Cryptocurrencies Decentralized Structure Makes Terrorist Financing Difficult To Track: Chainalysis

Chainalysis has released their conclusions from a study, that has helped the firm establish that extremist groups are coming up with new ways to help finance their actions. Many of these new ways involve the use of different cryptocurrencies.

Quicker and Far-Reaching Financing

On Friday 17th January 2020, Chainalysis, the blockchain analysts were able to identify AQB (also known as Izz ad-Din al-Qassam Brigades) which is a well known terrorist organization and Hamas military arm as one of the foremost established cases of extremists using digital assets to finance their operations.

According to the analysts, AQB was using a website to come up with new BTC addresses for all donors wishing to send them funds. Included on the website was a detailed how-to-video providing a step by step explanation on how to donate money to their cause and retain their anonymity.

Equated to earlier such efforts, AQB was this time around not only able to raise more funds and increase their donor numbers, but they also managed to do so in a much shorter duration period. This unfortunately isn’t first time that crypto has been linked to criminal acts, including hate crimes, and Ponzi schemes.

In similar past studies, Chainalysis research has managed to track up to $2.8 billion worth of BTC linked to criminal organizations and criminal enterprises being held by various exchanges. Close to fifty percent of this haul–$1.4 Billion in BTC—was transferred by leading exchanges Huobi and Binance.

Response from Law Enforcement Organizations

Cryptocurrency funded criminal acts have managed to grab the attention of government organizations and other officials who have insisted that digital assets require additional oversight.

In 2019, Steve Mnuchin, the Treasury Secretary spoke at a FATF gathering (Financial Action Task Force) and commended the global regulatory standards that were being put in place to assist in fighting crypto-relating delinquencies. Steve noted that:

“The FATF will make sure that virtual asset service providers do not operate in the dark shadows […] This will enable the emerging FinTech sector to stay one step ahead of rogue regimes and sympathizers of illicit causes…”

FATF comprises of a congregation of more than two hundred countries and which have demanded that cryptocurrency exchanges put in place measures that will make it easier to identify client transactions and identities.

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Author: Daniel W

Block.One’s ‘Voice’ Social Network Has An Open Door Policy To Other Blockchains, Not Just EOS

During its June ICO, Block.one had indicated that its Facebook rivaling social network dubbed Voice, would be launched on the EOS network. However, plans seems to have changed as CoinDesk reports.

Voice has been touted as a different form of social media network which will have in-built crypto and have the capacity to deal with bots since each account will be verified. However, after the announcement in June, the firm went mum but in Dec, it announced that Voice will be launched on Feb. 14.

The announcement came with additional information like a FAQ page found on the Voice website which indicated that a private EOSIO software will be used to run the application. However, the firm was non-committal on whether Voice will be run on EOS saying that other blockchain networks can also be used.

The statement in the FAQ is contrary to a press statement made in June which indicated that the social network would run exclusively on EOS. Still in June, to indicate its commitment to run on EOS, Block.one had reserved a large space of RAM within the mainnet.

Asked to comment on the latest developments, Block.one spokesperson turned down the request.

It is important to understand that Block.one mostly develops software but they are mostly run by other firms. For instance, while it developed EOSIO software, it was launched by a group of organizations from different parts of the world to what is today known as EOS.

Despite the eminent uncertainty, the CEO of EOS Dublin, Sharif Bouktila, remains bullish that Block.one will use the EOSIO for Voice. He explained that if Block.one fails run its apps on the EOS it would raise eyebrows in the industry as who else is better suited to use the blockchain. He said,

“There hasn’t been a decision that I can see but if Block.one didn’t need to use the EOS mainnet for its apps it would raise serious questions as to why and who else should use it.”

EOS has been in the news for the wrong reasons in the recent past due to performance issues. There have been allegations companies running on EOS prioritize speculative profits rather than the technology. The revelation of EIDOS smart contract that paid users for the number of transactions made is just one of the many. These could be the reasons why Block.one is considering other blockchains.

