Eccentric crypto advocate, gun toting libertarian and tax exile, John McAfee, has been arrested in Spain, and is awaiting extradition to the United States. 

Yesterday, the US Securities and Exchange Commission (SEC) filed charges against McAfee for promoting initial coin offerings (ICOs) without disclosing that the issuers were paying him. 

Reports now suggest that McAffee, who was already wanted in the US for tax evasion, has now been arrested by Spanish police and is awaiting extradition to the United States to stand trial. 

According the  SEC complaint:

“From at least November 2017 through February 2018, McAfee leveraged his fame to make more than $23.1 million U.S. Dollars (‘USD’) in undisclosed compensation by recommending at least seven “initial coin offerings” or ICOs to his Twitter followers.”

Seven unidentified ICOs are referred to by the SEC, and it is alleged McAfee received compensation in the various tokens being issued, along with Bitcoin (BTC). The SEC even referred to some of McAfee’s famous Bitcoin price predictions (which he subsequently backtracked on, claiming he was joking). Apparently, McAfee has not filed tax returns from 2014 – 2018, despite receiving “considerable income.”

Despite being wanted for alleged tax evasion in the United States for years, McAfee has still been able to travel around the world without hindrance, attending many industry events and conferences. In June McAfee also launched his own distributed crypto exchange called ‘Ghost’ – which promised users true anonymity and included a Proof-of-Stake privacy coin.

If convicted on all charges, McAfee could be facing up to 30 years in prison.

Staying with dubious ICO promotions, the SEC has already prosecuted high profile individuals like Floyd Mayweather and DJ Khaled, for promoting ICOs while not declaring they were being paid. 

AYO.NEWS says:

McAfee is used to being held by police, having being arrested Belize on in connection with a murder investigation (though no charges were ever made), in the Dominican Republic for having a boat full of military grade weapons, and being detained by police in Norway for wearing ladies’ panties instead of a mask, but something tells us this could be the end of the road.

The fact that the SEC only filed the latest complaint yesterday, and Spanish police have already arrested McAfee, strongly suggests this operation has been planned for quite a while. 

We guess that’s McAfee’s presidential campaign over then.

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Milan-based payment firms Nexi and SIA have announced plans to merge and create a €15 billion fintech group. 

Nexi is currently Italy’s biggest payments company, and a merger with SIA, its arch rival, will see the new entity control around 70% of the domestic market, and instantly make it one of Europe’s largest fintech groups.

According to Reuters, the proposed all-share deal will leave Nexi with approximately 70% of the new company, and SIA with an equity value of €4.6bn. The remaining 23% of the new group will be in the hands of Nexi’s private equity owners, Advent, Bain Capital, and Clessidra.

Nexi, which has been focused on the Italian domestic market, has been active in the blockchain space, and was involved with a pilot for a blockchain-powered interbank system from 2018. The test, which involved 14 Italian banks, is said to have successfully completed 1.2 million movements during the first stage of the test.  

The newly merged entity is expected to handle over 21 billion transactions per year, serving around 2 million merchants and 120 million card holders. 

If everything goes according to plan, the merger should complete by summer 2021. 

AYO.NEWS says:

With the COVID-19 crisis significantly increasing the demand for digital payments, both online and in-person contactless, cashless payments, we should expect to see more mergers and acquisitions, as companies attempt to scale and synergise to take full advantage. Given that Nexi is already familiar with the advantages offered by blockchain technology, it’s fair to assume the new Italian fintech giant won’t neglect that space. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

The Bank of Thailand (BOT) has launched the world’s first blockchain-based platform for government savings bonds.

Leveraging technology on the IBM Cloud, the BOT issued a total of $1.6 billion USD in the space of two weeks. 

The sale of government bonds has long been a complex, multi-party, time-consuming process, relying on non-real-time systems, with duplicated validation steps and manual reconciliation, that was prone to data errors. 

However, by moving onto the blockchain-based platform, the time taken to complete the issuance process has been slashed from 15 days to just two. Additionally, costs have been significantly reduced and security has been improved. 

The project to switch to a blockchain-based system involved collaboration between several organisations, including BOT, Public Debt Management Office, Thailand Securities Deposit Co., Ltd, Thai Bond Market Association, and selling-agent banks, including Bangkok Bank, Krungthai Bank, Kasikorn Bank, and Siam Commercial Bank, with IBM Blockchain as technology and cloud platform partner.

