According to the report, South Korean authorities will grant project participants 800 million won ($677,000) in order to support the initiative.
Operating under the authority of the Ministry of Science and ICT, the Korea Post will build a blockchain-powered payment method incorporated in its postal service, using the blockchain expertise of Coinplug and NHN’s payment technology.
The pilot project will reportedly launch in the city of Naju, which received the title of “Innovative City” and has attracted a number of public offices to move from Seoul.
The postal service is also considering to apply blockchain technology to overseas remittances, the report notes.
Coinplug is a South Korea-based cryptocurrency exchange that was founded in June 2013. The exchange offers bitcoin (BTC) exchange and wallet services, as well as a bitcoin prepaid card okBitcard. The exchange was reportedly set up by South Korean and Silicon Valley engineers, and targets the Korean and Asian market.
Recently, the South Korean Ministry of Science and ICT announced that the agency will conduct a follow-up study on blockchain regulations. Entitled “Blockchain Regulation Improvement Study Group,” the study intends to find out how regulations can be improved in order to embrace the benefits of the technology and to bring it to mass adoption.
CalCPA has urged the FASB to initiate a project for accounting cryptocurrencies.
The California Society of Certified Public Accountants (CalCPA) is seeking clarity on cryptocurrency holdings from the Financial Accounting Standards Board (FASB), according to a recent letter obtained by Cointelegraph.
In the letter, CalCPA stated that accounting for digital currencies is not adequately captured under existing United States Generally Accepted Accounting Principles (GAAP) established by the FASB, and should be generally aligned with the accounting model for a foreign currency. The organization said that many of the features and risks of cryptocurrencies are similar to those of foreign currency. The society further argued:
“…while no government backs cryptocurrencies, the ‘gold standard’ is long gone, and governments only influence, but do not really back, their own respective currencies. Instances of massive currency devaluation are not infrequent and well known. And while bitcoin is not legal tender in the U.S., neither is Canadian dollar, or any other foreign currency.”
CalCPA thus urges the FASB to initiate a project for accounting cryptocurrencies and add it to the Board’s or Emerging Issues Task Force’s technical agenda, since it believes that digital currencies will continue to expand in both volume and new fields of application.
Authorities in various spheres are seeking regulatory clarity for cryptocurrencies. CalCPA’s request follows a bipartisan letter from 21 U.S. congressmen to the U.S. Internal Revenue Service (IRS), requesting guidance on how to report taxes virtual currency.
The letter urged the IRS to provide guidance on tax consequences and basic reporting requirements for taxpayers that use cryptocurrencies, claiming that there is still “substantial ambiguity on a number of important questions about the federal taxation” of the emerging type of asset.
In response to the request, IRS Commissioner Charles Rettig stated that the agency has prioritized issuing relevant guidance. The instruction will specifically cover issues such as acceptable methods for calculation cost basis, cost basis assignment; and tax treatment of forks.
Most major cryptocurrencies have broken down of their first support. Has the recovery from the lows come to an end?
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
There is a large disconnect between traditional investors and crypto investors on how they approach cryptocurrencies. Billionaire investor Stanley Druckenmiller said that he would neither buy nor sell Bitcoin because he does not find inherent value in it. He also said that due to its sharp volatility, Bitcoin can never be a medium of exchange.
Another investor, Peter Boockvar, chief investment officer at Bleakley’s believes that Bitcoin can be used as a leading indicator to forecast the directional movement in the stock markets or gold. But he prefers to own gold over Bitcoin.
Compare this with analytical firm Delphi Digital recently terming Bitcoin as the “King of the Assets Class Hill” because of its huge outperformance in May, compared to traditional asset classes. It is worth noting the uncorrelated performance of Bitcoin, which makes it a valuable addition to any portfolio. Should traders buy now or wait for lower levels? Let’s take a look at the charts.
We had projected that the Bitcoin (BTC) rally is tiring out and that is what happened. It plunged on June 3 and 4, which pulled it back to the critical support of $7,413.46. Currently, the bulls are attempting to hold the level but the rebound lacks strength, which is a negative sign.
The bears will try to make use of this opportunity and sink the BTC/USD pair below $7,413.46. If successful, the pair can plummet to the 50-day SMA. This is a critical level to watch because the bears have not been able to close below it since February 18. A breakdown will indicate that the trend has changed.
