A New Bank for Crypto Traders Has Opened in Puerto Rico

A New Bank for Crypto Traders Has Opened in Puerto Rico

San Juan Mercantile Bank & Trust International (SJMBT), a new Puerto Rico-based institution catering to traders of cryptocurrency, has opened for business. Announced Monday, SJMBT has accepted its first client deposit. Licensed last month as an international financial entity (IFE) by Puerto Rico’s Office of the Commission of Financial Institutions (OCIF), the bank is a unit of Mercantile Global Holdings (MGH), which also owns San Juan Mercantile Exchange (SJMX), a soon-to-be-launched “institutional-grade electronic trading platform for digital assets.” The bank will provide custody and settlement services for both fiat and crypto traded on the exchange. SJMBT itself is not insured by the U.S. Federal Deposit Insurance Corp. (FDIC), but a spokesperson told CoinDesk it will place clients’ deposits at correspondent banks that are. Similarly, customers’ digital assets will be held at “approved digital asset custodians,” the company said. The spokesperson would not name any of the bank’s correspondents or custodians, nor its initial clients. Keeping custody and trading under the same roof will bring certain benefits, MGH said. For example, the exchange will take into account customer balances on deposit at the bank when setting trading limits, enabling the bank to settle trades in real time. “As more liquidity venues onboard with SJMX to trade digital assets, SJMBT will provide critical services, such as real-time settlement and account re-balancing, in support of our customers’ trading activities,” said Nick Varelakis, president and chief operating officer of SJMB&T. Finance veterans MGH’s leadership includes veterans of well-known financial companies. Varelakis, for example, is a former executive director of JPMorgan Chase for business architecture and transformation, as well as a former chief operating officer of Puerto Rico’s Noble Bank, best known in the crypto space for its erstwhile relationship with Tether, the company behind the namesake stablecoin. Moreover, the MGH bank and exchange were founded a year ago by J. Robert Collins Jr., former president of the New York Mercantile Exchange (NYMEX, a part of CME Group) and a founder of the Dubai Mercantile Exchange. Trading will launch imminently, the company indicated. “With the new customers onboarded at [the bank], [the exchange] is able to launch exchange operations, via the SJMX Dark Pool platform and through SJMX Blocks, its over-the-counter (OTC) trading venue,” MGH’s press release says. Banking remains hard to come by for cryptocurrency market participants, with only a handful of institutions willing to serve the sector due…

Coincheck Launches Bitcoin OTC Trading Desk for Large-Scale Clients

Coincheck Launches Bitcoin OTC Trading Desk for Large-Scale Clients

Disclaimer: this article previously stated that Coincheck’s new product was aimed at institutional clients. It has been updated for accuracy. Japanese cryptocurrency exchange Coincheck has launched a Bitcoin (BTC) over-the-counter trading desk for large-scale investors. Cointelegraph Japan reported the news on April 1. The Coincheck OTC trading desk will enable clients to directly trade large volumes of Bitcoin — starting from 50 BTC ($207,000 to press time) — between each other using a web interface hosted by Coincheck. Opening hours will be limited to weekdays 10:00-15:00 (JST) and overtime trading and use of the Coincheck app or API trading are not eligible, the exchange clarified in a blog post accompanying the launch of the new OTC desk. Coincheck has written that the new service will allow large-scale players to buy and sell large amounts of crypto swiftly, and it has also indicated that it will consider adding OTC support for cryptocurrencies other than Bitcoin in future. As previously reported, major United States crypto exchange and wallet provider Coinbase launched its own OTC services for institutional clients in November 2018, having gone through a process to become a fully regulated broker dealer by the U.S. Securities and Exchange Commission (SEC) last year. Coincheck — which notoriously suffered an industry-record-breaking $532 million hack in January 2018 — was acquired by Japanese broker Monex Group in mid-April of that year in a move to rehaul its shareholder composition and management. Under the new stewardship of Monex, Coincheck took a series of measures to improve its protection and trading systems, as well as reimbursing those customers affected by the hack. In mid-November 2018, Coincheck resumed crypto trading, as well as joined the Japan Network Security Association in a stated bid to restore its image. The exchange was granted an operating license from Japan’s Financial Services Agency in December 2018.

