Posted on

Chinese Yuan Now Accounts for Less Than 1% of Bitcoin Trades, Says PBoC Report

China’s central bank, The People’s Bank of China (PBoC), has stated that the Chinese yuan now accounts for less than 1 percent of global Bitcoin (BTC) transactions, local news outlet Asia Times reports today, July 9.

The PBoC released a new report on Friday, July 6, indicating that the yuan’s share of global Bitcoin trades has plunged in the months following the government’s crackdown on the cryptocurrency industry, Asia Times reports.

Whereas in 2017, Chinese exchanges accounted for over 90 percent of the global crypto industry –– a figure corroborated in this week’s PBoC report –– their current less than 1 percent share reveals the momentous impact of policy restrictions. Guo Dazhi, research director at the Zhongguancun Internet Finance Institute, is quoted by Asia Times as saying that:

“Th[e new figures] indicate that the policy has been very successful. It is within expectations that the yuan’s share in global Bitcoin transactions would drop after China announced the ban.”

Local media outlet XinhuaNet has quoted the PBoC’s report as saying that the country’s policies had ensured a “zero-risk” exit for the 88 cryptocurrency exchanges and 85 ICO trading platforms closed since late 2017.

China’s Sep. 2017 ban on crypto exchanges and Initial Coin Offerings (ICOs) became yet more stringent in early 2018, with officials stepping up their restrictions in January to include a broader category of “market-making” platforms and services.

In February, China added offshore cryptocurrency exchanges and ICO websites to its Great Firewall, further toughening its stance.

Further local media reports have this week suggested that China does not intend lift its ban on Bitcoin trading any time soon, still considering the volatile cryptocurrency market to pose excessive risks for domestic investors.

Notwithstanding its hardline stance on decentralized cryptocurrencies such as Bitcoin, the PBoC has nonetheless been pursuing a longer-term vision for tightly controlled blockchain integration into the traditional financial sector.

Just two weeks ago, the bank filed a new patent for a digital wallet, the same month as it revealed its new blockchain-powered system with smart contract functionality designed to tokenize paper checks.

The Governor of the PBoC said this spring that while virtual currencies are “technologically inevitable” and will ultimately diminish cash circulation, the PBoC intends to control the “unpredictable effects” posed by decentralized forms of crypto and certain applications of blockchain.

Posted on

Crypto Auctions: Where Do Arrested Bitcoins End Up?

From their early days, cryptocurrencies have been associated by many with black markets and illicit activities. Bitcoin’s feature of allowing direct payments to be made from one party to another without the involvement of financial institutions, has been also utilized as a way to avoid institutional controls and settle illegal transactions.

A recent study of University of Technology Sydney (UTS) found that “approximately one-quarter of Bitcoin users and one-half of Bitcoin transactions are associated with illegal activity”

On the other hand, given that there are almost 28.5 mln Bitcoin wallets that hold more than 0.001 BTC and many users own several wallets – with some inactive – the magnitude of this phenomenon is considerably reduced.

Regardless, it is a fact that some illegal activities are done with cryptocurrencies. While it seems quite simple to seize a fiat account or appropriate cash, the nature of cryptocurrencies makes this process much more complicated. Let’s analyze some cases where the government authorities seized cryptocurrency assets due to illegal activities and find out where they end up.

International authorities did not try to underestimate the issue. Europol recently recognized that “three to four bln pounds of criminal money in Europe is being laundered through cryptocurrencies”.

Europol’s Executive Director Rob Wainwright underlined that:

“Proceeds from criminal activity are being converted into Bitcoins, split into smaller amounts and given to people who are seemingly not associated with the criminals but who are acting as ‘money mules’. These money mules then convert the Bitcoins back into hard cash before returning it to the criminals”.

Silk road

In this complicated scenario, international prosecutors reacted by performing some important police operations. One of the most widely known operations was carried out in Oct. 2013 with the closure of Silk Road.

Silk Road was a website that operated as an online black market for selling illegal drugs, and used Bitcoin for settling the deals between site users. After two years of investigation, the US Federal Bureau of Investigation (FBI) arrested the founder and seized over 170,000 Bitcoins, which, at that time, accounted for about 1.5 percent of all the Bitcoins in circulation.

