Crypto Craze: A scam or not?

The crypto craze has been going strong for a few years now, but it's still unclear if it will continue to grow or fizzle out. This week saw news that Binance, one of the world's largest digital coin exchanges, is under investigation by the U.S. Department of Justice and Internal Revenue Service for allegedly failing to implement anti-money laundering (AML) and know-your-customer (KYC) requirements, according to a report from Bloomberg today.

Binance, one of the world's largest digital coin exchanges, is under investigation by the U.S. Department of Justice and Internal Revenue Service for allegedly failing to implement anti-money laundering (AML) and know-your-customer (KYC) requirements, according to a report from Bloomberg today.

Binance is based in Malta but originated in China where it was founded by Changpeng Zhao who now serves as its CEO. The exchange currently trades over $1 billion worth of cryptocurrencies per day with more than 150 million users online at any given time—a significant number for such an early stage exchange platform that doesn't yet have an official website or brand identity beyond its logo (which may or may not be tied to anything).

Binance is based in Malta but originated in China, but CEO Changpeng Zhao reaffirmed that the company will not be opening its Chinese doors anytime soon due to an unfavorable regulatory environment.

"We are not going to open our doors for trading on the mainland," he said. "It's very complicated."

The Financial Action Task Force (FATF) is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering. It has grown from a multilateral body with 33 members in 1995, to 69 member jurisdictions and three regional organizations today.

In its latest report published in July 2019, FATF recommended that governments should take measures to restrict or prohibit financial institutions from providing services for crypto-assets, including stablecoins and cryptocurrencies. The recommendations also include improving AML/CFT practices at all stages of product development; establishing clear rules on how banks should assess customer risk profile; enhancing anti-money laundering controls related to crypto exchanges; tracking suspicious transactions within digital wallets; monitoring bitcoin transactions for misuse by criminals as well as terrorist groups or others involved in criminal activity.

The Federal Reserve Bank of New York (FRBNY) released findings on Wednesday showing that 73% of millennials say they are familiar with bitcoin.

The FRBNY’s study also found that millennials were more likely to have used the cryptocurrency than other generations. In fact, nearly 80% of those who have made a transaction using bitcoin said they took advantage of it at least once in their lifetime.

Additionally, a majority (57%) had a positive view of the technology underlying it — meaning they believe blockchain has great potential for applications beyond just currency transactions and currency exchanges."

The RCMP's press release, published on Wednesday, said that the agency had charged 49 people as part of a large-scale crypto fraud case in Canada. The suspects are accused of stealing more than $500 million from investors around the world through a variety of fraudulent schemes including Ponzi-like scams and pump-and-dump schemes.

The RCMP said that they had also been able to recover some $21 million worth of cryptocurrency assets belonging to those indicted. According to CBC News, this is nearly half of what was stolen overall but still represents only about 0.01 percent of all cryptocurrencies trading at any given time -- which means there are likely hundreds or thousands more victims out there who have yet to come forward with their stories

The Internal Revenue Service named Justin Flory as its new chief for cryptocurrency enforcement this week, according to a document provided to Cointelegraph by the agency on Tuesday.

Flory has been the head of the IRS' criminal investigations division since 2017, and he has also served as chief counsel for criminal investigations at both the IRS and Department of Justice (DOJ).

The group, called the Securing America's Internet of Value Coalition and led by Garlinghouse, aims to promote self-regulation in cryptocurrency markets.

"Cryptocurrency exchanges around the world have been working together to create a consistent set of rules that will help protect consumers," said Garlinghouse in an interview with CNBC. "And I'm proud that we're getting more than 50 percent of all crypto exchanges on board."

The craze around cryptocurrencies has created a lot of hype, but is it all hype? Like any currency, it’s not without its risks. The volatility of the market can make it hard to plan for your future with crypto-based investments and many people are already seeing their money disappear due to poor timing or bad luck. However, if you do decide that crypto is right for you then there are things you should know before jumping into this market!