XRP Exchange-Traded Product Goes Live on Swiss SIX Exchange

XRP Exchange-Traded Product Goes Live on Swiss SIX Exchange

An exchange-traded product (ETP) tracking the price of the XRP cryptocurrency has gone live on Switzerland’s primary stock exchange SIX. Amun AG, the maker of the product, announced the news on Tuesday, saying that the XRP ETP had started trading on the exchange under the ticker symbol AXRP. The firm first revealed it would launch an XRP ETP last month. Hany Rashwan, co-founder and CEO of Amun AG told CoinDesk at the time that his firm already had an approval in place from SIX to issue the product. With today’s launch, Amun AG now has a total of four cryptocurrency ETP products listed on the SIX exchange. Last month, the firm launched an ethereum (ETH)-based ETP (AETH). The month prior a bitcoin (BTC)-based ETP (ABTC) went live, and the firm launched the Amun Crypto Basket Index ETP under the ticker symbol HODL in November. The HODL product tracks the top 5 cryptocurrencies in terms of market capitalization and liquidity. It currently comprises BTC, XRP, ETH, bitcoin cash (BCH) and litecoin (LTC). Rashwan told CoinDesk on Tuesday that Amun AG wants to make investing in cryptocurrency “as easy as buying a stock.” “We seek to create an easy, safe, and regulated way for investors to access the crypto asset class,” he said. As long as any cryptocurrency has “sufficient liquidity, good development records, and no nefarious activity,” the firm would continue adding ETP products, Rashwan indicated, adding: “We plan on launching other strategies, more single asset ETPs, and more indices! We are planning on having 6–8 additional launches this year.” All four ETP products are built and issued by Amun AG’s own platform – the Amun Onyx. The platform also operates the products once they go live on the SIX exchange, according to the statement. The firm said it is also signing on external customers to use the Onyx platform to launch their own traditional and tokenized exchange-traded funds (ETFs). SIX exchange image via Shutterstock

Coincheck Launches OTC Trading Service for Bitcoin

Coincheck Launches OTC Trading Service for Bitcoin

Japanese cryptocurrency exchange Coincheck has launched an over-the-counter (OTC) cryptocurrency trading service aimed at larger clients, the firm said Monday. While the service seem primarily to serve bitcoin trades, Coincheck said it will consider trades in other cryptocurrencies. Coincheck said its OTC trading desk will allow customers to buy and sell a minimum of 50 bitcoins ($205,423 at press time) “quickly” at one go and at “attractive prices.” The service is available on weekdays between 10 a.m. (13 UTC) and 3 p.m. (18 UTC) Japan time. In an OTC trading service, two parties trade directly with each other, unlike on an exchange where orders are matched between buyers and sellers. Coincheck suffered a $530 million hack in January 2018, losing around 500 million NEM tokens from its digital wallets. The exchange was then acquired by Japanese online brokerage Monex Group for $33.5 million in April last year. The cyber-attack also forced Coincheck to suspend its services for some months. By November, however, it had reinstated services for all listed cryptos on its platform. Coincheck has since received a regulatory license in Japan and is now a registered entity with the Kanto Financial Bureau under the country’s Payment Service Act. It’s previously said it plans to resume other features, including leveraged transactions, Japanese yen depositing through convenience stores and a scheme that lets users pay utility bills with crypto. A number of exchanges have recently moved to launch OTC trading services. Last week, the U.S. affiliate of the Huobi Global launched an institutional group for OTC cryptocurrency trading. While earlier this year, Bithumb Global and Bittrex also launched similar services. Bitcoin, yen image via Shutterstock 

Bitcoin Price Jumps to 4-Month High Above $4,900

Bitcoin Price Jumps to 4-Month High Above $4,900

The price of bitcoin, the world’s largest cryptocurrency by market capitalization, shot up seven percent within 30 minutes on Tuesday to reach its highest point in four months. CoinDesk data shows bitcoin’s (BTC) price spiked Tuesday at 04:32 UTC to $4,715, accompanied by a large injection of daily bullish volume to close out the hourly trading period $668 up. At press time, bitcoin’s price has risen 19.17 percent over a 24-hour period, trading at $4,926, and has broken out from a defined area of resistance at $4,192 and continues its warpath of higher highs and higher low. Bitcoin’s market capitalization has also risen significantly, up $5.1 billion on the day to where it currently sits at $78.8 billion, its largest amount since Nov. 22, 2018. The move came at a time of contention for bitcoin bulls providing relief and breaking through not one but three key resistance levels at $4,200, $4,420 and  $4,567. Bitcoin is just one of many cryptocurrencies enjoying a large injection of liquidity in the markets with Ether and litecoin up 5.5 and 8.1 percent respectively while Tron leads the pack in the top 15 and is currently up 12 percent at the time of writing. Disclosure: The author holds USDT at the time of writing. Bitcoin image via Shutterstock

