Dubai Financial Services Authority Releases Regulatory Framework for “Investment Tokens”

Dubai Financial Services Authority Releases Regulatory Framework for “Investment Tokens”

The Dubai Financial Services Authority (DFSA) has announced its regulatory framework for “Investment Tokens,” which can be securities or derivatives.

The agency defines investment tokens as cryptographically secured tokens that represent rights and obligations similar to those conferred by a security or derivative or has a similar purpose and are issued, transferred, and stored using Distributed Ledger Technology (DLT).

These tokens are different from exchange tokens or cryptos, for which the DFSA is planning to roll out a framework for including utility tokens and asset-backed tokens or stablecoins. The agency will issue a consultation paper on this in the fourth quarter.

The framework for investment tokens, not detailed in the announcement is based on the consultation paper issued in March, applies to firms that want to issue or trade investment tokens in the International Financial Centre of Dubai and accredited firms that wish to offer financial services related to these tokens.

“Creating an ecosystem for innovative firms to thrive in the UAE is a key priority for both the UAE and Dubai Governments, and the DFSA,” said Peter Smith, Managing Director, Head of Strategy, Policy, and Risk at the DFSA.

This consultation has enabled the agency to introduce a regime relevant to the market, he said, adding, they are looking forward to receiving applications from interested firms and “contributing to the ongoing growth of future-focused financial services in the DIFC.”

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Author: AnTy

Australia to Push for A Cryptocurrency Framework to Promote Innovation and Investment

Australia to Push for A Cryptocurrency Framework to Promote Innovation and Investment

The Parliamentary committee chairman reviewing digital assets’ use says they don’t want to “put a new coat on an old hook,” and he is hopeful that crypto will “break the back” of de-banking.

Australia’s crypto industry needs a robust policy and regulatory framework to compete with other global financial hubs, said the Select Committee on Australia as a Technology and Financial Centre in a draft report on Wednesday.

The parliamentary committee that’s reviewing the use of digital assets said that such a framework is needed to promote investment, provide a structure for innovation to thrive while protecting consumers and facilitating market competition.

The report recommends establishing a market licensing regime for crypto exchanges that would cover capital adequacy and responsible person tests, a clear framework for custody of digital assets with minimum standards, new company rules covering new projects in DeFi, and conducting a token mapping exercise to determine the best way to characterize the different types of tokens in Australia.

As for DAOs, the report notes that they do not fall within any of Australia’s existing company structures, with legal liability for them still “unclear.” It pointed to standards in Wyoming, US, as a potential template.

These recommendations are “a big push to detail a cryptocurrency framework for Australia,” said Andrew Bragg, a senator from the conservative Liberal Party and chair of the committee, in an interview. This, according to him, would allow them to compete with the U.K. and Singapore.

“What we don’t want to do is put a new coat on an old hook.”

“There’s a strong anti-competitive element in Australia where the incumbents don’t like innovation and their solution is to push new ideas into old regulatory frameworks that were designed for something else.”

Bragg also hopes that crypto will “break the back” of de-banking — a practice in which lenders close the account of clients they consider high risk. De-banking “is killing too many small Australian businesses — and we simply can’t afford that to happen,” he said.

A study last month found that over a third of all Australians under 50 either own or have owned crypto assets.

The former regulator further said that he wants these recommendations to be adopted as policy in the coming months to be legislated after the federal election early next year.

“We want to be a world-leading jurisdiction for cryptocurrency,” he told the Financial Times.

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Author: AnTy

DeFi Zapper Raises $15M from Framework, Which Raised $100M From Big US Institutional Investors

DeFi Dashboard Zapper Raises $15M from Framework, Which Itself Raised $100M From Big US Institutional Investors

Mark Cuban and actor Ashton Kutcher’s Sound Ventures also invested in Zapper to “usher in a new era of user-friendly crypto experiences.”

DeFi dashboard, Zapper has raised $15 million in a Series A round led by Framework Ventures along with entrepreneur Mark Cuban and actor Ashton Kutcher’s Sound Ventures.

Zapper currently supports 54 DeFi protocols and boasts 150,000 monthly active users, with the total transaction volume recently surpassing $3 billion.

The popular DeFi asset management tool allows users to view their balance, make a swap, stake, and yield from across multiple chains, and all of it in one place.

