French Ministry of Finance Targets Strict KYC Rules For Crypto Transactions

France is strengthening its fight against anonymity in crypto transactions, Bruno Le Maire, French Minister of Finance and Economics.

In a full statement sent to the Council of Ministers by Bruno Le Maire, Oliver Dussopt and Sebastien Lecornu propose stringent Know-Your-Customer (KYC) laws to govern crypto transactions. The report further calls for tough measures against anonymous accounts on any virtual asset service provider (VASP).

“We presented to the Council of Ministers this morning an order making it possible to strengthen the fight against the anonymity of crypto-asset transactions,” Le Maire wrote on Twitter on the statement on strict KYC laws on crypto.

The new rules, if implemented, are set to completely change the anonymous crypto transactions in France while forcing VASPs to check their customers’ identities, verifying crypto accounts, and reporting any malicious activities on their platform.

The new KYC requirements, first reported on TheBlock this Tuesday, aimed at curbing terrorism funding through crypto, Simon Polrot, president of French crypto association ADAN confirmed. Following the recent terrorist attacks in France, the police arrested 30 people connected with sending funding to extremists in Turkey and Syria using cryptocurrency.

This led the government to call for stronger rules to regulate anonymity in the crypto space and check user profiles sending money through France. Le Maire has been vocal on the need to “strengthen the control of funding,” given the challenges that “cryptocurrency transactions cause in terrorism financing.”

This seems to be the first wave of heavy regulation set to come across France and Europe to keep crypto-to-fiat and crypto-to-crypto transactions known. The statement states the government is very aware of the “importance of the blockchain systems” in the country’s economy. Yet, a clear policy to fight terrorism must be found, starting with crypto.

Once the Council of ministers passes the decree, it becomes law in France, forcing VASPs to collect two government identification documents for any transaction conducted on their exchange. This sets harsher laws for crypto under the jurisdiction introducing KYC for crypto-to-crypto transactions too.

The deputy governor of the Bank of France, Denis Beau, recently asked for a more global approach to regulating cryptocurrencies. While he targeted Facebook’s Libra token, the main motive behind his talk was a call for banks and regulated financial institutions to start experimenting and developing their own regulated digital assets.

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Author: Lujan Odera

DEX Aggregator 1inch’s Latest Feature Enables Everyone to Transact Privately

DEX aggregator 1inch.exchange announced a new “killer” feature of private transactions on late Friday or early Saturday.

To allow everyone to transact privately, 1inch will connect the user straight to their miner network instead of getting them waiting in mempool. However, the feature isn’t supported on Metamask.

“No more front-running,” tweeted the exchange as it stated, “We are now connected to 10 Ethereum miners in order to broadcast user transactions directly to the miners,” in order to reduce the transaction mining time.

Pantera’s Director of Platform, Franklin Bi, congratulated the 1inch team for pushing this new feature to save cost and preserve privacy for their users. He called this development “game-changing for both power users and casual traders on 1inch.”

Pantera Capital is the lead investor of 1inch’s Series A funding round of $12 million. The DEX aggregator team shared this week that this recent round of funding is a “vital step in our mission to create meaningful innovations for the world of decentralized finance.”

In the 17 months since its launch, the aggregator has been recording a cumulative trading volume of almost $6.6 billion and a daily trading volume of over $80 million. During this time, the 1inch team has also scaled to 16 people.

“We’re excited to back the 1inch team on their journey to raise the bar for decentralized finance,” said Pantera Capital in its investment announcement.

At the time, it has also been shared that the 1inch team has expanded its product suite to include a next-generation AMM protocol, and native token with yield farming and lending protocols are on the way.

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Author: AnTy

Ethereum Exchange Reserves on a Sharp Decline While Locked ETH Continues its Uptrend

Activity on the second-largest network is thriving.

Since early this year, daily transactions on Ethereum have been growing, hitting an all-time high last month. Although it has come down some as DeFi mania cooled down, daily transactions are keeping to July-August level.

Ethereum fees have also gone back to normal levels as the DeFi rush came to an end, which in August sent average fees to $10 for the first time, bringing Ethereum’s scaling issues into glaring light.

With the upgrade coming up to keep the fees down for another potential growth spurt, it “would mean less demand for the token because people would need to buy fewer coins to do the same operations. From developers to end-users, it will largely reduce the buying pressure,” wrote analyst Mati Greenspan.

