Over 500 BTC Belonging to Iranians Seized by US Government: Report

Over 500 BTC Belonging to Iranians Seized by US Government: Report

According to the head of Iran’s Blockchain Association, over 500 BTC belonging to Iranians were confiscated by the U.S. government last year, and the number is still rising. He explains that Iranians are unable to take action through proper channels from within their country due to Iran’s legal status of cryptocurrency.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Iranians’ 500 BTC Seized by US Government

Sepehr Mohammadi, the president of Iran’s Blockchain Association, told Ibena news outlet last week:

Last year, a remarkable volume of bitcoins which belonged to some Iranians were confiscated for unspecific reasons by the federal government of the United States, and the process of confiscation is still continuing.

Over 500 BTC Belonging to Iranians Seized by US Government: ReportHe admitted that the exact number of confiscated BTC “is not clear, but it is expected to be over 500 bitcoins, worth approximately 25 billion tomans ($5.77 million)” at the time, the publication quoted him.

“Some people believe that this confiscation is because bitcoin owners were circumventing U.S. sanctions,” Mohammadi added.

Over 500 BTC Belonging to Iranians Seized by US Government: ReportRecently, news.Bitcoin.com reported that the government of Iran is considering using cryptocurrencies to evade long-held U.S. economic sanctions. Mohammad Reza Pour-Ebrahimi, the chairman of the Iranian Parliament’s Economic Commission, said in an interview with Mizan news agency on July 15 that digital currencies are among the major mechanisms that Iran can use to the evade the sanctions. He noted that the Iranian parliament will soon discuss this issue.

Legal Challenge

Mohammadi further explained to Ibena the challenges Iranian citizens face to recover their cryptocurrencies:

The owners of confiscated bitcoins are unable to take legal action against the U.S. inside Iran as cryptocurrencies are banned in the country. The association is looking to take international legal action, but they have not yet found a legal expert in anti-money laundering law who will handle the case.

Over 500 BTC Belonging to Iranians Seized by US Government: Report
Central Bank of Iran.

In April, the Central Bank of Iran (CBI) banned banks and financial institutions in the country from dealing with cryptocurrencies. The CBI claimed that “All cryptocurrencies have the capacity to be turned into a means for money laundering and financing terrorism and in general can be turned into a means for transferring criminals’ money.”

Nonetheless, Pour-Ebrahimi told Ibena in May that even though “few people in Iran are cryptocurrency users,” according to his data, “more than 2.5 billion dollars has been sent out of the country for buying digital currencies.”

What do you think of the US government seizing Iranians’ BTC? Let us know in the comments section below.


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UK Police Top up Budget With Proceeds From Sale of Seized BTC

UK Police Top up Budget With Proceeds From Sale of Seized BTC

A UK police department has sold 295 BTC which they say were legally seized from a drug dealer. The court ordered him to forfeit his crypto stored in a hardware wallet. The police reportedly get to keep 18.8% of the sale proceeds.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

British Police Seized BTC from Drug Dealer

The Crown Prosecution Service (CPS), the principal public prosecuting agency for conducting criminal prosecutions in England and Wales, unveiled this week the details of a case involving 295 BTC. The CPS wrote:

A drug dealer and money launderer who was using cryptocurrency to conceal his funds has had over £1.2 million [~US$1.6 million] worth of bitcoins seized, restrained and then converted into British pounds in the first case of its kind.

UK Police Top up Budget With Proceeds From Sale of Seized BTC
Sergejs Teresko.

Sergejs Teresko, a 31-year-old Latvian, was arrested on suspicion of money laundering and drug offenses in April last year. A “cannabis factory,” a number of fake identification cards, luxury goods such as jewelry and Rolex watches, gold bars, expensive cars and large sums of cash were found at his home in Surrey, a county in southeast England.

He pleaded guilty on October 6 “to one count of being knowingly concerned in the production of a controlled drug, one count of possessing criminal property, one count of possession of articles for use in frauds and six counts possession of an identity document with improper intention,” the CPS detailed.

Teresko “was later convicted of money laundering and drug offenses at Kingston Crown Court where he was sentenced to nine years, three months in prison,” the agency noted:

In total, Teresko was found to have made £2,058,613 [~$2,703,578] from his crimes with an available amount of £1,447,935 [~$1,901,574] to pay back. He was given three months to pay the order or would have to spend a further 10 years in prison.

Kingston Crown Court ruled on Thursday that Teresko must forfeit the £1,447,935 “of his ill-gotten gains, including bitcoin,” the Financial Times reported.

Keepkey Wallet Found

According to Surrey Live, a Keepkey hardware wallet was found at Teresko’s home. Surrey Police then secured a warrant to access the device. DI Rob Bryant of South East Regional Organised Crime Unit was quoted by the news outlet:

We didn’t think we were going to actually find anything in these wallets. We thought we would open them and there’d be nothing there.

The cops, however, found two wallets on the device. The first did not contain anything but the second had 295 BTC. When they found out the coins’ worth, “the colour started to drain from a number of faces,” the publication quoted Bryant saying.

The Independent elaborated:

Surrey Police has now become the first UK force to successfully seize bitcoin, convert it into sterling and be granted permission by a court to keep the cash for government and police coffers.

Police Can Keep 18.8%

Using “powers under the Proceeds of Crime Act,” Surrey Police seized Teresko’s coins, the CPS revealed.

UK Police Top up Budget With Proceeds From Sale of Seized BTCCiting BTC’s “extreme volatility and the risk of it being moved on or stolen,” the cops applied to the court to seize the coins and convert them into sterling, Surrey Live described. They convinced the judge that “bitcoin was a real thing that could be seized,” the news outlet wrote.

The CPS explained that it “applied to have the restrained bitcoins converted into pounds. The 295 bitcoins were then sold by Surrey Police through an approved bitcoin exchange.”

According to the Financial Times, the police “set up its own bitcoin wallet and then used an offshore exchange to transfer and convert” the seized BTC. The proceeds were then “transferred to a police bank account,” the publication added:

Surrey Police gets to keep 18.8 percent of the proceeds of Teresko’s crimes — about £273,000 — which the force can use to top up its operating budget.

What do you think of this case? Let us know in the comments section below.


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Indian Central Bank Makes a Case Before Supreme Court Against Allowing Crypto Use

Indian Central Bank Makes a Case Before Supreme Court Against Allowing Crypto Use

India’s central bank told the country’s supreme court on Friday that “allowing dealings in cryptocurrencies like bitcoin would encourage illegal transactions.” Other crypto petitions being heard include one asking the government to “take emergency steps to restrain the sale and purchase of illegal cryptocurrencies.”

