A U.S. state has issued a cease and desist order to a company purportedly engaged in cryptocurrency mining. This order follows a temporary cease and desist order to the company two months ago which it did not respond to.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Cease and Desist Order

The U.S. State of North Carolina issued a cease and desist order to Power Mining Pool (PMP) last week. After some investigation, the state’s Securities Division declared:

The Securities Division found that PMP is violating the Securities Act by: a. offering unregistered securities in the form of ‘mining pool shares;’ b. offering securities while it is not registered to do so; and c. making material misstatements when offering securities.

The order mandates the company and any person, employee, officer, director, entity, or independent contractor under its direction or control to permanently cease and desist from selling securities in the state until the security is registered or exempt.

They also must not act as a securities dealer, salesman, or agent unless registered with the state. Furthermore, they must not engage in fraud in connection with the offer or sale of any security, or violate other provisions and rules of the state.

This order follows a temporary cease and desist order issued by the same division on March 2. However, the company has neither responded to the order nor requested a hearing. Instead, its website, which is its principal place of business, went offline on March 6, the order revealed.

Questionable Operations

The State of North Carolina described PMP as an online business that is unregistered in any jurisdiction, without a physical place of business and “The individuals who managed PMP are not identified.”

The company represents that it owns and operates mining rigs capable of mining seven different cryptocurrencies 24 hours a day, 7 days a week. It also represents that these rigs track the profitability of each of the seven cryptos and automatically “switch resources away from less profitable coins.”

PMP also offers mining pool shares to investors to mine on their behalf. “Investors who purchase mining pool shares must first purchase bitcoin with their fiat currency, such as the U.S. Dollar or Euro,” the order detailed. “Next, PMP directs investors to deposit their bitcoin into PMP’s bitcoin wallet in order to set up an account on the PMP website.” The company then claims to mine cryptocurrencies on investors’ behalf and purported to pay investors the fiat value of the coins mined.

Investors can also “trade the mined coins for bitcoin.” PMP claims that it will pay the investors “on any profits we make in the trading pool” every three hours.

The Secretary of State of North Carolina wrote:

The mining pool shares are securities and are not registered with the Administrator…PMP willfully fails to disclose material facts when offering the mining pool shares.

What do you think of North Carolina shutting down Power Mining Pool? Let us know in the comments section below.

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Five payments providers in Europe and Asia are set to use Ripple’s xVia technology, the distributed ledger startup announced Thursday.

The company’s new customers include U.K.-based firms FairFX, RationalFX and Exchange4Free, in addition to peer-to-peer currency exchange platform MoneyMatch in Malaysia and settlements company UniPay from the Republic of Georgia.

Using Ripple’s xVia tech will help these companies expand their customer base, said Ripple senior vice president of product Asheesh Birla.

“All of these customers run into the same problem: building bespoke connections to banks and networks all over the world. It’s expensive and time consuming,” he said in a statement. “xVia enables them to grow their overall market share by reaching new customers in new markets, easier than ever before.”

Ripple explained in a blog post that, unlike traditional means of transferring funds abroad, such as wire transfers, xVia’s standard API solution means that it doesn’t suffer from high failure rates and manual reconciliation costs.

FairFX’s chief commercial officer, James Hickman, said xVia “will allow us to reach more people, more efficiently and at a lower cost.”

“It will also enable us to deliver on our commitment to give customers the most transparent, efficient and truly global money transfer possible using RippleNet,” he said.

Ripple has been steadily acquiring new customers, and announced in February that fintech firms Beetech and Zip Remit also planned to adopt xVia.

Water ripples image via Shutterstock

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The infamous former CEO of the now defunct bitcoin exchange Mt Gox, Mark Karpeles, is trying to start over with a clean slate in life. Karpeles has revealed to the media that he’s started a new C-level position as the Chief Technology Officer (CTO) for a firm called London Trust Media. The technology company invests in virtual private network companies and cryptocurrencies.

