Bitfinex Accused of $850 Million Fraud

In the evolving story of a so-called "stablecoin" the office of New York Attorney General Letitia James accused iFinex Inc. -- operator of the Bitfinex exchange and the Tether cryptocurrency -- of trying to cover up "the apparent loss of $850 million dollars of co-mingled client and corporate funds." While researchers have tied Tether transactions to the spike in Bitcoin value that occurred between March 2017 and March 2018, this issue of the missing money is allegedly tied to a transfer of $850 million in funds to Crypto Capital Corp., a payment processor based in Panama.

The AG says Bitfinex lost access to funds it had transferred there after regular banks stopped handling its business and subsequently dipped into $900 million of Tether's cash reserves. According to the filing, Crypto Capital Corp. told Bitfinex the funds were "seized by governmental authorities in Portugal, Poland, and the United States" but the AG says Bitfinex doesn't believe that is true.

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SEC Starting to Regulate Cryptocurrency Exchanges, Warns Investors

The SEC has been zeroing in on cryptocurrency since the beginning of the year. The agency announced it would scrutinize companies generating hype by pivoting to crypto before delving deeper into initial coin offerings with subpeonas. But today the agency turned its attention to people buying cryptocurrencies, warning consumers against trusting so-called 'exchanges' that state or imply that they're protected by federal law. Spoiler: They aren't, because the cryptocurrency world remains an unregulated mess.

It comes down to semantic wording. Whether or not these online trading platforms consider the 'digital asset' cryptocoins they're trafficking to be 'securities' under federal law, the SEC likely does. That means they satisfy the agency's definition of 'national security exchanges' and should register with the SEC. If they don't, they remain outside of government scrutiny and regulation, meaning the agency can't protect individuals from any manipulative or fraudulent practices.

"Many platforms refer to themselves as "exchanges," which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange. Although some of these platforms claim to use strict standards to pick only high-quality digital assets to trade, the SEC does not review these standards or the digital assets that the platforms select, and the so-called standards should not be equated to the listing standards of national securities exchanges," the SEC stated in a post.

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Converging on Cryptocurrencies #1

Altcoins:

 Zcash, a supposedly untraceable alternative to bitcoin, has supposedly entered alpha release.

Bitcoin:

10 Dutch men were arrested for money laundering using bitcoin.

There are a lot of false beliefs about bitcoin.

There's an opinion piece on the intersection of bitcoin and politics.

Exchanges:

Cryptsy went under.  Supposedly this was caused by a hack, but given the history associated with MT Gox...

Bitstamp has banned Russian users access temporarily.

Blockchain:

Blockchain technology company R3CEV has successfully tested a bitcoin blockchain derived system for 11 international banks for bank transaction settlement.

All things blockchain are being hyped at Davos.

The Guardian REALLY hypes the blockchain.

The Economist also talks blockchain.

Some are trying to cut through the blockchain hype.

San Francisco Open Exchange Intends to be Kayak for Bitcoin Exchanges

One of the remarkable – and perhaps most confusing – aspects of bitcoin is the fact that every bitcoin exchange seems to have a different price for the cryptocurrency.

Of course, no two exchanges are ever alike because they all serve different markets. When it comes to how much it costs to buy or sell bitcoin, this is especially true.

The reasoning for this has to do with bitcoin being a global and largely unregulated market. Because it is bought and sold all over the world, there are numerous prices for it – with no centralization dictating any one.

A new startup called San Francisco Open Exchange aims to fix that. Or, at the very least, its platform will allow users an opportunity to potentially capitalize on the spread across different bitcoin exchange markets.

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Mt Gox "Finds" 200,000 Bitcoins

Bankrupt bitcoin exchange Mt. Gox says it found 200,000 bitcoins, which were previously thought stolen, in disused electronic wallets. Another 650,000 bitcoins still remain unaccounted for.

The Tokyo-based company says in a statement posted on its website Thursday that the 200,000 bitcoins were identified Mar. 7 after "old format" wallets were searched as part of Mt. Gox's bankruptcy proceedings.

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