Putin Approves Cryptocurrency Bill, Stopping Russians From Using Bitcoin for Payments

On Friday, Vladimir Putin, Russia’s president, signed one of the two digital assets bills into law, Russian media outlet RIA reports.

The new law was passed by Russia’s parliament, Duma, last week and states that firms can provide virtual securities on blockchain platforms provided they are well registered with the country’s central bank, Bank of Russia, as issuers as well as meet various provisions.

The new law also states that decentralized cryptos are taken to be a form of property that should be declared by the holders for taxation purposes.

The bill notes that as a property, cryptocurrency cannot be used to pay for goods and services in the country. However, businesses accepting crypto payments have until January next year to adjust to the new development.

According to RIA, the bill seems like a mild version of what was essentially proposed. Russian parliamentarians had developed a new proposal of the bill which would render any entity providing or trading cryptocurrency illegal in the country.

The first draft of the bill highly represented the skeptical stance that has been advanced by the country’s central bank. It led to widespread condemnation from the crypto community as well as from the country’s Ministries of Economic Development and Justice.

The law also states that Russian residents will now have a chance to challenge any transaction involving the digital currencies in a court of law provided the plaintiff has proof of transaction and is a crypto holder.

The Russian parliament is currently working on a more comprehensive digital bill that will touch on various issues regarding digital currencies. The bill is expected to be discussed and passed before the end of the year. However, no specific details on dates have been disclosed to the public.

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Author: Joseph Kibe

US Secret Service Has Modernized Its Role in Tackling Financial Crimes in The Crypto Era

  • The role of the US Secret Service, whose purpose extends from protecting the US President Trump to protecting the US financial systems, has had to morph to tackle more sophisticated cybercrimes.
  • There is, however, a shared sentiment that cryptocurrencies are just a mere proponent of crime.

Launched on July 5th, 1865, the Secret Service’s role has evolved over the years. Initially attached to the Treasury, their primary purpose has been ensuring the safety of the US commander in chief alongside curtailing counterfeiting of the US currency.

However, after the 9/11 tragedy, the Secret Service was moved to the Department of Homeland Security (DHS). The purview of the service now extends to the investigation of financial crimes that have evolved significantly due to emerging technologies such as cryptocurrencies. However, there have been talks recently about possibly reuniting the Secret Service with the treasury.

Increased Cybercrimes during a global pandemic

Secret Service cyber policy advisor Jonah Force Hill has offered insight on how their role has been modernized, especially with ongoing talks around the development of the digital dollar. He also reports a spike in financial crimes against US citizens during this COVID-19 time with the FBI reporting a 75% increase in day to day cybercrimes in a June US house meeting. This was collaborated by statistics offered by VMware Cybersec Strategy lead, Tom Kellermann, indicating a large 900% bump in ransomware attacks in the first two quarters of 2020.

Despite cybercriminals demanding for crypto for ransomware, he admits that crypto is not the issue but just a small element of the crime. He highlights that cryptocurrencies will come under the scrutiny of the Secret Service if they undermine the integrity of financial and remittance systems. Money laundering and fraud use cases are also warranting intervention from the Secret Service.

There was mention of crime as a service model where cybercriminals offer customized services and data at a fee. This could include easily exploitable vulnerabilities in the systems, account login credentials, identities, and infrastructure, such as disk space for storage. This type of model enables the cybercriminals to gang up together to orchestrate a crime, drawing similarities with a bank heist crew where each member has a specific skill set.

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Author: Lujan Odera

Germany Vows To Fight Money Laundering And Terrorism Financing As New FATF President

In a document released to the public on July 7, 2020, the incoming German president of FATF, Dr. Marcus Pleyer, vows to “strengthen the FATF’s governance, enhance its strategic focus, and increase its public visibility.” Marcus further calls on the FATF Secretariat and members alike to help in the fight against terrorism financing, migrant smuggling, environmental crimes, and money laundering in a new digital transformation of AML/CFT act.

The team will study the challenges and opportunities presented with new financial technologies and operational changes to help AML compliance. FATF will also focus on enhancing data pooling and analysis to enable the private sector to remain AML/CFT compliant using artificial intelligence and big data analysis.

The German Presidency, lasting from 2020-2022, will also develop solutions to deal with the current challenges brought on by the global COVID-19 pandemic, the statement says.

