Counting Down the Final Days for Crypto Exchanges and Wallets to Set in Motion FATF’s Travel Rule

  • The FATF 24th Meeting will be to analyze the adoption of the Travel rule by member states in VASPs in their jurisdictions.
  • Most of the member states are facing compliance crunches as industry expert estimates only 10% have rolled out effective steps.

The Financial Action Taskforce (FATF) members have an impending 24th June meeting. They will be scrutinizing how well the ‘travel rule’ has been discharged to the various Virtual Asset Service Providers (VASP).

Travel Rule

In June 2019, the FATF updated guidelines that essentially covered the banking sector and other traditional financial systems. They extended the travel rule to now cover crypto exchanges and wallet providers amongst other VASPs. They would now be required to meet the same information exchange guidelines as other financial institutions when ownership of the virtual assets changed.

The travel rule was formulated to counter AML and CTF practices. It obligates financial institutions to improve their KYC protocols by ensuring collection and information sharing by requesting names, possible addresses, and account numbers to establish the parties involved in the respective transactions. This would create an audit trail, hence cracking down on criminal fronts leveraging the Virtual Assets infrastructure.

Shortly after presenting the new amendments to the travel rule, the FATF gave their member countries a year to enforce the VASPs in their jurisdictions. They would then hold a meeting to analyze steps and measures taken to align with the new standards. Although the guidelines might not be binding, the organization has warned that members not conforming with the standards might be kicked out of the body.

Countries Grappling With Compliance

CoolBitX CEO Michael Ou has offered insight into how various countries were fairing so far in the adoption of the new guidelines. Remarking that with close to two hundred member states, only 20 of them had tweaked their regulations to include the new travel rule amendments.

The remainder of the nations were on course with implementation but not fully there yet. His company is working with regulators to develop tech that will bolster compliance with the Travel Rule. They recently released their version of a solution dubbed Sygna Bridge to solve compliance woes.

He anticipates that the meeting will help the VASPs set actual deadlines for compliance with FATF standards. However, other analysts in the industry don’t share the same opinion. Siân Jones XReg Consulting expects that it would take considerably longer before all the member states achieve full compliance.

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Author: Lujan Odera

Ripple Execs Meet With Central Bank Of Brazil Officials in ‘Closed to the Press’ Meeting

Ripple Inc.’s, Brad Garlinghouse held a ‘closed to the press’ meeting with Brazil’s Central Bank officials on May 30th to discuss “institutional matters” in the South American country. Top officials from both Ripple and the Central Bank of Brazil held the meeting at 1700 hrs to 1800 hrs. What could be the motive behind the closed-door meeting?

Ripple Executives meet with the Central Bank of Brazil Officials

According to the Agenda of Authorities of Banco Central do Brasil website, the schedule of Roberto Campos Neto, the central bank’s president, showed he met online with Ripple executives on Saturday evening last week. While major details on the meeting remain unrevealed to the media, the agenda only hinted at “institutional matters”.

Three Ripple executives and board members accompanied CEO at Ripple Inc., Garlinghouse – Ben Lawsky, Member of the Board of Directors of Ripple, Eric van Miltemburg, Senior Vice President, Global Operations, Ripple, Luiz Antonio Sacco, Vice President of Global Operations and General Director for Latin America at Ripple.

Brazil’s central bank was led by Roberto joined by João Manoel Pinho de Mello, the Financial System Organization and Resolution Director, and Otavio Ribeiro Damaso, Regulation Director.

Both, Ripple and the Central bank of Brazil officials have remained silent on the conference discussions. Could the bank be looking at a possible central bank digital currency (CBDC) or settlement platform?

Brazil’s QR based instantaneous payment system

The most sensible explanation for the meeting may be to discuss the QR-based payment system that the central bank is developing. PIX, the non-crypto payment platform will offer P2P ad B2B payment solutions within the country aiming to reduce the transaction costs and speed of transactions.

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Author: Lujan Odera

Libra Would Help Usher In ‘Higher Prices’ for Facebook Ads, Says CEO Mark Zuckerberg

During Facebook’s annual shareholder meeting on May 27, 2020, the founder, Chairman, and CEO of the social media giant, Mark Zuckerberg talked about how Libra benefits the company financially. Zuckerberg said,

“Not just Libra, but all of the commerce work that we’re doing is that you should really think about it in terms of our ads business.”

He explained how the auction is an important property of the ads business which means, they don’t set a price, rather every business can just bid for themselves what an ad is worth to them.

This means they can offer the lowest possible price.

It also means those businesses will be interested in bidding more because they will get more and the idea behind offering additional tools, whether it’s around commerce like Facebook Shops or around payments like Libra or Facebook Pay, is to make commerce be more effective for businesses. Zuckerberg said,

“When they run an ad, somebody who clicks on that ad is now going to be more likely to buy something because they actually have a form of payment that works that’s on file, then it basically becomes worth it more for the businesses to bid higher in the ads than what we see are higher prices for the ads overall.

So that’s broadly the strategy around going deeper on commerce and payments.”

