FATF Needs to Narrow Down on DeFi Oversight; Not A One Size Fits All

The Financial Action Task Force (FATF) will need a new approach in crypto policing, according to XReg consulting senior partner, Siân Jones, who was speaking during the second V20 Virtual Asset Providers Conference. She particularly noted the emerging trends in Decentralized Finance (DeFi), a niche that Jones recommended FATF pay closer attention to to understand the nitty-gritty that would form part of future policy oversight.

So far, the FATF Travel Rule is the most advanced piece of oversight that governs Virtual Asset Service Providers (VASPs). The initiative, which came into action last year, requires service providers in the crypto sector to share personally identifiable information (PII) for transactions above $1,000 from one platform to another. To comply with the Travel Rule, stakeholders have some solutions, with the most popular being the InterVASP Messaging Standard (IVMS 101).

FATF Should Narrow Down on DeFi

While the Travel Rule has done it for most regulators, Jones brought FATF to pace with the developments in DeFi. She explained that DeFi removes intermediaries who would eventually make it hard for the AML watchdog to implement oversight on crypto activity within this space. Jones believed that FATF must consider new approaches to curb AML and terror-financing within this nascent industry. She said that,

“The tried and tested methods work, after a fashion, in the traditional world of money. Arguably, they can be made sort of fit the intermediated crypto world. They do not necessarily fit a DeFi world where they are not fit for purpose.”

Crypto Community More Effective in One Voice

Jones, who told DeFi stakeholders they need to ‘wake up and smell the coffee’ in matters regulation, also had some suggestions for the crypto community to enhance the cooperation in forming policies. She noted that FATF ought to double down its efforts in engaging the crypto community, including the DeFi developers. Likewise, the crypto community needs to work closer with FATF and present its opinion in a unified voice.

“Equally, the industry needs to work more closely together to present a unified voice and its engagement with the FATF and regulators.”

Read Original/a>
Author: Edwin Munyui

Crypto Network Fees on the Rise After DeFi Sees Signs of Another Parabolic Action

DeFi is popping again.

After two months of downward price action, DeFi tokens are bouncing back. The market cap of DeFi governance tokens that bottomed on Nov. 4 at just under $5 billion has managed to now double, at $10.2 million, in aggregate market cap in less than two weeks.

DeFi MarketCap
Source: CoinMetrics

Total notional value deposited across DeFi also hit an all-time high at about $14 billion this past week.

The growth stagnated in October and early November, but an increase in DeFi activity can be seen again in the past two weeks that helped it push to new highs.

This is because DeFi tokens are rallying again after witnessing large declines in market value. Over the past week, SUSHI gained more than 100%, SWRVE 88%, CRV 52%, and Hegic 45%.

At the beginning of summer, DeFi tokens were red hot as various assets recorded over 300% gains in a few months. Now, this parabolic action seems to be returning after a cool-off period of two months.

The return of bulls has the network fees also returning to healthy levels. Ethereum topped the list, generating nearly $2 million in daily fees, as per TradeBlock.

On Uniswap, the fees are back above $1,000,000 per day after declining to under $500,000 per day last month. Much like Uniswap, SushiSwap is generating over $100,000 in fees after declining to lows as liquidity across its platform decreased.

The Q4 also saw a new platform, Playmarket, joining the list of fee-generating crypto platforms for the first time. The Ethereum based betting platform saw an uptick in fees after the US presidential election, which brought its presidential betting market to the mainstream.

Read Original/a>
Author: AnTy

FATF Releases Red Flag indicators To Identify Money Laundering Using Crypto

  • The Financial Action Task Force (FATF) releases report on how to identify possible red flags in crypto money laundering rings across virtual asset service providers, or VASPs in short.
  • The regulator highlights a number of ways that crypto exchanges can stop and curb illegal and illicit activity.

The report titled, Virtual Assets – Red Flag Indicators of Money Laundering and Terrorist Financing, outlines several red flags including those arising from irregular transaction patterns, anonymous transactions, arising from senders and receivers and sources of wealth profiles of the crypto users.

One of the red flags arises from the size and frequency of transactions whereby a money launderer could make multiple high frequency transactions over a period of 24 hours or staggered and regular transactions which stop shortly after they are made. Moreover, transferring virtual assets to exchanges with low or non-existent AML/CFT rules is also considered a red flag.

