blocktrade

First Fully Regulated Cryptocurrency Exchange Goes Live

Crypto has been on a roll with a ton of new developments popping up every single day. While the nascent industry is certainly headed towards the right direction, achieving full regulatory approval is a very big deal, especially for cryptocurrency exchanges – it is even harder for them to get regulatory approval before they launch. Well, not anymore.

Liechtenstein-based Blocktrade.com has just been approved by the Finance Markets Authority and is set to be the first digital currency exchange to be open for testing – the Financial Markets Authority is a member of the European Securities and Markets Authority (ESMA). In a press release, the company confirmed that is in the process of obtaining a multilateral trading facility (MTF) license courtesy of the European Union’s MiFID II framework.

Blockrade.com’s launched the beta version for testing last week – this trial period is set to end on August 25 and will be followed by the full launch though the actual date of the launch is yet to be revealed.

“I hope early adopters will provide us with valuable feedback so that we can improve the platform even further. I believe its capability, as well as its user experience, are impressive, so I am convinced the word about our beta release will be spread widely. We are already setting up interviews with major financial, fintech and business media, so I will get a chance to talk about our development and vision for the future of finance,” Blocktrade’s CEO Luka Gubo said in a recent interview.

During the aforementioned initial testing phase, Bolcktrade.com will be offering Ethereum, bitcoin, Litecoin, Bitcoin Cash, and Ripple’s XRP trading pairs. Once the platform is fully launched later this year (around September), it will offer Security Tokens, Crypto Traded Indices and Tokenized Assets.

“We believe that if you operate an exchange and if you have an orderbook with a matching engine, you should also be regulated as an exchange. This removes the hurdles for traders (retail and institutional alike) to access the new asset class as the full MiFID II compliance makes us more transparent, reliable, trustworthy and enables equal access for all,” Gubo added.

The State of Crypto

Unfortunately, many institutional investors still regard the unregulated exchanges that dominate the crypto market as risks due to the lack of transparency. In fact, as it stands the European Union is yet to come up with a unified position and regulatory requirements for the cryptocurrency exchanges operating in the territory.

As for the MiFID II which came into effect at the beginning of 2018, the licensing process is quite explicit and will certainly do for now. To put this into perspective, it requires that the companies seeking its license prove that they have operated fairly, honestly and professionally in the best interests of the users of their platforms. The institutions also have to comply with a number of reporting, transparency and capital requirements.

nasdaq-bitcoin

Nasdaq, Fiat and Crypto Firms Discuss Crypto Regulation

The crypto industry is well on its way to mainstream adoption albeit with a few though significant setbacks such as the shakeup of the industry’s history of shady transactions and fraud. Fortunately, Nasdaq Inc. believes it has just what it takes to get clear the obstacles that have impeded progress in as far as the legitimization of cryptocurrencies is concerned.

Bloomberg reports that earlier this week Nasdaq Inc. hosted a closed-door meeting that was attended by half a dozen cryptocurrency companies and mainstream institution. These included Cameron and Tyler Winklevoss’ crypto exchange platform, Gemini. The main agenda of the meeting was a discussion pertaining to ‘how to encourage the cryptocurrency industry to do things that will improve its image and validate its potential role in global markets’. A source familiar with meeting also confirmed that the parties that attended the meeting also discussed the potential implications of future regulation of digital currencies, the necessary tools for such an initiative as well as what surveillance would be needed for such a future.

Certainly Not the Last

Nasdaq has recently announced a partnership cum collaboration with Gemini, who as mentioned earlier also attended the closed-door meeting. While both companies declined to give any comments on the meeting and what was discussed, Nasdaq did confirm that the meeting did indeed take place. Their collaboration will see Nasdaq tap Gemini’s SMARTS market Surveillance, an industry benchmark technology that is extensively used by Wall Street firms.

