On a gray morning in May 2016, I left my office in downtown San Francisco and walked down Montgomery Street, to Wells Fargo.

I swiveled open the two gigantic doors, walked up to the counter, and explained to the teller that I needed to send a money wire to Gemini Trust Company, LLC., a cryptocurrency exchange based in New York City.

Certainly, she said. How much will you be sending today, Mr. Conway?

One hundred thousand dollars.

My voice sped up as I said it: $100k. This represented my familys entire life savings. It was money my wife and I planned to use to pay for our 3 kids college tuition, our eventual retirement, and emergency expenses. I was a middle-aged guy with a family who had never been on the cutting edge of anything. But I was about to bet everything I had on an unproven virtual currency called Ethereum.

This could only end two ways: Id lose everything I owned, or make a fortune.

Up to that point, my professional life was one of quiet desperation.

I was a 45-year-old middle manager at a major multi-media company in San Francisco. Though I earned a respectable $150k per year, I hated the fake company culture, the bureaucracy, and the endless chains of command.

Like so many others, I was looking for some kind of escape. And soon, I found one.

Dan wallowing in the misery of corporate America (courtesy of Dan Conway)

One early morning in mid-2015, before anyone else was in the office, I was browsing online and stumbled upon an article about Bitcoin.

Id heard about Bitcoin years earlier when I was preoccupied with climbing the corporate ladder. Back then, it seemed ludicrous to spend money real currency that I could hold in my hands on some digital token that existed on a public ledger in the cloud. To be frank, I thought it was complete bullshit.

But that morning, I had a sudden change of heart.

Bitcoin, the article read, was going through an especially rough patch. Its price, which was in a constant state of volatility, had fallen from a high of $1.2k in 2013 to $300. My mind raced: What if it goes up again? What if I put everything I had into this? I could get rich and never work another day in corporate America

A part of me recognized these thoughts as destructive mania. My addictive personality had landed me in trouble before first with alcohol, then with harder drugs. My 12-step sponsor wasnt going to pat me on the back and say, Go buy that Bitcoin, Dan! Sounds like a fantastic plan!

At the same time, my wife Eileen and I were raising 3 children and had a big mortgage on our home in the Bay Area. The Great Recession had snatched away most of Eileens PR consulting clients. We were privileged, of course, but money was tighter than usual.

Sitting in my empty office, I began to go down the crypto rabbit hole. And the more I learned, the more I was pulled in.

Through early research, I gravitated from Bitcoin to Ethereum (ETH), a then-newly launched coin that debuted in July 2015.

Blockchain, the technology underlying Ethereum and other cryptocurrencies, promised to one day decentralize corporations. As TechCrunch wrote, it would offer the stability of an organization but without the hierarchy. It seemed almost too good to be true, but a lot of smart, future-forward people were getting behind it.

As a disenfranchised suit-and-tie, I was enraptured by the possibility of a decentralized future. As a greedy speculative investor, it gave me a rush.

Juggling crypto research and family time (courtesy of Dan Conway)

In short order, I developed an Ethereum obsession.

I listened to Ethereum podcasts while walking the dog. I read about Ethereum during every spare minute I had at work. I rejiggered my Twitter feed to follow mostly Ethereum-related accounts. I absorbed hours of Ethereum commentary on YouTube.

My biggest source of conviction was Ethereums developers. In the 90s, Id worked in PR at Macromedia. The companys product, Flash, had dominated the web graphics market after catching the attention of the most forward-thinking web designers. In the same sense, the smartest developers were now flocking to Ethereum.

Occasionally, my Ethereum fever broke and I wondered if Id gone off the deep end.

Was my growing desire to invest in Ethereum a desperate attempt by a desperate man to find some kind of midlife salvation? Was this whole thing some kind of elaborate ruse to scam people like me out of their nest eggs?

Most of my friends in tech folks working at places like Google, Apple, and Uber were dismissive of blockchain. Few of them had heard of Ethereum. When I told a buddy of mine that I was considering investing in cryptocurrency, he broke out in laughter, as if Id admitted I was hedging my future on Smurfberries or Scooby Snacks.

But my mind was made: I was going to put everything I had into this.

Less than a year later, I found myself standing at a Wells Fargo desk, transferring our life savings to Gemini in exchange for 6,993 ETH, at an average price of $14.

Eileen had been rightfully resistant to the idea. Eventually, though, she agreed to a deal: I could make the transfer, but I had to promise my children that Id take them on a number of expensive trips.

Texts exchanged between Dan and his wife, Eileen (courtesy of Dan Conway; illustration by The Hustle)

After watching me go through years of addiction issues, depression, and corporate misery, Eileen was happy to see me excited about something even if it was some virtual coin. Never for a moment did she think wed get rich off of it. But she didnt want to break the spell I was under.

Unfortunately, it wasnt long before I experienced the Earth-shaking volatility of the crypto market.

In June 2016, a high-visibility project was hacked and Ethereum tanked: By December, our original $100k investment was worth less than $40k.

Though I was $60k in the hole, my confidence in Ethereum was stronger than ever and it was now at a bargain-basement-level price. So, I decided to double down.

We didnt have the cash. The only pool of funds available was the line of credit on our home. Racking up a big debt on our home equity line would very likely set us up for an unhappy ending.

But I felt in my bones that this was my shot and I might not get another one.

In December of 2016, I visited Wells Fargo 3 times, transferring an increasing amount of money from our home equity line to Gemini. After each transfer, I went home and bought ETH slowly so I didnt cause a run-up. (The order books were thin with limited liquidity in those days; a rush of sales could cause the other traders and their bots to snatch up all the available coins.)

That winter, I borrowed $200k on my home and used it to buy more ETH. I now owned 26,750 ETH total, at an average buy-in of $11.21/coin.

And I was $300k in the hole.

In February 2017, during our first negotiated trip of a lifetime in Mexico, Ethereum came back to life.

It was the middle of the night, and I was in the back of a cab battling a nasty bout of food poisoning. I was puking my guts out, foaming at the mouth, and delirious but I didnt care because our ETH was up $50K. We were in the black for the first time.

Then, something miraculous happened: It kept going up and up and up. Between February and March of 2017, ETH shot from $15 to $50 per coin. By April, it was at $70; by May, $230.

