Category: Cryptocurrency Law

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Australia Cryptocurrencies Cryptocurrency Law Scams

Online Romance Cryptocurrency Scams On The Rise

Scams carried out by means of romantic attraction are one of the oldest tricks in the book – but reports from the Financial and Cyber Crime Group reveal that many fraudsters have modernized their methods.

Investigators have reminded Australians to stay vigilant to online romance scams, following a spike in complaints involving cryptocurrency-related fraud – many of which start on online dating platforms.

The Financial and Cyber Crime group has investigated more than 70 complaints from victims over the last six months –some Queensland victims have lost several hundred thousand dollars.

Criminal Organizations Seem To Be The Culprits

The ASIC has reported that from March through May of 2020, the rate of online scams involving cryptocurrency has increased by 20%. These scams follow a generally predictable pattern.

First of all, a romantic partner or even a simple acquaintance tells an unsuspecting victim how they made money on a certain trading platform and encourages them to deposit as many funds as possible. Reassuring the client that it is perfectly safe to trade – since blockchain transactions cannot be faked – the bad actor gains the victim’s trust.

The catch, however, is that the platforms the victims are directed to are actually fake and do not deal with cryptocurrencies. Once the new user starts trading, the user is shown fake data to convince them that they are turning a profit.

Eventually, the user is shown more fake data showing trading losses, despite the fact that there is either no trading taking place – or the devaluation of the cryptocurrency imitated by the platform is nowhere as severe.

Once a victim tries to withdraw whatever funds they have left, the bad actor either suddenly cuts off all contact or requests more money in order to release the remaining funds.

The targets also often become victims of identity theft or data mining, carried out through the usual methods – however, due to the nature of cryptocurrency trading platforms, it does not look out of place for the fake website to request a photo of an ID card and a selfie in order to perform KYC.

The ASIC suggests all traders employ caution and use their better judgment. Before engaging in cryptocurrency trading, always make sure that the platform you are trading on is legitimate. For an in-depth list of measures you can take to stay safe while trading cryptocurrencies, you can check out our article on the subject. 

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Australia Commodities Cryptocurrency Law

Australian University Detects GDPR Conflict With Blockchain

A recent finding by the University of South Australia casts doubt on the legality of blockchain transactions when met with European privacy standards.

According to the new research, blockchain can violate important European Union laws that are part of the well known GDPR agreement – due to the fact that blockchain stores all information about a buyer, or a seller.

Dr. Kirsten Wahlstrom, a researcher working in the field of cryptocurrency technology weighed in on the resurgence of blockchain technology, comparing it to the anonymous wild west the Internet was 20 years ago.

“We’re at a really delicate point with this because, increasingly, societies and economies are organised around data, and that has huge implications for privacy. The main problem is, we’re still struggling to understand what ‘privacy’ actually means in an online world. It’s not the same as data security and protection, it’s about how individuals control their whole online identity, and expectations around that change from person to person and situation to situation.”

Dr. Kirsten noted the fact that the definition of privacy is changing – and more so due to the mainstream adopting of blockchain, which makes it impossible for a blockchain contributor to hide their identity if previously revealed.

The European Union’s “Right To Be Forgotten” has been a relief for privacy buffs worldwide – yet Dr. Kirsten states that as long as the EU GDPR stays the way it is, blockchain technologies may not see widespread adoption within the EU. If information is permanently stored within a blockchain, EU laws would, at the moment, prevent the information necessary to catch a bad actor from being used in an international court case.

Dr. Kirsten is in favour of delving deep into the ethics regarding the privacy owed to each human being. Optimistic about the future of blockchain, she nevertheless admits it might take a while until the technology is properly regulated by all relevant bodies.

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Australia Blockchain Cryptocurrency Law

Lygon Blockchain Guarantee Solution To Go Commercial

Recently, ANZ Bank, Westpac, and Commonwealth Bank joined forces to found Lygon, a company that will switch traditional bank guarantees signed on paper for blockchain-based smart contracts.

Now – after a successful pilot with its founders and 20 other Aussie businesses – Lygon seems to be going commercial.

 Speeding up SLAs

Up until now, banks would issue physical guarantees after an arduous KYC procedure that could take up to a month to complete.

With Lygon, the expected SLA has shrunk to a single day. The three Australian banks ANZ, Westpac, and CBA Switch – partnered with the Scentre Group – are planning to market the Lygon platform for commercial use, according to a report published on the 1st of September.

