Abu Dhabi Global Market achieves KYC breakthrough with blockchain’s help

Abu Dhabi Global Market (ADGM), the financial centre of the UAE’s capital, has successfully completed trials of a new app for improving Know-Your-Customer (KYC) processes, known as e-KYC.

The app is designed to simplify the know-your-customer obligations incumbent on financial institutions and other regulated bodies under anti-money laundering laws, and was developed with blockchain partners, banks and advisors, including KPMG.

Rather than submitting to individual ID checks and verification, the app enables customers to verify their identity on a one-off basis, recording the information immutably on a blockchain. From there, the information can be accessed securely by other institutions, with a full audit trail to ensure compliance with relevant laws.

According to those participating in the trial, the technology has allows for a “radically simplified” KYC process, which will deliver cost and efficiency savings during the onboarding process.

Richard Teng, CEO of the FSRA of ADGM, welcomed the project, and the “tangible benefits” it delivers for financial institutions in improving the KYC process. He said, “By harnessing the power of technologies such as blockchain, the e-KYC project has demonstrated tangible benefits that may be offered by an e-KYC utility for financial institutions in the UAE. In addition to enhancing KYC checks across the industry, the utility can achieve significant cost efficiencies and financial inclusion driven by unified KYC standards.

According to the executive, “The use of digital platforms to share information, transact and test solutions forms a core part of ADGM’s FinTech strategy. We look forward to delivering further meaningful results through the ADGM Digital Sandbox initiative, where we will facilitate FinTech-institutional partnerships and host consortium projects such as the e-KYC project.”

The platform allows individuals to have more control over their personal data, while simultaneously allowing institutional members access to the KYC material they require to discharge their obligations.

At present, KYC checks are conducted on an institution by institution basis, with the app expected to significantly streamline the process.

It comes at a time when several other regulators and banks are investigating blockchain technology for KYC in a bid to improve the efficiency of the process.

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US regulator calls for global cooperation to stop fraudulent ICOs

Initial coin offerings (ICOs) are outright frauds that need to be stopped, according to the U.S. Securities and Exchange Commission (SEC). This is why it has become hard for regulators to monitor ICOs activities in different jurisdiction because often money raised in ICOs comes from investors in America and other parts of the world.

While speaking at Harvard Law School’s Program on International Financial System, SEC Co-Director for Enforcement Division Steven Peikin noted how the ICO market has exploded from a mere concept to a phenomenon within a short period of time. In 2016, ICOs raised $100 million, while in 2018, they raised $22 billion—a 22,000% increase. The novelty of ICOs, accompanied with the excitement surrounding blockchain technology, has been a key attraction that enterprising people have been using to lure investors, according to Peikin.

The hype and growth of the  ICOs can obscure the fact that most of these offering are high-risk investments. At times, the issuers may lack established records of accomplishment. They may also not have viable products business model or proper security measures safeguarding the digital assets from hackers. Without considering all these investors are quick, to pour out their money to projects that eventually fraudulently shut down.

Peikin recalled the case of ICO fraud conducted by Canadian Dominic Lacroix, who defrauded many U.S. investors out of some $15 million by promising a 13-fold profit in less than a month. Lacroix turned out to have had a long history of doing similar financial frauds in Quebec and Canada.

Peikin believes in fighting the fraudulent activities in ICOs and the crypto space there should be global cooperation. He acknowledges collaboration between, the United stated and Canada in Operation Crypto Sweep. The operation was launched in May 2018 by the two countries, which is conducting over 70 investigations into cryptocurrency scams and fraud in ICOs. So far, the North American Securities Administrators Association has sent cease letter to operators of fraudulent crypto companies I more than forty jurisdictions in both countries.

According to Peikin, “The sponsors of ICOs are, in many instances, located outside the United States. And international cooperation is critical to our ability to investigate and, where appropriate, recommend that the Commission bring enforcement action.”

Meanwhile, SEC lawyers recently warned celebrities from endorsing ICOs to avoid being charged with fraud. A few celebrities, such as Floyd Mayweather and Dj Khaled, have already fallen victims to such fraudulent ICOs.

