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Perkshield Blockchain Security Analytics Reveals $1.4B of Laundered Money was Moved Across Crypto Exchanges

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The security incident on Twitter on Wednesday left a lot of people wary of crypto and bitcoin in particular. While the social media company has investigated and fixed security loopholes, its share price on the stock market has decreased significantly by almost 4 percent. 2020 as in the past years, cryptocurrency hacks are not without blame. After the incident, the hacker walked away with nearly $116,000 laundered money.

However, these hacks also fuel a movement dubbed “Ban Bitcoin;” arguing that the absence of bitcoin would lay the foundation of a scam-free World. Mainly because some critics believe that bitcoin is the most loved incentive for scams. The fact that the bitcoin blockchain is encrypted and transactions seem to be untraceable, bitcoin haters have turned to claim that the coin allows criminals to supposedly hide their trail. On the other hand, several bitcoin fanatics have come out to dismiss the hack as a colluded event to outlaw bitcoin. 

“Why?”They are asking, 

Could cybercriminals bypass Twitter’s two-factor authentication just like that and hack into high-profile individuals. Some allegedly questioned why hackers did not take over President Trump ‘s active twitter account.

It’s impossible, however, to ban bitcoin. The Federal Bureau of Investigation is leading the Twitter probe. Which, by far, seems to be one of the worst social media attacks in history.   Crypto analysts believe that leading exchanges, such as Binance and Okex, have the opportunity to track the recipient of the $116,000 sent by approximately 300 people in the four-hour record hack.

$1.4 Billion of Laundered Money in the Hands of Crypto

It’s a Peckshield Security Company report that has revealed exchanges are the recipient of at least $1.4 billion of the world’s laundered money this year.

The report highlighted data collected from online and offline sources over the past year. Following a thorough verification and analysis of the data, the company identified at least 100 million transaction addresses. Approximately 50 million major crypto addresses were identified at exchanges. The company then ranked the exchanges according to the amount of stolen cash they contained and found the top ten included: Coinbase, Bithum, HaoBTC, Luno, Bitmex, Gate.io, ZB, Okex, Binance and Huobi.

Peckshield suspected crypto wallets containing illicit money related to the dark web economy gambling and hacker attacks. A large segment of which included funds stolen during major crypto and exchange hacks.

Texas Man Indicted after Securing COVID-19 Relief Loan to Invest in Crypto

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The United States Department of Justice (DoJ) has indicted a Texas man with securing a double relief loan of $1.1 million from the Paycheck Protection Program (PPP) of COVID-19. Conversely, Joshua Thomas Argires, as per the DoJ, has invested a portion of the funds in digital assets.

The acting Assistant Attorney General, Brian C. Rabbitt, claimed that the accused had been detained on the accounts for deceitfully securing over $1.1 million in PPP loans. The 29-year-old allegedly applied for two fake loans, one on behalf of an entity dubbed Texas Barbecue, and the other on behalf of a company named Houston Landscaping.

The accused claimed that the two entities had a lot of staff working and a high salary outlay. According to the complaint, neither of the two entities has staff, nor does it pay salaries in the amount specified by the applicant.

Argires channeled COVID-19 relief loan to Coinbase

The court filing states that on May 17, the accused had opened a Coinbase account under the name of Texas Barbecue, without any physical address. He is registered as the account’s single owner. On May 19, he began to transfer $956,250 of the COVID-19 relief loan into the Coinbase account.

The court document asserts some of the funds had to be used to invest in digital currency and yielded some profits. The document also states that none of the funds had been transferred from the Coinbase account.

Small businesses qualify for PPP loans

On the other hand, the COVID-19 relief loan secured through Houston Landscaping was retained in a bank account. Argires gradually withdrew the funds through over ATM dispensers, according to the DoJ.

The pandemic relief fund, or the CAREs Act was signed into law back on March 29, to offer contingency to Americans negatively affected by the pandemic crisis. Furthermore, the Small Business Administration provides PPP loans under this act; making small entities eligible for loans with a 1 percent interest.

Ethereum based Address holding $100,000 blacklisted by CENTRE

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For the first time in the digital asset industry, a crypto address was blacklisted on the basis of a law enforcement request. According to the reports, CENTRE, an organization that issues USDC stablecoin at the top of the Ethereum blockchain, blacklisted an address worth USDC $100,000.

The request for a law enforcement application has yet to be disclosed, but CENTRE, an organization launched under Circle-Coinbase, has issued a statement. It’s said,

“Centre can confirm it blacklisted an address in response to a request from law enforcement. While we cannot comment on the specifics of law enforcement requests, Centre complies with binding court orders that have appropriate jurisdiction over the organization.”