The AML/CFT regulations set in place aim at building on initiatives within the FATF Global Network to prevent money laundering and counter-terrorism, among other illicit activities, including illegal arms trafficking, financing of ethnically or racially motivated terrorism, and migrant smuggling.

Germany Crypto Regulation Outside FATF

Germany is witnessing a spike in regulatory policies being set up surrounding crypto and digital assets. There is a recent bump in crypto custodian license requests across the country following the release of crypto services guidelines earlier this year by the top financial regulator Bafin, who named cryptocurrencies as financial instruments.

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Author: Lujan Odera

Hope for Bitcoin ETF Approval? SEC Chairman Jay Clayton’s Departing Will Be ‘Massive’ for Crypto

On late Friday night, US President Donald Trump said he will nominate the Securities and Exchange Commission (SEC) Chairman Jay Clayton to serve as the next United States Attorney for the Southern District of New York.

“For the past three years, Jay has been an extraordinarily successful SEC Chairman, overseeing efforts to modernize the regulation of the capital markets, protect Main Street investors, enhance American competitiveness, and address challenges ranging from cybersecurity issues to the COVID-19 pandemic,” said Attorney General William P. Barr

On Clayton’s nomination.

This appointment will be effective on July 3.

Clayton will be replacing Geoffrey Berman as the top federal prosecutor in Manhattan who said he will not resign from his position and will only step down when a successor is confirmed by the Senate.

Berman oversaw several prosecutions of Trump’s top allies including his personal lawyers.

This may, however, turn out to be a good thing for bitcoin.

“The SEC chair is one of the most important U.S. officials for crypto regulation. Chairman Clayton’s replacement will have a massive impact on the industry (for better or worse). Our chance at ETF approval & clarity on a wide range of issues for years to come hangs in the balance,” said Jake Chervinksy, general counsel at Compound Finance.

Under Clayton, all the Bitcoin ETF application has been rejected on the ground of market manipulation. Just this week, a new proposal from WisdomTree is filed for an exchange-traded fund (ETF) with 5% exposure to bitcoin.

A Bitcoin ETF is expected to protect retail investors from paying a drastic premium to get crypto exposure. Grayscale retail investors are currently paying a 20% premium on BTC and a whopping 750% premium on ETH products.

Moreover, it means investors won’t have to get a wallet or go through a miner. An ETF would broaden the scope of potential Bitcoin investors which could serve as a hedge during volatility in the equity market.

“It would broaden the breadth of investors in BTC. This is important because some investors view Bitcoin as a safe haven when equity markets become volatile and/or move into a bear market environment. A Bitcoin ETF would be an easy and inexpensive way to hedge various market conditions,” Richard Keary, the founder of Global ETF Advisors LLC, told OKEx.

Galaxy Digital CEO Mike Novogratz also shared a hope over a possible Bitcoin ETF approval in the future if we get a crypto-friendly chairman or chairwoman.

There is even a possibility that SEC commissioner Hester Peirce aka ‘Crypto Mom’ may also move up the ranks to fill the position. The moniker ‘Crypto Mom’ came after she dissented on the SEC’s decision to reject a Bitcoin ETF application.

Just this month, Peirce was tapped for a second term that will last through 2025. She has been one of the most prominent crypto advocates who proposed a safe harbor for crypto startups looking to issue tokens.

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Author: AnTy

When the US Declared Owning Gold Illegal & Why Bitcoin’s the Way to ‘Seize your Freedom’

On May 1, 1933, US President Franklin D. Roosevelt outlawed gold. He declared Americans withdrawing their gold and currency from the banking system a “national emergency” and ordered banks to close to prevent the export and hoarding of gold or currency.

These steps were taken in response to Roosevelt’s promise to end the Great Depression which drew national employment up to 25% and gutted the economy which began with the 1929 stock market crash.

But he couldn’t print enough money to tackle the situation, like today. The Federal Reserve Act of 1924 limited the amount of money that can be printed by the government as all paper money had to be backed by 40% of gold.

As such he declared a national emergency but even that couldn’t prevent runs on banks and gold drain. By issuing Executive Order 6102, Roosevelt made gold ownership illegal and punishable up to ten years in prison on noncompliance.

