Money Transmitter Licensing for U.S. Crypto Companies ...
Money Transmitter Licensing for U.S. Crypto Companies ...
What You Need to Know About US Bitcoin Regulations ChainBits
Bitcoin ATM Regulatory Requirements in USA Blog Coin ...
US regulator: Bitcoin exchanges must comply with money ...
Bitcoin exchanges: "Flying Under the Regulators Radar"
Live in Hawaii and need advice on how to invest in bitcoin. The DCCA in Hawaii made it difficult for residents to invest in bitcoin, since March when they regulated bitcoin exchange as a money transmitter. Coinbase and any other well named trader will no longer do business with Hawaii residents.
Live in Hawaii and need advice on how to invest in bitcoin. The DCCA in Hawaii made it difficult for residents to invest in bitcoin, since March when they regulated bitcoin exchange as a money transmitter. Coinbase and any other well named trader will no longer do business with Hawaii /r/Bitcoin
[FULL ANALYSIS] Bitcoin exchanges and payment processors in Canada are now regulated as Money Service Businesses
Hello Bitcoiners! Many of you saw my tweet yesterday about the Bitcoin regulations in Canada. As usual, some journalists decided to write articles about my tweets without asking me for the full context :P Which means there has been a lot of misunderstanding. Particuarly, these regulations mean that we can lower the KYC requirements and no longer require ID documents or bank account connections! We can also increase the daily transaction limit from $3,000 per day to $10,000 per day for unverified accounts. The main difference is that we now have a $1,000 per-transaction limit (instead of per day) and we must report suspicious transactions. It's important to read about our reporting requirements, as it is the main difference since pretty much every exchange was doing KYC anyway. Hopefully you appreciate the transparency, and I'm available for questions! Cheers, Francis ********************************************* Text below is copied from: https://medium.com/bull-bitcoin/bitcoin-exchanges-and-payment-processors-in-canada-are-now-regulated-as-money-service-businesses-1ca820575511
Bitcoin is money, regulated like money
Notice to Canadian Bitcoin users
If you are the user of a Canadian Bitcoin company, be assured that:
These regulations only target virtual currency exchanges and virtual currency transmitters (e.g. payment processors, custodial wallets).
No action on your part is currently required. It is businesses that have to comply, not users.
You may notice that the exchange service you are using has change its transactions limits or is now requiring more information from you. You can stop reading this email now without any consequence! Otherwise, keep regarding if you are interested in my unique insights into this important topic!
Background on regulation
Today marks an important chapter for Bitcoin’s history in Canada: Bitcoin is officially regulated as money (virtual currency) under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act of Canada (PCMLTFA), under the jurisdiction of the Financial Transaction and Reports Analysis Centre of Canada (FINTRAC). This is the culmination of 5 years of effort by numerous Bitcoin Canadian advocates collaborating with the Ministry of Finance, Fintrac and other Canadian government agencies. It is important to note that there is no new Bitcoin law in Canada. In June of 2014, the Governor General of Canada (representing Her Majesty Queen Elizabeth II) gave royal asset to Bill C-31, voted by parliament under Stephen Harper’s Conservative government, which included amendments to the PCMLTFA to included Bitcoin companies (named “dealers in virtual currency”) as a category of Money Service Businesses. Thereafter, FINTRAC engaged in the process of defining what exactly is meant by “dealing in virtual currency” and what particular rules would apply to the businesses in this category. Much of our work was centred around excluding things like non-custodial wallets, nodes, mining and other activities that were not related exchange or payments processing. To give an idea, the other categories that apply to traditional fiat currency businesses are:
Foreign exchange dealing
Remitting or transmitting funds
Issuing or deeming money order or similar negotiable instruments
When we say that Bitcoin is now regulated, what we mean is that these questions have been settled, officially published, and that they are now legally binding. Businesses that are deemed to be “dealing in virtual currency” must register with FINTRAC as a money service business, just like they would if they were doing traditional currency exchange or payment processing. There is no “license” required, which means that you do not need the government’s approval before you can operate a Bitcoin exchange business. However, when you operate a Money Service Business, you must register and comply with the laws… otherwise you risk jail time and large fines.
What activities are regulated as Money Service Business activity?
A virtual currency exchange transaction is defined as: “an exchange, at the request of another person or entity, of virtual currency for funds, funds for virtual currency or one virtual currency for another.” This includes, but is not limited to:
Bitcoin trading platforms (orderbooks)
Bitcoin exchange platforms (fixed-rate)
Selling or buying Bitcoin OTC professionally
Crypto-to-crypto trading (orderbook, fixed-rate or OTC)
Notice to foreign Bitcoin companies with clients in Canada
Regardless of whether or not your business is based in Canada, you must register with FINTRAC as a Foreign Money Service Business, if:
You direct your MSB services at persons or entities in Canada
The regulation of Bitcoin exchange and payment services has always been inevitable. If we want Bitcoin to be considered as money, we must accept that it will be regulated like other monies. Our stance on the regulation issue has always been that Bitcoin exchanges and payment processors should be regulated like fiat currency exchanges and payment processors, no more, no less. This is the outcome we obtained. To comply with these regulations, we are implementing a few changes to our Know-Your-Customer requirement and transaction limits which may paradoxically make your experience using Bull Bitcoin and Bylls even more private and convenient!
The bad news
We are adding per-transaction limits in addition to daily volume limits.
The per-transaction limit for accounts with limited verification is $1,000 (previously $3000). To conduct transactions over $1,000 you must get your account verified.
We require users to provide their Date of Birth as a requirement to change their verification status to “Verified”.
We require users to provide their Occupation as a requirement to change their verification status to “Verified”.
The good news
We are increasing the daily volume limit from $3,000 to $10,000 for users that have the “limited” account verification status. Users with limited account verification can do multiple transactions as long as they are each below the $1,000 threshold and as long as they don’t exhibit suspicious behavior (see details below).
Identity documents will no longer be required for users that can be identified using their credit files. They will only be required where identification using credit file lookup was inconclusive. This change will take effect later this summer.
Connecting bank accounts to Bull Bitcoin using the flinks bank verification software will no longer be required for users that can be identified using their credit files. This will only be required where identification using credit file lookup was inconclusive. This change will take effect later this summer
The user’s KYC info (name, address, date of birth and occupation)
Suspicious transaction reporting
Satoshi Portal is required to make suspicious transactions report to FINTRAC after we have detected a fact that amounts to reasonable grounds to suspect that one of your transactions is related to the commission or attempted commission of a money laundering offence or a terrorist activity financing offence. Failure by Satoshi Portal Inc. to report a suspicious transaction could lead to up to five years imprisonment, a fine of up to $2,000,000, or both, for its executives. We are not allowed to share with anyone other than FINTRAC, including our clients, the contents of a suspicious transaction report as well as the fact that a suspicious transaction report has been filed.
What is suspicious activity?
Note forbitcoinca: this section applies ONLY to Bull Bitcoin. Most exchanges have much stricter interpretation of what is suspicious. You should operate under the assumption that using Coinjoin or TOR will get you flagged at some other exchanges even though it's okay for Bull Bitcoin. That is simply because we have a more sophisticated understanding of privacy best practices. Identifying suspicious behavior is heavily dependent on the context of each transaction. We understand and take into account that for many of our customers, privacy and libertarian beliefs are of the utmost importance, and that some users may not know that the behavior they are engaging in is suspicious. When we are concerned or confused about the behaviors of our users, we endeavour to discuss it with them before jumping to conclusions. In general, here are a few tips:
Don’t provide false of misleading information. We will know right away if your date of birth, address and name don’t match.
