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Justin Sun Posts Video From San Francisco Following Investigation Reports

Justin Sun has posted a video from San Francisco to disprove reports that he was prevented from leaving China due to an ongoing investigation.

Tron founder Justin Sun broadcast a live video from San Francisco to disprove reports that he was prevented from leaving China due to a police investigation.

On July 23, Sun launched a live video on Twitter to deny rumors that he was prevented from leaving China by local authorities based on charges of money laundering, gambling and spreading pornography.

Additionally, Sun posted a picture with him and his “aka bodyguard” Cliff Edwards, the Tron director of communications, with the Bay Bridge in the background.

Justin Sun and Cliff Edwards in San Francisco

Justin Sun and Cliff Edwards in San Francisco. Source: Twitter

Earlier today, local Chinese media outlet Caixin reported that the Office of the Leading Group for the Special Campaign Against Internet Financial Risks called on security organs to launch an investigation into Sun. Per Caixin, Chinese law states that individuals under investigation can be prevented from leaving the country for one month to one year. The report states that, at the time of writing, Sun’s whereabouts were unclear.

Investigation reports follow postponement of Sun’s lunch with Warren Buffett

The report follows an announcement that Sun is rescheduling the long-discussed charity lunch with Berkshire Hathaway CEO and renowned investor Warren Buffett. According to a Tron Foundation tweet on July 22, the relevant parties agreed to reschedule the meeting at a later date as Sun had purportedly fallen ill with kidney stones.

The postponement came just a few days after Sun invited more notable figures from the crypto industry to attend the lunch with Buffett, including eToro founder Yoni Assia, the head of Binance Charity Fund Helen Hai, as well as Jeremy Allaire, the CEO of crypto payments firm Circle.

Tron price slightly recovers after Sun goes live on Twitter

Meanwhile, the Tron (TRX) price has reacted positively to the news, seeing a slight recovery after a major decline caused by the Chinese media reports. At press time, Tron is up about 2.27% over the past hour, while still seeing losses of over 13% on the day. 

Tron 24-hour price chart

Tron 24-hour price chart. Source: Coin360

Earlier in July, the offices of a Tron affiliate in Beijing were surrounded by police as a crowd gathered to protest against a Chinese Ponzi scheme that operated under a Tron-like name.

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Bitcoin Is Property, Chinese Court Rules — No Crypto Ban Contradiction

Bitcoin has been legally recognized as virtual property by a Chinese court not the country, though…

Last week, Bitcoin (BTC) was legally recognized by a Chinese court, whereby it was concluded that the cryptocurrency should now be considered as digital property. The decision that the Hangzhou Internet Court made in a ruling was met with enthusiasm from some community members, who assumed that Bitcoin is now legal in the People’s Republic of China (PRC) — famously one of the harshest jurisdictions for digital currencies in the world — and that the local government might soon ease its pressure on Bitcoin. However, some experts are less confident to call it a regulatory thaw. 

Brief introduction to China’s relationship with crypto

China is a key player in the crypto space, hosting a substantial share of Bitcoin mining and trading. According to a late 2018 study, around 60% of BTC’s total hash power is generated in China, while unregulated domestic cryptocurrency exchanges facilitate 60% of all global trading of the stablecoin Tether (USDT), as another study indicates.

Despite such high numbers, the Chinese crypto industry has been significantly constrained as a result of regulatory suppression. In September 2017, domestic authorities banned local exchanges and initial coin offerings (ICOs) from operating. As a result of the crackdown, people in China can hold cryptocurrencies but cannot legally exchange them for fiat money via trading platforms. However, according to Jehan Chu, co-founder of Kenetic Capital, there is a small regulatory loophole: The ban does not directly forbid people from exchanging cryptocurrencies among each other. Chu told Cointelegraph:

“While exchanges and companies that are trading Bitcoin have been banned in China personal ownership and exchange has not been ruled illegal. This has left space for individual ownership while institutional Chinese trade has moved offshore, but intact.”

Ashley Tian, senior legal manager at Ecovis R&G Consulting Ltd., confirmed that peer-to-peer trading remains legal. “Please note that the purchase, sales or hold of cryptocurrency itself does not violate any Chinese law,” she told Cointelegraph in an email. Tian stressed that local people have to use foreign exchanges to purchase digital currencies but also notify local regulators of their investments and pay taxes.

