South Korea Government Approves Seven out of 21 Cryptocurrency Exchanges’ Security Policy

Of a total of 21 exchanges, the majority still had notable problems meeting South Korean authorities’ 85 security criteria.

Some of South Korea’s biggest cryptocurrency exchanges have passed a government security audit, but the majority could be exposed to attacks, local tech news outlet ZDNet reported on Jan 10.

Bithumb, Coinone and Korbit, in addition to four other major exchanges, satisfied investigators during the audit, which took place between September and December 2018.

Of the tranche of 21 platforms involved, however, the remaining 14 failed to meet the criteria for suitable security procedures.

South Korea previously had one of the world’s most active cryptocurrency trading economies before regulatory upheaval saw consumer habits dramatically change in late 2017.

In the interim, attackers have continually targeted South Korean operators in order to steal funds from users, with even officially secure ones such as Bithumb reporting breaches last year worth tens of millions of dollars.

The latest audit by lawmakers looked at 85 different aspects of security, and found that of those who did not pass, an average of 51 aspects required attention, ZDNet reports.

Last month, a court acquitted Bithumb in a case brought by one investor who claimed he lost funds worth $355,000 in a hack because of the platform.

While no mention of shutdowns as a result of poor performance has surfaced, Seoul has been more draconian on certain other aspects of the cryptocurrency industry, with initial coin offerings (ICO) still facing a full ban under its jurisdiction.

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China Introduces New Anti-Anonymity Regulations for Blockchain-Related Companies

China has introduced new guidelines seeking to eliminate anonymity in blockchain networks.

The Cyberspace Administration of China (CAC) has introduced new regulations for blockchain firms that are operating in the country. The announcement was published on the regulator’s website on Thursday, Jan. 10.

According to the CAC, the guidelines, which will come into force on Feb. 15, were developed to contribute to the healthy development of the industry.

The document describes the firms that are subject to regulations as websites or mobile apps that provide information and technical support to the public using blockchain technologies. As soon as the regulations come into power, they will be obliged to register their names, domains and server addresses at the CAC within 20 days.

The guidelines require blockchain startups to allow authorities access to stored data, and to introduce registry procedures that would require ID card or mobile numbers from its users. Moreover, they will be obliged to oversee content and censor information that is prohibited under current Chinese law.

If a firm fails to comply with the regulations, it might face fines from 20,000 to 30,000 yuans ($2,900 and $4,400, respectively). In case of serial offences, the company might face a criminal investigation.

China first released draft guidelines in October for blockchain companies, which also contained recommendations that sought to eliminate anonymity in blockchain.

At the time, Asian newspaper The South China Morning Post wrote about an anonymous open letter that alleged sexual harassment at a top Chinese university that was published on the Ethereum (ETH) blockchain in April. The media outlet believes the publication of the letter could be a motivation behind the new regulations.

China is currently mainly piloting blockchain legislation in three regions — Beijing, Shanghai and Guangzhou. According to a December report by local finance publication Securities Daily, there are 11 blockchain-related policy projects concentrated in these areas.

In the meantime, the country has upheld a de facto ban on domestic crypto trading since 2017, which was completed in February 2018 when the government added international crypto exchanges and initial coin offering (ICO) websites to its Great Firewall. The decision was approved by the People’s Bank of China, the country’s central bank, and regulators.

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Venezuelan WTO Request Accuses US of ‘Discriminatory Measures’ Against Petro Coin

Venezuela has requested consultations with the U.S. government in connection with “discriminatory” sanctions against its national digital currency.

Venezuela has taken issue with United States sanctions, including those levied against transactions in the country’s national digital currency, the Petro (PTR), according to a World Trade Organization (WTO) consultation request, published Jan. 8.

The request, dubbed “United States — Measures relating to trade in goods and services,” was originally filed on Dec. 28. In the document, the delegation of the Bolivarian Republic of Venezuela requests consultations with the U.S. government regarding “certain measures imposed by the United States in relation to trade in goods and services.”

In particular, the document describes five key areas through which the U.S. purportedly introduced “coercive trade-restrictive measures […] on the Bolivarian Republic of Venezuela.” One of the fives areas describes “[d]iscriminatory coercive trade-restrictive measures with respect to transactions in Venezuelan digital currency.”

