Netherlands Central Bank (DNB) Approves First Crypto Exchange Under New AMLD5 Regulations

The AMLD5 regulations approved by the EU are considered to be quite strict, which cast many doubts over the future of digital asset firms operating in the region. However, Nederlandsche Bank NV (DNB), the Netherlands’ central bank, has approved AMDAX BV as the first digital asset firm to operate under its jurisdiction.

The authorities’ approval is a first of its kind since the latest AMLD5 regulations came into force. Many existing crypto firms had to either close their operations or move their business outside of the Netherlands. Deribit, a popular derivative exchange, was among those who had to shut down its operations because of the newly enforced laws.

As per an official briefing dated October 7, AMDAX BV, an Amsterdam-based crypto service provider, would now offer its services to the Dutch residents. The company in its official statement said,

“AMDAX B.V. has been registered by De Nederlandsche Bank (DNB) as the first provider of crypto services in the Netherlands. This enables AMDAX to process crypto transactions and store cryptocurrencies.”

Ever since the enforcement of newly updated anti-money laundering rules called 5th Anti-Money Laundering Directive, or AMLD5, companies must register with the regulatory body. Only after their approval, they can offer their services to the customers. The registration for support started in January 2020, and AMDAX B.V has become the first firm to get the regulatory nod.

AMDAX B.V to Cater to the Needs of Retail and Institutional Investors

AMDAX B.V would be catering to the needs of both retail and institutional investors. The digital asset firm started working towards AMLD5 compliance back in May. Valentino Cremona, AMDAX BV co-founder, commented on their regulatory approval and said,

“The market needs clear legal frameworks, such as the set of requirements of DNB. This registration shows investors that crypto is a mature asset class, not for criminals, but smart investors.”

“All crypto companies need to get this registration. Without it, they cannot operate in the Netherlands. The other Dutch crypto companies have up to November 21st to receive registration.”

The approval of DNB for AMDAX BV shows that digital asset firms can still get the regulatory nod despite the stricter regulations.

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Author: Hank Klinger

US Congress Adds Two Blockchain Proposals to the Consumer Protection Safety Act

The U.S House of Representatives has approved two blockchain-affiliated Acts through its Committee on Energy and Commerce; this marks the furthest a blockchain bill has come in the 116th Congress. The two Acts which will now be debated on the House as part of the larger Consumer Technology Act include the Blockchain Innovation Act and a section of the Digital Taxonomy Act.

Blockchain joins the list of emerging tech that the Federal Trade Commission (FTC) and Department of Commerce (DoC) will be tasked with consumer threat identification if the bill goes through. Rep Darren Soto (D-Fla) who is one of the bill’s sponsors noted that blockchain tech is excellent and could go a long way with the right regulatory support,

“I believe our government needs to support that growth, establish light-touch regulations to ensure certainty, protect innovation, stop fraud and enable its appropriate use for government, business and consumers.”

As it stands, the unregulated nature of blockchain has provided adequate grounds for scammers to engage in fraudulent activity and get away with the same in a blink. This was one of the issues cited by the bill’s sponsors and, in particular Congressman Jerry McEnery (D-CA); he highlighted that the incorporation of parts of the Digital Taxonomy Act would play a major role in protecting consumers from the scammers.

Better Late than Never!

Although a little late to the party, the U.S is gradually catching up with pioneers like Japan which enacted regulatory frameworks for the blockchain and crypto industry as early as April 2017. Politicians in the country have also started to accept donations in Bitcoin; Rep Soto, who sponsored this bill told the Chamber PAC that his campaign would be accepting BTC donations. The Democrat Congressman is not the only one that has gone this road; former presidential candidate Andrew Yang and MN-06 Rep Tom Emmer are the other candidates that have since accepted Bitcoin.

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Author: Edwin Munyui

Switzerland Passes Blockchain Legislation Unanimously; Will Take Effect Early 2021

  • Switzerland has finally approved legislation for blockchain and digital assets, making it one of the major financial hubs to have a formal regulatory reference point for the upcoming crypto market.
  • The country’s parliamentarians voted unanimously for the ‘Blockchain Act’ that had been passed earlier in summer.