Meanwhile, there have been reports from China suggesting that the 2017 ban could be extended to other crypto-related spheres — namely, mining and marketing. Thus, earlier this year, news surfaced that a local government agency is considering prohibiting crypto mining in the country, while it has been reported that isolated districts in Beijing have prohibited all commercial venues from hosting any cryptocurrency-related event.

Notably, while cryptocurrencies have been subject to harsh regulatory scrutiny in China, Bitcoin’s underlying technology is a national priority for the country’s government. President Xi Jinping has even referred to blockchain as a technological breakthrough, while the city of Hangzhou, the capital of east China’s Zhejiang province, hosts the Blockchain Industrial Park, a partly state-sponsored hub for blockchain development.

The Hangzhou ruling: bullish or neutral?

On July 18, the Hangzhou Internet Court, situated in the same city that houses the Blockchain Industry Park, was overseeing a dispute between a now-defunct exchange and one of its users, identified as Wu. 

As local media reports, in 2013, Wu purchased 2.675 BTC for 20,000 RMB (around $2,900) from a platform called FXBTC via a store on online marketplace Taobao and stored them in a digital wallet on its website. According to the plaintiff, in May 2017, he tried to access his funds but discovered that the FXBTC’s website shut down back in 2014. Wu was unable to contact the platform’s administration and hence couldn’t retrieve his Bitcoin holdings.

Wu then filed a lawsuit against FXBTC, who allegedly did not give any notice prior to closing the platform. He also sued Taobao for allowing “banned items like cryptocurrency” to be listed on its market — even though Bitcoin trading in China was banned later in 2017. Wu demanded FXBTC and Taobao to pay around 76,300 RMB ($11,000) in compensation.

Although the bench rejected the plaintiff’s claims against FXBTC and Taobao due to a lack of evidence, it acknowledged Bitcoin as a commodity because it carries value, is scarce and can be used as a means of transferring value. However, digital currencies such as Bitcoin “do not have the legality of an official currency,” the Hangzhou Internet Court specified.

“For the Chinese who purchase the cryptocurrency in legal means, it shall be the lawful property protected by PRC civil laws,” Tian commented on the court’s decision for Cointelegraph. Notably, the People’s Bank of China (PBoC) — the central regulatory authority that oversees financial institutions in the country, which essentially instituted the 2017 crypto ban — has since confirmed the ruling. “Indeed, Bitcoin is virtual property, but it’s not fiat money,” an official from the PBoC is quoted saying in an article published by the Global Times, a local English-language newspaper. 

Dovey Wan, founding partner at Primitive Ventures, who broke the news to the English-speaking part of the crypto community on Twitter, believes that the case marks a milestone for crypto regulation in China. She wrote in an email conversation with Cointelegraph:

“This ruling is from Hangzhou Internet court, not a court from random tier 3 cities, and it’s one of the three dedicated internet/cyber court in China. Since it’s the first one it actually set a narrative precedent for further cases around Bitcoin.”

Wan further suggested that the court wouldn’t be able to make this decision if the general perception of Bitcoin by the PBoC and the ruling party was negative, which could be seen as a political shift toward recognizing cryptocurrencies. Likewise, Chu believes that the court’s decision “sets a precedent for future development and easing of China’s cryptocurrency laws” — if not juridically, then at least socially. He told Cointelegraph:

“Similar to a circuit court in the United States, this local ruling will not mandate national law but sets stage and points the way. More importantly, this ruling massively influences public opinion and normalizes ownership of Bitcoin in the court of public opinion.”

Some experts, like decentralized cloud computing network Aelf’s co-founder, Chen Zhuling, disagree that the ruling marks any significant change, however. Zhiling told Cointelegraph:

“I personally do not think this is any major change in policies towards Bitcoin in China. It is a regional police case which I have not seen much coverage in traditional media in China except in the Crypto space. Of course there is a chance that this case can be used as a precedence in future cases to defend that Bitcoin is a virtual property, but I believe Chinese legislation is still quite top-down. In addition, it does not make ‘Bitcoin mining’ or ‘Bitcoin trading’ legal at all. As far as I understood, local authorities are still cracking down Bitcoin mining farms across the country.”

