Crypto investments turn Philippine economic zone around

The Cagayan Economic Zone Authority (CEZA) in the Philippines has reported a revenue of PHP521 million ($9.9 million) from January to September 2018, a 132% increase from the corresponding period last year.

Much of the improved performance, according to CEZA CEO Raul Lambino, has to do with the government-owned and -controlled corporation promoting the economic zone as a hub for cryptocurrency, blockchain, and other financial technology.

“The idea of setting up the first cryptocurrency and blockchain technology center in the country has paid off handsomely… Financial technology is proving to be the new high tech of the future,” Lambino said, according to local outlet Business Mirror.

For 2017, CEZA had reported a net loss of PHP65 million ($1.2 million), after reducing the presence of online gaming firms in the area as part of efforts to curb illegal operations. Further reforms saw the revocation of registration of 164 business process outsourcing (BPO) firms providing services to offshore gaming operators, last December.

In spite of such changes, CEZA has managed to keep investments coming, and even paid PHP83.3 million ($1.6 million) in taxes to the national government for the first three quarters of 2018. As of October, the government-owned firm has issued its Financial Technology Solutions and Offshore Virtual Currency (FTSOVC) and Offshore Virtual Currency (OVC) licenses to a total of 19 companies, out of a maximum of 25 licenses to be issued.

Even with such encouraging numbers, Lambino stated that he wasn’t going to rely solely on fintech to keep up revenues, also welcoming investments in the industrial and tourism sectors. “Growth in the economic zone will be investment-driven. CEZA will diversify,” he said.

CEZA announced last week a crackdown on cryptocurrency firms operating without licenses. Lambino acted on reports of illegal cockfighting going on, which go against the firm’s moves to curb illegal gambling. He has tapped the National Bureau of Investigation (NBI) and the Philippine National Police (PNP) to carry out the crackdown, according to The Manila Times.

Among CEZA’s plans for the economic zone is the putting up of a Blockchain University intended to create a highly skilled work force for the industry. CEZA has also partnered with the Shanghai Jucheng Supply Chain Management Group for construction of a $100-million seaside resort in the area. In addition, CEZA has procured the services of Eminova Asset Management Ltd. and Hunan Goke Maglev Technology Development Ltd. to create a facility for manufacturing magnetic levitation trains in the province.

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NYDIG Execution picks up New York’s BitLicense

The New York State Department of Financial Services (DFS) has approved New York Digital Investment Group (NYDIG) Execution LLC, a subsidiary of NYDIG LLC, for a virtual currency license and a money transmission license. The virtual currency license, also known as BitLicense, is required by any party looking to engage in any virtual currency-related business activity in the state.

According to the announcement, the license will allow NYDIG Execution to offer secure custody and trade execution services. It will also enable the company to operate as a custodian for virtual currencies such as Bitcoin BCH, as well as BTC, ETH, XRP, and LTC.

Financial Services Superintendent Maria T. Vullo said the approval strengthens the fintech marketplace in New York. She added that having regulation for the crypto space would ensure growth for the market, increase innovation and fewer risks for participants.

The BitLicense regulations have received mixed reactions from operators since August 2015. Some companies embrace the laws while others left New York to look for a more accommodating environment. Business exited the state in what was termed as “the Great Bitcoin Exodus,” citing harsh regulations, excessive disclosure requirements, and financial disincentives.

In a statement, NYDIG CEO Robert Guttmann said the company looks forward “to providing secure and transparent liquidity, asset management and custodial services to the institutional market.”

DFS has continued to regulate the financial market by licensing technology-based money transmitters under New York’s money transmitter law. The authority has also monitored online lenders under New York’s banking law and virtual currency exchanges under New York’s financial services law. So far, DFS has approved fourteen charters or licenses for companies in the virtual currency marketplace.

In 2018, more licenses have been granted to business in the crypto space. This year alone, nine licenses have been awarded. The seventh one was recently awarded to ATM operator Coinsource only two weeks ago. NYDIG’s license comes eight months after a proposed alternative to BitLicense regulations was brought before the New York State Assembly.

