Category Archives: brokerage

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1Broker to Launch ”Read-Only” Version of Bitcoin Futures After SEC Charges

After the US Securities and Exchange Commission (SEC) filed charges against Bitcoin futures firm 1Broker last week, the website now has plans to re-launch on a ”read-only” basis.

At the time of the SEC filing charges, the US Federal Bureau of Investigation (FBI) seized the website, with customers left without access to their funds. A slight relief came Tuesday in the way of 1Broker’s lawyers recommending that the brokerage website can go back online in a read-only format, meaning that customers can view balances and transaction history but cannot pursue any active trades or retrieve funds.

1Broker has been adamant that customers funds remain safe despite the legal action taken against them, saying that its top priority is allowing customers to withdraw from their accounts.

A post on parent company 1Pool’s website outlining the current situation of the company details its priority to protect customers and retrieving their funds: ”The company holds enough funds to cover all withdrawal requests, of course. Before we can take the required steps to do that, we have to seek permission from the authorities.” Balances will have to be paid out via an alternative domain also, its message reads.

CEO of 1Broker Patrick Brunner spoke to CoinDesk on the subject, saying that the company is asking for patience while the process transpires. “Unfortunately, such matters take some time – from our point of view, we are ready to process withdrawals right now,” Brunner told CoinDesk.

The read-only version of the website is expected to go live today on Wednesday.

The charges

The SEC claims that 1Broker violated federal law by allowing US traders to exchange on its platform.

An FBI agent created an account on 1Broker and made a purchase of what they claim are classified as securities, for which the company does not hold the correct licenses from the SEC. The FBI cited an additional grievance in that 1Broker only required an email address and username to open an account – a lack of any know-your-customer compliance.

 

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Brazilian Government Inspects Activities of Local Crypto Exchanges

In an apparent government crackdown on corruption and money laundering, Brazilian cryptocurrency exchanges have been given a 14-point survey to fill out detailing a number of areas in their operations.

Local news outlet Portal do Bitcoin covered the incident in an exclusive piece after obtaining a copy of the document that was served to the exchanges, despite the message being signed by the prosecutor Ana Paula Bez Batti warning that the dissemination of the message is prohibited by law.

The questionnaire covers a number of topics that will supposedly contribute to the study of combating corruption and money laundering in Brazil, and covers topics including compliance issues, limits offered to customers in relation to declared income, control over the number of operations, control over the originator’s identification, hashes of the portfolios and data of the partners themselves.

Question 10, for example, reads: ”Does the Crypto-Exchange trade popular crypto-coins for their anonymity, such as Monero, Dash and Zcash?” most likely querying these coins in particular as they are notably more difficult to trace ownership of. Other questions were more direct, such as number six: ” What measures, if any, does Crypto-Exchange take to mitigate risks related to money laundering and terrorist financing?”

The Ministry of Finance supposedly issued the questions as part of a stealth dossier “to protect the integrity of the financial system”. Each brokerage was notified they had five days to respond, with the data promised to be kept entirely confidential.

What do the exchanges say?

Portal do Bitcoin contacted three of the countries top 10 exchanges by trading volume, each giving a different response to how they are handling the situation and each wished to remain anonymous. One has been fully compliant, answering each question and has already sent its response. Another claims they do not know if they have received it but are looking onto all possible communication channels.

The final exchange to comment said they do not have any plans to respond to the survey, as it was not sent as an official document from the Brazilian government but rather sent through its contact form. As most inquiry forms on similar platforms send an automated reply, it is unlikely they will be able to claim they never received the survey when the government approaches them.

 

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