China Blacklists Crypto OTC Trading Desks With A Five-Year Banking Ban As Punishment

  • PBoC blacklists crypto OTC traders in its latest efforts to crack down on money laundering.
  • This has caused several OTC trading desks to shut down as the future turns bleak.
  • The central bank set a three to five-year banking ban in the country as punishment.

Bitcoin over-the-counter (OTC) traders could be facing up to a five-year ban on their banking accounts in China, local reports state. The central bank, People’s Bank of China (PBoC), is heavily cracking down on money laundering activities and is blacklisting several OTC trading desks dealing in cryptocurrencies.

Recently, the Chinese central bank had enhanced its efforts in cracking down money laundering activities hence the latest move. In a bid to stop the illicit and illegal trades, the PBoC is taking a step affront to combat cryptocurrencies being used to launder funds by setting some of the OTC traders under its “disciplinary list.”

The first step in PBoC’s crackdown in the crypto ecosystem will target large OTC traders who trade in millions. According to the report, exchanges that allow transactions away from the public and transact high volumes will be blacklisted. Some have already faced the brunt, having their bank accounts and bank-issued cards blacklisted for the next three years and their online accounts banned for the next five years.

Local banks and financial institutions are now in charge of monitoring money laundering, bidding to keep the vice away at the lowest levels and higher levels of government. The institutions quickly flag and restrict the transactions involved in money laundering, and subsequently, the information is transferred to the local branch of the PBoC.

Once registered, the “blacklist” is transferred to other banks and local financial institutions across the country. This prevents the OTC dealers on the disciplinary list from opening and transferring funds to new accounts.

Despite the crackdown, regulations on cryptocurrency transactions within China remain slim – leaving a grey area on the crypto transactions by investors. Because there are no corresponding rules and regulations, “various financial institutions have different judgment standards for cryptocurrency transactions” hence some crypto OTC desks could be flagged by some local financial institutions.

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Author: Lujan Odera

China Should Seize the ‘First Mover’ Advantages of Launching A CBDC: PBoC

China should aim at becoming the first country to issue digital currency as part of its efforts to internationalize the yuan and lessen its over-dependence on the world’s dollar-dominated payment system, the People’s Bank of China (Chinese central bank) said.

The commentary appearing in China Finance, a People’s Bank of China run magazine, opined that the rights and capacity to offer and control digital currencies is set to become the ‘new battlefield’ among various sovereign nations. The article also claims that issuance and the circulation of virtual currency will alter the current international financial system.

The article argues that China should aim at becoming a first mover in the digital currencies space and calls for the acceleration of the development of the country’s CBDC.

“China has many advantages and opportunities in issuing fiat digital currencies, so it should accelerate the pace to seize the first track,” says the article.

Also, the article argues that data feedback from a Chinese central bank-issued digital currency (CBDC) would be vital for the development of a national monetary policy, which is imperative for economic recovery in the post-pandemic landscape.

The article also revealed that PBoC’s digital currency research outfit had filed approximately 130 patents related to crypto applications touching on issuance, circulation, and implementation.

The People’s Bank of China’s research institute was founded in 2015 to look at the feasibility and implementation process of digital currencies, to reduce the costs of circulating fiat currency and enhance policymakers’ grip in the money supply ecosystem.

Last month, various state-run Chinese commercial banks embarked on large-scale piloting of the digital wallet, which is a step closer to the highly awaited official launch of the digital currency. PBoC revealed last month that about 400 million people are involved in the piloting program for a digital yuan.

The Chinese central bank is looking forward to using the digital yuan during the 2022 Winter Olympic Games.

The article concludes that digital yuan can help in breaking the dollar hegemony in the international monetary system.

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Author: Joseph Kibe

US Bank Regulators to Roll Out Uniform Rules for Crypto & FinTech Firms; Streamlining Licensing

  • In efforts to ease the regulatory process for payment services and crypto firms, the United States is set to introduce a unified set of regulations that will be used in about 48 states.

As per a press statement shared with Bitcoin Exchange Guide, money services businesses based in the United States, composed of crypto firms, will in the near future enjoy easy regulatory processes. The press statement explains that the Conference of State Bank Supervisors (CSBS) is set to launch a group of state regulators which will oversee all the licensing work.

CSBS will bring together 48 state regulators who have agreed to come up with a unitary set of supervisory rules. Until today, crypto-based firms as well as payment service companies were forced to adhere to numerous individual state regulations.

About 78 firms will benefit from the fresh simplified format and according to an official at CSBS, these companies move more than $1 trillion per year combined. The enactment of the unified state regulations will help ease operations across many states.

