Hawks investigate cryptocurrency CEO after investors cry foul
The Polokwane Hawks are investigating a case in which several investors laid charges against the CEO of a cryptocurrency company after he allegedly sent them fraudulent proof of payment via his company, VaultAge Solutions.
VaultAge Solutions, which started in 2018, trades in Bitcoin on behalf of its investors.
Hawks spokesperson Captain Matimba Maluleke said Willie Breedt was under investigation for fraud.
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One investor from Mookgophong, formerly known as Naboomspruit, in Limpopo told News24 that only after he threatened to take legal action against Breedt, did he receive a proof of payment (PoP) document indicating that R141 500 was paid into his account.
However, when the payment reflected in his account, he found that only R1 415 had been deposited.
He claimed the PoP document, which News24 has seen, was tampered with. This prompted him to report the matter to the Hawks.
Another investor, from the Western Cape who wanted to remain anonymous, had a similar experience. He only received R20 000 instead of the R2 million he was expecting. He also approached the Hawks.
Several other investors, including an administrator who worked closely with Breedt, handed affidavits over to the Hawks, Maluleke said.
In a written reply to News24, Breedt said he was aware of the criminal investigation against him but denied any wrongdoing.
Several more investors have since taken to social media to vent their frustrations.
A doctor from Pretoria said he invested R2 million but was yet to receive a cent.
In February, investors approached Breedt. To calm them down, he allegedly made them an offer. However, since then, no one has received any payments.
“We decided to rather fold, not hold,” a frustrated investor said.
An investor from the Lowveld said he invested about R180 000 in November last year.
“In January, I pleaded with Breedt to refund my money.”
“I eventually received a personal notice from Breedt to check my account as the R181 000 was paid over. I still haven’t received anything,” the investor alleged.
On 29 April, Breedt send an email to investors with a list of 168 people who he said would be paid within two or three days.
He said they “moved big amounts in Bitcoin” to ensure payments can be done.
However, only a few allegedly received five percent payments. An investor said: “(This is) sad, that is around $70 000 for me!”
In his response to News24, Breedt blamed a cryptocurrency payroll system for the problems.
He said there was “a technical issue that we are currently still experiencing” since November last year.
Author: Buks Viljoen, Correspondent
- Countdown to bitcoin halving: analysts outdo each other with extreme short-ends
- First Mover: Bitcoin’s ‘Halving’ Is Coming Even Sooner Than You Realize
- Bitcoin Price Forecast: Can BTC/USD break into the $9,500 zone this Thursday?
- Bitcoin daily chart alert – Bulls in firm command – May 7
- Bitcoin world faces ‘halving’: what’s happening?
Countdown to bitcoin halving: analysts outdo each other with extreme short-ends
Just a few days before the third bitcoin halving, many self-proclaimed crypto experts outdo each other with our price targets, forecasts and analyzes and thus damage the reputation of Bitcoin and Co.
First Mover: Bitcoin’s ‘Halving’ Is Coming Even Sooner Than You Realize
Bitcoiners planning around next week’s “halving” on the blockchain network need to keep checking their countdown clocks: Every time they look, it seems it’s coming a little sooner.
Last week, Michael Maloney, chief financial officer of Coinmint LLC, a Puerto Rico-based cryptocurrency mining company with operations in upstate New York, examined data from the Bitcoin blockchain and estimated the halving would take place around 1 a.m. New York time on Tuesday, May 12. But on Wednesday he looked again, and it now appears to be arriving on Monday around 7:45 p.m.
The earlier arrival of the once-every-four-years event, which has engendered an almost cult-like obsession among some cryptocurrency bulls, is the product of bitcoin’s recent price surge above $9,000, at a time when some computer operators on the network have already been pushing to upgrade to faster, more efficient machines.
“Bitcoin prices are up, so a ton of more people are putting on gear,” says Dave Perrill, CEO of Compute North, a cryptocurrency mining firm based in the Minneapolis area. “That’s why you’re seeing it get quicker.”
Bitcoin was launched in early 2009, in the wake of the last financial crisis, and next week’s halving will be the network’s third. Some investors say the event is a catalyst for higher prices, though in the past such rallies have played out over timeframes of months or even years, not instantaneously. Other analysts argue that the whole thing is overblown, and that it’s really just hype and speculation around the halving that might drive prices higher.
Whatever the case, the halving is marching ever closer – and apparently coming faster than most computer operators on the network, known as “miners,” had penciled in.
