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Wirecard Debacle Forces Crypto.com to Find a new Card Provider

Wirecard Debacle Forces Crypto.com to Find a new Card Provider

Various companies within the cryptocurrency space have been affected by the Wirecard debacle. It puts a very different spin on the concept of crypto debit cards, as this industry takes another big hit. 

Most people will have heard of what happened to Wirecard.

A Tough Spot for Crypto.com

The German firm’s account practices have created a lot of problems.

As one would expect, this also affects third parties making use of what this company has to offer.

One of the companies affected is Crypto.com, formerly known as MonaCo.

Following a very successful ICO in 2017 the project has continued to grow and evolve.

Despite issuing a crypto debit card in a lot of regions, that will now come to a halt.

Moreover, the company has to  ensure user funds are safe and reimbursed accordingly. 

This particular process is being taken care of and should be completed within the next few business days. 

Moreover, Crypto.com will need to find a long-term solution for its crypto debit card project.

For now, the card program will be transferred to a new company, albeit no details have been specified yet..

For Crypto.com users, there shouldn’t be any long-term issues, but the coming days may be a bit uneasy.

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Iran Legalizes Crypto Mining Within Days of a Chinese Plea for ‘Better Conditions’

Iran Legalizes Crypto Mining Within Days of a Chinese Plea for ‘Better Conditions’

Iran is legalizing crypto-mining, giving a boost to this activity which was already booming despite the unfavorable position of the authorities. According to the Iran Chamber of Commerce, Industries, Mines and Agriculture, the government decided to give the green light to this activity, promoting a series of legal reforms that put an end to a […]

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LibertyX Brings Cash-for-Bitcoin Purchases to 7-Elevens Across the US

LibertyX Brings Cash-for-Bitcoin Purchases to 7-Elevens Across the US

Making Bitcoin more accessible for purchase is always an ongoing challenge. LibertyX may be able to crack the code, as it has added 20,000 stores to purchase BTC directly. 

For those familiar with LibertyX, this news may not come as too big of a surprise.

A big Move by LibertyX

The company is building  a network of locations where Bitcoin can be bought.

Additionally, the company runs a growing network of ATMs with cryptocurrency support.

Adding another 20,000 stores and locations to this list is a big deal.

Especially when considering how all retail locations will accept cash payments for these transactions.

Supported chains include 7-Eleven, CVS Pharmacy, and many more. 

All of these locations see ample foot traffic – under normal circumstances .

As such, thousands of people will be exposed to an option to purchase Bitcoin every single day.

Ensuring this results in much broader adoption of cryptocurrency, is not a guarantee. 

Unless this option is advertised properly, most people will simply overlook it altogether.

That being said, one has to applaud the efforts by LibertyX to keep making an impact.

Focusing on both chain retailers and independent retailers may be a recipe for success in the long run.

Improving Bitcoin accessibility will remain a point of focus. 

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UK Regulators Shut Down Crypto Exchange Following £1.5m Scam

UK Regulators Shut Down Crypto Exchange Following £1.5m Scam

GPay Limited, which traded as XtraderFX (formerly CryptoPoint) has been shut down by UK authorities following investigations into its practices.

The firm has been on the radar of the Financial Conduct Authority for over two years. But a High Court hearing, before Deputy Insolvency & Companies Court Judge Baister, finally forced it to close last week.

“This firm is not authorised by us and is targeting people in the UK. Based upon information we hold, we believe it is carrying on regulated activities which require authorisation.”

Investigators discovered that at least 108 victims had lost £1.5 million in total, as a result of using the online crypto trading platform.

The URL address www.xtraderfx.com now leads to a secure connection failed screen.

scam crypto exchange XtraderFX

XtraderFX homepage. (Source: 55brokers.com)

Users became suspicious when asked to submit copies of their photo ID, a utility bill, and a debit/credit card, following a withdrawal request.

While this is a standard industry practice, especially from reputable crypto exchanges with close ties to regulators, users usually deal with KYC and AML requirements on sign up.

