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Estonia Revokes 500 Crypto Business Licenses in a Move Against Illegal Money Laundering Activities

According to a Bloomberg report, Estonia has revoked licenses from 500 crypto companies. This is an estimate of 30% of the entire number of approved crypto companies in the country. Regulatory authorities embarked on such a massive action as part of combating illicit financial transactions after Danske Bank was associated with a $220 billion money-laundering scandal.

The regulator has crypto in its sights

Madis Reimand, the Head of the Estonian Financial Intelligence Unit (FIU), said that the crackdown was a pre-emptive strike meant to clean up the crypto industry. The FIU is responsible for the issuance of licenses. Reimand mentioned that the idea is not to ban the crypto sector at all, but rather to tighten regulations so that to prevent risks connected with money laundering.

The regulator has shut down firms that failed to begin operations in the country within six months of obtaining a license.

Reimand stated: “This is a first step in tidying up the market, allowing us to take care of the most urgent issues by permitting operations only for companies that can be subjected to Estonian supervision and coercive measures.”

The massive crackdown comes after Danske Bank, Denmark’s largest lender, was facing allegations of being involved in a money-laundering scandal. The bank was accused of facilitating $223 billion of laundered money through its branch in Estonia. The scandal exposed core flaws in the authorities, thus forcing them to turn attention to cryptocurrency companies, a sector regarded as high risk.

Until now Estonia has been a haven for cryptocurrency firms. The nation is among the first countries in Europe to liberalize cryptocurrency in 2017, licensing over 1,400 companies within three years.

But regulatory authorities have become stricter to curtail international risks associated with money laundering. Recently the Estonian parliament passed a law, which makes it difficult to get a crypto license.

The new regulations state that permits will now be given after three months at a cost of €3,00 ($3,715). In the past, it took 30 days to get the same license for €300. Crypto firms registered in Estonia will also have to register their entities operating outside the country. Reimand warned that more than 50% of the remaining crypto firms may lose their license because they have no operations in Estonia and their managers are outside of the country.

FinCen Director warns crypto firms are not above anti-money laundering laws

Last year, FinCen (The United States Financial Crime Enforcement Network) director, Kenneth Blanco, blasted crypto companies by warning crypto-related businesses that they are not exempted from the AML (anti-money laundering laws). He emphasized that fintech companies that provide currency users anonymity are subject to the same regulations as traditional companies. His comments seemed to target crypto companies that provide anonymous payment services that could hide intended criminal activities.

Thanks to blockchain innovation. In recent years, cryptos have exploded in popularity. Startups have raised millions of dollars to issue digital currencies in exchange of money. Anyone with a digital wallet and an internet connection can be a part of a coin sale business startup. That leaves plenty of opportunities for people to commit financial terrorism activities or launder money, especially in nations where corruption is rampant.

US Department of Justice Works with International Agencies to Crack Down NetWalker Ransomware

US authorities have disrupted a major ransomware operator that targets hospitals across the world amid the COVID-19 pandemic. The authorities have managed such efforts through the assistance of Chainalysis blockchain firm.

The US Department of Justice, the Bulgarian General Directorate Combating Organized Crime, and the Bulgarian National Investigation Service have worked together to track down and disrupt NetWalker hardware in Bulgaria. The authorities arrested Canadian national, Sébastien Vachon-Desjardins, who is alleged to have obtained $27.6 million through ransomware attacks using NetWalker ransomware operator.

On January 27, the US Department of Justice revealed that they have seized an estimate of US$455,000 in cryptocurrency that had been paid by victims of three different attacks. According to the report, Bulgarian authorities seized a “dark web hidden resource” used by NetWalker ransomware affiliates.

As per the report, NetWalker operates a ransomware-as-service model that features “affiliates” and developers. NetWalker ransomware attacks have victimized hospitals, companies, universities, municipalities, and even the healthcare sector operating during the coronavirus pandemic.

NetWalker gang is alleged to have attacked several targets in Canada, including the Northwest Territories Power Corporation, a Canadian Tire store in B.C., and the College of Nurses of Ontario.