The closure of Silk Road was not the only activity carried out by international authorities to fight against illicit markets around cryptocurrencies. In Nov. 2014, the police of Hesse, Germany, together with Europol and the FBI, operated against illegal online shops Hydra and Silk Road 2.0, which were also engaged in the sale of drugs.

According to law enforcers, these shops were used by approximately 150,000 people, who each month used to buy drugs worth millions of euros using Bitcoins. This operation resulted in the seizure of of 126 Bitcoin from the owners of the websites.

Bulgarian case

But maybe the most impressive operation rolled out by international authorities has been done on May 19, 2017 by the Bulgarian police with the support of the Southeast European Law Enforcement Center (SELEC). The joint forces stopped an organized criminal group that was recruiting corrupt customs officers in many European countries, with the purpose to infiltrate a virus in the customs’ computerized systems and avoid the payment of taxes.

The offenders choose the Bitcoin as a way of investing the money resulted by their activities, considering them rather difficult to be tracked. As a result of the police investigation, an impressive number of 213,519 Bitcoin has been seized.

Cryptocurrency auctions

The seizing of cryptocurrencies has been increasingly the result of international investigations, with examples of this measure taken in many countries including the US, Germany, Bulgaria and UK. National authorities have started thinking about what to do with the seized coins. The US was one the first countries to approach the issue and started organizing auctions selling the appropriated cryptocurrencies.

The United States Marshals Service (USMS), a federal law enforcement agency within the U.S. Department of Justice, auctioned different lots of Bitcoins catched by different state authorities. One of the most recent sale has been held on Jan. 11, 2018 where the USMS auctioned a total of 3,813 Bitcoin in three different lots respectively of A) 2,500; B) 500; C) 813.

Given the value of the Bitcoin at approximately 11,500 USD the closing day of the auction (Jan. 19), the result granted an amount of around $44 mln in revenue to the state. Similarly, in Germany, the authority of the state of Hesse hope to gain millions from the sale of the 126 seized Bitcoins.

What about Bulgaria? According to calculations, the value of the 213,000 seized Bitcoins would be enough to pay off one-fifth of Bulgaria’s national debt. At present, the proportion would be a little different as the debt of the country is around $16 bln whereas the value of that pot of bitcoins would be around $2 bln.

However today it’s not clear whether or not the authorities really possess these coins. The head of Bulgarian Special Prosecutor’s Office, Ivan Geshev, recently said that the Prosecutor’s Office and the Interior Ministry had not seized Bitcoins.

More auctions to come

The fight against the misuse of funds for financing black markets and illicit activities has to tie up more its activities towards the use of crypto currencies. Given the extreme rapidity through which cryptocurrencies can be moved between wallets, states, and continents, a stronger collaboration between international authorities would also be necessary to conduct special operations.

Seizing and then auctioning cryptocurrencies, in case of a confirmed illicit use, could be both a strong deterrent for criminal users and, in some instances, a good source of income for state revenues.                

Uniformity between the various international authorities on the approach regarding the auctioning procedures could be a desirable development, in order to guarantee a fair and transparent process around the redistribution of the cryptocurrency assets. A rigorous process of identification could also guarantee that the participants are not connected to any illicit activities, and to avoid the process to start over again.

Posted on

India: Delhi High Court Seeks Response From Central Bank On Recent Crypto Ban, Report Says

The High Court of Delhi has reportedly issued a notice to the Reserve Bank of India (RBI), the Ministry of Finance, and the Goods and Services Tax (GST) Council alleging that RBI’s decision to end dealings with crypto businesses violates the constitution, local news outlet Times of India reports today, April 22.

The High Court’s notice is reportedly in response to a claim filed by crypto company Kali Digital last week. After the RBI released a circular on April 5 stating that they would no longer provide services to a person or a business that deals in cryptocurrency, an online petition to reverse the ban was started, gaining over 43,000 signatures by press time.

