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Bahrain’s Central Bank Issues Draft Crypto Regulations

The Central Bank of Bahrain (CBB) has prepared draft rules designed to regulate digital assets and certain aspects of the country’s crypto industry. The move aims to establish Bahrain as a regional leader in the fintech sector and restore its role as a major banking hub in the Persian Gulf.  

Also read: New Bitcoin ATM Tracker Site Launches in Russia

Addressing Market Demand

Bahrain’s Central Bank Issues Draft Crypto RegulationsThe regulations have been released for consultation and the bank has set Dec. 31 as the deadline for providing feedback. The proposals have been published on the bank’s website, local media reported.

The comprehensive rules cover the implementation of a licensing regime for companies operating cryptocurrency trading platforms. A supervisory mechanism for the providers of other services related to crypto assets has been developed as well.

The draft paper addresses the need to introduce measures to safeguard the interests of customers. It also contains technology standards designed to minimize and manage the cyber security risks associated with the nascent industry.

In a statement quoted by the Bahrain News Agency, CBB’s executive director of banking supervision Khalid Hamad explained:

This regulatory framework will address the demand from the market for these services and the need to recognize this financial innovation.

Hamad further commented that the CBB’s experience with the participants in Bahrain’s regulatory sandbox has been “insightful in shaping these rules.” The bank official was referring to Bahrain Fintech Bay, which was established to allow companies from the sector to operate and experiment with new ideas under lighter regulations.

Restoring Regional Leadership

Bahrain’s Central Bank Issues Draft Crypto RegulationsAuthorities in Manama launched the sandbox to boost the development of the fintech industry and increase the number of companies offering related services. At the same time, the initiative was part of efforts to reduce government expenditure through the implementation of new financial technology. In fintech Bahrain sees an opportunity to restore its position as a regional banking and business hub.

Bahrain Fintech Bay, which was set up in February of this year, has become home to around 30 companies working with cryptocurrencies, digital payments, blockchain and financial technologies. Other players in the Persian Gulf, including Abu Dhabi and Dubai, are also investing heavily to support the growth of fintech startups.

But while Bahrain’s CBB is working to adopt regulations for decentralized, private cryptocurrencies, the central bank of the United Arab Emirates and the Saudi Arabian Monetary Authority have announced plans to issue a government-controlled digital currency. The new “blockchain-backed” coin will be used to improve the efficiency of cross-border transactions between the two neighboring countries.

What do you think of Bahrain’s decision to regulate the crypto industry? Let us know in the comments section below.


Images courtesy of Shutterstock.


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SEC Chair ‘Optimistic’ DLT and Crypto Will Drive Investment Opportunities

Speaking as part of a testimony to the United States Senate Committee on Banking, Housing, and Urban Development, the chairman of the U.S. Securities and Exchange Commission Jay Clayton expressed optimism that the distributed ledger technology (DLT) sector will “facilitate capital formation.” Clayton also discussed the enforcement actions taken by the SEC in regulating initial coin offerings (ICOs).

Also Read: New Bitcoin ATM Tracker Site Launches in Russia 

SEC Chair Believes Crypto and DLT Will Generate Capital Formation

SEC Chair 'Optimistic' DLT and Crypto Will Drive Investment OpportunitiesJay Clayton stated that he is “optimistic” that the developing DLT sector will “facilitate capital formation” and provide “investment opportunities for both institutional and Main Street investors.”

The SEC chairman praised the commission’s regulatory apparatus pertaining to cryptocurrencies and DLT, describing it as a “balanced” approach that simultaneously “fosters innovation” and “protects investors.”

Clayton stated that the SEC has used a multitude of channels to convey its “message” to investors, citing the example of the SEC’s Howeycoins.com website. Of the site, Clayton said that the SEC “created a website to educate the public about frauds involving ICOs and just how easy it is for bad actors to engineer this type of fraud,” adding that the website attracted “over 100,000 people” within one week of being online.

Clayton Highlights SEC Oversight of ICO Sector

SEC Chair 'Optimistic' DLT and Crypto Will Drive Investment OpportunitiesThe SEC chair asserted that the commission has been “focusing a significant amount of attention and resources” to the oversight and regulation of cryptocurrencies and ICOs. Clayton emphasized the inter-division and inter-agency collaboration that the SEC has undertaken recently, highlighting the issuance of public statements regarding ICOs and virtual currencies.