Nicholas L. McQuaid, an acting assistant attorney general with the Justice Department, stated:

“We are striking back against the growing threat of ransomware by not only bringing criminal charges against the responsible actors, but also disrupting criminal online infrastructure and, wherever possible, recovering ransom payments extorted from victims.”

Court records indicate that Vachon-Desjardins was charged with a crime in Florida on several counts including conspiracy to intentionally cause computer damage and commit computer-related fraud.

Can Regulations Make Cryptocurrency Safer?

As ransomware spreads, the rates of victimization rise. Hospitals, educational institutions, banks, corporations, individuals, and government agencies have all been held hostage by ransomware attacks and blackmailed into paying out in Bitcoin or other cryptocurrencies in order to retrieve their data. Just before the US election, at least five hospitals were hit by ransomware attacks and security experts warned that more hospitals could be victims as well.

As crypto-assets go mainstream, bad actors take advantage of them to commit crimes. So far there have been calls for crypto regulation, but poor regulation is making it more difficult for crypto businesses to thrive. More nations now realize that cryptocurrencies are an inevitable part of their financial systems, so they are beginning to regulate it rather than restrict it. Businesses frequently see regulation negatively, but better regulation can work. Healthier regulation would speed mass adoption of cryptocurrencies by traditional financial institutions, thus legitimizing crypto assets for many.

Jim Cramer Sold Most of His Bitcoin Holdings but Willing to Buy Again If Prices Fall to Near $10,000

Jim Cramer, The CNBC host, stated that he sold almost all of his Bitcoin holdings amid the crypto volatility. However, the TV host and former hedge fund manager said he would purchase Bitcoin again if it were really to the tank.

On Tuesday, Bitcoin experienced a rebound like a roller coaster, after plunging more than 9%, trading below $30,000 before retracing its level above the mark.

In an interview with CNBC’s “Squawk on the Street” on Tuesday, Cramer said that he would come back:

“I would go back in if I could get it at $10,000, $11,000, $12,000 — where I bought a lot”,

Cramer once revealed that he has “sold almost all of my Bitcoin on Monday.” He claimed that it was unnecessary to need virtual currencies.

The plunge was a continuation of recent selling off as China expanded its crackdown on cryptocurrency mining and urged financial institutions not to offer service to the industry.

The bitcoin price dropped, and Cramer stated that he would have expected the opposite, given China’s restrictions on crypto mining (the nation has historically led Bitcoin global mining efforts).

“When you limit mining, (the price) should obviously go up,” Cramer stated.

“I’m saying that this is not going up because of structural reasons,” Cramer said, referring to Bitcoin’s value.

One factor that influencing Crammer’s move was China’s toughening stance towards crypto assets, intensifying crackdown on crypto mining and ordering local banks and payment platforms not to offer services to crypto-related businesses.

He raised concerns about Bitcoin’s role in the Colonial Pipeline ransomware payment and other ransomware cases, which have a stark reminder of the unregulated nature of cryptocurrencies.

Cramer said. “I think the Justice Department and the FBI and the Federal Reserve and Treasury could coalesce and say, ‘OK guys, if you pay ransomware, we’re going to go after you.'”

The two government forces gave Cramer enough pause that he decided to offload most of his Bitcoin.

Taking Profits on Big Investing

Jim Cramer has been a Bitcoin advocate for quite some time. In February, he turned bullish on the Bitcoin balance sheet, stating that it’s almost irresponsible not to include Bitcoin on balance sheets following Tesla’s buy.

Also, he stated that he’d be open to being paid in Bitcoin instead of cash in the recent past. He previously disclosed that he invested $500,000 into Bitcoin after becoming frustrated with gold.

In April, he paid off a mortgage using profits from his investment in Bitcoin.

Last month, Cramer sold half of his Ethereum holdings to purchase an all-electric Hummer. He did not specify the amount he used to buy the Hummer Cramer, but the model starts at $100,000.

However, his recent sell-off does not mean that he is done with crypto investment. On the contrary, he is still in the game. Yesterday, Cramer said that he would be sitting on the sidelines to watch the performance of crypto prices.

