Japanese Regulator Unveils Plan to Regulate Cryptocurrency Wallet Services

Japanese Regulator Unveils Plan to Regulate Cryptocurrency Wallet Services

Regulation Japan’s top financial regulator, the Financial Services Agency, has unveiled a plan to regulate cryptocurrency wallet services. The regulator has put forward a number of regulatory measures as well as proposing how to implement them. Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space The Plan The Financial Services Agency (FSA) held its ninth cryptocurrency study group meeting on Monday. According to the agency’s published meeting materials, one of the main topics on the agenda was a plan to regulate crypto wallet services and their providers. Currently, Japan’s fund settlement law requires businesses conducting cryptocurrency-related activities in the country, such as buying and selling, to register as crypto exchanges with the FSA. “Wallets are like bank accounts that store virtual currencies,” Itmedia publication elaborated. While wallet service providers “handle large amounts of virtual currencies like exchange companies,” the publication noted that “they are not targeted by laws and regulations.” The FSA explained that the current law does not apply to wallet service providers since they do not buy or sell cryptocurrencies — they merely manage and transfer them for customers. However, since they manage payments, the agency believes that financial regulation is necessary. The plan unveiled at the meeting focuses on service providers — not software wallet developers or hardware wallet manufacturers. Many wallets exist only as code and are without identified leadership or companies behind them. The regulations for wallet services will be in line with the international standards for preventing money laundering and terrorism financing set by the Financial Action Task Force (FATF), the FSA detailed. The agency wrote that the “revised FATF standards” must be imposed, including their recommendations relating to crypto exchanges, wallet service providers, and initial coin offering issuers. The Implementation The group proceeded to discuss the risks associated with wallet services, such as stolen funds during cyber attacks, wallet failures, money laundering, and other risks shared by crypto exchanges. Possible regulatory measures include the maintenance of internal control systems, separate management of cryptocurrencies belonging to the service providers and customers, audits of financial statements, publication of policies in the event of stolen funds in a hack and retaining funds to repay customers. The transition period for introducing wallet regulations was also discussed. During this time, service providers would not…

Report: Application for Chinese Crypto Miner Canaan’s $400 Mln IPO Lapses

Report: Application for Chinese Crypto Miner Canaan’s $400 Mln IPO Lapses

Cryptocurrency mining equipment producer Canaan’s Initial Public Offering (IPO) application has lapsed, Reuters reported Nov. 15. The offering was set to take place on the Hong Kong Stock Exchange (HKEX). Founded in 2013 in China, Canaan manufactures application-specific integrated circuits (ASICs) for digital currency mining. Canaan is the world’s second largest cryptocurrency hardware maker, collecting a revenue of 1.3 billion yuan ($187 million) in 2017. The company’s profit in the same year was 361 million yuan ($52 million), which is a 230 times increase from 2015, per business news outlet Quartz. Canaan revealed its IPO plans in May, claiming to create the largest Bitcoin (BTC)-oriented offering yet seen when it would debut on the HKEX in July. While not mentioning a specific fundraising target, Cannan said the figure “could” reportedly circle $1 billion. However, the company subsequently lowered its target to $400 million. Today, Reuters reported that Canaan has let its application for the IPO of at least $400 million lapse, purportedly due to questions about the company’s business model and prospects from the HKEX and regulators. Sources close to the deal reportedly told Reuters that the IPO would not be conducted this year since a listing hearing was not updated by the HKEX. Canaan purportedly can rebid its IPO with updated financial information. The news follows a recent statement issued by Hong Kong’s securities regulator, the autonomous Chinese territory’s Securities and Futures Commission (SFC), which sets out new guidelines for funds dealing with cryptocurrency, including exchanges. The statement read: “In order to afford better protection to investors, the SFC considers that all licensed portfolio managers intending to invest in virtual assets should observe essentially the same regulatory requirements even if the portfolios (or portions of portfolios) under their management invest solely or partially in virtual assets, irrespective of whether these virtual assets amount to ‘securities’ or ‘futures contracts.’” In October, Cointelegraph reported that major mining hardware producers, including Canaan, could be affected by recently imposed U.S. sanctions on Chinese goods. Analysts raised alarm as the technology had been reclassified by the office of the United States Trade Representative (USTR) to fall under a stricter tariff regime.