It has further been confirmed that the meeting was not the last of its kind and this is a clear indication that cryptocurrency startups are working harder towards achieving mainstream adoption and mollifying the anxieties of regulators. Considering how often regulatory clampdowns occur, stakeholders in the cryptocurrency industry are starting to employ more forward-thinking and proactive approaches to ensure its survival.

By ensuring that both crypto and fiat firms work together, Nasdaq believes that the legitimization of digital currencies will have lesser setbacks. To this effect, the company has already partnered with a number of cryptocurrency exchanges in a bid to foster or facilitate collaboration on some of the most significant impediments to crypto regulation.

“I think the technology is fascinating and it’s a very sound technology. It’s just a matter of making sure that the community is all-embracing it together,” Adena Friedman, the Nasdaq Chief Executive Officer said.

One of the most recent issues that will hopefully be addressed by this initiative is the move by United States regulators to classify digital assets as securities instead of utility tokens. The US crypto community is concerned that this move will result in some adverse effects on the emerging cryptocurrency sector.

Crypto_on_keyboard

New Paper Affirms Belief That Bitcoin Will Replace Fiat

Bitcoin and other cryptocurrencies have always had a massive backing which about to grow even bigger thanks to a recent study is carried out by researchers at Imperial College London. According to a paper by the researchers titled “Cryptocurrencies: Overcoming Barriers to Trust and Adoption”, bitcoin and other cryptocurrencies will be subject to massive adoption as means of paying for goods and services in the coming decade.

The study which was sponsored by eToro focused on various barriers to trust and mainstream adoption of crypto within the current setting. It further listed three main criteria that would propel bitcoin and other digital currencies towards mainstream adoption, that is, ability to act as a store of value, a medium of exchange and a unit of account. While cryptocurrencies have already fulfilled one of the criteria as they are used by millions of people around the world as a store of value, the researchers said they will have to overcome setbacks such as regulation and scalability if they are to fulfill the other two criteria.

“The world of cryptocurrency is evolving as rapidly as the considerable collection of confusing terminology that accompanies it. These decentralized technologies have the potential to upend everything we thought we knew about the nature of financial systems and financial assets,” said Professor William Knottenbelt from Imperial College London. “There’s a lot of skepticism over cryptocurrencies and how they could ever become a day-to-day payment system used by the man on the street. In this research, we show that cryptocurrencies have already made significant headway towards fulfilling the criteria for becoming a widely accepted method of payment.”

eToro, the brokerage firm that facilitated the research believes that bitcoin already exhibits all the important characteristics of money and all that is left is advocacy for mainstream use.

“The first ever bitcoin transaction took place a little over eight years ago, and today we are already seeing it begin to meet the requirements of everyday money. Given the speed of adoption, we believe that we could see Bitcoin and other cryptocurrencies on the high street within the decade. There are of course barriers to mainstream adoption, but they are far from insurmountable,” Iqbal Gandham, the managing director of EToro UK commented on the research.

Regulation Is the Final Step

Many experts agree that even though bitcoin has already evolved well enough to be considered as a standard means of performing transactions, regulation is the only thing holding it back. If bitcoin and other digital currencies are to become the medium of exchange we are all hoping they will become, then favorable regulations are more than necessary. This is particularly of grave importance since some governments have taken negative stances towards cryptocurrencies especially because they have been used to facilitate criminal activities in the past. With regulation, though, this should not be much of a problem.

RBI_Cryptocurrency

Could It Be the End of the Cryptocurrency Era in India?

This year has not been particularly great for cryptocurrency users in India. This began about three months ago when the Reserve Bank of India (RBI) made an announcement that it would no longer deal with or provide services to any business entities or individuals dealing with digital currencies. While some of the cryptocurrency exchanges in the country – like BTCXIndia – chose to comply with the RBI’s new regulations, a decent number of the remaining exchanges as well as the Internet and Mobile Association of India (IAMAI) chose to file a petition regarding the decree at the Supreme Court.

