Chainalysis Affirms that Better Regulation Could Avoid Crypto Scams

Maria Rodríguez
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Chainalysis Affirms that Better Regulation Could Avoid Crypto Scams

The idea is to avoid terrorism financing, ransomware, darknet markets, outright theft, and sanctions, among other crimes.

Chainalysis, a company that helps government agencies, cryptocurrency businesses, and financial institutions engage confidently with cryptocurrency, always drives studies to know more about the world of cryptocurrencies and how to improve it.

The firm’s 2020 “State of Crypto Crime” report, published recently, is an analysis of illicit activities that took place last year, contrasting 2019’s actions with previous years.

In its investigation, Chainalysis found that while the amount of bitcoin sent from criminal entities doubled between 2018 and the end of 2019, it still accounts for just 0.08 percent of the total number of bitcoin transactions last year.

While exchange hacks and thefts dominated headlines last year, “scams were by far the highest-earning category of crypto crime in 2019,” the report said.

“Cryptocurrency scams represent a significant danger to consumer protection, and the growth of this activity in 2019 calls for increased action from regulators, law enforcement and exchanges alike”, the company warned.

A High Level of Crime

Because some people are using cryptocurrencies to commit fraud, the firm also analyses and stores information about the fraud that happened during the year.

In that sense, according to a special report, scammers received $4.3 billion in crypto, out of about $6 billion received from an illicit activity last year. In that report, the company determined that scams accounted for $8.6 billion in crypto transactions, while criminal activity (including hacks and thefts) totaled just under $12.5 billion.

But the company studies other categories such as terrorism financing, ransomware, darknet markets, outright theft, sanctions, and child abuse. Besides, the total amount of crypto used in scams is disproportionately weighed down by “just three separate large-scale Ponzi schemes” without the equipment the numbers drop dramatically (for example, the PlusToken Ponzi appears to have accounted for between $2 and $3 million alone).

Chainalysis mentions at multiple points that a solution, or at least the beginnings of one, to the issue of illicit activity, can come from more informed regulation, better enforcement of regulation and action by crypto exchanges to tackle illicit activities.

“We believe the consumer protection implications make cryptocurrency scams an issue regulator must address and law enforcement must have the resources to investigate,” the report said. “Exchanges are also in a unique position to help, both in terms of protecting users from being scammed and preventing successful scammers from depositing funds or cashing out”, the study adds.

Regulators and law enforcement agents must become more familiar with analyzing blockchain platforms as part of this effort, the report said.

Recently, the company also highlighted its services, noting that while money laundering in the fiat world might require court-issued subpoenas to tackle, “blockchain analysis tools like Chainalysis” can help investigators analyze transactions recorded on public ledgers, according to what the firm explained.

Regulation would be the answer for those all problems and to prevent money laundering and other crimes. For this reason, Chainalysis will continue to analyse this area to preserve and maintain the good use of digital assets.

By María Rodríguez

Japanese Legislators Propose to Create a Digital Currency

Maria Rodríguez
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Japanese Legislators Propose to Create a Digital Currency

In a proposal devised by Japanese lawmakers, it was known that there is an initiative to create a digital currency that can be used as a national currency.

As part of a prevention and support strategy, some lawmakers in Japan talked about a proposal to issue a digital currency with national character. According to some sources linked to the authorities, the main objective of the initiative is based on the pressure that exists for the launch of China’s digital Yuan and the development of the cryptocurrency of the social network Facebook, Libra.

According to the proposal, the development and creation of the digital currency can be achieved with the collaboration of the private sector so the public and private sectors would work together to assemble a whole cryptographic infrastructure in the country.

To update the crypto ecosystem in Japan, the initiative hopes to make strategic alliances with companies in the industry that are in turn able to benefit from the possible extension of the legal range that cryptocurrencies could have.

Norihiro Nakayama, who is a parliamentary Vice-Minister of Foreign Affairs, said the proposal is being supported by a group of 70 legislators among whom he collaborates as an important member for the discussion and evolution of the proposal in the Japanese Parliament.

