Category Archives: Crypto

Gold and Silver Have Become The Strongest Money Since Q2

Recently, one big name money manager after another is on record telling people to buy hard assets. Why? Financial writer and precious metals expert Bill Holter says they all know what is coming. Holter contends,

“They understand that this is going to be the biggest monetary debasement in the history of history. They understand it’s hyperinflation that is on its way. They are late to the game, and they do manage billions and billions of dollars, and I don’t see how people talking about buying gold and buying silver are going to be able to get actual physical silver and physical gold in their hands or in their vaults.”

Holter is warning of a failure to deliver metal because demand is out-running supply. Holter says, “So far, this year . . . for gold, they have already EFP (Exchange for Physical) 4,200 tons just for the first eight months. . . . They don’t have the inventories to deliver. . . . The point being that is 4,200 tons in eight months. The world only produces 3,300 tons (of gold a year) and if you take out Russia and China, which do not export (gold), the whole total for the year is 2,800 tons. So, it looks like we are going to end up with 6,000 tons of gold EFP demand for delivery in a world that is only producing 2,800 tons. In silver, it’s worse. In silver in the first eight months, there has been 1.6 billion ounces EFP. That number is going to end up to about 2.4 billion of silver ounces (EFP) and the world produces less than 800 million ounces a year. The bottom line to what all this means is there is going to be a failure to deliver. Once there is a failure to deliver, only the Lord knows what kind of prices we are going to be looking at for gold and silver.”

Holter says a failure to deliver is not a maybe but a sure thing. Holter says, “Whether it is this year or the first few months of next year, it doesn’t matter. It is going to happen. . . . I can basically guarantee there is going to be a failure to deliver, and that failure to deliver is going to unmask and scare the crap out of the entire fractional reserve banking system and the fractional reserve commodity system. The whole thing is going to come down in a panic because somebody gets a failure to deliver. . . . If you listen to what Trump is saying, he wants a lower dollar. How much of a lower dollar does he want? He’s talking about debasing the currency to make the debt payable. . . . That is the most palatable way for any government to pay debt and that is to debase the currency and pay it off in monkey money.”

Join Greg Hunter as he goes One-on-One with precious metals expert Bill Holter

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Big Banks Outed For Enabled Jeffrey Epstein’s Sex Trafficking Crimes

Unlike the unfounded narrative that cryptocurrency enables crime, big banks are more than happy to serve unsavory clients if it is lucrative enough for them. The latest example of this is a report that Jeffrey Epstein was apparently using his bank accounts to fund sex trafficking and possibly other crimes.

Follow the Money

The reported death of the Wall Street financier and convicted sex offender Jeffrey Epstein on Saturday morning in a Manhattan prison cell has left a lot of questions. Among these is how exactly he funded his criminal activities, which included sex trafficking of minors to be used by the rich and powerful. One matter that is not a mystery is how Epstein funded his perversions: he used the traditional fiat banking system, with all its extensive KYC and AML regulations.

The alleged suicide of Epstein shouldn’t stop the “Legions of lawyers, bankers and accountants” that have been digging into his financial affairs in recent weeks claims the New York Times. These include officials conducting internal reviews at the two big banks that worked with him for years, JP Morgan Chase and Deutsche Bank. The employees at both of these financial institutions have reportedly been going over their books in a long overdue attempt to understand how they got into business with the convicted criminal and what exactly he was using their banking services for. A person who was briefed on Deutsche Bank’s internal review reportedly said “it appeared that Mr. Epstein was using his accounts for sex trafficking and possibly other illegal activity.”

Deutsche Bank headquarters on Wall Street in Lower Manhattan, New York

Further, according to the report, compliance officers and other employees at both JP Morgan Chase and Deutsche Bank had strongly advised their higher-ups to stop doing business with Epstein years before his accounts were finally closed. This was suggested not due to the unpalatable nature of his businesses, but due to the risks associated with him such as hurting the bank’s brand and upsetting regulators. However, former employees at both banks said that “managers and executives rejected that advice and kept doing business with the lucrative client.”

Deutsche Bank Only Recently Closed Epstein’s Accounts

Jeffrey Epstein pleaded guilty and was convicted in court of law of both soliciting a prostitute and of procuring a minor for prostitution back in 2008. He served 13 months in custody with work release, as part of a plea deal, where federal prosecutes had identified 36 girls as young as 14 years old who had been victimized. His case was very hard to miss due to the fact that his name was tied to some of the most famous and powerful people in the world such as Donald Trump, former U.S. President Bill Clinton, the U.K.’s Prince Andrew, former Israeli Prime Minister Ehud Barak, and disgraced Hollywood star Kevin Spacey.

