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Poland Bitcoin Community Files Complaint Against Bank Account ‘Denials’

Poland’s cryptocurrency industry lobby group the Polish Bitcoin Association (PBA) confirmed it has complained to regulators about banks’ denial of services to businesses June 27.


Banks ‘Aim To Remove Virtual Currency’

In a statement sent to the Office of Competition and Consumer Protection (OCCP), the PBA cites financial institutions closing and denying bank accounts as proof they “clearly aim at removing virtual currency entities from the market.”

Poland continues its chequered history regarding cryptocurrency, which still lacks official laws but faces a de facto ban on ICOs.

The government has sought to change the situation, various media outlets note, but its position appears to jar with that of the country’s banking sector.

The PBA claims a total of fifteen institutions refused an account to 52 cryptocurrency-related businesses, and closed the accounts of a further 25.

Of these, mBank, Poland’s fourth-largest banking group, refused nine accounts and closed three.

Poland The Black Sheep

“…The effects of the banks’ actions described clearly aim at removing virtual currency entities from the market, despite the fact that such activities are legal and conducted with dignity,” the complaint states.

In view of the above, action by the regulators is necessary, and this notice and its requests are fully substantiated.

Last month saw local cryptocurrency exchange operator BitBay suspend all activity in Poland and relocate to Malta, copying a move by industry heavyweight Binance in March. Its motive also appeared to be banking difficulties.

The situation differs increasingly from neighboring Lithuania, where a concerted effort to formalize the cryptocurrency and ICO sector has been underway this year.

As Bitcoinist reported this week however, the country’s progressive stance on crypto is not without its problems.

Banking sources have expressed concerns about Russian capital entering the local economy, something which is undesirable, a central bank board member said.

Lithuania released formal ICO guidelines in June, the government announcing the “brave new” cryptocurrency economy was “here to stay.”

What do you think about Poland’s banks’ stance on cryptocurrency businesses? Let us know in the comments section below!


Images courtesy of Shutterstock

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Čvn 29

Indian Exchange Says Women More Bullish on Cryptocurrency Than Men

Women in India are making larger individual investments in cryptocurrencies compared to men, according to one local exchange. However, men are leading the charge when it comes to sheer numbers.


Women are Bigger Spenders

Women have turned out to be the bigger spenders in India when it comes to cryptocurrency investments, according to a recent survey conducted by BuyUcoin – a local cryptocurrency exchange. The average female trader invests more than RS 1.4 lakh (roughly around $2,000) in virtual currencies, double the amount their male counterparts invest.

The exchange surveyed more than 60,000 respondents between March and June of this year. According to the BuyUcoin CEO Shivam Thakral, the increased amount of money women invest is tied to their average age:

Usually, woman investors who are buying or trading are over 40 years of age. Therefore, typically these mature investors are able to put in more money. […] On the other hand, more men start investing at an early age with the average age for this investor group being 30.

Nevertheless, in terms of pure numbers, men are leading the charts, with over 90% of the investors being male across the entire country.

The Local Cryptocurrency Environment

In April the Reserve Bank of India (RBI) officially ordered regulated financial entities to refrain from providing their services to all businesses involved in cryptocurrency-related dealings. This move prompted an uproar within the community which resulted in swift counteractions from numerous companies involved in the field.

In May the country’s Supreme Court declined an interim injunction against the ban, responding to a coalition of petitioners comprised of startup companies and four cryptocurrency exchanges. At the time, RBI stated that the Supreme Court cannot interfere with the economic policies of the country.

Nevertheless, those affected by the cryptocurrency ban will challenge RBI’s decision on July 20. The bank has continued to receive mounting criticism over its anti-crypto stance. Local lawyer Varun Sethi, however, laid down the bank’s justification on the matter:

The RBI also responded that no committee was ever formed for analyzing the concept of blockchain before the decision.

