Crypto.com Becomes One of the First to Acquire Provisional Licenses from Maltese Authorities

Foremost cryptocurrency exchange Crypto.com has achieved another regulatory milestone. The company has bagged a preliminary approval from the Malta Financial Services Authority (MFSA) that governs how fintech companies operate on the island.

New Territories to Conquer

The two approvals are the Financial Institution License and a Class 3 Virtual Financial Assets (VFA) License, according to an official blog post from Crypto.com.

The Financial Institution License empowers Crypto.com to issue electronic money and act as a payment service, while the VFA means it could offer crypto custody services for customers in Malta. The exchange can also execute orders on behalf of Maltese traders and deal on its own account.

It’s worth noting that Crypto.com is yet to receive these licenses. An in-principle license means that the exchange will need to meet some conditions before getting full regulatory approval.

Kris Marszalek, the crypto firm’s co-founder, and CEO explained that the approval was in line with their objective to comply with regulators in the regions they operate. He added,

“Being one of the first cryptocurrency platforms to receive in-principle approval for a Class 3 VFA License and a Financial Institution License is an important milestone and we look forward to securing licenses in more markets throughout 2021.”

Hope for “Blockchain Island” Again

Widely referred to as “Blockchain island,” Malta has been taking significant steps to ensure effective oversight of its crypto industry. In 2018, the MFSA adopted the Digital Innovation Framework with a view on developing a robust regulatory environment for cryptocurrencies and blockchain innovation.

The framework included three acts – the Innovative Technological Arrangement and Services Act, the Digital Innovation Authority Act, and the Virtual Financial Asset (VFA) Act.

Many in the crypto industry saw the VFA to be the most important of all. It required businesses to seek approval with the MFSA before trading digital assets, launching Initial Coin Offerings (IOCs), or providing custody or brokerage services in Malta.

The Act also introduced VFA Agents – so-called “gatekeepers” that provide support and advisory services to crypto firms. The MFSA approved 14 VFA agents in May 2019, although not much was heard from the country since then – especially concerning approval for companies under the VFA framework.

Soon enough, businesses got antsy about Malta and its crypto environment.

In addition to the slow approval processes, reports surfaced that local banks were declining service to blockchain and crypto firms, explaining that opening accounts for the companies was “beyond their risk appetite.”

Silvio Schembri, Malta’s Minister of Economy, told the Times of Malta that banks were reluctant to serve crypto companies because they were waiting for the MFSA to approve licenses.

The MFSA also drew some controversy when it joined several other European regulators in adopting the European Union’s Fifth Anti-Money Laundering Directive (AMLD5).

It is unclear how Crypto.com’s development will impact industry insiders’ view of Malta going forward. However, considering that most have griped about the MFSA’s license regime, this could be an encouraging move.

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Author: Jimmy Aki

SGS Audit Places Crypto.com into NIST’s Highest Privacy & Cybersecurity Framework Tier

Crypto.com, the digital asset exchange and alternative traditional finance platform, has received the highest security and privacy ratings as per the National Institute of Standards and Technology (NIST) framework. The Hong Kong domiciled firm announced a recent audit by SGS placed them at Tier 4 ‘Adaptive tier’; this is the highest maturity level on the NIST privacy and security framework.

“Audit conducted by internationally recognized audit services firm SGS, which attested that Crypto.com is operating at “Adaptive (Tier 4)“, the highest tier on the scale for both NIST frameworks.” Reads the announcement.

NIST, a non-regulatory agency of the U.S Department of Commerce, released its cybersecurity framework as early as 2014. This has been instrumental in guiding the private sector players on handling cybersecurity threats, especially now that they are rampant within the tech space. This framework provides some of the guidelines that include cyber threat identification, assessment, response, and recovery.

The NIST privacy framework only came into play earlier this year to strengthen data privacy via enterprise risk management (ERM). According to Crypto.com, both the security and privacy frameworks are integral in building market trust and playing by the books regarding compliance issues. Also, lean communication amongst stakeholders in matters of privacy and security.

