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Three individuals are currently out on bond in Zambia after being arrested over charges related to a cryptocurrency investment scheme they had operated.

The three suspects — Hilda Agnes Raubenheimer, Orient Rio Zekko, and Tapiwa Chirwa — are directors of cryptocurrency investment firm Heritage Coin Resources Limited, per the Zambian Watchdog. They allegedly collected more than 28 million Zambian kwacha (approximately US$2.4 million) from prospective investors who were promised that the money would be invested in cryptocurrency.

According to the Anti-Money Laundering Investigations Unit of Zambia’s Drug Enforcement Commission, the trio collected “K28,346,800.00 by purporting that the company was investing the money collected as partnership fees from the public into Cryptocurrency trade on the web on behalf of the partners when in fact not.”

The three now face charges of engaging in money laundering activities, obtaining money by false pretenses, participating or conducting a money circulation scheme, and operating an unlicensed financial business between June and mid-October.

Bitcoin Not Legal Tender

This comes less than a month since Zambia’s central bank indicated that cryptocurrencies are not legal tender in the country, as CCN reported.

Bitcoin is Not a Legal Tender in Zambia, Says Central Bank https://t.co/acdhDVaEfK

— CCN (@CryptoCoinsNews) October 14, 2018

While issuing the statement on cryptocurrencies, the Bank of Zambia disclosed that it had done so in public interest after receiving inquiries related to the legal status of bitcoin in the southern African country:

“Cryptocurrencies are not legal tender in the Republic of Zambia; Secondly, BoZ does not oversee, supervise nor regulate the cryptocurrency landscape. Consequently, any and all activities related to the buying, trading or usage of cryptocurrencies are performed at owner’s risk,” the Bank of Zambia said in a press release.

Public Interest

At the time, the apex bank of the landlocked African country claimed it was issuing the statement to “safeguard the interests of members of the public and to maintain the integrity of the financial system in Zambia.” Among the risks the bank claimed it was protecting Zambians from included fraud and hacking attacks for which no legal recourse is available in the country.

To its credit, however, the BoZ added that it would ensure that regulation does “not constrain but enable innovation.”

The cryptocurrency stance of the central bank of Zambia is similar, if not a little better, to that of its neighbor to the south, the Reserve Bank of Zimbabwe. This is despite the country formerly known as Southern Rhodesia having the ripe environment for cryptocurrencies as it is not only undergoing a cash crunch but currently uses a variety of foreign currencies including the South African rand and the US dollar.

Earlier this year, the Reserve Bank of Zimbabwe banned all commercial banks and financial institutions in the country from processing crypto transactions for exchanges, traders and investors. But despite the High Court lifting the ban, crypto exchanges in the country still face numerous obstacles.

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Square, the merchant payment service provider which thrives on its mobile card readers and applications, has posted its third-quarter shareholder report, and it includes $43 million in bitcoin revenue.

Slim Margins on Bitcoin

Overall, they’ve made 51 percent more than they did last year up to this point, and revenue is 68 percent better than they did during the same quarter of last year. BTC sales are one of its smallest components, but they still represent a notable portion of total revenue — around 5 percent.

They mention that their adjusted revenue figures reflect a deduction of bitcoin transaction costs, noting that:

“We deduct bitcoin costs because we consider our role in the bitcoin transactions to be facilitating customer access to bitcoin. Since we only apply a small margin to the market cost of bitcoin when we sell bitcoin to customers, and we have no control over the cost of bitcoin in the market, which tends to be volatile, we believe deducting bitcoin costs is a better reflection of the economic benefits as well as the Company’s performance from the bitcoin transactions.”

Actual profits on the BTC revenues were therefore roughly $500,000, about 20 percent more than what they made in the previous quarter on the same product. Square has yet to add a variety of cryptos to its offerings, but when or if it decides to do so, we expect these revenues to increase as they can likely have higher margins on cryptos that are perceived as harder to acquire using traditional means.

Square on Pace to Become Leading Crypto Provider

Square’s Cash App allows people to digitally transact money much like PayPal, and also allows users to invest in the most prominent cryptocurrency. They secured a patent for their payments network earlier this year, potentially locking themselves in as the premier bridge between legacy payment rails and cryptocurrencies.

As CCN reported, Square brass have previously noted that cryptocurrency and BTC, in particular, is a “transformational” technology.

Given that Square is used for many purposes besides investing in or holding BTC, it’s likely to continue growing as a premier crypto provider and gives the added benefit of exposing its massive user base to cryptocurrencies.

The firm’s Cash App has more than 10 million installs on the Google Play store and provides a seamless crypto purchasing experience. In this respect, they are light years ahead of PayPal, who have yet to integrate cryptocurrency in any meaningful way, despite several notable rumors over the years. As of now, one can still not simply purchase crypto through his or her PayPal wallet, a feature that Square Cash now has.

