Úno 16

Optioment Bitcoin Scam Triggers Europe-Wide Manhunt

· February 16, 2018 · 10:30 am

After possibly thousands of investors got burned by arbitrage-trading company Optioment last year, Austrian authorities have asked Interpol to help track down the fraudsters responsible for the Bitcoin scam.


Another Bitcoin Scam Burns Buyers

European authorities are on the hunt for criminals involved in defrauding thousands of individuals and losing over $100 million worth of investors’ Bitcoin.

According to reports, Optioment ran a now-defunct website while holding large-scale events in Austria — in which the company advertised itself as a “private Costa Rica-based Bitcoin fund” promising unrealistic returns. Law firm Lansky, Ganzger & Partner claims Optioment promised weekly interest payments upwards of 4 percent on long-term Bitcoin deposits, with the added incentivization of inviting new users.

Optioment apparently paid out returns on a timely basis at the beginning of its operation, which boosted investor confidence and encouraged users to reinvest in the scheme. Sometime around the massive bull run in November and December of last year, however, the returns stopped coming, and the fraudulent scheme collapsed.

Spokeswoman Christina Ratz told Bloomberg that prosecutors in Vienna are consolidating “hundreds of complaints” against the fraudulent company, and Die Presse originally reported that upwards of 10,000 individuals have been victimized, resulting in roughly 12,000 lost bitcoins — currently worth an estimated $118.5 million at the time of this writing.

Interpol

According to Bloomberg, no arrests have yet been made, but Interpol has been asked to investigate individuals in Denmark, Latvia, and Germany.

Reinforcing European Rhetoric

The hunt for Optioment’s operators comes at a time when some European countries are calling for a crackdown on cryptocurrency.

French Finance Minister Bruno le Maire and interim German Finance Minister Peter Altmaier have gone on record to state that cryptocurrencies are risky for investors and threaten long-term global financial stability.

British Prime Minister Theresa May has also expressed concerns over cryptocurrency’s criminal usage, stating that she is looking “very seriously” at cryptocurrencies “because of the way they are used, particularly by criminals.”

EU

Additionally, European Central Bank board member Yves Mersch has recently stated that cryptocurrencies are “not money, nor will they be for the foreseeable future.”

Most recently, the European Supervisory Authorities (ESAs) have also recently issued a press release warning consumers of the dangers associated with buying cryptocurrency.

Do you think scams like Optioment are permanently damaging the reputation of cryptocurrency in Europe and around the world? Let us know in the comments below!


Images courtesy of Wikimedia Commons/@Plani and Bitcoinist archives.

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Úno 11

New Jersey Cracks Down on Fraudulent Bitstrade

· February 11, 2018 · 7:00 am

Following the fallout from fraudulent Ponzi-scheme Bitconnect’s demise, New Jersey has officially ordered cryptocurrency investment entity Bitstrade to stop offering unregistered and fraudulent securities in the state.


New Jersey regulators have uncovered yet another fraudulent cryptocurrency investment company.

The announcement comes by way of Attorney General Gurbir S. Grewal and the Division of Consumer Affairs and has been ordered by the Bureau of Securities after an investigation found Bitstrade to be in violation of New Jersey’s Uniform Securities Law.

ponzi scheme

Bitstrade was found to have sold unregistered securities while guaranteeing upwards of 10 percent daily returns, despite lacking a proper registration to sell securities in New Jersey.

Bitstrade also failed to disclose what have been deemed “key material facts” to prospective investors, including an official address, the names of its executive officers, the company’s financial status, potential risks to investors, and how investors’ money is used. Attorney General Grewal stated:

The Bureau’s action today reinforces our commitment to protecting investors as they navigate the uncharted and largely unregulated domain of cryptocurrency-related investments. We want to make sure that investors tempted to cash in on the cryptocurrency rage aren’t being lured into sending funds to an anonymous internet entity without knowing where the funds are going or how they’ll be used.

A visit to Bitstrade’s official website indicates that all signs indeed lead to a Ponzi scheme.

The company claims to be registered in the United States and purports to guarantee “outstanding returns” by “working as an investment pool, collecting multiple lower value investments and grouping them into one single HUGE investment, using those funds to trade on the stock market”—without any actual information as to how they use investors money.

BitConnect Sued By 6 Investors Who Lost Over $700K

If it sounds too good to be true, it probably is. According to Sharon M. Joyce, Acting Director of the Division of Consumer Affairs:

What makes Bitstrade’s fraudulent offer potentially more harmful for unsophisticated investors is that cryptocurrency is virtually anonymous, so there is no recourse for investors to recoup their losses. We’re reminding investors to be extra vigilant about fully vetting what is being sold before investing with cryptocurrency.

The Bureau additionally found Bitstrade’s Redland, California and Scottsdale, Arizona addresses to be falsified.

According to Christopher W. Gerold, Chief of the Bureau of Securities, “Bitstrade is a prime example of a company seeking to capitalize on the cryptocurrency craze. Regulators, including the Bureau, are actively responding to fraudulent crypto-cloaked securities offerings.”

