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NEM Foundation launches Melbourne blockchain hub

Melbourne's innovation precinct is set to get a new fixture.

The NEM Foundation is eyeing up Australia, and it likes what it sees. It's so far enjoyed solid grassroots support in Australia, as well as a series of successful partnerships with Australian firms like TravelByBit. It has also partnered with New Zealand companies to help unlock the benefits of blockchain technology through grants and other contributions.

It's now setting up shop in Melbourne in the form of a new blockchain hub where dedicated NEM representatives will be present to engage with members of the public, and the community, to educate and communicate the NEM Foundation's vision of blockchain technology and cryptocurrency.

Brass tacks

But like other startup hubs, it will also be a business incubator and a support centre for NEM-based blockchain startups, as well as hosting a range of blockchain events and educational programs.

"The launch of the NEM Blockchain Hub in Melbourne is a strong sign of our commitment towards supporting innovation in Australia and the world," said Jian Chan, NEM Foundation lead in Australia and New Zealand.

The NEM Foundation has enjoyed rapid expansion so far, part of which might be due to the presence of these kinds of hubs in other countries – and now Australia.

"Having first launched our Australian operations at the FinTech Australia Intersekt Festival last year, NEM is now present in over 40 countries," Chan adds.

LaunchVic, the startup support program established by the Victorian government in 2016, was also keen to welcome the new addition to the city's blockchain ecosystem.

"Blockchain is a fast-growing and evolving technology, and LaunchVic is pleased to welcome NEM.io Foundation to the Victorian Innovation Hub," said Kate Cornick, CEO of LaunchVic. "This is set to become a multi-sector co-working facility that celebrates collaboration and innovation for more than 360 of Australia’s top startups, accelerators and incubators."

Both the NEM Blockchain Hub and Blockchain Centre will also be a part of Stone & Chalk, one of Australia's fintech fixtures, which expanded from Sydney to Melbourne last year. Together they'll form a new element in the "innovation precinct" in the heart of Melbourne's CBD.

"We are excited to include NEM as part of the Stone & Chalk community," said Alan Tsen, general manager for Stone & Chalk. "Blockchain is an area of growth and we look forward to working together on initiatives to support the ecosystem here."

Significantly, it might also add a dose of diversity to the blockchain scene beyond awareness of bitcoin and Ethereum, and be a further example of a platform-level cryptocurrency, showing how they differ from each other.

"There is a demand within our community to understand the difference between various blockchain protocols and we are glad that we are able to work with NEM on this," notes Karen Cohen, general manager of the Blockchain Centre.

In addition to the Australian and New Zealand firms already with it, NEM says there are more Australian partners in the pipeline, as well as plans for some NEM-based ICOs in the future.

https://www.finder.com.au/nem-foundation-launches-melbourne-blockchain-hub

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Can EOS fix some of the world’s oldest problems?

Spoiler: Absolutely not. But its struggles might still be educational.

EOS is a democratic blockchain. It uses a system of 21 elected block producers who reap the highest rewards, backed up by dozens more block producers who are also elected and get smaller rewards. The idea is to create a faster network by using an agile handful of nodes, while still having some backup nodes and enough decentralisation to ensure that the network is tamper-proof and immutable.

Everyone has some kind of democratic power in EOS, but because political power is directly correlated to wealth ("1 EOS = 1 vote") and the most powerful accrue the most wealth (being a top 21 block producer pays very well), it's much closer to an oligarchy by design.

If other blockchains are food for thought on how to program a self-sustaining society and what kind of governance model you'd have in a perfect world, then EOS might be food for thought on how to actually manage – and perhaps even fix – a corrupt, oligarchic, false democracy. So its governance struggles might be quite applicable to other oligarchic pseudo-democratic governance systems, such as the one used by the United States.

Other blockchain systems are dealing with brand new problems, but by pursuing a human-driven democratic governance model, EOS needs to tackle some of the world's oldest problems. Good luck.

The rules of the game

EOS's current problem is finding a way of restoring power to the people in a democratic way and putting the best and most honest block producers in power, even as the vast majority of wealth and power is consolidated in the hands of a small and increasingly wealthy cabal. Ideally, this will be accomplished without a violent revolution.

The poor downtrodden EOS citizens have limited but potentially quite powerful tools at their disposal, including the following:

  • The ability to rally behind a unifying cause in large enough numbers to make a difference.
  • The ability to propose any kind of change they want as many times as they want, even if it won't be accepted.
  • The ability to influence sympathetic block producers.

Their goal is to unseat the block producers and push through new resolutions that will help EOS in the long run.

On the oligarch team, the goal is generally to create as much wealth as possible, which is generally done by maintaining a position as a block producer.

The playing field

EOS is transparently centralised under a situation where vote buying is the norm, and the block producers are locked into a system of voting for themselves and each other for the purpose of maintaining power.

juicy crypto words

In this case, the oligarchs are a combination of exchanges and whales.

"By my estimation, there are about 15 to 20 EOS accounts ("entities" is probably a better word) that actually move the needle when it comes to BP election. Collectively, these 15 to 20 entities make up about 50% (or 125 million) of the actual votes currently being cast on the network. I’ve done quite a bit of research around this," says EOS enthusiast BlockchainKid.

The influence of these entities is quite clear, with the rich and powerful getting richer and more powerful through a combination of vote-buying arrangements and simply voting for themselves.

So, how is the EOS citizenry trying to solve this problem?

Constitutional amendments

When EOS first launched, it encountered historically familiar problems. People were abusing the powers that be to solve their own squabbles and using the governance powers granted by the EOS system for transparent personal gain.

Following these governance teething pains, the EOS constitution was amended to limit the power of its elected officials and hopefully to keep them more focused on the job they were elected to do. This limited the power of the block producers, but didn't iron out the underlying problems with conflicts of interest.

Money in politics

One commonly floated proposal, both in EOS and the real world, is to get the money out of politics with the goal of eliminating the more obvious problems with corruption and conflicts of interest.

This runs into a few problems. The first might be that it's simply unenforceable, and so it might be better to transparently regulate and oversee – exactly like the real world.

The second might be that running a node – or an election campaign – is expensive work. It requires money to get done, so banning money from politics by default ensures that only the wealthy get to participate. Once again, just like the real world.

Source

Incidentally, EOS New York is one of the 21 block producers, so it likely has a vested interest in maintaining the vote-buying system. That doesn't necessarily detract from the validity of its argument, but it is a complicating factor. The ChintaiEOS system referred to in the above tweet is a token-leasing platform that lets people lease their EOS tokens and, by extension, the voting power associated with them for a profit.

It might present smaller token holders with a profit opportunity, but it also presents a new avenue for the already-wealthy to further consolidate their power.

