Danske Bank’s Alleged Money Laundering Now Totals $234 Billion, CEO Quits

Danske Bank's Alleged Money Laundering Now Totals $235 Billion, CEO Quits

The investigation into Danske Bank’s alleged money laundering has uncovered new funds. The amount of “questionable money” flowing through the bank’s Estonian branch has grown from $150 billion to approximately $234 billion. In response, the CEO of Danske Bank turned in his resignation.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

From $150B to $234B

Danske Bank's Alleged Money Laundering Now Totals $235 Billion, CEO QuitsDenmark’s largest bank released the report detailing the results of its internal investigation into the money laundering allegations involving its Estonian branch on Wednesday.

Prior to this release, $150 billion allegedly flowed through Danske Bank’s Estonian branch to suspicious accounts of non-resident clients from 2007 to 2015. However, the bank’s investigation has revised this number. Danske has “acknowledged that about €200bn [~US$234 billion] in questionable money flowed through its small Estonian branch in one of the largest money laundering scandals ever uncovered,” the Financial Times reported.

Lars Lokke Rasmussen, Denmark’s prime minister, was quoted by the news outlet:

I’m shocked. The numbers that came out today are of an astronomical magnitude. It is, of course, deeply disappointing that a bank that I consider to be an important player for Denmark has become involved in this kind of activity.

Danske’s Investigations

Danske Bank's Alleged Money Laundering Now Totals $235 Billion, CEO Quits“The investigations have been led by the Bruun & Hjejle law firm,” Danske Bank described, adding that “The scope of the investigations covers approximately 15,000 customers and 9.5 million payments.”

According to the report, “Some 12,000 documents and more than 8 million emails have been searched, and more than 70 interviews have been conducted with current and former employees and managers…Overall, approximately 70 people have worked full time on the investigations.” In addition, the report states that approximately 6,200 high-risk customers have been examined, “and the vast majority of these customers have been deemed suspicious.”

The Financial Times added that “The non-resident customers came from countries including Russia, the UK and the British Virgin Islands, but the bank said it could not yet estimate how much of the total was illicit.” The news outlet noted that Russia’s central bank said that Danske customers “permanently participate in financial transactions of doubtful origin,” estimated at billions of roubles monthly.

CEO Borgen Resigns

On Wednesday, Danske Bank also announced that its CEO, Thomas F. Borgen, has resigned. He has been the bank’s CEO since 2013 and was in charge of international banking including Estonia from 2009 to 2012. Borgen said:

It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia. I deeply regret this…I believe that it is best for all parties that I resign.

According to the bank’s announcement, Borgen will continue in his position until a new CEO has been appointed.

Donation and Revised Outlook

Danske Bank's Alleged Money Laundering Now Totals $235 Billion, CEO QuitsAnother announcement made by Danske Bank on Wednesday concerns the donation of DKK 1.5 billion (~$235 million).

“Danske Bank does not wish to benefit financially from suspicious transactions that took place in the non-resident portfolio of its Estonian branch in the period from 2007 to 2015,” the bank wrote, adding:

As the bank is not able to provide an accurate estimate of the amount of suspicious transactions made by non-resident customers in Estonia during the period, the Board of Directors has decided to donate the gross income from the customers in the period from 2007 to 2015, which is estimated at DKK 1.5 billion, to an independent foundation.

The foundation will be “set up to support initiatives aimed at combating international financial crime, including money laundering, also in Denmark and Estonia.”

The bank further explained that its net profit for 2018 has been revised downward due to this donation. “We now expect net profit for 2018 to be in the range of DKK 16-17 billion [~$2.5-2.7 billion],” the bank clarified, noting that previously it “expected net profit for 2018 to be at the lower end of the DKK 18-20 billion [~$2.8-3.1 billion] range.”

Why do you think regulators are going after crypto when there is so much money laundering in the banking system? Let us know in the comments section below.


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Japanese Regulated Exchange Zaif Hacked – Nearly 6000 BTC Stolen

Japanese Regulated Exchange Zaif Hacked – Nearly 6000 BTC Stolen

Japanese government-approved cryptocurrency exchange Zaif has confirmed that it has been hacked. After a preliminary investigation, the exchange says at least 5,966 BTC have been stolen, with an estimated total damage of $60 million. Some of the stolen coins belong to the exchange but the majority belong to customers.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Zaif Hacked

Japanese Regulated Exchange Zaif Hacked – Nearly 6000 BTC StolenJapanese crypto exchange Zaif has been hacked, its operator announced on Wednesday, Sept. 19. Tech Bureau Inc., which operates Zaif, explained that the exchange “detected server abnormality” on Monday and immediately suspended several services, including deposit, withdrawal, and merchant payment services.

The company revealed that unauthorized access to its hot wallet was detected between 17:00 and 19:00 on Sept. 14, elaborating:

Some of the deposit and withdrawal hot wallets were hacked by unauthorized access from the outside, and part of the virtual currencies managed by us was illegally discharged to the outside.

Japanese Regulated Exchange Zaif Hacked – Nearly 6000 BTC StolenThe exchange believes that three cryptocurrencies may have been stolen: BTC, BCH, and MONA. While it has confirmed that 5,966 BTC were stolen, the theft of the other two cryptocurrencies is still being investigated. Tech Bureau explained that the extent of the damage is currently unknown because the exchange’s server will not be restarted until it is confirmed to be secured in order to prevent further damage. Nonetheless, the company clarified:

It is estimated that the total loss due to the damage…is equivalent to about 6.7 billion yen [~US$60 million] (including MONA and BCH) in Japanese yen.

Out of the total damage, the company says 2.2 billion yen (~$19.6 million) belong to the exchange and 4.5 billion yen (~$40 million) belong to customers. Tech Bureau said it has asked for 5 billion yen (~$44.6 million) in assistance from a subsidiary of Fisco Ltd. to help repay affected customers, Kyodo News described.

Investigating and Rebuilding

In its announcement, Tech Bureau stated that it reported the breach to the Treasury Department on Sept. 18. “This case is a criminal case,” the company wrote, adding that it has requested an investigation into the breach. The company detailed:

Currently, we are checking and strengthening security, rebuilding the server, etc., in order to restart the system of depositing / withdrawing virtual currency.

The Osaka-based exchange, established in 2014, is one of the 16 government-approved crypto exchanges in Japan. The country’s Financial Services Agency (FSA) issued the company two business improvement orders: the first was on March 8 and the second on June 22. The agency ramped up its oversight of crypto exchanges after hackers stole 58 billion yen (~$534 million) worth of the cryptocurrency NEM from Coincheck in January.

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


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Major Korean Crypto Exchange Upbit Opens in Singapore Next Month

Major South Korean Crypto Exchange Upbit Opens in Singapore Next Month

Major South Korean cryptocurrency exchange Upbit will reportedly begin operations in Singapore next month. The new exchange will offer Singapore dollar trading as well as crypto-to-crypto pairs in three markets offered by Bittrex, Upbit’s US-based partner.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Upbit Expands to Singapore

Major South Korean Crypto Exchange Upbit Opens in Singapore Next MonthDunamu Inc., the operator of the Kakao-backed exchange Upbit, said on Wednesday that it is launching a cryptocurrency exchange in Singapore next month, Yonhap reported.

Major South Korean Crypto Exchange Upbit Opens in Singapore Next MonthUpbit is currently South Korea’s second largest crypto exchange. At the time of writing, its 24-hour trading volume is approximately $229 million, second only to Bithumb which has a 24-hour trading volume of $392 million. At present, Upbit has 271 cryptocurrencies listed.

