Research: Corporations Fail to Deliver on Blockchain Hype, Scalability a Top Concern

Research: Corporations Fail to Deliver on Blockchain Hype, Scalability a Top Concern

A new report from Greenwich Associates, a provider of market intelligence and advisory services to the financial services industry, tries to answer the question: “Why have the tech and financial industries lagged their own blockchain expectations?” It identifies technical challenges as causing corporations to fail to deliver on the hype they created around a buzzword for database just to ride the coattails of Bitcoin’s popularity.

Also Read: The Daily: Robinhood Reaches 25th State, Fake Adobe Crypto Malware

Harder Than Expected

Greenwich Associates interviewed 213 global market participants said to be working on blockchain technology. Respondents included representatives from an array of corporations, like technology vendors, exchanges, and consultancy firms, but almost half (49%) work in the banking sector. And 93% of them are said to be either key decision-makers or actively involved in blockchain initiatives.

Research: Corporations Fail to Deliver on Blockchain Hype, Scalability a Top Concern

The researchers note it is fair to say that “the industry has lagged behind its own optimistic expectations from two years ago. Implementing enterprise technology designed to replace decades of legacy market infrastructure is no simple task, and 57% of blockchain executives told us it has been harder than expected.”

Transparency Not Desirable

Research: Corporations Fail to Deliver on Blockchain Hype, Scalability a Top ConcernForty-two percent of respondents cite scalability as a top concern for firms implementing distributed ledger technology (DLT) solutions. Trying to shine a positive light on the findings, Richard Johnson, Vice President of Greenwich Associates Market Structure and Technology and author of Building Blockchains, added that: “It’s important to note that a few firms have achieved much faster transaction speeds with DLT solutions—showing that competitive speeds are possible.”

Additional challenges include hardware security, transaction confidentiality, the payments leg, and the drive for so-called ‘editable blockchains’.

The survey also found that the transparency potentially provided by a blockchain is a not a very desirable feature for companies. Almost two-thirds of respondents answered that incorporating zero-knowledge proofs (ZKP), or similar technology, are an important part of an enterprise solution. “ZKPs are a recent innovation,” commented Richard Johnson. “They require an additional layer of cryptography in the consensus protocol that allows one party to prove to another that something is true without revealing any other information.”

Interestingly, the report also mentions that 14% of companies said that they were working with central banks for a solution to digital currency.

Are so called private blockchain solutions really something that banks need? Share your thoughts in the comments section below.

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‘Crypto Fund’ Approved to Manage Cryptocurrency Investments in Switzerland

Crypto Fund Gets Go-Ahead to Manage Cryptocurrency Investment Funds in Switzerland

Emerging Swiss virtual currency fund, Crypto Fund AG, said on Tuesday it had been given an asset management license by the Financial Market Supervisory Authority (Finma). The license allows the company to manage crypto-related investments within Switzerland and to solicit for others elsewhere. Crypto Fund will also be authorized to provide investment advice to corporate investors.

Also read: Online Automotive Parts Retailer Newparts Now Accepts Bitcoin Cash

Crypto Fund to ‘Accelerate Maturity’ in Crypto Markets After Getting Finma License

“The authorization represents our professional work over the last 12 months and is a major milestone for us,” said Mathias Maurer, chief operating officer of Crypto Fund, in an emailed statement to “This [license] puts…[the company] on the same playing field with other globally recognized and regulated Swiss fund managers,” he wrote.

Crypto Fund Gets Go-Ahead to Manage Cryptocurrency Investment Funds in Switzerland

Without the license, issued under the Swiss Collective Investment Schemes Act, activities of crypto firms in the Alpine country will be limited and only “subject to fulfilling compliance with money laundering,” Maurer noted.

Founded in June 2017, Crypto Fund is the financial arm of Crypto Finance AG. The Zug-based company facilitates the implementation of blockchain technology through services such as asset management and brokerage, building bridges between investors and businesses that seek to utilize the technology.