Also Read: Indian Exchange Takes Central Bank to Court Over Bank Ban

The Notorious Mark Karpeles Lands a C-Level Position With a Firm That Dabbles in Cryptocurrency Investments and Runs the Largest VPN Service Worldwide

Mark Karpeles is starting a new job, and he will be working with a company that’s into technology like virtual private networks (VPN) and cryptocurrencies. Karpeles has accepted a CTO position at a firm called London Trust Media (LTM), a company that owns VPN providers such as Private Internet Access, but has also injected funds into digital currency investments such as Purse.io, Zcash, Blockexplorer, and more. The former Mt Gox founder will now work remotely for the Denver-based firm who oversees the world’s largest VPN company alongside its recent cryptocurrency investments.

It seems Karpeles also lives a paranoid life, where he switches apartments in Japan every few months in fear of his safety. Karpeles also is afraid to set his bag down when being interviewed by the press in Tokyo’s Shinjuku district. Karpeles is still on trial for embezzlement charges and in Japan, there is a 99 percent conviction rate. The case could still see an outcome where the former cryptocurrency exchange operator finds himself in prison.

“After I came out, I felt like in a kind of dream, like I didn’t feel things were real — Even today I’m not sure yet,” Karpeles explains this week in Tokyo.

A Second Chance in This Fight’s Critical Hour

Karpeles also believes the administrators behind the Russian bitcoin exchange BTC-e and the accused Alexander Vinnik were behind a string of attacks that hit Mt Gox back in 2011. Alexander Vinnik had been arrested in Greece for being a suspect in a massive money laundering law enforcement sting, and allegedly Vinnik and BTC-e had connections with the missing Mt Gox funds. “What he did, Mt Gox is a victim of this, which means that all creditors are victims of this, and I am too a victim of this,” explains Karpeles in his recent interview. However, Vinnik has denied allegations of being tied to BTC-e, and the Russian has not yet been charged with any connections to the Mt Gox investigation.

Karpeles’ new C-level position for a firm that dabbles in cryptocurrency investments also follows his recent statements on a Reddit Ask-Me-Anything (AMA) about not wanting to receive the possible billion-dollar bankruptcy settlement that he could inherit. Moreover, even though Karpeles accepted a job as the CTO at London Trust Media he recently explained he wants very little to do with the cryptocurrency industry.  

“The only thing I’m touching related to cryptocurrency is how to solve this bankruptcy — Nothing more,” Karpeles states.

Bitcoin right now is, I believe, doomed.

The company London Trust Media is pleased to welcome the former Mt Gox CEO onboard as the firm’s new CTO. Andrew Lee, the co-founder, and chairman of London Trust Media explains he looks forward to helping Karpeles move forward. “I am more than willing to give a second chance to Mark in this fight’s critical hour,” Lee notes.

What do you think about Mark Karpeles working for London Trust Media and still being associated with the cryptocurrency industry? Let us know your thoughts on this story in the comments below.

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Images via Pixabay, London Trust Media, AP, and Getty. 

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Yahoo! Japan has confirmed that it is entering the crypto space by acquiring a stake in a Japanese cryptocurrency exchange that is already licensed by the country’s financial regulator. The company plans to launch a crypto exchange in the fall of this year.

Also read: Japan’s DMM Bitcoin Exchange Opens for Business With 7 Cryptocurrencies

Yahoo! Enters the Crypto Space

Yahoo! Japan Corporation (TYO: 4689) announced on Friday that it is entering the cryptocurrency space. The company expects to launch an “easy-to-use exchange” for cryptocurrencies in the fall of this year, Nikkei elaborated.

Founded in January 1996 as a joint venture between Yahoo! and Japanese multinational conglomerate Softbank, Yahoo! Japan continues to dominate the Japanese internet industry while Yahoo! has been declining in popularity since the late 2000s.

Through its wholly owned subsidiary Z Corporation, Yahoo! Japan confirmed the purchase of a 40 percent stake in a crypto exchange called Bitarg Exchange Tokyo Co. Ltd. A person familiar with the matter said that the deal is likely to “total 2 billion to 3 billion yen ($18.6 million to $27.9 million),” Reuters reported. The remaining 60% is still owned by CMD Lab, the parent company of Bitarg.

