Korea university to build blockchain and AI campus

A South Korean university has announced that it's building a blockchain and artificial intelligence (AI) campus in the city of Daegu. The campus will take a year to construct, with admission set to begin in 2021.

Suseong University partnered on the initiative with the Korea Artificial Intelligence Association (KORAIA). In an announcement on local outlet Money Today, the university revealed that the campus will also focus on other emerging technologies such as big data and cloud computing.

A number of technology companies based in Daegu have already signed up to be part of the project. They will provide training to the students, as well as practical experience. They include Wooshin Co. Ltd, an AI company based in Daegu.

The COVID-19 crisis has created a need for more robust systems, and combining blockchain with AI is the best way to respond to this need, according to Kim Kun-woo, the university's Planning and Coordination Division director.

Kun-woo further revealed that the university intends on giving students at the campus firsthand experience in the blockchain and AI industries by pairing them up with experts in these fields.

South Korea has been a global hub for blockchain technology, with the government playing a key role in the industry's development. As CoinGeek reported recently, the country launched a fintech sandbox that has promoted the growth of several blockchain startups. In its latest report, the Financial Services Commission revealed that the sandbox has attracted $111 million in the last year and created 380 jobs.

Elsewhere, the country's central bank published a report that touted the use of blockchain-based digital currencies. The Bank of Korea pointed to the decline of cash use and the advancement of digital payment technologies as key reasons why central banks are increasingly developing CBDCs. The report further claimed that several central banks have developed IT systems that rely on DLT to record digital currency transactions.

JPMorgan agrees to settle digital currency fee lawsuit for $2.5M

U.S. banking giant JPMorgan Chase Bank has agreed to a settlement in the amount of $2.5 million to end an ongoing class action lawsuit over digital currency fees.

The case was raised by bank customers after it emerged the bank had decided to charge digital currency transactions as if they were cash advances, attracting higher fees than other types of transactions.

Such transactions were historically charged as purchases until 2018, when the bank unexpectedly switched to treating digital transactions as advances. The case was raised by Brady Tucker, who was joined shortly thereafter by Ryan Hilton, Stanton Smith, and other Chase customers.

While the settlement sees no acknowledgement of wrongdoing, the plaintiffs have welcomed the flexibility of the bank in reaching a conclusion to the matter.

In a statement on behalf of the plaintiffs, Tucker said the settlement was a good outcome to the case.

"This settlement represents an outstanding result for settlement class members. Plaintiffs estimate that the $2.5 million settlement fund constitutes more than 95% of the [damages allegedly sustained by] settlement class members. Such a high-percentage recovery stands far above the typical recovery for class actions such as this one."

The settlement brings the legal action to a close, and brings an end to the matter for the thousands of bank customers previously affected by higher card fees for their digital currency transactions.

In February 2018, JPMorgan Chase was among several major banks to announce it was no longer allowing its credit cards to be used to purchase digital currency. During the case, the bank claimed this was not a breach of consumer protection laws.

More recently, the bank has appeared to soften its stance towards digital currency, with JPMorgan even extending banking services to digital currency firms including Coinbase and Gemini.

Happy Bitcoin Pizza Day! But don’t think about the fees

Happy Pizza Day! And this year, please make mine extra spicy. Yes, it's May 22 again, the day all Bitcoiners celebrate by ordering a pizza. Any pizza is good, but to make it special you'll need to buy it with Bitcoin—don't make the mistake of using BTC these days though, because at the time of writing the average transaction fee on the BTC network is US$6.28.

What is Pizza Day and why is it significant?
Today is actually the 10th anniversary of Bitcoin Pizza Day. It's significant because it marks the first (or at least, the first documented) purchase of real-world goods with Bitcoin. Before then, mining and transacting with Bitcoin was largely a hobbyist pursuit, so the purchase proved that Bitcoin could have a real-world dollar value. This in turn sent a price signal to the nascent "market" for Bitcoin, and became the first benchmark for BTC value. The rest, as they say, is history.

On May 18, 2010, Laszlo Hanyecz of Jacksonville, Florida, posted on the Bitcoin Talk forums:
"I'll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day. I like having left over pizza to nibble on later. You can make the pizza yourself and bring it to my house or order it for me from a delivery place, but what I'm aiming for is getting food delivered in exchange for bitcoins where I don't have to order or prepare it myself, kind of like ordering a 'breakfast platter' at a hotel or something, they just bring you something to eat and you're happy!"