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

RBI’s Argument

The Reserve Bank of India (RBI), the country’s central bank, appeared before the supreme court Friday to defend its position regarding cryptocurrencies. RBI issued a circular on April 6 banning financial institutions under its control from providing services to crypto companies.

According to the Economic Times, the central bank told the court:

Allowing dealings in cryptocurrencies like bitcoins would encourage illegal transactions and it has already issued a circular prohibiting use of these virtual currencies.

Indian Central Bank Makes a Case Before Supreme Court Against Allowing Crypto UseRBI explained that crypto is “a stateless digital currency” that operates independently of a central bank such as itself, thereby “rendering it immune from government interference,” the news outlet noted.

The Financial Express elaborated that the central bank believes “it is necessary to regulate the bitcoin and other cryptocurrencies to check illegal transactions which will impact the international flow of funds.” Senior counsel Shyam Divan, appearing for RBI, reiterated that the central bank has a particular stance and other departments may have other positions.

Petitions Being Heard

Petitions against the RBI crypto banking ban are not the only ones that the supreme court is hearing. The Economic Times described:

Some petitions challenged the use of virtual currencies and alleged that they posed grave dangers to the traditional economy and they also sought framing of guidelines to regulate them … They also sought a direction for the Centre to take emergency steps to restrain the sale and purchase of illegal cryptocurrencies.

Indian Central Bank Makes a Case Before Supreme Court Against Allowing Crypto UseThe Hindu pointed to one particular petition, filed by father and son Siddharth Dalmia and Vijay Pal Dalmia. “Mr. Dalmia, in his plea, has sought a direction to the Centre to take steps to restrain sale and purchase of illegal cryptocurrencies like bitcoins, which were being traded openly for ‘illegal activities’ like funding terrorism and insurgency,” the publication wrote.

The supreme court already heard the duo’s initial petition in November last year and subsequently issued notices to various government departments including RBI. The central bank responded at the time that it had warned people against the usage and risks associated with crypto. However, the Dalmias were not happy with RBI’s reply and filed a new petition, pointing out the inadequate action by the central bank.

At the hearing on Friday, the supreme court gave the government until September 11 to respond to all petitions.

What do you think of RBI’s view and action? Let us know in the comments section below.


Images courtesy of Shutterstock and RBI.


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Big-Name Insurers Stepping Up Their Crypto Game

Big-Name Insurers Stepping Up Their Crypto Game

A growing number of big-name insurers are getting into the crypto space. They are exploring new product options in this area and meeting with cryptocurrency custodians and trading platforms about coverage. However, exclusions can add up fast for crypto businesses and premiums can be more than five times that of a normal business.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Large Insurers Getting into Crypto

While most big-name insurers are reluctant to provide coverage to crypto startups, some are slowly coming around and quietly entering the space. Two leading insurance brokers that help companies shop for crypto policies, Marsh & Mclennan and Aon, were quoted by Bloomberg on Thursday:

Business has been brisk this year.

Big-Name Insurers Stepping Up Their Crypto GameMarsh has formed a dedicated team to service blockchain startups while Aon says it has “seen some insurers tweak general company policies to include crypto-specific protections,” the publication detailed, adding that Aon also claims to have over 50 percent of the crypto insurance market.

According to the company’s website, “Aon has been working to understand these evolving technologies and actively collaborates with the insurance marketplace to develop innovative risk transfer solutions.” Its subsidiary, Aon Risk Solutions, has “developed a policy form to protect against the loss of cryptocurrency along with other initiatives designed to meet the emerging risks posed by cryptocurrencies and digital ledger technologies,” Business Insurance magazine described.

Big Opportunities

Big-Name Insurers Stepping Up Their Crypto GameEuropean insurer and asset manager, Allianz SE, has 88 million retail and corporate clients in more than 70 countries. The Munich-based company “began offering individual coverage for digital-coin theft in the past year,” the publication conveyed and quoted the company’s spokesman, Christian Weishuber, saying:

Insurance for cryptocurrency storage will be a big opportunity…Digital assets are becoming more relevant, important and prevalent on the real economy and we are exploring product and coverage options in this area.

American International Group (AIG) “has also been adding crypto coverage into standard policy forms” and has “met with cryptocurrency custodians and trading platforms about coverage,” the news outlet detailed and quoted a source familiar with the matter:

Over a dozen underwriters, including Chubb and XL, currently provide coverage to crypto-related businesses.

In February, Reuters reported that XL Catlin, Chubb, and Mitsui Sumitomo Insurance firms started offering protection against crypto theft.

Costly Premiums

Big-Name Insurers Stepping Up Their Crypto GameCrypto companies are also increasingly seeking to obtain insurance coverage to help attract more clients. A London-based startup focused on crypto custody services, Trustology, is one of the businesses in talks to obtain coverage, according to Bloomberg. The company wants to insure its customer accounts for up to £85,000 (~US$111,630), which is the same standard as a U.K. bank account.

However, insurance premiums for crypto-related coverage are costly and policies can take months to get approved, the publication conveyed, adding that “exclusions can add up fast.” For example, while losses from an interruption of service may be covered, the theft of cryptocurrency that caused the interruption may not.

Citing that many startups cannot afford to pay the high premiums, the news outlet elaborated:

The premiums from insuring such risk can be substantial. By some accounts, underwriters can charge a crypto-related company upwards of five times or more than your average business for coverage against loss or theft.

Do you think soon all big-name insurers will soon get into crypto? Let us know in the comments section below.


Images courtesy of Shutterstock, Allianz, and Aon.


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EOS Leads China’s Blockchain Rankings Once More

China ranks EOS number one

The third round of blockchain rankings has been released by the Chinese government. Yet again, China ranks EOS number one.

The rankings, released by the government-backed China Electronic Information Industry Development (CCID), evaluate the public blockchain networks with three different metrics. The metrics include technology, applicability, and innovation.

Previous Leaders

CCID released its first set of rankings back on May 16th, where Ethereum was ranked the world’s top blockchain network.

4/ Detailed scores of the first crypto ratings by CCID Research, China’s Ministry of Industry & Information Technology pic.twitter.com/7LiJIWokge

— ...

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Indian Supreme Court Heard Crypto Petitions Today but RBI Ban Stays

Indian Supreme Court Heard Crypto Petitions Today But RBI Ban Stays

India’s Supreme Court heard the petitions against the crypto banking ban by the Reserve Bank of India (RBI) today. After hearing some arguments from both sides, the court decided to set another hearing date, allowing some of the regulators involved to respond to the petitions.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Supreme Court Hearing on July 20

Indian Supreme Court Heard Crypto Petitions Today But RBI Ban StaysThe long-awaited hearing at which the Supreme Court of India was scheduled to address all of the petitions against the crypto banking ban by the country’s central bank has finally taken place.

