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Law Decoded: Police and thieves on their screens, Oct 2–9

October 9, 2020 by Blockchain Consultants

Every Friday, Law Decoded delivers analysis on the week’s critical stories in the realms of policy, regulation and law.

Editor’s note

Historians typically date the birth of international policing as we know it today to the 1800s, a response to the explosion in nationalist movements and non-governmental political radicalism in Europe. Just as new linking technologies like the telegraph and the steam engine aided and abetted new networks of political deplorables and any number of Sherlock Holmes plots, the explosion of communications tech of the last quarter-century has brought about new forms of crime. 

Which is, y’know, something everyone passively knows. In crypto, association with crime is a familiar reputational issue that is present but certainly not unique. New technology giveth and taketh away. Law enforcement’s interest in controlling new networks also grows. Paranational organizations like drug cartels and terrorist cells come to mind.

This week saw the U.S. Department of Justice press criminal charges against ISIS agents behind American deaths including James Foley’s, a move that expands their power to prosecute foreign agents as criminals under U.S. law. The FBI also busted up a home-grown far-right conspiracy to kidnap the governor of my home state of Michigan. In crypto, several jurisdictions have laid claim to new authority, with the DoJ in particular making a number of moves to expand its jurisdiction.

DoJ vs. everybody

The Justice Department’s new “Cryptocurrency Enforcement Framework” laid claim to a whole host of powers over crypto businesses that had previously been in limbo. Most notable is the generosity of what the DoJ is calling its own jurisdiction — basically anything that touches a U.S. server.

The new framework heralds a new era in the department’s crypto authority, but it’s just the clearest summary of a growing body of precedent that U.S. regulators from the SEC to the IRS have been building out for years.

The DoJ’s criminal charges against Seychelles-registered BitMEX’s leadership last week in some ways telegraphed their particular interest in combatting crime in crypto wherever in the world it may be. Most earlier involvement in crypto-linked prosecutions abroad had been focused on networks the DoJ saw as being primarily designed to finance terrorism or funnel money to sanctioned individuals. While the DoJ accused BitMEX of being a means for such action, the allegations against the leadership are not really accusing them of ideological or political illegality, but rather old-fashioned greed.

Distressing for the crypto community is, as always, the association with criminal activity. The DoJ’s report pays lip service to blockchain technology’s ability to revolutionize payments, finance, international trade, shipping, trust, consensus et al — I assume that this readership is familiar with the myriad use cases — but the report pivots compulsively to crime. From the DoJ’s side of things, that is their trade, so it makes sense, but it also adds to the unfair stigma against a technology.

Another cause for concern is that tech-savvy people in the U.S. can get around the barriers by really any crypto company, given enough time and potential profit. So as with the general trends of the last year, U.S. authorities really do seem to be building out the legal framework to give themselves jurisdiction over crypto basically anywhere. World Police indeed.

UK shuts door on whole genre of crypto investment

The United Kingdom’s Financial Conduct Authority nixed trading of crypto-based derivatives — including futures, options and swaps — for all retail investors starting in January.

While the FCA may not be as globally hawkish on crypto as its U.S. analogues, London remains Europe’s financial center. Much like Brexit itself, the predicted exodus from London has seen delays that seem to mock all bold predictions.

With its focus on retail investors, however, the FCA has obviously designed its new ban to be more of a protective maneuver for regular Britons rather than a handicap on the reigning heavyweight champs of the London Stock Exchange.

Nonetheless, as the UK’s position within both Europe and the global economy is vulnerable, implementing a stringent ban on a new asset class seems like yet another way of recusing itself from the financial future. As mentioned earlier, determined UK crypto investors will almost certainly be able to get around the new ban to access offshore exchanges with less legal accountability to the UK and more extravagant and risky leveraged offerings. 

But maybe a somewhat built-in assumption is that, while the technological implementation of any ban is going to be slow and imperfect, a retail investor capable of working around it is not exactly the person the FCA is most worried about protecting.

DoJ vs. the elusive Mr. McAfee

After decades of intercontinental outrageousness, John McAfee was arrested in Spain for tax evasion. He also faces a suit from the SEC for fraudulent ICO promotion.

McAfee first found success in the 80s at the head of the firm that produces the antivirus software that still bears his name. He left the company in the 90s and has been bouncing around the world more or less ever since, racking up guns, substance addictions, and allegations of sexual assault and murder. Also not paying his taxes, allegedly. He was posted up in Cuba out of the reach of U.S. authorities for a while.

Despite his early successes in technology, McAfee has for decades built a personal brand on foundations of infamy. The SEC’s allegations suggest that he managed to translate that megaphone into millions of dollars by plugging into the curious hypedraulic mechanics of the ICO boom. Earlier this year, he tried to launch a privacy token that he admitted was largely taken from another project. McAfee is hardly what you would call a builder. While everyone is innocent until proven guilty, McAfee’s absence from the crypto scene would be a blessing for the industry’s reputation.