Nakayama said that the Japanese government must develop plans and proposals similar to those that China is creating, so it is important to promote this initiative. “China is moving towards the issuance of the digital Yuan, so we would like to propose measures to counter such attempts”, he explained. He also announced that they are in research plans on the urgency of creating or not creating the asset. “The first step would be to analyze the idea of ​​issuing a digital yen”.

Speaking about the proposal, Nakayama said they will present the final proposal to the government next February. However, according to some experts, Japan is unlikely to develop the technology in a short period, and among other things, change the legal and technical conditions to make it possible.

Interest on Crypto Technology

It is not yet known for sure if there is a real interest in the use of cryptocurrency technology in the government of Japan or if the movement has only been lifted by the actions of governments in the region, such as China. However, a large number of important politicians have raised their voices in favor of digital currencies.

Shizo Abe, who is Prime Minister, recently explained that the government is in talks with the country’s Central Bank to conduct an investigation that helps identify ways that help the yen (the Japanese currency) improve its liquidation so it is believed that blockchain technology could be useful. They will also study the use of digital currencies to improve international trade.

The creation of a digital currency can open a broader field to Japanese trade, and include it not only in the crypto industry but in the newest technological and financial sector.

Lawmakers expect the initiative to get a certain level of attention from the government, especially after the statements of the Minister of Finance, Taro Aso, who mentioned that if the digital Yuan results to be a success, it would be a “very serious problem” for Japan’s commercial activity.

By María Rodríguez

Blockchain Use in Supply Chains of Consulting Firm Garter Will Not Go beyond Pilot Phase

Alexander Salazar
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Blockchain Use in Supply Chains of Consulting Firm Garter Will Not Go beyond Pilot Phase

The analysts of the company believe that initiatives in this sector should re-focus on their solutions. The developers should digitize all the information on the supply chain.

In recent years, one of the business sectors most interested in developing blockchain solutions has been precisely the supply chain industry. However, what at first seemed to be a successful trend, today does not give favorable results. According to a study, conducted by the consulting and research firm specializing in information technologies Gartner, published in recent days, 80% of the blockchain initiatives in this area will remain in the pilot phase until 2022.

The analysts of the company note that a large majority of the projects will not pass the proof of concept (PoC) due to unfavorable approaches. The report indicates that these initiatives currently have work models that do not adapt to the needs of a supply chain. Most of these projects are inspired by solutions for banking and insurance, without taking into account key elements for the proper management of a supply chain.

Andrew Stevens, one of the analysts in charge of the report, explained that supply chains are business areas with complex communication systems. It should be noted that this sector covers the full range of activities and operations related to the sale of a product. Stevens believes that, before the creation of a solution, developers should devise a way to digitize all the data that compose the chain.

In consequence, a system for that sector should consider the registration of each of the events that occurred at the time of creating, transporting and selling a product. In the same way, the data of the products, as well as the information about their transportation and packaging, should be registered and digitized.

The analysts advise that companies re-focus on their projects while still experimenting with blockchain technologies. For this reason, they consider that it is necessary to first determine the key criteria of the ecosystem and its most pressing needs. If conducted in this way, the firm believes that companies will be able to generate products that satisfy and suit them indeed.

Gartner’s report refers to a sector that has led to plenty of discussions in recent years since several renowned brands have sought to implement blockchain platforms in their supply chains. For example, Mercedes Benz confirmed at the beginning of 2019 that it had successfully tested its blockchain-based solution. In line with the luxury car company, the world-renowned chains Target and Coca-Cola have also experimented with blockchain technologies in recent months.

However, the information provided by the consulting firm coincides with the results of a report from the University College London Centre for Blockchain Technologies (UCL CBT), which is based on the follow-up of 105 projects between November 2018 and January 2019. It was found in the study that, despite the benefits that blockchain technologies offer in the different supply chain processes, there are important challenges to be solved before their massive deployment.

