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Finland Looking for Brokers to Sell Seized Bitcoins Worth $80 Million

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Finland Looking for Broker to Sell Seized Bitcoins Worth $80 Million

Finland’s customs authority is looking for brokers to sell 1,981 bitcoins seized in drug cases. The coins are currently worth nearly $80 million.

  • Finland’s customs authority announced Thursday that it is seeking brokers to sell 1,981 bitcoins seized in drug busts, Bloomberg reported, noting that the coins were forfeited to the state by court order.
  • At the time of writing, the bitcoin stash is worth $78.75 million.
  • Most of the seized coins were accumulated in raids before 2018. The Finnish State Treasury set out guidelines for handling crypto assets that year. It prohibited authorities from storing cryptocurrencies at exchanges, requiring them to keep the coins offline.
  • Pekka Pylkkanen, Finnish Customs’ director of financial management, explained that the authorities want a permanent solution to “safely and reliably” sell cryptocurrencies forfeited to the state coffers in the future. The customs agency described in a statement:

The main aim of Finnish Customs is to make sure the cryptocurrencies are sold in a secure way, preventing further money laundering and criminal activities.

  • Finnish Customs said that it could sign an agreement with as many as three brokers for the sale of seized BTC, the publication conveyed, adding that the agency anticipates “more cryptocurrency seizures.”

What do you think about Finland looking for brokers to help sell seized bitcoin? Let us know in the comments section below.

Elizabeth Warren Is Trying To Limit Financial Inclusion

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Despite groundbreaking work occurring within Bitcoin, our “progressive” leaders continue to make backwards progress.

If you’re a member of the Bitcoin community, whether self-proclaimed or working with an entity such as Bitcoin Magazine, you should be well-experienced with the chaotic nature of the narratives and politics around Bitcoin — and the sweepingly ignorant inclusion with “cryptocurrencies” in general.

Bitcoin has become the favorite target for champions of Environmental, Social, and Corporate Governance (ESG) narratives, namely Bitcoin’s energy use and environmental impact. Now, Nic Carter has quashed that conversation. Swiftly and effectively, Nic has done an exemplary job at defending the energy sector and miners with his silver tongue and numerically-inclined mind, especially with his piece “The Frustrating, Maddening, All-Consuming Bitcoin Energy Debate.”

Politicians had seemingly not learned via observation as institutional investors got a flood of aggressive rebuttals by bitcoiners — both investors and politicians alike — that were backed by more fact and data than any of the detractors had been capable of providing. Yet now Senator Elizabeth Warren is confident enough to think that she can succeed at condemning Bitcoin where the rest have failed. Well, she’s wrong.

Now, let me clarify. This is not a piece that has the intent of tarnishing Senator Warren’s career or reputation or what-have-you. I don’t care about the senator, personally. However, I want there to be some form of rebuttal to the flood of narratives and claims against Bitcoin that are literally, factually incorrect. The best way to provide some correction to Senator Warren and her peers is to address these claims directly. I’m not a fan of passive-aggressive responses when it comes to education. I prefer to face the challenges head-on.

Firstly, Senator Warren made the already infamous claim that Bitcoin “puts the system at the whims of some shadowy faceless group of super coders and miners, which doesn’t sound better to me.” So how, exactly, would we describe our current banking system? Arguably in a similar manner, just without the “super coders” aspect, considering that much of the banking and financial system does not operate on any level of public transparency, especially when compared to the Bitcoin network.

Senator Warren, your defense of the legacy financial system is a direct affront to financial inclusion, individual property rights and freedoms. You cannot support a system that provides such strong barriers to entry that 6% of our own citizens don’t have bank accounts. That’s 14 million Americans! And, on top of that, we have rules that state that you literally have to be rich in order to invest in assets that are likely to appreciate in value. Our own rules state that you can’t allow your money to earn a significant yield unless you are already rich. How absolutely asinine is this? This directly excludes the vast majority of the U.S. populace.

