Category Archives: China

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Rogue Crypto OneCoin Strikes Again, Accused of Defrauding UK Investors

It appears that rogue cryptocurrency OneCoin is again attracting attention for all the wrong reasons after a Londoner has accused its UK management of fleecing her of her life savings.

A Mrs Begum in her 30s went to a OneCoin event in Aldgate in London in 2016, and invested in the coin, but three years on is now unable to access her GBP 54,000 (USD 70,000) life savings.

OneCoin has been listed as a fraudulent cryptocurrency in the US, is on a warning list in New Zealand and currently its multi-level marketing scheme is the subject of a court case in Singapore. The Singapore Police have subsequently warned the public about the risks of being involved in OneCoin or any marketing schemes connected with it. In 2018 Chinese police made a swoop on a OneCoin operation there worth USD 266 million.

In London it appears that Begum fell foul of the company’s marketing, saying that after she had made a cash purchase, “I realized a few months in that there was no scheme.”  She was told at a marketing event she would later be given tokens. The organizers of the event, which was attended by some 1,000 potential investors, told her that the earlier she made the investment the greater the payout, and she could gain a ranking by also bringing other investors on board.

In October of 2016, the investor was told that her coins had doubled in value and that the money was sitting in an account. After trying to cash in the investment she was told the following year that:

“No refunds will be made after the IMA [investor] has logged in to his/her account… By logging into his/her OneLife Network account it is considered that the IMA is accepting the terms and conditions and no refunds shall be made.”

It now appears that OneCoin has been accused of convincing people to pay tens of thousands of pounds to invest in the digital currency. Begum’s continual efforts to cash in her coins over three years have been met with complications which effectively keep her at arm’s length from her original investment.

The OneCoin organization claims that it is the second generation of cryptocurrency after Bitcoin and already had a huge following, and promised tremendous returns for investors. It is impossible to view the inner-workings of OneCoin without buying a non-refundable starter package such as was purchased in London.

When purchasing OneCoin a user receives tokens that have no value, and they can submit these tokens for “mining” where the tokens eventually become OneCoins. This isn’t true cryptocurrency mining where a user is rewarded for putting their computing power towards maintaining and securing the network. There is no evidence that OneCoin ever had a blockchain to maintain and secure, and the inner-workings of the “mining” process were secretive.

While the founders claim that they are creating 300 new millionaires a year, the US Department of Justice has called it “an old scam with a virtual twist”. An investigation into the company in the UK and allegations of fraud continue.

 

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All Assets Will Be Traded on Decentralized Exchanges

In an interview with Bloomberg, executive chairman of Blockchain Research Institute Donald Tapscott shared his opinion about the future of cryptocurrency, decentralized exchanges and the fate of traditional assets.

Tapscott has suggested that in the near future, the intrinsic qualities of decentralized exchanges will make them compatible with traditional assets, he said:

“All assets, not just currencies, but traditional securities will be traded on decentralized exchanges.”

His reason for the assertion comes from the fact these exchanges offer the requisite transparency for tracking bad players in the financial market, and as a matter of fact, this core characteristic will enable decentralized exchanges to dominate over the centralized exchanges in the future.

Tapscott seems to think decentralized exchanges in China are feasible despite the lack of government oversight as an intrinsic quality of these exchanges. However, since China banned cryptocurrency trading, and according to him, “the government of [China] is quite serious about hurting crypto,” his understanding of the situation is that of a “weird dichotomy” as the nation sees blockchain playing an important role in the future economy, nonetheless has made an enemy of the underlying digital asset class.

However, the banning of exchanges and the current action against mining operations can only hurt any foreseeable future with blockchain. Tapscott finds it unnecessary and while Bitcoin seems to be championing the crypto space at the moment, he argues that:

“In 20 years we are not going to be using Bitcoin in China. The Chinese people will use the RMB, only the RMB will become a cryptocurrency, the Central Bank of China will turn it into a digital currency.”

On the subject of security, Tapscott argues that few things can be solved by technology alone, and while crypto space may be prone to bad actors, sometimes the problem isn’t with the technology but rather bad governance which is structured in a centralized manner. He opines:

“Blockchain is much harder to hack than the traditional systems, our banks, our governments and [financial] institutions.”

 

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Chinese Miners Struggle for Easy Ride in Iran

Things aren’t turning out to be smooth for Chinese Bitcoin miners heading into Iran to profit from cheaper electricity rates.

Long before China hinted it may consider halting Bitcoin mining projects, the exodus began and Iran recently became a hotspot for miners along with parts of South East Asia such as Vietnam and Cambodia. China’s National Development and Reform Commission (NDRC) is now looking to siphon off a number of industries which include cryptocurrency mining as part of a state cleanup.