Topnotch Bitcoin Mining Machine Manufacturer Bitmain Suspends Sales due to Chinese Crackdown

The world’s top bitcoin mining machine manufacturer Bitmain Technology Co., Ltd. announced that it would suspend the sale of mining machines worldwide in response to the Chinese government’s recent crackdown on domestic mining targetting domestic miners.

The company stated that it aims to help miners who have exited the mining industry sell at a better price to stabilise local prices.

According to a Bloomberg report on Wednesday, the world’s largest Bitcoin machine manufacturer’s top rig prices have depreciated by nearly 75% since April.

To alleviate the decline in the price of mining machines, Bitmain has decided to stop the sales of its encrypted mining equipment under careful consideration and reduce the supply of mining machines on the market.

The company did not disclose when the business will resume.

The decline in the price of mining machines is closely related to the corresponding measures China has taken against cryptocurrencies. Earlier, China intensified law enforcement against domestic Bitcoin mining activities. Bitcoin mining sites in Sichuan Province were reportedly massively disconnected and lost their abilities for further mining operations,

On June 21, the People’s Bank of China ordered the country’s major financial institutions, including the Agricultural Bank of China, to stop conducting crypto transactions, causing the oscillation to the cryptocurrency market, which subjects to a massive sell-off of Bitcoin.

China Shuts Down Over 90% BTC Capacity, Sichuan BTC Sites Massively Offline

China intensified law enforcement against domestic Bitcoin mining activities. Bitcoin mining sites in Sichuan Province were reportedly massively disconnected and lost their abilities for further mining operations, according to local media’s coverages.

The disconnection was reportedly occurred since Sunday, citing local media’s coverages. Some firms even closed their facilities prior to the outage.

According to Global Times, The Sichuan Provincial Development and Reform Commission and the Sichuan Energy Bureau issued a joint notice last Friday. Local authorities requested a total halt to Bitcoin mining activities, ordering local electricity companies to “scree, clean up as well as terminate” mining operations, without any further electricity supply provision on Sunday, followed by conducting self-inspection to report their results by this Friday. 26 firms are listed and alleged as crypto mining entities. The authority forced them to close, including Heishui Kedi Big Data Tech Co and Kangding Guorong Tech Co.

Over 90% BTC Mining Capacity Lost

The ban means more than 90% of China’s Bitcoin mining capacity is estimated to be shut down, at least for the short run, the paper said. Local netizens described this incident as a collective “mining accident” or even “the end of an era”.

In southwestern China, Sichuan province is counted as the biggest Bitcoin mining hub in China or worldwide. Unlike thermal power generated in Inner Mongolia and Xijiang province, BTC mining activities in Sichuan mainly are generated by hydropower, which is more environmentally friendly and sustainable, according to local data.

Shentu Qingchun, CEO of Shenzhen-based blockchain company BankLedger expressed his disappointment with the latest crackdown.

“We had hoped that Sichuan would be an exception during the clampdown as there is an electricity glut there in the rainy season. But Chinese regulators are now taking a uniform approach, which would overhaul and rein in the booming Bitcoin mining industry in China.”

Some analysts believe China’s latest move is intended to tighten regulatory scrutiny of digital currency trading and prevent systematic financial risk and prohibit money laundering such as these illegal activities. In addition, the market believes that China aims to promote its digital currency (e-CNY) against cryptocurrencies in the long term.

Meanwhile, Bitcoin price was trading down to $34,988 during the intraday, hit the low of $33,429 in the past 24 hours. According to Bloomberg’s coverage, some analysts pointed out that the hashrate in China dropped significantly, encountering the death-cross, i.e. the 50-day moving average drops below the 200-day moving average.

Ulrik K.Lykke, Executive Director at Crypto/Digital Assets Fund ARK36, told the Blockchain.News that this is not the first time Chinese policies have administered a shock to the markets and will unlikely be the last.

“The development that seems to exert the most influence on the bitcoin price lately is the Chinese government’s crackdown on bitcoin mining, which has already resulted in a 30%-drop in the hashrate on the Bitcoin network.

