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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.

Bank of Venezuela Banned by P2P Exchange Firm Due to US Sanctions

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Citing US sanctions against Venezuela, Paxful, a peer-to-peer bitcoin exchange platform, has notified its clients that it will no longer accept transactions from the most important financial institution in Venezuela, the Bank of Venezuela.

As a matter of fact, trading in Venezuela for the digital currency is now more difficult for bitcoin traders, even though Venezuela leads the region of Latin America in Bitcoin trading volume.

In addition, Paxful explained through an email sent to customers that the compliance department of the firm is required to cooperate with the U.S. Foreign Asset Control Office. Because of this, the email stressed that any trades made through the state-owned bank would be deactivated instantly.

Only trades through Bank of Venezuela are restricted

According to a post shared through the firm’s website, Venezuela is among the counties with international sanctions imposed on them. Although Venezuelans are not restricted from carrying out P2P trades on the platform, cryptocurrency traders in the Latin American nation are mandated to confirm their identities and prove that they are not people who “threaten international stabilization efforts.” 

Meanwhile, only trades through the apex bank of Venezuela are banned. The latest change shocked cryptocurrency traders and the industry as a whole. For a long time, payments were facilitated through the State-owned bank, even with the embargoes in effect. In response to further explaining the matter by a Paxful user on Twitter, the firm stated, “Venezuela, and now this government-regulated bank, are part of the list of countries sanctioned by OFAC.” 

Other P2P platforms accepting transactions through the central bank

LocalBitcoin accounts for an enormous amount of Bitcoin trade in Venezuela, outdoing Paxful by far according to Useful Tulips data. Other peer-to-peer exchange giants Binance also allows transactions through the  Bank of Venezuela.

Over social media platforms and private chat rooms, paxful users expressed dissatisfaction with the platform ‘s latest decision. According to Luiz Elvis, a crypto trader who joined the Paxful community to champion the adoption of petro cryptocurrency: “I think this measure affects the development of the crypto ecosystem in Venezuela. It seems to me that the company is exaggerating [the effect of the sanctions].”

Bitcoin Trading Volume Dwindling as Investors Become Nervous

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The price of Bitcoin is currently in consolidation within the lower $9,000 price level. This is the region where the cryptocurrency has been trading for the last day, as both the buyers and sellers reach a stalemate, pushing down the Bitcoin trading volume.

This consolidation has triggered a reduction in Bitcoin trading volume, which has been soaring high over a multiple week time frame. Additionally, it seems that the investors have become nervous as it’s getting increasingly unclear where the world’s largest cryptocurrency will go next, up or down?

Bitcoin trading volume declines as the crypto commences consolidation stage

Last week, Bitcoin suffered vast volatility that was triggered by the transfer of 50 BTCs from an account that has been dormant for over a decade. This price volatility happened when Bitcoin’s price was about $9,800, triggering a sharp decline to $8,800 lows. At this point, the buyers upped their game to regain the $9,000 price levels.

Notably, Bitcoin has formed a string of lower highs over the past couple of weeks, as it saw a number of harsh rejections at about $10,000, distracting its momentum. Its current dull price action has already made investors nervous and fearful, resulting in a decline in the Bitcoin trading volume.

Bitcoin traders have become fearful

A recent study carried out by Arcane Research concluded that BTC’s trading volume is diminishing after hitting this year’s high last week. The decline has conflicted with the occurrence of last week’s vast volatility, which seems to symbolize a shift of sentiment in the industry.

https://alternative.me/crypto/fear-and-greed-index/

According to the study’s report, Bitcoin’s stalling price action has got the investors nervous. Per the Fear and Greed Index, market participants have become more fearful as Bitcoin fails to break past $10,000. If Bitcoin carries on with its price struggles in the coming days, investors will get even more worried and fearful.

Bitcoin Price Tumbles by 20% Just Days before Key Halving Event

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Bitcoin price tumbled by close to $1,500 only two days before the halving event, displaying the trembling confidence in the flagship digital currency. Earlier today, the price of bitcoin plunged by 20%, resulting in huge liquidations across the cryptocurrency market.