Clayton stated that “while some market participants have engaged with our staff constructively and in good faith with questions about the application of our federal securities laws,” some companies have sought to “prey on investors’ excitement about cryptocurrencies and ICOs” and to engage in “fraud” or “other violations” of U.S. securities laws.

Clayton also highlighted the commission’s establishment of a cyber unit last year, stating that “In its first year, the Cyber Unit led investigations that resulted in several emergency actions to stop ongoing alleged frauds against retail investors that involved ICOs, as well as charges against a bitcoin-denominated platform and its operator for running an unregistered securities exchange and defrauding users of that exchange.”

Speaking on the cyber unit’s actions beyond ICOs, the SEC chair asserted that the unit’s enforcement actions led to the regulator returning $1.07 billion to investors during the 2017 financial year, and $794 during the 2018 financial year so far.

Do you think that the SEC’s regulatory approach is balanced? Share your thoughts in the comments section below!


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Bitcoin to Be Worth ‘Great Deal More’ in Three Years, Circle Co-Founder Says

Circle co-founder Jeremy Allaire believes that crypto valuations will increase, and BTC will be worth “a great deal more” than it is now.

Jeremy Allaire, co-founder of crypto finance company Circle, told CNBC in an interview Friday, Dec. 14, that Bitcoin (BTC) will be worth “a great deal more” than it is now.

When asked about the Bitcoin price in three years, Allaire told Squawk Box host Andrew Ross Sorkin that he does not make “significant price predictions,” while adding, “I think it is certainly going to be worth a great deal more that it is today.”

Allaire also stated that while Bitcoin is attractive as a non-state store of value, a slew of other tokens will enter the space, and the bases of their valuations will be diverse. He further explained:

“I do not think it’s a winner-take-all [situation]. We have the phrase ‘the tokenization of everything,’ and we think cryptographic tokens are going to represent every form of financial asset in the world. There will be millions of them in years.”

Allaire claimed that the crypto sphere needs clearer regulation, while noting that the United States already has “more regulatory clarity than almost any other market in the world.”

The Circle co-founder cited the need for clarification of whether crypto assets are currencies or commodities, and which crypto assets should qualify as securities. Furthermore, he believes the industry needs to define whether it needs rules for secondary trading of digital securities or a “kind of commodity spot market supervision for the crypto space.”

Earlier this week, major crypto bull and co-founder of Fundstrat Global Advisors Tom Lee claimed that the fair value of Bitcoin is “significantly” higher than its current price and should be somewhere between $13,800 and $14,800. Moreover, he still thinks that the fair value of Bitcoin could reach $150,000 after it has been more widely adopted.

As for crypto adoption, a commissioner of the U.S. Securities and Exchange Commission (SEC) Hester Peirce, dubbed “Crypto Mom” by the community for her pro-crypto stance, thinks that the process might take a long time. She urged the public not to ‘hold its breath,’ waiting for a Bitcoin ETF, as it could be “20 years away from now or it could be tomorrow.”

Swiss Federal Council: Existing Financial Law Should Be Adjusted to Blockchain Industry

The Swiss Bundesrat has called for specific adjustments of existing financial laws in relation to the blockchain industry.

The Swiss Federal Council (Bundesrat) has said that existing financial law in the country suits the blockchain industry, but needs specific adjustments. The government suggested several amendments in an official statement by the Federal Department of Finance (FDF) published on Friday, Dec. 14.

In a meeting on Dec. 7, the Bundesrat adopted a report on the legal framework for blockchain and distributed ledger technology (DLT) in the financial sector. The report analyzes relevant framework provisions, outlines the need for measures and proposes concrete steps for developing the necessary legal conditions in the blockchain sphere.

Specifically, the report recommend the development of a new and flexible authorization category for blockchain-based financial market infrastructures. It also advocates for better legal clarity for rights holders of digital registers, and ensuring that decentralized trading platforms are subject to the Anti-Money Laundering (AML) Act.

The Federal Council also mentioned the results of a cross-departmental working group on the money laundering and terrorist financing risks of cryptocurrencies. The recent report is based on the work of the blockchain/initial coin offering (ICO) working group by the Federal Department of Finance that was reportedly set up in January 2018.