In this section, the Venezuelan government alleges that the U.S. government subjects Venezuelan financial services and financial service suppliers to the above measures, “under which suppliers receive treatment less favourable than that accorded to like services and service suppliers of WTO Member States not subject to the measures.”

The document also alleges that:

“[…]inasmuch as digital currencies originating in the United States are not subject to the same prohibitions as Venezuelan digital currencies, the United States is according less favourable treatment to Venezuelan financial services and service suppliers than to like domestic financial services and service suppliers, in violation of Article XVII:1 of the GATS.”

Venezuela thus requests consultations with the government of the U.S. and modification, replacement and amendment of the measures identified in the compliant.

In February 2018, the Venezuelan government launched the pre-sale of its national oil-backed cryptocurrency Petro (PTR). The country reportedly introduced the currency in an attempt to attract foreign investors and skirt U.S. and EU sanctions, as well as overcome catastrophic hyperinflation in the country.

Later in August, Venezuelan President Nicolás Maduro announced that the Petro will be used as a unit of account within the country, creating two official currencies. In December, the country took one more step towards mass adoption of the Petro by reportedly automatically converting pensioners’ most recent monthly bonus into the cryptocurrency.

Today, Jan. 10, Cointelegraph reported that the Venezuelan government has published a new decree that introduces taxation for operations with cryptocurrency and foreign fiat currencies. The decree states that all citizens who deal with cryptocurrencies or foreign fiat currencies are now obliged to report their income and pay taxes in the same currency they have operated in, and not in the sovereign bolivar.

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Russian Parliament to Focus on Digital Economy Bills in Next Session, Says Chairman

Vyacheslav Volodin, the chairman of the lower chamber of the Russian parliament, has prioritized digital economy bills, including a draft bill on crypto.

Vyacheslav Volodin, the chairman of the lower chamber of the Russian parliament, has said that bills on the digital economy will be a priority during the upcoming session. The parliament’s official website revealed this in a press release published Wednesday, Jan. 9.

Speaking at the opening of the parliament’s spring session, Volodin mentioned the digital economy bills that are currently being considered, including the ones on digital financial assets, digital rights and crowdfunding. According to the chairman, the members of the parliament will focus on these bills during the upcoming session.

Volodin also urged lawmakers to create a favorable legal environment for the development of the digital economy in Russia.

The chairman further recommended the creation of working groups of experts, entrepreneurs and researchers in order to speed up the development of new digital economy-related laws. Volodin added that the MPs are set to present more than 20 new draft bills related to the digital economy in the near future.

The Russian government has been struggling to finalize its bill on digital assets throughout last year, with the final version receiving heavy criticism from members of the industry. The draft bill for crypto legislation — which lacked definitions for core crypto concepts, such as mining and cryptocurrencies themselves — has been ultimately sent back to the first reading stage.

In September, the Russian Union of Industrialists and Entrepreneurs (RSPP) — the members of which include mineral mining and smelting billionaire Vladimir Potanin and the head of the Russian innovation fund Skolkovo, Viktor Vekselberg — proposed an alternative to the state draft bill on crypto. In November, the group sent its proposals to the Russian prime minister, Dmitry Medvedev.

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New York Economic Dev. Non-Profit NYCEDC Opens Blockchain Center

The New York City Economic Development Corporation has announced the opening of a Blockchain Center in the city.

The New York City Economic Development Corporation (NYCEDC) has announced that it is opening its Blockchain Center in Manhattan, Bloomberg reports today, Jan. 10.

The organization told reporters that the center is part of a partnership with international trade organization Global Blockchain Business Council and affiliates of New York-based venture capital fund Future Perfect Ventures.

Located in the Flatiron District of Manhattan, the 4,000-square-foot center will reportedly offer blockchain-oriented educational services to the general public, such as programming classes to lectures for software developers.

Ana Arino, chief strategy officer at the NYCEDC, told Bloomberg in a phone interview that the organization is “playing the long game” in terms of the potential of blockchain tech, and looking to keep New York at the forefront of future development. Arino stated:

“[Blockchain is] a nascent technology, so there’s bound to be uncertainty around this evolution from year to year. While we don’t know what the future holds, we want to make sure we have a seat at the table shaping it.”