David Hill, Chief Investigator for the Insolvency Service, said the crypto exchange operated by GPay was entirely a scam. With that, Hill stressed the importance of conducting suitable checks on any trading platform, especially when large sums of money are involved.

“We welcome the court’s decision to wind up GPay as it will protect anyone else becoming a victim. This scam should also serve as a warning to anyone who conducts trading online that they should carry out appropriate checks before they invest any money that the company is registered and regulated by the appropriate authorities.”

Scam Crypto Exchange Used Facebook to Bait Victims

The XtraderFX crypto trading platform had used social media adverts to lure rookie traders who were looking to get rich quick.

The adverts used by XtraderFX featured images and the name of Martin Lewis of moneysavingexpert.com – a consumer champion in the world of UK finance.

crypto scammers used images of Martin Lewis to lure victims

Source: moneysavingexpert.com

His TV show, The Martin Lewis Money Show, on ITV, occupies a prime time slot that offers money tips and consumer advice.

Lewis raised the issue with Facebook when he first became aware of the fraud back in 2018. But a lack of action on their part forced Lewis to launch court proceedings against the social media giant on the grounds of defamation.

Lewis claimed that over 1,000 scam adverts, featuring his image or name, had appeared on the social media platform, even after he had informed them of the problem.

The matter was settled by an agreement to withdraw legal action if Facebook donated £3 million to Citizens Advice as part of their initiative to deliver a new UK Scams Action project.

Facebook also agreed to launch a new UK specific scam reporting tool manned by a dedicated team.

With regard to XtraderFX’s forced insolvency, Lewis had mixed feelings about the ordeal. Nonetheless, he explained why he choose to sue Facebook, rather than XtraderFX directly.

“I don’t know whether to dance a jig that these despicable scum have been shut down, or cry that they managed to take so many people’s money. I’ve been fighting scam ads with my face on for four years now – sadly 1,000s have appeared. It’s always been tough to get at the actual scammers, which is why I sued Facebook to try and cut off their publicity.”

What’s more, similar to Hill’s advice, Lewis stated that scam adverts often appear on legit websites and even in broadsheet newspapers. With that, individuals need to be more skeptical.

Featured Image from Shutterstock

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Fake Libra Peddlers LOL-Swarm Facebook for Discount Crypto Scam

Fake Libra Peddlers LOL-Swarm Facebook for Discount Crypto Scam

Numerous fake accounts, groups, and pages operated by fraudsters have swamped Facebook and Instagram to mispresent themselves as the official hubs for the social media giant’s upcoming Libra crypto, the Washington Post reported today. Fake Libra accounts with hundreds of followers Despite Libra’s expected launch in 2020, a part of the scammers are already selling […]

The post Fake Libra Peddlers LOL-Swarm Facebook for Discount Crypto Scam appeared first on CCN Markets

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Three Months After Crypto’s Black Thursday, is BitMEX Back on Top?

Three Months After Crypto’s Black Thursday, is BitMEX Back on Top?

The effect of the COVID-19 pandemic’s economic fallout on cryptocurrency markets has been felt across the cryptocurrency markets. However, now that more than three months have passed with “Black Thursday” in the rear-view mirror, things are starting to look–well, (almost) normal.

Indeed, after the initial shock that the virus wrought on the global economy, the road to recovery has been somewhat steady, although looming doubts about the future are still on the horizon.

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Still, in cryptocurrency markets, it can almost be argued that now that the most immediate economic crisis has passed, certain aspects of the cryptocurrency markets almost seem to have picked up where they left off–for example, the price of Bitcoin, which was holding steady around $9,000 before the virus hit, returned to levels around $9,000 in early May, and has maintained them ever since.

Indeed, “crypto, similar to many markets across the world, experienced an initial shock due to the coronavirus, leading to a severe market dip,” said Steve Ehrlich, chief executive of Voyager Digital to Finance Magnates–but “crypto markets were some of the fastest to recover, as Bitcoin re-gained its pre-pandemic price in a matter of weeks following the crash.”

