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Loopholes Emerge Amid the Intricacies of the UK’s Crypto Gaming Restrictions

Posted on February 2, 2024February 1, 2024 by Laura P.

Sky News has recently uncovered a vibrant underground world in the UK’s crypto community, as enthusiasts find loopholes to navigate the complex crypto casino bans. With pre-verified accounts from renowned cryptocurrency havens, like the ethereal Stake.com, people in this underground world can effortlessly immerse themselves in the action of unregulated gambling.

In the face of tightening regulations on cryptocurrency casinos in the UK, clever gamblers there are quietly rising and coming up with new ways to gamble online for big money while disregarding the rules and regulations. A shadowy web has formed, fueled by popular personalities and celebrities, that looks like an underground society where pre-verified accounts are auctioned off as valuable relics.

With the help of open-source technologies, daring gamblers can work around the intricate crypto terrain. When new accounts are created, platforms insist on seeing visual proof as part of their unwavering dedication to regulatory compliance. However, for as little as 8 pounds, buyers often succumb to the allure of pre-verified accounts, which allow them to elegantly avoid these legal obstacles.

Shared on various social media sites, these digital gems reveal orchestrators running complex operations with specialized sales teams and mysterious “middlemen” that covertly arrange safe transactions in exchange for a small cut of the crypto goodies.

Echoes of Concern

Over months, Sky News delved into the mystery behind cryptocurrency gambling and uncovered the significance of Stake.com accounts. A Discord server had over a hundred Stake.com accounts, while Facebook was filled with promotions for nearly two hundred. Crucially, a shroud of mystery envelops these revelations, as there is no evidence implicating the casinos in these covert activities, leaving room for speculation and intrigue.

Regulated casino watchdogs are stepping up their efforts to prevent fraud, but the possibility of player funds getting into the wrong hands is a growing concern. Proponents of strict gambling laws in the UK bring out the issue of addiction, which is made worse by the fact that these crypto gambling havens do not use any restrictions on betting or time.

A heated discussion looms over the UK’s crypto sector as the discrete examination takes shape, with cryptocurrency casinos and social media platforms balancing in a show of accountability. There is a hint of a forthcoming transformation in the world of crypto and the UK might just be at the forefront considering how hard the issues of regulation and consumer safety are knocking on their doors. Perhaps it will be part of what shapes the crypto gambling landscape in 2024.

Strong Start for Potential Tighter Crypto Regulation in 2024

Posted on January 2, 2024December 31, 2023 by Laura P.

Many people are likely to be optimistic about the future of the cryptocurrency sector because of the verdicts of the previous year, the possibility of the approval of a spot bitcoin exchange-traded fund, and the overall rise in the market. Nevertheless, it is very improbable that lawmakers and regulators will allocate fewer resources to crypto-related complications too.

This is already playing out, especially in the realm of online gambling and crypto derivatives.

Taiwan’s Elections

The presidential elections in Taiwan will take place on January 13, 2024, and the government has issued a caution against using bitcoin betting sites to speculate on the results. Many locals in Taiwan have been reportedly betting on the next presidential election on the decentralized website Polymarket. Several people have already been called in for questioning, according to reports, which suggest that the investigation is still underway.

It is against the law to engage in gambling activities associated with Taiwanese elections, since it might be a violation of Article 88-1 of the Election and Recall Act. Such an infraction entails a punishment of up to 100,000 New Taiwan dollars (about $3,188) or six months in jail or detention.

An Ongoing Concern

Taiwan’s elections are not the first time that the operator has found itself in the spotlight. Polymarket, in a related matter, ran into regulatory obstacles in the United States in 2022.

The platform was subject to legal action in January 2022 by the Commodity Futures Trading Commission (CFTC), a New York-based regulatory agency. Platform operators faced allegations from the CFTC that they ran an “illegal unregistered or non-designated facility” from June 2020 forward.

Despite these regulatory hurdles, Polymarket had robust trading activity throughout the 2020 US election, with a new volume record-breaking $10 million.

What Now?

The cryptocurrency sector is looking forward to a busy and promising year ahead. Market players often face the significant challenge of regulatory compliance when navigating the crypto derivatives landscape, since laws differ greatly by jurisdiction. Can this change?

We may anticipate the SEC to approve its first batch of spot bitcoin ETFs shortly after the new year of 2024, which would encourage large institutional investors to pour millions into the cryptocurrency market. This means word of the approvals might potentially pique the public’s interest in virtual tokens, bringing them out of the financial shadows and into the spotlight. Similarly, in late 2024, the European Union’s (EU) crypto regulatory framework, MiCA, will also eventually be put into action.

