Turkey Tightens Crypto Regulations over Transaction Volumes

  • Turkey has started to toughen their grip on the cryptocurrency sector.
  • Turkey’s financial watchdog, the Financial Crimes Investigation Board or MASAK, has introduced a new policy that stipulates that all Turkish crypto exchanges must now inform them of any crypto transactions over 10,000 Turkish liras ($1,200).
  • The new policy was announced by the Turkish Minister of Treasury and Finance Lütfi Elvan.

Turkey Lays Down New Regulations For Crypto Exchanges

Elvan shared the new policy and other updates on the government’s crypto regulation drafts on a CNN Turk live broadcast.

According to the Finance Minister, the government plans to give MASAK the authority to audit and oversee crypto exchanges and regulate the crypto sector, as a whole.

Elvan said MASAK had prepared a guideline for crypto exchanges that includes the rules and penalties for reporting transactions. Elvan said,

“Crypto trading platforms are now obliged to share the information of their active users with MASAK. They are liable for any suspicious activities on their platforms. They are also responsible for notifying MASAK about any transactions worth over 10,000 Turkish liras in 10 days after the trading.”

This new regulation comes after Turkey’s central bank banned cryptocurrency as a form of payment. The bank had said crypto assets involved significant risks due to their volatile nature and may lead to irreversible losses to investors. It also added that they were used for illegal activities.

Turkey’s Recent Moves Surrounding Cryptocurrency

The country, which was once referred to as a crypto-friendly country because of its subtle approach towards digital assets, is rapidly cracking down on the cryptocurrency sector.

In March, the Finance minister posted a statement on Twitter where he expressed concerns about cryptocurrencies. He also announced that the ministry was working with the central bank and two financial regulatory agencies to monitor cryptocurrency.

Turkish investors turned to crypto in a bid to protect their savings from the weak Lira. Many believe the government is looking into regulating the market due to concerns around fraudulent activity.

One prime example of this is the case involving crypto exchange Thodex, which was accused of defrauding investors. About 391,000 investors on the platform were said to have been prevented from accessing their assets which were estimated to be $2 billion in investments. The Turkish police detained 62 people in connection with the case following complaints from users.

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Author: Jimmy Aki

ING Report: How Blockchain & DeFi Will Change The Financial Landscape

ING Report: How Blockchain & DeFi Will Change The Financial Landscape

Multinational banking services provider ING bank has lent its voice in the ongoing debate surrounding decentralized (DeFi) and centralized finance (CeFi).

In a detailed whitepaper published on its website, the Amsterdam-based financial institution expounded on the pros and cons surrounding DeFi and how centralized finance could help institute a new economic system.

Collaboration Between DeFi and CeFi Beneficial For Global Finance

The paper titled “Lessons Learned from Decentralized Finance (DeFi)” opens by admitting the radical change decentralized finance (DeFi) has brought into the financial space.

Noting that DeFi aims to replace intermediaries with automated digital smart contracts, ING argues that negative opinions surrounding the emerging technology paint it as a foe rather than an ally.

In the 22-paged document, the European financial powerhouse noted that CeFi could help address DeFi’s area of weakness, pointing out know-your-customer (KYC) protocol.

It concluded by saying that if both entities collaborate, this could see the best of both worlds coming together to birth a new financial order.

Speaking on the document, ING’s blockchain lead Herve Francois argues that DeFi could substantially be more disruptive for the finance sector than Bitcoin has been.

Decentralized finance (DeFi) follows on the back of Bitcoin’s decentralization ethos of 2008. This nascent industry has grown exponentially in the last four years, with the largest DeFi facilitator Ethereum, boasting over $76 billion worth of assets under management (AUM) single-handedly.

The booming crypto market has seen other decentralized protocols springing up, with many providing legacy-backed services for a fraction of the cost.

Legacy Institutions Could Help DeFi

Pointing to some of the key takeaways from its study of the DeFi ecosystem, ING noted that counterparty risk is replaced with technical risk in the purely digital form of financial services.

The paper highlighted eight key features of the DeFi ecosystem that makes it rise above the current financial system naming composability, flexibility, decentralization, accessibility, innovation, and three other points.

The borderlessness that comes naturally to DeFi is a major plus, given that conventional financial institutions spend so much time and resources complying with local laws of countries they branch out to.

However, ignoring anti-money laundering (AML) and KYC requirements were the weak feet of DeFi, and this is an important area centralized finance could come in.

Using DeFi lender Aave as a case study, ING said that this disruptive technology had more accuracy, transparency, and speed than its centralized counterparts. However, it agreed that the novelty of the protocol came with inherent technical risks.

