
Interesting
- President Xi Says China Should ‘Seize Opportunity’ to Adopt Blockchain
- China’s Central Bank Introduces Certification System for Fintech Products
- China Announces Imminent Release of Digital Currency Targeting SWIFT and the US Dollar
- New IRS Guidance: How to Report Crypto Assets Accurately
- US Financial Watchdogs Join UK’s Global Financial Innovation Network
- The United Kingdom’s Tax, Payments And Customs Authority Has Updated Its Cryptocurrency Taxation Guidelines For Businesses And Individuals
- Central Banks Poised to Opt-in on Digital Currencies Within 5 Years — New IBM Report
- Canada Pushes to Regulate Crypto Adoption, Forgoing Volatile BTC Past
- Czech Central Bank Prepares Fine For Calling Physical Bitcoins ‘Coins’
- Belgian Regulator Blacklists Another 9 Crypto Websites Suspected of Fraud
- Argentina on the Edge: Central Bank Cracks Down on Bitcoin and US Dollar As US Expects $57 Billion IMF Agreement to Be Upheld
- Banks (Not Bitcoin) Move Boatloads of Cash From Russia to Venezuela to Thwart Crippling US Sanctions
- Crypto bank Sygnum Wins a License in Singapore to Offer Asset Management Services in the Country
Reports
Central Banks Poised to Opt in on Digital Currencies Within 5 Years — New IBM Report: A new report conducted by tech giant IBM and the Official Monetary and Financial Institutions Forum, a London-based forum for central banking, economic policy and public investment, analyzes findings from a survey of 23 central banks between July and September 2019. According to researchers, central banks are on track to issue retail digital currencies within the next five years as the digitization of money continues unabated and the use of cash declines.
Bankers are studying the concept of central bank digital currencies (CBDCs) because cash is on the decline in many developed countries. The report lists the substantial downside to handling cash: from complex logistics to high fees and administrative costs — especially when it comes to cross-border payments.
Central banks are also facing major competition. Tech companies are on the go, moving into the financial services space at a rapid pace. From Google to Apple to Square to Stripe to Revolut to Alibaba and Tencent, along with the threat of Facebook’s digital currency Libra, major corporations with top engineering talent and billion-sized user bases are showcasing how they can spin up new services for consumers.
Bitfinex Calls Itself ‘Victim of a Fraud’ in Response to Recent Arrest: Major global crypto exchange Bitfinex has called itself a “victim of a fraud” in response to the recent arrest of the president of Crypto Capital exchange.
Following the arrest report on Oct. 24, Cointelegraph received a response statement from Stuart Hoegner, Bitfinex’s general counsel, on Oct. 25. The statement seeks to establish the company as a “victim of fraud” and to deny potential accusations of illegal activity by Bitfinex.
In the statement, Bitfinex claimed that any allegation that Crypto Capital, which is a former Bitfinex’s payment processor, laundered any illicit funds upon request of Bitfinex or its customers is “categorically false.” The exchange wrote:
“This week’s developments do nothing to affect or otherwise deter Bitfinex’s claims to funds in Poland or anywhere else. We will continue to work to recover all funds for and on behalf of our stakeholders.”
Opinions
Regulators Hostile to Bitcoin Will Fall Out of Favor, Warns Samson Mow: Hostility to Bitcoin (BTC) from the global regulators is a double-edged sword that can hurt authorities if they lose their power, the Blockstream Chief Strategy Officer (CSO) warned. During a panel at a Liquid meetup at Litecoin Summit on Oct. 29, Blockstream CSO Samson Mow predicted that regulatory restrictions to Bitcoin could have both favorable and unfavorable consequences for the regulators themselves. The panel is a part of the event hosted by BTC technology firm Blockstream and BTSE exchange in Las Vegas, BTSE’s global marketing director Lina Seiche shared on Oct. 31.
Alongside Mow, the panel also featured Litecoin (LTC) founder Charlie Lee and industry Twitter personality WhalePanda.
During the discussion, Mow pointed out that Bitcoin really solves a lot of issues in the existing financial system such as inflation. He also predicted that global jurisdictions will eventually have to adopt it due to the multitude of benefits of the cryptocurrency.
However, they also might be hostile to it, Mow noted, urging that excessive hostility can lead to unfortunate consequences if regulators’ power is undermined by this borderless technology. He said:
“They might be hostile to it. But the thing is hostility to Bitcoin is a double-edged sword like if you are in power and you ban Bitcoin, and you fall out of power, then you’re screwed. […] People need to be careful when they are enforcing regulation and creating all this policy because you could be on the other side of the sword, down the road if you fall out of favor.”
US Lawmaker Crafting Bill to Boost Crypto Companies, Prevent SEC Overreach: US Representative Tom Emmer says he’s writing a bill designed to give crypto companies in the US regulatory certainty.
