This week’s summary of various cryptocurrency news and developments:
A BTC-e operator was arrested, accused of laundering $4 billion, there may be a connection to the Mt Gox hack
Various reports indicate that a 38-year-old Russian man recently arrested in Greece for money laundering was an operator at popular cryptocurrency exchange BTC-e. The man, Alexander Vinnik, is accused of being the “brain” in a money laundering operation that laundered over $4 billion of ill-gotten bitcoin through BTC-e. Prior to his arrest BTC-e’s website was taken down and on Twitter the exchange claimed the outage was due to “unplanned maintenance”. At press time, the website seems to have been seized by authorities.
— Mark Karpeles (@MagicalTux) July 28, 2017
After Alexander Vinnik’s arrest, Mt Gox CEO Mark Karpeles published a tweet that implied the arrest was related to the Mt Gox bitcoin theft that ultimately led to the exchange’s demise. Then bitcoin security specialists WizSec published a report that connected the arrested Russian man to the Mt Gox theft, meaning he either participated in it or helped launder the money. Moreover, by looking at blockchain data it was found that hundreds of thousands of bitcoins stolen from Mt Gox users ended up on BTC-e, presumably to be laundered.
The report states that Alexander Vinnik was WizSec’s main suspect for involvement in the Mt Gox theft. In the end, it clarifies WizSec’s suspicion:
- “To be clear, this investigation turned up evidence to identify Vinnik not as a hacker/thief but as a money launderer”
The SEC wants to regulate Initial Coin Offerings
A recent report published by the SEC seems to determine that Initial Coin Offerings (ICOs) are going to be regulated as securities, which implies that ICOs are about to undergo analysis so more security can be implemented, and that unregistered ICOs could be subject to criminal punishment. The SEC evaluated that DAO tokens, which got stolen by hackers, were a security and, as such, concluded:
- “(…)issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies.”
According to reports, even those who want to participated in ICOs “may be liable for violations of the securities laws.” The SEC defends that there wasn’t enough oversight so far and that this serves as a warning to investors that some ICOs may end up just being investment schemes. In anticipation of such a move by the SEC, most ICOs already prohibited U.S. investors, but now participating in an ICO may get a little tougher.
Bitmixer.io, one of the biggest bitcoin mixing services, closed its doors
A Bitmixer.io admin recently published a thread on the popular Bitcointalk forum that stated the service was going to close its doors. The reason behind it, according to the thread, was a change in ideology. It stated:
- “When we started this service I was convinced that any Bitcoin user has a natural right to privacy. I was totally wrong. Now I grasped that Bitcoin is transparent non-anonymous system by design. Blockchain is a great open book.”
The service’s admin stated that he believes the cryptocurrency is going to have a great future without “darknet market transactions”. He further advised users to use other cryptocurrencies for these transfers, such as Dash or Zcash. The thread’s timing, after AlphaBay and Hansa were taken down, led various users to believe Bitmixer.io was under government pressure, despite the admin restating that the move was based on a change in his ideology, “despite incredible high income.” The admin even discredited the government pressure theory, stating:
- “The government pressure doesn’t work like “Oh man please close your service!”. No way. They just come and arrest you for illegal activity.”
Kosovo’s Central Bank warned against digital currencies after the country got its first ATM
IT systems firm Albvision Ltd is set up a bitcoin ATM in Kosovo’s capital, Pristina. It will only support bitcoin at first, but 10 other cryptocurrencies are to be added in the future. According to reports, the company also plans on adding ATMs in Albania and in the Republic of Macedonia. The move has, however, sparked a response from Kosovo’s central bank, which decided to warn potential investors that cryptocurrencies aren’t regulated in the country, and that “there is no institutions guaranteeing the reimbursement of money that is lost.”
Although various bitcoiners decided to defend Albvision’s move, stating that the ATM creates possibilities for bitcoin to gain new users, and that the biggest risk of losing money with cryptocurrencies is by not knowing how to use them.
Study conducted in India showed 97% are aware of cryptocurrencies, but usage remains low
A survey recently conducted by India’s market and trade body found that out of 223 stakeholders, from electronic devices to automobile parts, 97% were aware of digital currencies such as bitcoin, but its use within companies still remains low. The country’s Chamber of Commerce and Industry president, Gopal Jiwarajka, stated that there are risks associated with the use of bitcoins due to the cryptocurrency not being backed by a tangible asset, and due to it possibly being used to launder money, according to CryptoCoinsNews,
In India, rising cryptocurrency demand has led the government, and the Reserve Bank of India (RBI) to start looking into regulating them. Bitcoin’s regulatory fate, as well as that of other cryptocurrencies, still remains uncertain in India.
Bitcoin at $2,702.10 as August 1 draws near
On August 1, the Bitcoin blockchain may split and, as such, various cryptocurrency exchanges and wallets have warned users about their contingency plans should Bitcoin Cash (BCC) start to exist. At press time, one Bitcoin is currently worth $2,702.10, and a BCC token is expected to be worth $364.48, according to data from CoinMarketCap. Bitcoin’s dominance is now, once again, above 50% as its market cap is at $44.5 billion. Users are advised to check the contingency plans of third-party services they use.
Ethereum at $182.28 as most altcoins recede
As Bitcoin’s big day draws near, most altcoins have been losing value. Ethereum, the second biggest cryptocurrency by market cap, is no exception. It’s down by over 7% in the last 24 hours, as one Ether token is currently worth $182.28. Ethereum’s market cap is at $17.06 billion.