The Iranian venture for many of those Chinese miners deciding to make the move has gone sour, and reports coming back from Iran highlight some of the issues which have made the Middle East less attractive than was at first perceived.

One issue has been getting the equipment across the Iranian border. One miner Liu Feng reported that the chance of losing equipment at the border has become common, with Iranian customs confiscating at least 40,000 crypto mining rigs to date. Some rigs can be sneaked through if presented as non-mining processors for those lucky enough to be able to strike up a deal with customs officials. Feng explains the reason for the confiscations:

“Because of [Iran’s] huge electricity subsidy, the government has added this energy-hungry device (bitcoin miner) to the list of 2,000 banned shipments to come in.”

The same mining enthusiast, Lui Feng also had problems pricing his electricity supply with a local supplier after his supply tariff was doubled just two months into operation. A subsequent set up resulted in angry locals complaining about the noise emitted from his rigs, resulting in miners being confiscated.

Despite these hurdles, Chinese Bitcoin miners are still optimistic that it can get better for them in Iran. With the Iranian government now accepting crypto mining as a legal activity, Iran’s President Hassan Rouhani is behind a new cloud computing industrial park. Also, there are rumors that Tehran may get behind the import of Bitcoin mining hardware.

Currently, the Islamic Revolutionary Guard Corps are still detaining or confiscating machines at border points with tough import rules still in place.

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Research: Blockchain in Finance Still Problematic For Operability, Integration with Enterprise Systems

Research: Blockchain in Finance Still Problematic For Operability, Integrating with Enterprise

New research from China points to several problems blockchain still faces in the finance sector, including data privacy compatibility, operability, and its integration within enterprise systems.

The conductor of this research, Wei Kai is head of blockchain research at the China Academy of Information and Communications Technology (CAICT). Wei shared his most recent findings at a 2019 meeting of the International Chamber of Commerce Banking Commission.

In addition to the three main issues listed above, Wei noted that more problems would arise in the future from uncoordinated regulatory approach between jurisdictions globally. The issue of how to control investment is prevalent also.

Overall, however, his outlook was positive on the future possibilities for blockchain, saying it may well still transform the banking industry. Its ability to benefit other industries, including medicine, transportation, and government, was also addressed.

The CAICT is a research center that operates under the Chinese Ministry of Industry and Information Technology. Last year, the blockchain research department published a whitepaper to ”promote the deep integration of Blockchain technology and the real economy.”

 

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China State Planner Targets Crypto Mining on Clean Up List

China State Planner Targets Crypto Mining on Clean Up List

China’s National Development and Reform Commission (NDRC) is looking to siphon off a number of industries which include cryptocurrency mining as part of a state cleanup.

The NDRC of the People’s Republic of China, formerly State Planning Commission and State Development Planning Commission, is a macroeconomic management agency under the Chinese State Council, which has broad administrative and planning control over the Chinese economy. The commission is therefore responsible for rubber stamping or even eliminating industry in the country.

It appears that Bitcoin mining may fall into the latter scenario as the activity has been added to a cull list of over 450 activities under scrutiny due to what it sees as a violation of relevant regulations. The public has been given a month to make their own views felt on the commission’s latest draft, after which, more formal decisions will be taken regarding the future of the named activities.

Such a move has been anticipated within the Chinese cryptocurrency community after ICOs were banned and many exchanges driven overseas after an official shutdown. Although Chinese companies list among the world’s major manufacturers of mining gear and the country remains home to major crypto mining firms, the pressure is on to follow the government line, which remains vehemently anti cryptocurrency, despite top-down official expressions of interest in the burgeoning blockchain industry.

A local state-owned paper the Security Times said that the announcement “distinctly reflects the attitude of the country’s industrial policy”.

A plan by mining giant Bitmain which suggests it is preparing to roll out 20,000 of its own mining units in China to capitalize on the country’s cheap hydroelectric power later this year may well have to be revised dependant on the outcome of the NDRC decision.

 

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Chinese Tech Entrepreneur Calls for Blockchain Solutions to Boost Data Protection

Chinese Tech Entrepreneur Calls for Blockchain Solutions to Boost Data Protection

Chinese serial entrepreneur Steve Wei, founder of SkyVPN, is calling for blockchain solutions to boost Virtual Private Network (VPN) security.

Wei’s company allows its users to access the web by privately routing the connection through a remote server. He is claiming that VPN should now be decentralized having observed that those current centralized systems allow scrutiny of user data, app use, and browser history, infringing the privacy rights of the individual.

