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Unlicensed Bitcoin Exchange Operator Faces Up to 5 Years in Prison in the US

William Green, a 46-year-old American citizen of New Jersey has been indicted on one count of operating an unlicensed money transmitting business through his website, Destination Bitcoin.

In a press release by the Department of Justice stated that Green was involved in the business of selling over $2 million worth of Bitcoin through his unlicensed money transmitting business. He received money from his customers, which he then deposited into bank accounts under his name. Green later converted the money he received into Bitcoin and charged his customers for a fee.

According to the US federal law, any individual who owns or controls money transmitting business must register with the Secretary of Treasury including when Bitcoin is sold for cash. This applies to all involved businesses whether or not the business is licensed as a money transmitting business in any state in the U.S.

The charges for Green’s alleged crimes of operating an unlicensed money transmitting business carries a maximum penalty of 5 years in prison and a $250,000 fine. Green is set to appear before the U.S district judge but the date has not been set.

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US Declares China a 'Currency Manipulator' while Bitcoin Sees Growth

The US Declares China a ‘Currency Manipulator’

The US Treasury Department officially designated China as a “currency manipulator” on Monday following the most significant stock market losses the US has seen in 2019. There was a 2.9% plunge overnight in the Dow Jones Industrial Average, Nasdaq down 3.4% while Bitcoin is up 3.2% as tweeted by Tim Draper.

In a Tweet posted by Donald Trump, he mentioned that China deliberately weakened the Yuan to “steal our businesses and factories, hurt our jobs, depress our workers’ wages and harm our farmers’ prices.”

China allowed the Yuan to sink below 7 to the US dollar, to its lowest level in 11 years to retaliate for US threats of new tariffs on Chinese products. Beijing announced that it would suspend purchases of US agricultural goods.

No country has been officially named a “currency manipulator” by the US since 1994 by Bill Clinton towards China. Under the law established in 1998, the Treasury Department must name any countries that it finds to be using their legal tender to gain trading advantages over the US.

Bitcoin’s Growth Is Due to an Inflow of Chinese Capital

CEO of Circle Jeremy Allaire suggested that this growth was due to an inflow of Chinese capital, given the correlation between Bitcoin’s gains and the sinking of the Yuan. Although Bitcoin is not easily accessible in China, many investors go through offshore firms to make purchases.

Chart showing BTC/RMB, Bitcoin’s surge after Trump’s announcement. Chart via CoinGecko

China banned all crypto-related activities in 2017 as there was a wave of initial coin offerings. Recently, China has been softening its stance on cryptocurrencies, as it was announced in a court in Hangzhou that Bitcoin is virtual property.

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SEC Reschedules Decision-Making on Bitcoin ETF Proposals

The Securities and Exchange Commission (SEC) in the United States once again delayedon deciding on the three Bitcoin exchange-traded fund (ETF) proposals according to the release of documents from the regulatory agency on Monday.

The three ETFs proposed earlier in the year include Bitwise Asset Management, VanEck/Solid X and Wilshire Phoenix filed with exchanges NYSE Arca and Cboe BZX. The proposed ETFs aimed to be the first investment vehicles based on Bitcoin.

The next decision on Wilshire Phoenix is scheduled for September 29, while the final decisions of Bitwise and VanEck/SolidX are expected on October 13 and October 18 respectively.

The regulatory agency has been putting off making decisions on the Bitcoin ETFs, referring to the concerns of “fraudulent and manipulative acts and practices” in crypto trading.

Back in May of 2019, Dave Nadig of ETF.com mentioned, “it is clear the SEC is still in information gathering-mode.”

In an attempt to address these concerns, Bitwise published multiple reports indicating the actual Bitcoin market is much smaller, more regulated, and better surveilled than expected.

Bitwise previously commented that the bitcoin market is “significantly smaller and significantly more efficient” than observed.

Bitwise’s ETF proposal has received support from several influential blockchain leaders, including Spencer Bogart from Blockchain Capital, Matthew Walsh from Castle Island Ventures, Sam McIngvale of Coinbase Custody, and Kristin Smith from the Blockchain Association.

Walmart Files Patent Application for Blockchain-Based Drone Communications

The American commerce giant Walmart filed for a patentapplication for a drone communication system entitled “Cloning Drones Using Blockchain” in January 2019. The United States Patent and Trademark Office published the patent on August 1.

Blockchain technology is utilized to transmit information such as drone identification numbers, flight speeds, flight routes to other drones.

