Leading Japanese Messaging App, LINE, Launches Crypto Lending Services on BITMAX Exchange

LINE, the Japanese messaging app giant, is launching crypto lending services for its clients through its subsidiary crypto exchange, BITMAX. The news, which was first reported by CoinDesk Japan, highlighted that BITMAX users will be now be permitted the option of lending their crypto holdings to the exchange service, with BTC, XRP, ETH, BCH, or LTC as the underlying collaterals.

This service is set to function similarly to bank loans; only instead of interest, the lenders will receive a ‘rental fee.’ LINE filed a statement with the Tokyo Stock Exchange on Oct 9, noting the firm will be running a campaign up to Oct 30, where users could earn as much as a 10% rental fee for lending their digital assets. This should start accruing from the day the rental is deposited.

With LINE’s 80 million local outreach, the new lending services become bullish to the Japanese crypto market. The country which has had historically low-interest rates will probably benefit from the exposure in crypto volatility, although at the cost of accommodating the high risk.

LINE made it’s crypto debut onto the Japanese market last year after being granted an operational license by the country’s Financial Services Agency (FSA). They recently launched a blockchain development platform and digital wallet as part of scaling LINE’s crypto services footprint.

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Author: Edwin Munyui

Bermuda-Based Digital Asset Bank, Jewel, Partners With Crypto Custodian Anchorage

Jewel, a proposed digital asset bank in Bermuda, has been added as one of the clients to Anchorage’s digital asset custodial services. The yet to be approved digital asset bank announced on September 16, noting that the move will be beneficial to crypto companies based on the island.

Anchorage, licensed in the U.S, significantly increases the value proposition of Jewel digital asset bank as a prospectus entity in the Bermuda crypto banking space. Jewel’s chairman and founder, Chance Barnett said,

“Our relationship with Anchorage enables us to serve our clients with the rigorous security and product standards needed for bank-level safety, service, and compliance.”

Leveraging Anchorage as its crypto custodian will help Jewel run operations smoothly; the target functions include the provision of checking accounts and other crypto banking services to firms in this niche. Consequently, Anchorage is set to play a fundamental role in the custody of digital assets entrusted to Jewel by its clients.

It is quite noteworthy that Anchorage’s custodial services are relatively liquid, given that the firm does not use cold storage. Jewel is optimistic that this position will further facilitate its product scaling to feature lending services for crypto-oriented entities. The company’s Chief Revenue Officer, Jill Richmond, added that they intend to increase operations to other jurisdictions as well,

“We are at the forefront of being able to service global markets … We have existing letters of intent at the moment with a number of the top Tier I, Tier II digital asset exchanges.”

Bermuda’s Progressive Blockchain and Crypto Approach

While Jewel will probably be the first approved digital asset bank in Bermuda, the island has been a leader in the blockchain adoption and regulatory space. Some notable milestones include developing a blockchain identification system in collaboration with the Shyft network and Perseid. The small island is also becoming a crypto business hub with exchanges shifting operations from stiff regulatory jurisdictions like the U.S.

Interestingly, Bermuda’s government is also one of the few authorities that accept tax payments in crypto, the USDC coin, to be specific. If Jewel is given the go-ahead, the crypto payment options will probably scale based on this digital asset bank’s ability to spur integration by acting ‘as the banking bridge between digital assets and traditional fiat currency (USD) held in banking accounts.’

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Author: Edwin Munyui

Coinbase Launches Dai Rewards Program, Sets APY at 2%; Is That The Best Rate Available?

Coinbase crypto exchange has launched a Dai rewards program that will see its clients earn a 2% APY for holding this stablecoin in their accounts.

According to the blog post on July 29, this product will be available in six countries, which include:

  • the U.S.
  • Netherlands
  • United Kingdom
  • Spain
  • Australia
  • France

The move comes as another boost to Maker, which is Dai’s parent and currently the leading DeFi with a total value locked (TVL) of $1 billion, 27% of the total DeFi market value.

Back in 2019, Coinbase rolled out a similar initiative for the USDC stablecoin with rates as high as .125%; this was, however, slashed by 90% this year. The U.S. based crypto exchange has since noted that stablecoins have quite a role to play in the crypto ecosystem when it comes to volatility elimination.

These digital assets have grown significantly, comprising $12 billion of the crypto market, it’s no wonder Coinbase has such faith in them:

“This is one reason stablecoins have grown to a market cap of more than $12 billion, as people use them to hold funds without volatility, transfer funds quickly and cheaply, and gain exposure to the U.S. dollar.” reads the blog.

Notably, the new Dai Rewards by Coinbase will be issued to accounts with as low as $1, with the initial rewards set to be distributed within five days. With the current market lows in savings rates, they might just be another asset class with a better deal than wall street bankers at the moment. But that isn’t to say that traders aren’t already voicing their displeasure for such a low rate. Comparing the rate at which Coinbase offers vs many other exchanges and DeFi apps, it is quite low. For example, Nexo offers 8%, Compound does 7.28%, or Celsius sitting at 5.93%.