As with EOS, US politics approaches the issue by ensuring that campaign contributions are as transparent as reasonably possible and that anyone can see where a candidate's vested interests lie. But also as with EOS, this doesn't necessarily translate into any action from voters.

Knowing there's a problem isn't the same as providing a solution.

Voter education

The problem is that people aren't getting out there and voting, says Block.one. Along with many block producers, it's doing what it can to encourage people to vote mindfully for the candidates they think will be best for the job.

But this runs into some new problems. First, voting is not a zero-effort activity. It requires time and energy and has monetary costs of its own. If someone sees zero benefit to voting, the economically rational thing to do is not vote. This problem has been with EOS since its inception and with the real world since democracy's inception.

But it's likely compounded by the openness of money in politics. In the case of EOS block producers, an everyday minnow might reasonably assume that their vote won't make a difference and so just won't vote.

The following is a breakdown of the top 21 EOS block producer votes and where those votes ostensibly came from. The pink and blue bars at the right hand sides show the smaller voters, every other colour is a whale vote. The prominent black section shows Bitfinex's votes.

Source

The top 21 positions are what matter. Those are the actual decision-makers and the highest-paid block producers. And if an individual thinks a single vote won't matter in EOS, they're absolutely correct. The whales determine the top 21, and have plenty of surplus left should thousands of minnow voters somehow find themselves motivated and organised enough to make a difference.

juicy crypto wordsCompare that to the bottom ranks, which tend to attract many more smaller voters as a percentage of their total.

This highlights the split-vote problem. The most motivated and passionate EOS minnows might be voting, but they're all voting for different candidates, which dissipates much of their power. Unlike the real world, where single issues (climate change, abortion, gun control, etc) are enough to motivate voters, there's no single issue for EOS candidates to rally behind.

Instead, you have a mess of controversial problems and no clear answers, and even doing some cursory research on the available candidates is a painful slog because there are simply too many options to choose from.

It might be little surprise then that many people default to voting along national lines, even if for no reason other than avoiding language barriers.

Global democracy

Language and platform barriers are naturally a problem. Political candidates might strategically choose to hone in on voters of a specific ethnic or cultural background, but the divisions in EOS are there by necessity, and the community is split down the middle by a very tall wall.

Specifically, the great firewall of China.

China's many EOS users tend to gather mostly on WeChat, while the rest of the world favours Telegram. Furthermore, EOS users in China mostly discuss these kinds of governance subjects in Mandarin, while English is the unofficial official EOS language elsewhere.

This has seen two largely different EOS communities emerge, where the same subjects are being discussed in different places, different languages and from different angles. The actual user experience also varies widely which might have knock-on effects.

So far EOS's dispute-resolution services have tended to be much more available to English-speakers, and most discussion of the EOS constitution has similarly been in English through Telegram and similar.

International relations, as they were, have been further marred by "a sense that Chinese token holders or BPs are being unfairly picked on," in the words of the EOS Alliance organisation, in the wake of vote-buying allegations.

Needless to say, cultural differences, language barriers and similar are still very much a problem in the real world and are certainly not conducive to whipping voters into a position where they can stand behind issues and unify to make a difference.

Can EOS solve these problems?

By committing to a human-powered democratic blockchain, EOS was committing to these problems, which are as old as time itself. They aren't problems to be solved so much as flaws to live with. Part of the point of blockchain is to serve as an alternative which isn't subject to these flaws.

In this respect, EOS is a fundamentally worthless project beyond its educational value or the profits that might be yanked out of the system before it collapses.

But at least some of its struggles as it tries to solve these governance problems might carry real-world lessons.

https://www.finder.com.au/can-eos-fix-some-of-the-worlds-oldest-problems

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Employee #5: Coinbase Veteran Adam White Joins ICE’s Crypto Platform Bakkt

Early Coinbase employee and head of institution products Adam White has joined Intercontinental Exchange’s (ICE) cryptocurrency platform Bakkt as its chief operating officer, per the company’s announcement on Medium.

The news of White’s departure from the firm was first released on Bloomberg. White was Coinbase’s fifth employee, and he joined in 2013 when the founders were working from home and Bitcoin was trading around $200, per the report.

He served as the digital asset platform’s vice president and general manager of its institutional business, where he led the team that rolled out a series of products targeted at institutional clients. These products include the recent custodial services and an Index Fund, which is open to investments from U.S. accredited investors with a net worth of more than $1 million or an annual salary of more than $200,000 – who invest between $250,000 and $20 million.

Coinbase has also made some high profile hires in the past month. The crypto exchange brought in Charles Schwab to its board, Amazon Web Services former general manager Tim Wagner was hired as vice president of engineering and Fannie Mae’s former General Counsel Brian Brooks, who is the new Chief Legal Officer.

White will now team up with Kelly Loeffler and the rest of the Bakkt team on the platforms’ vision to “create a transformational digital asset ecosystem.” Bakkt is a product from ICE, the parent company of the New York Stock Exchange.

Speaking with Fortune in an interview, White said he switched sides because Wall Street was ready to sell digital assets to the masses but the infrastructure is currently lacking on the existing digital asset platforms.

“The interest in Bitcoin and other currencies started changing from retail to the institutional side. But the level of infrastructure of the existing trading sites often didn’t meet their expectations. That’s why they’re waiting on the sidelines.”

This move is a statement of intent from the Old School finance (ICE) which intends to transform cryptocurrencies into digital tokens that are more liquid and can be traded on regulated exchanges globally. Up until now, cryptocurrency trading has been dominated by exchanges that focus primarily on retail investors.

The launch of Bakkt is expected to move institutional traders, many of whom are still sitting on the fence, where crypto is concerned. The platform has an edge over popular exchanges like Coinbase, as it promises trading on a federally regulated exchange, as well as clearing and custody services for cryptos with the safeguards similar to what is applicable on physical stock exchanges.

https://www.ccn.com/employee-5-coinbase-veteran-adam-white-joins-ices-crypto-platform-bakkt/

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Tether Pulled $300 Million in Cryptocurrency out of Circulation Last Week

Tether LLC, the issuer of the eponymous USD-backed cryptocurrency tether (USDT), pulled $300 million worth of the “stablecoin” out of circulation last week, just days before the token lost its dollar peg.

Blockchain data from Omni, the second-layer protocol that operates on the Bitcoin blockchain and serves as the infrastructure for the tether token, reveals that cryptocurrency exchange Bitfinex sent 300 million USDT to the Tether treasury address last week through two separate transactions.

tether

Source: Omni Explorer

The first, executed on Oct. 9, returned 100 million USDT to Tether. Just five days later, on Oct. 14, Bitfinex — which reportedly shares a management team with Tether — sent another 200 million tokens to the treasury address. Previously, on Oct. 3, Bitfinex had returned 10 million USDT to the treasury, which has not issued any new tokens since Sept. 21.

