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Dubai-based crypto exchange BitOasis delists privacy tokens

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The cryptocurrency market remains unregulated by the most part in most of the planet, so we haven’t seen politics exert any influence over it very often. That could be changing.

BitOasis

BitOasis is a cryptocurrency exchange and trade platform based in Dubai. It also offers mobile wallet services. The company aims to be global, but, for now, it works mainly for clients in the Middle East and Northern Africa. It was founded in 2015. It only received a preliminary license from the UAE’s Financial Services Regulatory Authority some twelve days ago.

And now, the platform is letting its customers know that starting next May 31st the cryptocurrencies known as ZEC (Zcash) and XMR (Monero) will be delisted. These two digital assets belong to the few blockchain projects in which privacy in every transaction is a paramount value. While transfers over these blockchains are entirely reliable and secure, they can’t be traced from the source to the target in any way, even by examining the blockchain directly.

The world’s governments are quite hostile to blockchains that privilege the users’ privacy. A few weeks ago, there was a proposal in France to ban those same two cryptocurrencies (among others) precisely because they create a blind spot for the government. The rationale behind the proposed ban is that such a high degree of privacy facilitates funding criminal and terrorist activities. Which could be true, of course, but nobody mentions that it also makes government control impossible, which is probably the most critical issue for governments.

Is BitOasis delisting those two coins to facilitate getting a full license from the government? It’s impossible to know. Everything goes in Dubai, after all, but there’s no way to find out for the time being.

The platform provides no explanations to customers at all. On the contrary, it asks of them to answer a set of very intrusive questions such as the origin of their ZEC or XMR assets, the purpose for which they own them, the purpose of withdrawing them from the platform (if there were withdrawals) and if they’ve bought any for third parties. So the platform is not only against private coins but also against respecting its users’ privacy by asking them to answer questions which are none of its business.

We don’t know the reason behind BitOasis’ move, because the platform has said nothing on the subject except that both tokens will be delisted. But given the features shared by both coins, it’s rather clear that the platform is getting rid of them because some of the world’s governments are not very happy about them.

Additionally, if you own some of either currency and you have it stored in this platform, you won’t be able to withdraw them as such. You’ll have to trade them for BTC or AED (the local country’s fiat).

BitOasis’ decision is sad because it’s a hit against privacy and freedom in the crypto verse. And what will happen when other projects like Tron or Bitcoin come up with enhanced privacy features, as they’re scheduled to do? Is there any point in having an exchange platform in which Bitcoin is also banned?

Unfortunately, it’s very likely that we will keep seeing exchange platforms running away from assets considered too disruptive by governments. Even if regulations don’t call for that.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

Iran bans Bitcoin sell purchase platform LocalBitcoins for traders

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Iranian cryptonauts can’t use the P2P cryptocurrency exchange platform Localbitcoins.com anymore. At least not from within their own country for now. The Iranian section in the site says that the platform is currently not available. This is happening after substantial trading volumes occurred in Rial (Iran’s national fiat currency, IRR) materialized, which had been growing in value over the previous weeks.

The Helsinki-based trading platform has offered no explanation about why it’s decided not to serve Iranian residents anymore.

Iran, however, has tense diplomatic relations with the West and tensions have been growing over the last few days between the Middle Eastern country and the USA. The US military placed the soldiers in the region on high alert. The US State Department evacuated nonemergency employees. Donald Trump’s tweets and interviews on the subject aren’t lessening the stress either. Economic sanctions are also in place, and they could be the reason behind Localbitcoins’ otherwise strange behavior.

Bitcoin as a solution for economic sanctions

Economic sanctions and trade bans against Iran were imposed decades ago, in 1979. Many United Nations members have joined them. Cryptocurrencies, however, have given Iranian residents a chance to work around the sanctions and use Bitcoin and other digital assets to acquire services and products overseas without the need for USD or conventional trading mechanisms. This shouldn’t be a surprise at all, since that kind of use case is precisely one of the reasons why Bitcoin came into existence, even if, in this case, it seems to be on the rebellious side of things.

Trading data from Coin Dance shows that Bitcoin trading volumes out of Iran were indeed quite substantial until Localbitcoins shut down its Iranian users. The last week produced the highest volumes seen in the BTC/IRR trading pair since the 2017 bull market.

Those volumes were trending upwards significantly until the platform decided to stop service for the Islamic nation. Users will be allowed to withdraw their digital coins, but not to use them for trading in the platform. At least not until further notice.

Digital asset adoption has been faster in Iran than in the rest of the world, probably because of the economic sanctions. Also, the country’s government and central banks have made no attempts so far to bring forth any regulation. That suggests that they’re quite happy to let people buy, sell and trade BTC as it opens a trading gateway to the rest of the world at a time in which most other options are closed.