According to a report by the international unit of Swiss Broadcasting Corporation, SWI, this legislation on DLT’s and blockchain is likely to come into effect at the beginning of 2021. The milestone will open up doors for Swiss crypto-savvy investors to participate in the latest tech, including decentralized finance (DeFi); companies will also be able to tokenize shares within the law amongst other assets.

These new blockchain-oriented laws for Swiss crypto companies define several events and the probable course to follow, should such situations arise. Given the new dynamics underpinning crypto ecosystems, some underlying laws on bankruptcy and security trading have been amended to accommodate the digital assets.

The legislation goes to the extent of providing clarity on trading security tokens as well as due diligence procedures by service providers. The clarifying is an effort to curb money laundering and terror financing activities that appear to be thriving in crypto networks. Speaking to Decrypt, Urs Bolt, a leading Swiss FinTech influencer, noted that the new laws would be a big boost for the country’s burgeoning crypto space. He commented,

“Overall, it will create one of the most favorable regulatory environments in the world. It will allow the financial center to lead in the digital asset space and hopefully attract new business into CryptoValley.”

Interestingly, this latest legal advancement comes just after Switzerland’s Canton of Zug decided to accept tax payments in crypto. The town, which has earned a nickname ‘Crypto Valley’ due to the high blockchain and crypto activity, said that residents can now pay their taxes in Bitcoin (BTC) and Ethereum (ETH) via QR codes; the initiative will roll out in Q1, 2021.

It is quite noteworthy that Switzerland joins its neighbors Malta and Liechtenstein, which had already enacted comprehensive legislation for blockchain-related tech. However, the country’s position on a CBDC remains unclear despite global hype and China’s debut of its digital yuan.

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Author: Edwin Munyui

Iranian Govt Approves Industrial Crypto Mining by Power Plants in the Country

The government of Iran has approved a decision that would allow industrial-scale powerplants in the country to operate bitcoin miners in their plant, given they don’t use subsidized fuel. The announcement was made on July 27th in the Islamic Republic News Agency (IRNA), a local publication.

Mostafa Rajabi Mashhadi, Deputy Managing Director of Iran’s Power Generation, Transmission, and Distribution Management Company, Tavanir. Mashhadi commented on the government’s decision to approve crypto mining, that now they are focusing on making sure that these industrial-scale businesses do not exploit the subsidized electricity meant for farmers and underprivileged. He said:

“Now we’re in a situation where the supply of electricity is of great importance to the public. We will not allow anyone to misuse tariffs provided for the agricultural and industrial sectors to produce Bitcoin while it’s worth more than $9,000.”

The Iranian government had approved crypto mining back in July 2019 and issued 1,000 operating licenses. Since then, fourteen recipients of the permit have requested 300 MW electricity energy, which is equal to the consumption of three provinces in the country.

Now that the government has also approved mining for power plants, it would be imperative to ensure a balance between the amount of energy being consumed for mining and the standard requirements of the public.

The tariffs offered by the Iranian government on electricity for mining cryptocurrency depend on several factors, like the cost of oil, the abundance of energy, and many more similar elements.

Iran Turns to Crypto Amid Troubled Times

Iran has been facing a mounting financial crisis, which has been only aggravated by several trade sanctions imposed by the US. The value of the national fiat has also fallen significantly since 2011, which has forced the government to look for an alternative.

Given Iran offers one of the cheapest electricity, bitcoin and crypto mining always seemed a profitable industry that can be nurtured. The government’s recent decision to allow power plants to operate bitcoin miners appears to be a step in the right direction.

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Author: Rebecca Asseh

Mastercard Approves Wirex to Directly Issue Crypto Payment Cards To Its Customers

  • One of the world’s major payments processors, Mastercard, has announced it has approved Wirex to become its maiden crypto firm to provide payment cards to its clients directly.
  • In efforts to expand its crypto program, Mastercard is now encouraging the crypto companies to apply to become its partners.

On Monday, July 20, Mastercard announced that it was seeking to make it easy for crypto card issuers to become its partners through the firm’s Accelerate program. Now, it will take just a few weeks before applicants can be approved as partners, the firm stated.