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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Avoid unlicensed crypto exchanges, Thai SEC tells public

The chief financial regulator of Thailand has warned investors to avoid the unregulated Q Exchange, following an order issued to the firm to stop advertising on account of a lack of a sufficient license.

The Thai Securities and Exchange Commission (SEC) took the unprecedented step of recommending investors do not trade with the local cryptocurrency exchange, which does not hold a license as a “digital business operator,” ahead of a new licensing regime expected to take effect with initial exchanges from the end of November.

In a notice on its website, the SEC stated: “The SEC would like to inform the public that Q Exchange Co Ltd is not a licensed digital business operator…The public and investors should be cautious in engaging in digital asset and electronic money trades with this firm because such actions might not be lawfully protected by the SEC.”

The Q Exchange is a crypto exchange offering customers the opportunity to trade in 10 cryptocurrencies, including BTC and ETH. The exchange also had plans to launch its own cryptocurrency, the Q Token, according to local media reports.

After a royal decree issued back in May, cryptocurrency businesses in Thailand were required to register with local authorities, and to obtain the permission of regulators before engaging in the crypto sector. The measures cover cryptocurrency exchanges, as well as those promoting or engaging in initial coin offerings (ICOs).

The first licensed platforms are expected to appear this month. While no online presence for Q Exchange could be detected, the warning from the SEC suggests the exchange was seeking to trade without the required permission or licence from the Thai regulator.

Thailand has previously been regarded as one of the stricter jurisdictions, after measures introduced earlier this year to exert greater state control over cryptocurrency and related businesses.

With more formal regulation for exchanges and other crypto businesses expected to take effect in due course, it now presents an opportunity for those courting institutional businesses to operate within the Thai market.

It follows calls from the sector to introduce stricter regulation, as part of a drive to cement legal certainty for legitimate exchange operators.

As for exchanges like Q Exchange, which still remain outside of the licensing regime, it looks like the days of regulation-free trading are already numbered.

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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Mauritius launches new crypto custodian license

Authorities in Mauritius have set out plans for a new cryptocurrency custodian license, as part of new laws aimed at the emerging blockchain and cryptocurrency sectors.

The Financial Services Commission, Mauritius chief financial regulator, set out the draft proposals for public consultation, in a process set to run to the end of November which could determine whether and how the island nation proceeds with its crypto custodian licensing structure.

The draft regulations were created to offer legal certainty specific to cryptocurrency custody services, with existing custody licenses ill-equipped to deal with the needs of crypto custodian services. It comes at a time of increasing demand for custodian services, as more institutional and regulated investors move into investing in cryptocurrencies for the first time.

Holders of the new license will be required to comply with strict licensing terms, including holding a minimum reserve of 500,000 Mauritius rupees, maintaining a board with at least three participants and one participant resident in Mauritius, and running a physical office in the country.

Holders will also be considered ‘financial institutions’ under the Financial Intelligence and Anti-Money Laundering Act 2002, and will be required to uphold anti-money laundering and know your customer provisions in the same way as mainstream financial institutions like banks.

The license looks set to prove popular with crypto businesses looking to offer custodian services to large institutional investors. With the licensing structure only just reaching consultation stage, there is already strong interest in applying.

A new venture, HYBSE International Marketplace, has already expressed a commitment to apply for one of the new licenses, even before the regulatory structures have been finalized, or HYBSE has even begun trading.

Custodian services safeguard cryptocurrency holdings on behalf of institutional investors, providing security to a high standard of compliance—an essential prerequisite for any institutional investor allocating resources to cryptocurrency investments.

As competition in the sector heats up, new licensing structures like those in Mauritius will only prove more popular with companies looking to become registered cryptocurrency custodians.

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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‘Dubious’ crypto platform claims to be holding Malta license

Malta’s financial watchdog has issued a warning to investors after it uncovered a cryptocurrency trading platform falsely claiming to be licensed in the jurisdiction, the latest BTC scam of its kind to target unsuspecting investors.

