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BitMEX Lawsuit, Iran Crypto Mining and a Strange Bitcoin Movement: News of the Week
Last week in crypto saw a new lawsuit filed against Bitcoin derivatives giant BitMEX, a strange movement of bitcoins mined in 2009, the Iranian government prioritizing crypto mining among other noteworthy news reports.
BitMEX parent company targeted in new RICO lawsuit
Cryptocurrency exchange and derivatives trading platform BitMEX is being sued by Puerto Rican company BMA LLC. The accusations launched against the popular platform include the orchestration of a massive financial crime ring.
Specifically, the suit has been filed in the United States District Court for the Northern District of California and claims that BitMEX’s parent company, HDR Global Trading, is involved in an illegal multi-billion-dollar racketeering conspiracy involving wire fraud, money laundering, unlicensed money transmission and other illicit activities. Furthermore, it is alleged that the company violated the Racketeer Influenced and Corrupt Organizations Act (RICO).
HDR Global Trading, meanwhile, has brushed off the lawsuit’s allegations as little more than “rehashed […] information culled from the internet” filed by “a serial filer of claims against companies operating in the cryptocurrency space [that is] widely recognized for operating just like a patent troll.” The statement comes two weeks after BMA LLC filed a lawsuit against blockchain firm Ripple.
Not long after news of the lawsuit started circulating, BitMEX experienced a “major outage” — resulting in its trading engine going offline. The platform resumed operations some hours later.
- Should the case against BitMEX be taken seriously, ripples would be felt throughout the entire cryptocurrency industry. However, BMA LLC previously targeted cryptocurrency derivatives exchange FTX on accusations of price manipulation, but dropped the case.
- BitMEX has been losing market share in the increasingly-competitive cryptocurrency derivatives market. News of a lawsuit against its parent company likely won’t bolster its reputation.
- Unlike the BitMEX outage on March 13, which coincided with the price of Bitcoin (BTC) crashing to 12-month lows, the price of BTC remained relatively stable during the outage incident.
Bitcoins mined in early 2009 transacted on-chain
50 bitcoins were moved in two transactions on Wednesday from an address that had remained dormant since early 2009 — extremely early in Bitcoin’s lifespan. According to cryptocurrency transaction tracker Whale Alert, “the coins in this transaction were mined in the first month of Bitcoin’s existence.”
These rare movements sparked a wave of speculation that the bitcoins in question may (or may not) belong to Bitcoin’s anonymous creator, Satoshi Nakamoto. Additionally, the price of BTC immediately dropped after the news emerged — likely caused by fears that the founder may be preparing to sell a large sum of the early-mined bitcoins.
The last time bitcoins mined from this time period were moved was in August 2017.
- The price of Bitcoin almost-instantly dropped by seven percent, illustrating how quickly the cryptocurrency market is to react to speculation surrounding coins Satoshi Nakamoto may own.
- The transaction also has larger implications in the Wright v. Kleiman case. NChain CTO Steve Shadders listed the address that the coins were sent from as potentially belonging to Craig Wright, who claims to be the real Nakamoto.
Iran begins drafting a national crypto mining plan, looks to impose further regulations
The president of Iran, Hassan Rouhani, has ordered the country’s government to craft a new national plan to take advantage of the maturing crypto industry. Specifically, he told the Central Bank of Iran (CBI), the country’s energy department and the ministries of information and communication technology to create a crypto mining proposition, with facets addressing its regulation.
Two days prior to Rouhani’s order, the parliament of Iran proposed implementing its foreign exchange and currency smuggling regulations in the realm of cryptocurrencies. Additionally, the bill aims to force the registration of cryptocurrency exchanges servicing Iranian users with the CBI.
- Iran’s renewed interest in crypto mining on a national level comes months after United States President Donald Trump’s administration evidently accused the country of using cryptocurrency to evade sanctions.
- The possible implementation of tighter cryptocurrency regulations could be made in an effort to prevent capital flight out of Iran.
Bakkt’s business grows as CME Bitcoin open interest hits new highs
Ahead of the launch of its consumer app, Intercontinental Exchange’s crypto venture, Bakkt, added more than 70 clients to its institutional digital asset custody business, Bakkt Warehouse. Additionally, clients may purchase insurance coverage worth $500 million.
Meanwhile, the open interest rate for Bitcoin options on CME hit new all-time highs following the recent news that Paul Tudor Jones is investing in the leading cryptocurrency (more accurately, in Bitcoin futures), which he referred to as a nascent store of value.
- Improved on-ramps for institutional investors into the Bitcoin and cryptocurrency space have largely been responsible for the dramatic increase in institutional interest in the space. As Bakkt continues to grow its business, it is reasonable to expect this trend to continue.
- Open interest for BTC options on CME is signaling that institutional investors are having a stronger impact on the market.
US congressman proposes Advancing Blockchain Act
Kentucky Congressman Brett Guthrie, together with members of the House Energy and Commerce Committee, put forth a blockchain-focused bill called The Advancing Blockchain Act. The bill is meant to bolster the United States in its race to be at the forefront of emerging technologies.
The proposed act aims to promote the use of blockchain technology in the U.S. economy.
- The United States hasn’t exactly been at the forefront of blockchain technology and cryptocurrencies. The new act would be a significant step in helping the country keep pace with the foreign competition.
- China — America’s trade war opponent — has, thus far, led the way when it comes to the implementation of blockchain technology on a national scale.