Josh Hawkins, Circle Spokesperson, speaking on behalf of the incident, said that the blacklisting had taken place back in mid-June, but the representative failed to give any further input on the incident.

According to Etherscan.io, on 16 June a blacklist function was called to that particular “blacklist” address by 0x5dB0115f3B72d19cEa34dD697cf412Ff86dc7E1b, which was an entity owned by the parent organization, that is CENTRE.

According to a policy document shared by the media outlet, it has been stated that a blacklisted address will no longer function as a free address for receiving and transacting USDC and that the crypto assets under the address can not be transferred on-chain. The document referred to,

“To ensure effective Centre oversight of this Policy, Centre will regularly report publicly, the most up-to-date list of blacklisted addresses, amount of USDC tokens frozen, and corresponding fiat reserves that have been segregated. In addition, this information will be verified and publicly reported by the monthly attestation of the Centre’s outside accounting firm.”

The above incident has now brought into question the decentralization standards adhered to by CENTRE and USDC if the organization is easily able to blacklist an address without user consent, and Circle ‘s website has also indicated that blacklisted addresses could possibly be “totally and permanently unrecoverable.”

Such censorship was the result of a short reaction from the user of Reddi,

“Central government control and censorship are just going to get worse.”

Wirecard to Resumes Operations After FCA Lifts Restrictions

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The U.K. Financial Conduct Authority ( FCA) announced on 29 June that it would lift the restrictions imposed on the German payment firm Wirecard AG, allowing Wirecard to resume operations. The watchdog noted that it had provided a written agreement to Wirecard ‘s subsidiary, Wirecard Card Solutions, to resume its e-money and payment services, although some limitations remain.

The UK financial watchdog ordered the e-payment firm to halt operations on 26 June, following the submission by its parent company of an insolvency application in Germany. The move to lift the ban allows the users of the firm to access the financial services they have been locked out.

Wirecard’s clients can now access financial services

The limitations imposed on the fintech firm include not being able to dispose of any assets or money, not to run any regulated activity, and put a statement on its official website notifying users that it is no longer authorized to carry out regulated activities. Nevertheless, clients can now use their debit cards freely without interruptions. A statement by FCA reads:

“We know that some people may have faced difficulties over the weekend and we worked with DWP, HMT and the Home Office in order to help anyone suffering financial distress. Anyone who is still in difficulties should see our website for more details.” 

Insolvency proceedings

Despite the lifting of the restrictions by the FCA, experts suggest that the issue could have permanent damage to people’s trust in fintech firms. In particular, firms such as Curve and Anna rely on their e-money licenses to manage payments but do not hold banking licenses to hold client funds. The funds are instead ring-fenced with a third party financial institution.

Germany-based Wirecard has stated that it will continue to operate despite insolvency filings last week. The company also stated that it is exploring whether its subsidiary firms will also be required to apply for insolvency. In addition, the American subsidiary of the company which it acquired from Citigroup in 2016; stated on 29 June that it was looking for a buyer.

Crypto’s Relationship with KYC: How are Companies like BeFaster Transforming the Future Landscape?

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The cryptocurrency industry is no stranger to controversies surrounding it in terms of privacy and security. Multiple reports have claimed that the number of scams and frauds in the digital asset sector has only increased over the year with projections looking at higher numbers.

To put a stop to these issues, many cryptocurrency organizations and companies brought in the concept of Know Your Customer [KYC]. The idea of KYC was first popularized in the mainstream banking culture where customers were held accountable for their accounts and their actions in the financial ecosystem. This was also a way to ensure that institutions were not dealing with bad actors who used legitimate channels to funnel dirty money.

It is interesting to see how far the cryptocurrency industry has come from its initial days of being the wild wild west of the financial world. When Bitcoin was first introduced to the public eye in 2009, very few people were involved in trading it. As the number of investors and traders increased, the regulatory system could not keep up with. This led to large scale scams that resulted in people losing millions of dollars worth of their holdings. 

As the industry progressed over the years, regulatory authorities like the US Securities and Exchange Commission [SEC] and CFTC made it a point to keep a close tab on it. At the same time, crypto companies also understood that if they needed to be accepted into the mainstream fold, they had to take certain steps to ensure customer and capital safety. Since 2013, a majority of the companies in the cryptoverse such as Coinbase and Binance have integrated KYC and AML into their workings. 

