Ripple Partner, SBI Group, Looks to Form Crypto Joint Venture to Boost Revenue

Ripple Partner, SBI Group, Looks to Form Crypto Joint Venture to Boost Revenue

Tokyo-based financial giant SBI Holdings has opened up talks with various international financial institutions to form a crypto joint venture. The firm revealed that it aims to make the crypto business one of its main pillars.

Speaking to Reuters, Yoshitaka Kitao, SBI CEO, revealed that the bank is in talks with numerous financial institutions to set up a crypto venture. Kitao also stated that SBI has already secured two plausible deals but remained coy on the details. The CEO stated that part of the initiative is to pursue mergers and acquisitions.

To enhance its presence in the crypto space, SBI bought TaoTao, a Japanese-based crypto exchange, last year. Kitao explained that the merger and acquisition strategy does not involve taking the minority stakes but partnering with top crypto companies worldwide.

Ripple partner SBI Holdings has witnessed a big jump in profits from its crypto wing for the year ending December 2020. The financial conglomerate’s crypto pretax profit stood at $64 million, which increased 83% compared to 2019. Kitao explained,

“To be number one in the world, our choice is purchasing a leading firm or allying with major global companies. Our merger and acquisition strategy will not be something like taking minority stakes in many companies. Investors once lived in the world where they invested in stocks or bonds; it’s not an either-or situation anymore.”

Kitao also elaborated that institutional interest in crypto assets is rising, which presents a huge opportunity for SBI. He added that institutional investors, mostly hedge funds, are flocking the crypto market, presenting an opportunity for mergers and acquisitions. He also cited that renowned investors like Elon Musk are taking an interest in the crypto industry.

In December last year, SBI purchased cryptocurrency trading outfit B2C2, and the firm is looking to add more.

SBI Holdings is the largest online brokerage firm in Japan and has been offering crypto trading services since 2018.

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Author: Joseph Kibe

Biggest News of the Week: Going Mainstream or A Sacrifice in the Name of Pump?

This week, the big news came in the form of PayPal announcing support for cryptocurrencies.

Not only the payments company would allow its users to buy, sell, and hold crypto, but soon it will also allow the users to shop at its 26 million merchants using crypto.

For now, Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC) are the ones supported directly within the PayPal digital wallet.

“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” said Dan Schulman, president, and CEO of PayPal.

As reflected in the price of Bitcoin surging past $13,000 to a new 2020 high, the market was elated. The other three digital assets had a good time with gains.

First Thing First

Why was this particular set of cryptos selected?

These crypto are actually among the digital assets approved by the New York State Department of Financial Services, and the NYDFS has granted PayPal a first-of-its-kind conditional Bitlicense.

Other coins approved by NYDFS for listing include Binance USD (BUSD), Gemini Dollar (GUSD), Paxos Standard (PAX), and Pax Gold (PAXG). Ethereum Classic (ETC) and Ripple (XRP) joined these cryptos in approval for the custody list.

Now, some feel by adding altcoins, it has just become another ‘exchange listing pump’ phenomenon.

“New bullish catalyst will be which altcoin Paypal lists news. They will be the Coinbase listing of 2020 and 2021,” noted one trader.

As a matter of fact, the company could really be setting the stage for its own dollar-pegged digital currency to “reduce their dependence on the correspondent banking system and other card networks,” as Facebook is doing with Libra, said Meltem Demirors, the chief strategy officer at CoinShares.

Bullish AF

PayPal news was met with excitement; the market celebrated it with gusto, seeing it as a sign that other institutions now would have no choice but to follow suit.

“We knew crypto trading on PayPal was coming, but to also enable crypto use for shopping at its 26 M merchant network is huge. Also, with PayPal and Venmo in the fray, every Fintech firm will now follow,” said a partner at the crypto fund, The Spartan Group.

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“If you liked the recent PayPal and Revolut launches, you’ll love the dozens of neo-banks and fintech teams currently scrambling to figure out what their “crypto strategy” is,” said Arjun Balaji.

In terms of exposure, “PayPal is bullish AF,” as the company has 487 million userbases while the bitcoin network currently has only 187 million total on-chain participants (23.4 million on-chain holders plus 101 million exchange users).

But is it Really?

While the digital asset price remains in bullish momentum, it didn’t take much time for the excitement to die down in the market.

