Dub 08

Bitcoin Bites Back: Wells Fargo in Court After Halting Exchange Transfers

· April 8, 2017 · 7:30 am

The parent company of cryptocurrency exchange Bitfinex, iFinex, is suing Wells Fargo over disruption to wire transfers.


Bitfinex: Court Move To ‘Prevent Precedence’

Court documents filed by the company, along with fellow conversion service Tether.to in San Francisco, relate to the global bank allegedly blocking outgoing wire transfers to the banks servicing them.

“Wells Fargo has suspended U.S. dollar wire transfer operations needed to remit to plaintiffs’ customers U.S. dollars that the customers deposited with plaintiffs to purchase digital currency,” the complaint reads.

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It adds that the bank’s actions were “causing imminent and irreparable harm to plaintiffs.”

In additional comments on Reddit, Bitfinex spokesman commented that the lawsuit was to “prevent precedence” and that if nothing was done, the phenomenon could repeat itself with other cryptocurrency businesses.

He said:

“We’re not going to rollover for action like this. It’s precisely why we have increased our legal department.

“The decision to initiate legal action is because we cannot allow precedence in this industry where clearing houses can disrupt businesses that are by all metrics complying with the rules in place.

“If we allow them to simply flip a switch and disrupt business, then there becomes a precedence in the Bitcoin industry beyond just Bitfinex, so we believe it is the appropriate time to take action to prevent precedence.”

Fickle Banks Meet Their Match At Last

The decision to disrupt liquidity flow for the two services could well represent the most severe instance of a bank declining service to cryptocurrency businesses.

Previous instances include Venezuelan exchange Surbitcoin’s temporary shutdown due to a banking refusal, while flagship New Zealand exchange bitNZ disappeared for good after operating for six years due to its bank’s sudden decision to cut ties.

Not just exchanges, but entities from across cryptocurrency have felt the effects of banks’ changing whims. UK news resource Coinjournal had its bank account frozen by Barclays in September last year, allegedly over connections with Bitcoin.

Regulations Bite Poloniex in Washington State

Meanwhile further up the West Coast, Washington State is to lose services from another Bitcoin exchange, this time Poloniex.

In a circular to customers, “careful consideration of the Washington State Department of Financial Institutions’ interpretation of its financial services regulations” had resulted in the suspension of service for residents “until further notice.”

Ethereum Classic

Customers affected have two weeks from April 6 to remove funds from their accounts. Before the deadline, they are also prohibited from “opening new margin positions, adding to existing ones, and lending funds.”

Bitfinex itself exited Washington State for the same reasons back at the beginning of March. Unlike Poloniex, however, the exchange hinted there would be no return, and its users had markedly less time to react.

What do you think about the Wells Fargo case? Let us know in the comments below!


Images courtesy of Shutterstock, poloniex.com

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Říj 19

Poloniex Seeks Regulatory Clarity From CFTC Following Allegations

Source: bitcoin

CFTC

Popular Bitcoin and altcoin exchange Poloniex has submitted a request for no action relief to the Commodities and Futures Trading Commission (CFTC) around potential allegations that required timing of the “actual delivery” of cryptocurrency, regulated by a 28 day period in the Commodity Exchange Act (CEA), has been violated.

Also read: ‘GAME Changer’ Announced at Coinsbank Blockchain Summit in Turkey

The digital nature of cryptocurrency, however, does not mend well to the wording of existing laws, thereby hurting attempts to determine the full, or “actual” delivery of the commodity. Poloniex, in turn, has responded by saying that their business practices of providing cryptocurrency exchange and margin trading do not fall under this stipulation.

Poloniex Makes a Case for Constructive Bitcoin Regulation

Due to the unique, abstract nature of cryptocurrency, determining when an “actual delivery” occurred is grey in relation to the black and white delivery of traditional commodities such as wheat or oil.

The CEA, enacted initially in 1936, states, “physical… delivery [of] the entire quantity of the commodity purchased by the buyer, including any portion of the purchase made using leverage, margin, or financing.”

While the blockchain is time-stamped, delivery of cryptocurrency itself to customers is the main question in play here. Poloniex, however, argues that the cryptocurrency at hand is delivered to the recipient immediately after the completion of an order. Whether these transactions are traditional or for lending or margin trading, the recipient takes possession, ownership, and legal control of the cryptocurrency as soon as an order is completed.

While it seems that this would free such services from this particular regulatory obligation, such questions will have to be answered in court.

Speaking to the difficulty faced by many organizations navigating the murky regulatory waters in the space and the subsequent need for further clarification, Poloniex’s press release states:

“This privilege isn’t without its challenges, because we are operating in an emerging space against a backdrop of regulations honed and crafted for yesterday’s technology — the bygone era of analogue trading. As stakeholders, stewards, and charter members of a nascent technology, it is our collective responsibility to respectfully request for laws that make sense for this new technology.”

Do you think Poloniex is right? Let us know in the comments below.


Images courtesy of Hedge Think, Poloniex.

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Poloniex Seeks Regulatory Clarity From CFTC Following Allegations

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Čvn 07

Industry Report: Is Security in the Finance Sector Too Weak?

