Crypto Guides, Knowledge & Insights

Bitcoin Is a ‘Boon for Surveillance’, Says Former CIA Director

Blockchain technology is underutilized as a “forensic tool,” argues Michael Morell in a new report.　　The technology behind Bitcoin is a “boon for surveillance” and shouldnt be shunned by governments but embraced, according to an ex-CIA boss.　　Michael Morell, who was previously the CIA‘s acting director, said in ’An Analysis of Bitcoin‘s Use in Illicit Finance’ that “blockchain technology is a powerful but underutilized forensic tool for governments to identify illicit activity and bring criminals to justice.”　　The report, co-authored by Josh Kirshner and Thomas Schoenberger, was ostensibly written as a defense of Bitcoin—a response to growing “concerns about the illicit finance implications of the cryptocurrency ecosystem.”　　Published by the recently formed Crypto Council for Innovation, led by Coinbase and Square, among others, the report concluded that criminal use of Bitcoin is “significantly overstated”—rather than being the currency of choice for criminals, it can be used to catch them.　　“Put simply, blockchain analysis is a highly effective crime fighting and intelligence gathering tool,” the report read.　　The reason？ The technology Bitcoin runs on—blockchain—means all transactions are logged on a public, decentralized, immutable ledger.　　Tracking illicit Bitcoin transactions is therefore easier than tracing illegal funds moved across borders using “traditional banking transactions” and “far easier” than trying to

2021-04-14Deep Dive

‘Concern Over BTC Use for Illicit Finance Is Significantly Overstated,’ Says Former CIA Director

In an independent paper, former acting Director of the US Central Intelligence Agency (CIA), Michael Morrell, said the concern over the use of bitcoin for illicit finance is “significantly overstated.”　　Morrell is a 33-year veteran of the agency. He served as Deputy Director and as acting Director in 2011 and again between 2012 and 2013. The lobbying group, Crypto Council for Innovation, commissioned the study. The Crypto Council was formed recently by the likes of Fidelity Investments and Coinbase.　　Bitcoins illicit use overstated　　Morell came to two key conclusions in the study. The first was that the concerns over the use of bitcoin in illicit finance are significantly overstated. The second was that blockchain analysis is a highly effective intelligence gathering tool for fighting crime.　　Morell admitted that he did not expect to reach these conclusions. He presumed that those expressing concern over bitcoin had a comprehensive understanding of the subject. These include influential global finance leaders like Treasury Secretary Janet Yellen and President of the European Central Bank, Christine Lagarde.　　However, he realized an essentially negligible amount of illicit finance took place on blockchains upon performing the analysis. According to Chainalysis, less than 1% and falling. Morell noted that this was less than the

2021-04-14Deep Dive

Bitcoin Is A Haven For Hard-Pressed Turks

Turkeys woes continue without let-up. Inflation figures of over 16%, unemployment at 12%, and a national currency that has lost half its value since 2018 means that many Turks are ditching the lira in favour of the perceived much safer haven of Bitcoin.　　The Turkish lira plummeted again last month as President Erdogan sacked the incumbent central bank governor Naci Agbal after he had the temerity to raise interest rates in order to boost the lira, a move welcomed by most economic observers.　　The upshot of the sacking was that the Turkish lira fell yet again; this time by about 14%. The first meeting of the Turkish Monetary Policy meeting since Agbals dismissal is due this Thursday. According to a Morgan Stanley statement cited by Reuters, any surprise cuts in interest rates could lead to a decline of between 10 to 15% in the lira.　　All this bleak economic news is having its effect, and Turks are looking for a way out of their fast-devaluing currency. Cryptocurrency trading, for many, has been that way to hedge against inflation.　　According to Chainalysis, trading volumes in cryptocurrencies, from the beginning of February to late March, reached 218 billion lira. On the weekend that Agbal was

2021-04-14Deep Dive

What is blocking the decentralized internet?

