Wednesday, December 19, 2018

Waves Platform Raises $120 Million for Private Blockchain

 

Waves Platform, a public blockchain network that has helped digital startups create tokens, said it raised $120 million for itself to roll out a private version of its Vostok system for corporations and governments.

Private investors were tapped in the fundraising round led by London-based financial services group Dolfin, Waves said in a statement Wednesday. The company's own cryptocurrency, known as Waves, jumped almost 50 percent to $3.80 in the past 24 hours, according to CoinmarketCap.com prices at 9:40 a.m. in London.

Founded in Switzerland by Russian engineer Sasha Ivanov, Waves Platform has benefited from a recent boom of initial coin offerings that let firms create and sell tokens via its distributed-ledger technology, which it describes as a fast and easy-to-use blockchain.

The Waves token has a market value of about $383 million, down from as much as $1.7 billion in December 2017, close to the speculative peak for cryptocurrencies, according to CoinMarketMap.com.

"The cryptocurrency rush is over now, while the idea of using a decentralized network to store data and cut costs is still relevant," Ivanov said in an interview in his Moscow office.

Large firms and state entities often find the speed and security level of public blockchains to be insufficient, he said. So-called private blockchains, which have limited numbers of users, protect data better, according to Ivanov.

Vostok, similar to the International Business Machines Corp.-led Hyperledger in the U.S., will focus on Europe, Asia and the former USSR, expecting its first projects in the beginning of 2019, Ivanov said.
 


Russians to Be Allowed ICO Investments up to $9,000 per Year
Russian lawmakers have revised another bill regarding the regulation of the industry built around cryptocurrencies. In its latest version, the draft law on crowdfunding sets the maximum amount of money ordinary Russians will be permitted to invest in projects such as ICOs at less than $9,000 per year.     

Investments Limited to $1,500 per Project
The bill "On attracting investments using investment platforms" is one of the three pieces of legislation aimed at regulating the crypto industry that were adopted on first reading by the State Duma in May. The initial text approved by the lower house of Russia's parliament did not contain such limits. It only read that they should be determined in sub-statutory acts issued by the Central Bank of the Russian Federation (CBR).

According to the revamped draft law, private individuals will be allowed to invest through crowdfunding platforms up to 600,000 Russian rubles (less than $9,000) per year only, and a maximum of 100,000 rubles (~$1,500) per project RBC reported, quoting a copy of the document. Any investment exceeding 600,000 rubles, made by qualified investors or financial institutions, will be subject to mandatory oversight by the country's financial watchdog, Rosfinmonitoring, in order to prevent money laundering.

The new restrictions will limit the access of ordinary citizens to initial coin offerings (ICOs). The authorities in Moscow claim they want to protect Russians from the associated risks. In a statement, the CBR warned that investing through crowdfunding platforms can lead to the loss of all invested funds. However, the limits will not apply to social and charitable crowdfunding initiatives.

No Restrictions for 'Qualified' Investors
Professional investors will not be restricted in their participation in crowdfunding projects. Private individuals can be treated as "qualified investors" provided they meet certain criteria detailed in the federal law "On the securities market." For example, they must control assets worth at least 6 million rubles (almost $90,000) and prove they have been employed in the securities industry for at least two years.

The revised crowdfunding bill is likely to be voted on second reading in the Duma in January revealed one of its authors, the chairman of the Financial Markets Committee Anatoly Aksakov. Before the parliamentary summer vacation, deputies approved two other drafts – a bill amending the country's Civil Code to introduce a legal definition of "digital rights" and the main draft pertaining to the regulation of cryptocurrencies, the law "On digital financial assets."

The latter bill also underwent serious revision, with lawmakers dropping key terms like "cryptocurrency" and "mining." Representatives of the crypto industry protested and proposed an alternative bill granting cryptocurrencies "special status." However, Russia's Deputy Prime Minister Maxim Akimov recently stated that authorities do not plan to introduce any more significant amendments to the texts. The crowdfunding law has also lost important terms related to the crypto economy such as "tokens" and "smart contracts."

Wednesday, December 12, 2018

Crypto Price Watch: Waves, Tezos and Maker See Green Despite Dwindling Market Prices

 


Even as a majority of the top 10 altcoins within today's crypto market continue to see red, there are digital currencies like Waves, Maker, and Tezos that have witnessed an upward surge of 9%, 3%, and 2.5% respectively over the course of the past 24 hours.
Waves Continues Its Strong Performance

As can be seen from the chart below, around a week back the price of a single Waves token jumped by over 50% to touch an impressive price point of $2.32. In terms of what could have sparked this massive uptrend, many experts believe that the recent Waves Mobile app update could have had something to do with the increase.