Don’t try to exploit loopholes in the KYC process.
Don’t transact on behalf of someone else without telling us.
Be cooperative with customer support.
Here are some examples of behavior that we do not consider suspicious:
Coinjoin or other Bitcoin privacy techniques.
Using VPNs, TOR or VOIP phones.
Asking questions about, or criticizing, our privacy policies.
Talking negatively about banks or government.
Here are some example indicators of behavior that would lead us to investigate whether or not a transaction is suspicious:
Making statements about being involved with criminal activity.
Saying you don’t want the government to know about your transactions.
Asking advice about concealing source of funds or tax avoidance.
Funding your account from a bank account that is not in your name.
Conducting transactions on behalf of someone else without telling us.
Trying to falsify your identity or impersonating someone else.
Making multiple bill payments to the same recipient, or multiple Bitcoin purchases, in a way which seems structured specifically to avoid the $1,000 transaction amount KYC threshold.
Continuing to perform transactions that are unnecessarily complex, inefficient and not cost-effective after having been advised otherwise by our staff.
What does this mean for Bitcoin?
It was always standard practice for Bitcoin companies to operate under the assumption they would eventually be regulated and adopt policies and procedures as if they were already regulated. The same practices used for legal KYC were already commonplace to mitigate fraud (chargebacks). In addition, law enforcement and other government agencies in Canada were already issuing subpoenas and information requests to Bitcoin companies to obtain the information of users that were under investigation. We suspect that cash-based Bitcoin exchanges, whether Bitcoin ATMs, physical Bitcoin exchanges or Peer-to-Peer trading, will be the most affected since they will no longer be able to operate without KYC and the absence of KYC was the primary feature that allowed them to justify charging such high fees and exchange rate premiums. One thing is certain, as of today, there is no ambiguity whatsoever that Bitcoin is 100% legal and regulated in Canada!
Link to our website:https://block.co/blockchain-in-the-public-sector-webcast-qa/ Block.co fourth webcast titled "Digital Transformation of the Public Sector & The Upcoming Legislation of Blockchain Technology in Cyprus” was an immense success. We gathered some of the best experts in the field, Deputy Minister Kyriacos Kokkinos, Jeff Bandman, Steve Tendon, and Christiana Aristidou to share their experience and discuss with us the latest updates regarding Blockchain in the Public Sector. In its fourth series of webcasts, Block.co gathered 281 people watching the event from 41 different countries, for a two-hour webcast where guests answered participants’ questions. Following the impressive outcome and response we received from the audience, Block.co’s team has done its best to address all the questions for which public information is available. Below is a list of the questions that were made and were not answered due to time constraints during the webcast. For the remaining questions from our audience, the team will reach out to our distinguished guests to receive their comments and feedback. Please note, that the below information is only for informational purposes! Question 1: How can asset tracing be accomplished with bitcoins and cryptocurrency? And how can this be regulated? Block.co Team Answer: Digital Asset tracing may be accomplished with cryptocurrency intelligence solutions such as Cipher Trace and the ICE cryptocurrency intelligence program. FATF (Financial Action Task Force) embarked on a program of work from summer 2018 to June 2019 to strengthen and update the provisions dealing with virtual assets and virtual asset service providers. FATF updated Recommendations in October 2018 and Guidance in June 2019 include several new obligations that apply to VASPs. The so-called “Travel Rule” FATF announced in October 2019 agreed on the assessment criteria for how it will assess countries’ compliance with the new global standards. Under the Travel Rule, the transmitter’s financial institutions must include and send information in the transmittal order such as Information about the identity, name, address, and account number of the sender and its financial institution Information about the identity, name, address and account number of the recipient. The ”Travel Rule” is effectively being applied to cryptoasset transfers when there is a virtual asset service provider (VASP) involved. The scope of focus has broadened from “convertible” virtual assets to any virtual asset. Countries should make sure businesses can freeze crypto wallet or exchange accounts for sanctioned individuals. Question 2: Which kind of software or technical knowledge is required to develop cryptocurrency? Block.co Team Answer: It depends on the type of cryptocurrency you wish to create, as well as the preferred functionality and features, and characteristics of the token or coin (i.e. will it be pre-mined, what type of hashing or cryptographic algorithm will be used (i.e. proof of work (POW) or proof of stake (POS) or a hybrid of both), etc. Likewise, it is useful to utilize a programming language that is broadly used and supported by a vast and active development community; more data could be found here: more information could be found here: top programming languages in 2015/2016, published by IEEE here, and TIOBE. Hypothetically, you can utilize any programming language to make cryptocurrency digital money, however, the most widely recognized are C, C++, Java, Python, Perl. The beauty of cryptocurrencies is that you can literally have access to the entire Bitcoin and Ethereum open-source programming scripts, and create your alternate coin (altcoin). Question 3: Hello all, I want to know about the current status of the European Union Blockchain initiative in currency or public identity. Block.co Team Answer: Please refer to the European Services Blockchain Infrastructure (EBSI) website. Question 4: Mining is also the process of confirmation of transactions in the Bitcoin Blockchain. What is the process of confirmation of transactions in the Blockchain of an Organization? How do we call it? Block.co Team Answer: That would depend on the specific consensus algorithm used for the confirmation of transactions. The consensus algorithm is part of the blockchain protocol that defines the rules on how consensus is reached on that blockchain. In order to participate, entities on the blockchain must obey and follow the same consensus algorithm. Make sure to check our glossary for more information. Question 5: How does a small business implement blockchain into its current non-blockchain software systems? Who do they hire to install it? Block.co Team Answer: It is easy when there are APIs to connect the various software. For more information, you can check Block.co API. Question 6: What is your opinion on digitizing developing economies like India by using AI and blockchain? Block.co Team Answer: Watch a very interesting webinar on the matter by Mr. Prasanna: Question 7: Blockchain technologies have been around since 2008. What would you say has been the biggest obstacle in widespread adoption? Block.co Team Answer: In our opinion, the biggest obstacles are volatile cryptoasset prices, complicated UIs, undefined blockchain technology standards. Moreover, the legislation around the technologies is still now being developed and does not offer legal certainty for broader adoption. Question 8: Limitations to Blockchain Usability in the Public Sector? Block.co Team Answer: Blockchain in the Public Sector, like any other innovative concept with big potential, cannot be a solution to every problem. Users and developers are still figuring out technological and managerial challenges. From a technological perspective, some aspects such as platform scalability, validation methods, data standardization, and systems integration must still be addressed. From a managerial point of view, the questions include business model transformation, incentive structure, and transaction scale, and maturity. Read more here. Question 9: How can these blockchain initiatives be practical for the African context Block.co Team Answer: As long as the internet infrastructure is in place, these blockchain initiatives may have the same benefits for the African region. Question 10: What are some compelling use cases you’ve seen lately, and how do they serve to further legitimize blockchain as a solution? Block.co Team Answer: You can see the global trends from all around the world when it comes to further legitimization as a solution, with China leading the way. Read more here. Question 11: How does digital currency manage the issue of money laundering? Block.co Team Answer: Depends under which context you are looking at the term digital currency. A digital currency usually refers to a balance or a record stored in a distributed database, in an electronic computer database, within digital files or a stored-value card. Some examples of digital currencies are cryptocurrencies, virtual currencies, central bank digital currencies (CBDCs), and e-Cash. The Financial Action Task Force (FATF) is an intergovernmental body established in 1989 on the initiative of the G7 to develop policies to fight money laundering. Since 2001 FATF is also looking into terrorism financing. The objectives of FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system. FATF is a “policy-making body” that works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. FATF monitors progress in implementing its Recommendations