This Week in Bitcoin: Smooth Bitcoin Cash Upgrade, BCH and BTC Tax Payments in Florida

This Week in Bitcoin: Smooth Bitcoin Cash Upgrade, BCH and BTC Tax Payments in Florida

A notable week for Bitcoin Cash (BCH) – the network successfully upgraded the blockchain protocol by extending the block size to 32MB. The change will allow a greater number of transactions to be processed with inexpensive and consistent transaction fees. Also, Seminole County in Florida will accept tax payments in both Bitcoin Cash (BCH) and Bitcoin Core (BTC) thanks to a partnership with Bitpay.

Also read: Bitcoin in Brief Saturday: Warren Warned by Billboards, Coinbase Tempted by Banking

Bitcoin Cash Upgrades Blockchain Protocol

The Bitcoin Cash network has smoothly and successfully upgraded the blockchain protocol this Tuesday by extending the block size from 8MB to 32MB. The implementation of the new consensus rules went into effect at block height 530356.

This Week in Bitcoin: Smooth Bitcoin Cash Upgrade, BCH and BTC Tax Payments in FloridaThe change represents one of the largest block size increases in blockchain history. The upgrade also includes an increased default data-carrier-size, from 80-bytes to 220-bytes, and re-enabling previously disabled Satoshi OP_Codes, which could add the ability to code colored coins and binary contracts.

The fourfold block size increase will allow vast amounts of transactions to pass through the network with consistent and inexpensive transaction fees. It also gives developers plenty of breathing room to adjust the size if it starts getting closer to its limit and paves a path for mass adoption. The block size limits are currently set by the miner, and developers are able to set the capacity so that blocks cannot get full in the immediate future. This means that the fees will remain low for quite some time and also reliable, even when transaction usage becomes as extreme as in the last quarter of 2017.

Bitpay Enables BCH and BTC for Tax Payments in Florida County

US-based crypto payment processor Bitpay has announced a formal agreement with Florida’s Seminole County Tax Collector, Joel M. Greenberg. Both Bitcoin Cash (BCH) and Bitcoin Core (BTC) can be used for tax payments starting this summer. County residents will be able to pay in crypto for driver licenses, ID cards, and even property taxes.

“We live in a world where technology has made access to services on demand, with same-day delivery and the expectation of highly efficient customer service, and we should expect the same from our government,” Greenberg said. He added that the aim of his tenure in office is to make customer experience faster, smarter, and more efficient, and to bring government services from the 18th century into the 21st. One way to achieve that, the official says, is to add cryptocurrency to the available payment options.

China Ranks Almost 30 Cryptos, Finds Over 400 Fake Coins

The government of China, one of the first to ban cryptocurrencies like bitcoin, has come out with official crypto rankings. The Chinese Center for Information Industry Development (CCID) will be judging leading digital coins according to three major criteria – innovation, technology, and application – although details about the applied methodology are yet to be shared. A total of 28 cryptocurrencies and their respective blockchains have been ranked. Of the top four coins by market capitalization, Ethereum was ranked first, followed by Bitcoin Core (BTC) at number 13, Ripple is 17th, and Bitcoin Cash (BCH) – 25th. The Chinese top five include Ether, Steem, Lisk, NEO, and Komodo.

This Week in Bitcoin: Smooth Bitcoin Cash Upgrade, BCH and BTC Tax Payments in FloridaAnother sign of growing attention to cryptocurrencies in China is the publication of a report on fake coins by a government-backed industry organization. The National Committee of Experts on the Internet Financial Security Technology (IFCERT) has identified 421 fake cryptocurrencies. The organization pointed out that 60% of these cryptos are deployed overseas. IFCERT also outlined some major red flags of the fake coins. According to the Committee, they often adopt “pyramid-based” business models and claim high returns. The cryptos have no real code – they either do not have a blockchain or cannot generate blocks for one. These coins are not traded on legitimate exchanges, the report also notes.

US Government Launches Scam Crypto Site

The US Securities and Exchange Commission (SEC) has created and published its own version of an initial coin offering (ICO) scam website. “Combining the two most growth-oriented segments of the digital economy, blockchain technology and travel, Howeycoin is the newest and only coin offering that captures the magic of coin trading profits and the excitement and guaranteed returns of the travel industry,” the mock SEC website claims. It promises partnerships in all segments of the travel industry and “earning coins you can trade for profit.”

This Week in Bitcoin: Smooth Bitcoin Cash Upgrade, BCH and BTC Tax Payments in Florida

“The rapid growth of the ‘ICO’ market, and its widespread promotion as a new investment opportunity, has provided fertile ground for bad actors to take advantage of our Main Street investors. We embrace new technologies, but we also want investors to see what fraud looks like, so we built this educational site with many of the classic warning signs of fraud,” SEC Chairman Jay Clayton explained. He also noted that distributed ledger technology can add efficiency to the capital raising process, but promoters and issuers need to make sure they follow the securities laws. “I encourage investors to do their diligence and ask questions,” Clayton said.

