Court Enforces Seizure of Korean Crypto Exchange Bithumb’s Shares

South Korean regulators have seized the share of the local cryptocurrency exchange Bithumb from its major investor. The move has been in connection with an ongoing case of the exchange for allegedly defrauding its clients, reported local media.

The company’s director Kim Byung-Geon had his holdings in the exchange seized on the decision of the Seoul Central District Court on Sept. 14.

Kim was earlier sued in the process of unsuccessfully trying to acquire Bithumb. He also filed an application for the seizure of the share of the majority shareholder, Chairman Lee Jung-Hoon.

The seizure was executed today at the Bithumb Korea Office in Gangnam-gu and overseen by accounting firm Samjong KPMG. Earlier this month, the firm filed a Letter of Intent (LOI) that it plans to sell its own share in Bithumb Holdings and will be sharing a shortlist soon.

Bithumb is currently under investigation for allegedly selling BXA tokens for 30 billion won (about $25 million) but failed to do so, which resulted in investors incurring huge losses. The exchange has already been raided twice by the police this month.

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Author: AnTy

Russian Monitoring Agency Develops Blockchain Analysis Tool To Track Bitcoin And Monero

A report from local news channel RBC confirmed on Tuesday Russian intelligence unit, Rosfinmonitoring, (Russia’s Federal Financial Monitoring Service), has proposed a cryptocurrency monitoring tool similar to U.S.’s Chainalysis. The agency, in charge of reducing cases of money laundering and terrorist financing in the country, will start tracking Bitcoin and other cryptocurrencies including privacy enhanced tokens such as DASH and XMR.

“The Transparent Blockchain”, is a new prototype built in partnership with the Lebedev Physical Institute of the Russian Academy of Sciences that will use artificial intelligence to track blockchain activity and cryptocurrency transactions. According to the report, a letter to the Deputy Minister of Digital Development, Communications and Mass Media, Maxim Parshin, has been approved by the Ministry of Telecom and Mass Communication.

So far, the Rosfinmonitoring has started preparations for widespread production of the software with the Bank of Russia and financial institutions within the country set to test it in the “near future.”

A $10 million request

The prototype is ready and tested on drug controls, the Federal Financial Monitoring Service confirmed. However, till now development of the blockchain analysis service has been constricted to extrabudgetary funds. To continue the build, the Rosfinmonitoring requested the federal government to increase their funding for the project by 760 million rubles (~$10.42 million) in the next three years.

Russia has been on the forefront in preventing money laundering and terrorist financing using cryptocurrencies. In July, President Vladimir Putin signed two digital asset bills into law – first, authorizing that crypto is property and second, digital assets cannot be used as a form of payment within the country. Earlier this month, the Russian government outlawed sending cryptocurrencies to any anonymous wallets forcing users to be fully KYC compliant.

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Author: Lujan Odera

Swiss Financial Regulator, FINMA, Licenses Local Bank To Carry Out The Crypto Transactions

Switzerland’s top financial regulator, Financial Market Supervisory Authority (FINMA) grants local banks, InCore, the first license to transact digital currencies. This adds to the accelerated efforts from the Swiss government in the blockchain field so far in 2020 with the government looking to implement a central bank digital currency (CBDC).

InCore, first Swiss bank licensed to transact crypto

In an official announcement released on Friday, May 29, InCore bank confirms its FINMA license allowing it to process digital currency transactions. This makes it the first business to business Swiss bank mandated to operate within the crypto industry opening up a gateway for customers across the globe.

The license allows institutional-based clients banking with InCore bank to buy, sell, trade, hold and transfer digital assets on their accounts. Opening up crypto transactions aims at promoting the overall development of blockchain-based payment systems to increase efficiency, reduce cost, and enhance transparency in the financial system.

Speaking on the new license, CEO of InCore Bank, Mark Dambacher, says the demand from customers for digital assets pushed the addition of the services. The bank aims to provide world-class services for its customers “without having to invest in infrastructure and new processes themselves”. He added,

“And this while maintaining the usual security standards. This is how we build a bridge to traditional asset classes.”

The bank recently announced its “Digital Services” division that will work on the strategic development of these new crypto transaction systems. The bank aims to separate and secure the crypto wallets differently according to Daniel Blatter, InCore bank Head of Digital Services,

“We guarantee the complete segregation of crypto customer assets on individual wallets, which means that the bank’s own capital requirements are not required.”