This gives confidence to local lawyers currently representing the industry. Rashmi Deshpande, associate partner at Khaitan & Co said of Sethi’s information that the justification of the bank cements the arguments which the cryptocurrency industry is making on the matter:

The grounds on which our writ petition has been filed is that the RBI has not done enough research to ban a business completely.

What do you think of the cryptocurrency situation in India? Don’t hesitate to let us know in the comments below!


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Čvn 28

$17 Million in Bitcoin Seized in Dark Web Undercover Sting Operation

US Prosecutors seized over $22 million in assets from two men in Maryland on charges of production and selling counterfeit drugs through the Dark Web. $17 million (at the time of seizure) of the amount was in Bitcoin (BTC) and other cryptocurrencies.


Bitcoin Used to Buy Counterfeit Xanax

Two men from Maryland were indicted on charges related to producing and selling counterfeit drugs on the Dark Web. According to the press release published by the Department of Justice (DOJ), the two have been taking part in a scheme to manufacture and to distribute alprazolam tablets, which are generally sold under the “Xanax” brand.

The indictment, which contains a total of six charges, alleges that over the span of four years – from Nov. 2013 to June 2017 – defendants Ryan Farace, 34, and Robert Swain, also 34, sold the counterfeit drugs on the Dark Web in exchange for Bitcoin and other cryptocurrencies.

To date, law enforcement has managed to seize assets worth a total of $22 million at the time of the seizures. These include 4,000 BTC which, at the time, were worth $17 million. However, taking the price of Bitcoin 00 at present time, their total worth is currently upwards of $24 million.

The authorities also seized more than $1.5 million in cash and an estimated $2.5 million in computer equipment. The government now seeks a forfeiture of at least $5,665,000, as well as the value of the 4,000 BTC which are believed to be the proceeds of the illicit activities.

Both men face twenty years of jail time on the count of money laundering while Farace also faces five years in prison on the count of drug distribution.

5 Arrested in $1 Million Bitcoin Strong Arm Robbery Conspiracy

Operation Dark Gold

The case was a part of Operation Dark Gold – a joint undercover national operation involving the Department of Homeland Security, the DOJ’s Criminal Division, and the US Secret Service, among other authorities.

As a result of the year-long coordinated operation, more than 51 people have been arrested and charged in more than 90 active cases throughout the entire country. The actions of the authorities have also resulted in the seizure of virtual currency proceeds, weapons, drugs, fiat currency, and computer equipment.

Do you think cryptocurrencies are the currency of choice for illicit activities? Why or why not? Let us know in the comments below!


Images courtesy of Pixabay, Shutterstock

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Čvn 27

Vitalik Buterin Demands Court Challenge Against New nChain Patent

Ethereum co-founder Vitalik Buterin has openly criticized Blockchain research company nChain’s latest patent award, calling for opponents to challenge it in court.


Pure Invention?

nChain, whose chief scientist Craig Wright claims to be Bitcoin creator Satoshi Nakamoto while heavily endorsing altcoin Bitcoin Cash, received its latest European patent for what it describes as a “digital security invention.”

“This Deterministic Key Generation technique provides for improved secure communication between a pair of nodes or parties on a network, while being able to keep their private keys secret,” a press release issued June 25 claims.

nChain is attempting to create a raft of Blockchain-based tools to facilitate transactions worldwide through what it calls the “Internet of Transactions.”

The company, often via Wright as a spokesperson, continues to hit the headlines in the cryptocurrency industry for its controversial approach to marketing.

craig Wright

Last month, Wright told a conference audience in Rwanda that he “had more money than their country” while plugging nChain’s future plans.

‘Can’t Someone Attack It In Court?’

Reacting to the patent meanwhile, Buterin appeared unimpressed at the prospect of the company using it as a basis for innovation, appearing to argue it contained no new “invention” at all.

“This looks like they’re trying to patent plain old public master key-based deterministic wallets, like what we had in 2013,” he wrote on Twitter Tuesday.

“Can’t someone attack it in court with the obvious mountains of prior art?”