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Partisans in the looming Bitcoin Cash civil war now have the opportunity to put their money where their mouths are, and that money is quickly piling up on one side of the debate.

Poloniex Opens Pre-Fork BCH Market

Earlier today, cryptocurrency exchange Poloniex became the first crypto trading platform to allow users to trade coins on both sides of the contentious hard fork, which is scheduled to activate on the BCH network on Nov. 15.

From the announcement:

“We believe the responsible thing to do in this case is remain neutral and allow the community to decide which chain to support, and we want to empower the community to demonstrate their support through trading activity. This is the first time we are offering pre-fork trading and it is part of a broader effort to make Poloniex one of the most innovative exchanges in the world. Going forward, we will evaluate each hard fork individually and decide whether to support the fork or to offer pre-fork trading.”

The bitcoin cash price had risen considerably in the lead-up to the fork, as investors clamored to position themselves to receive the “BCH airdrop.” Now, even before the fork activates, they can begin to cash out.

To trade the pre-fork tokens, users must deposit bitcoin cash on the Poloniex platform and then use the conversion tool to split the coins into an equivalent number of “Bitcoin Cash ABC” (BCHABC) and “Bitcoin Cash SV” (BCHSV). Users can also convert back into BCH and withdraw their coins, but for obvious reasons, BCHSV and BCHABC may not be withdrawn until sometime after the fork.

Initially, each BCH token will trade against bitcoin (BTC) and USD Coin (USDC), the stablecoin backed by Circle, Poloniex’s parent company. Notably absent is tether (USDT), the controversial-but-highly-liquid stablecoin.

Following the fork, Poloniex will support both BCHABC and BCHSV, stating in the announcement that “the responsible thing for an exchange to do is remain neutral.” The firm said that it would manually implement replay protection for withdrawals to prevent attackers from stealing funds from the exchange.

However, such replay protection — which prevents a malicious user from broadcasting a transaction on both sides of the fork — does not exist in the wild, so users should be careful about moving their funds if they intend to hold coins on both sides of the fork. That’s particularly true since SV backer Craig Wright — whose firm, nChain, is leading the development of the SV software — has suggested that SV miners could blacklist certain addresses that spend funds on the ABC chain.

Nov. 15 Bitcoin Cash Hard Fork: a Rundown

As a heads up…

Any DSV spend will eventually be blacklisted on SV.

You support DSV, then, you will have unspendable coin.

Watch.

2 years. That is my limit for now, No sale unless this ends or it remaims bitcoin

— Dr Craig S Wright (@ProfFaustus) November 2, 2018

According to its development roadmap, Bitcoin Cash hard forks semiannually to ensure that developers have a regular opportunity to introduce new upgrades into the protocol, including those that would render the new software incompatible with previous versions.

These planned hard forks were intended to stave off disagreements about whether and when the cryptocurrency should activate these protocol upgrades, which require all full node operators to upgrade their software to the latest version. Nevertheless, the Nov. 15 hard fork — just the second since BCH forked away from Bitcoin — has been hotly debated, as various development groups have significant disagreements about which upgrades should, and should not, be activated on the network.

One particular subject of contention is the manner in which Bitcoin Cash should accommodate smart contracts and BCH-based crypto tokens. Unable to reach a compromise, two development groups, Bitcoin ABC and Bitcoin SV, have launched competing BCH implementations that will be incompatible once the fork activates on Nov. 15.

Traders Place Their Bets on BCHABC

While Poloniex’s new trading pairs allow investors early access to their “crypto dividend,” these pre-fork markets are useful for more than just allowing traders and investors to double down on their bets about the outcome of the fork. They also, in the aggregate, provide valuable information about which chain the market believes has more economic viability.

Such pre-fork markets were popular prior to both the original hard fork that split Bitcoin Cash away from the main Bitcoin network last August, as well as the planned SegWit2x fork that failed to activate on Bitcoin last December.

This fork will not activate for a full week, but early returns show that traders are much more confident in BCHABC’s ability to retain its value, at least over the short-term. At present, BCHABC is trading at $535 against USDC, nearly six times above BCHSV, which is priced at just $90.

Notably, the pre-fork tokens are collectively trading at $625, almost $40 above the value of BCH itself, which stands at $587 as of the time of writing. That should change as these markets grow more liquid.

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Led by ripple (XRP), the bitcoin and the altcoin markets edged lower on Thursday after staying on the bulls’ side for most of the week.

Ripple Price Headlines Pullback

The cryptocurrency market as a whole witnessed their uptrends getting stalled. Other top performers during the previous rally, including stellar (XLM), bitcoin cash (BCH) and EOS, underwent a sharp pullback action. However, they managed to hold on to some of their gains despite being unable to sustain their prevailing bullish momentum.