In a span of 4 months, my $300k investment ballooned to $6m.

Every investors dream (The Hustle; historical ETH data via Coinmarketcap.com)

Id seen a story at some point about someone who had spontaneous orgasms at random times throughout the day. Thats the best way I can describe the feeling. When I checked my phone, Id be up another 6 figures since the last time I looked. I couldnt resist stopping whatever I was doing to pump my fist and shout, YEESSSS!

But other times, ETH would dip, and the value of my stack would plummet by more than $1m in less than an hour. The orgasms were replaced by brutal withdrawals. The volatility was a narcotic, shooting up my brain with boosts of dopamine and serotonin.

The coins consumed me and changed my entire persona.

When ETH stopped going up or had a mild dip, Id get snappy with the kids. I donned a hoodie and stared into the void for hours, my mind enslaved to the promise of Ethereum and its price variations. I was fired from my job of 6 years.

In the midst of a particularly volatile week, I found myself in the emergency room, struggling to breathe. The doctor diagnosed me with a panic event. Is anything making you anxious? he asked.

There was also the constant, looming fear that my crypto account could be hacked at any moment. In 2017 alone, hundreds of millions of dollars in crypto were stolen from accounts and there wasnt any regulatory body to protect victims.

From June to October of 2017, ETH floated between $200 to $400 per coin an increase of 2,000% since the beginning of the year. That summer, many of the early HODLers (the folks who were holding for the long-term) began to cash out.

My coins were now worth millions, but I continued to hold the majority of them. This decision would soon pay off in a bigger way than I ever couldve imagined.

In the course of 2 weeks in December 2017, ETH nearly doubled in price from $430 to $830. On January 3, 2018, it hit $900; 3 days later, it passed $1k.

It was an unprecedented burst so monumental in scope that it temporarily froze the exchanges. It was like a 9.0 earthquake with an infinite number of aftershocks.

In the midst of this madness, I received an email from my financial advisor, who Id hired months earlier to oversee my growing funds.

An email Dan received from his financial advisor in December 2017 (Courtesy of Dan Conway)

The alarm bells were sounding.

Sitting on my couch in sweaty workout clothes, I turned to my favorite subreddit, r/EthTrader. The message board was full-on mayhem, with 1.4k comments that morning alone. Grandparents, and taxi drivers, and anyone else whod gotten a hot tip was buying in without even knowing what crypto was. Even for hardcore HODLers like me, it was too much, too fast.

I frantically logged into my Gemini account and weighed my options.

If I didnt sell and ETH tanked, Id lose it all. Id have to tell Eileen and the kids that dad had dropped the golden goose egg, that Id squandered my lottery ticket.

Watching the greedy masses pile into ETH reminded me of the famous battle scene from Braveheart: While the hordes rush forward in full sprint, lances atilt, the defenders sit still, unflinching and calm, waiting for the signal to attack.

I watched the price climb to $915. Then, over the course of two hours, I sold 11k ETH, the majority of my remaining stack, for $10m.

I sent Eileen a text: We are done.

Shortly after we cashed out, the cryptocurrency market took a nosedive.

Ethereum dropped from a high of $1,396 in January to $385 in April. By December of 2018, it was back below $100.

Eileen and I paid off our $950k mortgage. We booked a trip to Africa wed always dreamed of. Hell, we even bought a second home in Ireland.

Nearly 2 years later, its still surreal looking at our bank account and seeing high 7-figures, post-tax. It all happened so quickly that it feels like a dream.

Top: Dans bank statement from December 2017 to January 2018, showing a Gemini transfer of $10.7m; Bottom: The family in Italy one of the agreed-upon destinations (Courtesy of Dan Conway)

I still believe crypto will open up new possibilities for organizing the world in the decades ahead, and Im confident it will pop again as a result. But I dont recommend that anyone try to replicate what I did.

Luck played a significant role in my success.

I banked everything I had on a relatively unproven technology and got out at the right time. For every story like mine, there are hundreds of others about people who lost it all. I know that couldve easily been me.

At the same time, Im no blackjack player. My investment wasnt purely a blind gamble that came up aces. I was, and am, a true believer in crypto and I had the right mix of courageousness and craziness to take a big risk.

Ive since turned my efforts toward making the concept of crypto-based decentralization more accessible to the general public. My recent book, which chronicles my wild journey, encourages people to think about their own risk parameters.

Today, Ive settled back into a normal life. I make dinner, do odd-jobs around the house, and live a very pleasant life by almost any measure. I still drive a minivan every day. Crypto no longer consumes me.

But every now and then, after the kids are asleep, I lie awake thinking back on the rush of the market. And I miss it like hell.

Interested in learning more about Dans story? He recently chronicled his entire journey in a full-length book, Confessions of a Crypto Millionaire.

You should check out our new premium publication called Trends.

Weve hired a team of journalists, entrepreneurs, and data scientists to crawl millions of data points and interview industry leaders to find gaps in the market. And each week we reveal our findings in a newsletter update.

Weve also created a private community for subscribers and the people we interview, where entrepreneurs and experts pick apart ideas and discuss the merits of others strategies. Click here to learn more.

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How I got sucked into cryptocurrency and made $13 million - The Hustle

The Royal Bank of Canada (RBC) is reportedly developing a cryptocurrency platform,The Logic reports.

If launched, the banks customers will be able to trade in cryptocurrencies, including Bitcoin BTC and Ethereum.

The bank, one of the countrys largest,is also looking to let customers open cryptocurrency accounts.

According to The Block, one of the banks patent applications says the following:

To individual users, managing cryptographic keys and transacting with different cryptographic assets can be a challenge. In some situations, cryptographic asset transactions may take time to be confirmed, and/or may not be compatible or supported by merchant systems or point-of-sale devices.

But, Jean Francois Thibault, an RBC spokesperson told the Logic that the bank like many other organizations, files patent applications to ensure proprietary ideas and concepts are protected. Thibault declined to comment further.

Although little is known at this stage, this is not the first time that abank has dipped its toes into the blockchain space.

In September 2017, Reuters reported that the bank was experimenting with blockchain in a bid to facilitate payments between its US and Canadian banks.

