CFTC Charges US Resident with $7M Bitcoin Fraud

The United States Commodity Futures Trading Commission charges a United States resident with a $7 million Bitcoin-related fraud.

The United States Commodity Futures Trading Commission (CFTC) charged a United States resident with a $7 million Bitcoin (BTC)-related fraud.

In an official news release published on Sept. 30, the regulator revealed that Jon Barry Thompson of Easton, Pennsylvania, is charged with “knowingly or recklessly making false representations to customers in connection with the purported purchase of Bitcoins worth over $7 million.”

“Knowingly or recklessly”

The official document alleges that — contrary to his claims — neither Thompson nor a company with which he was affiliated had possession or control over the Bitcoins that he pledged to deliver to two clients.

The agency claims that after receiving the clients’ funds, Thompson sent virtually all of the money to some third parties. The purported BTC was not delivered to the clients while their funds were not safeguarded as promised.

Thompson is further accused of having lied to the customers about the location of the Bitcoins, the reasons the transaction was not completed, and the status of their funds.

The case was brought before the court in connection with the CFTC’s Division of Enforcement Virtual Currencies Task Force. 

The agency seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against all further violations of the Commodity Exchange Act and the CFTC’s regulations.

Rooting out fraudsters is “essential” to further the development of cryptos

CFTC Director of Enforcement James McDonald issued a statement pertaining to the case, noting that:

“Rooting out misconduct involving crypto assets is essential to furthering the responsible development of this nascent space. The CFTC will continue to work to hold fraudsters accountable, and where appropriate, operate in parallel with our criminal law enforcement colleagues.”

As Cointelegraph reported, a recent controversy involving the CFTC was sparked by LedgerX’s claim that the agency’s former chairman, Christopher Giancarlo, obstructed the approval of its amended Derivatives Clearing Organization registration because of personal bias against LedgerX CEO Paul Chou.

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UK Police Auction Off $294,000 in Stolen Crypto From EtherDelta Hack

More than $294,000-worth of cryptocurrency confiscated from the teenage hacker of EtherDelta and TalkTalk has been auctioned off.

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Stellar Wants to Remove Inflation Since It’s No Longer ‘Serves Its Purpose’

A network vote at the end of October will decide whether users are in favor of dropping the inflation tool that was a part of Stellar’s original design.

Cryptocurrency protocol Stellar (XLM) announced that it intends to remove its inflation feature in an upcoming upgrade.

According to the Stellar Development Foundation’s (SDF) blog post published on Sept. 30, developers are keen to discard the inflation tool, which they say now offers little functionality to network participants. 

Users to vote on inflation removal

Per the blog post, the protocol’s new incarnation, version 12, should no longer include it, with a vote aiming to achieve consensus. The post reads:

“After listening to what everyone had to say and weighing the pros and cons, here’s what the SDF is asking validators to consider: we think it’s a good idea to disable the current inflation mechanism. We’ve implemented a change in version 12 of Stellar core that would do just that, and we encourage validators to vote to accept it.”

Network validators will have until Oct. 28 to install the new version 12, at which point developers will analyze the results.

Inflation funds fail to reach their intended goal

Stellar originally included the inflation tool in order for projects to gain extra funds from community payouts. Since 2014, however, the situation changed and the original plan saw no real-world success. The SDF adds:

“Five years and several million accounts later, it’s clear that inflation doesn’t serve this purpose. Rather than sending inflation to projects building on Stellar, the majority of users join pools in order to claim that inflation for themselves — if they set their inflation destination at all.”

Should the proposal to remove inflation fail, version 13 of the Stellar protocol — being itself a subject of a community-wide vote — will reinclude it.

XLM’s price appeared ambivalent to the concept at press time, gaining modestly as part of a wider cryptocurrency resurgence on Tuesday.

As Cointelegraph reported on Sept. 9, Stellar confirmed a $120 million airdrop in conjunction with encrypted messenger Keybase.

