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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The Poloniex cryptocurrency exchange is looking for big money. It announced in a Medium post this past Tuesday that it is moving forward with a plan to offering support for institutional accounts that will be made available for a number of trading pairs and APIs (application programming interface).
The post reads, in part, “We are excited to announce that institutional accounts are now available on Poloniex! Institutions large and small can enjoy the benefits of our large curated selection of crypto asset trading pairs, dedicated support and robust API services. Poloniex customers also enjoy no fees on BTC/USDC trades in the month of December.”
Poloniex was acquired by Goldman Sachs-backed Circle this past February for $400 million. With the new accounts, Circle will give investors the ability to conduct over-the-counter (OTC) trades using its Circle Trade platform, provided they’re ready to make an investment of at least $250,000. In addition, Circle will offer institutional services through Poloniex, as well as trading pairs with the Circle-created USDC stablecoin.
When 2018 kicked off, everyone expected to see a lot of institutional investors joining the crypto space. The rollout has been extremely slow, with only Coinbase being the major exchange to go after the investment class this past May. Coinbase is also looking to introduce an OTC crypto desk, but that isn’t expected to be introduced until sometime next year.
Poloniex has had a rough year. It has seen the exchange shuffle around its services a number of times and announced in October that it would be removing margin trading and lending products for U.S. customers by the end of the year. This past summer, it received a lot of backlash from users who had become locked out of their accounts after the exchange introduced new verification procedures. It had to deal with mounting pressure at the end of last year as users began flocking to the platform in response to the meteoric rise of Bitcoin Core’s (BTC) price, and wasn’t able to keep up with the load.
Poloniex is still in a solid position, despite the bumps in the road. This past October, a report by DRW Holdings Inc. showed that institutional investors now make up the largest segment of crypto buyers for transactions of more than $100,000, displacing high net worth individuals at the top of the list.
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There has been a lot of talk by several mainstream financial entities in the past two years that they could be considering launching different cryptocurrency products. While some, such as the CME Group and CBOE exchanges, have already taken the step, many others are still trying to get the ball rolling. One, the NASDAQ exchange, has had plans in the works for a while and has now confirmed that it hopes to launch its platform beginning sometime early next year and that it will start with Bitcoin Core (BTC) futures.
In a recent interview with news outlet The Express in the UK, NASDAQ VP of Communications Joseph Christinat reiterated the company’s position that it is still moving forward, despite the current market slump. He said that there’s been “more than enough work dedicated into the endeavor to make remove the question of regulatory approval. We will do this, and it is definitely happening.” Christinat added that the biggest challenge now is to receive approval by the U.S. Commodity Futures Trading Commission (CFTC).
NASDAQ, the world’s second largest stock exchange, has been developing its crypto portfolio for the past several years. It had hoped to launch one or more products this past summer, but revealed that it would postpone the launch in order to develop a platform that would be “unique enough” to attract a large following.
Christinat added, “We have put in plenty of financial resources and energy into delivering the capability to make this operational, and we’ve been on it for quite some time. Long before the market turbulence. The current atmosphere won’t affect our timeline in any way. We are going to do this no matter what comes.”
NASDAQ is joined by companies such as Fidelity Investments and the Intercontinental Exchange (ICE) that are preparing to introduce cryptocurrency trading products. Fidelity has said that it is still on target for a December launch for its offerings, while ICE, which is developing the Bakkt platform, has had to delay its launch from December to next January at the earliest.
What is still not known is how the BTC futures will operate. When CME and CBOE introduced their futures products last year, they were offered as cash-backed futures. Bakkt has said that it anticipates being the first to offer futures that are physically settled and would more than likely maintain those bragging rights even if NASDAQ decided to go the same route.
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It’s no secret that Japanese authorities are looking to take control over tax money it feels is lost in the crypto space. The country is behind an effort being developed by the G20 to implement a global crypto tax strategy that could see governments receive millions of dollars in payments. Back home in Japan, regulators are now looking to introduce a new system that will report significant profits from crypto-based transactions, helping the country recover even more funds.