Our view will be invalidated if the bulls defend $7,413.46. In such a case, a consolidation between $7,413.46 and $9,053.12 is possible. The cryptocurrency will pick up momentum above $9,053.12. We will wait for the correction to end before suggesting long positions once again.
Ethereum (ETH) corrected back close to the support of $225.39 on June 3 where buying emerged. The 20-day EMA is flattening out and the RSI has dipped closer to the center. This points to a consolidation in the near term.
If the bulls defend $225.39, the cryptocurrency might rally to $280 where it is again likely to face resistance. On the other hand, a breakdown of $225.39 will indicate weakness and can plummet the ETH/USD pair to the 50-day SMA. We expect a strong support at this moving average because the pair has taken support on it repeatedly since March. We are currently neutral on the digital currency.
We hope traders booked partial profits closer to $0.45 as we had suggested in our previous analysis. The repeated failure to scale above the overhead resistance of $0.45 attracted profit booking that has dragged Ripple (XRP) to the critical support of $0.37835. The failure of the bulls to defend the 20-day EMA is a negative sign.
Currently, the 20-day EMA has flattened out and the RSI is close to 50. This points to a probable range formation in the short term. Our view will be invalidated if the bears sink the XRP/USD pair below the $0.37835–$0.35660 support zone. Therefore, traders can protect the remaining long position with the stop loss of $0.35.
Bitcoin Cash (BCH) has broken down of the 20-day EMA. This is a sign that upward momentum has weakened. The earlier support of 20-day EMA will now act as a resistance. If the bulls fail to scale this level quickly, a drop to the 50-day SMA and below it to the support line of the channel is likely.
We anticipate strong buying between the 50-day SMA and the support line of the channel. If this zone holds, we might suggest long positions with a close stop loss, kept just below the channel.
However, if the bulls push the price back above 20-day EMA within the next couple of days, the BCH/USD pair can move up to $480. Presently, we do not find any reliable buy setup.
Contrary to our expectation, EOS did not find any strong buying close to the 20-day EMA and the critical support of $6.8299. This is a bearish sign. Currently, the bulls are attempting to hold the 50-day SMA but the weak bounce suggests a lack of demand. A breakdown of the 50-day SMA can sink the digital currency to the support line of the ascending channel, below which, a drop to $4.4930 is probable.
The 20-day EMA is turning down and the 50-day SMA is flattening out. The RSI is also back below 50, which suggests that the bears have a slight edge. Our view will be invalidated if the bulls quickly scale the overhead resistance of $6.8299 and sustain it. If that happens, the EOS/USD pair will again try to breakout of the channel. We will wait for the price to close (UTC time frame) above $6.8299 before suggesting any long positions.
Litecoin (LTC) is attempting to hold the 20-day EMA. This is a positive sign. It shows buying on dips. If the price rebounds from the 20-day EMA, the bulls will again try to ascend the overhead resistance zone of $121.9018–$127.6180.
On the other hand, if the bears sink the LTC/USD pair below the 20-day EMA, it can decline to $91. This is a strong support, which is likely to hold. The 20-day EMA is flat and the RSI is close to the midpoint. This suggests a range formation in the short term. The support of the range might be at $91 and resistance at $120. A breakdown of $91 will signal weakness and will attract further selling. Therefore, traders can maintain the stop loss on the remaining long position at $90.
Binance Coin (BNB) has declined below the 20-day EMA, but the bulls are currently trying to reclaim the level. If successful, it can again move up to $36.
But if the BNB/USD pair fails to sustain above the 20-day EMA, it can dip to the 50-day SMA. We expect strong buying close to this level. The bears have not sustained below the 50-day SMA throughout this year, barring the fall on May 9. This shows that buyers lap up the cryptocurrency on dips. Therefore, we will watch the price action at the 50-day SMA closely and propose long positions if we spot a bullish pattern.
Bitcoin SV (BSV) continues to be in an uptrend. Both the moving averages are sloping up and the RSI is in the overbought zone. This shows that the bulls are in command. The first stop on the downside is $176.083, which is the 38.2% Fibonacci retracement level of the recent rally. But if this level cracks, the fall can extend to the 50% retracement level of $152.015.