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Author: Jimmy Aki

Fidelity Launches Digital Asset Analytics Tool For Institutional Investors

Financial services firm Fidelity investment has launched a digital assets analytics platform for institutional investors.

Fidelity’s Sherlock To Guide Institutional Investors

Fidelity named the platform Sherlock, which is a digital assets analysis tool that will provide fundamental and technical analysis for fund managers and investors.

According to the firm, Sherlock will collate valuable pieces of information on the blockchain, market, social sentiment analysis, as well as industry news into a single portal.

The platform will also research crypto-assets relying on quality institutional data providers coupled with the provision of unique analytics to guide investors.

Fidelity’s Sherlock is expected to provide much-needed competition against existing solutions produced by companies like Messari.

In 2018, Messari launched a data solution service and had gained valuable recognition worldwide by integrating with Kaiko’s Rest API.

Other giant forces to be reckoned with in the provision of data and analytics are Dune Analytics, Glassnode, Skew, Coin Metrics, and Santiment.

Speaking on the new development, Kevin Vora, Vice president, Product Management, Fidelity Center for Applied Technology (FCAT), said Sherlock would deliver comprehensive data and deep analytics as clients will no longer face numerous irrelevant resources.

Fidelity Dominating the Crypto Space

Besides developing Sherlock to help institutional investors, Fidelity investment has been making significant contributions to the crypto space.

Earlier, Fidelity Charitable, the charitable arm of the mutual fund giant, reportedly raised $28 million in cryptocurrency donations.

The acceptance of cryptocurrencies as part of donations for the non-profit was a welcome development in the crypto space.

More importantly, the investment firm plans to launch its bitcoin exchange-traded fund (ETF) for digital assets and virtual currency, per Form S-1 filed with the Securities and Exchange Commission.

While SEC is yet to approve any firm to date, Fidelity might be feeling lucky due to its track record in the traditional finance space.

Given the prevalence of existing data and analytics solutions for institutional investors, observers will be eager to see if the newly introduced Sherlock solution by Fidelity investment will also turn things around.

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Author: Jimmy Aki

Gemini Survey Reveals Adults Are Becoming More Interested in Cryptocurrencies

With cryptocurrencies gaining more and more media attention, investors in traditional financial markets are gradually looking into cryptocurrencies. Beyond institutions, more women are starting to get involved with Bitcoin.

14% of US Populace Own Crypto

According to a Gemini State of Crypto Report for 2021 on 3000 US adults, crypto is beginning to broaden its investor base.

The document estimates that 14% of the US population, roughly 21.1 million adults, own crypto assets. It also showed that 74% of these crypto holders are male, while 77% are under the age of 45.

Women are not left out, as they make up 26% of crypto investors.

The document also pointed out that the average age of a cryptocurrency owner is 38 years old, making approximately $111,000 per annum.

Gemini spoke about another group of investors called the “crypto-curious.”

Gemini defines this group as investors who are yet to take the crypto plunge but planning to do so in 2021. This section comprises over 63% of US adults.

About 13% of this group plan to diversify their investment portfolio into cryptocurrencies in the next 12 months.

Gemini notes that this could see 19.3 million new crypto holders coming into the space, which would double the crypto population in the North American nation.

The survey also shows an interesting trend. Women are more likely to buy crypto soon as 53% of female respondents say they plan to own a digital asset by the end of the year. 4% of the current female crypto owners are 55 years or older, and the average age is 44 years.

Regarding demographics, 52% of current investors reside in urban or suburban areas, while 26% are domiciled in small towns and rural areas.

Bitcoin Still Most Dominant Digital Asset

Even though cryptocurrencies are gaining mainstream acceptance and more investors are coming into the crypto space, the knowledge of the various virtual currencies on offer is still lacking.

95% of respondents still associate crypto with Bitcoin and claim partial knowledge of other digital assets.

Even though Ethereum is the second most valuable cryptocurrency globally, just 38% of respondents said they have heard about it.

Bitcoin forks, Bitcoin Cash and Litecoin, followed after that with 24% and 16% of respondents claiming knowledge about these lesser traded digital coins, respectively.

Foremost stablecoin USDt could only gather 11%, while San-Francisco blockchain firm Ripple Labs’ XRP had 6%. Oracle provider Chainlink had 8% of respondents saying they must have come across it once.

The least known projects were Cardano’s ADA and Polkadot’s DOT which secured a meager 2% given their influence in the crypto space.

This showed that most crypto investors and enthusiasts are still experiencing knowledge gaps regarding the various crypto assets in the blockchain ecosystem. According to Gemini, this can be addressed with accessible educational crypto materials to turn the crypto-curious into active crypto investors.

