Coinhive Mints Quarter Million Dollars in Monero a Month, Report Reveals

Coinhive Mints Quarter Million Dollars in Monero a Month, Report Reveals

Тhe profitability of cryptocurrency mining is decreasing on the backdrop of this year’s persistently bearish markets but Coinhive seems to be doing pretty well. The browser-based miner has earned a quarter million dollars worth of monero in just one month, according to a new study conducted by German researchers.   

Also read: New Player to Offer Next Generation ASIC Chips This Year

One in Three Minted Coins Goes to Coinhive Developers

Coinhive, the Javascript-based miner that takes away some of your CPU power to mine cryptos while you are browsing the web, remains very active. That’s one of the key findings in a report produced by academics from the Rheinisch-Westfälische Technische Hochschule Aachen, or the RWTH Aachen University in Germany. The software mints monero, a leading privacy coin whose struggle to remain ASIC-resistant has resulted in several forks this year.

Coinhive Mints Quarter Million Dollars in Monero a Month, Report RevealsAccording to the study, the miner has generated 1,271 XMR, or approximately $250,000 worth of monero, during the observation period of four weeks this spring. At the current, lower prices of around $88 USD per coin, the amount is still substantial – over $110,000 USD.

Coinhive is also estimated to mine 1.18 percent of all monero blocks with a median hash rate of 5.5M h/s. Its developers receive 30 percent of every minted coin and the authors of the research claim that most of the commission is sent to a small group of people.

Released in 2017, Coinhive was created to facilitate websites offering visitors ad-free experience in return for using their hardware to mine cryptocurrencies like monero. The absence of advertisements, however, comes with slower browsing speeds as the miner works in the background. Other factors, such as shortened battery life of mobile devices, rising energy bills, and the plummeting prices of the mined cryptocurrencies should also be taken into account when assessing how viable in-browser mining is as an alternative to ad-based financing.

Besides, these are not the only negatives – hackers have long learned how to take advantage of the mining code. They often break into websites, including the official web pages of government institutions, to install Coinhive and configure it to send the mined coins to their own wallets. Browser extensions have also been targeted and according to a recent report, routers too.

Despite Ineffective Blocking, Prevalence Remains Low

Analyzing the browser-based mining as a new revenue generating model to monetize websites without ads, the researchers from the largest German technical university have inspected for mining code the Alexa Top 1M and .com/.net/.org domains. They were able to confirm the utilization of browser-mining software but the prevalence remains low at less than 0.08 percent of the sites.

Coinhive Mints Quarter Million Dollars in Monero a Month, Report Reveals
No Coin detected miners on the Alexa Top 1 M and the .com/.net/.org domains.

Unsatisfied with the results from the No Coin filter, an extension available on Google Chrome, Mozilla Firefox, and the Opera browser, the scientists used an alternative technique based on Webassembly fingerprinting to identify miners and found that up to 82 percent of the mining websites were not detected by popular block lists.

The authors of the study concluded that Coinhive is the largest web-based mining provider used by 75 percent of the sites mining cryptocurrency. Inspecting the Coinhives’ link-forwarding service, they also found that “10 heavy users contribute over 80% of all short links mostly targeting streaming and filesharing services.”

What do you think about in-browser crypto mining as an alternative to ad-based monetization of websites? Share your opinions on the subject in the comments section below.


Images courtesy of Shutterstock, RWTH Aachen University.


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PR: NEM and Unibright Are Announcing a Strategic Partnership

NEM and Unibright Are Announcing a Strategic Partnership

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

NEM (“out-of-the-box”, enterprise-grade blockchain platform”) and Unibright (“blockchain agnostic integration framework”) are teaming up and start an official strategic partnership.

NEM and Unibright start a strategic partnership by adding NEM oriented code generation to the Unibright framework and adding Unibright to the NEMsp Program. Through this relationship, Unibright developers will receive blockchain training and certification through the Global NEMsp Network. The NEMsp (NEM Service Partner) Network provides qualified partners like Unibright with the technical skills and business benefits to integrate clients on the NEM Blockchain and scale regardless of industry, specialization or experience.

The partnership consists of:

– adding NEM as a target of Unibrights automatic blockchain code generation,
– adding NEM adapters to Unibright’s integration platform to connect NEM architectures to existing IT landscapes,
– qualifying Unibright as an official NEM Service Partner by training and certification through the Global NEMsp Network,
– working together on common customer projects, case studies and proof of concepts with industry partners and clients.