Some even called this rally, “insiders frontrunning the PayPal news,” while others think it just “the most bullshit cope.”

For starters, PayPal has been merely playing catch up, and Bitcoin is the one providing PayPal an alternative to central banks – “archaic inflationary political central bank monopolies.”

The real caveat is that merchants won’t be receiving payments in virtual coins. But the biggest issue has been taken with the fact that PayPal doesn’t allow the cryptocurrencies in its account to be transferred to other accounts, on or off PayPal.

“So, this is all a big PayPal nothing burger, just entries in a central PayPal database, nothing to do with bitcoin,” said analyst PlanB.

Popular hardware wallet Trezor also said: “You shouldn’t use PayPal” because ‘not your keys, not your coin’ as Paypal doesn’t provide the private key of the crypto holdings.

Not only its ex-CEO Bill Harris called Bitcoin “the greatest scam ever,” but PayPal is also known for “stifling competition and preventing users from ever withdrawing their cryptocurrency to the safety of a wallet they control the keys to,” wrote Trezor in a blog post.

Amidst this hard criticism against PayPal for restricting self-custody being “objectively bad” and “necessary for Bitcoin to succeed,” others argue that this was exactly how Square’s Cash app started out, and eventually, it opened up.

“This is a great way for a risk-averse firm to offer its customers exposure to Bitcoin without worrying about “travel rule” compliance,” said Jerry Brito, executive director at crypto think tank Coin Center.

“In all fairness to PayPal, those features may come later,” tweeted Weiss Crypto Ratings.

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Author: AnTy

IRS to Revise Form 1040 to Make it Harder for Traders to Escape Crypto Tax Obligation

The Internal Revenue Service is planning to change the 2020 tax form and make sure all taxpayers report about their cryptocurrency transactions.

The standard 1040 form will be altered by adding the following questions on the front page:

At any time during 2020, did you sell, receive, send, exchange or otherwise acquire any financial interest in any virtual currency? And the taxpayer is required to check the box “Yes” or “No.”

“This placement is unprecedented and will make it easier for the IRS to win cases against taxpayers who check ‘No’ when they should check ‘Yes,’” says Ed Zollars, a CPA with Kaplan Financial Education.

The Wall Street Journal first reported the adjustment on Friday, noting that the question was previously, in 2019, in a spot that not all taxpayers had to fill out. But now it has been moved just below the taxpayer’s identity.

With this, the IRS is stripping any excuse for ignoring the rules. This also means, whoever fails to pay the taxes they owe on crypto transactions can be subject to penalties and, in some cases, even criminal prosecution.

“Primarily based on what we’re seeing, individuals are beginning to get scared,” said Chandan Lodha, the chief working officer of Cointracker, a software program firm promoting crypto tax-prep providers.

The tax agency has been focusing on virtual currency transactions for some time now. Just earlier this month, the IRS issued guidelines clarifying how cryptos are treated for tax purposes when received in exchange for certain services. An individual has to report the digital currency as ordinary income for receiving it through a crowdsourcing platform in exchange for providing a service, as per the memorandum.

In late August, it had also been affirmed that taxpayers must declare their cryptos as income, which were obtained for “microtasks.”

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Author: AnTy

Food Delivery Giant, Just Eat, Starts Accepting Bitcoin Payments

The online food order and delivery service, Just Eat is now accepting Bitcoin as a form of payment in France, in partnership with bitcoin payment provider Bitpay.

The official page of the company’s France website puts bitcoin as an added payment method besides cash, vouchers, PayPal, and credit cards.

Users can choose the bitcoin option to pay for their food when finalizing the order and which then gets redirected to the payment provider, Bitpay, to complete the process. Just Eat doesn’t charge any fees for the payments made in the digital asset.

In case of order cancellations, a user is refunded in Euros into a traditional bank account, and the rate applicable is the one applied at the time of the payment because Bitcoin has already been converted into Euros.

Home delivery services have become the way of the norm during the coronavirus pandemic, after the lockdown and social distancing forced people to go with these options because they couldn’t go out. Users have also switched to online modes of payment that have the use of cash declining.

Just Eat also recorded revenue of €1bn in the first half of 2020, thanks to this phenomenon. Consumers unable to dine out pushed the food delivery groups’ revenue increasing by 44% year-on-year.