The Wikimedia Community to Stop Accepting Crypto Donations

Posted on May 2, 2022 by Laura P.

Following a three-month debate in which the environmental effect of bitcoin and other digital currencies was a significant discussion topic, Wikimedia, the non-profit foundation behind Wikipedia, has decided to cease accepting crypto payments and donations.

Accepting donations in digital currencies including popular options like BTC and ETH signals the endorsement of digital coins and a clear push for more mainstream adoption. These also have a reputation for being “inherently predatory” as investments. As such, they do not align with the Wikimedia Foundation’s commitment to environmental sustainability, according to a proposal from contributor Molly White.

Crypto miners have been accused of polluting the environment by utilizing massive quantities of computer power to confirm transactions. Molly White included this in the proposal. The foundation singled out BTC and ETH for their high energy requirements, while also pointing out that there are alternative “greener” cryptocurrencies. However, these are less extensively used even for payments or donations to the foundation.

The decision was reached via a vote. Nearly three-quarters of the fewer than 400 people who voted, leaned in favor of no longer accepting BTC. This is definitely a big deal for the crypto community as proponents have been working hard to increase adoption. However, all hope is not lost it seems. Wikimedia has kept the possibility of restarting crypto acceptance on the table. For now, it will continue to watch the situation.

Can crypto go green?

The energy consumed by computers to issue new digital tokens via a process known as “proof of work” accounts for a large part of crypto’s environmental effect. That is simply because it requires a lot of computing power. According to some estimations, the server farms that compete to produce new Bitcoins consume as much power as a small nation every year.

A greener crypto future most likely implies a more regulated one. Two types of legislative measures for crypto regulation are possible. The first kind would need greater openness on the carbon costs of operating a cryptocurrency mining farm. The second would involve regulators imposing some form of carbon tax. Already, these kinds of rules are being pushed by some notable environmental and economic justice organizations.

Other options such as the adoption of renewable energy at the mining farms have also been fronted. Still, we cannot dismiss the fact that crypto is growing at an incredibly fast pace and government regulatory measures often take time to create and implement. It will very certainly fall to the industry to embrace sustainability with the same zeal that it has innovated.

Binance On the Spotlight Over Ties to Betting App in India

Posted on August 2, 2021August 2, 2021 by Martin S.

Both crypto and betting have been enjoying massive popularity all around the world. The situation is, however, not as rosy in India. The country has been known for its rather strong stance against gambling and the burgeoning digital currency and blockchain ecosystem. Its government has been trying hard to regulate these sectors. The latest casualty of these efforts is Binance, one of the world’s most popular crypto exchanges and brands.

Recently, the Enforcement Directorate, India’s anti-money laundering agency, began a probe into Binance Holdings Limited. The investigation is meant to ascertain whether the crypto exchange had something to do with betting apps. Its executives are currently being investigated.

No official communication is available on the matter. The Enforcement Directory has not commented and representatives from Binance have denied receiving any summons.

“We have always been a proactive player in fighting crime. We comply with regulator requests all around the world and we don’t comment on any specific engagements.”
Binance’s Spokesperson.

However, sources close to the matter have shared differing information that points to some messy issues. It will certainly take a bit of time before any of these matters get settled. It is thus bound to reach the public domain soon.

What Caused the Problem?

Blockchain, digital currencies, and the businesses related to them are no stranger to controversy. Binance is no exception. The company was incorporated in the Cayman Islands and has no corporate headquarters. This raised some eyebrows and the exchange has been facing scrutiny. Many countries including India have concerns that digital currencies can potentially be used to facilitate money-laundering, drug trade, and even terrorism.

Binance’s woes in India may have emanated from its involvement with betting apps which are also still facing some troubles themselves. The operators of said betting apps used wallets with WazirX to buy, convert and transfer funds on Binance. There should be a straightforward way of dealing with this but that is, unfortunately, not the case.

As it turns out, Binance failed to take responsibility by collecting the necessary know-your-customer documents from clients in most of the transactions. In addition to that, the crypto exchange also reportedly failed to collect information as required by the Finance Action Task Force (FATF), the global anti-money laundering watchdog.

Now, this may blow over without too many implications. Still, it represents a clear need for further action concerning the regulatory framework. India in particular has a long way to go when it comes to warming up to crypto and betting.

Cryptocurrency Exchanges Lost More Than $1.5 Billion in 2018

Posted on February 2, 2019February 1, 2019 by Martin S.

