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Prasos Secures Payment Institution License From Finnish Watchdog

Cryptocurrency services firm Prasos has received a payment institution license from a Finnish regulator, allowing it to offer payment services in EEA countries.

Finland-based cryptocurrency firm Prasos has secured a payment institution license via the Finnish Financial Supervisory Authority (FFSA). The news comes by way of an official announcement via its crypto exchange website on July 12.

According to the announcement, Prasos is now the third crypto firm in Europe to secure a payment institution license. According to its website, Prasos operates a crypto exchange, a crypto investment platform, and Bitcoin (BTC) ATMs.

Prasos stated that, thanks to its new license, its crypto investment platform Coinmotion is now capable of supporting a payment service in the European Economic Area (EEA), which includes EU member states as well as Iceland, Liechtenstein and Norway. 

The license will also reportedly allow Coinmotion to cooperate more smoothly with banks and traditional financial institutions, and extend its capabilities pertaining to traditional fiat money.

Prasos Oy’s managing director Heidi Hurskainen said it took around one-and-a-half years to complete the application process; Hurskainen also noted that over this period, crypto legislation within the EU has become more clear.

Looking forward, Prasos is planning to apply — again with the FFSA — for a virtual currency provider license in May, as will apparently be required when new legislation comes into effect that month.

As recently reported by Cointelegraph, two companies in the United States have received notable licensure through the Securities and Exchange Commission (SEC). Blockchain startup Blockstack announced on July 10 that it was running the first SEC-approved public token offering under Regulation A+, while the blockchain org Props announced on July 11 that it had received the first SEC-approved consumer-facing token offering, under Reg A+ as well.

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LocalBitcoins Confirms Removal of Local Cash Trades

Following reports of the silent removal of local cash trades on June 1, LocalBitcoins has confirmed the move.

Global peer-to-peer (P2P) crypto exchange LocalBitcoins has officially confirmed the removal of trading in local fiat currencies, the firm announced in a tweet on June 4.

As previously reported, the Finland-based exchange silently removed cash trading on June 1, which immediately caused some outrage in crypto community.

In the official statement, LocalBitcoins noted that its liabilities are determined by the Act on Detecting and Preventing Money Laundering and Terrorist Financing, which requires the exchange to follow certain sanctions.

LocalBitcoins wrote:

“In order to adapt to the current regulatory environment, we had to reconsider our policy on local cash trades as well as on geographical areas where our service is available, among other platform features. As a consequence, advertisements in the cash category (i.e. local cash trades) were disabled in our platform on Saturday 1st June.”

The move comes on the heels of the news that LocalBitcoins will soon become monitored by the Financial Supervisory Authority of Finland, as the Finnish government passed new legislation for crypto assets earlier this year.

In late May, LocalBitcoins banned Iranian users from using its platform, a move reportedly prompted by the rules of the European Union.

Meanwhile, bitcoin (BTC) has seen a notable decline since June 1, with its price having plunged below the $8,000 threshold earlier today after breaking $9,000 last week.

Bitcoin 7-day price chart. Source: CoinMarketCap

Bitcoin 7-day price chart. Source: CoinMarketCap

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LocalEthereum Woos LocalBitcoins Traders After Platform Reportedly Bans Cash Trading

As executives keep quiet on the move, a competitor suspended fees for cash meetups, accusing LocalBitcoins of participating in the “war on cash.”

Finnish P2P bitcoin (BTC) trading platform LocalBitcoins has kept silent after users reported it had removed cash trading from its service on June 1.

LocalBitcoins, which allows users to trade BTC for fiat currency privately, purportedly cut the option for in-person meetups to trade crypto for cash, angering social media commentators.

“It’s time to no longer recommend LocalBitcoins, EVER,” the top response to the original Reddit report reads.

Executives from the company have so far refrained from publicly commenting on the move, which follows a slow process of Anti-Money Laundering (AML) and Know Your Customer (KYC) implementation.

As Cointelegraph reported, LocalBitcoins halted anonymous trading in April 2018, requiring high-volume account holders to identify themselves before conducting further business.

Based in Helsinki, the company reported in February that it would be working towards compliance with European Union AML/KYC standards.

Last week, LocalBitcoins sanctioned users based in Iran, again reportedly due to EU rules, a source told Cointelegraph.

