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Hodler’s Digest, April 8–14: Top Stories, Price Movements, Quotes and FUD of the Week

Bloomberg calls Bitcoin a bubble yet again, and Facebook is seemingly looking for $1 billion from VC firms for its stablecoin.

Top Stories This Week

NYT Reporter: Facebook Seeking $1 Billion in Venture Capital for Crypto Project

According to a tweet by New York Times (NYT) tech reporter Nathaniel Popper, Facebook is reportedly looking to various venture capital firms to develop its digital token that has been previously reported on. Popper, citing unnamed sources familiar with the matter, said that Facebook is seeking $1 billion to develop its cryptocurrency project, which itself has not been publicly confirmed by the company. The Times reporter also noted that the project involves a stablecoin that would be pegged to a basket of foreign currencies held in bank accounts.

Chinese Traders Pay Extra for Bitcoin Through OTC Desks Amid Crypto Market Surge

Local Chinese social media sources said that Bitcoin’s (BTC) price surge last week has led Chinese traders to pay a premium in order to trade the cryptocurrency. According to an analysis of price spreads from cryptocurrency exchanges Huobi and OKEx, cnLedger highlighted how Chinese traders are paying more in order to acquire Bitcoin. Since China formally banned crypto trading in the country in 2017, investors have had to resort to creative methods in order to deal in Bitcoin. In the analysis, cnLedger notes that a principal way to avoid the ban is to buy stablecoins such as Tether (USDT) via over-the-counter (OTC) services and convert them into other cryptocurrencies

Top Stories This Week

Top-Subscribed YouTuber PewDiePie Partners With Blockchain

PewDiePie, the personality behind the most subscribed channel on YouTube, announced this week that he will start streaming on blockchain video platform DLive as of April 14. Dlive is a blockchain-powered broadcasting app with a rewards system for content creators and will become the exclusive platform for livestreaming the famous Swedish YouTuber, Felix Kjellberg — aka PewDiePie. The platform currently has 3 million monthly users and 35,000 active streamers, while PewDiePie on YouTube has over 93 million subscribers and 21 billion video views, as of April 2019. PewDiePie’s move to Dlive comes as the Swede faced backlash over his alleged ties to white supremacism, as his channel was mentioned by the Christchurch gunman prior to his attack on two New Zealand mosques.

Bitcoin at Most Overbought Level Since Record Bull Run: Bloomberg Analyst

Bloomberg Intelligence analyst Mike McGlone claimed this week that Bitcoin is at its most overbought level since its record highs in December 2017, citing BTC’s GTI Global Strength Indicator. Bloomberg writes that similar buy patterns in the past have resulted in multi-week downturns, citing McGlone as referring to Bitcoin as a bubble. McGlone states that the recent market growth came about due to a long-term price compression and low volatility, causing the price to be “released from the cage.” Bloomberg also cites David Tawil, president of crypto hedge fund ProChain Capital, who reportedly expects the market to continue its downward trend.

Top Stories This Week

Coinbase Crypto Exchange Debuts Visa Card for U.K. Customers

Major United States cryptocurrency exchange Coinbase has launched Coinbase Card, which will enable its United Kingdom-based customers to pay both in-store and online with cryptocurrency. The card itself is a Visa debit card that is powered by users’ Coinbase account crypto balances, allowing purchases to be made globally by instantly converting customers’ crypto funds into fiat. The Coinbase Card has also been released for iOS and Android, linking Coinbase accounts with the app and allowing users to select which wallet will fund their card, as well as allowing access for receipts, transaction summaries and spending categories. The card is issued by authorized and regulated electronic money institution Paysafe Financial Services Limited.

Winners and Losers

The crypto markets are holding slightly down by the end of the week, with Bitcoin around $5,099, Ethereum at $165 and XRP about $0.33. Total market cap is around $172 billion.

The top three altcoin gainers of the week are BunnyCoin, WomenCoin and Block-Chain.com. The top three altcoin losers of the week are dietbitcoin, Cryptrust and ContractNet.

Winners and Losers

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“This is a stark contrast to the development you see with things like EOS or with Ethereum with Casper, where they kind of adopt this lone samurai viewpoint.”

Charles Hoskinson, the co-founder of Ethereum (ETH) and IOHK, the company behind Cardano (ADA), speaking on the idea of development with open protocols

“I have learned about how blockchain is having a huge impact on supply chain management, and how an app in Britain can help the public report modern slavery at car washes.”

Princess Eugenie, the granddaughter of Queen Elizabeth, who founded the Anti-Slavery Collective in Britain in 2017

Most Memorable Quotations

“Blockchain is like a spreadsheet on steroids that can automate certain tasks, build greater transparency, speed and reliability, and provide a single source of transactional information.”