Buterin had previously called Wright a “fraud” for his Nakamoto claims.

Discussing its implementation, nChain claimed a hook-up with Japanese conglomerate SBI had legitimized the technology.

“We will work with select partners on projects to produce maximum benefit for the Bitcoin Cash ecosystem,” CEO Jimmy Nguyen stated, the release adding SBI and nChain were “collaborating to develop a next-generation advanced secure cryptocurrency wallet system.”

What do you think about nChain’s latest patent? Let us know in the comments section below!


Images courtesy of Shutterstock, Twitter, Bitcoinist archives

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EU Adopts New AML Directive to Combat Cryptocurrency Crimes

The European Union recently adopted a new anti-money laundering (AML) directive specifically targeting cryptocurrencies. It is the fifth AML directive of the EU, and aims to detect, investigate, and prevent financial crimes in the region.


Details of the Directive

The directive tagged “Directive (EU) 2015/849” allows Financial Intelligence Units (FIUs) to access cryptocurrency wallet information. These security agencies will be able to identify the owner of a cryptocurrency address, based on this latest policy. A portion of the directive reads:

It is therefore essential to extend the scope of Directive (EU) 2015/849 so as to include virtual currency exchange platforms and custodian wallet providers. Competent authorities should be able to monitor the use of virtual currencies. This would provide a balanced and proportional approach, safeguarding technical advances and the high degree of transparency attained in the field of alternative finance and social entrepreneurship.

The major highlights of the new directive include:

  • A better understanding of the risks posed by virtual currencies as well as prepaid cards.
  • Improved cooperation between FIUs
  • More comprehensive checks on transactions originating from “high-risk third countries.”

One crucial aspect of the new policy is balancing its objectives of hindering criminal finance without disrupting the region’s payment ecosystem. Commenting on the new directive, Bulgarian finance minister and President of the European Council said:

These new rules respond to the need for increased security in Europe by further removing the means available to terrorists. They will enable us to disrupt criminal networks without compromising fundamental rights and economic freedoms.

Cryptocurrency and ML/TF

A large part of the government opposition to cryptocurrency lies in the anonymity of the system. Many governments around the world are quick to declare that virtual currencies provide a viable conduit for money laundering and terrorist financing (ML/TF).

Recently, Robert Novy, Deputy Assistant Director of the U.S. Secret Service’s Office of Investigations called for “additional legislative actions” to address the dangers posed by privacy coins. Rep. Robert Pittenger of North Carolina even described virtual currencies as “one of the greatest emerging threats to U.S. national security.”

However, experts like Matt Peyer disagree, saying cryptocurrencies are for the most part overrated for terrorist finance. According to Peyer, while virtual currency transactions are somewhat anonymous, lack of places that accept them in known terror havens make them unsuitable for supporting terrorist activities.

In fact, a report from the Center for a New American Security (CNAS) revealed that only 7.929 BTC were linked to terrorist financing between 2015 and 2017.

What is your opinion on the new EU AML directive? Do you think cryptocurrencies are a viable means for terrorist financing and financial crimes? Keep the conversation going in the comment section below.


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UK’s Cryptocurrency Task Force Concerned Over Recent Exchange Hacks

The latest hacks in the cryptocurrency industry have had some British MPs questioning whether customers’ funds are safe.


The word “hack” has the ability to send fear into the hearts of many a cryptocurrency holder. Were you affected? Are your funds safe? Will you be compensated if you’re a victim? These are thoughts that run with frightening speed through your mind until you get confirmation.

However, in today’s age of regulation, holders are not the only people on alert. Authorities with their eye on virtual currencies are always ready to ask questions when things go south, as was the case with the recent security breaches of both Bithumb and Coinrail.

Cold Storage is Required

According to Stuff, Iqbal Gandham, the chairman of CryptoUK, sought to reassure authorities by providing some insight. The self-regulating agency represents a range of cryptocurrency trading websites including eToro, Coinbase, and Coinfloor. Gandham has stated that they request that all of their members store at least 90% of their virtual funds offline in an effort to protect them against hacks. He added that “security is improving.”