AML or Anti Money Laundering is a way to keep track of funds within a cryptocurrency system and its buy and sell points. Bodies such as the SEC have repeatedly pointed out that the main reason why cryptocurrencies are not considered as a legal tender is because of their decentralized nature. Some of the common steps in a KYC process are:

  • Verifying customer identity- Customers are usually asked to upload a document that is valid and not expired with a photo that is included. 
  • International customers are asked to provide another layer of confirmation because of a company’s lack of physical reach across borders.
  • Over the years, crypto companies have made it easy for customers to provide documents thereby allowing trades to take places at a seamless rate.

The side effects of large scale KYC implementation

Although KYC is seen as a step in the right direction when it comes to privacy and customer protection, many have called it a blatant violation of credential safety. Many crypto traders have admitted that the anonymous nature of the industry was one of its main attractions. Taking that away made just like any other financial system where user information was privy to the government.

This issue reached a head when rumors began circulating that Coinbase was planning to sell its blockchain analytics software to the US government. The uproar was not just verbal as customers withdrew almost $200 million worth of Bitcoin in an instant. The news was also a good starting point for several other exchanges that did not ask for any KYC details.

The future of KYC

It is pretty safe to assume that the concept of KYC is not going anywhere if the cryptocurrency sector wants to go mainstream and achieve global adoption. Companies will have to comply with certain regulations set by governments and regulatory authorities but that does not mean that they have to forgo the core fundamentals of the virtual asset world. 

Blockchain-based fitness application BeFaster.fit is an example of an organization that has adopted KYC while retaining its core values. BeFaster investors are required to submit details that are checked and stored by third parties contracted by BeFaster.fit and which are not disclosed to any external party.

It is imperative that more companies adopt this routine so that there is a proper check-in the ecosystem they are creating. At the moment, the onus is on both companies and users to protect the ecosystem before naysayers wipe it out with their criticism.  A project or start-up that does not offer the KYC process on its own or through an external service provider is definitely not a safe haven for investors.

In today’s world, one can deduce that projects without KYC often have no honest intentions. Of course, a KYC procedure is associated with a certain amount of effort for many investors. But it protects the investor from scam projects and a possible total loss. A company without KYC may receive a regulatory ban and have to cease operations. 

A project or start-up that does not offer the KYC process on its own or through an external service provider is definitely not a safe haven for investors. In today’s world, one can deduce that projects without KYC often have no honest intentions. Of course, a KYC procedure is associated with a certain amount of effort for many investors. But it protects the investor from scam projects and a possible total loss. 

A company without KYC may receive a regulatory ban and have to cease operations. Here, the responsible authorities are taking more and more frequent and binding action to provide the greatest possible security for the entire financial-economic structure. In summary, it can be said that companies and projects with KYC procedures are more likely to meet the regulatory requirements and licenses. A strong foundation steeped in fund protection is the way to go for future mass adoption.

Here, the responsible authorities are taking more and more frequent and binding action to provide the greatest possible security for the entire financial-economic structure. In summary, it can be said that companies and projects with KYC procedures are more likely to meet the regulatory requirements and licenses. A strong foundation steeped in fund protection is the way to go for future mass adoption. 

Disrupt Ride-Sharing Through the Blockchain

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Decentralized Ride-sharing applications will disrupt both Uber and Lyft. If the two leading on-demand services fail to adapt, there is indeed fear of replacement.

Uber and Lyft are currently not at their best and both decentralized ride-sharing services are plagued with complaints because of their lack of control over users and drivers. Last year, following 6,000 cases of sexual assault in their cars, Uber’s stock fell by 2 percent over the previous two years.

These, in addition to many other criticisms currently faced by Uber and Lyft, are all based on the inconvenience of centralized ride-sharing services. Consequently, they provide some huge potential market penetration for a decentralized ride-sharing service.

Blockchains became the hype of the day with crypto personality and billionaire Mike Novogratz contemplating the idea of a decentralized ride-sharing service. Crypto experts believe there is a massive potential for blockchain ride-sharing applications that will lead the industry to significantly improve.

Centralized, lack of trust, data privacy is a major concern for Ride-Sharing Services

Existing ride-sharing applications need to be fixed in the following areas: Centrality leading to lack of transparency, lack of customer identification, the security of payments, and data piracy. Blockchain in ride-sharing holds the potential to disrupt the industry and provide a means of improvement.

For instance, the processing of large amounts of user data calls for a specific driver and driver verification. The identity of the service provider will remain evident to service clients, and vice versa. This will strengthen transparency and trust.