Updating the core infrastructure of payment

During the call, he also shared that the payment is an area where the core infrastructure hasn’t been updated in a very long time.

Transferring money or paying for things between countries is still often very difficult as such,

“there are a lot of opportunities with Libra to make the process of commerce and payments helpful — a lot easier.”

This, he believes, isn’t good for people around the world but also the economy overall. He said,

“And we will be able to participate in some amount to that value creation ourselves through higher prices in ads if businesses are succeeding using these tools.”

Just this week, Facebook renamed the wallet Calibra to Novi — a combination of two Latin words: Novus which means “new” and Via meaning “way,” to distance it from the Libra digital currency.

“People were confusing Libra and Calibra all the time,” said David Marcus, Facebook’s head of blockchain. “In hindsight, it’s hard to blame them.”

Libra digital currency was first announced in June 2019 as a global currency that would be nearly free to send across borders. However, since then the project has faced many hurdles.

The fiat-backed digital currency would be governed by the Libra Association made up of 27 companies and nonprofit organizations. Its first chief executive officer, Stuart Levey, was also named earlier this month.

The Association hopes to launch the Libra currency by the end of this year.

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Author: AnTy

Congress Was Recently Told Cryptocurrency is Becoming a “Significant Issue” for the FBI

In a meeting held on Tuesday, November 5, 2019, that involved the Senate Homeland Security Committee and the Federal Bureau of Investigation (FBI), talks regarding national security threats were expounded upon sharing more details on the matter.

Cryptocurrencies were addressed and the Director of the U.S. FBI, Christopher Wray, disclosed that the bureau views such digital assets are a threat. This is a response to Senator Mitt Romney (R-UT)’s comment.

In particular, the Senator, who admits isn’t very knowledgeable on cryptocurrencies said the following:

“I would think it is more difficult to carry out your work when we can’t follow the money because the money is hidden from us.”

In stating this, he urged that something be done nationwide regarding cryptocurrencies.

Wray explained the bureau’s viewpoint and noted that the overall adoption of the digital currency is surely to become “a bigger and bigger [issue].” It also seems like he is not convinced that regulation would rectify the situation.

Without disclosing too much, Wray did mention some crucial points. With the FBI being watchful of the exchange of money through the decentralized financial system, he stressed that the U.S might eventually become segregated if it did not make the effort to keep up with improving technologies.

He specifically noted that outside organizations within the U.S. are getting habituated with blockchain technology and could be putting in time to ensure that their financial involvements are covered from the government reports Decrypt.

Here’s what Wray has since voiced:

“Whether it’s cryptocurrency or default encryption on devices and messaging platforms, we are moving in a direction as a country and world where if we don’t get our act together, money, people, communications, evidence, facts […] will be essentially walled off from the men and women we represent.”

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Author: Nirmala Velupillai

Leaked Internal Bitmain Meeting Transcript Shows Mining Company’s Leadership Troubles

Bitmain is not having an easy time right now. A transcript of a staff meeting has recently surfaced online and it shows that there is a power struggle happening inside the largest mining rig manufacturer in the world.

The documents, which were obtained by the crypto media outlet Coindesk, show the co-founder Jihan Wu explaining why he abruptly ousted Micree Ketuan Zhan, the second co-founder of the firm.

Wu, previously had stepped down from his management role back in December 2018, came back as Bitmain’s chairman this week. One of his first actions was to notify Zhan that he would be dismissed from all his roles in the company. The reason for that, Wu believes, is that Zhan escalated a simple disagreement into a power struggle, so he had to act.

Both executives have “butted heads” since 2015, but the situation only became more tense this year, when Wu and other execs chose to lay people off. Zhan disagreed and took the decision to mid-level management executives, who sided with his opponents. After that, Zhan started to become bitter and has made several decisions that escalated the power struggle to the next level.

Wu said in Tuesday’s meeting:

“Everyone knows in 2018, the company spent unnecessary and hasty investment everywhere on research and development projects and hiring dozens and hundreds of people without a second thought. Everyone supported the layoffs.”

2019 has certainly not been a great year for Bitmain, as the market share of the company is declining while its rivals taking it. Canaan, InnoSilicon and WhatsMiner have all grown this year.

Wu accused the other co-founder of betting on “crazy ideas” like artificial intelligence and not being focused enough on the bread and butter of the company: mining equipment. Now that the conflicts did not seem to slow in their escalation, Wu made the decision to remove his old friend out of the way.

Wu stated,

“Some said inside the company, I’m the one who handles business and Zhan handles technology. I want to ask, between Zhan and I, who really has a love for the technology? Zhan doesn’t love technology, he loves that feeling of fulfilling his endless desire for power. He doesn’t love technology, he loves vanity. Folks, we have no options but to keep Zhan away from this company.”

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Author: Gabriel Machado

G20 Leaders: Stablecoins Could Be Beneficial But Libra May Pose A Serious Risk To Public Policy

The recently concluded G20 Finance meeting highlighted regulation of stablecoins as an area that needs to be addressed soon. This follows the rise in popularity of digital assets with Facebook’s Libra being the most discussed.

