Crypto Enthusiasm in India Not Dented by RBI Ban: Paxful Survey

India

Details from a recent survey by peer-to-peer Bitcoin (BTC) trading platform Paxful show that crypto sentiment in India continues to be optimistic despite opposition from the central bank and government officials.

With the Supreme Court overturning the earlier ban by the Reserve Bank of India (RBI) on banks offering services to cryptocurrency exchanges, respondents in the country expect the next few years to see an increase in institutional adoption.

India’s Positive Crypto Sentiments on Show in Paxful Survey

Paxful announced the results of its online crypto survey via a blog post on Thursday (April 2, 2020). According to the report, the sentiment and attitude towards virtual currency among Indians remained positive, which meant that the crypto industry had the potential to blossom India in the nearest future.

Commenting on the survey result, the CEO and co-founder of Paxful, Ray Youssef, said:

“India has proved itself as a center for innovation, and we’re excited to see the growth and discoveries they will bring to the industry. India has a lot of potential in all aspects of growth, and are especially interested to see how they utilize peer-to-peer finance now and into the future.”

According to Paxful, 500 adults between 18 and 55 took part in the poll, of which more than 90% revealed that owned Bitcoin (BTC) while close to half said they held Ethereum (ETH). On the whole, about three-quarter of all participants declared that they already owned one cryptocurrency or the other.

Paxful’s survey also showed cryptos as being a more viable investment asset than stocks with more than 40% stating their preference for putting equity in virtual assets rather than company shares.
On the future of crypto adoption in the country, the majority of the respondents picked institutional channels as the most likely avenue to drive the utilization of virtual assets in the coming years. According to a majority of the participants in the survey, cryptocurrencies provide a more robust remittance ecosystem than the country’s mainstream banking apparatus.

Crypto Enthusiasm in India

India Needs Clear-cut Cryptocurrency laws

While crypto adoption in India seems to be on the rise, there are factors that would enable the nascent industry to thrive in the country. Over 80% of participants called for greater compliance with regulatory measures.

Three-quarter of the respondents said local Indian crypto exchanges should improve their know-your-customer (KYC) protocols to bring them in line with international best practices in the financial sector. On the whole, more than half of all the participants were positive that robust cryptocurrency regulations would be beneficial for the country’s crypto market.

The crypto sector in India struggled to survive after the ban back in 2018, with exchange platforms closing shop and moving to other jurisdictions. However, after a long legal battle between the RBI and the digital currency industry, the country’s Supreme court lifted the ban in March 2020.

Following the historic court ruling, stakeholders in the industry have moved to fund startups in the country. As reported by Blockonomi, major crypto exchange Binance and local crypto exchange WazirX partnered to launch the ‘Blockchain for India’ fund to support the growth of blockchain startups in India.

Outside India, there have also been other surveys carried out to determine the level of crypto adoption. Back in November 2019, a bitcoin survey by Canada’s central bank revealed that a significant number of Canadians were aware of bitcoin, with more participants owning BTC than any other crypto.

Also, a survey conducted by eToro showed that 40% of young adults will invest in bitcoin in the event of an economic recession.

The post Crypto Enthusiasm in India Not Dented by RBI Ban: Paxful Survey appeared first on Blockonomi.

European Commission Looking at Crypto and Blockchain Regulations

Europe

The head of the European Commission’s (EC) digital innovation and blockchain unit expanded on the pros of distributed ledger technology (DLT),  and the current state of the regulatory framework in Europe.

Balancing Blockchain Innovation and Regulatory Compliance

In an interview with The Banker, a subsidiary of Financial Times, the head of the EC’s digital innovation and blockchain unit discussed the potential of blockchain technology to drive innovation across Europe. The interview was published on Thursday (April 2, 2020).

The head of the EC’s blockchain unit, Pēteris Zilgalvis, pointed out that DLT provides a plethora of opportunities for governments, fintech firms, and other organizations across Europe.  Zilgalvis remarked:

“We think that it presents an excellent technology for situations where different stakeholders need to collaborate but, due to competition or legal reasons, they do not want to or are unable to share a single database. In this sense, it can avoid a single point of failure.”

Zilgalvis also indicated that blockchain technology has proved useful in areas such as diploma certification, audit documentation certification, and crypto regulatory reporting to name a few. However, although the EC recognizes the usefulness of blockchain technology in such applications, the commission does not believe it is the solution to every problem.

Regarding crypto regulations and the implementation of policies, Zilgalvis remarked:

“Any new technology is not foreseen in the existing regulatory framework. The European Blockchain Partnership, which is building the EBSI, is like a regulatory sandbox. Together with the member states, the European Commission [EC] and the court of auditors, we are experimenting with the existing legislation frameworks while we are experimenting with the technology.”

Furthermore, the head of the EC’s blockchain unit pointed out that little has been implemented on a regulatory level with the exception of matters pertaining to any kind of currency such as anti-money laundering (AML) and anti-fraud requirements. Zilgalvis also said that the EC has taken note of the rise of cryptocurrencies since 2012 and is yet to outrightly ban anything pertaining to the digital assets industry.

Regulators Assessing Adherence to Best Practice Guidelines

During the interview, Zilgalvis revealed that the EC is also considering the possibility of leveraging DLT to facilitate compliance with AML regulatory policies. There have reportedly been a number of proposals from industry stakeholders across Europe advising banks to collaborate efforts and share relevant information concerning blockchain technology.

In other recent developments, the Financial Action Task Force (FATF) published a report on Tuesday (March 31, 2020) revealing that the U.S. is not yet fully compliant with its crypto recommendations. According to the report from the international financial watchdog, minor deficiencies still remain in the regulatory framework currently in place.

As identified by the FAFT’s report, the U.S.-registered money services businesses (MBSs) keeps detailed records pertaining to crypto transactions in the amount of $3,000 or more. However, recommendations from the financial watchdog advise that the threshold be set at $1,000 in order to combat low money laundering and terrorist financing risks.

In accordance with the provisions of recommendation 15 which was implemented back in June 2019 to prevent the use of digital assets for money laundering and the financing of proliferation, FAFT has rated the U.S. as only largely compliant with the advised regulatory framework.

Furthermore, the guidelines enforced by the FAFT require crypto businesses to obtain accurate originator and beneficiary information regarding virtual asset transfers and submit to the appropriate authorities upon request. This so-called “travel rule” has drawn skepticism from industry stakeholders such as Circle, Chainalysis, and Coinbase who have previously pointed out that complete compliance would attract heavy costs and require unprecedented collaboration between crypto businesses.

The post European Commission Looking at Crypto and Blockchain Regulations appeared first on Blockonomi.

Africa Using Blockchain to Drive Change, Part Two: Southern Solutions

Health care, identity management and renewable energy are some of the non-financial blockchain use-cases gaining popularity in Africa.

With pundits like Twitter CEO Jack Dorsey predicting that Africa “will define” the future of Bitcoin (BTC), cryptocurrency and blockchain technology continue to attract interest from both public and private establishments across the continent. Many of these adoption cases have been moving beyond finance, developing solutions targeted at issues like unemployment, identity management, health care and supply chain, among others.

Amid the growing enthusiasm for crypto and blockchain technology in Africa, industry stakeholders interviewed by Cointelegraph identify a lack of education as one of the major hurdles standing in the way of more broad-based utilization of the technology. The absence of clear-cut regulations and minimal support from various governments have also had a negative impact on the rollout of pilot projects that could provide solutions to some of the problems plaguing the continent.

Southern Africa — a blockchain frontier

According to data from the World Economic Forum, Africa has the world’s youngest population. Of the top 20 nations with the lowest median age, the only non-African nation is Afghanistan, with Niger having a median age of a little above 15 years — about half of the global average.

Such a high concentration of a young demographic presents opportunities for an increase in the adoption of emerging technologies as seen in the mobile market boom across the continent. Indeed, Africa is reportedly the fastest-growing mobile market in the world.

Blockchain technology has the potential to follow the trajectory already set by mobile telephones in Africa. Apart from digital currency systems being used for cross-border remittance, several projects in Africa have been exploring blockchain-based solutions to problems that have eluded solutions for decades.

All of the industry stakeholders interviewed in this article by Cointelegraph about the state of blockchain utilization in Southern Africa agree that there is an ongoing narrative shift. While the initial focus of many projects was on payments and crypto trading, several startups have started examining non-financial use cases for decentralized ledger technology-based systems.

Commenting on the pivot toward other DLT use cases, Chris Cleverly, the CEO of Kamari, a blockchain payment and gaming platform, revealed that it was a new development that only began taking shape in the last 12 months. In an email to Cointelegraph, Cleverly remarked:

“In South Africa, the majority of blockchain growth until a year ago was all focused on trading and banking and generally the financial side of the sector. Lately though, there have been a wide variety of use cases emerging that are focused on media technology.”

Energy-positive neighborhoods in rural Africa

Cleverly also revealed that blockchain technology is being applied in the development of Africa’s renewable energy ecosystem, adding: “The Sun Exchange is another fascinating nontraditional financial use case for renewable energy.” According to Cleverly, “They created the world’s first peer-to-peer leasing platform that enabled anyone in the world to invest anywhere to create solar energy arrays, all maintained and enabled by blockchain technology.”

Launched in 2015 in South Africa, The Sun Exchange enables the monetization of sunshine — one of the continent’s most abundant resources — with an estimated 2,000 kilowatt-hour per square meter reaching the surface on an annual basis. Via DLT, The Sun Exchange is able to create a platform for P2P solar cell micro-leasing for schools and businesses in Africa.

At the intersection of blockchain technology and renewable solar energy, several startups have identified a viable channel to light up Africa, with a special focus on rural areas historically poorly served by their respective national grids. Data from the U.N. shows Africa’s electricity generation is the lowest in the world for a population of over 1.3 billion people.

Many of these projects use similar business models that allow customers with solar panels to sell excess energy to residents. Projects like OneWattSolar even utilize tokenized assets to make payments, thus bringing digital currency adoption even closer to the masses.

The consumer-driven energy sector is taking off not only in Southern Africa but across the rest of sub-Saharan Africa with the aim of addressing the needs of approximately 58% of the population — which has little or no access to electricity. Amid the blockchain-based solar power revolution in Africa comes the potential for a significant transition toward cleaner energy sources, especially at a time when environmental scientists have been clamoring for a reduction in fossil-fuel dependence.

Revamping Africa’s ID infrastructure

Part of this expanding utilization of blockchain technology appears to be coming from an improved perception of the technology by governments and private establishments in Africa. Grey Jabesi, the director of business development at the United Africa Blockchain Association, a Pan-African blockchain organization told Cointelegraph:

“Leaders and decision-makers from both government and private institutions used to negatively associate blockchain with cryptocurrency, which made them hesitant to explore the technology or work with blockchain startups. This decelerated the adoption of the technology but now, most of them have realized the potential of blockchain and are exploring ways to implement it into their business if necessary. Blockchain startups are also starting to get institutional recognition and funding.”

According to Jabesi, blockchain adoption in identity management is one of the leading real-world use cases for the technology in Southern Africa. Figures from the World Bank show that more than 1 billion people across the world do not have any official identification.

Related: Blockchain Digital ID — Putting People in Control of Their Data

This identity management crisis is one of the reasons why a significant percentage of the global population remains unbanked. However, problems with robust identity systems are not restricted to Africa alone: case in point, the “Windrush scandal” of 2018 in the United Kingdom.

Figures from both the World Bank and UNICEF put birth registration — the most fundamental form of official national identity — in Africa at 50%. According to UNICEF, the situation is particularly worse in Eastern and Southern Africa where the birth registration of children under five years of age has dropped to 40%.

In a conversation with Cointelegraph, Nini Moru, the executive coordinator at the Africa Blockchain University of Southern Africa, revealed that startups are already leveraging DLT solutions to improve identity management in the region:

“FlexFinTx is working on self-sovereign identities for Africans who don’t have forms of identification and thus are restricted from accessing services such as health care, insurance and banking. It’s using Algorand’s blockchain to make sure that the identities are tamper-proof and self-sovereign.”

Back in February 2020, FlexFinTx became the first African company to join the Decentralized Identity Foundation — a coalition of establishments looking to leverage DLT for Self Sovereign Identity. The company has partnered with tech giants like IBM and Microsoft in the deployment of its FlexID through WhatsApp, a system that is already helping Zimbabweans get easier access to banking and health care services.

Speaking at the Blockchain Africa conference earlier this year, Victor Mapunga, the CEO and co-founder of FlexFinTx, highlighted the need for novel identity management systems not to neglect the protection for sensitive user data. During his address at the conference, Mapunga revealed that FlexID users have total control over how their information is shared.

Improving health care awareness and fighting counterfeit drugs

Blockchain adoption has also been growing in the continent’s health sector. A combination of factors such as lack of political will, corruption, poor allocation of resources and maintenance culture, as well as an insufficient number of medical professionals has seen health care remain a challenge for the vast majority of people living in Africa.

While the problems are well-known, creating lasting solutions has remained unattainable for several stakeholders looking to improve the situation. However, via blockchain technology, health care companies in Africa have been working toward providing aid to those hardest hit by years of government neglect. Commenting on some of the significant blockchain-based advances in African health care service delivery, Cleverly remarked that his company seeks to develop a digital medical data marketplace, adding: 

“Kamari has also been involved in programs to promote and encourage HIV testing across Africa through crypto incentives. The real promise here is through community engagement through blockchain tech.”

With lower HIV, malaria and fewer respiratory tract infections, like tuberculosis, among the leading causes of death in Africa, some companies have been leveraging blockchain technology to decentralize the flow of information and care for the continent’s most vulnerable demographic. Platforms like KinectHub have created a tokenized ecosystem to reward participants working to improve the continent’s health care sector. These projects also create electronic health records that accurately capture the medical histories of patients — a privilege hitherto only available to wealthy Africans. Blockchain technology provides a robust security infrastructure that ensures sensitive data won’t be compromised.

