Bittrex Launches Crypto Platform for Middle East Following New Partnership

Bittrex has partnered with crypto exchange and custodian provider Rain Management WLL to launch a regulated digital asset exchange for the Middle East and North Africa.

Bittrex cryptocurrency exchange is partnering with Bahrain-based crypto exchange and custodian provider Rain Management WLL to launch a digital asset trading platform for customers in the Middle East and North Africa (MENA).

The new platform will purportedly combine Rain’s staff and expertise in the MENA region with Bittrex’s technology and security infrastructure, according to an announcement on July 31. 

The platform will offer all the tokens that are currently available on Bittrex and Bittrex International. It will also offer four Bitcoin (BTC) trading pairs with local fiat currencies: the Bahraini dinar, the Kuwaiti dinar, the United Arab Emirates dirham and the Saudi riyal.

Local Regulation

According to the announcement, this new digital asset trading platform is the first to be fully licensed in MENA. Rain purportedly took part in the regulatory sandbox of Bahrain’s central bank, which launched in February 2019. 

As such, the firm operates under the so-named Crypto-Asset legal framework established by the Central Bank of Bahrain (CBB). Earlier today, Rain announced that it became the first cryptocurrency exchange in the Middle East to receive a regulatory license in the form of a Crypto-Asset Module license from the CBB. 

According to the Rain executive team, their goal is to bring international standards for crypto exchanges to the Middle East; for Bittrex, CEO Bill Shihara said he believes the partnership will help drive blockchain awareness and adoption.

At press time, Bittrex’s 24-hour reported trade volume is $31.9 million, up 35.55% on the day, according to data from CoinMarketCap.

Blockchain trade solutions in MENA

As previously reported by Cointelegraph, The Dubai Chamber of Commerce and Industry (DCCI) recently signed a memorandum of understanding with the International Chamber of Commerce and the blockchain startup Perlin. The MoU reportedly grants the DCCI exclusive rights to offer certain blockchain solutions in MENA that were developed by the Centre of Future Trade. The solutions are reportedly designed to reduce trading risks and provide supply chain transparency.

US Senate Crypto Hearing Key Takeaways: Blockchain Is ‘Inevitable’

A recap of U.S. Senate’s crypto hearing: discussions about financial inclusivity, potential benefits of crypto and more criticism of Facebook’s Libra...

On July 30, the United States Committee on Banking, Housing and Urban Affairs hosted a hearing on cryptocurrencies in a regulatory context. Lawmakers are showing renewed interest in digital currencies against the backdrop of Facebook’s crypto odyssey: This week’s testimony followed two Libra-focused hearings, which were held in Congress earlier in the month.

Indeed, while the recent session’s scope was meant to be broader, Libra remained one of the key topics. The main consensus was that the influx of cryptocurrencies and blockchain is inevitable and that the U.S. would prefer to be a leader in this sector. Here are the main takeaways from the latest Senate hearing.

Witness panel seemed balanced

The recent “Examining Regulatory Frameworks for Digital Currencies and Blockchain” hearing had three witnesses: Jeremy Allaire, co-founder and CEO of payments company Circle, who represented the Blockchain Association; Rebecca M. Nelson, a specialist in international trade and finance at a congressional think tank, the Congressional Research Service; and a law professor Mehrsa Baradaran from the Irvine School of Law at the University of California. 

Related: US Congress Holds Hearing on Crypto: Witness Profiles

Allaire, being a crucial industry player, advocated for positive regulations, while Baradaran — who has a history of criticizing Bitcoin and engaging with its community — stressed some of cryptocurrencies’ shortcomings. Nelson, on the other hand, did not take sides, instead providing the Senate with factual information regarding the state of crypto regulation across the world. Thus, the lineup seems to have ensured an overall balanced, informative discussion. Perhaps it was the calmer tone that allowed the Senate to finish the session in just 1 1/2 hours, compared to the more than two-hour-long discussions on Libra. 

Positive start: Crypto is “inevitable,” can’t be banned

In his opening statement, Sen. Mike Crapo from Idaho admitted that the crypto space is emerging, and it is important for the U.S. to be at the forefront of that innovation. The senator said:

“It seems to me that digital technology innovations are inevitable, could be beneficial, and I believe that the U.S. should lead in developing these innovations and what the rules of the road should be.”

Interestingly, during one of his questions to Allaire, Crapo also suggested that it would be impossible for the U.S. to ban cryptocurrencies even if it wanted to, saying:

“If the United States were to decide — and I’m not saying that it should — if the United States were to decide we didn’t want cryptocurrency to happen in the United States and tried to ban it, I’m pretty confident we couldn’t succeed.”

Allaire asked for a regulatory framework

The Circle CEO’s testimony stressed the necessity for the U.S. to adopt clear regulations for cryptocurrencies and around the custody of assets in particular. Otherwise, industry actors will have to migrate to other jurisdictions, Allaire continued. “The increase in proliferation of digital asset projects outside the U.S., the movement of companies to leave the U.S. and projects to get started outside the U.S. is definitely getting people’s attention,” the Circle head said in a post-hearing interview with Bloomberg, adding:

“I think it is ultimately going to lead to, ultimately legislative initiatives to try and ensure that there are appropriate safeguards and investor protections but also clarity, which is much needed to allow the technology and industry to flourish.”

Notably, Allaire seems to be experiencing those issues first-hand: Earlier this month, his crypto company launched a new subsidiary in Bermuda in order to serve non-American customers of Poloniex, a cryptocurrency exchange owned by Circle. Consequently, many new services, like advanced trading products and new crypto asset listings, won’t be available to U.S. consumers. 

Crapo brought up Circle’s expansion to Bermuda while interviewing Allaire at the hearing. The company’s CEO responded by saying that the Securities and Exchange Commission (SEC) has provided limited guidance on what does not constitute securities. He clarified:

“There is a fundamental mismatch between the regulatory structure and guidance that we have here in the U.S. and the nature of these digital assets. Markets around the world are adopting these, not just Bermuda but Singapore, Switzerland, even jurisdictions like France introducing tailor proposed definition of digital assets so that issuers can feel comfortable.”

Further, at some point during the hearing, Sen. Jon Tester from Montana asked Nelson from the Congressional Research Service, “Do you agree that cryptocurrencies are leaving the U.S.?” to which she confirmed: “It’s certain that other jurisdictions are ahead of the United States to become cryptocurrency hubs.” William McCormick, founder of blockchain consultancy firm Pure Knot, told Cointelegraph regarding this: 

“It is clear that the Senate is realizing that cryptocurrencies are truly global money that they cannot throw a net around, lest Asian countries take an insurmountable lead in innovating with digital assets. The US is falling behind the rest of the world in terms of regulatory clarity and this led to blockchain startups moving out of the US, evident by Circle moving to Bermuda recently to set up their exchange HQ.

Related: US Moves Closer to Accepting Blockchain, Still Uncertain Over Crypto

Later, Crapo asked Nelson to provide specific examples of jurisdictions that are accommodating to cryptocurrencies. The congressional researcher brought up Switzerland to illustrate her point, noting that it manages to police money laundering — another major concern for the Congress — despite having somewhat relaxed regulations in place. 

Another point was raised by Sen. Christopher J. Van Hollen of Maryland as he talked about real-time transactions: “Our failure to have moved forward with this technology as so many countries have already done is costing millions of Americans billions of dollars every day.”

