New York University Offers Major in Blockchain Technology

New York University now offers a major in blockchain and cryptocurrencies at the Stern School of Business.

New York University (NYU) has reportedly become the “first” university in the U.S. to offer students a major in blockchain technology, CBS New York reported September 18.

The program will reportedly be provided by the NYU Stern School of Business, which was also a pioneer in offering undergraduate courses in cryptocurrencies and blockchain. Professor Andrew Hinkes commented on the new program:

“We hope to establish a groundwork so that the students can understand what’s really happening under the hood, so that they can understand both the legal and the business implications, and prepare them to go out and tackle this new market.”

According to associate professor Kathleen Derose, the educational establishment is expecting large companies to partner within the training program, while “the startups in [fintech] will likely invent the new cool stuff.” Following the increasing number of students interested in the new offer, NYU reportedly doubled its course offerings this school year.

Adam White from cryptocurrency exchange Coinbase said that students “see the development, the birth of a new industry,” adding that “in many ways, we look at things like Bitcoin (BTC) and Ethereum (ETH) and blockchain as the internet 3.0.”

Last month, Coinbase released a study, showing that 42 percent of the world’s top 50 universities have at least one class on cryptocurrencies and blockchain. Of the 172 classes reviewed in the study, 15 percent were offered by economics, finance, law and business departments, while 4 percent were in social science departments. The study found that blockchain and crypto-related courses are most popular in the U.S. among other countries.

U.S. students’ interest in crypto is reflected not only in educational programs, but in investing in digital currency as well. As a study conducted by Student Loan Report in March shows, 21.2 percent of college students used loan money to fund a crypto investment, hoping that the upward price volatility in crypto would help pay their debts faster.

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US Financial Giant PNC to Use Ripple Technology for International Payments

Top ten bank PNC announced it will use Ripple’s blockchain solution, xCurrent, for international commercial payments.

PNC, which is ranked among the top ten U.S. banks, will use RippleNet to process international payments for its customers, Ripple announced Wednesday, September 19.

As Reuters reports, a particular PNC unit — Treasury Management — will use Ripple’s blockchain solution xCurrent to speed up overseas transactions held by U.S. commercial clients.

Ripple emphasises that xCurrent will allow PNC business clients to receive payments against their invoices instantly, changing their approach to managing both accounts and their working capital.

Senior vice president for product management of Ripple, Asheesh Birla, thinks that using xCurrent in banking is the first step towards adoption of other Ripple products, such as the xRapid solution set to be launched in a few months. “It’s a way [for the banks] to get their toe into the water,” Birla told Reuters.

The news come despite the fact some Ripple employees were sceptical about using xCurrent in cross-border payments. As Cointelegraph reported in June, Ripple’s chief cryptographer David Schwartz said banks were unlikely to deploy the technology because of low scalability and privacy problems.

PNC, listed by Bankrate as one of top ten largest U.S. banks with 8 million customers and retail branches in 19 states, joined other global financial institutions which had previously partnered with Ripple.

For instance, in late 2017 American Express announced it was creating a Ripple-powered app for B2B payments between US corporate customers and Santander UK customers. Later in March, a Japanese bank consortium stated it will release an instant domestic payments mobile app “MoneyTap” based on Ripple.

And in April, Cointelegraph wrote that Spanish-based bank Santander launched Ripple-powered blockchain payment network One Pay FX, reportedly becoming the first international bank to do so.

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Cryptocurrency Mining Malware Detections Up Almost 500 Percent in 2018: Report

The tool that exploits Microsoft vulnerabilities to enable widespread crypto extortion has let malware proliferate this year, says a new report.

Leaked code targeting Microsoft Systems which hackers allegedly stole from the U.S. National Security Agency (NSA) sparked a fivefold increase in cryptocurrency mining malware infections, Bloomberg reports Wednesday, September 19, citing a new cryptojacking report.

Eternal Blue, the tool which can exploit vulnerabilities in Microsoft software, is behind the now-infamous global cyberattacks WannaCry and NotPetya, which continue to cause disruption since they first surfaced in 2017. Bloomberg notes that Eternal Blue was allegedly stolen from the NSA in 2017 by a hacking group called the Shadow Brokers.

Hackers have since been using the tool in order to gain access to computers in order to covertly mine for cryptocurrency, with detections up 459 percent this year, according to the report from the Cyber Threat Alliance (CTA).

“Combined threat intelligence from CTA members show that this rapid growth shows no signs of slowing down, even with recent decreases in cryptocurrency value,” the company writes in a preface to its most recent report, stating:

“Because this threat is relatively new, many people do not understand it, its potential significance, or what to do about it.”

Cointelegraph has often reported on the emergence of crypto mining malware infecting user devices such as PCs and smartphones. Rather than Bitcoin (BTC) or Ethereum (ETH), it is privacy-focused altcoins such as Monero which are hackers’ preferred target, the report notes.

The uptick, CTA says, comes as such operations are becoming more “sophisticated.”