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Moreover, as per Glassnode, the popular stablecoin Tether transaction volume on Ethereum also saw a 20% spike over the past 30 days. It reached a new milestone of $600 billion.

“Tether’s important role in the digital asset ecosystem… If you were to add tether’s usage on other chains such as Tron, Omni, and Algorand, the headline figure would be higher still,” said Paolo Ardoino, CTO at Tether and its sister company crypto exchange Bitfinex.

Out of the total supply of $16 billion, USDT’s supply on Ethereum has also exceeded $10 billion, representing nearly 65% of the Tether token supply on a blockchain.

7.6% of ETH’s Total Supply Out of the Market

Amidst this growing activity, Ether’s amount on exchange wallets has been declining ever since May, as per Crypto Quant. Ethereum exchange reserves have fallen to 11.8 million ETH from the mid-May high of 14.14 million ETH.

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This trend coincides with the ETH that hasn’t been moved in over a year, which has reached 60%.

Additionally, 8.7 million of ETH are currently locked in the decentralized finance (DeFi) sector, as per DeFi Pulse.

“7.6% of ETH’s total supply is currently locked in the DeFi ecosystem. The amount of ETH locked in DeFi increased by a record high of 3.3M in September and has grown by 5.6M in 2020. That’s 2M more than the total supply of ETH has increased this year,” as per The TIE.

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The only factor lagging is Ether’s price, which is currently trading around $380, up only 188% YTD and still down 75.76% from its ATH.

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Author: AnTy

New Zealand Tax Authority Tells Crypto Firms to Disclose Traders Info & Transaction History

  • New Zealand’s tax authorities dialing down on cryptocurrency users and transactions in the country.

In a statement obtained by the local radio news station, Radio New Zealand (RNZ), New Zealand-based crypto firms must submit their customer’s crypto transaction information to the country’s top taxation authority, Inland Revenue Department (IRD).

According to the report, all companies dealing with crypto assets must “pass on customers’ personal details as well as the type and value of their crypto assets.” This is in a bid for the tax authorities to keep up with the virtual asset industry and formulate a policy that will best help New Zealanders report their crypto tax obligations.

Global tax regulators are heavily hitting on the crypto asset world. Recently, the U.S. Internal Revenue Service (IRS) introduced crypto laws on its 2020 tax laws, altering form 1040 to make it harder for crypto users and traders to escape their tax obligations.

However, Janine Grainger, chief executive of Easy Crypto, a New Zealand based crypto firm, said the latest effort by the IRD goes against the fundamentals of crypto – privacy. Terming the new rules as “heartbreaking,” Grainger said she would comply but questioned the law.

“Privacy is really important to us… one of the tenets [of] cryptocurrency in general is around having freedom and autonomy and privacy,” she said.

“[..]the point of privacy isn’t to aid people who have something to hide, it’s to ensure we have a fair, open and free society”.

Russia recently introduced an amendment that would see cryptocurrency miners forego their mining rewards and a law that forces crypto traders to disclose their crypto transactions or face criminal charges.

Related Global Crypto Tax News:

Read: Israeli Draft Bill Proposes Bitcoin be Defined as Currency to Cut Down the Hefty Capital Gain Tax

Also Read: Switzerland’s Canton to Allow its Citizens to Pay Taxes in Bitcoin & Ether Starting 2021

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Author: Lujan Odera

Biggest Banks Involved in Moving $2 Trillion Illicit Funds, Reveals FinCEN Documents

And they say bitcoin is used for criminal activities.

The leaked documents of $2 trillion transactions, a tiny proportion of the SARs submitted over the period, revealed that some of the world’s biggest banks have been allowing criminals to move dirty money around the world.

The FinCEN files, having over 2,500 documents, were sent by banks to the US authorities between 2000 and 2017. FinCEN is the US Financial Crimes Enforcement Network that combats financial crime and deals with transactions made in the US dollar even if they took place outside the US.

The agency requires the banks to file Suspicious Activity Reports (SARs) if their clients are involved in some nefarious activities.

Unlike the number of big leaks regarding financial information over the recent years, including the 2017 Paradise Papers, 2016 Panama Papers, 2015 Swiss Leaks, and 2014 LuxLeaks, this time, not just a few companies but several banks are involved in wrongdoing, which isn’t surprising.

As per the leaked documents, the banks involved were HSBC, JP Morgan, Barclays, Deutsche Bank, and Standard Chartered.