I personally don’t like how Senator Warren aimed to significantly diminish the fantastic work that the Bitcoin core developers have done throughout Bitcoin’s 13-year life by referring to them as “shadowy super coders.” How many networks can tout a 99.98% uptime while handling consistent growth and implementing upgrades without having to take the network down? Oh, and you know, all while securing nearly $750 billion worth of users’ savings, investments, daily income and spending (shout out to El Salvador). The fact that many of these developers prefer to operate under pseudonyms and avatars simply points to how radical the legacy financial system is in defending the hill it is so intent to die upon. These folks are so concerned with an aggressive riposte from the incumbents that they lean on anonymity while working on financial inclusion for the world.

To go a bit further, thanks to the Bitcoin network’s simplistic functioning at the base layer, an entity by the name of Strike, captained by Bitcoin’s Champion of the People, Jack Mallers, has now brought a functionality to money transmission that will shift paradigms on all types of trade the world over. Instantaneous money transmission, globally, for virtually zero fees. You can send money from anywhere in the United States to any location in the world for a mere pittance. Prepare the viking funeral for companies like Western Union who would’ve charged 30% in fees to do this. Not to mention dragged their big, fat, fiat clown-feet sending that money in a “timely manner.”

Even excluding the revolutionary work that Jack and Strike are doing, the amount of transparent data that is available on the Bitcoin network — its transactions, the value of those transactions, the numbers of active users, etc. — is absolutely unparalleled.

Ask any one of the cancerous number of banks that exist across the country to provide this kind of data to you and they’ll laugh you right out of the building while trying to convince you to dig your own grave in debt.

Secondly, Bitcoin promotes financial inclusion. Banks do not. I’ve already touched on the inclusion via remittances and the ease-of-use of apps like Strike. But if anyone wants to get some bitcoin, they can buy it from an individual that’s willing to sell (peer-to-peer), which can be done over the Lightning Network with Strike or via services like LocalBitcoins — no bank account necessary. Bitcoin promotes saving and even revives saving as a wealth accumulation strategy. Inflationary monetary policy does not.

Cue The Fiat Champ: Jerome “Jay Pow” Powell

Watch: Fed Chair Jerome Powell on YouTube.

Jay. Good ‘ol Jerome Powell. My man. Where would bitcoin be if not for your flaccid response to an economic climate that is your job to reel-in? You do realize that as you endlessly print money for the sake of keeping zombie corporations afloat you end up stifling innovation? Were Blockbuster allowed to receive mulligan-money do you think Netflix would have been allowed to prosper as it did? How many more jobs resulted from Netflix upheaving Blockbuster? Oh, and how many more patients got served thanks to Blockbuster liquidating locations into the hands of Jason Williams (founder and former President & CEO of FastMed)? The inflation stimulated by the Federal Reserve has utterly dissolved that process of creative destruction, resulting in what we now know as “stagflation.” Where nothing improves, because everyone is incentivized to just sit, play nice and not cause a ruckus.

The American Dream was sold as: work hard, work towards your dreams and passions, save money, accumulate wealth, buy your own home and raise a family. The Federal Reserve has systematically destroyed the American dream via a middleman hack by inserting itself between the Constitutional dollar and the American citizen. Thanks to the antics of this central bank (that hasn’t been audited by an external entity since the 1950s, by the way), the ungodly amount of inflation that has occurred has caused average cost of living, home prices and investment asset valuations to break free from Earth’s gravity while average income has remained flat.

So, Senator Warren, I invite you to engage in an intellectually honest conversation around Bitcoin and its value propositions. There are many. And I am not expecting the learning and understanding to come easy; there are a multitude of complex mechanisms at play here. Bitcoin makes plays on SHA-256 encryption, Metcalfe’s Law, Maslow’s Hierarchy, the Kardashev Scale, Pareto Distribution (shoutout to Aaron S), the Law of Diminishing Returns, the Law of Big Numbers and the list goes on and on. Bitcoin is blurring the lines between technology and asset, physical and digital, “real money” and “magic internet money.”

All of the Bitcoin Bulls that stand before you today started out once as Bitcoin critics. In my opinion you can’t become a bull without questioning every single aspect of Bitcoin and its operations.

To that effect, I think I can speak for all Bitcoiners in saying: bring on the challenge. If you’re willing and capable of engaging in honest dialogue, we have individuals that will answer any and all questions you have, professionally and respectfully. On top of that, we also have a library of eloquent writers that have put together a number of tomes that are well worth the read.

