The FBI Might Need You to Help them Investigate the BitConnect Case

The FBI Might Need You to Help them Investigate the BitConnect Case

According to a notice published February 20, 2019, the Federal Bureau of Investigation (FBI) is seeking a response from investors who lost money due to the now-defunct cryptocurrency exchange platform BitConnect.

The FBI Wants You

The controversy surrounding the digital token issued by BitConnect is something the industry would want to erase from its short history.

Per the notice published by the federal agency, people who were financially invested in the BitConnect coin (BCC) can provide their inputs to the FBI by answering a few questions. The FBI hopes to gather key information to pursue its investigation in the multi-billion-dollar fraud.

(Source: bizfluent)

In its official notice, the FBI stated that responses provided by users would be “useful” in the federal assessment of the matter. Depending on the response submitted, the FBI may try to contact the respondent to collect additional information.

The notice reads in part:

“BitConnect guaranteed investors up to a 10 percent total return per month on their investment, following a tiered-investment system based on the sum of an investor’s initial deposit. The entire market for BCC crashed in late January 2018, after two U.S. state-level securities regulators issued public letters warning investors of the Ponzi-type nature of BitConnect.”

BitConnect Story Rewind

BitConnect was an open-source cryptocurrency exchange platform founded in February 2016. At its peak, the exchange boasted a market cap of more than $2.5 billion.

However, the exchange didn’t quite hit the right chord with the regulators, as on January 4, 2018, it received a cease-and-desist order from the state of Texas. The troubled exchange received another cease-and-desist order from the state of North Carolina on January 9, 2018, which prohibited it from going ahead with its scheduled BCC token sale.

Unsurprisingly, the token’s value took a deep dive in the market as a result of the aforementioned legal injunctions. The BCC coin fell from over $400 to less than $20 in early 2018.

The dramatic free fall in the token’s value took investors by surprise as they saw their money vanish in thin air. Soon, the exchange was sued by a number of angry investors seeking restitution for the lost money. Seeing their entire capital erode in a matter of days, the exchange closed in January 2018.

The magnitude of the BitConnect fiasco can be measured by a couple of instances that took place in India and Australia.

BTCManager reported on June 3, 2018, how the BitConnect promoters were attacked by enraged investors in India.

Similarly, on January 9, 2019, reports emerged how the Australian Securities and Investments Commission (ASIC) requested the Federal Court to place a travel ban on an Australian BitConnect promoter.

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Derivatives Giant Fidelity Investments Receives and Passes on the Lightning Torch

Financial derivatives giant Fidelity Investments received and passed on the Lightning Torch, as revealed by tweet by the company sent on Feb. 22.

Just like the Olympic torch, the Lightning Torch is being passed between members of the Lightning Network community. The trend first reportedly started when Twitter user and Bitcoin (BTC) enthusiast Hodlonaut sent 10,000 satoshis (the smallest, indivisible fractions of a Bitcoin) to another Lightning user, and the user added another 10,000 satoshis and passed it on.

Fidelity passed the torch to the Harvard School Blockchain & Crypto Club in the wake of its upcoming dedicated conference. Previously, the torch famously has been held by the 88-year-old grandma of a crypto enthusiast as well as by Twitter CEO Jack Dorsey, who held it at the beginning of the current month.

As Cointelegraph recently reported, Dorsey, who is also the founder and CEO of United States-based Bitcoin-supporting payments service Square, said that rolling out the Lightning Network on Square’s Cash App is a question of “when, not if.”

The Lightning Network is a payment protocol that works as a second layer on top of a blockchain. A large number of those in the cryptocurrency community have suggested the Lightning Network as a fix to Bitcoin’s scaling problem.

Fidelity Investments manages over $7.2 trillion in client assets. In October last year, the investment giant announced the launch of a new company, Fidelity Digital Asset Services, targeting institutional crypto assets investors.

In the Daily: Token Delistings, Paybear Is Savvy, Revolut and Hackers

In the Daily: Token Delistings, Paybear Is Savvy, Revolut and Hackers

In this edition of The Daily, crypto exchange Upbit is preparing to delist four tokens, while several projects have accused Kucoin of suggesting market making services to pump their volume and avoid delisting. Also, crypto payment processor Paybear has rebranded to Savvy, and British online bank Revolut is hiring hackers to test its systems.