“Analysts have observed successful and widespread attackers ‘living off the land,’ or employing legitimate functionality to download and execute miners that would be more difficult for an observer or antivirus to detect,” the preface continues, highlighting the Monero mining campaign Smominru as an example.

The NSA did not respond to Bloomberg’s request for comment on the findings upon publication.

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Crypto Future of E-Commerce Is in the Hands of Asian Players now allows users to buy crypto, but that’s not the main news.

On Sept. 14, the blockchain investment arm of United States-based e-commerce Bitcoin pioneer Overstock announced that the retailer’s clients can now purchase the cryptocurrency directly from its website. It became possible after its subsidiary Bitsy began a beta launch of its cryptocurrency wallet and exchange, marking another step in Overstock’s rich relationship with Bitcoin.

However, although Overstock first allowed its customers to pay with the cryptocurrency back in 2014, the e-commerce industry has yet to experience mass adoption. Meanwhile, Asian players are gathering to make an even greater push.

First brick in the wall: Overstock’s initial success

In January 2014, Overstock, an online retailer led by a “scourge of Wall Street” and crypto enthusiast Patrick Byrne, became the first large stock company to accept Bitcoin. As Byrne recalls in an interview with Business Insider:

“We were the first. The largest company accepting Bitcoin then was a $800,000 a year restaurant diner in Western Australia. We stepped up and started taking it — we were $1.4 billion. So I like to think we saved that community about five years in their adoption cycle.”

Curiously, the pioneering transition for Bitcoin’s integration into mainstream e-commerce was somewhat accidental: In December 2013, Byrne mentioned to a journalist that his company might start accepting Bitcoin. “I said it off the top of my head,” Byrne later admitted. Soon after the interview, media outlets from all over the world started to report on Overstock’s potential move. That provoked Byrne to swiftly contact San Francisco-based crypto exchange and wallet Coinbase, and, in a matter of few weeks, they jointly introduced the Bitcoin payment option on Overstock.

The initial payoff was worth it. “The implementation pays for itself a hundred times just by the press,” Byrne claims. The cryptocurrency community turned up to show their support: “Bitcoin users started to come to our site and buying a set of pillows or a bed just to show their support. We sold few hundred thousand just in two days after getting live.”

Interestingly, Overstock shares have trended significantly close to BTC price ever since Byrne joined part of the crypto crowd. For instance, Overstock’s stock rose four times between July and December of 2017, as Bitcoin grew more than sevenfold, and closed the year with an approximate gain of 200 percent. However, such reliance on Bitcoin has worked both ways for the company. In September, when Byrne had to sell 10 percent of his equity in the company in order to reinvest the proceeds in two investment projects and satisfy tax obligations, he wrote in a letter to investors:  

“I am disappointed that when the deadline arrived for my sales this quarter, the stock had dropped (I sadly note that over the last 180 days the correlation between OSTK’s and Bitcoin’s daily movements has been 85.5 percent, and again warn people: We don’t have significant holdings of Bitcoin).”

Nevertheless, Byrne continues to rely on cryptocurrency and blockchain in his business. Most crypto-related projects are carried out by venture capital firm Medici Ventures. It was established within Overstock in 2014 to use the company’s money to invest in blockchain projects. Another Overstock blockchain subsidiary, tZERO, has plans to launch an ICO trading platform. It has already secured major institutional investments from Hong Kong-based private equity firm GSR Capital.

Most recently, in September, Medici Ventures announced that its investment choice, Bitsy, had begun a limited launch of its cryptocurrency wallet and exchange. Due to the new integration, customers of Overstock received the option to purchase Bitcoin directly from the website.

“Integrating with Bitsy will allow Overstock to take the next step in its cryptocurrency journey by allowing the company to offer Bitcoin for sale directly from the retail website,” Byrne stated in the press release.

First wave: Shopify, Expedia and other U.S.-based businesses

Even before Overstock, there were smaller online retailers paving the way for crypto. Back in 2013, a Canada-based e-commerce platform for online stores and retail point-of-sale systems called Shopify announced a Bitcoin payment option for its sellers. Back then it had a base of over 70,000 online stores. 

Introduced via a collaboration with BitPay service, the feature could be activated upon contacting Shopify’s team. BitPay is a global Bitcoin payment service provider headquartered in Atlanta. It was founded in May 2011 to provide mobile checkout services to companies that wanted to accept Bitcoin.

“Due to the fact that it’s a very new feature and not something we’re ready to roll out to all stores just yet, you will need to contact me to have it enabled, and I may want to follow up with you for your feedback once you’ve been using it for a while, but it works,” its representative Brian Alkerton wrote on Nov. 9, 2013.

In July 2014, Shopify expanded its crypto integration by announcing a partnership with Coinbase: “Coinbase offers a two-click checkout experience and simple refunds that make accepting Bitcoin payments easy and convenient. All Shopify merchants can currently use Coinbase to accept Bitcoin and anyone with a U.S. bank account can convert their Bitcoin to USD.”

