Japanese crypto exchange Coincheck officially announces it will end trading of four privacy-oriented altcoins XMR, ZEC, DASH, and REP in June
Social trading platform Etoro is expanding into the US. Pre-registration has already begun. Initially, 10 cryptocurrencies will be offered, but the company plans to add more throughout the year. The company’s crypto business has boomed in recent years, with 70% of its users reportedly trading cryptocurrencies.
Etoro Launching in the US
Social investment platform Etoro has announced that it is expanding into the US market. CEO Yoni Assia unveiled the company’s plans at the Consensus conference on Tuesday. According to the announcement:
The launch will initially enable U.S.-based users to invest in 10 cryptocurrencies, with more to be added throughout 2018. Users will have access to a community feed and tools, letting them engage in conversations about cryptocurrencies and follow the investment strategies of other U.S. users.
Launched in 2007, Etoro is regulated in Europe by Cyprus Securities and Exchange Commission and in the UK by the Financial Conduct Authority. The company says it has more than 10 million registered users across 140 countries in Europe, Asia, and Australia, with an accumulated capital funding of more than $162 million. Currently, its website shows 247,387,974 open trades on the platform.
Assia commented, “Etoro will continue to focus on simplicity and user-friendliness so that more diverse groups will feel welcomed into the global crypto community.”
Pre-Registration Begins for US Users
The company explained that US users can join the waiting list for the platform starting on May 15. “Users will be able to experience the interface and perform mock cryptocurrency investments via a virtual portfolio,” its announcement details, adding:
The 10 cryptocurrencies that will be initially available are: bitcoin, ethereum, litecoin, XRP, dash, bitcoin cash, stellar, ethereum classic, NEO, and EOS. Etoro intends to integrate several more cryptocurrencies throughout 2018.
“The platform will offer U.S. investors three ways to access the crypto markets,” Etoro described. The first way is “by manually investing in a coin.” The second is “by automatically copying the trades of other traders on the platform to benefit from their knowledge and investment expertise.” The third is “by investing in a Crypto Copyfund which provides a diversified portfolio of major crypto assets.”
A Copyfund is Etoro’s investment product aimed at helping investors minimize long-term risk, its website states. “Once you invest in a Copyfund, your capital is professionally managed by Etoro’s investment committee. Each Copyfund’s performance is analysed in depth and rebalanced automatically to maximise its gain potential.”
Etoro’s Booming Crypto Business
In January last year, the platform added cryptocurrencies. According to Fortune, “In recent years, the company’s crypto business has boomed with 70% of its users trading digital currency.”
In an interview with the news outlet, Assia predicted that Etoro’s “unusual social media features would help it gain a foothold” in the US. “Those features let users create a public profile of their investments, which in turn allows others on Etoro to track and copy their trading decisions.”
Commenting on the crackdown by the US Securities and Exchange Commission (SEC) targeting tokens that resemble securities, Assia told the publication that he is confident “the digital assets Etoro plans to list are currencies not securities.” He expects Etoro will list as many as 15 tokens by the end of the year, the news outlet conveyed, adding that the company also “plans to open a global wallet and exchange service later this year that is aimed at institutional traders.”
Currently, the aforementioned ten cryptocurrencies are already being offered on the platform for non-US users.
What do you think of Etoro launching in the US? Let us know in the comments section below.
Images courtesy of Shutterstock, Medium, and Etoro.
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Belarus considers digital technology a top priority, prepares digital economy resolution for the OSCE session in Berlin
Digital services have frequently been in collision — if not out-and-out conflict — with the rule of law. But what happens when technologies such as deep learning software and self-executing code are in the driving seat of legal decisions?
How can we be sure next-gen ‘legal tech’ systems are not unfairly biased against certain groups or individuals? And what skills will lawyers need to develop to be able to properly assess the quality of the justice flowing from data-driven decisions?
While entrepreneurs have been eyeing traditional legal processes for some years now, with a cost-cutting gleam in their eye and the word ‘streamline‘ on their lips, this early phase of legal innovation pales in significance beside the transformative potential of AI technologies that are already pushing their algorithmic fingers into legal processes — and perhaps shifting the line of the law itself in the process.
But how can legal protections be safeguarded if decisions are automated by algorithmic models trained on discrete data-sets — or flowing from policies administered by being embedded on a blockchain?
These are the sorts of questions that lawyer and philosopher Mireille Hildebrandt, a professor at the research group for Law, Science, Technology and Society at Vrije Universiteit Brussels in Belgium, will be engaging with during a five-year project to investigate the implications of what she terms ‘computational law’.
Last month the European Research Council awarded Hildebrandt a grant of €2.5 million to conduct foundational research with a dual technology focus: Artificial legal intelligence and legal applications of blockchain.
Discussing her research plan with TechCrunch, she describes the project as both very abstract and very practical, with a staff that will include both lawyers and computer scientists. She says her intention is to come up with a new legal hermeneutics — so, basically, a framework for lawyers to approach computational law architectures intelligently; to understand limitations and implications, and be able to ask the right questions to assess technologies that are increasingly being put to work assessing us.
“The idea is that the lawyers get together with the computer scientists to understand what they’re up against,” she explains. “I want to have that conversation… I want lawyers who are preferably analytically very sharp and philosophically interested to get together with the computer scientists and to really understand each other’s language.
“We’re not going to develop a common language. That’s not going to work, I’m convinced. But they must be able to understand what the meaning of a term is in the other discipline, and to learn to play around, and to say okay, to see the complexity in both fields, to shy away from trying to make it all very simple.
“And after seeing the complexity to then be able to explain it in a way that the people that really matter — that is us citizens — can make decisions both at a political level and in everyday life.”
Hildebrandt says she included both AI and blockchain technologies in the project’s remit as the two offer “two very different types of computational law”.
There is also of course the chance that the two will be applied in combination — creating “an entirely new set of risks and opportunities” in a legal tech setting.
Blockchain “freezes the future”, argues Hildebrandt, admitting of the two it’s the technology she’s more skeptical of in this context. “Once you’ve put it on a blockchain it’s very difficult to change your mind, and if these rules become self-reinforcing it would be a very costly affair both in terms of money but also in terms of effort, time, confusion and uncertainty if you would like to change that.
