Japan is putting in place new, stricter rules for cryptocurrency margin trading from next year. According to a report from Nikkei Asian Review on Tuesday, the Japanese Cabinet, the executive agency of the country’s government, has approved draft amendments related to financial instruments and payment services laws that include two notable changes related to cryptocurrencies. Firstly, there will be a cap on cryptocurrency margin trading in line with the forex trading, at two-to-four times the initial deposit. Margin trading means using borrowed funds from a broker or exchange to trade an asset. Secondly, all cryptocurrency exchanges in the country that offer margin trading will be mandated to register with the government within 18 months of the date the rules come into effect – some time in April 2020, according to the report. Non-compliant platforms will face closure. The new registration scheme will exist over and above the existing licensing requirements, in which cryptocurrency exchanges are mandated to obtain a license as per the payment services law which went into effect in April 2017. According to the report, speculation has outstripped cryptocurrency’s use as a payment method. Citing figures from self-regulatory group, the Japan Virtual Currency Exchange Association, it said crypto margin trading in Japan rose to about 8.42 trillion yen ($75.6 billion) in December 2018 – a figure around 11 times higher than crypto/cash conversions (777.4 billion yen or $6.9 billion). The registration scheme would also separate cryptocurrency exchanges that provide margin trading and those who issue tokens through initial coin offerings (ICOs), in order to protect investors from Ponzi schemes, Nikkei indicated. Back in January, the nation’s Financial Services Agency said it was looking to bring unregistered investment firms that solicit funds in cryptocurrencies rather than cash under the country’s Financial Instruments and Exchange Act. Japanese parliament image via Shutterstock
In this edition of The Daily we cover the resumption of trading on the hacked New Zealand exchange Cryptopia, the American digital assets industry’s increased lobbying of politicians, and a wanted ad by the Visa Crypto team. Also Read: Tel Aviv Court Rules Bank Can’t Close Crypto Miner’s Account Cryptopia Resumes Trading, Plans Rebate The New Zealand-based cryptocurrency exchange Cryptopia is now open for trading again. The platform, which was hacked at the start of the year losing almost 10 percent of its assets, has announced that it’s resumed trading on 40 trade pairs that its team has quantified as secure and will continue to expand this list as they clear more coins. The Cryptopia team also sent out an email to update customers on the progress they are making, promising there will be a rebate for those who lost funds. Users will start to see withdrawals of their lost funds and a deposit of Cryptopia Loss Marker (CLM) instead. The platform explained that CLM is not a coin, it can’t be traded as yet, and is rather just a number in the database that represents the loss for each coin for each user in $NZD at the time of the hack. The rebate won’t be immediate as the company still needs to take steps ensure that the planned reimbursement process follows local laws. Crypto Industry Lobbying Intensifies in US As regulators and lawmakers get more involved in any market, businesses in the field usually feel they have to respond by hiring lobbyists to represent their interests with politicians. As such it should come as no surprise that there’s been a strong regulatory push in the U.S. to control the digital assets market, such as instructing projects who they can offer tokens to and classifying certain coins as securities. This in turn has led to cryptocurrency companies stepping up their political game. A new report shows that the industry almost tripled its lobbying efforts over the last year. K Street, the center of lobbying in Washington, D.C“Lobbying on cryptocurrencies and the blockchain technology underpinning them is a niche but growing industry on K Street,” Politico reported on Monday. “The number of entities that reported lobbying on blockchain issues has nearly tripled over the past year,…
United States-based cryptocurrency exchange and wallet service provider Coinbase has added support for Stellar Lumens, according to an announcement published on March 18. The update states that users can now store, buy, and send Stellar’s cryptocurrency, the Stellar Lumen (XLM), on the Coinbase website, as well as on the Coinbase iOS and Android apps. The publication underlines that the newly added cryptocurrency will be available for the majority of the customers, with the exception of Coinbase users in the United Kingdom or in the U.S. state of New York. Last week, the company’s professional trading platform, Coinbase Pro, announced the start of accepting XLM deposits. As Cointelegraph reported on March 17 in a market analysis, the price of the Stellar’s cryptocurrency XLM has risen sharply, making XLM the best performing major cryptocurrency of the past week. Yesterday, IBM and Stellar jointly announced that six international banks have signed letter of intent to issue their own fiat-backed stablecoins on IBM’s cross-border payment network, which is based on Stellar. At press time, XLM has gained around 5.66 percent on the day and is trading around $0.115, according to data from CoinMarketCap.
