- Months after hosting its first cryptocurrency convention, North Korea is planning to create its own Bitcoin-esque token. The United Nations is concerned that this could be used to bypass sanctions and raise money illegally.
- Ethereum’s having a great week, seeing a 12% rise in value. For the month of September, it’s up over 18%, and Ether token holders are breathing a sigh of relief after a rocky August.
- Two men attempted to extort capital and crypto from a Seattle-based startup before being apprehended by New York authorities and the FBI. Both had been hired by the company before turning around and threatening its CEO with sabotage.
- Wells Fargo is testing its own internal blockchain-based cryptocurrency, hoping it will make it easier and faster to move cash across borders.
In an effort to avoid sanctions and work around the global financial system, North Korea is reportedly developing its own form of cryptocurrency. According to a North Korean official, the as-yet-unnamed token will be “more like bitcoin or other cryptocurrencies,” rather than a digitalization of the North Korean won.
Pyongyang, the capital of North Korea, recently hosted its first cryptocurrency and blockchain conference, and has shown increased interest in decentralized digital currencies this year. By using their own currency, rather than adopting an existing token like Bitcoin, North Korea would be able to control how it works and who has access to it.
Given that North Korea has previously used state-sponsored hackers and cryptocurrency to raise cash illegally, there’s reason to be concerned. In a 2018 investigation, the U.N. reported that North Korea could use a digital currency platform “to generate money for the regime and as a potential means of evading sanctions on shipping by creating a new method of obscuring the ownership of a vessel.”
North Korea’s Embassy to the U.N. in New York would neither confirm nor deny Cao de Benos’s claim. “I am not in a position to give you an answer,” an embassy spokesperson said before hanging up.
But close watchers of the regime’s use of cryptocurrencies told VICE News that North Korea already has the expertise needed to build and deploy its own cryptocurrency that could help the North Koreans avoid sanctions.
“North Korea has shown extensive interest in cryptocurrency, showing expertise in mining, hacking exchanges,
cryptojacking, and more,” Kayla Izenman, a research analyst at London-based think tank the Royal United Services Institute, told VICE News. “There is absolutely no doubt that they have the technical expertise to develop and utilize almost any iteration of cryptocurrency, whether that means laundering a previously-established coin such as Bitcoin through foreign unregulated exchanges or creating a nationalized cryptocurrency for themselves.”
After a rocky August that saw Ethereum prices plummeting, the token is well on its way to recovery. Its value has been steadily rising since September 6, and the last week
While Ether is having a particularly good month, its recent recovery is part of a larger market trend. Bitcoin value has been hovering around $10,000 for weeks, showing remarkable growth after a 2018 crash. Tokens Cosmos (ATOM), Tezos (XTZ), and TRON (TRX) are also performing well, and join Ethereum on the list of coins that have gone up at least 5% in a 24-hour period this month.
Besides its incredible price growth, Ethereum has also been growing in other areas—one of which is daily transaction fee revenue. Since around June 2019, the Ethereum network has been gradually catching up to Bitcoin (BTC) in this area.
According to Coin Metrics, Ethereum recently hit $182,899 in daily transaction fees, which is just shy of the $185,993 achieved by the Bitcoin network. This is notable because back in 2017, Bitcoin usually had around 10-25x higher fees than Ethereum, showing that Ethereum has gained significant ground in the past two years.
Working with the FBI, authorities in New York have charged two men with extortion of a cryptocurrency startup. The extortionists, Steven Nerayoff and Michael Hlady, were both hired by the Seattle-based startup before turning on it and demanding millions in capital and coins. Authorities say they threatened to sabotage the company if their demands were not met.
U.S. Attorney Richard P. Donoghue characterized the plot as an “old-fashioned takedown,” although unlike more traditional schemes, this one was to be paid out in cryptocurrency. Donoghue further stated that the U.S. Attorney’s Office is dedicated to protecting American businesses from extortion, whether the currency being extorted is traditional currency or digital tokens.
FBI Assistant Director-in-Charge William Sweeney said that this is a classic, age-old extortion scheme with a
modern daytwist, adding:
“Imposing forceful demands on a company for personal gain is risky business, whether one’s preference is to be paid off with cryptocurrency or cold hard cash. The FBI will continue to seek justice for victims who businesses have been targeted by these types of scams.”
Given that cryptocurrency was designed in part to avoid the centralized currency systems upheld by traditional financial institutions, it’s a little strange to see banks rolling out their own tokens. But that’s exactly what American financial services giant Wells Fargo is considering with a test run of its own form of crypto.
Called Wells Fargo Digital Cash, the digital currency will be powered by blockchain technology and tied to the U.S. dollar. It was designed to make it easier to “move cash across borders and between branches in real time.” Wells Fargo’s internal ledger will be used to keep track of payments, saving money and time while bypassing third-party companies. As head of the Innovation Group Lisa Frazier put it, “We are eliminating the intermediaries which can often extend the timeline to be able to do cross border money transfers.”
However, Wells Fargo Digital Cash will not be client-facing, so don’t expect to find it on exchanges. A pilot program is scheduled to start next year, though Wells Fargo has been testing the technology behind the crypto by moving money between the U.S. and Canada.
Though Wells Fargo executives have been bullish on the potential for blockchain technology in financial services, the company has been more skeptical of cryptocurrencies like bitcoin which launched the system into the spotlight.
Last year, Wells Fargo joined U.S. rivals in banning the purchase of Bitcoin by credit-card customers, due to the volatility of the investment.
That’s the roundup for September 21st, 2019.
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