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Bitmex Agrees to Pay $100 Million to Resolve Charges With FinCEN and CFTC

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Bitmex Agrees to Pay $100 Million to Resolve Charges With FinCEN and CFTC

Bitmex Agrees to Pay $10 Million to Resolve Charges With FinCEN and CFTC

Global cryptocurrency derivatives exchange Bitmex has settled charges with the U.S. Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FinCEN). The exchange has agreed to pay as much as $100 million to end investigations by the two agencies.

Bitmex Settles With CFTC and FinCEN

Bitmex confirmed Tuesday that “it has reached a resolution with both the United States Commodity Futures Trading Commission (CFTC) and Financial Crimes Enforcement Network (FinCEN) in relation to investigations by both agencies.” The company wrote:

Bitmex agreed to pay as much as US$100 million to resolve the charges.

“Today marks an important day in our company’s history, and we are very glad to put this behind us,” commented Bitmex CEO Alexander Höptner. “As crypto matures and enters a new era, we too have evolved into the largest crypto derivatives platform with a fully verified user base.”

The CFTC separately announced Tuesday that “the U.S. District Court for the Southern District of New York has entered a consent order against five companies charged with operating the Bitmex cryptocurrency derivatives trading platform.” The companies are HDR Global Trading Ltd., 100x Holding Limited, ABS Global Trading Ltd., Shine Effort Inc Limited, and HDR Global Services (Bermuda) Ltd.

FinCEN, a bureau of the U.S. Department of the Treasury, also confirmed in an announcement Tuesday that it has assessed a $100 million civil money penalty against Bitmex “for willful violations of the Bank Secrecy Act” and its regulations.

“Bitmex, which operated as an unregistered futures commission merchant (FCM) and provided money transmission services, willfully failed to comply with its obligations under the BSA,” FinCEN detailed. “For over 6 years, BitMEX failed to implement and maintain a compliant anti-money laundering program and a customer identification program, and it failed to report certain suspicious activity.” This is FinCEN’s first enforcement action against an FCM.

The bureau added:

These willful failures expose financial institutions to an increased risk of conducting transactions with money launderers and terrorist financiers, including noncompliant exchanges in high-risk jurisdictions, ransomware attackers, and darknet marketplaces.

Furthermore, FinCEN detailed that the exchange “conducted at least $209 million worth of transactions with known darknet markets or unregistered money services businesses providing mixing services.” It also “conducted transactions involving high-risk jurisdictions and alleged fraud schemes” and “failed to file a Suspicious Activity Report (SAR) on at least 588 specific suspicious transactions.”

Besides the civil penalty, Bitmex has agreed to several independent consultations to determine if it must file additional SARs and “to ensure that appropriate policies, procedures, and controls are in place.” The announcement concludes:

FinCEN’s $100 million assessment will be satisfied by immediate payments totaling $80 million to FinCEN and the CFTC, with $20 million suspended pending the successful completion of the SAR lookback and independent consultant reviews.

What do you think about Bitmex paying $100 million to settle charges with the CFTC and FinCEN? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Cross-chain bridge equipped altcoins rally higher despite China’s crypto ban

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Cross-chain bridge equipped altcoins rally higher despite China’s crypto ban

The bullish momentum that had been growing across the cryptocurrency ecosystem over the past few days came to a screeching halt on Sept. 24 as news that China had banned cryptocurrency transactions made the rounds on social media and initiated an abrupt fall in the price of Bitcoin (BTC) from $45,000 to $42,000. 

After the initial knee-jerk reaction and a brief period of time for the market to digest the news, traders jumped back in to buy the dips on several altcoins, which helped some of the losses seen earlier in the day.

Top 7 coins with the highest 24-hour price change. Source: Cointelegraph Markets Pro

Data from Cointelegraph Markets Pro and TradingView shows that three of the biggest gainers over the past 24-hours were Ren (REN), Celer Network (CELR) and Civic (CVC).