A pizza place in Tehran reports that,

“We have up to 200 people paying with crypto each month, mostly consisting of large groups who throw parties at the restaurant to use the discount.”

The Iranian interest in cryptocurrencies surged after Donald Trump announced his intention to break his country’s commitment to the Iran nuclear deal and to impose even worse economic sanctions.

It also happens that electricity is very cheap in Iran because the country is very rich in oil. The lower power costs make it convenient for locals to mine Bitcoin and other currencies. Even Chinese miners are moving to Iran so they can take advantage of the cheaper environment.

Disclaimer: Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

Russia’s Sberbank wants details about a client’s crypto activities

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According to the Russian Forbes, the Russian bank Sberbank (which is the country’s largest) has requested a client to provide details on the income they get from cryptocurrencies.

Vladimir Smerkis, who co-founded the cryptocurrency trading and exchange platform tokenbox.io, communicated to Forbes portal that the client in question (who remains anonymous so far) had a letter delivered from Sberbank in which the institution asked him to disclose his revenues originated from digital assets.

The request is based, according to the bank, in Russia’s Federal law number 115 known as “On Combating Money Laundering and Terrorism Financing.” The irregular factor in the scenario is that this client claims to have already given the bank all the information regarding its cryptocurrency income.

More definitely, the bank wanted to be aware of the client’s cryptocurrency wallet’s address. Also, the mining tool the client uses to mine digital coins (Bitcoin, presumably) described to the last detail (model, technical specifications, hash rates, the whole nine yards).

If all the above requests weren’t intrusive enough the bank also wanted all the documentation that confirms the ownership (or rental) of the mining hardware, as well as of the premises in which the mining farm is set up. Sberbank confirmed all the information, Forbes informs.

Smerkis expressed is dismay over the Russian’s bank attitude:

“We are very much perturbed by how Sberbank can appeal to terms that do not yet exist in Russian law.”

Another Russian crypto personality, Artem Tolkachev (CEO and founder of Tokenomica, a regulated decentralized exchange) said that there’s nothing new about Sberbank’s demands because traditional financial institutions “operate within their regulatory framework for handling cash. So it is a way of legally introducing cryptocurrency revenues into circulation.”

The news comes as a stark contrast to declarations issued by Dimitry Medvedev, Russia’s prime minister, who declared only a couple of weeks ago that the regulation of cryptocurrencies is not a primacy for the government of Russian because the cryptosphere has lost a lot of its popularity in the country recently.

Medvedev remarked that crypto had its fair share of attention one year ago, during May 2018, when he pressed for the government to create national legislation that could, at least, be useful in dealing with some of the most essential things in crypto.  On that occasion, the minister finished by saying that while the BTC hype has diminished, the rest of the crypto market could still rally.

That prompted the creation of Russia’s first legislative effort towards cryptocurrencies “On Digital Financial Assets” which was promulgated by the Russian parliament’s lower house in May last year.

But it wasn’t an effective effort because the Duma discarded it after the first reading and sent it back. The issue was that critical notions such as “cryptocurrency mining” were not clearly defined within the law. So crypto remains in the legal limbo of Russia.

The mixed information provided by Forbes leaves unanswered an important question. Does the bank have the legal right to ask such information from clients? Is the client legally obligated to provide such intrusive information to this bank in particular? This, as well as many other questions in Russia, are quite murky and remain a mystery in the West.

Disclaimer: Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

Scandals and crypto: 3 of the best-known cases

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Bitcoin and many other digital assets hold great potential for the good and the bad. They could make you rich in a heartbeat. They could also make you lose your shirt just as quickly. Cryptocurrency investing is very risky, which is why it can be highly profitable, and very exciting.

One of the things that make cryptocurrencies so exciting and open to the possibilities is also one of the things that make them so dangerous. That’s the lack of regulations from governments and institutions in general.

Lots of new exchange platforms, as well as wallet services, are popping out in the crypto verse all the time. And they remain unregulated. That’s why the risk of fraud, hacking and other misbehaviors remains real. Take the Bitfinex fiasco, for instance, which saw the platform lose USD 66 million. So the risks are here, they’re real, and every cryptonaut should be aware of them. And the Bitfinex example is not even among the most important ones.

And the lack of legal codes is not the only problem. The very nature of the beast makes it prone to moral hazard. It’s a situation that allows for huge risks, which, in turn, mean that equally big profits could be in the cards, which is why recklessness is present around the crypto verse.

In this article, we recapitulate for you some of the greatest scandals we’ve seen so far in the cryptosphere.

QuadrigaCX

It could have been a Sherlock Holmes novel. A dead CEO, fraud accusations, millions of dollars lost. It shook the Bitcoin world, and while it looked like something out of thriller fiction, the nightmare was genuine for all those holders who lost their wealth.

