Thursday, October 18, 2018

Security Giant G4S Offers Protected Offline Cryptocurrency Storage

 


G4S (LSE: GFS), a security services provider with operations in more than 90 countries, guards everything from cash transfers to nuclear power plants and prisons. The London-headquartered company has now started to offer cryptocurrency protection, according to a recent report.

Secure Vault Storage
The company, which has more than 560,000 employees throughout the world, announced on Wednesday that it has developed a new service providing high-security offline cryptocurrency storage, to help to protect assets from criminals and hackers. And the company is already providing the service to an unnamed European exchange, according to the Financial Times. It charges clients based on the number of different offline storage devices they want to use to store their private keys, and reportedly uses its own existing vaults for the service, rather than newly built facilities.

The company's press statement confirmed that cryptocurrency exchanges are already turning to them for help. Dominic MacIver, senior risk analyst at G4S Risk Consulting, commented: "Our clients approach us to discuss solutions to their requirements because of G4S Cash Solutions' experience in protecting high-value items and G4S Risk Consulting's experience in developing bespoke solutions to complex challenges. Working with our clients, we are continuously applying their expert knowledge of crypto-assets and our best practice in physical security to a sector at the cutting edge of financial technology."

Heavily Restricted Access
The service is said to be more secure then other methods because G4S takes the keys offline, breaks them up and stores them in high-security vaults. Moreover, access to the sites in which they are held is said to be heavily restricted, with multiple layers of security. Clients can only gain access when all of the pieces are combined with specific technology.

"Offline storage has become a more established and secure way of storing crypto-assets," MacIver said. "At the same time, violent robberies and kidnappings in recent years have shown that the sector is still exposed to conventional criminal threats. In collaboration with our client, our security solution is built on a foundation of 'vault storage.' We not only take the assets offline, but break them up into fragments that are independently without value and store them securely in our high security vaults, out of reach of cyber criminals and armed robbers alike."

Bitmain predicted to be knocked from relevance; US tariffs of 27.5% now apply

 

Bitmain's planned initial public offering (IPO) was already facing significant resistance due to the myriad of issues and controversies plaguing the company. However, the future now looks even less bright, thanks to President Donald Trump.

The ongoing trade war between the U.S. and China will undoubtedly impact cryptocurrency mining equipment. This past June, the U.S. changed the classification of the mining rigs from "data processing machines" to "electrical machinery." Electrical machinery is subject to an import tariff of 2.6%—not unreasonable for any product. However, because of the trade war, the tariff schedule has been updated significantly. Instead of 2.6%, mining equipment manufacturers are now looking at the possibility of paying 27.6%.

Competition in the mining equipment manufacturing space is getting more serious. More than half of Bitmain's business relies on overseas sales. With the increased tariffs, the company will have a difficult, if not impossible, time offering products at prices that can beat those of its competitors.

Some of Bitmain's primary competitors, such as Squire, use chips manufactured in South Korea. These are not subject to the tariff schedule, nor are those produced in Taiwan. This will not only give companies that source products from these countries an edge, but it will also give rise to new competitors who will threaten Bitmain's ability to act in the mining space.

The company even recognized in its IPO filing that there existed the possibility it could be impacted by external forces. It said that its revenue could see declines based on tax rates "due to economic and political conditions." As Bitmain is already losing ground to competitors who are now producing mining rigs that are faster and more efficient, the tariffs could be the proverbial nail in the coffin that brings an end to the highly questionable IPO.

CoinGeek was already prepared for this eventuality, which is why the introduction of Antiguan-based bComm Association's Bitcoin SV (developed by nChain) is vital to the mining community. The full-node implementation software is now available and is quickly gaining favor. Don't just take my word for it—come check it out during Miner's Day at the upcoming CoinGeek Week Conference in London next month.

