BitDigest - Monday June 3, 2019
The Headlines
Indian Crypto Regulations Awaiting Approval
Indian Finance Secretary Subhash Chandra Garg says the long-awaited government report on cryptocurrency regulation is ready and will be submitted to the finance minister. A committee, headed by Garg, has been tasked to study all aspects of cryptocurrencies and crypto-assets, including Bitcoin. “We will submit it to the finance minister (soon). Of course, once the approval is done, it will be made public,” he said.
Changes in Technological Need to be Constantly Observed
In a report released ahead of the upcoming G20 meeting, the Financial Stability Board (FSB) called on regulators to address cryptocurrency regulations and address the gaps in regulatory policy and work to foresee risks that could impact financial markets. However, the FSB continues to stress that digital currencies are still not a material risk to stability. They suggest that the exponential change behind the technological may continue to identify a growing number of regulatory gaps in jurisdictional laws.
ICOs May Be Eligible for 'No-Action' Relief
In supporting that the cryptopsphere is always changing, the SEC’s Director of Corporation Finance William Hinman said that cryptocurrencies are capable of shifting from being a potential security to not being one. “Digital assets may evolve into an instrument that no longer needs to be regulated,” he said. This means that startups that previously conducted initial coin offerings (ICO) may be eligible for relief from potential enforcement actions by the SEC through a no-action letter he explained.
Tokenization of Real Assets to Provide Benefit of Blockchain
A member of Germany’s Central Bank believes blockchain technology will add value by tokenizing real assets. Burkhard Balz sees value in using the technology in handling cross-currency platforms which is currently managed through correspondent banking, but he does not believe a benefit can be found in working through the intra-European payment sector which he says is “extremely secure and efficient.” Balz sees the real benefit in tokenizing “different forms of existing assets and transform them into a healthy digital ecosystems.”
Facebook Holding Talks with CFTC Over Digital Currency
Commissioner Christopher Giancarlo said the CFTC was in “very early stages of conversations” with Facebook as it discusses whether the company’s plans for a digital coin would fall under the regulator’s auspices. “We’re very interested in understanding [Facebook’s Globalcoin] better,” Giancarlo said of Facebook’s plans. “We can only act on an application, [and] we don’t have anything in front of us [yet].”
Exchange and Product News
Block.one Launches Social Media App
Block.one is introducing a blockchain-baked a social media platform, Voice. Built upon EOS, the layer 2 platform will let users post, share and promote content while providing them with control over their postings. “Current social media platforms are designed to use their users,” Brendan Blumer, chief executive officer of Block.one, said. “It’s the platform, not the user, that reaps the reward.” Block.one is working to change this by allowing users to “claim your voice.” Users can sign up for beta on at Voice.com.
Localbitcoins Removes In-Person Cash Trading
Localbitcoins has stopped offering in-person fiat trades. The global peer-to-peer digital exchange has removed cash trading from its list of options. This changes eliminates the ability of people to use the platform to meet in person and transact in either bitcoin or cash. Localbitcoins did not release an announcement on why it removed the option, but it is expected to launch a new site Local.Bitcoin.com, a peer-to-peer marketplace that will allow individuals to trade bitcoin cash (BCH) privately with anyone in the world.
Binance DEX Prohibiting Access to Users in 28 Countries
Binance is cutting off user access to its decentralized exchange, Binance DEX, starting on July 1st. Crypto traders in 28 countries, including the US, will have their IP addresses blocked from using the exchange’s wallet. A pop-up message on the site announced this news but provided no other explanation besides stating that access to Binance DEX from these countries will ‘no longer be available.’
Thoughts on the Ecosystem
Blockchain Could Rebuild Faith in Institutions
The head of Blockchain and Distributed Ledger Technology at the World Economic Forum believes blockchain could be a solution to the global trust crisis. Sheila Warren acknowledged that public trust towards institutions (governments, banks and media) is eroding. The erosion of public trust “ is one of the biggest crises we face. Because you’re going to rapidly move towards anarchy and that is a deep, deep problem.” But Warren says that blockchain technology “could provide access to information that could enable third parties or other groups to actually come in and conduct audits of what is happening. And I actually think that could build faith back in institutions.”
Fake Satoshi Accuses Binance and Bitfinex of Funding Prostitution and Slavery
In an attack but will likely only lead to more legal fanfare, Craig Wright has accused two principle bitcoin exchanges of supporting illegal activities. ““Binance, Bitfinex, and Tether use Bitcoin [BTC] to fund fund illegal operations for pumping money such as illegal money travel, illegal use of people smuggling” he said, adding “right now, 30% of Binance money funds women in prostitution, 30% of Binance and Tether funds women in slavery.” Binance’s CEO responded to the unsubstantiated allegations by saying “giving attention is probably what [Wright] wants… We ignore stupid stuff, and focus on things that matter. #BUIDL”
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BitDigest is a weekday news update on digital currencies and blockchain technology for friends and partners of Parsons & Whittemore, a single family office based in Rye Brook, New York. Receipt of BitDigest is by approval of the Author. The commentary, analysis, opinions and recommendations in this newsletter represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in this newsletter is obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. Neither the Author nor any of the Author's affiliates make any guarantee or other promise as to any results that may be obtained from reading this newsletter. While past performance may be analyzed in this newsletter, past performance should not be considered indicative of future performance. No reader should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. The Author is not making a solicitation or offer to buy or sell any securities of any kind.