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Author: Joseph Kibe

Decentralized Finance (DeFi) Grew To $668 Million In 2019, How Will Taxes Be Calculated?

2019’s decentralized finance (DeFi) boom that has led to more than $785 million being locked in crypto assets is giving accountants serious headaches.

Antoine Scalie, the CEO of accounting startup Cryptio says complex assets and transactions make it for the accounting to be more difficult. For this reason, Winklevoss Capital and Dragonfly Capital have invested millions in accounting startups like TaxBit. Alex Pack, the co-founder of DragonFly Capital thinks there are many blockchain attacks around pseudonymity and anonymity, and that the IRS doesn’t really know how to stack DeFi products, since clear categories for experimental assets don’t exist.

TaxBit Working on Tax Optimization

It seems DeFi users who used financial products not offered by exchanges and MakerDAO loans have to enter details about their transaction manually, so they pretty much rely on the help of the Certified Public Accountants and tax attorneys working for TaxBit’s support line.

The Requirements Are Unclear

Both Cryptio and TaxBit are making efforts to make their systems capable of automatically flagging the events in the DeFi ecosystem that have potential to be taxed. Cryptio doesn’t provide retail users a Turbo Tax option like TaxBit does. However, it helps its DeFi clients record information on smart contracts that have been “touched” by the asset.

Since the accounting requirements aren’t at all clear, Credit Karma has conducted a survey and discovered only 0.04% of Americans have reported their crypto transactions for the 2018 taxation, whereas 4% of the population in the country reported they used crypto that time.

This had the IRS issuing an update on the crypto-oriented guidance, back in 2019. Crypto and TaxBit representatives agree the complexity of tax reporting is impeding the crypto adoption. People have no idea how the technology for this works without filling in paperwork. The startups’ role is to make the usage more compliant and mainstream.

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Author: Oana Ularu

Gemini Rolls Out ‘Nakamoto’ In-House Crypto Insurance Firm With $200 Million In Coverage

The Gemini crypto exchange owned by The Winklevoss’ just announced that it was introducing an insurance firm. This new introduction is meant to cover more than 200 million dollars in crypto assets currently under Gemini Custody. At the moment, it’s believed that this is by far the biggest sum known for any global custody service dealing with cryptocurrencies.

Yusuf Hussain, the head of risk at the firm on January 16th got to share this news with the public through an interview held with Cointelegraph. Yusuf noted that this insurance company will operate under the name Nakamoto Limited. Once operational, it will be charged with ensuring that it gets to secure the custody side of the Gemini company to a tune of two hundred million dollars.

Traditional Insurance Brokers Consulted Before the Launch

Marsh and Aon, which are renowned traditional insurance brokers were some of the companies that assisted with the launch of Nakamoto Limited. It’s expected that existing clients of Gemini Custody will also get an opportunity to purchase extra insurance from Nakamoto.

This will be for clients who would like to provide additional insurance beyond the two hundred million dollars on offer. Hussein went on to state that:

“The advancement in the company’s custodial coverage will allow a number of Gemini’s institutional clients to continue to meet their own regulatory requirements.”

He was also quick to note that:

“The measures that had been taken by Gemini were consistent with its approach of being a security-first, compliance-first, and regulatory friendly exchange and custodian.”

It’s worth noting that the custody wing was first introduced to the public by Gemini in September 2019.

Insurance in the Crypto Verse

Many traditional financiers looking to invest in crypto have in the past been restricted by the lack of insurance services that would help protect their digital assets.

In the past few months, several companies have stepped up to try and bridge this gap with some of the most notable ones being Lloyds which is based in London. Lloyds is tasked with safeguarding crypto asset wallets (hot wallets) for Kingdom’s Trust and Coinbase.

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Author: Daniel W

Mind Capital Gets Issued Fraud Warning by National Securities Market Commission in Spain

According to a recent report by Behind MLM, the National Securities Market Commission announced that Mind Capital, a crypto investment firm, is committing securities fraud.

The announcement warns:

“The CNMV warns that: MIND.CAPITAL is not authorised to provide the investment services detailed in Article 140 of the Securities Markets Law; and is not authorized to perform the activities reserved for collective investment institutions.”

