Huobi Secures Its FSA License in Japan, Other Large Players Are Pending

Huobi Secures Its FSA License in Japan, Other Large Players Are Pending

On Jan. 17, Singapore-based cryptocurrency exchange Huobi, one of the largest players on the market, relaunched as a fully licensed platform in Japan after merging with the BitTrade exchange. Branching out to Japan, where compliance is valued and many regulatory measures are imposed for crypto players by domestic regulators, is a complex process. Here’s how Huobi entered the market, and which firms might soon follow suit. Specifics of the Japanese market and the FSA’s role in it Japan is one of the world’s largest markets for cryptocurrencies. Bitcoin (BTC) and altcoins can be used as a legally accepted means of payment there, although they are not considered “legal tender.” Being closely overseen by the national financial regulator, the Financial Services Agency (FSA), the Japanese crypto market is also one of the most compliant and regulation-oriented. Since the amendment of Japan’s Payment Services Act in April 2017, all crypto exchanges in the country are required to register with the FSA. Counting Huobi’s recent merger with BitTrade, the pool of exchanges cleared to serve the Japanese market currently consists of 17 platforms: Money Partners, Liquid (previously known as Quoine), Bitflyer, BitBank, SBI Virtual Currencies, GMO Coin, Btcbox, Bitpoint, Fisco Virtual Currency, Zaif, Tokyo Bitcoin Exchange, Bit Arg Exchange Tokyo, FTT Corporation, Xtheta Corporation, Huobi and Coincheck. The FSA is known to have a tight grip on local exchanges, firmly reacting to security breaches after a number of high-profile local crypto exchange incidents, namely last year’s bizzare $532 million Coincheck hack and the infamous collapse of Tokyo-based Mt. Gox. The FSA also conducts on-site inspections of exchanges that have their registration pending and occasionally asks exchanges to submit their risk management system reports in the wake of security breaches. For instance, in March 2018, following the Coincheck hack, the watchdog sent “punishment notices” to as many as seven crypto exchanges and temporarily froze the activities of two more after a round of inspections. Business improvement orders were sent for a lack of “the proper and required internal control systems,” with Coincheck being specifically cited as missing a framework for preventing money laundering and the financing of terrorism. Shortly after the regulator’s move, two local exchanges — Mr. Exchange and Tokyo GateWay — decided to close up shop. As…

Leaders of South Korean Crypto Exchange Komid Jailed for Faking Volume: Local Media

Leaders of South Korean Crypto Exchange Komid Jailed for Faking Volume: Local Media

Two leaders of the South Korean cryptocurrency exchange Komid were reportedly sentenced to serve jail time for faking exchange volumes, Korean crypto media outlet blockinpress reports on Jan. 18. The exchange’s CEO, surnamed Choi, received a three-year sentence, while another company leader with an unspecified role was purportedly sentenced to two years imprisonment for fraud, embezzlement and misconduct, the article notes. The charges reportedly outline a scheme where the exchange faked 5 million transactions in order to inflate the volume, which reportedly earned them $45 million. It is also suspected that the company used a bot to automatically create large orders and attract new users. The article quotes the judge saying: “Choi has committed fraud for a countless number of victims for a long period of time…. Futhermore [sic], he holds the financial authorities responsible for failing to keep track of the industry better.” As Cointelegraph reported in December of last year, South Korea’s largest cryptocurrency exchange Upbit denied accusations it had manipulated its order book after regulators indicted three of its staff. Citing reports from the Seoul District Prosecutors Office, The Korea Times said at the time that two senior executives from Upbit’s developer Dunamu and one Upbit employee have been indicted, but not detained, as part of an investigation into the proceedings. Earlier in the same month, South Korea-based cryptocurrency exchange Bithumb also denied allegations of faking trade volume.

