Tether’s Trouble With New York Attorney General — Will Crypto Cope?

Tether’s Trouble With New York Attorney General — Will Crypto Cope?

Are Bitfinex and Tether in trouble? Maybe, but the thing is, we don’t know just how much trouble, because the stablecoin issuer has challenged the New York State Office of the Attorney General’s (OAG) case against them. In claims filed in April, Attorney General Letitia James asserted that Bitfinex defrauded its customers, having lost $850 million in client and corporate funds, and then having attempted to cover up this loss by secretly helping itself to around $900 million of Tether’s cash reserves.  Serious charges, but they’re denied by Bitfinex and Tether’s parent company, iFinex, which responded in April that the OAG’s claims were “riddled with false assertions” and that the lost $850 million is being safeguarded, although it didn’t specify whether this amount is being held by Crypto Capital Corp. (which initially received it) or by some other entity. Regardless, iFinex has applied to have the case dismissed, arguing that the OAG has no legal basis to sue it for the simple reason that Bitfinex wasn’t operating in New York during the period at issue. However, while a New York judge has questioned the attorney general’s “vague, open-ended” claims and asked for a more precisely constructed revision, recent news surrounding the closing of a New York-based bank account indicates that Tether and Bitfinex may very well have been operating in the state of New York. This would suggest that the OAG’s claims are legally valid and that Bitfinex and Tether may end up facing serious repercussions. But even if it does, certain crypto-related legal experts suggest that this wouldn’t necessarily be such a huge blow to crypto, which will endure with or without the liquidity provided by the Tether stablecoin, USDT. The New York connection On July 10, it was reported that the crypto-friendly Metropolitan Commercial Bank had closed accounts associated with iFinex. The company and its affiliates had held these accounts for around five months, after which they were closed, with iFinex itself stating that they were discontinued largely because of inactivity. According to iFinex:  “Metropolitan Commercial Bank had limited, corporate operating accounts with Tether Holdings LTD, iFinex Inc, and Digfinex Inc, all with negligible activity, and requested the accounts to be closed after less than 5 months of the accounts being opened.” As…

Money Laundering Fines Help Bankers Avoid Prosecution

Money Laundering Fines Help Bankers Avoid Prosecution

The recent seizure of a cargo ship owned by JP Morgan, a vessel loaded with 20 tons of cocaine according to latest accounts, highlighted the risks of banks’ involvement in illicit activities, inadvertent or otherwise. And although U.S. authorities released the MSC Gayane after the owner, JP Morgan’s asset management arm, and the operator, Mediterranean Shipping Company, paid a $50M in cash and surety bond, the stain remains and this is not the only stain. Money laundering for drug cartels and moving funds for terrorists, arms dealers and dictatorial regimes are among the sins banks have accumulated through the years. However, court settlements and billions of dollars in fines often help major financial institutions avoid prosecution, conviction, and labels like ‘Drugbanks.’ Also read: Money Laundering Scandals Bring Court Charges and Record Job Cuts to Euro Banks Money Laundering Pandemic According to a study conducted by the International Monetary Fund (IMF) and the United Nations Office on Drugs and Crime (Unodc) in 2017, up to $2.1T dollars is being laundered by criminals each year. Although it remains extremely difficult to estimate the exact amount, Unodc believes it’s between 2 and 5% of the global gross domestic product (GDP). The advancement of financial technologies, including cryptocurrencies, has undoubtedly increased the speed and ease with which money moves around the world. However, the organization singles out developments related to the traditional financial system to explain why finding, freezing and forfeiting criminal assets have become harder. Unodc says the “dollarization” of black markets, financial deregulation, and the spread of financial havens are the main factors. Many banks have invested in implementing expensive transaction monitoring systems that should by design detect suspicious behavior on the part of their clients. They are programmed to raise the alarm whenever predetermined patterns are observed, such as large cash deposits, multiple transfers through a bank account in a quick succession, and other complex financial transactions. In reality, however, the great majority of the automated alerts, 95% in the U.S., are being evaluated as “false positives,” according to research by the Thomson Reuters Regulatory Intelligence published last year. Around 98% never make it into a report on suspicious activity. At the same time, the billions buried in these software systems fail to stop the big…