Also, crypto investors get to control their digital assets at any time based on the aspect of decentralization. Dai holders can withdraw their rewards as well as funds at any time. The downside, however, is that crypto exchanges are risky than traditional banks.

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Author: Edwin Munyui

Binance Partners With CM-Equity To Expand Its Market Reach In Germany And Europe

  • Binance’s latest partnership set to introduce its trading services and crypto asset management to clients in Germany and Europe.

In an announcement on Friday, Binance, the largest crypto exchange in daily volumes traded, announced its partnership to a German investment firm, CM-Equity, to provide crypto brokerage and asset management services in Europe.

Cryptocurrency investors and traders within Europe and Germany will now be able to operate proprietary trading and brokerage services ON Binance. CM-Equity is a BaFin regulated investment firm that opens up a regulation-compliant gateway for Europeans to trade crypto assets and associated derivatives on a highly secure and liquid platform.

Binance aims to penetrate the European market in the preparedness of their upcoming VISA enabled debit cards set to be launched later this year. On the partnership, Changpeng Zhao ‘CZ’ said the two firms aim to “grow the digital assets industry in a sustainable way” as they expand their crypto services to global clients.

He further said,

“By joining forces with CM-Equity, Binance will be able to broaden our services in Europe while ensuring compliance with local regulations.”

CM-Equity was launched in 2020, growing into a fully compliant investment bank and has gained its license from the German Financial Markets Authority, BaFin. The German financial regulator launched its guidelines on foreign crypto custodians and crypto firms offering services in the country earlier in the year.

The partnership with one of the biggest crypto exchanges opens a new world of possibilities, Michael Kott, CEO of CM-Equity, He concluded,

“Our fully licensed digital assets platform will benefit from the best liquidity and frictionless service offered by Binance.”

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Author: Lujan Odera

International Banks Reportedly Enhance Due Diligence in Hong Kong Following New Security Law

Global banks have begun scrutinizing their Hong Kong clients to filter out pro-democracy individuals following the new national security law backed by mainland China.

A recent report by Reuters has revealed that the likes of HSBC, Credit Suisse, and Julius Baer are among the international banking giants that have since increased their diligence process, screening for government and political ties.

With the new security law in place, such a move was anticipated, given more exposure to regulatory risks. Citing anonymous sources, the report notes that banks have, in turn, introduced a new ‘sub-class’ of threat dubbed ‘politically exposed persons.’

“The designation, called politically exposed persons, can make it more difficult or altogether prevent people from accessing banking services, depending on what the bank finds about the person’s source of wealth or financial transactions.”

It goes on to detail that wealth managers are relying on social media posts by the individuals and their affiliates in the recent past. A key stakeholder in this industry revealed that his clients’ AUM, which currently totals $200 billion, could be audited as far as 2014 to determine a person’s stand in the Hong Kong pro-democracy ‘umbrella’ movement, which kicked off in the same year. Should a party be found to be a pro-democrat, they may end up being excluded from Hong Kong’s entire financial ecosystem.

Though none of the global banks has yet to comment on the matter, they appear to be towing the line as they look to maintain and probably scale business in Hong Kong.

Surprisingly, this is not the same reaction from parent governments that have since called out China for the new security law. The U.S senate, for instance, has already passed some sanctions under the ‘Hong Kong Autonomy Act,’ which could eventually affect financial service providers that link Hong Kong’s liquidity with the dominant dollar-system.

China CBDC Implementation takes on Crypto Decentralization

At the same time, China is fast-moving to play an ace card on the emerging decentralized economy whose fundamentals are pegged on crypto assets. The country banned cryptocurrencies earlier but has aggressively developed its own PBoC backed digital currency, an initiative that is now a reality in the pilot phase.

Also dubbed ‘DC/EP,’ the Chinese digital yuan will be an integral part of its financial network, given most of its population already transacts via Alipay or WeChat. Notably, the CCP will be able to exercise further its authoritarian approach in this new central bank digital currency.

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Author: Edwin Munyui

BitGo Launches FATF Travel Rule Compliance Product, Rallying Other VASPs to Adopt

BitGo, a San Francisco domiciled crypto custodian, is extending its API’s for clients to append their data in line with the FATF ‘Travel Rule.’ This set of regulations came into action back in 2019 under recommendation 16, requiring all Virtual Asset Service Providers (VASP) to comply with the guidelines.

