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| October 18, 2018

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Majority of Crypto Assets Are Highly Centralized, Research Finds

October 17, 2018 |

Majority of Crypto Assets Are Actually Centralized, New Research Finds

One of the central pillars of Bitcoin and cryptocurrency in general is that the system is decentralized, ensuring no single point of failure for adversaries to attack. However, new research has found the majority of assets in the ecosystem today to be highly centralized.

Also Read: Crypto Hedge Fund Launches Retail Public Offering in Japan

Taxonomy Report Reveals a Concentration of Crypto Power

Cryptocompare, the cryptocurrency market data aggregator, has published a Cryptoasset Taxonomy Report. The nearly 80-page document is designed to provide investors, regulators and the industry with an independent classification of coins and tokens to help differentiate from a long list of ever-growing options.

The report is based on an analysis of over 200 crypto assets, using more than 30 attributes and covering a range of economic, legal and technological features. Researchers analyzed these assets from a variety of perspectives including regulatory classifications, access and governance, market cap and volume data, level of decentralization, and distribution and supply concentration.

Charles Hayter, CEO of Cryptocompare, said: “Daily, retail and institutional investment communities express an appetite to invest and develop investment products and instruments based on crypto assets. Key to this is the demand for a single, independent and trustworthy taxonomy offering transparency, consistency and confidence.”

Majority of Crypto Assets Are Actually Centralized, New Research Finds

Just 16% of Cryptocurrencies Are Really Decentralized

In the section on centralization and counter-party, the report identifies how regulators might approach their decision as to whether an asset is centralized and thus possibly deemed a security. A fundamental point the researchers found is that decentralized and open source projects may not rely on a central issuer. Using this distinction, the taxonomy has explored the extent to which crypto assets are de facto decentralized.

The results of this analysis are quite disappointing for cryptocurrency proponents. Just 16% of crypto assets were found to be truly decentralized, with 55% categorized as centralized and the rest as semi-decentralized. Even just looking at payment tokens, defined as assets intended to provide a means of payment or value exchange which do not confer any claims upon the issuer, just 37% were found to be decentralized.

Majority of Crypto Assets Are Actually Centralized, New Research Finds

Do you think decentralization matters with cryptocurrencies, and if so, to what extent? Share your thoughts in the comments section below.


Images courtesy of Shutterstock and Cryptocompare.


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi’s Pulse, another original and free service from Bitcoin.com.

The post Majority of Crypto Assets Are Highly Centralized, Research Finds appeared first on Bitcoin News.

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Cypherpunk Essentials: A Beginner’s Guide to Crypto Privacy

October 17, 2018 |

The following op-ed on crypto privacy was written by Reuben Yap. He is the Chief Operations Officer of Zcoin. A corporate lawyer for ten years, specializing in institutional frameworks, Reuben founded one of SE Asia’s top VPN companies, bolehvpn.net. He graduated with a LLB from the University of Nottingham.

One of blockchain’s most notable and valued features is its transparency. In the original Bitcoin whitepaper, Satoshi Nakamoto described bitcoin as an ‘electronic coin’ with a ‘chain of digital signatures’, the history of ownership documented permanently and publicly. This idea of globally accessible financial records is a bold move away from the traditional banking system. This is precisely why privacy is an essential topic within the crypto ecosystem. 

Also read: Bitfinex Introduces Top Secret Banking System

Privacy and The Cypherpunks

In the Cypherpunk Manifesto of 1993, Eric Hughes writes that “we cannot expect governments, corporations, or other large, faceless organizations to grant us privacy … we must defend our own privacy if we expect to have any.” Built upon the philosophies of generations before them, the self-named cypherpunks were a group of activists advocating for cryptography and technologies that enhanced our privacy, which they believed was ‘necessary for an open society in the electronic age.” The movement was sustained by a regular mailing list that discussed ideas and policies relating to privacy, government monitoring, control of information and anonymity.

In 2008, Satoshi Nakamoto reignited this cypherpunk movement, giving a nod to the technology which emerged from the 90s cypherpunk era, such as Hashcash and b-money. The Bitcoin whitepaper itself notes that online privacy can be maintained by breaking the flow of information through anonymous public keys (cryptography). Satoshi’s Bitcoin was intended to be a “censorship-resistant” currency. The development of Bitcoin has indeed helped organizations like Wikileaks when governments cut them off from fiat-based donations. Notably, Wikileaks cypherpunk founder Julian Assange is still living in asylum in London’s Ecuadorian Embassy, awaiting charges by the U.S. government for publishing classified government documents.

While Bitcoin’s pseudo-anonymity was Satoshi’s solution for the individual’s right to financial privacy, the transparency of its blockchain is now proving to be a potentially dangerous flaw. As the flow of bitcoin to and from wallet addresses can be viewed by anyone, those with malicious motivations and the technical skill can uncover — and threaten — your real-world identity.

Bitcoin’s Privacy Flaw

Studies show that bitcoin transactions can be linked to individuals. Personal information can be interpreted and collected from blockchain data, exposing identities with potentially grave consequences. Researchers from Qatar University and the Hamad Bin Khalifa University found that “bitcoin addresses can be exploited to deanonymize users” and that an “address should always be assumed compromised.”