If the bulls arrest the pullback at $176.083, it will indicate strength and will increase the chances of a breakout above $254. If that happens, the BSV/USD pair can surge to $307.789 and above it to $340.248. Another possibility is that the pair enters into a range to consolidate the gains. We will propose a trade if we spot a setup that gives the traders a good risk-to-reward ratio.
Stellar (XLM) has broken down of the 20-day EMA and is presently trying to stay above the 50-day SMA. The horizontal support of $0.11507853 is also located just below the 50-day SMA, hence, we anticipate the buyers to step in to defend this level.
The flattish moving averages and RSI just below 50 suggests a balance between the bulls and the bears. If the XLM/USD pair rebounds off $0.11507853, it might rise to $0.14861760 and remain between these levels for a few days.
If the pair plummets below $0.11507853, it will indicate an advantage to the bears and a drop to $0.08641170 is probable. We withdraw our existing trade suggestion and will again give a recommendation if we spot a reliable buy setup.
Tron (TRX) turned down sharply after reaching our first target objective of $0.040. However, the price remains above the 20-day EMA, which is sloping up. This suggests that bulls have a minor advantage. If the 20-day EMA holds, we expect another attempt by the bulls to break out of $0.40.
On the other hand, if the 20-day EMA gives way, the TRX/USD pair can plunge to $0.02815521. A break of this support will be a negative sign and can drag the price back toward $0.02094452. Traders who have long positions can lighten up closer to $0.040. Until then, stops can be maintained at the breakeven.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.
While Japan’s new laws are welcoming for most crypto exchanges, as they expect more institutional investors, custodians and wallet makers are getting worried.
On May 31, the Japanese House of Representatives amended two cryptocurrency-related laws, the Payment Services Act and the Financial Instruments and Exchange Act, which will come into effect in April 2020.
Most Japanese crypto exchanges have welcomed the changes, since they expect more institutional investors to join the crypto industry. However, others voiced their concerns that the changes may bring some uncertainty to custodians and wallet service providers.
The two documents outline several specific changes, which can be discussed separately.
The Payment Services Act (PSA)
Virtual currency to crypto assets
The new law revises the term “Virtual Currency” and says that “Crypto Asset” would be a better term to use to describe cryptocurrencies. The change was made since “crypto assets” is used more frequently at international meetings, such as the G-20. Meanwhile, the use of “virtual currency” may mislead the public into thinking that cryptocurrencies function or hold the same status that is associated with fiat currencies. This change, however, is not compulsory for implementation by exchanges and the media.
Tighter restrictions on custodian services
According to the documents, custodian service providers will now have to share the same level of accountablility for the risks as exchanges, such as the leakage of users’ crypto assets and money laundering/terrorism financing. So, custodians will need to be registered with the Financial Services Agency (FSA) even if they don’t provide crypto exchange or trading services.
As of now, there are no specific guidelines for cases that are not clear cut. However, the governing bodies are likely to release further information to clarify the situation.
Exchanges must change how they store crypto
From April 2020 onward, crypto exchanges operating in Japan will have to manage users’ money separately from their own cash flows. This means finding a third-party operator to keep hold of the users’ money (this can be a trust company or any other similar entity).
When managing users’ money, “reliable methods” will have to be used, such as a cold wallet. If the exchanges manage users’ stored cryptocurrencies in other ways, such as a hot wallet system, they have to hold “the same kind and the same quantities of crypto assets” as the users’ crypto assets. This would enable the exchange to reimburse users if the funds get stolen from the platform.
The revised laws still do not directly regulate anonymous cryptocurrencies or privacy coins such as monero and zcash. On March 15, the FSA said it would deal with problematic crypto assets that are easily used for money laundering because their transaction records are not traceable. Back then, the agency dubbed the anonymous coins as “problematic crypto assets.” However inclusion of anonymous coins in the bill eased the speculations regarding whether the FSA is indeed planning to regulate this area of the crypto sphere. Also, a recent report highlighted that money laundering in Japan is on the rise.
As Cointelegraph reported earlier, in May 2019, Japan has been working on some time to combat money laundering through anonymous coins and imposed inspections upon exchanges that offered these coins for trade to their user base.