User profiling is also an excellent way of noticing possible money laundering and terrorist financing. Here, exchanges are tasked with checking on the transactions made and comparing it with the user’s profile.

This arises when a user deposits an unusual amount to their wallet which does not match the traders profile or recent transactions. This could signal the deposit is subject to checks of money laundering, scamming or a money mule. The report reads on transaction patterns as a red flags stating,

“Conducting a large initial deposit to open a new relationship with a VASP and funding the entire deposit the first day it is opened, and that the customer starts to trade the total amount or a large portion of the amount on that same day or the day after, or if the customer withdraws the whole amount the day after.”

Also quick deposits and withdrawals of full balance of virtual assets in a short period of time raises eyebrows.

Virtual asset accounts with no logical business explanation making frequent deposits and transfers off the exchange to less KYC friendly exchanges poses a red flag. Accumulation of funds from several unrelated exchanges or wallets sending small amounts to one virtual asset account before fully withdrawing the funds may be a money laundering scheme.

Regulators should also follow users who use anonymity enabled public cryptocurrencies and privacy coins such as Monero, Zcash and Dash closely, the report states. Also the exchange of public and transparent crypto coins such as Bitcoin for the anonymity enhanced cryptocurrencies also raises questions on the actions of the trader.

FAFT has pushed through KYC/ AML regulations and compliance rules for VASPs across the globe in a bid to curb money laundering and terrorist financing using crypto. The “Travel Rule” recommends that the 200 countries that follow it, say to mandate VASPs such as custodians and crypto exchanges to retain and share any information on possible illicit and illegal trades happening on their platforms.

Read Original/a>
Author: Lujan Odera

CAOF to be Lead Plaintiff in Block.one ICO Lawsuit After Others File Inaccurate Data

A United States Court Judge Kaplan has now ruled that the class action suit brought against EOS developer Block.one ought to be represented by a lead plaintiff. This was after five of the investors of Block.one ICO displayed a lack of goodwill and commitment to make them the lead plaintiff of the case.

“Raises further concerns that the application is being driven by the lawyers, rather than the plaintiffs.”

The lead plaintiff often brings forth the interests of other plaintiffs in court in the case of a class-action suit. Hence, they get to pick the attorneys to handle the suit as well as picking up the legal tab. In this case, Judge Kaplan was keen to highlight that the case drags on for years which is potentially lucrative for the lead plaintiff’s attorneys.

CAOF declared the biggest Block.one loser

Law firm of Grant & Eisenhofer P.A has been chosen as the lead counsel in the case. This was decided upon by the Crypto Assets Opportunity Fund (CAOF) and rubber-stamped by the U.S. District Court for the Southern District of New York. This was after an August 4th hearing was able to confirm the losses suffered by CAOF and determined that they were the biggest losers.

The Williams Group that had filed a similar suit however had their motion shot down after the Judge deemed the evidence submitted inaccurate and unsubstantiated. Their trading data didn’t quantify how much they really had lost from the ICO. Data submitted indicated that they had lost more tokens than they acquired in the Initial Coin offering.

In a similar scenario, plaintiff Token Fund I, was incorporated only 2 days prior to filing the motion to lead the class action. They failed to produce intricate details of their previous trading activities, especially with Block.one.

The motion clarifies that considerations such as previous collaborations amongst group members and how they intend to move forward with the class action have to be made when a group makes an application for lead plaintiff.

Notably, Block.one launched an ICO last year raising north of $4 Billion. They were later on involved in a legal tussle with the Securities and Exchange Commission (SEC) that saw them remitting $24 million in fines. They have been implicated in several class-action suits for allegedly issuing unregistered securities.

Read Original/a>
Author: Lujan Odera

Here’s Why Bitcoin is Just Getting Started, Fundamentals Are On BTC’s Side

After over a month of relatively flat price action, bitcoin is stirring this week. The leading digital asset has crossed above $9,500, lightly breaking the upper barrier of the wedge.

“As a matter of perspective, it can probably be seen that this entire period was actually a consolidation, in which bitcoin fell at the same pace as the U.S. Dollar, because as we know, the greenback is now falling fast, especially when measured against other financial assets like stocks,” wrote analyst Mati Greenspan in his daily newsletter Quantum Economics.

