Category: Bitcoin

India Can’t Regulate Bitcoin, Says Former Indian Bureaucrat

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India has been struggling with regulating cryptocurrencies for quite some time now mostly because of the strong aversion the governments has towards digital currencies but they are yet to ban any. Now, a former Indian top finance ministry official insists that bitcoin, as well as other cryptocurrencies, should be completely banned in the country.

Shaktikanta Das, who is a former secretary of economic affairs, believes that regulating bitcoin is going to be quite tough and thus the only feasible alternative would be to outlaw their use. Das headed the Indian government’s first panel that was set up in April 2017 in a bid to understand and recommend necessary regulations pertaining to cryptocurrencies. Currently, Das is a member of the 15th finance commission which has been tasked with reviewing the financial situation of the present government.

“Let us accept that it would not be possible to regulate it effectively. Because they will do transactions from their houses. You cannot enter every home to check what transactions are going on. So, I think this is a serious challenge, and this should not be allowed at all,” Das said.

The Indian government’s aversion to cryptocurrencies can be traced back to 2013 when the Reserve Bank of India (RBI) warned its customers against the potential security threats that were associated with digital currencies. Despite this, and multiple other warnings from the country’s ministry of finance and the RBI that followed since then, cryptocurrencies have grown in popularity even among people who were considered to be “conservative” Indian investors.

Why Das’ Opinion Matters

Shaktikanta Das has held a number of key positions in India’s ministry of finance including being the head of the departments of economic affairs and revenue. He has also served as a board member of the Indian market regulator Securities and Exchange Board of India and the Reserve Bank of India – both institutions play a monumental role in the drafting of cryptocurrency regulations in India.

Das argues that since the Reserve Bank of India is the only institution allowed to issue currency in India, cryptocurrencies are essentially illegal. He further pointed out that cryptocurrencies are paralleling present financial frameworks without any backing from legal provisions.

“There is the danger of cryptocurrencies leading to money laundering, terror financing, and unaccounted transactions. It will pose a serious threat to the financial stability not only of India, and in fact more, in the case of the developed world,” he added. “It’s a serious challenge and threat to global financial stability.”

Crypto Prices Drop Amidst Trader Suspicion of Binance Hack

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The major cryptocurrencies on Wednesday experienced sharp price drops as reports of system errors at Binance, a renowned crypto exchange, got many investors into a bit of a panic. At the same time, digital currency traders also had to digest reports that major United States regulators are demanding for the registration of all cryptocurrency exchanges.

Binance is considered to be one of the biggest exchanges in the world – CoinMarketCap reports that it is one of the top 4 biggest exchanges for the most popular cryptocurrencies in terms of the traded volumes. Prior to the Wednesday crash, a number of users noticed something highly unusual with Viacoin – that is, a huge increase in buy orders for the cryptocurrency after which its market capitalization jumped from $64 million to $159 million in just a few moments. A probe into the matter revealed that there were lots of unauthorized sell orders going around.

“We are investigating reports of some users having issues with their funds. Our team is aware and investigating the issue as we speak,” the Binance team wrote on Reddit. “As of this moment, the only confirmed victims have registered API keys (to use with trading bots or otherwise). There is no evidence of the Binance platform being compromised.”

Binance later announced that it had halted withdrawals so as to look into what the company referred to as “unauthorized market sells.” The company further stated that there was no evidence that the platform had been compromised at the time.

The impact the alleged Binance hack has had on the market is quite significant. 360 Blockchain USA president, Jeff Koyen pointed out the concerns surrounding Binance resulted in the plunge of the prices of bitcoin and several other digital currencies as well.

“All of crypto is getting battered right now, based on fears that Binance was hacked,” Koyen stated.

SEC Crackdown Played a Role

A number of market analysts have also pointed the price drops to the United States Securities and Exchange Commission’s (SEC) recent decision to subpoena a number of firms that either deal in cryptocurrencies, or are associated with them. A large number of the subpoenas were specifically sent to companies that are selling digital token through Initial Coin Offerings (ICOs).

