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| February 17, 2018

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Independent Ratings Agency Alerts Investors About Dangers of Tether

February 13, 2018 |

Independent Ratings Agency Alerts Investors About Dangers of Tether

Another outside observer of the controversial tether cryptocurrency is warning about the dangers it presents for the uninterrupted operation of USDT exchanges. Weiss Ratings is seeking to educate investors on the systematic risk tether introduces to the ecosystem.

Also Read: Faced With Criticism IOTA Fans Try to Bully Growing List of Detractors

Inherent Risks of Blind Trust

Independent Ratings Agency Alerts Investors About Dangers of TetherWeiss Ratings, an independent U.S. agency which recently published letter grades for cryptocurrencies, has issued an alert to investors about the dangers of tether (USDT). It highlights common fears about the stablecoin which is claimed to be fully covered by U.S. dollar reserves.

“The big issue: There’s never been an audit, and the folks behind Tether has been quite shady when asked. They have continuously claimed their tokens are backed 100% by actual dollars, yet they have failed to present any evidence to support this claim. On social media, there appears to be consensus that what Tether is actually doing is running a fractional reserve system. In other words, most observers claim they DO NOT have the dollars to back up all those Tether coins. I tend to agree. It’s just too suspicious,” says Weiss analyst .

What Happens When the Feds Stop USDT Printing?

Independent Ratings Agency Alerts Investors About Dangers of TetherWeiss explains how the importance of USDT to the entire ecosystem is that many non-fiat exchanges (like Binance or Okex) use it as a proxy for real dollars in trading. Because of this, it is the third most traded cryptocurrency and the only one with trading volumes that regularly exceed its market cap. These exchanges are thus dependent on tether for liquidity and put investors at risk if any government decides to pull the plug out of its printers. Some consider this to be a likely scenario under U.S. law.

“The consequences of hanky-panky could be far-reaching. What happens if Tether does turn out to be fraudulent? Or what happens if a major government determines that cryptocurrencies like Tether are being used by exchanges to avoid regulations? What if this large source of liquidity suddenly evaporates?” asks. “Conceivably, it could cause exchange failures. It could drive investors to liquidate their positions, causing sharp declines in market prices.”

Should cryptocurrency investors worry about the continued liquidity of USDT exchanges? Tell us what you think in the comments section below.


Images courtesy of Shutterstock.


Do you like to research and read about Bitcoin technology? Check out Bitcoin.com’s Wiki page for an in-depth look at Bitcoin’s innovative technology and interesting history.

The post Independent Ratings Agency Alerts Investors About Dangers of Tether appeared first on Bitcoin News.

Bitcoin News

The Beverly Hills attorney set to lead the IRS likes magic tricks — he’ll need a few to run the agency

February 13, 2018 |

The Internal Revenue Service this year will have to write and interpret a bevvy of rules as the agency implements the most sweeping set of changes to the tax code in a generation.

And leading the agency through that process could be an IRS commissioner with a resume quite unlike those of his predecessors.


L.A. Times – Business

Japan Cracks Down on Foreign ICO Agency Operating Without License

February 11, 2018 |

Japan Cracks Down on Overseas ICO Agency Operating Without a License

The Japanese financial regulator will be issuing its first warning since the legalization of cryptocurrencies as a method of payment in Japan. An overseas initial coin offering agency has reportedly been attracting Japanese investors without a license, repeatedly ignoring the agency’s advice to cease operating in the country.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

FSA’s Warning

Japan’s Financial Service Agency (FSA) will issue a warning to an unregistered initial coin offering (ICO) agency, which has been conducting business in Japan without a license, Nikkei reported. The news outlet elaborated:

The warning will be issued to Blockchain Laboratory, based in Macau. The agency has decided the company’s activities could cause investors to incur losses. The FSA will work with the police and the Consumer Affairs Agency to bring criminal charges if the company fails to respond to the warning.

Japan Cracks Down on Overseas ICO Agency Operating Without a LicenseHeadquartered in Macau, “Blockchain Laboratory operates as an initial coin offering agency to raise funds using cryptocurrencies,” the publication described. The company’s activities include cryptocurrency and ICO consulting services and conducting seminars to attract investors.

The FSA has repeatedly advised the company to “halt its business activities in Japan, without success,” the publication detailed. According to the officials of the agency, the FSA “will warn the company directly, and name it on the FSA’s home page.” If the operator still fails to comply, criminal charges will be filed.

License Needed to Operate in Japan

Japan Cracks Down on Overseas ICO Agency Operating Without a LicenseSince the revised payment services law went into effect in April of last year, Japan has recognized cryptocurrencies as a legal method of payment. The law also requires crypto exchanges to register with the FSA. It “allows only registered operators, or those that have applied for registration, to operate in Japan,” Nikkei emphasized.