Nevertheless, several technical patterns indicate that the firm support around $8,000 will prevent bitcoin from tumbling further down. Major cryptocurrency exchange, OKex, seems to had predicted the current movements of the BTC price action. The crypto exchange firm analyzed the behaviour of the other altcoins pre and post their respective blocks halving.

Similar movements as Bitcoin price action around halving

In the case of Bitcoin Cash, it saw a huge rally that elevated its price by a massive 38 percent as its block rewards halving approached. After a reduction in its roll-out rate, there was a substantial growth in the urge to sell BCH, that kindled a 27 percent price correction.

Likewise, BSV rallied by over 55% ahead of its block rewards halving to reach a high of $227. According to web search volume data, fanfare surrounding BSV dwindled post halving. As a result, BSV entered a correctional stage plummeting by almost 20%. 

Sufficient support available for Bitcoin

Over the past 48 hours, the Bitcoin price has plummeted by nearly 20%. The popular digital currency fell from a high of $10,080 to lows of $7,940, which is consequently the exact position where the 200 and 100-day moving averages are.

Bitcoin price

This key demand barricade seems to have been successful in halting BTC from the further drop. In fact, this support level resisted Bitcoin price, shifting it back above $8,600. 

On an alternative view, the rejection seems to have emerged from the lower boundary of a mounting parallel channel where bitcoin has been held since the mid-March crypto market collapse. Since the Market crash on March 12, every time Bitcoin shifts to the upper boundary of the channel, it drops down reaching the lower boundary. From this level, BTC surges once again.

The recent drop seen by BTC was triggered by a  huge amount of long positions that were liquidated. According to Datamish, on Bitmex alone more than $246.5 million was liquidated for the traders betting on an upswing.

Bitcoin’s Price and its Market Trading Volume had Low Levels of Correlation in Q1 2020

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The digital asset industry faced a lot of adversity in 2020. Slapped with the first financial meltdown, the journey through the first quarter of the year was rocky and unstable. However, the collective virtual asset class has performed commendably well in spite of facing a detrimental March.

Now, according to tokenInsight’s recent report, it was suggested that the trading volume exhibited by the crypto spot markets in Q1 2020  was close to a whopping $6 trillion in the market. The rise from the previous quarter was about 104 percent and the confidence level indicated in the trading was decent with 60-70%.

However, the report also highlighted a few of the drawbacks that were witnessed during the 1st quarter.

Bitcoin’s price and market trading volume exhibit low correlation

The impact of high trading volume in the crypto industry should directly translate into a price increase or decrease and it is one of the main traits to identify market change.

Although Bitcoin’s price did register turbulency during the first quarter, the report indicated that the correlation between BTC price and trading volume was extremely low. The correlation was as low as 0.04. For comparison, it was 0.78 in 2019. Additionally, the biggest difference was in correlation was observed before and after the crash of 13th March, as the correlation index pictured a value of 0.6 and -0.21 respectively.

The drastic disparity was largely due to abnormal investor behavior and the larger collapse on the traditional market side had led to a cascading case of liquidity. As the capital dried up in stocks, the sharp drop in sport market prices translated in Bitcoin as well. The report added,

“On the other hand, because the market has been baptized, the overall structure of the digital asset market ’s high leverage has been readjusted under the extreme market shocks, and investors have reduced the chase after the rise. The shock cycle is conducive to the long-term development of the digital asset market.”

The dilemma of the fake trading volume

Another concern raised by the report is the increasing volume of fake trading or wash trading, as they say. As mentioned earlier, the total trading volume of 279 centralized exchanges in this quarter was about $6.47 trillion, and quite a bit of that was a faking trade volume.

While the industry is becoming more transparent over the year, the report suggested that investors should be more mindful of exchanges with a high level of trading volume, but within a short period of development. The report concluded,

“Due to the current regulatory uncertainty of the digital asset market and the characteristics of centralized platforms that are easily manipulated by malicious parties, investors should keep their eyes open, and do not readily believe in the promotion of their websites and some media.”