Switzerland has taken a progressive stance towards cryptocurrency, legalizing its use and formalizing crypto transactions in various contexts. But some crypto projects still find it difficult to open bank accounts and regulatory clarity to cryptocurrency-focused bankers and investors is still not as clear as it might be.

In June, Finma licensed Crypto Finance to distribute collective investment schemes and funds to qualifying investors.

Jan Brzezek

“The importance of crypto assets is growing and our aim is to accelerate maturity in these markets,” Crypto Finance chief executive officer Jan Brzezek said in an online statement.

He noted that the license was important in building confidence “for crypto assets around the world.” Brzezek is looking to seek approval for a passive investment fund in the future.

Progressive Switzerland Continues to Expand Crypto Space

Along with countries such as Gibraltar, Isle of Man, Cayman Islands and Mauritius, Switzerland has welcomed cryptocurrencies like bitcoin core and bitcoin cash, going against other governments’ sceptical view of digital coins as being opaque, volatile and speculative.

Uncertainty by legacy Swiss banks on the policing and implementation of initial coin offerings (ICOs) in the financial market made them cautious, and reluctant to issue participants in the nascent market with company accounts, leading to the departure of at least two major players this year. However, banks have started to open up. The 86-year-old private bank Maerki Baumann now accepts crypto assets.

Crypto Fund Gets Go-Ahead to Manage Cryptocurrency Investment Funds in Switzerland

Faced with competition from crypto-affirming rivals including Liechtenstein, Gibraltar and the Cayman Islands, whose banks are more welcoming, Switzerland’s financial regulator got to work with lawmakers this year to provide clarity on the policing of the ICO market. The Crypto Fund license is the latest high-profile effort to build seamless synergies in the area.

Crypto-related businesses employ hundreds of people in Switzerland, with cryptocurrency legal tender in certain contexts. Switzerland sees virtual money and blockchain as a strategic innovation in global finance and is intent on maintaining and growing the jobs it has to offer in this field. The country’s tax regulatory authority considers cryptocurrencies to be assets, subject to wealth tax and declared on annual tax returns.

According to reports, Zug, also known as Crypto Valley, ranks favorably among the most crypto-friendly cities in the world, boasting more than 400 crypto businesses. Four of the 10 biggest ICOs in 2017 were registered in Switzerland, greater than any other country, according to a PwC report.

What do you think about crypto-related investment funds? Let us know in the comments section below.

Images courtesy of Shutterstock and Crypto Finance

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European Banks Facilitated Large Crypto-Fiat Deals, Probe Finds

European Banks Facilitated Large Crypto-Fiat Deals, Probe Finds

Several financial institutions in Europe, like Danske Bank and Swedbank, have been mentioned in a Lithuanian report investigating large-scale crypto-fiat transactions that took place in the past two years. Some of the banks’ clients traded digital coins worth millions of euros and the Baltic nation’s financial crime combating agency wants to know where the first million came from. Many of the speculators are Lithuanian taxpayers.

Also read: Nordic Region’s Largest Bank Nordea Suspected of Money Laundering

Speculators Used 7 Banks to Trade Cryptocurrency Worth €661 million

European Banks Facilitated Large Crypto-Fiat Deals, Probe FindsThe Lithuanian probe covers deals exceeding €80,000. The Financial Crime Investigation Service (FCIS) found that around 500 private individuals and 100 corporate entities have conducted such transactions since 2017 attracting the attention of authorities in Tallinn. They are all clients of one of the following banks and financial services providers – SEB, Swedbank, Luminor, Danske Bank, Citadele, Pervesk, and Mister Tango, Delfi reported. The news comes after a number of major banks such as ING GroupDanske BankCredit Suisse, Citigroup and Deutsche Bank were mentioned in recent reports about money laundering cases.

According to data quoted by the Lithuanian outlet, the turnover in these crypto-related operations during the two-year period has reached €661 million. Citizens of Lithuania and Sweden are behind the three largest exchange transactions valued at 27.2, 16.6 and 14.1 million euro respectively. A resident of Lithuania has reported profits of €6 million from cryptocurrency purchases and sales, revealed FCIS director Mindaugas Petrauskas.