Bitstrade requires purchases be made with Bitcoin.

Do you think Bitstrade is a Ponzi scheme? Do you agree that state regulators should actively try to prevent individuals from investing in fraudulent companies? Let us know in the comments below!


Images courtesy of Bitcoinist archives.

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Úno 08

Cameron Winklevoss Predicts 40x Increase for Bitcoin ‘Someday’

· February 8, 2018 · 9:00 am

Bitcoin has come a long way since the time 10,000 coins were allegedly used to buy a pizza— and if you ask Bitcoin bull Cameron Winklevoss, the gold standard of cryptocurrency still has a long way to go.


‘It’s Actually a Buying Opportunity’

Today, one Bitcoin is worth just over $8,000 USD. But according to Cameron Winklevoss, investors can expect it to go up 40x “someday.”

Cameron made the bold prediction on Wednesday this week to CNBC at the Milken Institute’s MENA Summit while claiming Bitcoin is better than gold. He stated:

Taking bitcoin in isolation […] we believe bitcoin disrupts gold. We think it’s a better gold if you look at the properties of money. And what makes gold gold? Scarcity. Bitcoin is actually fixed in supply so it’s better than scarce … it’s more portable, its fungible, it’s more durable. Its sort of equals a better gold across the board.


By Winklevoss’ logic, the argument that digital gold is actually superior to physical gold means the total market capitalization of Bitcoin should match, if not surpass, that of gold. He explained:

So if you look at a $100 billion market cap today, now last week it might have been more like 200, so it’s actually a buying opportunity, we think that there’s a potential appreciation of 30 to 40 times because you look at the gold market today, it’s a $7 trillion market. And so a lot of people are starting to see that, they recognize the store of value properties. So we think regardless of the price moves in the last few weeks, it’s still a very under-appreciated asset.

Whether or not Bitcoin is better than gold has been an especially contentious debate as of late. The World Gold Council has even published a report which claims Bitcoin could undermine central banks.

Skin in the game

Of course, the twins’ view is not an unbiased one. Since both brothers hold a significant quantity of bitcoin, and recently became one of the first Bitcoin billionaires, they do have a skin in the game when it comes to the success of the world’s first cryptocurrency. 

Tyler Winklevoss has also come to Bitcoin’s defense against critics like J.P. Morgan CEO Jamie Dimon, Warren Buffett, and Goldman Sachs.

Dimon Nowhere To Be Seen

Dimon infamously called Bitcoin a “fraud,” while investing giant Buffett has claimed cryptocurrency “will come to a bad ending”—despite admitting he doesn’t really understand the technology. Goldman Sachs has even gone so far as to claim that most cryptocurrencies will drop all the way to zero.

“You know the criticisms are just a failure of the imagination,” said Tyler Winklevoss.

Do you agree with Camron’s prediction? Let us know in the comments below!


Images courtesy of Bitcoinist archives, Shutterstock

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Úno 07

This European Royal Family is Looking to Invest in Bitcoin

· February 7, 2018 · 9:00 am

The Crown Prince of Liechtenstein, a tiny country in central Europe, has expressed interest in investing in alternate asset classes, specifically Bitcoin.


Crown Prince Eyes King of Crypto

Nestled between Switzerland and Austria, Liechtenstein is a German-speaking micro-state headed by the Price of Liechtenstein, but most of the actual power is held by his son Crown Prince Alois. During the aftermath of the World War II, the once great family was forced to sell their stunning art collection to stay afloat.

Now, with their finances in check and the collection well into the process of being rebuilt, the family is looking to venture into new investments, something even as volatile as Bitcoin. He’s hoping that investing in this new digital economy will one day restore his family’s wealth.

Crown Prince Alois told CNBC:

Particularly with this whole new digital economy, it is something to look into more into in the future.

The Crown Prince acknowledged that cryptocurrencies were still extremely risky. However, the technology behind many cryptocurrencies, the blockchain, could be used to streamline some industries including Liechtenstein’s government operations.

He mentioned that the royal family did not have experts on hand to handle the murky waters of digital assets, but that could change in the future.

Big Players Stepping In

After Bitcoin’s insane bull run in the last few months, lots of companies and even some governments have started to take notice of Bitcoin and blockchain technology.

Several governments such as Japan and Venezuela have announced plans to develop their own state-sponsored digital currencies, while huge corporations like Facebook and Starbucks look to possibly integrate Bitcoin and other electronic currencies into their existing infrastructure for payments.

Registration Allows Access To 'Free-To-Use Cryptocurrencies'

People are quickly starting to realize that, despite the price swings, Bitcoin isn’t going away. And those who don’t pay attention to the revolution will be left in the dust.

The value of Bitcoin and distributed ledger technology is yet to be realized, and as more old money piles in we’ll be able to see where this goes.

What do you think about this announcement? Do you think other governments will follow suit? Let us know in the comments below!