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Chile’s Supreme Court decides against crypto exchange

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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Poloniex exchange launches institutional trading platform

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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NASDAQ confirms Bitcoin futures launch coming early next year

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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US Congressman introduces federal crypto regulations

The U.S. could be inching closer to creating a regulatory framework for cryptocurrencies and initial coin offerings (ICO). Representative Warren Davidson from Ohio has been working on a new bill that is designed to pave the way for crypto and ICO regulations, according to media outlet Cleveland.com, and would clarify the definition of cryptocurrencies.

The bill will be presented to the House of Representatives for discussion. It looks to create a new and unique asset class that would cover crypto and ICOs, allowing the government to regulate the crypto space more thoroughly. The legislation is designed to prevent digital assets from being classified as securities and would allow the federal government to maintain complete regulatory oversight of token offerings.

There is a lot of confusion in the U.S. regarding how to define cryptocurrencies. The Securities and Exchange Commission (SEC) has said that, with the exception of Bitcoin Core (BTC) and Ether (ETH), the majority of cryptocurrencies are securities. On the other hand, the Commodities Futures Trading Commission (CFTC) asserts that they are commodities.

Two additional agencies, the U.S. Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN), both say that crypto is money. Without a central definition in place, standard regulations cannot be created.

Davidson is somewhat of a proponent of cryptocurrencies, or at least of the space in general. He has been pushing for regulation of crypto and assisted in the writing of a letter to the SEC this past September in which he asked that the commission speed up its introduction of legislation in order to prevent tech companies from leaving the U.S. The letter read, in part, “Current uncertainty surrounding the treatment of offers and sales of digital tokens is hindering innovation in the United States and will ultimately drive business elsewhere. We believe that the SEC could do more to clarify its position.”

Even if the bill were to pass through the House, it would still need to be considered by the Senate. Ultimately, this means that regulations shouldn’t be expected to come anytime soon. Perhaps they’ll be implemented sometime next year, but there’s still a long road ahead.

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Bitmain IPO reportedly in “death spiral” as losses increase

To be or not to be – that is the question. In the case of the Bitmain initial public offering (IPO), it’s looking every day that it isn’t to be. A new revelation uncovered by a Twitter user that follows the company almost religiously has shown that the once mighty cryptocurrency mining equipment manufacturer is teetering more toward crashing into the ground in a thunderous explosion.

BTCKING555 tweeted a few days ago that Bitmain’s losses in the third quarter of the year could have been as much as $740 million. If accurate, it would mark the worst quarter in the company’s history, but continues a slide that Bitmain has been experiencing since before the beginning of March.

The tweet reads, “We got leak of Bitmain Q3 numbers! COMPLETE DISASTER. The company lost $740 Million including losses on inventory and bitcoin cash! And this is not accounting for hash war costs!”

BTCKING555 alludes to possible additional losses that could top $1 billion due to Bitmain having a large investment in Bitcoin BCH. Since the digital currency’s value has been cut by more than half its recent value, Bitmain is out a substantial amount of cash.

Bitmain would have no one to blame but itself if it were to fizzle. In preparation of an IPO that was expected to launch this past September, the company falsely claimed to have received backing by a number of international companies. It also ran up substantial debt with a chip supplier – to the tune of $1 billion. It finally paid just over two-thirds of the debt, but there hasn’t been word on whether it has made good on the outstanding portion.

The company has been accused of using customer equipment for its own mining purposes. It faces a class-action lawsuit in California over the allegations, only adding to the uncertain future of its operations.

The company also presented an IPO prospectus with the Hong Kong Stock Exchange that had blatant errors. The ability of Bitmain to completely disregard regulations and present data that has been verified as false should be enough to make any investor skeptical about giving the company any money. Add this to its mounting financial issues are cringe-worthy and should not only make investors say “No, thanks,” but should make them run away screaming.

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This is how Bitcoin SV-powered Metanet will transform the Internet

The Internet has come a long way from the 1990s, when the world’s first website and server went live at CERN in Geneva, Switzerland. Today, there’s no denying that the Internet has transformed how we live and operate. But now it’s time for the next game-changer: the Metanet.

