August 2018 has been a buzy month: laws, lawsuits, thiefs, currency crashes and more news from the outer belt, for the international blockchain lawyer.
→ MALTA seems to get the favors of crypto-exchanges due to improved bank-crypto relationships. This follows the enactment of 3 “crypto-bills” in late June.
- Law: https://cryptovest.com/news/malta-now-blockchain-island-after-passing-three-blockchain-bills/
- Binance : https://news.bitcoin.com/the-daily-binance-launches-in-liechtenstein-zb-com-opens-office-in-malta/
→ In the UK a bank is reported to target non-criminal customers who have cashed out large amounts of cryptocurrencies, by freezing and closing their bank accounts. The bank’s motive is that it refuses to deal “with this kind of people”.
At mdtinode.net, it was first beleived that, because the story involves small or local banks, issues concerning the bank’s liquidity could be the real reason why they would “not want to deal with such customers”. Wrong ! research on the internet indicates that this behavior is not new, is not specificallly related to cryptocurrencies, and results from a hard application of the anti money-laundring and terrorist activities laws. Some countries are stricters than others, such as England, or Australia.
To avoid frozen accounts, why not contact your account manager to let him clear the transfer before it happens. Above a certain threshold that is generally 10 000 usd/€ (or lower) , banks trigger alerts and procedure to comply with anti-money laundering regulation which is not specific to crypto-currencies. They may also have a suspicion about less known cryptocurrencies exchange or direct transactions that facilitate money washing.
Customers converting cryptos should get their cousellor to get the confirmation of the head office, and not an initiative of the cousnellor that may be ignored by the bank’s management.The reason is that banks own the customers’ accounts and can close them without being legally bound to explain their motives. In France, it hgappened that the account was closed despite a prior authorization by the account counsellor who followed the procedure he was told to follow. The head office had afterthoughts and finally gave its customers the due 60 days notice before the account is definitely closed (and seized…).
There are banks specialized in cryptocurrencies and which do not behave with such brutality when receiving fiat from cryptos in their accounts. The best is probably to use them.
- UK: https://news.bitcoin.com/funds-frozen-account-closed-uk-banks-target-cryptocurrency-owners/
- UK: https://news.bitcoin.com/banks-freeze-companys-accounts-after-owner-traded-on-localbitcoins/
- AUSTRALIA: https://cryptovest.com/news/4-australian-banks-allegedly-freeze-accounts-over-crypto-activity/
- Generalities: https://www.theguardian.com/money/2018/feb/22/banks-de-risk-money-laundering-closed-accounts
- Ombudsman https://bankomb.org.nz/guides-and-cases/quick-guides/bank-accounts/freezing-an-account/
- FRANCE: https://www.capital.fr/entreprises-marches/bitcoin-la-grande-mefiance-des-banques-face-a-leurs-crypto-clients-1271003
- FRANCE: https://bitcointalk.org/index.php?topic=2302332.0
- FRANCE: https://bitcoin.fr/banques-vs-bitcoin-la-bataille-continue/
USA / CANADA
→ Playboy sues the Canadian company GBT for breach of contract, claiming that GBT failed to implement Blockchain into Playboy’s online platforms in the agreed deadlines.
→ Crypto-investor files a lawsuit worth $224 million against telecom company AT&T accusing it of “negligence and fraud” regarding theft of cryptocurrencies from his personal account.
→ In CALIFORNIA, a court accepted the payment of a bail of $750,000 with bitcoins. This is not the first time bails are paid in cryptocurrencies. On the issue of the devaluation of bitcoin, the District Attorney assistant adds that “The idea is to get (the defendant) to court, not necessarily to maintain the value of any particular asset. (…) Even in the event of major appreciation or depreciation of the amount paid, this would not “mean that the court would care.” And also because, for the owner of the bitcoins, there is certainly a need to get them back, which is the point of the bail.
→ USA &CANADA have launched an “Operation Cryptosweep” to track and to investigate unregistered and fraudulent crypto-related investment products.
→ SAUDI ARABIA declares bitcoin trading illegal in the kingdom, in an attempt to protect Saudi citizens “from the illusion to get rich quickly”.
