IBM Quietly Enters Crypto Custody Market With Tech Designed for Banks

IBM Quietly Enters Crypto Custody Market With Tech Designed for Banks

IBM is coming to the crypto custody space. Later this month, Shuttle Holdings, a New York investment firm, will launch the beta version of a custody solution for digital assets built on IBM’s private cloud and encryption technologies. The companies won’t be storing cryptocurrencies and tokens themselves, but offering tools for others to do so. Potential users include banks, brokers, custodians, funds, family offices and high net worth investors who want to do self-custody, as well as exchanges, Brad Chun, Shuttle’s chief investment officer, told CoinDesk. “We have a list of selected clients that we are launching limited service with this month,” Chun said. The service is “not open to the public yet and there is a wait list to get into our beta.”  IBM showcased the solution at its “Think 2019” conference last month in San Francisco, where Nataraj Nagaratnam, the tech giant’s CTO and director of cloud security, called storage of crypto a prime use case for Big Blue’s cloud.  “What better example than taking a financial technology that is changing the world. Look at digital assets; how do you secure the data? … [This is] top of mind for a lot of people in the financial industry,” Nagaratnam said, before welcoming Chun onstage. When contacted by CoinDesk, IBM referred most questions to Chun. But Rohit Badlaney, director of IBM’s “Z As a Service” cloud solution, talked up IBM’s involvement in the forthcoming Digital Asset Custody Service (DACS). “For DACS, the on-premise pervasive encryption capabilities offered by IBM LinuxONE was a key differentiator in choosing IBM as the most secure platform for their offering,” Bedlaney told CoinDesk through a spokeswoman. Slide from Brad Chun’s presentation at IBM’s Think conference in February The move suggests IBM is wading deeper into the digital asset space, after developing the Hyperledger Fabric private blockchain for enterprises and more recently getting involved with cryptocurrency through its work with the Stellar Foundation. While crypto custody was once the preserve of wallet providers and crypto exchanges, the promise of institutional investment entering the digital assets space has prompted a race to come up with safe, industrial-grade solutions that are also familiar in terms of usage to these large players. Not cold storage The custody service that Shuttle and IBM are offering differs greatly from…

Binance’s Trust Wallet Adds Support for XRP, Credit Card Payments

Binance’s Trust Wallet Adds Support for XRP, Credit Card Payments

Cryptocurrency exchange Binance’s official wallet, Trust Wallet, now lets users buy cryptos with credit cards. The new payment option is being offered in partnership with Israel-based payments processor Simplex, according to an announcement from Binance on Tuesday. At the same time, the exchange said, Trust Wallet is adding support for XRP, the third largest cryptocurrency by market capitalization. Trust Wallet users can now, therefore, purchase XRP, bitcoin (BTC), bitcoin cash (BCH), litecoin (LTC) and ether (ETH) with “major” credit and debit cards. The announcement did not specify which cards are supported or other details such as fees. “We want to increase access to crypto and decentralized applications for all users,” said Viktor Radchenko, founder of Trust Wallet. He added: “Adding credit card payments is one piece to furthering cryptocurrency adoption and realizing our larger vision in helping to bring the freedom of money, and we will continue to integrate more blockchains and features to Trust.” Binance, the world’s largest cryptocurrency exchange by adjusted trading volume, acquired Trust Wallet last July. The wallet was compatible with only ethereum and ethereum-based tokens at the time. Since then, the exchange has enabled support for multiple cryptocurrencies and currently supports 17 tokens and “hundreds” of decentralized apps or dapps, according to Tuesday’s announcement. Binance further said that Trust Wallet will be a native wallet to its upcoming decentralized exchange, Binance DEX, which is expected to launch in early Q2 of this year. The platform launched for public testing on Feb. 20. Last January, the exchange itself added support for credit cards purchases, also in partnership with Simplex, allowing users to buy bitcoin, ether, litecoin and XRP. Credit cards image via Shutterstock 

