The number of daily XRP transactions is going through the roof today, nearing an all-time high of 1.70 million without a clear reason why.
The number of daily XRP transactions is going through the roof, nearing an all-time high of 1.70 million.
Daily transactions boom to 1.6 million
According to the crypto data tracker BitInfoCharts, XRP’s daily transactions now account for more than 50% of all the cryptocurrency transactions during the last 24 hours. Ether (ETH) comes in second, while Bitcoin (BTC) and Bitcoin SV (BSV) settle for a shared third place.
The last time XRP’s daily transactions were this high, the crypto markets were reveling in the middle of the famous bull run of December 2017.
On Oct. 21, XRP was processing around 730,000 daily transactions, while only eight days later, the third-most-popular crypto coin was recording 1.6 million daily transactions. This constitutes an increase of more than 100% in less than a week. Since then XRP has been eyeing a new all-time-high in daily transactions.
It is unclear what is causing the boost in daily transactions, but it is almost certain that speculation is about to run wild. One reason for this sudden boom, could be Ripple’s upcoming Swell event next month. Another possible reason is Ripple’s partnership with payment service Moneygram that is perhaps now exploring new ways on how to use XRP.
Regardless, most likely something significant is happening behind the scenes as the cryptocurrency is seemingly about to break its record of 1.7 million daily transactions.
XRP is currently trading at around $0.302 and has gained 1.6% in the last 24 hours. The altcoin saw its highest price point over the week on Oct. 26, with a weekly low of $0.262 on Oct. 23.
Ripple joins Blockchain Association
In October, the San Francisco-based blockchain startup Ripple announced that it was joining the Blockchain Association. Ripple’s membership in the Blockchain Association will put the company in contact with many of the regulators and lobbyists working in the space. The association is a non-profit organization that consists of blockchain advocates and promotes adoption of blockchain technology around the globe.
Government authorities are looking for new ways to track crypto to prevent or solve financial crimes, but this can decrease privacy.
Tracking cryptocurrency transactions is getting easier for law enforcement agencies. On Oct. 16, Cointelegraph reported on how authorities in the United States successfully shut down an international child pornography site. To identify the criminals, the investigators used tools developed by analytic company Chainalysis, which helped to track the Bitcoin (BTC) wallets, used by the criminals to receive payments from customers.
As authorities find more and more ways to track cryptocurrencies, criminals use new techniques, and many sites remain beyond government control. Who will win this battle and can the fight against financial crimes grow into total control over users?
Cryptocurrencies are not anonymous
Before cryptocurrencies gained worldwide popularity, they attracted the attention of criminals who accepted Bitcoin payments in exchnage for drugs and weapons, while others used it to financing terrorism and launder money. As a result, for some time, most had been under the impression that cryptocurrency transactions are anonymous.
In reality, digital currency is far from anonymous. Every transaction carried out in a decentralized network is forever recorded on a public blockchain. Indeed, in order to become the owner of a crypto wallet, users are required to provide personal data.
This is where anonymity ends, though. Any movement of the cryptocurrency — whether it is payment for goods or services, exchange or transfer — becomes visible to all users, and the history of these transactions is tied to each coin, even if it changes its owner later.
According to cybersecurity firm Ciphertrace, its software can track 87% of the global cryptocurrency transaction volume, which may mean that authorities can use monitoring methods not only against criminals but also against ordinary people.
Largest illegal cryptocurrency transactions detected
Cryptocurrencies’ anonymity and their use for criminal purposes no longer seems to be a difficult task for law enforcement agencies. The largest operations to dismantle criminal structures and the confiscation of illegally obtained cryptocurrencies are indicative in this regard. One particular report for 2013–2018 shows, for instance, that global authorities have confiscated over 453,000 BTC, with the U.S. alone accounting for 200,000 BTC.
Sale of illegal goods
The leader in facilitating illegal cryptocurrency transactions is the infamous darknet, a shadow marketplace where hundreds of thousands of illegal goods are sold, including drugs, weapons and crypto malware.
The first such marketplace called Silk Road was liquidated in July 2013. The FBI initially managed to seize about 26,000 BTC, but by the end of that October, the figure had reached 144,000 BTC. As of today, this amount is equivalent of about $5 billion. Four years later, in July 2017, the FBI detected and shut down the AlphaBay platform, confiscating 1,605 BTC, 8,309 Ethereum (ETH), 3,692 ZCash and some Monero (XMR).