The Republican from Minnesota first announced the bill while questioning Facebook CEO Mark Zuckerberg on October 23rd at a hearing on the company’s digital asset Libra.
Emmer called out fellow lawmakers whom he says appear to have little understanding of blockchain technology. He says it’s paramount that entrepreneurs have assurances that they won’t be wrongly targeted if they follow the rules.
Lawyer Asks Whether KYC Is Worth Exposing Users to Hacking and ID Theft: In the aftermath of the recent BitMEX data leak, lawyer and general counsel at decentralized finance startup Compound Finance Jake Chervinsky raised the question of whether exposing the public to data risks that Know Your Client (KYC) requirements entail is worth it.
In a tweet posted on Nov. 1, Chervinsky calls KYC requirements “are a double-edged sword.” He explained that KYC helps law enforcement to track illegal transactions but also exposes the public to hacking, phishing and identity theft. In the end, Chervinsky raised the question:
US Congressman: Default Reaction to Bitcoin, Blockchain Must Be ‘Yes’: U.S. Congressman Patrick McHenry, who represents North Carolina’s 10th District, says he wants regulators’ default reaction to crypto innovation to be “yes.” The Congressman — who goes by the moniker of “Mr. Fintech” on Capitol Hill — made his remarks during an interview for Laura Shin’s Unchained podcast, published on Oct. 22.
McHenry related his observations of the cryptocurrency space’s development, underscoring that the Bitcoin’s enormous value had become swiftly apparent. He soon recognized, he said, that regulators’ responses would struggle to keep pace with the wealth of new ideas:
“My conclusion was, any action by the government — really up until the last 2, 3 years — would be negative, would impair innovation and would restrict the development of cryptocurrencies and their enormous value, now and in the future.”
FATF’s Regulations to Push Criminals to Privacy Coins: CipherTrace CEO: The Financial Action Task Force’s (FATF) crypto regulations will trigger a shift of criminal activity from Bitcoin (BTC) to privacy coins, it has been claimed.
David Jevans, CEO of major crypto transaction tracking firm CipherTrace, shared his remarks about criminal use of cryptocurrencies at a panel held by blockchain advocacy group, the Chamber of Digital Commerce, on Oct. 21.
During the panel, Jevans claimed that well-known cryptocurrencies such as Bitcoin and Ether (ETH) are currently the most popular among criminal actors to date due to their good brand name and the ease of purchasing and cashing out these coins. Jevans emphasized that 95% of what CipherTrace identifies as criminal activity is really using more popular cryptos like Bitcoin and Ether.
According to the CipherTrace executive, regulators’ deanonymization efforts will only make the exchange of pseudonymous coins like BTC more like banking. Jevans said:
“As we get more of this deanonymization and it becomes more like banking, I think an unintended consequence will be there will be concerted effort to use these privacy-enhanced coins.”
Two Pro-Crypto US Congressmen Note Bitcoin White Paper’s 11th Birthday: U.S. Representatives Patrick McHenry (R-NC) and Warren Davidson (R-OH), have encouraged Bitcoin (BTC)-powered innovation on the Bitcoin white paper’s 11th birthday.
U.S. congressman McHenry, who represents North Carolina’s 10th District, urged that American authorities should not stifle the new technology in a tweet on Oct. 31.
According to the official, policymakers should facilitate the development of new technologies. McHenry reiterated his previous bullish sentiments about Bitcoin, stating:
Rep. Warren Davidson: You Have to Defend Money to Defend Freedom: In an interview with Cointelegraph on Friday, Oct. 18, United States Representative Warren Davidson gave his thoughts on the Securities Exchange Commission’s (SEC) flawed approach to regulating digital assets as well as Mark Zuckerberg’s upcoming Oct. 23 testimony before the House Financial Services Committee.
Congressman Davidson (R-OH) is a figure familiar to many in the crypto world for his role in authoring the Token Taxonomy Act, as well as his general optimism about the role of blockchain in the U.S.
While discussing regulating cryptocurrencies at large as opposed to Libra, Davidson was highly precise in his taxonomic definitions:
“We use the term ‘cryptocurrencies’ to refer to everything in the crypto space, which is sloppy language. What we need to focus on is, what is Libra’s goal? Its goal is to be a currency. Let’s not conflate that with what other things in the space want to do and how we regulate them. How we look at Libra would be to apply, in my view, the Token Taxonomy litmus test.”
Bitcoin Bull Mike Novogratz: China Will ‘Eat Our Lunch’ If US Doesn’t Back Crypto and Blockchain Technology: Mike Novogratz, the CEO and chairman of Galaxy Digital, thinks China could be getting ahead of the United States in terms of embracing the crypto and the fintech revolution.
In a tweet, Novogratz shows a Walgreens in Las Vegas that’s accepting China’s AliPay.