When asked for comment, Nigel Dobson, the chairman of Lygon, stated the following:

“The commercialization of the Lygon platform represents a significant milestone for blockchain technology in Australia and globally. We’ve gone from a proof of concept to a newly incorporated company and commercially available platform in two years – at a time when the demand for digital has never been stronger. In digitizing a bank guarantee, we’ve essentially transformed a three-way contract. We’ve digitized the paperwork, the process, and the legality behind it. This means wherever there’s a manual, paper-based process based on legal frameworks or similar regulations, we can apply Lygon.”

Lygon is reported to have brought new applicants on board within in under 15 minutes – a great show of interest in the platform to be certain.

In addition to checking potential customers credit, Lygon will support several common bank operations such as including amendments and cancellations.

After the commercial launch of the blockchain banking platform, Lygon shareholders say they plan to expand into New Zealand and other international markets in 2021. In order to garner more interest in the platform, the developers have promised more features to come soon.

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Australia Bitcoin Cryptocurrency Law

Australian Bitconnect Representative Banned From Offering Financial Services For Seven Years

Due to his involvement and promotion with the Bitconnect platform – now widely seen as the second biggest Ponzi scheme in crypto history – John Bigatton has been banned by ASIC from providing financial services.

This decision stems from the fact that Bigatton provided – according to ASIC – unlicensed financial advice while working for Bitconnect from August 2017 to January 2018.

Investigation Still Pending

As a wider investigation into specifics of the company are still ongoing, Bigatton still has the right to appeal the decision with ASIC’s Administrative Appeals Tribunal – although it will most likely be rejected.

However, ASIC’s statement at the moment is the following:

“Mr. Bigatton is not a fit and proper person to provide financial services: is not adequately trained, or is not competent, to provide a financial service or financial services, and is likely to contravene a financial services law.”

Bigatton is believed to have collected at least $100 thousand out of $2.6 billion that Bitconnect had collected from investors – right before Bitconnect abruptly shut down their platform, in what was described at the time the biggest exist scam in history.

Australian authorities commenced their investigation of Bigatton after the platform’s collapse.

His assets were frozen by the Federal Court of Australia in December 2018 – a measure promptly followed by travel restrictions imposed on him a month later.

John Biggaton’s wife, Madeline Bigatton, mysteriously disappeared in March 2018, and an investigation into her disappearance and possible death will be started this year.

Although BitConnect was believed to be crypto’s largest Ponzi scheme, last year the OneCoin scam outdid it by defrauding investors out of approximately $4 billion.

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Australia Cryptocurrency Law Industries

Within 10 Years, All Fintech May Be Blockchain-Based

On the 2nd of September, Andrew Bragg, a member of the Australian government’s Senate Select Committee on Financial Technology and Regulatory Technology released a statement about the current recession, citing blockchain as a way out.

The last financial quarter’s negative results prompted the government to look toward new technologies as a way out of the current predicament – and one of them is investing in the ever-growing fintech sector.

The report contains multiple references to blockchain and technologies based on distributed ledgers.

Huge Profit Margins Estimated

In the report, it is speculated that the potential gain due to using blockchain technology is “estimated at $175 billion annually within five years and $3 trillion by 2030”.

Piper Alderman’s partner Michael Bacina was also quoted, who believes that the use of blockchain will only grow exponentially as more and more business owners see other business ventures reap the reward, assuring investors of its safety.

“Most fintech and regtech projects will either be built predominantly on distributed ledger technology or blockchain or heavily using that within the next 10 years.”

Power Ledger’s co-founder and Executive Chairman Dr. Jemma Green also highlighted that although over $26 billion had been raised through ICOs, Australia gained less than 1 percent of the profit. By properly regulating blockchain technology and ICOs even further, Dr. Green believes that tens of thousands of new jobs will be created, which will in turn bring in even more revenue to be invested in further development.

With the recent adoption of blockchain for quality assurance in Australia, an industry growth of $100 billion dollars in the agricultural sector is foreseen by senator Andrew Bragg.

A final report is due in April 2021, based on the current success stories citing the use of blockchain to record data pertaining to properties and investments as a direct reason for increased revenue.

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Coinbase Cryptocurrencies Cryptocurrency Law

Coinbase Platform for Startups In The Works

Staple cryptocurrency exchange platform Coinbase is developing a platform designed for startups that will allow new companies to mint their own custom crypto assets.

Coinbase CEO Brian Armstrong was recently a guest on the podcast led by investor Patrick O’Shaughnessy, Invest Like The Best.

While outlining his vision for the future of cryptocurrencies, Brian Armstrong stated that a common grievance of many new companies is the abundance of regulatory and funding impediments faced by crypto startups. As a relatively new phenomenon, not all countries and markets have gotten around to drafting proper legislation, often sparking confusion.

 Although Coinbase has invested in over 60 crypto startups through Coinbase Ventures, Brian Armstrong is of the opinion that the loopholes and nuances in current cryptocurrency legislation often discourage new talent with new ideas – A problem he is aiming to fix with this new platform.