The users could now choose between the two service providers, who offered slightly different pricing models: BitPay reportedly charged a one percent transaction fee on casual sales and a zero percent fee for monthly subscribers at the time, while Coinbase charged zero percent standard transaction fees on up to $1 million in processing.

Additionally, Shopify website mentions that “unlike processing credit cards, Bitcoin payments have low to no fees,” while frauds and chargebacks are allegedly non-existent due to the nature of blockchain. Moreover, the e-commerce platforms lists fast international payments and no Payment Card Industry (PSI) compliance as other other benefits for using cryptocurrencies on their platform. Shopify has not released any statistics on how often cryptocurrencies are used in their transactions. However, in 2014, after the first full year with crypto payment option, it reportedly earned $105 million in revenue, twice as much as it raised the year before.

In November 2013, Calabasas-based company CheapAir became the first online travel agency in the world to accept Bitcoin as a form of payment for flight tickets. To introduce the option, CheapAir teamed up with Coinbase.

“Bitcoin is really easy. You can do it in two clicks. It’s a much easier way to pay and it’s also much more secure,” CEO Jeff Klee stated in an interview with Fox at the time.

When answering if his company is concerned about Bitcoin’s volatility, Klee declared that they feel “pretty insulated”: “The airlines don’t [accept] Bitcoin yet, so we have to pay them in U.S. dollars. When the sale comes in, we take the Bitcoins, [and] exchange them almost right away.”

Moreover, Cheapair’s CEO stressed that Bitcoin might make the transaction between the company and customers cheaper, albeit on their end: “Consumers don’t know this, but there’s a three percent cost embedded into everything you buy. Bitcoin does not have those. The transaction fees are much lower.”

By February 2014, the travel agency added the option to pay for hotels with the cryptocurrency, which was also a first for the industry.

Relatively soon, one of Cheapair’s competitors followed its move. In June 2014, Expedia, a travel booking website owned by U.S.-based Expedia Group, joined the ranks of crypto-friendly businesses by announcing it would accept Bitcoin as a form of payment for hotel bookings, also via a partnership with Coinbase.

BitPay vs. Coinbase

Thus, U.S.-based retailers who chose to support Bitcoin have partnered up either with Coinbase or BitPay. Both of them have their specific benefits and shortcomings.

In 2017, BitPay reported processing more than $1 billion in Bitcoin payments. “We’ve already grown our payments dollar volume 328 percent year-over-year from 2016,” the processor claimed. “Altogether, BitPay’s merchants are receiving $110 million in Bitcoin payments per month.”

In order to increase the application’s reach and popularity, BitPay announced support for Bitcoin Cash (BCH) in December 2017. A couple of weeks later, the company confused the crypto community: First, BitPay announced it would raise its minimum transaction amount to $100. However, just two days later, the company backpedalled, setting the value back at $5.

In February 2018, a couple of years after securing its first customers among online retailers, Coinbase announced its further expansion into the world of e-commerce: The exchange and wallet service opened Coinbase Commerce, a service with the aim to assist more online retailers. It was reported that the new service could be integrated into a merchant’s checkout flow or added as a payment option on an e-commerce platform. Additionally, it supported Bitcoin, Bitcoin Cash, Ethereum and Litecoin. The company announced in the press release:

“Our mission at Coinbase is to create an open financial system, so we’ve designed this solution to serve merchants worldwide. Unlike previous merchant products we’ve offered, Coinbase Commerce is not a hosted service, so merchants have full control of their own digital currency.”

Around the same time, Coinbase upgraded its policy, reportedly suspending “custodial” solutions for merchants. Soon after the announcement, Cheapair’s CEO Jeff Klee issued an open letter to customers, where he argued that the new policy will make accepting BTC more difficult.

“Our intention at this point is to use BitPay as a processor [now]. We have had a great experience with them so far and our integration is largely complete. But our one giant concern is that Bitpay does not support ‘non-payment protocol wallets’ [wallets that aren’t BIP-70 compliant]. So if you do not have a compatible wallet, you would have to get one and use it as an intermediate stage for your Bitcoin payment,” Klee wrote.

Interestingly, the Coinbase move could also be the reason why Expedia quietly stopped accepting Bitcoin circa June 10 (Expedia later confirmed to Cointelegraph that their business stopped accepting Bitcoin).

Chinese approach: Blockchain over Bitcoin

Chinese online retailers have been more cautious to interact with cryptocurrencies, instead focusing on their underlying technology, blockchain, which echoes the local government’s politics.

Thus, in 2016, at a conference in Shanghai, Alipay — an online payment platform of the Chinese e-commerce titan Alibaba — announced it may develop a cloud service platform based on blockchain.

“The usage of the blockchain will grow with the transaction records stored in it,” Alibaba Group Vice President Gao Hongbing declared at the time.

In May 2018, Alibaba founder Jack Ma famously stressed blockchain’s importance, while noting that his team “does not care” about Bitcoin.

