US Bank Regulators to Roll Out Uniform Rules for Crypto & FinTech Firms; Streamlining Licensing

  • In efforts to ease the regulatory process for payment services and crypto firms, the United States is set to introduce a unified set of regulations that will be used in about 48 states.

As per a press statement shared with Bitcoin Exchange Guide, money services businesses based in the United States, composed of crypto firms, will in the near future enjoy easy regulatory processes. The press statement explains that the Conference of State Bank Supervisors (CSBS) is set to launch a group of state regulators which will oversee all the licensing work.

CSBS will bring together 48 state regulators who have agreed to come up with a unitary set of supervisory rules. Until today, crypto-based firms as well as payment service companies were forced to adhere to numerous individual state regulations.

About 78 firms will benefit from the fresh simplified format and according to an official at CSBS, these companies move more than $1 trillion per year combined. The enactment of the unified state regulations will help ease operations across many states.

John Ryan, CSBS’s CEO, stated that the new initiative will come with numerous opportunities which will help businesses operating in the country to expand their services. Ryan also quipped that the new model will work safely just like in the old regime.

He explained that the states will not be giving up their authority but will realize efficiencies through sharing of information. Ryan also explained that although states will be sharing information, every state has the right to conduct and independent examination when the regulators deem it necessary.

The new initiative comes after several complaints were filed by crypto and fintech firms as they try to get a solution on having a state-by-state supervisory regime that delayed the licensing process. CSBS embarked on testing various approaches to determine what could work well in efforts to come up with a lasting solution. The current unified approach led to promising results which culminated in the establishment of a pilot initiative last year.

Western Union’s Rosemary Gallagher whose firm participated in the pilot program praised the initiative saying it will lead to a faster licensing process.

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Author: Joseph Kibe

Binance UK Joins the CryptoUK Self-Regulatory Association Ahead of Its Expected Launch

Binance U.K has joined CryptoUK, a self-regulatory trade association, as it prepares to launch its trading services in the United Kingdom. The exchange’s U.K subsidiary broke this news on Twitter, noting that they are joining the association as an executive member.

This milestone will see Binance U.K operate alongside the likes of Coinbase, Ripple, CryptoCompare, eToro, and CoinShares, who are also part of the CryptoUK executive committee.

Started back in 2018, the CryptoUK initiative came about as an avenue to accelerate crypto growth in the U.K through self-regulation. Some of the issues that the association advocates for include the development of best practices in crypto as well as sustainable growth. On this front, CryptoUK operates in liaison with stakeholders, not limited to financial regulators.

Currently, they are focused on giving feedback to Her Majesty’s Treasury, which recently inquired the public about crypto asset promotions. In addition, the association is set to play a contributing role in the U.K Cryptoasset Task Force stablecoin consultation, which is slated for late 2020. Ian Taylor, the chairman of CryptoUK, has since welcomed Binance U.K to advance the association’s course,

“Binance.UK will bring significant local and global expertise to our Executive Committee and initiatives. We look forward to working with them to help develop a supportive regulatory framework for cryptoasset businesses and customers in the U.K.”

This latest move by Binance U.K solidifies an entry position into the British market following the acquisition of EddieUK, which now operates as Binance Markets Limited. Notably, the firm was already regulated by U.K’s Financial Conduct Authority (FCA) hence a smooth transition that would have been otherwise cumbersome, given regulatory hurdles. Binance U.K head, Teana Baker-Taylor, acknowledged the additional value in joining a self-regulatory body,

“Self-regulating bodies play a key role in developing […] best practices, as well as building consumer confidence. Associations like CryptoUK help to facilitate meaningful discussion and education with policy makers, which enables the development of more informed policies that are more effective in supporting both the industry and consumers.”

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Author: Edwin Munyui

BlockFi Taps CF Benchmarks’ Crypto Pricing Indexes for its Lending Products

BlockFi, a financial services firm focusing on crypto products, has partnered with CF Benchmarks, which will now provide them with ‘independent pricing and valuation’ of their clients’ underlying digital assets. available comes barely a week since BlockFi raised $50 million in a Series C funding, increasing the company’s prospects of scaling crypto adoption in both retail and institutional markets.

According to the press release shared with BEG, the partnership will enable BlockFi’s clientele to integrate better asset allocation and risk management strategies towards their crypto lending deposits and collateral. Consequently, BlockFi is optimistic that its partnership with CF Benchmarks will enable investors to realize the full value of their investments given embedded performance measures.

