SA Purple Group Confirms Adding Cryptos to Its Online Trading Platform

SA Purple Group Confirms Adding Cryptos to Its Online Trading Platform

South African financial company Purple Group has confirmed the addition of two cryptocurrencies, bitcoin and ethereum, to its online trading platform. According to a representative, the decision came in response to strong demand from clients earlier this year. The move has expanded the trading options for South Africans, many of whom, according to a recent study, still believe a lot of money can be made from crypto investments.

Also read: Switzerland’s Main Stock Exchange Dives Deep Into Crypto

GT247.com Trades Bitcoin and Ethereum

Purple Group, a South African financial services provider listed on the JSE, has added cryptocurrencies to its online trading platform, GT247.com, allowing its users to buy bitcoin (BTC) and ethereum (ETH), local media reported. The decision came in response to strong demand from its customers. Barry Dumas, trading specialist at the group, emphasized that GT247.com allows clients to trade directly in South African rand. “Your rands aren’t converted into dollars like some offerings out there, which can expose you to exchange risks,” he told Business Day.

Purple Group’s representative also noted that despite the decline in cryptocurrency trading volumes over the past months, the platform has seen serious interest mostly from retail clients since the launch of the service earlier this year. “We are seeing a lot more engagement from international institutions like banks and international exchanges looking to regulate cryptocurrencies, as I suspect they want it to be a legitimate asset class in the future,” he pondered.

SA Purple Group Confirms Adding Cryptos to Its Online Trading Platform

Taking into account the current state of crypto markets, Purple Group also allows its clients to short the large cap coins, which means investors can benefit from falling prices as well. Barry Dumas pointed out, however, that according to the trading data and the strong buying interest, most clients are expecting higher prices. “We are seeing a decent spread between the bulls and bears but the bitcoin bias in the market is still to be long,” the trading specialist said.

Dumas also commented on the current trends and confirmed indications that the market is starting to stabilize. “We still see some volatility but it’s not at the levels we saw last year,” he noted. In his opinion, the reasons for that have to do with traders becoming accustomed to the crypto market and the developments towards regulating the space.

More Crypto Trading Options Offered

South Africans can also buy cryptos on local crypto exchanges like Luno and Ice3x, as well as via the local desks of international brokerage houses such as Saxo Bank. Another South African investment management company, Sygnia Ltd., announced a couple of months ago its plans to launch a crypto exchange in Q3, 2018. First National Bank is also exploring what it calls “sustainable options” to facilitate crypto trades with a growing number of its customers asking about them.

A recently released report suggests that the interest and the willingness to invest in cryptocurrencies remain relatively high among South Africans. According to the 2018 “Savings and Investment Monitor” survey, conducted by the Pan-African investment bank Old Mutual, 38 percent of the country’s residents, those aware of cryptocurrencies like bitcoin, wish they had invested.

SA Purple Group Confirms Adding Cryptos to Its Online Trading Platform

A sizable majority, 71 percent, agreed that a lot of money can still be made from crypto investments. Only 43 percent of the respondents have negative attitude towards cryptocurrencies and liken them to pyramid schemes. Measuring the general awareness of cryptocurrency in South Africa, the survey shows that 19 percent have heard of bitcoin, 17 percent admit they “know a bit about it”, and 4 percent “know a lot” about the cryptocurrency.

The Republic of South Africa is the country with the highest number of crypto trading platforms on the continent. The popularity of cryptocurrencies has been growing steadily, and so have the efforts of authorities in Pretoria to come up with regulations. The South African Reserve Bank has recently set up a unit tasked to review its position on cryptocurrencies and a “self-regulatory” approach has been previously suggested by legal experts working in the sector. Speaking to reporters, a high-ranking official of the central bank said in May that SARB does not use the term ‘cryptocurrency’ but refers to cryptos as ‘cyber tokens’ because they don’t meet the requirements of money.

Do you expect South Africa to regulate the crypto space, including trading, in the near future? Tells us in the comments section below.


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Russia Now Has a Registry of Whitelisted Crypto Companies

Russia Now Has a Registry of Whitelisted Crypto Companies

The Russian Association of Cryptocurrencies and Blockchain has created a registry of whitelisted companies that offer crypto-related products or services. Meanwhile, the bill to regulate cryptocurrencies in Russia has been delayed.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Whitelist of Crypto Firms

Russia Now Has a Registry of Whitelisted Crypto CompaniesThe Russian Association of Cryptocurrencies and Blockchain (RACIB) has created a whitelist of crypto companies. The list includes firms in the field of crypto mining, investment, marketing, legal, training, and initial coin offerings (ICOs).

Russia Now Has a Registry of Whitelisted Crypto CompaniesFrom early this year, legal entities and individuals in Russia have lost more than 270 million rubles [~US$4.3 million] from crypto-related investments organized by scammers and incompetent companies, RACIB detailed. The association has already started tracking unfair ICO projects and it hopes the registry will allow industry participants to find trustworthy partners in the space. RACIB elaborated:

The list of trusted companies will allow Russian and foreign market participants to base their work on trusted organizations and minimize the risk of fraud in the creation and development of Russian or foreign business in the field of mining, trading with cryptocurrency, blockchain technology and ICO.

Launched with 50 Companies

The association explained that the registry “consists exclusively of organizations that have undergone voluntary verification of reliability.” The criteria include “financial sustainability, experience and business reputation, lack of judicial judgments, availability of licenses and certificates (if necessary), [and] no arrears of taxes and fees.”

Citing that about 30 applicants are being verified, the association revealed:

At the moment, the registry includes more than 50 companies.

Russia Now Has a Registry of Whitelisted Crypto CompaniesThese companies are “trusted organizations which have already passed the verification procedure,” RACIB emphasized. Any legal entity in Russia wanting to be included can apply online. “The average period for document review is 10 days. At this time, third-party verification is not performed,” RABIC’s website states.

Additional testing and certification in three areas are already in the works, the association revealed. The first is a “certification for traders of crypto assets.” The second is a “certification for mining equipment suppliers” and the third is a “certification for mining farms.”

Russian Crypto Bill Delayed

The legal framework for the regulation of cryptocurrencies and ICOs in Russia is still in the preparation stage. The bill “On Digital Financial Assets” passed the first reading in the State Duma in May.

Russia Now Has a Registry of Whitelisted Crypto CompaniesLast year, Russian President Vladimir Putin ordered the regulation of cryptocurrencies and ICOs be finalized in July. However, Bankir wrote last week that the “consideration of draft laws on cryptocurrency was postponed to September.”

Elina Sidorenko, head of the State Duma’s interdepartmental working group responsible for a risk assessment on the turnover of cryptocurrencies, explained the delay in an interview with Hash Telegraph.

According to her, the Russian laws will be adopted after the “FATF [Financial Action Task Force on Money Laundering] standards are developed with respect to the risks of using cryptocurrency.” Without the FATF policies, it is difficult to adopt national legislation, she conveyed. The FATF draft document was expected to be considered at the session on June 27-29, “but in the end it was postponed to September,” Sidorenko detailed, elaborating:

Now in the State Duma there are several bills at once. And they are very different approaches to the definition of cryptocurrencies and tokens…The Central Bank believes that cryptocurrencies and tokens now do not have sufficient economic resources to function fully in free economic circulation.

What do you think of the Russian Association’s registry of whitelisted crypto companies? Let us know in the comments section below.