The survey also noted that most crypto investors view these digital assets as a long-term investment strategy.

A whopping 69% of investors buy and hold for long-term appreciation compared to 36% who trade short-term for profits. 27% of the respondents use digital assets to make purchases online.

Another survey by analytics firm Piplsay points to a growing faith in the safety of trading cryptocurrencies, with 50% of respondents stating their willingness to invest in the space. A further 57% demanded that consumer companies like Amazon and Apple start accepting cryptocurrencies as a form of payment.

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Author: Jimmy Aki

Band Protocol Integrated on Google Cloud to Enhance Financial Time Series Analysis

Band Protocol Integrated on Google Cloud to Enhance Financial Time Series Analysis

Chainlink rival Band Protocol is joining the Google Cloud public data network to enable accurate financial time series data analysis.

Decentralized oracle service, Band Protocol, is integrating to Google Cloud in a bid to “enable immediate and accurate analysis of financial time series data,” a blog post by Kevin Lu, head of business development at Band reads.

Band Protocol oracles, specifically the Band Standard Dataset, is now live on Google BigQuery, a fully-managed, platform-as-a-service cloud data warehouse. The platform is built to enables scalable analysis over petabytes of data through its machine learning mechanism.

“Google Cloud Public Data has a wealth of data available for unique analysis.”

“This is especially interesting for real-time financial time series data using novel approaches to Machine Learning.”

Band’s data sets will enhance analysis on financial time series data, which requires a ton of real-time data, by connecting decentralized, trustable, and secure oracles to BigQuery.

Lu believes the partnership with Google Cloud will expand the possibilities that Band Protocol offers, adding they are looking for more partners.

“With Band Protocol oracles fully integrated into Google Cloud Public Data, this is the first of many use-cases we are exploring with partners to bridge traditional enterprises and blockchain applications.”

“Our focus is to continuously and rapidly expand the support of data available on BandChain — pushing the use-cases far beyond just Web 3 alongside many enterprises.”

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Author: Lujan Odera

Citibank Covers DeFi, says Open Financial Platform Enables ‘Greater Innovation and Competition’

Citibank Covers DeFi, says Open Financial Platform Enables ‘Greater Innovation and Competition’

New York City-based Citigroup is the latest bank to educate its fund managers on the concept of the booming decentralized finance (DeFi) sector.

This week, much like other banking giants, Citi reported better-than-expected earnings for the first quarter, driven by lower loan volumes and improvements in the macroeconomic outlook.

But for the cryptocurrency industry, what has been more interesting was the fact that their latest report, “Future of Money” on Crypto, CBDCs, and 21st Century Cash, covers the benefit of DeFi.

Defined as the “open financial platform on top of which all projects reside,” the openness of the ecosystem enables greater innovation and competition and allows uninterrupted interoperability, it said.

Name checking Maker (MKR), Compound (COMP), Uniswap (UNI), and UMA (UMA), the report further notes that one can seamlessly move capital between these platforms in minutes and minimal fees.

Programmability, transparency, permission-less, non-custodial, and lack of intermediaries are the benefits mentioned by the bank.

The report particualry covers MakerDAO in detail, calling it “The Decentral Bank,” a complication system that enables collateralized loans paid out in stablecoin. DAI is the network’s own crypto-based stablecoin which the bank says is akin to “so-called commercial bank money, which is backed by deposits or cash.”

It is defined as the heart of the DeFi ecosystem, which is one of the oldest and “most sophisticated projects on Ethereum.” ETH -3.62% Ethereum / USD ETHUSD $ 2,440.76
Volume 36.12 b Change -$88.36 Open $2,440.76 Circulating 115.5 m Market Cap 281.9 b
4 h Miami-Dade County Task Force Is Looking at Ways for Residence to Pay Taxes Using Crypto 4 h UK Hedge Fund Brevan Howard Plans to Invest 1.6% of $5.6B Capital in Cryptocurrencies 8 h Crypto Lender Celsius Suffers Data Breach Through Third-Party Mailing List

The report then talks about how the lending protocol, which has over $9 billion in total value locked (TVL), can be thought of as a digital pawn shop or a perpetual repo market for digital assets.

The DeFi sector is growing at a fast pace, which first exploded into usage last summer when yield farming allowed people to earn as high as four-digit APY. From a mere $730 million in total value locked a year back, today, this sector has surpassed $100 billion in TVL.

The top 100 DeFi coins’ market cap has also reached about $130 billion, which was under $2 billion at the beginning of last year, as per CoinGecko.

