Cryptos under surveillance – During the summer of 2019, the Financial Action Task Force (FATF) developed very strict rules for cryptocurrency transfers . Already these restrictive rules have gradually imposed themselves (by force of law), the United States still wish to toughen them. At this rate, soon, not a single bitcoin should escape Washington’s eye.

An already painful rule … even more restrictive

As a reminder, the Bitcoin Profit has established a very rigid regulatory framework for companies providing services related to digital assets.

The traveller’s rule has thus been implemented by a growing number of states, with the fight against money laundering and the financing of terrorism as a pretext .

E-NIGMA surveillance blockchain

It requires cryptosphere providers to collect, store and transmit all information relating to cryptocurrency transfers, both on the sender and on the recipient of the funds of a transaction. In other words, a real headache of red tape for crypto services, especially for the smallest.

However, this does not yet seem sufficient for the American Federal Reserve (Fed) and the Financial Crimes Enforcement Network (FinCEN), which have just asked to lower the threshold from which this rule applies.

A threshold slashed from 3,000 to just $ 250

In their proposal, the Fed and FinCEN ask that the threshold from which this rule applies be drastically lowered, in order to cover all crypto transactions that would exceed 250 dollars .

This reduction would only concern international transfers . Domestic transactions would remain at the current trigger level of $ 3,000.

There is no justification for this request to divide this threshold by more than 10 .

The company, which claims to be based in Europe, promises returns of 30% per month on investments.

Philipe Wook Han, 37, from Paraná, is known in the Brazilian financial market. He is suspected of orchestrating a R$1 billion coup through FX Trading/F2 Trading, a supposed financial pyramid associated with cryptomoedas that promised revenues of 2.5% per day. The São Paulo Civil Police, as reported by Livecoins in May, opened three enquiries to investigate the case.

Despite all the „financial chaos“ generated by Han, last month the Brazilian of Korean descent is behind a new supposed coup: My Hash, which promises investors a monthly income of 30%. The company claims to be formed by a Swiss group of private banks. It also claims to have received a banking licence from FINMA, a sort of Swiss Securities Commission (CVM).

The alleged licence My Hash claims to have received from FINMA, however, is not true. Since last month, the company has been the subject of an investigation by the Swiss body. According to FINMA, My Hash has no commercial registration and cannot act. In other words, the alleged scam cannot attract investors or make miraculous promises of income.

My Hash is on the public list

About three weeks ago, the Swiss authority put Philipe Wook Han’s new company on a public list of companies and individuals not allowed to operate.

„Several financial services require authorisation. If Bitcoin Up receives information that an ISP is operating knowingly or unconsciously without authorization, it will investigate the matter,“ the Swiss CVM reports on its website.

„If initial suspicions are consolidated, FINMA may initiate enforcement proceedings and impose measures of varying severity that may even lead to the closure of the company,“ FINMA adds.

The Swiss authority emphasizes, however, that the fact that a company is on the list does not mean that its activities are illegal. The name on the list, according to FINMA, only shows that the business or person does not have the backing to act. If My Hash proves to be serious in the course of its investigations, for example, it may be off the list.

My Hash also does not have CVM authorization

In addition to not having the Swiss agency’s authorization, the company also does not have the CVM’s endorsement or waiver to capture clients in Brazil.

However, the CVM only regulates capital market companies incorporated in Brazil or with a branch in the country, according to information provided by the agency’s press office. As My Hash claims to be only in Europe, the federal agency is not competent to regulate the business, even if the investors captured by the company reside in Brazil.

Spreaders of supposed pyramids „adopt“ My Hash

Despite My Hash’s creator’s past, the company has already become a darling of so-called pyramid promoters. In the last seven days alone, according to Livecoins, at least 20 videos about the new alleged fraudulent scheme have been published on YouTube.

One of the main promoters is youtuber Valberti Freitas, of the Academy of Leaders. He states on his channel that he seeks to educate people and „bring up-to-date information about blockchain technology, in a responsible and truthful way, teaching you to work from home at almost zero cost“.

In the last two days, Freitas has published at least six videos about Philipe Wook Han’s new supposed coup. In the material released this Thursday (9), for example, he claimed to have allegedly profited 1.03% in one day on the company’s platform.

Freitas, however, is far from being an educator. This is because he is known to disclose alleged scams, like FX Trading/F2Trading and Unick Forex, allegedly a gaucho pyramid that moved R$ 29 billion illegally. In addition, he advertised for Nui International, also suspected of fraud.

Sentiment in Bitcoin futures and options remained stable despite the news about BitMEX and Kucoin, indicating that a bullish run towards $12,000 may be near.

BitMEX used to be the undisputed leader in Crypto Bank futures trading (BTC) and if something similar to yesterday’s civil enforcement action had happened in 2015 or 2018, the cryptomarket would have completely collapsed.

Regardless of the partial recovery to USD 10,600, which was relatively quick, the derivatives markets remained stable during the drop from USD 500 to USD 10,400. Neither BTC futures nor options showed any signs of discomfort with the bad news.

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The futures market almost ignored the whole event and this is a strong indicator that investors are still bullish. It also suggests that the markets will test the USD 12,000 sooner than we expected.

As shown in the graph above, BitMEX had almost 50% of the market share until July 2019. This advantage came from being the forerunner of the so-called perpetual contracts market (reverse trading). In addition to not requiring KYC, the derivatives exchange also offered up to 100 times leverage and this helped to grow its user base.

After the market correction during Black Thursday saw the price of Bitcoin fall below USD 3,600, rival exchanges rushed to offer similar services and this led to BitMEX losing its position as the leader over the course of 2019.

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Some in the crypto community believe that BitMEX’s banning of American customers was the main culprit in its loss of market share, and others point to its aggressive settlement engine as the catalyst.

During the March 13 collapse, BitMEX faced several technical difficulties and was offline for 25 minutes. Somehow, when the inconvenience occurred and the price of Bitcoin fell below USD 4,000, the BitMEX insurance fund was able to increase its holdings by 1,000 BTC during the following 48 hours. Since that event, the open interest in BitMEX futures has been set below USD 1 billion.

If we look at the most recent data, BitMEX became almost irrelevant in terms of volume. In the last three months its market share was around 18% and although it’s impossible to measure the impact of the exchange on BTC’s price, it’s clear that it lost its advantage in the last eighteen months.

Bitcoin futures remained stable despite the news

The base indicator compares the price of futures contracts with the current level on regular spot exchanges. It is also commonly known as a futures premium.

Healthy markets generally show an annualized basis between 5% and 15%, this situation is known as contango. On the other hand, a negative basis (discounted futures) usually occurs during strongly bear markets.

BTC futures curve

The graph above shows an annualized 3-month contract premium of 5.4% or more for each exchange, except for BitMEX. Essentially, professional traders are indicating that their expectations were not affected by yesterday’s events.

If there is anything to be taken from yesterday’s news it is that it is an exchange specific issue with little or no impact on the futures markets in general.