Further reads

The Bank for International Settlements put out a new and extensive report on Central Bank Digital Currencies and the associated risks and prospects.

Tax attorney Jason Freeman runs down the latest memorandum from the IRS on how to get your taxes on virtual assets in order.

Writing for the Electronic Frontier Foundation, Rainey Reitman talks problems with the extradition hearings for Wikileaks founder Julian Assange.

Law Decoded: Police and thieves on their screens, Oct 2–9

Source

Filed Under: blockchain technology Tagged With: analysis, Bank, BITMEX, blockchain, Brexit, Central Bank, crime, crypto, Currencies, department of justice, derivatives, digital currencies, doj, economy, Europe, exchange, Exchanges, exodus, fbi, FCA, finance, founder, fraud, Guns, head, Headlines, ICO, irs, John McAfee, Julian Assange, Law, law enforcement, leadership, London, McAfee, money, murder, payments, Police, Privacy, Regulation, SEC, Software, tax, Tax Evasion, Taxes, tech, Technology, trends, u.s., uk, WikiLeaks, world

Bitcoin Price Prediction: BTC/USD Consolidates Above $10,700 as Bulls Face an Uphill Task

September 30, 2020 by Blockchain Consultants

Bitcoin (BTC) Price Prediction – September 30, 2020
BTC/USD has retraced and fallen to the previous price range. The coin is likely to be range-bound in the current price range for a few more days. BTC is trading between $10,660 and $10,880.

Resistance Levels: $10,000, $11, 000, $12,000
Support Levels: $7,000, $6,000, $5,000

BTC/USD – Daily Chart

Today, BTC is trading in a confined range as the market resumes consolidation above $10,700. . The current retracement has found support above $10,680. The crypto has fallen to the previous price range of between $10,660 and $10,880. The bulls have failed in the previous uptrend as price momentum dries up after hitting the $10,880 resistance. Nonetheless, it is noted that the $10,880 resistance is the major obstacle to the current uptrend. BTC has to overcome it before resuming upside momentum.

On the upside, to achieve a compelling breakout, the resistance must be broken while the bullish momentum. is sustained. Assuming, the bulls break the current resistance, and the momentum sustained, a rally above $11,000 is possible. Above the $11,000 support, BTC will have an accelerated price movement. It is assumed that the resistances from $11,100 to $11,300 will be cleared. A retest at the $12,000 and $12,400 becomes possible if the bulls are successful. Conversely, the bears may take advantage and break the current support at $10,660 if the current uptrend fails. This will cause a further decline to $10,500 support. However, if the bears are successful the bullish scenario will be invalidated.

French Police Detains Terror Financing Ring That Uses Bitcoin Coupons
The 29 members of a network allegedly financing a jihadist network in Syria have been arrested and detained. They were arrested while buying crypto currency coupons in licensed tobacco shops across France. The jihadist network was busted after being caught purchasing crypto currency coupons in tobacco outlets across France. These coupons are worth between 10 and 150 euros each ($12–$176). The jihadist network allegedly uses the coupon to credit their Syrian accomplices’ Bitcoin (BTC) accounts. The terrorists use these services, as they don’t require proof-of-identity.

BTC/USD – Daily Chart

Meanwhile, the BTC price is stuck in the current price range. The price is consolidating and characterized by small body candlesticks called Doji or spinning tops. These candlesticks describe the indecision between buyers and sellers about the direction of the market. However, if price breaks the $10,660 support, the BTC price will fall. And if it falls below $10,000 or $9,800, the Fibonacci tool analysis will hold. That is the market will fall to the 1.272 Fibonacci extension or $9,268.10 low.

Bitcoin Price Prediction: BTC/USD Consolidates Above $10,700 as Bulls Face an Uphill Task

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Filed Under: blockchain Tagged With: analysis, Bitcoin, Bitcoin Price, btc, BTC/USD, crypto, crypto currency, Currency, France, Market, opinion, Police, Price Prediction, Syria, Trading

Indian Police Investigate Crypto Exchange Accused of Running Mining Scam

September 23, 2020 by Blockchain Consultants

Cryptocurrency fraud is currently running rampant across several countries. India is one of the countries with the most common of such criminal activities, and law enforcement is now investigating yet another case.

Branching Out Into Fraud

Earlier this week, local news source Millennium Post reported that the Economic Offence Wing of the Delhi Police had launched a full-scale probe into Pluto Exchange, a local digital asset exchange platform, and its operators. Per the report, the investigation came after 43 investors filed a complaint against the firm.

The complaint alleged that Pluto Exchange’s founder, Bharat Verma, and several other company officials, had developed a fraudulent scheme that lured investors. The scheme was purportedly a trading and mining operation called “F2poolminin.” It ran as a subsidiary of the exchange.

One of the plaintiffs explained that he met the exchange operators first at the Connaught Place, a business and technology hub in New Delhi. They told him that he could invest in the scheme and make between 20 to 30 percent monthly. He added that they also offered him some extra commissions if he managed to bring more people into the fold.