For those not aware, the Waves dev team recently announced the launch of their much-awaited 'operational protocol upgrade' which allows customers to seamlessly "deposit, store and withdraw their altcoins" in a safe and secure manner. Not only that, but users can now also trade and lease out their assets on the Waves DEX with the touch of a button.
#WavesPlatform has had a great November with the release of our new mobile app and several other developments! We're continuing to build some outstanding tech to bring #blockchain to the mainstream. Here's what we've been up to in the past month: https://t.co/OcrvMyvkwn$WAVES

— Waves Platform (@wavesplatform) December 11, 2018

Additionally, it is also worth noting that the latest iteration of the Waves app will introduce several new exchange listings as well as provide users with full integration support with the Ledger Nano S hardware wallet.
Tezos (XTZ) Surprises Everyone With its Strong Performance

While many had relegated Tezos (XTZ) to the peripheral fringes of the crypto world recently, it now appears as though the project is making a steady comeback (especially since the currency has been showcasing a lot positive financial momentum over the course of the past week or so).

For those who may not remember, Tezos is probably most famous (or infamous) for having raised a whopping $232 million during its ICO phase as well as the scandal that rocked the project straight after.

Lastly, it is also worth pointing out that the XTZ token is currently trading below its original ICO price of $0.51 for around $0.375 (at press time). However, this drop is not as significant as the one witnessed by Ethereum as well as some of the other premier cryptos like BTC, BCH.

In this regard, a market analyst for iBuyTezos.com pointed out that Tezos was not even listed on a single exchange at the start of the year. The reason given for this delay was that the project's native blockchain network had not gone live till like mid-2018.

Tezos wasn't even on an exchange in Jan of 2018.
— Jovan Smith (@JvdollaJovan) December 6, 2018

Final Take
While many of the top crypto coins in the market have struggled to stay afloat throughout the year, there are some lesser-known assets that have continued their strong performance recently. It now remains to be seen how the future of smaller tokens such as Maker, DEX, Revain, Tezos plays out in the coming few weeks.

Former Mt. Gox CEO Could Face 10 Years in Jail Over Embezzlement

 


Japanese prosecutors are seeking a 10-year jail term for Mark Karpeles, the former CEO of Mt. Gox. The embattled Frenchman, who has been previously accused of diverting company money for prostitutes, business acquisitions and luxury items, is facing charges of transferring $3 million of client funds to his own account for investment in a software development business.

Karpeles Pleads Innocence But Authorities Aren't Buying It
According to prosecutors, Mark Karpeles falsified Mt. Gox's trading system to make customer balances appear healthier than they in fact were. He also acted in violation of the country's corporate law, Japanese daily The Mainichi reported on Dec. 12.

Karpeles has sworn his innocence and says the money, moved in the last four months of 2013, was meant to serve as only a temporary loan. He also argued, earlier in the trial, that the funds in question did not belong to clients but were his now-defunct company's revenue.

However, prosecutors have argued there is no evidence that this diversion of funds was merely as a temporary loan. "There was no documentation of loans and there was no intention of paying back," reads their submission at the Tokyo District Court. Karpeles, prosecutors argue, must be slapped with a harsh sentence for betraying the confidence of investors who trusted him with their money.

The Great Bitcoin Heist
Mt. Gox went from handling 70 percent of global bitcoin trades in 2013 to bankruptcy in 2014 after about $400 million was supposedly lost to hackers, with 200,000 bitcoins recovered two weeks later. The current lawsuit is not investigating the cause of this theft.

As the effects of the discrepancy became apparent, the exchange initially delayed withdrawals for up to three months before completely ceasing them altogether, ostensibly over the theft of bitcoins. The company entered bankruptcy proceedings in 2014 but has since undergone civil rehabilitation processes to enable it to pay bitcoin still owed to investors. It has yet to be determined how much users will be repaid, given the numerous fluctuations in bitcoin's trading price since 2014.