The warning to Blockchain Laboratory will be the FSA’s first under the revised payment services law. “The move is part of the FSA’s more aggressive scrutiny of the activities of unregistered operators in Japan,” the news outlet conveyed, adding that:

The revised law prohibits such unregistered exchanges from operating and soliciting in the country.

Currently, there are 16 cryptocurrency exchanges with a license to operate in Japan and another 16 are under review, including Coincheck which suffered a loss of 58 billion yen (~USD$ 533 million) in a recent hack.

In a recent interview with news.Bitcoin.com, Bitflyer CFO Midori Kanemitsu said:

Now people understand that they need to use safe exchanges, which are registered with FSA and have a high standard of security.

What do you think of the FSA’s action? Let us know in the comments section below.


Images courtesy of Shutterstock and the FSA.


Need to calculate your bitcoin holdings? Check our tools section.

The post Japan Cracks Down on Foreign ICO Agency Operating Without License appeared first on Bitcoin News.

Bitcoin News

U.S. Agency ICE Conducts Investigations That Exploit Blockchain Activity

January 28, 2018 |

U.S. Agency ICE Conducts Investigations That Exploit Blockchain Activity

On January 25 the U.S. Immigration and Customs Enforcement (ICE) deputy assistant director, Greg Nevano, explained in a testimony that the agency was using “blockchain exploitation tools” to combat cryptocurrency use in illicit markets. Nevano’s testimony revolved around the growing opioid addiction problem in the U.S., and how the law enforcement organization is fighting the drugs deliveries stemming from international mail carriers.

Also Read: Oil Company Wants to Sell Bitcoin ATMs to Casinos, Stock Jumps 60%

ICE Is Combating Illicit Activities That Derive From International Mail Deliveries

U.S. Agency ICE Conducts Investigations That Exploit Blockchain ActivityThis week the ICE deputy assistant director Greg Nevano discussed how his department was focused on fight the opioid and fentanyl problem plaguing the U.S. The director’s report explains how ICE is combating illicit activities that derive from international mail deliveries, alongside other cyber-based tactics used for fighting crime. Nevano also details to the U.S. Senate committee that cryptocurrencies are being used to facilitate drug trafficking across multiple borders.

Darknet Field Investigations and Exploiting Peer-to-Peer Cryptocurrency Exchangers

U.S. Agency ICE Conducts Investigations That Exploit Blockchain ActivityThe ICE representative says the agency’s cyber-crime division is providing support to “field investigations” that target “darknet illicit marketplaces.” Nevano says that fentanyl and chemical precursors proliferate within these online markets and are sold for digital currencies. In 2014 the agency launched 37 investigations, and by 2015 the number increased to 100 inquiries. Today the ICE cyber-crime division is working on 600 probes and have over 500 requests for more field investigations.

“The cyber division is providing assistance with the development and management of online undercover personas in furtherance of online undercover operations and collaborates with joint agency strategies in taking down online sources of opioids,” the testimony details.

In support of its diverse financial investigative efforts ICE uses undercover techniques to infiltrate and exploit peer-to-peer cryptocurrency exchangers who typically launder proceeds for criminal networks engaged in or supporting darknet marketplaces.

Training Agents to Understand Cryptocurrency and the Use of Blockchain Exploitation Tools

ICE says that it is training investigators from national and international law enforcement agencies to scrutinize cryptocurrency use that’s tethered to fentanyl/opioid or other narcotic purchases. Nevano’s testimony details that the organization is collecting “communication records such as phone toll records, Internet Protocol (IP) address activity records, email search warrants, and Title III wire intercepts” in these types of investigations. Further, the agency is also using tools that exploit blockchain networks tied to the digital assets used in illegal activity. Nevano states:

ICE leverages complex blockchain technology exploitation tools to analyze the digital currency transactions and identify transactors.

The testimony follows the recent actions taken by governments all around the world attempting to regulate the cryptocurrency economy. Moreover, news.Bitcoin.com reported on the blockchain surveillance company Chainalysis being contracted by ICE several times. Its likely that the Chainalysis blockchain monitoring products are just one of the exploitation tools deployed by the U.S. law enforcement agency. Nevano and ICE believe illicit narcotic smuggling in the international mail environment and cryptocurrencies are playing a role in the world’s opioid epidemic.

What do you think about ICE investigating the use of cryptocurrencies and the illegal opium trade? What kind of blockchain exploitation tools do you think this agency uses? Let us know your thoughts on this story in the comments below.


Images via Wiki Commons, ICE logo, and Pixabay. 


Bitcoin Cash Games Has Arrived — Play Your Favorites Faster With BCH!! 

