India’s Supreme Court Continues To Hear Case Against RBI Cryptocurrency Ban

The Reserve Bank of India had issued a circular in April 2018, which imposed a banking ban on crypto service providers. The circular prohibited banks from offering their service to all crypto-related service operators in the country. The banking ban was then challenged by the Internet and Mobile Association of India (IAMAI) in the supreme court whose hearing has been going on for over a year now.

In the latest hearing which began on the 14th of January, the judges asked both the counsels to start the arguments fresh and from the beginning. The three-day proceedings saw the prosecution side explaining to the bench judges that the banking ban imposed by RBI was not under their jurisdictions.

The prosecution was headed by Mr Ashim Sood who noted that the RBI circular was bad mainly for three reasons,

  • Malice in law. RBI doesn’t have the power to ban but acted to ban Crypto on effect.
  • Colourable exercise
  • Ultra Vires – without authority.

Mr. Sood also pointed out the flawed analysis by RBI which in its circular claimed that since crypto assets are volatile and risky, it should not be allowed to be regulated. Sood explained that the same risk is involved in stock trading also and effectively lies under the domain of Security and Exchange Board of India (SEBI).

Mr. Sood also clarified that nobody wants to make cryptocurrency as a legal tender which has been a strong defence against legalizing cryptocurrencies. Mr. Sood explained that these digital assets can be used as a medium of exchange and store of value. He explained,

“Some people would find value in it and some people would exchange it. It is a technology which should be given free play. Casino chips are useful to the people who are inside the casino […] When I come out of [a] casino, its use ceases to exist but then some people may exchange it and it holds a value for the interested people. So likewise there is no obligation to use VCs [virtual currencies] as a medium of exchange.”

The current court proceedings in the RBI vs IAMAI is being seen as one of the most fruitful proceedings in the case which has been going on for over a year now. However, given the state of Indian judiciary it won’t be a big surprise if the case takes longer than what many had anticipated.

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Author: Rebecca Asseh

Chrysler Building’s Blockchain Real Estate Owners To Sell Building In Zurich, $135M Cash & ERC20

The current owner of the Chrysler building is offloading a property valued at around $135 million to a blockchain-based real estate firm. It’s expected that the buyers will pay a fifth of the asking price in the form of tokenized securities.

RFR Holdings, based in New York are the new owners of the Chrysler building after purchasing it in early 2019 as part of a joint buying agreement. The firm recently arranged to offload its common stake in Zurich-based corporate building to a real estate agency known as BrickMark, and which has offices in both Germany and Switzerland.

Announcement of the Purchase Agreement

This past Wednesday, BrickMark sent out a presser stating that as per the acquisition agreement, it would be paying 20 percent or a fifth of the asking price in the form of its official BMT security token.

Based on the terms agreed upon by all parties, BrickMark will now own eighty percent of the commercial property. It will also have an option to the shares remaining with RFR, though it has to do so by September 2020. While the selling price has not been made public, experts believe that the tokens are valued at tens of millions of euros.

Stephan Rind, the BrickMark CEO commented on the deal and stated that it was one-of-a-kind, and was so far the largest transaction to involve the use of digital tokens. Stephan went on to add that:

“There has never been a token-based real estate transaction of this magnitude. We are implementing what was once no more than a concept in the real estate industry.”

The commercial building in question is located in Bahnhofstrasse, in its down street area. In this area, the rent per square meter ranges between thirteen thousand and fifteen thousand dollars a year, a figure that makes it among the most affluent shopping areas around the globe.

News reports from 2014 indicate that Swatch Group acquired a property close to that location at an estimated price of four hundred and nine million dollars.

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Author: Daniel W

Ripple Says “XRP’s Utility as a Currency Threatened” by the Securities Class Action

  • The fate of $10 billion XRP market is now in Judge Phyllis Hamilton’s hands
  • The court case Ripple says could wipe out the value held by XRP’s thousands of holders
  • Ripple’s litigation strategy – “delay, delay, delay” until it is no longer a security

While the price of the digital asset according to some industry commentators is looking ready for a bullish move, on the regulatory front, there is no knowing if the digital is a security or commodity.

On January 15, Chief District Judge Phyllis Hamilton of the Northern District of California heard Ripple’s motion to dismiss. And now the fate of the Ripple and nearly $10 billion XRP market is in her hands.

Ripple’s Argument: A Threat to Destroy XRP’s Established Market

During the hearing, Ripple argued that the continuation of the case,

“would not only threaten to eliminate XRP’s utility as a currency, but it would upend and threaten to destroy the established XRP market more broadly — a market involving over USD 500 billion in trading over the last two years.”

