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The AMLC Sets Its Sight on Casinos and Digital Currencies

Posted on June 20, 2018June 19, 2018 by Laura P.

Philippine’s Anti-Money Laundering Council (AMLC) has recently made a decision to bring digital currencies and casinos into their spotlight this year as it tightens its vigilant watch on dirty money. As clarified by Mel Georgie B. Racela, the AMLC Secretariat Executive Director, the council has now included the conversion of cash into poker chips and digital or virtual currencies in its coverage. This move is primarily aimed at plugging certain gaps that have been plaguing the anti-money laundering laws.

To begin with, the casino operators were given a six-month period – starting from this month – in which they are supposed to register with the AMLC. The compliance of the casino operators is expected to reduce the opportunities that criminals have to launder illegally obtained funds at the casino’s gaming tables. Prior to these new regulations, the Republic Act No. 10927 which was enacted last year required all the gambling operators to report their daily transactions worth at least P5 million to the AMLC.

However, it was until last week that the council published the Republic Act No. 10927’s implementation rules – casino operators now have until mid-December to sign up on AMLC’s online portal and begin submitting the required transaction reports.

The agencies National Risk Assessment 2015-2016 cited a considerably high risk of money laundering among casinos as well as many other financial service business. This was further elevated by the fact that it happened to coincide with the Bangladesh Heist in which $81 million in stolen funds vanished without a trace at casino gaming tables.

High Hopes

According to Mr. Racela, the threat level is going to reduce significantly as the agency’s new regulations take effect. Added to the fact that the casinos are now subject to a know-your-customer policy which will require them to report any suspicious transactions to the AMLC, it is quite obvious that everything is certainly bound to get better.

“If we make a reassessment of our national risk insofar as casinos are concerned, we believe that we will be able to reduce this from high risk to moderate,” Mr. Racela said on Monday, June 18 during the inaugural symposium of the Association of Certified Anti-Money Laundering Specialists Manila chapter.

The AMLC is looking to have the money laundering risks attached to casinos minimized in the next round of evaluations that is due in a couple of years (probably 2020) – the agency is confident that the new rules will eventually pay off.

As for digital currencies, while it is evaluating the best possible way of effectively going about it, the agency has confirmed that it has given its members the go-ahead to “study the suspicious transaction reports submitted by virtual currency exchanges.” Mr. Racela, however, noted that it is still too early to say whether or not the digital currency space will turn into an arena for money launders.

Slovenian Shopping Mall Transitioning into ‘Bitcoin City’

Posted on June 6, 2018June 5, 2018 by Laura P.

By now it is quite clear that cryptocurrencies and blockchain technology are here to stay. Already, they have both contributed to a number of great developments in the world of finance, a trend that is catching on with more and more businesses embracing the rapidly evolving technology.

Slovenia’s largest shopping mall has caught the attention of the world owing to its unique strategies that are now being implemented and will see it become the world’s first genuine “Bitcoin City.” Aptly named BTC City, the shopping complex stretches 475,000 square meters and boasts of 500 retail stores.

BTC Company was founded in 1954 as a warehouse and logistics enterprise before it gradually added many more warehouses. The complex was repurposed as a commercial shopping destination in 1990 and renamed BTC City. Since then, more commercial ventures including a sports complex, a hotel, a casino, a multiplex cinema and even a water park have been added to the mall. In addition to this, it also happens to host Slovenia’s tallest building.

Introducing Eligma

Powering the new crypto-focused initiative is Elipay, an AI-driven and blockchain-based cognitive commerce platform that is used by the shopping complex’s retailers. Elipay is a crypto-based point-of-sale system that was created by a Fintech startup known as Eligma.

BTC City has proven to be the best testing ground for the startup, particularly because the complex provides a controlled environment in which they can slowly introduce Elipay into each and every business operating in the shopping center.

“The shopping center presents a micro snapshot of global commerce because it encompasses a large number of very different establishments that present an array of challenges for Eligma on a scale, manageable in our first development phase,” commented the Eligma team.

More and more retailers in BTC City are embracing the platform and are implementing Elipay into their stores. With Elipay, the customers who visit the shopping destination now have the option of paying for their purchases with Bitcoin as well as Eligma’s own token.