Thursday, October 11, 2018

A Bitcoin Rat Is Occupying Wall Street

 


Ten years after the financial crisis of 2008, an artist known as Nelson Saiers has placed his latest artwork across the street from the New York Federal Reserve building in the financial district. The piece is a giant sized and menacing-looking inflatable rat covered in Bitcoin code. The former Wall Street hedge fund manager and mathematician dedicates most of his time these days to his artisan loft where he produces visuals depicting the broken financial system.

A Visual Perspective of Finance and Art
Nelson Saiers giant-sized inflatable rat is covered in bitcoin code and is looking directly at the New York Federal Reserve.
There's some new street art located across the street from the New York Federal Reserve building that's been causing some attention. A tall balloon-like white rat covered in bitcoin code is tied to the ground looking like it's about to attack the structure. Nelson Saiers devotes his energy to artistic pieces that shine a light on the traditional finance system we deal with today. Saiers financial artwork has made headlines over the years after he left his trading position in 2014. 

The 8 ft white rat covered in Bitcoin code staged across the street from the central banker's lair represents an interesting time in history, because it is ten years after the 2008 financial crisis. Additionally, Oct. 31, 2018, marks the tenth anniversary of the Bitcoin white paper published by Satoshi Nakamoto. The inflatable white rat's creator, who is also known as the "Warhol of Wall Street," explained in an interview on Oct. 9 with Shreyas Chari his latest artwork does give a representation of these anniversary dates.  

"So this piece is slightly different from the inflatable rats you see around the city. It's loaded with Bitcoin code and a couple related equations," explained Saiers during the interview.

Saiers adds:  
About ten years ago, while TARP was bailing out the economy, Satoshi Nakamoto wrote this code along with the words; '03 Jan 2009 The Times, Chancellor on brink of second bailout for banks,' referencing the equivalent in England — Satoshi seemed pretty opposed to centralization and said it was doomed in the end. I wanted to be true to his views and reflect this in the artwork.

The Infestation of Sewer Rats
Over the last two decades, street art depicting the world's financial inequalities has become a significant movement globally. The prominent and controversial street artist Banksy has brought the art-form to a new height and the use of rats can be seen on lots of walls covered in graffiti throughout the past two decades.

The rat has been used in financial street art for two decades and has been popularized by the anonymous artist Banksy. Andreas Antonopoulos has also referred to Bitcoin as a "sewer rat." 
Banksy himself said the rat is something to look up to because these animals do whatever they want. "If you feel dirty, insignificant or unloved, then rats are a good role model. They exist without permission, they have no respect for the hierarchy of society," the artist explains in his writings. The innovation of cryptocurrency itself has been depicted as an uncaring 'honey badger of money' or anarchistic street rat many times over the years.  

In 2016 the computer scientist Andreas Antonopoulos referred to the Bitcoin protocol as a "sewer rat of currencies."       

"Bitcoin isn't living in a bubble — Bitcoin is a sewer rat," Antonopoulos detailed during his speech. "It's missing a leg. Its snout was badly mangled in an accident last year. It's not allergic to anything — In fact, it's probably got a couple of strains of bubonic plague on it which it treats like a common cold. You have a system that is antifragile and dynamic and robust."

Bitcoin Street Art Isn't Going Away Anytime Soon
Over the last two years or so Bitcoin and street art have melded together and many artists have been using the cryptocurrency for symbolism on walls. In Paris, France there's an artist named Pascal Boyart aka "Pboy," who leaves his cryptocurrency themed art and QR code on buildings throughout the city. The artist Cryptograffiti has made a name for himself as he spreads his Bitcoin-infused art across various cities within the US.

Bitcoin street art by Pascal Boyart aka 'Pboy.'
Saiers latest artwork and the many other artists located around the world shows there's a growing trend of mixing visually entertaining financial and political symbolism with cryptocurrencies. The artist's Bitcoin rat, however, is not permanent and Saiers has plans to remove the inflatable after the display.

Russian crypto exchange YoBit advertises pump scheme

 

Russia-based cryptocurrency exchange YoBit has announced a scheduled pumping of coins selected at random.