The halving is an arcane and automatic process built into the cryptocurrency’s 11-year-old design. When it happens, the number of bitcoin awarded to miners for helping to secure the distributed network gets cut in half. In next week’s halving, the number of bitcoin awarded per data block will drop to 6.25 from 12.5. At current prices levels, that represents a loss of about $58,000 in revenue per data block.
While such milestones are supposed to arrive roughly every four years, the actual date and time can vary based on the level of activity taking place on the underlying blockchain network. Officially, halvings happen after every 210,000 data blocks confirmed on the blockchain network; each block is supposed to take about 10 minutes, on average.
But a recent surge in the computing power devoted to the distributed network – known as hashrate – has sped up the creation of new data blocks. That, in turn, has accelerated the march toward the halving, officially set to take place at block number 630,000. As of Wednesday around 6 p.m. in New York, the network was at block 629,263.
In anticipation of the halving, miners have been upgrading their computers – “rigs” in the industry jargon – to newer models produced by manufacturers like China’s Bitmain and Canaan Inc.
It’s widely expected that most of Bitmain’s popular workhorse S9 models, considered state-of-the-art when they hit the market in 2016, will become obsolete after the halving. Since revenue will drop by half, miners will have to spend roughly twice as much on electricity just to get the same number of bitcoin.
In fact, according to Maloney, many of those older-generation mining rigs dropped off the network when prices plunged below $5,000 in March amid the coronavirus-induced sell-off.
But bitcoin has come roaring back, and it’s now up a staggering 30% in 2020, remarkable for a fresh-faced digital asset that the billionaire investor Warren Buffett described in February as having “no value.” Such returns are nearly three times the year-to-date gains for gold – a traditional inflation hedge that many investors have sought out as governments and central banks around the world announced trillions of dollars of coronavirus-related aid and monetary stimulus. The Standard & Poor’s 500 Index of U.S. stocks is down 12%, while the shares of Warren Buffett’s Berkshire Hathaway are down 24%.
The price rally has made it profitable for the older-generation cryptocurrency mining rigs to come back online, squeezing out another week or more of profitability before the reduction in mining rewards hits.
“If the price action is positive, all the miners who can mine will be mining,” Coinmint’s Maloney said in a phone interview.
In the meantime, the anticipation and hype around the halving has continued to build within the cryptocurrency industry, especially with indications mounting that some institutional investors are considering bigger allocations to bitcoin; the implication is that demand for the digital tokens will continue to rise even as the pace of new supply gets cut in half.
“In my view, I see the halving as the start of the new supply-and-demand equilibrium,” Danny Scott, CEO of the six-year-old, U.K.-based bitcoin exchange CoinCorner, wrote Wednesday in an email. “The event itself can be compared to the likes of New Year’s Eve. There’s typically a big build up.”
Coin Metrics, a digital-asset investment firm, wrote Tuesday in an emailed report that while miners may face a steep drop in profitability, “for the majority of the crypto community, this is a fun, speculative exercise with relatively low stakes.”
Based on the recent trend, the fun looks to start sooner rather than later.
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BTC: Price: $9,294 (BPI) | 24-Hr High: $9,408 | 24-Hr Low: $9,065
Trend: With mining reward halving just a few days away, bitcoin is eyeing notable gains above the resistance of the trendline falling from June 2019 and February 2020 highs.
At press time, the cryptocurrency is trading just above the trendline resistance (currently at $9,280), having found bids around $9,030 during the Asian trading hours.
The bulls have failed twice in the last week to keep gains above the 11-month trendline hurdle and another rejection looks likely if we consider the above-70 (overbought) reading on the 14-day relative strength index. In fact, the indicator is hovering at the highest level since June 2019.
However, other indicators are supportive of a continued rally. For instance, the positive reading on the Chaikin money flow shows buying pressure is stronger than selling pressure. The five- and 10-day averages are trending north, too, indicating strong bullish momentum.
The overbought reading on the RSI would become valid if and when the price chart shows signs of buyer exhaustion. Currently, the price chart looks constructive, with the lower wicks attached to the previous three daily candles indicating dip demand.
As a result, a convincing move above the long-term trendline hurdle looks likely. On the way higher, the cryptocurrency may encounter resistance at $9,485 (April 30 high), which, if breached, would shift the focus to $10,000.
