-Kent Block Legal Tech Conference August 9. The director outlined FinCEN’s ongoing role in regulation and law enforcement for the emerging crypto space, which it coordinates in tandem with the Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC). He noted that, “[While] innovation in financial services can be a great thing… we also must be cognizant that financial crime evolves right along with it, or indeed sometimes because of it, creating opportunities for criminals and bad actors, including terrorists and rogue states.” Blanco emphasized that in order to safeguard the “incredible innovations” of the fintech frontier, actors’ compliance with specific regulatory measures is critical, given that “harm can be done with devastatingly increasing speed, breadth, and obscurity in the digital world.” As indicated in FinCEN’s March 2013 guidelines, any acceptance or transfer of value that substitutes for fiat currency – including crypto – is considered to be money transmission, and entails specific regulatory obligations under the U.S. Bank Secrecy Act (BSA). As money transmission businesses (MSBs), crypto exchanges are therefore required to report both SARs and Currency Transaction Reports (CTRs), as well as to comply with anti-money laundering (AML) and countering the financing of terrorism (CFT) frameworks. Blanco clarified that identical obligations pertain to businesses that provide anonymizing services — often dubbed “mixers” or “tumblers” — that seek to conceal the source of the transmission of crypto. Exchanges located outside of the U.S. but that nonetheless do business in part with residents of the country are also monitored by the agency. The director gave the example of FinCENs action in 2017 against Russian crypto exchange BTC-e for flouting AML laws as a case in which SARs had “played a critical role,” with filings by both banks and other crypto exchanges providing crucial leads for law enforcement. He commented that while SARs are increasingly being submitted, the agency has been “surprised” to see businesses taking appropriate…

At Bitcoin Cash Birthday Bash, Crypto Embraces the Strange

At Bitcoin Cash Birthday Bash, Crypto Embraces the Strange

Amid a floorshow of acrobats, cross-dressers and samurai dwarves, gambling pioneer turned cryptocurrency advocate Calvin Ayre boomed, “This is a great moment in the history of money.” It might sound a bit nonsensical, but it was far from fiction at a bitcoin cash birthday party in London last week, where a circus-meets-gypsy-themed party gathered the cryptocurrency’s local enthusiasts in celebration of the one-year anniversary of its first block. As the party proved, the block was a big one – not just in its 8 MB size, but for the crypto history books, so much so that a year later the memory of its birth remains. So, too, however, does the controversy around the project, which while still one of the world’s largest (securing $10.2 billion in value), continues to have an acrimonious relationship with those backing the blockchain from which it split. Today, bitcoin cash boasts 32 MB blocks (compared to bitcoin’s roughly 1 MB blocks), which according to enthusiasts at the #BitcoinRebirth party in London’s West End will make the protocol better for use as an electronic currency. That’s been – rather controversially – the bitcoin cash contingent’s main argument for some time, and as the party proved, they have no plan to give up the fight anytime soon. “The other branch, it’s not bitcoin technology anymore. They don’t want bitcoin to be used as currency anymore; they want it to be used as digital gold,” Ayre told CoinDesk. He continued: “I wish them good luck with it. It’s just unfortunate they stole the bitcoin name when they did it.” Unveiled via a retro “Streetfighter” video during the event, the new bitcoin cash logo attempts to hammer home the message that the bitcoin name should be reclaimed, with a fighter using a samurai sword to cut the “cash” part of the project’s logo to reveal tagline that concludes: “… because bitcoin cash is bitcoin.” The drivers   But that was far from the only strange occurrence of the evening. While the percussion of a traditional Chinese orchestra played in the background, Ayre explained why he believes that bitcoin cash has already been a success. According to him, a lot of bitcoin projects were canned once it became clear that microtransactions were no longer tenable using that blockchain. But now,…

