PRIMER: regulating cryptocurrency exchanges – ProQuest
Copyright Euromoney Institutional Investor PLC Feb 28, 2019
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Exchanges have been blighted with negative publicity recently, but improvements have been made in recent years. Here crypto firms and lawyers explain the back story
It seems there has been nothing but bad news for cryptocurrency exchanges recently.
Amid the price collapse, a number of high-profile incidents have cast further doubt on the stability of the market. Most notably, the death of Gerry Cotton, chief executive of Canadian exchange QuadrigaCX, which allegedly resulted in $145 million of investors’ money being frozen in inaccessible cold wallets. Conspiracy theories have naturally followed.
This isn’t the only case to concern potential investors. In 2014 Mt. Gox, one of the first bitcoin exchanges, shut down its operations and filed for bankruptcy. At the time, the exchange handled 70% of all bitcoin transactions, and investors are still unclear as to the state of their investment.
The plethora of hacks on exchanges around the world has had a big impact on prices, contributing to bitcoin’s collapse. Its price is now down from $19,700 in December 2017 to $2,867 at the time of writing. In September 2018, Japanese exchange Zaif was infiltrated by hackers who stole almost $60 million worth of cryptocurrency.
These high-profile incidents have led many to believe that new cryptocurrency-specific regulation is required. It is said that doing so would help protect retail investors, as well as drive out some of the less scrupulous market players.
“Regulation defining minimum standards of risk management framework would address cyber risks and information security,” said a vice president at a regtech firm. “Doing so is important to mitigate operational risks and enhance customer protection.”
See also: Coinbase CEO says crypto-specific regulation is necessary
What is regulators’ current position?
Cryptocurrency exchanges are a digital marketplace where users can trade digital cryptocurrencies.
One of the major difficulties for regulators is defining precisely what cryptocurrencies are,…
- Coinbase Launches OmiseGo (OMG) for Retail Traders and Mobile Apps
- Cryptocurrency Exchange Plans Extension in Africa
- Crypto.com Card Program Receives Green Light for Canada
- Construction Expert Breezecoin (BRZE) Expands Further, Listed on CoinTiger Crypto Exchange
- Pressure Piles Up on BitMEX as Recent Outage Exposes Network Holes
Coinbase Launches OmiseGo (OMG) for Retail Traders and Mobile Apps
Coinbase.com has launched support for OmiseGo (OMG) as the major American crypto exchange and wallet provider continues to ramp up the number of altcoins available for trading. The new coin is now available for retail investors through the company’s Android and iOS apps.
Announced last week, Coinbase has enabled OmiseGo trading on the exchange’s professional platform that caters to more experienced traders, Coinbase Pro. Effective May 18, Coinbase Pro were able to make OMG transfers and will be allowed soon to buy and sell OMG with the US dollar and Bitcoin.
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The announcement triggered a 31 surge in the price of OMG, which is currently trading at $1.53, according to the price aggregator CoinMarketCap. The latest member of Coinbase’s supported coins also reacted to the news last week when it was added to the institutional venue, rising nearly over 20 percent. The trade volume over the past 24 hours showed growth, with a reported value of $347 million.
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OmiseGO (OMG) is an Ethereum-based financial network owned by Asian payments service Omise and has Ethereum co-founder Vitalik Buterin as an advisor. The public OMG network and decentralized exchange facilitate real-time, peer-to-peer value exchange of fiat and crypto assets. Through the OMG wallet SDK, users can build or use compatible wallets to integrate with the network.
The announcement notes that OMG will be available to customers in all supported jurisdictions with the exception of the New York State due to their tighter regulations.
Coinbase said earlier it is working with local banks and regulators to make these new cryptocurrencies available for its customers in as many jurisdictions as possible, saying the process often requires “significant exploratory work from both a technical and compliance standpoint.”
While other exchanges offer a more extensive selection of cryptocurrencies to trade, Coinbase has elected to proceed cautiously while regulators evaluate the legal status of the new assets. However, the company has had a string of recent announcements in a major push to attract crypto traders and grow its user base. At time of publishing, Coinbase retail platforms list 22 cryptocurrencies, while Coinbase Pro supports 28 cryptocurrencies.
Author: Aziz Abdel-Qader
Cryptocurrency Exchange Plans Extension in Africa
Naspers Ltd. is a company of global internet group. The said global internet group is one of the major technology investors in the world.
Naspers Ltd. backs Luno. Luno is a cryptocurrency platform that deals with Bitcoin, Ethereum, XRP and Litcoin.