Today’s hearing follows the hearing on July 3 of the petition by the Internet and Mobile Association of India (IAMAI). The court did not grant a stay against the ban at that time. Last week, the central bank responded to a representation by the association but did not change its stance on crypto.

The latest chapter of the courtroom saga did not see an overturn of the ban. The court also did not hear all arguments by both sides. Crypto Kanoon, a platform engaged in crypto regulatory analysis, legal awareness and news, detailed:

Limited arguments were advanced on behalf of IAMAI and RBI today.

Another Hearing Date Set

Indian Supreme Court Heard Crypto Petitions Today But RBI Ban StaysThere are at least five writ petitions filed against the RBI ban. However, according to Crypto Kanoon, “SEBI [the Securities and Exchange Board of India] and few others have not filed their response to the petition seeking regulation…All (remaining) parties to file their reply within 4 weeks.”

Sohail Merchant, CEO of crypto exchange Pocketbits, commented on the outcome of today’s hearing:

Final hearing [is] slated for 11th of September. Now that is the Judgement Day.

According to lawyers familiar with the case, the central bank has been challenged on two grounds. They concern article 19(1) (g) and article 14 of the Indian constitution. The former “allows citizens to enjoy the right to carry on any occupation, trade, or business,” Quartz explained, adding that the latter “prohibits discrimination and mandates equal protection under the law for all.”

P2P Services Live

In response to the RBI banking ban, a number of crypto exchanges in the country have set up peer-to-peer (P2P) services.

Indian Supreme Court Heard Crypto Petitions Today But RBI Ban StaysKoinex launched its P2P platform called Loop on July 17. “Loop is a peer-to-peer fiat to crypto trading platform where registered users can trade in cryptos with other registered users in INR,” the exchange described.

“To ensure user safety, a built-in escrow system is employed which releases the cryptocurrency only after the seller double confirms the exact payment of the trade.” According to its website, the service currently offers the buying and selling of BTC, ETH, and XRP without network or transaction fees.

Last week, Wazirx launched its P2P service, also without network or transaction fees. The exchange recently claimed to have 125,000 users on its main platform after operating for four months. Meanwhile, Coindelta is also preparing to launch a P2P service called Flux.

What do you think of the Supreme Court hearing today? Do you think RBI’s ban will eventually be lifted? Let us know in the comments section below.


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TRON (TRX) Now Supported on Ledger Nano S

Ledger Nano S supports TRON

Ledger Nano S supports TRON: TRON (TRX), the world’s eleventh largest cryptocurrency by market cap, has just made the big announcement that it is now supported on the popular cold storage wallet the Ledger Nano S.

Thanks @LedgerHQ for supporting $TRX on your hardware wallet Ledger Nano S! pic.twitter.com/QoyDb9zbzF

— Justin Sun (@justinsuntron) July 18, 2018

But things don’t appear to be all sunshine and rainbows just yet.

Connection Issues

One user reported an error when trying to connect to TRON on the Ledger Nano S.

anyone else ...

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EOS is Breaking Transaction Processing Speed Records

EOS transaction speed: Transaction time is important. It has been a point of concern for many on the Bitcoin network for one, where congestion on the network has created a problem and transaction processing currently takes an average of 8-9 minutes.

In fact, transactions on Bitcoins network have ranged anywhere from 10 minutes to 30 minutes to even 7 days, 23 hours and 53 minutes at its peak in 2017.

But then there is EOS.

EOS Transaction Speed Breaks Record

EOS is blowing transaction times out the window with its near instant ...

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Fed Chair: Crypto Has No Intrinsic Value, Not a Store of Value, Great for Money Laundering

Fed Chair: Crypto Has No Intrinsic Value, Not a Store of Value, Great for Money Laundering

The Federal Reserve’s new chairman made his stance on cryptocurrency clear to the US House of Representatives on Wednesday. In his view, cryptocurrencies have no intrinsic value, are not used often as a means of payment, are not a store of value, but are great for money laundering. He also dismisses the idea that cryptocurrencies could pose a significant risk to the country’s financial stability at their current size.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Powell’s Testimony

The chairman of the U.S. Federal Reserve who took office in February, Jerome Powell, answered questions about cryptocurrencies in his testimony before the House Financial Services Committee on Wednesday.

Fed Chair: Crypto Has No Intrinsic Value, Not a Store of Value, Great for Money Laundering
Jerome Powell.

This committee has jurisdiction over issues pertaining to the U.S. economy, banking system, housing, insurance, securities, exchanges, monetary policy, international finance, international monetary organizations, and efforts to combat terrorist financing.

U.S. Representative and vice-chairman of the committee, Patrick T. Mchenry, asked Powell to outline his thinking on cryptocurrencies. The chairman replied that there are “significant” risks to “relatively unsophisticated investors” who “see the asset going up in price and they think this is great; I’ll buy this [but] in fact there is no promise behind that.” He elaborated:

Cryptocurrencies are great if you’re trying to hide money or if you’re trying to launder money…it doesn’t really have any intrinsic value so I think there’re investor or consumer protection issues as well.

Furthermore, regarding whether the Fed is considering issuing its own digital currency, the chairman clarified, “that’s not something we’re looking at,” reiterating, “we’re not looking at this at the Fed as something that we should be doing.”

As for whether cryptocurrency is a currency, Powell claims that “it’s not really a currency,” clarifying:

If you think about what currencies do, they’re supposed to be a means of payment and a store of value, basically. And cryptocurrencies…they’re not really used very much in payment. Typically people sell their cryptocurrencies and then pay in dollars. In terms of a store of value, you know, look at the volatility and…it’s just not there.

Regulatory Framework

Fed Chair: Crypto Has No Intrinsic Value, Not a Store of Value, Great for Money Laundering
Patrick T. Mchenry.

While questioning Powell, Mchenry outlined the current regulatory framework for cryptocurrency in the U.S. He detailed that each of the 50 states has its own requirements for crypto businesses operating locally such as obtaining a money service license.

There are also regulators such as the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) that have some jurisdiction over cryptocurrency when it falls under their domain, he described, reiterating:

There’s some broad [regulatory] framework of it but not a concerted effort by the federal government to understand what’s happening in cryptocurrency.

No Serious Risk to Financial Stability

Fed Chair: Crypto Has No Intrinsic Value, Not a Store of Value, Great for Money LaunderingMchenry further asked Powell whether the Fed sees cryptocurrency impairing its ability “to act on monetary policy, given the current shape and scope of the size of the market.” The Fed chair replied, “not at all today.”

