Category Archives: Crypto

JPMorgan Busted Over Bitcoin Fraud… Seriously!

Oh, the irony…

https://s16-us2.ixquick.com/cgi-bin/serveimage?url=http%3A%2F%2Fmedia.salon.com%2F2013%2F02%2Fjamie_dimon.jpg&sp=0b75c357def09705e3b7052650b2dcb9Jamie Dimon has come a long way in seven months…

From “Bitcoin is a fraud” in September to “Busted for Bitcoin fraud” in April.

Reuters reports that JPMorgan Chase & Co has been hit with a lawsuit in Manhattan federal court accusing it of charging surprise fees when it stopped letting customers buy cryptocurrency with credit cards in late January and began treating the purchases as cash advances.

Simply put, the bank switched from charging regular interest rates to charging, higher, cash advance rates on purchases of cryptocurrencies without notice to customers about the change.

The named plaintiff in the lawsuit, Idaho resident Brady Tucker, was hit with $143.30 in fees and $20.61 in surprise interest charges by Chase for five cryptocurrency transactions between Jan. 27 and Feb. 2, his lawsuit said.

With no advance warning, Chase “stuck the plaintiff with the bill, after the fact of his transactions, and insisted that he pay it,” the lawsuit said.

Hundreds or possibly thousands of other Chase customers were hit with the charges, Tucker said.

The lawsuit is asking for actual damages and statutory damages of $1 million.

Full Docket below…

Source: ZeroHedge

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Blockchain Remains A Solution In Search Of A Problem… For Now

Wall Street rethinks blockchain projects as euphoria meets reality

NEW YORK (Reuters) – Wall Street has been much more excited about the system underpinning bitcoin than the cryptocurrency itself, but the global financial industry has not yet been able to do much with the technology known as blockchain.

Reuters has found several blockchain projects launched by major financial institutions that have been shelved, as development of the technology enters a hype-meets-reality phase.

The casualties include projects by the Depository Trust & Clearing Corporation (DTCC), BNP Paribas SA (BNPP.PA) and SIX Group, Reuters has found.

These were among the wave of blockchain tests touted by the financial industry over the past few years, as firms bet the new technology would displace much of the sector’s infrastructure, cutting out middlemen, speeding transactions and reducing costs for things like securities and payments processing.

Yet as some projects were developed, companies pulled back for various reasons – from costs to industry readiness, underscoring that, for all its potential, blockchain is still in its early days.

DTCC, known as Wall Street’s bookkeeper, recently put the brakes on a blockchain system for the clearing and settlement of repurchase, or repo, agreement transactions, said Murray Pozmanter, head of clearing agency services at the DTCC.

The project, which had successfully tested with startup Digital Asset Holdings (DA), was shelved because banks and other potential users believed the same results could be achieved more cheaply using current technology, he said.

“Basically, it became a solution in search of a problem,” he said.

Post-trade services provider, SIX Securities Services, a unit of the group that operates Switzerland’s stock exchange, has also decided not take into production a prototype built by DA for the processing of securities, SIX spokesman Jürg Schneider, told Reuters.

“We wanted to go into another direction,” Schneider said.

The partnership with DA, run by former JPMorgan Chase & Co (JPM.N) executive Blythe Masters, was announced in 2016.

French bank BNP Paribas in 2016 said its securities services division had partnered with startups including SmartAngels to build a platform for private small businesses to manage their securities.

The bank stopped work on the project, and will instead team up with other financial institutions on another blockchain initiative called LiquidShare, said a source familiar with the matter. “Creating an enterprise-wide robust blockchain platform requires the full cooperation of the whole post trade ecosystem,” the source said.

PROOFS OF CONCEPT

The DTCC, BNP Paribas and SIX tests were among a barrage of blockchain “proofs of concept” announced with great fanfare by financial institutions.

“A large part of the problem has been expectation management, or rather lack thereof by many vendors and large consultancies that made claims that could not be fulfilled in the time spans they had said on stage at fintech events,” said Tim Swanson, founder of technology advisory Post Oak Labs.