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Major Korean Exchange Bithumb Expanding into Japan and Thailand

Major Korean Exchange Bithumb Expanding into Japan and Thailand

One of South Korea’s largest cryptocurrency exchanges, Bithumb, is expanding into Japan and Thailand. The exchange is working on obtaining regulatory approval from the financial regulators of both countries. The new locations are part of the exchange’s global expansion plan.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Expanding into Thailand

Major Korean Exchange Bithumb Expanding into Japan and ThailandBithumb is currently working on obtaining regulatory approval from the Thai Securities and Exchange Commission (SEC), local media reported Friday. The exchange is the second largest in South Korea at the time of this writing, with a 24-hour trading volume of about $358 million, behind only the Kakao-backed Upbit with a $582 million trading volume during the same time period.

The exchange has already established a Thai subsidiary, Bithumb (Thailand) Company Limited, with registered capital of 3 million baht (~US$90,000). Zdnet quoted the company explaining the reason for its expansion into the Thai market:

Thailand is active in e-commerce and the fintech industry, and the government is showing great interest in digital currency as it promotes smart city business.

Thailand has recently finalized its regulatory framework for cryptocurrencies and initial coin offerings (ICOs). Bithumb has been building its Thai website, the publication added, noting that it plans to start service in Thailand at the end of October.

Major Korean Exchange Bithumb Expanding into Japan and Thailand
Bithumb Thailand’s website. Photo: Zdnet.

Expansion into Japan

Major Korean Exchange Bithumb Expanding into Japan and Thailand
Bithumb Japan’s website. Photo: Zdnet.

Japan legalized cryptocurrency as a means of payment in April of last year. All companies seeking to operate an exchange in the country must obtain approval from the country’s top financial regulator, the Financial Services Agency (FSA). However, with the hack of Coincheck in January, the FSA has been strengthening its oversight of crypto exchanges and imposing a stricter exchange approval process.

Nonetheless, Bithumb is seeking approval from the FSA with a plan to open an exchange in Japan in February next year, the news outlet conveyed. The exchange also revealed that “it plans to set up an exchange that supports the largest number of coins in Japan,” the publication noted.

Global Expansion Plan

Major Korean Exchange Bithumb Expanding into Japan and ThailandEarlier this year, Bithumb announced that it is looking for partners for its global expansion. The exchange says it will work closely with overseas partners to launch platforms that are faster and more efficient for traders worldwide.

Projects which Bithumb will collaborate with potential partners include “cash (deposit/remittance/debit) management processing, the operation of an exchange platform, [and] marketing & promotion and customer service,” the exchange detailed. According to the announcement:

Bithumb is preparing exchange platforms for countries under the global expansion plan and we are looking for great and potential partners (corporation, entity or group) worldwide…The exchange platforms under final development stages are USD / JYP / EUR / CNY / INR / GBP / AUD / CAD / PHP / RUB and [there] will be more soon when there are any service demands.

According to Money Today, Bithumb has also established a subsidiary in Singapore and Britain. “We are considering establishing overseas subsidiaries in various countries such as the U.S. and Europe, but the time has not yet been determined,” the exchange clarified.

In April, the third largest crypto exchange in South Korea, Coinone, announced its expansion into Indonesia.

What do you think of Bithumb expanding into Thailand and Japan? Let us know in the comments section below.


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Australian Firms Partner to Provide Crypto Custody Services

Australian Firms Partner to Provide Crypto Custody Services

Decentralised Capital, an Australian advisory firm “specializing in blockchain assets” and “asset management services,” has announced a partnership with Custodian Vaults, an Australian private vaulting company, to offer insured cryptocurrency custody services to the Australasian market.

Also Read: Have You Tried Blockchain 5.0 Yet? Nobody Else Has Either

Decentralised Capital and Custodian Vaults Partner to Provide Cryptocurrency Custody Services

Australian Firms Partner to Provide Crypto Custody ServicesIt has been announced that Decentralised Capital and Custodian Vaults are teaming up to provide insured cryptocurrency custody services in the form of what the companies are describing as Australia’s first insured cryptocurrency vault

According to According to Australian Financial Review, Stephen Moss, Decentralised Capital’s founder and the son of former Macquarie Bank property chief, Bill Moss, described the project as seeking to provide “a solution for the next phase of the industry” adding “it gives real security […] You can’t hack your way into the safe.”

Mr. Moss emphasized that his company is hoping to ride the cryptocurrency boom for the long-haul, stating:”In my opinion bitcoin will not be remembered as the bubble, but the pin. While the short-term future of bitcoin may be debatable, the blockchain and its benefits are not.”

The founder of Decentralised Capital stated that “the new vault provide[s] customers [with] direct access to their holdings and combined physical surveillance, biometric identification, pin codes, CCTV monitoring, alarm and fire control systems.” Additionally, the vault premises “also house a private Wi-Fi room to allow cryptocurrency transfers in and out.”

Custody Services Aimed at Crypto High Rollers

Australian Firms Partner to Provide Crypto Custody ServicesThe companies’ vault services will is expected to predominantly target institutional and wealthy investors, in addition to cryptocurrency exchangers and issuers of initial coin offerings. Mr. Moss has stated that the digital currencies held in the companies’ possession insured, however, did not provide the insurance provider’s name.

Janie Simpson, the director of Pallion – a precious metals firm that owns Custodian Vaults, described the company’s decision to enter into the cryptocurrency custody industry as having been spurred by growing customer demand.

“While traditionally we have offered secure vault services for clients storing precious metals and other assets, we are increasingly receiving interest from clients searching for solutions to store cryptocurrency,” Mrs. Simpson said.

Do you feel that cryptocurrency investors are in need of a greater array of custodianship services? Share your thoughts in the comments section below!


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Chile Appeals Court Rules in Favor of Crypto Exchange Against Bank

Chile Appeals Court Rules in Favor of Crypto Exchange Against Bank

In an ongoing dispute between banks and cryptocurrency exchanges in Chile, an appeals court has finally ruled in favor of one crypto exchange against one of the largest banks in the country. Five major banks have also separately responded to lawsuits against them in court.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Court of Appeals Ruling

Chile Appeals Court Rules in Favor of Crypto Exchange Against BankThe Fourth Chamber of the Court of Appeals of Santiago has ruled in favor of cryptocurrency exchange Orionx against Banco Estado for closing its account, local media reported. The ruling, which orders the only government-owned bank in Chile to reopen the exchange’s account, was published on Thursday.

The court decided that the bank’s action constitutes “an arbitrary and illegal action, which constitutes a deprivation of the right protected by Article 19 No. 2 of the Political Constitution of the Republic, that is, the right to equality before the law,” La Tercera quoted the ruling.

Chile Appeals Court Rules in Favor of Crypto Exchange Against BankBy closing the exchange’s account, the bank is preventing Orionx “from developing an activity that, although not regulated, does not prevent the bank from adopting less intensive security measures such as the development of effective monitoring and control programs before the final closure of the account,” Emol news outlet cited the ruling. The publication elaborated:

The document refers to breaches of contract and the impossibility of Banco Estado to determine that Orionx engages in money laundering with the currencies with which it operates.

While acknowledging the risks associated with crypto transactions, the court explained that businesses using them “as new forms of investment and payment…cannot necessarily be identified with the commission of criminal acts.”

Banks Responding to Lawsuits

A few lawsuits have been filed against the country’s major banks with the Court for the Defense of Free Competition (TDLC – Tribunal de Defensa de la Libre Competencia).

Chile Appeals Court Rules in Favor of Crypto Exchange Against BankOrionx sued six major banks last month for abusing their power and quashing its crypto payment business. Previously, another crypto exchange, Buda.com, filed a lawsuit against ten banks for closing its accounts and well as the accounts of another local crypto exchange, Cryptomkt. The antitrust court subsequently ordered three banks, including Banco Estado, to reopen the crypto exchanges’ accounts while the lawsuit is still pending.