Unfortunately, the petitions did not bear any fruit for the petitioners as, at the end of the hearing, the Supreme Court chose to back the RBI’s stance despite its flaws while at the same time declining to give the exchanges in interim relief. Many proponents of the crypto industry have pointed out that the apex court’s verdict indeed paints a bleak picture of the future of crypto in the country. This sentiment is further amplified by the fact the while the country is seemingly cracking down on the industry, its global counterparts “are currently observing the crypto space more closely and implementing better, more conducive regulation.”

Even though many disagree with the decision that was made by India’s Supreme Court, some stakeholders in the crypto industry still believe that they have a fighting chance – the general idea is that the stance is a temporary one. All the remaining petitions are scheduled to be heard on July 20 and hopefully, more conducive verdicts will be given then.

More Input from the Government May Be Necessary

The government of India has been quite enthusiastic about blockchain technology, the technology that digital currencies are based on, but the same cannot be said when it comes to where they stand as far as the actual digital currencies go. Now, it seems that one of the ways of securing the crypto industry in India would be to rally for clarity in government policy relating to cryptocurrencies.

“By laying a patchwork of laws without an overarching framework or policy, the crypto-industry today is in a uniquely uncomfortable position where it is taxed without being accorded legitimacy as an industry by the parliament.  One would hope that the government attempts to take measures to accord legitimacy by legislation that attempts to balance its need for transparency, with the inherent anonymity associated with cryptocurrency trading,” Akash Karmakar, an expert from Veritas Legal said to Entrepreneur India.

Mr. Karmakar called for the government to formulate a policy that “could set out overarching principles accordingly giving legitimacy to the industry, rather than legislating for problems as they occur, and have the law trail the technology.”

There are many other options that cryptocurrency investors can use to trade but it is advisable not to panic yet. Perhaps all that is needed is for some patience as the industry recovers from this setback.

Reserve_bank_of_india

Reserve Bank of India Admits That Crypto Ban Was Uninformed

On April 5 this year, the Reserve Bank of India (RBI) issued a controversial decree requiring all of the country’s regulated financial institutions to stop providing services to business dealing in crypto within a three month period. According to the bank, the move was formally meant to protect consumers and prevent money laundering – going forward, the bank would be forming a working group was going to be tasked with studying the feasibility of issuing a state-backed cryptocurrency.

As it turns out, evidence has surfaced pointing out that the RBI has not made any serious effort towards studying the principles, the nature and the usage of cryptocurrencies. Prior to the crypto ban, no internal committee had been formed to investigate the purported risks associated with crypto trading and, as such, the ban was not backed by a substantiated decision from experts.

Naturally, the decision to ban the cryptocurrencies did not sit well with Indian cryptocurrency traders and exchanges. While some of the cryptocurrency trading platforms have decided to shift their operations to other crypto-friendly jurisdictions, many others opted to challenge the ban in the Supreme Court.

“The foremost reason we are fighting is because we know that banning is next to impossible and it will make things worse for everyone – for the Reserve Bank, for the government, for the tax department, and for the user. In addition, it will push India back in reference to blockchain adoption across the world. We always have an option to relocate to another country to carry our business, but that’s not the solution. If we cannot convince our own government, we cannot expect other governments to support us,” said Mr. Kunal Barchha, the co-founder of Coinrecoil, an Indian-based digital asset trading platform.

The proponents of crypto India have based their argument on the fact that Central banks do not have the authority to restrict or bank regulated commercial banks from dealing with any industry unless the said industry is declared as completely illegal.

RBI Eyeing Its Own Cryptocurrency

The government of India has not yet declared cryptocurrencies as illegal, and this makes the case for the entire crypto industry in the country. Furthermore, the RBI has been reportedly considering the idea of launching its own cryptocurrency and this is a sign of a possible reversal of the crypto ban. If this is true, the bank and the government can certainly not ban cryptocurrencies simply because they also intend to move into the space.