Nevertheless, Antony Portno, the founder of TradersOfCrypto, commented:

“The dropping hashrate, could be seen as an opportunity for Bitcoin to change what it is doing and become more eco-friendly, previously bans on mining were viewed negatively but this should be seen as an opportunity for more diversified mining.”

Portno suggests the loss of thousands of bitcoin mining farms means Bitcoin will be less competitive as the network is smaller in the short term. However, he believes mining will continue in China as the ban will focus on larger farms. The consequences on Bitcoin still need other indicators with the market sentiment and further observation.

Similar harsh ban actions in others key mining hubs in northern regions also took place recently. In addition, some areas in north-western China also have blackout due to natural disaster of flooding, affecting the hashrate of mining pools.

Lykke believes negative factors are causing a negative market reaction in the short term. However, that could be net-positive in the long term. As miners spread to other locations, they will likely choose places with secure access to cheap energy sources.

As a result, the hashrate will start recovering, and the network will become even more stable. Additionally, mining will become more decentralized and, likely, more based on clean, renewable energy sources.

China Anhui Province Becomes the Latest Region to Crack the Whip on Crypto Mining

Anhui, an eastern Chinese province, has become the latest region to shut down all crypto mining activities, citing an acute power shortage. Crypto mining continues to be unwelcome on Chinese soil as authorities continue cracking the whip on this sector.

Intensified crackdown on Bitcoin mining

According to Reuters, citing a news portal operated by state-owned Hefei Media Group. The announcement said :

“Anhui will shut down all crypto mining projects in a cleanup aimed at reducing power consumption, as the province faces a ‘grave’ supply shortage of electricity.”

China’s State Council made a declaration to intensify Bitcoin (BTC) mining and trading crackdown in late May. Anhui, therefore, becomes the latest Chinese province to clamp down on crypto mining, following the footsteps of Xinjiang, Inner Mongolia, and Sichuan.

In June, Chinese authorities disconnected BTC mining sites in Sichuan. As a result, more than 90% of China’s crypto mining capacity was hampered. Before this crackdown started, China accounted for nearly 70% of worldwide Bitcoin production.

Bitcoin’s hashrate dips

The stern crypto mining clampdown in China has affected the hashrate in the BTC network.

According to data from Blockchain.com, BTC’s hashrate nosedived from a record-high of 180.7 million terahashes per second hit in mid-May to approximately 116.2 million in late June. The hashrate is used to measure the processing power of the BTC network. It allows computers to process and solve problems that would enable transactions to be approved and confirmed across the network.

The Chinese restrictions have also affected the entire crypto market because trading volumes in exchanges dropped by more than 40% in June. As a result, Bitcoin’s average return for 6-month investors slumped to a low of -27.81%.

Nevertheless, some crypto experts had previously pointed out that BTC mining might become more accessible and more lucrative following China’s restrictions. They acknowledged that Bitcoin miners who remain active post-China’s crackdown are anticipated to find more profitable. Once more miners exit the BTC network, fewer computational guesses per second are needed to find the mathematical solution.

Changpeng Zhao Says He’s Willing Step Down as Binance CEO Amid Global Cryptocurrency Crackdown

Binance, the world’s largest crypto exchange by trading volume, is looking for a senior person with a solid regulatory background to become its new CEO.

Speaking at a virtual press conference, Changpeng Zhao, CEO of Binance Exchange, has stated that he is willing to step down from his role. At the same time, the firm seeks to become a regulated financial institution. Yet, the CEO stated that he had no immediate plans to quit his role, but the firm has a succession plan.

“We’re going to pivot to be a fully regulated financial institution going forward,” Zhao said and added that he would be “very open” to getting a replacement CEO with more regulatory experience.

While Zhao emphasised that there are no immediate plans for his succession, he said that the firm was “keeping our options open.”

“I’ll be honoured to continue to run Binance as a regulated financial institution until we find somebody who may do a better job.”

Zhao said that the firm aims to create several regional headquarters across the globe and will seek licenses wherever they are available. In the past, he stated that Binance has no official headquarters. Zhao further stated that he will always contribute to Binance and the BNB ecosystem as he doesn’t have to be CEO.