“We decided to expand the virtual currency business by collaborating with Z Corporation,” CMD Lab Representative Director Yoon Hee Yuan confirmed.

A Stake in a Licensed Exchange

Last month, Bitarg denied reports of Yahoo! Japan’s investment in the company, stating that many possibilities were being explored. However, Bitarg posted a notice on its website on Friday, stating:

Today, the company decided to accept capital participation from Z Corporation…the company will be able to utilize the service operation and security expertise of the Yahoo Japan Group, which will make it easier for customers, [in order] to prepare for the start of the exchange service managed by the company and to improve the operation after the commencement.

Bitarg was established in May of last year. However, the exchange temporarily suspended its service in August 2017, according to Business Insider Japan. The company received a license from the Financial Services Agency (FSA) to trade bitcoin (BTC) in December of last year. According to the news outlet, the exchange service has not resumed as of April 13.

In a recent interview with Sankei, Yahoo! Japan Vice President Kentaro Kawabe explained:

The FSA is stating that [their] review will be tightened for new registrations of virtual currency exchanges, and it will be difficult to enter [the space] without [the] acquisition [of existing exchanges].

The FSA has been inspecting all cryptocurrency exchanges in the country and actively issuing business improvement and business suspension orders, following the hack of Coincheck. Six companies have already withdrawn their applications to operate crypto exchanges in the country.

What do you think of Yahoo! Japan entering the crypto space? Let us know in the comments section below.

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Images courtesy of Shutterstock, Bitarg, CMD Lab, and Yahoo! Japan.

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A “self-regulatory approach” has been mentioned as a likely solution for the South African crypto sector. A non-government body could adopt rules and implement industry standards. The central bank in Pretoria is expected to formulate the policy framework.

Also read: Steps towards Self-Regulation in Croatia and Slovenia

Premature Regulation Throttles Growth

The South African Reserve Bank (SARB) has set up a team to monitor fintech developments and assist its efforts to finalize the regulatory regime for cryptocurrencies. Representatives of the private sector have proposed the creation of a Self-regulatory Organization (SRO). While banking falls within the central bank’s jurisdiction, cryptos are not suited to traditional centralized supervision, said a legal expert familiar with the matter.

“Regulation through self-regulatory organizations may be a more likely solution,” Bridget King, Finance and Banking Practice Director at a leading South African law firm, told the Business Report. The SRO can be registered as a non-governmental body authorized to adopt rules, issue directives for its members and implement industry standards, she explained.

Mrs. King believes that the central bank should deal with preventing systemic risk, while the SRO can establish a self-regulatory approach in the fintech sector. She warned that regulating cryptocurrencies prematurely could throttle growth and innovation in the industry:

If laws are drafted based on existing technology, which is still in its growth phase, there is a risk that the technology may have moved so much by the time the legislation is enacted, that this legislation is obsolete or requires updating almost immediately.

Bridget King noted, however, that this approach would have to be balanced against what she called the dangers of delaying the regulatory framework too much.

While mulling over crypto regulations, SARB has been exploring opportunities to implement distributed ledger technologies in electronic payments. It also experiments with replicating interbank clearing and settlement using the Quorum protocol, a permissioned implementation of ethereum.

Bitcoin Growing Popular with South Africans

Meanwhile, cryptocurrencies with permissionless blockchains, like bitcoin, have been steadily gaining popularity in South Africa. Trading has increased significantly, so has the use of cryptocurrencies as a means of payment. Last year, the country’s second largest supermarket chain Pick n Pay started testing bitcoin payments. It has been reported that South African drivers can now pay their tickets with cryptocurrency.

In December, the South African Revenue Service announced it was exploring ways to tax bitcoin trading, as news.Bitcoin.com reported. The agency held talks with tech companies to implement transaction tracking solutions. The tax authority also revealed it was working closely with the central bank to improve the monitoring of cross-border money flows.

This year, the South African Reserve Bank created a fintech task force to review its stance on cryptocurrencies. It is also supposed to update the official monetary policy and address the stability of the country’s financial system.

Do you think that self-regulation is more effective in the crypto sector? Share your thoughts in the comments section below. 

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