Notably, CF Benchmarks are regulated by U.K’s Financial Conduct Authority (FCA) hence an additional value in terms of compliance and trustworthiness. The firm’s benchmark indexes for digital assets have so far been used to value over $200 billion worth of crypto derivatives, listed by Kraken Futures and CME Group. BlockFi CEO, Zac Prince, was keen to highlight these competitive advantages given their goal to scale crypto adoption,

“CF Benchmarks has set the gold standard for crypto price indexes, and these credible and regulated price sources are imperative to the acceleration and support of the rapid crypto adoption we’re seeing from institutional and retail investors worldwide.”

This CF Benchmarks hailed ‘independent pricing approach’ leverages transparent governance and public methodologies to generate indexes for tracking and valuing crypto assets. According to the company’s CEO, Sui Chung, the structure of their crypto benchmark indexes is unique in that,

“We use tried and trusted methods from traditional finance combined with crypto-specific concepts while providing the utmost transparency through published methodologies, policies, governance, and oversight.”

Chung also highlighted that they are proud to be working with an industry leader like BlockFi, which has now identified the value proposition in putting licensed and robust crypto indexes to use.

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Author: Edwin Munyui

New Payments Platform Australia (NPPA) Sues Ripple for ‘PayID’ Trademark

An Australian financial services firm, known as New Payments Platform Australia (NPPA), has sued Ripple Labs over a trademark infringement allegation that involves the PayID brand.

The lawsuit, which was filed last week in a federal court in New South Wales, alleges that Ripple Labs infringed on Australia’s Trademarks Act of 1995 as well as the country’s consumer law for the usage of the PayID trademark brand.

NPPA is a consortium that was founded by 13 banks, consisting of the Reserve Bank of Australia, Citi, ING, ANZ, and HSBC. The firm controls a remittance network within Australia, allowing for real-time payments among customers from various banks.

NPPA states that it launched the PayID brand in February 2018 and used about AU$3.3 million for an aggressive advertising campaign to make the platform mainstream. More than 90 small and large Australian banks, including other financial institutions, have so far joined the platform.

Adrian Lovney, NPPA’s CEO, states that he found out that Ripple, in June, introduced a similar PayID branded platform in Australia in line with the giant payments Open Payments Coalition and has partnered with about 40 companies across the world.

The court paper also alleges that 3 of the 40 partners within Ripple’s OTC are located in Australia, including BTC Markets, FlashFX, and Independent Reserve.

Lovney alleges that there is evidence to suggest that the three Australian firms wrongly believed that there was a connection between the services provided by the NPPA and those offered by Ripple, as per the PayID trademark. The lawsuit explains:

“PayID is the brand, name, and trademark used by NPPA to identify both the NPP’s Addressing Service and the account proxies/aliases that form part of the Addressing Service.”

According to NPPA, about 5 million PayIDs have so far been registered, which forms a crucial part of Australia’s NPP, a platform designed and managed by NPPA.

The court has already given NPPA the greenlight to serve Ripple Labs a notice outside of Australia.

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Author: Joseph Kibe

Charles Schwab-backed Ethereum App Alchemy Opens for Public

  • Blockchain startup Alchemy is opening its services to any developer or company that wants to build smart contract-based projects.

Founded in 2017 by Nikil Viswanathan and Joe Lau, Alchemy powers 70% of the top applications on Ethereum and has been operating in private mode until now. The company has investors like Coinbase, Charles Schwab, Jay Z, Will Smith, Duncan Niederauer, John Hennessy, Jerry Yang, and Ruchi Sanghvi.

“We’re all here because we believe blockchain will be as powerful as the internet,” Viswanathan told Bloomberg in an interview.

Alchemy boasts 4 million users worldwide and processes $7.8 billion a year.

The San Francisco-based firm is helping the new business model, Decentralized Finance (DeFi) build. Already, the likes of stablecoin and crypto loan service MakerDAO, collectible service CryptoKitties, prediction market Augur, and non-fungible token platform OpenSea are using Alchemy to run their operations.

“If we can make development easier, then more apps will come online, and crypto will grow,” said Viswanathan.

The company is also considering going public in the future.

Both the founders are big fans of Bitcoin, but Ethereum provided them with a new set of possibilities. “The real moment for us was Ethereum,” Viswanathan said. “We saw that and said, ‘oh my god, that’s the future.’” But said currently the market doesn’t have the tools instead just picks and shovels to build skyscrapers in Ethereum.

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Author: AnTy

Crypto Wallet, BitGo, Adds Staking and Custodial Services for Tezos Native Token ‘XTZ’

The California-based crypto custodian, BitGo, has added staking and custodial services for the XTZ token, having confirmed this progress on July 24. XTX, which is the native token for Tezos blockchain, joins other digital assets such as DASH and ALGO, which had already been onboarded by BitGo.

All of its tokens are based on a proof-of-stake consensus, which allows contributors to earn by lending their resources for network support in functions such as validating the blocks. The XTZ addition on BitGo will see prospects who stake it within BitGo’s hot and cold wallets, earn up to 6% in annual returns.

