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Chilean Court Rules in Favor of Closing Bank Accounts of Crypto Exchange Orionx

December 6, 2018 |

Chilean Court Rules in Favor of Closing Bank Accounts of Crypto Exchange Orionx

In a landmark judgment, the Supreme Court of Chile has ruled that state-owned Bancoestado was justified in closing the accounts of cryptocurrency exchange Orionx without explanation. The judges ruled that the bank acted in compliance with laws on money laundering and terrorist financing, a threat allegedly posed by censorship-resistant, decentralized cryptocurrencies.

Also read: Finma: Crypto Startups Can Handle up to $ 100M Deposits in Switzerland

Cryptocurrencies Lack ‘Intrinsic Value’

Chilean Court Rules in Favor of Closing Bank Accounts of Crypto Exchange Orionx

Cryptocurrencies such as bitcoin are not legally recognized in Chile, but they are not banned, either. Nonetheless, the ruling has significant implications for relations between banks and crypto exchanges. Commercial banks can now shut down exchange accounts without notice, while pointing to laws on money laundering and terrorist financing.

According to local media reports, the Supreme Court claimed that digital assets lack “physical manifestation” and “have no intrinsic value.” It also took issue with the fact that they are not controlled or issued by governments or companies.

“These characteristics and elements determine, therefore, the current impossibility for the bank to comply with the aforementioned obligations,” said the court in its judgment. “It prevents it from knowing in depth (of) the financial activities related to cryptocurrencies developed by the appellant, the most relevant characteristics of its operations, the foundations on which these are supported and, finally, if their amounts are excessive or not.”

The court added:

It is precisely this impossibility of knowledge and of fulfilling the duties that weigh on the bank, which gives support to the decision to close the bank account of the plaintiff, which consequently cannot be called arbitrary.

Bank Cuts Ties With Crypto Exchanges

Bancoestado closed the accounts of Orionx in March, claiming that it did not want to “operate with companies that are dedicated to the issuance or creation, brokerage, intermediation or serve as a platform for the so-called cryptocurrencies.” The decision was sudden and was meant to affect three digital asset exchanges — Orionx, Buda and Crypto Mkt.

Eventually, a notice of closure was only sent out to Orionx. The trading platform challenged the decision in court. Bancoestado was reportedly one of only a few banks remaining that provided financial services to exchanges in Chile. Both Buda and Crypto Mkt have threatened to create their own digital bank to fill this void.

Shutting Down Competition

According to Chilean publication Emol, the Supreme Court “rejected” Orionx’s appeal because it was “clear that the respondent, by ordering the closure of the bank account, did not” act “in an arbitrary and illegal” manner. It said the closure did not “cause Orionx deprivation, disturbance or threat in the legitimate exercise of any of the constitutional guarantees…”

Chilean Court Rules in Favor of Closing Bank Accounts of Crypto Exchange Orionx

Commercial banks in some parts of the world are using money laundering laws and terrorism-funding regulations as convenient excuses to cripple cryptocurrency transactions. In Nigeria, for example, Union Bank has shut down customer accounts that it suspected of having links to virtual currency. Several exchanges in Brazil have also had their accounts frozen on similar charges.

Banks can claim to be acting in accordance with the law, but it is also clear that they are acting in self-interest to eliminate competition. Compared to bank transfers, cryptocurrencies have proven to be a more efficient, faster and cheaper way of sending money across borders. For example, transfers sent on the Bitcoin Cash network generally cost under $ 0.10 for any amount. That compares with anything above $ 3 for popular debit and credit cards such as Visa or Mastercard.

What do you think about the decision of the Supreme Court in Chile? Let us know in the comments section below.


Images courtesy of Shutterstock.


Express yourself freely at Bitcoin.com’s user forums. We don’t censor on political grounds. Check forum.Bitcoin.com.

The post Chilean Court Rules in Favor of Closing Bank Accounts of Crypto Exchange Orionx appeared first on Bitcoin News.