The filing outlines a system that allows information being transmitted from a drone that encrypts and stores the operational parameters to another that decrypts and configures to those parameters.

The patent explains the benefit of blockchain technology used for these drones:

“A blockchain ledger may store any kind of information that may be stored in any other format or medium, for example, a large list of instructions of different types, navigational information, and maps. In such a way, a same software profile may be deployed across the cloned drones.”

Walmart has been showing increasing interest in blockchain technology as earlier this month; a patent was filed proposing a digital currency similar to Facebook’s Libra.

BTC Breaks Its Strong $10,000 Support Amidst US-China War Trade Cool Off

The price of Bitcoin has taken a serious hit in the past few days as the largest cryptocurrency has dipped below its supposedly strong support of $10k and bounced back up.

Market visualization. Source: Coin360

The relief of the market as the tension eases off with Bitcoin taking the hit

As the data reflects from coin360 shows, we see that investors have not just had a gloomy week but a have been bashed during the entire week.

As it has been observed in recent months Bitcoin has been seen to have developed a pattern; Bitcoin reversed its success from the previous weekend when geopolitical uncertainty and fiat currency weakness and within several jurisdictions had pushed its price above the $12,000 spot.

Hong Kong and Argentina took the lead as regards fueling this theory which critics of Bitcoin such as Peter Schiff had taken the opportunity to refute as the markets fell. He made a statement through a tweet on Tuesday saying that:

“Now that trade tension with China has eased, the pressure on the yuan is off. Those who bought Bitcoin to speculate on Chinese safe-haven buying, which never happened, are taking their chips off the table,”

On the other hand, Bitcoin advocates on social media, have been seen to be more open to other explanations. According to a survey conducted by a regular analyst and trader Josh Rager delivered a rare even split regarding the future Bitcoin price. In the survey, amongst the 35000 participants, 50% of them had voted for and against the price of Bitcoin taking below $10000 in the short term.

Blockchain Favored by Andrew Yang, America’s 2020 Presidential Hopeful

Andrew Yang, who is eyeing America’s presidential election in 2020, has asserted that blockchain should be incorporated as it will modernize the voting structure. Yang believes that blockchain will propel authentic democracy, as well as boost Americans partake in the voting exercise.

Yang stipulates:

“It’s ridiculous that in 2020 we are still standing in line for hours to vote in antiquated voting booths. It is 100% technically possible to have fraud-proof voting on our mobile phones today using the blockchain. This would revolutionize true democracy and increase participation to include all Americans – those without smartphones could use the legacy system and lines would be very short.”

If elected, Yang has vowed to enhance the voting structure using technological innovations such as blockchain. He also asserts that this approach will make voting easier and more authentic.

Yang’s interest in the crypto sphere can be attested by accepting bitcoin donations in his campaign platform. His supporters orchestrated this initiative after crafting a powerful PAC (political action committee). At the beginning of the year, Yang asked for a precise direction about cryptocurrencies.

Among the candidates, Yang has emerged to be a crypto enthusiast, and this can be ascertained by the way he wants blockchain embraced in the election.

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US Congress Encouraged to Regulate Crypto Sector Under Bank Secrecy Act

A Washington DC-based strategic advisory firm, the Financial Integrity Network (FIN), pushed the United States Congress to regulate firms in the cryptocurrency sector under the Bank Secrecy Act (BSA).

The FIN recommended that virtual asset service providers (VASPs) should be regulated based on the type of service that they provide, as stated in testimony. The testimony was published before a hearing set to be held by the US Senate Committee on Banking, Housing and Urban Affairs’ subcommittee on National Security and International Trade and Finance on Sep 3.

The hearing, “Human Trafficking and its Intersection with the Financial System” will be reviewing ways to prevent financial transactions related to human trafficking and to detect these transactions swiftly once they have occurred.

David Murray, the FIN’s vice president for product development and services, will be testifying among others. He noted that some VASPs are currently regulated as money transmitters under the BSA. He stated:

“Some VASPs are currently regulated as money transmitters under the BSA. Others are not regulated at all. Even for those VASPs currently regulated as money transmitters, the regulations are insufficient to protect virtual assets from exploitation.”

Murray also mentioned that imposing the recommended regulations on people and entities would make it more difficult for existing implementations of blockchain-based payments to continue to operate.

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Department of Homeland Security (DHS) Trials Blockchain Solution for Canadian Borders

The DHS has implemented a number of rapid POC projects to investigate the usefulness of blockchain in border management.

