Bitcoin This Week: Bitfinex CSO Quits, US Senate Investigates Crypto Influence And More


Bitfinex CSO Departs

Phil Potter, Chief Strategy Officer with Bitfinex, which is the fourth largest crypto-exchange in terms of volume, has announced his departure from the company. He told Reuters that he was leaving Bitfinex, because it was moving away from the United States and, being US based, he felt it was time to rethink his position. He will be replaced in the short-term by JL Van De Velde.

Bitfinex has been under scrutiny for some time because of its close links with Tether, the digital US Dollar crypto. The exchange’ part manages Tether, and has denied allegations that the coin was used to manipulate the price of Bitcoin late last year. Bitfinex has always maintained that it keeps $1 in reserve for every Tether USDT issued, releasing a report authored by former FBI Director Louis J. Freeh substantiating the claims, earlier this month. The report, however, was not a full audit. In December, both Bitfinex and Tether were subpoenaed by the U.S. Commodity and Futures Trading Commission as part of its ongoing investigation into suspected Bitcoin price manipulation.

US Senate to Investigate Foreign Interference in Elections Through “Virtual Currencies”

Lindsey Graham, the US Senator for South Carolina, will preside over a Senate meeting to discuss the role cryptocurrency played in recent American elections. The meeting, which is scheduled for the 26th of June is titled, “Protecting Our Elections: Examining Shell Companies and Virtual Currencies as Avenues for Foreign Interference.”

While there are no details as yet of the agenda or attendees of the meeting, it is expected that cryptocurrency donations to U.S. election hopefuls will be in the spotlight. It’s not against the law for candidates in American elections to accept Bitcoin or other virtual currencies as donations, but the Federal Election Committee has strict rules governing their size. Alleged Russian interference in the election of Donald Trump is currently under investigation by Special Counsel Robert Mueller.

Man Arrested in China for Stealing Electricity to Mine Bitcoin

Police arrested a man in China this week on a charge of stealing 150 Megawatts of electricity. The man, identified only by his surname – Ma- stole the electricity to power his Bitcoin mining operation.

It appears that he failed to realize how much power he would need to run hardware he purchased in April, and tried to short-circuit his electricity supply in an attempt to fool the meter readers. Suspicions were aroused when “abnormal” electricity usage was spotted by local grid operators and the police were alerted. In recent months China has cracked down on mining operations, which are particularly prevalent in areas with an over-supply of electricity. It is estimated that by the end of the year, 0.5% of the world’s electricity will be used to mine Bitcoin.

Irish Banks Discriminating Against Crypto Related Companies According to Bitcoin Broker

The co-founder of an Irish Bitcoin brokerage has accused Irish banks of forcing him out of business by denying banking services to his company. Dave Fleming, who founded Eircoin with his business partner Roisin Coogan, accused the Banking and Payment Federation of Ireland of discriminating against crypto-related businesses, a charge the organization denies. Another Irish company- Bitcove, which had previously won a startup award sponsored by Bank of Ireland, accused Irish banks of “shuttering” the company by denying it services. Bitcove has since found a banking partner elsewhere in Europe.

The BPFI, which represents over 70 banks and building societies in the State, told the Irish Times that it was unaware of any policy that directly discriminated against crypto companies, while Allied Irish Bank, Ireland’s largest bank, also denied the accusation. The bank did however state, that some companies were unable to adhere to its KYC and Anti-Money Laundering rules and could not be facilitated as a result. Ireland is marketing itself as a blockchain hub and hopes to capitalize on its success in attracting global tech giants, including Google, Facebook and Twitter, to its shores.

Bitcoin’s Problems Start To Mount

Bitcoin’s price continued to drop as the coin traded at less than $6000 for the first time this year. The week began promisingly with Bitcoin rising from its opening $6475 to $6800 by Tuesday. The price hovered between $6600 and $6800 for the next three days, before collapsing toward $6000 on Friday. A minor rally on Saturday followed, but by Sunday the coin had broken through the $6000 mark and was trading for $5800 by noon; finally closing the week at $6200.

It has been a tumultuous week for Bitcoin, with two major hacks in South Korea shaking confidence in cryptocurrencies, followed by the news on Friday that Japanese regulators have issued notices to six of its exchanges to improve their business practices. The $6000 mark has been viewed as a major correction point for some time, but it seems unlikely that bullish sentiments will return in the short term and further losses are likely. To see current prices click here.

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