New AML rules target crypto businesses in Norway

Effective Oct. 15, cryptocurrency-related companies in Norway—including branches of multinational companies—will have to adhere to a new set of anti-money laundering regulations (AML) set by the Financial Supervisory Authority of Norway, also known as the Finanstilsynet.

The new regulations apply to cryptocurrency storage services and providers offering exchange services between cryptocurrencies and fiats, as well as “platforms that facilitate trading and exchanges by connecting buyers and sellers.” Crypto-to-crypto exchange platforms, however, are exempt from the new Money Laundering Act.

Companies storing private keys on behalf of clients are considered to be involved in the transfer, storage or purchase of virtual currency. Therefore, all companies conducting such operations will have to follow these new laws. This, however, will not apply to companies offering private cryptographic key storage.

Companies in the crypto sector will have until January 15, 2019, to comply with the new Money Laundering Act, which stated: “The Ministry may in regulations lay down rules making this Act applicable to undertakings engaged in the mediation of financing by way of donation, and to exchange service platforms and custodian wallet providers of virtual currency.”

In explaining to what extent the new laws will apply, the authority stated that FSA has the duty to monitor money-laundering activities done by virtual currencies and storage providers. These new rules were created to stop potential illegal activities from taking place.

“Service providers are subject to the regulatory framework by virtue of the services they offer, regardless of how the service is organized. This also covers service providers that currently operate without being registered in the enterprise register, which operate over private accounts,” according to Finanstilsynet.

In addition, Finanstilsynet explained that crypto companies in Norway will be required to register with the authority and provide the necessary documents to show their operations. Finanstilsynet will also require customers to prove their identity and answer questions on the purpose of their transaction, the origin of their funds and so forth.

These rules also impose reporting requirements on crypto services providers in the country. However, this will not affect people who buy or sell their own cryptocurrencies for private purposes. It will also not affect these who occasionally assist friends and acquaintances with the purchase and sale of virtual currencies.

Companies who fail to comply with these new rules will have face penalties from the authority.

“Finanstilsynet will ensure that virtual currency exchange and retention providers comply with the money laundering rules. However, FSA does not have any tasks related to the monitoring of other parts of these providers, such as investor protection or advice requirements,” according to the government agency.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Passport fees in Venezuela must be paid in Petro, gov’t says

Starting this week, residents in Venezuela can only use Petro—the state-backed cryptocurrency—to pay for their passport fees. This was the announcement made by Venezuela’s vice president, Delcy Rodriguez, last Oct. 5.

New passport applications will cost two Petros, or about 7,200 bolivars ($115), while an extension will cost one Petro. This might seem a reasonable amount to those in the European Union or in the United States, but 7,200 bolivars is about four times higher than the average monthly minimum wage in Venezuela.

For Venezuelans who are abroad, Rodriguez said their passports will cost $200 for issuance and $100 for extensions, El Universal reported.

The announcement comes a month ahead of Petro’s official launch date in November.

The Venezuelan government has made various changes since the beginning of this year, among them is introducing state cryptocurrency and changing the national currency. All these efforts are aimed at trying to redeem the country’s economy. Venezuela’s president, Nicolas Maduro, introduced the petro, which according to its whitepaper is supposed to be backed by the country’s oil reserves. Since its introduction, the Petro has faced many criticisms from different fronts.

Fran Strajnar, CEO and co-founder of data and research company Brave New Coin, opined, “It’s not a bad idea to kick-start adoption. In fact, it’s a nice contrast to other countries, where you cannot use crypto to pay for government services and taxes. However, we are yet to see adoption of this currency and we wonder how difficult it might be, for everyday citizens to procure the currency in the first place.”

President Maduro plans to have a public launch on November 5, 2018. Petro had its presale back in February.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Israel Securities Authority’s ‘Yael’ messenger now on blockchain

As part of its effort to improve security, the Israel Securities Authority has embedded blockchain technology in its messaging system, called Yael, The Times of Israel reported.

Taldor, an Israeli cybersecurity firm, developed the blockchain integration about three months ago. The ISA will now be able to prevent fraud and insiders trading and verify the authenticity and provenance of messages through the immutable blockchain.