More recently, RBC and several other Canadian banks started using blockchain technology to allow customers to digitally prove their identity.

Blockchains potential to maximize efficiency and significantly reduce costs has been lauded for some time, so its hardly surprising that banks are trying to jump on the blockchain bandwagon.

Its just ironic that Satoshi Nakamoto originally invented the technology to circumvent the mainstream financial system but here we are, the suits always take over.

Published November 12, 2019 11:03 UTC

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Big Canadian bank rumored to offer cryptocurrency accounts, Bitcoin trading - The Next Web

A Swiss bank set up to handle both traditional financial products and new digital currencies has been given the go-ahead by the countrys regulators.

SEBA, the Swiss-based cryptocurrency bank, is now officially operational, The Block reports.

The bank reportedly shared a statement with The Block yesterday that said its Swiss clients can now open accounts with the bank. This goes for corporate businesses, asset managers, and professional private investors.

Launched earlier this year, the bank received its banking license from the Swiss Financial Market Supervisory Authority (FINMA) in August.

SEBA says its trying to bridge the gap between traditional and digital assets, whilst maintaining high levels of security. At the moment, the bank supports five cryptocurrencies: Bitcoin, BTC Ethereum, Stellar, Litecoin, and Ethereum Classic.

Customers will be able to manage their asset accounts through an app and online banking. According to the statement, users will be able to convert cryptocurrencies into traditional currencies and back again all within these online services.

According to SEBAs road map, the next phase is to roll out its offering to international customers, before expanding its product offering. However, there are no dates attached to this timeline so theres no knowing how long either of those developments will take.

Its a bit of a politically conflicting situation depending on your perspective.

Many cryptocurrency and Bitcoin businesses have struggled to work with traditional banks. Regulatory uncertainty, and Bitcoins checkered past have led banks to tread cautiously when dealing with cryptocurrency businesses.

SEBAs offering could open a few doors for crypto companies that have so far struggled to get a foothold in the traditional banking system.

However, a bank holding your Bitcoin in custodial storage? While that might prevent you from losing your private key, it comes with a number of obvious sacrifices.

SEBA joins competitor bank Sygnum AG, which received a license from FINMA back in September.

Switzerland has been one of the more progressive nations when it comes to cryptocurrency businesses. Last year, it allowed blockchain startups to apply for a FinTech license that would let them handle deposits of up to $100 million.

Published November 13, 2019 09:49 UTC

Link:

Switzerland gets another Bitcoin bank that holds cryptocurrency for customers - The Next Web

The American gold rush was marked by a host of hard times and a few sudden millionaires. Men gave up everything to travel to California in hopes of striking it rich. But the man who really struck it rich during the gold rush was Levi Strauss, a simple tailor who made tough cotton pants for the miners.

In the 21st century, the digital gold rush has begun with the creation of cryptocurrencies, and particularly Bitcoin. Early adopters owned thousands of Bitcoin, and these few devotees are now massively wealthy.

As the market has grown, however, the major winners in the space have been companies and individuals who offer services to the Bitcoin faithful. Among these service providers, cryptocurrency exchanges are some of the most lucrative.

However, where profit can be made, competition is sure to follow. As the digital gold rush continues, some question exists as to who will win the war to dominate the cryptocurrency exchange market. A number of exchanges have sought to take a bite out of the market. The key, to date, has been a focus on creativity and value.

Creative conquerors

Creative offerings and marketing strategies have already appeared to work in bringing attention to exchanges. Consider, for example, the creative approach Binance took to bring attention to their exchange platform.

The company offered YouTube influencers a $100K prize for those who could create the best and most helpful video about how to trade on the platform. The result was a massive number of new traders, and a substantial number of videos, all of which focused on bringing new traders to Binance.

The traction from this simple but creative marketing plan produced a huge amount of news time, and subsequently, new users. Binance trading numbers increased dramatically with the increased traffica sure signal that creativity in the market will produce results.

Other smaller companies are offering creative solutions as well. For example, Nominex, a newcomer to the exchange world, is creating a referral program that will drive business in a similar way.

The Nominex Affiliate Program allows users to share a referral link with friends or spread the word about Nominex through media and community. Each referral receives a bonus, and theres no limit to the number of referral levels users receive bonuses from. This is unlike any other exchange where those numbers are generally limited to 2 to 3.

Value proposition

Beyond creativity, as the number of exchanges on the market explodes, cryptocurrency traders are increasingly looking for genuine value. Beyond simply fast trades and low fees, traders are seeking a value proposition that moves beyond the simple offerings of early exchanges.

Again using Nominex as an example of a relative newcomer, the company has offered a series of token distributions for early adopters. First, for a month after the opening of the exchange, all users will receive 100% cashback on all trading fees, paid in NMX, the Nominex native token.

Second, after this first phase, the company will continue returning a portion of trading fees as a pool paid to users each day. These bonuses will be paid on a percentage basis of total transaction volume. For example, if a user had 1% of all transactions on a given day, he would receive 1% of the pool.

Other larger exchanges are seeking to create similar value propositions as well. Again, turning to Binance, the company has begun offering up to 8% interest on its BNB native token for those who use the platforms credit card.

Whats more, the company has also offered to pump certain tokens and companies for free. The main incentive for Binance is to bring a larger user pool onto the site, and the smaller companies (like the recent addition of Perlin) benefit from having the juggernaut crypto exchange on their side.

Junk or jeans?

The future of the cryptocurrency exchange market is still up in the air. But the reality that the market will continue to grow and change cant be denied. Nevertheless, the power for growth in the market must come from creative marketing concepts and genuine value propositions for users.

Just as in legacy financing options, companies must begin finding ways to differentiate themselves. Whether through referral programs, incentivized marketing, or bonuses on their respective networks, the future winners of the digital gold rush will be like Levi Straussselling the best products and the best prices.

Original post:

Creativity and Value Will Win the Cryptocurrency Exchange Wars - newsBTC

SOUTH BEND, Ind. (Project Syndicate) Facebook CEO Mark Zuckerberg was at least half right when he recently told the United States Congress that there is no U.S. monopoly on regulation of next-generation payments technology.

