Protests in El Salvador Request the Invalidation of the Bitcoin Law

For demonstrators, the law is a waste of resources that could serve to alleviate poverty. The demonstrators claim that only a few businessmen in the government will take advantage of the law.

A group of protesters stood against the Bitcoin Law in San Salvador, the capital city of El Salvador. They even revealed a proposal to repeal the regulations approved in June and proposed to invest the money in solving various problems of poverty and marginalization of 40% of the country’s population.

The demonstration appeared in Diario El Mundo of El Salvador, and it shows numerous groups of people marching through the streets with a flag that reads “No to Bitcoin.” Once they walked and stood right in front of the headquarters of the Legislative Assembly, they were received by deputies Dina Argueta and Anabel Belloso.

The group that created, and led the whole protest was the Bloque de Resistencia y Rebeldía Popular, which is considered a left-wing movement in the Salvadoran political environment. In a document presented to the deputies, this organization describes the Bitcoin Law as nefarious, deceitful, and unconsulted, and they demand its immediate repeal.

 According to the demonstrators, President Nayib Bukele approved it without consulting the people and also improvised the measure without enough technical studies. It caused an outburst of protests in the Latin American country.

This section also mentions that, according to opinion polls, the people and many owners reject it because it will bring negative consequences on prices and income and because it is only beneficial for a few people. The last one, according to the Protestants, is closely related to the government and has the sole purpose of laundering money.

Likewise, the stability of bitcoin (BTC), a cryptocurrency that goes through high volatility, is also a matter of criticism. Whoever transforms 100 dollars into bitcoin, the next day can have half. The opponents demonstrated that these conversions work like a lottery except that this is a mandatory act.

Ultimately, the demonstrators alleged tax exemptions for entrepreneurs who put their capital in bitcoin are also suspicious due to the public spending for the implementation of the law. Regarding the latter topic, they explained the 150 million dollars would serve as an investment to create a convertibility box from bitcoin to dollars.

According to representatives of the Popular Resistance and Rebellion Bloc who issued the statement, all this money could serve to solve the situation of poverty experienced by 40% of the country’s population. In addition, they also discuss that bitcoin would make it easier for illegal activities such as public corruption, drug, arms, and people trafficking, and tax evasion. Finally, the cryptocurrency would generate new financial chaos, hitting people’s salaries, pensions, and savings, affecting peasant families, and hitting the middle classes.

Questioning the protests

The demonstrations also received criticism from certain members of the crypto community. For example, users on Twitter claimed that bitcoin is a cryptocurrency that, according to their vision, promotes individual freedoms and represents an alternative asset that could run in parallel with the dollar, which is the other official currency of El Salvador.

By: Jenson Nuñez

For lawmakers, the digital yuan provides zero privacy and is fully traceable. They assure that it is unprecedented surveillance of all citizens.

Various senators from the United States of America suggested that athletes from that country should avoid using the digital yuan during the Beijing 2022 Winter Olympic Games. On the matter, they asked the country’s Olympic and Paralympic Committee (USOPC) to prohibit its use by athletes.

The concern arrived through an official statement from legislators to the president of the USOPC, Susanne Lyons. In the letter officially signed by Senators Marsha Blackburn, Roger Wicker, and Cynthia Lummis, they openly show their concern about the intention of the Communist government of China to release its Electronic Payment method with Digital Currency, officially called the digital yuan.

The digital yuan is a central bank digital currency (CBDC) that has been gradually gaining ground in China. However, US lawmakers stated that the central bank could track this currency.

In this way, the Chinese government can acquire precise details of every transaction made with these assets and when and where these transactions happened. According to the senators, it would represent unprecedented surveillance of Chinese and foreign citizens for which athletes should receive warning advice.

US legislators like Cynthia Lummis, a renowned bitcoin expert from the state of Wyoming, warned about the lack of privacy in that digital currency. This lack of privacy is under evaluation in China while progressing with the wallet projects that will support this digital currency.

The officials can only ensure anonymity up to a one-time payment limit of 2,000 yuan so far; once it reaches the limit, a verification with an identity document and bank account will be a requirement.