Dunamu established a Singaporean branch office in February and has been preparing for an exchange launch ever since, the news outlet conveyed. Kim Kook-hyun, head of Upbit’s Singaporean branch, was quoted saying:

As Singapore has proactively supported blockchain technology, our advancement into the nation will help us secure many chances to lead a variety of relevant projects and to have global competitiveness.

Major South Korean Crypto Exchange Upbit Opens in Singapore Next MonthWithout revealing the exact launch date, the company confirmed that it will be in “early October.”

Singapore was picked as the firm’s first overseas expansion because of “the city-state’s strong support for blockchain and related technologies,” the Investor stated, adding that the firm plans to expand to more countries in the future.

At the Upbit Developer Conference held on Jeju Island, Dunamu CEO Lee Sir-goo confirmed that Upbit will not be issuing its own cryptocurrency. Referring to the exchange’s expansion to Singapore, he told reporters:

We don’t want to lose out on the opportunities now…If we wait until the Korean crypto exchange environment improves, we could lag behind our global competitors.

Plans for Upbit Singapore

The new exchange will be headed by Alex Kim who previously served as the head of Kakao Indonesia, the Investor described, elaborating:

The Upbit Singapore [exchange] will be serviced in English and offer Singapore dollar trading. It will also support crypto-to-crypto pairs, including Upbit’s US partner Bittrex’s bitcoin, ethereum and tether markets.

Major South Korean Crypto Exchange Upbit Opens in Singapore Next MonthLee detailed, “In the future we would like to add other fiat currencies and expand to other countries in Southeast Asia,” emphasizing that Upbit will continue to strengthen its partnership with Bittrex as it expands globally.

For the launch promotion, trading fees in the Singapore dollar market will be waived for one month for “users who complete their subscription and self-certification,” the publication noted.

Recently, several companies have expanded to Singapore. Line, the Japanese subsidiary of Korean internet giant Naver, has launched a crypto exchange called Bitbox in Singapore. In addition, Binance is beta testing a fiat exchange in the country, CEO Changpeng Zhao revealed last week.

What do you think of Upbit expanding to Singapore? Let us know in the comments section below.


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PBOC Provides Update on Its Crypto Prevention Efforts

PBOC Provides Update on Its Crypto Prevention Efforts

The People’s Bank of China (PBOC) has issued a statement detailing its efforts to stop and prevent crypto and initial coin offering activities in the country. The bank outlines measures against the widespread of overseas exchanges servicing domestic users such as blocking trading platforms and closing down 3,000 trading accounts.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Servicing Domestic Users From Overseas

PBOC Provides Update on Its Crypto Prevention EffortsThe Shanghai Head Office of the People’s Bank of China provided an update on the bank’s risk prevention measures for cryptocurrencies and initial coin offerings (ICOs) on Tuesday, Sept. 18.

PBOC Provides Update on Its Crypto Prevention Efforts“In recent years, speculation related to virtual currency has prevailed, prices have skyrocketed, and risks have accumulated rapidly, seriously disrupting economic, financial and social order,” the bank proclaimed. “In order to maintain financial stability,” the central bank referred to the announcement in September last year which shut down all crypto exchanges in the country.

Consequently, the bank emphasized that the country’s “global share of domestic virtual currency transactions has dropped from the initial 90% to less than 5%.” However, through tracking and monitoring the activities of crypto exchanges that left the country, the bank found:

Some virtual currency trading platforms originally set up in China have left, registered overseas and continue to provide [service] to domestic users.

In addition, the bank noted that other methods of token issuance have emerged. “Another issue is initial coin, fork and exchange offerings (ICOs, IFOs and IEOs) and cyber currencies that are hyped up under the guise of a sharing economy,” Yical Global quoted the bank.

PBOC’s Responses

PBOC Provides Update on Its Crypto Prevention EffortsIn response to the consequences of shutting down crypto exchanges in the country, the PBOC has deployed the National Internet Financial Risk Special Remediation Leading Group and adopted a series of targeted measures.

The first is to “strengthen the monitoring of virtual currency trading platforms” that provide trading services to domestic users from abroad. The publication detailed:

China’s central bank has blocked 124 cryptocurrency trading platforms that targeted Chinese residents while using overseas servers to sidestep local laws.

PBOC Provides Update on Its Crypto Prevention EffortsThe second is to strengthen the clean up of crypto-related payment and settlement services, including efforts to “guide the relevant payment institutions to strengthen payment channel management, identify customers and provide risk warnings, establish a monitoring and inspection mechanism, and stop providing payment services for suspicious transactions.” The bank disclosed:

Currently, the relevant payment channels have been checked and about 3,000 accounts engaged in virtual currency transactions have been closed.

Fighting ICOs

PBOC Provides Update on Its Crypto Prevention EffortsThe third measure the PBOC described relates to ICOs and similar products. The bank aims to strengthen the research and evaluation of these instruments in order to “fight early…prevent problems…and transmit clearer regulatory signals to the market.” As part of this plan, the bank wants to ramp up censorship efforts, including “the disposal of domestic ICOs and virtual currency transaction related websites.”

In conclusion, the central bank reminds consumers and investors to increase awareness of the risks of ICOs, their issuers, and individuals and organizations that facilitate crypto transactions “for domestic residents through the deployment of overseas servers.” The bank also urges citizens to report suspicious activities relating to cryptocurrencies and ICOs to the authorities.

What do you think of the PBOC’s efforts to stop domestic crypto and ICO activities so far? Let us know in the comments section below.


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Denmark’s Largest Bank Took Two Years to Close Accounts of Blacklisted Russian Clients

Denmark’s Largest Bank Took Two Years to Close Accounts of Blacklisted Russian Clients

Denmark’s largest bank, Danske Bank, reportedly knew that some of its Estonian branch’s clients were on the Russian government’s blacklist but did not close their accounts for two years. The bank is currently being probed by three countries over $150 billion money laundering allegations.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Danske ‘Ok’ With Blacklisted Clients

Denmark’s Largest Bank Took Two Years to Close Accounts of Blacklisted Russian ClientsDanske Bank is currently under investigation by authorities in three countries: the US, Denmark, and Estonia. Its officials reportedly “knew earlier than previously indicated about problems at its tiny Estonia branch, including that it held accounts for blacklisted Russian clients,” The Wall Street Journal reported Tuesday, citing correspondence it has seen. The publication elaborated:

Officials at Danske Bank were aware almost two years before it started shutting questionable accounts that the small but highly profitable branch was involved in potentially illicit money flows.

Denmark’s Largest Bank Took Two Years to Close Accounts of Blacklisted Russian ClientsThe Estonian branch was one of the bank’s profit drivers, generating a net profit of €63 million (~US$73.5 million) in 2012, the most lucrative year. The whole bank reported €636.6 million (~$742.6 million) in net profit that year, the publication noted.

The largest bank in Denmark has been at the center of one of Europe’s largest money laundering cases. Between 2007 and 2015, an estimated $150 billion was suspected to have flowed through the branch to accounts belonging to non-Estonian customers including Russian clients. However, the bank has not confirmed how much of that figure comes from suspicious transactions. It has launched an internal investigation and is expected to announce the results on Wednesday, Sept. 19.

Discriminating Email

Denmark’s Largest Bank Took Two Years to Close Accounts of Blacklisted Russian ClientsAccording to the Wall Street Journal, an April 2013 email reveals that the bank’s anti-money laundering (AML) chief based in Denmark had asked colleagues in the Estonian branch “about client accounts whose owners appeared on a blacklist generated by Russia’s central bank.” The Bank of Russia keeps a database of individuals and companies suspected of financial wrongdoing which it shares across borders. The list currently has about 500,000 names.