It took a few days to finally get a taker—user "jercos" (Jeremy Sturdivant) ordered two large pizzas from Papa John's for delivery to Hanyecz's home, paid in USD and collected the 10,000 BTC. The pizzas themselves cost US$41.

You can see photos of the now-famous Bitcoin pizzas here.
Technically, Hanyecz didn't buy the pizzas directly for Bitcoin so you could say the price included Sturdivant's service fee. Since the Bitcoin price in May 2010 was officially $0, he did take on a $41 risk.

As we now know, that risk paid off—the current market value of BTC is $9053, meaning either owner of the 10,000 coins would now have US$90,530,000. If BTC's all-time-high price stands at $19,891 then 10,000 coins would've been worth $198,910,000. Had they kept those coins in time for the two forks that shifted Bitcoin protocol development to BCH and finally to Bitcoin SV (BSV), it would be millions more.

Only BSV now is Bitcoin according to the Satoshi Nakamoto whitepaper and the original protocol, and 10,000 BSV is currently US$1,915,900.

Million-dollar pizzas, but value is priceless
Yes, that's an expensive pair of pizzas (for pedantic reasons, remember it was two large pizzas instead of the single "198 million dollar pizza" often mentioned in the media). Naturally, Hanyecz often finds himself in demand for a quote on whether he regrets his purchase. He's on the record as saying he doesn't at all, since his move kickstarted the Bitcoin economy. Had he not sent those 10,000 coins, and had no-one else taken the plunge either, Bitcoin's value could still be $0 today.

It's a sign that, unless people are willing to take risks and do something to give Bitcoin value, it doesn't have any. What if Hanyecz had abided by BTC's "HODL" mentality, or cared about all the people who called him crazy over the years, reminding him of his (theoretically) lost millions?

Most people who've been in the Bitcoin community for many years have "Bitcoin Pizza" stories of their own to tell. This writer likes to show off his "thousand dollar" Bitcoin keychain; everyone hates to be reminded of how much money they'd have now if they'd never spent those coins.

But again, if no one had ever spent Bitcoin then the value of Bitcoin would be $0. Bitcoin only has value if it's used in the real world. And thanks to the people who invested time, effort and money building user-friendly services so more people could use Bitcoin, that value has increased even more over time.

Think about all that next time you hear someone say "HODL" (ie: save your Bitcoins, don't spend them). HODLing creates no value whatsoever. BTC wouldn't even have speculative-gambling value if no-one sold them, and that's about the only utility BTC has nowadays. If you know any committed BTC HODLers, remind them how much that $6.28 transaction fee they just paid could be worth at some random point in the future. That's extra spicy.

BSV, on the other hand, recognizes real-world usage as the main value driver and its people build services that aim to solve real-world problems. The large-volume, low-fee model is creating a global immutable ledger for enterprises, and yet remains cheap enough to send individual transactions for cents, or much less.

But enough of that—Happy Pizza Day once again, and enjoy the food!

Bitcoin mixers see increased usage from darknet entities

A new report by Crystal Blockchain, the cryptocurrency analytic and transaction tracing platform created by Bitfury, reveals a number of statistics regarding darknet transaction flows between BTC mixing services, digital currency exchanges, and other darknet entities.

The Data
Crystal Blockchain's report "reviews the use of BTC by darknet entities; [as well as] analyzes darknet interactions with exchanges and other entities throughout the first quarter of 2020 and compares it to historical darknet activity from the past three years."

Ultimately, Crystal Blockchain found that the total number of BTC being sent and received by these exchanges has decreased, however, the total amount of USD has grown significantly.

Key findings
The report found that the amount of BTC sent to digital currency mixing services—services that mix digital currency funds from different sources together to obscure the trail back to the original source—rose by over 2000%. In Q1 2019, only $3 million (790 BTC) was sent to mixing services by darknet entities, but in Q1 2019, that number rose to $67 million (7,946 BTC).

