$368 Million in Gold Falls From Airplane, Bitcoin’s Advantage Over Traditional Assets

There have been a lot of stories in the news about people throwing away fortunes in Bitcoin as part of the general hysteria around cryptocurrency but a recent incident in Russia where a plane lost tons of gold and silver shows that hard currency is just as likely to go missing.

Russian Plane Drops Payload of Gold

The story of the British man who threw away a hard drive with 7,500 Bitcoin on it in a landfill and then sought permission to comb through the 350,000 tons of rubbish has been in the world press since late 2017.

There is also the story of the Hypnotherapist in the US state of South Carolina who charges one Bitcoin plus %5 of recovered funds to put people under and regress their memories in order to recover forgotten passwords.

These stories often come under headlines like the craziest things people do to recover lost Bitcoin and are written in a way to highlight that it’s not just the people that are crazy but the idea of Bitcoin and digital currency in general.

This presumption leaves out the fact that people, institutions, and governments lose huge amounts of fiat, hard cash all of the time.

Just yesterday a Russian Cargo plane that had stopped to refuel on its way from a Siberian gold mine lost part of its payload of over 200 bars of Dore, a gold-silver mix.

The 3.5-ton weight of bars were scattered over a remote area that was immediately closed down so locals couldn’t make off with any of the precious metals. In the end, officials reported they have recovered all of the 172 of 200 bars that fell from the plane without giving any details of how.

US Military Turned to Electronic Payments

That may be just one isolated instance of a freak accident but there is the ongoing situation of US payments and cash hordes kept in Afganistan and Iraq during wartime activity gone missing.

Audits going back ten years continually show huge amounts of US dollars, usually as pallets of cash simply disappearing from ‘secure’ locations. In one case alone $6 billion went missing from an Iraqi bank.

The majority of this money was earmarked for salaries of Iraqi and Afghani service men and contractors working along the US forces as well as cash kept on hand to pay for equipment and supplies.

Eventually, the US government decided to end the problem of skimming and outright theft by paying electronically. Sending money directly to contractor and service men’s bank accounts.

So what is the safest way to store and move currency, an encrypted string of numbers or a pallet full of paper?

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Russian celebrity, organic food fan, cryptocurrency enthusiast, and co-creator of BioCoin, Boris Akimov, has decided to “tokenize” himself. Akimov, founder of Russian online organic food exchange LavkaLavka, will launch his own cryptocurrency, Akimov coin, on the Waves Platform, a blockchain system developed in Moscow. As of today, Waves has not issued any further details about the coin or its pre-sale date.

“It’s a simple idea in principle,” he says. “I have certain skills, knowledge, and experience, as well as my time — and that is what will be tokenized.”

Akimov coin owners are basically getting discount services for his agribusiness and e-commerce expertise. If demand for his time goes up, so does the value of his coin; If less people requires his time and services, then his coin gets priced accordingly.

“Let’s say I tokenize two days a week of my time, or 16 hours per week, for 832 hours per year. And let’s say that the token expires after four years. That’s 3,328 hours or 12 million seconds. So the plan is to create 12 million tokens, each of which can be redeemed for a second of my time and skills!” he says.


Akimov is one of the creators of Russia’s BioCoin, a so-called utility token that gives users discounts on organic foods and locally farmed products. As per the company, “BioCoin is a token that can help anyone build green future for the whole planet.”

According to its website, BioCoin can be exchanged for products and services in all stores and cafes that are members of the loyalty program. All customers of these companies receive BioCoins as rewards for the purchases of the companies’ products — as coins go up in value, customers benefit. Further, the company asserts that BioCoin can be integrated with many international loyalty systems and “turn” rewards given to clients into BIO token.


Alexey Ivanov, CEO of crypto-investors Polynom Crypto Capital in Moscow described Akimov’s undertaking as follows:

“It’s like buying the time of a popular consultant,” he says. “It’s the old basic principle of economy — time is money. He is tokenizing his time and selling it in advance.”

Akimov’s idea is certainly novel, but he’s not the first to “tokenize.” Moscow-based TokenStars (ACE), launched last year, uses a similar concept to tokenize celebrities and athletes. ACE token holders are investing in the time or the knowledge of athletes like tennis player Tommy Haas or footballer Giancarlo Zambrotta.

