Reginald Fowler, an alleged operator behind payment processor Crypto Capital, was charged with wire fraud Friday, on top of existing charges of bank fraud, operation of an unlicensed money transmission business and conspiracy.

According to an indictment filed Friday, Fowler allegedly created a scheme to obtain money "by means of false and fraudulent pretenses" and directed the funds to a professional sports league. While the indictment does not name the league, Fowler was previously the primary investor in the Alliance of American Football, a short-lived alternative to the National Football League that collapsed in the middle of its first season last year.

Fowler was originally arrested for allegedly operating Global Trading Solutions LLC, which appears to be tied to Crypto Capital, a payment processor crypto exchanges used to access banking services.

"Fowler defrauded individuals associated with a professional sports league (the 'League') in connection with his acquisition of an ownership stake in the League, inter alia, (i) by falsely claiming personal ownership of funds that were, in truth and in fact, funds Fowler had obtained through the unlicensed money transmitting business charged in Count Four of this Indictment and (ii) by converting those individuals' funds toward his investment in the League," according to the updated indictment.

QuadrigaCX and Bitfinex are two of the exchanges that apparently used Crypto Capital to process user funds.

Fowler originally pleaded not guilty to the money transmission business and bank fraud charges, but announced late last year he would change his plea. Under a tentative plea agreement he would have pleaded guilty to one charge of operating an unlicensed money transmitter, but Fowler did not consent to forfeiting $371 million he allegedly holds or held in bank accounts.

He rejected the plea deal earlier this month.

According to a memo approved by U.S. District Judge Andrew Carter, of the Southern District of New York, pretrial motions will be filed by Feb. 28, oppositions will be filed by March 13 and replies will be due by March 20. The next hearing is set for late April.

Source: Alleged Crypto Capital Operator Faces New Wire Fraud Charge

The Nigerian cryptocurrency market may be on the verge of a local bull run, thanks to newly popularized avenues to the global market.

Emmanuel Babalola, Binance’s business manager in Nigeria, said he’s seen a 50 percent increase in signups so far in 2020, leading to “thousands” of new Binance users in Nigeria. Roughly 300 people signed up for a corresponding “masterclass” in Lagos in January, teaching users how to set up their own personal wallets and experiment with margin-trading strategies. There was so much demand for the six-hour class that Babalola will run three more classes over the next four weeks and offer two a month going forward.

If various big-name crypto projects vying to serve the developing world are looking for inspiration, look no further than this West African nation of 190 million. There’s rampant demand in Nigeria, where the World Bank estimates 35 million unbanked adults have a mobile phone. The vast majority of these unbanked users are women.

“The majority of users in Nigeria use Binance mobile on their phones,” he said, adding there are roughly 4,000 traders in Binance’s Nigerian Telegram group. “By the end of this month, we’ll have a fiat on-ramp on the mobile app as well.”

Although Binance was one of the first global exchanges to launch a fiat-on-ramp in Nigeria, a market largely dominated by peer-to-peer exchanges like LocalBitcoins and Paxful, Binance isn’t the only game in town. The local exchange BuyCoins, launched in the aftermath of 2017’s bull run, is activating a comparable fiat-on ramp in 2020. In the meantime, BuyCoins is using stablecoins to help onboard unbanked users.

“In our country, there’s a lot of bitcoin trading that happens offline,” said BuyCoins co-founder Tomiwa Lasebikan. “People who trade a lot on WhatsApp groups. … No one in the country can accurately estimate how much [trading] activity there is.”

Lasebikan’s team created $100,000 worth of the ethereum-based stablecoin Naira, backed one-to-one in the bank, and distributed it through the local over-the-counter (OTC) traders’ association, Alpha Training Lab. Lasebikan said the exchange now handles roughly $5 million in daily volume, predominantly in bitcoin trading. The modest infusion of stablecoins into the market served as an indirect on-ramp to the crypto-only platform.

Follow-on investment

The modest Naira effort garnered such clear results that now DeFi leader MakerDAO is trying a similar approach to encourage local adoption.

The ethereum-centric stablecoin project gave a $15,000 grant to the internet service provider Althea to offer connectivity in exchange for DAI stablecoins in Abuja, Nigeria’s capital city. So far there are 16 households participating and operating nodes, according to Althea co-founder Deborah Simpier, paying the startup around $15 worth of crypto a month for WiFi. She said they’ll be expanding to Lagos, Nigeria’s largest city, next month and encouraging initial node operators to provide WiFi to local mobile subscribers, generating their own crypto income.