With only a few months in the staking arena, BitGo has made significant progress with the XTZ $2.4 billion market cap expected to add on the custodian’s weight in this niche. It has since confirmed that more Tezos blockchain-based tokens will be integrated within its ecosystem in the future.

BitGo Shining in 2020

The addition of XTZ is only but a minor to up to BitGo’s milestones this year. Towards the end of May, the firm launched a brokerage service dubbed ‘BitGo Prime’ whose niche is institutional investors. It has also extended it’s crypto custodial services to India, having acquired the country’s largest exchange ‘COINDCX’ as one of their clients.

Another highlight is the compliance of the FATF Travel Rule, where BitGo is already coming up with industry-standard solutions for sharing senders’ information. On this end, BitGo extended its API’s its customers to append their data as stipulated by the FATF guidelines in recommendation 16.

It also upgraded the API’s to be compatible with the IVMS101, a universal language that has been developed by VASP providers for seamless information sharing regardless of the operational protocol.

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Author: Edwin Munyui

Binance Partners With CM-Equity To Expand Its Market Reach In Germany And Europe

  • Binance’s latest partnership set to introduce its trading services and crypto asset management to clients in Germany and Europe.

In an announcement on Friday, Binance, the largest crypto exchange in daily volumes traded, announced its partnership to a German investment firm, CM-Equity, to provide crypto brokerage and asset management services in Europe.

Cryptocurrency investors and traders within Europe and Germany will now be able to operate proprietary trading and brokerage services ON Binance. CM-Equity is a BaFin regulated investment firm that opens up a regulation-compliant gateway for Europeans to trade crypto assets and associated derivatives on a highly secure and liquid platform.

Binance aims to penetrate the European market in the preparedness of their upcoming VISA enabled debit cards set to be launched later this year. On the partnership, Changpeng Zhao ‘CZ’ said the two firms aim to “grow the digital assets industry in a sustainable way” as they expand their crypto services to global clients.

He further said,

“By joining forces with CM-Equity, Binance will be able to broaden our services in Europe while ensuring compliance with local regulations.”

CM-Equity was launched in 2020, growing into a fully compliant investment bank and has gained its license from the German Financial Markets Authority, BaFin. The German financial regulator launched its guidelines on foreign crypto custodians and crypto firms offering services in the country earlier in the year.

The partnership with one of the biggest crypto exchanges opens a new world of possibilities, Michael Kott, CEO of CM-Equity, He concluded,

“Our fully licensed digital assets platform will benefit from the best liquidity and frictionless service offered by Binance.”

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Author: Lujan Odera

Changes to NYDFS BitLicense Have Been ‘Beyond Positive;’ NY Hopes to Become Tech Hub

New York Department of Financial Services (NYDFS) superintendent, Linda Lacewell, has said that crypto-based firms have reacted positively to the recently enacted changes on the Bitlicense.

Speaking during the Global Webinar Series on July 14, Lacewell noted that the new changes seem to have been well-received despite a few still critiquing the regulator. Earlier on, NYDFS suggested modifications to make it easier to acquire the Big Apple crypto license by introducing new provisions such as self-certification and a conditional license attributed to partnerships with operating entities.

Lacewell went on to note that interested licensees are pursuing additional approvals to scale their crypto businesses within New York:

“We’ve even had some licensees tell us that they’re very excited and interested in pursuing additional licensing with other potential parties that are all partners in the space.”

This success has been part of a collaborative effort between the NYDFS and stakeholders, whether licensed or unlicensed. Lacewell was keen to acknowledge this partnership, adding that she was not surprised that it is gradually paying off.

Back when she took office last year, Lacewell and the NYDFS had a considerable backlog of Bitlicense applications, including Bitstamp’s, which was in the queue for almost four years. This has, however, taken a different turn after Lacewell appointed personnel to focus on Bitlicense applications specifically. Since then, six entities have been granted a Bitlicense approval.

New York Gradually Turning to a Crypto Hub

Despite its corporate status in America and globally, New York was a bit hesitant to accept digital currencies. At some point, firms had to relocate shops following multiple crackdowns by the NYDFS.

This is now taking a different turn after the regulator’s latest moves signal the will to forge a definitive path for crypto innovators. According to Lacewell, this process is essential in the prevention of bad actors leveraging the ambiguity to commit financial crimes. That said, Lacewell is optimistic that the new NYDFS outlook towards crypto activity will attract more stakeholders in the long-run:

“We want innovators right here in New York, which has been the birthplace of so much invention and ingenuity, historically, and has always set the standard, not just for the rest of the country but the world. That’s what it means to be the birthplace of immigration because change agents come here and we want you here.”