EU Adopts Rules to Reduce Anonymity for Crypto Users

EU Adopts Rules to Reduce Anonymity for Crypto UsersThis week, the European Union moved closer to its goal to minimize anonymous crypto transactions. The EU Council adopted a directive, which updates the European anti-money laundering legislation. The new rules come with requirements for crypto platforms to introduce know-your-customer procedures. The amendments were adopted at a meeting of the General Affairs Council on Monday, following an agreement with the European Parliament form December. In April this year, MEPs voted to support the deal to “bring cryptocurrencies under closer regulation.”

The main changes involve addressing the “risks linked to virtual currencies” by taking steps to reduce anonymity for both crypto traders and crypto-related transactions. Providers of exchange services between virtual and fiat currencies, as well as custodian wallet providers, will be obliged to identify suspicious activities. The directive states that authorities should be able to monitor the use of cryptocurrencies through these platforms, and the national financial intelligence units should have access to information allowing them to associate crypto addresses with the their owners.

South Korean Regulators Widen Investigation of Crypto Exchanges

The government in Seoul is widening its probe on cryptocurrency exchanges focusing on the use of corporate accounts for crypto transactions, which the regulators say can lead to money laundering. The practice should have been discontinued when authorities introduced the real-name system at the end of January. However, only 30% of all crypto accounts have been converted into real-name ones so far. South Korea’s top financial regulators are now teaming up with prosecutors to widen the investigation.

This Week in Bitcoin: Smooth Bitcoin Cash Upgrade, BCH and BTC Tax Payments in FloridaThe six banks that can issue real-name accounts have chosen to only service the country’s largest crypto exchanges: Upbit, Bithumb, Coinone, and Korbit. Nonetheless, not all accounts at these exchanges have been converted into real-name ones. In addition, all small and medium-sized exchanges continue to use corporate accounts for crypto transactions. The regulators warn that the use of corporate accounts can lead to fraud. The announcement of the widening probe follows the launch of an investigation on the largest South Korean crypto exchange, Upbit.

What are your thoughts on the top stories we’ve covered this week? Let us know in the comments section below.


Images courtesy of Shutterstock.


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Crypto Floating Island Project Closer to Realization

Crypto Floating Island Project Closer to Realization

Blue Frontiers has signed a much-publicized memorandum of understanding with French Polynesia. The Floating Island Project is exactly as it reads, only it’s to be an independent government complete with its own cryptocurrency. An idea long thought to be a crazy dream of libertarians is now incredibly close to realization.

Also read: Alec Baldwin’s Lambo Movie Backed by Crypto Tech

Crypto Floating Island Project Nearer to a Reality

“A core structural feature of current models of government is centralization,” begins the pitch for an initial coin offering (ICO) pre-sale of Varyon from Blue Frontiers. “Too much centralized authority leads to inefficient bureaucracies and representatives disconnected from the people they are meant to serve. Given a suitable technological solution, governments are ripe for decentralization. That technological solution is seasteading.”

The book Seasteading: How Floating Nations Will Restore the Environment, Enrich the Poor, Cure the Sick, and Liberate Humanity from Politicians (Free Press, 2017) caused an immediate media sensation. Written by Joe Quirk and Patri Friedman, it’s the nonfiction account of what seems at the outset to be a sci-fi idea. Dutifully, legacy outlets treated it that way, at times dismissing seasteading as impractical, the stuff of fantasy.

Crypto Floating Island Project Closer to Realization

“Varyon (VAR),” via the Ethereum chain (1 ETH = 14,750 VAR), ERC-20 token, “is a general purpose payment token for the exchange of goods and services in the Blue Frontiers ecosystem, other ecosystems, and between token holders. Blue Frontiers is planning to use the proceeds of the sale to expand its ecosystem and create Seazones and seasteads, and will only accept Varyon (VAR) for its products and services,” Blue Frontiers claims.

A completely unrelated business proposition put seasteading into perspective. Anglo-Dutch oil and gas concern Shell launched its quarter-century at sea project, Prelude. Assembled in Samsung’s Heavy Industries Geoje shipyard, South Korea, Prelude is Shell’s gamble at taking a refinery to natural gas deposits previously imagined out of reach. Longer than the Empire State Building is tall, Prelude’s hull is among the largest ever built. The enormous project is an inspiring construct, stretching four continents and thousands of people.

Crypto Floating Island Project Closer to Realization

No Longer Just a Dream

Prelude is a floating city, and not in the literary license sense. It doesn’t take long to sympathize with Mr. Quirk’s and Mr. Friedman’s vision, even if it’s covered in petroleum-seeking profits at the moment. A floating island, then, isn’t the wacky concept one might be forgiven for at first highly doubting. Combine that real-world use case with modern cruise ships, perhaps linking them together, and it also isn’t terribly hard to consider a country at sea.

That’s the idea. Members of the Seasteading Institute, which can count among its members luminaries such as Peter Thiel, created a company bent on making all that theory turn real, Blue Frontiers. Early last year, in fact, the group inked a deal with French Polynesia to effectively use wet territory under its dominion in an attempt to bring to life the Floating Island Project.