But the Great Depression didn’t end and in 1937 the stock market collapsed by 90% and unemployment further soared.

The US government then removed the gold standard in 1971, the last remaining restraint on federal deficits.

The ban on owning gold wasn’t lifted until 1974.

The result of removing the gold standard was deficit mounting while the purchasing power of the US dollar continued to decline. A dollar in 1913 has the same buying power as $26 in 2020.

As for the current outlook, several US presidential candidates have said that “we can always print more money” as we have been seeing for the past couple of months in response to the coronavirus pandemic. This is already increasing the risk of currency debasement.

Bitcoin’s distinct advantage over gold

Historically, the government seized gold when the fiat currency became utterly devalued and gold is most valued.

Could it happen again? Given the fact we may be facing another financial crisis, “Yes, The U.S Government Can Still Confiscate Gold” according to GoldTelegraph. Maybe not in the near future but it could very well happen in the long term.

Pointing out how it has already happened in 1933, Dan Held, Director of Business Development at crypto exchange Kraken said, “Seize your freedom. Buy Bitcoin.”

The last quarter also revealed the physical delivery shortcoming of gold. Also, while “Bitcoin markets have been relatively efficient amid recent macroeconomic turmoil (…) global gold markets that have been dislocated for the duration of a few weeks,” observed Coinbase in its latest report.

Although both are scarce and globally accessible units of value, bitcoin doesn’t rely on fragile physical supply chains like gold. As a result, recently there have been severe shortages of gold coins and bars.

Coronavirus lockdown disrupted gold refineries, miners, and supply chains but Bitcoins protocol continues to function as designed and this halving will make Bitcoin about as scarce as gold which is already teleportable.

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Author: AnTy

Bitcoin Is ‘Trading’ Like a Risk-On Asset But Gold’s Also Feeling the Selling Pressure

  • Bitcoin, oil, overseas equities, Treasury yields plunging
  • US President Donald Trump promises fell short of what investors were hoping
  • Gold also feeling the pinch from the fall in financial markets

Bitcoin started the day at a deeply red note, tanking to $5,713, a level last seen in May 2019. Overall the crypto market lost more than $50 billion, as altcoins followed bitcoin down.

The rout deepened on Thursday for the stock market as well as S&P 500 opened the market at 6.6% losses and the Dow Jones Industrial Average plunged 1,700 points.

CME Group meanwhile is closing its Chicago trading floor on Friday “at the close of business,” as a precaution due to the coronavirus.

Coronavirus also led the National Basketball Association to suspend its season indefinitely after Utah Jazz players tested positive for the new virus. Academy Award-winning actor Tom Hanks and his wife Rita Wilson also tested positive for the coronavirus.

Investors’ expectations not met

From bitcoin, oil, overseas equities to Treasury yields everything plunged today after the World Health Organization declared Coronavirus a “pandemic”. Coronavirus (Covid-19) has infected 126,000 people globally while the US death toll was at 38 early Thursday with over 1,310 confirmed cases.

On Wednesday, US President Donald Trump restricted travel from Europe to the US for 30 days starting Friday. Trump pledged to provide financial aid and promised liquidity and capital but offered few details.

“Donald Trump’s public address fell short of what investors were hoping for,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Today, European Central Bank decided not to cut interest rates despite the market expectations for a 10 basis point cut to stimulate the euro economy amid fears that a recession is about to hit the region. Both the Bank of England and the Federal Reserve cut rates over the last week.

Though the rates weren’t cut, the central bank did expand its asset purchase program by 120 billion euros ($135 billion) and announced measures to support bank lending.

Investors looking to de-risk

Gold, on the other hand, rose on worries about the economic impact of the coronavirus. Spot gold rose 0.5% to $1,642.46 per ounce, but down from the 7-year high $1,702 hit on Monday.

However, on the flip side, traders are selling gold to fund margin calls which are capping the yellow metal’s gains. Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade said,

“Gold is now feeling the pinch from the fall in financial markets and travel ban. So, investors will keep money out of the markets for some time or book profits from the high levels, because of which we’ve seen some selling pressure in gold.”

Bitcoin meanwhile continues to follow the stock market which indicates the cryptocurrency is a risk-on asset.