Iqbal Gandham

Lack of Institutional Support

Even though regulation is the name of the game, solid and clear frameworks are still hard to come by. In fact, Gandham believes that this lack of decisive action has made traditional banks wary of working with cryptocurrency exchanges. This, in turn, has resulted in said exchanges working with foreign banks. He explained:

99.9 per cent [of exchanges] have bank accounts in far-flung jurisdictions and UK consumers are sending their money to high-risk jurisdictions.

Gandham also hoped to allay fears of volatility by noting that although still unpredictable, cryptocurrency prices are not shifting as much as they used to. Regardless, the UK’s cryptocurrency task force will most likely still be keeping a close eye on the markets.

The Possible Impact of Hacks

These security breaches not only set aflutter the hearts of possible victims, but of traders in general as it was believed by many that the breaches led to price declines. This may have been the case with the Mt. Gox hack a few years ago, but according to CNBC’s Brian Kelly, today’s market appears to be too bullish to be substantially affected by breaches.

Two hacks in one month may have cryptocurrency holders wondering how they can protect their funds. The obvious choice is to follow CryptoUK’s lead and store their digital currencies in a cold storage wallet. While some exchanges are working towards improving their security features, this could be a way to retain your peace of mind as well as the possession of your cryptocurrencies if a breach does occur.

Do you agree with Gandham that security is improving in the cryptocurrency industry? Do you think that hacks drastically affect prices? Let us know in the comments below! 


Images courtesy of AdobeStock, Iqbal Gandham

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Robinhood CEO: No Plans to Make Money on Cryptocurrency Trading for ‘Forseeable Future’

Stock brokerage Robinhood launched no-fee cryptocurrency trading in February 2018 and intends to operate cryptocurrency trading as a breakeven business.


Robinhood created its commission-free stock brokerage in 2013, providing major competition to existing fee-based trading platforms. Instead of making money from commission fees on stock and cryptocurrency trades, the company takes its profits from interest earned on cash balances, margin lending, and its premium services.

Free Cryptocurrency Trading

When Robinhood first announced at the end of January 2018 that it would be launching zero-fee cryptocurrency trading, reactions within the crypto and financial communities were swift. Within just four days of the announcement, more than one million people had signed up for early access to the Robinhood Crypto app. In the days following the app’s official launch in February, growing interest and excitement sparked a flood of new customers – as many as 200,000 per day.

With such a massive influx of new users eager to trade cryptocurrencies, it would be tempting for any exchange to update their policy and charge at least a nominal trade fee, but Robinhood is sticking to its guns.

Vlad Tenev, Robinhood founder and co-CEO told Fortune:

We don’t intend to make very much money on it at all for the foreseeable future.

Tenev’s comment reinforces a similar statement made in the company’s announcement back in January in which he explained some of the reasoning behind the decision:

The value of Robinhood Crypto is in growing our customer base and better serving our existing customers.

Vlad Tenev, Robinhood founder and co-CEO

Aiming for Breakeven

In an episode of Balancing the Ledger, Tenev explains that Robinhood is operating its cryptocurrency trading arm as a breakeven business. It is a move reminiscent of Square offering its users zero-fee Bitcoin trading through its Cash app earlier this year. In fact, Square recently announced that it made just $223,000 more on Bitcoin sales than it originally paid for the coins in Q1 2018.

So why aim for breaking even? As Tenev and his co-CEO, Baiju Bhatt, explain, they view cryptocurrencies as an entry point onto their platform for new traders. The theory is that new traders will come to the platform initially for cryptocurrency trading, but then expand their interests to the other more traditional assets on which Robinhood reaps higher margins.

Building an Ecosystem

With a current valuation of around $5.6 billion, Robinhood is the second most valuable private fintech company in the world with over 4 million customers trading stocks, ETFs, and cryptocurrencies.