The Netherlands-based platform recently also received the regulatory approvals for its acquisition of US food delivery venture Grubhub. With this merger, which was signed in June for $7.3 billion, will mark Just Eat’s expansion into the US market and is also expected to make it the world’s largest online food delivery company outside of China.

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Author: AnTy

Chiliz Onboards Spanish eSports Franchise Team Heretics; Will Launch Their Own Fan Token

Chiliz has added another major esports team to its roster in the form of a famous Spanish esports team called Team Heretic. Chiliz’s Socios.com, a fan token platform, revealed the latest addition to its platform through its official twitter handle on August 18. The Spanish esports team, in association with the fan token platform, would create and distribute fan tokens $TH for €2 apiece during the initial offering period.

Chiliz has an ambitious plan of adding 50+ brands to its socios.com platform, and the addition of Team Heretic comes months after back-to-back Dota 2 champions OG joined the platform back in March. The first sale of the fan token would begin on March 25.

The fan token, $TH, is built on top of Ethereum and allows the fans to participate in official polls on the Socios.com platform. The first event that the $TH holders can vote on would be to decide which Fortnite player would lead the team in a deathmatch.

And later, the team would also pick six $TH holders to join them in the match. Apart from these utilities, the token holders in the future would also get a say in the decision-making process. Pablo Canosa, Team Heretics Commercial Director, commented on their recent association with the Socios.com and said:

“It’s essential to us that our fans are involved as much as possible with the organization. Now—thanks to Socios.com—our fans can have a real voice and the opportunity to vote in important team matters. Not only this, but fans can also look forward to exclusive rewards and experiences too,”

$TH Token Distribution

The beginning phase of the token sale would see a distribution of 125,000 of the $TH Fan Tokens, where 90,000 of the 150,000 would be sold on Socios.com, and the remaining 35,000 would be sold on Chiliz.net where each individual could buy a maximum of 50 $TH tokens. The next sale and price of the token would be determined by the supply-demand and the mining of 5 million tokens.

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Author: James W

Grayscale Ethereum Trust Files with SEC to Halve the ETHE Locking Period Same as GBTC

Grayscale Investments has publicly filed a registration statement on Form 10 with the US Securities and Exchange Commission (SEC) on behalf of its Ethereum product, Grayscale Ethereum trust (ETHE).

If approved, it will offer the product a higher SEC status, the same as Grayscale Bitcoin Trust, to become the second digital currency investment vehicle to attain the status of a reporting company by the SEC.

The prominent change will be reducing the unlocking period of ETHE shares from 12 months to 6 months, the same as GBTC. If effective,

“accredited investors who purchased shares in Grayscale Ethereum Trust’s private placement would have an earlier liquidity opportunity, as the statutory holding period would be reduced from twelve months to six months.”

This is a “milestone” for Grayscale Ethereum Trust as even though Bitcoin is the most popular of its products, “Ethereum has gained significant traction and interest over the years.”

Grayscale notes that there is a “strong demand” for access to Ethereum which has grown to become the “largest” Ethereum investment vehicle.

In Q2 2020, Grayscale’s Ethereum Trust hit a weekly investment of $10.4 million in ETHE, amounting to the record quarterly inflows at $135.2 million. Overall, demand for ETHE accounts for nearly 15% of total inflows into Grayscale products this past quarter.

In other news, Grayscale is interested in getting its products on the Robinhood app. A zero commission trading place, Robinhood is popular among millennials that got even more so in 2020 thanks to the lockdown and government’s monetary stimulus to combat the coronavirus pandemic.

However, not everyone thinks it is a good decision, given that Robinhood already allows trading for Bitcoin and Ethereum along with five others including Bitcoin Cash, Bitcoin SV, Ethereum Classic, Litecoin, and Dogecoin.

Also, while ETH is trading on Robinhood at the same price as any spot exchange, ETHE shares are trading at $100.50 at a premium of over 200%. The premium has come down drastically from about 950% in early June 2020, as per Ycharts.

Also, no matter which option users go with, they are not getting the crypto to themselves as while Grayscale has Coinbase Custody to safe keep the digital assets for their users, Robinhood doesn’t support coin withdrawals or transfers of existing cryptos.