Source: bitcoin

Bitcoin Industry Report

A Deutsche double-debit; Poloniex strikes “out” for a short while; and ransomware isn’t as profitable as people think. Are these technical glitches and criminal hackers seriously threatening security in the finance sector? Take a gander at the stories below.

Also read: Industry Report: PayPal Gets Into the Bitcoin Game

DEUTSCHE BANK: DO GLITCHES LEAD TO INSECURITY IN THE FINANCE SECTOR?

Several thousand customers at a Deutsche Bank have become the victims of a double-debit. In other words, they were charged twice! The first charge occurred June 1, and the other on June 2, resulting in double rents, double utility bills, just about double everything!

Naturally, a lot of people are unhappy, and analysts are proclaiming that there’s nothing normal about the situation. While mistakes have occurred in the banking sector before, blunders of this nature are relatively rare.

Several customers recently found themselves in the negative as a result of the debiting, and are unable to withdraw funds from ATMs. Mobile and online apps have also been affected.

A Deutsche Bank representative explained:

“We have noticed several customers are affected by this double charge. Customers can rest assured these balances are not effectively debited from their account, but only represent a visual bug in the software. We are investigating the cause of this issue, which has affected the majority of our clients in Germany.”

POLONIEX

 

Account holders with Poloniex were dealt a scary blow when the exchange platform experienced an outage that left a lot of people in the dark and unable to gain access to their accounts.

While Poloniex had issued a statement ensuring that everyone’s funds were safe and sound, several digital currency traders were feeling the frustration, to say the least.

Poloniex stated on Twitter:

“There is a widespread datacenter outage affecting connectivity of several servers. Coins are safe.”

The exchange later issued a new statement via social media, explaining:

“All functionality has been restored.”

Users can now gain access to their accounts once again and get back to their “trading ways,” but after experiences with Mt. Gox, Cryptsy and MintPal, it’s not unusual to see a little fear from customers.

Poloniex has since calmed that fear, and all operations are back to normal.

RANSOMWARE

Is ransomware that effective? Not really, according to a new study by Flashpoint.

After studying Russian ransomware operations for five months, it is estimated that the highest ranking officials in the ransomware world are making just under six-figures each. Not much considering ransomware’s notorious reputation.

Several return funds are often used to organize campaigns in the first place or hire partners. Apparently, criminals don’t like to work alone, and the costs of hiring an entire team can be quite staggering. In fact, affiliates only take about 40 percent of the proceeds, more often than not.

Furthermore, in recent years, ransomware have become more willing to accept bits of data loss rather than fork out their hard-earned dough, cutting down on hackers’ revenue even more.

The monitored operations only took home about 30 payments of $300 USD. At the end of the day, despite all that hard work and effort, not a lot of money wound up in initiators’ hands.

Know any stories that should be included in our industry report segments? Post your thoughts and comments below!


Images courtesy of seekingalpha.com, Poloniex, Wired.

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Industry Report: Is Security in the Finance Sector Too Weak?

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Čvn 06

Poloniex Exchange Confirms Funds Are Safe Despite Outage

Source: bitcoin

Bitcoinist_Datacenter Outage

Popular cryptocurrency exchange Poloniex is currently affected by an unexpected outage. According to the company’s social media accounts, a datacenter outage is to blame. All coins are safe, though, which is the most important news.

Also read: Chinko Project Asks Reddit How To Best Spend Bitcoin Donations

It is not the first time. Bitcoin companies are dealing with downtime these days. Just yesterday, BitGo was dealing with a severe DDoS attack, which made their services inaccessible. Moreover, all of the companies relying on their infrastructure were affected by this attack as well.

Temporary Issue Affects Poloniex Servers

But in the world of exchanges, things are very different. Every time a platform goes down temporarily, there is a significant cause for concern. Cryptocurrency enthusiasts have been burned in the past when exchanges suddenly went down or disappeared.Strangely enough, this usually seems to happen to some of the largest exchanges in the world at that time.

The collapse of Mt. Gox was the first major shock wave to hit the Bitcoin world many years ago. Ever since platforms such as Cryptsy and MintPal were all forced to shut down as well. Smaller exchanges have seen their fair share of data breaches and hacks too, which puts the community on edge every time there is a temporary outage.

Poloniex is the largest altcoin exchange in the world today, as they continue to dominate nearly every alternative cryptocurrency trading market. Especially Ethereum and The DAO tokens are seeing a lot of daily trading volume on these platforms. But now that Poloniex is temporarily offline, a lot of traders are panicking and show concerns over their funds.

Luckily, it looks like these worries are unfounded, as the Poloniex Twitter account states:

For the time being, it is unclear as to how long this outage may take, and what the potential consequences could be. While it is good to see Poloniex confirm all user funds are safe, users will remain edgy until they can access their accounts once again. It is positive to see the company warn people on social media, though, to avoid most of the panicking.

Do you have funds stored in Poloniex wallets, and if so, which currencies do you trade? Let us know in the comments below!

Source: Twitter

Images courtesy of Poloniex, Shutterstock

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Poloniex Exchange Confirms Funds Are Safe Despite Outage

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