“You can do a fork but not, I think, when governments are involved. They can’t just fork.”
That said, she posits that blockchain could at some point in the future be deemed an attractive alternative mechanism for states and companies to settle on a less complex system to determine obligations under global tax law, for example. (Assuming any such accord could indeed be reached.)
Given how complex legal compliance can already be for Internet platforms operating across borders and intersecting with different jurisdictions and political expectations there may come a point when a new system for applying rules is deemed necessary — and putting policies on a blockchain could be one way to respond to all the chaotic overlap.
Though Hildebrandt is cautious about the idea of blockchain-based systems for legal compliance.
It’s the other area of focus for the project — AI legal intelligence — where she clearly sees major potential, though also of course risks too. “AI legal intelligence means you use machine learning to do argumentation mining — so you do natural language processing on a lot of legal texts and you try to detect lines of argumentation,” she explains, citing the example of needing to judge whether a specific person is a contractor or an employee.
“That has huge consequences in the US and in Canada, both for the employer… and for the employee and if they get it wrong the tax office may just walk in and give them an enormous fine plus claw back a lot of money which they may not have.”
As a consequence of confused case law in the area, academics at the University of Toronto developed an AI to try to help — by mining lots of related legal texts to generate a set of features within a specific situation that could be used to check whether a person is an employee or not.
“They’re basically looking for a mathematical function that connected input data — so lots of legal texts — with output data, in this case whether you are either an employee or a contractor. And if that mathematical function gets it right in your data set all the time or nearly all the time you call it high accuracy and then we test on new data or data that has been kept apart and you see whether it continues to be very accurate.”
Given AI’s reliance on data-sets to derive algorithmic models that are used to make automated judgement calls, lawyers are going to need to understand how to approach and interrogate these technology structures to determine whether an AI is legally sound or not.
High accuracy that’s not generated off of a biased data-set cannot just be a ‘nice to have’ if your AI is involved in making legal judgment calls on people.
“The technologies that are going to be used, or the legal tech that is now being invested in, will require lawyers to interpret the end results — so instead of saying ‘oh wow this has 98% accuracy and it outperforms the best lawyers!’ they should say ‘ah, ok, can you please show me the set of performance metrics that you tested on. Ah thank you, so why did you put these four into the drawer because they have low accuracy?… Can you show me your data-set? What happened in the hypothesis space? Why did you filter those arguments out?’
“This is a conversation that really requires lawyers to become interested, and to have a bit of fun. It’s a very serious business because legal decisions have a lot of impact on people’s lives but the idea is that lawyers should start having fun in interpreting the outcomes of artificial intelligence in law. And they should be able to have a serious conversation about the limitations of self-executing code — so the other part of the project [i.e. legal applications of blockchain tech].
“If somebody says ‘immutability’ they should be able to say that means that if after you have put everything in the blockchain you suddenly discover a mistake that mistake is automated and it will cost you an incredible amount of money and effort to get it repaired… Or ‘trustless’ — so you’re saying we should not trust the institutions but we should trust software that we don’t understand, we should trust all sorts of middlemen, i.e. the miners in permissionless, or the other types of middlemen who are in other types of distributed ledgers… ”
“I want lawyers to have ammunition there, to have solid arguments… to actually understand what bias means in machine learning,” she continues, pointing by way of an example to research that’s being done by the AI Now Institute in New York to investigate disparate impacts and treatments related to AI systems.
“That’s one specific problem but I think there are many more problems,” she adds of algorithmic discrimination. “So the purpose of this project is to really get together, to get to understand this.
“I think it’s extremely important for lawyers, not to become computer scientists or statisticians but to really get their finger behind what’s happening and then to be able to share that, to really contribute to legal method — which is text oriented. I’m all for text but we have to, sort of, make up our minds when we can afford to use non-text regulation. I would actually say that that’s not law.
“So how should be the balance between something that we can really understand, that is text, and these other methods that lawyers are not trained to understand… And also citizens do not understand.”
Hildebrandt does see opportunities for AI legal intelligence argument mining to be “used for the good” — saying, for example, AI could be applied to assess the calibre of the decisions made by a particular court.
Though she also cautions that huge thought would need to go into the design of any such systems.
“The stupid thing would be to just give the algorithm a lot of data and then train it and then say ‘hey yes that’s not fair, wow that’s not allowed’. But you could also really think deeply what sort of vectors you have to look at, how you have to label them. And then you may find out that — for instance — the court sentences much more strictly because the police is not bringing the simple cases to court but it’s a very good police and they talk with people, so if people have not done something really terrible they try to solve that problem in another way, not by using the law. And then this particular court gets only very heavy cases and therefore gives far more heavy sentences than other courts that get from their police or public prosecutor all life cases.
“To see that you should not only look at legal texts of course. You have to look also at data from the police. And if you don’t do that then you can have very high accuracy and a total nonsensical outcome that doesn’t tell you anything you didn’t already know. And if you do it another way you can sort of confront people with their own prejudices and make it interesting — challenge certain things. But in a way that doesn’t take too much for granted. And my idea would be that the only way this is going to work is to get a lot of different people together at the design stage of the system — so when you are deciding which data you’re going to train on, when you are developing what machine learners call your ‘hypothesis space’, so the type of modeling you’re going to try and do. And then of course you should test five, six, seven performance metrics.
“And this is also something that people should talk about — not just the data scientists but, for instance, lawyers but also the citizens who are going to be affected by what we do in law. And I’m absolutely convinced that if you do that in a smart way that you get much more robust applications. But then the incentive structure to do it that way is maybe not obvious. Because I think legal tech is going to be used to reduce costs.”
She says one of the key concepts of the research project is legal protection by design — opening up other interesting (and not a little alarming) questions such as what happens to the presumption of innocence in a world of AI-fueled ‘pre-crime’ detectors?
“How can you design these systems in such a way that they offer legal protection from the first minute they come to the market — and not as an add-on or a plug in. And that’s not just about data protection but also about non-discrimination of course and certain consumer rights,” she says.
