China Stance on Crypto Remains The Same; Blockchain, Not Bitcoin

In a recent report by Chinese state media Xinhuanet, the Chinese government wants its citizens to stop paying attention to cryptocurrency but concentrate more on blockchain technology, the technology behind the cryptocurrencies.

China is emphasizing that the current rise of almost all crypto coins could seem very attractive to investors, which may not be permanent.

According to the media report, the warning is to protect the Chinese citizens and residents from making life-damaging investment decisions. However, it encourages citizens to invest more time and resources in Blockchain technology since it can be applied in various industries.

The past few weeks had seen the upsurge of Bitcoin price, as it moved above its previous all-time high achieved in 2017 when it reached $20,000 per Bitcoin. The same story goes for other cryptocurrencies. Some even tripled in price, representing massive investment profits for the crypto holder.

Bitcoin’s direction is uncertain

Various market analysts have predicted on the recent Bull Run and where the market is headed next. Some have even predicted that Bitcoin’s price could reach $100,000 soon, as market indices show.

However, China is advising its citizens not to throw their entire investment bag into Bitcoin because the market is highly volatile. Generally, the country is known to be a strong supporter and advocate of advanced technology. But this time, the government is making a distinction between blockchain and cryptocurrency.

Based on the publication, one of the reasons for the advice against cryptocurrency investment is that no one knows why Bitcoin is rising fast. As a result, the fall can be dramatic and very volatile for some investors to bear.

The Chinese government has always been very protective of its citizens when it comes to investments. In the shared post, the government described Bitcoin’s price as a “hype,” and the risk f trading on the top cryptocurrency is very high, according to the post.

Different views about blockchain and cryptocurrency

But when it comes to the technology behind Bitcoin, China is well known to be an ardent optimist. It has made concerted efforts to develop its blockchain industry and has gone a long way towards developing it’s Digital Currency Electronic Payment (DCEP) system.

The country has already passed the first stage of its DCEP testing. Additionally, China is in the process of developing its blockchain-based network service. Several public chains have already integrated into the network, including EOS, NEO, Tezos, and Ethereum. But it’s the negative stance of Bitcoin and cryptocurrency remains unchanged.

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Author: Ali Raza

Crypto Exchange Gemini Makes an Aggressive Move, Adds 15 Hot DeFi Tokens

DeFi is all the rage in today’s crypto world, and no one wants to be left behind, especially cryptocurrency exchanges.

Over the past few months, we saw these exchanges rushing to DeFi space – in the fastest ever listing of these tokens, a complete U-turn from the past few years when crypto projects had to approach them or even pay them to get their tokens listed.

Coinbase has already jumped the altcoins and DeFi mania, this time, it’s Gemini which defines DeFi as a “warm ray of sunlight shining down on us during the winter of our financial discontent.”

According to the exchange’s official announcement, “the Decentralized Finance (DeFi) revolution is coming into bloom, and it presents the possibility of permissionless, bankless, alternatives to the legacy financial system.”

The promise of DeFi is apparently “aligned” with Gemini’s “ethos” of giving its customers “greater choice, independence, and opportunity.”

While the exchange says these new tokens make up some of the major building blocks of DeFi, still, it warns that they present “unique risks,” and the listing doesn’t endorse the protocol and “makes no recommendation that” customers participate in the DeFi ecosystem.

Up until today, Gemini’s list of cryptos was extremely limited. A meager nine coins were available on the exchange for trading viz. BTC, ETH, LTC, BCH, ZEC, BAT, LINK, DAI, and OXT.

But on Friday, Tyler and Cameron Winklevoss-founded crypto exchange has made an aggressive move and extended this list to 15 more coins.

“We are proud to be the first regulated platform to offer trading and custody support in the State of New York,” for a total of 24 cryptos.

The exchange announced new support for the most popular DeFi tokens, including Balancer (BAL), Curve (CRV), Ren Network (REN), Synthetix Network (SNX), Uma (UMA), Uniswap (UNI), and Yearn.finance (YFI) which are available for both trading and custody.

Five tokens that were previously supported for custody, Decentraland (MANA), Kyber Network (KNC), Maker (MKR), Storj (STORJ), and 0x (ZRX), are now available for trading as well.

On top of this, Keep Network (KEEP), Wrapped Bitcoin (wBTC), and tBTC (tBTC), three new coins altogether, have been added to its custody.