However, Sen. Sherrod Brown of Ohio implied that new regulatory rules for cryptocurrencies are not necessary. In his view, digital assets represent a mere financial instrument, just with new technology backing them, asking, “If there aren’t really new products, why would we need rules and regulations?” Baradaran added that she sees similarities in the resistance of tech companies to regulation in the same way that large banks are resistant to them. However, some industry experts, like Jenny Shaver, who is the chief operating officer at crypto-backed loans company Salt, would beg to differ. She told Cointelegraph, “Crypto and digital currencies are evolving globally and it's crucial we update the century old laws that apply to fiat, and not apply them to digital assets which is a new asset class.”

Bringing up the 2007-08 financial crisis

Continuing his thoughts about regulations, Brown highlighted the danger of weak regulations by asking what lessons can be applied to tech companies after the 2007-08 financial crash, which was led by banking behemoths. Baradaran agreed, noting that there is a fear that the U.S. will lose its technological edge if it doesn’t let these companies grow unburdened. Notably, the law professor also referenced the 2007-08 financial collapse during her statement. Thus, in her opinion, it’s natural that people have embraced Bitcoin in the aftermath of a financial shock, saying:

“Is it any wonder that, as so many people lost trust in the system, they enthusiastically embraced Bitcoin, a new alternative, non-sovereign currency introduced on the heels of the crisis to respond to the financial system?”

Baradaran and senators argued over financial inclusivity in crypto

Following on from the ideas in her prepublished testimony, Baradaran, who specializes in financial inclusivity, argued that the current problems in the U.S. economy are issues of policy, not of technology — so blockchain (despite being an “amazing” development, as she claimed) is not necessarily the answer. According to Baradaran, there is already a public ledger in place — it’s called the Federal Reserve. 

When Sen. Catherine Marie Cortez Masto of Nevada asked Baradaran why digital currencies cannot bank the unbanked (which is apparently one of Libra’s primary goals), she explained that these people live in “banking deserts” and do not have access to anything other than cash. Cortez asked, “How does any digital-based currency help when people are operating in cash?”

Moreover, Sen. Brian Schatz of Hawaii expressed similar concerns.“What it sounds like to me is tech people wanting to wave a wand and skip a bunch of steps and avoid the tough politics of doing things for people and say, ‘We’ve got a new tech that will solve all this stuff,'” he said while addressing Allaire. “Do you really think that in a society in which only 81% of the public currently has a smartphone we’re anywhere close to democratizing the use of these products?” Schatz went on to add:

“I don’t doubt the importance of the technology or that we’ll probably all be using it in two decades but I think that’s a different assertion than ‘oh, by the way, it’s going to solve all these societal ills.'”

Facebook was grilled once again

Brown, who went as far as to say that Facebook “broke journalism” and “helped incite a genocide," during previous hearings, seized the chance to take another shot at the social media giant and its crypto plans:

“Facebook has proved over and over […] that they can not be trusted. But they don’t care. They move fast, they break things. Minor things, like our political discourse and journalisms and relationships and privacy. Now they want to break our currency and payment systems, hiding behind the phrase ‘innovation.”’

Related: US Congress on Libra Overview: Trust, Privacy and Genocide Accusations

Additionally, other senators said they were puzzled by the way Libra’s operations are reportedly backed by assets. Sen. Mark Warner of Virginia asked, “If you have a 100% reserve, where is Libra going to make money on this?”

Do congressional hearings matter?

Despite the increase in the number of Senate hearings on cryptocurrencies, the U.S. authorities still seem overall hesitant about cryptocurrencies. This could be partly explained by the design of the domestic political system, according to Cal Evans, a U.S. litigation specialist and founder of Gresham International. He told Cointelegraph: 

“The biggest problem with the U.S. system is the Federal and State governments compete with each other. We see states such as New York, Wyoming and others being proactive. Whereas the Federal government seems to be conflicted as to which direction to take. It is not so much restrictive laws or rules which hinder Crypto adoption in the U.S. it is more the total lack of any clarity which leaves people confused as to their legality and status.”

Moreover, Evans noted that such sessions, although useful, can also be quite contracted. He elaborated: 

“Politicians in the U.S. will use these to push 'agenda' points which suit their circumstances. Let's not forget, in the U.S. banking and financial institutions are large contributors to members of congress in both houses. It is unlikely that those who's political positions are financed by the banks, will be backing a technology which ultimately, will replace them.”

Nevertheless, the U.S. would not want to forfeit the crypto space to other jurisdictions, according to McCormick. “It is clear that the Senate is realizing that cryptocurrencies are truly global money that they cannot throw a net around, lest Asian countries take an insurmountable lead in innovating with digital assets,” he told Cointelegraph. “The US is falling behind the rest of the world in terms of regulatory clarity and this led to blockchain startups moving out of the US, evident by Circle moving to Bermuda recently to set up their exchange HQ.”

Indeed, the hearing ended on a high note, as Crapo reiterated his argument about the inevitability and potential benefits of cryptocurrencies. “I want the U.S. to stay at the forefront of this technology, which both has incredible potential and incredible risk,” the senator noted before adjourning the meeting.

UK Regulators: Beware of Crypto Assets, They Lack “Intrinsic Value”

The United Kingdom’s Financial Conduct Authority (FCA) has warned the public that is should beware of investing in crypto assets. The regulator states that digital currencies like Bitcoin and Ethereum have no intrinsic value and therefore offer a high level of risk.

The comments come as part of the FCA’s newly-published guidelines for companies operating in the space. The document aims to provide information to firms to assess their own compliance with the UK’s existing financial regulations.

FCA Guidelines to Help Crypto Firms Remain Compliant

As reported in Reuters today, the FCA has issued guidelines for firms working in the cryptocurrency and blockchain industry. In a statement accompanying the document, the regulators say:

“This will allow firms to have a better understanding of whether they need to be authorised and what they need to do to ensure they are compliant.”

The guidelines come as regulators around the world are speeding up their efforts to apply existing regulations to the industry, as well as mulling the possibility of new frameworks to govern the emerging asset class.

Many within the cryptocurrency industry argue that regulations penned in the twentieth century are poorly suited to the specific requirements of an entirely digital financial industry. They therefore state that new regulatory frameworks should be drawn up that consider the unique qualities of blockchain-based currencies.

Adding a real sense of urgency to the task of global regulators is the plans detailed by Facebook to launch its own digital currency last month. Libra, as it will be known, has faced such intense regulatory scrutiny already that the firm now has doubts over whether it will launch by 2020 as it previously stated.

The guidelines specifically state that crypto assets, like Bitcoin, Litecoin, and Ether, are exempt from the United Kingdom’s existing regulators and therefore do not need to register with the FCA.

However, it did issue a familiar warning to investors in the UK:

“Consumers should be cautious when investing in such cryptoassets and should ensure they understand and can bear the risks involved with assets that have no intrinsic value.”

Interestingly, the FCA does not issue a similar warning about pound sterling. Although the UK’s fiat currency is backed by a government, it is currently backed by a government that was not voted into power by the public. Boris Johnson, an incredibly unpopular candidate for the position of premier, recently took power from Teresa May after the latter was forced to step down after showing nothing but incompetence during the ongoing Brexit debates with the European Union.