The Eligma team, of course, has very big plans for their platform – it would be very exciting to see that the transformation of BTC City into a unified online platform is replicated in many other parts of the world so that they too can enjoy the simplified payment systems and business processes that were only previously possible in central warehouses. This will greatly reduce the retailer’s ownership costs by ensuring that they only have the essential items in stock.

Recently, Miro Cerar, the Prime Minister of Slovenia made a visit to BTC City during which he was treated to a cup of “crypto coffee” that was bought by Slovenian State Secretary Tadej Slapnik using the Elipay transaction system.

“The purpose of his visit was to open the Beyond 4.0 international conference, dedicated to digital society and blockchain, as well as to get acquainted with BTC City’s strategy to become Bitcoin City,” explained Eligma.

Way to go!

Regulators in the US and Canada Crack Down on Crypto Schemes

Posted on May 23, 2018 by Laura P.

As the battle between the cryptocurrency regulation and the ultimate quest for liberation rages on, forty regulators in the United States and Canada have teamed up in an effort to regulated cryptocurrency investment schemes. The collaboration between two countries’ regulators has resulted in the largest crackdown in cryptocurrency scams of this scale in history. So far, there are 70 ongoing investigations with 35 more that have either been completed or are still pending.

CNBC reports that the collaborative effort, that is, the North American Securities Administrators Association (NASAA), has officials from 40 or more different state regulators working together to provide the much-needed coordinated responses to any cryptocurrency-based investment schemes such as Initial Coin Offerings (ICO’s).

The North American Securities Administrators Association (NASAA), as it turns out, is the oldest international organization whose primary goal is investor protection. It also boasts of a vast number of members that include securities administrators from states, provinces, as well as the territories in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada, and Mexico. The organization’s efforts have turned out to be very helpful in ensuring that the crypto industry flourishes safely – its approach involves policing investment opportunities in the United States and Canada such as in ICOs to ensure that they are legitimate and are being carried safely and within the legal boundaries.

“The crackdown comes amid growing attention in the U.S. to cryptocurrency scams, including by the Securities and Exchange Commission and the Commodity Futures Trading Commission. The SEC has brought several fraud cases against operators of initial coin offerings and last week launched a website to help investors recognize scams. William Francis Galvin, the state’s secretary of the commonwealth, said NASAA’s task force found roughly 30,000 crypto-related domain name registrations, many of which appeared in late 2017 as the price of bitcoin neared $20,000,” an excerpt from the CNBC report reads.

Praise from High Places

The NASAA crackdown operation that has since been dubbed “Operation Crypto Sweep” has been lauded by a number of industry bigwigs including Jay Clayton, the chairman of the United States Securities and Exchange Commission. In a statement that was released on Monday, May 22, Clayton said that the state and provincial regulators play a vital role in the protection of Main Street investors.

“The enforcement actions being announced by NASAA should be a strong warning to would-be fraudsters in this space that many sets of eyes are watching, and that regulators are coordinating on an international level to take strong actions to deter and stop fraud,” Clayton added.

In addition to this, Clayton pointed out the fact that NASAA’s efforts would drive out bad actors and scammers early on thus ensuring that governments adopt stances that are not going to choke off the crypto industry.

Goldman Sachs, Wall Street Warming Up to Crypto Trading

Posted on May 9, 2018 by Laura P.

Some of Wall Street’s biggest names are finally waring up to bitcoin and the entire cryptocurrency ecosystem as a whole. Since the first decentralized digital currency came into being, they have all been consigned to the unregulated fringes of the financial world, but all this is about to change with the new bitcoin trading bid that a number of institutions are beginning to warm up to.

Spearheading this new development is Goldman Sachs which is slated to be the first Wall Street bank to launch and offer cryptocurrency-related trading services. The renowned financial institution is working on rolling out a number of derivative products that will allow its customers to buy contracts related to price fluctuations in bitcoin. In addition to this, Goldman Sachs also plans to create a more flexible type of futures product that will be referred to as a non-deliverable forward.

The non-deliverable product will be a trading approach that will involve no physical exchange of the underlying asset. Instead, it will involve the exchange of currency that is quoted on the settlement of the date of the forward.