Cypherpunk Essentials: A Beginners Guide to Crypto Privacy

Additional studies conducted by ETH Zurich University and NEC Laboratories in Germany show that 40 percent of bitcoin users could be revealed in a simulated experiment where the digital currency was used to support daily transactions of university users.

More extreme consequences of this privacy flaw are emerging. Kidnappings and robberies targeting crypto users are becoming more commonplace in countries like Russia and Ukraine. The creator of the Prism cryptocurrency was beaten and robbed of his laptop which had 300 BTC stored on it. He was then forced to drink a pill with vodka that hospitalized him, so he wouldn’t be able to seek help from police straight away.

There is a vital need for the blockchain ecosystem to develop multiple anonymity solutions for cryptocurrency so that we can protect individual privacy and security. Without Tor or Dandelion protocols, for example, a person’s IP address can be linked to their wallet addresses. Privacy coins and their protocols work to address these flaws.

Breaking the Privacy Coin Stigma

Unfortunately, privacy coins have often been associated with illicit and illegal activity. Bitcoin itself was propelled into the media due to its associated use on the infamous Silk Road website and darknet, and claims that cryptocurrencies enable money laundering are rampant, albeit heavily exaggerated.

Some governments have even decided to ban privacy coins. In June, the Japanese Financial Security Agency (FSA) outlawed any cryptocurrencies that provide anonymity to users in an attempt to eliminate bad actors operating within the space. The ramifications could be far-reaching, as this decision may only end up pushing these kinds of cryptocurrencies into underground, unregulated territory, beyond the reach of the law or financial intermediaries.

While governments cannot effectively control or monitor any kind of peer-to-peer digital currency, they can still build suitable laws and regulations around them. In a regulated system, cryptocurrency exchanges and brokers must implement thorough Know Your Customer (KYC) and Anti Money Laundering (AML) practices, which in theory should deter criminal activity, as it does in the traditional financial system.

And just as we expect our financial histories and interactions to be kept private in traditional banking, the same should apply with cryptocurrency. The right to financial privacy should naturally extend itself to the blockchain, regardless of its potential to facilitate money laundering or illicit behavior.

Cryptocurrency has the potential to bring much-needed change to the world. Now we need anonymization mechanisms to ensure that our financial activity does not erode our privacy or endanger us.

Privacy Is a Basic Civil Right

We are all entitled to full financial privacy. This privacy bolsters our civil rights; the freedom to transact as we wish – without fear of exposure, consequence or persecution – and allows us to express full autonomy. The things we buy, the people we transact with, or where we choose to donate money is personal to us, yet can often be used to discriminate against us.

Cypherpunk Essentials: A Beginners Guide to Crypto Privacy

Buying a particular medicine, such as contraceptive pills, can be a dangerous affair for some women who come from backgrounds or cultures which forbid them. Those living with chronic illness, such as HIV, require lifelong medication. This information can be used to discriminate against people; as studies reveal, a person’s HIV status can lead to loss of their job or source of income if discovered.

As transactions on a blockchain are publicly visible and permanent, these could turn into a tool for surveillance and control, especially with authoritarian governments. In an era with increasing digital payments, as seen with the rise of Alipay and Wechat Pay in China, an individual’s purchase history can be used to categorize them. This is used as an ongoing rollout of China’s social credit system, where even buying diapers can give you a higher social score. To compound things, a low social score can have wide-ranging ramifications, from eligibility to loans, being barred from traveling to stigmatization.

Governments Can Seize Bank Accounts and Freeze Funds

Governments have the power to freeze and drain bank accounts without consent, or even seize cryptocurrencies if there is a connection to illicit activity. This is not a problem we face with physical cash, where whoever receives it doesn’t have to care where it is from and how it is used because of its fungibility. But even governments considered ‘benign’ have been known to exploit their power to seize money.

In the United Kingdom, banks were ordered to freeze the accounts of suspected illegal immigrants “hiding” in the country, making a “hostile environment” to force them out of the country.  In 2013, the Cyprus government withdrew up to 10 percent of every citizens bank accounts to help with their austerity measures. Over the past decade, the US Drug Enforcement Administration has seized more than $ 4 billion from citizens due to suspicions of criminal activity. Of these seizures, 81 percent were never formally charged. These are all examples of financial control.

Law enforcement agencies, governments and banks all hold unchecked power over our finances. Financial privacy enables citizens to resist this kind of oppression. We can make cryptocurrency fungible by preventing its traceability and enhancing its privacy. This will protect our civil rights, making it harder for authorities of any kind to seize our money.

Greater Ownership of Financial Data

Privacy also enables us to have greater control over our personal financial data. We live in a system where disclosing this financial information is often mandatory, for example when paying taxes, applying for loans, or even when buying things online. There are various actors such as charities or political candidates who seek out this financial data, commercializing it as a tool to often manipulate us, while marketing companies target demographics based on income.

Cypherpunk Essentials: A Beginners Guide to Crypto Privacy

The exposure of this financial information, however, can lead to much more devastating consequences, such as identity theft and financial fraud. In the first half of 2016 alone, identity theft accounted for 64 percent of all data breaches. Statistics provided by Kaspersky Lab also show that 52 percent of internet users  never fully recover their money stolen by cyber-criminals.