Ex-CEO of Crypto Exchange WEX Arrested In Italy

Ex-CEO of Crypto Exchange WEX Arrested In Italy

Dmitri Vasilev, the former CEO the now defunct crypto exchange WEX, was arrested Friday in Italy, the BBC’s Russian Service reported. The publication cites Vasilev’s acquaintance and two anonymous investors in WEX who told BBC about the arrest. The attaché of the Russian embassy in Italy, Dmitri Gurin, declined to provide any details, as did the Italian financial police (Guardia de Finanza). WEX was launched in 2017 as a successor of also defunct exchange BTC-e, whose alleged operator, Alexander Vinnik was arrested in 2017 in Greece and now facing extradition to the U.S., France or Russia. The year of frozen funds WEX was launched by Russian citizen Vasilev and operated for a year, until it froze withdrawals in July 2018 and hasn’t restored normal service ever since. The troubles started soon after Vasilev tried to sell WEX to Dmitri Khavchenko, a militia fighter in the war in Eastern Ukraine. Khavchenko told CoinDesk last year that WEX’s admin (who, like the rest of the support team, was anonymous) didn’t like him as the new owner and disappeared with the keys. He also said at the time that the purchase deal was complete. Khavchenko later changed the official owner of the Singapore-registered exchange to his daughter, Daria, he also told CoinDesk. In the meantime, over the summer and fall of 2018, almost $19 million worth of ether moved from the exchange’s cold wallets to the popular crypto exchange Binance. Responding to the outcry on Twitter, Binance CEO CZ said that WEX’s accounts on Binance had been frozen. The fate of those funds is unclear since then. Police step in Users, mostly from Russia and neighboring countries, who were unable to get back their crypto and fiat deposited with WEX, started filing police reports in the fall of 2018. According to BBC, the Kazakhstan national police started a criminal investigation of Vasilev based on one such report, as well as the police of the Russian city of Tolyatti, which started a separate preliminary investigation. The users even wrote an open letter to Russia’s president Vladimir Putin, asking for justice and their money back, the Russian crypto media site Forklog reported in April. The users were notified that the letter was then passed to Russian police headquarters. In March of this…

BlackRock CEO: We Don’t Need Libra, We Need Technology

BlackRock CEO: We Don’t Need Libra, We Need Technology

CEO of the world’s largest exchange-traded fund provider BlackRock claimed that he does not consider Facebook’s Libra a cryptocurrency. The need to democratize foreign currency exchange In an interview with CNBC’s Squawk Box on July 19, BlackRock’s Larry Fink emphasized that there is a huge need to democratize the exchange of foreign currencies in cross-border transactions and to bring down the fees of the interchange. The financial executive pointed out the existing problem of overcharging cross-border transactions, claiming that people who need to send money worldwide usually do that through organizations that charge from five to ten percent. To reduce interchange fees, the world doesn’t need Libra, but technology However, the financial executive argued that the world does not need to create a new currency to do democratize global money transactions, suggesting that that should be reached by means of technology: “I actually believe that the idea about Libra — I don’t think we need to create a new currency, but the technology to instantaneously calibrate all the currencies. That should be done.” Fink elaborated that the global financial system does not need an international currency such as Libra to reduce the operating fees. Instead, he argued that incorporating a particular technological mechanism in each transaction would minimize the transaction cost. The executive said: “You don’t need a Libra. You have computers that can monetize and calibrate euro to dollar instantaneously for a couple basis points.” The news comes amid reports that Blackrock is setting up a working group to evaluate potential involvement in the Bitcoin (BTC) market, including investments in BTC futures. As the investment management is known for its critical stance towards cryptocurrencies, with Fink describing BTC as an index of money laundering in October 2017, two months before the cryptocurrency broke its all-time high of $20,000.

Circle CEO Accepts Justin Sun’s Invitation to Warren Buffett Lunch

Circle CEO Accepts Justin Sun’s Invitation to Warren Buffett Lunch

Circle CEO Jeremy Allaire will attend the crypto power lunch alongside Berkshire Hathaway CEO Warren Buffett, Tron CEO Justin Sun and Litecoin creator Charlie Lee. On July 19, Allaire accepted Sun’s invitation on Twitter to join the much-anticipated $4.6 million lunch with the well-known Bitcoin (BTC) skeptic to discuss issues in crypto industry. In just three minutes after Sun posted the invitation, Allaire tweeted that he is honored to join, adding that the meeting would be a great chance for both Buffett and crypto community representatives to learn from each other. First announced in early June, after the Tron CEO won an eBay charity auction, the lunch is expected to be held on July 25 at Quince, a three-Michelin starred restaurant in San Francisco. Allaire will be one of seven friends that can accompany Sun in his lunch with Buffett. As such, Sun noted that he will be announcing the rest of his entourage within the next 7 days. In mid-June, Litecoin (LTC) creator Charlie Lee became the first guest to join Sun’s lunch with Buffett. Allaire, co-founder and CEO of Goldman Sachs-backed payments company Circle, has recently expressed hope that Facebook’s crypto project Libra will trigger the development of the national approach to policies regarding digital assets. Previously, Allaire urged that crypto space needs regulatory certainty, adding that the existing definition of cryptocurrency is too broad.