Following the report adoption, the Bundesrat has instructed the FDF and the Federal Department of Justice and Police to prepare an adjustment plan for the first quarter of 2019. The Bundesrat has also commissioned the FTF to research whether money laundering law should be reconsidered in accordance with certain types of crowdfunding.

Earlier this year, the Federal Council requested a report on the risks and benefits of launching its own government-backed digital cryptocurrency called the e-franc.

European Parliament Calls for Increased Blockchain Adoption in Trade

The European Parliament has called for an increase in the adoption of blockchain technology in trade in a new resolution.

The European Parliament has called for measures to increase the adoption of blockchain technology in trade and administration with a provisional resolution published on Dec. 13.

The resolution, dubbed “Blockchain: a forward-looking trade policy,” generally considers blockchain “as a private, permissioned distributed ledger technology (DLT)” but also admits that “various case studies and industries will derive different utility from a mixture of private/public, permissioned/permissionless blockchains.”

The resolution notes that Free Trade Agreements (FTAs) in the EU are underutilized — only 67 percent of EU exporters and 90 percent of EU importers make use of the preferential tariffs — and that blockchain could help improve these trade policies.

The authors of the resolution state that “exporters could upload all their documents to a public authority application underpinned by blockchain, and demonstrate their compliance with preferential treatment granted by an FTA.”

The parliament also states that blockchain technology has potential in “providing trust in the provenance” of products and assisting and enabling customs authorities to obtain the required information for customs declarations.

Overall, the resolution proposes that DLT technology is as a way to “increase the efficiency, speed and volume of global trade by limiting the costs associated with international transactions.”

The document concludes by calling on the European Commission to “follow developments in the area of blockchain”  and develop “a set of guiding principles” for its applications. It also urges the commission to set up an advisory group on the technology and conduct policy investigations into the technology. The European Parliament states:

“The EU has an opportunity to become a leading actor in the field of blockchain and international trade, and that it should be an influential actor in shaping its development globally, together with international partners;”

Earlier this month, seven EU member states released a declaration calling for the promotion of DLT’s use in the region. The declaration was initiated by Malta, and then signed by Italy, France, Cyprus, Portugal, Spain, and Greece.

Still, the president of the European Central Bank (ECB), Mario Draghi, reportedly said in September that there are no plans to issue its own digital currency. Also, in mid-November, a member of ECB’s Executive board called Bitcoin (BTC) the “evil spawn of the [2008] financial crisis.”

Bitcoin, Ripple, Ethereum, Stellar, EOS, Bitcoin Cash, Litecoin, Bitcoin SV, TRON, Cardano: Price Analysis, Dec. 14

While total market cap threatens to break below $100 billion, new research shows that the amount of crypto users doubled by Q3 2018. Does this signal a recovery in the future?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Market data is provided by the HitBTC exchange.

A lot of crypto investors have lost a staggering amount of money this year. The total market capitalization of all cryptocurrencies is threatening to break down of the $100 billion mark. Unlike the traditional assets, there is no set standard to arrive at a fair value for cryptocurrencies. Various experts have proposed many different methods to determine the valuation.

One of the most popular Bitcoin advocates and a co-founder of Fundstrat Global Advisors, Thomas Lee, believes that the fair value of Bitcoin is between $13,800 and $14,800. He expects the price to rebound if the asset class is widely embraced and its user adoption increases.

After this year’s bear market, one would expect the hitherto existing owners to abandon the asset class. However, a study by the Cambridge Centre for Alternative Finance shows that the number of ID-verified cryptocurrency users has doubled in the first three quarters of this year — from 18 million to 35 million. Does this signal a likely recovery in the near future?

Let’s look at the charts and try to forecast whether the price will fall or rise from the current levels.

BTC/USD

A weak bounce on a retest of either a low or a critical support is a bearish indication. It implies that the price has still not reached a level that is attractive to buyers. Today, Bitcoin easily slipped through the yearly low of $3,329.05 and made a new one of $3,307.02.

BTC/USD

If the BTC/USD pair bounces off the current support and breaks out of the 20-day EMA, it will be a positive sign. Such a move can result in a pullback to $5,000.