Indeed, in October 2018, the Shenzhen Court of International Arbitration also ruled that cryptocurrencies such as Bitcoin are legally protected as property while reviewing an analogous dispute, in which the defendant failed to return holdings of Bitcoin, Bitcoin Cash (BCH) and Bitcoin Diamond (BCD), per a contractual agreement. The news was similarly received in the crypto-focused media as bullish, but the decree ultimately has not changed the regulatory situation in China. At the time, the arbitrator found that the contractual obligation under dispute did not fall under the relevant provisions as outlined in the 2017 prohibition. He declared:

“There is no law or regulation that explicitly prohibits parties from holding Bitcoin or private transactions in Bitcoin, but rather reminds the public about the investment risks. The contract in this case stipulates the obligation to return the Bitcoin between two natural persons, and does not belong to the ICO financing activities stipulated in the Announcement on Preventing the Risk of Subsidy Issuance Financing [i.e., the 2017 ban].”

Thus, the judge concluded that the contract was legally binding, adding, “Bitcoin has the nature of a property, which can be owned and controlled by parties, and is able to provide economic values and benefits.”

Similarly, the United States Internal Revenue Service (IRS) also views cryptocurrencies as property, meaning those who sell their cryptocurrencies for a profit are subject to a capital gains tax. 

Can China’s views on crypto change because of Libra?

Regardless of the Hangzhou case, the regulatory landscape in China might soon change due to the arrival of Facebook’s Libra stablecoin. Earlier this month, Wang Xin, the director of China’s central bank, told the South China Morning Post that his agency is developing its own digital currency in response to Libra, saying

“If [Libra] is widely used for payments, cross-border payments in particular, would it be able to function like money and accordingly have a large influence on monetary policy, financial stability and the international monetary system?” 

The PBoC head then stressed that the bank decided to create its own digital currency specifically because of the unclear role the U.S. dollar might have once Libra is issued:

“If the digital currency is closely associated with the U.S. dollar, it could create a scenario under which sovereign currencies would coexist with U.S. dollar-centric digital currencies. But there would be in essence one boss, that is the U.S. dollar and the United States. If so, it would bring a series of economic, financial and even international political consequences.”

As such, the PBoC purportedly received approval from the chief Chinese administrative authority, the State Council, to begin work with other market participants and institutions on a central bank digital currency. Indeed, Zhuling from Aelf argues that Libra is “a confirmation that other countries are going to grow cryptocurrencies at global scale” for the Chinese government, and hence is much more influential than the Hangzhou ruling. 

Other experts also agree that the current regulatory situation is far from perfect for local cryptocurrency holders. “The ruling is a positive note but until the average Chinese person can feel safe trading on an onshore exchange, the market will not move for news like this,” Chu of Kenetic Capital told Cointelegraph. 

Nevertheless, the recent ruling shows that Chinese authorities might refrain from making hardline, bearish comments on cryptocurrencies in light of Libra as well as of crypto’s overall mainstream adoption.

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Tron Price Plunges as Justin Sun Denies Money Laundering Accusations

Tron founder and CEO Justin Sun denies illegal fundraising, porn transaction facilitation, gambling and money laundering accusations.

Tron founder and CEO Justin Sun denied illegal fundraising, porn transaction facilitation, gambling and money laundering accusations in a post on Chinese social media platform Weibo published on July 23.

Earlier today, Chinese media 21st Century Business Herald claimed in an article that unspecified sources informed its reporters that Justin Sun is still on Chinese territory. The website also cites concerns over alleged pornography-related transactions in his Peiwo social media, fundraising and gambling.

The outlet further suggests that Sun cannot leave the country, and this is the real reason why Sun decided earlier today to postpone the Warren Buffett Lunch and press conferences to an unspecified date. The outlet rhetorically asks whether Sun will be able to meet Buffett without first resolving the aforementioned concerns.

In a Tweet, Sun previously declared that the reason why he decided to reschedule the meeting is a medical condition. In the aforementioned Weibo post, Justin addresses the accusations.

According to his post, the illegal fundraising accusations are false since — after the Chinese government banned initial coin offerings in September 2017 — the Tron Foundation returned the funds. Sun also says that also the money laundering accusations have no basis since the Tron Foundation is located in Singapore, complies with local regulations, and does not involve fiat on or off-ramp services.