With this fresh capital, the startup aims to reduce the friction and provide a one-stop solution for the fragmented cryptocurrency sector.

“Zapper is one of the fastest-growing applications of any kind in crypto. Excited to join the board to help usher in a new era of user-friendly crypto experiences,” said Vance Spencer, co-founder of Framework Ventures.

In November, the project extended its seed round to gain backing from Delphi Digital and Coinbase. Framework Ventures and Libertus Capital led the original $1.5 million seed round in August 2020.

Other investors included Michael Dunworth, The LAO, CoinFund, Synthetix founder Kain WarwickNascent, ParaFi Capital, Scalar Capital, Distributed Global, Maven 11, DeFiance Capital, Spartan Group, Long Hash, Sino Global, Cooley LLP, and Aave co-founder and CEO Stani Kulechov.

An inclusive financial system

Framework Venture, the largest venture capital fund investing in decentralized finance that invested in Zapper, itself raised $100 million for its second fund round from big US institutional investors.

US venture capital and growth equity investment firm Accolade Partners and Hall Capital, one of the largest US registered investment advisors with about $42 billion in AUM, were the anchor investors. Some of the unnamed major US university endowments were also investors in the fund.

The Fund also raised $15 million in July 2019 for its first fund from one anchor investor. The freshly raised capital will help Framework support DeFi applications.

“Crypto is a technological wave that will touch almost every aspect of people’s lives in the coming decades. Blessed to be chasing the dream of a more inclusive and innovative financial system with my best friend, an incredible team, and incredible backers.”

Vance Spencer Co-founder Framework Ventures

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Author: AnTy

DOJ’s First-of-its Kind Crypto Framework Targets Decentralized, P2P Platforms & Privacy

A 71-page long “Cryptocurrency Enforcement Framework” report has been published by the Attorney General’s Cyber Digital Task Force. It details the emergence of cryptocurrencies and the presenting opportunities for terrorists, rogue nations, and other criminals.

The report is described as “a cohesive, first-of-its-kind framework for those seeking to understand federal enforcement priorities in this growing space,” said Attorney General William Barr.

According to him, the US has been “enormously successful “ in blocking the criminals from using traditional currencies, and now wants to

“adapt our strategy and tools to 21st century financing, including to combat the use of cryptocurrencies to evade enforcement and harm our national security.”

The Attorney General recognizes the “tremendous promise” of cryptos and blockchain technology for the future, supporting the advancement of legitimate crypto uses and tech, but says it is “critical” that they follow the law as well.

Aiming for Privacy

The Framework divides the illicit use of crypto into three categories — financial transactions related to commissions of crimes, money laundering and covering legitimate activity from tax, and crimes like theft that directly implicates the crypto marketplace itself.

For this, DOJ, SEC, and CFTC are working together to explore legal and regulatory tools to address the threats and enforce federal law in the crypto space.

The report also points out the challenges the government is facing has been in respect to business models like kiosks, certain crypto exchanges, and casinos; and activities like “mixing” and “tumbling,” and “chain hopping,” which they say may facilitate criminal activity.

“Decentralized platforms, peer-to-peer exchangers, and anonymity-enhanced cryptocurrencies that use non-public or private blockchains all can further obscure financial transactions from legitimate scrutiny.”

According to the regulators, Web 3.0 in itself has a vision of — “humans will reclaim the internet, their data, and their anonymity from large outside forces” — can pose dangerous threats to public safety.

The agency is also fully aware of decentralized finance, which sees “exponential growth,” following the ICO boom.

The report came just days after deferral prosecutors went after crypto derivatives exchange BitMEX and its founders for preventing money laundering and arrested John McAfee over tax evasion charges and allegedly earning millions via crypto promotion.

The Department of Justice said in the report that it would “continue its aggressive investigation and prosecution of a wide range of malicious actors.” It further encouraged international cooperation in the investigations and making arrests.

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Author: AnTy

Parity Releases Substrate 2.0 to Build Custom, Scalable Blockchains Interoperable with Polkadot

Substrate has achieved a major milestone; the blockchain framework has released version 2.0, which is also compatible with Polkadot, which, along with Kusama, is already running the latest version.

Polkadot (DOT), built on Substrate, is currently the 6th largest cryptocurrency with a market cap of $3.74 billion, currently trading at $4.40.

