Category Archives: Ban

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Indian Government Official: ”Ban Private Crypto, Keep Blockchain”

A member of the Indian government has said that he believes there should be a ban on ”private cryptocurrencies“, although the use of distributed ledger technology (DLT) should be promoted.

Secretary of the Department of Economic Affairs, Shri Subhash Chandra Garg, shared his opinions during a meeting held by the Financial Stability and Development Council (FSDC), headed by India’s finance minister Arun Jaitley.

In the wake of the Supreme Court’s decision last week to give the Indian government just two weeks to produce a finalized version of digital currency policies, the FSDC meeting addressed this issue alongside its discussion of the current economic and financial situation in the country.

A press release shared by the government outlining the meeting details that upon Garg’s lead, the council deliberated on how to ”devise an appropriate legal framework to ban [the] use of private cryptocurrencies in India”.

A group of local lawyers under the Twitter handle Crypto Kanoon shared a quote from this release, querying whether this means both possessing and trading cryptocurrency would be prohibited.

Mr. Garg briefed FSDC Council on:

“..deliberations in the High-level Committee to devise an appropriate legal framework to ban use ofprivate crypto currenciesin India”

Does the abovesaid indicate that the possession and trading of Crypto are going to be permitted?#BPositive

— Crypto Kanoon (@cryptokanoon) October 31, 2018

Despite the anti-crypto sentiment of the meeting, the release indicates that Garg encouraged the adoption of DLT in India.

Counting down

The Supreme Court’s two-week deadline for the government to produce regulations comes after months of outrage from the cryptocurrency community because of the central bank’s ban on facilitating any crypto-related transactions, was imposed in April. The original petition following RBIs decision has over 44,000 signatures to date, with a goal of reaching 50,000 calling for the government to reverse the ban.

With an infant crypto industry on shaky ground in India and numerous jobs on the line, the Supreme Court determined that it was the government’s responsibility to clarify direct policy on the matter.

These two weeks run out on 10 November.


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India Supreme Court Upholds Crypto Ban, Effective 5 July 2018

The Supreme Court of India has upheld a banking ban on cryptocurrency, after reviewing a petition from the Internet and Mobile Association of India to grant a temporary one-month stay. The ban, issued by the Reserve Bank of India, will go into effect on 5 July 2018. At that point, it will be illegal for all Indian financial institutions to facilitate cryptocurrency activity.

While this is not a total cryptocurrency ban, it will effectively halt almost all fiat to crypto trading, which will be detrimental to cryptocurrency exchanges in India and make it difficult for people to convert fiat to cryptocurrency. This may provide a major boost for Bitcoin dealers, who are likely to become the best method for converting fiat to Bitcoin and vice versa.

Additionally, cryptocurrency exchanges based in India can stay in business if they abandon their fiat trading pairs and become solely crypto to crypto, which is what some Chinese exchanges did following China’s cryptocurrency ban in September 2017. Another thing most major Chinese exchanges did was to leave the country, and the same could happen in India if this ban ends up being permanent.

The Supreme Court will hear another petition from the cryptocurrency industry to halt the Reserve Bank of India’s ban on 20 July, but the precedent has now been set with the Supreme Court’s current decision, making it unlikely future petitions to the Supreme Court will help.

There is some hope that the situation will change when India’s government sets official cryptocurrency regulations, which are being rushed through according to Subash Chandra Garg, the Secretary of the Department of Economic Affairs. However, there is no guarantee that these regulations will reverse the Reserve Bank of India’s ban; in fact, they could possibly reaffirm the ban.

Garg said, “We’ve actually moved quite a lot in that, what part of the crypto business should be banned, what should be preserved and what not. That kind of detailed work has happened. Now we should be in a position to wrap this up in the first fortnight of July.”


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Wells Fargo Bans Credit Card Crypto Purchases

Wells Fargo has announced that customers will no longer be able to purchase Bitcoin and cryptocurrency using its credit cards. A spokesperson for Wells Fargo said this decision is in line with the rest of the industry, and is due to multiple risks associated with cryptocurrency.

