Today on Bitcoin This Week we have a weekly recap of Bitcoin news. We discuss Upbit and the investigation into their alleged fraud, the stand Bank of America has taken against Bitcoin and more.
Upbit Under Investigation By Police
Chosum, a local news outlet has reported that Upbit, one of South Korea’s largest exchanges, and fourth by trading volume globally (making it one of the largest exchanges in the world), is being investigated by police for alleged fraud. According to the report, Upbit has allegedly faked its balance and deceived investors, which has prompted both police and the FSC to open investigations.
The South Korea Financial Supervisory Commision (FSC) has sent investigators to look into the company’s data, to audit the exchange’s virtual currency holdings. The news had a negative impact in the overall market, causing a general loss with up to 15% on some coins. The investigation is part of the FSC and the Korean Financial Intelligence Unit (KoFIU) move to protect their anti-money laundering laws throughout all cryptocurrency exchanges in the region.
Bank Of America Bans Credit Card Purchase Of Bitcoins
Bank Of America (BoA) CTO, Kathy Bessant, has taken a stand against Bitcoins, calling cryptocurrencies “troubling”. According to CNBC, Bessant commented that cryptocurrencies were not designed to be transparent, stating that the traditional banking system provides users with just such a facility between the sender and the receiver.
Bank of America already banned Bitcoin purchases using credit cards in February. The financial institution continues to take a strong position against cryptocurrencies, with Bessant comparing them to stocks and other currencies, stating that as purchases of these commodities using credit cards were not permitted, there was no reason to allow the purchase of Bitcoins this way either. Just weeks after the bank released a report establishing their inability to adapt their products and services to the competition cryptocurrency poses, this seems like an attempt by Bank of America not to give their support to the crypto market, as it could represent a real threat to their current financial system.
Online Bank Uses Bitcoins For Loans
The founder of Bitbond, Radoslav Albrecht, recently created an online bank that allows users to transfer loans anywhere in the world using Bitcoins. Bitbond is one of the first banks to give up the old mechanisms of SWIFT, to allow a lower rate and faster transactional timeframe. According to Albrecht, international wire transfers are very expensive, especially if you have to change from one currency to another, and sometimes take days to complete.
Bitbond proposes to fix this by allowing payments to work independently from location, making them faster and cheaper. Users would have loans in cryptocurrencies such as Bitcoins for a few seconds until they receive funds in their preferred currency, avoiding the volatility of the crypto market. At the moment, loans are relatively small, with a cap of about $50,000. Bitbond has already obtained its license as an official bank and has found some investors already, which could mean that other banks in the region may start using the same strategy. Europe’s financial system seems quite open to the development of their infrastructure using the technology that blockchain can offer.
Cambridge Study Proposes To Legalize Bitcoin
A group from the computer labs at Cambridge University has published the results of a study which they carried out, aiming to create an effective method to separate Bitcoins used in crimes from those which were not. Taintchain is a project that seeks to use the public information from blockchain to track the genealogy of Bitcoins. Following on, the project proposes a soft fork, so that miners and consumers can use those that were not involved in any cyber crime.
The system would allow some sort of filtering mechanism for cryptocurrencies in all regulated exchanges, making it easier for victims to recover their money in case of fraud. According to the authors of the project, this mechanism could be a lot more effective than that which investigators are currently using to determine if Bitcoins are part of a criminal enterprise. The project does however warn, that in order to function, both governments and exchanges would have to put aside their differences to implement the system.
Bitcoin Prices Go Down
Bitcoin (BTC) has had a somewhat bad week. After holding above the $9,000 mark for almost 3 weeks, Bitcoin has lost some support and has dropped its price by almost 10%. It started the week at $9,300 only to drop slightly on Tuesday to the $9,100 mark where it held until Thursday, when prices started to fall. By Friday, Bitcoin was below the $9,000 mark, reaching its lowest point of $8,266 before closing the week on Sunday at $8,700. Prices may have been affected by the Upbit Investigation and the current major sale by Mt.Gox, who are continuously dropping Bitcoins into the market to repay their users after the hacking episode.