Kristof Van de Rek, Interim President of NEM.io states:

“The NEMsp Network is a scalable and repeatable program designed to expedite the adoption of NEM globally while creating value for our partners. Companies won’t need to have any internal technical staff to be able to build on the NEM Blockchain because a project can be completely developed and deployed by a NEMsp. Unibright puts that development on an even higher level by generating code automatically, and thus are a perfect fit to the NEMsp network. We look forward to a long and mutually beneficial relationship with Unibright.”

Marten Jung, founder and CEO of Unibright adds:

“We are convinced that enterprise clients will rely on those blockchain platforms that offer them the most robust base, the best scalability and the fastest “pilot-to-solution” outlook. NEM delivers on that in a very convincing and elegant manner. NEM is a perfect match to our framework, and we are very looking forward to filling this partnership with life.”

Unibright completed the initial training provided by NEM Solutions Architect, Joris Huybrechts, at Unibright’s main office in Bingen, Germany. Certification will follow after Unibright’ test project has been checked by a NEM Solutions Architect as a working solution.

NEM is an “out-of-the-box”, enterprise-grade blockchain platform which launched in March 2015. NEM has industry leading blockchain features which include: multi-signature account contracts, customizable assets, a naming system, encrypted messaging, and an Eigentrust++ reputation system. Companies with legacy systems can “plug ‘n play” with NEM.

Unibright offers a unified framework, bringing blockchain technology and smart contracts to mainstream usage. With its “no-coding-needed” approach, smart contracts get generated, deployed and updated automatically into different blockchains. Unibright works with visual, usecase-related templates and also automatically integrates existing IT systems into the blockchain.

Press Contact Email Address
team@unibright.io

Supporting Link
https://unibright.io/

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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Boerse Stuttgart to Host Crypto Trading and Coin Offerings

Boerse Stuttgart to Host Crypto Trading and Coin Offerings

Boerse Stuttgart is going deeper into crypto. The German stock exchange is planning to set up a new trading venue that would allow the exchange of tokens from the ICOs it wants to host, as well as established cryptocurrencies. Custody services will also be offered to crypto investors.

 Also read: Coinbase Introduces GBP Pairs, Hitbtc Adds EURS, Bitpanda Offers EOS

Trading Venue, ICO Platform and Crypto Custody

Germany’s second largest stock exchange, Boerse Stuttgart, is expanding its crypto-related investments. It has announced intentions to create a “multilateral regulated trading venue” for cryptocurrencies with safe storage services for digital assets. The Boerse also intends to develop a new platform for conducting Initial Coin Offerings (ICOs).

Boerse Stuttgart to Host Crypto Trading and Coin OfferingsThe news about these plans comes after earlier this year the exchange said it was developing a new cryptocurrency trading app called Bison which is expected to offer fee-free access to crypto investment. According to previous reports, the German version of the software is scheduled to be released this fall and will be followed by an English version shortly after. The app will initially support pairs with BTC, ETH, LTC, and XRP.

Boerse Stuttgart now wants to extend its crypto-related activities to the primary and secondary markets, Finextra reported. That involves the creation of the ICO platform which will allow the issuance of digital tokens used for either corporate financing or to represent rights and assets.

All Under One Roof

The exchange is also preparing to establish the regulated trading venue where the coins of the hosted ICOs will be traded in parallel with leading decentralized cryptos such as bitcoin core (BTC) and ethereum (ETH). Custody services will be provided to participating traders and investors. Speaking about these important developments, the Chief Executive Officer of Boerse Stuttgart, Alexander Höptner, said:

At the trading venue tokens issued via our ICO platform can be traded on the secondary market. This is an important success factor for ICOs. At the same time, we are responding to demand from both retail and institutional investors for a regulated and reliable environment for trading cryptocurrencies.

According to further comments by Mr. Höptner, all this will allow the exchange to offer “central services along the value chain for digital assets, all under one roof.” The announcement of the new projects follows last year’s establishment of a “Digital Ventures” unit and the subsequent acquisition of local data analytics startup Sowa Labs. The subsidiary is currently developing the Bison crypto trading app claimed to be the first that has the support of a major traditional stock exchange.

