Crypto Options Exchange, Deribit, Mandates ID Verification for All Users Before the Years End

The largest cryptocurrency option exchange in trading volumes, Deribit, will start mandatory government ID verification to maintain KYC/AML compliance rules.

Panama-based cryptocurrency options exchange, Deribit, requires all users on the platform to be ID verified by the end of the year. As per the official Deribit Twitter, it was confirmed that the tier verification model on the platform would be abolished for a blanket ID verification process for all users on the platform.

This follows a recent announcement by rival and troubled exchange, BitMEX, who will start ID verification on their platform. Both derivative exchanges will require new users and current ones to submit a copy of government ID verification, including passports, driver’s licenses, or legitimate and valid identification documents.

As the world of cryptocurrencies embraces the FATF “Travel Rule,” more entities are expected to join the bandwagon – tougher KYC/AML compliance being implemented. The official Twitter account said,

“New clients will be required to adhere to these market standard conditions in order to be able to open an account.”

“Existing clients will get one month from that date to become verified and upload both required documents (if not already). A formal announcement will follow soon including final timing.”

The new changes replace the old tiered system that allowed users to deposit and withdraw up to 1 BTC (~$13,000) from Deribit exchange without any KYC verification or ID requirements. All users on the derivatives exchange will be forced to verify their ID before trading or withdrawing any amount.

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Author: Lujan Odera

World’s Largest Custodian Pursues DeFi Project to Change its Brand Name

BNY Mellon, the world’s largest custodian and asset services company with nearly $2 trillion in assets under management (AUM), asks the decentralized assets management project Melon Protocol to change its brand name.

“BNY Mellon has deployed a team of lawyers to pursue taking the Melon name away from our community,” shared the project on Twitter.

As such, they are now hunting for a new name, adding, “our community & values extends beyond a name, so we’ll focus efforts on taking their outdated business model & democratizing it so that ANYONE can be a fund manager.”

This isn’t the first time BNY Mellon has targeted the project. Two years back, they sent a cease and desist letter to Melonport, the Zug-based startup that built the Melon Protocol, allowing asset managers to create their own tokenized investment vehicles.

Started as a private company, in February 2019, it delivered v1.0 of the protocol and handed the control over to Melon Council DAO.

The investment company at that time also declared concerns regarding trademark applications by Melonport and announced that they would file an opposition against MELON CHAIN, MELON PROTOCOL, MELON FUND, and MELON MAIL trademark registrations.

Built on Ethereum, its DeFi protocol has $1.8 million of total funds locked (TVL), down from a peak of $2.5 million last month.

It’s token MLN, trading at $24.44, has a market cap of just over $13 million.

On Friday, Coinbase Custody announced deposit and withdrawal support for the token, yet another addition to the San Francisco-based crypto exchange’s DeFi steak that has them listing many other DeFi tokens in the past couple of months.

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Author: AnTy

VISA Execs Focus on Crypto And Blockchain Development As Its The Future Of Payments

Two of Visa’s largest executives in charge of crypto payments and blockchain technology gave a detailed interview on the overall crypto ecosystem. The interview of the pair, by Forbes, touched on how the company is structuring its business on the crypto and blockchain front to integrate innovative solutions to current payment problems.

The executives also highlighted the impact of the central bank’s digital currencies (CBDCs), stablecoins such as Libra, and the future of digital payments, cryptocurrencies, and blockchain in Visa’s strategy.

Visa Executives share firm’s visions in crypto and blockchain

As SVP global head of fintech at Visa, Terry Angelos handles a distributed network of groups building solutions on blockchain and deals with clients in the crypto space. Cuy Sheffield’s role as the senior director in charge of crypto at Visa speaks on the way Visa’s fintech clients in the crypto and blockchain space can leverage existing products.

Visa has been making partnerships across the globe – recently partnering with Coinbase exchange, which saw the crypto exchange become the first Visa cards issuer. The partnership has since made waves across the crypto universe. Other recent partnerships include;

Responding on the number of crypto and blockchain clients Visa has so far, Terry said,

“So far, we have onboarded about 25 companies from around the world that are at various stages of development. Given this diversity, our engagement with them can go down a few different paths. First, there are very large and established companies like Coinbase, which we simply treat as strategic fintech clients.”

Further clarifying the distinction between how they rank their clients, Terry explained crypto companies as those that work with “assets that are natively issued onto a blockchain.” On the other hand, digital currencies are defined as “tokenized versions of fiat, such as what Coinbase and Circle are doing with USDC.”