“I always think that the presumption of innocence has to be connected with legal protection by design. So this is more on the side of the police and the intelligence services — how can you help the intelligence services and the police to buy or develop ICT that has certain constrains which makes it compliant with the presumption of innocence which is not easy at all because we probably have to reconfigure what is the presumption of innocence.”
And while the research is part abstract and solidly foundational, Hildebrandt points out that the technologies being examined — AI and blockchain — are already being applied in legal contexts, albeit in “a state of experimentation”.
And, well, this is one tech-fueled future that really must not be unevenly distributed. The risks are stark.
“Both the EU and national governments have taken a liking to experimentation… and where experimentation stops and systems are really already implemented and impacting decisions about your and my life is not always so easy to see,” she adds.
Her other hope is that the interpretation methodology developed through the project will help lawyers and law firms to navigate the legal tech that’s coming at them as a sales pitch.
“There’s going to be, obviously, a lot of crap on the market,” she says. “That’s inevitable, this is going to be a competitive market for legal tech and there’s going to be good stuff, bad stuff, and it will not be easy to decide what’s good stuff and bad stuff — so I do believe that by taking this foundational perspective it will be more easy to know where you have to look if you want to make that judgement… It’s about a mindset and about an informed mindset on how these things matter.
“I’m all in favor of agile and lean computing. Don’t do things that make no sense… So I hope this will contribute to a competitive advantage for those who can skip methodologies that are basically nonsensical.”
The Wall Street Journal reported Telegram has raised $1.7 billion in anticipation of an initial coin offering (ICO). However, the company has instead decided to scrap its much publicized ICO in favor of beefing up its popular messaging service and expanding into tokenization.
Telegram Scraps ICO
Paul Vigna details how Telegram has “brought in so much money from a small group of private investors that it is calling off a planned sale of cryptocurrency to the wider investing public.” The company is effectively ditching its ICO after having raised a cool $1.7 billion.
It’s an interesting time for Telegram, to put it mildly. Recently, the encrypted messenger service celebrated gaining 200 million users. Almost immediately, the Russian government attempted to force it to provide user information, and a way to backdoor decrypt, in an effort to combat terrorism. Pavel Durov, Telegram’s charismatic founder, flatly refused, pulling lawyers from the determinative Moscow hearing. Soon after, the service was summarily banned throughout Russia.
That, in turn, set off a wave of protests, including supporters in the country flying paper airplanes (the company’s logo) as a symbol of resistance. Even Mr. Durov openly engaged in the fight, using his personal channel to suggest ways to hack around the ban. If all that wasn’t enough, Telegram’s European services ghosted for most of the continent a few days ago, and sporadically throughout the rest of the world, causing major disruptions.
Perhaps then it’s no wonder Mr. Durov is looking not to explore the ICO realm further but will instead use that newly raised cash to beef up existing services.
Telegram Open Network
According to the Journal, the company is expanding into a “digital payments platform” to compete with the likes of Bitcoin core. It will point a great deal of its new money in that direction, titling the effort the Telegram Open Network. “The network, which will be built using ‘blockchain’ ledger technology, ‘can become a Visa/Mastercard alternative for a new decentralized economy,’ the company noted in a 23-page description of its plans,” Mr Vigna described.
If these plans sound vaguely familiar, they should. In 2017, the company looked toward raising over a billion dollars in hopes of bringing-forth a token, “gram,” which would exist on a larger online platform. The company, again, has often pit its future against that of bitcoin core (BTC), suggesting the reason BTC hasn’t been widely adopted is the result of fundamentally chronic and crippling issues.
A first mover advantage Telegram might have is its near quarter of a billion user base, a built-in ready market for its services. And according to Mr. Vigna, “Telegram reported in a February Securities and Exchange Commission filing that it raised $850 million from 81 investors in a private deal. In March, the company said it raised another $850 million from 94 investors in a second private deal. The offerings were open only to accredited investors, which meant participants needed to exceed income requirements or have net worth of at least $1 million.”
Speculation, besides the above, is that the growing noose around ICOs and their pumpers from regulatory bodies around the world caused Telegram to shift away. This would also make a huge amount of business sense, as typical regulations would expose the likes of Mr. Durov to many more bureaucratic eyes. A private fundraising is just that, private.
Do you think Telegram is making a smart move? Let us know in the comments below.
Images via Pixabay, Telegram.
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The European Commission considers blockchain technology as a tool to combat disinformation online
Solving complex data-driven problems requires a lot of teamwork. But, of course, teamwork is typically restricted to companies where everyone is working under there same roof. While distributed teams have become commonplace in tech startups, taking that to the next level by linking up disparate groups of people all working on the same problem (but not in the same company) has been all but impossible. However, in theory, you could use a blockchain to do such a thing, where the work generated was constantly accounted for on-chain.
That’s in theory. In practice, there’s now a startup that claims to have come up with this model. And it’s raised funding.
Covee, a startup out of Berlin has raised a modest EUR 1.35m, in a round led by LocalGlobe in London with Atlantic Labs in Berlin and a selection of Angels. Prior to this, the company was bootstrapped by CEO Dr Marcel Dietsch, who left his job at a London-based hedge fund, and his long-time friend, Dr Raphael Schoettler, COO, who had previously worked for Deutsche Bank. They are joined by Dr Jochen Krause, CTO, an early blockchain investor and bitcoin miner, and former quant developer and data scientist, respectively, at Scalable Capital and Valora.
What sort of things could this platform be used for? Well, it could be used to bring together people to use machine learning algorithms to improve cancer diagnosis through tumor detection, or perhaps develop a crypto trading algorithm.
There are obvious benefits to the work of scientists. They could work more flexibly, access a more diverse range of projects, choose their teammates, and have their work reviewed by peers.
The platform also means you could be rewarded fairly for your contribution.
The upside for corporates is that they can use distributed workers where there is no middleman platform to pay, no management consultancy fees, and access a talent pool (data engineers, statisticians, domain experts) which is difficult to bring inside the firm.
Now, there are indeed others doing this including Aragon (decentralised governance for everything), Colony (teamwork for everything), and Upwork (freelance jobs platform individuals). All are different and have their limitations of course.