Powell additionally explained his previous statement regarding the impact of crypto on the country’s financial stability. He recalled being asked, “do cryptocurrencies currently present a serious financial stability threat?” He clarified:

They’re not big enough to do that yet. That’s really what I was saying, not that they’re not a longer-term thing.

Powell believes that the recent BIS report and others have adequately outlined risks associated with cryptocurrency “and called on the appropriate regulatory bodies to address them.” He emphasized, “we don’t have jurisdiction over cryptocurrency. We have jurisdiction over banks,” adding that those with jurisdiction such as the CFTC and the SEC can address the investor protection aspects of crypto.

This week, the Financial Stability Board (FSB) also said that “Crypto-assets do not pose a material risk to global financial stability at this time.”

What do you think of Powell’s view on cryptocurrency? Let us know in the comments section below.


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Indian Bitcoin Ponzi Schemer Offers to Repay Initial Investments to Victims

Indian Bitcoin Ponzi Schemer Offers to Repay Initial Investments to Victims

The alleged bitcoin Ponzi kingpin, Amit Bhardwaj, has reportedly offered to pay back the initial investments in Indian rupees to those who lost money through his scheme. However, victims want the current value of their cryptocurrencies, not the initial investments. Zebpay, one of India’s largest crypto exchanges, has also been called in to help with the investigation.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Bitcoin Ponzi Kingpin Offers to Compensate Victims

Indian Bitcoin Ponzi Schemer Offers to Repay Initial Investments to VictimsAmit Bhardwaj, the founder of GBminers and Gainbitcoin, has offered “to pay back investors their initial investments in Indian rupees,” the Factor Daily reported Wednesday.

He has been accused of duping thousands of investors with promises of unrealistic returns on bitcoin investments. According to the news outlet, “dozens have filed police complaints in Pune, Mumbai, Nanded (Maharashtra), Kolkata, Delhi and others cities.” One of the victims was quoted as saying:

We want the returns in (today’s) cryptocurrency value and not the value of the cryptocurrency when we invested. Today, the bitcoin price is much higher than what it was when we invested. It is like Bhardwaj will keep the profits and just return the principal amount which is wrong.

Indian Bitcoin Ponzi Schemer Offers to Repay Initial Investments to VictimsSince the middle of 2015, more than Rs 1,000 crore (~US$146 million) is estimated to have been invested in the Bhardwaj-led Gainbitcoin empire, the publication detailed.

Citing that Zebpay, one of India’s largest crypto exchanges, was called in to help with the investigation, Inspector Jayram Paygude of the Pune Cyber Crime Cell explained to the publication:

Zebpay is the platform through which investment and sale of bitcoins were done in this case, which is why they were called for an enquiry.

Challenge Recovering Crypto

Indian Bitcoin Ponzi Schemer Offers to Repay Initial Investments to VictimsDuring an assembly session held last week, Nationalist Congress Party member Hemant Takle raised questions about the delay in recovering bitcoins “and the inability of the police to nab the remaining absconders in the case,” according to the news outlet. He also raised the question regarding the compensation that Bhardwaj’s victims will receive, pointing out the difference in the price of BTC now and at the time of their initial investments.

In response to Takle’s statement, Deepak Kesarkar, a member of the 13th Maharashtra Legislative Assembly, explained the difficulty in recovering some of the victims’ money which has been invested in bitcoin, stating:

Some of this amount is recovered by the police department through the e-wallets of these companies. The value of these digital currencies in the wallet will be recovered but it is difficult to recover the investment made in foreign companies.

Last week, the Indian state of Maharashtra announced that it is establishing a special unit to investigate all cases related to cryptocurrency, a move which follows the crypto banking ban by the Reserve Bank of India taking effect.

What do you think of Amit Bhardwaj offering to repay investors their initial investments? Let us know what you think in the comments section below.


Images courtesy of Shutterstock and Zebpay.


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Stellar (XLM) & Cardano (ADA) Lead the Crypto Market – Project Updates & Big Gains

Stellar(XLM) Cardano(ADA)

Stellar (XLM) & Cardano (ADA) – The total cryptocurrency market is booming this morning, as various crypto-positive news reports have given investors more confidence in the future of the cryptocurrency industry and market.

Source: CoinMarketCap

Wells Fargo and Bank of America announced this morning that both banks have applied for new blockchain and crypto related patents. Mastercard has even filed a new patent for consumer protection and payment transactions, using blockchain technology.

Due to all this crypto-positive news, mostly all coins in the top 100 are in the green, and ...

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Largest Association of Investment Professionals Adds Crypto to Curriculum

Largest Association of Investment Professionals Adds Crypto to Curriculum

CFA Institute, with over 150,000 members, is adding cryptocurrency topics to its curriculum for the first time. The course material will be released in August. A record 227,031 people in 91 countries and territories reportedly registered to take CFA exams this year.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Crypto Added to CFA Curriculum

Largest Association of Investment Professionals Adds Crypto to CurriculumThe world’s largest association of investment professionals, CFA Institute, “is adding topics on cryptocurrencies and blockchain to its Level I and II curriculums for the first time next year,” Bloomberg reported.

A global, not-for-profit organization, CFA Institute offers a range of education and career resources including the Chartered Financial Analyst (CFA) and the Certificate in Investment Performance Measurement (CIPM) designations. Its membership stood at 156,800 at the end of FY2017.

Citing that a majority of the candidates came from Asia, the news outlet elaborated:

A record 227,031 people in 91 countries and territories registered to take CFA exams in June…Material for the 2019 exams will be released in August, giving candidates their first opportunity to start logging a recommended 300 hours of study time.

Crypto – ‘Not a Passing Fad’

The CFA curriculum is organized into three levels. Level I tests “knowledge of the ethical and professional standards.” Level II tests how these standards are applied to situations analysts face. Level III tests how they are applied “in a portfolio management and compliance context.”

Largest Association of Investment Professionals Adds Crypto to Curriculum

Each level currently consists of 10 topics such as quantitative methods, economics, corporate finance, equity management, fixed income, derivatives, and alternative investments.

Largest Association of Investment Professionals Adds Crypto to CurriculumThe crypto addition is part of a new reading called Fintech in Investment Management, Bloomberg conveyed. The institute decided to include it “after industry participants showed surging interest in surveys and focus groups.”

Stephen Horan, the institute’s managing director for general education and curriculum in Charlottesville, Virginia, explained that “the CFA material on crypto and blockchain will appear alongside other fintech subjects including artificial intelligence, machine learning, big data and automated trading.” Citing that “more crypto topics, such as the intersection of virtual currencies and economics, may eventually be added to the curriculum,” he asserted:

We saw the field advancing more quickly than other fields and we also saw it as more durable…This is not a passing fad.