Also read: Quadrigacx Transfer, Tokenized Bonds, Beam Investment, Rakuten Pay

Upbit Marks Tokens for Delisting

South Korean crypto exchange Upbit has added several tokens – blocktix (TIX), salus (SLS), salt (SALT) and wings (WINGS) – to a category of digital assets that can be delisted in the future. The trading platform provided the reasons for its decision in an announcement published on its website.

The company explained for example that Blocktix, a project to build an event ticket sales platform, has not launched any working products for a long time and is not developing. Similar conclusions have been drawn regarding Wings Dao, a crypto price forecast service, and Salus, a proof of stake coin whose low liquidity exposes it to manipulation.

The salt token has been added to the list due to an inspection launched by the U.S. Securities and Exchange Commission. SEC is investigating the connection between Salt Landing Holdings Inc. and Shapeshift CEO Erik Voorhees, as well as the possibility of fraud in the distribution of the tokens during the 2017 initial coin offering.

Upbit now expects to receive clarifications from the projects and if they are not satisfactory, the exchange will proceed with the delisting of their tokens.

In the Daily: Token Delistings, Paybear Is Savvy, Revolut and Hackers

Kucoin Accused of Blackmailing Coin Projects

Four token projects have reportedly been asked by crypto exchange Kucoin to pay up to $180,000 in fees for volume-boosting services. After their daily trading volumes fell into the bottom 18 percent on the Hong Kong-based platform, Jibrel, Encrypgen, Publica, and Unikrn were told there’s a quick way to recovery, The Block reported, quoting different sources.

Talal Tabbaa, COO of Jibrel, told the outlet that the startup was advised in an email how to improve the volume of its crypto to avoid the risk of being delisted. “Then they recommended market making firms that would help us reach the minimum daily volumes they set for projects. I was honestly shocked at the requests they were making,” he added.

The market makers were supposed to help the project reach a minimum trading volume and remain listed on the exchange. Tabbaa believes that was a proposal to conduct wash trading. “I’m 100% sure. Whenever there’s a guarantee, you know there’s something wrong,” he noted. His company turned down the $180,000 offer.

The team of another project, Encrypgen, was also told how to increase its trading volume through a marketing campaign promoted by Kucoin and allegedly offered at a price of $90,000 in BTC. After the CEO of the company David Koepsell refused to pay for the service, Kucoin eventually delisted its token.

Payment Processor Paybear Rebrands to Savvy

Crypto payment processor Paybear, a company based in the Swiss canton of Zug, has changed its brand name to Savvy. The startup claims to be working with over 3,000 merchants. It now offers an updated version of its core merchant API called Savvy Merchants and a new Savvy Wallet with support for multiple cryptocurrencies. The company, which also says it has already processed over $10 million worth of transactions, is currently expanding its offering into the consumer market. That strategy is part of Savvy’s plans to invest into other areas that demonstrate how cryptocurrencies can be spent and used.

Revolut to Hire Hackers

U.K.-based fintech startup Revolut is planning to improve its cyber security with the help of a team of hackers who will be tasked with breaking into its systems. The plan is to expose potential weaknesses in order to prevent real cyberattacks, data breaches and fraud, The Independent reported.

In the Daily: Token Delistings, Paybear Is Savvy, Revolut and Hackers

According to Paul Heffernan, the online bank’s chief information security officer, the team consisting of five computer experts will monitor security operations and browse the dark web for potential threats. “One of the responsibilities of this team is to come in and just hack all of our own systems for us,” Heffernan explained. The specialists will be hired in the next three months.

What are your thoughts on today’s news tidbits? Tell us in the comments section.

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At there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

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Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Bulgaria, which sometimes finds itself at the forefront of advances it cannot easily afford. Quoting Hitchens, he says: ”Being a writer is what I am, rather than what I do.“ International politics and economics are two other sources of inspiration.

Blockchain Company CasperLabs Appoints Ethereum Researcher Vlad Zamfir as Lead Architect

Blockchain protocol research and development company CasperLabs has appointed Ethereum Foundation researcher Vlad Zamfir as lead consensus protocol architect, a Medium post by the company reveals on Feb. 22.

