Decentralized Finance Firm, UNION, Raises $3.9M to Expand Risk Management Protection

UNION, a defi risk management firm, raised $3.9 million in a funding round, which drew participation from several crypto trading companies and venture capital firms. Some of the key firms that led the funding round include 3 Commas, Solidity Ventures, AAM, Spark Digital Capital, Alameda Research, Black Edge Capital, and Alpha Chain.

Decentralized finance was slated to become the success story of 2020 for the crypto world; however, the defi ecosystem has started to show the vulnerabilities which many analysts predicted earlier. In recent times, there have been reports of several defi projects cropping up within weeks and managed to create a market cap of tens of millions of dollars just because of the hype surrounding defi.

The popularity also led to several scam tokens and platforms. With the rising vulnerabilities and risks in the defi market, Union comes in as a safeguard against some of the most common risks associated with defi these days. Those risks include glitchy smart contracts, overexposure to an asset, layer 1 risk (entire protocol fails), impermanent loss (specific to liquidity providers), and collateralization risk.

UNION Promises Complete Risk Management

UNION is looking to cover all the risks associated with the defi space and believe a complete package like theirs is more economical and secure than insurance against individual risks. Union co-founder Michael Beck believes that security and protection for customers are necessary to scale the ecosystem further. He said,

“As DeFi is still growing, it would be disingenuous of anyone to state that they ‘know all the risks’ of Defi.”

Beck noted that such a mechanism “is necessary for DeFi protection to scale with DeFi itself.” He added,

“No one can guarantee what regulators will do, but as of right now, where people can use DeFI, they can use our protection tools.”

Read Original/a>
Author: James W

EU Draft Proposal Seeks to Access Data from End-to-end Encryption Platforms

The European Union (EU) could soon limit end-to-end encryption according to a draft leaked by the German Presidency, which seeks to increase the monitoring efficiency by Intelligence authorities and police.

This development comes in the wake of Vienna’s terrorist attack that took 4 lives and left 23 others with injuries. The news, which was initially reported by an Austrian media dubbed ‘FM4’, noted concerns on the accessibility of data from encrypted platforms like WhatsApp and Signal.

According to a draft deciphered by the Associated Press, this proposed piece will harmonize the process of accessing encrypted data,

“Competent authorities must be able to access data in a lawful and targeted manner, in full respect of fundamental rights and the data protection regime, while upholding cybersecurity.”

The draft, which is dated Nov 6, goes on to highlight those technical solutions to enable data access in encrypted platforms must be in line ‘with the principles of legality, transparency, necessity, and proportionality.’ However, it is quite noteworthy that the draft proposal does not call for total encryption; instead, it is set to initiate an exploratory phase that will guide stakeholders, including the EU, towards adopting favorable legislation in matters of end-to-end encryption.

Activists Decry the Move

As expected, the draft has already been met with opposition from rights activists who place fundamental importance on privacy and security. In fact, a German lawmaker Anke Domscheit-Berg, a left-wing politician, has voiced their concerns about the proposed draft. The lawmaker accused EU governments of masking under the extremism narrative to introduce higher surveillance within their jurisdictions.

According to Anke, the logic of accessing end-to-end encryption platforms does not make sense. He gave this example to support the argument,

“Anyone who finds an open back door into my house can enter it; the same is true for back doors in software …

The proposed EU regulation is an attack on the integrity of digital infrastructure and, therefore, hazardous.”

It appears he is not the only one who has called out the draft proposal; other stakeholders that have voiced their opinions against it include the executive director of Open Privacy Sarah Jamie Lewis and the director of Cybersecurity at Electronic Frontier Foundation, Eva Galperin. With the document set for presentation to the EU council on Nov 19, only time will tell if this draft will be adopted into law by member countries.

Read Original/a>
Author: Edwin Munyui

Euro’s Dominance at Risk of Replacement by Digital Yuan in the Next Five Years: dGen Report

The Euro might be overtaken by China’s digital Yuan as soon as 2025 if the European Union will not have launched a CBDC by then, highlights the latest research report by German-domiciled think tank, dGen. This release which was published on September 9 focuses on the ramifications a major CBDC on the Eurozone as well as the potential of a digital Euro to be ahead of the pack.