“We help promising talents raise funds by tokenizing their income, talent support and time,” says Pavel Stukolov, CEO of TokenStars. “A celebrity’s time is a precious and limited resource, which is a fundamental growth factor. They can do their own personal coin offering and get upfront payment for various exclusive interactions with fans,” he says. After obtaining a person’s token, fans can redeem them for things like meet and greets, lectures, or one-on-one training.

A team of Russian nuclear engineers have been arrested for allegedly using a powerful government supercomputer at the Federal Nuclear Center to mine Bitcoin. In a statement, the center’s press service said: “There has been an unsanctioned attempt to use computer facilities for private purposes including so-called mining.”

The supercomputer was not supposed to be connected to the internet — to prevent misuse — and once the scientists got online, the nuclear center’s security department was alerted. The scientists were then handed over to the Federal Security Service (FSB).

Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the blockchain. And cryptocurrency enthusiasts are rewarded lucratively for mining with a stash of newly minted cryptographically-signed Bitcoin.

The number of scientists has not been specified, but they are understood to have worked at the restricted Russian Research Institute of Experimental Physics (RFNC-VNIIEF), located in the city of Sarov, Nizhny Novgorod. Head of the institute’s press service, Tatyana Zalesskaya, confirmed the arrests to Russian news agency Interfax.

She added that she understood a criminal case has been brought against the engineers: “Similar attempts have recently been registered in a number of large companies with large computing capacities, which will be severely suppressed at our enterprises, this is technically a hopeless and criminal offense.”

The Federal Nuclear Center — the heart of Russia’s nuclear operations — reportedly employs up to 20,000 people and its supercomputer boasts a capacity of 1 petaflop, the equivalent of 1,000 trillion calculations per second. It’s a perfect fit, as mining cryptocurrencies requires great computational power and huge amounts of energy.

In the Cold War, the USSR’s first nuclear bomb was produced at Sarov, during Joseph Stalin’s rule. The top-secret town was not even marked on Soviet maps and special permits are still required for Russians to visit it. The town is surrounded by a tightly guarded no-man’s-land, with barbed wire fences to keep the curious away. There are even suspicions that the radioactive polonium-210 used to kill ex-FSB agent Alexander Litvinenko in London in 2006 came from Sarov.

According to a Russian politician, the nation’s central bank are currently considering the Moscow Stock Exchange for cryptocurrency trading purposes.

In an interview with Russia’s TASS, a state-owned media outlet, the head of the State Duma’s (the lower chamber of parliament) Financial Market Committee, Anatoly Alksakov, spoke of the plans:

“We have the St. Petersburg International Commodity Exchange, the Moscow Stock Exchange, the RTS, but they actually act as a non-profit partnership. Although they are also ready to participate in this process, and there are specialists in stock exchange operations there. I suppose that, the Central Bank is now considering the Moscow Stock Exchange, perhaps also the St. Petersburg Commodity Exchange for this purpose. But now there is a stronger urge to work with the Moscow Stock Exchange.”

The interview supports news from August of last year. It was widely reported that the Moscow Stock Exchange was building the necessary infrastructure to offer cryptocurrency trades. It seems that the exchange is trying to embrace digital currency as fully as possible. This is further evidenced by their push for approval of Bitcoin futures. However, last month, the nation’s central bank knocked back the proposal.

Meanwhile, Russian Deputy Finance Minister Alexei Moiseev recently stated that his office may join with the central bank to curate a list of stock exchanges well-suited for digital currency trading. He went on to hint that other marketplaces may also be permitted to oversee such activities.

Such developments highlight Russia as something of a hub for cryptocurrency. Thanks to its cheap electricity and generally cool climate, many miners have setup shop there. This is further supported by last month’s cryptocurrency bill. Proposed by Russian premier Vladamir Putin, the legislation seeks the taxation of cryptocurrency miners. This effectively legitimises such business activity in the State.