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Author: AnTy

Crypto Exchanges FOMO into DeFi, Binance Takes on Ethereum

Everyone wants a piece of decentralized finance (DeFi), which is growing like crazy. Crypto exchanges, especially, are taking a special interest in the sector.

This week, OKEx announced that with the latest upgrade of its OKxChain network, it had become the most decentralized exchange powered public chain. Huobi also jumped in and added ten more members to its DeFi team, which is “a consortium of centralized and decentralized financial services providers.”

Binance has already been going deeper in DeFi, announcing a $100 million fund and launching Binance Smart Chain (BSC).

In this growing competition of CEXs in DeFi, OKEx CEO Jay Hao recently called out Binance Smart Chain for not being decentralized.

“Built on BSC, BakerySwap caused huge losses for many retail investors <12h after mining began, which led to protests against BSC in China & elsewhere,” said Hao adding, “Those financial losses are a result of blind trust in Binance.”

“I strongly condemn Binance’s irresponsible behavior, which damaged the crypto community’s trust and caused DeFi to regress. Trust is hard to build but easy to tear down. For the sake of users’ interests & Crypto development, pls stop these tricks and BUILD the real DeFi,” said Hao.

Binance Marching Ahead

The leading spot exchange ERC20-based stablecoin has been gaining traction lately, seeing its volume surpassing Circle and Coinbase’s USDC Coin (USDC). In the past week, over $100 million worth of Binance USD (BUSD) has flowed into the exchange.

But it was actually USDC whose supply has doubled since the beginning of August. In just two months, USDC’s supply went from 1 billion to 2 billion, while it took two years for its supply to go from zero to 1 billion.

Binance has also taken the road to yield farming, the heart of DeFi mania, which helped its BNB token return to life.

“This is a good way to participate in the yield farming craze in a relatively low risk way,” said a researcher from Crypto fund The Spartan Group. For BNB, it means a constant demand for staking/holding making it an attractive asset to own, he said.

The exchange also introduced Binance Launchpool, which attracted many DeFi projects and away from Ethereum, the center of the DeFi world on which most of the projects are built on.

Binance CEO Changpeng Zhao noted that while BNB’s market cap is still 10% of ETH, the transaction volume of BSC is 40% of the Ethereum network. Recently, he also noted that while BSC is 100% EVM compatible, it also has 20x lower fees and no congestion, to attract more developers and projects.

“Did a quarter of users move already? Or is this just demand that was curbed due to high fees? Looks like the later as ETH tx count didn’t drop much. Growing, not taking, the pie,” he said.

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Author: AnTy

Charles Schwab-backed Ethereum App Alchemy Opens for Public

  • Blockchain startup Alchemy is opening its services to any developer or company that wants to build smart contract-based projects.

Founded in 2017 by Nikil Viswanathan and Joe Lau, Alchemy powers 70% of the top applications on Ethereum and has been operating in private mode until now. The company has investors like Coinbase, Charles Schwab, Jay Z, Will Smith, Duncan Niederauer, John Hennessy, Jerry Yang, and Ruchi Sanghvi.

“We’re all here because we believe blockchain will be as powerful as the internet,” Viswanathan told Bloomberg in an interview.

Alchemy boasts 4 million users worldwide and processes $7.8 billion a year.

The San Francisco-based firm is helping the new business model, Decentralized Finance (DeFi) build. Already, the likes of stablecoin and crypto loan service MakerDAO, collectible service CryptoKitties, prediction market Augur, and non-fungible token platform OpenSea are using Alchemy to run their operations.

“If we can make development easier, then more apps will come online, and crypto will grow,” said Viswanathan.

The company is also considering going public in the future.

Both the founders are big fans of Bitcoin, but Ethereum provided them with a new set of possibilities. “The real moment for us was Ethereum,” Viswanathan said. “We saw that and said, ‘oh my god, that’s the future.’” But said currently the market doesn’t have the tools instead just picks and shovels to build skyscrapers in Ethereum.

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Author: AnTy

Deregulating Bitcoin may Increase Speculative Trading Instead of Technical Innovation

Ryozo Himino, the new top financial regulator of Japan, wants the country to take caution over promoting digital assets, arguing that instead of promoting technical innovation, it may end up fueling the speculative fire.