“Bitcoin is trading like a risk-on asset. Not a safe haven, but the exact opposite,” said economist and trader Alex Kruger. However, the trader explained that the flagship cryptocurrency is trading like a risk-on asset and not being one as “investors are now looking to de-risk.”

However, Gabor Gurbacs, a digital asset strategist at VanEck maintains that both bitcoin and bullion are “safe-haven competitors against negative yielding government debt.”

The recently turned negative-yielding government bonds are relatively new, and “the next decade may redefine fundamental investment axioms about safe-haven assets.”

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Author: AnTy

Will Trump’s Stimulus Package Include BTC Investments As Part Of The Tax-Incentives?

One of the senior officials for President Donald Trump came with the proposal of a new economic package that stimulates people to make tax-free investments, Bitcoin (BTC) included.

It seems that the President’s administration is seriously taking new tax incentives into consideration, incentives meant to give the stock market a boost by allowing Americans to buy shares, stocks and cryptocurrencies like Bitcoin.

Tax-Free Household Income for Employees

According to what a number of sources have told on Friday to CNBC, the new proposal wants to make a part of the household income tax-free so that people invest outside a traditional 401 (k) plan that allows employees to divert a sum from their salary towards long-term investments. Larry Kudlow, President Trump’s senior adviser and the National Economic Council director, said the approach is focused on developing tax-free savings accounts, so the capital gains wouldn’t be taxed.

The Tax-Free Proposal Would Benefit Crypto Investors

Many who have invested in cryptocurrencies have been worried about tax liability, so the investment plan that wants to make a part of the income tax-free would greatly help them. As what sources told CNBC, in a household that gets $200,000 as income per year, $10,000 would be invested in the tax-free scheme. The proposals to cut taxes are to be formally announced in September and regarded as a way for President Trump to stand out from the crowd, especially when compared with his Democratic rivals.

Americans Are Investing in the Stock Market More than Ever

The White House has these policies through which it wants to accelerate the rise of the owning stocks trend. Last year, 55% of all Americans, which is a record percentage and the greatest number since the Great Depression, were playing the stock market. However, since the US House of Representatives is currently in the Democrats’ hands, the Trump administration’s tax legislation is very likely not to pass, at least not in the near future.

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Author: Oana Ularu

China Going Crazy With Blockchain, Big Brands Joining in While Projects See A Record 110% Growth

  • After President Xi Jinping’s blockchain promotion in October, China saw a growth of 110% in blockchain projects
  • As of Oct. 2019, China filed more than 12,900 blockchain patent applications
  • Baidu, Tencent, and Alibaba’s Ant Financial leveraging blockchain technology as well
  • Crypto analyst “expecting more and more to pop up” which are “the true bitcoin trend driver”

China’s “Blockchain not Bitcoin” narrative has been known for a long time and going strong as ever. In October, President Xi Jinping himself emphasized the country to “take the leading position” in blockchain technology and “seize the opportunity.”

This promotion by the President of the country himself certainly elicited expected results. As per the local report, in November, out of the total 86 new blockchain projects, 57 were from China. This has been an increase of 110% from the previous month.

Out of these 57, 28 projects are initiated by the government departments across China focused on electronic certificates, tax, and justice. The projects in the financial sectors focused on cross-border financial services, supply chain finance, and credit data sharing.

China was followed by the US and Japan with nine and four projects respectively. Australia, Singapore, and Thailand followed cosplay behind with each having two projects.

“China has gone more crazy for blockchain than the west was in early 2018,” is what popular crypto analyst, Crypto Loomdart has to say about China’s development.

Blockchain Patents from China Flowing In

As per the data provided by the World Intellectual Property Organization (WIPO), China also filed more than 12,900 blockchain patent applications as of October 2019, which is 53.6% of the world’s total patent applications.

This is, however, just the beginning as another report forecasts that banks will play an important role in blockchain investment in the next two years. The revenue from the sector is also expected to see much growth.

Baidu Launches Public Beta of “Xuperchain”

In the latest news, the Chinese Internet giant, Baidu has launched the public beta for its “Xuperchain.” Users can pay as low as 1 Chinese yuan (about $0.14) to deploy an application on this open-network blockchain until March.

Run by a series of masternodes, the network makes use of parallel chain technology to simplify the smart contract processing.

The network now has over 3.5 million users and processes 450 million transactions. The company emphasizes that it meets China’s regulatory requirements.

