Bank of Thailand: Cryptocurrencies Are Not To Blame For Recent Bitcoin Fraud Case

  • Bank of Thailand's governor has clarified that the recent bitcoin fraud case involving Thai actor Jiratpisit Jaravijit had nothing to do with "crypto trading."
  • The governor also noted that the $24 million bitcoin scam was a case of "misuse of money."
  • Three major banks in Thailand are suspected of being involved in the bitcoin fraud case.

Thailand’s central bank recently issued a statement regarding the fraud case involving Jiratpisit Jaravijit, a Thai actor who allegedly swindled a Finnish investor out of $24 million in Bitcoin (BTC). The nation’s central financial institution, Bank of Thailand (BoT), clarified that although the fraud was a serious crime, it did not occur “during crypto trading.”

Veerathai Santiprabhob, the governor of BoT, noted that the bitcoin scam was a case where “the money is used for the wrong purpose.” The high-profile fraud case is now being investigated by Thailand’s Crime Suspension Division (CSD) as eight suspects including Jaravijit, his family members, two local businessman, and an ex-military officer were interrogated by the authorities on Thursday.

Major Banks "Complicit" In Bitcoin Fraud

According to local news reports, Thailand’s three major banks including Kasikornbank, Bangkok Bank, and Siam Commercial Bank “are suspected of being complicit” in the bitcoin fraud case. A “whale” investor named Prasit Srisuwan, who works at the Stock Exchange of Thailand (SET), might also have been involved in the scam, media sources noted.

Additionally, CSD’s investigation revealed that the whale investor and the banks “handled transactions involving part of the swindled money.” Local authorities added that several employees working at the banks did not report many transactions of over 2 million baht ($61,000).

Failure to report such transactions is a major violation of Thailand’s anti-money laundering laws, the the Bangkok post noted. Despite the serious nature of this recent bitcoin fraud, Thailand’s government considers it to be a case mainly involving the “misuse of money” and not necessarily related to its local crypto industry.

Progressive Crypto Regulations

As CryptoGlobe reported, Thailand’s Securities and Exchange Commission (SEC) legalized seven cryptocurrencies in June for initial coin offerings (ICOs). They include Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), Stellar (XLM), and Ripple (XRP).

Additionally, Thailand’s SEC gave the green light to seven local crypto companies, which included five digital currency exchanges, to conduct business operations in the country. At present, the nation’s regulators are in the process of reviewing various other crypto-related applications.

More recently, as CryptoGlobe reported on August 5th, the BoT authorized all local banks to launch subsidiaries, which may provide certain banking services to digital currency investors. These services include offering brokerage services to crypto firms and investing in blockchain startups. The banks’ subsidiaries were also authorized to operate their own crypto businesses.

Fundstrat’s Tom Lee Explains How It’s Been ‘Confirmed’ That Crypto Winter Is Over

Siamak Masnavi

On Sunday (May 19), Thomas Lee, Co-Founder, Managing Partner and the Head of Research at independent research boutique Fundstrat Global Advisors explained why his firm believes that certain events that have occurred over the past six months "confirm" that crypto winter is over.

This is the tweet that Lee posted yesterday:

Although all of the 13 "signals" that are mentioned in Lee's tweet are interesting, in this article we are going to focus on those that we have seen during the past month or so (i.e. since mid April 2019), which means items 7–13 in Lee's list.

Adamant Capital's "Bitcoin in Heavy Accumulation" Report

This report was written by Tuur Demeester and Michiel Lescrauwaet, co-founders of Adamant Capital, and published on April 18. 

Here are some of main conclusions:

  • Bitcoin is in the last stage of the bear market, i.e. the "accumulation phase." More specifically, their analysis of the Bitcoin blockchain shows that "Bitcoin HODLers are committing for the long term again."
  • Bitcoin's fundamentals are improving as it gets embraced by both millennials, who tend to like disruptive technologies, and institutional investors, many of whom see Bitcoin as "an uncorrelated, highly liquid financial asset."
  • Bitcoin has the most "favorable" long term risk-reward ratio of "any liquid investment in the world."
  • We are going to "mass market adoption" of Bitcoin during the next five years.

Multiple OTC Brokers Reporting Surges in Trading Volumes

One example is Binance's OTC desk. On 17 April, Decrypt's Tim Copeland reported that, according to Binance CFO Wei Zhou, the "volume of over-the-counter Bitcoin trades" had "significantly risen" in April. The Binance CFO told Decrypt:

“Last month we saw a lot more volume than, say, three months ago. This was mainly due to the increase in price of Bitcoin and altcoins over the past few months. We’ve witnessed more trading activity—and demand."

Surge in On-Chain Activity

In a report published on May 6 (Volume 3, Issue 13), crypto research firm Diar had this to say about Bitcoin's on-chain activity:

"The number of transactions on-chain is also just shy of the all-time-high of December 2017. Since hitting a low in February of last year, month-on-month growth for the number of transactions has been clearly evident (see chart)."

Diar's 6 May 2019 Report - BTC - Onchain Activity Increase.png

As for Ether (ETH), this is what they said:

"776k Ether was transacted on DApps last month turning on-chain activity higher than the previous period for 4-months in a row. This year is the most prolonged period of growth in terms of transacted volumes DApps have witnessed, ever."

Willy Woo's Survey of Top Crypto Influencers, Analysts and Traders

Bitcoin's "Golden Cross"

As CryptoGlobe reported on April 23, this event, which had not been seen in around 3.5 years, was confirmed on that day.

Here is how Investopedia explains what a "golden cross" is and why it is significant:

"The golden cross is a candlestick pattern that is a bullish signal in which a relatively short-term moving average crosses above a long-term moving average. The golden cross is a bullish breakout pattern formed from a crossover involving a security's short-term moving average (such as the 15-day moving average) breaking above its long-term moving average (such as the 50-day moving average) or resistance level. As long-term indicators carry more weight, the golden cross indicates a bull market on the horizon and is reinforced by high trading volumes."

A "classic" golden cross is defined as one "when the 200 and 50 day moving averages cross, with the 50 crossing above the 200," and indeed this is what happened on April 23. 

Market's Calm Reaction to New York Attorney General's Court Order Agaist Bitfinex and Tether

As you probably know, on Thursday (April 25), New York Attorney General ("NYAG") Letitia James issued a press release to announce that her office had obtained a court order against iFinex (the operator of Bitfinex) and Tether Limited (the issuer of stablecoin Tether) "enjoining" the two firms "from further violations of New York law in connection with an ongoing activities that may have defrauded New York investors that trade in virtual or 'crypto' currency." 

Consensus 2019 Conference

The Consensus 2019 conference (May 13–15 in New York City) delivered several pieces of good news, two of which are listed below:

  • Crypto payment network Flexa announced that via a partnership with the Winklevoss Twins' digital asset exchange Gemini it was able to bring the "limited launch of its network and mobile app to enable instant cryptocurrency payments in stores and online for several retail merchants." These merchants include Amazon’s Whole Foods and Barnes & Noble. Flexa said that its new SPEDN mobile wallet app would allow merchants to "easily accept bitcoin, ether, Bitcoin Cash, and the Gemini dollar."
  • Kelly Loeffler, the CEO of Bakkt announced that Bakkt is working with its customers "over the next several weeks to prepare for user acceptance testing (UAT) for futures and custody" (expected to start in July).

Chart Courtesy of Diar Research