French Financial Markets Regulator Estimates ICOs Have Raised $21.9B Globally Since 2014

French Financial Markets Regulator Estimates ICOs Have Raised $21.9B Globally Since 2014

Regulation France’s financial markets regulator, the Autorité des marchés financiers (AMF), has published a report examining trends relating to initial coin offerings. The AMF describes ICOs as a “marginal” method of financing, estimating that the global ICO industry has raised €19.4 billion ($21.9 billion) since 2014. Also Read: Russian Developers to Help Iran Build Its Crypto-Economy Significant Centralization of Capital The AMF report notes an “acceleration” in ICOs over the last two years. It estimates that €5.6 billion ($6.3 million) was raised via ICOs in 2017, equating to 1.6 percent of global equity financing for that year. Throughout 2018, the regulator estimates that ICOs have raised €13.4 billion ($15.1 billion) so far, accounting for 69 percent of the total raised by all ICOs since 2014. The AMF report also points to a significant centralization of capital within the ICO sector. It estimates that just 17 ICOs have raised approximately 40 percent of the total sum generated by the industry thus far. French ICOs Grab ‘Modest Share’ of Global Sector The AMF describes French ICOs as “accounting for a modest share of this new type of financing.” The report estimates that a total of 15 ICOs have collectively raised €89 million ($100.5 million), meaning that French token sales have represented just 0.46 percent of the total sum raised by the global ICO industry. While the majority of ICOs have focused on “blockchain or trading applications,” the AMF believes that projects are now increasingly “diversifying into other sectors.” It also notes that “most of the upcoming ICO projects” have previously raised financing through “traditional funding channels.” In addition, the AMF reports that the majority of ICOs thus far have taken place in the United States. AMF Advocates International Regulatory Cooperation The AMF argues that the key “success factors of an ICO” include the need for robust and transparent anti-money laundering procedures. The report also emphasizes the need for “appropriate regulation” to guide the ICO industry. The AMF claims that “given the cross-border nature of these projects, the diversity of regulatory approaches at the international level is a point of vigilance.” It adds that “in this context, international and European cooperation is essential” in the identification of fraud and the development of coherent regulatory frameworks. Do you think that ICOs have reached…

Hours After Bitcoin Cash Network Update Begins, Bitcoin ABC Over 10 Blocks Ahead

Hours After Bitcoin Cash Network Update Begins, Bitcoin ABC Over 10 Blocks Ahead

The Bitcoin Cash (BCH) network update, which many predicted would lead to a hard fork, began as scheduled today, Nov. 15. At press time, Bitcoin ABC and Bitcoin Unlimited are currently leading Bitcoin SV in terms of both hash rate and number of nodes, according to Coin.Dance. Under the new consensus rules, 41 blocks have been already mined, wherein Bitcoin ABC is 12 blocks ahead. The update has led cryptocurrency exchanges around the world to suspend BCH trading and withdrawals. The news about the protocol upgrade has divided the BCH community in two camps as there are two dominating proposals for the implementation of the BCH network in the form of Bitcoin ABC and Bitcoin SV (Satoshi’s Vision). Bitcoin ABC stands for “Adjustable Blocksize Cap”, and its proponents argue that the basic structure of BCH is “sound,” and “does not need any radical change”. Proposed changes include “removing software bottlenecks” and enabling node operators to change their block size limit. Bitcoin ABC is supported by crypto evangelist Roger Ver, while Bitcoin SV supporters are led by Craig Wright, who has previously declared himself to be the mysterious Bitcoin inventor Satoshi Nakamoto. The SV camp promotes radically changing the current BCH structure, where its split is designed to entirely overwrite the network scripts of Bitcoin ABC and increase the BCH block size from 32MB to a maximum of 128MB. The issue of a BCH upgrade caused a heated dispute in the community; Wright engaged in verbal battles with Bitmain’s co-founder Jihan Wu, who accused Wright of being a Blockstream spy. Wright’s messages to ABC, Roger Ver, and Bitmain have turned into bankruptcy threats and accusations of being engaged in Silicon Road machinations and child pornography. A continued feud between the crypto communities would have a significant impact on the crypto market in general, while a split caused by a hard fork will affect the entire network.