According to Tether’s “Transparency” report, the company has been authorized to issue another $486 million worth of USDT but has not yet done so. That number correlates with the more than 486 million USDT that are currently sitting in the company’s Omni wallet.

Tether market cap

Source: tether.to

At present, USDT has an outstanding market cap of 2.5 billion tokens, down from an all-time high of nearly 2.9 billion. Despite purportedly being pegged to the U.S. dollar at a 1:1 ratio, the cryptocurrency’s market cap has declined even further, to a present value of about $2.4 billion, representing a $100 million discount to the alleged value of its outstanding balance.

tether price market cap

Source: CoinMarketCap

That’s because, as CCN reported, USDT’s dollar peg evaporated last night, dropping the token’s value as low as $0.92 (and lower on some exchanges), though it has since recovered to about $0.96.

Tether has long been a controversial asset within cryptocurrency circles, but this controversy has intensified in recent days amid reports that Bitfinex and Tether are once again struggling to find a consistent banking partner. Bitfinex confirmed to CCN that fiat deposits are currently paused but has said that the situation should normalize within a few days.

Meanwhile, traders are increasingly opting to use other stablecoins, as new offerings from heavyweights such as Gemini, Circle, and Paxos are gradually chipping away at tether’s stranglehold on that multi-billion dollar market.

Following their respective listings, those tokens — Gemini Dollar (GUSD), USD Coin (USDC), and Paxos Standard (PAX) — quickly began to trade at a slight premium to USDT, suggesting that traders were more confident in their USD backing, or at least that they believed these new tokens could more easily be redeemed for the underlying assets.

Those premiums have widened on Monday, in tandem with USDT’s vanishing fiat peg. As of the time of writing, GUSD, USDC, and PAX were trading at premiums of roughly 9.8 percent, 8 percent, and 9.5 percent against their USDT trading pairs on various exchanges.

https://www.ccn.com/tether-pulled-300-million-in-cryptocurrency-out-of-circulation-last-week/

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Hong Kong’s Security Watchdog to Propose Crypto Regulation, Chairman Says

Hong Kong’s securities and futures commission (SFC) is planning to introduce crypto regulation to protect investors, the SFC chairman told Hong Kong English-language newspaper the South China Morning Post (SCMP) Monday, Oct. 15.

Chairman Carlson Tong Ka-shing — who will pass his position in the SFC to Tim Lui Tim-leung on Oct. 19 — said in an interview that the watchdog is not considering a ban on cryptocurrency platforms as the Chinese mainland has done, adding that they don’t think that a total ban is “necessarily the right approach”:

“It will not work in today’s internet world when trading can cross national boundaries. Even if we were to ban them, transactions can still be easily conducted via platforms in overseas markets.”

The official added that a legal framework to regulate crypto exchanges is absolutely necessary, noting that the SFC is going to consider the approach carefully as such platforms are “new technologies” and cannot treated as securities. Despite the fact they do not fall under the SFC’s current requirements, Tong proposes equating them to traders:

“We need to see if and how these platforms can be regulated to a standard that is comparable to that of a licensed trading venue, while at the same time ensuring investors interest are being protected.”

According to the SMCP, the exchanges that are working in Hong Kong’s market have welcomed the move. For instance, BitMEX chief operating officer Angelina Kwan told the newspaper that the regulatory authority can help to develop a new industry. And Circle’s CEO Jeremy Allaire said the company will proactively work with the government on those frameworks.

As Cointelegraph previously wrote in a review of Hong Kong’s policy on crypto, the SFC has warned the public about the potential issues of Initial Coin Offerings (ICO) at least twice. Back in September, the country has issued a public warning on the dangers of crypto investments and stressed that ICOs might be considered as securities. In early 2018, a second warning was released, reminding the public about potential risks of ICOs and urging investors to do their due diligence.

This July, the SFC declared in its annual report that it is keeping “a close watch” on crypto and ICOs and will intervene when appropriate.

https://blog.cofredcoin.com/2018/10/15/hong-kongs-secur…on-chairman-says/

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Crypto Porfolio Managment App Blockfolio Raises $11.5 Million

Crypto portfolio tracker Blockfolio has raised $11.5 million in a round of fundraising led by prolific cryptocurrency focused hedge funds Pantera Capital. 

Pantera Capital has maintained a positive outlook for cryptocurrency for a while. The investment firm, led by its CEO and chief investment officer Dan Morehead recently invested in market prediction platform Augur, an open source P2P oracle and prediction market platform built on Ethereum.

In addition to the fundraising announcement, the company also unveiled a redesign of its app.

Blockfolio was created by the early backers of Dash to provide a valuable insight into the users’ crypto portfolio. It also offers daily news updates from the top crypto news sites, global currency updates and price alert integration.

According to a report on Fortune, the company is growing beyond its portfolio management feature. The company wants to grow into the role of a mediator for project participants. This is why it released a new feature called “signal,” in May, which supposedly allows cryptocurrency developers share updates through push notifications to their followers on the app. Blockfolio’s competitor is Delta, a similar app that offers crypto portfolio management, released a similar feature to Signal, on Tuesday.

Fortune quoted Blockfolio co-founder and CEO Ed Moncada, who said:

“If we were just a price-tracking application, we wouldn’t be able to raise that kind of money.”

Moncada sees a future where cryptocurrency teams can use the app to solicit feedback from coin holders, which would enable investors to propose feature changes and vote on protocol upgrades when the need arises. The number of crypto teams trialing this new feature on Blockfolio are 90, involving popular prediction market Augur and blockchain identity startup Civic. The company also has another “300-plus teams are on the waitlist.”

Having a company issue one-directional updates to users could open the gates to spam, but Moncada believes this won’t be the case. Based on the report, Blockfolio vets the teams to ensure they won’t be spamming users with “bogus marketing hype.”

The app is currently not monetized, and it doesn’t have plans to run adverts for projects hosting initial coin offerings. Moncada sees this move as a way to preserve the trust of its users, even if it means losing revenues.

Blockfolio, since its launch in 2014 has attracted more than 4.5 millions users who use the service to stay abreast of information across multiple exchanges, keep tabs on their holdings and to recent relevant updates on cryptocurrency project developers.

https://www.ccn.com/crypto-porfolio-managment-app-blockfolio-raises-11-5-million/

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UK Banking Giant Barclays’ Cryptocurrency Project ‘Put on Ice’: Report

Major investment bank Barclays has reportedly put its cryptocurrency trading project “on ice” amid a prolonged bear market that has dampened interest in the asset class among many investors.