For your ease, I have provided a brief list that I personally recommend:

  • “The New Confessions of an Economic Hitman” by John Perkins
  • “The Psychology of Money” by Morgan Housel
  • “The Price of Tomorrow” by Jeff Booth
  • “Layered Money” by Nik Bahtia
  • “Fed Up” by Danielle DiMartino Booth

So, all I ask is one thing: engage with us. There are many reasons why nearly 20% of Americans have entrusted their hard-earned cash with Bitcoin. It would behoove all to at least do your own research (DYOR) and at least start looking. Because I can promise you one thing: Bitcoin adoption is not about to slow down.

I am confident that you’ll come to a similar conclusion.

This is a guest post by Mike Hobart . Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.

What Caused This Mid-Cycle Bitcoin Price Correction

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Factors ranging from regulation in China to the Taproot protocol upgrade were driving bitcoin price charts to a decisive point for weeks.

The bitcoin price rallied last week, but the move did not come out of the blue. While some people attributed the spike in price to the fake news about Amazon planning to accept bitcoin, the charts had been signaling a move was coming, approaching a decisive point for weeks.

I attribute this mid-cycle correction to three dominant and simultaneous narratives that, before resolved, caused major uncertainty and price declines. These events affected sentiment in all segments of the bitcoin market — miners and retail, developers and high-net-worth individuals. Any single one of these narratives on their own could have caused a dip, but all three together combined to cause a major drag on price.

A New Chinese Ban On Mining

The plunge in mining hash rate resulting from the Chinese mining ban (highlighted in red above) turned the mining industry upside down. Miners were dramatically affected, already dealing with a global chip shortage, and then this news was added to their plate. Retail holders and traders were also affected by this development, being bombarded with negative headlines for weeks.

Hash rate (the cumulative computer speed at which miners search for the next block) peaked just prior to the ban, on May 9. I suspect that this is when miners in China began hearing rumors of what was to come. The official public statement from the Chinese Communist Party banning mining came on May 21. Over the next four weeks, hash rate kept falling, in total crashing from 190 exahashes per second (Eh/s) to 58 Eh/s at the bottom.

This was unquestionably a huge concern for many casual investors. Would the network be able to deal with such a fundamental blow? Those deeply into the weeds in Bitcoin, however, were much less worried about this situation. Bitcoin is adaptable. Blocks were found a little slower, but continued to tick away. Difficulty adjusted down a few times as designed, and the network itself suffered no lasting damage. The hash rate plunge finally bounced on June 27 and as of this writing, is up 98% off the lows.

The recovery will be slow but steady as Chinese mining equipment is moved or sold, ending up in more friendly and distributed jurisdictions and resulting in a more robust mining industry. Investor uncertainty decreased rapidly as the hash rate bounce continued into July. Today, the network is stable and strong.

Grayscale Trust’s Record Unlocks

The second major cause of uncertainty in this period was the Grayscale Bitcoin Trust (GBTC) release schedule (highlighted in gray above). This narrative affected the sentiment of high-net-worth investors and professional trading outfits in the space. There was a fairly strongly-held belief among whales that their peers would be leveraging into arbitrage trades immediately after unlock periods.

Source

A quick 101 on the GBTC: GBTC is a closed-end trust, where investors can get exposure to the trust’s underlying asset, bitcoin, without personally holding the bitcoin, similar to an exchange-traded fund (ETF). Accredited investors can buy new shares directly from Grayscale at the price of net asset value (NAV) (the spot price equivalent), increasing the supply of outstanding shares, then after a six-month lock-up period, can sell the shares on the secondary market to investors of all types. Buying new shares from Grayscale requires Grayscale to go out into the market and buy bitcoin, causing a rise in price.

There is also a feedback loop aspect. As price rises in bitcoin, it drives more secondary market demand and a higher premium, then more demand for new GBTC shares and more spot buying by Grayscale. It pays well as long as the premium in the secondary market lasts. For example, if the premium is 20%, investors can buy a share of GBTC at NAV then, six months later, sell it at a 20% gain. (It’s slightly more complicated than that, but that’s the basic idea.)