“Deregulating bitcoins and other cryptocurrencies may not necessarily promote technical innovation, if doing so simply increases speculative trading,” Himino told Reuters.

“We’re not thinking of taking special steps to promote cryptocurrencies,” he said. Himino became the new commissioner of the Financial Services Agency (FSA) just last month by replacing Toshihide Endo.

Last year, Himino, under Japan’s chair, spearheaded the G20 debate on regulating cryptocurrencies. Himino was in favor of setting strict regulations on the likes of Facebooks’ Libra, warning the global risks cryptocurrencies pose needs to be addressed first.

Focus on CBDC

According to him, Tokyo needs to shift the focus towards issuing a central bank digital currency (CBDC) as the ongoing coronavirus pandemic could help speed up a cashless society.

Japan has already been studying the technical obstacles to issuing a digital yen and conducting research in joint efforts with other central banks as well.

Himino welcomed these efforts and said, “We shouldn’t be worried about various challenges without even trying to design a plan (for issuing CBDCs).”

“In the end, Japan must think hard about whether to issue CBDCs because there are merits and demerits to doing so. What it can do now is to be ready so that when Japan decides to issue CBDCs, it can do so straight away.”

No “One-Size Fits All” Solution for Banks

The coronavirus (COVID-19) has been making things worse for the country’s regional banks, which are already feeling the pain of years of ultra-low interest rates and a sluggish economy.

According to Himino, there is no “one-size fits all” solution for the banks and said regional banks could use the bail-out programs of the government, cut costs, or raise capital from the markets, though the situation hasn’t been that bad, he said.

“At present, there isn’t any regional bank that is facing concerns over its financial health.”

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Author: AnTy

Analyst Reveals Four Charts That Show Anything is Possible in 2020

“The market does what it wants, when it wants to do it,” wrote Charlie Bilello, founder, and CEO of Compound Capital Advisors.

Bilello recently shared how in 2020, we have seen a “lifetime supply of material,” the things that the market hasn’t been expecting.

It has been the “real-time personification of collective human psychology, with fear and greed on full display,” that provided us with bizarre results. The crypto market is not new to such kind of happenings, but sometimes, even the crypto space manages to surprise.

We saw retail investors paying more than 735% premium to gain exposure to the second-largest cryptocurrency by market cap. Although the premium on Grayscale Ethereum Trust has collapsed since then, it remains particularly high with ETHE at over $70 (each share represents 0.09377463 ETH) while Ether is trading at $244.

However, things were even more bizarre in the mainstream market. If you thought “stocks can’t go up during recession,” you have been proved wrong when stocks rallied hard in Q2 of 2020.

After crashing in March, stocks jumped, Nasdaq climbed to make a new all-time high. The tech stocks were mainly responsible for this as while Apple and Amazon saw their valuation rising more than $10.5 trillion, Tesla has been up 230% YTD.

Even stocks of those companies that went bankrupt saw substantial gains. And Nicola Corp. garnered a market cap of $26 billion with zero sales or earnings.

Not only stocks rallied hard, the terms “oversold,” or ”at support” and “overbought” or “at resistance” lost their meaning.

These stocks were driven by all the free money pumped by the central banks. If you thought the Fed was “out of bullets” and won’t do anymore, the central bank proved wrong through unprecedented measures, which now has many experts warning about the inflation.

The Fed’s balance sheet entered 2020 at around $4 trillion, only to surpass $7 trillion in late May.

But 2020 didn’t only see the stocks skyrocketing but also plunging into nothingness and then continuing to go lower.

Can asset prices go below $0, this year showed us that yes they could. In April, the price of crude oil went negative for the first time. At that time, May futures for US crude oil WTI fell to minus $37.63 a barrel. (can Bitcoin fall to zero?)

The oil market saw its worst crisis in a generation where traders were willing to pay to get somebody to take crude off their hands after the lockdown to stop the spread of coronavirus pandemic wiped all the demand while the market was over-supplied.

Moreover, this year the national debt continued to rise to new highs while the interest rates on some US Treasuries also plunged into negative territory.

There are still five and a half months left in 2020, and the government is planning to put more money into the system while inflation has started to be seen in goods prices, and the recession has been declared.

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Author: AnTy

Security Token, Crypto Exchange INX To Launch $130M IPO In April While Seeking BitLicense

The cryptocurrency and security token exchange company INX Ltd. wants to launch in April an $130 million initial public offering (IPO).