Another US City Imposes a Moratorium on Crypto Mining

Another US City Imposes a Moratorium on Crypto Mining

Mining The city of Salamanca in the U.S. state of New York is reportedly establishing a moratorium on cryptocurrency mining operations in the city. This will stop crypto miners from “using up all the residents’ power and effectively make all of them get a price increase on their utility bills,” a member of the city’s council explained. Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space City Council Voted for a Moratorium The Common Council of the city of Salamanca in New York voted unanimously on Wednesday to approve Local Law No. 2 for 2018 and impose “a moratorium on commercial cryptocurrency mining operations in the city,” the Salamanca Press reported. The news outlet described that according to the local law: A moratorium would temporarily stop applications or proceedings, or the issuance of approvals or permits, for cryptocurrency mining operations in the ‘electric service area’ of the city of Salamanca. The purpose of this moratorium is for the city to have “the opportunity to consider zoning and land use laws and municipal electric department regulations before commercial cryptocurrency mining operations result in [an] irreversible change to the character and direction of the city,” the publication conveyed. A public hearing on the local law will be held on September 12. Buying Time to Set Rules Salamanca council member Timothy Flanigan, who sits on the city’s Board of Public Utilities (BPU), explained that the BPU “does not yet have all the rules and regulations in place to properly deal with cryptocurrency operations.” Citing the sheer amount of energy crypto mining uses, he added that “this moratorium buys the city time to get rules in place without a blow to the electric system.” Emphasizing the need to ensure that residential customers continue to have cheap power, he elaborated: The thing that this [moratorium] will do is devoid people of using up all the residents’ power and effectively make all of them get a price increase on their utility bills because somebody else is using up all the cheap power. A few other cities in the U.S. have introduced similar measures. In March, commissioners of a power district in Washington State’s Chelan County launched “an emergency moratorium on new high-density load hookups to give staff time to develop a plan…

Facebook’s David Marcus Quits Coinbase to Avoid ‘Appearance’ of Conflict of Interest

Facebook’s David Marcus Quits Coinbase to Avoid ‘Appearance’ of Conflict of Interest

Facebook blockchain head David Marcus announced he was quitting his position on the board of U.S. cryptocurrency exchange Coinbase Friday, August 10, in a statement seen by various media outlets. Marcus, who joined the exchange’s board in December 2017 and took on a blockchain research group at Facebook in May, said he now thinks it is “appropriate” to leave. “Because of the new group I’m setting up at Facebook around Blockchain, I’ve decided it was appropriate for me to resign from the Coinbase board. “…I’ve been thoroughly impressed by the talent and execution the team has demonstrated during my tenure, and I wish the team all the success it deserves going forward.” The decision comes as rumors continue to swirl about a potential acquisition of Coinbase by Facebook. Last month, the social media platform allowed the exchange to advertise its services, reversing a ban which took effect in January. Correspondingly, media outlets quoted sources which suggested a perceived “conflict of interest” lay at the heart of Marcus giving up the board slot. According to Facebook spokesperson who spoke to CNBC, the move was “to avoid the appearance of conflict, rather than because of an actual conflict.” “Under David’s leadership Facebook is poised to be one of the leading players in crypto and an active acquirer,” Ryan Gilbert, a partner at Propel Venture Partners and a minor Coinbase investor also told the publication Saturday. “Who knows, one day an acquisition of Coinbase could be in the cards.”

Crypto Trading 101: How to Read an Exchange Order Book

Crypto Trading 101: How to Read an Exchange Order Book

It takes two to tango in the world of crypto trading, where a dynamic relationship between buyers and sellers is always on display in something called an order book. A tool that visualizes a real-time list of outstanding orders for a particular asset, order books represent the interests of buyers and sellers, offering a window into supply and demand. But while all order books serve the same purpose, their appearance can differ slightly among exchanges. That said, they are all built with the same features and functions. Examples from Coinbase Pro, Binance, Bitfinex and Kraken are shown below: To become comfortable reading order books, it is essential to understand four main concepts: bid, ask, amount and price. This information is displayed on two sides of the order book known as the buy-side and sell-side. For the purposes of this explanation, we will be using the BTC/USD order book from one of the world’s largest cryptocurrency exchanges, Bitfinex. Price and Amount Although the two sides display opposing information, the concepts of amount (also referred to as size) and price are relevant to both. Simply put, the amount and price per order display the total units of the cryptocurrency looking to be traded and at what price each unit is valued. In the example below there is an open buy order in the amount of 20.24 at a price of $8218.50. This means the entity who opened this order would like to purchase 20.24 units of bitcoin at a price of $8,218.50 per unit. In the Bitfinex order book, you will also see the terms “count” and “total.” The count refers to how many orders are combined at this price level to create the amount, whereas the total is simply a running total of the combined amounts. The Buy Side The buy side represents all open buy orders above the last traded price. This offer from the buyer is known as the “bid.” It effectively voices the trader’s interest, stating something like, “I am bidding on X units you own at a specific price in the hopes of purchasing them.” Once the bid is matched with an appropriate sell order, the trade can be facilitated. When there is an abundance of buy orders (demand) at a specific price…

