Day: July 5, 2018

Members of the Indian National Congress (INC) have alleged that Bitcoin has been used to clean dirty money for the ruling party in the state of Gujarat. They are demanding a judicial probe into the matter be launched.

Multi-Million Dollar Money Laundering Scam Alleged in Gujarat

A spokesperson for the INC has claimed that the total figure involved in the scam is over $726 million. However, according to the Hindustan Times publication, some claim the amount may be in excess of $12.7 billion.

Shaktisinh Gohil alleges that the Bharatiya Janata Party (BJP) of Gujarat have been cleaning money using Bitcoin transactions. He claims that state police have uncovered the scam but the kingpins of it have absconded. The INC minister went on to state that the BJP had used the previous demonetisation policy to cover up their money laundering and were now using Bitcoin to continue cleaning funds and extorting wealthy individuals in the state. He said:

“Even as the BJP scrambles for answers to explain how the Ahmedabad District Cooperative Bank (ADCB), whose director is BJP President Amit Shah, received old currency worth Rs 745.58 crore in just 5 days and how Rs 3118.51 crore were deposited in 11 district co-operative banks linked with BJP leaders in Gujarat itself, a new ‘Mega Bitcoin Scam’ worth more than Rs 5,000 crore has been unravelled in the state.”

The INC spokesperson claims that a range of crimes have become the norm in the state of Gujarat. These include the kinds of money laundering transactions alleged against the BJP, as well as kidnappings, and extortion of cryptocurrency using the muscle of the state police.

He goes on to cite the example of Shailesh Bhatt who was allegedly the victim of a police extortion of Bitcoin. According to the INC spokesperson, 200 Bitcoin were taken from Bhatt who was then demanded to pay over $4.6 million.

Gohil claims that the ruling party were guilty of double standards since Congress politicians had been hounded during the elections and yet they were not willing to investigate this “mega Bitcoin scam.”

“Why did the investigation agencies not make Shailesh Bhatt a ‘complainant’ in the FIR that was filed in the first case? Why are the CBI/ED/Central authorities not investigating this ‘Mega Bitcoin Scam’? Who are they sheltering? What is the cover-up?”

However, the BJP refute the allegation. They claim to be victims of the opposition party’s “dirty tricks department.”

BJP spokesperson Anil Baluni told reporters earlier today:

“We demand an impartial Supreme Court-monitored judicial investigation in this maze of ‘Mega Bitcoin Scam’ so that the truth comes out.”

Featured image from Shutterstock.

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Cryptocurrency users have expressed various concerns regarding the HitBTC exchange in the past. Slow response times to customer support tickets and deposit and withdrawal issues have occurred on multiple occasions. It now seems the company is asking some users for their social media information as a proof of identity.

The New HitBTC Verification Procedure

Cryptocurrency exchanges have to adhere to very strict rules. In all cases, they must verify the identities of their users through KYC and AML checks. In most cases, it suffices to share documentation to verify one’s identity and address of residence. Some platforms are taking this measure one step further, and have sparked a fair bit of criticism from users in the process.

HitBTC is setting a very interesting precedent in this regard as of right now. On top of its traditional verification requirements, HitBTC now demands that some users verify their social media accounts. To most people, this seems like a very unusual approach, although the company seems confident it is doing the right thing.

One Reddit user has shared how this procedure works. After sharing the necessary documentation with HitBTC, it asked for the origin of specific transactions involving deposits made to the exchange. That in itself was not unusual, as other exchanges have taken a far stricter approach when monitoring for suspicious transactions involving Bitcoin or other cryptocurrencies.

In this case, the HitBTC security team then asked for “data regarding social networks presence”. More specifically, the company is interested in this specific user’s social media profiles. Why that information was necessary remains to be determined at this stage. It is a rather unusual approach, as an exchange will seemingly not gain any further insights by looking at a user’s social media accounts.

Perhaps the most interesting point is that HitBTC now requires users to sign in without any tools disguising one’s network data. Such tools include VPNs, proxies, and SOCKS5. Even a DNS changer could be problematic for HitBTC users, by the look of things. It is the first time an exchange has gone to such lengths to ensure it can verify a specific user’s identity and behavior. It’s a worrisome precedent which has created a lot of backlash from other cryptocurrency community members.

As one would expect, this development has fueled rumors that HitBTC has turned into a “scam exchange”. People need to keep in mind that there is nothing which makes HitBTC look suspicious, insolvent, or a scam. Throwing around such harsh allegations without any evidence is highly problematic. At the same time, this new verification procedure won’t make the company any more popular, as users feel that it’s an invasion of their privacy first and foremost.

Europe’s largest trader of exchange-traded funds(ETF) is entering the crypto world.

Kenya’s Treasury Secretary Henry Rotich reportedly has two weeks make a decision regarding cryptocurrencies’ future as legal tender, according to Coingape.

