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Russia May Legalize Crypto Trading Next Week. BTC May Surge if More Traders Join In

Russia is preparing for a decisive moment in its economy: the possible legalization of crypto trading.

As reported by Ethereum World News on February 27, 2019 Russian President Vladimir Putin ordered that by July 1, 2019, the country’s lawmakers should have ready a set of “Federal laws aimed at the development of the digital economy, including determining the procedure for conducting civil law transactions in electronic form, as well as regulating digital financial assets and attracting financial resources using digital technologies.

Vladimir Putin. President of Russia
Vladimir Putin. President of Russia

According to a report by the Parliamentary Gazette, Russia’s Ministry of Finance and the Russian Central Bank are working on this issue, and already have two draft laws ready and although trading would be legalized, what is still being discussed is the juridical state of possession and use of cryptocurrencies as means of payment since the Central Bank opposes their legalization.

“This rule prohibits barter transactions between legal entities and individuals, the subject of which is the exchange of cryptocurrency. It turns out that the initiative defines the token and cryptocurrency as securities” Said Nina Efimova, senior lecturer at the Department for Legal Regulation of Economic Activities of the Financial University under the Government of the Russian Federation

These laws also loosen the state’s approach to mining. For now, it seems that they will be more permissive with domestic miners who “conduct activities to mine cryptocurrencies that do not fall under the criteria of industrial mining.

Russia May Bring Good News to the Whole Crypto Ecosystem

Eventual legalization of trading could have a positive impact not only on the Russian economy but on the entire ecosystem. Russia is a leading country in Bitcoin trading, however, a strong anti-cryptocurrencies policy has damaged not only the credibility of these technologies but also the motivation of the population to take part in crypto trading.

These laws could be the first step towards a more
crypto-friendly legal framework that introduces more people into the world of
cryptocurrencies, strongly impacting the value of the token by increasing
demand considerably.

The Russian government has issued no major statements, however, the community is in expectation. The volume of trading in rubles has maintained an increasing trend throughout the year, going from 772 Million Rubles to 1.2 Billion Rubles, however, the volume in Bitcoins has decreased, going from 2821 BTC to 1929 so far this year.

Trading Volume in BTC
Volume in BTC
Trading Volumen in Russian Rubles
Volume in Rubles

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All That Glitters is Gold and Bitcoin – Are Central Banks Buying Both?

Gold is at a six-year high ($1,431), bitcoin at a 15-month high ($11,385).

The backdrop to the rise of both is the rising geopolitical tensions and the cheap money policies of central banks that mean you actually pay to lend money to governments these days.

Bitcoin: a 21st century safe haven asset

There are other factors though that don’t figure in the value proposition for both perceived safe haven assets.

On the bitcoin side of the ledger there is the Facebook effect, among other things, as the realisation builds that regardless of what happens with the project, it has let the cat out of the bag. Where Facebook treads many other corporation will tread too.

On the gold side there is the weakening of the dollar of late as investors look to the US Federal Reserve cutting already historically low interest rates.

The gold price has an inverse relationship to the price of the US dollar.

When the dollar falls the price of gold, which is priced in dollars, rises as you can buy more with your non-dollar money which helps booost demand.

But after cancelling those two factors (Facebook and the dollar exchange rate) out of the equation, we are left with the conclusion that the price of the two is related, and the common denominator is geopolitical and economic uncertainty.

Having said that, there is one other key difference between the two commodities – bitcoin has outperformed gold by a considerable margin.

Investors in gold have seen an 11% gain since 1 January 2019, compared to 212% for bitcoin.

Gold bugs push back against bitcoin comparisons

Gold bugs are pushing back though, by dismissing the notion of a digital gold competitor.

Coming to bitcoin’s defence, as always, is Max Keiser who
has long championed the digital currency.

Chairman of SchiffGold, Peter Schiff, says it’s wrong to liken bitcoin to the gold his company sells.

“Both gold and Bitcoin prices have risen recently, causing many to erroneously conclude that the two are rising for the same reason.  But stock and bond prices are also rising.  Bitcoin and stocks are rising as speculative assets, while gold and bonds are rising as safe havens,” says Schiff.

Even if you are doubtful about Keiser’s “end of the world” doomsday scenario for the global economy, he is making a couple of sound points there.

Asset prices – the two biggest of which are bonds and then equities – have seen their prices inflated by the historically novel cheap money policies of the central banks.

It is not an accident that the largest bitcoin market globally is in the US, where fears, rightly or wrongly, about central banks inflating away the value of money, are perhaps highest.

Bitcoin (BTC) and gold’s safety and diversification rationale

Gold and bitcoin are perceived as safe haven plays but not necessarily by the same investors.

However, in some cases it may be a similar type of investor buying in both markets.