You may not like Facebooks FB, +0.16% proposed Libra (pseudo) cryptocurrency, Zuckerberg implied, but a state-run Chinese digital currency with global ambitions is perhaps just a few months away, and you would probably like that even less.

Perhaps Zuckerberg went too far when he suggested that the imminent rise of a Chinese digital currency could undermine overall dollar BUXX, +0.01% dominance of global trade and finance at least the large part that is legal, taxed, and regulated.

In fact, U.S. regulators have vast power not only over domestic entities but also over any financial firms that need access to dollar markets, as Europe recently learned to its dismay when the U.S. forced European banks to comply with severe restrictions on doing business with Iran.

Also read: ICO offerings way down, but some still using SEC back door to raise funds

Americas deep and liquid markets, its strong institutions, and the rule of law will trump Chinese efforts to achieve currency dominance for a long time to come. Chinas burdensome capital controls, its limits on foreign holdings of bonds and equities, and the general opaqueness of its financial system leave the yuan USDCNH, +0.0612% (also known as the renminbi) many decades away from supplanting the dollar in the legal global economy.

Control over the underground economy, however, is another matter entirely.

The global underground economy, consisting mainly of tax evasion and criminal activities, but also terrorism, is much smaller than the legal economy (perhaps one-fifth the size), but it is still highly consequential. The issue here is not so much whose currency is dominant, but how to minimize adverse effects.

And a widely used, state-backed Chinese digital currency could certainly have an impact, especially in areas where Chinas interests do not coincide with those of the West.

A U.S.-regulated digital currency could in principle be required to be traceable by U.S. authorities, so that if North Korea were to use it to hire Russian nuclear scientists, or Iran were to use it to finance terrorist activity, they would run a high risk of being caught, and potentially even blocked.

If, however, the digital currency were run out of China, the U.S. would have far fewer levers to pull. Western regulators could ultimately ban the use of Chinas digital currency, but that wouldnt stop it from being used in large parts of Africa, Latin America, and Asia, which in turn could engender some underground demand even in the U.S. and Europe.

One might well ask why existing cryptocurrencies such as Bitcoin BTCUSD, -0.19% cannot already perform this function. To an extremely limited extent, they do. But regulators worldwide have huge incentives to rein in cryptocurrencies by sharply proscribing their use in banks and retail establishments.

Such restrictions make existing cryptocurrencies highly illiquid and ultimately greatly limit their fundamental underlying value. Not so for a Chinese-backed digital currency that could readily be spent in one of the worlds two largest economies.

True, when China announces its new digital currency, it would almost surely be permissioned: a central clearing house would in principle allow the Chinese government to see anything and everything. But the U.S. would not.

Facebooks Libra is also designed as a permissioned currency, in its case under the auspices of Swiss regulators. Cooperation with Switzerland, where the currency is officially registered, would surely be much better than with China, despite Switzerlands long tradition of extending privacy to financial transactions, especially with regard to tax evasion.

The fact that Libra will be pegged to the U.S. dollar would give U.S. authorities additional insight, because (at present) all dollar clearing must go through U.S.-regulated entities. Still, given that Libras functionality can largely be duplicated with existing financial instruments, it is hard to see much fundamental demand for Libra except among those aiming to evade detection.

Unless tech-sponsored currencies offer genuinely superior technology and this is not at all obvious they should be regulated in the same way as everyone else.

If nothing else, Libra has inspired many advanced-economy central banks to accelerate their programs to provide broader-based retail digital currencies, and, one hopes, to strengthen their efforts to boost financial inclusion.

But this battle is not simply over the profits from printing currency; ultimately, it is over the states ability to regulate and tax the economy in general, and over the U.S. governments ability to use the dollars global role to advance its international policy aims.

The U.S. currently has financial sanctions in place against 12 countries. Turkey was briefly sanctioned last month after its invasion of Kurdish territory in Syria, though the measures were quickly lifted. For Russia, sanctions have been in place for five years.

Just as technology has disrupted media, politics, and business, it is on the verge of disrupting Americas ability to leverage faith in its currency to pursue its broader national interests. Libra is probably not the answer to the coming disruption posed by government-sanctioned digital currencies from China and elsewhere.

But if not, Western governments need to start thinking about their response now, before it is too late.

Continued here:

U.S. cant let criminals get the upper hand by using Chinas coming cryptocurrency - MarketWatch

The cryptocurrency market is a mixed picture on Wednesday. Bitcoin and all major altcoins are range-bound with bearish bias amid decreasing trading activity. The total cryptocurrency market capitalization dropped to $239 billion from $240 the day before; the worth of the digital asset of $67 billion change hands daily on average. Bitcoin's market share dropped to 66.0%.

BTC/USD has stayed mostly unchanged both on a day-to-day basis and since the beginning of Wednesday, changing hands at $8,730. On the intraday charts, the coin has peaked at $8,838 in Asia before reversing back below $8,800 handle. This resistance is strengthened by SMA100 (Simple Moving Average)on a daily chart. Once it is out of the way, the upside is likely to gain traction with the next focus on$9,000.

Ethereum, the second-largest digital asset with the current market capitalization of $20.2 billion, is moving within a short-term bearish bias within the recent range. The coin dropped below $186.00 to trade at $185.60 at the time of writing. Looking technically, ETH/USD has recovered from the recent low of $182.30, but the further upside is limited by $186.00 with SMA50 1-hour located on approach.

Ripples XRP has gained 1.2% since the beginning of Wednesday to trade at $0.2750 by the time of writing. The third digital coin with the current market value of $11.8 is moving within a tight range. The coin jumped above SMA50 (Simple Moving Average) and by the upper line of the Bollinger Band on a 1-hour chart. However, further recovery may be limited by SMA100 at $0.2760.

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The cryptocurrency market update: Bitcoin and major altcoins are vulnerable to further losses - FXStreet

Law Enforcement

The IRS and other tax enforcement agencies are touting big improvements in tracing the use of cryptocurrencies in tax evasion and other criminal schemes. They just don't want to talk about how.

On Friday, officials from the J5, a cooperative consortium of tax investigation and enforcement agencies around the world that includes Australia, Canada, the Netherlands, the United Kingdom and the U.S., wrapped up a week-long event in Los Angeles that brought together criminal investigators, cryptocurrency experts and data scientists.