The Estonian Financial Supervision Authority (FSA) said on Tuesday that “it repeatedly complained to Danish counterparts about the branch’s blacklisted customers,” the news outlet conveyed, adding that in a 2013 email, Niels Thos Mikkelsen, the bank’s then-compliance executive, wrote:

They have the impression that we do not take the issue seriously.

Denmark’s Largest Bank Took Two Years to Close Accounts of Blacklisted Russian Clients
Thomas Borgen.

Furthermore, the news outlet added that a spokesman for the Danish FSA pointed out that a reprimand ruling against Danske Bank in May states that the authority received “misleading” information from the bank between 2012 and 2014. Danske claims the information came from the branch.

While the Financial Times recently reported that Thomas Borgen, the bank’s CEO, was notified in October 2013 about suspicious transactions at the Estonian branch, Borgen insists that “he was not informed in detail at the time about the problems,” Reuters described on Tuesday, elaborating:

The Danske Bank case has led to speculation in Denmark that its chief executive Thomas Borgen, who was in charge of its international operations, including Estonia, between 2009 and 2012, will step down.

Why do you think the regulators are after crypto when they let Danske Bank service blacklisted clients for two years? Let us know in the comments section below.


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Five Major Banks Penalized in State Funds Theft Case in Kenya

Five Major Banks Penalized in State Funds Theft Case in Kenya

Kenya’s central bank has penalized five major commercial banks for handling stolen state funds in the corruption scandal involving the country’s National Youth Service and Ministry of Devolution and Planning. In addition, the banks’ CEOs and employees could face arrest, fines, and jail time.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Handling Stolen State Funds

Five Major Banks Penalized in State Funds Theft Case in KenyaThe Central Bank of Kenya (CBK) on Wednesday, Sept. 12, fined five major commercial banks for handling stolen state money. The banks were “used by persons suspected of transacting illegally with the National Youth Service (NYS),” the CBK wrote.

The NYS is an organization under the government of Kenya, established in 1964 to train young people in important national matters. In 2015, it became the focus of a corruption scandal involving the country’s Ministry of Devolution and Planning. The scandal led to the resignations of the then-Cabinet Secretary of the Ministry of Devolution and Planning, Anne Waiguru, and the NYS director at the time, Nelson Githinji.

Originally, at least 791 million Kenyan shillings (~US$7.65 million) were said to have been stolen from the ministry. However, in May, the Daily Nation reported a new 10.5 billion Kenyan shillings (~$104 million) NYS scandal. “Dozens of senior government officials and business people were charged in May with various crimes related to the theft of nearly $100 million from the NYS marking a new effort to crack down on widespread corruption,” Reuters added.

Five Banks Are Just the Beginning

The five commercial banks fined last week were the ones that handled the largest flows of funds received from the NYS, the central bank described.

Five Major Banks Penalized in State Funds Theft Case in KenyaThey are Standard Chartered Bank Kenya, Equity Bank Kenya, KCB Bank Kenya, Co-operative Bank of Kenya, and Diamond Trust Bank Kenya. They handled a total of 3.58 billion Kenyan shillings (~$35 million) of funds received from the NYS, the CBK detailed, adding that they have been collectively fined 393 million Kenyan shillings (~$3.9 million).

Concerning NYS-related bank accounts and transactions, the banks were found to be in violation of some anti-money laundering and combating of terrorist financing (AML/CFT) regulations, the CBK elaborated.

Five Major Banks Penalized in State Funds Theft Case in KenyaThey failed to report large cash transactions and undertake adequate customer due diligence. In addition to a lack of supporting documentation for large transactions, there were also lapses in the reporting of suspicious transaction reports to the Financial Reporting Centre (FRC).

Kenya’s central bank governor, Patrick Njoroge, was quoted by Citizen TV in May saying, “The issue is not regulations or lack thereof, the guidelines are there; the issue is not enforcement or lack of understanding of the regulations either. It is deliberately not following guidelines.”

CEOs and Employees Face Arrest, Fines, Jail Time

A day after the central bank fined the five banks, the Director of Public Prosecutions (DPP), Noordin Haji, told the Daily Nation in an interview:

Chief executives and employees of banks who helped ship out billions of shillings from the National Youth Service (NYS) will be arrested and prosecuted.

The publication explained that “Bank executives and persons who are convicted of handling illicit cash face a Sh1 million [~$10,000] fine and a three-year jail term, while institutions including banks, credit unions facilitating such deals could be fined up to Sh20 million [~$198,294] upon conviction.” Moreover, banks could also lose their licenses.

Penalizing five banks is the result of the first phase of the NYS-related investigation. In May, the authorities started investigating ten commercial banks for processing clients’ transactions from the NYS. For the next phase of the investigation, an additional set of banks will be identified and investigated, the central bank revealed.

Why are regulators going after crypto with so many problems in the banking system? Let us know your thoughts in the comments section below.


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Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto Traders

Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto Traders

Two major South Korean cryptocurrency exchanges have announced that they will no longer allow unverified users to make withdrawals in Korean won. Starting next month, users of Bithumb and Coinone must have verified real-name accounts in order to deposit and withdraw the fiat currency.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Bithumb Goes All Real-Name

Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto TradersBithumb, the largest crypto exchange by trading volume in South Korea, announced on Friday, Sept. 14, that it will terminate fiat withdrawal service for all users without verified real-name accounts.

The service will end on Oct. 1 for corporate members and on Oct. 15 for individual members. Bithumb says the move is to comply with the government’s anti-money laundering policy.

However, the exchange clarified that this announcement only affects fiat withdrawals, emphasizing:

Cryptocurrency transactions and withdrawals can be used normally.

Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto TradersThe South Korean government introduced the real-name system for crypto exchanges at the end of January. Members of an exchange using this system can convert their accounts to real-name ones at the bank that provides the conversion service to the exchange.

So far, banks have only been offering this service to the country’s top four exchanges – Bithumb, Upbit, Coinone, and Korbit. Nonghyup Bank provides this service to Bithumb and Coinone.

Despite efforts by the government, banks, and exchanges, local media recently reported that only about 40-50 percent of accounts at the four exchanges have been converted to date. News.Bitcoin.com reported last week that banks have been pressuring crypto exchanges to take measures to ensure conversion in order to reduce the risk of money laundering.

Coinone Makes Similar Move

Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto TradersSouth Korea’s third-largest crypto exchange, Coinone, also made a similar announcement on Friday.

The exchange explained that “Nonghyup Bank requested Coinone to limit the withdrawal of Korean currency” for members who have not verified their accounts by a certain date “pursuant to the Act on Reporting and Utilization of Specific Financial Transaction Information.” Coinone elaborated that effective Oct. 15:

In order to comply with the government policy related to virtual currency transactions, we will limit the withdrawal of persons who have not completed the real name verification.

Bithumb and Coinone Terminating Fiat Withdrawals for Unverified Crypto TradersAfter Oct. 15, users who do not have real-name accounts will be “unable to deposit and withdraw in Korean currency,” Coinone wrote. The exchange is asking users to make withdrawals before that date if they do not plan to convert to real-name accounts by then.

“When you authenticate real-name verified accounts, you can deposit and withdraw in Korean currency,” Coinone described. Like Bithumb, the exchange reiterated that the notice does not affect crypto trading, deposits, or withdrawals. Both exchanges have also confirmed that corporations, minors, and foreigners are not eligible for real-name conversion.

At the time of this writing, Upbit and Korbit, which do not use Nonghyup Bank, have not announced that they will stop providing Korean won withdrawal service to unverified users.

What do you think of Bithumb and Coinone disallowing fiat withdrawals for users without real-name accounts? Let us know in the comments section below.