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Author: Edwin Munyui

India’s Tech Giant, TSC, to Launch ‘Quartz’ Crypto Trading Solution For Institutions

Tata Consultancy Services (TCS), a subsidiary of India’s largest tech firm, Tata, announced the launch of a crypto solution enabling traditional financial institutions to offer digital asset services to customers.

According to a spokesperson at the firm, the new solution, dubbed “Quartz Smart Solution for Crypto Services,” will offer the best security services and compliance structure to allow seamless cryptocurrency trading. According to a press release on TCS official blog, the Quartz solution is explained as

“a next-generation, digitally-powered offering for banks and investment firms to provide secure and seamless cryptocurrency trading to their clientele.”

The solution offers an array of features to financial institutions and banks, including support for multiple cryptos, a link to fiat currency exchange, and a digital asset transfer platform.

The project is the brainchild of Quartz, a startup incubated by TSC, which builds decentralized ledger solutions to traditional finance problems. The smart solution aims at providing the “best-in-class hardware security module” to beef up security and verification of transactions.

The platform integrates multi-signature feature wallets and provides the infrastructure to build secure OTC exchange desks. Finally, a close audit and blockchain forensic checks ensure that transactions made on the Smart Solution for the Crypto platform are appropriately verified and authenticated.

Crypto is spreading into the traditional finance world with hedge funds and investment institutions taking the risk and placing big bets in the industry. R Vivekanand, Global Head, Quartz, TCS concurs on this analogy stating his company is ready to take on the challenge of providing these services.

“We are excited to offer them our robust, secure, and scalable solution for trading, storing, and transfer of these assets,” Vivekanand said.

“We believe Quartz is well ahead of the curve in providing such a solution that allows customers to transact in multiple cryptocurrencies and digital assets, backed by best-in-class security features.”

India is taking a step forward in blockchain, and the Supreme Court lifted digital asset development after the recent blanket ban on crypto by the Royal Bank of India (RBI).

Throughout 2019, TCS announced a number of development strategies and projects in the blockchain arena, including Quartz integration of RippleNET allowing banks and financial institutions to transfer funds freely; and the security settlement platform to enable cross border transfers.

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Author: Lujan Odera

Targeting Institutional Investors: SBI Holdings Is Buying a Minority Stake in B2C2 Exchange

A unit of Japanese financial conglomerate SBI Holdings, SBI Financial Services is buying a minority stake in London-based crypto market maker B2C2 for $30 million.

This is yet another example of situational-focused crypto players tying up with the incumbent institutions to offer additional services to their clients. Meanwhile, SBI will be getting a new source of revenue, “as a recession has hit their core income stream of local retail traders,” said Reuters.

B2C2 will be the leading liquidity provider of SBI as the latter expands its crypto offerings to millions of its existing customers. On the other hand, the digital asset trading firm will benefit from SBI’s distribution network and financial firepower.

SBI’s balance sheet will complement B2C2’s asset-liability framework “to deliver an execution platform that will not only be a game-changer in crypto but also positions us to expand across asset classes as we set our sights on the $20bn-a-year prime brokerage market,” said Max Boonen, founder of B2C2.

On-Ramp for Institutional Investment

In 2016, B2C2 launched the first crypto-native single dealer platform. Currently, it provides liquidity to banks, exchanges, and hedge funds.

The platform already has a license to operate in Japan, and last year, the firm launched the first OTC streaming price feed and is authorized and regulated by the UK’s Financial Conduct Authority.

SBI meanwhile is launching a fully automated facility, an electronic prime brokerage built upon its single dealer platform, to provide competitive two-way prices in the funding market. This capability will expand B2C2’s existing secured financing operation, already lending hundreds of millions of dollars.

“We expect a lot of synergies with B2C2, a firm which has a large number of clients globally and offers abundant liquidity, excellent price competitiveness, and a diverse suite of products for their customers,” said Yoshitaka Kitao, President and CEO of SBI Holdings.

“We will work to develop innovative new crypto products and deepen synergies across our group of companies.”

Competition is Heating Up

Prime brokers provide services to hedge funds and active trading firms, which is a growing trend in the crypto industry.

Earlier this month, Bakkt partnered up with Mike Novogratz’s Galaxy Digital to launch a “white-glove service” for “multi-billion-dollar” asset managers looking to buy and store bitcoin.

Last month, Genesis Capital acquired the London-based custodian, Volt, to join the likes of identity Digital Assets and BitGo and build the “preeminent prime brokerage in the digital currency ecosystem.”

A week after that, Coinbase announced that it is looking to acquire Tagomi, a crypto prime brokerage platform. The deal, however, hasn’t been closed yet and is subject to regulatory approvals.

The crypto industry is fast building the infrastructure for the institutional investors who are currently driving the bitcoin market.

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Author: AnTy