Luno is in talks of expanding in Kenya and Ghana to extend its African footprints. This talk rose because of the 99% rallies of Bitcoin in the past two months of coronavirus pandemic.
The general manager of Luno is Marius Reitz. The general manager said that Luno has profound interest in the markets of Ghana and Kenya. This was the reason why Ghana and Kenya are both high in their list.
He also added through the phone that the coronavirus outbreak has been beneficial in terms of transaction doubling exchanges. On the other side, the outbreak made it harder to travel to talk to the key stakeholders.
Luno, which trades Bitcoin, Ehtereum and Litcoin has recently stepped beyond South Africa and Nigeria. Reitz said that Luno starts to operate in Zambia and Uganda. Currently, the South African company has 400 people working for them. This number of 400 people are scattered across seven offices in Africa, Asia and Europe.
In June 2019, planned to hire 150 new employees by the end of the year. The purpose of the mentioned hiring was to boost Luno’s software development team. This makes Luno’s headcount of more than 400 across seven offices in three continents.
Reitz on the same year that the company is looking for business clients. As well as investors for the company. The general manager also said to add more cryptocurrencies in Luno’s portfolio.
Most of the new hired employee will be based in Johannesburg. Other new hires will be responsible for security and compliance. The new main Asian market of the crypto exchange platform is currently in Malaysia.
The crypto exchange platform was founded seven years ago. At present, it has four million users. The coronavirus pandemic cause the economies around the world to shut down. The impact of the coronavirus pandemic to the economies added about a million customers to Luno.
The general manager stated that people who looks for digital ways transaction increase the activity on the market. Adding to the digital way to transact is the limiting of human contact due to coronavirus.
Luno is one of the dozens of platforms in cryptocurrency that emerged around the world in response to the increasing demand of the likes of Bitcoin. South Africa’s investors are also using the digital currency as a barrier against price increase this year. South African currency is rand.
The South African currency experience a 23% depreciation against the US dollar this year. As of June 2019, rand become one of the world’s most volatile currencies. The currency has weakened more than 40% since 2013.
In 2015, Luno drawn $3 million in funding. Cape Town-based technology investors, Naspers, led the said funding.
Naspers is the biggest company in Africa. Naspers, Balderton Capital UK LLP, Rand Merchant Investment Holdings Ltd. together with Venture Capital and Digital Currency Group all own minority stakes of below 20%.
Crypto.com Card Program Receives Green Light for Canada
Reservations for the MCO Visa Card may be made using the Crypto.com App which includes a three-minute customer onboarding process including ID verification. Using the App, customers are able to manage their card usage, transactions, and freeze or unfreeze their card with a single tap. The App also allows users to securely buy, sell, store, send, and track cryptocurrencies – allowing users to spend fiat currency converted from cryptocurrency without currency exchange fees.
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Notes: All MCO Visa Card transactions are denominated in fiat currency. All cryptocurrency exchanges to fiat currency take place before users may use their MCO Visa Card to transact on the Visa network.
The MCO Prepaid Visa Card is issued by DC Bank. Use of the Card is subject to the terms and conditions of the applicable Cardholder Agreement and fee schedule, if any. ATM bank fees may apply.
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Construction Expert Breezecoin (BRZE) Expands Further, Listed on CoinTiger Crypto Exchange
UK, May 22, 2020 – ( JCN Newswire ) – Breezecoin (BRZE), a real estate-backed cryptocurrency issued by Breeze de Mar, which is a real estate company with over 60 years of experience in the field, will be listed on the cryptocurrency exchange CoinTiger on May 22, 2020 (UTC). This is the second listing of Breezecoin following its recent one on Bithumb Global in late April.
Breeze de Mar is a UK-based real estate investment company and the successor of Akpinar Group, which is one of the rooted construction companies in Germany and has been serving the construction and real estate sectors on building commercial and residential complexes, as well as manufacturing areas since 1960.
Unlike most of the other cryptocurrencies, Breezecoin is tied to physical assets, namely real estate assets. Breezecoin is a currency used within the Breeze de Mar resort ecosystem. Customers can pay for services, food and beverages, and even buy a property with Breezecoin in Breeze de Mar locations.
“We’re very excited about the listing of Breezecoin on a reputable Asian cryptocurrency exchange. Our plan is to expand further and establish footprints in more foreign markets. We’re committed to be the first construction company to leverage the technology of blockchain and bring an impact to our industry,” said Harald Kendzia, CEO of Breezecoin.