The safety and diversification rationale of having a little bit of gold in the portfolio also goes for bitcoin.

Now speculation is beginning to circulate about which central banks will be first to reveal that it has a holding of bitcoin in its digital vault.

Rumours that Russia’s central bank was buying up bitcoin,
based on the sounding off from a Russian professor thought to be close to the
Putin government, proved wide of the mark.

Institutional buyers are driving this bitcoin bull run and possibly central banks driving the gold bull run.

Given that central banks are by far the largest holders of gold bullion, don’t be surprised when we find out that bitcoin is on the balance sheet of a central bank near you.

After all the governor of the Bank of England said the UK central bank was considering holding some crypto.

And for the little people there are number of gold stablecoins to choose from these days as well if you want some of the hard yellow stuff to go with your virtual digital gold.

Iran launched a gold-backed stablecoin back in February as it seeks to combat US economic sanctions.


Which central banks do you think will start buying bitcoin first, or maybe are already buying? Let us know what you think in the comments below

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Bitcoin at $100,000 By End 2021 Says Morgan Creek’s Pompliano

Anthony Pompliano of Morgan Creek Digital is the latest industry notable to call a price target of $100,00 for bitcoin, which he expects to be hit before the end of 2021.

‘The Pomp’, as he is known in crypto circles, correctly predicted that bitcoin would bottom in the $3,000s before rising again.

In his Off
The Chain email newsletter (and podcast)
, he writes:

“This prediction of a ~50% drop in Bitcoin’s price was met with plenty of skepticism, but it ultimately proved to be accurate. Bitcoin proceeded to drop under $3,200 in December 2018 before recovering and shooting past a $10,000 price this past Friday.”

See his tweet below trumpeting his “deadly accurate” prediction for the bitcoin price floor of the bear market.

Now he is targeting $100,000 by end 2021 on the basis of “supply/demand economics”, with demand increasing and supply contracting.

Demand-side pressures “include large scale institutional
adoption, multiple ETF and retail product approvals, increased global
instability, lack of performance in traditional markets, and the continued
manipulation of markets, economies, and currencies by governments around the
world”.

And on the supply side, block rewards are halved in May
2020.

The Pomp assigns a “70-75%” confidence level to his prediction.

And just in case you didn’t know that crypto investing is
risky. The Pomp provides the following reminder of the volatility of the asset
class

“An investment in Bitcoin will deliver approximately a 10x
return if I am correct in my $100,000 price target, while the risk is a
complete loss of invested capital (-1x).”

Bitcoin to add “trillions in value” says Clem Chambers

There is more bullish optimism in evidence on the other side
of the pond.

Bitcoin is set to add “trillions in value” to the global
economy says Clem Chambers, chief executive of Online Blockchain plc, which trades
on London’ Stock Exchange’s Alternative Investment Market.

“This is no difference to the rally and bubble of 2017. In
both cases it is driven by the blockchain revolution set to add trillions in
value to the world economy,” says Chambers.

Bitcoin, traded as high at 11,150 over the weekend, with
multiple analysts predicting the price could reach new all-time highs.

Chambers agrees: “There will be cycles of boom, bubble and
bust and this is another boom/bubble part of that. How high it goes this time
is anyone’s guess but mine is above the previous high.”

Chambers provides some perspective as FOMO threatens to
reappear in the crypto markets:

“The whole cryptocurrency space is still only the size of a
single Nasdaq blue chip so there is a long way to go yet,” he points out.

CNBC Squawk Box anchor Kernen turning into bitcoin (BTC) true believer?

And the crypto penny seems to be dropping in some unexpected
quarters.

Joe Kernen, the anchor of CNBC’s Squawk Box, put it like this in conversation with one of his guests.

Corporation get all the float. Fiat is currency for governments, libra is currency for corporations. Only bitcoin is currency for the people. I’m feeling like an evangelist almost. Who put facebook in charge of giving currency to the rest of the world… who anointed them. That would be the last person I’d give the keys to.

Barry Silbert thinks Kernen might be turning into a believer:

Google Trends shows retail FOMO hasn’t kicked in yet

Coming back to FOMO, its look lie it hasn’t even got started
yet. Worldwide searches for ‘bitcoin’ is at 16, where December 2017, the
all-time high,  is 100.

No retail bitcoin FOMO yet

Driving the market higher are people already in the know who
had perhaps been sitting out the crypto winter.

Loose money helping bitcoin

Trace Mayer, a crypto podcaster with 58,000 followers, has posted an interesting chart showing the correlation with the bitcoin price and the US Treasury 10-Year note (inverted). See below.

He succinctly highlights one of the macros that has been
cementing the bullish sentiment in the market even before Facebook turned up.

The central bankers are looking into a future that may
produce a global recession in a year or two, or even sooner if the trader war
goes full on and world trade contracts accordingly.