Further, the report indicates that Mind Capital has not registered with the National Securities Market Commission, and its founder, Gonzalo Garcia-Pelayo, is allegedly not based in Spain.

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Author: Joseph Kibe

Rumor Mill: The Fed Will Be Launching A Digital Dollar This Week

  • Rumors are circulating that US Federal Reserve is launching a US dollar
  • Looks like, it’s just Crypto Dad & Ex-CFTC Chairman Chris Giancarlo proposing the digitization of the USD

A flurry of rumors about a digital dollar to be launched by the US Federal Reserve is doing the rounds in the cryptocurrency market. It all started with a Tweet that says Fed to announce a digital dollar as soon as tomorrow. Talk about whiplash and a shock!

As Gabor Gurbacs, digital asset strategist at VanEck points out,

“It would be odd if a Fed project would be (pre-)announced in a Swiss conference outside the US by a former US regulator/government official.”

Turns out it’s no one else but Crypto Dad, former CFTC Chairman Chris Giancarlo discussing the prospect of a digital dollar during the Crypto Finance Conference held from Jan. 15 to 17 in St. Moritz.

Digital Currencies to bring a change as big as the Internet

The conference which is described as promoted as the “most private conference on cryptocurrencies and blockchain investors” involved more than 60 speakers that ranged from prominent figures from crypto, regulatory and mainstream space.

From Bitcoin billionaires and Gemini founders Tyler Winklevoss and Cameron Winklevoss, US SEC Commissioner Hester Peirce, Co-Founder & CEO of BitMEX Arthur Hayes, Coinshares CSO Meltem Demirors to Swiss National bank’s Dr. Thomas Moser, Minister Special Advisor to President, Government of Niger – Ibrahima Guimba-Saïdou, CSO at Samsung Electronics Young Sohn and more are all part of this conference. Giancarlo wrote on Twitter:

“Great to speak @CFCstmoritz about digitization of global markets, tokenization of financial assets & why regulators must anticipate exponential rate of commercial adoption.”

Chris believes that looking back we would see digital currencies resulting in as big a change as the Internet, if not bigger. He also predicted that

“our children will be using digital assets during their lifetime as a medium of both exchange, of savings, of holding of assets…that will be digitized as well.”

Rumor or not, Fed should Digitize the Dollar

With the rumors of Fed digitizing the dollar, the same as China’s effort to digitize the yuan circulating, Morgan Creek Digital’s Anthony Pompliano says,

“Whether the rumor is true or not, the Fed should absolutely digitize the dollar.”

Pomplaino (Pomp) explained in an interview with CNBC:

“I think they should tokenize the dollar immediately. If you look at China, they are tokenizing their currency. There’s other countries that will follow. What’s going to happen is there’s not going to be a competition between digital and non-digital currencies. Every currency will be digital.”

This means we’re going to have is a competition of monetary policy. Pompliano said if China has a digital yuan but the US doesn’t it would be much more accessible for people to buy the Chinese Yuan in other parts of the world than the US dollar. As such we might see higher levels of adoption of the Chinese Yuan than the US dollar.

By tokenizing or digitizing the dollar fast, the US can drive that adoption globally and keep it as a global reserve currency, he advises

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Author: AnTy

Kraken Futures Pushes Into The Under-Appreciated Cryptocurrency Market In Russia

The licensed futures provider that was bought off by Kraken late last year known as Crypto Facilities, has announced the hiring of Aleksey Bragin to expand its operations in Russia. The firm intends to intensify in-person visits as well as operate various social media groups using the Russian language.

According to CoinDesk, the subsidiary currently provides XRP, Litecoin, Bitcoin, Bitcoin Cash and Ether futures contracts. The company rakes in $17 million per day in volume coming from Bitcoin futures only.

According to Kraken Futures overall in charge of business development, Kevin Beardsley, Russia ranks top among the under-appreciated crypto markets today. He explained that the presence of well-trained tech developers dealing with the crypto industry makes Russia a highly lucrative crypto market.