Kali Digital, which runs the crypto exchange CoinRecoil, set to be launched in August 2018, filed an official claim on April 16, stating that RBI’s circular violates constitutional Articles 19 (1) (g) – allowing citizens the right to any occupation, trade, or business – and Article 14 – prohibiting  discrimination between equals. The High Court of Delhi’s notice, issued by Judges S. Ravindra Bhat and A. K. Chawla, asks for a response from the three parties involved by May 24.

Kali Digital believes that RBI’s decision will prevent CoinRecoil’s business operations in an unconstitutional manner, according to an excerpt of the claim written in local news outlet The Economic Times:

“On account of the impugned circular, the petitioner will not be able to avail banking services to operate the cryptocurrency exchange ‘CoinRecoil’. Such banking services are imperative for the business of the petitioner. Consequently, the business […] is stillborn.”

Kali Digital included the GST Council in the claim due to what they see as a failure to “frame appropriate regulation on crypto-currencies [sic] […] [that] increased the uncertainty over treatment of such transactions and is adversely affecting the proposed business of the petitioner,” the Times of India writes.

Tech investor and crypto enthusiast Tim Draper had also responded negatively to the RBI’s circular, saying in an interview that the Indian government’s refusal to recognize cryptocurrency as valid tender is “the stupidest thing” and that he would have told Prime Minister Narendra Modi that RBI’s crypto ban is a “huge mistake.”

Posted on

Bitcoin, Ethereum Prices Remain Steady Despite ‘Crypto Ban’ From India’s Central Bank

The crypto markets are holding their own this week, with Bitcoin (BTC) not venturing too far away from $7,000, even amid news that India’s central bank would stop dealing with crypto-related businesses.

The relatively steady prices could be attributed to a big adoption win in Asia yesterday, when Omise and OmiseGO signed a Memorandum of Understanding for fintech and Blockchain innovation with a South Korean banking affiliate.

BTC is currently trading for around $6,880, up a little more than 3 percent over a 24 hour period to press time.

Chart

Ethereum (ETH) is also nearing $400, currently trading at around $381 and up a little more than 3 percent over a 24 hour period to press time.

Chart

Of the top ten coins listed on CoinMarketCap, only EOS is in the red, down less than 1 percent over a 24 hour period and trading for around $5.92 to press time.

Monero, which recently updated its protocol to protect the cryptocurrency against ASIC miners, specifically Bitmain’s recently announced Antimer X3, is up a little more than 1 percent over a 24 hour period, in 11th place on CoinMarketCap, trading around $170 by press time.

Total market cap is around $258 bln according to data from CoinMarketCap, up from April 1’s intraweek low of around $243 bln.

Global charts

Posted on

Facebook, Google and Twitter Ban Ads, But Do Their Founders Really Dislike Crypto?

Social media platforms have recently banned advertising for cryptocurrencies and ICOs, but that stance is contradictory to the thoughts of their directors.

In January, the social network giant Facebook outlawed cryptocurrency related advertising in an effort to protect users from various ICO scams, fraudulent token sales, Ponzi schemes and the likes.

It has set a precedent that is now being followed by other platforms and service – but this disparaging move is at odds with the sentiments of the heads of these businesses.

The people responsible for the creation of social media platforms like Facebook and Twitter have been singing praises for cryptocurrencies and their underlying Blockchain technology.

It creates a bit of a juxtaposition, as the companies they are responsible have enforced sanctions that potentially stifle the adoption and development of Blockchain.

In order to unpack this disconnect, let’s take a look at what the likes of Facebook co-founder Mark Zuckerberg and Twitter CEO Jack Dorsey think about the developing technology.

Facebook and Instagram

At the beginning of 2018, Facebook co-founder Mark Zuckerberg made some positive comments about cryptocurrencies in a post on Facebook. He focused on the potential benefits they have for businesses like Facebook, as well as the power they hand back to people.

He honed in on an issue that is becoming increasingly talked about – centralization versus decentralization. As CNBC reported, Facebook was in the spotlight for a number of negative issues mainly related to its ad-services and their capabilities.

“There are important counter-trends to this, like encryption and cryptocurrency, that take power from centralized systems and put it back into people’s hands. I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

No more than two weeks later, Facebook announced that it would prohibit cryptocurrency related advertising on the platform, which was met with varying reactions from the wider cryptocurrency community.

