Seoul to debut blockchain petition system in March

Seoul is set to launch its blockchain-powered petition system on March 1. The system will enable the residents of the city to air their views and share them with the local government. It will replace the existing system which has been marred by claims of fake identities and vote manipulation.

Known as Democracy Seoul, the new system will give the residents of South Korea's capital the opportunity to turn the government's attention to issues that affect them. A resident will be able to propose any issue on the platform and if it gets at least 1,000 votes from other residents, the city's Mayor Park Won-soon will have to address it. This system will be similar to an existing national system that allows South Koreans to air their issues with the government. Once an issue receives 200,000 votes, the national government has to address it.

The national petition system, as with any other online voting system globally, has been marred by accusations of vote manipulation and fake identities. As Decrypt reports, experts have unearthed that it's quite easy to deceive the system, even with little technical expertise. All one needs to cast a vote multiple times is to use a different username and internet service provider.

The use of blockchain will eliminate the authenticity challenge, with the technology being used to verify the identity of every person who votes, preventing duplicate voting. Blockchain will also give the system more transparency, giving the residents more trust in the system.

The blockchain system comes just a fortnight after the Seoul Mayor lowered the threshold number of votes required for the government to respond from 5,000 to 1,000. This will make it possible for the government to respond to more issues. According to a report by the Maeil Business Newspaper, Democracy Seoul has registered over 5,900 civic proposals since it launched in October 2017. 59 of these proposals have gone on to become official city policies.

As Seoul launches its blockchain petition system, South Korea is working on its national blockchain voting system. Announced in November 2018, the system provides real-time visibility of the voting process, making the system more credible. The system incorporates other emerging technologies including the Internet of Things, artificial intelligence and big data.

Finland officials confounded over confiscated crypto

Finland has a problem many people wish they had. Finnish authorities are sitting on millions of dollars' worth of cryptocurrency and they don't know what to do with it. The currency was seized from criminals years ago, and the government is debating over the best way to liquidate the proceeds. So far, it can't figure out the best way to do it.

According to local media, the Finnish Customs Service has 1,666 BTC that it confiscated from drug dealers several years ago. It doesn't specify when the seizure(s) may have occurred, but says that the confiscated amount was worth around $760,000 at the time. Today, that amount would be worth around $15 million. While other countries find ways to liquidate seized crypto, the Customs Service isn't sure it wants to, but it's logic for hesitating leaves a lot to be desired.

According to the government agency, liquidating the assets would put them back onto the crypto market, where they could once again find their way into the hands of criminals. The repeated excuse that crypto is bad because it facilitates criminal activity has already been shown to be lacking in any substantial foundation by several studies and, if that were a legitimate reason for not liquidating assets, the government would never liquidate any type of assets – real estate, vehicles or more – because they, too, could end up in the hands of criminals.

The solution is simple. For the crypto assets to be calculated, they have to be held in wallets. For the assets to be sold, they have to be exchanged from one wallet to another. Therefore, record the transactions, record the wallet addresses and order the recipients to register any future exchanges or sales with financial authorities or face legal repercussions.

In other parts of the world, government agencies are more than willing to sell confiscated digital currency. The US Marshal's Office has created an almost regular practice out of it and has regularly held auctions to convert digital currency to fiat. However, it may wish it had not been so anxious. If it had held onto all the crypto it has seized, it could have potentially gained as much as $1.7 billion through value increases.

Canaan Creative enters strategic partnership with Northern Data

Crypto mining firm Canaan Creative has announced it has teamed up with blockchain firm Northern Data in a wide ranging strategic partnership.

According to the announcement, Canaan will work alongside Northern Data to pool resources and expertise towards developing on a number of technological and operational fronts. The cooperation will include work on artificial intelligence, blockchain development and data center optimization at scale.

NG Zhang, CEO at Canaan Creative, said the partnership would help the firm expand into new markets, as well as fostering technological advancement: "Our R&D team is collaborating with Northern Data. Both sides have achieved positive results. In addition, Northern Data will provide computational resources support for our overseas R&D in the U.S. Canaan looks forward to further cooperation in product development, AI, and high-performance computing."