Bitcoin News

Outrage Over Union Bank of Nigeria’s Threat to Close Crypto-Related Accounts

November 28, 2018 |

Nigerian digital asset owners have reacted angrily to Union Bank’s threat to close all cryptocurrency-linked accounts. Investors have accused the local banking system of hypocrisy, asserting that banks are “unfit” and “scammers” that continue to steal from the poor through spurious charges such as ATM maintenance fees and SMS alerts.

Also read: Nigeria’s Union Bank Threatens to Shut Down Cryptocurrency-Related Accounts

‘Illiterate Banks Stifling Innovation’

Union Bank of Nigeria will with immediate effect begin monitoring accounts used for digital currency trading with a view to shutting these down without explanation, the bank said in notices to its customers this week. The bank claims it is acting in line with past warnings from the Central Bank of Nigeria (CBN) on virtual currency trading.

However, cryptocurrency and blockchain enthusiasts riled by the bank’s decision have taken to Twitter to express their disgust, questioning the integrity and financial literacy of the banking sector.

Outrage Over Union Bank of Nigeria’s Threat to Close Crypto-Related Accounts

Adekola Seyi initiated a thread accusing Union Bank of lacking basic research abilities and faulted the country’s financial system for retrogressive tendencies. Seyi regretfully hinted that other conservative banks may soon be following suit.

Another Twitter user, Omuswe Precious, said that Nigeria’s banks are hostile to innovation while the world is fast moving ahead. He posted:

Y’all sit there lazying about while d global market cap for cryptocurrencies is already worth more than your ancient institution. Guess this sort of laziness is d reason it takes your bank over 10 working days to reverse failed transactions whn other banks are on auto-reversal.

The collective outrage follows a statement issued by the bank to its account holders warning them to desist from transacting in cryptocurrency, in which it said: “In order to guarantee the security of our customers’ funds, Union Bank will monitor accounts being used for cryptocurrency transactions and may impose restrictions including closure of such accounts.” The 100-year-old bank cited a series of cautionary statements from the CBN, which apparently do not completely prohibit virtual currency trading, to support its decision.

‘Worst Scammers’

Precious said the move was characteristic of the hypocrisy of Nigerian banks, whom he described as the “worst scammers.” He called out banks for manipulative charges for SMS alerts, card maintenance and other unmerited fees that are poisoning public trust in the institutions.

Outrage Over Union Bank of Nigeria’s Threat to Close Crypto-Related Accounts

“Come to think of it, the ATM maintenance fee that gets deducted from customers’ accounts hasn’t been labelled as scam yet! Our banking system is unfit and am sure one day banks will be a store for private keys and wallet addresses,” tweeted Awosika Ayodeji, echoing this sentiment.

Seyi broke down the operation of blockchain in simple terms to illustrate Union Bank’s supposed misreading of both the technology and the CBN directive. “Blockchain transactions are not done on your [bank’s] network … then why the cry. Why can’t you tell #Nigerians how you will block what is not happening on your system?”

Another Twitter user put the bank’s statement down to financial illiteracy on the part of the its staff. “I see we don’t go this way cos of our underpaid brothers and sisters that still work in the banks. However I dared @Unionbank_Ng to on behalf of the central bank publish their detailed report on #cryptocurrency and their research studies on #blockchain!”

Outrage Over Union Bank of Nigeria’s Threat to Close Crypto-Related Accounts

In January 2017, the central bank released a circular to financial institutions asking them not to use, hold or trade virtual currencies pending “substantive regulation and or [a] decision by the CBN.” A follow-up in February 2018 reiterated the same warning, adding that “virtual currencies are not legal tender in Nigeria … we wish to caution all and sundry on the risks inherent in such activities.”

The Union Bank’s sudden decision to monitor accounts has sent panic into Nigeria’s digital asset community. Reports have started to emerge of nervous crypto investors already withdrawing their money to avoid the possibility of their accounts being frozen.

What are your thoughts on banks closing accounts that have links with cryptocurrency? Let us know in the comments section below.


Images courtesy of Shutterstock.