Shortly after the AlphaBay arrest, the owners of another marketplace — Hansa Market — were apprehended by U.S. authorities and the platform was shut down. During the operation, the police confiscated more than 1,200 BTC and transferred data about the buyers and sellers to authorities throughout Europe.
Theft and money laundering
In February 2019, U.S. law enforcement agencies not only detected and confiscated but also returned 119,756 BTC (about $65 million at the time) to the Bitfinex exchange, which had been hacked in 2016.
Notably, the FBI demonstrated the highest efficiency in terms of the number of cryptocurrency crimes investigations. During one of them, the founder of the Bitcoin Savings and Trust exchange was identified and accused of organizing a Ponzi scheme in 2016. The fraudster earned more than 720,000 BTC by illegally selling securities. Later, in 2017, investigators dismantled the Coin.mx crypto exchange, the owners of which managed to illegally exchange more than $10 million in cryptocurrency.
The biggest crime that has been investigated by tracking cryptocurrency transactions is probably the laundering of 530,000 BTC stolen from the Mt. Gox exchange. For more than three years, U.S. authorities, together with a group of independent Bitcoin security experts called WizSec, carried out an investigation, which resulted in the case against Alexander Vinnik in 2016.
Vinnik allegedly used various exchanges to sell Bitcoins, thus leaving a lot of tracks that supported the case against him. Therefore, as soon as the police discovered where the Bitcoins stolen from Mt. Gox were deposited to, the investigators said that it became much easier to link Vinnik to the case — and over time, experts were able to piece together a timeline of events. However, the question still remains, who were the people behind the attack?
How they track
In most cases, authorities use traditional methods for tracking cryptocurrency transactions that are no different from those used to monitor any other suspicious financial operations. This is the identification of the user through the data obtained during Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures, the mapping of IP servers, withdrawal data comparison, and other methods.
Therefore, crypto exchanges and platforms that have user data of cryptocurrency holders play an important role in the timely detection of suspicious transactions. In fact, it was a cryptocurrency exchanges that helped the Japanese national police agency disclose data on 5,944 suspicious crypto transactions in 2018.
On Aug. 30 this year, the agency announced its plans to introduce a system that can track cryptocurrency transactions in the country. The system is supposed to detect suspicious transactions by comparing them, and then accurately determine the source and destination of illegal money. In China, according to reports released in March, the Public Information Network Security Supervision has been monitoring foreign crypto exchanges that serve Chinese citizens.
Meanwhile in the U.S., authorities have been working with exchanges for several years now. In particular, in November 2016, the police demanded that Coinbase provide the Internal Revenue Service with information about users who have cryptocurrency wallets.
Bitcoin Big Bang
Recently, innovative solutions have appeared that can track suspicious cryptocurrency transactions and identify their initiators using decryption algorithms, software and blockchain.
For example, the company Elliptic Enterprises has created an algorithm for recognizing illegal Bitcoin payments. The software detects suspicious transactions based on patterns previously used by financial criminals. At the same time, according to the developers, the solution is able to correlate digital identities with real-world profiles.
In particular, the company developed the Bitcoin Big Bang visualization map that summarizes all BTC payments over the past six years, which allows for the rapid detection of suspicious transaction chains and organizations involved in them.
Suspicious transactions alert
Chainalysis, a blockchain analytic firm, has developed a real-time alert system called Chainalysis KYT, which informs users about suspicious transactions. According to the developers, the solution is primarily designed for cryptocurrency companies and financial institutions and allows them to reduce regulatory and reputation risks.
Chainalysis KYT analyzes 15 cryptocurrencies and is used by large exchanges. In particular, on Sept. 26, Bittrex announced the introduction of the Chainalysis KYT solution to track suspicious transactions and other activity on the platform. The forensic investigation tools created by the Chainalysis developers also helped to reveal the owners of What to Video, a website that earned about $353,000 in BTC by selling child pornography videos. In total, 1.3 million BTC addresses were involved.
Having found that some users of the site paid for pornographic videos using their crypto exchange accounts, Chainalysis used a tool called Chanalysis Reactor to analyze cryptocurrency transactions. As a result, the investigators identified certain BTC addresses for which it later requested data from the exchanges.
