Zář 03

Int’l Finance Watchdog Appoints Japanese Cryptocurrency Regulator

The Financial Stability Board (FSB) has appointed Ryozo Himino, Japan’s top cryptocurrency regulator, as the new head of its Standing Committee on Supervisory and Regulatory Cooperation.

FSA Cryptocurrency Regulator Joins FSB

In a press statement issued on Monday (September 2, 2019), the international financial system watchdog announced Himino’s appointment.

According to the press statement, the Japanese Financial Services Agency (FSA) executive will serve a two-year term starting from September 2019.

Himino is taking over from Norman Chan — the head of Hong Kong’s Monetary Authority. For the FSB, Himino’s appointment is based on his experience in international policy regulatory matters, especially with respect to cryptocurrency.

As part of the FSA, Himino reportedly played a significant role in shaping Japan’s approach to regulating cryptocurrency exchanges. The FSA was the first financial regulator of a major economy to introduce clear-cut regulations for the industry.

Many of these regulatory policies have centered around the safe custody of customer funds by exchange platforms.

Despite these efforts, Japanese exchanges continue to be a target for hackers with many high-profile cases including the Coincheck affair, where more than $500 million in NEM tokens were stolen.

Himino has also been at the forefront of Japan’s efforts to galvanize the G20 in adopting streamlined cryptocurrency regulatory policies. Robust anti-money laundering (AML) laws are a major focus on the considerations around crypto governance.

The intergovernmental Financial Action Task Force (FATF) has also released guidelines on how countries should oversee their local crypto industries from an AML compliance point of view.

As at the end of 2018, cryptocurrency-related money laundering accounted for less than 2% of total money laundering cases in Japan.

Focus on Facebook’s Libra

According to local Japanese media outlet Excite News, Himino’s new position at the FSB will focus on the regulation of Facebook’s proposed Libra cryptocurrency.

Reports indicate that the FSB wants Himino to leverage his experience in drafting robust laws that will govern Libra’s operations in the 24 nations that follow its guidelines.

The Libra project continues to attract heavy criticisms from stakeholders in the mainstream finance sphere.

On Monday, Yves Mersch, executive board member of the European Central Bank (ECB) described the Libra project as the “siren call of treacherous promises.” According to Mersch, Facebook’s “cartel-like” Libra will severely hamper the ECB’s ability to determine monetary policy in the region.

What do you think Himino’s appointment will do for the state of cryptocurrency regulations on the international stage? Let us know in the comments below.

Images via Shutterstock

The Rundown

Bře 27

Anti-Bitcoin Banks Paid Over $243 Billion in Fines Since the Financial Crisis

Banks are quick to label Bitcoin the money of criminals. But banks fines since the financial crisis have totaled over $243 billion. Bitcoin fines? Zero. Isn’t it time for society to open its eyes?

Banks Don’t Want to Work with Cryptocurrency Companies

I tried to make a small purchase from a well-known cryptocurrency exchange earlier this week. The action was immediately blocked and I had to call my bank over possible fraud. They kept me on hold for 11 minutes. By the time I had liberated my card, I no longer had time to carry out the transaction.

This is one story in countless others from small-time cryptocurrency users and individual Bitcoin HODLers. The plight of cryptocurrency companies trying to open bank accounts is much, much worse.

Take Lamassu, the world’s oldest manufacturer of Bitcoin ATMs. After one year of being unbanked, the company finally upped sticks and moved to Switzerland where they were at last granted access to a bank account. Again, their story is the tip of the iceberg.

Why won’t banks work with cryptocurrency companies? Most point to lack of regulation and lax AML controls. But with $243 billion in fines over questionable dirty money practices in just one decade, it would seem that banks, not cryptocurrency companies, are the enablers of illicit financial flows.

Bitcoin ‘Charlatans’ Over Corrupt Banks Any Day

Warren Buffett’s views on Bitcoin are well-known. It’s a scam, a ‘delusion’, a space packed with con-artists, ‘charlatans’, and money launderers. If ever there were a clearer case of the pot calling the kettle black, it would be the world’s most famous investor.

Wells Fargo (a Buffett investment) has been fined a mind-boggling total of 93 times for fraudulent activities and other abuses since the turn of the century. How many fines has Bitcoin received? Zero.

Big Banks Are Often the Perpetrators of Criminal Activity

Not only have large banks found themselves in hot water over the years for their inadequate AML procedures. They’ve also been found guilty of laundering the money themselves.

According to calculations by Bloomberg, Deutsche Bank has paid out close to $18 billion in the last decade alone in AML fines. The bank also had its offices raided in November 2018 on suspicion of laundering a massive $200 billion of dirty money.