To receive a Tier 4 (Adaptive rating), Crypto.com was audited based on core functionalities, which include Identify, detect, protect, respond, recover, communicate, control, and govern. Notably, the four tiers of maturity in privacy and security as per the NIST framework are; Partial (Tier 1), Risk-Informed (Tier 2), Repeatable (Tier 3), and Adaptive (Tier 4).

Crypto.com Co-founder and CEO Kris Marszalek, commented on this milestone, adding that the firm’s clientele is now past the 5 million marks,

“Achieving the highest maturity level based on the NIST Frameworks speaks volumes to our commitment to security and privacy, which have been cornerstones of our business since day one.

Having recently surpassed 5 million users, we will continue investing aggressively in technology and process that maintains the highest standards of security and privacy in the industry.”

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Author: Edwin Munyui

ChainLink Partners With Crypto.com to Integrate Price Feeds Into Its DeFi Wallet

  • Crypto.com has revealed that it has inked a deal that will lead to the integration of Chainlink’s price feeds with its decentralized finance (DeFi) wallet product.

On Monday, the wallet and payment card provider based in Hong Kong, stated that Chainlink’s Price Reference Data has been directly integrated with its DeFi wallet which will give its clients ready access for its price feeds.

The addition of Chainlink’s price feeds into Crypto.com’s DeFi wallet is in line with the latter’s expansion program towards booming spaces. According to Eric Anziani, Crypto.com’s chief operating officer, the partnership will add more value to its customers. Anziani explained:

“I would say with the partnership with Chainlink is kind of our first integration with a DeFi protocol, it brings value to our customers in terms of providing transparency in the prices that we’re giving them in our DeFi wallet and also making sure our ecosystem token CRO can be integrated into the external protocol by building a price feed for CRO specifically thanks to the Chainlink architecture.”

According to a press release shared with Bitcoin Exchange Guide, the firm will start with its native token in receiving the decentralized price feed, CRO/ETH but plans are underway for the addition of CRO/USD. Anziani clarified that the firm will kick off with DeFi tokens, however plans are underway to utilize Chainlink’s price feeds for the rest of the tokens within its ecosystem.

Anziani also explained that the expansion is not intended to take advantage of the current hype, but is driven by the basic belief that each person is entitled to have the control of their money, identity as well as data and the blockchain tech-based firms should lead towards this achievement.

Speaking on the recent controversy surrounding top exchanges listing the much-hyped SUSHI token, Anziani explained that his firm’s clients trust that Crypto.com has solid due diligence protocols before a new asset is listed which informed the firm’s decision not to list it.

Crypto.com rolled on its wallet at the start of this year touting it as a user friendly wallet to capitalize on the buzz around DeFi space.

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Author: Joseph Kibe

Crypto.com Forks Uniswap & Launches DeFi Swap on Ethereum

Hong Kong-headquartered Crypto.com has launched a DeFi Swap service, which allows users to swap and farm DeFi tokens.

A fork of Uniswap V2, the platform is powered by its native token CRO, the 10th largest cryptocurrency by market cap, which is trading at $0.160, up nearly 6%.

Other coins supported are Wrapped ETH (WETH), Tether (USDT), USDC, DAI, Chainlink (LINK), and Compound (COMP), with more to be introduced in the future.

One can start farming by using any WalletConnect enabled mobile wallet, which the company says will soon be coming on its DeFi Wallet.

Gains & Losses

The liquidity providers (LPs) will be rewarded with 0.3% of the respective liquidity pools’ trading volume. For selected pools, LPs will also receive tokens that are redeemable for coins of the participating DeFi projects.

Crypto.com is guaranteeing a minimum reward pool of 14 million CRO for the first 14 days on this Ethereum-based decentralized protocol.

Meanwhile, those who stake CRO can “boost their yield by up to 20x and harvest the daily yield in as little as 30 days.”

These services, however, are restricted to the residents & citizens of over 30 countries, including the US, Mainland China, Hong Kong SAR, Iran, Iraq, and Venezuela.

Much like any DeFi project, the company clearly states using it at your own risk as it cautions of risks involved that aren’t limited to the loss of virtual assets, collapse in liquidity, changes in the smart contacts, extreme volatility, counterparty risk, attacks, hacks, defects, loss of private keys, and regulatory uncertainty.