Ripple CEO Brad Garlinghouse Says Mark Zuckerberg Late to Crypto Party As ‘Trust Deficit’ Holds Social Media Giant Back: Ripple CEO Brad Garlinghouse, who recently commented that he’s worried regulators will impede the crypto space because of their challenges with and distrust of Facebook, Mark Zuckerberg and the Libra project, says Zuckerberg’s testimony on the Hill today exposes his trust deficit.
While US policymakers both berate and praise Zuckerberg during his latest appearance before the US House of Representatives Committee on Financial Services, Garlinghouse is attempting to clarify that the concepts brought forth by Facebook’s project Libra are not new.
In a new interview on Fox News, Garlinghouse says while he can agree with some of Zuckerberg’s statements, he disagrees on the novelty of Libra.
“The difference is the technologies he’s talking about are already on the market today. Ripple’s a US company that’s been deploying these technologies for years. We have over 200 customers globally.”
Silk Road Prosecutor: 99.9% of Fiat Money Laundering Goes Unprosecuted: Kathryn Haun — a general partner at Andreesen Horowitz and the Justice Department’s prosecutor for the infamous Silk Road case — — says that the fiat-dominated financial system is inept at tackling the very thing it purports to worry about when it comes to crypto.
In the traditional financial sector today, “99.9% of all money laundering crimes go unprosecuted,” she told anchor Kyle Bass, during an interview for Real Vision Classics on Oct. 22.
As someone whose career involved the takedown of one of the highest-profile criminal rackets in crypto industry history and established the first-ever crypto task force for the U.S. government, Haun is no stranger to regulators’ concerns about crypto and money laundering risks.
Yet she stressed the arguable absurdity of the defenders of the existing system emphasizing concerns over an issue that current approaches have proved to be wholly inept at preventing:
“Our current system is doing a pretty terrible job of it, I’d say. Let me tell you what I mean. 99.9% of all money laundering crimes go unprosecuted. I testified before the U.S. Senate about this, and the person who cited that statistic, other than Senator Chuck Grasley, was the ex-Treasury official. And I thought that can’t be right. But I researched it and indeed it’s true.”
Privacy Vs. Security, Do Authorities Monitor Every Crypto Transaction?: Tracking cryptocurrency transactions is getting easier for law enforcement agencies. On Oct. 16, Cointelegraph reported on how authorities in the United States successfully shut down an international child pornography site. To identify the criminals, the investigators used tools developed by analytic company Chainalysis, which helped to track the Bitcoin (BTC) wallets, used by the criminals to receive payments from customers. As authorities find more and more ways to track cryptocurrencies, criminals use new techniques, and many sites remain beyond government control. Who will win this battle and can the fight against financial crimes grow into total control over users?
Can Libra and Other Crypto Find a Ground to Navigate Regulation? on CoinTelegraph.
Blockchain Lobbying: Interests Fragmenting as Crypto Field Expands on CoinTelegraph.
The Scoop sits down with 2020 Congressional candidate and blockchain enthusiast Agatha Bacelar: episode 26 of The Scoop, The Block’s flagship podcast.
Agatha Bacelar is a 27-year-old Brazilian-American running for Congress in California’s 12th District, a seat currently held by House Speaker Nancy Pelosi. Bacelar is not your typical Congressional candidate. With a degree from Stanford University and a professional background in blockchain, Bacelar is aiming to make tech regulation an important conversation in politics. In this conversation she discusses how she got into politics, her time working at Democracy Earth, her stance on universal basic income, and why now is the time to run against the most powerful Democrat in the country.
USA
New IRS Guidance: How to Report Crypto Assets Accurately:
The United States Internal Revenue Service (IRS) is continuing to focus its efforts in cryptocurrency. After sending a recent enforcement letter, the IRS has released two new pieces of guidance for taxpayers who engage in transactions involving digital currency.
The new guidance includes Revenue Ruling 2019–24 and FAQs, including guidance for using the specific identification method. Additionally, the IRS has published a new draft for form 1040 Schedule 1, including a broad declaration regarding crypto holdings or trade.
Here is a breakdown of these publications.
Revenue Ruling 2019–24: airdrops and hard forks:
So, what are airdrops and hard forks, and what do they mean for the tax obligations of crypto holders?
In short, an airdrop occurs when a company distributes its tokens to a user’s wallet, free of charge, in order to raise funds, and in certain other cases, such as after hard forks. A hard fork is when nodes of the newest version of a blockchain creates a permanent separation from the previous version, creating a “fork” in which one path follows the new and upgraded blockchain, while the other follows the old path.
In Bitcoin (BTC), a hard fork is the result of changes in the blockchain rules, sharing a transaction history with Bitcoin up to a certain time and date. The most famous hard fork occurred in August 2017, when some Bitcoin developers and users decided to initiate a hard fork known as Bitcoin Cash (BCH).