Crypto Wallet’s Browser Offers Thousands of DApps in One Place

Crypto Wallet’s Browser Offers Thousands of DApps in One Place

A mobile crypto wallet has announced that users can now effortlessly access thousands of decentralized applications (DApps) directly through its platform. Lumi Wallet says its motivation is to create a one-stop-shop for crypto enthusiasts — a whole ecosystem focused on convenience and simplicity. At the heart of this strategy has been an ambition to streamline the process of downloading DApps. According to Lumi Wallet, it was driven to act after seeing how frustrating the experience can be for smartphone and tablet owners. Not only do individual pieces of software take up a lot of precious memory, but it can be time-consuming and arduous to download them — clogging up home screens. Now, Lumi says it wants to make the decentralized web a straightforward and enjoyable place to spend time — enabling users to become more productive. Through its DApp browser, users have the freedom to explore the broad range of applications available. It’s also possible to narrow down a search based on category — perfect for gamers, traders and creatives, the team notes. Once a user has found the perfect DApp, it can be connected to their wallet in a matter of clicks. At present, Lumi Wallet primarily supports Ethereum applications, but the company is planning to become compatible with EOS DApps in the not-too-distant future. In explaining its rationale, the crypto platform said there are a broad range of ambitious EOS-inspired projects that are currently not supported by wallets — leaving them out of reach of a sizeable number of crypto consumers. Another Lumi milestone Lumi Wallet says its latest innovation comes hot off the heels of Lumi Collect, a digital wallet in which gamers could store crypto collectibles such as ERC-721 tokens and nonfungible tokens. The software enables users to experience blockchain games on their smartphones and complete Ethereum transactions with ease. Lumi Wallet is available here After receiving positive feedback from the DApp community, the company decided to integrate a DApp browser into its flagship product as well, enabling the crypto community at large to experience the same benefits. Additional features have been added to Lumi Wallet on a regular basis. In July, users were given the ability to buy, sell and exchange EOS directly from the app — making swaps and…

Research: Global Blockchain in Healthcare to Reach $1.7 Billion by 2026

Research: Global Blockchain in Healthcare to Reach $1.7 Billion by 2026

The volume of blockchain in healthcare market worldwide is forecast to reach more than $1.7 billion by 2026. In a press release published on July 16, consulting services to information technologies firm Acumen Research and Consulting (ARC) has projected that the global blockchain in healthcare market on the global scale will reach over $1.7 billion by 2026, with a compound annual growth rate of 48.1%. Based on geography, America purportedly dominates with the largest share in the global blockchain in healthcare market, wherein the United States is a mature market that hosts the greater adoption of smart technology in manufacturing and healthcare. Europe is ranked second after the U.S. by virtue of strong government support and large healthcare spending. Among the major drivers of blockchain growth in the European healthcare market, ARC points out increasing expenditure on technology and the presence of multinational companies. “However, lack of security is the major factor restraining the growth of the blockchain in healthcare market in Europe,” the release further notes. ARC names Asia Pacific as the region with the fastest growth rate in terms of blockchain deployment in healthcare thanks to the fastest growing economy and associated opportunities. In the region, Japan ostensibly has a mature market, large population, and highly skilled labor, setting it up to become an important blockchain in healthcare market. As reported earlier in July, research and consulting firm Allied Market Research forecast that the global blockchain supply chain market will reach over $9 billion by 2025. Among key driving factors, AMR named the sector’s demand for transparency. Improved security of supply chain transactions blockchain could purportedly ensure.

What It’s Like to Review Bitcoin’s Code

What It’s Like to Review Bitcoin’s Code

On June 19, Chaincode developer John Newbery gathered a group of developers to examine a proposed change to bitcoin’s code. Taking place via Internet Relay Chat (IRC), the topic was whether the change, which would help prevent a group of rogue miners from inflating bitcoin’s money supply, is a positive one with limited security risks or adverse impacts. Newbery’s goal, then, is to pass on what he knows about reviewing such code. Was this ‘timewarp attack’ stopper a solid change? “The timewarp exploits this by pushing the difficulty adjustment block way into the future, and then the next block back into the present,” Newbery wrote, explaining the attack vector. But the fact that Newbery is even holding these sessions at all can be seen as a sign of the maturity of bitcoin’s developer community, as this is one example of how project’s top coders have been hard at work making the project more inclusive. The process for reviewing code perhaps hasn’t been discussed so openly and in-depth before. Newbery started the Bitcoin Core Review Club to give coders tips on how to figure out how to review a change and determine if it’s beneficial for the cryptocurrency. Meetings transcripts are now posted on the website every week. That this is possible is because bitcoin’s code is open source, residing on GitHub for anyone with an internet connection to look at – or even change. This process has driven the project from code people once called a “monolithic blob” to software that’s easier for easier for developers to read with less critical bugs. People are constantly trying to improve it, with the lofty end goal of making it a worthy code base for the future of money. So, it’s also possible to be one of the people who contributes to bitcoin’s code. Unlike proprietary code, its code anyone can see and use – what’s known as “open source.” One reason it’s called “programmable money” is that unlike other digital money, anyone in the world with the right knowledge can try to add new code features to the money. One of the ways to learn the codebase is to review and test the code programmers submit, to make sure it actually works, and doesn’t introduce a bug or — an unfortunate reality…