He also noted that, when it comes to Peiwo allegedly facilitating illegal porn-related transactions, the company collaborates with regulators, monitors users and tries to ensure that the content is positive. 

Sun also more broadly addressed the accusations of facilitation of illegal activities by pointing out that Tron is a decentralized internet network and that the Foundation opposes the unlawful use of the protocol. Lastly, Sun declares:

“We understand the concerns over the development of blockchain technology, and we are willing to open up and communicate to jointly promote the development of blockchain technology in China.”

By press time, Tron (TRX) price plunged by about 16.58% over the last 24 hours, trading at about $0.024, according to Coin360 data.

Tron 1-Day Chart

Tron 1-Day Chart | Source: Coin360

As Cointelegraph reported earlier this month, Sun previously invited more notable figures from the crypto industry to attend his $4.6 million dollar lunch with Warren Buffett.

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New Blockchain Partnership Aims to Pave the Way for Mass Adoption in China

A blockchain platform and a gaming company note their partnership will benefit millions and pave the way for mainstream adoption in China.

A blockchain platform and a mobile gaming company have unveiled a partnership designed to benefit hundreds of millions of users.

High Performance Blockchain (HPB) has announced it is the first public chain to team up with gaming company Shanghai Youwan — paving the way for widespread adoption by the customers of some of China’s biggest brands.

According to HPB, this integration means that its coins can be converted into in-game currency that can be used on an array of titles. Players will also have the freedom to make conversions into in-game credits compatible with all companies under the Ping An Group, such as Ping An Bank and Ping An Insurance. Compatibility will also be achieved with China Telecom, China Mobile, China Unicom and JD.com.

Through the partnership, Shanghai Youwan’s mobile games will be connected with the HPB wallet, expanding the ecosystems of both parties. As a result, a broader number of apps and companies will be able to use HPB coins and benefit from what the scalable blockchain has to offer.

Bringing blockchain into people’s lives

Shanghai Youwan has a base of millions of users, with 300 employees developing 20 new games a year for the public to enjoy. The cross-platform, multiplayer service has accrued more than 800 million accounts since launch, with the company striving to deliver innovation in gameplay as well as the in-game economies and financial models that players interact with.

According to HPB, the collaboration is a “great stepping stone” in normalizing distributed ledger technology and making it an everyday part of people’s lives. The company says that “an immense portion of the public” are going to be exposed to the company’s blockchain as a result of the partnership — and in time, both businesses hope to work together more closely in other sectors, such as health care, food, housing and transportation.

Next steps

HPB and Shanghai Youwan are now moving on to the development and implementation phases of their relationship — and capitalizing on the synergies between their respective platforms. Security, scalability and flexibility were listed as key priorities at the start of the partnership.

HPB is available here

“The scope of this partnership, and initiatives at hand is another signal that is showing the world that blockchain adoption is happening, and the potential it has to be integrated into our daily lives,” the companies said.

Looking ahead, the business partners are hoping to explore the untapped opportunities that lie in big data management. HPB believes its solutions are going to provide an additional layer of security in Shanghai Youwan’s data, and help the company cater to user demand and consumption preferences far more effectively than it did before.

Building a stronger platform

HPB says it has now attracted more than 70 partnerships and decentralized applications (DApps) across a broad range of industries, including fintech and infrastructure — with each partner bringing unique strengths that help its platform thrive.

The blockchain company previously struck a deal with UnionPay Smart, the big data arm of the Chinese financial giant. Their collaboration has been designed to help the company, which beats Visa and Mastercard to claim the title of the world’s largest card payment organization, enhancing communication between stakeholders through the use of blockchain’s authorization and traceability.

HPB has also secured links to global policymakers at the G-20, the World Economic Forum, the Asia-Pacific Economic Cooperation and the Organization for Economic Cooperation and Development by establishing a partnership with the SME Forum run by the International Finance Corporation. The platform says it has been engaging in “close discussions with thought leaders and policymakers about the potential applications for blockchain technology for the betterment of society.”