through “peer reviews” (“mutual evaluations”) of member countries. It is the global watchdog for anti-money laundering & counter-terrorist finance. In June 2019, it updated its guidance paper for Virtual Assets Service Providers (VASPs) regarding the transfer of digital assets. There was an insertion of a new interpretive note that sets out the application of the FATF Standards to virtual asset activities and service providers. To apply FATF Recommendations, countries should consider virtual assets as “property,” “proceeds,” “funds,” “funds or other assets,” or other “corresponding value.” Countries should apply the relevant measures under the FATF Recommendations to virtual assets and virtual asset service providers (VASPs). Read more about the FATF recommendations here). https://preview.redd.it/58tt7mt1pld51.png?width=1920&format=png&auto=webp&s=d24811c4864ebf02cb9aacc8d6b877a1fbc3756b Question 12: To what extent can blockchain be used to improve the privacy of healthcare? Block.co team Answer: Please refer to our previous webcast, blog, and articles for more information. Question 13: What is Blockchain technology in Shipping? Block.co team Answer: The shipping sector has been in the hold of phony maritime institutes charging exorbitant fees via agents, issuing certificates to candidates who do not have the imperative attendance, or those candidates who just pay the fees for the course and ask for the certificate. In view of these fake accreditations, the possibility exists that someone could be harmed or killed, and we could face any number of potential ecological disasters. Having the option to easily verify the genuine origin of a certificate by an approved maritime center is foremost for shipping companies to fast-track their operation and streamline their labor. Question 14: Different uses of blockchain other than cryptocurrency? Block.co team Answer: Please refer to our blog and glossary. Question 15: Upcoming trends in Blockchain concerning Advertising, Marketing, and Public Relations in the Public and Private sectors. Block.co Team Answer: Regarding the application of blockchain technology to media copyrights, please see Block.co use case proposal during the Bloomen Ideathon. https://preview.redd.it/48zc8j38pld51.png?width=3622&format=png&auto=webp&s=79987d1dc7eb8d0c8e32dbce8680b17801d0d244 Question 16: How to create a decentralized blockchain? Block.co Team Answer: An excessive number of individuals feel that blockchain is some supernatural innovation that makes up a decentralized system. In truth, this innovation only enables decentralization. Which means, it permits cryptocurrency to work in a decentralized way. Yet, it doesn’t give any guarantees that it will work that way. Along these lines, it’s really, some outer variables that decide genuine decentralization. Technology, itself never really guarantees it. That is the reason it’s a mistake to expect that if it’s a blockchain — it’s decentralized. From a technical perspective, both blockchains, centralized, and decentralized are comparative, as they take work on distributed peer to peer to network. This implies every node is individually responsible to verify and store the shared ledger. Both Blockchains utilize either a proof-of-work or proof-of-stake mechanisms to make a solitary record and they have to give upper and lower limits on the security and productivity of the system. For more information please refer to our infographic. Question 17: Dubai government Blockchain implementation progress? Block.co Team Answer: You can see more information here. Question 18: How Blockchain and IoT can be integrated to secure data being transmitted through IoT devices. Block.co Team Answer: You can read more about it here. Question 19: How can the Nigerian government use Blockchain to effectively implement its existing launched eGovernment master plan? Block.co Team Answer: Perhaps it can draw its attention to the initiatives of Dubai, Estonia, and Malta to prepare an implementation framework. Question 20: What impact is blockchain going to have in today world of business especially in the financial sector Block.co Team Answer: Please refer to our recent article titled Benefits of Blockchain Technology in the Banking Industry. Question 21: Is Blockchain Technology affect individuals? Block.co Team Answer: The social effect of blockchain innovation has just started to be acknowledged and this may simply be a hint of something larger. Cryptocurrencies have raised questions over financial services through digital wallets, and while considering that there are in excess of 3,5 billion individuals on the planet today without access to banking, such a move is surely impactful. Maybe the move for cryptocurrencies will be simpler for developing nations than the process of fiat cash and credit cards. It is like the transformation that developing nations had with mobile phones. It was simpler to acquire mass amounts of mobile phones than to supply another infrastructure for landlines telephones. In addition to giving the underprivileged access to banking services, greater transparency could also raise the profile and effectiveness of charities working in developing countries that fall under corrupt or manipulative governments. An expanded degree of trust in where the cash goes and whose advantages would without a doubt lead to expanded commitments and backing for the poor in parts of the world that are in urgent need of help. Blockchain technology is well placed to remove the possibility of vote-apparatus and the entirety of different negatives related to the current democratic procedure. Obviously, with new innovation, there are new obstacles and issues that will arise, yet the cycle goes on and those new issues will be comprehended with progressively modern arrangements. A decentralized record would give the entirety of the fundamental information to precisely record votes on an anonymous basis, and check the exactness and whether there had been any manipulation of the voting procedure. Question 22: As Andreas Antonopoulos often says in his MOOC: ”is a blockchain even needed?” Ie. Are there better methods? Block.co Team Answer: In combination with nascent technologies, IoT, distributed computing, and distributed ledger technologies, governments can provide inventive services and answers for the citizens and local municipalities. Blockchain can provide the component to create a safe framework to deal with these functions. In particular, it can provide a safe interoperable infrastructure that permits all smart city services and capacities to work past presently imagined levels. On the off chance that there were better techniques, they would be researched. Question 23: Would any of this be also applicable to the educational sector (as part of the general public sector), and if so in which way? Block.co Team Answer: Yes, please refer to our Webcast on Education and our blog post. Question 24: Will we be able to get a hold of this recording upon completion of the meeting? Block.co Team Answer: Yes, here is a link to the recording of our webcast Blockchain in the Public Sector. Question 25: Was wondering if there are any existing universal framework in governing the blockchain technology? Block.co Team Answer: The short answer is NO, as this framework is currently being prepared in collaboration with the various Member States. We would like to thank everyone for attending our webcast and hoping to interact with you in future webinars. If you would like to watch the webinar again, then click here! For more info, contactBlock.codirectly or email at [[email protected]](mailto:[email protected]). Tel +357 70007828 Get the latest from Block.co, like and follow us on social media: ✔️Facebook ✔️LinkedIn ✔️Twitter ✔️YouTube ✔️Medium ✔️Instagram ✔️Telegram ✔️Reddit ✔️GitHub
Yes LN node are NOT Banks but I let's have a discussion about them
I originally submitted this as a comment to the LN nodes are NOT banks or like banks. Please stop spreading this nonsense. thread, but I believe this warrants its own thread... Been doing a lot of reading recently about LN, while it is true that LN hubs are not banks, one thing that is not yet sure is wether you would need a "money transmitter license" to run a LN hub (FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies) Here are a couple articles I found helpful:
I know the titles are pretty strong worded, but I believe the articles in themselves raise good questions and have strong sources & documentation. Since we are on the topic of the LN, what do you guys think about the fact that you still need a minimum of two transactions to establish and close your LN channels, one good point I found in one of those of articles (can't remember which one) was that this would mean that you need to anticipate how much money you will spend in a channel, making LN not a good solution for say buying your money on the go from some random coffee shop, now, a counter point you might raise is that: "that's fine, you don't need a direct channel to this random coffee shop, as long as you have an indirect LN channel to the coffee shop it is still possible to establish the LN transaction", which is true, but then again this would mean that all intermediary LN nodes would need to have enough funds, and wouldn't charge you much for your using them (otherwise this would render the whole transaction more expensive than say using VISA/Credit or just the base network), one other problem is that this would result in the rise of central hubs which would have dense connectivity and lower charge, in this case we are back to a centralized system.... Anyhow I've been doing quite the reading lately, and I'm really interested in knowing what you guys think about all this...