The plaintiff eventually invested $6,500 with the scheme. When he didn’t get any returns for a while, he confronted Verma, who told him that the company had been unable to pay because some of its bank accounts had been frozen, and the Bitcoin price had dropped significantly.

Per the report, Pluto Exchange had left India and is now based in Dubai. However, they’re still running the scam and have ow collected about $6.8 million from investors.

India’s Extensive Crypto Crime Problem

The Pluto Exchange saga is currently the latest in a long line of fraudulent crypto operations seeking life in India. For now, perhaps the most popular scam form has been call center scams, which are targeting some high-income residents.

India TV News reported last month that cybercriminals are targeting these victims through messages on social media, encouraging them to buy Bitcoin through a mobile app. The app, which purportedly functions as a crypto exchange, is merely a sham. Once a user deposits Bitcoin into the exchange, the scammers block the person and disappear.

A witness told the news source that an unidentified victim lost $50,000 to the scheme, while another unnamed businessman lost at least $3 million.

The scammers have also targeted some top government officials. Earlier this month, India Today reported that hackers managed to break into the Twitter account of Prime Minister Narendra Modi. The hackers, known under the collective name “John Wick,” reportedly asked Modi’s followers to donate to “PM National Relief Fund for Covid-19,” a fake coronavirus relief fund.

Blockchain data shows that no funds were sent to the site, leading to the belief that the massive Twitter hack of July had made people much wider. However, this growth in fraudulent activities is alarming.

Sidharth Sogani, the founder and chief executive of blockchain and cryptocurrency research company Crebaco, told Cointelegraph last month that Indian investors lost about $500 million to scammers both home and abroad between 2017 and 2019. hings also can get much worse, as cryptocurrencies are growing in popularity across the country.

Indian Police Investigate Crypto Exchange Accused of Running Mining Scam

Source

Filed Under: blockchain, cryptocurrency Tagged With: Bank, Bitcoin, Bitcoin Price, blockchain, Business, chief, coronavirus, COVID-19, crime, crypto, crypto exchange, Cryptocurrencies, cryptocurrency, Delhi, Dubai, exchange, executive, founder, fraud, government, hack, hackers, India, Law, law enforcement, mining, Mobile, mobile app, news, other, Pluto Exchange, Police, post, scam, scams, Social Media, Technology, Trading, twitter

Crooked police chief sentenced to 8 years for dark web shenanigans

September 22, 2020 by Blockchain Consultants

Former police chief Yuri Zaitsev was recently sentenced to eight years in prison for acting as a bounty hunter for a dark web marketplace. In December 2018, Zaitsev was working as the leader of his unit within the Main Directorate for Drugs Control of the Republic of Khakassia — a law enforcement division which is analogous to the U.S. Drug Enforcement Administration, or DEA. At that time, he initiated contact with the operator of a dark net marketplace, offering to help hunt down a man who had appropriated drugs that were entrusted to him for placement in dead drops. 

In Russia, unlike the U.S., most dark web entrepreneurs do not trust the post office for shipments. The prevailing mode of dissemination of these illegal products is instead completed through dead drops — a method of delivery by which two parties can pass items or information back and forth without ever needing to meet in person.

According to the Main Investigation Department, the cop had received the equivalent of 52,000 roubles in Bitcoin (BTC) for his services. At the time, this was equivalent to approximately, $750 or 0.2 BTC. He was found guilty on charges of bribery and the disclosure of classified information.

According to Zaitsev’s wife, his prosecution was punishment for investigating senior officials within his agency. He was subsequently fired and prosecuted. From October-November 2019, Zaitsev uploaded a number of videos to YouTube in which he allegedly exposed corruption among senior officials in his Directorate. This appears to be what led to criminal charges against him for disclosure of classified information. In November 2019, Zaitsev uploaded an appeal to president Putin on YouTube in which he pleaded his case, but to no avail.

During the unrelated Silk Road investigation, numerous law enforcement officials fell afoul to what they perceived as easy, untraceable Bitcoin. DEA Special Agent Carl Force managed to elicit 1,200 Bitcoin from Ross Ulbricht. He obtained the funds using an elaborate scheme in which he had created multiple fake personas ranging from a major South American drug trafficker to a corrupt law enforcement official. One of the tasks assigned to him by Ulbricht was hunting down and murdering a former associate who allegedly had stolen Bitcoin from him. The actual thief was another law enforcement official involved in the investigation. The murder was staged by Force, but never materialized in actuality.

The events that took place in Khakasia a few years after the Silk Road saga seem in some ways like a cheap local knockoff of an expensive HBO show. As Marx once said, history repeats itself “the first time as tragedy, the second as farce”.

Crooked police chief sentenced to 8 years for dark web shenanigans

Source

Filed Under: blockchain technology Tagged With: Bitcoin, btc, chief, dark web, drugs, entrepreneurs, events, HBO, information, Law, law enforcement, murder, Police, post, Ross Ulbricht, Russia, Silk Road, u.s., youtube

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