Covee plans to make money by having users pay a transaction fee for using the network infrastructure. They plan to turn this into a fully open-source decentralised network, with this transaction fee attached. But Covee will also offer this as a service if clients prefer not to deal with blockchain tokens and the platform directly.
Dietsch says: “Covee was founded in the first half of 2017 in Berlin and relocated to Zurich, Switzerland late 2017 where we incorporated Covee Network. Moving to Switzerland was important for us because it has one of the oldest and strongest blockchain ecosystems in the world and an excellent pipeline of talent from institutions such as ETH Zurich and the University of Zurich. The crypto-friendly stance of the country means it has all the necessary infrastructure as well as clear regulations for token economies.”
European Union lawmakers want online platforms to come up with their own systems to identify bot accounts.
This is as part of a voluntary Code of Practice the European Commission now wants platforms to develop and apply — by this summer — as part of a wider package of proposals it’s put out which are generally aimed at tackling the problematic spread and impact of disinformation online.
The proposals follow an EC-commissioned report last month, by its High-Level Expert Group, which recommended more transparency from online platforms to help combat the spread of false information online — and also called for urgent investment in media and information literacy education, and strategies to empower journalists and foster a diverse and sustainable news media ecosystem.
Bots, fake accounts, political ads, filter bubbles
In an announcement on Friday the Commission said it wants platforms to establish “clear marking systems and rules for bots” in order to ensure “their activities cannot be confused with human interactions”. It does not go into a greater level of detail on how that might be achieved. Clearly it’s intending platforms to have to come up with relevant methodologies.
Identifying bots is not an exact science — as academics conducting research into how information spreads online could tell you. The current tools that exist for trying to spot bots typically involve rating accounts across a range of criteria to give a score of how likely an account is to be algorithmically controlled vs human controlled. But platforms do at least have a perfect view into their own systems, whereas academics have had to rely on the variable level of access platforms are willing to give them.
Another factor here is that given the sophisticated nature of some online disinformation campaigns — the state-sponsored and heavily resourced efforts by Kremlin backed entities such as Russia’s Internet Research Agency, for example — if the focus ends up being algorithmically controlled bots vs IDing bots that might have human agents helping or controlling them, plenty of more insidious disinformation agents could easily slip through the cracks.
That said, other measures in the EC’s proposals for platforms include stepping up their existing efforts to shutter fake accounts and being able to demonstrate the “effectiveness” of such efforts — so greater transparency around how fake accounts are identified and the proportion being removed (which could help surface more sophisticated human-controlled bot activity on platforms too).
Another measure from the package: The EC says it wants to see “significantly” improved scrutiny of ad placements — with a focus on trying to reduce revenue opportunities for disinformation purveyors.
Restricting targeting options for political advertising is another component. “Ensure transparency about sponsored content relating to electoral and policy-making processes,” is one of the listed objectives on its fact sheet — and ad transparency is something Facebook has said it’s prioritizing since revelations about the extent of Kremlin disinformation on its platform during the 2016 US presidential election, with expanded tools due this summer.
The Commission also says generally that it wants platforms to provide “greater clarity about the functioning of algorithms” and enable third-party verification — though there’s no greater level of detail being provided at this point to indicate how much algorithmic accountability it’s after from platforms.
We’ve asked for more on its thinking here and will update this story with any response. It looks to be seeking to test the water to see how much of the workings of platforms’ algorithmic blackboxes can be coaxed from them voluntarily — such as via measures targeting bots and fake accounts — in an attempt to stave off formal and more fulsome regulations down the line.
Filter bubbles also appear to be informing the Commission’s thinking, as it says it wants platforms to make it easier for users to “discover and access different news sources representing alternative viewpoints” — via tools that let users customize and interact with the online experience to “facilitate content discovery and access to different news sources”.
Though another stated objective is for platforms to “improve access to trustworthy information” — so there are questions about how those two aims can be balanced, i.e. without efforts towards one undermining the other.
On trustworthiness, the EC says it wants platforms to help users assess whether content is reliable using “indicators of the trustworthiness of content sources”, as well as by providing “easily accessible tools to report disinformation”.
In one of several steps Facebook has taken since 2016 to try to tackle the problem of fake content being spread on its platform the company experimented with putting ‘disputed’ labels or red flags on potentially untrustworthy information. However the company discontinued this in December after research suggested negative labels could entrench deeply held beliefs, rather than helping to debunk fake stories.
Instead it started showing related stories — containing content it had verified as coming from news outlets its network of fact checkers considered reputable — as an alternative way to debunk potential fakes.
The Commission’s approach looks to be aligning with Facebook’s rethought approach — with the subjective question of how to make judgements on what is (and therefore what isn’t) a trustworthy source likely being handed off to third parties, given that another strand of the code is focused on “enabling fact-checkers, researchers and public authorities to continuously monitor online disinformation”.
Since 2016 Facebook has been leaning heavily on a network of local third party ‘partner’ fact-checkers to help identify and mitigate the spread of fakes in different markets — including checkers for written content and also photos and videos, the latter in an effort to combat fake memes before they have a chance to go viral and skew perceptions.
In parallel Google has also been working with external fact checkers, such as on initiatives such as highlighting fact-checked articles in Google News and search.
The Commission clearly approves of the companies reaching out to a wider network of third party experts. But it is also encouraging work on innovative tech-powered fixes to the complex problem of disinformation — describing AI (“subject to appropriate human oversight”) as set to play a “crucial” role for “verifying, identifying and tagging disinformation”, and pointing to blockchain as having promise for content validation.
Specifically it reckons blockchain technology could play a role by, for instance, being combined with the use of “trustworthy electronic identification, authentication and verified pseudonyms” to preserve the integrity of content and validate “information and/or its sources, enable transparency and traceability, and promote trust in news displayed on the Internet”.
It’s one of a handful of nascent technologies the executive flags as potentially useful for fighting fake news, and whose development it says it intends to support via an existing EU research funding vehicle: The Horizon 2020 Work Program.