The new IRS guidelines distinguish between hard forks and airdrops, stating that not every hard fork should be treated as an airdrop. Those who received new currencies in a hard fork are considered as having received them through airdrop and should report it to the IRS as gross income.
The new ruling also acknowledges the possibility that a taxpayer did not receive an airdrop, detailing that if a taxpayer receives new currency from an airdrop into a wallet managed by an exchange that does not support the airdropped currency, the taxpayer is off the hook. But, if the exchange later ends up supporting that airdropped crypto, the taxpayer is considered to have received the new currency at that time and is therefore liable to taxation.
While the IRS has made significant steps in regulating crypto, the new guidance raises questions about the request to tax airdrops when the crypto holder receives them as gross income, unlike regular crypto which it’s taxable events occur only on selling or exchanging.
Frequently asked questions:
Back in 2014, the IRS issued Notice 2014–21, which describes how existing general tax principles apply to transactions using digital currency. This notice contained 16 Q&As, which have now been amended and added to the 2019 ruling, resulting in a whopping 43 questions and answers that cover the entirety of crypto taxation issues.
These are the main issues you should know:
1. Understand what Fair Market Value is:
Fair Market Value (FMV) is typically defined as the selling price for an item to which a buyer and seller can agree.
Cryptocurrency value is determined by the cryptocurrency exchange and recorded in U.S. dollars. However, when it comes to peer-to-peer (P2P) transactions or other transactions not facilitated by an exchange, the FMV is determined according to the date and time at which the transaction was recorded on the blockchain.
2. Determine the cost basis:
Cost basis is the original value of an asset for tax purposes. For digital currencies, the cost basis is the amount you spent to acquire the digital currency, including fees, brokerage commissions from exchanges, and other acquisition costs in U.S. dollars.
Your adjusted basis is your basis increased by certain expenditures and decreased by certain deductions or credits based on marital status, income, etc. To calculate an accurate cost basis, you must first determine which units of currency were sold, exchanged, or disposed of and match the buying cost for every unit sold.
3. Choose the calculation method carefully:
Here is the big news: For the first time, the IRS has clarified the preferable method of calculation for cryptocurrency, advising to use the “specific identification” method. This means identifying the exact unspent output Bitcoin transaction (UTXO) you have sold out of all the Bitcoin you had in your wallets, and then calculating your tax liability based on the sale of the actual Bitcoin UTXO.
If you are not using it already, you should use the first in, first out (FIFO) method. This method does not take real-time user activity into consideration. Basically, to calculate in the FIFO method, you need to make a list of all purchases and another list of all sales. Then, to do the matching, take the first item in the purchase list and calculate the tax results as if you sold it at the same price and on the same date as the first sale in the sales list. FIFO results can cause overtaxation, especially if you bought your first Bitcoins in the early years.
To get a complete and accurate report, taxpayers are encouraged to use the specific identification method. This method is used to track individual units of virtual currency. It is applicable only when individual units can be clearly identified to provide a complete report of crypto-asset movements, including addresses, wallets, exchanges, etc.
Taxpayers can identify specific units by unique digital identifiers such as private and public keys and addresses, or with records showing the transaction information for all units of a specific digital currency (such as Bitcoin) held in a particular account, wallet or address. Specific identification must exhibit the date and time each unit was acquired, the cost basis and FMV of each unit at the time of acquisition, as well as the date, time, FMV and sale value or price of each unit when it was sold, exchanged or disposed of.
Related: Crypto IRS Audits: Hire Professionals or Do it Yourself?
4. Save all your documentation:
When compiling a report and filling out the appropriate documentation, taxpayers must report all income, gains and losses incurred by all taxable transactions, regardless of the amount. IRS codes and requirements are to maintain thorough documentation on receipts, sales and exchanges in order to establish validity on their tax returns.
US Financial Watchdogs Join UK’s Global Financial Innovation Network: The Global Financial Innovation Network (GFIN) — an alliance of 50 organizations aimed at supporting financial innovation — has onboarded an array of United States regulatory agencies.
According to an Oct. 24 press release published by the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC) and the SEC itself have joined the GFIN.
The watchdogs’ participation in the initiative is geared to further promoting their expertise both in the U.S. and abroad, helping financial regulators represent the interests and needs of the country and its financial service stakeholders. The release specifies:
“By promoting knowledge-sharing on innovation in financial services, U.S. members of GFIN will seek to advance financial and market integrity, consumer and investor protection, financial inclusion, competition, and financial stability.”
US Treasury Agrees on Need to Observe Libra After Congressman’s Request: The United States Department of the Treasury has agreed to the need for an investigation into Facebook’s forthcoming Libra stablecoin following a letter from Representative Emanuel Cleaver.
Per a press release published on Congressman Cleaver’s website on Oct. 22, the Treasury provided an affirmative response to Cleaver’s appeal to examine Libra and its corresponding wallet Calibra for potential systemic risk.
