Cryptocurrency News

Australian Regulators freeze assets of BitConnect Promoter

Australian promoter, John Bigatton, has had his assets frozen and hit with a travel ban outside Australia. Bigatton is accused of floating a crypto-Pyramid scheme that saw investors lose $US2.6 billion ($3.7 billion).

The directive was issued by the Federal Court in conjunction with international authorities after an investigation into his business affairs. The investigation was requested by Australia’s equivalent of the U.S’s equivalent of the Securities and Exchanges (SEC) – Australian Securities and Investments Commission (ASIC).

Bitconnect’s Collapse

Mr. Bigatton has acted for several firms as a financial investments advisor and a wealth management trustee. Most of the companies he is affiliated with are located in Sydney and Melbourne. His involvement in these firms has had him linked to the collapse of Bitconnect which saw US investors make huge losses on their investments.

Bitconnect’s collapse called attention to the massive risks that threaten the cryptocurrency industry. Due to its largely unregulated nature, security on investments tends to be low hence susceptible to theft. This has seen a series of class action suits instituted against Bitconnect.

The now defunct firm has been accused of pump and dump schemes in which investors were promised returns of up to 40 per cent by promoters and that people could “turn a $US1000 investment into a $US50 million return within three years”, according to a class action filed in Florida.

Mrs. Bigatton’s disappearance

In addition to the charges levelled against Mr. Bigatton, ASIC records indicate that a company registered under his wife was also involved in underhand deals. The court also froze assets linked to JB Investment Management. The firm is registered solely to Mrs. Bigatton as the sole shareholder and director. She has since been on the run. Mrs. Bigatton is alleged to have fled and sent the funds linked to the investigations in an offshore account.

Mrs. Bigatton went missing in March sparking fears she had met with foul play or had taken her own life. She has since been considered a missing person and a homicide suit instituted. This has helped her escape from being named as a defendant in her Husband’s case and no suggestion has been made to the effect that Mr. Bigatton was involved in his wife’s disappearance.

The investigations against Bitconnect keep opening new cases against suspected scammers. CRYPTO IS COMING!

The Raven’s Dispatch – August 16, 2018 – Why Peter Schiff is Wrong About Bitcoin

Why the beef, Peter?

Peter Schiff is pretty OG. He’s involved in everything from stocks, commentator, CEO, and radio personality. The dude even ran for US Senate. He’s ambitious. He’s also an outspoken critic of Bitcoin. With such a large pulpit, what he says carries weight.

An apearnace on Joe Roggans podcast showed fundamental misunderstandings of Bitcoin and cryptocurrency. From claiming Bitcoin is a tlip bubble, that Bitcoin has no inherrent value, lack of adoption by retailers, and the list goes on. And we are here to set the record straight. Read the full rebuttal on Why Peter Schiff is Wrong About Bitcoin here.

There been lots of chatter about how much marketcap we’re losing during this recent sell off, but let’s not forget the crypto marketcap year over year we are still up 58% ($135m Aug 2017, $214m Aug 2018).  So yes we are struggling with price now, but the market continues to grow and bring in new investors. The overall cryptocurrency market played nice the past week moving from $224bln to $209bln representing a 6% decline, but it was ETH that stole the show with an incredible sell off.

Livecoinwatch.comBitcoin (BTC): The past three weeks have been brutal. There’s no other way to spin it. Week to week price action was very volatile topping off at $6,600 and reaching lows of $5,985. Bitcoins has settled at $6,340 representing a slight gain of 2% the past week.

Ethereum (ETH): What.A.Beating. I don’t think anyone expected to see this sell off. Let’s take a look at the month to give us some perspective. In July ETH reached highs of $500 while also experiencing an $11m spike in volume. Check back today and we are sitting at $290 representing a crushing 42% decline in the past 30 days. Are ICOs to blame?