By integrating the government messaging system with the blockchain tech, according to the ISA, ensures “the credibility of the information relayed to supervised bodies.” With blockchain, the messages’ authenticity are verified, thus preventing fraud and even from being edited or deleted.

The regulatory body also has plans to integrate blockchain to two other systems: Magna, an archive of reports of organisations supervised by ISA, and an online shareholder voting platform developed by the ISA that allows investors to participate in meetings wherever they are.

Natan Hershkovitz, director of the agency’s Information Systems Department explained, “Implementing blockchain technology in the ISA’s information systems makes it one of the global leading authorities in securing the information provided to the public.”

Israel’s interest in the blockchain technology is not new; the Ministry of Finance and the Bank of Israel have been working together on a state-sponsored cryptocurrency as far back as February. In March, however, the ISA banned companies that primarily invested or mine cryptos from listing on the Tel Aviv Stock Exchange. This was done in a bid to protect investors, with the ISA promising that it would evaluate new tokens on use case basis.

According to Hershkovitz, “We are seeing a growing trend in the world in general and in the financial sector in particular of implementing innovative and groundbreaking technology.” He also explained that integrating the blockchain technology into the information systems of the ISA places it as “one of the world’s leading authorities in terms of the security and reliability of information that it passes to the public.”

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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No, really: Cryptocurrencies are commodities in US

For years, the U.S. Commodity Futures Trading Commission (CFTC) has been clear on its stance—cryptocurrencies are commodities, just like oil and corn. And if that message isn’t clear enough, there are now a couple of federal judges confirming that yes, digital tokens are indeed commodities subject to the authority of the U.S. regulator.

Chris Giancarlo, chairman of CFTC, noted that Federal Judge Rya Zobel has ruled that the U.S. derivatives watchdog has the “authority to prosecute fraud and manipulation in the crypto space.” This is in connection with the case of My Big Coin Pay, which had argued that virtual currencies were not commodities—as they were commonly defined—hence, the CFTC has no jurisdiction in their case against My Big Coin Pay’s operator, Randall Crater.

However, the Massachusetts judge backed the CFTC in its interpretation of virtual currencies as commodities, and in the process, dismissed My Big Coin Pay’s petition to have the case set aside.

In her ruling, Zobel referred to the Bfxna Inc. dba Bitfinex case of June 2016. In this case, the CFTC had fined Bitfinex $75,000 at the time for failing to register as a futures commission merchant and offering illegal off-exchange financed retail commodity transactions. According to Zobel, this case shows the clear definition of cryptocurrencies as commodities.

Zobel’s ruling comes on the heels of another court order in August, which also recognized CFTC’s authority over digital currencies.

The case was against Patrick Kerry McDonnell, operator of Cabbage Tech Corp. or Coin Drop Markets. CFTC accused McDonnell of fraud in connection with virtual currencies, claiming the man had been introducing himself as an expert offering crypto investment advice, only to disappear with investors’ money.

McDonnell’s case fanned the flame of which U.S. agency has jurisdiction over cryptocurrencies. Because cryptocurrencies are still relatively new, legislation does not cover them yet, so there was a question whether the CFTC could “exercise its jurisdiction over fraud that does not directly involve the sale of futures or derivative contracts.” U.S. District Court for the Eastern District of New York Judge Jack B. Weinstein ruled in favor of the CFTC, saying cryptocurrencies are considered as commodities and the CFTC therefore has the authority to regulate them.

Zobel also cited the 2015 Coinflip case, which was essentially the first case where cryptocurrency has been properly defined as commodities by the U.S. regulator. According to the CFTC, the then-San Francisco-based crypto exchange facilitated commodity options-related transactions without complying with the Commodity Exchange Act (CEA) and the CFTC regulations. Because crypto options are deemed as “commodities,” CFTC said the company should have been properly registered and will be subjected to laws governing swaps.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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BlackBerry develops blockchain platform for healthcare

Former smartphone manufacturer BlackBerry has launched a blockchain-based solution for the healthcare sector that will enable data to be shared in an “ultra-secure” manner.