Binance Working to Strengthen Its Compliance

Early this month, Zhao admitted that problems in the company are partly due to its rapid growth. During that time, Zhao acknowledged that Binance had grown very fast, and they have not always got everything exactly right, but they are improving and learning every day.

He said that the firm is actively hiring more talent and putting more processes and systems to protect its users and enhance its commitment to regulators.

Binance has been facing regulatory issues in recent weeks. In late June, the UK’s regulator banned Binance’s British unit from undertaking any regulated activity in the country. Binance was one of several companies that withdrew their applications from the UK’s temporary licensing regime because of failing to meet anti-money laundering requirements.

Regulators in Italy, Canada, Japan, and the Cayman Islands have also clamped down on the company, warning that Binance is not approved to operate in the nations.

Binance has taken measures to salvage itself from the issues mentioned above, including building out compliance partnerships, expanding its international compliance team and advisory board by 500%, and localising operations and the business to comply with local regulations.

Bitcoin, Ethereum, Solana And Other Crypto Prices Further Plunge Following China’s Fresh Crypto Ban

Today on Friday, September 24, prices of all cryptocurrencies have plummeted amid the announcement by China’s Central Bank that all crypto-related transactions are illegal and must be banned in the country.

Before China’s announcement, most cryptocurrencies were indicating good signs of recovery after the Monday crash, which wiped almost $200 million from the cryptocurrency market.

On Friday morning, most cryptocurrencies stabilized their value after the crash that happened on Monday. Bitcoin was trading at $44,985.54 per coin, up by 2% in the last 24 hours; Ether, the second-largest cryptocurrency and the coin linked to Ethereum blockchain, surged its value to $3,102, up 1.27%. Other altcoins were holding the cards up by about 1.80%.

However, on Friday afternoon, the People’s Bank of China (PBOC) released a statement, saying that all private virtual currencies like Bitcoin, Ethereum, and other altcoins do not enjoy the same legal status as legal tender, are not legally repayable, therefore should not be traded as circulating currencies in the market.

As a result, the news from the People’s Bank of China has triggered a further crypto market crash, which has seen Bitcoin dropped 4% to about $42,560 in the space of two hours, Ether lost 7.5% to plunge at $2,881, Cardano down by 3% to hit $2.16, Ripple’s XRP declined 7% to 92 cents, and Dogecoin dropped 7% to stand at 20 cents.

While experts stated that the crypto crash that happened on Monday, September 20, did not occur in a vacuum as stock markets also affected as well as China’s property market, some now point to the cause of the fresh plunge as “FUD” over Chinese bans – a common classic source of crypto price pressure.

For example, the popular crypto analyst Michaël van de Poppe said: “Markets are always reacting so heavily to FUD. Impressive.”

George Zarya, CEO at digital asset prime brokerage and exchange BEQUANT, said:

“This time the point was made very clear that China will not support cryptocurrency market development as it goes against its policies of tightening up control over capital flow and big tech.”

Similar comments have also been said, stating that global demand for cryptocurrencies plunged since the start of this week following the possible collapse of China’s second-largest property developer, Evergrande, which frightens investors and has caused the fall of global equity markets.

Meanwhile, the executive director of crypto/digital assets hedge fund ARK36, Ulrik Lykke, said that China has been going through a rough economic patch recently due to the uncertainty surrounding the Evergrande debt restructuring.

However, experts expect the crypto market to witness some pullback in the coming days.

Lykke said that such a scenario wouldn’t be too surprising as Bitcoin and other cryptocurrencies are increasingly being recognized and actively used as a hedge against uncertainty and possible fiat currency debasement. He stated that the Chinese authorities are willing to use Bitcoin as a hedge despite the governmental ban, which would tell just how much long-term confidence investors already have in the asset.

“While each time China’s crackdown on crypto happens, the markets react with a price drop, each time the effect is smaller and more short-lived”.

Lykke further stated that investors should be careful not to make emotional decisions based on this trending news story. On-chain fundamentals still indicate that bull market continuation in Q4 is likely.