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Author: Lujan Odera

LG CNS Partners With Blockchain ID Firm, Evernym To Improve The International ID Systems

  • In a local report from Korea, LG’s information wing, LG CNS signed a memorandum of understanding (MoU) with the blockchain-based firm, Evernym.
  • Will introduce decentralized identification (DID) on international passports and driving licenses.

A post from Aju Daily further explains that the partnership with LG CNS will push the software company that develops decentralized, self-sovereign identity applications, into building global blockchain-based identification systems.

The Evernym system aims at replacing the physical international drivers’ licenses and passports by allowing governments to “issue, accept, and verify credentials that operate like a digital passport.”

The implementation of a new blockchain-based authentication system is the start of a partnership between LG CNS and Evernym. On the statement, LG CNS will actively work with Evernym to contribute to the Worldwide Web (W3C) Consortium.

The Chief Technology Officer at LG CNS, Kim Hong-Geun, is aiming at a global market to offer an instant and secure identifier to governments and firms. Kim spoke on the latest signed MOU stating,

“Through cooperation with Evernym, we will create DID solutions and service models that can be used globally. We will also actively participate in related public projects so that South Korea can lead the global standardization of decentralized identification (DID).”

Blockchain Developments in Digital Identification

In February, the LG and Samsung backed consortium, SK Telecom, announced the first-ever mobile-based id system built on blockchain, in partnership with local bank, NongHyup (NH) bank. The new DID system by Evernym will also feature on smartphones allowing users to transfer and retrieve identity information at any moment from the blockchain.

Following IBM’S and Evernym’s partnership in early 2019, a number of venture capital firms started knocking on its doors with Overstock’s Medici Venture’s closing a $2 million investment round in the blockchain-based ID firm.

LG CNS is also engaging in other areas of the fourth technology revolution recently saying it will increase its efforts in R&D in the artificial intelligence, cloud computing and blockchain industries.

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Author: Lujan Odera

With Rainy Season Here, China Calls for Bitcoin Miners to Use its Cheap and Abundant power

According to recent reports, local Chinese governments are supporting bitcoin mining. Now, with the rainy season here, the extra power supply has driven its prices down to 0.20 CNY or around 3 USD cents, noted 8BTC co-founder.

Yaan, a city in Sichuan known for abundant water resources prolific bitcoin mining, last week issued government advice on “the construction of a hydropower consumption demonstration zone to support the development of the blockchain industry.”

The implementation advisories were jointly issued by the Municipal Economic and Information Bureau and the Municipal Development and Reform Commission aimed at deepening the power system reform.

The idea is to enable the companies to seize major strategic opportunities for the industry’s development and promote its healthy and orderly development. Moreover, the local government aims to promote the high-quality consumption of hydropower resources and cultivate new growth points for the city’s economic development.

A Blockchain Industry hub

The city, which is estimated to account for more than half of the Bitcoin network’s computing power, in its likely first public guidance to grab the “strategic opportunity of the blockchain sector” is intent on helping the companies consume the excess hydropower electricity of the area.

Although bitcoin mining is not specifically mentioned, the report from April 20th seeks to establish itself as “an impactful blockchain industry hub,” a shift from last year’s guideline which identified bitcoin mining activities as an industry that should be eliminated.

China’s Sichuan region always goes through the issue of excessive hydropower electricity being wasted during the rainy summer season, from June to August.

With abundant cheap electricity from excessive hydropower, the city is emphasizing the blockchain companies on using the power plants integrated with the state grid.

Cheap Power may Offset Halving Woes

With Bitcoin’s halving just around the corner in less than two weeks, miners aren’t really keen on investing. After recovering from the March sell-off, the price of bitcoin has been hovering around $7,700 since the weekend with the breakeven cost at $7,300.

Halving means the miner inflow will be cut in half to 900 BTC per day while the breakeven cost rising to $15,100, as per TradeBlock. The question of whether to buy new and more powerful mining equipment or not depends on the price of bitcoin post halving.

Bitcoin at its current price could force more miners, especially over-leveraged miners to shut down their operations. But more reduction in electricity prices in the next few months could help them to keep on operating with positive margins while the price goes back to profitable levels.

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Author: AnTy

Binance Adds 15 New Instant Fiat-to-Crypto Conversions With Simplex Partnership

Trying to corner local markets, the Malta-based crypto exchange Binance has added support for 15 more fiat currencies through the integration with Simplex.

Gateways for currencies like the Korean won, the Swiss franc, the Polish zloty, the South African rand and the Australian dollar have been created and made available through the exchange’s fiat-to-crypto trading facility. The Russian ruble and the pound sterling are now Simplex supported too. The integration was confirmed by developers to be fully operational until Thursday in the afternoon.

