Bank of America to Speed Up Stock Trade Settlement Using Paxos Blockchain Network

Bank of America to Speed Up Stock Trade Settlement Using Paxos Blockchain Network

Crypto firm Paxos has welcomed Bank Of America to its blockchain-based network for settling US equities.

According to Bloomberg, Bank of America has become the latest US bank to join the Paxos Network for blockchain stock settlement. The Paxos network facilitates the quick settlement of securities.

European banking giant Credit Suisse and Nomura Holdings Inc’s Instinet already use the network known as Paxos Settlement Service.

Improving Return-on-Assets for BoA

Speaking on the new development, the Bank of America’s head of financing and clearing, Kevin McCarthy, said joining the Paxos network would help improve the return-on-assets in the business, which he said has been a challenge for the bank.

Paxos Settlement Service is an alternative settlement platform to existing market infrastructure. It was launched in 2020 after receiving a no-action relief from the US Securities and Exchange Commission (SEC) in October 2019. Paxos has also applied for a clearing license with the SEC.

The CEO of Paxos, Chad Cascarilla, said his platform could threaten the Depository Trust & Clearing Corp. (DTCC), which currently dominates equity settlement. The DTCC offers a “T+2” settlement process via legacy software. The DTCC settlement takes up to two days and only offers same-day settlement for trades are recorded on or before 11 a.m.

This is unlike Paxos that settles stock trades within minutes using the blockchain. Paxos runs a permissioned version of the Ethereum blockchain.

Using Blockchain In The Stock Market

In recent times, financial firms worldwide have begun to explore how blockchain can help address inefficiencies in the financial markets. Even as the total value of stocks traded globally is pegged to be around $77.5 trillion, the complexity in stock-related transactions persists. The stock market still has problems regarding the time it takes for transactions to be approved and the operational costs.

NASDAQ is one stock exchange that has been a front-runner when it comes to adopting blockchain. The exchange already uses blockchain technology to issue and manage private securities. Most of the other exchanges are still exploring prototypes and looking into the opportunities in blockchain technology.

Banks like JP Morgan Chase have also leveraged blockchain technology to develop specialized payments systems and offer niche banking products. Since last year, JPMorgan has used the blockchain to execute intraday repurchase agreements totaling billions of dollars.

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Author: Jimmy Aki

End of the Tether Fud as Parent Company iFinex Reaches an $18.5 Million Settlement with NYAG

End of the Tether Fud as Parent Company iFinex Reaches an $18.5 Million Settlement with NYAG

The crypto market is already enjoying the news of settlement as Bitfinex and Tether notes, “there was no finding that Tether ever issued tethers without backing, or to manipulate crypto prices.”

Cryptocurrency exchange Bitfinex has reached a settlement with New York Attorney General (NYAG) Letitia James, after 2.5 years and 2.5 million pages of information, over the allegations that it hid the loss of $850 million commingled client funds.

Bitfinex didn’t admit or deny any wrongdoing, and agreed to pay $18.5 million, said the state attorney general’s office in a statement on Tuesday.

This settlement should be “viewed as a measure of our desire to put this matter behind us and focus on our business,” said Stuart Hoegner, general counsel at Bitfinex and Tether.

The crypto community celebrated the news, calling this a huge buying opportunity, and after the deep sell-off, the market is now recovering.

“A decidedly Bullish outcome to a saga that began in April 2019,” noted HXRO Labs. Given that Tether FUD has been persistent in the market through all these years, this settlement puts it to an end and legitimizes Tether by requiring transparency reports.

“This settlement is a great outcome for Tether/Bitfinex & the crypto industry at large,” noted Jake Chervinsky, general counsel at Compound Finance. “It does send a strong signal that, after so much discovery, NYAG was ready to move on,” he added.

Just last month, Bitfinex said it repaid the remaining balance of $550 million and interest on the loan that was the center of the attorney general’s allegations of fraud.