The crypto correction coincided with the pullback session of US stocks. The S&P 500 and the Nasdaq also rebounded from their rallies as dollar regained strength ahead of the Fed meeting. While a direct correlation between the dollar and crypto markets is difficult to establish, the fact that both the new and the old market corrected in sync with each other raises questions, anyway.

With the strongest altcoins holding above their medium-term supports, their fiat-enabled pairs could also be forming bull flags. It means that a bearish correction could have been caused by day traders exiting their long positions, suggesting that an upside trend should resume after locating an interim support — a bounce back level.

XRP, for instance, became one of the best performing crypto assets after rising 26.94 percent, from $0.449 to $0.570. The coin later erased circa 14 percent from its gains, now trading at $0.507, which also happens to be above the rising channel support, depicted in orange to the downside. The interim mood should start to favoring bears upon a successful breakdown action below the said rising support level.

There were also reports that XRP rallied after the news of its integration into a global payment standard SWIFT, and corrected after the agency dismissed the rumor altogether. Any such correlation could not be established by the time of this writing.

Bitcoin Upside Capped

The cryptocurrency locomotive bitcoin also found its rally capped by its 100-period simple moving average — the third time now. The average is depicted in sky blue in the daily chart above, defining bitcoin’s inability to recapture the bulls near such resistance levels. Nevertheless, the pullback is not that severe, but can certainly extend towards the range support defined by $6,203. A breakout, on the other hand, puts the next resistance pressure on $6,600, followed by $6,750 and $7,000 in medium-term.

High Volume in BCH/USD Market

Unlike XRP and bitcoin, bitcoin cash is witnessing a surge in volume in the time of its pullback action. It should appear natural ahead of an impending fork event that would split the BCH blockchain into two separate networks. Traders are likely to hold BCH coins in hopes to receive airdropped tokens that may or may not have some value in the future.

As of now, bitcoin cash is looking to attempt a breakout action above the latest medium-term descending triangle resistance. It would allow the pair to test $663 as its potential upside target while eyeing $788 to confirm a longer bullish bias. To the downside, an extended pullback would pull the value towards the 100-period moving average (sky blue), a support level, while setting $407 as the primary downside target.

Stellar Strongest among Top 10

Stellar is comparatively stronger than the rest of the top coins, now trending sideways following the hint of a strong pullback action. The coin against the dollar has almost negated the losses it faced during the bearish correction. It is now hinting a sideways action while keeping its eyes on a potential selling action towards. Should that happen, the near-term rising trendline coinciding with the 100-period SMA could provide a decent support for a potential bounce back. A further break and the same pressure would fall on the medium-term support further below.

Disclaimer:  The author currently holds bitcoin, bitcoin cash, and stellar for both short and long-term investments.

Featured Image from Shutterstock. Charts from TradingView.

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Speculation that RippleNet and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) were planning to integrate may have caused the market cap of ripple (XRP) to briefly overtake that of ethereum to take the second position in the overall crypto market.

SWIFT Says it isn’t Joining RippleNet

This was based on the belief that with the integration, RippleNet — an enterprise blockchain which does not use XRP — would serve as a gateway to convincing SWIFT members to adopt XRP-integrated Ripple products like xRapid in the future.

Fueling the rumor was the fact that SWIFT had announced that beginning in November its new standard in cross-border money transfers, SWIFT global payments innovation (GPI), would be upgraded with the GPI tracker being extended to all payment messages for 11,000 banks on the network across 200 countries. With this upgrade, the rumor went, about 4,000 banks would now get access to Ripple products.

However, these rumors have been dismissed by SWIFT, according to Finance Magnates. Through its public relations firm, the bank-owned payments network that was founded more than four decades ago denied that the upgrade had anything to do with RippleNet:

“I’m not sure where those rumours are coming from but the upcoming standards release … is entirely unrelated to RippleNet.”

Possibly also contributing to the speculation are some developments which have taken place in the last couple of years. In April of last year, for instance, Ripple hired a former SWIFT executive who was responsible for selling its GPI offering, Marjan Delatinne, as its sales director for Europe.

Worlds Apart in Terms of Speed

Speed, transparency and traceability. With #SWIFTgpi, we are proud to be delivering on our #payments promises to the global community. https://t.co/4p5TTETneY #InsistOnSWIFT pic.twitter.com/XI6YiUEwdv

— SWIFT (@swiftcommunity) November 5, 2018

Had the speculation been true, such a partnership could potentially have seen SWIFT greatly benefit from the RippleNet, especially with regards to transaction speeds. While RippleNet claims it can route “payments efficiently and leverage instant settlement to transact in seconds,” SWIFT says that even with the upgrade, only 50% of the SWIFT GPI payments are credited in under half an hour — and SWIFT thinks that this is worth bragging about.

Prior to the brief “flippening” earlier this week, the market capitalization of XRP had overtaken ethereum’s a couple of times this year, as CCN had previously reported.

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