Ren brings DAI and BTC to Arbitrum

Ren is a blockchain protocol that focuses on facilitating interoperability and liquidity transfer between different blockchain networks through a series of darknodes that help to protect user privacy.

According to data from Cointelegraph Markets Pro, market conditions for REN have been favorable for some time.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. REN price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for REN was in the green zone for the majority of the past week and hit a high of 81 on Sept. 21, around two hours before the price increased 58% over the next three days.

The positive momentum for REN has come as the protocol has launched wrapped forms of Bitcoin and DAI on the Ethereum (ETH) layer-two solution Arbitrum.

Celer Network releases cBridge 2.0

The Celer Network is another Ethereum layer-two scaling solution that has been gaining momentum in recent weeks thanks to its ability to lower transaction costs through the use of off-chain transaction handling, which helps to increase the scalability and the transaction throughput of its network.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for CELR on Sept. 20, prior to the recent price rise.

VORTECS™ Score (green) vs. CELR price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for CELR climbed into the green on Sept. 18 and reached a high of 74 on Sept. 20, around 26 hours before its price began to increase by 99% over the next three days.

The increase in price and demand for CELR has come following the launch of its cBridge 2.0 cross-chain token bridge that facilitates the transfer of assets between multiple blockchain protocols, including Ethereum, Binance Smart Chain and Arbitrum.

Related: Diminishing returns: Is Bitcoin underperforming compared to altcoins?

Civic partners with Solrise Finance

Civic is a protocol focused on providing a blockchain-based identity management solution capable of satisfying Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements from regulators while also protecting the data and privacy of users on the network.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for CVC on Sept. 21, prior to the recent price rise.

VORTECS™ Score (green) vs. CVC price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for CVC began to pick up on Sept. 21 and reached a high of 74 around eight hours before its price increased by 45% over the next two days.

The boost in momentum for Civic comes following the Sept. 23 announcement that the protocol has partnered with Solrise Finance to help launch the first permissioned decentralized exchange (DEX) on Solana.

The overall cryptocurrency market cap now stands at $1.879 trillion and Bitcoin’s dominance rate is 42.1%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Morgan Stanley exec says Bitcoin is the ‘Kenny from South Park’ of money

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Morgan Stanley exec says Bitcoin is the ‘Kenny from South Park’ of money

Morgan Stanley exec claims that Bitcoin continues to rise from the dead like the cartoon character Kenny in South Park.

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Morgan Stanley exec says Bitcoin is the ‘Kenny from South Park’ of money

Morgan Stanley’s Dennis Lynch shared a light-hearted analogy during a discussion at Morningstar’s yearly investment conference today, claiming that Bitcoin’s insatiable ability to defy the odds and rise from both technical and fundamental adversity portrays that of the South Park cartoon character Kenny.

The 24-series show has garnered a global audience base for its weird and wacky sense of humour, epitomised by the long-standing gag that Kenny dies in each episode, only to be rebirthed and gleefully unaware of his brutal demise in the following show.

Head of asset management firm Counterpoint, a Morgan Stanley subsidiary — and a keen advocate of the show — Lynch expressed his belief in the resilience of leading cryptocurrency asset Bitcoin since its inception over a decade ago.

After experiencing and surviving numerous bearish cycles, Bitcoin has established itself as a widely recognised and respected modern payment method and store of value in the mainstream market.

Major corporations such as Microstrategy, Tesla, and Galaxy Digital Holdings have all publicly revealed billion-dollar investments in the asset, the latter now reporting an immense $5.3 billion.

In his Kenny-inspired speech, Lynch stated:

“I like to say that bitcoin’s kind of like Kenny from South Park — he dies every episode, and is back again.”

Technical data from Cointelegraph Markets reveals that Bitcoin (BTC) has fallen 14.04% across the week in the wake of yet another Chinese crackdown on cryptos.

The People’s Bank of China, or PBoC, this week announced a fresh strategy to combat cryptocurrency adoption in the country. Legal and governmental departments will strive to improve their coordination and communication practices to suppress crypto-related activities effectively.