The Accelerate programs offer partners the requisite support for their market entry, continued development as well as international expansion. The approved partners will be helped to integrate into Mastercard’s technology easily and will be allowed to benefit from the firm’s market research and cybersecurity expertise.

Although the firm is focusing on making it easier for partners to access the Accelerate program, firms wishing to be onboarded must adhere to the company’s “core principles.”

The core principles comprise of ensuring the security and privacy of the users, adherence to the requisite laws and regulations like AML rules as well as coming up with a level playing field for all the stakeholders involved like merchants, financial institutions as well as mobile network operators.

The company’s head of digital assets and blockchain, Raj Dhamodharan, explained that the crypto market is fast maturing and the firm wants to be part of this journey. He said:

“The cryptocurrency market continues to mature, and Mastercard is driving it forward, creating safe and secure experiences for consumers and businesses in today’s digital economy.”

Wirex cardholders will have a chance to instantly convert their crypto assets into different fiat currencies that can be used at a point of sale which accepts Mastercard.

Pavel Matveev, Wirex CEO, praised the partnership, saying that it shows that cryptocurrency is slowly gaining recognition and acceptance by several global bodies as well as regulators. He added that the partnership would allow the firm to reach all corners of the world as Mastercard is a global institution.

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Author: Joseph Kibe

UMA Project Launches Synthetic Token ETHBTC Which Tracks Relative Value of ETH to BTC

UMA Protocol, a decentralized finance (DeFi) project, has approved an innovative contract to create a synthetic token called ETHBTC which would track the relative value of Ether concerning BTC.

This synthetic token would allow users to bet on the relative value of the second largest token concerning Bitcoin. However, the synthetic ETHBTC token would not involve either ETH or BTC for minting.

While introducing Bitcoin’s synthetic value (tBTC being the latest project) on the Ethereum network as a collateralized asset has been the trend in 2020, the idea of creating a synthetic token that is pegged against the value of bitcoin and Ether is one of a kind.

This synthetic token would be the first deployment of the UMA project, and they are calling it a priceless token model since it will be built from scratch without the need for any oracle.

Hart Lambu, the co-founder of UMA, commented on the reason behind going for an unconventional defi project model despite it being their first deployment, to which he responded:

“ETHBTC was selected as the first test for UMA’s priceless synthetic design because it’s DeFi-centric but not too serious.

This first token is still experimental, so it felt wise to choose a product that appeals to hardcore DeFi natives – the type of people that might want to bet on this rate, and who best understand the risks of ‘new’ things.”

The UMA team has, however, cautioned users who were enthusiastic about buying tokens to be careful. According to them, not only is the token quite new, but even the concept behind it hasn’t been widely tested, and thus users must proceed with great caution.

How ETHBTC Works?

In order to mint ETHBTC, a user needs to deposit DAI in a smart contract, allowing them to withdraw ETHBTC against it. The user can then either trade it in the open market like any other Ethereum based token until the contract expires or increase the liquidity of the ETHBTC pool.

When the contract expires, the collateralized DAI is split between holders and stakers, and if the relative value of the ETH against BTC is higher, the token holder receives a profit and if the value has declined the token staker receives a profit. This means ETHBTC holders would go long while the stakers go short on the synthetic token.

The other interesting aspect of this priceless synthetic token is that it doesn’t require any oracle to track the price, unlike many other token systems (see chainlink’s decentralized price oracles). Primarily because there is no on-chain activity required to keep this model flowing, and Lambur believes this could be a perfect way to scale the DeFi platform.

In case of any dispute, the involved parties can settle the issue through a vote, and the decision-makers who vote for the winning side would receive the same UMA tokens.

Lambur also explained that the voting would be unbiased since the UMA’s economy has been designed in a way that people buying tokens to gain an advantage in the voting process would remain unprofitable. As of now, the ETHBTC can be purchased on Uniswap, which just launched v2.

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Author: Rebecca Asseh

Iranian Govt Greenlights iMiner’s 6000 Rig BTC Mining Farm to Commence Operations

  • Iranian authorities have approved over a 1000 crypto mining licenses including Turkish based iMiner.
  • iMiner’s new BTC mining farm boasts of over 6000 mining rigs.