Discussing the news VP for Indochina Expansion and MD of IBM Thailand, Patama Chantaruck, said:

“Bank of Thailand’s success with the government savings bond project is the latest example of how blockchain technology can redefine the way businesses operate by simplifying complex processes resulting in fast, transparent, secured and efficient multiparty collaboration.

“IBM is proud to bring our world-class blockchain platform and IBM Cloud to support Bank of Thailand, and work side-by-side with them in achieving this important milestone for Thailand’s financial industry.”

Thailand is emerging as a regional leader in blockchain technology adoption, in both the private and public arenas. In 2019, the electronic letter of guarantee (eLG) platform and network went live, with 22 Thai banks and 15 companies, and now handles around $300M USD in guarantee letters. 

Meanwhile, June 2020, the Bank of Thailand launched a pilot program for its planned central bank digital currency (CBDC) – the digital baht – covering use by large enterprises. In July it announced it would also be trailing its use in transactions with the Hong Kong Monetary Authority. 

The Thai Customs Department also became the second government agency in southeast Asia to adopt the blockchain-based trade digitisation platform TradeLens – improving the speed, accuracy, and security of local and international shipping activities. 

AYO.NEWS says:

Now that mature, proven commercial blockchain infrastructure is readily available, it’s only a matter of time before all governments realise that its adoption is a win-win situation. 

Staying with blockchain-based bond issuance, but this time in the private sector, last month Singapore Exchange (SGX) issued its first blockchain-powered digital bond, worth 400 million Singapore dollars (approx. €248m). 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

A day after crypto derivatives exchange BitMEX, its associated companies, and its executives got hit with charges, the exchange is still fully operational. 

Yesterday, the United States Commodity Futures Trading Commission (CFTC) charged Seychelles-based derivatives exchange BitMEX with operating an unregistered trading platform and breaking anti-money laundering regulations, but the company doesn’t seem phased. 

Relying on decentralisation to avoid the law

It has long been known that BitMEX has all but ignored even basic AML and KYC requirements, seemingly confident in relying on its decentralised structure to evade any repercussions. However, there is an increasing awareness that, although authorities in a specific country like the United States, may be unable to directly shutdown operations completely, they could still effectively disrupt operations by targeting key individuals and third-party service providers. 

Indeed, even BitMEX itself eventually acknowledged it couldn’t continue to ride roughshod over regulations indefinitely, introducing mandatory KYC requirements in April 2020. In July, BitMEX’s parent company, HDR Global Trading Limited, also restructured and rebranded as ‘100x Group’ , possibly in an effort to further distance itself from its past behaviour. But, it looks like that was far too little, far, far too late. 

According to a statement released yesterday, the CFTC has filed a civil enforcement action in the Southern District of New York, against five corporate entities and three individuals who are allegedly responsible for owning and operating the exchange. 

As expected, the individuals include Arthur Hayes, CEO of BitMEX, along with Ben Delo and Samuel Reed. The corporate entities charged are HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited (BitMEX).

Civil and criminal charges

The CFTC alleges BitMEX has illegally offered services to retail trades amounting to a staggering $1 trillion USD since launching in 2014, and is seeking disgorgement of all “ill-gotten gains”, civil monetary penalties, permanent trading bans, and injunctions against future violations. Specifically, the CFTC says BitMEX received $11 billion in BTC deposits and raked in over $1 billion in fees, “while conducting significant aspects of its business from the US and accepting funds from US customers.” 

The US attorney for the District of New York has also indicted Hayes, Delo, Reed, and BitMEX’s head of business development, Gregory Dwyer, for violating and conspiring to violate the Bank Secrecy Act. If convicted they could each face fines of up to $250K and up to five years imprisonment. 

Citing the audacity of the operation, FBI Assistant Director, William Sweeney, commented:

“One defendant went as far as to brag the company incorporated in a jurisdiction outside the U.S. because bribing regulators in that jurisdiction cost just ‘a coconut.’ Thanks to the diligent work of our agents, analysts, and partners with the CFTC, [the defendants] will soon learn the price of their alleged crimes will not be paid with tropical fruit, but rather could result in fines, restitution, and federal prison time.”