The company further argued that this might wipe out,

“the value held by the alleged thousands of individual XRP holders around the world (many of whom no doubt disagree with Plaintiff’s claim that XRP is a security).”

Ripple added, it,

“would unfairly disrupt the long-settled expectations of other XRP market participants, such as exchanges, market makers, custody providers, and others.”

Ripple’s Strategy: Keep on Delaying

The hearing went for 56 minutes and as is typical, Jake Chervinsky, general counsel at Compound Finance clarifies, “the judge “took the matter under submission,” meaning she will issue a written ruling at some later date. It could be days, weeks, or months.”

Chervinsky who has been providing valuable insight into the legal matters concerning cryptocurrency to the industry further explained that “there is no time limit” to submit the ruling or “the case could settle before a ruling comes down.”

All in all, “the motion can sit on the docket forever” as “there is no time limit for a federal judge to resolve a pending motion to dismiss.”

Ripple Security or Commodity? “Unclear”

As for the dispute over the security, plaintiff Bradley Sostack’s counsel, Oleg Elkhunovich said that the council has admitted classifying the digital asset as a security for this motion adding, “Believe it, if this case proceeds that will be one of the key issues that will be hotly disputed.”

The plaintiff sued Ripple back in 2018 claiming that the company violated US securities laws by selling XRP and that the digital asset should be declared a security.

Ripple argued that the complaint exceeds the statute of limitations, a three-year deadline since the first initial public offering of XRP, and as such the case should be dismissed.

Elsewhere, US Commodity Futures and Trading Commission, Heath Tarbert said whether XRP is a security or commodity is still “unclear” and that they are working closely with the SEC on this issue.

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Author: AnTy

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

Defunct QuadrigaCX Exchange Victims Are Being Contacted By The FBI

The Federal Bureau of Investigation is now reaching out to QuadrigaCX victims via email in what appears to be confirmation that the federal agency has started carrying out investigations to try and establish what could have led to the collapse of the Canadian cryptocurrency exchange platform.

Valerie Gauthier, a victim specialist has been emailing multiple people who had engaged in dealings with the platform. According to multiple exchanges that she has engaged with the victims, she is looking to alert them about a news portal that contains information and details about the case against the crypto platform. In some of the exchanges that have been shared with CoinDesk, Valerie notes that:

“A criminal investigation can be a lengthy undertaking, and, for several reasons, we cannot tell you about its progress at its time,” she went on to add that the victims could get in touch with the federal agency by writing an email to [email protected]

She was, however, quick to state that:

“inquiries about the status of the case will not be addressed.”

It appears that the agency has been conducting its own investigations into the collapse of the platform since early 2019. The FBI had released a statement in June last year stating that it was interested in speaking with people who had worked with the cryptocurrency exchange.

Public Questionnaire

The agency had at the time sent out a public questionnaire it wanted the public to fill and submit to them. Multiple people who spoke to CoinDesk noted that they had filled the questionnaire and sent it back to the agency.

So far, the federal agency is among four other national agencies that are interested in looking into the operations of the crypto company. The Canadian Royal Mounted Police has also been undertaking its own investigations.

Payment Processor

On other news, Roger Knox, on Monday went before a judge in Boston and pled guilty to engaging in securities fraud. You should note that Roger is the operator and founder of Wintercap, the Swiss-based asset management company.

He is accused of being a part of numerous schemes aimed at manipulating the market, including taking part in microcap securities pump and dump operations.

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Author: Daniel W

RBI Crypto Ban Hearing in India Postponed by the Supreme Court, Is This Good or Bad?

The Indian Supreme Court has postponed the hearing on Reserve Bank of India’s (RBI) case related to crypto businesses.

Ever since the RBI implemented its ban on crypto dealings at banks in April 2018, crypto firms and exchanges in India have had a very tough time. Many petitions, both public and industry-related, have been signed. More than this, the decision has been taken to courts and called unconstitutional. The Internet & Mobile Association of India (IAMAI) is the non-profit body that appeals to the government when it comes to such matters, and the one that brought the case to court.

The Court’s Action Regarded as Positive

Kashif Raza, the co-founder of India-based analysis and regulatory news platform Crypto Kanoon, says the case’s principal contention is to appeal the ban on the grounds of being unconstitutional. He also commented that the latest action taken by the court is very positive, these being his own words:

“Today RBI was supposed to reply to the representation filed by IAMAI […] It seems that the Supreme Court of India today passed over the matter primarily because the court expects there to be longer arguments in this case, which could take their entire week. They gave it a pass so as to allow in future for a full-fledged hearing of the arguments, to listen to both parties. So interesting times ahead.”