According to the Japanese media outlet Mainichi Shimbun, the new system to be implemented will give the National Tax Agency (NTA) the ability to gather data from transaction intermediaries, which include crypto exchanges. The NTA will have the authority to request information – such as names, addresses and personal ID numbers – on customers that it suspects of tax evasion. If everything goes according to plan, the system will be developed next year, with an anticipated implementation for the new fiscal year beginning in April 2020.
Not all individuals would be targeted by the new system. The media outlet quotes several sources who said that only those who earn over 10 million yen ($88,700) through crypto transactions would be held accountable.
Currently, crypto exchanges and other companies that are deemed intermediaries only give up data voluntarily. They have the legal ability to refuse to hand over information, but this could change with the new legislation. The exchanges could be forced to adhere to the requests, but would still maintain the right to appeal any request it feels is unwarranted.
The impact won’t be felt widespread, at least not initially. According to a recent survey conducted by the NTA, only just over 300 people indicated that they earned more than 100 million yen through crypto last year. Given the current market slide, the number has probably dropped significantly.
Japan is also ready to come down hard on initial coin offerings (ICO). The Japanese Financial Services Authority (FSA) announced this week that it would introduce stricter regulations on the offering in order to protect investors from fraud. Going forward, any entity wishing to launch an ICO would have to first register with the FSA.
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Coinbase users now have an extra option available to them when choosing to withdraw their funds from the cryptocurrency exchange. In a move that didn’t receive a great deal of fanfare, Coinbase has added PayPal to its platform, allowing users to make easy fiat withdrawals through the payment services solution. As an added bonus, the withdrawals don’t incur any additional fees.
No official announcement of the PayPal support was provided by Coinbase. However, users have reported receiving an email informing them of the capability. The only mention of it in on the Coinbase website is in the company’s FAQ, and reads, “Beginning in November, Coinbase will add the ability for customers to link their PayPal and Coinbase accounts. Depending on country of residence, customers can either withdraw cash to PayPal or sell their crypto to their PayPal account.”
In order to make a withdrawal using PayPal, users must complete Coinbase’s Know Your Customer process. Once that’s complete, they receive an email confirming that they’re eligible to take advantage of the implementation.
Withdrawals using PayPal are available in U.S. dollars, UK pounds and euros. Currently, only customers in the U.S., Canada, the UK and the European Union are eligible, but this could change soon. Coinbase mentions in its FAQ that it plans to provide support for the Australian dollar, as well as the Canadian dollar, in the near future.
Whether or not deposits will be facilitated through PayPal remains to be seen. It seems like a logical next step, given the platform’s wide range of services.
This isn’t the first time Coinbase has integrated PayPal into the exchange. PayPal withdrawals were available last year, but Coinbase temporarily suspended the option and subsequently eliminated it completely due to what it described as performance issues.
PayPal has over 244 million customers and managed 7.6 billion payment transactions last year. That level of volume could prove to be extremely beneficial to Coinbase and help increase mainstream adoption, as long as it is marketed properly.
According to a number of reactions in social media, the withdrawal capability is somewhat spotty. Some have indicated that it takes up to 13 days to receive the funds and others – even those living in the specified countries – have said that the service doesn’t work at all. It may be a work in progress, but should prove to give Coinbase, and cryptocurrencies, a significant boost.
CoinZoom, a U.S.-based cryptocurrency exchange, will soon start its operations in Australia after its subsidiary, CoinZoom Australia, received approval from the Australian Transaction Reports and Analysis Centre (AUSTRAC).
According to the announcement, CoinZoom Australia will be able to offer its services to people across Australia lawfully. The exchange will now be able to accept and exchange fiat and digital currencies including BTC, Bitcoin Cash, Litecoin, Ethereum, Ripple and other alt coins.
Under the license, CoinZoom Australia will provide its services to people in Australia and around the world.
CoinZoom CEO Todd Crosland stated that receiving the license will help actualize the company’s vision of providing global cryptocurrency traders with innovative trading technology. He added that the license was an essential step in the company’s goal to provide globally compliant digital currency trading.
