Indian Government Looks to Ban Cryptocurrency Trading With New Law

India is not new when it comes to harsh and unfriendly cryptocurrency laws. Now, Bloomberg reports that the country is set to introduce a new law which will ban cryptocurrency trading within its borders.

Citing anonymous sources, the report states that India’s federal cabinet is set to discuss the bill prior to being sent to the parliament.

The report states that the Indian government will continue encouraging and supporting the growth of blockchain technology but will discourage crypto trading.

In 2018, Indian central bank instituted a ban on all crypto transactions following numerous cases of frauds prior to the sudden decision to ban about 80% of the country’s currency by Prime Minister Narendra Modi. However, the decision was rescinded in March this year after a successful filing of a suit in the Supreme Court by various crypto-based firms operating in the country.

The lifting of the ban saw almost a 450% increase in crypto trading in just two months from March. Paxful, a Bitcoin marketplace, registered a staggering 883% growth from January to May this year representing a growth from $2.2 million to about $22.1 million in revenues. Similarly, India’s largest crypto exchange WazirX registered a growth of 400% and 270% in March and April respectively.

The renewed effort to ban crypto trading comes at a time when the Indian Parliament has reopened following a prolonged break due to COVID-19 pandemic. The bill is likely to be introduced to parliament in this monsoon session which kicked off yesterday and is set to affect over 1.7 million Indians who actively trade in digital assets as well as institutions coming up with platforms to ease crypto trading.

Today’s report appears to be in tandem with June’s news where the nation’s finance ministry was reportedly urging for inter-ministerial consultations on how to ban crypto.

In the recent past, India’s federal government has been exploring possible ways of using blockchain technology to enhance service delivery in different sectors like management of land records, enhancement of pharmaceutical drugs supply chains, management of educational certificates, among others but remains adamant against crypto trading.

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Author: Joseph Kibe

Russia’s New Amendment On Crypto Laws Could See Bitcoin Miners Lose All Their Rewards

  • New reports from Russia confirm amendments in the country’s crypto laws that could ban Bitcoin (BTC) miners from receiving mining rewards.
  • The amendment is yet to be finalized, but experts argue if the law is passed, it could have a drastic impact on the overall use of crypto assets in the country.

As first reported by a Russian news outlet, Izvestia, the Ministry of Finance in Russia, is proposing an amendment to the federal law on digital financial assets (DFA) that could see Bitcoin miners receive no rewards on their efforts. According to the letter, the amendment allows Bitcoin mining using Russian infrastructure, but miners are not allowed to receive rewards in crypto.

The amendment further bans all transactions using virtual currencies in the country with three main exceptions. However, the amendment to DFA is yet to be finalized. The letter has been sent out for interdepartmental coordination and approval across different government departments.

A Closed Mining Cycle

The new amendment raises several questions on the implementation and wording of the document. As stated above, Bitcoin, Ethereum, and other crypto miners will be allowed to mine their tokens but will be stripped of its financial value as miners cannot receive BTC or ETH.

Several experts have since condemned the amendment as a “revenue loss” for the country, calling for revisions on the bill. Speaking on the issue, Dmitry Zakharov, CEO of Moscow Digital School, stated the “wording does not bode well for miners” as no other alternative has been offered on how to receive mining rewards. He added,

“Perhaps experts will try to come up with some interesting legal constructions, but all of them will be fraught with significant risks of bringing to administrative and criminal liability.”

If the amendment passes, then Russia could lose a share of its revenues, another expert on the matter said. According to Anton Babenko, partner of the Padva and Epstein law office, prohibiting receiving crypto could lead to more people not reporting their revenues, leading to tax losses.

A Leeway? Or Not?

Russia implemented a total crypto ban last year causing a public outcry that caused the parliament to shut down the ban. The latest amendments stipulate a similar ban – prohibiting any individuals, companies, or entrepreneurs from performing any transactions with virtual money. However, the amendments stipulate three exceptions to the rule – an inheritance of crypto assets, enforcement proceedings, and if a debtor goes bankrupt.

Any use of crypto in the country could lead to legal and criminal liability on the user with a 100 thousand rubles fine on individuals or five to seven years prison time and up to 1 million in fines for legal entities.

The new rules aim at tightening the use of cryptocurrencies in Russia in a bid to stop illicit items and illegal activities using Bitcoin and crypto in Russia. According to a law expert, the new amendment constitutes a “total ban on cryptocurrencies” which could have a severe impact on the countries crypto space.