David R. Jarczyk, innovation principal and tax leader for blockchain at KPMG

“Now it’s a question of duration and I suspect when you have such a massive bubble, you’ll always have an overhang of people who need to sell.”

Mike McGlone, Bloomberg Intelligence analyst

FUD of the Week

Singapore Police Secure First Convictions Against OneCoin MLM Scheme Agents

Authorities in Singapore have charged two men for promoting crypto multi-level marketing (MLM) scheme OneCoin in what is touted as the first case of its kind for the city-state. The two unnamed men reportedly engaged in activities that incorporated a subsidiary in order to promote OneCoin, in addition to signing up new members and accepting investments in return for education courses and OneCoin tokens. Singapore’s central bank had previously added OneCoin to its Investor Alert List, and various governments around the world have also issued warnings against the MLM scam, advising consumers not to interact or invest in OneCoin. While one founder was recently arrested in the U.S., the other remains at large following the indictment.

Canadian Crypto Exchange QuadrigaCX Officially Declared Bankrupt

QuadrigaCX, the embattled Canadian crypto exchange, has officially been declared bankrupt. The exchange’s bankruptcy was reportedly approved by the Nova Scotia Supreme Court following the court monitor’s earlier recommendation to do so. At the time, Ernst & Young’s legal team had put forward the argument that the restructuring process should instead be shifted to bankruptcy proceedings, meaning that the monitor will now have enhanced investigative powers. QuadrigaCX had previously filed for creditor protection when it apparently lost access to its cold wallet funds following the unexpected death of its founder in December 2018.

Electrum Faces Another Fake Wallet Attack, Users Reported to Lose Millions of Dollars

Bitcoin wallet service Electrum faced another Denial-of-Service (DoS) attack on its servers this week. According to media outlets, this most recent attack has resulted in the loss of millions of dollars (the exact sum unconfirmed) with a single user allegedly losing about $140,000. The attack works by referring users to fake versions of Electrum software by employing a malicious botnet of more than 140,000 machines. The company has recommended that its users upgrade their software versions older than 3.3 and not download software from any source besides the official site. Last December, Electrum faced a similar attack that led to a loss of about $937,000 worth of Bitcoin.

Best Cointelegraph Feature

Will China Ban Crypto Mining?

After this week’s relatively unexpected publication by a Chinese government agency about a possible ban on crypto mining, Cointelegraph takes a look into how serious the idea is, and who and what will be affected in what is unarguably the largest crypto mining sector in the world.

Facebook, Twitter and Telegram: A New Crypto Paradigm or a Glorified Voucher Program?

As more unconfirmed news surrounding Facebook’s secretive crypto project surfaced this week, Cointelegraph analyzes what it would mean for one of the biggest, and possibly most untrusted, institutions in the world to issue their own cryptocurrency.

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Canadian Court Rules Drug Dealer Must Hand Over $1.4 Million in Bitcoin

A court in Toronto, Canada, has ruled that a 30-year old drug dealer must forfeit CA$1.88 million (US$1.41 million) in bitcoin used in illegal activities on the dark web.

On Wednesday, Superior Court Justice Jane Kelly ordered Matthew Phan to hand over 281.41 bitcoins to the Ministry of the Attorney General, according to a report from The Toronto Star. The funds will go to the province of Toronto.

Phan reportedly pleaded guilty last December to attempting to import a gun and possessing cocaine and other drugs for trafficking that prosecutors said were brought on dark web sites.

Kelly was quoted as saying in the report:

“It is a reasonable inference to draw that payment for such illegal narcotics sales was made using bitcoin that was found in the digital wallet on Mr. Phan’s computer.”

In a forfeiture hearing earlier this year, Phan argued that not all of his bitcoin was used for illegal activities and that some were used for trading gold, the Star reports. He also claimed to be selling the cryptocurrency on various cryptocurrency exchanges.

As a result, in Wednesday’s ruling, Kelly said that, of the 288 bitcoins, she was “not satisfied” that 7.23 bitcoins (worth around $36,000) were proceeds of crime and that they would not be forfeited.

Phan, whose computer holding the bitcoins was seized in 2015, is yet to be sentenced.

Handcuffs and bitcoin image via Shutterstock 

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Canadian Municipality Set to Accept Bitcoin for Property Tax Payments

A municipality in Canada is set to accept bitcoin for property tax payments starting next month as part of a one-year trial.

The Town of Innisfil, Ontario, announced Thursday that the cryptocurrency payment option will be offered in partnership with Toronto-based digital assets trading platform Coinberry.

Starting April, approximately 36,000 residents of the town will now see bitcoin (BTC) as a payment option on the municipality’s website. Other cryptocurrencies like bitcoin cash (BCH), ether (ETH), litecoin (LTC) and XRP could also be added in the future, according to the statement.

