Malta Bitcoin Schizophrenia: Government and Banks Send Mixed Signals

Malta Bitcoin Schizophrenia: Government and Banks Send Mixed Signals

Malta Financial Services Agency (MFSA) has issued its Discussion Paper on Initial Coin Offerings, Virtual Currencies and related Service Providers, “to present to the industry a proposed policy to be adopted by the MFSA for the regulation of the ICOs, [cryptocurrencies] and service providers involved in ICO and/or other VC activity.” It’s a welcome sign for the country’s bitcoiners after its oldest bank effectively banned all bitcoin transactions. Clearly there is a tension between Malta’s legacy financial sector and, perhaps ironically, a government eager to help usher in a new financial future.

Also read: Malta’s Prime Minister Says Europe Should Become the Bitcoin Continent

Malta Bitcoin Schizophrenia: Government and Banks Send Mixed Signals

Malta and its Crypto Identity Problem

MSFA is the country’s main financial regulator, and it appears to be seeking guidance on how to proceed with financial innovations, be they initial coin offerings (ICOs), cryptocurrencies (referred to as virtual currency or VC), and blockchain technology. It’s a rare chance for a nascent industry to have a say in regulating itself.

The stated aim of the MSFA paper is “to devise a policy framework that supports the innovation and new technologies for financial services in the area of VCs,” it declares, noting it is keeping an eye on “ensuring effective investor protection, financial market integrity and financial stability.”

Malta Bitcoin Schizophrenia: Government and Banks Send Mixed Signals

The Republic of Malta is a picturesque Mediterranean archipelago just south of Italy, home to under half a million citizens. It’s the smallest nation in the European Union.

“The consultation is open from 30 November 2017 until the 11 January 2018,” the MFSA announcement concluded.

This is a sea change from the regulator, as just this summer it warned against cryptocurrencies. Reacting to the first crypto ATM in the country, it stated: “Unlike traditional money, acceptance of payment in virtual currency depends entirely on the voluntary consent of the recipient. Furthermore providers of services in relation to virtual currencies are currently neither regulated by law nor authorised by the MFSA,” Times of Malta reported at the time. “You should not keep large amounts of money in [bitcoin] and ensure you keep it safe and secure,” the agency said.

Malta Bitcoin Schizophrenia: Government and Banks Send Mixed Signals

Bank of Valletta Snubs Bitcoiners

This week the country’s oldest bank, Bank of Valletta (BOV), halted all cryptocurrency transactions. “A bank representative I spoke to was very friendly but unable to give me any more information,” a customer complained. “They just said they were informed that the bank’s policy had changed.”

Malta Bitcoin Schizophrenia: Government and Banks Send Mixed Signals

BOV even went so far as to reverse SEPA transactions. Times of Malta reported an official spokesperson as saying its prohibition has to do with “risk appetite, regulatory directions and the exigencies of its correspondent banking network.”

Curiouser still is how the government seems to be reassuring local bitcoiners that blockades are just a phase. Its parliamentary secretary, Silvio Schembri said such blocks and banks are “short term,” and as such should be eased once official policy is in place.

If that wasn’t enough, Malta’s Prime Minister, Joseph Muscat, earlier in the year spoke glowingly of bitcoin, saying in effect Europe should evolve into a “bitcoin continent.” His administration was a first to develop and approve a blockchain program as well. The Office of the Prime Minister has also stated it wants to issue a mock cryptocurrency test as a way to evaluate regulations going forward.

“Somewhat ironically, the government’s 25 per cent share in BOV makes it the bank’s largest shareholder,” the Times noted.

What do you think of Malta’s government and banks confliction on bitcoin? Tell us in the comments below!


Images courtesy of: Pixabay, blogspot, LinkedIn, BOV. 


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Source: Bitcoin News

New $100 Million Cryptocurrency Hedge Fund to Use XRP

New $100 Million Cryptocurrency Hedge Fund to Use XRP

TechCrunch and CrunchFund founder Michael Arrington has announced he is going all in on cryptocurrency investments with a new hedge fund called Arrington XRP Capital. As the name suggests, the fund will be managed in Ripple’s XRP but it will invest in a wide variety of cryptocurrency assets and Initial Coin Offerings (ICOs) as well as private equity offerings.

Also Read: Bitfinex Faces Further Scrutiny Over Tether Liquidity Concerns

$100 Million in XRP Investments

New $100 Million Cryptocurrency Hedge Fund to Use XRPAccording to Arrington, the $100 million cryptocurrency hedge fund has commitments from investors for over $50 million already, and they plan to begin trading in the next few weeks.

