Ethereum Foundation Advisor: SEC Lacks Fundamental Understanding of Core Nature of Crypto

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William Mougayar, advisor to the Ethereum Foundation, claims that the SEC is “trying to fit a square peg into a round hole” regarding crypto regulation.

William Mougayar, author of “The Business Blockchain” and advisor to the Ethereum Foundation, said in an interview with CNBC May 18, that regulators lack a foundational understanding of cryptocurrencies.

Speaking to CNBC, Mougayar explained that in an attempt to regulate digital currencies, the US Securities and Exchange Commission (SEC) lacks an understanding of the core nature of the industry, trying to apply a one-size-fits-all approach:

“The SEC is still trying to educate themselves, not just educate the public … Right now they are still grappling with it and for them the box that they play in is that they see all these cryptocurrencies as a security. But in reality not everything is a security. They want everything to play in that box.”

Answering a question about whether the SEC wants to keep digital currency classified as a security, specifically so they can regulate it, Mougayar responded:

“Exactly. That’s their box, the box they play in. They see everything as a security and they are trying to fit a square peg into a round hole, but not everything is a security right now.”

Regarding Twitter CEO Jack Dorsey’s recent statement that Bitcoin (BTC) will be the native currency of the Internet, Mougayar said that he considers BTC one of the native currencies, but “it’s not going to be the only one, there will be others.”

Mougayar stated that Ethereum (ETH) will “definitely” overtake BTC because it has the “largest ecosystem of developers and start-ups, and venture capital, and all kinds of support going around it.” He said:

“What’s important is not just the technology itself – it’s who is using it.”

Mougayar further explained that currently, cryptocurrencies are underused in their capacity as utilities with real use cases, where they would serve a real purpose and not merely be speculatory instruments. He pointed out that 53 percent of Ethereum transactions are on smart contracts. According to Mougayar this shows that it is “not just as a currency, [but] a utility.”

Recently, the Office of Investor Education and Advocacy at the SEC launched a fake initial coin offering (ICO) website, the goal of which is to increase awareness of the typical warning signs of scam ICOs and to promote investor education. According to the SEC Chairman Jay Clayton, the regulator supports the adoption of new technologies, but it also encourages investors to educate themselves and understand what fraudulent offers look like.

Coinbase Aims to Obtain Banking Licenses

Altcoin News Balaji Srinivasa

Coinbase, the largest U.S. Bitcoin exchange, has initiated exploratory conversations with financial regulators regarding banking licenses. Coinbase and Ivy Koin Meet with U.S. Regulators About Banking Licenses Coinbase is now intent on learning how to obtain banking licenses. The Wall Street Journal reports that, according to undisclosed sources, the exchange held conversations with officials from the U.S Office of the Controller of the Currency in early 2018. According to the report: Coinbase Inc. and another cryptocurrency

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Iran and Russia Discuss Transacting in Crypto to Avoid International Sanctions

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Both Iran and Russia are reportedly looking into using cryptocurrency as a way around Western sanctions

Iran and Russia could start using cryptocurrencies to avoid Western sanctions, Russian news portal RBC reported yesterday, May 17.

Mohammad Reza Pourebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs, referred to cryptocurrencies as a promising way for both countries to avoid US dollar transactions, as well as a possible replacement of the SWIFT interbank payment system.

At a meeting with Dmitry Mezentsev, the Chair of the Federation Council Committee on Economic Policy, Pourebrahimi said that they have “engaged the Central Bank of Iran to start developing proposals for the use of cryptocurrency.”

Pourebrahimi added that he discussed this topic in the State Duma’s Committee on Economic Policy the day before and that Iran had established cooperation with Russia on this issue:

“They [Russia] share our opinion. We said that if we manage to move this work forward, then we will be the first countries that use cryptocurrency in the exchange of goods.”

In turn, Mezentsev noted that “interbank relations between our countries should be of great importance” against the backdrop of international sanctions currently in place against both Russia and Iran. The meeting of the interbank working group on financial and interbank cooperation will be held in Tehran on July 5 of this year, RBC reports.

Last week, Pourebrahimi had reported that without access to the international banking system, Iranian citizens have so far succeeded in siphoning a staggering $2.5 bln out of the country in crypto.

Venezuela, another country facing international sanctions, recently released its own oil-backed cryptocurrency, the Petro, in a move that some critics saw as an illegal way to enter the international financial markets. After the Petro’s launch, both Turkey and Iran had expressed interest in releasing their own state-backed cryptocurrencies as well, with Russia’s own CryptoRuble reportedly set to launch in mid-2019.

