Bitcoin Price Plummets Amid El Salvador’s Bitcoin Law Implementation
BTC (bitcoin) price plummeted as El Salvador implemented the Bitcoin Law on Sept 7. In data by Crypto.co, the most dominant cryptocurrency was trading at almost $53K with its price at 52,919 on Sept 6. The following day it tumbled to $47,362 recording a 10.5% drop in its price.
With the implementation of the Bitcoin Law, the government has conducted an upgrade on the Chivo wallet in order to accommodate more users. The update was announced by President Nayib Bukele in a tweet.
Por unos momentos no funcionará @chivowallet, la hemos desconectado mientras aumentamos la capacidad de los servidores de captación de imágenes.
Los problemas de instalación que tuvieron algunas personas fueron por esa razón.
Preferimos corregirlo antes de volver a conectarla.
— Nayib Bukele (@nayibbukele) September 7, 2021
The recent action was contrary to the initial reaction of investors when El Salvador’s BTC (bitcoin) was first announced by Bukele. But in a report by CNBC, Leah Wald, CEO at Valkyrie Investments stated that this is not surprising at all. She stated:
“When this move was first announced, it didn’t have nearly as big of an impact on price as some may have expected it might, possibly because El Salvador’s population is less than New York City’s, but also because the announcement was light on details and people were on the fence about how this was going to be implemented.”
She further adds:
“Transaction fees, processing times, and other hurdles also make this feel more like a beta test rather than a solution to many of the problems plaguing the country’s poor.”
But the country’s bond also suffered a low alongside BTC (bitcoin) according to a report by Bloomberg. Ben Emons of Medley Global Advisors stated that the market action indicates an unwelcome sign that the wide use of Bitcoin may have major implications for El Salvador.
The passing of the Bitcoin Law was also marred with controversy given its hasty approval. A recent survey also reveals that Salvadorans still disapprove of bitcoin as legal tender in the country.
According to reports, 200 bitcoin ATMs were already installed for the implementation of the law and the government even purchased 400 BTC (bitcoin) to be used as airdrop for users who will download the Chivo wallet.
Suspect of $30M Crypto Fraud Pleads Guilty
Michael Ackerman from Ohio pleaded guilty over a $30M crypto Ponzi scheme.
According to reports, Ackerman promised a 15% monthly profit to his unwitting victims. He is facing a 20 years sentence for the crime he committed. He facilitated the crime using a crypto fund called the Q3 Trading Club. He enticed investors to deposit US dollars and receive a 15% monthly yield in return.
On Wednesday, Ackerman pleaded guilty to the charges and admitted to defrauding a total of $30M from his victims according to Audrey Strauss, US attorney for the South District of New York. He stated:
“As he admitted today, Michael Ackerman raised millions of dollars in investments for his fake cryptocurrency scheme by falsely touting monthly returns of over 15 percent.”
He also falsified documents showing that he has a $315M fund in his balance book to gain investor’s trust. But according to the Department of Justice, in actuality, he only has $5M in his funds.
Aside from admitting to his crime, Ackerman also promised to return the $30M he defrauded from his victims. A total of $36M in cash, real estate, and jewelry was forfeited by the authorities believed to be acquired illegally.
Ackerman was also part of a trio who were former financial advisors of Wells Fargo that have scammed clients of the company.
Ukrainian Government Plans to Legalize Cryptocurrencies
The Ukrainian government has a drafted law that aims to legalize BTC (bitcoin) and other cryptocurrencies.
In a press release, Deputy Minister Oleksander Bornyakov stated:
“In particular, the adoption of specialized legislation is going to stimulate the attraction of foreign exchanges to the Ukrainian market.”
He further adds:
“It will become a powerful incentive for the further development of the crypto-sphere in Ukraine.”
The majority of Ukrainians have already embraced cryptocurrencies primarily to protect their assets from asset seizure according to a report by Chainalysis.
In January, the Ministry of Digital Transformation entered a partnership with the Stellar Development Foundation to create a virtual version of the hryvnia – the country’s own version of central bank digital currency (CBDC). Ukraine hopes to become a more competitive country in the Eastern European market with the aid of Stellar.
Canadian-American Pleads Guilty for Money Laundering and Conspiring with North Korean Hackers
Ghaleb Alaumary, a Canadian-American citizen pleaded guilty to laundering money for North Korean hackers facilitated using crypto exchanges and wire transfers. He was sentenced to 11 years of imprisonment ordered to pay $30 million in restitution by a U.S. federal court.
In 2020, members of North Korea’s military intelligence agency were indicted by the Department of Justice for attempting to steal over $1.3 billion through illegal means like extortion and cyberattacks. They were involved in a $100M theft from crypto companies and a cyberattack against Sony Picture as retribution for producing “The Interview” which they claimed put their nation’s leader in a bad light.
A press release by the Department of Justice elaborated how the scheme was carried out by Alaumary and his cohorts.
“Once the ill-gotten funds were in accounts he controlled, Alaumary further laundered the funds through wire transfers, cash withdrawals, and by exchanging the funds for cryptocurrency.
This defendant served as an integral conduit in a network of cybercriminals who siphoned tens of millions of dollars from multiple entities and institutions across the globe.”
The press release further adds :
“He laundered money for a rogue nation and some of the world’s worst cybercriminals, and he managed a team of co-conspirators who helped to line the pockets and digital wallets of thieves.”
The North Korean suspects remain at large and the possibility of litigation is very slim due to the absence of an extradition agreement between North Korea and the US.