Fast forward three months and Facebook was embroiled in one of the biggest scandals since its inception. In essence, the platform supplied personal data from over 50 bln users to political consulting firm Cambridge Analytica.

Zuckerberg took to Facebook to admit the company had made ‘mistakes’ while outlining what had led to Cambridge Analytica access to data from Facebook users. He has since taken out adverts in British newspapers to make a public apology, while Facebook has been hit with a swathe of lawsuits.

In an interview with CNN last week, Zuckerberg even suggested that Facebook could benefit from regulation – an issue that is hanging heavily over cryptocurrencies and ICOs this year:

“I’m actually not sure we shouldn’t be regulated. In general, technology is an increasingly important trend in the world and I actually think the question should be ‘what is the right regulation rather than ‘yes or no, should it be regulated.”

“On the basic side, there are things like ads transparency regulation that I would love to see. If you look at how much regulation there is around advertising on TV and in print, it’s just not clear why there should be less on the internet, you should have the same level of transparency required.”

Meanwhile one of the primary attributes of Bitcoin and other cryptocurrencies is the ability to encrypt data giving anonymity and privacy to users.

Facebook’s move to ban cryptocurrency related advertising also applied to partner platforms Instagram and its advertising platform Audience Network.

Twitter CEO beams on Bitcoin

While Zuckerberg battles with Facebook’s ongoing woes, Twitter CEO Jack Dorsey has been waxing lyrical on Bitcoin of late.

In an interview with the Sunday Times issued on March 21, the Twitter and Square CEO forecast that Bitcoin could one day become the single global currency in ten years time.

“The world ultimately will have a single currency. The Internet will have a single currency. I personally believe that it will be Bitcoin, probably over ten years, but it could go faster.”

Having personally invested in Bitcoin, Dorsey is a staunch advocate for the virtual currency. He’s also the CEO of point-of-sale software startup Square, which would soon integrate a Bitcoin buy/sell functionality.

Furthermore, Dorsey also invested in Lightning Labs, which has seeded $2.5 mln to spearhead the development of the Lightning Network which promises to provide free and fast Bitcoin transactions.

While Dorsey is bullish on Bitcoin, he reiterated that startup companies like Lightning Labs hold the key to further adoption around the world:

“It’s slow and it’s costly, but as more and more people have it, those things go away. There are newer technologies that build off of Blockchain and make it more approachable.”

What is disconcerting is that Twitter is the latest social media platform to ban cryptocurrency advertising.

Murmurs of an impending ban last week were confirmed on March 27. Twitter will begin cutting out advertising of initial coin offerings and their token sales as well as global cryptocurrency wallet platforms if they are not publicly listed on select stock exchanges.

Once again, there is a clear disconnect between the thoughts and views of its leadership and the plans of the business itself.

Twitter has followed in the footsteps of Facebook. The social media platforms are trying to protect users from fraudulent companies and scams, which have taken advantage of many through advertising campaigns on social media networks.

However, that has painted everyone with the same brush. In essence, innovative startups with ingenious business plans have been stifled due to the actions of fraudsters and scam artists looking to ride the Blockchain and cryptocurrency wave.

An infamous example was John McAfee’s Twitter account being hacked and used to promote some obscure virtual currency tokens.

Furthermore, Twitter, in particular, has been rife with accounts impersonating well-known cryptocurrency advocators and accounts, which has caught unsuspecting users out.

Google to follow suit

The world’s biggest search engine, Google, is following in the footsteps of its social media cousins.

As reported in March, Google’s updated financial services policy will rule out all related cryptocurrency advertising through its AdWords service from June 2018. Once again, consumer protection is touted as the main driving factor behind the move.

There is an air of irony to Google’s move. While cryptocurrency adverts will come to an end, Google could actually be stifling the growth of companies it has invested in that directly use cryptocurrencies.

Companies like Blockchain based cloud storage Storj and payment platform Veem, which Google has backed financially, will in essence be unable to advertise on the search engine once the ban comes into effect.

The move to ban crypto advertising comes less than a year after Google’s parent company Alphabet invested in London-based online wallet Blockchain.info. It also remains to be seen how this service will be able to advertise on the search engine come June 2018.