Mark Karpeles
"I never imagined things would end this way and I am forever sorry for everything that's taken place and all the effect it had on everyone involved," Karpeles said earlier during the bankruptcy saga, although he has consistently maintained his innocence. In November, a Mt. Gox trustee sought to defer the deadline for filing civil rehabilitation claims, initially slated for October, until this month.

Regardless of how the matter plays out in Japan, Karpeles faces more legal trouble in the U.S. where former Mt. Gox clients filed a lawsuit against him several months ago. Karpeles' lawyers want the lawsuit dismissed on the basis that a U.S. court has no jurisdiction over the matter.

Wednesday, December 5, 2018

Waves revamps mobile wallet

 


The Waves Platform, a decentralized blockchain ecosystem, has announced a comprehensive update of the Waves Wallet mobile app which is now available for download on the App Store and Google Play.

Launched over a year ago, the Waves mobile app was up to the task of enabling users to connect to the network and make transactions. However, as Waves' blockchain developed, the mobile team saw opportunities for improving the app by adding new features.

The result of many months of the mobile development team's effort is a comprehensive, all-in-one app for mobile devices with an absolutely unique feature set, including a crypto wallet, the Waves DEX and fiat gateway.

"We believe our app provides a step forward for crypto and blockchain community, a better experience for iOS and Android users than they can get elsewhere," says Sasha Ivanov, Founder and CEO of Waves Platform. "The new mobile app incorporates the most popular features of the desktop Waves Client going far beyond the functionality of the wallet. At the moment no other platform offers anything like that."

In the new app all traffic is encrypted, which is important for privacy and security. Private keys are encrypted and never leave user's smartphone and are never exposed to the web. A range of further security measures is added, including Face ID, Touch ID and Fingerprint scanning.

Users can trade on DEX, with the great tools and charts they've come to expect, but with the convenience of mobile. There's also access to fiat and crypto gateways, so users can deposit, store, trade and withdraw other assets.

The most popular digital asset management tools from the Waves Platform are also available. Users can send tokens to their address book contacts, lease WAVES, receive warnings about suspicious tokens and burn any spam assets. 

P2P Markets Report: Dumping Drives Record Volume Across Latin America and Asia

 


Japanese public company Money Forward, operator of a personal budgeting app with 7 million users, is preparing to launch a crypto exchange. Three cryptocurrencies will be supported. A representative of the company has shared some details with news.Bitcoin.com about the platform and the company's future crypto projects.

New Crypto Exchange
Money Forward Financial Inc., a wholly owned subsidiary of Tokyo Stock Exchange-listed Money Forward Inc. (TYO: 3994), has announced some details of its upcoming cryptocurrency exchange.

A representative of the company confirmed to news.Bitcoin.com that the exchange will initially support three cryptocurrencies: BTC, ETH and BCH. There will be live order books and trading charts but margin trading will not be offered at launch. In addition, the name of the exchange is not yet disclosed.

The new crypto exchange will be "linked to our personal financial management service called Money Forward Me," the representative added. This flagship product has 7 million users, according to its website. The company describes this app as one that "automatically aggregates statements of bank accounts, credit cards, securities accounts, fx accounts, pensions/points and compiles a household accounting book."


A Money Forward app.
Established in May 2012, Money Forward Inc. has nine subsidiaries and seven offices across Japan. The Tokyo-headquartered company offers a wide range of products including an automatic savings app and a financial services portal for individuals as well as accounting, tax return, invoicing, payroll, and information management systems for businesses. Its shares have been listed on the Tokyo Stock Exchange since September last year.

In terms of future cryptocurrency projects, the representative said, "In future years, we would like to cover money transfer and payment services."

Registering With FSA
During a press conference on Monday, the president of Money Forward Financial, Junichi Kanda, talked about the challenges of registering a crypto exchange business with the Financial Services Agency (FSA).

In the beginning, registering with the FSA is a "relatively light" process, Kanda described. However, after the hack of Coincheck in January, the regulator has tightened its oversight and evaluation of crypto exchanges and no company has been granted registration since then.

Noting that his company has been in consultation with the FSA, Kanda said that he expects his exchange to be able to register and launch by the end of March next year. In addition, Money Forward Financial announced on Monday that Yamane Hidero, a former FSA inspector, has been appointed as head of the company's internal control department.

Yamane Hidero
The Money Forward representative confirmed to news.Bitcoin.com:
We would hopefully like to start the [exchange] business between January and March 2019, though it depends on the FSA's [registration] procedure.

