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#IntlRoundup: The FBI Is Asking Questions About Bitconnect

#IntlRoundup: The FBI Is Asking Questions About Bitconnect

As part of our regular weekly roundup, Coinsquare News covered the week’s significant international cryptocurrency and blockchain headlines. In this edition, we look at three separate stories originating from the U.S., Germany, and Belgium.  

The FBI wants to get in contact with Bitconnect victims

The Bitconnect scandal still remains fresh in the minds of many investors. While claiming to operate as a cryptocurrency lending platform, many experts called out Bitconnect as being more akin to a ponzi scheme.

The platform shut down the majority of its service last year following scrutiny and multiple cease and desist orders from regulators. Now, it appears that the Federal Bureau of Investigation could be exploring possible action against the platform as well.

In a release published this week, the FBI announced that it is seeking to connect with potential victims of Bitconnect’s less-than-earnest practices.

“For a majority of [Bitconnect Coin’s] existence, the only place to purchase, trade, or sell the cryptocurrency was through the proprietary exchange hosted by Bitconnect,” the statement read. “By mid-December 2017, BCC boasted a market cap of over $2.5 billion. Bitconnect guaranteed investors up to a 10 percent total return per month on their investment…”

Here, the FBI referred to the return on investment that was promised to users of Bitconnect’s lending platform. This promise being “too good to be true” was also one of the main issues brought up in a class action suit that was filed against the platform in early 2018.

The FBI is inviting those affected by Bitconnect to take part in an optional survey. It says this survey could help identify victims and assist with a federal assessment of the issue.

German financial regulator intervened in crypto market for the “first time”

According to a report from Reuters this week, German financial regulators took action to prevent the launch of an Initial Coin Offering (ICO) that would have taken place in late 2018.

The Federal Financial Supervisory Authority (BaFin) is Germany’s financial regulatory authority. As the report claims, this marks the first time that BaFin intervened to stop the launch of an ICO.

Reportedly, this ICO intended to raise as much as 120 million euros (nearly $180 million CAD as of press time).

While this is by no means an indication that Germany will take harsh action against the cryptocurrency landscape, Reuters’ source did call the move a “paradigm shift.” Previously, BaFin warned consumers about risks associated with ICOs, but did not take action.

Back in late 2017, the regulator published a consumer warning detailing the risks of ICOs, such as price fluctuations, untested business models, and the lack of legal requirements and transparency rules.

Belgium teams up with UK auction company to sell seized Bitcoin

In what the firm called a “world first by a private auction company,” Wilsons Auctions announced this week that it plans to auction seized Bitcoin. The news was published on the company’s website on Monday.

The company, which is based in Northern Ireland, said this auction is the result of a contract that it was awarded by Belgium’s Federal Government.

Included in the auction is 315 digital coins, which are made up of equal parts Bitcoin, Bitcoin Gold, and Bitcoin Cash. Reportedly, these digital assets were seized by police in Belgium following arrests related to drug trafficking. The auction will take place over a 24-hour period beginning on Thursday of next week.

“We are thrilled to be awarded this first of its kind contract with the Belgium Federal Government to sell seized cryptocurrency, allowing us to open up the opportunity of investing to new buyers,” said Wilsons Auctions’ head of asset recovery, Aidan Larkin.

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