A 27-year-old financial economics student at Columbia University who took the CFA Level I exam in June, Kayden Lee, was quoted by the news outlet saying that “it will be beneficial for us since there’s been a huge expansion and adoption of crypto in our investment universe.”

What do you think of CFA Institute adding crypto topics to its curriculum? Let us know in the comments section below.


Images courtesy of Shutterstock and CFA Institute.


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G20 Watchdog Unveils Framework to Monitor Crypto

G20 Watchdog Unveils Framework to Monitor Crypto

A framework has been developed for the G20 countries to “monitor the financial stability implications of crypto-assets markets.” The Financial Stability Board says cryptocurrencies “do not pose a material risk to global financial stability” but supports their “vigilant monitoring.”

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

G20’s Crypto Monitoring Framework

The Financial Stability Board (FSB) announced Monday that it “has developed a framework and identified metrics to monitor the financial stability implications of crypto-assets markets.” The framework was developed in collaboration with the Committee on Payments and Market Infrastructures (CPMI).

G20 Watchdog Unveils Framework to Monitor CryptoThe board also published and submitted a report detailing its work on crypto-assets to the G20 as requested by finance ministers and central bankers at the G20 meeting on March 19 and 20 in Buenos Aires.

The FSB is an international body that monitors and makes recommendations about the global financial system to G20, an international forum for governments and central bank governors. The CPMI supports financial stability by promoting the safety and efficiency of payment, clearing, settlement and related arrangements.

G20 Watchdog Unveils Framework to Monitor Crypto

“The objective of the framework is to identify any emerging financial stability concerns in a timely manner,” the report states, adding:

The framework discusses the primary risks within crypto-assets and potential transmission channels to financial stability risks. The framework identifies which metrics the FSB might usefully monitor in the short-to-medium term.

The report also notes that “in general, monitoring the size and rate of growth of crypto-asset markets is critical to understanding the potential size of wealth effects, should a decline in valuations occur.” Furthermore, “the use of crypto-assets for payment or settlement is another transmission channel to be monitored.”

FSB’s Proposed Metrics

Citing that the crypto market and its public data sources, which the proposed monitoring metrics are based on, are “rapidly evolving,” the FSB warned that “the quality of the underlying data can vary, and might not always be satisfactory.” The report explains:

Market-related figures, such as metrics on prices, trading volumes, and volatility may be manipulated by generally prohibited practices such as ‘wash trading,’ ‘spoofing,’ and ‘pump and dump,’ the existence of which cannot be ruled out at this stage.

G20 Watchdog Unveils Framework to Monitor CryptoThe FSB also pointed out that “the proposed metrics may not fit all types of crypto-assets equally.” Nonetheless, it believes that they “provide a useful picture of crypto-asset markets and the financial stability risks they may present.” Over time, the FSB and the CPMI will consider improvements to the metrics as well as add new ones at a later stage.

No Material Risk to Financial Stability

The FSB report refers to decentralized, unbacked cryptocurrencies and crypto-assets as “first generation private digital tokens,” which are dismissed as “unsafe money.” However, it notes that “safer central bank issued cash may be less convenient in an era of electronic payments.” The report continues:

Crypto-assets do not pose a material risk to global financial stability at this time…At present, like crypto-assets in general, crypto-asset platforms do not pose global financial stability risks. Nevertheless, they raise other significant concerns, including consumer and investor protection, market integrity and money laundering/terrorism financing, among others.

The FSB further revealed that the Basel Committee on Banking Supervision is currently “conducting an initial stocktake on the materiality of banks’ direct and indirect exposures to crypto-assets.”

While the FSB does not believe crypto-assets pose a material risk to global financial stability, it supports “vigilant monitoring in light of the speed of developments and data gaps,” the report details.

What do you think of the FSB’s crypto monitoring framework? Let us know what you think in the comment section below.


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Crypto Exchange Coinrail Reopens with Offers to Recover 11 Cryptocurrencies

Crypto Exchange Coinrail Reopens with Offers to Recover 11 Cryptocurrencies

South Korean exchange Coinrail has resumed service after it was hacked last month. The exchange has offered users some options to recover their cryptocurrencies. Eleven cryptos were stolen, some of which have been fully recovered and are now available for trading and withdrawals. However, some coins were not recovered.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Services Resumed

Coinrail reported that it was hacked on June 10 with an estimated damage of about 45 billion won (~US$40 million). The exchange suspended trading after the hack as it tried to recover lost coins. Coinrail resumed service on July 15, announcing:

We have completely revamped the existing security system that exposed the vulnerability, and have upgraded the overall security level.

Crypto Exchange Coinrail Reopens with Offers to Recover 11 Cryptocurrencies

The cause of the hack was not disclosed by the exchange when it resumed trading, Sedaily noted. “KISA [The Korea Internet & Security Agency] is in the process of finalizing the investigation, but it is still being analyzed, and details of the incident cannot be disclosed,” the news outlet quoted a KISA official saying. Coinrail claims that its new security system “complies with KISA security guidelines.”

11 Cryptocurrencies Affected

A total of eleven cryptocurrencies were stolen, Coinrail revealed. They are dent (DENT), tradove b2bcoin (BBC), ether (ETH), jibrel network (JNT), bitcoin (BTC), kyber network (KNC), storm (STORM), tron (TRX), pundi x (NPXS), aston (ATX), and nper (NPER).

Crypto Exchange Coinrail Reopens with Offers to Recover 11 Cryptocurrencies
The 7 partially unrecovered cryptocurrencies.

Funds in DENT, BBC, and ETH have been fully recovered; customers can start trading and withdrawing them. “Recovery [is] in progress” for JNT, the exchange detailed.

The remaining seven cryptocurrencies have not been fully recovered, including BTC.

Cryptocurrencies that are not stolen or in the recovery process “can be immediately withdrawn and traded,” the exchange clarified, adding:

The amount of cryptocurrencies that have not been recovered cannot be withdrawn or exchanged until the recovery is complete.

Recovery Options

Crypto Exchange Coinrail Reopens with Offers to Recover 11 CryptocurrenciesThe exchange has come up with two recovery plans for the coins that have not been recovered. However, these plans have been criticized as being inadequate.

The first plan is for the exchange to purchase cryptocurrencies directly to recover damages. Coinrail says it will “pay back the unrecovered cryptocurrencies by gradually purchasing the cryptocurrencies with the profit from the service operation.”

The second is for Coinrail to issue its own RAIL tokens to affected customers. “Unrecovered cryptocurrencies can be exchanged at a rate of ‘1 RAIL = 0.72 KRW,'” the exchange noted. However, the price of RAIL “fell about 72.2 percent in about half a day [to 0.2 KRW] after Coinrail officially resumed trading at 8 pm on the 15th,” Sedaily described.

