The Supreme Court in Chile has issued a decision allowing the state bank Banco del Estado de Chile to close the account of cryptocurrency exchange Orionx on concerns over the nature of transactions being conducted on the exchange.
The ruling, reported by local news outlet Emol, reverses earlier decisions of the country’s Court of Appeals, and its anti-monopoly court, that had allowed the bank accounts of Orionx and several other plaintiffs to remain open.
According to the Supreme Court’s third division, the bank did not violate the Constitution, and that its acts did not arbitrarily curtail Orionx’s rights.
The decision stated that the assets being traded by Orionx, including ETH, XRP, LTC, and BTC, lacked physical manifestation and had “no intrinsic value,” in that they were not backed by any government or company. Rather, the digital currencies were viewed as controlled in a decentralized network of users.
The Supreme Court said that because of the nature of the assets, the bank could not comply with regulations requiring specific identities involved in transactions, which made the closure of the accounts justifiable.
The Banco del Estado de Chile was one of 10 banks that had closed accounts of cryptocurrency-related companies. Aside from Orionx, Buda and Crypto MKT had filed complaints with the anti-monopoly court of Chile. The move of banks to deny services to those in the cryptocurrency sector had been criticized as the act of a few in positions of power, who had not recognized measures put up by the companies to promote transparency and security.
Other countries’ banking sectors have shown greater openness to provide services for those using blockchain and cryptocurrencies, though not without conflict among regulators. Switzerland, where ‘Crypto Valley’ Zug is located, has had the government study how blockchain companies could be assisted in opening up bank accounts. Also, the Hypothekarbank Lenzburg has moved to accommodate such companies. However, the Swiss Financial Market Supervisory Authority (FINMA) has maintained a tough stance, requiring invested cryptocurrency assets to be covered by eight times their amount in fiat, to take into account the perceived risk associated with volatility of cryptocurrencies.
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Goldman Sachs executives have a love-hate relationship with cryptocurrency. After word surfaced late last year that the financial giant would be pursuing the launch of a cryptocurrency trading desk, it reversed course on the matter this past September. Now, just a little more than two months later, it looks like the company has, once again, flip-flopped on its decision and is contemplating a full-blown crypto trading platform that isn’t limited to just crypto futures products.
Goldman Sachs is one of the largest investment banks in the world. It has a market valuation of around $87 billion and is a highly respected financial institution. The company’s chief operating officer, David Solomon, told Bloomberg TV that it will be moving away from publicly-traded derivatives and futures, opting instead for large capacity trading.
The purpose behind the transition is to support more institutional investors and Solomon added, “We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously. We’re listening to our clients and trying to help our clients as they’re exploring those things too. Goldman Sachs must evolve its business and adapt to the environment.”
The statement is a bold one, and indicates the first time that someone from the company has publicly admitted that it is supporting cryptocurrencies. It is also the first time that the firm acknowledges that it plans on growing its crypto division to support increasing client demand for digital assets.
While there aren’t many traditional financial powerhouses currently involved in the crypto industry, this is changing. JPMorgan and Fidelity Investments are getting involved and an entry by Goldman Sachs could lead to further legitimacy of crypto. JPMorgan’s Nikolas Panigirtzoglou, a global market strategist, asserted that the futures market has already proven to give crypto a boost among investors and that the introduction of additional futures and exchange-traded funds will pave the way to further adoption.
This won’t happen overnight, however. A number of analysts have pointed out that stable custodianship of crypto assets is still not possible and probably won’t be until sometime later next year. The creation of a suite of institutional products for the crypto sector could go a long way in convincing large-scale institutions to dive into crypto, and products offered by Goldman Sachs, Fidelity and others would be the perfect response.