In the same speech, Ma stated that he strongly believes in blockchain’s potential to address issues of data privacy and security for society at all levels — governments, corporations and individuals — in an “era of big data.” He also stressed that security is a top priority for the e-commerce conglomerate.

In March, the concern came through with more blockchain-related news: Alibaba’s T-Mall e-commerce platform began adopting the technology for its cross-border supply chain via a partnership with logistics company Cainiao, as per local news agency Xinhua. The collaboration will reportedly use blockchain to track goods’ country of origin, method of shipping, arrival port and customs report details.

According to data published in late August by Chinese media outlet iPR daily, Alibaba has reached the top of a list that ranks entities by the number of blockchain-related patents filed to date; the e-commerce conglomerate has filed a staggering 90 blockchain patents, outracing even IBM.

But Alibaba is not the only Chinese e-commerce outlet looking to adopt blockchain. In August 2018, another local retail giant, JD, introduced its own blockchain plans, as it revealed its new Blockchain-as-a-Service (BaaS) platform — dubbed JD Blockchain Open Platform. The new tool aims to enable businesses to build, host and implement blockchain solutions without having to develop the technology from scratch. JD outlined a number of potential use cases for the platform:

“The technology can help companies streamline operational procedures such as tracking and tracing the movement of goods and charity donations, authenticity certification, property assessment, transaction settlements, digital copyrights and enhance productivity.”

The future belongs to international giants who are not afraid to step in

While U.S. e-commerce companies seem to be lagging behind after a promising start — with a number of players dropping alternative payment options altogether — international players appear to be much more ambitious.

In late August 2018, Daniel Shin, the founder of Ticket Monster (TMON), a major Korean mobile e-commerce marketplace which boasts a $4 billion in total sales, disclosed that he had raised $32 million from a number of investors — including Binance labs, OKEx and Huobi Capital — to build a stablecoin named Terra. According to Terra’s white paper, the protocol maintains a “stability reserve” made up of user deposits with rewards varied to ensure the system is over-reserved.

As Shin explained to TechCrunch, Terra’s goal is to offer a new payment option which would allow for the bypass of existing payment networks like Visa, who take their cuts in the process. The use of the token will be stimulated through special discounts.

Interestingly, Terra is off to a jumpstart, granted that the group backing the stablecoin, the Terra Alliance, includes e-commerce players as big as Woowa Brothers, Qoo10, Carousell, Pomelo and TIKI — combined, those companies make around $25 billion in sales. The token would be spendable at each of those services.

Similarly, Japan’s largest e-commerce company Rakuten, with a market capitalization of over $12.5 billion, announced plans to launch its own cryptocurrency as part of a new blockchain-based loyalty program earlier this year.

Called the Rakuten coin, the asset will allegedly serve as ‎a “borderless currency,” underlining Rakuten’s vision of differentiating itself from its online retail rivals, like Amazon, Alibaba or eBay. The company’s CEO Hiroshi Mikitani elaborated:

“Basically, our concept is to recreate the network of retailers and merchants. We do not want to disconnect [them from their customers] but function as a catalyst. That is our philosophy, how to empower society, not just provide more convenience.”

Additionally, in late August 2018, Rakuten revealed a 265 million yen ($2.4 million) deal to acquire domestic crypto exchange Everybody’s Bitcoin. The purchase will reportedly occur on Oct. 1. 

According to Rakuten, it has been “considering entry into the cryptocurrency exchange industry” as it believes “the role of cryptocurrency-based payments in e-commerce, offline retail and in p2p [peer-to-peer] payments will grow in the future.”

While the majority of crypto-friendly online retailers come from Asia, Latin America has been pushing for mass adoption: Via Varejo, one of the largest consumer electronics and home appliance retailers in Brazil, teamed up with blockchain payment service Airfox. Airfox is a mobile financial service launched in February 2018 in Boston, MA. Designed for emerging economies, it allows making fiat and blockchain payments via its AirToken (AIR) coin, an ERC-20-based token.

Via Varejo is now integrating Airfox’s digital banking platform on its e-commerce platforms, as well as in nearly 1,000 of its offline shops. Customers will be able to purchase goods in Casa Bahia by paying directly via Airfox, or will be able to use microloans provided by the retail group.

The press release outlines the importance of the collaboration for the mass adoption of blockchain-powered payment services, letting the platform “extend its mobile digital wallet to Via Varejo’s national customer base and drive mainstream adoption.”

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US Regulator Acts Against Crypto Firm Falsely Claiming to Represent Coinbase, Cointelegraph

The Texas Securities Commission has issued an emergency cease and desist order against a Russian crypto firm for misleading representation.

The Texas Securities Commission (TSC) has issued an emergency cease and desist order against a Russian crypto firm, according to an official press release published September 18. The Texas regulator states that the company allegedly misappropriated both Coinbase and Cointelegraph materials to attract investors.

The firm, operating as Coins Miner Investment Ltd., is said to have spoofed the email address of major U.S. crypto exchange and wallet service provider Coinbase in order to make its email solicitations to investors seem as if they were endorsed by the entity.