The J5 was formed last year to help pool international tax enforcement resources and strategies. As the internet and the emergence of decentralized, pseudo-anonymous cryptocurrencies like Bitcoin have made it easier for tax evaders to move and hide their money, investigation and enforcement agencies around the globe have slowly realized they are dealing with a common set of challenges.

"The goal of the week was to remove some barriers and work together collaboratively to identify the most egregious tax offenders in the world," said Ryan Korner, executive special agent for the IRS field office in Los Angeles. "I want to emphasize that this week was not just a hypothetical training exercise; all of the participants ... worked together using real data to identify real criminals."

However, the agencies were more tight-lipped when it came to discussing what those leads are, how agencies are making new use of data and what tools they're leveraging. IRS officials said they developed new analysis platforms, generated "dozens" of new leads and were getting close to announcing operational results from the partnership, but offered few specifics on their work or what new capabilities they have developed to track cryptocurrency.

"I don't want to necessarily name any of them specifically, but we do have the tools in place today that we didn't have in place even six months to a year ago to take what was an anonymous form of payment and moving funds and really make it so it's not anonymous anymore," Korner told FCW.

IRS Special Agent Chris Hueston, the J5 project lead for the U.S., did cite enhanced data-sharing practices among partner countries as one of the reasons behind the improvement.

"We're able to use some of the data that we've seized through investigations, and we're able to rely on some of our J5 countries for data that they're able to share with us, so once we put those datasets together, as well as open sources and other information that we're able to share legally, those datasets become richer as far as putting a finer point on our targeting efforts for those criminals," he said.

The emergence of decentralized, pseudo-anonymous cryptocurrencies have created new challenges for financial regulators and tax enforcement agencies, who initially struggled to track and trace payments. A 2017 survey of 564 Bitcoin investors conducted by The Motley Fool found that more than one-third reported they did not plan to report their earnings for capital gains taxation. Federal Reserve Chairman Jerome Powell told Congress that new currencies like Facebook's Libra raise "serious concerns regarding privacy, money laundering, consumer protection [and] financial stability."

While IRS officials were reluctant to discuss what tools they're using, there is evidence that law enforcement agencies are getting better at tracking cryptocurrencies. For example, the Department of Justice has cited the tracking of virtual currencies as a key component for takedowns of a massive child exploitation ring in October.

The use of new commercial software and algorithms may be fueling that improvement. At least two agencies, the FBI and Drug Enforcement Administration, have engaged in sole-source procurements in recent years with contractor Chainalysis for proprietary software and training on how to track the use of virtual currency. In both cases, the agencies argue the contractor is the only company capable of providing the services.

"The vast majority of FBI personnel investigating conduct involving virtual currency only have access to Chainalysis to perform bitcoin tracing," the FBI wrote in an August 2018 sole-source justification.

About the Author

Derek B. Johnson is a senior staff writer at FCW, covering governmentwide IT policy, cybersecurity and a range of other federal technology issues.

Prior to joining FCW, Johnson was a freelance technology journalist. His work has appeared in The Washington Post, GoodCall News, Foreign Policy Journal, Washington Technology, Elevation DC, Connection Newspapers and The Maryland Gazette.

Johnson has a Bachelor's degree in journalism from Hofstra University and a Master's degree in public policy from George Mason University. He can be contacted at djohnson@fcw.com, or follow him on Twitter @derekdoestech.

Click here for previous articles by Johnson.

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Cryptocurrency tracking improves -- but how? - FCW.com

Hey! Have any of you seen a Bulgarian-looking woman who has a reputed magnetic personality and has just scammed thousands of investors out of 3.5 billion? No? Me neither. And were not likely to any time soon as the FBI are on her case.

Its no wonder folks steer clear of cryptocurrencies when scammers like the missing crypto queen turn up, sell snake oil, then disappear. Today, with so much regulation across continents, one would think that this kind of scam could never happen. But it has, and victims have lost their hard earned cash and savings.

Imagine the scene: a big event at a posh hotel or well known fancy gig. Youve seen an advert in a newspaper telling you that the hottest investment in town is coming. Shes a doctor with a super high intelligence quotient who is currently making her investors shed loads of bread. You do a bit of digging and find out that Dr Ruja Ignavota is an Oxford-educated serial entrepreneur. Its all starting to look very credible.

Her new invention OneCoin is going hell for leather, a rip-roaring success that is taking the world by storm. Her disciples and advocates are standing on stage in awe of her, now that they have made so much money on their initial investments. Its showtime and the fear of missing out is just palpable. Its now or never and shes convinced you to transfer your cash into OneCoin, her new digital currency.

Investments into thin air

Now youre part of the OneCoin cult. You wake up every morning and watch your investment rise. You flick to the OneCoin bookmark every few hours on your mobile phone. Then last thing at night, yep, its all looking good. You tell your friends and family about this once in a lifetime opportunity to get in fast before the whole world does. Still your investment goes up and up. But, unlike proper investments, your money is invested in thin air.

The story of OneCoin is one that I still cannot fathom. How did this nobody suddenly become a crypto guru conning people out of their cash. And where is she now?

Cryptocurrency is a dangerous beast. Bitcoin appears to be the safest bet. But, I wouldnt advise anyone to invest in it. Albeit it has some form of pedigree, but no fundamentals. Only this week Bobby Lee, a massive crypto bull stated that he believes Bitcoin will indeed surpass gold as the best place to invest cash in the future. Lee, who is launching a new cryptocurrency wallet for the less technically minded, has plotted that Bitcoin will hit $1m (780,000) after two more Bitcoin bubbles. The language itself is scary however, in using Bitcoin via Coinbase or Gemini, there is a piece of code that one actually owns on the blockchain.

Prevalence

Unfortunately, Dr Ignavota scammed OneCoin investors with no sign of a blockchain anywhere. There are heartbreaking stories of UK citizens losing big time as a result of investing in OneCoin. By March 2017, more than 3.5bn had been invested in the OneCoin system from 175 countries. It is thought around 100m of that came from the UK. That is a staggering amount of cash, leading to questions of how this could happen on such a scale. But the cult-like magnetism and selling tactics of OneCoin guru Ignavota meant that people were duped. Weve seen it all before and will no doubt see it again. But with the advent of mind blowing tech, it could become even more prevalent.