HUMENA™ Club Launches Pre-ICO With Continuous Buy Back Program Limiting The Risk For Potential ICO Participants

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While most ICO’s sell tokens and forget about their participants afterward, HUMENA has introduced a program to buy back tokens in order to “feed” their ecosystem. Millions of utility token users constitute a very large addressable, repeatable and predictable market which allows for the continuous buyback of tokens Post-ICO. Herndon, VA – May 18th, 2018 – HUMENA, a cyber-secure Blockchain-based system for synchronous meditation, prayer, and entertainment to amplify human performance and promote mental & physical wellness

The post HUMENA™ Club Launches Pre-ICO With Continuous Buy Back Program Limiting The Risk For Potential ICO Participants appeared first on Bitcoinist.com.

New Steps of Adoption: Dutch National Blockchain Research Agenda

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The Dutch government’s foray into blockchain enterprise could represent a third prong to mainstream adoption following banks and major corporations.

On May 8, 2018 it was reported that the Dutch Ministry of Economic Affairs and Climate Policy had created a unit tasked with researching the further development of blockchain across technology.

This could represent a major step forward for the adoption and application of blockchain technology as governments are not only taking the new technology seriously with their regulatory work on the cryptocurrency side of things, but now they are actively looking into the benefits of the technology.

Blockchain technology is now on the cusp of a new wave of adoption that is running concurrently, but separately from cryptocurrencies.

The banks are looking as to how blockchain can aid their advancement, racing to be the first-to-market in blockchain and cryptocurrency. Major corporations ar also following suit with their own blockchain products as their own race rages with the likes of Amazon, Microsoft, IBM, and Oracle all trying to outdo one another.

The Dutch blockchain research agenda

The Dutch government’s move into blockchain and viewing its potential was delivered by Rob van Gijzel, ambassador of the Dutch Blockchain Coalition, who presented the national research agenda which was commissioned by the Dutch ministry.

The research agenda will look at three key areas in order to address whether blockchain can be adapted nationwide for the benefit of the country with its potential.

Firstly, they are looking to determine if the trust-less nature of blockchain can be trusted. They want to know if blockchain technology can truly replace legal and social institutions which require trust in individuals and organizations.

Secondly, the government is looking for sustainability. They will be analyzing energy consumption costs, scalability, and resilience against power concentration or hostile takeovers.

Finally, it needs to be determined how the blockchain will be managed and governed.

Because blockchain technology has potentially far reaching implications in its application, governments could use it to streamline and cut costs in varying aspects of society’s needs.

However, like all sectors currently delving into blockchain’s potential, there needs to be a level of experimentation to see if it is indeed suitable and successful enough to do what it says it can.

It follows that if governments can find a path towards using blockchain successfully, they could well be a large sector that could speed up adoption of the revolutionary technology.

Following banks and businesses

While there are less corporate pressures and capitalist competition at the government level, there is still an obligation and a focus to conduct government business efficiently as part of their mandate towards their citizens. That is why it is understandable that the Dutch government, among others, are looking into new competitive technologies as blockchain.

However, their drive to expand the possibilities of the technology could be considered the latest push in adoption, making it the third prong, following from banks and businesses who are in an ‘arms race’ to be first-to-market with blockchain products.

Looking at the private sector, Banks are not only rushing to try and get crypto trading desks out to their customers, they are also looking at what blockchain technology can do internally for their own processes. Strong banking rivals Morgan Stanley and Goldman Sachs are building and experimenting with blockchain to get a working product out to market first – a long way from when the likes of Jamie Dimon and others were calling it a fraud.

Even Microsoft, Amazon, and other major corporations – who are traditionally centralized powerhouses – are looking to branch out into the decentralized world and offer products that go strongly against the corporate mandate of capitalization and monopoly. There is building evidence from the banking sector and corporations that blockchain can be the next wave of technology so it is important to be ahead of the curve, hence the competition between these other sectors.

Government interest

When governments begin looking at new ways in which to conduct business, they do not have the same corporate competition as these organizations in the private sector, but the push and drive from those sectors must be noticed. Governments, such as the Dutch, with their research agenda, show that even these leaders of countries are also looking at the potential blockchain can bring with its promises of transparency, efficiency and cost-effectiveness.

The Dutch, however, are not the only ones that have started looking into what the blockchain can do at this level. There are a lot of driving forces in different nations wanting their governments to take note of the future.

For example, the UK government has heard British MPs raising the question of the role nation states have in setting frameworks for decentralized, cross-border systems that blockchains enable. Furthermore, and more directed at the cryptocurrency side of things, the UK also set up a cryptocurrency task force in order to determine the best route for regulation.

Even China, with its hard-line approach to Bitcoin, is still noticing that blockchain technology can have an important role to play in the future. On May 10, the Chinese government released ‘blockchain standards’ in order to advance nationwide development of the blockchain industry by the end of 2019.

South Africa has set up a ‘sandbox’ through its central bank in which certain companies and businesses can operate with less stringent regulations in order to grow the blockchain environment in the African country with the government keeping a close eye on what emerges from it.