“Not a Bubble”

The ongoing mania has resulted in the DeFi space exploding with the total value locked in it amassing nearly $10 billion, which after the recent correction, is currently under $8 billion.

However, “DeFi is not necessarily a pure bubble about to burst,” said Crypto.com in its report on decentralized finance. The report continued,

“It might deflate once the hype subsides, but as globalisation progresses and the business ecosystem further shifts towards new-generation business models built upon shared governance and decentralisation, there will be a growing demand for solutions like DeFi which will provide new ways banking, trading and investing – perhaps even setting the standard for economies to climb out of the shadows.”

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Author: AnTy

Crypto.com Rolls Out New Infrastructure Upgrades In Preparation of Derivative Products

Crypto.com, a cryptocurrency trading platform, announced its plans to extend its services to margin and crypto derivatives trading, challenging the big hotshots in the field, including OKEx, Huobi, and Binance.

The announcement further confirmed the addition of new specs and features to improve the overall scalability, speed, and security of the platform.

The new key infrastructure upgrades include a reduction in fees, 10x faster trading speeds with the introduction of a new matching engine, and an order management system (OMS).

Crypto.com Introduces Crypto Derivatives

Crypto.com launched its beta exchange trading platform at the end of 2019 to cater for crypto traders with a need for speed and security for their funds. The company focuses on different aspects of the crypto ecosystem, including the issuance of crypto debit cards and custody services, but the exchange remains the critical driver of growth.

In a bid to improve the trading experience, Crypto.com added improvements. This included its matching engine – OMS – which has increased the throughput and speed by 10x; unified REST and Websocket API allowing high-frequency trading; and a new redesigned infrastructure to improve scalability, security, and eliminating the single point of failures.

CEO of Crypto.com Kris Marszalek said in response to the new improvements:

“With the enhanced performance of the exchange and new features in the pipeline, we want to eliminate any reason for users to go elsewhere and function as their trusted ‘one-stop-shop’ for their digital asset needs.”

The improvements will culminate with the launch of crypto margin trading and crypto derivatives in the latter months of the year once the test phase is complete. However, the exchange will not waiver on holding 100% of its customer’s funds in an offline cold storage wallet despite introducing new products and the need for liquidity on the exchange.

To celebrate the changes, Crypto.com is offering users up to 50% in trading fee discounts, a 2% deposit interest rate, and 0% trading fees for new users.

A Challenge for Crypto.com?

Crypto.com was launched back in 2016 as Monaco, a crypto debit card company, offering MCO tokens as incentives.

However, with the growth of the crypto industry, the company switched to a fully-fledged exchange, raising $100 million in Q3 2019 to offer crypto insurance. The insurance pool has since grown to over $360 million from its 2 million customers across the world.

Now, the company is aiming to compete with the largest companies in the crypto futures business, including Huobi, OKEx, Binance, and BitMEX. They control billions of dollars in the BTC futures market.

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Author: Lujan Odera

Crypto Debit Card Issuer Wiredcard Missing $2 Billion, No Fiat or Crypto Funds at Risk

German payment processor Wirecard which issues debit cards of Crypto.com has its share plunging more than 60% after the company said on Thursday that its auditor Ernst & Young can’t find evidence for €1.9 billion euros (US$2.1 billion) in cash on its balance sheet. Markus Braun, Wirecard chief executive, in a statement said,

“Previously issued confirmations by the banks were no longer recognized by the auditor. All parties involved are endeavoring to clarify the matter as quickly as possible.”

“It is currently unclear whether fraudulent transactions to the detriment of Wirecard AG have occurred.”

Source: TradingView

This is, however, just the latest twist as back in October, Wirecard staff reportedly conspired to fraudulently inflate sales and profits at subsidiaries. The company denied the charges and after a special investigation, KPMG said it couldn’t prove the revenue of its third-party acquiring business. Barry Norris, manager of the Argonaut Absolute Return Fund said,

“During our first-quarter conference call we previously described the company as ‘having more red flags than you would see at a communist rally.’”

Germany’s stock market regulator is separately investigating the company CEO who held 7% of the stock making him the largest shareholder, over insider trading allegations.

Crypto Connection

Wirecard Card Solution, the wholly owned subsidiary of Wirecard issues the MCO Visa Card of Crypto.com and Visa Debit Card of TenX.