The platform, called Primetradingbot, claimed to offer high-yield BTC investments, and appeared to be targeting unsophisticated investors who still believe the BTC coin has a future. According to the Malta Financial Services Authority (MFSA), the scheme has a “dubious nature with a high risk of loss of money,” as it urged investors to stick to those firms genuinely licensed by the MFSA.

The MFSA warned investors to be cautious, saying that “although this entity purports to operate from an address in Malta, the MFSA does not believe this to be the case.”

On its website, the regulator said, “The MFSA wishes to alert the public, in Malta and abroad, that Primetradingbot is not licenced or otherwise authorised by the MFSA to provide any investment or other financial services which are required to be licenced or otherwise authorised under Maltese law.”

The much-coveted Maltese licensing scheme requires all practitioners working with crypto companies to complete “continuous professional education,” and to sit an exam in order to practice within the crypto sector.

Falsely claiming authorisation from the regulator therefore implies a level of competence, as well as compliance—neither of which Primetradingbot is qualified to represent to its customers.

Furthermore, the MFSA said that by misrepresenting its licensing status, Primetradingbot was breaking the law, as well as undermining any trust in its other claims.

The warning is the latest concerning BTC scams of this type, which have been increasing in number in recent months. Despite the significant and ongoing downturn in BTC prices, fraudsters are still relying on BTC scams to take advantage of their victims.

Regarded as one of the more forward-thinking jurisdictions for crypto regulation, Malta has been dubbed “Blockchain Island,” with an increasing number of firms choosing to legitimately set up shop in the country.

A full list of crypto businesses licensed in Malta is available from MFSA, with the regulator urging investors and businesses to check before dealing with any firms claiming to be licensed by the authority.

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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19 crypto exchanges secure provisional license in Philippines’ economic zone

The number of companies that have been granted provisional licenses by the Cagayan Economic Zone Authority (CEZA), which operates the Philippine government-owned Cagayan Special Economic Zone (CSEZ), has jumped to 19.

Last week, CEZA published a list of firms that have been issued with Financial Technology Solutions and Offshore Virtual Currency (Ftsovc) licenses and the Offshore Virtual Currency (OVC) licenses. The list also contains names of companies who have paid the applicator fees and are still being reviewed.

According to the publication, a total of 19 companies have been awarded the provisional license. Of that number, 17 were issued with provisional principal licenses while two were given provisional regular licenses. Companies holding the provisional principal license can “conduct offshore financial technology solutions business activities and offshore virtual currency exchange activities,” while those with provisional regular license can only offer offshore virtual currency exchange services.

The 17 companies with the Ftsovc provisional principal licenses include Tiger Wheel, Golden Millennial Quickpay, Hong Kong Yuen Shing Hong, Ultra-Precise Investment, Digifin Technologies, Liannet Technology, Rare Earth Asia Technologies Corp., Formosa Financial Holdings, Cr8tiv Solutions Management, Sino-Phil Economic Zone Agency Development, Tanzer Holdings, Asia Premiere International, Ipe Global, Orient Express Global, White Ranch Limited, Dragon Empire Developments, and Galaxy Plus Developments.

The two companies’ awarded with the Ovc licenses were Unicorn Venture Investment Ltd and Cezex Trading Pte. Ltd.

Companies awarded with the principal license for Ftsovc had to pay $360,000 while those awarded with the regular licenses had to pay $85,000, CEZA previously stated. The awarded licenses will be valid for the next six months. Companies that require permanent licenses will have to prove to the authority that they are in compliance with Philippine laws.

While speaking to reporters in July, CEZA Board Secretary Catherine Joy Alameda explained that the licensees must have authorized capital stock of $500,000 with paid-in capital of $200,000. In addition to this, the companies should invest at least $1 million in a period of two years in the country. They should also set up a back office in the Philippines.

In addition to the 19 companies, CEZA publication also included seight companies that are still under review. From the eight, six are being reviewed for provisional principal licenses while two are being reviewed for provisional regular licenses.