As the crypto industry comes of age, regulators have found themselves at a cross-road in the creation of oversight mechanisms. Well, China which began research in this space as early as 2014 recently launched its digital yuan ‘DC/EP’, sparking a hype towards the global adoption of CBCD’s. Since then, a number of central banks including the European Union have floated the idea of piloting their own digital currencies.

The EU progress on CBDC’s has, however, been criticized by prominent contributors in Europe’s blockchain ecosystem including the Head of Frankfurt’s School Blockchain Center, Philipp Sandner,

‘[The] ECB’s reaction has been too slow. Especially, the benefits from a CBDC for the industry, e.g., based on programmable money, are currently neglected. Given Libra and the DC/EP, the ECB has to react quickly to keep its geopolitical position’.

According to the report, the launch of a digital Euro would be strategic for the region to continue its global dominance as the second most held fiat reserve; only this time a digital Euro will be used instead. Consequently, the research notes that a digital Euro has the potential to transform the global economy while acting as the fundamental pillar of a virtual monetary ecosystem in the Eurozone.

U.S Dollar Still Safe!

Unlike the Euro whose odds against the DC/EP are less favorable, dGen predicts that the digital yuan will not unseat the world’s reserve currency, at least not yet. The research highlights China’s political unrest as one of the factors that could hinder its CBDC’s global adoption at level to compete with the U.S dollar. In addition, smaller nations are more likely to adopt a digital dollar as opposed to the yuan given its already established dominance and ease of access globally. The research reads,

“In the coming decade, with the launch of a digital Dollar, digital Yuan, and digital Euro, we predict that smaller nations will take the path of least resistance, and opt for using and storing the digital Dollar.”

Global CBDC Integration Could Hit 60% in the next Decade

Other predictions made by the German think tank include the possibility of a 60% global CBDC integration by 2030. As per the dGen insights, three out of five nations will have completely replaced their fiat currencies with a central bank backed digital asset by then. On this front, China and Bahamas in the West Indies Caribbean have already set a pace based on the CBDC progress within the two jurisdictions.

Last but not least, the report predicted that CBDC’s will have to co-exist with private stablecoins which have now been in the crypto space for quite a while. This is because of their value proposition in the volatile cryptocurrency market as well as the ability to circumvent authorities through blockchain tech, regardless of their position when it comes to digital assets.

Read Original/a>
Author: Edwin Munyui

Liechtenstein’s Regulator Declines Binance Applications As Major Shareholder In Bank

  • Liechtenstein FMA denies the Binance application as a major shareholder in Union Bank AG.
  • Binance CEO, CZ, also locked out from a seat on the Board of Directors.
  • The distressed bank now looks at full liquidation.

Reports from a Swiss news outlet, Inside Paradeplatz, stated that the Liechtenstein Financial Market Authority, FMA, had rejected the Binance exchange application to take over the reigns at Union Bank as a major shareholder. The report further states, Binance CEO, Changpeng “CZ” Zhao application to sit at the bank’s Board of Directors was also swiftly rejected in a ruling released on July 10th.

However, the world’s largest crypto exchange came out strongly at the start of the week to quash those claims stating they’ve never made an application to the FMA. In a Telegram message first reported by CoinDesk, a spokesperson from the firm said,

“Binance did not try to invest, and did not try to put CZ on the board.”

A Distressed Bank

Union Bank declared bankruptcy after a long battle with the authorities and multiple attempts to save the bank were fruitless. Notwithstanding, two of the banks’ early founders, Ukrainian-runaway investor, Konstantyn Zhevago, and another unidentified Iranian shareholder have been on the Interpol most wanted criminals list since the end of 2019 due to money laundering charges.

At the end of 2019, one of the insiders reportedly told Union Bank AG’s shareholders Binance was at the cusp of acquiring a major stake in the bank to save it from crumbling. The reports stated Binance had to pay about 15 million CHF (~$15.7 million) as well as file its approval to become a shareholder with the FMA. The Swiss news outlet reports further claims CZ was ready to convert his crypto to raise the amount needed through a newly created CL1 Foundation.