Crypto Floating Island Project Closer to Realization

“Blue Frontiers plans to prototype the first seastead with funds raised from the Varyon (VAR) Crowdsale, and to fund additional seasteads through sales,” the project continues. “The Varyon (VAR) Blue Frontiers holds for seastead and Seazone Construction, Development, and Administration will be used only as needed, in order to create seasteads and Seazones and to strengthen the ecosystem of products and services available to Varyon (VAR) holders.”

The distribution of VAR follows pretty standard ICO procedures: “The amount of Varyon (VAR) allotted to seastead/Seazone Construction, Development, Administration is inversely correlated with the amount purchased in the public sale. That is, the more Varyon (VAR) sold in the public sale, the less Varyon (VAR) held for seastead/Seazone Construction, Development, Administration,” Blue Frontiers details. Thus, up to 28% is available during public sale; up to 8% presale; up to 6% for seed funders; up to 15% for the team; and the remainder goes to the project itself, up to 72%.”

“Seasteading brings decentralization beyond the digital world of bits and into the world of atoms by providing modular, floating structures – seasteads – on which the evolution of new societies and forms of governance can occur,” Blue Frontiers asserts. “Promising solutions can branch off at any time by physically separating to create new seasteads – enabling a high level of evolvability and quick rate of adaptation. Mimicking nature’s time-tested method of variation and selection, the process of decentralizing governance through seasteading will spark the creation and evolution of new advancements in civilization.”

Did you think projects like seasteading will eventually get off the ground? Let us know what you think of this subject in the comments below.


Images via Pixabay, Seasteading Institute, Blue Frontiers


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Japanese Crypto Exchange Continues Global Expansion – Now in Five Countries

Japanese Crypto Exchange Continues Global Expansion - Now in 5 Countries

A Japanese government-approved cryptocurrency exchange has resumed expanding overseas. Already operating in five countries with a plan to launch in more in the near future, the exchange aims to construct a global network of crypto transactions.

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

Building Global Network

Japanese Crypto Exchange Continues Global Expansion - Now in 5 CountriesBitpoint Japan was among the first crypto exchanges to be fully licensed by the Japanese Financial Services Agency (FSA). It is a subsidiary of Remixpoint (3825.T), a listed company on the Tokyo Stock Exchange.

Bitpoint has started a new round of expansion overseas, after entering a few countries last year. The company announced on Thursday that its Malaysian exchange has begun operations.

The Kuala Lumpur-based Bitpoint Malaysia opened its doors on May 17, offering spot trading and leverage trading. The fee for spot trading is 0.5% while leverage trading carries no fee. Deposits and withdrawals in Malaysian Ringgit are free during the grand opening. The exchange wrote:

We offer leverage of 2, 5, 10 and 25 times.

Five cryptocurrencies are supported: BTC, ETH, BCH, LTC, and XRP. Bitpoint Japan says it “will support Bitpoint Malaysia as a system and liquidity provider.”

Global Operations

Japanese Crypto Exchange Continues Global Expansion - Now in 5 CountriesIn addition to Malaysia and Japan, Bitpoint is also operating in South Korea, Taiwan, and Hong Kong. The exchange also opened an office in China in July last year before the Chinese government shut down all crypto exchanges in the country.

In addition, the exchange is reportedly preparing to enter Singapore, Thailand, and other Asian markets in the near future. Bitpoint detailed:

By continuing to provide overseas exchanges using the Bitpoint system in the future, we will continue to realize the construction of a global network of virtual currency transactions.

Tougher Rules and Competition in Japan

Since the hack of Coincheck, one of the most popular crypto exchanges in Japan, the FSA has tightened its cryptocurrency oversight. The country still has 16 fully-licensed crypto exchanges, which have recently formed an association to focus on self-regulation in an effort to rebuild public trust in the crypto industry.

However, out of the 16 “deemed dealers,” which are those allowed to operate while their applications are being reviewed by the FSA, only 8 remain. The agency recently revealed that the other 8 have indicated that they are withdrawing their applications.

Meanwhile, the agency confirmed that over 100 companies are seeking to enter the space, including Yahoo! Japan and Line Corp, which operates the popular chat app Line.

What do you think of Bitpoint’s global expansion plans? Let us know in the comments section below.


Images courtesy of Shutterstock and Bitpoint.


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South Korea to Follow G20 Unified Cryptocurrency Regulations

South Korea to Follow G20 Unified Cryptocurrency Regulations

The South Korean government reportedly plans to soften its crypto regulations in line with the policies set by the G20 nations in an effort to create “unified regulations.” The Korean regulators have also agreed to apply the standards set by the Financial Action Task Force to its crypto policies.

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

G20’s Unified Crypto Regulations

South Korea is reportedly planning to follow the policies set by the G-20 nations and soften its crypto regulations, the Korea Times reported.

The G20 is an international forum for the governments and central bank governors. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, United States, and the European Union.

South Korea to Follow G20 Unified Cryptocurrency Regulations

The top financial policymakers of these countries have agreed to acknowledge and regulate cryptocurrencies as financial assets, the news outlet noted, elaborating:

Financial policymakers of G-20 nations have set a July deadline for the first step toward ‘unified regulations’ of cryptocurrencies. One reason for the move by the G-20 is that they see cryptocurrencies as ‘too small to jeopardize’ financial markets. The combined market value of cryptocurrencies is less than 1 percent of the global GDP.