Monero (XMR): Monero is the top dawg amongst the privacy coins. Monero is a private, anonymous, fungible coin with a number of appealing advantages over pseudonymous coins like Bitcoin. It’s not possible to trace a person’s spending of Monero with their public key. In fact, Monero uses a completely different system with multiple keys and signatures to ensure this.

Monero has many other features such as stealth addresses, ring signatures (to protect senders), is ASIC resistant, and dynamically scalable. Of the privacy coins, and cryptocurrency in general, Monero is one to keep a close eye on.

If you want to know more check out our guide What is Monero.

WHAT’S NEW AT CRYPTO IS COMING

Why Peter Schiff is Wrong About Bitcoin – Euro Pacific Capital CEO Peter Schiff is a businessman, former US Sentate canditate, an outspoken critic of Bitcoin – and he’s completely wrong.

How Market Volatility, Illiquidity Can Be Quite Profitable for Bitcoin Traders – We examine some identifiable factors for the profitability of Bitcoin trading. Join us and learn.

Bank of China To Increase Investment in Blockchain Technology – At a press conference on August 9, the Bank of China announced it would increase its investment in innovation, research, and development. Holding 11 blockchain patents, the bank ranks first in the domestic banking industry.

Estimating Bitcoin Annual Carbon Footprint – With fresh new research available we take another look at whether the massive cost of the Bitcoin network to the environment justified the project itself.

Northern Bitcoin Enters New Phase of Growth – As a pioneer in the world of cryptocurrency, Northern Bitcoin, based out of Frankfurt, Germany, specializes in the eco-friendly Bitcoin mining.

Financial Conduct Authority Issues warning on “clone” companies in the UK – The United Kingdom financial regulator FCA has issued a warning to investors about clone firms of that operate under the guise they are registered by the FCA.

Indian Government may Launch Crypto Tokens for Financial Transactions in the Country – The government in Indian may launch crypto tokens for financial transactions in the country. This is happening at a time when cryptocurrencies had been ban in the country sometime back.

Ukraine Plans on Recognizing Cryptocurrencies as Financial Instruments – A government official stated crypto assets are not currencies, but more similar to stocks or bonds. This decision comes after an initial announcement regarding regulation of crypto trading.

CRYPTOCURRENCY NEWS FROM AROUND THE INTERNET

– CoinShares, a digital asset management firm domiciled in the Channel Island of Jersey, has announced a bitcoin exchange-traded note (ETN) product that Americans can now get their hands on more easily

The SEC Will Decide on 9 Bitcoin ETFs in the Next 2 Months – The U.S. Securities and Exchange Commission (SEC) is set to make final decisions on nine proposed bitcoin exchange-traded funds (ETFs) in the next two months.

South Korea Budgets $4.4 Billion For Blockchain And Other Technologies – The government of South Korea has announced the budget for 2019, of which $4.4 billion (5 trillion South Korean won) will be spent to develop innovative technologies.

China’s Communist Party published a guide to blockchain – The publisher of the Communist Party-affiliated newspaper, People’s Daily, has published a blockchain guide called Blockchain—a Guide for Officials

Bitmain Holds Nearly 6% of Bitcoin Cash Supply, Accused of Price Manipulation for IPO – Surfaced documents suggest that Bitmain has accumulated nearly $1 billion worth of Bitcoin Cash, raising eyebrows over the cryptocurrency’s role in a prospective $18 billion initial public offering (IPO).

Crypto firm Pantera Capital is looking to raise up to $175 million for a new venture fund – Pantera Capital, a San Francisco firm that has made its mark in recent years by investing early and often in a wide variety of digital assets, is looking to raise up to $175 million for its third venture fund

Dead Coin Walking: BitConnect Set to Be Delisted from Last Crypto Exchange – Seriosuly, what took so long?

Volumes Surge on Turkey’s Crypto Exchanges as Lira Tanks – Trading volume on Turkey’s cryptocurrency exchanges surged Friday as the country’s fiat currency plunged to record lows on economic jitters. And they say crypto has no inherent value.