Cleaver sent the letter to Facebook, Calibra, the Financial Stability Oversight Council (FSOC), and the Office of Financial Research in August. In September, Facebook stated that it would postpone the Libra launch until U.S. regulators approve it.
NY Court Orders Veritaseum to Pay Back $8 Million From Illegal ICO: The CEO of Delaware-registered blockchain firm Veritaseum LLC and New York-registered Veritaseum Inc., Reggie Middleton, was ordered to pay $8.4 million in disgorgement, according to a new court order. Additionally, Middleton is liable for a civil penalty of $1 million, fintech publication FinanceFeeds reported on Nov. 1, citing a court order issued on Oct. 31.
According to the report, a judge at the New York Eastern District Court has approved a motion for a consent judgment in a securities fraud case against several defendants involved in Veritaseum. Specifically, the defendants are jointly liable for disgorgement of $7,891,600, which represents a part of illegally earned profits as well as prejudgment interest amount of $582,535.
Moreover, the report states that the defendants will not be allowed to engage in any offering of digital security, in accordance with the court order.
Securities Company Fined for Enticing Americans to Buy Bitcoin (BTC) Products: US regulators fined Switzerland-based XBT Corp. after the company allegedly offered unregistered security-based Bitcoin swaps and failed to register itself as a futures merchant.
Though it did not admit or deny the accusations, XBT, also known as First Global Credit, consented to a cease-and-desist order and agreed to pay the Securities and Exchange Commission (SEC) a $100,000 penalty, as well as repay $31,687 in ill-gotten gains.
Both the SEC and the Commodity Futures Trading Commission (CFTC) issued press releases describing XBT’s violations.
The US regulators claim XBT targeted Americans and offered them “Bitcoin Asset Linked Notes,” allowing investors to participate in the price movements of securities, including those listed on US securities exchanges, without owning them — an offering US regulations deem a security-based swap. As such, they are subject to registration and exchange requirements enacted by the Dodd-Frank Act, which XBT did not adhere to.
US CFTC Turns Its Fintech Lab Into an Independent Office in D.C.: The United States Commodity Futures Trading Commission (CFTC) gives its fintech research unit LabCFTC status as an independent operating office.
Established by the CFTC in 2017 with the goal of engaging with the fintech community, LabCFTC will now be reporting directly to the authority’s chairman Heath Tarbert. He announced the news at the CFTC’s annual conference Fintech Forward on Oct. 24.
In the announcement, Tarbert noted that engagement with blockchain and digital assets are part of LabCFTC’s commitment to representing a beacon in the emerging world of fintech. He said:
“Blockchain, digital assets, and other developments hold great promise for our economy. Now is the time for LabCFTC to play an even greater role as we work to develop and write the rules for these transformative new products. That reality requires engagement at the highest levels within the CFTC, which is why I am elevating LabCFTC to be an independent operating office of the agency and a direct report to me.”
Reggie Middleton Reaches $9.5 Million SEC Settlement Over ICO Fraud: The U.S. Securities and Exchange Commission (SEC) said it has reached a settlement with Reggie Middleton, organizer of the fraught $14.8 million Veritaseum (VERI) initial coin offering (ICO).
In a filing with the New York Eastern District Court, dated Oct. 31 and published today, Middleton agreed to the consent decree of the final judgment, without having to admit or deny the allegations, while waiving any right to appeal.
The settlement came three weeks after the court announced that it had entered into a discussion with Middleton to settle the case.
The defendant agreed to pay approximately $9.5 million to settle the case.
According to the SEC filing, Middleton has the obligation to pay disgorgement and prejudgment interest of $8.47 million, plus a civil penalty of $1 million.
Harbor Now Has Both Broker-Dealer and Transfer Agent Licenses in the US: Security token startup Harbor has secured a transfer agent license from the U.S. Securities and Exchange Commission (SEC).
A month after receiving a broker-dealer license from the Financial Industry Regulatory Authority (FINRA), Harbor was granted the license Thursday to better ensure interest and dividend payments to investors. The firm is the first blockchain company to be granted both licenses.
Transfer agents act as liaisons between firms, investors and regulatory bodies by keeping track of investment certificates. If a wallet contained security tokens is lost, for example, the transfer agent can help mint new tokens to replace the lost securities. By acquiring the license, Harbor has the green light to service higher class firms, investors, and offerings.
Europe
British Tax Authority Updates Cryptocurrency Guidelines, Says It Is Not Money: The United Kingdom’s tax, payments and customs authority, Her Majesty’s Revenue and Customs (HMRC), has updated its cryptocurrency taxation guidelines for businesses and individuals.
On Nov. 1, the U.K. government tax agency, which manages taxes alongside other financial policies, released tax guidance updates that further clarify its stance on how businesses and individuals involved with cryptocurrency will be taxed.