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Author: AnTy

JPMorgan Piloting Blockchain-based Payment Solution in Asia

American investment bank and financial services provider JPMorgan, on Monday, April 12, launched ‘Confirm,’ a blockchain solution to reduce the number of rejected or returned payments.

‘Confirm’ Validates Transactions In ‘Near Real-time’

Following the launch, the US bank is now test-running the blockchain solution with 12 banks in Taiwan. The financial institutions include CTBC Bank, Taiwan Cooperative Bank, and First Commercial Bank.

As part of the test run, the banks were required to transfer money to Indonesia, using JPMorgan’s clearing solution – ‘PayDirect.’

Disclosing this development to the investing public, the banks which were used as case studies, according to JPMorgan, were able to request and receive confirmation of beneficiaries’ account information in ‘near-real-time.’

According to the US banking giant, there are numerous risks attached to transaction failures in the blockchain market, some of which are -a heightened risk of fraud, increment in cost from payment returns, and poor customer experience because of delays in processing payments.

Why this solution is timely for digital asset holders

In the blockchain industry, transactions are mostly seamless as cryptocurrency transactions are often done without problems. But there are instances where unsuccessful and failed transactions are recorded. In situations where failed transactions occur, one of the most common reasons is ‘fees.’

It is pertinent to note that the fees asset holders input in their transactions is collected by miners, who are shouldered with the responsibility of confirming transactions on the network.

These fees are used to determine the priority of each transaction as far as blockchain is concerned. Meaning that the higher the fee, the higher the level of importance placed on a transaction, and vice-versa. So, if the price an asset holder includes is too low, there are chances that miners will not consider such a transaction worthwhile to validate. And the most common consequence of this is rejection.

While no data is accessible at press time to confirm the rate at which traders experience failure in their transactions, there are indications most of the transactions that suffered rejection were because of the injected fee. More so, when a low price is used during the period that a network is experiencing congestion, there is a likelihood that it will not be successful. Due to how the blockchain is designed, miners are the only ones that determine every transaction’s status.

However, with ‘Confirm,’ JPMorgan brings a solution aiming to reduce failed transactions and increase successful ones.

Through a secure peer-to-peer network in the blockchain industry, trading entities can request an account’s validation before payment initiation. They can also respond to requests for account owner and status or participate as both a requestor and a responder.

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Author: Jimmy Aki

62% of Clients Willing to Switch Financial Advisors to Know More About Bitcoin: NYDIG Survey

62% of Clients Willing to Switch Financial Advisors to Know More About Bitcoin: NYDIG Survey

“Unprecedented client demand for advisors to offer access to Bitcoin,” says bitcoin trading and custody service provider subsidiary of Stone Ridge Holdings Group.

NYDIG, the subsidiary of Stone Ridge Holdings Group, revealed in its latest financial advisory survey that there is a high demand for advisors to offer Bitcoin access.

22% of the financial advisors’ clients own Bitcoin, while 2.5% hold BTC with their advisors.

The bitcoin trading and custody services provider survey revealed that 82% of clients expect their advisors to be knowledgeable sources about Bitcoin as an asset class. Still, only 21% of clients have actually brought it up.

“Understanding this gap and closing it is critical,” states the report.

Interestingly, 62% of clients said they would switch financial advisors to advice about the leading cryptocurrency. Client attitudes are shifting as an estimated more than 1 in 5 financial advisory clients already own Bitcoin.

“The increasingly widespread adoption of Bitcoin has perhaps caught many advisors by surprise, and few manage Bitcoin for their clients today.”

The poll was conducted on Jan. 26-27, 2021, among a national sample of 2,082 US consumers. And the respondents want their advisors involved, with 65% saying they wish they knew more about the trillion-dollar asset.

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Author: AnTy

UK Tax Authority HMRC Updates Guidance on Crypto Taxation

Meanwhile, Britain’s financial services minister said the focus is on regulating stablecoins, and intervention in the wider crypto markets is “less immediately pressing.”

HM Revenue and Customs (HMRC), UK tax authority, published fresh guidance on the taxations of crypto assets, an update to late 2019 issued guidance that aims to provide clarity on the taxation of cryptocurrency assets.

the update involves the trading of tokens, conversion to fiat currency, mining transactions, and staking for both individuals and corporations.

According to the guidance, If a company or business is carrying out activities that involve tokens, they are liable to pay tax on them whether buying and selling them, exchanging them for other assets, mining, or providing goods or services in return for tokens.

When it comes to mining transactions, it will be a taxable trade based on a range of factors such as degree of activity, organization, risk, and commerciality.

