Cryptocurrency Trading

Localbitcoins User Pleads Guilty to Running Unlicensed Crypto Business — Faces Up to 5 Years in Prison

05/06/2022 by Idelto Editor

A cryptocurrency trader has been convicted in the U.S. for operating an unlicensed money-transmitting business using Localbitcoins and Paxful. He faces up to five years in federal prison and a possible $250,000 maximum fine.

Crypto Trader Pleads Guilty

The U.S. Department of Justice (DOJ) continues to take action against crypto traders using services such as Localbitcoins and Paxful to buy and sell cryptocurrencies as a business without a license. The latest such case involved Hien Ngoc Vo, a 49-year-old man from Seattle, Washington, who operated an unlicensed crypto business in Houston, Texas.

The DOJ announced Wednesday that Vo has pleaded guilty to running an unlicensed money transmitting business in the Houston area between March 16 and June 8, 2016. The Department of Justice detailed:

Vo used Paxful and Localbitcoins to buy and sell bitcoin … He profited from sales by collecting a percentage of the transactions which ranged from 5-30%.

Within the three months specified, Vo’s unlicensed business received and transmitted approximately $515,147.19 in BTC, the DOJ described, adding that customers paid him in cash, direct bank deposits, American Express credit cards as well as Amazon and generic gift cards.

However, “During the transactions, Vo did not ask clients for any form of identification nor the purpose for which they were purchasing the cryptocurrency,” the Justice Department noted.

Noting that Vo is permitted to remain on bond pending sentencing on Sept. 5, the DOJ concluded:

Vo faces up to five years in federal prison and a possible $250,000 maximum fine.

What do you think about this case? Let us know in the comments section below.

Bancolombia to Offer Crypto Trading in Financial Regulator’s Pilot Program

07/12/2021 by Idelto Editor

Bancolombia to Offer Crypto Trading in Colombian Regulator's Pilot Program

Bancolombia, Colombia’s largest bank, will be offering cryptocurrency trading to customers in a pilot program within a regulatory framework established by the country’s financial regulator, the Superintendencia Financiera de Colombia (SFC). Customers of the Colombian bank will be able to trade bitcoin, ether, litecoin, and bitcoin cash.

Bancolombia to Offer Cryptocurrency Trading to Customers in Regulatory Sandbox

Bancolombia, the largest bank in Colombia by total assets, is set to offer cryptocurrency trading to customers in partnership with cryptocurrency exchange Gemini, a New York trust company and custodian regulated by the New York State Department of Financial Services.

Cynthia Del Pozo Garcia, the exchange’s principal of strategy & corporate development, announced Monday that starting Dec. 14:

Gemini and Bancolombia will launch a partnership to provide an initial cohort of customers of the Colombian bank a seamless on- and off-ramp to trade bitcoin (BTC), ether (ETH), litecoin (LTC), and bitcoin cash (BCH) through the Gemini exchange.

The partnership with Bancolombia “also serves as an important step toward the strategic expansion” of its presence in Latin America, Gemini noted.

The exchange added:

Our partnership is part of a one-year pilot program run by Colombia’s financial regulator, the Superintendencia Financiera de Colombia (SFC), and will offer users seamless and secure access to crypto.

In January, the Superintendencia Financiera de Colombia announced that nine crypto initiatives will be allowed to test their products within the La Arenera regulatory sandbox.

Besides the Bancolombia and Gemini partnership, other partnerships in the sandbox are Banco de Bogotá and Bitso; Banco de Bogotá and Buda; Coltefinanciera and Obsidiam; Davivienda and Binance; Powwi and Binance; Coink and Banexcoin; Movii and Panda; and Movii and Bitpoint.

Do you think all banks should offer cryptocurrency trading? Let us know in the comments section below.

Botswana Does Not Have Regulatory Framework for Crypto — Central Bank

12/11/2021 by Idelto Editor

The Bank of Botswana (BOB) has said the country does not have a specific legal or regulatory framework pertaining to crypto assets. The bank does, however, warn residents investing in cryptocurrencies that they will have no legal recourse should they suffer financial losses.

Central Bank Responding to Public Inquiries

In its statement released on November 10, the central bank starts by acknowledging that local residents, just like their counterparts around the world, are engaged in cryptocurrency trading. In addition, the BOB also acknowledged that it has been receiving and responding to public and media inquiries on the subject.

Next, the statement shares some of the observations that were made by the central bank when it monitored developments in the increasing trade of crypto assets.

“There is no specific legal or regulatory framework pertaining to, or proscribing investment, in crypto assets, such as bitcoin in Botswana. Therefore, trading in bitcoin or similar decentralised technologies, also known as ‘cryptocurrency’, is akin to investment in any other intangible assets with attendant risks, inherent in such investments, such as complete loss of value or possible abuse of the technologies to the detriment of investors,” explained the BOB press statement.

While the BOB insists there will be no legal recourse for cryptocurrency investors that lose money to fraudulent schemes, the bank does urge investors to “undertake due diligence on the registration and legality of the business, as well as the nature of the business activity, including the manner of generation and source of returns.”