John Ryan, CSBS’s CEO, stated that the new initiative will come with numerous opportunities which will help businesses operating in the country to expand their services. Ryan also quipped that the new model will work safely just like in the old regime.

He explained that the states will not be giving up their authority but will realize efficiencies through sharing of information. Ryan also explained that although states will be sharing information, every state has the right to conduct and independent examination when the regulators deem it necessary.

The new initiative comes after several complaints were filed by crypto and fintech firms as they try to get a solution on having a state-by-state supervisory regime that delayed the licensing process. CSBS embarked on testing various approaches to determine what could work well in efforts to come up with a lasting solution. The current unified approach led to promising results which culminated in the establishment of a pilot initiative last year.

Western Union’s Rosemary Gallagher whose firm participated in the pilot program praised the initiative saying it will lead to a faster licensing process.

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Author: Joseph Kibe

Fidelity Head Launches New Bitcoin Index Fund; $100,000 Minimum Buy-In Price

One of the largest mutual funds in the U.S., Fidelity Investments, is enhancing its efforts in the Bitcoin and crypto space with its chief strategist, Peter Jubber, starting an institutional-grade and high net worth clients-focused BTC index.

According to a filing sent to the Securities Exchange Commission (SEC), Fidelity Investments has launched a new Bitcoin index fund, ‘Wise Origin Bitcoin Index Fund I, LP’ that targets high et worth investors and institutions. A $100,000 minimum buy-in value is required by the index fund following the demand by corporations and accredited investors on Wall Street on crypto investments.

The Wise Origin Bitcoin fund was launched by the head of strategy and planning at Fidelity Investments, Peter Jubber, in conjunction with the mutual fund’s brokerage and distribution divisions. The fund aims to provide a gateway for accredited investors on Wall Street to dip their feet into crypto.

Fidelity is known for its soft stance on crypto investing, owning stakes in crypto companies such as Canadian mining firm, 8Hut, and providing custodial services to institutions. Jubber, also a well-known enthusiast and evangelist of Bitcoin and blockchain, in 2017 said the firm was sketching out a decade long plan on the impacts and opportunities that blockchain technology offers to traditional finance.

Peter will lead the ‘Wise Origin Bitcoin Index Fund’ as the executive director and FD’s Fund’s president. Reports on Forbes also confirm that a Delaware based firm, FD Funds GP will become a general partner to Fidelity’s new BTC fund.

Fidelity’s reports on the cryptocurrency market this June showed that over 36% of big institutional investors were taking up digital assets, and another 80% of them stating they find crypto appealing. Moreover, a recent report by the mutual fund concluded there is an increasing interest in Bitcoin as a store of value with the world’s witnessing unprecedented fiscal and monetary policies.

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Author: Lujan Odera

The US Seizes $2M in its Largest-Ever Move Against Militant Group’s Crypto Fundraising Effort

The US Justice Department has taken down the efforts by the military wing of al Qaeda, Hamas, and Islamic State to raise funds via cryptos through schemes that sold bogus COVID-19 safety equipment to US hospitals.

The agency said they seized about $2 million in the largest ever move by the US against the use of cryptos by militant groups. Authorities confiscated over 300 crypto accounts, four websites, and four Facebook pages.

All 150 cryptocurrency accounts used to launder funds were seized, investigators said. The department said in a statement,

“These actions represent the government’s largest-ever seizure of cryptocurrency in the terrorism context.”

Homeland Security, Federal Bureau of Investigation, Internal Revenue Service, and the U.S. Justice Department were all involved in the investigation to take down the fundraising schemes.

During the probe, the US agents operated an undercover website mirroring a Hamas website for 30 days, said John Demers, head of Justice Department’s national security division.

Using FaceMackCenter.com website, the militant groups peddled the personal protective equipment touted as approved by the US Food and Drug Administration, which in actuality “were not FDA approved,” to first responders, nursing homes, and US hospitals.

Investigators also reported that the payments were collected through US credit cards and PayPal, but the equipment was never delivered.

The Islamic State promoted its scheme via Facebook accounts while AL Qaeda solicited donation for its scheme through the Telegram app.

“Nothing was hidden,” said one U.S. official, “They thought they were protected” by the encryption in the apps they used.

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Author: AnTy

Japan’s Govt. Is Strongly Considering Launching A CBDC In Cooperation With The US and Europe

Japan is increasing its efforts in developing a central bank digital currency (CBDC), reported the largest financial paper in Japan, Nikkei on Wednesday. The post further confirms that the Japanese government plans to add the development of a digital yen into its policy framework this year.