Another avenue of adoption

Considering that Bitcoin, cryptocurrencies, and even blockchain technology were being scoffed at no more than a year ago as ‘rat poison’, and ‘pixie-dust’, the way in which it is being viewed a few months down the line is a staggering turnaround.

Banks, once seen as Bitcoin’s biggest enemy, are now hiring blockchain experts by the dozens; corporations that have always traditionally been at the top of their game are now looking to breakdown and decentralize because they know that is where the next wave of industry will be.

Now it is governments who are legitimizing the power of blockchain as their best and brightest explore this latest technology, and implement its uses to make society more efficient, streamlined, and advanced.

Indian Supreme Court Upholds Central Bank’s Crypto Dealings Ban Until July Hearing

local sources report. The Supreme Court of India has blocked all further petitions in High Courts against the central bank’s block on crypto dealings

The Supreme Court of India has blocked all further petitions in High Courts against the central bank’s block on crypto dealings, local sources report.

The Supreme Court of India has decided that no petitions can be filed in any High Court of India against the Reserve Bank of India’s (RBI) April 6 circular about ending all dealings with cryptocurrency, according to local news outlet Inc42.

Citing a Twitter post May 17 from a team of Indian lawyers involved in crypto regulatory analysis, Inc42 reports that the Supreme Court has refused to pause RBI’s crypto ban and has ruled that no further petitions against RBI’s ban can be filed in any High Court. The Supreme Court has also reportedly set the next hearing date for the existing petitions for July 20, 2018. 

Last week, the Supreme Court declined to grant an injunction sought by 11 different crypto-related businesses against the RBI decision, with the new court case set for May 17. The legal team’s tweet adds, as of the Supreme Courts May 17 decision, any petitions already pending against the RBI’s anti-crypto circular will be transferred to the Supreme Court.

At the end of April, the High Court of Delhi also issued a notice to the RBI, the Ministry of Finance, and the Goods and Services Tax (GST) Council that alleged the decision to end crypto dealings violated the constitution.

Public outcry against the ban included an online petition for “Mak[ing] India at the forefront of Blockchain Applications Revolution” that has garnered over 44,000 signatures. American billionaire tech investor Tim Draper referred to the ban as a “huge mistake” that could cause a brain drain in the country.

Despite its no tolerance stance toward decentralized cryptocurrencies, RBI is reportedly considering issuing its own central bank digital currency (CBDC). RBI has formed an inter-departmental group to investigate the potential advantages of a CBDC.

Colombia: Newly Formed Blockchain Association Aims for Dialogue With Government

Blockchain Colombia

Crypto businesses in Colombia launched a local Blockchain Association this week, aiming to support the industry and inform the government on the technology.

Six public and private Colombian companies have joined forces to launch the Colombia Blockchain Association, Spanish news agency EFE reported May 17. The Association describes itself as aiming to support the country’s crypto and blockchain ecosystems and to advise the national government on matters concerning regulation of the crypto sphere.

The companies involved are Buda Colombia, Bitcoin Colombia, Cajero.co, IntiColombia, Panda Group and RSK. Representatives from each, as well as Mauricio Tovar – co-director of  inTIColombia, a research group of the National University of Colombia – reportedly attended an event this Wednesday in Bogota to discuss the agenda of the new organization.

As Diario Bitcoin reports, Tovar spoke out at the event against an “abusive” traditional financial sector that encumbers Colombians with unnecessary costs. Citizens “distrust” the current system, he suggested. He said the new association should act as an interlocutor to the state in order to encourage the “informed” adoption of new financial technologies, without compromising the decentralized principles of blockchain, as well as to prevent stifling overregulation.

Buda CEO Alejandro Beltrán contributed his perspective on the potential future of crypto across Latin America, noting that there are estimated to be over 200 mln unbanked citizens in the continent who could be served by a crypto economy. He also noted how complicated it currently is for migrants to send remittances back to their countries of origin using fiat money.

Beyond financial applications, event participants reportedly discussed the use of blockchain in other fields, including information security, intellectual property, the energy sector, electoral systems and real estate registers.

Last year, the UN’s Economic Commission for Latin America and the Caribbean (ECLAC) released a report stating that blockchain technology could help address problems facing the ailing banking sector across the continent. Countries in the region with underbanked populations, such as Venezuela, have been encouraging their citizens to educate themselves about crypto. Under pressure from international sanctions, Venezuela launched an oil-backed national cryptocurrency, the Petro, earlier this year.

Chinese Gov’t Study Detects 421 Fake Cryptos, Outlines Key Features of Fraud

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China’s Ministry of Industry and IT says it has detected 421 fake cryptos, identifying key signs of fraudulent tokens in its recent report.

A government-led study in China has detected 421 fake cryptocurrencies, according to a report published today, May 18.