Reuters reported last week JPMorgan was considering spinning off its marquee blockchain project Quorum. In July a partnership between settlement provider Euroclear and startup Paxos to develop a blockchain service was dissolved.

Still, other projects are moving forward.

 

Pozmanter said the DTCC is still examining another project with DA and that it is close to testing a blockchain-based trade information warehouse set to launch next year.

“We’re still bullish on the technology,” Pozmanter said.

The repo test with DA “met all its stated goals” and led to a new project that DTCC is examining, said DA spokeswoman Vera Newhouse.

SIX is working on a blockchain project with Nasdaq (NDAQ.O) and Australia’s stock exchange ASX Ltd (ASX.AX) said in December that DA will help replace its registry, settlement and clearing system, By  one of the most ambitious projects to receive a green light.

Source: By Anna Irrera &  John McCrank | Reuters

Bitcoin Winter Is Here

The Legendary Trace Mayer – Bitcoin’s Cold Winter: How Many Will Get Wrecked While Some Reap Riches

After an epic rise from $162 up to $19,886 in just over two years, the price of Bitcoin fell by nearly 70% between December 17, 2017 and February 6, 2018, to under $6,000. Alternative cryptocurrencies (altcoins) came under tremendous pressure too, and some of them lost 80-90% of their recently achieved all-time highs. Meanwhile, at least Bitcoin was able to recover some of those losses and temporarily reached $11,300 again. But over the past three weeks, the whole sector has came under tremendous pressure again.

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Live Crypto Pricing

Steven Seagal’s Mysterious $75M Initial Coin Offering Just Fell Apart

 

https://www.zerohedge.com/sites/default/files/inline-images/725_Ly9jb2ludGVsZWdyYXBoLmNvbS9zdG9yYWdlL3VwbG9hZHMvdmlldy81YTEzY2YzMGEwZDQ3MWViNzZjMzIxOGUxZjM4Y2U0OC5wbmc%3D.jpg?itok=4y2Ad6u3 Steven Seagal – actor, Zen master, musician, director, martial arts instructor and now crypto ambassador – has reportedly walked away from the Bitcoiin project, along with its anonymous founders, after closing out an ICO that may or may not have raised its targeted $75 million.

No one knows, really, and that seems to be a recurring problem with ICOs, highlighting the danger of celebrity-sponsored coins that seem exciting but offer no protection from potential fraud.

Seagal may have been the face of the alt coin, but the founders remain masked.

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Rolled out in January this year, Bitcoiin and Bitcoiin2Gen set out to raise $75 million during its initial coin offering (ICO), which was scheduled to wrap up on 30 March until the plug was pulled a week early, with both Seagal and the mysterious founders exiting, according to Cointelegraph.

No one knows how much they raised, but their website suggests they hit their mark. The problem is, there no way to verify that.

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The founders claim that they have withdrawn their association with the company to help establish total decentralization, explaining that Bitcoiin will become an anonymous cryptocurrency controlled by no one, with a new CEO appointed to lead the website.  

Before pulling the plug, they thanked all of their supporters.

“As Bitcoiin goes through the conversion phase from token to mineable coin we wish to advise that Bitcoiin will join the likes of the original Bitcoin and become a truly open source. Therefore a big thank you to the Founders and to our Brand Ambassador whom we wish all the best in their future endeavors. However, from this point on Bitcoiin will function within its ecosystem and become a genuinely anonymous cryptocurrency with no individual or individuals having control over the entity!”

And Seagal has remained tight-lipped.

So Seagal ostensibly helped give birth to Bitcoiin, and now it’s time to set it free to grown independently. But many will wonder whether this is practical crypto parenting, or a trip down Ponzi scheme lane.

Following his appointment as the coin’s brand ambassador, the U.S. Securities and Exchange Commission (SEC) ruled that “Steven Seagal has to ensure that the Bitcoiin investments are appropriate and in compliance with federal and state securities laws.”