Reports have emerged that the Iranian Ministry of Industry, Mine and Trade has issued Turkey-based BTC miners – iMiner – an operating license. The company has already injected over 311 billion Rials an equivalent of $7.3 million dollars into the Iranian based mining farm.

The farm boasts up to 6000 rigs which can produce colossal computing power of about 96000 terra hashes per second combined. This put each rigs mining capacity at an averaged 16 TH/s digits only matched by the Aladdin Miner.

Iran’s subsidized energy bills have been the main factor for its escalated crypto activity. Attracting miners and investors from China and all over Europe, as has been the trend for regions with cheap electricity reeling in crypto investors notably China and Texas US.

Iranian President Hassan Rouhani was of the opinion that coming up with a standard cryptocurrency for Islamic states would be their much sought after alternative to the break US dollar monopoly. Iran has been on the receiving end of US sanctions including economic, military, scientific, and even trade-related sanctions since 1979.

Rouhani, alongside other leaders hosted in a summit last year in Malaysia, shared the sentiment that the US dollar has so far worked against them stunting their economies. Iran’s top military official has also called on their top officials and citizens to take up cryptocurrencies in a bid to improve their stunted economy.

Iran has since softened its harsh stance on crypto miners as they have already approved and issued over 1000 licenses to various miners so far including iMiner. Last year they published a dossier on the country’s power consumption which shows that the tiny central Semnan province had indeed overtaken the vast province of Khuzestan mostly attributed to miners.

This is as they looked to crackdown on ‘illegal miners’ offering up to 20% from the recovered damages to incentivize whistleblowing. These miners were deemed illegal after the just passed regulations that sought to pause miner activity at the peak times of electricity consumption.

According to Iranian Energy Ministry spokesman, Mostafa Rajabi, the average price of energy per kW/h which is roughly $0.29 almost halves during cold times. While during the hot periods it more than quadruples due to heavy consumption recorded all over the country.

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Author: Lujan Odera

MakerDAO Community Approves USDC As DeFi Collateral Amidst Liquidity Concerns

The MakerDAO community has just approved the onboarding of USDC during its ongoing liquidity crisis. This situation was brought about by a $4.5 million discrepancy that arose in the past week when ETH saw its price plummet amid the bear market.

The news emerged that MakerDAO, a player in DeFi space, held official talks in regards to onboarding the USDC as alternative collateral. And has just now been approved.  According to them, this should help input more DAI liquidity into the DeFi realm marking USDC as the third collateral after ETH and BAT.

Notably, the DAI project is unsettled by its liquidity concerns that came about when their liquidators dubbed keepers were able to secure collateral liquidations auctions. This meant that they were not required to compensate the system with DAI for their debts hence resulting in the $4.5 million discrepancy on DAI books.

MKR holders to Initiate process

Naturally, the process would be initiated by the MKR holders ‘executive’ vote on the proposal. But according to the announcement, the foundation is already on course with technical preparations to facilitate the process.

This strategic move should be instrumental as it pushes the DAI back to $1. The cycle involves locking USDC, Minting DAI and then sell the USDC and so on in a bid to restore liquidity. It also affords vault owners the luxury of closing their vaults without enduring the setbacks as the DAI peg is quite high in comparison to USD.

There are however concerns that onboarding the USDC will reduce the so-called ‘purity’ of DAI, questioning its decentralized nature. If anything goes wrong, this will not only be a PR nightmare but also spike regulatory risks in case the US government becomes hostile to stablecoins backed by USD.

MakerDAO top leaders were quick to counter the sentiments that DAI would lose its decentralized nature after onboarding USDC. They insisted that the DAI is decentralized because there isn’t a central authority in the site to oversee functionalities.

“To say that DAI is not decentralized because of some of the assets that might back it would be erroneous”

A couple of things still require planning as they are yet to decide on the intended stability fee increase. The DAI team also needs a liquidation ratio that is evenly balanced which is lower than ETH but just low enough to not allow a single vault to mint all the USDC. Lastly, they need to think of a debt ceiling enough to provide the required liquidity but also without accruing additional risks.