What We Know About Bitcoin Cash’s Two Blockchains

What We Know About Bitcoin Cash’s Two Blockchains

At 18:02 UTC, the bitcoin cash blockchain officially split in two. With one iteration of the bitcoin cash protocol called Bitcoin “Satoshi’s Vision” or Bitcoin SV directly opposing the upgrades introduced through another implementation called Bitcoin ABC, the blockchain forked into two distinct networks. And while a so-called “hash war” had been greatly anticipated, for now – at least – the two chains are steadily mining blocks on their respective networks. Threats of cross-chain sabotage hinted at by Bitcoin SV proponents have yet to materialize. Initially, the Bitcoin ABC network was the only bitcoin cash platform to successfully create new blocks and validate transactions after the system upgrade (or hard fork) went live. Two blocks in, however, the Bitcoin SV network saw its first block mined at 18:29 UTC. Mining pool Mempool mined the first block of Bitcoin SV, with SVPool and Coingeek mining subsequent blocks. Mining pools Bitcoin.com, BTC.com and Antpool have controlled the ABC action to date. As of press time, Bitcoin ABC is 10 blocks ahead of Bitcoin SV, according to data compiled by Coin Dance. How it’s all playing out Thus far, most blocks mined on the Bitcoin ABC network have featured over 1,000 transactions, though starting at 20:48 UTC a significant drop in both block size and transaction count was recorded on blockchain explorer site Blockchair. A few hours before hard fork activation, mining pools purporting to support the Bitcoin SV roadmap controlled a supermajority of the bitcoin cash network. However, according to bitcoin cash monitoring site CoinDance, Bitcoin ABC is now leading in terms of total hash power support. One such example that received high attention over the course of today’s events was mining pool Bitcoin.com, which released an announcement to users saying all hash power going into mining the bitcoin blockchain would be temporarily deployed to mine Bitcoin ABC blocks. Though this announcement received negative feedback from those who claimed the organization had no legal right to redirect mining support in this way, data on the site indicates that starting at 17:30 UTC the mining pool has steadily been reallocating hash power in support of the Bitcoin ABC cause. In fact, as of press time, bitcoin.com purports that a total of 4218.89 Ph/s of hash power is being used to mine…

Miner Abandons Swedish County, Leaves $1.5M in Unpaid Electricity Bills

Miner Abandons Swedish County, Leaves $1.5M in Unpaid Electricity Bills

Mining Two mining companies with operations in Sweden have reportedly abandoned their facilities in the country’s northernmost county of Norrbotten. One of the companies, U.S. miner NGDC, appears to have suddenly fled from the area, leaving $1.55 million in unpaid electricity bills in its wake. Also Read: Seba Crypto Eyes Swiss Bank License, Independent Reserve Integrates Tax Tool US-Based NGDC Bails on $1.55M Power Bill According to Sveriges Radio, Miami-based NGDC ceased operations in the municipality of Älvsbyn after having its power cut by Swedish electricity supplier Vattenfall. NGDC owes 14 million Swedish kronor ($1.55 million) to Vattenfall, with the company’s lawyer, Fredrik Sundin, stating that the utility is actively pursuing the matter. “In all judgments, the prospect does not seem so brilliant, but we will do what we can of course,” Sundin said. Helena Ohlund of the Älvsbyn municipal council stated that the local authorities have been unsuccessful in their attempts to contact NGDC. Increasing Power Costs Drive Mining Exodus Another mining company, Chasqui Tech, has reportedly abandoned its plans to establish a bitcoin mining farm in Kalix, Norrbotten county. The municipality is now seeking half a million Swedish kronor ($55,000) in unpaid rental fees from the company. Patrik Ohlund, the chief executive officer of The Node Pole, a data center development hub in Sweden, said that he believes several factors could be driving these sudden departures. He has speculated that the cryptocurrency bear market and a jump in Swedish electricity prices — partly caused by the past summer’s drought — have created “problems” for a number of mining companies with operations in the country. However, Ohlund remains upbeat about the future prospects of Sweden’s cryptocurrency mining industry. He said that he “would not be surprised to see a doubling” in the number of data centers operating in Sweden. He estimated that there are already roughly 50 such facilities in the country at present. Last month, London-based MGT Capital Investments also announced that it had entered into a hosting agreement that would see the company relocate approximately 6,300 S9 Antminers that are currently housed in Sweden to a facility in Colorado Springs. Stephen Schaeffer, the chief operating officer of MGT Capital Investments, stated that the company hopes to complete the move and recommence mining at full capacity…