Access to potentially life-saving medication is also another significant health care challenge in Africa. According to the U.N., people in Africa mostly consume imported drugs, with only 2% of the supply produced on the continent. This statistic becomes even more alarming when considered against the backdrop of India and China — places with similar population densities, only importing 5% and 20% of consumed drugs, respectively.

Exacerbating this already difficult situation is the proliferation of counterfeit medicines. According to a study by the London School of Hygiene and Tropical Medicine, up to 158,000 malaria deaths per year in Africa are caused by fake anti-malaria medication. With blockchain technology showing some promise in the area of traceability, projects have been applying the technology directly in the African pharma supply chain. As previously reported by Cointelegraph, Uganda’s government partnered with blockchain pharmaceutical startup MediConnect back in July 2019 to trace fake drugs in the country.

Education is still a major pain point

While these projects have tackled various problems, there appears to be a shifting tide in the approach to solving the developmental issues plaguing the continent. With Africans leading the charge, the solutions created by these startups have a much higher probability of being tailored to specific African peculiarities. Cleverly touched on this subject, using developments in the supply chain arena as an example:

“Another fascinating blockchain company is fuzoDNA, a blockchain platform for supply chain management. The potential commercial and psychological value for Africa to upgrade its supply chain management from its current colonial-era system is hard to understate. Transforming this sector for Africans/by Africans would transform Africa and place it at the center of its own economy.”

As previously reported by Cointelegraph, one of the key takeaways from the 2020 edition of the Blockchain Africa conference was the importance of education as an important adoption driver for the technology on the content. Commenting on the major issues for more broad-based DLT adoption in Africa, Moru remarked:

“I think major pain points in Southern Africa range from the regulatory landscape, lack of understanding and cost of implementation. In regards to regulatory landscape, I believe it goes hand in hand with lack of understanding. Lack of understanding of the technology leads to regulators not being able to come up with relevant laws and regulations to support blockchain projects.”

Apart from these problems, African blockchain developers also navigate challenges like scalability and limited interoperability with legacy systems. Industry stakeholders will be hoping that these issues are not sufficient to dampen the enthusiasm of projects looking to utilize the emerging technology in finding lasting solutions to the continent’s major problems.

Related: Africa Using Blockchain to Drive Change, Part One: Nigeria and Kenya

Crypto Exchange Giant Binance Confirms CoinMarketCap Acquisition

Coinmarketcap

Crypto exchange behemoth Binance has officially acquired CoinMarketCap (CMC) — the most popular cryptocurrency trading data provider in a move that has sent tongues wagging in the industry. The news confirms earlier reports of Binance looking to purchase CMC for $400 million.

Some pundits in reaction to the development question whether the CMC acquisition by Binance will be healthy for the competitiveness of the crypto exchange market at large. CMC becomes the latest high-profile purchase by Binance as the company continues to pursue an aggressive expansion plan.

Binance and CMC Announce Success of Acquisition Deal

In a blog post published by CMC on Thursday (April 2, 2020), both companies acknowledged the acquisition deal with Binance CEO Changpeng Zhao electing not to provide specific details about the purchase amount. Reports from earlier in the week put the figure in the $400 million ballpark.

Following the deal, the pseudonymous CMC founder and CEO’s Brandon Chez steps down from running the business with the company’s Chief Strategy Officer Carylyne Chan stepping in as interim boss. Commenting on the development, Chez remarked:

“I believe that of all the teams in the space that could acquire CoinMarketCap, Binance is one of the very best options. They are a team that have shown, time and again, that they care about their users and will do the best for them, even in the most challenging of times… I am thrilled to be passing the baton on to Carylyne and the CoinMarketCap team to continue fulfilling my original vision of showcasing the crypto revolution.”

Since its creation in 2013, CMC has gone on to become the most popular cryptocurrency website and is the top-ranked crypto website according to Alexa rankings. The platform has come under some scrutiny in recent times for allegedly promoting scams like Bitconnect and not doing enough to combat wash trading and spoofing by errant crypto exchange platforms.

Worries of Crypto Exchange Market Monopoly

Given CMC’s popularity in the crypto trading scene, its acquisition by Binance has led some pundits to highlight the potential for the latter to enjoy certain unfair advantages over its competitors like Coinbase.

With CMC recording close to 40 million visits in February 2020 alone, some commentators say Binance might be able to capture a significant portion of CMC’s internet traffic via targeted banner ads on the data provider’s website.

CMC’s new interim CEO, Chang responded to these concerns in a letter to its users stating:

“CoinMarketCap will continue to be run independently, as an independent entity, from Binance. Decisions will be made according to the best interests of CoinMarketCap, meaning that we will continue to develop products and services that benefit CoinMarketCap users, and continue working with partners and customers in a way that benefits them and brings the greatest value to them.”

According to Chang, CMC will maintain transparency in its listing process for crypto projects as well as other exchanges.

Binance Unrelenting in Rapid Expansion Drive

At the start of the year, Binance CEO Zhao told users that the platform was pursuing two major acquisition deals as the company continues its rapid expansion.

Back in 2019, Binance acquired Indian crypto exchange platform Wazir X while creating fiat on-ramps for multiple national currencies despite a $40 million Bitcoin (BTC) hack in May 2019.

Following issues regarding unclear regulations in the U.S., Binance created a separate trading platform for crypto traders in the country at a time when others were either geofencing or moving their operations overseas.

As previously reported by Blockonomi, the company has established a research institute in Shanghai, China focused on blockchain technology research.

The post Crypto Exchange Giant Binance Confirms CoinMarketCap Acquisition appeared first on Blockonomi.

Brazilian Bitcoin Exchange Xdex Shuts Down Over Tough Crypto Laws

Brazil

Xdex — a Brazilian Bitcoin exchange service has shut down its operations claiming tough regulatory measures in the country.

The crypto exchange becomes the latest in Brazil to shutter as platforms continue to be crushed under the growing cost of compliance and lack of support from commercial banks.

The situation in Brazil is reportedly symptomatic of the harsh realities faced by crypto exchanges in Latin America as banks and financial regulators appear to be establishing more anti-cryptocurrency measures.

Several virtual currency trading ventures have been forced to move their operations to more crypto-friendly jurisdictions overseas.

Xdex Bitcoin Exchange Shuts up Shop

Xdex announced the news of its shutdown via an official announcement published on its website on Tuesday (March 31, 2020). The news of Xdex closing up shop comes barely a year and five months after the exchange platform began its operations in the country

According to the Xdex announcement, the venture which originally began as an exciting business prospect has been overshadowed by Brazil’s crippling anti-crypto climate hence the reason for its decision to close the exchange.

The blog post further directs customers of the Bitcoin exchange to withdraw their assets within 30 days from the official announcement. Xdex also states that users who need to make inquiries can do so via the company’s website or telephone within the withdrawal period.

However, if customers fail to withdraw their crypto assets within the 30-day period, the virtual currency trading platform will sell off their holdings on behalf of the users. The fiat currency from the sale will be paid into customers’ registered bank accounts within three working days.

Brazilian Crypto Exchange Woes Continue

Xdex joins the list of Bitcoin exchanges to shutter its services due to unfavorable conditions in the country. As reported by Blockonomi in February 2020, two local crypto exchanges, Acesso Bitcoin and Latoex closed down their businesses as a result of Brazil’s strict tax laws.

Brazil does not have a robust regulation regarding cryptocurrency nor does the country have clear-cut virtual currency tax policies. Apart from the lack of regulatory and tax policies for digital currency, the relationship between Brazilian banks and Bitcoin exchange platforms have not been cordial.

Back in September 2018, the country’s antitrust regulatory body, the Administrative Council for Economic Defense (CADE), investigated major banks that reportedly closed accounts involved in crypto trading. Although, the banks stated that the accounts were shut down as they didn’t follow Brazil’s anti-money laundering (AML) rules.

Later in December 2019, the CADE ruled that banks could withdraw financial services from virtual currency exchanges. The ruling did not go down well with stakeholders, especially the country’s Association of Cryptocurrencies and Blockchain (ABDC).

In January 2020, Banco Bradesco, Brazil’s major commercial bank, announced intentions to stop offering banking support for virtual currency exchanges, citing the usual rhetoric that crypto assets are risky and can be used for illicit activities.

Latin American Banks Stifling Crypto Commerce

Outside of Brazil, Banks in Latin America are not friendly towards the nascent industry. In November 2019, Argentina’s central bank restricted the use of credit cards to purchase bitcoin and other altcoins.

In Chile, one of the commercial banks, Banco de Crédito e Inversiones closed the account belonging to Chilebit, Chile’s premier crypto exchange. These actions have forced Bitcoin exchanges across Latin America to take legal actions, challenging the hostile activities of these commercial banks.

For regulators in these countries, the justification for their anti-crypto stance evokes many of the well-worn rhetoric espoused by Bitcoin bashers the world over. Meanwhile, virtual currencies continue to be a haven for people caught under political and economic turmoil in countries like Venezuela.

Bitcoin proponents in Latin America will be hoping for a similar reversal of stringent crypto banking bans as was the case in India. Earlier in the year, India’s Supreme Court overturned a previous ban by the country’s central bank prohibiting commercial banks from providing services to BItcoin exchanges.

The post Brazilian Bitcoin Exchange Xdex Shuts Down Over Tough Crypto Laws appeared first on Blockonomi.

Bitcoin Buying Increased Six-fold During ‘Black Thursday’ Price Crash

Bitcoin

Data from Coinbase shows that despite the Bitcoin (BTC) price crash of ‘Black Thursday’ (March 12, 2020) saw even more Bitcoin buying on its platform.

The top-ranked cryptocurrency has since posted a significant recovery from its drop to $3,800 with bullish sentiment presenting the case for BTC reaching $7,800, which might set the stage for a sustained upward push after the block reward halving coming up in a few weeks.

Bitcoin Buying Increased on Coinbase in mid-March

According to the Coinbase report published on Monday (March 30, 2020), amid the Black Thursday flash crash, the witnessed its highest Bitcoin buying numbers in the last 12 months. Data from the report shows that retail Bitcoin buying on Coinbase increased six-fold during the price decline with trading activity surging by 3.5 times the usual level.

An excerpt from the report reads:

“But beyond just a rush, two things are clear: customers of our retail brokerage were buyers during the drop, and Bitcoin was the clear favorite. Our customers typically buy 60% more than they sell but during the crash this jumped to 67%, taking advantage of market troughs and representing strong demand for crypto assets even during extreme volatility.”

The increased traction was not only restricted to Bitcoin buying as Ethereum (ETH) and XRP also saw a significant surge in retail purchasing during the 48-hour period that saw prices decline by more than 50%.

For Coinbase, the actions of its retail users constitute a recognition of the fact that the price crash presented a unique Bitcoin buying opportunity or as it is more colloquially known, “buying the dip.”

In total, the Coinbase report showed that retail traders on its platform deposited more than $1.3 billion in cash and cryptos to buy Bitcoin and other virtual currencies during the price crash. New user registration also reportedly increased during the period with the exchange platform reporting a 100% growth in the 48-hour period.

Over-leveraged Positions Contributed to mid-March Bitcoin Slump

Coinbase also touched on the circumstances that led to the massive Bitcoin price crash, highlighting the issues caused by over-leveraged positions especially on exchanges domiciled in jurisdictions with lax regulations.

Popular crypto trading service BitMEX which was at the center of the storm during the events of Black Thursday allows users to open positions with leverage as high as 100x.

Usually, with such high margin trading, a small percentage shift in the price action of the underlying asset can cause a cascade of forced liquidations. Thus, with the World Health Organization (WHO) declaring COVID-19 to be a pandemic, panic ensued in the market as investors moved towards massive selloffs.

Bitcoin was not excluded from the initial panic as later reports show institutional traders electing to dump their BTC for cash amid the wider market panic. This increase in selling pressure meant that longs on platforms like BitMEX were wiped out and exchanges whose price discovery depends on such platforms saw their quoted spot price fall dramatically as well.

Since the events of mid-March, Bitcoin has tried to mount an assault above $7,000 but has seen successive attempts fail to hold above the major resistance point. However, some price indicators have begun to flip bullish, probably indicating the possibility of the top-ranked cryptocurrency finally able to achieve some sustained upward momentum.

With Q2 2020 about to get underway, the top-ranked cryptocurrency is still down 10% from its price at the start of the year.

While short-term uncertainty still prevails, some pundits say Bitcoin is poised to be the investment asset of choice for millennials over the coming years as boomers pass on their wealth to the younger generation.

The post Bitcoin Buying Increased Six-fold During ‘Black Thursday’ Price Crash appeared first on Blockonomi.

Binance Launches Blockchain Research Institute in China Amid COVID-19

Binance Academy

Cryptocurrency exchange heavyweight Binance has launched the Lingang Research Institute in China as part of efforts to foster wider blockchain adoption and encourage emerging developments in the digital assets industry.

Binance Establishes Blockchain Research Institute in Shanghai

According to a press release published on Sunday (March 29, 2020), crypto exchange behemoth Binance has launched a blockchain research institute in China.

Back in August 2018, the exchange launched the beta version of its non-profit educational arm dubbed Binance Academy to facilitate research into the emerging field of blockchain technology.

As China is currently chasing its own central bank digital currency (CBDC) and has established itself as a hotbed for decentralized ledger technology (DLT) development in recent months, Binance Academy has now launched the Lingang Blockchain Technology and Industry Research Institute in Shanghai.

According to the announcement, the institute will also be known as the Lingang Research Institute and will operate as a hub for DLT enthusiasts interested in fostering breakthroughs within the blockchain industry.

Also, efforts from the institute are expected to fast-track the adoption and application of DLT through the utilization of artificial intelligence (AI) and other relevant technologies.