HSBC allowed fraudsters to move millions of oilers of stolen money, even after learning from the US investigators that the scheme was a scam. In turn, its shares fell 5% to the level last seen in 1995.

Just like HSBC, Standard Chartered’s shares crashed 5%, to a level last seen in 1995. The bank moved cash for Arab Bank for over a decade after clients’ accounts at a Jordanian bank were used in terrorism funding.

The central bank of the United Arab Emirates’ also failed to act on warnings about a local, from which was helping Iran evade sanctions.

In the light of plunging shares of the banks, Binance CEO Chagpeng “CZ” Zhao said, “Might be a good time for their treasury to buy bitcoin?”

Read Also: Out of $1T In Crypto Transactions, Only 1.1% Were Used In Illicit Activities: Chainalysis

While the most prominent investment bank, JP Morgan, allowed a company to more than $1 billion without knowing who owned it, later to be found that it belonged to a mobster, Barclays was used by Russian President Vladimir Putin’s closest associates to avoid sanctions. The shares of the bank dipped the most, 6.3%, to the April 2020 level.

Deutsche Bank laundered money for organized crime, terrorists, and drug traffickers and saw its shares tumbling 5.4% to May 2020 level.

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Author: AnTy

Israel Govt backed Crypto Startup, Kirobo, Develops Reversible Blockchain Transactions

  • Israeli based blockchain startup, Kirobo, aims at reversing wrong address transactions to eliminate loss of funds through human error.
  • The “Retrievable Transfer” feature is currently in use on Ledger hardware wallets for Bitcoin transactions.

The Israeli startup, launched in 2018, has launched its mainnet version of its Retrievable Transfer feature protecting users from sending their digital assets to wrong addresses. The platform employs a layer two security solution (logic layer) on a blockchain that works in two levels.

First, the recipient of the funds must enter a transaction code to receive the funds. This ensures the open channel between the sender’s and recipient’s address is trusted hence directing the transaction only to the wallet selected. Next, the sender keys in the address as many times until the correct address is provided.

One of the most significant issues affecting crypto adoption is the fear of losing funds over a small error when inputting the long alphanumeric wallet codes. The volume of BTC lost differs from report to report. Several investors have lost funds through malicious attempts or human error when sending digital assets.

Addition to Ledger Hardware Wallet

Kirobo’s security layer will provide privacy enabled, retrievable transactions starting with Bitcoin users on Ledger’s hardware wallet. The platform is secured against a brute force attack and is also non-custodial, meaning users control their funds every step of the way.

Kirobo, supported by the Israeli Innovation Authority, has been testing its reverse transfer feature on the Bitcoin testnet since January. The mainnet feature will be free for any Bitcoin transactions up to $1000 on Ledger. More platforms will be added in the future, said Kirobo CEO, Asaf Naim.

On the firm’s mission, he said:

“Our aim is to make blockchain transactions as simple and as secure as online banking.”

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Author: Lujan Odera

Blockchain Monitor, Chainalysis, Adds Privacy Coins DASH and Zcash To Its Tracking

  • Blockchain transactions analysis firm, Chainalysis, announced the addition of two privacy coins, Zcash (ZEC) and Dash (DASH) to its Reactor and Know Your Transaction monitoring system on June, 8.
  • The two cryptocurrencies are not as private as most people believe despite the blockchains conducting over $1.5 billion in daily transactions.

The New York-based firm is finally dipping its toes into the privacy coin transaction monitoring space by introducing Dash and Zcash to its ring of over 80 cryptocurrencies, including Bitcoin.

The two become the first pair of privacy coins to be monitored by Chainalysis, who claim Dash privacy is a simple extension to Bitcoin mixers, and almost all of Zcash’s transactions are not private.

“PrivateSend is a Branded Implementation of BTC Mixers”

Dash employs the PrivateSend feature to obscure users’ transactions in a similar manner to Bitcoin mixers, the announcement reads. Users have an option on whether they would like their coins mixed or not by selecting the “PrivateSend” feature before making the transaction.

The funds are then sent to DASH denominated pools of 1, 10, 100, 0.0001 DASH, etc. and resent to a new “harder to trace” wallet.

Chainalysis have been monitoring Bitcoin mixer transactions for some time and aims to do the same with Dash, which they claim naming it a private coin as a misnomer. According to a study by researchers at Princeton University, you can uniquely identify the single address a PrivateSend output came from.