→ DUBAI launches a project for car tracking powered by the blockchain. It tracks ownership, sales and accident history, from the construction to the destruction of the vehicle.
Also, crypto-exchanges, such as BitOasis in Dubaï, are working with Gulf institutions to build an appropriate legal framework for the entire region.
ASIA and PACIFIC
→ HONG KONG granted $20 million to several local universities for the research and development of blockchain-based payments systems
→ SOUTH KOREA to allocate more than 4 billion USD to 8 tech-projects, with an emphasis on blockchain and AI as boosters of the sharing economy
→ In VIETNAM, 35 million worth of cryptocurrencies have been lost as 600 mining rigs have literally disappeared, together with the CEO of a mining farm that was emptied overnight. The CEO later apologized, explaining that the company faced insolvency further to cost increase and cryptocurrency loss of value. Several lawsuits have been filed.
→ In CHINA, 3 hackers were arrested in August after 6 month of research. They managed to stole bitcoins and ethers by hacking personal computers. One victim reported a loss of 100 million Yuan (a little bit more than 12 millions euros).
→ After a period of slight confusion about its intentions, China “will continue to monitor and shut down domestic websites related to cryptocurrency trades and initial coin offerings (ICOs), and ban payment services from accepting cryptocurrencies, including bitcoin.” The ban concerns “everything”, from exchange plateforms, to small commerce accepting bitcoin as a payment, as well as events and conferences promoting crypocurrencies.
→ JAPAN ’s financial regulator the Financial Services Agency (FSA) said it has no intention to introduce “excessive” regulation for the crypto-industry, and would prefer an “appropriate” legal framework to let this industry develop. It is reminded that, since the hack of Coincheck for more than $ 500 millions in January 2018, the FSA has monitored all exchanges operating in Japan, causing new applicants to face much stricter controls than before.
→ AUSTRALIA now has very efficient services allowing to pay bills online directly in cryptocurrencies. Similar services exist in the EU (BitBill.eu), as well as in the Philippines (Bill Ninja).
→ VENEZUELA AND TURKEY have been quite a lot in the news this summer, as Bitcoin and other cryptocurrencies are considered stable in comparison to their national currencies. Even though the situation is very different in both countries; the final symptoms might be a collapse of the national currencies, and a switch to cryptocurrencies.
The Venezuelan crisis began around 2010, at a time when cryptocurrencies were not in the headlines and still an underground phenomenon. Eight years later, Venezuela is switching from its Bolivar to “Bolivar Sovereign”, a new national currency indexed on the “Petro” which is a cryptocurrency based on the oil reserves of the country, and which was launched in February 2018. In the case of Venezuela, with a hyperinflation of a million % , there is certainly nothing to lose in trying. Commentators remain skeptical on the outcome, qualifying the Bolivar sovereign as a scam, for various reasons, one of which being the absence of a blockchain and a block explorer. So far, nobody has seen any Petro in circulation, eventhough the Petro ICO managed to raise 3 billion USD.
In any case, the cryptocurrency that seems to win venezuelian favors is DASH, a cryptocurrency that has been marketed for a while in venezuela and which is accepted by several merchants, and not the petro.
- Petro Venezuela confirm the collapse of its currency (Analysis in French)
- Criticisms https://bitcoinist.com/new-venezuela-bolivar-a-scam-on-top-of-another-scam-says-media/
- Dash: https://bitcoinist.com/dash-adoption-grows-venezuela-amidst-hyperinflation/
- Dash: https://btcmanager.com/privacy-cryptocurrency-dash-becomes-choice-of-currency-for-venezuelans/
In Turkey, the crisis is different, the lyra lost 20% after a mini-krach on august 10th 2018. Now, there is a Turkish interest for learning about cryptocurrencies and studies report that as much as 18% of Turkish citizens declare to own cryptocurrencies. Eventhough headlines talked about “massive adoption” further to the devaluation of the Lyra, exchange rate did not (yet) significantly go up or down in echo to these events, as people may choose different cryptocurrencies according to which they trust locally.
→ If you have read until here, you could agree with brian Armstrong, Coinbase CEO, when he says that mass crypto adoption will take quite some time (unless currency crash?). Read about his reasons on the link below.