Learn more about HPB

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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South Korea Has the Highest Rate of Granted Blockchain Patents

South Korea has the highest blockchain patent grant rate, followed by Japan, according to London-based law firm Withers & Rogers.

South Korea has the highest blockchain patent grant rate, according to London-based law firm Withers & Rogers. Meanwhile, Japan comes at a distant second, Intellectual property business media platform IAM reports on July 23.

Getting a blockchain patent in China is hard

Per the report, South Korea has the highest patent grant rate (54%), followed by Japan (17%), and the United States (16%), with China significantly lagging behind. The outlet suggests that a reason for this substantial disparity between China and the rest of the world is that a sizable portion of those patents outside China follow a procedure where the application is not published before the patent is granted.

In China, on the other hand, patent applications must be published before a substantive examination, which may be the reason why less than 2% of the Chinese blockchain patents examined have been granted.

Blockchain Intellectual Property Grant Rate

Blockchain Intellectual Property Grant Rate | Source: IAM

Furthermore, the figures also show that China and the United States account for 62% and 22% of blockchain innovation, being jointly responsible for the vast majority of development in the industry (82%).

The data is also in line with what Cointelegraph reported in June. At the time data circulating on intellectual property news outlets, showed that the number of global blockchain patent filings significantly outstrips the patent filings for other technologies.

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Turning to Crypto: China, Iran, and Now Palestine?

Palestine Looking to Phase Out Use of Israeli Shekel Through Crypto

States across the world are turning to crypto as Bitcoin has embarked on a jaw-dropping recovery and Libra has been unveiled to the world.

Reported by Al-Monitor on July 22nd, Palestinian Prime Minister Mohammad Shtayyeh is looking into launching a cryptocurrency that would be used as an alternative to the Israeli Shekel. Shtayyeh’s idea is to prevent Israel from blocking transactions, which ties in with the conflict between the two groups. He told a local television outlet that Palestine’s economy wants to start to phase out its reliance on the Shekel.

If launched, this digital Palestinian dollar may go against a protocol the state signed in 1994. The Palestinian Monetary Authority has the power of a central bank, but can not issue banknotes. Presumably, a crypto asset launched by the PMA would be classified as some sort of banknote.

Iran May Launch Gold-Backed Digital Asset

Palestine’s sudden idea to launch a cryptocurrency comes as Iran, a country recently revealed to have a rapidly growing Bitcoin mining economy, has purportedly begun research on and development of a gold-backed cryptocurrency. Per Asia Crypto Today, which cited an unlinked report from the local Tehran News outlet, the embattled nation has been approved by its central bank to launch the cryptocurrency. CEO of Iranian Information and Communication Technology (ICT) FANAP, Shahab Javanmardi was reported as saying:

“IRAN’S CRYPTOCURRENCY WILL BE SUPPORTED BY GOLD, BUT ITS FUNCTION IS SIMILAR TO OTHER CRYPTOCURRENCIES. THE CRYPTO ASSET IS DESIGNED TO MAXIMIZE THE USE OF IRANIAN FROZEN BANK ASSETS.”

This crypto project could result in harsher regulation on the Bitcoin space from the U.S. government, who have historically been heavy-handed against Iran and cryptocurrencies.

A Digital Yuan

Palestine’s and Iran’s efforts come hot on the heel of a report from the South China Morning Post. In the article, the head of the research division at the People’s Bank of China, Wang Xin, told an audience at the Peking University that Facebook’s Libra could affect international fiscal stability, and thus the Yuan.

What Wang is fearful of is that the cryptocurrency will be mostly backed by the United States Dollar but will be available the world over, giving the U.S. even more influence over politics and finance than it already has.

The proposed digitization of the Yuan, which is arguably already well on its way through WeChat Pay (literally 90% of stores and services accept this payment medium in urban areas), would theoretically give China a chance to combat the growth of Libra. But whether or not a Yuan “cryptocurrency” succeeds in the real world isn’t clear.

Photo by NASA on Unsplash

The post Turning to Crypto: China, Iran, and Now Palestine? appeared first on Ethereum World News.

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Bitcoin (BTC) Sees Watershed Moment in China, And It’s Bullish

Bitcoin is “Property” Under Chinese Law

Boom, Bitcoin (BTC) has just seen a watershed moment in China. Despite the fact that the nation’s regulators turned on cryptocurrency, enforcing heavy regulations about digital asset trading, events, and certain forums/social media accounts, a court in China purportedly confirmed that BTC is legally protected as a form of “digital property”.