I'm trying to put together a list of what's coming out this year. Have this very simple list so far. Anyone care to add anything or suggest some better dates?
Latest News (most recent first) - Instant channels enable safe Lightning payments with unconfirmed funding Beta - Feb 10, 2019 - Voyager, New trading app from Uber & E-Trade execs announce launch date - Feb 9, 2019 - bumi/blockstream_satellite ruby gem for the Blockstream Satellite API - Feb 8, 2019 - New Zap Desktop 0.3.4 is out. New features, massive performance - Feb 8, 2019 - New release: @lightning desktop app v0.4.0-alpha - Feb 8, 2019 - valerio-vaccaro/Liquid-dashboard - Feb 7, 2019 - Japanese SBI Holdings will allow trading of coins - March 2019 - lnd v0.5.2-beta released - Feb 6, 2019 - Koala studios launches online LN gaming platform - Feb 6, 2019 - Independent Reserve has become the first #crypto exchange in Australia to be insured, with coverage underwritten by Lloyd's of London. - Feb 6, 2019 - Coinbase announces BTC support for their mobile (keep your own keys) wallet - Feb 6, 2019 - Blockstream published a new open source Proof of Reserves tool. - Feb 5, 2019 - RTL release v0.1.14-alpha - Feb 5, 2019 - dr-orlovsky/typhon-spec spec for new trestles side chain published - Feb 5, 2019 - Payment requests coming soon to BTCPay. - Feb 5th, 2019 - Kraken Acquires Futures Startup In Deal Worth At Least $100 Million - Feb 5th, 2019 - Next Blockchain cruise scheduled for June 9-13 - Feb 4, 2019 - Work on a GoTenna plugin to Electrum wallet in progress - Feb 4, 2019 - Bitcoin Candy Dispensers being open sourced - Feb 4, 2019 - New release of JoinMarket v0.5.3 - Feb 4, 2019 - Prime Trust won’t charge its clients to custody digital assets any longer. - Feb 4, 2019 - nodogsplash/nodogsplash wifi access using LN - Feb 3, 2019 - @tippin_me Receive tips using Lightning Network adds message feature - Feb 3, 2019 - Bitcoin-for-Taxes Bill in NH Unanimously Approved by House Subcommittee - Feb 3, 2019 - Full support for native segwit merged into bitcoinj - Feb 3, 2019 - Bitfury is partnering with financial services firm Final Frontier! - Feb 2, 2019 - Now you can open #LightningNetwork channels in @LightningJoule - Feb 2, 2019 - Integrating Blockstream’s Liquid payments on SideShift AI - Feb 1, 2019 - Wyoming legislature passes bill to recognize cryptocurrency as money - Feb 1, 2019 - Casa is open sourcing the code for the Casa Node - Feb 1, 2019 - Casa Browser Extension released - v0.5.2-beta-rc6 of lnd, full release getting very close now - Feb 1, 2019 - Tallycoin adds subscriptions and paywall features in bid to rival Patreon - Jan 31, 2019 - Static channel backup PR merged into LN - Jan 31, 2019 - The NYDFS grants another Bitlicense to ATM operator - Jan 31, 2019 - @pwuille currently proposing the “MiniScript” language to describe BTC output locking conditions for practical composition - Jan 31, 2019 - Fidelity is in the “final testing” phase for its new digital asset business - Jan 31, 2019 - Hardware wallet PR #109 just got merged so that @Trezor no longer requires user interaction for PIN - Jan 31, 2019 - CBOE, VanEck & SolidX filed a new & improved bitcoin ETF proposal. - Jan 31, 2019 - Casa Node code is now open sourced - Jan 31, 2019 - Next Bitoin halving in roughly 497 days - Jan 31, 2019 - BTCPay released 220.127.116.11 - Jan 31, 2019 - @binance now lets users purchase cryptos using Visa and Mastercard credit. - Jan 31, 2019 - Bitfury to Launch Bitcoin Operations in Paraguay - Jan 31, 2019 - Coinbase introduces very generous affiliate program - Jan 30, 2019 - DOJO Trusted Node bitcoin full node. Coming Early 2019 - Jan 30, 2019 - FastBitcoins.com Enables Cash-for-Bitcoin Exchange Via the Lightning Network - Jan 30, 2019 - TD Ameritrade says clients want cryptocurrency investment options - company plans major announcement in 'first half of 2019' - Jan 30, 2019 - Storage component of Fidelity's @DigitalAssets live, with some assets under management, @nikhileshde - Jan 29, 2019 - lightning mainnet has reached 600 BTC capacity - Jan 29, 2019 - Drivechain shows picture of Grin side chain and suggests might be ready in 2 month - Jan 29, 2019 - Lightning labs iOS neutrino wallet in testing stage now - Jan 29, 2019 - Aliant offering cryptocurrency processing free-of-charge - Jan 29, 2019 - Chainstone’s Regulator product to manage assets on the way - Jan 29, 2019 - Fidelity Investments’ new crypto custody service may officially launch in March. - Jan 29, 2019 - Gemini's becomes FIRST crypto EXCHANGE and CUSTODIAN to complete a SOC 2 Review by Deloitte - Jan 29, 2019 - Iran has lifted the ban on Bitcoin and cryptocurrency - Jan 29, 2019 - Confidential Transactions being added into Litecoin announcement - Jan 28, 2019 - http://FastBitcoins.com Enables Cash-for-Bitcoin Exchange Via the Lightning Network - Jan 28, 2019 - Germany’s largest online food delivery platform now accepts btc - Jan 27, 2019 - Launching a Bitcoin Developers School in Switzerland - Jan 27, 2019 - RTL release v0.1.13-alpha Lightning Build repository released - Jan 27, 2019 - The first pay-per-page fantasy novel available to Lightning Network. - Jan 27, 2019 - Numerous tools become available to write messages transmitted with Blockstream Satellite - Jan 26, 2019; - BTCPay 18.104.22.168 released - Jan 26,2019 - WordPress + WooCommerce + BTCPay Plugin is now live - Jan 25, 2019 - Juan Guaido has been promoting #Bitcoin since 2014 is new interim president of Venezuela - Jan 25, 2019 - Morgan Creek funds @RealBlocks - Jan 25, 2019 - Coinbase integrates TurboTax - Jan 25, 2019 - Robinhood received Bitlicense - Jan 25, 2019 - Anchor Labs launches custody - Jan 25, 2019 - NYSE Arca files w/ @BitwiseInvest for BTC ETF approval - Jan 25, 2019 - South Korea, Seoul, Busan & Jeju Island currently working to create pro crypto economic zones. - Jan 25, 2019 - valerio-vaccaro/Liquid-dashboard - Jan 25, 2019 - Bermuda to launch crypto friendly bank - Jan 25, 2019 - Mobile Bitcoin Wallet BRD Raises $15 Million, Plans for Expansion in Asia - Jan 25, 2019 - BullBitcoin rolling out alpha access of platform - Jan 25, 2019 - Electrum Wallet Release 3.3.3 - Jan 25, 2019 - Bitrefill, purchase Bitcoin and have it delivered directly over LN - Jan 25, 2019 - South Korean crypto exchange Bithumb looking to go public in USA - Jan 24, 2019 - Bitcoin Exchanges Don’t Need Money Transmitter Licenses in Pennsylvania - Jan 24, 2019 - US; New Hampshire Bill Aims to Legalize Bitcoin for State Payments in 2020 - Jan 24, 2019 - Robinhood, LibertyX Receive Licenses from New York Regulators - Jan 24, 2019 - Bakkt Bitcoin futures contract details released - Jan 24, 2019 - Blockstream CryptoFeed V3 now includes 30+ venues and 200M+ updates per day - Jan 24, 2019 - Binance Jersey – The Latest Binance European Exchange - Jan 2019
Bitfury Rolls Out Lightning Peach, Its Own Suite of Lightning Tools - Jan 24, 2019
Good news. v3.6.2 just hit the play store for Android. - Jan 24, 2019