UK Gov’t: FCA Will Make Final Decision on Banning Crypto Derivatives: The government of the United Kingdom has stressed that is up to regulators, not the executive, to decide whether to press ahead with a proposed ban on certain crypto derivatives for retail investors.
Finance Feeds reports that on Oct. 21, the Economic Secretary to the Treasury John Glen responded to a series of questions about developments in the U.K.’s approach to crypto-assets, including the U.K. Financial Conduct Authority’s ongoing consideration of the ban.
Glen refrained from giving a determinate answer, underscoring that:
“The final decision […] is a matter for the Financial Conduct Authority (FCA), which is operationally independent from government.”
21 Crypto Exchanges Ask for License From Malta’s Financial Watchdog: The Malta Financial Services Authority (MFSA) has received queries from 21 cryptocurrency exchanges seeking licensure under the Virtual Financial Assets (VFA) Act.
According to an official announcement on Nov. 1, the 21 exchanges are among the 34 prospective VFA service providers that sent their letters of intent to the Maltese financial regulator in order to acquire a VFA Services Licence.
The MFSA clarified that, until Oct. 31, crypto providers have been operating under the transitory provisions specified in Article 62 of the VFA Act. In order to continue their operations in or from Malta, those firms will be now required to apply for authorization with the MFSA.
Belgian Regulator Blacklists Another 9 Crypto Websites Suspected of Fraud: Belgium’s Financial Services and Markets Authority (FSMA) has made an additional update to its blacklist of cryptocurrency-related websites associated with fraud.
On Oct. 29, Belgium’s financial watchdog updated its list of cryptocurrency trading platforms for which it has detected indications of fraud, by adding nine new suspect sites, bringing the total of suspected crypto scams to 131.
The financial authority said that it continued to receive new complaints from consumers who made crypto investments on those trading platforms, adding that cryptocurrency fraud continues to find new victims in Belgium, despite prior warnings.
The FSMA has issued previous warnings to Belgian crypto investors to be wary of companies that claim to hold authorizations from supervisory authorities, adding:
“This is a very frequently used technique. However, these are often cases of identity theft. Feel free to ask the FSMA to confirm the information you have received.”
Czech Central Bank Prepares Fine For Calling Physical Bitcoins ‘Coins’: Bitcoin (BTC) friendly Czech crypto-anarchist movement Paralelní Polis has received a warning from the country’s central bank for issuing its own coins.
As representatives reported on Twitter on Nov. 3, the Czech National Bank (CNB) has objected to Paralelní Polis using the term “coin” to describe commemorative silver tokens it is currently minting.
In 2018, a new law appeared giving sole rights to the word “coin” to the CNB.
“Czech National Bank sent us an official threat that if we continue to use the word ‘Mince’ (‘Coin’) on our site, we will be fined. The bank claims to have a #Monopoly on the word,” the Twitter post reads.
Speaking to local media outlet Seznam Zprávy, Martin Leskovjan, the group’s chairman, described the situation as “completely nonsensical.”
“We’re calling the coin a coin,” he summarized.
Five European Union Countries Team Up to Block Libra: Five European Union member countries have reportedly teamed up to prevent the issuance of Facebook’s stablecoin Libra.
Following a series of private meetings in October, France is reportedly leading the anti-Libra effort with Germany, Italy, Spain and the Netherlands, political news publication Politico Europe reports on Oct. 30.
Citing sources familiar with the matter, Politico states that the countries’ deputy finance ministers have presented their unified position against Libra to other EU ministers at a private meeting on Oct. 28 in Brussels.
According to the report, the group intends to prevent Libra from launching in Europe as well as increase pressure on Facebook and other members of the Libra Foundation to give up on the project. Eurozone diplomats and European Commission (EC) officials reportedly confirmed to Politico that the coalition is encouraging EU governments to consider banning Libra altogether.
Asia
China’s President Xi Pushes Fast Track for Blockchain Development: Bitcoin’s latest rise, coincides with recent statements made by China’s President Xi Jinping that are bullish on blockchain, the technology that underlies Bitcoin.
President Xi says the country must “seize the opportunity” to become a global leader when it comes to adopting blockchain technology.
Xi, whose comments came as part of the 18th collective study of the Political Bureau of the Central Committee on October 24 in Beijing, notes that blockchain technology has a wide range of use cases within China. He states that the distributed ledger may be used to enhance processes related to financing businesses, improving mass transit and alleviating poverty.
According to Xi,
“We must take the blockchain as an important breakthrough for independent innovation of core technologies. [We must] clarify the main direction, increase investment, focus on a number of key core technologies, and accelerate the development of blockchain technology and industrial innovation.”
China’s Central Bank Introduces Certification System for Fintech Products: China’s central bank, the People’s Bank of China (PBoC), will use a new system to certify 11 types of fintech hardware and software products relating to digital payments.