Bitcoin Nears Regulatory Crackdown, Says Bank of England

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The Bank of England has issued a warning stating that bitcoin is headed towards a regulatory crackdown – it also pointed out that “inherently risky” cryptocurrencies are failing to fulfil their most basic function as a store of value. The banks’ governor, Governor Mark Carney, in a speech and interview that were held on Friday, tore into bitcoin. In his words, the world’s most popular decentralized digital currency is on the verge of a “pretty brutal reckoning.”

His remarks extended beyond bitcoin as an individual asset and included cryptocurrencies as a whole, which he also thinks have “all the hallmarks of a bubble. And normally they end with a pretty brutal reckoning.” Carney’s most significant concern was however portrayed by his call to have the “anarchy” of cryptocurrencies being utilized as a medium of exchange for criminal activities brought to an end. He said that it was about time that relevant authorities worked towards a framework to “regulate elements of the crypto-asset ecosystem to combat illicit activities”.

There are already a number of efforts around the world that are geared towards bringing bitcoin under the control of governments and central banks especially due to the prevailing fears that bitcoin users are likely to lose their money due to market manipulation. On the same note, there have been even more efforts directed towards curbing the use of cryptocurrencies for criminal activities such as drug dealing, money laundering and even financing terrorism.

In the run to Christmas in 2017, bitcoin soared very close to the $20,000 mark before plunging back by more than half at the beginning of the year. It has however recovered to $11,000 but there is still a ton of uncertainty plaguing the digital currency.

“Authorities are rightly concerned that given their inefficiency and anonymity, one of the main reasons for their use is to shield illicit activities. This cannot be condoned. Anarchy may reign on the dark web, but in the UK it’s just a song that your parents used to listen to,” Carney said in the speech.

Will Everything Be Put Under Scrutiny?

Staunch believers in the bitcoin dream have maintained that the underlying technology of most, if not all, cryptocurrencies will certainly revolutionize the existing financial systems and in the process make everyday payments not only cheaper but also easier than they seem to be at the moment.

Carney clarified on this particular issue saying that the bank would still study, explicitly, the use of the distributed ledger technology that powers cryptocurrencies. He concluded that, as much as cryptocurrencies “do not appear to pose material risks to financial stability,” the situation is bound to shift as more people become aware of them.

Circle’s Latest Acquisition Could Make It A Financial Giant

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Circle, a renowned financial services firm that specializes in cryptocurrencies and related mobile payments, yesterday (February 26th) announced that it would be purchasing the cryptocurrency exchange known as Poloniex. The exchange has been operational since 2014 and was at one time considered to be one of the biggest exchanges in the market. Even though a lot of competition has sprung, Poloniex remains to be among the top 20 largest cryptocurrency exchanges by trading volume. According to Fortune, Circle will be parting with $400 million or thereabouts for the acquisition – this move effectively makes Circle one of the most influential and largest companies in the industry.

In an official statement following the announcement, Poloniex said that its teams would be strengthened by the operational and customer support resources from Circle that will help them to scale effectively henceforth.

We recognize that our extraordinary growth these past few years has not come without some growing pains for our users. We look forward to bringing Circle’s experience to increase the scalability and reliability of our platform and operations. – Poloniex.

Circle’s history is quite interesting. It was first pitched as a bitcoin company that intended to make bitcoin more accessible – something along the lines of being the PayPal for bitcoin where the users could buy and sell bitcoin quickly and easily in the simplest way possible. Later, the company went ahead to dub itself as a social payment company, a Venmo competitor. However, the company eventually got back into the cryptocurrency game full swing with Circle Pay.

Circle Pay is Circle’s peer-to-peer payment service that is now one of the companies more critical efforts. Circle also runs an over-the-counter trading desk for large crypto exchanges and investors known as Circle Trade. Circle Trade essentially fosters liquidity between cryptocurrencies and a number of fiat currencies. It also powers Circle Pay. Fortune reveals that Circle Trade manages $2 billion in monthly transactions and it generated close to $60 million in revenue in a span of just three months.

A Timely Expansion?

Now, Circle is expanding its portfolio of products with an easy-to-use investment app called Circle Invest that will mostly cater to people who want to start buying digital currencies. Ultimately, having a cryptocurrency exchange of its own would be great for Circle and this is where Poloniex comes in. Circle intends to build on the work that had already been done by the Poloniex team with the end goal being to push it past being “an exchange for only crypto assets.”

