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crypto-currencies

This ultra-simplified explanation clarifies the absolute basics of a subject that has become shrouded in myth and mystery.

The lockchain, crypto-currencies (or cryptocurrencies) like bitcoin, distributed ledgers and smart contracts are, actually, stuff you already know..

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The single over-riding principle that makes cryptocurrency accounts attractive to criminals is not the supposed anonymity (that argument is a done deal except for those who don't know what they are talking about) but the fact that, by design, there is, literally, no single body or person with regulatory authority.

What that means is that, while governments and courts (at the behest of victims) can make Asset Recovery Orders, or, as the US government is trying to do with its listing on OFAC of crypto-currency accounts that it claims it has reasonably identified as connected to listed persons, these are after the fact restrictions and to try to enforce them is, by reason of the essence of the distributed ledger, only ad hoc....

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This morning, I received, in one of my corporate mailboxes, a spam which is disturbing on several levels, none of which are relevant to the core arguments in this piece so I've added the text in a footnote for readers' information.

What is relevant, and not disturbing, is that it demands payment to a specific bitcoin account.

This is it: 1JXuMq6sbL95XnrcDEsrZTCvvRjB52RCAD.

Governments and others are focussed on the person behind the account. There is another way, says Nigel Morris-Cotterill

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On 19th March, the USA's Office of Foreign Assets Control, a division of the US Treasury, which publishes lists of persons sanctioned under trade and economic policies, under policies that are political including but not limited to national security plus those under the USA PATRIOT Act announced that it was to include, where it has it, cryptocurrency data relating to subjects. Just what are they planning and what will it mean for crypto-currency holders and exchanges and businesses such as online auctions and advertising platforms?

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There is something off here: you can use your credit card to buy pornography of the most awful and depraved kinds ,you can use your credit card to place illegal wagers or take part in illegal gambling, you can use your credit card to buy drugs, legal and illegal from illegal or at least dubious sources or to put money at risk in pump and dump schemes and the banks and credit card companies are adamant that they cannot identify and prevent such transactions. And yet, when their own business models are under threat, suddenly they are able to identify and prevent the purchase of cryptocurrencies such as bitcoin, Ethereum and Ripple plus many, many more.

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AUSTRAC statement

Are you a digital currency exchange provider?
16 January 2018 (updated 18 January)

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Kuala Lumpur, 5 January 2018
Media Statement on Initial Coin Offerings

Following a public statement released on 7 September 2017 regarding Initial Coin Offerings (ICOs), the Securities Commission Malaysia (SC) has noticed an increase in activities by new ICOs to solicit investments in crypto-currencies from the public at large, including senior citizens.

The ICO, or initial coin offering, is causing furrowed brows at regulators. It's a fascinating concept and governments are split: should they regulate it on the hoof or, as China has done, ban it until they can work out what do to about it? Or should they pretend it's not happening?

All three approaches are being adopted.

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