According to a Financial News report, the London-based financial institution shelved the project in September, leading to the departure of Chris Tyrer, the bank’s former head of energy trading who had been in charge of the “digital assets project.”

Among other things, the project involved determining whether cryptocurrency would be more than just a fad, gauging client interest for crypto products, and evaluating what infrastructure the bank would need to invest in to offer related products and services. As recently as August, Tyrer’s LinkedIn profile had stated that he had been “hired to produce a business plan for integrating a digital assets trading desk into Barclays’ marketing business.” However, a Barclays spokesperson disputed that the bank was opening a cryptocurrency trading desk, and Tyrer’s profile was later scrubbed of that statement.

Notably, Barclays has applied to patent a blockchain system that would allow banks or other financial intermediaries to create and issue digital currency units backed by fiat currency custodied in their vaults.

As CCN reported, fellow investment banking giant Goldman Sachs also put the brakes on plans to operate a cryptocurrency trading desk, though, even more significantly, it continues to lay the groundwork to begin offering cryptocurrency custody to clients.

It is not clear why Barclays halted its digital assets project, though it could be related to the cryptocurrency market’s prolonged decline, which began in January and has continued for the 10 months hence, in large part due to the fickle attention spans of retail investors.

Even so, there is evidence that institutions are finally beginning to warm up to the asset class, with at least six major university endowments — Harvard University, Yale University, Dartmouth College, Massachusetts Institute of Technology (MIT), Stanford, and University of North Carolina — having reportedly invested in the ecosystem indirectly, via cryptocurrency investment funds.

Moreover, Intercontinental Exchange (ICE), the owner-operator of the New York Stock Exchange (NYSE), has continued to plow ahead with its cryptocurrency plans, which are being carried out through a new subsidiary called Bakkt, in partnership with a variety of high profile names including Microsoft and Starbucks.

https://www.ccn.com/uk-banking-giant-barclays-cryptocurrency-project-put-on-ice-report/

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Total Ban on Crypto Exchanges Unnecessary: Hong Kong Regulator

The outgoing chairman of Hong Kong’s securities regulator has – unlike China – ruled out a total ban on domestic cryptocurrency exchanges, suggesting formal regulations instead.

Hong Kong’s Securities and Futures Commission (SFC) is drawing plans in reaction to the growing appetite for cryptocurrencies like bitcoin among retail investors and traders – by regulating the sector.

Speaking to the South China Morning Post in a report on Monday, outgoing chairman Carlson Tong Ka-shing insisted that autonomous, self-governing administrative region south-east of mainland China will not follow the latter’s approach with an outright ban on the cryptocurrency sector.

“We do not think imposing a total ban on these platforms is necessarily the right approach,” the senior official told the SCMP, remarking that traders will find ways circumvent all barriers.

“Even if we were to ban them, transactions can still be easily conducted via platforms in overseas markets,” Tong added.

Instead, the SFC is looking to usher in a formal regulatory framework for domestic cryptocurrency trading, even if the sector falls beyond its purview as the authority’s reach only extends to securities.

Cryptocurrency trading, Tong stressed, do not fall within the custodian, audit or valuation requirements under the SFC’s Securities and Futures Ordinance. They “may not qualify as securities,” the official said, suggesting the necessity for a careful regulatory approach to oversee crypto trading platforms.

He added:

“We need to see if and how these platforms can be regulated to a standard that is comparable to that of a licensed trading venue, while at the same time ensuring investors interest are being protected.”

The suggestion has been welcomed by domestic exchange operators in Hong Kong. The report cites  Circle, with a base of operations in Hong Kong, and BitMEX, which hired a former regulator as its operations chief after moving into some of the world’s most expensive office spaces, looking forward to the regulations encouragingly.

The Hong Kong crypto market has been scrutinized by the securities regulator extensively in recent years. Earlier in March, the authority shut down an initial coin offering (ICO) citing “potential unauthorized promotional activities and unlicensed regulated activities.” The following month, SFC deputy chief July Leung labeled many ICOs as “dubious, down right frauds

https://www.ccn.com/total-ban-on-crypto-exchanges-unnecessary-hong-kong-regulator/

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Bitcoin Exchange Bitfinex Announces New Reporting Tools for Users

Bitfinex has announced that launch of a new suite of reporting tools intended to help users gain greater control over their trades and give them useful insights into their activities on the platform.

In a blogpost on its website, Bitfinex revealed that the tools are designed to enable users gain unlimited insights by viewing as much of their account data as they want, through the removal of requested data limits.

New Additions

Bitfinex says that the UI of the new reporting tools is based on “modern web technology” with a focus on improving the presentation of data and boosting responsiveness across different user devices. Designed to be simple and accessible, the new toolkit permits users to easily and instantly compile an overview of required account information that may be as old as the account itself. Previously this was not possible due to the presence of requested data limits, but the new toolkit removes this limit, enabling Bitfinex users to observe or download their lifetime data on the platform.

An excerpt from the announcement reads:

“As institutions and professional traders enter the digital asset trading space, Bitfinex remains committed to creating the tools required to thoroughly meet their needs. We are of the belief that our suite of tools work to accelerate the rate of global adoption and help facilitate an increasingly mature market.”

Under the new reporting framework, Bitfinex users will be able to work offline, with their activities being recorded on a local database, which removes the need for a live internet connection in order to work with their account data. In addition, the entire toolkit is in the process of being converted in an open-source solution that offers the possibility of customizing tolls to fit individual users needs and submitting features.

Using the Bitfinex API, the new reporting suite now offers a field wallet added to end-point ‘ledgers’, giving information that identifies the wallet involved in movements. End-point ‘currencies’ are also added, which brings up a list of available currencies with id and full name. The end-point ‘userInfo’ is present too, bringing up information about the users profile, while end-points ‘accountTrades’, ‘orderHistory’, ‘fundingOfferHistory’, ‘fundingLoanHistory’ and ‘fundingCreditHistory’ have been changed, with a new option to return all the data without filtering by pair/coin when no pair/coin is sent.

In addition, the integration with authToken instead of apiKeys makes it possible for users to utilize the same tools locally and on the Bitfinex web platform.

In May, CCN reported that Bitfinex obligates users to submit tax information and may share its own information with government. The new reporting suite comes at a time when more regulators around the world are increasingly looking toward crypto exchanges to stem the flow of crypto-aided tax evasion.

https://www.ccn.com/bitcoin-exchange-bitfinex-announces-new-reporting-tools-for-users/

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Bitcoin Price Explodes to $7,500 as Tether Loses USD Peg

Bitcoin price surged 9 percent within hours as Tether started losing its grip on the USD-peg.