Wells Fargo is the third largest bank in the United States with nearly USD 2 trillion of assets, not far behind the total assets of JPMorgan Chase and Bank of America, who have already banned cryptocurrency purchases with credit cards. Citigroup, Discover, Capital One, and UK bank Lloyds also issued the same ban earlier in 2018.

The risks associated with cryptocurrency purchases via credit card weren’t detailed in the announcement of the ban, but there are a couple of well-known pitfalls that makes purchasing cryptocurrency with credit cards risky to banks and their clients.

Bitcoin and cryptocurrency transactions are immutable and irreversible, so if credit card fraud were to occur the bank would be at a complete loss. Unfortunately, cryptocurrency would be a preferred way to drain a stolen credit card, since once the money is converted to cryptocurrency it can be laundered and converted back to cash, making it difficult to trace.

Market volatility is another thing that makes purchasing cryptocurrency with credit cards risky. The price of Bitcoin has declined from a peak near USD 20,000 to less than USD 7,000 today, in only about half a year.

If someone were to buy Bitcoin with a credit card and then lose a lot of their investment they might attempt a chargeback. If the chargeback wasn’t successful, the credit card user may choose not to pay back regardless, feeling that the bank didn’t properly protect them.

Indeed the bans on purchasing Bitcoin and cryptocurrency with credit cards coincide with the market going down throughout 2018, so credit card users deciding not to pay their bill after losing money in the market could be a primary factor leading to these bans.

It is perhaps beneficial to the cryptocurrency world that credit cards are being taken out of the picture since it could reduce fraud associated with cryptocurrency, making the cryptocurrency ecosystem a healthier place to conduct business.


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Vietnam Calls for Crypto Mining Equipment Import Ban

Vietnam’s ministry of finance has made an official proposal to ban the import of cryptocurrency mining equipment. This is another step towards a total ban of cryptocurrency activity in Vietnam, which is what the government is pushing for. Any non-cash payments are illegal in Vietnam according to Decree 101 and, therefore, all cryptocurrency payments are illegal.

The ministry argues that at this point cryptocurrency mining machines are not on the list of specialized management or unsafe goods, so individuals and companies can easily import them. This makes the use of cryptocurrency mining equipment difficult for the ministry to manage.

Once mining machines are successfully imported into Vietnam, it is easy for people to accumulate cryptocurrency and begin using it as a currency, breaking the law. Therefore, in order to uphold the law the government needs cryptocurrency mining imports to be banned.

Since 2017, 15,600 cryptocurrency mining machines were imported into Vietnam, and this is only machines that the government was able to track and not all the other machines that came in under the radar. Most of the mining rigs went to Hanoi, Ho Chi Minh City, and Da Nang.

Vietnam’s tightening stranglehold on cryptocurrency has been strengthened by two initial coin offering (ICO) scams, Pincoin and Ifan, that defrauded investors out of USD 660 million. The police chief of Ho Chi Minh City stated that all cryptocurrency activity is illegal following the incident, and the Prime Minister of Vietnam Nguyen Xuan Phuc, signed a directive ordering the Central Bank of Vietnam to not facilitate any cryptocurrency related transactions.

The Vietnamese ministry of finance references these ICO scams as a direct reason why cryptocurrency mining equipment must be banned so that further cryptocurrency scams don’t take place.

Banning cryptocurrency mining equipment is easier said than done. A lot of cryptocurrency miners use high-performance graphics processing units (GPUs), which are needed by people who play video games and probably won’t be banned since so many people need them. When it comes down to it any computer can mine cryptocurrency, albeit usually slowly.

It is possible to ban imports of application-specific integrated circuits (ASICs) which are the most specialized and powerful mining machines that don’t have any other practical uses besides cryptocurrency mining. However, when it comes down to it the chips could be imported with no machine surrounding it, and these chips would be indistinguishable from any other computer chip. Therefore, someone in Vietnam who is dead set on mining could import the ASIC chips and build their own machines around it.

The only true way to ban cryptocurrency mining and cryptocurrency transactions is to outlaw all computer use. Even in a country like Vietnam where cryptocurrency is completely illegal, it may still thrive due to its decentralized nature.