Binance’s Base Cryptocurrencies Will Be Paired with the Supported Fiat Currencies

The supported fiat currencies are going to be paired with the base cryptocurrencies on Binance, which are the assets used by the exchange for default trading pairs. These cryptocurrencies include the Bitcoin (BTC), Ether (ETH) and XRP, while the fiat currencies include the US dollar and even the Nigerian naira.

It seems that fiat volumes are not that significant for the trading activity on Binance, seeing from a daily volume of about $3.5 billion, $3.5 million is fiat. Most of this volume is in US dollars since a gateway for this currency became open. As Binance is folding some of the currencies it supports into US dollars, it’s still not sure if end-users are the ones who generated the exchange’s dollar volume.

Simplex and Binance Working Together Since 2019

Simplex and Binance have become partners in January 2019. They allow users to buy crypto using their debit and credit cards in either euros, Canadian dollars, US dollars and Japanese yens. While the fee charged is 3% plus $10 on purchases under $200, it’s still cheaper than the card or bank providers’ transactions, which levy a 3% FX fee aside from the usual fiat-crypto swap fees. By encouraging users to make trades in their local currency, Binance is becoming more global.

In October 2019, the company’s CEO Changpeng Zhao said Binance integrated the Russian ruble because Russia was representing one of the key markers for the exchange. Thursday, the firm hired a product lead that used to work for Uber in order to expand its services to local markets.

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Author: Oana Ularu

Chinese Local Authorities Halts the Operations of a Local Cryptocurrency Exchange BISS

Sohu, a local media house, reported on November 22 that the Chinese government closed BISS, a Chinese cryptocurrency exchange. However, the exact date of the closure remains unclear. Ten people who are believed to have been working for the exchange have also been taken into custody. This comes just after the Shenzhen authorities warned against illegal activities in the crypto space, including cryptocurrency exchanges last week.

The exchange’s last publication was on user withdrawal concerns in a blog dated November 18. The company confirmed that its operations have been halted by the authorities. “BISS’ operations have been halted by regulatory authorities on inquiries about our services, which may be contrary to capital control regulations.”

BLISS stated in the announcement that its operations have only been halted as the authorities investigate cases concerning user interests. The company, however, made it clear that its intentions are to cooperate with the law enforcement authorities and follow all relevant regulatory legislation to be on the safe side of the law.

Dovey Wan, the founding partner of Primitive Ventures, a blockchain-powered company, wrote on her Twitter on November 22, saying that the local crypto market had been aware of the closure for two weeks. The publication of that development by the media came quite late. According to Wan, BISS which a Beijing-based Cryptocurrency exchange, was a relatively established exchange.

Recently, there has been a crackdown on local cryptocurrency exchanges in China. Thirty-nine crypto exchanges in the country may find themselves victims of the ongoing ban, according to a report released by Cointelegraph. Shenzhen authorities have identified the 39 companies to be acting in violations of the regulatory obligations. The city of Shenzhen happens to be China’s tech capital.

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Author: Denis Miriti

Russia Outlines Plan to Allow for Confiscation of Cryptocurrencies by the End of 2021

The Russian government is considering enforcing a law to curtail the use of digital assets for criminal activities, local financial news outlet RBC reported on November 7.

The Ministry of Internal Affairs of Russia, along with other relevant authorities, plan to roll out a legal mechanism that would allow seizure of virtual assets for confiscation by December 31, 2021. This would give police the power to confiscate any user’s bitcoins and other cryptocurrencies.

The plan comes in the wake of rising crypto-related illegal activities in the country.

Alena Zelenovskaya, head of criminal and administrative law practice at NSA Amuleks said,

“The trend of a constant increase in the number of crimes using virtual assets, the insecurity of individuals from this type of criminal encroachment, of course, dictate the need to develop mechanisms for legal regulation and control over the circulation of virtual assets.”

As per the new proposal, confiscation of virtual assets will be made possible only by the order of the court. Despite the resolve, how will authorities confiscate something that is completely decentralized is not clear.

Bitcoin and other cryptocurrency holders either store assets in a wallet or on a crypto exchange. Government will face trouble accessing the crypto wallet because each comes with a private digital key. This means that only the owner of the wallet has the password to unlock it. Additionally, the government will need to prove that the crypto wallet, which is completely anonymous, belongs to the said person.

If the assets are stored on a crypto exchange, the government will be able to block an account only if the exchange complies. Exchanges that operate outside Russian jurisdiction will be free to ignore any such requests.