Other than the founder, two additional partners in the venture are former CEO of TechCrunch Heather Harde and veteran technology executive Geoffrey Arone.

This move is another strong indication of just how much cryptocurrency is recently becoming a mainstay in Silicon Valley as well as among established venture capitalists.

Why XRP?

New $100 Million Cryptocurrency Hedge Fund to Use XRPBesides being denominated in XRP, the new fund will accept investment funds and make redemptions in the cryptocurrency as well pay fees and salaries out in XRP. This is despite the fact that it doesn’t have a commercial relationship with Ripple and they are not investors in the fund, Arrington said.

In his announcement, the CrunchFund founder only explains the choice of the cryptocurrency for its advantages over ‘ancient fiat methods’ for cross-border currency transfers, asserting that traditional means are too slow and laden with fees.

Asked specifically about the choice of the cryptocurrency at the Consensus conference he elaborated that: “We think XRP is a particularly useful currency because of the transaction times.” Arrington also added: “I think investors are maybe heavier in bitcoin and ether than they should be.”

At the bottom line, the TechCrunch founder seems very bullish on the cryptocurrency ecosystem, predicting that the overall market cap will rise from around $300 billion to trillions of dollars and signalling that he intends to spend the rest of his career in this field.

Are bitcoin transaction times are a critical factor for further adoption? Share your thoughts in the comments section below!


Images courtesy of Shutterstock


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Source: Bitcoin News

In case you missed it… now the U.S.-China trade war is heating up

The U.S.-China trade war is real.

This week, the U.S. Commerce Department launched an investigation into aluminum imports from China – worth around US$600 million annually.

What’s more, the Commerce Department self-initiated this investigation (meaning, no U.S. company requested an investigation) – the first time it’s done this since 1991. So while the figure is small, the symbolism is big.

And this is just the latest trade investigation the U.S. has launched against China…

In September, the U.S. Trade Representative (USTR) began a “301” investigation into whether China’s intellectual property rules and practices are unfairly disadvantaging U.S. firms.

I think these investigations are likely just the beginning…

The U.S. is taking an aggressive approve to trade

As we’ve written about before, U.S. President Donald Trump has taken a “Fortress America” approach to global trade. Trump has led the U.S. into a sharp shift away from globalisation – for example, by promising to build a wall on the U.S./Mexico border and making it more difficult for people from certain countries that happen to be majority Muslim (while omitting from the black list those countries with which the Trump family has extensive business interests) to enter the U.S.

And one of Trump’s first acts as president was to pull the U.S. out of the Trans-Pacific Partnership (TPP) – a 12-country deal that would encompass around 40 percent of total global output.

Trump has also been promising to get into a trade tussle with China since the presidential campaign… and it’s relatively easy for him to keep this promise.

It’s widely assumed the 301 investigation will find China at fault in several areas. It’s also likely that China will not make major concessions to the U.S. When China and the U.S. fail to reach an agreement, Trump will likely launch major tariffs against Chinese imports next year.

What’s behind this? Well, Trump is an economic nationalist… and it’s one of the few campaign promises that he can make good on.

One possibility is that Trump is using trade restrictions to try to force China to do more to contain North Korea’s nuclear ambitions. You see, China is an important trade partner with North Korea. So it’s a crucial party to de-escalating tensions with North Korea. And the U.S. may be implicitly threatening sanctions if China doesn’t step up pressure on North Korea.

But you can bet China’s government will fight back against any restrictions.

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What could happen next

With the U.S. retreating from globalisation, the door is open for China to take the reigns instead.

One of the most important benefits of globalisation is free trade. And China has made it clear that it will be happy to replace the U.S. in any potential trade deals – most notably in the wake of the dissolution of the TPP.

At least two other proposed trade deals, the Regional Comprehensive Economic Partnership (RCEP) and the Free Trade Area of the Asia-Pacific (FTAAP), could help bind Asia more tightly together – only with China, not the U.S., as the glue.

And America’s shift inward will have other implications beyond trade. It also means that China’s efforts to deepen its political and economic influence throughout the world will be made all the easier.

For example, China’s One Belt One Road (OBOR) initiative is a large-scale development and infrastructure programme announced by China in late 2013.

In short, China wants to become a major investor – with strings attached – through Asia and beyond. Spanning the breadth of Asia into Europe, the OBOR initiative incorporates around 60 countries, which account for a third of global GDP and around 60 percent of the global population.

And China says it will invest US$4 trillion into OBOR initiatives, although this could be over an extended period of time.

OBOR is a way that China can cement its strategic interests across a huge swathe of Africa, Central Asia and Eastern Europe at the same time.