The country’s policies on crypto could be a missed opportunity for the country, economist, Vladislav Ginko said earlier this month even as Russia extends its efforts in hoarding physical gold.

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Author: Lujan Odera

Phishing Attacks On Electrum Wallet Sees Over $16 Million Stolen From Unsuspecting Users

New reports show that over $500,000 worth of Bitcoin (BTC) has been siphoned from Electrum wallets – about 72 hours after a GitHub user claimed they had lost 1,400 BTC in a similar hack. Some of the funds have been traced to Binance, with the exchange blacklisting up to 70 accounts linked to the transaction IDs.

Back in February 2019, an Electrum wallet user named “KallEYE” wrote on GitHub that 0.09 BTC was missing from their wallet following an update software upgrade. Over the last year, several users also complained of a similar phishing attack, one user stating they had lost about 0.00796663 BTC to this address.

On Aug. 30, another GitHub user claimed the same address had stolen over 1,400 BTC (currently worth ~$17 million), raising brows on the bug exploiting Electrum wallets. Explaining the happenings of the hack, the user said he had not accessed the BTC since 2017 and mistakenly downloaded the old version of the Electrum wallet.

Once downloaded, the app prompted the user to update their software before withdrawing any amounts from the wallet. Once installed, the update “immediately triggered the transfer of my entire balance to a scammers address,” the user wrote on GitHub.

Another user, Cryptbtcaly, claims over 36 BTC, worth ~$500k, was stolen from their wallet two months ago, showing the rampancy of the hacks on old Electrum wallets. Investigations on the movement of the coins showed some coins moved to Binance wallets, but despite constant calls to the exchange team, much has yet to be done.

The hacker’s address shows it has received over 1,506 BTC and sent out 1,500 BTC since its first transaction in 2018.

Binance connection and response

According to data from Crystal Blockchain, a crypto transaction tracking analysis firm, a transaction worth around 5 BTC (~$60 k) can be traced back to the hacker’s wallet on Binance. The exchange responded to the 1,400 BTC hack and the specific transaction ID traced to Binance on Jan 2018.

A spokesperson from the exchange revealed that the transaction ID (TxID) is connected to 72 addresses on Binance but not a specific wallet on the exchange. The founder and CEO of Binance, Changpeng Zhao, alias CZ, said the addresses have since been blacklisted.

Notwithstanding, Electrum has opened up a phishing case with the German Police and the U.K authorities. A representative from Electrum stated,

“We (electrum developers) have reported the phishing attack to the police about a year ago. I cannot make any comments about the progress of the investigation, but it helps if victims report it independently. If you live in Germany, you should contact the cybercrime unit of the LKA Berlin.”

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Author: Lujan Odera

Fintech Unicorn, Revolut, Reveals 150% Increase In Its Crypto Holdings In 2019

  • London based fintech, Revolut, reports $140 million in losses in 2019 despite its cryptocurrency holdings growing to $123 million, a 200% increase from 2018’s holdings. The company also recorded a 2.5x boom in customer growth rate in 2019.

Revolut published its 2019 financial year report on August 10, showing a sustained growth in its cryptocurrency holdings at £93.3 million (~$122.27 million), representing a sharp 151% increase from 2018’s crypto holdings – £37.1 million (~$48.62 million).

Despite the rapid growth in customer acquisition and crypto holdings, Revolut registered over a 200% increase in losses. As of December 31, the company posted a total loss of £106.5 million (~$139.57 million) through 2019, tripling the £32.9 million (~$43.11million) published in 2018.

“We still have some way to go, but we are pleased with our performance in 2019,” Nik Storonsky, founder and CEO at Revolut, said speaking to CNBC. “We increased daily active customers by 231%, and the number of paying customers grew by 139%.”

The report states the company’s losses are mainly due to expansion and market acquisition costs incurred in 2019. As reported by BEG, the British fintech unicorn recently received a green light to operate in Australia by the ASIC, extending its reach to 24 territories, including the U.S., Russia, Canada, Japan, and New Zealand.

The company did not release the breakdown of its crypto holdings to the public with six main digital assets available on the platform – Bitcoin, Ethereum, XRP, Bitcoin Cash, Litecoin, and recently added Stellar Lumens.

They offer its users a direct platform to purchase cryptocurrencies and store them securely. However, the firm also owns its stash of cryptocurrencies, which are accounted for as “intangible assets.” The report states:

“Cryptocurrencies are recognized at fair value using the revaluation model. Accordingly, an impairment loss on an asset that was not previously re-measured is recognized in profit or loss.”

