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After the devastating news of the removal of offline cash trades and the new vigorous and intrusive KYC policy from popular P2P Exchange Platform (Localbitcoins) the community needed an alternative. We’re happy to announce the arrival of GlobalBitcoinsPro.com which has been created to revive the community.
Created by a group of OTC traders that grew from trading on Localbitcoins and noticed a decline in the community they were used to, they simply “Wanted to bring back the glory days”.
GlobalBitcoinsPro.com is a peer-to-peer (p2p) cryptocurrency exchange platform, it is the newest and most reliable platform allowing users to safely perform both online and offline trades. Their main attraction is the familiar, popular and easy to use interface that many traders already know how to use making it easier to just make an account and start creating ads and trading. They also added new and exciting features that serve two communities by offering the choice of trading between BTC (Bitcoin Core) & BCH (Bitcoin Cash). One of their primary objectives is to facilitate the efficient trade of cryptocurrencies on a global scale, which will ultimately result in a digital community coming together. GlobalBitcoinsPro.com has a very convenient, easy to use functionality making the usage of this platform smooth and hassle-free. This platform is available worldwide with active users in multiple countries. They have also competitively slashed fees in half by charging only half a percent as opposed to the competition that charges 1% fees on all trades.
Filling the gap in the market of p2p cryptocurrency trading platforms
After recognising a gap in the market, when the market leaders took down their offline trading features, they decided to fill that gap by recreating a similar platform with added features allowing users to trade with physical cash once again. A popular platform ‘LocalBitcoins’ took down offline trades early June resulting in numerous complaints and loyal users having no support. GlobalBitcoinsPro.com swiftly filled this and brought offline trades back therefore allowing users to still have an option for either offline and online trades.
Enabling more access to Crypto Currencies in developing countries where banks cannot reach
GlobalBitcoinsPro.com has worked on bringing the world of Crypto Currencies to every city and they are constantly expanding. This allows the access to Crypto Currencies to stretch globally to developing countries that would usually be ignored by the traditional banking world. This is evidently not only a platform just for trading, but they are also looking to advance the community and introducing Crypto to the world economy.
This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.
The last week was the third most lively for Argentine peso markets on Localbitcoins, as the national currency continues its devaluation against the U.S. dollar.
Argentina is back on the radar for Bitcoin (BTC) proponents after sudden capital controls cut U.S. dollar purchasing power by 98%.
Central bank: $200 limit “temporary”
As news outlets reported, including Cointelegraph Brasil on Oct. 28, the country’s central bank has opted to reduce the amount of dollars a saver can purchase each month from $10,000 to just $200.
A drop of 98%, the stringent new rules appeared on Sunday, the day voters elected a new president. The previous $10,000 limit itself came into being as a result of capital controls in September.
Argentina has seen the value of its fiat currency, the Argentine peso (ARS), fall dramatically this year, with annual inflation exceeding 50%.
In a statement, the Central Bank of Argentina (BCRA) said the reduced dollar access would last for two months.
“Given the current degree of uncertainty, the Board of Directors of the BCRA decided to take a series of measures this Sunday that seek to preserve the reserves of the Central Bank. The measures announced are temporary, until December 2019,” it said in a statement.
The bank continued:
“It establishes a new limit of $200 per month for dollar purchases for individuals with a bank account and $100 for the amount of dollars that can be purchased in cash. These limits are not cumulative.”
Argentina sets top three week on Localbitcoins
The move came as Argentina posted its third-strongest week on record for Bitcoin trading on P2P platform Localbitcoins.
According to data from Coin Dance, for the week ending Oct. 26, accounts traded 14.15 million ARS ($240,000). It should be noted that the tally in BTC terms was not high, with the volumes highlighting the continued weakness in the peso.
Localbitcoins trading volumes for Argentine peso (ARS). Source: Coin Dance
Nonetheless, Bitcoin commentators were quick to point out the benefits of switching to the decentralized cryptocurrency.
“It’s not your money if you need permission to use it,” Twitter analyst Rhythm summarized on Monday.
The previous president had appeared more interested in Bitcoin’s potential. As Cointelegraph reported, Mauricio Macri met with venture capitalist Tim Draper in March, during which the pair reportedly struck a deal to adopt Bitcoin as Argentina’s currency if it performed strongly enough compared to the peso.
Since then, other capital control experiments have garnered similar reactions from Bitcoin spheres, notably the shutdown of Lebanon’s banks last week.
Cryptocurrency trading volumes in India have accelerated despite regulatory uncertainty and banking restrictions imposed by the Reserve Bank of India (RBI). Global trading platforms and service providers have also been expanding their operations to serve Indian users.
Banking services may be restricted and the government may be considering a bill to ban cryptocurrencies, but Indians continue to buy and sell cryptocurrencies. Trading volumes on some exchanges in the country have been rising significantly.