Polkadot blockchain developer, Parity Technologies announced the launch of the second version of its blockchain building kit on Wednesday. This blockchain framework basically allows you to create and customize the blockchain “precisely” for your application or business. The new release provides the developers with additional tools to do just that.

With an aim to develop a Web 3.0, Substrate acts as a tooling kit for developers making their own blockchains that are interoperable with Ethereum’s co-founder Gavin Woods’ Polkadot.

The new release comes with 70 composable “modules” called “pallets” to play with various design ideas. These pallets, which can be developed using FRAME, help add basic and extended functionality.

“Substrate 2.0 comes with many new pallets that will help you quickly and easily build and deploy your blockchain runtime with the right properties for you and your network.”

Version 2.0 also includes modules for getting off-chain data on the blockchain. This new feature called off-chain workers communicates with the main chain to keep all network participants up to date and remove the massive data sets and intensive processes. Parity states,

“Substrate 2.0 comes with a suite of pallets to make data integration much more efficient for blockchains that depend on existing and/or real-world data.”

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Author: AnTy

Coin Metrics’ Trusted Volume Framework Reveals Only 14 Exchanges Are Reporting Real Trading Data

Coin Metrics, a crypto analyst firm, has released a new framework called ‘Trusted Volume Framework’ to evaluate how trustworthy is the trading volume clams made by various exchanges every year.

The analysts at Coin Metrics found that only a handful of exchanges, among hundreds, managed to cut when it comes to offering trading volume data. The study also found that a majority of the exchanges have been showing 10x the actual volume. Exchanges dwell into wash trading, and many other unethical means to show an inflated number to attract more customers.

Key Takeaways of the study revealed:

  • Fake trading volumes have been a black mark on the industry – it is difficult to find a single metric to easily sift through the reported numbers.
  • We’ve taken a data-driven approach to the problem and are excited to introduce a “trusted volume” metric to help identify the legitimate trading volume.
  • Our framework for measuring the reporting quality of exchange is broken down into three broad categories: volume correlation, web traffic analytics, and qualitative features.

As of June 2020, the passing exchanges for ‘trusted’ spot volume include Binance (and Binance US), Bitbank, Bitfinex, bitFlyer, Bitstamp, Bittrex, CEX.IO, Coinbase,, Gemini, itBit, Kraken, and Poloniex.

Jon Geenty, a data scientist at Coin Metrics, commented on the growing trend of showing inflated numbers and said:

“Exchanges are especially notorious for boosting volume numbers to game ranking sites or other nefarious reasons. The industry is full of technical information that can be difficult to understand and, at times, misleading. We are working to create a more transparent environment for those within it and a safer, more trustworthy source for those hoping to learn more.”

How did Coin Metrics Evaluate Fake Volume?

Coin Metrics’ Trusted Volume Framework
Source: Coin Metrics

Analysts at Coin metrics did not collect data from top exchanges; instead, they collected trading volume data from trusted spot exchanges which included:

The Coin Metrics subjected these exchanges to three litmus tests, which included comparing the price feed for the exchange against the trusted exchanges. Any exchange with a 60% correlation with the trusted exchange ‘passed’ the test.

The second test assesses the exchange’s volume against the web traffic of the platform, so if an exchange is inflating its volume, then the ratio will be higher as well.

And for the third test, Coin Metrics checks qualitative measures taken by the exchange, like whether the exchange is un/regulated, whether the platform boasts KYC features and others.

Among the most popular exchanges which could not pass the test had only one contender in OKEx, which failed on all the tests.

It was revealed that, in the last 24 hours, the overall volume of the crypto market was $13.25 billion, while the exchanges combined showed a total trading volume of $113 billion.

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Author: James W

DeFi Lending App, Aave Protocol, Raises $3 Million Through LEND Token Sale

  • Two Venture Capital firms, Three Arrows Capital and Framework Ventures invest $3 million in decentralized finance (DeFi) lending platform, Aave.
  • The investment was made through the purchase of Aave’s native tokens, LEND.

In an announcement on Wednesday, confirms a $3 million investment in Aave Protocol, the third-largest DeFi app in total locked value. Framework Ventures and Three Arrows Capital directly purchased LEND tokens from the Aave Protocol Treasury, showing increasing interest from institutional investors in the DeFi industry.

