Articles Posted in Bitcoin

A newly signed Executive Order 13224 expands the State and Treasury’s ability to engage financial sanctions against terrorists. With the newly updated executive order, the U.S. can now impose secondary sanctions for any person, business or financial institution found to have handled transactions with all individuals and entities designated as terrorists by the U.S., Ms. Mandelker said in the speech. Of significance is control over foreign financial institutions sanctions include money services businesses, cryptocurrency exchangers and administrators, in addition to banks, she said. Such sanctions would cut off their access to the world’s biggest economy and most-used currency critical to most of the world’s trade and finance.

Under the new rules, the two departments responsible for imposing sanctions no longer need to develop detailed dossiers tying top officials or agents involved in terror groups to specific attacks or acts, said Nathan Sales, the State Department’s top counterterror official. Many of the targets also have operations in Turkey, highlighting a major concern among U.S. officials that lax financial and corporate oversight by the government in Ankara has allowed terror financing and evasion of sanctions to proliferate in the country. The Turkish Embassy in Washington didn’t immediately respond to a request for comment.

E.O. 13224 section 1F(b),  gives the secretary of the Treasury, in consultation with the Secretary of State, the ability to take action against bankers and account managers that allow their services to be utilized by terrorists. This new language means that even foreign banks and other companies in the financial industry could lose access to the U.S. dollar if they provide correspondent banking services to terrorists.

IMG_0296-300x200On July 15th, a drafted bill was leaked by a tech industry lawyer, Varun Sethi, which proposed the banning of all cryptocurrency with the exception of the “Digital Rupee”. This bill would not become official until it is debated in the 2019 Monsoon session of the Indian parliament, but demonstrates India’s resolve to end cryptocurrency related crimes.

The drafted bill is entitled, “Banning of Cryptocurrency & Regulation of Official Digital Currencies”, and defined cryptocurrencies as “any information or code or number or token not being part of any Official Digital Currency, generated through cryptographic means or otherwise, providing a digital representation of value.”

Meanwhile, the proposal states that a “Digital Rupee” is defined as a digitally issued tender from India’s Reserve Bank, which would be approved by the Central Government for use as a legal currency.

IMG_0064-1-300x206Although Bitcoin continuously tries to shed its turbulent reputation, the cryptocurrency platform watched their 17-month high drop by $3,000 in just twenty-four hours.

In 2017, Bitcoin reached its all-time high of about $20,000. However, has been unable to come close to this number over the past two years. Although Bitcoin has increased by 200% in 2019, its reputation has been anything but steady.

In late June, the cryptocurrency platform reached its 17-month high of $13,485.85, but by the next afternoon, the value dropped to $10,823.

IMG_0239-300x199Patrick McDonnell, 46, of New York, admitted to fraudulently obtaining funds from clients using his investment firm, CabbageTech. According to the lawsuit, McDonnell lured investors to his firm by claiming to have traded $50 million worth of bitcoin for his many clients. However, these claims were false and McDonnell used investment funds for his personal expenses.

McDonnell allegedly referred to himself as the “coyote of Wall Street”, despite his falsified investment history. Last week, he pleaded guilty to wire fraud, stating, “I claimed to invest it in virtual currency and spent it on personal expenses.”. According to the report, it is estimated that McDonnell spent nearly $200,000 of the investment funds he acquired. The indictment further explained that McDonnell provided his clients with false balance statements, which showed that the funds were invested and growing.

McDonnell’s investment firm, CabbageTech, has been barred for its fraudulent activities and McDonnell will likely serve a sentence of up to two and a half years in prison.

According to the Tokenist, the United States Commodity Futures Trading Commission (CFTC) has just filed a complaint against cryptocurrency company Control-Finance Limited and its CEO, Benjamin Reynold. The complaint alleges that the firm misappropriated $147M in Bitcoin.

According to the CFTC, Control-Finance and Reynolds were responsible for defrauding around 1,000 people out of around 22.8M BTC. The victims were requested to deposit their funds on the Control-Finance platform. The company promised returns on their investments. They essentially “guaranteed daily trading profits.” They also promoted themselves as veteran, expert cryptocurrency traders.

The CFTC says that Control-Finance was comparable to a ponzi scheme which operated from May 1, 2017 to Oct 31, 2017. The defendants afterwards closed their social media accounts and the company went dark, running away with around $150M.

IMG_0064-300x206Following 2019 Q1 reports that cryptocurrency fraud amounted to well over $1 billion, two companies have joined forces with the goal to put an end to this growing problem. Wirex offers cryptocurrency services through its banking platform, while Elliptic serves as an anti-fraud and security company. Together the companies are developing “solutions for rapidly detecting fraud and other criminal activity”. But, can they really combat this significant issue?

Stories of cryptocurrency fraud, theft, and scams have been in the news more consistently than ever before. The increasing number of fraudulent activities in this sector comes as a surprise to many given that cryptocurrency is no longer as new and misunderstood as it once was. Yet, Binance is one example where cryptocurrency fraud recently amounted to over $40 million in losses and was undetectable until after the theft of the funds was complete. Binance also suffered severe delays involving their online platform, leaving them offline for numerous days.

Several other cryptocurrency companies have been hit with similar acts of fraud, and each of them has one important factor in common. The theft that occurred on the cryptocurrency platforms was completed prior to any knowledge of the wrongdoing. This has lead many security companies to wonder if there is a solution that would allow cryptocurrency companies to spot acts of fraud before they occur.

The island of Jersey off the coast of France is being developed as the first location financed by Bitcoin currency.  Although the island has a British Crown dependency, it is not part of the UK or the EU and it is self governing.

Bitcoin, a kind of virtual currency, is now accepted as a form of currency by a growing number of businesses. None accept only Bitcoin currency-yet.

The most popular digital currency, Bitcoin, was developed in 2009 by a programmer or programmers working under the pseudonym Satoshi Nakamoto. Today, it makes up the vast majority of the digital currency economy and has seen prices for each coin jump to $230 in April from $13 in January.