Express yourself freely at Bitcoin.com’s user forums. We don’t censor on political grounds. Check forum.Bitcoin.com.

The post Outrage Over Union Bank of Nigeria’s Threat to Close Crypto-Related Accounts appeared first on Bitcoin News.

Bitcoin News

Nigeria’s Union Bank Threatens to Shut Down Cryptocurrency-Related Accounts

November 27, 2018 |

Nigeria's Union Bank Threatens to Shut Down Cryptocurrency-Related Accounts

A large commercial bank in Nigeria has threatened to shut down an undisclosed number of cryptocurrency-related accounts without explanation. Lagos-based Union Bank claims that any decision to do so would be in line with the Central Bank of Nigeria’s (CBN) past warnings about cryptocurrency trading.

Also read: Malaysian MP “Concerned About Threat” From Cryptocurrencies to Government Money

Panicky Customers Empty Account Balances

In a statement to account holders this week, Union Bank of Nigeria warned: “In order to guarantee the security of our customers’ funds, Union Bank will monitor accounts being used for cryptocurrency transactions and may impose restrictions including closure of such accounts.” The 100-year-old bank, which has $ 3.84 billion in assets, cited a series of cautionary statements from the CBN, which apparently do not completely prohibit virtual currency trading, to support its decision.

Nigeria’s Union Bank Threatens to Shut Down Cryptocurrency-Related Accounts

In January 2017, the central bank released a circular to financial institutions asking them not to use, hold or trade virtual currencies pending “substantive regulation and or (a) decision by the CBN.” A follow-up statement in February 2018 reiterated the same warning, but added “that virtual currencies are not legal tender in Nigeria … we wish to caution all and sundry on the risks inherent in such activities.”

However, Union Bank’s sudden decision to monitor accounts has shaken the west African country’s digital asset industry, the continent’s biggest. Reports have started to emerge of nervous crypto investors already withdrawing their money to avoid the possibility of their accounts being frozen.

Munachi Ogueke, co-founder of Cryset LLC — a Lagos-based over-the-counter bitcoin trading platform — told news.Bitcoin.com that several people within the Nigeria cryptocurrency space had received notifications of possible account closures from Union Bank. “Many are emptying their accounts and closing them down,” Ogueke said.

Anti-Money Laundering Regulations?

Nigeria’s Union Bank Threatens to Shut Down Cryptocurrency-Related AccountsIt is difficult to understand the motivation behind Union Bank’s unexpected assault on cryptocurrency-linked accounts. The matter is even more unclear in light of the CBN’s warnings, as neither of them explicitly said that cryptocurrency transactions were illegal. But Ogueke has suggested that commercial banks may have been given carte blanche by the CBN to close customer accounts without explanation, as long as their actions are in accordance with anti-money laundering rules.

Citing the January 2017 central bank circular, Ogueke explained:

Banks and other financial institutions that have cryptocurrency customers have the authority and can discontinue the relationship with such customers where the banks are not satisfied with the AML/CFT controls that enable compliance with the identification, verification, and transaction monitoring requirements.

Ogueke added: “In the absence of any regulation from the CBN, it can be safely concluded that the CBN by this circular, has given banks (such as Union Bank) the power to close accounts of cryptocurrency customers if the customer breaches anti-money laundering control requirements and where there are suspicious transactions.”

But Union Bank has said that its decision to monitor accounts does not mean that it necessarily suspects that some customers are violating anti-money laundering laws. Rather, it says it is becoming more vigilant to protect client funds, but Ogueke said he is doubtful, describing its justification as “flimsy.”

Nigeria’s Union Bank Threatens to Shut Down Cryptocurrency-Related Accounts
Munachi Ogueke

“How is blocking accounts associated with bitcoin securing the funds of your customers?” he quipped.

No other bank is known to have issued a similar threat. When news.Bitcoin.com reached out to Union Bank for comment, it repeated the statement it had sent out to its customers.

What do you think of Union Bank’s decision? Let us know in the comments section below.


Images courtesy of Shutterstock.


Express yourself freely at Bitcoin.com’s user forums. We don’t censor on political grounds. Check forum.Bitcoin.com.