Its easy to rig up a credible website with logins, secure-looking banking software and fabulous graphics to hook you in. Some clever social media and a front man or woman and there is the structure of an investment vehicle. Oh, and dont forget the videos of disciples who have also invested and wax lyrical. That is just how quickly and effectively scammers can build an audience and cash piles to feed the frenzy. Of course, the investments are financial chimeras rigged to look real.

Dr Ignatova will resurface somewhere, but the damage has been done. I just wonder if the Bitcoin enthusiasts will suffer the same fate.

- Jim Duffy MBE, Create Special.

READ MORE: PureLiFi raises $18m to roll out LiFi-enabled phones, tables and laptopsREAD MORE: West Lothian entrepreneur puts six-figure sum into HR app

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Beware of cryptocurrency gurus like Dr Ruja and her OneCoin cult - Jim Duffy - The Scotsman

ParJar has confirmed that it has processed over half a million tips on Telegram. Over 21,000 people have used the cryptocurrency tipping service in over 500 communities since last year.

Telegram seems like the ideal place to incorporate cryptocurrency tips. After all, the chatroom platform boasts a strong user base and a plethora of APIs for easy use. Its no surprise then that ParJar has been such a massive success on Telegram.

In a tweet sent out recently by ParJar, over 21,000 users have sent cryptocurrency tips on Telegram in about a year. In total, 512,000 tips were sent, over 20,000 deposits were made, and around 33,000 withdrawals were processed. In all, its steady growth which will likely only get better in the coming year.

Although 21,000 users might not seem like much, the fact that 512,000 tips were sent means that those who use ParJarreally like it.Thats, on average, around 24 tips sent per user. Ultimately, cryptocurrency adoption relies on a strong group of dedicated users. These recently-released stats prove that cryptocurrency tipping on Telegram is building a strong following.

Other projects have tried to capitalize on the demand for micro-transactions and tipping on social media, as well. Nano is, of course, commonly used due to its negligible fees and fast transaction speeds. However, other competitors like Basic Attention Token (BAT) also work much like a tipping token which is integrated into the Brave web browser.

As BeInCrypto reported earlier this year, Brave recently added individual tipping as a feature. Twitter has also been toying with adding tipping to its platform via the Lightning Network, but it has yet to be rolled out fully.

Although ParJar remains one of the leading means of tipping with cryptocurrencies, it seems that there is much in the pipeline to look forward to. Hopefully tipping with cryptocurrencies will soon be as easy as sending a message.

Images courtesy of Twitter.

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Cryptocurrency Tips on Telegram Reach 500,000 Milestone in Just a Year - BeInCrypto

New York, NY, 12 November 2019 At New York Consensus Invest Summit, Evercoin Inc. today announced Evercoin 2, the safest hardware wallet. Evercoin 2 provides a wallet and exchange for bitcoin and other cryptocurrencies featuring a hardware wallet the size of a house key powered by YubiKey 5ci, the first implementation of its kind. Prior to this, users wanting hardware security relied on large, difficult to use and not mobile-first first-generation hardware wallets like Ledger and Trezor. Now every compatible YubiKey owner can download a free hardware wallet.

Evercoin provides all of the financial services users expect from a service like Coinbase, but for the first time ever in a mobile wallet, secured by hardware and fully controlled by the user. Evercoin currently supports 20 assets including Bitcoin and Ethereum.

Crypto users arent safe. Here are some of the threats we can address with the new combined offering from Evercoin and Yubico:

Hack attacks : hackers can gain access to private keys, the result can be total loss of all assets.

Exchange hacks : crypto exchanges can be hacked or go out of business causing loss of funds.

Key loss : users can lose all of their assets by forgetting private keys, losing paper wallets, exposing keys to bad actors, losing hardware devices. Chainalysis estimates that 2-3 million bitcoins have been lost permanently in this way.

Other user errors : users can input the wrong address when sending transactions

Volatility : volatility of crypto prices can dramatically crash the value of user assets.

ID Theft : hackers can steal a users account and identities thus enabling a host of attacks on the users accounts and assets.

Wrench attacks : attacks involving a physical threat to your person. Phishing Attacks : user email and social networking accounts can be compromised and information and assets can then be stolen from their friends and social network.

Evercoin 2 helps keep users safe from all of these issues with these safety features:

Stopping Hack Attacks: (Hardware Security) : Users are protected from hackers by YubiKey (a small key-like device) which cryptographically secures user funds.

A Hardware Wallet such as Ledger or Trezor will provide hardware security, but the following features are unique to Evercoin, especially in combination:

User Funds Protected From Exchange Hacks : the Evercoin exchange is non-custodial so users keeping funds in Evercoin can never lose their funds to an exchange hack. Your keys, your crypto.

Protects Users From Key Loss ( Wallet Back-up & Recovery ): Users are protected by patent-pending, non-custodial, user-friendly back up of walletsenabling recovery from lost phones, lost YubiKeys and even lost passwords.

Prevents User Error : Evercoin provides the easiest to use hardware wallet which is literally like using a card key to a hotel room. Insert to unlock and remove to lock. Integrated exchange and QR codes reduce error-prone typing or pasting complicated addresses.

Allows Users to Respond to Volatility (Mobile Exchange) Sudden changes in the market can destroy the value of your assets. Instantly and securely exchange assets on-the-go with a YubiKey that fits on your key ring and your mobile phone.

Stops ID Theft: (iPhone and Android Biometrics): because Evercoin is smartphone based, it can take advantage of biometric fingerprint and face ID in ways that purpose-built hardware wallets cannot. By combining passwords with biometrics and hardware security, we can provide the worlds safest ownershipexperience.

Avoid Wrench Attacks : yubikey is small and inconspicuous unlike most hardware wallets. Nobody will know you are storing crypto.

Block Phishing Attacks ( YubiKey ): by using an unmodified YubiKey, users can also benefit from securing all of their email and password protected accounts with YubiKey.