As the October deadline for the UK’s departure from the EU looms and no progress towards a favourable trade deal with the nation’s former partners looks in sight, the pound is currently taking a nose dive versus the dollar and is falling versus an almost equally weak euro. This is causing UK citizens to explore alternative ways of preserving their wealth away from the sliding fiat currency.

Additionally, the FCA neglects to admit that Bitcoin is backed by something. It’s backed by computer science and cryptography. It’s also been reliably working for its users longer than almost any democratically-elected government on the planet. Although clearly a risky investment worth warning the public about, the FCA’s choice to use the words “intrinsic value” is interesting, particularly given the fact that they would apparently rather see the public’s money rapidly devalue at the hands of a prime minister they did not vote for, with savings sitting in pounds in a bank that is more likely than not to have played a part in the 2008 economic meltdown that inspired Bitcoin and other crypto assets’ very creation.

 

Related Reading: Bitcoin is Better! Aussie Bank Note Typo Highlights Inferiority of Fiat

Featured Image from Shutterstock.

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Dubai to Launch KYC-Focused Blockchain Consortium for Businesses in 2020

The DIFC, Mashreq Bank and Norbloc will jointly launch a blockchain-based KYC data-sharing consortium in the first quarter of 2020.

A new partnership between the Dubai International Financial Centre (DIFC), Mashreq Bank, and fintech firm Norbloc aims to launch a blockchain-based Know Your Customer (KYC) data-sharing consortium in 2020. The official United Arab Emirates news agency, Emirates News Agency, reported on the new development on July 31.

The DIFC, Mashreq Bank and Norbloc — a Stockholm-based blockchain project focused on KYC and a member of the Hyperledger consortium — are planning to jointly launch the consortium in the first quarter of 2020 to support businesses in Dubai.

As part of the project, the parties will establish a consortium agreement to amalgamate the KYC efforts of future participating financial institutions and government bodies. The program will purportedly create a single digital KYC record, which can subsequently be authenticated with an electronic ID, allowing users to share data with other financial institutions. The CEO of the DIFC Authority, Arif Amiri, commented:

"This initiative provides a unique opportunity to harness innovative technology to deliver a seamless experience for both newly established and existing companies at the centre."

Earlier in July, the Dubai Chamber of Commerce and Industry (DCCI) entered a joint initiative to promote the adoption of blockchain trade solutions. The trade solutions will support the DCCI’s recently launched Digital Silk Road platform, which aims to apply blockchain tech to eliminate major vulnerabilities in the global trading system.

Last month, the Dubai Land Department and telecoms firm Etisalat signed a memorandum of understanding concerning blockchain technology for real estate. Both parties said they aim to implement smart government standards and introduce paperless management and digital contracts for property transactions.

Bitcoin NVT Ratio: Top Predicting Signal Hits Highest Peak, Is a 50% Drop Ahead?

Bitcoin price is at a critical junction, with either a major bull run ahead or a deeper correction that could mean the bear market hasn’t yet ended. A powerful indicator called the NVT ratio – designed by one of the crypto community’s best and brightest – has been used to time the tops and bottoms of Bitcoin bubbles, and is currently showing that Bitcoin has fallen from the highest levels it’s ever reached.

The last three times Bitcoin reached such high NVT levels, it feel on average 50%. Could a similar drop be ahead? The signal also never signalled a bottom was in back in December, which could suggest that if Bitcoin does drop it could fall further than many are expecting.

Bull Market? Using NVT Ratio and Signal to Determine if Bitcoin Has Topped

Bitcoin is a powerful financial technology. So powerful, it often borders on religion, and many evangelists work tirelessly to spread the word about the first-ever crypto asset to the masses. Others contribute in other ways, dedicating research, analysis or some other kind of educational contribution, but still work toward the same goal of Bitcoin understanding and awareness.

Few have contributed as much to the crypto community as analyst Willy Woo, who created the Bitcoin NVT Ratio, or the ratio of the value of Bitcoin’s network compared to the value of the transactions being broadcasted across the network. Woo’s description of the NVT ratio as the “Bitcoin-land” equivalent to the “price-earnings ratio” in stock markets. But since Bitcoin is not a company, and doesn’t have earnings, NVT ratio can be used as a “proxy” to company earnings.

Related Reading | Why The Next Bitcoin Bull Run Could Eclipse The Last Crypto Bubble

The indicator successfully signaled the top of the 2017 rally, then almost immediately after signaled the sharp V-bottom structure in February 2018. The drop from peak to bottom was a nearly 70% drop, and ultimately, was not Bitcoin’s final bottom.

Later in 2018, NVT peaked again in July, resulting in a quick 27% fall that was quickly bought back up during the height of the ETF-approval speculation. Shortly after, NVT peaked again in August and stayed elevated until mid-November when Bitcoin plummeted to its eventual bear market “bottom.”

The drop in November to the December “bottom,” was a 58% fall. Averaging out the three major NVT ratio peaks to their eventual “bottoms” suggests that a nearly 52% drop could be in the cards for Bitcoin.

Chart created with TradingView

Bear Market? Indicator Never Signalled a Bottom Was In

It’s worth noting a few other factors that make the theory supporting NVT ratio as the best spot of tops and bottoms inconclusive.

For now, the indicator never signaled a bottom was in back in December 2018 the same way it did in February 2018. Either this means the indicator simply missed didn’t pick it up, or could mean that a bottom hasn’t actually been set.

Related Reading | Bubble Hasn’t Begun: Google Trends Shows Little Interest in $10,000 Bitcoin

Many analysts have used the NVT ratio in their trading strategies with great success. The eccentric and outspoken top TradingView author MagicPoopCannon has repeatedly cited NVT as an important indicator he uses for Bitcoin price action and setting targets.

Currently, MagicPoopCannon is expecting more downside in Bitcoin’s future based on the NVT indicator, however, the creator of the indicator himself remains bullish. The signal’s creator, Willy Woo says that “stage 1” of Bitcoin’s bull run has laid the foundation for the full bull run to begin. This suggests that while the creator of the NVT signal expects a pullback, he isn’t putting any additional faith in its ability to stop tops and bottoms.

However, tops and bottoms are only that in hindsight, until enough time has passed, it’s difficult to say with any certainty that a bottom has been set. The perfect example of this was throughout the 2018 bear market when most analysts expected support at $6,000 to hold. For now, it’s advisable to consider that neither a top nor a bottom may be in for Bitcoin and to proceed with caution.

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LedgerX Launches Physical Bitcoin Futures Before Bakkt

physical bitcoin futures

U.S. citizens can now purchase physically settled Bitcoin futures contracts using LedgerX’s Omni platform. What does this mean for Bitcoin price?


If You’re Not First You’re Last! 

On Wednesday BTC derivatives provider LedgerX revealed that it had launched physically-settled Bitcoin futures contracts. This makes the company the first to offer such a product in the U.S.

This also catapults the company to the forefront, ahead of Bakkt, TD Ameritrade-backed ErisX who are both direct competitors. 

The product is available to all U.S. residents, institutional and retail. Interested investors simply need to complete the know-your-customer (KYC) verification and then they are cleared to trade.

According to LedgerX CEO Paul Chou, this is possibly the first instance where a regulated company permits investors to deposit BTC as collateral. 

As a result, investors do not have to wait for bank transfers or any other time-consuming delays that are part and parcel of the U.S. banking system. 

