Policy Archives -
The central bank of Lithuania has updated its position on cryptocurrencies and tokens issued through initial coin offerings. The regulator has revised the definition of these assets specifying the conditions under which financial institutions can operate with digital money and accept crypto payments.
The Term ‘Virtual Assets’ Replaces ‘Virtual Currency’
The governing board of Bank of Lithuania, the institution responsible for the Baltic nation’s monetary policy and financial markets, has recently released an updated version of its position pertaining to digital currencies. The regulator said it has taken into account the current market developments and evolving regulatory regimes in other jurisdictions.
In an announcement published on its website, Lietuvos Bankas reveals its intentions to provide all existing and potential financial market participants (FMPs) with a “level playing field.” This includes entities organizing initial coin offerings (ICOs) and businesses providing services to Lithuanian residents who want to invest in this type of financial products.
Responding to general questions about cryptocurrencies, the bank now says it has substituted the term “virtual currency,” used previously in regards to digital coins, with “virtual assets.” The new policy introduces strict rules for FMPs and describes under what circumstances they can work with virtual assets, including for payments.
Crypto Funds Open Only to Professional Investors
The financial institution emphasizes, however, that the underlying principles of its position have remained unchanged. Bank of Lithuania notes that companies offering financial services are required to separate their main activities from those associated with virtual assets.
Financial organizations are still not permitted to receive payments directly in cryptocurrency, give out crypto credits or use digital assets as collateral, except when the tokens are considered securities. The payments they accept in their accounts should only be in fiat currency to presumably limit risks associated with digital coins.
On the other hand, the new policy allows these companies to receive cryptocurrency payments processed by third-party platforms that convert the amounts to local fiat. When crypto-related services are provided, risk mitigating measures such as customer identification, limited movement of the virtual assets within the FMP and coverage with traditional assets should be applied.
The central bank’s updated position creates conditions for the registration of investment funds dealing with digital assets. However, these entities will be able to provide services only to professional investors. A number of such funds operate in other countries, the bank says, noting that they can do that in Lithuania too if they comply with the requirements of the country’s legislation and the bank’s guidelines.
Lithuania to Allow Equity ICOs
Lietuvos Bankas has also answered several questions regarding initial coin offerings (ICOs). The regulator stated that equity ICOs can be held via crowdfunding platforms and security tokens can be issued. Such activities are currently governed by country’s crowdfunding and securities laws.
The offering of crypto securities to the public should also comply with the respective EU directives that have been transposed into the Lithuanian legislation. One of the requirements is to indicate the other member states where the tokens will be placed so that the bank can notify local authorities.
What is your opinion about the changes in Lithuania’s regulatory policy toward cryptocurrencies? Share your thoughts in the comments section below.
Images courtesy of Shutterstock.
At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.
The post Lithuania Central Bank’s Policy Update Opens the Door for Crypto Payments appeared first on Bitcoin News.
Cryptocurrency wallet service provider Bitgo has secured a $ 100 million policy through Lloyd’s insurance to cover crypto assets that are completely under the company’s control, such as those held in its business wallet and custody offerings. The policy covers issues like insider theft by employees, loss or damage of private keys and hacks.
Insurance to Cover Hacks, Theft and Loss of Keys
According to a statement released on Feb. 19, Bitgo, which provides custodial services for more than $ 2 billion in digital assets, said its business wallet customers will now be able to buy theft insurance and a key recovery service called Lost Key Cover. This will be done through Digital Asset Services, an insurance provider overseen by the Financial Conduct Authority, the U.K. financial services regulator. The key recovery service will be available for purchase either as an annual subscription or when needed, the company said.
Custodial assets held completely by either Bitgo, Inc. or Bitgo Trust Company are insured for up to $ 100 million through insurance group Lloyd’s. The assets will be covered for third-party hacks, physical loss or damage of private keys, insider theft by employees and other hazards. At the end of 2017, Lloyd’s had about $ 44 billion in gross written premiums. The insurer has a presence in nearly 200 countries and is one of the world’s largest insurance and reinsurance marketplaces.
Mike Belshe, chief executive officer of Bitgo, claimed the cover to be the “most complete insurance offering in the industry,” adding:
It is not always easy for some clients to understand under what circumstances their investments are insured and to what extent their loss would be covered. We are changing that by being more transparent than any other company about the terms of our coverage. Transparency and accuracy is essential for building trust in the market.