In Europe investors are effectively paying governments to
buy their debt (negative interest rate).

Whether mainstream investors are sold on bitcoin is a mute point but an increasing number perhaps are, or will be.

“With $gold & $BTC rallies, perhaps look at $USD’s problems like yield curve, interest rate, trade wars, tariffs, etc. Plus, Chinese bank failures, negative yielding Euro debt & emerging markets getting whacked.#Bitcoin perfectly designed for this environment,” tweets Mayer.

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A Religious Leader of One of The Largest Christian Cults in Latin America is Linked to a Possible Crypto Ponzi Scheme

Bitcoin has already crossed paths with religion, and this is not good news. The Universal Church of the Kingdom of God (IURD by its Spanish acronym or UCKG in english) has been linked with AirBit Global, an organization that has been labeled as a Crypto Ponzi scheme upon which there are several complaints.

According to an extensive report published by the Brazilian portal The Intercept, the founder of AirBit Club Brasil (the Brazilian branch of AirBit Global) is linked to the Universal Church of the Kingdom of God and used his influence among the faithful to promote his project for several years.

A Story That Brings Together Religion, Economics and Law

The Universal Church of the Kingdom of God was founded in 1977 by Edir Macedo, a former lottery cashier from the state of Rio de Janeiro. After almost 3 decades, the Church was so successful that today it is one of the largest Pentecostal cults in Latin America and Macedo’s fortune amounted to 1.1 Bn USD according to Forbes.

The Universal Church of the Kingdom of God (UCKG) is no stranger to controversy. Despite its rapid growth and the commitment of its members, this religious organization has been involved in many scandals, both legal and religious.

Due to its practices, the Church was expelled from the Portuguese Evangelical Alliance in 1992, a decision similar to the one taken by its homologue Peruvian organization. However, in Belgium, the Chamber of Representatives cataloged this organization as a Cult commenting that “(The UCKG) is apparently a truly criminal association, whose only purpose is enrichment”. After a strong controversy, the legislative body revised its wording. Likewise, in 2014 the church was sanctioned in Madagascar for being considered a cult without permission to operate as an actual church.

Crypto Meets God

The research revealed that Gabriel Fonseca Reis, founder of AirBit Club Brasil, put himself among the members of the congregation as an example of success and prosperity thanks to crypto trading. This image was strongly promoted in different events of the church such as interviews, congresses, and public activities.

Fonseca Reis has leadership roles within the Church, even traveling around the world spreading the church’s message and “saving souls” as he said. In an article published on the official UCKG’s website, they portray a Fonseca who went from poor to rich. “Something that helped me a lot was that I already took part in the corporate meetings at Universal (Church of the Kingdom of God), which were broadening my vision and helping me not to be afraid of failure. I realized that the same faith that healed me could also be used to prosper” says Fonseca as a prelude to an invitation to the Church’s Congress for Success.

Screenshot of the Church's official Website. On it, Fonseca appears with the AirBit Club Website shown on the back. AirBit is being investigated after several accusations of being a crypto scam
Screenshot of the Church’s official Website. On it, Fonseca appears with the AirBit Club Website shown on the back

Fonseca has promoted AirBit in many countries, including Brazil, Portugal, Switzerland, Mexico, mentioning that Bitcoin (BTC) has been nominated for the Nobel Prize in Economics, both in 2015 and 2016 (yes… for real). Also, he promises daily profits to those investing.

AirBit has been cataloged as a dangerous business. In Colombia, the Superintendence of Finance issued a Communication explaining that although crypto trading is not regulated by the country, “what could be considered an illegal fundraising activity is the promotion of this business under pyramid schemes where returns are guaranteed for the fact of investing in cryptocurrencies with the commitment to link more people who also link to others who bring contributions that are ultimately the only source of payment of the benefits that the platform or the person promises”.

Scam Bitcoin labeled AirBit as “a viral pyramid and Ponzi scheme hybrid.” Also, the Brazilian website “Reclame aquí” has 31 complains against AirBit.

Other experiences don’t seem to be very pleasant either: “Yes, I am invested in Airbit Club,” a user told to CrDaily “The only way you can make money is by recruiting and screwing over other unsuspecting souls.”

On its main page, the organizers explain that AirBit is a “Blockchain Distributed Technology and Affiliate program, which is based on an algorithm that distributes fair referral commissions to all members.” They currently have over 2.5 million affiliates, according to company data.

The platform offers memberships that range from $1,000 to $7,000 for the initial packages (then there are other membership levels which do not show the amount of money required to be purchased). They offer profits for non-specific investments, and for attracting new members to the scheme. Likewise, it has not been possible to find any registration data of this organization or any legal representative at least.