A clear look on CBDCs from Visa

On the subject of the development of central bank digital currencies, Sheffield said Visa is ‘closely working with some of them in the development of a CBDC”. He stated for CBDCs to gain global traction, the assets must-have utility and should be acceptable by merchants,

“We think there’s a big opportunity for Visa to leverage our existing network and assets and expertise to add value to both central banks as they think about CBDCs, as well as to other private sector entities that are exploring these privately issued stable coins.”

Read More: CBDC’s Are The Future Of Money & Payment Ecosystems: Visa’s Head Of Crypto

Visa also led the founding team of the Libra Association before quitting a year ago, claiming they are concentrating on their payment projects. Cuy further explained that Visa is currently not looking for a consortium (recently joined Chamber of Digital Commerce) after leaving the Libra Association. He added,

“I doubt that we would join any exclusively.”

On his closing remarks, Terry highlighted that Visa is focusing on launching offline digital currency payment solutions in the future. He remarked, “One area that we’ve spent time on as well is offline digital currency payments,” he remarked.

“When central banks think about CBDCs, one of the potential features that they are paying attention to is offline payments.”

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Author: Lujan Odera

UNI on the Move, Is Uniswap’s Governance Token Outside the Realm of US Securities Law?

Last week, the largest decentralized exchange (DEX) by trading volume, Uniswap, launched UNI as part of Uniswap V3. 400 UNI tokens were airdropped to every customer who used the platform before Sept.1st, 2020.

While some called this a “groundbreaking” token launch where customers were made the investors, some accused the project of catering to whales. Currently, UNI tokens are being held by more than 50,000 Ethereum addresses/wallets.

The token hit the peak above $8 last week only to lose more than 50% of its value during this week’s retracement. Today, UNI is back on the move, up about 25% at $4.81.

The liquidity on the popular DEX has also hit a new record this past weekend and continues to trade around $2 billion, since crashing following its copycat SushiSwap, sucking the liquidity. The volume on the exchange also sees growth, keeping above $400 million for the most part.

The community is now waiting for Uniswap V3, which will improve capital efficiency and tackle slippage. Project creator Hayden Adams has already raised the expectations of the community saying, it will be “sooo much better than all the things people are hoping it will be” and that Uniswap V3 “destroys every other AMM I’ve seen to date and it’s not even close.”

“We’re full steam ahead on V3, which is going to eat V2’s lunch,” said Haydens a few months back.

Meanwhile, what’s the legal nature?

Right at the genesis, 1 billion UNI tokens were minted, 60% of which will go to community members, 15% is already distributed through the airdrop. 21.51% will go to team members with a four-year vesting period the same as 0.69% to advisors, and the 17.80% share that goes to equity investors — Uniswap raised $11 million in June this year.

Being a governance token means, holders have control over company decisions. But with the launch also came the question if it is a security.

“There was no public solicitation for investment; it was a private offering to a few people,” is what Ethereum co-founder Vitalik Buterin has to say about this.

“If one were to also consider that the Uniswap team is well funded, backed by seasoned VCs who have most likely lent their legal, regulatory, technical and other expertise, one might also take a more careful consideration of the facts and circumstances of this particular offering and why Uni tokens may very well be outside the enforcement framework of U.S. securities laws,” wrote Phil Liu, the Chief Legal Officer at Arca.

Liu, who believes UNI tokens isn’t a security, in his argument that UNI tokens fall outside the US Securities Enforcement Framework, said the team didn’t raise money through a token offering and neither it is controlled by a central entity.

As a matter of fact, Uniswap is an open-source and fork-able network that puts the power directly into the holders’ hands.

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Author: AnTy

bitFlyer Europe Integrates PayPal To Bridge the Fiat-Crypto Gap For European Traders

bitFlyer Europe, the subsidiary of one of Japan’s largest crypto exchanges, has integrated PaPal, which will allow its European clients to deposit and purchase tokens directly from their PayPal accounts.

According to the official announcement, the integration between the giant online payment platform and bitFlyer will play a major part in bridging the gap between the crypto space and fiat for European crypto enthusiasts.

Although bitFlyer Europe currently allows wire card transfers, one to three days is required for clearance. PayPal integration will allow customers to make near-instant deposits.

The announcement states that bitFlyer Europe customers can henceforth deposit euros from PayPal directly to their wallets and trade different cryptos. The statement also said that no extra charges would be passed onto the customer. Jacek Bastin, bitFlyer Europe manager in charge of business strategy, clarified:

“bitFlyer charges no handling or processing costs on top of the fees charged by PayPal.”

Since PayPal has about 340 million users globally and handles approximately 35% of the total eCommerce dealings within Europe. It is expected that the integration will help in exposing a wide array of European netizens to the bitFlyer platform, as well as to the crypto world in general.

