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According to regional reports, the Central Bank of Iran (CBI) is planning to allow licensed cryptocurrency mining as long as operations are charged for electricity based on the price of export. The CBI governor, Abdol Nasser Hemmati, explained that mined cryptocurrencies should flow back into the Iranian economy.
Chinese Miners Negotiate With Iranian Leaders to Set Up Mining Operations in the Free Trade Zones
In December 2018, there were reports of miners stemming from China, Spain, Ukraine, Armenia, and France to mine bitcoin in the oil-rich nation of Iran. The Middle Eastern country has extremely cheap electricity rates, and in April there were even more stories of Chinese miners heading to Iran for extremely affordable electric prices at $ 0.006 per kilowatt-hour (KWh). Then, at the end of June, the spokesperson for Tavanir, an Iranian state-operated grid entity, said that electrical consumption had spiked by 7% in comparison to the previous year. Tavanir executive Mostafa Rajabi Mashhad further blamed illicit cryptocurrency mining operations for the country’s increased electrical consumption. Rajabi told the press that other Iranian provinces were having difficulties due to the mass electrical consumption and emphasized that “illegal bitcoin miners will be identified and their electricity will be cut.”
Following Rajabi’s statements, bitcoin miners defied his warning and Iranians shared pictures of a bitcoin mining mosque. The regional publication Iran Daily reported that there were roughly 100 unauthorized bitcoin mining sites located in various provinces. The Tabnak website claims 1,000 bitcoin mining machines were seized by Iranian law enforcement on June 28. “Two of these bitcoin farms have been identified, with a consumption of one megawatt,” a Tavanir official, Arash Navab, told state television. Bitcoin mining has become a very popular vehicle to escape sanctions across many provinces in Iran. “Everyone’s talking about Bitcoin and how to get it,” said Mahsa Alimardani, an Iranian native and researcher at the Oxford Internet Institute noted to regional reporters.
Then on July 10, Mohammad Sharqi, managing director of Iran Blockchain Association, told the local press that Chinese digital currency miners have asked Iranian officials to let them set up facilities in the country. Official discussions have been initiated and miners would like to operate in the Iranian free trade zones in Anzali, Kish Island, Qeshm Island, Chabahar, Arvand, and Aras. “The Chinese have made requests through official channels for cryptocurrency mining in the free zones,” Sharqi explained to the media. CBI’s deputy governor for new technologies, Nasser Hakimi, explained the same day that the local anti-money laundering authority had concerns with virtual currency trading. Sharqi thinks the stories of extreme electrical consumption have been exaggerated. Despite government warnings, according to an Iranian electrical industry spokesman, there are more than 148,000 machines in the country.
— RT (@RT_com) June 29, 2019
Central Bank of Iran Governor: ‘Bitcoin Mining Will Be Authorized if Miners Pay Export Prices for Electricity and Help Feed Funds Back Into the Iranian Economy’
Abdol Nasser Hemmati, the CBI governor, explained on July 10 that the government will authorize bitcoin mining in Iran even though Iranian bureaucrats have not finished regulating cryptocurrency trade. There are two caveats to the deal, Hemmati told the press, which will have to be followed strictly if mining operations are initiated in Iran. “Mining of the international digital currencies should be done based on the price of electricity for export,” Hemmati expounded. “What’s more important is that these mined currencies should be fed back to the national economic cycle,” the CBI governor added.
Hemmati warned the CBI would not tolerate a cryptocurrency that affects the price of the Iranian rial or gold. Reports also detail that Iranian law enforcement have already started to bust operations using factories, mosques, and utility service areas that benefit from extremely cheap electricity rates. At the export rate that’s charged to neighboring countries, bitcoin miners would have to pay $ 0.07 to $ 0.10 per KWh. The news outlet Presstv reports that the utility service area rates in Iran can be as low as $ 0.05 per watt. Electricity prices in Iran can be even lower in places like greenhouses and mosques for $ 0.006 per KWh as long as mosque leaders don’t mind breaking fatwa against the use of their subsidized electricity.
Iranian Leader Claims U.S. Congress, Donald Trump and Sanctions Have Been Hindering Iran’s Cryptocurrency Progress
Even at $ 0.13 per KWh, there are more than 40 SHA-256 machines that are still very profitable at today’s BTC prices. In some countries, electricity is higher or even double $ 0.13 per KWh so Iran’s power prices are quite affordable even with the export rate tacked on. Saeed Zarandi, the Iranian assistant minister of industry, trade and supply revealed to the press that the U.S. has been hindering Iran’s cryptocurrency progress.
Zarandi said that the U.S. Congress under the Trump administration has been harsh toward the country. Iran and the U.S. have been at odds again lately as the country’s military shot down an American drone and told the press it was in Iran’s no-fly zone. The U.S. and President Donald Trump claim the aircraft was in international airspace and not in Iran’s territory. Since then many observers have been worried that the U.S. may spark a war with Iran or vice versa. Zarandi asserted that members of the U.S. Congress believe cryptocurrencies could be used in Iran to avoid sanctions.