Boerse Stuttgart to Host Crypto Trading and Coin OfferingsBoerse Stuttgart is the second largest stock exchange in Germany, after Frankfurter Wertpapierbörse, and the ninth largest in Europe. So far, Germany has treated carefully cryptocurrencies and the related industry. In the Bundesrepublik, cryptos are not subject to VAT when exchanged with fiat, and profits from long-term crypto investments are exempt from capital gains tax.

Do you think other traditional financial institutions in Germany will follow Boerse Stuttgart’s example and expand operations in the crypto space? Share your expectations in the comments section below.


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Powerful Cryptocurrency Firms on the Road Towards Becoming Banks

Powerful Cryptocurrency Firms on the Road Towards Becoming Banks

When bitcoin came out, supporters believed that the decentralized cryptocurrency would decimate the banking industry. Years later, as digital currencies became more mainstream, these networks were suddenly commanding billion dollar valuations. Meanwhile, cryptocurrency exchanges, brokerage services, and over-the-counter market makers have started to look into purchasing shares of banks and even becoming the banks themselves.

Also read: Blackrock Probes Market, Coinbase to List Securities, Bitpay Gets a Bitlicense  

If You Can’t Beat Them, Join Them

A lot has changed since the Bitcoin network was launched back in 2009 when the cryptocurrency was a tiny little network with just a few users. Now there are over 1600+ digital assets and the entire cryptocurrency market capitalization of all of them combined is valued at $294Bn USD. Back in the early days, incumbent financial institutions scoffed at cryptocurrencies but now it’s pretty hard for them to ignore the massive economy growing around them.

These days some of the exchanges and market makers are becoming incredibly large and dealing with very large quantities of money. Moreover, a few businesses and cryptocurrency exchanges look like they are adopting a different kind of attitude — ‘If you can’t beat them, join them,’ by either attempting to become banks or purchasing shares of these financial institutions.

The San Francisco Unicorn Coinbase Looks Into a Federal Banking Charter

Powerful Cryptocurrency Firms on the Road Towards Becoming BanksFor instance, the unicorn cryptocurrency exchange Coinbase has been a digital asset heavyweight since the early days and the firm continues to make more money while expanding its services. There are those that believe Coinbase will someday become a fairly large sized ‘bitcoin bank’ with its 20Mn users that have traded $150Bn USD worth of digital assets since the company’s inception. Back in May, the public found out that the San Francisco exchange was recently exploring a federal banking charter, other banking licenses, and had been meeting with U.S. regulators.

Reports had detailed that Coinbase had been visiting officials at the U.S. Office of the Comptroller of the Currency (OCC) in early 2018. The largest U.S. exchange by volume didn’t comment on the firm’s meeting with the OCC but made a general statement about dealing closely with government officials so they are sure they have the proper licenses. A federal banking charter would allow Coinbase to offer a plethora of banking features.

Binance to Launch a ‘Decentralized Community Owned Bank’

Powerful Cryptocurrency Firms on the Road Towards Becoming BanksAnother extremely large international cryptocurrency trading platform, Binance, has become one of the largest exchanges in the world and just recently the firm purchased a 5 percent stake in a financial institution called Founders Bank. Binance says the bank based in Malta will utilize cryptocurrency tokens and distributed ledger technology. The Office of the Prime Minister of Malta’s junior minister for financial services, digital economy, and innovation, Silvio Schembri, stated during the bank announcement, “We are honored to be chosen as the location of the first global community-owned bank.”

Binance and the Founders Bank are attempting to get a license in the EU so they can operate under the correct regulatory statutes. The firm explains that token investors will have ownership over the bank and Changpeng Zhao, Binance’s CEO, believes Malta could wind up being a hotspot for this type of financial technology.

Malta is the fusion ground for traditional and blockchain finance now.  A lot can happen in 3 short months,” Zhao explained to his Twitter followers.

Powerful Cryptocurrency Firms on the Road Towards Becoming Banks

Litecoin Foundation Acquires 10 Percent Stake in German Bank

A few days before the Binance announcement, the Litecoin Foundation revealed the organization and the firm Tokenpay had purchased 9.9 percent stake in WEG Bank AG. The goal is similar to the Binance – Founders Bank roadmap, as the German WEG Bank AG, the Litecoin Foundation, and Tokenpay will offer blockchain and cryptocurrency solutions to customers. The creator of the cryptocurrency litecoin (LTC) and the managing director of the Litecoin Foundation, Charlie Lee, explains LTC will be utilized in the deal. “I’m looking forward to integrating Litecoin with the WEG Bank AG and all the various services it has to offer, to make it simple for anyone to buy and use Litecoin,” Lee stated on July 10.