Helen Hai, the lead official of the Binance Charity Foundation (BCF) is also in charge of heading the Lingang Research initiative. Regarding the institutes plans to influence the blockchain industry, Hai remarked:

“In establishing the Lingang Research Institute with our local partners, Binance Academy endeavors to build a leading think tank and research hub that contributes to large-scale developments in blockchain technology to further the growth of the industry.”

Furthermore, Hai pointed out that the institute is committed to contributing to the growth of the crypto industry by leveraging Binance’s blockchain ecosystem and industry resources.

In addition, the Lingang Research Institute has appointed CEO of the Tapscott Group and Co-Founder of the Blockchain Research Institute (BRI), Don Tapscott, as an Honorary Dean. Regarding his appointment, Tapscott said :

“Research, education, and skill development are all critical to moving forward, and we look forward to collaborating with Lingang Blockchain Academy in helping achieve this transformation in China.”

Focus on Research and Real-world Utilization

In recent months, organizations have displayed an increased interest in expanding the width of emerging developments in the digital assets industry by investing in DLT research.

Several crypto-focused firms have partnered with universities and institutes to fund academic programs aimed at delving deep into the potential utilization of blockchain technology in solving real-world problems.

Earlier in February 2020, crypto research and development firm Input Output Hong Kong (IOHK) donated $500,000 in Cardano tokens (ADA) to the University of Wyoming (UW). The donation aimed at providing funds to support the university’s blockchain research activities being carried out in its Advanced Blockchain Research and Development Laboratory.

In another corporation-university pairing, a subsidiary of Chinese IT firm Tencent – the Tencent Financial Academy, teamed up with the University of Hong Kong to expand on research pertaining to DLT utilization in the development of products relevant to the financial industry.

Organizations like the BRI have also made efforts to foster research into blockchain development by partnering with over 60 leading enterprises, academic institutions, and nation-states such as Canada and Argentina.

Blockchain has found its way into academia as well as established itself as a possible solution to modern-day problems. After his appointment as Honorary Dean by the Lingang Research Institute, Executive Chairman of the BRI Don Tapscott pointed out that:

“Blockchain represents the second era of the Internet – the Internet of Value — and can help us build more innovative and productive organizations.”

Across the world, agencies and governments are testing out the possibility of leveraging DLT to optimize processes and operations. As previously reported by Blockonomi, the U.S. Food and Drug Administration (FDA) was considering adopting a blockchain-powered network to aid drug tracking efforts.

Earlier in March 2020, the Russian cybersecurity firm Kaspersky revealed the launch of a DLT-based voting machine geared towards bolstering election transparency and voters security.

The post Binance Launches Blockchain Research Institute in China Amid COVID-19 appeared first on Blockonomi.

Major South Korean Bank Sets Sights on Crypto Custody Service

Crypto Custody

Prominent South Korean bank KB Kookmin has set its sights on becoming a crypto custody provider joining the growing trend of financial institutions moving into the cryptocurrency custodial arena.

The news comes at a time when the country’s government has issued new laws concerning virtual currencies with the local market still in decline following successive stringent regulatory measures.

Crypto custody is still one of the issues identified by experts as being a hindrance to more broad-based institutional adoption. In recent times, major financial establishments like Fidelity Investments have launched cryptocurrency custody platforms to join the expanding pool which already contains services created by virtual currency giants like Coinbase.

KB Kookmin Files Patent for Crypto Custody Platform

According to South Korean news outlet Digital Today, KB Kookmin — the country’s largest bank is close to launching a crypto custody platform. Reports indicate that the bank filed a trademark application for KB Digital Asset Custody (KBDAC) back in January 2020.

Details from the Korean Intellectual Property Office show that the bank’s trademark application characterizes KBDAC as a platform that offers trading and investment advisory services for cryptos like Bitcoin (BTC) and Ether (ETH). Typically, in South Korea, a trademark application signifies that a company is in advanced stages of developing the desired product or service.

KB Kookmin is yet to announce a launch date for its proposed crypto custody service. As a financial institution, the bank will require approval from South Korea’s Financial Supervisory Service (FSS) before launching the proposed KBDAC crypto custody platform.

KB Kookmin’s crypto custody plans have been in the works for some time, with the bank inking a business collaboration agreement with cryptocurrency security outfit Atomrigs Lab. Commenting on its plans for the proposed cryptocurrency custodial platform, a KB Kookmin insider told Digital Today:

“KBDAC is related to what KB Kookmin Bank decided to cooperate with Atomrigs Lab in June 2019.”

South Korea’s Stuttering Crypto Scene

Earlier in March, South Korea’s parliament introduced a new legislative amendment that would recognize the country’s crypto industry. Once passed, crypto exchanges and all other cryptocurrency businesses will have to comply with the same reporting standards as their counterparts in the mainstream financial arena.

As part of the new legislation, all crypto businesses in South Korea will have to comply with strict anti-money laundering (AML) laws. Some critics say the cost of compliance brought on by these regulatory measures might be beyond the capacity of small and medium crypto enterprises in the country.

South Korea’s once bubbling crypto scene has declined in recent years with strict regulations forcing many participants to move their businesses elsewhere. Even large crypto exchanges have been affected, with their revenues tumbling significantly.

Financial Institutions Keen on Offering Custodial Services for Crypto

Away from South Korea’s cryptocurrency decline, KB Kookmin’s reported foray into the crypto custody scene represents the latest indication of commercial banks and other financial establishments looking to offer custodial services for digital assets. Back in February 2020, 40 banks in German applied to financial regulators to licenses to act as cryptocurrency custodians.

In the U.S. Bank of America (BoA) filed a patent to offer cryptocurrency custody services back in mid-2018 amid a wave of fresh institutional enthusiasm for cryptos at the time. Other mainstream establishments like Fidelity Investments also have their digital asset custody platforms.

As previously reported by Blockonomi, crypto custody platform BitGo announced its European expansion in February 2020 with the establishment of offices in Germany and Switzerland. In late 2019, reports also emerged that Dutch banking giant ING was also building its own cryptocurrency custody technology.

The post Major South Korean Bank Sets Sights on Crypto Custody Service appeared first on Blockonomi.

Bitcoin Price Will Hit $350,000 in the Next 25 Years, Says Kraken Research

Bitcoin

Researchers at major crypto exchange platform Kraken say the Bitcoin (BTC) price could reach $350,000 by 2045. This prediction is based on the expected wealth transfer that will happen over the next two decades giving millennials substantial capital to invest in the top-ranked cryptocurrency.

Kraken’s price prediction comes amid the downward difficulty adjustment for the network with hash rate dropping by more than 45 percent from the highs set earlier in the year. Panic over the COVID-19 pandemic had erased all of the upward price action gains with BTC currently struggling to maintain a sustained push above the $7,000 mark.

The Great Wealth Transfer Will Boost Bitcoin Price

In a report published by Kraken Intelligence — the crypto exchange’s research division, the incoming $70 trillion wealth transfer from baby boomers to millennials in the next two decades could see the Bitcoin price reaching $350,000. The 2045 price target is based on a 5% investment allocation and a 2% inheritance tax levy which could see close to $1 trillion flowing into the Bitcoin market.

According to the research report, close to 70% of the $70 trillion wealth transfer is expected to happen within the next decade thus signaling the possibility of healthy Bitcoin price growth between now and 2030. Even at a 1% allocation of the incoming wealth transfer into Bitcoin, the crypto market could receive close to $200 billion in fresh investments.

An excerpt from Kraken’s report reads:

“Notwithstanding the fact that our analysis focuses exclusively on the U.S. market and cannot predict the price of bitcoin at a future date, we can, however, analyse that said allocation of inherited wealth, or marginal demand, to bitcoin relative to bitcoin’s marginal supply come 2044… The implied price of bitcoin ranges between roughly $68,000 and $706,000 when considering this newfound demand as a function of bitcoin’s marginal supply in the next 25 years. Our base-case scenario of 5% peak allocation and a 2% tax points to an implied price just south of $350,000.”

Kraken’s research unit isn’t the first to predict a massive Bitcoin price growth in the coming decades due to generational wealth transfer. Back in 2019, Grayscale CEO Barry Silbert declared that the portion of the $70 trillion held in gold will be transferred by millennials heirs into Bitcoin.

According to Silbert, the changing investment demographic will be net positive for Bitcoin given that millennials on the average hold a positive disposition towards the emerging digital economy — a belief also shared by the Kraken research team, and backed by numerous studies.

Downward Difficulty Adjustment Might Signal Local Price Bottom

Bitcoin PriceWhile Bitcoin might be poised for massive gains over the next two decades, the top-ranked cryptocurrency is currently struggling to stay above the $7,000 price mark. Since falling to $3,800 back in mid-March, the top-ranked crypto has been unable to reach its 2020 starting price of $7,100.

Thus, BTC is currently down by close to 10% for the year, despite being up by 45% back in mid-February 2020. However, BTC bulls like Binance CEO Changpeng Zhao say Bitcoin price at $100,000 is “not hard to imagine.”

As for network fundamentals, the Bitcoin mining difficulty has undergone a 15% downward adjustment to account for the shortfall in hash rate. As previously reported by Blockonomi, the Bitcoin hash rate dropped by more than 40% from its 2020 high.

Previous downward difficulty adjustments have preceded the formation of local bottoms with the last being in mid-December 2018 at the height of the mining death spiral. BTC bulls will be hoping that history repeats itself with the downward difficulty adjustment setting the stage for a significant Bitcoin price rally especially with the block reward halving event less than two months away.

The post Bitcoin Price Will Hit $350,000 in the Next 25 Years, Says Kraken Research appeared first on Blockonomi.

COVID-19: ASX Postpones Launch of Blockchain Stock Exchange Platform

ASX

The Australian Securities Exchange (ASX) has announced the postponement of the launch of its blockchain stock exchange platform due to the ongoing COVID-19 pandemic.

The postponement is the latest delay in the deployment of the project which is supposed to see the country’s stock market transitioning to a decentralized ledger technology (DLT) framework.

Over the last 30 days, the novel coronavirus outbreak has adversely impacted economic activities in several countries across the world while causing the deaths of close to 20,000 people.

In response, central banks of many major economies are planning stimulus packages with the U.S. Federal Reserve reportedly set to print $6 trillion.

ASX Pushes CHESS Blockchain Stock Exchange Platform Launch

In a press statement issued on Wednesday (March 25, 2020), the ASX announced its decision to delay the launch of its blockchain-based Clearing House Electronic Subregister System (CHESS) due to current COVID-19 outbreak. An excerpt from the media release reads:

“In light of recent events, ASX is replanning the implementation of the CHESS replacement system.  We are conscious of the importance of providing a new schedule, and the need to get the valuable input of CHESS users.  Right now, however, in this environment of heightened volatility and activity levels, the industry needs to focus on day-to-day operations.”

According to Peter Hiom, deputy ASX CEO, the Sydney-based stock exchange will meet in June 2020 to work out modalities for a new launch timetable for the blockchain trading platform. Before Wednesday’s postponement announcement, CHESS was scheduled to launch in April 2021.

Despite the delay announced by ASX, the scheduled testing of the platform will still happen in July 2020 with developers invited to participate in an Alpha test of the system. By October 2020, the ASX plans to move on to a Beta test with more users and other stakeholders invited to test the novel blockchain stock exchange infrastructure.

The delay also lengthens the time spent in developing the project with the ASX first announcing plans to use DLT as a replacement for its legacy clearing infrastructure back in late 2015. In 2016, the stock exchange held successful trials of the platform and floated an initial launch timetable of Q1 2020.

ASX’s planned blockchain stock exchange infrastructure is one of several DLT-based adoption cases in Australia. Since 2018, the country has been known for developing many blockchain adoption cases as the nation’s digital landscape continues to mature.

However, Australia is also home to a litany of crypto-related scams with Blockonomi reporting in mid-2019 that scammers were turning the crypto-friendly nation into a crime hub. According to a report by the Australian Competition and Consumer Commission (ACCC), crypto fraud in the country surged by about 200 percent in 2018.

COVID-19 Causing Disruptions to Global Markets

The announcement of the decision to postpone the CHESS launch presents yet another financial market disruption being caused by the coronavirus pandemic. Earlier in the week, the New York Stock Exchange (NYSE) announced the closure of its trading floor for the first time in its 228 years of being operational.

Many governments are already considering substantial stimulus package payments to soften the economic impact of the near-total shutdown of commerce and trade brought on by the need for social distancing and quarantining. The U.S. Federal Reserve is already set to print $6 trillion to be injected into the U.S. economy with the White House and Congress agreeing to a stimulus deal that will see payments made to low-income families in America.

For crypto bulls like Mike Novogratz of Galaxy Digital, the economic crisis caused by COVID-19 presents an opportunity for Bitcoin (BTC) to serve as a haven asset. Despite a massive drop experienced during the panic of mid-March 2020, the top-ranked cryptocurrency has seen some significant recovery with bulls optimistic of a return to the $7,000 price mark.

The post COVID-19: ASX Postpones Launch of Blockchain Stock Exchange Platform appeared first on Blockonomi.

Paxful to Use Chainalysis Crypto Surveillance Tool

New York-based peer-to-peer exchange Paxful, recently collaborated with blockchain analysis firm Chainalysis, to use Chainalysis’ Know-Your-Transaction (KYT) compliance tool to monitor cryptocurrency exchanges on the p2p platform.

While the analytics firm has mainly teamed up with crypto exchange platforms, Paxful becomes the first p2p exchange to partner with Chainalysis.

Chainalysis Records First P2P Crypto Exchange Partnership

Paxful announced the news of the partnership via a press release on Monday (March 23, 2020). According to the statement, the p2p crypto exchange will use two of Chainalysis investigative tools: Chainalysis KYT and Chainalysis Reactor.

While the former will aid in monitoring virtual currency transactions on the platform in real-time, the latter will investigate suspicious crypto transactions on the exchange.