Physically-backed Bitcoin Futures will Change Everything

Chou said that this is revolutionary because if “somebody that deposits bitcoin, [will] not have to use the U.S. banking system at all. That’s why physically-settled is very important. I think [it’s] one of the most unique use cases for Bitcoin where you’re using cryptocurrencies as the only collateral.” 

Chou also pointed out that “Bitcoin trades 24/7/365 and our customers expect that from us, so if you trade Sunday night, the banking system did not have to be open.” 

Retail investors can trade the Bitcoin futures contracts via the company’s recently launched Omni platform. Meanwhile, institutional clients can trade on LedgerX’s other products. 

Physically-settled futures contracts mean customers will actually retain custody of the Bitcoin they place bets on at the expiry date instead of receiving the settled amount in cash. Investors are not required to purchase the contracts using the U.S. dollar as they can be ordered with BTC. 

According to John Todaro, the director of research at TradeBlock, physically-settled Bitcoin contracts will make it easier for investors to accurately hedge their bets and the product will be useful for non-speculative institutions. 

Chou further clarified that: 

Not only are they delivered physically in the sense that our customers can get Bitcoin after the futures expires, but also they can deposit Bitcoin to trade in the first place. Cash-settled is cash-in and cash-out, we’re Bitcoin-in and Bitcoin-out.” 

LedgerX first revealed the product in April after filing with the U.S. Commodity Futures Trading Commission (CFTC) in November 2018. LedgerX received a designated contract markets (DCM) license last month.

Meanwhile, Bakkt awaits approval of a trust charter from the New York Department of Financial Services and if granted the platform could launch as soon as a few weeks.

ErisX, which is backed by TD Ameritrade has already received CFTC approval but has yet to reveal when it will launch futures contracts.

Investors are now curious about how the debut of LedgerX BTC futures and the imminent approval and launch of Bakkt will impact Bitcoin’s price. 

Do you think physically-settled Bitcoin futures contracts will lead Bitcoin price to rally in the near future? Share your thoughts in the comments below! 


Image via Shutterstock

The post LedgerX Launches Physical Bitcoin Futures Before Bakkt appeared first on Bitcoinist.com.

New Bitcoin Cash Specs Propose Heightened Privacy and Double-Spend Proofs

New Bitcoin Cash Specs Propose Heightened Privacy and Double-Spend Proofs

Bitcoin Cash (BCH) development continues as software engineers have revealed two distinct concepts that aim to boost the BCH network. Bitcoin Cash developer Tom Zander has announced new documentation concerning the vision of double-spend proofs, which now exists as a pull request to the alternative BCH implementation Flowee the Hub. Additionally, Electron Cash developer Jonald Fyookball has reported on the expanded specifications for the Cashshuffle method Cashfusion, a scheme that adds higher levels of privacy to unlinkable coins.

Also Read: Exploring the SLP Token Universe Built on the Bitcoin Cash Chain

Cashfusion Specifications Enhanced

Developers put a lot of time and effort into creating applications and platforms that make bitcoin cash easier to use, more secure, and sometimes more private. On Monday, Electron Cash and Cashshuffle developer Jonald Fyookball informed the BCH community that “Cashfusion got a whole lot better.” Cashfusion is an extension of Cashshuffle, the BCH shuffling application that doesn’t require a trusted third party. The application offers a superior anonymity set by obfuscating the relationship between the owner’s old and new BCH addresses within the shuffling process. To many BCH proponents, Cashshuffle is very good but the spectrum of privacy can be improved. For instance, if a user has mixed a bunch of coins and they eventually consolidate them into one address it can still leave behind some clues for blockchain analysis.New Bitcoin Cash Specs Propose Heightened Privacy and Double-Spend Proofs

“We need a method to coordinate Coinjoin transactions with multiple inputs per user,” explains the Cashfusion specifications. “This is inherently challenging because we want to hide input linkages while simultaneously attempting to blame/ban users who don’t sign all their inputs.” However, Cashfusion proposes a blind verification scheme where each input and output is verified by a random Cashshuffle participant while also providing a series of cryptographic commitments than can identify and ban uncooperative participants. The Cashfusion author’s add:

CashFusion provides high levels of privacy via a flexible scheme that allows an arbitrary number of inputs and outputs of non-standard amounts. It provides anonymous, trustless coordination with usually zero-knowledge of linkages revealed to other players or the server.

New Bitcoin Cash Specs Propose Heightened Privacy and Double-Spend Proofs

Fyookball explained he’s been working with independent software developer Mark Lundeberg and has put “100+ revisions” into the project since he last updated the community. “The new scheme not only is more secure, but allows basically any number of inputs and outputs of any amounts — This means it can offer high levels of privacy with unlinkable coins,” Fyookball asserted. Cashshuffle has been an extremely popular application for BCH and so far, according to data stemming from Acidsploit’s Cashshuffle stats page, there’s been 116,438 BCH or more than $34 million at today’s BCH prices shuffled to date. There’s been a total of 21,336 shuffles mixing all those coins since March 27. Moreover, thanks to the release of the Cashshuffle JS library, other wallets like Bitcoin.com’s noncustodial wallet will provide Cashshuffle features as well.

New Bitcoin Cash Specs Propose Heightened Privacy and Double-Spend Proofs

Double-Spend Proofs

On the same day, the software developer Tom Zander revealed the completion of a pull request to the alternative BCH implementation Flowee the Hub which aims to provide double-spend proofs (DSP). Essentially the concept of DSP documentation is authored by the developer Imaginary Username and the idea adds a fraud-proof system for double-spending. DSP was also adapted from Chris Pacia’s Double Spend Alert work and Mark Lundeberg has been contributing to the project. Zander said on Monday that the system they came up with is a “relatively small (constant size) message with actual proof that the spender signed two different transactions spending the money you were hoping to receive.” The software engineer added that the important aspect of DSP is to make sure an original double-spending transaction cannot be recreated. “Double spend proofs have been an idea for years, with lots of people talking about it and we had some initial specs and even a conference about this last year,” Zander told the BCH community.

New Bitcoin Cash Specs Propose Heightened Privacy and Double-Spend Proofs

“This document describes a new Bitcoin Cash network message that is generated when two transactions spending the same input are detected on a participating node, and related protocol to relay it through the network among participating nodes,” the specification explains on Github. “A transaction that has its inputs all being from P2PKH or P2SH-multisig outputs, follow prevailing standardness rules and has all signatures signed with SIGHASH_ALL without the ANYONECANPAY flag,” the developer’s data notes. And in the case of P2SH-multisig containing all unique pubkeys, is hereby referred to as ‘protected transactions.’”

New Bitcoin Cash Specs Propose Heightened Privacy and Double-Spend Proofs

Striving to Capture Two Crypto Holy Grails

Bitcoin Cash proponents were pleased to hear both announcements on July 29, as each could reinforce private transactions and zero-confirmation acceptance. For some people, along with scaling BCH to serve the needs of millions, a deeper form of transaction confidentiality and double-spend proofs are holy grails of sorts. Zander also compared the new pull request to the double-spend relaying/detection plan that stemmed from Bitcoin XT and was later merged into Bitcoin Unlimited. The Flowee developer said one contrast is that double-spend relays propagate the whole transaction (txn) without any annotation, basically dropping the biggest protection of ‘first seen safe.’ The programmer also stated that SPV nodes (light clients) that were once safe from seeing a txn now see them and in known cases “relaying makes double-spending an SPV wallet actually trivial.” “The main reason why double spends can propagate is because of different settings between nodes. Double spend relay makes this use case also worse whereas a proof solves this use case,” Zander emphasized.