“There’s a lot of really talented teams trying to build companies this way now, but a lot of the regulatory environment is still unclear for them about, ‘Is this a security? What kind of securities regulations might you trip up if you do these’ And so, there’s all these kind of different exemptions and stuff that people are trying to jump through hoops to try to make [it] work.”

Coinbase Launch, Coming Soon

The new Coinbase platform designed to help entrepreneurs join in on the action will be called Coinbase Launch – although the name may change in the future. Coinbase Launch will assist new companies with processes, the creation of smart contracts, token offerings, legislative suggestions, and so on and so forth.

Once launched, the new platform could potentially lead to exponential growth in the adoption of cryptocurrencies. Now armed with the knowledge and resources to put their plans into action, we may soon be seeing an avalanche of startups taking opportunity of Coinbase’s expertise and reputation to change the world.

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Bitcoin Crypto News Cryptocurrency Law

Self-Proclaimed Aussie Bitcoin Inventor Craig Wright Files Libel Suit Against Roger Ver — Again

Early blockchain developer and self-professed Bitcoin creator Craig Wright has unleashed a series of defamation suits against notable blockchain and cryptocurrency thought leaders, including a new libel suit against Bitcoin.com CEO Roger Ver.

Wright’s latest defamation suit spree follows a 2019 effort in which the self-proclaimed inventor of Bitcoin filed an unsuccessful defamation suit against Ver in May 2019. The latest defamation suit, filed on August 25, has been filed with the High Court of Antigua and Barbuda.

Official defamation claim documents published by Coingeek indicate that Wright is pursuing legal action against Ver based on allegations made by Ver that Wright is not Satoshi Nakamoto, the pseudonymous creator of Bitcoin. The filing specifically refers to a 2019 video published by Ver, which included specific statements that Wright is not the true creator of the Bitcoin network:

“Craig Wright is a liar and a fraud. So sue me. Again.”

The filing also includes several other publications and references made by Ver directed at Wright, including “Faketosh, claiming to be Satoshi Nakamoto when you are not. Craig Wright is a cockwombling bunglec*nt Faketoshi”

Defamation Suit Filed in Antigua and Barbuda

Wright’s defamation claim is focused on obtaining an injunction that will prevent Ver from publishing or publicly stating similarly defamatory allegations via various social media platforms in addition to aggravated damages and costs.

Previous defamation suits served to Ver by Wright have been filed in the High Court of England and Wales, which focused on YouTube videos posted by Wright in May 2019. The High Court of England dismissed the claim in July 2019, stating that the suit does not fall in the jurisdiction of the UK.

Wright’s new suit is filed in Antigua and Barbuda — both Wright and Ver are citizens of the West Indies sovereign state, potentially providing Wright with an advantage in pursuing his defamation claim.

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Australia Crypto News Cryptocurrency Law

Horse Racing Group Investigated Over Possible Crypto Scam

Aussie horse racing authorities are looking into allegations that a top thoroughbred operation may have been involved in a worldwide money-laundering scheme linked to sham cryptocurrency venture OneCoin.

Phoenix Thoroughbreds, the co-owner of Australian group 1 winner Farnan was banned from racing in France less than a month ago after allegations in a court case taking place in New York.

Witnesses have accused the owner, Amer Abdulaziz Salman, of embezzling $161 million through the OneCoin cryptocurrency scheme.

A massive scam involving a non-blockchain based cryptocurrency, OneCoin, has put a $7.2 billion hole in the pockets of investors in Australia, Europe, and Africa. Investors who bought OneCoin tokens after being told their value would increase had an unpleasant surprise when they realized they could not exchange these tokens to fiat or any other cryptocurrency.

One Australian citizen, Harry Testoni, explained how the scam works.

“They were manipulating everything, and said, ‘it was worth this and that’ and then when you try to withdraw money they say, ‘you can’t draw money out of it’. It was dead money. Gone. Finished.”

Horses may have been bought using embezzled funds

Australian authorities suspect that up to $25 million of the laundered money was used to buy prize racehorses that compete on the Australian circuit through Phoenix Thoroughbreds.

Greg Nichols, the chairman of Racing Australia stated that they were in talks with legal authorities both domestic and foreign. Amid fears that the allegations could compromise public confidence in the sport, a decision is still pending.

“The obvious place for these allegations to be considered is within the legal system but it doesn’t preclude us from making our own observations and coming to our own conclusions beforehand,” Greg Nichols said in a statement this Saturday.

If convicted, Phoenix Thoroughbreds’ Dubai-based owner Amer Abdulaziz Salman could face serious penalties, including the suspension of his company from competing in Racing Australia.