Finance Representatives from G20 states were in agreement of the risks posed by the creation of digital coins. They noted that digital currencies are very likely to cause a disruption in the financial system, especially in Monetary policy functions.

Furthermore, other areas like Financial Crime are a good fit for digital money which leaves the question of how regulators can curb practices like illicit financing and money laundering if they give the green light.

According to Japan’s Central Bank Governor, Haruhiko Kuroda, the G20 is set to start discussions on how to effectively regulate digital assets. The decisions will mostly be reliant on the Financial Action Task Force and Financial Stability Board proposals that will be presented based on research. These two standard-setting bodies are expected to deliver in the course of 2020 which leaves Libra’s fate unknown till then.

Monetary Effects of Stablecoins

The G20 has involved the IMF to conduct research on implications that stablecoins might have on the current financial systems. A few emerging countries have expressed their concerns on the uncertainty of new assets that could take over transactions.

Besides being a challenge on developing economies, stablecoins also pose a threat to the most developed economies as well. Therefore, the U.S senate and Bank of Japan are among the stakeholders looking for solid solutions in regulation.

Recent developments especially the negative reactions from authorities have seen Libra lose major partners like PayPal and Mastercard. Bank of Japan’s Governor was keen to not that G20’s discussions did not touch on the issuance of digital currencies by Central Banks as well.

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Author: Lujan Odera

Zuckerberg Links Up with Democratic Lawmakers Concerned About Libra Cryptocurrency

Facebook’s CEO Mark Zuckerberg held a meeting on Wednesday with about six US lawmakers over a dinner in Washington, Washington Post reports. The dinner meeting primarily focused on Facebook’s Libra crypto project.

Intelligence Committee vice chair Senator Mark Warner was pivotal in organizing the dinner meeting with Zuckerberg at an undisclosed restaurant in Washington. According to Warner, the legislators explained their issues ranging from privacy, vile content and how the issues can be handled.

While the discussion was about various issues about Facebook, the lawmakers took a keen interest to ask specific questions about Facebook’s intended cryptocurrency, the Libra. The cryptocurrency has yielded lots of scrutiny from different quarters especially lawmakers and other policy makers in the world.

One of the key concerns from the lawmakers is the fact that Libra representatives had indicated that if the project failed to get approved in America, it will not be launched in another country. Warner raised concern that Facebook might have duped the lawmakers with such an assurance as there are indications that Libra may be launched in another country in the near future.

According to Warner, Zuckerberg must have understood the concerns of the lawmakers and as such, the lawmaker wonders whether Facebook would want to launch the Libra crypto before getting approved by the US authorities.

Another lawmaker present during the dinner, Sen. Richard Blumenthal, said that he was thrilled by the interest exhibited by Zuckerberg saying that the dinner meeting was constructive as the most pressing issues facing the larger tech space were canvassed and he was much interested in the measures taken by the company to safeguard privacy.

According to Cointelegraph, Zuckerberg is set to spend more days in Washington meeting with various policy makers to talk about internet regulatory on various issues like privacy, handling of rivalry as well as how to deal with election matters. These meetings comes just a few weeks after the intense grilling of the Libra cryptocurrency by the US Congress.

Libra has been facing increased challenges ahead of its official launch scheduled for next year. Earlier this month, French Finance Minister stated that his country will not allow the launching of Libra within the European Union. Additionally, German Finance Minister has claimed that Libra will create a parallel currency that might undermine sovereignty.

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Author: Joseph Kibe

India’s Second Largest Company, Reliance Industries, to Incorporate Blockchain All Across the Country

During the 42nd Annual General Meeting of Reliance Jio Infocomm Limited, an Indian mobile network operator fully owned by Reliance Industries, Founder, Shri Mukesh D. Ambani has shared how the firm will be investing in three next generation technologies’, among which includes focus depicted in blockchain technology, edge computing and virtual and mixed reality content and cloud infrastructure.

The conference went live on Facebook on Sunday, August 11, 2019.

Speaking of blockchain uses, Ambani praised the technology for its ability to support data privacy along with plans that the company has in store for the country.

Here’s why he believes blockchain has potential in contributing towards the Indian economy:

“Using blockchain, we can deliver unprecedented security, trust, automation and efficiency to almost any type of transaction. This is a vital capability for India, especially for modernizing our supply chains, agriculture produce and other goods, which produces the life form for our economy.”

He further argued that the blockchain uses will go as far as promoting innovation in coming up with newer models that support data privacy. Ambani shared that the overall aim is to ensure control of one’s data belongs to said rightful owners and “not by corporates”.

This is an issue that he seems to be passionate about as he went to highlight that Indian data should not leave the country because it is the country’s “wealth”.

That said, the Founder shared Jio Infocomm’s future efforts over the course of 12 months. In particular, the firm plans to install “one of the largest blockchain networks” across India entailing tens of thousands of nodes in operation.

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Author: Nirmala Velupillai