Kraken Daily Market Report for October 23 2020

Kraken Daily Market Report for October 23 2020

Bitcoin saw a very strong 13% price increase over the past seven days which allowed it to break above the $13,000 handle. At the start of October, Bitcoin managed to penetrate above a symmetrical triangle pattern which was the first sign that a bull run was about to form.

After the breakout, it managed to push as high as $11,600 before stalling. Last Friday, Bitcoin was trading at around $11,200 as it rebounded and started to push higher. It quickly reached the $12,000 level and broke above here on Wednesday. The coin continued upward until resistance was met at $13,000 – where it currently trades.

Looking ahead, once the buyers break $13,000, the first level of resistance lies at $13,200. Above this, resistance lies at $13,416 (1.414 Fib Extension), $13,500, $13,600, $13,815, and $14,000.

On the other side, the first level of support lies at $12,550 (.236 Fib Retracement). Beneath this, support lies at $12,400, $12,125 (.382 Fib Retracement), $12,000, and $11,800 (.5 Fib Retracement).

Ethereum witnessed a strong 10.5% price increase this week as it climbed above $400 to reach $418 today. Last Friday, Ethereum rebounded from the 2019 high at $264 and pushed higher into the short term falling trend line.

Ethereum went on to break this trend line on Wednesday as it surged higher to reach $400. Yesterday, the buyers pushed beyond $400 to spike into the resistance at $421.50 (1.414 Fib Extension). Unfortunately, it was unable to close the daily candle above the lower resistance at $416 (bearish .618 Fib Retracement).

Moving forward, if the buyers break the resistance at $421.50, higher resistance lies at $434 (1.618 FIb Extension), $439 (August 2018 Highs), and $445 (bearish .786 Fib Retracement). Beyond $450, added resistance lies at $462 (bearish .886 Fib Retracement), and $476.

On the other side, the first level of support lies at $410. This is followed by support at $400, $389 (.382 Fib), $377 (.5 Fib), and $364 (2019 High).

Against Bitcoin, Ethereum has struggled this week. On Tuesday, the coin dropped beneath a symmetrical triangle pattern as it fell beneath the 100-days EMA. It continued lower during the week until reaching support at 0.0305 BTC on Wednesday.

It managed to rebound from the support at 0.0305 BTC as it reached 0.0321 BTC today (100-days EMA).

Looking ahead, if the bulls push higher, the first level of resistance lies at 0.0327 BTC (bearish .236 Fib). Above this, resistance lies at 0.0337 BTC (March 2019 Support), 0.0341 BTC (bearish .382 Fib), 0.035 BTC, and 0.0353 (bearish .5 Fib).

On the other side, support lies at 0.032 BTC, 0.0311 BTC, 0.031 BTC, and 0.0305 BTC. Added support is found at 0.03 BTC and 0.0295 BTC (200-days EMA).

Ripple saw a smaller 4.7% price increase this week as it trades at $0.0257. The coin managed to break above a symmetrical triangle pattern during the week but failed to close a daily candle above the $0.261 resistance (bearish .5 Fib Retracement). The buyers must close above this resistance for XRP to start a short term bullish trend.

Moving forward, if the bulls manage to close above $0.261, higher resistance lies at $0.271 (bearish .618 Fib), $0.28, $0.286 (bearish .786 Fib), and $0.295 (bearish .886 Fib).

On the other side, support is first expected at $0.25. This is followed by support at $0.245 (200-days EMA), $0.24, and $0.237 (200-days EMA).

The situation is quite dire for XRP against Bitcoin. The coin dropped from above 2100 SAT at the start of the week as it headed lower to break beneath 2000 SAT and spike as low as 1915 SAT.

The bulls managed to defend the support at 1960 SAT, where the daily candle closed and allowed it to rebound to the current 1983 SAT level.

Looking ahead, if the bulls climb above 2000 SAT, resistance lies at 2035 SAT, 2130 SAT, 2200 SAT, and 2260 SAT.