New Bitcoin Cash Specs Propose Heightened Privacy and Double-Spend Proofs
Many BCH proponents want to improve the security of zero-confirmation transactions and enhance the decentralized currency’s fungibility

With Cashfusion, BCH supporters are excited because the protocol could help make a good majority of BCH transactions fungible and private if large numbers of people mix coins. One BCH fan wrote: “Great news — I’ve been supported the pool but waiting for something like this before recommending it to muggles. The status quo is too much to have to keep in mind for widely-deployed opsec — Thanks for everybody’s work on this.” Improved privacy couldn’t come at a better time as the regulatory climate surrounding digital assets has increased significantly in recent months. Just recently the U.S. tax agency (IRS) notified the public that 10,000 Americans would receive letters reminding them to file taxes. Crypto fans believe that companies pressured to fork over data due to grand subpoenas and exchanges that use blockchain surveillance are a threat to digital currency privacy. Cashshuffle coupled with Cashfusion could improve anonymity sets by avoiding amount linkages found using combinatorics and man-in-the-middle (MITM) attacks.

“We wish to prove that zero-knowledge (beyond what is publicly available) is revealed about any of the players’ inputs or outputs during the fusion process — It works because the linkages between players’ commitments are only kept by the server, and the server doesn’t participate in verification,” the Cashfusion documentation concludes.

What do you think about the double-spend proofs and Cashfusion specs? Let us know what you think about these concepts in the comments section below.


Image credits: Shutterstock, Github, Twitter, and Pixabay.


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Bitcoin Cannot be Banned, But Can it Be…?

Bitcoin

On Tuesday, Senate Banking Committee Chairman Mike Crapo said that the US couldn’t technically ban Bitcoin, given that it is a global innovation. However, in theory, there does exist a handful of ways to kill Bitcoin.


US Politicians Agree that Bitcoin is Unbreakable

Yesterday, the US Senate Committee on Banking, Housing and Urban Affairs discussed blockchain and cryptocurrency regulation. Chairman Mike Crapo suggested that it would be almost impossible for the US to ban Bitcoin. He stated:

If the United States were to decide — and I’m not saying that it should — if the United States were to decide we don’t want cryptocurrency to happen in the United States and tried to ban it, I’m pretty confident we couldn’t succeed in doing that because this is a global innovation.

Earlier this month, Congressman Patrick McHenry told CNBC that there was no capacity to kill Bitcoin.

Indeed, the creator (creators) of Bitcoin anticipated the potential interference from governments. The technology underpinning it – blockchain – involves a global network of millions of nodes, which makes it the cryptocurrency almost indestructible as soon as the Internet lives.

When it comes to Facebook’s Libra, the US government has much more control and can stop its launch. But even if it goes live, Libra’s blockchain will be a permissioned version involving only 100 nodes that represent big corporations.

In Reality, US Could Destroy Bitcoin

However, in theory, Bitcoin is not infallible, and some governments have the potential to ban citizens from using it. Countries with a less developed internet infrastructure could simply shut down the web. Last month, Sudan saw an internet blackout that carried on for weeks. The government deliberately cut off the Internet to stifle local protests, but it can apply the same tactic to prohibit the use of cryptocurrency.

Nevertheless, such drastic moves are possible with autocratic governments only. The US would never consider such tactics.

Instead, if the US establishment really considered Bitcoin a threat, they would simply buy it. Yes – that’s right. Think about it – American economists and cryptography experts always simulate various emerging phenomena to forecast their potential directions and impact. James Rickards explains in his book “Currency Wars: The Making of the Next Global Crisis,” how he took part in currency war simulations in a broader program by the US government to understand the potential impact of various monetary strategies.

The US Government Could Buy All Available Coins

It’s hard to believe that the US government and intelligence agencies didn’t understand the potential of Bitcoin. The FBI seized the Silk Road as early as 2013, so the US government knew about the threat of a decentralized currency. If it really wanted to kill Bitcoin, the government could just buy all the available coins through its agents, as the market cap at that time was only $1 billion.

The US can use the same trick even today, even though the market cap is now more than $175 billion. If you take out the lost coins and those owned by hodlers, the government would only need around $100 billion to stop this “threat” called Bitcoin. In 2008, the US spent over $700 billion for the bank bailout, while the Fed spent trillions for its quantitative easing programs (Q1, Q2, Q3).

If You Can’t Beat Them, Join Them

So why is Bitcoin still there? Well, because the US government doesn’t actually mind it. Maybe Bitcoin came from the sincere intention to damage the traditional finance, but in reality, it helps the US dollar cope with its inflation in a shift to a new financial system revolving around digital money issued by central banks.

The USD has the status of the world reserve currency. Up until 1971, the American currency was backed by gold with the price of $35 per troy ounce, as per The Bretton Woods Agreement. It didn’t stop the Fed from printing out money out of thin air though, but the US always knew how to export inflation (mainly through generous grants like the Marshall Plan initiative).

After the Nixon shock in 1971, the US dollar became a free-floating currency, as the gold standard was removed. However, the US reached some agreements with Saudi Arabia (and other OPEC countries) to sell its oil exclusively in USD. This helped the American currency secure global demand, which enabled it to continue to print money out of thin air and buy everything cheap or at no cost at all.

Those who openly dared to sell their oil for other currencies rather than USD ended badly. The point is this – periodically, the US needs a new market to export its dollar inflation. In other words, it has to secure USD demand to continue printing money without devaluing its currency. The collapse of the USSR, along with different wars here and there allowed the US to flood virgin markets with its paper money.

Bitcoin Helps USD Demand

Bitcoin is another such market that attracts billions of US dollars. Thus, it helps the US write off part of the inflation. The Fed continues to print money without end. Meanwhile, as crypto-analyst Willy Woo figured out, institutional investment negatively impacts Bitcoin price action. The fact that only a few hands control the coin’s supply doesn’t make Bitcoin a good means of exchange.

However, this might be the final phase of the show, as the world is moving towards digital currencies indeed. On Sunday, Agustin Carstens, head of the Bank for International Settlements (BIS), told Financial Times that central banks would issue digital currencies sooner than we think.

The central banks has anticipated the shift long ago. Bitcoin is helping the US dollar endure the transformation smoother and give people the illusion that they can actually outsmart the global elite.

What’s your prediction on Bitcoin’s behavior when government-backed digital currencies become the norm?


Images via Shutterstock, Federal Reserve Economic Data (fred.stlouisfed.org)

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Bitcoin Is ‘Ludicrously Underpriced’: Ex-Goldman Sachs Exec

bitcoin price moon potential

Bitcoin’s market cap could explode to $8 trillion even under conservative estimates, former Goldman Sachs executive, Raoul Pal has said. 


Bitcoin Market Cap To $8 Trillion?

Speaking during his appearance on the Stephan Livera Podcast July 29, Pal, who is founder and CEO of Global Macro Investor and Real Vision Group, suggested the potential for Bitcoin’s value increasing was all but limitless.

The main barrier for commentators today, he argued, was simply getting their heads around the kind of numbers involved in the future. 