However, if the bounce from the current level turns out weak, a break down of $3,307.02 is probable. The next support on the downside is $3,000. Though $3,000–$3,500 is a strong support zone, we are yet to see any signs of buying. If $3,000 breaks, it might invite further selling, sinking the digital currency further to $2,416.52.

The only bullish indication is the positive divergence on the RSI, but if the price doesn’t move up, it can turn into a bear trap.

XRP/USD

Ripple has been holding the support of $0.28600 for the past seven days, but it has not been able to achieve a meaningful bounce.

XRP/USD

Failure to rebound has increased the probability of a breakdown of the support. Both moving averages are falling, and the RSI is in the oversold zone. This suggests that the sellers have an upper hand.

The next level to watch on the downside is $0.24508. If this support also fails to hold, the downtrend can extend to $0.15. The first sign of a likely change in trend will be a break out of the 20-day EMA. Above this level, the XRP/USD pair might see some buying and can reach $0.4.

Traders who are long can hold their positions. We shall take a call on whether to keep holding or to sell in our next analysis.

ETH/USD

Ethereum has been clinging to the bottom of the $83–$102.5 range. This shows a lack of buying even at the current levels. The failure to move up in the past three days is likely to attract sellers.

ETH/USD

A breakdown and close (UTC time frame) below $83 will resume the downtrend and can plunge the ETH/USD pair to the next support of $66.

The first sign of an end to the incessant selling will be a sustained rally above the 20-day EMA. Until then, every pullback will be sold into.

XLM/USD

After a two-day pullback, Stellar has resumed its downtrend and has made a new yearly low. The down sloping moving averages and the RSI in the oversold zone confirm that the path of least resistance is to the downside.

XLM/USD

The next support on the downside is at $0.08. However, in a strong downtrend it is difficult to call a bottom as the price continues to slice through support levels with ease.

The first sign of a trend reversal will be when the XLM/USD pair sustains above the 20-day EMA. In such a case the pullback can extend to $0.184. Traders should stay away from long positions until the price confirms a bottom.

EOS/USD

Though EOS continues to be in a downtrend, it has been trading close to the overhead resistance of $2.1733 for the past five days. This shows some buying in the pair. However, if the bulls don’t scale the resistance quickly, it will invite selling.

EOS/USD

A break out of $2.1733 can reach the 20-day EMA, which is likely to act as a stiff resistance. The recovery will gain traction if the bulls sustain above the 20-day EMA.

On the downside, a break down of the Dec. 7 low of $1.55 will resume the downtrend that can reach $1.2. The traders should wait for the EOS/USD pair to signal a trend reversal before attempting a trade in it.

BCH/USD

After trading in a tight range for five days, Bitcoin Cash resumed its downtrend and made a new low on Dec. 18.

BCH/USD

Both moving averages are trending down and the RSI is deep in the oversold territory, confirming a downtrend. There has not been a meaningful pullback since the downtrend gained momentum on Nov. 19. This suggests that the bears are in complete control. The BCH/USD pair can now correct to $72.39.

The traders should wait for the decline to end and a trend reversal to be signaled before establishing a long position in the pair.

LTC/USD

Litecoin has slipped back to the low of $23.1. Though the bulls are defending the support level, if they don’t manage to push the price above $29.349 within the next few days, a new low is likely. The next lower support is at $20.

LTC/USD

The downtrending moving averages and the RSI in the oversold zone show that the bears are in complete control. A small ray of hope for a bottom formation at the current levels is the positive divergence on the RSI. However, for that, the LTC/USD pair will have to sustain above the 20-day EMA. Until then, we suggest traders remain on the sidelines.

BSV/USD

After trading inside the range since Nov. 26, Bitcoin SV broke below the support of $80.352 on Dec. 13. Unless the bulls quickly reverse and scale the previous support-turned-resistance of $80.352, the sellers are likely to pounce on it. The next lower target is a retest of the Nov. 23 low of $38.528, with a likely minor support at $57.

BSV/USD

The first sign of strength will be when the BSV/USD pair climbs back into the range. Though the digital currency is currently trading way above its lows, it has a short trading history. Hence, we suggest traders wait for a new buy setup to form before buying it.