The IPO will be the largest securities sale registered by a blockchain-based company. The launch will include presentations to potential investors. The presentations were initially expected to begin in January, but INX hired an investment bank from Europe to be its IPO’s lead underwriter.

Relocation to New York and Obtaining a BitLicense

In order to double down on compliance, INX plans to move from Gibraltar, a country with a friendly blockchain jurisdiction, to New York. This means it will need a BitLicense from the state of New York. People who know more about the situation said INX is already in discussions with the New York Department of Financial Services (NYDFS) to get this license. Calling the requirements for the license onerous, ShapeShift and Kraken stopped their New York activity, but INX is determined to get it, especially since the NYDFS recently started to reassess its requirements.

IPO Proceeds to Fund INX Digital Crypto Exchange and INX Securities

The IPO’s proceeds will fund the INX Digital crypto exchange and the INX Securities security token platform. Among INX’s partners, BitGo and Anchorage will custody the digital assets for the exchange during preparations. BitGo was mentioned by INX in an SEC filing, whereas Anchorage already confirmed that it’s involved.

Tokensoft will provide advisory and technical services, while Quantstamp will be the one auditing the smart contract code, says the same SEC filing. The token released by INX will be listed on both on the INX security token platform and other exchanges. Those who hold INX tokens will get a share from the profits made by the company and be ahead of equity investors in case of repayment as a result of bankruptcy. The tokens will work as trading fees payment too.

INX Has Money Transmitted Licenses in 8 US States

Meanwhile, INX managed to obtain money transmitter licenses from 8 states in the US, which means it will take care of crypto-to-crypto and fiat on-ramp transactions. The top 10 coins will be listed by the exchange according to market capitalization, whereas new derivatives and coins are sure to be added later.

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Author: Oana Ularu

UK’s FCA Seeks Blockchain, Crypto Expert With Knowledge Of 5AMLD’s Digital Assets Regulations

The major financial authority in the UK, known as the Financial Conduct Authority (FCA), wants to hire a cryptocurrency specialist.

More specifically, the FCA wishes to work with someone who has crypto expertise in order to know how to address digital assets according to the EU’s 5th Anti-Money Laundering Directive (AMLD5). At least this is what an FCA LinkedIn posting from February 6 says. AMLD5 came into effect last month, on the 10th. It represents the efforts made by authorities to deal with money laundering activities in Europe.

The Expert Will Be a Part of the Core Function Team at the FCA

While the UK exited the EU 6 days ago, on January 31, the British government still needs to pay attention to the European cryptocurrency law that has recently been enforced, this being the reason why it’s looking for a crypto expert to join its core function team, which is the team dealing with intelligence and has been responsible with the interpretation of the AMLD5 regulation since January this year. As the job posting says, this person would be responsible with the enforcement and supervision of the regulation, also with processing applications of firms wanting to join the financial services industry in the UK.

The FCA Has Been Very Active in the Crypto Space

The FCA has many times made its voice heard in the crypto space. It has approved the operations of important firms in the industry and closely investigated what happened in the country’s crypto space. Back in July 2019, it announced that it won’t regulate 2 of the most used cryptocurrencies in the world: Bitcoin (BTC) and Ether (ETH).

The FCA’s new action on AMLD5 arrives soon after the agency made the official announcement that it’s going to start supervising AML compliance of crypto companies in the country. It has been reported that the rules FCA plans to impose are going to be very stringent.

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Author: Oana Ularu

US Lawmakers Seeking to Ban Companies From Using End-to-End Encryption With a New Draft Bill

  • Attorney General William Barr wants to ban end-to-end encryption
  • The ban “potentially unconstitutional under the First, Fourth, and Fifth Amendments”
  • Australia passed the Assistance and Access Act in 2018 but now debating changes to it

US lawmakers and the Department of Justice are looking to ban end-to-end encryption, making Internet users vulnerable to a host of attacks on their privacy from both malicious hackers and from the government.

Attorney General William Barr along with Sen. Senator Richard Blumenthal (D-CT) and Sen. Lindsey Graham (R-SC) seeking to ban companies from using end-to-end encryption with a new draft bill called “Eliminating Abusive and Rampant Neglect of Interactive Technologies (or EARN IT) Act.”

If companies do not follow the practices set by a national commission, that would be comprised of 15 people and led by Barr himself, the act would make them liable in state criminal cases and civil lawsuits over child abuse and exploitation.