Steve Ehrlich,  chief executive officer and co-founder of crypto trading platform Voyager.

As time goes on, and recovery continues, it seems that a similar argument can be made for parts of the cryptocurrency derivatives market–although “recovery” in the derivatives space isn’t as cut-and-dry as something like the price of Bitcoin.

Black Thursday’s redistribution of users may have stuck

Indeed, data from Bybt.com shows that as of last week, open interest on BTC futures contracts on exchanges other than BitMEX was either roughly equal to or higher than pre-corona levels.

Open interest, pre-Black Thursday

Twitter user @DialecticCrypto noted that in fact, open interest on Binance Futures was twice as high as it was before the COVID-19 crash, and 50 percent higher on Singapore-based ByBit–suggesting that perhaps Binance Futures and ByBit may have absorbed the most users from BitMEX after a service outage famously occurred on BitMEX during peak trading hours on Black Thursday.

Open interest, post-Black Thursday

However, while BitMEX may have lost some of its users and market share to other futures exchanges in the market, the exchange seems to have undergone its own journey towards recovery. In spite of its losses, at press time, the exchange had regained its spot as the top platform in terms of BTC Futures open interest with $898.47 million in OI; Okex followed with $774.22 million, topping Huobi’s $496.85 million.

Of course, these charts don’t paint a complete picture of the futures markets: for example, BTC futures open interest on CME showed hit new record high levels in May; open interest on all of CME’s BTC open options showed consisten growth through the month of June, and have re-started to rise after a sharp drop across a number of exchanges at the end of the month.

However, the data points to an important question: more than three months after crypto’s Black Thursday, how has the crypto derivatives market continued to shape and re-shape itself?

What happened on Black Thursday, and why was it so important for the crypto derivatives space?

The reason that Black Thursday holds particular significance for the derivatives side of the cryptocurrency space is due to infrastructural problems on exchanges–particularly, on BitMEX.

Indeed, during one of the most volatile moments on March 13th, BitMEX users experienced a sudden service outage that lasted for roughly 25 minutes.

While it was initially believed that the outage was due to technical issues with one of BitMEX’s cloud service providers, the exchange later said that the outages happened because of two subsequent distributed denial of service (DDoS) attacks.

“On 13 March during a peak moment of market volatility, the botnet overwhelmed the platform via a specially-crafted query to the Trollbox feature, prompting the database’s query optimiser to run an extremely inefficient query plan,” BitMEX’s post-mortem report of the attack reads.

Although the service outage was not necessarily an infrastructural failure on BitMEX’s behalf, but rather, an attack from a malicious third party, the damage to the exchange’s reputation seems to have remained–bolstered by another service outage in May, and a lawsuit the same month that accused BitMEX and its top officials of a number of crimes; the exchange has rejected the lawsuit’s claims.

Still, Bilal Hammoud, President, CEO, & co-founder of NDAX, one of Canada’s leading crypto exchanges, told Finance Magnates that as a result of the outage, “a lot of people lost confidence in BitMEX and the way they do things.”

Bilal Hammoud, President, CEO, & co-founder of NDAX.

“[…] I think traders are definitely wary and in the near future, people are going to be moving towards more regulated platforms,” Hammoud said.

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BitMEX has been criticized for incorporating in Seychelles, a tiny island nation located in the Somali Sea segment of the Indian Ocean that has a reputation as an international tax (and regulation) haven; as the crypto industry has matured, an increasing number of exchanges have sought to establish themselves in the US, the UK, and other parts of the world with higher levels of tax and regulation.

“Subsequently, we have seen CME hit an all-time high in volume in the US and Binance has increased its volume,” Hammoud explained. “They’re taking a lot of that distribution away from BitMEX and I think it’s going to take BitMEX quite some time to regain trader confidence.”