However, despite positive news, the world power continues to present a mixed message when it comes to cryptocurrency. Politicians who initially called for the launch of the “CryptoRuble” are now considering dropping the proposal. Perhaps more confusing for citizens there, Russian officials suggested that digital currencies should not be accepted as a conventional payment option.

In October last year, Russia heavy-handedly clamped down on cryptocurrencies by blocking public access to exchange websites. The move was a strong indication that the Putin administration was unsupportive of the burgeoning industry however recent news suggests otherwise.

The Financial Times reported yesterday that the Kremlin was working on its own cryptocurrency in order to circumvent Western sanctions. As state-run institutions rush to embrace blockchain technology Putin has commissioned a team to start working on their own cryptorouble.

According to the report economic advisor to president Putin, Sergei Galzev, stated;

“This instrument suits us very well for sensitive activity on behalf of the state. We can settle accounts with our counterparties all over the world with no regard for sanctions. The cryptocurrency would be the same rouble, but its circulation would be restricted in a certain way”

The Russian government was ordered to come up with a framework for cryptocurrency regulation following a meeting last year with Russian co-founder of Ethereum, Vitalik Buterin. Similar to the internet which Russia has also restricted in recent years, there is a desire to control a technology that was originally conceptualized to be free from government intervention.

US and EU sanctions have been imposed in response to Russia’s blatant violations of international law and repeated humans rights abuses. These prevent Russian businesses and organization from using US and EU banks and currencies to conduct transactions. Russia has consistently urged to have all sanctions removed, and many believe they are hurting Putin personally by restricting his ability to move funds outside the country.

A Russian cryptocurrency would provide a means of sidestepping these restrictions however it has yet to be seen how it will be distributed. It is also unclear whether the new cryptorouble would be issued by the central bank or the country’s commercial banks. Availability to the public and determining who would be able to open an account was another vague issue.

Currently, Russia’s central bank still views crypto trading as Ponzi schemes and financial pyramids. Russian crypto platform Waves creator Sasha Ivanov compared the crypto market to the unregulated financial market in 19th century America.

Control is the key to any state and this move is likely to result in more of it for Russians. Using a technology designed to be decentralized to create a centralized version of your own currency to avoid sanctions is just another twist in the ever-evolving world of cryptocurrency.

The supposed ring leader of an international cyber crime scheme has lost his appeal against his extradition to the US. Alexander Vinnik of the now defunct BTC-e exchange is wanted on 21 counts of money laundering and other offences in the United States. Some of the illegal funds go right back to the infamous Mt. Gox compromise scandal in 2013. The other charges relate to drug trafficking and computer hacking.

Vinnik was arrested whilst holidaying in northern Greece this July. He’s one of seven Russians indicted by the US this year for charges relating to cyber crime. According to American authorities, he masterminded the laundering of over $4 billion using Bitcoin. He denies the allegations against him, stating that he was never the operator of BTC-e, but rather their technical consultant.

He faces extradition to the US where he would have to defend himself against the counts of money laundering against him. He denies responsibility and has appealed to the Greek authorities to deny his deportation. Today, however, he lost his case.

Vinnik also faces additional charges in his native Russia. These are much less severe being as they amount to around 10,000 euros fraudulently obtained. It is not uncommon for Moscow to attempt to step in when one of their nationals is wanted by the US. Since his arrest, Vinnik has agreed to be returned to Russia but adamantly refutes the charges he faces in the States. However, the Greek Supreme Court rejected his appeal earlier today.

Things are looking bleak for Vinnik, certainly. However, all is not lost yet for him. The final decision over where he’ll end up being sent to stand trial is up to the Greek Justice Minister. It’s typical that they step in when such disputes arise. Whether he’ll be returned to the his native land or face a lengthy jail sentence in the United States remains to be seen.


Image: PixaBay



BioCoin crowdsale went live on November 1st, says LavkaLavka. The company has been working on hosting the first official Russian cryptocurrency platform — Voskhod, in a move set to gain an appropriate percentage of the Russian crypto-market and allow broad public participation in its equity. With the ICO  live, BioCoin will rival other blockchain-based startups in a race to gain crypto-market value. Opening up local communities and green businesses would be the most dramatic change in the Russian economic policy especially the recently adopted policy on Blockchain companies and cryptocurrencies.