One specific set of sanctions called the Blocking Iran Illicit Finance Act is comprised of rules that make it hard for international companies to do business with Iranian financial institutions. H. R. 7321 details the expansion of prohibitions on correspondent accounts or payable-through accounts for foreign financial institutions. This includes banks that facilitate transactions or provide financial services for Iranian financial institutions. H. R. 7321 also displays a set of three rules to follow when it comes to Iranian-based digital currencies.
- Sanctions with respect to foreign persons that engage in significant transactions for the sale, supply, or transfer to Iran of significant goods or services used in connection with the development of Iranian digital currency.
- Sanctions with respect to foreign persons that conduct or facilitate significant transactions related to the purchase or sale of Iranian digital currency or maintain significant amounts in Iranian digital currency.
- Report on the progress of the Government of Iran in creating a sovereign cryptocurrency.
The latest rules against an Iranian digital currency also follow the U.S. imposed sanctions against cryptocurrencies from Venezuela and more recently Cuba. Moreover, in November 2018 the American government convinced Swift to cut Iran off from the global financial system which pushed Iranian college students toward cryptocurrency to pay for books and online tuition. Furthermore, reports from regional news outlets in China claim that Iranian cryptocurrency miners have been scrambling to buy mining rigs from the mainland. With the CBI green-lighting bitcoin mining in the country, the inflow of funds could give Iran an edge over the imposed U.S. sanctions. With rules like the Blocking Iran Illicit Finance Act and major payment processors like Swift cutting Iranian banks off, the country may be forced to use a borderless currency.
What do you think about Iran’s central bank planning to approve authorized bitcoin mining in the country as long as miners pay export prices for electricity? Let us know what you think about this subject in the comments section below.
Image credits: Shutterstock, Presstv, Iran Daily, Tabnak, and Pixabay.
The post Miners Flock to Iran Where Bitcoin Mining Is Set to Be Sanctioned appeared first on Bitcoin News.
The World Economic Forum said sanctioned Russian businessmen may attend January’s Davos event, fending off a dispute that risked overshadowing the gathering of the elite after Moscow threatened to boycott it.
WSJ.com: What’s News Europe
The leading crypto industry association in Crimea has proposed establishing an international training center to prepare experts from countries that have been placed under western sanctions. The idea is to use advanced technologies associated with cryptocurrencies to attract foreign investors to these jurisdictions.
Plan for Crypto Course Put Forward in Crimea
As part of the initiative, the Crimean Republican Association of Blockchain Investment Technologies (Krabit) intends to launch an educational course that could become part of a university curriculum. Lecturers, including members of the organization, will train students from countries and territories that are currently subjected to economic and political sanctions imposed by foreign powers like the U.S.
Following the Maidan Revolution in February of 2014, which changed the geopolitical orientation of Ukraine, authorities in the Autonomous Republic of Crimea, where the Russian ethnic population forms a majority, held a referendum to join Russia. The proposal was supported by almost 97 percent of those who voted, over 80 percent of Crimeans, according to the Russian side. In March of that year, Crimea and the Federal City of Sevastopol became part of the Russian Federation.
The accession, which was not recognized by Kiev and a large part of the international community, led to economic sanctions for the territory that have curbed foreign investment. Numerous proposals have been made to circumvent these restrictions using crypto technologies. One of them recently came from the Permanent Representative of the Republic of Crimea in the Kremlin, Georgiy Muradov, who said that a blockchain cluster and a cryptocurrency fund could soon be established in the Crimean special economic zone to attract investors. A plan to set up an assembling facility for mining equipment has also been discussed.
According to Krabit’s president, Roman Kulachenko, who spoke with Tass on the sidelines of the “Security. Crimea – 2018” forum, the republic is not the only affected entity that could take advantage of cryptocurrency technologies to evade sanctions. He mentioned Abkhazia and South Ossetia, two other pro-Russian republics in the former Soviet space that are facing similar problems. In his opinion, the educational center can help them successfully overcome some of the challenges. Other sanctioned countries, such as Iran, are also relying on Russian support to develop their crypto capabilities.
Kulachenko noted that crypto and blockchain technologies can be employed to create platforms that would allow foreign investors to anonymously operate in these jurisdictions. However, he also remarked that in order to do so, a proper regulatory framework for digital assets, smart contracts and blockchain technologies has to be developed and implemented. Russian government institutions have been postponing the adoption of such legislation for months, and according to recent reports from Moscow, the drafts that have been filed in the State Duma this past spring have been revamped and do not even mention cryptocurrencies, mining and smart contracts in their latest revisions.
TV Program to Educate the Public About Cryptocurrencies
Another educational initiative related to cryptocurrencies has been recently announced in Russia. Mir, an international broadcasting corporation with several Russian language TV channels, a radio station and an online outlet, is launching a new program that will inform viewers about digital coins, mining and other related technologies.