In its tweet, YoBit gave no specific reasons for its action, wherein "we will buy one random coin for 1 btc every 1-2 mins 10 times (total buy amount – 10 btc)." The exchange, which lists thousands of altcoins, also provided a timer 22 hours prior to the trades. As of this writing, there are six hours left before execution of the scheme.

We can only wait to see the effect on whatever coins are selected, but the tweet is notable for its unusual nature. Usually, when an asset is bought in the hopes of spurring demand from other investors, it is done more discreetly, so as to sell at a peak.

Last February, the U.S. Commodity Futures Trading Commission (CFTC), which has classified cryptocurrencies as commodities under its jurisdiction, had already warned the public of pump-and-dump scams, saying, "As with many online frauds, this type of scam is not new-it simply deploys an emerging technology to capitalize on public interest in digital assets." It remains to be seen, however, how regulatory agencies will react, given the forthrightness of the exchange.

Commenters on the YoBit tweet expressed disbelief, amusement, and outrage, as well as cluelessness. Several users on reddit have confirmed the existence of e-mails sent by the company, with address news-mailer@yobit.net, indicating that the exchange had not been hacked.

Already, trading platform Coinigy has tweeted its plan to delist YoBit from its network of cryptocurrency exchanges, "due to overwhelming negative experiences as documented on social media and forums, among other reasons." However, it said it would be "asking for feedback first. As a popular platform in the crypto trading space, it is essential for us to be diligent and not promote sites that may harm our users."

YoBit has been operating since 2015.

Tuesday, October 2, 2018

New Research Claims Most ICOs Have Profited Off Selling ETH

 


New Research Claims Most ICOs Have Profited Off Selling ETH
Bitmex Research is back with another detailed report, this time into the ethereum holdings of ICOs. Ethereum's downward trajectory has been attributed in some quarters to ICOs offloading ETH to pay the bills. If so, data suggests that those projects have profited handsomely off their ETH holdings in USD terms, despite its falling price.

Ethereum's tanking price, sliding from over $1,400 to below $200 in seven months, has alarmed many cryptocurrency investors. ETH is the backbone of the ICO economy, and its inability to sustain support levels against BTC has led to fears of there being a run on ethereum, akin to that which occurs when customers fear a bank lacks the funds to cover its liabilities. If Ethereum projects believe the cryptocurrency is likely to drop further, they will feel pressured to sell in order to maximize their capital, further accelerating the token's decline.

Commenters have been in disagreement over the extent to which ICOs cashing out has triggered ETH's downfall. Dapp Capitulation has been the go-to tool for anyone trying to keep track of which ICOs are moving ETH (presumably with the intention of selling) and when. In the last 30 days, for example, Status has sent 8,000 ETH to an exchange wallet and Decent has moved 20,000. New research from Bitmex and Tokenanalyst, however, provides a more holistic picture of ICO movements of ethereum. Its key finding?

Rather than suffering because of the recent fall in the value of ethereum, at the macro level, the projects appear to have already sold almost as much ethereum as they raised (in US$ terms).

The Coffers of Last Year's ICOs Are Not Yet Empty
In determining the profit or loss realized by Ethereum-based tokensales, Bitmex Research has created two columns: one for EOS and the other for everything else. Since EOS raised about as much as the rest of the market put together during its year-long fundraiser, it was necessary to record it separately to avoid skewing the data. A macro analysis of 222 ICOs found a total of 15.1 million ETH was raised, of which 11.3 million has been transferred out or sold. This leaves a remaining collective balance of 3.85 million ETH. Since EOS has offloaded all its ETH, this sum is shared among the other 221 projects.

The most useful data provided by Bitmex Research and Tokenanalyst is a calculation of whether ICOs that have sold a lot of ether can be expected to have made a profit or a loss. Broadly speaking, the older the ICO, the likelier it is to have profited from its ETH holdings. Projects that raised funds in late 2017 or this year, on the other hand, are almost certain to have seen the value of their crypto assets dwindle. Overall, the report finds non-EOS projects to have recorded net realized gains of $727 million through selling ETH, and to be sitting on another $93 million in unrealized gains i.e. ETH they've yet to sell.

