The reactions from the crypto community to Facebook’s Libra project have been a full-blown welcome party, compared to those of the first European representatives which have spoken today.
It doesn’t appears casual that the unveiling of Libra’s whitepaper and website took place during European, Middle Eastern, African and Asian working hours. Consequently, some of the first reactions to arrive came from politicians from the European Union.
According to reports by Bloomberg, French Finance Minister Bruno Le Maire was the first highlighted public representative to speak about Libra. On a radio interview, he said that there is no way it will be seen as a sovereign currency, stating that “it can’t and it must not happen”.
On the meanwhile, the europarlamentarian Markus Ferber, whose party CSU forms part of the governing coalition in Germany, called for a high regulatory alert towards Facebook for its reported attempts to become a “shadow bank”. Ferber also called against a sort of “regulatory nirvana” which, in his opinion, forms the environment of Facebook and other multinational corporations.
With countries such as China and India having already taken big steps to trouble and ban the use of alternative currencies by their citizens, it seems as if Facebook’s Libra will have to deal with lifting many regulatory hurdles.
Presidential candidate Andrew Yang vows to promote crypto legislation
“In order to regulate technology effectively, our government needs to understand it. It’s embarrassing to see the ignorance some members of Congress display when talking about technology, and anyone who watched Congress question Mark Zuckerberg is well aware of this”, said the 2020 US Presidential Candidate Andrew Yang.
In his latest blog post titled, ‘Regulating Technology Firms in the 21st Century’, Yang wrote that the government needs to be forward-thinking and informed on the latest technological developments to keep pace with innovation. He added that without a base level of understanding, it’s unreasonable to expect proper regulation of major tech firms or the drafting of legislation that addresses the critical technical issues.
According to the Democratic Candidate, legislators are blind to, or completely unprepared to comprehend technical aspects of the cryptocurrency industry and due to the unregulated nature, the marketplace has seen levels of fraud. He further said,
” Other countries, which are ahead of us on regulation, are leading in this new marketplace and dictating the rules that we’ll need to follow once we catch up… Cryptocurrencies and digital assets have quickly grown to represent a large amount of value and economic activity, outstripping government’s response. A national framework for regulating these assets has failed to emerge, with several federal agencies claiming conflicting jurisdiction.”
Yang also emphasized that the market is being outpaced by innovation. If he wins the 2020 Presidential Election, Yang promised to promote legislation that provides clarity on cryptocurrency and digital asset market space by defining a ‘token’ and distinguishing ‘security’ from it. Yang affirmed that he will define which federal agencies have regulatory power over crypto/digital assets space and provide protection for the consumers. Additionally, tax implications of owning, selling, and trading digital assets will also be clarified.
Craig Wright Claimed He Would Reveal a Critical Bug in Bitcoin and Litecoin — Then Didn’t
November 15, 2019, has come to pass, and yet another claim from Craig Wright has proven to be nothing more than conjecture.
One year ago, Wright claimed in a tweet that after a year’s time, he would release details on an alleged unrepairable flaw in both Bitcoin (BTC) and Litecoin (LTC) that essentially renders both coins dead on their feet.
According to the so-called ‘responsible disclosure’ tweet, the bug has something to do with the segregated witness (SegWit) upgrade that was rolled out for both Bitcoin and Litecoin in 2017. Wright also mentioned that both cryptocurrencies would be “shown to have no utility” and “are dead” before signing off with “Dead coin walking.”
However, despite the warning that Bitcoin and Litecoin would be rendered broken, both Bitcoin and Litecoin appear to be running just fine. The only noteworthy thing that did happen today was a flash-fill of the mempool, which resulted in temporarily higher transaction fees and longer waiting periods for unconfirmed transactions on the Bitcoin blockchain. Fortunately, this was only a temporary issue that has already resolved itself, according to Jochen-Hoenicke.de’s real-time mempool charts.
On the more practical side of things, Bitcoin did lose some ground today as its market capitalization fell to just over $153 billion, while its market dominance still hovers around 66%. Similarly, Litecoin is also suffering slight losses, losing just over 3% of its value amid a negative downturn for most cryptocurrency markets.
This isn’t the first time Wright has predicted the demise of Bitcoin and various other cryptocurrencies. Back in May 2019, he created a blog post where he said, “When BTC disappears, it will not disappear slowly, it will disappear in moments.” Similarly, in November 2018 Wright could be seen threatening to crash the Bitcoin market, whereas just days prior, he had threatened Roger Ver because he supported the Bitcoin Cash (formerly Bitcoin ABC) side of the November 2018 Bitcoin Cash fork.
Since Craig Wright claims to be sitting on a nest of over 800,000 BTC, one might think that destroying Bitcoin’s credibility and value would be a relatively simple task. After all, he would only need to dump a fraction of his stash to completely crash the Bitcoin market.
However, since it is quite clear that Wright isn’t actually Satoshi Nakamoto, this almost certainly won’t happen. Until then, Wright’s threats against Bitcoin are likely to remain exactly that — just threats.
IRS is Investigating Cryptocurrency ATMs and Kiosks
The Internal Revenue Service (IRS), which is the revenue service wing of the U.S. government, recently announced that it would be launching investigations into cryptocurrency ATMs and kiosks regarding tax evasion matters. In addition, it would also look into whether they were being used to aid in the purchase of controlled substances, money laundering, and other similar crimes.
Cryptocurrency kiosks and ATMs are today a popular method used by crypto enthusiasts to purchase and sell digital assets. According to a recent interview, their uptake in the United States has been on the rise in the past few months, which may explain the concerns raised by the IRS. The IRS is concerned as they become more popular and accessible, more people will start to use them as a means of tax evasion.
Concerns Raised by the IRS
For the IRS, the main issue lies in the fact that any person can walk up to any one of the crypto kiosks or ATMs and receive BTC after depositing hard cash. Naturally, the Internal Revenue Service would want to get to know such users and their intentions with the crypto. The authorities would also investigate where they got the money to purchase digital assets.
Nonetheless, their interest is not only in the users but in the owners as well. They would like to know the people who have been making money by availing the crypto ATMs and kiosks to the public for use.
According to the IRS:
“The device owners are required to abide by the same know-your-customer, anti-money laundering regulations, and we believe some have varying levels of adherence to those regulations.”
Law Enforcement Agencies
John Fort, the Investigation Chief at the IRS opines many other agencies have raised the same concerns. Fort added that together with his team, they have already reached out to other agencies in the law enforcement sector that would like to have such information.
He further stated that some agencies, together with their allies had already started monitoring the devices to check whether they were being used for illegal activities. Currently, no case has been filed yet. However, Fort was also quick to point out that their inventory has some ongoing cases.
The IRS official stated that there was a possibility that the open cases may or may not be directly linked to various bank accounts. While noting that there is an increase in the use of these devices, he admitted that this was not a simple solution. If not carefully attended to, it could end up forcing people to start using foreign exchanges.