Many centralized cryptocurrency exchanges link your real identity to your crypto wallet address, with this sensitive information vulnerable to hacks. If malicious actors were to obtain this information, all your cryptocurrency transactions would be exposed and likely this information could be used in some undesirable way. There are even companies, like Chainalysis and Elliptic, which specifically aim to link identities to wallet addresses. While these teams claim to be targeting money laundering and cyber-criminals, all collected information is stored on a singular, centralized database.

As cryptocurrency begins to enter the mainstream, we need to secure our financial data to ensure our personal information does not fall into the wrong hands. Similarly, businesses may want to keep their suppliers, customers or partners private, for example to hide these details from competitors. Greater privacy on the blockchain eliminates this risk.

Shaping a New Economy

Everyone is entitled to financial privacy and protection of their personal data. We can restructure a new global economy that is founded on financial freedom and security. Cryptocurrencies that offer anonymization mechanisms will ensure everyone is granted these rights, while also defending against malicious actors.

The result is an economic system that will value both privacy and transparency. Our digital lives will be secured, while the blockchain will continue to hold us accountable.

Do you think Bitcoin’s privacy is flawed? Should having a fully private cryptocurrency be imperative? 


Images courtesy of Shutterstock


OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.

The post Cypherpunk Essentials: A Beginner’s Guide to Crypto Privacy appeared first on Bitcoin News.

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50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

October 16, 2018 |

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Fifty traders who use Indian crypto exchange Instashift have shared their thoughts on the current crypto environment in India. Most of them said that they “hodl” and would continue to invest in crypto despite regulatory uncertainty.

Also read: RBI Argues Supreme Court Should Not Interfere With Its Crypto Decision

Most Respondents Are Hodlers

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in IndiaA survey was conducted in the first week of October by Indian cryptocurrency exchange Instashift exclusively for news.Bitcoin.com. Launched in March, Instashift offers the buying and selling of over 80 cryptocurrencies.

Fifty active traders in India participated. The goal of the survey was to find out what they think about various crypto-related issues including their investment concerns, the crypto banking ban by the Reserve Bank of India (RBI), and whether they will keep investing in crypto despite regulatory uncertainty.

Among the 50 traders who responded, 43 said that they hodl while seven revealed that they invest short-term.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Furthermore, 40 traders believe bitcoin is a safe haven against rupee inflation while 10 traders disagree.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Crypto Investing Despite RBI Ban

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in IndiaIndia is currently drafting crypto regulations which were supposed to be ready in September but have been delayed. Meanwhile, RBI, the country’s central bank, has banned financial institutions under its jurisdiction from providing services to crypto businesses. A number of petitions have been filed against the ban. The country’s supreme court has been trying to hear them since Sept. 11, but the hearing has continually been postponed.

The banking ban by the central bank has adversely impacted some exchanges. One of the country’s largest crypto trading platforms, Zebpay, recently shut down its exchange operations due to the banking problem.

Despite the ban, 32 Instashift traders said that they would continue to invest in crypto even if the RBI intensifies its crackdown such as freezing crypto accounts. Another 12 traders noted that they are also likely to continue trading while six respondents said they would discontinue crypto trading.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

In addition, 36 traders believe that the Indian government will amend existing laws to accommodate cryptocurrencies. Ten respondents believe that the regulators will remove restrictions on crypto. However, only four traders believe that crypto will be legalized and regulated in India.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Preferred Cash-Out Methods

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in IndiaA number of crypto exchanges in India have come up with their own solutions to the RBI ban. Some have introduced exchange-escrowed peer-to-peer trading services, which they claim have gained much popularity.

Respondents were asked about their preferred methods of cashing out cryptocurrencies into rupees. Forty-eight traders said they prefer to cash out using peer-to-peer sites. Five traders prefer to use local cash deals, four prefer to use gift cards and online deals, and four others prefer to cash out using prepaid crypto Visa and Mastercard services.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

On Sunday, another cash-out method was introduced by one of India’s largest crypto exchanges, Unocoin. The company has launched crypto ATMs to bypass the RBI ban and allow its users to deposit and withdraw rupees. This option was announced after the Instashift survey had concluded, so it was not included in the survey.

As for where to keep their funds, 24 traders prefer to keep them in BTC, 14 prefer altcoins, and 12 specifically prefer stablecoins. Recently, an increasing number of crypto exchanges in India have started listing stablecoins such as tether (USDT) and trueusd (TUSD).

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Future Prospects of Crypto Ecosystem in India

Amid the banking ban, 35 respondents believe that the fear of regulatory uncertainty is the biggest hurdle stopping the Indian crypto economy from flourishing. Twenty-six traders believe that the lack of banking support is the biggest challenge. Twenty-five traders put the lack of understanding of the crypto industry as the most important factor, while 18 traders attributed the lack of liquidity in the market as the top reason.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

Despite all the hurdles, 41 traders said that they are long-term investors and will continue to invest in crypto. Seventeen traders admitted that they are apprehensive but expect the government to eventually create a positive environment for cryptocurrencies. However, four respondents are entertaining the idea of exiting the crypto space altogether.

50 Indian Traders Share Thoughts on Investing, RBI Ban, Future of Crypto in India

What do you think of the current crypto environment in India? Let us know in the comments section below.