Deanonymization and KYC
The South Korean government has totally banned anonymous trading at the start of 2018. A system of real names has been introduced in the country, with all the traders obliged to have an account with a local bank, and trading platforms prohibited from listing anonymous cryptocurrencies.
Meanwhile, private companies are already declaring that most of the cryptocurrencies are controlled. In particular, on Oct. 15, CipherTrace announced that it can now track more than 87% of the transaction volume. However, anonymous coins such as Monero are not supported at present.
As such, the CipherTrace Financial Investigations is another solution that can deanonymize players in the crypto market and track criminal transactions, including darknet payments, initial coin offering investments, stolen funds and so on.
According to the company’s website, the platform only needs the user to enter a cryptocurrency address or a transaction ID into the search bar, which auto-completes long addresses, for the system to start working. In the case that illegal actions are detected as related to an address, the system will then automatically identify all other relevant transactions.
In the U.S., the IRS, FBI, Drug Enforcement Administration, Immigration and Customs, and other organizations currently use solutions by CipherTrace, Chainalysis and Elliptic.
Well-known mining equipment manufacturer Bitfury has developed a solution called Crystal for blockchain investigations. According to the creators, Crystal not only helps to identify wallet addresses but also connects them with real-world profiles.
Crystal helped the police conduct a thorough investigation of the movement of funds withdrawn from the Zaif exchange during its hack in September 2018. As a result, specialists were able to track that a fourth of the stolen Bitcoins was sent to the Binance exchange in a series of small transactions, and then passed through a mixer to cover the tracks.
Regulators are releasing more and more requirements, obliging banks and operators that carry out cryptocurrency transactions to comply with KYC and AML procedures. Notably, some exchanges ask their users only for a passport, while others request additional documents — for example, a utility bill or a driver’s license. Given that a third-party’s passport and documents are easy to find on the internet, this procedure can be bypassed in some cases.
Another problem that authorities may encounter when trying to track cryptocurrency payments are mixer platforms, which compile crypto transactions of equal value when processing them, thus covering up the tracks. As a result, users receive the same amount of crypto, minus the commission, but in different Bitcoins.
Are cryptocurrencies as dangerous as authorities believe?
Using unregulated websites entails a high risk for criminals, and the liquidity of such services is not always sufficient for laundering large amounts of money. While exchange of $1 million can go unnoticed on Binance, selling the same amount on a small exchange may take days.
No matter how many ways there are to launder money through cryptocurrencies, this is not the most popular tool for a fraudster today. According to Chainalysis, illegal cryptocurrency transactions comprised less than 1% of all Bitcoin activity in 2018, down from 7% in 2012.
Cryptocurrencies have got a long way to go before they become an attractive way to launder money. In particular, the market must grow, and alternative instruments — such as anonymous cryptocurrencies — must reach big trading volumes and liquidity. And yet, according to the analytics platform Diar, $5.7 million was spent on analyzing cryptocurrency transactions in the U.S. alone.
The community is concerned that Bitcoin’s pseudonymity may be used by authorities to tighten control over the personal lives of ordinary citizens. In April 2019, Chainalysis called on the Financial Action Task Force to refrain from excessive tightening of the cryptocurrency industry regulation, as the measures proposed by the organization could lead to the massive closure of exchanges and other infrastructure services, forcing criminals to find new ways to circumvent laws.
Ordinary citizens cannot avoid being affected by the stricter government control, according to Matthew Green, one of the key developers of the Zcash network. It was also reported that the U.S. National Security Agency is developing the “Oakstar” system, which analyzes several cryptocurrencies. The program can allegedly associate particular people with their cryptocurrency wallets, since users download software that sends their internet data.
According to Arnold Spencer, general counsel for Bitcoin ATM producer Coinsource and the former assistant U.S. attorney in Texas, who prosecuted more than 100 federal cases, there is a hypothetical scenario in which compliance becomes such a burden that digital money is no longer convenient. However, in reality, the possible benefits outweigh the negatives. He explained to Cointelegraph:
“Digital currency compliance is convenient for customers. Many BTMs can process Bitcoin transactions for new customers in minutes. […] On exchanges, it may be inconvenient to register and clear compliance when you first sign up, but individuals can buy or sell or transact with digital money from their home computer in a few clicks. Much more convenient (and less expensive) than using dollar bills or credit cards.”