The cease-and-desist order states that Coins Miner falsely claimed to be registered at a U.K. address, whereas the firm was in fact operating from Volgograd in Russia. It is charged with sending unsolicited emails to numerous recipients — including Texas residents — luring them to purchase investments in crypto mining programs issued by Coins Miner.

At the center of the order is a Coins Miner affiliate “Ana Julia Lara,” who is charged with falsely depicting herself as a Coinbase crypto trader, as well as misappropriating a photograph of “herself” posing with the president of crypto company Ripple.

The person in the photograph is in fact one of Cointelegraph’s vice presidents, and is not the Coins Miner scammer “Lara,” according to the cease-and-desist:

“Respondent Lara is telling potential investors she met the president of Ripple and [is] providing potential investors with a photograph that purports to depict her and the president of Ripple. The photograph does not depict Respondent Lara. Instead the photograph depicts a vice president at CoinTelegraph Media Group [sic].”

Third parties reporting on the matter have confusingly described the cease-and-desist order, with media outlet Finance Feeds erroneously writing that “the person identified as Lara is [editor’s emphasis added] a vice president of CoinTelegraph Media Group [sic].” Cointelegraph officially denies all connection with the person “Ana Julia Lara.”

Coins Miner is further charged with publishing a “phony” video that “falsely” depicts its facilities, engineers, and financial professionals, and with using “fake” photos that purport to show the interior of its office suite, but are in fact stock Internet photographs available for purchase online.

It is also charged with misappropriating a video of a Fortune journalist discussing crypto next to a superimposed Coins Miner logo. According to the TSC press release, “neither the journalist nor Fortune authorized the use of the video, which was filmed for Fortune as part of its coverage of cryptocurrencies.”

Alongside these charges of misleading and deceptive representations, the TSC deems the investments in Coins Miner to be securities, and their unregistered sale in Texas to therefore be in violation of Section 12 of the Securities Act.

TSC also issued two further cease-and-desist orders on the same day, September 18: one against “DGBK Ltd., an offshore digital “bank” that says it has developed hack-proof storage for virtual currencies”; and Ultimate Assets LLC, a “supposed crypto and foreign exchange trader.”

Earlier this month, in what appeared to be the first U.S. court to address the matter, a New York federal judge ruled that U.S. securities laws are applicable for prosecuting crypto fraud allegations.

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DLT in Migration Policy: How Blockchain Can Help Both Refugees and Host Nations

George Soros and the United Nations are already into it

As the United Nations Refugee Agency warned in the first days of September, the death rate for refugees attempting to reach Europe has risen. That sounds even more cruel considering that the numbers trying to make the crossing has fallen.

For every 18 people crossing to Europe over the central Mediterranean between January and July 2018, one person died. This is twice more than over the same period in 2017, when there was one death for every 42 refugees and migrants attempting the crossing.

Summer in the United States brought the scandal with U.S. Immigration and Customs Enforcement agency (ICE) and Customs and Border Protection Agency (CBP). Both bodies were accused of having a zero tolerance policy and of separating illegal immigrant children from their parents. Annual immigration arrests have soared since January 2017, from 110,568 in 2016 to 143,470 in 2017.

Although the buzzwords ‘refugee crisis’ were left in the year 2015, the problem of mass migration remains one of the central topics in the 21st century, given the vast number of economical and socio-political crises — from Syria to Venezuela — and even the global climate migration crisis, awaited by scientists. Given the importance and difficulty of a decent migration policy, can we rely on decentralized technologies to make it better? In fact, yes. 

The global passport

The first and foremost problem that could arise if you’ve been displaced or are fleeing from war, terror or hunger is the loss of documents. Refugees can be left without their passports, proprietary rights or diplomas during an emergency escape and the lack of security on their way to the countries of asylum. That, in turn, leads to problems and delays in the bureaucratic process of their identification and acceptance into their new homeland. As Norwegian Refugee Council research found, 70 percent of Syrian refugees lack basic identification and documents showing ownership of property.

Host nations certainly has a share in the damage, as they face problems concerning the accessibility of vital information about the newcomers — dealing with the undocumented refugee, the immigration service can’t gain the information about his/her health status, family ties or criminal record, or verify any other vital data that helps them make a decision. Needless to say, this may lead to the designation of refugee status being exploited by economic migrants, fugitives or even the war criminals that caused the mass displacement to begin with.

Not only governmental bodies deal with an individual’s documents, and thus the problems could get worse after asylum or even a new passport is granted. Being less binded by humanitarian ethics, business could have even more rigid demands for proven documentation. It’s hard enough to get a high-qualified and well-paid job even for a native professional, but the absence of a diploma lowers one’s chances to close to zero — regardless of real skills and career experience.

The same could be applied to the myriad of other aspects of life in our highly bureaucratized world. From public medical assistance to bank credits, the lack of necessary papers put refugees in an excluded position and pushes them to other traditional structures — based on ethnicity or religion — that offer some compensation and assistance in the face of the host nation’s indifference. The results of such dynamics can barely be labelled as successful integration.