Announced last week at the CoinGeek Week Conference in London, the Metanet project will power and integrate the Internet through the Bitcoin blockchain. The groundbreaking project is the brainchild of nChain Chief Scientist Dr. Craig Wright, and will see “the Internet becomes a sidechain.” nChain, the blockchain technology research and development firm, will develop the Metanet exclusively on Bitcoin SV (BSV), which follows the original Satoshi Vision for Bitcoin.

Wright describes the Metanet as “a value network,” where the entire global system of online activity and data are connected commercially. Essentially, the Metanet will use BSV to transfer compressed data, enabling reliable, semi-automated exchange of web page and other information.

Metanet will pave the way for new methods of distributing web content as well as facilitating eCommerce business models using Bitcoin microtransactions—meaning companies can earn instantly for clicks, content, and data. Potential fraud incidents will also be reduced, thanks to the higher data quality and integrity provided by blockchain-backed data storage.

According to nChain, Metanet will enable business models that are previously not economically feasible on the Internet. These include solutions that authorize secure access to web content, social media accounts and distributed systems, in real time and with private identity; internet search, information and content services that rely on micropayments instead of traditional advertising models; business models for real-time and secure pay-per-use of content and digital assets; integrated wallet systems; automated contracts for and distribution of purchased digital and physical products; verifiable, traceable and real-time supply chain management; automated form-free and real-time insurance policies, and secure real-time event ticket, transportation and hotel bookings.

“The Metanet will enhance, then eventually drive the Internet, making Bitcoin SV the global public ledger that underpins all Internet activity,” nChain Group CEO Jimmy Nguyen said in a statement. “It is a mind-blowing concept with limitless possibilities based on the additional security, efficiency, and data integrity of the blockchain, and is another part of Craig Wright’s vision for unleashing Bitcoin’s true power.”

Metanet is “an enormous undertaking,” even for a firm like nChain, which noted that the project “will take time to specify and deliver in a business-friendly form.” To make this a reality, the blockchain tech firm is continuing its work to progressively develop the Metanet and also doubling down to find the perfect collaboration partners for the project.

“We have taken the initial steps, and know it will take work with others to make the Metanet a reality,” Nguyen said.

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nChain unveils ground-breaking Metanet project to power the internet on Bitcoin SV blockchain

London, United Kingdom – 5 December 2018

nChain, the global leader in blockchain research and development, has revealed its ground-breaking “Metanet” project to power and integrate the Internet through the Bitcoin blockchain. Using intellectual property it has created, nChain will develop the Metanet exclusively on Bitcoin SV (BSV), which reflects the original Bitcoin protocol and design. 

The Metanet is the creation of nChain Chief Scientist Dr. Craig S. Wright, who announced the project during his November 30 speech at the CoinGeek Week conference held in London. Dr. Wright explains:

“What we are going to actually create is a secure alternative to the Internet, built on the blockchain.  The Internet becomes a sidechain to the Bitcoin blockchain. The Metanet is a value network—the entire global system of online activity and data connected commercially.”

The Internet has transformed how we live and operate, but it was born in a pre-blockchain era.  On the surface, the Metanet sounds similar to the Internet.  But the Metanet is powered by technical differences in how data can be stored and accessed through blokchain transactions, which provide security and economic efficiency advantages over current Internet technology. The Metanet will transform how the Internet operates by using Bitcoin transactions to transfer compressed data, and thus enable reliable, semi-automated exchange of web page and other information.   

The Metanet will enable new ways to distribute web content and facilitate new e-commerce business models made possible by Bitcoin microtransactions. This can allow companies to earn instant micropayments for clicks, content, and data. Taking advantage of the economic security and stability of the blockchain, the Metanet can act to reduce the potential for fraud due to the higher data quality and integrity that blockchain-backed data storage provides.