The losses recorded are further strained by the fact that revenues were up 180% to £162.7 million ($221.6 million) in 2019 as compared to £58.2 ($75.7 million) in 2018. The company also announced an increase in its cash holdings, which doubled to £2.281 billion, up from £903 million in 2018.

Revolut also states its currency exchange business is facing a blip in 2020 following the COVID-19 pandemic as traders are not as interested. However, the pandemic has had an unusual positive effect on its crypto businesses in the short term, the report further states.

The U.K. fintech firm recently partnered with Paxos in a bid to expand its crypto purchase and custody services across 49 of the 50 states in the country.

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Author: Lujan Odera

China’s OTC Crackdown Puts Bitcoin at a Discount

Last month, there were reports of thousands of cryptocurrency over-the-counter (OTC) merchants and their clients getting affected as China froze their bank accounts to prevent illegal activity. Molly Mo, who runs marketing at a digital asset management platform Hashkey Hub said,

“The crackdown on OTC in China since last month is by far the most strict and widely affected one, is caused by USDT is widely used for money laundering, the action led by the PBOC, ministry of public security, central administration of customs, CBIRC, union pay….”

Bitcoin is also trading at lower prices at the OTC desks, at a difference of $50 to $65 than the spot exchanges.

Last week she shared on Twitter that “most” of the desks have been affected by this move with the users of a reportedly popular exchange, which has over 80% of the OTC market in China also getting their cards frozen.

Moreover, there have been reports of OTC brokers getting arrested.

The move has significant implications because OTC desks are the only fiat on-and off-ramps for China-based crypto users, especially after China’s central bank banned ICOs and cut off exchange’s direct channels for fiat deposit and withdrawals in September 2017.

In June, Sun Xiaoxiao, who ran an OTC desk and was formerly with Chinese crypto wallet startup Bixin, said Chinese police are investigating on the grounds of ‘dirty money,’ with causes including Ponzi schemes, casino businesses, and telecom frauds.

Moreover, the police have been catching up on their blockchain knowledge.

Earlier this month, Chinese crypto media channel 8BTC reported China’s Merchant Bank (CMB) saying they will “actively freeze” debit and credit cards based on “their own judgment” and assessment of risk.

Last month, the China Times reported that the Bank of China, the Agricultural Bank of China, the China Construction Bank, and the Industrial and Commercial Bank of China had been freezing accounts involved in “illegal activities.” They also said they wouldn’t freeze legal crypto transactions, but some people still claimed the same.

Last week, reports came that Zhao Dong, head of the OTC and crypto lending platform RenrenBit, was taken into a police station. Zhao also owns a small percentage, apparently less than 5%, of crypto exchange Bitfinex.

RenrenBit issued a statement in which it said Zhao offered to cooperate with the investigation, and it was unrelated to the company but his side-business.

China is “both world’s largest and most idiosyncratic crypto market,” according to Matthew Graham, CEO of Sino Global Capital.

While the Chinese government is yet again cracking down on crypto as the Supreme court and police believe digital assets are widely used in drug dealings, the stock market of the country is thriving as it hit a 1.5 trillion RMB ($213 billion), a five year high.

According to a Chinese publication, multiple reforms and increased foreign capital helped pave the way for this bull market.

But according to Dovey Wan, funding partner at Primitive Crypto, Chinese A shares rallies so hard is bad news for bitcoin. She said,

“This will further suck in retail capital into equity market (both are 80% or more retail in China), so makes the crypto market even more dull.”

On the other hand, the People’s Bank of China imposed a program in Hebei province to keep large transactions in check that would require retail (from 100,000 yuan to 300,000 yuan) and business clients (exceeding 500,000 yuan ($71,000)) to pre-report large deposits and withdrawals amidst the heightened concerns over the state of its financial system.

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Author: AnTy

With Rainy Season Here, China Calls for Bitcoin Miners to Use its Cheap and Abundant power

According to recent reports, local Chinese governments are supporting bitcoin mining. Now, with the rainy season here, the extra power supply has driven its prices down to 0.20 CNY or around 3 USD cents, noted 8BTC co-founder.

Yaan, a city in Sichuan known for abundant water resources prolific bitcoin mining, last week issued government advice on “the construction of a hydropower consumption demonstration zone to support the development of the blockchain industry.”

The implementation advisories were jointly issued by the Municipal Economic and Information Bureau and the Municipal Development and Reform Commission aimed at deepening the power system reform.

