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FinCEN Files Remind Us That Bitcoin Is Still Not For Money Laundering

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FinCEN Files Remind Us That Bitcoin Is Still Not For Money Laundering

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This week, a released cache of thousands of reports from major banks showed that these institutions ignored their own concerns and willingly moved trillions of dollars around the world on behalf of suspected terrorists, criminals and corrupt governments.

Known as the “FinCEN Files” because the banks’ reports were filed with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), this cache was brought to light by a group of international journalists. There were more than 2,100 suspicious activity reports released this way, which referred to more than $ 2 trillion of transactions occurring from 1999 to 2017, according to The New York Times. 

Lenders that filed such reports and then willfully ignored their own concerns include JPMorgan Chase, Bank of America, HSBC and Deutsche Bank. These groups moved funds for the likes of a Taliban-tied company, groups connected to the North Korean regime and the organizer of a sovereign wealth fund fraud in Malaysia.

There’s definitely a Rabbit Hole to be explored about FinCEN and its laborious journey to regulate cryptocurrency activity. But I think the real entry point from this revelation about the world’s foremost financial institutions is through the misappropriated reputation that Bitcoin has for money laundering. 

A great place to start on the connections between BTC and money laundering is with this Bitcoin Magazine article from 2013. Bitcoin has long held a reputation for facilitating dubious transactions — thanks to its pseudonymity and privacy protections, BTC was the currency of choice for the world’s most prolific darknet market, Silk Road. Silk Road was such a prominent fixture in the Bitcoin economy that Vitalik Buterin covered the project in a two part report for Bitcoin Magazine back in 2012.

But the truth is that while Bitcoin is a pretty solid tool for obscuring financial transactions (as Aaron van Wirdum covered in this exploration of Bitcoin privacy technology from 2018), it’s far less capable of protecting privacy than some other cryptocurrencies out there. And, as the FinCEN Files have underscored, the world’s premier financial institutions are regularly laundering money as well.

So, even though darknet market activity will probably always remain connected to Bitcoin (as we explained last year), this week’s bombshell report is another reminder that Bitcoin’s use as a tool for criminals is just another myth that might apply better to the world’s legacy systems.

The post FinCEN Files Remind Us That Bitcoin Is Still Not For Money Laundering appeared first on Bitcoin Magazine.

Bitcoin Magazine

Ethereum (ETH) Looking Ready to Rally as Weekly Transfer Value Exceeds Bitcoin (BTC)

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Ethereum (ETH) Looking Ready to Rally as Weekly Transfer Value Exceeds Bitcoin (BTC)

After a catastrophic weekend that saw Ethereum lose 25% of its value, the second-largest cryptocurrency has bounced back and now looks poised for more growth.

Ethereum continues to see increased weekly usage off the back of the ever-growing decentralized finance (Defi) market. In its most recent success, Ethereum has overtaken Bitcoin for average weekly transfer value, although users are now struggling with the excessively high gas fees.

A report yesterday from blockchain network analysis firm CoinMetrics reveals how Ethereum’s 7-day average transfer value recently exceeded that of Bitcoin, reaching a high of $ 3.08 billion compared to Bitcoin’s $ 3.01 billion. The majority of that growth comes from investors engaging in ‘yield farming’ via Defi protocols like yEarn (YFI) and Aave (LEND).

It’s not the first time this has happened and is reminiscent of the ICO boom of early 2018 that also drove up Ethereum’s weekly usage. Just like back then, a surge of interest in tokens built on Ethereum’s ERC-20 protocol is driving this new rally. The only difference is that now it’s Defi tokens rather than ICO’s that are swarming the Ethereum blockchain – but the eventual outcome is the same.

The return of exit scams

A further similarity is a fresh prevalence of fake projects and exit scams perpetrated by those in the Defi space. Most recently, those behind the Defi liquidity mining pool Yfdexf.Finance allegedly disappeared with over $ 20 million of investor funds. The platform shilled its project for only two days on Twitter and Telegram to amass that huge amount, revealing how easy it is to get unsuspecting victims to invest in projects that have absolutely no verifiable legitimacy.

All social media accounts, websites, and blogs related to the project have since been deleted, with none of its advertised promotions or giveaways honored. For those around during the ICO boom of 2018, the event will come as no surprise. Just like back then, there seems to now be a new influx of trusting investors willing to throw their money into whatever project has the word ‘Defi’ slapped on it.

An unfortunate side-effect of these actions will be the inevitable denigration of the Defi space, a fate that legitimate ICO projects still struggle to recover from years later. On paper, decentralized finance is an excellent concept that one day will hopefully come to fruition but in its current state, no risk-averse investors will trust it.

Ethereum analysis and sentiment

Looking at Bitfinex we see a huge percentage of long leveraged positions for ETH so clearly general sentiment is positive for further upside. Up now above 90% in longs, Ethereum risks moving into overbought territory and facing a squeeze that could see it tumble.

However, with a strong move above $ 350 and a recent test of the 4-hour SMA50 at $ 373, ETH looks in a good position to keep moving up. If it can break above resistance at the SMA50, it should have $ 400 in its sights. However, it’s still a long way to go to regain the recent highs of $ 480 in early September.

The post Ethereum (ETH) Looking Ready to Rally as Weekly Transfer Value Exceeds Bitcoin (BTC) appeared first on Cryptocoin Spy.

Cryptocoin Spy