Governments and central banks are looking at digital payments and currencies more seriously in a bid to plan for future financial systems. With China and Russia leading the field of digital payments, Japan is trying to catch up on developing its own.

Lawmakers in the country have long been calling for regulations and policies to be set in developing a digital yen. Moreover, cooperation with the US and Europe is on the cards to build a local electronic payment system.

Earlier this month, the Bank of Japan (BoJ) released a technical study report on launching a digital yen but said they had no plans to launch it soon. The BoJ has had a knack for CBDCs and digital payment systems for a while now since China’s announced it’s digital yuan is nearly complete.

Other top banks in the country are also exploring the digital asset world as seen with the recent joining of three top Japanese banks – Mizuho Financial Group, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group (MUFG) – to a crypto exchange-led study group.

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Author: Lujan Odera

Ethereum Classic’s ‘Phoenix’ Hard Fork In June Will Bring Compatibility With Ethereum

Ethereum Classic set to undergo its third network upgrade in efforts to fully allow inter-blockchain compatibility with its sister-chain, Ethereum. According to the press release by lead developers, ETC Labs, the “Phoenix” upgrade will be activated at block number 10, 500, 839, expected to be mined around the start of next month.

The Ethereum community has had a quick and fast development start in 2020 with both forks – ETC and ETH – making major developmental steps in the first five months. The bigger blockchain, Ethereum completed its Istanbul hard fork earlier in the year and the community dev teams are working on launching the Phase 0 Ethereum 2.0 later in the year.

ETC Labs announces the third hard fork – Phoenix

Ethereum Classic’s third hard fork, Phoenix, follows previous improvements with the successful Atlantis and Agharta hard forks completed in September 2019 and January 2020. The hard fork aims at total inter-blockchain compatibility with Ethereum, “inclusive of the Ethereum Istanbul network protocol upgrades on the ETC network.”

Various Ethereum Classic test nets have successfully passed the Phoenix upgrade including the Mordor TestNet and Kotti TestNet. Now, the Ethereum Classic Mainnet system, led by the Core developers from ETC Labs, will undergo the hard fork on July, 3rd 2020 to successfully implement compatibility between the ETH and ETC blockchains.

Ethereum Classic’s latest upgrade is a testament to the recovery in Ethereum Classic, a blockchain once considered dead after the Ethereum chain forked from it. Terry Culver, CEO of ETC Labs said,

“This upgrade demonstrates the robust development underway on Ethereum Classic, as it is the third hard fork in the last year; and reflects the strong community consensus among ETC stakeholders.”

Upgrade your node clients

The post further urges users to update their systems to the latest node software to ensure a smooth and fast hard fork come June 3rd. The post reads,

“Phoenix hard fork is being implemented in the Core-geth, v1.11.0 or later and Hyperledger Besu, v1.4.1 or later versions.”

The new upgrade is set to provide a gateway for developers to easily collaborate make technical contributions to boost the innovation on both the Ethereum and Ethereum Classic platforms. James Wo, the founder and chairman of ETC Labs, said,

“This supports the founding mission of ETC Labs and reinforces our values of transparency, collaboration and accessibility for all.”

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Author: Lujan Odera

Fed Unleashes Another $2.3 Trillion In Loans But Bitcoin’s Not Reacting Unlike Stocks & Gold

Today, the Federal Reserve has dramatically amped up its efforts to save the economy. The central bank is now adding junk bonds to the list of assets as businesses are anticipated to have trouble after the coronavirus pandemic hit.

The stock market jumped and Treasury yields rose while the dollar dropped after the Fed announced its $2.3 trillion program to cover small and mid-sized businesses. The statement reads,

“The Federal Reserve remains committed to using its full range of tools to support the flow of credit to households and businesses to counter the economic impact of the coronavirus pandemic and promote a swift recovery once the disruptions abate.”

Lender of all resorts

After the announcement, Fed Chairman Jerome Powell said the central bank could add other programs as well while announcing the expansion of its corporate lending programs that will include ETFs of companies that are rated below investment grade.

“Now outside of buying stocks, every asset class is open for the Fed to buy,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

“They’re worried about credit. They consider themselves a lender of last resort. They’re now the lender of all resorts.

Going below investment grade into the high-yield junk area is now a dangerous area they’re headed to, but that’ll be a discussion or another day.”

The US weekly jobless claims today further jumped over 16 million after 6,606,000 were reported from last week. The US job opening also fell in February, suggesting that the labor market is losing momentum.

