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Bitcoin Price Rejects 100-Week MA, So Is the Pre-Halving Pump Over?

The volatility and volume in the Bitcoin (BTC) markets dropped down over the past week as the price of Bitcoin relatively stabilized. Stabilizing markets with decreasing volatility and volume usually means that spectacular movements will come back to the markets shortly. 

However, what should investors expect from the markets over the short-term? The weekly candle closed below the 100-week moving average, which is a strong signal for the bullish/bearish momentum of the markets.

Crypto market daily performance. Source: Coin360

Bitcoin’s weekly candle closes below 100-WMA

The weekly candle was unable to close above the 100-WMA, which is a crucial indicator for bullish/bearish momentum. The moving average is a significant indicator of higher time frames, as the 100 and 200-WMA are often used in equity markets to show the bullish and bearish momentum of the markets.

BTC USD 1-week chart. Source: TradingView

For instance, the 100 and 200-WMA have been providing support for the crypto market throughout the whole bull cycle of 2014-2017. Similarly, the 200-WMA has provided support for the equity markets since 2009.

Alongside the close below the 100-WMA, Bitcoin price couldn’t close above the horizontal resistance level of $6,900-$7,300.

From a bullish perspective, a crucial breakout has to occur above $6,900-$7,300. Once the price of Bitcoin maintains this area for support, the 100-WMA can be classified as support. Such a move would also warrant further upwards momentum towards $9,500 and the possible start of a bull market.

However, a breakout didn’t occur, which means that support levels are still on the table. 

The support levels on the weekly timeframe are structured in two big blocks. One is found at the $5,000-$5,200 level, just beneath the 200-WMA. The second one is found between $3,700-$4,100, which is confluent with the 300-WMA. These areas should be watched for support if Bitcoin starts to retrace.

Daily candles moving in a narrow range 

BTC USD 1-day chart. Source: TradingView

The 1-day chart is showing that the price of Bitcoin is moving inside a narrow and indecisive range.

It’s also showing that the price rejected massively at the $7,400 resistance zone, after which a drop towards the support of $6,600 occurred. This level is currently holding, but on the other hand, the $6,900 level is acting as resistance here as well.

A break below the $6,600-6,700 level with a candle close on the daily timeframe will make the markets target the area around the monthly level of $6,250-$6,300 or even $5,800-$5,850. 

However, a clear break and flip of the $6,900-$6,950 level would mark continuation, and then all eyes are on $7,600-$8,000 as the next primary level to go for.

Total market capitalization holding the $185 billion support

Total market capitalization cryptocurrency 1-day chart. Source: TradingView

The crypto total market capitalization is showing that the market cap is holding support at $185 billion, which is a massive support to keep. 

The chart is also marking a substantial area of resistance around $205-$220 billion, which is crucial for bulls to break to see continuation towards $240 and $280 billion. Aside from that, the 100-Week MA wasn’t broken past week either on the total market capitalization.

Similarly to the Bitcoin chart, a breakthrough below $185 billion would likely lead towards a significant drop, and eyes should be on $153 and $131 billion next.

Total altcoin market capitalization cryptocurrencies 1-day chart. Source: TradingView

The altcoin market capitalization is showing a similar picture of the total market capitalization. The $60-$62 billion level is crucial and needs to hold. Once the market capitalization breaks below this level, a further downwards move towards $50 and $44 billion are likely to be expected.

However, holding the support level at $60-$62 billion and a retest of the resistance area is next to occur. That resistance area can be found at $73-$76 billion, which is confluent with the 100-WMA as well.

Bullish scenario 

BTC USD 6-hour bullish chart. Source: TradingView

The bullish scenario for Bitcoin has two perspectives. The first, and probably most reliable, one would be a break of the $6,900-6,950 level, which automatically leads to a breakout of the small downtrend. 

Structuring a support/resistance flip of the $6,900-6,950 level would indicate buying pressure and further upwards momentum. Such a breakout would be providing additional targets to be the $7,200, $7,600 and $8,000 levels as these are the central zones. 

In the short term, the second perspective would be a double bottom structure in the $6,600 zone, after which a breakout of the downtrend occurs. If such a double bottom occurs, a breakout upwards would also indicate potential movements towards $7,600-$8,000.

Bearish scenario

BTC USD 6-hour bearish chart. Source: TradingView

The bearish outlook is straightforward and simple in structure. If the price of Bitcoin can’t break through the slight downtrend and the $6,900-$6,950 resistance level, a further downwards drop is expected to occur in the coming week.

Through that perspective, levels to be watched are the $6,600 level for a possible double bottom structure, but mainly the $6,350 area. This level is a monthly level, which should be expected to provide a substantial support short term. 

Breaking below the $6,350 level would create a significant volume trigger to the markets as the dropdown starts to accelerate. The next areas to look for will be $5,600-$5,800 and after that $4,800-$5,200. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Craig Wright Abandons Libel Suit Against Adam Back, Pays All Legal Fees

Crag Wright, the self-proclaimed Satoshi Nakamoto and chief scientist at NChain, has dropped a libel lawsuit against Adam Back over the Blockstream chief executive’s assertion that Wright was fraudulent in claiming to be the creator of Bitcoin (BTC).

Wright filed the complaint alongside similar suits targeting Ethereum cofounder Vitalik Buterin, Bitcoin.com founder Roger Ver, podcaster Peter McCormack, and Twitter user ‘Hodlnaut’ one year ago.

Craig Wright drops libel suit against Blockstream CEO

On April 12, Adam Back tweeted that Craig Wright had abandoned his libel suit. Back stated that Wright’s representation “declined to give any explanation of why Craig retracted.” 

The Blockstream CEO also notes that Wright agreed to reimburse all legal fees he incurred — describing the move as strange given that it is “reasonable costs” of between 65% and 75% is the legal standard. In total, he estimates that the exercise cost Wright upwards of $25,000. 

After agreeing to dismiss the case, Back states that he received roughly $8,400 “by wire the very next business day.” Back adds:

“On the plus side I have to thank Craig for paying for a very informative 2hr+ briefing on latest UK libel law trends, and hilarious and detailed briefing on the case vs @PeterMcCormack from legal experts at RPC. (Who were barely stifling smirks at the craziness much of the time.”

In response to the ruling, McCormack tweeted: “Me next.”

Wright pays Back’s legal costs in full

In July 2019, the High Court of England and Wales dismissed the libel suit against Roger Ver over lack of jurisdiction. Ver was served with the $125,000 lawsuit in May 2019, to which he quickly responded with a video message stating: “Craig Wright is a liar and a fraud, so sue me, again.” 

