Shift in Momentum: Binance Yields to Regulatory Pressure, the Definition of HQ Changing for CZ Too

Binance aims to move from its start-up origins to become a financial institution, but CZ isn’t leaving, rather is putting “commitment to compliance” as their top priority. The exchange has also launched the Tax Reporting Tool to help its users fulfill their tax reporting requirements.

Leading cryptocurrency exchange, Binance now wants to set up regional headquarters and be recognized by local regulators, said chief executive officer, Changpeng Zhao.

“We want to be licensed everywhere,” Changpeng Zhao told journalists, saying he wanted to “work with regulators everywhere.”

“From now on, we’re going to be a financial institution,” he said, adding that this would be breaking from its earlier decentralized model and maturing from its start-up origins.

As a first step towards getting a regulated move, Binance is becoming KYC (know your customer) compliant in order to “support” the security of its users, it said.

The exchange announced a reduction in its daily withdrawal limit to 0.06 BTC for those who are not completely verified but only have Basic Account Verification. This adjustment will be effective in phases starting from August 4 and will be completed by August 23.

The same restriction applies to new account registrations but is effective immediately.

“We continually review our policies to ensure that we surpass industry standards. This adjustment better accounts for current BTC prices. You can increase your withdrawal limit by completing identity verification.”

The same day, Binance launched the Tax Reporting Tool to help its users keep track of their crypto activities so that they are fulfilling the reporting requirements laid out by their regulatory bodies.

‘What if the less reg friendly things move to BSC/ some other chain. I’m thinking things like derivatives and lending markets. Binance has been writing a shit ton of checks in that space,” noted market maker IamNomad in response to Binance’s latest move.

Binance Smart Chain (BSC) is actually seeing a renewed interest lately, with the daily transactions on the blockchain hitting a new peak above 11.9 million on July 27 after bottoming around 3.14 million earlier this month, as per BSC Scan.

Unlike the last peak, this time, DEX PancakeSwap is not behind this success but CryptoBlades, a play-to-earn NFT game. This makes sense, given that Axie Infinity has been leading the market during the downturn of the last three months.

Amidst all this came reports of CZ looking to hire his replacement as the next CEO.

During a conversation with Mukaya Panich, CIO at Thailand’s Siam Commercial Bank’s venture arm SCB 10X, CZ said he is looking for a senior person with strong compliance and regulatory background.

“I don’t think I’m the best person to lead that effort. I think having somebody with a very strong regulatory background is actually better.”

CZ, however, took to Twitter to explain that “there are no immediate plans to replace me as CEO,” though he would like to hire someone with a special regulatory background to show their “commitment to compliance,” which he said is their top priority.

“I feel CEOs should not stay for more than 10 years, ideally around 5 years… We are always hiring for CEOs. I don’t need to be CEO, and I am not leaving.”

Much like in 2018, Binance became the leader in the crypto space; market participants believe the momentum is shifting yet again, with FTX coming on fast behind Binance to take up the first spot.

While Coinbase already had its initial public offering to mark Bitcoin top so far this year and Kraken is also planning sometime next year with FTX considering but not really needing it, CZ is now mulling a future IPO in the US but said the plan “is not 100% fixed yet.” Such plans would require Binance to have a legal entity and headquarters.

“We are setting up those structures.”

“Once those structures are in place, you may make it easier for an IPO to happen. So that’s not out of the question. But right now, we are still in the early stages.”

Binance has been facing a lot of regulatory scrutiny from all over the world especially due to not having an HQ, something regulators aren’t comfortable with, especially UK watchdog FCA which called the lack of a headquarters a “huge issue.”

Up until now, CZ has maintained that his definition of a headquarters is different from others, which is finally changing as the exchange faces the pressure of regulators and, given the latest changes made by the exchange, is also caving to them.

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Author: AnTy

Canadian Financial Institution Launches World’s First Stablecoin Backed by Bank Deposits

Canadian Financial Institution Launches World’s First Stablecoin Backed by Bank Deposits

  • Canadian-based bank, VersaBank, announced the launch of its digital stablecoin, VCAD, which is backed 1:1 by Canadian dollar bank deposits by the bank.

VersaBank, a North American banking leader in B2B digital payment solutions, announced its plans to launch VCAD, the “world’s first digital currency backed by a North American bank deposits”. The stablecoin aims to offer users a channel of commerce while offering the highest levels of stability and security on its system.