Another important issue is data security. Refugees’ personal identities are carefully re-established with the support of clever biometric systems set up by the U.N. Agency for Refugees (UNHCR). UNHCR registers millions of refugees and maintains those records in a database. But the evidence suggests that centralized systems like this could be prone to attacks. As a report on UNCHR’s site notes, Aadhaar — India’s massive biometric database and the largest national database of people in the world — has suffered serious breaches, and last year, allegations were made that access was for sale on the internet for as little as $8. 

Funding and governing

But there’s a great distance between asylum seekers and their problems as a legal migrants in a new country — and not every refugee is able to cover it, even if all the necessary documents were brought safely. Despite the significant financial supply and the attention of various national, multinational bodies and nongovernmental organizations (NGOs), the problem of governance and funding remains a serious flaw in immigration policy.

Awaiting the decision of host nations, refugees spend months and years in camps and centers, where they often lack the basic comforts and even security. Rounds and rounds of interviews, documents and appeal procedures separate them from their new life and they’re not safe from the failures and ineffective communication within the system. And the cost of a ‘statistically rare’ error is the individual destiny.

Money distribution is another fundamental bureaucratic activity with a high risk of errors and malpractice. The cost of error is shockingly high. Researchers at the Bristol-based group Development Initiatives estimated that at least $22 billion of the $100 billion-plus reported by donors as bilateral official development assistance in 2011 was never transferred to developing countries. The money was instead spent on activities in donor countries, or put toward the cancellation or rescheduling of debts. In its report about the efficiency of Greek refugee camps in the midst of the Syrian crisis, subsidized by various international bodies, The Guardian cited an anonymous senior aid’s official estimation that as much as $70 out of every $100 spent had been wasted.

In its 2017 report, Human Rights Watch warned about the lack of transparency in donor funding, specifically in providing education opportunities for at least 1.6 million school-age children from Syria. NGOs accounted for hundreds of millions of under-delivered funds and highlighted the main problems — among them were the lack of information about the projects that donors are funding and their timing; and a lack of consistent, detailed and timely reporting by donors.

Finnish experiment

Finland, a country with a population of 5.5 million, cannot boast huge numbers of refugees. For 2018, it set a quota of 750 people, mainly flying from Syria and the Democratic Republic of Congo. That’s way less than neighboring Sweden, which promised to take in 3,400. Nevertheless, the country sets a global example of the use of effective technology in immigration policy: It’s using blockchain to help the newcomers get on their feet faster.

For three years already, the Finnish Immigration Service has been giving asylum seekers prepaid Mastercards instead of traditional cash disbursements, and today, the program has several thousand active cardholders. The card is linked to a unique digital identity stored on a blockchain. The system, developed by the Helsinki-based startup MONI, maintains a full analogue of a bank account for every one of its participants.

People can use their accounts to pay bills, shop or receive salaries. Every transaction is recorded in a public database maintained by a decentralized network. This enables the Immigration Service to keep track of the cardholders and their spending. And for immigrants, a MONI account means a simple and ready-to-use banking tool, as well as the permanent ability to verify their identification to their employers.

From Soros secrets to U.N. adoption

Speaking at the World Economic Forum in Davos in January 2018, the billionaire investor and philanthropist George Soros revealed that his structures already use a blockchain in immigration policies:

“Blockchain technology can be put to positive use. And we use it, actually, in helping migrants to communicate with their families and to keep their money safe and to carry it with them.” 

However during the Q&A session, Soros didn’t reveal the details of this implementation and no additional information has been shared ever since. While billionaires keep their good deeds in secret, the U.N. — the main international force in providing humanitarian aid and migration assistance — already stepped up in adopting blockchain technology.

In 2017, Accenture and Microsoft Corp. teamed up to build a digital ID network using blockchain technology, as part of a U.N.-supported project to provide legal identification to 1.1 billion people worldwide with no official documents. The companies unveiled a prototype of the network at the U.N. headquarters during the second summit of ID2020.

The aim of the tool is to store biometric data — a fingerprint or an iris scan — on a blockchain and thus help individuals prove their identity, even in the case of the loss of paper documentation. The platform also will connect existing record-keeping systems of commercial and public entities. David Treat, a managing director in Accenture’s financial services practice, went as far as to state that such digital identity is a “basic human right”:

“Without an identity, you can’t access education, financial services, healthcare — you name it. You are disenfranchised and marginalized from society.”

The U.N. is no stranger to the blockchain at all. The multinational body held a variety of public events discussing the innovative technology — and in July 2018, even set up the “High-Level Panel on Digital Cooperation,” which explicitly puts blockchain technology on the agenda. Earlier in May, it signed a Memorandum of Understanding (MOU) with blockchain platform IOTA to explore how the technology could increase efficiency.