This sparked his imagination, considering  blockchain and the influence it could bring to bear, “Immediately I realized VPN should be decentralized and should leverage blockchain technology.” He argues that companies who promise high levels of privacy guarantee more than frequently don’t actually deliver this. He cites the “Facebook Research” project as one that has used a VPN app to collect and monitor user data such as web activities and app use.

Wei’s team have built a system TOP network which handles communication services such as messaging, calling, streaming, virtual private network, content delivery network (CDN), and IoT data sharing. The team is also responsible for an online phone call app Dingtone and an end-to-end encrypted messaging app CoverMe. The TOP network integrating all three projects including SkyVPN will launch in June.

Wei maintains that decentralization will strengthen VPN services making then less vulnerable to blocking or shutdowns; also data stored on a central database will always be prone to hacking:

“When the infrastructure is not decentralized enough, it could be vulnerable to not just cyberattacks but also powerful corporations and organizations gaining control of the software and operation.”

 

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JPMorgan Inspired But Worried About China Fintech

JPMorgan Inspired But Worried About China Fintech

A recent expedition by JPMorgan Chase & Co executives to China to conduct business reconnaissance of their financial technology (fintech) has resulted in mixed feelings of inspiration and worry, according to the consumer bank’s CEO Jamie Dimon.

In a letter distributed to shareholders last week, Dimon outlined the vast progresses made by Chinese banking firms in fintech, claiming that the evidence had spurred top brass to act even quicker on innovation measures:

“It’s hard not to be both impressed and a little worried about the progress China has made [with artificial intelligence and fintech]… It made our management team even more motivated to move quickly.”

During the China trip, the team paid visits to companies that could open accounts almost immediately with machine learning, and firms that could pay out claims in a few ours with just smartphone images.
Dimon is a long-time advocate of investing in innovation, in 2017 dubbing technology “the greatest thing that has ever happened to mankind”. Bloomberg reported in February that the bank would boost its annual tech budget to USD 11 billion, including to research machine learning.
However, Dimon has not always taken kindly to cryptocurrency and blockchain, criticizing Bitcoin often in past yeas. He has seemingly changed his mind, backing blockchain last year. JPMorgan Chase itself has been stirring in the crypto scene, with its quiet launch of JPM Coin in February targeting institutions.

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Despite Crypto Ban, China Leads Rest of the World in Blockchain Development

Despite Crypto Ban, China Leads Rest of the World in Blockchain Development

China may have long banned the activities of cryptocurrencies but evidently has been a breeding ground for blockchain as it leads the world by as much as 25% in a niche of select blockchain projects.

As reported by an English online publication China Daily, citing Beijing-based data provider Blockdata, back in November last year, China had led the world in new blockchain projects accounting for 263 progressive projects offering solutions targeting the financial services, public services, healthcare, supply chains, smart manufacturing, and logistics.

The report indicated that blockchain had inspired many industries outside the scope of fintech, and while from the get-go it had been associated with cryptocurrencies, at its core, it has real value beyond digital assets.

One illustration of the use of blockchain as described by the leader of the Asia Pacific Blockchain Lab at global advisory company Deloitte, Paul Sin, is its ability to cut through geographical boundaries and maintain data security and integrity between companies. He said:

“Whenever there is a need to synchronize data, especially sensitive information, across companies, industries, and geographical boundaries, blockchain can offer a great solution due to its cryptographical protection of data.”

As it appears, blockchain has the ability to seam economic diversities as it brings financial inclusion to both micro and macroeconomic entities. Small and medium-sized enterprises now have access to sources of funds which were unattainable before the advent of the blockchain. This in itself is “a solid example of blockchain supporting financial inclusion and macroeconomic growth”, according to Sin.

The growth of blockchain presence in China has gone beyond theoretical foreplay and extends to a more practical hands-on approach to integrating blockchain into the economic system. The report also cited a survey carried out in 2018 which revealed 50 percent of respondents in China saying the technology is currently being used in their organization. Comparatively, the US had only 14% attesting to the integration of the technology in their organization.

Earlier this year, Bitcoin News reported how China could play a big role in Bitcoin’s growth in 2019. More so, it appears that both the technology and the asset class have intertwined destinies. As one member of the Blockchain Research Center of China said, “the easing of cryptocurrency investment will be conducive for the healthy development of blockchain”, inferring that it will allow capital-flow to blockchain applications with real-world values.