But we are still not out of danger given that $9k and $10,000 are the hard psychological barriers. Also, given that stocks are not far from their all-time high and many are calling out the top, the downside is considerable that could again push BTC down.

However, the fundamentals remain on bitcoin’s side. As Ki Young-Ju, the CEO of market research firm CryptoQuant points out, miners are not selling based on their outflows, no significant BTC exchange inflows from whales so far, and all exchanges’ reserve has hit the year-low a month ago and keeps that low.

The digital asset just needs one good strong push for it to make new yearly highs and then off to make a new ATH of $20,000.

This week, Bitcoin enjoyed bullish news in the form of US regulators, giving banks a green light to hold cryptos for their customers, which could be “insanely bullish” for the digital asset. The latest pro-crypto nominee for the Fed governor is another fuel for the bitcoin run.

The macro-environment of virtually zero interest rates, Fed discussing another stimulus package, US-China conflict, worries over increasing inflation, and currency debasement is good tailwinds for BTC.

These factors have already driven spot gold prices to $1,905, just 0.7% away from its all-time high. Even Silver is shining bright, which is “closing in on its best week in 40 years yet chart below suggests a bull market in its very infancy.”

Tesla CEO Elon Musk, who has shown interest in bitcoin and cryptocurrencies, especially Dogecoin, however, is not in favor of another government stimulus package. “If we do a stimulus at all, it should just be direct payments to consumers,” he said.

Post-Halving Norm

Bitcoin just might be embarking on its bull journey with the new greens as historically it has been seen, post having consolidation last for weeks leading to an uptrend.

“The recent breakout comes after a series of Higher Lows within a multi-week $9000-$9300 range. Price lately reached the top of the Weekly $8700-$9700 range,” noted analyst Rekt Capital.

“BTC has been in this main range for 13 weeks (10 of those weeks coming after the Halving),” he added.

If we look at the last halving, this was around when ten weeks after the block subsidy event that bitcoin started moving.

The 2016 halving led to more than 3,000% gains in about 525 days. By this standard, in 2020, Bitcoin is “just getting started

Read Original/a>
Author: AnTy

Stablecoins Yet Again Under Regulatory Scrutiny In Revised FATF Report

In a Tuesday report, the Financial Action Task Force, with members from about 200 countries, said stablecoins need to comply with standards to guard against money laundering and terrorism financing.

FATF is an inter-government body that sets international standards to prevent illegal activities related to money laundering and terrorist financing watchdog. It was after a 12-month review completion that the report was prepared for the G-20 finance minister and central bank governors.

Lately, regulators are taking a strong stance against fiat-begged stablecoins like Tether (USDT). With the latest step by the FATF, the exchanges and other entities supporting stablecoins will likely have to verify the identities and comply with different policies.

“My assumption would be that FATF will update guidance in relations to stablecoins in the near future,” said Jesse Spiro, global head of policy and regulatory affairs for compliance technology provider Chainalysis.

Potential to be mass-adopted on a global scale

The total supply of stablecoins has doubled this year and is now quickly approaching the 12 billion mark.

Interestingly, USDT issued on Ethereum accounts for more than half of the total stablecoins supply. Also, the market cap of Tether has surpassed $10 billion.

Amidst this surge of stablecoins, the new rules would impose anti-money laundering (AML) and know-your-customer (KYC) requirements on stablecoins like Tether and also the new endeavors like Facebook’s upcoming Libra.

Stablecoin providers and exchanges that support coins would have to set up processes for monitoring transactions, investigations, and regulatory filings, Spiro said. Also, they would have to make sure that OTC trading desks are compliant. Tether uses Chainalysis for a part of its compliance process; Spiro told Bloomberg.

“OTC desks, there’s been a lot of illicit activity that we’ve been able to follow through,” said Spiro. “It’s something that regulators are going to be taking a long hard look at.”

The fiat-pegged digital currencies were an attempt to mitigate the extreme volatility in the cryptocurrency market. Tether, a popular stablecoin is especially used in China for fiat on- and off-ramp, since the country banned direct fiat channels in 2017. It is also used by export-import businesses in Asia.

According to FATF, “stablecoins appear better placed to achieve mass-adoption than many virtual assets.” For instance, Facebook wants its Libra to be used by 1.7 billion of the world’s unbanked.