With the license in place, CoinZoom is expected to launch Coin Zoom Australia next year, possibly in the first quarter of 2019. Customers wishing to use the exchange will be required to comply with Anti Money Laundering (AML) and Know Your Customer (KYC) requirements in America and Australia.
The exchange will provide a simple and easy “one-stop user experience” to link their credit card, bank account, and cryptocurrency wallets. CoinZoom’s trading platform also offers customers a pattern recognition system; CoinZoom Rewards debit card, and social trading capabilities.
CoinZoom has been offering crypto services to people in the United States for quite some time. It is registered as a money service business (MSB) with the Financial Crimes Enforcement Network (FinCEN) to operate in all 50 states.
AUSTRAC has been actively involved in trying to make sure businesses in the crypto space follow regulations during their operations. The authority has also grown its global network of financial intelligence. In November, the financial authority appointed the first ever AUSTRAC financial intelligence analyst to be posted in China. To facilitate its activities, AUSTRAC received additional funding of $5.2 million from the Australian government. In addition to helping grow its global imprint, the funding was aimed at assisting the authority to conduct a more profound analysis of risks, money laundering activities, threats, and terrorist activities in the country.
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Cryptocurrency exchanges are getting better at protecting their assets. Security has improved greatly this year, making it more difficult for thieves to break in and steal crypto. Those efforts have resulted in the mindless cyber thugs out of North Korea to give up on attacking the exchanges, going after individuals, instead.
As reported by the South China Morning Post, the number of crypto attacks on individuals has risen substantially in the past several months. The news outlet talked to the CEO of South Korea-based Cuvepia, a cybersecurity firm, who indicated that the company had recently uncovered more than 30 attacks. He added that it’s possible that a number of attacks have not been caught, which could put the actual number of heists or attempted heists at more than 100.
The founder of cyber warfare research company IssueMakersLab, Simon Choi, adds that the transition to individual attacks is a direct response to heightened security on the exchanges. He adds, “Direct attacks on exchanges have become harder, so hackers are thinking about alternatively going after individual users with weak security.”
Choi explains that the majority of the attacks have been conducted against wealthy South Korean citizens because “[the hackers] believe that if they target CEOs of wealthy firms and heads of organisations” then “they can take advantage of billions of won in virtual currencies.”
Another cybersecurity analyst, FireEye’s Luke McNamara, also pointed out that “it’s possible from previous intrusions they’ve been able to collect information” about “people using these [cryptocurrency] exchanges. He states that “when [the hackers] understand and know the targets” then “they are able to craft lures specific to those organisations or entities.”
There have been indications that the hacks aren’t just being led by crooks simply looking for an easy payday. Reports started circulating a couple of weeks ago that the North Korean regime could be behind the attacks. As sanctions create a weaker government, North Korea government officials could be turning to thievery, crypto money laundering and initial coin offerings (ICOs) in order to attract funds to continue keeping the citizens under control and to line their own pockets.
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The U.S. Securities and Exchange Commission (SEC) has said that it wants to see cryptocurrency markets, including exchanges, take steps to protect investors from manipulation if exchange-traded funds (ETF) are to be approved. One exchange is already working toward cleaning up the space and has introduced a tool that will allow it to monitor the platform for market manipulation and suspicious activity.
The Bitstamp exchange has announced that it will begin to use the Irisium Surveillance platform to uncover questionable market activity. The platform, which is already used by a number of financial entities including the Asia Pacific Exchange (APEX), is partly owned by Cinnober, a tech developer for financial markets with which Bitstamp recently partnered.
Bitstamp’s founder and CEO, Nejc Kodric, stated of the inclusion of Irisium, “We are committed to crypto in the long term. Our desire is to guarantee a fair and orderly market which reflects genuine supply and demand. Exploring new frontiers in preventing market manipulation is essential for the industry to mature.”
Irisium, according to the company’s website, has created a number of tools that allow entities to monitor trading platforms and ensure compliance with European regulations, including the Markets in Financial Instruments Directive, the Market Abuse Regulation and the Regulation on Wholesale Energy Market Integrity and Transparency. The site further asserts, “The system makes available the tools and analytical data to enable regulators to identify, track and investigate any trading activity” and “is already utilized by European regulators.”