Shortly after Goldman Sachs went public with its plans to set up a cryptocurrency trading desk, news that the Intercontinental Exchange (ICE), New York Stock Exchange’s parent company, has been working on an online bitcoin trading platform surfaced. This, for bitcoin, represents a dramatic yet welcome shift towards mainstream acceptance and usage especially considering the fact that the digital currency has often been associated with underworld activities and high-risk, speculative investment.

Ex-Goldman Sachs President Not Yet Sold on Bitcoin

While he believes that the world is on its ways towards a global currency, former Goldman Sachs president, Gary Cohn, believes that the currency will not be bitcoin. In an interview with CNBC, Cohn said that he believes that the world will have a “global cryptocurrency at some point where the world understands it and it’s not based on mining costs or cost of electricity or things like that. This implies that the supposed global currency will have to be “more easily understood” than bitcoin.

“I’m not a big believer in bitcoin. I am a believer in blockchain technology. I do think we will have a global cryptocurrency at some point where the world understands it and it’s not based on mining costs or cost of electricity or things like that,” Cohn said in a “Squawk on the Street” interview. “It will probably have some blockchain technology behind it, but it will be much more easily understood how it’s created, how it moves and how people can use it.”

20% of Financial Institutions Considering Crypto Trading

Posted on April 25, 2018 by Laura P.

Within the next few months, the cryptocurrency trading market will receive an immense amount of influx as more financial institutions, banks and hedge funds consider the inclusion of digital currencies in their services. Even though they prefer not to make the plans public, many of these institutions have been preparing to be part of the crypto world.

To put this into perspective, Thomson Reuters Corporation, a Toronto-based multinational information firm recently published a survey which revealed that 20 percent of financial institutions have been juggling around the idea of being part of the cryptocurrency trading space within the next 12 months or so. However, this might happen sooner than we think since according to the survey, 70 percent of the institutions considering the move plan to begin the operations in the next three to six weeks.

“Historically, the banking sector has been notoriously dismissive of the crypto movement. Cryptocurrency has variously been called a bubble, an asset for criminals, and worthless. But today’s survey demonstrates that while financial institutions are saying one thing, they’re doing quite another,” explained Kevin Murcko, Coinmetro CEO. “We’re witnessing a gradual institutionalization of the market, and this is sure to drive mainstream adoption. The move to accommodate digital currencies is also a symbolic one; it’s a sign of growing maturity in the market, and represents just how far cryptocurrency has come since its days of relative obscurity.”

One of the institutions that is allegedly at the helm of this revolution is Goldman Sachs – “allegedly” because the company’s CEO has denied claims that the company is on the verge of launching a bitcoin trading desk. However, the company recently hired a former quantitative trader known as Just Schmidt to head its security division’s first digital asset market.

“In response to client interest in various digital products, we are exploring how best to serve them in the space,” Goldman Sachs spokeswoman Tiffany Galvin-Cohen said in an official statement. “At this point, we have not reached a conclusion on the scope of our digital asset offering.”

This makes the CEO’s denial rather questionable, but one thing is clear though – the bank should certainly have an extensive awareness of the fact that there is a huge demand by hedge funds and big investors for cryptocurrency trading services. Whatever it does with that information is totally up to the bank’s management.

Twitter Briefly Suspends @Bitcoin Sparking Wild Theories

Posted on April 11, 2018April 11, 2018 by Laura P.

On Sunday, Twitter briefly suspended @Bitcoin which is one of the oldest and most popular crypto-affiliated Twitter accounts. This move by Twitter has raised a raft of questions as well as suspicion among cryptocurrency users who are on either side of the Bitcoin Cash-Bitcoin Core divide. The Twitter account was handed over briefly to a user who claimed to be Turkish and then to another user who claimed to Russian before finally being returned to its owner on Monday afternoon.

At the time of its restoration, the account was short of 750,000 followers but Twitter has been working towards reinstating all of the account’s followers. Meanwhile, a number of accusations begun flying around which only served to fuel the already blazing controversy that involves bitcoin, Bitcoin Cash and the Lightning Network.