The BTC/USD pair closed yesterday on a modest 2 percent gain in pennant formation action following the recent drop. Nevertheless, the couple started picking momentum during the early Asian trading session and jumped to as high as 7800-fiat from its previous low near 6300-fiat.

At the same time, Tether’s USDT/USD pair lost came crashing down below 0.95-fiat at the beginning of the Asian session. It eventually formed lower lows towards 0.85-fiat, before correcting higher towards 0.90-fiat. The pair, however, continues to be far from its $1-peg that is creating a negative sentiment about its future in the crypto space.

Bank Insolvency, FUD

Tether is closely tied to BitFinex, a global crypto exchange which lately has dropped Noble Bank as its banking partner. The amount of US dollars required to back the Tether’s USDT token supply were reportedly deposited in the same bank, which caused the stablecoin temporary hassles. Later, reports started to surface that Tether had no money to back its total supply, with many of them calling the stablecoin project a scam. They also found a strong connection between the chiefs of BitFinex, Tether and Noble Bank, especially at the time when the Noble bank became a strong point of concern for the Puerto Rican regulators. Reportedly, the authorities issued a warning to the firm, the details of which couldn’t make to the press.

The needle then points to one thing: whether Tether has funds to support its USDT supply or not? It can only be found out with a clear and transparent audit. But, even on that front, the project has not come reasonably well. Against the promises made in their original whitepaper, the Tether team has not conducted a proper financial audit. It had however hired a legal firm, which already had a business relationship with Tether and Noble Bank, to perform an inspection.

All stories collectively have created a negative community sentiment for USDT. Retail investors are already exchanging their Tether holdings for Bitcoin and other top coins, which have also seen an impressive rally in the past 24 hours.

“There is no guarantee that you can redeem your tethers. There should be a way for Tether to repurchase them from you for 1 dollar. There is not. For me, this whole thing smells very like when mtGox went belly up. You want to hold your bags, will that is your decision. It is not why I am in crypto.” – one of the crypto users commented on Reddit.

Tether social media handles posted nothing during the crash.

https://www.ccn.com/bitcoin-price-explodes-to-7500-as-tether-loses-usd-peg/

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North Dakota Regulator Issues Cease and Desists Against 3 ICOs

The North Dakota Securities Department last week issued cease-and-desist orders against three companies promoting initial coin offering (ICO) in the state.

Karen Tyler, the Securities Commissioner, named Crystal Token, Advertiza Holdings (Pty) Ltd., and Life Cross Coin aka LifecrosscoinGmbH, as the latest offenders involved in illegal business practices related to cryptocurrencies. Investigations found that the accused companies were selling securities without obtaining a license. Moreover, their products include unrealistic promises that could intentionally harm North Dakotan investors psychologically and financially.

“In formulaic fashion, financial criminals are cashing in on the hype and excitement around blockchain, crypto assets, and ICOs – investors should be exceedingly cautious when considering a related investment,” Tyler stated as she made the named of alleged scam conspirators public.

Fake Utility Tokens, Advertising

Crystal Token was offering an ERC20 standard token identified as CYL as security that would guarantee 2 percent daily returns to its holders. The company’s website was full of allegedly fraudulent statements with claims of unrealistic rates of return on investment. Crystal Token also failed to provide adequate disclosure of the management team’s credentials and deliberately withheld their identities.

Life Cross Coin, on the other hand, was a few steps ahead. It was operating through a website associated with online crimes such as ransomware, identity fraud, and trojan. Similar to Crystal Token, the site allegedly lured investors into purchasing and holding a token identified as LICO in returns for profits. Advertiza Holdings had also issued a utility token TIZA which, according to SEC, was security which promised holders that they would “make a profit from the appreciation” of the company’s returns.

Operation Cryptosweep in Full Swing

Tyler admitted that their latest action against the local crypto offenders was a part of Operation Cryptosweep, a coordinated multi-jurisdiction drive against the crypto scams in the US and Canada. The ride so far has led to more than 250 active investigations, according to the US Securities and Exchange Commission (SEC).

North Dakota itself has been to the forefront of sacking companies involved in crypto crimes. On September 26, Commissioner Tylor confirmed issuing cease-and-desist orders against BitConnect LTD and BitConnect International PLC, Magma Foundation and related companies Magma Coin and Magma, and Pension Rewards Platform, aka Pension Rewards.

Nevertheless, the SEC crackdown has also received flacks from the local crypto community, particularly for working under the pretext of an old law – Howey Test – that does not fit the multifaceted nature of cryptocurrencies. Just last month, a group of financial experts had met the lawmakers to discuss the issues, fearing local blockchain startups will move out of the country in the absence of a concrete crypt law.

“If the rules are unclear, unwritten, or unknown it’s not appropriate to punish people for making the wrong guess,” said David Forman, the chief legal officer at Fidelity Investments.

https://www.ccn.com/north-dakota-regulator-issues-cease-and-desists-against-3-icos/

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Newsflash: Bitcoin Surges to $7,500 on Bitfinex Due to Tether Implosion, Real Price $6,700

The price of Bitcoin has surged from $6,300 to $7,500 on Bitfinex, a major cryptocurrency exchange that reportedly operates Tether LLC, a firm that oversees the development of stablecoin Tether (USDT).

Bitcoin is being traded with a significant premium on exchanges that have integrated USDT such as OKEx and Huobi, because traders have initiated the biggest sell-off of USDT to date.

The sudden dump of USDT led the price of the stablecoin to drop to $0.94, by around 6 percent from its peg at $1. The drop in the value of USDT formed a premium on Tether-integrated cryptocurrency exchanges.

Real Price of Bitcoin is $6,700

Still, on major fiat-to-crypto exchanges, the price of BTC surpassed the $6,700 mark, eyeing a breakout above $6,800, a resistance level which billionaire investor Mike Novogratz has observed since early August.

Given the premium on TrueUSD (TUSD), a regulated, audited, and Ethereum-based stablecoin against Tether, it is evident that traders are selling massive amounts of USDT to purchase cryptocurrencies like Bitcoin and Ethereum, and invest in other stablecoins such as TUSD, Gemini Dollar (GUSD), and PAX.

On Coinbase, Bitstamp, and Kraken, the price of Bitcoin against the US dollar is at around $6,700, up by more than $400 in the past 24 hours. It is possible that the unexpected decline in the price of Tether had an impact on fiat-to-crypto exchanges.

But, many analysts in the cryptocurrency market believe that algorithms in Asia have started to inject large amounts of cash into major cryptocurrencies, and the drop in the price of Tether is merely a coincidence.