The Financial Instruments and Exchange Act (FIEA)
Revised FIEA documentation introduced the concept of electronically recorded transferable rights (ERTRs) to define that initial coin offerings (ICOs) and security token offerings (STOs) are regulated under the FIEA. ERTRs refer to tokens issued in the expectations of profits (i.e., security tokens).
More specifically, tokens issued under STOs can constitute ERTRs if the three requirements below are met, according to Japanese law firm Anderson Mori & Tomotsune:
“(i) Investors (i.e., right holders) invest or contribute cash or other assets to a business,
(ii) the cash or other assets contributed by investors are invested in the business, and
(iii) investors have the right to receive dividends of profits or assets generated from investments in the business.“
Notably, while ERTRs will be regulated under the FIEA, they are excluded from using the official term “crypto assets,” as per PSA guidelines.
From April 2020 onward, crypto asset derivatives transactions will be regulated under the FIEA. The law doesn’t specify margin rates, although the Japan Virtual Currency Exchange Association (JVCEA), a major self-regulatory organization in Japan, has a guideline that proposes to restrict margin rates by four times or even lower.
The Anderson Mori & Tomotsune report says that the JVCEA’s guidance “may be taken into account when specific provisions are promulgated by the relevant Cabinet Office Order.” It then goes on to suggest that the exact level may be decided upon in the future:
“Cabinet office orders determine how laws will be enforced in reality and something the Japanese crypto industry pays careful attention to after the amendment of the two laws on May 31st.”
Introducing a clear regulation on derivatives transactions may be urgent, since 80% of crypto trades comes from derivatives, and yet it is largely unregulated. Data from the Japan Virtual Currency Exchange Association (JVCEA) shows that the volume of leveraged, margin and futures trading for crypto was far higher than that of spot trading in Japan from April 2017 to March 2018.
The FIEA prohibits anyone from engaging in activities such as dissemination of rumors, usage of fraudulent means for purposes of selling or purchasing or engagement in any transaction in respect to crypto assets or for purposes of engagement in any crypto asset derivative transactions and the likes.
Anderson Mori & Tomotsune has set out the possible areas that may constitute a breach of law by the governing body:
“(i) engage in fake sales and purchases; (ii) engage in collusive sales and purchases;
(iii) entrust or accept any entrustment of fake sales and purchases or collusive sales and purchases;
(iv) engage in market manipulation through actual sales and purchases;
Or (v) engage in market manipulation through representations and certain similar acts”
Market reaction is mixed
“Japan is leading the crypto regulation”
Most Japanese crypto exchanges that Cointelegraph Japan contacted have spoken positively about the new laws.
Katsuya Konno, head of the CEO office of fintech company Quoine, welcomes the changes and thinks that the revised laws will enhance customer protections and encourage more institutional investors to enter the crypto industry. According to a translation of his comments, he told Cointelegraph:
“I think it’s great, frankly. With the revised content, customer protection is further pursued, so I think that Japan will be able to become a world leader in virtual currency-related regulations, and the entry of institutional investors will also increase. As new initiatives such as STO are becoming possible, the boundaries between virtual currency and existing finance may be overlapping more and more.”
As reported, Quoine’s trading platform, Liquid, hit unicorn status with over a $1 billion valuation in April 2019.
BitPoint, another crypto exchange in Japan, has also praised the new laws. The exchange’s spokesperson told Cointelegraph, in translation:
“We are very positive. Clear rules are expected to help institutional investors enter, leading to market expansion.”
BitPoint also expects more institutional investors to join the crypto movement and the market to expand further as crypto rules become clearer. However, the exchange has admitted that a review of the wallet management system will need to be undertaken in order to strike the right balance between security that entails the use of cold wallets and more user friendly, but less secure, hot wallets. BitPoint will therefore look to entrust fiat currencies to a trust company and receive a financial instruments business operator’s license.
Meanwhile, Coincheck, which just obtained an exchange license from the FSA in January, wrote in a translated email that the new laws are something it expected, also adding:
“By clarifying the target and standards of regulation through the current legal reform, we believe that it will lead to the healthy development of the cryptocurrency industry. On the other hand, there is also concern that the term change to crypto assets may be a setback for cryptocurrency as a means of payment. I would like to make an effort as an industry to make that not happen.”
The exchange has also said it would be closely monitoring the cabinet office orders that determine how the laws will be enforced in reality.