The Daily: Coinspot Launches OTC Desk, Bitdeer Expands in Eastern Europe

The Daily: Coinspot Launches OTC Desk, Bitdeer Expands in Eastern Europe

The Daily Crypto exchange Coinspot has launched an over-the-counter trading desk in Australia and you’ll find more about the platform in this edition of The Daily. Elsewhere, computing power-sharing platform Bitdeer.com is focusing on Eastern Europe through a partnership with the largest digital asset trader in the region, Exmo. And in the U.S., expired Mccoins will get you a Big King. Also read: Sapphire Develops GPU for Grin, TSMC Sees Drop in Mining Revenue Crypto Exchange Coinspot Offers OTC Services to Australian Traders Australian cryptocurrency exchange Coinspot has announced the launch of its dedicated over-the-counter (OTC) trading desk. The platform will be able to process high-volume transactions for its members without the need to use the traditional public order books. The idea behind the project is to solve problems of liquidity for traders who want to deal in larger quantities. The company believes the OTC desk will reduce their exposure to fluctuations on the crypto markets. Lock-in pricing is expected to eliminate slippage and minimize the risks associated with high-volume trading. Clients can now buy and sell a number of digital assets, including bitcoin core (BTC), bitcoin cash (BCH), ethereum (ETH), ripple (XRP), litecoin (LTC), and the stablecoin tether (USDT). Coinspot, which is among the leading crypto exchanges in Australia, promises access to the widest variety of digital coins in the country. The main condition for using the service is that each trade should be valued at AUD $50,000 (USD ~$36,000) or more. A 0.1 percent fee is applicable to transactions on the platform. Coinspot’s OTC desk will offer its users the services of a professional trading broker. Bitdeer Launches Russian Site, Partners With Exmo Bitdeer.com has launched a Russian version of its website. The announcement comes with the news that the computing power-sharing platform has teamed up with Exmo, the largest digital asset trading platform in Eastern Europe. The partnership will allow Bitdeer and Exmo to provide their users with the opportunity to participate in cryptocurrency mining with no technical insight or investments in server infrastructure. The two companies hope to popularize the minting of digital coins and contribute to the development of the crypto market. Offering new payment processing models and related customized products to the public is also part of their plans…

Oceans Apart: Crypto Regulation in the US and EU

Oceans Apart: Crypto Regulation in the US and EU

Noelle Acheson is a veteran of company analysis and member of CoinDesk’s product team. The following article originally appeared in Institutional Crypto by CoinDesk, a newsletter for the institutional market, with news and views on crypto infrastructure delivered every Tuesday. Sign up here. ————————–————————–————————–————————–————————–————————– Spare a thought for the financial regulators: the American ones, with no paycheck during the government shut-down and a whopping backlog awaiting when they eventually get back to work; and the European ones, with a fragmenting union, disjointed capital markets and a glut of new rules seeping through the labyrinthine halls of power. Now, compare the very different approaches to crypto asset regulation from each side of the Atlantic. While the U.S. Securities and Exchange Commission (SEC) is contemplating the bigger picture and working on drawing up sector-wide rules, it is also passing judgment and handing out punitive fines. Last year saw 18 digital token-related actions from the SEC, compared to five in 2017. The European side, however, seems to be more focused on figuring out how to contemplate the bigger picture. It’s thinking about what structure the decision-making process should take. It’s forming committees. Recommendations are flying across the departmental divides, and preparations are being made for the deliberations. It seems to be perpetually thinking about regulating digital assets, rather than actually doing so. As an example, earlier this month you may have noticed yet more calls for EU-wide crypto rules, this time from both the European Banking Authority and the European Securities and Markets Authority (ESMA). This may on the surface seem like the cultural differences that film lovers are already familiar with: the fast, action-heavy approach of the U.S. blockbusters vs. the thoughtful and careful style of the European indies. But it’s more than that. The differences are actually embedded in legal structures and traditions and highlight the unfathomable difficulty of reaching agreement on how the new class of crypto assets should be regulated. Deep roots European law is based on Napoleonic code, or “civil law,” in which everything is regulated by pre-established law or administrative decision. Codified statutes predominate, and regulation is often even more comprehensive than it needs to be, which also makes it less agile. Its aim, however, is to produce a uniform set of rules to cover…