Some Big Winners and a Few Losers
Not all projects have prospered: it's estimated that $34 million in ETH has been lost by projects being forced to liquidate their holdings at below the value they held during their crowdsale. The report concludes: "Despite the 85% reduction in the ethereum price from its peak, the projects have realised gains of US$727 million due to profits from ethereum they have already sold, often selling before the recent price crash. The 3.8m ethereum still on the balance sheets of these projects may not have that much of an impact on the ethereum price, as it represents a reasonably small proportion of the 102 million supply of ethereum. At the same time, on a macro level, the projects may be feeling reasonably confident rather than needing to panic sell."

Luke attacks Roger, is proven wrong, deletes evidence, fails to apologise

 


This time last week was a day Bitcoin Core developer Luke-jr would rather forget. It all started when the Core developer took note of a tweet by @TheCoinDad asking him "Why is your name popping up on Rogers screen at the WDMS?" This was of course, during a Roger Ver talk at the World Digital Mining Summit where we had the below image on display.

The slide during Roger's presentation attributes the quote, "It is no longer possible to keep fees low," to none other than Luke. It's not the first time this quote has been used in a Roger Ver presentation, and there are interestingly numerous references scattered across the internet concerning it.

It didn't stop Luke-jr however, from jumping into a tirade, where he tweeted "Roger Ver is a scammer and tends to fabricate false quotes. This isn't the first time (and probably won't be the last) I've found out about things I've "said" through a third party…"

Luke attacks Roger, is proven wrong, deletes evidence, fails to apologise

While Luke's supporters jumped the bandwagon in support, some other users were quick to do their own research, and were quick to point out the very source of the original comment made by Luke.

Luke attacks Roger, is proven wrong, deletes evidence, fails to apologise

Source: reddit permalink

What's more interesting is that the quote was verbatim, and none of it was taken out of context.

As evidence mounted, shortly thereafter, Luke 'Dashjr' deleted all evidence of the tweet, and issued no apology to Roger for his premature outburst.

Unfortunately for Luke, the Internet is a little bit like the blockchain. What happens on the internet, tends to stay on the internet.

Wednesday, September 26, 2018

Malaysia wants to put major industries on blockchain

 

The Malaysian government is seeking to utilize blockchain to increase transparency, sustainability and logistical efficiency of its three largest industries—renewable energy, palm oil, and Islamic finance.

According to reports, the government has appointed a task force named the Malaysian Industry-Government Group for High Technology (MIGHT) to oversee the blockchain adoption. Mastura Ishak, program director at MIGHT, told GovInsider: "Blockchain is interesting because it allows small players to have a say about what's going on."

The Malaysian government believes that adopting blockchain in the renewable energy industry will help bring new players to the table and increase energy production in the country. Currently, Tenaga Nasional Berhad (TNB) is the only utility provider in the country.

The new project will allow private solar panel owners to sell any excess electricity they have. In the new system, electricity sellers will be required to state how they are generating their electricity, while consumers will have the choice of deciding which sources of electricity they would like to use.

By allowing private solar panel owners to sell their surplus electricity, the country will also save up on the electricity lost during long-distance distribution.

For the palm oil industry, the Malaysian government hopes blockchain will help bring major changes that will improve the country's economy. Palm oil is Malaysia's biggest export, accounting for about 43.1% of the country's agricultural income.

Palm oil has been facing problems for quite some time now. This happened after reports emerged associating the industry with bad practices and child labor. MIGHT believes blockchain adoption can help identify certified palm oil operations which will help eliminate illegal operations. The government will also be able to monitor and regulate the operations.

Finally, there's Islamic finance. Islamic laws state that money has to be based on real commodity and cannot be created from more money. The strict nature of Islamic laws have caused high overhead costs on the industry, which is reflected in the country's economy. The government is looking at how they can offset these costs while also adhering to Sharia laws. Blockchain and the adoption of smart contracts could help offset some of these costs.