According to Ripple’s Global head of infrastructure, Dilip Rao, the RBI’s plans to launch a digital currency will definitely reshape the country’s financial landscape in case it comes to pass.

“There is a great regulatory comfort with Ripple Net, particularly in the light of the Bank for International Settlements’ policy requiring central banks to have a backup for payment systems having non-similar technology,” Mr. Rao said in a June 15 report that was published in the Times of India.

investigate

New York Legislature Proposes Creation of Crypto Task Force

The past few weeks have been rife with extended efforts to regulate and control cryptocurrencies and New York has become the newest entity to launch its own efforts towards the same. The state’s legislature may soon send a cryptocurrency task force to investigate and report on the current state of global cryptocurrency as well as blockchain utility and legislation.

This move is part of the efforts by the state to establish formal cryptocurrency rules that could, in turn, contribute immensely to the widespread adoption and subsequent mainstream use of cryptocurrencies. The nine-person task force will be expected to provide a detailed report of their findings by December 2019 as stipulated in the summary from a meeting that was held on May 30.

New York has always been at the forefront of the cryptocurrency revolution with a number of innovation-focused approaches to digital currencies and blockchain technology. In fact, the state is hoping to capitalize on various new developments that will eventually make it a leader in blockchain technology.

As such, there is a need for cryptocurrency rules and guidelines so as to bring awareness to the users. This essentially makes the case for why the task force that was launched by the New York State Assembly. A report is expected from the Cryptocurrency Task Force department by 15 December 2019 – the report will be received by the governor who is the temporary Senate president and the speaker of the state assembly.

What Is Expected of the Task Force?

As reported by BCFocus.com an official document was released by the New York Assembly tasking the Cryptocurrency Task Force to report back on, among many other areas, the following key points:

  • Review of the impact of the department of financial services’ regulations on the development of digital currency, cryptocurrency and blockchain industries in New York State.
  • The number of digital currencies presently being listed and their approximate proportion of market share.
  • Report on the number of exchange happening in New York and their average trade per month.
  • Impact of cryptocurrency on state and local tax receipts.
  • Different types of departments who are investing in cryptocurrency.
  • The energy consumption necessary for coin mining operations and other policy considerations related thereto;
  • The transparency of the digital currency marketplace and the related potential of market manipulation and other illegal activities.
  • A review of laws and regulations on the digital currencies used by other states, the federal government, foreign countries, and foreign political and economic unions to regulate the marketplace.
  • Legislative and regulatory recommendations, if any, to increase transparency and security, enhance consumer protections, and to address the long-term impact related to the use of cryptocurrency.

New York is among the growing number of states that are spearheading the gradual transition towards better understanding and the inevitable widespread adoption of the burgeoning technology.

IMF

IMF Director Urges Central Banks to Compete With Crypto

While the role of cryptocurrencies in the evolution of currency remains a valid debate, one of the key concerns, especially for traditional financial institutions, has been the uncertainty associated with how these digital assets will affect the existing fiat monetary system that is under the control of central banks.

Dong He, the International Monetary Fund’s (IMF) Deputy Director of the Monetary and Capital Markets Department (MCM) recently published a report to address the challenges that the central banks have faced since the emergence of digital currencies. In the report, He elaborated his belief that someday when they achieve wider adoption, cryptocurrencies and other crypto assets may reduce the demand for money from the central banks.

“As a medium of exchange, crypto assets have certain advantages. They offer much of the anonymity of cash while also allowing transactions at long distances, and the unit of transaction can potentially be more divisible. These properties make crypto assets especially attractive for micropayments in the new sharing and service-based digital economy,” he wrote.

At the moment, most, if not all, existing cryptocurrencies are plagued by criticisms pertaining to their capacity to be a dependable medium of exchange. Therefore, it is safe to say that, for the time being, digital currencies are too volatile and too risky to pose much a threat to fiat currencies. In addition to this, digital currencies still lack the same degree of trust that is enjoyed by fiat currencies owing to the numerous cases of fraud, security breaches and operational failures that are characteristic of the crypto world.