The VCAD stablecoin is as a result of a partnership between VersaBank and Stablecorp, a joint venture between crypto asset manager, 3iQ and Mavenet, a blockchain development firm, both Canadian firms too. The partnership will ensure the commercial launch of VCAD, with VersaVault, a digital bank vault under VersaBank’s cybersecurity subsidiary, DRT Cyber Inc., securely managing the stablecoin.

The VCAD project is expected to launch in the coming months, a statement from the team further stated.

VCAD allows consumers and businesses to leverage the benefits of stable tokens such as removing the wild volatility experienced across the crypto market or fiat currencies. Moreover, users will also enjoy the security of a fully-backed stablecoin through the bank deposits, David Taylor, President of VersaBank and DRT Cyber Inc. said in a statement.

“Consumers and businesses purchasing products and services with VCAD will finally know the precise value of their digital currency when executing these transactions.”

At launch, VCAD will be issued to financial intermediaries working with VersaBank in exchange for Canadian dollar deposits. These partners and intermediaries will then offer the stablecoin directly to users and businesses allowing them to redeem for Canadian dollars and payment purposes at any time. Jean Desgagne, CEO, Stablecorp said,

“VCAD provides consumers with not only the security afforded by an underlying deposit with a Canadian chartered bank but also the comfort of knowing that each VCAD issued or redeemed will always have one-to-one value with the Canadian dollar.”

Stablecoins are rapidly gaining acceptance across Canada as a bank of Canada official, Deputy Governor Tim Lane, praised the innovation over “flawed Bitcoin” as a payment channel.

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Author: Lujan Odera

UK FinTech Firm, Ziglu, Receives FCA License, Launches Crypto And Fiat P2P Transfers

  • U.K. based crypto-friendly firm, Ziglu, receives an Electronic Money Institution (EMI) license from the top financial authority, the Financial Conduct Authority (FCA).
  • This adds to the AMLD5 license obtained in the past week.
  • The crypto challenger bank becomes only the second firm in the country to receive the licenses allowing users to send peer to peer crypto and fiat payments to each other.

According to the official FCA website, Ziglu officially received its EMI license on Sept. 1 after four or five months of waiting from its application. The company launched earlier this year in June, promising to offer a new payment gateway for crypto users to purchase, send, and receive any form of currency seamlessly.

At the start, the company will only allow Ziglu to Ziglu customer crypto transfers in a bid to comply with the AMLD5 directive, CEO and founder of the crypto challenger bank, Mark Hipperson said. Starting Sept. 7, the platform will allow peer-to-peer payments in four cryptocurrencies – Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH) – and the British Pound (GBP) as well.

Mark further confirmed that Ziglu is working on adding a host of other cryptocurrencies in the future, starting with XRP later in September. The challenger bank follows in the steps of Revolut, also a U.K. crypto challenger bank, offering a select number of currencies and no support for transfers to external crypto wallets.

Cryptocurrency and fiat currency holders are insured up to £50,000 (~$66,100), with each trade on the platform charged a 1.25% commission fee.

Ziglu completed its seed round funding in June this year, raising £5.25 million (around $6.94 million). Hipperson said the company is looking to raise more through crowdfunding to enhance the features and expand its market base.

A beneficial platform for crypto payments

Speaking to The Block, Hipperson confirmed the platform currently serves a few thousand customers but targets over a hundred million in the “coming six to seven years.” In this light, Ziglu will add more features to pull customers to its platform.

First, the FCA-regulated entity announced its multi-exchange support. This allows cryptocurrency buyers to have the best rates as the platform automatically scouts the lowest price from the available exchange list and converts the fiat payments to crypto instantly.

Moreover, Ziglu also plans on adding features on its global account, starting with the MasterCard crypto debit card. The debit card will allow users to spend their crypto and fiat from their wallets directly. The crypto-to-fiat conversions will happen instantly at the point of sale.

Currently focusing on U.K. customers only, Ziglu will expand to select European states in the coming months, Mark confirmed. The remaining states in Europe will be added by the end of Q1 2021 with an eye on the U.S. markets before the end of H1 2021.

Complying with the FCA regulations and AMLD5 directive

As only the second crypto challenger bank in the U.K., Mark confirmed the process of getting the EMI and AMLD5 licenses was no easy feat. However, in a statement obtained by BEG, he said the process ensures only serious companies are selected; hence “he wouldn’t have it any other way.”

“The [authorization] process is long, arduous, and hard. I wouldn’t want it any other way,” Hipperson said. He further explained that the long process showed that companies selected by the FCA take “governance, compliance, risk management, and customer data seriously.”

