Norwegian Bitmynt AS has lost a lawsuit that was filed in 2017 against Nordea Bank AB. The lawsuit was by Bitmynt AS founder Sturle Sunde shortly after the bank suspended its account citing nefarious use in April 2018.
The Verdict
Judge Elisabeth Jordan Ramstad of Oslo District Court ruled that the decision taken by the financial institution was justified as Bitmynt account holders were suspected of using the service to pay for drugs. The judge also acknowledged the threat of financial irregularities and money laundering due to and other .
Ramstad that the bank cannot be held liable for denying banking services to a customer, under Section 21 of the Financial Agreement Act. Transactions on the bitcoin are recorded on the public ledger where the original account details of the transacting parties cannot be quickly revealed. Even though the ledger is public, only the cryptographic public keys involved in a transaction can be seen.
Nordea pointed out that the plaintiff’s business is highly unregulated and subject to financial regulations, the latter of which has not been well-defined in Norway yet.
Illegal drug dealings through Bitmynt AS under scrutiny
Kripos, the Norwegian secret police, a financial trail revealing the exchange’s involvement in dealing drugs. The probe discovered that drug dealers across Norway actively used Bitmynt AS as a payment settlement platform.
The incident was enough to convince Nordea to terminate all banking services and ultimately, suspend Bitmynt’s account. The bank also issued an advisory in January 2018, asking all of its staff to stop trading or investing in bitcoin or any other cryptocurrency.
Bitmynt AS founder, Sturle Sunde, categorically denied allegations that his cryptocurrency business was illegal. He also attempted to justify his stance by saying that bitcoin transactions are not wholly untraceable and that the identity of an account holder could be known to some extent.
Sunde believes that the judge did not understand the matter thoroughly and admitted the following:
“I think the whole sentence is fun. It seems that the judge has skipped the points in the Money Laundering Act, which states that the bank will conduct transactions, including those suspicious, as long as they know the identity of the customer and the purpose of the transaction.”
So far, Sunde has that he will appeal against the verdict in the higher courts. He believes that Nordea denying him banking services is a violation of the Financial Agreement Act, the Competition Act, and the Money Laundering Act.
Preferred Payment Option of across Darkweb and Drug Dealers
Even though bitcoin transactions are not entirely untraceable, that has never deterred criminals from using it as a payment method, especially in the early days. However, Monero (), an alternative digital currency with much better privacy features than bitcoin, has since all other cryptocurrencies for that purpose.
Whenever a person attempts to send some Monero to another user, the tokens sent would be “mixed” with some other randomly generated coins by the network, making the transaction effectively untraceable.
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The cryptocurrency world has been peaceful for the most part, with isolated cases of aggression observed only during instances of an exit-scam or downright fraud. However, in Washington State’s Chelan County, locals and are in the midst of agitated clashes following a mining ban, causing local police to introduce advanced security measures.
Identifying All Parties: Miners vs. State Officials
According to a by Govtech, the behavior germinates from two distinct crypto-groups, namely: illegal miners whose electricity connections have been disconnected and high-density electricity applicants.
Speaking on the issue is Kimberlee Craig, a spokeswoman for Washington’s Public Utility District ():
“PUD employees in the field and those in the office who are handling issues related to high-density load service have encountered an increasing number of upset customers and potential customers. In some cases people can get agitated and argumentative.”
Craig further adds that the situation is beyond the PUD’s scope to handle, hence the involvement of local police authorities in the matter:
“The volume of requests and the sense of urgency by applicants has changed the dynamics of the interaction by staff with the cryptocurrency customers.”
Although the PUD has various security measures in place, such as trained staff, the extra security would prevent any unfortunate violence.
As per Govtech, the list of measures to combat this issue include:
Discussion and inquiry of new services to be held at the town’s service building “secure lobby.” The lobby would be constructed soon.
Adding ballistic panels and more cameras to the headquarters lobby.
Providing more training on when to call PUD security staff for help.
Increasing visibility of uniformed security staff. Security staff are training to pay attention to negative body language to identify people who are agitated.
Assessing security at the Leavenworth and Chelan offices to determine what else may be needed. A trip to those offices is planned next week.
Creating the process for working with local law enforcement when power theft from illegal bitcoin operations is suspected.
Washington County’s Mining Moratorium
Previously on April 9, 2018, BTCManager on Chelan County’s blanket ban on mining activities, which caused a massive overload on the town’s electricity grid alongside the risk of fire.
An emergency moratorium was declared by the town’s public utility district, to make time for introducing appropriate electricity plans and dealing with the newly created electricity demand.
Miners were warned about the possible repercussions, including power disconnection, and hefty fines up to $11,400 for non-compliance of imposed laws. In case a miner continued activities after breaching these two laws, they would be prosecuted for power theft.
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Quoine, a cryptocurrency startup from Japan, has launched its ICO Mission Control platform, an all-in-one initial coin offering (ICO) execution service. The platform is initially being implemented into Quoine’s Qryptos exchange before being integrated into the forthcoming Liquid platform for which Quoine raised a staggering US$105 million in its token sale in late 2017. “ICO […]
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