The SEC hasn’t been at all keen on celebrity involvement in promoting cryptocurrencies, issuing earlier warnings about ICOs with celebrity ambassadors.

In recent months, celebrities such as actors Jamie Foxx and William Shatner, boxer Floyd Mayweather and hotel heiress Paris Hilton, among others, have publicly endorsed several projects ahead of their respective token sales.

U.S. regulators targeted Bitcoin and Steven Seagal earlier this month, following a March 7th securities fraud cease and desist order issued by New Jersey. Shortly afterwards, Tennessee followed suit with its own investor warning.

BehindMLM, a blog that tracks marketing schemes, claims that Bitcoiin is essentially a Ponzi scheme that will end in disaster, much like Bitconnect.

“B2G will likely follow the trajectory of other altcoin Ponzi schemes. A flurry of initial trading will see the value briefly pump, before reality sets in and B2G plummets to $0,” BehindMLM wrote.

Bitconnect currently faces a mounting series of lawsuits and regulatory action following its quick rise and fall as one of the most notorious crypto exit scams.  

Over the past few months, the SEC has hinted at a crackdown on ICOs. The SEC has recently reiterated its earlier position that many “tokens” sold in ICOs are in fact securities and must be treated as such and register with the regulatory body.

ICO proceeds have surged, from $96.3 million in 2016 to little under $4 billion last year. More than 180 new ICOs are scheduled to launch in 2018 and they’ve already flown past regulatory radar.  

The SEC’s crypto statements have become increasingly vehement as the dangers of fraud compound daily. Last month, the agency reportedly sent subpoenas to dozens of tech companies and individuals involved in cryptocurrency.

Is the Death of Bitcoin Upon Us?

Source: ZeroHedge

 

Bitcoin Battered To Fresh Lows After Twitter Joins Crypto Ad Ban

Facebook started it – banning crypto/ICO ads on Jan 30th, then came Google – copying Facebook’s ban on March 14h; and now, less than a week later, Twitter is virtue-signalling support for the crypto-crackdown, planning its own ban on ads.

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Sky news reports that Twitter is preparing to prohibit a range of cryptocurrency advertisements amid looming regulatory intervention in the sector.

The microblogging platform is following similar moves by Facebook and Google which have restricted financial advertisements due to concerns about illicit activities.

Sky News understands that the new advertising policy will be implemented in two weeks and currently stands to prohibit advertisements for initial coin offerings (ICOs), token sales, and cryptocurrency wallets globally.

The reaction was swift, just as we have seen to the other crypto ad bans… smashing Bitcoin back below $7500 (into mystery-dip-buyer territory)…

https://www.zerohedge.com/sites/default/files/inline-images/2018-03-18_8-12-11.jpg?itok=FtGpXfUk

But Ethereum and Ripple have been the worst performers since the crypto ad bans began…

https://www.zerohedge.com/sites/default/files/inline-images/2018-03-18_8-22-14.jpg?itok=I7yeDVvG

Reportedly, Twitter has experienced an influx of fake accounts pretending to advertise cryptocurrency giveaways, often by users posing as famous crypto sphere personas like Litecoin’s Charlie Lee.

… is food next?

Source: ZeroHedge

First Real Estate Deal Transacted In Ethereum Closes In The United States

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Look how fast things happen!! 

Just about a month or so ago, many agents where laughing about Bitcoin, blockchain, and other cryptocurrencies, talking about how people won’t use it to buy real estate. Hmmm… 

Where did this transaction happen? 

In Burlington, Vermont. 

The first property to be sold this way in the United States. 

It was sold entirely through the blockchain. Completely. 

Ethereum was the token used. This puts Vermont on the map. 

Propy is a company in San Francisco. Propy handled the entire transaction including recording of the documents and contracts instead of using the city system. 

Vermont is the first state to allow this kind of transaction and soon coming up are Colorado and Arizona. 

The encryption technology in blockchain is the best available at this time. 

This transaction used cryptocurrency for the purchase and it was then turned into the fiat money on the other end. 