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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For all of 2018, cryptocurrency enthusiasts have wanted more transparency of the Tether stablecoin. As far back as January, there have been concerns over the coin’s stability, attributed to the fact that it has not been able to hold onto auditors and hasn’t been willing to release financial reports. Most recently, Tether saw its price come unglued, even though it’s reportedly pegged to the U.S. dollar, after news broke that the bank formerly holding the funds that supposedly back the coin, Noble Bank, was having financial difficulty. Now, its new banking partner is the target of regulators, painting a grim picture for the bank, as well as Tether.
According to the Brazilian media outlet O Globo, Brazil’s Deltec Bank & Trust may have run afoul of regulators. There is an allegation circulating that the bank may have been involved in a large money-laundering scheme that involves a Brazilian government official. The official reportedly funneled $25 million through a bank in Panama and then back into Brazil through Deltec. Given that the transfer supposedly took place in a single transaction, many are wondering whether Deltec was involved in facilitating the activity or, at the very least, why it didn’t question the activity.
The investigation into the bank’s activity only further worsens Tether’s stance in the market. Earlier this week, Tether spoke highly of Deltec and said that the partnership between the two entities should be seen as legitimizing Tether. It said at the time, “This included, notably, an analysis of our compliance processes, policies and procedures; a full background check of the shareholders, ultimate beneficiaries and officers of our company; and assessments of our ability to maintain the USD-peg at any moment and our treasury management policies.”
However, that analysis now seems to have been either grossly exaggerated or is non-existent. In either case, it leaves the crypto community seriously concerned about the viability of Tether and whether or not those behind the stablecoin are actually fit to continue to manage its operations. To date, Tether has not been able to produce confirmed records indicating that it definitively holds enough fiat to cover the $1.7 billion in coins currently in circulation and the general consensus is that the funds are nonexistent.
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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There are no compliance issues that should prevent South Korean banks from providing virtual bank accounts to cryptocurrency exchanges and business in the country, according to the finance minister, clarifying a legal grey area that has caused significant difficulties for exchanges in Korea.
Choi Jong-Ku, commissioner of the Financial Services Commission (FSC), said there were no particular issues that should prevent banks from servicing crypto clients, noting that as long as there were Know Your Customer (KYC) and anti-money laundering provisions in place, crypto platforms and banks should be able to seamlessly work together.
“There exists no issue in banks providing virtual bank accounts to cryptocurrency exchanges. If digital asset trading platforms have KYC and AML systems in place, there is no problem in issuing virtual bank accounts to exchanges,” Choi said.
The finance minister’s statement will be welcomed by crypto exchanges in the country, which make use of unique virtual bank accounts in order to handle local currency payments. These allow for instant deposits and withdrawals in South Korean won, and ensure currency can be held at exchanges.
Some mainstream commercial banks have been reluctant to work with Korean exchanges, with some having to stop accepting new deposits because they were searching for a banking partner to provide the necessary virtual accounts.
On the banking side, limited regulation and direction from lawmakers meant many were (and remain) unsure of working with businesses in the cryptocurrency sector.
From early 2018, tightening laws in South Korea saw banks become less willing to work with crypto exchanges, a position which felt for some time as if it was endorsed by the Korean government directly.
Issuing the clarifying statement on Wednesday, Choi said the government and financial regulators would no longer seek to make life difficult for crypto exchanges, and that in future, they should have no issues in reaching agreements with commercial banks.
The statement comes at a time of increasing activism from the South Korean government, as they attempt to clean up the cryptocurrency sector there. Following the high profile Bithumb attack, conditions for cryptocurrency businesses and investors in the country were tightened, as part of a package of measures designed to protect investors and consumers.
Just recently, the government has cleared a number of crypto exchanges as having “sufficient security standards” and management structures in place to deal with the threat of hacks and thefts.
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.
The post ‘No issue’: South Korean banks cleared to work with crypto companies appeared first on Coingeek.
Traditional financial institutions, and their pundits, love to argue that cryptocurrency is only good for those who want to steal, deal in drugs or launder money. While many superficial reports have suggested that there is more evidence of theft in the fiat ecosystem, there is now tangible proof. A new report by undercover journalists has revealed that banks across Europe helped their clients illegally take $63 billion in taxes.