The high price of these "packs" and the exceptionally high promised ROI is a sign of a possible crypto scam
Some of the “Memberships” offered by AirBit Club

At first sight, AirBit could raise several of the “red flags” described by the SEC in a guide to identify crypto – related Ponzi Schemes: It offers consistently high returns, has no license, relies on affiliates and referrals, is not registered nor licensed, does not provide clear information on trading strategies and does not require more qualification to invest than the fact of having money.

This Modus operandi resembles that of the infamous OneCoin, a project that offers memberships and educational packages with prices ranging from 100 to over 55K Euros – which is currently being investigated for causing nearly 4 Billion dollars in damages to investors.

Some of the offers from OneCoin. A crypto related project which is being investigated for scam allegations
Screenshot of OneCoin’s website

Gabriel Fonseca Reis entered the world of MLM at the age of 17 with Multiclick Brasil. There he shared his skills in a promotional video explaining how he purchased a BMW after four months of being involved in the business.

When Multiclick Brasil was blocked by the Public Prosecutor’s Office of Santa Catarina for being a pyramid scheme that defrauded more than 300,000 people, Fonseca migrated to AirBit.

Are Religious People Easy to Manipulate?

Many times, religious cults, Ponzi schemes and MLM programs resort to similar tactics. Leaving aside the discussion of whether the intentions are legitimate or not, the basic strategy aims to generate an extreme, almost tribal empathy that leads the members of the organization to trust blindly in the proposals and ideas shared by their leaders.

 Marshall Applewhite, founder of Heaven’s Gate conviced 39 followers to commit suicide in 1997

According to the Humanist Association of Toronto “sometimes it’s important to note that religion; less an intellectual, moral guide … is merely a class-based tribal identity, useful for selling insurance, finding a business partner (etc)”. This perspective is worrying, especially when, beyond the use of crypto, other fraudsters have taken advantage of the ingenuity of religious believers to trick them.

“The underlying issue, I think, is the question of mutual trust,” Nancy Ammerman, a Boston University professor of religion and sociology said to Christian Century. “These schemes rely on and exploit that trust, and people within religious communities tend to have high levels of trust for others within their community.”

The Intercept attempted to contact the people under investigation. The Church denied any participation in the scheme, asserting that Gabriel Fonseca Reis is just another member of its congregation. Both AirBitClub and the UCKG refused speaking with Ethereum World News.

The best decision you could make before investing in crypto is to educate yourself and have a healthy dose of objectivity and common sense. When something is too good to be true, it usually is questionable; and only God will be able to help you if you are involved in a scam by the time it comes out.

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Bitcoin (BTC) at $10,000 Coming Into View, Binance (BNB) Recovering, Ripple XRP First Facebook Libra Victim

Bitcoin (BTC) had a burst energy – jumping $200 yesterday – with altcoins falling. Currently priced at $8,654, the bitcoin has returned to prices last seen 10 days ago.

While stellar performer Litecoin (LTC), touched a 13-month
high at $142, it succumbed to buying pressure along with most other top altcoins.
The fourth-placed asset is currently trading at $135, 16% higher on the week.

This sort of see-sawing with bitcoin the beneficiary is
behaviour that was a noted feature of the previous bull market and seems to be
with us.

Such trading is sometimes followed by catch-up buying by alts
with a pause for bitcoin, which seems to be where we are today.

Binance Coin (BNB) hit as US regulator gets in the way

A relative underperformer was Binance Coin (BNB).

The price had been falling since the announcement a couple of days ago that it would be shutting down its current exchange but is recovering at the time of writing, up 4% to 33.19 in the past 24 hours.

The price fell from $35.74 on 13 June to a week low of $31.12,
a near 13% drop.

The bleeding was staunched as it became clearer what Binance’s
plans were. Indeed, it may have got some belated credit for adopting a pro-active
stance. It plans to open a new exchange specifically for the US market.

Bittrex has done something similar, this time by removing certain tokens from the purview of its US customers, with the most high-profile of the delisted toekns being the Singapore-based Qtum dapp platform.

Both exchanges’ moves are in response to the US regulator
taking Kik to court for running what it claims was an unregistered securities
sale in its 2017 KIN token ICO sale.

Given that the US the largest crypto market, American
investors selling out of tokens could be leading to forced bitcoin buying, given
it is the most popular asset on the other side of trading pairs.

Bitcoin is also seen as the best store of value, and is
currently preferable to exiting the market by going into a stablecoin.

Ripple’s XRP a Facebook Libra coin loser?

Before returning to bitcoin, we should note the dispiriting situation with the XRP price, down 3% in the past 24 hours at $0.405.

Although most analysts see at minimum a positive halo effect for the crypto market as a whole from Facebook’s cryptocurrency effort, it’s a difference story where Ripple’s XRP is concerned.