Lee divulges further on July 17, on the Reddit forum r/litecoin:

People have brought up valid concerns that we still need to work with and be approved by players in the current financial systems like Visa and SWIFT, but we definitely have a much higher chance of succeeding now that we own a stake in a bank with bank licenses.

Is the Age of Cryptocurrency Banks Coming?  

There are many other firms who are growing exponentially in size due to the popularity of cryptocurrencies these days and many of these companies move a lot of money. The cryptocurrency firm Xapo is a good example as the company claims to store roughly $10Bn USD worth of digital assets across five different continents. Another unicorn cryptocurrency firm, Circle Internet Financial Ltd., also wants a federal charter so it can provide more types of banking services. The Boston-based firm is also working with the U.S. Securities and Exchange Commission (SEC) in order to sell tokens. With all the bank purchasing and federal charter attempts, the question remains — Will these cryptocurrency banks decimate the current financial incumbents or become them?

What do you think about these businesses exploring becoming banks or purchasing a stake in these financial institutions? Let us know what you think about this subject matter in the comment section below.


Images via Shutterstock, Coinbase, Binance, Litecoin, and Pixabay.


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Binance, Crypto Investors to Launch a Bank in Malta

Binance, Crypto Investors to Launch a Bank in Malta

Crypto exchange Binance is working on a project to launch a decentralized bank bridging the crypto industry with conventional banking. The financial institution will be based in Malta and fundraising will be conducted under German law. Authorities in Valletta have welcomed the initiative that is expected to win support from other crypto investors as well.

Also read: Mainstream Media Claims Bitcoin Burns More Energy Than Ireland – Does It?

Decentralized, Community-Owned Bank

Binance, the world’s largest cryptocurrency exchange by trade volume, is exploring opportunities to launch a bank. The project, expecting support from other crypto investors, is centered on the idea to create a decentralized, community-owned financial institution, according to the trading platform.

The future Founders Bank will be based in Malta, the island nation that has established itself as a crypto-friendly destination. Binance told Bloomberg it has taken a 5 percent stake at a 133 million-euro ($155 million) pre-money valuation, alongside other anchor investors.

Binance, Crypto Investors to Launch a Bank in MaltaIn essence, the new bank represents an effort to bridge the crypto industry with conventional banking. To do that, Binance and its partners need to obtain the necessary permits in Malta, where authorities have already welcomed the initiative. Moreover, the bank’s board will include the government’s blockchain advisor Abdalla Kablan, Malta Daily reported. According to the outlet, the board will be chaired by entrepreneur Michael Bianchi.

“We are honored to be chosen as the location of the first global community-owned bank,” said Silvio Schembri, junior minister for financial services, digital economy and innovation within the Office of the Prime Minister of Malta. He was quoted in a statement released by Binance on Thursday. To operate in the EU, the bank will have to acquire a license from Maltese regulators and an approval from the European Central Bank.

Founders Bank will conduct its offering through the blockchain-based equity fundraising platform Neufund and will issue its own legally-binding equity tokens. The token sale will be conducted under German regulations in collaboration with one of Europe’s major stock exchanges later this year, Binance said, without identifying the exchange.

Part of a Wider Expansion

The news about the project comes after the Binance CEO, Changpeng Zhao, revealed that the trading platform expects to accumulate a net profit of between $500 million and $1 billion USD this year. The exchange that was launched last year currently reports an average daily turnover of $1.5 billion and has about 10 million users.

As a result of increasing regulatory pressures in Japan and Hong Kong, Binance decided to relocate to Malta, where it intends to set up a fiat-crypto exchange with support for fiat deposits and withdrawals as well as EUR and GBP trading pairs. The exchange is not the only crypto company moving from Asia to the island. Okex, another Chinese exchange, announced in April it is setting foot in the country, and in May, the Polish Bitbay revealed its plans to move to Malta.

Binance, Crypto Investors to Launch a Bank in MaltaThe small island nation, member of the European Union, is competing with destinations like Gibraltar and Switzerland for the attention of crypto businesses from around the world. Recently, the parliament in Valletta adopted new laws designed to introduce clear regulations for the country’s growing crypto industry.