It’s common practice for cryptocurrency enthusiasts to speculate on the value of the technology based on the market situation, however, price speculation without real-world applications can only do so much. Meanwhile, blockchain developments continue to expand at the enterprise level with explorative intents on how best to exploit the power of the technology, as Sin finds that “some cases of use will be better supported with other technologies such as Open API”. Overall, Sin clearly seemed objective and optimistic about blockchain’s role in China’s economy suggesting that:

“When all the noise, hype and speculation dies down, we expect an increasing focus on the real application of the technology in solving real business problems to create solid synergetic values.”

 

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Leading Chinese Shipping Company Looking to Implement Blockchain Technology

shipping company

The possible implementation of blockchain technology to finance upstream suppliers is being explored by the China Shipbuilding Industry Company Limited (CSICL), People’s Daily (official Chinese newspaper) reported on 27 March 2019. China Shipbuilding Industry Corporation (CSIC), one of the two biggest Chinese shipping conglomerates, owns CSICL.

A strategic cooperation agreement, concerning supply chain services, was signed between Shanghai Bank and CSICL. A blockchain-backed online supply chain finance platform will be developed by Shanghai Bank and CSICL for CSIC’s upstream suppliers noted the agreement.

Company’s ten major product sections will be covered by the said platform, including, automation distribution systems, marine engineering, gas meters, storage batteries, port machinery, shipbuilding, large steel structure fabrications, turbochargers, diesel engines, and tobacco machinery.

The said agreement is a part of Shanghai Bank’s plan to integrate new technologies into its system to improve business processes.

Previously, in October 2018, an online supply chain financial service platform, named Uplink e-Chain was launched for medium and small enterprises by Shanghai Bank.

Wide application of blockchain technology in various supply chains, especially in the shipping industry has been seen recently. Earlier this year, Zim (largest cargo shipping company in Israel) launched its blockchain-based platform for electronic bills of lading to all clients.

Moreover, a port operating system backed by blockchain, named Edge.Port will be developed by Infotech Baltika (shipping logistics company based in Russia) in collaboration with blockchain startup Iconic (based in Moscow).

Furthermore, a pilot of blockchain-based maritime trade platform (TradeTrust), funded by the Singapore government will be launched during the on-going year. Singapore’s Maritime Port Authority, the Singapore Shipping Association, Singapore Customs and Infocomm Media Development Authority signed a Memorandum of Understanding back in January 2019 which led to the announcement of the pilot project.

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Bitcoin Only Ranks 15th in China Crypto Rankings

Bitcoin Only Ranks 15th in China Crypto Rankings

The China Electronic Information Industry Department (CCID) has just announced its latest rankings for cryptocurrency projects for the month of March. Much to the bemusement of many crypto enthusiasts on social media, the CCID’s Global Public Blockchain Technology Assessment Index (XI) has scored Bitcoin a mere 15th place on the rankings, while EOS sits at top spot.

Critics have called the state-linked CCID rankings “bizarre”, noting that many of the crypto projects listed are either linked to Chinese companies or have a significant Chinese developer presence.

#China CCID Research Institute has released its 11th CCID Global Public Chain Technology Evaluation Index. The top ranked project continues to be EOS, competitors Tron and #Ethereum claimed the second and third spots respectively. Surprised or not? pic.twitter.com/9JJGiezABz

— Unitimes (@Unitimes_) March 25, 2019

Smart contract platforms seem to be leading the way, as second and third spots were taken up by TRON and Ethereum, both of which have been promoting the use of decentralized applications (Dapps), like top ranking EOS. This is admittedly a focus of CCID and it seems to be a message that the Chinese government will be pursuing development of Dapps internally.

Bitcoin scored the lowest of all the top 15 projects in the “Basic-tech” category, scoring only 42.4 compared to EOS’s 104.6 score. Ethereum’s continued domination of the Dapp industry was probably what led it to getting the highest score on the “Applicability” category.

Bitcoin, on the other hand, was deemed to be the best in the “Creative” category, scoring the highest marks of 39.2, compared to 9th-placed Steem with only 9.1 marks. Why exactly Bitcoin is more creative than others may remain a mystery for a while.

The ranking from China is indicative of mounting Chinese interest in cryptocurrency despite a long bearish market. Meanwhile, second-ranked TRON founder Justin Sun also celebrated his 1 millionth follower on Twitter, and was congratulated by his own TRON Foundation. The Foundation claims that this is the first personal account for a blockchain figure to receive that landmark number.

Congratulations on @justinsuntron’s twitter account becoming the 1st personal account that exceeded 1 million in the blockchain industry. #TRON #TRX $TRX pic.twitter.com/jiIYgWv9Xg

— TRON Foundation (@Tronfoundation) March 21, 2019

 

 

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