Since 2015, the status of digital currencies in the African nation has been tenuous, with both the central bank and the government taking a prohibitive stance, the latter sending circulars to banks to warn them of the dangers of becoming involved with cryptocurrencies. The outcome of years of indecision regarding cryptocurrency legislation has unintentionally created a vibrant market, largely ignored by the government… until now. The circular warns banks to keep away:

“The purpose of this circular therefore is to caution all institutions against dealing in virtual currencies or transacting with entities that are engaged in virtual currencies. You are advised not to open accounts for any person dealing in virtual currencies such as Bitcoin. Failure to comply with this directive will lead to appropriate remedial action from the Central Bank.”

It wasn’t until May of this year until any concrete measures were proposed in order to legislate the space with the idea of a special unit. The Capital Markets Authority (CMA) in Nairobi, Kenya proposed the creation of a unit to handle cryptocurrency related issues, which would include the Central Bank of Kenya (CBK) although it remains unclear what, if anything, has materialized from the proposal.

Despite the announcement, it appears that Kenya has met with strong resistance from banks to legalizing digital currencies despite positive positions taken by legislators regarding blockchain technology.

The Kenyan Parliament now wants Secretary Rotich to explain why trade in Bitcoin and other virtual currencies have continued to take place without legislation over time. The Finance and National Planning Committee’s Chair Joseph Limo recently called for explanations.

“We are surprised to hear that even the CBK is not aware that there is a lounge at Kenyatta University, an ATM in town, and a hotel in Nyeri which trade in Bitcoins. There is a bigger problem in Kenya since people are trading billions in virtual space yet the Treasury has not licensed and taxed it…”, said Limo.

Rotich explained to MPs that discussions were ongoing globally regarding minimizing risks due to cryptocurrency misuse and money laundering, while Kenya’s government was still considering its own options. He stressed the instability of digital currencies, speaking of maintaining a “delicate balance between supporting innovation and killing it”, also adding he wasn’t aware of exchanges operating locally.

The black market in cryptocurrencies is actually vibrant in the country despite the Treasury Secretary’s claims. As Michael Kimani, Chairman of the Blockchain Association of Kenya, explains, lack of legislation has led to this market which many locals profit from because of Kenya’s somewhat simple definition of what it regards as “currency”.

Under the Central Bank of Kenya Act, Chapter 491:

1. “Currency” is defined as the currency of Kenya or foreign currency;
2. “Currency of Kenya” means banks, notes and coins issued by the Bank under section 22(1); and
3. “Foreign currency” means bank notes or coins which are or have at any time been legal tender in any territory outside Kenya.

The loophole for cryptocurrencies in Kenya is that there is no existing definition which would enable them to find a place in law under the central bank’s guidelines. Kimani clarifies the governments’ problem:

“Virtual currencies fall of short of these antiquated definitions of currencies. They are digital representations of value that are not issued by a central bank, public authority and not necessarily pegged to units of domestic or foreign currencies. Often, they are denominated in their own units of account and have no physical paper equivalent.”

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This article originally appeared on Bitcoin Magazine.

At press time, the father of cryptocurrencies has dropped down to about $6,400. That is roughly $200 less than where it stood yesterday afternoon.

Enthusiasts everywhere were pleasantly surprised to see the currency spike to $6,600 just prior to the start of the week. However, things began looking a little worrisome when $6,500 entered the mix, and bitcoin fell by approximately $100 within 24 hours. Later, bitcoin struck home and jumped to $6,600 again, but it is now down by $200.

It appears maybe traders don’t have to be too worried just yet. Bitcoin is likely going through mild changes and corrections over this seven-day period as it attempts to recover from the $5,800 mark it struck last week. A drastic drop like that is sure to put a dent in bitcoin’s plans, and it probably needs time to fix itself.

However, where some investors are losing confidence is in the year-end price. For several months, Fundstrat analyst Tom Lee – who has been one of bitcoin’s primary bulls – has insisted that the currency would end 2018 at a price of roughly $25,000. Despite the endless swings and volatility, Lee has stuck to his guns and his prediction.

Now, the financial expert is backtracking a bit. While he still believes bitcoin could end the year at over $20,000, he’s not as confident in $25,000, and he’s pulling his prediction back by roughly 20 percent. He now explains that bitcoin will end 2018 at a price of around $22,000.

“Bitcoin has historically traded at 2.5 times its mining costs,” he states. “It is not out of the question that it could still be over $20,000 by the end of the year at fair value.”

He says investors need not concern themselves with the difference of a few thousand dollars, and that any return to the $20,000 mark or beyond would increase a person’s bitcoin earnings by roughly 200 percent.

“Cryptocurrency miners use high-powered computers that use a lot of electricity to complete a series of complex calculations to create a bitcoin,” he explains. “The reason bitcoin looks so good here is the cost of mining is around $7,000 fully loaded, and the difficulty is rising, so by the end of the year, it’s going to be $9,000 at least.”

This would constitute a $2,000 in mining costs in less than six months, and bitcoin has proven itself to be relatively unpredictable over the past few years, incurring massive jumps from low positions and then massive low points from high positions. Thus, maybe it’s near impossible to put a year-end price stamp on something that refuses to play by the rules. Still, Lee remains adamant five-figures is within reach.