Financial Action Task Force Standards

While the G-20 classifies cryptocurrencies as financial assets, the Korean government has earlier classified them as non-financial products due to their speculative nature. Acknowledging the differences, the country’s Financial Supervisory Service (FSS) was quoted expressing:

It’s almost certain that cryptocurrencies will be classified as assets and the main issue will be centered on how to regulate them properly under the unified frame that will be agreed upon between G-20 nations. Given the current stance, this isn’t good, but we will step up efforts to improve things.

South Korea has also agreed to apply to cryptocurrencies the standards of the Financial Action Task Force (FATF), an inter-governmental body formed to fight money laundering and terrorism financing, the publication conveyed.

Softening Crypto Policies

Recently, the new FSS chief indicated that he will ease the country’s cryptocurrency regulations. Governor Yoon Suk-heun said there are many positive aspects of cryptocurrencies, promising to release updates on this issue in the near future.

South Korea to Follow G20 Unified Cryptocurrency RegulationsMeanwhile, the country’s National Tax Agency has been collaborating with the finance ministry to collect tax data in order to establish crypto tax policies. While cryptocurrency transactions are currently tax-free in Korea, crypto operators are required to pay income taxes, the news outlet detailed.

Despite the new FSS chief suggesting an easing of crypto regulations, his department has launched an investigation into crypto exchanges, in collaboration with other related authorities. In March, the prosecution arrested four employees of crypto exchanges including the CEO of Coinnest. Last week, they started investigating the country’s largest crypto exchange, Upbit. This week, three people were arrested from HTS Coin exchange for alleged fraud and embezzlement charges.

Do you think South Korea will soon ease crypto policies? Let us know in the comments section below.


Images courtesy of Shutterstock and the South Korean government.


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Korea Customs Authority to Test Blockchain Clearance System for Imports, Exports

The Korea Customs Service (KSC) is reportedly due to test a blockchain-based system to verify data and shipments during imports and exports with over 50 companies domestically. According to the Korea Times, the KCS is developing a customs data platform powered by blockchain technology in an effort to boost enhance the efficiency of a customs-clearing … Continued

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200 Million Users Messaging Giant LINE Partners Blockchain Project ICON

ICON, the $1.6 billion blockchain project created by developers from South Korea, has secured an official partnership with LINE, Japan’s largest messaging app that supports more than 200 million monthly active users. LINE’s Entrance Into Cryptocurrency Exchange Market On January 31, CCN reported that LINE is set to launch a cryptocurrency exchange within 2018 with … Continued

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Exclusive: 200 Million Users Messaging Giant LINE Partners Blockchain Project ICON

ICON, the $1.6 billion blockchain project created by developers from South Korea, has secured an official partnership with LINE, Japan’s largest messaging app that supports more than 200 million monthly active users. LINE’s Entrance Into Cryptocurrency Exchange Market On January 31, CCN reported that LINE is set to launch a cryptocurrency exchange within 2018 with … Continued

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Investigation of South Korea’s Largest Crypto Exchange Upbit Continues

Investigation of South Korea’s Largest Crypto Exchange Upbit Continues

Since the South Korean prosecution started investigating Upbit, the country’s largest cryptocurrency exchange, more events have unfolded. While local media still discuss allegations and raise questions about Upbit’s business practice, some people believe that Upbit is already in the clear. The investigation continues.

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

The Allegations

Investigation of South Korea’s Largest Crypto Exchange Upbit ContinuesLocal media reported on Friday that South Korea’s largest cryptocurrency exchange, Upbit, is under investigation for alleged fraud. More information has surfaced since, casting doubt on whether the allegations can be considered fraud. No charges have been filed against Upbit at the time of this writing. However, the prosecutors have confiscated the exchange’s computers and records as part of the investigation.

On Monday, News1 Korea described:

Prosecutors searched Upbit for fraud charges triggered by coinless transactions, suspicion of insider trading during the listing process, and allegations of money laundering and leakage of money through US trading sites.

Liquidity Issue

Investigation of South Korea’s Largest Crypto Exchange Upbit ContinuesThe first allegation, the most heavily scrutinized, concerns the liquidity of some of the coins listed on Upbit.

The exchange currently lists 137 cryptocurrencies but not all of them have wallets. South Korean prosecutors are accusing the exchange of “book-trading” where Upbit facilitates the trading of cryptocurrencies without actually having the coins in its possession. Joongang Ilbo elaborated:

Of the more than 130 cryptocurrencies currently traded on Upbit, about 40 do not support e-wallets.

News1 also pointed out that there is a viewpoint among investigators that if users request a transfer or withdrawal of their coins all at once, then Upbit will not be able to return their money immediately, which would render the original transactions fraudulent.

However, some argue that “most domestic trading sites are adopting this method” except those that handle a small number of cryptocurrencies such as Bithumb, the news outlet conveyed, adding that if this method is found to be an “apparent fraud…[then] the industry will not be much affected.”

Upbit Calls It a Misunderstanding

Upbit says that this investigation is “something that comes from misunderstanding,” Joongang Ilbo reported.