It was 2018 and QuadrigaCX’s CEO, Gerald Cotten was enjoying his honeymoon in India. But he didn’t make it back. After Mr. Cotten’s death, the company found that it couldn’t manage the company’s cryptocurrency portfolio. So the bells rang, and the alarm was widespread.

QuadrigaCX’s wallets were cold. That means that the company’s cryptocurrencies are stored offline, which is a good thing when it comes to security because it makes hacks so much harder. But only Mr. Cotten was privy to the passwords, so the company suddenly was unable to give its customers their coins back.

The situation prompted an investigation on QuadrigaCX, and then new disturbing facts started to emerge. Once the investigators got hold of Mr. Cotten’s personal computer, the firm Ernst & Young found a way to locate all the wallets owned by the company. And the wallets were empty, which meant that from USD 140 to US 190 million were missing.

As the auditing company followed the money, they found that the wallets had been regularly emptied over a full year before Mr. Cotten’s honeymoon. So the investigators (and the customers) had the remains of a company and no assets to recover.

The highly irregular situation described above lead to all kinds of theories. For instance, some said that Mr. Cotten faked is own demise so he could get away with millions of dollars to enjoy with his new wife. His widow says that he actually died.

But what happened to the company’s deposits? Good questions. Nobody has been able to find out so far.

Mt Gox

This cryptocurrency exchange was started by Jed McCaleb who enjoys an excellent reputation in the crypto world. Mt Gox stands for “Magic the gathering online eXchange.” No, we don’t understand what that means either. But the weird name didn’t stand in the way of Mt Gox becoming the world’s largest Bitcoin trader very quickly.

The platform was responsible for about 70% of the world’s trading in Bitcoin at some point. But things were never quiet for the company. It suffered from persistent security problems, it was always under attack by hackers, the CEO wasn’t the brightest bulb in the box, and they even got a lawsuit from the US government. So Mt Gox was always in the news for all the wrong reasons.

But painful as life was for the company, it was manageable. Then a real catastrophe hit. In 2014 the company had to go bankrupt because it lost half a billion USD in Bitcoins. Hackers had been emptying the company’s wallets over a long, and the company security team was none the wiser. Then, as users tried to withdraw their funds, they found they didn’t have any left.

The users complained, of course. The company answered by going silent and disappeared from all social media. The story isn’t over yet. It’s been almost five years already, and creditors are still trying to get their money back from Mt Gox. Some of them have been able to sell the debt at discounted prices, and the legal fight remains ongoing.

NiceHash

This company started in Slovenia. It was a crypto mining platform shared by both miners and investors. In December 2017, when Bitcoin was most attractive than ever, the platform had to face a very advanced hack attack. The hackers succeeded and went away with BTC 4,736,042 in their digital pockets. That’s the most significant number we’ve seen when referring to Bitcoins.

The token’s price was around USD 20k by then, so the hackers got away with trillions of dollars. And, to make things even worse, not a single Satoshi was recovered. So the unavoidable happened, and every member of the managing team had to resign.

Incredibly, and unlike most stories of this kind, the company survived. It remained in business and was able to rescue what was left of its heavily damaged reputation. They’re still in business trading BTC and other digital assets.

Final thoughts

There is something to learn from these stories.

The cryptosphere can be lucrative in the extreme. But “gainful” always means risky as well. If you take on too many risks, you’re going to have to pay the price, sooner or later. So take advantage of your opportunities, but remind yourself of staying safe and use prudence. We wouldn’t like to know that you become part of a story such as the ones in this article.

Disclaimer: Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

France’s new crypto law forces banks to deal with crypto startups fittingly

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Getting a bank account if you are in the crypto industry is complicated. Double that trouble if you are a fledgling startup with no track record and no cash, but that is now a worry of the past, thanks to the recent crypto law France introduced. The constitution guarantees a bank account to any crypto company that is willing to opt into regulation.

It is a surprising move by the French government and the financial regulator AMF (Autorité des Marchés Financiers), which might be seen as avant-garde compared to other large countries such as the United States. In the US, the regulators have warned about “reputation risks” to banks that provide a deposit account to companies in the digital currency business.

Talk between AMF and stakeholders: Key to regulations

Domitille Desertine, the head of AMF’s fintech, innovation and competitiveness divisions, there was apparently good feedback from cryptocurrency businesses that was matched by the authorities. She went on to say that the government is supportive of the right to access to banking as long as the company in question is regulated.

She added that while the relationship between a bank and a startup is still contractual but if the bank refuses, they will need to justify to the AMF why they did not allow a startup to open a bank account. This will apply to all banks; no matter small or large, without exceptions.

IMF fintech head also drew a parallel to the crowdfunding issue a few years ago where banks did not want to open up bank accounts for those platforms because the money was coming from “random places on the internet.” She stated that this requirement is just one, a small part of a far-reaching blockchain focused bill that was adopted on the 11th of April.