For some, however, the latest change provided a marketing opportunity. LocalEthereum, the similarly-named platform catering to ether (ETH) traders, announced it had removed cash transaction fees as a direct response to LocalBitcoins.

“The global war on cash and privacy continues. LocalBitcoins suddenly removed all cash-in-person offers today, without any warning to its users,” a blog post read Saturday. It further noted:

“Meeting in person is one of the oldest ways to exchange between crypto and fiat, and it remains one of the safest. As long as you follow simple guidelines, it’s incredibly rare for anything to go wrong.”

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LocalBitcoins Imposes Restrictions on Iranian Accounts

Major P2P crypto exchange LocalBitcoins.com has banned users based out of Iran.

Major peer-to-peer cryptocurrency exchange LocalBitcoins.com has banned users living in Iran, according to their website as of today, May 24.

Screenshot of LocalBitcoin Iranian page

Screenshot of LocalBitcoin Iranian page as of press time

A source had previously told Cointelegraph in an email that the impetus for restricting Iranian transactions is to comply with financial regulations in Finland, where the headquarters of LocalBitcoins.com is located. Moreover, exchanges are purportedly cutting off Iranian users due to sanctions previously imposed on other exchanges by the United States.

Major crypto exchanges Coinbase and Binance do not currently support users living in Iran.

One of the purported advantages of LocalBitcoins for Iranian users was that it did not require a credit card or online payment, meaning that Iranian users without international bank accounts could still buy and trade crypto, says the source.

At press time, LocalBitcoins has not responded to Cointelegraph’s request for comment.

In January of this year, Cointelegraph reported that Iran was allegedly planning to unveil its own cryptocurrency as a way to circumvent sanctions.

Earlier in May, United States Congressman Brad Sherman — a noted critic of cryptocurrencies in general — said that they are a threat to American foreign policy. Sherman suggested a complete ban on U.S. citizens purchasing crypto, as he thinks crypto diminishes the power of the U.S. dollar as an international financial standard.

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German Police Seize Six Figures in Crypto From Suspects Involved in Dark Web Site

The Wall Street Market, the world’s second largest dark web market, was shut down with six figures in crypto seized by police.

German police, along with Europol, have shut down servers of a dark web marketplace and seized six figures in crypto from the arrested suspects, Europol announced on May 3.

The Wall Street Market, reportedly the world’s second-largest dark web market, has been shut down by the German Federal Criminal Police under the authority of the German Public Prosecutor’s office.

According to the report, German authorities arrested three suspects and seized over 550,000 euros ($615,000) in cash  along with bitcoin (BTC) and monero (XMR) in six figure amounts (actual value unspecified) as well as several cars, computers, hard drives and other items.

Europol noted that the Wall Street Market had more than 1.15 million registered users, with 5,400 of them registered as sellers of drugs, stolen data, fake documents and malicious software.

In the same announcement, Europol also officially announced that Finnish Customs also staged a takedown of dark web marketplace Valhalla, also known as Silkkitie. According to Helsinki Times, the authorities have also made a “significant bitcoin seizure,” from the website, which was operational in the anonymous Tor network since 2013.

In other crime news, two men recently plead guilty in the United States for illicitly selling steroids and controlled substances and laundering millions of dollars in cryptocurrencies and Western Union payments.

As well, in early April a court in Toronto ordered an online drug dealer to pay his entire $1.4 million bitcoin holdings to the state in what is reportedly Canada’s largest ever forfeiture.

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Finland: Financial Watchdog Adopts Role as Supervisory Authority for Crypto Sector

Finland’s Financial Supervisory Authority is to assume its role as registration and supervisory authority for the crypto sector.

Finland’s Financial Supervisory Authority (FIN-FSA) is set to assume its role as a registration authority and supervisory agency for crypto industry participants as new legislation comes into force this week. The news was revealed in an announcement published by FIN-FSA on April 27.

With Finland’s Act on Virtual Currency Service Providers set to come into effect on May 1, the watchdog clarifies that it will henceforth be statutorily required to register all crypto exchanges, custodian crypto wallet providers and cryptocurrency issuers operating in the country.

As FIN-FSA notes, the new Finnish legislation has been drafted on the basis of the European Union (EU)’s Fifth Anti-Money Laundering (AML) Directive. As reported, the latter came into force in July 2018 and established a revised legal framework for EU financial watchdogs to regulate cryptocurrencies and mitigate the risks of money laundering and terrorism financing.