Only about 1% of the total Dash transactions on the blockchain use the PrivateSend feature with mixing transactions accounting for only 9% of the total transaction volume.

Despite Dash being brought to the spotlight on Chainalysis, the CEO of Dash Core Group, Ryan Taylor, remains positive on the overall effect of the monitoring. He said,

“Chainalysis is a leading provider of advanced AML and blockchain analytics that is necessary for money services businesses needing to balance privacy needs with compliance needs.

Ultimately, both [Dash and Chainalysis] promote the safe use of cryptocurrencies, while ensuring access to legacy financial markets, so I’m pleased that Chainalysis has chosen to implement Dash into their platform.”

He later replied to a few DASH users on the privacy effects of having Chainalysis monitoring.

Over 99.9% of Zcash Transactions are not Private

The Chainalysis’ article also mentions the addition of Zcash, which offers a privacy mechanism using Zk-SNARKS encryption. Zcash makes users funds “private” by sending the amounts to encrypted pools that obscure any surveillance.

However, the statement released showed that over 99% of the total transactions on the blockchain are not private at all. It turns out that the transactions are only shielded in the pool but not the transactions into and out of the pools.

“Transactions into, out of, and between the pools are transparent, but the counterparty addresses within the pool remain encrypted.”

Only 6% of the total transactions interacting with the shielded pool are actually shielded, which accounts to about 0.9% of the total transactions on Zcash.

“Using simple heuristics based on shielded pool usage patterns reduces anonymity.” – Statement on how to trace Zcash transactions.

With most users foregoing the option of joining a shielded pool, tracking individual transactions is even easier.

All in all, only a small percentage of the transactions, about 0.2%, use the DASH and ZEC for illegal activities.

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Author: Lujan Odera

98% of XRP Ledger Transactions Have “Zero Value,” Much like EOS & XTZ : Report

“Only 2% of transactions on the XRP ledger lead to value transfers,” reads the report by Cornell University.

The report titled “We Know What They’ve Been Put Through: Revisiting High-scalability Blockchain Transactions,” talks about the network traffic of three major high-scalability blockchains EOS, Tezos (XTZ), and XRP.

Although scalability has been a bottleneck for major blockchains like Bitcoin and Ethereum, these highly scalable blockchains aren’t really being used for value transfer purposes either. The report found,

“Despite the advertised high throughput and the seemingly commensurate transaction volume, a large portion of on-chain traffic, including payment-related transactions, does not result in actual value transfer.”

Both transaction volume & token value highly manipulable

98% of XRP ledgers aren’t making any value transfers.

Between October 1, 2019, to December 31, 2019, a total of 90 thousand accounts collectively conducted 150 million transactions, an average of 1.7 thousand transactions per account.

The distribution of the number of transactions per account is highly skewed, 18 most active accounts are responsible for half of the total traffic.

The report also found that out of the top 10 accounts by the number of conducted transactions, all except one “share suspiciously similar patterns.”

The pattern reveals, more than 98% of their transactions are OfferCreate, which is used to create a new order in the decentralized exchange provided by XRP.

These accounts are either descendants of an account from Huobi or frequently transact with descendants from Huobi. They all have also transacted using CNY and their payment transactions use the same destination tag, similar to a bank reference number.

As per the report, by allowing autonomy in currency issuance, the XRP ledger makes it easy to generate seemingly high-value, but in effect valueless and useless transactions.

As such, XRP ledger is “fraught with zero-value transactions” and “both transaction volume and token value on the XRP ledger are highly manipulable.”

It’s all about governance here

In the case of Tezos, 82% of its throughput was used for maintaining consensus.

These endorsement operations account for a vast majority of total operations which are performed by bakers and a block needs a minimum of 32 endorsements for it to be accepted.

Analyzing the top receivers’ accounts didn’t provide much but the top sending accounts divulged that most of them follow a similar pattern, “sending a small number of transactions to many different accounts.”

Also, 4 out of 5 of these accounts are regular accounts and most likely to be automated by an off-chain program.

The report further found, only a single participant has ever proposed an amendment and every proposal has always received more than 99% of approvals (or over 99% rejection in another proposal’s case).

Used by porn and betting websites

95% of transactions on EOS were the result of an airdrop of a single value token.

Overall, token transfers account alone for more than 91% of the transactions and the rest are mostly user-defined. Before the EIDOS token, about 50% of transactions belonged to betting games.