According to the statement by Aave, the investment will be used in fostering decentralization of the lending and borrowing, token governance, new tokenomics, and an insurance fund in case of low liquidity on the platform. This investment will further DeFi protocol’s “mission of enabling global, permissionless tokenized assets money markets.”

Michael Anderson, CEO of Framework Ventures, believes the latest investment will help Aave strengthen its position as the private borrowing and lending assets moves to decentralized platforms. He said:

“Aave stands to significantly benefit from this underlying shift by enabling more assets as collateral, continuing to innovate with new lending features such as credit delegation and partnering with other DeFi protocols.”

The investors purchased around 30 million LEND tokens while it traded at $0.10. Following the rush in DeFi borrowing, lending, and yield farming, the token has since grown to $0.26, offering a 160% increase in the investor’s ignition investment.

Framework and Three Arrows Capital have taken a rather strong stand in the DeFi space despite governments taking a closer look at the industry. The two companies will actively participate in Aave’s staking and governance systems following the investment.

Aave has rapidly grown into the third-largest DeFi platform since launching at the start of the year, and Stanley Kulechov, CEO of Aave, believes the latest partnership will scale its platform. He said:

“Their [Framework and Three Arrows Capital] involvement will bring substantial expertise to scale the protocol for institutional usage, and they will be helpful stakeholders within our community.”

Aave is taking up a range of crypto assets in its borrowing and deposit pool, including Tether (USDT) and Ethereum (ETH), to boost its liquidity pool. Notwithstanding, the platform also recently joined the Chicago DeFi Alliance and partnered with OpenLaw to launch ‘under-collateralized loans” through credit delegation.

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Author: Lujan Odera

Tech Giant IBM Files for New Blockchain Patent Regarding a Web Browser

  • According to a spokesperson for IBM, the firm’s new blockchain web browser will provide its users with a framework that lays a huge amount of importance on data privacy and security.
  • One of the primary advantages of this new browser will be its ability to prevent customer data from being stolen — since a viable backup of the persons information will always be available on the blockchain.

As per an all new patent application submitted by IBM earlier this week, the multinational company is looking to create its very own blockchain-based web browser that will make use of a peer-to-peer network to store and collect customer information.

From a technical standpoint, we can see that the browser is designed to acquire certain pre-specified information during web browsing sessions. This data is transferred within the network using a mesh of peer-to-peer nodes.

Also, the information that is being collected will depend on the ‘browsing experience’ that is chosen by the user. Some of the session info that can be saved includes bookmarks, task performance, geo-locations etc.

It is also being rumored that IBM will make use of a digital token to verify its users’ browser session activities.

In closing out this piece, it bears mentioning that the demand for blockchain web browsers has been surging for quite some time now. However, only time will tell whether or not IBM will be able to deliver on its promises.

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Author: Shiraz J

Crypto Asset Activities Fall Under Rhode Island’s Money Transmission Laws

Rhode Island has been putting effort towards clearing defining the regulatory framework of cryptocurrencies. The main question that has since stumped the U.S. state in New England is whether the virtual asset can be classified as money or some monetary value that falls under their transmitter laws.

Since the passing of Bill 5847 in July of 2019, more clarification has been provided. Turns out, some crypto activities will now be subject to the state’s money transmitter laws as per Alston & Bird Consumer Finance Abstract.

As per Rhode Island’s statute, anyone providing “electronic money transfers for a fee or other consideration,” must register as a money transmitter, which is regulated by the Rhode Island Division of Banking.

The bill describes cryptocurrencies as

“a digital representation of value that (A) is used as a medium of exchange, unit of account or store of value; and (b) is not legal tender, whether or not denominated in legal tender.”

Some guidelines appear to have been proposed as well, which seem to be directed towards crypto businesses and individuals offering related services. In particular, said the group is required to disclose certain matters to residents while developing compliance programs. The latter is suggested mostly for personal data safety, privacy and integrity among others, such as anti-fraud and -money laundering, and security programs.

Coin Desk also reported on this matter, stressing that there are licensing exceptions for “personal, family or household” uses of cryptocurrencies, as well as for educational and escrow services. The new law will be in effective commencing January 1, 2020.

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Author: Nirmala Velupillai