The United States Securities and Exchange Commission (SEC) is soliciting industry input as it potentially reconsiders existing custody rules in specific cases of digital asset trading and settlement. The SEC launched its information gathering initiative in an open letter to Karen Barr, president and CEO of the Investment Adviser Association, on March 12. Currently, the Custody Rule (Rule 206(4)-2) of the Investment Advisers Act of 1940 determines rules that aim to protect investors who delegate custody of their funds or securities to professional investment advisors. As the letter outlines, such custodial authority carries an ”increased risk of misappropriation or misuse of [investors’] assets,” and investment advisors are thus legally bound to register with the SEC and to comply with a series of rules for sound custodial practices. The SEC states that its appeal for input regards the application of the Custody Rule to digital assets, and more specifically as to whether any revisions to the rule might be necessary “regarding the regulatory status of investment adviser and custodial trading practices that are not processed or settled on a delivery versus payment (“Non-DVP”) basis.” A DVP settlement procedure is where a buyer’s payment for a given security is due at the same time as that security’s delivery. As Katherine Wu — director of business development at New York City-based crypto research firm Messari — has noted in her coverage of the SEC initiative, an example of DVP at work is the US DTC (Depository Trust Corporation) system. Here, the DTC clearing house acts as an SEC-registered custodian and intermediary that ensures the secure payment and transfer of securities between parties. In cases of non-DVP settlement procedures — i.e. where payment is made after the delivery of a security — the settlement risk is deemed to be higher. The SEC is thus soliciting input on non-DVP settlement in the digital asset space, regarding both the settlement process of peer-to-peer digital asset transactions, as well as intermediated settlement that involve exchanges or over-the-counter trading platforms. Among the questions in its letter, the SEC solicits information on what types of digital asset instruments trade on a non-DVP basis, what role custodians play in non-DVP digital asset trading and how they currently mitigate risks. Wu, who worked as a legal…
Blockchain staking startup Bison Trails has raised $5.25 million in a series seed funding round backed by Mike Novogratz’s Galaxy Digital. Announcing the news on Friday, Bison Trails said the round was led by Accomplice and Initialized Capital, with Notation Capital, Homebrew, Distributed Global and Charge Ventures and other angel investors also taking part. The New York-based firm did not provide specific details on how it plans to utilize the funding, other than “to underscore our mission.” Founded last year, Bison Trails aims to enable a future where blockchain participation is “easy, more transparent, and truly decentralized.” The firm allows clients to launch “highly-available, and geographically distributed” nodes on blockchain networks, and offers infrastructure solutions, including staking, validating, voting, transacting and securing blockchain protocols. “The infrastructure that we’re building today will pave the way for an entire generation of new decentralized companies, services, and participants to access blockchain economies and networks,” Bison claims. Its platform will launch in “coming weeks” to early partners. Staking – supporting a network by holding its tokens and running a node for rewards – is a use case that has been drawing attention from investors in recent months. Back in January, blockchain staking-as-a-service startup Staked raised $4.5 million in a seed round led by blockchain investment firm Pantera Capital. Staked offers institutional investors with the technical infrastructure for non-custodial staking services. Other participants in Staked’s seed round included Coinbase Ventures, Global Brain, Digital Currency Group, Winklevoss Capital, Fabric Ventures and Blocktree Capital. U.S. dollars image via Shutterstock
Cryptocurrency mining giant Bitmain has launched a new miner for the privacy-oriented cryptocurrency zcash, which it claims, has three times more hashing power than its predecessor. Announcing the news on Tuesday, Bitmain says the new ASIC (application-specific integrated circuit), called the Antminer Z11, is designed to mine cryptocurrencies that are based on the Equihash algorithm, such as zcash. The company adds the new product offers a hashing power of 135K sol/s (solutions per second), which is “three times more powerful” than its previous Equihash miner, the Antminer Z9, which was released in last May. Sol/s is generally equivalent to h/s (hashes per second), which is the number of hash computations created per second in cryptocurrency mining. Bitmain further claims that the Antminer Z11, adopting a 12-nanometer chip, is more energy-efficient due to the new internal circuit structure, which can save 60 percent of electricity cost compared to that of the Z9. Bitmain first launched the Antminer Z9 at a time when the zcash community was having an ongoing debate on whether the network should be altered to become ASIC-resistant, meaning the network would prevent the participation of miners using ASICs, which are in general more powerful than ordinary Graphic Processing Units. However, in June last year, members of the zcash community at the Zcon0 conference voted not to prioritize research efforts on changing the zcash network’s rules in order to make it ASIC-resistant. Just last month, Bitmain also launched a new 7-nanometer mining processor, called the BM1397, which is designed for proof-of-work cryptocurrencies based on the SHA256 algorithm, such as bitcoin and bitcoin cash. Zcash image via Shutterstock; Antminer Z11 image courtesy of Bitmain
Decentralized Autonomous Organization (DAO) MakerDAO (Maker) has upped its demands to increase one of its network fees, this time to 7.5 percent, the company confirmed in a blog post on March 18. Maker, which issues USD-pegged stablecoin Dai (DAI), is seeking to improve the cryptocurrency’s stability. The organization aims to do so by raising its so-called Stability Fee, a charge levied by Maker participants when Dai is used for loans on its network. As Cointelegraph reported, March had already seen a governance poll ask users to approve a fee hike of up to 5.5 percent, which users subsequently approved. A new poll, which began March 18 and will run through March 21, wants to boost this figure yet again. “Based on last week’s governance call, the MakerDAO community is moving forward with a Governance Poll to gauge sentiment for an additional Stability Fee increase,” Maker explained in the blog post. Developers had previously stated that earlier increases had not impacted negatively on the Maker ecosystem. Speaking to tech news publication BreakerMag, CEO Rune Christensen continued the calm tone over Dai, admitting its inexact dollar peg would likely continue. “It’s never exactly at $1. You can always buy it for slightly above $1 and sell it for slightly below. But it’s much closer to $1 now,” he said. At press time, Dai was trading at $0.9938 per coin, while Maker’s MKR averaged around $706.30 on major exchanges.