While Twitter did not give any public explanation for the suspension, some theorists have suggested that the move was in response to complaints mounted on the social media platform by Bitcoin Core (bitcoin) supporters who weren’t happy about the account’s support for Bitcoin Cash. Bitcoin Cash is an altcoin that split off from bitcoin in August last year after the members of the community disagreed over how they were going to address network scaling issues. Since then, the relationship between Bitcoin Core and Bitcoin Cash has always been acrimonious, to say the least.

The @Bitcoin Twitter account has been in the spotlight before with users calling for its suspensions. In January, for instance, a Twitter user called it a “Fake @Bitcoin account” and asked users to report it.

“I complained to Google because when I would Google bitcoin I would get a prominently displayed Twitter feed of @Bitcoin with three separate posts, and always the first one was that Bitcoin Cash was the real bitcoin,” read a Reddit comment. “I found it a fraudulent statement intended to confuse and induce newbies to buy their cheap knock-off product.”

As always, there was a lot of disagreement pertaining to the suspension of the account but the threads were eventually shut down as moderators claimed that the users were “brigading and vote cheating.”

One of the more bold theories pointed to Twitter CEO, Jack Dorsey, who is allegedly biased due to his support for Bitcoin Core and his $2.5 million investment in a startup called Lightning Labs that builds technology for Bitcoin Core.

India: Bitcoin Losing the Popularity Battle Against Ethereum

Posted on April 4, 2018April 4, 2018 by Laura P.

Bitcoin is no longer the king of cryptocurrencies in India. This was proven by a recent study by Jana, a free internet provider that found that Ethereum has been topping bitcoin as the most searched-for decentralized digital currency in India over the past five months. The margin is also quite significant with Ethereum commanding a whopping 34.4 percent of cryptocurrency searches in the country as bitcoin trails behind at 29.9 percent. Another notable mention was BuyUCoin (NEM) with a 21.2 percent of the share. The remaining digital currencies only managed to register 5 percent or less.

Cryptocurrency searches, as it turns out, were highest in December when bitcoin prices soared to a record $20,000 – this accounted for 30 percent of all the searches made within the five-month period of Jana’s study. Since then, bitcoin prices have taken huge plunges while Ethereum, managed to log its all-time high of $1,261 at the beginning of the year.

It is worth noting that even though Ethereum prices have been relatively steadier than bitcoin’s, it does not mean that Ethereum transactions are anywhere close to surpassing bitcoin. Still Jana CEO, Nathan Eagle believes that “search volume is a leading indicator of what has momentum and is showing signs of growth.” He went on to add that while the search volume may not correspond to more people buying Ethereum, it certainly indicates that there is a lot more interest.

The study also revealed that at the beginning of 2018, there was a noticeable drop-off in interest in cryptocurrencies amidst news that suggested that the Indian government would be cracking down on digital currencies. This was suggested in November 2017 by a government panel and reiterated by Arun Jaitley, the finance minister, during his budget speech in February.

“The government recommending shutting down exchanges and limiting currencies altogether, coupled with the decline in prices, has led to the feverish pitch waning away dramatically,” said Eagle. “There are still quite a lot of searches but maybe we’re getting closer to what a true steady state should look like.”

Casinos in Nevada Warm Up to Bitcoin as a Payment Method

Posted on March 28, 2018 by Laura P.

Cryptocurrencies are slowly revolutionizing how people do business in several places around the world. Even so, the concept of decentralized digital currencies has been subjected to nearly equal measures of resistance and acceptance with some governments and industries actively rallying behind cryptocurrencies and some others outrightly bashing it.

One of the industries that have embraced cryptocurrencies is the casino industry. The Nevada casino industry, for instance, is championing for the use of cryptocurrencies as a mode of payment. This, however, does not come as much of a surprise as the Nevada casino industry has always been known for being at the helm of experimental ventures as well as testing out new innovations. Thanks to this strategy, the Nevada casino industry stands out globally as a trendsetter for global gaming.

Despite their approach towards newer and experimental ventures, the Nevada casino industry has been rather slow in embracing cryptocurrencies, especially bitcoin which is by far the world’s most valuable cryptocurrency. This is partly due to the lack of regulations by the Nevada Department of Taxation and the Nevada Gaming Control Board to govern the use of cryptocurrencies even though it has been ten years since bitcoin, the first cryptocurrency, came into being.