PACTE Law offers many more options to blockchain based businesses

The French government has been keen to become a top destination for blockchain and cryptocurrency businesses. The law is designed to create a much more favorable environment for small and medium enterprises that they believe will boost the economy with a wave of innovation and entrepreneurship.

As per Domitille, there is also a provision in the law for visas to be offered to businesses that plan to provide ICO services and other “digital asset service providers.” Exchanges and custodians are also part of the plan. This is not a spur of the moment law; there has been a sense of urgency to put it into the place according to a partner at Simmons & Simmon, a top Paris based law firm. Emilien Bernard-Alzias stated that plans began some time ago and have only now come to fruition.

Dessertine meanwhile has said that interest in the new framework has been high with “20 to 30 digital asset service providers having been in touch already”. Though the formal application process will not be open yet, with the end of summer being touted as the start point, it seems that many firms will be prepared to jump as soon as the doors open.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

Ripple puts emphasis in Southeast Asia by doubling its Singapore office

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Ripple is one of the world’s most important blockchain private companies. It has a global outlook in which the Southeast Asian market has an essential place in the firm’s plans because of the intense activity in the crypto verse that’s centered around that zone of the planet. And Ripple is going to put more attention in Asia by doubling the number of employees it has at his Singapore offices.

The company that created and is still behind the XRP digital asset (which holds the third spot by market capitalization) is about to grow its Asian office, based in Singapore. The small island is a hub for cryptocurrencies and blockchain technology. The Tron Foundation is also based in Singapore even if most of the project’s activity happens in China.

Doubling the employee number at Singapore is not a colossal undertaking if you take into account that it means going from 12 to 24 employees during the following year. The point in this move is to increase the full range of operations offered by the company. Finews Asia reported a few days ago that the increase was all about customer service, but it’s not going to be limited to that aspect of the company’s work.

Ripple (some still call it a “startup” after seven years of going strong) is looking to increase its capacity in the Asian zone so it can satisfy its customers’ needs. Asia is a vital geopolitical region for the cryptosphere in general, but it’s been especially relevant for Ripple because many of its most critical partners (which tend to be banks and remittance services) are located, sometimes even limited, to the Asian zone, especially in the Southeast.

Ripple and Southeast Asia

Let’s start by stating the obvious (which is not so evident for all observers). You are undoubtedly aware of the crypto winter. The market has been under the bears’ dominance for more than 16 months so far. While prices have been going up for about a week and a half, it remains premature to assume we’re all out of the doldrums already.

The winter has been very harsh. It’s cost the market more than 85% of its value, so it’s forced many blockchain projects to cut down their workforces. So it’s incredible that living in that same bearish environment, Ripple can afford to think about expanding anywhere in the world instead of firing people. It’s surely a well-managed company that can negotiate a storm successfully.

The firm knows that it must give that region the attention it demands is one of the most critical markets for the firm. Erin van Mittenburg, Ripple’s Senior Vice President for Global operations was quoted by The Business Times saying that,

“The demand here is significant, so it’s an easy decision for us to continue to invest in this market and make sure that we can… also seek out new customers, new partners and new ways that we can work with the market.”

The company produces a blockchain platform capable of supporting a series of software solutions (developed, maintained and operated by Ripple) which hold the promise of removing most of the friction in settling international payments.

So far, and for the last 44 years, that market has been monopolized by the very inaptly named SWIFT system. Ripple’s alternative is faster (minutes instead of days), more competitive (fractions of cents instead of fees of around 25%) and much more reliable.

Because of this focus in the remittance and international transfers business, Asia is quite essential as it has a vast trading volume in this market. That’s why Ripple entered the Singaporean market two years ago.

There’s another reason for Ripple’s interest in Asia. It’s the region that has embraced its systems with the most enthusiasm. Half of the company’s strategic partners are located somewhere in Asia. Some of those include the Siam Commercial Bank in Thailand, Malaysia’s CIMB Bank, and Philippine’s BDO, not to mention several big financial players in Japan.

Asia in the Cryptoverse

Asia doesn’t get all the limelight that the US and Europe have when it comes to being protagonists in the cryptocurrency world. But it is the real leader because of the trading volume and generalized interest there is in digital assets. Just think about a couple of relevant facts.

Most of the Bitcoin mining in the world is done out of China (which is the country that also manufactures the toys that allow for that mining process to keep going). And how excited has everybody been about the Bitcoin’s surge that started on last week’s Tuesday?

Some observers are even reporting that the winter is over (again, probably prematurely)! Well, the market move that brought the Bitcoin price up by a thousand dollars in sixty minutes flat came out of Asia, not Europe nor the US. The thing to take out of this paragraph should be clear now. Asia is crucial, central, and very influential for the cryptosphere and Ripple knows it.