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This Crypto-Savvy Bank Is Building Bandwidth for Bitcoin Retail Payments

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$10M Mining Farm Fire Takes Blame as Bitcoin Hash Rate Wobbles

A blaze reportedly wiped out huge numbers of rigs owned by mining giant Innosilicon, but the company remains quiet.

The Bitcoin (BTC) network experienced fresh turbulence on Sept. 30 while evidence emerged of a fire destroying $10 million worth of mining rigs.

A video of alleged Bitcoin miner fire emerges

According to Marshall Long, one of the first active Bitcoin miners, mining company Innosilicon’s giant data center began burning on Monday. Details remain sparse, but a video appeared showing the machines reportedly continuing to run despite being on fire. 

Dovey Wan, a founding partner at crypto asset holding company Primitive Ventures, added that the total worth of equipment involved circled around $10 million.

At press time, Innosilicon had not made any public comments, either officially or on social media. 

Hash rate struggles after highs

Commentators on social media were swift to air concerns that the blaze was to blame for a reported drop in Bitcoin’s hash rate. 

On the day it occurred, estimates of network computing power involved in processing transactions dropped from 86 quintillion hashes per second (h/s) to 82 quintillion h/s.

As noted previously, however, hash rate estimates provide only a limited view of Bitcoin’s overall health. Last week, what appeared to be a 40% hash rate plunge, later was widely ignored by technical graphs.

As Cointelegraph reported previously, the rainy season in China’s northwestern Sichuan province has spelled disaster for at least one more Bitcoin mining farm on Aug. 20.

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Revolut Partners with Visa to Expand Into North, South America and Asia

United Kingdom-based digital banking app Revolut announces a major partnership with Visa to expand its services globally across 24 new markets, including North America.

United Kingdom-based digital banking app Revolut announced a major partnership with Visa to expand its services globally across 24 new markets, including North America.

According to a Sept. 30 press release, this will bring 56 markets worldwide in total into Revolut’s reach.

North, Latin American and Asian markets

Per the release, the terms of the agreement stipulate that Revolut will primarily issue Visa-branded cards as it pursues its global expansion push.

Visa will enable the app to launch services initially in Australia, Brazil, Canada, Japan, New Zealand, Russia, Singapore and the United States.

This first group of jurisdictions will be followed by Argentina, Chile, Colombia, Hong Kong, India, Indonesia, Korea, Malaysia, Mexico, Philippines, Saudi Arabia, South Africa, Taiwan, Thailand, Ukraine and Vietnam.

The strengthened partnership between the two firms builds on their existing cooperation, which saw Revolut first issue Visa cards to its users across Europe in July 2017, says press release.

Revolut to hire 3,500 new staff members

In an interview with Reuters on Sept. 30, Revolut CEO and founder Nikolay Storonsky revealed that the firm will hire some 3,500 new staff members following the new deal, bringing its total workforce to around 5,000.

The Reuters report further indicates that the app’s launch in the U.S. and Singapore is expected by the end of this year, with Canada and Japan to follow. The timeline for expansion to Latin American and Asian markets has not been indicated and all launches remain subject to regulatory approval. 

Storonsky told Reuters that the average Revolut client holds around 1,000 euros ($1,090) in their account. With the app’s 8 million user base, this translates into a total deposit balance of roughly 8 billion euros ($8.74 billion).

Earlier this year, Storonksy was prompted to publicly refute allegations of money laundering breach and negligence by the company. A period of negative publicity was followed by reports from U.K. broadsheets alleging Revolut executives deliberately decommissioned Anti-Money Laundering software in 2017. 

The reports further claimed that the firm attracted the attention of the U.K.’s financial watchdog, the Financial Conduct Authority (FCA).

In late 2017, Revolut rolled out support for Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). 

In June, Visa was named as one of the firms to have backed Facebook’s Libra stablecoin project via its membership in a newly-created independent governance consortium — the Libra Association. 

Visa CEO Alfred F. Kelly Jr. subsequently emphasized that the 20-odd companies involved with Libra had reportedly only declared their interest via a nonbinding letter of intent.

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Trading Volume for Bakkt’s Bitcoin Futures Hit Just $5 Million in First Week

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