FIN-FSA outlines that registration will necessitate statutory compliance with multiple rules, including those pertaining to the storage and protection of client funds, segregation of service provider and client assets, rules for the marketing of services and heeding AML/CFT laws.

The watchdog also announced a briefing directed to the crypto industry on May 15 to be held at the Bank of Finland’s auditorium in Helsinki. The briefing will reportedly lay out FIN-FSA’s registration timeline and the steps and schedule for the procedure, as well as addressing formal and draft regulations and guidelines applicable to industry participants.

Notwithstanding the new legislation, FIN-FSA states that investor protection is not fully resolved within the new measures, and reminds the public that:

“The risks related to virtual currency investments remain unchanged. The risks include sudden major fluctuations in value, data security threats pertaining to exchange services and custodian wallet providers, and the nature of several virtual currencies as speculative investments not involving any inherent source of return.”

As reported this March, Helsinki-based international peer-to-peer crypto exchange LocalBitcoins has recently announced its forthcoming supervision by FIN-FSA in accordance with the country’s new legislation.

In the EU context, member state France is reportedly poised to attempt to persuade other countries in the bloc to adopt cryptocurrency regulations similar to its own new framework, approved earlier this month.

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LocalBitcoins Announces Supervision by Financial Supervisory Authority of Finland

Finnish Parliament approved new legislation that will provide a legal status for cryptocurrency assets on March 13, 2019.

International peer-to-peer (P2P) crypto exchange LocalBitcoins will soon become supervised by the Financial Supervisory Authority of Finland, as the firm announced on its blog on March 25.

Helsinki-based LocalBitcoins wrote that the Finnish Parliament approved new legislation that will provide a legal status for cryptocurrency assets on March 13, 2019.

The authority has passed a proposal for a new Act on Virtual Currency Service Providers that is expected to come into force in November 2019.

The parliament also voted for an amendment to the Act on Detecting and Preventing Money Laundering and Terrorist Financing that will bring all crypto-related services such as wallet providers and exchanges under Anti-Money Laundering (AML) laws.

According to LocalBitcoins, the adoption of the acts will contribute to public recognition of crypto by presenting major cryptocurrency Bitcoin (BTC) as a viable and legit financial network.

Along with the regulatory announcement, LocalBitcoins also stated that it is developing tools to increase compliance with regulators.

On March 18, LocalBitcoins launched a new account registration process, and is now working on a more efficient and safe identity verification process. The company noted that corporate accounts will undergo a separate verification process.

Previously, Cointelegraph reported that a crypto exchange and wallet service in Finland was experiencing issues with local banks that refused to work with crypto-related businesses. Specifically, Prasos platform became a subject of concerns among the banks, with at least four banks refusing to deal with the entity.

Earlier this year, Cointelegraph also reported on a hack attack that led to a phishing LocalBitcoins clone website link being posted on the official LocalBitcoins forum. As a result, the alleged attackers reportedly managed to steal around $28,000 worth of Bitcoin at the time of the report.

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Denmark Targets 2,700 Bitcoin Traders for Tax Payments After Tip-Off From Finland

Danish authorities are going after those who traded Bitcoin for profit but did not yet declare the extra income.

Denmark’s tax agency (Skattestyrelsen) has confirmed it is “identifying” 2,700 individuals it says owe taxes on Bitcoin (BTC) gains, according to a Dec. 12 press release.

According to Skattestyrelsen, the Danish citizens bought and sold Bitcoin via an unnamed Finnish cryptocurrency exchange between 2015 and 2017, but did not declare any profits or losses on tax documents.

Now, the agency will go after each individual with an eye to determining their payment obligations.

“Right now we are identifying the individual citizens and keeping the new information up to those we already have,” tax director Karin Bergen commented, continuing:

“If something does not match, we will contact them and ask for more information. However, how many people it is and what it may mean, it is still too early to say.”

Skattestyrelsen did not mention which exchange was involved, but said the information had come via a tip-off from Finnish tax authorities.

Finland is home to well-known international P2P Bitcoin trading platform LocalBitcoins, which this year implemented limited Anti-Money Laundering (AML) and Know Your Customer (KYC) processes for “high volume” account holders.

