Best Stories of the Week
Bitcoin price drops dramatically again
Bitcoin’s volatile price readings have continued. This week the token fell further to lows not seen since May 28th and is struggling. The most notable drop off was on Thursday, June 11th when the price dropped by $800 in hours. There is not much more to be hopeful on Bitcoin’s price as analysts are predicting further falls as the appetite for Bitcoin and other high-risk assets dwindle. However, analyst Michaël van de Popp looked to quell fears, saying: “We should remember that the price of Bitcoin has rallied massively since the March 12 crash. A correction of 25% to 30% is healthy and not unnatural in a market that trends upward.”
On June 4th, Chinese authorities in Guangdong Province closed around four thousand bank accounts linked to cryptocurrency over the counter (OTC) traders and their clients. A police probe has found many of the frozen accounts are linked to money laundering and other illicit activities, so have duly decided to close them. Sun Xiaoxiao, a former staff member at the crypto wallet Bixin and current OTC desk owner was the first to alert the press about the news via Weibo, claiming thousands will be hit.
The fact OTC owners also being embroiled in the crackdown too is worrying for Sun. “Now there are also OTC merchants who had their bank accounts frozen because of questions over the source of the coins they bought. That means, besides ‘dirty money,’ there are also ‘dirty coins‘ circulating,” Sun explained. Some have suggested this is the start of a wider crackdown but a report from ChinaTimes on June 13th says Banks assured customers their accounts will not be closed should they hold cryptocurrencies legally.
A few weeks ago Ripple launched RippleNET cloud, a blockchain platform for financial institutions and customers to use in conjunction with the other Ripple services. Ripple’s Vice President of Product Amir Sarhangi explained the new technology saying: “With RippleNet Cloud, banks and financial institutions can maximize their business benefits with minimal effort and more flexibility. RippleNet Cloud allows customers to send and receive payments with one integration and a common Ripple Payment Object (RPO) amongst all customers on RippleNet—meaning less friction and more standardization when customers are ready to scale.”
This week the company announced its first financial institution to join the RippleNET cloud. Banco Rendimento, a Brazillian bank that joined RippleNet in January 2019, will be given access to the blockchain cloud first. The benefits of this move are “agility, greater transparency, and cost reduction, in addition to enabling digital transformation”.
The Bank of Korea has announced plans for its central bank digital currency (CBDC) in its 10-year strategy called the ‘BOK2030’ plan. Announced on their 0th anniversary on Tuesday, the team outlined a slew of projects for the next decade including the establishment of a team dedicated to digital innovation, who will study artificial intelligence, big data and blockchain.
“We will carry out in-depth research on AI, big data and blockchain to be in line with the rapidly-changing digital innovation here and abroad, which will help the central bank deliver more sophisticated economic forecasts and statistical data,” a central bank official explained to the press. The Bank has recently drafted in lawyers to give advice on regulations and made an advisory board for the CBDC.
Illegal Russian Bitcoin Miners Steal Millions of Dollars in Electricity
Miners in Russia are stealing electricity for their work and its costing millions, a state-owned power grid company Rosseti said via Telegram this week. The company claimed that “black” miners had syphoned $6.6 million (450 million Russian rubles) from local energy providers over the past three years. According to reports from CoinTelegraph, the illegal miners would “pull an electric cord right to the nearest power line and build their own power transforming stations.” One miner even hid his station underground in a forest to avoid detection.