While China is doing this… it’s meanwhile seeking to make up for lost ground in technology. That’s what the U.S. is upset about.

These are just a few examples of the slow by inexorable shift of the global political and economic centre, from west to east. (We’ve written more about this shift here.) And the looming U.S. trade war with China will likely only accelerate this shift.

Good investing,


Kim Iskyan
Publisher, Stansberry Churchouse Research

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Source: Stansberry

This Week’s All-Time High Brings Massive Bitcoin Exchange Outages

This Weeks All-Time High Brings Massive Bitcoin Exchange Outages

November 29 was an exciting day if you were watching bitcoin prices swing back and forth with quite a bit of turbulence. The price of bitcoin touched an all-time high of $11,395 across global exchanges. Then, about an hour or so later, the price went down hard to a low of $9250 on some trading platforms. Although some exchanges had significant operational issues according to upset customers, the Down Detector, and the trading platform’s own website status pages.

See also: Circle Financial Plans to Launch a New Investment App Next Year

Multiple Cryptocurrency Exchanges Suffer From Website Outages and Service Issues

Cryptocurrency exchanges had some difficulties on November 29 as the price had wild and tumultuous price swings all day long. After the big spike and the start of the dip, customers started venting on forums and social media complaining about trading platforms and outages. The forum /r/bitcoin started a megathread dedicated to exchange outages. “Please discuss exchange outages here instead of everyone submitting screenshots of a broken website,” pleaded the subreddit moderator.

Many Bitfinex customers complain that their positions were liquidated on November 29. The Bittrex exchange says they had issues on Wednesday as well.

According to multiple reports, exchanges such as Coinbase, GDAX, Gemini, Bitstamp, Kraken, Bitfinex, and others had issues with their websites during the day. Traders complained of downtime during the dip, margin trading liquidations, and flash crashes. For instance, the trading platform Gemini has a whole page report on multiple issues of “degraded performance” during the day.

“We have received a few messages where customers see a ‘504 Gateway Time-out’ message,” explains the exchange status page.

We are implementing a mitigation fix due to an enormous influx of web traffic. We are monitoring and will let you all know once we are back up and running. Thank you for your ongoing patience.

This Weeks All-Time High Brings Massive Bitcoin Exchange Outages
These issues were posted to the Coinbase, GDAX, and Gemini status pages.

Coinbase and GDAX Experience Downtime

Another popular cryptocurrency platform that had issues during the day was Coinbase, and its sister company GDAX also had multiple problems with website operations.

“A portion of customers may be unable to access Coinbase — We are working to restore access to all users,” explained the company. Further, the company’s trading engine GDAX also suffered technical difficulties.

“We are currently investigating performance issues and downtime on the web app and REST API,” said the GDAX on November 29.

Kraken and Bitstamp Outages

Outages also took place on Kraken, as the website Down Detector reveals: the exchange had issues from 8 am to 9 pm EDT. There are multiple comments on the portal of Kraken customers upset with the downtime. Additionally, at the same time Down Detector had recorded some outages that happened over at Bitstamp. The European exchange had over 140 reports of outages between 11 am to 8 pm according to the Down Detector. Bitstamp outages were reported in the U.S., the Czech Republic, Germany, Holland, and many other areas across Europe. The trading platforms Poloniex and Bittrex also had customers who complained about website performance on Wednesday. 

This Weeks All-Time High Brings Massive Bitcoin Exchange Outages
The Down Detector website recorded lots of outages on November 29 at Kraken and Bitstamp as well.

Exchange Downtime and Margin Losses Show the Industry Has Significant Challenges

Throughout the day while exchanges had severe technical difficulties and outages, bitcoin’s price rapidly went from $11,395 and dropped 17 percent following the spike. After that bitcoin crossed the $10-10.5K range multiple times, and again fell to the $9600 territory. Even worse margin traders who utilize the exchange Bitfinex lost a lot of money according to many reports. When visiting the Reddit forum /r/bitfinex many traders are very upset with the trading platform’s performance on November 29. According to the company’s support page, the trading engines margin call limits should stop serious losses. The support page states;

When a position is force liquidated, the system places a limit order at the zero-equity price (rather than simply executing a market order). We do this to prevent a liquidated position creating a negative account balance for the user due to slippage during highly volatile market periods. 

However, a lot of Bitfinex traders say the company’s margin call safety valve did not save their accounts and there are countless posts of people claiming they were forced liquidated.

One company who helps provide exchange infrastructure support to cryptocurrency trading platforms wants to prevent these types of market oddities. The firm Alphapoint and its co-founder, Igor Telyatnikov, believes digital asset infrastructure outages are a problem if the technology gains a more considerable influx of mass adoption.