Spencer added that the issue of cryptocurrency transaction tracking is a debate surrounding the balance between personal privacy and public safety:
“That debate is perpetual. But the technology surrounding compliance is getting better every week, and compliance is becoming more and more convenient. My view is that we are heading in the right direction — we need a modicum of compliance to protect ourselves, but getting that level is getting easier and easier.”
Moreover, according to him, a well-developed regulatory framework would play an important role in helping governments detect criminals and protecting ordinary citizens from illegal actions, saying, “In an age in which businesses collect, analyze and sell our private information, it makes enormous sense to have legislation which protects the privacy of our financial transactions.“
In a Twitter survey on Oct. 26, Buterin quizzed followers about their opinion of reversing chain activity in the event of a major hack of an exchange or similar entity.
“Suppose a popular smart contract wallet that a large portion of the ETH community uses gets hacked. This could be reverted by reverting all chain activity since the hack and doing a DAO-style HF to recover the funds,” he wrote.
Continuing, he asked how many coins would need to be stolen in order for followers to support manual reversal.
The survey appeared to touch a nerve among commentators. Ethically, they argued, the amount of money should not matter — rolling back transactions removes the benefits of a blockchain without centralized control.
Correspondingly, more than 60% of the over 10,000 responses to the survey confirmed they would not tolerate remedial measures under any circumstances.
Ethereum developers have reversed transactions before, notably following the notorious Decentralized Autonomous Organization, or DAO, hack in June 2016, which lost Ether (ETH) worth $60 million at the time.
Ethereum is currently undergoing a major transformation in a long-term upgrade which will ultimately even see it change its algorithm. The changes will help resolve some of the network’s growing pains – in August, Buterin warned its blockchain was almost full.
The largest altcoin by market cap, ETH has nonetheless fared underwhelmingly this year as Bitcoin (BTC) cements its position at the top.
Based on Finder’s survey of 2,068 Americans, 36.5 million people in the United States own some form of crypto to date.
The number of Americans who own cryptocurrencies has almost doubled in 2019, from 7.95% in 2018 to 14.4%, according to a new survey by Finder.
36.5 million Americans own crypto
Finder, an Australia-based financial services firm, has surveyed 2,068 Americans to figure out that 36.5 million people in the United States own some form of crypto to date.
Titled “A rising number of Americans own crypto,” the survey was released on Oct. 14, as Finder tweeted.
Average $5,447 holdings versus $360 median amount
According to the survey, the average amount out of the totally owned crypto by Americans accounts for $5,447. However, as nearly three-quarters of respondents actually held less than this amount, the median amount — the value separating the higher part — of cryptocurrency owned by U.S. people stands at $360.
More than half of American crypto holders are considered as “crypto polygamists” as 55.4% of Bitcoin (BTC) owners surveyed by Finder claimed that they also own another form of cryptocurrency. Similarly to other surveys, Finder’s survey says that men own crypto at nearly twice the rate of women, with 19% of men surveyed claiming they hold some type of crypto versus just 10% of women.
3 Reasons to own and not own crypto
According to Finder, the majority of Americans are owning some form of cryptocurrency because they consider it a type of investment. As such, 61% of respondents claimed that own crypto for investment purposes, while just 29.3% said they use it for transaction purposes. Meanwhile, as much as 25.6% of U.S. people hold crypto because they want to store their money outside traditional financial institutions.
On the other hand, lack of ease of use apparently remains the main reason why Americans preferred to stay away from crypto in 2019. According to Finder, 47.9% responded that crypto is “too complicated or difficult to understand” as a reason not to invest in it. That category is followed by 45% of people who simply are not interested in crypto and 23% who believes that crypto is too risky to deal with.
The results of the new research slightly alters from another crypto-related research that was held earlier this year. On April 30, venture capital firm Blockchain Capital released a survey claiming that 11% of the American population owns Bitcoin.
In late September, another survey showed that 32% of Europeans believe that crypto is the future of online payments.
The German Federal Ministry of Finance has expressed concerns about using privacy tokens due to their association with criminal activities and difficulties to track them down.