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Japanese Regulator Unveils Crypto Regulation Updates

Japanese Regulator Unveils Crypto Regulation Updates

Japan’s financial regulator has recently unveiled the current state of the crypto regulations in the country. Three crypto operators are currently being reviewed. With 160 companies wanting to enter the space, the regulator plans to add more personnel to help review new applicants. In addition, a self-regulatory plan for crypto exchanges has also been submitted to the regulator.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Current State of Crypto Regulations

Japan’s top financial regulator, the Financial Services Agency (FSA), published several documents from its fifth crypto study group meeting on Wednesday, September 12. The current state of crypto regulations and exchange registrations were discussed.

Japanese Regulator Unveils Crypto Regulation UpdatesThe agency confirmed that out of the 16 companies that have been allowed to operate crypto exchanges while their applications are being reviewed, only three have survived the agency’s recent inspections. Coincheck, Lastroots, and Everybody’s Bitcoin are currently being reviewed. The FSA reiterated that it is “currently reviewing the work improvement report” of Coincheck and, going forward, it will periodically conduct on-site inspections of registered exchanges.

Out of the 16 companies, one was rejected by the agency and 12 others have withdrawn their applications. In addition, approximately 160 companies have expressed their intention to register crypto exchanges, as previously reported by news.Bitcoin.com.

FSA Expanding Crypto Team

The FSA’s vice commissioner for policy coordination, Kiyotaka Sasaki, said at the meeting that “The biggest problem is how to deal with new operators,” Reuters reported on Wednesday.

Japanese Regulator Unveils Current State of Crypto RegulationsHe noted that the agency currently has 30 personnel whose jobs include monitoring crypto exchanges and traders, supervising unregistered operators, and reviewing registration applications.

However, with over 160 companies wanting to enter the market, the FSA is seeking additional workforce to help with reviewing applicants. The agency is requesting 12 more personnel in the financial year 2019 to swiftly respond to crypto exchange operators, the publication conveyed.

Plan for Self-Regulation

Also discussed at the meeting are self-regulatory rules established by the Japan Virtual Currency Exchange Association (Jvcea).

Japanese Regulator Unveils Current State of Crypto Regulations
Yasunori Okuyama.

Currently, the members of the association are the 16 government-approved crypto exchanges: Money Partners, Quoine, Bitflyer, Bitbank, SBI Virtual Currency, GMO Coin, Bittrade, Btcbox, Bitpoint Japan, DMM Bitcoin, Bitarg Exchange Tokyo, Bitgate, Bitocean, Fisco Virtual Currency, Tech Bureau, and Xtheta.

The president of both the association and Money Partners, Yasunori Okuyama, explained to the meeting attendees the long list of self-regulatory rules, Impress Corporation reported. One of the rules relates to the handling of cryptocurrencies at exchanges, which states:

When handling a new virtual currency, after conducting an internal review by the member, it is necessary to notify the association beforehand, and if the association gives an objection, it will not be handled.

Another rule concerns the management of customer assets. The association explained that extra restrictions have been added such as “measures concerning margin trading using virtual currency” in compliance with the fund settlement law and the administrative guidelines.

Japanese Regulator Unveils Current State of Crypto RegulationsThe leverage limit designated by the association is four times but members can choose their own limit under certain circumstances. The margin trading rule aims to “suppress the risk of loss of users and excessive speculative transactions in leverage transactions using virtual currency,” the association explained.

Furthermore, exchanges must have anti-money laundering (AML) and combating the financing of terrorism (CFT) measures as well as rules regarding anti-social forces. Among other rules are ones covering basic transactions, dispute resolution, solicitation and advertising, trading guidelines, ethics and how to handle initial coin offerings (ICOs).

While the association says that “the self-regulatory rules will generally be enforced “at an early stage in order to acquire the accreditation of our association,” it acknowledges that some rules may take longer to comply.

What do you think of the Japanese crypto regulation and self-regulation? Let us know in the comments section below.


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Growing Number of Indian Crypto Exchanges Say Fiat Support Is Back Despite RBI Ban

Growing Number of Indian Crypto Exchanges Say Fiat Support Is Back Despite RBI Ban

A growing number of crypto exchanges in India have announced the return of fiat deposit and withdrawal support despite the crypto banking ban imposed by the country’s central bank. Several other exchanges in the country also allow their users to use Indian rupees to buy and cash out cryptocurrencies through their exchange-escrow peer-to-peer (P2P) services.

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

Exchanges Say INR Support Is Back

Growing Number of Indian Crypto Exchanges Say Fiat Support Is Back Despite RBI BanSince the crypto banking ban by the Reserve Bank of India (RBI) went into effect in July, crypto exchanges in the country have been deprived of banking services. Many of them subsequently shut down their INR support, disallowing users to make deposits and withdrawals in Indian rupees. The Supreme Court of India is scheduled to hear petitions against the ban next week.

However, recently at least three crypto exchanges in the country have announced the return of INR deposit and withdrawal support despite the RBI ban.

On Wednesday, September 12, crypto exchange Koinex announced that it has brought back INR deposits and withdrawals through its P2P system, stating:

We are happy to announce the revival of INR in the crypto universe through a new peer-to-peer deposit and withdrawal mechanism for INR transactions…Just like the old times, users will be able to deposit and withdraw funds directly from their INR wallets.

Growing Number of Indian Crypto Exchanges Say Fiat Support Is Back Despite RBI BanAnother crypto exchange, Coindelta, announced on August 31 that it had resumed INR support. “We have resumed back the INR deposits and withdrawals on Coindelta. Not only this, your old favourite INR markets are back where you can trade with your INR,” the exchange wrote.

In addition, news.Bitcoin.com recently reported on another exchange, Giottus, offering a creative way of allowing users to deposit and withdraw Indian rupees using its P2P platform.

Other Exchanges With Similar Services

The three aforementioned exchanges are utilizing their exchange-escrowed P2P services to facilitate deposits and withdrawals in Indian rupees. Each has its own set of rules including the number of coins supported, the deposit and withdrawal process, and the time it takes to withdraw INR using their systems.

Growing Number of Indian Crypto Exchanges Say Fiat Support Is Back Despite RBI BanThere are several other exchanges with similar P2P services that allow users to both purchase cryptocurrencies and cash out in Indian rupees.

Crypto exchange Wazirx, for example, recently celebrated its six-month anniversary of launching its P2P service. The exchange claims “We’re seeing our trading volumes increasing every day.” Vouching for the popularity of P2P trading, CEO Nischal Shetty told news.Bitcoin.com “We see more than 1 match per minute on our P2P.”

Another exchange, Instashift, has been offering P2P trading of over 80 coins. “Since the last set of RBI related developments in the past couple of months, we have continued to see strong 20-25% growth in trading volumes month on month over the last 2 quarters of our operation,” CEO Rahul Chitale shared with news.Bitcoin.com.

Coindcx also offers P2P trading on its Dcxinsta platform. “We guarantee any 50+ cryptocurrencies purchase directly with INR in less than 60 seconds,” CEO Sumit Gupta claims.

Other fiat-enabling systems outside of the P2P services are also being used in India such as the Dabba trading system which uses the Telegram messaging app to facilitate the trades.

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 or companies. Bitcoin.com is not 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.

What do you think of the way Indian crypto exchanges offer fiat support despite the RBI ban? Let us know in the comments section below.