That aside, for the confiscations to work, the Russian legal system will need to recognize crypto-assets as either commodities or an equivalent to cash. This would mean giving a legal status to crypto which might face heavy resistance from the Bank of Russia.

Though right now it might seem impossible to control something as ‘un-confiscatable’ as crypto, it would be interesting to note how the proposal shapes up and what it does to the backlash against bitcoin in several other countries.

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Author: Sakshi Jain

Bitcoin Demand to Further Rise in Hong Kong as ATMs Run Out of Money

The violence in Hong Kong is escalating with each passing week. On Friday, the local government passed a martial law by banning to wear masks at public places.

Local banks, that remained resilient in the face of mass protects have now taken a hit as well.

As the social upheaval spilled over into the financial world, the local central bank, the Hong Kong Monetary Authority has been forced to issue a warning against a “malicious attempt to cause panic among the public” after the rumors were spread about the government using emergency powers to impose foreign-exchange controls.

The central bank said over 10% of 3,300 ATMs were damaged and couldn’t function and 5% of the cash machines have run out of money.

The largest bank in Hong Kong, The Hong kong and Shanghai Banking Corporation (HSBC) that closed some of its branches on 5 October 2019 is reporting “higher than usual demand of our ATMs”.

As the local ATMs “run out” of money, the demand for gold and Bitcoin is further expected to rise and prices to edge higher.

The gold price has already soared to 6 year high driven by the Hong kong protests, trade war, falling interest rate, quantitative easing, and slowing global economy.

As for Bitcoin, recently LocalBitcoins, a peer-to-peer Bitcoin trading platform posted its highest trading volume ever in Hong Kong.

During the week Sep. 21-28, 12,294,796 Hong Kong dollars were recorded in trading volume, the highest ever in its history. The previous record was 11,666,176 HKD in early January 2018.

However, in terms of BTC, only 173 BTC was traded during this record week while the all-time high is at 1,086 BTC in November 2015.

The difference is while in 2015, one BTC was worth only about $300, for the past few weeks BTC is trading around $8,000.

Now, with ATMs running out of cash and demand for ATMs rising amidst the bank run and the local central bank jumping into the picture, the demand for physical gold and digital gold might see another spike.

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Author: AnTy

Iran Cracks Down on Crypto-Miners as the Government Regulates

The Iranian government has steadily been putting pressure on local crypto-miners in the past three months thanks to new legislation in the works that would regulate cryptocurrency mining via licensing.

Without any official legislation put out, crypto-miners around the country with a sense of perpetual fear and paranoia, running the risk of losing all their equipment, being overloaded with incredibly hefty fines, or outright arrested and jailed for the practice.

It’s been estimated that over 80,000 mining machines have been confiscated within the span of the last four months, with one bitcoiner, in particular, losing thousands of machines, and causing the loss of income for 30 households that relied on these mining operations.

The Iranian government isn’t pulling any punches with their fining process. Several bitcoiner’s simply gave up the deeds to their houses, because they couldn’t pay the exorbitant fines, usually more than their annual salaries. The fines can range from $2 000 to $5 000, per machine, several times more than its retail value.

That is usually added to the already steep electricity fines given out. Such fines are four times the annual cost a business has. An example would be if a group mined bitcoins, paying $5 000 for electricity in the span of a year, they would be fined a shocking $20,000 for using subsidized electricity.

Crypto-Miner Smuggling

The legality of crypto-mining within Iran is compounded by, for lack of better words, the fact that the easiest way to gain mining-capable equipment within Iran is through the black market.

Everything from televisions to air conditioning units are bought like this, with official retail outlets in Iran usually selling items of lower quality and higher price compared to foreign grey markets. 

It’s a safe deduction to say if the Iranian government wants to crack down on these smuggled pieces of equipment, they would have to hold almost all of Iran in contempt and fine them accordingly.

The Start of It All

The reason Iran, in particular, is making waves is because of the staggering cheap energy rates within Iran. In some places, the electricity rate is as low as $0.0006, which, understandably, creates an attractive market for an industry that mandates extreme power demand. Crypto-mining is ultimately a game of balancing out the costs compared to the value of the cryptocurrency you get, and one of the major factors of that is the energy consumption costs.

Even outside of Iran, many investors took notice of it, but the same difficulty of smuggling equipment for local miners is the same problem for international investors. Regardless, this new chapter in Iran’s history will undoubtedly have a tremendous impact on the country. If done correctly (and quickly), the new legislation could boost Iran’s economy by an incredible degree.

Or it could ruin an opportunity due to government interests. All we can do is wait and see

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Author: Ali Raza