We already talked a bit about China’s role in the crypto verse (basically, it’s the country that keeps the Bitcoin network going). But the red giant is not the only player. Japan is also a relevant market in the industry. The country has seen two of the worse security breaches in the short blockchain’s history happen in its territory. Those incidents prompted the state to adopt pro-crypto regulation instead of disrupting the market while waving the flag of investor protection.

Some 61 Japanese banks are Ripple’s partners and are using or testing the company’s technology for international payments. That’s 61 out of the roughly 200 banks that are working with Ripple all over the world, so Japan alone is more than 25% of Ripple’s global business.

Substituting the SWIFT system with blockchain-based and cryptocurrency-based solutions could be how virtual money finally finds its way into worldwide mass adoption and mainstream acceptance. The mere fact that so many banks in the world have been willing to work alongside Ripple in this market is astounding.

Let’s not forget that the world’s banks have regarded Bitcoin in particular, but also cryptocurrencies in general, as an evil thing which is why they’ve stayed away from it to the best of their abilities. And even so, Ripple has persuaded many to try out the blockchain and see its advantages for themselves.

Another factor in Asia is that many countries (Singapore is one of them, Thailand would be another one) have enacted crypto-friendly policies. That’s why many of the leading cryptocurrency industry players have set up shop in Asia. And as more governments in the region become friendlier towards crypto, they are likely to influence other countries in the zone to be friendly as well or risk being left out of the action.

Also, many exciting blockchain projects come out of Asia, so the region is also a source of innovation and leadership in the industry. Alibaba, for instance, received the most patents for blockchain technology last year. Tron came out of Asia. There are many more examples.

Ripple has always chosen its battles very carefully, and it’s still finding ways to win them. So this move is bound to be carefully considered, planned and executed. Chances are that, during the next 12-24 months, we will hear a lot about Ripple’s growth and success in Southeast Asia. And that progress will be fueled by those 12 new employees that will get on board the company during the next few months.

Image courtesy of Pixabay.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

What on the earth is happening with Bakkt?

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Bakkt was announced as a project several months ago, and it immediately gained lots of eager fans and supporters that were impatiently waiting for the promised company to become a reality. And who could blame them?

We’re talking about a partnership between Microsoft, Starbuck’s (yeah, the coffee guys are going crypto) and ICE (the firm that owns the New York Stock Exchange) to create a massive cryptocurrency service that would facilitate mass adoption, at last, for Bitcoin and other digital assets.

And it would enable you to pay for your cappuccino using your Bitcoins. But it’s stuck. It’s been stuck for ages as a new problem arises at every step of the way, and that’s making the supporters weary.

See, Bakkt can’t become a real thing without a favorable ruling by the Commodity Future Trading Commission (CFTC), which is slightly weird since digital money is not a commodity at all, but that’s how absurd current regulations are.

The CFTC corroborated last month that it’s reviewing it. But they’re not in a rush to actually do the did (while Bakkt supporters are already quite anxious). Bakkt was supposed to go online during these year’s Q1, which is already gone. And we don’t need to tell you that Bakkt is still offline.

But there’s a hope for an imminent ruling, and it has to do with things happening in other cryptocurrency exchanges, which will be Bakkt’s competition in the fullness of time. This whole situation seems taken out of a novel by Franz Kafka for the eager Bakkt fans who can’t wait for it to go online.

Bakkt?

An elementary idea drives Bakkt: to turn Bitcoin into a legitimate financial instrument. As the world’s main digital asset penetrates the world’s more traditional (and sizeable) financial institutions, the crypto market would change.

It would stop being a market dominated by retail investors which are mainly hobbyists, to become a mainstream market with all the trimmings, much like Forex, the commodities market, stock exchanges and all those financial activities that don’t get the bad rap that the crypto verse has, unfairly, acquired.

As a quick digression, let’s notice that several analysts have said that the retail-driven cryptocurrency market has given us everything it can already.

If crypto is going to grow again, as it has in the past, the only way that will happen is with fresh institutional money from Wall Street, the London’s City, and traditional banks investing in crypto all over the globe. In other words: if a new bullish run is ever going to happen again, it will only be because of corporate money. Bakkt could be the trigger for that.

Bakkt already has a CEO, Kelly Loeffler, who had this to say:

“Bakkt is designed to serve as a scalable on-ramp for institutional, merchant, and consumer participation in digital assets by promoting greater efficiency, security, and utility.”

The main obstacle for this vision is the lack of a reliable process that’s impervious to manipulation. The project is so ambitious, and the system processes so unclearly, that the CFTC could have a hard time making its mind up on this issue because it could find dilemmas and contradictions (at least in traditional financial terms) everywhere in the project.