On the other side, support lies at 1960 SAT, 1915 SAT, 1865 SAT, and 1800 SAT.

Bitcoin Cash saw a 4% price hike this week as it reached the $278 (bearish .382 Fib) resistance today. The coin pushed higher from $240 during the week which allowed it to create a fresh October high at $278 today.

Looking ahead, if the buyers continued above $278, resistance lies at $285 (1.272 Fib Extension), $294 (1.414 Fib Extension), $300, and $307.

On the other side, support is first expected at $270. Beneath this, support lies at $265, $260, $250, and $240.

Against Bitcoin, BCH dropped from 0.022 BTC to reach the September support at 0.02 BTC during the week. From there, it rebounded higher to trade at the current 0.021 BTC level.

Moving forward, if the buyers push beyond 0.021 BTC, resistance lies at 0.022 BTC and 0.023 BTC. Additional resistance is then expected at 0.0241 BTC (bearish .236 Fib), 0.025 BTC, and 0.026 BTC.

On the other side, the first level of support lies at 0.02 BTC. Beneath this, support is located at 0.0191 BTC (downside 1.272 Fib), 0.019 BTC, and 0.0181 BTC.

Litecoin saw a serious 12% price increase over the past week as it reached the resistance at $56 today – provided by a bearish .5 Fib Retracement. The coin had found support last week at the $46.83 level and rebounded from here on Wednesday to reach the current resistance.

If the buyers manage to break the resistance at $56 (bearish .5 Fib), higher resistance is located at $57.86, $59 (bearish .618 Fib), $60.27 (1.272 Fib Extension), $61.91 (1.414 Fib Extension), and $63.

On the other side, the first level of support lies at $55. Beneath this, added support is found at $54, $52, $50, and $49.

Against Bitcoin, Litecoin dropped to a fresh 2020 price low this week as it hit the support at 0.00391 BTC. From there, the bulls fashioned a rebound higher to reach the current resistance at 0.0043 BTC (bearish .236 Fib Retracement).

Looking ahead, if the buyers can break 0.00343 BTC, resistance first lies at 0.004547 BTC (October Highs). This is followed by resistance at 0.00455 BTC, 0.00476 BTC, 0.00488 BTC, and 0.005 BTC.

On the other side, support is first expected at 0.0042 BTC. This is followed by support at 0.0041 BTC, 0.004 BTC, and 0.00391 BTC. Additional support lies at 0.0039 BTC and 0.00363 BTC.

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Author: Published 3 hours ago on October 24, 2020

By Republished by Plato

Money Reimagined: 'They Starve.' The Ugly Side to the US's KYC-AML Obsession

Money Reimagined: ‘They Starve.’ The Ugly Side to the US’s KYC-AML Obsession

At a 2015 blockchain event, Nairobi-based bitcoin pioneer Elizabeth Rossiello answered an audience question about the impact on Somalians of a recent shutdown in remittance inflows after the U.S. government had labeled the country a “high-risk jurisdiction.” The AZA Group CEO’s answer was blunt: “They starve.”

Ever since then I’ve come to see governments’ demands that banks use know-your-customer (KYC) identification models to meet anti-money laundering (AML) goals as mostly counterproductive.

Western governments thought they were starving East African terrorist groups like Al-Shabaab of funds, but the terrorists still mobilized money. Instead, the measures starved the local population of food, creating a ripe recruiting environment for the terrorists. 

This story is relevant because Sunday marks the 50th anniversary of the Bank Secrecy Act, or BSA, the landmark U.S. law that required banks to identify their customers and monitor their transactions. 