Another win for crypto: Bank giants fined billions for malpractice

 


First, Visa and MasterCard settled a class-action lawsuit over price fixing that reportedly cost the credit card giants as much as $6.2 billion. Now, reports are surfacing that major banks could be fined as much as $400 billion by 2020 for malpractice. So much for crypto being the bad guy, as traditional finance pundits would have everyone believe.

Quinlan and Associates indicates that research into U.S. and European banks could potentially face the huge fines by regulators. The majority of the penalties are a direct result of the financial crash from 2008. The $400 billion does not include fines from other areas, such as unfair billing practices or money laundering.

Last Monday, JP Morgan Chase was fined by the Commodity Futures Trading Commission (CFTC) $65 million after it was found guilty of not doing enough its part to protect the U.S. Dollar International Swaps and Derivatives Association Fix (USD ISDAFIX) from 2007 to 2012. ISDA was established in 1998 and ISDAFIX is a reference rate value for fixed interest swap rates, correlated to dollars, pounds, Swiss Francs and Euros.

The CFTC said that JP Morgan published false interest rates just prior to the daily reference was captured between the five-year period. In submitting false data, the firm saw its derivatives positions benefit at the expense of other interest rate products that used the same common interest rate value.

BNP Paribas also received a hefty fine from the CFTC. The bank was ordered to pay $90 million after investigators determined that traders in the bank's investment wing were actively bidding and executing trades at the moment the ISDAFIX was being released. This enabled them to influence the index, which impacted foreign exchange benchmark rates. The CFTC also fined the Royal Bank of Scotland $85 million for illegal practices similar to those of JP Morgan and BNP.

Some may recall that another bank, Well Fargo, has had its share of financial difficulties and missteps every year for the past couple of years. Most recently, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau hit the bank with fines of $500 million each after they determined that the bank had set unfair mortgage interest rates and forced customers to sign up for unnecessary car insurance.

Traditional financial giants may try to argue against crypto until they turn blue, but the truth is that crypto offers better protection and more transparency—and more confidence—than do the banks.

Wednesday, September 19, 2018

Denmark’s Largest Bank Took Two Years to Close Accounts of Blacklisted Russian Clients

 

Denmark's largest bank, Danske Bank, reportedly knew that some of its Estonian branch's clients were on the Russian government's blacklist but did not close their accounts for two years. The bank is currently being probed by three countries over $150 billion money laundering allegations.

Danske Bank is currently under investigation by authorities in three countries: the US, Denmark, and Estonia. Its officials reportedly "knew earlier than previously indicated about problems at its tiny Estonia branch, including that it held accounts for blacklisted Russian clients," The Wall Street Journal reported Tuesday, citing correspondence it has seen. The publication elaborated:

Officials at Danske Bank were aware almost two years before it started shutting questionable accounts that the small but highly profitable branch was involved in potentially illicit money flows.

The Estonian branch was one of the bank's profit drivers, generating a net profit of €63 million (~US$73.5 million) in 2012, the most lucrative year. The whole bank reported €636.6 million (~$742.6 million) in net profit that year, the publication noted.

The largest bank in Denmark has been at the center of one of Europe's largest money laundering cases. Between 2007 and 2015, an estimated $150 billion was suspected to have flowed through the branch to accounts belonging to non-Estonian customers including Russian clients. However, the bank has not confirmed how much of that figure comes from suspicious transactions. It has launched an internal investigation and is expected to announce the results on Wednesday, Sept. 19.

Discriminating Email
According to the Wall Street Journal, an April 2013 email reveals that the bank's anti-money laundering (AML) chief based in Denmark had asked colleagues in the Estonian branch "about client accounts whose owners appeared on a blacklist generated by Russia's central bank." The Bank of Russia keeps a database of individuals and companies suspected of financial wrongdoing which it shares across borders. The list currently has about 500,000 names.

