69,000 Bitcoin worth $3.6 Billion Lost in South African Crypto Scam

It is suspected to be a money-laundering operation for international players. While South Africa’s FSCA is looking into Africrypt, they don’t have jurisdiction as crypto assets are not legally considered financial products.

A whopping 69,000 Bitcoin worth $3.6 billion has been lost in a scam by cryptocurrency investment platform, Africrypt.

A pair of South African brothers have been reported missing with the money. A Cape Town law firm, Hanekom Attorneys, hired by investors has reported the matter to the Financial Sector Conduct Authority (FSCA), the SA Reserve Bank, and the Hawks, an elite unit of the national police force.

Back in April, when the price of Bitcoin surged to an all-time high of about $65k, the elder brother, Africrypt Chief Operating Officer Ameer Cajee, said the company had been a victim of a hack. He then asked the client not to report the incident to lawyers and authorities, saying it would slow down the recovery process of the missing funds. Their notice from April 13 reads,

“We urge all clients to please be patient as we attempt to resolve the situation at hand. It is understandable that clients may proceed the legal route. but we ask clients to please acknowledge that this will only delay the recovery process.”

This made the investigators suspicious, and Hanekom Attorneys, along with a separate group, has started liquidation proceedings against the exchange.

“Africrypt employees lost access to the back-end platforms seven days before the alleged hack,” said Hanekom Attorneys.

According to the investigation, the pooled funds of the platform were transferred from South African accounts and client wallets to other large pools of bitcoin while using mixers to make them untraceable.

A Money-laundering Operation?

Founded in 2019, Africrypt’s website is now down, which used to state,

“Africrypt’s astronomical growth from a one-man operation running out of a bedroom, to one of Africa’s largest and most successful Al trading companies in only a few years.”

According to Darren Hanekom of Hanekom Attorneys, the fact that such a low-key crypto company had crypto assets of nearly R50 billion, it is unlikely all these funds came from South Africans, rather more likely be a money-laundering operation for international players.

Additionally, clients were requested to sign an investment agreement with Hong Kong-based RaeCreateWealth Limited, which also raises suspicions.

Customers were also required to deposit funds into an FNB account which would then be used to purchase BTC, often on Luno, and after that, the crypto would be broken up and mixed with other transactions.

Just last year, another South African Bitcoin trader, Mirror Trading International, collapsed in what was called the biggest crypto scam of 2020, involving 23,000 digital coins worth about $1.2 billion.

But Africrypt is three times bigger than Mirror.

In January this year, the daily value of crypto-asset trading exceeded 2 billion rands ($141 million) for the first time in the country.

While FSCA is looking into Africrypt, the regulator’s head of enforcement, Brandon Topham, said they are currently prohibited from launching a formal investigation because crypto assets are not legally considered financial products.

“We don’t have jurisdiction, but we are looking at complaints to see if there is a financial product hidden in there,” said Topham.

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Author: AnTy

UAE’s Lulu International Exchange Integrates RippleNet Cloud to Enhance Indian Remittances

UAE’s Lulu International Exchange Integrates RippleNet Cloud to Enhance Indian Remittances

Abu-Dhabi based international money transfer service, Lulu Money, announced a partnership with Federal Bank, an Indian international financial service, to enhance remittances to India. The partnership will integrate RippleNET Cloud to reduce the transfer fees and introduce instant remittance payments from the UAE.

The case against Ripple by the SEC is not slowing the demand for its products as UAE’s leading remittance firm, LuLu Money, and India’s Federal Bank integrates RippleNET Cloud, a global network that allows instant connectivity and transfers across financial institutions. As the home to the largest Indian migrants worldwide, the partnership targets to “enhance the cross-border payments experience” to over 3.5 million Indians.

Nilufer Mullanfiroze, Senior VP, Deposits, Cards & Unsecured Lending at Federal Bank said in a press release,

“We believe such innovations will benefit the larger Indian diaspora who can enjoy a modern, low cost, fast, easy, and more reliable way of transferring money to India.”