“We envision a robust multi-sided distributed marketplace that can host tokens which represent everything of value: physical goods, fundraising and equity, real estate, creative productions such as works of art, music, and literature, service leases and time-based rentals, credit, futures, and more,” Circle co-founders Jeremy Allaire and Sean Neville wrote.

Poloniex assured its users that there would be no disruption of the services the exchange offers during the transition. All the updates that will be made in the course of the transition will be done in the background and will be geared towards optimizing user experience, security as well as the overall performance of the exchange.

UK MPs Launch Inquiry into Cryptocurrencies and Blockchain

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The United Kingdom Treasury yesterday announced that it would be launching an inquiry into bitcoin and other cryptocurrencies as well as the underlying blockchain technology. The investigation will involve MPs who will be investigating whether bitcoin and altcoin technologies pose a risk to central banking – the investigation is largely considered to be a forewarning for an inevitable attempt to crackdown on cryptocurrencies. Whichever way this will play out is another story altogether.

The probe expects to draw out a distinct conclusion that outlines both the benefits and the risks that come with cryptocurrencies – this will be prerequisite to talks on how it should be regulated in the long run.

To put everything into perspective, the chair of the Treasury Committee, Nicky Morgan pointed out that “People are becoming increasingly aware of cryptocurrencies such as bitcoin, but they may not be aware that they are currently unregulated in the UK, and there is no protection for individual investors.”

The Treasury Committee’s probe follows the great deal of attention that cryptocurrencies, especially bitcoin, have been attracting in the past year. The situation seems to have gotten out of hand with the increased volatility of some of the cryptocurrencies’ prices fluctuating wildly in very short periods of time and experts failing to agree on the causes or even on predictions for the future prices or value for said cryptocurrencies. The Treasury Committee, therefore, intends to study how overseas governments have gone about the issue and pick out a few points from them.

South Korea, for instance, recently introduced new regulations that restricted people from anonymous cryptocurrency trading in a bid to protect investors in the country from scams. This particular move seems to be the focal point of the Treasury Committee’s yet to be unveiled regulation-based effort with Ms. Morgan clarifying that ‘the inquiry will explore how to achieve a balance between regulating digital currencies to provide adequate protection for consumers and businesses whilst not stifling innovation.’

“We will also examine the potential benefits of cryptocurrencies and the technology underpinning them, how they can create innovative opportunities, and to what extent they could disrupt the economy and replace traditional means of payment,” Ms. Morgan continued.

Could Bitcoin’s Bounce Back to $10,000 Bring New Buyers?

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Yesterday (Thursday, February 15th), bitcoin rose above the $10,000 mark, surpassing a critical level thanks to stronger trader sentiment. On the CoinDesk Bitcoin Price Index (BPI), the digital currency soared to as high as $10,218. This consequentially made the bitcoin market, which is the largest digital currency market by capitalization, go up by more than 70 percent after a recent low of less than $6,000.

“Hitting $10k demonstrates the renewed energy in the crypto market, as it shakes off some of the volatility from the start of the year,” stated Iqbal Gandham, the UK Managing Director of eToro, a social trading platform.

In general, the cryptocurrency market has experienced wide-spread fluctuations in the last couple of months following speculations and rumors of a number of regulatory developments pertaining to how these digital assets are going to be handled. However, in sentiment driven markets, such as the bitcoin’s, key price levels changes like the bitcoin’s rise to $10,000 appears to attract new buyers who in turn help the price. Bitcoin’s recovery can also be attributed to statements from certain regulators which have gone a long way to alleviate fears of possible severe crackdowns which is a huge motivational factor for new buyers.

For the UK-based eToro social trading platform, user growth decelerated towards the end of January. This was at about the same time that bitcoin’s price started taking some rather significant hits. The rate of withdrawals, on the other hand, has not increased which implies that users were not selling out their bitcoin and that the demand for new customers could have contributed to the previous gains.

Investors Still Down $60 Billion in 2018

While bitcoin’s recovery should be a slice of hope for everyone in the community, investors who bought into the cryptocurrency at the beginning of the year will still have to brave a stormy period. The digital currency kicked off the year at $14,000, down from the $20,000 all-time high of December 2017. As such, since the year began, its market cap is still down by approximately $60 billion.