By Alexander Salazar

Possible Effects of Next Halving on Bitcoin’s Price

Alexander Salazar
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Possible Effects of Next Halving on Bitcoin’s Price

Skepticism is the most common position on the possible impact of the halving. Historically, halving events have coincided with increases in the price of the main cryptocurrency.

The decreasing issuance of Bitcoin (BTC) that this third halving will entail has aroused expectations among the analysts and enthusiasts in the ecosystem. It should be noted that there are mixed positions on the possible effects of the event on the price of the cryptocurrency.

Some members of the ecosystem believe that the current price, which doubled in 2019, was already influenced by the event scheduled for mid-May this year. Others think that the effect of the halving on the market valuation of the cryptocurrency has not yet been seen. Some even predict a considerable rebound after the rewards go from 12.5 BTC to 6.25 BTC per mined block.

For instance, the CEO of Bitcoin Suisse, Arthur Vayloyan, considers that the next halving will be the catalyst for a new major bullish rally. He said that it was best to refer to the history of previous Bitcoin reward declines to make more accurate predictions.

In fact, at the approach of each reduction, there have been increases in Bitcoin’s price. In 2012, the year of the first halving, Bitcoin increased in value from USD 5.27 exceeding USD 12 before the event occurred in November of that year.

At that time, the popularity of the main cryptocurrency had not even approached its current levels. Neither said cryptocurrency had its market price, even though it maintained a steady bullish trend. The following year, Bitcoin closed above USD 700, occasionally exceeding USD 1,000, according to data from Buy Bitcoin Worldwide.

In 2016, the price started just above USD 400, but it reached about USD 650 at the time of the second halving in July. Then it approached USD 1,000 again at the end of the year and, in July 2017, it was around USD 2,500. At the end of that year, when the biggest bullish rally of the cryptocurrency market occurred, Bitcoin nearly reached USD 20,000.

Impact on Mining Industry, Profitability, and Market

It can be said that the miners’ profits, once the rewards per mined block are reduced, would also be reduced by half, especially considering that almost 97% of those gains currently come from such rewards.

It was reported that only 3.07% of the profits in the mining industry result from the transaction fees executed in the network. For this reason, various companies manufacturing mining equipment have been preparing to minimize costs for the event scheduled in May.

Some personalities have predicted possible scenarios involving mining activities in the ecosystem. For example, Andrew Kiguel, CEO of Hut 8 Mining, considered that the hash rate could decrease even 50% compared to current levels.

However, less than a semester from the reduction in rewards, the trend is still rising. Until now, that power remains close to 120 eH/s, according to data from BitInfoCharts.

For the moment, the truth is that expectations about the halving of the rewards are high. The reason why is that, from block 630,000, the market will go from receiving 1,800 BTC per day to only receiving 900 BTC.

By Alexander Salazar

India Advances in the Prohibition of Cryptocurrencies Whilst Prime Minister Award a Crypto Developer

Maria Rodríguez
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India Advances in the Prohibition of Cryptocurrencies Whilst Prime Minister Award a Crypto Developer

A complete ban on cryptocurrencies could be presented and discussed this year 2020.

Narendra Modi, who is the Prime Minister of India, recently rewarded a young businesswoman who developed an application capable of tracking the price of cryptocurrencies, even though the country’s Supreme Court is discussing the legal future of cryptocurrencies in the region.

The young creator of the application, Harshita Arora, received the news last Friday, January 24th. At the same time, Prime Minister Modi commented, through the social network Twitter, that Arora’s passion for science and technology is evident.

“Arora’s passion for science, technology, and human well-being are visible”, said the tweet. The Bal Shakti Puraskar 2020 is the award that recognized Arora’s effort. The award seeks to promote the development of young researchers in areas such as innovation, art, culture, social service, and science and technology.