The post Nigeria’s Union Bank Threatens to Shut Down Cryptocurrency-Related Accounts appeared first on Bitcoin News.

Bitcoin News

Lavish Expense Accounts Can Make or Break a CEO

November 25, 2018 |

One of the biggest perks of being a high-level executive is a flush expense account. But allegations of misusing it can quickly undo a career.
WSJ.com: US Business

5 critical settings so hackers can’t access your bank accounts

November 11, 2018 |

You need to assume that your password isn’t strong enough. You might as well believe that someone, somewhere, is working around the clock to break into your accounts and steal your money, your identity, and anything else you have. Because it’s essentially true.
FOX News

IRS boosts contribution limits for retirement accounts

November 2, 2018 |

The Internal Revenue Service has increased the contribution limits for various retirement accounts for 2019.

The IRS said Thursday that the contribution limit for employees who participate in a 401(k), 403(b) and most 457 plans, as well as the federal government’s Thrift Savings Plan, is being…


L.A. Times – Business

Brazilian Banks Ordered to Reopen Cryptocurrency Exchange’s Frozen Accounts

November 1, 2018 |

Brazilian Cryptocurrency Exchange Wins Court Challenge as Banks Reopen Accounts to Avoid Penalties

A Brazilian court has ordered the reopening of cryptocurrency exchange Bitcoin Max’s bank accounts, which were closed without explanation by Banco do Brasil and Banco Santander in September. The two banks have reportedly reactivated the accounts to avoid paying fines.

Also Read: Kenya’s Bithub Africa Mines Bitcoin Using Solar Power

Threat of Fine Forces Banco Do Brasil and Banco Santander to Reactivate Exchange’s Accounts

According to local news site Portal do Bitcoin, Brazil’s Federal District Court promised to slap Santander with a fine of 5,000 real ($ 1,350) and Banco do Brasil with 20,000 real ($ 5,400) should both fail to comply with the preliminary judgement. Leonardo Ranna, a lawyer representing Bitcoin Max, said that all of the exchange’s accounts “have been restored, including those of exchange partners.”

Brazilian Banks Ordered to Reopen Cryptocurrency Exchange's Frozen Accounts

In September, the Administrative Council for Economic Defense (CADE), a transparency and competition body, started to investigate six of Brazil’s biggest banks after they closed accounts belonging to digital currency exchanges without explanation and refused to discuss the decision. The probe centred around allegations of “monopolistic practices … that could be limiting the action of brokers” within the cryptocurrency industry.

Results of the investigation are not yet known. The ruling against Banco Santander may only be temporary, however. The bank only complied on account of a “kind of injunction” that compelled it to reopen Bitcoin Max’s accounts within five days, Portal do Bitcoin reported. The injunction had been previously denied by a judge at a lower court, forcing the exchange’s lawyers to appeal to the Federal District Court.

The latest ruling by Ana Catarino, a judge with the higher court, was based on Banco Santander’s unilateral decision to close the exchange’s accounts without explanation, something that the court described as “abusive conduct that is prohibited by consumer protection rules.”

Brazilian Banks Ordered to Reopen Cryptocurrency Exchange's Frozen Accounts

When Banco do Brasil shut down Bitcoin Max’s account, about $ 32,400 of the exchange’s money was stored in it. The exchange filed a lawsuit against the bank on Sept. 12. An injunction was turned down initially but a Federal District Court judge later gave the bank a 24-hour ultimatum to reactivate Bitcoin Max’s accounts or face a fine of about $ 540 a day.

Arbitrary Bank Account Closures

Adriano Zanella, chief executive officer of Bitcoin Max, said they were never made aware of the account closures and that he learned of the blockage via the manager of an agency. During the investigation by CADE, the transparency body accused major banks of “imposing restrictions or even prohibiting access to the financial system by cryptocurrency brokerages.” The banks denied the charge, saying accounts were closed as a security measure to prevent money laundering. Some of the banks under investigation include Banco Santander Brasil SA, Banco Bradesco SA, Banco do Brasil SA, Itau Unibanco Holding SA and Banco Inter and Sicredi.