Speaking about the decision to introduce cryptocurrency trading, Tenev explained:

The thinking behind that is what we’re really doing is building an ecosystem. Right now, the products are investing products, so crypto slots in very nicely alongside the 10,000 plus other instruments that people can trade.

Financial Services Customers Are Getting Ripped Off

Tenev believes commission fees are outdated, especially considering the lower costs of operation of modern online exchanges and brokers. Robinhood’s approach is to use technology and automation to reduce costs for customers and it aims to eventually compete with Bank of America across all financial products.

I think it doesn’t stop with just investing products. Customers are getting ripped off across the board in financial services.

Robinhood is planning to add more cryptocurrencies to its existing trading of Bitcoin and Ethereum but is wary of regulatory uncertainty. It will also assess new coins thoroughly.

Do you agree with Tenev? Are traditional financial service providers ripping customers off? Let us know in the comments below.


Images courtesy of Robinhood, AdobeStock

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Bitcoin Inside: Crypto Mining Farm to Open in Former Intel Facility

· June 23, 2018 · 12:00 am

California-based 3G Venture II has paid $13 million for a significant portion of an old Intel chip plant in Colorado Springs, which it intends of turn into a new bitcoin mining operation.


Mining Farms Opening Around the World

Miners have been flocking to cities that offer cheap electricity to reduce costs and increase profits, and it looks like Colorado Springs may join the list. At just 7.94 cents per kilowatt-hour, the town’s commercial electricity rates are more than 21% lower than the national average. City leaders have been using these lower prices to entice new businesses into the area – and it appears to be working. Walmart and FedEx both have data centers in the area which require large amounts of electricity to run. Bitcoin mining farms have similar power needs, making Colorado Springs a great place to set up shop.

Much of the town’s economy is based in the high-tech sector, with companies like Verizon and Hewlett-Packard setting up offices. In 2000, Intel opened a 1.4 million square foot semiconductor plant in the area that boasted an extensive electricity network – including its own substation and two separate power feeds – among other features. A several years-long decline in the industry caused Intel to close down the plant in 2009 and there it has remained abandoned – until now.

Mining Farms Opening Around the World

California-based 3G Venture II has purchased a “large portion” of the old Intel plant and – according to city economic development leaders  – plans to convert it into a bitcoin mining operation. With a purchase price of $13 million, the acquisition includes 30 acres of land and more than 700,000 square feet spread across four buildings. Three of the buildings – 85,000 square feet in total – will be used for the actual mining operation. The company intends to lease space in the remaining building – a huge 4-story, 640,000 square foot facility – to industrial tenants.

Cheap energy and size of the facility aside, one of the primary factors that drew the interest of 3G Venture II’s owner, John Chen, was its power infrastructure. The on-site substation and dual separate power feeds are a huge boon for any mining operation. Without it, a similar operation might have to spend hundreds of thousands of dollars more in order to achieve the same setup.

Hashrate Follows Price?

Cryptocurrency mining has really taken off in the past year, with new, with increasingly more efficient hardware hitting the market every few months. Bitcoin is mined using pieces of hardware known as ASICs, or Application Specific Integrated Circuits. These machines can perform mining calculations thousands of times faster than consumer grade hardware, making them an attractive choice for people looking to open large-scale operations. In addition to hardware costs, miners also need to worry about the electrical costs of running that many machines – hence the exodus to locations with cheaper electricity and cooler climates.

Bitcoin’s current bear trend doesn’t seem to discourage miners, however. Since January, the price has fallen well over 60 percent. yet the hash rate – the total computing power of the network – has nearly tripled from 13 EH/s to just around 37 EH/s. The hash rate is a good indicator of the overall security of the network – the higher the hash rate, the more difficult it is for someone to launch an attack.

One would think that a more secure network would be more valuable, but the market doesn’t really seem to care. We’ll see how the price reacts to this consistent hash power increase over the next few months.