Yet, they won’t allow Bitcoin ATM makers and other genuine cryptocurrency companies to open accounts? Isn’t that a little hypocritical?

Just a little… Yet it also shows the size of the profit doesn’t outweigh the risk involved.

Bitcoin Isn’t Big Enough Yet

So if big bank fines topped $243 billion over 10 years, why do they keep acting this way?

Because the profits they make from these activities far outweigh the sting from the fines. AML fines are a mere fraction of the billions of dollars more made from enabling criminal transactions.

The same cannot be said for small cryptocurrency companies. As Dan Hedl pointed out, the entire cryptocurrency market cap is worth just $134 billion, dwarfed by AML fines alone. Most banks simply realize the risk isn’t worth the reward.

That’s one theory. Another is that banks are simply trying to crush innovation and suppress Bitcoin and other cryptocurrencies because they see them as a threat. Let’s not forget the very reason Bitcoin was born in the first place.

With numbers like this, it can’t be too long before society opens its eyes and realizes who the real charlatans are.

Can a more honest monetary system be established using Bitcoin? Share your thoughts below!

Images via Shutterstock

The Rundown

Čvn 05

‘Big Four’ Australian Bank Beats Bitcoin… in Money Laundering

· June 4, 2018 · 9:00 pm

One of Australia’s “big four” banks, Commonwealth Bank (CBA), has agreed to pay Australian Transaction Reports and Analysis Centre (AUSTRAC) AUS$700M ($530M USD) in settlements for breaching anti-money laundering and counter-terrorism financing laws.

During a period of 3 years, CBA had failed to report 53,506 bank transactions, improperly monitored 778,370 accounts for money laundering red flags, and filed 149 suspicious matter reports late. The scandal resulted in the departure of Chief Executive Ian Narev.

CBA denies knowingly breaching AML laws, arguing that a single coding error had led to the failure to report the 53,506 transactions. However, they did admit responsibility for a lack of proper due diligence.

“Our agreement today is a clear acknowledgment of our failures and is an important step towards moving the bank forward. On behalf of Commonwealth Bank, I apologise to the community for letting them down,” said CBA current chief executive, Matt Comyn.

Illegal transactions: Fiat vs. Crypto

This news is particularly ironic considering the accusations by the mainstream media (and Bill Gates) that Bitcoin and other cryptocurrencies are being used primarily for money laundering and funding terrorism.

Studies conducted by Colombia University Economics professor Edgar Feige have already disproven these claims, citing that almost 50% of the world’s hard currency is utilized to make Illicit transactions like drug and arms trafficking.

A recent panel held by the US Senate Judiciary on modernizing anti-money laundering laws also found that only a small percentage of illicit activity spending is done through cryptocurrency.

The fact remains that cash is offline, and therefore more difficult to trace. Digital cash is recorded on a centralized database, where institutions with their own agendas can easily hide these transactions from the authorities.

By contrast, the immutability of transactions on the Bitcoin blockchain actually makes it harder to move money around without a trace.

A recent study by Qatar University and Hamad Bin Khalifa University revealed that unmasking the users behind these transactions often requires nothing more than a wallet address and a Google search. Qatar University researcher, Husam Al Jawaheri, explained:

The retroactive operation security of Bitcoin is low. When things are recorded in the blockchain, you can go back in history and reveal this information, to break the anonymity of users.

The best drug traffickers can hope for at the moment is using coins like Monero to mask their transactions, however, even Monero has its vulnerabilities.

CBA Implementing Blockchain?

Just 2 years ago, the now-ousted CBA executive Ian Narev acknowledged blockchain’s potential to be “transformational” for customers and in reducing costs, while perhaps not also recognizing its capabilities as an immutable ledger for the Bank itself.

It’s safe to say that a CBA ledger built on the blockchain would’ve made it much more difficult to conceal 53,506 transactions, saving AUSTRAC a lot of time and money investigating the breach.

To date, CBA has spent more than $400 million on anti-money laundering compliance measures.

Do you think the bank would consider using Blockchain technology to improve compliance with AML and counter-terrorism financing laws? Share your thoughts in the comments section below!

Images courtesy of Shutterstock

Show comments

Dub 22

Florida Bill Aims To Add Virtual Currency To AML Statutes

· April 22, 2017 · 1:00 pm

An act designed to add virtual currencies to Florida’s anti-money laundering statutes has unanimously passed three state committees.