“…If you try and get your head around the digitization of everything, if you try and get your head around an alternative financial system, even if it has a low probability, right? If you recreate a low probability of, let’s say, what’s the global money supply and global debt? It’s something like, I don’t know, call it 80 trillion dollars or something,” he said. 

“…So if it’s worth 80 trillion dollars, let’s say you have a 10% probability, that’s 8 trillion dollars. It’s currently worth 200 billion dollars. So even if there’s a 1% chance of working… what it’s telling you is (Bitcoin is) ludicrously underpriced if any of these probabilities play out.”

Degrees Of Bitcoin Buoyancy

Bitcoin has decreased its market cap in recent weeks in the wake of regulatory upheaval focused mainly on the US. At press time, the figure circled $174 billion. 

As Bitcoinist reported, forecasts of a giant leap in market cap even for the short term have come thick and fast as markets stage a broad recovery this year. 

In June, Arnie Hill, partner at Obsidian Capital VC Fund, said the current bull cycle alone could give way to a $1 trillion market cap.

Another version of market cap, known as a realized cap, meanwhile hit an all-time high in July despite BTC/USD prices shrinking since Hill’s prediction.

For Pal, the allure of Bitcoin’s potential forms an irresistible opportunity for major investors and institutions. 

“So that’s how crazy attractive it is, and that’s why it’s sucking in so many of these macro guys, because they’re like, ‘Damn, nothing else has this payoff,’” he continued.

This week meanwhile saw regular statistics compiler Willy Woo explain that recent bullish action came almost exclusively from such institutional interest. The main phase of the bull run, in longer terms, has yet to even begin. 

“…Mainly it was a cascade of short squeezes from quant fund activity that setup this rally,” he theorized on Twitter. 

“Long term investor buying during the rally has been small-ticket retail money; the true organically fueled bull season hasn’t started yet.”


What do you think about Raoul Pal’s Bitcoin market cap theory? Let us know in the comments below!


Images via Shutterstock, Twitter: @stephanlivera

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CryptoKitties Creators Enter NBA

Dapper Labs, a blockchain company and creator of CryptoKitties, together with the National Basketball Association (NBA) and National Basketball Players Association (NBPA) is developing a new digital platform for basketball fans, NBA Top Shot. According to the company, the platform will allow basketball fans to purchase, trade and own digital NBA collectibles on

Bitcoin Price Rejected From $10K, Or the Start of a Bullish Reversal?

This morning, July 31, 2019 Bitcoin price soared from lows around $9,500 to a local high of $10K before the leading crypto asset by market cap took a short pause.

Bears have been in control ever since Bitcoin price was rejected from $13,800, and has struggled to maintain the bullish momentum it has had behind it since the early April rally first began. But Bitcoin price is also not going down without a fight from bulls, who may now be turning the tide if the push above $10K can be maintained.

Bitcoin Price at $10K: Bearish Continuation or Bullish Reversal?

Over the month of July, Bitcoin price has fallen steadily from its June highs near $14K. After a powerfully violent rejection that resulted in a flash crash that knocked out most exchanges, Bitcoin has struggled to revisit highs and continues to set higher lows and lower highs – the exact definition of a downtrend.

Related Reading | Bitcoin Historical Monthly Performance Could Shed Light on What’s Next for Crypto 

But as the first-ever crypto-asset appears to be on the ropes and flirting with further downside, bulls have begun to show signs of strength once again, and the push to $10K may be the beginning of a full-blown bullish reversal.

Weekly support at $9,400 may have proven too strong for bears to break through, and have given bulls the slight upper hand in recent days. However, Bitcoin will need to break and close above weekly resistance around $10,200 in order for the reversal to have the momentum that bulls will need to set a higher high and resume Bitcoin’s uptrend.

Pivotal Moment for The Short-Term Future of BTC and Crypto

Bitcoin price is clearly at a pivotal point. During the last bull market, corrections rarely exceeded a 30% drop, and each 30% drop resulted in roughly a 150% increase from each correction. With the current correction slightly over 30%, if Bitcoin sets a new high from here, it’s almost certain that a new bull run is confirmed and the price per BTC could reach a new all-time high in a matter of weeks to months.

The bearish scenario would have seen this small rejection at $10K to be the final blow to bulls who are floundering from the recent downtrend and sell pressure.

Related Reading | United States Regulators Begin Crack Down on Crypto and Bitcoin Crime 

Sell pressure has only picked up in recent days, following the massive rejection at $13,800. Since then, the United States government has come out in full force, making threats, negative statements, and rolling out stiff regulation across the crypto industry. The fear, uncertainty, and doubt have caused altcoins to capitulate, Bitcoin price to drop, and the entire market to come to a standstill as can be seen in trading volume dwindling.

Where Bitcoin price goes in the next week or so could define its trend for the remainder of the year. Will we see a new all-time high after the important FOMO trigger at $10K is breached again, or is that FOMO trigger now resistance and this was the last stand for worn-out bulls? only time will tell.

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Bitcoin Reclaims $10,000 in Sudden Surge: Can Bulls Keep the Pace?

Well then. Bitcoin (BTC) has just reclaimed $10,000 in a sudden surge to the upside. As of the time of writing, the cryptocurrency sits just shy of $10,000, finding itself up 4% in the past 24 hours.

Related Reading: Bitcoin and Crypto Shouldn’t & Can’t Be Banned, Say Politicians: Why?

Interestingly, altcoins have underperformed the market leader, accentuating the trend of BTC outperforming its ilk during sudden moves higher.

Bitcoin Moves Past $10,000 After Lull

After over a week of a price action lull, BTC managed to break out on Tuesday. After failing to break past $9,700 multiple times, Bitcoin ticked higher on Tuesday morning, moving past a key resistance level at $9,800. Then, at around 1:00 pm (UTC), bulls managed to take control of the market, pushing the price of BTC quickly to $10,000.

This move caught many traders with their pants down, as there has been a multitude of calls for lower lows pushed over recent days. Also, there were no positive news stories about the cryptocurrency industry released during this time, making this Bitcoin surge that much more confusing.

While it isn’t clear if there is any correlation here, this writer noticed that the publishing of an article from CoinDesk about the first “physical” Bitcoin futures lined up with the move from $9,850 to $10,000. Notably, the article was published at 1:00 pm (UTC), which, as aforementioned, is when the aforementioned movement began.

What Are Analysts Saying? 

What are analysts saying right now?

Interestingly, it’s a bit of a mixed bag, despite the fact that Bitcoin reclaiming the auspicious $10,000 price point is quite notable.

Through his Telegram channel, Joe McCann recently wrote that BTC is looking slightly overextended on the five-minute chart, later adding that he is looking to ride a short to $9,830.

However, he adds that from a medium-term time frame, things are looking a bit better. He noted that Bitcoin is starting to exhibit a move towards a Moving Average Convergence Divergence (MACD) crossover on the one-day chart, which last occurred prior to BTC’s 60% move from $8,500 to $14,000.

So, the conclusion that can be drawn from this is as follows: BTC is likely overextended in the short term. But, should bulls manage to hold key levels, Bitcoin could print a bullish technical crossover, creating a catalyst for yet another strong move higher.

Many analysts are still coping with this move. But over the next hours, sentiment on this surprising move to retake $10,000 should become clear.