Paxful has reported steady growth in BTC trading in INR on its peer-to-peer (P2P) bitcoin marketplace. For the week ending Oct. 26, 85 BTC were traded, a 13% increase from the 75 BTC traded the previous week. In comparison, only 7 BTC were traded in the week ending Oct. 27 last year on the platform. Competing P2P marketplace Localbitcoins reported 146 BTC traded in the week ending Oct. 26 and 143 BTC the previous week. Bitcoin.com’s P2P marketplace for bitcoin cash is also growing in popularity among Indian traders.
Nischal Shetty, CEO of local crypto exchange Wazirx, is also seeing an encouraging trend on his platform. Trading volume has “grown really well this month,” he told news.Bitcoin.com on Monday, adding that “It has accelerated in the last week due to the positive sentiments around crypto.” He further shared that the top coins traded this month on his exchange are BTC, ETH, XRP, TRX, LTC, XLM, MATIC, BCH, BAT, and BTT.
Regarding trader sentiment in India, “It’s been very positive ever since the China news of President Xi Jinping announcing that China should get into accelerated blockchain development,” Shetty opined. “India and China share a very competitive relationship. This means we’re going to see positive crypto announcements in India as well very soon.”
The CEO continued: “The last couple of months were relatively slower compared to Q2 this year. But that’s been the situation throughout the crypto sector globally. Indian markets have always been on par with global crypto markets in terms of trader sentiments and excitement. However, the China news has created tremendous positive outlook in the last week.”
Sumit Gupta, CEO of local crypto exchange Coindcx, believes that “Trader sentiment has considerably improved in India lately, mainly because of the market reversal,” he told news.Bitcoin.com on Monday. “In 2019, change in market sentiments brought an inflow of new traders and new users (hodlers),” he added, emphasizing that “strong gains and volatility have attracted traders” this year.
Diwali Festival and Crypto Trading
India is currently celebrating a very popular five-day Hindu festival called Diwali or the Festival of Lights which began on Oct. 25. It “marks the beginning of a new year for businessmen who believe it to be an auspicious day which brings in wealth and prosperity throughout the year,” Coindcx explained. “Goddess Laxmi showers her blessings on the occasion of Diwali and therefore, any buy or sell trading brings a good fortune in the upcoming year.” To mark the importance of this festival, a number of crypto exchanges are running specials and giveaways.
U.K.-based banking services platform Cashaa also picked the start of this festival to launch its crypto service for Indian users, as news.Bitcoin.com previously reported. The company has since provided additional details of its service.
“On the occasion of Diwali, a festival for wealth and prosperity, we are announcing the launch of INR deposits with buy and sell of bitcoin, ether, and Cashaa for Indian residents, up to 1 crore INR [~$141,128] per month. Min deposit amount is 25,000 INR up to 10 lakh INR in a single transaction,” Cashaa detailed. The company explained that it “was able to find a stable P2P solution through its vast network of traders and brokers in India” to launch the service. “Our system will solve the problem of liquidity and speed using a P2P engine at the backend which does all the complex work and makes buying and selling simple for average users.”
Indian Crypto Bill and Regulation
The Indian government has been sitting on a draft bill that seeks to ban all cryptocurrencies except state-issued ones since February. The government has indicated to the country’s supreme court that this bill may be introduced in the next session of parliament.
The Indian crypto community believes that the bill is flawed and has been actively campaigning for the government to reexamine the bill. Shetty himself has been running a social media campaign called “India Wants Crypto,” which is only a few days short of its one year anniversary. He shared with news.Bitcoin.com that “the campaign has led to us meeting a few elected representatives of the Indian parliament,” emphasizing:
We’ll continue the campaign and we’re sure our elected representatives will hear our demands and help the crypto sector in India.
Meanwhile, the banking restrictions imposed by the central bank are still in effect. The ban has been challenged in the supreme court, which is expected to resume hearing the case on Nov. 19.
What do you think of how Indians are still trading strongly despite the banking restrictions and regulatory uncertainty? Let us know in the comments section below.
Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Images courtesy of Shutterstock and Coin.dance.
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Europe is gradually tightening the rules for the crypto space. A wave of new regulations are introducing stricter requirements for companies operating in the industry and cryptocurrency users are going to feel the difference in the coming months. The measures stem from the obligation of member states to transpose EU’s Fifth Anti-Money Laundering Directive (AMLD5) into national law by January. Unfortunately, they often go beyond what Brussels wants them to do.
German Regulations Chase Out Crypto Companies Like Bitpay
Germany, the flagship of the European Union, is one of the first to make the changes. New anti-money laundering (AML) regulations entering into force next year will oblige digital asset exchanges as well as providers of crypto payment and custodian services to apply for licenses from the Federal Financial Supervisory Authority (Bafin). They have to do so by the end of 2019, as the new pan-European legislation is supposed to be implemented in January 2020.
Starting from next year, German financial authorities will consider digital coins a financial instrument. And while some welcome the regulatory clarity regarding the status of cryptocurrencies, others think many more aspects need clarification and even look at the new rules as an obstacle to normal business. Members of the local crypto community believe the government is actually hurting the German blockchain industry and sending crypto companies abroad.