Facebook’s Libra coin could be an XRP killer as it threatens to go after the remittance market that XRP is also targeting. Sure, Ripple is also going after the cross-border financial transactions of banks and other corporations, but here it is pressure from banks doing their own thing – think JPMCoin – that may be narrowing that opportunity too.

The Block has got hold of the full list of Facebook’s Libra partners – eBay, Spotify, Lyft and Xapo are some of the names that you may not have known about. More analysis on this in a coming EWN story.

Bitcoin (BTC) price analysis

So, back to bitcoin, what to make of the prospects for
holding at current levels and rising further?

With the relative strength index (RSI) at 61.5 we are a
little way off overbought territory, but declining trading volumes on the
one-day chart mean is a danger sign seen in the rally since early May.

But that’s far from the end of the story.

Volume profile is a key indicator

Staying with the one-day chart the volume profile adds
important detail to the picture.

Unlike the volume data that runs along the horizontal axis
of the chart and is often cited in technical analysis, if you want a surer
footing on where support and resistance levels are, volume profiles are
invaluable as they show the volume at particular price points.

I’ll be using them a lot going forward to provide EWN’s
readers with even better price analysis.

The point of control (red line, showing the price point that attracted the most trading interest; mustard shading shows falling value area and blue the rising value) is clearly showing fair value at $3,767 on a year view, near the market bottom at circa $3,200.

(chart courtesy TradingView)

Strong bitcoin trading interest at $6,414 and $7,932

But we are interested in the next two volume profile
histogram bulges, at $6,414 and another cluster at $7,932.

The first of those shows strong volume at around $6,400
coinciding with the huge parabola in the march from $5,650 to $8,155. That
provides firm support, with buying interest growing.

However, the next volume profile bulge, which shows the third
busiest period of trading for the year, is slightly more problematic for those with
a bias to a bullish prognosis. It shows sellers and buyers initially balanced
but with sellers starting to nudge out buyers at those price points.

But the bullish trend line has not been broken, so makes the
breakout above $8,200 look firmer.

Bitcoin at $10,000 coming into view

Then we come to the shaded light blue area which is an area
of resistance, the top of which can be drawn from the March 2018 price at $11,459.
The lower part of the band  is the July
2018 high at $8,600 , that roughly lines up with where we are now.

But there is an undoubted weakening of interest seen in the
volume profile as the price moves through the gears to $10,000, with a
significant fall-off above $11,400.

That doesn’t mean that $10,000 is not attainable but rather
that the price could get there very quickly indeed.

We might also infer that above $10,000 it is retail buying
that starts to pick up, with institutional buying seen in our three previously identified
volume profile bell curves.

Finally, volume profile by session volume provides a clearer
view of possible support and resistance when it is extended to the right (red
lines).

There’s plenty of support below current price levels – between $8,100 and $7,700.

(chart courtesy TradingView)

Gary is the cryptocurrency analyst at interactive investor, the UK’s second-largest investment platform and his contributions are written in a personal capacity.

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How Facebook Globalcoin Will Make Private Money Work After Hiring Bank Lobbying Supremo

Facebook Globalcoin

With the Facebook Libra / Globalcoin set to launch as soon as Tuesday 18 June and news that the social media giant has just hired a Standard Chartered bank lobbying supremo, interest is reaching fever pitch.

Some have questioned why Facebook is launching a crypto
product at all, while others says it will probably not be a “real” crypto.

But both of those viewpoints miss the real import of what Mark
Zuckerberg is up to.

From Cincinnati Time Store to Bitcoin to Facebook Libra Coin

Before the invention of bitcoin – and its necessary
precursor the internet – the possibility of sustaining a private money form was
limited, and not just by states that jealously guard their monopoly over the
money supply.

A brief glance at the various utopian schemes proffered in
the US in the early nineteenth century, before industrial capitalism had a sure
footing, provides legion examples of the difficulties.

Chief among them was the Cincinnati Time Store venture EWN covered a few months back, that lasted three years and was a success in the localities in which it operated.

Let’s not delve further into the radical anarcho Ricardian
roots of the ideas of Josiah Warren (the time in question was labour time), but
instead home in on its inability to roll out its local success at national
scale.

Its national scale was a part of the secret of the success
of the US as the economic powerhouse it is today – the lack of regulatory
frictions, notwithstanding state laws, provided an accessible home market. But
things were not so straightforward for money.

Many banks competed with issuing their own paper bills (of
exchange) but none held national sway.

Warren’s scheme could not escape the same parochialism borne
of technological limitation. In Warren’s day there was no way to effect a
one-to-many relationship in the fashion of the 21st century
internet.

There were many competing forms of money in the US at the
time, which was partly because of the vast distances that made interconnectedness
before the telegraph and the railway impossible at any faster rate than the
horse.