Bill Targets ‘Ill-Gotten Gains’ From ‘Internet-Based Currencies’

The bill, sponsored by republican Jose Felix Diaz, “makes sure that traffickers and fraudsters can no longer try to use internet-based currencies to hide and move their ill-gotten gains,” State Attorney Katherine Fernandez Rundle said in a statement quoted by local news resource Miami Herald.

Rundle added:

The high-tech criminals of the 21st Century use virtual currencies like bitcoin to accumulate and hide the profits of their illegal activities.

Bitcoin related crime

As the Herald notes, the legislation comes hot on the heels of the failed prosecution of Florida resident Michell Espinoza, who allegedly tried to sell $1,500 of bitcoins which were used to purchase stolen credit card information.

Despite his arrest after undercover law officers posed as traders on Localbitcoins, telling Espinoza they intended to use the funds for illicit purposes, a judge ultimately threw out his case as Bitcoin is not considered money under current Florida law.

“This court is unwilling to punish a man for selling his property to another when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning,” the ruling determined in July last year.

No Official Identity For Bitcoin In Florida

Fellow Republican Dorothy Hukill meanwhile announced in September that she was seeking official recognition of Bitcoin as a currency in the state, but no progress has yet been made.

The latest motion has ruffled feathers among local cryptocurrency advocates. Barry University economist Charles Evans explained to the Herald how it could send the wrong message.

Barry University economist Charles Evans

Florida legislators will be sending a very clear signal that financial innovation is not welcome here… No doubt, officials in China, Europe, Russia, Texas, and other places where Bitcoin is welcome will be pleased.

Others were less concerned, local lawyer Andrew Hinkes claiming authorities would still need to prove intent to use Bitcoin for illegal activities to entail a prosecution.

I don’t think it would affect the day-to-day users of bitcoin, or investors who hold bitcoin… but it might affect the business of those who exchange bitcoin for dollars. Now, assuming the facts support the intent required by law, the path to prosecution of traders for money laundering is clearer in Florida.

The bill is now awaiting its audition before a further state committee.

Virtual currency has faced a continued patchwork legal status across US states, with jurisdictions taking markedly different approaches to regulating it.

What do you think about Florida’s latest bill and Bitcoin’s status in the state? Let us know in the comments below!

Images courtesy of Shutterstock, Barry University

Show comments

Úno 17

Tokken Puts the Legal Marijuana Industry on the Immutable Bitcoin Blockchain

Source: bitcoin

Tokken Puts the Legal Marijuana Industry on the Immutable Bitcoin Blockchain

Tokken (pronounced Token, or Tokin’) is a new Bitcoin company that is targeting the marijuana industry’s inability to get bank accounts. Tokken was founded by Lamine Zarrad, a veteran of the financial regulation industry. Namely, Zarrad has worked for the Office of the Comptroller of the Currency (OCC), which regulates and supervises the country’s thousands of banks and savings associations. With the recent promises that the Department of Justice will finally leave legal marijuana companies to the regulations of their respective states, the door for bank collaboration with medicinal and recreational marijuana dispensaries has cracked open a bit – letting out pungent smoke that has again scared the other side. Banks aren’t going to embrace marijuana companies just because the DOJ is nominally backing off, their chief concern is still anti money laundering. Zarrad hopes that his experience at the OCC will be crucial in allaying the fears of banks and their regulators.

Also read: Marijuana Industry Could Still Use Bitcoin

Securing the Cannabis Industry’s Future with the Bitcoin Blockchain

Tokken is one of the first companies to enter this space that has publicly committed to using the Bitcoin blockchain. Not too surprising given that Zarrad’s founding partner at Tokken, Tom Rau, has even been referred to as “The Durham Prince of Bitcoin.” Other companies have approached the problem from different angles. Hypur is a company based in Arizona that has raised $5 million USD with a mobile app that geographically tags transactions so that banks and regulators can verify that the purchase was indeed made within the physical premise of the dispensary. However, since Hypur doesn’t use the Bitcoin blockchain, the transaction data stored will not be as much of an uncensored truth as Tokken will be able to provide. Tokken’s business model will be to use a combination of ACH and the Bitcoin blockchain for record keeping. While it is unclear whether Bitcoin can be used to fund or call on consumer or business accounts, Zarrad has made it clear that every Tokken transaction hash(ish) will be recorded on the Bitcoin blockchain. Both the dispensaries and the banks will have their record that proves a dispensary is staying within its legal bounds – the wonders of triple entry accounting.