In a novel and innovative approach, the DHS is working directly with trade members from the Commercial Customs Operations Advisory Committee (COAC) working group, including customs broker Customs Direct LLC. In this role, Customs Direct has partnered with blockchain developer Morpheus.Network to fast track the technical evaluation of blockchain as a key factor in improving efficiencies on border management.

Dan Weinberger, CEO of Morpheus.Network welcomes the evaluation by DHS. “We have trialed our secure blockchain technology across a number of supply chain sectors. We are confident that we can deliver simple-to-use yet trusted solutions for different areas of border management. “

The first POC investigated free trade in the context of the North American Free Trade Agreement (NAFTA). The DHS and Customs Border Protection (CBP) opted for a less formal but much more rapid approach by seeking POC participants directly from the COAC working group. Selected member Customs Direct, with its Morpheus.Network partner, worked through the POC and applied their experience to show the benefits of Distributed Ledger Technology.

Jim Masloski, CEO of Customs Direct praised the approach taken by the DHS. “I’ve more than 30 years’ experience in custom brokerage and it is a complex area compounded by many touchpoints and legacy infrastructure. By adopting a rapid evaluation process the DHS can make decisions based on technology that is available today. This is a game-changer for supply chain transparency.”

The initial POC looked at benefits that could be realized by utilizing blockchain with NAFTA/CAFTA claims and was conducted in September 2018 by CBP’s Office of Trade, Trade Transformation Office, (TTO), Business Transformation and Innovation Division (BTID).

This evaluation ran for six months and concluded in October with a successful outcome. So emboldened, the DHS initiated a second POC, this time in Intellectual Property Rights (IPR) which is expected to be concluded in the coming weeks.

The IPR Blockchain POC will assess the agency’s ability to facilitate shipments by aligning right’s holders and licensee(s) to the entry for an improved importation experience. The live fire system test is anticipated to occur in September 2019. A 360-degree assessment looking at policy, operations, and legal and technical aspects of the Blockchain technology will be conducted following the POC.

The effect of this ‘live fire testing’ has been beneficial to the DHS as it can actively investigate the technical options without deploying overly laborious or time-consuming tender based processes.

The official response to the projects has been very positive. Documents released by the COAC note that the aim of utilizing blockchain technology for CBP is to improve the processing of trade-related documents by hosting information about trade transactions on a decentralized, tamper-proof distributed ledger system, which can be authenticated and accessed by various stakeholders.

Supply chain issues

In a typical supply chain, there are over 40 points of contact between different entities. Something as simple as sending a bulk shipment of flowers internationally can generate over 200 hard copy documents from more than a dozen sources. Each handling point is susceptible to human error: Misfiling, late documentation, lost packages, slow payments, etc. which can delay or halt the entire shipment. In addition, there is a huge issue of counterfeit goods and the lost revenue cost to genuine manufacturers. These are massive pain points causing lost time and revenue.

Removing the inefficiencies in supply chain will stimulate economic growth through the reduction of barriers to global trade. It is estimated by the World Bank in 2018 that reducing these barriers could result in increased global GDP by $2 trillion.

Weinberger commented: “The global supply chain sector encompasses incredibly complex systems and yet many of the processes are still analog and require physical delivery of documentation. We can leapfrog these antiquated, and largely inefficient, systems and use distributed ledger technology to securely automate end-to-end supply chains including handover and back-office procedures. The result is to increase speed, improve accuracy and reduce costs. Overall we can bring the supply chain customer experience into the 21st Century.”

Masloski concluded: “Our partnership with Morpheus.Network works really well. We understand border management and they understand the technology to support it. Together we can assist the DHS and CBP optimize cross border activity, reduce fraudulent activity and keep costs down. We look forward to delivering more valuable solutions.”

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Intercontinental Exchange Bakkt Bitcoin Futures Trading Platform Goes Live

Launched as of 8 pm EST on Sept. 22, Bakkt’s physically settled Bitcoin futures trading has launched and is now live for on the Intercontinental Exchange (ICE). The product was designed to remake Bitcoin as a mainstream investment for the world’s investment managers.

ICE Futures US, one of the world’s largest commodities markets is now offering Bakkt Daily and Monthly Bitcoin Futures, the first physically settled cryptocurrency contracts traded on a federally regulated exchange.