“Today’s incident highlights the challenges in this space as it continues to mature and attract institutional money,” Telyatnikov explained. “We need a more robust infrastructure for institutional-grade needs.”

What do you think about the massive exchange outages that plagued customers on November 29? Let us know what you think in the comments below.


Images via Shutterstock, Twitter, GDAX, Coinbase, Gemini, and the Down Detector.


Do you agree with us that Bitcoin is the best invention since sliced bread? Thought so. That’s why we are building this online universe revolving around anything and everything Bitcoin. A forum, and a casino, a pool and real-time price statistics.

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Source: Bitcoin News

China’s Financial Channel Reports Huobi Violates Spirit of PBOC’s Document

China's Financial Channel Reports that Huobi Violates the Spirit of the PBOC’s Document

China’s Financial Channel (CCTV-2) aired a special bitcoin documentary this week to analyze reasons behind the recent price rally. The program invited Li Cangyu, financial columnist and Wan Zhe, chief economist at China National Gold Group Corp. as commentators who believe that Huobi has undoubtedly violated regulations on cryptocurrency services. 

Also Read: South Korea Outlines Proposed Legislation for Cryptocurrency Exchanges

Does Huobi Violate the Spirit of the PBOC’s Document?

Earlier this November, CCTV journalist reported that many OTC platforms don’t have any KYC requests, which leaves room for illegal activities. The latest documentary exclusively mentioned that Huobi and Huobi.pro have no legal base to provide RMB-related OTC services.

China's Financial Channel Reports that Huobi Violates the Spirit of the PBOC’s Document

Log-in to Huobi and one can see that they still use RMB to measure bitcoin and altcoins. At the front page of Huobi.pro, there are a large banner reading “buy coins with RMB, three steps only” along with a detailed guidance teaching newbies how to register and trade with RMB.

China's Financial Channel Reports that Huobi Violates the Spirit of the PBOC’s Document
Li Cangyu

Commentator Li Cangyu believes that this is obviously a breach of the PBOC’s notice. “The PBOC had made it clear this September that crypto platforms must not provide services between RMB and tokens, including price bidding or middleman service for the exchange of tokens or cryptocurrency,” he said. “I really don’t understand why they put that on their websites.”

When the program aired, many users dashed to Huobi.pro to either withdraw coins or cash out, worrying that the platform will be shut down again.

Why People Buy Bitcoin?

China's Financial Channel Reports that Huobi Violates the Spirit of the PBOC’s Document
Wan Zhe

Mainstream media tend to be negative about bitcoin. They often report bitcoin as a tool for money laundering and speculation. But as bitcoin price keeps rising, more people are showing interest in it. Wan Zhe thinks there are three main factors at play.

First, as the stock market is losing traction, people are looking for alternative investments to store their assets and thus switch to bitcoin. Second, though China is tough on the crypto industry, other governments like Japan, Korea and some small countries are friendlier. This makes investors optimistic about bitcoin’s future. Third, as more merchants accept bitcoin and big enterprises support the blockchain technology, users hold the belief that bitcoin will become a mainstream currency.

Uncertainties Hanging Over Bitcoin

The documentary ended with some big question marks regarding bitcoin.

Will bitcoin remain decentralized? Wan Zhe explained that mining has become centralized as top mining pools and miners are all based in China. And as individual mining is not so profitable, bitcoin mining might be monopolized by some giant companies in the future.  Will users still support it if decentralization were weakened?

Will bitcoin evolve into a global currency? Though bitcoin itself is not a bubble, but it contains many bubbles, which makes it far less competitive to fiat money. Li Cangyu noted that the issuance of a national currency is a symbol of sovereignty and economic decision-making freedom. He believes that no governments will give up these to use bitcoin.

When will the bitcoin price crash? In the 1720s, Isaac Newton lost 20,000 pounds due to his speculation in the South Sea Company stock. He initially invested around £3,500 and sold out when he doubled his money. But he was induced to get back into the market at the height of the bubble. Later Newton said: “I can calculate the motions of heavenly bodies, but not the madness of people.”

Li Cangyu cited Isaac Newton’s story to warn bitcoin investors that nobody knows who will be the last participnats. “They think they are on a sure thing only to have it blow up.”

Do you think Li Cangyu have a point? Tell us in the comments below!