Despite all of this, it isn’t too hard to see why the higher-ups at the big banks didn’t want to let go of his business. While not much is known about the source of his money, Epstein definitely had a lot of it moving around. Among his confirmed assets is a private island in the U.S. Virgin Islands, a Manhattan mansion worth over $77 million, a Palm Beach estate worth over $12 million, additional real-estate properties in New Mexico and Paris, a private jet airplane and no less than 15 cars. Considering this, it isn’t that surprising that Deutsche Bank only cut its ties to Epstein when prosecutors were set to charge him again with operating a sex-trafficking ring of underage girls in June of this year.

A Chase Bank branch in Manhattan, New York

JP Morgan Chase worked with Epstein from the late 1990s until 2013 and Deutsche Bank served him from 2013 until June 2019. The latter bank has reportedly already started giving his complete transaction history to investigators while the former awaits receiving similar demands for his financial data from U.S. authorities.

In a statement on Saturday after the alleged suicide, Manhattan U.S. Attorney Geoffrey S. Berman expressed his commitment to the victims to keep the investigation ongoing, despite the demise of the defendant. This means that the public will hopefully get a detailed examination into the criminal banking activities of Epstein in due course.

Big Banks Have a Long History of Enabling Crime

Governments, central banks and international financial institutions have all been pushing a largely unfounded narrative in recent years that cryptocurrencies enable illicit activity. Parroted by the mainstream media, it was used as justification to crack down on exchanges and other crypto service providers with demands for less user privacy or outright bans. In contrast, the established banking system has a long and proven track record of enabling all sorts of crimes, despite its burdensome compliance requirements, and yet erring institutions receive nothing more than a fine equal to a slap on the wrist.

The recent seizure of a cargo ship owned by JP Morgan, which was loaded with 20 tons of cocaine, highlight the involvement of the big banks, albeit unwittingly in this instance, in such activities. Money laundering for drug cartels as well as moving funds for terrorists, arms dealers and dictatorial regimes are among the many misdeeds the banks have been caught red-handed abetting over the years.

What do you think about the big banks that reportedly enabled Jeffrey Epstein to fund his sex trafficking crimes? Share your thoughts in the comments section below.

Source: by Avi Mizrahi | Bitcoin.com

China’s Central Bank Crypto Currency Is “Ready”, After 5 Years Development

A senior official at China’s central bank announced at the China Finance 40 Group meeting today that the country will soon roll out its central bank digital currency (CBDC.)

Mu Changchun, Deputy Chief in the Payment and Settlement Division of the People’s Bank of China (PBOC,) stated that the CBDC prototype exists and the PBOC’s Digital Money Research Group has already fully adopted the blockchain architecture for the currency. China’s CBDC will not rely entirely on a pure blockchain architecture, as this would not allow the currency to achieve the throughput required for retail usage.

According to Changchun, the currency has been in the research and development phase since 2014. At the meeting on Saturday, he said, “People’s Bank digital currency can now be said to be ready.”

The CBDC will employ a two-tier operational structure, per Changchun:

 The People’s Bank of China is the upper level and the commercial banks are the second level. This dual delivery system is suitable for our national conditions. It can use existing resources to mobilize the enthusiasm of commercial banks and smoothly improve the acceptance of digital currency.

 

A two-tier system is preferable due to China’s complex economy, vast territory and large population. “From the perspective of improving accessibility and increasing public willingness to use, a two-tier operational framework should be adopted to deal with this difficulty,” Changchun said. He also welcomed the resources, talent and innovation capabilities of commercial businesses who will partner with the PBOC to roll out the currency. Finally, this system will help avoid concentration of risk and financial disintermediation.

At the same meeting, China UnionPay Chairman Shaofu Jun said that the goals of China’s CBDC would be difficult to achieve. While a CBDC could solve issues related to cross-border transactions, long lag times and legacy inefficiencies, the lack of clear operational processes and a detailed regulatory framework across countries will be challenging to overcome.

IRS Says It’s Sending Demand Letters to US Cryptocurrency Owners

The U.S. Internal Revenue Service (IRS) announced Friday that it has begun sending letters to taxpayers who own cryptocurrency, advising them to pay any back taxes they may owe or to file amended tax returns regarding their holdings.

In a news bulletin, the agency said that it began mailing what it called “educational letters” last week. According to the statement, there are three variations of the letter that were sent.

The IRS further said that it will have sent such letters to “more than 10,000 taxpayers” by the end of this month,” adding that “the names of these taxpayers were obtained through various ongoing IRS compliance efforts.”

“Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties,” IRS Commissioner Chuck Rettig said in a statement. “The IRS is expanding our efforts involving virtual currency, including increased use of data analytics. We are focused on enforcing the law and helping taxpayers fully understand and meet their obligations.”

In May, it was reported that the IRS is beginning to work on new guidance regarding cryptocurrencies, its first such effort since 2014. A number of organizations and industry advocates have called on the agency in past years to update its guidance following its decision to treat cryptocurrencies as a form of intangible property for tax purposes.