Investigation of South Korea’s Largest Crypto Exchange Upbit ContinuesThe exchange has repeatedly dismissed the above accusation, emphasizing that it will secure the needed cryptocurrencies as soon as it has brokered a transaction for the coins without a wallet, the news outlet detailed. In addition, Upbit insists that it has “never bought or sold cryptocurrencies that it did not own since it opened last October.”

Furthermore, given Upbit’s exclusive partnership with the US exchange Bitrex, crypto experts believe that “the lack of understanding of the Upbit trading system that links the system with the overseas exchange has led to the suspicion of book trading,” the publication emphasized, adding:

Cryptocurrency traded in KRW is directly managed by Upbit, and when customers buy other virtual currencies…transactions are made through Bittrex under the responsibility of Upbit.

A representative of another crypto exchange explained that except for the won market, Upbit transactions are made through Bittrex. “It is a legitimate book deal, and the prosecutors seem to have misunderstood why they are selling cryptocurrencies that they do not have.”

Previous Internal Audit

Another factor at play is an article published by Money Today on Tuesday, referencing an internal audit which reportedly happened earlier this year. The news outlet quoted Lee Seok-woo, president of Dunamu Inc. which operates Upbit, saying that “In early March, when Upbit was suspected of only [conducting] book transactions without [holding the] coins…I have been notified that the amount of coins [in the books] is 100% identical to the number of coins” in the wallets.

Referencing the above article, Twitter user Crypto of Korea wrote, “Upbit claimed that they had the internal account audit…The audit shows that 100% of the coins are real, the ledgers all synced to their own wallets.”

Investigation of South Korea’s Largest Crypto Exchange Upbit Continues

Some people subsequently took Upbit’s claim as the exchange being clear of wrong-doing in this current investigation, while others remain more objective. Twitter user Nash wrote, “Not concluded yet. It’s just “Upbit’s claim.” Meanwhile, Korean media still raise questions about Upbit’s operations and seek more answers at the time of this writing.

Insider Trading and Money Laundering Concerns

The prosecutors are also reportedly looking into allegations of insider trading and money laundering surrounding Upbit, News1 Korea wrote, noting that “some investors have raised strong suspicion that there is insider trading” at the exchange. “It is suspected that a person who receives information from an Upbit employee about an upcoming listing [on Upbit] would have bought the cryptocurrency from [an] overseas trading site and sold on Upbit.”

Furthermore, the investigators alleged that “illegal business funds are more easily transferred from the domestic [exchange] to the US due to the linkage with Bittrex,” the publication described.

As for any fraud charges, a lawyer was quoted by the news outlet commenting:

It is difficult to judge it as a fraud because there is no victim. If the capital market law applies to the transaction site [Upbit], it is a criminal offense. The lack of a clear baseline law is a bigger problem.

Joongang Ilbo further asserted that according to the position of the country’s financial regulators, “cryptocurrency is not subject to the Capital Market Law because it is not a monetary product.” In the unlikely event that the prosecutors can apply the Capital Market Law to this case, commissions through book transactions would be considered criminal proceeds, the news outlet explained.

Do you think Upbit has done anything wrong? Let us know in the comments section below.


Images courtesy of Shutterstock, Twitter, and Upbit.


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Arrest Warrants Issued to Employees of South Korean Crypto Exchange

Arrest Warrants Issued to Employees of South Korean Crypto Exchange

Arrest warrants have reportedly been issued to three employees of a small South Korean cryptocurrency exchange, including its representative director. The three are “suspected [of] fraud and embezzlement,” according to local media.

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

Arrest Warrants for Crypto Exchange’s Employees

Arrest Warrants Issued to Employees of South Korean Crypto ExchangeOn Monday, local media reported that arrest warrants have been issued to employees of a South Korean cryptocurrency exchange. “Three of the company’s executives, who operate virtual currency trading site HTS Coin, were arrested for [suspicion of] fraud and embezzlement,” Money Today wrote.

The Financial Investigation Division 2 of the South Korean Prosecutor’s Office “demanded a warrant for three employees, including…[the] CEO of HTS Coin,” Token Post detailed, adding that the other two employees are a program developer and a system operations manager. The news outlet elaborated:

According to the prosecution, Shin [the representative director] and his employees are suspected of taking money out of their accounts by transferring customer funds from a bank account to another account.

Arrest Warrants Issued to Employees of South Korean Crypto ExchangeThe publication explained that the three are also suspected of “deceiving investors, [by] pretending to” have cryptocurrencies “on the computer side without having real cryptocurrencies.”

“The prosecution believes that they have falsified” records and “used the money in the customer’s account as a personal account of the exchange,” Joongang added.

Responding to media reports, the exchange posted a notice Monday on its website maintaining that “All services except Korean won deposits, such as Korean won withdrawals, coin deposits, and coin withdrawals, are operating normally,” clarifying:

HTS Coin is currently under investigation by the prosecution and we are working diligently…Unlike external concerns, we still have 100% of your deposits and coins. We keep customer deposits and coins that can be withdrawn promptly even if all customers request a withdrawal at the same time.