According to Mark, the AMLD5 directives were harder to comply with as a virtual asset service provider need to collect KYC and report suspicious transactions to authorities. However, the process was made more accessible as Ziglu only allows in-app crypto transfers reducing the cases of not knowing where cryptocurrency is from.

While not fully licensed as a bank, Hipperson said Ziglu is planning to add services such as loans, overdrafts, interest-earning accounts, and insurance products in the future.

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Author: Lujan Odera

Worlds Fourth-Largest Bank, MUFG, to Roll Out A Digital Currency for Mobile Payments

Japan’s giant banking institution, Mitsubishi UFJ Financial Group Bank (MUFG) finally announces plans to launch its digital currency after releasing a conflicting report in December 2019. According to local news website, Mainichi, MUFG’s president, Hironori Kamezawa, confirmed the company will launch its own digital currency partnering with Recruit Group, which operates restaurant introduction sites including “Hot Pepper Gourmet”.

The partnership with Recruit Group was made back in December, raising the rumors (now confirmed) on the launch of a digital currency. The digital currency will be used across Recruit’s business ventures allowing users to instantly and cheaply transact across a possible 1 million stores spread across the globe.

According to Kamezawa, the launch of the digital currency comes in line with the current global pandemic which is discouraging the use of physical cash.

“There are various delays, but there may be a new coronavirus problem, so it may be just the right timing.”

A statement from Recruit Group shows its hopes of a successful partnership on MUFG’s digital currency launch. They aims a spread over multiple global stores targeting “young part-timers.” The statement further confirms the digital currency will be available to non- Recruit members stores. A spokesperson stated,

“We are thinking that it can be used openly by everyone.”

Notwithstanding, the company will also focus on digitizing the internal processes in a bid to increase profits and promote paperless work. While the company looks to expand its overseas territory, Kamezawa emphasized on getting the right product fit.

“We will move from the phase of expanding quantity through acquisitions to the phase of improving quality.”

MUFG Bank’s love for a digital currency started back in 2018 and in April 2019, the bank confirmed it will its digital coin allowing digital payments through smartphones. MUFG is the fifth largest bank in the world in value of assets terms.

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Author: Lujan Odera

Kraken Exchange Onboards Swiss Bank InCore to Help Euro Clients Buy Crypto With Fiat

Swiss Bank InCore has just become the first banking institution in the nation to provide banking services to Kraken crypto exchange.

The deal, which was made public on Friday, will allow Kraken clients to finance their trading accounts using four different currencies – British pound, Swiss franc, Canadian Dollar, as well as the euro.

InCore Bank CEO, Mark Dambacher, explained that the services would be available to both institutional and individual clients. He stated:

“Private and institutional clients who want to diversify their portfolio in an intelligent and innovative way with Kraken can transfer fiat assets via InCore Bank to the crypto exchange.”

Dambacher expressed the bank’s gratitude in partnering with Kraken. He said that since cryptos are virtual assets, they will be an essential addition to the bank’s modern asset management portfolio as they can be used for both payments as well as investment for future use.

The partnership comes as no surprise to many banking analysts as the bank seems to be strategically positioning itself towards blockchain apps, tokenization as well as cryptos.

To start with, clients within Europe will only be able to deposit euros to their accounts via the Single Euro Payments Area (SEPA) platform, a payment platform developed by the EU to ease euro bank transfers. However, the two firms plan to include the Swiss franc (CHF), Canadian dollar (CAD), and British pound (GBP) during the third quarter of the year.

Although its headquarters are in the US, Kraken is currently Europe’s biggest crypto exchange based on its Europe’s volumes. The firm has been at the forefront to expand its services, and, last month, it expanded to Australia after the addition of the Australian Dollar in its platform.

Kraken’s head of banking and payments, Maximilian Marenbach, explained that the partnership with InCore would not only help in enhancing its service delivery but also build a secure link between the conventional financial system with the crypto sector. He praised InCore for their grasp of the potential of the digital assets. He added that this would make the bank a formidable funding partner for Kraken customers.

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Author: Joseph Kibe

Japanese Financial Services Giant SBI Holdings To Give XRP As Shareholders Benefit

SBI Holdings, the crypto-friendly financial institution, is set to provide its shareholders with an option of receiving their benefits in form of XRP.

On Friday, SBI Holding announced that shareholders will have the option of receiving their benefits in XRP as well as any other product provided by its SBI Alapromo, a subsidiary of the company that deals with cosmetics and health food.

According to the new scheme, fresh shareholders who are not one year old in the firm’s registry will have the option of receiving XRP worth 2,000 yen (about $18). Additionally, shareholders who have held the company’s stock for more than one year can receive XRP worth 8,000 yen or $73.50.