CasperLabs is a company trying to develop the so-called correct-by-construction Casper proof-of-stake (PoS) Ethereum (ETH) consensus algorithm. In a PoS cryptocurrency, block creators are chosen by random selection with the consideration of the user’s wealth in the network and, sometimes, the age of his assets that is often referred to as the “coin age.”

Vlad Zamfir infamously stated in March 2017 that Ethereum is not safe, scalable and is an immature technology, while urging the community to not rely on it for critical applications when it’s avoidable.

As Cointelegraph reported in December last year, Ethereum co-founder Vitalik Buterin declared that future blockchains with sharding based on PoS will be “thousands of times more efficient.” The higher efficiency, according to Buterin, will make many new decentralized applications (DApps) practical, since the fees would only be a fraction of their current prices.

In the CasperLabs Medium post, Zamfir stated that he believes PoS consensus protocols that are more secure than the blockchains in existence are possible, adding:

“However, I am not sure if the Bitcoin and Ethereum blockchain communities are going to be able to upgrade their protocols.”

In May 2018, a Cointelegraph analysis explained that Casper is expected to help solve excessive energy consumption and “issues with equal access to mining hardware, mining pool centralization, and an emerging market of ASICs.” Alongside sharding, PoS is intended to be Ethereum’s on-chain scaling solution.

Ethereum (ETH) Long-term Price Analysis –– February 23


Ethereum (ETH) Long-term Price Analysis –– February 23


ETHUSD Long-term Trend – Ranging

  • Distribution territories: $180, $200, $220
  • Accumulation territories: $100, $80, $60

Ethereum’s price has recently entered a range after seeing a notable uptrend between February 17 and 18. The cryptocurrency has been hovering around the $140 mark.

Ethereum, ETHUSD, Cryptocompare chartEthereum Chart by TradingView

The cryptocurrency is seemingly seeing the same price action it saw between January 3 and 9. The 14-day SMA has surpassed the 50-day SMA, while the price line is still above both. The Stochastic Oscillators are consolidating within the overbought zone, which indicates the bulls’ pressure hasn’t been weakened.

ETH’s price has been rebounding through a gradual process, and to maintain its current movement it needs to gain momentum between the $140 and $120 marks. Traders are advised to wait for a proper buying set up.

The views and opinions expressed here do not reflect that of and do not constitute financial advice. Always do your own research.

How to Pay Employees With Bitcoin in 2019

pay send bitcoin pay employees in bitcoin How To

How to Pay Employees With Bitcoin in 2019

If employers want to compensate workers in an unconventional way, they may think about doing so with bitcoin. It’s an option some companies have pursued, but it’s not always as straightforward as some enterprises may assume.

Work With a Specialty Company or Accountant

Bitwage is a company that has specialized in the emerging desire that employers have to pay their workers in bitcoin.

Taking this approach does not require employers to go through an onboarding process, and employees get their wages in less than 48 hours no matter where they are. The company made headlines recently by adding the option for U.S.-based employers who receive W-2s to opt for getting paid in bitcoin.

The Future of the Digital Wallet

As of 2017, about 200 employers used Bitwage, and approximately 95 percent of those used the service to pay international workers.

BitPay is another company that got into the bitcoin payroll realm. In 2014, it launched an application programming interface (API) that allowed employers to pay people in bitcoin. However, the current version of the BitPay website doesn’t mention that offering anymore. That likely means Bitwage is the only option for now.

Alternatively, some companies that set up the possibility for people to get paid in bitcoin consulted with accountants who knew the cryptocurrency landscape and helped employers navigate it. If employers are looking for the most straightforward way to go about this type of payment, working with a company like Bitwage is the best bet.

Potential Reasons to Hold Off for Now

Although the option to pay people in bitcoin exists, some caveats could make them want to stick with traditional forms of payment. For example, if companies have remote workers in other countries, the tax implications for bitcoin vary depending on where a person pays taxes.

Also, as the above section shows, assistance is still limited if employers have questions about how to get started. Some businesses may decide that trying to pay their employees with bitcoin 00 is more trouble than it’s worth.

That’s an especially likely conclusion to make if a company leader doesn’t believe there is sufficient interest in bitcoin payments. At Coinbase, for example, people can choose that payment type, but less than half participate.

When employers want to give their workers other options for getting paid, setting up an employee share ownership plan (ESOP) could be a more viable choice. It offers several advantages, including letting employees own stakes in a company through a trust fund and having the ownership amount go up as seniority grows.