Using Coinberry’s cryptocurrency payment processing solution Coinberry Pay, residents will be able to pay taxes in bitcoin in Innisfil’s digital wallet.

Coinberry will then process those funds “in accordance with strict adherence to existing financial regulatory requirements” and “instantly” convert them into Canadian dollars and transfer it to the municipality. Coinberry is a Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)-registered firm.

Innisfil mayor Lynn Dollin said:

“There’s no doubt that cryptocurrency is growing in usage and popularity. By getting into this now, we are making sure our municipality is ahead of the game, and signalling to the world that we truly are a future-ready and innovative community.”

Back in November, the U.S. state of Ohio also allowed businesses to pay taxes in bitcoin, in partnership blockchain payments processor BitPay. Ohio is also expected to extend the service to individuals in the future.

Canada dollar, bitcoin image via Shutterstock

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QuadrigaCX’s Legal Representatives Create Affected Users Committee

QuadrigaCX’s legal council has formed a dedicated committee to help provide guidance in representing affected clients of the exchange.

A new committee appointed by law firms Miller Thomson and Cox & Palmer will provide guidance in representing affected clients of major Canadian cryptocurrency exchange QuadrigaCX. The development was announced in a court notice on March 19.

In the filing, Miller Thompson reveals that it has established the Official Committee of Affected Users of now-shuttered QuadrigaCX, comprising of seven users affected by the shutdown of the trading platform following the sudden death of its co-founder, Gerald Cotten, last December.

At the time, the exchange reported that it was not able to access its cold wallet holdings, as Cotten had purportedly been the sole person with access to wallets’ keys. With the allegedly inaccessible crypto accounting for the vast majority of the exchange’s assets, QuadrigaCX now owes over $198.4 million to an estimated 115,000 users.

The newly formed committee is set to help the law firms represent all affected users in the court proceedings against QuadrigaCX. The committee can reportedly “retain advisors, experts and consultants to provide advice to and to assist the Official Committee of Affected Users and Representative Council in the exercise of their duties in relation to the Purpose.”

The committee members have varying fields of expertise and include such industry players as Eric Bachour, a creditor of now-defunct cryptocurrency exchange Mt. Gox, and Magdalena Gronowska, who has advisory experience in economic policy development for the Government of Ontario.

Miller Thomson and Cox & Palmer were appointed as QuadrigaCX’s legal representatives in February by a decision rendered by the Supreme Court of Nova Scotia, Justice Michael Wood. The representative council was set to be responsible for “managing communications with users; acting as user liaison for the monitor [Ernst & Young]; advocating for user interests before the court; identify[ing] potential conflicting interest amongst users; and advocating for user privacy.”

As Cointelegraph reported yesterday, QuadrigaCX’s co-founder Michael Patryn was reportedly involved in multiple criminal activities in the past. Patryn and his partner, Lovie Horner, remain two of QuadrigaCX’s largest shareholders, although he has not had any involvement in the company’s operations since 2016 due to a fundamental disagreement with Cotten.

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Canadian Police Asks for Public Assistance to Identify Bitcoin Fraudsters

The Calgary Police Service Cybercrime Team has asked the public to assist in the identification of four individuals allegedly involved in multiple fraudulent Bitcoin transactions.

Canadian police are seeking information on individuals alleged to be involved in defrauding Bitcoin (BTC) ATMs (BTMs), according to an announcement published by the Toronto Police Service on March 13.

The Calgary Police Service (CPS) Cybercrime Team has asked the public to assist in the identification of four individuals allegedly involved in multiple fraudulent transactions made within the country and targeting one Canadian Bitcoin firm. The CPS initially received the information in October 2018.

The press release states that in September of last year, the suspects allegedly made 112 fraudulent transactions at BTMs in seven Canadian cities, including Calgary, Toronto, Montreal, Ottawa, Hamilton, Winnipeg, and Sherwood Park. The CPS believes that the suspects made “double-spend” attacks.

In such attacks, the suspect allegedly withdrew money from a kiosk and subsequently cancelled their transaction remotely before the BTM operator could process the withdrawal. The fraud reportedly resulted in CA$195,000 ($146,666) in losses to the company.

Recent research published by crypto analytics company CipherTrace in January revealed that about $1.7 billion in cryptocurrency had been obtained via illicit means in 2018. Of that $1.7 billion, over $950 million was stolen from crypto exchanges, representing a 3.6 times increase over 2017. In 2018, at least $725 million was lost to scams such as ponzi schemes, exit schemes and fraudulent initial coin offerings.

At the same time, analytics company Chainalysis reported that cryptocurrency-related crime has decreased over the past few years, only accounting for 1 percent of all Bitcoin transactions in 2018. Chainalysis also made a prediction of criminal trends in the space in 2019, outlining increased usage of decentralized platforms and efforts to move and launder money around the world through cryptocurrencies.