Eosio.token account is by far the most used account followed by a porn website that uses EOS as a payment system. The third account from the top is a betting website where all the bets are performed transparently using EOS.

These are followed by a decentralized exchange and a role-playing game on EOS.

The absence of transaction fees is one of the major selling points of EOS which though advantageous can also result in spammy behaviors.

In the case of EIDOS token, this resulted in the network entering congestion mode and users having to stake an amount much higher than what they would pay in transaction fees on Bitcoin.

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Author: AnTy

US Branch of 7th Largest Accounting Firm, Grant Thornton, to Leverage EOS Blockchain

  • Accounting giant firm Grant Thornton migrates clients’ inter-company transactions to EOS Blockchain via their platform Inter.x.
  • The users of Inter.x will now be able to track inter-company transactions by following unforgeable data trails.

It has been reported that industry titan in the US accounting sphere, Grant Thornton is migrating all their customer base intercompany transactions to EISIO. Their new Inter.X platform now leverages the Blockchain solution to process intercompany transactions.

This is set to include real-time analytics that will now keep track of compliance of pricing and treasury management to uphold transparency. The US Grant Thornton is part of the larger Grant Thornton International.

Intercompany transactions have been reported to be among the top most common scenarios of corporate financial amendments. They are often the hotbed of core fraudulent activities, errors, and time wastage. The chief transformation officer at Grant Thornton, Jamie Fowler is confident that Inter.x has a straightforward outlook that is able to investigate missed chances while identifying scenarios where the transactions haven’t complied with company standards.

The platform will also give the companies the ability to make quick decisions as opposed to the traditional bureaucratic approach that took effect monthly or even annually. The users of Inter.x could now trace transactions by following a trail that is practically unforgeable ensuring data integrity.

Coming up with the exact volume for their intercompany proceedings may prove to be a daunting task according to their spokesperson. However, the company made an estimated $1.9 billion in income for the last financial year according to the press release. This represents a gradual annual growth of 5.4% which according to the CEO, Bradley Preber was attributed by their combining of cutting edge tech and their business expertise to deliver value to clients.

“We posted historic revenues last year… By combining technology solutions with business knowledge we’re helping clients drive efficiencies, lower risk and improve quality”

The EOS.io 2.0 Update

Notably, the development firm behind the EOS Blockchain, Block.one released the EOS.io 2.0. this January barely three months after they released their previous version. This is the software on which the EOS Blockchain runs on. It has been reported that the EOS.io 2.0 outperforms its predecessor by up to 16 times which is even faster than Ethereum.

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Author: Lujan Odera

Coinbase Upgrades Wallet App to Simplify Crypto Transactions In A Bid to Boost Adoption

Coinbase exchange has announced an upgrade of its digital wallet in a bid to make crypto transactions much easier. According to a blog post on April 8, the firm intends to create an ecosystem where sending or receiving digital currencies will be initiated with only a few taps. This will be facilitated in over 100 countries supported by Coinbase as well as transfers to other crypto wallets.

The new changes were made on the platform’s interface and are set to improve three major front-end functions within Coinbase. They include discoverability, execution, and confidence while leveraging Coinbase for its crypto trading services.

With the new upgrade, Coinbase users can initiate a crypto transaction through the action button as long as they are operating anywhere on the app. The update will further facilitate quick and simple currency swaps giving an opportunity for new users to intuitively navigate the Coinbase ecosystem. Finally, the exchange cleaned up its visual design; this will allow more transparency and build confidence as users will better understand the underlying of their crypto transactions.

Following this milestone, Coinbase is optimistic that it will enhance its service delivery to realize an open financial ecosystem as envisioned. The blog reads,

“Along with helping you manage your crypto and earn rewards, we believe sending and receiving will be a critical element of the open financial system.

We are excited to make this service accessible to more customers on Coinbase.”

Coinbase’s Recent Changes

This exchange has made a number of fundamental developments since the year began. Last month, Coinbase updated its address features to accommodate simple usernames such as @BEG instead of the normal complex string of characters.

Coinbase also introduced Bitcoin batching to free up space within its network and save on operational costs. This move was however criticized by some crypto stakeholders who noted that the exchange was late to game given its peers had integrated this feature two years earlier.

Another notable milestone is Coinbase Pro which was launched on android for advanced and pro traders. The San Francisco based crypto exchange is currently among the leading platforms in daily volumes traded globally.

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Author: Edwin Munyui