The US lawmakers’ statement urges the USOPC to contribute with the State Department, the Treasury Department, and the Commerce Department to protect the privacy of American athletes (sic) from the Communist government of China.

The Digital Yuan has Turned Into a Controversial Project

These claims are not the first time North American officials have voiced their distrust of the Chinese government’s digital currency project. In May 2021, a former Central Intelligence Agency (CIA) analyst warned that this CBDC could serve to impose economic retaliations.

The national security expert has warned about this cryptocurrency within the framework of the Consensus event. During his speech, he also asked some questions based on the conflict that the Asian country had with the textile companies H&M and Nike.

On the other hand, the issue of privacy has been under discussion before. The president of the central bank of China himself stated that it is impossible to bring complete privacy when using this CBDC.

According to the officials, this lack of privacy has to do with the laws to prevent money laundering and the financing of terrorism, which require that users identify themselves before starting to carry out transactions with these digital methods of payment.

By: Jenson Nuñez

The authorities would strengthen measures towards exchanges and other services. The legislative adjustment would also comply with the rules of the Financial Action Task Force.

The European Commission revealed a proposal for a regulatory adjustment so that all transactions with bitcoin (BTC) and other cryptocurrencies are traceable, and identifiable with user data. The agency is pushing for all digital asset providers to apply the so-called “travel rule” to operations.

The “travel rule” means that every operation that exceeds a set amount must record the details of the one who sends and receives the funds. This information must contain: names and surnames, amount and date of the operation, physical address of both users, date of birth and number of associated accounts, all as a KYC or “Meet your client” control.

In this case, exchanges in all their forms, whether centralized, decentralized, custodial services or P2P platforms, must respect the regulation. The European Commission would strengthen the measures with the sole intention of fighting money laundering and terrorist financing (AML / CFT).

At present, only some categories of crypto asset service providers are included in the scope of the AML / CFT rules of the European Union. The proposed reform will extend these rules to the entire cryptocurrency sector,leading all service providers to apply due diligence to their customers.

Tighter Regulation on Bitcoin

The legislative adjustment that the organization is trying to establish follows the guidelines established by the Financial Action Task Force (FATF). This organization has in the past issued suggestions for countries and other institutions to establish stricter regulations in relation to the bitcoiner ecosystem.

If an individual is going to make a withdrawal from an exchange, the user must first bring the address to which the funds will go. That is, each trader could only withdraw funds to the supplied addresses and not to any BTC address.

In the draft of the new regulations, the FATF highlights a special emphasis on identifying which are the digital asset service providers. These are all those services that function as platforms for exchange, support or development of cryptocurrencies.

As they are categorized as providers of this kind, most entities must accept “Know your customer” (KYC) guidelines. In these cases, these types of services would have to meet the same requirements of centralized exchanges.

On the other hand, the traceability of operations with bitcoin, is one of the features by nature of its network. Any person, entity or regulatory entity can closely follow the operations of its users.

Now the European Parliament and the member states of the union are the ones who will decide if the legislation proceeds or suffers a rejection. In any case, the deliberations and a possible adoption of the proposal could last for two years.

By: Jenson Nuñez

On July 22, the order to cease their activities regarding the receiving of new clients in New Jersey will take place. Authorities would consider BlockFi a decentralized finance platform.

The BlockFi platform is struggling with an order from the Stock Exchange Bureau of the state of New Jersey, United States of America, to no longer accept residents of this jurisdiction as users of its service. This service focuses on loans and exchanges with cryptocurrencies and brings interest and other beneficial features to customers.

Initially, Forbes advanced information through a report, focusing on an unpublished draft of the order. Zac Prince, CEO of BlockFi, came with a series of Tweets explaining that, in effect, they had been ordered not to accept any more New Jersey resident clients for their interest-bearing account service.

However, they will keep on serving the residents of that state who already have an account, and desire to generate interest on the platform (BlockFi Interest Account)

On July 20, the New Jersey State Department of Legal and Public Safety stated a press release on behalf of Acting Attorney General Andrew J. Bruck, BlockFi, who announced the creation of this order addressed to BlockFi.