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Author: Edwin Munyui

Facebook’s 6-Year Wait Comes to An End: Patent for Personal Finance Tracking Tool Gets Ratified

Facebook’s 2013 patent for a personal finance tracking tool gets approved reports BeInCrypto. As per the news outlet, the tracking tool compares a user’s financial spending to those based on relatable benchmarks. This will allow a user to have an idea of where they lie in terms of percentile.

Here’s an extract of the patent that has been shared:

“Allows its users to obtain reports of their spending compared to various benchmarks. The benchmarks may be for various demographic groups, networks to which the user belongs, groups of users connected to a user or any other suitable grouping of users.”

Given that the patent has been accepted several years later since filing for it, it becomes questionable whether this is still a goal in place for the social media outlet. With the concerns they currently face in relation to their Libra project and having been under the spotlight for breach of data privacy, taking on a finance tracking tool might not be considered.

Speaking of the Libra project, so far, leaders around the world seem to turn down the idea simply because of the social media’s scarring with data privacy and the fact that such a project would result in them having too much power. Given that Facebook has also been accused for having the ability to influence elections outcomes, adding more power can be too dangerous, especially in the financial world.

Facebook has since lost a number of partners including the likes of PayPal, Visa, Mastercard, eBay and Stripe – all early members of the Libra Association – and according to CEO, Mark Zuckerberg, whether they choose to pursue Libra or not rests in the U.S’ decision regarding regulatory approval.

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Author: Nirmala Velupillai

LedgerX’s Physically Settled Bitcoin Futures Have Not Been Approved by CFTC Yet

LedgerXs-Physically-Settled-Bitcoin-Futures-Have-Not-Been-Approved-by-CFTC-Yet
  • The CFTC has not approved the launch of LedgerX’s Omni platform.
  • Previous reports from The Block and others reported that the bitcoin futures had been launched, following a tweet from LedgerX.

Yesterday, reports came out that LedgerX was finally launching the physically delivered bitcoin [BTC] options and custody that they had been working on, according to The Block. In the original report, The Block had spoken previously with LedgerX’s CEO, discussing the way that this product would open doors for institutional investors. While these previous reports showed accurate information about what the public can expect from the new product, the launch has not happened.

The Block reported on the current situation, correcting their previous statements. Instead, the publication is now claiming that the current state of the launch is “unclear,” and that the futures contracts do not appear to be going live anytime soon, as the Commodities Futures Trading Commission (CFTC) has already stated that they’ve not approved the launch, according to statements released to CoinDesk.

Many publications reported on an announcement from LedgerX, dated July 31st, that the Omni trading platform already had physical futures offering live. However, based on information from the CFTC, that is impossible. On Twitter, a derivative specialist named Thomas G. Thompson said that “the CFTC does not show any futures contracts certified by” the authority. While it is possible that their existing swaps were launched on the new futures platform, he added that this is “still [an] important development.”

The reporter with The Block stated that there’s no reported trade volume at this point, according to an anonymous industry leader, which suggests that the launch didn’t happen. However, on the official Twitter account for LedgerX, the company invited users to sign up to receive “early access” to Ledger OmniX.

Yesterday, LedgerX had tweeted that they were “live with retail trading on Omni.” However, the tweet has since been deleted. The screenshot, pulled from reports from The Block, can be seen below.

https://www.theblockcrypto.com/wp-content/uploads/2019/08/LedgerX-287x450.png

https://www.theblockcrypto.com/wp-content/uploads/2019/08/LedgerX-287x450.png

LedgerX originally revealed in April that they were working to offer Bitcoin futures, following their filing with the CFTC in November 2018 for the requisite licenses. Last month, the CFTC provided LedgerX with a designated contract markets (DCM) license, offering the final approval that it needed. While approval processes have been complete, a launch date has not officially been announced.

Along with LedgerX, Bakkt is already working with the CFTC to obtain a trust charter from the New York Department of Financial Services. Bakkt would most likely launch within a few weeks of having this trust charter approved.

ErisX, much like LedgerX, has received the approvals that they need, but no launch date or other timeline has been made available for their futures contracts. Cryptocurrency spot trading started being offered by ErisX in April of this year.

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Author: Krystle M