Facebook Libra coin’s universality

In addition to well-attested properties that money must have
to fulfil its necessary function as a standard of measure, means of exchange
and store of value, there is one that tends to be overlooked or at any rate
subsumed in the others.

Alongside acceptance (trust), portability and divisibility, is
an underlying assumption that the functionality money delivers will be applicable
to the entire universe of all exchange values.

The Cincinnati Time Stores needed a national network that
was available to all – or a large majority – of consumers and producers for it
to establish a hegemonic presence. That was technically not possible; no matter
how much loved the stores may have been in Cincinnati, their impact was
limited.

There was no point in a merchant or service provider marking
up prices in labour-time expended in the production of a good or fulfilment of
a service if there was no market in which such a standard was used. Similarly,
there was no incentive to accept the stores’ notes.

A Facebook global coin makes 21st century private money easy

Enter Facebook’s Libra coin, although the name that was
previously doing the rounds – Globalcoin – illustrates our universality imperative
much better.

Facebook, as the world’s most pervasive social network, is,
privacy doubts aside, the most perfectly suited issuer of private money in the
21st century.

Unlike the Cincinnati Time Store Facebook has the ability to
launch its money simultaneously everywhere if it so wishes. Even if it chooses
a staggered rollout, this potential of universality would still work its magic,
forcing others to respond to its gravitational force.

That’s why it has been so easy for Facebook to do deals (to be
precise, bring in as members of the “independent” foundation governing the
Libra coin) with supposed payment rivals such as PayPal, Visa and Mastercard.
It’s why it has been able to bring service providers such as Uber on board to
accept its private money.

It’s why, after its discussions with the US Treasury and the
governor of the Bank of England, it is presumably fairly confident that it will
be able to comply with regulations, such as they are.

FATF finalises recommendation on global crypto on 21 June –  is Facebook Globalcoin launch timed wrong?

However, we should add a caveat, or at least further
explanation, on the regulation issue.

The Facebook Libracoin/Globalcoin whitepaper is set for release three days before the Financial Action Task Force (FATF) finalises its recommendations for what it calls virtual asset service providers (VASPs) on 21 June.

Facebook is well aware of the impending global crypto
regulations rollout and knows that each jurisdiction will interpret the rules
differently. But its strategy is unlikely to be to play one country’s
regulators off against another, in a sort of whack-a-mole play.

Alternatively, Facebook may seek to argue for laxer
regulations for the unbanked and those not seeking to interact directly with
the fiat financial system – users may be granted a certain amount of currency
or could earn it through various activities such as watching video adverts.

The FATF recommendations as they relate to crypto have been finalised with one exception and this is it: the all-important paragraph 7b, with the salient part highlighted below:

7 (b) R.16 – Countries
should ensure that originating VASPs obtain and hold required and accurate
originator information and required beneficiary information on virtual asset
transfers, submit the above information to beneficiary VASPs and counterparts
(if any), and make it available on request to appropriate authorities.
It
is not necessary for this information to be attached directly to virtual asset
transfers. Countries should ensure that
beneficiary VASPs obtain and hold required originator information and required
and accurate beneficiary information on virtual asset transfers, and make it
available on request to appropriate authorities.
Other requirements of R.16
(including monitoring of the availability of information, and taking freezing
action and prohibiting transactions with designated persons and entities) apply
on the same basis as set out in R.16

It is likely that Facebook is pre-empting this by building
in the necessary “bank wire level” reporting compliance.

To do that it will have to introduce KYC/AML onboarding for
existing Facebook/WhatsApp/Instagram/Messenger customers to gain access to the
Libra Coin.

But to get traction with such an approach means we come back
to the problem of trust, but given that people provide their details to
merchants of all types on the internet and Facebook’s reported partnerships
with existing players, at least partly with an eye to ameliorating such
concerns, this is not necessarily the insurmountable barrier it might appear at
first sight to the social network’s payment and marketplace ambitions.

Facebook’s Project Libra know what regs are coming, or are pre-empting

Alternatively, Facebook, if it hasn’t factored in the
unknown regarding which direction the FATF will move in on paragraph 7b next
Friday, then it would be wise to wait until that is clear.

That’s unlikely to happen at this late stage which does
suggest Facebook knows what’s coming down the line.

And the news today, reported by the Financial Times, that Facebook has hired Standard Chartered’s head of corporate and public affairs, Ed Bowles, to be its director of public policy, suggests it is preparing in advance for the regulatory tussles to come.

Facebook, some existing regulated firms and cryptocurrency industry main beneficiaries

Actually, Facebook would probably be a beneficiary of new
expensive regulatory hurdles to entry, as would existing regulated VASPs and
non-crypto financial services companies.