Among the reasons mentioned for ordering to stop offering the service in this jurisdiction, there is the fact that BlockFi has supported its operations with cryptocurrencies through the unregistered or authorized sale of securities, following federal law on the matter.

Old rules for a new investment model

A team of New Jersey federal prosecutors and legal representatives researched the BlockFi model, and their impressions also appear in the announcement of the order.

As stated in the note, BlockFi would take cryptocurrencies such as BTC and ETH from its users’ accounts, and it would confer them to other clients. For this reason, BlockFi gives back to its customers a percentage of interest or profitability every month.

Authorities highlight that the interest rates offered by BlockFi to its clients are higher than those offered by traditional financial services and banks.

The weak point of this model would reside in the volatility of cryptocurrencies, said Kaitlin Caruso, acting director of the Bureau’s Division of Consumer Affairs. According to him, BlockFi users could suffer exposure to sudden price changes.

In addition, the authorities point out that BlockFi has not registered its BlockFi Interest Accounts service with any regulatory entity. However, this kind of service is not exempt from legal registration with various entities.

Much to the dissatisfaction of the authorities, they accuse BlockFi of telling its users not to inform the entities first before their customer service about any incident or complaint.

So Zack Prince, previously mentioned as CEO of BlockFi, ended his comments on Twitter highlighting his disagreement with the authorities about not considering the BlockFi Interest Account as a security or stock market asset.

He said that BlockFi is committed to engaging with regulators to help them understand their products, which they consider legitimate and appropriate for crypto market participants.

By: Jenson Nuñez

A few weeks ago, Biden had already warned the Russian president about the participation of hackers from that nation in cyber-attacks. Now, the US accused the Chinese government of executing criminal computer operations.

The administration of US President Joe Biden is accusing the Chinese government of directing malicious cyber activities, including ransomware attack operations, crypto hacking, and even digital extortion.

In a press release from the White House, released this Monday, the US government exposed irresponsible and destabilizing behavior coming from the People’s Republic of China. A group of international allies, including the European Union, the United Kingdom, and NATO, joined efforts with the United States of America to make a public denouncement of the criminal activities of the Asian nation.

According to the information, today’s announcement builds on various administration efforts, including the G7 and EU commitments on ransomware, and the adoption of a new cyber defense policy by NATO for the first time in seven years.

US Accusation Include Cyber Attacks

The US government indicted officials from China’s Ministry of State Security (MSS) for taking part in a massive email attack against Microsoft Exchange earlier this year that compromised at least 30,000 organizations that use the service.

Hackers with a track record of working for the Chinese MSS have reportedly had played a vital role in ransomware attacks, cyber-enabled extortion, crypto hacking, and theft. These activities have affected a considerable amount of victims worldwide. In response, the US Department of Justice filed criminal charges against four MSS workers, alleging several crimes, including espionage and computer damage.

The White House statement added in this regard that, in some cases, they are aware that cyber operators affiliated with the government of the People’s Republic of China have carried out ransomware operations against private companies.

The Biden administration also highlights that there is a strengthening plan that will reinforce its cyber defense structures. The report indicates that The United States of America will continue to take all appropriate measures to protect American citizens from cyber threats. Among its plans to address security and stability threats in cyberspace, the government revealed that it is working to strengthen bonds with the private sector.

Cyber-attacks have become a popular activity. One of them is the ransomware attack involving ransom on digital currencies that has made headlines this year after affecting the critical infrastructure of companies worldwide, including in the US.

$ 11 Million Bitcoin Ransom after Ransomware Attack

In May, the hack of the Colonial Pipeline Company, operator of one of the first oil pipelines in the country, set off alarms for the US government. Since then, federal agencies have started cracking down on such attacks. They have also identified the hackers’ locations and revealed they come from countries like Russia.

More recently, Biden warned Russia’s first president, Vladimir Putin, that his government would do whatever it takes to combat such attacks.

By: Jenson Nuñez