Bitrefill - LN now accounts for more payments than alts - Jan 24, 2019
proofd.app allows you to store a checksum of a doc on the blockchain - Jan 24, 2019
487 days until bitcoin halving - Jan 23, 2019
New #GalaxyS10 coming with ‘Samsung Blockchain KeyStore’- Jan 24, 2019
Proof-of-Reserves tool for Bitcoin github.com/stevenroose/reserves - Jan 24, 2019
Lightning Network Pac-Man Arcade introduced - Jan 23, 2019
The ticking time bomb of crypto exchanges and compliance
I believe the next "black swan" event for bitcoin is when the US comes down hard on almost all the exchanges out there which are brazenly flouting the regulations. Some common fallacies: Fallacy 1: Exchange is based in [some remote country], so they don't have to worry about US laws. Fact 1. Most people don't realise, it's not sufficient to be based outside of the US to be free of their jurisdiction. If an exchange is serving US citizens they must comply with the regulations, regardless of which country their exchange is based in. Fallacy 2: Exchange XYZ doesn't accept fiat and it's crypto to crypto only. Therefore it doesn't need a money transmission license. Fact 2. Fincen has issued multiple statements very clearly stating that a business which exchanges a virtual currency in exchange for another virtual currency is a money transmitter and thus requires a money transmission licence. Similarly for fiat to crypto. Some sources: (http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.htmlhttp://globalcryptonews.com/fincen-ruling-on-cryptocurrency-exchanges-explained-part-1-definition-of-money-transmitter-and-msb/). Here fincen publishes a redacted letter to a crypto exchange telling them they are a money transmitter: http://www.fincen.gov/news_room/rp/rulings/pdf/FIN-2014-R011.pdf Fallacy 3: Exchange XYZ is a money service business and is therefore compliant Fact 3. It's actually a piece of piss to get registered as a money service business and I wish people wouldn't look at it as a symbol of authenticity. If the exchange doesn't have the money transmission licenses and is serving customers in most states of america it's only a matter of time until they get a knock on the door. Fallacy 4: Most other exchanges aren't compliant so we have safety in numbers. Fact 4. That is not a robust legal defense. Exchanges which aren't compliant and therefore are NOT safe places to leave your money at:
Poloniex (particularly high risk since they are based in the US and don't have the licenses)
Bittrex (particularly high risk since they are based in the US and don't have the licenses)
Btc-e (based in a country which may not comply with the US authorities, but still)
And probably almost all of the others! I've listed the above as they are exchanges which qualify as money transmitters and are operating without the correct licenses. An exchange I am fairly certain has no licenses is:
If someone can prove me wrong, let me know. Exchanges that are doing things by the book:
tldr: Use Coinbase or Kraken if you don't want to run the risk of an exchanges funds being seized.
The Bitcoin Lightning Network is intended to work like a digital Hawala network; have we solved the regulation problem?
Reference: https://en.wikipedia.org/wiki/Hawala The idea is that once channels have been set up between entities in the network, value can be moved through these channels from one node to another. This allows two individuals to use the network to route payments. While I have no problem with that in the slightest, I have not seen a discussion about how businesses can participate given the regulations around Money Service Businesses and Money Transmission Businesses. After all, each node along the route must be willing to transfer value from one party to another. Hawala networks were banned in many places for this reason, though like Bitcoin they are distributed and autonomous, so effectiveness of such bans is pretty hard to determine. The Lightning Network though must recruit a wide range of participants to work as a decentralized autonomous agent for Bitcoin transactions. I am a big fan of lightning networks. But I can't be the only one that is a little worried about the potential for a regulation problem. Hopefully there is an easy answer. EDIT 1 Reference to FinCEN rule in the US
31 CFR § 1010.100(ff)(5)(i)(A) states: (5) Money transmitter— (i) In general. (A) A person that provides money transmission services. The term “money transmission services” means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means. “Any means” includes, but is not limited to, through a financial agency or institution; a Federal Reserve Bank or other facility of one or more Federal Reserve Banks, the Board of Governors of the Federal Reserve System, or both; an electronic funds transfer network; or an informal value transfer system; or (B) Any other person engaged in the transfer of funds.
Regulated Exchange Launches in US With Crypto-Backed Visa Card Offering
A FinCEN-registered crypto exchange has launched with its own debit card that allows holders to pay for goods and services with digital assets. Utah-based CoinZoom announced Wednesday it would begin onboarding new institutional and retail clients, and will offer a Visa payment card that instantly converts cryptocurrencies into U.S. dollars. As a registered money service business with FinCEN in most U.S. states and territories, CoinZoom has to comply with local regulations, including those concerning consumer protection and know-your-customer (KYC) requirements. The exchange is also licensed as a money transmitter in the U.S., as well as a digital currency exchange in Australia. CoinZoom supports most prominent cryptocurrencies, such as bitcoin (BC) or ether (ETH), in pairs with the U.S. dollar, providing a fiat gateway into the asset class. The platform also includes a staking facility for selected proof-of-stake (PoS) coins, which provide rewards for holders. The exchange, which already has a trading app available for Apple iOS devices, can also be used as a remittance solution, according to CoinZoom founder and CEO Todd Crosland. “CoinZoom is not only the first U.S. cryptocurrency exchange to provide a Visa card to its customers, but also offers ... industry-first features like ZoomMe, CoinZoom’s free Peer-to-Peer crypto and fiat payment system," he said Last year, U.S.-based cryptocurrency exchange Coinbase, which is also a registered MSB with FinCEN, released its own Visa-backed debit card, but only for users based in the U.K. and European Union. The exchange announced Tuesday it had newly integrated the Coinbase Card with mobile payment provider Google Pay.
Playing with fire with FinCen and SEC, Binance may face a hefty penalty again after already losing 50 percent of its trading business
I just posted this post on the ULC Bitlicense and it got downvoted so quickly. You guys make me laugh. Either you work for a company that profit from the bitlicense or something else. If it is something else, let me know because I am curious.