Alapromo also provides alternatives to the shareholders where they can receive health supplements, cosmetics as well as brown rice powder. All the shareholders will have the advantage of a 50% discount on all the cosmetics and supplements produced by the subsidiary.

SBI also gave out conditions on those who would prefer to get their benefits as XRP. the shareholders must be Japanese residents and own an account with VC Trade, SBI owned crypto exchange. VC Trade was started in 2018 boasting as the maiden crypto exchange supported by a major global bank.

SBI Holdings has been a key supporter for the mainstream adoption of crypto as well as usage of blockchain to offer business solutions. Apart from the crypto exchange platform, SBI also has a crypto mining firm which is reportedly developing arguably the global’s largest Bitcoin mining farm in Texas.

SBI Holdings has also teamed up with Ripple to form a joint blockchain venture that is actively developing XRP. the two firms have also come up with Money Tap which allows people to easily transfer money. The project has seen endorsement from various Japanese banks.

SBI Holdings has previously offered its shareholders an option to receive their benefits in XRM. last year in August, MorningStar Japan, an SBI subsidiary, gave out its dividends using XRP.

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Author: Joseph Kibe

Japan’s Second Biggest Bank Joins SBI Holdings By Investing In Ripple-Powered MoneyTap

Japan’s second-biggest banking institution has teamed up with SBI Holdings to develop a financial service platform that will be based on blockchain, Japanese based Nikkei reports.

Sumitomo Mitsui Banking Corporation (SMBC) is set to deposit money in Japanese financial conglomerate in efforts to enhance the utilization of distributed ledger technology (DLT) within the trade finance field as well as personal bank remittances.

The partnership documents show that the Japanese financial giant agreed to invest in MoneyTap, the payments platform powered by blockchain technology. The partnership comes just weeks after Fukushima Bank, as well as various regional banks, integrated the app to their operations.

Ripple in collaboration with SBI Holdings developed MoneyTap. The app using DLT enables its users to send money with the help of their telephone numbers or using generated QR codes. While the app is powered by Ripple technology, it is yet to reveal whether users can use XRP, the network’s native token.

Sumitomo Mitsui Banking Corporation (SMBC) and SBI Holdings are members of a banking consortium which forms SBI Ripple Asia that was formed to advocate the use of Ripple’s technology within Asia. The consortium brings together 47 banks which boast of 80% control of the Japanese banking assets.

SMBC is also investing in Marco Polo’s R3 Corda that is also supported by the SBI Holding. This investment is set to enhance the adoption of Corda within Japan and beyond. Corda is a blockchain platform that allows companies and developers to develop applications on top of it. About 300 companies have used the platform for different purposes.

Ripple SBI Asia has witnessed rapid growth and development since it was formed. The firm together with Visa has invested in Currencycloud.

Ripple and SBI Holdings agreed to form a joint blockchain venture in January last year with an aim of revolutionizing the finance sector in Japan and the region.

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Author: Joseph Kibe

Lawmaker Proposes Bill For State-Chartered Institution For Blockchain & Crypto Innovations

An Oklahoma lawmaker has come forward with the proposition of creating a financial institution chartered by the state and that functions as a central crypto depository for government agencies in the state.

Senator Nathan Dahm wants to provide an infrastructure backed by the government, for cryptocurrencies and blockchain-related technology. As reported by LegiScan, the bill should be introduced on February 3, meaning now it’s only in development. This is what the bill notes:

“This new financial institution shall be fully supported by blockchain technology and innovations. The new financial institution shall have the highest level of expertise with customer identification, anti-money laundering and beneficial ownership components. “The new financial institution shall be designed to seamlessly integrate into existing banking and financial institution regulations that protect consumers while limiting regulations that restrict innovation and technological advances for new financial products, data transmissions and recordkeeping.”

It Will Take Time for the Depository to Be Created

Even if it passes, the bill proposed by Dahm won’t have a depository being created to soon, as it would have to bring together the Department of Commerce and Oklahoma’s State Banking Department to coordinate their efforts and to make plans so that the strategy developed for it respects the law and meets the state’s requirements. Having this in mind, a report regarding the initiative has been scheduled to be released on July 1st, next year.

The State to Welcome Businesses That Work with Crypto

The bill is seeking to make the state as more welcoming for retail and other business’ to work with cryptocurrency and employ blockchain technologies, stating that:

“Oklahoma is committing to partner with innovative technology, help develop next generation financial products, and safely grow unique technical and financial sectors in this state.”