Featured Image from Shutterstock

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Ethereum Stablecoins Post Better Quarterly Growths than Venmo

Stablecoins launched atop the Ethereum blockchain are growing better than Venmo, according to blockchain research firm TradeBlock.

The New York company measured and combined the volumes of five Ethereum-based stablecoins – Dai, Gemini Dollar, Paxos, USD Coin, and Tether – between Q1/2018 and Q1/2019. The first fiscal quarters showed slight growths in their net transactions. But in Q4/2018 and Q1/2019, the volume surged exponentially compared to previous recordings.

ethereum, stablecoins, tether, dai

Transaction Counts of Ethereum-based Stablecoins | Image Credits: TradeBlock, Mihailo Djelic

TradeBlock pitted the stablecoins’ data against that of Venmo, a mobile payment service. The researcher found that the transactional growth of Ethereum’s dollar-pegged coins was more than that of the PayPal subsidiary. Venmo processed circa $21 billion worth of transactions in Q1/2019, while stablecoins did just about $9 billion in the same timespan. Two quarters ago, Venmo had posted circa $17 billion in volume, while its Ethereum counterparts were near $3 billion.

venmo, ethereum, stablecoins

TradeBlock Expects Stablecoins to Surpass Venmo’s Volume | Image Credits: TradeBlock

The massive leap of stablecoins allowed TradeBlock to predict a similar scenario in Q2/2019. It predicted that the quarter would see those Ethereum tokens surpassing Venmo. The data, nevertheless, was not available at the time of this press.

What Pumped Ethereum Stablecoins

One could notice that Q4/2018 and Q1/2019 saw the launch of new stablecoins: USD Coin and TrueUSD. While USD Coin received backing from US-based regulated cryptocurrency exchanges Coinbase and Circle, TrueUSD was supported by TrustToken asset tokenization platform. Both coins brought considerable volumes atop the Ethereum blockchain.

Meanwhile, the demand for stablecoins, especially Tether, started surging during late Q1 2019. That coincided with a bitcoin price rally which began on April 2 and continued until June 26. In between, the supply of Tether increased from 2.52 billion to 2.82 billion.

stablecoin, tether

Tether Supply Chart YTD | Image Credits: Coin Metrics

Traders use stablecoin to eliminate the necessity of converting their cryptocurrencies to fiat money every time they exit a trade. Stablecoin mirrors the US dollar on cryptocurrency exchanges, which explains why their volume went up during a wild upside swing in the bitcoin market. Traders entered and exited market rapidly during the price rally.

Worth a Comparison?

Venmo and Ethereum stablecoins are two different species altogether. While the former is a peer-to-peer payment service, the latter is a wannabe in the same regards.

US exchange Coinbase in May announced that businesses could accept USD Coin via its Coinbase Commerce app, promising no transaction fees, no chargebacks, and full control over funds. As of that time, the merchant app had exceeded $50 million in transactions since its launch in February 2018.

It appears that stablecoins backed by regulated firms are trying to acquire hard the payment market mousetrapped by big financial companies, including Venmo. But USDC remains an idiosyncratic effort. In reality, all the stablecoins mainly serves as a hedge against cryptocurrencies’ inherent price volatility.

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The PIT: Blockchain.com Rolls Out Speedy Cryptocurrency Exchange

Popular bitcoin wallet company Blockchain unveiled its new cryptocurrency exchange, The PIT, on July 30th.

The coming platform’s main selling points? Its infrastructure has been designed with extreme speed and deep liquidity in mind, so users shouldn’t have to worry about trades being botched by exchange outages or thin order books.

The owners of blockchain.com had started work on the venue last summer. Since then, the company assembled a team of experts from the mainstream finance and tech arenas to actualize The PIT.

The Pit

As the Blockchain team noted in their Tuesday announcement:

“We built an all-star team of veterans from NYSE, TD Ameritrade, Google, Goldman Sachs, UBS, Interactive Brokers, and Revolut, to build it from the ground-up […] And what we delivered is not only the fastest in crypto by an order of magnitude – we measure in microseconds, not milliseconds – but a matching engine that could go head-to-head against any machine engine in the entire world.”

With that said, the platform has been designed for institutional investors and retail investors alike. The exchange’s immediate prospects will be boosted by the sizable pipeline of Blockchain’s wallet users, of which there are reportedly over 40 million at present.

Notably, these users will be able to use The PIT in a non-custodial manner, i.e. trading right from within their Blockchain wallets and without needing to deposit crypto into a centralized venue first. The company’s trading platform launch is its latest strategic bid to make the Blockchain ecosystem a one-stop shop for all things cryptocurrency.

“Folks are logging in to transfer their funds to outside exchanges,” Blockchain chief executive officer Peter Smith told The Block. “This will help us pull them deeper into our ecosystem.”

With registrations for The Pit having started on July 30th, traders can now sign up for the platform to queue up for onboarding. At launch, nearly 30 different cryptocurrencies will be supported on the exchange.

bitFlyer Turns Attention to Europe

As a European-based operation with a new exchange on the scene, Blockchain will be keeping an eye on its proximate competition. A newcomer fitting that bill is bitFlyer Europe.

Indeed, popular Japanese crypto exchange bitFlyer is looking to gain a foothold well beyond Asia. On July 30th, the European branch of bitFlyer declared it was opening up a basic bitcoin buys and sells service to complement its advanced trading portal, Lightning.

“Not only is bitFlyer Buy/Sell easy to use, but with us users have the confidence that they are using a trusted, regulated platform with long-standing global heritage,” bitFlyer Europe chief operating officer Andy Bryant said.

The European subsidiary was first granted permission to operate in the European Union in January 2018. “When I set up bitFlyer in 2014, I did so with global ambitions,” bitFlyer CEO Yuzo Kano noted at the time.

Switzerland Set to Get First Regulated Crypto Exchange

Zug-based cryptocurrency startup Smart Valor just raised $3.25 million USD in a new fundraising round. Those funds will prove quite useful, since the company also just announced plans to open up the inaugural regulated cryptocurrency exchange in Switzerland.

The Swiss exchange will be complemented by a parallel exchange operation ran out of the small European country of Liechtenstein, the company said.

On the news, CEO Olga Feldmeier highlighted how these pro-crypto countries have hitherto been under-served when it comes to cryptocurrency exchange venues:

“[U]ntil today, ironically enough neither Swiss Crypto Valley nor Liechtenstein had an exchange offering trading and custody of digital assets. Smart Valor is changing this, giving the privilege of stable, safe-haven jurisdiction not only to the rich, but to all.”

Alas, this week the biggest winners seem to be European crypto users, who have a slew of new trading venues to look forward to. Which will prove most popular remains to be seen, of course.

The post The PIT: Blockchain.com Rolls Out Speedy Cryptocurrency Exchange appeared first on Blockonomi.

UK’s Crypto Industry Gets Final Guidance on Cryptoassets

The Financial Conduct Authority (FCA), a financial regulatory body in the United Kingdom, issued the Final Guidance on Cryptoassets today. This Policy Statement is FCA’s response to Guidance on Cryptoassets Consultation Paper published in January this year, as it was reported. It summarizes the feedback to that Consultation paper and FCA’s responses, and it sets out

Optimism Dwindles as Indian Finance Minister Evasive on Crypto Ban Bill

The crypto industry in India is still in limbo this week while politicians acknowledge the proposed ban bill but remain evasive. The shift from regulation to blanket ban has sent shock waves through the nascent industry in the world’s second most populous country.