Commenting on the collaboration, Paxful’s Chief Compliance Officer, Lana Schwartzman, said:

“At Paxful, compliance and security are top-of-mind as we work to keep the marketplace free from fraud and scammers. Partnering with Chainalysis was a great  choice as we work to protect our users and instill in them the importance of regulation and compliance on P2P marketplaces like ours.”

This is the first time that the blockchain analysis outfit will be partnering with a p2p crypto exchange. Chainalysis has always been wary of p2p exchanges because of their private and highly decentralized nature, which is risky.

But according to the press release, what makes Paxful stand out is that the p2p exchange boosted its compliance and know-your-customer (KYC) policies, setting a precedent for similar platforms. Consequently, instead of labeling all p2p exchanges as risky, the blockchain analysis firm has changed its policy.

A statement from the VP Product for Chainalyis, John Dempsey, reads:

“Compliance is the key factor for establishing trust in cryptocurrency exchanges. By adopting a case-by-case approach to evaluating P2P venues, we are helping to broaden trust and transparency across the cryptocurrency ecosystem.”

The use of Chainalysis KYT will help Paxful to monitor large crypto transactions and immediately identify any risks. Employing Chainalysis investigative tools will help Paxful combat fraud and illicit activities on its platform.

Chainalysis has partnered with a host of virtual currency exchanges bigwigs such as Binance, Bitfinex, Coinfield, and Bithumb to ensure robust compliance and combat fraudulent transactions on these platforms.

Combating Rogue Actors in the Cryptocurrency Space

Paxful’s partnership with Chainalysis is part of a growing trend of crypto trading platforms taking steps to combat the activities of criminals and other rogue actors in the cryptocurrency space. On Tuesday (March 24, 2020), Bitfinex announced the launch of Shimmer  — a proprietary surveillance tool designed to prevent market abuse.

According to a press release by Bitfinex, the Shimmer tool will be used to prevent illicit trading activities like wash trading and layering. Commenting on the launch, Paolo Ardoino, chief technology officer (CTO) at Bitfinex, remarked:

“Comprehensive market and trade surveillance capabilities are integral to operating a leading cryptocurrency exchange. To meet the complex needs of an evolving digital asset class and to protect our sophisticated participants, Bitfinex has chosen to develop its own state-of-the-art surveillance system. This will help to assure that potentially manipulative practices are rooted out and suspicious behavior detected.”

Back in February 2019, Blockonomi reported that Nasdaq was working with seven crypto exchange platforms. At the time, major platforms like Gemini were deploying the Nasdaq SMARTS Surveillance tool to combat wash trading and other illegal trading activities.

The crypto market has been plagued with reports of rampant wash trading with several studies pointing to trading volumes being exaggerated. The prevalence of these illicit activities is one of the reasons why given by the U.S. Securities and Exchange Commission (SEC) for refusing to approve any Bitcoin ETF application.

The post Paxful to Use Chainalysis Crypto Surveillance Tool appeared first on Blockonomi.

Bitcoin Price Blows Past $6,000 Amid Fed Plan for Infinite QE

Bitcoin

Amid news of the U.S. Federal Reserve removing its upper limit for funds dedicated to purchasing treasuries and mortgage securities, the Bitcoin (BTC) price has crossed the $6,000 price mark.

With stakeholders looking to stimulate the U.S. economy following panic caused by the current COVID-19 pandemic, the top-ranked cryptocurrency appears to be making another play for a significant recovery after falling to $3,800 earlier in March.

Despite the upward price action, network fundamentals appear to still be struggling as exiting mining nodes see the blockchain hash rate continuing to fall. Such is the extent of the decline that pundits say a 15% difficulty reduction is on the cards even with the block reward halving event less than two months away.

Bitcoin Price Regains $6,000

Over the last few hours, the Bitcoin price has seen a significant upward push beyond the $6,000 price mark, temporarily reaching $6,600. Despite printing a huge green candle, the top-ranked crypto has so far been unable to break past the $6,800 resistance level, retreating to a little above the $6,300 price mark at press time.

Bitcoin Price

However, Monday’s surge in the Bitcoin price represents a significant development given the current events in the U.S. financial sector.

As reported by CNBC, the Fed has announced plans to purchase assets without any upper limit as part of efforts aimed at stimulating stock market recovery for the U.S.

According to the Fed’s statement, the decision to adopt aggressive intervention strategies comes following the strain of the COVID-19 pandemic on the global economy. The reported infinite quantitative easing is on top of a recent $700 billion spend by the Fed on Treasurys and mortgage-backed securities.

Despite the Fed announcing an expanded balance sheet, markets have so far failed to react positively with the Dow falling by a further 260 points. As for the crypto market, Bitcoin’s current gains represent a departure from the continuing decline seen for altcoin token prices.

As at press time, many of the altcoin tokens are still in the red with the Bitcoin price surge not yet stimulating any recovery for the rest of the crypto market.

Cryptocurrencies are still reeling from Black Thursday with both Bitcoin and Ethereum falling by about 50%. However, Bitcoin has seemingly been on a recovery path, gaining more than 80% since the drop to $3,800 as previously reported by Blockonomi.

Correlated on Non-correlated?

The Bitcoin price increase happening at a time when the U.S. stock market is taking a continued downward dip might help to bring back the crypto’s non-correlated status. Over the past 30 days, Bitcoin trading has seen its highest correlation with the stock market, reaching 0.6 last week.

The increase in BTC’s correlation with the S&P 500 since the start of the COVID-19 panic has contributed to denting Bitcoin’s image as a non-correlated asset. However, the change did happen at a time of massive de-risking with investors seemingly looking to liquidate their assets for cash.

Bitcoin Hash Rate

While Bitcoin price may be recovering, the network’s fundamentals are still taking a hit with the hash rate continuing its decline.

Since the start of March, the Bitcoin hash rate — the computing power dedicated to securing the network, has dropped by more than 24% as mining nodes exit the blockchain in droves.

With the significant reduction in the hash rate, the Bitcoin network is expected to undergo a downward difficulty adjustment of up to 15%. Meanwhile, the halving that will see a 50% reduction in block reward comes up in less than two months.

The post Bitcoin Price Blows Past $6,000 Amid Fed Plan for Infinite QE appeared first on Blockonomi.

Zimbabwe U-Turns on Crypto, Looking to Stabilize Local Economy

The Reserve Bank of Zimbabwe proposed a crypto regulatory sandbox amid plans to launch a gold-backed digital currency.

The Reserve Bank of Zimbabwe, the country’s central bank, is considering a regulatory sandbox for crypto companies in an apparent change from its previous anti-cryptocurrency stance. The proposed sandbox is reportedly part of a broader agenda by authorities in Zimbabwe to revamp the nation’s financial sector, which has seen massive hyperinflation since 2007.

Meanwhile, Zimbabwe’s government is also partnering with Apollo Fintech to develop a gold-backed cryptocurrency for the country. The collaboration is expected to allow Zimbabweans to have access to the Apollo wallet for digital-currency payments.

Despite the government’s 2018 crypto ban, peer-to-peer trading of cryptocurrencies continues to thrive in Zimbabwe, as the country’s faltering monetary policies seemingly push investors toward digital currencies. In mid-2019, cryptomania in Zimbabwe reached such a fever pitch that false rumors about the price of Bitcoin (BTC) reaching a 600% premium began to spread.

The RBZ’s plan to create a regulatory testing environment for local crypto companies also comes at a time when the government is reportedly exploring plans for a central bank digital currency.

RBZ proposes regulatory sandbox for crypto businesses

As previously reported by Cointelegraph, the RBZ has reportedly proposed a regulatory sandbox for local crypto businesses. Cointelegraph has since confirmed that Josephat Mutepfa, the RBZ’s deputy director for financial markets and national payment systems, revealed the plan in a speech delivered at the Sound Prosperity Economic Forum in Bulawayo on March 13. An excerpt from Mutepfa’s address reads:

“We have already started to come up with a fintech framework because in regulation everything should be well-structured. The framework, which is a regulatory sandbox, will be assessing cryptocurrency companies as to how they are going to operate. The sandbox will be an experimenting zone. Once the sandbox is there, there will be an application criterion, which will also act in the same capacity as the sandbox.”

According to Mutepfa, Zimbabwe’s central bank is keen on creating a robust vetting framework to ensure that participating crypto businesses model their operations to suit existing financial regulations in the country. As part of its initial plans for the crypto-regulatory sandbox, the RBZ is reportedly focusing on companies dealing in cryptocurrency-related trading and remittance.

For Mutepfa, the proposed sandbox signals a pivot by the RBZ and the Zimbabwean government regarding its stance on the emerging digital economy, following a 2018 ban on financial institutions participating in crypto transactions.

Related: Countries That First Outlawed Crypto but Then Embraced It

Given the popularity of digital assets among the country’s younger demographic, Mutepfa opined that it was incumbent on the RBZ and the country’s government to work out methods for regulating the industry rather than focusing on prohibition. By ensuring greater government involvement in the digital sphere, he argued that issues such as access to capital can be mitigated, thus allowing small- and medium-scale cryptocurrency businesses to blossom in Zimbabwe.

Commenting on the RBZ’s plans to create the regulatory sandbox, Marius Reitz, the general manager of Africa for the Luno crypto-exchange platform, hailed the decision as a positive one for Zimbabwe’s digital-currency space. In an email to Cointelegraph, Reitz declared:

“The new sandbox is excellent news. It will be critical for bringing more clarity and protection, which will only help crypto’s transition into mainstream use. Some people believe that regulation will stifle adoption but we believe it can play a major role in boosting trust in our sector, which we know is a huge barrier for adoption.”

According to Reitz, the creation of the regulatory sandbox will open the way for constructive dialogue among crypto businesses and regulators, stating, “It’s important that there’s a strong relationship between these two stakeholders so crypto firms know what regulation to expect and how they can best protect their customers.”

Crypto legalization amid ongoing currency-stabilization drive

According to Mthabisi Tshuma, a business correspondent at the Zimbabwean daily The Chronicle, the government appears keen on legitimizing the crypto industry as part of its drive to improve the country’s financial sector. In a conversation with Cointelegraph, Tshuma remarked:

“The cryptocurrency market in the country is under review and if all goes well the government will adopt it into the financial sector as stated in last year’s monetary policy.”

In its monetary policy statement from February, the RBZ revealed that its focus was on stabilizing its currency. Having suffered massive hyperinflation since 2007, the bank appears intent on eradicating the volatility of its exchange rate through the establishment of a currency-stabilization task force. According to the RBZ, exchange-rate stabilization will result in a corresponding decrease in inflation, thus leading to significant economic recovery for the country.

As part of the currency-stabilization efforts being spearheaded by the country’s finance minister, the RBZ plans to set up a Reuters-based platform for electronic foreign exchanges that will allow free forex deals among participating banks. Authorized currency-exchange agents will also be allowed on the platform via authorized dealers. 

While there is no official word from the government, a crypto regulatory sandbox established by the RBZ could be a precursor to the legalization of cryptocurrencies in the country. For now, crypto remains largely unregulated in sub-Saharan Africa, where the two Southern African nations of Zimbabwe and South Africa appear to be on a trajectory toward cryptocurrency legalization. For Zimbabwe, the goal might be tied toward leveraging its digital economy as a means of alleviating economic issues, while for South Africa the emergence of clear-cut laws might help to combat the many instances of virtual-currency scams in the country.

So far, however, there have been reports of commercial banks in South Africa closing accounts belonging to crypto exchanges, citing the absence of regulatory clarity for the country’s cryptocurrency industry. As reported by Cointelegraph in December 2019, the South African Reserve Bank is considering the introduction of new cryptocurrency regulations. These laws reportedly focus on rules that will prevent the use of digital currencies for money laundering and tax evasion.

According to Reitz, the South African Reserve Bank is in consultation with industry stakeholders to craft a meaningful regulatory framework for South Africa’s crypto space. As part of his email to Cointelegraph, the general manager of Africa for Luno revealed:

“The SA Reserve Bank has established a working group (including players from the industry) to craft a regulatory framework for cryptocurrency, so it could be explored in the future. With South Africa ranking as the third-highest country with Google searches for bitcoin, crypto is definitely a growing industry in South Africa and we’re sure the authorities are keeping a close eye on developments.”

Gold-backed digital currency in partnership with Apollo Fintech

Zimbabwe’s government is also reportedly partnering with Apollo Fintech to launch a gold-backed digital currency for its citizens. On Friday, Apollo announced that it has signed a memorandum of agreement with CBZ Bank — one of the country’s largest commercial banks — to develop three national fintech projects. The proposed gold-backed digital currency is one of the three projects currently being developed by Apollo for CBZ with the backing of the Zimbabwean government. 

Given the less-than-stellar record of Zimbabwe’s government on matters relating to its national currency, crypto adoption might present a viable solution. However, asset-backed digital currencies have yet to show any evidence of success.

Venezuela’s oil-backed Petro has so far failed to make any significant progress despite concerted efforts by the country’s government to enforce the adoption of the digital currency. Like Zimbabwe, Venezuela is also suffering from massive hyperinflation, a situation further worsened by economic sanctions imposed on President Nicolás Maduro’s administration by the United States government.

Related: Venezuela President Maduro Is Not Pro-Crypto, He Just Likes Petro

Apollo Fintech CEO Stephen McCullah said he was excited to work with the Zimbabwean government. In a tweet published by the company on Thursday, Apollo identified Zimbabwe as a “priority country” for the live implementation of its suite of national crypto and financial solutions.

If the other yet-to-be-announced projects include an interbank settlement network, then Zimbabwe will be joining the likes of Iran in utilizing fintech to revamp its ailing financial sector.

Ripple Expands Presence in Asia With DeeMoney Partnership

Ripple XRP News

Ripple has announced a partnership with Thai financial service provider DeeMoney. The deal is geared towards bolstering Ripple’s presence across Asia.