After the news broke out, Kris Marszalek, chief executive of Crypto.com clarified that the debit cards issued by the company are “fully prefunded” and Wirecard doesn’t have custody of any cryptos held by Crypto.com. Marszalek said,

“These client fiat funds are held by an EMI institution regulated by UK FCA in segregated client accounts. The funds are held at another bank (not Wirecard) as required by the FCA.”

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Author: AnTy

Payment Platform Crypto.com Receives ISO/IEC 27701:2019 Certification for Data Privacy

Crypto.com, a crypto payment platform has become the first crypto service provider to obtain an ISO/IEC 27701:2019 privacy certification, announced the payment platform on June 2nd. After numerous third-party audits, SGS which is a leading inspection certification provider, granted the golden privacy certification to Crypto.com.

The privacy certification is considered as the new standard for data privacy as it set the standards for Privacy Information Management System within an organization. The certification also requires the assessment of information security risk. The firm seeking this certification can determine the scope of the audit.

Crypto.com underwent a rigorous audit of multiple departments including the mobile application. SGS mainly focused on the privacy information management system that has been put in place to help mitigate privacy risks. SGS examined the company’s privacy risks against the ISO/IEC 27701:2019 standard, The certification for crypto.com for sure is a big achievement, but it needs to continuously maintain the same standard of privacy and data security to maintain its certification status. Jason Lau, Chief Information Security Officer of Crypto.com stated,

“Rather than focusing on one data privacy regulation, our strategy is to work towards having a global data privacy governance model, allowing us to adapt more readily to changing regional regulations. ISO/IEC 27701:2019 is validation to our employees and our customers that our focus is not just security, but also upholding the privacy rights of individuals, and an organizational-wide commitment towards constantly enhancing our global privacy program.”

Crypto.com was founded in 2016 and currently boasts of over 2 million customers. The platform has managed to garner high interest for its privacy features and ease of use. The privacy certification would only boost its contention further.

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Author: Rebecca Asseh

Crypto.com Now Boasts $360M In Pooled Insurance to Secure Its 2M Users’ Digital Assets

Crypto.com announces a $360 million insurance fund for their offline crypto assets after partnering with institutional custody provider Ledger Vault, who offered additional insurance through Lloyd’s of London subsidiary crypto arm, Marsh.

However, the company’s CEO, Kris Marszalek, stated the journey to securing the additional funding is costing “an arm and a leg” but hopes for more competitors to enter the field to give crypto companies wiggle room in negotiation.

Crypto.com Insurance Fund Grows to $360 Million

Ledger Vault, a crypto-insurance fund secured a partnership with Lloyd’s of London Syndicate Arch back in 2019, securing a $150 million crypto insurance policy. Crypto.com, a subscriber to the system topped up $100 million through a direct plan and an additional $110 million in custody insurance from BitGo.

Marsh and Arch, the crypto arm in Lloyd’s who are leading focus on crypto-insurance enabled the Crypto.com’s additional insurance policy. James Croome, head of specie for Arch Underwriting believes current challenges in the underwriting of crypto insurance policies lie in understanding the custodial processes employed by the firms. Croome further said:

“By choosing to partner with Ledger Vault, a known service provider to insurers, Crypto.com was not only able to provide underwriters with the necessary confidence in their custodial security, but they were also able to obtain a policy in a much shorter time frame than is ordinarily the case.”

Crypto Insurance is a Hard nut to Crack

Despite successfully raising a record amount of $360 million in Crypto.com’s offline assets insurance, the CEO, Kris Marszalek, laments on the difficulty and time-consuming process, the big institutional insurance firms take. Kris said:

“These types of big firms and institutions take their sweet time of course, and boy, oh boy, do they charge an arm and a leg for this.”

The company paid for the firm’s education in its custodial services within the space. Kris hopes the field will get more competitors in offering insurance to give a leeway for crypto companies to negotiate better rates. He concluded:

“Over time, as the industry gets bigger and maybe some competitors come in, we will have slightly more leverage to negotiate.”