Canaan Creative is the second biggest manufacturer of crypto mining equipment in the world. Northern Data specializes in developing high power computing infrastructure, including for blockchain technologies.

Aroosh Thillainathan, CEO of Northern Data AG, said the partnership would help unlock the "massive potential" of blockchain technology.

The partnership follows on from a similar arrangement reached by Northern Data in recent weeks with SBI Crypto, a subsidiary of Japanese financial giants SBI Holdings.

It comes ahead of the firm's plans to launch a new data center in Texas, which will power one of the world's largest crypto mining firms, with a capacity of up to 300 megawatts.

DOJ uses Larry Harmon charges to warn other crypto criminals

Larry Dean Harmon stands accused of committing money laundering for his role in the Helix tumbler and mixing service offered on AlphaBay, a darknet site. For those wondering how these services run afoul of the law, the U.S. Department of Justice (DOJ) has helpfully released their side of the story, clearly laying out what Harmon allegedly did.

For those who don't know what a coin mixer or tumbler do, these service allegedly offer to obscure the traceability of cryptocurrency. While they advertise that this increases privacy for users, it can also be interpreted as a form of money laundering, particularly when the transactions being obscured are for illicit purposes. That's what the DOJ is highlighting in this case.

"Helix allegedly laundered hundreds of millions of dollars of illicit narcotics proceeds and other criminal profits for Darknet users around the globe," said Assistant Attorney General Brian A. Benczkowski of the DOJ's Criminal Division.  "This indictment underscores that seeking to obscure virtual currency transactions in this way is a crime, and that the Department can and will ensure that such crime doesn't pay."

The bottom line is that due to the traceability of blockchains, these tumblers don't work as well as some hope they would. "For those who seek to use Darknet-based cryptocurrency tumblers, these charges should serve as a reminder that law enforcement, through its partnerships and collaboration, will uncover illegal activity and charge those responsible for unlawful acts," said U.S. Attorney Timothy J. Shea of the District of Columbia.

The charges against Harmon suggest he helped launder as much as $3.7 billion in crypto, if calculated at today's prices. He offered the service through Helix, which appeared on the AlphaBay darknet site. He specifically advertised his services as a way to avoid the prying eyes of law enforcement.

"The brazenness with which Helix operated should be the most appalling aspect of this operation to every day citizens. There are bad actors and then there are criminals who facilitate hundreds of other crimes," said Don Fort, Chief, IRS Criminal Investigation. "The sole purpose of Harmon's operation was to conceal criminal transactions from law enforcement on the Darknet, and because of our growing expertise in this area, he could not make good on that promise."

Time will tell if the DOJ can make their charges stick on Harmon, but the evidence looks to be on their side. What authorities have proven is that no matter how criminals try to obscure their transactions, the law will always have a way of tracking them down.

$10K Bitcoin Prompts Influencers to Call a Bull Market

Cryptocurrencies have gained significant value over the last few weeks and it's causing exuberance among digital currency proponents. Now a number of traders and influencers believe bitcoin and other coins are in bullish territory. Despite the surge to $13K last July and the deep pullback that followed, BTC investors and influencers have no issue believing that crypto is on the threshold of another bull market.

'Calling the Bull' Is a Bold Move, But a Number of People Are Doing So After BTC Surpasses $10K
Bitcoin traders, analysts, and thought leaders on social media and forums seem to think that the crypto market is facing another bull run. Statements about a "bull market" and a possible "altcoin season" are littered all over Twitter and news articles about the cryptoconomy's swift rise. You can find a number of crypto influencers explaining that the bitcoin bull market is overdue for a variety of reasons.

Some people claim the reward halving is pushing BTC's price up, they say miner capitulation is over, the BTC hashrate has touched an ATH, and most of the non-ideological investors capitulated. Moreover, lots of crypto investors are stressing that "this time is different" even though they know calling a bear or bull market requires judgment and is considered a bold call. But this hasn't stopped a number of crypto's influential figures from doing so.

"Early signs of a bull market," explained @American_hodl on Wednesday. "I am finding myself explaining bitcoin to skeptics and new entrants again. This did not happen during the bear. During the bear, it was just us here."