Ambiguity for wallet makers
AndGo, a Japanese-made hardware and mobile wallet development company, outlined some “ambiguity” in the new laws when speaking to Cointelegraph Japan.
AndGo points out that there are two kinds of wallet makers. One is able to move clients’ assets. It will be viewed as a custodian wallet and required to be registered with the FSA, as in the case of exchanges. The other type doesn’t possess clients’ private keys, hence can’t move clients’ assets. The new law doesn’t apply for the latter type.
As AndGo explained the issue, its wallet is of the second type, so it should not be subject to the new laws. However, the laws are unclear about the cases in which it holds one of the private keys (as with multi-sig) and a private key that clients encrypts by setting up their own passwords. In those cases, wallet makers cannot move clients’ assets solely by their own volition. According to a translation of a correspondence with AndGo:
“The details and interpretation of this regulation are often vague, and I think that wallet operators will have to ask the FSA individually about gray areas in the future.”
However, AndGo understands that regulators don’t often catch up with the rapid pace of technological innovation, writing:
“While entrepreneurs develop their service products by looking years ahead, regulators focus on technologies and services that were released years ago.”
After attempting to get ahead with crypto regulation, Japan witnessed two major hacks in 2018. Protecting crypto customers and investors has become a priority, and those who have enough funds to comply with the regulation may be at an advantage. In contrast, it may become harder for crypto entrepreneurs to enter the industry. The FSA, in the comment to Cointelegraph Japan (translated into English), addressed some of the concerns, however:
“We think the balance between customer protection and innovation is important. We continue to prioritize customer protection and other regulations where appropriate, while making sure that they will not be too much for the industry to grow further.“
Ahead of the enforcement day, the FSA is going to release government orders including a Cabinet Office Ordinance, which determines how the law will be enforced. At the same time, it will seek public comments on its website regarding the orders, one month before the implementation. It is not yet clear what the FSA will include in the government orders, but one of them is expected to be about the rate of margin trading.
Moreover, according to the FSA, many elements of Japan’s new laws are included in the recently published IOSCO’s document, which will be used in the upcoming G-20 meeting in a discussion surrounding crypto regulation. The FSA hopes to “share Japanese experiences with G20 members and deepen the mutual understanding.”
Dutch billionaire John De Mol filed a lawsuit against Facebook over crypto ads using his image without permission.
John De Mol, a Dutch billionaire responsible for the local Big Brother and The Voice shows, filed a lawsuit against Facebook over crypto ads using his image without permission, Reuters reports on June 5.
Per the report, the ads promoted cryptocurrencyscams using Mol’s image, which allegedly damaged his reputation. The ads in question reportedly advertised fake cryptocurrency-related businesses or encouraged users to send money to buy bitcoin (BTC), all while claiming that the projects have Mol’s baking or involvement.
According to Reuters, Mol’s lawyers claim that consumers have lost €1.7 million (over $1.9 million) as a consequence of such actions, also adding that other Dutch celebrities have been targeted. Jacqueline Schaap, one of the lawyers, noted that Facebook should prevent such incidents from taking place, and that the current vetting process is not enough:
“I don’t know what reality Facebook lives in, but that doesn’t work.”
Rob Leathern, director of product management at Facebook, allegedly told reporters that the company takes “misleading ads that violate our policy, and those that feature public figures, very seriously.” He then concluded:
MinerGate has become a dApp Service Provider on the DAPP Network.
It’s no secret that there have been some significant obstacles in the way of the efficient performance of dApp development. To develop on EOS, dApp developers must own and use RAM, which has its limitations. There are two of them: the high cost (more than 115 EOS/1 MB as of June 5th, 2019) and the limited supply (currently around 90 GB, anticipated to increase to 128 GB by the end of the year). As a matter of fact, these two points severely restrain the capabilities of dApp developers and their applications.
So recently, LiquidApps have launched an alternative solution on the EOS blockchain which solves the scarcity of RAM for dApp developers – vRAM. The vRAM system is RAM compatible and aims to remove the current interdependence between the cost of memory (RAM) and the size of stored smart contracts, by using RAM as cache memory.
The whole ecosystem named the DAPP Network solves the limitation for decentralized application development. It makes it possible to store a potentially unlimited amount of data more affordably and efficiently. Along with EOS blockchains’ scale and speed, it will help utilize blockchain technology’s potential to the fullest.