Executives of Korean Exchange Sentenced to Jail for Faking Volumes

Executives of Korean Exchange Sentenced to Jail for Faking Volumes

Exchanges Two executives of a South Korean cryptocurrency exchange have reportedly been sentenced to jail for inflating trading volumes on their exchange. The pair allegedly used a bot to fake large orders in both cryptocurrencies and Korean won. Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations Prison Sentences Two executives of South Korean cryptocurrency exchange Komid were sentenced to jail on Thursday “for their roles in orchestrating fraudulent trading volume reports on their platform,” The News Asia reported. One of the executives is the CEO of the exchange, Choi Hyunsuk. He received a three-year prison sentence while the other executive received a two-year jail sentence, Maekyung publication detailed, asserting: This is the first time a representative of a virtual currency exchange has been sentenced to prison for allegedly inflating trading volumes. Komid began operations on Jan. 5 last year after beta test runs. According to the court, Choi created more than five fake accounts in January last year and inflated trading volumes in both cryptocurrencies and Korean won on his exchange. The two were sentenced to prison “for fraud, embezzlement, and misconduct,” The News Asia noted, elaborating: The charges from prosecutors outlined a scheme wherein the two defendants fabricated 5 million transactions on their platform to deceive investors into thinking that the volume was natural. This led to the two earning about $45mil. There is also a suspicion that they utilized a ‘bot’ to automatically create large orders, which attracted new users. Damaged Confidence The judge explained that “Choi has committed fraud for a countless number of victims for a long period of time,” the news outlet conveyed. “There is a need for punishment because the damage caused by the creation of false electronic records is large,” Maekyung quoted him as saying. However, Edaily reported that the judge took into account the fact that the damage was minimized as some funds were returned. In addition, he found that “The defendants did not appear to have committed a crime with strong fraudulent intentions.” Nonetheless, he concluded: The crime has damaged customers’ confidence in the virtual currency exchange and has had a negative effect on the domestic virtual currency trading market. Cryptocurrency exchanges have been caught using trading bots to falsify orders since the early…

8 Crypto Debit Cards You Can Use Around the World Right Now

8 Crypto Debit Cards You Can Use Around the World Right Now

Finance Cryptocurrencies are gradually becoming a viable payment option across a range of markets and jurisdictions. If there is a tool that significantly expands the usability of digital coins in a world still dominated by traditional payment systems, it’s the crypto debit card. A growing number of reliable platforms offer the fintech product to bitcoin enthusiasts. Also read: Crypto Cards Are Legal in Russia, According to the Finance Ministry Established Crypto Card Providers in the U.S. Bitpay, which processed over $1 billion in payments during a bearish 2018, offers users in all U.S. states a convenient way to spend their cryptocurrencies online and in store. Its prepaid Visa card is tied to a cryptocurrency wallet that supports instant conversion from bitcoin core (BTC) and bitcoin cash (BCH) to U.S. dollars and local fiat currencies outside the country. Bitpay’s crypto card is available to U.S. residents only. To apply, it is necessary to provide a home address, a valid government-issued ID and social security number. There’s a fee of $9.95 that covers the cost of issuing and a dormancy fee of $5 a month following a 90-day period of inactivity. A currency conversion fee of 3 percent is applied each time the card is used outside the U.S. Withdrawing cash at an ATM costs $2 in the United States and $3 abroad. Shift, another card available in the U.S., allows users to connect to their Coinbase accounts. The Visa card has no maintenance fee but a 3 percent commission is charged on international transactions. ATM withdrawals cost $2.50 in the United States and $3.50 in other jurisdictions. The card itself is $20. Shift supports BTC only and offers fee-free conversion from bitcoin core to U.S. dollars. Major Crypto Debit Cards Available in Europe Wirex is the first choice for many Europeans. The U.K.-based startup offers both virtual and physical Visa debit cards, and the plastic version comes with chip and PIN. They are currently available to residents of the European Economic Area (EEA), where Iban support was introduced for all EUR accounts. However, the company plans to offer its services in North American and Asian markets as well. Users can load the card with bitcoin core (BTC), ethereum (ETH), ripple (XRP), litecoin (LTC), and waves, the latter…

