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El Salvador Disables Bitcoin Price On Chivo App To Stop Scalpers

Bitcoin traders have found a way to use the recently launch Chivo App, the countries own BTC wallet, by El Salvador’s government to make a profit. As part of their BTC Law, this app operates with the second layer payment solution lightning network.

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Via its official Twitter handle Chivo Wallet announced that Salvadorans will be unable to track the price of BTC on the app. According to the report presented by the team behind the app, some users have been using it to do “scalping”.

A type of short-term trading modality, scalping is performed by an operator to take advantage of an asset’s price fluctuations in low timeframes. In previous versions, the app allowed users to “freeze” the price of Bitcoin giving traders an edge to perform this practice by comparing it to exchange rates.

The Chivo Wallet allows users to move BTC via the lightning network to other Chivo users or external BTC wallets. Thus, traders can make a profit by scalping the app’s BTC price. The team behind the app clarified the following on the reasons for the decision:

The “scalping” performed consisted of taking advantage of Chivo keeping the rate frozen for 1 minute and taking advantage of that minute to compare the rate with other exchanges and see if the Bitcoin price went down or up.

In the future, the price of Bitcoin will have limited visibility to prevent these operators from accessing what the team called “an unlimited source of money”. The app will not ban trading itself, just the capacity to “freeze” BTC’s price on the platform.

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Salvadorans Will Have New Functionalities On Their Bitcoin Wallet

On the contrary, the team behind Chivo claimed that is working on adding a trading feature for the wallet. In the future, the app will let these operators trade with BTC with any modality, but with the asset’s price display in real-time.

However, Salvadorans can already profit from BTC exposure. Since the wallet was launched, when the government gave citizens a $30 bonus in the cryptocurrency, Bitcoin has increased its value by over 30%.

Upon launch, El Salvador and its president Nayib Bukele surely underestimated or failed to consider crypto traders’ capacity to leverage a situation for their benefit. It remains to be seen whether disabling BTC’s price from the app will effectively stop scalpers.

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At the time of writing, BTC trades at $$61,980 with a 1% profit in the daily and a 13.3% profit in the weekly charts, respectively. BTC’s price remains in a rally and it’s near $64,500, its all-time high.

BTC with minor profits in the daily chart. Source: BTCUSD Tradingview

British Security Think Tank’s Report Warns NFTs Could Bolster Money Laundering Schemes

The Royal United Services Institute (RUSI), the British defense and security think tank, questions whether or not non-fungible token (NFT) assets can be used for money laundering purposes. The report determines that in order to mitigate the money laundering risks a ‘know your customer’ monitoring system “needs to be implemented.” RUSI: ‘NFT Technology Can Raise::Listen

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The Royal United Services Institute (RUSI), the British defense and security think tank, questions whether or not non-fungible token (NFT) assets can be used for money laundering purposes. The report determines that in order to mitigate the money laundering risks a ‘know your customer’ monitoring system “needs to be implemented.”

RUSI: ‘NFT Technology Can Raise Alarm Bells From a Money Laundering and Financial Crime Perspective’

The Royal United Services Institute for Defence and Security Studies otherwise known as RUSI, was founded in 1831 and it is the oldest defense and security think tank worldwide. On December 2, RUSI published a report that covers the subject of non-fungible token (NFT) assets and the RUSI researchers ask whether or not NFTs can contribute to money laundering schemes.

“This technology can raise alarm bells from a money laundering and financial crime perspective,” RUSI warns. “To start with, NFTs are most often purchased with cryptocurrencies on online marketplaces. Cryptocurrencies are routinely exploited for malicious means, such as obfuscating the source of criminal proceeds and, despite transactions being traceable, more sophisticated criminal actors use a variety of techniques to disrupt investigations by law enforcement.”

The RUSI report called “NFTs: A New Frontier for Money Laundering?” further states:

A system of ‘know your customer’ policies and ongoing monitoring, similar to those used in the traditional art market and in compliant cryptocurrency exchanges, needs to be implemented.

Money Laundering Considered Commonplace in Traditional Art Market — RUSI Researchers Say an ‘Art Heist Is Also Possible Within the NFT Realm’

Money laundering in the traditional art scene has been an ongoing debate for decades. The New York Times investigative reporter Graham Bowley explained on June 19, that U.S. politicians want to investigate the secret art market. “Secrecy has long been part of the art market’s mystique, but now lawmakers say they fear it fosters abuses and should be addressed,” Bowley wrote.

RUSI researchers stress that criminal actors can also infiltrate NFT markets and leverage “novel risks.” “An art heist is also possible within the NFT realm,” the RUSI report adds. “Criminal actors can hack into user accounts on NFT marketplaces and transfer NFTs to their own accounts. After transferring the NFTs, the hacker can quickly sell the stolen token(s) and attempt to launder the proceeds.”

While RUSI researchers believe that money laundering in the NFT art and collectibles world can be deterred, the report also highlights that “NFT forgery and theft can also be mitigated.” RUSI suggests that NFT marketplaces use two-factor authentication (2FA) solutions and maintain “good cyber security.” Furthermore, RUSI suggests developing a registry of stolen NFTs that “would mimic the Art Loss Register.”

What do you think about the RUSI report on NFTs and money laundering risks? Let us know what you think about this subject in the comments section below.

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El Salvador Disables Bitcoin Price On Chivo App To Stop Scalpers

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