In this week’s cryptocurrency round-up, we have some good news in the form of a Canadian town accepting cryptocurrency as a form of property tax payments. While this might not be an immense catalyst for mass adoption, it is undoubtedly a step in the right direction. However, there is some bad news for South Korean cryptocurrency exchange Bithumb, which claims that it has lost millions as the result of an inside job. As if that wasn’t enough bad news for cryptocurrency exchanges, Gatecoin is being liquidated.
A Staten Island man is facing a significant amount of prison time for defrauding investors and stealing from them while claiming that he could make a considerable return on their investment, and he did this from his home, and through social media networks Facebook and Twitter. Additionally, Japan’s largest railways operator might soon be accepting crypto, and a Russia social media giant might be launching its own cryptocurrency.
Innisfil Makes History
While governments and corporations all over the world are praising blockchain and speaking about its potential applications and implementations, many cryptocurrency enthusiasts want to see some concrete action with regards to mass adoption. There are many in the cryptocurrency community that don’t believe the true value of cryptocurrencies will be unlocked until you can pay for everyday items and services with them. One colossal move was made last year when Ohio became the first state to accept Bitcoin for tax payments, and it is clear that the state saw the move as an opportunity to attract blockchain and cryptocurrency-related startups to the state.
It appears as though the first Canadian municipality has approved an initiative to allow residents to pay their property taxes in Bitcoin, and tweeted the announcement, as well. The town is named Innisfil, and it is located in Ontario, Canada, and has a population of around 36,000. This is the first Canadian town ever to allow for this, and it means that not only residents, but a local business, will be allowed to pay their property taxes in Bitcoin. This is being done through a partnership with Coinberry, and the town points out that paying in cryptocurrency will be much more efficient than using credit cards. The mayor of Innisfil praised the move, calling it proof that the town is a “future-ready and innovative community”. Others are more cynical and believe that the announcement is nothing more than a publicity move since it doesn’t encourage any long-term investment or true mass adoption.
Interestingly enough, the town points out that volatility might play a role in payments. For example, if the price of Bitcoin depreciates, the individual or business might owe a bit more in taxes, and if the price of Bitcoin appreciates, the town might actually owe the individual or business, as well.
One of the most persistent issues, both perception-wise and practically, with the cryptocurrency investment world is the idea that funds aren’t completely safe. While there are many institutional investors that already recognize that the space has a certain amount of volatility, the high-profile cryptocurrency hacks prevent many from investing a significant amount of money into the space. There have been a number of high-profile hacks over the years, and one has included a $30 million hack of Bithumb, a prominent South Korean cryptocurrency exchange. Unfortunately, it appears that the exchange has been hacked yet again, even after regulators have examined the exchange for security flaws after the first hack.
In this new hack, the cryptocurrency exchange lost $13 million worth of EOS, which is significantly less than the last hack, but is still a sizable amount of money. The company is claiming that this is the result of an inside job, because they have not been able to find evidence of “external exploit”. In addition, the exchange is already working with local agencies and other exchanges in hopes of recovering funds, although it is unclear what chance there is of actual recovery. Bithumb is also conducting an internal investigation, as well.
There are many cryptocurrency exchanges out there today, but how many have been around for years? One of those exchanges is Gatecoin, based in Hong Kong, which was launched back in 2013. This certainly gave Gatecoin a certain status, considering that it was operating before many in the world even knew about cryptocurrency or blockchain.
However, it appears that Gatecoin has officially been taken over by liquidators. There were many that felt as though this was coming, since China has cracked down on the entire sector in general. For those who are wondering as to what led to this situation - the exchange suffered a $2 million hack in 2016. If you are curious as to how much that would be worth at current prices, it would be well over $20 million. While this wasn’t enough to stop the exchange but operating, its bank accounts were frozen in 2017.
It looks as though the Gatecoin era is finally over, as liquidators are taking control. A document was sent to creditors of the exchange stating that no directors of the exchange yield any power related to the company.
Staten Island Fraudster Faces 20 Years
There are many individuals all around the world that seem to still believe that the cryptocurrency space is an opportunity to defraud investors out of money, and the latest criminal hails from Staten Island in New York City. The individual utilized well-known social media networks Facebook and Twitter in order to perpetuate the scheme. Specifically, New York resident Patrick McDonnell was arrested and charged for wire fraud.
Apparently, McDonnell described himself as a crypto trader, and claimed that he can offer expert advice to clients to help them profit. He would falsify balance sheets to his clients, and apparently stole the money through a company called CabbageTech rather than ever investing the money at all. When clients would ask for their funds back, he would simply stop responding to them altogether. CabbageTech was also known as “Coin Drop Markets”.
McDonnell conducted the entire scheme from his Staten Island home, and was fined $1 million last year, as well. He had claimed at the time that his investor funds had been hacked, although prosecutors believe that this is false.
Pay In Crypto, Ride The Train
Many have pointed out that cryptocurrency will gain more value the more that we use it, and since we currently use fiat currency to purchase everything from food, coffee, and various services, that partnerships with major corporations should be heralded as opportunities for mass adoption. One obvious situation where cryptocurrency can play a massive role is with public transportation, and if individuals were allowed to use cryptocurrency to ride trains, buses, etc - it might certainly help improve the overall public perception of cryptocurrency, and increase awareness of the sector.
It appears as though Japan’s biggest railway operator, the Japan Railways Group, or the JR Group, is exploring how to add cryptocurrency payment options for its users, meaning that millions in Japan might be able to soon pay for their rides in crypto. This is even more significant in Asia, as China and India, two of the most influential countries in the region, and the two most populous countries in the world, have not fully embraced the sector at all. Some have suggested that this could be a unique opportunity for other countries such as Japan, Thailand, and Singapore.
Japan has been making more headway with regards to overall adoption than many others in the region and the world. For those who might not be aware, the country made Bitcoin a legal form of payment in 2017, before many other countries were even discussing cryptocurrency. In addition, Japan’s largest online retailer, Rakuten, has considered accepting crypto, as well.
Russia Social Media Giant Gets Into Crypto?
Ever since it was reported that Facebook would develop a stablecoin; many have been wondering about when exactly other social media companies would follow suit. It appears as though the Russia social media giant Vkontakte, known commonly as VK, might be launching its own cryptocurrency.
VK is the third-most popular website in Russia, and boasts somewhere around 100 million users, so it is not surprising that the company is exploring this as an option. The company has already launched a money transfer system in 2018. “VK Pay” allows for users to send payments to each other on the network using a credit or debit card. With regards to cryptocurrency, the company has made no formal announcement by any means. The project is under development, and details have been scarce.
Given the fact that the social media company has millions of users, the idea is that the cryptocurrency can help to galvanize a financial ecosystem that can help with regards to bartering on VK’s marketplace, for example. In addition, the cryptocurrency would allow individuals to tip VK content creators with the cryptocurrency for content that they appreciate, as well. The fact that the company is exploring the option is notable, considering that Russia has not really offered true guidance with regards to regulating the cryptocurrency sector.