True Bitcoin Trend Driver

Baidu however, according to Dovey Wan, Founding Partner of Primitive Crypto is “way behind“ and so not worth paying attention to.

She explains that while Tencent/WeChat is working on a national invoice and taxation system, Alibaba’s Ant Financial is working on a commodity trading platform.

Formerly known as Alipay, back in Nov. Ant Financial said it will be releasing its consortium network around February 2020. Bluemountain Labs, a Sichuan-based blockchain specialized fund wrote on twitter Today,

Crypto Loomdart however is “expecting more and more to pop up” which he says “is the true bitcoin trend driver.”

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Author: AnTy

ECB Pres: Facebook’s Social Media Data Dominance Mixed With Libra’s Stablecoin Could Create Issues

Christine Lagarde, the newly named European Central Bank’s (ECB) president, said she’s concerned Facebook is going to use its social media platform for promoting the Libra and eliminating any competition.

She expressed this in a letter she sent yesterday in a response to EU lawmakers, a letter in which she highlighted the fact that regulators in the stablecoin market may be worried about competition and that Facebook is unfairly advantaged because it can use its own social media platform in order to promote Libra. Lagarde wrote,

“If the entities that govern stablecoin arrangements control large digital platforms, they could impact the level playing field by promoting the use of their own solutions, with possible lock-in effects, and/or blocking other service providers or payment methods from their platforms.”

Lagarde Thinks Libra Shouldn’t Operate Until Risks Associated with It Have Been Assessed

In the same letter, Christine Lagarde said stablecoins like Libra shouldn’t operate if the regulators haven’t assessed the risks associated with them. She also pinpointed how the term “stablecoin” can be confusing and misleading, as while operators promise the store of their values to be stable, prices still depend on the underlying assets and governance.

Lagarde Was Named the ECB President in October

After being the managing director and chair of the International Monetary Fund (IMF), Lagarde was made the president of ECB. It’s not the first time she has talked about the crypto space, as she previously had discussed how central bankers should issue digital currencies and has also suggested blockchain technology measures for regulators to identify the financial illegal activities happening and the criminals behind them.

According to a Reuters report from last week, she thinks ECB should be prepared for banks to release central bank digital currencies (CBDCs). Steven Mnuchin, the US Treasury Secretary, has earlier this month said he’s okay with Facebook launching a digital currency as long as their currency isn’t used to finance terrorist groups.

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Author: Oana Ularu

President of Iran Proposes Cryptocurrency To Muslim Nations to Fight Economic Sanctions

Hassan Rouhani, the President of Iran, stated Muslim regions creating a cryptocurrency could be the best alternative to defeat the US dollar’s dominance.

He called the economic sanctions of US, tools used to dominate and bully other nations. This comes after last month, BRICS countries have proposed cryptocurrency in order to settle payment transactions in the group. The BRICS countries are Brazil, Russia, India, China, and South Africa.

Rouhani Believes Muslim Regions Should Save themselves from the US Domination

On Thursday, President Rouhani attended an event in Malaysia and expressed his previously mentioned proposition. He also thinks the Muslim world should do something so that it’s no longer dominated by the US and its financial regime. The US is known to have imposed some economic, military, trade and even scientific sanctions on Iran ever since 1979. The economic sanctions were called by Rouhani “main tools of domineering hegemony and bullying” other countries.

Some Other Leaders Present at the Summit Agreed with Rouhani

The summit hosted other leaders too. These were from Qatar, Malaysia and Turkey. The Prime Minister of Malaysia, Mahathir Bin Mohamad, agreed with President Rouhani and said that using the US dollar brings sanctions that stay in the way of countries’ economic development. He continued by adding that the nations present at the summit could very much use a common currency. President Erdogan, Turkey’s leader, thinks Muslim countries should be funded by Islam. He even suggested the development of a working group to discuss details on this matter.

BRICS Nations Determined to Create Their Own Cryptocurrency

As said before, ever since last month, BRICS nations are seriously considering having a cryptocurrency for payment transactions that take place in their group. The Russian Direct Investment Fund’s CEO, Kirill Dmitriev, mentioned last month that the US dollar share in foreign trade settlements went down 42% over the previous 5 years.

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Author: Oana Ularu