I make zero apology that I have something against the exchanges that benefit from the Bitlicense but I am curious how it is that people think we going to make Bitcoin and Crypto free if we don't fight back? I am asking because I am trying to understand the logic of this reddit. What makes a real story interesting. We are in a war against the clueless regulator but at the same time, redditors do not seems to care. These are the law they use to do this: http://time.com/5161663/bitcoin-sting-jason-klein-crypto-irs-money-transmitte
US Congressman Tom Emmer announced late Friday that he will introduce a trio of cryptocurrency and blockchain related bills as cryptocurrencies fell lower this weekend after posting significant gains last week
A research report authored by Weiss Ratings, a provider of market research on stocks, ETFs, mutual funds, and cryptocurrencies, makes a bold prediction saying Bitcoin will lose half of its market share to Ethereum within five years. The research report cites that Bitcoin is a, “one trick pony” while Ethereum’s superior blockchain does not limit the cryptocurrency in any sense. After receiving some negative feedback from investors, Weiss Ratings clarified via tweet that they see an, “Ethereum-like platform dominating the market – not necessarily Ethereum itself.”
According to a report by Bloomberg, Brazil’s largest independent broker, Grupo XP, is launching a cryptocurrency exchange in the coming months. Grupo XP announced this move as Brazil may be on the brink of eased cryptocurrency regulations after Brazil’s regulatory agency announced last week it is investigating the country’s largest banks for allegedly halted the service to cryptocurrency related firms. Approximately 3 million Brazilians own cryptocurrencies while just 600,000 have holdings in stocks.
After Bitcoin developers reported of a patch in Bitcoin Core to fix a bug that could bring down a large chunk of the network, an official Common Vulnerabilities and Exposures (CVE) report revealed that the bug was more serious than initially let on. According to the CVE report, an attacker could have exploited the bug to create new Bitcoin, thereby inflating the 21-million coin supply and devaluing current Bitcoins. Over half of Bitcoin miners have updated to the new software patch meaning users can no longer exploit this bug.
Cryptocurrencies and their blockchains have observed more “down-time” in 2018 than ever before. After Steemit, a blockchain-based blogging platform that pays content creator in cryptocurrencies, went down for multiple hours on September 17th, Coindesk released an article discussing the increased down-time cryptocurrencies and their blockchains have observed in 2018. Coindesk’s article details that new and innovative consensus protocols, such as varied versions of Proof of Stake, have contributed to causing increased blockchain downtimes due to experimental protocols and unforeseen issues with these experimental protocols.
Dubai’s Department of Finance (DoF) announced yesterday that it has partnered with the Smart Dubai Office (SDO) to launch a blockchain-powered government payment system. Reported by local news outlet, Zawya, the platform, dubbed, Payment Reconciliation and Settlement, launched yesterday and enables government entities to conduct real-time payments between each other and within government structures while providing more transparency.
Erik Voorhees, CEO of cryptocurrency exchange ShapeShift, said that the exchange’s decision to begin collecting IDs from users was proactive and a necessary step to reduce legal risks. The decision came as Shapeshift was facing warnings from regulators to begin adhering to Know-Your-Customer regulations.
Ethereum developers and miners have come together to stop specialized mining hardware from operating on its network. After a new application-specific integrated circuit (ASIC) was announced last Thursday, developers and mines have become vocal about ASICs effectively pushing out smaller miners from being able to operate. Members of the Ethereum community have called on developers to implement measures against ASIC mining in the Ethereum blockchain, as many believe ASICs can dominate a mining community and force decisions upon a coin.
Iceland’s cryptocurrency industry may be moving away from a mining focus and moving towards a pure blockchain focus. Halldor Jorgenson, chairman of Borealis Data Center in Reykjavik, told news outlet Red Herring that demand from local cryptocurrency firms is shifting more towards pure blockchain. Iceland has become a popular area for mining due to its cold climate and cheap electricity, however, Icelandic industry experts have cited that a blockchain focus is better for the long-term future.
In relation to the probe against Amit Bhardwaj and his alleged Bitcoin Ponzi fraud, Indian police authorities have seized USD$60 million of assets associated with the scheme. The Ponzi scheme was responsible for stealing roughly USD$5.26 billion from over 8,000 people.
Opera is launching a special edition of its Labs desktop browser today that will feature a functional built-in crypto wallet. Announced in early August, the special edition of Labs opened today for private beta testers. According to a blog-post shared with Cointelegraph, Labs will enable users to authenticate Web 3.0 and dApp transactions made on their computer using their Android phone.
Tom Emmer, a member of US Congress, is sponsoring a trio of blockchain-focused bills that aims to support the development and use of blockchain technology and cryptocurrencies. The first of the three bills addresses regulatory frameworks around cryptocurrencies and blockchain. The second bill ensures cryptocurrency miners would not be required to register as money transmitters. The third bill would protect tax payers in reporting revenue from tokens that resulted from a hardfork. Emmer’s announcement of these three bills came Friday, the same day he was named a co-chair of the Congressional Blockchain Caucus.
[Manipulation] Notes on the transparency of Tether and Bitcoin market manipulation
I would like to share some alarming signs of Bitcoin price manipulation. Bitcoin price is about 10 times of what it was a year ago. The exchange that decisively sets Bitcoin price is Bitfinex, a secretive institution with unknown beneficiary structure and place of organization. https://pbs.twimg.com/media/Cs0oGXQWAAAqMRZ.jpg Bitfinex had its wire services suspended by Wells Fargo in April. To resume trading, Bitfinex enlisted the help of Tether, another company with unknown beneficiary structure and place of organisation, but based on announcements is likely under common share holder control with Bitfinex. Tether sells crypto-tokens known as USD Tethers, or USDTs, that are purportedly backed by an equal number of US dollars. In other words, each USDT is a digital good priced at USD 1.00. Despite the promise of "100% reserve" and the vague reference to "24×7 access to your funds" on Tether’s website, there is no contractual right, either tacit or express, for one USDT to be redeemed for one US dollar. It is probably through this legal construct that Tether hopes to characterise its USDTs as digital goods and not "convertible" virtual currency covered by FinCEN regulations. The invention of USDTs led to the proliferation of numerous crypto-currency exchanges. Examples include Bitfinex, Binance, HitBTC, KKex, Poloniex, and YoBit. Instead of providing crypto-to-fiat trading pairs, these "coin-to-coin" exchanges offer crypto-to-tether trading exclusively. Therefore, USDTs not only help these exchanges remove the need for formal banking arrangement, but also enables these exchanges to organise in lesser known jurisdictions (e.g., the Republic of Seychelles) and operate outside of the regulation and supervision of major economies. Most of these exchanges claim to screen-off visitors from the United States and other countries with laws on coin-to-coin trading, but the screen-off is often perfunctory. In almost all cases, the screen can be defeated with a simple mouse click. It is doubtful that these exchanges perform meaningful due diligence beyond identity verification to combat money laundering, financing of terrorism, and corruption of politically exposes persons. Bitfinex, for example, requires no identity verification at all for most trading activities and imposes no trading amount limits on unverified accounts. The enablement of these exchanges where rampant money laundering is possible is outside of the scope of this note. Instead, I would like to bring to your attention the distinct