At the time, Alphabet partner Tom Hulme said their investment in the company, which raised over $70 mln in overall funding, was essential because “the pace of innovation in the digital currency space is unmatched,” as quoted by Fortune.

And yet cryptocurrency wallet providers and promising ICOs will no longer have access to the world’s biggest search engine in two months time.

Other platforms

Snapchat is another massive social media platform to make a move against cryptocurrency advertising. They’ve instituted a similar ban on Facebook and Twitter, but have only prohibited adverts for initial coin offerings.

Ironically pioneering Snapchat investor, Jeremy Liew was bullish on Bitcoin and had some lofty price predictions for the preeminent cryptocurrency last year.

China has taken a hard stance against cryptocurrencies from a governmental level and that has filtered down to internet based companies in the country. In September 2017, the country ordered that all cryptocurrency exchanges must close down.

As reported by Recode, the likes of Alibaba and Tencent haven’t allowed this cryptocurrency related advertising for far longer. Meanwhile, the South China Morning Post revealed that it seems search engine Baidu is not returning adverts for any cryptocurrency related searches – only news articles and posts.

Russian search engine Yandex is also expected to follow suit – according to local media reports.

Where to from here?

This is a question that may not be answered for months. The whole world seems to be waiting for clear regulatory guidelines on cryptocurrencies and ICOs.

While the likes of the SEC pioneer this space, we may see continued apathy towards the promotion of ICOs and cryptocurrency tokens sales on most online platforms for some time.

Until there are firm guidelines in place that protect the majority of users from ICO scams and misleading investment opportunities, these extreme sanctions are likely to remain in effect.

Posted on

Black January: Why is Bitcoin in Such a Bad Way?

As January closed, Bitcoin fell towards $9,000 (getting closer to $8,000 in the first days of February). It has been a particularly tough month and a half for Bitcoin if one considers that halfway through December the coin peaked at $20,000.

The market has taken hit after hit in the days following its downward spiral from the aforementioned high, the only issue is that some of these catalyzing factors have been paper tigers or even worse, fake news.

In a speculative market such as the Bitcoin one, which welcomed a massive influx of relatively clueless speculators in the hype-rush to $20,000, bad news is especially bad news and damaging to investor confidence.

South Korean confusion

Halfway through January, there was a bout of confusion that came out of South Korea, an important Bitcoin hub in the east, as the Ministry of Justice, which independently announced its plans of banning cryptocurrency trading.

This sent panic across the markets, in a similar fashion as to when China announced it banning plans.

However, it has since been cleared up by much higher authorities, and in fact, the sentiment out of South Korea has been pretty positive following this market scare. In fact, this move was even classed as insider trading as many fought back against the supposed planned FUD attack.

Regardless of the clearing up, and the clouds parting over the Asian nation, the damage was still done. The markets managed to claw their way back somewhat, but there was soon more damaging news of questionable integrity to send the speculators fleeing.

Old news

In the US, the fear, uncertainty and doubt showed its face when it emerged that there was a subpoena out for Bitfinex and Tether. The former a major exchange and the latter a token issuer.

This sent ripples of panic across the community as it again showed that the regulators who have been classed as enemy number one, where on their feet and clamping down.

According to the report, the Commodity Futures Trading Commission was sending subpoenas to these two companies, which strangely, were not even US-based companies, pulling alternative questions about jurisdiction also to the fore.

However, after the market took an 11 percent tumble at this news, it emerged that these subpoenas had already been issued, back in early December, according to Nathaniel Popper, a reporter from New York Times.

Again, the effect of negative news was apparent, and its validity seemingly unimportant as the markets doubled for a reason that was not even relevant or related.

Read it properly

The last bout of misinformation that had its say on the markets came out of India where a simple case of misreading stirred even more panic.

Mainstream media, rushing to get the news out, seemingly misinterpreted a government speech on regulation. The line in question, from finance minister Arun Jaitley, read:

“The government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these crypto assets in financing illegitimate activities or as part of the payments system.”

However, this was then blown up into: “Arun Jaitley has just killed India’s cryptocurrency party,” by a Quartz’s article on the subject.