The FCIS is currently conducting a strategic sectoral analysis of exchange transfers involving cryptocurrency and traditional fiat money including EUR, USD and other currencies. Investigators have acquired data about both individual traders and businesses from Lietuvos Bankas, the central bank of Lithuania, and other government institutions responsible for e-money regulations, in order to examine the money flows.

Money Laundering Suspicions Again on the Table

Petrauskas said some speculators had declared not only huge turnovers but also significant profits. Part of these revenues came from cryptocurrency trading and the rest was related to initial coin offerings (ICOs). He noted that last year’s tax rate for these crypto incomes in Lithuania was only 5%. The official pointed out that many of these traders had not revealed the origin of their initial capital opting to report both the investment and the returns as profit.

European Banks Facilitated Large Crypto-Fiat Deals, Probe FindsThe head of the FCIS stressed there is a high risk of money laundering in both crypto trading and token sales. Lithuania has been experiencing a rapid growth in the crowdfunding sector since the beginning of this year. If 2017 saw only about €82 million invested in local ICOs, in 2018 the total so far amounts to €500 million. “The question arises as to where does it come from, that’s a lot of money,” Mindaugas Petrauskas said and added that the Finance Ministry in Tallinn has submitted a set of proposals aimed at regulating the ICO industry.

The Lithuanian financial crime combating unit expressed concerns regarding several aspects of the crypto space including the anonymity of transactions, the fact that crypto-related services ­­like exchanges and wallets are often located in different jurisdictions, the international character of the deals and the decentralized nature of cryptocurrencies – features that the crypto community perceives as positives.

What do you think about the role of banks in large-scale crypto-fiat transactions? Tell us in the comments section below.

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Frictionless Commerce: A Story of How Easy It Is to Start Accepting Bitcoin Cash

Frictionless Commerce: A Story of How Easy It Is to Start Accepting Bitcoin Cash

Earlier this week received an email from an e-commerce shop owner who was having lots of issues dealing with traditional payment providers. Many of the problems stemmed from him not having a formal address and having bank accounts in different countries. However, the owner of store quickly found out about Coinbase Commerce and how easy it is to accept the frictionless digital asset bitcoin cash and other cryptocurrencies.

Also read: Popular Discussion Board 4chan Now Accepts Cryptocurrencies for Passes   

An Online Store Owner’s Difficulties With Traditional Payment Providers

This week an individual named Fabio, the owner of the online fashion outlet, sent an email detailing his struggle with dealing with traditional payment providers like Paypal and credit cards. Fabio is originally from Italy and he lived in the UK for a few years, but just recently he moved to Dubai with his girlfriend.

Frictionless Commerce: A Story of How Easy It Is to Start Accepting Bitcoin Cash
Fabio the owner of just added Bitcoin Cash (BCH) acceptance to the e-commerce shop via the Coinbase Commerce platform.

Since moving to Dubai, Fabio realized how much harder it was to set up payment services for the online business he recently started. Fabio began to have issues with credit card services and Paypal, and had to dedicate lots of hours dealing with lawyers, agencies, and other countries to get things situated.   

“Since all of our documents are in the name of my girlfriend and I am only renting a space, I don’t actually own an address on my own — This is where I started to realize that I couldn’t do many things since I don’t have a “proof of address,” Fabio explains to “My passport is Italian and my bank account is in the UK and UAE — This is confusing for a lot of banks when you need to ask them to verify your payments,” the store owner adds.

Frictionless Commerce: A Story of How Easy It Is to Start Accepting Bitcoin Cash
Fabio said he had a lot of problems with laws and traditional financial institutions. 

Coinbase Commerce and Bitcoin Cash to the Rescue

Fabio continues by saying that governments and laws have not been on his side so he recently created an account with Coinbase Commerce. To Fabio’s surprise setting up an account for to accept cryptocurrencies only took him five minutes.

“Nobody asked me where I was from, passport, gender, nationality etc. — And since for me the real bitcoin is Bitcoin Cash and I don’t want to struggle with fees, I am happy to tell you that is probably the first Bohemian clothing style e-commerce site that is proudly accepting ONLY Bitcoin Cash,” Fabio explains.