The research found that the amount of BTC received by darknet entities from mixing services had also increased by about 3x. Darknet entities received roughly $2 million in BTC (288 BTC) from mixers in Q1 2020, compared to the $400,000 (106 BTC) received from mixers in Q1 2019.

BTC sent to exchanges from darknet entities
From Q1 2019 to Q1 2020, the amount of BTC sent to digital currency exchanges from darknet entities decreased from 24% of all BTC to 13%.

"This is likely in response to increased regulation and verification processes for exchanges, leading darknet bitcoin owners toward other services to obfuscate the source of their coins," according to the report.

Darknet entities were using digital currency exchanges to liquidate their dirty money, but as more exchanges required users to verify personal identification information, and as more regulatory agencies kept an eye on digital currency companies that fall under their jurisdiction, exchanges became a less attractive option for darknet entities to convert their digital currencies for fiat.

The report found that the amount of BTC transferred between darknet entities increased by 161% from Q1 2019 to Q1 2020. In Q1 2019, only $21 million was transferred between darknet entities, while in Q1 2020, $55 million was transferred.

In conclusion
Crystal Blockchain's research shows that darknet entities are alive and active and that they are using BTC as a tool to maneuver their illicitly earned money.

"These statistics indicate that BTC continues to be a financial tool for darknet entities," says the report. "While more exchanges implement the FATF requirements, darknet users are trying to avoid the risk of unveiling of their activity by those exchanges. To hide darknet activities, they started to prefer mixing services to exchanges for withdrawal of cryptocurrency."

BTC remains a crucial tool and currency on darknet marketplaces—and government agencies know it. This has prompted authorities to crack down on digital currency exchanges and tracing funds back to their point of origin, which is causing darknet entities to use mixing services to mask their activity. Regardless, more and more money is being sent and received by darknet entities each year.

Embattled ABTCoin ICO can’t pay settlement costs

ABTCoin, a digital currency startup that was found guilty of violating federal securities laws, has just told New York federal judge Vernon S. Broderick that they cannot pay the $250,000 settlement that they agreed to pay plaintiffs.

$20 million ICO but financially struggling
On May 12, ABTCoins lawyers from Reitler Kailas & Rosenblatt LLC wrote a letter to U.S. District Judge Vernon S. Broderick saying the company was not able to pay the settlement cost that they proposed "due to a change in circumstances." The lawyers also added that ABTCoin was not able to cover their legal costs, and therefore, Reitler Kailas & Rosenblatt LLC lawyers were requesting to withdraw from the case.

This news comes as a surprise considering that ABTCoin raised more than $20 million in its 2017 initial coin offering (ICO). Before hosting a token sale, ABTCoin told potential investors that it was going to use the funds that they raise to create "the fastest blockchain in the world." However, upon release, the ABTCoin blockchain was not able to accomplish the technological achievements they had marketed. In addition, the ABT blockchain did not see very much user adoption and decreased in value by 85% by March 2018.

The lawsuit
After experiencing ABTCoin's technological shortcomings, investors in the project took action against the company.

Raymond Balestra, the lead plaintiff in the class-action lawsuit, sued ABTCoin, claiming that they had conducted an unregistered securities sale in 2017. ABTCoin attempted to have the case dismissed, but in March 2019, Judge Broderick rejected ABTCoin's dismissal bid, saying that the plaintiffs had adequately shown that ABTCoin had violated federal securities laws.

ABTCoin may have done this because they are making a legal chess-move, or maybe ABTCoin is out of money. It looks like the ABTCoin case is coming to a close—but backtracking on the settlement that they proposed themselves was unexpected. 

Judge junks $9M digital currency scammer’s COVID-19 defense

The founder of an alleged digital currency Ponzi scheme alleged to have scammed $9 million from unsuspecting investors has been denied a reprieve from custody, after citing health concerns over COVID-19.

Judge John Tuchi rejected an emergency motion for release from prison submitted on behalf of alleged digital currency scammer John Caruso of Zima Digital Assets, as he awaits trial on charges that could result in a five-year prison sentence.

Caruso said that the risks of COVID-19 meant that there was a health risk to his ongoing detention, in a motion considered by the court this week. Judge Tuchi denied the motion on the grounds that Caruso poses a significant flight risk, as well as highlighting the potentially larger risks of contracting COVID-19 in the outside world.