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$150B Money Laundering Probe of Danske Bank Implicates Citigroup and Deutsche Bank

$150B Money Laundering Probe of Danske Bank Implicates Citigroup and Deutsche Bank

U.S. law enforcement agencies have started their money laundering investigations of Danske Bank, Denmark’s largest bank, according to the Wall Street Journal. Citigroup and Deutsche Bank have been implicated. Danske Bank is also currently under investigation by Denmark and Estonia and its CEO reportedly ignored warnings of suspicious transactions.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

$150 Billion Money Laundering Case

$150B Money Laundering Probe of Danske Bank Implicates Citigroup and Deutsche BankThe Wall Street Journal reported on Friday, September 14, that “The [U.S.] Justice Department, Treasury Department, and Securities and Exchange Commission [SEC] are each examining Danske Bank after a confidential whistleblower complaint was filed to the SEC more than two years ago,” citing a person familiar with the matter. According to the person and the documents the news outlet has reviewed:

U.S. law enforcement agencies are probing Denmark’s largest bank over allegations of massive money laundering flows from Russia and former Soviet states…U.S. involvement in the case greatly raises the stakes for Danske Bank.

$150B Money Laundering Probe of Danske Bank Implicates Citigroup and Deutsche BankAn estimated $150 billion are suspected to have flowed through non-Estonian customer accounts held at Danske Bank’s Estonian branch from 2007 to 2015 – from countries such as Russia, Azerbaijan, and Moldova. The publication added that the bank’s investigators have not revealed if the entire amount should be viewed as suspicious. The bank has been conducting an internal investigation and will release the results on September 19, a notice on its website states.

Danish and Estonian authorities have been investigating the bank and have shared information with their U.S. counterparts, several European officials familiar with the matter told the news outlet.

Why Is the US Interested?

The U.S. has yet to officially confirmed that it is investigating Danske Bank. Two weeks ago, Marshall Billingslea, U.S. Department of the Treasury’s Assistant Secretary for Terrorist Financing, told Danish daily Berlingske “We are following this case very closely.” Reuters elaborated:

While the bank does not have a banking license in the United States, it has a bond program in dollars and its Estonian branch saw U.S. dollar customer flows, which could heighten interest among U.S. regulators.

The Wall Street Journal explained that the U.S. Treasury can restrict the supply of U.S. dollars to foreign banks and the Treasury and Justice Department can fine banks.

Adam Barrass, an analyst at Berenberg, noted back in July that the key risk to Danske Bank was “the potential U.S. fine because [of] Danske’s use of dollar funding and transactions,” the Financial Times reported.

CEO Ignores Money Laundering Signs

According to the Financial Times, Danske Bank’s CEO, Thomas Borgen, ignored calls to scale back business at the Estonian branch when warned of money laundering activities. The minutes seen by the news outlet reveals that the CEO was informed at a meeting in October 2013 that:

The level of activity in its [Danske Bank’s] Estonian branch from outside the country — mostly from ex-Soviet states and Russia — was higher than that of rivals and ‘needed to be reviewed and potentially reduced’.

$150B Money Laundering Probe of Danske Bank Implicates Citigroup and Deutsche Bank
Danske Bank’s CEO, Thomas Borgen.

Instead, Borgen responded by emphasizing “the need for a middle ground, and wanted to discuss this further outside of this forum,” the publication noted.

The Wall Street Journal additionally detailed, “Estonian officials are investigating 26 former Danske employees, from low-level staff to the former branch CEO. They are accused of helping to launder $230 million in money from an alleged fraud committed in Russia.”

Deutsche Bank and Citigroup Implicated

Citing the person familiar with the probes, the Wall Street Journal also reported:

The whistleblower complaint identified Deutsche Bank AG and Citigroup Inc., both overseen by U.S. regulators, as involved with transactions into and out of Danske Bank’s Estonian branch.

Deutsche Bank acted as a correspondent bank for Danske, handling dollar wire transfers while Citigroup’s Moscow office was involved in some of the transfers through Danske Bank’s Estonian branch, the person told the publication.

With the ongoing probes, the bank’s share price has been on a sharp decline this year.

$150B Money Laundering Probe of Danske Bank Implicates Citigroup and Deutsche Bank

Why are regulators going after crypto with so much money laundering going on in the banking system? Tell us what you think in the comments section below.


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RBI Ban Hearing Delayed – Indian Supreme Court Too Busy for Crypto This Week

RBI Ban Hearing Delayed - Indian Supreme Court Too Busy for Crypto This Week

All petitions against the crypto banking ban by the Reserve Bank of India (RBI) are supposed to have been heard by the country’s supreme court on September 11. However, the court has been busy every day this week and has postponed the RBI ban hearing.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

RBI Ban Hearing Postponed

RBI Ban Hearing Delayed - Indian Supreme Court Too Busy for Crypto This WeekThe Supreme Court of India was supposed to hear all petitions regarding the crypto banking ban by the country’s central bank on Tuesday, September 11. The RBI issued a circular banning all regulated financial institutions from providing services to crypto businesses on April 6.

As all eyes in the Indian crypto community were on the court to see if the RBI ban will be stayed, the supreme court adjourned on Tuesday without hearing the crypto case due to other cases running over time. The case was again postponed for the same reason on Wednesday and Thursday.

Furthermore, Nischal Shetty, the CEO of crypto exchange Wazirx, told news.Bitcoin.com that “It wasn’t scheduled for today [Friday] after yesterday’s delay.” Crypto Kanoon, a news and analysis platform, tweeted on Thursday:

As the arguments will continue for long in another matter, the court has adjourned all other matters including crypto matter. Matter is now likely to be listed on Tuesday [September 18].

Indian Association Tries to Get Attention of the Court

RBI Ban Hearing Delayed - Indian Supreme Court Too Busy for Crypto This WeekAmong the petitions against the RBI ban was one submitted by the Internet and Mobile Association of India (IAMAI). The non-profit organization filed its petition in May, which was heard on July 3 and July 20, before it was postponed to September 11.

At both hearings, the court did not grant a stay on the central bank’s ban. The association also tried to educate the RBI by filing a representation explaining how blockchain and cryptocurrency work. However, their effort did not sway the central bank.

RBI Ban Hearing Delayed - Indian Supreme Court Too Busy for Crypto This WeekOn September 12, Crypto Kanoon tweeted, “As per our internal sources, IAMAI is going to mention the crypto matter at 10:30 before Court No. 9 for seeking adjournment for the purpose of filing rejoinder to the counter affidavit recently filed by one of the respondents.” The platform soon tweeted further, “The court has declined to entertain the mentioning done by IAMAI for adjournment.”

Confusion Over the RBI Affidavit

On Tuesday, September 11, CNN News18 reported that the central bank had filed an affidavit with the supreme court. The news outlet wrote:

RBI files affidavit in top court against cryptocurrency and says that it can’t recognize bitcoins under the current legal regime as virtual currencies are neither money nor currency, can’t even be considered as a valid payment system.

RBI Ban Hearing Delayed - Indian Supreme Court Too Busy for Crypto This WeekCiting this report, Indiabits, which represents a community of blockchain enthusiasts, tweeted, “supreme court to hear affidavit filed by RBI on the matter on September 17th.” It also pointed out that, based on publicly available information on the supreme court website, RBI filed a counter affidavit on September 8, with a “computer generated date” for the hearing listed as September 17.

However, disputing the above information, Crypto Kanoon claims that this RBI affidavit was the same one filed in May, which they reported on at the time, adding that the “supreme court nvr [never] posted crypto matter on 17th Sep.”

Nonetheless, the crypto community will be watching the supreme court next week to see if the crypto case will eventually be heard. Shetty shared with news.Bitcoin.com:

The case has been postponed to monday…So let’s see what happens Monday.

What do you think of the supreme court repeatedly delaying the crypto case hearing? Let us know in the comments section below.