The Bohemian clothing style shop owner continues:

The power that BCH is unleashing to people is insane, I can now focus on what I like to do best, serving customers with great products at extremely cheap prices. Unfortunately, not that many crypto-owners are using cryptocurrencies for commerce and that’s why I wanted to reach out — I know your message is to let people to start using BCH as money and I hope you succeed.

Frictionless Commerce: A Story of How Easy It Is to Start Accepting Bitcoin Cash
Signing up for a Coinbase Commerce account takes about five minutes and the application is non-custodial which means you hold your keys.

Signing up for Coinbase Commerce Takes Little Registration Effort and an Account Can Be Created in Five Minutes  

After hearing Fabio’s story we decided to register at Coinbase Commerce (CC) to see how fast the sign-up process is and how much information is needed to set up. When entering the CC website the page asks the user for an email to register an account. We simply typed in our email and the account verification was sent to us instantly.

Frictionless Commerce: A Story of How Easy It Is to Start Accepting Bitcoin Cash
After signing up for CC users need to customize everything and add their domain to the account.

Following this step and gaining access to the CC account the platform requires two steps before beginning — Initiating two-factor authentication and writing down a seed phrase. After that, you can configure your payment choices from four different cryptocurrencies including bitcoin cash (BCH), ethereum (ETH), bitcoin core (BTC), and litecoin (LTC). On the CC dashboard, you can toggle these currencies on and off depending on which digital assets you prefer.

Frictionless Commerce: A Story of How Easy It Is to Start Accepting Bitcoin Cash
Coinbase Commerce allows for API key creation and webhook subscriptions. An online store can also integrate the service through Woo commerce, Prestashop, Shopify, Magento, and Open Cart. 

Coinbase Commerce then allows you to customize the payment page by whitelisting a domain so you can embed a payment button on your website, create an API key, and add a webhook subscription URL to start receiving payment notifications. So signing up for Coinbase Commerce literally only takes five minutes like Fabio said and it only requires an email and a two-factor authentication app. However, customizing the merchant options will take store owners a bit more time to configure the payment services to the website in question.  

Non-Custodial Savings and the ‘Importance of Economic Freedom’

Further unlike the Coinbase exchange or some of the other cryptocurrency payment providers, Coinbase Commerce gives the user the seed phrase all the assets are in the owner’s control. The platform’s ease of use allows people like Fabio and his e-commerce shop the ability to accept cryptocurrencies without all the traditional hassles involved with existing financial institutions.

Fabio says since the experience he’s learned a great lesson and “understands the importance of economic freedom.”

What do you think about Fabio’s story? Have you tried the Coinbase Commerce platform? Let us know what you think about this story in the comments section below.

Images via Shutterstock, Pixabay,, and Coinbase Commerce

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Banks, Money Mules and Front Companies Aid Terrorists in Conflict Zones Launder Money

Banks, Money Mules and Front Companies Aid Terrorists in Conflict Zones Launder Money

Terror financing is taking on a new shape, but still retaining its old aides. Environmental crimes such as wildlife trafficking and illegal ivory sales have overtaken the drug trade as the major income source for terrorists around the world, accounting for more than a third of their revenue. However, it is not cryptocurrency that is helping non-state militias and terrorist groups fuel conflict in countries like Syria, the Democratic Republic of Congo and Afghanistan. Rather, banks, human mules and fake companies are the preferred and dominant conduits.

Also read: Northern Bitcoin Ag Lists on Munich Stock Exchange Mid-Tier Market

Environmental Crimes Overtake Drug Trade as the Major Income Source for Terrorists

Environmental crimes such as illegal logging and the ivory trade have now overtaken drug money as the biggest source of funding for militias and terrorist organizations worldwide – and they aren’t using cryptocurrency to do so – a new report by Interpol has revealed.