Senator Nathan Dham had filed a bill in February 2019, the bill will show when a digital token is a security. He also sponsored a piece of legislation that became a law in April 2019. This law establishes when a blockchain-secured contract or a record is in electronic form and should be an electronic record.

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Author: Oana Ularu

Digital Asset Custodian Koine Awarded Electronic Money Institution (EMI) License By FCA

Financial Conduct Authority (FCA) has awarded and Electronic Money Institution (EMI) certificate to crypto assets custodian, Koine, Financial Magnates reports.

Koine announced on Thursday that it has secured a licence to issue electronic money from FCA. The licence means that Koine can now offer real time e-money payment services to their increasing institutional clientele. Koine also revealed that plans are underway to seek licensure in various financial services locations.

Koine’s chairman Hugh L. Hugh praised the authorization stating that the EMI license will help the firm to move with speed and invest in the necessary infrastructure that will enhance institutional participation within the digital assets market.

Commenting on the development, Hugh L. Hughes, chairman and CEO of Koine, said,

“Market reaction to Koine’s ultra-secure scalable institutional class solution for custody and settlement, has been immensely favorable, and with our EMI authorization now issued by the FCA, we are rapidly moving to implement the market infrastructure necessary to support institutional participation in the digital assets marketplace.”

Currently, Koine enjoys a wide clientele of more than 40 ranging from families to institutions as well as funds. The firm offers custodial as well as real time settlement services in fiat as well as digital assets.

The company has its headquarters in London but its crypto assets custody services are not covered by the UK regulation framework. In this regard, the new license is not authorization of the firm’s digital asset custody business.

He said,

“e-Money authorization should not be read as authorization of Koine’s transformative custody and settlement model for digital assets.”

Hughes explained that the recognition by the FCA of the control procedures that the firm has enacted, irrespective of their views regarding the crypto space, is a testament that London is still an attractive base for crypto-based firms alongside the conventional financial companies. He explained that all that is needed for the crypto-based firms is to explain the controls put in place to satisfy the regulator’s standards and guidelines.

Hughes commented further,

“The FCA’s recognition of the controls and processes that we have put in place for our EMI authorization, notwithstanding their concerns regarding the digital markets, shows that London can continue to attract financial institutions in the digital markets, alongside traditional capital markets, as long as those institutions can show that they have appropriate governance to address the regulator’s requirements.”

Started in 2017, Koine has continued to come up with unique solutions which makes it stand out among its rivals who offer hot wallet and cold storage services. The firm offers manual transfers, offering advanced security for clients’ assets and immediate settlement as well as withdrawals.

The company has been monitoring the best practices exercised by the conventional custodians and has been able to withstand the test of time and is now among one of the largest digital assets custodians.

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Author: Joseph Kibe

Nexo Crypto Lender Reduces its Rates on Immediate Credit Lines

The crypto lending institution recently announced that it has reduced interest rates on the prompt crypto credit lines.

Cheapest Rates on Blockchain Platform

On Oct. 22, a press release was published where Nexo announced they were reducing the interest rates on their credit line service. The reason why they came up with that objective is that the crypto lending company has secured cost-efficient and long-term financing. The immediate lending institution affirms that they are the only company that offers the lowest interest rates in blockchain’s ecosystem.

The crypto lines interest rates are reported to start at 5.9% and do not have any minimum repayment requirements. There are also no credit checks to go through. The loan coins and the service is available in over 200 jurisdictions.

Nexo enables digital asset holders to choose against a wide variety of digital coins like Ether, Bitcoin, Litecoin, Ripple, and other assets. The ownership of the borrowers’ assets does not change; they remain the sole owners.

Nexo reported in August that they had paid their users around $2,409,574.87 in dividends. That was an annual dividend yield of about 12.73%. The lending platform is estimated to have more than 250,000 users. Therefore, their dividend yield is reportedly higher than any other dividend-paying stock that is listed on the S&P 500 market index.

In August, Nexo unleashed a MasterCard that was branded cryptocurrency credit card. It is said that it is the first card on earth that allows crypto users to spend their cryptocurrency value without actually spending it.

Celsius Network: Biggest Competitor

According to Cointelegraph, a cryptocurrency borrowing and lending platform Celsius Network, Nexo’s chief rival, completed more than $2 billion in crypto loan origination. They have also received $300 million in deposits for the past 12 months.

Celsius has finalized more than 160,000 loan trades and has dispersed interest payments amounting to $3 million. According to the company, they are the number one growing lending institution in the world.

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Author: Daniel W