On Friday, Diario Financiero reported that five banks have responded to the lawsuit against them before the TDLC. The banks are Santander, Banco de Chile, Banco de Crédito e Inversiones (Bci), Scotiabank, and Itaú. The exchanges allege that they abused their dominant position when they either closed the accounts of or denied opening them for crypto exchanges.

Santander wrote in its response letter that “the use of a current account would not be essential for the digital currency traders,” the publication conveyed.

Banco de Chile responded:

The closing of Cryptomkt’s current accounts is not based on the alleged danger of the activity carried out by the plaintiff or because it is not regulated by the authority, but…in the absence of concrete information that allows Banco de Chile to develop the due diligence in the matter of money laundering, since it is required to justify the transactions in the current accounts.

Bci denied any abuse of a dominant position, stating that it would be difficult to do so because crypto “is a practically decentralized market, with a large number of actors, according to public information available.”

What do you think of the Appeals Court’s ruling? Let us know in the comments section below.


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Indian Central Bank Justifies Its Crypto Stance – Outlines Key Areas of Concern

Indian Central Bank Justifies Its Crypto Stance - Outlines Key Areas of Concern

The Reserve Bank of India has justified its crypto banking ban to an industry group which has been trying to convince the central bank to ease crypto restrictions. In response, the central bank outlines key areas of concern and upholds its stance on crypto.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

RBI’s Main Concerns

Indian Central Bank Justifies Its Crypto Stance - Outlines Key Areas of ConcernIndia’s central bank, the Reserve Bank of India (RBI), has divulged key areas of concern regarding cryptocurrency. The communication is in response to a representation submitted by the Internet and Mobile Association of India (IAMAI). The document was sent to the central bank during the Supreme Court hearing of IAMAI’s petition against the crypto banking ban.

While RBI’s response cannot be made public, some industry participants have seen it and have discussed its content.

A source who has seen the document told news.Bitcoin.com that RBI told IAMAI it is particularly concerned about investor protection, cryptocurrencies’ lack of intrinsic value, and their anonymity, which could lead to money laundering.

Investor Protection

Indian Central Bank Justifies Its Crypto Stance - Outlines Key Areas of ConcernSohail Merchant, CEO of crypto exchange Pocketbits, commented on RBI’s response, stating that “all the basis of their arguments is ‘Investor Protection’.”

Nischal Shetty, CEO of crypto exchange Wazirx, concurred. “Some of the arguments seem to be around investor protection,” he noted, adding that “but investor protection comes with regulation and not a ban!”

Other crypto exchanges also agree that a ban is not the way to protect investors. Praveen Kumar, CEO of crypto exchange Belfrics, was quoted by Quartz:

By limiting transactions via bank accounts and allowing more cash-related transactions, RBI is allowing more people to get duped…Instead, they need to regulate the exchanges and lay down guidelines that can help prevent these frauds.

In addition, the source shared with news.Bitcoin.com that, “exchanges have been hacked globally and that worries them.”

There has been a rise in crypto-related scams in India. Even BJP party leaders have been accused of being involved in a bitcoin scam. Recently, the Indian state of Maharashtra announced that it is setting up a special investigative unit to investigate all crypto-related cases.

No Intrinsic Value

Indian Central Bank Justifies Its Crypto Stance - Outlines Key Areas of ConcernThe central bank is also concerned that “cryptos have no intrinsic value,” the source added.

RBI’s view reiterates the statement issued by the country’s finance ministry in December last year. Aimed at warning people of the risks of investing in cryptocurrencies, claiming that they are “like Ponzi schemes,” the statement reads:

VCs [virtual currencies] don’t have any intrinsic value and are not backed by any kind of assets. The price of bitcoin and other VCs therefore is entirely a matter of mere speculation resulting in spurt and volatility in their prices. There is a real and heightened risk of investment bubble of the type seen in ponzi schemes….

Anonymity of Crypto

The third major factor of concern for RBI is the “anonymity of crypto leading to money laundering,” the source noted.

However, exchanges argue that strict adherence to know-your-customer (KYC) norms would prevent money laundering, Quartz elaborated and quoted them clarifying, “all transactions are usually carried out via bank account transfers to keep a tab on the money trail.”

India is also not the only country concerned about the anonymity of crypto. Japan, where cryptocurrency is a legal means of payment, is another. The country’s top financial regulator has reportedly been pressuring exchanges such as Coincheck, which was hacked in January, to drop privacy coins.

What do you think of RBI’s concerns? Let us know in the comments section below.


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Study Finds Cryptocurrency Rebalance Portfolios Outperform ‘Hodling’

Study Finds Cryptocurrency Rebalance Portfolios Outperform 'Hodling'

Shrimpy cryptocurrency portfolio management is a platform that helps investors curate a portfolio with automated investment strategies. With the company’s portfolio experience, the Shrimpy team published a study that gives an informative technical analysis comparing two types of cryptocurrency investment methods: rebalance against holding (hodl).

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space  

The Portfolio Firm Shrimpy Looks at the Best Method of Cryptocurrency Investment — Rebalance vs Hodl

If you have been into cryptocurrency for a while now you’ve probably heard the expression ‘hodl’ which is a purposely misspelled word for digital asset holders or hoarders who hold their coins for a long time without spending them. These type of people believe that someday their bitcoins will be worth far more than they are today. Even during the big market dips, ‘hodlers’ continue to hold. Another form of investment that some cryptocurrency proponents use is called ‘rebalancing’ which involves a portfolio rebalance only when the asset allocation has dropped below a predetermined threshold. Unlike holding and weathering bearish market action, rebalancing protects investors from being constantly exposed to market dips.

Study Finds Cryptocurrency Rebalance Portfolios Outperform 'Hodling'
Some cryptocurrency proponents believe that holding is the best method of investment.

  Rebalancing Beats Hodl by a Median of 64%

Shrimpy used a variety of data to help determine which investment strategy was more profitable such as a complete year of market data, the creation of a rebalance structure,  the number of assets in a portfolio, and asset selection. Further Shrimpy tested multiple portfolios with 2-10 assets each. Within the study, Shrimpy had found that rebalancing outshined hodling in a few instances.  

“There are two major relations we can draw from this study — The first relation is that increasing the number of assets increased the performance of a portfolio,” explains Shrimpy’s research. “The second relation is that decreasing the rebalance period (increasing rebalance frequency) increased the performance of a portfolio. Therefore, the ideal portfolio was rebalanced frequently and also contain numerous assets.”

Rebalancing beat Hodl by a median of 64%. After taxes, this represented 92% of all possible cryptocurrency portfolios.

Study Finds Cryptocurrency Rebalance Portfolios Outperform 'Hodling'
“Combining all of the backtests over all the portfolios and rebalancing periods produces a complete picture comparing rebalancing and hodl — We observe a median complete performance of 64%,” Shrimpy’s study states. 

Ten Asset Portfolio With a 1-Hour Rebalance Period Outperformed Hodl by 234%

Shrimpy’s experiment also compared portfolios that hold ten assets but have a different rebalance period, which showed some interesting statistics.

“If you randomly selected 10 assets and rebalanced at least once a month, you would have had a 99.75% chance of outperforming buy and hold over the last year — This is truly incredible,” details the research.  

The median performance for a portfolio with 10 assets and a rebalance period of 1 hour was 234% better than Hodl.

Study Finds Cryptocurrency Rebalance Portfolios Outperform 'Hodling'
“The median performance demonstrates that the higher the rebalance period with the higher number of assets presents the highest gains for rebalancing — Each value represents a percent increase over buy and hold,” explains Shrimpy. 