The organization is also responsible for one of the largest-ever implementations of the Ethereum blockchain for a charitable cause in recent history. In May 2017, the U.N.’s World Food Programme (WFP) directed resources to thousands of Syrian refugees by giving the refugees cryptocurrency-based vouchers that could be redeemed in participating markets.

The codes of cryptographically unique coupons representing an undisclosed number of Jordanian dinars have been sent to dozens of shops. What it takes from cashiers is just to verify the user’s identity by using eye-scanning hardware. The pilot program alone, which ran for 10,000 Syrian refugees, has been said to save the agency $150,000 a month while eliminating a 98 percent of bank-related transfer fees.

In February 2018, Robert Opp, a director at the World Food Programme, told Bloomberg that the U.N. would expand its blockchain-payments system. The agency expects to cut millions of dollars in bank transfer fees by switching to distributed ledgers based on the Ethereum digital currency network. WFP’s official site mentions that, as of January 2018, more than 100,000 people residing in camps have redeemed assistance through the system. And the next stage of the project will see an expansion to all 500,000 Syrian refugees in Jordan receiving support from the WFP.

And at least six other U.N. agencies — including the U.N. Office for Project Services (UNOPS), the U.N. Development Programme (UNDP), the U.N. Children’s Fund (UNICEF), U.N. Women, the U.N. High Commissioner for Refugees (UNHCR) and the U.N. Development Group (UNDG) — are now considering blockchain applications that could help support international assistance, particularly supply chain management tools, self-auditing of payments, identity management and data storage.

Of course, blockchain can’t solve all of the political problems that immigration policy suffers. It’s just a technological tool — albeit a very ambitious one — and it won’t teach the xenophobes compassion, and won’t guarantee refugees successful cultural integration or create well-paid, meaningful and socially protected job vacancies. It is useful for policy but can’t be a substitute for political will.

We also can’t simply brush off the controversial nature of the degree of control which blockchain promises to the host nations and humanitarian agencies. Decentralized ledger technology (DLT) undeniably takes pride in its crypto-anarchic and cypherpunk roots, and challenges the power we’ve given to governments and financial systems. Thus, we can’t question something illiberal in those biocontrol capacities that blockchain could help obtain for governmental immigration agencies.

Immigration probably won’t become a less problematic topic any time soon, as long as we have wars, hunger and inequality — not to mention the looming threats of climate change — and the lack of a final philosophical solution to the question of borders and national welfare. But what blockchain could do is to help refugees get more transparent and generous financial aid, save their vital documents and track the process of applications without any human mistakes. That sounds like a good package for a start.

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Survey: Millennial Women are Underrepresented in Crypto Investing

According to a recent study, almost twice as many millennial men invest in cryptocurrency as women.

A new study by crypto finance company Circle, published September 12, shows that millennial women invest in cryptocurrency at half the rate of men.

The survey collected answers from over 3,000 millennials, Gen Xers, and Baby Boomers in the U.S., covering such issues as investment, associated risks assessment, and attitudes toward emerging asset classes like crypto.

According to the poll, 25 percent of millennials said they are interested in purchasing digital currencies over the next 12 months, which sets them apart from the other generations by more than 10 percent. From a gender perspective, 17 percent of males across the three generations have plans to buy crypto, while only 8 percent of women share the same plans.

The survey found that 71 percent of millennials have invested less than $1,000 into digital currencies, of which 42 percent invested under $500 and 29 percent invested between $500–$1,000. 29 percent of millennials have invested over $1,001.

In regards to the risk associated with crypto investment, younger investors and males across the three generations turned out to be bolder, whereas Baby Boomers tend to be more cautious. 42 percent of millennial men reportedly called themselves “aggressive” investors, in comparison with 27 of millennial women, while among Gen Xers, 34 percent of men and 19 percent of women chose the same answer.

While women may still be underrepresented in the crypto space, market research from the London Block Exchange earlier this summer showed that the amount of women considering crypto investment had doubled since the start of the year. The poll also found that women are 50 percent less likely to suffer from “FOMO” (fear of missing out), and approach investing more strategically.

At the end of August, research service YouGov Omnibus conducted a crypto-related survey among millennials. The results of the study show that 79 percent of Americans are aware of at least one cryptocurrency. Millennials were almost equally split between being interested (48 percent) and not interested (50 percent) in cryptocurrencies.

34 percent of the respondents in the YouGov Omnibus survey do not think that crypto will become widely accepted, while millennials demonstrated the most positive approach to cryptocurrencies, with 44 percent of them predicting wider adoption.

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CFTC Chair: Crypto Needs ‘Do No Harm’ Approach That Regulators Gave the Early Internet

U.S. Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo has said that crypto needs a “do no harm” approach from regulators to flourish.

U.S. Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo has said that crypto needs a “do no harm” approach from regulators to flourish, in an interview at the annual Singapore Summit today, Friday 14.

Chairman Giancarlo said he took the precedent from the early days of the Internet, which he argued was able to develop and mature because of the government’s minimal interventions:

“I’m advocating the same approach to cryptocurrencies and all things having to do with this new digital revolution of markets, and of currencies, and of asset classes.”