Student loan payoffs are another popular but unconventional way to compensate employees. The perk could be especially attractive if loan debt is a significant source of stress for workers.

Which Companies Have Paid in Bitcoin?

It should be evident by now that idea of getting paid for work in bitcoin is still an emerging option that many companies are still only exploring. However, some pioneering enterprises have moved forward by offering it to their employees.

One is GMO Internet Group. It’s a Japan-based internet company that announced the option for people to get their wages in bitcoin would start as of February 2018.

There’s also Earn, which gives gig economy workers the chance to get paid in bitcoin for completing tasks. Working for Bitcoins is a similar site that helps freelancers find clients that will pay them in bitcoin.

Still Not a Mainstream Choice

When employers want to pay their workers with bitcoin, a company such as Bitwage will likely be the most seamless way to do it.

Although some companies let people receive bitcoin payments, the option is still not common in the workplace.

Enterprises should keep that in mind as they consider whether now is a good time to investigate paying in bitcoin or if they should wait to see if a larger adoption rate occurs.

[Note: This guest article was written by Kayla Matthews.]

Also read:

Paying Salaries in Bitcoin is Becoming Trendy

What do you think about getting paid in bitcoin? Share your thoughts below!

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Thailand Greenlights Japanese Exchange to Operate 4 Crypto Businesses

Thailand Greenlights Japanese Exchange to Operate 4 Crypto Businesses

The Thai government has issued four licenses to a new crypto exchange. Prior to this, only existing exchanges that were in business before the country’s crypto regulation took effect were approved. The first licensed new exchange in Thailand is a subsidiary of a regulated Japanese exchange, Bitpoint.

Also read: SEC Chair Explains Key Upgrades Needed for Bitcoin ETF Approval

New Crypto Exchange Licensed

Japanese corporation Remixpoint Inc. announced on Thursday that its Thai subsidiary, Bitherb Co. Ltd., has obtained four different crypto-related licenses to operate in Thailand. The announcement concurs with the information posted on the website of the Thai Securities and Exchange Commission (SEC). Remixpoint also operates Bitpoint Japan, one of 17 government-approved Japanese exchanges.

With the new licenses, Bitherb can legally operate as a crypto asset exchange, a digital token exchange, a crypto asset broker, and a digital token broker. Currently, it is the only company approved to operate as a digital token broker in the country.

Thailand Greenlights Japanese Exchange to Operate 4 Cryptocurrency Businesses

Bitherb is a crypto exchange and management company co-founded by Bitpoint Japan and Asia Herb Association Bangkok Co. Ltd. The latter owns 60.5552 percent of Bitherb while the former owns 39.4446 percent. The president of Bitpoint Japan, Oda Genki, also serves as an officer of the new Thai entity. Bitpoint also operates in other countries including Hong Kong, South Korea, Taiwan, Malaysia, and Panama.

Japanese Exchange Approved to Operate 4 Cryptocurrency Businesses in Thailand

Four Licenses

The Thai SEC’s website lists all companies that have been approved to operate crypto-related businesses in Thailand. The country enacted its crypto regulation in May and subsequently approved four companies that had been in business before the regulation took effect. Two companies were rejected.

Licenses have been granted to companies in five categories to date: crypto asset exchanges, digital token exchanges, crypto asset brokers, digital token brokers, and crypto asset dealers. Four companies have been approved to operate both crypto asset and digital token exchanges: Bitcoin Co. Ltd., Bitkub Online Co. Ltd., Satang Corp. Co. Ltd. and now Bitherb. Licenses to operate as a crypto asset broker have been granted to Coins Th. Co. Ltd. and Bitherb. Meanwhile, only Bitherb has been approved as a digital token broker and only Coins Th has been approved as a crypto asset dealer.

Thailand Greenlights Japanese Exchange to Operate 4 Cryptocurrency Businesses
Licenses Bitherb has obtained from the Thail SEC and the finance ministry.

The Thai SEC launched a website last month called “Siang Soong” which means “high-risk” to help educate the general public about cryptocurrencies and tokens. Rapee Sucharitakul, Secretary-General of the Thai SEC, said that “Digital assets are useful as funding tools … and as a medium of exchange.” However, he added that it is a high-risk asset suited for people with the knowledge and understanding of the technology and not necessarily for general investors.