Brazilian Banks Ordered to Reopen Cryptocurrency Exchange's Frozen Accounts

Brazil is a hive of cryptocurrency activity in Latin America. The number of people trading bitcoin and other cryptocurrencies has soared from less than 100,000 two years ago to about 1.4 million today. More than $ 2.4 billion worth of BTC was traded in the country last year, up from just $ 160 million in 2016.

In January, Brazil’s Securities and Exchange Commission stopped local investment funds from buying digital coins because “cryptocurrencies cannot be qualified financial assets.” The commission, however, made a U-turn immediately after, allowing for indirect ownership, meaning Brazilians could buy into crypto-related investment funds. Even politicians in the country are talking about bitcoin; a candidate in the recent presidential election campaigned for formally legalizing bitcoin.

What do you think about the relationship between virtual currency exchanges and legacy financial institutions? Let us know in the comments section below.


Images courtesy of Shutterstock.


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi’s Pulse, another original and free service from Bitcoin.com.

The post Brazilian Banks Ordered to Reopen Cryptocurrency Exchange’s Frozen Accounts appeared first on Bitcoin News.

Bitcoin News

Wells Fargo agrees to $65-million settlement with New York over unauthorized accounts scandal

October 24, 2018 |

Wells Fargo & Co. will pay a $ 65-million penalty to New York state related to cross-selling practices that led employees to create millions of accounts without customer authorization.

The bank failed to disclose to investors that the success of its cross-selling — the pitching of additional financial…


L.A. Times – Business

Facebook purged over 800 accounts and pages pushing political messages for profit

October 14, 2018 |

Facebook said Thursday that it has purged more than 800 U.S publishers and accounts for flooding users with politically oriented content that violated the company’s spam policies, a move that could reignite accusations of political censorship.

The accounts and pages, with names like Reasonable…


L.A. Times – Business

Facebook Purge Continues: 559 Pages, 251 Accounts Removed Ahead of US Elections

October 12, 2018 |

Facebook Purge Continues: 559 Pages and 251 Accounts Removed Ahead of US Elections

Facebook’s Nathaniel Gleicher, Head of Cybersecurity Policy, and Oscar Rodriguez, Product Manager, announced that “Today, we’re removing 559 pages and 251 accounts that have consistently broken our rules against spam and coordinated inauthentic behavior.” It is another decision to purge the world’s largest social media site of political speech, and it just might be a final catalyst for mass adoption of an on-chain, censorship-resistant platform, for example, within the Bitcoin Cash network.

Also read: Singapore Hosts New Fiat-Crypto Exchange, Welcomes Crypto Bank Accounts

Facebook Purges Hundreds of Pages Under Broad Sweep

Nicholas Bernabe, the founder of popular alternative news organization The Anti-Media, posted how “Facebook has unpublished my page, The Anti-Media, after falsely accusing us of violating policies.” Based in Chula Vista, California, his news page was not anywhere near fraud or spam; it regularly published hard-hitting alternative news articles. Nevertheless, “2.1 million followers and 5 years of work gone,” Bernabe wrote.

Facebook Purge Continues: 559 Pages and 251 Accounts Removed Ahead of US Elections

Facebook’s blog titled the entry of Oct. 11, 2018, “Removing Additional Inauthentic Activity from Facebook,” leading readers to believe pages and accounts deleted were associated with a version of fraud or scam activity. Indeed, the company insisted, “People need to be able to trust the connections they make on Facebook. It’s why we have a policy banning coordinated inauthentic behavior — networks of accounts or pages working to mislead others about who they are, and what they are doing,” they claimed, adding that “the bulk of the inauthentic activity we see on Facebook is spam that’s typically motivated by money, not politics.”

Sterlin Lujan believes something more sinister is going on. “My long-standing and well-liked page, The Psychologic-Anarchist,” he alerted followers, “has just been unpublished by Fascistbook. I had 50,000+ followers on it. I also noticed that Danilo recently had his Facebook page, Peaceful Anarchism, unpublished for no reason,” he lamented.