Nonetheless, he distinguished between the CFTC’s short-term approach to tackling illicit activity on the crypto markets, and the agency’s longer-term – and potentially critically impactful – decisions on policy making for the nascent industry:

“When it comes to fraud and manipulation, we need to be strong. When it comes to policy making, I think we need to be slow and deliberate and well informed.”

The Chairman also rebutted accusations that the U.S. regulatory context for crypto has been slow to take clear shape, noting that the CFTC had presided over the “very first” regulated offerings of Bitcoin (BTC) futures, which launched on December 2017 on the stalwart American CME and CBOE exchanges.

The question of how cryptocurrencies should be defined and which agencies are responsible for their regulation have long been debated by U.S. regulators. A U.S. House hearing earlier this summer encapsulated the unique challenge posed by crypto, with speakers emphasizing that digital assets complicate the hard and fast distinctions of existing regulatory frameworks.

This year two federal judges have ruled on major cases that confirmed the applicability of federal commodity regulations to Bitcoin under the CFTC’s oversight, as well as – just this week – the applicability of U.S. securities laws for prosecuting crypto fraud allegations.

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CEO Behind GAW Miners, PayCoin Ponzi Scheme Sentenced to 21 Months in Prison

The CEO of now-defunct GAW Miners has been sentenced to 21 months in prison and ordered to pay $9.2 million in restitution to investors.

Homero Joshua Garza, the CEO of the now-defunct U.S. crypto firm GAW Miners, has been sentenced to 21 months in prison for defrauding investors, local news agency Hartford Business reports Thursday, September 13.

Garza received the verdict in the Hartford federal court, following his guilty plea to a wire fraud charge related to creating and selling a scamcoin dubbed PayCoin (XPY).

Instead of serving the original 20 year sentence, Garza will report to prison on January 4, 2019 and be jailed until 2021, with an additional three years of supervised release, including six months in home detention.

In addition to prison time, the former CEO of GAW Miners will have to repay a $9.2 million restitution to investors, which is the approximate amount of financial damage wrought by the nine-month crypto scam.

Founded in 2014, Bloomfield-based GAW Miners was a firm that specialized in manufacturing, supplying and selling special hardware for crypto mining. The company was shut down in 2015 following allegations of operating as a Ponzi scheme, which was followed by a lawsuit in 2016.

Created by GAW Miners developers, the PayCoin cloud mining cryptocurrency was launched in 2014. The digital currency was based on the SHA-256 algorithm and both proof-of-work (PoW) and proof-of-stake (PoS) protocols.

While GAW Miners had reportedly “guaranteed” investors a $20 floor price for PayCoin, the highest XPY price was $15.92 instead, according to CoinMarketCap.

In late August, the alleged former owner of crypto exchange BTC-e Alexander Vinnik was indicted and subjected to a “fake” interrogation by French prosecutors in a Greek Court. Following a protracted legal battle and several lower court rulings, the Greek Supreme Court eventually ruled to extradite Vinnik to Russia.

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US: Blockchain Security Co. BitGo Gets Regulator’s Green Light to Become Crypto Custodian

American crypto security startup BitGo has received a state trust company charter from the South Dakota Division of Banking, making it a qualified custodian for crypto.

American crypto wallet and blockchain security firm BitGo has received a state trust company charter from the South Dakota Division of Banking, making it a qualified custodian for crypto, CNBC reports September 13.

By creating its trust company, California-based BitGo will now be subject to regulatory scrutiny that encompasses know-your-customer (KYC) and anti-money-laundering (AML) checks and the filing of financial audits and monthly disclosures.

As it launches its regulated crypto custody offering, BitGo co-founder and CEO Mike Belshe told CNBC that:

“This is the missing piece for infrastructure — it’s a treacherous environment today. Hedge funds need it, family offices need it, they can’t participate in digital currency until they have a place to store it that’s regulated.”

As previously reported, the narrative that custody is one of the chief remaining obstacles for the crypto market to “mature” and draw institutional investment is widely shared. CNBC interviewed Monica Sommerville of consulting firm TABB Group, who noted that:

“Institutional investors are very interested in finding a solution, but they haven’t seen one that they think is perfect for various reasons. They still self-custody, and manage all their own keys.”

Somerville added that she worked with one family office who reportedly stores clients’ crypto in “baby carrot”-sized crypto hardware wallets organized in binders until “a better alternative” is found.

While individual retail investors have the relatively secure option of storing crypto themselves in offline cold storage, family offices and hedge funds are required by the U.S. Securities and Exchange Commission (SEC) to use a third-party regulated institution to safely store assets if they are worth over $150 million, as CNBC reports.

Alongside BitGo, this year has seen major U.S. wallet and exchange service provider Coinbase as well as Japan’s Nomura Bank launch their own custody solutions. As part of its forthcoming Bakkt offering, New York Stock Exchange (NYSE) operator ICE will also bring a new major trusted custodian solution to the crypto space.

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