But these are really side issues. Facebook’s global reach
means its coin will have the universality and the convenience that comes with it.
That will likely trump trust fears for many consumers, if not for government regulators
concerned about privacy and monopoly practices.

The banks and regulators are behind the curve and Facebook
and those crypto firms that can navigate the new regulations will be the winners.

Bitcoin – the one coin to rule them all

So too will bitcoin (if not XRP) and other decentralised (mined) digital currencies that can operate independently of states, even if on and off ramps become policed more vigorously – market activity will simply be transferred to over-the-counter trading.

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Bitcoin ATM Spotted Spitting Out Money in London

A
few days ago Londoners witnessed a bizarre movie-worthy scene: A
Bitcoin ATM suddenly started spitting bills non-stop in a shopping
center.

Several people were able to record the odd event and share it on Reddit. On the footage, a security guard protects the machine from the curious people who saw the scene. None of them (at least as far as one can see in the video) tried to take a bill.

The
cashier was spitting out money for several minutes, which is why
several people speculated that it was not a malfunction but rather a
hack. The methodology, known as “jackpotting” basically
allows the hacker to operate the ATM remotely making it spit out
money on command.

If true, the perpetrator could be facing criminal charges.

Bitcoin ATM Operator: “It Was Not a Hack”

Shitcoins Club, a polish company that owns more than 60 Crypto ATMs distributed all over Europe, managed the Bitcoin ATM.

In statements to The Next Web, Shitcoins Club denied that it was a hack and commented that from their point of view everything was a trick to give the illusion that the ATM went crazy:

“Everything was going well during this transaction … As you can see there is a bag in front of the ATM.”

In fact, in a Reddit post, a spokesperson said that anyone can see the location and funds availability of each of their ATMs, so it was easy to withdraw such a large amount of money (as long as the necessary funds were available).

“Our ATMs are the only ones in UK which can handle large cash withdrawals. On our website shitcoins.club on the “locations” tab, you can find out exactly how much GBP ready to withdraw holds each of our ATMs. The ATM at Bond Street Station (West One Shopping Centre), has at the moment 30,000 pounds which can be withdrawn immediately, in exchange for BTC, LTC or DASH. Our ATMs are usually topped up to 20 000 pounds.”

So everyone is free to draw their own conclusions. Maybe it was all the work of a skillful hacker who somehow wanted to generate a negative image of Bitcoin ATMs or maybe it was all the work of a troll who wanted to make a joke by daring to lose his money at the hands of a crowd that one can never know for sure how will react before the opportunity to have free money.

Either way, cthe rypto-verse is one weird place to be sometimes

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Bitcoin (BTC) Can Reach 40,000 USD in 5 Months After Breaking The Resistance Set At 10,000 USD, Tom Lee Says

Tom
Lee remains bullish and does not stop sharing his optimistic vision
about the future of Bitcoin. In a recent interview with Binance CFO,
Wei Zhou for the exchange’s official podcast, the founder of
Fundstrat Global Advisors once again gave one of his famous bullish
predictions – perhaps the most optimistic of all:

For the well-known financial analyst, if Bitcoin achieves enough
momentum, the Bullrun could catapult it at prices higher than those
recorded during 2017:

“I think FOMO really gets triggered once Bitcoin hits 10,000 so going from 10,000 to 20,000 is gonna be fast and furious”

The analyst explains that this price increase would be quite accelerated, which corresponds to the “typical” behavior of these markets. For Lee, in less than a semester, BTC could go from $10,000 to $40,000, as long as it manages to break the historical resistance around 10,000 USD:

“If bitcoin somehow manages to get to [$10,000], it’s very likely going to make a run to $40,000 within five months.

Lee told Wei that the crypto-market begins to gain hype when prices
reach levels that have rarely been experienced (about 3% of past
cycles). 

Currently, the price that best fits this rule is $10,000. In the entire history of Bitcoin, it was traded above this line for 87 days, which fits within the range established by Mr. Lee.

The line turns green when Bitcoin (BTC) is traded at 10,000 USD or higher
The line turns green when Bitcoin (BTC) is traded at 10,000 USD or higher

Mr. Lee is known for his hyper-bullish stance, yet he has always supported his arguments despite failing in his guesses. During 2018 he had to reconsider his forecasts, lowering the price he gave to Bitcoin at the end of the year. Finally, he ended up tweeting that he would temporarily suspend predictions related to the price of Bitcoin.

Other analysts, however, do share Lee’s vision. However, rather than relying on technical analysis, most believe on fundamentals. Max Keiser, Tim Draper, Mike Novogratz and the Winklevoss brothers -to name a few- believe that Bitcoin will replace gold -or at least will become a major competitor in the upcoming years.

Currently, BTC is being traded at around 7600 USD. After a strong
rise that led it to almost 9000 USD, an alleged manipulation of
prices resulting from a massive movement of tokens caused a sharp
drop of more than 1000 USD.