The expansion of Binance includes other markets, too. Earlier in July, the company announced it is launching a fiat-crypto trading platform in Uganda. The exchange also reached an agreement with the government of Bermuda, where it wants to set up a global compliance center.

Do you expect Binance to receive approval for the project to launch a bank in Malta? Let us know in the comments section below.


Images courtesy of Shutterstock.


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German Bank Offers Special Accounts to Cryptocurrency Firms

German Bank Offers Special Accounts to Cryptocurrency Firms

The Berlin-based Banking-as-a-Platform (BaaP) institution Solarisbank has recently announced the launch of their new banking service plan that’s focused on clients from the blockchain and digital currency industry. The newly featured resource called the ‘Blockchain Factory,’ will offer financial management services to companies whose business operations deal directly and indirectly with cryptocurrency solutions and blockchain technology.  

Also read: A Look at the Long and Annoying Process of Claiming Bitcoin Forks

This German Bank Plans to Provide Special Bank Accounts for Cryptocurrency and Blockchain Companies

German Bank Offers Special Accounts to Cryptocurrency FirmsOver the past few years as cryptocurrencies have gained in popularity a few companies like exchanges and brokerage services that deal with digital currencies have had issues with their banking providers. Banks and other financial management services have ceased their partnerships with cryptocurrency firms and have closed business accounts making it very difficult for blockchain companies to establish reliable banking partners. Now the German financial tech company, Solarisbank, plans to offer a service called the ‘Blockchain Factory.’ Companies who deal with cryptocurrencies will now have a solid banking colleague who understands the technology.

“The Blockchain Factory will be used by Solarisbank to offer banking services to companies whose business is directly or indirectly based on cryptocurrencies and blockchain technology — One example of these services is the ‘Blockchain Company Account’ for the banking business of blockchain companies,” Solarisbank explains.   

Furthermore, services for global cryptocurrency marketplaces will be made available to make it easier to buy and sell fiat currencies; such as the Solarisbank ‘Automated Trust Account’, an automated escrow account for cryptocurrency marketplaces.   

High Demand from the Blockchain World for a Licensed Banking Partner

Solarisbank has done well since the bank’s inception in March of 2016, and entered a strategic partnership with Mastercard the following October with plans to build new banking modules. Last March, Solarisbank raised $70Mn USD in a Series B funding round from firms such as ABN Amro, SBI Group, Visa, BBVA, and Lakestar.  

“There is high demand from the blockchain world for a licensed partner that forms the technological and regulatory bridge to traditional banking — as a technology company with a banking license, we are the natural partner,” Roland Folz, the CEO of Solarisbank details.

German Bank Offers Special Accounts to Cryptocurrency Firms

A Hybrid Future

The financial tech company has started its first partnership with another firm called VPE Bank and the two have plans to provide cryptocurrencies to institutional traders. Moreover, the firm will establish partnerships with cryptocurrency companies that deal with banking and debit cards within their business model.

“The fiat world is not about to dissolve. We are moving towards a hybrid future, in which the blockchain world still has to prove itself,” the CTO of Solarisbank, Peter Grosskopf explains.

However, we see the disruptive power of these business models and we want to help shape the future of this industry. 

What do you think about Solarisbank’s new Blockchain Factory banking services? Do you think companies who deal with cryptocurrencies need better banking providers? Let us know your thoughts on this subject in the comment section below.


Images via Shutterstock, and Solarisbank


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No License Needed to Mine Cryptocurrencies in Ukraine

No License Needed to Mine Cryptocurrencies in Ukraine

Companies mining cryptocurrencies are not required to obtain a license, the Ukrainian state agency responsible for licensing regimes said this week. The annual revenue generated by the Ukrainian crypto mining industry amounts to over $100 million, according to recently published data. The country remains attractive to miners while mining costs in many other corners of Europe are simply prohibitive, at the current price of bitcoin.

Also read: Crypto Markets, Weak Demand from Miners Hurt GPU Producers

No Plans to Introduce Licensing for Miners

Cryptocurrencies can be mined in Ukraine without a license, according to the State Service of Special Communication and Information Protection, the regulator that oversees activities requiring licensing. The agency is not planning to introduce such an obligation in the sector in the near future, it said in a response to an enquiry filed by the Better Regulation Delivery Office organization (BRDO).