Cryptocurrency mining giant Bitmain has released a new version of its Antminer Z series machines for Equihash algorithm coins, the company confirmed in a blog post on March 19. The Antminer Z11, which comes around ten months after the release of its predecessor the Z9, claims to treble the hashing power available for its target cryptocurrencies. Equihash is the algorithm used in altcoins such as Zcash (ZEC) and ZenCash (ZEN). The move sees Bitmain continue to forge ahead with new products despite challenging market conditions within the mining industry, the company previously closing down some aspects of its operations. “The new Antminer is now pre-selling on Bitmain’s official website and will start shipping shortly,” the blog post confirmed. In February, Bitmain rolled out its latest offering for SHA256 algorithm cryptocurrencies, such as Bitcoin (BTC) and Bitcoin Cash (BCH). Similar to that hardware, the Z11 is an ASIC miner, with the Zcash community previously debating over whether to make the coin’s network resistant to ASICs. Concerns focused on ASICs making the mining landscape less diverse and increasing the possibility of a hostile entity gaining control. In light of the debate, Bitmain appears to want to offer more transparency to its target market. “To preserve the Zcash community’s values around security, reliability and accessibility, Bitmain had previously Tweeted real-time updates to ensure more transparency and will continue to provide shipping updates of the first batch of the Antminer Z11,” the blog post said. It continued: “These commitments to transparency will continue to provide the Zcash foundation and community with the security, reliability and accessibility they desire of manufacturers.”
Major South Korean cryptocurrency exchange Bithumb is reportedly cutting up to 50 percent of its workforce, a report from CoinDesk Korea stated on March 18. According to the report, an unnamed official has confirmed that the exchange will reduce its staff from 310 (at the start of March) to around 150, and is offering a voluntary redundancy plan and training support to employees: “Voluntary retirement is part of our support program for former employees and is intended to provide assistance and training for job placement. Apart from that, [Bithumb’s] trading volume has decreased compared to the previous year, [so] we are trying to provide internal measures. We will continue to add necessary personnel for various new businesses.” To press time, Bithumb has not responded to Cointelegraph’s request for comment. Amid the crypto winter, Bithumb’s reported move to reduce its head count has been preceded by a host of other firms in the sector; mining giant Bitmain, blockchain software firm ConsenSys, decentralized social network Steemit and crypto exchanges Coinsquare and Huobi are among those to have made significant cuts in recent months. According to CoinMarketCap (CMC), Bithumb has seen roughly $1.3 billion in trades over the 24 hours before press time. The exchange was removed from CMC’s global exchange rankings in January 2018, due to the site’s concerns over reportedly “extreme divergence in prices from the rest of the world” on the platform and its fellow South Korean exchanges.
Jeremy Allaire, co-founder and CEO of payments company Circle, has said that as the sector continues to see new market entrants, stablecoins using an open standards approach will prevail. Allaire made his remarks during an interview with Fortune’s crypto-focused segment The Ledger on March 19. As reported, Circle launched its US dollar-backed, ERC-20 stablecoin USD Coin (USDC) last fall, via the consortium Centre, which counts crypto exchange Coinbase and mining firm Bitmain as members. Centre is also the name for the token’s open network and open source protocol, which provides interoperability in a bid to secure wide ecosystem support for the asset. In his interview with The Ledger, Allaire welcomed recent, unconfirmed reports of Facebook’s still-secretive plans to launch its own stablecoin asset, which would reportedly be integrated for payments within a canopy messaging service for WhatsApp, Facebook Messenger and Instagram: “[Facebook’s reported plans are] very, very positive in our view overall. The approach that we’ve taken is to create a consortium model. When we think about a standard for how fiat money works on the internet, it’s really critical that it’s an open standard that many companies can implement, that has an self-governance mechanism — [that provides] a technical standard as well as a membership framework.” Using the metaphor of creating “an HTTP for money on the internet” that could support global, broad participation from multiple actors, Allaire said he believed such an approach is “ultimately going to be much more successful than a single company issuing a [crypto]currency themselves.” As reported yesterday, the Winklevoss twins have echoed Allaire’s perspective in affirming the Facebook stablecoin development as a positive sign for the crypto industry as a whole, while underscoring the project’s prospective limitations. This year, United States banking giant JPMorgan Chase revealed its own plans to launch a proprietary stablecoin, which has also drawn criticisms over its lack of interoperability. When Circle closed its Bitmain-led $110 million fundraising round to raise capital for the USDC project last May, its private valuation hit $3 billion. More recent figures for the firm, in the aftermath of the protracted crypto bear market, have not been officially reported — although Allaire told the Ledger the company continued to see “very significant growth year last year.” In summer 2018,…