Over time, spurred by events such as the September 11 attacks in 2001 and the 2008 financial crisis, the BSA rules have become stricter and wider. They’ve also spawned other rules for non-bank payment providers, and given rise to powerful agencies such as the Financial Crimes Enforcement Network (FinCEN). And they’ve provided the model for an international monitoring system that incorporates pretty much every financial institution in the world. alistair-macrobert-8wmflrtlm2g-unsplash

Sadly, there’s very little discussion of all this financial surveillance’s impact on people’s lives. Courtesy of Edward Snowden’s revelations about the National Security Agency monitoring our online activity, people know about the NSA. They know little of the BSA.

Perhaps people accept the trade-off between losing privacy and protecting society from evil-doers. Still, this system carries enormous costs. 

It contributes to financial exclusion. According to a 2017 World Bank report, 1.7 billion adults are “unbanked” worldwide. For people in underdeveloped countries with untrusted state-run identity systems, the system makes them ineligible for bank accounts.  

It also contributes, more broadly, to “derisking.” This trend emerged after the 2008 financial crisis, when new compliance rules imposed heavy new costs on banks, leading them to reduce exposure to countries where profitability was judged too small to be worth the risk. (Many saw the $1.9 billion fine imposed on HSBC in 2012 for facilitating Mexican drug cartels’ money laundering as a cautionary tale.) 

As a result, local banks in many smaller economies – including relatively advanced ones in the Caribbean – now pay more for their critical correspondent banking relationships in the U.S., costs they pass onto their customers. 

In these ways, AML-KYC models impose massive costs and foster inequity in the global economy. 

In this pandemic-interrupted year, those costs will be felt even more, as remittances from rich countries to poorer ones are expected to drop by a record 19.7 percent to $445 billion, according to the World Bank. Those flows have long been seen as a major factor in poverty reduction, making AML-KYC compliance a direct barrier to prosperity.

Regulators counter that financial crime is a big, urgent problem – the United Nations Office on Drugs and Crime has estimated, for example, that between $800 billion and $2 trillion is laundered by criminals every year. But a trove of leaked FinCEN documents last month showed that large banks flagged trillions of dollars of suspicious transactions to authorities but continued to do business with those customers. 

What’s more, the high cost of compliance means those bigger banks, along with well-established money transmitters such as Western Union, enjoy a barrier to entry against digital startups, for whom upfront compliance costs can be virtually insurmountable. 

In sum, a AML-KYC dragnet with huge holes in it serves the interests of incumbents. It does little to stop sophisticated big criminals from moving money around but prevents honest little guys from participating in transactions, all while protecting outdated financial dinosaurs from competition. 

Bitcoin was, in part, inspired by a desire to challenge this model. By resolving the trust problem and creating the digital equivalent of cash, it enabled peer-to-peer online payments between strangers. No longer did you need to identify yourself, no longer did you need an intermediary. 

This terrified law enforcement, which relies on financial intermediaries to do its police work. So, amid ongoing accounts of criminals using bitcoin, regulators went after the centralized, custodial exchanges that people use to move crypto funds in and out of the fiat banking system, and developed rules that roped that industry into the surveillance system. The multilateral Financial Action Task Force’s new “travel rule” has now internationalized this approach. 

Meanwhile, U.S. authorities have demonstrated they will apply the BSA to crypto software providers, most notably with the giant fine imposed this week on coin mixer Helix, whose privacy-protecting features were allegedly used by AlphaBay, the defunct “darknet” market.

That case underscores the far-reaching power this international system affords the U.S. government. The dollar’s reserve status means foreign banks need to maintain correspondent banking relationships with U.S. banks, which then become the gatekeepers of the world – and, effectively, agents of Washington’s interests. 

Now, crypto-inspired technology is providing more tools for people, and even governments, to avoid the U.S. gatekeepers. This week, Russia’s central bank said it could use a digital ruble as a tool to avoid U.S. sanctions. 

This system is broken. It has become a leviathan – too big, too comprehensive. Giant fines have skewed the risk-versus-payoffs for banks, which impose compliance on everyone regardless of size. (This is despite AML guidelines typically allowing ID exemptions for transfers of up to $1000, and in the U.S. up to $3,000.)

