Bitcoin price has had a tumble today, breaking key support levels and recording a daily low of USD 8,359, keeping that level for more than 12 hours before finally recovering in early morning hours of Saturday in Central Europe to USD 8,522 (CoinDesk).
There seems to be little to explain this behavior for Bitcoin price, but there have been anyway strong bearish signals in technical analysis to suggest that we could be headed for yet another sustained attack by sellers.
Altcoins have generally followed in the trend of Bitcoin price, with only LISK, ADA and DOGE showing positive gains in the Top 20 altcoins, although losses have been limited to around 2% across the board. Some breathing space before Sunday, perhaps?
One of the biggest items of news that emerged just around the same time as the price tumble is that from the BBC that alleges that some USD 450 million in cryptocurrency that once belonged to crypto exchange WEX, a spin-off from troubled BTC-e exchange, may now have been traced to a fund that purportedly belongs to the Federal Security Bureau (FSB), the Russian Federation’s intelligence agency.
BBC Russian Service had been conducting an investigation into the scandal of BTC-e, a crypto exchange allegedly run by co-founder Alexander Vinnik, who stands accused of fraud and money laundering to the tune of USD 4 billion in Bitcoin in the six years of operations.
The investigation dramatically ties the lost Bitcoin from customer deposits to FSB, using evidence from audio files that sees one Anton — thought to be ex FSB officer Anton Nemkin — tied to BTC-e co-founder Aleksey Bilyuchenko and Konstantin Malofeyev, the man thought to have been involved in selling WEX.
The man named Anton apparently asked Bilyuchenko to give over the cold wallets containing crypto assets from WEX, and the request was complied. After this, Bilyuchenko was delivered to an FSB department in Moscow, where he was questioned about WEX operations by several officers in plainclothes.
A day after that, Anton demanded Bilyuchenko to hand over all of WEX crypto to the “fund of FSB of Russia”. This was a total sum of USD 450 million worth of cryptocurrency, including funds from WEX users.
Bilyuchenko agreed to the handover, and the transfer of some 30,000 Bitcoin and 700,000 Litecoin were transferred from these wallets — these transactions have been identified on their public blockchains.
BitcoinNews.com reported last year that Vinnik had confessed to laundering billions of dollars in Bitcoin. The man is wanted by many governments, some on new charges. Less than two months after the news, WEX halted withdrawals, raising fears of an exit scam.
Money laundering is hot on the weekend, with the United States Financial Crimes Enforcement Network (FinCEN) Director Kenneth Blanco stating that Anti-Money Laundering (AML) laws would be enforced to strict measures against crypto.
He was quoted by Reuters as adamantly saying that crypto-related firms, especially those related to money services, would have to comply with AML laws and share requested information about their customers.
Blanco was at a Chainalysis conference when he said the US travel rule would also apply to digital currencies, saying:
“It [travel rule] applies to CVCs [convertible virtual currencies] and we expect that you will comply, period. […] That’s what our expectation is. You will comply. I don’t know what the shock is. This is nothing new.”
The travel rule he referenced is actually a part of guidelines from the Financial Action Task Force (FATF) that required financial regulators as well as Virtual Asset Service Providers (VASPs) to collect personal data on transactions and share them as required. These standards are expected to also be imposed on the digital asset sector, though they are typically the burden of the banking industry.
Blanco said that FinCEN has already been involved in investigations related to compliance within the travel rule for the past five years. He notes that this is, in fact, the most common violation among money service businesses working with in digital currencies.
Just last month, the FinCEN boss said that AML laws were blind and would apply to everyone equally since the main objective of AML policies is to know about both parties to a payment transaction. He said:
“There is a reason you want to know … the person on the other side of that transaction — they might be dealing in some kind of illicit activity. Whether it’s opioids … or human smuggling on the other side … you want to know who that person is.”
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