Beardsley went ahead to say that the US and China and to a lesser extent Korea and Japan dominate the crypto conversation. However, Russia has proved itself as a leader, especially in the development of infrastructure and ranks high in terms of crypto community but gets much less coverage. Beardsley gave examples of Telegram as well as TradingView whose teams are made up of Russians and surrounding countries.

Bragin has a vast experience in the Russian crypto industry and in 2011 he started ICBIT, a crypto futures exchange which was later bought out by Safello, a Swedish crypto exchange, in 2016. He explained that Russian traders have highly adopted cryptos and take them like other currencies or commodities.

According to Bragin the number of persons trading cryptos is growing at a fast rate and there is a high crypto trading acceptance which makes Russia attractive destination for futures trading. He however admitted that Russian derivative market is still at its nascent stages but it’s quickly becoming a critical market. He explained that crypto derivatives began to attract traders in 2018 and developed rapidly in 2019 and analysts have predicted the trend will be maintained this year.

The Russian market is fast becoming an attraction to many renowned exchanges such as Huobi that launched its operations there in November 2018.

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Author: Joseph Kibe

WisdomTree Investments Looks To Launch SEC Approved Stablecoin Backed By Basket Of Assets

The New York-based investment company WisdomTree has made the announcement that it’s going to issue a stablecoin before its competition does.

It seems Securities and Exchange Commission (SEC) actions have already been taken by the giant in this direction. The digital token it wants to launch is supposed to be a stablecoin that’s anchored to a variety of assets like public debt, fiat currencies and gold, even if this hasn’t been yet declared to the SEC. WisdomTree’s CEO and founder, Jonathan Steinberg, has been the only one to comment on the matter until now, by saying:

“You want to be early. We came to ETFs 13 years after State Street. This gives us an opportunity to be ahead of the State Streets, Fidelitys, on regulated stablecoins”.

Steinberg: Being Ahead of Competition in the Crypto World is Very Important

Steinberg also mentioned how important it is to be ahead of competition when it comes to digital currencies. In December 2019, WisdomTree launched its Bitcoin (BTC), based exchange traded product (ETP) that gives investors access to BTC without having to hold it. The product was listed on Six Swiss Exchange, the Zurich Stock Exchange that’s a leader in the world of cryptocurrency ETP-based exchanges.

WisdomTree Financed the Securrency Inc. Project

WisdomTree was last week in the center of attention for being a participant at the Securrency Inc. funding project. Securrency Inc. is also a leader, but when it comes to developing financial blockchain-based technology and regulations at an institutional level. Its project raised not less than $17.65 million.

As far as launching an ETF stablecoin goes, WisdomTree is going to offer access on the blockchain to traditional assets like property and gold. The rivals it’s planning to beat are Fidelity Investments and BlackRock, and it looks like it has already taken the necessary steps to do just that.

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Author: Oana Ularu

What’s the Effect of CME Launching Bitcoin Options on BTC & Altcoins?

  • Amidst the high anticipation for the product, CME has launched its Bitcoin options that are now open for trading
  • Binance-backed FTX also launched options on bitcoin and traded $1 million within the first two hours
  • “There’s been high anticipation for institutional adoption of Bitcoin for a very long time,” – Bloomberg

Options on CME’s Bitcoin futures contracts has been launched today. Each of these contracts represents five BTC. Quoted in US dollars, these contracts are cleared centrally to avoid counterparty risk.

These options are introduced in response to “growing interest” in digital currencies and customer demand for tools to manage BTC exposure. As CME states, “CME options on Bitcoin futures (BTC) are now trading.”

To track BTC price, CME relies on data from multiple top bitcoin exchanges. Currently, BTC/USD is trading at $8,096 with 24 hours loss of 0.38% while managing the daily trading of $497 million on top ten exchanges with real volume, as per Messari.

As the first mover, when CME launched bitcoin futures in December 2017, BTC price topped around $20,000. Bakkt’s launch also saw BTC price dragging but this time there isn’t notable movement in BTC price.