It says it will use this program to support research activities on “tools and technologies such as artificial intelligence and blockchain that can contribute to a better online space, increasing cybersecurity and trust in online services”.
It also flags “cognitive algorithms that handle contextually-relevant information, including the accuracy and the quality of data sources” as a promising tech to “improve the relevance and reliability of search results”.
The Commission is giving platforms until July to develop and apply the Code of Practice — and is using the possibility that it could still draw up new laws if it feels the voluntary measures fail as a mechanism to encourage companies to put the sweat in.
It is also proposing a range of other measures to tackle the online disinformation issue — including:
- An independent European network of fact-checkers: The Commission says this will establish “common working methods, exchange best practices, and work to achieve the broadest possible coverage of factual corrections across the EU”; and says they will be selected from the EU members of the International Fact Checking Network which it notes follows “a strict International Fact Checking NetworkCode of Principles”
- A secure European online platform on disinformation to support the network of fact-checkers and relevant academic researchers with “cross-border data collection and analysis”, as well as benefitting from access to EU-wide data
- Enhancing media literacy: On this it says a higher level of media literacy will “help Europeans to identify online disinformation and approach online content with a critical eye”. So it says it will encourage fact-checkers and civil society organisations to provide educational material to schools and educators, and organise a European Week of Media Literacy
- Support for Member States in ensuring the resilience of elections against what it dubs “increasingly complex cyber threats” including online disinformation and cyber attacks. Stated measures here include encouraging national authorities to identify best practices for the identification, mitigation and management of risks in time for the 2019 European Parliament elections. It also notes work by a Cooperation Group, saying “Member States have started to map existing European initiatives on cybersecurity of network and information systems used for electoral processes, with the aim of developing voluntary guidance” by the end of the year. It also says it will also organise a high-level conference with Member States on cyber-enabled threats to elections in late 2018
- Promotion of voluntary online identification systems with the stated aim of improving the “traceability and identification of suppliers of information” and promoting “more trust and reliability in online interactions and in information and its sources”. This includes support for related research activities in technologies such as blockchain, as noted above. The Commission also says it will “explore the feasibility of setting up voluntary systems to allow greater accountability based on electronic identification and authentication scheme” — as a measure to tackle fake accounts. “Together with others actions aimed at improving traceability online (improving the functioning, availability and accuracy of information on IP and domain names in the WHOIS system and promoting the uptake of the IPv6 protocol), this would also contribute to limiting cyberattacks,” it adds
- Support for quality and diversified information: The Commission is calling on Member States to scale up their support of quality journalism to ensure a pluralistic, diverse and sustainable media environment. The Commission says it will launch a call for proposals in 2018 for “the production and dissemination of quality news content on EU affairs through data-driven news media”
It says it will aim to co-ordinate its strategic comms policy to try to counter “false narratives about Europe” — which makes you wonder whether debunking the output of certain UK tabloid newspapers might fall under that new EC strategy — and also more broadly to tackle disinformation “within and outside the EU”.
Commenting on the proposals in a statement, the Commission’s VP for the Digital Single Market, Andrus Ansip, said: “Disinformation is not new as an instrument of political influence. New technologies, especially digital, have expanded its reach via the online environment to undermine our democracy and society. Since online trust is easy to break but difficult to rebuild, industry needs to work together with us on this issue. Online platforms have an important role to play in fighting disinformation campaigns organised by individuals and countries who aim to threaten our democracy.”
The EC’s next steps now will be bringing the relevant parties together — including platforms, the ad industry and “major advertisers” — in a forum to work on greasing cooperation and getting them to apply themselves to what are still, at this stage, voluntary measures.
“The forum’s first output should be an EU–wide Code of Practice on Disinformation to be published by July 2018, with a view to having a measurable impact by October 2018,” says the Commission.
The first progress report will be published in December 2018. “The report will also examine the need for further action to ensure the continuous monitoring and evaluation of the outlined actions,” it warns.
And if self-regulation fails…
In a fact sheet further fleshing out its plans, the Commission states: “Should the self-regulatory approach fail, the Commission may propose further actions, including regulatory ones targeted at a few platforms.”
And for “a few” read: Mainstream social platforms — so likely the big tech players in the social digital arena: Facebook, Google, Twitter.
For potential regulatory actions tech giants only need look to Germany, where a 2017 social media hate speech law has introduced fines of up to €50M for platforms that fail to comply with valid takedown requests within 24 hours for simple cases, for an example of the kind of scary EU-wide law that could come rushing down the pipe at them if the Commission and EU states decide its necessary to legislate.
Though justice and consumer affairs commissioner, Vera Jourova, signaled in January that her preference on hate speech at least was to continue pursuing the voluntary approach — though she also said some Member State’s ministers are open to a new EU-level law should the voluntary approach fail.
In Germany the so-called NetzDG law has faced criticism for pushing platforms towards risk aversion-based censorship of online content. And the Commission is clearly keen to avoid such charges being leveled at its proposals, stressing that if regulation were to be deemed necessary “such [regulatory] actions should in any case strictly respect freedom of expression”.
Commenting on the Code of Practice proposals, a Facebook spokesperson told us: “People want accurate information on Facebook – and that’s what we want too. We have invested in heavily in fighting false news on Facebook by disrupting the economic incentives for the spread of false news, building new products and working with third-party fact checkers.”
A Twitter spokesman declined to comment on the Commission’s proposals but flagged contributions he said the company is already making to support media literacy — including an event last week at its EMEA HQ.
At the time of writing Google had not responded to a request for comment.
Last month the Commission did further tighten the screw on platforms over terrorist content specifically — saying it wants them to get this taken down within an hour of a report as a general rule. Though it still hasn’t taken the step to cement that hour ‘rule’ into legislation, also preferring to see how much action it can voluntarily squeeze out of platforms via a self-regulation route.
Germany’s VPE Wertpapierhandelsbank AG (VPE) has announced its institutional investor cryptocurrency trading services and claims them to be the first of their kind for the country. Armed with a Bundesanstalt für Finanzdienstleistungsaufsicht (Bafin) license, in expanding its brokerage offerings VPE purports to offer “best-in-class technology” to customers, “secure and regulated.”