The application that allows determining the price of some cryptocurrencies in the market is also able to perform transactions in digital wallets. Through the same social network, Modi explained that with the application users can avoid the scam and be protected, as well as investors. “Arora created an application to protect investors from scammers”, she explained.

As it is known, Arora has also collaborated in the creation of other very useful apps, such as “Food AI”, a tool that helps identify foods using photographs.

The State of the Cryptographic Industry in India

Although Arora was recognized with this award from the Prime Minister’s hand, it does not mean that there is a favorable condition for the crypto industry in India. In recent data, it was known that the Supreme Court of India advanced in the discussion of the case on the ban that would have been issued by the Reserve Bank of India in the use of these assets to companies related to the sector.

The case was taken to the highest court in the country after the requests of some users and companies related to the crypto business were made public, who were affected by the approval of the banning of banking services to cryptocurrency companies. The ban was published by the highest financial institution in April 2018 and entered into force in July of that year.

Although this prohibition measure significantly reduced the use of cryptocurrencies in the country, it was known, though some press reports that some lawmakers in India are working on a bill that would completely ban the use of these assets.

According to local media, the project called “Prohibition of cryptocurrencies and regulation of official digital currencies” could be presented this year to the authorities of the Parliament for discussion.

If this law is approved, any digital asset that is not of governmental origin would be considered illegal. The project catalogs as illegal “any information, code, number or token that is not part of any Official Digital Currency, generated through cryptocurrency means or otherwise, that provides a digital representation of value”.

The community is waiting for the reactions and official decisions of the Indian government.

By María Rodríguez

Venezuelan Programmers Will Compete to Create a Video Game that Teaches About Cryptocurrencies

Maria Rodríguez
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Venezuelan Programmers Will Compete to Create a Video Game that Teaches About Cryptocurrencies

The main idea is to develop a video game to teach people all about these digital assets.

Cryptocurrencies work through a technology that more and more people are interested in learning. The current idea is that people need to learn about this topic interactively and easily.

For this reason, next January 31st programmers, artists, and experts in cryptocurrencies will have 48 hours to develop a video game where they educate others about cryptocurrencies and how to use them.

The competition will take place in the city of Caracas, the capital of Venezuela, during the XI edition of the hackathon Global Game Jam (GGJ). The name of the event will be Caracas Game Jam.

To make the event something real, the students that make up the Group of Playful Experiences and the Computer Engineering Students Center of the Simón Bolívar University, together with Caracas Game Jam, will be in charge of everything related to the local organization of the competition.

The Panamanian exchange Cryptobuyer is one of the promoters of the event. This company is the one that has established the challenge of creating a video game that educates people about the use of cryptocurrencies.

A Teamwork

The objective is to develop a video game capable of teaching all about cryptocurrencies. Like all video games, the winner must have professionals in the field of computing, graphic designers, experts in editing and musicalization, as well as all careers that are related to the creation of video games.

In the particular case of this video game, the hackathon will be focused on bringing together students with experts in the area. The idea is that students can learn whilst helping to develop the video game.

As it was explained, all the participants will have 48 hours to present a video game that meets the established requirement, presenting how cryptocurrencies work, considering them as a means of payment or even as a reward, which are the most popular uses of these digital assets.

The winners of the competition will receive personal and direct advice from the Cryptobuyer team to enhance the development and growth of the idea for the video game and thus achieve greater international projection of the winners and comply with the objective of the development.

The Successful Union of Video Games and Cryptocurrencies

Although it was not one of the first options for many people, the video game industry is becoming one of the most successful use cases of blockchain technology. For instance, the non-expendable tokens of the Ethereum ERC-721 standard are presenting use cases due to the degree of authenticity that it can offer within a digital operation.

Some great companies such as Ubisoft and Microsoft have begun to explore the sector through partnerships and acquisitions with companies that work with blockchain technology. They have not yet reported relevant use cases, but the tests are already being conducted and it is expected that this year they will present interesting proposals for the crypto-market and all its users.

By María Rodríguez

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