Read Original/a>
Author: AnTy

Crypto Mining GPU Manufacturer, NVidia Petitions Court to Toss Out $1 Billion Class Action

NVidia has petitioned the California court to dismiss the class action suit made by its investors.

The lawsuit against the firm’s top brass alleges that they understated more than $1 Billion in revenue between 2017 and 2018 from crypto mining GPUs instead of owing it to the gaming sector.

Graphic processing Unit manufacturer Nvidia moved to file a petition to drop the class action suit against them. Their shareholders alleged that the company misrepresented its revenues from 2017 -2018.

The initial class-action suit was filed on Dec 2018 in a Californian Northern District Court by the Iron Workers Local 580 Joint Fund, which primarily ensures welfare (pension and health benefits) amongst both working and retired ironworkers.

The plaintiff alleges that the defendants of the suit, Nvidia top brass Jensen Huang and Colette Kress, failed to reveal that their purported earnings from the gaming industry highly relied on sales made to crypto miners.

Their GPUs: GeForce and GTX are popular picks for gaming enthusiasts and crypto miners that may require extra computing power. They later unveiled a chip dubbed – Crypto SKU – tailored for crypto mining activities in 2017. Their sales report indicated that the majority of their sales (north of $1 Billion) were generated from the gaming sector, and only Crypto SKU sales represented the cryptocurrency mining sphere.

In the petition to dismiss the class action, Nvidia has reiterated the remarks by top brass at the time of the initial lawsuit. They have highlighted that there was no way of determining the exact objectives of acquiring their GPUs.

They echoed comments made by founder and CEO Jensen Huang that it was hard to say whether the GPUs purchased for mining or crypto activities. Shifting blame from its executives who have described earnings from crypto accounted for just a tiny fraction of their total revenue.

The Skewed Findings

The firm is alleging the court threw out their initial objection solely based on the Prysm group report. They have maintained that the amended suit doesn’t qualify because it entirely relies on erroneous findings made from a 2018 impact of crypto mining on the firm’s sales inquiry.

This report was penned by Jon Peddie Research consultancy, and Morgan Stanley’s skewed statistic for the gaming chips demand model. They claim that the plaintiff is cherry-picking snippets from the corporate statement while ignoring information volunteered about the company’s revenue streams.

Read Original/a>
Author: Lujan Odera

Ripple Taking Legal Action Against YouTube for Aiding & Profiting from XRP-Giveaway Scams

US-based fintech startup Ripple is taking legal action against YouTube “to prompt an industry wide-behavior change and set the expectation of accountability.” As per the company’s announcement on Tuesday, Ripple is taking a step

“to protect customers around the world from dangerous online giveaway scams and false impersonations across YouTube, Twitter, and Facebook.”

Plaintiff Ripple and its CEO Brad Garlinghouse allege that both are suffering “irreparable” harm to their public image, brand, and reputation because of the Google subsidiary’s “deliberate and inexplicable failure to address a pervasive and injurious fraud occurring on its platform.”

Scams like “the XRP1 Giveaway” is a third party attack on XRP holders that are thriving because of YouTube’s “complacency and unwillingness to take seriously Ripple’s repeated demands for action.”

They further elaborated that these scams have been going on for a long time and being replicated many times and in one such instance resulting in the theft of $15,000 worth of XRP.

As per the 22-page long complaint, the scam is misappropriating the company and Garlinghouse’s image further leading to “profound uncertainty and confusion into the broader digital asset market.”

Despite repeatedly demanding that YouTube take action, the online video sharing platform has reacted inadequately but they “must do better” with the company touting its robust tools for self-regulating content.

“YouTube’s inaction undermines its public commitments,” reads the document adding that with its community Guidelines barring precisely the sort of content at issue in this case, they have ignored Ripple’s repeated demands for action.

In doing so, they aren’t only validating the scam as legitimate but profiting from them by aiding and abetting the scammers.

The company is now asking for restraining Defendant YouTube from refusing to apply its content regulation, ignoring and delaying its response to takedown notices, profiting from scams, verifying accounts perpetuating the scam, and awarding fraudulent channels verification badges.

Ripple and Garlinghouse are also seeking damages, reasonable costs including attorneys’ fees, pre- and post-judgment interest, and recovery in restitution equal to any unjust enrichment enjoyed by the Defendant.