Japan's revised Payment Services Act requires that all crypto exchange operators register with the FSA. Currently, 16 operators have been granted registration and three, including Coincheck, have been allowed to operate exchanges while their applications are being reviewed by the agency. The FSA previously revealed that more than 160 companies have expressed interest in registering to operate crypto exchanges.

What do you think of Money Forward launching a cryptocurrency exchange? Let us know in the comments section below.


Thursday, November 29, 2018

The US Government Is Powerless to Block Bitcoin Addresses

 

It has been widely reported this week that the U.S. government has blacklisted two BTC addresses linked to cyber crime. These particular addresses were singled out because their owners are believed to be Iranians, whose country is currently facing heavy economic sanctions from the U.S. While the BTC addresses are clearly connected to ransomware, mainstream media has gotten one crucial element of the story wrong: You can't blacklist a bitcoin address.

The Office of Foreign Assets Control (OFAC) is the financial intelligence wing of the U.S. Treasury Department. It enforces economic sanctions against foreign entities the American government has taken exception to. Right now, it has Iran in its sights. By OFAC's own admission, however, trying to blacklist bitcoin addresses is a first. "While OFAC routinely provides identifiers for designated persons, today's action marks the first time OFAC is publicly attributing digital currency addresses to designated individuals," explained the agency, adding:

Like traditional identifiers, these digital currency addresses should assist those in the compliance and digital currency communities in identifying transactions and funds that must be blocked and investigating any connections to these addresses.  As a result of today's action, persons that engage in transactions with [these addresses] could be subject to secondary sanctions.

You Can't Blacklist a Bitcoin Address
The addresses in question, 149w62rY42aZBox8fGcmqNsXUzSStKeq8C and 1AjZPMsnmpdK2Rv9KQNfMurTXinscVro9V, have been involved in over 7,000 transactions since 2013 and received close to 6,000 BTC. As of Nov. 28, anyone interacting with these addresses could technically be held liable by the U.S. government and punished in some way. In reality, though, these threats are little more than empty words. No one — not even the U.S. government, with its army of apparatchiks and enforcers — can prevent a specific address from sending or receiving bitcoin. With cryptocurrencies such as EOS or ripple, OFAC would likely have more success, but decentralized assets such as BTC and BCH are uncensorable.

To demonstrate the pointlessness of the blacklisting, both BTC addresses have received transactions in the past 24 hours. In one instance, vanity addresses were used to troll OFAC and to reiterate the futility of its digital currency sanctions. While cryptocurrency exchanges can and do block accounts linked to certain addresses, the Bitcoin protocol remains immune from such interference. Permissionless and stateless, bitcoin can't be blacklisted. That's why it's so valuable.

Canadian Bitcoin Miner Fortress Blockchain Reports $1.16M Loss in Q3

 


Fortress Blockchain's net loss worsened to $1.16 million (1.55 million Canadian dollars) in the third quarter, from $202,000 in the preceding three-month period, as price pressure continues to mount in the global bitcoin mining industry. The Canadian company said depreciation of $291,600 and listing expenses of $293,700 wiped away mining earnings.

Revenue Falls as Bitcoin Plummets
Fortress Blockchain, which listed shares on the TSX Venture Exchange in August, sold 179.8 BTC for $1.13 million in the three months to September, at an average price of $6,605 per coin. About 83 BCH was sold for $35,300. The Vancouver-based company extracted much less bitcoin and bitcoin cash during the third quarter, however, as global cryptocurrency prices plummeted. It mined 64.5 BTC and 52 BCH at significantly lower prices compared to the previous quarter.

Revenue from its mining operations declined 37 percent to $463,900, from $741,000 in the previous quarter, according to an earnings release published Nov. 28. Revenue from the sale of bitcoin mining equipment coupons reached $267,500 in the three months to the end of September.

It said it had faced challenging conditions due to the "volatility in bitcoin prices." It has also seen a rise in costs related to depreciation, listing and share-based compensation. Gross mining margins came in stronger, however, at 62 percent.

"The industry has gone through a corrective phase where mining difficulties are at an all time high while bitcoin prices have declined," said Aydin Kilic, chief executive officer and co-founder of Fortress. "At press time, we have noticed the mining difficulty for Bitcoin has significantly decreased. However, this has been outpaced by a significant decline in the price of bitcoin."