On-Going Investigations

According to Asiae, an “interrogation of the suspects before the arrest was held in the southern part of Seoul on the morning of the same day,” adding that in March the “prosecutors searched three virtual currency exchanges including Coinnest, and it was reported that HTS Coin was included in the seizure investigation at that time.”

Arrest Warrants Issued to Employees of South Korean Crypto ExchangeJoongang confirmed this report, stating that “prosecutors searched three virtual currency exchanges including HTS Coin, Coinnest, and Komid last March.”

The news outlet further conveyed that “the prosecution has been investigating the illegal acts of virtual currency trading sites” in collaboration with the Korea Financial Intelligence Unit (FIU) and the Financial Supervisory Service (FSS) under the supervision of the Financial Services Commission (FSC). In March, “the investigation resulted in the arrest of four executives including CEO Kim Ik-hwan [of] Coinnest…Kim was handed over to trial last month.”

Last week the prosecution also started investigating South Korea’s largest cryptocurrency exchange Upbit as the regulators announced the widening probe of crypto exchanges. Money Today emphasized, “however, in the case of Upbit, there is no suspicion of embezzlement unlike Coinnest and HTS.”

What do you think of the Korean prosecutors going after HTS Coin’s employees? Let us know in the comments section below.


Images courtesy of Shutterstock and Coinnest.


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Chinese Miners Are Finding Relocation Difficult in Southeast Asia

Chinese Miners Are Finding Relocation Difficult in Southeast Asia

According to a recent report, cryptocurrency miners from China have been flocking to regions in Southeast Asia like Vietnam, Myanmar, and Cambodia. However, a relocated Chinese miner based in Cambodia says miners trying to find safe havens in other Southeast Asian countries are having difficulties, and losing money every month due to residents complaining and unreliable power.

Also read: Zimbabwe Bans All Cryptocurrency Activity, Businesses Have 2 Month Grace Period

Chinese Miners Who Relocate Are Finding Other Regions Located in Southeast Asia More Difficult

Mining in China is still allowed but there have been rumors of government crackdowns, and because of this speculation many mining operations based in the country have begun to relocate. Some operations who still seek out cheaper Chinese electricity tariffs moved to the border towns in Yunnan, but lots of Chinese miners have relocated to other areas in Southeast Asia like South Korea, Vietnam, Cambodia, and Myanmar. Although government officials and residents living in these regions have been giving miners a hard time according to a relocated miner named Zhang Han.

Chinese Miners Are Finding Relocation Difficult in Southeast Asia
Zhang relocated to Cambodia from China and found that local rent is quite cheap, a 500 square-meter large shack only charges 500,000 riel ($100) per month, and you can hire two local young labors at the cost of only $100. But Cambodian mining operations have posed other problems for Chinese miners.

Zhang says that he had miner friends that already “occupied” the suburbs of Cambodia and Myanmar. He did the math and found areas in Southeast Asia still offer much cheaper electricity than other countries worldwide. However, the miner explains he is not too happy with the move and states “I really regret it.” At first, Zhang found that Cambodia was expensive in some areas of operations, but less expensive in other areas when compared to other regions.   

“Compared with other miners who choose Vietnam and Myanmar, the electricity in Cambodia is slightly more expensive, but it costs less in other expenses,” Zhang explains in his recent interview.

It costs almost the same in Cambodia as industrial electricity price in China, 1.3 yuan ($20 cents) per kilowatt-hour (kWh), but you can take advantage of electricity theft from streetlamp facility with the help of some insiders.

Chinese Miners Are Finding Relocation Difficult in Southeast Asia
Accessory costs and maintenance is much more expensive than China. Some things can be 3X the price says Zhang.

Accessories Costs and Operations Maintenance is More Expensive Abroad for Relocated Chinese Miners

The accessories costs and operations maintenance is what gave his mining operation headaches, Zhang explains. “Maintenance and accessories are very big problems, and it can also be said that the cost of supplies is very high,” Zhang details. “But hardware maintenance is a challenge, it would cost you a great sum – at least 3 times higher than the cost back in China, especially in hot days when entering March. Buying parts here is really a big headache, we have no choice but to purchase them from China, which would take days or even weeks to have it available in operation here.”

At times we turn to local miners for help, while they would seize the opportunity to ask for unfairly high price for a tiny fitting. 

Chinese Miners Are Finding Relocation Difficult in Southeast Asia
Many areas in Southeast Asia experience lots of power outages and Zhang’s operation deals with electrical outages frequently. However, Zhang says you can take advantage of electricity theft from streetlamp facility with the help of some “insiders.”

Chinese Miners Also Face Unfriendly Local Competitors and Residents Who Might Report Electrical Theft

Zhang further realized that Cambodia suffered from significant power outages where there is no electricity for a whole day or even longer. The miner says in order to mitigate the problem, if an operation happens to have a connection with a power company “insider,” they can steal power from a nearby streetlight. However, local residents may report this method to the authorities, and Zhang says residents are not too friendly towards Chinese miners right now. Additionally, local miners and financial institutions backed by Western countries are also not pleased with Chinese miners relocating to these countries.