VPE Launches Germany’s First Institutional Investor Cryptocurrency Trading Services
VPE Wertpapierhandelsbank AG spokesperson Katharina Strenski stressed, “Until now, institutional investors have faced high entry barriers to crypto trading. Our cryptocurrency trading services offer a much more convenient alternative.”
The world over, institutional investors, or whales, usually control vast sums of capital. They’ve been looking for ways to leverage cryptocurrency markets, but often run up against their own lobbying efforts in wielding government regulatory power to insulate themselves from competition. The consequences thus far include uneven access to a red hot and emerging asset class, arguably the future of finance in one form or another, cryptocurrency.
“Cryptocurrencies such as Bitcoin, Litecoin, Ethereum and others have become a promising asset class in recent years,” Ms. Strenski detailed. “To date, trading digital tokens has been restricted to crypto exchanges and online marketplaces. We are pleased to be the first German bank to offer our customers cryptocurrency trading services.”
VPE is a German centric exchange-based OTC trader. Financial corporations, private investors, and institutional investors (whales) get brokerage services, investment advice, and portfolio management. Under that umbrella, the bank offers clearing services, settlement of transactions in securities, contracts for difference, options, and futures.
Germany Is an Economic Powerhouse
Germany is an economic powerhouse, and so any entry its companies make into the crypto space will undoubtedly move the needle. It ranks as Europe’s economic engine and its largest economy, is a constant innovator, and is a giant exporter of goods. Routinely the country can boast Europe’s lowest employment rate, and its citizens average over $50K per capita.
All this could point to a boost for the digital asset sector as German institutional investors are among the most profitable companies in the world. For its part, as a “securities trading bank,” the bank’s press release continues, “VPE has an impressive trading track record and has access to the appropriate networks and technical requirements for processing individual transactions. VPE also meets all necessary KYC (Know your Customer) and AML (Anti-Money-Laundering) requirements.”
VPE also offers automated crypto trades, “developed in partnership with Solarisbank, the first banking platform with a full banking license, and with support from leading banking and legal crypto experts. VPE’s virtual currency trading account is held in escrow by Solarisbank. Customers will also receive access to an individual virtual currency wallet hosted by VPE. This will make trading fast and simple while ensuring the highest security standards,” the company insists.
Do you think German institutional investors will be a boost for crypto markets? Let us know in the comments section below.
Images courtesy of Shutterstock, VPE.
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We’re continuing to review the relationship between banks and cryptocurrencies - this time in Europe. #ANALYSIS
Can blockchain technology fix the soul sucking tedium and cost of back-and-forth bureaucracy? The Swiss team behind a blockchain-based platform, called Proxeus, believes it can — and that that will be just the tip of what decentralization brings down the pipe, once components such as crypto identities become an accepted (and legal) standard.
Blockchain’s big picture vision is embedded crypto identities opening up all sorts of additional opportunities — from a new wave of share trading and lending, to frictionless identity verification.
But right now the technology remains nascent, with some fundamental challenges — such as energy efficiency and scalability — yet to be overcome and thus standing in the way of blockchain’s much touted transformative potential.
That’s why the team behind Proxeus has taken what co-founder Antoine Verdon dubs a “very pragmatic, very Swiss” approach to blockchain — aiming to bridge the gap between the old (but real) world of linear workflow processes and the brave but still alternative reality where everything that can be decentralized has been.
So they’re focused on enabling blockchain to be used to optimize single processes and workflows — as a first step towards greater transformations.
“Blockchain is going to change the whole way we organize ourselves, the whole way we build software, the whole way that even democracy works — and the whole way societies are organized,” says Verdon, laying out his blockchain faith before tempering it with a little local pragmatism. “The impact will be quite deep and eventually really powerful but in the first step it’s just another digital technology bringing efficiency to businesses.”
The team’s aim for their platform is to become ‘the WordPress of blockchain’. The technology is open source, and the platform will be made freely available for anyone to use (people building Proxeus apps can monetize them via charging fees based on usage).
Back in February Proxeus raised $25M, via an ICO for their XES token, to community fund this vision.
“At its core Proxeus is a workflow builder and document generator,” says Verdon. “We have a framework which allows anyone to come and use building blocks to create workflows and at the end blockchain apps. But — just like WordPress is a website creation tool — we don’t intend to go down one level in terms of offering products ourselves and going directly into the market.
“We see ourselves and the Proxeus model as a toolbox and a tool provider.”
“We’re working on APIs on both sides,” he adds. “Both connecting Proxeus to different blockchains — we’re now connecting to Ethereum and Hyperledger — and on the input side, connecting Proxeus with a series of ERPs.”
He says another of of the goals is a connection for SAP systems.
The team has been developing the platform for 2.5 years, at this stage. They’re now beta-testing and running their first trials. And Verdon is hopeful the first live applications will be running on the platform by the end of the year, once they come out with a public product.
One interesting use-case for their blockchain technology — which they just last week publicly demoed in a prototype form under test conditions, as an entry in the digitalswitzerland challenge — is a company registration system using a digitized blockchain process to radically shrink how long the necessary administration takes.
The traditional route for registering a company in Switzerland takes an average of 10 days, according to Verdon. He says the process can take as long as six weeks. But the team’s proof-of-concept demo delivered a company registration in less than two hours — though it should be noted they had been working up to that for a year, and collaborating with IBM and Swisscom on the project.
What reducing the time it takes to register a company meant in practice was Proxeus creating a digitized workflow for the entire multi-step process — using blockchain to decentralize the steps (and thus help break down linear bottlenecks), combined with smart contracts to enclose and enforce rules around how to create a company (such as the need for a certain number of shareholders and shares), thereby enabling all involved parties to be on the same page.
“We started with a very traditional digitization project — we digitize the way documents are created and the user can create them, give his input in a much more efficient way,” explains Verdon. “But we add the blockchain piece on top of that to make the digitization process even more efficient than it otherwise would be. The main problem slowing down the registration process is there is a complex sequence of partners… The problem is before one party has finished their work the next one cannot start — that’s the thing that we solved with blockchain.”