However, this safe zone may not last too long – crypto assets and currencies are technological innovations and thus, over time, continuous development will certainly improve on some of these pressing issues and eventually make crypto just as appealing as fiat currencies.

Banks Advised to Step Up

A future where crypto assets are just as acceptable as fiat, or even more appealing than central bank money, is very possible and perhaps Mr. He has already seen its inevitability. In fact, he did mention that the only factor keeping crypto assets from rapid adoption is their volatility.

According to the IMF Deputy Director, central banks have the opportunity to effectively adapt with the times by addressing some of the shortcomings of the traditional global banking ecosystem in order to compete well with the emerging and rapidly growing digital currency technology.

“That means rigorously applying measures to prevent money laundering and the financing of terrorism, strengthening consumer protection, and effectively taxing crypto transactions,” he explained. “The best response by central banks is to continue running effective monetary policy while being open to fresh ideas and new demands, as economies evolve.”

The sentiment that crypto will eventually grow to be a formidable opponent in the mainstream financial industry is shared by many including Christine Lagarde, the IMF Chief who during an event in March proposed that regulators should deploy similar technological mechanisms in order to “fight fire with fire.”

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U.S., Canada Regulators Launch Crackdown on Crypto Fraud

Governments, regulators, and researchers are finally bringing to the light some of the less talked about issues in crypto space thanks to recent developments such as the Chinese study that unearthed the fact that there had been 421 token sales. This is a pretty huge number and in light of many other scandals of a similar kind and magnitude within the same space, regulators in Canada and the United States have recently launched a crackdown on fraudulent Initial Coin Offerings (ICOs).

The crackdown operation that was dubbed “Operation Cryptosweep” by the North American Securities Administrators Association (NASAA) involved a series of coordinated enforcement actions by state and provincial securities that were intended to clamp down on fraudulent cryptocurrency related investments as well as the entities that were backing them. Among the participants of this operation were regulatory entities from over 40 jurisdictions across North America. So far, Operation Cryptosweep has yielded about 70 inquiries and investigations alongside 35 enforcement actions that have either been completed or are pending.

 “Not every ICO or cryptocurrency-related investment is fraudulent, but we urge investors to approach any initial coin offering or cryptocurrency-related investment product with extreme caution,” said Joseph Borg, NASAA President and Director of the Alabama Securities Commission. “The persistently expanding exploitation of the crypto ecosystem by fraudsters is a significant threat to Main Street investors in the United States and Canada, and NASAA members are committed to combating this threat. Despite a series of public warnings from securities regulators at all levels of government, crypto criminals need to know that state and provincial securities regulators are taking swift and effective action to protect investors from their schemes and scams.”

In addition to participating in NASAA’s efforts, the state and provincial regulators will be collaborating with the Securities and Exchange Commission and the Commodity Futures Trading Commission to ensure that the organization’s goals of providing a safe crypto space are met.

Praise from All the Right Places

NASAA’s efforts have been lauded by a number of stakeholders operating in or in association with the cryptocurrency space – these include traders, crypto experts, and even members of the mainstream financial industry. Among the most notable supporters of NASAA’s initiative is Jay Clayton, the United States Securities Exchange Commission (SEC) chairman, who went as far as releasing a statement expressing his delight in NASAA’s execution of the crackdown.

“I applaud our fellow regulators in the United States and Canada who are coordinating and participating in efforts to police fraud in the Initial Coin Offering (ICO) markets. These state and provincial regulators play a critical role in protecting Main Street investors.” Clayton said in the statement. “The enforcement actions being announced by NASAA should be a strong warning to would-be fraudsters in this space that many sets of eyes are watching, and that regulators are coordinating on an international level to take strong actions to deter and stop fraud.”

crypto-chips

Crypto Gambling Watch Dog Ramps up Its Operations

It has been a remarkable past few months for cryptocurrencies as they have rapidly grown to be quite popular in nearly all corners of the globe. In essence, this can be likened to the present day gold-rush and no one wants to be left behind. One of the areas where crypto has seen heavy adoption and usage is the gambling industry.