Unlike other exchanges, CME is a regulated platform to trade cash-settled bitcoin futures, just like Bakkt. ICE’s Bakkt launched options last month.

Before this launch, CME recorded strong activity, noted analytics firm Skew.

Open interest on CME Bitcoin futures has also jumped in the excitement of options launch.

While good for BTC, this might not be positive for altcoins as trader Ceteris Paribus notes, “the more we see products like this get offered the more bearish it is for the majority of alts.”

“99% of alts are basically quasi-derivatives of Bitcoin. Now we’re getting actual derivatives to trade. Majority of alt volume was just seen as beta within crypto… now there will be easier, more liquid ways to get that,” added Paribus.

“High Anticipation” of Bitcoin Options

Speaking about the “high anticipation” of Bitcoin options launch on the CME, Bloomberg’s Sonali Basak who has ”very heavily” covered BTC said, “There’s been high anticipation for institutional adoption of Bitcoin for a very long time.”

Although futures and options markets are opening up, Basak said, some of the fundamental concerns for big institutional investors in the form of regulatory risk and how to treat BTC are still problems.

Reflecting on JPMorgan Chase’s report from Jan. 10 that claims that institutional interest in Bitcoin-related contracts is building but the digital assets’ intrinsic value is still below its market value, she said, “on one hand there’s a lot of institutional interest but on the other hand there’s a lot of risks still there.”

But the “Bloomberg Daybreak: Americas,” host points out it’s exactly the way investment banks treated, to which Basak says,

“Let’s be honest investment banks love risk and so they wanna love it (..)They want to love it and they are aware that it’s there but there’s a lot of risks Bitcoin does pose to existing business models.”

Kicking off 2020

However, CME wasn’t the only one that launched options, Binance-backed FTX also launched options on bitcoin. The exchange also recorded strong activity, within the first two hours it saw $1 million in trading activity.

As for the current Bitcoin futures options volume, the picture somewhat looks like this,

Bitcoin options are having a good start of 2020. Just last week, daily volumes climbed to $90 million.

Among these exchanges that have options on bitcoin, Deribit exchange accounts for 95% of all trading activity last year. But last week, the Dutch-based exchange moved its operations to Panama citing regulatory concerns.

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Author: AnTy

Dish Network Patents ‘Anti-Piracy Management System’ Using Blockchain Technology

Dish Network has just published on Thursday a patent for its new blockchain-based anti-piracy system that enables owners to see how their content is getting used.

Dish claims the system can oversee and implement ownership rights more efficiently by putting platforms on alert mode when their content is being used without approval. It seems the biggest problem of online streaming is piracy and the distribution platforms are too many to be monitored in an effective manner. While it’s easy to take down unauthorized content after identification, this usually happens after millions of views.

The System Was Initially Filed in 2018

Initially filed in July 2018, Dish Network’s new anti-piracy system uses blockchain technology for embedding ownership data that can only be updated and uploaded by owners. It intends to provide distribution platforms a reference point that’s incorruptible and to make sure the data is authorized. More than this, it helps with the enforcing of ownership rights, taking action against administrators who put up content without permission.

Not Yet Known If the System Will Use Its Own Blockchain

There’s not yet known if the Dish Network’s anti-piracy system will work on an already existing platform or use its own blockchain. Users will be able to pay owners in crypto or fiat currencies for their identity tokens, which will give them the green light to use content. These identity tokens are customizable and permit access for a specified amount time. They also give the authorization for content on some platforms to be edited. When someone unauthorized uses the content, the owner gets notified.

Dish is One of the Biggest Television Providers in the US

Having over 9.5 million patrons in the US, Dish is among the most important satellite television providers in the country. It has grappled to keep its subscribers just as much as other companies in its category did, as more and more people prefer online streaming nowadays.

Back in 2018, when over 1 million subscribers cancelled with them, they said online operators are using their content illegally and filed 2 lawsuits against 2 different platforms. Other important companies that have recognized how efficient blockchain technology is when it comes to copyright enforcement are Baidu and the Korean giant CJ.

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Author: Oana Ularu