Most notably is the aspect of data traveling whereby any amount above $1,000 sent via the crypto ecosystem has to go along with the sender’s data. BitGo’s internal APIs now seek to make this more practical, with the firm being optimistic about mainstream adoption by other VASPS as well. Mike Belshe, the CEO, of BitGo, has since confirmed the firm’s potential in scaling this milestone to other projects:

“We can offer this technology to our exchange clients and, in the process, assist them with the new FATF standards for digital asset compliance.”

BitGo’s API Travel Rule Solution

This innovation is expected to enhance the compliance of BitGo as a VASP while recording originator and beneficiary data as stipulated by the FATF Travel Rule.

It has already started working within BitGo’s ecosystem; the platform users have since been asked to check out the new API feature to be able to submit additional information during transaction requests in the network. The company’s senior product manager, Chris Metcalfe, noted that the process should be seamless given prior experience with API tools:

“The integration effort required by our clients is relatively light, as they simply need to append slightly more information about the sender in the transaction requests they are already making.”

To support communication between VASP providers, BitGo’s API has been upgraded to accommodate a subset of InterVASP’s IVMS101 standard. In doing so, BitGo is optimistic about acquiring a more significant market as the FATF crackdown looms. According to Metcalfe, this is possible given BitGo’s value proposition in the crypto ecosystem:

“So, BitGo, being the wallet platform to many of these large exchanges, has a good reason to believe we are going to be a source of gravity.”

Other than the VASP Travel Rule solution, BitGo has been working together with prominent banks like Standard Chartered and ING in developing a bank-backed Travel Rule Protocol (TRP).

“We are working towards an MVP (minimum viable product) with the TRP, as well as the U.S. Travel Rule working group, so we kind of have our toes in two ponds, and intend to play in both of those networks,” highlighted Metcalfe.

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Author: Edwin Munyui

Fireblocks Launches A Digital Asset Transfer Network to Facilitate Faster Transactions

  • Institutional-focused digital asset security firm, Fireblocks, announces an online directory for its clients to enhance the transfer of digital assets across accounts.
  • The official launch of the “Secure Asset Transfer Network” will set up an efficient and quick way for users to find and connect with their peers and transfer digital assets.

The digital asset transfer industry has faced a couple of challenges especially for institutional investors including lack of security of assets and speed of transfers. Fireblock’s ‘Secure Asset Transfer Network’ aims at improving its secure asset transfer environment making the process of transferring assets across wallets and exchanges more efficient and faster.

On the asset transfer environment (previous iteration), Fireblock’s counterparty clients were only able to send transactions after manually connecting their wallets or accounts. In contrast, the new asset transfer network allows users to directly search for the counterparty account which reduces the transaction time to just a “few seconds”.

According to the statement, the Secure Asset Transfer Network also increases the liquidity and operational efficiency opening the door for institutional investors to join the digital asset space. So far, Fireblocks has integrated over 55 institutions and 26 crypto exchanges including Binance, OKEx, Bithumb and HitBTC.

The Fidelity Investments-backed, Fireblocks, offers its institutional clients a secure platform with multiparty computation (MPC) and insurance of assets, both in storage and when in transit. The CEO of Fireblocks, said,

“With more institutional players joining the digital assets ecosystem, the Fireblocks Network serves as an essential layer to streamline the operations and eliminate the biggest risk in moving and settling digital value, and created the most adopted rails for executing blockchain transactions in a way that even non-technical users can use quickly and securely.”

The company received Ernst & Young’s (EY) accreditation by passing a SOC 2 Type II Certification audit that showed it follows the highest data security standards. Fireblock boasted at the end of last year that it was completing $2.5 billion in crypto transactions monthly reaching a total high of $30 billion in digital asset transfers in April.

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Author: Lujan Odera

Crypto Derivatives Exchange ErisX, Opens API Service for BCH, BTC, ETH, and LTC Block Trading

  • ErisX REST API will now grant registered clients access to their Block Trade platform. This will be a reserve for the Institutional investors due to the large volumes of minimum trades required.
  • The pre-negotiated deals will only be reported for automated verification and instant clearing by the ErisX clearing win.

ErisX has now unveiled a REST API that grants its clients access to their Block Trade. This is a facility that allows investors to make big trades, within the given array of listed spot and futures commodities, privately.

Authorized users will be able to table already struck Block deals to the exchange via the REST API or their web-based platform. This will then be subjected to verification from the exchange. It’s also set to include verifying credit for both parties and then submitted to their clearing arm, ErisX clearing for immediate settlements.

It’s only after the deals have already gone through that they can be published on their portal. This system would be restricted to spot trades of 10 BTC, 100 BCH, 100 ETH and 250 LTC while including 10 Future BTC contracts and 50 ETH contracts according to the release.

They have, however, insisted that this feature would only be afforded to Clearing members that had already joined and those currently onboarding ErisX.

They would then be required to pre-fund their accounts before attempting any trades to ensure transactions go through smoothly, whilst mitigating counterparty woes. The parties would be required to either submit their trade dates to the system or within 15 minutes of execution.