At this point, whether the rise in the price of Bitcoin was initiated by the sell-off of Tether or an influx of capital from Asia is of less significance. Over the past 12 hours, the volume of Bitcoin has increased from $3 billion to $4.8 billion, escaping its yearly low mark.

More importantly, fiat-to-crypto exchanges have begun to see a surge in volume, which proves that the short-term rally of BTC is not wholly attributable to the imposion of Tether.

Throughout the past week, CCN emphasized that BTC needs a major catalyst to breakout of the $6,000 region due to its low volume.

“The volume of the cryptocurrency exchange market, which increased from $10 billion to $13 billion throughout the past two days amidst a sell-off, has declined back to $10 billion, which could likely lead BTC to approach its yearly low volume at $3.2 billion,” CCN’s report read.

Bitcoin’s Trajectory

If BTC can surpass the $6,800 resistance level in the short-term, it will be possible for the crypto market to initiate a long-waited rally to the upside. However, if BTC fails to breakout of a major resistance level, then there exists a possibility that the dominant cryptocurrency struggles to maintain momentum and falls back to the $6,000 support level.

https://www.ccn.com/newsflash-bitcoin-surges-to-7500-on-bitfinex-due-to-tether-implosion-real-price-6700/

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AARP Tells Retirees that Bitcoin is Mainly Used by ‘Bunch of Criminals’

The American Association of Retired Persons (AARP) has ascribed a bizarre definition to bitcoin in a caustically worded article on its website published on Wednesday, Oct. 10. In the slideshow post titled “Improve Your Financial Literacy With This Glossary,” a heavy dose of contempt is specifically reserved for the description of bitcoin and blockchain in their respective slides, while other terms like “emerging markets” and “exchange-traded funds” are defined using regular financial language.

‘Criminals, Idealists and Speculators’

After beginning with a level-headed definition of the term “asset allocation,” the article moves on to bitcoin, describing it with a few choice words that are at once dismissive and inaccurate.

The post reads:

“Bitcoin: A bunch of computer code that a bunch of criminals, idealists and speculators agree is worth ‘real’ money. Sadly, its real-money value swings widely, making it impractical except for criminals, idealists and speculators.”

It then takes aim at the term “blockchain,” saying:

“Blockchain : 1. A different bunch of computer code containing an unalterable record of a series of transactions. The most famous is a digital ledger recording all bitcoin transfers. 2. A word often uttered by companies hoping to snare investors’ attention — and dollars.”

The language used to describe these terms is reminiscent of that used by prominent cryptocurrency skeptic Jamie Dimon, who has severally described bitcoin as a “fraud” and a “scam,” implying that it is only taken seriously by less intelligent people. More worrisome from the crypto industry’s point of view is that the publication of this kind of anti-crypto material in a medium aimed at an older demographic potentially exacerbates the clear and existing generational division that already exists on the topic of bitcoin and cryptocurrencies.

Cryptocurrency and the Clash of Generations

A survey report published last month by Circle shows that 25 percent of millennials have expressed interest in purchasing crypto over the next year. This is more than 10 times the rate for so-called Baby Boomers, who make up the vast majority of the demographic represented by the AARP.

While this may seem to be a self-solving problem as younger people will inevitably drive popular culture and make crypto adoption mainstream according to the statistics, the continued anti-crypto stance of many who are used to traditional finance, as illustrated by the AARP article, could harm crypto investment in the short term by discouraging older Americans — who typically have up to 10 times as much money in savings as millennials — from investing in crypto.

https://www.ccn.com/aarp-tells-retirees-that-bitcoin-was-created-by-bunch-of-criminals/

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As Petro Launch Looms, Venezuela’s Bol ivar Eyes 1.4 Million Percent Inflation

Based on findings from the International Monetary Fund (IMF), the annual inflation rate for Venezuela could reach as high as 1.37 million percent by the end of 2018. Inflation estimates for the country have risen several times this year as Venezuela struggles with policies and production — and prepares to launch its Petro cryptocurrency

No Stranger To The Headlines

Venezuela has made headlines many times throughout 2018 in its current struggle with inflation. CNN reports the cause of such inflation as the result of “years of excessive government spending on welfare programs, poorly managed facilities and dilapidated farms.”

This marks the third time the IMF has increased its inflation estimates this year, with estimates from January of 13,000 percent, and from July at 1,000,000 percent. Gross Domestic Product (GDP) is also expected to decrease by 18 percent for 2018. This is bad news for a country that has such a promising amount of oil reserves.

Adding to the inflation problem is the dramatic increase of minimum wage, brought on by Nicolas Maduro, Venezuela’s president. Maduro has raised minimum wage an astounding 24 times since 2013, leading in part to many business closings.

Petro Cryptocurrency Nears Public Sale

bolivar hyperinflation chart

U.S. Dollar/Bolivar

Led by Maduro, Venezuela’s government has sought a cure for its economic woes in the “Petro,” a state-issued cryptocurrency allegedly backed by barrels of oil.

In further efforts to combat the problem of inflation, Maduro has said that the government will create a fiat currency that’s pegged to the Petro, which is itself pegged to oil — as confusing as that sounds. This double-pegged fiat currency is called the Bolivar Soberano — or, in English, the Sovereign Bolivar.

Maduro explained:

“I ask for your confidence, I ask for your support, beyond ideologies and political positions, because Venezuela needs this change, the mafias are over!… We have the correct vision of what the economic future in Venezuela should be, above all, we will achieve it.”

Logically, it would be difficult to trust these statements based on previous track record.

Pushing On

Amidst skepticism, Maduro continues to be adamant about the idea of the Petro. He announced in late August that, “Venezuela will have a second accounting unit based on the price, the value of the Petro. It will be a second accounting unit of the Republic and will begin operations as a mandatory accounting unit of our PDVSA oil industry.”

Several doubts have also come to light that the Petro (and its oil backing) may not even exist at all. Additionally, no shops or stores were reportedly using the Petro, and the only buyers that could be found were anonymous online persons.

Based on recent reports, it appears that Petro adoption has been low, though this may change following the public sale in November. Meanwhile, Citizens continue to leave the country in droves.

Most recently, on Oct. 8, it was announced that Venezuelan “salary bonuses would be paid in Petros,” with Maduro explaining that he wants money made by salaried workers to have more impact.

Hopefully, the public will see a brighter future for Venezuela in the days ahead.

https://www.ccn.com/as-petro-launch-looms-venezuelas-bolivar-eyes-1-4-million-percent-inflation/

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UK: Cryptocurrency Regulations May Take 2 Years for Lawmakers to Draft

Cryptocurrency regulations in the UK could take up to 24 months to be introduced according to a legal expert at a UK based law firm.