The city is reportedly contributing a “one-time initial investment of $100,000.” Bloomberg reports that the organization will seek to raise further funds via membership fees and through corporate partners, which already reportedly include Microsoft Corp. and International Business Machines Corp.

According to Bloomberg, the city has tentative plans to test the use of blockchain tech this fall.

The NYCEDC’s president and CEO first announced plans to open a blockchain-focused resource and education center in the city in May.

This month, a New York state legislature assemblyman announced that New York had become the first United States state to create a cryptocurrency task force aimed at studying the regulation, use and definition of digital currency.

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French Tobacco Shops Start Selling Bitcoin Despite Regulatory Uncertainty

Several tobacco shops in Paris have started selling Bitcoin in partnership with local crypto wallet despite the regulatory uncertainty.

Several tobacco shops in Paris, France, have started selling Bitcoin (BTC) for fiat despite regulatory uncertainty, Reuters reports Tuesday, Jan. 8.

Reuters has learned that the world’s largest cryptocurrency can now be purchased at six tobacco shops throughout Paris. However, in a contradicting report French magazine Capital has claimed that there are as many as 24 shops currently participating in the experiment backed by Keplerk — a French cryptocurrency wallet provider.

According to Capital, customers can purchase Bitcoin for the sums of 50, 100 or 250 euros. The tobacco shop then provides a ticket with an alphanumeric code and a QR code, which can then be used to obtain the purchased bitcoins via Keplerk’s website. The magazine adds that Keplerk collects a 7 percent fee on each payment, 1.25 of which then goes to the tobacco shop.

Adil Zakhar, a co-founder of Keplerk — the French crypto wallet provider that has backed the experiment — has told Reuters that he plans to expand the project to 6,500 tobacco shops by February.

As Cointelegraph reported in November 2018, France’s tobacco federation has obtained permission to trade Bitcoin in its shops from the French Prudential Supervision and Resolution Authority (ACPR), an independent agency that operates under the auspices of the French central bank.

However, on the same day that the news broke, the country’s central bank denied the reports, saying that it had not greenlighted any deals related to cryptocurrencies.

Moreover, French stock market regulator (AMF) issued a related statement reminding the public of the risks of dealing with cryptocurrencies. In addition to that, AMF stated that PAYSAFEBIT SASU — the legal entity behind Keplerk — was not licensed by French authorities.

Nonetheless, in its most recent article Reuters reports that the French government has not imposed a de facto ban on selling Bitcoin at tobacco shops.

France continues to demonstrate a mixed attitude towards cryptocurrencies: for example, in December, the AMF blacklisted four crypto-related websites for unauthorized investment offerings. On Dec. 18, the French parliament rejected the majority of crypto-related amendments to the 2019 finance bill, which were expected to ease taxation for entrepreneurs and traders.

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US Dept. of Energy Grants $4.8 Million to Fund Research of Tech Including Blockchain

The U.S. Department of Energy announced $4.8 million in funding for university research that includes blockchain.

The Department of Energy (DOE) of the United States has announced $4.8 million in funding for university research of technologies including blockchain, according to an announcement published Jan. 7.

The funding has been announced by the department’s office of fossil energy. Projects eligible for funding include those researching emerging technologies, “such as blockchain and decentralized, peer-to-peer [P2P] internet protocols” to secure data from fossil power generation sensors.

The developed systems would be used to securely process data from the sensors and other unspecified information flows within distributed sensor networks for fossil-based power generation systems.

The DOE said it “anticipates selecting up to 12 projects” to receive the funding allocation.

As Cointelegraph reported in December, Spanish renewable energy company Acciona Energía  — recognized as one of the largest renewable energy operators globally — is set to deploy blockchain tech to trace electricity generation.

Also in December, news broke that South Korea’s government will spend about $3.5 million to set up a blockchain enabled virtual power plant in the country’s second most populous city, Bausan. The plant is meant to integrate the idle capacities of multiple energy sources to optimize power generation.

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Blockchain is Boosting the Health Sector by Unifying Patient Data and Increasing Funding for Medical Research

Blockchain will boost the health industry by integrating patient data and widening medical research.

