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Cryptocurrency News: Money Laundering, Bitcoin Forks and SEC Oversight

Cryptocurrency News: Money Laundering, Bitcoin Forks and SEC Oversight

Nick Cawley, Senior Strategist


Talking Points

- A Russian citizen has been arrested in Greece and charged with 17 counts of money laundering.

- Cryptocurrency exchange warns ahead of possible bitcoin split.

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Digital Exchange Hit with Massive Fine

Bitcoin exchange BTC-e has been handed a $110 million fine by the US Treasury’s Financial Crimes Enforcement Network (FinCEN) for “wilfully violating US anti-money laundering laws,” according to an official release Thursday. Among charges brought against the Russian-based exchange, FinCEN said that instead of acting to prevent money laundering, BTC-e and its operators “embraced the pervasive criminal activity conducted at the exchange.” The exchange’s owner Alexander Vinnik was also arrested in Greece and given a $12 million fine for his role in the exchange’s activities.

“BTC-e is an internet-based, foreign-located money transmitter that exchanges fiat currency as well as the convertible virtual currencies Bitcoin, Litecoin, Namecoin, Novacoin, Peercoin, Ethereum, and Dash. It is one of the largest virtual currency exchanges by volume in the world. BTC-e facilitated transactions involving ransomware, computer hacking, identity theft, tax refund fraud schemes, public corruption, and drug trafficking.”

Coinbase Advises Investor Caution Ahead of a Potential Hard Fork.

Digital currency exchange, Coinbase, has emailed all its customers and warned that in the event of a bitcoin (BTC) fork on August 1, it will not support the new bitcoin cash (BCC) as it will have no way of valuing the alternative version. The email added that the firm plans to temporarily suspend bitcoin trading, deposits and withdrawals on August 1, 2017, as the fork is likely to cause disruption of the bitcoin network. While it seems that a hard fork is unlikely at the end of the month, the exchange suggests that customers who wish to access both BTC and BCC need to withdraw bitcoin stored on the exchange before the end of July 31.

Despite warnings and the potential for upheaval before August 1, bitcoin has recovered a large part of its recent losses in the last few days and is trading at a five-week high. A further recovery above the July 21 high of $2932 and the all-time high of $2980 set on June 12, would leave the headline figure of $3000 as the next objective.

Chart: Bitcoin (BTC) Price: Daily Timeframe (January 27 – July 28, 2017)

Chart by IG

US SEC Rules That Initial Coin Offerings (ICOs) must Comply With Securities Laws

The US Securities and Exchange Commission warned earlier this week that offers and sales of digital assets by virtual organizations are subject to the requirements of federal securities laws. Addressing the recent increase in Initial Coin Offerings (ICO) or token sales, Stephanie Avakin, co-director of the SEC’s enforcement division wrote: “The innovative technology behind these virtual transactions does not exempt securities offerings and trading platforms from the regulatory framework designed to protect investors and the integrity of the market.”

A copy of the full SEC release is here.

Market Moves/Top 5 Capitalizations – July 28, 2017

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--- Written by Nick Cawley, Analyst

To contact Nick, email him at

Follow Nick on Twitter @nickcawley1

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.