Over the past decade, the proliferation of blockchain technology has resulted in hundreds of networks that are unable to talk to each other. With data siloed and developers‘ options now extremely limited, the sector has been described as being at a “historical crossroads” — and unless this industry evolves and expands, it’s feared that blockchain will struggle to achieve the same reach and interconnectivity that the internet enjoys.　　Interoperability has been one of the hottest phrases in the blockchain lexicon in recent years. Although this cross-chain mentality is encouraging, it could be argued that many of the solutions being touted are a mere sticking plaster, only providing connectivity between a select number of networks.　　An everyday consumer would react with incredulity if they were only able to send an email from their Yahoo inbox to someone else with the same domain name. The idea that someone surfing the internet on Google Chrome couldnt access a website found on the Safari browser is equally unimaginable. Yet this is the situation that the blockchain sector has found itself in — to the extent that convoluted processes have needed to be built to ensure that assets can make their way across blockchains. (One example here

2021-04-14Deep Dive

DeFi Is Transparent, Unless You Look Closely

We need more researchers and better metrics in DeFi to fulfill the promise of a more robust and transparent financial infrastructure.　　In a recent research paper published in the Federal Reserve Bank of St. Louis Review, I argued that “DeFi [decentralized finance] has the potential to create a truly open, transparent and immutable financial infrastructure.”　　The unprecedented speed of financial innovation in DeFi is exciting, and the space is home to some of the smartest people I know. But in the midst of this excitement, it is important not to forget about the risks.　　Fabian Schär is a professor for distributed ledger technologies and fintech at the University of Basel and the managing director of the Center for Innovative Finance at the Faculty of Business and Economics, University of Basel.　　When I say risk, I am not referring to the usual suspects, such as smart contract vulnerabilities or economic attack vectors. I am also not talking about centralization creep, admin keys, oracle dependencies or highly concentrated governance token holdings. All of the above are important aspects, may cause some havoc and certainly deserve our attention.　　What I am mainly concerned with is an inherent risk, based on one of the fundamental properties of DeFi. I

2021-04-14Deep Dive

Industry Players Predict Singapore Will Be The First Country To Fully Embrace Bitcoin

Singapore may become the first Asian country to fully adopt Bitcoin. This is according to industry players in the cryptocurrency community who are objectively analyzing the possibilities. The idea of a country, any at all, fully accepting Bitcoin is a complex topic when the odds are fully considered.　　To completely adopt Bitcoin may mean different things to Bitcoiners, but generally, the shared definition is to embrace the asset by allowing usage in as many forms as possible. These include making fair regulatory policies, creating room for a Bitcoin ETF, allowing usage across as many parts of the country as possible, and allowing banks to work hand in hand with Bitcoin exchanges. These are some of the significant ways that qualify as “full adoption” for Bitcoiners.　　So far, there hasn‘t been any country to date that has fully embraced the asset, although some are significantly ahead of others in the journey of adoption. However, considering the structure of Singapore’s economy, these industry players are weighing the options, and their best bets are countries with little resources.　　Singapore happens to fall into this category, and in the past years, a state-owned investment company, funded by the government reserves with a portfolio of over $300 billion,

2021-04-14Deep Dive

South Korean City Goes to War with Tax Evaders, Will Seize their Crypto

The South Korean city of Gyeongju, in North Gyeongsang Province, has announced that it will investigate tens of possible cases of suspected tax evasion to see if high tax-band individuals are concealing their money in crypto – with token “collection and seizures” possible.　　Per Gugkje News, the city has stated that it has been in contact with leading domestic crypto exchanges such as Bithumb and Upbit to obtain data on a number of residents it suspects of tax-related irregularities.　　Under new regulations that came into force last month, crypto exchanges are obliged to report on suspicious transactions and must abide by compliance policies that also include surrendering data on their clients to tax bodies.　　Using this data, the city intends to check to see if higher-band income tax individuals who have reported unexpectedly low earnings – and submitted lower-than-usual tax declarations – are seeking to conceal their funds in crypto holdings.　　Individuals it finds guilty of doing so may have their wallets “seized” and tokens “collected,” the city authorities confirmed.　　Previous investigations of this sort have previously focused entirely on cash holdings, bank accounts and tangible assets.　　The city has earmarked at least 511 individuals for investigation, and will check to see if they have undeclared

2021-04-14Deep Dive

What Will Happen To Bitcoin After This Week's Coinbase IPO?