Thai-based Fintech Firm Leveraging Blockchain for Remittance

According to a press release published on Wednesday (March 18, 2020), blockchain-based remittance powerhouse Ripple has signed a partnership deal with DeeMoney.

The Thailand-based financial technology agency, DeeMoney, is the first non-banking institution in the country to utilize Ripple’s blockchain network.

Also, the fintech company specializes in facilitating digital cross-border remittance payments. DeeMoney will use Ripple’s enterprise blockchain solution to optimizes its current remittance system, per details of the deal.

Commenting on the partnership agreement, CEO of DeeMoney, Aswin Phlaphongphanich said :

“Ripple is currently at the forefront of technology and compliance regulations. Its technology provides a single, automated system that speaks the same way to all its 300 partners worldwide, making it simple for our tech teams to integrate into our process. We are excited to partner with Ripple as, together, we aim to democratize finance in Thailand by bringing a new level of efficiency and accessibility for cross-border transactions to and from the nation.”

Phlaphongphanich further remarked that Ripple’s blockchain-powered remittance solution will bolster the fintech firm’s efforts to reduce the rate of manual interference in the money transfer process. The CEO believes this will allow DeeMoney to significantly cut the cost of operations and provide a more efficient service for its customers.

According to the press release, the Thailand-based fintech company will utilize Ripple’s blockchain remittance solution in two phases. The first phase comprises of DeeMoney using RippleNet to process incoming remittance transfers into the country.

Established payment corridors from countries across South East Asia such as South Korea and Singapore, as well as nations in the Middle East and the Gulf regions, will be prioritized. In the second phase, the fintech firm will leverage Ripple’s remittance solution to process outgoing transfer from Thailand to other countries.

Ripple Bolsters Foothold in Asian Remittance Market

The newly reached partnership deal with DeeMoney is reportedly a strategic move by Ripple to solidify its presence in the growing Asian-Pacific (APAC) remittance market. Regarding Thailand specifically, Senior Vice President of Customer Success at Ripple, Marcus Treacher said that the country has expressed its intentions to develop into a Smart Nation capable of utilizing digital payment corridors. Treacher further remarked:

“The digital banking revolution is taking Thailand by storm, and DeeMoney is a key player in this. By being the first non-bank institution in Thailand to use RippleNet, it redraws the boundaries and rules of engagement by providing efficient international transfers at low fees and competitive rates.”

Earlier in January 2020, Ripple released a report tagged ‘The Growing Remittance Market in Asia-Pacific:2020 Global Payment Opportunities’ indicating the potential of the APAC remittance market to grow. According to the report, the World Bank reported an estimated 2 billion remittance transactions within countries in the APAC region each year. Also, the report recorded a 12% growth in remittance flows in 2018.

Furthermore, remittance flows to countries such as Thailand and the Phillippines were expected to reach $550 billion in 2019, after hitting a record high of $529 billion in 2018, per the report. As the APAC market presented itself as ready for digitalization, Ripple seized the opportunity to leverage its blockchain-based remittance solution to industry stakeholders across the region by offering a low-cost efficient system to process payments.

Also, the blockchain heavyweight has appointed financial payment and banking veteran Kevin Lee to spearhead its expansion efforts in the APAC region. Lee boasts a wealth of experience with previous senior positions held at multinationals such as Mastercard and Visa.

In other Ripple related news, the blockchain giant signed a partnership with European remittance firm Azimo back in February 2020 as reported by Blockonomi. According to the agreement, Azimo would utilize Ripple’s On-Demand Liquidity (ODL) solution to boost its remittance flows into the Philippines.

Also, Ripple recently partnered with Thailand-based Siam Commercial bank as well as UAE Exchange and Unimoni to establish cross-border payment corridors on the respective platforms to process remittance payments into Thailand using the RippleNet blockchain network and its native crypto XRP.

The post Ripple Expands Presence in Asia With DeeMoney Partnership appeared first on Blockonomi.

Ex CEO of Mt. Gox Bitcoin Exchange Accuses Plaintiff of Changing Fraud Claims

Mark Karpeles Mt Gox

Mark Karpelès, ex-CEO of defunct bitcoin exchange Mt Gox., recently accused the plaintiff George Greene of changing facts underlying his claim in the middle of the ongoing case, which is forbidden by the court. Also, Karpeles is calling on the court to dismiss the remaining class-action lawsuit brought against him.

Mt.Gox, once the biggest crypto exchange globally, came crashing down in 2014 after suffering a massive hack. Following the incident, a class action lawsuit was initiated, accusing the company of mismanaging clients’ funds, while victims are yet to get back their funds.

Ex-Bitcoin Exchange CEO Wants Fraud Charges Dismissed

In a case filed at the  U.S. District Court for the Northern District of Illinois on Monday, March 16, 2020, Karpelès stated that Greene, the last plaintiff remaining in the 2014 class-action lawsuit, changed the basis of his fraud claims.

An excerpt from the filing reads:

“The issue for the court is very straightforward: can plaintiff Gregory Greene pursue completely different and new factual theories for a common law fraud claim than what he pled in the operative complaint? Mr. Greene attempts to do what Seventh Circuit law plainly forbids: change the underlying basis of his fraud claims after defendant Mark Karpeles filed his motion for summary judgment.”

According to the ex-CEO, Greene updated his complaint to add that clients invested in the defunct bitcoin exchange firm based on the company’s terms of use. However, Karpelès stated the plaintiff couldn’t make such a claim, because there were no existing terms of use on the platform when Green opened an account.

The former Mt. Gox CEO also argued that Greene could not provide evidence showing statements that led the former Mt. Gox client into believing that the bitcoin exchange platform was secure.

Karpelès further asked the court to eliminate the testimony of the plaintiff’s expert witness from the records, stating that the testimony only responded to Green’s new claims, not the ones laid out in the complaint.

In response to Greene’s changing the basis of his fraud claims, the former Mt. Gox chief called on the court to dismiss the remaining fraud charge brought against him. Greene initially filed a-three count charge against Karpelès bordering on fraud and negligence. The plaintiff had earlier dismissed two of the three charges.

Mt. Gox Creditors Still in Limbo

Before the hack attack in 2014, Japan-based bitcoin exchange Mt. Gox, was the world’s largest exchange and was responsible for 70% of BTC transactions. However, Mt. Gox’s glory days came to an end, after hackers reportedly stole 850,000 bitcoins from the platform, resulting in the collapse of the exchange.

Shortly after the theft, the company filed for bankruptcy protection both in Japan and in the U.S. There were reports that the hack was successful because most of the BTC was stored in the company’s hot wallet, and the platform failed to put in place adequate security measures. Also, the company kept its clients in the dark about the theft for several months.

Mt. Gox later stated that it found 200,000 bitcoins, with 650,000 BTC unaccounted for till today. CEO Mark Karpelès was arrested in 2015 and released on bail in 2016.

As reported by Blockonomi back in March 2019, a Japanese court found Karpelès guilty of manipulating trading records to conceal the hack. Consequently, the former Mt. Gox CEO received a suspended sentence of two years and six months. Karpelès managed to escape jail term after the court cleared him of all embezzlement charges.

Amid the Mt. Gox saga, aggrieved creditors filed for the commencement of civil rehabilitation, which the Tokyo District Court granted. Subsequently, the bankruptcy filing was halted. Nobuaki Kobayashi, Mt. Gox’s Rehabilitation Trustee, released a document showing the company’s balance and the timeline for the civil rehabilitation process.

The Trustee also announced in October 2019 that the deadline for the submission of a rehabilitation plan was extended to March 31, 2020.

The post Ex CEO of Mt. Gox Bitcoin Exchange Accuses Plaintiff of Changing Fraud Claims appeared first on Blockonomi.

RBI Set to Challenge Crypto Ban Reversal by Supreme Court

India

Following the landmark judgment by India’s Supreme Court to reverse the crypto ban, the Reserve Bank of India (RBI) — the country’s central bank, is seeking to file a review petition.

The RBI’s move to petition the apex court’s ruling stems from the fact that the reversal encourages crypto exchange platforms in the country to resume trading, which poses risks to the traditional banking system.

RBI Not Accepting Crypto Ban Reversal

According to the Economic Times, inside sources say the RBI was planning to challenge the Supreme Court’s reversal of its crypto ban.

As reported by Blockonomi on Wednesday, India’s Supreme Court nullified the RBI’s ban on commercial banks offering services to crypto exchanges in the country. In delivering its judgment on the matter, the Supreme Court described the RBI’s prohibition as unconstitutional.

In response, the central bank is reportedly planning to petition the apex court’s ruling, citing that the decision on March 4 will enable crypto exchange platforms to resume trading, which could be harmful to the banking system.

The RBI’s concern is a well-worn argument, where bitcoin and other virtual currencies are viewed as vehicles for money laundering, and terrorist financing. India’s highest court, in its ruling, stated that the RBI’s arguments failed to prove that bitcoin trading was damaging.

Going by the rules of the Supreme Court, the RBI has to file its review within 30 days of the judgment.

Temporary Reprieve for Crypto Stakeholders in India

Back in 2018, the RBI prohibited all commercial banks from carrying out banking services for businesses dealing in virtual currencies. The blanket ban did not go down well with the crypto community in India, with stakeholders calling the bank’s move “unconstitutional” and “ arbitrary.”

Consequently, most local digital exchange platforms shuttered their businesses and moved to friendlier jurisdictions. Also, a protracted legal battle began between the Internet and Mobile Association of India (IAMAI) and the RBI, with the IAMAI seeing the central bank’s circular as an indiscriminate crackdown of the nascent sector.

Apart from the RBI’s 2018 circular, there were fears and speculations that the country was seeking to ban bitcoin. Several commentators and stakeholders said a bitcoin ban by the Indian government would be a huge mistake.

Furthermore, there were leaked documents stating that individuals who possessed bitcoin and other crypto assets in India could pay a fine or receive a jail term of up to 10 years.

However, the country’s Minister of State of Finance and Corporate Affairs revealed that there were no such laws regarding virtual currencies, and as such, no blanket bitcoin ban in the country.

The RBI also came out to clear the air in January 2020, stating that there was no bitcoin ban and it had no intention of prohibiting crypto ownership. The central bank added that the only ban standing was the directive given to commercial banks concerning crypto businesses.

Indian Crypto Exchanges Quickly Resume Direct Deposits

Meanwhile, with the RBI ban reversed, some crypto exchanges in the country have begun reintroducing direct bank account deposits and withdrawals. Tweeting on Thursday (March 5, 2020) Unocoin announced the resumption of bank deposits on its platform.

Also, WazirX’s founder and Binance’s Indian partner, Nischal Shetty, who championed the #IndiaWantsCrypto movement on Twitter also revealed that the platform was gearing up to resume direct bank deposits. Another local digital currency exchange platform, CoinDCX, reportedly became the first platform to resume crypto trading using bank accounts.

While the Supreme Court’s judgment represents a win for the crypto community, more challenges lie ahead. India’s crypto scene remains largely unregulated with market stakeholders not having a voice in the formulation of government policies that may impact the emerging sector.

The post RBI Set to Challenge Crypto Ban Reversal by Supreme Court appeared first on Blockonomi.

Bitcoin Recognized as Money by French Court

France

The Commercial Court of Nanterre in France has issued a ruling recognizing Bitcoin (BTC) as currency — a development that could have significant implications for the country’s cryptocurrency market. Recently, financial regulators in Germany classified cryptos as financial instruments, further enhancing the growing legalization of virtual currency assets.

Outside Europe, both South Korea and India have seen landmark legal and parliamentary actions related to cryptocurrencies. India’s Supreme Court struck out the central bank’s 2018 ban on commercial banks servicing crypto exchanges while South Korea’s parliament passed an amended bill legalizing crypto trading.

Commercial Court of Nanterre Recognizes Bitcoin as Currency

In a ruling issued back in February 2020, the Commercial Court of Nanterre declared Bitcoin to be a fungible intangible asset, no different from fiat, hence, a currency. The court’s decision forms the first legal basis for the classification of cryptos as currency in France.

Commenting on the decision, Hubert de Vauplane of Kramer Levin law firm told Les Echos:

“The scope of this decision is considerable because it allows bitcoin to be treated like money or other financial instruments. It will therefore facilitate bitcoin transactions, such as lending or repo transactions, which are growing, and thus favor the liquidity of the cryptocurrency market.”

The court’s ruling came during a case between Paymium — a French crypto exchange platform, and English investment firm BitSpread. In 2014, BitSpread secured a 1,000 BTC loan from Paymium.

With the 2017 hard fork that resulted in the creation of Bitcoin Cash (BCH), BTC owners received BCH in a 1-to1 ratio. Paymium argued that the 1,000 BCH received should be returned.

By recognizing Bitcoin as legal money, the court classified the loan as a “consumer loan.” According to French law, ownership of the loaned property during the term of the loan resides with the borrower. Thus, the decision sees BitSpread claiming ownership of the 1,000 BCH.

The ruling comes at a time when the country’s central bank is looking towards creating a sovereign digital currency. As previously reported by Blockonomi, France’s apex bank plans to conduct trials for a central bank digital currency (CBDC) in 2020.

French authorities were among one of the early opponents of Facebook’s proposed Libra digital payments project. Other EU nations like Germany have also called on the European Central Bank (ECB) to create a CBDC for the region as a countermeasure to private cryptos like Libra.

Crypto’s Improving Legal Status Across the Globe

News of the French court’s ruling has come at a time when several nations are passing laws entrenching the legal status of Bitcoin and cryptocurrencies. The Indian Supreme Court recently nullified the ban by the Reserve Bank of India (RBI) prohibiting commercial banks from offering services to crypto trading platforms.