“Staking” has been addressed as a type of mining “which weights the entitlement to newly forged tokens.” Yet again, the taxability of them depends on several factors like mining.

The guidance says, if the mining activity of the business does not amount to a trade, the pound sterling value of any crypto assets awarded for successful mining will be taxable as miscellaneous income subtracting the expenses.

Profits will be “calculated according to the relevant tax rules” if the activity does amount to a trade.

When it comes to individuals, HMRC says that “only in exceptional circumstances” would it expect “individuals to buy and sell exchange tokens with such frequency, level of organization and sophistication that the activity amounts to a financial trade in itself.”

If the miner, either business or individual, keeps the awarded assets, they may have to pay Capital Gains Tax when they dispose of them later.

Not the Pressing Concern

On Tuesday, Britain’s financial services minister said they would first focus on regulating stablecoins than the broader crypto market.

“We need to manage risks to competition,” John Glen told a City & Financial conference.

“There is the potential for some firms to swiftly achieve dominance and crowd out other players, due to their ability to scale and plug into existing online services.”

According to him, the case for intervention in the wider crypto markets is “less immediately pressing” while saying it is a “once-in-a-generation opportunity” to make “vast strides in the efficiency of financial services.”

Separately, Britain’s financial watchdog said imposing existing electronic money rules that authorize cashless payments on stablecoins won’t be suitable.

“The e-money regime isn’t a perfect match for crypto,” said Alex Roy, head of consumer distribution policy at the Financial Conduct Authority, at the same conference.

In other news, this week, the Iowa House of Representatives also passed a bill to legally recognize smart contracts. Democratic Representative Steve Hansen suggested the bill’s implementation would lead to broader regulation of crypto.

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Author: AnTy

South African Crypto Firms Threaten To Leave Amid Regulatory Uncertainty

The arrival of crypto-assets in Africa was seen as the end of financial exclusion in a continent that has remained in the dark ages for so long. With cryptocurrencies making it possible for retail investors to dictate how they spend their money and what they get in return, the continent quickly embraced the industry.

However, the governments’ stringent regulatory oversights have seen the sector beginning to suffer from private crypto ownership outrightly banned in some African nations.

South African Crypto Firms Seeking Greener Pastures

South African crypto firms threaten to leave the country due to the toxic regulatory environment. The country, which has seen a lot of bad actors taking advantage of ignorant investors in the space, is slowly stunting the growth of crypto, according to the crypto-facing companies.

In a chat with foremost financial media house Bloomberg, Sean Sanders, CEO of South Africa’s crypto trading platform Revix, said he is seriously considering leaving the African nation for the United Kingdom. He also said he would be setting up a second office in Germany, another crypto-friendly European nation.

Sanders said the reason why he is hard-pressed to leave is that the South African government has been slow in providing regulatory goalposts to guide industry practitioners in the running of the business within the country. According to him, an unregulated crypto environment will only see customers hesitate to put their money into cryptocurrencies.

Commercial banks have also been earmarked as a potential challenge for the crypto hotbed. While some are in support of offering crypto services for customers, some of them have barred crypto investors from making use of their platform. According to Marius Reitz, the African general manager of multinational crypto exchange Luno, the continued impasse may hurt the growth and adoption of digital assets in the continent.

Even though Asian nations like Singapore have been redrafting legislation to lure crypto-facing businesses into the country, there are still many financial regulators that are dining with the nascent technology with a long spoon. The United States has been one of the most prominent crypto critics, even as retail investors are surging daily into the burgeoning space.

FSCA Wants To Protect Consumers

With criminals seizing on the apparent ignorance most investors have about the sector, there has been a rise in crypto-related crimes. Ponzi schemes and scams have grown in the past year, with $2.1 billion reportedly lost in 2019 alone.

The South African regulatory body Financial Sector Conduct Authority (FSCA) says it has not been idle. According to Brandon Topham, head of enforcement at FSCA, the government wants to provide better protection for retail crypto owners rather than the businesses that offer crypto services. Topham assured that regulatory proposals are currently in the works and will be available soon.

South Africa is still recovering from the Mirror Trading International scam, which saw crooks pocket a whopping 23,000 BTC (worth $1.2 billion in today’s market). The company was placed under provisional liquidation after its CEO fled to Brazil to avoid answering for his crimes.

Besides South Africa, Nigeria, the most populous nation in Africa, finds itself in regulatory limbo. Nigeria’s apex bank issued a circular banning banks in the country from providing services to crypto businesses. Even though the government has announced that it is working towards regulating the sector, crypto use is still not allowed in the economy.

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Author: Jimmy Aki