Images courtesy of Shutterstock and Instashift.


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Bitcoin News

19 Companies Licensed to Operate Crypto Exchanges in Philippine Economic Zone

October 16, 2018 |

19 Companies Licensed to Operate Crypto Exchanges in Philippines Economic Zone

Nineteen firms have been granted provisional licenses to operate crypto exchanges by the Philippine government-owned Cagayan Economic Zone Authority. In addition, eight firms have paid the application fees and are being reviewed. A list of all 27 companies has been published.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

Provisional Licenses Issued

19 Companies Licensed to Operate Crypto Exchanges in Philippines Economic ZoneThe Philippine government-owned Cagayan Economic Zone Authority (Ceza) on Friday published a list of all companies that have been issued Financial Technology Solutions and Offshore Virtual Currency (Ftsovc) and Offshore Virtual Currency (Ovc) licenses as well as those that have paid the application fees and are being reviewed.

As of Oct. 12, a total of 19 companies have received provisional licenses — 17 were issued provisional principal licenses while two were issued provisional regular licenses. Ceza detailed:

Provisional principal licenses [allow licensees] to conduct offshore financial technology solutions business activities and offshore virtual currency exchange activities … Provisional regular licenses [allow them] to conduct offshore virtual currency exchange activities.

19 Companies Licensed to Operate Crypto Exchanges in Philippines Economic ZoneThe Philippine News Agency previously noted that “A principal license for Ftsovc operation under Ceza is priced [at] USD360,000, while a regular license is at USD85,000.”

Ceza Corporate Board Secretary Catherine Joy Alameda explained in July that provisional licenses are valid for six months. A company “will be able to acquire its permanent license when it is able to fully comply with the requirements of Ceza,” she described.

Licensees must have authorized capital stock of $ 500,000 with paid-in capital of $ 200,000. Furthermore, Ceza “requires each cryptocurrency exchange to invest at least USD1 million in a period of two years and must put up a back office in the Philippines,” the news agency wrote.

The 19 Licensees

19 Companies Licensed to Operate Crypto Exchanges in Philippines Economic ZoneThe 17 companies that have been granted Ftsovc provisional principal licenses are Golden Millennial Quickpay, Ultra Precise Investment, Liannet Technology, Rare Earth Asia Technologies Corp., Formosa Financial Holdings, Tanzer Holdings, Asia Premiere International, Orient Express Global, White Ranch Limited, Dragon Empire Developments, Galaxy Plus Developments, Tiger Wheel, Ipe Global, Cr8tiv Solutions Management, Sino-phil Economic Zone Agency Development and Management Corp., Digifin Technologies, and Hong Kong Yuen Shing Hong.

The two recipients of Ovc provisional regular licenses are Cezex Trading Pte. Ltd. and Unicorn Venture Investment Ltd.

8 Firms Being Reviewed

Ceza is also currently reviewing eight companies that have already paid the application fees for the two types of licenses.

19 Companies Licensed to Operate Crypto Exchanges in Philippines Economic ZoneSix companies being reviewed for provisional principal licenses are Bitventures Inc., Mbex Inc., Idragon Science Development Corp., Seryna Coin Metrics Inc., Lideres Inc., and Cx Tech Pte. Ltd.

Two companies, Csm Corp. and Birdmouse Co. Ltd., are being reviewed for provisional regular licenses.

In July, Ceza announced that “about 20,000 jobs in financial technology (fintech) will open up as soon as it awards the initial 25 principal licenses to be made available to qualified fintech companies,” the Philippine News Agency wrote, elaborating:

Ceza expects to earn PHP3.6 billion [$ 66.6 million] from the initial 25 Ftsovc licenses that it will issue, on top of the 0.1 percent share per transaction value generated from the operation of the fintech firms.

In August, Ceza partnered with Northern Star Gaming and Resorts Inc. to develop a crypto and fintech hub called Crypto Valley of Asia.

What do you think of Ceza licensing all these companies to operate crypto exchanges? Let us know in the comments section below.


Images courtesy of Shutterstock and Ceza.


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Fidelity Launching Crypto Custody and Trading Services

October 16, 2018 |

Fidelity Launching Crypto Custody and Trading Services

Fidelity Investments has announced the launch of a new company dedicated to providing cryptocurrency services including custody and trade execution. The services will be available to institutional investors such as hedge funds, family offices, and market intermediaries.

Also read: 160 Crypto Exchanges Seek to Enter Japanese Market, Regulator Reveals

New Crypto Company Formed

Fidelity Launching Crypto Custody and Trading ServicesLeading financial services corporation Fidelity Investments announced on Monday the launch of a new company called Fidelity Digital Asset Services LLC. The firm explained:

The company will offer enterprise-quality custody and trade execution services for digital assets, commonly referred to as cryptocurrencies, to sophisticated institutional investors such as hedge funds, family offices and market intermediaries.

The services offered will be in three areas: institutional-grade custody, trade execution, and dedicated client service.

Fidelity Launching Crypto Custody and Trading ServicesThe custody service will provide “a secure, compliant, and institutional-grade omnibus storage solution for bitcoin, ether and other digital assets,” Fidelity detailed, adding that its solution consists of vaulted cold storage and an access control system the firm described as “multi-level physical and cyber.”