Images Courtesy of Pexels, Wikipedia, teinteresa.es

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Led 22

Bitcoin’s Wall Street Combo Of Greed and Volatility

· January 22, 2018 · 7:30 am

The lack of volatility in global markets is leading investors to seek riskier investments with increased rewards. Cryptocurrencies, such as Bitcoin, are being used to feed this increased investor appetite. 


Financial Markets Bitcoin

Analysts at Deutsche Bank have asserted that there is a correlation between the price of Bitcoin and the volatility index (VIX). The analysts backed up their  argument saying that the first three weeks of 2018 so far show “correlation between Bitcoin and VIX has increased dramatically.”

The analysts go on to say:

The current ‘triple-low environment’ of low interest rates, low spreads, and low volatility has given birth to new asset classes like implied volatility (ETFs selling volatility), and cryptocurrencies.

Retail Investors Informing Institutional Investor’s Ideas Of Asset Sustainability

It appears to be a sign that investors’ risk appetites are growing as they veer away from the safer stocks and look to the large gains that are made in more volatile markets, such as those like Bitcoin and other more established cryptocurrencies.

CME Group to Launch Bitcoin Futures Trading

Masao Muraki,  Hiroshi Torii, and Tao Xu, Deutsche Bank global financial strategists, write:

Cryptocurrencies are closely watched by retail investors, affecting their risk preferences for stocks and other risk assets. Although institutional investors recognize that stocks and other asset valuations may have entered bubble territory (US equities’ average P/E is around 20x), they cannot help but continue their risk-taking. Now, a growing number of institutional investors are watching cryptocurrencies as the frontier of risk-taking to evaluate the sustainability of asset prices.

The correlation that the analysts highlight is that when volatility, as judged by the VIX, drops, then they are seeing the price of Bitcoin rise as investors seek potentially more lucrative investments.

The analysts conclude:

The result is that institutional investors, who are supposed to value assets using their sophisticated financial literacy, analysis, and information-gathering strengths, are actually seeking feedback about the market from cryptocurrency prices (which are mainly formed by retail investors).

Greed Is Good

Bitcoin Price markets

Steve Chiavarone of Federated Investors told CNBC’s Trading Nation that:

It’s the first sign of greed since the Great Recession, It’s indicative of rising risk appetites which will drive equity markets higher almost regardless of what happens with bitcoin.

These risk appetites are currently not being exercised in the world of traditional stocks but rather in the world of cryptocurrencies. However, Chiavarone is confident that whatever happens to Bitcoin and crypto in 2018,  investor appetites have nonetheless grown from their exposure to cryptocurrencies. As 2018 unfolds, we will see if money moves back to traditional stocks or remains with Bitcoin and other virtual currencies.

Is the correlation a sign of causation? Are retail investors’ risk profiles increasing and what will this mean for traditional markets? Let us know what you think in the comments below.


Images Courtesy of Bitcoinist archives and Pxhere.

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Led 09

Bitcoin Futures Speculation Allowed in Thailand

· January 9, 2018 · 6:30 am

While the rest of Asia scrambles to regulate cryptocurrencies, some remain open and even welcoming of the blockchain boom. An unlikely nation in the region to be convivial to new technology and innovation beyond state control is Thailand, which is currently in the throes of an ever-lengthening military dictatorship and associated power struggles.


It was reported in the Bangkok Post this week that the Securities and Exchange Commission (SEC) has said Thailand’s first bitcoin futures trading service offered by a securities company is legitimate but urged investors to apply caution due to high risks.

Thai Futures

According to Phillip Securities Thailand, investors would be allowed to speculate on Bitcoin via an international global derivatives trading service. Market regulators within the country are in consensus that the move is legitimate and can proceed. Similar futures contracts were offered last month by two large Chicago exchanges: CBOE and CME, though products in other countries have yet to get off the ground.

In a press release, managing director Low See Kiong stated:

Using bitcoin as an underlying asset on the CBOE and CME will lead to greater acceptance of bitcoin futures as they have reliable payment systems and are regulated by the US Securities and Exchange Commission.

He added that the futures were targeted towards experienced investors that did not want to buy the currency directly on crypto exchanges or from unlicensed brokers.

Open to Trading

The head of global markets at Phillip Securities Thailand told the Bangkok Post that customers wanting to trade Bitcoin futures must apply for the company’s global derivatives service, which will allow them to trade futures on 15 global futures markets, including CBOE and CME. However, investors will need to deposit money to cover their investment margin, and trading will be quoted in US dollars. In reference to margin covers, he added:

In principle, investors should prepare money as a buffer for price movement around 20-30% above the margin. The buffer might be lower for some, depending on the risk management of individuals. For example, if they have a strict policy to stop losses, the buffer may be lower than 10%.

Thailand has one primary crypto exchange offering Bitcoin and ten other altcoins directly in fiat and a few more obscure ones in Bitcoin. Junta leader Prayut Chan-ocha recently warned about the risks of crypto trading and advised that the public be educated about it before jumping in.

Will the rest of Asia open up or continue to crack down on crypto? Share your thoughts in the comments below.


Images courtesy of GoodFreePhotos, Pexels, and Bitcoinist archives.

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