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Author: AnTy

Non-Event But Still Increased Exposure: Bitcoin Defined as ‘Money’ Under DC Federal Court

Bitcoin is a form of “money” under Washington D.C. Money Transmitters Act, a federal court said on Friday.

The ruling was made in a criminal case against Larry Dean Harmon, who operated an underground bitcoin trading platform for running an unlicensed money transmitting business under D.C. law and for laundering money under federal law, reported Bloomberg.

Money “commonly means a medium of exchange, method of payment, or store of value,” said Chief Judge Beryl A. Howell for the U.S. District Court for the District of Columbia. “Bitcoin is these things.”

It may seem like big news, but in actuality, it is a “non event,” which would have a minimal impact, if any, on how bitcoin is treated by the market.

“This just means that if you’re a bitcoin intermediary for someone living in DC, you need a money transmitter license,” clarified Neeraj K. Aggarwal of Coin Center. Also, it would not affect taxes, he said.

Stil, “Increased exposure nonetheless. Dates I like are Aug/7, Aug/28, and Sept/25 (FOMC meeting). Because vol is cheap, range is tight, macro correlations meaningful, and there are two major events in that horizon,” said economist and trader Alex Kruger.

Harmon was indicted by a federal grand jury in 2019, and his service, located on the Darknet, was used to exchange about $311 million between 2014 and 2017.

The court also denied Harmon’s motion to release his 160 Bitcoin seized by the government.

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Author: AnTy

The Good and Bad of the Crypto Going Public

This week, big news came in the form of crypto businesses that are planning to go public either later this year or next year.

Crypto lender BlockFi is looking for a veteran financial professional (CFO) that could help the company “guide and position the finance team for late-stage investment, acquisition, and/or IPO.”

The company is looking for someone with over 15 years of experience as a corporate financial leader in public markets and financial markets. It further mentions in its job posting that the person also needs to have an IPO experience and scaling teams for SOX compliance and IPO ready.

BlockFi had a successful Q2 2020, and in the same quarter, the company hired former American express vice president, Wittney Rachlin to launch the bitcoin credit card that could come in the 4Q20.

In Q1 of this year, the company raised $30 million in a Series B funding led by Peter Thiel’s Valar Ventures along with Morgan Creek Digital, Castle Island Ventures, Arrington XRP Capital.

NYSE-backed Crypto Exchange

The other company planning to go public is crypto exchange Coinbase.

For now, the company is planning to file for an IPO with the SEC but hasn’t registered with the agency yet. It is, however, actively pursuing investment banks and law firms to assist with the process. The listing could come as early as this year or next year.

Interestingly, the NYSE is one of the exchange’s investors along with the likes of Y Combinator, Andreesen Horowitz, Union Square Ventures, and Tim Draper.

Coinbase was valued at about $8 billion during its last round of venture funding and had over 1000 employees and 35 million users in over 100 countries.

The good thing is they are not going the usual IPO route but DPO, which means they bypass institutions and banks and give retail the same access as everyone.

“The real irony is that, if they did a token sale, it would only be available to accredited investors,” commented analyst Ceteris Paribus.

An Opportune Time?

San Francisco-based Coinbase is a popular cryptocurrency exchange that has the highest amount of BTC balance, and no other exchange comes any close to it. It has been close to surpassing 1 million BTC in balance only to slide down after the March sell-off but remains above 900k BTC.

Founded in 2012, Coinbase has contributed a lot to the advancement of the crypto ecosystem. And the news of it going public that is taken as a bullish narrative by the market has come at a time when the market has been rallying amidst the COVID-19 pandemic.

The Fed is pumping in trillions of dollars, which is popping the prices of almost every other asset, from the share of bankrupt companies to the latest IPOs.

Lately, altcoins have also been surging, giving off the vibes of 2017, with many expecting it to be the start of an altcoin season. During the 2017 bull run, Coinbase boasted $1 billion in revenue.

But Coinbase also faces criticism in the bitcoin community for listing the “shitcoins” and not supporting projects that are bitcoin-related such as Lighting Network.

Not to forget, the tons of controversy that continue to surround Coinbase. Recently, it came under fire for selling its customer data to the IRS and DEA, the exact opposite of what bitcoin stands for — censorship-resistant.

So, it would be interesting to see how this IPO affects Coinbase and the market in terms of mainstream adoption and attracting new investors and institutions.