In January 2020, the U.K. High Court also ruled that it did not have jurisdiction over the suit against Hodlonaut, asserting that the case must proceed in Norway instead.

Vitalik Buterin did not respond to the letter sent by Wright in April 2019, and no update appears to have taken place regarding the case since.

Justin Sun Accused of Bribing His Way to the Top of the Steem Hierarchy

Major Steem stakeholder Dan Hensley has levied heavy accusations at TRON founder and CEO Justin Sun. According to Hensley’s April 8 writeup, Sun “bribed” his way to the top of the Steem hierarchy with “money, power and users.”

As Cointelegraph reported in early March, Steem was the subject of what many supporters deemed a hostile takeover by Justin Sun. Hensley’s latest allegations shed new light on how the TRON founder allegedly influenced prominent Steemians into doing his bidding. A TRON representative declined to comment on this story. 

In a conversation with Cointelegraph, Hensley described Sun’s intention to circumvent established community voting rules. Hensley said:

“Justin was losing the voting war halfway through and started offering people $2,500 each month to run a witness node for him on Steem. I own a dApp called 3speak that was on Steem, he offered us money, power and users.”

Steem’s proof-of-stake voting war

The “war” in question was the voting procedure used to select 20 delegated witnesses to oversee the Steem blockchain. In Steem’s delegated proof-of-stake model, coin holders make their voices heard by staking funds with the witness that they feel best represents their interests. 

According to Hensley, Justin Sun sought to slice through Steem’s decentralized voting model by paying users to vote for witnesses that he had set up himself. Hensley accused Sun of bribery:

“He said all we had to do was get people to stop voting for the community witnesses and vote for his witnesses. We refused. He also was bribing users in Discord saying anything they wanted to hear for votes.”

Neither party has so far publicly shared screenshots of these conversations to confirm their veracity. Even so, the allegations are significant in that Hensley is making them under his own name, writing up his experience in detail, and publishing it online.

In Hensley’s opinion, Steem’s legitimacy as a decentralized blockchain has been decimated by Sun’s takeover. He went so far as to suggest that Sun’s domination of the Steem blockchain has rendered the STEEM cryptocurrency a centralized security:

“He [Sun] turned STEEM into a centralized security, all of the witnesses are propped up by him. He calls them “community” witnesses but he votes from them with secret accounts that I can prove belong to him.”

The lineup of Steem witnesses has changed dramatically since the Justin Sun saga began. Former Steem witnesses claim they can link the new lineup directly to Justin Sun himself, although no hard proof has been forthcoming thus far.

Steem witnesses censored

The drama began in March when Binance, Huobi and Poloniex used their customer’s staked funds to vote for Justin Sun’s new Steem witnesses. This led to an uproar from the Steem community, after which Binance removed its funds from the voting pool. Hensley contends it was too late to make a difference, however:

“We were very close to retaking the chain, and as soon as the first round of powerdown for steem hit Binance, guess who got it? Justin was VIP and withdrew before anyone else, solidifying his position and thus helping Justin stay in power on Steem.”

Some who refused to become indebted to Justin Sun claim to have had their Steemit accounts censored. A former top 20 Steem Witness from before the takeover, “TheMarkyMark,” had his account with more than three years of user history wiped clean, and his ability to publish on Steemit.com was removed. He told us:

“Justin Sun has also suppressed a lot of users by completely removing access to all their posts and comments, basically censoring the user from being able to use the platform in any meaningful way.  In my case, around 10,000 posts and comments over the last 3+ years have been removed.”

In response to Sun’s apparent takeover of the Steem blockchain, Hensley and others supported a hard-fork of the project. That new initiative, Hive, is almost an exact copy of the original Steem blockchain. The project’s main qualifier, however, is that it is free from the influence of Justin Sun. 

But according to the former witness, any mention of “Hive” on Steemit is met with account deletions and censorship: 

“There are around 20 users who have been completely censored and removed from the front end interfaces, even those not owned by Steemit Inc and last time I checked a few weeks ago, hundreds of posts have been removed just for mentioning the word Hive.”

When users want to withdraw their funds from Steemit, the coins are subject to a “powering down” period. Some who wish to leave Steem in favor of Hive are being held back due to the staggered way in which their STEEM coins are released. 

This made many unwilling to speak out against Justin Sun out of fear that their money will be withheld.

Others, including Hensley, say they are holding back incriminating proof that will let them retain leverage over Justin Sun while their coins are slowly released.

Bitcoin Price Pumps, Then Dumps Below $7K Mirroring S&P Futures

Bitcoin (BTC) price has again dropped below $7,000 and at the time of writing the digital asset is struggling to hold above $6,700. The sharp downside to a new weekly low at $6,575 occurred despite an exciting Easter Sunday, which saw Bitcoin price drop to $6,772, then abruptly rebound to $7,176. 

As reported earlier by Cointelegraph, top crypto traders now expect the price to drop lower to $6,400 before possibly retesting $5,800.  

Crypto market daily performance

Crypto market daily performance. Source: Coin360

Data from Skew also shows that the abrupt correction lower led to the liquidation of $29 million in leveraged long positions at BitMEX, suggesting short-sellers interpreted Bitcon’s failure to top $7,200 as weakness and an opportunity to open short positions in anticipation of a pullback below $6,900. 

BitMEX XBT USD Liquidations

BitMEX XBT USD Liquidations. Source: Skew

Reclaim $6,800 or a $5,800 retest is on the cards

BTC USDT daily chart

BTC USDT daily chart. Source: TradingView

The move to $7,176 was encouraging but the price rejected right at the 50-day moving average, meaning the necessary push above $7,200 or a close at $7,000 failed to occur.

For the short-term, reclaiming $6,800-$6,900 would be a positive step in the right direction and at the time of writing the price is attempting to push through the volume profile visible range shows a high volume node in this range. 

BTC USDT 4-hour chart

BTC USDT 4-hour chart. Source: TradingView

In the 4-hour timeframe, traders will notice that retaking $6,750 will bring the price above the moving average of the Bollinger Band indicator and currently the Relative Strength Index is pulling back up after dropping to 37.57. 

Traders will now watch to see if Bitcoin either retakes $6,800 to make another attempt at a close above $7,000, or $6,750 now serves as resistance and traders have to contend with the price dropping to underlying supports at $6,400 and $6,200. As mentioned in an earlier analysis, a drop to $6,200 increases the likelihood of a $5,800 retest or even a drop below $4,000 again. 

Aside from Bitcoin’s technical setup, there are other developments that could impact the crypto asset’s price action. On Sunday, U.S. President Donald Trump tweeted that he had personally brokered a deal that would end the oil war between Russia and Saudi Arabia. 