2018 was indeed a monumental period for the cryptocurrency community primarily because of the various highs and lows of the industry as well as the many innovations that we got to see. Some of the most notable occurrences were the loss of funds by a number of exchanges all over the world. It was hard to keep track of the amounts but now, thanks to a Q4 cryptocurrency Anti-Money Laundering report that was published by CipherTrace, a blockchain intelligence agency, it has been revealed that criminals stole a whopping $1.7 billion of cryptocurrency last year. The company further pointed out that cryptocurrency theft is still on the rise despite the freefalling prices of cryptocurrencies as well as the savage bear market that the sector has been subject to.

Of the $1.7 billion that was stolen from the crypto exchanges and wallet providers, $950 million went to hackers. This was 3.6 times more than what was recorded in 2017 which further shows there is one increase in theft despite market drops – the price of bitcoin, for instance, has dropped in value by almost 80 percent. Obviously, this is a very worrying statistic especially for an industry that is trying very hard to achieve mainstream adoption.

The Reasons

As it turns out, many of the existing exchanges have been in operation for no more than two years and most of them do not have sufficient safeguards in place to prevent hackers from stealing their funds. The lack of these safeguards makes it possible for hackers to obtain simple files of cryptographic private keys and each can be worth anywhere between $30 million and $500 million. While this is the case with most companies, it is also worth noting that not all crypto-related businesses are not immature in terms of funding, implementation, and training – the tools and methods used by hackers are also becoming more and more sophisticated which means that even established companies that are considered to have better safeguards can lose funds or data due to hacks.

At least $725 million of the stolen crypto funds came from “inside jobs” which included exit scams, fraudulent Initial Coin Offerings (ICOs) and Ponzi Schemes.

Proposed Solutions

According to Dave Jevans, the CEO of CipherTrace and co-chair of the Cryptocurrency Working Group at the APWG.org, the cryptocurrency sector needs to implement huge improvement to their infrastructure and increasing education in order to prevent such kinds of attacks. Such measures could involve the use of robust anti-phishing measures, cold storages as well as data sharing and behavioral analytics. Fortunately, thanks to the global wave of regulations that will be going into effect anytime this year, laundering of digital currencies by hackers and criminals will be much harder to do. Hopefully, it gets better from there.

More Institutional Investors to Venture into Crypto in 2019

Posted on January 2, 2019January 1, 2019 by Laura P.

The price of a number of cryptocurrencies including bitcoin, which is considered to be the mother of all cryptocurrencies, took big hits in 2018 amid the prolonged Crypto Winter. Even though there is no guarantee that it cannot get any worse than it did in the just concluded year, many investment analysts and financial market experts are expecting the volatility to subside significantly this year largely due to the entry of institutional investors. In fact, according to a report the Australian Financial Review some analysts even believe that bitcoin may make a comeback that will be fueled by the momentum created by institutional investors.

Over the summer of 2018, Wall Street was stunned by the news that some multi-billion-dollar endowments of Harvard, Yale and Stanford had decided to invest in digital currencies. Analysts believe that due to the herd mentality of most institutions, the move is likely to trigger a chain reaction of sorts among other institutional investors like pension funds. This influx of institutional investors was expected to pick up in a major way in late 2018 but the harsh bear market that affected nearly all digital currencies stalled most of the efforts – a number of the institutions were reportedly scared off by the protracted downturn of the crypto market which is an understandable move especially for organizations operating within that particular space.

Financial analysts have projected that, as Wall Street appears to be poised to even more turbulence in 2019, organizations may begin to consider crypto assets even more seriously – these assets are not buoyed since they have no correlation to the regular stock market and this makes a pretty good investment, especially during volatile periods.

Will Crypto Finally be Legitimized?

Well, many observers believe that, as it stands, mainstream adoption hinges on regulatory clarity to help legitimize the market. Regulation is already a big deal and has been defined by the move by US lawmakers in December 2018 to propose legislation that was designed to prevent bitcoin price manipulation and position the United States as a market leader in the crypto space. The US is being encouraged not to ignore the “profound potential” of crypto to bolster the country’s economy and this might just be what is needed to have digital currencies legitimized. The industry is putting a lot of effort into advancing the agenda of mainstream adoption of crypto most by greasing the wheels of Congress.

Unfortunately, there are some setbacks that may still impede the growth of the sector and one of the most serious ones is the scalability. As it stands, most platforms would need about a year to figure out concrete solutions to scaling, but until then let’s hope that the Lightning Network grows further and, hopefully, achieves its full potential.

UK Lawmaker Proposes Tax & Utility Bill Payments in Bitcoin

Posted on December 12, 2018December 12, 2018 by Martin S.

Eddie Hughes, a Conservative UK Member of Parliament is calling for local authorities in the country to take the lead and begin accepting tax and utility bill payments in bitcoin. According to the politician, bitcoin and the underlying blockchain technology both have great potential but the lack of reliable or adequate information and knowledge in this regard is one of the things that is preventing wider adoption.