Miners Continue to Struggle
The global price of bitcoin has plunged more than 70 percent since January, dragging the rest of the cryptocurrency market down with it. Companies involved in mining or selling mining hardware have been hit hard. Reports say some companies have gone bankrupt, with a number of miners in China resorting to selling their equipment as junk to cut losses.

Fortress, which has a market capitalization of $6.40 million, touts itself as a low-cost green energy miner. The company operates about 1,400 S9 application-specific integrated circuit (ASIC) miners at its 2 MW flagship facility in the U.S. state of Washington, with an average operating hash rate of over 18.9 petahash/second.

Fortress has cut staff to achieve cost savings of $26,300 per month, said Kilic, who took a pay cut as part of a broader corporate reorganization exercise. The company also bolstered efficiency by installing Bitmain's Overt ASIC Boost firmware on all of its mining hardware, resulting in a 14 percent average decline in power consumption, he said.

By the end of September, Fortress had cash on hand of $7.98 million and $19,200 of digital currency holdings, compared to $6.90 million in cash and $769,900 in cryptocurrency at the end of June. Its shares closed up 4.4 percent at $0.09 on Nov. 28.

Wednesday, November 21, 2018

KPMG: Institutional Investment Key to Cryptoassets Growth

 


Auditors KPMG have published a report stressing the need for institutional investors to join the cryptocurrency industry. The report outlines the importance of cryptoassets as an investment alternative and how institutional investors can take part in the process.

Digital Assets Have Potential, Institutionalization Needed to Scale'
In the report, released Nov. 18, the Netherlands-based firm said a new world of finance is emerging in which transacting in digital assets may become standard operation. "Cryptoassets have potential," KPMG wrote, in the report titled 'Institutionalization of Cryptoassets."

"But for them to realize this potential, institutionalization is needed. Institutionalization is the at-scale participation in the crypto market of banks, broker dealers, exchanges, payment providers, fintechs, and other entities in the global financial services ecosystem," it said.

The study comes at a time the use of digital currencies is gaining worldwide adoption, both as a unit in financial transactions and as a store of value.

Christine Lagarde, the managing director of the International Monetary Fund, last week said central banks throughout the world should consider issuing digital currency to make transactions more secure. Lagarde argued that state-backed cryptocurrencies could satisfy public policy goals related to financial inclusion, consumer protection, privacy and fraud prevention.

Although observers point to the risks of central banks' involvement in cryptocurrency, such as the potential to slow down transactions and raise costs through over-regulation, KPMG views the coming on board of financial institutions as crucial to boosting public confidence in digital assets.

"Institutionalization is the necessary next step for crypto and is required to build trust, facilitate scale, increase accessibility, and drive growth," the auditors asserted, adding that it would be prudent for countries in hyperinflation, like Argentina, to adopt cryptocurrencies to preserve value.

KPMG said: "A globally accessible, decentralized store of value could have a significantly stabilizing impact on the country's economy. Bitcoin could potentially represent such a store of value in the future.

"Interestingly, even though there are large price fluctuations with Bitcoin, it is not inherently volatile. The supply is in fact fixed and algorithmically secured. It is the demand that is fluctuating and this could eventually stabilize as the market matures," it added.

Truly Open Global Financial System
Writing in the same report, Coinbase chief compliance officer, Jeff Horowitz, said cryptoassets are an opportunity to transform the financial industry into a truly open global financial system.

"Regulatory agencies are also beginning to seriously discuss cryptoassets, which could help drive institutional participation, encouraging the marketplace to think about how engagement with these assets fits into both existing rules and regulations and new frameworks that may be needed for crypto," he said.

However, Horowitz noted that the focus on cryptocurrency innovation must not come at the expense of security, compliance, and consumer protection.

"Leaders in the crypto space, including crypto entities and industry partners, have a responsibility to help influence and educate key legislators and regulators to advance the overall governance and enforcement framework," Horowitz detailed.

"In many ways, leading crypto companies should aspire to meet the standards and leading practices established by traditional financial services companies. We believe this will help promote trust and accelerate the adoption of crypto by investors and institutional clients," he added.



Indian Government Expects to Finalize Crypto Bill Next Month

 

Kind regards,


The Indian government has reportedly filed an affidavit with the country's supreme court detailing its progress on cryptocurrency regulations. "Serious efforts are going on" to prepare the draft crypto bill and report, the government explained. The two are expected to be discussed by the inter-ministerial committee by next month.