Cryptocurrency Not Real Currency

The central bank’s statement also suggests that the underlying activity of some of the companies engaged in crypto trading may relate to pyramid schemes and scams. As such, the BOB again warned investors engaged in cryptocurrency trading that they could be “participating in criminal activity.” This from the BOB’s standpoint means these crypto investors may be “liable for prosecution and/or exposure to a significant risk of financial and asset losses.”

In the meantime, the statement also makes known the BOB’s views concerning the classification of cryptocurrencies as currencies. According to the central bank, this reference to cryptocurrencies is misguided because these do not exhibit the key fundamental and complementary characteristics of money or currency such as being a stable store of value.

Cryptocurrencies also fail as a unit of account or a medium of exchange that is widely accepted, according to the BOB. More importantly, from the BOB’s perspective cryptocurrencies have no backing by the state or central bank with respect to legal tender status, transferability, exchange, or value.

What are your thoughts on this statement by the BOB? Tell us what you think in the comments section below.

Namibia Central Bank to Complete Crypto Study By April 2022 — Governor Says Current Laws Do not Permit Use of Digital Assets

25/07/2021 by Idelto Editor

The Bank of Namibia (BON) is on course to complete its study into cryptocurrencies by April 2022, the central bank governor, Johannes Gawaxab recently confirmed. The governor however reiterated that cryptocurrencies are not legal tender as there is currently no provision for digital currency use in the country’s laws.

Although Gawaxab did acknowledge that cryptocurrencies “are not a bad thing,” he still argues that attempts to approve the use of cryptocurrencies in Namibia will not be easy. In a video shared by the country’s state broadcaster, the governor explains why it’s almost impossible to formally introduce cryptocurrencies in that country. He explained:

As Common Monetary Area [CMA] four countries, Lesotho, Swaziland, South Africa and Namibia, we need to collectively look at the cryptocurrencies. We cannot look at [this] just as one country because this going to impact the [entire] CMA currency pool.

The Governor’s Crypto Warning

Namibia, as a member of CMA, is obliged to pursue foreign exchange and monetary policies that are consistent with those of the three other member countries. Therefore, as the Gawaxab indicates, Namibia will only move to incorporate cryptos when the CMA — whose policies are reportedly heavily influenced by the South African Reserve Bank — collectively agrees to this.

However, despite the lack of laws that govern the use of digital currencies, Gawaxab still warned Namibians of the dangers of cryptocurrency trading. Gawaxab’s warning marks the second time the BON has expressed concern over the proliferation of crypto-related scams. As reported by Bitcoin.com News in June 2021, the central bank has previously warned Namibians that it would not entertain complaints by victims of cryptocurrency-related scams.

What are your thoughts on BON’s remarks about cryptocurrencies? Tell us what you think in the comments section below.

Spain’s BBVA Opens Bitcoin Trading to All Private Banking Clients in Switzerland

18/06/2021 by Idelto Editor

Spain’s second-largest bank, BBVA, is opening up its bitcoin trading and custody service to all private banking clients in Switzerland in a few days. The bank has been testing the cryptocurrency service for six months. “The bitcoin management system is fully integrated” in the bank’s app, “where its performance can be viewed alongside that of the rest of the customers’ assets, funds, or investments.”

BBVA’s Fully Integrated Bitcoin Service

Spain’s Banco Bilbao Vizcaya Argentaria (BBVA) announced Friday that BBVA Switzerland will open a bitcoin trading and custody service to all private banking clients on June 21.

The bank has been testing this new cryptocurrency service with a selected group of clients for six months. BBVA explained:

For the time being, BBVA Switzerland’s offer includes bitcoin trading and custody services, with the aim of extending it to other cryptocurrencies. The entity will not offer advice on these types of investments.

BBVA explained that the new cryptocurrency service is only available in Switzerland for the time being because the country has “clear regulation and widespread adoption” of crypto assets.

Founded in 1857, BBVA “has a strong leadership position in the Spanish market, is the largest financial institution in Mexico, it has leading franchises in South America,” its website details.

At the end of March, the group had 719.7 billion euros in total assets, 79.8 million customers in more than 25 countries, 122,021 employees, 7,254 branches, and 30,747 ATMs. BBVA is Spain’s second-largest bank after Banco Santander. Its presence in Switzerland is through a 100% group-owned franchise.

The bank’s announcement details:

One of the most important attractions of BBVA Switzerland’s offer is that the bitcoin management system is fully integrated in its app, where its performance can be viewed alongside that of the rest of the customers’ assets, funds or investments.

This service “allows investing and combining traditional and digital financial assets in the same investment portfolio,” the bank noted, adding that it helps clients “in terms of simplicity when it comes to trading, account statements, tax returns, etc.”

BBVA further stated that “Through the customer’s personalized digital wallet, bitcoins can be converted into euros or any other current currency, and vice versa, automatically, without delays and without the illiquidity that affects other digital wallets or independent brokers.”

Alfonso Gómez, CEO of BBVA Switzerland, commented: “We are bringing the quality of banking service to the fledgling world of crypto assets. With this innovative offer, BBVA positions itself as a benchmark institution in the adoption of blockchain technology.” He revealed:

Over the coming months, we will continue to enhance and expand the digital asset offering.

What do you think about BBVA’s bitcoin service? Let us know in the comments section below.