Without going into details, Bastin revealed that bitFlyer Europe is working on several projects to ensure crypto trading becomes more accessible and secure to everyone.

bitFlyer has embarked on several activities to expand its reach globally with the firm opening branches in Europe and the United States in the recent past. Integration with PayPal is an effort by the firm to attract more crypto enthusiasts and worshippers to its platform.

PayPal has also been gearing up to enhance its innovation by using cryptos as well as blockchain technology. In June this year, PayPal announced it was hiring crypto and blockchain engineers, and it is alleged that the platform is looking on ways it can enable crypto buying for its worldwide users.

In a letter to the European Commission, PayPal stated that it was carefully assessing the worldwide developments in the crypto and blockchain spheres.

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Author: Joseph Kibe

Hacked Japanese Exchange Files Lawsuit, Claiming Binance Allowed $9.4M to be Laundered

Japanese crypto exchange, Fisco, files a lawsuit against the largest crypto exchange, Binance, for allegedly helping hackers launder over $9 million in stolen funds from the former exchange in 2018. The lawsuit, filed in the Northern California District Court, claims the exchange “intentionally or negligently” refused to stop the money laundering process even after Fisco (named Zaif at the time) informed them.

The filed lawsuit further claims Binance should cover the costs and damages caused by their negligence. The case is filed in California due to Binance using Amazon Web Service (AWS) servers and part of its digital assets being held by California-based custodians such as Coinbase and BitGo.

The Fisco-Binance Fiasco

In September 2018, Zaif crypto exchange, rebranded to Fisco after Fisco Cryptocurrency Exchange (FCCE) purchased it for $44 million, announced a hack on its hot wallets that saw the attackers make away with over $60 million in users funds. The exchange reported 5,966 BTC alongside a substantial amount of Monacoin (MONA), and Bitcoin Cash (BCH) was stolen during the hack.

While the exchange has restructured, repaying users who lost their funds, and reported the matter to authorities, the hack has opened up once again. This time Fisco has filed a lawsuit against Binance claiming a fraction of the funds stolen from the hack, about $9.4 million, were traced to the largest crypto exchange.

The lawsuit claims that Binance’s “lax KYC/AML regulations did not measure up to industry standards.” The exchange allowed new unverified accounts to transact and withdraw up to 2 BTC with no KYC compliance, which Fisco claims helped the hackers launder the 1,451 BTC sent to the exchange. The lawsuit reads,

“The thieves laundered the stolen funds through Binance by taking advantage of Binance’s policy that allowed new users to open accounts and transact on the exchange in amounts below 2 Bitcoin without providing any meaningful identification or KYC information.”

Fisco further claims it told the Binance management team on the ongoing heist highlighting the Binance addresses that had received the stolen cryptocurrency. Despite the warning, Binance did not take any action to stop the hackers.

“Binance, either intentionally or negligently, failed to interrupt the money laundering process when it could have done so.”

The Japan-based exchange is heading to court to seek compensation from Binance on the losses suffered and costs incurred to recover the amount. This will provide a clear case on the KYC compliance regulations set forward by the global regulator, FATF, known as the Travel Rule.

Japan-Malta companies court fight in California?

Zaif decided to file the case in Northern California due to several factors. First, over $40 million of the stolen funds from the exchange users’ wallets belonged to U.S and California residents. However, the exchange did not only select California due to the users residing in the area but also due to some of Binance’s “key business components” being located in the West coast state. The lawsuit states that Binance relies on Amazon Web Services (AWS) for hosting purposes – AWS is registered in California:

“Upon information and belief, a significant portion if not all of the AWS servers Binance relies on for its operations are located in the State of California.”

Moreover, Fisco claims a significant portion of Binance’s offline hardware wallets custodial services are offered by crypto firms located in California. Focusing on Swipe, a payments firm recently acquired by Binance, Fisco lawsuit stated:

“Binance admits that Swipe uses Coinbase and Bitgo, both of which are located in the San Francisco Bay Area, to custody the cryptocurrency used in Swipe’s business.”

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Author: Lujan Odera

Binance Rolls Out $100M Fund to Bring DeFi Developers to its Smart Chain (BSC) Platform

  • The world’s largest cryptocurrency exchange, Binance, is entering the raging decentralized finance (DeFi) ecosystem aiming to take over the market.
  • The centralized exchange will control the listings and governance of the platform – a case of CeFi taking on DeFi.

Binance announced a $100 million development grant in a bid to entice DeFi developers to build on its newly-launched smart contract platform, Binance Smart Chain (BSC). CEO Changpeng ‘CZ’ Zhao made the announcement during the company’s World DeFi Summit this Thursday, stating the platform will provide ‘a bridge’ between the centralized and decentralized worlds of crypto.