“You’re either ahead of the curve or you’re behind the curve,” he said in a recent interview.

In the interview with the Daily Express, the lawmaker pointed out that the country is in a very interesting position especially because it hopes to be seen as a progressive nation. While the United Kingdom is still at crossroads, the decision to adopt the use of cryptocurrencies could prove to be very beneficial in the near future. If this is to happen, people will first have to understand how the transactions work and see how accessible the technology can be – ideally, the technology needs to appear like an app that can be used to make fast, safe and secure payments.

Being that the technology is talked about a lot in, the member of parliament feels that all the other lawmakers have a duty to understand it, something that will then enable them to make more informed decisions pertaining to the technology. Hughes further cited the Royal National Lifeboat Institution which is currently accepting charitable donations through cryptocurrency – this particular use case proves that bitcoin and other digital currencies can be used for many other services as well.

“The state should focus its attention on using blockchain to enable social freedom, to increase efficiency, and to rebuild societal trust,” Hughes stated.

This is, however, not the first time that Hughes has publicly supported cryptocurrencies and blockchain technology. Back in July, he wrote a report that called for the state to appoint a ‘Chief Blockchain Officer.’

Is This Possible?

Accepting taxes and utility bills in crypto would definitely be a good start for the crypto community and the country. However, regulators in Europe have been very skeptical about cryptocurrencies especially because digital currencies are very volatile and risky and are often associated with such vices as terrorism, fraud and money laundering. These European regulator’s alarmist entreaties have mounted quite a lot of pressure on the government of various European countries to implement some very stringent regulations that are supposedly meant to protect the public and investors while at the same time preventing the risk of financial instability.

As it stands, the future of crypto in the UK is even more uncertain thanks to a revelation by the country’s Finance Conduct Authority that it is considering banning crypto-linked derivative products. All these will be looked into in the first quarter of 2019.

Bitcoin’s Price Dwindles as Its Dominance Increases

Posted on November 28, 2018November 27, 2018 by Martin S.

Bitcoin has been on a steep downward trend for the past few weeks. In general, the market has not been very stable with a number of people hoping that it the market will stabilize very soon and bitcoin can regain even a little of the value that it lost in the past month. Both bitcoin and Ethereum, the two most popular cryptocurrencies have had their prices drop by over 40 percent particular because of the rapidly increasing sell pressure and the declining buy pressure. As a result, the crypto market has been struggling to sustain some sort of momentum in a bid to reverse the downward trend but, of course, it might be a while before this happens.

To put this into perspective, when the price of an asset falls significantly without any significant spike in volume, it is representative of a free fall albeit without much sell pressure. This implies that as big sell volumes continue to hit the market, the price of the said asset will be at the mercy of additional sell-offs in the future.

This Is Not the End

Even though bitcoin has undoubtedly had quite a month, it did not take nearly as much a hit as many other digital currencies. In fact, in November, bitcoin’s share of the total cryptocurrency capitalization or rather its dominance saw a notable increase. Over the course of the month, bitcoin’s dominance has spiked from lows of 51 percent in early November to the prevailing 53 percent, something that goes further to prove the digital currency’s appeal to both miners and investors.

Despite the fact that there have been lots of talk about the demise of bitcoin, especially over past two weeks, it is worth noting that the cryptocurrency’s price is still more than what it was last year in the summer. Furthermore, bitcoin has been building quite a loyal customer base over the past decade and there is still a growing appetite for crypto all over the world.

Institutional Investors Are Still Hopeful

It is not only individuals within the crypto community that are still confident about bitcoin. The traditional financial services industry and a number of institutional investors including New York exchange operator, Nasdaq, are still pursuing ventures involving the digital currency. According to Bloomberg, the company on November 27 announced that it is moving forward with its plan to list bitcoin features, a market that it hopes to officially launch in with the first quarter of 2019.

Sources close to the matter have also revealed that the New York exchange has been working closely with the Commodities and Futures Trading Commission (CFTC) to receive regulatory approval for its plans to operate as a compliant bitcoin futures market service provider. There is a huge window for success but knowing how shaky the crypto market can get, it remains to be seen just how far these projects will go.

Swiss Regulator Imposes 800% Risk Coverage on Crypto Trading

Posted on November 7, 2018November 6, 2018 by Laura P.

The Swiss Financial Market Supervisory Authority, otherwise known as FINMA, has instructed Swiss banks that are dealing in crypto assets to apply an 800 percent risk weighting the market value of said assets when “calculating loss-absorbing capital buffers. The news of this was delivered in a confidential letter that the regulator recently sent to swissinfo.ch.