What do you think of Coinrail’s plan to compensate customers? Let us know in the comments section below.


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Russia Now Has a Registry of Whitelisted Crypto Companies

Russia Now Has a Registry of Whitelisted Crypto Companies

The Russian Association of Cryptocurrencies and Blockchain has created a registry of whitelisted companies that offer crypto-related products or services. Meanwhile, the bill to regulate cryptocurrencies in Russia has been delayed.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Whitelist of Crypto Firms

Russia Now Has a Registry of Whitelisted Crypto CompaniesThe Russian Association of Cryptocurrencies and Blockchain (RACIB) has created a whitelist of crypto companies. The list includes firms in the field of crypto mining, investment, marketing, legal, training, and initial coin offerings (ICOs).

Russia Now Has a Registry of Whitelisted Crypto CompaniesFrom early this year, legal entities and individuals in Russia have lost more than 270 million rubles [~US$4.3 million] from crypto-related investments organized by scammers and incompetent companies, RACIB detailed. The association has already started tracking unfair ICO projects and it hopes the registry will allow industry participants to find trustworthy partners in the space. RACIB elaborated:

The list of trusted companies will allow Russian and foreign market participants to base their work on trusted organizations and minimize the risk of fraud in the creation and development of Russian or foreign business in the field of mining, trading with cryptocurrency, blockchain technology and ICO.

Launched with 50 Companies

The association explained that the registry “consists exclusively of organizations that have undergone voluntary verification of reliability.” The criteria include “financial sustainability, experience and business reputation, lack of judicial judgments, availability of licenses and certificates (if necessary), [and] no arrears of taxes and fees.”

Citing that about 30 applicants are being verified, the association revealed:

At the moment, the registry includes more than 50 companies.

Russia Now Has a Registry of Whitelisted Crypto CompaniesThese companies are “trusted organizations which have already passed the verification procedure,” RACIB emphasized. Any legal entity in Russia wanting to be included can apply online. “The average period for document review is 10 days. At this time, third-party verification is not performed,” RABIC’s website states.

Additional testing and certification in three areas are already in the works, the association revealed. The first is a “certification for traders of crypto assets.” The second is a “certification for mining equipment suppliers” and the third is a “certification for mining farms.”

Russian Crypto Bill Delayed

The legal framework for the regulation of cryptocurrencies and ICOs in Russia is still in the preparation stage. The bill “On Digital Financial Assets” passed the first reading in the State Duma in May.

Russia Now Has a Registry of Whitelisted Crypto CompaniesLast year, Russian President Vladimir Putin ordered the regulation of cryptocurrencies and ICOs be finalized in July. However, Bankir wrote last week that the “consideration of draft laws on cryptocurrency was postponed to September.”

Elina Sidorenko, head of the State Duma’s interdepartmental working group responsible for a risk assessment on the turnover of cryptocurrencies, explained the delay in an interview with Hash Telegraph.

According to her, the Russian laws will be adopted after the “FATF [Financial Action Task Force on Money Laundering] standards are developed with respect to the risks of using cryptocurrency.” Without the FATF policies, it is difficult to adopt national legislation, she conveyed. The FATF draft document was expected to be considered at the session on June 27-29, “but in the end it was postponed to September,” Sidorenko detailed, elaborating:

Now in the State Duma there are several bills at once. And they are very different approaches to the definition of cryptocurrencies and tokens…The Central Bank believes that cryptocurrencies and tokens now do not have sufficient economic resources to function fully in free economic circulation.

What do you think of the Russian Association’s registry of whitelisted crypto companies? Let us know in the comments section below.


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Major Korean Exchange Bithumb Expanding into Japan and Thailand

Major Korean Exchange Bithumb Expanding into Japan and Thailand

One of South Korea’s largest cryptocurrency exchanges, Bithumb, is expanding into Japan and Thailand. The exchange is working on obtaining regulatory approval from the financial regulators of both countries. The new locations are part of the exchange’s global expansion plan.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Expanding into Thailand

Major Korean Exchange Bithumb Expanding into Japan and ThailandBithumb is currently working on obtaining regulatory approval from the Thai Securities and Exchange Commission (SEC), local media reported Friday. The exchange is the second largest in South Korea at the time of this writing, with a 24-hour trading volume of about $358 million, behind only the Kakao-backed Upbit with a $582 million trading volume during the same time period.

The exchange has already established a Thai subsidiary, Bithumb (Thailand) Company Limited, with registered capital of 3 million baht (~US$90,000). Zdnet quoted the company explaining the reason for its expansion into the Thai market:

Thailand is active in e-commerce and the fintech industry, and the government is showing great interest in digital currency as it promotes smart city business.

Thailand has recently finalized its regulatory framework for cryptocurrencies and initial coin offerings (ICOs). Bithumb has been building its Thai website, the publication added, noting that it plans to start service in Thailand at the end of October.

Major Korean Exchange Bithumb Expanding into Japan and Thailand
Bithumb Thailand’s website. Photo: Zdnet.

Expansion into Japan

Major Korean Exchange Bithumb Expanding into Japan and Thailand
Bithumb Japan’s website. Photo: Zdnet.

Japan legalized cryptocurrency as a means of payment in April of last year. All companies seeking to operate an exchange in the country must obtain approval from the country’s top financial regulator, the Financial Services Agency (FSA). However, with the hack of Coincheck in January, the FSA has been strengthening its oversight of crypto exchanges and imposing a stricter exchange approval process.

Nonetheless, Bithumb is seeking approval from the FSA with a plan to open an exchange in Japan in February next year, the news outlet conveyed. The exchange also revealed that “it plans to set up an exchange that supports the largest number of coins in Japan,” the publication noted.

Global Expansion Plan

Major Korean Exchange Bithumb Expanding into Japan and ThailandEarlier this year, Bithumb announced that it is looking for partners for its global expansion. The exchange says it will work closely with overseas partners to launch platforms that are faster and more efficient for traders worldwide.

Projects which Bithumb will collaborate with potential partners include “cash (deposit/remittance/debit) management processing, the operation of an exchange platform, [and] marketing & promotion and customer service,” the exchange detailed. According to the announcement:

Bithumb is preparing exchange platforms for countries under the global expansion plan and we are looking for great and potential partners (corporation, entity or group) worldwide…The exchange platforms under final development stages are USD / JYP / EUR / CNY / INR / GBP / AUD / CAD / PHP / RUB and [there] will be more soon when there are any service demands.

According to Money Today, Bithumb has also established a subsidiary in Singapore and Britain. “We are considering establishing overseas subsidiaries in various countries such as the U.S. and Europe, but the time has not yet been determined,” the exchange clarified.

In April, the third largest crypto exchange in South Korea, Coinone, announced its expansion into Indonesia.