Meanwhile, Katie Stockton, the founder and managing director of Fairlead Strategies, also recently said that Bitcoin’s uptrend remains intact over the long term. “The long-term uptrend still has a hold on bitcoin, with our monthly indicators pointing higher, putting short-term volatility into a bullish context,” Stockton said.

China’s Ethereum Mining Pool Sparkpool To Stop Offering Services Following PBOC’s Clampdown on Crypto

Sparkpool, one of the world’s largest Ethereum mining pools, is shutting down its shop amid China’s move to ban crypto assets within its jurisdiction.

On Monday, September 27, the China-based Sparkpool, the second-largest Ethereum mining pool in the world, announced that it had stopped offering services to new users in China as of September 24 and also plans to entirely suspend services to all its existing users in china and abroad as of Thursday, September 30.

Hangzhou-based Sparkpool stated the move is aimed to protect the safety of user assets in response to regulatory policy requirements announcement by the People’s Bank of China (PBOC) last Friday that effectively banned cryptocurrency.

In other words, Sparkpool wanted to be maximally compliant with regulatory requirements. Last Friday, China tightened its crackdown on cryptocurrencies and crypto-assets, declaring all cryptocurrency-related activities illegal.

The communist party-ruling central bank also affects businesses outside the country, advising overseas exchanges not to offer cryptocurrency services or conduct digital transactions with China’s people. The PBOC has also stated that it will work with domestic agencies to carry out comprehensive monitoring.

Sparkpool launched in 2018 and eventually became one of the world’s largest mining pools for ether. It is the second-largest miner in terms of the hashrate on the network, behind Ethermine, the world’s largest Ethereum mining pool.

Sparkpool’s mining power currently contributes about 142 TH/s, about 22% of Ethereum’s global hashrate, just under Ethermine’s share of 24%.

China advised local authorities to crack down on crypto mining in May, but Chinese miners had quietly resumed Ethereum mining operations over the last few months.

Other firms also have followed SparkPool’s move. On Sunday, September 26, two of the world’s largest Bitcoin exchanges stopped taking users from China following the renewed cryptocurrency ban by the PBOC. Huobi announced last Sunday that it would stop serving existing users in China by the end of this year. Binance also has blocked new registrations of accounts by mainland customers.

KuCoin Terminates Accounts of China’s Users, Following Other Cryptocurrency Exchanges

KuCoin cryptocurrency exchange has announced its intention to close all accounts associated with customers of mainland China, following the People’s Bank of China (PBOC) recent reviving its fresh crackdown on cryptocurrency trading.

On October 3, the Seychelles-based crypto exchange stated that all users from mainland China would have to close their accounts and withdraw their funds from the platform before December 31 2021.

Kucoin cited the decision triggered by the announcement recently made by Chinese authorities in late September. After China’s Central Bank announced the crackdown, KuCoin stated that it began conducting an internal review to assess what would be the most convenient action for its customers. As a result, the firm decided to leave China as the only option which complies with local regulations.

KuCoin stated: “To protect the rights and interests of users, we strongly recommend that relevant users transfer their assets to other platforms before 24:00 (UTC+8) on December 31, 2021”, and it will continue reminding them to do so up until such a date.

The exchange said that it has 8 million users on its platform, and according to data from CoinMarketcap, KuCoin traded $1.7 billion in the last 24 hours.

Exchanges Exiting China

KuCoin is the third large crypto exchange that made a similar announcement less than two weeks after China’s central bank doubled its cryptocurrency clampdown.

On September 26, the Binance exchange blocked new account registrations using Chinese mobile phone numbers, while Huobi Global stated that it would remove all mainland Chinese accounts by the end of the year.

More than 18 platforms offering services related to cryptocurrency have either announced that they are exiting the market in China or are now inaccessible. Another at least 11 firms have reportedly halted providing services to Chinese customers.

On Friday, September 24, the People’s Bank of China banned all cryptocurrency-related transactions. It warned employees of overseas-based exchanges that they would be investigated and called for increased censorship on crypto information providers.