With the ban revoked, crypto exchange services in the country are reintroducing direct INR deposits and withdrawals. The RBI has, however, declared its intention to appeal the judgment as the bank has reportedly been behind the push to completely ban cryptos in the country.

Back in 2019, an inter-ministerial committee recommended a blanket ban on cryptocurrencies with additional fines and prison sentences for people found to be engaging in virtual currency transactions.

In South Korea, the country’s parliament legalized crypto trading with platforms now having to comply with strict real-name verification requirements. South Korea’s President will sign the bill into law next year with businesses having an additional six-month grace period to ensure total compliance with the new regulatory paradigm.

The new law while legalizing crypto trading may do little to improve the fortunes of small and medium-sized cryptocurrency businesses in South Korea. Given the increasing compliance costs associated with the new provisions, smaller volume exchanges may face bankruptcy.

The post Bitcoin Recognized as Money by French Court appeared first on Blockonomi.

KPMG: Robust Crypto Custody Tools Needed to Ensure Industry Growth

Crypto Custody

‘Big 4’ accounting firm KPMG says the lack of robust crypto custody is constituting a significant roadblock to more broad-based institutional adoption of cryptocurrencies.

As such, KPMG reports that custodial services may profit greatly if they provide adequate tools to safeguard the virtual currency holdings of market investors.

In recent times, the crypto custody scene has seen the emergence of new entrants like Coinbase Custody. Mainstream establishments like Fidelity have also debuted custody tools for virtual currencies.

Crypto Industry Needs Better Safeguards Against Cyber Theft

In a report shared with Bloomberg, KPMG argued that the inability to protect crypto funds from malicious cyber intrusions is hindering the growth of the industry. According to the firm’s report, hackers have stolen about $9.8 billion in cryptocurrencies since 2017.

For KPMG, these thefts are down to the poor security architecture of crypto businesses like exchanges with hot wallets being vulnerable to cyber-attacks.

The spate of these hacking incidents is also reportedly dampening the enthusiasm of institutional investors with KPMG crypto-asset chief Sal Ternullo remarking:

“Institutional investors especially will not risk owning crypto assets if their value cannot be safeguarded in the same way their cash, stocks and bonds are.”

According to the KPMG report, the gap in the current state of the crypto custody scene presents an opportunity for asset custodians to profit from providing robust security for cryptocurrencies.

As previously reported by Blockonomi, firms like Fidelity Investments, Coinbase, BitGo, and Gemini are populating the crypto custody scene. Major banks like Dutch giant ING are also building cryptocurrency custody tools with reports recently emerging that about 40 banks in Germany have applied to become licensed virtual currency custodians in the country.

KYC and AML Compliance on top of Proper Crypto Custody

Apart from proper crypto custody, the KPMG reports also identified know your customer (KYC) and anti-money laundering (AML) compliance as requirements for greater institutional involvement in cryptocurrencies. According to KPMG, established firms need to revamp their KYC and AML protocols for cryptos as the asset class offers challenges different from those found in other investment instruments.

Intergovernmental bodies like the Financial Action Task Force (FATF) have been calling on member nations to ensure that crypto exchanges comply with best standard KYC and AML practices. EU member nations are also adopting the fifth anti-money laundering directive (AMLD5) which echoes many of the regulations found in the FATF guidelines.

Balancing Cold Storage and Trading Flexibility

As pointed out by the KPMG report, hackers have stolen billions of dollars in cryptos from businesses like exchanges and wallets. In response, these platforms have moved away from hot wallet storage to cold wallet cryptocurrency storage.

Many of the high-profile crypto hacks have occurred because cybercriminals were able to access cryptocurrency funds stored in unsecured hot wallets. Regulators in countries like Japan have even passed laws limiting the percentage of cryptocurrency exchange reserves that can be kept on online hot wallets.

While cold wallet storage offers greater security being “air-gapped” — isolated from the internet, this increase in safety often comes at the cost of trading flexibility. The time taken to process transfers from cold wallets could mean that institutional investors like crypto hedge funds could miss out on arbitrage opportunities which tend to last for only a few moments.

To this end, some pundits are clamoring for a more robust crypto insurance market for hot wallets that will incentivize institutional investors to keep some of their holdings in readily accessible online storage platforms. Major British insurer, Lloyds recently revealed plans to provide cryptocurrency insurance services to big-money players with virtual currency funds in hot wallet storage.

The post KPMG: Robust Crypto Custody Tools Needed to Ensure Industry Growth appeared first on Blockonomi.

Facebook Mulls Libra Reorg to Pacify Government Regulators

Facebook

Following months of intense scrutiny and backlash from regulatory bodies and governments, Facebook is reportedly considering reorganizing its proposed Libra payment project to include central bank digital currencies (CBDC) pegged to major sovereign currencies.

Facebook’s Libra Might Play Host to Multiple CBDCs

According to Bloomberg, inside sources at  Facebook say a redesign of the project’s wallet is currently ongoing as part of efforts to smoothen the litany of regulatory wrinkles caused by the proposed digital currency platform. In addition to Libra’s proposed token, the project may also include other digital tokens, like CBDCs from different central banks.

While the proposed amendment may look like the Libra Consortium is moving away from its initial plan of creating a universal payment network easily accessible to billions of people, the Association’s policy and communications head, Dante Disparte, said the goal remains unchanged with Facebook reiterating its support for the project.

The unveiling of the Libra whitepaper back in June 2019, sparked reactions from regulators and governments globally. In the U.S., lawmakers called for a moratorium on the project until the creators provided more information to regulators. Facebook’s past privacy scandal helped to intensify scrutiny.

With the hurdles and oppositions coming from different jurisdictions, in July 2019, Facebook stated that it might be almost impossible to launch the project in 2020. Many early backers like PayPal, eBay, Mastercard, Stripe, and Visa among others, have exited the Libra Association.

Following the exodus of the early backers, 21 members were left to sign the Libra Association Charter. In January 2020, Vodafone also left the consortium.

Ripple’s Brad Garlinghouse, in October 2019, declared that the project might not see daylight till 2022. However, two new companies, e-commerce giant, Shopify, and Tagomi Holdings, recently joined the Association.

CBDCs As a Counter to Facebook’s Payment Project

Among from privacy concerns and lack of clarity expressed by concerned entities, most governments, central banks, and regulators believed that the Libra coin was capable of taking over the global financial scene and displacing several sovereign currencies.

One of the most vocal voices on this matter was France’s Finance Minister, Bruno Le Maire. According to the French government official, Libra constitutes a threat to sovereign currencies and should not be allowed to develop.

The Bank for International Settlements (BIS) back in June 2019, also stated that Libra could threaten the global financial system. Another warning came from a former Bank of Japan (BoJ) executive, Hiromi Yamaoka, directed at central banks. Yamaoka warned that Facebook’s virtual currency could undermine the control central banks have over monetary policies.

The announcement of the Libra crypto has spurred central banks globally to create state-owned virtual currencies. Apex banks in different jurisdictions are either researching or developing CBDCs to counter Libra.

China’s central bank, the People’s Bank of China (PBOC) is at the forefront of the CBDC race. The PBOC is racing to develop its digital yuan to combat Libra adoption in China, which the country is hoping to launch in the nearest future.

Furthermore, the German Finance Minister applauded the idea of the EU issuing a digital euro to tackle Libra.  As reported by Blockonomi back in January 2020, Jens Weidmann who doubles as the president of Germany’s central bank and policymaker for the European Central Bank (ECB), urged European banks to come up with a solution to combat Libra and other private tokens.

The post Facebook Mulls Libra Reorg to Pacify Government Regulators appeared first on Blockonomi.

Indian Bitcoin Exchanges Resume Direct INR Deposits

Indian Bitcoin Exchanges Resume Direct INR Deposits
Bitcoin exchanges in India are resuming direct bank account deposits and withdrawals following the decision of the Supreme Court to dismiss the central bank’s crypto trading ban. Banks to Resume Support for Indian Bitcoin Exchanges Unocoin, one India’s Bitcoin exchanges, tweeted on Thursday (March 5, 2020) the resumption of direct bank account deposits and withdrawals on its platform. Nischal Shetty, founder of WazirX another Bitcoin exchange and Binance’s Indian partner also published a tweet on Thursday announcing the imminent reopening of banking support for the crypto trading service. Unocoin is going live with bank account deposits and withdrawals by 11.30 AM today (March 5th) #IndiaGotCrypto — Unocoin (@Unocoin) March 5, 2020 The reinstitution of banking support for Indian Bitcoin exchanges comes as a direct consequence of the crypto trading ban reversal. As previously reported by Bitcoinist, the country’s Supreme Court nullified the 2018 ban by the Reserve Bank of India (RBI) prohibiting commercial banks from offering services to Bitcoin exchanges. WazirX team is working hard on bringing back direct bank deposits to all of you. Hold on tight, we'll announce as soon as it's ready ✌#IndiaWantsCrypto #Bitcoin #WRX — Nischal (WazirX) ⚡ (@NischalShetty) March 5, 2020 Earlier in 2020, the RBI came out to clarify that bitcoin and crypto were not illegal in the country. However, the RBI ban and the generally negative stance towards crypto espoused by authorities in the country saw an exodus of Bitcoin exchanges from the country. Platforms like Zebpay, Coindelta, and Koinex shuttered operations in the country with some electing to set up shop in other nations like Australia. Apart from the RBI ban, an inter-ministerial committee also recommended a blanket ban on cryptos with additional fines and prison sentences for people found engaging in cryptocurrency transactions. Not Yet Uhuru for India’s Crypto Scene With the RBI ban reversal, it appears the general sentiment among industry stakeholders is experiencing a transition from “#IndiaWantsCrypto” to “#IndiaGotCrypto.” However, the RBI ban aside, the cryptocurrency scene in the country still faces several hurdles up ahead. Back in 2018, reports emerged that the RBI ban was based on flawed arguments. The absence of crypto stakeholders in any form of cryptocurrency advisory council may mean the creation of laws not favorable to the industry especially considering the likelihood of concrete cryptocurrency regulations following the removal of the RBI ban. Also, the RBI released a fintech sandbox back in 2019 which did not include crypto businesses. The absence of isolated testing for virtual currency-related products precludes cryptocurrency startups from being able to develop and launch potentially useful products and services in the country. Will the resumption of banking services for Indian Bitcoin exchanges cause a significant pump in crypto prices? Let us know in the comments below. Images via Shutterstock, Twitter @Unocoin and @NischalShetty.

Crypto Trading is Now Legal in South Korea

Crypto Trading is Now Legal in South Korea
South Korea’s parliament has officially recognized crypto trading as legal in the country. The move comes after two years of deliberations into how to develop concrete guidelines for cryptocurrencies. South Korea Legalizes Crypto Trading According to The News Asia, South Korea’s National Assembly passed an amendment to its Reporting and Use of Specific Financial Information Act, legalizing cryptocurrency trading. Local South Korea media outlet Maeil Kyungjae revealed that the motion to amend the bill received unilateral support with 182 votes in favor and zero against. The law will come into 12 months from the signing date with a further 6-month grace period for crypto exchanges to comply with the new regulatory paradigm. Thus, by September 2021, all crypto exchanges and wallet providers in South Korea will have to abide by the newly amended laws. As part of the amendment, crypto exchanges and other businesses must comply with the same reporting requirements as other financial institutions. According to reports, the amendments legalizing crypto trading in South Korea contain similar provisions to the guidelines already established by the Financial Action Task Force (FATF). South Korea’s decision comes closely following the news that India’s Supreme Court nullified the country’s central bank ban on commercial banks providing services to Bitcoin exchanges. Like India, several crypto exchanges in South Korea shut down their operations citing unfavorable regulations. As previously reported by Bitcoinist, major South Korean crypto and blockchain stakeholders were unhappy with the regulatory climate in the country. Blockchain startups were electing to list their tokens on overseas exchanges given the shrinking crypto market in South Korea. In August 2019, reports also emerged that 97% of South Korean crypto exchanges were in danger of going bankrupt. Government Wants Robust KYC Compliance While crypto trading is effectively legalized in South Korea, the news comes with added compliance costs for cryptocurrency exchanges and wallet providers. As part of the new laws, all virtual currency businesses must comply with know your customer (KYC) protocols with real-name verification in tandem with commercial banks. Obtaining ISMS certification from the Korea Internet Security Agency (KISA) may constitute an expensive affair for small and medium-sized crypto businesses. Even major players like Bithumb have highlighted the increasing cost of compliance brought on by more stringent requirements set forth by the Financial Services Commission (FSC). Will the legalization of crypto trading in South Korea improve the fortunes of cryptocurrency exchanges in the country? Let us know in the comments below. Images via Shutterstock

With Mike Bloomberg Out, What’s Next for Crypto in the US?

bloomberg out, what crypto
Billionaire Michael Bloomberg who previously advocated for clearer crypto regulations has dropped out of the race to win the Democratic ticket for the November 2020 U.S. presidential election. Bloomberg Drops Out After Super Tuesday Crash and Burn According to the Wall Street Journal (WSJ), Bloomberg, a former New York Mayor is the latest Democratic candidate to exit the race, while endorsing former U.S. Vice President Joe Biden. Bloomberg’s decision comes after spending more than $620 million over three months to run his campaign. As previously reported by Bitcoinist, Bloomberg had announced plans to legitimize the U.S. crypto market. In a Financial Reform Policy published back in mid-February, the Bloomberg LP founder declared his intention to replace the patchwork of State and Federal crypto regulations with more clear-cut laws for cryptocurrency governance. Bloomberg’s crypto policies briefly made him the pro-cryptocurrency candidate of the Democratic Party after former contender Andrew Yang dropped out of the race in February. Yang had been a firm proponent of crypto adoption and the creation of standardized cryptocurrency laws. Bloomberg’s decision to exit the race came after failing to capture a significant number of delegates during Super Tuesday despite spending about $215 million in ads. Announcing his endorsement of Biden, Bloomberg remarked: After yesterday’s results, the delegate math has become virtually impossible—and a viable path to the nomination no longer exists… I’ve always believed that defeating Donald Trump starts with uniting behind the candidate with the best shot to do it. After yesterday’s vote, it is clear that the candidate is my friend and a great American, Joe Biden. The Destiny of US Crypto Regulations Post-2020 Polls After Super Tuesday, Biden and Bernie Sanders appear to be the front runners for the Democratic ticket. Neither has included crypto-related matters in their policy statements during the campaign. However, their respective relationship with ‘big tech’ might offer a clue as to their likely approach to cryptocurrency regulations. While espousing some level of criticisms for Silicon Valley, Biden is generally favorable towards the U.S. tech industry. Sanders, on the other hand, is known for advocating for the breakup of major tech establishments like Facebook, Google, and Amazon. A Biden presidency could see Facebook’s proposed Libra project come under even greater scrutiny. As for the incumbent President Donald Trump, crypto is “highly volatile and based on thin air.” Trump’s likely crypto laws might be in response to cryptocurrency utilization by the likes of China, Iran, and North Korea. In the absence of any crypto-focused policies from the remaining candidates, the future of U.S. crypto regulations may lie with Congress. Bills like the Token Taxonomy Act and the Cryptocurrency Act of 2020 are before the country’s legislature. With Bloomberg gone, will another Democratic candidate adopt crypto-related matters in the campaign policies? Let us know in the comments below. Images via Shutterstock

Could Crypto Exchanges, Wallets be Targeted with Banking Trojans?