Short of Target: Bitcoin’s $1K Rally Leaves Bear Bias Intact

Short of Target: Bitcoin’s $1K Rally Leaves Bear Bias Intact

View Bitcoin’s short-term outlook will remain bearish as long as prices remain below $11,080 resistance. A break above that level would invalidate bearish lower-highs setup. The bulls may have a tough time forcing a break above $11,080 amid news of BitMEX exchange facing a regulatory probe and talks of harsher crypto regulation. Prices could drop below $10,000 in the next 24 hours with daily chart indicators continuing to report bearish bias. A weekly close (Sunday, UTC) above $12,000 is needed to revive the bullish view. Bitcoin (BTC) has rallied sharply in the last 24 hours, but the outlook remains bearish with prices holding below key resistance around $11,080. The premier cryptocurrency jumped from $9,200 to $10,400 in just 40 minutes during the U.S. session yesterday, contradicting the case for a drop below $9,097 put forward by multiple rejections at $10,000 in the Asian trading hours. Price rose further to $10,800 at 23:45 UTC, but closed at $10,648, leaving the crucial resistances of $10,759 (monthly opening price) and $10,850 (daily chart resistance) intact, as tweeted by popular analyst Josh Rager. Rager wants to see BTC climb $10,850 before calling bullish revival. While that argument has merit, a much stronger confirmation of the bullish breakout would be a high volume move above $11,080. That would invalidate the bearish lower highs pattern created during the sell-off from $13,200 to $9,049, as seen in the chart below. Bearish lower highs As of writing, BTC is changing hands at $10,330 on Bitstamp, having clocked highs above $10,770 at 08:00 UTC. The cryptocurrency has come under pressure in the last hour or so amid news that the U.S. Commodity Futures Trading Commission (CFTC) is probing BitMEX, which offers trading of cryptocurrencies with up to 100-times leverage and products such as futures and swaps, over whether it allowed Americans to use its platform. The latest CFTC probe could heighten regulation fears that have gripped markets over the last few days, making it difficult for BTC bulls to force a break above $11,070. Technical charts are also calling a break below $10,000. 4-hour and daily charts BTC is feeling the pull of gravity, having faced multiple rejections at the 50-candle MA on the 4-hour chart (above left) in the last 18 hours. With bitcoin’s fall…

Crypto Exchange BitMEX Under Investigation by CFTC: Bloomberg

Crypto Exchange BitMEX Under Investigation by CFTC: Bloomberg

Updated (09:35 UTC): Added further details from Bloomberg’s full report. Seychelles-based cryptocurrency exchange BitMEX is reportedly being probed by the U.S. Commodity Futures Trading Commission (CFTC). The news appeared in brief on Bloomberg Terminal soon before press time on Friday. That was soon followed by a report from Bloomberg citing sources who said the regulator is investigating whether the exchange has allowed U.S. traders to use its platform. The CFTC considers cryptocurrencies like bitcoin commodities and has jurisdiction over derivatives such as futures based on cryptos. As such, BitMEX would need to be registered with the agency to allow Americans to trade such products in the U.S. According to its website, BitMEX offers trading of cryptocurrencies with up to 100-times leverage and other products such as futures and swaps. Bloomberg said the CFTC investigation is “ongoing” and may not lead to misconduct allegations. The report adds that the CFTC declined to comment when contacted. Just days ago, noted economist and crypto skeptic Nouriel Roubini attacked BitMEX, saying it “may be openly involved in systematic illegality,” again according to Bloomberg. Roubini argued that, in providing such high leverage, the platform is exposing traders to too much risk. Reportedly citing an anonymous blog, he also allaged that the exchange trades against its own clients and “skirts” anti-money laundering regulations. BitMEX CEO Arthur Hayes has previously said it never trades against clients. Hayes also told Bloomberg this week: “We continue to monitor all legal and regulatory developments around the world and will comply with all applicable laws and regulations; we reject any allegations of criminality, manipulation or unfair treatment of our customers, who are at the center of everything we do.” Image via CoinDesk archives