Of the $30.2 billion in illicit flows generated annually in conflict zones to fund terrorist groups like the Islamic State, Al Shabaab, Boko Haram and the Taliban, 38% comes from illegal deals in timber, mining, fishing, charcoal and wildlife trafficking, it says. The drug trade accounts for 28%, illegal taxation 26%, and kindnappings and foreign donations 3% each.

Banks, Money Mules and Front Companies Aid Terrorists in Conflict Zones Launder Money

Altogether, the World Atlas of Illicit Flows, a study by the global policing agency Interpol, Rhipto, a Norwegian UN-collaborating centre, and the Global Initiative Against Transnational Organized Crime identified more than 1,000 routes used for smuggling and other illicit flows around the world. The seven main extremist groups of insurgents and terrorists receive funding of between $1 billion and $1.4 billion each year combined.

Much of the cash flow from these activities is moved largely through formal banking channels, legitimate front companies and in cash, contrary to growing claims from cynics implicating cryptocurrency in terrorist financing.

“Organized criminals use smuggling networks that also increasingly enable foreign fighters to move across borders to safe havens, and to stockpile or ship resources by means of formal and informal networks of financial flows,” the report says.

“Over 2,600 unaccounted-for (predominantly Islamic State) foreign fighters have left Syria and Iraq, an unknown number of them via Libya, using these illicit smuggling networks, and they use them to get access to forged papers, as well as routes to safe havens.”

The study shows that monetary practices embedded in Muslim culture, such as donating to charities and informal money-transfer centers, have compounded the difficulty in tracking down terrorist financial links.

Allegations of Cryptocurrency Fueling Illicit Flows ‘Disingenuous and Misleading’

Cryptocurrencies have faced intense criticism lately over allegations of aiding money laundering, largely because of their pseudonymous nature. Shapeshift has been accused of laundering $9 million in the last two years, allegations that chief executive officer Erik Voorhees dismissed as “disingenuous and misleading.” More than 40 other crypto exchanges have faced similar allegations, according to a recent article by the Wall Street Journal.

Banks, Money Mules and Front Companies Aid Terrorists in Conflict Zones Launder Money

Voorhees instead pointed to banks as the biggest culprits, citing a UN report which put the amount of alleged illicit flows that banks facilitate each day at $2.7 billion – about 219,000 times as much as Shapeshift is accused of laundering over two years. Last week, Thomas Borgen, chief executive officer of Danish bank Danske Bank resigned  over a scandal involving $234 billion allegedly laundered via its Estonian branch during the eight years to 2015. British banking group HSBC Holdings PLC has been accused of laundering billions of dollars in Africa and Asia.

Militias Rake in Millions of Dollars from Illegal Taxation, Extortion and Kidnappings

According to the Interpol report, some 40,000 members of the Taliban earned an estimated annual income of $75–$95 million from taxation – particularly of drugs, land and agricultural produce, and from donations from abroad. In mid-2017, Islamic State made an estimated $10 million a month, but “with dramatic losses of territory, Islamic State probably has at their disposal no more than a quarter of this. This comes largely from confiscations and illegal taxation,” said Interpol.

The merged al-Qaeda groups Hay’at Tahrir al-Sham in Syria and Jama’at Nasr al-Islam wal Muslimin in the Sahel make an estimated $18–$35 million and $5–$35 million respectively from illegal taxation, donations, kidnapping for ransom, extortion, smuggling of counterfeit cigarettes, drugs and illegal taxation, it said.

Banks, Money Mules and Front Companies Aid Terrorists in Conflict Zones Launder Money

Al-Shabaab in Kenya and Somalia receives about $20 million, half from the illicit charcoal trade and the rest from other forms of taxation, while Boko Haram in Nigeria made $5–$10 million mainly from taxation, bank robberies, donations from other terrorist groups and kidnapping for ransom.

Over 8,000 rebels inside the DRC make at least $13 million a year from the exploitation and taxation of natural resources “and this sum is but a small portion of the total estimated value attributed to illegally exploited resources in the eastern DRC, which has been put at over $770 million a year,” the report added.

What do you think about money laundering in conflict zones? Let us know in the comments section below.

Images courtesy of Shutterstock

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