The undercover operation was led by 37 journalists in 12 countries. The work conducted by the undercover agents was published in a report called the CumEx Files, which was the result of a review of 180,000 documents from banks, law firms and stock traders over the span of one year. The journalists always conducted interviews with whistleblowers and unidentified individuals to confirm what the documents revealed.
According to the report, “They [the secret documents] demonstrated the extent to which banks and investors could reimburse taxes on stock deals that they did not have…These windy financial constructs are called cum-cum (cum means ‘dividend’). A domestic bank helps a foreign investor to get a tax refund that they are not entitled to. The profit is shared between the participants.”
In some instances, traders were able to collect refunds that were twice what was owed, or more. The refunds came from the respective countries for taxes that would normally be paid one time for the purchase or sale of a particular stock.
A separate video published on the CumEx Files asserts, “It was a trade that was initially discovered by chance. Yet a group of masterminds turned it into an industrialized cottage industry, from Dubai to London, New York to Dublin taking billions of euros out of the pockets of European tax payers.”
Revealed: how the super rich robbed 55 billion euro tax money across Europe – until today: https://t.co/ZzYLNEFugK #CumExFiles
— CORRECTIV (@correctiv_org) October 18, 2018
Involved in the scheme, according to the report, are Barclays, JPMorgan, BMP Paribas, UBS, Morgan Stanley, Banco Santander, Meryl Lynch, Deutsche Bank and SEB bank out Sweden. In one example, tax evaders were able to reportedly abscond with $2 billion from Denmark’s government. In another, $46 million was almost stolen from Sweden, but was thwarted only because Danish authorities tipped off their counterparts in the country.
The report’s authors further asserts, “The deals are solely for the purpose of collecting taxpayers’ money. Otherwise, there is no value behind the trade.” They stated that the schemes coincided with the financial crisis that hit in 2007 and 2008, adding that it was “a time when the state will save the banks from collapse, again with taxpayers’ money.”
Obviously, lawmakers across Europe are now calling for action. They are preparing to launch an investigation into the report. This means that they’ll have less time to dedicate to real, non-penal issues, such as creating the framework for digital currencies to flourish.
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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At the end of August, rumors surfaced that the Reserve Bank of India (RBI) had secretly created a division that was involved in the research and creation of regulations for emerging technologies, including blockchain and cryptocurrencies. The fact that the central bank would be involved in cryptocurrencies was somewhat shocking, given that it has taken a staunch anti-crypto approach to allowing banks to work with businesses in the industry. Now—more than a month after the news first circulated—RBI has stepped forward to deny the rumors.
Financial news outlet The Economic Times first mentioned the new division in August, noting that RBI had already been operating the unit for about a month based its information on two sources close to the Indian central bank.
RBI has rejected the claims, stating that it has no crypto-focused unit. The rejection came as a response to a “right to information” (RIT) request made by Coin Crunch’s Naimish Sanghvi.
The rejection is made even more puzzling by the fact that RBI stated shortly after the story was published in the Economic Times that it had, in fact, formed an “inter-departmental group” designed to “study and provide guidance on the feasibility to introduce a central bank digital currency.” It would appear that RBI executives aren’t sure what is going on inside their own bank.
In the early part of 2017, the research arm of RBI published a report on the benefits of blockchain technology in banking. That department, the Institute for Development & Research in Banking Technology, asserted that blockchain technology had “matured enough” to allow for the digitization of the rupee.
About a year later, Prime Minister Narendra Modi publicly spoke about the positives of the blockchain, stating that he would like to see “rapid adaption” of the technology.
The current ban implemented by RBI has caused serious damage to the crypto industry in the country. While a couple of exchanges have been able to figure out ways to legal sidestep the order, others have suffered irreparable harm. Zebpay, formerly one of the largest cryptocurrency exchanges in the country, has now permanently closed its doors because of the ban.