Endowment funds or brokerage firms that trade contracts will be able to channel their payments and acquire a guarantee that their Bitcoin will be delivered through the ICE clearinghouse that settles other commodities contracts with the launch of Bakkt futures.

After thirteen months of deliberation from the regulators and multiple delays, Bakkt announced on Aug. 16 of 2019, the platform has gained approval from the US Commodity Futures Trading Commission (CFTC) and announced that trading would be available starting today. Bakkt’s Bitcoin Warehouse has been accepting withdrawals and deposits in September and is now processing the daily and monthly trading of the Bitcoin futures.

Bakkt’s physically settled Bitcoin futures could allow clients to get Bitcoin rather than fiat currency in its equivalent value once the contract expires, compared to the Bitcoin futures trading options that the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE) offer.

The launch of Bakkt’s platform has been highly anticipated as many speculators believe that the product is a leap forward for the growing adoption and acceptance of Bitcoin and the crypto market in general. Crypto analyst Thomas Lee tweeted on Sept. 19, mentioning:

“I am very positive on Bakkt and its ability to improve trust with institutions to crypto.”

Kelly Loeffler, Bakkt’s CEO, stated:

“The funds that trade on our exchanges expressed to us that they don’t want to deal in today’s unregulated markets, and want end-to-end federal oversight, on the level of the NYSE, to feel safe trading in Bitcoin.”

CME Group also announced that it would offer options on its Bitcoin futures contracts starting in the first quarter of 2020, at the same time as CBOE. In a recent announcement, CME iterated that the launch of Bitcoin options is aimed to provide clients with “additional tools for precision hedging and trading.”

North Korea Is Developing Own Crypto to Circumvent US Sanctions

North Korea has always been suspected for either indirectly or directly funding weapons or involve in some powerful projects of mass destruction using virtual currencies. The nation was recently accused of stealing cryptocurrencies worth $2 billion to facilitate the development of deadly weapons.

Japanese and South Korean exchanges were mainly targeted for the theft, and hackers utilized phishing to hack into user accounts.

Furthermore, the secretive nation has repeatedly turned to virtual currencies to raise cash through illegal means. The list seems endless.

However, the Korea Central News Agency (KCNA) – a Kim Jong-un’s official state media – denied all allegations of such massive theft.

Development phase

North Korea says that it is in the early stages of establishing its own cryptocurrencies as a way of bypassing US sanctions and outmaneuvering the US-dominated global economic system. The proposed virtual currency hasn’t been given a name, but probably it will be “more like bitcoin or other digital currencies” mentioned Alejandro Cao de Benos, a special representative of North Korea’s foreign ministry. He also said:

“We are still in the early stage in the development of the token. We are now in the phase of studying the goods which will give value to it.”

But, the North Korean Embassy in New York neither denied nor confirmed de Benos’ claim. The embassy’s spokesperson only stated they are “not able to give an answer” and eventually hung up.

In pursuit of the dream

Blockchain.News learned that North Korea organized an initial cryptocurrency and blockchain conference event in April, with de Benos revealing that the nation now feels prepared to dip its hands into the waters of the crypto market with an offering of its own.

Close watchers of the country’s use of cryptocurrencies already have reported that the regime has huge expertise to deploy and develop its digital currency and blockchain which would assist the North Koreans in avoiding sanctions. The nation, over the few past years, has shown extensive interest in virtual currencies, along with areas of cryptojacking, hacking exchanges, mining, and many more.

The complexity of the project

While cryptocurrency provides some anonymity, it has become easier for governments and law enforcement to track virtual currency payments across the globe. By developing its own digital currency, Kim Jon Un would be able to have access to it and control how it functions – the same way nations like Iran, Venezuela, and Russia have explored similar projects.

However, while experts believe Kim Jong-un has the capacity to build its own cryptocurrencies, they are far from convinced that the project will be remotely successful. Perhaps it could just turn out to be like another Venezuela’s failed Petro coin that experts saw as propaganda exercise instead of a genuine effort to develop a new monetary system.

Venezuela, which is currently facing heavy US sanctions, attempted creating its own state-sponsored cryptocurrencies with terrible results and consequently leading to a US ban by the Trump administration.

Many sanctions on North Korea imply that any cryptocurrency it builds would certainly be illegal to sell or buy in much of the world.

US use of sanctions is reliant on the role of the dollar in the international financial system. Moreover, US sanctions have crucial secondary impacts since non-US banks cannot risk losing access to dollar transactions by conducting business with sanctioned entities or persons.

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