IFCERT, a national committee of internet financial security experts initiated by China’s Ministry of Industry and IT, has warned of the dangers of fraud in the crypto space. The committee’s report notes that as of April, over 60% of the 421 detected fake cryptos are run from overseas servers, making them “difficult to find and to track.”

IFCERT’s ongoing monitoring identified three key features of fraudulent digital currency profiles.

Firstly, their reliance on a so-called ‘pyramid scheme’ operational model, in which investors are first compelled to make a payment, and then promised returns on the basis that they enroll others in the scheme.

The second feature of a fraud crypto, according to IFCERT, is the absence of open-source code of the fake digital asset, allowing its creators to dupe investors into an illusion of skyrocketing growth by artificially splitting the tokens to create an impression of proliferating rewards. The fraudsters claim that the more tokens are generated, the more wealth increases, “only rising without falling.”

Lastly, according to IFCERT, given that bogus coins cannot be traded on legitimate crypto exchanges, they are largely traded through over-the-counter deals, or even on transient phony platforms. With no transparency, scammers can manipulate apparent price surges, while at the same time preventing investors from withdrawing funds in order to benefit from such ‘spikes.’

The report concludes that such virtual currency scams are cases of “illegal fundraising,” with a high risk that their creators will disappear and wreak huge losses for investors, left unable to defend their rights.

The features of a fraud cryptocurrency identified by the IFCERT in their recent study are  strikingly similar to those identified by the U.S. Securities and Exchange Commission’s (SEC). In a recent campaign aimed to educate investors, the U.S. SEC created a website for a fake Initial Coin Offering (ICO) that went live just two days ago. The SEC’s mock HoweyCoins.com lures investors with a “too good to be true investment opportunity” – using the very “red flags” the organization claims to have identified in the majority of fraudulent ICOs – and redirects those who attempt to purchase the ersatz tokens to an educationally-oriented page on the SEC’s own site.

Switzerland First in Ranking of Top 10 Most Blockchain-Friendly Countries in Europe

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BlockShow’s rankings of the best European countries for opening a blockchain company puts Switzerland at the top of the list.

Switzerland is ranked number one in a list of the top ten European countries for starting a blockchain company, according to a study released by blockchain conference BlockShow Europe 2018.

In the list of best countries for starting a blockchain company, Gibraltar and Malta follow Switzerland in second and third respectively. The study consisted of 48 European countries that were examined for rankings by Initial Coin Offering (ICO) regulations, regulations on crypto as a payment service, and taxation frameworks for crypto.

Switzerland is known as a crypto-friendly nation due to both its establishment of a virtual currency hub, “crypto valley,” in Zug and its status as a tax-free haven for crypto investors. Gibraltar has reportedly attracted 200 ICOs before the planned launch of its Gibraltar Blockchain Exchange (GBX), and Malta, the “blockchain island,” has welcomed major crypto exchanges Binance and OKEx recently.

BlockShow also released a poll this week on blockchain-based app Polys that allows users to vote on the leading women and companies in the EU blockchain space. The winners of the poll will be announced during the BlockShow conference at the end of this month in Berlin.

At the beginning of February, the European Commission announced the launch of the EU Blockchain Observatory and Forum as part of their aim to unite the economy around blockchain. However, more recently, newly approved EU privacy laws – which come into effect on May 25 – arguably conflict with the decentralized nature of blockchain technology.

Malta Partners With Blockchain Startup to Improve Public Transportation

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Malta has partnered with middleware blockchain startup Omnitude to create a transport and logistics platform to improve transport reliability.

The Transport Minister of Malta has announced a partnership with UK middleware blockchain startup Omnitude to improve the Maltese Public Transport Service, local news outlet The Malta Independent reported May 17.

Malta has expressed the aim of becoming the “Blockchain island,” a goal helped by major crypto exchange Binance – the world’s second largest crypto exchange by trading volume, according to CoinMarketCap  – announcing plans this March to open an office in the country. In April, OKEx, currently the world’s largest crypto exchange by trading volume, also announced their intention of expanding to Malta.

Malta’s Transport Minister Ian Borg said that the partnership between Omnitude and the Maltese transport system to create a transport and logistics blockchain platform will “develop overall improvements in transport reliability.”

CEO and founder of Omnitude Chris Painter said that they “look forward to working with the Maltese Government to explore the capabilities of Omnitude’s broad based blockchain ecosystem:”

“Governments around the world are beginning to see the potential for blockchain to reduce costs and streamline services. Malta has an extremely progressive government and we’re excited about the potential this partnership brings.”

In mid-April, the Malta Financial Services Authority (MFSA) released a consultation paper on the possible introduction of a “Financial Instrument Test” that would legally define virtual tokens in another step towards regulatory clarity for blockchain and crypto projects.