Proxeus built a web interface for the prototype so that all the parties involved in making company registrations happen could log in; contribute their pieces of work; and “give their okay to the process” — all without needing to know how blockchain works.
“The entrepreneur registers their own company [but] the company registration is pending until the other parties come and say yes the money has been paid, yes the conditions are fulfilled… Seeing things like this as a a list of check boxes that need to be checked, instead of a sequence, it’s a much more efficient way to work.”
Another bit of Swiss pragmatism: Proxeus’ system enables even blockchain refuseniks to participate because it still allows for paper documents to be sent. (In that case other parties in the chain can digitize the document and check the necessary confirmation box to keep things moving along.) Though too many blockchain refuseniks/paper-pushers would clearly reintroduce some friction to the process.
For the proof-of-concept Proxeus also pared back the workflow to a most basic case. But it’s an interesting example, nonetheless. And one that Verdon believes illustrates the potential of what can be achieved once lots of organizations start to experiment with — and see potential in — decentralizing their processes.
“We have a quite pragmatic way for any company to start connecting the business workflows — maybe in the legal space but we also working with a large Swiss university to digitize their master degrees and use blockchain to verify them,” he tells TechCrunch.
“We are in discussion with a car manufacturer, with a commodity trader. We receive almost every day requests from many large companies interested to use Proxeus as a sort of sand box that will allow them to test how blockchain could transform their business value and the way they work.”
What is being replaced here? Some purely administrative job roles. “All those job roles that mainly consist of receiving information in one form — for example paper — and inputting it into another format, for example, digitally, they will gradually disappear,” predicts Verdon. Though that’s clearly not going to happen overnight. (But once blockchain infrastructure starts to be widely used change could happen suddenly.)
“We know there are really crazy blockchain ideas out there… but it will take several steps before we go into those new business models and ideas. I think what’s lacking — and I hope we’ll be bringing — is this bridge between the traditional world and the workflows up to this blockchain,” he adds.
While Proxeus has worked with partners on the company register example, to showcase how this bridging strategy can work — taking one process and digitizing it in a way that “doesn’t change anything”, and thereby allowing all players to jump into using blockchain — its hope is that it can develop this into an ecosystem of users who pick up the baton and start figuring out how blockchain can work for them.
“We see ourselves as enablers of businesses who want to use Proxeus technology,” says Verdon. “If everything goes well at some point there will be people and for-profit businesses coming and taking the Proxeus technology and charging clients for implementing that in a way that is compatible with company needs. Just like Accenture, for example, is implementing SAP solutions with other companies. We think that our role will be also developing a network of partners that understand Proxeus and can take it and apply it with industry clients.
“We keep the door open for doing part of this ourselves — but we see ourselves more as an enabler than as the ones that will be actually doing the business at the end.”
“It’s a decentralized model where we have our own cryptocurrency now with the ICO with the excess and the excess will be used to co-ordinate the different parts provided by the parties of the decentralized ecosystem, so that one party will be able to download Proxeus as a DApp [decentralized app] and make it run on their own server. If they want to create a workflow then they can do it. If they want to — for example, if another country now wants to create a company register and sees our system as a good model then you could buy the workflow created by the other company or country, in that case,” he continues.
“Then if you want to store your documents created on a server which is not yours then other production could be taken by the party in the ecosystem and all those relationships between the IP creators, the storage partners, the DApp holders, using services of others, will be connected through Proxeus in a visible way… and there are ways to allow them also to pay with Euros or Swiss franks, or whatever they want. But the underlying mechanisms will be reviewed by access and there it’s going to be up to the parties to decide whether they want to provide their services for a fee, and if for a fee then they will have to pay it with excess.”
In the case of the Swiss company registry project, Verdon says the hope now is it will be taken forward into an actual deployment. The team is in discussions with the Swiss state which he describes as the “natural” lead partner for that particular use-case.
A first productive version could come as early as this year, he adds. Though he also notes it would be just a beginning — whoever gets involved would need to build on the MVP, adding “more and more complex cases”.
Because of course “there are many exceptions” involved in company registrations. And that’s where the soul-suckiness of bureaucracy starts to creep back in.
But Proxeus’ wider blockchain faith is that by decentralizing business processes it can at very least allow information to flow more freely — unlocking efficiency gains.
“Using blockchain is a very efficient way to make people collaborate better,” argues Verdon. “I think through [the platform] we have a quite pragmatic way for any company to start connecting the business workflows.”
Proxeus’ platform enables users to get their hands dirty playing around with decentralized app building too — which he touts as “much cheaper and faster” than traditional app development, as well.
“If we had built the company register application with a traditional process it would have been a very complex IT project,” he continues. “There are several parties… you would need to create one platform where they all come, and they all receive different permissions — it would be super complex.
“In our case everyone has their own small workflow, their own small decentralized app that we can build individually — and that are connected through a blockchain layer bringing all of them together, so I think it’s a much more efficient way to program applications.”
Beyond those near-term, and fairly tangible benefits, Verdon says businesses taking the blockchain leap of faith now — and playing around with what the tech can do for them, via the building blocks Proxeus is offering — are also positioning themselves to be ready for the more transformative “crazy” models coming down the pipe — i.e. as a consequence of mass adoption of decentralization (if/when it comes).
“Just like you have a verified account at Facebook or Twitter for personalities I think at some point you will have, on LinkedIn, the possibility to connect your crypto identities so you can have this small check next to your degrees — that you have verified degrees publicly,” he suggests, giving an example of how blockchain could create a major trust-based shift within existing digital ecosystems.
He won’t be drawn into making any specific predictions for how long it will take for blockchain to scale up to be able to deliver major scale process change. But he is convinced the core tech has the potential to drive some truly seismic shifts — including at a societal level.
“It’s still extremely new,” he argues, pointing to the blockchain ecosystem generally. “I think it’s going to take a few years still until, on the one hand, the protocols develop to a level where they can use less energy, be more efficient, and on the other hand where simply businesses have understood what blockchain will bring, how a decentralized business can be run, how blockchain can allow them to develop new services, new business on top of what they have.