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Ethereum (ETH) Dead? ETH Record Broken Following Sharp Rise this Week

Ethereum (ETH) Dead

Mainstream media has recently been sparking the question, “is Ethereum (ETH) dead?” Most journalists running these stories were referring to Ether or ETH, the digital token that runs on the Ethereum network.

Ethereum (ETH) Dead?

The reason the questions were prompted most likely had to do with ETH hitting 2018 lows recently. Most of the market, however, was also dropping at the time.

Despite its downturn, Ethereum has held strong as the second-largest cryptocurrency by its total market cap. Ripple (XRP), the third-largest cryptocurrency, is around $10 billion behind ETH.

Ethereum has ...

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Bittrex to Launch Crypto Exchange in Malta Next Month

Bittrex to Launch Crypto Exchange in Malta Next Month

US-based cryptocurrency exchange Bittrex is reportedly launching a crypto exchange in Malta at the beginning of next month. Bittrex says the new platform will allow them to list coins “a lot faster.” It will operate within the regulatory framework established by the European Union and the Maltese government.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Bittrex Eyes Malta Launch in October

Bittrex to Launch Crypto Exchange in Malta Next MonthBittrex has confirmed that “it will open a branch in Malta on Oct. 1, as part of its global expansion plans,” the Investor reported on Friday, September 14. Bittrex’s co-founder and CEO, Bill Shihara, said at the Upbit Developer Conference on the South Korean Jeju Island:

We are now planning to launch Bittrex Malta…This will allow us to list tokens a lot faster.

Bittrex to Launch Crypto Exchange in Malta Next Month
Bill Shihara at the Upbit Developer Conference 2018.

The conference is organized by Dunamu Inc., the operator of one of South Korea’s largest crypto exchanges, the Kakao-backed Upbit. Bittrex has a partnership agreement with Upbit that “allows the two exchanges to share the same order book and coin listings, among others,” the news outlet conveyed.

Shihara explained that “the coin listing process will be much easier and faster in Malta,” the publication noted, adding that the exchange “will also not charge fees for listing.”

Bittrex to Launch Crypto Exchange in Malta Next MonthBittrex has already established a subsidiary in Malta as well as an affiliated company, Bittrex International, to manage all of its overseas operations.

Citing that “Bittrex Malta is designed to operate within the regulatory framework established by the European Union and Maltese government,” the exchange wrote:

Every digital asset listed on Bittrex Malta will be available for our international network of partner exchanges to launch (consistent with their local laws).

Bittrex’s Overseas Expansion

The CEO explained that “Working with the government in the US to stay compliant is hard. So it would be very difficult for us to open offices around the world in different countries,” elaborating:

We actually like this partnership model… If we can find great partners like Dunamu, then they can handle a lot of work with local regulations and banks. All we need to do is just help them make their exchanges better.

Bittrex to Launch Crypto Exchange in Malta Next MonthThe news outlet noted that Shihara expressed “great satisfaction with the tie-up,” adding that “he seeks to renew the partnership every year, without plans to open a separate Bittrex branch in Korea.”

Bittrex started offering US dollar trading in May but currently has no plans to add other fiat currencies, the publication described. “But we do plan to continue listing more digital currencies that trade against the US dollar.” According to Coinmarketcap, Bittrex now lists 287 coins while Upbit has 273 coins listed.

What do you think of Bittrex opening an exchange in Malta? Let us know in the comments section below.


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Ethereum (ETH), Litecoin (LTC), and Monero (XMR) Rise from the Ashes

Ethereum (ETH)

The cryptocurrency market is rebounding today, after a brutal couple of weeks on the market. Ethereum (ETH), Litecoin (LTC), and Monero (XMR) are among the coins making the biggest surge this morning.

Recently, the market hit its year-low, and many of the coins reached their yearly lows as well.

Let’s take a closer look at these three coins and their latest developments.

Ethereum (ETH)

Ethereum, the second-largest cryptocurrency by its total market cap, hit its year-low this week, sinking below $180. ETH hadn’t been under the $180 price point since late June ...

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Crypto Featured in British Soap Coronation Street With 8 Million Viewers

Crypto Featured in British Soap Coronation Street With 8 Million Viewers

Cryptocurrency is a major plot of the longest-running British soap opera Coronation Street this week. Each of the show’s episodes currently has about 8 million viewers. A character in the show invested in a cryptocurrency back in 2011. After some research, he thinks he is sitting on a fortune.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Crypto in Coronation Street

Crypto Featured in British Soap Coronation Street With 8 Million ViewersCryptocurrency is one of the main plots of this week’s Coronation Street episodes, aired on Monday, Wednesday, and Friday.

The popular show has been on ITV since December 1960, making it Britain’s longest-running soap opera. In June, the show won the Best Soap category of this year’s British Soap Awards. Overall, it has won six times since 1999 when the awards began.

Forbes described on Tuesday, September 11:

Bitcoin and cryptocurrency have found an unlikely home: on British soap opera Coronation Street, a TV programme watched by some eight million people per episode.

In Monday’s episode, Ryan Conner, played by Ryan Prescott, revealed that he had some cryptocurrency. He told his friend, Ali Neeson, that he purchased a cryptocurrency called whipcoin many years ago to use on the dark web but never got around to spending it.

Crypto Featured in British Soap Coronation Street With 8 Million ViewersConner said he bought 5 whipcoins at about £10 (~US$13) each. “It was 2011, something like that,” he recalled. When Neeson questioned that he never thought to check how much the coins are now worth, Conner replied “Knowing my luck, 5 pence? Nothing?” He was, however, gobsmacked when Neeson told him that 5 whipcoins are probably worth about £250,000 (~$326,400) today.

In 2011, only BTC had a price that reached $13, rising from about $1 at the beginning of the year to about $31 in July before falling to less than $5 in December. There were periods when its price was roughly $13. That year, very few altcoins existed; those that did were not traded on an exchange. In April 2011, namecoin launched and became the first altcoin. By the year’s end, there were also ixcoin, swiftcoin, and litecoin. However, none of the altcoins had the profile described by Conner.

Crypto Featured in British Soap Coronation Street With 8 Million Viewers
BTC’s price chart on Mtgox for 2011.

Big Surprise

Crypto Featured in British Soap Coronation Street With 8 Million ViewersAccording to Hello Magazine, in Wednesday’s episode, “Ryan’s frustrated when he can’t remember his password to his whipcoin account so can’t access his new fortune. He [then] remembers that he wrote it down in a Gazza book, and the search commences.”

In Friday’s episode, the magazine described, “Ryan has a lightbulb moment and remembers his whipcoin password, he excitedly logs on only to discover his investment has decreased significantly.”

What do you think of Coronation Street featuring cryptocurrency this week? Let us know in the comments section below.


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Canadian Regulated Bitcoin Trust Achieves Mutual Fund Trust Status

Canadian Regulated Bitcoin Trust Achieves Mutual Fund Trust Status

A Canadian regulated bitcoin trust has achieved the mutual fund trust status, allowing eligible investors to invest in the trust through government-sponsored tax-efficient investment plans. The investment is approved by the Ontario Securities Commission and the British Columbia Securities Commission. 

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Mutual Fund Trust Status

Canadian Regulated Bitcoin Trust Achieves Mutual Fund Trust StatusFirst Block Capital Inc. announced on Monday, September 10, that its flagship product, the FBC Bitcoin Trust, “has now achieved mutual fund trust status.”

As such, the trust has become the “first and only” investment product approved by the Ontario Securities Commission (OSC) and the British Columbia Securities Commission (BCSC) to offer “unit holders the exclusive opportunity to hold units of a bitcoin investment in their Tax Free Savings Accounts (TFSA) and Registered Retirement Savings Plans (RRSP).”