The German Federal Ministry of Finance has expressed concerns about rising use of privacy tokens due to their association with criminal activities and difficulties in tracking them.
Published on Oct. 19, the ministry’s “First Money Laundering and Terrorist Financing National Risk Assessment” for 2018-2019 provided analysis aimed at the identification of existing and future risks in the field of anti-money laundering (AML) and terrorism financing (TF) in Germany. Among other challenges, the report examines circulation of cryptocurrencies in the darknet for criminal purposes.
Pseudo-anonymous vs. anonymous tokens
The report marks a distinction between pseudo-anonymous and anonymous tokens, noting that pseudonymity allows the analysis of transactions in public blockchains and the evaluation of suspicious movements, while fully anonymous tokens like Monero (XMR) and Zcash (ZEC) enable transactions to remain untraceable and are thus vulnerable to involvement in illegal activities.
In this regard, the Ministry urges oversight of anonymous cryptocurrencies in the future. Although the market capitalization of such coins is still relatively low, the report notes, they are gaining popularity and acceptance in the darknet and eventually may become a real alternative to Bitcoin (BTC).
Risks associated with stablecoins and cash
According to the report, use of crypto assets in TF is currently low. There is evidence of use of crypto assets in the fields of right-wing extremism and Islamism, however, there is no reliable evidence that cryptocurrencies have been used to a greater extent for TF.
Cryptocurrency volatility reportedly prevents its usage as a means of payment to some extent. However, stablecoins — which are pegged to an asset or fiat currency — can ensure stability of value, and thus could lead to an increase in laundering and TF risks, per the report. The report further reads:
“The use of cash, in contrast to the use of pseudonymous crypto assets, leaves no traceable footprint and is easy to handle, so it can be assumed that, for example, the transfer of funds in the field of terrorism financing alongside hawala and money transfer service providers currently continues mainly via cash couriers.”
On Oct. 21, the United States Financial Crimes Enforcement Network (FinCEN) Director Kenneth Blanco said that fintech firms offering cryptocurrency users anonymity must comply with AML laws “just like everyone else.”
Following a giveaway announcement in September, Alistair Milne gives away Bitcoin instead of a $2,600 Denarium gold bar.
Bitcoin (BTC) investor Alistair Milne was eventually forced to send Bitcoin instead of a $2,600 gold bar as part of his recent giveaway.
Following a giveaway announcement on Sept. 19, Milne has revealed the winner as well as other giveaway details in a thread on Twitter on Oct. 22.
As originally envisaged, Milne should have given away a $2,600 Denarium Bitcoin Decennium 2019 as part of the giveaway with the winner expected to be announced on Oct. 19. In the giveaway announcement launch, the entrepreneur specified that in order to be eligible, participants should follow Milne’s Twitter and Instagram account as well as like and retweet the announcement.
Coming in a limited edition of 100 products, Denarium Bitcoin Decennium 2019 is a device that combines a 1.097-ounce gold bar and a built-in Bitcoin cold storage wallet.
“You can’t send gold as you can with Bitcoin”
However, Milne eventually had to giveaway Bitcoin instead of the initially offered Denarium gold bar, explaining that the randomly-chosen winner comes from India, and sending such a device to a person in the country would be a problem. Milne tweeted:
“How to send a gold bar to India without it getting lost/stolen/seized? The short answer is, you can’t. Or you could, in theory, but it is very expensive!”
Actually, the 19-year old giveaway winner Krish Patel also did not mind to get his prize in Bitcoin and did not really want the gold, Milne noted, adding that he would have sold the gold bar anyway as he is doing a part-time job to earn $350 a month.
As such, the parties agreed to proceed with the giveaway in Bitcoin and Milne has sent the $2,600 amount in BTC instead.
Concluding the story, Milne outlined the apparent benefits of Bitcoin as a cross-border transaction tool, claiming:
“Gold is pretty, shiny, etc. but you can’t send it anywhere in the world within minutes as you can with Bitcoin. […] this is why I Bitcoin. No borders. No limits. No permission. No trust. Just two strangers on the Internet transacting & one family’s life changed.”
Meanwhile, India has not officially finalized its stance on cryptocurrencies. In mid-October, the Supreme Court of India announced a delay of a hearing on the Reserve Bank of India’s ban on providing services by banks and financial institutions to crypto-related business in the country.