Mir was established by the members of the Commonwealth of Independent States (CIS) back in the early ‘90s. Now it broadcasts in 23 countries, including almost all of the former Soviet republics, the U.S., Switzerland, Germany, Israel, and other countries with large Russian-speaking diasporas.
The producers of the TV show ,called “Visiting the Numbers,” want to explain to their audience in simple terms what blockchain means, how cryptocurrencies are mined and how to invest in digital assets. The weekly program, which will be broadcasted on the Mir and Mir 24 channels, will cover the most important developments and current topics in the crypto space for viewers in the CIS countries and around the world.
What do you think about the new Russian educational initiatives? Share your thoughts on the subject in the comments section below.
Images courtesy of Shutterstock.
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The post Crypto Experts From Sanctioned Countries to Receive Training in Crimea appeared first on Bitcoin News.
When societies discuss cryptocurrencies, the argument that the decentralized and unregulated nature of the crypto space leaves the door open to abuse, like money laundering and financial fraud, is often put forward by officials and authorities. However, a string of cases involving precisely these sins, and many, many banks, show that regulations are largely ineffective in preventing this type of violations, especially when they are committed by the big traditional players.
Credit Suisse Investigated for Money Laundering in Corruption Cases
Affairs, probes, fines, resignations – over the past weeks, we’ve often seen these words in headlines, right next to some of the most recognizable names in the financial industry, including ING Group, Danske Bank, Citigroup and Deutsche Bank. The rush to apply the same ‘anti-what-not’ policies to the much better in this respect crypto sector, the same old practices that have failed time and again with the status quo banks, is beyond comprehension.
After the Netherlands, Denmark, the US, Russia and some former Soviet states like Estonia, it was time that Switzerland came into the spotlight. Local media have quoted the country’s financial watchdog stating that Zurich-based Credit Suisse has failed to meet its legal obligations to prevent money laundering. The Swiss bank has been implicated for misconduct in alleged corruption cases involving the international football governing body, FIFA, the oil companies of Brazil and Venezuela, Petrobras and PDVSA, as well as a business relationship with a “politically exposed person”, Swiss Info reported.
The Swiss Financial Market Supervisory Authority (FINMA) explained it had identified deficiencies in the bank’s anti-money laundering (AML) process and shortcomings in the applied control mechanisms and risk management. The regulator has taken measures to improve the bank’s AML procedures and intends to engage a third party to monitor the implementation of the measures and the steps already initiated by Credit Suisse. In connection to the cases, some of them dating back to 2014, FINMA has actually investigated several banks in the last three years.
According to a statement released by Credit Suisse, the agency has not imposed any fines, ordered any disgorgement of profits or limited its business activities. The bank also expressed gratitude for FINMA’s “acknowledgement of the improvements that have been made to our compliance and control framework over the last few years.”
Three Indian Banks to Pay Penalties for Failing to Report Fraud
Indian regulators, however, are not so benevolent when it comes to dealing with this kind of violations. The Reserve Bank of India (RBI) has recently imposed monetary penalties on three state-run banks which have failed to detect and report on time accounts associated with fraud. In early September, Indian media reported that the central bank has fined the Union Bank of India, Bank of India and Bank of Maharashtra 10 million rupee each (~$ 138,000). They have been accused of contravention of RBI’s instructions contained in a document titled Master Circular on Fraud – Classification and Reporting. According to the released separate statements, the penalties have been imposed under the provisions of the Indian Banking Regulation Act, taking into account the delay on the part of the banks to report fraud.
British Bank Fined for Moving Money on Behalf of Iranians
Cryptocurrencies are often criticized for offering organized crime syndicates, terrorist organizations and rogue states the opportunity to transfer funds internationally and circumvent sanctions imposed by First World governments and international financial organizations. But as it has been revealed recently, banks have been also tempted to facilitate the needs of such actors.
London-headquartered Standard Chartered is facing a new penalty for breaching sanctions against the Islamic Republic of Iran, Bloomberg reported in August. In 2012, the British bank paid a $ 667 million fine for allegedly moving billions of dollars through the United States on behalf of Iranian clients. This time, the US investigation into its Iranian dealings may lead to a criminal penalty, according to several unnamed sources familiar with the case.
The resolution is expected by the end of the year. A number of American government and regulatory agencies are involved in the probe, including the US Justice Department, New York’s Department of Financial Services and the Manhattan District Attorney. In a statement, Standard Chartered said it’s fully cooperating with the investigation.
What do you think about these cases of banks involved in money laundering and fraud schemes? Share your opinions in the comments section below.
Images courtesy of Shutterstock.
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The post More Banks Sanctioned for AML, Fraud-Related Violations appeared first on Bitcoin News.
The lira’s fall intensified, with U.S. sanctions on Turkish officials adding to a long list of problems for the country’s embattled markets and economy.
WSJ.com: What’s News Europe
President Trump said he was working with Chinese President Xi Jinping to keep ZTE in business, throwing an extraordinary lifeline to the stricken Chinese telecommunication giant.
WSJ.com: US Business