Noting that the investment is available only to accredited investors, the firm explained:

The trust units are [now] considered a qualified investment for a mutual fund trust under the Tax Act, having exceeded 150 unit holders within one year of launching.

Canadian Regulated Bitcoin Trust Achieves Mutual Fund Trust StatusThe firm describes itself as “Canada’s first fully registered, dedicated cryptocurrency and blockchain investment company” that holds exempt market dealer (EMD), portfolio manager (PM) and investment fund manager (IFM) licenses. Its co-founder and chief investment officer, Marc van der Chijs, detailed:

Our goal is to make investments in the digital currency asset class more accessible and we are one step closer to achieving this goal by allowing unit holders to place units in government sponsored tax efficient vehicles, and by providing daily liquidity.

Two More Funds Coming Soon

In addition to the bitcoin trust, the firm plans to launch two investment products. The company’s funds are kept in Xapo’s cold-storage vault.

Canadian Regulated Bitcoin Trust Achieves Mutual Fund Trust StatusThe first of the two is the Active Blockchain Opportunities ETF which is “an actively managed ETF dedicated to uncovering the best companies exposed to this global secular theme,” the firm describes.

The other product is the Cryptocurrency Index Fund that tracks the performance of tokens selected by the firm’s management team. The company explains, “The evaluation of selecting a token into our index fund is mainly determined by the development of its technology, market capitalization, and market liquidity. The goal is to provide investors with a transparent benchmark in this new asset class.”

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


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US Financial Industry Regulatory Authority Issues Its First Crypto Disciplinary Action

US Financial Industry Regulatory Authority Issues First Crypto Disciplinary Action

The U.S. Financial Industry Regulatory Authority has taken its first disciplinary action involving cryptocurrencies. The authority charges a broker with fraudulent and unlawful distribution of unregistered crypto securities. The owner allegedly “attempted to lure public investment in his worthless public company” by issuing “the first minable coin backed by marketable securities.”

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

FINRA’s First Crypto Disciplinary Action

US Financial Industry Regulatory Authority Issues First Crypto Disciplinary ActionThe U.S. Financial Industry Regulatory Authority (FINRA) has issued its first crypto-related disciplinary action. The organization announced on Tuesday, September 11, “that it filed a complaint against Timothy Tilton Ayre of Agawam, Massachusetts, charging him with securities fraud and the unlawful distribution of an unregistered cryptocurrency security called Hempcoin,” adding:

This case represents FINRA’s first disciplinary action involving cryptocurrencies.

FINRA is a not-for-profit organization authorized by Congress to protect investors in the US by ensuring that the broker-dealer industry operates fairly and honestly. Although the organization is not part of the government, it is overseen by the U.S. Securities and Exchange Commission (SEC). In addition, FINRA “has the authority to fine, suspend or bar brokers and firms from the industry,” its website describes.

US Financial Industry Regulatory Authority Issues First Crypto Disciplinary ActionAccording to Tuesday’s notice, “The issuance of a disciplinary complaint represents the initiation of a formal proceeding by FINRA in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint.” All parties named in the complaint can file a response and request a hearing before a FINRA disciplinary panel, the notice details, noting:

Possible remedies include a fine, censure, suspension or bar from the securities industry, disgorgement of gains associated with the violations and payment of restitution.

The Hempcoin Case

US Financial Industry Regulatory Authority Issues First Crypto Disciplinary ActionAyre is listed as the president of Rocky Mountain Ayre Inc., a publicly traded company listed on the OTC Grey market under the RMTN trading symbol.

In its complaint, FINRA alleges that, from January 2013 through October 2016, Ayre made “fraudulent, positive statements about RMTN’s business finances,” elaborating:

Ayre attempted to lure public investment in his worthless public company, Rocky Mountain Ayre Inc. (RMTN), by issuing and selling Hempcoin – which he publicized as ‘the first minable coin backed by marketable securities’.

US Financial Industry Regulatory Authority Issues First Crypto Disciplinary ActionAccording to FINRA, Ayre bought the rights to Hempcoin in June 2015. He then repackaged the token as a security backed by RMTN common stock and marketed it as “the world’s first currency to represent equity ownership” in a publicly traded company.

Investors, promised that “each coin was equivalent to 0.10 shares of RMTN common stock,” proceeded to mine more than 81 million Hempcoin securities through late 2017, FINRA described, noting that the coins were traded on two crypto exchanges.

FINRA believes that “Ayre defrauded investors in RMTN by making materially false statements and omissions regarding the nature of RMTN’s business, failing to disclose his creation and unlawful distribution of Hempcoin, and making multiple false and misleading statements in RMTN’s financial statements,” adding:

FINRA charges Ayre with the unlawful distribution of an unregistered security because he never registered Hempcoin and no exemption to registration applied.

What do you think of FINRA’s first crypto disciplinary action? Let us know in the comments section below.


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Huobi ‘Aggressively’ Enters Japanese Market With Plans to Become the Largest Exchange

Huobi 'Aggressively' Enters Japanese Market With Plans to Become the Largest Exchange

Crypto exchange Huobi is entering the Japanese market by acquiring a majority stake in one of the 16 government-approved crypto exchanges in the country. The company says it plans to “aggressively scale this trading platform into the largest in Japan,” with an eye on global expansion in the future.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Huobi Entering Japanese Market

Huobi 'Aggressively' Enters Japanese Market With Plans to Become the Largest ExchangeHuobi is expanding into the Japanese market by acquiring a majority stake in Bittrade, a Japanese government-approved crypto exchange.

Huobi 'Aggressively' Enters Japanese Market With Plans to Become the Largest ExchangeBittrade’s owner announced on Wednesday, September 12, that Huobi Global’s wholly-owned subsidiary, Huobi Japan Holding Ltd., “will take a majority stake” in the exchange. Speaking of his strategic partnership with Huobi, Singaporean entrepreneur Eric Cheng, who owns 100% of Bittrade, said:

The parties intend to aggressively scale this trading platform into the largest in Japan with the potential to extend its services globally.

Huobi 'Aggressively' Enters Japanese Market With Plans to Become the Largest ExchangeEstablished in China in 2013, Huobi has since moved its headquarters to Singapore. The company now claims to have an accumulated trading volume of over US$1 trillion, with “millions of users” worldwide. “Geographically, Huobi has compliance teams in Singapore, Korea, Hong Kong, Australia, the UAE, Luxembourg, and other countries around the world,” the company wrote.

In addition, Huobi has been expanding to other regions through partnerships with local companies. Last month, Huobi announced that it is launching crypto exchanges in the Philippines, Russia, Taiwan, Indonesia, and Canada.

Bittrade Already an Approved Exchange in Japan

Huobi 'Aggressively' Enters Japanese Market With Plans to Become the Largest ExchangeOne of the biggest hurdles in entering the Japanese market right now is getting approval from the Financial Services Agency (FSA). Since Japan legalized cryptocurrency as a means of payment in April last year, all exchanges in the country are required to register with the FSA.

Last year, the agency approved 16 crypto exchanges. However, the approval rate has plummeted since the hack of Coincheck in January. The agency has since tightened its evaluation process of new exchanges. This has led to 13 of 16 quasi-exchanges to withdraw their applications. Bittrade is one of the 16 FSA-approved crypto exchanges.

Last week, Japan’s e-commerce giant Rakuten acquired Everybody’s Bitcoin, one of the three remaining quasi-exchanges, to fast-track into the Japanese crypto market.