James Kaufmann, Legal Director at Reynolds Porter Chamberlain (RPC) UK, while commenting on the subject in a statement published by his company, said it could take two years to introduce such regulations due to a couple of reasons. To achieve the results within such a timeline is based on a best-case scenario where the proposals with the House of Commons Treasury Committee report starts to progress.  

RPC is a London based corporate law firm with offices in the UK and Asia. The firm which has over 80 partners, has been named Law Firm of the Year three times in a row since 2014.

According to Kaufmann, the processes required to move such bills forwards are often “lengthy,” given that the recent proposals sent to House of Commons Treasury Committee (HM Treasury) have just begun to move forward.

“Bringing a complex and fast-evolving area like cryptocurrencies into a regulatory framework is going to be a difficult and lengthy process. Added to this, big issues like Brexit are already occupying a lot of regulator’s time,” he noted in the release.

According to the statement, past incidents of regulatory changes of lesser magnitude show that even the two-year timeline is quite ambitious.

Kaufmann stated in the release:

“Past precedents show it can take years to make relatively minor regulatory changes to the financial regulatory regime. For example, it took two and a half years from the Treasury’s original announcement (10 May 2004) for the regulation of home reversion plans to come in force (6 November 2006).”

To regulate cryptocurrencies, the Treasury Committee will need time to study the industry to know which “specific activities related to cryptocurrencies”require monitoring, draft proposed regulations, allow for a consultation period, publish changes and set an implementation date.

London bitcoin cryptocurrency

Even if the latest proposals are fast-tracked, Kaufmann believes it could still take “years for regulations to cover the UK cryptocurrency market that treads the middle ground between protecting retail participants and allowing the UK’s cryptocurrency market to thrive.”

The introduction of new regulations could also result in an increased role for the Financial Conduct Authority (FCA), the regulatory body for the financial sector. This raises questions as to whether the FCA has the wherewithal to regulate the crypto industry. According to the press release, the FCA would be tasked in the coming months on whether or not it has the funding, the requisite expertise, and the readiness to mitigate the reaction of the cryptocurrency markets to the regulations when they go live.

Joining the voices of the Treasury Committee report, the European Parliament has also called for cryptocurrencies to be regulated across the region and it has developed a proposal similar to the Treasury Committee’s report titled “Motion for a resolution on distributed ledger technologies and blockchains: building trust with disintermediation.”

“The race to establish a workable and regulated regime for cryptocurrencies is surely worth winning as their usage becomes more widespread across Europe and globally,” Kaufmann commented.

Earlier last month, HM Treasury called a resolution to discuss issues surrounding cryptocurrencies such as hacker attacks and money laundering.

https://www.ccn.com/uk-cryptocurrency-regulations-may-take-2-years-for-lawmakers-to-draft/

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Budding NBA Star is a Bitcoiner, Says His Shoe Brand Will Accept Crypto

Spencer Dinwiddie is not “rich” by professional athlete standards. Currently, he makes around $1 million a year before taxes from his NBA contract. The 38th overall pick in the 2014 NBA draft at the age of 21, Dinwiddie has already played on three professional teams. Currently, he plays for the Brooklyn Nets and has a perhaps less-than-stellar scoring record. Needless to say, his career still seems to be shaping itself.

Brooklyn Nets Up-and-Comer Caught the Bitcoin Bug

Yet Dinwiddie, like many NBA players and MLB players, is likely to make more from endorsement contracts, investments, advertising one-offs, and the like than he ever will from his franchise(s). In this respect, Dinwiddie recently joined the historical record of professional athletes who embrace cryptocurrency. Dinwiddie dove in last year when the price was climbing, and like many of us, he caught the bug. He told Bleacher Report in a recent interview that he was constantly checking the bitcoin price while others were checking their social media status.

“If I woulda gone all-in, boy, I’d be loaded right now.”

Dinwiddie is, of course, referring to the meteoric price rise of last fall, wherein the price of a single bitcoin reached nearly $20,000.

basketball bitcoin nba

Source: Shutterstock

The up-and-coming player soon exhibited all the classic signs of bitcoinitis — a condition where one catches the bitcoin gold bug and becomes contagious. He checked his phone constantly, monitored price news, and even continually tried to convince fellow NBA player Trevor Booker to join the fray with his venture capital firm’s endowment, who refused at the time because he did not trust the volatility — a feature of the bitcoin market which has attracted many of traditional finance’s bolder traders in small and big ways. He also had symptoms of the early trader, setting strict limitations on his trading behavior.

“If I knew I was going to make a trade and it would intersect with practice, I would set a super-strict sell stop.”

Of course, veteran traders in bitcoin have learned that, with the exception of insane highs where the price has risen more than 100 percent in short periods of time, buy and hold remains a strong strategy for long-term investment. Those with hands strong enough to hold just since 2015, for instance, have made many thousands of dollars in real value. Of course, active, professional traders who sold at the high last winter have since been able to re-buy their sold coins and increase their position.

Dinwiddie’s Shoe Brand to Accept Cryptocurrency

While nearly all NBA players accept a licensing contract with Nike or another major shoe brand to release their namesake shoes, Dinwiddie felt that there was a better deal to be had. He found it with a company called Project Dream, which will give him 50 percent of all proceeds, a quarter of which will go to the Dinwiddie Family Foundation. Well, a bit more than a quarter — 25.08 percent, representing his college (25) and professional (08) jersey numbers. The foundation helps underprivileged kids go to college.

The shoe line is called K8IROS and will be released this season. Dinwiddie has played a major role in every aspect of the product’s development and has even extended his influence to allow for an aspect dear to his heart: bitcoiners will be able to purchase the shoes with the world’s first and most valuable cryptocurrency.

https://www.ccn.com/budding-nba-star-is-a-bitcoiner-says-his-shoe-brand-will-accept-crypto/

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IMF: Rapid Growth of Bitcoin and Crypto Will Impact Global Financial System

The International Monetary Fund (IMF) has stated in a recently released report that the rapid growth of Bitcoin and crypto could impact the international finance system.

The report entitled “World Economic Outlook: Challenges to Steady Growth” published by the IMF read:

“Cybersecurity breaches and cyberattacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services. Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”

Rapid Growth, Improving Regulation, Acknowledgement From Government Agencies

Despite the 80 percent decline in the valuation of the crypto market, the industry has seen some of the most positive developments regarding the institutionalization, regulation, and development of cryptocurrencies as an emerging asset class in the past nine months.

Led by existing companies like Coinbase and Gemini, major financial institutions in the likes of NYSE, Cboe, and Goldman Sachs have started to strengthen the infrastructure of the cryptocurrency market, allowing both high profile retail traders and institutional investors to allocate large amounts of money in the asset class.