It’s time to scale down, not up.

“There is a principle in design that in order to optimize the system, to maintain the most positive outcome, we have to sub-optimize the sub-systems,” crypto compliance expert Juan Llanos said during this week’s episode of the Money Reimagined podcast. “That means we may have to learn to live with a little money laundering. We might have to live with the risk that someone in Somalia might be a criminal trying to get through the cracks.”

A more open mind from regulators toward cryptographic technologies that help regulators manage system-wide risks without imposing strict identity requirements on everyone would also be welcome. Research by the MIT-IBM Watson AI Lab into how to identify system risks within otherwise anonymous bitcoin transaction flows offers one potential way forward. 

The test is whether policymakers can respond to the human cost of the existing approach.

“Is this the system that really promotes prosperity in our world?” C-Labs General Counsel Brynly Llyr asked during the same podcast episode. “I mean, yes, money laundering is very serious, tax evasion is very serious, but when we look at the remittance markets and the folks who are relying on … transfers of $50 and $100 … is this really what we want our system to be cracking down on? Is this the best use of our resources?”

Bitcoin surged over $13,000 this week and, for once, the move was fueled not by the “risk-on” inflow that follows a rise in equity prices, but by some real news: PayPal’s announcement it would allow people to use cryptocurrencies inside its payment app. Still, the bigger meta-narrative around digital currencies remains tied to the fate of the world’s dominant fiat currencies. As Money Reimagined has explored previously, much will depend on the titanic monetary battle between China and the U.S. 

So, I decided to check in on two charts of each country’s currency, using the best non-correlated measures available. That meant avoiding the circular relationship in which the Chinese yuan is quoted in U.S. dollar terms and vice versa and, instead, using a standardized measure of each currency’s performance against a trade-weighted basket of multiple currencies. What that gave me was a lesson in how powerful central banks are.


The image above is of the Federal Reserve’s trade-weighted dollar index. It offers an unsurprising but telling story: After the initial COVID-19 panic of mid-March, when a global scramble for dollars sent the greenback soaring against all currencies, the Fed’s unprecedented monetary expansion efforts sent it back down again. 

What’s remarkable is that, with the world still in a deeply troubled pandemic-choked state, the dollar has continued to fall. Does this reflect waning international confidence in the U.S. or merely a belief that the Fed will keep the money printer in overdrive but save the world in the process? Too soon to say.


This one is based on the trade-weighted yuan index produced by the China Foreign Exchange Trade System (CFETS), the trading and foreign exchange division of China’s central bank. The index’s spike in March might seem odd to the uninformed observer because that’s when the world wanted dollars. Those panicked investors weren’t scrambling to stockpile the illiquid currency of the country then worst-affected by the pandemic; they only wanted greenbacks. 

But the explanation is quite simple: the People’s Bank of China’s interventionist management of its currency has for decades been dictated by a tightly managed “dirty peg” to the dollar. So when the dollar spikes against everyone else, the yuan does as well.

Why, then, did the yuan index rise after the mid-summer, even as the dollar continued to fall? Because the PBOC deliberately intervened to boost the local currency versus the dollar. Sure enough, the USD-CNY exchange rate has dropped from CNY 7.17 in late-May to CNY 6.66 now. 

Is this to discourage capital outflows? Maybe it’s to offset the need for softer domestic interest rates to boost local lending, which by extension equates with a Chinese bet on the domestic economy rather than on the nation’s exporters, which favor a weaker currency. Or is China trying to take advantage of waning trust in American global leadership to assert the strength and appeal of the yuan and boost its own international standing? Or, all of the above? 
What’s notable is that the yuan’s rising value coincides with the rollout of China’s digital yuan, which, although only in its experimental phase, is making waves worldwide. Stay tuned.