The trade execution service will leverage the firm’s internal crossing engine and smart order router which “will allow for execution at multiple market venues.” Lastly, its clients “will have access to a dedicated team of client service specialists, from onboarding throughout the entire relationship with the company,” the firm elaborated.

Tom Jessop, head of Fidelity Digital Asset Services, told CNBC that the firm already works with 13,000 institutional clients. He noted:

These institutions require a sophisticated level of service and security, equal to the experience they’re used to when trading stocks or bonds.

With assets under administration of $ 7.2 trillion, Fidelity says it helps more than 27 million people invest their own life savings and employs more than 40,000 associates.

Fidelity’s Crypto Efforts

Fidelity Launching Crypto Custody and Trading Services
Abigail P. Johnson.

Fidelity Investments’ chairman and CEO, Abigail P. Johnson, first revealed her firm’s crypto plans in May last year. She said at the time, “I love this stuff … and what the future holds … I’d like to think that huge new markets and products will be built on these open platforms.”

The firm began researching cryptocurrency in its blockchain incubator in 2013. It has experimented with crypto mining and has integrated with Coinbase to allow customers to see their crypto balances on the Fidelity website. In 2017, Fidelity Charitable, a public charity, received $ 69 million in crypto donations.

In Monday’s announcement, Johnson commented:

Our goal is to make digitally-native assets, such as bitcoin, more accessible to investors … We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use.

What do you think of Fidelity launching crypto custody and trading services? Let us know in the comments section below.


Images courtesy of Shutterstock, Forbes, and Fidelity Investments.


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Zambia Launches Crackdown on Crypto Companies

October 15, 2018 |

Zambia Cracks Down on Cryptocurrency Businesses After Declaring Bitcoin Illegal Tender

The Bank of Zambia has started to clamp down on cryptocurrency-related businesses, mere days after declaring that it does not view digital coins such as BTC as legal tender. The crackdown began on Oct. 14, when the central bank announced an investigation into Heritagecoin Resources Ltd. for allegedly laundering money, according to local media reports.

Also read: Zambian Central Bank Declares Bitcoin is Not Legal Tender

Bank of Zambia Probes
Heritagecoin’s Deposits Business

In addition to the ongoing probe, the Lusaka-based fintech startup faces allegations that it has taken on traditional banking activities, such as accepting deposits — something it is not certified to do.

“The company … has since been offering financial services and collecting deposits from members of the public,” Kamufinsa Manchishi, a spokesperson for the Zambian Drug Enforcement Commission, told the Lusaka Times. The organization, which is assisting with the investigation into Heritagecoin, did not reveal the amount of money involved.

Zambia Cracks Down on Cryptocurrency Businesses After Declaring Bitcoin Illegal Tender

Manchishi added that: “As such, the commission together with the Bank of Zambia (BoZ) are currently investigating the company for activities contrary to the Prohibition and Prevention of Money Laundering, as well as the Banking and Financial Services Acts.”

On Friday, the BoZ declared that cryptocurrencies such as BTC are not legal tender, warning that those conducting transactions in the cryptocurrency would have nobody to turn to or blame in the event of market failure. However, it appears that the bank issued the decree solely because it wants to promote its depreciating fiat currency, the kwacha.

That said, the central bank has neither the power nor the legal backing to shut down the nascent Zambian cryptocurrency market. The BoZ would need parliament to amend the law that enabled its own establishment for it to be able to claim any authority over cryptocurrency investments or trading.

Nonetheless, the BoZ does have full control of the banking sector within which Heritagecoin Resources operates. Founded in June 2018, the company describes itself as a “digital currency financing and real estate development” company that also offers “other financial advisory services.” It does not appear that the firm is operating as an exchange, although it does accept deposits.

Suspicious Startup

Some of the promises made by the startup do look suspicious, as many of them are expressed in bombastic, pyramid-style jargon. “The concept is very simple; our partners are entitled to daily earning (sic) of 1.6 percent guaranteeing a payout of 38 percent after service charge. Maturity period is 25 working days,” the company says on its website. Promoters of Ponzi schemes often make similar claims, such as promising unusually high returns on deposits — often, those promises are too good to be true.

“Despite the name, they (Heritagecoin) don’t actually have a coin or token. It’s just a name. They are not an exchange,” Dominic Kapalu, a Zambian author and cryptocurrency proponent, told news.Bitcoin.com. “They collect funds from people which they trade in altcoins and bitcoin. I am not sure if they do mine as well. From the returns they get from the business, they share the profits with the investors.”

Zambia Cracks Down on Cryptocurrency Businesses After Declaring Bitcoin Illegal Tender
Dominic Kapalu

Kapalu claimed that the BoZ probe is not specifically focused on the cryptocurrency side of Heritagecoin’s business, even though its crypto unit was at risk of collapse if it didn’t take deposits. “The company is being investigated not because they deal in cryptocurrency,” Kapalu said via email.

“The investigation is to do with a product they have which requires members of the public to deposit money with the company and pay them interest after 28 days. (BoZ) rules state that any deposit-taking institution in Zambia needs to be licensed to prevent companies from defrauding citizens.”

