In the last week, two Bitcoin platforms went offline involuntarily: The domain of 1Broker, a trading platform where Bitcoins are traded The FBI confiscated the price of shares, and Zebpay, India's oldest and largest Bitcoin exchange, had to cease trading because it lost its partner bank and couldn't find a new one.
FBI charges Austrians for breaking US laws
Anyone who visits 1Broker.com today will see the seals of the US Department of Defense and the FBI. Below it says: "The domain 1Broker.com was confiscated by the Federal Bureau of Investigation".
1Broker was a platform on which so-called "CFDs" or "swaps" could be bought and sold. These are highly speculative securities with which one wagers with a multiple of the stake on the price development of other values, such as the Dax or a currency. At 1Broker you could deposit Bitcoins and bet on the fall or rise of many stocks, index values, and currencies. Usually, nobody won except 1Broker, but anyone who enjoys playing for money will have had fun. Now the evolution of bitcoin has come into play, so here is a Bitcoin evolution review.
In a press release, the FBI stated that the American Securities and Exchange Commission SEC has filed a lawsuit against the managing director of 1Broker, the Austrian Patrick Brunner. The allegation is that he violated federal US securities trading laws. The company 1pool, which operated the platform, is registered in the Marshall Islands, and 1Broker has allowed investors from all over the world to buy swaps on securities through Bitcoins using just an email address. Of course, it doesn't work at all. An FBI special agent infiltrated the platform by opening an account and buying swaps from the US without reaching the "investment threshold" defined by US securities laws. In addition, 1Broker failed to register the swaps on a "registered national exchange".
In addition, the CFTC, the Commodity Futures Trading Commission, is responsible for regulating the trading of options and futures is competent to file an indictment against 1Broker. She accuses the platform of offering US citizens trading in options without being registered with the CFTC and of putting in place adequate anti-money laundering measures. 1Broker did not set up any or inadequate measures to verify the identity of customers (KYC).
In other words: Anyone who dares to offer a service on the Internet that Americans can enjoy, must comply with the laws of the SEC. Any company that does not verify that its customers are not American is affected.
Indian stock exchanges have problems with banks - because India needs Bitcoin Zebpay is the oldest and probably the largest Bitcoin Exchange in India. Last Thursday, the stock exchange announced via Twitter that it would cease operations. "At 4 o'clock this morning we will stop all unfulfilled offers and credit the coins to your Zebpay wallets. We will not accept any new offers. The Zebpay wallet will continue to work".
The company explains why on the blog. Zebpay played a pioneering role in the Indian Bitcoin market and, despite all the problems with regulators and banks, continued to give India the chance to participate in the markets for digital assets based on public blockchains. “However, it has been extremely difficult in the recent past. The restrictions on bank accounts have crippled the ability of us and our customers to do business. At one point we were no longer able to continue the business of a cryptocurrency exchange. So we are going to shut down. ”
With this, Zebpay fell victim to an order issued by the Indian Central Bank (RBI) in April. The RBI announced in the spring of this year that banks and other regulated payment service providers are no longer allowed to carry out transactions with rupees (INR) that are in any way related to cryptocurrencies. The RBI then gave the 6th of July as the deadline.
The reactions of the stock exchanges were different at that time. While a Koinex employee said the deadline was appropriate to act on and seek dialogue with regulators, an anonymous employee from another, the undisclosed exchange said the move was "not surprising, stupid." Koinex's approach seems to be paying off, as the stock market seems to be able to continue operations despite ever stricter, sometimes even hostile, regulation.
"The last few months have been a rollercoaster ride for the crypto ecosystem in India", read the company's blog last Friday, one day after Zebpay shut down. “From problems with banks to trials in the Supreme Court, there have been many things that have had a huge impact on trading activity and interest in the Indian community. The recent announcement of one of the leading Indian exchanges may have come as a surprise to many. ”
The exchange invites all Indian crypto traders to trade on it. The reason why Koinex continues to guarantee the trading of rupees and cryptocurrencies is likely to be because it began processing deposits and withdrawals peer-to-peer at the beginning of September. A blog post describes how this works: “One Koinex user wants to deposit INR (rupees) and another wants to withdraw INR. Our matching engine connects the two users, and a transfer of credit through a bank transaction reproduces the transfer to Koinex and makes both users happy! ”In this way, users can "just like in the old days ”be able to transfer funds directly deposit and withdraw from their "INR wallet" – which could be an indication that Koinex was no longer able to process rupees before the introduction of P2P deposits and withdrawals.
The Bitcoin situation in India has been extremely exciting since the government took a large part of the circulating cash out of circulation at the end of 2016 in a night-and-fog operation. The action is considered to be the greatest measure against the cash of the recent past. It is intended to force the cash-loving Indians to use digital payment methods such as credit cards, but it is causing enormous economic damage due to the technical backwardness of many regions. In times of cash abolition, cryptocurrencies like Bitcoin are the only way for Indians to free their money from the clutches of data octopuses and monitors. The fact that Bitcoin is so urgently needed is probably one of the reasons why the Indian central bank is particularly committed to fighting cryptocurrencies.