According to a statistical report, since 2014 approximately 4.0 million BTC has been placed on bets that equate to about $37 billion. This, when compared to the global statistics, is a just a fraction of what the cryptocurrency gambling industry is capable of. Clearly, the gambling industry is the winner here.

However, one of the most pressing issues when it comes to gambling is regulation which also extends to the crypto gambling space as well. That is where leading crypto gambling affiliate site Gamble.io comes in. It serves as a regulator that screens and reviews cryptocurrency-oriented gambling services and site so as to ensure they are safe and trustworthy to play on.

A month ago, the watchdog site completed its review of a bitcoin-based sports betting site known as Cloudbet – the review not only confirmed that Cloudbet’s solid reputation is not a fluke but also pointed out some of the aspects that needed to be improved. This review was a clear indication of how serious Gamble.io is about ensuring that gambling in crypto is safe for everyone.

Gamble.io has recently laid down its regulations on another crypto gambling operator known as BitStarz which also happens to be known for being a reputable gambling operation. Gamble.io has put BitStarz on its casino of the month spot thanks to the operator’s unique approach to merging the use of both fiat currency and crypto. The full review also points out some of BitStarz’s best attributes that include great overall play selection, reliability as well as mobile compatibility.

“Due to the fairly large number of new players in the game, we were not able to conduct our studies as quickly as we had hoped. Our reviews and studies consist of multiple phases from depositing, game selection, customer service and anything else worth knowing for a crypto player. For example, testing the various games from different casinos took a little longer than expected. However, now we’ve completed the task and are proud to present our findings. We continue to be on the lookout for new crypto casinos,” said Matt Beardsley, the Gamble.io spokesperson.

Bitcoin_regulation

Taiwan Central Bank Poses Money Laundering Rules for Bitcoin

The Central Bank of Taiwan has recommended new rules that are meant to bring bitcoin under the island’s Department of Justice’s anti-money laundering regulations. In October 2017, Taiwan’s Financial Supervisory Commission (FSC) openly showed support for Initial Coin Offerings (ICOs), cryptocurrency, and blockchain adoption and innovation in the country.

However, the situation has since changes especially due to the concerns that have been raised about bitcoin’s recent price plunges. In response to these concerns, the central bank governor, Yang Chin-long, said in a meeting with Taiwan’s Legislative Yuan Finance Committee that some of the banks “response measures” to the “opacity” of bitcoin transactions would include reminding investors about the risks. This will be followed by anti-money laundering regulation of bitcoin.

As it stands, the central bank has been diligently monitoring the volatile movements of bitcoin prices. This move was, however, partially prompted by parliamentary enquiries pertaining to the digital currency. It is still too early to tell if the ministry will support the introduction of anti-money laundering rules for bitcoin but it is still a great milestone for Taiwanese authorities in their bitcoin regulation agenda.

The Taiwan Central Bank’s proposed regulations came just a month after Sheu Yu-jer, the island’s finance minister, expressed his opinion that cryptocurrencies should be taxed. The minister further added that the agency is currently evaluating ways to implement relevant taxation rules.  A number of neighbouring Asian governments have already put in place cryptocurrency regulations under anti-money laundering rules that are primarily meant to prevent financial crimes.

South Korea, for instance, officially prohibited its domestic banks from providing virtual and anonymous accounts for cryptocurrency exchange users. It further mandated a new real-name verification process that took effect in February 2018. On a similar note, in early March, Malaysia ushered in an anti-money laundering policy that stipulated that know-your-customer processes have to be adhered to in all cryptocurrency activities.