Binance CEO teases demo of its new decentralized exchange desk – Binance has been working on a new decentralized version of its platform , and it appears CEO Changpeng Zhao is finally ready to share a glimpse into the upcoming project.

Could Cryptocurrencies Eradicate Corruption In The Beautiful Game? – Gibraltar United who play in the Gibraltar Football League’s Premier Division has announced that they will give their players the opportunity to be paid in cryptocurrency over the upcoming season.

ICOs Being Blamed For Ethereum (ETH) Sinking Price – The massive number of ICOs being built on the Ethereum blockchain was the primary catalyst for Ether’s price gain, now the very same usability is leading to price decline that is outpacing Bitcoin

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Ripple Hit With Another Lawsuit – Is It A Security?

Ripple Labs has been hit with , with the plaintiff claiming that it has operated as a security and therefore acted illegally. If the courts find in favour of the plaintiff, it could mean that they would face substantial fines and only those exchanges that are registered with the SEC would be able to offer XRP trading. Coinbase is attempting to secure SEC licensing, but has not yet managed it, so this could have a hugely detrimental effect on the cryptocurrency, hence why the company fervently argues its corner.

XRP As A Security

The current lawsuit alleges that the way in which Ripple Labs and the money service unit of Ripple, XRP II LLC, have run Ripple as a security. Specifically, the plaintiff claims that XRP is too closely managed and distributed by Ripple Labs, so does not quality as being decentralized. David Oconer has also said that the organisation has actively promoted the cryptocurrency in a bid to inflate prices, which is further evidence that it is being managed as a security.

The Accusation

In May 2017, Ripple said that they would be placing 55 billion XRP in an escrow account. Oconer claims that the company, including CEO Brad Garlinghouse, promoted this move because they believed it would inflate prices. Oconer said that limiting supply had the desired effect of increasing its prices. XRP rapidly increased in price from just over 20 cents a token to nearly $4.

Divisive Cryptocurrency

This isn’t the first case of this kind faced by Ripple. On two previous occasions the company has been accused of managing XRP as a security. The most recent lawsuit was only filed last month, and it seems likely that whatever the result of these cases, Ripple will continue to be dogged by claims that XRP is a security. Ripple certainly has its detractors, but there are those that believe it could bridge the gap between cryptocurrency and fiat currency, and while it might not become the single currency that Garlinghouse wants it to be, it could pave the way for others in the future.

Interested in other cool crypto posts….check out Mining Wars: Bitmain vs Dragonmint and The Price of Bitcoin vs Cost of Mining.

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How Market Manipulation Works

Whales and market manipulation

In November 2017, the meteoric rise of Bitcoin past $8,000 was a miracle. No-one had ever seen anything like it. The market shot so high that only a year later, as we return full circle and see Bitcoin trading at around $7,500, people are scared.

They were scared it would drop below $8,000, they’re scared now that it will drop below $6,000, and they’re terrified that it will plummet into the abyss altogether. People don’t understand the mysterious forces that contribute to the market value of Bitcoin, and it’s invariably attributed to FUD/Bullish news, or market manipulation.

Economics has often been described as a “social science” because of how closely tied to human emotions it is, and it seems likely that Bitcoin is impacted by international news stories and market manipulation as well. But what does that mean? What can we do about it?

Market Manipulation 101: Spoofing

Despite the complex nature of cryptocurrencies and the financial markets, the most common and effective form of market manipulation is actually remarkably easy. Are you ready to hear how it’s done?

All you need to manipulate the price of Bitcoin and other cryptocurrencies is a LOT of money.

The method below is called “spoofing”, and people have been reporting instances of this on the crypto exchanges since the early days. The less volume a market has, the easier it is to manipulate, so even highly traded currencies like Bitcoin can be manipulated with relative ease compared to blue-chip stocks on the stock market.