The Indian Crypto Climate is Adverse

The ban had brought quite the extensive toll for the Indian crypto industry, with exchanges like WazirX being forced to go P2P so that in-house crypto to fiat conversions are avoided, and Coindelta terminating is services altogether. Uncertainty seems to be the word of the moment, as in the fall of 2019, the Indian government had delayed introducing a contentious draft bill on crypto banning. The bill dubbed “Banning of Cryptocurrency and Regulation of Official Digital Currencies” doesn’t only intend to ban using crypto in India, but also to make things easier for RBI to launch the Digital Rupee.

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Author: Oana Ularu

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

US Treasury Department Pilots Blockchain-Based Federal Grants Tracking System

The US Treasury Department, which is in charge of government revenue, has been reported to experiment with blockchain tech in order to develop a system that tracks federal grants.

The proof-of-concept (PoC) program that’s intended for a blockchain-based grant recipients’ letter of credit is about to be completed, says Craig Fischer, the manager of the innovation program at the Treasury. As reported by Federal Computer Week (FCW), Fischer talked about the program on Friday, at a conference on federal financial systems modernization.

What’s Does the Program Do?

During trials, the program was used to tokenize credit letters so that it follows the trail of grant money from federal reserves to their recipients, says the FCW report. Through tokenization, the grant incipient and amount are being identified, also other important data like the date when the grant was awarded, Fischer mentioned. He continued by adding that grant recipients need to hold an electronic wallet linked to a bank account if they want to be given a tokenized letter of credit. When it comes to access, Fischer mentioned:

“This isn’t the Bitcoin network, where everything is visible.”

The US Treasury started on the Program in September 2019

Developed in collaboration with the National Science Foundation, the San Diego State University and the Duke University ever since September 2019, the trial program is expected to come to an end as soon as this month will be over. It isn’t the 1st time when the Treasury Department is experimenting with blockchain tech in order to enhance its agency.

For example, back in 2018, it has developed a blockchain-based prototype project for managing physical assets like mobile phones and computers, and noted the technology has,

“great potential for streamlining burdensome reconciliation operations that are involved in many financial transactions.”

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Author: Oana Ularu

Bitcoin-Gold Correlation Near Record High, Investor says BTC Will ‘WAY Outperform’ the Metal in 2020

  • The (Peterson) correlation between gold and BTC climbed to 0.217, last seen in October 2016
  • Are we seeing the emergence of a new safe haven asset?

Last week, the tension between the US and Iran that rose resulted in Bitcoin showing signs of being “digital gold.”

It all started with the announcement of the Iranian general Qassem Soleimani’s death. Gold and bitcoin both jumped shortly after the news. A couple of days later, both digital gold and gold spiked together when the news about Iran bombing Iraq broke out.

Lastly, when President Donald Trump gave his de-escalation speech, the price tumbled at about the same time.

This isn’t something that happens very often. The rare occurrence of such events led industry commentators to believe that this could mean Bitcoin is becoming a “safe haven.”

Interestingly, Bitcoin’s correlation with gold has risen to 2016 levels. The (Peterson) correlation between gold and BTC climbed to 0.217 on Jan. 10. This level was last hit in October 2016 and before that in April 2013. The highest this correlation has ever been was in early October 2016 at 0.22.

The correlation between both assets was below zero about half a year ago but these levels haven’t been seen since August 2016 and strengthen the “digital gold” narrative for bitcoin.

Although, it can’t be ignored that this is just short-term price action which could be a spurious correlation. So, a long term evaluation is necessary to see if this holds any merit.

But Bitcoin has started to make a transition from a risk-on asset to becoming a safe haven as the leading cryptocurrency finds a place in the world market and investors’ portfolio.

Bitcoin already offers more crucial benefits over gold in today’s world of censorship, lack of privacy, and fear and threat of confiscation.

When it comes to being an investment with better returns, Bitcoin beats gold, with a wide margin.

In 2019, while gold surged 18%, Bitcoin price saw an increment of 90% in its value. Investor Preston Pysh expects the same trend to follow this year as well. Pysh said,

“Since March 2019, Gold has started to outperform the S&P500. I expect that trend to persist moving forward. But, I think Bitcoin will WAY outperform gold. Bonds are a disaster – they are all denominated in fiat – good luck with that long-term.”

Currently, gold is making a retracement, down at $1,550 per ounce after reaching its nearly seven-year high on Jan. 10 at $1,562 per ounce. The yellow metal could see more downside from here, according to analysts.

Bitcoin, on the other hand, has fallen from $8,450 last week to $8,080. Just like the price, trading volume has also declined from over a billion to about $533 million.

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Author: AnTy