Images courtesy of: Shutterstock, CCTV-2


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Source: Bitcoin News

‘Big Four’ Firm PwC’s Hong Kong Office Accepts Bitcoin

'Big Four' Firm PwC's Hong Kong Office Accepts Bitcoin

Another ‘Big Four’ firm joins the bitcoin revolution as the auditing corporation Pricewaterhousecooper’s (PwC) Hong Kong office accepted a payment in bitcoin according to the Wall Street Journal. The accountancy corporation follows the lead of the Deloitte and Ernst & Young (EY) offices that have already started accepting bitcoin for financial services.

Also read: Bitwala: ‘Nobody Uses Altcoins,’ Bitcoin Is the Top Crypto

PwC Hong Kong Accepts Bitcoin for Financial Consultancy Services

'Big Four' Firm PwC's Hong Kong Office Accepts Bitcoin PwC is a well-known auditing firm that offers multinational financial services with offices all around the globe. The company is currently the second largest ‘Big Four’ auditing company in the world and has held this record for the past seven years. This week the Wall Street Journal reports that the company’s Hong Kong office has accepted bitcoin as a payment for consultancy services. PwC has been interested in digital currency solutions and blockchain technology for the past three years. The accountancy firm’s Asia-Pacific chairman, Raymund Chao, says the move is a milestone for the company.  

“It is also an indication that bitcoin and other established cryptocurrencies have now developed into more broadly accepted forms of settlement,” explains Chao.

'Big Four' Firm PwC's Hong Kong Office Accepts Bitcoin
PwC Hong Kong.

PwC Follows the Other ‘Big Four’ Firms That Have Embraced Bitcoin

The company is a touch behind its competitors as both Deloitte and EY have offices that accept the cryptocurrency and bitcoin ATMs as well. For instance, at Deloitte’s Toronto office the company installed a bitcoin ATM in the lobby and the company uses it to show clients. Deloitte’s Iliana Oris Valiente told news.Bitcoin.com back in September of 2016 that “using bitcoin is vital to understanding the blockchain.” Then in November the firm EY announced its Switzerland branch was accepting bitcoin for financial management services, and also installed an ATM in the main building. The other ‘Big Four’ firm KPMG has not moved towards the cryptocurrency bitcoin just yet, but has been involved with blockchain research.

‘Cryptocurrency Represents the Beginning of a New Phase of Technology-Driven Markets’

PwC joining in on the bitcoin fun is no surprise as the company has applauded the benefits of cryptocurrency for quite some time.

“[Cryptocurrency has] gained acceptance from a critical mass of investors, technologists, regulators, merchants, entrepreneurs, and consumers,” explains PwC.

In fact, in our view, cryptocurrency represents the beginning of a new phase of technology-driven markets that have the potential to disrupt conventional market strategies, longstanding business practices, and established regulatory perspectives – all to the benefit of consumers and broader macroeconomic efficiency.

What do you think about PwC’s Hong Kong office accepting bitcoin? Let us know in the comments below.


Images via Shutterstock, PwC, and PwC’s Hong Kong office. 


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PR: Spectiv VR Featured on Fox Business’ Innovations Aired to over 100mm Viewers: Pre-Ico Dec. 8th

Spectiv VR Featured on Fox

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

Showcasing Advances in Virtual Reality

DMG Productions uncovers the latest technological breakthroughs in virtual reality.

Jupiter, FL — In an upcoming episode of Innovations w/Ed Begley Jr., the award-winning producers will explore the revolutionary world of virtual reality. This is slated to air first quarter 2018 on FOX Business. Check your local listings for more information.

With the growing development of virtual reality, previously unreal possibilities have become realities. As such, many speculate virtual reality will become the next revolutionary tech boom. This segment of Innovations will focus on the technology behind Spectiv, a platform that enables users and organizations to stream their unique virtual reality experiences to the world.

The Signal Token (SIG) Protocol is designed to decentralize the buying, selling, and rewarding of attention across media platforms by removing centralized intermediaries from advertising transactions.

“Spectiv’s mission is to make the virtual reality experience for everyone through community-driven VR streaming. We feel VR is one of the most exciting technological innovations ever, but the industry is experiencing some short-term friction in adoption. Spectiv is directly addressing this challenge by integrating a decentralized advertising system that will accelerate mainstream VR adoption,” said Dylan Senter, CEO and Founder of Spectiv. “He continued to say, “we are achieving this through our Signal Token Protocol, a blockchain solution that directly connects advertisers with content publishers, viewers, and curators, and are very excited to present our vision for the future of VR on the Innovations Series.”

Spectiv will act as the first adopter for this protocol, generating real-world application data to support future adoption by other media platforms.

