Banking Professionals Still Warn of the Dangers of Cryptocurrency

Pinterest LinkedIn Tumblr

At press time, the father of cryptocurrency – bitcoin – is trading for about $3,400. This is lower than where it stood during the bitcoin cash hard fork of November 2018, which is when bitcoin initially began experiencing heavy drops.

All of 2018 proved rocky for the leader of crypto, though nothing could have prepared enthusiasts for the nasty falls that occurred in later months. During November and December, bitcoin saw itself slinking into the $5,000 range – approximately $1,000 less than where it had stood so willfully over the summer and during the latter half of the year. From there came $4,000 and finally the $3,000 range.

Cryptocurrency Warning

Many blamed the bitcoin cash fork that took place roughly two weeks before Thanksgiving. The event was controversial to say the least and pitted many industry leaders (i.e. Roger Ver and Craig Wright) against each other. Many cryptocurrencies saw their prices drop practically overnight, and several people still don’t have the trust and faith in digital assets that they once held.

What Do Banking Professionals Say?

Today, many bank professionals still don’t consider bitcoin and assorted cryptocurrencies valid trading tools. They warn users to steer clear of anything that exists via blockchain, and say that in the case of financial growth, tradition is always best.

A deputy governor from the Bank of England, for example, recently claimed:

“Crypto assets appear vulnerable to fraud and manipulation, as well as risks associated with money-laundering and terrorist financing.”

You Need More Facts

To be fair, however, the governor – who remains anonymous at the time of writing – appears to be basing his claims on a single instance. In this case, it’s one involving a man named Alexander Vinnik, who was recently investigated by the non-profit investigative journalism group the Organized Crime and Corruption Reporting Project (OCCR).

Recently, Vinnik was arrested at a Greek resort. The corresponding police report states that in his possession at the time were:

“Five mobile phones, four credit cards, two laptops, two tablets, a 256-gigabyte thumb drive and a router.”

He was later charged by the U.S. Department of Justice and for allegedly laundering approximately $4 billion through a Moscow bitcoin exchange.

Developments in the Case

Russia is also looking to trial Vinnik and has requested that he be extradited to the country to face judgement, though it’s unclear if this will occur. Vinnik’s lawyer has referred to the charges being thrown at his client as “trumped up.”

The OCCR explains that Vinnik is likely a subject that authorities are looking to make an example of. The idea is to instill appropriate legislation that would prevent money laundering by enforcing corresponding measures. The organization is also claiming that Vinnik processed transactions for a cryptocurrency hacking group in Russia known as the Fancy Bear, which is allegedly tied to a branch of Russian intelligence according to several U.S. officials.

Are Other Options Really That Much Better?

In this and similar cases, monetary regulators are warning professional traders that if they want to see returns on their investments, they’ll avoid digital currencies and stick to stocks, bonds and everything else in-between, though this idea is also up for debate. It was announced today that the DOW has dropped an addition 335 points following the government shutdown and what one source refers to as “bad corporate news.”

Companies like the famed chipmaker Nvidia saw stock shares fall by roughly 13.5 percent after the release of its fourth-quarter forecast. The venture is now expecting revenue of roughly $2.2 billion – about $500 million less than the $2.7 billion it predicted earlier this year.

In addition, major tech companies such as Apple, Microsoft and ABB also experienced slips in their share prices this week.

Nick Marinoff

Nick Marinoff has been covering cryptocurrency since 2014. He has served as a lead content writer and news editor for Money & Tech; a public relations writer for Game Credits, and a senior writer for both Bitcoinist and News BTC.

Write A Comment

As Featured In
As Featured In