A major industry player that evidently needs some time to think about the matter is Bitpay. The payment processor, which facilitates both crypto and fiat transactions, is not providing services to German customers anymore. About a week ago, the platform announced on its website that it doesn’t currently work with merchants or users based in the Federal Republic among countries such as Algeria, Bangladesh, Bolivia, Cambodia, Ecuador, Egypt, Indonesia, Iraq, Kyrgyzstan, Morocco, Nepal, and Vietnam.
The list of supported markets is regularly updated according to Bitpay’s evaluation and understanding of local laws. And the company says it engages with local authorities to fully understand the rules in order to retain compliance and offer businesses the opportunity to accept blockchain payments. But the fact that it has pulled out of Germany at this point, even if it’s only a temporary step, means that new German regulations are already making it harder for crypto companies to operate freely.
Some serious businesses, like the largest food delivery portal in Germany, Lieferando, have been offering bitcoin as a payment option to their customers through cooperation with Bitpay. Members of the country’s crypto community have been warning that the new rules are going to chase other companies out of Germany in search for a more favorable climate in different jurisdictions in Europe or elsewhere.
Prague Tightens Noose on Nascent Crypto Industry
The Bundesrepublik is not the only EU member state taking the road to much stricter standards for the crypto industry. According to reports by local media, the Czech Republic is now working on its own set of rules, further tightening the noose around cryptocurrency users. For example, failure to register with the national Trade Licensing Office will lead to massive fines for service providers in the space.
Again, these measures have been inspired by the latest European AML directive, but the country’s leading business daily wrote last week that they are going to be tougher than the requirements set forth by the EU. In an article on the subject, Hospodářské noviny recently pointed out that the new cryptocurrency regulations will increase oversight on a wider range of companies than mandated by Brussels, jeopardizing the competitiveness of the Czech crypto sector.
Estonia is another EU member that has been tuning its crypto regulations in recent months. The tiny Baltic nation was one of the first on the continent to create favorable conditions for businesses dealing with digital assets and attracted many of them to its jurisdiction. Towards the end of last year, however, regulators in Tallinn took steps to tighten the existing licensing regime. As a result, it’s going to take longer and it will be harder in the future to acquire an Estonian license.
This spring, the finance ministry presented amendments to the country’s anti-money laundering and counterterrorist financing legislation. One of the changes requires Estonian companies to keep their headquarters in the country and entities incorporated abroad now have to maintain a permanent office in the republic. Estonia adopted its Money Laundering and Terrorist Financing Prevention Act in 2017 to transpose the provisions of the Fourth Anti-Money Laundering Directive.
France Introduces Optional Licensing
Other European nations have also taken crypto regulation seriously. Earlier this year, France announced intentions to publish updated rules for the crypto industry. In April, the government in Paris adopted a bill creating the legal framework for service providers in the space and projects conducting initial coin offerings. The law introduces mandatory registration with the French Financial Markets Authority (AMF) for providers of crypto custodian services as well as optional licensing for all service providers including cryptocurrency brokers, dealers and exchange operators.
About the same time, Finland enacted its law regulating crypto service providers like trading platforms, wallet providers and issuers of digital coins. The Act on Virtual Currency Providers entered into force on May 1 after it was approved by the country’s president. The Financial Supervisory Authority (FSA) was tasked with registering and supervising entities that fall into these categories. The new legislation and the introduction of other regulations by the FSA led to changes in the customer verification procedures applied by the peer-to-peer crypto exchange Localbitcoins.
Holland Abolishes Licensing Requirement
Obliging crypto companies to apply for licenses issued by regulators is a step too far and the case with the Dutch AMLD5 legislation demonstrates that. In early July, the Netherlands’ finance minister filed a bill in parliament implementing the directive and amending his country’s Money Laundering and Terrorist Financing Prevention Act. The draft envisaged the introduction of a licensing regime for crypto exchanges and wallet providers.
However, the unnecessary provision regarding licensing was met with a negative reaction from the Dutch Council of State, a body that advises Holland’s parliament on draft legislation prepared by the executive power and provides assessment of bills in terms of compliance with EU law. According to the council, AMLD5 does not offer a choice between licensing and registration, hence the minister’s proposal is not in line with the directive.
In its considerations, the legal portal Lexology reported, the Council of State also notes that the advice of the Dutch Central Bank (DNB) and the Financial Markets Authority (AFM) to introduce a licensing system in order to improve the effectiveness of oversight does not mean such a measure is proportionate, given the burden it imposes on service providers. As a result, the licensing requirement was abolished in the latest version of the law submitted to the Dutch parliament. There’s only a registration requirement, which is in line with EU’s directive and the Council of State’s suggestion.
AMLD5 Must Be Transposed Into National Law by January
The Fifth Anti-Money Laundering Directive was adopted by the Council of the European Union in May 2018 and published in the official journal of the EU on June 19 last year. AMLD5 modifies AMLD4, which was released in 2015. The revision was proposed in the summer of 2016 as part of the European Commission’s Action Plan against terrorism prepared after the terrorist attacks in Paris and Brussels and the Panama Papers scandal.