For GBTC’s short lifespan, it had always enjoyed a premium, but in the week of February 23, price on the secondary market slid into a discount, meaning that the price in the secondary market went below NAV. It effectively cut off the feedback loop, and demand by accredited investors to buy new shares abruptly stopped, hence Grayscale buying bitcoin stopped as well.

Long story short, market participants were tracking the six-month lockup periods for blocks of shares. Some analysts were expecting a large price drop coinciding with the last and largest unlock on July 17. It was not uncommon to hear price predictions in the mid-to-low $20,000s. When the dip failed to materialize, the uncertainty around GBTC disappeared.

The GBTC discount has recovered from 15% to only 6% today, and is quickly approaching parity.

Bitcoin’s Taproot Upgrade

The third narrative for bitcoin was the Taproot upgrade (highlighted in orange above). This narrative affected developers and long term HODLers. They are well aware of the recent history of Bitcoin upgrades turning dirty, and were understandably concerned this upgrade could lead to similar division. Afterall, Taproot is the first soft fork for Bitcoin since the hotly-contested SegWit upgrade in 2017. In general, there was much less drama around this upgrade from the beginning, people were still uncertain just how it would play out.

Bitcoin upgrades are slow and meticulous things, because it takes years to work through the process in a decentralized and trustless way. No one individual nor one group is in charge to tell people to upgrade. The hardest thing is simply getting everyone to agree.

The nature of the Bitcoin upgrades as soft forks makes this process a little bit easier. A soft fork is a change that is backwards compatible with previous versions, it does not enable new behavior that would break old, non-upgraded nodes. (There is a lot of nuance missing from that statement, but that’s the general idea.) Coordination techniques used by more centralized altcoins are not possible in Bitcoin, so it becomes a lengthy, uncertain process of open and public debate.

Despite all this, a loose compromise was reached and on May 1, two activation mechanisms were initiated, one called Speedy Trial, the other a simple date for activation in the future. If Speedy Trial was successful in reaching a critical level of support by August 11, the two mechanisms would merge into one. If not, the main Bitcoin application would have to go back to the drawing board, and it might result in a network split.

The community didn’t have to wait long, Speedy Trial was a great success, locking in activation very quickly on June 12. The whole process turned out to be relatively painless and transparent, but it was the result of years of prior back and forth discussion, planning and compromise. Taproot will fully activate in November.

This upgrade flew somewhat under the radar this summer, but when it was locked in, many of the hardcore Bitcoiners, people deeply involved in the space, breathed a big sigh of relief. There would be no community split like in 2017.

The Rest Of 2021

These three major narratives are mostly wrapped up, but there are still some minor lingering issues. A few relatively insignificant GBTC unlocks are scheduled for the rest of July and into August. Miners have not completed their recovery, but are well on their way. I expect, by the end of the year, hashrate to be back to full strength and breaking all-time-highs in computational speed. Taproot is locked in but not activated. That doesn’t come until November. A few well respected cypherpunks in the space are still concerned, but they are nuanced arguments not shared by everyone.

The exciting thing is what happens now. If and when the GBTC price turns back into a premium, it will provide a strong incentive for investors to buy new GBTC from Grayscale, forcing Grayscale to buy bitcoin on the open market. Therefore, the effect of GBTC on price for the remainder of the year will likely be positive.

Miners will be less beholden to a fickle authoritarian state like China. Perhaps that leads to cost savings if in a friendlier jurisdiction that has less corruption, leading to more hoarding or expanding of hash rate.

Finally, Taproot enables many new high-powered features in the Bitcoin protocol. It will open up many unseen opportunities for financial services and businesses of all types.

The second half of this bull market will be intense.

For more content like this, Ansel Lindner writes a weekly newsletter at BitcoinAndMarkets.com.

This is a guest post by Ansel Lindner. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Malaysia Takes Enforcement Actions Against Binance, Advises Investors to ‘Withdraw All Investments Immediately’

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Malaysia Takes Enforcement Actions Against Binance, Advises Investors to 'Withdraw All Their Investments Immediately'

The securities regulator of Malaysia has taken enforcement actions against the global cryptocurrency exchange Binance. Noting that the exchange is operating illegally in the country, the regulator has advised those who currently have accounts with Binance “to immediately cease trading through its platforms and to withdraw all their investments immediately.”