What do you think of Bitpoint getting four different crypto licenses to operate in Thailand? Do you think many more exchanges will follow suit? Let us know in the comments section below.

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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Canadian Banks Wary of QuadrigaCX Assets’ Origins, Cite Money Laundering Concerns

Canadian banks have showed hesitation concerning the management of insolvent cryptocurrency exchange QuadrigaCX’s assets, national public broadcaster CBC reports on Feb. 22.

QuadrigaCX has faced financial difficulty following the sudden death of its founder Gerry Cotten, who was the allegedly only one with access to the exchange’s cold wallets.

As Cointelegraph reported earlier this week, QuadrigaCX has sent its remaining crypto assets from its hot wallets to Big Four auditing firm Ernst & Young, the court-appointed monitor overseeing the case. During Friday’s court hearing, lawyers for the Bank of Montreal and the auditing firm reportedly said that the banks are uncomfortable managing the funds, citing the uncertainty of their origin.

Elizabeth Pillon, a lawyer representing Ernst and Young, is quoted by CBC saying that she doesn’t blame the banks for their hesitation since there are allegedly money laundering issues. Pillon also reportedly noted:

“The monitor has serious concerns about finding another institution to hold these funds.”

According to the article, at the end of Friday’s hearing, Justice Michael Wood of the Nova Scotia Supreme Court issued an order that will eventually see the QuadrigaCX money deposited in a Royal Bank account.

Ernst and Young will then use these funds to pay for the ongoing court proceedings, and “the money could also be used to partially compensate 115,000 users of the QuadrigaCX exchange who are owed $260 million” in crypto and cash, CBC notes.

The unwillingness to hold QuadrigaCX’s funds also manifested during the time of its operations, when the exchange was unable to get a bank account because of banks’ reluctance and instead turned to third-party payment processors.

As Cointelegraph reported in November last year, when the Canadian Imperial Bank of Commerce froze the accounts of the payment processor, the court ruled in favor of the bank, citing concerns over identifying the identities of the funds’ owners.

Cryptocurrency Business Use “Reverse Merger” to Enter Mainstream Markets

Cryptocurrency Business Use “Reverse Merger” to Enter Mainstream Markets

Staying true to their creative nature, several cryptocurrency businesses, especially the exchange platforms are following the “reverse merger” approach to move close to mainstream markets, reports South China Morning Post, February 22, 2019.

Taking the Back-Door Entry

Leave it to the brains in the crypto industry to circumvent any obstacle thrown their way.

An increasing number of cryptocurrency exchanges are inching closer to mainstream financial markets by purchasing listed companies and then aiming to raise firms by camouflaging as a veteran of the traditional financial services industry they once despised.

The latest example of the aforementioned approach is February 11, 2019, deal which saw the US-based crypto broker-dealer Voyager Digital sneak its way into the Toronto Venture Exchange after it acquired a controlling stake in a mineral exploration company called UC Resources.

A major upside to this “back door” approach is that it doesn’t require the companies to go through the excruciating and tiring process of a full initial public offer (IPO).

Fei Ding’an, managing partner at Ledger Capital, a digital asset investment firm said:

“Many [cryptocurrency] exchanges have put a lot of strategic effort into trying to legitimize their operations and their reputations, and for some there’s an assumption that having some exposure to the traditional public market will help.”

In fact, Voyager Digital isn’t the first firm to follow the relatively less straining route to mainstream markets.

In January 2019, Star Xu led OKC Holdings acquired 60.5 percent stake in a Hong Kong-listed construction firm named LEAP Holdings for $61.69 million.

Regaining the Lost Confidence

Exposure to mainstream markets could help re-establish the confidence lost in cryptocurrency businesses in recent times.

The industry, especially the cryptocurrency exchanges, have had their goodwill tarnished continually due to unfortunate events like hack attacks, money laundering, and security mechanism failures.

BTCManager reported on September 19, 2018, how the New York Attorney General Barbara Underwood’s office slammed cryptocurrency exchanges like Binance,, and Kraken for running their operations without obtaining the mandatory licenses and breaking the city’s digital currency regulations.

On a more recent note, the dramatic story surrounding Canada’s Quadriga CX has again highlighted the need for a robust and secure exchange platform that puts customer’s safety at the top of their priority list.

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