Web browser Opera now supports payments with Bitcoin directly inside the browser.
Web browser Opera now allows making payments with Bitcoin (BTC) directly inside the browser.
The company announced the news in a press release shared with Cointelegraph on Oct. 21, detailing that Opera’s 350 million users can now send and receive BTC directly from the browser, as well as use the cryptocurrency for purchasing goods and services on e-commerce websites.
Additionally, the browser now enables adding a Bitcoin and TRON (TRX) card into the built-in Crypto Wallet to keep track of the cryptocurrency owned. Charles Hamel, head of crypto at Opera, commented on the new feature launch:
“We believe that opening our browser to more blockchains, including Bitcoin, is the logical next step to making our solution more relevant to anyone who has a Bitcoin crypto wallet and would like to do things with their cryptocurrencies beyond just keeping them in an account.”
The features were previously released in the Beta version of the browser this summer, while the first cryptocurrency available for purchase through the browser was Ether (ETH) in February.
Opera’s Web 3-focused developments
In recent months, Opera has actively presented new developments related to Web 3, the term referring to a new evolution of the web, with the creation of high-quality content and involvement of blockchain, decentralized computing and digital currencies.
The company released the iOS version of its mobile web browser, Opera Touch, that supports Ethereum protocol and Ethereum Web3 apps, and a Web 3 explorer, which enables users to conduct transactions and interact with Web 3.
Although Opera’s market share among other browsers accounts for only 3% as of September 2019, its latest development is another step forward to “an experimental integration of Web 3” and further adoption of cryptocurrencies.
As Hamel previously claimed, the company aims to remove the friction involved in “using cryptocurrencies online and accessing Web 3 via special apps or extensions,” in a bid to make the emerging technologies more mainstream.
In the meantime, cryptocurrency-powered browser Brave claimed high user engagement, with daily active users standing at over 2.8 million, and the number of creators subscribed to its web advertisement network also reportedly increased substantially.
Joe Weisenthal, editor of news for Bloomberg Digital, said that blockchains are essentially inefficient and that “Bitcoin is for making transactions The Man is against.”
Joe Weisenthal, the executive editor of news for Bloomberg Digital, said that blockchains are essentially inefficient and that “Bitcoin is for making transactions The Man is against.”
The comments come from Bloomberg’s Markets newsletter, which Weisenthal reproduced in a tweet on Oct. 17. He elaborated that transactions would not be possible without individuals willing to pay fiat money for Bitcoin (BTC), with blockchains being “inherently inefficient, computationally costly systems,” which only have value when using them for transactions.
Weisenthal urged regulators and lawmakers to consider if it is really reasonable to pour money into the system and to make it easier for transactors to purchase things law enforcement authorities are against. Weisenthal continued:
“If you’re in the business of creating institutional onramps to crypto, you have to be cognizant of the risk that one day regulators wake up and ask: Wait, why did we provide a gateway to provide liquidity into a space, whose express purpose is to let people evade The Man?”
“Nonsense & misinformation”
The post turned into a heated discussion, with the participation of leading industry players. Anthony Pompliano, the founder of Morgan Creek Digital Assets, argued:
“This is wildly inaccurate. You’re claiming that non-censorship is the only value prop of Bitcoin. What about the non-seizure element? What about the disinflationary monetary supply? Or the sound money element? Or pseudonymity? Please stop writing nonsense & misinformation.”
Co-founder of Gemini crypto exchange, Cameron Winklevoss noted that the liquidity of gold markets enables “transactors,” while it is a store of value and not a medium of exchange. Winklevoss further asked Weisenthal to reason his “tortured argument” to Bitcoin.
Weisenthal parried, saying: “There’s no question that liquidity in the gold market helps transactors. But it’s extremely hard to use gold online in an censorship free manner, so that’s not part of the selling point,” to which Winklevoss questioned who exactly is transacting in gold.
Have you ever thought about how big crypto transactions affect the crypto markets? Learn more about whale movements here.
Has the crypto industry developed any type of solution for such transactions?
Crypto auctions, algorithmic trading and over-the-counter (OTC) desks are designed to transfer large amounts of crypto.