The bias would turn bearish if the spot price drops below $8,528, the low of Monday’s long-legged doji candle. Most observers are of the opinion that fear of missing out, or FOMO, buying ahead of the reward halving, supposedly a price-bullish event, will likely ensure that price pullbacks, if any, will be short-lived.
Author: Zack Voell
Bitcoin Price Forecast: Can BTC/USD break into the $9,500 zone this Thursday?
BTC/USD went up slightly from $9,158.31 to $9,172.30 in the early hours of Thursday as it trends in an upwards channel formation. The bulls will want to gain enough momentum to cross above the red Ichimoku cloud and enter the $9,500 zone. On the downside, healthy support lies at $9,187 and $8,826.75. The SMA 20 has crossed over the SMA 200 to chart a bullish cross pattern. The MACD indicates increasing bullish momentum, while the RSI indicator is trending inside the overbought zone at 74.50 which means that a short-term bearish correction may be around the corner.
Bitcoin daily chart alert – Bulls in firm command – May 7
(Kitco News) – Bitcoin-U.S. dollar prices are higher early Thursday. A price uptrend is firmly in place on the daily chart and bulls have the solid overall near-term technical advantage—to suggest sideways-to-higher price action in the near term. “The trend is your friend” for the Bitcoin bulls. Stay tuned.
By Jim Wyckoff
Bitcoin world faces ‘halving’: what’s happening?
Bitcoin miners, whose computer processors enable the running of the world’s most popular virtual currency, will soon face an event that takes place every four years and alters the profitability of the hi-tech industry.
So-called halving is when cryptocurrency-mining companies and individuals find out the reduced payment that they will receive in return for their contribution to the system’s smooth operation.
Bitcoin was created in 2008 by a person or group writing under the pseudonym Satoshi Nakamoto as a peer-to-peer decentralised electronic cash system.
The virtual unit was once the preserve of internet geeks and hobbyists but it has since exploded in popularity, with mining performed by huge banks of computers.
– How does mining work? –
Bitcoins are traded via a decentralised registry system known as a blockchain.
The system requires massive computer processing power in order to manage and implement transactions.
That power is provided by miners, who do so in the hope they will receive new bitcoins for validating transaction data.
The system poses a complex computer puzzle to decide which miner wins the privilege to validate the block and thus receive the reward.
“To understand halving, it is important to remember the role of miners, who are basically responsible for the bitcoin network security,” ThinkMarkets analyst Fawad Razaqzada told AFP.
“Each time a block of bitcoin transaction takes place, they need to be verified by miners. The miner that verifies each block gets a reward for its work with more, newly created, bitcoins.”
– What is halving? –
This occurs every four years and basically involves the halving of the reward from bitcoin mining.
The cryptocurrency’s first “halving” occurred in November 2012, and the second in July 2016. The third is widely expected to take place around next Tuesday.
“Halving will impact profitability of mining bitcoin because work and resources will need to double in order to achieve the same reward as before,” added Razaqzada.
“However, if the value of bitcoin appreciates significantly then this will offset some of the costs.”
Commercial mining operations often occupy huge hangers or warehouses, and consume large amounts of electricity to power and cool the computers, which is a considerable cost in addition to equipment.
– Why reduce the reward? –
The reward was originally set at 50 bitcoins but it was subsequently reduced to 12.5 and will likely reach just 6.25 next week.
The amount has been trimmed over time in order to implement an overall global limit of 21 million bitcoins.
“With the supply of bitcoins mandated to eventually reach the limit of 21 million, the creator(s) of the digital currency had decided that these rewards must decay exponentially, otherwise supply will not be controlled,” added Razaqzada.
“So, the network is programmed to cut the reward every 210,000 blocks, or about every four years,” he said, noting that the halving date depended on mining activity.
– What is bitcoin worth? –
Bitcoin stood late Tuesday at $9,200 after a choppy few months linked to coronavirus markets turmoil.
That compares with $7,100 at the start of the year, according to Bloomberg data, but it remains far from the record high $19,511 hit in December 2017.
“February and March were rough months for bitcoin like other risk assets, but the digital currency has staged the most impressive recovery,” said Razaqzada.
“This is partly due to the fact some investors consider bitcoin to be a safe-haven asset, while some have undoubtedly bought speculatively ahead of the so-called ‘halving’ event in anticipation (that) we may see the value of the cryptocurrency appreciate.”
© 2020 AFP