What do you think about these large-scale mining operations? Do you think the current bitcoin mining landscape is too centralized? Let us know in the comments below!


Images courtesy of Blockchain.info, Bitcoinist Archives, Shutterstock

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Čvn 22

eToro Market Research: EOS

An Initial Coin Offering (ICO) is the equivalent in the crypto-sphere of securities’ IPOs. Unlike IPOs, which are harshly regulated, ICOs are still lacking significant regulation and allow average Joe investors to support their favorite projects from a very early stage.Currently, EOS tokens are stored on the Ethereum blockchain. On June 1st, 2018,  the EOS main net will be released and the token will be swapped onto their own blockchain. Despite not having a running product yet, EOS is currently the 5th largest cryptocurrency in terms of market capitalization, proving the great expectations of the cryptocurrency community for this blockchain.A decentralized application (dApp) is analogous to a software application on traditional computers and websites. Unlike these traditional solutions, dApps run on a decentralized network formed by thousands of computers.Ethereum’s network, who currently employs a Proof-of-Work consensus protocol similar to that of Bitcoin, has proven to be slow especially during extended periods of maximum use. EOS aims to reach a capacity of millions of transactions per second, which should be enough for simultaneous and global-scale use of multiple viral dApps. For that purpose, EOS will use a state of the art Delegated Proof-of-Stake (DPoS) protocol.In the Proof-of-Work protocol, computers in the network compete to solve mathematical problems in order to obtain rewards in the form of coins, while securing the network. A downside of this is the high costs and environmental impact in terms of energy associated with this protocol.Brendan Blumer is a technology entrepreneur based in Hong Kong and the founder and CEO of block.one. He created Gamecliff, a service for selling in-game items, at the age of 14, and has since been involved with several technological projects before focusing on cryptocurrencies.Dan Larimer is arguably one of the most respected minds in the “crypto world”. He is the creator of the DPoS protocol, and two previous successful blockchain projects, Bitshares and Steem, the two blockchain projects with a larger user activity. Now, he acts as the CTO of block.one and the main technical mind behind EOS.Market Analysis

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Akon Launches Akoin to Be ‘Savior of Africa’

· June 21, 2018 · 12:00 am

US singer-songwriter Akon has become the latest celebrity to launch a cryptocurrency — as he proclaims his belief the underlying technology “could be the savior of Africa.”


Akoin ‘Will Be Center Of Transactional Life’

Originally reported by Page Six, Akon — who is originally from Senegal — revealed at this year’s Cannes Lions International Festival of Creativity that he wants to use Akoin as part of a giant 2000-acre development called Akon Crypto City. Akon stated:

I think that blockchain and crypto could be the savior for Africa in many ways because it brings the power back to the people and brings the security back into the currency system and also allows the people to utilize it in ways where they can advance themselves and not allow government to do those things that are keeping them down.

Akon is currently heavily involved in humanitarian projects, having set up Lighting Africa — a project to bring solar power to Africa — in 2014.

The star appears to have built a presence, with the president of Senegal donating the 2000 acres needed for the Crypto City — which describes itself as “a first of its kind 100% crypto-based city with Akoin at the center of transactional life.”

That’s A Rap

Akon is not the only well-known personality to have ventured into the world of cryptocurrency.

Wu-Tang Clan member Ol’ Dirty Bastard became indirectly linked with the industry after his son launched a coin, while rapper 50 Cent made headlines earlier this year after claiming he “forgot” about $8 million in Bitcoin holdings — only to deny the claims to a judge weeks later. DJ Khaled was also involved with CTR Token, which was deemed a fraud by the U.S. Securities and Exchange Commission.

Akon, meanwhile, appears to be adopting a somewhat hands-off approach to the technical reality of creating and launching an altcoin, stating:

I come with the concepts and let the geeks figure it out.

What do you think about Akon’s cryptocurrency plans? Let us know in the comments section below! 


Images courtesy of Shutterstock.

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