“The cutting-edge technology behind the SIG Protocol will change the space of virtual reality as we know it,” said Michael Devine, Senior Producer for the Innovations series. “We look forward to enlightening the public about this technology.”

Signal Token Protocol

Spectiv is the creator and first adopter of the Signal Token Protocol. This protocol decentralizes the interaction between advertisers, content publishers, viewers, and curators. Using the Signal Token Protocol, advertisers can initiate Ad Campaign Smart Contracts that autonomously reward users for driving attention to advertisements. Every ad view and click that occurs is communicated to the Ad Campaign Smart Contract, triggering a token reward disbursement. This is an open-source protocol built for any media platform to implement. Spectiv will pioneer this protocol through its own media platform, Spectiv VR. This will provide a crucial real-world foundation for other platforms to learn from and build upon.

Token Purchasing Opportunities

Signal Tokens can be purchased in our Pre-ICO December 8th 2017, with early bird bonus opportunities for qualifying participants. The sale will have a maximum expected receipt of $40 million in Signal Tokens, priced at 650 Sigs/Eth. This open sale will be hosted at www.spectivvr.com. Email subscribers will receive early access to the token sale and exclusive 60% token bonus, so make sure to sign up to our email list.

About Innovations and DMG Productions:

Innovations, hosted by award winning actor Ed Begley, Jr., is an information-based series geared toward educating the public on the latest breakthroughs in all areas of society. Featuring practical solutions and important issues facing consumers and professionals alike, Innovations focuses on cutting-edge advancements in everything from health and wellness to global business, renewable energy, and more.

DMG Productions (responsible for creating the Innovations show) includes personnel specialized in various fields from agriculture to medicine, independent films to regional news and more. Field producers work closely with experts in the field to develop stories. This powerful force enables DMG to consistently produce commercial-free, educational programming that both viewers and networks depend on.

Contact Email Address
Dylan@spectivvr.com
Supporting Link
www.spectivvr.com

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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Source: Bitcoin News

Court Ruling Grants the IRS Personal Data of 14,000 Coinbase Users

Court Ruling Grants the IRS Personal Data of 14,000 Coinbase Users

America’s Internal Revenue Service has gone fishing. Its target? Every single Coinbase user who ever placed a $20,000 trade. The huge dragnet exercise, spanning 2013-2015 and incorporating over 14,000 users, was awarded by a court yesterday, November 29. This is despite the best efforts of America’s largest bitcoin broker, which has fought back against what it sees as a shameless data grab and privacy violation. In a bid to save face, Coinbase has claimed a “partial victory” in its running battle with the IRS.

Also read: Nasdaq to Debut Bitcoin Futures by Mid 2018

Deep Sea Fishing on a Taxpayer Mission

Court Ruling Grants the IRS Personal Data of 14,000 Coinbase UsersThere’s no such thing as a quiet day in bitcoin. The last 24 hours has witnessed record-breaking trading volume, widespread exchange outages, all-time-highs, the largest red candle ever witnessed on a BTC chart and the fastest recovery in dollar terms ever seen. Much of that drama circled around Coinbase, a broker which dominates the bitcoin market, both in the U.S. and abroad.

Whilst dealing with unprecedented demand, with traffic levels hitting 8x their peak from June, the platform – whose iOS app has surged into the top ten, passing Netflix and Spotify – has had its hands full fighting an ongoing dispute with the IRS. Coinbase has been pushing back against what it believes to be an unjustified investigation into the actions of hundreds of thousands of its users.

 

A Pyrrhic Victory for Coinbase

In a blogpost filed November 29, Coinbase claimed a “partial victory” over the IRS, though many commenters would be less charitable, and award the latest round to the taxman. Coinbase was nevertheless keen to stress reasons to be happy, noting:

Thanks to Coinbase’s efforts, more than 480,000 customers’ records were preserved from disclosure. This is a 97% reduction in the number of customers impacted by this summons. Second, the quantity of data we must produce for the approximately 14,000 customers who remain in scope has been significantly reduced.

In what could be interpreted as sarcasm, CEO Brian Armstrong tweeted the following:

Court Ruling Grants the IRS Personal Data of 14,000 Coinbase Users

The Coinbase case stems from tax authorities realizing there was a woefully low number of tax returns being filed that included gains due on virtual currencies, despite their soaring popularity. To atone for this reporting black hole, the IRS took it upon itself to do some digging, and by digging read: investigate the finances of half a million Coinbase customers. In defense of the exchange and its customers, cryptocurrencies, as an emerging asset class, were vaguely defined at the time, and it would be unrealistic to have expected Americans to include them in their tax returns en masse.