Binance’s Babalola said that he’s heard of and is optimistic about such stablecoins, although his own team is focused on the exchange’s native stablecoin, BUSD. Stabelcoins can be particularly attractive for traders who want to transact, for example, with undocumented youth who can’t get a formal exchange account.

“Less than half of Nigerians have government-issued ID cards,” Babalola said. “Most crypto users in Nigeria are young people in schools.”

All things considered, 2020 will see a wider variety of onboarding options than ever before. In addition to a few incumbent African exchanges from pre-2017, like Luno, there are now several exchanges focused on connecting Nigerians to the global cryptocurrency market.

“We have agents on the ground going door-to-door, talking about crypto and the potential it holds,” Babalola said.

Source: https://www.coindesk.com/binance-and-others-are-rushing-to-provide-stablecoins-to-nigerian-crypto-users

The Ravencoin community continues to argue over what mining algorithm the project should adopt in the future to best deter ASICs, despite Ravencoin conducting a hard fork intended to bolster ASIC-resistance just five months ago.

Tron Black, Ravencoin’s lead developer, posted an update on Feb. 18 stating that “work is ongoing to test various alternative algos for mining Ravencoin.” He added that the campaign to change algorithms is being led by “a large contingent of GPU miners.”

“Several algos have been tried with benchmarking. Some will not work because they are too slow for validation,” Black continued.

The post also asserted that five “major features” had been activated on the security token platform’s main net during February, including messaging, dividends and restricted assets. The updates also saw RVN’s KYC tagging system go live.

Ravencoin versus ASICs

Ravencoin’s whitepaper, published April 3, 2018, advanced ASIC-resistance as a core utility offered by the project’s x16r mining algorithm - which was designed to “to prevent immediate dominance by mining pools, and future dominance by ASIC mining equipment.”

The document argued that ASIC-resistance is needed to “allow the mining rate to increase” and “gradually disburse [RVN] to holders that understand the value of the platform.”

Evidence suggesting that ASICs may have infiltrated the network first emerged during July 2019 when an article published on Medium purported to show that a single mining pool had come to accumulate 10% - 20% of mined blocks during Feb. 2019, before growing to dominate 30% - 40% of the network the following month. As of July 11, 2019, the mystery pool was mining 45% of RVN blocks.

Ravencoin hard fork

On Oct. 1, 2019, Ravencoin executed a hard fork to transition to its current x16rV2 algorithm. Despite not being intended as a permanent solution, the change was expected to thwart the presence of ASICs for the foreseeable future.

Despite the fork, concerns around the recurring dominance of unknown mining pools quickly resurfaced, including speculation that FPGA developers have sought to subvert the narrative in the development channels of the project’s Discord.

On Jan 30, 2020, Tron Black published a post declaring it was “evident” that ASICs were again mining Ravencoin. The post also outlined proposals for Ravencoin’s future ‘x16re’ algorithm, with a recent update indicating that RVN’s developers are currently exploring implementing progPOW into the mining algo.

Ravencoin listed on OKex and SFox

Despite the lack of a clear resolution to Ravencoin’s algorithm debate, the open-source project has seen increasing support from notable exchanges.

On Feb. 19, RVN pairings went live on OKex and SFox. Tron emphasized that the OKex listing would “bring awareness of Ravencoin to entire new segments of the globe,” adding that the exchange would be providing the marketing budget to promote the launch.

Okex’s RVN/USDT market has generated $586,000 worth of trade in the past 24 hours, ranking it the third-largest RVN pairing by daily volume according to Coin360.

Source: https://cointelegraph.com/news/ravencoin-community-clash-over-mining-algorithm-continues

IOHK, the company behind Cardano, announced that it will be updating its Ouroboros, its proof-of-stake (PoS) protocol, from the Byron mainnet to the Ouroboros BFT. The update has been successfully tested and will be deployed on Feb. 20. ADA holders and users of the Shelley Incentivized Testnet will experience no changes during the update, the company said.

Ouroboros ready to be deployed on the Byron mainnet

In a culmination of more than a year of work, IOHK has announced that its advanced proof-of-stake (PoS) protocol Ouroboros is ready to be deployed. The protocol, which will act as a bridge between Cardano’s Byron and Shelley eras, is set to be updated to Ouroboros BFT.