The post U.S. Agency ICE Conducts Investigations That Exploit Blockchain Activity appeared first on Bitcoin News.

Bitcoin News

Bank regulator disputes Democrats’ criticism that agency didn’t reform after Wells Fargo scandal

January 26, 2018 |

Joseph Otting, one of the nation’s top bank regulators, slapped back Thursday at Democratic senators who accused his agency of inaction following 2016’s Wells Fargo accounts scandal.

Otting’s agency, the Office of the Comptroller of the Currency, issued a report last April detailing how its bank…


L.A. Times – Business

U.S. Rating Agency to Issue Bitcoin and Cryptocurrency Grades Wednesday

January 21, 2018 |

U.S. Rating Agency to Issue Bitcoin and Cryptocurrency Grades Wednesday

Additional Wall Street money might start making its way into cryptocurrency investments soon. An American rating agency is set to issue grades for bitcoin and a host of altcoins this week, possibly opening the door for more fund managers to enter the field.

Also Read: Bitcoin Hardware Wallet Maker Ledger Raises $ 75 Million from VC Investors

Weiss Cryptocurrency Ratings

U.S. Rating Agency to Issue Bitcoin and Cryptocurrency Grades WednesdayWeiss Ratings, a U.S. independent rating agency, had announced that it will issue letter grades on cryptocurrencies, to be released Wednesday January 24. Beyond market leader bitcoin (BTC), the rating agency will also issue grades for ethereum (ETH), Ripple’s XRP, bitcoin cash (BCH), cardano (ADA), NEM (XEM), litecoin (LTC), stellar (XLM), EOS, IOTA, Dash, NEO, TRON, Monero (XMR), bitcoin gold (BTG) and many others.

The rating agency, which was founded in 1971, grades about 55,000 institutions and investments including banks, credit union, insurance companies, stocks, ETFs and mutual funds. Unlike Standard & Poor’s, Moody’s, Fitch and A.M. Best, Weiss Ratings prides itself on never accepting compensation of any kind from the entities it rates.

The Importance of a Rating for Bitcoin

U.S. Rating Agency to Issue Bitcoin and Cryptocurrency Grades WednesdayThe new cryptocurrency ratings are a first for any U.S. financial rating agency. They are said to be based on a model that analyzes thousands of data points on each coin’s technology, usage, and trading patterns. Besides enabling cautious investors to better assess the risks associated with an instrument they wish to invest in, ratings also define what trades many fund managers are allowed to take part in.

“Many cryptocurrencies are murky, overhyped and vulnerable to crashes. The market desperately needs the clarity that only robust, impartial ratings can provide,” said Weiss Ratings founder, Martin D. Weiss, PhD. “We’re proud to be the first to bring that benefit to investors — to help them cut through the hype and identify the few truly solid cryptocurrencies. Our ratings are based on hard data and objective analysis. But they’re bound to create controversy, including some grades that may come as a surprise to some people.”

Will this development help make bitcoin investments more mainstream on Wall Street? Tell us what you think in the comments section below.


Images courtesy of Shutterstock.


Do you like to research and read about Bitcoin technology? Check out Bitcoin.com’s Wiki page for an in-depth look at Bitcoin’s innovative technology and interesting history.

The post U.S. Rating Agency to Issue Bitcoin and Cryptocurrency Grades Wednesday appeared first on Bitcoin News.

Bitcoin News

In bizarre reversal under Trump, consumer agency reveals moves to protect payday lenders

January 19, 2018 |

In what would be a laughable move if it wasn’t so incredibly tragic, the Trump administration’s newly emasculated Consumer Financial Protection Bureau this week sided with payday lenders over consumers.

You heard right. The CFPB, now led by an appointee of a businessman-politician whose companies…


L.A. Times – Business

Consumer watchdog agency considers repealing payday lending rules

January 16, 2018 |

The Consumer Financial Protection Bureau has decided to reconsider a key set of rules enacted last year that would have protected consumers against harmful payday lenders.

The bureau, which came under control of the Trump administration late last year, said in a statement Tuesday that it plans…


L.A. Times – Business

For Trump’s man at consumer agency, emphasis is on ditching rules, not enforcing them

December 24, 2017 |

If you’ve been wondering how the Consumer Financial Protection Bureau will change now that President Trump has installed as interim director a man who has called the agency a “sick, sad joke,” wonder no more.

Mick Mulvaney, who also continues to serve as White House budget director, said a few…


L.A. Times – Business

Christie allies got promotions, raises at troubled NJ transit agency: report

December 19, 2017 |

New Jersey Transit, the agency that operates state-run bus and rail lines, reportedly promoted 10 employees connected to Gov. Chris Christie‘s administration — and even gave raises to some as the agency struggled to fund its operations.
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