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Australia Cryptocurrency Law Ripple

Ripple Forced to Rebrand over Aussie PayID Litigation

An ongoing court case between New Payments Platform Australia and Global digital asset platform Ripple (XRP) has resulted in a forced Ripple rebrand in Australia, with courts delivering an injunction that will bring an end to Ripple’s plans to launch a “PayID” product in the country.

First reported on August 27, litigation brought forward by Australia-wide industry payment platform NPPA focused on a dispute between the New Payments Platform and Ripple over the use of the “PayID” brand in Australia.

NPPA already possesses a trademark in Australia for PayID, — Ripples new “PayID” system, launched in June 2020, operates a service in direct competition with NPPA. The NPPA’s PayID solution was launched in February 2018.

In litigation filing, NPPA claimed that Ripple’s new payment platform could negatively impact Australian consumers:

“The aim of this action is to protect Australian consumers and businesses from potential losses or scams that could arise as a result of confusion created from a payments service using the same name”

NPPA Hits Out at False Association With Ripple

NPPA also claimed within filing that Ripple was actively engaging in misleading and deceptive conduct, in breach of both the Australian Security and Investments Act and Australian Consumer Law. Notably, solicitors working with NPPA argued that Ripple had partnered with BTC Markets, Independent Reserve, and FlashFX — three Australian companies that, according to Ripple, mistakenly believed there was an association between NPPA and Ripple.

“There is evidence that each of these companies incorrectly believed there was an association between services offered by NPPA under the PayID trade mark and those offered by Ripple in using the PayID trade mark, when there is no such association”

A preliminary judgment granting leave to NPPA to pursue litigation has resulted in a forced rebrand of the Ripple product. Neil Murray SC, Council for Ripple, confirmed that the platform will pivot its brand direction:

“(Ripple’s) intention, again, without admissions, is to re-brand. Now the scope and timing of that is under consideration but it is … some priority. The hope is that this dispute will be resolved without too much contest in due course”

Ripple Forced to Rebrand

An interlocutory hearing on Friday 28th August confirms that Ripple pursued acceptance of an undertaking to rebrand PayID — NPPA refused the undertaking, seeking an injunction to restrict Ripple from offering services using the PayID brand. The court accepted the request for an injunction, ordering Ripple to cease the use of the PayID brand. 

Market response to the court case saw XRP/USD fall 4 percent on Thursday 27th August, recapturing 2 percent as part of a larger market spike. 

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Cryptocurrencies Cryptocurrency Law Scams

Australian Federal Police Loot Cryptocurrency, Homes, Luxury Goods from Gangsters

The Australian Federal Police has executed a series of initiatives designed to decentralize organized crime syndicates away from ill-gotten goods, confiscating cryptocurrency hoards, designer goods, luxury cars, and homes in a new policing effort.

The latest AFP campaign against criminal syndicates has seen Federal Officers confiscate designer handbags and other luxury assets from the wives and girlfriends of criminals, along with significant cryptocurrency holdings. 

In statements released to Australian news media, AFP Criminal Assets Confiscation national manager Stefan Jerga announced that the AFP is actively targeting all forms of currency possessed by criminals, along with goods, vehicles, and real estate. 

“We come after all their assets. Whether it be the roof over their heads, their modes of transport and recreational toys, moneys in their possession or bank accounts, or the watches, bags and shoes they parade, we target it all,”

Elaborating on the focus of the confiscation program, Jerga specified that the efforts of the AFP are designed to disrupt organized criminal activity, causing maximum damage to the criminal environment. 

AFP Captures Hundreds of Millions in Criminal Assets

To date, the AFP-led Criminal Assets Confiscation Taskforce has confiscated and restrained over $250 million in criminal assets both in Australia and abroad. Confiscated assets include real estate, luxury vehicles and watercraft, high end jewellery such as diamond-encrusted luxury watches, and cryptocurrency.

Seized cryptocurrency amounts to a significant store of capital for the Australian Federal Police. 

In January 2018, for example, members of the Criminal Assets Confiscation Taskforce and Criminal Assets Litigation teams in Brisbane successfully restrained the Bitcoin of a suspect under the Proceeds of Crime Act 2002 (Cth) — seizing the cryptocurrency assets of an arrested individual that were, at the time, worth $7300.

By November, 2018, the individual in possession of the Bitcoin agreed to forfeit the Bitcoin holdings. The interim price rise in the value of the asset saw the cryptocurrency hoard increase in value to approximately $154,000.

More recently, a December 2019 drug bust led Australian Federal Police Officers to a record cryptocurrency seizure,  with police forces capturing “millions of dollars” worth of physical property and over $1.5 million dollars worth of cryptocurrency.