Denver, Colorado to Serve as Tokken Testing Ground

Denver, Colorado’s Ballpark Holistic Dispensary has committed to using Tokken’s system once it is available. The dispensary’s owner, Stephanie Hopper, is one of the lucky Coloradans with a bank account for her dispensary. Currently, these are only given by the smallest of banks and credit unions. By leveraging the immutability of the Bitcoin blockchain, Tokken will make marijuana transactions so clean and auditable that even the largest banks won’t have an AML excuse to ban cannabis companies. The Bitcoin blockchain should be considered as the ultimate tool for provenance – the blockchain is the answer to regulators demanding seed-to-sale accountability. While Tokken focuses on the sale aspect, other companies are starting to emerge on the other end of the spectrum as well. As more companies sprout up to bridge the high friction financial no man’s land that surrounds marijuana companies, so too does awareness that a closed loop system without banks is now possible thanks to Bitcoin.

Featured image from Juwan Li Photography.

The post Tokken Puts the Legal Marijuana Industry on the Immutable Bitcoin Blockchain appeared first on Bitcoinist.net.

Tokken Puts the Legal Marijuana Industry on the Immutable Bitcoin Blockchain

Úno 16

BTCDirect: Making Purchashing Bitcoin Easier

Source: bitcoin


The world of Bitcoin and digital currencies allows for the creation of many different business models, some of which improve upon existing financial solutions. Buying or selling Bitcoin through an exchange is often a hassle, but there are services which make the process a lot of more streamlined. BTCDirect has a unique approach to the Bitcoin exchange concept, as they are more of a brokerage than a regular exchange.

Also read: Bitcoinist Weekly News Re-Hash: Valve Accepting Bitcoin, Antonin Scalia Dead

Different Approach Leads To More Convenience

One of the main hurdles to overcome for digital currency adoption is the mental barrier people are faced with when showing an interest in Bitcoin. Obtaining their first share of the popular digital currency can be a struggle as there are very few convenient methods to purchase Bitcoin within minutes. In most cases, consumers are left with bank transfers, which can take several days to complete.

BTCDirect is a European exchange attempting to remove this entry barrier from the equation. Rather than positioning themselves as “another” Bitcoin exchange, BTCDirect will act as a broker and execute orders on behalf of its customers. All transactions are completed through a variety of international Bitcoin exchanges, guaranteeing there will always be enough liquidity to accommodate for user requests.

Furthermore, the European Bitcoin broker is accepting a variety of convenient payment methods that allow for purchases to be completed within two minutes of starting the process. Among these accepted payment methods are options such as Bancontact/Mr. Cash, iDeal, credit cards, and Sofortbanking. All of these payment methods are subject to confirmation in a matter of seconds, making for a smooth transaction on both sides.

Buying Bitcoin through BTCDirect does require verification. When customers want to raise the limit, they will be going through a verification process that is rather unique in the world of Bitcoin. Instead of asking users to send a scanned copy of their user ID and a proof of address, BTCDirect will verify one’s identity through a Skype video call. By showing your id/passport, the support agent will activate and upgrade your account on the spot. This model allows users to register and purchase bitcoin with their payment method of choice within 10 minutes

As BTCDirect CEO Mike Hutting mentioned in an interview earlier, the company has to comply with European KYC and AML regulations. Using accessible and convenient verification procedures through Skype or live chat makes it easier for novice users to get up and running in a matter of mere minutes.

Unlike what most people assume, Bitcoin is not associated with any form of anonymity. BTCDirect is a firm believer of how online purchases should not be anonymous, as there is no way for companies to be compliant and offer anonymity at the same time. Most BTCDirect users acknowledge that fact, though.

BTCDirect Looks At Insured Offline Bitcoin Storage

It is important to note BTCDirect aims to be more than just a broker for buying and selling Bitcoin throughout Europe. The company is planning to explore opportunities in the world of insured offline cold storage. Offering such a feature would keep consumer funds safe from cyberattacks, which will, in turn, help put people’s minds at ease.

The concept of Bitcoin cold storage is nothing new under the sun, as various [mobile] wallet solutions offer a similar feature. However, when it comes to novice users, they will need to be sure their funds is kept safe from all types of harm. Bitcoin is a learning curve, and not everyone will set up a Bitcoin wallet on their computer or mobile device. Having a cold storage solution at the disposal of the user while they learn more about how to set up their own wallets is a great move by BTCDirect.

What do you think of BTCDirect? Let us know in the comments below!

Source: News Tip Via Email

Images courtesy of BTCDirect, Shutterstock

The post BTCDirect: Making Purchashing Bitcoin Easier appeared first on Bitcoinist.net.

BTCDirect: Making Purchashing Bitcoin Easier