On Thursday, a user of the r/bitcoin subreddit described receiving such a letter. Lawyer Tyson Cross, writing for Forbes, also detailed how a number of his crypto-focused clients have received this kind of letter from the IRS.

Source: by Stan Higgins | Coindesk

IRS Ready To Make Tech Giants Release User Crypto Activity

The United States’ Internal Revenue Service (IRS) is allegedly considering requiring tech giants to report on crypto activity by users, according to a presentation reportedly from an IRS presentation and provided by a Twitter user on July 9.

According to the documents shared, the IRS hopes to use Grand Jury subpoenas on firms such as Apple, Google and Microsoft to check taxpayers’ download history for crypto-related applications.

Known as Crypto Tax Girl, Laura Walter, certified public accountant and crypto tax specialist, tweeted the presentation, which was allegedly for agents in the IRS’s Criminal Investigation division.

Citing the document, Walter concluded that the tax authority is conducting exhaustive research into detection of criminal tax evasion cases involving crypto. As such, the IRS is considering carrying out interviews, open-source and social media searches, as well as electronic surveillance, the expert noted.

Specifically, the 181-page document reads:

“Grand Jury Subpoena should be considered for Apple, Google, and Microsoft for the Subject’s complete application download history. Each application’s function should be explored to determine whether or not the application can transmit, or otherwise allow, transactions in bitcoin.”

As Walter emphasized, the presentation envisions that IRS agents ensure that taxpayers are not notified about the obtained information regarding their use of cryptocurrencies to prevent detrimental to the investigation. 

Cointelegraph notes that the IRS has not confirmed the authenticity of the presentation’s origin.

According to the documents provided, the IRS is hoping to serve subpoenas to check data from accounts in banks and Paypal for connection with crypto transactions. Additionally, the tax authority is considering reviewing social media giants such as Facebook and Twitter to find and record publicly available cryptocurrency addresses.

Concluding the thread, Crypto Tax Girl wrote:

“There is a ton of other information in there about crypto in general, tracing transactions via the blockchain, limitations of the blockchain, etc. but what you need to know is that the IRS is working HARD to identify criminal tax cases involving cryptocurrency.”

As previously reported, the IRS currently considers cryptocurrencies property. In late 2018, an advisory committee of the IRS expressed its intent to provide additional guidelines for the taxation of crypto transactions.

Recently, Cointelegraph reported on Singapore’s plan to exempt cryptocurrencies that are intended to function as a medium of exchange from Goods and Services Tax (GST).

Source: by Helen Partz | CoinTelegraph

Money Laundering Scandals Bring Court Charges and Record Job Cuts to Euro Banks

The international financial establishment is known to express concern about the risks of money laundering when the crypto space is mentioned. A string of scandals indicates, however, that traditional banks are not only susceptible to the phenomenon but sometimes complicit, whether knowingly or inadvertently. New chapters have been added to the saga over the last few months that are hurting banks, bankers and their clients.

Deutsche Bank Prepares to Lay Off 20,000 Employees

Deutsche Bank, one of the biggest names associated with money laundering accusations, has been dogged by many problems during the past year. The leading German financial institution is now preparing for a major reorganization that may include the sacking of up to 20,000 employees, if the plan is approved at the end of this week.

The changes come after a failed merger with Germany’s Commerzbank a couple of months ago, which was eventually deemed too risky by the teams of both banks. It did not materialize, despite the support of the federal government in Berlin.

Many of the layoffs are expected to affect Deutsche Bank’s investment banking offices in London and New York. According to a BBC report, the German bank has 8,000 employees in the British capital. And the 20,000 jobs that are likely to be cut represent a fifth of the institution’s global staff.

Besides persistent problems with its investment business and unsatisfactory financial results, the banking giant has been suffering from its involvement in money laundering scandals. In November, 2018 its headquarters and other offices in Frankfurt were raided by law enforcement officers and representatives of the German tax authority.

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Bitcoin Soars Above $9K, And This Time Is Different: “It’s Mostly Institutions Now”

The recent surge in bitcoin, and the entire cryptocurrency space accelerated over the weekend, coinciding with the latest massive protest in Hong Kong which may be among the catalysts for the aggressive buying, and sending bitcoin above $9,000 for the first time since May 10, 2018, a price that is almost triple where bitcoin traded at the start of the year, making it the best performing major asset class of 2019, with a market cap of $163 billion.

https://www.zerohedge.com/s3/files/inline-images/BITCOIN%20SURGE.jpg?itok=4IICRiYk

And as the price of bitcoin surge, naturally so does its volatility, which has quadrupled from its near all-time lows hit at the start of April to 95 for the 30-day historical vol, in the process making it once again a favorite of traders desperate for highly-volatile assets.

https://www.zerohedge.com/s3/files/inline-images/bitcoin%20volatility.jpg?itok=4vbzIxpJ

It’s not just Bitcoin’s volatility that has returned: so have volumes as what appears to be the latest reflation of the bitcoin bubble is drawing in investors from around the globe, hoping to make a quick profit. Only this time there is one major difference as JPMorgan explains.

