Blockchains can be a Boon for Corruption Ridden Accounting Systems in India and the World – BW Disrupt

India stands at the 76th position out of 175 countries on global anti-graft organization Transparency International’s Corruption Perceptions Index.

Blockchain has been termed by the World Economic Forum as a Technology Pioneer; many financial experts call it as “the next best thing after Internet.” Several industry leaders think the impact of this new accounting technology could be as significant as the use of double entry over 500 years ago. Besides being faster and agile than the existing systems, blockchain allows transparency as each and every transaction gets captured on a real-time basis. In fact, Governments, the world over, are looking at the blockchain technology as a preferred platform for eGovernance.

India fares poorly on global corruption rankings

India stands at the 76th position out of 175 countries on global anti-graft organization Transparency International’s Corruption Perceptions Index. Not only that, India has low rankings on ease-of-doing-business world rankings, which are published by the World Bank. According to the report, India stands at 130 out of 189 countries. So, while China is at no. 90, Nepal and Sri Lanka are at 99 and 107, respectively. Data indicate systemic corruption is striking at the roots of India’s development trajectory; thus, preventing the country from realizing its potential. Therefore, methods to combat graft need to be found for India to prosper and become the No. #1 destination for foreign investments and provide safe haven to budding enterprises. Curtailing corruption will remarkably improve its image as a leader among Third World countries.

More at: Blockchains can be a Boon for Corruption Ridden Accounting Systems in India and the World – BW Disrupt

New York City Staffer Sanctioned For Mining Bitcoins at Work – CoinDesk

An employee of New York City’s Department of Education has been disciplined after being caught mining bitcoins on his work computer.

According to a recently published disposition from the City of New York Conflicts of Interest Board, department employee Vladimir Ilyayev admitted to mining bitcoin between for a period of several weeks between March and April 2014. Bitcoin mining is an energy intensive process by which new transactions are added to the blockchain, generating new coins with every block that is created.

Ilyayev is said to have installed mining software that ran at night, while he monitored progress from his home.

The document, which includes a signature from Ilyatev along with those from NYC Education Department counsel Karen Antoine and Conflicts of Interest Board chair Richard Briffault, states:

“I ran bitcoin mining software on my [work] computer from 6:00 p.m. until 6:00 a.m. every night from March 19, 2014 until April 17, 2014, when my bitcoin mining software was shut down by [the Department of Education’s] Division of Instructional and Information Technology”.

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This $4 billion Bitcoin laundering scheme reads like a gripping detective story – Mashable

A Russian man was indicted by a U.S. jury on Wednesday on charges of laundering more than $4 billion through a Bitcoin exchange, Reuters reported.

Alexander Vinnik, 38, and likely operator of popular Bitcoin exchange BTC-e, was arrested in northern Greece on Tuesday, according to the report.

The U.S. Justice Department thinks he used the exchange to launder money for criminals, and ties him to the demise of another popular Bitcoin exchange, Mt. Gox, which was shut down in February 2014 after 850,000 of its bitcoin—then worth about $450 million—went missing.

More at: This $4 billion Bitcoin laundering scheme reads like a gripping detective story – Mashable

Can Blockchain Be Key to Overcoming AML Challenge in Cryptocurrency? – The Cointelegraph

Special Counsel Roy Keidar of law firm Yigal Arnon & Co examines how Blockchain could provide the answer to the anti-money laundering issues that cryptocurrencies face.

In what some are coining a landmark case, an Israeli District Court recently ruled that Israeli banks are not obligated to provide financial services to companies whose primary business is trading in cryptocurrencies, such as Bitcoin or Ethereum.

Landmark case

The Court reasoned that banks should not have to assume the risks associated with providing a financial platform to these digital currency businesses when the leading Israeli authorities on the subject, namely the Central Bank, the Securities Authority and the Anti-Money Laundering and Terror Financing Authority, have been struggling to delineate clear measures to minimize them.

One of the primary risks noted by the Israeli authorities, along with regulators around the globe, is the pseudo-anonymous nature of cryptocurrency. Regulators view the digital token transfer method as a “black box,” low in accountability and virtually impossible to subject to existing anti-money laundering (AML) and anti-terror financing regulations. However, inflexibility may be clouding judgment: built-in features of cryptocurrency, particularly Blockchain technology, have the potential to improve, not harm, AML efforts, even surpassing mechanisms already in place today.

More at: Can Blockchain Be Key to Overcoming AML Challenge in Cryptocurrency? – The Cointelegraph

 

Officials arrest suspect in $4 billion Bitcoin money laundering scheme – Ars Technica

Bitcoin’s decentralized architecture makes it popular with criminal groups.

Police in Greece have arrested a man wanted in the United States for allegedly running a massive Bitcoin-based money laundering operation, according to the Associated Press. Authorities say the 38-year-old Russian man was responsible for converting $4 billion in illicit, conventional cash into virtual currency.

The suspect hasn’t been publicly named, but Reuters got a picture of him being arrested. According to Reuters, he was arrested in the “Greek region of Chalkidiki on Monday on a US warrant.”

The news is a reminder that—like ordinary cash—Bitcoin has a wide variety of uses, both legitimate and illicit. Bitcoin boosters like to focus on potential applications like international remittances, micropayments, and conventional retail sales. But Bitcoin has become the payment network of choice for “dark Web” markets for drugs and other illicit merchandise, from the original Silk Road—shut down in 2014—to the recently busted AlphaBay.

Source: Officials arrest suspect in $4 billion Bitcoin money laundering scheme – Ars Technica

When thieves strike, cryptocurrency investors tremble – CBS News

Cryptocurrency Ethereum has emerged from the shadow of its better-known rival Bitcoin thanks to its skyrocketing price — that has also made it a tempting target for hackers.

Thieves earlier this month stole $10 million from an electronic wallet provide by Coindash, a company that specializes in the kind of blockchain technology used in digital currencies. Another $32 million recently went missing after hackers exploited a vulnerability in an e-wallet from startup Parity.

The price of Ethereum slumped following news of the heists, tumbling more than 15 percent from $258.52 on July 18 to $218.82 on Friday, according to CoinMarket Cap.

Coindash, which was using a so-called initial coin offering to raise funds, plans to compensate victims of the hack. To help stabilize the price of Ethereum, it will also offer bonuses to anyone who holds it for at least six months. According to Parity, there were three accounts compromised in the attack and that the thief is attempting to launder the money through exchanges.

“If anything, it makes people more aware of the pitfalls of coding,” said Luis Cuende, CEO of Aragon, an Ethereum-based corporate management tool, adding that the underlying code that powers the cryptocurrency wasn’t affected by the attack.

Source: When thieves strike, cryptocurrency investors tremble – CBS News

Garza Pleads Guilty: GAW Miners CEO Cops to $9 Million Fraud – CoinDesk

Controversial cryptocurrency executive Josh Garza has plead guilty to one count of wire fraud.

As reported by CoinDesk earlier this week, Garza was rumored to have been preparing the plea, one for charges that stem from his operation of four cryptocurrency companies, GAW, GAW Miners, ZenMiner and ZenCloud, all of which were long suspected of fraudulent activities.

In total, the loss attributed to Garza’s fraud was estimated at $9,182,000. He is now set to be sentenced on October 12, at which time he will face up to 20 years in prison.

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