The first Bitcoin to Bitcoin transaction in the United States was when Michael Komaransky sold his Miami mansion for 455 Bitcoin which was the most expensive Bitcoin real estate transaction to date. 

While most people will still not do a cryptocurrency real estate transaction, it is here, and it will be here to stay. 

The different tokens will fail and others will rise. Ethereum is very stable. Blockchain is here to stay and evolve. 

Source: By Katerina Gasset | Active Rain

NY City Weighs 18-Month “Moratorium” On Bitcoin-Mining

In upstate-New York, the City of Plattsburgh is moving toward installing a moratorium on commercial cryptocurrency mining operations, amid concerns from the council that it could drain the city’s electricity supplies.

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The WaterTown Daily Times reports that the problem is that mining for cryptocurrency, such as Bitcoin, absorbs a tremendous amount of energy in generating the virtual currency. Municipal Lighting Department Manager Bill Treacy says there are two mining farms in the city that they know of – one in the former Imperial Mill and one in Skyway Plaza, and there may be some smaller private mining operations in households in the city, he said.

The mining farms in the City of Plattsburgh have cropped up over the past year, officials say; and at times they have used up to 11.2 megawatts of power per month, which can be about 10 percent of the city’s power supply — more than is consumed by Georgia-Pacific, one of the city’s largest users.

This is a problem because, as part of the Municipal Electric Utility Association since the 1950s, the city is allotted a certain amount of inexpensive hydro power generated on the St. Lawrence River.

The cheap power has allowed the city to maintain attractive electric rates for households and businesses for more than half a century.

At one time, the city was touted as having some of the lowest rates in the nation.

But when usage is high, the system is in jeopardy of going over its allotment of inexpensive hydro power.

When that happens, the city must buy much more-expensive power on the open market to supplement its supply, which drives up the cost for consumers, Treacy said.

The hydro power costs 4.92 cents per megawatt hour, compared with 37 cents for alternative power. And that means ‘average’ Plattsburghians are facing notably higher costs due to the mining operations.

When the city has to purchase more power, its customers see a spike in their monthly bills.

Treacy said the average home will probably see an increase of $30 to $40 or more in their monthly bill.

“People are surprised when their bills are so high because they say that they turn the lights off when it is cold to save energy, but lights don’t really use much power,” he said.

“It’s the electric heat that is costly.”

Read said the moratorium is proposed not only to give the city time to explore the cost impact, but for health and safety factors.

As the bill (Local Law P-3 of 2018) shows…

Pursuant to the authority and provisions of Section 10 of the Municipal Home Rule Law of the State of New York and the statutory powers vested in the Common Council of the City of Plattsburgh to regulate and control land use and to protect the health, safety and welfare of its residents, the Common Council of the City of Plattsburgh hereby declares an eighteen (18) month moratorium, on all applications or proceedings for applications, for the issuance of approvals or permits for the commercial cryptocurrency mining operations in the City of Plattsburgh. This moratorium will allow time for the zoning code and municipal lighting department regulations to be amended to regulate this potential use.

It is the purpose of this Local Law to allow the City of Plattsburgh the opportunity to consider zoning and land use laws and municipal lighting department regulations before commercial cryptocurrency mining operations results in irreversible change to the character and direction of the City.

Further, it is the purpose of this Local Law to allow the City of Plattsburgh time to address through planning and legislation, the promotion of the protection, order, conduct, safety health and well-being of the residents of the City which are presented as heightened risks associated with commercial cryptocurrency mining operations.

It is the purpose of this Local Law to facilitate the adoption of land use and zoning and/or municipal lighting department regulations to protect and enhance the City’s natural, historic, cultural and electrical resources.

As WCAX reports, one of the mining operators, David Bowman of the Plattsburgh BTC, suggested a solution:

“You know you need to like protect people in the town from being adversely affected by increased electricity rates but I think there are ways to do that like possibly charging the miners more,”

“I think it’s not a great idea to just completely ban the whole thing– it’s just too new.”

Yet no one interviewed the Bitcoin miners. We wonder why?

Source: ZeroHedge