Storage will be on the blockchain after processing of this data. In addition, the blockchain will protect the ride-sharing database from identity theft. In particular, it granted strong cryptographic keys to the blockchain. Decentralized ride-sharing services will, therefore, reduce the chances of attacks and data manipulation.

The ability of the blockchain to sign digital contracts and make direct payments will be handy in securing ride-sharing payments. These direct payments will not require a gateway for third parties, such as Visa or Mastercard. Therefore, reduce transaction fees and rely on the benefits of cryptocurrency transactions.

Meanwhile, leading industry experts conclude that blockchain will disrupt the space for ride-sharing. Decentralized ride-sharing services will give riders and drivers a great deal of user control.

Bitcoin May Rally After 2nd Trillion Dollar U.S Stimulus Payments: OKEx CEO

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After an unexpected market collapse in March 2020, Donald Trump, President of the United States, signed a monumental stimulus bill worth close to $2.2 trillion. The $1200 stimulus check was sent to every individual and small business in the U.S. across the nation.

On 22 June, President Trump was asked about the 2nd round of stimulus payments and he responded in anticipation that another stimulus check was on the way. The announcement received a response from Jay Hao, CEO of OKEx Exchange, who believed that another Bitcoin price rally could be driven by the second round of stimulus.

In a recent LinkedIn post, Hao stated that during the 1st round of stimulus payments, Bitcoin ‘s valuation had jumped by 58 percent from $6,500 to $10,450, and expected a similar turn of events with the 2nd round of stimulus payments.

He added that two major aspects may come into play during this time, which include institutions and retail interest in Bitcoin. Taking Grayscale’s example, he said,

“According to the trust’s latest investment report released on June 19, its current total investment in the digital currency is $3.90 billion, of which Bitcoin shares account for 88.8% (about 369,368 BTC).”

Hao believed that Grayscale’s accumulation spree was a direct indication of the increased rate of institutional adoption of Bitcoin. Although there is no concrete evidence that Grayscale Bitcoin Trust is a publicly traded investment vehicle in the U.S. where institutions can invest in Bitcoin, Hao ‘s comment made sense.

With Federal Reserves recently revealed that banks currently had an abundance of cash, OKEx ‘s CEO suggested that further capital flow would allow retail investors to recognize Bitcoin as an alternative investment. With major banks offering extremely low-interest rates, Bitcoin appeared to be the ideal form of investment for higher ROIs.

$1200 worth BTC deposits spiked during 1st U.S Stimulus payments 

https://twitter.com/brian_armstrong/status/1250907110730170370?s=20

It is worth noting the fact that during the 1st round of stimulus checks, Brian Armstrong, CEO on Coinbase revealed a chart that identified a spike in $1200 deposits on his exchange. Binance US had also reported that users were depositing $1200 increments on the U.S division on the exchange.

Considering Bitcoin had generated such interest when the asset was involved with extreme volatility, the recent stability attained by BTC may improve upon this sentiment of people. Hao’s comment may ring true in the aspect, and another price rally for Bitcoin could possibly surface after the 2nd round of stimulus is activated across the U.S states.

PayPal Seeking Crypto Engineers Amid Alleged BTC Consolidation 

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PayPal is looking to hire experts in blockchain and cryptography, as the word in the streets is that the international payment system seeks to integrate direct crypto purchases into its more than 300 million users. The roles of the open positions can be accessed publicly through the job board of the firm.

The most exciting opening is a job titled Technical Lead – Crypto Engineer.” The job listing outlines that the candidate will oversee “new initiatives for PayPal global with a focus on agility, time-to-market, and innovation. The role includes designing, developing, and maintaining key crypto products/features targeted towards availability, performance, and scalability of PayPal services.”

The next opening will be for a blockchain research engineer who will perform his duties with PayPal’s research team. These job openings are live on the job boards of the platform. At the same time, the cryptocurrency community is thrilled by the rumors that PayPal is finally set to give in and join the cryptocurrency industry.

The requirements for the position outlines several skills that converge with the development of Bitcoin. Some of the outlined skills include experience with C++, asymmetric cryptography, and cryptographic libraries. Bitcoin consolidation with PayPal might be imminent. 

PayPal crypto integration rumors

According to a report by Coindesk, PayPal is planning to launch direct crypto sales to its over 300 million users. In the meantime, PayPal can only be used as a means to withdraw funds from crypto platforms such as Coinbase. Launching direct cryptocurrency sales will be the first of its kind for the global fintech company.

Although PayPal refused to disclose further information on the plan. Moreover, one of the well-placed sources noted that it is not clear how many digital currencies the platform will support. Another source claimed that the buying and selling of cryptos could be launched on the payment platform within the next three months.