Bitcoin Nears $3,750 as Top Cryptos See Moderate Gains

Bitcoin Nears $3,750 as Top Cryptos See Moderate Gains

Saturday, Jan. 19 — all the top 20 cryptocurrencies are seeing slight to moderate gains in the 24 hours to press time. Bitcoin’s (BTC) price is nearing $3,750 again, according to Coin360 data. Market visualization from Coin360 At press time, Bitcoin is up about 2 percent on the day, trading at around $3,730. Looking at its weekly chart, the current price is higher than $3,663, the price at which Bitcoin started the week. Bitcoin 7-day price chart. Source: CoinMarketCap Ripple (XRP) is up just over 1.6 percent on the day, trading at around $0.331 at press time. On the weekly chart, the current price is higher than $0.329, the price at which XRP started the week — and notably lower than $0.337, the midweek high reported on Jan. 14. Ripple 7-day price chart. Source: CoinMarketCap Ethereum (ETH) has seen its value increase by nearly 3 percent over the last 24 hours. At press time, ETH is trading at almost $125, having started the day around $121. On the weekly chart, Ethereum’s current value is near identical to $126, the price at which the coin started the week. Ethereum 7-day chart. Source: CoinMarketCap Among the top 20 cryptocurrencies, the ones experiencing the most notable growth on the day are NEO, which is up over 5 percent, and Maker (MKR) and Litecoin (LTC), both up about 4 percent. The combined market capitalization of all cryptocurrencies — currently equivalent to about $124.5 billion — is higher than $121.8 billion, the value it reported one week ago. Total crypto market cap 7-day chart. Source: CoinMarketCap As Cointelegraph recently reported, the Organisation for Economic Cooperation and Development (OECD) has stated that global regulators should work together to facilitate the development of initial coin offerings (ICOs). Also, crypto entrepreneur and regular contributor to CNBC, Brian Kelly, claimed that there is no chance for a Bitcoin exchange-traded fund (ETF) approval in 2019. Kelly made his remarks in an interview with Cointelegraph at the Crypto Finance Conference this week.

Lightning Network Co-Creator Is Designing a Scaling Solution Called Utreexo

Lightning Network Co-Creator Is Designing a Scaling Solution Called Utreexo

Technology A blockchain researcher has been working on a scaling effort for the unspent transaction output set found in the Bitcoin protocol. According to Tadge Dryja’s recently published description of research, the software engineer is working on a dynamic accumulator called Utreexo. The project could theoretically allow network participants to verify the state of the chain’s consensus rules with smaller sets of cryptographic proof. Also read: Venezuelan BCH Proponents Bolster Cryptocurrency Use Cases and Adoption Utreexo Could Allow Bitcoin Full Nodes on a Mobile Phone Tadge Dryja from MIT and the Digital Currency Initiative.A few years after Bitcoin was born, developers and network participants discovered the protocol needed to scale in order to facilitate transactions for a growing number of users. The software stores a record of every transaction and all the newly minted coins within a distributed ledger. This makes full node maintenance cumbersome over time and a big reason for this is because of a collection of Unspent Transaction Outputs or UTXOs. In order to help solve the scaling issue, Tadge Dryja from MIT has written a description of the current research project he’s been working on called Utreexo. The protocol is a hash-based dynamic accumulator, which essentially brings the millions of UTXOs recorded onchain down to under a kilobyte. “There is no trusted setup or loss of security; instead the burden of keeping track of funds is shifted to the owner of those funds,” Dryja’s description explains. “With Utreexo, though, rather than having to store the entirety of the bitcoin state, bitcoin holders could simply verify if it is correct using a cryptographic proof,” Dryja’s paper adds. “This approach could minimize storage requirements to the extent that it might even be possible to run bitcoin on a mobile phone.” Millions of Unspent Outputs Represented in Under a Kilobyte Dryja’s Utreexo and accumulators have been getting some attention in recent months. In the podcast episode Grey Mirror #1, host Rhys Lindmark interviewed Tadge Dryja about the project, which has slowly become a prototype. Dryja explained to Lindmark how blockchains could bootstrap upgrades in a “non-fork” fashion by using a bridge node to Utreexo. Furthermore, Stanford University cryptographers Ben Fisch, Dan Boneh, and Benedikt Bünz have also written a paper that involves accumulators. The study discusses…