TRX/USD

TRON continues to trade inside the symmetrical triangle. The bulls are defending the support of the triangle, whereas the bears are not allowing a break out of it.

TRX/USD

The next leg of the move will be decided after a break out or break down from the triangle. A breakout can result in a rally to $0.0183, which is likely to act as a stiff resistance.

On the other hand, if the TRX/USD pair breaks down of the triangle, the downtrend will resume. Though the pattern target of the breakdown is $0.00554133, we expect some support at $0.00844479. The traders should wait for a breakout and close above the triangle to initiate any long positions.

ADA/USD

The failure of Cardano to climb back into the previous range is likely to attract selling. The bears will now attempt to break down of the support at $0.027237 and plunge towards the next support of $0.025954.

ADA/USD

On the other hand, if the ADA/USD pair bounces off the Dec. 7 low, it might remain range bound for a few more days. The first sign of buying will be when the price sustains above $0.035. We can expect the recovery to gain traction if the bulls scale the 20-day EMA and sustain it for three days. Until then, the path of least resistance is to the downside.

The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.

Op Ed: Bitcoin Is a Declaration of Our Monetary Independence

Nick Spanos is an early adopter and innovator in the blockchain space. He is best known for launching Bitcoin Center NYC, the world’s first live cryptocurrency exchange, in 2013, right next to the New York Stock Exchange — as immortalized in the Netflix documentary “Banking on Bitcoin.” As part of Bitcoin Magazine’s series of interviews and op eds leading up to the 10th Anniversary of Bitcoin, Nick shares his thoughts an early Bitcoin adopter.

Before Bitcoin, I worked tirelessly for liberty-minded political candidates for many years. These candidates, the most prominent of whom was Dr. Ron Paul, spoke out against the Federal Reserve Bank because of its role in inflating the money supply which devalued the life savings of hard-working people. In almost every case, the mass media would sharply (and often unfairly) attack the image of the candidate with half-truths and misinformation, decimating our poll numbers, until they were sure that we would be defeated on Election Day. No matter how hard we worked or how much money we raised, we were no match for what I call the political bosses of today, the mainstream media.

After two decades of struggle, I thought I had wasted my life fighting unwinnable battles. Then one day, I read the Bitcoin white paper. I read it half a dozen times and I thought, “Finally, I have a weapon that cannot be destroyed on Election Day.”

Bitcoin for me is not an instrument for financial investment. Bitcoin for me is a declaration of our monetary independence.

When I started the Bitcoin Center in 2013, I had a flourishing real estate business in downtown New York. I had an established career in developing technologies for political campaigns. Because of bitcoin’s reputation in the mainstream media back then, I knew that many of my relationships would be destroyed if I emerged as a public figure in the cryptocurrency space.

When I launched the center, a press release was sent out revealing me as the founder even though I never wanted that information to go public. Immediately, concerned friends and family started calling me, asking me what I was getting myself into and wondering if I had lost my mind. Bitcoin was for illicit activities on the internet, they told me. This is nothing but video game money, said others.

My life mission of personal freedom was more powerful than anything anyone could ever say to me.

I knew I had to bring Bitcoin out of the back alleys and onto Wall Street for the world to take it seriously. So, for many years, by day, we taught reporters, stockbrokers, students, technologists and tour groups about bitcoin, for free, and by night, bitcoin and other cryptocurrencies were traded on the world’s first live cryptocurrency trading floor (also for free).

Every day, we made our stand, not knowing which government agency might walk through the doors or what papers they might serve us, or even worse. Yet we stood there, like David with his slingshot up against the modern day Goliaths, in an open and notorious manner, unwavering and unafraid.

For years, we fought tooth and nail and spread the ethos of decentralization far and wide, with a team of lawyers at the ready. Licenses were created against us to thwart the rate at which we were growing. Agencies worked tirelessly to figure out how to turn people off from adopting bitcoin, and yet the little bitcoin thrived against all odds.

Then one day, we looked up and we realized something: Many big companies are attempting to bamboozle us. Microsoft, IBM, Goldman Sachs, JP Morgan, even Google and Facebook — overnight, all these goliaths of centralization are attempting to enter “blockchain.” 

They are touting what they call “blockchain,” but what they are actually peddling is another iteration of centralized control in, what is for many of them, a last ditch effort to stay relevant.