The debate over RBI’s authority to prevent banks from working with crypto companies has been taken to the country’s Supreme Court. However, the court has twice delayed hearing arguments, only exacerbating the situation further. At this rate, India could become the weakest country in the cryptocurrency world in relatively short order.
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.
The post Reserve Bank of India refutes claims of crypto, blockchain probe appeared first on Coingeek.
The stablecoin Tether may not be as stable as many have believed – not that this would be a huge surprise to some. It would appear that Puerto Rico’s Noble Bank, reportedly one of the major repositories of Tether, is having serious financial issues. As a bank that supposedly holds a 1-to-1 ratio of Tether to US dollars, the fact that the financial institution is “desperately” looking for cash raises a number of questions.
Noble Bank was first identified as being involved with Tether this past February. Since then, a large number of Tether have been produced. Since each coin must have a physical dollar behind it, the amount of dollars stored in the banks, in theory, should be extremely high.
However, Noble Bank is looking for a serious injection of funds. Two sources close to the bank have indicated that it has already contacted at least one major Tether holder in an effort to unload an unspecified amount of coins, but the holder rejected the request. One of the sources said, “If Noble doesn’t get cash soon, they will only have a few days left. They’re desperate.”
Tether might also be in a bad position. An unidentified source for a major crypto exchange told the crypto media outlet Modern Consensus that a Tether holder has been trying to dump “tens of millions of tethers,” but that the individual has not found a taker. That kind of release at once could have dire consequences on the stability of the stablecoin and could make it obsolete.
There have already been accusations of improprieties among the Tether group. On more than one occasion, reports have surfaced that the company has been releasing tethers that weren’t supported by any asset, and using them to purchase other cryptocurrencies.
Tether is also facing competition from several other stablecoins. Gemini and Paxos have introduced stablecoins recently, both of which are regulated and audited by the New York Department of Financial Services. Tether has been without an auditor since this past January and has made the questionable remark that auditing the coin is an impossibility. It would seem that, if there were one dollar for every tether, an audit would be a relatively simple process to complete. Circle also has introduced its own stablecoin. The coin itself isn’t regulated; however, Circle is.
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.
The post Tether bank “desperate for cash” appeared first on Coingeek.
The stablecoin Tether may not be as stable as many have believed – not that this would be a huge surprise to some. It would appear that Puerto Rico’s Noble Bank, reportedly one of the major repositories of Tether, is having serious financial issues. As a bank that supposedly holds a 1-to-1 ratio of Tether to US dollars, the fact that the financial institution is “desperately” looking for cash raises a number of questions.
Noble Bank was first identified as being involved with Tether this past February. Since then, a large number of Tether have been produced. Since each coin must have a physical dollar behind it, the amount of dollars stored in the banks, in theory, should be extremely high.
However, Noble Bank is looking for a serious injection of funds. Two sources close to the bank have indicated that it has already contacted at least one major Tether holder in an effort to unload an unspecified amount of coins, but the holder rejected the request. One of the sources said, “If Noble doesn’t get cash soon, they will only have a few days left. They’re desperate.”
Tether might also be in a bad position. An unidentified source for a major crypto exchange told the crypto media outlet Modern Consensus that a Tether holder has been trying to dump “tens of millions of tethers,” but that the individual has not found a taker. That kind of release at once could have dire consequences on the stability of the stablecoin and could make it obsolete.
There have already been accusations of improprieties among the Tether group. On more than one occasion, reports have surfaced that the company has been releasing tethers that weren’t supported by any asset, and using them to purchase other cryptocurrencies.
Tether is also facing competition from several other stablecoins. Gemini and Paxos have introduced stablecoins recently, both of which are regulated and audited by the New York Department of Financial Services. Tether has been without an auditor since this past January and has made the questionable remark that auditing the coin is an impossibility. It would seem that, if there were one dollar for every tether, an audit would be a relatively simple process to complete. Circle also has introduced its own stablecoin. The coin itself isn’t regulated; however, Circle is.
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.
The post Tether bank “desperate for cash” appeared first on Coingeek.