In the Daily: Amun Funding Round, Coinsource Two-Way ATM, Etoro Wallet

In the Daily: Amun Funding Round, Coinsource Two-Way ATM, Etoro Wallet

In this edition of The Daily we cover a funding round by a Swiss startup that lists crypto instruments on the SIX exchange, an expansion of the Coinsource ATM network using a new business practice, and a new feature added to the Etoro wallet. Also Read: Online Bank Swissquote to Add Crypto Custodial Services Amun Raises $4 Million in Initial Funding Round Swiss crypto asset investments startup Amun AG has announced it has completed its first funding round. The round raised $4 million for Amun, and brought on board a number of known industry figures including Adam Draper, founder of Boost VC, Graham Tuckwell, founder of ETFS Capital, and Greg Kidd, co-founder of Hard Yaka. The round also saw participation of four family offices from the U.S., Switzerland and the Middle East. Amun is a platform for creating crypto indices and issuing crypto products, in addition to listing, settling, and custody of physically-backed crypto products on public exchanges. Last year it listed an instrument on the Swiss SIX Exchange called HODL, which is a physically backed exchange-traded product (ETP) based on five popular cryptocurrencies (BTC, ETH, BCH, XRP and LTC). Hany Rashwan, the CEO of Amun, explained that the company plans on using the newly raised funds to keep investing in technical infrastructure, to launch additional crypto-tracking exchange-traded products across multiple geographies, and to help others bring crypto assets to the public markets. Coinsource Expands in Durham, North Carolina Coinsource, the Texas-based cryptocurrency ATM network, has reached a partnership with data security company Halo Privacy, expanding its existing network with a two-way (buy and sell) machine in Durham, North Carolina. The partnership makes Halo Privacy the first company to license the ATM network’s technology and operate one of its machines. Sheffield Clark, the CEO of Coinsource, stated that in entering this new stage of business practice the company remains committed to expanding its service to all of the U.S. and eventually reaching international markets. Durham, North CarolinaJamie Marden, director at Halo Privacy, explained: “Partnering with Coinsource to develop BTM networks is a core part of our strategy in the space and they have been outstanding counterparts. We plan to roll out to new markets over the course of 2019 and are excited be contributing to…

Crypto Startup Behind Alibabacoin Agrees to Stop Using ‘Alibaba’ Name After Legal Action

Crypto Startup Behind Alibabacoin Agrees to Stop Using ‘Alibaba’ Name After Legal Action

Dubai-based crypto firm ABBC Foundation has agreed to stop using the name “Alibaba” for its cryptocurrency after legal action by Chinese e-commerce giant Alibaba Group, Reuters reported on March 11. The decision from ABBC Foundation is reportedly part of a settlement of an almost year-long lawsuit brought by Alibaba against the crypto startup. ABBC Foundation, previously also known as Alibabacoin Foundation, reportedly said that it regretted confusion caused by its former use of the name “Alibabacoin” for its firm and cryptocurrency. Per the report, the company’s coin will now be called ABBC coin. As Cointelegraph reported in April last year, Alibaba had previously sued the company for copyright infringement after the latter’s initial coin offering (ICO) initially raised $3.5 million. Later, in May 2018, a United States court ruled against Alibaba’s request for an injunction against the startup. However, despite the setback, in October last year, Alibaba won a preliminary injunction against ABBC Foundation (at the time Alibabacoin Foundation) in a lawsuit over the misleading use of Alibaba in their name in the U.S. District Court for the Southern District of New York. Recently, Liu Song, Alibaba’s vice president, said in an interview that the company is considering blockchain tech implementation for cross-border supply chains. In January, news broke that the Pakistan-based subsidiary of global telecommunications giant Telenor had launched a cross-border remittance service powered by the blockchain system of Alibaba’s payment subsidiary, Alipay.

Client Demand for Crypto Payments Needs Cautious Response From Lawyers, Expert Says

Client Demand for Crypto Payments Needs Cautious Response From Lawyers, Expert Says

Cryptocurrency payments are a topic of increasing interest for United States lawyers following a recent conference panel, Bloomberg Law reported on March 11. Referencing participants in the 18th Annual Legal Malpractice & Risk Management (LMRM) Conference, which ran from March 5-7 in Chicago, the publication noted the prevalence of cryptocurrency payments in the legal profession, stemming from client demand. As the cryptocurrency industry and markets mature, more clients are asking to use digital assets for payment. Doing so can nonetheless yield mixed results, experts advised, with upfront bill payments differing from retainers, which remain in segregated funds for long periods. “Cryptocurrency does not fit with the model for trust funds — lawyers should not accept cryptocurrency as trust money,” Matthew K. Roskoski, deputy general counsel for Latham & Watkins, who joined the LMRM panel, summarized. Continuing, Roskoski highlighted the risks, but suggested dealing with initial coin offerings (ICOs) constituted another level of difficulty for legal professionals. “Working in ICO space [sic] is subject to risk and a liability scheme we have no track record in,” he said, adding: “[But] there’s real money to be made there so people don’t want to wash their hands of it entirely.” As Cointelegraph reported, the U.S. in particular continues to languish in a gray area regarding the acceptance of cryptocurrency as payment. Ongoing state-by-state differences, as well as the changeable nature of the regulatory landscape, have meant interaction with tokens themselves can be a headache for prospective investors.