No License Needed to Mine Cryptocurrencies in Ukraine

According to BRDO, however, not recognizing mining as an economic activity that needs licensing and as a service providing “cryptographic protection of information” is one of the main issues in the local crypto industry. “Market participants have been threatened with a tangible sanctions – fines and confiscation of equipment and cryptocurrency,” said Igor Samodhodsky, an expert at BRDO, quoted by Forklog.

Samodhodsky also noted that entrepreneurs and companies operating in the sector usually try to avoid official registration because of the uncertain legal status of cryptocurrencies and crypto transactions. “The unpredictability of the actions of their counterparties and authorities creates a number of obstacles to their activities,” the BRDO representative emphasized.

Ukrainian Miners Make $100 Million Annually

No License Needed to Mine Cryptocurrencies in UkraineCrypto mining is just one of the segments of the country’s crypto industry awaiting comprehensive regulation. Ukrainian authorities have so far failed to meet these expectations. Three draft laws have been filed in the Rada since October but deputies have not made any significant progress towards their adoption. These are the bill “On the Circulation of Cryptocurrency in Ukraine”, the law “On Stimulating the Market of Cryptocurrencies and Their Derivatives”, and a supplementary draft covering taxation of crypto incomes and profits. Moreover, the recently adopted Currency Law did not even mention cryptocurrencies.

In March, the Ukrainian government supported an initiative by the Economy Ministry to add mining to the national register of economic activities. Several ministries, agencies and the National Bank are engaged in the preparation of the necessary documents. No time frame was given for the completion of the procedure, which amounts to legalization. Last month, BRDO announced that Ukrainian crypto mining companies generate more than $100 million of revenue annually.

And while Ukraine is offering miners decent conditions, including low electricity rates going down to ~$0.04 per kWh depending on the category of users and no restrictive regulations, in some other European countries mining bitcoin is far from profitable. The situation for miners on the continent is further aggravated by the persistent bearish trend on crypto markets that brought the price of BTC below the psychological threshold of $6,000 per coin.

Prohibitive Expenses, Low Bitcoin Prices

Payment provider and crypto exchange Wordcore has recently conducted a study to determine the profitability of mining in different countries. According to their calculations, quoted by Forbes Kazakhstan, using Bitmain’s Antminer S9 at an energy consumption of 1.5 kWh earns about 0.0008 BTC in 24 hours. This means mining a single bitcoin requires approximately 45 MW of electricity. For example, mining 1 BTC in the Czech Republic, where electricity for industrial usage is priced at €0.06 per kWh (~$0.07), costs around €3,000 (~$3,500).

No License Needed to Mine Cryptocurrencies in Ukraine

Germany and Italy are among the European nations maintaining some of the highest electricity rates for businesses on the continent – around €0.15 (~$0.17) per kWh. According to the report, mining one bitcoin there costs between €6,835 and €6,646 respectively (~$7,964 and $7,746), which is much more than what the cryptocurrency currently costs. Besides, these are only production costs, not including investments in equipment, its delivery and installation, the maintenance costs and other expenses like rent and so on.

Mining in some countries becomes prohibitively expensive and experts advise investors to start with searching for a destination which offers competitive electricity rates, in the first place. Among these regions are the Russian oblasts of Tyumen and Murmansk, the states of Washington and Louisiana in the US, and the Canadian province of Quebec.

Do you think cryptocurrency mining needs a licensing regime? Share your thoughts on the subject in the comments section below.   


Images courtesy of Shutterstock.


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Regulation Round-Up: Shapeshift COO Says U.S. Regulations Worsen, Germany to Protect Financial Stability not Individual Investors

Regulation Round-Up: Shapeshift COO Says U.S. Regulations Worsen, Germany to Protect Financial Stability not Individual Investors

In recent regulatory news, the Shapeshift co-founder and chief operating officer, has given a damning appraisal of the current regulatory climate surrounding cryptocurrencies in the United States. The president of Germany’s Federal Financial Supervisory Authority, Felix Hufeld, has indicated that the principal concern of German regulators regarding cryptocurrency will be seeking to ensure financial stability, rather than concerns pertaining to individual investors. The U.K’s Financial Conduct Authority has published an open letter to the CEO’s of businesses offering “services related to cryptoassets” regarding financial crime risks associated with virtual currencies.