People are living longer in the 21st Century, but what’s less recognized is that, despite our increasing longevity, we’re also getting sicker. According to research, the number of people over 65 afflicted with at least four medical conditions is on course to rise by 100 percent by 2035. As can be imagined, such a jump in illness is going to place an increasingly heavy burden on medical institutions and services, with the implication being that we — as a global community — need to find new, innovative ways of dealing with disease.

Fortunately, crypto is on hand to help with this emerging crisis. It won’t be a panacea for the ills of our struggling health systems, but in a number of important ways, blockchains and cryptocurrencies could help the health sector meet its growing workload in the years and decades to come. By increasing the security and transparency of medical data, they could give patients greater assurance that their personal info is being protected, which in turn could increase trust in medical institutions and make people likelier to put their lives in the hands of health professionals. And by providing medical research companies with greater access to funding, they would accelerate progress in the area of drug treatment discovery, thereby saving lives and reducing sickness.

However, the application of blockchain tech in the health industry won’t be an entirely seamless process, given the need for effective crypto regulation to be established first, and given the fact that most blockchains still need to overcome various technical challenges before they can serve thousands — if not millions — of patients. But once it has met such challenges, those working in the space believe it will make a radical difference.

Data efficiency

The first and most important thing to observe about the growing use of distributed ledger technology (DLT) in health care is that it’s not mainly concerned with the actual process of treatment but rather with how data arising from treatment is processed and stored.

In early November 2018, Myongji Hospital in South Korea became one of the latest institutions globally to look to DLT, after it announced that it would be working in concert with Korean IT company BICube to develop a blockchain-based data exchange system. As the press release explained, this system would be part-private and part-public, enabling patients to approve the transfer of their medical data from one health institution to another.

Other recently announced systems are set to work in much the same way, although with minor differences in each specific case. In Austria, the national government offered its financial support to Lancor Scientific, which is building a cancer-screening tool that harnesses artificial intelligence (AI) that has a 90 percent accuracy rate of detection (human pathologists achieve only 60-70 percent accuracy for cervical cancer). In addition to using AI, Lancor will also be using its own proprietary blockchain to store the data obtained from its screening tool. And as its white paper makes clear, a patient can access this data by using the platform’s Medici Token, which activates the smart contracts that then release the relevant data to him or her (or to an approved third party).

According to Lancor CEO Aamir Butt, blockchain technology will be applied mostly to medical data, but this will still enable health professionals and institutions to target treatment more effectively. He told Cointelegraph:

“Blockchain technology allows for better targeting of at-risk groups for cancer screening, because the data available is better. Patients own their own healthcare data when blockchain technology is used so the data has greatly more integrity than can be achieved in other models of data handling. For example, between 5% and 20% of NHS data is not tied specifically to a patient, and in the US, healthcare data is tied to a patient-event rather than a patient.”

In fact, other platforms have been launched that aim to harness blockchain’s power to integrate masses of data and make information quickly accessible, doing so in a way that improves the actual process of treatment — and often more cheaply. One such platform is Skychain, which is combining DLT and AI to build a distributed network of artificial neural networks (i.e., artificial brains) that will potentially diagnose medical conditions with greater success than human practitioners. Similarly, Doc.com (also known as Docademic) provides users of its mobile app with access to doctors and medical professionals from around the world. Its CEO, Charles Nader, told Cointelegraph that its use of cryptocurrency will incentivize more potential users (patients and professionals) to engage with the platform, which will ultimately create more useful data.

“[Blockchain] certainly adds value since you have economic incentives to add more data as well as having access to information in one place. This incentive to add the data would be the cryptocurrency that interacts with the blockchain. And as more data is inputted into the blockchain, the information will be much more useful.”

Not only does blockchain provide incentives to add more data to health care systems, but it will actually incentivize people to show up to their appointments. Healthereum is another company building a blockchain-based platform that will enable patients to be treated by doctors from around the world, yet in contrast to many of its rivals, it will actually reward patients with its token for showing up to appointments — and punish them for not showing up. And as its CEO and founder, Steve Y. Chung, explains to Cointelegraph, this will go a long way in solving one of the health care industry’s biggest problems.