Binance Warns Iranian Traders to Withdraw Crypto Amid Sanctions

Binance Warns Iranian Traders to Withdraw Crypto Amid Sanctions

Binance is advising its remaining users in Iran to withdraw their money as the cryptocurrency exchange seeks to comply with international sanctions. “If you have an account with Binance and fall into that [sanctions] category, please withdraw your assets from Binance as soon as possible,” reads an email received in recent days by Iranian users, according to several local sources. Sepehr Mohamadi, chairman of the board of the Blockchain Association of Iran, said emails like this have been trickling in for months, but their numbers recently increased following renewed U.S. sanctions, which activated on November 5. At first, Malta-based Binance, which declined to comment for this article, was mainly shuttering accounts of users who provided Iranian passports as part of the know-your-customer (KYC) process, according to sources in Iran. But this week it also began warning accounts connected to Iranian IP addresses to get their crypto out, several Iranian traders said. “Iranians are not really able to trust cryptocurrency exchanges,” Nima Dehqan, a researcher at the Tehran-based blockchain project Areatak, told CoinDesk. “That isn’t really something new.” Indeed, BitMex and Bittrex are just a few of the many exchanges that banned Iranian users over the past year, sometimes without refunding the crypto they held for these customers. “It would be difficult [for the exchanges] to serve users in these jurisdictions if they want to serve American citizens,” John Collins, a partner at the FS Vector consulting firm in Washington, D.C., and former head of policy at Coinbase, told CoinDesk. “It’s logical to say that many companies are looking to the States right now and adapting to the U.S. regulation.” As such, Dehqan said this has forced the Iranian bitcoin community to band together to create local businesses and support networks. “We do actually have cryptocurrency groups in Telegram or WhatsApp for people who want to change their cryptocurrencies in person,” Dehqan said. “People have to trust each other. It’s a bit of closer-knit community in Iran.” Some vendors have even set up physical shops and conduct traditional KYC, just in case Iranian authorities ask about their activities. Stepping back, U.S. regulatory crackdowns against trading platforms such as EtherDelta have inspired some exchanges that serve American customers to start being more cautious about KYC requirements. And, according to SimilarWeb, roughly 13…

Coinbase Ventures Backs Home Crypto Mining Startup Coinmine

Coinbase Ventures Backs Home Crypto Mining Startup Coinmine

Mining Coinmine is a new startup that aims to make in-home mining accessible for non-technical users, based in Los Angeles and founded by Farb Nivi and Justin Lambert. The company has reportedly raised about $2 million from VC funds and angel investors such as Coinbase Ventures and Tinder Chief Product Officer Brian Norgard. Also Read: Kucoin Exchange Raises $20 Million in Series A Funding Round $799 Plug and Play Miner Coinmine’s debut device went on sale on Wednesday, featuring a 4 GB AMD RX 570 GPU, Intel Celeron CPU and 8 GB DDR4 RAM. It also consumes just 120 watts, which is less than a Playstation, according to the developers. The Coinmine One retails for $799, but the company takes a 5 percent cut for itself from the mining proceeds. Aiming for ease and simplicity, users only need to plug the device into a source of electricity, open an accompanying mobile app and choose the assets they want to mine. From there, the Coinmine mobile app controls and keeps track of the device from anywhere. Users can see how much they have earned, change to other cryptocurrencies or add additional devices to their accounts from a centralized dashboard. “Crypto is not just about buying and selling magical internet coins,” said Nivi, the CEO of Coinmine. “It’s about people combining computation to decentralize the world’s money and information from the hands of a few and into the hands of the many. We made this easy enough for anyone to do.” Big Investors Swipe Right Coinmine has raised a combined total of $2 million in funding to date. The company is backed by funds such as Coinbase Ventures, Social Leverage, Wonder VC and Arrington Capital, as well as angel investors including Tinder’s Norgard, Balaji Srinivasan, Anthony Pompliano, Ryan Hoover, Josh Jones, Penelope Linge and Tom McInerney. “Throughout my entire career, I’ve worked to make complicated ideas simple, fun and useful,” said Norgard. “At Tinder, we removed the pain associated with setting up a dating profile so people could get to the action. When Farb initially came to me with the basis for Coinmine, I knew it was a radically novel solution to a messy problem — it was as they say, a perfect match. The limiting factor to…