Per a thread from Dovey Wan, a partner at Primitive, a crypto-friendly fund, the Hangzhou Internet Court confirmed that Bitcoin can be defined as “property” under local law. In fact, a statement from the court’s judges noted that they see BTC as an asset that is not only valuable and disposable — the tenets of property — but scarce too.

Per Wan’s analysis of the situation, which weighs on comments from locals and her thoughts on China’s stance on cryptocurrency, this is entirely bullish.

In fact, she notes that this ruling disperses the cloud of “holding Bitcoin is illegal you [filtered for profanity] criminal,” which became somewhat of a trend in mainland China after the People’s Bank of China openly lambasted cryptocurrencies, especially in regards to hacks and scams. (A relevant aside, the Chinese central bank recently revealed that it is looking to launch a digital Yuan, should Facebook Libra succeed or should the U.S. Dollar begin to encroach further on the Yuan.)

And, she adds that the fact that the leading proposed catalyst about Bitcoin’s sharp rally past $10,000 from the Chinese is this court ruling, which, in her eyes, makes the deeming of BTC as a form of “digital property” a “big milestone.”

Libra, and Crypto Too, on the Rise in China

This key court case comes hot on the heels of news that Libra, and the broader cryptocurrency trend for that matter, are back on the rise in China.

Per previous reports from this very outlet, data from Google Trends suggests that “Facebook Libra” is on a popular search term in China. Case in point, on Weibo earlier this week, Libra had become the second-largest trending topic on Weibo. In fact, the topic had seen over 220 million views and tens of thousands of comments.

According to Wan, this trend is easily explainable. She writes that this “attention bomb” in China was set off due to David Marcus’ mention of Alipay and WeChat Pay, the nation’s two foremost digital payment ecosystems.

During Wednesday’s hearing, the head of Blockchain at Facebook noted that should Libra come to market, it will likely compete with the two Chinese payment services.

In related news, WeChat keyword analytics have registered a massive uptick in the volume of “Bitcoin”. In fact, the past ninety days have seen keyword volume for the Chinese term for “Bitcoin” skyrocket by five times.

Photo by Miranda Richey on Unsplash

The post Bitcoin (BTC) Sees Watershed Moment in China, And It’s Bullish appeared first on Ethereum World News.

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Virgin Bitcoin — Most In-Demand Crypto That Is Regulated Differently?

Demand for virgin Bitcoin is currently at its all-time high.

In a world where the global crypto community continues to face a growing number of regulatory hurdles with each passing day, the term “virgin Bitcoin” is starting to become more common among digital currency enthusiasts. However, it is of utmost importance to clarify what this term actually means and the significance it carries. 

According to Dave Jevans, the CEO of CipherTrace, virgin Bitcoins are essentially BTC tokens that do not have a transaction (TX) record associated with them. As a result of this, coins lack a defined attribution history, making them extremely useful for money launderers as well as other miscreants looking to mask the source of their illegally procured funds. Not only that, even the recipient typically has no traditional means of verifying the origin of the funds in question since virgin btc cannot be linked with any wallet or other cold storage entity.

Also, the Bitcoin blockchain serves as a decentralized ledger that allows anyone to follow the transaction history of a particular token with the touch of a button. For example, each Bitcoin carries with it a cryptographically provable history that contains a detailed record of ownership and transaction data associated with the token. Simply put, if a particular Bitcoin has been used to process even a single illegal activity in the past, all of its subsequent transactions will be tainted. This, according to Jevans, is one of the main reasons why certain cyber-savvy criminals go to such great lengths to launder their cryptocurrencies before putting them to use.