“Apart from the local residents and miners, institutions funded by western countries are also unfriendly to us — They are all trying to squeeze us out of here — And I’m considering that,” Zhang concludes.

What do you think about relocated Chinese miners having issues in other areas of Southeast Asia? Let us know your thoughts on this subject in the comments below. 


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Korean Regulators Widen Investigation of Cryptocurrency Exchanges

Korean Regulators Widen Investigation of Cryptocurrency Exchanges

South Korea’s government is widening its probe on cryptocurrency exchanges, particularly the use of corporate accounts which the regulators say can lead to money laundering. This announcement follows the prosecutors launching an investigation on the country’s largest crypto exchange, Upbit.

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

Widening the Crypto Probe

South Korea’s top financial regulators are teaming up with prosecutors to widen their investigation of domestic cryptocurrency exchange operators. An official of the Financial Service Commission (FSC) was quoted by the Korea Times on Sunday:

Following a request by the Financial Supervisory Service (FSS) and the prosecution to address growing anti-money laundering compliance concerns and possible abuse of cryptocurrencies in money laundering and fraud, the FSC is looking into exchanges’ corporate accounts opened in local banks.

The use of corporate accounts for crypto transactions should have been discontinued when the government introduced the real-name system at the end of January. However, only 30% of all crypto accounts haveKorean Regulators Widen Investigation of Cryptocurrency Exchanges been converted into real-name ones so far.

The six banks that have the ability to issue real-name accounts have chosen to only service the country’s largest crypto exchanges: Upbit, Bithumb, Coinone, and Korbit. Nonetheless, not all accounts at these exchanges have been converted into real-name ones. In addition, all small and medium-sized exchanges continue to use corporate accounts for crypto transactions.

The regulators say that the use of corporate accounts can lead to fraud such as recently seen with Coinnest whose CEO was charged with embezzlement. The largest Korean crypto exchange by volume, Upbit, is also currently under investigation even though banks have been converting its accounts to real-name ones.

Collaborating with Other Countries

Korean Regulators Widen Investigation of Cryptocurrency ExchangesSouth Korea has been discussing a collaboration with other countries on cryptocurrency regulations. At a recent International Organization of Securities Commissions (IOSCO) Board of Directors and Annual General Meeting held in Hungary, FSC Vice Chairman Kim Yong-beom discussed cryptocurrency issues with major national supervisory bodies. The need for IOSCO to cooperate on cryptocurrency and ICO regulations was stressed at the meeting.

An official of the FSC was quoted by the Korea Times saying:

The FSC is collaborating with authorities in other countries. Our latest findings show that the domestic exchange faked its balance sheets and deceived investors. The FSC is checking Upbit’s computer system with prosecutors and the FSS to audit the exchange’s virtual currency holdings.

Meanwhile, the new FSS governor Yoon Suk-heun recently indicated that he will look into easing regulations on domestic cryptocurrency trading, citing that “there are some positive aspects to cryptocurrencies.”

What do you think of the Korean regulators widening probe on crypto exchanges? Let us know in the comments section below.


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This Week in Bitcoin: Ghost Scares Markets, Facebook Mulls Coin

This Week in Bitcoin: Ghost Scares Markets, Facebook Mulls Coin

This week’s round-up features a colorful selection of bitcoin stories but we’ll start with the possible explanation for recent market dips. Most cryptocurrencies dropped in price over the period, following developments with depressing effect on traders. In Japan, Mt. Gox’s bitcoins stored in court ordered wallets have moved again, while in South Korea, the largest exchange Upbit has found itself under investigation for suspected fraud.  

Also read: Bitcoin in Brief Saturday: “Social” Coins, Crypto Vending, Blockchain Mileage

Markets React to Disturbing News from Japan and Korea

The prices of leading cryptocurrencies dropped this week, with some recovery across the board on Sunday. The negative trend was probably determined by some notable developments in Asia, powerful enough to influence the mood of traders. Just as Bitcoin (BTC) looked poised to storm the $10,000 psychological threshold, the ghost of notoriously hacked cryptocurrency exchange Mt. Gox reminded bitcoiners it isn’t done with them yet. Tokyo-based court appointed trustee of the remaining bitcoin to be distributed among creditors, Nobuaki Kobayashi, seems ready to flood the market, again. According to Blockchain.info, over 8,000 coins from two court ordered cold storage wallets have been recently shifted. As soon as the news broke, BTC prices plummeted.

This Week in Bitcoin: Ghost Scares Markets, Facebook Mulls Coin

South Korean media reported that the country’s largest cryptocurrency exchange, Upbit, is under investigation on suspicions of fraud. The exchange confirmed the news in a statement and tried to reassure its customers that their assets are kept securely, while “all transactions and withdrawals are operating normally.” Reports suggested that Upbit is suspected of transferring customer funds from their cryptocurrency exchange account to a representative or executive account. Acting on that information, Korean prosecutors have conducted search and seizure against the company, securing computer hard disks and accounting records. Upbit is currently the world’s fourth-largest crypto trading platform.