Lucky to just be in a recession

With 90% of the US economy affected by the several weeks of state shutdowns, the economy is already expected to be in a recession. Chris Rupkey, chief economist at MUFG in New York said,

“The economy would be lucky to just be in a recession right now instead of what is looking more and more like the twilight zone of depression if Washington policymakers aren’t careful.”

The Fed has been aggressive in its approach by slashing interest rates to zero, adding massive amounts of liquidity to the market and committing to purchasing a massive amount of Treasuries.

Congress has already authorized a $2.2 trillion aid package and is now discussing expanding it. “We acted forcefully to get our markets working again,” said Powell, adding their efforts have improved market conditions.

Bitcoin doesn’t care about the stimulus

On the back of stimulus, S&P 500 and Dow each jumped 1.3%, crude oil took a big spike of over 9% after reports that Saudi Arabia and Russia are pacing towards an agreement to cut output.

While gold increased 2.33%, Bitcoin unexpectedly in a reverse move is trading at $7,278, down 0.69%.

Crypto commentators like VanEck’s Gabor Gurbacs, digital asset strategists at VanEck, however, maintain that “Central banks buying assets from self-printed money” which is “a modern form of nationalization,” Bitcoin fixes this.

“Expect not a market meltdown, rather a gold & bitcoin melt-UP,” said Tuur Demeester of Adamant Capital.

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Author: AnTy

Exodus Blockchain Phone Maker HTC To Lay Off More Employees To Keep Its Innovative Edge

Smartphone manufacturer HTC has announced its intention to reduce its employees for a second consecutive year in efforts to realign its strategy and remain innovatively competitive, CoinDesk reports. The company stated that the strategy is to focus on a few marketable products comprising of its EXODUS the company’s series of blockchain-based smartphones.

The Taiwanese electronics giant which boasts of about 3,000 workers did not offer details of the downsizing such as the affected departments and the number of employees to be sacked. However, those who will be sacked will still be paid for two extra months and will enjoy end-of-year bonuses. The latest downsizing is the third for the company in five years. The Taiwanese-based company laid off 2250 workers in 2015 and last year, 1500 were also sacked.

HTC explained that the planned downsizing will help it to have an innovative advantage over its rivals in different products. As per the company, more resources will be allocated to expand VIVE, the virtual reality system and EXODUS, the blockchain-based smartphones sections.

The HTC EXODUS was released in May 2018 and has the capacity to link with decentralized platforms and enable the end users to download as well as operate decentralized apps (Dapps) just like other traditional apps operate in smartphones. The EXODUS smartphone can also be used like a hardware wallet offering the users with a safe and mobile device to store their crypto assets.

Earlier this year, the EXODUS developers added a crypto swap feature that allows easy exchanges among the ERC-20 based tokens.

The EXODUS series was made available for sale end last year and clients could only purchase it using cryptos. The company released its latest series in October this year and has the capacity to run a Bitcoin node. There are plans to enhance the next series to support Binance Chain.

HTC is facing intense competition from other smartphone makers like Samsung which introduced S10 that can run ERC-20 platforms and is compatible with Bitcoin. LG and Google are also contemplating introducing their own blockchain-powered smartphones.

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Author: Joseph Kibe

Lawmakers Considering to Classify Stablecoins as Securities

Stablecoins may became a security, if lawmakers’ efforts are successful. Garcia and Gooden presented their bill to the House Financial Services Committee at the end of November, and spoke at a committee hearing on the topic of big data in the financial industry. The bill, titled “Managed Stablecoins are Securities Act of 2019,” makes it pretty clear by the title the bill’s intentions. According to a report by Cointelegraph, Garcia reportedly stated that Facebook’s stablecoin and other such coins are “clearly securities under existing law.” She further indicated that the legislation clarifies an already-existing statute and that by removing the ambiguity, the regulatory structure of the digital assets will protect consumers and ensure proper government oversight going forward.

Gooden appears to share Garcia’s sentiments. He also sponsored the bill and indicated that Congress has a responsibility to clarify the regulatory framework applicable to stablecoins. According to the Cointelegraph report, Gooden reportedly stated that investors need to know on a daily basis that they can trust issuers behind financial assets, and that the bill will provide them with the security they deserve by applying laws that are used to regulate financial securities to the digital currencies.

Reportedly, David Marcus, who is the head of Facebook’s involvement in the Libra project, reportedly shared with reporters earlier this week that the company strongly believes that the Libra coin is not a security and it has good legal opinion that confirms the view of the outside counsels that the company has consulted.

At this point, the project is in its early stages, and Zuckerberg reportedly stated that “I actually don’t know if Libra is going to work.”

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Author: Hank Klinger