Many people in our community were excited by the invasion of these goliaths because they had thought it might lend us legitimacy. But that’s only because they had been brainwashed into thinking that our community was otherwise illegitimate. We, the open, permissionless blockchain believers, are the legitimate ones.

The reality is that the educational work we began at the Bitcoin Center is more important now than ever before as we continue to teach people the true meaning of decentralization. As many have said, and as I have said in forums in dozens of countries throughout the world, from Saudi Arabia to Sri Lanka: There can be no transparency, immutability or accountability without decentralization.

The internet grew by leaps and bounds because it was permissionless. A permissioned internet would probably have been nothing in comparison. The same is true for the blockchain. Despite these powerful institutions and regulators who are shoving their centralized agendas down our throats, I am confident in the resilience and fortitude of our ever growing community to withstand these attacks.

If we don’t all stand for something, we will fall for anything. We have made too many compromises and have retreated too many times without a fight. Goliaths hire many of us to tout their Trojan horse projects. Lobbyists working for the goliaths convince governments to regulate us into the ground while promoting their own unqualified, unseasoned friends. They change the tax code to tax us over and over with every little trade, even within our own portfolio, and we still do nothing. Are we to just give up? Are we to just lay down and let this happen to all of us?

Why do we fuel infighting within our own community? We are all in the same boat. Big torpedoes are aimed at us. Shots over the bow have turned into direct hits. If we don’t finish freeing ourselves with the open, permissionless, decentralized blockchain, they are going to imprison us with the closed, permissioned, centralized blockchain.

We have to look in the mirror every day and ask ourselves: What have we done to help Bitcoin? I don’t know about you but before I die in this cage, I want to run free in the wild, and Bitcoin is the key to our freedom after we fight for it.

This is a guest post Nick Spanos, an early adopter and innovator in the bitcoin and blockchain space. Views expressed are his own and do not necessarily reflect those of Bitcoin Magazine or BTC Inc.

This article originally appeared on Bitcoin Magazine.

Brazilian Premier League Soccer Club Launches Crypto ‘Fan Tokens’

Atletico Mineiro, a Brazilian premier league soccer club, is launching its own fan token “GaloCoin” based on Ethereum blockchain.

Brazilian premier league soccer club Atletico Mineiro has launched a fan token dubbed “GaloCoin,” Cointelegraph Brazil reports Friday, Dec. 14.

The GaloCoin is named after Atletico’s mascot, a rooster (“galo” in Portuguese). It is based on Footcoin — a platform that allows to launch utility tokens on the Ethereum blockchain. The GaloCoin is tied to the national fiat currency exchange rate and is equal to one Brazilian real.

Atletico’s token will allow fans to purchase game tickets, official apparel, as well as participate in discount programs. To use the club’s cryptocurrency token, one has to buy at least 50 GaloCoins (equivalent to approximately $13).

Utility tokens are steadily increasing in popularity among soccer teams. In September, one of the best-performing French clubs Paris Saint-Germain (PSG) partnered with the blockchain platform Socios.com to launch its own Fan Token Offering (FTO).

One of Italy’s most famous clubs, Juventus soon followed PSG’s example and announced “Juventus Official Fan Token,” also in partnership with Socios.com. The coin is set to launch in early 2019.

Moreover, seven United Kingdom premier league clubs — Tottenham Hotspur, Brighton & Hove Albion, Crystal Palace, Cardiff City, Leicester City Football Club, Newcastle United and Southampton — have partnered with local crypto trading platform eToro to integrate blockchain and cryptocurrencies in soccer stadiums.

As Cointelegraph reported in August, the Union of European Football Associations (UEFA) has implemented a blockchain-based ticketing system. The association has already conducted a successful trial during the 2018 UEFA Europa League final in Lyon this May, where 50 percent of the tickets were sold using a blockchain-based application.

U.K. Cryptocurrency Exchange Cubits Shuts Down After $33M Scam

Cubits, a London-based digital asset trading platform, has been forced into administration after fraudsters reportedly stole €29 million (about $32.5 million) from the exchange in February. The company claimed “it fell victim” to an elaborate scam orchestrated in collusion with three of its clients. 