The line in equation states that the regulators in India are aiming to eliminate the use of cryptocurrencies to fund illegal activities but avoids mentioning the full legality of digital currencies. 

The world needs good news

There can be no doubting the power of persuasion and the extent that bad news can affect a market as speculative as Bitcoin’s. And, to this end, as more bad news, fake, real, old or late, piles on top of an already fragile confidence, the damage gets exaggerated.

Many are hoping for one piece of positivity to right all the wrongs that have been leveled at the digital currency, and for the market to react accordingly. However, what that news could be remains a mystery.

Posted on

Green Light for Crypto: Market Gets Back on Its Feet

For the umpteenth time, Bitcoin was declared dead this week as the cryptocurrency market took a major dive in value. Bitcoin dipped below $10,000 as others followed suit with even bigger drops as the panic spread about a burst bubble.

However, the negative charts across the board took a positive turn as most of the numbers turned green across the major coins. The crypto market has generally been in a downturn since Bitcoin hit the $20,000 mark, but this recent collapse ignited genuine fear and panic.

Bloodbath across the board

As the adage goes, a rising tide floats all boats, and conversely, the same happens when the tide drains. In other words, when Bitcoin is up, many coins follow, but as it has been in the last week, the entire cryptomarket took a hit as Bitcoin led the way in loss of value.

In fact, most of the top 10 cryptos, and the more established and well-known ones fell harder than Bitcoin, leaving nowhere for digital currency investors to flee – other than out.

There was a large outflow of money from the cryptocurrency market in these recent days, with the global cryptocurrency market cap dropping from over $700 bln to $400 bln.

It was rounded out that Bitcoin’s fall – from about $14,000 to just under $10,000 equated to a 30 percent swing, which, looking back in history is relatively normal and expected.

Bitcoin faced three similar, if not bigger drops in 2017:

Disruptive Technology

Bouncing back

While not out of the woods yet, the crypto market definitely looked a lot more optimistic as the floor seemed to be reached and green numbers were showing a turn in fortunes.

The reasoning behind the most recent crash can, to a large part, be put down to the confusion that has been coming from Korea on alleged plans to ban cryptocurrencies in the booming Asian market.

The country’s citizens spoke out recently about these rumors, making their position known with a petition containing 200,000 signatures, demanding the government respond.

Chart

Posted on

Another FUD String to JP Morgan Bow: Governments Will Ban Bitcoin, Mike Bell

In what looks like another well-timed attack out of JP Morgan, another one of their top men have made broad and sweeping statements against cryptocurrencies. Global Market Strategist Mike Bell has said that governments will eventually ban cryptocurrencies.

The market is in a precarious space at the moment as confusion in Korea keeps people on edge with the uncertainty over a supposed ban.

This is not the first time a JP Morgan man has timed its vitriol against Bitcoin in the wake of external factors. CEO Jamie Dimon said Bitcoin was a fraud in the wake of the China ban.

Hinting at a global ban

Speaking to Bloomberg, Bell made some broad statements about Bitcoin and its potential to be a tool for nefarious acts, indicating that for this reason, globally, governments could look to blanket ban the entire market.

“I think that’s the main problem with it. If you’re trying to avoid the government, ultimately it’s under threat from huge regulatory risk because there’s concern around money laundering and everything else.”

“I think there’s a big risk from government’s banning these currencies eventually.”

The globe has already seen some bans being affected by certain nations, none more so than when China made big news with its hardline approach to ICOs and exchanges.

This upsetting of the market was aided by JP Morgan CEO Jamie Dimon leading a tirade against Bitcoin.

At the moment, there is uncertainty in Korea about their stance on Bitcoin, and this new attack by a JP Morgan man seems a little too well timed.

This position is also that of Bitcoin believer John McAfee who tweeted the following:

A global ban?

Even if Korea was to join the likes of China in trying to ban Bitcoin and others in their borders, it does not mean that they will ever really be able to lay the killing blow.

A member of the board of Germany’s Bundesbank Joachim Wuermeling has called for this global front in regulating Bitcoin, but that will always be difficult.

“Effective regulation of virtual currencies would therefore only be achievable through the greatest possible international cooperation because the regulatory power of nation states is obviously limited.”