New York officials that began investigating Bitfinex in 2019 will be receiving quarterly reports on the composition of Tether’s reserves for the next two years.

Talking about the reckless and unlawful cover for financial losses, Attorney General James said Tether’s claims of being fully backed by US dollars at all times “was a lie.” She said their action against the crypto company is sending the message that they,

“Will stand up to corporate greed whether it comes out of a traditional bank, a virtual currency trading platform, or any other type of financial institution.”

The agreement between iFinex and NYAG requires both Bitfinex and Tether to discontinue any trading activity with New Yorkers, and of course, submit regular reports.

As for the transparency report, the companies have to submit mandatory reporting on core business functions, including proper segregation of corporate and client accounts, segregation of government-issued and virtual currency trading accounts by company executives, and transfers of assets between and among Bitfinex and Tether entities.

Tether is also asked to offer public disclosures of the assets backing USDT and provide greater transparency. Both Bifinex and Tether stated,

“Contrary to online speculation, after two and half years, there was no finding that Tether ever issued tethers without backing, or to manipulate crypto prices.”

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Author: AnTy

Bitmain is Back to ‘Normal Operations’ Following Jihan Wu Settlement With Micree Zhan

Bitmain is Back to ‘Normal Operations’ Following Jihan Wu Settlement With Micree Zhan

  • Bitmain releases a letter to customers affirming “business operations will resume as normal” following the change in a CEO role after Jihan Wu left his leadership role.

Over the past year, Bitmain, the world’s largest Bitcoin mining rigs producer, has struggled to complete its customers’ orders as conflicts within the top management delayed shipments. In focus, founders Micree Zhan and Jihan Wu were at the center of the feud as Wu once threatened to split its flagship mining Antminer rig’s manufacturing and supply chain processes.

However, Bitmain is finally looking to move on from the issues and “resume its normal business operations” following Wu’s departure from the CEO role, a note from the team stated. The note reads,

“Antminer is here to inform you that product delivery and sales services will not be affected by Bitmain’s internal changes.”

“Our sales policy for customers remains unchanged, and all signed contracts will continue to perform in accordance with the terms and conditions.”

Read more>> Bitmain Power Struggle: Truce is Over & Fight for Control Resumes; Bitcoin Miners Could Suffer.

Bitmain announced a halt in the supply and manufacturing processes of the Antminer rigs in 2020, leaving customers, who expected rigs in June and July, to wait until September and October delivery.

On Tuesday, the long-standing battle between two of the richest men in crypto was finally settled after Jihan Wu bought $600 million shares in Bitmain and resigned from the company. Micree Zhan will regain control of the company, after being ousted in September, with Jihan Wu leading an offshoot of Bitmain, Bitdeer, as the chairman.

Read more>> Bitmain’s Ousted Co-Founder, Micree Zhan, Proposes Share Buyback at $4B Valuation.

Despite the inner company conflicts, Bitmain remains the largest Bitcoin mining rig manufacturer and saw an increase in demand across 2020. Riot Blockchain, a mining farm, stocked up on over 11,500 bitcoin mining rigs across the year from Bitmain, boosting its hashrate over 100% during the year with a target of 2.3EH/s set for June 2021.

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Author: Lujan Odera

OKEx Expands Its Real-Time Settlement Platform to New Coin-Margined Perpetual Swaps

OKEx Expands Its Real-Time Settlement Platform to New Coin-Margined Perpetual Swaps

In an announcement this Thursday, the world-leading crypto exchange OKEx confirmed they would expand their real-time settlement platform and add new coin-margined perpetual swaps to their platform. The exchange launched a real-time settlement for all perpetual swaps, futures, and options contracts to improve its customers’ overall liquidity and trading experience.

