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September 2013

Bithumb’s $350 Million Acquisition is All Set to Be Canceled

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Bithumb

Bithumb

Over the course of the past few years, the crypto ecosystem in South Korea has grown quite quickly and one of the better-known crypto exchanges to have emerged during that time is Bithumb. Last year in October, the Korean crypto exchange had reached an agreement on an acquisition deal, but that has fallen through due to apparent payment difficulties.

Due to the snafu, it has now emerged that some overseas investors are going to save the day and acquire the exchange. BK Consortium had agreed to acquire a 50% stake in addition to one solitary share in a deal worth $352 million.

Key Issues

However, it has now emerged that BK Consortium is going to default on those payments and had previously found it difficult to make the $100 million down payment with regards to the deal. The whole thing has turned into a bit of a nightmare for Bithumb, with BK Consortium repeatedly failing to honor its commitments.

The deadline for the acquisition was actually April, but at the time BK Consortium could not make the payment and instead raised its stake in the exchange to 70%. In desperation, BK then tried to make a coin offering in order to raise cash. However, the downturn in the crypto market forced the company to scrap the plan.

>> Overstock’s Crypto Division Invests $2 Million USD in Evernym

That being said, the South Korean exchange has managed to attract some overseas investors who are now expected to save the day. According to reports, investors from the United States and China are showing an interest in acquiring the exchange. If the overseas investors do get their hands on the company, then it is almost a certainty that a lawsuit will be brought in by BK Consortium with regards to the $100 million payment. It will be an important acquisition for whoever gets it, considering the fact that Bithumb is currently among the biggest crypto exchange in the world at the moment. It is ranked at 43rd in terms of daily volume.

Featured image: DepositPhotos © cupertino

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OneCoin Leader Arrested in New York

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OneCoin

OneCoin

US prosecutors have arrested one leader of the OneCoin project for stealing billions from investors through the alleged pyramid scheme.

Ruja Ignatova and Konstantin Ignatov have been indicted by the State of New York for wire fraud, securities fraud, and money laundering. Ignatov was arrested this week, however, Ignatova remains at large.

The pair defrauded investors out of “billions of dollars” using fake cryptocurrency.

OneCoin

Prosecutors are calling the OneCoin project a pyramid scheme whereby members work on a commissions basis and try to recruit other members to the project. Each of these members, of which there are a purported 3 million worldwide, are required to buy a cryptocurrency package in order to join up for the scheme.

According to CoinDesk“OneCoin claims its tokens are mined by servers operated by the company and that its price growth is organic [however], neither of these are true, the release says.”

According to Attorney Geoffrey Berman, the two defendants promised big returns and minimal risk from their cryptocurrency company that was built on “lies and deceit.”

He furthered:

“They promised big returns and minimal risk, but, as alleged, this business was a pyramid scheme based on smoke and mirrors more than zeroes and ones. Investors were victimized while the defendants got rich.”

>> Fidelity Digital Assets: Taking Its Time Evaluating Ethereum Support

Ignatova reportedly detailed in an email how she had an “exit strategy” from the project and will also face charges in India for the fraudulent scheme. Ignatova remains at large. The third leader of the project, Mark Scott, was arrested last year in Massachusetts.

Crackdown

The OneCoin project was highlighted as fraudulent since 2016. It has been globally recognized as a scam with nations across the globe warning users about it.

Have you fallen victim to a cryptocurrency scam? The market is volatile, and the risks of being scammed are high. What are your thoughts about the OneCoin project?

Featured Image: Deposit Photos © VitalikRadko

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Facebook Crypto Ad Ban | Platform Loosens Restriction on Crypto Ads

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Facebook Crypto Ad Ban

Facebook Crypto Ad Ban

According to CNBC, Facebook said on Wednesday that it will loosen its ban on cryptocurrency advertising on its platform. The result will allow businesses related to crypto and blockchain to promote their projects on the social network. The Facebook crypto ad ban first came into effect in January 2018.

Facebook Crypto Ad Ban

The social media giant first started blocking ads on initial coin offerings, saying it had concerns for its users’ welfare. It was afraid that many would fall for scams and fraudulent crypto products.

But earlier this year its stance began to change. In January 2019, it began allowing ads from projects that had received prior written approval.

Was it coincidental that around the same time there were murmurs that Facebook itself was going to venture into the cryptocurrency space with its own coin?

Now, the social media giant has gone another step further, making it so that crypto-related ads will no longer require prior written approval.

In a blog post released yesterday the media giant said:

“We’ve listened to feedback and assessed the policy’s effectiveness […] While we will still require people to apply to run ads promoting cryptocurrency, starting today, we will narrow this policy to no longer require pre-approval for ads related to blockchain technology, industry news, education or events related to cryptocurrency.”

The company’s initial ban was met with ire from many businesses that felt the new policy was unfair. The restriction on advertising meant several projects lost hundreds of thousands of dollars because their ad campaigns were suddenly banned.

>> Bitcoin Price to Hit $7,200 After Demonstrating Bullish Signs?

It also is a convenient time for Facebook to change its opinion of cryptocurrency advertising as it is reportedly working on its own blockchain project.

According to several sources, the company is building its own stablecoin that will allow WhatsApp users to send cryptocurrency payments to one another. Further, last week it was reported that Facebook has been in talks with financial firms and e-commerce companies to support its project.

Are you happy to see the Facebook crypto ad ban reversed?

Featured Image: DepositPhotos © Kesu01

Bitfinex and Tether Lawsuit Revised After Plaintiffs Drop Action

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Bitfinex

Bitfinex

Controversial cryptocurrency exchange Bitfinex and its sister stablecoin issuer Tether have had a lawsuit against them withdrawn by two plaintiffs and re-filed with the addition of a new plaintiff.

The two companies were accused of creating “the largest bubble in human history” in a lawsuit filed in New York in October, which alleged that Bitfinex and Tether manipulated the crypto market out of up to US$1.4 trillion. A second, similar case was then brought against the two companies by Eric Young and Adam Kutz, who claimed that Bitfinex and Tether “monopolized and conspired to monopolize the Bitcoin market,” as well attempting to manipulate the market and making inaccurate claims.

Both cases were built upon longstanding claims that Tether essentially printed billions of dollars worth of tokens to artificially inflate prices and convince the market that there was a far greater demand for cryptocurrencies than was the reality.

A document filed on Tuesday, January 7, in the US District Court for the Western District of Washington shows that both Young and Kutz agreed to the voluntary dismissal of their case against iFinex, the parent company of Bitfinex and Tether. The suit was refiled the following day with the addition of David Crystal as plaintiff. It is not yet known why Young and Kutz decided to refile the case, and US law states that cases which have been voluntarily dismissed can never be brought to court again if it is dismissed a second time.

Both companies are steadfast in their denial of the accusations, describing the claims thrown at them as “meritless and mercenary.” Stuart Hoegner, general counsel to Bitfinex, said that the refiled case was also baseless and “will be disposed of in due course.”

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Tether had emphasized that its coin is backed 1:1 with the US dollar but flip-flopped on this stance in February when under investigation by the Department of Justice, changing its position to say its reserves “from time to time may include other assets.” Tether then made another walk back from this claim in April, when one of its lawyers admitted in court that the USDT was actually only 74% backed by cash or cash equivalents.

Featured Image: DepositPhotos © ezthaiphoto

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