Lessons for Quadrigacx
Whereas traditional bank deposits are insured up to a certain threshold, cryptocurrency deposits generally are not, or only to a limited extent, such as exchanges insuring funds kept on their hot wallets, but not in offline cold storage. The Quadrigacx saga, in which the crypto exchange’s founder died with keys to $ 145 million worth of cryptocurrency, underscores the need for insurance protection. When CEO Gerald Cotten suddenly died in India in December, he apparently took with him the passwords to a multi-million-dollar fortune belonging to investors, which neither his work colleagues, court nor his wife can locate.
Commenting on the Bitgo deal, Nicholas Edwards, an official with Lloyd’s said: “We have been working hard to tailor a bespoke insurance product for Bitgo in this new, rapidly developing and complex sector. Following a thorough review of Bitgo’s security and controls we are delighted to have delivered an innovative solution that enables our client to develop and grow its business with confidence and security.”
San Francisco-based Bitgo claims to process 15 percent of all onchain global bitcoin transactions and $ 15 billion per month across all cryptocurrencies. The company is backed by the likes of Craft Ventures, Galaxy Digital Ventures, Goldman Sachs, Redpoint Ventures, and Valor Equity Partners.
What do you think about insurance cover in cryptocurrency? Let us know in the comments section below.
Images courtesy of Shutterstock.
Express yourself freely at Bitcoin.com’s user forums. We don’t censor on political grounds. Check forum.Bitcoin.com
The post Bitgo Obtains $ 100M Insurance Policy to Cover Crypto Assets appeared first on Bitcoin News.
Did Japanese PM Shinzo Abe nominate President Trump for the Nobel Peace Prize in advance of the Jan. 31 deadline? Abe isn’t saying, though he wasn’t entirely silent on the topic. He was asked about it in Parliament Monday, days after Trump asserted that Abe nominated him and had given…
An Indian government-supported blockchain summit is drawing many policy makers with the aim to speed up the development of cryptocurrency regulation in the country. Among expected participants are officials from the Indian Ministry of Finance and the panel currently tasked with drafting the regulatory framework for cryptocurrencies.
Fostering Crypto Ecosystem
Blockchain Summit India 2019 is supported by the Indian government’s Department of Science and Technology and the State Government of Uttar Pradesh. Taking place on Feb. 22 and 23, the event aims to accelerate blockchain and cryptocurrency policy formation for India. According to its website:
The summit is targeted towards enabling Indian government and ministries to speed up the process of developing a ﬂourished blockchain and cryptocurrency ecosystem.
Janina Lowisz, Marketing VP at Cashaa, the event’s fintech partner, told news.Bitcoin.com that “for the first time, the ministers from all relevant departments have come together with experts from the space as well as from leading universities and global brands to learn about and speed up the process of regulating cryptocurrency.”
In addition to the Department of Science and Technology and the State Government of Uttar Pradesh, other government participants include the Ministry of Commerce and Industry, the Ministry of Law and Justice, the Ministry of Human Resources Development, and the Department of Information Technology.
Ministry of Finance and Crypto Regulation
The regulatory framework for cryptocurrencies in India is currently being drafted by a committee headed by Subhash Chandra Garg, Secretary of Economic Affairs, the Ministry of Finance.
Lowisz confirmed to news.Bitcoin.com that “Ministry of Finance officials will be there [at the summit].” She also confirmed that “An invitation has been sent to Mr. Garg.” While noting that he himself is out of the country, she emphasized that “his team will be there to take the notes on Day 2.”
The report containing recommendations for cryptocurrency regulation in India is reportedly in its final stage. However, there have been conflicting reports of what the recommendations entail. One source suggests a ban on cryptocurrencies while another discusses legalization with strong riders.
The Ministry of Finance has also told Lok Sabha that it “is pursuing the matter with due caution,” noting that “It is difficult to state a specific timeline to come up with clear recommendations.” In January, the ministry invited reputed law firm Nishith Desai Associates to present its proposals for the crypto regulation. Meanwhile, the banking ban imposed by the country’s central bank, the Reserve Bank of India (RBI), is still in effect. The supreme court is set to hear the petitions against this ban at the end of this month.
What crypto regulatory framework do you think India will come up with? Let us know in the comments section below.
Images courtesy of Shutterstock.
Need to calculate your bitcoin holdings? Check our tools section.
The post Indian Blockchain Summit Draws Policy Makers to Speed up Cryptocurrency Regulation appeared first on Bitcoin News.
Instacart Inc. is changing a controversial policy on how it pays workers who pick up and deliver grocery orders after protests over a pay system instituted last fall.