Fair warning

While it is easy to draw parallels between this FUD and Jamie Dimon’s, Bell did finish with a fair warning to investors.

“I just think that investors should be very cautious looking these cryptocurrencies. You need to distinguish the technology underlying them in Blockchain and these cryptocurrencies which, unless they actually have some claim on a business, and are some kind of equities stake, are for all intents and purposes very hard to value.”

“I think it would be very unwise to put any money that you can’t afford to lose into these currencies.”

Posted on

China: After Banning Exchanges, Authorities Move To Close ‘Exchange-Like Services’

Chinese authorities are quietly stepping up a crackdown on cryptocurrency exchanges to include “market-making” platforms and similar services, according to anonymous sources cited by Bloomberg in an article Monday, Jan. 15.

As attention focuses on South Korea’s regulatory battle with cryptocurrency trading, Bloomberg reports that across the border, where official crypto-to-fiat exchanges have been banned since September, “exchange-like services” are now also on officials’ radar.

According to anonymous sources, the government now “plans to block domestic access to homegrown and offshore platforms that enable centralized trading” while remaining silent on ”how policy makers define such platforms.”

The move is allegedly in response to an “uptick” in trading activity.

Chinese investors have sought to circumvent September’s exchange ban by resorting to alternative trading environments such as peer-to-peer platforms and over-the-counter deals.

Popular peer-to-peer trading site Localbitcoins saw the impact of the ban in numbers as traders piled in, generating record volumes, which in September hit as high as 115 mln yuan ($17.8 mln) per week.

While the sources told Bloomberg that “small peer-to-peer transactions aren’t being targeted,” it remains to be seen whether the Localbitcoins phenomenon forms part of the investigation spectrum.

Meanwhile, with the worst of the turbulence in Seoul apparently over, Bitcoin prices picked up in Monday’s trading, posting daily gains just over 6% according to averaged exchange data from CoinMarketCap.

Posted on

Cryptocurrencies Occupying Minds of Banks and Regulators

With the rise of interest that hit its peak in late 2017 surrounding cryptocurrencies, it was only a matter of time before the regulators and their kin got stuck into the cryptocurrency world. Banks, central banks, regulators and other financial institutes are racking their brains about this phenomenon, and how to approach it.

Regulators, and by association, those in the financial sector, were caught very unaware by the crypto boom in 2017. However, with its adoption and interest at this all-time high, those behind the eight ball have had a chance to catch up.

Going beyond the nascent stage

Bitcoin, despite being over nine years old, can now really count itself out of its nascent stage. It has breached the mainstream barrier for investors – from Wall Street to the everyday man on the street.

Farzam Ehsani, Blockchain lead at Rand Merchant Bank in South Africa, demonstrates this simple by his title within a major bank in the country. He adds that cryptocurrencies will truly “emerge from the nascent stage of being at the fringe.”

“There isn’t any central bank or financial institution that isn’t thinking about this and what it means for the economy,” Ehsani said.

Regulators chance to throw their weight around

Because regulators are now taking Bitcoin and other cryptocurrencies seriously – as a threat or otherwise – as well as looking into Blockchain technology, they will start to flex their muscle.

It has been seen already with a threat coming out of Korea on a crypto ban, which proved to be false, still affecting the market.

Bitcoin is often in the limelight as the most well known and popular cryptocurrency, and thus the one that many regulators set their sights on, but there are over 1,000 others to deal with.

Hard work

Regulators may be mulling over what to do about cryptocurrencies and how to whip them into a shape that suits the traditional financial institutions, but it will be a tough task.

Ehsani expected greater regulation of cryptocurrency exchanges, where buying and selling took place, as well as of the interface between cryptocurrencies and regular fiat currencies. However, it has been more of a case-by-case situation.

A new wave of adoption?

The fact that dinosaur-type institutions have been forced to take cryptocurrencies seriously, even if a little late, is probably a positive in the long run.

It hands legitimacy to the cryptomarket, and despite even the best efforts of regulators, it would seem they cannot kill the entire thing. Regulation has always had a positive side to it and if that is reached the market may stabilize and be less volatile.