As of last night, Reed was the only individual to have been arrested. Meanwhile Sean Hecker and Jenna Dabbs, partners for Kaplan Hecker & Fink, the law firm representing Dwyer, sent out statements insisting that their client had complied with the CFTC investigation, had never even been invited to talk with US prosecutors, and had “always worked in good faith to comply with all applicable regulations and requirements. 

HDR Global responds

In a statement, an external spokesperson for HDR Global, said:

“We strongly disagree with the US government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously. From our early days as a startup, we have always sought to comply with applicable US laws, as those laws were understood at the time and based on available guidance.”

The BitMEX platform has continued to operate normally, and the company has assured customers that their funds are safe. 

AYO.NEWS says:

Yesterday’s charges were hardly surprising, and everyone at BitMEX and its associated companies must have seen them coming months ago. Indeed, we first reported about a possible US investigation of BitMEX way back in July 2019. Perhaps most surprising is that Samuel Reed hadn’t already ensured he was out of reach. 

Will the US be able to exert enough pressure in the right places to get BitMEX itself shutdown, or will this just turn into one very long and very costly circus that results in nothing more than a few more wealth crypto exiles who simply avoid every stepping foot on US territory (or anywhere with easy extradition) again? 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Romanian authorities have announced the country’s first ever auction of seized crypto assets. 

Earlier today, Romania’s National Agency for the Management of Seized Assets (ANABI) confirmed it will be holding an auction for confiscated Bitcoin (BTC) and Ether (ETH). The action is in response to a ruling from the Prosecutor’s Office in the Ploiesti Court, and involves cryptocurrency seized during a fraud case. 

ANABI has stressed that it will only transfer the crypto assets to a winning bidder who provides public addresses associated with a legal and registered crypto platform, adhering to Romania’s legislative norms, and complying with Know Your Customer and Anti-Money Laundering provisions. 

As previously reported, it was only in July 2020 that Romania finally brought its cryptocurrency regulations up to full 5AMLD standard. 

AYO.NEWS says:

It’s no secret that there’s a whole lot of cryptocurrency sloshing about in the criminal world, so we can expect to see this kind of thing become common as courts and various authorities become more comfortable with handling crypto. In February, the United States Marshals Service (USMS) auctioned over 4,000 confiscated Bitcoins (BTC), worth around $37.4m USD at the time. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Venezuelan authorities have launched a regulatory framework for cryptocurrencies, and  given the green light or a 90-day pilot of a crypto-powered “decentralised stock exchange.” 

On 23 September Venezuela’s National Superintendency of Crypto Assets and Related Activities published its first directives regulating crypto mining activities in the country – marking a U-turn for the government, which had previously opposed all cryptos except the national oil-backed Petro. Unfortunately for Venezuelan crypto miners, the new regulations  also oblige them to join a “national mining pool.”

And, in yet another attempt to use decentralised technologies to circumvent international sanctions, the crisis-ravaged South American country is launching ‘BDVE’ – what it claims to be the “first decentralised stock exchange in the world.” 

Apparently, users will be able to access the exchange from anywhere in the world, and trade both fiat currencies and “alternative digital assets”, without restrictions. Venezuela’s National Securities Superintendency will decide whether or not to grant a permanent license after the 90-day trial is complete. 

Though details are sketchy, BDVE appears to be Ethereum-based, though it isn’t known if the platform will support El Petro – the oil-backed national cryptocurrency.

Venezuelan President Nicolas Maduro has also announced a new “anti-sanctions bill”, which stipulates that private and state-backed crypto assets could be used to help work around international sanctions. 

As previously reported, in July Max Keiser predicted a Bitcoin hash rate war, pitting the United States against Iran and Venezuela, could drive prices to $500K USD. 

AYO.NEWS say.

With the COVID-19 pandemic decimating the global demand for oil, Venezuela’s main export, the country’s government is clearly even more desperate for foreign exchange than usual – hence its sudden acceptance of other cryptocurrencies and new decentralised stock exchange. 

But, will anyone really trust an exchange officially endorsed by one of the world’s most corrupt and incompetent governments? And, what about the 90-day trial? Will traders find themselves unable to access their assets at the end of it? 

We’d say this has about as much chance of working as the Petro. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020