Also Read: EOS Has Issues

Shapeshift Co-Founder Says U.S. Cryptocurrency Regulations are Worsening

Regulation Round-Up: Shapeshift COO Says U.S. Regulations Worsen, Germany to Protect Financial Stability not Individual InvestorsFollowing the passing of Bill 5031 in Washington and New York, which demands that cryptocurrency exchanges provide regulators with customer information and trading data, Shapeshift has emerged as one of the most vocal critics of the new, and the current direction in which U.S. cryptocurrency regulations are heading.

In a recent interview, Jon, Shapeshift’s co-founder and COO, stated “I would say in the US it’s actually gotten worse […] especially in the last 6 months. I think the explosion of value in 2017 brought a lot of these regulators into the space and made them more concerned. Most of them don’t understand what the heck it (cryptocurrency) is, but they want to control it.” Jon also accused regulators of failing to “give clarity,” stating “all these companies and lawyers and lobbyists are left to read the regulatory tea-leaves […] Nobody knows what the rules are and everyone’s just left to figure it out, that’s a dangerous place to be.”

Jon described decentralized exchanges as comprising a form of resistance to the current regulatory climate on the part of the cryptocurrency community. Of decentralized exchanges, the Shapeshift COO stated, “I think it’s a lesson to the smart regulators in the space that if they don’t work with companies, they’ll push things that way, and it’ll become harder and harder for them to have an impact in the space. The more regulators push hard, the more things become unregulatable.”

Jon concluded by advocating a collective approach among companies in the cryptocurrency sector to push for a more amenable regulatory apparatus, stating that he hopes “more and more of the crypto companies do band together to help educate the regulators in the space and try to work together to do something productive.”

German Crypto Regulations Will Strive for Financial Stability, Not Protection of Individual Investors

Felix Hufeld, the President of Germany’s Federal Financial Supervisory (BaFin), recently delivered a speech addressing cryptocurrencies, in which he emphasized the regulator’s primary intention as being preserving financial stability, rather than issues concerning individual investors.

According to a rough translation, Mr. Hufield stated “We will not be able to protect every single investor from his fate, and that can not be the task of state supervision. Once again, the maxim is that we must act on a prudent or regulatory basis if financial stability as a whole is threatened.”

Overall, Mr. Hufield spoke favorably of cryptocurrency and distributed ledger technology, stating that he “consider[s] the applications that start where there is a lack of effective control mechanisms or trustworthy institutions to be promising. Among other things in foreign trade or development aid, Blockchain’s promise of confidence and efficiency in cryptography and immutability may prove beneficial.”

U.K. FCA Publishes Open Letter to CEOs of Businesses Offering “Services Related to Cryptoassets

Regulation Round-Up: Shapeshift COO Says U.S. Regulations Worsen, Germany to Protect Financial Stability not Individual InvestorsThe United Kingdom Financial Conduct Authority has published an open letter to the CEOs of businesses that offer services pertaining to virtual currencies seeking to warn of the financial crime risks associated with cryptocurrencies.

The letter asserts that whilst “There are many non-criminal motives for using cryptoassets [..] this class of product can also be abused because it offers potential anonymity and the ability to move money between countries,” advocating that businesses “take reasonable and proportionate measures to lessen the risk of [firms] facilitating financial crimes which are enabled by cryptoassets.” Said measures include “developing staff knowledge and expertise on cryptoassets,” and “ensuring that existing financial crime frameworks adequately reflect the crypto-related activities which the firm is involved in.”

Mohammed Adil Siddiqui, compliance professional & founder of The CFD Trading & Compliance Forum, commented on the letter, stating, “The FCA’s recent notice to banks and financial institutions servicing the cryptocurrency sector comes as no surprise, it’s typical of the regulator‘s approach when things are getting from bad-to-worse. Despite the global regulatory framework around virtual currencies gaining prominence, there are fundamental weaknesses that the watchdog finds uneasy, namely ‘source of funds’. With cryptos, the possibilities to circulate funds from lands few and far between is as easy buying milk, and banks, exchanges and the wider market must act swiftly. The CFD Trading & Compliance Forum welcomes the guidance note and expects regulators to take more stringent & drastic actions by way of legislation to ensure that preventative measures are applied pre-the-use of these innovative financial instruments. And banks, that have questionable or suspicious transactions should carry out the appropriate checks as earliest as possible to maintain confidence and reduce the possibility of financial crime and inefficient activities distorting the marketplace.”

Do you agree with Shapeshift’s appraisals of the current regulatory climate in United States? Join the discussion in the comments section below!


Images courtesy of Shutterstock, Shapeshift


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