The platform will provide a direct link between Binance.com exchange and the Binance Smart Chain allowing users to access DeFi products without leaving the exchange directly. Binance Coin (BNB) holders will also be able to participate and have more rights in the governance of BSC by staking on the chain.

The Binance community members will be in charge of distributing the funds with a maximum of $100,000 offered to each team.

The team will use their IEO criteria used on platforms such as Binance Launchpad and Binance X to select promising projects. The centralization aspect of the new platform has irked parts of the crypto community but has also received its fair share of praise – majorly due to Ethereum’s high gas fees.

A New Centralized DeFi platform

According to CZ’s explanation posted in a short thread on Twitter, the new-look centralized DeFi will offer users a couple of advantages over sticking to DeFi.

First, the exchange will vet the tokens that will trade and transact on the BSC, managing the risks involved in scams. However, he maintains the vetting may not prove sufficient “and sometimes may even be negative (depending on the CEX), he stated. “But a reputable CEX is financially incentivized to maintain it.”

Finally, users who stake BNB on Binance will be able to earn different yields on multiple projects simultaneously. This is different from DeFi whereby you need to stake on different protocols to earn their yields.

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Author: Lujan Odera

Decentralized Finance Drives Ethereum to Eat Up $675 Million Worth of Bitcoin

Ethereum is making bitcoin more and more scarce as it continues to eat up the largest digital currency.

Today, the second-largest digital asset is leading the market, surging to a new 2-year high. Also, Ethereum miners are raking in 3x more transaction fees than bitcoin as the cost to transact on the network skyrockets to a new all-time high.

Now, over $674 million worth of Bitcoin, 59,378 BTC, has been moved to Ethereum this year, thanks to the DeFi mania. In the DeFi sector, yield-bearing opportunities have people putting in lots of money, which will continue to increase as such options continue to rise.

Source: Btconethereum.com

Stablecoins have already migrated to Ethereum en masse; now bitcoin is drawn by the allure of Ethereum’s booming DeFi ecosystem.

Also Read: Ethereum Network Needs ‘Drastic Increases in Scalability’ to Tackle the Skyrocketing Fees: Vitalik Buterin

“With only 0.3% of all bitcoin on Ethereum and DeFi booming, the opportunity for decentralized bridges between the two chains is hard to ignore,” noted Messari.

Source: Messari

A good chunk of this BTC contribution comes from wBTC, which has BitGo, the undisputed leader in bridging bitcoin to Ethereum. In this wrapped Bitcoin token’s case, users simply send their BTC to BitGo, which custody’s it on their behalf and, in turn, mints BTC pegged ETC-20 tokens on Ethereum (wBTC).

These BTC-pegged tokens can be used in various DeFi protocols for different purposes, such as lending and liquidity provision. Currently, $444 million in wBTC has been minted on Ethereum, as per Btconethereum.com.

A total of 97% of wBTC is cloaked in smart contracts; 37% as collateral in Maker CDPs, 21% in providing lending liquidity in Aave, 15% are acting as liquidity on DEX Curve, and the remainder on other DeFi protocols including Compound, Balancer, and Set.

Unlike BitGo’s centralized solution, decentralized custodian networks RenVM and Keep Network have also emerged.

RenVM had over $162 million worth of BTC locked, and it has facilitated about $400 million in volume between chains. Meanwhile, Keep Network that was launched in May, had to pause the user deposits after a vulnerability was found in its codes a few days after the launch.

“This presents an interesting quandary for bitcoin. While it clearly has more utility after being converted onto the Ethereum blockchain, its underlying value ostensibly comes from the 68 TWh of power that go into securing the Bitcoin blockchain each year,” noted Glassnode.

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Author: AnTy

Popular DEX Uniswap Beats Coinbase for the Second Time in a Row, Overthrows Other Top CEXs

The popular DeFi protocol Uniswap is reaching towards becoming the fourth largest DeFi project to hit the $1 billion mark.

Given that the fully decentralized on-chain protocol for a token exchange on Ethereum has seen a growth of 225% in the past less than five days, it won’t be long before it enters the billion-dollar category.

This decentralized exchange, which has no native token, hit $502.89 million in volume on Sunday, surpassing the volume of the popular centralized exchange Coinbase Pro, for the first time.

Now, for the second day in a row, Uniswap recorded just over $467 million volume in the past 24 hours while its liquidity has already gone above $1 billion, up from just $306 billion on August 27th.