Malaysia Issues Public Reprimand Against Binance

  • The Securities Commission Malaysia (SC) announced Friday “enforcement actions against Binance for illegally operating a digital asset exchange (DAX).”
  • Under Malaysia’s regulation, digital asset exchange operators must be registered with the Securities Commission as Recognized Market Operators (RMO).
  • Since the global crypto exchange is operating in Malaysia without being registered, the Malaysian securities watchdog “has issued a public reprimand” against four Binance entities and the company’s CEO, Changpeng Zhao (CZ), for continuing to operate illegally in Malaysia. According to the SC, Binance continued to operate in the country despite being included in the regulator’s Investor Alert List in July 2020.
  • The four entities are Binance Holdings Ltd. (registered in the Cayman Islands), Binance Digital Ltd. (registered in the U.K.), Binance UAB (registered in Lithuania) and Binance Asia Services Pte Ltd. (registered in Singapore).
  • All four Binance entities have been ordered by the securities regulator to “disable the Binance website (www.binance.com) and mobile applications in Malaysia within 14 business days from 26 July 2021.”
  • They must also “immediately cease all media and marketing activities, including circulating, publishing or sending any advertisements and/or other marketing material, whether via emails or otherwise, to Malaysian investors.” Furthermore, they must “immediately restrict Malaysian investors from accessing Binance’s Telegram group.”
  • The regulator also specifically ordered Zhao “to ensure that the above directives are carried out.”

  • Emphasizing that investors should stop dealing with and investing through illegal digital asset exchanges, the Securities Commission advised those who currently have accounts with Binance “to immediately cease trading through its platforms and to withdraw all their investments immediately.”
  • A growing number of regulators worldwide have warned Binance about operating in their jurisdictions without being authorized. They include regulators in Japan, the U.K., Cayman Islands, Hong Kong, Thailand, Germany, and Lithuania.
  • Commenting on the mounting regulatory scrutiny against his exchange, Zhao said, “We want to be licensed everywhere … From now on, we’re going to be a financial institution.” He also revealed that the company is looking for “a strong compliance background CEO to show our commitment to compliance as this is the top priority of the organization.”
  • Earlier this week, Binance announced that “Binance Margin will delist AUD, EUR and GBP cross and isolated margin pairs.” The exchange also announced that it will stop offering futures and derivatives products in Europe.

What do you think about Binance’s troubles with regulators worldwide? Let us know in the comments section below.

Biden to Step Up Crypto Tax Enforcement to Help Fund $1 Trillion US Infrastructure Plan

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Biden to Step Up Crypto Tax Enforcement to Help Fund $1 Trillion US Infrastructure Plan

U.S. President Joe Biden and lawmakers have agreed on the details of a roughly $1 trillion bipartisan infrastructure package with measures to step up tax enforcement around crypto assets.

Taxing Crypto Transactions to Fund US Infrastructure Plan

  • The White House announced Wednesday that President Joe Biden and a bipartisan group of lawmakers have agreed on the details of “a once-in-a-generation investment” in the U.S. infrastructure.
  • The bill will be taken up in the Senate for consideration, the White House stated, adding that “In total, the deal includes $550 billion in new federal investment in America’s infrastructure.”
  • Measures to step up tax enforcement around crypto assets were added to the infrastructure bill at the last minute to raise funds to finance the infrastructure plan.
  • The $550 billion will be spent over the next eight years on roads, bridges, high-speed internet, public transport, electric vehicles, airports, and shipping ports, among other areas.
  • The measures impose heightened reporting requirements on crypto brokerages and exchanges. They will be required to provide details on cryptocurrency transactions of $10,000 or more to the Internal Revenue Service (IRS).
  • The provisions are expected to raise an additional $28 billion from cryptocurrency transactions.

  • A fact sheet published Wednesday by the White House explains, “In the years ahead, the deal will generate significant economic benefits,” adding:

It is financed through a combination of redirecting unspent emergency relief funds, targeted corporate user fees, strengthening tax enforcement when it comes to crypto currencies, and other bipartisan measures, in addition to the revenue generated from higher economic growth as a result of the investments.

What do you think about using crypto tax to fund the U.S. infrastructure plan? Let us know in the comments section below.