AMLD5 entered into force on July 9, 2018 and EU member states are obliged to transpose it into their legislation by Jan. 20, 2020. One of its key goals is to extend the scope of anti-money laundering laws to cover crypto exchange platforms and wallet providers. It also contains provisions regarding know your customer (KYC) rules and procedures. The implementation of the new directive is mandatory for EU countries.
In many cases, national laws transposing AMLD5 introduce regulations that are tougher than the directive requires, limiting services that have so far been readily available to the crypto community in Europe. Platforms such as Local.Bitcoin.com offer cryptocurrency users a marketplace where they are free to trade bitcoin cash (BCH) on a peer-to-peer basis and in a secure manner, without the need for KYC.
Why do you think regulators and authorities in EU member states adopt stricter measures than required by the Fifth Anti-Money Laundering Directive? Share your thoughts on the subject in the comments section below.
Images courtesy of Shutterstock.
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When we think of the unbanked, we envisage citizens of developing nations who lack the means and documentation to obtain access. But you don’t have to be a Mongolian goat herder to find yourself financially excluded. In the West, relatively affluent citizens are having their banking services withdrawn suddenly and without warning. Their ‘crime’? Buying and selling bitcoin.
Banks, like politicians, are a necessary evil. Few people wax lyrical about them, but begrudgingly accept that they are an unavoidable part of civilized society. In the 20 years I’ve banked with Natwest, I’ve had plenty of cause to bitch about them. Their service is poor and their products inadequate, and like most of their kind, will have gone the way of print media in a decade, as better forms of money and better means of doing business render the banking system obsolete. In the here and now, though, I depend on my bank, because a man can’t live on crypto alone.
Banking is one of the few constants in our lives. Friends and employers come and go, but ever since opening an account in our formative years, we are prone to sticking with our bank through thick and thin. I was no different up until Wednesday, when my tenure with Natwest came to an abrupt end after they pulled the rug from under my feet, prompting me to rage quit. As a result, I no longer have a bank account, a resource that most people my age would not only take for granted, but would have toiled over for years to accrue a five-figure balance at minimum.
The story of my banking blockade isn’t tragic or deserving of sympathy. But it warrants telling nonetheless, for it will be familiar to a number of readers who have bought or sold bitcoin. If this can happen to me, it can happen to anyone.
A Plague on All Your Banking Houses
Like most people who work in the cryptoconomy, I have cause to cash out bitcoin for fiat sporadically to pay the bills. I’ve used Localbitcoins (LBC) for this purpose since 2013, typically selling a couple of hundred bucks at a time, with the buyer transferring the funds to my bank account. On occasions, I’ve had cause to sell higher amounts, but never enough to trigger money laundering checks or prompt awkward questions from the bank. I’m not that dumb. As a result, I’ve successfully completed hundreds of trades on LBC without triggering the involvement of my bank.
All that changed in an instant on Wednesday. I went to meet a mate for a drink, but when I tried to withdraw cash from an ATM, my card wouldn’t work. I went into the bar and tried to pay by card, asking the barman to run it through the machine before pouring my pint. It was also declined. Figuring Natwest’s entire banking system might be down (not everything runs as reliably as Bitcoin), I opened my mobile banking app, only to find I was locked out of that too.
As someone who works in cryptocurrency, I’m acutely aware of the risks posed by social engineering, and it was at this point that I glanced at the 4G symbol on my phone to check I hadn’t been SIM swapped. Mercifully, nothing seemed to be amiss there, but I was still without access to funds, and no closer to finding out why. As anyone who’s ever had their card blocked while abroad will attest, it induces a feeling of helplessness coupled with embarrassment at having your purchase declined. I wasn’t freaking out, but I was pissed off. Now I would have to phone my bank in a bid to find out what was wrong. I hate phoning people.
10 minutes of pre-recorded disclaimers and muzak later and I was connected to a telephone operator who confirmed that a block had been placed on my account, but they couldn’t inform me why – that would require transferring me to another department, with another dash of muzak while I waited, for good measure.
“Okay, so there’s been a block placed on your account because we’ve been asked to investigate two suspicious transactions dating from the third of May,” I was told. “There’s one for £1,000 and another for £8,000 with pay-in references … do you recognize these?”
A couple of points immediately stood out. Firstly, these incidents took place six weeks ago, and they’re only acting on it now? And secondly, I can’t even recall what I had for breakfast yesterday – how am I meant to recall two of the several hundred transactions to pass through my account since the start of May? Especially since I can’t log in and view the information pertaining to them, because I no longer have banking access.
Incidentally, losing your banking account doesn’t just cut off your funding: you also lose access to all the payment details you had stored for friends, direct debits, child support, car insurance and the rest. You have to message clients telling them not to pay into your account and friends requesting they resend their banking details. It’s a total ball-ache.
Bitcoin Is Bad, M’kay?