Could Crypto Exchanges, Wallets be Targeted with Banking Trojans?
Sophisticated malware strains that usually target online banking services may pivot towards crypto exchanges and wallets in 2020. RATs Could Target Crypto Exchanges and Wallets in 2020 According to a report by Dutch-based cybersecurity firm ThreatFabric, hackers may use banking trojans to target crypto exchanges and wallets in 2020. In its report, ThreatFabric also highlighted the growing trend of these attack vectors moving from desktop platforms to mobile banking services with crypto wallets and exchange accounts the next likely destination. Using Remote Access Trojans (RATs), hackers can reportedly bypass security infrastructure on smartphones, enabling cybercriminals to carry out transactions directly from the infected mobile devices. According to the report, hackers are already using banking trojans like Hydra and Gustuff to attack crypto exchanges and wallets. Using Hydra’s screencast capabilities, cybercriminals can remotely monitor real-time activities on the infected mobile devices. Hydra also allows hackers to clone the infected device, providing access to stored financial information. As part of its report, ThreatFabric revealed that rogue actors are using Hydra to hack crypto wallets on platforms like Binance, Bitfinex, and Coinbase among others. With Gustuff, hackers have access to keylogging and browser overlay attack vectors allowing rogue actors to trick victims into entering their financial details on fake websites that closely resemble their real banking or crypto exchange platforms. According to ThreatFabric, Gustuff’s potential target is also currently expanding to include crypto wallets like Electrum, Blockchain.com, and Xapo. In addition to Hydra and Gustuff, other banking trojans currently targeting crypto exchanges and wallets include Anubis, Cerberus, and SMS hacking tool Ginp. Industry Needs to Combat Cryptocurrency Theft The emergence of more sophisticated attack vectors targeting the crypto exchanges and wallets is sure to pose serious headaches for industry stakeholders. In recent times, exchange services have been forced to revamp their security architecture to thwart the activities of online hackers. With these banking trojans, however, the security consideration falls on the shoulders of smartphone makers to develop more secure devices. As previously reported by Bitcoinist, Samsung announced plans to include tamper-resistant crypto information storage capabilities in its Galaxy S20 series. With mobile devices coming with inbuilt crypto wallets, users require more advanced security features to stave off malicious intrusions from hackers who are repurposing these deadly banking trojans. These attack vector will also join the expanding list of crypto threats ranging from clipper malware to malicious mining scripts all dedicated to stealing valuable cryptocurrency funds. What steps are you going to take to prevent falling victim to these RAT banking trojans? Let us know in the comments below. Image via Shutterstock

OFAC Sanctions Chinese Nationals for Crypto Money Laundering

Darkweb

The Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department says it has sanctioned two Chinese nationals allegedly involved in crypto money laundering for North Korea cryptocurrency exchange hackers.

Several security experts say state-sponsored cybercrime syndicates from North Korea are behind many of the high-profile crypto exchange hacks especially those that targeted South Korean platforms.

U.S. government officials say North Korea is using proceeds from crypto cybercrime to fund its nuclear weapons program

Sanctioned Chinese Nationals Aided North Korean Crypto Hackers

According to a press release issued by the U.S. Department of the Treasury on Monday (March 2, 2020), OFAC has slammed sanctions on two Chinese nationals for crypto money laundering activities.

The two Chinese nationals — Tian Yinyin and Li Jiadong allegedly helped funnel money for the Lazarus Group — a state-sponsored cybercrime syndicate from North Korea.

An excerpt from the report reads:

“Tian and Li received from DPRK-controlled accounts approximately $91 million stolen in an April 2018 hack of a cryptocurrency exchange (referred to hereinafter as “the exchange”), as well as an additional $9.5 million from a hack of another exchange. Tian and Li transferred the currency among addresses they held, obfuscating the origin of the funds.”

Both men allegedly helped move about $35.4 million in illicit crypto funds, with Tian reportedly using prepaid Apple iTunes gift card to launder $1.4 million of the proceeds from the hack.

According to OFAC, the stolen crypto funds came from an unknown crypto exchange hack in April 2018 which resulted in the theft of $250 million in virtual currency tokens at the time.

As a result of the sanctions, properties belonging to both men in the U.S. are now forfeit with OFAC announcing that it has added 20 new Bitcoin (BTC) and Ethereum (ETH) addresses to its crypto sanctions list.

Lazarus Group Allegedly Responsible for Major Exchange Hacks

As previously reported by Blockonomi, Lazarus is allegedly the mastermind behind many cryptojacking and crypto exchange hacks. The North Korean cybercrime syndicate is notorious for targeting financial establishments with South Korea cryptocurrency exchanges falling victim to the hacking group.

Despite denials from Pyongyang, security experts say the cybercrime syndicate is constantly improving its hacking activities to increase their pay-outs from malicious cyber intrusions. According to officials from the United States and the United Nations (UN) North Korea is using the proceeds of these cyberattacks to fund its nuclear weapons program.

In 2019, reports emerged that North Korea obtained close to $2 billion from cyberattacks against banks, crypto exchanges, and other financial establishments.

US Keen on Stifling North Korean Cryptocurrency Adoption

OFAC’s recent sanctions are part of a larger effort by the U.S. government to stifle growing crypto adoption in North Korea. In late 2019, the government arrested Ethereum Foundation researcher Virgil Griffith for attending and participating in a blockchain conference in North Korea.

In mid-January 2020, the UN also warned the crypto and blockchain community not to attend any future industry conferences in North Korea. According to the UN, doing so amounts to a violation of sanctions placed against the country.

Authorities in Pyongyang are reportedly exploring various ways of using cryptos to circumvent economic sanctions from the U.S. Back in February 2020, reports emerged that the country’s leadership hierarchy was investing more resources in cryptocurrency mining activities.

Apart from Iran, other countries under U.S. economic sanctions like Venezuela and Iran have also taken to various forms of crypto adoption. Recently, an Iranian general proposed a nationwide crypto adoption as a way of evading U.S. sanctions. Bitcoin miners in the country also enjoy tax holidays as long as they repatriate their foreign earnings.

The post OFAC Sanctions Chinese Nationals for Crypto Money Laundering appeared first on Blockonomi.

US Rapper Dismissed From ICO Lawsuit, Kevin Hart Still on Trial

US Rapper Dismissed From ICO Lawsuit, Kevin Hart Still on Trial
Atlanta rapper T.I, real name Clifford Harris Jr, has been cleared of securities fraud charges stemming from his alleged promotion of the FLiK ICO. However, fellow defendants, businessman Ryan Felton, along with actor and comedian Kevin Hart, still have a case to answer. Court Clears T.I. of Securities Fraud Charges According to Law360, the U.S. Court of Northern Georgia dismissed state securities fraud and other claims brought against T.I. Back in November 2018, Bitcoinist reported that aggrieved FLiK ICO investors sued the rapper for participating in a fraudulent pump and dump ICO scheme. The affected investors claim to have lost $2 million to the FLiK ICO scam following the alleged promotional activities of T.I. and the other defendants. Delivering judgment on the case, U.S. District Judge Charles Pannell Jr., sided with T.I.’s counsel, declaring: The plaintiffs have merely alleged that Harris encouraged his Twitter followers to visit the website for the FLiK ICO. They have not provided any statements from Harris about the value of the FLiK tokens. The facts as pleaded do not rise to the level of particularity required. The court also dismissed the plaintiff’s claims that T.I.’s involvement in FLiK ICO promotional activities were against Georgia’s Uniform Securities Act. According to the Judge’s statement, none of the participants in the crypto investment scheme had any ties with the state of Georgia. Judge Pannell also stated that the prosecution was unable to prove a direct link between the decision of the investors to buy into the scheme and T.I.’s alleged promotional activities. Celebrities Feeling the Burn for Backing ICO and Crypto Projects T.I. is one of a few rappers and other celebrities who were caught up in the ICO-mania of 2017, promoting token sales that ultimately turned out to be fraudulent. As previously reported by Bitcoinist, the U.S. Securities and Exchange Commission (SEC) settled its charges against DJ Khaled and Floyd Mayweather. The SEC fined the pair a total of about $800,000 with an additional stipulation banning both celebrities from promoting digital securities for two and three years respectively. Both celebs were part of the promotional efforts for the CentraTech ICO scam. In late February 2020, the SEC also slammed actor and martial artist Steven Seagal with a $314,000 fine for promoting the Bitcoiin2Gen (B2G) ICO. Will the court also dismiss charges against Kevin Hart in the FLiK ICO scam case? Let us know in the comments below. Images via Rolling Stone

Coinbase Nears Japanese License Approval with JVCEA Membership

Coinbase

U.S. crypto exchange giant Coinbase is now the latest member of the Japan Virtual Currency Exchange Association (JVCEA) — a self-regulatory organization (SRO) for the country’s cryptocurrency exchange market. With Coinbase joining the JVCEA, the road may now be open for the platform to obtain an operating license from financial regulators in Japan.

Coinbase has been pursuing a massive expansion plan since 2019 offering its services in more than 100 different countries while pushing adoption for its suite of products like Coinbase Custody. Japan, meanwhile, has in recent times stepped up its effort to maintain robust oversight over its cryptocurrency scene.

Coinbase Becomes JVCEA Class 2 Member

According to a JVCEA press release issued on Monday (March 2, 2020), Coinbase is now a second-class member of the Association. Coinbase joined two other establishments — Tokyo Hash and Digital Asset Markets as the latest additions to the JVCEA ranks.

With the three new entrants, the list of the JVCEA’s second-class membership swells to nine with other platforms such as OK Coin, CoinBest, and Coinage already in this cadre. The JVCEA also has 21 first-class members which include companies like BitFlyer, Coincheck, and SBI VC.

According to the JVCEA, second-class membership of the Association is reserved for companies intending to enter the Japanese crypto market. With Coinbase now joining the ranks of the JVCEA, the exchange giant may be a step closer to obtaining the go-ahead from financial regulators to begin operations in the country.

Coinbase Japan in the Works?

Back in 2018, the U.S. crypto exchange behemoth announced plans to enter the Japanese market as part of its Asian expansion. As previously reported by Blockonomi, the company has opened its office in Japan, even announcing the appointment of Nao Kitazawa, formerly of Morgan Stanley to head its operations in the country.

However, the platform has not obtained a license from the country’s Financial Services Agency (FSA). Japan’s financial regulator was the first to create a standardized set of guidelines for legalizing cryptocurrency exchanges, a move that saw platforms negatively impacted by China’s 2017 ICO and crypto trading ban flock to the country.

The FSA has licensed 21 cryptocurrency exchanges in the country and as of mid-2019 had over 100 pending licensing applications from various crypto trading platforms.

JVCEA Contributing to Crypto Regulations in Japan

As a self-regulatory body, the JVCEA has been working in tandem with the FSA to police the nation’s crypto exchange scene. The JVCEA emerged as a direct result of high-profile crypto exchange hacks including that of Coincheck which saw the theft of over $500 million in NEM crypto tokens.

With the FSA insisting on robust security features for crypto exchanges, the JVCEA has been policing its members, ensuring strict compliance with FSA regulations. The FSA and the JVCEA have also been putting platforms to task over money-laundering concerns especially with the emergence of guidelines from the Financial Action Task Force (FATF) concerning crypto money laundering.

Apart from exchange guidelines, the JVCEA has also been involved with regulations regarding cryptocurrency margin trading. Back in 2018, the Association called for a reduction in the leverage limit on crypto margin trading to four times the trader’s deposit.

In March 2019, the FSA ruled that crypto margin leverage trading in Japan will be capped at 4x with the law expected to go into effect in April 2020.

The JVCEA is one of a few crypto self-regulatory agencies in different countries. In October 2019, major cryptocurrency businesses in the U.S. like Coinbase, Bittrex, and Kraken formed the Crypto Rating Council — a cryptocurrency SRO focusing on determining which digital tokens were most likely to be securities based on U.S. Federal securities regulations.

The post Coinbase Nears Japanese License Approval with JVCEA Membership appeared first on Blockonomi.