The denial is the second time the argument has been heard by a judge. Previously, Judge Michelle Burns pointed out that 28-year-old Caruso was healthy and unlikely to suffer adverse effects from coronavirus in any event.

The COVID-19 defense has been brought forward by a number of high profile prisoners in recent weeks, with legal representatives arguing over the risks to health for those detained in prisons.

However, in the Caruso case, both judges have independently opted to retain the accused in custody, pointing to his significant criminal history among other factors.

Caruso is accused of establishing the Ponzi scheme with his business partner Zachary Salter, offering investors the chance to secure market-beating returns from investing in digital currency.

While the scheme paid out an initial $1.9 million of the $9 million total taken in, the pair are accused of then using client money for personal gain, including racking up gambling debts $830,000, private jet and vehicle rentals of $540,000 and $670,000 in credit card bills.

Caruso is now awaiting trial, scheduled for July 2020.  

Chainalysis new initiative sheds more light into digital currency crime analyses

Blockchain intelligence company Chainalysis has announced a new initiative aimed at highlighting its work in identifying digital currency based crime.

The New York-based firm has published three installments of its new Crypto Intelligence Briefs, which is designed to cast light on the mechanisms used for illegal transactions in digital currency.

While none of the firms are currently under investigation, Chainalysis said it was publishing the information to support the activities of law enforcement agencies investigating digital currency crime.

In its first brief, Chainalysis spotlights Black Host, a hosting provider which describes itself as "bulletproof," by offering secure hosting anonymously. As part of its offer, Black Host supports crypto payments for its services, which in itself is another factor of pseudonymity for users.

The brief demonstrates that Black Host has been used by an individual or group linked to a BTC address known to be associated with the Lazarus Group, a well-known cybercrime gang with links to the North Korean state.

The second brief identifies Iranian exchange Farhad Exchange, which offers digital currency transactions in Iran and Russia, despite sanctions. Some 20,000 BTC addresses have been identified by Chainalysis, which are linked to the exchange, and could be involved in sanction breaking—including the potential for involvement in other criminal activity.

The third briefing looks at FutureNet, a Polish based company alleged to be a Ponzi scheme. Chainalysis shows a web of companies that have been set up to disguise the operations of FutureNet, and to provide what the briefing calls a "veneer of legitimacy" to the scam.

Each of the briefs provides extensive detail of Chainalysis research, which law enforcement and other compliance agencies will be able to use in any forthcoming investigations into the firms.

According to Chainalysis, the decision to publish was based on a desire to show its working in identifying those companies that may be engaged in digital currency crime.

Bitmain admits hardware problems with Antminer S17

Chinese processing hardware manufacturer Bitmain has admitted there are problems with its Antminer S17, following a growing number of complaints posted to social media.

The company acknowledged that some users were experiencing problems, the first time it has acknowledged the difficulties many of their customers had been reporting online. According to a spokesperson for the company, Bitmain was beginning to negotiate with customers who had run into difficulties with their hardware.

Antminer is paying close attention to the issues of some products from the 17 series, which has recently been mentioned by the media.

The issue first raised its head earlier this month, after an entrepreneur started a Telegram group to highlight what he described as a "bad batch" of S17 units. According to the group, some 30% of the models delivered had experienced serious glitches or failed within a single month of operation.

Having grown to some 160 members, the group now contains several other mentions of users experiencing problems with their units.

The reports echo similar findings published by blockchain infrastructure company Blockstream, which suggested 20-30% of S17 customers were experiencing problems with their technology. CoinGeek has also spoken to several to large transaction processing companies in the space that have confirmed this news, saying that they've also experienced "failure rates of 2-3x for the T17 units compared with the S9s" while "Bitmain have reduced and closed repair centers in various global locations."

The embarrassing acknowledgement comes as Bitmain prepares to ship out its latest batch of S19 units, which are expected to be delivered from May 11.

The S19 has been designed to process digital currencies more productively, ahead of the BTC halving due to take place soon.

According to the Bitmain representative, the company has "begun to negotiate solutions with customers who have encountered issues from the product. Antminer has always been adhering to the concept of placing customers first. If any customer has any product issues, please contact the official customer service of Antminer at any time."