Full interview available here:

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Bitcoin Was Never Cypherpunk, and Satoshi Nakamoto was Never Meant to Be Anonymous, Craig Wright Says

Craig Wright is determined to make the world accept him as the creator of Bitcoin and the man behind the identity of Satoshi Nakamoto. But instead of signing the genesis block (something the community has agreed to accept as irrefutable proof of his identity) he thought it would be better to write a post removing the cypherpunk roots from its creation

BSV: The BCH fork promoted by Craig Wright as the Original Bitcoin (instead of BTC)

In an article published on his official website, Wright says he emailed Gavin Andresen in 2011 explaining that Bitcoin was never a cypherpunk thing and he did not support (and in fact was the opposite of) those who professed this philosophy:

“Bitcoin was never a cypherpunk experiment.
I left the Cypherpunks mailing list in the ’90s because I couldn’t stand people like Julian Assange. I couldn’t stand what some of the people there stood for. I was the opposite of many others on the cryptography mailing list. Even those people I liked, such as Tim May, held concepts that I could not stand.”

This is quite odd since Satoshi Nakamoto shared his creation precisely with the cypherpunk community that interacted in the metzdown mailing list

Moreover, although Wright did not support these guys, the cypherpunk philosophy – summarized in the Cypherpunk’s Manifesto – is very similar not only to the idea explained in the Bitcoin Whitepaper but also to the way of thinking Satoshi reflected in the early days of Bitcoin:

Privacy is necessary for an open society in the electronic age. Privacy is not secrecy. A private matter is something one doesn’t want the to know, but a secret matter is something one to know. Privacy is the power oneself to the world …

Privacy in an open society requires anonymous transaction systems. Until now, cash has been the primary such system … We cannot expect governments, corporations, or other large, faceless organizations to grant us privacy out of their beneficence.

And although Satoshi Nakamoto never shared his identity, never used his real name and never provided any personal information, Wright says to Gavin he “didn’t want to be a shadowy figure, such was never the intent of Bitcoin.”

In the end, anyone who has faith in Craig is free to believe he is Satoshi Nakamoto, and anyone who wants to believe that Bitcoin was an experiment to create a centralized, government-controlled, fully regulated transaction system is also free to believe it.

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Brazil: “I Don’t Know What Bitcoin is,” Says President Jair Bolsonaro, Days After Saying He Doesn’t Understand Economics

The president of Brazil, Jair Bolsonaro, said in an interview with Ratinho’s SBT show on June 4, 2019, that he doesn’t know what Bitcoin is, despite the hype that Bitcoin is causing in the country, aphenomenon that has been increasing over the past few years.

Rio de Janeiro, Brazil
Rio de Janeiro, Brazil

The president’s statements came as he explained why he shut down a project of $11.5 million to promote a crypto currency for indigenous communities.

Jair Bolsonaro explained that the National Indian Foundation (FUNAI) and the Federal Fluminense University (UFF), “wanted to teach the Indian to use bitcoin,” which he believes to be wrong. When asked by a member of the public if he even knew what Bitcoin was, the president responded:

“I do not know what Bitcoin is.”

Jair Bolsonaro is known for his denigrating statements, which have made him highly popular in Brazil’s extreme right-wing sectors.

A Cryptocurrency for Native Tribes? No Way!

The decision to suspend FUNAI’s project was predictable. The Brazilian president once told Correio Braziliense that it was a pity that the Brazilian Indians had not been exterminated as they were in the United States:

“It’s a shame that the Brazilian cavalry hasn’t been as efficient as the Americans, who exterminated the Indians.

In more recent statements, Bolsonaro showed an anti-indigenous stance, explaining that once in the presidency he would be in charge of undermining FUNAI’s existence, affecting its efforts to promote the use of cryptocurrencies amongs brazilian native tribes:

“If I’m elected, I’ll serve a blow to FUNAI; a blow to the neck. There’s no other way. It’s not useful anymore”

The project promoted by FUNAI and the UFF had been suspended due to possible legal problems. The government considered that the lack of a legal bidding process undermined the legality of the contract, for which it was considered inappropriate.

If Not Knowing About Bitcoin Seems Bad for a President, What About Not Knowing About Economics?

This is not the first time that Bolsonaro has acknowledged his ignorance. Recently , while announcing the slump in Brazil’s GDP, he explained to the audience that he was not to blame for this disaster: The excuse? he previously warned people that he did not understand economics:

“I already said I didn’t understand economics. The one who understood it drowned Brazil. I trust 100% in the economy of Paulo Guedes”.

So far neither FUNAI nor the UFF has provided any comments regarding the possibility of promoting a crypto without the government’s endorsement.

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