However, other people disagree with American_hodl and the others who assume the market has turned bullish. Some individuals have certain price points that need to be obtained until they call the bull. "We aren't in a bull market until we close above $10.7k," emphasized @llamamarket. "So I'm patient but it looks more likely I was wrong about $5k at least at this very moment. I'll keep everyone posted if/when I buy." The specific price point at which a bull market occurs has been a trend lately and the crypto influencer Luke Martin touched upon the subject on February 6, tweeting:

Fun observation about BTC in a bull-market is the post each day stating: 'Bitcoin isn't bullish until we cross $10k' which quickly turns into 'Not bullish until we cross $11.6k' which quickly turns into 'Not bullish until we cross $14k,' which turns into 'Not bullish until…'

Bullish Pomp Tweets 'Altcoin Season' Phases, and Never Shorting the Bull
Anthony "Pomp" Pompliano, the well known cofounder of Morgan Creek Digital Assets has been talking about the bull run lately too. On Twitter, Pomp felt the need to give an "important message as we enter the next bitcoin bull market." Pomp explained: "BTC is very volatile, you can lose all of your money, only invest what is ok to lose, Twitter is not investment advice, don't buy BTC with credit cards, keep low time preference, [and] do your own research." When BTC crossed the $10K zone, Pomp let his 309,000 Twitter followers know that he still thinks "bitcoin will hit $100,000 by end of December 2021." In between all the social media and forum discussions about the bull market, a number of individuals say that "altcoin season or altseason" typically happens before the BTC bull market or comes in phases.

Managing partner at Blocktown Capital, Joseph Todaro, discussed the altseason topic and the next bull market on Wednesday. "This is the first altseason of the next bull market," Todaro tweeted. "You only get 3 real altseasons: The early alt pump when bitcoin is still less than ATH (weak), the mid alt pump after bitcoin passes ATH ~$20k (strong), [and] the late alt pump as bitcoin marks cycle top (strong). Bitcoin just hit $10,000." Todaro also quipped and said:
"You know we are in a bull market when Peter Schiff refuses to tweet about bitcoin."

Despite knowing about the prior BTC price dump after July's $13K high, bitcoiners everywhere are still calling the bull after the $10K position was reached. "Bitcoin is currently in an intense bull market and investors are getting excited," another individual tweeted on Wednesday.

"Never short bitcoin in a bull market," explained the BTC thought leader Whale Panda on Tuesday. "Never short bitcoin, period," the popular Twitter account @Arminvanbitcoin replied to Whale Panda's statement. Crypto Twitter influencer Paul McNeal from thecryptocurator.com tweeted to his 20,000 followers about the bull market situation as well: "Market Cap goes up – Bitcoin dominance goes down — Welcome to the bull market of 2020."

This week in crypto

A recompilation of some of this week's cryptocurrency activity shows that the Bitcoin ecosystem is rapidly evolving in 2020. Just barely a month has been put in the books, but not a day goes by without some advance being seen in crypto technology, regulations or operations. As the first week of February comes to a close, it is becoming more apparent that this year is going to see a lot of positive action as digital currencies continue to play a more prominent role in finance.

Despite India not yet knowing how it wants to view the crypto world, at least one exchange is willing to weather the storm and see what happens. Zebpay has announced that it will make a return to the country after shutting down just a year ago over regulatory confusion. Perhaps this will be the year that the Reserve Bank of India wakes up and realizes that it can't stop progress.

While they are at varying stages of addressing the technology, more central banks than ever are broaching the subject of central bank digital currency (CBDC). According to a recent study, four countries have already launched a CBDC, nine have something in development and five more are looking at pilot projects to break into the industry. It's only a matter of time before digital currency becomes as mainstream as email and streaming TV.

Some crypto companies in the UK are going to soon have to start shelling out more money to operate in the country. The Financial Conduct Authority has released a new fee schedule that will force companies with income of up to £250,000 (a little less than $327,000) to pay around £2,000 (about $2,600), while those that earn over that amount will be charged £10,000 ($13,000). The agency justifies the charges as being aligned to what is needed to properly oversee the industry.