possibility that Bitfinex, as the likely controller of Tether, is a bad actor. Strong circumstantial evidence suggests that Bitfinex is creating USDTs out of thin air to prop up Bitcoin prices. Namely, Bitfinex is likely acting as a central bank that issues a fiat money called USDTs. The sole mandate of this central bank is to enrich itself through market manipulation. https://i.imgur.com/b1Pdsq9.jpg The first image (above) illustrates how mysterious amounts of USDTs were minted and injected into Bitfinex at precise moments when a crash seemed imminent. https://i.imgur.com/jAyPlF8.jpg The second image (above) illustrates a strong correlation (but admittedly not causation) between the total amount of USDTs in circulation and Bitcoin price. Bitfinex released an internal memo in September to allay concerns that USDTs might have been created at will. The memo purportedly shows that Tether maintained sufficient US dollars to match all USDTs in circulation as of a day in September. The memo, however, is of no probative value. Among other strange things, the author of the memo didn’t verify with banks (names redacted) that account balances from Tethers were in fact correct, couldn’t promise that the balances weren’t overnight borrowings for purposes of producing the memo, and couldn’t promise that Tether indeed had access to those funds. I therefore urge you to consider the possibility that the current price of Bitcoin is the result of Bitfinex’s manipulation and may collapse when regulators take action. For example, Tether is almost certainly an administrator of virtual currency — it centrally puts into and withdraws from circulation USDTs, a virtual currency squarely intended as a substitute for real currency as admitted by Tether in the internal memo. Tether has nominally registered as a money transmitter with FinCEN, but it is unclear if they fulfill any of the BSA filing requirements (e.g., filing SARs).2 As a company, Tether’s USDTs enables large crypto-currency exchanges (including US-based exchanges like Poloniex) to exist and powers trades thereon in the amount of millions every day. So it wouldn’t be surprising if FinCEN eventually decides to enforce its rules against Tether as it did against Liberty Reserve. Further, CFTC approved recently various swap execution facilities, designated contract markets and derivative clearing organizations with Bitcoin flavor. And the Chicago Mercantile Exchange is expected to launch cash-settled futures on Bitcoin soon. Manipulation of Bitcoin prices referenced by these entities is prosecutable by the CFTC, an agency with broad statutory authority to prosecute manipulation of commodity prices under the Commodity Exchange Act (including Section 753 as amended by the Dodd-Frank Act.). Although none of these CFTC-registered entities are currently including Bitfinex in the calculation of their Bitcoin reference rates (CME used to), it is well understood and could be easily established (partially because of the transparency of Bitcoin blockchain) that Bitfinex-initiated price movements ripple through all exchanges via manual and automated trading.3 CFTC could then have grounds to investigate Bitfinex’s possible manipulation of Bitcoin price via Tether. If you are considering investing into Bitcoin at this time, please look closer at the exchanges involved in price discovery and give it a second thought.
Crypto and Security Token Exchange INX to Raise $130 Million in Landmark IPO
https://preview.redd.it/w5xr4bzkvph31.png?width=700&format=png&auto=webp&s=e7275c55edd08eb682994fe588f1abd8c371fd0f News by Coindesk: Marc Hochstein INX Limited, a crypto exchange startup, plans to raise up to $129.5 million through an IPO, in the first security token sale registered with the U.S. Securities and Exchange Commission (SEC). No, that’s not a typo for “ICO,” the initial coin offerings that tested the limits of securities law during the go-go days of 2017. IPO means IPO here: INX, which is domiciled in Gibraltar, filed a draft F-1 (the SEC’s prospectus form for foreign issuers) with the agency on Monday and will market the tokens to retail and institutional investors through the initial public offering. As such, it’s a major milestone since to date, token sales have been unregistered. Some issuers confined their marketing to wealthy investors so they’d be exempt from the registration requirement and filed notices with the SEC. Most didn’t even bother to tell the regulators what they were up to, and over the last year, the agency has brought a slew of cases against ICO teams for illegally selling unregistered securities. Further, INX’s sale would also be one of the very few full-fledged IPOs in the blockchain industry and almost certainly the largest. Last year, mining subscription company Argo Mining raised $32.5 million through an IPO on the London Stock Exchange.
The target audience is largely institutional investors, even though like the INX token itself, crypto trading on the exchange will be available to the general public, provided they go through anti-money-laundering and know-your-customer screening. “When fully operational, we expect to offer professional traders and institutional investors trading platforms with established practices common in other regulated financial services markets, such as customary trading, clearing, and settlement procedures, regulatory compliance, capital and liquidity reserves and operational transparency,” says the draft prospectus. In this way, INX will be competing with a number of institutionally-focused, regulated trading platforms launching this year — although INX stands out in the breadth of digital assets it plans to list. “Our vision is to establish two trading platforms and a security token that provide regulatory clarity to the blockchain asset industry. We plan to achieve this [in part] by differentiating between security and non-security blockchain asset classes and providing trading opportunities for each class,” says the prospectus, later adding:
“In the future, we intend to establish a platform for the trading of derivatives such as futures, options and swaps.”
This means the exchange will be in the same space as not only Overstock’s tZERO (security tokens) but also Coinbase Prime and Fidelity Digital Assets (spot cryptocurrencies) — and eventually Intercontinental Exchange’s Bakkt (derivatives).
Although it is a security, INX’s token could also be described as a utility token, since holders will have the option of using it on the INX Exchange to pay transaction fees. This is perhaps ironic since, during the ICO boom, many issuers argued that their tokens were not securities because they had a utility, such as the right to use a platform developed with proceeds from the sale. At the same time, token investors will get a share of INX’s profits, though they won’t be equity holders. Rather, they will stand in line ahead of shareholders to get repaid, in the event of a liquidation. In this way, the token is akin to preferred stock. “It is the Company’s intention that the INX Token holders’ claim for breach of contract will be senior to the rights of the holders of the ordinary shares of the Company in liquidation,” the document says. The securities will be represented as ERC-20 tokens on the ethereum blockchain.
Since crypto assets are such a new and unprecedented phenomenon that does not map easily to old categories, several different regulatory agencies have claimed jurisdiction over different parts of the industry. For INX, this has meant getting sign-off from multiple agencies. Before it can proceed with the token sale, INX still has to get the SEC to deem its prospectus “effective.” The prospectus includes disclosures that are standard for publicly listed companies, but rare if not unheard-of in the shadowy world of crypto, such as the executives’ employment contracts. That’s just for the fundraising. For the exchange to actually open for trading, several other approvals still must be obtained. Since INX will be listing security tokens, it will have to first become a broker-dealer, which requires a separate registration with the SEC and acceptance into FINRA, a self-regulatory organization (SRO), and an alternative trading system (ATS), which requires filing additional forms with the SEC. On top of securities-related approvals, to operate as a crypto exchange where investors can buy and sell bitcoin and the like, INX will need money transmitter licenses from the individual states where it does business. Wall Street image via Shutterstock
Binance Cuts Ties With Its US Customers, Does CZ Fear Being Arrested?