Real-time settlements for traders started at 8:00 am UTC on Dec. 29 on the ADA/USD perpetual swap to “improve the capital efficiency and improve cross-exchange arbitrage opportunities,” a post from the exchange read at the time. OKEX has since expanded the real-time settlement feature to “ALGOUSD, ATOMUSD, and an additional 20+ coin-margined perpetual swaps, including XLM, YFI THETA”. Here is a complete list of the crypto’s, all paired with USD:

  • ALGO
  • ATOM
  • CRV
  • DASH
  • FIL
  • IOST
  • IOTA
  • KNC
  • NEO
  • ONT
  • QTUM
  • SUN
  • SUSHI
  • THETA
  • UNI
  • XLM
  • XMR
  • XTZ
  • YFI
  • YFII
  • ZEC

The real-time settlement allows users to withdraw their profits from perpetual swap contracts at any time within the day – switching from the 4.00 PM UTC deadline.

“It is a huge benefit to our traders because it opens up greater trading opportunities for them, including cross-exchange arbitrage, as they can now settle their profit in real-time across exchanges,” commented Lennix Lai, the head of financial markets at OKEx.

OKEX has recently faced challenges and huge withdrawals from its platform following a five-week-long withdrawal suspension.

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Author: Lujan Odera

Stellar Invests $3 Million in Digital Assets Settlement Network Across LATAM

Stellar Development Foundation is investing up to $3 million, paid in Lumens (XLM), in digital assets settlement network across LATAM, Settle Network.

This investment will help boost the payment tools of Settle Network that are focused around stablecoins, including fiat-to-crypto onramps, stablecoin issuance, and payment processing.

As we reported, the team of Stellar is currently working on making XLM useful globally. Denelle Dixon, the CEO and Executive Director of SDF, said,

“Settle Network is delivering on the vision and mission of Stellar, putting blockchain technology and access to finance into the hands of people that need it.”

Founded in 2018, Settle Network is a Stellar-based platform that provides digital asset settlement across LATAM and users of Argentine Peso and Brazilian Reais stablecoins.

Stablecoins have been one of the main themes in 2020, with their supply exploding. Stellar is now ready to take the help of stablecoins for “international remittances and cross-border payments.”

Besides Settle Network, SDFs Enterprise Fund has also invested in Abra, SatoshiPay, and DSTOQ. Jason Chlipala, Chief Operating Office of SDF, said,

“We created the Enterprise Fund to support inspiring businesses like Settle Network that demonstrate the value of Stellar, bring value to the Stellar ecosystem, and represent our mission.”

“We are proud of the impact this fund has made in its first year and look forward to furthering its reach in 2021.”

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Author: AnTy

SEC Proposes $5 Million Settlement in Kik’s $100 Million ICO for KIN

Kik Interactive, the embattled Canadian messaging startup, seems to have finally reached a settlement deal with the SEC regarding its illegal ICO back in 2017. Since the summer of 2019, the two parties in court have gone back and forth, with the latest ruling by a New York judge, favoring the SEC.

With barely three weeks since the ruling, the SEC has now proposed that Kik should settle with a fine of $5 million with the market watchdog. Kik’s ICO had raised a total of $100 million, intended for a crypto network dubbed ‘KIN.’ This was, however, cut short by the SEC, which sought to pursue Kik on account of issuing an illegal security.

According to the SEC’s court document, the two parties have agreed on a proposed judgment and are now seeking the court’s approval. Other than the $5 million in penalties, Kik will be required to give a 45-day notice if they want to launch another Kin token sale. The document states,

“The proposed Final Judgment, if approved by the Court, would permanently enjoin Kik from committing future violations of Section 5, according to Section 20(b) of the Securities Act of 1933, 15 U.S.C. § 77t(b); impose a conduct-based injunction, as outlined in the proposed Final Judgment, under Section 21(d)(5) of the Securities Exchange Act of 1934, 15 U.S.C. § 78u(d)(5); and require Kik to pay a penalty of $5 million, under Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d). The proposed Final Judgment would conclude this action.”

