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Regulation News

Russia Introduces A New Law Where Police Can Confiscate Bitcoin

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Russia Introduces A New Law Where Police Can Confiscate Bitcoin

Russia is planning on creating legal statutes allowing the government to achieve the impossible: confiscation of Bitcoin (BTC). As local financial news outlet RBC reported on Nov. 7 citing sources familiar with the matter, Russia’s interior ministry will work with various state organs to draw up the plans, which could enter into law in 2021.

The push does not single out Bitcoin, but instead refers to “digital assets” as a general phenomenon, chief among which are cryptocurrencies, says RBC. The publication quoted Nikita Kulikov, head of a dedicated committee at the Russian parliament, as explaining:

“The constant growth trend in crimes using virtual assets, and the lack of consumer protection in the face of this kind of criminal onslaught, naturally dictate the need to develop mechanisms for legal regulation and control of virtual asset exchange.”

Among the options under consideration is the creation of a government cryptocurrency wallet for transferring funds.

Russia has yet to implement its long-awaited package of laws regarding cryptocurrency, which has seen multiple delays. According to various parties speaking to RBC, crypto would need legal recognition before the government could justify legal grounds to confiscate it as part of judicial proceedings. 

As with other countries’ attempts, however, the way authorities would take control of investors’ holdings remains unclear. In theory, RBC notes, crypto held on exchanges could be accessed if the exchange in question complies. 

For coins held in wallets to which the investor holds the private keys, the method of acquisition is a mystery. The plans thus speak to a potential lack of understanding of how decentralized cryptocurrencies such as Bitcoin operate. India’s recent recommendation to ban them faces similar difficulties: effectively attempting to control the uncontrollable. 

At the same time, Russia appears permissive to other facets of cryptocurrency. One of President Vladimir Putin’s aides has revealed he wants to control 20% of Bitcoin mining production from a new farm located in the country’s northwest.

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Blockchain News

China’s Government Looks Into A Blockchain Development Fund

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China’s Government Looks Into A Blockchain Development Fund
China’s Government Looks Into A Blockchain Development Fund

National People’s Congress, China’s parliament, and the Chinese People’s Political Consultative Conference, the most powerful political advisory body in the country, have recently begun their annual sessions. These are widely referred to as the “Two Sessions” or “lianghui” meetings. These meetings have been ongoing since May 22. The National People’s Congress, or NPC, is China’s top legislative body. Nearly 3,000 delegates from around the country meet once a year to submit proposals during the meetings.

According to a Beijing News report on May 23, Jieqing Tan, deputy to the NPC, suggested setting up a special fund for blockchain industry development. If accepted, this fund would be led by the government. The aim of the fund is to support the development and growth of a number of promising blockchain enterprises, encourage blockchain technology innovation, and cultivate a number of unicorn enterprises in the blockchain space, says Tan.

How Will Blockchain Change the Future of Finance and Accounting?

By supporting the development of the blockchain industry, Tan believes it will “modernize” the country’s governance system. Blockchain technology not only will be a great tool to push China towards smart governance and a high-trust society, but it can also help China to gain an upper hand globally in the future development of the technology, according to Tan. He thinks by taking this technology innovation lead, China will be able to better protect its sovereignty and national security. Tan suggested that a clear national blockchain industry development plan should be defined. He explained that:

“From the bottom technology standard, middle industry application development to the top-level system design, the national blockchain technology, industry, and supervision three-dimensional strategic planning system should be well coordinated.”

The new economic potential and new job opportunities derived from blockchain technology are huge. However Tan pointed out that currently the number of limited blockchain enterprises, its scalability, and lack of talent and information have been the main problems preventing the blockchain ecosystem from developing a well-established ecosystem.

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Regulation News

Plus Token Leaders Could Be Up For Criminal Prosecution in China

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Plus Token Leaders Could Be Up For Criminal Prosecution in China
Plus Token Leaders Could Be Up For Criminal Prosecution in China

One of the ringleaders of Plus Token is now facing criminal charges in China. Plus Token is one of the largest apparent scams in the cryptocurrency industry’s history. According to local media, Zhou will face public prosecutors in the Court of Jianhu County, Yancheng City, Jiangsu Province. 

As the local government only supplied Zhou’s family name, at press time we can’t confirm exactly which Zhou this refers to. Zhou reportedly publicized and promoted the PlusToken wallet App, a so-called cryptocurrency financial management application, through Wechat and other avenues over the internet. By registering four different accounts with SIM cards in the wallet, he allegedly lured more than 1.9 million people into the pyramid scam.

Multi-level marketing has been likened to a legal pyramid scheme ...

According to local authorities, the PlusToken wallet disguises itself as a cryptocurrency financial management app but allows criminals to recruit members by promising high returns based on the number of other investors they can pull in. Local police said that they received reports from the public regarding the scam as early as last year, explaining:

“In the name of providing a cryptocurrency appreciation service, the platform falsely claims that it has the function of mining cryptos, and requires members to pay certain value of cryptocurrencies such as Bitcoin, Ethereum, EOS, etc., so as to obtain high static income.”

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Altcoin News

JP Morgan Feels That CBDC Will Have Long-Lasting Effects Of USD

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JP Morgan Feels That CBDC Will Have Long-Lasting Effects Of USD
JP Morgan Feels That CBDC Will Have Long-Lasting Effects Of USD

JPMorgan believes the central bank digital currencies, or CBDC, could pose a threat to the global hegemony of the US dollar. According to a report covered by Bloomberg, the bank’s chief U.S. economist asserted that “[t]here is no country with more to lose from the disruptive potential of digital currency than the United States.” “This revolves primarily around U.S. dollar hegemony. Issuing the global reserve currency and the medium of exchange for international trade in commodities, goods, and services conveys immense advantages,” the report added.

While JPMorgan doubts the dollar will be displaced as the global reserve currency soon, the report warns that “fragile” peripheral aspects of the currency’s dominance may be eroded, including trade finance and the SWIFT messaging system. During March, eight major banks including HSBC and Citi announced that a collaboratively developed blockchain trade finance will see a commercial launch in Singapore during the second half of 2020. Blockchain-based trade finance initiatives have also been launched in China, Oman, and Europe.

The report advocates that the U.S. launch a digital dollar project in order to migrate its monetary dominance into the rapidly growing digital sphere. JPMorgan warns that other countries could use digital currencies to circumvent the SWIFT system and the reach of economic sanctions, undermining the ability for the United States to exercise power on a global stage through control over the global reserve currency. “Offering a cross-border payment solution built on top of a digital dollar would, particularly if designed to be minimally disruptive to the structure of the domestic financial system, be a very modest investment to protect a key means to project power in the global economy,” the report said.

“For high-income countries and the U.S. in particular, digital currency is an exercise in geopolitical risk management.”

Economist John Vaz offered a critical appraisal of CBDCs, arguing that central bank digital currencies comprise “a kind of rearguard action being fought by the central banks because they don’t like cryptocurrency.” Vaz argued that cryptocurrencies take away the ability for central banks “to pull a lever in the economy because under things like Bitcoin, you can’t create money by the way of credit.” “Central bank digital currencies are probably more about tracking money than providing benefit,” he added.

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