The Estonian Financial Supervision Authority (FSA) said on Tuesday that "it repeatedly complained to Danish counterparts about the branch's blacklisted customers," the news outlet conveyed, adding that in a 2013 email, Niels Thos Mikkelsen, the bank's then-compliance executive, wrote:

"They have the impression that we do not take the issue seriously."

Furthermore, the news outlet added that a spokesman for the Danish FSA pointed out that a reprimand ruling against Danske Bank in May states that the authority received "misleading" information from the bank between 2012 and 2014. Danske claims the information came from the branch.

While the Financial Times recently reported that Thomas Borgen, the bank's CEO, was notified in October 2013 about suspicious transactions at the Estonian branch, Borgen insists that "he was not informed in detail at the time about the problems," Reuters described on Tuesday, elaborating:

"The Danske Bank case has led to speculation in Denmark that its chief executive Thomas Borgen, who was in charge of its international operations, including Estonia, between 2009 and 2012, will step down."

$10 Trillion US Exchange Takes a Step Toward Crypto: Nasdaq Bids for Cinnober

 


News wires buzzed this week when the National Association of Securities Dealers Automated Quotations (Nasdaq) announced its pending purchase of Swedish crypto-friendly stock exchange Cinnober. Nasdaq made "an USD 190m all cash recommended public offer" to the exchange, which it terms a major "financial technology provider to brokers, exchanges and clearing houses worldwide." It could also be a significant first step for the $10 trillion Nasdaq into the world of crypto. 

Nasdaq to Acquire Crypto-Friendly Swedish Stock Exchange Cinnober
Adena Friedman, President and CEO, Nasdaq explained, "The combined intellectual capital, technology competence and capabilities of Cinnober and our Market Technology business will expand the breadth and depth of our fastest growing division at Nasdaq."

From Stockholm, Sweden this week came a public announcement Nasdaq had made a $190 million offer to gobble up Swedish crypto-friendly stock exchange Cinnober. The acquisition "would strengthen its position as one of the world's leading market infrastructure technology providers," Nasdaq claimed.

Statement from Cinnober Board.
"Not only have the global capital markets continued to evolve rapidly," Ms. Friedman, 49, continued, "new marketplaces in various industries are demanding market technology infrastructure that enables rapid growth and scale as well as access to tools to promote market integrity. This acquisition will enhance our ability to serve market infrastructure operators worldwide, and will accelerate our ability to expand into new growth segments."

Based in the New York City, USA, Nasdaq is the second largest exchange in the world by market capitalization, valued at some $10 trillion. It is nearly 50 years old, and is known as the first electronic, automated stock market. Touted as what was to come in the retail brokerage industry, Nasdaq's emphasis on digital production meant a lowering of that critical difference between the bid and ask price of a stock. It was thought to be a model of price discovery efficiency. 

Could be a Tentative First Step Toward More Cryptocurrency Interaction
Nils-Robert Persson, co-founder and Chairman of the Board of Directors of Cinnober, added, "Since co-founding Cinnober in 1998, Cinnober has been on an exciting journey and has become a leading supplier of financial technology providing services to exchanges and trading houses worldwide."

For its part, according to the press release on the matter, Nasdaq "has offered to acquire all outstanding shares and warrants in Cinnober at a price of SEK 75 per share and SEK 85 per warrant. The transaction represents an offer value of approximately SEK 1,702m (appr. USD 190m). The Board of Directors of Cinnober has unanimously recommended that shareholders and warrant holders accept the offer. The acceptance period of the public tender offer is expected to close during the fourth quarter of 2018, subject to certain conditions customary in Swedish public tender offers (e.g. that Nasdaq becomes owner of more than 90% of the shares in Cinnober and review by relevant competition authorities)."