With Coinbase due to go public on the Nasdaq this Wednesday, many investors are preparing for what they hope will be a landmark moment for global adoption of Bitcoin.　　This is the first listing of a major crypto company, and marks a milestone for the cryptocurrency space. Coinbase has made a significant amount of progress over the past year, in the run up to their IPO, their first quarter revenue they reported $1.8 bn compared to $1.3 bn over the whole of 2020. The huge gains that this company has made over the past few years runs in alignment with the Bitcoin surge from the low $3,000‘s to the high $60,000’s.　　With Fidelity, Square, Coinbase, and Paradigm having recently launched a crypto lobby group the ‘Crypto Council for Innovation’, hopes are that regulation will turn more favourably towards cryptocurrencies, and in turn create a new target for Bitcoin.　　Matt Blom, head of sales at Nasdaq-listed digital asset company Diginex, commented on the bullish expectation for Bitcoin:　　“$70,000 is the new target for the bulls. Every month this year has so far registered a new all-time high.”　　Another indication of positive Bitcoin sentiment by traders and investors is the net transfer volume of Bitcoin on

2021-04-14Deep Dive

Japan-inspired NFT Game Chainbinders Raises $5 Million in 2 Hours

Chainbinders, the worlds first liquid NFT collection backed by a reserve pool of Ethereum, raised over $5 million in the first two hours after the start of sale of their native BND utility token earlier this week, the firm said in a release to CryptoSlate.　　$3.8 million of that was raised in just 15 minutes as part of the liquidity generation event (LGE).　　The total amount of funds raised on the first day of LGE exceeded $6.2 million due in large part to the projects high production quality, innovative game-theory mechanics, and a hyper-deflationary tokenomics model.　　Inspired by Japan　　Chainbinders is the latest NFT product by Doki Doki DeGacha, a gamified NFT platform inspired by the popular Japanese Gachapon, where players receive random collectibles from vending machines.　　“Chainbinders is part game theory, part art collecting, part gacha, and part anime. Its got elements of things ranging from Final Fantasy to Nier:Automata,” Roy Blackstone, Creative Director at Doki Doki, in a statement.　　He added, “We‘re creating original IP and characters (a massive cast of 15 of them!), giving them each their own backgrounds, lore, stories, motivations, and then gamifying them on the marketplace with some clever token mechanics to make sure these NFT’s have instant liquidity and

2021-04-13Deep Dive

European Investment Bank reportedly to issue bonds with blockchain tech

The European Investment Bank, an international financial institution owned by European Union member states, is reportedly exploring blockchain technology for issuing digital bonds.　　According to a Tuesday Bloomberg report, the EIB has hired major global banks like Goldman Sachs, Banco Santander and Societe Generale to look at a potential deal involving a euro-denominated bond issued on a blockchain.　　Citing a person familiar with the matter, Bloomberg states that the EIB is planning to deploy blockchain technology for the registration and settlement of digital bonds. Investor meetings for the inaugural sale will reportely start on April 15 and continue for several weeks.　　The EIB did not immediately respond to Cointelegraphs request for comment.　　Blockchain, the underlying technology of cryptocurrencies like Bitcoin (BTC) and Ether (ETH), has been increasingly implemented in the bond market in recent years. According to HSBC, blockchain presents cost savings opportunities of “more than 10x” for the bond market, reducing the need for intermediaries and enabling issuance by smaller projects.　　As the European Union‘s investment arm, the EIB has often been at the forefront of innovation in Europe’s debt capital markets. Back in 2007, the EIB issued the worlds first green bond, labeled a Climate Awareness Bond.　　The news comes as the European Central

2021-04-13Deep Dive

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