Future contracts and manipulation

Rumor has it that CFTC is somewhat worried about the possible abuse of Bitcoin future contracts settled in cash. Let’s translate that into plain English. Future contracts become mature at a point in time. That’s when one party has to pay the other one the difference between the spot and the future price. That makes the buyer vulnerable to spot price manipulation.

That being said, Bakkt’s proposal is all about settling futures contracts physically (whatever the heck “physically” means when it comes to digital money). So in Bakkt’s service, buyers would physically get their Bitcoins when the contract matures in such a way that spot price doesn’t come into it at all. But physical settlement contracts do have problems of their own, even if they’re not related to spot prices.

Custodian services by third parties

Third party custodian services make sense for commodity futures exchanges to employ. They minimize the risk of theft and loss. Nonetheless, Bakkt’s idea is to be its own custodian, and that probably won’t make the regulators all that happy because there’s this thing called ” SEC 17 CFR Part 270 – RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940″. It reads like this.

“Currently, investment companies generally must maintain assets relating to these transactions in special accounts with a custodian bank.”

To tangle things even further, it just so happens that regulators already approved one of Bakkt’s parent companies (ICE). Not for cryptocurrency trade but for traditional business, which is to be expected of the New York Stock Exchange’s owners.

That whole context seems to point to a scenario in which CFTC’s decision will hang on its belief about the “reality” of cryptocurrencies as financial instruments. Up until now, the regulatory agency has remained silent as a grave. They explain their reticence by invoking the need to understand the cryptosphere in full before emitting any statements.

The competition

Bakkt is not even online so far, yet it has competition already. And the competitors couldn’t possibly care less about the CFTC’s delay. As a matter of fact, the chances are that they’re enjoying it. Take CoinFLEX. It’s keeping its momentum regarding development.

The UK-based CoinFloor subsidiary can boast support from several crypto celebrities such as Roger Ver (of Bitcoin Cash fame), Mike Komaransky, and the Dragonfly Capital Partners. And they’re receiving a round of fresh money in investments by the Dragonfly Capital Partners and Polychain Capital. These new partners are not only a sign of confidence in CoinFLEX itself but in that the Bitcoin futures business will most likely be approved.

And CoinFLEX is also launching a token of its own, in an attempt to differentiate itself from Bakkt. The coin’s use case would be to reward its customers by decreasing fees and helping to increase liquidity in the exchange. Users will get tokens according to the amount of business they carry out using the platform, especially when it comes to daily volume.

Final remarks

So now you know what’s going on with Bakkt, which is to say, not that much. But the project is still standing, it still has the support of its three parent companies which are the world leaders in their respective niches, and it’s still moving forward. It just so happens that the red tape it needs to cut through is so thick that it probably needs a new pair of scissors.

The most likely scenario is that Bakkt’s launch will remain stuck for quite a bit. Governmental agencies have shown no urgency at all when it comes to dealing with cryptocurrency issues. Just take the SEC and Ripple example: the cryptosphere has waited a very long time for SEC to rule about Ripple’s XRP’s nature. It must decide whether the token is a security or not. It still hasn’t happened and SEC just doesn’t seem to mind about the delay.

SEC’s decisions (as well as CFTC’s) are binding only within the United States. That segment of the market remains influential enough (many of the world’s most influential exchanges are based out of the USA). So even if Asia and Europe are way more active in the cryptosphere, an adverse decision by either agency could send shockwaves all around the crypto world that would start in North America but would affect cryptonauts all around the planet.

Bakkt will happen. It’s unthinkable that Microsoft, Starbucks, and ICE could be stopped if they put their minds (and resources) into a project. Just don’t hold your breath because chances are it will take some more time. Much like the next cryptocurrency bull run.

Image courtesy of Pixabay.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

Japan’s JR East considers accepting crypto payments for transport cards

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It’s no secret that the crypto scene in Japan is developing at an exponential rate, thanks to the friendly crypto regulations being established in the country as well as banks on the way to launching their very own stable coins plus many others.

The latest news from the crypto-friendly country is from the most significant railway company, East Japan Railway Company (JR East). According to local news sources, the company is considering to soon enable the Japanese commuters a well as tourists to pay for journeys with various cryptocurrencies and stablecoins.

Cryptocurrency Payment System via the Suica Smartcard

The railway operator wants to move alongside the changing world as now it’s considering a crypto payment system to be integrated into their payment cards. To ensure that they successfully make it possible, JR East has already invested in a famous Japanese cryptocurrency exchange dealer DeCurrent that was only recently approved by the Financial Conduct Authority (FSA).

With the help of the exchange, JR East would then integrate crypto payments to the Suica payment card which is the famous card in the country hosting up to more than 70 million folks. With the cards, individuals will be able to access various services such as paying transport fees.

Besides, the e-money feature of the card could be used for buying a plethora of items like soft drinks, coffee at vending machines as well as newspapers at station kiosks. The primary objective of the card is to provide commuters a more pleasant trip.