Bitcoin Cash Just Split Into Two Blockchains

Bitcoin Cash Just Split Into Two Blockchains

The code for Bitcoin cash’s hard fork has been activated. With neither side of the contentious debate leading up to the hard fork willing to come to a compromise, two competing implementations of the protocol have now been activated. However, it’s unclear at this juncture which of the two will become the dominant software of the BCH network – or if two distinct chains will continue to co-exist in the long-term. The last “common block” among bitcoin cash miners was #556,766, mined by SVPool. As of press time, Bitcoin.com – which is supporting Bitcoin ABC – had mined a new block, signifying that the two chains have divided into two, according to data from Coin.Dance. To recap, the implementation put out by leading bitcoin cash developer group Bitcoin ABC introduces a series of technical upgrades to the network, such as a reordering of transactions to increase block capacity as well as additional code to support greater interoperability between cryptocurrencies. The other implementation, dubbed Bitcoin “Satoshi’s Vision” or Bitcoin SV, rejects these changes to instead restore retired code from the original bitcoin protocol and increases the block size from 32 MB to 128 MB. In the lead-up to this event, threats of chain sabotage by avid Bitcoin SV supporter Craig Wright suggested the potential use of hash power to mine both a Bitcoin SV chain and create empty blocks on an opposing Bitcoin ABC chain, which could fatally damage operations on the opposing network. Though refuted by Bitcoin ABC supporters as unlikely, data three days prior to hard fork activation revealed that bitcoin cash mining pools supporting Bitcoin SV actually consolidated a majority of the network’s total hash power, suggesting strong capability to follow through on the threat. These numbers as they relate to hash power are still highly subject to change. Indeed, there remains the possibility of mining support switching from one side to another, as well as additional resources being added to reinforce either chain. With several platforms closely tracking the outcome of events still to come, the future of the bitcoin cash community remains to be determined. Road image via Shutterstock

Hash Wars: The Bitcoin Cash Hard Fork Has Begun

Hash Wars: The Bitcoin Cash Hard Fork Has Begun

News Today Thursday, Nov. 15, a majority of the cryptocurrency community is fixated on the contentious Bitcoin Cash (BCH) hard fork and watching the spectacle with great anticipation. At approximately 1:00 p.m. EST miners backing both implementations started the fork process in order to change the Bitcoin Cash protocol ruleset. Currently, at the time of publication, the chain has split and the Bitcoin ABC side of the chain is three blocks ahead of the forked SV chain.  Also read: The Daily: Coinbase Blesses Binance, Game Day for BCH The day is here for the highly anticipated BCH network hard fork, with the protocol set to undergo some consensus rule changes. However, this particular ruleset change has two different competing client implementations that are incompatible — Bitcoin SV and Bitcoin ABC. There’s been a lot of debate and name-calling across social media, but today many BCH proponents believe hashrate will ultimately trump internet chatter. According to data from Coin Dance cash, at approximately 1:00 p.m. EST the first ABC block was found by the mining pool Bitcoin.com at block height 556767. Bitcoin.com mined another block at height 556767 with the new Bitcoin ABC implementation’s ruleset. After the first block was mined, Bitmain CEO Jihan Wu congratulated Bitcoin.com on the social media platform Twitter. The first Bitcoin SV block to be mined Then at around 1:22 p.m. EST the first Bitcoin SV block was mined at height 556767 by Mempool, cementing the bifurcation of the Bitcoin Cash chain. Not long after, SV Pool found another block at height 556768, giving the chain a total of two blocks. Bitcoin.com then found block 556769 on the ABC side of the chain and then captured blocks 556770, and 556771. The current state of both chains at 1:55 p.m. EST on Nov. 15, 2018 Bitcoin.com’s pool then found blocks 556772, and 556773, giving the ABC chain a five-block lead. BTC.com found the next block at height 556774 on the ABC side of the chain, but the SV chain found a few more blocks (556769, 556770 and 556771). Even though data sites have been lagging due to the traffic, the SV chain has been slower at showing blocks processed. At 1:55 p.m. EST the ABC chain had a three-block lead ahead of the SV chain. Congratulations, https://t.co/SZwhCkaYqs — Jihan Wu…