However, according to Lynch, Bitcoin already possesses some of the same antifragile traits — witnessed in the monopoly of big-tech firms, burgeoning political establishment, capital-hungry Wall Street financial markets and the self-rejuvenating Greek mythological monster Hydra — to counter this.

“I think (bitcoin) demonstrates some ‘antifragile’ qualities during this period of time.”

The term antifragile was coined by esteemed author Nassim Nicholas Taleb in his 2012 book, Antifragile, to express the definition for the opposite of fragility, as in something that gains from disorder.

In the book, Taleb wrote:

​​”Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.”

A well-documented example of this was Bitcoin’s previous all-time high of $20,000, a seemingly insurmountable figure during the harsh bear market of 2018–2019 — and especially following the pandemic’s financial crash to $4K — but a level that one year on was more than tripled with $65,000.

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Diminishing returns: Is Bitcoin underperforming compared to altcoins?

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Diminishing returns: Is Bitcoin underperforming compared to altcoins?

The first half of 2021 in the crypto markets brought many comparisons to 2017. Bitcoin (BTC) was on a tear to its all-time high, the new frontier of decentralized finance emerged, and nonfungible tokens were gaining myriad celebrity endorsements. 

But after the initial months of euphoria and a subsequent sell-off, BTC’s performance has been far more lackluster. The recent market sell-off resulting from the Evergrande crisis has compounded fears. However, it can’t be ignored that many altcoins, particularly platform tokens, have undergone impressive runs and, in some cases, even bucked broader market trends. 

With hopes still high that another bull run is likely during this halving cycle, should BTC holders be worried that the flagship asset is underperforming? 

2021 by the numbers

Between January and reaching its all-time high (ATH) of nearly $65,000 in April, BTC posted gains of 113%. Based on current prices, the year-to-date (YTD) gains are around 45%. 

By comparison, Ether (ETH) gained 497% between January and its ATH in May, while its year-to-date rose over 300% despite taking a recent battering

However, even ETH’s impressive gains are nothing compared to rival platform tokens. Cardano (ADA) has posted a staggering YTD increase above 1,000% while barely yet supporting any real activity. Solana’s SOL has even dwarfed that figure by rising over 8,000% since January. This comes after dropping from its all-time high above $200. Honorable mentions go to Polygon (MATIC), Avalanche (AVAX) and Terra (LUNA), all of which have undergone impressive rallies in 2021. 

Stephen Gregory, CEO of Currency.com, told Cointelegraph:

“Generally, there is a lot of enthusiasm for Web 3.0, whether that’s powering the metaverse with ETH, or much faster transaction times with SOL, or whatever the future holds for ADA. People see holding layer-one protocols as strong value picks for the future. Investing in sound tech and following the momentum and progression of the asset class following real-world use cases seems to be prudent.”

Why are altcoins outperforming BTC? 

On the face of it, the numbers do indeed seem to indicate that BTC is underperforming compared to other coins. One factor that could explain this is the law of diminishing returns. BTC is the oldest asset and twice the age of Ether. Although Bitcoin has delivered eye-popping returns during its lifetime — making billionaires out of early adopters — is it possible that the flagship asset can continue to deliver three- or four-figure returns as it ages? Given that Bitcoin’s entire economic model is based around the principle of diminishing returns, with block rewards halving every four years or so, it seems plausible. 

Moreover, as Cointelegraph has previously reported, as more investors and institutions pile in, Bitcoin has begun to mirror other assets. We can note this effect in the dampening of Bitcoin’s volatility over time. 

Arguably, the only reason that markets continue to grow is that investors continually seek out new assets of value. Therefore, while BTC appears to be delivering lower returns, it shouldn’t surprise anyone that investors are interested in more volatile assets to profit from price movements. 

But that leads to other questions: Is there a risk of creating a self-fulfilling negative cycle from BTC? As investors look to other assets to earn large gains, will BTC inevitably become less attractive? 