Proceed With Caution, Authorities Warn

Manchishi, the Zambian Drug Enforcement Commission spokesperson, warned investors to remain wary of companies that promise extraordinarily high returns on short-term deposits. On Oct. 12, the BoZ also issued a statement warning individuals that use or trade cryptocurrencies that they were doing so at their own risk. The central bank said that such people would not have any regulatory recourse in the event of theft or fraud.

Zambia Cracks Down on Cryptocurrency Businesses After Declaring Bitcoin Illegal Tender

Additionally, the BoZ claimed that although bitcoin and other cryptocurrencies retained “some monetary characteristics, such as, being used as a means of payment on a person-to-person basis, cryptocurrencies are not legal tender in Zambia.”

On its charge sheet, the Zambian financial regulator claimed that virtual currencies are raising the risk of “money laundering” while  “financing activities of terrorism” and driving up “general consumer protection risks such as fraud and hacking.”

In May, the central bank in neighboring Zimbabwe used its authority over commercial banks to shut down cryptocurrency markets.

What do you think about the Bank of Zambia’s stance on cryptocurrency? Let us know in the comments section below.


Images courtesy of Shutterstock.


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi Pulse, another original and free service from Bitcoin.com

The post Zambia Launches Crackdown on Crypto Companies appeared first on Bitcoin News.

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PR: Roger Ver Joins Azbit Crypto Exchange Advisory Board

October 15, 2018 |

Roger Ver Joins Azbit Crypto Exchange Advisory Board

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

We are elated to announce that Roger Ver, CEO of Bitcoin.com and Mate Tokay, COO of Bitcoin.com joined Azbit as our Advisors!

Apparently the subject on everyone’s mind today is “Roger Ver is planning to open his own cryptocurrency exchange”. The global crypto community of course took his statement seriously since “Bitcoin Jesus” has a good eye for the major upcoming industry trends.

This is an approach that Azbit fully supports: we firmly believe that the world needs a truly multi-functional, reliable, and functioning exchange. And that is what we are working on right now. We are sure that people should be able to get all the financial services they need in a single place. This is why Azbit is building blockchain banking together with an in-built multi-exchange and investment platform.

Azbit’s multi-cryptocurrency exchange is currently 80 percent ready. It is based on the Bitsane crypto exchange, which has been successfully operating since 2016 with more than $ 8,000,000 in daily transaction volume.

The official announcement of the partnership between Azbit and Bitcoin.com was made right on board at Blockchain Cruise 2018. After signing a document Roger Ver, CEO of Bitcoin.com, said: “We’re gonna to promote all Azbit products at Bitcoin.com so the whole world gets to know the great project that Azbit is building. They build platform, we promote it, the users come and everybody is happy!”

“Bitcoin Jesus” Roger Ver is billionaire, crypto enthusiast, investor, businessman, and one of the most influential people in the world of crypto and blockchain. He has recently participated in at least four ICOs as an advisor. All these projects have successfully raised the planned hard cap – from 15 to 50 million USD.

Roger Ver and Mate Tokay are always on top of things – сertainly, this was the beginning of our significant cooperation. Our advisors’ boundless knowledge about cryptocurrencies and blockchain will raise Azbit project to the new level and offer our customers a truly great product.

The strongest aspects of the Azbit project:
Truly new idea of combining the most popular and in-demand financial services that currently exist separately.

Azbit AG (a joint-stock company) has been registered in Switzerland and thereby authorized to issue shares. It gives us the brilliant opportunity to issue tokenized shares during the crowdfunding campaign. AZ token holders will receive the dividends in this connection. Azbit will share 75% of the total platform’s fee; all payments (in AZ tokens) via airdrop will be made monthly. Income statements and audits will be published regularly on Azbit.com.

Azbit has obtained a securities exemption from the U.S. Securities and Exchange Commission (SEC) under Rule 506(c) of Regulation D. The project also has a Payment Institution license in the Czech Republic (in the E.U.)

Azbit had successfully finished Private sale and moved to the next level – Pre-ICO campaign is underway. Early investors can get the maximum bonus – up to 30%.

Website: https://azbit.com/
Page on Bitcointalk: https://bitcointalk.org/index.php?topic=4382120.0
Telegram: https://t.me/azbit_com
Facebook: https://www.facebook.com/azbit.news/
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Medium: https://medium.com/@Azbit_news

Contact Email Address
info@azbit.com

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

The post PR: Roger Ver Joins Azbit Crypto Exchange Advisory Board appeared first on Bitcoin News.

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Fincen Claims Iran Is Using Crypto to Evade Sanctions

October 15, 2018 |

ranian Bitcoin Transactions Estimated at $  3.8M Since 2013

The Financial Crimes Enforcement Network has warned U.S financial institutions that the Iranian government might be dodging economic sanctions by using cryptocurrencies. The document highlights challenges arising from peer-to-peer virtual currency exchanges and encourages banks to monitor blockchain ledgers for transactions tied to the country.

Also Read: Church Mining Cryptocurrency to Pay Higher Electricity Rates

Iranian Bitcoin Transactions
Estimated at $ 3.8M Since 2013

The U.S. organization, known as Fincen, issued the warning in an advisory to assist U.S. banks and other financial actors such as cryptocurrency exchanges in identifying “potentially illicit transactions related to the Islamic Republic of Iran.” The document includes a lengthy section relating to crypto, as well as an estimate that “since 2013, Iran’s use of virtual currency includes at least $ 3.8 million worth of bitcoin-denominated transactions per year.”

