U.S. Congressman Brad Sherman has proposed an amendment designed to enhance the enforcement of sanctions on Russian digital assets. The amendment allows the Treasury Secretary to prohibit crypto transactions linked to Russian entities and requires U.S. taxpayers to report crypto transactions offshore exceeding ,000 to the Financial Crimes Enforcement Network (FinCEN). New Amendment Seeks to […]
Bitcoin News
GHO Stablecoin Fails to Enforce Dollar Peg Amid Criticism, Receives D Grade From Bluechip
Roughly three weeks ago, Bitcoin.com News covered the stablecoin GHO, when it achieved a notable milestone by reaching .98 per coin. However, on December 11, the token experienced a slight dip, hitting .975 per unit. Despite some improvement in its stability, the stablecoin has still not enforced its intended goal of a peg.
GHO’s Struggle for Stability
Launched by Avara (formerly known as Aave), GHO has been a noteworthy example in the realm of dollar-pegged tokens. Since its inception in mid-July, the digital currency has consistently failed to maintain its peg to the U.S. dollar, persistently falling short of this mark. Despite a low point of .917 on October 24, 2023, GHO saw an upswing towards the end of November, reaching .98 per coin.
Nevertheless, the stability was short-lived. By December 11, GHO had dropped to .975 and, despite a spike to .987, it has not reached the intended mark to date. Interestingly, since October 21, an extra 10 million coins have been introduced. With a total of 34.72 million coins in circulation, the market capitalization of GHO barely exceeds million, primarily due to its price not aligning with the dollar. The stablecoin has faced criticism for these fluctuations.
Chroma’s Jack Longarzo remarked on X, “Scaling stablecoins is a demand side problem, not a supply side problem. The problem with GHO is AAVE only has an advantage on the supply side and isn’t positioned to create demand to actually hold the stablecoin. This won’t scale. Time to GHO build something else.” This critique was in response to a post on X by Stani Kulechov, founder and CEO of Avara.
Kulechov stated, “GHO is already bringing 2.1M in annualised revenue @ tiny 35M mint cap. Also, GHO peg is getting better. It’s [a] matter of time when GHO is ready for scale, and imagine the revenue for the Aave DAO.”
Bluechip Stablecoin Ratings Gives GHO a D Grade Assessment
Bluechip, an independent, nonprofit stablecoin rating agency, has assigned GHO a D grade, based on stability and risk factors. Bluechip’s rating system parallels that of a school report card, where A+ represents the highest achievable score, and F marks the lowest. Bluechip’s report on GHO points out its consistent underperformance relative to the peg and suggests that a short-term recovery of the peg is unlikely.
This is attributed to a “lack of strong stability mechanisms to enforce a peg.” The report continues, “Due to low borrowing rates and no reserve redemption mechanism, GHO’s price is more likely to drop further than increase. GHO, in its current form, is unsafe. We caution users against holding GHO,” the report adds. However, the report further says GHO can improve to a B/B+ rating.
“Despite our rating, we believe GHO already has many key ingredients in place to become a safe, decentralized stablecoin, provided that it implements stability-enhancing changes to its design,” the report concludes.
What do you think about the stablecoin GHO failing to achieve its intended parity? Share your thoughts and opinions about this subject in the comments section below.
Bitcointalk Forum to Enforce Mixing Talk Ban
Bitcointalk, a historic Bitcoin-focused forum, has announced it will start banning mixer-related topics next year. Forum administrator Theymos argued that while these services were not necessarily illegal, a pattern has emerged where these platforms are consistently being taken down by law enforcement.
Bitcointalk Forum Announces Upcoming Ban on Mixing Topics
Bitcointalk, a historic forum platform where Bitcoin creator Satoshi Nakamoto often wrote posts, has announced that it will enforce a ban on mixing related talk. The ban will start to be applied next year, affecting topics that describe the use of these platforms focused on increasing privacy and obscuring the source of the bitcoin held in an address.
Theymos, the administrator of the Bitcointalk platform, clarified that starting January 1, all old posts referring to mixers will be locked and archived, while new posts directing people to the use of mixers could lead users to be banned from the site. Mixer addresses will be filtered, and any attempts to go over this filter will also be ban-worthy. Theymos stated that discussing mixers “in a general sort of way” will still be allowed.