According to the latest reports, OPEC and associated allies will cut production by 9.7 million barrels per day and the reduction represents the single largest cut in output in history. After the announcement of the deal oil futures traded higher but at the time of writing, futures for the Dow and S&P 500 are down 1.51% and 1.50%, respectively.

CME Bitcoin Futures (BTC1!) compared to S&P500 Futures 6-hour chart

CME Bitcoin Futures (BTC1!) compared to S&P500 Futures 6-hour chart. Source: TradingView

Interestingly, as the S&P 500 and Dow futures dropped, CME Bitcoin futures also dropped, reinforcing the oft-discussed correlation between Bitcoin price and major equities markets. 

Given the correlation of major markets to Bitcoin price, traders will also be closely watching the opening bell later this morning to see if this has any bearing on the top cryptocurrency.  

Bitcoin daily price chart

Bitcoin daily price chart. Source: Coin360

As the price of Bitcoin dropped, a number of top-10 altcoins mirrored the losses. Ether (ETH) pulled back 2.40%, Litecoin (LTC) lost 4.33% and EOS dropped by 3.16%. 

The overall cryptocurrency market cap now stands at $191.7 billion and Bitcoin’s dominance rate is 64.1%.

Keep track of top crypto markets in real time here

May’s Bitcoin Rewards Halving Will Force Weak Miners Off the Network

With the COVID-19 pandemic grabbing most headlines the past few weeks, the cryptosphere has been directing some of its attention toward Bitcoin’s reward halving. With the event just four weeks away and the Bitcoin Cash and Bitcoin SV halvings already executed, the anticipation for Bitcoin’s halving is at an all-time high.

“Bitcoin halving” interest rising over time. Source: Google Search Trends

“Bitcoin halving” interest rising over time. Source: Google Search Trends

The halving grants Bitcoin (BTC) one of its most important features — its deflationary status. Bitcoin started out with 50 BTCs being created with each block, which took approximately 10 minutes to mine, but this rate is subsequently cut in half every four years. The upcoming halving will be the third of its kind and will reduce the Bitcoin issuance rate to 6.5 BTC for every 10 minutes of mining.

The halving is a highly anticipated event for industry insiders, with many having a bullish outlook for the price after the issuance is reduced. Production is cut in half, and many expect the demand to stay the same or to increase, which means the price would be bound to increase according to the laws of supply and demand.

However, the price doesn’t always do what’s expected, and it is possible that Bitcoin’s price will remain the same, or even drop after the halving. There are a lot of pieces affecting the price, including trader speculation. Margin trading in futures, for example, has been known to be a driving force in the price of Bitcoin when volatility ensues, which was visible during the crash of March 12–13 that led many leveraged positions to be liquidated. The current correlation with the stock market is another example of how Bitcoin’s price does not conform to the rationale of supply and demand.

Miners also affect the price

While speculation is certainly a driving factor for Bitcoin’s volatility, miners are also an important factor, accounting for a large percentage of sell pressure in BTC since they actually need to liquidate their mined coins in order to keep their operations running. Apart from other exchanges, miners account for the majority of exchange inflow, and while traders usually buy and sell Bitcoin, miners only sell.

Given that miners are a big piece of the Bitcoin puzzle, it’s important to understand how they have been preparing for the upcoming halving and the unknown price action that will ensue. The last big crash led to the biggest mining difficulty drop since 2011 and further accentuated the sell pressure from miners, many of whom were forced to shut down their operations as profitability dropped.

This process, described in a report by Blockware Solutions as “miner capitulation,” leads to a change in the mining ecosystem that rewards more advanced operations — which have the possibility to hold Bitcoin for a longer period and to change the dynamic of when and for how much newly minted BTCs will be sold.

Bitcoin’s price didn’t rise. Wait. What?

If prices increase substantially, there won’t be much to worry about because miners will receive fewer coins but will be able to sell each one for a higher value. This creates a big question: What will each miner do, and how will the network behave as a whole if prices stay the same, or even worse, in case they drop? While a change in price would be the end for many miners, each operation has a different break-even price, and more importantly, a different strategy.

If Bitcoin holds its current price ($6,800 at the time of writing) and production is cut to half, then miners will face a similar scenario as they did when the price crashed on March 12–13. This would be a problem for a considerable part of the network, which still relies on old generation equipment like the Antminer S9.

Those running the Antminer S9 and those who have low electricity fees of $0.03–$0.05 for a kilowatt-hour need the price to stay at $7,600–$13,000 after the halving in order to turn a profit — and that’s assuming the difficulty doesn’t change much. When taking into account additional hosting fees and even higher electricity prices practice in countries outside of China, the break-even price becomes even higher.

Thus, Bitcoin’s halving could force a vast majority of Antminer S9s or any older generation equipment out of the network. According to Blockware Solutions, Antminer S9s make up approximately 30% of the Bitcoin network hash rate — with the vast majority of these being used by miners with kWh prices of $0.03 and above.

This means that if old gen equipment goes dark, there will be a significant drop in difficulty which, in turn, would make mining more profitable for those who stay, as they would get a bigger piece of the new BTC pie. According to Matt D’Souza, the CEO of Blockware Solutions, a crypto mining solutions company, the difficulty drop can even surpass that of the March 12–13 crash. He told Cointelegraph:

“The decrease in difficulty after halving is completely determined on the margins of miners, which the Bitcoin price influences. If Bitcoin is below $9,000, then margins will be poor for miners. If Bitcoin remains at $7,200, then many miners will need to shut off. It will likely be about 27%–35% of the network if Bitcoin remains below 9,000 for several weeks post-halving.”

So what about miners with new generation equipment? Given that the recent Antminer S17 is able to mine 300% times faster than S9s for a 50% increase in electricity consumption, the breakeven price with the same electricity price of $0.03–$0.05 comes at around $3,000–$5,000.

This means that mining operations with higher electricity costs can stay in the game as well, even if the price stays the same, while old gen equipment is disabled, and the difficulty is reduced once more. In a recent Chainalysis webinar, Chris Bendiksen, the head of research at CoinShares, noted this very pattern during the recent crash in March, which he believes may have served as a “test-run” for the halving. Bendikson stated:

“The result being that after the halving passes, plus maybe some months of potential hazard volatility, the industry, the mining industry will be in a much stronger position with an overall lower cost base.”

Hedging: Futures and options

If the price holds the current levels or even drops, the new-gen equipment can stay in the game, even in areas where electricity is relatively expensive. Said operations have had a bigger incentive to stay up to date when it comes to newly released equipment, given that their breakeven price with the S9s would be hard to reach. This signals that such operations may have higher access to capital and, consequently, different strategies for their operations.