Thus, MinerGate DSP is eager to help dApp developers by bringing to the table solutions (Service Packages) that enable affordable and unlimited access to storage and off-chain processing with on-chain integrity so that the way scalable dApps are built on blockchains today will sufficiently evolve.
Cryptocurrency traders in Japan have failed to report crypto gains valued at $93 million as of March 2019.
Japan-based entities have failed to report their crypto gains valued at 10 billion yen ($93 million) over the past several years by March 2019, local national newspaper Asahi Shimbun reports on June 5.
According to Asahi, about 30 crypto-related businesses and 50 individuals have not declared their revenues from cryptocurrency trading as of March, allegedly due to a high tax on this type of income.
To date, Japanese tax regulators reportedly consider crypto-related revenues as miscellaneous income, which is taxed at 55%. In accordance with the current law, local entities who earn more than 200,000 yen ($1,850) in such income on an annual basis are required to disclose it, the article notes.
As previously reported, in order to combat tax evasion in the industry, the Japanese government is preparing a new system that will authorize the National Tax Agency (NTA) to request revenue information from crypto exchanges, including names and addresses. Expected to be introduced in April 2020, the new law will allow the NTA to request data primarily for those users whose earnings from crypto amounted to more than 10 million yen ($88,700).
Asahi adds that the new system will be launched in January 2020, and it will also authorize the Japanese government to penalize those exchanges or crypto operators who fail to disclose the necessary information.
Earlier this year, the Japan Association of New Economy (JANE) asked the Japanese Financial Services Agency (FSA) to consider reducing crypto taxes from the current 55% to 20%. The association has also asked the regulator to impose no taxation for crypto-to-crypto transactions.
Meanwhile, Japan, which is reportedly ranked as the second country globally for traffic to crypto exchanges after the United States, has recently passed new crypto regulation in the upper house of the parliament. The lower house suggested legal amendments intending to tighten local regulations on cryptocurrency trading activity, including margin trading.
Speculation remains over whether Jihan Wu will serve as chairman or CEO of Matrix, the upcoming crypto services startup.
Ex-Bitmain CEO Jihan Wu could launch his newest venture next month, according to a report by The Block on June 5.
One unnamed source told the website that the crypto services startup, called Matrix, “will be the biggest over-the-counter (OTC) desk and asset manager overnight.”
Matrix’s OTC offering is likely to be boosted by its close ties to bitcoin (BTC) mining company, Bitmain. The new business will reportedly offer custody and lending services to the Beijing-based giant, receiving a liquid pool in return.
Another of the four unnamed sources told The Block that such high levels of liquidity could result in lower crypto prices, giving Matrix a competitive advantage in Asia.
The Block notes that speculation remains over whether Wu will serve as chairman or CEO of the new company — as well as over whether Matrix would be allowed to operate in China, which has a history of clamping down on the cryptocurrency industry and crypto trading.
Last November, Wu was reportedly demoted from being a “director” at Bitmain to a “supervisor.”
Bitmain is one of the biggest players in the cryptocurrency industry due to its huge mining capabilities, and Wu continues to hold a 20.5% stake in the business.
The public’s appetite for darknet drugs remains undaunted. A major new survey has shown consistent growth in online drug sales since 2014, with Scotland, Brazil and England leading the demand for narcotics procured off the darknet. Despite numerous darknet markets (DNMs) and supporting infrastructure including clearnet link sites and bitcoin mixers being shut down this year, business is booming.
Why the Growth of Darknet Drug Sales Is a Good Thing
Global Drugs Survey (GDS), the largest poll of its kind, has published its 2019 report into the state of the recreational drugs market. It questioned more than 123,000 people from over 30 countries. GDS findings include darknet drug purchases more than doubling in England since 2014, with 28.6% of respondents professing to having purchased drugs from DNMs.
Bizarrely, GDS founder Dr Adam Winstock told the BBC that the greatest risk associated with buying drugs online involves extortion. “If you’ve given your name, somebody knows you’ve bought illicit drugs,” he said. “And then there’s a possibility that they will blackmail you.” There is no credible evidence to support this assertion. Moreover, the same reasoning, if it were true, could be applied to real world purchases of drugs.