ASIA’S AMAZON. A prediction from a cryptocurrency entrepreneur stood out this week. Not another bitcoin $100,000 forecast but this two-part one, which CoinFlip Chief Operating Officer Ben Weiss shared with Business Insider: The next biggest company in the world will be blockchain-powered and it will be based in Asia. While there are strong arguments why both parts of that of that bet could prove wrong, the logic behind it is interesting to unpack. 

Will the next Microsoft/Google/Amazon be built on blockchain technology? One of the problems with that is a proper public blockchain cannot be owned by a single company, and if one were to exist it would defeat the core purpose of multiparty governance. But, of course, applications that are built on top of a blockchain or which tap into users of one or more blockchains can be for-profit, which is essentially the model behind successful crypto companies such as Coinbase. 

Notwithstanding those successes, and despite the billions that venture capitalists have invested in blockchain startups, it’s fair to say the high-profit “killer app” hasn’t yet been uncovered. And a good reason for that is the open-source, public foundations of blockchain technology make it hard for entrepreneurs to develop businesses with defensible market positions. 

Yet, it took the internet’s original entrepreneurs some time to figure out how to make money on the web. If we believe that, in one form or another, blockchain technology will provide the scaffolding for the financial system of the future, then it’s reasonable to assume that someone will figure how to make a lot of money with it.

If so, where will this happen? Weiss argues the regulatory clarity in places like Singapore, as opposed to the ambiguity and sometimes hostility from regulators in the U.S., make for an environment that’s much more conducive to future blockchain businesses. Certainly, China is betting that by supporting a nationwide Blockchain Services Network, which includes links to public blockchains, it will create the landscape for the next big company – perhaps more of an Alibaba than an Amazon. 

Here, too, there are parallels with internet history. One reason why the internet took off in Silicon Valley is the U.S. government took proactive steps to open up innovation in the internet industry. First there was the 1996 Telecommunications Act, which forced telecommunications providers to open their networks to competitors, which meant startups could now use that infrastructure to offer broadband services upon which e-commerce could thrive. A similar effect was felt by the U.S. government’s antitrust lawsuit against Microsoft. There seems to be little such vision employed in the U.S. right now to pave the way for the financial transformation that cryptocurrencies and blockchain portend. 


It’s too early to say whether the big, new Department of Justice lawsuit against Google this week (see Relevant Reads) signals a pro-innovation U.S. strategy to force a more decentralized internet or more of an ad hoc action.  Either way, on balance, Asian governments like Singapore’s or China’s are proving to be far more assertive in laying out a path for a more decentralized future. This is not to say there won’t be another Gates, Jobs, Bezos and Zuckerberg emerging out of the U.S. But it would also be naive to assume the next wave of business innovation will be in the U.S. and not in some other region. 

ASIA’S EURO. Still with Asia, the uncertainty around the future of global finance and the rise of digital currency prototypes is reviving a two-decade idea: that the region should create a common currency akin to the euro. That’s the case made by Japanese economists Taiji Inui, Wataru Takahashi, Mamoru Ishida in the wonky economist blog Vox EU. The trio argue that although Asian countries have learned how to better weather currency volatility than they did in the late-1990s, they remain vulnerable to capital flow shocks because of the asymmetric power of the dollar in the global financial system. So, they’re calling for an “Asian digital common currency as a multilateral synthetic currency comparable to the euro.” 

If that sounds familiar, it should because former Bank of England governor Mark Carney, in a provocative speech last year, called for a similar solution to the problem of dollar dominance, but for the entire world. I’m not sure why, following the well documented problems the eurozone faced earlier this decade with the incompatibility between monetary union and political disunity, another region would want to replicate it. Perhaps regional governments would be motivated by geopolitical interests to keep China in check much as France supported the euro as a way to forestall German aggression. Either way, if it were to arise it would put a new spin on the idea that the post-dollar age will be marked by one of competing digital currencies: The battle might not play out between nations but between regions.