Binance denied these allegations earlier when the rumors first came about.

The last Opportunity for Union Bank, Gone…

This represents the last opportunity for the bank to find new investors to save it from collapse as the FMA also denied any expert advice on Binance taking over the distressed bank.

The Vaduz-based bank held a shareholders meeting on Aug 7th to discuss the future of the bank following Binance’s and CZ’s crushed advances. In a statement by the bank, the shareholders decided to liquidate the bank as they could not meet the capital adequacy requirements of the European Capital Adequacy Ordinance (CRR) implemented on 1 January 2020.

While not mentioning any specific investor, the bank stated the Board of Director’s search for acceptable investors was cut short by FMA rejections, hence the reason for non-attainment of the CRR. The statement reads,

“The reason for the non-attainment of the capital adequacy requirements was that no shareholder acceptable to the FMA could be found who would have contributed the necessary funds.”

No further comments were provided by FMA and the Union Bank AG. Customers’ deposits remain secure.

Read Original/a>
Author: Lujan Odera

European Union Economic Council Aims to Introduce ‘Tougher’ Laws On ‘Global’ Stablecoins

  • Chief economic minister in the European Union calls for tougher and more stringent regulations to govern the cryptocurrency industry
  • Targeting global stablecoin projects such as Facebook’s Libra

In a speech made during the Digital Finance Outreach Conference 2020, Executive Vice President of the European Commission, Valdis Dombrovskis, spoke on the regulation of the digital finance industry, urging EU states to take the step forward in guiding proper regulation of the digital assets.

As the world continues its battle to stop the spread of COVID-19, many states and organizations have turned to digital payments, and Valdis does not expect this trend to go away any time soon. He said,

“Once the crisis passes, I would not expect the process of embracing digitalization to slow down – given how quickly technology evolves and the strong demand.”

The future is pointing towards a digital finance economy, and Dombrovskis is urging the European Union to take the step forward to “embrace digital finance and make it mainstream.” However, the challenge of regulation always arises in light of new technologies given the rapid movement in the field.

To remove these regulatory barriers, the commission is looking to launch a digital finance strategy for Europe later in the year. The strategy will focus on creating laws and regulations to make the most out of digital finance, enabling the continent to compete with the U.S, parts of Asia, and Russia in the space.

Crypto assets at the test

Crypto assets and distributed ledger technologies are the first tests for the commission. The fragmented regulation of crypto across European countries is making it difficult for market integration and companies to carry out businesses freely across the trade bloc. Dombrovskis said,

“Lack of legal certainty is often cited as the main barrier to developing a sound crypto-asset market in the EU.”

While the speech gives little away on the planned crypto regulation regime, Valdis said the new regulation strategy would boost innovation and development in digital finance across Europe through a harmonized rulebook.

A closer look at stablecoins

Valdis also differentiated the need to have a separate regulation handbook for “global stablecoins” backed by fiat currency. He believes global stablecoins such as Libra “are likely to raise additional challenges in terms of financial stability and monetary policy,” hence the need to adopt stringer policies on them.

The speech did not state any specific stablecoin, but the rise of Facebook’s Libra currency has seen several financial authorities take a keen look at the stablecoin.

Read Original/a>
Author: Lujan Odera

Estonia Revokes License of Over 500 Crypto Companies to Curb Money Laundering

European Union member Estonia is now cracking down on cryptocurrency firms to attack money laundering in the country.

Estonia has been in the spotlight for Europe’s biggest money-laundering scandal, about €200 billion were laundered from Denmark’s biggest financial institution Danske Bank’s Estonian branch from 2007-2015. To put it in perspective, in 2017 Estonia’s GDP was €29 billion.

The scandal raises serious questions over the capacity of not only banks but also the government in combating money laundering. Now, the country has set its eyes on crypto businesses that exchange and help hold virtual currencies like bitcoin, reported Bloomberg.

Interestingly, Estonia was among the first in the EU to license these firms in late 2017.