 

Cryptocurrency Mining Creates Huge Energy Demand in Iceland

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This year Iceland is likely to use more energy in mining digital currencies than what it will use to power homes in the country. Considering the large amounts of electric energy required by computers to mine the precious bitcoins, many prominent cryptocurrency mining companies have found Iceland to be the perfect spot for their operations thanks to the countries abundant geothermal and hydroelectric power plants. With this development, the current energy consumption by virtual currency mining companies is expected to double to 100 megawatts this year which is significantly higher than what all the island nation’s households will use collectively.

There are other factors that have attracted miners to the country. The first is that the companies do not need to pay taxes but given the buzz that their power consumption has been attracting, this will definitely not last long. Other important attractions for cryptocurrency mining companies is the natural cooling available for computer servers as well as the quite competitive prices for the available renewable energy. Obviously, this soaring demand for energy is a culmination of the equally soaring cost of digital currencies and Iceland seems to be the go-to place for companies that are seeking to optimize costs or get away from oppressive laws such as the ones in China following the crackdown on mining companies and ICOs.

As mentioned earlier, mining companies being exempted from taxes does not sit well with everyone in the country. Smari McCarthy, a lawmaker for Iceland’s Pirate Party has made the first step by proposing that the profits amassed by bitcoin miners should be taxed.

“Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government,” McCarthy said. “These companies are not doing that and we might want to ask ourselves whether they should. We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation. That can’t be good.”

Why It Is Not Yet Time to Give Up on Bitcoin and Crypto

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Bitcoin and the crypto-world as a whole are in a frenzy that has undoubtedly attracted a lot of speculation as to whether they are still worth pursuing. Bitcoin’s price, for instance, has been quite elusive – the cryptocurrency has already significantly plunged in value from an initial high of over $17,000 to just about $8,000. These fluctuations have been enough to make a number of interested parties throw in the towel. Well, that is probably a wise option especially if one cannot sustain this kind of endeavor, both financially and mentally. However, if you consider the bigger picture, it is quite evident that many more factors contribute to the complex cryptocurrency ecosystem. These range from regulation, comments from prominent people and even mere talk about regulation, all of which certainly affect prices in one way or the other.

The wild ride that the bitcoin community has been taken through is undoubtedly a justifiable reason for speculation. Apparently, most of the issues that are affecting the price of bitcoin are necessary developments that are expected to make it stable in the long run. So, why do you need to hold on a little?

Fraud Is Being Stamped Out!

Naturally, cryptocurrencies were bound to attract some negative attention, particularly from some fraudulent ICOs. The numbers are rather worrying in this sense considering that about 14 to 30 percent of existing ICOs are likely to be scams. The Securities and Exchange Commission has taken notice of the ICOs too and necessary steps have been taken by the chairman to warn investors about the risks involved. This is, obviously, a good thing but it has certainly contributed to the plunge in bitcoin’s price. Still, the bigger picture here is more important – once these regulations and protections become clear, it will actually allow bitcoin and other cryptocurrencies to thrive.

Facebook Pushes the Unfriend Button on Cryptocurrencies

You have to understand this if you are going to make an informed decision regarding crypto. First, in this age where social media is a force that influences almost everything in the world, crypto-fraudsters could definitely not let the opportunity cruise by. Advertisements about cryptocurrencies are quite common on the internet and a majority of them are actually used to bait unsuspecting victims who are lured in by the prospects of getting “crypto rich”.

Credit Cards Are Not Accepted

Big banks have made it quite clear that investors should never put their big bitcoin purchases on plastic. Citing the volatility and risk involved in such endeavors it is rather obvious that bitcoin investors should never contemplate risking money that they cannot afford to lose

All these steps have also been contributing to making exchanges safer since they are at the center of all this. Bitcoin and cryptocurrencies will rise again, but before it gets stable, buckle up for the storm that awaits.

Bitcoin Tumbles Below $8,000; Is the Bubble About to Burst?