Unlike Telegram, which had a similar encounter with the SEC, Kik has not been obliged to return its investors’ funds. This means that the project’s tokenization dreams could be realized despite the SEC’s 16-month long legal battle. Notably, Kik has previously argued that its Kin token was sold based on its underlying utility instead of a speculative nature suggested by the SEC.

If the court approved the proposed judgment, Kik would only settle for $5 million; this amount is equivalent to what they collected during their fundraising initiative dubbed ‘Defend Crypto’ Campaign. Other ‘illegal’ ICOs like EOS and Telegram have had it a bit rougher, with each settling at $24 million and $18 million, respectively.

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Author: Edwin Munyui

Tezos (XTZ) Class-Action Securities Lawsuit for the $232M ICO Sees $25M Settlement Pending

A class-action lawsuit against Tezos during its 2017 ICO may end in a $25 million settlement. The lawsuit was filed against Tezos for the illegal raising of over $232 million worth of Ether during its ICO.

Filed back in November 2017, the lawsuit by Block & Leviton on behalf of investors that participated in the ICO, claimed that Tezos violated several security laws. The Tezos Foundation also announced its settlement proposal on Mar 20th and stands strong on the belief that the lawsuit itself is baseless.

Block & Leviton informed all investors that participated in the Tezos ICO between July 1, 2017, and July 13, 2017, that they might be eligible for a share of the $25 million settlement offer.

ICO investors were asked to submit the claim of their settlement via [www.TezosFoundationSettlement.com]. Investors have until Aug 6th to object to the settlement offer and until October 16th to submit their claims.

The lawsuit accuses Tezos of being an unregistered security offering and might be the reason why Tezos has decided to settle rather than prolong the case. If Tezos is found to be an unregistered security, it may cost them up to $150 million in direct fines.

United States District Judge Richard Seeborg approved the settlement offer proposed by Tezos on April 30th. In addition, during the final hearing – scheduled for Aug 27th – will determine the legal procedure for initiating the settlement to investors. The court statement approving the settlement offer read:

“The court will likely be able to approve the settlement, subject to further consideration at the Settlement Hearing.”

Looking at recent cases like Telegram and Kik ICO’s, which were deemed as unregistered security offerings. Telegram, which conducted one of the biggest ICOs back in 2017, raising billions of dollars in the process, are now unsure if they will ever be able to launch their blockchain Gram token.

Tezos, meanwhile, wants to try and avoid falling into that same legal quagmire and appears to be considering the settlement offer.

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Author: Rebecca Asseh

Major Equity Settlement Firm DTCC Launches New Blockchain And Tokenization Experiments

The major equity clearing and settlement firm, Depository Trust & Clearing Corporation (DTCC), has been experimenting with blockchain technology for over three years, has announced two new projects.

The two projects will be called ‘Ion’ and ‘Whitney’ respectively. Both aim at improving post-trade settlements in the private and public sectors through asset digitization and tokenization, respectively.

Ion will function as a proof-of-concept project: aiming to clarify the use of Distributed Ledger Technology and how it can be leveraged for the digitization of assets.

DTCC’s chief of global operations clearing agency services and client services Murray Pozmanter stated:

“Project Ion is about working with the industry to further the value proposition on accelerated settlement leveraging new capabilities such as DLT and tokenized securities, and to learn how DTCC can best deploy these technologies to deliver additional value to clients and the industry.”

Whitney, meanwhile, specifically targets private markets. Particularly those that are in need of automation but don’t have the infrastructure to do so effectively.

DTCC’s business innovation and managing director – Jennifer Peve – explained how project Whitney could greatly help private markets:

“Project Whitney presents an exciting opportunity to leverage emerging technologies and develop completely new solutions from the ground up.”

DTCC focus on blockchain has been built around ensuring stable transaction settlements via global post-trading standards. The firm is engaged with the industry, actively taking inputs and suggestions to assess the market demand. DTCC currently processes $1.7 quadrillion worth of securities transactions every year.