This, according to CEO, Tom Chippas, would mitigate risks brought about by OTC based workflows while ensuring competitive prices for their clients.

“We are removing the friction and risks associated with OTC based workflows…. Our Members with a competitively priced service.”

Other exchanges have also launched similar Block trades for their institutional investors including Coinbase and Japanese based Nomura. However, Carlos Mosquera Benatuil, CEO of Solidus OTC is confident that the Commodity Futures Trading Commission oversight would rule out counterparty settling risks.

Notably, the TD Ameritrade backed crypto exchange recently launched physically settled Ether contracts in the US. These would be offered under the supervision of the CFTC.

This was bolstered by the fact that ErisX clearing was able to get approval for the coveted BitLicense by the NYFDS. This license has only been issued to 25 other companies since it was introduced in 2015. It is a must-have for any crypto firm that intends to engage with New York-based clients.

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Author: Lujan Odera

Bakkt Warehouse Reveals Over 70 Institutional Investors Onboarded For Custody Service

Bakkt has just announced that they have added over 70 new custody clients and given them the option to be covered by an insurance policy that provides coverage of more than $600 million.

The Bitcoin warehouse made the announcement on Monday, through a blog post. It further added that it closed a partnership with the insurance broker, Marsh, in order to provide approximately $500 million in coverage.

Bakkt clients would need to buy this insurance on their own, making an addition to the custodian’s already existing coverage of $125 million. Marsh has been active in the crypto industry ever since 2018. It provides and facilitates insurance for Ledger and Crypto.com.

Bakkt Completed the SOC 1 Type I Examination

Bakkt said it has, at the moment, over 70 custody service customers. To build trust and to gain these new clients, the company completed the SOC 1 Type I examination conducted by KPMG. SOC 1 Type I is a type of evaluation on how firms report controls at a specific moment in time.

PricewaterhouseCoopers also conducted the SOC 2 Type II examination on Bakkt’s enterprises and the infrastructures Intercontinental Exchange, its parent firm, hosts. This type of analysis is for a 6-month period of customer data protection measures the firm that’s being evaluated is taking.

Bakkt Is Working on a Retail-Focused App

Bakkt seems to be very busy lately, as it now focuses on developing an app focused on retail, in attempt to attract over 30 million new users after closing partnerships with two financial institutions that haven’t been yet named in the blog post.

This app will be related to the acquisition of loyalty rewards Bridge2 Solutions, an acquisition that Bakkt recently made. Here’s what the company’s Monday blog post reads further:

“Our enterprise loyalty products provide critical infrastructure to companies around the world, and we’re proud to power thousands of programs that unlock digital assets for consumers.”

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Author: Oana Ularu

US Branch of 7th Largest Accounting Firm, Grant Thornton, to Leverage EOS Blockchain

  • Accounting giant firm Grant Thornton migrates clients’ inter-company transactions to EOS Blockchain via their platform Inter.x.
  • The users of Inter.x will now be able to track inter-company transactions by following unforgeable data trails.

It has been reported that industry titan in the US accounting sphere, Grant Thornton is migrating all their customer base intercompany transactions to EISIO. Their new Inter.X platform now leverages the Blockchain solution to process intercompany transactions.

This is set to include real-time analytics that will now keep track of compliance of pricing and treasury management to uphold transparency. The US Grant Thornton is part of the larger Grant Thornton International.

Intercompany transactions have been reported to be among the top most common scenarios of corporate financial amendments. They are often the hotbed of core fraudulent activities, errors, and time wastage. The chief transformation officer at Grant Thornton, Jamie Fowler is confident that Inter.x has a straightforward outlook that is able to investigate missed chances while identifying scenarios where the transactions haven’t complied with company standards.

The platform will also give the companies the ability to make quick decisions as opposed to the traditional bureaucratic approach that took effect monthly or even annually. The users of Inter.x could now trace transactions by following a trail that is practically unforgeable ensuring data integrity.

Coming up with the exact volume for their intercompany proceedings may prove to be a daunting task according to their spokesperson. However, the company made an estimated $1.9 billion in income for the last financial year according to the press release. This represents a gradual annual growth of 5.4% which according to the CEO, Bradley Preber was attributed by their combining of cutting edge tech and their business expertise to deliver value to clients.

“We posted historic revenues last year… By combining technology solutions with business knowledge we’re helping clients drive efficiencies, lower risk and improve quality”

The EOS.io 2.0 Update

Notably, the development firm behind the EOS Blockchain, Block.one released the EOS.io 2.0. this January barely three months after they released their previous version. This is the software on which the EOS Blockchain runs on. It has been reported that the EOS.io 2.0 outperforms its predecessor by up to 16 times which is even faster than Ethereum.

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Author: Lujan Odera