Selling Bitcoin in the spot market as new coins are mined is the most straightforward method for miners to keep their operations running and to profit from the endeavor. There are different strategies that involve different degrees of risk, reward and initial capital. This is the case with derivatives trading that allows miners to hedge against price fluctuations in Bitcoin.

Miners can look to futures or options contracts in order to ensure that they are not too affected by short term volatility by either shorting BTC through a futures contract or buying an option contract that allows them to sell BTC at a determined price in the future — the strike price.

While this strategy requires capital, miners have a few available options from private investment to peer-to-peer loans and even credit lines from popular cryptocurrency apps like Nexo or BlockFi — which has recently announced it is extending credit to miners for the first time.

Miners still have a few tricks

There are other steps miners can take to protect themselves if derivatives hedging is not an option. For example, many mining operations have been known to provide colocation services in their self-mining operations. This allows them to make the most out of the available space and to earn from hosting and charging for electricity fees.

Mobile mining units have also been gaining traction as of late, and, although they are not a great solution for those who already have a running operation, they present a cost-effective way for small scale miners to start earning even after the halving. Another step miners with old equipment or new operations can take is sticking to a schedule where they buy a certain amount of rigs every month to capture cheap pricing on rigs when manufacturers lower the prices. D’souza pointed out the importance of purchasing equipment at the right time:

“Deployment into rigs at the right time is critical — Blockware Solutions advises its clients on when to leave old gen and get into new gen. We had our clients selling their old gen in May–June 2019 and to buy the next gen so they are well prepared.”

Miners can also upgrade to new gen equipment to reduce their exposure to the post-halving price action, selling their current equipment to miners with cheaper or free electricity. Some miners are also inherently protected, like those with subsidized electricity or even power plants that use their excess electricity to power mining equipment.

Lastly, another option is to stop mining Bitcoin altogether and switch to another coin with the same mining algorithm. However, Bitcoin miners are known to be die-hard fans and don’t show the same flexibility as GPU miners, for example. So, switching may not be an option for some.

The Bitcoin show must go on

Miners can leverage various tools within the crypto space to protect themselves for the unknown that will follow the halving. Of course, those with a higher appetite for risk and a bullish outlook on Bitcoin, can stick with their current strategy and just keep on mining, hoping the price goes up as they did after previous halvings.

Nevertheless, it is unlikely that Bitcoin will enter a “death spiral” as some have suggested. Reduced difficulty and hedging strategies ensure that mining will likely always be profitable for some at certain points in time. The halving will take place, and Bitcoin will just continue its journey, one block at a time.

Academic Research Into Crypto Picks Up, But Universities Remain Hesitant to Fund

Despite recent advances in academic research into the blockchain for everything from central bank digital currencies to pacemakers, universities and governments lag in their willingness to fund basic research in the sector.

While researchers are getting creative when presenting their work to traditional institutions, the situation is holding up research.

Output under current restrictions

Recent pre-print research on Bitcoin’s Lightning Network drew wide attention in the crypto sphere, largely thanks to its underlying allegation that the network is a way of centralizing the network. As attractive as such a controversial study is, it is not alone. Research into crypto topics has been expanding.

One deeply involved party is Andrea Baronchelli. A blockchain researcher at University College London and the Turing Institute, Baronchelli is co-author of several papers on crypto markets and one pre-print on dark web marketplaces.

“You are absolutely right, there aren’t many groups doing research on cryptos — yet,” Baronchelli told Cointelegraph optimistically. “Many academics still do not understand what cryptos are, and have not yet realised what an incredible resource of open data they offer.”

Marek Laskowski, a senior blockchain advisor at Novera Capital and author of another recent pre-print on decision making in blockchain systems, commented on the importance of independent work in the field. Speaking to Cointelegraph, he said that “Basic empirical research […] is done by passionate researchers who do this sort of work in their spare time.” Such a perspective makes sense, given that Laskowski himself is not backed by a university.

Running into limits on funding for research

According to Laskowski, government funds for research in general “seem to be drying up.” The problem goes beyond blockchain research, but as an issue it hits crypto particularly hard given its unique history:

“Generally speaking, research budgets have been experiencing cuts in public institutions for some time now. This combined with the fact that blockchain did not have its origins in academia often makes it hard to contextualize for grant review committees.”

Complicating this situation is increasing engagement from certain major universities with blockchain. Stanford recently backed an alumni-founded startup looking to provide blockchain developer tools. In 2018, Ripple made headlines by donating $50 million to a roster of universities to up their blockchain education.

Carnegie Mellon University, which houses one of the top computer science programs in the U.S., has an entire program dedicated to blockchain. At the beginning of the year, received a $4 million donation from an alumnus and Maker contributor dedicated to de-fi education. Yet their actual spending on academic research in the area remains unclear, and Carnegie Mellon’s press team declined to comment for this piece.

“Academic work on crypto is not particularly well funded as a sector,” Michael Zargham, a visiting crypto-economics researcher at the Vienna University of Economics and Business told Cointelegraph. “I don’t see a sustainable source of funds for crypto space specific research.”

Zargham would know, given that he also runs his own research firm, BlockScience, which focuses on artificial intelligence and blockchain.

Project-oriented funds are more readily available

It would be unfair to say that institutions had neglected funding into blockchain as a whole, including research spending. The issue is that current funding models don’t treat blockchain as a subject for research so much as a tool to be made to spec. The largest spenders are looking to solve specific problems.

“At Vienna University we’ve gotten some project-based research projects from the City of Vienna and from Telecoms,” Zargham said. “But this is more project oriented and less academic in nature.”

On a bigger scale, the U.S. Department of Defense, is a major source of research funding in a wide range of fields and has spent a lot of money on developing blockchain. These grants have similarly gone toward specific solutions for defined problems rather than basic research.

Laskowski of Novera Capital noticed a similar trend in how the private sector funds research in the sphere:

“Generally speaking, [funding is] increasing from private sources. Most often through projects looking to get research around specific aspects of their projects done. Sometimes it’s distributed by entities like the Ethereum Foundation, gitcoin etc.”

The problem of publishing

In an email to Cointelegraph, Baronchelli noted that crypto research is somewhat relegated to its niche. He said, “the community being small, your work gets (initially, I hope) less attention/funding than some other topic would get.”

Attention and exposure are critical raw materials for researchers pleading their cases before institutional funding.

