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Daily fraud update: 8th October

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Van Eck director comes out in favour of Tether

A director of an investment management firm in the US has decried “hoodwink academics” and endorsed a company which is currently facing accusations of fraud.

Gabor Gurbacs, who is a director and a digital assets strategist at Van Eck, said that he was in favour of Tether and Bitfinex.

“I am tired of hoodwink academics, hype-media and uninformed lawyers discrediting the hard work & structural innovation that @Tether_to and @bitfinex built. They built services for #bitcoin & #crypto companies that others failed to provide. Stop the witch-hunt; protect innovation!” he wrote on social networking site Twitter.

He then went on to list some reasons why he believed Tether constituted what he described as “structural innovation”.

He said it “upgrades USD transfer speed & access” and can be “deployed on multiple blockchains”, and that it is also the “first & largest stablecoin with billions in assets”.

However, Tether has recently been accused of fraud.

There is now a class-action lawsuit in place against it, and there is an accusation that it caused more than $1T worth of damage to the plaintiffs.

Tether is a crypto coin which is pegged to the US dollar.

It has also been accused of attempting to push up the trading level of Bitcoin through artificial means.

European Commission could be set to regulate crypto coins

The European Commission announced this week that it may well bring in new regulations designed to ensure that crypto coins, such as Facebook’s Libra, are appropriately managed.

The move comes from Valdis Dombrovskis, who serves as the Commission’s vice president for the euro, social dialogue and financial services.

According to press reports, Dombrovskis – who previously served as prime minister of Latvia – specifically highlighted the offering from Facebook as one of the reasons why the new legislation was required.

“Europe needs a common approach on crypto-assets such as Libra. I intend to propose new legislation on this”, he was quoted as saying.

He also apparently laid into the risk that cryptocurrencies posed in relation to specific problems.

According to press reports, he said these included “unfair competition, cybersecurity, and threats to financial stability”.

It is understood that the European Commission is concerned that Libra could cause problems in relation to competition in the region.

This comes after Bruno Le Maire, who serves as finance minister of major European economy France, said that Libra was a direct threat to what he called the “monetary sovereignty” of countries.

Libra has been hit by all kinds of problems since it was first announced by Facebook.

Recently, it was revealed that major international payments name PayPal had pulled out of the consortium supporting it.

There is widespread scepticism of Facebook’s offering across the continent, and it is expected to be a major frontier on the battle for Libra’s widespread adoption and sustainability.