Exchange Volumes May Be Fake, But Bitcoin’s Value Is Real

Exchange Volumes May Be Fake, But Bitcoin’s Value Is Real

Michael J. Casey is the chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative. The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday exclusively to our subscribers. The mainstream reaction to Bitwise’s recent report showing that 95 percent of total reported bitcoin trading is fake was, predictably, to see it as further proof of the lawlessness and scammy nature of the cryptocurrency world. But just as important as that statistic were the ones that the asset manager used to describe trading activity on the 10 “real exchanges” hosting the 5 percent that is not made up of wash trades and other manipulations. Within its presentation seeking approval from the Securities and Exchange Commission for a bitcoin-based exchange-traded fund (ETF), Bitwise included one slide with a screenshot from Coinbase Pro showing a mere 0.0003 percent bid/offer price spread and stated that it had to be “among the tightest quoted spread of any financial instrument in the world.” This supports one the key arguments in favor of cryptocurrencies: that by cutting out the many financial intermediaries needed to execute trades in the traditional financial system, this technology achieves impressive efficiency and cost reduction for market participants. More than merely a critique of the price manipulation rife across bitcoin markets, then, the Bitwise report is a demonstration of cryptocurrencies’ great potential. Ironically, it also convincingly makes the point that to achieve that potential, there needs to be greater regulation of crypto trading. Thin liquidity, yet high efficiency The thin price spreads are especially remarkable when you consider that authentic bitcoin trading represents a drop in the ocean compared with those traditional markets where price spreads tend to be tight. For example, daily turnover in the U.S. Treasurys market, considered one of the most price-efficient markets in the world, tends to range between $550 billion and $1 trillion, whereas Bitwise estimates worldwide daily authentic bitcoin trading to be just $273 million. Consider also that bitcoin exchanges are typically open to retail investors, whereas Treasurys are almost entirely traded by institutional investors moving very large amounts of money. In traditional markets, size dictates liquidity, which in turn determines price efficiency. But this data shows that bitcoin is capable…

Coinbase Expands Into Cross-Border Payments

Coinbase Expands Into Cross-Border Payments

American major cryptocurrency exchange Coinbase has expanded into cross-border payments. Coinbase revealed the development in an announcement on March 28. Coinbase customers can now transfer funds to any user with a Coinbase account around the world using Ripple (XRP) and the exchange’s stablecoin USDCoin (USDC) with no fee. The development reportedly enables users to send and receive money instantly, as well as convert them into local currency. March saw several new developments at Coinbase, including a service linking user accounts on its main platform to its Coinbase Wallet app, and a new market structure for the exchange’s professional trading platform, Coinbase Pro, which aims to increase liquidity, enhance price discovery and ensure smoother price movements. Coinbase added support for USDC last October, making it the first stablecoin to trade on the platform. The coin is purportedly 100 percent collateralized with U.S. dollars, and was launched last fall by CENTRE, an affiliate of crypto payments firm Circle. Earlier this month, India’s Federal Bank, a commercial private bank, began using Ripple’s network for cross-border remittances. The partnership with Ripple came as part of a wider initiative to apply new technologies to the bank’s remittances network. Also on March 28, Federal Bank launched two remittance platforms in the United Arab Emirates for making payments to India.

How Crypto Is Taxed in the US: A Taxpayer’s Dilemma

How Crypto Is Taxed in the US: A Taxpayer’s Dilemma

Last year was a bear market for cryptocurrencies. Many investors who did not know how to hedge their cryptocurrency investments saw these investments lose value from the market highs of 2017. Facing the deadline to report their taxes by April 15, 2019, United States individual taxpayers may wonder what their United States tax reporting obligations are if they held, donated or sold/exchanged their cryptocurrencies at a loss during 2018. A taxpayer’s dilemma Let’s imagine a potential 2019 taxpayer sitting in front of his tax advisor and feeling embarrassed to tell him that he had lost 90 percent of a 100K investment in cryptocurrencies when the cryptocurrency markets experienced a downturn during 2018, with leading cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) down 80 percent or more. The taxpayer invested heavily into crypto at the end of 2017 and beginning of 2018 — which he said he regretted everyday since then, because he lost almost all of it. The tax advisor assured the taxpayer that this would give rise to a taxable event only if he sold, exchanged or donated his cryptocurrency during 2018, and that these things would need to be reported on his U.S. tax return — noting, however, that holding cryptocurrencies would not give rise to a taxable event but may give rise to tax-reporting requirements if the cryptocurrencies were held in a foreign financial account. Cryptocurrency hodlers If a taxpayer for 2018 has not sold, exchanged or donated the cryptocurrency he bought at the end of 2017 or beginning of 2018 and is still holding them, then there is no taxable event to report on his U.S. tax return. Tax-reporting requirements would arise if the taxpayer held these cryptocurrencies in a foreign financial account and if mandatory financial thresholds were met under Foreign Bank Account Report (FBAR) and Foreign Account Tax Compliance Act (FATCA) reporting requirements, according to a letter from the American Institute of Certified Public Accountants (AICPA) to the Internal Revenue Service (IRS). FBAR: A taxpayer with a financial interest in or signatory authority over a foreign financial account must file a foreign bank account report (FBAR) FinCEN Form 114 if the aggregate value of the foreign financial account exceeds $10,000 at any time during the calendar year. Noncompliance with…