What do you think of Bithumb expanding into Thailand and Japan? Let us know in the comments section below.


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Chile Appeals Court Rules in Favor of Crypto Exchange Against Bank

Chile Appeals Court Rules in Favor of Crypto Exchange Against Bank

In an ongoing dispute between banks and cryptocurrency exchanges in Chile, an appeals court has finally ruled in favor of one crypto exchange against one of the largest banks in the country. Five major banks have also separately responded to lawsuits against them in court.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Court of Appeals Ruling

Chile Appeals Court Rules in Favor of Crypto Exchange Against BankThe Fourth Chamber of the Court of Appeals of Santiago has ruled in favor of cryptocurrency exchange Orionx against Banco Estado for closing its account, local media reported. The ruling, which orders the only government-owned bank in Chile to reopen the exchange’s account, was published on Thursday.

The court decided that the bank’s action constitutes “an arbitrary and illegal action, which constitutes a deprivation of the right protected by Article 19 No. 2 of the Political Constitution of the Republic, that is, the right to equality before the law,” La Tercera quoted the ruling.

Chile Appeals Court Rules in Favor of Crypto Exchange Against BankBy closing the exchange’s account, the bank is preventing Orionx “from developing an activity that, although not regulated, does not prevent the bank from adopting less intensive security measures such as the development of effective monitoring and control programs before the final closure of the account,” Emol news outlet cited the ruling. The publication elaborated:

The document refers to breaches of contract and the impossibility of Banco Estado to determine that Orionx engages in money laundering with the currencies with which it operates.

While acknowledging the risks associated with crypto transactions, the court explained that businesses using them “as new forms of investment and payment…cannot necessarily be identified with the commission of criminal acts.”

Banks Responding to Lawsuits

A few lawsuits have been filed against the country’s major banks with the Court for the Defense of Free Competition (TDLC – Tribunal de Defensa de la Libre Competencia).

Chile Appeals Court Rules in Favor of Crypto Exchange Against BankOrionx sued six major banks last month for abusing their power and quashing its crypto payment business. Previously, another crypto exchange, Buda.com, filed a lawsuit against ten banks for closing its accounts and well as the accounts of another local crypto exchange, Cryptomkt. The antitrust court subsequently ordered three banks, including Banco Estado, to reopen the crypto exchanges’ accounts while the lawsuit is still pending.

On Friday, Diario Financiero reported that five banks have responded to the lawsuit against them before the TDLC. The banks are Santander, Banco de Chile, Banco de Crédito e Inversiones (Bci), Scotiabank, and Itaú. The exchanges allege that they abused their dominant position when they either closed the accounts of or denied opening them for crypto exchanges.

Santander wrote in its response letter that “the use of a current account would not be essential for the digital currency traders,” the publication conveyed.

Banco de Chile responded:

The closing of Cryptomkt’s current accounts is not based on the alleged danger of the activity carried out by the plaintiff or because it is not regulated by the authority, but…in the absence of concrete information that allows Banco de Chile to develop the due diligence in the matter of money laundering, since it is required to justify the transactions in the current accounts.

Bci denied any abuse of a dominant position, stating that it would be difficult to do so because crypto “is a practically decentralized market, with a large number of actors, according to public information available.”

What do you think of the Appeals Court’s ruling? Let us know in the comments section below.


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Indian Central Bank Justifies Its Crypto Stance – Outlines Key Areas of Concern

Indian Central Bank Justifies Its Crypto Stance - Outlines Key Areas of Concern

The Reserve Bank of India has justified its crypto banking ban to an industry group which has been trying to convince the central bank to ease crypto restrictions. In response, the central bank outlines key areas of concern and upholds its stance on crypto.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

RBI’s Main Concerns

Indian Central Bank Justifies Its Crypto Stance - Outlines Key Areas of ConcernIndia’s central bank, the Reserve Bank of India (RBI), has divulged key areas of concern regarding cryptocurrency. The communication is in response to a representation submitted by the Internet and Mobile Association of India (IAMAI). The document was sent to the central bank during the Supreme Court hearing of IAMAI’s petition against the crypto banking ban.

While RBI’s response cannot be made public, some industry participants have seen it and have discussed its content.

A source who has seen the document told news.Bitcoin.com that RBI told IAMAI it is particularly concerned about investor protection, cryptocurrencies’ lack of intrinsic value, and their anonymity, which could lead to money laundering.

Investor Protection

Indian Central Bank Justifies Its Crypto Stance - Outlines Key Areas of ConcernSohail Merchant, CEO of crypto exchange Pocketbits, commented on RBI’s response, stating that “all the basis of their arguments is ‘Investor Protection’.”

Nischal Shetty, CEO of crypto exchange Wazirx, concurred. “Some of the arguments seem to be around investor protection,” he noted, adding that “but investor protection comes with regulation and not a ban!”

Other crypto exchanges also agree that a ban is not the way to protect investors. Praveen Kumar, CEO of crypto exchange Belfrics, was quoted by Quartz:

By limiting transactions via bank accounts and allowing more cash-related transactions, RBI is allowing more people to get duped…Instead, they need to regulate the exchanges and lay down guidelines that can help prevent these frauds.

In addition, the source shared with news.Bitcoin.com that, “exchanges have been hacked globally and that worries them.”

There has been a rise in crypto-related scams in India. Even BJP party leaders have been accused of being involved in a bitcoin scam. Recently, the Indian state of Maharashtra announced that it is setting up a special investigative unit to investigate all crypto-related cases.

No Intrinsic Value

Indian Central Bank Justifies Its Crypto Stance - Outlines Key Areas of ConcernThe central bank is also concerned that “cryptos have no intrinsic value,” the source added.

RBI’s view reiterates the statement issued by the country’s finance ministry in December last year. Aimed at warning people of the risks of investing in cryptocurrencies, claiming that they are “like Ponzi schemes,” the statement reads:

VCs [virtual currencies] don’t have any intrinsic value and are not backed by any kind of assets. The price of bitcoin and other VCs therefore is entirely a matter of mere speculation resulting in spurt and volatility in their prices. There is a real and heightened risk of investment bubble of the type seen in ponzi schemes….

Anonymity of Crypto

The third major factor of concern for RBI is the “anonymity of crypto leading to money laundering,” the source noted.

However, exchanges argue that strict adherence to know-your-customer (KYC) norms would prevent money laundering, Quartz elaborated and quoted them clarifying, “all transactions are usually carried out via bank account transfers to keep a tab on the money trail.”

India is also not the only country concerned about the anonymity of crypto. Japan, where cryptocurrency is a legal means of payment, is another. The country’s top financial regulator has reportedly been pressuring exchanges such as Coincheck, which was hacked in January, to drop privacy coins.