Evercoin users deserve peace of mind. We protect users from hackers with YubiKey hardwarebut we also protect them from accidents when they have lost their phone, their YubiKey, or their password said Talip Ozturk , Founder, CEO of Evercoin. Accidents do happen, and we want to ensure that funds are always safe and recoverable.

Evercoin is working with Yubico, developer of the YubiKey, a trusted hardware security provider with millions of users. Evercoin 2 provides the first-ever hardware wallet using the new YubiKey 5ci (for iPhone and USB-C for Android). All existing owners of YubiKey 5ci can get hardware wallet capabilities just by downloading Evercoin from http://evercoin.com. Another advantage is that YubiKey is a general-purpose security deviceso Evercoin users can also use YubiKey to secure their password managers,messengers and email,social media and any number of other compatible authenticationsystems, thus providing 360 degree protection from indirect hack attacks like phishingor ID theft.

# # #Media ContactMiko Matsumuramiko@evercoin.com

About EvercoinEvercoin is a Silicon Valley based startup founded and led by Talip Ozturk, the creatorof Hazelcast, a popular open source in-memory distributed database in use at thebiggest financial services companies in the world. Having seen the power of opensource at some of the largest banks in the world, Talip was inspired to join thecryptocurrency movement which combines his love of open systems and distributedgovernance with his experience in large-scale high-performance financial infrastructureand distributed computing. Evercoin provides the worlds safest cryptocurrencyownership experience including a mobile hardware wallet, account recovery andbiometric identification.

Bitcoin.com is your premier source for everything Bitcoin-related. We can help you buy bitcoins and choose a bitcoin wallet. You can also read the latest news, or engage with the community on our Bitcoin Forum. Please keep in mind that this is a commercial website that lists wallets, exchanges and other Bitcoin-related companies.

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Evercoin Launches Bitcoin and Cryptocurrency Hardware Wallet - Bitcoin News

NEW YORK, Nov. 12, 2019 /PRNewswire/ -- Chainalysis, the blockchain analysis company, today announced the launch of Chainalysis Kryptos, new software designed to help financial institutions better understand the risks associated with existing cryptocurrency activity and opportunities for investment. Built on the reference data standard already trusted by government agencies across the world and more than 115 leading cryptocurrency businesses, Kryptos enables financial professionals to connect the dots between traditional financial transactions and cryptocurrency markets.

In September, Chainalysis polled 350 finance professionals and found that nearly half believe Bitcoin will be the investment class with the highest growth rate over the next 12 months, ahead of equities, fixed income, and the house pricing index. Despite their belief in Bitcoin's growth potential, many also expressed concerns about the ability to control illicit activity facilitated by cryptocurrency and to comply with regulations, and many aren't sure how many of their customers transact with cryptocurrency today.

Kryptos provides transparency into cryptocurrency markets and players so financial institutions can allay these compliance concerns, better understand their current risk exposure, provide banking services to cryptocurrency businesses, and build foundations for expansion into the asset class.

"We've heard grass roots excitement for cryptocurrency from financial institutions for years, and now we're focused on breaking down the barriers to entry," said Michael Gronager, Co-Founder and CEO, Chainalysis. "Finally, financial institutions can access the transparency they need to fulfill their compliance responsibilities, meet customer demand, and seize the market opportunity they already believe in."

"Chainalysis Kryptos is a powerful tool for institutions to use to evaluate the risk profile of global industry participants and to measure their counterparty risk," said Michelle Sabins, SVP Managing Principal, Silvergate. "Access to this information in a standardized way will help institutions in this space make informed business decisions regarding who they do business with, while leveraging the power of blockchain analysis."

Kryptos provides a view into Know Your Customer (KYC) practices and blockchain transaction data for the world's top cryptocurrency businesses. Users can access information about exchanges' business operations, country of operation, cryptocurrency assets supported, blockchain transaction activity, and counterparties. They can also quantify their risk exposure across wire transfers or credit card transactions with detailed company information that they can run through existing transaction monitoring systems and risk models.

"Our data puts us in a position to help financial institutions enter the cryptocurrency market safely and responsibly," said Jonathan Levin, Co-Founder and Chief Strategy Officer, Chainalysis. "Not only does Kryptos help them mitigate risk and access new high-growth markets, but it will also help cryptocurrency businesses build trust with their banks. All players in the cryptocurrency ecosystem stand to benefit from increased transparency."

Kryptos is now available in Beta and will become generally available in early 2020.

About ChainalysisChainalysis is the blockchain analysis company. We provide compliance and investigation software to the world's leading banks, businesses, and governments. Our experts in financial crime and economic analysis empower our customers to derive insights they can act on. Backed by Accel, Benchmark, and other leading names in venture capital, Chainalysis builds trust in blockchains. For more information, visit http://www.chainalysis.com.

SOURCE Chainalysis Inc.

http://www.chainalysis.com

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Chainalysis Launches Kryptos to Help Financial Institutions Uncover Cryptocurrency Opportunities and Risks - PRNewswire

The cryptocurrency gold rush has produced a lot of jobs, with the share of cryptocurrency jobs per million rising 1,457% over the past four years, according a study by job site Indeed.com.

Despite drastic price fluctuations (Bitcoins volatile value shot up more than 230% in the first six months of 2019 to above $12,000 per Bitcoin) and nearly half of companies citing regulatory uncertainty as a major barrier to blockchain adoption, employers continue to ride the wave and invest in blockchain tech and talent.

Mark Zuckerberg, for instance, wants to launch Facebooks Libra, a new global cryptocurrency, in 2020. And digital payment giant Square recently assembled a crypto-focused team, Square Crypto, with the goal of strengthening the Bitcoin ecosystem. You will also soon even be able to spend Bitcoins at Starbucks through a new exchange app that converts digital assets into dollars.

Indeed analyzed millions of job postings on Indeed.com to unpack how Bitcoin, cryptocurrency, and blockchain trends have affected the job market.

Above: Cryptocurrency job trends.

Image Credit: Indeed

Searches for Bitcoin, blockchain, and cryptocurrency roles are going down yet employer demand has skyrocketed. According to Indeed, in the four-year period between September 2015 and September 2019, the share of these jobs per million grew by 1,457%. In that same time period, the share of searches per million increased by 469%.