According to a video update from Tim Harrison, the director of communications at IOHK, the company has successfully tested Ouroboros on the Byron testnet. It will be deployed on Feb. 20, on epoch 176, Harrison said. Epochs are periods of time in the Cardano blockchain in which the network knows in advance who will have the right to generate a new block. Epochs are divided into multiple slots, each one about 20 seconds long.

He noted that those holding ADA will not have to do anything to prepare for the update, as it will happen behind the scenes. Users currently participating in the Shelley Incentivized Testnet, as well as users holding their funds on the Yoroi and Daedalus wallets also won’t be affected by the update.

“So this is a really positive next step in the development of the Cardano platform, but it’s also something that’s happening very much behind the scenes,” Harrison said in a YouTube video.

Bridging the gap between Byron and Shelley eras

The Ouroboros Byzantine Fault Tolerance (BFT) protocol update is an important step both for IOHK and the Cardano network. The update will help the company transition the Cardano blockchain from the Ouroboros Classic consensus protocol, which is currently being used on the Byron mainnet, to the Ouroboros Genesis—a protocol that will power the Shelley mainnet once it’s launched.

Harrison called Ouroboros BFT a “stepping stone in compatibility” that will enable the evolution of Cardano. It will transition the blockchain from it’s federated Byron era to the decentralized, proof-of-stake network that Shelley will bring.

While the company refers to the update as a “hard fork,” it’s actually a protocol update that has been planned and managed all the way back in Cardano’s whitepaper.

Harrison’s video update is also worth mentioning in itself, as it shows that IOHK has kept its promise when it comes to improving communication with its community. The company is currently putting a lot of effort into both marketing and PR in order to promote the massive developments happening on the Cardano network.

Source: https://cryptoslate.com/cardano-parent-iohk-says-the-ouroboros-bft-is-ready-to-be-deployed/

The Organization for Security and Cooperation in Europe (OSCE) conducted a training course on combating darkweb-facilitated crime. Law enforcement representatives from Central Asian countries were taught how the darkweb and cryptocurrencies function, in order to better combat drug-related crime.

The training was held in the span of five days that ended on Feb. 21, an official announcement reveals.

The course focused specifically on “new psychoactive substances,” synthetic replacements of common drugs that are designed to mimic their effect. They are often considered more dangerous due to their unknown history and particularly shady production practices.

Law enforcement representatives from Azerbaijan, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan, Uzbekistan and Mongolia participated in the course, held in Almaty, Kazakhstan.

As part of the course, the participants learned how the darkweb worked and the role cryptocurrencies play in drug-related crimes on darkweb platforms. They were also taught techniques to identify websites with malicious content, as well as anonymity and encryption fundamentals.

The initiative was organized by the Strategic Police Matters Unit of the OSCE and the Central Asian Regional Information and Coordination Centre (CARICC). Rustam Aziz Miralizoda, Director of CARICC, noted the importance of drug-related threat for the region:

“The topic of this training course is very relevant for Central Asia. More and more new psychoactive substances appear on the illicit drugs market in the region. The misuse of the Darkweb and cryptocurrencies represent an emerging challenge for the law enforcement of the CARICC Member states and it should be addressed through enhanced regional co-operation and international support.”

Criminal use of cryptocurrency

Cases where criminals were caught using cryptocurrency are regularly in the news.

As Cointelegraph previously reported on Feb. 19, an Irish man accused of drug trafficking saw his Bitcoin (BTC) confiscated by the court.

In the United States, a man was indicted in January for dealing drugs in exchange for BTC. A similar case was reported with a U.S. Army interpreter in October.

Dark market use has resumed rising in 2019, representing now 0.08% of all cryptocurrency transactions. Though cryptocurrency may be abused, its properties can also be used to track down criminals. A U.S. child pornography ring was shut down in 2019 thanks in part to blockchain analysis.

OSCE Sponsors Cryptocurrency Course for Central Asia Law Enforcement

ETC Labs and Fantom Foundation are collaborating to bring decentralized finance (DeFi) to Fantom’s ecosystem, a Feb. 10 press release announced. Ethereum Classic (ETC) will serve as collateral for issuing a stablecoin similar to Maker’s DAI on the Fantom platform.