The Cryptocurrency Spend vs Hodl Debate is Years Old, But Is Being Argued Fervently Once Again

Study Finds Cryptocurrency Rebalance Portfolios Outperform 'Hodling' The study goes against the many people who believe hodling or hoarding is the best method of investment. For years there has been a long debate on which form usage is better for long-term cryptocurrency adoption, and lately, there’s been a new wave of people bolstering the idea of ‘spend and replace,’ most notably with the Bitcoin Cash (BCH) crowd. One wallet called Cashpay allows users to spend and replace their BCH every time they buy stuff with bitcoin cash. Holding can definitely bring people gains especially over long periods of time, but rebalancing seems to be less risky and more rewarding according to Shrimpy’s study.

What do you think the best method of investment is — rebalance or hodl? Let us know what you think about this subject in comment section below.


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Australian Bank Bans Use of Mortgage Funds for Crypto Speculation

Australian Bank Bans Use of Mortgaged Funds for Crypto Speculation

One of Australia’s oldest financial institutions, Bank of Queensland, has prohibited the use of home equity loans for virtual currency speculation. The move has been attributed to concerns pertaining to the growing regulatory oversight of the cryptocurrency sector in Australia.

Also Read: Tether Announces Appointment of New Chief Compliance Officer

Bank of Queensland Cracks Down on Customers Using Mortgage Funds to Trade Crypto

Bank of Queensland has banned its customers from using loans that are leveraged against home equity for the purposes of cryptocurrency speculation due to concerns pertaining to the increasing regulatory oversight of cryptocurrency activities in Australia.

Contracts issued by Bank of Queensland will now caution prospective borrowers “any loan purpose that involves the acquisition of or usage of cryptocurrency is unacceptable.” The Australian Financial Review (AFR) recently reported that a spokesperson for Bank of Queensland “has confirmed the changes.”

Whilst borrowers cannot invest the capital loaned for property straight into the cryptocurrency markets due to such being paid directly to the vendor, many opportunistic debtors have used funds that are redrawn from their mortgage in order to purchase virtual currency. Other traders have reportedly sought cryptocurrency exposure through accessing a line of credit – where the borrower draws on predetermined lines of credit accessed against property equity.

Australian Regulators Increasingly Target Cryptocurrency

Australian Retail Bank Bans Use of Mortgaged Funds for Crypto SpeculationA mortgage broker who wished to remain anonymous discussed financial institutions’ concerns pertaining to virtual currency speculation with AFR, asserting that lenders are increasingly monitoring debtors accounts for indications that they may be involved in cryptocurrency trading.

“They are concerned because the Australian Taxation Office, Treasury, the Reserve Bank of Australia and AUSTRAC are crawling all over it,” the broker said.

Additionally, AFR asserted that Australian “Lenders and prudential regulators are also concerned to prevent anything that might worsen the nation’s worrying household debt levels, which is already among the world’s highest.”

Other uses for mortgage funds typically prohibited by Australian financial institutions include the refinancing of payday loans, the payment of government fines or penalties, and payments to debt collection agencies.

What is your reaction the Bank of Queensland’s move to ban the use of mortgaged funds for cryptocurrency speculation? Share your thoughts in the comments section below!


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Japanese Police Seize Cryptocurrency for Parking Violations

Japanese Police Seize Cryptocurrency for Parking Violations

Japanese police have seized cryptocurrency belonging to a man with unpaid parking fines. The police explain that the revised fund settlement law enacted in April last year allows cryptocurrency to be seized like any other asset.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Crypto Seized for Parking Violations

Japanese Police Seize Cryptocurrency for Parking Violations
Image from the Hyogo Prefectural Police’s website.

The Hyogo Prefectural Police traffic guidance division announced this week that it had seized cryptocurrency owned by a 59-year-old resident with multiple delinquent parking violation charges, local media reported. Hyogo is a prefecture in the Kansai region of the country’s main island, Honshu. Kobe, located west of Osaka and Kyoto, is the capital of the prefecture.

The Kobe Shimbun reported that about 5,000 yen (~US$44) worth of cryptocurrency was seized but the police did not reveal which crypto. Nikkei, on the other hand, reported that “there were 2 kinds” of cryptocurrencies “such as bitcoin deposited with an exchange that were seized.” The news outlet elaborated:

According to the prefectural police traffic guidance division, it is the first time in the country to seize virtual currency in relation to parking violations.

Japanese Police Seize Cryptocurrency for Parking Violations
Image from the Hyogo Prefectural Police’s website.

However, the crypto seized from the man’s account at an exchange currently does not cover the total amount owed to the cops. According to the Kobe Shimbun, he has failed to pay a total of 99,700 yen (~$885) in violation charges including four parking tickets issued between January 2014 and July 2016.

The news outlet further detailed that if payment is not received by the end of this month, which is the deadline for claiming seized property, the cryptocurrency will be cashed out at the current rate and paid to the prefectural police.

Crypto is Asset that Can be Seized

The man’s parking violations are considered “unattended vehicle.” The Kyoto Prefectural Police explained that the term means “a vehicle that is illegally parked, with its driver away from the car, and which cannot be started immediately. This is regardless of the length of parking time, or whether the vehicle engine is turned on or off, or whether the emergency flashing lights on or off.”

Japanese Police Seize Cryptocurrency for Parking ViolationsUsually, “Land, houses, automobiles, bank savings, salary, and life insurance payouts could be seized, based on the decision of the Public Safety Commission,” the police clarified.

However, in the case of the 59-year-old, the Hyogo Prefectural Police “did not know his place of work and [he] had no cash deposits or savings,” the publication conveyed. Citing that the revised fund settlement act that legalizes cryptocurrency as a means of payment enables the police to seize crypto assets, the news outlet elaborated:

According to the prefectural police, after [crypto] asset value was recognized by the revised fund settlement law enforced in April last year, it [cryptocurrency] was judged as an asset that can be seized.

The Hyogo Prefectural Police have been increasingly active in collecting unpaid fines and have seized small items including an automatic mahjong table, golf bags, figurines, and brand name goods, the Kobe Shimbun described. The division says that they will not allow violators “to escape since it will be unfair for the people who are paying [the fines].”

Editor’s Note: Nathalie Stucky contributed to this article.

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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.


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Texas Regulator Issues Cease and Desist Order to a Network of Crypto Companies

Texas Regulator Issues Cease and Desist Order to a Network of Crypto Companies

The Texas State Securities Board has taken an emergency action to stop a network of crypto-related companies from illegally offering investments in the state. A token offering and a mining firm are among those targeted by the securities board as selling fraudulent “cryptocurrency-related investments.”

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Emergency Action Taken

Texas Regulator Issues Cease and Desist Order to a Network of Crypto CompaniesThe Texas State Securities Board announced Thursday that an emergency action has been taken to “target promoters of crypto-mining investments.” According to the notice published on July 12 by the Board:

Texas Securities Commissioner Travis J. Iles took emergency action July 11 to stop a network of companies from fraudulently offering cryptocurrency-related investments to Texas residents.

Utah-based companies Mintage Mining LLC, Symatri LLC, NUI Social, Social Membership Network Holding LLC, and BC Holdings and Investments LLC are named in the emergency cease and desist order. They are all controlled by Darren Olayan of Lehi, Utah. In addition, NUI Social affiliates, Utah-based Douglas Whetsell and Houston-based Wyatt Mccullough, are also named in the order.

Investment Schemes

Texas Regulator Issues Cease and Desist Order to a Network of Crypto CompaniesMintage Mining LLC allegedly issues and offers two different crypto mining-related investments “illegally and fraudulently.” Together with Symatri LLC, they sell “pre-configured computer hardware to mine Kala,” an ERC-20 token which Symatri claims to be “fungible and transferable, and it is expected to be traded on cryptocurrency exchanges in the near future.”