What It Means

As per the terms of the regulator’s new requirements, securities dealers and banks will be required to assign a flat risk weight of 800 percent – which will be used to cover both market and credit risks – against digital assets. Therefore, considering bitcoin’s current value or price ($6,000), the banking institutions would be required to value each of the coins on their books at $48,000 when making decisions regarding adequate levels of buffer. This is regardless of whether the positions are held in a trading or banking book.

Even though FINMA has openly allowed banks in the country to trade bitcoin and other crypto assets, the regulator has not made any effort to integrate cryptocurrencies into the country’s liquidity ratios or Base III capital requirements. Risk weightings are a measure of an asset’s volatility as well as their potential to compromise the capital base of any given bank. Naturally, a higher risk weighting is largely an indication of skepticism – the higher the risk weighting, the lesser amount of the asset that a bank should hold.

“FINMA has recently received an increasing number of enquiries from banks and securities dealers holding positions in crypto assets and are subject to capital adequacy requirements, risk distribution regulations and regulations for the calculation of short-term liquidity ratios,” the letter, dated October 15, reads.

This move is an indication that FINMA is clearly still very skeptical of digital currencies despite the fact that some of them have steadily stabilized over the past year. Bitcoin, for instance, has been priced at around $6,000 over the past few months.

Not So Surprising Positive Reactions

It is undeniable that the asset class is extremely volatile but there is a lot of great signs with more and more banks all over the world offering crypto related products. Switzerland happens to be one of the few places where banks and trading products have been in business for quite a while. SEBA Bank, one of the Swiss banks that is hoping to win a license to operate full banking services to bridge fiat currencies and crypto.

“It’s encouraging to see banks no longer turning down the increasing number of client requests for crypto services but asking for guidance and providing their input along the way,” the Bitcoin Association of Switzerland stated. “This is the Swiss financial center’s first step towards moving into the next decade where assets are no longer held in single, central custody but instead are held on the blockchain.”

FINMA’s new regulations are certainly going to present a new set of hurdles for banks hoping to offer crypto trading services but with such positive reactions, something good may eventually come of it.

UK Regulator Considering Ban on Sale of Crypto Derivatives

Posted on October 31, 2018October 30, 2018 by Martin S.

On October 29, the United Kingdom’s Cryptoassets Taskforce released a report that detailed its proposal for changes to some of the crypto regulation and raised a number of concerns over the way digital currencies and associated assets are used and traded. The taskforce which was launched earlier this year in March comprises the Financial Conduct Authority (FCA) and the Bank of England (BOE) was tasked with regulating and supporting cryptocurrency-related technologies.

Due to the lack of a widely accepted definition of crypto assets as well the variations in the value and rights that they bestow their holders with, the task force developed a framework that classifies crypto assets into three categories – that is, crypto assets for investment, for use as a means of exchange and for supporting capital raising and the development of decentralized networks through ICOs.

The report explained that, due to their extremely high volatility, failure in use as a unit of account and poor acceptance, crypto assets that are meant to be used as a means of exchange cannot be considered to money or currency. On the other hand, if the crypto assets are used as an investment they would reportedly have the potential to widen access to new investment ventures. However, the report went on to acknowledge that at the current market state, these cryptocurrency assets also have the potential to expose users to varying degrees of risks including illicit or criminal activities.

As for the so-called Initial Coin Offerings (ICOs) the report stated they are very promising ventures especially because most of them present several opportunities that would be great for supporting innovation and competition, addressing certain financing gaps, improving efficiency as well as the creation of a new investor and customer base.

The FCA To Act

With all these in mind, the Financial Conduct Authority (FCA) is reportedly mulling over a potential ban on the sale of crypto derivatives specifically because it believes that digital currencies hold no intrinsic value.

“Given concerns identified around consumer protection and market integrity in these markets, the FCA will consult on a prohibition of the sale to retail consumers of all derivatives referencing exchange tokens such as Bitcoin (BTC), including CFDs, futures, options and transferable securities. The proposed prohibition would not cover derivatives referencing crypto assets that qualify as securities, however CFDs on securities would remain subject to [the European Security and Market Authority’s] temporary restrictions and any future FCA proposals to implement permanent measures in relation to CFDs,” a statement by the FCA reads.

The regulator is also reportedly expecting to launch a wide consultation into whether or not the ban will be a good idea within the first quarter of 2019. Hopefully, the United Kingdom will not go the “Indian route” by completely banning crypt, a move that would be quite devastating considering how deep-rooted digital assets are in the region.

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