Based on the pay-in references the banking official reads off, I’m all but certain these are Localbitcoins sales, though I’ve no idea why they should have been flagged as suspicious. £1,000 isn’t remotely high enough to trigger AML checks, nor is it the highest amount I’ve ever cashed out. I refrain from mentioning the B-word to the banker, not because I fear the repercussions of admitting to trading bitcoin, but because it’s none of his god-damn business.
I have no idea who I sold those coins to – they were two pseudonymous usernames out of hundreds on LBC – and I don’t want to know either. I couldn’t care less whether the bitcoin I sold them was being used to purchase methamphetamine or depleted uranium: that’s none of my business. Moreover, even if I wanted to due diligence my counterparties, I would have no means of doing so. What I do know is this: the people I sold those coins to were regular LBC traders, who do this sort of thing day in, day out. As a result, the likelihood of those two transactions involving any sort of fraudulent or nefarious activity is extremely low.
I don’t tell any of this to the official on the other end of the line. Instead, I maintain my calm and point out the inconvenience of having my account shuttered without warning, cutting off all financial access. I point out that if the bank wanted to discuss these transactions with me, they have all my details – phone, address, email – and thus there was no need to freeze my account to get my attention. I then suggest that if they wish to obtain my assistance in investigating these “suspicious” transactions, restoring my account would be a good first step.
The employee tells me they can’t do that until I’ve complied with the request, and that’s when I politely tell him where to go. “We’re through.” I hang up the phone, and at that moment, my 20-year relationship with the banking world comes to an end. Sure, I could cooperate and beg for my account back, but that’s not my style. I have a problem with authority and being told what to do. Besides, how do you prove a negative, and show that a crime hasn’t been permitted? Fuck you Natwest and the horse you rode in on. Fuck you Natwest, Clydesdale, Wells Fargo and every other crumbling bank that thinks it can decide how its customers should spend their money. Your demise can’t come fast enough.
Thanks for reaching out to us. Unfortunately, Wells Fargo does not allow transactions involving cryptocurrency. -Josh
On the very same day that I was rage quitting on Natwest, I received a message from another LBC trader. He had no idea of the ordeal I’d just experienced, but had one of his own to share. “I feel like I’m being hounded by the banks,” he began. “Not only has my 20 year old halifax acc had a block put on it, but now my Revolut acc has been frozen with all my cash in there! Which bank, or fintech bank would you recommend using for this kind of business?”
I wasn’t in a position to recommend any banks, but I was interested in learning more about his predicament. He continued: “Revolut wanted me to explain where I got the 800 quid to start trading, I told them the truth – I sold a bike, an ipad. I then had to show them my trading history on lbc, then they asked for my tax statement(??), I told them I don’t have a tax statement, they then asked again!”
The intrusive and unreasonable questions didn’t stop there. Revolut proceeded to ask the guy why he had 50-100 BTC trading volume listed on his LBC account (which, for the record, is a low amount). He told Revolut that he was trading in an Asian country during the 2017 boom, before moving back to the UK, whereupon he decided to use what little money he had to try again. At this point, Revolut asked to see his residency permit for the country he’d been in. He explained that he wasn’t a resident there, and they asked him to produce his travel visa instead, which he reluctantly did. Revolut then said they would get back to him. Meanwhile, his account containing £800 remains suspended.
Unregulated peer to peer money is an existential threat to all governments.
Why? Simple. To govern is to control. Money that doesn’t allow centralized issuance or control strikes directly at this.
It’s hard to work out what any of this has to do with bitcoin – or to crime for that matter. Blackstone’s ratio famously holds that: “It is better that 10 guilty persons escape than that one innocent suffer.” The banks and their cronies – the governments and three-letter agencies including the IRS – would rather that 10 innocent people be criminalized than one guilty person should break the law. In the U.S., there are citizens currently facing jail for trading bitcoin. And we’re not talking about real crimes here, either: we’re talking about invented meme crimes like money laundering, which only exist because of a war on plants.
But I digress. The point of this lengthy diatribe is thus: until such a time as it’s possible to be out and proud about bitcoin, keep that shit schtum. Don’t mention it to your bank, hint at it, or receive a pay-in reference that could be in any way associated with it. Even if you do take all reasonable precautions, however, if you’re a frequent bitcoin trader, you’re liable to fall foul of the banking system sooner or later. When that happens, you’ll have two choices: grovel to have your account reinstated, or flip them the bird and take your business elsewhere.
As for me, I think I’m gonna go dark for a while. I’ll still sell coins on LBC and local.bitcoin.com, but I’m not clamoring to open another bank account any time soon. After 20 years, it feels strangely liberating to no longer be at the mercy of the banks. Bye, Felicia.
Have you experienced banking issues for buying or selling bitcoin? Let us know in the comments section below.
A New Jersey man has been indicted this week for converting over $2 million to bitcoin and operating a private exchange business not registered with the U.S. Secretary of the Treasury. According to a July 24 press release by the U.S. Attorney’s office, 46-year-old William Green could face up to five years in prison and a $250,000 fine if convicted. Green isn’t alone. With tighter and tighter crypto regulations being imposed worldwide, entrepreneurs, small startups, and even unsuspecting hobbyists are being indicted and threatened by the “crypto cop” dragnet.