As the cryptocurrency sector continues to grow at an exponential rate, the IMF emphasized that it could create vulnerabilities in the financial system. Because cryptocurrencies are considered alternative currencies with value, a growing number of hackers have started to target digital asset trading platforms with sophisticated tools and hacking methods.

“Stealing cryptocurrencies is similar to stealing cash, and exchanges will continue to be targeted by hacking attacks in the long-term. It is as important to establish systems to deal with the aftermath of hacking attacks as integrating various methods to prevent hacking attacks,” Jeon Ha-jin, the chairman of South Korea Blockchain Association said.

South Korea bitcoin

In South Korea, the third largest cryptocurrency exchange market behind the US and Japan, exchanges have begun to insure their funds through trusted insurance providers like Samsung to add an additional layer of security and investor protection.

Gemini, a leading cryptocurrency exchange in the US alongside Coinbase, also recently obtained insurance services from Aon to ensure that in an unlikely event of a security breach, the exchange is able to cover user funds and holdings fully.

“Consumers are looking for the same levels of insured protection they’re used to being afforded by traditional financial institutions. Educating our insurers not only allows us to provide such protections to our customers, but it also sets the expectation for consumer protection across the crypto industry,” Yusuf Hussain, Gemini’s Head of Risk, said.

The cryptocurrency industry and infrastructure employed by exchanges are relatively new and fundamentally different from the technologies implemented by the traditional finance sector. As such, it is appropriate for the IMF and government agencies to describe the rapid growth of the asset class a risk to global finance.

But, continuous efforts to strengthen the infrastructure of the cryptocurrency market and improve investor protection will reduce the risk cryptocurrencies have on the global finance industry.

Expert Believes it is Optimistic

Emin Gun Sirer, a professor at the prestigious Cornell University and a highly regarded expert in the space of cryptocurrency and blockchain, stated that the acknowledgement of cryptocurrencies as an asset class by the IMF is optimistic for the industry.

https://www.ccn.com/imf-rapid-growth-of-bitcoin-and-crypto-will-impact-global-financial-system/

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China Overseas Tax Havens, Will Investors Flock to Crypto?

Since early 2018, the government of China has tightened policies targeting millionaire investors in the country holding their wealth overseas to avoid large taxes, and it may lead local investors to alternative assets like crypto.

Chinese investors rely on the Swiss offshore banking industry, Hong Kong real estate market, and foreign stock markets to hoard millions of dollars worth of properties, assets, and cash outside of mainland China.

But, local financial authorities have started to crackdown on investors that amass significant wealth in overseas markets.

Will Investors Move to Crypto?

In recent months, the Chinese government has begun to cooperate with agencies in 83 countries that follow the Common Reporting Standards (CRS) established by the Organization for economic Cooperation and Development (OECD).

The involvement of the Chinese government with the OECD and CRS is expected to lead to direct communication and cooperation with Virgin Islands, Bermuda, Luxembourg, Switzerland, and the Bahamas, five regions that investors often depend on to save massive amounts of capital in the offshore banking sector.

Last month, China disclosed that all 83 countries under CRS and OECD will share data related to financial accounts held by Chinese citizens, allowing the government to target high profile millionaire investors.

The go-to market for Chinese investors in the real estate sector of Hong Kong. Individuals based in China can easily set up a shell company in Hong Kong and receive a bank account with the name of the firm to move funds from China to Hong Kong, with which the investor can invest in properties in the region.

The influx of investors from China to the real estate market of Hong Kong led premiums on apartments to rise substantially, creating a real estate bubble that has made it more challenging for local residents to acquire properties.

It is difficult and ineffective for the Chinese government to restrict money flowing from China to the Hong Kong real estate market as it would require a highly impractical process of banks cooperating with the government to censor and monitor every large transaction.

But, it is possible for the government crackdown on individual investors holding large amounts of foreign assets and cash in offshore savings accounts.

Cryptocurrencies like Bitcoin and Ethereum remain as the only alternative outside of the Hong Kong real estate and stock market for local investors to store significant capital in. The lack of correlation between crypto and the broader financial market could appeal to investors as a safe haven against the global economy.

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Bitcoin is Not a Legal Tender in Zambia, Says Central Bank

Zambia’s central bank has said that cryptocurrencies like bitcoin aren’t legal tender in the country.

 

The Bank of Zambia (BoZ), responsible for creating and implementing monetary policies for the world’s 105th largest economy, explained their stance against the use of cryptocurrencies in contrast to the growing public interests in the field.

 

The central bank admitted that it was receiving a lot of inquiries related to Bitcoin’s legal status in Zambia, and they had to “safeguard the interests of members of the public and to maintain the integrity of the financial system” with its official stance on the digital currency, according to a local news report.

 

Constitutional Barriers

BoZ cited references from their financial constitutions, naming Section 30 as the main barrier that keeps Bitcoin and similar digital assets from having a legal tender status. Also, the bank agreed that they had no constitutional power to disfigure or ban the local crypto market under the existing legal framework. Excerpts:

 

“Firstly, Section 30 of the Bank of Zambia Act vests the right to issue notes and coins exclusively in the BoZ. To date, BoZ has not issued any form of cryptocurrency. Cryptocurrencies are not legal tender in the Republic of Zambia; Secondly, BoZ does not oversee, supervise nor regulate the cryptocurrency landscape. Consequently, any and all activities related to the buying, trading or usage of cryptocurrencies are performed at owner’s risk.”

 

Adding further, BoZ issued a public-interest warning identical to those released by its international peers in the past. The bank said that the investors should be aware of the risks associated with the use of cryptocurrencies. It added money laundering, consumer protection (related to hacking and fraud), and terrorism financing to its statement, reminding that they will not be able to offer any legal recourse to crypto users if they get subjected to any of such online crimes.

 

Regulation in Cards

The constitution of Zambia does not define Bitcoin, which is why it has received a flack from the country’s central bank. There is, however, a possibility of lawmakers taking an active approach to regulating it under a modified provision. BoJ confirmed that it would be actively looking into the cryptocurrencies to come up with a law that “should not constrain but enable innovation.”

 

As of now, the Zambian crypto community does not constitute any substantial trading activity to the global crypto volume. The country does not have an active local exchange, and the local crypto traders mostly rely on either foreign crypto exchanges or peer-to-peer desks to conduct their transactions. It might be due to the lack of crypto education in a country where only 11.6 percent of people have an internet connection, according to a World Bank report.

https://www.ccn.com/bitcoin-is-not-a-legal-tender-in-zambia-says-central-bank/

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PAXEXcoin, the Best Crypto Coin Ever built to have abundant Projects

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Paxexcoin is used for ecommerce (paying of bills and bundles and airtime) in africa

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