Symatri also claims that more than 13,000 users have signed up for Kala’s ICO, which sold more than 814 million tokens. It supposedly raised over $8.5 million and more than 800 BTC. According to the Commissioner:

Symatri is not disclosing material information about the value of its cryptocurrency Kala. Nor is it providing information about the risks of investments in the computer hardware used to mine Kala.

Texas Regulator Issues Cease and Desist Order to a Network of Crypto CompaniesNUI Social is a multi-level marketing company that claims to have more than 300,000 members in 140 countries. Members of the scheme recruit individuals for crypto investments and earn commissions for the people that they recruit.

Whetsell and Mccullough were named for publishing “advertisements targeting Texas residents,” the Commissioner explained. According to the document, the promoters made claims such as:

The average weekly rate of interest varies from three percent to seven percent and the annual rate of interest ranges from 180 percent to 250 percent.

The advertisements also represent that Mccullough’s investment grew 500% within 7 weeks while his uncle’s rose 4,000% in 10 weeks.

The Violations

The order “alleges widespread violations of the Texas Securities Act” by all of the entities and individuals named within. According to the Commissioner, “none of the persons offering any of the investments are registered to sell securities in Texas, nor are the investments themselves registered for sale or have qualified for an exemption from registration.”

The Commissioner elaborated:

The violations include making deceptive claims to the public. Olayan and Mintage Mining, for instance, are telling investors that Mintage is ‘in compliance’ with securities laws, ‘works to always stay ahead of cryptocurrency regulation,’ and ‘remain[s] so continually by keeping in contact with legal firms.’

All named parties have been ordered to immediately cease and desist from offering a security for sale in Texas until the security is registered or exempt. They must also cease acting as securities dealers or agents in the state until they are registered or exempt. They have likewise been told that they cannot engage in any security-related fraud in the state.

What do you think of the Texas State Securities Board’s cease and desist order? Let us know in the comments section below.


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

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

A mainstream media assertion made recently implies that cryptocurrency is quite costly in terms of energy consumption. “Bitcoin has been alarming people for years,” the report notes, pointing to the amount of electricity used for its mining – almost as much as a small nation needs. But is that really so?

Also read: Japanese Internet Giant GMO Boosts Own Bitcoin Mining Output With 7nm Rigs

Bitcoin Said to Use ‘Almost’ as Much Electricity as Ireland

Mainstream Media Claims Bitcoin Burns More Energy Than Ireland – Does It?Mainstream media is often preoccupied with exploring and revealing the negative effects of cryptocurrencies. A common criticism towards Bitcoin is that its energy-intensive mining is too expensive for the planet.

The latest mention of this feature comes from a respectable outlet. In an article titled “Why bitcoin uses so much energy”, “The Economist explains” the reasons noting that “Bitcoin has been alarming people for years because of the amount of electricity needed to mint new virtual coinage.”

The magazine quotes Alex de Vries, a bitcoin specialist at PwC, who estimates that “the current global power consumption for the servers that run bitcoin’s software is a minimum of 2.55 gigawatts (GW), which amounts to energy consumption of 22 terawatt-hours (TWh) per year – almost the same as Ireland.” The piece adds that bitcoin miners consume more and more power with no signs of a slowdown. “Why does bitcoin require so much energy to make something that exists only electronically?” the Economist asks.

Let’s skip the lecture on how bitcoin transactions are recorded in the ledger, how “the miners’ race, known as ‘proof of work’, could be superseded by ‘proof of stake’,” and get straight to the point by asking in our turn – Does Bitcoin really spend as much electricity as Ireland, and what does “almost the same” consumption really mean?

Bitcoin Burns at Least One Malta Less Than Ireland

Mainstream Media Claims Bitcoin Burns More Energy Than Ireland – Does It?It seems the Economist got it wrong in two respects. Let’s take a look at the energy consumption of Ireland first. According to the data compiled in the CIA World Factbook, the country has used 25 TWh of electrical power in 2017, and over 26 TWh yearly between 2011 and 2014. Consumption, in this case, means the total electricity generated in the country, plus imports and minus exports, as quoted by Indexmundi. And according to Eurostat, Ireland is among the EU countries with the highest increase in gross energy consumption – 38% between 1990 and 2015, when it consumed almost 24 TWh.

The statistics reveal a difference of 3 TWh, if we use the 2017 data for reference, between the 22 TWh claimed in the article and what Éire actually consumed last year – 25 TWh. Using a similar comparison to illustrate the discrepancy, 3 TWh is more than what Malta or Andorra need in a year – 2 TWh and change, each. So, it’s safe to say that Bitcoin uses less electricity than Ireland by a substantial margin.

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

Now, let’s talk about the financial side of things. Each mined BTC block currently generates 12.5 new bitcoins (the next halving will occur in 2020). A block of transactions takes 10 minutes to get mined, on average, which means approximately 1,800 bitcoins are minted each day. That translates into a daily BTC network reward of roughly a little more than $11 million (at the time of writing).

The reward should allow miners to cover their costs for electricity, but also all other expenses of their business – salaries, amortization, maintenance, rent and so on. Let’s not forget the electricity needed to power the cooling systems. Actually, the electrical energy consumed by cryptocurrency mining is believed to account for around half of all costs. Let’s assume that it’s half of the total reward, $5 or $6 million. Do you want to know how much the Irish consumers pay for their daily electricity consumption?

Last year, Eurostat revealed that Ireland has some of the most expensive electricity in Europe, actually the fourth highest rates in the EU, as of November, 2017. It has been reported that Irish customers pay an average of 23.1 cent per kilowatt-hour (kWh) of electricity, which is 13% higher than the EU average. According to Eurostat, electricity prices for household consumers in Ireland were averaging €0.24 per kWh (~$0.28, with taxes) in the second half of 2017. The simple arithmetic shows the Republic has paid an average of $19 million dollars for electricity daily, last year.

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

With the current state of crypto markets, it’s true that mining is getting less profitable, if not more expensive. According to a recent study, its profitability in different countries varies significantly. Using a Bitmain’s Antminer S9 at an energy consumption of 1.5 kWh earns about 0.0008 BTC in 24 hours and mining a single bitcoin requires approximately 45 MW of electricity. That means that in the Czech Republic, where electricity is priced at €0.06 per kWh (~$0.07), mining 1 BTC would cost around €3,000 (~$3,500). And in Germany or Italy, bitcoin mining is prohibitively expensive – it eats more than €6,500 ($7,500) per coin.

Do you think bitcoin mining is expensive, in terms of energy consumption and other costs? Share your thoughts on the subject in the comments section below.  


Images courtesy of Shutterstock, Eurostat, CIA World Factbook, Index Mundi.


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Only 12 out of 23 Korean Crypto Exchanges Pass Probe – Inspector Under Fire

Only 12 out of 23 Korean Crypto Exchanges Pass Probe – Inspector Under Fire

The self-regulatory inspection of South Korean cryptocurrency exchanges is complete. Fourteen out of 23 exchanges agreed to be inspected. Twelve met the self-regulatory standards despite security flaws, raising questions of how effective the inspection is.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

12 Exchanges Pass Security Checks

Only 12 out of 23 Korean Crypto Exchanges Pass Probe – Inspector Under FireThe Korea Blockchain Association (KBA) held a press conference Wednesday to announce the results of its inspection of cryptocurrency exchanges operating in the country. The Association “gave a nod to the cybersecurity standards of 12 cryptocurrency exchanges,” the Korea Herald reported.