Virgin BItcoins on G-20 agenda  

With all of the aforementioned information in mind, it is important to consider that, at the recently concluded G-20 summit that took place in Osaka, Japan, the core governing committee agreed to adopt the standards of the Financial Action Task Force (FATF) — which are conventionally used in relation to fiat currencies — even for digital assets. On the subject, Cointelegraph spoke with Flex Yang, CEO of Babel Finance, who shared his thoughts on the issue at hand:

“When these standards go into effect, interexchange transactions will require transparency regarding senders and receivers of cryptocurrency. This opens doors to a wide berth of scrutiny as regulators probe different ledgers to determine what wallets participated in illicit crypto exchanges, hacks, etc. Bitcoin remains of interest to institutional investors, but their threshold for risk is much lower. With uncertainty as to how the crypto world will conform to the FATF standards, many traditional investors feel it best to air on the side of caution.”

Yang then went on to highlight the importance of virgin Bitcoins and how tainted crypto can become extremely tough to use when dealing with regulated financial institutions. For example, he pointed out that, if there existed even a sliver of proof that a particular Bitcoin had been used for shady activities in the past, that token could very well be seized or held indeterminately by regulators for a variety of legal reasons.“It’s like trying to deposit money in a bank that is from a drug cartel or criminal enterprise; banks will refuse to process transactions,” Yang explained.

So is it just virgin Bitcoin that people are after? 

As things stand, it appears as though a whole host of institutional investors are primarily looking to source virgin BTC, even though a uniform regulatory code applies to other altcoins as well. Simply put, nearly any currency — be it digital or fiat — can be used to facilitate illegal transactions. However, since Bitcoin offers its owners more transparency when compared to hard cash, virgin coins can be painted clean in a much easier manner. 

Additionally, it appears as though the Chinese government is particularly interested in virgin Bitcoins, even though it has not outwardly expressed any sort of leniency for individuals who may be in possession of these digital entities. According to Yang, China has yet to take any major action against its sprawling mining community. This is quite noteworthy because the demand for virgin Bitcoin seems to be spiking rapidly across the globe, and it seems as though mining operations in China are continuing to thrive and grow with each passing day. Yang then went on to say:

“The buyers are from US and other more regulated areas. China’s miners are just sellers….. Buyers may be pursuing these coins because of their novelty as well as the perceived ease-of-compliance in regulatory uncertainty. In truth, virgin Bitcoin might not benefit family funds or intuitions/individuals making the purchase. Still, there is clearly more confidence in virgin (or white) coin and it continues to fetch high premiums as a result.”

What is the problem with using Bitcoin that has a shady past?

At the very heart of the issue, Jevans notes that BTC that has a dark transaction history attached to it has more often than not been procured through a host of illegal pathways, such as global money laundering exercises or terrorism-related activities. And even after a particular token has been exchanged a large number of times, its payment trail can still quite easily be traced by investigators — thereby putting the owner at risk. The CEO of CipherTrace expounded on the topic by saying:

“Dark Tx histories also impede the fungibility of the btc if these tokens have a lower value. This a big concern for hedge funds that are concerned that their entire fund could be tainted by a few bad tokens. While this is less likely to affect those holding small amounts, larger traders could potentially, and unwittingly, hold larger amounts of stolen assets, lowering the value of their investment pool through association.”

Essentially, it appears as though even a single shady transaction can render a coin or token unclean. However, what is interesting is the fact that criminal Bitcoin can be sanitized by local governments by them selling such commodities after making a clear note of their past transactional history. The best example of this is when the United States Marshals Service held a sealed bid auction back in 2018 for a total of 3,813 Bitcoins (estimated to be worth $51.5 million at the time).

Virgin Bitcoin data worth taking a note of 

  • As per CipherTrace’s crypto intelligence team, over 75% of all transactions taking place on the black market are facilitated using Bitcoin.  
  • A large number of cyber criminals make use of techniques such as coin mixing to try and sever the path attached to a particular digital currency. And while it may still be possible to view the transaction history of a given token using advanced cryptographic methods, coin mixing makes the process extremely complicated. 
  • Russian conspirators involved with the alleged 2016 election hack in the U.S. were presumed to have funded their operations in part via a host of different Bitcoin mining operations based across the globe. 
  • In a similar vein, Jevans told Cointelegraph that virgin Bitcoins were also used to fund the registration payment for dcleaks.com.
  • CipherTrace’s studies have revealed that the recent crackdown carried out by the Iranian government on its mining sector were premeditated. Not only that, there are strong indicators suggesting that the local regime is currently making use of the confiscated mining gear for its personal gains.