Bitcoin Charts by TradingView

Fundstrat Global Advisors’ price target for Bitcoin was updated to “over $20,000 by the end of the year”, according to Tom Lee, founder and head strategist of the equity research house. While bullish and predicting a turn of events within the next six months, Lee’s forecast is still a cut of about 20% on the previous price target, estimated at $25,000.

Fundstrat’s Tom Lee Cuts Bitcoin Price Target Which Is Still 200 Percent Higher Than Today

Bitcoin has bounced off the $5,800/$6,000 lows last week and is now steadily moving towards the $7,000 area.

The world’s largest cryptocurrency by market capitalization remains pressured to the downside overall in 2018, but a wider time frame provides a different story to investors and analysts. Bitcoin is trading more than two times its worth exactly one year ago when it traded at $2,577. Quite a feature when compared to most markets, especially foreign exchange.

Tom Lee, the only major Wall Street analyst to issue price forecasts for Bitcoin, takes the whole history of Bitcoin and the most recent developments into account when updating the price target, which once was placed at $25,000. Lee explained on CNBC’s pre-market morning news and talk program “Squawk Box” how he calculated the new $20,000 target for the year-end.

“Bitcoin has historically traded at 2.5 times its mining costs. It’s not out of the question that it could be over $20,000 by the end of the year at fair value.”

Tom Lee Lee, a former chief equity strategist at JPMorgan, still stressed that the new price target is about 200 percent higher than current levels, at approximately $6,750.

“The reason bitcoin looks really good here is the cost of mining around $7,000 fully loaded. And the difficulty is rising. So by the end of the year, it’s going to be $9,000.”

Cryptocurrency miners have already made about 80 percent of the 21 million to be ever put into existence. The Fundstrat’s lead strategist explained that the distributed ledger technology is a multidecade story in its early stages like many other technologies that preceded blockchain. “I did wireless in the 1990s. I saw 20 years of mobile and internet convergence. To me, this is not that different,” Lee said.

Tom Lee first issued the $25,000 price target for Bitcoin in September 2017. The digital asset, which is worth 42.1% of the whole cryptocurrency market, according to CoinMarketCap, did rally intensely in Q4 2017, but the bullish momentum peaked at the $20,000 area.

In May 2018, the analyst said: “The move from $8,000 to $25,000 [would] happen in a handful of days.” Last month, Lee doubled down on his $25,000 prediction.

Featured image from Shutterstock.

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Messaging applications are very keen on issuing their own tokens and digital currencies these days. Telegram has hosted a successful ICO, Kakao is looking to do the same, and now Viber is going down a similar path. Parent company Rakuten’s officials indicated that the new currency may be issued in Russia, of all countries.

A Bold Plan by Viber

Russia is not a country known for its open-minded approach toward cryptocurrencies. Government officials are still in the process of officially regulating this growing industry. Some officials favor an outright ban on Bitcoin, whereas others want to let the ecosystem grow. It makes for a very peculiar ecosystem, albeit one that attracts a lot of attention.

Viber, a well-known messaging and VoIP application, is in the process of launching its own digital currency in Russia. That decision strikes many people as odd, mainly because of the uncertainty in this country when it comes to this new form of money. Parent company Rakuten, which is the creator of Viber, is currently in the process of educating itself on Russian laws affecting the cryptocurrency industry.

The current plan of action is to issue a new currency known as Rakuten Coin. This currency will be based on the company’s existing loyalty program. If all things go according to plan, this new digital currency will be launched at some point in 2019, though the timeline does not appear to be set in stone.

Rakuten Coin will make its way to the Viber platform shortly after its launch. It will be tradable for rubles, dollars, and euros. Whether or not any specific use cases will be created for this currency within the Viber ecosystem remains to be seen. Buying premium stickers or offering some additional customization options are all options worth exploring for Rakuten. Few details regarding the company’s plans have been made public at this stage.

Additionally, Viber will get its own e-commerce platform in Russia in late 2018. It is likely this platform will pave the way for the adoption of Rakuten Coin, although there is no official word on which products will be bought or sold on this platform once it launches. Rakuten has some very big plans for cryptocurrency as a whole, which will bring a lot more positive attention to this industry.

One worrisome point, however, is that Rakuten Coin will create even more dilution in the cryptocurrency world. While it is only natural that the company wants to embrace its own currency rather than Bitcoin or Ethereum, one has to wonder if this is a viable long-term strategy. For Viber, it will make social messaging and VoIP very different from how it feels today, as the app will also become an unusual remittance solution.

Bittrex and invest.com announced that they will partner to launch a cryptocurrency trading platform under the invest.com brand name.

Tezos is finally here — time to remember how the project started and what caused the infamous delay

The deadline for the Indian central bank crypto dealings ban to be implemented ends today, as Bitcoin dips below $6,500

IBM has signed a five-year $740 million deal with the Australian government to bring blockchain and other new technologies to “many, many government agencies”