The KBA has been heavily promoting self-regulation since its establishment last year. Out of 23 members that are crypto exchanges, 14 of them voluntarily agreed to be inspected. According to the news outlet:

Exchanges that gained self-regulatory affirmation were 12 out of 14: Dexko, Hanbitco, Okcoin Korea, Huobi Korea, Bithumb, Upbit, Neoframe, Gopax, Cpdax, Coinzest, Korbit and Coinone. Operators of the other two — Sunny7 and Komid — withdrew from the KBA-led inspection.

The inspection was conducted “through interviews by third-party experts authorized by KBA in June and July,” the publication noted, emphasizing that a “hacking simulation on the exchanges did not take place.”

Nonetheless, the association said the 12 exchanges met “general standards” such as “minimum total assets, adoption of a cold wallet, anti-money laundering requirements and dozens more.” They also met “the criteria for cybersecurity standards, which the association referred to as minimum requirements.”

Association Criticized for Poor Screening

Following the KBA’s announcement, some industry participants pointed out major flaws in the inspection.

12 Korean Crypto Exchanges Pass Self-Regulatory Probe but Inspector Under FireThe association has come “under fire for poor screening of cryptocurrency exchanges,” the Korea Times wrote, emphasizing that “the KBA even extended its one-month inspection to two months to allow sufficient time for underprepared exchanges, inviting criticism for carrying out an inspection in name only.”

Furthermore, “It is pointed out that even though hacking incidents at virtual currency trading sites have occurred recently, all trading sites have passed the screening,” Money Today wrote, suggesting that the inspection was ineffective. Last month, Coinrail and Bithumb were hacked.

The news outlet quoted an industry source asserting, “it is doubtful that all of them have passed [the inspection],” noting that “the fact that the scores of the detailed evaluation items are not disclosed for each trading site is also a cause of doubt in the examination results.” The Korea Times elaborated:

The KBA did not disclose a detailed score or security rating of each cryptocurrency exchange, casting doubt about the fairness of the inspection. The KBA said the disclosure could trigger another cyberattack on domestic exchanges with weaker security firewalls.

The chairman of the association, Jeon Ha-jin, even “indirectly admitted the group’s inspection may have loopholes,” according to the news outlet.

12 Korean Crypto Exchanges Pass Self-Regulatory Probe but Inspector Under FireHe was quoted explaining, “This inspection does not guarantee the absolute safety of the 12 exchanges,” noting that “The result indicates the 12 exchanges satisfy the minimum requirement for their operations. It is like a driver’s license. It is hard to tell whether they are good drivers or not.”

The chairman also declined to elaborate on a “huge gap in the level of handling cybersecurity risks between the 12 exchanges,” the Korea Herald conveyed.

The announcement by KBA came just days after the Korean government revealed its analysis of hacking incidents in the country. The government has been criticized for not doing enough to prevent hacking damages since three of the 31 exchanges it inspected were hacked, causing damages of about 110 billion won (~US$98 million).

What do you think of this self-regulatory inspection and standards? Let us know in the comments section below.


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Canadian Crypto Exchange Coinsquare to Launch in Japan

Canadian Crypto Exchange Coinsquare to Launch in Japan

Canadian cryptocurrency exchange Coinsquare has announced its plan to enter the Japanese market pending approval by the country’s financial regulator. The new exchange will be launched under the Dlta21x brand. It will focus on Japan initially but has plans to expand into other Asian markets.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Coinsquare Launching in Japan

Canadian Crypto Exchange Coinsquare to Launch in JapanCoinsquare made two announcements on Tuesday. One is the official launch of Coinsquare Licensing to “enable domestic and international businesses to offer a digital currency trading solution powered by Coinsquare’s technology.” The company also revealed that it has already partnered with some businesses in the EU and Canada to launch white-labeled platforms.

The other announcement is its plan to enter the Japanese market using Coinsquare Licensing. The launch will be in collaboration with Dlta 21 Blockchain Corp (Dlta21), formerly Protos Blockchain Corp. According to the companies:

The new trading platform is to be launched under the Dlta21x brand name after receiving all required regulatory approvals in Japan.

Canadian Crypto Exchange Coinsquare to Launch in JapanFounded in 2014, Coinsquare offers the trading of BTC, BCH, ETH, LTC, DOGE, and DASH. The exchange claims to be “Canada’s most secure digital currency trading platform,” with a “95% cold storage policy on all digital currency.” The company also owns Coinsquare Mining with operations in Québec.

Dlta21 is a venture capital firm focused on blockchain startups. The company invests in “early-stage distributed ledger technology startups” and manages “a cryptocurrency trading operation backed by advanced quantitative algorithms,” its website describes.

International Expansion

Canadian Crypto Exchange Coinsquare to Launch in JapanThe two companies say, “while customers in Japan will be the initial focus of the Dlta21x cryptocurrency exchange, based on applicable laws, regulations and restrictions, going forward Dlta21x plans to expand to other Asian markets as well.”

Earlier this year, Coinsquare unveiled its plan for an initial public offering in September “to help finance an overseas expansion.” For its expansion into the U.S. and the U.K., CEO Cole Diamond was quoted by the Financial Post saying:

We believe that we will be a strong competitor to Coinbase and other exchanges in the U.S. by the end of the year.

The Japanese Crypto Market

Canadian Crypto Exchange Coinsquare to Launch in JapanCurrently, Japan has 16 government-approved cryptocurrency exchanges and a number of “deemed dealers” that have been allowed to operate crypto platforms while their applications are being reviewed by the country’s top financial regulator, the Financial Services Agency (FSA).

However, since the hack of Coincheck in January, the FSA has drastically tightened its oversight of the industry. It has already sanctioned a number of deemed dealers and recently ordered six licensed exchanges to improve their businesses, including the country’s largest crypto exchange by volume, Bitflyer.

Despite the increased oversight and stricter exchange approval process, the FSA confirmed to news.Bitcoin.com:

More than 100 [crypto] operators have expressed their intention of enter the market.

Among major companies seeking to enter the Japanese market is Line Corp, the operator of the country’s most popular chat app, Line. The company recently announced that it is launching a crypto exchange, Bitbox. However, since its application with the FSA is still pending, Line will not offer services in Japan initially.

What do you think of Coinsquare expanding into Japan and other Asian markets? Let us know in the comments section below.


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Litecoin Foundation and Tokenpay Acquire Stake in German Bank

Tokenpay Swiss AG has officially confirmed that it has acquired a 9.9 percent stake in WEG Bank AG in partnership with the Litecoin Foundation. The terms of the agreement will also include options to purchase approximately 90% overall of the bank, pending the customary regulatory approval.

Also Read: Stiglitz Predicts Cryptocurrencies Will Be “Regulated Into Oblivion”

Litecoin Foundation and Tokenpay Acquire 10% of German Bank

Tokenpay has revealed that a strategic partnership between it and the Litecoin Foundation has seen the entities acquire an approximately 10% stake in the German financial institution WEG Bank.

According to a press release published by Tokenpay, the deal will see WEG Bank “Provide its world-class technology and marketing expertise to Tokenpay and its several blockchain initiatives,” specifically citing Tpay Cryptocurrency, Efin Decentralized Exchange, Tokensuisse Asset Management, WEG Bank Fintech Platform, and Multisignature Transaction Engine.

The managing director of the Litecoin Foundation, Charlie Lee, praised the partnership, stating: “This partnership is a huge win-win for both Litecoin and Tokenpay. 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. I’m also excited about Litecoin’s support in Tokenpay’s Efin decentralized exchange.”