Fincen noted that “while the use of virtual currency in Iran is comparatively small, virtual currency is an emerging payment system that may provide potential avenues for individuals and entities to evade sanctions.”

P2P Exchanges Highlighted as
Key Crypto Conduit

Fincen Warns of Iran Using Crypto to Evade SanctionsWhile reports have indicated that the Central Bank of Iran has prohibited domestic financial institutions from touching cryptocurrencies, Fincen stated that “individuals and businesses in Iran can still access virtual currency platforms through … Iran-located, internet-based virtual currency exchanges; U.S.- or other third country-based virtual currency exchanges; and peer-to-peer (P2P) exchangers.”

Fincen said that P2P cryptocurrency exchangers are a significant means through which Iran can bypass economic sanctions. It defined such individuals as people who offer to purchase, sell or otherwise exchange virtual currencies, either face to face or through websites. It added that “P2P exchangers may operate as unregistered foreign (money services businesses) in jurisdictions that prohibit such businesses; where virtual currency is hard to access, such as Iran; or for the purpose of evading the prohibitions or restrictions in place against such businesses or virtual currency exchanges and other similar business in some jurisdictions.”

Financial Institutions Urged to
Conduct Due Diligence

Fincen also said that U.S financial institutions should remain aware of the “highly dynamic” nature of the global market for cryptocurrencies.

“New virtual currency businesses may incorporate or operate in Iran with little notice or footprint,” it explained. “Institutions should consider reviewing blockchain ledgers for activity that may originate or terminate in Iran.”

Fincen urged institutions to use technology to keep an eye on open blockchains and monitor P2P transactions. Examples of the latter could include “wire transactions from many disparate accounts or locations combined with transfers to or from virtual currency exchanges.”

In addition, the organization reminded institutions and individuals in the U.S. that handle virtual currencies to refer to a list of frequently asked questions on international sanctions that was published by the Office of Foreign Assets Control earlier this year. “Financial institutions and virtual currency providers that have (Bank Secrecy Act) and U.S. sanctions obligations should be aware of and have the appropriate systems to comply with all relevant sanctions requirements and (Anti-Money Laundering/Combating the Financing of Terrorism) obligations,” Fincen said.

Do you think regimes such as Iran will increasingly turn to cryptocurrencies to dodge economic sanctions? Or do you think the concerns outlined in the Fincen document are overblown? Share your thoughts in the comments section below!


Images courtesy of Shutterstock


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The Daily: Robinhood Reaches 25th State, Fake Adobe Crypto Malware

October 14, 2018 |

The Daily: Coinbase Ditches Crypto Index Fund, Robinhood Reaches 25th State

In today’s edition of The Daily we cover stories about Robinhood expanding to its 25th American state, recently discovered mining malware, Coinbase ditching its crypto index fund, and a new blockchain job for a former advisor to president Trump.

Also Read: US Court Issues Emergency Order Halting a Planned Initial Coin Offering

Robinhood Reaches 25th State

The Daily: Coinbase Ditches Crypto Index Fund, Robinhood Reaches 25th StateRobinhood Markets, the stocks, options and crypto brokerage app, has reached its 25th U.S. state. This means its free trading app is now available across half of America. The Menlo Park-headquartered company announced this week that it has expanded its services to Ohio.

With this latest expansion, Robinhood Crypto is now available in Ohio, Rhode Island, Tennessee, Arkansas, Alaska, Oklahoma, Arizona, California, Colorado, Florida, Georgia, Indiana, Iowa, Massachusetts, Michigan, Mississippi, Missouri, Montana, New Jersey, New Mexico, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. The app features support for BTC, ETH, BCH, LTC, DOGE and ETC.

Coinbase Ditches Crypto Index Fund

Exchanges Roundup: Ledgerx readies ETH Futures, Coinbase Partners With CaspianCoinbase, the popular US exchange, is ditching its crypto index fund that was designed to attract big investors in the field. The Coinbase Index Fund is a private fund that seeks to track overall performance of the cryptocurrencies listed on Coinbase’s exchange, GDAX. The minimum investment amount for the fund is $ 250,000 and the maximum is $ 20 million, with an annual management fee of 2%.

The San Francisco-based company first unveiled the fund on March 6 and the service was opened to investments on June 12, with Reuben Bramanathan, Product Lead of Coinbase Asset Management, claiming: “We’ve seen overwhelming interest from investors since we announced the fund earlier this year.” Now it appears that this overwhelming interest failed to materialize into actual clients, resulting in the service’s discontinuation.

The company is said to be shifting its attention to a new retail offering, Coinbase Bundle, a recently launched basket of cryptocurrencies investors will be able to acquire for as little as $ 25, as we detailed briefly in yesterday’s episode of The Daily.

Crypto Mining Adobe Flash Malware

The Daily: Coinbase Ditches Crypto Index Fund, Robinhood Reaches 25th StateHackers are using fake Adobe Flash updates to install malware on victims’ computers and hijack them to mine cryptocurrencies like monero (XMR), researchers from cyber security firm Palo Alto Networks Inc. have discovered. Organizations with decent web filtering and more educated users have a much lower risk of being infected by such fake updates, however, they note.

