Bitcoin price LIVE: BTC nears $9,000 despite warning over 'Russian sanctions'
BITCOIN is moving towards the $9,000 mark as confidence begins to return. However, a leading financial crime expert has warned that regulation is needed to stop cryptocurrencies being used by countries like Russia and Venezuela to evade international sanctions.
Good morning, and welcome to our rolling coverage of all things cryptocurrency including price, regulation, innovation and financial crime.
BTC's price this morning stands at $8,895 a rise of $379 with a potential $10,000 return set to arrive before the weekend.
With most the price volatility seemingly over, and a slow bullish rise to now continue for another half-month or so, Express.co.uk spoke to Michael Harris, Director of Financial Crime Compliance at LexisNexis Risk Solutions, on how cryptocurrencies could be used to evade international sanctions, as the move towards government regulation gathers pace.
Mr Harris is concerned that so-called "bad actors" could evade international sanctions like those imposed on Iran, Russia and North Korea, by exploiting the anonymity that the distributed ledger technology behind cryptocurrencies provides.
He said: "This high degree of anonymity makes it possible to transfer huge sums of money across jurisdictional borders without detection."
But how would it work? Mr Harris cites recent reports that Russia is planning to create a "cryptorouble", which could be used to transfer fiat currencies back and forth.
He said: "Virtual exchanges, which allow cryptocurrencies to be transferred between parties and be converted into fiat, i.e. real currencies, are currently not subject to the same regulation as mainstream financial services, so transactions can be anonymous.
"A cryptorouble could therefore, in theory, aid Russian entities in avoiding detection by international authorities when transferring funds. Other state-owned cryptocurrencies, such as Venezuela’s controversial ‘petro’, could also help to overcome sanctions imposed by the United States."
As the G20 plan to discuss cryptocurrency regulation, Mr Harris says there’s no doubt that regulatory authorities need to heighten the level of scrutiny on trading in cryptocurrencies, and it is encouraging to see proposed amendments to the Fourth Anti-Money Laundering Directive bringing virtual currency exchanges into scope.
In the future, he says, "the government, regulatory authorities and financial services sector must work together to identify any money laundering or sanction busting ‘red flags’ when money is transferred into or out of the crypto-sphere and crack down on this illegal activity.”
9.09am - UPDATE - Bitcoin miners fighting a 'hash rate arms race' says JPMorgan
A new report on cryptocurrency from financial giant JPMorgan claims that bitcoin miners are in an arms race and it is driving the cost of minting new bitcoin to all-time highs.
"Hash rate" refers to the amount of computing power used to crunch the massive calculations that process and release new bitcoins. Miners with the most power are the most likely to earn the new coins.
The report said: "The industry is currently in a hash rate arms race, as the current bitcoin price is incentivizing the addition of more and more mining capacity.
"If this growth in hash rate continues (as it likely will if margins stay positive) without an offsetting increase in energy efficiency of miners, average costs globally will continue to rise".
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