While Theymos acknowledges that cryptocurrency mixers are not illegal per se, he stressed it was “no longer reasonably possible to allow linking to mixers.” He stated:
A clear pattern has emerged where mixers pop up, last for a little while, and then get taken down by law enforcement once they get too big. Allowing mixers to be posted on bitcointalk.org before they seemingly-inevitably get declared illegal and seized is not sustainable.
The measure garnered mixed reactions from the community on the site, with some users criticizing the move while others acknowledged that it was necessary for the survival of the forum in the long term.
The ban comes after Sinbad, a cryptocurrency mixing platform, was labeled as a “key money-laundering tool” and sanctioned by the U.S. Office of Foreign Assets Control (OFAC) for allegedly processing millions of dollars for hacking groups such as Lazarus.
What do you think about Bitcointalk’s ban on mixing topics? Tell us in the comments section below.
FinCEN Chief US Will Strictly Enforce Anti-Money Laundering In Crypto
n FinCEN Director said that Anti-Money Laundering laws will be strictly enforced in the world of crypton
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Vancouver Police Push Government to Enforce KYC/AML Laws with Cryptocurrencies
The Vancouver Police Department (VPD) has warned Canada’s federal government that cryptocurrencies are increasingly being used by organized crime to launder money.
The agency advises that checks and balances are necessary to monitor the digital coins, and pushes for the enforcement of amendments to legislation that would require crypto-related transactions be reported to the Financial Transactions and Reports Analysis Centre of Canada, FINTRAC.
Increase in Police Filings
Police in Metro Vancouver saw a 350% increase in filings related to cryptocurrency from 2016 to 2017. As of January this year, the agency investigated 70 files, calculating a potential for 800 cases by the end of year — a 300% increase over 2017.
Because of these findings, police are growing increasingly worried that organized criminals — both domestic and foreign — will take advantage of the potential anonymity related to digital currencies, specifically to launder money.
The report noted that because of lack of regulation in Canada, services that operate in cryptocurrencies, like Bitcoin ATMs, don’t currently require the collection of customer details and place no limit on the amount of funds that can be transferred from one person to another.
“Given this lack of regulation, it is likely that Canadian organized criminals will use Bitcoin ATMs to launder their cash. However, we will likely also see foreign organized crime taking advantage of the lack of regulations,” the report read. “Any forward-thinking criminals will be exploring cryptocurrency and ATMs as an easier and more profitable alternative.”
According to Coin ATM Radar there are 63 Bitcoin ATMs in Metro Vancouver. Since many are owned by small, independent vendors, police are worried that they don’t follow Anti Money Laundering (AML) and Know Your Customer (KYC) verifications, which require the collection of personal information from users such as government-issued photo IDs and birth dates, the report read.
Bill C-31: FINTRAC Registration
The report accompanied a VPD-authored resolution to be brought before the Canadian Association of Police Governance. The resolution calls for the implementation of government amendments made to legislative Bill C-31, which passed in 2014 but was not brought into force.
Bill C-31 amended the country’s crime and terrorist financing act to include regulations for digital currencies. The bill requires any company wishing to transmit or convert digital currencies to register with FINTRAC, Canada’s financial intelligence unit.
“The lack of regulatory framework allows criminal groups to explore a myriad of ways that they can exploit Bitcoin ATMs and exchanges,” the report read. “They can commit fraud, launder money and turn Canada into a haven for international criminal funds. Implementing the cryptocurrency provisions from Bill C-31 would not eliminate these problems. However, they would restrict them at their source and severely limit their ability to flourish.”
Image from Shutterstock.
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Russia Might Enforce Ban on Bitcoin Mining in Residential Places
The relationship between Russia and cryptocurrency continues to evolve in different manners. It appears there is now a proposal on the table to ban Bitcoin mining in residential areas. Assuming there is any truth to this concept, things aren’t looking great for cryptocurrency miners in the country. Any apartment or flat housing a Bitcoin mining … Continue reading Russia Might Enforce Ban on Bitcoin Mining in Residential Places
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Russia Might Enforce Ban on Bitcoin Mining in Residential Places
The relationship between Russia and cryptocurrency continues to evolve in different manners. It appears there is now a proposal on the table to ban Bitcoin mining in residential areas. Assuming there is any truth to this concept, things aren’t looking great for cryptocurrency miners in the country. Any apartment or flat housing a Bitcoin mining … Continue reading Russia Might Enforce Ban on Bitcoin Mining in Residential Places
The post Russia Might Enforce Ban on Bitcoin Mining in Residential Places appeared first on NEWSBTC.