Irisium’s CEO, Alastair Goodwin, explained of the new partnership with Bitstamp, “Bitstamp’s pro-active adoption of Irisium and close partnership with us demonstrates their desire to increase transparency, integrity and confidence in the cryptocurrency market. … Enhanced customer protection and market integrity will help drive adoption and market liquidity.”
Bitstamp’s decision to use the Irisium platform was completely independent of the SEC’s statement on market manipulation. However, the timing is perfect and could, if it works as planned, allow for crypto exchanges to jump one of the hurdles that have keep institutional investors at bay. Moves such as this, coupled with the announcements made by Fidelity and NASDAQ that they are almost ready to get their crypto platforms going, should help 2019 to be an important year for the crypto industry.
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Nobuaki Kobayashi has disclosed efforts to convince the courts to grant an extension to the deadline for filing claims, in a move that would afford claimants more time in lodging their applications for compensation following the collapse of the exchange in 2014.
On Thursday, Kobayashi said he plans to pursue “efforts to request the court to accept proofs of rehabilitation claims received by December 26, 2018,” following on from the now-passed original deadline of October 22, 2018.
The trustee highlighted the international nature of Mt. Gox creditors, and said he would ask the courts to consider allocating additional time for claimants to file the required documentation as part of their claim.
Despite the original deadline having past, those affected are still able to file claims online, or on paper by a date not later than December 26. However, as noted by Kobayashi, it is up to the courts “whether proofs of rehabilitation claims filed after the deadline will be accepted.”
Once the largest cryptocurrency exchange in the world by volume, the collapse of Mt. Gox was the result of a hack totaling 850,000 Bitcoins, some 7% of all Bitcoin tokens—made up of both client funds and substantial Mt. Gox-owned holdings. The hack was worth around $470 million at the time, and saw a number of investors losing their funds stored on the exchange.
The civil rehabilitation process was initiated following a ruling at a court in Tokyo as recently as June of this year, some four years after investors lost their money, when judges ruled creditors could proceed with claims against the exchange.
If the courts approve the latest deadline extension, creditors will have additional time to complete the filing process, ensuring as many of those affected by the hack as possible have access to the compensation they are entitled to.
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A former cryptocurrency exchange executive accused of using BTC to launder billions of dollars is preparing to go on hunger strike, according to statements issued by his legal team.
Russian citizen Alexander Vinnik was arrested in Greece at the request of U.S. authorities back in 2017, at the outset of what has become an embittered multi-jurisdictional battle for his extradition. After a ruling in the Greek Supreme Court that Vinnik should be extradited to the U.S., separate petitions from France and Russia have been presented, including a European Arrest Warrant issued by France back in June.
The courts are set to review their decision later this week, considering the multiple vying claims to extradition ahead of deciding how to proceed with Vinnik’s case.
Vinnik’s legal team are agitating for his extradition to his home nation of Russia, having labelled the alternatives as “close to a life sentence,” with the inevitable conclusion of eventual extradition to the United States.
Russian news agency TASS quoted the head of Vinnik’s legal representatives, Timofey Musatov, as saying that the man is now preparing a hunger strike in protest at what he alleges will be an unfair hearing. According to the report, “Alexander Vinnik decided to go on a hunger strike because he realized he was stripped of the right for defense in France and, consequently, in Greece…Moreover, it became clear that the European arrest warrant [issued by France] expired.”
“The Greek Supreme Court’s judge completely ignores the work of lawyers who cannot even file a petition. She does not give them an opportunity to speak or do it. After observing this situation, Alexander realized that he would either get a fair trial or die.” Musatov said. “If there is no fair trial, he will inevitably be deported to the United States through France, where he will get something close to a life sentence, which equals death.”
Vinnik is accused of laundering as much as $9 billion through the now defunct crypto exchange, BTC-e, in what has become one of the most high profile of the outstanding BTC fraud cases.
With authorities in France, Greece, the U.S. and laterally Russia apparently interested in bringing criminal convictions, it remains to be seen whether his planned hunger strike will assist Vinnik in getting his desired outcome.
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