“In most cases, fake Flash updates pushing malware are not very stealthy … However, a recent type of fake Flash update has implemented additional deception. As early as August 2018, some samples impersonating Flash updates have borrowed pop-up notifications from the official Adobe installer. These fake Flash updates install unwanted programs like an XMRig cryptocurrency miner, but this malware can also update a victim’s Flash Player to the latest version,” the researchers explained. “Because of the legitimate Flash update, a potential victim may not notice anything out of the ordinary.”

Gary Cohn’s New Blockchain Job

Another top ex-Trump administration official has entered the crypto ecosystem, following Steve Bannon. Gary Cohn, former chief economic advisor to the President of the United States and former President and Chief Operating Officer of Goldman Sachs, has joined the Spring Labs Board of Advisors. Spring Labs is a startup developing a decentralized network for identity and credit.

“I have been very interested in blockchain technology for a number of years, and Spring Labs is developing a network that could have profound implications for the financial services sector, among others,” said Cohn. “I am excited to actively support the Spring Labs team in the development of this important business and network.”

What do you think about today’s news tidbits? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


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30 Crypto ATMs Launching in India — Unocoin Unveils Solution to RBI Banking Ban

October 14, 2018 |

30 Crypto ATMs Launching in India — Unocoin Unveils Solution to RBI Banking Ban

A major crypto exchange in India, Unocoin, has officially announced the launch of its crypto ATMs. CEO Sathvik Vishwanath told news.Bitcoin.com that, initially, the company plans to deploy 30 machines in three Indian cities. “These ATMs help people to cash in and cash out which was not possible before” due to the crypto banking ban imposed by the country’s central bank.

Also read: RBI Argues Supreme Court Should Not Interfere With Its Crypto Decision

30 Crypto ATMs in 3 Cities

30 Crypto ATMs Launching in India — Unocoin Unveils Solution to RBI Banking BanUnocoin has officially announced the launch of its cryptocurrency automated teller machines (ATMs). Last week, the exchange confirmed the existence of the project after someone spotted one of the machines and posted a picture of it on social media.

Sathvik Vishwanath, Unocoin’s CEO, revealed to news.Bitcoin.com on Sunday:

The first ATM will be operational in Bangalore tomorrow…In the first phase we plan to deploy 30 machines…The first one is in Bangalore followed by Mumbai and New Delhi in the upcoming week.

30 Crypto ATMs Launching in India — Unocoin Unveils Solution to RBI Banking Ban
Unocoin’s ATM. Photo credit: Twitter.

The company explained that all customers of Unocoin and its crypto-to-crypto trading platform, Unodax, can deposit and withdraw rupees using the ATMs. “Users are subject to some limits on deposits and withdrawals per transaction and per day subject to cash handling restrictions in India,” the exchange clarified. The minimum amount for deposits and withdrawals is 1,000 rupees (~$ 13.57) and must be in multiples of 500 rupees.

Vishwanath emphasized, “All coins on Unocoin and Unodax can be bought using the money deposited through ATM machines. We presently have 30 coins that can be bought.”

Established in 2013, the Bangalore-based crypto exchange now has 120 full-time employees. The exchange claims that it has processed transactions worth more than 2 billion rupees for over 1.3 million customers.

Solution to RBI Crypto Banking Ban

30 Crypto ATMs Launching in India — Unocoin Unveils Solution to RBI Banking BanIndia’s central bank, the Reserve Bank of India (RBI), issued a circular in April banning financial institutions under its control from providing services to crypto businesses. The ban went into effect in July and all crypto exchanges in India subsequently lost their ability to provide rupee deposit and withdrawal services. Unocoin announced the suspension of its fiat support on July 13. The company has been looking for new mechanisms to allow its users to deposit and withdraw rupees ever since.

Vishwanath clarified to news.Bitcoin.com that “The ATMs deployed by us do not need any banking partnerships. These are stand-alone machines that can accept and dispense cash,” elaborating:

These ATMs help people to cash in and cash out which was not possible before due to RBI restriction on banks to not provide bank accounts. The gap is now completely filled by these ATMs except that physical access is required to deposit and withdraw money.

How to Deposit and Withdraw INR Using Unocoin ATMs

In its Sunday announcement, Unocoin detailed how users can deposit and withdraw rupees using its ATMs.

30 Crypto ATMs Launching in India — Unocoin Unveils Solution to RBI Banking BanTo deposit INR, a user needs to “enter his user ID and the OTP [one-time password] that he just received as SMS on his registered mobile number,” the company explained. After confirming account details and depositing funds into the machine, the user’s account will be updated and funds credited for use on both Unocoin and Unodax.

To withdraw INR, “users have to make a request by visiting Unocoin.com or through Unocoin mobile app where he would specify [the] desired amount for withdrawal.” A 12-digit reference number from Unocoin will then be sent to the user to enter into the ATM, along with the OTP sent to the user’s registered mobile number.

What do you think of Unocoin launching 30 crypto ATMs in three Indian cities? Let us know in the comments section below.


Images courtesy of Shutterstock, Twitter, and Unocoin.


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