Ripple has also hired external cybersecurity and digital threat intelligence vendor to help them with reporting and takedown of these giveaway scams.

Our Team here at BitcoinExchangeGuide have tried to do our part in warning investors, traders, and onlookers to be wary of these types of scams. Here are just a few of the posts we covered on the subject:

And you can bet there are many more that are being reported every day and plenty that are still duping investors that don’t take proper precautions.

Read Original/a>
Author: AnTy

Weiss Ratings Upgrades Bitcoin to A- “Excellent” & Predicts 2020 High Above $13,900

  • Bitcoin rating upgrade the result of positive price action and improved fundamentals
  • Weiss Rating expects BTC to surpass 2019 high, “confirming the new BTC bull market that began in December of 2018”

Bitcoin has gotten a rating upgrade from Weiss Ratings, an “independent” rating provider of cryptocurrencies, stocks, mutual funds, ETFs, and financial institutions.

The overall rating of the world’s leading cryptocurrency has now improved to A- which is “excellent.” This upgrade has been the result of positive price action as BTC moves from $3,200 on Dec. 2018 to the current $9,800. Also, the improved fundamentals in the form of increasing active addresses, transaction value, and transaction count.

While the technology and adoption of the cryptocurrency get an A “excellent” from Weiss Ratings, market performance grade is a B- because of the risk involved.

Listed on 126 exchanges, there are 7,359 trading pairs available in the market of BTC with other cryptos and fiat currencies. BTC/USDT is the top pair that accounts for 47.9% of the trading pair share.

BTC to surpass 2019 high & confirm the new BTC bull market

Bitcoin’s price has been trending up since bottoming out in December 2018 at $3,200. In 2019, Bitcoin surged over 85% and made a yearly high at $13,900.

In 2020, BTC/USD is up 33.50%. Weiss Rating, however, expects BTC to surpass 2019 high, “confirming the new BTC bull market that began in December of 2018.”

Towards the end of last month, Bitcoin made a long term trend reversal by breaking above 200 day moving average. Historically, this means, Bitcoin would see an average of 200% returns in the following six months.

So a new two-year could be very well expected, it is also possible Bitcoin will finally break into a new all-time high, $20,000 this year.

But Correction before $15,000?

The upcoming halving event is also expected by some to give a boost to price as Jehan Chu, co-founder of blockchain-focused venture firm Kenetic Capital, told CNBC that “BTC is poised for a breakout run to $15,000 by mid-2020.”

“The bitcoin halvening as well as the recent surge fueled by pandemic fears and public market jitters is yet another reminder that bitcoin is much less risky and offers potentially outsized returns.”

However, according to Weiss Ratings, we would first see a correction before moving onto hitting those highs.

“First, don’t be surprised if BTC suffers a short-term correction,” said Weiss Ratings.

In the long-term get ready for $8 Trillion Market Cap

Meanwhile, Andy Edstrom of investment advisory firm WESCAP Group says over the next ten years a number of factors may boost BTC price to take it to $8 trillion market cap.

“When I set the upside case from an investment point of view, I take a 10-year view. And I think the total valuation on 10 years that I use is about $8 trillion and that comes from various buckets,”

that includes share from gold, or fiat, offshore assets, other stores of value like real estate, micropayments, Lightning, Abra, or new uses that are either under construction or not thought of yet.

Moreover, Fidelity and New York Stock Exchange’s parent company ICE entering the market through Bakkt he said is the real deal.

Also, when Bitcoin takes out the previous peak and we’re back above $20k, “that’s going to be a catalyst that some people who aren’t paying attention now will pay attention to.”

Read Original/a>
Author: AnTy

Update on BitConnect Class Action Sees More Defendants Dismissed

According to a recent report by Behind MLM, a class action against BitConnect does not appear to be going well. The report indicates that the Court dismissed Plaintiff’s Second Amended Complaint, along with several defendants.

Since September 13th, Defendants Glenn Arcaro, Ryan Maasen, Joshua Jeppesen, Craig Grant, and Nicholoa Trovato, were dismissed from the suit. Even though the Court dismissed the Second Amended Complaint, Behind MLM reported that the Plaintiffs have been permitted by the Court to file a third-amended complaint, and that if filed, it must not include any additional parties and/or allegations.

Read Original/a>
Author: Silvia A