But now, the regulators have stripped more than 500, a third of the total permits this year. According to Madis Reimand, head of the Baltic country’s Financial Intelligence Unit, the decision was made because the regulators are worried these firms are using their local credentials to help commit fraud elsewhere. Reimand told Bloomberg,

“This is a first step in tidying up the market, allowing us to take care of the most urgent issues by permitting operations only for companies that can be subjected to Estonian supervision and coercive measures.”

According to FIU’s annual report released on Thursday, there has been an increase in sectoral risks in 2019 amid “extremely fast” growth in service providers.

Out of the 56 supervisory inspections last year, 34 were of the virtual currency companies suspected of embezzlement of clients and providing financial services abroad without proper authorization.

So far, the crackdown has been those companies that failed to start operations in Estonia within six months of receiving the permit.

They were “probably giving out those permits too easily to God knows what companies,” which were then used to “create credibility for some evil schemes,” said Andre Nomm, a member of the Estonian Financial Supervision Authority’s management board last year.

After warnings from supervisors about the increase in issuance since 2018, parliament has also been enacting stricter licensing rules.

Now, more than half of the remaining 900 cryptocurrencies risk losing their licenses if they have no operations in Estonia.

Read Original/a>
Author: AnTy

Even At Sub $200B Market Cap, Bitcoin is A Store of Value Now: Macro Trader Dan Tapiero

  • The Fed is being too “aggressive” and responding “wrongly” – chief financial economist of MUFG Union Bank
  • 200 billion bitcoin means it’s SoV now – macro trader Dan Tapiero
  • Coinbase CEO Brian Armstrong believes falling stock market and interest rate cuts may lead to growth in crypto this year

While the US stock market has been recording considerable losses despite the Federal reserve’s emergency 50 basis point rate cut, investors have piled into the safe haven asset Treasuries to combat the economic impact of the deadly coronavirus (covid-19).

The two-year Treasury yield has dropped to 0.70% while the 10-year plunged for the first time ever to below 1%. Investors have fled from the risk assets as the spreading virus threatens to derail global growth. The other safe haven asset, gold, has also been rising during this time, climbing to a 7-year high.

According to Chris Rupkey, chief financial economist for MUFG Union Bank, the Fed is being too “aggressive” and responding “wrongly” to the financial markets. “We aren’t in a recession yet,” and Fed cutting rates won’t keep it from coming. He added,

“Moving between meetings with a bigger than normal interest rate cut looks like Fed officials are panicking as much as stock market investors did last week.”

Bitcoin is a SoV

Macro trader Dan Tapiero says on Twitter,

However, this could be good for the crypto market, bitcoin especially, as the crypto asset like gold have non-negative yields.

Bitcoin currently is a store of value as Tapiero explains,

The Year of Crypto

Coinbase CEO Brian Armstrong also feels,

“A down stock market and interest rate cuts may lead to growth in crypto this year. Governments around the world are likely to look to stimulate the economy in any way they can, including using quantitative easing and expanding the money supply (printing money).”

He pointed out how China has already printed $173 billion which may lead to the movement of these finds into cryptocurrencies, which,

“Are viewed as a hedge against inflation.”

“This could be the year where the mindset of institutional investors begins to shift, from crypto as a venture bet, to crypto as a reserve currency.”

However, the crypto community was quick to point out that it isn’t crypto rather bitcoin. Today, Amstrong again took to Twitter,

It is interesting that “the CEO of the world’s most prominent Bitcoin-related company seems so skeptical of Bitcoin” said Joe Weisenthal Co-host of ‘What’d You Miss?’ on Bloomberg TV.

Read Original/a>
Author: AnTy

European Union Launches New Blockchain and AI Fund To Avoid Falling Behind US And China

The European Union (EU) and its commission have set up a new fund that will be dedicated to providing capital for artificial intelligence (AI) and blockchain projects in the region.

According to the reports, the EU donated around $100 million EUR to the fund and private investors are expected to bring up at least $300 million EUR. National banks will be able to invest in the fund, too. Some reports indicate that, in the future, the venture capital initiative could raise up to $2 billion EUR using the InvestEU Programme.