"I see the offer as the next step in Cinnober's development," Mr. Persson, 62, elaborated, "as it will enable Cinnober and its highly talented employees to be even more successful in serving customers as well as expanding its technology and offering to even more customers and segments. I really believe in the strategic logic of combining Cinnober and Nasdaq's Market Technology business also as it reinforces the strong technology foundation in Sweden. As the largest shareholder of Cinnober, I am supportive of the offer and intend to accept the offer."

The Swedish exchange is well known in the ecosystem for favoring digital currencies, especially as they relate to making it easier for more established investors to toe-dip. Custodial services have long been thought to be a giant concern for legacy banks when it comes to crypto, as hacks and their headlines have spooked big money. Cinnober partnered with Bitgo, for example, to attempt at mitigating custodial issues. Bitgo has a stellar reputation for custody in both worlds, with its multi-sig solution and having acquired Kingdom Trust, not to mention teaming up with Korbit, a Korean exchange – all of these factors have given Cinnober major street cred in the ecosystem.  

Thursday, September 13, 2018

Leading Crypto Firms Form A Lobbying Group To Push For Regulation

 


After years of waiting for the government to put in place regulations to govern the industry, crypto and blockchain industry leaders have come together to establish a lobbying group whose goal will be to push for the implementation of these policies. Based in Washington D.C, the group brings together some of the biggest names in the industry, including startups like Coinbase and crypto-focused VC firms like Polychain Capital. Known as The Blockchain Association, the group aims to become the voice of the industry in D.C and to work with the regulators from the inside, helping shed light on the developments in the industry and influencing the policy-making process.

The Inside Man
The crypto industry has for a long time been perceived as anti-government, perhaps largely because of its promise of taking the power away from a few entities and giving it to the people. However, many industry leaders have continuously sought to involve the government in their operations and have called for the implementation of regulations to govern the industry. The Blockchain Association is the latest effort by the industry to work with the government, with the group hiring a former Senate aide, Kristin Smith to lead the charge. Smith was the aide to former Maine Senator, Olympia Snowe, before taking over the blockchain lobbying duties for the bitcoin-friendly online retailer, Overstock.com.

As revealed by The Washington Post on September 11, some of the founding members of the new lobby group are Coinbase, fintech startup Circle and crypto-focused VC firms Digital Currency Group and Polychain Capital. Protocol Labs, the company behind decentralized storage startup Filecoin is also among the founding members.

The industry is not looking to circumvent the set regulations, Coinbase's Mike Lempres told the Post. Instead, it's been awaiting regulations for the longest time to weed out the scammers and promote healthy competition, Lempres, who is the chief legal and risk officer stated.

THE BLOCKCHAIN ASSOCIATION IS AN EFFORT TO GET THE PREEMINENT COMPANIES IN THE SPACE TOGETHER SO POLICYMAKERS KNOW THEY'RE HEARING FROM COMPANIES THAT WELCOME REGULATION WHEN IT'S APPROPRIATE. WE'RE NOT COMPANIES LOOKING TO GAME THE SYSTEM, BUT TRYING TO DEVELOP A LEGAL AND REGULATORY SYSTEM THAT'LL STAND THE TEST OF TIME.

The group's first priority will be working with regulators and lawmakers to establish regulations that will govern the application of the U.S tax laws to cryptos. This has been one of the most contentious issues in the industry, with the IRS's current application of the tax law being deemed prohibitive by many crypto users. The contention hasn't been made any better by the different regulatory authorities that have issued different classifications of cryptos; the IRS as a property, the SEC as a security and the Financial Crimes Enforcement Network as a currency.

Earlier this year, the Winklevoss twins announced an industry initiative to self-regulate which was officially launched a month ago. Known as the Virtual Commodities Association, the body has picked up new members over the last month as more crypto companies seek to become compliant with the set laws and to become actively involved in the formulation of new ones. Among the body's founding members are crypto exchanges Bitstamp, Bittrex and Bitflyer USA.