China to Publish Monthly Crypto Report

This Week in Bitcoin: Ghost Scares Markets, Facebook Mulls CoinThe Chinese government has decided to keep a close eye on decentralized currencies, despite all crypto bans it has imposed so far. Beijing authorities are set to publish a regular monthly analysis of over two dozen crypto assets in the form of the new Global Public Chain Assessment Index. “This independent analysis of cryptocurrencies and global public blockchain technology demonstrates the confidence of the Chinese Government in the technology, and will act as a guide,” according to a government press release. Almost 30 cryptos will be analyzed. The coins included in the index are expected to conform to certain standards like having an independent main chain and an open block browser.

China is also working to develop a national standard for blockchain technologies and applications. The new system should be completed and introduced by the end of 2019, according to reports by state-controlled media in the People’s Republic. Initially the blockchain standard will include basic standards, business and application standards, process and method standards, credible and interoperable standards, and information security standards, but the scope of its applicability will be expanded in the future.

Localbitcoins Changes ToS to Comply With EU Law

The popular peer-to-peer exchange Localbitcoins has updated its Terms of Service (ToS), noting that the changes have been introduced mainly due to regulations in the European Union. The new ToS of the Helsinki-based trading platform highlight certain identification requirements. In some situations users will be required to submit a copy of ID, although identity verification is not yet implemented as a mandatory procedure for all traders. The company has detailed some of the situations in which identification will be necessary. These include trading over certain volume limits, cases of account hacking/recovery, and fraud investigations. The new terms will be enforced on May 25.

Facebook Mulls Own Token, Reports Say

Bitcoin in Brief Saturday: “Social” Coins, Crypto Vending, Blockchain MileageThis week we also covered some interesting developments in our daily rubric “Bitcoin in Brief”. After introducing a ban on crypto-related ads earlier this year, social media giant Facebook is now considering creating its own cryptocurrency to facilitate on-platform payments, reports suggested. Sources familiar with the matter told the financial news outlet Cheddar that the network is serious about the project to introduce global crypto payments. A digital token would allow its two billion users around the world to take advantage of crypto transactions and skip state-issued fiat currencies. The company announced recently it had formed a team tasked to explore the uses for blockchain technologies that can be utilized to improve its business. The group is headed by David Marcus, former head of Facebook Messenger and ex-president of Paypal, who currently sits on the board of Coinbase.

BCH-Powered Social Media Apps Launch New Features

Two popular Bitcoin Cash social media applications, Memo and Blockpress, have introduced new features on their platforms this week. Users can now upload pictures, video, and even torrent magnets found on the Pirate Bay. Memo has recently added a bunch of features like replies, emojis, and a counter for typing. Its programmers also added a ‘Topics’ section where people can discuss any topic trending on the application. On Thursday, the Memo development team added image and Youtube video support. Users can now upload a picture or their favorite Youtube video utilizing an on-chain BCH transaction.

Last week, another BCH-powered social media application was launched – Blockpress. Just like Memo, the platform enables the ability to publish 77 characters via the Bitcoin Cash network. Its developer “Attila” said that after the May 15 BCH upgrade the Blockpress platform will provide the ability to upload much longer content. Currently, its users can add images to posts, a notification feed, community topics, and a sidebar of followed profiles on Blockpress.

Bitcoin and the Carnal Temptations

A bitcoin supporter hopes to replace New York Attorney General Eric Schneiderman, who resigned amid a sex scandal. Four women have recently complained about non-consensual physical violence by Schneiderman. Stock market lawyer and former stand-up comedian Manny Alicandro has announced his candidacy on the Republican ticket. He is described as bitcoin enthusiast and a crypto investor, who advises several blockchain startups. Alicandro’s campaign will highlight the current harsh regulation of bitcoin in the Empire State and may accept donations in bitcoin. He has been quoted as saying that he would like to see lighter rules for cryptocurrency businesses. Alicandro believes that New York’s Bitlicense regime is hurting jobs and stifling innovation.

This Week in Bitcoin: Ghost Scares Markets, Facebook Mulls CoinNY Attorney General Eric Schneiderman resigned just hours after the news about the violent sex scandal broke. His administration was behind an investigation into the operations of bitcoin exchanges which was rebuked by representatives of the crypto industry like Kraken CEO Jessie Powell who sharply criticized the regulatory overreach of his office.

This week bitcoin and carnal pleasures were mentioned together more than once. Exotic dancer Brenna Sparks, featured in the article about a Las Vegas club where strippers accept bitcoin via QR tattoos, has published a blog post on an adult entertainment industry portal explaining the advantages of cryptocurrency to her colleagues. Noting that digital money can help with upholding privacy and fighting piracy, Brenna also points out the main advantage of cryptos like bitcoin – helping people in the business avoid paying almost 50% to middlemen.

What are your thoughts on this week’s bitcoin topics? Let us know in the comments section below.  


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South Korea’s Biggest Cryptocurrency Exchange Investigated by Local Police, Market Drops

UPbit, South Korea’s biggest cryptocurrency exchange, was investigated by local police and 10 investigators after its headquarters in Seoul were raided. Chosun, the country’s biggest mainstream media outlet, reported that the South Korean authorities are suspecting UPbit of illicitly moving customer funds to the account of its executives. Investigation Ongoing On May 10, the Seoul

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