This enables companies to create new business models with blockchain-based content distribution and microtransactions that (until now) have not been economically feasible on the Internet.  For example, new solutions will allow:

• Authorisation of access to web content, social media accounts, and distributed systems securely, in real time, and with private identity

• Internet search, information and content services that rely on micropayments by users rather than traditional advertising models

• Business models for real-time and secure pay-per-use of content and digital assets

• Integrated wallet systems for a seamless user integration and experience

• Automated contracts for and distribution of purchased products (both digital and physical)

• Real-time supply-chain management in a verifiable and traceable manner

• Automation of form-free and real-time insurance policies

• Secure real-time event ticket, transportation and hotel booking

nChain Group CEO Jimmy Nguyen observes:

“The Metanet will initially enhance, then eventually drive the Internet, making Bitcoin SV the global public ledger that underpins all Internet activity.  It is a mind-blowing concept with limitless possibilities based on the additional security, efficiency, and data integrity of the blockchain, and is another part of Craig Wright’s vision for unleashing Bitcoin’s true power.   We have taken the initial steps, and know it will take work with others to make the Metanet a reality.”

The Metanet project is an enormous undertaking that will take time to specify and deliver in a business-friendly form. nChain will continue its work and find select collaboration partners to help progressively develop the Metanet.

Find Craig Wright’s presentation announcing the Metanet project here.

For further explanation, watch an interview with Craig Wright here.

For media enquiries, please email media@nChain.com

or contact Infinite Global at:

Matthew Gilleard (Infinite Global, EMEA)

+44 (0)207 269 1430

Jamie Diaferia (Infinite Global, US/ASIA)

+1.212.838.0220

ABOUT NCHAIN: nChain is the global leader in research and development of blockchain technologies.  Its mission is to enable massive growth and worldwide adoption of the Bitcoin network – focusing on Bitcoin SV (BSV) as the original Bitcoin which will fulfil the Satoshi Vision.

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Bitstocks’ Michael Hudson: For miners to feel truly secure, ‘we need genuine merchants’

In this interview with CoinGeek’s Becky Liggero, Bitstocks founder Michael Hudson explains what makes Bitcoin, Bitcoin.

Michael Hudson founded Bitstocks in 2014, when “Bitcoin was really Bitcoin.” In terms of its technical properties, such as ability to scale, Bitcoin Cash—now Bitcoin SV—continues functioning as an instant medium of exchange.

“So we’re now in a transition in our business where we are building an ecosystem. For us, if you’re building an ecosystem and you’re building a business, you want the most solid, robust foundations,” Hudson said. Bitstocks initially supported Bitcoin Cash as it has “the most solid and robust foundation for us to put our house, our ecosystem, our work on top of; however, Hudson announced at the recently held CoinGeek Week Conference that they will now use Bitcoin SV as the supporting cryptocurrency.

Practical application of the technology is most clear when this is embraced by merchants. “Merchants play a huge role, especially from a miner’s perspective as well. Miners are making huge amounts of financial investment which, over years, they need to get a return on investment,” according to Hudson. “In order for miners to feel truly secure and not flip-flop with their hash power, we need activity, we need genuine merchants. If there’s businesses built on top of this technology, then miners have the security to keep and continuing funding this initiative, funding this project.”

Hudson also pointed to initial coin offerings (ICOs), which he said were not bad in themselves. “ICOs gained a lot of traction in the space. There is some positive to ICOs. The negatives clearly are, you have a bunch of wasted energy, which is getting funded, to curate more inefficient wills than the original will. Bitcoin was the original will. So having projects being funded to create a more inefficient version is a complete, utter waste of time and resources. However, it has brought a lot of attention into the space,” he explained.

The important thing at present, he said, was to shift attention gained from ICOs, for real-world use. “What we need to ensure that we’re doing is that when this attention which is now being attracted to the space, the narrative and how they’re guiding that attention is done in a correct way. Education is there so people can now make real choices. We need to move from just speculation, and speculation is very fickle as well, especially with investors, to now real, genuine businesses,” he said.

Hudson also pointed to outlets such as CoinGeek as having “a very important role… in controlling this narrative and ensuring that the right education is being put out there, where people realize, ‘Hold on, maybe it’s not just all about this, this is real, this is not a fad, this isn’t just a way of making a quick buck. There’s real businesses being built on top of this stuff.’”

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