The idea is to enable the companies to seize major strategic opportunities for the industry’s development and promote its healthy and orderly development. Moreover, the local government aims to promote the high-quality consumption of hydropower resources and cultivate new growth points for the city’s economic development.

A Blockchain Industry hub

The city, which is estimated to account for more than half of the Bitcoin network’s computing power, in its likely first public guidance to grab the “strategic opportunity of the blockchain sector” is intent on helping the companies consume the excess hydropower electricity of the area.

Although bitcoin mining is not specifically mentioned, the report from April 20th seeks to establish itself as “an impactful blockchain industry hub,” a shift from last year’s guideline which identified bitcoin mining activities as an industry that should be eliminated.

China’s Sichuan region always goes through the issue of excessive hydropower electricity being wasted during the rainy summer season, from June to August.

With abundant cheap electricity from excessive hydropower, the city is emphasizing the blockchain companies on using the power plants integrated with the state grid.

Cheap Power may Offset Halving Woes

With Bitcoin’s halving just around the corner in less than two weeks, miners aren’t really keen on investing. After recovering from the March sell-off, the price of bitcoin has been hovering around $7,700 since the weekend with the breakeven cost at $7,300.

Halving means the miner inflow will be cut in half to 900 BTC per day while the breakeven cost rising to $15,100, as per TradeBlock. The question of whether to buy new and more powerful mining equipment or not depends on the price of bitcoin post halving.

Bitcoin at its current price could force more miners, especially over-leveraged miners to shut down their operations. But more reduction in electricity prices in the next few months could help them to keep on operating with positive margins while the price goes back to profitable levels.

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Author: AnTy

Andreessen Horowitz, A16z, Seeks $450 Million In Latest Crypto Funding: Report

Reports from the Financial Times confirmed that Andreessen Horowitz, the crypto-focused investment firm, is looking to raise additional funding of close to half a billion in this new round.

The news comes at a time when the world’s economies are languishing in the Coronavirus epidemic and signals that investors are still willing to test the waters in the crypto field.

According to two unnamed sources “familiar with the matter”, Andreessen Horowitz (a16z) is looking to raise an additional $450 million in a new funding round. The report estimates that the firm will receive the amount in about a week as investors flock towards the crypto industry.

The Silicon Valley-based firm aims to expand its crypto operations and expanding its markets with this latest funding. This comes only two years after the firm secured a $300 million funding round to specialize in crypto activities and blockchain-based projects.

A16z Highly Networked in the Crypto Space

Over the years, a16z has invested in some of the top projects in the blockchain space including Coinbase, Libra, Anchorage, and Polychain Capital.

The firm led a $30 million investment round on blockchain smartphone startup – Celo – back in April 2019.

Notwithstanding, a16z also invested in Ethereum-based decentralized finance solutions such as Maker (MKR), dYdX and Compound in the past few years.

As the crypto market awaits one of its most important events – Bitcoin’s halving – the doubling down on crypto by a16z sets a bullish mood in the crypto market.

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Author: Lujan Odera

Cambodia’s CBDC Initiative, Project Bakong Payments App, Countdown Has Begun

The Phnom Penh Post reports that within the next couple or more months, Cambodia’s central bank is going to launch its own blockchain-based peer-to-peer money platform.

The system is called Project Bakong and it will be a central bank digital currency (CBDC) – backed payments app. Chea Serey, the chairman of the National Bank of Cambodia, said it’s going to be “the national payment gateway for Cambodia”. At the moment, the Bakong implementation is linked to users’ bank accounts, and it will allow the exchange between the CBDC and hard currency.

Bakong Cheaper than Debit and Credit Cards

An executive from one of the participating banks at the project said Bakong is a more convenient and cheaper alternative to debit and credit cards. It was also noted that banks are going to lose from their market share, but not in the long run.

Bakong Being Tested Since July 2019

Bakong has been undergoing tests ever since July 2019. The central bank expects it to be completely operational until this quarter ends. The system is currently supported by 11 banks, not to mention it will be rolled out in all the bank branches in the country very soon. According to a December World Economic Forum release, Bakong is looking to connect a payments economy that has been fragmented and continues to be dominated by cash.

Payments Frictions Reduced and Financial Inclusion Achieved

The National Bank of Cambodia’s new system will have merchants, commercial banks and the Cambodian people that don’t have a bank reducing payments frictions so that the country gains financial inclusion. Earlier this week, it was reported by Hard Fork that a European central banks’ raft which included the Bank of International Settlements has started to explore how CBDCs would work with international payments and how much they would help when it comes to interoperability.