According to JPMorgan’s Nikolaos Panigirtzoglou writes, there has been a sharp increase in reported trading volumes of Bitcoin and other cryptocurrencies  over the past few months, with Bitcoin trading volumes on crypto exchanges increasing to $445bn in April from a 1Q19 average of $220bn per month, and in May volumes increased further to around $725bn. This compares to previous peak volumes in Dec17 and Jan18 of $420bn. Curiously, for the three largest three cryptocurrencies by market capitalization, Bitcoin, Ethereum and Ripple, the combined volumes for May stand at above $1tr compared to a previous peak in Jan18 of around $685bn, suggesting that all else equal, there is an even greater interest in the crypto space .

Meanwhile, this development comes at a time when the market value of outstanding bitcoins is around half of its Dec17 high, and the combined market value of all crypto currencies is around a third of its previous high. While a substantial part of the increase in volumes in dollar terms reflects an increase in the market value of bitcoin and other crypto currencies, the volumes in bitcoin terms are also significantly above their previous peaks.

https://www.zerohedge.com/s3/files/inline-images/bitcoin%20crypto%20futures.jpg?itok=1x7aQvcT

But there is more here than meets the eye.

As JPM explains, taken at face value, this volume surge would suggest a dramatic increase in cryptocurrency activity. But over the past year or so, concerns have increasingly been expressed over how authentic the reported volumes really are. To wit:

…  recently published work by Bitwise, a cryptocurrency asset manager, to the SEC as part of an application for a bitcoin ETF suggests that bitcoin trading volumes on many cryptocurrency exchanges are significantly overstated by ‘fake’ trading, e.g. exchanges reporting volume of trades that never took place or via wash trades, and that genuine trading volumes could be around 5% of the reported total. Similarly, the Blockchain Transparency Institute publish monthly market surveillance reports, and estimated in April 2019 that less than 1% of reported volume for some exchanges represented real trades.

If these estimates of the proportion of real trades are correct, i.e. “that only around 5% of trading is genuine,” that would imply that the genuine volumes of Bitcoin trading on cryptocurrency exchanges in May were around $36bn, rather than $725bn.

If this sharp revision in actual trading volumes is accurate, a critical implication, beyond the fact that the actual market size is markedly lower than reported numbers would suggest, is that as JPM notes, “the importance of the listed futures market has been significantly understated.” According to the Bitwise report, traded futures are credited as an important development in allowing short exposures that enabled arbitrageurs in properly engaging in arbitrage (and also resulted in a massive squeeze at the start of April that sent bitcoin breaking out again, and which we discussed previously), and that the futures share of spot bitcoin volumes increased sharply in April/May.

Indeed, when looking at aggregate volumes on both the CME and CBOE futures contracts (shown below), JPM estimates around $12bn of traded volume on these two futures exchanges in May. Indeed, the $12bn of bitcoin futures trading volume in May also represented a significant increase on the April’s $5.5bn and a 1Q19 monthly average of $1.8bn, suggesting that some rise in trading volume was genuine, even if the total volumes on cryptocurrency exchanges was  likely vastly overstated.

https://www.zerohedge.com/s3/files/inline-images/combine%20daily%20volumes.jpg?itok=uWzdAHQ-

The conclusion to this overstatement of trading volumes by cryptocurrency exchanges, and by implication theunderstatement of the importance of listed futures, suggests that in the two years since bitcoin’s last major spike in 2017 the “market structure has likely changed considerably… with a greater influence from institutional investors.”

This also means that whereas bitcoin’s historic surge to its all time high of $20,000 in December 2017 was largely retail driven, and thus extremely fickle as the subsequent crash showed, this time it is largely the result of institutional buying, which is far more stable and far less prone to sudden, painful shifts in sentiment and volatility.

In other words, “this time may be different” for bitcoin in a good way: because with institutions now piling into the crypto space, this is precisely the investor group that bitcoin bulls wanted from the beginning as it creates a far more stable price base for the future. Add to this the potential return of retail buying from east Asian (or even US) retail clients, and it is possible that what we predicted in early April, namely that the 3rd bitcoin bubble is starting…

https://www.zerohedge.com/s3/files/inline-images/bitcoin%20log%20scale%20june%2016.jpg?itok=WigREcmf

… may soon be confirmed, and that the next bitcoin bubble peak will be somewhere between $60,000 and $100,000.

Source: ZeroHedge