Chile to Start Taxing Cryptocurrency Earnings in Second Quarter of 2019

Chile to Start Taxing Cryptocurrency Earnings in Second Quarter of 2019

Taxes Chile is to start taxing cryptocurrencies in April, when taxpayers pay their yearly income taxes, but it’s unclear at what rate. According to local media reports, the country’s revenue authority has included crypto assets in the Annual Income Tax Returns form, which will be declared as “other own income and/or third-party income from companies that declare their effective income.” Also read: Report From Within Shut Down Zimbabwe: A Government That’s Crippled Its Own Economy Investors to Pay Tax on Crypto Earnings Chile exempted cryptocurrencies from Value Added Tax laws in 2018, labeling them “intangible assets” but investors will now be required to pay tax on earnings generated from crypto-related investments, Diario Bitcoin reported, quoting the country’s tax collector, Internal Revenue Service. It is not clear at what rate the crypto tax will be levied, but individual income tax thresholds in the country averaged 39.38 percent during the 15 years to 2018, according to research website Tradingeconomics. Today, the rate stands at 35 percent. Fernando Barraza, director of the revenue authority, said citizens who buy, sell or trade virtual currencies will have to register their enterprises by completing what are known as “tax-exempt invoices.” These invoices allow the Internal Revenue Service to monitor their operations. The article stated that the Chilean government had become interested in tracking cryptocurrency activities following a sharp rise in their use as “valid currencies to trade products and services.” Legitimizing Cryptocurrencies The move by the revenue collector to tax crypto assets is widely regarded by observers as a major step towards legitimizing the trade and use of virtual currencies in the south American country. Until now, the legal status of cryptocurrency in Chile has remained a matter of conjecture. The country does not recognize virtual currencies such as bitcoin as legal tender, but they are not banned either. However, Chilean crypto exchanges have in the last year had running battles with commercial banks, who closed their accounts without explanation. A landmark ruling by the Supreme Court of Chile in December means banks can now close such accounts legally. In a case pitting state-owned Bancoestado against digital asset trading platform Orionx, the court ruled the bank was justified in closing the exchange’s accounts. Judges said the bank acted in compliance with laws…

Plaintiff in AT&T SIM-Swapping Case Sues ‘Bitcoin Bandit’ for $81M

Plaintiff in AT&T SIM-Swapping Case Sues ‘Bitcoin Bandit’ for $81M

News The plaintiff in a $224M lawsuit against wireless carrier AT&T has turned his attention to a new target. Michael Terpin’s legal team have filed a second suit, this time against 21-year-old Nicholas Truglia, dubbed the “bitcoin bandit” by the New York press. The Manhattan resident, who was arrested on unrelated SIM-swapping charges in November, now finds himself the target of an $81 million suit that seeks to invoke the RICO Act and land the fresh-faced defendant with a racketeering charge into the bargain. Also read: Report: Bitcoin Use on Darknet Markets Doubled in 2018 Bitcoin Bandit Faces Fresh Legal Woe Nicholas TrugliaMichael Terpin’s recent lawsuit, filed in the Superior Court of California on Dec. 28, 2018, names the defendant he believes responsible for stealing his cryptocurrency through a social engineering attack. Terpin has been fighting an ongoing battle against network operator AT&T for its complicity in facilitating the unauthorized transfer of his cell number to the thief’s handset. The incident enabled the attacker, who Terpin believes to be Nicholas Truglia, to steal $24 million worth of cryptocurrency. In December, news.Bitcoin.com reported on Truglia’s extradition to California to face charges of stealing $1 million of cryptocurrency through SIM swapping, noting that “high profile figures Truglia is accused of targeting in this manner include Saswata Basu, CEO of 0Chain, and Gabrielle Katsnelson, co-founder of SMBX.” This week, Michael Terpin shared his reasons for filing the latest suit with news.Bitcoin.com. When asked whether the $81 million RICO Act conversion and racketeering charge against Truglia would affect the ongoing suit against AT&T in any way, Terpin noted that the two cases are independent actions, but “we expect to obtain evidence in this suit that will bolster our claims against AT&T. Naturally, any funds we would recover from this suit may adjust the amount of primary damages we can be rewarded against AT&T, but much of our claim against them is for punitive damages.” $60 Million in Crypto on Two Trezors A trove of documents filed by Terpin’s lawyers, Greenberg Glusker, outlines a compelling prima facie case against the so-called bitcoin bandit. This includes a former friend of the 21-year-old, providing a statement in which he recalls that “Nick [Truglia] showed me two thumb drives (Trezors). One had over $40…