Crypto Now Officially Seen as Financial Instruments in Germany

crypto Germany
Germany’s financial regulator has released guidelines classifying crypto as financial instruments. This move further expands the definition of financial instruments to include all kinds of digital assets with the previous paradigm only covering security tokens. BaFin Clarifies Crypto Classification in Germany In a press release issued on Monday (March 2, 2020), the German Federal Financial Supervisory Authority (BaFin) described crypto as: [A] digital representation of a value that has not been issued or guaranteed by any central bank or public body and is not necessarily linked to a currency specified by law and that does not have the legal status of a currency or money, but is accepted as a medium of exchange by natural or legal persons and can be transmitted, stored and traded electronically. According to BaFin, its new classification echoes the guidelines of intergovernmental agencies like the Financial Action Task Force (FATF). The news marks the second landmark crypto classification to emerge in the last few days with an Australian Judge recently ruling that crypto is an investment vehicle — meaning virtual currencies can be used as collateral in the country. BaFin’s new crypto classification announcement is also part of the move by the country to adopt the fifth EU Money Laundering Directive (AMLD5) which began on January 1, 2020. As previously reported by Bitcoinist, part of the AMLD5 adoption process involves changes to Germany’s Banking Act and Payment Supervision Services Act. Concerning Cryptocurrency Custody As part of the new BaFin crypto guidelines, cryptocurrency custodians will need to obtain a license for the regulator to offer their services in the country. Crypto custodial platforms already operating in the country without a license have until the end of November 2020 to apply for one but must show readiness to do so before March 30, 2020. Also, crypto custodian already registered in other EU nations cannot “passport” their operating license to Germany. Instead, such platforms must apply for approval to offer crypto custody services in the country. Earlier in February 2020, reports emerged that BaFin received crypto custodial licensing applications from no fewer than 40 banks. Apart from banks, the country’s stock exchange is also significantly involved with the crypto market as Boerse Stuttgart — Germany’s second-largest stock exchange recently added a new inverse Bitcoin Traded Product (ETP). What do you think about Germany’s new classification of crypto as financial instruments? Let us know in the comments below. Images via Shutterstock

EOSIO 2.0 Released but Vote-Buying and Centralization Concerns Persist

EOSIO says reports of EOS network degradation are inaccurate, blockchain is performing at levels exceeding the capacities of major crypto exchanges.

Earlier in January 2020, Block.one released EOSIO 2.0 as an upgraded set of protocol improvements for the software underlying the $3.2 billion EOS blockchain. Following the release of the new version of EOSIO, some crypto exchanges like Coinbase have raised issues with the performance of the network, temporarily halting deposits and withdrawals.

Meanwhile, the EOS community voted on a proposal to slash the network inflation from 5% to 1%, marking blockchain’s second massive token burn event since the second quarter of 2019. While some EOS proponents point to these milestones as proof of increasing decentralization, critics say vote-buying and the expanding control of Block Producers are making the project anything but democratic.

EOSIO 2.0 release

As previously reported by Cointelegraph, Block.one released the EOSIO 2.0 update back in January 2020, three months after it announced the new version of the software in October 2019. As part of the release’s announcement, Block.one claimed that EOSIO 2.0 offered improved speed and security for the blockchain network.

In terms of speed, Block.one declared that EOSIO 2.0 was 16 times faster than the previous version. Other features in the new release include multithreading support, Quickstart Web-based Integrated Development Environment as well as WebAuthn support.

Multithreading support allows processors to execute multiple transactions at the same time by enabling Block Producers to have multiple block signing keys. Previously, EOS BPs had exactly one block signing key, which meant that any inability to locate or access the key negatively impacted the high-availability requirement of Block Producers on the blockchain.

The Quickstart Web IDE feature aims to simplify the process of developing projects based on the EOSIO 2.0 software. According to Block.one’s announcement of the release, the Quickstart Web IDE removes entry barriers for developers, allowing them to create demo applications while being able to make and track changes to their projects.

The addition of the WebAuthn feature allows transaction signing without the need for additional browser extensions of the new software. According to the release announcement, WebAuthn will ensure that the projects built on EOSIO 2.0 will have even more robust security mechanisms against phishing and other data breach attack vectors.

Network degradation concerns

Before the release of EOSIO 2.0, the EOS blockchain had reportedly been dealing with congestion issues. The EIDOS launch in November 2019 caused disruptions on the network, as nodes with less staked computing power experienced difficulty in propagating transactions across the blockchain.

The congestion caused by the EIDOS token airdrop was the latest in a series of degraded network performances for the EOS blockchain. Two days after its mainnet launch in mid-June 2018, transactions were frozen for a brief period.

Earlier in February, Coinbase issued a status update stating that the EOS network was experiencing “degraded performance.” Two days later, the crypto exchange giant halted deposits and withdrawals of the EOS token. In an email to Cointelegraph, a spokesperson for Block.one refuted claims of the EOS network’s degradation:

“Descriptions of a ‘degraded’ EOS network performance are not accurate. The EOS network transfers and confirmation times are operating as normal. Working closely with Coinbase, we have identified scalability issues with the integration between the EOSIO software and their required tools that monitor all economic activity of supported digital assets.”

The Block.one spokesperson also revealed that the latest updates to the EOSIO software has caused the EOS network to perform at levels exceeding the integration protocols being used by Coinbase. Commenting on the way forward, the company spokesperson said both Block.one and Coinbase are working to resolve the issue:

“Block.one expects to release an update to EOSIO software that will allow Coinbase to simplify their integration and better service their requirements to monitor all economic activity of supported digital assets. This update is scheduled to be released in the coming weeks, and in the meantime, Block.one and Coinbase are working together to optimize the configuration and performance of the existing integration solution.”

Concerning vote-buying

While EOSIO 2.0 could see the EOS network enter a new and improved phase for developers, issues concerning vote-trading (i.e., vote-buying) and the overall centralization of the blockchain still persist. In a report unveiled by Binance Research earlier in February, the EOS governance protocols were described as being insufficient to prevent vote-buying abuses.

According to the study, the current EOS incentive structure focuses on consolidation, which allows Block Producers to dictate the governance of the entire ecosystem, thereby entrenching protocols like vote-trading that benefit the established few. Thus, it is theoretically possible for BPs to collude among themselves to ensure outcomes that are to their advantage irrespective of the rest of the network.

In some ways, the current vote-buying issue is a result of the departure from the draft constitution of EOS, which contained provisions that elevated grassroots consensus and banned vote-trading. However, the constitution never took off and was soon replaced with an end-user license agreement that was silent on many community-driven amendments in the draft constitution.

EOS holders can stake their tokens by voting for up to 30 BPs. The votes given to each BP depend on the number of tokens staked by the user. Services called voter proxies have arisen to remove the need for token owners to go through the process of selecting BPs to vote.

These voter proxies can offer a set of BPs to voters that can theoretically introduce the formation of voting bloc cartels. This is because proxies are incentivized to offer BPs that share their inflation rewards — which can, in turn, be distributed to token holders that use the proxy services.

This relationship between BPs, proxies and select token owners summarily describes the vote-buying problem on EOS. However, some EOS stakeholders argue that voter rebates don’t just favor EOS whales but also drive value toward token holders as well.

According to the Binance Research report, the activities of proxies and the reality of low voter turnouts means that major players in the EOS network can game the system. An excerpt from the report explaining this conclusion states that the aforementioned process “makes it easier for large individual players to coordinate and dominate votes as their relative control over ‘active tokens’ is higher than their control over all tokens.”

EOS token burns and inflation drop

On Feb. 25, the EOS network burned 34 million tokens held in the “eosio.saving” account, while also decreasing the supply growth of new tokens from 5% to 1%. The token burn — the second such action in less than a year — was the realization of a community vote held in mid-2019.

Related: Token Burning, Explained

Back in March 2019, a proposal was introduced to reduce the annual inflation rate for EOS from 5% to 1%. As part of the proposed protocol change, members of the community also prescribed a concrete decision on the tokens being accumulated in the savings account. An excerpt from the proposal at the time read:

“Eight months have past and there is still no defined use for this large quantity of EOS tokens that continues to flow into the eosio.saving account. This large quantity of accumulated tokens has now become excessive and if we continue to allow it to keep growing, it will eventually become an attack vector for the network.”

From over 17.3 million votes cast, about 16.5 million voted yes to the proposal earlier in the week, resulting in more than $130 million worth of EOS tokens being destroyed. Under the new 1% inflation rate, BPs will directly receive the new tokens created each year without any fraction going to the savings account.

Ripple’s XRP Trading Gets Big Boost in Malaysia

Ripple's XRP Trading Gets Big Boost in Malaysia
London-based crypto exchange platform Luno is offering XRP trading to its customers in Malaysia. The decision will see XRP becoming the third cryptocurrency included in its Malaysian trading catalog after Bitcoin (BTC) and Ether (ETH). Luno Enables XRP Trading in Malaysia According to Fintech Malaysia, starting from Tuesday (March 3, 2020), XRP trading will be available on Luno’s crypto exchange platform in Malaysia. The news comes following reports at the back-end of February 2020 that the London-based was close to adding the second-ranked altcoin (based on market capitalization) to its trading catalog. In Malaysia, Luno currently offers only Bitcoin and Ether trading pairs. The company polled its users to determine which new trading pairs customers wanted to be added to the platform. Inside sources at the company say XRP led the way hence the decision to green-light the addition of XRP trading to crypto exchange services on Luno. Commenting on the decision, Luno CEO Marcus Swanepoel, remarked: We have always limited the number of coins we offer, only listing digital currencies which have liquidity, are secure and have the utility which will benefit our clients. XRP demonstrates the benefits that blockchain based assets can offer. Year 2020 looks as though it will be another very important year for the sector as more and more people use digital coins as part of the day-to-day finances. Luno’s announcement has not had any significant impact on the XRP price action. XRP has been on the downtrend since mid-February 2020, dropping almost 30% over the past fortnight. As at press time, XRP is one of four top-10 altcoins in the during the last 24-hour trading session. Crypto prices, in general, are still reeling from the significant decline suffered during the last two weeks of February 2020 with the market shedding more than $30 billion in the process. Malaysian Regulators Clarifying Crypto Laws Luno’s expanding crypto trading offering in Malaysia comes at a time when regulators in the country are finetuning cryptocurrency laws. As previously reported by Bitcoinist, the country’s Security Commission (SE) outlawed initial coin offerings (ICOs) back mid-January 2020 while offering guidelines for initial exchange offerings (IEOs). The IEO regulations came a year after the country announced new rules for crypto exchanges operating in Malaysia. Luno is one of the registered crypto exchange platforms in the country, enjoying a new lease of life in Malaysia following tax concerns back in mid-January 2018. What do you think about Luno adding XRP trading to its crypto exchange catalog? Let us know in the comments below. Images via Shutterstock, charts by Ripple.

Russian Cybersecurity Firm Debuts Blockchain Voting Machine

Blockchain Voting

Russian cybersecurity firm Kaspersky has announced the launch of a new blockchain voting machine to enable transparency, secure voter’s votes, and curb election fraud.

According to the firm, implementing blockchain technology gives the prototype and edge over the traditional voting system.

Kaspersky Launches Blockchain Voting Machine

According to a report by Verdict on Thursday, February 27, 2020, Kaspersky has introduced its first-ever blockchain-powered voting machine using Polys, an online voting system developed by the company’s Innovation Hub.

Commenting on the advantages of electronic voting, Roman Aleshkin, head of product at Polys remarked:

“From speaking to our customers, we understand the issues and inconvenience they face when organizing paper-based voting. As we see from our Polys platform, e-voting can solve some of these issues, allowing more possibilities for remote participation and even increasing turnout of younger people.”

The report further explained how the prototype work, stating that voter will get a unique QR code or token. Furthermore, this code or token will be scanned, enabling voters to vote on any of the Polys DLT-backed machines. Thereafter, the votes are encrypted and counted, and the voters can verify that their votes are recorded on the blockchain.

Kaspersky says this voting process helps to eliminate multiple votes by one voter, reduce the number of electoral officers and long queues, and also minimize cost.

While this method of voting will record more participation from voters during elections, it, however, comes with some hiccups. As the process requires a smartphone/computers and an internet connection, voters without any of the above can be disenfranchised.

Alsehkin, noting this risk, commented:

“However, if physical polling stations were to be closed completely, it would deprive and alienate certain groups of people from taking part in an election and making their voice heard. That is why we introduced our new voting machines. Working together with the online platform, they allow citizens to vote using the method they prefer, in a convenient and transparent way.”

The cybersecurity firm also partook in a DLT voting campaign in Volgograd, Russia, which recorded participation from over 82,000 people.

DLT Utilization in Government Elections

Governments and associations are gradually exploring the use of blockchain technology to improve the electoral process. This is because the system is transparent, fast, and cheap compared to the traditional system of voting.

Back in 2018, the Thai Democrat Party employed Zcoin’s blockchain to conduct its primary election. Zcoin stated that despite the large turnout of voters, the final results were released under 12 hours. The Catalan government expressed willingness to use a DLT-powered voting system for elections.

Furthermore, Utah County collaborated with Tusk Philanthropies, an advocate of mobile voting, to trial the blockchain-based voting system for its municipal primary elections held in August 2019.

Former U.S. Presidential Candidate of the Democratic Party, Andrew Yang, is well-known crypto and blockchain proponent. Part of Yang’s propaganda focused on clear virtual currency regulations in the U.S. and the adoption of blockchain technology.

One of Yang’s campaign policies focused on implementing the DLT-based system of voting. According to the Democrat, standing in long queues at polling booths to vote was antiquated. Yang added that voting with blockchain will effectively reduce queues, minimize election fraud, and increase voter participation.

Recently, the Association of Cryptocurrency Enterprises and Startups, Singapore (ACCESS) announced it was employing blockchain technology for voting, to enable transparency and anonymity.

As previously reported by Blockonomi, the botched Iowa caucus election, which used a mobile app to conduct its election, recorded errors and delays in the result. This led some blockchain proponents to push DLT as the solution to voting problems.

The post Russian Cybersecurity Firm Debuts Blockchain Voting Machine appeared first on Blockonomi.