Also read: Former Mt. Gox CEO Could Face 10 Years in Jail Over Embezzlement

Exchange Enters Into Voluntary Administration

The administration means that investors cannot deposit or withdraw funds until further notice. It’s not clear how much worth of bitcoin the exchange was holding on behalf of customers at the time of closure.

Cubits has now appointed Steve Parker and Trevor Binyon of Opus Restructuring & Insolvency as joint administrators. In a statement, the company said it had failed to recover from the “criminal act,” which involved the accounts of three customers.

U.K. Cryptocurrency Exchange Cubits Shuts Down After $33M Scam

Cubits, the trading name of legal entity Dooga Ltd., said the “serious criminal act” had crippled business operations and “finally led to the difficult decision to place the company into administration.”

Three Chinese traders allegedly purchased BTC through the platform via Pay Secure Online (Paysec), a payment processor based in Malta. However, Paysec never remitted the funds to Dooga, in an alleged scam. Cubits has now filed a lawsuit in Malta to force Paysec to reimburse the €35 million ($39.2 million it supposedly owes the exchange. The reimbursement claim includes funds from the three Chinese accounts and others.

The company stated:

The criminal act happened in February 2018 and involved the accounts of three clients. Bitcoins with a market value at that time of approximately €29 million were properly delivered and subsequently withdrawn, with the customers apparently colluding with fraudsters. Dooga has never received the equivalent in fiat from the payment processor responsible for carrying out the transaction.

Dooga stated that it had informed the responsible authorities in the U.K., Malta, China and Germany of the scam. It has also filed several criminal complaints, but nothing has materialized, forcing the exchange to file for administration.

Fruitless Efforts

With administration – the U.K. equivalent of bankruptcy – the administrator will seek to restructure the company in financial distress, especially its debt. During this period, investors or creditors cannot make legal claims against the entity, giving it opportunity to recover.

Cubits said it had made “every possible effort to recover” the funds without success. The only other option was to file for bankruptcy.

U.K. Cryptocurrency Exchange Cubits Shuts Down After $33M Scam

“This decision secures the current position whilst the administrators seek offers for the business and its assets,” said the exchange. “The role of the administrators will be to work with those who are owed money by the company and to collect monies that are owed. The key objective is to achieve the best possible outcome for creditors and recover as much as possible of the funds owed to the company.”

Parker, who will also be working together with Allister Manson, technology partner at Opus Restructuring & Insolvency, and Nicholas Parton, head of forensic accounting at Opus, said his duties as administrator involve collaborating with those who are owed money by Cubits and to collect money owed to the company. “Dooga’s current position is secure, investigations are proceeding and we will be writing to creditors, formally, this week,” he said.

Cheated?

U.K. Cryptocurrency Exchange Cubits Shuts Down After $33M Scam

Users reacted angrily when the Cubits platform suddenly went offline on Monday. The exchange said on Twitter that the blackout was due to “maintenance.”  Later, the website began producing a general error message before subsequently announcing that the company was being placed under administration.

User Jamil Khadem complained on Twitter: “Have we been robbed by Cubits? I’ve been waiting for a withdrawal since the 6th of December and the company won’t give me a straight answer.”

Founded in 2014, Cubits has allowed customers to buy and sell cryptocurrency like bitcoin. It also claimed to act as a bridge between virtual currency and more traditional forms of payment, specifically to the online gaming industry.

What do you think about the developments at Cubits? Let us know in the comments section below.


Images courtesy of Shutterstock.


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Markets Update: Bears Continue to Drag Cryptocurrency Prices Down

Digital asset prices have been dipping in value again after a few days of price consolidation. At the moment, the entire cryptocurrency economy is awfully close to dropping under the psychological $100 billion market valuation. Furthermore, since our last markets update cryptocurrency global trade volumes are weaker than usual, with only $11.5 billion worth of assets traded over the last 24 hours.

Also read: Password Manager App Dashlane Mocks Cryptocurrency Owners

More Price Dips and Lower Trade Volumes

Crypto-market prices are sliding again as the top 10 digital assets have seen 24-hour losses between 2-13%. At the time of publication, the entire market capitalization of all the coins in existence is $104.2 billion today. Currently, bitcoin core (BTC) prices are down 3.8%, on Friday, and 2.8% over the course of the last week. This gives BTC a global average price of about $3,302 and the value is lower on certain exchanges. Moreover, bitcoin core has a market valuation of about $57.5 billion which is 55% dominance over the entire digital asset economy.