Bittrade Previously Acquired by Singaporean Entrepreneur

Huobi 'Aggressively' Enters Japanese Market With Plans to Become the Largest ExchangeIn May, Cheng “acquired 100 percent stake in two Japanese licensed companies,” Singapore Business Review reported. “With the acquisition, Cheng, the CEO of Upper Joyful Ltd, will own [the] controlling stake in the two firms — FX Trade Financial Co Ltd (FX Trade) and its affiliate company, Bittrade Co Ltd.”

Cheng has been investing in high-growth opportunities and currently has investments in regions such as Australia, Mainland China, Cambodia, Japan, Malaysia, Singapore, Taiwan, Thailand, and Vietnam, according to Wednesday’s announcement.

What do you think of Huobi entering the Japanese market? Do you think Huobi will succeed in becoming the largest exchange in Japan? Let us know in the comments section below.


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SEC Takes Action Against ‘First US Regulated Crypto Asset Fund’

SEC Takes Action Against ‘First US Regulated Crypto Asset Fund’

The U.S. Securities and Exchange Commission (SEC) announced on Tuesday that it has taken action against two cryptocurrency firms. Both mark the “first-ever” action of their kind by the Commission. One is against Crypto Asset Management which claims to be “first regulated crypto asset fund in the United States” and the other is against an “ICO Superstore.”

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

SEC’s Action Against Crypto Asset Management

SEC Takes Action Against ‘First US Regulated Crypto Asset Fund’The SEC on Tuesday “announced its first-ever enforcement action finding an investment company registration violation by a hedge fund manager based on its investments in digital assets.” The firm, located in La Jolla, California, focuses primarily on managing investment portfolios of cryptocurrency and related assets. The Commission elaborated:

The SEC entered an order finding that Crypto Asset Management LP (CAM) offered a fund that operated as an unregistered investment company while falsely marketing it as the ‘first regulated crypto asset fund in the United States’.

SEC Takes Action Against ‘First US Regulated Crypto Asset Fund’

According to the order against CAM and its sole principal, Timothy Enneking, the firm raised more than $3.6 million over a four-month period in late 2017 “while falsely claiming that the fund was regulated by the SEC and had filed a registration statement with the agency.” The Commission clarified:

By engaging in an unregistered non-exempt public offering and investing more than 40 percent of the fund’s assets in digital asset securities, CAM caused the fund to operate as an unregistered investment company.

The firm “ceased its public offering and offered buy backs to affected investors” after being contacted by the Commission. “CAM and Enneking agreed to the SEC’s cease-and-desist order and censure without admitting or denying the findings against them, and agreed to pay a penalty of $200,000,” the agency concluded.

SEC’s Action Against ‘ICO Superstore’

SEC Takes Action Against ‘First US Regulated Crypto Asset Fund’Also on September 11, the SEC took action against another crypto firm and its two owners. The Michigan-based Tokenlot LLC is self-described as an “ICO Superstore,” the SEC detailed, adding that its owners are Lenny Kugel and Eli L. Lewitt. The agency asserted:

This is the SEC’s first case charging unregistered broker-dealers for selling digital tokens after the SEC issued The DAO Report in 2017 cautioning that those who offer and sell digital securities must comply with the federal securities laws.

Tokenlot operated from July last year to late February, “with most of its business occurring after The DAO Report on the applicability of securities laws to digital assets,” the SEC order explains. The firm advertises that investors of “all experience levels” could purchase tokens on its platform during and after an ICO, including in private sales and pre-sales.

SEC Takes Action Against ‘First US Regulated Crypto Asset Fund’The company and its founders “promoted Tokenlot’s website as a way to purchase digital tokens during initial coin offerings (ICOs) and also to engage in secondary trading.” They received “orders from more than 6,100 retail investors and handled more than 200 different digital tokens, which the SEC found included securities,” the Commission confirmed. “Their activities required Tokenlot, Kugel, and Lewitt to be registered with the SEC as broker-dealers, but they were not.”

Steven Peikin, co-director of the SEC’s Enforcement Division, said that the company and its founders promptly cooperated and “provided valuable information to Commission staff, stopped the conduct, and refunded money to investors.” The agency concluded:

Without admitting or denying the SEC’s findings, Tokenlot, Kugel, and Lewitt consented to the SEC’s order and agreed to pay $471,000 in disgorgement plus $7,929 in interest, and they will retain an independent third party to destroy Tokenlot’s remaining inventory of digital assets.

In addition, the Commission stated that “Kugel and Lewitt also agreed to pay penalties of $45,000 each and agreed to industry and penny stock bars and an investment company prohibition with the right to reapply after three years.”

What do you think of the SEC taking action against the two crypto firms? Let us know in the comments section below.


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US Authorities Ask India to Seize Property of Bitconnect Promoters

US Authorities Ask India to Seize Property of Bitconnect Promoters

The authorities of two U.S. states have reportedly asked Indian officials to seize the property of the promoters of Bitconnect since citizens of their states have invested in the company and lost money. One promoter has already been arrested and the investigators are tracking down another promoter.

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

US States Want Bitconnect Promoters’ Property Seized

US Authorities Ask India to Seize Property of Bitconnect PromotersThe authorities of the U.S. states of Illinois and Arizona wrote to India’s Criminal Investigation Department (CID) officials in the state of Gujarat, “asking them to seize the property of the promoters of a cryptocurrency investment firm, Bitconnect,” the Times of India reported on Tuesday, September 11.

The promoters are “suspected to have made off with Rs 41,000 crore [~US$5.66 billion] of investors’ money,” the publication noted and quoted a CID official saying:

Authorities of the US states of Illinois and Arizona wrote to us asking us to seize the property of the promoters of Bitconnect, as citizens of these states have invested in the company and lost money.

800% Annual Return Promised

US Authorities Ask India to Seize Property of Bitconnect Promoters
Satish Kumbhani.

The CID investigators say two Bitconnect promoters, Satish Kumbhani and Divyesh Darji, began their crypto operations in December 2016, after the country’s demonetization.

Investors transferred their BTC to the firm and “were issued bitconnect coins in return, which they could trade and on which they received interest,” the publication described, elaborating:

[The promoters] lured in thousands of investors by promising 800% returns per annum on investments.

US Authorities Ask India to Seize Property of Bitconnect Promoters
Divyesh Darji.

Darji made a commission of 10% on investments he brought in, the CID official detailed. “He was fluent in English and ran several social welfare programmes. He had a big following and Kumbhani hence roped him in,” the news outlet conveyed. “Darji had brought in investments of Rs 4,100 crore [~$566 million] while the total amount invested in Bitconnect could be around Rs 41,000 crore.”

“At the time, one bitconnect coin was worth about $360 and people invested their bitcoins due to the attractive returns promised,” the CID official said. On September 10, bitcoinnect was delisted from crypto-to-crypto exchange Tradesatoshi, the last exchange that the coin was trading on, TNW reported. According to Coinmarketcap, the last recorded price for the bitconnect coin was approximately $0.68.

One Promoter Arrested, One Being Tracked Down

Darji was arrested at the Delhi airport on his way back from Dubai, as news.Bitcoin.com previously reported. As for Kumbhani, a senior CID official explained, “We have begun the process of getting a warrant issued against Kumbhani and will then press for a red-corner notice (RCN) to track him down.” An RCN is issued by Interpol at the request of a member state to urge other member countries to detain or arrest an accused. The official added:

Kumbhani was tracked down to South Korea some time ago, but by the time we could react, he had flown back to Dubai. He supposedly handled the worldwide operations of the company and may have possession of a large amount of money in bitcoins, which belongs to investors.

What do you think of the two U.S. states asking Indian officials to seize the property of Bitconnect promoters? Let us know in the comments section below.


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The post US Authorities Ask India to Seize Property of Bitconnect Promoters appeared first on Bitcoin News.