From private trading to business expansion and mining, Bitcoin provides myriad opportunities for entrepreneurs. Unfortunately, state regulators are not always so keen on this progress. Like William Green, Detroit entrepreneurs Sal Mansy and Missouri family man and Bitcoin hobbyist Jason Klein have found out the hard way in recent years. Trading one’s own assets — sometimes even in negligible amounts — can result in a devastating face-off with the jaws of the U.S. justice system. Unlike Green, who is reported to have been dealing in larger sums, Klein was selling small amounts of bitcoin even reported these transactions on his taxes. He was pressed by undercover federal agents to trade larger and larger amounts and initially refused, noting to them explicitly:
I said, ‘I’m not your guy. It’s a hobby for me.’
Eventually, however, they would succeed in getting their trades, using code words for drugs that Klein knew nothing about, and finally making him feel uncomfortable and avoidant. He did make one final trade however, and that was enough to snag him. In the end he avoided the potential five-year jail sentence and paid a $10,000 fine, plus the $2,122.68 he had earned in fees back to the IRS. The kicker to all this is that, as mentioned above, Klein reported his business in crypto, attaching a detailed statement to his 1040, and traded under the obvious username “jrklein” on localbitcoins.com.
As for Mansy, he was a Detroit entrepreneur arguably bringing money into the struggling state of Michigan by way of his business, but ended up getting slapped with a year and a day in prison, a $118,000 fine, and three years of supervised release.
Killing ‘Crypto Valley’
Of course individual traders are not the only targets of the crackdown trend. Similar legislation now set in motion in Japan will likely stymie startups in Japan’s “crypto valley,” Shibuya, Tokyo, in 2020. May 31 legislation amending the Financial Instruments and Exchange Act and Payment Services Act will take effect in April next year, classifying any company that even stores digital assets as a “cryptographic asset exchange.”
Masahiro Yasu, CEO of Japan’s first blockchain-based social media platform ALIS, lamented the decision in an interview:
Smaller companies will need abundant funds if more stringent management systems are required. It may be impossible to maintain existing business unless it changes.
With powerful intergovernmental organizations like the Financial Action Task Force (FATF) receiving support from G20 leaders for recommended policy worldwide, it’s no surprise that investigations and specialized government crypto enforcement teams are being formed at an ever-increasing rate.
IRS, New York Legislature Prepare for Action
New York State Assembly member Clyde Vanel announced on July 22 the appointment of six experts in the field of cryptocurrency to the 13-member New York State Digital Currency Task Force. Newly appointed members include Joseph Lubin of Consensys, Ripple’s Director of Regulatory Relations Ryan Zagone, CEO of Global Blockchain Business Council Sandra Ro, Microsoft’s Yorke Rhodes, Cardozo School of Law professor Aaron Wright, and Yaya J. Fanusie, adjunct fellow at the Foundation for Defense of Democracies.
These appointments have come under fire in the New York crypto community due to the heavily government-embedded and decidedly corporate nature of the appointees, as well as a perceived lack of qualification and expertise in the field. Not to mention Joseph Lubin’s current controversial legal entanglements.
Meanwhile, the IRS is not only suggesting combing social media for wallet addresses, interrogating friends and family of crypto holders, and subpoenaing companies like Apple and Google for records of crypto wallet downloads – they’re also sternly warning tax evaders about the risks of trying to secretly hold digital funds.
Starting in June, the IRS began to issue “soft notices” warning individuals that they may have misreported or neglected to report crypto assets. The soft notices are named such as they ostensibly encourage voluntary cooperation. Ironically, there’s nothing ultimately voluntary about it, as if they are ignored violent enforcement can be brought to bear. One of the notices reads in part:
We have information that you have or had one or more accounts containing virtual currency but may not have properly reported your transactions involving virtual currency, which include cryptocurrency and non-crypto virtual currencies.
There are chilling undertones, coming from the group that targets small business owners and quiet dads in Missouri. Ironic to some is that the notices come from a government whose history of failing to prosecute large state-embedded banks with ties to drug and weapons trafficking, is indisputable.
Hi-Vis Examples Made of Lawbreakers
This kind of power brought to bear is not uncommon for big cases involving large sums of money. Nor is it uncommon for the state to deal unusually harsh sentences in order to make an example of offenders. This is admittedly one of the ways government attempts to deter others from trying similar business ventures, and was reportedly mentioned in court documents even in Klein’s small case. In much larger cases, like that of Silk Road founder Ross Ulbricht, it’s argued to be an obvious technique, as the then 30-year-old was sentenced to double life imprisonment plus 40 years without parole, a punishment many murderers and rapists do not even have to face.
As for the recently indicted Green, his only crime detailed so far was running a website called “Destination Bitcoin” (which at press time appears to have been removed) and converting customers’ fiat to BTC for a fee. The juggernaut of state alphabet soup involved in the sting is impressive. FBI, IRS, Homeland Security, and Immigration Enforcement teamed up to bring about the case. From small-time hobbyists to big volume private traders, the crackdown on non-state-regulated exchange is ramping up, and it would appear that no one is exempt.