The San Francisco startup said Wednesday that it will give workers the full tips from customers and stop docking parts of the tips…
A new US policy, which forces some asylum-seekers to remain in Mexico while their cases make their way through US immigration courts, began on Tuesday with one Honduran migrant.
CNN.com – RSS Channel – Regions – Americas
The Trump administration on Friday will start forcing some asylum seekers to wait in Mexico while their cases wind through US courts, an official says, launching what could become one of the more significant changes to the immigration system in years. The changes will be introduced at San Diego’s San…
Some politicians in India are clamoring for what they believe to be a quick fix to the country’s population problem: a two-child policy for Indian citizens.
CNN.com – RSS Channel – World
An Indian bank is reportedly forcing customers to agree that they “will not deal with any transactions related to cryptocurrency including bitcoins” when signing up for an account. In addition, there are reports of banks blocking accounts of their existing customers if they are found to have made crypto-related transactions.
Account Opening Agreement
Amid banking restrictions imposed by India’s central bank, the Reserve Bank of India (RBI), a major bank in the country, is reportedly asking customers to declare that they will not deal with any cryptocurrency transactions.
Twitter user Indiancryptogirl, “@Desicryptohodlr,” tweeted a screenshot of Kotak Mahindra Bank’s account opening agreement on Tuesday. One of the items customers must agree to reads: “I hereby declare that I will not deal with any transactions related to cryptocurrency including bitcoins. I also understand and agree that the bank reserves all right to close my account without further intimation in case I am found to undertake such transactions.”
Indiancryptogirl told news.Bitcoin.com:
Kotak Mahindra Bank Limited is one of the largest Indian banks. They have started to show this notice on account creation since past 1 month. This message comes as a ‘one last check’ before account creation and the cryptocurrency tickbox cannot be skipped or unchecked. As a result, to create an account with the bank, we have to agree to the message. Else we cannot begin any online banking service with the bank.
In addition, she said that the bank has been sending emails and SMS messages over the past six months notifying customers regarding its cryptocurrency policy. This follows the circular issued by the RBI prohibiting banks from providing services to crypto businesses.
However, she described that in the past month they have gone a step further and “have started forcefully obligating users to accept their notice while opening a new account with them.”
Enforcing RBI Regulations
Kotak Mahindra Bank also displays a similar message on their ATMs. Twitter user “@Vivekmacha” tweeted an image of the notice. It says: “Virtual currencies (VCs) are not legal tender and do not have any regulatory permission or protection in India. We request you not to make transactions involving any VCs from any of your account/s. For any such transactions, the bank shall be acting in accordance with the regulatory guidelines which include closing your account without further intimation.”
According to Indiancryptogirl, “Many other banks have been sharing such communication on email and SMS since April 2018 with all their customers.”
The official website of Kotak Mahindra Bank also states that all of its branches carry a notice stating that the bank has disallowed “credit, debit, or prepaid cards for purchasing or trading in bitcoins, cryptocurrencies, or virtual currencies.” The notice continues:
If the bank were to receive instructions from the authorities, it would have to close any account that transacts in virtual currencies, possibly without any intimation, and would not be able to provide assistance in case of any losses incurred due to such dealings.
A spokesperson for Indian exchange Instashift explained to news.Bitcoin.com that Kotak Mahindra Bank is “a non-nationalized private bank so they have to certainly adhere to all RBI regulations, else their banking licence would be ceased.” Banks like Kotak Mahindra are taking extreme precaution “about how their customers are using their system so that they don’t come under any RBI scrutiny in the future,” he elaborated.
Furthermore, the spokesperson noted that, based on his experience, banks “are keeping an eye on everyone’s account and checking the remarks of a transaction.” They are “strictly adhering to the RBI directions and blocking accounts which they feel are being used to trade cryptocurrency,” he added. If customer accounts come “under scrutiny and the bank officers read the crypto keywords in remarks,” the accounts “would definitely get blocked.” Nonetheless, he emphasized:
But as per law, it’s the individual’s choice what to do with his hard earned money and the RBI has not banned cryptocurrency.
What do you think of Kotak Mahindra Bank forcing customers to agree to their anti-crypto policy? Let us know in the comments section below.
Images courtesy of Shutterstock, Twitter, @Vivekmacha, @Desicryptohodlr, Financial Express, and Kotak Mahindra Bank.
Need to calculate your bitcoin holdings? Check our tools section.
The post Indian Bank Forcing Customers to Agree to Anti-Cryptocurrency Policy appeared first on Bitcoin News.