SEC Chair Clayton Affirms Agency’s Stance Ether Is No Longer a Security

SEC Chair Clayton Affirms Agency’s Stance Ether Is No Longer a Security

The U.S. Securities and Exchange Commission’s chairman has seconded a colleague’s analysis that found the world’s second-largest cryptocurrency likely does not qualify as a security. Last year, SEC Director of Corporation Finance William Hinman said during a speech that ethereum, the No. 2 by market cap, did not exhibit the properties of a security. At the time, he explained that he did not see a central group as being responsible for the cryptocurrency. Congressman Ted Budd – with industry advocacy group Coin Center – asked for clarification on whether SEC Chairman Jay Clayton agreed with Hinman’s remarks. The regulator has now responded by saying he agrees “that the analysis of whether a digital asset is offered or sold as a security is not static and does not strictly inhere to the instrument.” A cryptocurrency may be sold as a security when it is first launched if it meets the definition of an investment contract, but the digital asset may later be sold or offered to consumers without being investments, Clayton wrote in a letter dated March 7, adding: “I agree with Director Hinman’s explanation of how a digital asset transaction may no longer represent an investment contract if, for example, purchasers would no longer reasonably expect a person or group to carry out the essential managerial or entrepreneurial efforts. Under those circumstances, the digital asset may not represent an investment contract under the Howey framework.” Past statements Clayton’s letter echoes comments he made at CoinDesk’s Consensus: Invest last year, where he likened digital assets to tickets for a new play. At the time, Clayton suggested that a group of investors might be promised “a suite of tickets” in return for funding the play, which would qualify these tickets as securities. However, if at a later date, tickets are only sold to give each theatergoer a chance to see the play, “that’s decentralized,” he added. This aspect of decentralization is important, according to Clayton. He’d earlier touched on the point while discussing bitcoin, noting that “generally an asset like bitcoin, where [it’s] decentralized,” does not fit within a securities designation. “No one is creating it for their own … control of bitcoin, it’s designed to be a payment system replacement for sovereign currencies,” he said. “We’ve determined that that doesn’t…

Malta Teams With Crypto Security Firm to Manage Financial Crimes Risk

Malta Teams With Crypto Security Firm to Manage Financial Crimes Risk

Malta is turning to crypto sleuthing startup CipherTrace for technical help addressing the risk of financial crimes in its licensed digital asset industry. The Malta Financial Services Authority (MFSA) announced March 11 that it would integrate CipherTrace’s Compliance Monitoring product to “protect consumers, investors and business partners.” The tool uses blockchain analytics and forensics to look out for “suspicious” addresses and wallets, according to CipherTrace’s website. The firm says it profiles cryptocurrency exchanges, ATMs, coin mixers and money laundering systems, as well as known criminal addresses, to score transactions and gauge the level of risk. Machine learning and analytics are used to help estimate transactional risk based on activity related to the identified addresses and wallets. The MFSA said the system also de-anonymizes blockchain addresses, allowing regulators to “evaluate and monitor the trustworthiness of virtual asset businesses.” MFSA CEO Joseph Cuschieri said: “Being strongly aware of the money laundering and financing of terrorism risks associated with entities operating in this sphere, the decision has been taken to engage the services of CipherTrace in order to reduce fraud and detect transactions with illegal sources of funds.” CipherTrace’ said in an email that the integration would provide risk ratings on Malta’s crypto operators to “evaluate their trustworthiness and continuously monitor them for compliance.” The MFSA will track the risks relating to digital asset businesses, including cryptocurrency exchanges, collective investment schemes and initial coin offerings (ICOs). “Cryptocurrency businesses often have difficulty establishing trust and maintaining banking relationships because of their perceived risk,” said Dave Jevans, CEO of CipherTrace. CipherTrace’s tools can help financial institutions decide which crypto businesses to trust and avoid declining “valuable customers,” he added. The company raised $15 million from investors including Mike Novogratz’s Galaxy Digital, it announced on Feb. 20. The round was led by Aspect Ventures, with Neotribe Ventures and WestWave Capital also participating. Malta image via Shutterstock

EU Report: Blockchain Adoption Will Be Led by Permissioned Platforms

EU Report: Blockchain Adoption Will Be Led by Permissioned Platforms

The “first wave” of blockchain adoption will be led by permissioned platforms focused on specific use cases or user bases, according to a new EU report. The EU Blockchain Observatory and Forum published the “thematic report” last week, produced on its behalf by ConsenSys AG and titled “Scalability, Interoperability and Sustainability of Blockchains.” The document argues that blockchains focused on meeting the specific needs of users provide “a great deal of flexibility” compared to public blockchains. Builders of private platforms also have more freedom to design for performance and security, the authors say. The EU organization therefore concludes that a small number of global blockchain networks will emerge as “the backbone of a Web of Value.” However, it continues, three key challenges remain: scalability, that is, the ability to make large volumes of transactions at high speed; interoperability, being able to exchange data across blockchains; and sustainability, “environmentally responsible” platforms with long-term viability. The group states: “It seems clear to us that a multiverse of independent blockchains that cannot interoperate would be severely limited. Users of blockchain platforms will find it beneficial to be able to exchange data and make transactions between chains too: a healthcare chain connecting to an insurance chain, a real-estate chain connecting to a construction materials or manufacturing chain, and so on.” If blockchain platforms are to be successful, they should be able to scale to meet the needs of their target audience, it added. The EU forum also expects blockchain technology to “become less energy-intensive over time.” As for what will create successful large-scale blockchain projects, the report said teams will need “a clear vision” of what they want to achieve, “a clear reason” for using blockchain over traditional technologies, “strong governance structures” and “sharing of effort and expertise among diverse stakeholders.” While Europe has been “very supportive” in the blockchain space, the authors said, there is “much still to be discovered and developed.” Therefore, the organization believes that “a light-touch approach, allowing for experimentation,” is the best way forward at present. The authors write: “Both the US and China have expressed strong support for blockchain research, with the former even going so far as to include it as part of its USD 700 billion defence budget. We therefore recommend that the EU…