Alt Season? Over 100 Crypto Assets Outperform Bitcoin in Q1 Surge

Alt Season? Over 100 Crypto Assets Outperform Bitcoin in Q1 Surge

The first quarter of 2019 was a breath of fresh air for the cryptocurrency market, having recorded its first quarterly increase in overall network valuations since the fourth quarter of 2017. Interestingly, however, bitcoin is among the least significant price gainers so far this year while still flashing a noteworthy Q1 increase of 10 percent. What this means is that a sizable portion of the market’s recent growth came from the many other cryptocurrencies trading on exchanges today.  In fact, data from analytics provider Messari reveals that 118 cryptos increased more in price on a year-to-date basis than bitcoin, with several boasting triple-digit percent increases during that period. As a result, the total network value of all cryptocurrencies – excluding bitcoin – came within 1 percent of suprassing that of bitcoin’s in March. With Q1 of 2019 now in the history books, let’s dive into some of the more notable individual performances by way of breaking down their respective asset size classes and market sectors.  Performances by asset size There is a wide spectrum of assets, in the cryptocurrency market. These range from some of the biggest, like ethereum (close to $15 billion), to the smallest, like dancoin (DAN), which is worth just over $3 million. Hundreds of networks fall in between.  The table below depicts how Messari segments crypto-asset sizes into the four groups (large cap, medium cap, small cap and micro cap), as well their respective best and worst performers for the Q1 period. While the highest-ranked cryptocurrencies in terms of asset size tend to be the most well-known coins in the industry (they trade with the most volume), data shows they are not always the strongest performers. As can be seen, the top performers in both the medium and small-cap segments saw significantly better Q1 performances than the leader of the large-cap segment, binance coin (BNB), the price of which nearly tripled during that period.   Ravencoin’s (RVN) performance surpassed all other medium cap cryptos, boasting a 386 percent increase in Q1, almost all of which was achieved in the month of March when its price jumped from the monthly open of $0.013 to its close of $0.061, according to data from Binance.  Pchain (PAI) was the best performer in the small-cap segment as…

Tether Daily Transaction Volume Hits All-Time High

Tether Daily Transaction Volume Hits All-Time High

Tether (USDT), the most used fiat-pegged stablecoin, has hit an all-time high by the number of daily transactions, according to blockchain data provider Coin Metrics. On March 31, the amount of Tether transactions hit a high of 38,150, representing a new milestone in the adoption of the major stablecoin launched in 2015. All-time transaction volume of Tether. Source: Coin Metrics At press time, Tether is ranked the second top cryptocurrency by daily trading volume at $9.4 billion, while Bitcoin’s (BTC) daily trading volume amounts to $10.2 billion, according to data from CoinMarketCap. Tether has long been the subject of controversy in crypto community, having been criticized for Bitcoin price manipulation back in 2017. Crypto investor and entrepreneur Michael Novogratz also condemned Tether for its purported lack of transparency. While it was purportedly pegged to the United States dollar on a 1:1 basis, Tether was also suspected of operating a fractional reserve while issuing more tokens than they have backing for, and sending them to Bitfinex crypto exchange. Following a subpoena by U.S. regulators to both Bitfinex and Tether,  Tether ordered an unofficial audit, which found that stablecoin had the appropriate amount of backing dollars. In mid-March, Tether again drew attention after social media users noticed an update on Tether’s website, saying that USDT is not fully backed by U.S. dollars and may include other assets and receivables from loans made by Tether to third parties. Stablecoin projects have become increasingly popular recently. Recently, the Universal Protocol Alliance announced the launch of its own euro-pegged stablecoin in April.