“No-shows afflict healthcare providers in every country. No-shows interrupt the relationship which then disrupts downstream health care. Utilizing blockchain, [we] address this very issue of no-shows via gamification of the appointment. Healthereum incentivizes adherence to appointments which then leads to better health.”

Security?

Of course, in an era when concerns over privacy and personal data are becoming increasingly prominent, the ability to generate masses of personal data might be worrying. However, Aamir Butt affirms that the cryptographic and distributed aspects of blockchain tech provide a reliable way of minimizing threats to data security:

“The use of cryptographic handshakes before data is transferred ensures that the right information is allocated to the right patient, and the right tests are performed so that the right future care can be planned and delivered. Indeed, that provides for devices to be authenticated as well. The practice of medical fraud – use of fake devices, charging patients for tests not done and more – is relevant across the world, but especially in developing countries. By authenticating devices on the blockchain, using these cryptographic handshakes, the opportunity for that fraud is shrunk dramatically.”

Not only does DLT promise to improve data security and reduce the chances of medical fraud, but it could also allow for more connected national systems of medical data. As Butt explains, systems prevalent in the United Kingdom, the United States and other developed countries currently create “fragmented silos of data, which means benefits of aggregated data are hard to access, made worse through a lack of data integrity.”

Fortunately, blockchain enables a new model for handling patient data. “In a distributed ledger, the database is distributed across the network, with transaction integrity maintained through cryptography,” Butt says.

Research and funding

Because data is becoming so integral to the world’s health systems, and because more and more of it is being created, health care is now providing one of the clearest use cases for DLT. That said, the role of blockchains in medicine isn’t restricted to the better management of data, but also to funding — something that can improve outcomes in drug discovery and medical research.

In September, the California-based pharmaceutical company Verseon launched its own securities exchange, which will enable decentralized, blockchain-based trading in tokenized securities. This might seem like an odd thing for a pharma company to do, but as CEO Adityo Prakash tells Cointelegraph, it will open new possibilities for the health industry:

“Securing funding is also very important for the development of new medicines as well as other healthcare technologies. Needless to say, improvements in healthcare critically depends on new medical innovations. By using blockchain technology to conduct regulations compliant sale and trading of tokenized securities Verseon is attempting to change how life science innovations are funded, who gets to participate and to enjoy the potential returns.”

Verseon isn’t the only platform to have launched with the promise of improving the quality of medical research. In March, California-based Medable announced its Insight platform, which enables medical researchers to share data and other info-based resources. Not only does this cut down on the cost of research, but Insight will also reward those who share new data with the blockchain-based platform, with rewards coming in the form of funding and medical technology.

Obstacles

The fact that blockchain has a potentially bright future in the health industry is also indicated by the increasing role it’s having in medical insurance and medical licenses, where the likes of MetLife and the Illinois state government have been testing DLT-based systems that will secure the corresponding data. However, as promising as this all seems, there are a number of familiar challenges that need to be surmounted before blockchain tech will enjoy widespread adoption.

For one, blockchain-based health platforms will need to be able to scale and handle multiple transactions at speed. However, as Luxcore’s head of marketing, Brian Dors, explains to Cointelegraph, they’ll also need to be interoperable with each other, which will require the completion of such upcoming multi-chain platforms as Polkadot, Cosmos, Icon and others.

“Currently, it is difficult for different blockchains to communicate with each other, particularly if they are built on different platforms and utilize different consensus rules. This poses a significant barrier to implementation in a multi-stakeholder health care environment.”

There’s also the perennial issue of regulation. “For blockchains to truly fulfil their potential of democratizing access to investment opportunities, the issuance and trading of security tokens need to comply with regulations,” says Adityo Prakash.

And aside from regulation, there’s the obvious challenge of spreading awareness of blockchain, so that professionals and the public alike will be inclined to adopt DLT-based health platforms. But as Doc.com’s Charles Nader informs Cointelegraph, the financial incentives provided by cryptocurrencies may provide an effective way around this:

“One of the main challenges is getting the general population aware of what blockchain is and the benefits they get from using this technology. Besides this, the incentives must be in place so that people are willing to share their healthcare information with third parties over blockchain. This is something that only blockchain can facilitate, because it can reward its users with cryptocurrency for inputting data into the blockchain.”