The platform, called BlackBerry Spark, aims “to create an ultra-secure global ecosystem for the storing and sharing of medical data.” With this solution, patients, laboratories and even Internet of Things (IoT)-based biometric devices can input data, which can be “anonymized” for sharing with researchers, according to the software company.

John Chen, executive chairman and CEO of BlackBerry, said: “We are applying our expertise in security, data privacy, and communication work in regulated industries such as automotive, financial services, and government to tackle one of the biggest challenges in the healthcare industry: leveraging healthcare endpoints to improve patient outcomes while ensuring security and data privacy.”

BlackBerry noted that its carrier-grade network operation center (NOC) will power the digital ledger technology-based system.

The company’s first client for its Sparks product is a grou called Global Communication, which helps children with rare diseases. The commission is co-chaired by global biotech firm Shire. Tech pilots from Global Communication will explore how BlackBerry Spark “might provide real-time, actionable analysis” to shorten the time to diagnose rare diseases.

BlackBerry has joined various institutions in venturing into blockchain and its technologies. The company has presented patent blockchain bases operating system for the development of robotic surgical instruments, patient monitoring, and other safety-critical products.

Many companies in the smartphone industry have also turned their attention to blockchain and cryptocurrencies. Recently, Nokia collaborated with Stream, a blockchain data platform, and OSIsoft, a software company, to help users monetize their personal data. The companies hoped to create a platform that would allow clients to buy and sell real-time data streams through Ethereum smart contracts.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Excitement’s brewing for the upcoming CoinGeek Week Conference in London

The CoinGeek Week Conference scheduled for next month is going to be unlike anything seen this year in the entire cryptocurrency space. As CoinGeek conferences go, this one is going to be even better than the rest and its timing coincides with some spectacular changes expected to be seen in the industry. If you have never attended a CoinGeek conference, you don’t know what you’re missing. If you have, then you understand why the events are such a valuable source of information and a great time to connect with new partners.

The conference will be held this November 28-30 at the Mermaid at Puddle Dock in London. Several crypto experts, among them, Yours.org CEO Ryan X. Charles, nChain co-founder and Chief Scientist Dr. Craig Wright and Bitcoin.com CEO Roger Ver, will be on hand to provide their insight on the changing world of cryptocurrencies and the importance of Bitcoin BCH to the space.

Bitcoin BCH is the only cryptocurrency that has maintained the same focus originally set forth by Satoshi Nakamoto when the first digital currency publication was introduced. While other cryptocurrencies have decided to be considered more as an investment tool, the Bitcoin BCH community is committed to helping spread adoption of crypto as a legitimate alternative to fiat currency.

Day 1 of this fall’s conference will focus on the applications that are being developed for the crypto and blockchain spaces. Discussions on topics such as the Money Button, raising funds with Bitcoin BCH and streaming money are just a few of those to be enjoyed. After the day’s activities have concluded, attendees will have time to mingle in a networking event that is sure to develop new business relationships.

Day 2 is centered on applications. There will be information on new developments and updates, as well as why Bitcoin BCH adoption is fundamental for business growth. A networking event will also be held at the close of the discussions to continue in the creation of business networks.

Day 3 is all about the future. Opening remarks will be led by CoinGeek’s own Calvin Ayre and there will be talks on what the cryptocurrency industry can expect for future hardware and retain implementations. Attendees who have participated in events all three days will be invited to an after party like only Calvin Ayre knows how to organize.

Tickets are on sale now, and discounts are available for multi-day purchases. Attendees can pay with Bitcoin BCH, as well as with credit or debit cards through Eventbrite. Space is limited and tickets are running out fast. Purchase yours today so you don’t miss out on this incredible conference!

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Why Bitmain reminds me of Darius III at The Battle of Gaugamela

In 331 BC, Alexander the Great led his forces to victory over overwhelming forces at the Battle of Gaugamela, which is historically identified as being close to the modern Iraqi city of Dohuk. His foe was Darius III, who had amassed a larger army and, supposedly, significant experience after being beaten at the Battle of Issus two years earlier. The two met to decide who would prevail as Alexander the Great was on his mission to conquer the Persian Achaemenid Empire. Despite having superior numbers, Darius III lost in a big way and repeatedly attempted to negotiate with Alexander to prevent the emperor from continuing his hostilities. Darius was never able to truly develop himself as a leader, having only served as king for six years, becoming the last ruler of the Achaemenid Empire.