DTCC is continually looking for new use cases for blockchain technology within the capital market. To do so successfully, it has partnered with blockchain infrastructure providers like IBM and R3 in the past to create new decentralized solutions.

Back in 2017, it launched a proof-of-concept based credit derivative settlement project.

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Author: James W

PAX Stablecoin Issuer Paxos Settles First US Equity Trade Using Blockchain

The first blockchain-based settlement of US equities was claimed by Paxos, the New York-regulated cryptocurrency startup, Instinet, the broker dealer owned by Nomura, and Credit Suisse.

The announcement that the Paxos Settlement Service is live has been made on Wednesday. This service allows the simultaneous exchange between cash and some of the Paxos’ Ethereum US-listed equities. The Paxos Trust Company made last year the announcement about the pilot that involves Société Générale and Credit Suisse being given the approval of the US Securities and Exchange Commission (SEC).

US Equities Settling Automatically in an Outside System

At the moment, the pilot stage may be running for 24 months and allow only 7 participants to handle 100,000 trades per day. Melayna Ingram, who is a Director Securities Product at Paxos said Société Générale should be integrated and go live until this quarter ends. Ever since the Depository Trust and Clearing Corporation (DTCC) has been formed, it’s the first time for US equities to settle automatically in an outside system.

As Ingram mentioned, most of the US equities innovations from the past 20 years have been in trading market venues and trade execution. Here are her exact words about what’s going on at Paxos:

“The back office has largely stayed the same, running on mainframe codebases and involving a complex system of reconciliation which is out of step with new technology.”

Paxos Will Apply to Be Fully Registered with the SEC

Paxos said it’s looking forward to apply this year with the SEC in order to become a registered clearing agency. At the moment, such licenses are given to only 7 US companies. Paxos doesn’t use an enterprise Ethereum client such as Besu, Quorum or BlockApps. Instead, it uses a private blockchain Ethereum code-based network.

Trying to explain the Paxos Settlement Service, the Credit Suisse’s head of digital asset markets Emmanuel Aidoo said:

“Paxos Settlement Service introduces blockchain technology that’s compliant with regulations and allows us to take important strides towards evolving market structure and unlocking capital that is tied up in legacy settlement processes.”

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Author: Oana Ularu

Ripple’s Real-Time Settlement Tech Gets Recognition by US Consumer Financial Protection Bureau

Ripple (XRP), which is a real-time gross settlement system and currency exchange network known for its use in cross-border payments was recently mentioned in an official US CFPB document. Most of the content in this document was based on changes and the future of remittance markets.

This is the first time in its existence that the 3rd largest cryptocurrency, in an official US document referenced the exchange. Ripple’s tech is an enabling real-time global payments system based on the blockchain network. The firm has invested in a number of small and medium sized businesses, mostly focusing on improving computer communication and exchange of information between blockchain platforms and Decentralized finance (DeFi) space.

The Consumer Financial Protection Bureau, (CFPB) which is an independent US agency, has since suggested a more accommodative approach regarding their settlement rule. For organizations that generate a defined amount in transfers for money each year, compliance costs are to be reduced. However, the document mentions that the rise and fast adoption of digital technologies offered by cross-border payment providers has brought about substantial changes in the remittance market. Such technologies are like Ripple, SWIFT Global Payment Innovation (SWIFT GPI) and non-bank financial companies.

In the document, the Consumer Financial Protection Bureau mentions that the adoption of Ripple’s XRP will go hand in hand with banks. It will be possible for banks to see the total of their transmission that will be collected by recipients prior to the transaction. For XRP and the crypto industry at large, this new system represents a major milestone in their overall service delivery. The Consumer Financial Protection Bureau, however, maintains that this new change might not take over by wave but will take some time before it is fully running.

The CFPB understands that however much the crypto industry is gaining mass adoption and popularity, it is very much unlikely that they will replace the traditional banking systems anytime soon.

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Author: Lujan Odera