The 2,700 traders involved purchased Bitcoin worth 49.7 million kronor ($7.55 million) and sold Bitcoin worth 53 million kronor ($8.05 million).

“This is probably just the tip of the iceberg,” Bergen added:

“The knowledge we gain about data mining, segments and methods in general will make us wiser in the area and benefit from our guidance and control work.”

Denmark has traditionally painted a mixed picture of its attitudes to cryptocurrency. This month, the country contains a total of 1,500 Bitcoin-accepting restaurants via online food portal Hungry.dk, while on the other hand, local bank Nordea banned its workers from owning crypto earlier this year.

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Bank of Finland Releases Scathing Crypto Report, Calls Digital Currency a “Fallacy”

The Bank of Finland released a paper on June 21 titled “The Great Illusion of Cryptocurrencies,” explaining why they think the concept of a digital currency is a “fallacy.”

The paper, written by Aleksi Grym, Adviser on Digitalization and Head of the Digital Central Bank process in the Financial Stability and Statistics Department. It aims to explain how cryptocurrencies’ fundamental nature “shows how poorly understood the concept of money itself still is today” and how the Internet and social media have “muddled our sense of fact and fiction.”

In Grym’s words, cryptocurrencies are not real currencies but instead “accounting systems for non-existent assets.” He makes the argument that digital ledger technologies, like blockchain, are actually the same as other record keeping systems, but that their implementation for crypto is “unrelated to the fundamental characteristics of money:”

“For all intents and purposes, that ledger is a centralised ledger. The fact that there are multiple synchronised copies of it, distributed across a network, is irrelevant, as each one has the same data.”

The article cites several studies on Bitcoin (BTC) and cryptocurrencies with relatively negative views on crypto as either a speculative instrument or a bubble whose “fundamental value is zero.” Grym also discredits the idea of a central bank issued digital currency, noting that it would “practically mean bank accounts at the central bank.”

Grym then asks the question, “again, what is money?” noting that the definition has changed over time, but that money is normally described as functioning as a unit of exchange and having a store of value and a unit of account. The article notes that money, presumingly referring to crypto, is not created “out of thin air,” but comes from liquidity transformation.

According to the article, the main impetus for buying cryptocurrencies are either for criminal activities, creating a sense of community, security against “real or imagined” state oppression, and the thrill of trading. Grym then compares buying Bitcoin to the “intangible value” for some customers that buy “toys, fashion, art, club memberships, or firearms.”

Last week, Cointelegraph published an overview of all of the “FUD” (Fear, Uncertainty, Doubt) in the crypto sphere since Bitcoin’s inception, detailing the many comparisons to the Dutch “tulip mania” as well as the multiple Bitcoin “deaths” reported in the media.

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Spanish Authorities Arrest 11 In Crypto Money Laundering Ring

Operation Tulipan Blanca (White Tulip), coordinated by Europol and conducted by the Spanish Guardia Civil, has resulted in the arrest of 11 individuals for laundering more than EUR 8 mln via cryptocurrencies, according to a Europol press release April 9.

According to Europol, the investigation was centered around a crime ring which launders money from narcotics sales using credit cards and cryptocurrencies.

Launderers would pick up the illicit funds in cash, after which they would deposit them in small amounts into hundreds of third bank accounts. Since the cash was already circulating in the financial system, the ring just needed to transfer the illicit funds back to the drug dealers in Colombia. The criminals would then acquire credit cards linked with the accounts, and travel to Colombia where they would make withdrawals.

Once the criminals realized that cash withdrawals and bank operations were easy to track, they used cryptocurrencies instead, mainly Bitcoin. The suspects converted illicit funds to Bitcoin through an exchange, which they then changed to Colombian pesos and deposited into Colombian bank accounts the same day.

Through collaboration with Finnish authorities, police were able to establish that the exchange being used by the criminal ring was located in Finland, and collect the necessary information to track the culprits.

137 individuals are still being investigated by the Guardia Civil. The investigation shows that the suspects deposited over EUR 8 mln into 174 different bank accounts. Europol says it has organized special training “to assist law enforcement officers in identifying the use of cryptocurrencies by organized crime networks.”

Cointelegraph reported earlier today that the US Department of Justice (DoJ) seized backpage.com on charges that it laundered nearly half a billion dollars in illegal revenue, some via cryptocurrencies.