The latest Narrow Summons request now pertains to 14,355 account holders who bought, sold, sent, or received more than $20,000 between 2013 and 2015. The IRS filing specifies “far fewer, but still more than 10,000, Coinbase account holders.”

Gross Governmental Overreach

Court Ruling Grants the IRS Personal Data of 14,000 Coinbase UsersYesterday, a California court ruled in the IRS’ favor, almost a year after the case was first filed. While Coinbase has tried to spin the ruling as a victory, it may prove to be a pyrrhic one that will leave the bitcoin broker licking its wounds and counting the cost. Financially Coinbase is fine, with record customer numbers, trading volume, traffic, and every other metric that constitutes a thriving business.

The greatest loss the company faces however is one of trust. Despite Coinbase struggling valiantly against the IRS, it will now be forced to hand over a swathe of customer data. Had a similar request been granted spanning the present day, it would have effectively included every single customer who ever bought or sold more than 2 BTC at a time. Despite being accused of gross overreach, the IRS has remained undaunted. The court ruling sends out a clear warning to U.S. customers: buy or sell even moderate quantities of cryptocurrency, and the authorities will be watching.

Do you think the IRS has any right to demand the details of thousands of Coinbase customers? Let us know in the comments section below.


Images courtesy of Shutterstock.


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Source: Bitcoin News

Trump’s Federal Reserve Nominee: Cryptos “Don’t Really Matter Today”

Trump's Federal Reserve Nominee Under Oath: Cryptos "Don't Really Matter Today," "Not Big Enough"

President Donald Trump’s nominee for Chair of the Federal Reserve, current Board Governor Jerome “Jay” Hayden Powell, participated in the constitutionally mandated US Senate confirmation process by way of a hearing on 28 November 2017. Bitcoin and “cryptocurrencies are something we monitor very carefully,” Mr. Powell answered in direct questioning about current and future Fed policy toward decentralized currencies.   

Also read: After Mugabe, Zimbabwe Pushes Bitcoin to $17,875

Trump's Federal Reserve Nominee Under Oath: Cryptos "Don't Really Matter Today," "Not Big Enough"

Federal Reserve Under Oath about Bitcoin

Incredible valuations. Historic price rise. Mass adoption numbers. The Year of Bitcoin has achieved yet another official milestone: it is now a formal policy consideration by regulators of the world’s largest economy.

Tuesday afternoon in Washington, DC, Jay Powell sat before a sparsely attended, mostly pro-forma senate hearing. A current Fed governor nominated by President Obama to serve a 14 year term, Mr. Powell is widely considered to ease through to confirmation in the Republican-controlled upper body.

Georgia Senator, Republican David Alfred Perdue, Jr took asked the nominee a series of questions. Completely switching topics, he ended his line of thought with queries at the 1 hour and 35 minute mark about a subject sweeping professional finance circles: bitcoin.

Senator Perdue began, “We have another bubble that is some 4 to 5 times the size of the dot com bubble in the late 1990s, and that has to do with the cryptocurrencies like bitcoin,” he said.

Trump's Federal Reserve Nominee Under Oath: Cryptos "Don't Really Matter Today," "Not Big Enough"

Junior Georgia Senator Asks about Bitcoin

Mr. Perdue is junior senator from the Peach state, having been elected in 2014 to a six year office. His background include heading many businesses.

“Bitcoin’s market value now is bigger than all but 29 of the S&P 500 corporations in America,” he continued. “Assuming that this continues, and talking about that bubble, and the size and the growth of these cryptocurrencies, if that continues to grow … to what extent does that effect your ability to effect results from your typical monetary policy options that you typically have as a central bank?”

Nominee Powell answered, “You know, in the long, long run things cryptocurrencies of that nature could matter,” he said. When confirmed, Mr. Powell will be the 16th person to assume chairmanship of the Fed in its 103 year history.

“They don’t really matter today,” Mr. Powell said dismissively. “They’re just not big enough. They’re just not anywhere near close to enough in volume for it to matter for us.”

Senator Perdue then again made parallels between the 1990s dot com boom and bitcoin, implying Mr. Powell should see the same.

Bubble Fear

“There’s no question the valuations have gone up quite a lot in the last year or so. I don’t have a view on the appropriate level of the valuation, of course,” Mr. Powell explained.

Trump's Federal Reserve Nominee Under Oath: Cryptos "Don't Really Matter Today," "Not Big Enough"
Jay Powell

The price of bitcoin, as of this writing, has reached 10,000 USD on global exchanges, skyrocketing hundreds of percent in eleven months.