Finance Minister Responds to Crypto Bill

According to a new report examining the time line of the proposed blanket ban, it was a last minute decision. The storm started brewing in late 2017 when the Inter-ministerial Committee (IMC) concluded that banning the use of cryptocurrencies would be challenging to implement and would likely drive some operators underground.

A second meeting in early 2018 took a harsher stance stressing that the government would not consider crypto assets as legal tender and was taking measures to eliminate them. In recent meetings with two options of regulation or prohibition, lawmakers at the IMC favored the latter.

India’s finance and corporate affairs minister, Nirmala Sitharaman, spoke about the latest efforts to purge the crypto industry in a recent interview with the Economic Times. The ‘Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019’, was made public on July 22.

When asked when she proposed taking the legislation to cabinet, she responded rather vaguely focusing more on the content of the report;

“They have gone much ahead of all other countries that have thought about it. It’s a very futuristic and well-thought-out report. I have not spent time on it after the presentation. Of course, we will look into it soon and come back with a position. That was also reported in court as there is a case going on,”

The Reserve Bank of India (RBI) has been against cryptocurrency from the start and appears to be pulling the strings here. A number of petitions filed last year against bank’s restrictions on using fiat accounts for crypto trading remain without response.

Finance Minister Uninformed

Blockchain Lawyer founder, Varun Sethi, told Bitcoin.com that the FM had not stated anything negative though it does appear that the bill is not a high priority for her. He added;

“There is surely no doubt that Indian report is rather comprehensive however she has reserved her comments about her thoughts post the issuance of report, thereby the reactions by the community are yet to be captured.”

CEO of local crypto exchange Wazirx, tweeted that the FM was misinformed and that the report was flawed;

“Misinformation about Crypto has reached our FM due to the Flawed Crypto Report. Ban is never a futuristic solution to anything. Report does not even classify crypto correctly”

The resistance to the proposed crypto blockade is growing in India. Yesterday the National Association of Software and Services Companies (NASSCOM), an Indian IT trade association, stated that regulation was a preferred solution over an outright ban.

Until the politicians share this view the optimism in India for a crypto future continues to dwindle.

Image from Shutterstock

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Kraken Gets Access to Over 60 Institutions in New Deal This Year

Jesse Powell, Kraken CEO. Source: a video screenshot, Youtube, Real Vision Finance San Francisco-based major cryptocurency exchange Kraken said it acquired Interchange, a company that enables institutional investors to "better monitor and report their cryptocurrency holdings." "The transaction creates the world’s first end-to-end crypto trading and reconciliation platform, and

Privacy-Focused Zcoin Rolls Out Zero-Knowledge Proof Protocol, Sigma

Privacy coin Zcoin came out with Sigma, its live zero-knowledge proof (ZKP) protocol that includes financial privacy, but not a trusted setup. Zcoin explained that it will be phasing out of the original Zerocoin protocol, while implementing Sigma, with the aim to tackle “a privacy coin vulnerability”, which could leave space for bad actors to create countless

Banking Committee Chairman Crapo: US Couldn’t Ban Bitcoin

bitcoin chairman crapo

Yesterday saw yet another U.S. Senate Banking Committee hearing on regulatory frameworks for digital currencies and blockchain. Libra got another bashing, and Chairman, Mike Crapo, surmised the U.S. “couldn’t succeed” in banning Bitcoin and cryptocurrencies even if it wanted to.


Good Start For Bitcoin, Bad For Facebook

Crapo introduced the hearing on a positive note for crypto, noting that although the hearings had started by examining Libra, the cryptocurrency ecosystem was diverse, saying:

It seems to me that these technologies and other digital innovations are inevitable. They could be beneficial… and I believe the US should lead in their development. I look forward to hearing more about the ecosystem during this hearing.

His colleague, Senator Sherrod Brown, continued that previous hearings had left serious concerns about Facebook’s plan to ‘run its own currency out of a Swiss Bank Account’. Questions put to Calibra head, David Marcus had been dodged, proving again that Facebook doesn’t understand accountability. According to Brown, Facebook cannot be trusted as it just doesn’t care, preferring to ‘move fast and break things’.

“Now it wants to break our currency and payment systems hiding behind the phrase innovation,” Brown said.

We should be a little suspicious when someone tells us that only big corporations can be trusted to provide critical public services.

Current US Banking System is Broken

One thing agreed on by all the panellists was that the current U.S. Banking system is not working for everyone. High fees for basic services like ATMs, lack of real-time payment processing, and minimum balance requirements, mean 25% of U.S. Citizens are unbanked or underbanked.

Circle CEO, Jeremy Allaire, opined that Bitcoin and cryptocurrency could address this imbalance, and help to create a financial system with equal opportunity for everyone.

Law Professor, Mehra Baradaran, however, suggested that financial exclusion was not the result of faulty technology, but faulty policy. She claimed that the U.S. Federal Reserve had the power to fix the banking system straight away, without the need for cryptocurrency.

Whilst this may well be true, it was somewhat off the topic for the hearing.

Regulatory Uncertainty Means US Falling Behind

Allaire said that the current uncertainty over regulation in the U.S. was leading the country to a significant loss of opportunity. Examples such as the Securities and Exchange Commission (SEC) using the seventy-year-old Howey Test, to determine the nature of 21st century digital assets, has had a serious impact on US companies.

Many digital assets do not easily fit into the classifications that are currently defined in the financial system. They are not entirely either currency, commodity, or investment, and some have features of all three. New regulation is needed , he continued, and it was important for this regulation to distinguish between the types of digital asset.

Contradicting this, Baradaran claimed that these digital assets are not new products, just delivered with new technology. Therefore they could be dealt with using existing regulation. She then undermined this argument by saying that ‘to an extent the asset fits the currency model, or the security model, so we enforce those rules’. But gave no indication of which rules we enforce when an asset fits both (or more) models.

Cryptocurrency Friendly Jurisdictions

The hearing then went on to discuss more crypto-friendly jurisdictions, as Allaire’s Circle is moving its core non-U.S. business to Bermuda.

As an example for why this might be, Allaire pointed to the SEC’s extremely narrow view of what isn’t a security. It is the coupling of utility with financial worth which makes certain digital assets innovative, and if treated as a security, the utility cannot function.

Therefore, companies creating such products would move operations elsewhere and perhaps even block U.S. citizens and companies from accessing products and technologies.

International Trade and Finance Specialist, Dr Rebecca M Nelson, assured the Committee that crypto-positive jurisdictions were not about shirking regulation, but about providing clarity. This was not the wild west; risks are controlled, but definitions are clear, whereas the U.S. had a lot of great areas.

U.S. Can’t Ban Bitcoin, Because…

Crapo then pondered the logistics of an attempt to ban cryptocurrency in the United States:

I’m not saying that it should, but… If the United States were to decide it didn’t want cryptocurrency to happen in the United States and tried to ban it… I’m pretty confident we couldn’t succeed in doing that because it is a global innovation.

However, he was interested in how a company would get around such a ban, or what methods it might use. To which Allaire pointed out that digital assets exist everywhere the internet exists. Any ban could only apply to U.S. companies trying to work in the space, and could not be enforced on the assets themselves.

What do you make of these latest comments on Bitcoin? Let us know your thoughts in the comment section below!


Images via Shutterstock, Morning Consult

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