One of the main goals of the new project is to address something that is considered a flaw in the EU. While a lot of money was used in projects, large scale projects simply did not receive enough attention in the region.

Right now, the EU is already spending a lot on blockchain technology. During the year, the union spent around $674 million USD, mostly on proof of concept projects. The United States, however, is the biggest spender in the area, with over $1.1 million USD spent on the technology. China is the second-largest spender, with $319 million USD. No country in the EU has overcome that mark.

The European Investment Fund, the organization behind the venture capital project, has affirmed that the creation of the fund will certainly help the investor community in the EU. According to them, innovative technologies such as blockchain and AI are great investments and now, with the involvement of national banks, the investments in the area can be even bigger.

Read Original/a>
Author: Gabriel Machado

French Finance Minister: Develop Euro Zone Crypto Rules And Create A ‘Public Digital Currency’ For EU

Bruno Le Maire, French Finance Minister, has called on European Union member states to come up with rules and regulations that can be used in the zone as well as consider a public digital currency which is capable of rivaling Facebook’s Libra currency, Reuters reports.

Speaking at the sidelines of EU finance ministers conference in Helsinki, Le Maire disclosed to reporters that he will propose a discussion on a probable European public digital currency with other ministers in the region from next month.

Le Maire also raised his concerns about the upcoming Libra stablecoin saying that it may be a major risk to consumers, global financial wellbeing as well as the sovereignty of the European nations.

The French Finance Minister also pleaded with the EU members to expedite the implementation of the measures to reduce cross border payments costs. Reuters states that the eurozone real-time payments has been available from the start of 2017, however, only a bunch of few banks from the zones have embraced the scheme. In addition, the scheme largely deals with domestic payments.

Le Maire also urged the EU block to consider its approach when it comes to regulating cryptocurrencies arguing that it needs to be done at the EU level. The minister said that Libra should not be launched at the EU states until the regulators can come up with a single common framework on how to regulate it. In the recent past, European regulators have been debating on whether cryptos should be regulated as securities, payment platforms or currencies.

Based on the legal framework confusion, European Commission spokesperson said that based on the available information about Libra, it was difficult to confidently say the type of EU regulations that would apply.

Le Maire has also ruled out the launching of the Faebook’s project among the EU members until the lingering concerns are fully addressed.

Cointelegraph reports that previously Le Maire had indicated that he will seek guarantees that Libra would not be utilized for illicit financial activities.

Meanwhile former International Monetary Fund (IMF) head, Christine Lagarde, who is poised to become the next president of European Central Bank’s (ECB) is pushing for a European digital currency and it could be a matter of time before it comes to fruition.

Read Original/a>
Author: Joseph Kibe

Siberia: Bitcoin Mining Farms Are Flourishing Over A Ruined Industry

After the end of the Soviet Union and the economic fallout that happened in Russia, several industry facilities were abandoned. Now, cryptocurrency miners are giving these abandoned places a new breath of life by using them as mining farms.

Most of these platforms were built during the Cold War and were originally used for manufacturing. Now, the installations and the Bratsk hydroelectric station, which are set in Siberia, are being used for BTC mining.

Several mining companies have been using the legacy of the Soviet Union, the hydroelectric station, as a way to get cheap energy. As the industry is no longer strong in the region, it is really inexpensive to use it for mining.

Siberia also has a pretty cold climate, so it is becoming an important mining hub right now. Several companies from other countries are entering Russia in order to also be benefitted from this emerging market.

According to Dmitry Ozersky, the CEO of one of the now local mining companies, Eletro Farm, there is a huge surplus of power in Russia. The Soviet Union created a lot of power stations, but the economic crisis made several places shut down.

After the new system was enacted and the country got in its feet again, the issue was that no one wanted to use the surplus power. Eletro Farm has over 18,000 ASIC miners and, according to its executives, is one of the largest operations around.

Regions such as Siberia still have industrial activity, but there is simply not a huge demand for it anymore. This was seen by miners who decided to takeover. They bought these cheap factories and used cheap electricity to get high profits. With their help, the region is starting to get some of its former importance back.

Read Original/a>
Author: Gabriel Machado