Mass Adoption Boosted

As stated above, as per the reports, the current number of people already using the Suica card is more than 70 million. Therefore, if JR East succeeds in integrating the card with cryptocurrency, it goes without saying that over 70 million individuals could be using cryptocurrency payments in bitcoin and other cryptos.

It’s clear that JR East wants to consider and cater to all their customer’s needs, including those that want to pay for services with the digital currency.

DeCurrent Exchange: The Wheel for the Accomplishment of JR East’s Ambitions

Suica cards currently don’t have options of being topped up with cryptocurrencies. Therefore, those options have to be integrated first, and DeCurrent exchange is the one responsible. Only a few weeks ago, they launched a payment system which Kazuhiro Tokita, president, and representative director of the exchange said would be integrated with Suica card.

However, no timeline yet has been given for implementation of the system on Suica. Besides, JR East is only considering the option and has not provided clear plans as well for the rollout. DeCurrent will debut trading in mid-April and already supports cryptos such as Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), and Ripple (XRP).

Blockchain technology is slowly but slowly getting into the mainstream ecosystem, and the success of the project by JR East will only boost its adoption.

Image courtesy of Pixabay.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

Is Ripple pulling XRP’s strings? David Schwartz answers

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Crypto’s ugly duckling

Ripple is one of the cryptoverse’s most successful projects for sure. If you go by market capitalization, it’s ranked on the third spot (and it was even second for a few weeks not too long ago). If, on the other hand, you’d instead go by a coin’s profitability, XRP has been the most profitable coin for two years in a row (2017,2018) outperforming even Bitcoin.

And yet, the project remains controversial or unpopular among many cryptonauts. Why is that? Well, there are several reasons. Some of them are very valid, and some of them are just a matter of perception.

Cryptocurrencies were born when Bitcoin came online, as you surely already know. At that moment, Satoshi Nakamoto (the still unknown and mysterious hero who authored and deployed the Bitcoin network almost single-handedly) was very vocal and clear about the project’s purpose: it was to disrupt fiat currencies and the world’s traditional financial system and to get rid of them once and for all.

It’s a radical purpose that has found echoes among cryptocurrency aficionados. Ripple has worked very hard to be useful to banks and remittance services in eliminating friction from international transfers. Its endeavored to support one aspect of the traditional banking system, and that’s been construed as treason to the origins of crypto by some cryptonauts.

But how correct is this point of view? One should take into account that the best way to disrupt any system is to infiltrate it and Ripple is the only blockchain that’s managed to make way into, say, Wall Street.

Profit-seeking and centralization

Then, there’s the private company thing. Most cryptocurrency projects are open-sourced, community-driven, and supported by a non-profit organization. Not so with XRP. Ripple is a private company that aims to make a buck for its shareholders. This is not so well-liked either by many aficionados.

Decentralization is controversial another point. Because the Ripple blockchain is owned by a private company and the tokens are pre-mined (more on that later), there’s been much concern about the network’s decentralization or lack thereof. Ripple has been trying intensively to persuade anybody who will listen that the network is genuinely decentralized, but it’s still failed to do so to some extent.

Is it a security?

XRP has been charged with being a security rather than a currency. The most notorious accuser has been Dr. Craig Wright.

Dr. Wright is a man who enjoys attention and grandiloquence very deeply. He’s notorious for claiming to be none other than Satoshi Nakamoto, and he was one of the driving forces behind Bitcoin Cash’s recent fork.

So this is a man who clearly likes to create controversy. But Craig Wright doesn’t decide what a security or not is. Within the US, only SEC can do that, and SEC has not decided yet. So while there’s not that much reason to believe Dr. Wright (in this subject among many others), his opinion created enough turmoil so that now we can only wait until SEC decides to be absolutely sure.

The ownership issue

And last, but not least, there’s the token ownership issue. Every XRP token was pre-mined before the network went online. Yes, every single token was owned by Ripple in the beginning.

But a pre-mined token is not such a bad thing if you consider that Ripple is not wasting the insane amounts of electricity that Bitcoin is using to mine new blocks for the chain (the amount of energy is estimated to be as large as the whole of Ireland’s), so Ripple is greener. But crypto-purists prefer mineable coins, so they frown upon Ripple’s policy in this regard.

That’s not the worse. Most of the existing XRP in the world is still owned by Ripple. This has lead to suspicions of price manipulation by a private firm within the cryptoverse. To assuage those concerns, Ripple has locked up most of its tokens in a 52-month old smart contract that releases 1 billion XRP every month.

The idea behind that is to ensure a constant and limited flow of coins into the market that has nothing to do with decisions taken at Ripple. And this is the issue we’ll explore in this article with more depth.