However, top exchanges across the field are coming up with their insurance fund in a bid to solve the current barriers of entry in the institutional crypto-insurance field. Binance, BitMEX, Huobi and other top exchanges are all taking up the “self-insure” approach, but Kris quite prefers an external player given the audits and trust by the users. He said:

“Am I a fan of the insurance industry in general? Probably not. But our customers care. They know that before the insurer gives their stamp of approval, they are going to go in and check everything.”

Crypto.com Adds Payment Plug-in on Ecwid

Currently, the crypto exchange platform has over 2 million customers on the platform, and the number looks set to grow further after recently launching crypto debit and credit card purchases in several countries. Kris explained that the latest crypto insurances were less to do with the fund growing to support the several clients they have.

Furthermore, the company recently announced a partnership with Ecwid, a Shopify kind like application, to provide crypto payment checkouts on the platform. With the platform boasting over one million customers, the Crypto.com Pay Checkout plugin is expected to further raise awareness on crypto utility.

The plugin will support top crypto payments including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), XRP and Crypto.com Coin (CRO), the platform’s native token.

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Author: Lujan Odera

Economist Survey Suggests Users Trust CBDC’s (54%) Twice As Much As Private Crypto’s (26%)

A recent survey conducted on crypto assets and investment by Crypto.com and The Economist saw participation from over 3,000 users.

The survey shed some interesting light on how the general public perceives cryptocurrencies. The most surprising part was that the majority of those surveyed expressed far more interest and confidence in Central Bank Issued Digital Currencies than more popular decentralized crypto assets.

The survey revealed:

  • 38% of the people did not consider decentralized crypto as a safe investment against
  • 26% of people who believed that decentralized crypto tokens are a safe form of investments while
  • 25% of those surveyed were in the middle and the remaining
  • 11% had no idea whether they are safe or not.

On the other hand, 54% of the surveyed people showed trust in CBDC and believed that a token issued by their government or central bank would be a more secure form of investment, while 14% believed CBDCs are not that safe. 23% of the correspondent was in-between and the remaining 9% had no idea.

Use-frequency-for-payment-methods
Source: Economist

Why People Trust CBDCs More than Decentralized Currency?

Survey respondent rating of trustworthiness

The cryptocurrency space emerged with the launch of Bitcoin after the financial crisis of 2008/9. It only gained the attention of the large public after the massive rise in 2017.

At the same time, Bitcoin and cryptocurrencies received a lot of negative press, perpetuated by central banks, commercial banks and even governments who called it a mere internet bubble.

However, in the following years, these critics realized that cryptocurrencies, like any other new asset, are volatile and not just an internet bubble and thus a lot of them changed their stance including governments.

These cryptocurrencies have been advertised as an alternative form of currency by many proponents. But because of their high volatility (which has come down significantly) it still cannot be used as a direct form of exchange.

Thus a majority of the people use it as an instrument for investment diversification. Along with the volatility issues, and passive regulatory stances of governments, even in developed nations, it makes it tough for the common public to look at it as a safe bet.

The lack of knowledge among the broader public, whose only aim is to see Bitcoin rise to 2017 level highs as a quick profit maker, in addition to evolving scams involving crypto, wreaks havoc on the underlying trust in digital asset classes.

On the other hand, Central Bank Issued Digital Currencies (CBDC or DC/EP) offer that sense of security that at least their asset won’t be under the scanner of authorities.

Apart from that CBDCs are basically digitized fiat that runs on the common credit system of the country and thus people won’t have to worry about high volatility or their investment getting to zero.

Apart from that, a majority of the countries are looking to launch their own CBDCs. China currently at the top, having already started trials for its national digitized yuan. Other countries, meanwhile, have either started research for the same or are looking to study the pros and cons of launching CBDCs.

The Rate of Crypto Adoption in Developed Nations Are High

The survey found that there is a 20% deviation in the rate of adoption between developed and developing nations. Meaning that the chances of consumers in developed nations of adopting crypto was 20% higher than developing nations.

The survey revealed that 23% of the surveyed consumers in developed nations owned cryptocurrencies, while only 19% of people in developing nations had already invested in digital assets.

The study also revealed that 60% of crypto owners were aged between 18 and 38 years old while only 40% above 39 years owned crypto.

Digital Currency Survey By Economist.com

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Author: Rebecca Asseh