The deposits of Breezecoin will be available from 08:00 May 21, 2020 (UTC). Trading will open at 08:00 May 22, 2020 (UTC), while withdrawals will open at 08:00 May 25, 2020 (UTC). Customers at CoinTiger can also participate in the BRZE trading contest to win up to 2,000 BRZE.
Breezecoin (BRZE) is a real estate-backed cryptocurrency issued by Breeze de Mar, a brand owned by a UK-based real estate investment company Breeze de Mar LTD.
About Breeze de Mar
Breeze de Mar is the successor of Akpinar Group which is one of the rooted construction companies in Germany and has been serving the construction and real estate sectors on building commercial and residential complexes, manufacturing areas since 1960.
CoinTiger is a global digital asset exchange based in Singapore. CoinTiger boasts over 2.8 million registered users across 40+ countries, and has more than 120,000 daily active users. In addition to being a prominent exchange platform, CoinTiger also provides financial services, consulting, and funding to support the growth of promising blockchain projects. CoinTiger consistently ranks as one of the top 30 global exchanges by trading volume.
Pressure Piles Up on BitMEX as Recent Outage Exposes Network Holes
Once branded a “Bitcoin casino,” BitMEX has plunged into a series of crises over the last few years. The crypto exchange found itself trending on Twitter in the US recently because of the recent shutdown. BitMEX announced that its trading engine went offline for over an hour because of an incident, which the exchange identified as a “major outage.”After some investigation, the exchange later announced that that platform restored its online operations.
The exchange announced that all funds were safe, and no liquidations happened during the downtime. Once the platform resumed its operation at full capacity, the exchange said that full postmortem would be conducted and released to the public within the next few days.
Recent outage exposes BitMEX’s network holes
Such outage of BitMEX’s trading engine is the latest in a series of negative circumstances facing the exchange. Currently, as Bitcoin price hits $10,000, the major outage has prompted warnings that the exchange is becoming increasingly unreliable. The outage left customers unable to access their funds.
Closely-watched crypto and Bitcoin analyst Scott Melker said that he has been warning people about BitMEX for nearly three years now, saying BitMEX is a “horrible” exchange.
Another Bitcoin trader stated, “I just do not understand why people still trade there.”
In recent months, crypto and Bitcoin exchanges across the globe have experienced increasing new user signups and surging demand partly due to lockdown measures put in place to slow down the spread of coronavirus pandemic.
The rising demand is putting the stability of some Bitcoin exchanges into tests, with Coinbase, the largest US cryptocurrency exchange, went offline as Bitcoin price crashes earlier this month.
Jim Nevotti, the president at software provider Sterling Trading Tech, said that recent outages experienced by some crypto and Bitcoin exchanges have exposed fault lines in their underlying infrastructure.
BitMEX’s market share has been eroded by other crypto exchanges expanding their crypto and Bitcoin derivatives offerings. But BitMEX’s problems have also caused users to seek alternatives.
In March, a sudden decline in the Bitcoin price to fall under $4,000 was caused by BitMEX before the crypto exchange was closed for maintenance.
In the previous year, BitMEX sparked panic amongst investors and traders after accidentally exposing thousands of its customers’ emails – with the exchange’s Twitter account compromised shortly after.
The latest outage comes just a few days BitMEX was hit with a lawsuit on May 18. The lawsuit accused the exchange of having engaged in multiple illegal activities, including wire fraud, money laundering, and market manipulation.
The lawsuit also reported that a full 15% of BitMEX’s crypto trades in 2019 came from US-based traders despite the exchange not having the appropriate license to allow such kind of trading.
The crypto exchange disputes the allegations, with its spokesperson said that the exchange would deal with the complaint through a normal legal procedure and is completely confident that the court would make a fair ruling.
Recently the exchange was forced to restrict access to users in Japan because of increased crypto regulations enforced by the nation’s Financial Services Agency (FSA).
UK’s financial watchdog raises the alarm on BitMEX being unauthorized
Recently, the UK’s financial regulator, the Financial Conduct Authority (FCA), warned local consumers about the operations of BitMEX. The independent financial regulator announced that the crypto exchange has been targeting UK residents without approval or obtaining permission to offer services. The agency confirmed that it holds information that proves that the cryptocurrency exchange had been illegally conducting activities that must be regulated and require approval from the regulator. In other words, the financial watchdog stated that BitMEX was operating in the UK without being given the green light by the regulator. Now it remains to see how BitMEX would address the challenges highlighted above.
Author: Nicholas Otieno