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Author: AnTy

US Congressman Davidson Refers to Bitcoin As ‘Sound Money Required to Defend Freedom’

Bitcoin has found yet another supporter in the government in the form of Rep. Warren Davidson, (R) Ohio’s 8th Congressional District.

The sitting US Congressman took to Twitter on June 22nd to Tweet, “#SoundMoney is required to #DefendFreedom” with an image containing Bitcoin.

“Thank you, congressman, for your advocacy!” commented Meltem Demirors, Chief Strategy Officer of CoinShares, a crypto investment firm.

Davidson’s bitcoin support isn’t new: he is a familiar figure in the crypto world for authoring the Token Taxonomy Act.

Last year, he not only said that Facebook should drop its Libra plans and adopt Bitcoin but also used the term “shitcoin” during the congressional hearing related to facebook’s so-called cryptocurrency.

Earlier this month, Davidson appeared on the “Unchained” podcast with Laura Shin, where he talked about how, due to issues in international payments, he was introduced to DigiCash and then came to know about the “pretty elegant solution” bitcoin.

Although he doesn’t own any BTC himself, he views Bitcoin “kind of like digital gold versus a true currency. I think it’s a great store of value.”

But unlike Davidson, President Trump is not a Bitcoin supporter as we got to know when he explicitly tweeted about a year back that he isn’t a “fan of Bitcoin and other Cryptocurrencies.”

At that time, he said they are not money; instead, cryptos are based on speculation and are highly volatile, which are used to facilitate unlawful behavior.

Then we came to know last week that Trump was wary of the world’s leading digital currency as early as in May 2018. It was revealed in the book “The Room Where It Happened” by former national security advisor John Bolton that Trump told Treasury Secretary Steven Mnuchin to “go after Bitcoin” in a meeting about China.

Crypto also featured in White House’s budget proposal for the fiscal year 2021. Where moving the secret Service from the Department of Homeland Security to the Treasury Department was proposed, which would “create new efficiencies” in preparing the US to face “the threats of tomorrow,” such as the use of cryptos to finance terrorism.

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Author: AnTy

Vietnam Ministry of Finance Forms Research Group To Develop Digital Currency Policies

Cryptocurrencies are actively being considered an alternate form of financial instrument, and the blockchain technology powering it has already seen massive adoption all around the globe.

Vietnam is the latest country looking to study and formulate laws around digital currencies. The Vietnamese Finance Ministry has agreed to establish a research group who would be responsible for reviewing, analyzing and developing various regulatory policies around crypto-assets.

The research group was announced on 11th May by the ministry, which would comprise of 9 members. The members of the group would consist of:

  • General Department of Taxation, the country’s securities regulator
  • National Institute for Finance
  • General Department of Vietnam Customs
  • Department of Banking and Financial Institutions of the State Bank of Vietnam

The research group would be led by the vice-chairman of the State Securities Commission, Pham Hong Son. The regulatory body would be responsible for keeping track of new updates and regulatory challenges associated with the ever-evolving crypto sector and help Vietnam respond to regulatory challenges with more preparedness to tackle them.

Is Vietnam Doubling Back on Its Decision?

Vietnamese Prime Minister gave the nod for the formulation of the regulatory framework back in 2017 which made many believe that the crypto assets will be a legalized for use as a form of an exchange or a legal tender.

However, in April 2018, the government deemed bitcoin as illegal tender, meaning that even though people and businesses can invest in bitcoin, it cannot be used as a form of exchange to buy or sell goods.

Just days after deeming Bitcoin as illegal tender, the government issued an order restricting credit companies from offering any form of service to crypto providers in order to contain any form of money laundering woes.

The service ban was similar to Indian Central Bank prohibiting banks restricting commercial and government banks to offer any service to digital asset service providers. Since then, the government has not made any regulatory changes towards the digital asset service providers, which make the current formation of the research team even more significant.

Many believe the newly formed team could be a game-changer for the digital asset ecosystem.

Since the government has observed that those nations which have worked around crypto-assets and regulated it over time with changes as per the demand have fared better than those who have either outright banned it or refused to formulate laws around it.

Despite the regulatory uncertainty, local business has tried to establish crypto exchanges in the country. However, only peer-to-peer platforms have managed to gain traction from the community.

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Author: Silvia A