According to a Ripple blog post, Indians in the UAE can now send remittances from over 76 LuLu exchange branches or directly from their mobile app.

RippleNET is becoming a sensation across banks and institutions globally, with the network transacting a record-beating $2.4 billion in transactions across 2020. Ripple and LuLu exchange entered a partnership that has helped the latter form avenues of transfers and “solidifies their presence in existing and new corridors,” Adeeb Ahamed, LuLu Financial Group Managing Director, said in a statement.

“The partnership signals a major step towards strengthening our Indian corridor, all the while advancing our overall mission to design the world’s most reliable, seamless, and accessible financial journeys through collaborative partnerships and application of technology.”

The RippleNET Cloud will allow LuLu exchange to directly connect to Federal Bank and other global financial institutions in the network. Users will instantly, reliably, and cost-effectively send or receive payments on the platform in one easy integration process.

The RippleNET cloud recently acquired its System and Organization Controls 2 (SOC 2) certification from the American Institute of Certified Public Accountants (AICPA), allowing it to function as an institutional-grade cloud-based payment system.

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Author: Lujan Odera

IGT Gets Regulatory Approval to Use Bitcoin & Crypto’s at Slot Machines

The world’s largest slot machines’ maker, International Game Technology Plc, is looking at offering cryptocurrency as a payment option on its casino games like Wheel of Fortune and Megabucks.

It has been only last year that the Nevada Gaming Commission made it easier for casinos to introduce cashless systems and now IGT has gained regulatory approval for using cashless wallets on slot machines.

The company received a patent this week for the means to transfer crypto between a player’s account on the gaming-establishment and an external crypto account, reported Bloomberg.

This would allow players to move BTC and other crypto assets into their digital wallets on a slot machine through their phones. Company spokesman Phil O’Shaughnessy said,

“IGT secured this patent to bolster its industry-leading patent portfolio in anticipation of any possible future direction in regulated gaming involving cryptocurrency.”

Going the crypto route certainly makes sense especially to attract the younger gamblers. According to IGT, a third of guests at Caesars Palace in Las Vegas are between the ages of 21 and 40.

Now that Bitcoin, Ethereum, and other altcoins prices have started rallying like crazy, everyone wants a taste of cryptocurrencies.

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Author: AnTy

BIS Wholesale CBDC Proof-of-Concept in Collaboration with SNB and SIX was A Success

The Bank of International Settlements (BIS), Swiss National Bank (SNB), and SIX Digital Exchange has completed a wholesale CBDC proof-of-concept (PoC), which tested the integration of a CBDC with tokenized assets and the feasibility of linking existing payment networks with Digital Ledgers (DLTs).

As earlier reported by BEG, the SNB and BIS were planning to launch a PoC CBDC by the end of 2020; it seems the duo is on track given the latest updates. Dubbed project ‘Helvetia,’ this initiative tested the technical and legal feasibility of integrating digital assets via a CBDC or linking current networks with DLT ecosystems. The press release reads,

“Project Helvetia shows the feasibility of two proofs of concept (PoCs), using “near-live’ systems to settle digital assets on a distributed ledger with central bank money … The collaboration sets the stage for further joint experimentation to assess the impact of digital innovation on the future of the financial system.”

Switzerland, which has long been an international financial hub, is looking to capitalize on the benefits of DLTs to further increase its attractiveness as a haven. SNB’s governing board member, Andréa M Maechler, noted that the SNB is prepared to embrace DLT if this means a better financial ecosystem,

“Irrespective of which technologies the financial markets adopt next, the safety and reliability of Swiss financial infrastructure must be preserved. If DLT can deliver significant improvements in securities trading and settlement, then the SNB will be prepared.”

Pros and Cons for both PoCs

Following the PoC tests, this initiative revealed that both a wholesale CBDC or linking existing payments with DLTs come with pros and cons. The former provides a seamless avenue for settling digital assets but is likely to raise significant governance and policy challenges. As for the integration approach, policy implications are minimal, although stakeholders would have to forego the perks of fully integrating with DLT networks.