Government's Counter-Affidavit
The Indian supreme court has been trying to hear the petitions against the crypto banking ban by the central bank, the Reserve Bank of India (RBI). On Oct. 25, the court directed the government to file a counter-affidavit within two weeks, detailing its crypto regulatory progress. The court specifically asked for a report from the committee set up by the finance ministry to recommend crypto regulations. This committee is headed by Subhash Chandra Garg, the country's Economic Affairs Secretary.

On Tuesday, Quartz reported that the government has filed the counter-affidavit with the supreme court, which the publication claims to have reviewed.

"A finance ministry panel set up in November 2017 could be ready with draft regulations next month," the news outlet wrote. It proceeded to publish the following excerpt from the counter-affidavit:

…currently, serious efforts are going on for preparation of the draft report and the draft bill on virtual currencies, use of distributed ledger technology in (the) financial system and framework for digital currency in India.

The publication continued to explain that "It is expected that the draft report will be placed before the IMC [inter-ministerial committee] by next month." Both the draft report and the bill will be circulated to IMC members and discussed at the next IMC meeting.

According to the counter-affidavit, "The next two meetings of the Garg panel, to be held next month and in January 2019, will deliberate the draft report, and the provisions of the draft bill on virtual currencies," the news outlet conveyed.

Supreme Court Hearing
The central bank issued a circular in April banning financial institutions under its control from providing services to crypto businesses. The ban went into effect in July. A number of petitions have been filed against the ban.

The Indian supreme court scheduled to hear all the petitions against the ban on Sept. 11. However, the hearing has repeatedly been postponed. Then, on Oct. 25, the court directed the government to submit the counter-affidavit before the next hearing is scheduled.

Meanwhile, banks have closed accounts of crypto exchanges, forcing them to come up with their own solutions to provide fiat support to their customers such as through peer-to-peer systems.

Wednesday, November 14, 2018

Chinese Mining Farms Undergo Tax Inspection, Michigan Bans Campaign Donations in Cryptocurrency

 


 In recent regulatory news, we report on an authorized mining company in China that has had its operations temporarily halted for tax inspection and implementation of real-name registration processes. We also look at the Michigan Secretary of State's ban on crypto-based political donations, as well as the recent certification of X8's stablecoin for Shariah compliance. In addition, we focus on the operator of a fraudulent cryptocurrency scheme who has been punished for misappropriating $601,000 in BTC and LTC from his employer.

Chinese Mining Farms Suspended
According to a statement published by an unidentified cryptocurrency mining company, Chinese state agencies have ordered the suspension of its mining farms in southwestern Guizhou Province and the Xinjiang Uyghur Autonomous Region for tax inspections and to implement real-name registration processes.

"According to the needs of the public security department's network information security work, in the future, our company will implement higher standards for the company's business real-name system according to the work needs of the public security department," the anonymous company said. "For customers with the latest standard real-name systems, the data center will have to suspend reloading, restarting, moving in and out, etc."

Michigan Secretary of State Says 'No' to Crypto
In a letter addressed to William Baker, a recent candidate for the Michigan state legislature, the office of the Michigan Secretary of State has formally barred cryptocurrency donations to political campaigns.

Baker, who lost his bid in the state's Nov. 6 election, had previously sought clarification on how the value of donations in the form of cryptocurrencies should be recorded. He also asked whether virtual currency exchanges would qualify as valid secondary depositories for the storage of crypto assets.

Baker asserted that "it is self-evident that digital currency is a valid way to receive political contributions." However, the state secretary's office responded by stating that "the law does not authorize such a vehicle, and the department has never determined that digital currencies are a valid way to receive political contributions."

The letter also highlighted concerns pertaining to the price volatility of cryptocurrencies. "As with stocks and commodities, bitcoin's worth fluctuates daily," the office said. "There is no way to ascertain the precise monetary value of one bitcoin on any particular day."

The Michigan Secretary of State raised additional objections to the use of cryptocurrencies as donations. In the letter, the office added that state legislation also "requires that committees deposit funds in an account in a financial institution, which is not an option for cryptocurrency."

X8 Stablecoin Certified as Shariah Compliant
X8C, the stablecoin issued by Swiss fintech company X8 AG, has obtained a certificate showing that its stablecoin is compliant with Shariah law. It received the certification from the Shariyah Review Bureau, an Islamic advisory firm licensed by the Central Bank of Bahrain.