Japan Implements Significant Changes to Cryptocurrency Regulation Today

Major changes are happening in the cryptocurrency space in Japan as new cryptocurrency regulation enters into force today. Among notable changes are the regulation of crypto custody service providers and crypto derivatives businesses. Japan has 23 regulated crypto exchanges; unregulated platforms have modified their terms of service affecting Japanese residents.

Japan Adopts New Way to Regulate Crypto Industry
The amendments to the Payment Services Act (PSA) and the Financial Instruments and Exchange Act (FIEA) that revise the regulatory framework for cryptocurrency in Japan go into effect on May 1. They were proposed by the country's top financial regulator, the Financial Services Agency (FSA), and adopted by the Diet on May 31 last year. The finalized rules were published on April 3 along with the FSA's answers to public comments. International law firm Morrison & Foerster described:

The regulations coming into effect as of May 1, 2020, represent a significant change in the way the FSA will regulate cryptocurrency-related business activities of operators in Japan going forward.

Among the major changes are the regulation of cryptocurrency custody service providers that do not sell, purchase, or intermediate the sale and purchase of cryptocurrencies and cryptocurrency derivatives businesses. The former now falls under the PSA while the latter must register under the FIEA. A crypto derivatives business that also provides crypto custody service may need to register as a cryptocurrency exchange. In addition, the FSA previously explained to news.Bitcoin.com the implication of the new law on the possibility of a bitcoin exchange-traded fund (ETF) being approved in Japan.

The amendments "are quite extensive and many issues regarding the scope, applicability, and relevance of the regulations remain open to interpretation," the law firm opined. The regulatory changes are summarized here.

Japanese Cryptocurrency Landscape Changing, Unlicensed Crypto Exchanges Exiting
Japan currently has 23 FSA-approved cryptocurrency exchanges. As the new regulation takes effect, unlicensed crypto trading platforms modify their terms of service to exclude Japanese users in compliance with the new law.

Global cryptocurrency exchange Bitmex, for example, announced that it would stop providing services to Japanese residents starting from 11 p.m. JST on April 30 for first-time registered users and 12 a.m. on May 1 for existing registered users. "We are restricting access to users who are Japan residents," the exchange confirmed on Tuesday, adding:

The restrictions are in response to the amendments to the Japan Financial Instruments and Exchange Act and Japan Payment Services Act effective as of 1 May 2020.

"We will continue to work with the Japanese regulatory authorities to support their aims for the Japan market and will keep our Japan users updated," Bitmex wrote.

Furthermore, the FSA announced on April 30 that it has approved two self-regulatory organizations (SROs) in the crypto sector: the Japan STO Association and the Japan Virtual and Crypto Assets Exchange Association (JVCEA). These organizations work closely with the FSA to enforce strict standards on the country's crypto sector.

World Economic Forum sets out plan for real-world blockchain deployment

The World Economic Forum has published a roadmap for blockchain deployment, part of a new toolkit for businesses implementing blockchain technology in real world applications.

In particular, the NGO said its blockchain deployment toolkit would provide a guide to building better supply chains, powered by distributed ledger technology. According to the report's authors, the case for greater reliance on blockchain technology is made stronger by the current global health pandemic.

"The case for blockchain is stronger as the COVID-19 pandemic underscores the need for more resilient global supply chains, trusted data and an economic recovery enabled through trade digitization."

Nadia Hewett, head of digital currency at the World Economic Forum, Nadia Hewett, said the pandemic provided businesses with the chance to improve their systems.

"This time we really do see a big momentum behind making sure this time that they capture the momentum and that we bake into our solutions day-to-day elements but also that could help during a disruption."

"Post-COVID, that future state, let's work toward and shape the outcome in a way that promotes interoperability, integrity, and inclusivity."

Having worked with private and public sector bodies, the toolkit and corresponding deployment guidance can be used for end-to-end deployments of blockchain systems.

"You can use it to navigate end-to-end for deployment guidance, you can choose the specific topic of interest for you or your team," according to the organization.

Hewett said the toolkit could prove especially useful in parts of the world and at stages of the supply chain where information has more marginal value, helping empower more firms to get a better deal.

"We can put this in the hands of those parts of the world, those parts of the supply chains, where they're not empowered with information to negotiate good positions for themselves. We really hop