Nonetheless, this milestone set the stage for further practical CBDC research according to the head of BIS Innovation Hub (BISIH), Benoît Cœuré,

“If wholesale CBDCs are to fulfill their potential as a new means of settlement, their design and implications deserve close study and consideration. This is only possible via continued deliberations and experimentations among central banks and with other stakeholders, such as market supervisors and the private sector.”

The press release was keen to point out that this innovation is only a PoC test and should be interpreted that the SNB will issue a wholesale CBDC or facilitate exchange clearing through DLT. Meanwhile, other jurisdictions, including Canada, have recently signaled a keener interest in the CBDC developments to hedge for a virtual monetary future.

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Author: Edwin Munyui

Federal Reserve Chairman Jerome Powell to Speak About Digital Currencies Today

As part of a panel on “Cross-Border Payments—A Vision for the Future,” at the International Monetary Fund’s (IMF) annual meeting, Federal Reserve Chairman Jerome Powell will speak about digital currencies Monday.

The panel will start at 8 a.m. ET on Oct. 19.

During this virtual event, while discussing the potential solutions to enhance the cross-border payments, the “benefits and risks” of digital currencies and their macro-financial implications will also be covered.

“On Monday, Jay Powell gives his input on central bank digital currencies at the IMF talk listed above. Central Bank digital currencies are coming, and they will change everything… They are coming under stealth of X-border payments but it means so much more…” said former hedge fund manager Raoul Pal, CEO of Real Vision Group.

It is, however, not mentioned if Powell would be sharing his thoughts on a digital dollar.

Other panelists include Agustín Carstens, general manager of the Bank for International Settlements (BIS); Ahmed Abdulkarim Alkholifey Governor of the Saudi Arabian Monetary Authority; and Nor Shamsiah, governor of Bank Negara Malaysia with IMF Managing Director Kristalina Georgieva as the moderator.

You can watch live here:

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Author: AnTy

7 Major Central Banks Collaborate to Release First CBDC Report, Highlighting Key Principles

The Bank of International Settlements (BIS), along with seven other prominent central banks, has published a report on the feasibility of issuing CBDCs to complement monetary policy. According to the 26-page document, CBDC’s should be based on foundational principles and core features that will enable the prospectus digital currencies to function effectively.

The report, which is dubbed ‘Central Bank Digital Currencies: Foundational Principles And Core Features,’ is a collaborative effort between the following:

  • Bank of Canada
  • Bank of England
  • Bank of Japan
  • European Central Bank
  • Federal Reserve
  • Sveriges Riksbank
  • Swiss National Bank
  • Bank for International Settlements (BIS)

It was published on October 9 and will mark the first of its series, given that the BIS is expected to advance the CBDC research in collaboration with central banks.

CBDC Foundational Principles & Core Features

According to the report, a functional CBDC will need to meet some criteria when it comes to the underlying principles and core features. It highlighted three principles which include;

  • Coexistence: CBDCs should co-exist with other types of money that already run today’s markets.
  • Innovation and Efficiency: Features should focus on promoting efficiency and innovation.
  • Do No Harm: CBDC introduction should not compromise the current financial or monetary ecosystems but complement them instead.

The 14 core features were, in turn, derived from these principles; some of the notable recommendations that were made include;

  • Secure and Resilient; To uphold the operational integrity of CBDC ecosystems.
  • Convenient; To enable seamless interaction with existing fiat currencies.
  • Value additional; To include the private sector and create a competitive environment for innovation.

The BIS co-chair and head of innovation hub, Benoît Cœuré, said that the newly released report would provide an opportunity to further delve into CBDC’s,

“A design that delivers these features can promote more resilient, efficient, inclusive, and innovative payments.

Although there will be no ‘one size fits all’ CBDC due to national priorities and circumstances, our report provides a springboard for further development of workable CBDCs.”

Recent months have seen a growing interest in the CBDC space; China, which piloted its digital yuan back in Q2, is now boasting close to $162 million e-RMB transactions. This initiative has particularly fueled the CBDC craze as other giant economies look to get a cutting edge.