Mr. Jorg E. Wilhelm, the head of the supervisory board of Tokenpay Swiss AG., stated: “We are elated to be in the process of acquiring a large stake in a successful business bank based in Germany such as WEG. Our ecosystem consisting of the Tpay blockchain, WEG Bank, Tokensuisse and Litecoin Foundation provides us with a tremendous opportunity regarding merchant solutions, along with a strong and diverse customer base for our crypto debit card business. The tangible reality of bridging the gap between the old and new world is electrifying.”

Deal May See Acquisition of 90% of WEG

Litecoin Foundation and Tokenpay Acquire Stake in German BankThe terms of the agreement will also include “options to purchase approximately 90% overall of the bank pending the customary regulatory approval.” The release adds that “under German banking law no entity can own more than 9.9% of a bank without regulatory approval.” Tokenpay “plans to exercise its options to acquire the remaining shares of WEG Bank it is entitled to purchase” should approval for such be granted.

Matthias von Hauff, founder, and CEO of WEG Bank AG stated: “The partnership with innovative institutions such as Tokenpay and Litecoin might at first come unexpectedly for a very conservative institution like us. But we have thoroughly and diligently examined the prospects of a common future, and we became convinced that the future of banking will make adoption of such modern payment methods inevitable. We are therefore proud to have teamed up with the best in the field.”

What is your reaction to the acquisition of 9.9% of WEG Bank by the Litecoin Foundation and Tokenpay? Join the discussion in the comments section below!


Images courtesy of Shutterstock, Tokenpay, www.weg-bank.de


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Indian Central Bank Responds About Crypto Restrictions

Indian Central Bank Responds About Crypto Restrictions

India’s central bank has responded to a representation about its crypto banking ban. The Supreme Court gave the central bank seven days to reply following a hearing last week of the petition by the Internet & Mobile Association of India against the ban.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

RBI’s Response

Indian Central Bank Responds About Crypto RestrictionsIndia’s central bank, the Reserve Bank of India (RBI), has responded to a representation submitted by the Internet & Mobile Association of India (IAMAI), as directed by the country’s Supreme Court.

Nischal Shetty, the CEO of crypto exchange Wazirx, told news.Bitcoin.com that the representation is “a detailed document explaining blockchain, cryptos and how they function,” noting that it was “made with the belief that if the RBI gets a deep understanding of blockchain and crypto then they may go easy on the ban and think about regulations.”

Indian Central Bank Responds About Crypto RestrictionsThis representation was sent to the central bank on July 3 during the IAMAI petition hearing. The Court ordered the central bank to reply within seven days. On July 11, RBI finally sent its response to the association.

According to Sohail Merchant, the CEO of Indian crypto exchange Pocketbits, RBI’s reply is a “2 page generic response.” While stating that “as of now the response cannot be made public” but there is “not much to read though,” he commented:

IAMAI received the response from RBI as directed by SC [Supreme Court], the response is generic with the same language as the public circulars. They have not even given deliberate thought to the points made by us, all the basis of their arguments is ‘Investor Protection.’

Shetty reiterated, “RBI has responded to IAMAI…They aren’t changing their stand.”

Until Next Hearing on July 20

The central bank issued a circular on April 6 banning all financial institutions under its control from providing services to companies dealing in cryptocurrencies, including crypto exchanges.

Indian Central Bank Responds About Crypto RestrictionsRBI gave banks three months to sever their relationships with crypto businesses. As the ban went into effect on July 5, banks began closing accounts of crypto exchanges. One by one, the exchanges stopped supporting fiat deposits and withdrawals.

To bypass banking restrictions, a number of exchanges are launching peer-to-peer (P2P) trading services. Koinex and Coindelta are reportedly launching their P2P services on July 15. Wazirx, on the other hand, already launched its P2P service. The company wrote, “Wazirx P2P goes live today, 10th July at 3PM. With Wazirx P2P, a buyer and seller can buy and sell cryptos for INR directly with each other.”

Meanwhile, industry participants and stakeholders are trying to get the RBI ban lifted by filing petitions with the Supreme Court, which will all be heard on July 20.

Do you think RBI will soon lift the banking ban on crypto? Let us know in the comments section below.


Images courtesy of Shutterstock, IAMAI, and the RBI.


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Stiglitz Predicts Cryptocurrencies Will Be “Regulated Into Oblivion”

Stiglitz Predicts Crypocurrencies Will be "Regulated Into Oblivion"

Joseph Stiglitz, the former chief economist of the World Bank and Nobel laureate, has predicted that cryptocurrencies will be “regulated into oblivion” in future, with Mr. Stiglitz saying that BTC may be “worth just $100 in 10 years.”

Also Read: Philippines Embraces Cryptocurrency: Exchanges Issued Provisional Licenses

Nobel Laureate Predicts Future Regulatory Onslaught Targeting Crypto

In a recent interview with Financial News, Mr. Stiglitz predicted that bitcoin and alternative cryptocurrencies will become the subject of a major regulatory crackdown in future. “You cannot have a means of payment that is based on secrecy when you’re trying to create a transparent banking system,” the Nobel Laureate said. “If you open up a hole like bitcoin then all the nefarious activity will go through that hole, and no government can allow that.”

The Columbia University professor theorized that law enforcement across the globe are yet to adopt prohibitive policies regarding cryptocurrencies due to the underdevelopment of the virtual currency ecosystem, stating “Once it becomes significant they will use the hammer.”

“Bitcoin could easily be worth just $100 in 10 years,” said Mr. Stiglitz. “People in power will move to regulate anonymous transactions. That you can be sure of.”

Stiglitz Persistently Calls for BTC to Be Banned

Mr. Stiglitz’ comments are of a similar vein to those made by the professor regarding cryptocurrency in recent years.

In September, 2016, Mr. Stiglitz stated that “The main use of Bitcoin has been to circumvent tax authorities and regulation. I think the US government did the right thing by shutting or trying to shut it down.”

In an interview with Bloomberg during December of last year, Mr. Stiglitz echoed virtually identical sentiment, asserting that “bitcoin is successful only because of its potential for circumvention.” The Nobel laureate continued: “it seems to me [bitcoin] ought to be outlawed. It doesn’t serve any socially useful function. We ought to just go back to what we always have had […] This is just a bubble … It’s a bubble that is going to give a lot of people a lot of exciting times as it rides up and then goes down.”

What is your response to Joseph Stiglitz’ comments? Share your thoughts in the comments section below!


Images courtesy of Shutterstock, Wikipedia


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Special Unit Formed to Investigate Crypto Cases in India

Special Unit Formed to Investigate Crypto Cases in India

A special investigations unit has been set up in the Indian state of Maharashtra where there is a rise in bitcoin-related scams. The unit will take over the investigation of all cases relating to cryptocurrency in the state that are currently handled by various police departments.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Special Unit Formed for Crypto

Minister Deepak Vasant Kesarkar, a member of the 13th Maharashtra Legislative Assembly, made a statement regarding cryptocurrency cases in his state on Tuesday. The Pune Mirror quoted him replying to a Calling Attention motion tabled by the opposition leader in the Legislative Council:

A special investigative team (SIT) will be formed to investigate all cases related to cryptocurrency, including bitcoin, in Maharashtra…The SIT will take over investigations currently being done by various units of the state police.

He explained that the new unit will be headed “by an official of the rank of additional director-general of police,” adding that it has been given three months to research all of the companies “that have cheated investors in the name of cryptocurrency.”

Panel to Probe Scams

Special Unit Formed to Investigate Crypto Cases in IndiaThe Maharashtra government has also decided to conduct an inquiry using “a panel headed by additional director general of Economic Offence (EO) Prabhat Kumar,” DNA publication detailed.

“The panel will be entitled to coordinate with central agencies including Enforcement Directorate (ED) for probe in such scams.”