Lastly, Jevans also commented on the premiums associated with virgin Bitcoin and how they differ from premiums related to regular BTC. On the subject, he was quoted as saying: 

“When we investigated BestMixer in November of 2018 they charged 5% for their Gamma level which was supposedly virgin coins. CipherTrace research revealed that these tokens were not in fact unused rather they had been cleansed via exchange hopping. This certainly raised the visibility and value of freshly mined coins. Moreover, the falling regulatory curtain is raising the value of clean coins as it becomes harder to launder funds through regulated exchanges.”

Additionally, according to Yang, premiums associated with virgin Bitcoin currently lay around the 10% mark. However, established players who have been operating within this domain for many years now are known to markup virgin coins by over 30%.

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China Ruling Bitcoin is Property Again Is ‘Major Milestone,’ Says Investor

A court dispute between an exchange and a user reinforced China’s willingness to recognize the cryptocurrency.

Bitcoin (BTC) has gained legal recognition by a second Chinese court in a further boost for the cryptocurrency in one of its harshest environments.

A watershed for Bitcoin in China

According to investor Dovey Wan, who linked to local media coverage, the Hangzhou Internet Court formally described Bitcoin as virtual property on July 18. 

The second such court to attribute property status to Bitcoin, the ruling came about as part of a dispute between a now-defunct exchange and one of its users who lost funds. 

For Wan, the case marks a significant watershed for Bitcoin in China, where a blanket ban on trading it has been in place since September 2017. 

BTC/USD rallied sharply Friday on the back of positive comments from United States lawmakers, but China likely also influenced the return to form.

“This case is a major milestone that manifested BITCOIN IS ACTUALLY LEGAL in China,” she wrote on Twitter. 

‘It’s virtual property, but not fiat money’

As Cointelegraph reported, China has long formed a curious focus for Bitcoin analysts despite the state-imposed moratorium on using it. As Bitcoin staged a comeback in 2019, evidence began emerging that consumers were finding alternative on-ramps to traditional exchanges, such as purchasing stablecoin Tether (USDT) via over-the-counter deals.

According to local English-language news outlet Global Times, China’s central bank, the People’s Bank of China (PBoC) — which imposed the 2017 ban — did not explicitly disagree with the Hangzhou decision.

“Indeed, Bitcoin is virtual property, but it’s not fiat money,” a PBoC official with the surname Li told the publication Friday.

The comments nonetheless come in stark contrast to the state’s perspective on Facebook’s Libra digital currency project, with officials saying they were concerned and had even begun developing a digital currency of their own.

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Bitcoin-Seeking Ransomware ‘Ryuk’ Virus Found and Studied in China

Tencent Yujian Threat Intelligence Center has spotted Ryuk ransomware in China, and received an extortion request in the amount of 11 BTC during their study.

Tencent Yujian Threat Intelligence Center says that a Ryuk ransomware virus has been spotted in China.

The intelligence center released information on the outbreak in a report on July 16.

According to the report, Ryuk viruses are a family of malware aimed at infecting government and enterprise machines holding valuable data. According to the report, a Ryuk virus derives from the Hermes virus, with code that is directly modified off of the latter.

As noted in the report, Ryuk is the name of a death spirit in the popular manga Death Note. As per its title, Ryuk possesses a notebook that can be used to kill a person by writing their name on one of its pages.

Researchers at the intelligence center were reportedly able to capture and study the virus in action. According to the report, this virus came attached with a ReadMe note containing two email addresses. Upon replying to the first email address, the researchers received instructions and a ransom demand set at 11 Bitcoin.

The intelligence center advised personal users to run Tencent PC Manager and enable file backups, turn off Office macros, and to stay away from unfamiliar emails.

The report also referenced a number of Ryuk ransom cases. In the United States, for instance, the public administration of La Porte County, Indiana paid a $130,000 ransom to get rid of the virus. In Lake City, Florida, the local government paid a $460,000 ransom after Ryuk infected the city’s computer systems. 

As previously reported by Cointelegraph, research in January suggested that Ryuk originated in Russia. The virus was originally thought to have come out of North Korea, but McAfee Labs and Crowdstrike have suggested that Russia is the more likely source. According to these cybersecurity companies, Ryuk may in fact have come from the Russia-based group “GRIM SPIDER.”