Towards the end of last week, Binance, a leading cryptocurrency exchange in the world, announced that it would be blocking its US users. The move was manifested by a change in the exchange’s terms of service. The change picked 28 other countries that its users will not be able to access Binance.com. Among countries restricted from using Binance.com include those that have economic sanctions. Prohibition of Use Clause As per the ‘Prohibition of use’ clause on the updated terms of service, Binance notes: “By accessing and using the Services, you represent and warrant that you are not on any trade or economic lists such as the UN Security Council Sanctions list, … or placed on the US Commerce Department’s ‘Denied Persons List.’ Binance is unable to provide services to any US persons. Binance maintains to select its markets and jurisdictions to operate and may restrict or deny the Services in certain countries at its discretion.” It’s a shock that the exchange is closing its doors for users in the United States, considering that approximately 20 percent of its users originate from the US. For example, in the past six months, more than 40 million users from the United States visited Binance.com. The US was followed by India, Japan, Germany, and Turkey. There’s a Way Around the Restriction, But not for Everyone While the news are likely to dampen the crypto mood in the US market, US residents may still have a way to bypass the blockage; by using a virtual private network (VPN). Unfortunately, only those that are not verified can successfully use a VPN. However, Binance users who are not verified can only withdraw a maximum of 2 Bitcoins. Changpeng Zhao (CZ), Binance’s CEO, had earlier anticipated the restrictions. But, the CEO expressed optimism saying that “some short terms pains may be necessary for long term goals.” From Centralized to Decentralized, the SEC Gets Involved With the exchange shifting from being centralized to decentralized, the United States Securities and Exchange Commission (SEC) must be involved. To prevent being caught in a regulatory standoff with the SEC, Binance announced that they would geo-fence their decentralized exchange to wade off users from the US among other countries such as Central Africa Republic, Cuba, Ukraine, Libya, Liberia, Venezuela, Zimbabwe, Iraq, Iran, Lebanon, among others. After Coburn, CZ May Be Next CZ possibly fears being arrested following what happened to Zachary Coburn. Coburn, the CEO of EtherDelta, a decentralized crypto platform, was charged by the US Securities and Exchange Commission for running an unregistered crypto platform. As per the SEC, EtherDelta has handled over 3.6 million orders which included tokens that the SEC classifies as securities. A Twitter user, veltre_nick, while contributing to the news regarding Coburn’s predicaments, noted: “These are just the SEC charges. The money laundering charges for being an unlicensed money transmitter come next. Then there will be more. And every DEX. DEX’s are money laundering machines.” If the SEC holds the same views as veltre_nick, then CZ may have just avoided being charged or even an arrest. Luckily, another Twitter user has a solution, “DEX makers tip: don’t start in the USA.”
Why are bitcoin exchanges Money Services Businesses?
I'm not trying to be a smartass here -- I'm curious to know what the actual line is between an MSB and any other business. IRS guidance says that bitcoin is property for tax purposes. MSB guidelines seem vague. What's the line? Why would, say, a tire salesman not have to register as an MSB, even though his business buys and sells property for money? If a bitcoin exchange had smaller volume, or didn't offer users a wallet, could that impact their MSB status?
In addition to nuclear weapons, there are still things in the world, stepping over the edge of which we may find ourselves in a post-apocalypse, and many of them are quite hidden Money is a carrier of energy. They have the same properties as the photon of light. In the modern world, due to the dense environment in which paper money moves, the speed of their distribution is regulated by oligopolies, large capital managers who slide through inflation and interest. Excessive control and greed led to the emergence of shadow independent energy transmitters - cryptocurrencies ⚡ Crypto money has all the properties of money, if necessary, they themselves can be controlled and regulated (smart contract), like the Fed and the NBU. It moving fast in the economic environment:- they can move the cost much faster from point A to point B,- they can quickly gain value and lose it, which seems like a minus, but it’s a superpower,- they will always exist, since there will always be a demand for shadow How can we all perish?Imagine that in the confrontation of superpowers for domination, the process of abandoning the dollar begins. Already, there is a tendency to the accumulation of gold, yuan or some other values in world reserves. And in this, foreign national banks can begin a sharp accumulation of cryptocurrencies 🌱 If the Bank of China, the EU, the USA or the Russian Federation start dumping printed paper money and buying in reserve, for example, bitcoins, then 1% of the cryptocurrency savings can turn into 99% of the value of their reserves, in second, Cryptocurrency does not prevent anything from starting to cost 1 billion per unit. In this scenario, a crazy inflationary process takes place, since along with the release of the dollar, a currency appears that is 100 times more expensive than the dollar. That is, the cost begins to be not 1 trillion dollars, but 101 trillion 🔥 People with expensive cryptography will start buying up all real estate, gold, stocks, resources. Prices for goods, in an instant, will increase dozens of times. People without cryptography will become sharply poorer, all companies in the world will go bankrupt. Next, the cryptocurrency will begin to lose its value, and the second, third wave of fluctuations will tear apart the remnants of the economy, everything will stop. It will be something like a voltaic arc in finance, burning all contractual relationships. A previously unknown power surge. Chaos will begin, wars, everyone will spit on money, and only Nuka-Cola caps will be used ... Postscript, one investment company that invested $ 100 million, has quadrupled the price of EOS cryptography to 20 billion (total capitalization). If China and the Russian Federation skimp on 100 billion and announce it. Bitcoin will easily grow in value of 1 million, which will amount to 10 trillion (10-11 million in bitcoins of 1 million each) of exchange energy per second ... Everything is much closer than we think ...
The main purpose of this regulation is to help prevent money laundering, and other financial crimes. State level regulation varies from state to state, and targets requirements to register for money transmitter license (MTL) or money service business (MSB). Most of the states will also require a surety bond to run bitcoin machines. Exclusive Interview with Oleksandr Lutskevych, CEO & Founder, CEX.IO. Oleksandr Lutskevych is the founder and CEO at CEX.IO LTD, a successful London-based group of companies, including CEX.IO Bitcoin Exchange.. Established in 2013 as the first cloud mining provider, CEX.IO is a multi-functional regulated cryptocurrency exchange registered as a Money Business Service (MSB) by the US regulator ... All but two states have specific guidelines for money transmitters, but not all have clearly defined if virtual currencies are part of the mix. For states that do define virtual currency under current laws, a Bitcoin money transmitter license is likely to be required to conduct business. If a company is helping transact, exchange, or transfer ... CEX.IO has officially launched in the United States. In CEX.IO's quest to become a globally licensed digital asset exchange, as of July 4th, we have received Money Transmitter Licenses ("MTL") in nine US states, including: Iowa, Kansas, New Mexico, Oklahoma, South Dakota, West Virginia, Maryland, Alaska and New Hampshire. Cryptocurrencies like Bitcoin, Litecoin, Ethereum, etc., are the best sources for investment. Nowadays, digital currencies are famous due to high volatility, improved liquidity, exposure of leverage, security, and much more. Many people have started investing in cryptocurrencies to get a steep rise in their invested money. If you are an investor, it can be extremely […]
Everything You Need To Know About Money Transmitter Licensing
At present, no federal charter protocols are available to cryptocurrency traders (miners and exchanges) however MANY states have taken the initiative to regu... This week on Around the Coin, Faisal Khan, Brian Roemmele, and Mike Townsend discuss everything about money transmitter licenses, including how they work, who needs one, and how bitcoin plays a role. Chinese regulators have announced that they are banning companies from raising money through digital currencies. Since then, Bitcoin prices have plunged 20 percent, and one of China's largest ... Are Lightning nodes money transmitter businesses? Will they be subject to Anti Money Laundering laws? Will operators be subject to legal action as mixing service operators have? This question is ... Bitcoin is taking a hit because of Chinese regulators cracking down on the cryptocurrency sector. A ban on so-called initial coin offerings, or ICOs - the practice of creating and selling digital ...