Read news from:
Austria
SHARE
COPY LINK

BITCOIN

Illegal Bitcoin trading ring busted in France

An illegal Bitcoin trading network worth €200,000 was busted by French police, authorities revealed on Monday. It's the first time an illegal trading ring of the virtual money has been broken up in Europe, police chiefs in France claimed.

Published: 7 July 2014 14:33 CEST
Illegal Bitcoin trading ring busted in France
French police have smashed an illegal Bitcoin trading ring, the "first in Europe" to be busted. Photo: Getty/AFP

French police said on Monday they had smashed an illegal Bitcoin trading network, seizing virtual currency worth €200,000 ($272,000) in the first such operation in Europe.

Two people have been charged and are in custody following raids last week in the French southern cities of Nice, Cannes and Toulouse and in Brussels that led to the seizure of 388 bitcoin.

“This is the first time that an illegal exchange platform for Bitcoin like this one has been dismantled in Europe,” a police statement said.

The two men charged are a 27-year-old Tunisian who ran the website trading in Bitcoin and his suspected accomplice, a 36-year-old Frenchman.

SEE ALSO: First Bitcoin ATM arrives in Austria

Virtual currencies, most famously Bitcoin, have come under increasing scrutiny by financial regulators as their popularity has grown.

Launched in 2009 by a mysterious computer guru, Bitcoin is a form of cryptography-based e-money that offers a largely anonymous payment system.

Backers say virtual currencies allow for an efficient and anonymous way to store and transfer funds online.

But regulators argue the lack of legal framework governing the currency, the opaque way it is traded and its volatility make it dangerous.

In France, platforms that exchange Bitcoin and euros have to be approved by the ACPR, the bank and insurance supervisory body.

Police found that the website run by the two suspects had not been authorised by the ACPR, and charged them with undeclared work and illegally acting as a banker.

The Tunisian suspect was also charged with money laundering.

French banking authorities have expressed the need for caution around the use of the virtual money noting that it is not only highly volatile but also unregulated by authorities.

The Bank of France is sceptical about the currency, and in December last year underlined that the “highly speculative” currency poses a “certain financial risk” to users.

“Even if the high volatility of the bitcoin is of possible interest for individual or professional speculators, they should be aware of the risks they are taking,” the bank said.

Bitcoin recently made headlines when the US Federal Bureau of Investigation closed the Silk Road website where illegal drugs, forged documents, hacker tools and even the services of hit men were hawked with payments made using the virtual currency.

The FBI seized 26,000 bitcoin worth $3.6 million at the time.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

ENVIRONMENT

Mining bitcoin uses more energy than Denmark: study

Extracting a dollar's worth of cryptocurrency such as bitcoin from the deep Web consumes three times more energy than digging up a dollar's worth of gold, researchers said Monday.

Published: 6 November 2018 09:15 CET
Mining bitcoin uses more energy than Denmark: study
Photo: AP Photo/Kin Cheung, File/Ritzau Scanpix

There are now hundreds of virtual currencies and an unknown number of server farms around the world running around the clock to unearth them, more than half of them in China, according to a recent report from the University of Cambridge.

Mining virtual currencies with a real-world value, in other words, carries a hidden environmental cost that is rarely measured or taken into account.

“We now have an entirely new industry that is consuming more energy per year than many countries,” said Max Krause, a researcher at the Oak Ridge Institute for Science and Education and lead author of a study in the journal Nature Sustainability.

“In 2018, bitcoin is on track to consume more energy than Denmark,” he told AFP.

Denmark consumed 31.4 billion kilowatt hours in electricity in 2015. As of July 1st of this year, Bitcoin mining used up approximately 30.1 billion kilowatt hours, according to the study.

The highly competitive practice of mining cryptocurrencies requires hundreds, even tens of thousands, of linked computers running intensive calculations in search of the Internet equivalent of precious metals.

New coins are awarded to those who complete calculations first, with the transaction confirmed and entered into the currency's shared public ledger, known as the “blockchain”.

The top 100 cryptocurrencies have a current market value of about $200 billion (175 billion euros), according to the website coinmarketcap.com.

Bitcoin accounts for more than half of that amount.

“We wanted to spread awareness about the potential environmental costs for mining cryptocurrencies,” Krause said.

“Just because you are creating a digital product, that doesn't mean it does not consume a large amount of energy to make it.”

The movies, music and videos that billions of people stream every day all have measurable environmental costs, earlier research has shown.

For the study, Krause and Thabet Tolaymat, an environmental engineer based in the United States, calculated the average energy consumed to create one US dollar's worth of four top virtual currencies — bitcoin, ethereum, litecoin and monero — over the 30-month period up to June 2018.

That amount was 17, 7, 7 and 14 million joules, or megajoules (MJ), respectively.

A joule is a unit of energy equivalent to the work required to produce one watt of power for one second.

That is up to three times the energy needed to excavate gold, platinum or copper, they found. Of the metals examined, only aluminium — at 122 MJ per dollar's worth — was more energy intensive.

A complete calculation of the environmental cost of virtual currencies would take into account the banks of computers used to mine them.

“The computers are made with gold and other precious metals,” said Krause.

“They are run aggressively, which means the hardware is destroyed much quicker than you or I would expect for regular use — maybe a year instead of five or ten.”

READ ALSO: Denmark set wind power record in 2017: ministry