BTC-E down, Google invests in Cryptos, Blocksize drama continues....

BTC-e operator arrested

One of the oldest cryptocurrency exchanges is no longer online after an investigation lead to the arrest of Alexander Vinnik, operator of the exchange. BTC-e was one of the first exchanges to allow trading of fiat to digital currency. Many early crypto traders remember the troll box, where irrational exuberance was constantly on display. As part of their ongoing counter attack on alleged Russian cybercrimes, the US used their global reach to arrest Alexander. It is truly amazing how the US government can arrest a Russian citizen in Greece for “financial crimes.” Its another example of the dominance the US regulators have over the global financial system.

US Regulators approve cryptocurrency exchange.

The Commodity Futures Trading Commission has granted LedgerX approval to clear derivatives. This will make it the first federally approved cryptocurrency exchange. This will allow intuitional investors an opportunity to invest in the emerging digital currency space. LedgerX will be the first to offer bitcoin and Ethereum options regulated by the CFTC. While investors will be able to bet for or against bitcoin, the increase in volume from new investors is likely to be long term bullish for bitcoin and cryptocurrencies. When a crisis appears in the global financial system, like Greece or another bubble, investors will be able to use bitcoin and other digital currencies as a safe haven. In the past, we’ve seen some signs of this but the access to the immature bitcoin markets has been very limited and LedgerX will help change this. It’s interesting to note that the parent company of LedgerX is venture capital firm owned by Google.

Bitcoin Cash

Many are surprised to hear that the split in bitcoin is ongoing. A group of investors and miners have announced that they will be moving forward with forming another bitcoin currency. They are calling it Bitcoin Cash and it will be a fork of the original bitcoin blockchain. This move would seal the split that has been building for years now. Roger Ver is one of the supporters of the new bitcoin cash. He is an influential bitcoin promoter and investor. Bitcoin Cash is will increase the limit on the number of transactions that can be processed by the Bitcoin network every 10 minutes. Currently, the network can process only blocks of transactions that are smaller than one megabyte, which allows for roughly five transactions in a second. Those on the core side think that an increase in block size will make it harder for individual users to process the blocks and easier for a small number of companies to take control of the Bitcoin network. The core side has offered SegWit as a solution. While bitcoin cash does not yet exist, one can already invest in BCC futures. At the time of this writing BCC futures were trading around $415. While most miners have announced they will remain on the core blockchain, nothing is preventing them from changing in the future making this a drama that will continue for some time to come.

@fractal bounce