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Author: Oana Ularu

Binance Denies Rumors It’s Acquiring Bankrupt Europe-Based Union Bank AG

Crypto exchange Binance said in an official announcement that the media reports claiming it’s buying bankrupt Liechtenstein-based Union Bank AG aren’t true.

This is what Wei Zhou, Binance CFO, had to say about the news:

“The reports that Binance is investing into Liechtenstein Union Bank or has applied with the Financial Market Authority to become a shareholder of the Bank are inaccurate.”

The rumors appeared earlier today when the Swiss financial news outlet Inside Paradeplatz said Union Bank AG, Binance and Financial Market Authority (FMA) of Liechtenstein representatives have met and that Binance signed a commitment with the bank.

Letter Saying the FMA Is Likely to Accept Binance as Shareholder

The Inside Paradeplatz report also cited a letter from November 19, a letter that was addressed to Union Bank AG’s shareholders and sent by the Zurich-based commercial lawyer Wolfram Kuoni. This is what the letter reads:

“The FMA is likely to accept Binance as shareholder. However, given that (Union Bank) as of now in default of the (FMA) order regarding own funds, FMA has made it clear that Binance must file to application for approval as shareholder and pay in amount of CHF 15 million [$15.17 million] to escrow account for a later capital increase by the end of November.”

Furthermore, it also adds that if the arrangement does not remain valid, FMA will withdraw the bank’s license and force it to liquidate.

Binance is Open for a Partnership with Union Bank AG and its Investors

Zhou said Binance remains open as far as a partnership with Union Bank AG and its new investors goes since it’s committed to adding reliable and safe fiat channels so that crypto is being adopted all over the world. Only earlier this week, Beijing-based blockchain data company DappReview was acquired by Binance for a sum that wasn’t disclosed to the public.

More than this, Binance bought India-based crypto exchange WazirX last month too. In September, it got the Seychelles-based platform for derivatives JEX and turned into Binance JEX for crypto future, perpetual contracts, and options, while in July, it acquired the US-based mobile wallet firm Trust Wallet, making its first acquisition.

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Author: Oana Ularu

Is Bakkt CEO Being Snubbed As Georgia Senator Due To President Trump’s Anti-Bitcoin Stance?

The Atlanta Journal-Constitution reports that President Trump wants Brian Kemp, Georgia’s governor, to appoint US House Representative Doug Colling as Senator. While Loeffler already filed her application to become Georgia’s Republican Senator on Monday, it’s believed that Kemp is the one who has to make the decision on who’s going to fill in the position. Senator Johnny Isakson needs to step down in December for health reasons.

Bitcoin More Embraced by Institutions

Loeffler is interested in becoming Georgia’s Senator while Bakkt is making incredible progress. Only earlier this month, it has broken down its own record when it comes to the number of traded contracts. On November 8th, there were 1,756 Bitcoin (BTC) futures contracts traded, while in late October, the number of contracts was 1,183. In the event in which Kemp doesn’t allow President Trump to pressure him and decides to appoint Loeffler, she will no longer be Bakkt’s CEO. Her latest achievement with the company is unveiling the “first regulated options contract for bitcoin futures”, which will happen next month. The users will be able to take a cash settlement or physical delivery with the Bakkt Bitcoin Options contract.

Bakkt Will be Present in Asia

Earlier in November, Bakkt offered its services for Bitcoin custody to all institutions under the Bakkt Warehouse service that was previously available to clients already trading Bakkt Bitcoin Futures contracts. This week, Intercontinental Exchange, which is the parent company of Bakkt, said it will launch Bitcoin futures contracts that can be settled in cash, in Asia. The product is called Bakkt Bitcoin Cash Settled Monthly Futures and is going to be ICE Futures Singapore listed.

The US Congress Needs a Crypto Advocate

The crypto world will surely welcome Loeffler’s appointment as a US Senator because this would mean the number of lawmakers who are pro-Bitcoin would increase and there would be the possibility for more friendly crypto legislation. Maybe she will convince some other members of Congress to no longer be so against Bitcoin. President Trump himself has said the crypto world is funding criminal activities, so things aren’t looking very promising at the moment. More than this, another House Representative, Brad Sherman, has called for the crypto environment to be banned. Loeffler could change minds if she’s being given the chance to hold the power.

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Author: Oana Ularu