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Author: admin

NIA charge sheet alleges Bitcoins used by IS operatives to fund terror activity - india news

NIA charge sheet alleges Bitcoins used by IS operatives to fund terror activity – india news

The National Investigation Agency (NIA) has claimed in a charge sheet filed last month that Islamic State operative Jahanzaib Sami had arranged a Bitcoin wallet address, through a British contact, on which he asked associates to deposit funds — the first documented allegation of the use of cryptocurrency in terror activity in India.

Sami, 36, and his wife Hina Bashir were arrested in Delhi on March 8 for allegedly planning to carry out attacks in India. According to the charge sheet, they received the Bitcoin address on Threema, an instant messaging app, from an account called Caged Pearls, which belongs to a British woman based in Syria.

“She had given her Bitcoin wallet address to Sami and requested him to deposit money in that account. He had asked his associates to deposit funds in this wallet address,” reads the NIA charge sheet, which HT has reviewed.

He also got in touch with a Libya-based IS operative who possessed an ID ‘Sech Tech’, to discuss arranging funds through “blockchain technology”. Cryptocurencies such as Bitcoins leverage a technology known as blockchain, a decentralised, distributed ledger that tracks transactions. These are anonymous and nearly impossible to track, and are commonly used in dark web transactions. The charge sheet said Sami discussed the possibility of using this to source weapons and explosives raw material.

According to the charge sheet, Sami planned to carry out 100 bombing in a single day.

Sech Tech, a member of IS’s intelligence and media unit, told Sami that he works in dark web and provides Bitcoins for funding of the outfit, the NIA said.

“They also discussed arranging funds through stolen credit cards for procuring weapons,” the charge sheet said.

The increasing use of cryptocurrency by terror organisations like IS and Al-Qaeda to fund their activities has worried security and intelligence communities across the world. The US Department of Justice, on August 13 said it seized millions of dollars’ worth of cryptocurrency this year, and 300 of the accounts belonged to IS, Al-Qaeda, and the military wing of Hamas.

People familiar with the NIA probe said this may be the first time any terror activity in India has been linked to Bitcoins.

“We are trying to unearth more details,” said an officer who asked not to be named.

The NIA charge sheet also alleges that Abdullah Basith, a key IS member lodged in Tihar jail since August 2018, was using smartphones inside the prison for almost 10 months between June 2019 and February this year to interact with Sami and several ISIS commanders abroad – including Maulvi Abdullah, head of Islamic State Khorasan Province (ISKP), handler Huzaifa-al-Bakistani, Abu Usman-Al-Kashmiri (Head of Indian affairs of ISKP), Abu Umar, Munasib Bhai and Abu Algama from inside Tihar jail.

Huzaifa and Umar were killed in Afghanistan while Kashmiri was arrested by Afghan security forces earlier this year after an attack on a gurdwara in Kabul in March. NIA is investigating the Kabul attack as well and is likely to visit Afghanistan soon.

The charge sheet states that Basith, from Hyderabad, had strong connections in IS since 2016, and first procured a phone with a SIM belonging to an Indian service provider in June 2019. He used it to contact Abu Umar, the in-charge of Nida-e-Haq (the official Urdu media of IS) on Telegram app. This phone was detected by jail authorities in September and seized. Then, in November 2019, he was transferred from Jail number 8 to 3 where he obtained another phone with a SIM card. This phone was traced in February this year by jail authorities, according to charge sheet.

From jail, he radicalised some young Muslims selected by Sami, and motivated them to make graffiti at public places against CAA/NRC (Citizenship Amendment Act/National Register of Citizens), according to the charge sheet.

“Investigation also revealed that Basith’s wife received funds sent by Huzaifa Al Bakistani while he was in jail,” chargesheet said. While in jail, Basith had also told Sami that he had plans to radicalise Muslim persons in prison to join the ISIS, it added.


Author: News Bureau

Kraken Daily Market Report for October 23 2020

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