The ban, however, “is potentially unconstitutional under the First, Fourth, and Fifth Amendments,” said Riana Pfefferkorn, a member of the Stanford Law School’s Center for Internet and Society.

If passed, the law would also require companies like Telegram to allow backdoor government access to encrypted information.

Bitcoin bull and Fundstrat’s Tom Lee also said it “would have some negative impact on crypto and digital assets which are grounded by cryptography.”

Resist pressure from all governments

Barr claimed to want to protect the children by this move. Last week, at the White House Summit on Human Trafficking, Barr said encryption was aiding human traffickers.

“We live in a digital age, and like everyone else, human traffickers are relying increasingly on digital communication and the Internet … and more and more, the evidence we rely on to detect and to deal with these predators is digital evidence.”

“However, increasingly, this evidence is being encrypted.”

Barr said that while encryption is important to protect consumers from cybercriminals, “military-grade encryption” means they can’t get access to this data. He said,

“We just can’t have chat rooms and websites that are involved in grooming children victims or selling trafficked women — sites that are impenetrable to law enforcement—and we have to do something about this.”

Previously Barr said that technology companies using end-to-end advanced encryption are effectively turning devices into “law-free zones.”

Brett Max Kaufman, a senior staff lawyer in the Center for Democracy at the American Civil Liberties Union is in opposition to this as he said,

“Encryption reliably protects consumers’ sensitive data.”

“There is no way to give the F.B.I. access to encrypted communications without giving the same access to every government on the planet. Technology providers should continue to make their products as safe as possible and resist pressure from all governments to undermine the security of the tools they offer.”

Australia Trying it

A similar Act was passed in Australia. The Assistance and Access Act in late 2018 was passed that gives Australian authorities and agencies the power to compel technology companies and their employees to provide access to encrypted data.

The Act was widely criticized for undermining the security of encryption and potential abuse of the new powers. During the second half of last year, 18 technical requests were issued. Assistant minister for cybersecurity Tim Watts said last year,

“It was a failure of parliamentary process, a failure of bipartisanship on national security and a failure of the Morrison government to keep its word. Since then, Australia’s technology sector, particularly our cyber security sector, has been paying the price of these failures. Labor is acting to right these wrongs.”

Now, the amendments to the Act are being debated in the Senate.

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Author: AnTy

Will Starbucks Use Crypto To Manage Its SBUX Prepaid Cards? Korean Banks Feel The Threat

The coffee behemoth Starbucks wants to use crypto to manage their almost $1.6 billion in cash obtained through customer’s use of prepaid gift cards.

The Seattle-based company has over 30,000 stores all over the world. If it expands its asset management business, it’s going to become a fintech giant and a notable competitor for banks in Korea. At the moments, Starbucks is offering its customers prepaid cards in SBUX, allowing for the coffees to be taken in advance. It seems people who want coffee worth of $1.6 billion by using their gift cards are acting just like creditors who really put their trust in the company.

Starbucks Loaning Money Without Paying Interest

This strategy is a way in which Starbucks is loaning money without paying interest. As a result of problems with regulations and because it has to manage many fiat currencies, it’s only logical for the company to manage its huge loans in crypto.

SBUX Was Used as an Example for Multinationals

In April 2019, Gavin Brown, the founder of Blockchain Capital, has made the suggestion for multinationals to launch their own coins, just like Starbucks launched the SBUX prepaid cards. It’s not yet known if the coffee giant is going to issue a cryptocurrency or continue to rely on the already existing one.

However, it has been dealing with crypto for some time, as it has made a serious investment in Bakkt, the ICE-backed Bitcoin (BTC) exchange. The two companies have partnered up to work on a consumer app for making crypto payments to Starbucks.

Korean Banking Groups Alarmed

Many Korean banking groups have been alarmed by Starbuck’s decisions, and have described the company as their rival because it threatens the survival of banks on the financial market. Their fears are that Starbucks is going to stir things up for the conventional financial setting by offering customers prepaid gift cards, which cards haven’t yet been financially regulated. This is what Kim Jung-tai, the Chairman of Hana Financial Groups said about Starbucks:

“Technologies have allowed coffee companies like Starbucks to be our rivals. It will be fine to call Starbucks an unregulated bank, not a mere coffee company.”

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Author: Oana Ularu