Meanwhile, in the last 24 hours, Coinbase Pro recorded $416 million in volume, Kraken $193 million, Bitfinex $139 million, Bittrex $53 million, Poloniex $43 million, Gemini $23.1 million, and Binance.US $23 million, as per CoinGecko.

Uniswap already sees more usage than many of the popular centralized cryptocurrency exchanges, except for the likes of Binance, OKEx, and Huobi, which is managing between $2 to $4 billion in daily trading volume.

The biggest contributors to Uniswap’s volume are Wrapped Ether (ETH), USDT, USDC, DAI, YFI, SUSHI, LINK, Synth sUSD, SNX, and AMPL.

However, the issue here is the DEX Sushi, which has nearly $760 million locked in it and proposes to be an evolution to the Uniswap protocol. “For users, it’s value-destroying. Just causes liquidity fragmentation. You could still use an aggregator, but at a min, your gas costs will go up,” noted analyst Ceteris Paribus.

For now, the protocol is creating more liquidity, as seen in the 226% growth in just four days, but it also means that once the migration of Sushi from Uniswap happens, rewards will get a huge haircut, so it is a net negative, he said.

However, the DeFi ecosystem continues to grow, having locked in $7.7 billion in the sector, and not all the projects are included yet.

Volume on DEX, overall, has been growing, unperturbed by the high Ethereum gas price, which, although recently trended down, saw a spike this weekend.

August has actually been yet another record-breaking month for DEX volumes that reached $10.42 billion, compared to just $4.3 billion in July as per Dune Analytics. And Uniswap and Curve have been leading this growth, accounting for more than 65% and 18% of overall volumes. Uniswap also accounts for 57% of all DeFi users.

It looks like the next flippening will be of DEX vs. CEX tokens.

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Author: AnTy

Ethereum’s Gain is Also Its Loss Amidst the Continued Institutionalization

Yesterday, the largest digital asset took a hit and went down to about $11,110 level. Naturally, this then translated into losses for altcoins.

Altcoins went down hard with Cardano (ADA) being the biggest loser among the top cryptocurrencies while Aave (LEND) remaining the biggest gainer hitting yet another all-time rushing for $1 — up 67% in the past five days.

While bitcoin continues to record losses in the short-term, Ethereum continued to underperform and dropped by almost 10% below $400 to as low as almost $370.

At the time of writing, ETH/USD has been trading at $388.60, now in the green by over 2.2% but in the gains by 196% YTD.

Thanks to these gains, Ether now accounts for more than 30% of the total cryptocurrency market cap excluding Bitcoin, for the first time since September 2018.

However, while the exchange balance of BTC has gone down 9.6% in 2020 so far, Ether’s balance YTD change has been net positive of 10.4%.

It has been these profits that have the ETH balance on crypto exchanges growing as investors look to take off profits. Even the ETHUSD longs in Bitfinex have seen a slight drop but that could be temporary just like in early August that led to the longs hitting new highs.

The Institutionalization

While Ether is in losses with the market looking to finish off the monthly lower, ConsenSys is making acquisitions and gaining investment.

As we reported, the institutionalization trend is continuing with the NY-based Ethereum venture studio founded by Ether co-founder Joseph Lubin which acquired Quorum, the Ethereum-based enterprise blockchain platform developed by mega-bank JPMorgan.

“We’ll be working together with JP Morgan to merge the technical roadmaps of our own hyperledger basic client which is an Ethereum mainnet compatible client with the Quorum technical roadmap and under a commercial agreement we will be supporting JPMorgan’s Interbank Information Network, the IIM, and JPM Coin network,” explained Lubin in an interview with CNN.

JPMorgan has also made a strategic investment in the company but the size of the investment hasn’t been confirmed by either of the parties.

“So we will be bringing a much more comprehensive enterprise Ethereum solution to not just JP Morgan and the hundreds of financial institutions on their networks but the additional hundreds of institutions around the world that make use of enterprise Ethereum and that are increasingly starting to make use of public mainnet Ethereum,” Lubin added.

Vulnerable to Attack

Amidst all this came a research that says more than $1 billion worth of tokens on the Ethereum blockchain is suffering from a software vulnerability — a fake deposit exploit.

This missing software standard is found to be in 7,772 issuers of ETC20 tokens which can be manipulated to hack the funds at about no cost.

“If the fake deposit attack is carried out, it is for sure a great disaster for the token,” said one of the researchers, Haoyu Wang, an associate professor of computer science at Beijing University of Posts and Telecommunications. “Worst case, the token has to be reissued.”

The possible fix is upon crypto exchanges which can blacklist malicious token contracts because smart contracts are permanent and can’t be reversed.

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Author: AnTy