Bitcoin in Brief: BTC via SMS Patented, Brave BAT Tips for Tweets and Posts

Bitcoin in Brief: BTC via SMS Patented, Brave BAT Tips for Tweets and Posts

The Daily Financial software developer Intuit has been awarded a patent for processing BTC payments via SMS and we’ve covered the details in today’s edition of Bitcoin in Brief. Also in The Daily, Brave browser plans to enable BAT tips for tweets and Reddit posts, cryptocurrency is projected to constitute 5 percent of the portfolios of US investors next year, and in Thailand, a famous actor has been arrested for an alleged crypto investment fraud. Also read: Ledger Adds Coins, Okex Launches Coinall, Exmo Partners with Mistertango Intuit Awarded Patent for BTC Payments via SMS California-based company Intuit, a financial software developer, has been awarded a patent for processing bitcoin core (BTC) payments via text messages (SMS), according to a filing published by the US Patent and Trademark Office on August 7. The patent that outlines a system to transfer BTC funds by sending text messages on smartphones was filed back in 2014. According to its abstract: The method includes receiving, by a payment service, a payment text message comprising a payment amount and an identifier of a payee mobile device, validating the payment text message based on a payer balance of a virtual payer account maintained by the payment service for the payer […] transferring, in response to creating the virtual payee account, the payment amount from the virtual payer account to the virtual payee account […]. Despite the prolonged consideration of the patent application, Intuit has been continuously developing its crypto-cash payment solutions in the meantime. Earlier, the company announced it had reached a partnership agreement with the payment provider Veem to build a system for processing international cryptocurrency payments. Brave Browser to Enable Tips for Tweets and Posts Brave, the privacy-oriented web browser that supports opt-in ads and crypto payments between users and website publishers like Twitchers and Youtubers, is now planning to expand its service to Twitter and Reddit. The startup intends to introduce support for the two platforms in the fourth quarter of this year, according to an announcement quoted by CNET. To take advantage of the tipping system, which uses Brave’s basic attention token (BAT), users have to enable the payments in the browser. Then, if another Brave user decides that a tweet or a post is worth rewarding,…

Bitcoin in Brief: Crypto Payments via SMS, Coin Tips for Tweets and Posts

Bitcoin in Brief: Crypto Payments via SMS, Coin Tips for Tweets and Posts

The Daily Financial software developer Intuit has been awarded a patent for processing BTC payments via SMS and we’ve covered the details in today’s edition of Bitcoin in Brief. Also in The Daily, Brave browser plans to enable BAT tips for tweets and Reddit posts, cryptocurrency is projected to constitute 5 percent of the portfolios of US investors next year, and in Thailand, a famous actor has been arrested for an alleged crypto investment fraud. Also read: Ledger Adds Coins, Okex Launches Coinall, Exmo Partners with Mistertango Intuit Awarded Patent for BTC Payments via SMS California-based company Intuit, a financial software developer, has been awarded a patent for processing bitcoin core (BTC) payments via text messages (SMS), according to a filing published by the US Patent and Trademark Office on August 7. The patent that outlines a system to transfer BTC funds by sending text messages on smartphones was filed back in 2014. According to its abstract: The method includes receiving, by a payment service, a payment text message comprising a payment amount and an identifier of a payee mobile device, validating the payment text message based on a payer balance of a virtual payer account maintained by the payment service for the payer […] transferring, in response to creating the virtual payee account, the payment amount from the virtual payer account to the virtual payee account […]. Despite the prolonged consideration of the patent application, Intuit has been continuously developing its crypto-cash payment solutions in the meantime. Earlier, the company announced it had reached a partnership agreement with the payment provider Veem to build a system for processing international cryptocurrency payments. Brave Browser to Enable Tips for Tweets and Posts Brave, the privacy-oriented web browser that supports opt-in ads and crypto payments between users and website publishers like Twitchers and Youtubers, is now planning to expand its service to Twitter and Reddit. The startup intends to introduce support for the two platforms in the fourth quarter of this year, according to an announcement quoted by CNET. To take advantage of the tipping system, which uses Brave’s basic attention token (BAT), users have to enable the payments in the browser. Then, if another Brave user decides that a tweet or a post is worth rewarding,…