On Oct. 29, the PBoC alongside China’s market regulator, the State Administration for Market Regulation (SAMR), jointly released a set of documents for the new nationwide Certification of Fintech Products (CFP) system. The documents include definitions of fintech products that require certification as well as rules for its proceedings.
The listed products include embedded application software, cloud computing platforms, user front-end software, security carriers and chips, as well as point of sale terminals and ATMs.
In the document titled “Fintech Product Certification Rules,” the PBoC and SAMR stated that, in order to obtain a CFP certificate from the central bank, applicants will have to pass a prototype examination as well as on-site inspections.
The certificate is valid for 3 years and requires a renewal after the expiration date, the authorities noted. During the validity period, CFP bearers will have to pass random inspections at any stage of the production process, the document says.
Additionally, CFP carriers will be prohibited from using certification for advertising purposes, while incorporation of the certificate to their logo is authorized.
China to Be First to Launch Digital Currency, Says Think Tank Exec: An executive at a Chinese economics think tank has said that China’s central bank will be the first to launch a digital currency successfully.
According to Chinese tech news outlet Pandaily, Huang Qifan, vice chairman of China Center for International Economic Exchanges (CCIEE), confidently believes that China’s central bank will win the race for the first central bank digital currency (CBDC).
Qifan’s remarks came at the Inaugural Bund Financial Summit of 2019 in Shanghai. Per the report, Qifan was dissatisfied with current dependence on the United States’ SWIFT and CHIPS payments systems, on which cross-border exchange of the renminbi currently depends. His complaints were on the basis of both U.S. sanctioning using the platforms and their technical limitations. He said:
“SWIFT is an outdated, inefficient and costly payment system. Since the establishment of SWIFT 46 years ago, the technology has been updated slowly and the efficiency has been relatively low.”
China: Forex Regulator Warns Against Illegal Crypto Cross-Border Flows: China’s foreign exchange regulator has warned that emerging markets need to muscle in on cryptocurrency-enabled illegal cross-border capital flows.
Sun Tianqi, the chief accountant of China’s State Administration of Foreign Exchange (SAFE), made the remarks at a forum today in Shanghai, according to an Oct. 28 report from Reuters.
Tianqi called for global regulators to cooperate on countering illegitimate cross-border transactions, underscoring the risks that fintech innovation poses to foreign exchange control.
He revealed that the Chinese state had closed over 2,000 forex trading platforms, yet reportedly did not elaborate further.
Back in November, Tianqui had called for Facebook’s Libra to be classed as a foreign currency and integrated into the framework of China’s foreign exchange management. Failing this, the asset should be prohibited, he said.
As reported, SAFE has also this week advocated for the application of blockchain and AI in cross border financing, with particular attention to risk and macro-prudential management.
China’s ‘Xi Jinping App’ Reportedly Recommends Course on Blockchain, Bitcoin, Ethereum and Crypto: China’s most popular app, Xuexi Qiangguo, is promoting a course on blockchain technology that contains lessons on Bitcoin, Ethereum and cryptocurrency, reports crypto news source cnLedger.
The app has already spawned a number of monikers since its release on January 1, 2019 by China’s tech giant Alibaba.
Billed as a “fun educational tool”, the app is also called “Study Xi, Strong Nation”, “Study the Powerful Nation” and the “Xi Ping Thought” app for espousing the views of President Xi Ping and China’s Communist Party.
Swiss Crypto Bank Gets Approved for Singapore Banking License: Swiss-based cryptocurrency bank Sygnum has received the go-ahead to offer banking services in Singapore.
In a blog post on Oct. 31, Sygnum, which gained a Swiss banking license in August this year, can now proceed with its first product for the Singapore market.
Sygnum was the first Swiss company to win the title of cryptocurrency bank and will target accredited investors and institutions with a multi-manager fund, which will also debut in its home jurisdiction.
Long on the cards, the Singapore documentation comes in the form of a capital markets services (CMS) license from the Monetary Authority of Singapore (MAS), the Asian city state’s de facto central bank.
Sygnum’s head of asset management, Stefan Mueller, commented in the press release:
“The CMS license is an important milestone to establishing our asset management arm, leveraging the vibrant financial environment in Singapore. This is complementary to our banking services in Switzerland and will also benefit our Swiss institutional and private qualified investor clients.”
Huobi Japan Raises $4.6M From FPG to Expand Crypto Trading Business: Licensed crypto exchange Huobi Japan has raised 5 million yen ($4.6 million) from Financial Products Group (FPG), a financial instruments business operator. The development was revealed in a press release shared with Cointelegraph on Oct. 25.
Huobi Japan is a wholly-owned subsidiary of major Singapore-based crypto exchange Huobi, which serves traders across over 130 countries.