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Zimbabwe Lifts Crypto Ban after Reserve Bank Misses Court Appearance

The High Court in Harare, Zimbabwe has issued an interim order lifting the nationwide cryptocurrency ban decreed by the Reserve Bank of Zimbabwe on 11 May 2018. Apparently, officials from the Reserve Bank, including Governor John Mangudya, failed to show up at court, resulting in a default judgement against them.

The lawsuit was brought forth against the Reserve Bank of Zimbabwe by Golix, a cryptocurrency exchange which is based in Africa and one of three primary cryptocurrency exchanges that operate in Zimbabwe, the other two being Bitfinance and Styx24.

In the lawsuit, Golix argued that the Reserve Bank of Zimbabwe had no jurisdiction to ban cryptocurrency, since that is equivalent to lawmaking which is a power reserved for parliament. Therefore, by banning cryptocurrency, the Reserve Bank was infringing on the parliament’s power.

The temporary lifting of the ban has brought great relief to Zimbabwean cryptocurrency traders. Golix is hoping to get back to business immediately and is aiming to begin processing trades in their order book which has been on halt due to the ban.

It is unknown whether banks will cooperate with the temporary lifting of the cryptocurrency ban. There was supposed to be a 60-day grace period after the issuance of the decree which occurred on 11 May 2018, but within a week banks were already refusing to facilitate withdraws from Golix. Since the banks didn’t even follow the order of the Reserve Bank of Zimbabwe to give cryptocurrency users 60 days to get their affairs in order, it seems they have some independence regarding the decision to allow cryptocurrency trading through their respective banks, and if they decide not to cooperate Golix won’t be able to function.

While this is a big win for cryptocurrency in Zimbabwe, it is only a temporary order and there will have to be more court proceedings before a final decision is made. The only thing that is certain is a big legal battle is about to ensue between cryptocurrency and the Reserve Bank of Zimbabwe, and this battle will determine cryptocurrency’s future in the Southeast African nation.


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Telegram CEO Will Use Bitcoin To Frustrate Moscow Ban

Telegram founder Pavlov Durov has refused to comply with a Moscow court which has recently banned the popular cloud-based messaging service.

The ban was passed by the Moscow court in an apparent effort to thwart terrorism, citing the app as playing a role in terrorist activities around the globe.  Security agencies had originally demanded Telegram allow them to access to user information.

Durov informed Telegram users that the reason for the ban was the company’s refusal to provide encryption keys to Russian agencies:

“For the past 24 hours, Telegram has been under a ban by internet providers in Russia… our refusal… was an easy decision. We promised our users 100% privacy and would rather cease to exist than violate this promise.”

Within the last two days, Russia blocked over 15 million IP addresses in attempts to ban Telegram on its territory. Regardless, Telegram remained available for the majority of Russia’s residents #digitalresistance

— Pavel Durov (@durov) April 17, 2018

A day after the ban was put into effect, Durov announced that he would use Bitcoin to fund proxies and VPNs to get around the problem for his customers.

Telegram has been in conflict with Russian regulators for some time regarding the use of the app. Those seeking privacy around the world use the app for its encrypted messaging service offering high levels of privacy. The app is used in many countries in areas of conflict or government oppression as a method of secure and private communication.

In the latest development, Russian state communications regulator Roskomnadzor has blocked IP addresses owned by Google and Amazon, both used by Telegram. Interfax news reports that the Russian regulator has now blocked 18 sub-networks and some 15 to 20 million Google and Amazon IP addresses. Roskomnnadzor is a Russian federal executive body responsible for censorship in media and telecommunications.

As a result, Russian users, as well as being shut out of Telegram, can no longer use other services which route through Google and Amazon servers including the Viber messaging app. Latest reports that Microsoft and Windows updates and online games by Wargaming and Netflix may have been impacted.

Durov appears to be committed to servicing his customers despite all the hurdles thrown his way by Russian government agencies, including making donations of Bitcoin for individuals or companies running proxies and VPN:

“I am happy to donate millions of dollars this year to this cause… I called this Digital Resistance – a decentralized movement standing for digital freedoms and progress globally.”


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