What do you think of RBI’s concerns? Let us know in the comments section below.


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Japanese Police Seize Cryptocurrency for Parking Violations

Japanese Police Seize Cryptocurrency for Parking Violations

Japanese police have seized cryptocurrency belonging to a man with unpaid parking fines. The police explain that the revised fund settlement law enacted in April last year allows cryptocurrency to be seized like any other asset.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Crypto Seized for Parking Violations

Japanese Police Seize Cryptocurrency for Parking Violations
Image from the Hyogo Prefectural Police’s website.

The Hyogo Prefectural Police traffic guidance division announced this week that it had seized cryptocurrency owned by a 59-year-old resident with multiple delinquent parking violation charges, local media reported. Hyogo is a prefecture in the Kansai region of the country’s main island, Honshu. Kobe, located west of Osaka and Kyoto, is the capital of the prefecture.

The Kobe Shimbun reported that about 5,000 yen (~US$44) worth of cryptocurrency was seized but the police did not reveal which crypto. Nikkei, on the other hand, reported that “there were 2 kinds” of cryptocurrencies “such as bitcoin deposited with an exchange that were seized.” The news outlet elaborated:

According to the prefectural police traffic guidance division, it is the first time in the country to seize virtual currency in relation to parking violations.

Japanese Police Seize Cryptocurrency for Parking Violations
Image from the Hyogo Prefectural Police’s website.

However, the crypto seized from the man’s account at an exchange currently does not cover the total amount owed to the cops. According to the Kobe Shimbun, he has failed to pay a total of 99,700 yen (~$885) in violation charges including four parking tickets issued between January 2014 and July 2016.

The news outlet further detailed that if payment is not received by the end of this month, which is the deadline for claiming seized property, the cryptocurrency will be cashed out at the current rate and paid to the prefectural police.

Crypto is Asset that Can be Seized

The man’s parking violations are considered “unattended vehicle.” The Kyoto Prefectural Police explained that the term means “a vehicle that is illegally parked, with its driver away from the car, and which cannot be started immediately. This is regardless of the length of parking time, or whether the vehicle engine is turned on or off, or whether the emergency flashing lights on or off.”

Japanese Police Seize Cryptocurrency for Parking ViolationsUsually, “Land, houses, automobiles, bank savings, salary, and life insurance payouts could be seized, based on the decision of the Public Safety Commission,” the police clarified.

However, in the case of the 59-year-old, the Hyogo Prefectural Police “did not know his place of work and [he] had no cash deposits or savings,” the publication conveyed. Citing that the revised fund settlement act that legalizes cryptocurrency as a means of payment enables the police to seize crypto assets, the news outlet elaborated:

According to the prefectural police, after [crypto] asset value was recognized by the revised fund settlement law enforced in April last year, it [cryptocurrency] was judged as an asset that can be seized.

The Hyogo Prefectural Police have been increasingly active in collecting unpaid fines and have seized small items including an automatic mahjong table, golf bags, figurines, and brand name goods, the Kobe Shimbun described. The division says that they will not allow violators “to escape since it will be unfair for the people who are paying [the fines].”

Editor’s Note: Nathalie Stucky contributed to this article.

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Texas Regulator Issues Cease and Desist Order to a Network of Crypto Companies

Texas Regulator Issues Cease and Desist Order to a Network of Crypto Companies

The Texas State Securities Board has taken an emergency action to stop a network of crypto-related companies from illegally offering investments in the state. A token offering and a mining firm are among those targeted by the securities board as selling fraudulent “cryptocurrency-related investments.”

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Emergency Action Taken

Texas Regulator Issues Cease and Desist Order to a Network of Crypto CompaniesThe Texas State Securities Board announced Thursday that an emergency action has been taken to “target promoters of crypto-mining investments.” According to the notice published on July 12 by the Board:

Texas Securities Commissioner Travis J. Iles took emergency action July 11 to stop a network of companies from fraudulently offering cryptocurrency-related investments to Texas residents.

Utah-based companies Mintage Mining LLC, Symatri LLC, NUI Social, Social Membership Network Holding LLC, and BC Holdings and Investments LLC are named in the emergency cease and desist order. They are all controlled by Darren Olayan of Lehi, Utah. In addition, NUI Social affiliates, Utah-based Douglas Whetsell and Houston-based Wyatt Mccullough, are also named in the order.

Investment Schemes

Texas Regulator Issues Cease and Desist Order to a Network of Crypto CompaniesMintage Mining LLC allegedly issues and offers two different crypto mining-related investments “illegally and fraudulently.” Together with Symatri LLC, they sell “pre-configured computer hardware to mine Kala,” an ERC-20 token which Symatri claims to be “fungible and transferable, and it is expected to be traded on cryptocurrency exchanges in the near future.”

Symatri also claims that more than 13,000 users have signed up for Kala’s ICO, which sold more than 814 million tokens. It supposedly raised over $8.5 million and more than 800 BTC. According to the Commissioner:

Symatri is not disclosing material information about the value of its cryptocurrency Kala. Nor is it providing information about the risks of investments in the computer hardware used to mine Kala.

Texas Regulator Issues Cease and Desist Order to a Network of Crypto CompaniesNUI Social is a multi-level marketing company that claims to have more than 300,000 members in 140 countries. Members of the scheme recruit individuals for crypto investments and earn commissions for the people that they recruit.

Whetsell and Mccullough were named for publishing “advertisements targeting Texas residents,” the Commissioner explained. According to the document, the promoters made claims such as:

The average weekly rate of interest varies from three percent to seven percent and the annual rate of interest ranges from 180 percent to 250 percent.

The advertisements also represent that Mccullough’s investment grew 500% within 7 weeks while his uncle’s rose 4,000% in 10 weeks.

The Violations

The order “alleges widespread violations of the Texas Securities Act” by all of the entities and individuals named within. According to the Commissioner, “none of the persons offering any of the investments are registered to sell securities in Texas, nor are the investments themselves registered for sale or have qualified for an exemption from registration.”

The Commissioner elaborated:

The violations include making deceptive claims to the public. Olayan and Mintage Mining, for instance, are telling investors that Mintage is ‘in compliance’ with securities laws, ‘works to always stay ahead of cryptocurrency regulation,’ and ‘remain[s] so continually by keeping in contact with legal firms.’

All named parties have been ordered to immediately cease and desist from offering a security for sale in Texas until the security is registered or exempt. They must also cease acting as securities dealers or agents in the state until they are registered or exempt. They have likewise been told that they cannot engage in any security-related fraud in the state.

What do you think of the Texas State Securities Board’s cease and desist order? Let us know in the comments section below.


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