The platform launched this January as a fully compliant entity after a merger with BitTrade — one of only 16 crypto exchanges at the time to have secured a license under the aegis of Japan’s national financial regulator, the Financial Services Agency (FSA).
According to the announcement, FPG and Huobi Japan will jointly focus on providing support for new financial assets and payment methods.
In addition, FPG Group says it anticipates a possible future collaboration with Huobi Japan to further the digitization of Japan’s securities market by combining its expertise as a financial instruments business operator with Huobi’s blockchain technology.
Rest of the World
Canada Pushes to Regulate Crypto Adoption, Forgoing Volatile BTC Past: Recently, Canada’s central bank has been leading working groups with global partners exploring a blockchain future. Their crypto presence has soared with Ernst & Young’s announcement that it is using Toronto to test its public government expenditure blockchain. But what is the cryptocurrency landscape currently like in Canada?
The history of crypto in Canada may seem as volatile as a token with a small market cap, yet mainstream use and adoption have been on a consistent incline since 2013, when Canadians started pushing mainstream adoption. Now, the Canadian government is leading working groups. What else has the country been up to in the blockchain space?
The first thing that comes to everyone’s mind when it comes to the Great White North is that the founder of Ethereum, Vitalik Buterin, grew up in Canada — but Etherum isn’t all the country has provided to the crypto space. This article covers some more notable stories from Canada’s blockchain history.
Canadian Fund Manager to List Bitcoin Fund on Major Stock Exchange: Canadian investment fund manager 3iQ received initial approval on its long road to launch a closed-end bitcoin fund on either the Toronto Stock Exchange or the TSX Venture Exchange later this quarter.
The firm said that it received a favorable ruling before a panel of the Ontario Securities Commission (OSC) for the Bitcoin Fund, noting the commission moved to direct the OSC Director to issue a receipt for a final prospectus.
“We have addressed the questions of pricing, custody, audit, and public interest issues in a regulated investment fund. We intend to refile the prospectus as soon as possible,” CEO Fred Pye said in a statement.
Argentina Imposes Further Capital Controls; Sharply Cuts USD Buying Limits to $200 a Month: The central bank of Argentina has further imposed restrictions on U.S. dollar (USD) purchases to “maintain exchange stability and protect reserves.”
Individual Argentinians will now be limited to USD purchases of $200 per month, a steep drop from the previous $10,000 per-month limit, according to a statement published by the central bank on Sunday. Any amount beyond the new limit will require special permission.
The $200 limit is for individuals with a bank account, while for cash purchases and for non-residents, the limit is $100. These limits are not cumulative, per the statement.
“People who bought more than USD 200 in October and less than USD 10,000 will not be penalized,” said the central bank.
Banks (Not Bitcoin) Move Boatloads of Cash From Russia to Venezuela to Thwart Crippling US Sanctions: New documents reveal that Russia has shipped $315 million in cash to Venezuela over the course of a year in an apparent effort to keep Nicolás Maduro’s embattled government afloat.
Bloomberg reports that US dollars and euro notes were sent from Moscow to Caracas in six separate shipments from May of 2018 to April of 2019. According to the report, the data was obtained by ImportGenius, a Scottsdale-based business intelligence provider that compiles Russian customs records secured through private sources. The cash was sent by plane.
The cost of moving the $315 million on six round-trip flights, totaling approximately 74,020 miles (119,124 kilometers), would include fuel costs, personnel and other related expenses as well as flight time — roughly 13 hours one way — estimated at 156 hours for 12 trips. At best, if the transactions only involved one-way flights, that would cut down the cash transfers to 78 hours.
Huobi Cloud to Offer White-Label Exchange Services in Middle East, Africa: Huobi Cloud, part of the crypto exchange Huobi Group, has announced its plan to provide more local financial institutions with white-label exchange services based on cloud technology in the Middle East and Africa.
Existing institutions include the Nigeria-based SaBi exchange, with about $100,000 worth of daily crypto trading volume, and the South African exchange HIZA, which is expected to go live in the fourth quarter.
Mohit Davar, EMEA regional president of Huobi Group, described to CoinDesk how these institutions are looking to leverage an international platform’s security resources and deeper liquidity, otherwise difficult to recreate on their own.
Huobi Cloud has been talking with potential partner companies across 10 countries in the Middle East and Africa, hoping to launch two or three of them this year, according to Davar.
Mahatma Gandhi Would Oppose India’s Ban on Cryptocurrency: India’s finance minister and reserve bank governor both cautioned India against embracing cryptocurrency this week. Their reasoning? It’s what authorities in other countries are telling them. But the father of modern India, Mahatma Gandhi, would oppose India’s ban on cryptocurrencies like bitcoin if he were alive today. This article covers three reasons why.
How Lebanon’s Economic Crisis Highlights Bitcoin’s Limitations on CoinDesk.