Francesca Greco, director and co-founder of X8, announced that the company will soon establish a regional office in the Middle East. Greco also indicated that X8 plans to launch a Shariah-compliant virtual currency exchange, adding that the company has already met with representatives of exchanges based in Abu Dhabi, Dubai and Bahrain.

"The Gulf region is a really good place for financial technology companies, because they all want to become hubs for fintech," Greco said.

CFTC Fines Crypto Scheme Operator Over $1.14M
The U.S. Commodity Futures Trading Commission (CFTC) has ordered Joseph Kim, a resident of Phoenix, to pay more than $1.14 million for operating a fraudulent cryptocurrency scheme. Kim was also sentenced to 15 months in prison on "related criminal charges" filed in the U.S. District Court for the Northern District of Illinois. According to the court order, Kim pleaded guilty to "orchestrating a fraudulent Bitcoin and Litecoin scheme that led to more than $1 million in losses."

Kim was found to have misappropriated $601,000 worth of BTC and LTC from his employer — described as "a Chicago-based proprietary trading firm" — before attempting to fabricate security-related issues to obfuscate the misappropriation of funds. Despite this, the company fired Kim in November 2017 after the theft of the cryptocurrency was discovered.

Between December 2017 and March 2018, Kim then sought to repay his former employer through profits that he had generated through the operation of a cryptocurrency trading scheme. According to the CFTC, he "falsely told customers that he would invest their funds in a low-risk virtual currency arbitrage strategy, when, in fact, Kim made high-risk, directional bets on the movement of virtual currencies that resulted in Kim losing all $545,000 of his customers' funds."

Bitcoin Group SE Buys Investment Bank Tremmel

 


Bitcoin Group SE has bought 100 percent shares of investment bank Tremmel for an undisclosed amount. This is the German digital currency exchange operator's second acquisition in 2018. Bitcoin Group, which holds current assets of $40 million, said Tremmel allows it to issue its own cryptocurrency-related products, conduct proprietary trading and operate bitcoin ATMs.

Acquisition to Expand Bitcoin Group Services Portfolio
Bitcoin Group SE Buys Investment Bank Tremmel for Undisclosed Figure

The Frankfurt Stock Exchange-listed company operates Bitcoin.de, Germany's only regulated digital currency exchange, trading BTC, BCH and ETH. It hopes to use Tremmel's banking license to expand the range of its service portfolio. For example, Bitcoin Group said it is now possible for the trading platform to maintain an order book and even quote prices, while simultaneously ensuring more liquid trading.

"We are very pleased that in Tremmel Wertpapierhandelsbank Gmbh…we have been able to gain an excellently positioned partner with in-depth knowledge of the market," Marco Bodewein, managing director of Bitcoin Group, said in an online statement on Nov. 12. "This will enable us to take the corporate development of Bitcoin Group SE to a new level," he added.

The deal is expected to be completed in the first half of 2019, subject to approval by relevant regulatory authorities. Bitcoin Group did not disclose the actual purchase price, but said "it is in the lower seven-digit euro range."

Rainer Bergmann, the previous sole shareholder and managing director of Tremmel, is to continue working at the investment bank in the same capacity. The bank, which trades shares, bonds and other stock exchange products on behalf of local and foreign banks, insurance companies and asset managers, will be expanded into a deposit-taking institution, Bitcoin Group said.

Restructuring
Digital currency exchanges are looking for growth in new areas or to consolidate existing positions to help boost revenue and minimize risk from an uncertain regulatory environment in their home economies.

In January, Bitcoin Group, which has 753,000 investors actively using its exchange to buy and sell digital assets, bought a 50 percent stake in financial investment broker Sineus Financial Services Gmbh, to diversify risk. "In the future, this will enable the group to offer additional financial services in the cryptocurrency sector," the company said at the time.

For the first six months of this year, Bitcoin Group reported net profit increase of 306 percent to $3.85 million from $0.95 million a year earlier. Revenues tripled to $6.57 million from $2.1 million in the comparable period a year ago. Operating profit climbed 368 percent to $5.64 million. The exchange said about $707.6 million worth of BTC was traded on the platform at the end of last year, when the price of the cryptocurrency peaked at $20,000.

After close Tuesday, shares of Bitcoin Group were down 0.36 percent at $31.41 in Frankfurt trading. Over the past 52 weeks, the stock has reached a low of $28.02 and a high of $97.18.