Consequently, linked to insufficient funding for basic blockchain research is the problem of getting that research published. Pre-print servers, which house much of the research mentioned above, are great for scientists looking to lay claim to a topic before competitors. As they are not peer-reviewed, however, research papers in pre-print remain in limbo, largely uncitable in central scientific discourse.

Searches for crypto-linked keywords through the archives of juggernauts like Nature and Science turn up only a host of opinions and news pieces — no research as research.

Even their less selective open-access sister journals Nature Communications and Science Advances (where this reporter used to work) face this issue. Nature’s subsidiary Scientific Reports has put out some research on the subject, but Scientific Reports is substantially less picky about qualifications like impact. Like the similarly modelled PLOS ONE, Scientific Reports measures its annual output in the tens of thousands, as compared to

The more selective journals in these families typically have their first pick of research, with rejected papers often transferring to journals lower on the totem pole within the same organizations when editors think they meet standards of scientific rigor but not general interest or significance.

What that means for crypto and blockchain research is a cap on exposure in top-tier multidisciplinary journals — a lack of faith from publishers that translates into a death knell when courting institutional money, which is notorious for its obsessive counting of citations and impact factors and h-indices.

Researchers adapt, using cross-disciplinary appeal to present blockchain

One of blockchain’s advantages is its flexibility as a field and its applications, meaning that the range of research grants a lab focusing on the subject can apply to is theoretically wide. As Zargham said:

“The actual academic research comes from basic fields. In addition to computer science, one can work on formal methods category theory, control theory and robotics.  In particular crypto systems meet the foundational definitions of cyberphysical systems which is a rapidly growing and well funded segment of the engineering academia.”

Zargham indicated an example in a recent application from his team for a grant backed by the Austrian central bank. The grant itself highlights the prospect of a central bank digital currency, while the applicants received informal unwritten interest in use of blockchain for the project.

It is via other, better-funded disciplines and independent interest that blockchain research has seen its funding up to now. For the time being, the field seems set to remain dependent on the resourcefulness of researchers and their hopes for the future.

Bitcoin Price Drops to Key Level as 100% Rally Since Crash Looks Shaky

All markets have been showing a strong surge in the past weeks, including Bitcoin (BTC) and cryptocurrencies. The price of Bitcoin has seen a 100% surge in a matter of three weeks since the crash.

However, is such a rally sustainable in the current economic environment? And what is needed for a further continuation upwards in the cryptocurrency markets?

Crypto market daily performance. Source: Coin360

Crypto market daily performance. Source: Coin360

The price of Bitcoin loses 3-week old trendline

The price of Bitcoin has been seeing a significant rally since the massive crash on March 12, as the price rallied almost 100%. However, the rally came to an end as the uptrend was lost two days ago.

BTC USD 12-hour chart. Source: TradingView

BTC USD 12-hour chart. Source: TradingView

The 12-hour chart is showing a clear breakdown of the upwards trendline, indicating weakness and a probable reversal around the corner.

The price of Bitcoin couldn’t reach the next resistance, as the price rejected at $7,400, while many traders were anticipating a rally towards the $7,600-7,800 level.

Further, the 12-hour chart is showing that the price of Bitcoin is holding on to the final level of support before a further heavy dropdown is ready to occur.

BTC USD 12-hour chart. Source: TradingView

BTC USD 12-hour chart. Source: TradingView

The last support area for bulls is in the $6,750-6,800 area. The first sign of weakness was losing the yearly and monthly level at $7,200. However, losing the $6,750-6,800 would trigger a further heavy dropdown and would trigger a higher volume drop.

The recent drop down didn’t cause a high volume profile while losing the next support zone at $6,750-6,800 will likely provide a giant sell-off towards the support zone at $5,800 and confirmation of a further downwards trend.

The reason for that is that the price of Bitcoin would be making lower highs and lower lows initiating the continuation of a downtrend.

Weekly time frame needs to close above 100-Week MA

BTC USD 1-week chart. Source: TradingView

BTC USD 1-week chart. Source: TradingView

The weekly chart is the most crucial chart at this point. Closing the weekly candle above the red zone and preferably above $6,900 would give bullish signals of continuation. The resistance level at $6,900 will be cleared, and what’s more, the price of Bitcoin would reclaim the 100-week MA (Moving Average), which can be stated as a bullish signal for the market.

However, the wicky structure of the recent rally upwards confluent with the decreasing volume implies a downward test is likely to occur.

In this case, if the weekly candle doesn’t close above the 100-Week MA, a further drop is expected for the markets, which implies the support levels at $5,000-5,200 and $3,800-4,000 as the major support levels to watch.

Total market capitalization crypto also showing weakness

Total market capitalization cryptocurrency 12-hour chart. Source: TradingView

Total market capitalization cryptocurrency 12-hour chart. Source: TradingView

The total market capitalization of cryptocurrencies is also showing weakness as the market capitalization rejected at the $205-210 billion resistance zone.

Generally, the total market capitalization is showing a clearer picture than the Bitcoin chart alone. The market capitalization rallied towards $210-220 billion, which was the area before the massive dump occurred. This area is similar to the level of $7,600-7,800 on the Bitcoin chart.

The $210-220 billion then saw a swift rejection, after which temporary support at $185 billion was found.

However, losing the $185 billion will imply further downwards momentum, and the next levels are then the $105-115 billion, $130 billion and $153 billion. Each one of these levels would indicate that a significant drop is to be expected.

Altcoin market capitalization crypto 12-hour chart. Source: TradingView

Altcoin market capitalization crypto 12-hour chart. Source: TradingView

The altcoin market capitalization shows a worse picture than the total market capitalization, as it’s currently hanging between two levels. Support is found 8% lower at $62 billion, while the total market capitalization of altcoins is massively rejected at the upper resistance level.

This implies that altcoins are going to see a more severe move than Bitcoin. In other words, the moment BTC loses the $6,750-6,800 area for support, it’s to be expected that altcoins are going to see a more substantial drop than Bitcoin.

The bullish scenario for Bitcoin

BTC USD 3-hour chart. Source: TradingView

BTC USD 3-hour chart. Source: TradingView

The bullish scenario is pretty straightforward but less likely at this point. The price of Bitcoin just lost an upwards trend, which implies further downwards pressure to occur.

However, there’s a possibility that the dropdown is a fake-out. For that to be the case, the price of Bitcoin needs to hold the $6,750-6,800 area for support, in the first place.

After that, the main goal to go for is reclaiming the yearly level at $7,200 for support. Once that happens, a further upwards push is to be expected. Targets to be defined are $7,800-7,800 as the next levels.

Such a move upwards should preferably occur over the weekend as then the weekly candle would close above the 100-Week MA.