Darius had his roots among the “common people.” He was a skillful combatant who, due to royal connections, was able to secure a job as a royal courier and took the throne in 336BC. As a ruler, he was considered to be “out of control” due to his utter lack of experience, which is what ultimately led to his downfall.

There are a lot of similarities between Darius III and cryptocurrency mining company Bitmain. Bitmain rose to prominence without having any superior skills, settling for a completely chance encounter at the opportune moment to seize control of the crypto mining hardware market.

It has been reported that the company’s most popular miner could have been stolen and several new products that the company has tried to introduce have been complete failures. In fact, only about half of the products take to market have received any type of successful reception— the others have failed miserably.

Like Darius, Bitmain now allegedly has a large amount of troops behind it. It is hoping that the forces, regardless of experience level, will help catapult the company to the ultimate victory and give it complete control over the mining industry.

However, it’s more likely that Bitmain will follow the example set by Darius at the Battle of Gaugamela. Darius turned tail and ran, leaving his commanders and soldiers to fall while he temporarily went into hiding.

This is where we are today, with questionable movements and decisions underscoring Bitmain’s approaching initial public offering (IPO). When put to the test, the company can’t stand up to the pressure and will more than likely run away after putting on a valiant show of force.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Bitfinex denies insolvency allegations

With the financial troubles of Puerto Rico-based Noble Bank, where dollar reserves of stablecoin Tether are supposedly located, cryptocurrency exchange Bitfinex has felt the need to dismiss claims of insolvency.

“Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this,” the exchange said in a blog post. To support its argument, Bitfinex showed several cryptocurrency wallets it holds for clients. Presented were $980 million worth of BTC, $394 million worth of ETH, and $203 million worth of EOS.

“How any rational party can claim insolvency when the opposite is there for all to see is interesting and, once again, perhaps indicative of a targeted campaign based on nothing but fiction,” Bitfinex said. However, it neglected to shows its balances in fiat currencies, and in Tether, which is supposedly 100% backed by the U.S. dollar.

Bitfinex’s post was a reaction to articles such as one by Medium writer ProofofResearch, who warned Bitfinex users to “remove your money now.” The article cited reports of customers unable to withdraw their fiat balances, of not being able to contact customer service, and of Bitfinex subreddits being deleted where customers claim not having received funds. “[I]t is simply unsafe for anyone to use the Bitfinex exchange or Tether since Tether is directly attached to Bitfinex,” ProofofResearch said.

Tether Limited, which issues Tether, has been linked to Bitfinex due to the same people listed in their articles of incorporation.  After reports of Bitfinex and Tether Limited no longer being clients of Noble Bank, and of the bank being badly in need of funds, Tether’s stability has been once more called into question.

But Bitfinex brushed off such concerns, stating, “Stories and allegations currently circulating mentioning an entity called Noble Bank have no impact on our operations, survivability, or solvency.”

It also noted that its fiat and cryptocurrency withdrawal services were “functioning as normal,” although “[c]omplications continue to exist for us in the domain of fiat transactions, as they do for most cryptocurrency-related organisations.”

Tether Limited has remained dodgy about being subject to an audit, though it procured the services of law firm Freeh, Sporkin & Sullivan LLP (FSS), that said, “FSS is confident that Tether’s unencumbered assets exceed the balance of fully-backed USD Tethers in circulation as of June 1st, 2018.” The same report by FSS also made the qualification that “the above confirmation of bank and Tether balances should not be construed as the results of an audit and were not conducted in accordance with Generally Accepted Auditing Standards.”

Bitfinex had been accused in 2017 of helping pump up the price of BTC to its record high of near $20,000 a coin. BTC is currently trading at about a third of its peak.