Together, this all indicates that blockchain still has some ways to go before it will deliver on its promise in the medical sector. But because this sector has become increasingly “datafied” in recent years, it’s ripe to benefit from blockchain’s decentralized, cryptographically secure power over data.

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Colorado Securities Regulators Crack Down on Four More ICOs for Alleged Illicit Practices

The Colorado Division of Securities issued cease and desist orders to four more ICOs allegedly involved in fraudulent and illegal practices.

The Colorado Division of Securities has filed cessation orders against four Initial Coin Offerings (ICOs) allegedly involved in fraudulent and illicit practices, according to an official announcement Nov. 20.

Colorado Securities Commissioner Gerald Rome issued the new cease and desist orders following investigations by the Division’s ICO Task Force. Rome has issued 18 cessation orders to ICO projects offering unregistered securities since May, 2018. According to the announcement, at least two more orders are still pending.

The recent orders affected four crypto and blockchain-related firms; Global Pay Net, Credits LLC, CrowdShare Mining, and CyberSmart Coin Invest. All the companies were reportedly accessible to Colorado residents and allegedly violated securities laws.

Regulators state that the projects also engaged in fraudulent marketing practices; Global Pay Net allegedly falsely claimed that “investors receive 80 percent of the company’s profits.” CrowdShare Mining promised an “at least 1,000 percent” four-year return on investment for investors who bought its token.

Commissioner Rome stated that the “sheer number” of cease and desist orders against ICOs should be a “red flag […] that there is a real risk that the ICO you are considering is a fraud.” Rome also highlighted the problem of crypto investor protection, claiming that fraudsters “simply create a fake ICO to steal investors’ money,” and “trick investors into wrongfully paying them.”

Earlier this month, the securities regulator issued cease and desist orders to four ICOs for allegedly offering unregistered securities.

On Nov. 19, Italian securities regulator Commissione Nazionale per le Società e la Borsa (CONSOB) issued enforcement actions against three crypto-related firms for alleged violation of local financial laws by failing to register as financial intermediaries.

That same day, the North Dakota Securities Commissioner issued a cease and desist order against an alleged Russia-based ICO that posed as Liechtenstein Union Bank.

According to a recent study by the University of British Columbia, ICOs face a “compliance trilemma” that limits their potential. Some issuers shirk compliance measures in order to “reach a distributed pool of investors” and have an offering that is “cost-effective.”

The study explains, “If issuers forgo these costs, the risk of being non-compliant rises significantly. The result is a trilemma, whereby issuers currently must forgo one of these goals to realize the other two, or to compromise on all three.”

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South Korea Science, Food Ministries to Use Blockchain for Tracing Beef Supply Chain

The South Korean government will use blockchain technology for agriculture goods’ tracking, specifically of the beef supply chain.

The South Korean government will use blockchain technology for tracing beef and providing consumers with information from the food supply chain, Yonhap News Agency, the largest news agency in South Korea, reported yesterday, Nov. 20.

Blockchain technology has been implemented into the pilot program that is to be launched jointly by the Ministry of Science and ICT and Ministry of Agriculture, Food, and Rural Affairs. The testing phase of the program is scheduled for December and the official launch of the system is to be in January 2019.

According to Yonhap, the ministries are planning to use the distributed ledger technology (DLT) “to track beef through the supply chain to provide consumers with information about the source of their food.” The article also states:

“The new platform uses blockchain technology to store related information and certificates in the distributed ledger to enhance efficiency and credibility.”

The use of blockchain tech for tracing agricultural products is one of the common implementations of the technology worldwide. In August, Australia’s largest grain exporter, CBH Group, partnered with a local startup to use blockchain tech for tracking oat shipments.

Last month, the four largest agriculture companies in the world — Archer Daniels Midland Co., Bunge Ltd., Cargill Inc., and Louis Dreyfus Co., commonly known as ABCD — agreed to use blockchain and artificial intelligence (AI) technologies to reduce costs and to make trading more efficient and transparent, Cointelegraph reported Oct. 25.

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