How do you feel about the current regulatory climate? Let us know in the comments section below.
During that period, users on Localbitcoins alone generated volumes of over 57 billion bolivars, beating the previous all-time high of 49 billion, which appeared in the previous week.
As Cointelegraph reported, Venezuela’s currency continues to suffer from runaway inflation, which estimates claim has reached 10,000,000%, leading citizens to resort to alternative means of storing value.
Yet as the bolivar count on Localbitcoins keeps growing, in Bitcoin terms, the number is falling. The 57 billion figure for last week equated to just 574 BTC — considerably less than in some previous weeks earlier this year.
Underscoring the weakening bolivar, Venezuela’s cryptocurrency trading is not supported by the government, which also imposed embargoes on foreign currency.
Earlier this year, the Lightning Torch transaction relay raised 0.4 BTC ($4,000) in funds among Bitcoin users for Venezuelans unable to escape the country.
According to data from CoinDance, LocalBitcoins global weekly bitcoin trading volume hit $65.6 million in the week ending on Sunday, July 7. This is the highest level since November last year when the weekly trading volume of the platform hit $67.7 million in the week ending on Sunday, November 24, 2018.
LocalBitcoins Global Weekly Trading Volume | Courtesy of CoinDance
In some countries, last week represented an all-time high LocalBitcoins volume. For instance, in Argentina, last week the platform’s trading volume hit a new high of over 15.22 million Argentine Pesos (over $364,000).
Venezuela also saw over 47 billion in Venezuelan Bolivars traded, the highest volume to date. Worth noting, however, is that the volume has actually been decreasing in BTC terms, highlighting the rampant hyperinflation plaguing the country.
Nevertheless, the rise in volume has not gone unnoticed. Senior market analyst at stock exchange Etoro Mati Greenspan pointed out in a tweet sent earlier today that the current levels are at their highest since November last year and commented:
“Peer to peer bitcoin trading is strong atm.”
Previously, LocalBitcoins lost a portion of its traders after quietly removing in-person cash trading from its service at the beginning of June. The company publicly confirmed the ban on Twitter and stated that the platform had to renounce local cash trading to “adapt to the current regulatory environment.”
As Cointelegraph reported at the end of June, P2P bitcoin trading platform Bisq is seeing record trading volumes after Localbitcoins removed in-person cash payments.
A new local bitcoin cash venue opens for trading worldwide and the community is nearing a funding goal milestone for BCH developers. Watch these and other developments discussed in this week’s video update on Bitcoin.com’s Youtube channel.
Local BCH Venue Opens as Localbitcoins Removes In-Person Cash Trades
This week’s show discuses the successful opening of Local.Bitcoin.com, a privacy-focused peer to peer global marketplace for trading bitcoin cash (BCH). Over 11,000 people have signed up to the service and already created more than 3,000 offers since the platform’s official June 4 launch date. The launch couldn’t come at a better time for many cryptocurrency traders who prefer to transact in-person for cash as Localbitcoins just removed that option a few days ago.
The weekly update also covers how the bitcoin cash community is advancing in its efforts to support developers with a fundraiser whose contributions are donated to Bitcoin ABC, Bitcoin Unlimited, BCHD, and Bcash. The campaign is closing in on the 15% milestone out of an initial goal of raising 800 BCH by Aug. 1, 2019.
Other developments in the bitcoin cash ecosystem mentioned include the non-custodial Badger Wallet being made available for iOS mobile devices, a recently released browser extension that enhances bitcoin cash addresses for easy tipping, decentralized social network system Memo adding support for creating SLP tokens, and Monarch Wallet adding SLP support for users on both iOS and Android devices. Additionally covered in the weekly update is how Anypay and Cointext have partnered to make remittance transfers cheaper and faster for cross-border payments using bitcoin cash.
Make sure to subscribe to the Bitcoin.com Youtube channel and leave a comment on the latest video.
Images courtesy of Shutterstock.
Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Bitcoin.com Markets, another original and free service from Bitcoin.com.
Tron CEO Justin Sun gets to lunch with Warren Buffett for $4.5 million, while Facebook’s coin may come out this month.
Coming every Sunday, the Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.
Mark Karpeles, the former CEO of long-defunct Japanese cryptocurrency exchange Mt. Gox, denied press claims this week that he is returning to blockchain. Karpeles said that his activities with Tristan Technologies will not involve the cryptocurrency sector, as previously reported, and that the firm is not a startup and not related to blockchain. In comments to Cointelegraph, Karpeles said that he wasn’t “sure how this got reported wrong” and that his main goal is to “try to bring back Japan near the top of the IT industry.” A judge acquitted Karpeles of embezzlement in March and is currently appealing a lesser conviction of data manipulation, all in relation to the hack of Mt. Gox.