Korean Actor Invests in Blockchain Seafood Trade Startup

Korean Actor Invests in Blockchain Seafood Trade Startup

Popular South Korean actor and businessman Bae Yong-joon has invested an undisclosed sum in blockchain-based seafood trade startup Seamon. Revealing the news exclusively to CoinDesk Korea, Seamon head Lee Jung-hoon said that, while he cannot disclose the amount of Bae’s investment, it is “a meaningful amount” worth “more than tens of millions” of South Korean won. One hundred million won is worth around $88,510 at press time. Lee further said that Bae has long been interested in the food businesses, including marine products. So, when Lee asked Bae to be an advisor to the Seamon project, he instead “signed an investment contract last month.” Seamon is developing a blockchain-based seafood transaction and smart contract system, according to information from its white paper. The project aims to make global seafood transactions “as transparent as possible, reduce unnecessary expenses, and achieve the faster and safer international transactions.” The team is also creating a cryptocurrency called Seamon coin, which will be used in payments and as a store of value. It is also planning to launch an exchange called SeamonX for seafood trading market in Q3 or Q4 of this year, the white paper indicates. The project aims to address common problems with the international trade in marine products such as defaulting on payments, or late payments. With marine products, this is a particularly vital issue to solve, as their freshness quickly expires, the report says. Importers will be able to purchase Seamon coins from SeamonX and exchange them for products, making payments in real time. Exporters will be able to exchange the tokens for fiat currencies like the U.S. dollar, or the stablecoin tether (USDT), Lee said. Seamon coin is already listed on the BCEX exchange with the ticker symbol SMEX, according to CoinDesk Korea. The exchange will also carry out a free distribution, or “airdrop,” of about 5 billion won ($4.42 million) in tokens from March 25. CoinDesk Korea also adds that the news marks Bae’s first known investment in a blockchain startup. His net worth is estimated at around $135 million. Korean fish market image via Shutterstock 

Russia: Central Bank Suggests Limiting Sale of Crypto Assets for ‘Unqualified Investors’

Russia: Central Bank Suggests Limiting Sale of Crypto Assets for ‘Unqualified Investors’

The Central Bank of Russia wants to set an annual limit for so-called “unqualified investors” that want to purchase digital assets, local business media giant RBC reported on Tuesday, March 12. According to the documents obtained by RBC, the bank wants to amend the current draft crypto bill, dubbed “On Digital Financial Assets,” which recently passed a second of three readings in Russia’s parliament, the State Duma. The central bank’s paper recommends equating investor limits to the ones set in a draft bill on crowdfunding, which is also being reviewed by the Russian parliament. The head of the State Duma’s committee on financial markets Anatoly Aksakov told RBC that the threshold will likely be established at around 600,000 rubles (about $9,100) per year — the same as the yearly investment limit in crowdfunding projects. If the parliament passes the bill with the central bank’s current recommendations, unqualified investors will still be able to purchase and digital assets that were issued within the country, the report notes. Moreover, investors will be allowed to sell or purchase such tokens without intermediaries. The Central Bank of Russia considers an investor “unqualified” if they have less than a one year minimum of investment experience. In order to be considered a qualified investor, one needs to obtain a qualification certificate — given they meet the minimum individual investment time requirements — or have at least two years of work experience in a company that is considered a qualified investor by the state. As per RBC, the government also wants to establish requirements for financial intermediaries involved in crypto asset trading. According to the current version of the draft, banks, depositories and stock exchanges will be obliged to track all crypto transactions and reveal the amounts traded by unqualified investors to other counterparties, institutions or government bodies, if necessary. The bill “On Digital Financial Assets,” which was initially approved in a first reading by the State Duma back in May, has raised a major discussion within Russian legal discourse. Its second reading was repeatedly postponed by legislators. In February, Russian President Vladimir Putin set a deadline for the government to adopt regulations for the digital assets industry, urging MPs to adopt the bill during the spring session of 2019. More recently,…