In July, CEZA granted provisional licenses to three cryptocurrency exchanges. The authority has been taking measures to create a legal framework in which crypto related business can operate.

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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Gibraltar licenses first crypto exchange—Coinfloor

UK’s first cryptocurrency exchange, Coinfloor, adds another feather to its cap—it’s become the first crypto exchange to be licensed by Gibraltar’s groundbreaking blockchain legislation.

According to a report in the Financial Times, Coinfloor will be regulated as a distributed ledger technology (DLT) provider under the new license. Coinfloor CEO Obi Nwosu was quoted by the news outlet saying Coinfloor had to undergo various processes before it secured the Gibraltar license.

According to Nwosu, the crypto company was tested on nine principles aimed at determining whether the exchange has sufficient anti-money laundering (AML), and Know Your Customer (KYC) protections in place. Nwosu said Coinfloor had to prove that their security system could stand any kind of cyber attacks that have plagued the cryptocurrency exchange industry over the years.

Nwosu also stated that the licensing process under Gibraltar’s new legislation impressed him, telling FT: “What impressed us was that this [legislation] was in the works for a long time. It’s been well thought out, well considered. They are focusing on quality over quantity.”

Gibraltar has been a haven for many virtual casinos because it offers low taxes for business based in the region. Recently, the British Overseas Territory introduced new rules specifically applying to the blockchain, which it hopes, will increase the success of blockchain-based companies in the region. This legislation was the first of its kind in Europe.

With this and more changes, Gibraltar seems to be creating a crypto-friendly environment like that of Malta. However, since UK is set to leave the EU next spring, there are many uncertainties and the move might affect Gibraltar’s dream of becoming a crypto and blockchain hub.

The new license comes as good news to Coinfloor, which recently laid off around 40 employees as part of the company’s restructuring process. The exchange, which was founded in 2013, made the decision at a time when there were increased difficulties for businesses in the cryptocurrency space following the bear market conditions.

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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FINMA issues landmark Swiss license for crypto asset management

Switzerland’s financial services regulator has issued its first license for cryptocurrency asset management, after greenlighting an application from a domestic cryptocurrency investment fund.

The Swiss Financial Market Supervisory Authority granted licensing approval to Crypto Fund, an investment fund based in Zug, Swissinfo reported. Originally launched in 2017, the fund becomes the first in Switzerland to receive recognition under the new licensing regime.

The move enables crypto fund to offer a wider range of products, which it is expected could help encourage institutional investors into the space. And with the licensing system now officially up and running, the issue confirms Switzerland’s bid to become a ‘Crypto Nation’—a stated aim of the Swiss market amidst growing competition from rival jurisdictions.

Jan Brzezek, CEO of Crypto Fund’s parent company Crypto Finance, welcomed the license, which is seen as a significant win for the company. Brzezek was quoted by the Swiss news outlet saying, “The importance of crypto assets is growing and our aim is to accelerate maturity in these markets. Regulatory recognition remains highly sought after by participants, as seen in recent press and company statements.”

According to local media reports, the success of Crypto Fund could be followed by several others, with a number of firms thought to be progressing applications for the same license. These include applications to offer banking services to the crypto sector, which would solve the current lack of banking provision, and dismantle a considerable barrier to expansion of Zug’s ‘Crypto Valley.’

With the current regulatory setup especially appealing to corporate operators and institutional investors in the sector, the region is already regarded as one of the foremost jurisdictions for blockchain and crypto startups.

The announcement follows on from similar approvals given to a blockchain firm under anti-money laundering laws, by the Financial Services Standards Association, which itself is authorized by FINMA to oversee anti-money laundering compliance.

Zug has also been participating in a number of blockchain trials, including a model for handling municipal votes through a distributed ledger platform.

With the first new license of its kind issued to Crypto Fund, it remains to be seen how many more companies will follow suit, as Switzerland continues to establish its reputation as the cryptocurrency jurisdiction of choice for serious cryptocurrency businesses.

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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