Canadian startup Kik has been sued by the United States Securities and Exchange Commission (SEC) for an unregistered $100 million token offering. According to the SEC’s complaint, the commission alleged that Kik’s digital token sale was not compliant with U.S. securities laws, as it had not registered the offering with the proper authorities. The SEC’s complaint comes right after Kik’s recent announcement that the company is launching a $5 million crypto initiative to fund a lawsuit against the SEC, with a campaign called DefendCrypto. Steven Peikin, co-director of the SEC’s Division of Enforcement, said in a press release that, by conducting its kin token sale, Kik “deprived investors of information to which they were legally entitled and prevented investors from making informed investment decisions.”
Justin Sun, Tron founder and CEO, has won an eBay charity auction to have lunch with Warren Buffett, renowned investor and CEO of Berkshire Hathaway. In order to win the lunch, which Buffett has participated in for 20 years, Sun allegedly bid a record-breaking $4,567,888. The winner will be able to bring along seven friends to a New York steakhouse, and all proceeds from the auction go to San Francisco-based nonprofit Glide Foundation. Sun wrote in a statement that the bid was a key priority for the Tron and BitTorrent team. Buffett has long been known for his negative stance on cryptocurrencies, although he has made positive comments in regard to blockchain.
Global peer-to-peer (p2p) crypto exchange LocalBitcoins officially confirmed this week the removal of trading in local fiat currencies. The Finland-based exchange had previously removed the cash trading option on June 1 with no announcement, which caused some outrage in the crypto community. In an official statement this week, the exchange noted that its liabilities are determined by the Act on Detecting and Preventing Money Laundering and Terrorist Financing, which requires them to follow certain regulations. 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.
Social media giant Facebook will reportedly announce its cryptocurrency project this month, and employees will be allowed to take part of their salary in the coin. According to unnamed sources, the white paper for the coin will be released on June 18. As well, Laura McCracken, Facebook’s head of financial services and payment partnerships for Northern Europe, said in an interview this week that the stablecoin would not only involve a U.S. dollar peg. Other media reports this week have noted that there are now 100 people known to be working on the crypto project via profiles on professional networking platform LinkedIn. Winners and Losers
This week in the markets, bitcoin is below $8,000, trading at around $7,933, ether is at $245 and XRP at $0.41. Total market cap is about $253 billion.
The top three altcoin gainers of the week are posscoin, bitcoin 2 and hempcoin. The top three altcoin losers of the week are bzedge, pandemia and quantis network.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Most Memorable Quotations
“The unwillingness to allow more competitors to offer geared ETFs seems to be another example of denying or curtailing access to a product that would be useful to some investors.”
“What a difference it would have made a decade ago if blockchain technology on a private distributed ledger accessible to regulators had been the informational foundation of Wall Street’s derivatives exposures.”
“I don’t recommend bitcoin in either direction because I don’t really care for it in terms of an asset, but I do care for it as a signalling mechanism that I think was a tip-off to this bounce in gold.”
Peter Boockvar, chief investment officer at financial planning and wealth advisory firm Bleakley Advisory Group
“My love for Japan has not changed. Japan used to be engineering superpower in terms of its PCs but right now, taking the cloud for example, it’s the U.S. that dominates. But I still believe in the potential Japan has and I would like to develop that.”
Coinroom, a Polish cryptocurrency exchange, has reportedly shut down its operations and disappeared with customer funds. While the total amount lost has not been disclosed, some users said that they had up to 60,000 zloty (around $15,790) in their accounts. Before ending its operations, Coinroom reportedly asked customers in an email to withdraw their money in one day, while in reality, customers have said that they were unable to get all of their money in this final withdrawal. A spokesperson for the district prosecutor’s office in Warsaw said that proceedings had been initiated against Coinroom for unregistered crypto payment services.
According to Twitter user and malware researcher Fumik0_, a new website is spreading cryptocurrency malware. The aforementioned site reportedly imitates the website for Cryptohopper, a site where users can program tools to perform automatic cryptocurrency trading. After a user goes on the site, which displays the logo of Cryptohopper in an attempt to trick the user, it automatically downloads a setup.exe installer that will infect the computer once it runs. The installer infects the computer with an information-stealing Trojan, which then also installs two other Qulab Trojans for mining and clipboard hijacking deployed once every minute to collect data.
Cryptocurrency wallet service GateHub said this week that hackers compromised almost 100 XRP Ledger wallets, resulting in the loss of around $10 million. In a statement, GateHub said that it was notified by community members of the loss of funds, following which it discovered increased application programming interface (API) calls coming from a small number of IP addresses. While one of those who warned GateHub about the breach reported that almost 13,100,000 XRP ($5.37 million) had already been laundered through exchanges and mixer services, GateHub has stated that the investigation is still ongoing.
After Tezos updated without forking and Iota introduced an ostensibly centralization-killing element, Cointelegraph examines the importance of decentralization by some of the large players in the crypto community.
With some anonymous Satoshi Nakomoto posers coming out of the woodwork, as well as one very not-so-anonymous Craig Wright, Cointelegraph looks at the potential motivations for claiming to be bitcoin’s father.