BioCoin pioneers the ICO market as the first token sale held in full compliance with the Russian laws. The direction to comply with Russian laws is consistent with the reforms championed by the BioCoin founder, Boris Akimov, who has been invited to head the ICO department at the Russian Association of Blockchain and Cryptocurrency (RABAC). This new regulation allows Russian entrepreneurs and developers alike to launch and invest in their own blockchain companies under a set legal framework. Bringing in investors will strengthen the company while allowing BioCoin to focus on long-term growth and the prudent management and development of socially responsible companies. According to BioCoin’s CEO, BioCoin has received support from a number of high-ranking government officials.

“We are excited to hold the very first legal ICO in Russia. Our blockchain platform has already drawn interest of wide audiences, including Prime Minister Medvedev, who attended our presentation.” – says Boris Akimov, BioCoin’s CEO “We have secured legal support from Elina Sidorenko, the head of the Russian parliament’s interdepartmental working group on cryptocurrencies. On the advisory board we have Michael Shlypanikob, the figurehead behind blockchainization of Russian eco-farming and SibCoin’s team, who created a wildly successful Russian cryptocurrency, which in the last two years increased in price times 200.”

BioCoin is building an international blockchain based loyalty system that combines cryptocurrency and a loyalty platform. The platform proposes a reward system that aims to accelerate the global adoption of organic agriculture, sustained development and responsible consumption. LavkaLavka, the company behind BioCoin, has built a foundation of this new eco-system by creating an international farmer cooperative, backed by tens of thousands of consumers, retailers, and farmers worldwide. According to LavkaLavka, close to 20 million BioCoins are already in circulation. An ICO listing will provide BioCoin with the funds needed to fuel the blockchain based loyalty platform. The platform’s presale recently concluded with over $3 million of the overall goal of $15 million raised.

People living in colder countries will know the dread of the heating bill’s arrival all-too-well. However, two enterprising men from Siberia have figured out a way to not only heat their home for free but to actually make money out of it. Using the heat generated from cryptocurrency miners, the pair have been testing out what appears to be the world’s very first Bitcoin heating system.

To secure the Bitcoin network and process transactions requires a lot of computer processing power and anyone who’s ever done a mammoth work session using a laptop on their knee will vouch for the heat that’s generated through computation alone. The two have harnessed this to heat a home and in the process are generating around $430 a month.

Those interested in cyptocurrency mining have long sought out cheap electricity and cool climates to operate in. The immense heat given off in large mining “farms” requires huge extraction units to keep processors cool. The more help miners can get from nature, the less their overall operational costs are.

With all that in mind Iya Frolov and Dmitry Tolmachyov set out to combine the problem of heating a house during a cold Siberian winter with crypto mining. Their solution was to build a wooden cottage in the Russian town of Irkutsk. The site chosen is close to numerous large hydro electric power stations and of course, being Siberia, its pretty cold. These two factors make the spot ideal to test out the prototype of their heating system.

The devices themselves heat lquid which is then pumped around a radiator system, much like a traditional gas central heating unit. Dmitry Tomochyov, builder, entrepreneur, and now crypto miner told Quartz:

People who mine cryptocurrencies use big miners and they just heat the atmosphere. And we say, “No, the environment! We shouldn’t heat the atmosphere.” We have a nine-month long heating season. We should heat our homes. The miners should not be concentrated in one place. They should be in various places, in private homes. The technology allows it nowadays.*

The Siberian inventor alludes to the issue of centralised mining and thinks his design could be a way to spread out the activity, thus diffusing the power of network actors and strengthened the Bitcoin protocol. The pair’s creation is just a prototype for now and they hope that in future, other Siberian families will heat their homes using crypto miners.


*Translation courtesy of Quartz.

Russian President Vladimir Putin has laid out a timeline within which regulation should be drawn up by Moscow lawmakers covering both initial coin offerings and cryptocurrency mining. According to  domestic newspaper RNS, Putin made the announcement on Tuesday following a meeting devoted to digital technologies in the financial sphere. The President instructed the Kremlin to prepare amendments to legislation by July 1, 2018 and set forth plans to begin regulating ICOs in a similar fashion to current IPOs.