America’s New Comptroller Of The Currency is a Blockchain & Bitcoin Bull

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The new American Comptroller Of The Currency, Brian Brooks, is currently the new top banking regulator for President Donald Trump’s administration. Formerly, Brooks served as Chief Legal Officer of Major San Francisco’s Coinbase Digital Currency Exchange Platform.

Brooks’ appointment as an acting-Comptroller Of The Currency is a clear message that Blockchain is not a drawback; according to Brooks, Blockchain is a modern-day solution to our problems. While speaking to Forbes, Brooks said:

“Blockchain has potential to connect up, in a decentralized network, all kinds of data. It has the ability to create large, friction-free, decentralized networks of people. There is huge and great promise in Blockchain and crypto.”

Brooks bullish on bitcoin

Brooks also spoke comprehensively about digital currencies, regulations, and technology in general. While discussing cryptocurrencies in general, America’s new Comptroller Of The Currency specifically cited Bitcoin, Ethereum, and Ripple as solutions to multiple setbacks faced by more than a thousand banking institutions.

Recently, on 2 June, Brooks proposed a regulation aimed at rewriting the current “Bank Digital Activities” laws. The request for comments and public opinion signed by the new Comptroller Of The Currency includes the question of how artificial intelligence and blockchain technologies could be integrated into strict banking regulations.

America’s new Comptroller Of The Currency urges FED to adopt Blockchain in money transfer

Brooks is more troubled about the outdated techniques that financial institutions use to transfer money. He says:

“It takes three days if you’re trying to send money from the US to Europe… on the SWIFT network. Your money is at risk during that period. And even when the money is transmitted, foreign exchange fees are incurred. But a digital representation of value on both sides of the transaction can eliminate that friction and those costs.”

According to Brooks, the fact that other nations are developing modern payment systems is a threat to the United States. He also aims sly dig at the Federal Reserve, claiming that it is slow in adopting modern money transfer methods such as Blockchain, which are instantaneous.

JPMorgan’s Bitcoin Flip Complete With a Bullish Report

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JPMorgan Chase, the largest bank in the United States and once the biggest critic of Bitcoin, now seems to have completely changed its mind. Besides, JPMorgan’s Bitcoin flip seems to be sitting well at the price of the world’s leading cryptocurrency. Bitcoin is on the rise again and has already added about $200 after dropping to $9,000 price level recently.

In the past, Jamie Dimon, CEO of JPMorgan Chase, labeled Bitcoin a fraud. Damon also described the obsession in BTC as a tulip bulb. However, it appears that the large financial institution is switching its stance towards the world’s top virtual asset by market capitalization.

 

JPMorgan Chase vs. Goldman Sachs

According to a new report published by JPMorgan Chase, the bank’s researchers describe Bitcoin as ‘mostly positive,’ stating that it has ‘longevity as an asset class.’ This is the complete opposite of what JPMorgan’s huge rivals, Goldman Sachs noted in their latest clients’ call for bitcoin and gold. According to Goldman Sachs, bitcoin is a poor investment, adding that BTC is not in any way, shape, or form an asset class.

The report by JPMorgan read:

“Though the [bitcoin] bubble collapsed as dramatically as it inflated, bitcoin has rarely traded below the cost of production, including the very disorderly conditions that prevailed in March.”

In March, the price of Bitcoin came tumbling down, resulting in the flagship cryptocurrency losing about 70 percent of its value. A month before the March crypto market crash, Bitcoin was trading well above the $10,000 mark. A few weeks later, the price dropped significantly to slightly hit the $3,000 price level, heartbreaking many investors across the world. Many traders and investors were wondering whether 2018 was being replicated all over again.

Nevertheless, this wasn’t the case this time around. Within thirty days, the top cryptocurrency had managed to recoup almost all it had lost with its price action; slightly reaching the $10,000 mark in both May and June. Those quick reflexes to regain a 70 percent loss amid an economy ravaging pandemic should not be downplayed.

What next after JPMorgan’s Bitcoin flip?

The latest report is another step towards a longstanding JPMorgan’s Bitcoin flip. In 2019, reports surfaced that the financial institution provides banking services to some of the largest cryptocurrency exchanges in the United States, such as Coinbase and Gemini. The report further states that:

“There is little evidence of run dynamics, or even material-quality tiering among cryptocurrencies, even during the throws of the crisis… [Bitcoin] price action points to their continued use more as a vehicle for speculation; than a medium of exchange or store of value.”