You probably already have a position of your own about each of the issues as mentioned earlier regarding Ripple, and we don’t mean to change your mind (at least not for now) but let’s concentrate in a single question: is XRP controlled by Ripple? It’s a good question. David Schwartz, who was Ripple’s Chief Cryptographer and is now Chief Technical Officer answered this question (probably for the ninth time) on last Monday.

The answer

His answer: “Absolutely not.”

Okay, there’s more. Mr. Schartz elaborated thoroughly on his initial two-word answer, so let’s follow him.

He explained how the XRP ledger is open-source. It’s backed not only by Ripple but by a whole community of developers. Consequently, if Ripple, the private company, were to vanish into thin air for whatever reason, the infrastructure necessary to keep XRP and the XRP ledger running would remain in place and would keep existing and working.

XRP is a digital asset that’s 100% independent from the company. The transactions are not validated by Ripple but by the Ripple network which is decentralized in full and relies upon a consensus process. That results in a network in which it’s the stakeholders who empower the transactions for any entity.

Once Mr. Schwartz explained that in full detail he went on to write that the perception of Ripple being in “control” over XRP is rooted in nothing but misunderstandings. So he took some extra text to explain what those misconceptions are, and why they’re actually misbeliefs rather than reality. Here are the issues he mentioned:

Utility: XRP is currently used for payments (international, frictionless payments, mainly). Payments will be around regardless of Ripple’s existence, so this can’t be an issue.

Ownership: this has been a big deal for Ripple. XRP has been accused of being a security (something equivalent to holding equity over Ripple), and SEC has not issued a decision on this yet (the jury is still, literally, out on this, at least when it comes to governmental regulations) but Ripple’s position (as explained by Mr. Schwartz) is unequivocal on this. XRP doesn’t get you any shares in Ripple. You can own as many XRP as you possibly can, and you still owe nothing of Ripple.

Decentralization: the vast majority of validators in Ripple’s network are not controlled by Ripple at all. They’re independent, voluntary nodes, that validate transactions for XRP in much the same way as Bitcoin’s nodes keep the bitcoin network going. There are 150 such nodes in the network of which only 7 belong to Ripple.

Mr. Schwartz continued his answer by mentioning that while, yes, Ripple owns quite a bit of XRP, but that doesn’t give the company control over the currency because transactions must be validated by the network which, as stated before, is beyond Ripple’s control. He also explained the 55 billion XRP placed under a smart escrow contract which makes it impossible for Ripple to either flood the market with tokens or make them scarce.

And then, he ended by reminding everybody that it’s in Ripple’s interest for XRP to do well, so chances are it’s not going to try and mess things up, even if it could (which is not the case, anyway).

Image courtesy of Flickr.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

Sharia-certified digital assets exchange Rain lists XRP on its trading platform

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The Ripple effect! Ripple’s XRP is slowly but steadily stumping its presence in the Middle East.

XRP is Sharia compliant (potentially)

Bahrain-based exchange Rain, which is Sharia compliant one, now supports XRP on their platform. Previously, the exchange was supporting Bitcoin (BTC), Litecoin (LTC), and Ethereum (ETH) as per the sharia certification.

Rain’s primary focus is becoming a fully sharia-compliant exchange and therefore, it has completed all the regulatory procedures with the Central Bank of Bahrain’s’ Regulatory Sandbox (CBB) and obtained Sharia-compliance certification from the Shariah Review Bureau (SRB). It means that the exchange works as per the Islamic rules as well as regulations for investment and trading.

The process involved SRB examining Rain’s brokerage service whereby it was satisfied that the exchange’s sales, purchase as well as custody services all comply with Sharia principles. However, the certification is currently only applicable to three cryptos that include bitcoin, Litecoin, and Ethereum.

At the moment, XRP has been listed in different pairs – XRP/SAR, XRP/BHD, XRP/KWD,  XRP/AED, XRP/OMR, and XRP/USD. SAR, BHD, KWD, AED, and OMR are local currencies of Saudi, Bahrani, Kuwaiti, United Arab Emirates, and Oman respectively.

The exchange is now in beta version until they get the full license from Bahrain’s Central Bank. Although the compliance is currently based on the three coins, it is looking to obtain the certification for XRP. Therefore, the process is as good as done.

XRP on the Right Path

Getting listed in the Middle East platform is a big boost that will undoubtedly positively impact its price more probably. Currently, alongside all the top ten cryptocurrencies, XRP trades in slightly red numbers (down by 0.55% in the last 24 hours). But that could change soon now.

As more cryptocurrency players in the Islamic states slowly enter this revolutionary market, (becoming a crypto-friendly region) XRP stands a chance of a mass adoption as well as its price rising. Nevertheless, even though they haven’t gotten the license for XRP, it’s pretty clear that XRP is now Sharia compliant.

Image courtesy of Pixabay.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.