South Korea announced this week that it will also pilot it’s ‘digital won’ in 2021, although they are yet to settle on whether a CBDC will be necessary. Likewise, the latest BIS CBDC report’s contributing members did not signal that their respective jurisdictions will be launching CBDCs.

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Author: Edwin Munyui

KPMG Reveals Blockchain-Based Climate Accounting Infrastructure for Greenhouse Gas Reporting

KPMG, an international accounting giant, has launched a blockchain-based solution for tracking climate emissions. The new blockchain-based system is called Climate Accounting Infrastructure (CAI), which would enable big organizations and companies to monitor their carbon emission and offset their greenhouse gas emissions.

Climate change has been one of the most critical issues in recent times. Major firms and organizations have come together to monitor and decrease their respective organizations’ carbon footprint.

The CAI blockchain solution would store environmental data in a financial system that could be utilized by the partner firms to meet their Environmental, Social, and Corporate Governance (ESG) targets.

CAI can be integrated with a company’s existing systems with external data sources, which would record its emissions. The data would be recorded on the blockchain system to ensure secure storage.

KPMG partnered with data provenance and tracking providers Context Labs and Prescriptive Data, and the blockchain firm Allinfra, on the product side. Context Labs is responsible for enriching organizations’ emission data, matching it with environmental context, and later recording and certifying the data on the blockchain system.

Arun Ghosh, the head of KPMG’s U.S. blockchain, commented on the launch of their new blockchain-based system and how it would ensure greater transparency. He said,

“As investors broaden their focus beyond financial factors to include ESG practices, organizations are increasing efforts to reducing carbon footprints, alongside transparent disclosure of progress.”

How Would CAI Help Organizations Become More Environment Friendly?

The blockchain-based CAI solution would help organizations comply with the latest environmental regulations and model the impacts and risks based on their business model with real-time data.

Climate change is real, and many big tech firms with large carbon footprints have pledged to bring it down to zero in the near future. With the rising earth’s temperature and melting glaciers, discussions around climate change have become the need of the hour. And Blockchain is definitely going to help in enhancing and furthering that goal with properties such as transparency and accountability.

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Author: Rebecca Asseh

Cryptocurrency ‘Could Be The Next Step In The Evolution Of Money,’ Says IMF

In its latest crypto shilling video, the International Monetary Fund (IMF) clubbed every cryptocurrency in one bundle with the focus on payments.

It doesn’t differentiate bitcoin from others, combining certain properties of the largest digital asset with other cryptos.

“It sounds like they’re gaslighting the general populace to prepare them for an IMF coin,” commented Samson Mow, CSO at Blockstream on the explainer.

Talking about the “special currency” that solve the problems presented by the traditional system, where the payment is processed by a bank or credit card company that takes a cut of the transaction, is time-consuming and expensive, and needs to be trusted with our sensitive data, cryptos are secure and based on the science of cryptography, IMF explains.

They remove the middleman and broadcast the transaction to the entire network, recording it in a permanent way meaning “it’s almost impossible to fool the system,” states the video covering “What are cryptocurrencies?”

With cryptos, transactions are faster, but they can’t process large amounts quickly yet, and even those people who don’t have bank accounts can buy or sell goods and participate in the global economy, it explains.

But the international organization was back to chanting the risk of transactions in most cryptocurrencies being anonymous with some even being untraceable, making it “easier for bad guys to make payments without being noticed.”

And of course, if you lose your password you lose all your money. “If someone can help you recover your money, it’s not your money,” counters Mow.

Not to forget, they are still “highly volatile,” (but not more so than stock markets are currently thanks to the central bank and government). And they are also not even widely accepted, reminded the IMF. IMF states,

“But if we counter the risks, then this new technology or some variation of it can completely change the way we sell, buy, save, invest, and pay our bills.”

What’s not covered is Bitcoin is already there, becoming a new investment class and increasingly becoming a part of the portfolios, that has been attributed to be an inflation hedge and a store of value.

Crypto “could be the next step in the evolution of money,” concludes the video.