The bearish scenario for Bitcoin

BTC USD 3-hour chart. Source: TradingView

BTC USD 3-hour chart. Source: TradingView

As stated in the bullish scenario, it’s not expected that we’re going to break back further upwards. Therefore, the most likely scenario would be a bearish scenario where the price continues to drop.

If the weekly candle doesn’t manage to close above the 100-Week MA, a swift drop is expected, confluent with losing the $6,750-6,850 range.

However, over the weekend, a potential rally towards $7,050-7,150 could occur to confirm the previous support becoming resistance.

Losing the $6,750-6,850 area would imply that the market is showing weakness, and the next massive support area to watch is the $5,600-5,800 area. In between potential temporary support can be found at $6,300.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Chain of Events Post-BSV Halving Mirrors BCH’s, Loyalists Propping Up the Network

Bitcoin SV (BSV) has seen its first halving since its creation in late 2018, hours after Bitcoin Cash (BCH) also completed its 50% block reward reduction event. The cryptocurrency first came about as a result of disagreements between opposing factions within the BCH community, which led to a group backed by self-proclaimed Bitcoin (BTC) creator Craig Wright and billionaire Calvin Ayre forking the chain to form Bitcoin Satoshi’s Vision, or Bitcoin SV.

As was the case with BCH, BSV also saw a reduction in hash rate as miners moved their computing power to the BTC chain, which is currently the most profitable to mine among all three blockchains. BSV proponents say the hash rate reduction is only a temporary trend and will do little to negatively impact miner revenue.

During the hash war between BCH and BSV, the concentration of computing power in those two chains almost led to a mining death spiral for Bitcoin. This period was also the last leg of the 2018 bear market, with the price of BTC bottoming out at $3,800 in December 2018.

With both the BCH and BSV halvings completed, attention now turns to the BTC block subsidy reduction, which is set to take place in mid-May. Given the migration of miners across the blockchains during this halving season, the aftermath of Bitcoin’s 50% inflation drop might provide a clearer picture of the hash rate distribution for the three chains.

On the price side of things, the BSV and BCH halvings have coincided with a downward slide for all three cryptos. Bitcoin has fallen below $7,000 after failing to surpass $7,500 during the fifth time of asking since Black Thursday on March 12, when the price fell sharply to $3,800.

BCH saw a swift retracement after its halving, eroding the 11% gain that followed the event. As of press time, BSV is down more than 15% in the last 24-hour trading period, with the halving failing to trigger any upward momentum in its price action.

BSV in the middle

BSV, while being the youngest of the three “major” Bitcoin chains, saw its halving occur between those of BCH and BTC. As previously reported by Cointelegraph, the block reward subsidy reduction for BCH occurred a full month ahead of that of BTC due to a change in the former’s difficulty adjustment algorithm back in 2017. As a BCH fork, Bitcoin SV inherited this temporary faster block creation time artifact in its blockchain after its split in 2018.

The halving sees the reward earned by miners for each block that they produce fall by 50%. This event occurs after every 210,000 blocks or four years and is an inflation control protocol coded into the Bitcoin blockchain and, by extension, those of BCH and BSV. This quadrennial inflation drop helps to regulate the token supply by slowing down the production of new coins. Without such control measures, miners could theoretically acquire all the block rewards in a significantly short time.

Such a scenario would see the supply of coins outstripping the demand, likely causing the price of the token to crash. The finite supply of 21 million tokens and the inflation control schedule serves to present Bitcoin as “hard money” — currency immune to inflation and indiscriminate dilution — which is a term historically reserved for gold-backed currencies.

Post-halving hash rate plunge: like BCH, like BSV

At 12:48 a.m. Coordinated Universal Time on April 10, the 630,000th block emerged on the Bitcoin SV blockchain. An unidentified mining pool was responsible for producing the milestone transaction. This landmark triggered the halving in miner reward from 12.5 BSV to 6.25 BSV. ViaBTC was the first pool to mine a block under the new regime approximately 30 minutes later.

Before the BSV halving, Jimmy Nguyen, the president of the Bitcoin Association and the former CEO of the blockchain research firm nChain, declared that the halving will serve as a watershed event for Bitcoin SV. Speaking to the Calvin Ayre-owned, BSV-affiliated crypto media platform Coingeek, Nguyen remarked:

“Short-term, 2020’s Bitcoin halving will of course mean an immediate reduction in the profitability of transaction processors. Long-term however, it is my view that the halving of the block reward’s subsidy amount will reinforce the importance of Satoshi Nakamoto’s original economic design for Bitcoin. Satoshi intended to reduce transaction processors’ reliance on the block subsidy amount over time by replacing that income with more transaction fees.”

The aftermath of the Bitcoin SV halving also saw a similar hash rate plunge as was the case with Bitcoin Cash. Following the BCH halving, the computing power expended on the BSV chain rose to about 3.01 exahashes per second.

However, as of press time, data from the blockchain explorer platform Blockchair.com shows BSV’s hash rate at 0.98 EH/s, which means a more than 50% hash rate decline since the time of halving. BSV mining difficulty has also adjusted to the sharp hash rate plunge, reducing by more than 35%. At the time of writing, the BSV blockchain has produced 39 blocks since the halving.

Almost all roads lead to BTC, at least for now

According to data from Coin Dance, the BTC chain now controls 98.7% of the hash rate distribution among all three blockchains. The mass exodus of miners from both BCH and BSV has led to a noticeable drop in the proportion of the total hash rate controlled by the two forks.

In a conversation with Cointelegraph, Connor Murray, a BSV proponent and the host of the Bitcoin and Beyond podcast, argued that the Bitcoin Cash and Bitcoin SV halvings were immaterial. According to Murray, the May BTC halving will determine the future fate of the three chains:

“The BSV and BCH halvings don’t matter much since miners can still mine BTC. It is the BTC halving that will have a major effect on the ecosystem, and since there are a very small amount of transactions on the BTC network, the effects will be felt quickly.”

For Murray, the hash rate drop does little to affect the value proposition of BSV. With the halving done, the crypto podcast host remarked that BSV was still on course to attain its developmental goals, adding that “BSV developers and entrepreneurs have been prepared for the halving for years.” Bitcoin SV developer Daniel Connolly also echoed similar sentiments, telling Cointelegraph:

“The halving reduces the subsidy for confirming transactions in blocks. The cost of mining a block has not changed. When a subsidy is decreased, there are two options: increase the cost of confirming a transaction or increase the number of transactions confirmed in a block. BSV is uniquely positioned to increase the number of transactions in a block while maintaining exceptionally low transaction fees and miner revenue.”