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For the first time since 2017, bitcoin dropped below $8,000 yesterday and with the drop came a lot of speculation about what the future holds for the digital currency. According to CoinDesk, bitcoin plunged to $7,695.10 but recovered to $8,618 by mid-day – the bitcoin price index on CoinDesk tracks cryptocurrency prices from digital currency exchanges itBit, Bitfinex, and Coinbase.

The general takeaway from some economists and digital currency experts is that bitcoin is likely to weather yet another downturn. They believe that bitcoin can only continue to develop if it continues to be extremely volatile.

“Bitcoin is in trouble,” wrote Lukman Otunuga, a research analyst at foreign exchange broker Forextime. “Price action suggests that bears are clearly in control, with further losses on the cards as jitters over regulation erode investor appetite further.”

Bitcoin is, however, not the only digital currency that is experiencing a rough time. To put this into perspective, cryptocurrencies collectively lost over $100 billion in the last 24 hours. The price drops abruptly changed the mood and people’s perspectives as far as cryptocurrencies are concerned – the hype and overall excitement that was characteristic of the crypto – world, especially during this holiday’s season run-up, turned into a wave of uncertainty that swept through the space like wildfire.

Likely reasons for the price plunge include tougher regulatory scrutiny and imposed measures by governments in South Korea and China amidst concerns about tax evasion, money laundering as well as heavy speculation. Facebook’s ban on cryptocurrency and initial coin offering (ICOs) ads earlier this week is also partially responsible for the price drops – the company is however not changing their stand as they say the ban was influenced by the fact that such ads are “frequently associated with misleading or deceptive promotional practices.”

Also, according to CoinDesk, Ether coins on the Ethereum blockchain sank 15% to $880, Ripple coins slid 13% to 85 cents, and Litecoin tumbled 11% to $128.

Facebook Bans Advertisements on Cryptocurrencies and ICOs

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In every sense of the phrase, the cryptocurrency world is without a doubt the 21st-century rendition of what was referred to as the Wild West. That said, it should not come as a surprise that, like the Wild West, we will definitely get treated to the good, the bad, and, of course, the ugly. However, there has been so much of the bad and the ugly going around that regulators and Facebook have become fed up.

The social media platform recently unveiled a new advertising policy that will have huge impacts on how people interact and consume content pertaining to cryptocurrencies, initial coin offering (ICOs) as well as binary options. Narrowing down to the specifics, Facebook Product Management Director Rob Leathern clarified that the new policy is a move against advertisements that promote products and services “that are frequently associated with misleading or deceptive practices.”

Advertisers will no longer be allowed to promote cryptocurrency related products and services regardless of whether they are legitimate or not. Any advertiser that violates Facebook’s new policy will not only be banned on the core app but also in all of its other ad selling platforms such as its ad network, Instagram and Audience Network which puts advertisements on third-party apps.

On the same day that Facebook announced its new policy, there was also news of United States regulatory activity that targeted cryptocurrency issuers. This included a move by the Securities and Exchange Commission to shut down an ICO that is backed by former boxer Evander Holyfield. Little is known about the future of the regulatory measures that the authorities are now implementing. Facebook, on the hand, says that the decision is not permanent and that it will revisit the rules later when it perfects its ad detection and removal algorithms.

“This policy is intentionally broad while we work to better detect deceptive and misleading advertising practices, and enforcement will begin to ramp up across Facebook, Instagram, and its off-platform Audience Network, “ wrote Leathern. “We will revisit this policy and how we enforce it as our signals improve.”

Tides Get Rockier for Bitcoin

The move by Facebook and regulators in the United States did a number on bitcoin’s price – its price plummeted to below $10,000 just a few weeks after it climbed to a record high of $19,000. The wider crypto market took a hit as well with almost all of the top 50 altcoins experiencing price drops of over 10 percent.

Surprisingly though, the Facebook ban has been welcomed quite well on social media, especially by detractors of the crypto craze and supporters of decentralized digital currencies who want cryptocurrencies to be portrayed in a more legitimate fashion. There have also been speculations that claim that Facebook plans to launch its own digital currency to be used on the platform. Others think it is a play that intends to censor cryptocurrencies. Either way, it is about time that such measures were put in place to tone down the chaotic nature of the crypto world.