Regarding redistribution of users on cryptocurrency derivatives exchanges, HDR Group, BitMEX’ parent company, told Finance Magnates that “both cryptocurrency and traditional markets saw substantial withdrawals in March as traders grappled with unprecedented market conditions. Bitcoin Futures Open Interest levels have now returned to more normal levels, with BitMEX currently leading the pack. We are never complacent though, and are focussing on continual product innovation and engine development in a fast growing, yet highly competitive market.”

“Currently, we see very little loyalty between the crypto community and derivative exchanges.”

Voyager’s Steve Ehrlich also predicts that a movement toward exchanges with higher levels of regulations will continue: as BitMEX and other crypto derivatives exchanges continue to face infrastructural issues and the occasional legal battle, “we have seen these exchanges gradually lose more and more volume over time,” he said, “and other derivative exchanges increase in volume after every outage and legal issue.”

Ehrlich also pointed out that at this stage in the game, these kinds of migrations are par for the course: “outages and legal action are not new,” he said. “This [kind of] migration has become commonplace in the crypto market, with investors jumping from one ship to the next, as concerns over safety, security, and solvency arise.”

Therefore, the key for crypto derivatives exchanges who want to build longer-lasting relationships with their users seems to be moving toward security and compliance: “as global regulations become more clear, we see the need for these derivatives exchanges to put policies into place to better protect their customers,” Ehrlich said. “Currently, we see very little loyalty between the crypto community and derivative exchanges.”

”There’s a lot of caution now” amongst crypto whales

And BitMEX has demonstrated that it is working to regain the trust of its users and to build its service offerings. For example, just last week, Finance Magnates reported that BitMEX will begin offering its users the option to hold corporate accounts, which will include enhanced security and customer service, as well as auditing and accounting features.

Additionally, BitMEX appears to have worked toward being as transparent as possible when it has come to service outages and other technical problems, posting live updates and offering comprehensive post-mortem reports after each incident has concluded.

Still, though, NDAX’s Bilal Hammoud has noted an air of wariness amongst derivatives traders: not just those that were or are users of BitMEX, but everyone in the space.

“I think there’s a lot of caution now,” he said. “We saw Bitcoin whales get hurt that day.”

Indeed, “I think a lot more people are cautious about derivatives and high leveraged positions that typically contribute to volatility,” he continued. “People now know that even the big whales are not safe because they were unable to activate their insurance and let the system work as intended.”

“It taught people some lessons and I think the trends are going to move towards more regulated derivatives.”

However, Hammoud believes that this cautionary attitude may not be entirely negative for the cryptosphere: “I think it’s in a way good for Bitcoin, because due to the low liquidity we saw for the past couple of months, Bitcoin has been very stable,” he said. “You’re not seeing those crazy dumps or pumps controlled by a few individuals.”

Compliance and security on crypto derivatives exchanges are more important now than ever

While walking with caution may be the way of the day, it’s quite possible that this cautionary attitude may be a temporary phenomenon–as time goes on, and traders regain trust in the markets and in the platforms that they use. This is partially evidenced by the fact that crypto derivatives OI as a whole is nearing what it was before the COVID-19 economic crisis.

Until then, periods of volatility may continue to distribute and redistribute trading volumes and users across derivatives exchanges.

Jim Nevotti, President at Sterling Trading Tech, told Finance Mangates that “we’ve seen historic and truly unprecedented volatility and activity in both the crypto and traditional markets over the past few months with many firms underlying tech infrastructure effectively being stress tested daily. “

Jim Nevotti, President of Sterling Trading Tech.

“Fast and stable technology is crucial during periods of peak volatility in order to properly serve the institutional players entering the space post-Halving,” he said.

“The ability for professional traders to adapt quickly to sudden changes in both the traditional and crypto markets will continue to be critical as even seconds of downtime to switch platforms can have an impact during periods of extreme volatility.”

Therefore, at the end of the day, he who has the most reliable and compliant infrastructure–will win.

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