For Alex Speirs, the communications director of the Bitcoin Association, the current miner reward model is short lived, with transaction fees being the main incentive for miners once block subsidies run out. In an email to Cointelegraph, Speirs remarked:

“The Bitcoin network was designed to incentivize the sustainability of the network through transaction fees. The problem is, with BTC and BCH, sustaining a model built on transaction fees is just not possible because of the extremely limited block size caps on their networks.”

According to Speirs, the unlimited block size employed in the Bitcoin SV blockchain constitutes a more faithful implementation of Satoshi Nakamoto’s original plan for Bitcoin, adding: 

“We are confident that with the growing volume of transactions seen across the Bitcoin SV network […] transaction processors (miners) will be incentivized to remain on the Bitcoin SV network by earning an ever-increasing proportion of their revenue from growing transaction fees.”

Network security concerns 

With the BCH post-halving miner exodus, fears have arisen of a possible 51% attack on the blockchain. As reported by Cointelegraph, a rogue attacker would only require about $10,000 worth of rented hash power to stage an attack.

A similar situation has arisen for BSV. As shown by data from Crypto51, a platform that tracks the theoretical host of staging a 51% attack on proof-of-work blockchains like BSV, a rogue actor could attack the BSV chain for one hour for a cost less than the present Bitcoin price.

For Mason Jang, the chief strategy officer at blockchain analytics firm CryptoQuant, BSV mining stakeholders like Coingeek will continue to expend computing power on the Bitcoin SV chain. In a conversation with Cointelegraph, Jang remarked:

“Since the Genesis update, BSV has an unlimited block size and restored op code. Because of this, it’s already unfavorable to miners. Instead, the miners and others in the ecosystem are trying to make a distributed database. Therefore, it doesn’t seem that the main miners, like Coingeek, will leave the chain.”

Away from the immediate aftermath of the halving, proponents like Murray say Bitcoin SV stakeholders are focused on the planned economic innovations on the chain, telling Cointelegraph:

“There are a lot of entrepreneurs and developers in the ‘blockchain’ industry that see utility in a global transparent ledger, but are building on top of ledgers that don’t scale for global usage. BSV has shown that Bitcoin was always meant to scale to handle billions of transactions a day.”

XRP Price Bottom May Be Here as Bulls Try to Prevent New All-Time Low

While Bitcoin (BTC) is currently showing weakness with the recent retracement from $7,500 to $6,900, XRP price is remaining relatively stable as the XRP/BTC pair is stabilizing. 

But it’s not only the price of XRP that is remaining reasonably stable against BTC, but Stellar Lumens (XLM) is also showing strength. Would this imply that the inverse correlation is back? 

Crypto market daily performance. Source: Coin360

XRP breaks back above the crucial level on the BTC pair

As discussed in the previous article, the red area was a vital level for XRP to reclaim to sustain any bullish momentum. The price wasn’t allowed to drop below the monthly level of 0.00002360 satoshis, which was held as support. 

After that, a breakout above the 0.00002500-0.00002550 satoshis level was crucial. Luckily, the breakout occurred.

XRP BTC 1-day chart. Source: TradingView

That’s the first step for some momentum on the chart. The next crucial step would be a successful support test of the red zone. If such a test confirms the support level here, any further upwards momentum is likely to occur. 

Overall, as many altcoins are showing a similar structure, the price of XRP is stuck in a sideways range between 0.00002350 satoshis and 0.00003300/0.00003800 satoshis, as the price has been hovering around here for ten months.

Remarkably, the price of XRP against BTC is on the same level as one month ago, just before the big crash of Bitcoin occurred. Given that the price is stabilizing and not being affected by the movements of Bitcoin shows strength and a possible bottom formation for XRP. 

Older investors probably remember the good old days, during which XRP had an inverse correlation with BTC. The moment Bitcoin started to drop, XRP started to bounce upwards in the BTC pair, showing strength. This inverse correlation could be back and may become apparent in the coming period — the moment Bitcoin might continue its retracement.

USD pair facing resistance and needs to flip crucial support

XRP USDT 1-day chart. Source: TradingView

The USDT pair is facing a resistance level, which was the last area before the significant drop of Bitcoin occurred. This resistance zone is marked red on the chart and is at the $0.20-0.22 level.

For bullish momentum, reclaiming this level would create a solid floor for continuation towards $0.28-0.30 as the next resistances.

However, claiming the previous support at $0.1775 would also be a bullish confirmation for continuing upwards. This area is comparable with the area around $6,750-6,800 for Bitcoin. But losing the green zone would imply that XRP is going to test the support levels from beginning March again as can be seen in the following chart. 

XRP USDT 1-week chart. Source: TradingView

The weekly chart is a crucial factor in this. A weekly close above the resistance (red zones) would create a continuation possible towards the next resistance around the $0.30 level.

However, if the weekly close won’t be above the resistance area, then the chart is showing weakness, and it’s quite likely to see a retest of the support around $0.145 again. 

As the chart is showing, the $0.145 area is a crucial level to hold for XRP. If that level is lost, then there isn’t any significant support until the $0.06 zone if another 60% drop occurs, and which would put XRP investors into depression mode.

XRP’s sister coin XLM is another crypto to watch

Stellar Lumens (XLM) is very similar and has historically followed in the footsteps of XRP. When XRP moves, XLM moves.

XLM BTC 1-day chart. Source: TradingView

The XLM chart is showing a similar structure to XRP. A very long range in which it’s been moving for almost a year, showing clear support between 0.00000550-0.00000610 satoshis.

The resistance of this range is at 0.00000810-0.00000820 satoshis and 0.00000880-0.00000910 satoshis. A breakout above these levels would create space for 0.00001400-0.00001500 and a massive surge. However, to get there, the price of XLM must first break through the resistance area around 0.00000700 satoshis.

Remarkably, the price of XLM is also holding up reasonably well in the BTC pair, despite the massive drop of Bitcoin recently. The price of XLM/BTC is the same as one month ago before the big drop in Bitcoin price happened on March 12.

Similarly, if XLM holds the marked green zone for support (around 0.00000600 satoshis), a new, big surge could occur towards the range highs. 

Stellar Lumens needs to claim $0.04 as support 

XLM USDT 1-day chart. Source: TradingView

The XLM/USDT chart is showing a clear rejection at the resistance of $0.0538, implying that lower levels have to be tested to confirm support levels. 

The area to look for is the marked green zone around $0.04-0.0425. Holding there would confirm a support/resistance flip and reclaim of previous support. 