“From our standpoint, cryptocurrencies are something we monitor very carefully. We actually look at blockchain as something that may have significant applications in the wholesale payments part of the economy,” Mr. Powell expanded in his answer.

“It’s something we pay close attention to,” the Board Governor noted.

The Senator from Georgia then asked if the Fed were watching technologies used around the world and in companies such as Alibaba with regard to blockchain and cryptocurrencies.

“We are watching all of those technologies. It’s something we have to do, I think. It’s actually something that is kind of enjoyable and interesting,” Mr. Powell smiled.

What do you think of incoming Fed Chair’s comments? Tell us in the comments below!


Images courtesy of: Pixabay, imagur, Wiki Commons.  


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Central Bank Round-Up: Brazil & New Zealand Issue Statements, Cryptos are Assets or Securities in Canada

Central Bank Round-Up: Brazil & New Zealand Issue Statements, Cryptos are Assets or Securities in Canada

During November, several central banks addressed bitcoin and cryptocurrencies. New Zealand’s central bank has issued a statement seeking to educate citizens of the fundamentals underpinning cryptocurrencies, as well as the implications of such on monetary policy.  The senior deputy governor of the Bank of Canada has stated that cryptocurrencies comprise assets or securities, rather than currencies. Brazil’s central bank also addressed cryptocurrencies during November, issuing a warning to investors.

Also Read: 1 Million Yen, 100 Million INR – Bitcoin Sets New Price Milestones on International Markets

Reserve Bank of New Zealand Does Not Believe Cryptocurrencies Pose Existential Threat to Mainstream Financial Institutions

Central Bank Round-Up: Brazil & New Zealand Issue Statements, Cryptos are Assets or Securities in CanadaThe Reserve Bank of New Zealand (RBNZ) has published a paper on cryptocurrencies titled “Crypto-currencies – An introduction to not-so-funny moneys.” The 44-page document seeks to “increase public understanding these technologies, highlight some of the risks involved in using crypto-currencies, and discuss some of the potential implications of these technologies for consumers, financial systems, monetary policy, and financial regulation.” The document also details the fundamental underpinnings and history of cryptocurrency, and provides definitions for terminologies relevant to the industry.

The document states that “Crypto-currencies expand the mechanisms by which people can transact with each other, strengthening competitive pressures on payment systems providers.” Despite such, the RBNZ states that due to the “relatively small volume of transactions” conducted using cryptocurrencies, “These new payment mechanisms are unlikely to completely supplant traditional payment systems.” The document also emphasizes the “incompatab[ility] of “the (pseudo) anonymity… of crypto-currency” with credit issuance – concluding that such prevents cryptocurrencies from posing a threat to many functions of traditional financial institutions.

Canada Views Cryptocurrencies as Assets or Securities, Not Currency

Central Bank Round-Up: Brazil & New Zealand Issue Statements, Cryptos are Assets or Securities in CanadaEarlier this month, Bank of Canada’s senior deputy governor, Carolyn Wilkins, stated that “so-called cryptocurrencies actually aren’t currencies at all, they’re not money.” Speaking with Bloomberg, Mrs. Wilkins stated “If you look at standard monetary theory… this is really an asset, or a security. And so it should be treated that way, and in fact, that’s the way it’s treated in Canada.”

When asked specifically of ICO’s Mrs. Wilkins stated “I’m not a securities regulator, and it’s not the Bank of Canada’s role to comment on any specific ICO, but… these look more like securities to me than a currency and they should be regulated as such.”

Mrs. Wilkins also expressed enthusiasm for blockchain technology, adding “What is promising… is… the distributed ledger technology that underpins it, because it provides the opportunities to create efficiencies in financial markets and other places that could actually be beneficial to market participants, businesses, and households.”

The Banco Central Do Brazil Issues “Alert on [the] Risks Arising From Custody and Trading Operations of So-Called Virtual Currencies”

Central Bank Round-Up: Brazil & New Zealand Issue Statements, Cryptos are Assets or Securities in CanadaThe warning emphasizes the lack of protections afforded to investors choosing to trade cryptocurrencies, stating that virtual currencies “are not issued or guaranteed by any monetary authority.” Brazil’s central bank states that “the purchase and safekeeping of virtual currencies” exposes investors to “imponderable risks, including… the possibility of loss of all capital invested.”

Despite the dire tone of the warning, the document states that “the need to regulate [cryptocurrencies] has not been identified to date by international organizations”, adding that “In Brazil, for the time being, no significant risks are observed for the National Financial System.”

What do you make of the central banks’ statements regarding crypto? Share your thoughts in the comments section below!


Images courtesy of Shutterstock, Bank of Canada


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Source: Bitcoin News