Bitberry, a South Korean crypto wallet that has strong ties to the Upbit crypto exchange, is shutting down at the end of this month. It argues that its profits have weakened to the point that keeping the wallet running is no longer economically viable, and urges users to withdraw their funds before it's too late.

It comes as no surprise to anyone that Venezuela's Petro is falling flat. Even domestically, no one wants to have anything to do with the state-backed supposed stablecoin, and many merchants won't even allow the currency to be used for payments. Also as no surprise, the growing sentiment in the country is that Petro is nothing more than a scam.

A lawyer who worked for the fraudulent OneCoin project wants to be vindicated. He has been convicted for being involved in the company as it laundered over $400 million, but claims he's innocent and wants a judge to throw out the charges. His argument is that he wasn't aware of what was going on and only rarely met with the alleged masterminds behind the fraud. However, he probably won't find a lot of sympathy, as court testimony showed that he had moved massive amounts of money between bank accounts in various countries.

Despite certain exchanges' attempts at suppressing Bitcoin SV (BSV) last year, the digital currency's market position shows that it has prevailed. It gained 43% last month, more than any of the other top coins, and will only continue to improve over the long-term, thanks to the recently completed Genesis upgrade. As simply as that, BSV now has no hard cap in place for block size and has unlimited scaling capabilities – positive claims that no other crypto blockchain can make.

The fight between the US Securities and Exchange Commission (SEC) and Telegram lingers on, with the financial regulator launching one accusation after another at the global messaging platform and its GRAM token sale. The SEC has asserted that Telegram never developed a usable product for which the GRAMS had been offered, but the company showed this week that this wasn't the case. It released a white paper, providing the backstory to the Telegram Open Network blockchain, and what work has been done to move it forward.

While some countries appear to be ready to step lightly into the crypto space and others are determined to see it go away, Australia is one of the few countries that has seen the future. Establishing a number of regulations and laws that will help the ecosystem flourish, the exchanges that enter the fray are willing to play by the rules and allow the market to evolve as a viable and legitimate offering. It's only a matter of time before other countries are forced to follow suit.

Police arrest 10 in $6.6M Israeli crypto scam

European authorities have arrested 10 suspects accused of defrauding over $6 million from tens of investors. The suspects conducted a crypto pyramid scheme targeting investors in several European countries, including France, Belgium and the U.K. The arrests are the culmination of an extensive investigation that began in 2018.

The investigation was led by Europol and Eurojust, EU agencies that focus on law enforcement and criminal justice cooperation respectively. In a press release, Eurojust indicated that the scheme had defrauded 85 investors, mainly from France and Belgium, although it was based in Israel.

The scheme targeted its victims by phone, promising them incredible returns of up to 35% for a small investment. In a classic pyramid scheme technique, the fraudsters paid off the initial investors using money raised from late-stage investors. The initial payments led many of the investors to stake more money and recommend the scheme to others.

However, after some time, the payments stopped, as they always do. The criminals began to channel all payments into bank accounts belonging to several fake companies in Asian countries and Turkey.

Investigations into the crime ring started in 2018, with Eurojust issuing investigation orders to authorities in the U.K., Bulgaria, Spain, Hungary, Portugal and the Czech Republic to assist with the investigations. In January last year, the authorities made the first arrests, bringing in four suspects arrested in France. Europol also partnered with authorities in Luxembourg to seize $1.1 million.

This is the latest case of crypto fraudsters being brought to book. In January alone, tens of crypto fraudsters have faced the law in connection to millions of dollars lost through crypto scams. The DoJ, for instance, recently charged two alleged fraudsters for using fake identities to raise over $30 million in an ICO. The two were behind CG Blockchain, a company that claimed to develop blockchain auditing tools.

The SEC, on the other hand, charged ICOBox with the issuing of an unregistered ICO in which it raised $14 million. Just days prior, it had charged a San Diego, California man for defrauding $3.5 million from investors in a cloud mining scam.

The law enforcement actions are a positive sign for the crypto industry as it indicates the authorities are cracking down on the rampant crypto scams. Once the industry sheds the scammers, it will appeal to more people and likely attract government support.