The exchange has been hacked several times. An August 2016 hack led to 120,000 BTC, worth about $70 million at the time, being stolen. Tether Limited has also been victim to a hack, with $31 million stolen from the Tether Treasury Wallet last November.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Zaif exchange no longer accepting new customers

The parent company of Japanese cryptocurrency exchange Zaif, Tech Bureau, has announced that it is temporarily halting new accounts on the exchange. The decision follows the hack of the exchange last month, which saw it lose around $60 million worth of cryptocurrency. While stressed as only temporary, the new account suspension is certainly one that will set off a few alarms. The suspension only impacts any potential new customers – not those who already have accounts or who have already verified their identification.

Tech Bureau brass said that the company will pull the suspension once it decides on a compensation plan for its customers who lost holding during the hack. The reason is a little puzzling given that the company had allegedly already secured the funding necessary to repay its customers. That funding was announced at the same time the company announced the theft.

In an announcement by the firm, Tech Bureau said, “After concluding the basic agreement, we are advancing consultation and negotiations for concluding a formal contract, there is no change in the policy to ensure thorough compensation for customer assets, and we are continuing to consider the details of specific response…As soon as the content is confirmed, we will report it promptly.”

The exchange is being investigated by the Japanese Financial Services Agency (FSA), which has already issued it a business improvement order. Nonetheless, the FSA wants to take a closer look at the company’s user protection systems. Zaif has received three business improvement orders since it opened – two in this year alone.

Some of the stolen crypto has already been tracked, but getting it back is going to be virtually impossible. The funds were sent to offshore exchanges, the majority of which maintain wallets that do not have to adhere to any anti-money laundering or Know Your Customer regulations. This will make it difficult to determine who owns the wallets.

Two weeks after the hack occurred, Zaif finally realized what had happened. It immediately halted operations and announced the theft. It also said at the time that it had worked out a deal with Japan-based Fisco Digital Asset Group Co. ltd. that would see the latter receive a major share in the company in exchange for about $44.5 million, which Zaif said would be used to reimburse its customers, along with funds it held in reserve.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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Dr. Craig Wright on why smart contracts aren’t so smart

Dr. Craig Wright, an expert in blockchain technology and dedicated Bitcoin BCH supporter, took to Medium yesterday to pen a thoughtful piece on smart contracts. The insightful article provides valuable information on the topic and some of the underlying flaws in the system, and is a further example of how breaking away from the core essence of Bitcoin BCH would undermine the progress the world’s leading retail digital currency has already made.

Wright was responding to another post that asserted, “Electronic contracts do not have to be re-read when they are returned because there’s generally no mechanism (unless it’s built into the electronic process) to alter the contract terms, scratch out a line, insert text, etc. What you send is what is being signed.”

However, this assertion is flawed and shows the danger of not having enough information to reach a full and qualified conclusion. Wright points out that collisions on a blockchain have proven that a hash signature has certain inherent vulnerabilities. He states, “[T]he collision allows two versions of the document to be created with the same hash and thus same electronic signature. For now, SHA256 is considered secure, but, not all hash functions are.”

He uses an example of someone generating two documents – one with an order to sell at $500,000, which Wright calls Order 1, and the other with an order to sell at $1 million, or Order 2. The individual wants Order 2 to be the document that signed, which would result in the sale contract being increased by $500,000. That person can use Confoo or Stripwire to create an MD5 hash – or collision – that is exactly the same for both documents.

Confoo has already been shown to be able to create two web pages that look completely different, but which have the same MD5 hash. This is a concern, as it would allow someone to easily create a fake MD5 hash signature that mimics a different contract.

Wright explains, “This attack works due to the nature of hashing algorithms (in this case, a flaw in the now depreciated algorithm MD5). If you have 2 documents, x and y that have the same hash (i.e. a collision) then by appending an additional block of information — q to the documents will also result in a collision. This is (x+q) will have the same hash as (y+q).”

He concludes, “This is why SV Pool and CoinGeek (and Bitcoin SV) plan to start processing non-standard scripts. To us, your long term security matters. Non-standard scripts are processed in P2SH. The myth was that this is bad for nodes, but, this is again the myth of the Raspberry Pi. Miners are competitive. The fight to be paid. [They] are paid more for larger scripts, so this is not an attack, it is the market at work.”

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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