While hard drugs such as heroin, crack cocaine, and xanax can be harmful, wherever they are purchased, the reputation system used on DNMs has been shown to build trust, minimizing the risks of purchasing narcotics that have been cut with harmful adulterants. Moreover, purchasing drugs online mitigates the threat of being robbed or sold diluted or fake substances. As a consequence, many drug users use DNMs not only for convenience, but also for safety.
Irresponsible reporting by mainstream media such as the BBC has left the public dangerously misinformed, leaving the impression that darknet markets are the riskiest way to purchase drugs, when in fact the reverse is true. For technically competent web users, DNMs are safer in almost every way than buying on the street.
What the Average Drug User Looks Like
In the 2019 Global Drug Survey, 87% of respondents were white and 59% were male, with a mean age of 29. The most popular illegal drugs used in the last 12 months were cannabis followed by MDMA, cocaine, amphetamines, LSD, and magic mushrooms.
Among darknet buyers, over 25% of those who purchased drugs from a DNM in the last year were doing so for the first time. MDMA, LSD, and cannabis were the most popular drugs bought on the darknet. “Over the last 6 years, there has been a year on year increase in the percentage of GDS participants obtaining drugs on the darknet in most countries,” notes the survey.
Business as Usual on the Darknet
Despite the usual spate of takedowns, exit scams, DDoSes, and doxings, DNMs remain in rude health, with new markets springing up to replace those that are shuttered. In the absence of trusted DNM gateways such as Deepdotweb, users can consult clearnet services such as dark.fail, cross-referencing its information with that to be found on onion forum Dread. “I think we need to be showing major recognition and appreciate for [dark.fail’s] efforts,” reads one recent post on Dread. “Consistent legit working onion for (almost) every DN recourse. It is incredibly impressive and a massive improvement from deepdotweb (RIP). Without dark.fail I (and others here) would probably have to be fumbling around Reddit, scouring for (inevitable) phishing links from a bunch of teenage edgelords.”
Other popular threads on Dread encourage the community to use monero everywhere instead of BTC (“It is in our power as a community to change the mainstream behavior”), shame scammers, and praise reputable vendors. DNMs currently seeing the most action include Empire, Nightmare, and Cryptonia. While some of these will inevitably fail, the sheer number of markets that are available means there will always be somewhere for cryptocurrency users to get their fix. When trusted vendors are forced to migrate to a new market, their PGP key gives users confidence that they are still dealing with the same entity. Purchasing drugs online still necessitates a degree of risk, since these substances are still illegal in most countries. Given the convenience and quality assurances compared to street purchases, however, coupled with increasing adoption of crypto assets, it is no wonder that DNMs are growing in popularity.
Have you tried visiting any of the new darknet markets? Let us know in the comments section below.
Disclaimer: Bitcoin.com does not endorse or support claims made by any parties in this article. None of the information in this article is intended as investment advice, as an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Neither Bitcoin.com 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.
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Grupo Bitcoin Banco has recently been embroiled in a security breach that saw customers withdraw money that did not exist.
A Sao Paulo court has blocked funds in bank accounts linked to Grupo Bitcoin Banco — with 726,630 reals (about $188,000 at press time) frozen, Cointelegraph Brazilreported on June 5.
Two people, along with one company, have accused GBB of engaging in abusive practices after they were unable to make conversions back into reals or withdraw funds to their bank accounts because of a temporary suspension on transactions.
The trio claimed they have a total 726,630 reals on GBB’s platform and urged a judge at the Court of Justice of the State of Sao Paulo to take urgent guardianship of their funds.
In their ruling, a judge agreed — and said there is a “danger of harm” because the plaintiffs could lose their funds altogether. GBB can appeal the decision.
GBB has recently been embroiled in a security breach that saw some customers double the balances of their accounts and withdraw money that did not exist, Cointelegraph Brazil reports. The cost of the scam could amount to 50 million reals ($13 million.)
On Monday, the company — which owns exchanges including NegocieCoins and TemBTC — announced it had identified 19,896 fraudulent transactions and suspended 2,568 suspicious accounts.
GBB has said that it is committed to fulfilling withdrawal requests, but some customers have expressed frustration after experiencing delays.
On May 31, Brazil’s Chamber of Deputies requested the creation of a special commission to consider cryptocurrency regulation in the country.