Wall Street and crypto trader Ronnie Moas is one of the people who has been calling out market manipulation for a long time in the crypto space, and he explains a typical instance of price spoofing below:

“If you have $2 bln, you want a diversified portfolio, and for me diversified is a $200,000 position, but there can be a position that is $200 mln, because you want 10 percent of your money in Bitcoin. But you don’t want to pay $20,000 for a Bitcoin, so what you do — and you can call it a Whale, a cartel, a shark, a consortium, a trading group — you dump $20, $30, $40 million dollars on the market, and create selling pressure. People see those orders on the books, and they jump in front of them, because they are afraid you are going to move and shake the market down, and this feeds off itself.”

Of course, this isn’t the only way to manipulate the market price, but it’s the most direct. Unlike other methods, there’s no need to communicate with the community – you simply accumulate large amounts of currency, place massive sell orders that can be seen on the order book, and wait for the market to “capitulate”, as in panic and behave exactly as you want them to. People will try and sell out before the massive order drives the price down, making it them who drive the price down. Meanwhile the big player cancels the sell order, places it a few more times until the price is low enough, and then begins to accumulate far more than they bought at a higher value.

In the relatively unregulated cryptocurrency market, it’s by far the easiest method – it’s also illegal. The US government has launched an investigation into crypto market manipulation and it is spoofing that they are specifically focusing on the most.

Layering

This is a similar act to spoofing, though with slightly different intentions. Traders committing layering place many orders at key price points throughout the order book with the hopes of reserving key positions in advance. What’s wrong with that?

Just like with spoofing, the traders have no intention of actually making all those trades – just one or two. While they’re not necessarily trying to tank or inflate the price by distorting the public perception of market demand, that’s exactly what they’re doing by placing (potentially massive) orders throughout the book that will never be fulfilled. This leads people to get a warped, falsified view of market demand and causes price manipulation just as much as spoofing does, and both layering and spoofing are illegal.

Pumping and Dumping

This method is a little more elaborate and difficult to pull off. Because of that it’s far more effective with low-volume altcoins than high-cap coins – not that it doesn’t happen with both.

Pump and dumps are orchestrated through shilling, fake news, and false promotions. The idea is simple: the orchestrators accumulate large amounts of a currency and contract celebrities and influencers to start talking up that currency on social media. They’ll pay unscrupulous media outlets to release fake press releases, often in the form of supposedly unbiased “news” articles that are essentially covert advertising.

The media storm will drive up the price – in a small altcoin community, this can be highly, highly effective as the community shares the fake news and bullish influencer tweets amongst themselves, start buying more tokens and driving up the price which escalates as everyone “gets on the moon rocket”, etc.

With the pumping phase complete, the next phase is the dump. This only works if it’s done at the same time – obviously there’s bound to be price slippage either way, but the manipulators can’t sell their bags off slowly without significantly altering the market to the price reversal. The only thing to do is to sell all at once, completely tanking the price and of course screwing over everyone who bought in high in the process, leaving them holding the bag.

The opposite of this is called a Bear Raid, in which manipulators spread FUD news stories to create market fear and drive the price down. “India banning cryptocurrencies”, etc. Sound familiar? Once the price has hit the floor, the whales accumulate at a lower price. Both pump and dumps and bear raids are considered to be a form of securities fraud in the traditional finance markets.

Here’s a tweet from our friend Ronnie Moas pointing out a classic pump and dump:

Is the Bitcoin market being manipulated?

Well… what do you think? Have you ever come across fake news or press releases? Do you remember major media outlets reporting on scary upcoming events that never came to pass, or promising bullish news that turned out to be untrue? Do you ever see large orders placed on the books only to be canceled when they get close to fulfillment?

The US investigation will probably reveal some details, but you don’t need to be a detective to know that the market has been manipulated from the beginning. The question is… how much?

Let us know your experiences below!

Interested in other cool crypto posts….check out Mining Wars: Bitmain vs Dragonmint and The Price of Bitcoin vs Cost of Mining.

Follow us on twitter @cryptoiscomin