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Author: AnTy

Banco Santander Adds 19 Regions to Ripple Partnered International Payments App, One Pay FX

Banco Santander’s One Pay FX international payments app, built together with Ripple, is now available in 19 more regions, according to a blog post announcement on July 9. This initiative, whose focus is solving the challenges in international remittance ecosystems, began back in 2018, rolling out in Spain, United Kingdom, Poland, and Brazil.

Following its expansion, the One Pay FX solution since became available in prominent jurisdictions, such as the U.S, Portugal, and Chile. Ed Metzger, the CTO of One Pay FX, has noted that they look forward to bring this tech to even more people in future:

“We’re looking to expand One Pay FX to new territories and customer segments so more people can benefit from faster, cheaper and more transparent international payments.”

Santander, which features among the top banks in Europe, took an interest in the international payments space after it was prompted by customer feedback. Some of the issues highlighted were lack of transparency in the amounts received as well as an uncertain delivery period, typically 3-5 business days.

It was then that the bank decided to leverage Ripple’s tech for solutions in the international remittance ecosystem. Metzger highlights speed as one of the reasons Santander settled for Ripple:

“Ripple also helps us address the speed issue of international transactions. Some payments on One Pay FX now happen instantly. I made a payment recently from an account I have in Spain to one in the UK and received text alerts about the transaction from both accounts within seconds of one another.”

So far, this initiative seems to have gained traction and boosted liquidity within Santander’s remittance network. The One Pay FX app won a silver award during the Distribution and Marketing Innovation Awards held in 2018. According to Metzger, more clients are making international transactions on the app given its seamless nature:

“customers now treat an international payment like a domestic transfer. They have so much confidence in the low cost, same day process, it’s no longer a big deal to send money abroad.”

Ripple’s Products on Demand

Despite the XRP token value proposition still being in question, Ripple’s products built for the international payment networks have been integrated by big boys in both finance and tech. Some notable mentions that have considered this tech include American Express, Standard Chartered Bank, and MoneyGram.

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Author: Edwin Munyui

ASIC Bitcoin Miner Manufacturer, Ebang, to Launch Crypto Exchange Outside China

  • Ebang International Holdings to launch an offshore crypto exchange that can potentially double their income to $200 Million. This, alongside their new consultancy venture which, will supplement their dwindling revenue by 40% in 2020 will work to reduce their overreliance in the ever-volatile cryptocurrency.al

News has now surfaced that Bitcoin equipment manufacturer; Ebang International Holdings intend to unveil a crypto exchange to operate outside China’s jurisdiction. This is in an attempt to generate more revenue for the firm.

The BTC rig manufacturer could see a revenue increment of up to 40% by the end of this year emanating from their new consultancy business that involves managing datacenters for clients. Chief Financial Officer, Chen Lei in an interview with a media outlet remarked at the potential of doubling their earnings to $200 Million with the launch of the crypto exchange. This timeline could potentially be stretched to 2022.

Dwindling Fortunes

Notably, their 2019 revenue of $109 Million was significantly dwarfed by an excess of $300 Million they generated in 2018. Generally translating to net losses in both 2018 and 2019. This is due to their overreliance in the ever-volatile BTC which, has plummeted significantly well below $4000 before stabilizing. The BTC is currently trading at $9154.21 enjoying a market volume of $15911378811 as per this writing.

The Hangzhou-based ASIC rigs manufacturer filed a $100 Million IPO with SEC this year, April. Their share price after, however, shrunk by almost 4% after June 26th IPO to fall below the projected $4. Most of the funds from the IPO would go into the production of next-gen rigs and their overseas expansion campaign.

According to Mr. Chen, almost 10% of the total revenue generated would go to facilitate transaction fees as they seek to set up a regulatory compliant exchange outside China. This was partly due to ongoing purge on crypto activities in China as they march towards realizing their own CBDC, the digital Yuan.

However, it is yet to be seen how the escalating rows between Beijing and Washington will affect Ebang’s access to US capital markets.

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Author: Lujan Odera