Or, if we dare to imagine it, does the current appetite for platform tokens indicate that investors’ sentiment toward Bitcoin is gravitating to the “no intrinsic value” argument? After all, stronger fundamentals and potential for adoption is perhaps the one big selling point that platform tokens have over Bitcoin. 

Micha Benoliel, co-founder and CEO of decentralized Internet-of-Things network Nodle, believes that platform tokens have a bright future ahead, but perhaps not at the expense of BTC. He told Cointelegraph:

“I think the market is just beginning to understand the value of blockchain ecosystems and services. That’s why altcoins are performing so well. Bitcoin, which is more a store of value, is on its trajectory and is becoming a crypto asset class with less risk and for people with a long-term investment strategy.”

Is $100,000 Bitcoin still realistic?

From another angle, even if Bitcoin returns are diminishing compared to their historical highs, gains continue to outstrip other assets, such as stocks and gold, by far. At the current rate of diminishment, BTC will continue to deliver superior performance for quite some time to come. As such, it seems unlikely that an exodus is imminent. Daniele Bernardi, CEO of investing firm Diaman Group, told Cointelegraph:

“Of course, Bitcoin appears to be underperforming compared to small- and medium-cap coins in percentage terms. But don’t forget the large difference in capitalization. If BTC prices increase by 10%, it would raise the market cap by $80 billion. If Solana, for example, increases by 100%, the real value in market cap goes up by $40 billion. For this reason, I don’t think there’s any basis for doubting Bitcoin or its position as the market-leading asset.”

As far as the bull trajectory goes, it’s also worth noting that in 2017, Bitcoin gained 1,900% between January and December. However, until now in 2021, it’s only up around 450%. If prices do follow the same pattern, that will put us on track for a year-end BTC price of around $138,000. 

That estimate is eerily close to the $135,000 year-end price predicted by the stock-to-flow (S2F) model, which continues to be the most accurate forecast of Bitcoin prices. Indeed, August’s BTC closing price is, give or take, exactly as predicted by S2F creator PlanB back in June, and September’s could be on track to follow suit. 

Bitcoin stands firm

The numbers illustrate that BTC’s returns are indeed diminishing over time across consecutive bull cycles. But this shouldn’t be surprising to anyone, considering Bitcoin’s economic model. Michaël van de Poppe, Cointelegraph contributor and full-time trader, agrees, telling Cointelegraph: 

“Investors shouldn’t be worried. It’s actually a natural habit of the markets to slow down and have lengthening cycles. This is something we will see more often in the future and will actually open up the gates for more investors. The less Bitcoin will be swinging around with their performance and daily movements, the better as an asset in your portfolio.”

However, gradually decreasing returns should not detract from the fact that Bitcoin is, by any measure, delivering a healthy performance in line with even the most bullish forecasts. According to Igneus Terrenus, head of communications at Bybit, BTC is still by far the go-to coin for newcomers — institutions or individuals — entering the space. He told Cointelegraph:

“Bitcoin remains the best investment-grade crypto asset for institutional investors. And a relatively more stable ranging pattern may actually help Bitcoin’s case as an alternative to gold and add fuel to its long-term rise. When one zooms out to five years or 10 years — horizons familiar to whales and institutional investors — Bitcoin returns beat everything.”

It’s also impossible to say whether any of the recent platform token rallies would have happened if BTC had been languishing in long-term bear territory, as money tends to flow down from BTC. 

What’s more, the models show that there’s still every reason to believe in a year-end BTC price above six figures. Currency.com’s Gregory agreed despite the increasing demand for platform tokens. He told Cointelegraph, “BTC is outperforming the market but is currently being held back by macro market trends and events on Wall Street. However, historically, Q4 has been the strongest for BTC, and it is likely history repeats itself before the end of 2021.”

Nevertheless, while BTC is in no danger of losing its status as crypto’s flagship asset, soaring altcoins undeniably offer bigger opportunities right now for those who believe they can time the markets.

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