Such a support/resistance flip is what traders should be aiming for, as such a flip could give perspectives towards the next resistance around $0.075-0.095 area. This area is the next vital area to watch for. A breakout above there would provide a higher high and potential bull market movements.

However, losing the green zone would give the coin further downwards pressure towards the lows around $0.03, putting investors for XLM in depression as well. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Bitcoin Price Suddenly Drops Below $7K, Crypto Market Under $200B

Bitcoin (BTC) price dropped nearly $200 in minutes on April 10 to slide below $7,000 for the first time in four days.

Data from Coin360 and Cointelegraph Markets showed BTC/USD now dropping below the tight $400 corridor between $7,100 and $7,410 where it had stayed for most of the week.

The sudden drop from $7,150 to $6,915 also formed the most volatility seen in recent days and, at press time, Bitcoin is trading around $6,960.

Cryptocurrency market daily overview

Cryptocurrency market daily overview. Source: Coin360

BTC price dives going into the weekend — $6.3K next?

As previously expected by some traders, the small price rise did not occur from the $7,200 levels going into Friday. However, the $6,900 has shown to be the first line of defense for the bulls. If this level fails to hold, then trader Michaël van de Poppe expects low $6Ks next.

“We might be getting a liquidity tap towards $7,500-7,700 area, after which I’m expecting a sharp decline,” Van de Poppe said late on Thursday.

He added:

“If we lose $6,900 area though, I’m assuming we’re going straight towards $6,300.”

Bitcoin 1-day price chart

Bitcoin 1-day price chart. Source: Coin360

All markets still gripped by fear

Meanwhile, the Fear & Greed Index shows a reading of 15, which means that the cryptocurrency market is still in “extreme fear.”

Comparatively, the traditional stock market is experiencing “fear” with a reading of 43, according to CNN Money, as markets bracing for a volatile close to a wild week, which saw trillions in new stimulus money announced by the U.S. Fed. 

Fear & Greed Index

Fear & Greed Index. Source: alternative.me

The total market capitalization has also slid below $200 billion. Also, despite their halving events this week, Bitcoin Cash (BCH) and Bitcoin SV (BSV) are down nearly 10% while Ether (ETH) dropped roughly 5.3%. Bitcoin’s market dominance is 64.1%.

Keep track of top crypto markets in real time here

Former Bakkt CEO to Sell All Holdings After Insider Trading Accusations

Following major accusations of insider stock trading during the coronavirus-induced market crash, Senator Kelly Loeffler (R-GA), the former CEO of Bakkt, is liquidating her holdings along with her husband.

In an April 8 tweet, Loeffler said that she and her husband Jeffrey Sprecher, CEO of ICE, which is the company that owns Bitcoin (BTC) options contracts regulator Bakkt, are liquidating their holdings in managed accounts to focus on tackling the coronavirus situation.

“I’m doing it because the issue isn’t worth the distraction”

The former CEO of Bakkt has also published an opinion piece in the Wall Street Journal, emphasizing that her action is not caused by Senate requirements but rather a strong commitment to defeat the coronavirus.

Loeffler added that she will report all transactions in the public periodic transaction report:

“I am taking action to move beyond the distraction and put the focus back on the essential work we must all do to defeat the coronavirus. Although Senate ethics rules don’t require it, my husband and I are liquidating our holdings in managed accounts and moving into exchange-traded funds and mutual funds. I will report these exiting transactions in the periodic transaction report I file later this month.”

Accusations of a coronavirus insider trading scandal

As reported by Cointelegraph, Loeffler came under fire on March 20, with reports claiming that she sold millions in stock within days of a private Senate Health Committee hearing on the novel coronavirus. 

American political commentator Keith Boykin explicitly accused Loeffler of being involved in a “coronavirus insider trading scandal” alongside other Senators including Richard Burr, Jim Inhofe and Ron Johnson.

Loeffler rejected the accusations of improper trading, claiming that she is not directly involved in decisions regarding her portfolio. As reported, the former Bakkt CEO explained that a third party person or set of advisors is tasked with making those decisions.

Loeffler was delaying her financial disclosure after swearing into the Senate

Loeffler was sworn into the United States Senate on Jan. 6, 2020 after serving as CEO of digital asset exchange Bakkt for about a year. After taking her seat in the Senate, Loeffler was reportedly delaying her Financial Disclosure Report. The report is a basic requirement for all officials that reveals potential conflicts of interest by identifying asset holdings.

Binance Hits Back at ‘Embezzlement’ Claim

Binance has fired back at claims that it ‘embezzled’ hundreds of thousands of dollars in funds that were frozen from a user’s account in November 2018.

In a lengthy statement the exchange said the funds were frozen at the request of South Korean law enforcement agencies because the account holder had allegedly received 3,995 Ethereum (ETH) through a listing fee scam. Binance provided screenshots of correspondence with the Korean authorities to back up its claims.

The user had earlier claimed South Korean law enforcement authorities had no complaints against him. Forkcast reported that $251,194 worth of the seized crypto was totally unrelated to funds tied to the alleged listing scam.

“I have every reason to believe that Binance misappropriated my money for itself. Communication with them continues from November 21, 2018. It has been 18 months already,” the user told the publication.

The user claimed to be in contact with other Binance users who believe the exchange has wrongfully frozen their funds and they were preparing a class action lawsuit. 

Binance acted on police request

In its statement Binance said that a police report revealed an unidentified person had gained unauthorized access to a Korean cryptocurrency project’s email account and learnt the project was in talks to list its project on exchanges:

“An unidentified person (the “suspect”) sent emails impersonating himself as a ‘Binance representative,’ promising to help list the victim’s cryptocurrency on Binance and other exchanges, for a fee. As a security deposit from the victim, the suspect received a remittance in cryptocurrency (ETH) of approximately 10 billion worth of KRW.”

A Korean law enforcement authority contacted Binance to say that its investigation had determined a user on the exchange had been identified as receiving a majority of the stolen funds. It requested the funds be transferred back to the victim on January 18, 2019.

“After we performed all necessary due diligence steps internally, Binance complied with the request from Korean law enforcement and completed the return of funds,” Binance said.

Binance said it had informed the user of Korean law enforcement’s request to repatriate the funds and provided him with contact information for the relevant agencies.

User is not happy

Binance states the user had made a complaint to a separate Ukrainian law enforcement agency, who contacted them in April 2019. Binance said it had been able to satisfy the agency it had acted appropriately.

The user claimed that South Korean police have refuted the exchange’s version of the story and provided unverified, translated documents purportedly detailing his interaction with Korean authorities to Forkcast.

Screenshot of Binance’s interactions with Korean authorities