Japan Unveils Results of On-Site Inspections of 23 Crypto Exchanges

Japan Unveils Results of On-Site Inspections of 23 Crypto Exchanges

Regulation The Japanese financial regulator has finished the on-site inspections of 23 cryptocurrency exchanges. The agency found many problems and has released a report outlining them. The regulator will use the findings to tighten its review procedures of new crypto exchange applicants, including over 100 companies that have been waiting to be reviewed. Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space Results of On-Site Inspections of 23 Exchanges Japan’s top financial regulator, the Financial Services Agency (FSA), announced Friday the results of the on-site inspections of 23 cryptocurrency exchanges operating in the country. Seven out of the 23 are fully licensed crypto exchanges; the rest are “deemed dealers,” which are exchanges that have been allowed to operate while their applications are being reviewed by the agency. The FSA started inspecting these exchanges after the hack of Coincheck in January. With the announcement, the FSA also released an interim report that outlines the problems found from the inspections and monitoring of the exchanges. Nikkei elaborated: The inspection reveals a sloppy reality that the maintenance of the internal control system has not kept up with the rapid expansion of transactions. The risk was not evaluated for each virtual currency…and it was judged that securing necessary personnel for countermeasures such as money laundering was insufficient at multiple vendors. Furthermore, the agency found that “the total assets of the exchanges rapidly expanded to more than 6 times in one year,” the news outlet conveyed. The FSA is also concerned that there are fewer than 20 executives and employees at most places, with assets under custody of “3.3 billion yen [~US$30 million] per person” on average. Going Forward The FSA will make full use of the findings from the inspections when reviewing new applicants. Since the hack of Coincheck, the agency has not approved any crypto exchanges. According to Nikkei, three companies are currently being reviewed, including Coincheck. The publication reiterated: It is expected that exchange registration that had virtually stopped after the Coincheck incident will be resumed. In the future the examination will be tightened, such as evaluating the effectiveness of the business plan…and the internal control system on-site. At present, there are over 100 companies waiting to be registered. According to Business Insider Japan, they include megabanks, major IT companies,…

Bitcoin Dominance Rate Hits 50% For First Time in 2018

Bitcoin Dominance Rate Hits 50% For First Time in 2018

Bitcoin (BTC) now makes up 50 percent of the entire cryptocurrency market capitalization. Shortly past 03:00 UTC on August 11, CoinMarketCap’s bitcoin dominance rate – an indicator that tracks the percent of the total cryptocurrency market capitalization contributed by the leading cryptocurrency – reached 50 percent for the first time since December 19th, 2017. At press time, bitcoin’s market capitalization now records $105,785,552,545, which is about $901 million more than the market capitalization of every other cryptocurrency combined. Chart via CoinMarketCap The above chart shows bitcoin’s dominance rate has been on a steady incline over the past few months, currently representing a 14 percent increase from May 1st. In the same time period the market dominance of all other cryptocurrencies have largely been on the decline. Conditions were much different the last time bitcoin’s market dominance was above 50 percent. On Dec. 19th, the average price of BTC was $17,605.81 across exchanges – an 65 percent higher price than the cryptocurrency’s value today, according to the CoinDesk Bitcoin Price Index. Image via Shutterstock The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. Join 10,000+ traders who come to us to be their eyes on the charts, providing all that’s hot and not in the crypto markets.