Markets Update: Bears Continue to Drag Cryptocurrency Prices Down
Top 10 cryptocurrencies on Dec. 14, 2018.

BTC is followed by ripple (XRP) as the market captures $12 billion and each XRP is being swapped for $0.29 per coin. Ethereum (ETH) holds the third position but markets are down 4.6% and ETH is being traded for $86 per token. Stellar (XLM) takes the fourth position today as each coin is trading for $0.10 a piece. However, XLM markets have lost over 7.5% during the last 24 hours of trading. Lastly, the current ruler of the fifth position is the stablecoin tether (USDT) which is trading for a U.S. dollar and once in a while a few pennies above 1 USD.

Bitcoin Cash (BCH) Market Action

Bitcoin cash (BCH) is the seventh largest market valuation just before the weekend and the entire BCH capitalization is only $1.4 billion. BCH prices during Friday’s trading sessions are down 13% over the last 24 hours and over 18% for the week. This action has given BCH a value of about $82 per coin with roughly $98 million in global trade volume. Bitcoin cash trade volume has increased since our last market update which is a positive sign.

Markets Update: Bears Continue to Drag Cryptocurrency Prices Down
BCH/USD daily chart.

The top five exchanges swapping the most BCH include Lbank, Binance, Kraken, Huobi, and Coinbase. During our last four market updates, ETH had dominated BCH trading pairs over the last few weeks. On Friday, BTC captures the most trades against BCH with 28.5% of global trades. This is followed by ETH (26.5%), USDT (22%), EUR (9%), and USD (6.4%).

BCH/USD Technical Indicators

Looking at the BCH/USD 4-hour chart on Bitstamp indicates that bears have the reigns again today. The long-term 200 Simple Moving Average (SMA) is still well above the short-term 100 SMA trend line. This shows that the path towards the least resistance is still very much the downside.

Markets Update: Bears Continue to Drag Cryptocurrency Prices Down
BCH/USD 4-hour Bitstamp.

The Relative Strength Index (RSI ~21.96) is also indicating extremely bearish conditions as the RSI is still showing an oversold market. Stochastic and MACd readings show a similar downside trajectory as there will need to be some surprise bull action to make things less dreary. Order books on the upside show bulls have some resistance from now until $100 and some smoother seas from there. On the backside, support is pretty decent from the current vantage point up to $75 where buy orders start to get slimmer.

Markets Update: Bears Continue to Drag Cryptocurrency Prices Down
Bitstamp BCH/USD trading view 4-hour chart on Dec. 14, 2018.

The Verdict: Uncertainty Remains Strong With Crypto-Markets Below Their 200-Day Averages

This December is showing that cryptocurrency values are not as bright as some people predicted throughout the course of 2018. Being so close to the end of the year, Fundstrat’s Tom Lee has stated that he’s getting “tired” of cryptocurrency price predictions. Lee stated multiple times this year that BTC prices could hit a target of $15,000-25,000 by the year’s end. According to Lee’s note to clients this week, the Fundstrat Global Advisor says BTC’s fair model price should be between $13,800 and $14,800.

“Given we are so close to year-end, we are not providing any updates to near-term price objectives — read this as, we are tired of people asking us about target prices,” explained Lee on Friday.

Lee conceded by adding:

Given the steep discounts of [bitcoin] to our fair value models, the excessive bearish sentiment about fundamentals does not seem warranted.

Lee’s fair market value is still more than $10,000 higher than today’s BTC spot prices. Further, with the price so low BTC/USD, and ETH/USD short positions are still at all-time highs this week. This means more so than ever individuals and organizations believe prices are going to drop again. A large portion of the top digital assets continue to slowly drop into a narrowing price range with no signs of any significant price bounces ahead. As long as BCH, ETH, BTC, and many other coins ride below their 200-day moving averages and show extremely oversold RSI levels, traders will remain skeptical.

Where do you see the price of BCH, BTC and other coins heading from here? Let us know in the comments below.

Disclaimer: Price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”


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