In cases when you want to trade your crypto assets directly, without splitting them into parts and calculating fees, the daily auction held by Gemini — a U.S.-based, regulated crypto exchange — is a popular way to do that. Orders are currently available for five major currencies — Bitcoin, Ether, Zcash, Litecoin and Bitcoin Cash.
Another solution is to use trading bots to automate the process of splitting transactions. For instance, TradeSanta is a cloud software that allows you to buy or sell large amounts of crypto on major exchanges, such as Binance and HitBTC, while minimizing the impact on the market by making the transactions smaller and distributing them in time. By using smart orders, TradeSanta’s customers can trade a desired amount of crypto within the exact price limit during a specified period of time. In addition to this, the user doesn’t have to waste time splitting up the amount or placing orders, as TradeSanta takes care of the technical aspects and keeps the orders on top of the exchange’s order book.
OTC trading is also gaining popularity at the moment. These off-exchange desks match buyers and sellers of large amounts of crypto without placing orders on an exchange. As Binance CEO CZ said in an interview, the demand for such services is at least as much as the total volumes reported by crypto exchanges, which equals up to 50% of the total volume that is not displayed on CoinMarketCap.
The growing demand for OTC trading has forced major crypto exchanges to launch their own OTC desks despite the crypto winter. However, this way to trade large amounts of crypto involves several risks, such as double spending, phishing and fake agreements. Therefore, the trader has to be skillful enough to use OTC desks.
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.
Are there any tricks for trading big crypto volumes?
Dividing transactions into parts and using different crypto exchanges is a common way to trade big volumes.
If someone sells a huge amount of crypto at one moment, it could possibly cause the markets to panic, forcing prices to change. Therefore, dividing a large transaction into many parts and selling it over a long period of time is a common trick for those who want to trade large amounts. Still, you might get less money for later transactions, as the value is pushed down by selling more than the market demand can handle.
Another way is to sell your crypto on multiple exchanges. This strategy, though, is very time-consuming, as you will have to spend a lot of time splitting the transaction between different exchanges and calculating each one’s fees.
Finally, some traders recommend finding a counterparty who needs to buy the exact amount of crypto you are trying to sell and then setting a deal directly.
I want to transfer a large amount of crypto. Are there any potholes?
In cases when you want to transfer a large amount of crypto, you could face a bunch of difficulties.
The most obvious one is that most cryptocurrency exchanges have daily and monthly limits on withdrawals for general users. For instance, major U.S. exchange Coinbase has a $10,000 daily limit for its Pro Users, which can be increased to $25,000. Meanwhile, Malta-based Binance offers a 2 BTC daily limit to all users and 100 BTC to those who pass all the necessary Know Your Customer procedures.
At the same time, by using the Coinbase Pro exchange, a skillful trader can increase the limits up to $25,000,000 per day. Binance could also extend your daily limit upon personal request. To sum up, both major exchanges might allow you to trade up to $25 million per day. However, you will still have to set this limits by interacting directly with the exchanges.
Moreover, as previously explained, large crypto transfers might significantly affect the market. As a big order appears, the prices may skyrocket and force algorithmic traders to start buying and selling.
That’s impressive, but who is trading these millions in crypto?
Normally, big transactions come from the so-called whales — early adopters of cryptocurrency, miners or funds.
As per recent reports, there are approximately 100 Bitcoin addresses that currently possess over 16% of all coins in circulation. According to Bitcoin Rich List, which is provided by crypto statistics website BitInfoCharts, five of them now have 571,958 BTC, worth over $4.7 billion as of today.
Recently, a large amount of long-inactive Bitcoin holders — defined as those who haven’t transferred their Bitcoin for between six and 30 months — began to transfer their coins. Experts believe that whales, especially the long-dormant ones, could be accountable for crypto price action.
Moreover, recent reports mention institutional investors as the biggest buyers of cryptocurrency transactions worth over $100,000. Traditional investors and buyers, such as hedge funds, accounted for the vast majority of investments (66%) in crypto in the fourth quarter of 2018, according to the latest study performed by digital asset management fund Grayscale Investments.
Despite the end of the hype over initial coin offerings (ICOs) in 2017 and 2018, ICO holders and buyers still possess significant amounts of crypto and can also be included in the list of crypto whales. Although the first quarter of 2019 saw fewer ICOs raising funds compared with the fourth quarter of 2018, the amount of funds raised is still significant — totaling over $1 billion.