Faced With Cash And Forex Shortages, Zimbabweans Turn To Bitcoin – Even When It’s Banned

 

Cryptocurrency may be banned in Zimbabwe, but bitcoin is helping ordinary folk make payments bank-free. It makes for a great fit for the more than 10 million Zimbabweans who lack access to basic banking services. And it's even more beneficial to the banked few, a distrusting lot, keen to protect their savings against bank failure, inflation or even political turmoil.


How Do You Feel About Paying Rent in Bitcoin?
Josh from Zimbabwe's second largest city, Bulawayo, feels great about it. "I didn't have cash at hand, so, my landlord who is open-minded about cryptocurrency said I could pay in bitcoin," Josh told news.bitcoin.com.

The 23 year-old unemployed psychology graduate, who mines bitcoin at a small scale, zipped 0.02281BTC to his landlord, the equivalent of US$120 at the time.

Zimbabwe is faced with a two-fold problem: a shortage of foreign currency, and that of a surrogate currency called bond notes, initially billed as a panacea to the forex crunch. The Southern African country gave up its own currency in 2009, the same year bitcoin was born, after hyperinflation peaked at over 230 million percent, according to official estimates.

Some businesses, importers and informal traders particularly, often now offer discounts on cash purchases in US dollars – or bond notes – while charging more for mobile or card transactions.

Bitcoin a Silver Bullet
Now, as Zimbabwe struggles with a severe cash crisis that has forced people to spend hours queuing for money at banks, bitcoin is proving a silver bullet. Not only is the benchmark cryptocurrency helping people like Josh pay for apartment rentals and rates, but it is also making it easier for Zimbabweans to pay for goods and services that are charged in US dollar terms.

A few days ago, this writer used bitcoin to pay subscription for satellite TV – about 0.0042BTC or US$27 at the time, including fees, because I could not get or afford the US dollar equivalent. Around the same time, Stanbic, one of the few remaining local banks accepting deposits for pay television, announced it will no longer be processing such payments, citing a shortage of foreign currency.

The forex crunch means that people can't pay for goods and services that are dollar denominated using the bond notes, a currency the Reserve Bank of Zimbabwe (RBZ) claims is tied 1:1 against the US$. It is not. The greenback is selling at a premium of 85 percent on the streets of Harare.

Cheaper Than Banks
Study263, a platform originally created to help Zimbabweans studying abroad pay fees with ease via cryptocurrency, has now gained thousands of users as people seek to circumvent the RBZ's chokehold on foreign currency allocations.

"We don't only use bitcoin but any other available cryptocurrency – they are cheaper, faster, and in Zimbabwe's situation it (bitcoin) works now that card payments do not work out of the country anymore," said Study263 co-founder Tinashe Jani.

Jani said his company had facilitated over 900 transactions with amounts ranging from $10-$10 000+ since starting operations a year ago. For pay television, Study263, which is based in South Africa, receives bitcoin into its wallet before converting that to Rand and making payment there, for a fee of between 2 to 3 percent. Connection is almost instant.
Banks like Stanbic were charging up to $10 for a similar service.

DSTV, Africa's biggest satellite TV company, is South African-owned.

Jani said his company was getting requests for services they don't provide such as "someone asking us to give Rand to their siblings who cannot have access to bitcoin in Zimbabwe or South Africa."

For a fee of 3 percent of the amount transfered, Study263 obliges the request, he said. In Bulawayo, Josh is looking to continue making BTC-based rentals going forward after his first successful 'test run' with his landlord.

Crypto Ban
Cryptocurrencies like bitcoin, ethereum and liteoin are banned in Zimbabwe. The country had started to emerge as a critical part of the crypto market in Africa when the Reserve Bank of Zimbabwe in May shut down two exchanges, Golix and Styx24, that were helping people buy and sell bitcoin and other digital coins from a central platform.

The RBZ accused the exchanges of violating Exchange Control laws, and of taking on banking activities, such as accepting deposits – something they weren't allowed to do. When Golix tried to raise $32 million via a token sale in June, central bank governor John Mangudya described the process as a "pyramid scheme". Today, Golix is contesting the ban in the High Court.