“Just like with the Internet revolution… it took quite some time for businesses to really grasp the impact of that. And for clear models to develop how the different industries could use those technologies — so I think it’s going to be the same here. I expect you’re going to see first movers publishing some small-scale live applications this year but for really large services provided using blockchain we probably need to wait another couple of years.
“The longer term vision, the longer term impact may or may not happen at that scale — it has the potential to transform the whole way society works — but it still has to be proven.”
Verdon’s bio on Proxeus’ team page says he’s been involved in the crypto/blockchain space since 2012, including as an investor. He tells us he was an early investor in the YC- and Google Ventures-backed Buttercoin exchange, for instance — too early as it turned out, as the startup went bankrupt three years ago. So even though the core idea was solid — as the subsequent success of other Bitcoin exchanges, such as Coinbase, underlines — timing is key to any investment.
He claims better success investing in crypto currencies. Is he hodling his Bitcoins — despite recent downturns? “Yes, you must,” he replies, though he also cautions he “tries to diversify everything in crypto”.
“If you work in crypto you also have to believe that it’s going further,” he continues. “And sometimes you have a small heart attack but at the end the trend is very positive — if you compare the prices between January 2016, January 2017, January 2018 there is a very clear and a very high upward trend.”
It’s that same unshakeable conviction that Proxeus’ platform is founded on — and the faith that many more believers will come.
Commodity trading is a very old industry which focuses on raw materials, like lead or copper, that are worth hundreds of billions. These materials are constantly moving from producers to consumers in a global market worth about $80bn, but it often lacks efficiency and transparency. Meanwhile, intermediaries make a lot of money just by acting as the middlemen. That’s where blockchain could, in theory, be applied, but introducing great transparency.
Open Mineral, a physical commodities trading platform, has now closed an investment round ($2.25 million) to do just that.
The idea is to increase the efficiency of the market for base and precious metal raw materials using blockchain. Its digital platform, Open Mineral Exchange, will bring together sellers and buyers, mining and metals companies, allowing them to transact directly and securely, without intermediaries. It will also digitize and streamline the complicated and paper-heavy process.
These newer trading platforms for physical commodities have been appearing in the last couple of years. Tradecloud, for example, addresses the refined metal market, while Metalshub focuses on ferroalloys. None of the current platforms use blockchain.
The Open Mineral model will rely on a success-based fee which will depend on the value/chemical composition of the material and the volume transacted. The platform currently focuses on zinc, lead, copper, gold and silver concentrate markets, but could expand into other concentrates in the future.
Open Mineral became the first startup to join Thomson Reuters Incubator based in Zug, which is famously spinning out blockchain startups. Investors include Goldcorp, Canadian gold mining company, and Xploration Capital.
The company is founded by Boris Eykher and Ilya Chernilovskiy. Before co-founding Open Mineral, Eykher and Chernilovskiy both worked at Glencore, the largest commodity trading house in the world. The company is headquartered in Baar, Switzerland with operations in Beijing, Lima, and Moscow.
The volume of P2P bitcoin trade in Canadian dollars has increased significantly since leading banks in the country imposed bans on crypto-related transactions. Toronto-Dominion Bank, the Royal Bank of Canada, and more recently the Bank of Montreal have limited or prohibited the use of their services and products to acquire cryptocurrencies. As a result, the weekly CAD trade on Localbitcoins has passed C$8 million at the end of March.
Circumventing the Ban
Trying to bypass various bans introduced by major banks, Canadians are switching to peer-to-peer cryptocurrency trade. The volume of bitcoin trading in Canadian dollars on Localbitcoins, a leading global P2P platform, has increased six times in the last three weeks, Decentral Post reported. The latest data from Coin Dance shows a record high at the end of last month. More than C$8 million worth of bitcoins has been exchanged in the week of March 31, 2018.
Several Canadian banks have imposed restrictions on cryptocurrency transactions over the past months. In March, the country’s biggest bank, Toronto-Dominion Bank, banned its customers from purchasing cryptos like bitcoin. Canada’s second largest bank, the Royal Bank of Canada, announced it would allow crypto-related transactions only in limited circumstances. More recently, the Bank of Montreal prohibited the holders of its credit and debit cards to acquire crypto assets.
The Bank of Montreal, or BMO Financial Group, was expected to provide banking services to a project aimed at launching a new cryptocurrency brokerage in Canada. Last month, the operator of the Toronto Stock Exchange, TMX Group, revealed plans to offer its customers the opportunity to buy and sell bitcoin and ethereum through a subsidiary. TMX has announced a partnership with the fintech startup Paycase Financial Corp. to set up the brokerage platform. The group also said it was cooperating with BMO.
Clamping Down on Bitcoin Trade
The change of banking policies in Canada comes amid a global clampdown on crypto trade by leading card issuers. In the US, Bank of America, JP Morgan Chase and Citigroup refuse to accept credit card transactions from cryptocurrency exchanges. Major British banks, including the UK’s largest retail bank, Lloyds Bank, the Bank of Scotland, Halifax, and MBNA, have also banned credit card holders from buying cryptocurrencies.
India’s major commercial banks – ICICI Bank, Citibank, HDFC Bank, Kotak Mahindra Bank, and the State Bank of India – have suspended crypto-trading accounts. The volume of bitcoin trade on local exchanges has dropped as much as 90% in two months. Last week, the Reserve Bank of India ordered all Indian banks to suspend services to businesses working with cryptocurrency. Shortly after, the State Bank of Pakistan told commercial banks and payment providers to refrain from dealings with digital coins and tokens.
P2P platforms are offering traders around the world the opportunity to exchange cryptocurrencies and circumvent restrictions. Coin Dance’s charts show a rising trend in Localbitcoins’ global trade volumes, as well. Buyers and sellers have exchanged BTC worth almost $76.5 million USD in the week ending on March 31. The euro trade has also jumped to more than €11.4 million during the same period, proving a growing interest in peer-to-peer exchange. New P2P platforms on the Old Continent are bringing together more crypto buyers and sellers.
Are you using services offered by a peer-to-peer exchange? Tell us in the comments section below.
Images courtesy of Shutterstock, Coin Dance.
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