What were the largest transactions in crypto history?
Major crypto transactions (over 50,000 BTC) — dubbed “whale movements” in the crypto industry — happen each year, from time to time.
Setting aside the amount of coins transferred during major crypto hacks, the largest Bitcoin transaction ever was made in November 2011. According to cryptocurrency statistics provider Blockchain.com, back then, someone transferred 500,000 BTC, worth approximately $1.3 million at the time, to a single address. The same amount today would be valued at $4 billion.
Another major crypto transaction, titled “Bitstamp Audit,” was made in November 2013. A now-defunct address of one of the world’s first crypto exchanges, Bitstamp transferred 194,993 BTC, worth $149 million back then — or $1.6 billion today.
It is worth noting that big crypto volumes are not necessarily related to huge transaction fees. For instance, in October 2018, a Bitcoin investor sent 29,999 BTC (worth about $194 million at that time) — the largest BTC transaction in recent months — with a $0.01 fee. Meanwhile, those who transfer fiat money via traditional payment institutions, such as banks, might face hidden fees, which makes it hard to predict the particular cost of a transaction.
Why is everyone discussing big crypto transactions?
Actually, such transactions might be a contributor to the uptick in crypto markets.
In early April, Bitcoin (BTC) saw the first major recovery in months, when the price of the world’s top coin rose from around the $4,000 mark to over $5,000. The industry was actively discussing the reasons behind the unexpected surge. While some insiders — such as Binance CEO Changpeng Zhao — were clueless about the catalysts of the spike, others mentioned the April Fool’s Day story on the prank-approval of a Bitcoin exchange-traded fund and even Brexit as possible triggers.
However, some believe that mysterious crypto orders could be accountable for the market recovery. According to Reuters, the gain was probably triggered by a 20,000 BTC order (over $100 million, at that time) that was spread around United States-based crypto exchanges Coinbase and Kraken, as well as Luxembourg’s Bitstamp.
Big volume transactions could kick-start a frenzy of algorithmic trading — a method that uses automated software to detect trends and determine when trades should be made. As the mechanisms recognized the gigantic order, the automated trading started, forcing the prices and volumes to rise for several days in a row, with Bitcoin briefly testing the $5,300 mark.
Everex has received a full Money Transmitter License from a New Jersey regulator, allowing it to expand cryptocurrency trading service in the U.S. market.
Stablecoin-based settlement platform Everex has obtained a full Money Transmitter License from a New Jersey regulator, allowing the company to test services in the United States.
In a press release shared with Cointelegraph on Aug. 19, Everex revealed that the New Jersey Department of Banking and Insurance issued the company a full Money Transmitter License as of Aug. 13.
Big plans on U.S. expansion
The license reportedly authorizes Everex to conduct activities such as peer-to-peer (p2p) cryptocurrency to fiat exchange, including with U.S.-based exchanges. Everex will also be able to perform blockchain-enabled payments and p2p cryptocurrency-fiat-stablecoin transfers both domestically and internationally.
According to Everex’s blog post on March 25, the company intended to integrate with banks and third-party e-commerce providers, as well as to procure permission to operate in several U.S. states in 2019.
In early April, the central banks of Myanmar and Thailand endorsed Everex’s Ether (ETH)-based remittance system. Veerathai Santiprabhob, the governor of Thailand’s Central Bank reportedly said that “this project is an important step forward for the more than 3 million workers in Thailand who might have so far used not secured channels.”
U.S. states’ varying approach to crypto
As Cointelegraph reported in a dedicated analysis earlier today, the regulatory landscape is actively changing throughout the U.S., as different states push in different directions in regard to crypto, while the federal government has yet to adopt a universal framework despite the calls from local actors. As a result, there is a widening regulatory gap between separate national units.
Lindsay Danas Cohen, chief operating officer at Velocity Markets, a U.S.-based financial technology company providing solutions to investors in the digital asset markets, told Cointelegraph:
“In the future, absent federal intervention, it is likely that these different interpretations will be cemented, reinforcing a state-level patchwork (much as we see with Blue Sky laws). Whether federal-level intervention actually materializes will depend on how D.C. views its role in mediating the space, and whether they deem it in the public interest for there to be a uniform set of laws applicable to cryptographic asset activity.”