In addition, cryptocurrency miners will be required to register with the government, and new taxation procedures will also be addressed by the July deadline.

Within the statement, it was declared that the Russian government will also attempt to legally define terms relating to cryptocurrency. These will include “distributed ledger technology”, “token”, “smart contract”, and even “cryptocurrency” itself. The local newspaper goes on to report that the government will work towards the creation of a regulatory sandbox, with help from the nation’s central bank, to aid further legislation within the fintech industry.

Interestingly, the news of plans to increase cryptocurrency regulation broke at around the same time as CNBC reported the head of the Russian Central bank saying that the Russian interest in cryptocurrency had been overstated by the press. Riccardo Orcel told the publication:

There was some speculation that there was some buying coming from Russian investors, but more than these reports, as a bank, we have not seen much in terms of flows.

He claims that contrary to the supposed spike in Google searches, and talk of a CryptoRuble, he just doesn’t see the level of intensity which is painted in the media. He says there was “some interest” in Bitcoin but he hasn’t seen much. Orcel’s colleague and CEO of VTB Bank, Andrey Kostin, added:

We see a lot of high speculation factor in cryptocurrencies and I think it’s dangerous… Until the governments decide how to regulate this area I think it will be very, very dangerous for investors to invest in cryptocurrencies.

Whilst the sprawling, anarchic presence of decentralised, uncontrollable cryptocurrency understandably makes central bankers uneasy, like other’s within the financial industry, Orcel does appreciate the underlying technology – blockchain. He claimed fintech to be the “future of the banking industry” finally suggesting there may be a greater cohesion between banks and technology companies going forward.


The steady rise of cryptocurrency, as well as the public’s increasing awareness of eco-farming and sustainability, has inspired LavkaLavka’s initiative, BioCoin.  This Russia-based platform aims to support and develop local farming communities through their innovative crypto loyalty program.

BioCoin’s popularity is already quite evident as they managed to raise an impressive $2.5 million during the first two weeks of their presale.  Thousands of contributors participated in this initial phase of the crowdsale.  According to the company, this total is twice as much as what they were hoping to raise.  It also amounts to 13% of the crowdsale’s cumulative goal, which is set at $15 million.

“Often, the concept of presale is used by startups as a PR stunt only.  For us, presale was tremendous work which yielded great results,” said Boris Akimov, who is the CEO of LavkaLavka.

BioCoin, a blockchain-based platform, hopes to support green businesses, such as organic food retailers and eco-farmers, through a virtual loyalty program.  With BioCoin, customers will be able to either trade through the exchange, or use as actual currency in an affiliated store.

LavkaLavka anticipates that the demand for BioCoin will steadily increase as the platform continues its growth curve.  Because of this, the price of BioCoin will also increase.  The subsequent result is that businesses using this platform will not lose any money due to rewards and discounts, but will instead actually earn money.  What’s great about this scenario is that when these businesses give BioCoin as rewards to their customer base, these consumers will be able to profit as well, resulting in a growth cycle for the whole ecosystem.

The platform is currently supported by thousands of businesses, farmers and customers.  In addition, new businesses are joining every week.  LavkaLavka has reported that there are presently 20 million BioCoin tokens being circulated every day.  They are mainly being used by farmers in Russia, and in many other countries.

BioCoin are also trailblazers in the Russian crypto market as they are the first platform to hold their ICO in complete adherence with the country’s laws.

Russia’s Presidential Administration has recently recognized the potential of the crowdsale funding model.  Because of this, the platform’s CEO was invited to lead the ICO department of the RACAB (Russian Association of Cryptocurrency and Blockchain).  The main aim of this association is to aid the country in finding and developing innovative ways to approach the crypto industry as a whole.  In addition to being pioneers in the industry in Russia, BioCoin has been named as likely being a primary model project for any of the country’s subsequent ICO regulations.

The next phase of BioCoin’s crowdsale has been planned for the 1st of November.  It will be hosted by Voskhod, Russia’s first official cryptocurrency platform.