Fantom will be using the Xar Network, a DeFi framework specifically developed for the project. The framework uses some of Fantom’s Byzantine Fault Tolerant (BFT) consensus technologies, such as Lachesis and TxFlow, to offer a blockchain environment that supports advanced DeFi options. The system allows collateralized loans, synthetic assets, atomic swaps and is interoperable with external blockchains such as Ethereum and Binance Chain.

Ethereum Classic will only function as collateral on the Fantom platform. The stablecoins will live on Xar Network’s blockchain-agnostic stablecoin protocol, named Collateralized Stable Currency Tokens (CSCT).

Fantom primarily targets enterprise and governmental use cases, using ETC to mint stablecoins on permissioned networks.

The issuing entities will maintain full control over the collateral, in addition to having the ability to earn interest from staking the stablecoin.

ETC is reportedly preferred over its more famous twin due to its commitment to immutability, as it was born from the unwillingness to manually revert the results of a smart contract hack.

The collaboration will gradually expand the available uses for ETC within the Fantom ecosystem. The toolkit allows for significant interoperability between different Fantom blockchains, as well as those on the Cosmos network.

Though Ethereum Classic could in theory host DeFi platforms as well, its role appears to be relegated to that of collateral asset. For now.

Source: Ethereum Classic Jumps Into DeFi With Fantom Partnership But Only as Collateral

Responsible for one of the top performing cryptocurrencies, IOTA is continuing to release new information in response to a Feb.12 hack on its official wallet.

According to a Feb. 19 status update, the IOTA Foundation strongly recommends users of the Trinity Wallet to immediately change their passwords and use the seed migration tool to protect their assets. Trinity users who opened or updated their wallets between December 17th, 2019 and February 18th, 2020 may be vulnerable.

Source: IOTA Urges Trinity Wallet Users to Use Seed Migration Tool

You need nothing short of “a miracle” to succeed with an initial coin offering (ICO) in Australia, a local industry leader told the government this week.

At a Select Committee on Financial Technology and Regulatory Technology hearing on Feb. 20, Dr. Jemma Green said her blockchain firm had succeeded despite, not thanks to, government policy.

Dr. Green is the executive chairman and co-founder of Australian blockchain energy firm Power Ledger, which develops blockchain-based software for decentralized energy trading. ZDnet reported her remarks on the day of the hearing.

Tax system not “fit for purpose”

Dr. Green appeared before the committee in her capacity as a fellow of domestic blockchain industry body Blockchain Australia. Earlier this year, Blockchain Australia published a report, together with the RMIT Blockchain Innovation Hub at RMIT University, providing detailed recommendations for the taxation of ICOs.

Drawing on this research, Dr. Green argued that current policy adversely impacts local ICOs by classifying their proceeds as income, in line with legacy tax guidelines. She stated:

"Many countries —- for example Switzerland —- are changing it to put them on capital accounts, which is moving the taxing point to when proceeds are used to build a platform which generates income. In Australia, the proceeds are being taxed as income and as a result of this, Australia is not an attractive proposition to undertake one of these ICOs.”

Blockchain Australia advocated a policy that would apply the same treatment to ICOs as that offered to firms’ proceeds from a traditional capital raise.  It would then apply this to all projects, including the early offerings that launched back in 2017.

Dr. Green pointed to the report’s findings that, while globally $26 billion has been raised through ICOs to date, Australia has captured just 0.79% of this market.

Power Ledger, which has expanded to nine countries, owes little of its success to the government’s approach, in her view. Dr. Green went so far as to argue that:

“It's really kind of a miracle that we exist in the first place, but there could be many of these miracles if we actually set the tax regulation around ICOs to be fit for purpose."

Revising the system could reap benefits for fiscal revenue too, she claimed, allowing the government to capture the “bounty” when such firms become profitable.

Speaking to Cointelegraph, Dr. Green pointed to challenges for the industry in Australia that extend beyond questions of taxation. She wrote:

“Education will play a significant role in achieving real, progressive change in Australia. We can’t expect policy makers to embrace emerging technology and a new system that they fundamentally don’t understand.”

New guidelines

As Cointelegraph previously reported, the Australian Securities and Investment Commission last year revamped its ICO and cryptocurrency trading framework. Its intervention, however, notably omitted any update to taxation and consumer protection policy, for which it referred industry participants to existing approaches as determined by other regulators.

Source: Aussie Blockchain Startup Tells Gov’t Its Tax Laws Are Stifling ICOs