Facebook Purge Continues: 559 Pages and 251 Accounts Removed Ahead of US Elections

‘Facebook is Going After Anarchists and Freethinkers’

When asked why certain pages like his were being targeted, though they never asked for money and never used spam techniques to gain followers, Lujan wrote, “What’s happening is clear. We are victims of censorship. Facebook is going after anarchists and freethinkers. They are censoring people who have the gall to challenge the system and post news stories that contradict the lies spouted by mainstream sources.”

“Given the activity we’ve seen — and its timing ahead of the US midterm elections — we wanted to give some details about the types of behavior that led to this action,” Gleicher and Rodriguez explained of Facebook’s actions. “Many were using fake accounts or multiple accounts with the same names and posted massive amounts of content across a network of groups and pages to drive traffic to their websites. Many used the same techniques to make their content appear more popular on Facebook than it really was. Others were ad farms using Facebook to mislead people into thinking that they were forums for legitimate political debate.”

Facebook Purge Continues: 559 Pages and 251 Accounts Removed Ahead of US Elections

Of the cursory examination done by news.Bitcoin.com, a significant number of the pages zapped from existence did not engage in any of the activities Facebook cited as the reason for the purge. In addition to the two already highlighted above, political pages such as Free Thought Project, V is for Voluntary, and Press For Truth were caught up in the web of deletion as well. “This definitely seems politically motivated considering most of the pages I’m familiar with that were unpublished leaned libertarian or anarchist,” Bernabe detailed. “With the midterm elections so close, this can be described as nothing other than Facebook trying to manipulate the outcome of the coming elections.”

Could This Trigger More On-Chain BCH Social Media Platform Adoption?

Luis Fernando Borges Mises is also convinced certain pages were taken down on purpose. “All of this is nothing more to me than a neo-Marxist cleanse, if you will,” Mises told news.Bitcoin.com by phone, “…all the liberal pages are still there, all the Republican pages are still there. The ones that are trying to question the status quo, like the voluntaryist pages, are being censored and deleted.”

As these pages explained only a few months ago, alternatives to sites like Facebook are being built on the Bitcoin Cash network. “On April 15 a new on-chain social network was launched for the Bitcoin Cash blockchain called Memo. The platform allows users to create a profile which is tied to a specific BCH address and a public/private key pair. Users can then tether certain data using the program such as a website URL, a quote, or a certain date which is hashed into the BCH chain using an OP_RETURN transaction.”

Facebook Purge Continues: 559 Pages and 251 Accounts Removed Ahead of US Elections
Social media platforms on Memo.Cash might be an answer to Facebook.

Still, more alternatives have popped up since, including a “blogging site called Matter [which] has been introduced to the BCH community, and the platform’s actions are all powered by the Bitcoin Cash network. Matter claims to have no access to the user’s key and explains keys are stored only in your browser. Now Matter does have its differences compared to the Blockpress application and Memo, as Matter users can publish arbitrarily long-form posts. Essentially due to the fact the miner’s fee using bitcoin cash is so minimal Matter users can store any document in the BCH chain in an immutable fashion,” news.Bitcoin.com previously reported.

It’s early days to say any of the BCH platforms will ever compete with the billions of users already on Facebook. But there does appear to be renewed interest in making sure content providers are not caught unaware again. “The ‘moderators’ of Facebook have made this into a war of attrition,” Lujan wrote angrily, “meant to stifle the free flow of information. However, this attack against anarchists is not going to silence us. It is going to further invigorate freedom lovers. We are going to continue speaking out against the vile nature of the system. We are also going to continuously paint cowards like Zuckerberg into a corner. These people need to realize that trying shut people up is the first step taken toward total Orwellian fascism.”

Is the Facebook purge a use case for on-chain BCH platforms? Let us know in the comments below.


Images courtesy of Shutterstock.


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even look up the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.


Disclaimer: Sterlin Lujan is an employee of Bitcoin.com

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