This week in the world of Bitcoin: Bitcoin is slow to recover, Indian banks suspend crypto exchange accounts, Bali cracks down on Bitcoin business, The Pineapple Trust promises to match Bitcoin donations, Bitconnect crashes, and an uneasy calm returns to Korean exchanges.
An uneasy calm returns to Korean exchanges
Following the rumors of a potential ban on the trading of cryptocurrencies in South Korea, panic seized the market and the South Korean population. As we previously reported, a number of petitions accumulating a whopping total of over 100,000 signatures was submitted to the Blue House of Korea, the building where the head of state resides. The petition was not an unexpected move and it was an accurate measure of the outrage that South Korean citizens felt at the announcement. Minister for Finance, Park Sang-Ki, was responsible for the recent announcement which had a large number of South Koreans metaphorically calling for his head.
Crypto markets crashed as a result of this announcement, with many believing the ban to be well on its way. Subsequently, the Korean government backpedaled and dismissed the ban as being only a potential measure, easing the tempers of a few hundred thousand Korean crypto traders. As an additional indication of crypto acceptance within the country, banks relaxed their internal positions on limiting accounts tied to trading accounts. I’ve no doubt that this announcement caused absolute mania among the Koreans and I’m sure that an announcement like this will not be made again without careful consideration.
Bitconnect crash and fresh ICO
Bitconnect is back in the news today with their recent announcement of the closure of their lending and exchange platform. This was a necessary measure following the ‘regulatory pressure and bad press’. As news of Bitconnect’s demise broke and spread throughout mainstream media, the price of the Bitconnect token (BCC) dropped from near the $300 all the way down to about $10: it sits at $16 at the time of writing this article. The fall of Bitconnect is not surprising and its failure has been predicted by many who dubbed the organization as a Ponzi scheme. Bitconnect has never been open with its business practices or explained how it makes a sustainable income for its investors.
The company has an interesting business model that some may describe as exploitative, as it focuses its energy on virgin markets and tries to attract less-educated crypto newcomers, oftentimes residents of Asia, with a high-energy, life-changing sales pitch. Immediately following the downfall of Bitconnect, a new ICO, Bitconnect X, was launched, in an attempt to raise fresh funds with a business model that is almost identical to Bitconnect, minus the original investors and their money, which have now vanished.
Pineapple Trust promises to match donations
In early December we reported on The Pineapple Trust, a charitable organization that has tasked itself with the donation of millions of dollars worth of Bitcoin. The amount of Bitcoin donated so far amounts to thousands and must be recognized as an admirable act on the organization’s behalf. They’ve gone one step further now and have agreed to match any legitimate donations to chosen charities. Their recent ventures in charity involve MAPS, The Multidisciplinary Association for Psychedelic Studies, who have been engaged in studies which experiment with the use of MDMA to combat clinical depression.
The Pineapple Trust first made themselves known on reddit, under the username @PineappleFund, where they announced their intention to donate $86 million worth of Bitcoin to charitable causes which they deemed worthy. Understandably, MAPS thought applying for a donation was a worthwhile exercise, and shortly after their application they were approved. They received a grand total of 59.8 Bitcoins which, at the time, was equal to $1 million, and now feature on The Pineapple Fund’s website as a supported charity. We look forward to seeing their work in the field of mental health in the years to come.
Indian banks suspend exchange accounts
Local sources throughout India have reported the polarizing announcement that several of the major India banks have suspended bank accounts of major Bitcoin exchanges, citing suspicious transactions and trading activity. Banks included in this anti-crypto movement are The State Bank of India, Axis Bank, ICICI Bank and Yes Bank. On top of this announcement, a number of banks are seeking endorsement from the promoters of crypto exchanges on their borrowings, and are limiting cash withdrawals for the accounts that are still functional. The ban has been targeted towards top crypto exchanges such as UnoCoin, ZebPay, BtcxIndia, and CoinSecure.
This announcement comes on the back of a statement from the Indian Minister of Finance, who last year issued a warning to the Indian public not to use Bitcoin. They even went so far as to describe Bitcoin as a Ponzi scheme. Indian exchanges are also being threatened with the implementation of taxes at the source of transaction, which leaves the exchanges themselves responsible to pay up.
Bitcoin slow to recover
Bitcoin, not alone in its major market crash on the 17th January, has been quite slow to recover, leaving investors uneasy. January 17th marked the date that Bitcoin touched $10,000; a figure that it has not been close to in quite some time. It currently sits at around the $12,000 mark where it has been holding for the past few days. Despite the small recovery, many are cautious that this may lead to another correction which in turn would see more significant price drops. The bears in the market dominate while Bitcoin licks its wounds.