In the past year, the share of cryptocurrency job postings per million on Indeed.com has increased by 26%, while the share of searches per million for jobs has decreased by 53%. Bitcoins volatility seems to correlate with job seeker interest, and the change in Bitcoin price this year might be why job searches have declined.

Employers, however, are doubling down on the technology, which uses decentralized ledgers to produce secure and transparent transactions.

So employer demand for tech roles related to Bitcoin, blockchain, and cryptocurrency is high but what are those jobs?

From coding smart contracts to designing user interfaces for cryptocurrency apps to building decentralized applications (dApps) that communicate with the blockchain, theres no shortage of work to be done in the cryptocurrency field.

For a better chance at landing one of these roles, you should be a programmer. And you should familiarize yourself with basic cryptography, P2P networks, and a language like C++, Java, Python, or JavaScript (along with certain soft crypto skills).

To stand out, you should learn new blockchain development languages, like Hyperledger, Bitcoin Script, Ethereums Solidity, the Ripple protocol, or even languages currently in development like Rholang.

The top hirers are as follows: Deloitte, IBM, Accenture, Cisco, Collins Aerospace, Ernst & Young, Coinbase, Overstock, Ripple, Verizon, Circle, Kraken, ConsenSys, JP Morgan Chase, and Signature Bank.

Software roles make up the highest percentage of cryptocurrency jobs. Since blockchain technology has expanded well beyond the financial sector, youll see a sprinkling of crypto startups, but also bigger, more established firms not directly related to cryptocurrencies (or even the financial industry at all).

Two of the Big Four accounting firms make the top 10, along with tech giant IBM. Why? Earlier this year, EY launched a new cryptocurrency tax accounting tool for investors, and consulting firms are hiring blockchain talent to advise clients on how to apply these new technologies. IBM is also making waves with IBM Blockchain World Wire, a blockchain network that clears and settles international payments in near real time.

Not surprisingly, five companies related to cryptocurrency Coinbase, Ripple, Circle, Kraken, and ConsenSys made the list. Only ConsenSys made the top 10 in the previous list of Bitcoin hirers from May 2019.

Financial companies are hiring a lot of blockchain and cryptocurrency talent and are designing their own dollar-backed digital coins. Signature Bank (No. 15), for example, built its own blockchain platform, Signet, to allow its clients to move money around in 30 seconds, 24/7 by converting dollars to Ethereum-based tokens known as Signets.

Given blockchains potential, companies outside the traditional finance ecosystem are starting to adopt it for use in supply chain management, ecommerce, telecommunications, and beyond.

Collins Aerospace (No. 5), for example, is an Iowa-headquartered company that provides solutions for the aerospace and defense industries. Its using blockchain technology to make complex global supply chains more efficient and to protect defense and space-related data from cyber attacks.

Another company you might not expect to be hiring a lot of cryptocurrency talent is online home goods retailer Overstock.com (No. 8). However, this makes sense because it was the first major retailer to accept Bitcoin as a form of payment, starting back in early 2014. The company now accepts all major cryptocurrencies and has since founded a venture capital arm, Medici Ventures, to accelerate blockchain innovation.

As Bitcoin, blockchain, and the cryptocurrency industry continue to enjoy rapid growth and widespread adoption, companies of all sizes and from all industries have been ramping up hiring over the last year.

That trend is likely to continue through 2020, even in the face of extreme price volatility and regulatory uncertainty around cryptocurrency.

And while Bitcoin and other cryptocurrencies might currently function more like assets than true currencies (theres not much you can actually buy with them), thats changing as major retailers begin accepting digital tokens and more unique use cases for these technologies pop up.

With employers investing heavily in Bitcoin jobs and cryptocurrencies becoming more accepted and accessible, blockchain tech appears to be here to stay, Indeed found.

Indeed.com analyzed the percentage change in the share of job postings and share of job searches per million for roles related to Bitcoin, cryptocurrency, and blockchain during the time period specified.

The most in-demand roles related to cryptocurrency were identified by calculating the percentage of job postings related to Bitcoin, cryptocurrency, and blockchain during the specified time and ranking them in order based on the percentage of job postings for those roles from October 2018 to September 2019.

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Indeed: Share of cryptocurrency jobs grew 1,457% in 4 years - VentureBeat

"They all present challenges to law enforcement in terms of identifying and tracing criminal assets."

She said cryptocurrency in particular had "changed the landscape" of criminal enterprise, because it had made it easier to transfer large sums of money between jurisdictions.

Cryptocurrencies are not controlled by governments but are instead freely traded using blockchain technology, which keeps a record of their movement and prevents digital counterfeiting.

Ms Gough said by sharing their experiences with dealing with cryptocurrencies, law enforcement agencies would hopefully come away from the conference with a better idea of how to effectively stop their use by criminals.

"It enables us to talk about the cases we encounter, the difficulties that weve faced, the technology thats being utilised by criminals, to share those skills and leverage expertise," she said.

"Disrupting organised crime syndicates and networks through the seizure of money is an incredibly effective way of taking away the criminal wealth that is derived."

Over the last 10 years the the joint Criminal Asset Confiscation Taskforce has seized $435 million in criminal proceeds, some of which was in the form of various cryptocurrencies.

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Earlier this year, AFP officers shut down two digital currency exchange businesses run by a Melbourne man who was allegedly using cryptocurrency to import drugs into the country.

Funds seized by the Taskforce are used for a range of purposes, including funding the ongoing wastewater monitoring program, which accurately measures the overall rate of drug use in the community by testing sewage.

Ms Gough said they hoped not to wait 10 years between conferences next time, with the rate of progression in criminal technology getting faster all the time.

"Technology is rapidly evolving and it does require the constant attention of law enforcement efforts both in Australia and globally, to work together to ensure the technology utilised by criminals can be matched by law enforcement," she said.

"Thats what this conference is about learning about the technologies that exist, learning about ways law enforcement has been effective in dealing with such technologies."

Stuart Layt covers health, science and technology for the Brisbane Times. He was formerly the Queensland political reporter for AAP.

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Halting illegal cryptocurrency use the focus of major crime conference - The Age