Kesarkar told the news outlet:

Already such cases were reported in Thane, Pune, Nanded and Kolhapur where members of public have been allegedly cheated through cryptocurrency.

The Pune Mirror elaborated, “It is estimated that investors from the state were cheated to the tune of around Rs. 2,000 crore [~US$2,906,400] in cryptocurrency trade,” adding that “the most common method of cheating was offering high returns under the multi-level marketing (MLM) scheme.”

Other Recent Crypto Fraud Cases

Special Unit Formed to Investigate Crypto Cases in IndiaLast week, the Indian Congress party alleged that some of the top BJP party leaders are involved in a bitcoin scam in Gujarat. The Financial Express quoted a Congress spokesperson saying there were “reports of the state police blackmailing some businessmen in Surat for extortion and named a former BJP legislator as one of the kingpins.”

On Monday, a city sessions court refused bail to seven police officers who were arrested in connection with a bitcoin extortion case in June, according to the Times of India. They were accused of being part of the police team that allegedly abducted and detained Surat-based builder Shailesh Bhatt and forced him and his business partner Kirit Paladiya to transfer 200 BTC.

The move by the Maharashtra government came just four days after the crypto banking ban by the Reserve Bank of India (RBI) went into effect.

What do you think of the special unit set up to investigate crypto cases? Let us know in the comments section below.


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Localbitcoins Trader Sentenced to One Year in Prison

Localbitcoins Trader Sentenced to One Year in Prison

A Southern Californian Localbitcoins trader has been sentenced to prison for a year for unlicensed money transmitting and money laundering. The trader, Bitcoin Maven, reportedly exchanged between $6 and $9.5 million for customers across the country, according to the notice by the U.S. Department of Justice.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

One Year in Prison for Localbitcoins Trader

The U.S. Department of Justice (DOJ) announced on Monday that Theresa Lynn Tetley, also known as Bitcoin Maven, has been sentenced to one year in federal prison. The announcement reads:

‘Bitcoin Maven,’ who admitted to operating an unlicensed bitcoin-for-cash exchange business and laundering bitcoin that was represented to be proceeds of narcotics activity, was sentenced today to 12 months and one day in federal prison, three years of supervised release, and a fine of $20,000.

Localbitcoins Trader Sentenced to One Year in PrisonFormer stockbroker and real estate investor, the 50-year-old Southern Californian was sentenced by U.S. District Judge Manuel L. Real “for conducting an illegal business and engaging in unlawful monetary transactions involving bitcoins,” the DOJ wrote. She “pleaded guilty to one count of operating an unlicensed money transmitting business and one count of money laundering.”

The Justice Department further revealed that “Tetley was also ordered to forfeit 40 bitcoin, $292,264.00 in cash, and 25 assorted gold bars that were the proceeds of her illegal activity.”

News.Bitcoin.com first reported on this case last month when the persecutors asked the judge to sentence Tetley to 30 months in federal prison.

Selling BTC Without License

Localbitcoins Trader Sentenced to One Year in PrisonThe Drug Enforcement Administration and IRS Criminal Investigation unit investigated this case. The DOJ explained that Tetley offered bitcoin exchange services without registering with the Financial Crimes Enforcement Network (Fincen) as a money services business. She also did not establish “anti-money laundering mechanisms such as customer due diligence and reporting certain transactions required for these types of businesses,” the Justice department divulged, adding:

Tetley advertised on localbitcoins.com and exchanged, in total, between $6 and $9.5 million for customers across the country, charging rates higher than institutions that were registered with Fincen.

The authority concluded that by operating this unregistered business, “Tetley facilitated laundering for one individual who is suspected of receiving bitcoin from unlawful activity, such as sales of drugs on the dark web.” Moreover, she “also conducted an exchange of bitcoin-for-cash for an undercover agent who represented that his bitcoins were the proceeds of narcotics trafficking.”

Crackdown on Illicit Use of Crypto

Localbitcoins Trader Sentenced to One Year in PrisonIn the sentencing documents, the government claimed that Tetley’s business “fueled a black-market financial system,” citing “the growth of the dark web and the use of digital currency, unlicensed exchangers provide an avenue of laundering for those who use digital currency for illicit purposes.”

The U.S. Government has been actively trying to crack down on the illicit use of cryptocurrencies.

Last month, a high-ranking official of the U.S. Secret Service gave a testimony before the House of Representatives. He urged Congress to consider additional legislation to address anonymity-enhanced cryptocurrencies and services intended to obscure transactions on blockchains.

Also last month, the House unanimously passed Bill H.R. 6069 to help prevent the illicit use of cryptocurrencies, including bitcoin, dash, zcash, and monero.

What do you think of the sentencing for Bitcoin Maven? Let us know in the comments section below.


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Less Than Half of ICOs Survive Four Months After Sale, Study Finds

Less Than Half of ICOs Survive Four Months After Sale, Study Finds

New academic research has concluded that more than 50 percent of crypto projects raising capital through ICOs do not make it through to the fifth month after the token sale. The study also suggests that investors get the best return on their money if they sell the coins within the first month of trading, while the safest strategy would be to part with the tokens on the very first day.

Also read: Decentralized Exchanges – New and Hacked, and Some Lost Coins

Majority of ICOs Live Less Than 120 Days

Less Than Half of ICOs Survive Four Months After Sale, Study FindsDespite data from two recent studies suggesting that investors are still bullish on ICOs (Initial Coin Offerings), a research conducted by Boston College academics reveals that most crypto startups relying on crowdfunding have a pretty short lifespan. According to the authors – Hugo Benedetti, assistant professor at the Carroll School of Management and finance PhD student Leonard Kostovetsky – less than half of all new ICOs survive more than four months after launch.

The two researchers based their study on analysis of the Twitter accounts maintained by the projects, taking into account the intensity of tweets after the coin offering. They estimated that the survival rate of the startups, 120 days after the end of the sale, was only 44.2%. The assumption is that companies that are inactive on social media in the fifth month most probably did not survive. The report covers almost 2,400 ICOs completed before May this year, and examines over 1,000 Twitter accounts.

The survival rate has been calculated as an average figure for three categories of ICOs, Business Insider reports. The first group consists of projects that have not reported raising any money and are not listed on exchanges. Startups that reported raising capital but didn’t list fell in the second category. And the third includes the ICOs that list their coins on trading platforms. The statistics show the following survival rates – 17%, 48%, and 83% for these groups, respectively. The share of the projects that become inactive right after their token sales, or the potential scams, is about 11%.

Listing Increases Chances of Survival

Based on these findings, the study concludes that the sustainability of an ICO depends on whether the company behind it is able to list its coin on a crypto exchange. Investors who have supported a project during the coin offering enjoy greatest returns when the coin is listed. The researchers gathered data for over 4,000 ICOs, which raised $12 billion since January, 2017, and found that the projects generated an average return of 179%, accrued over an average holding period of 16 days from the last day of the ICO.

Less Than Half of ICOs Survive Four Months After Sale, Study FindsAccording to Kostovetsky, selling the acquired coins on the first day of trading is the safest investment strategy, when it comes to ICOs. In any case, investors should sell their holdings within six months, he added. “What we find is that once you go beyond three months, at most six months, they don’t outperform other cryptocurrencies,” Kostovetsky told Bloomberg. “The strongest return is actually in the first month,” he emphasized.

Benedetti and Kostovetsky explain the spike in the prices of many tokens after their listing with the underpricing during the ICO, as often they are sold to investors at significantly discounted prices compared to the open market rates. Despite that, the researchers also found that the returns are declining over time as companies have started analyzing prior sales by similar platforms to better determine the expected demand and the price of their coins.

What do you think about the short life of ICO projects? Let us know in the comments section below.


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