A few regulators have expressed concerns over the use of bitcoin for illegal practices such as money laundering but no legal representative has actually talked about the incorporation of bitcoin into the state’s casinos. This is unlike the case in the global gambling scene where operators have been quick to embrace bitcoin especially because it allows high rollers to access their money from offshore gaming sites, by circumventing the limits imposed on the movement of money. This presents a risk of money laundering at Nevada casinos hence the hesitation.

A number of bitcoin users have, however, refuted this claim while pointing out that federal regulations and technology are the key components of anti-money laundering efforts. This has paid off as now some casinos in Nevada have finally decided to embrace bitcoin despite the lack of official support.

D Las Vegas, a Nevada casino owned by Derek Stevens, is the first casino in the state to allow bitcoin to be used as a mode of payment. Currently, hotel stays and related hotel expenses can be paid using bitcoin. Gambling, on the hand, will still require cash – fortunately, the casino has a bitcoin ATM that gamblers can use to convert their bitcoin into dollars.s

Researchers Find Child Abuse Imagery in Bitcoin’s Blockchain

Posted on March 21, 2018March 21, 2018 by Laura P.

Bitcoin is once again in jeopardy after German researchers recently discovered that unknown persons have been using the cryptocurrency’s blockchain to store and link to child abuse imagery. Out if the 1,600 files that the researchers analyzed, 99 percent were text and images that included illicit pornography, child abuse imagery as well as other illegal content.

The blockchain is the underlying technology that powers the existence and operation of any cryptocurrency and though they are separate entities, no cryptocurrency can work without the blockchain. At least not yet. The blockchain is essentially a public ledger of all the transactions ever made in the decentralized digital currencies and keeps records of which users own what and stops the currency from being copied. This framework is locked and cannot be altered.

The Implications of These Findings

Blockchains are not limited to cryptocurrencies alone and thus they can be used to hold other types of non-financial data as well. This non-financial data was the point of focus for researchers from the RWTH Aachen University in Germany. The results of the analysis revealed a number of links to dark web services and attachments containing content that was “considered objectionable in many jurisdictions”.

“Our analysis shows that certain content, e.g., illegal pornography, can render the mere possession of a blockchain illegal,” the German researchers wrote. “Although court rulings do not yet exist, legislative texts from countries such as Germany, the UK, or the USA suggest that illegal content such as [child abuse imagery] can make the blockchain illegal to possess for all users. This especially endangers the multi-billion dollar markets powering cryptocurrencies such as bitcoin.”

This is, however, not the first time that warnings about the possibility and dangers of storing non-financial, and possibly illegal, data within the blockchain have been issued. In 2015, for instance, Interpol set out a warning that stated that “the design of the blockchain means there is the possibility of malware being injected and permanently hosted with no methods currently available to wipe this data”. The definitively confirmed that blockchain technology had flaws that could enable the sharing of illicit content such as child abuse images.

“Since all blockchain data is downloaded and persistently stored by users, they are liable for any objectionable content added to the blockchain by others. Consequently, it would be illegal to participate in a blockchain-based system as soon as it contains illegal content,” the RWTH Aachen University researchers added.

While this might be dismissed easily since spending bitcoin does not necessarily require a copy of the blockchain (this is, after all, the goal), many other core processes such as mining require users to download a full blockchain copy or at least have chunks of it. In addition to the fears that anti-bitcoin ambassadors are propagating, the findings by the researchers put the booming, but fragile, multi-billion dollar cryptocurrency market’s reputation into the gutters. Still, it is definitely not too late to fix this.

Australian Bitcoin Sports Betting Site in the Spotlight

Posted on March 7, 2018 by Laura P.

JustBet, an Australian-registered online sports betting site that allows its users to place bets with bitcoin is under investigation after a nudge from Andrew Wilkie, a Tasmanian independent Member of Parliament. JustBet is registered by the Christmas Island Administration (CIDA) that lists itself as the “administrator” for Australian islands territory’s web addresses that end in ‘.cx’.

The sports betting site offers live betting on AFL, AFLX, A-League among many other Australian sports in both US dollars and cryptocurrencies. JustBet also offers live and pre-match wagering on a range of international sports and a decent variety of popular online casino games.

While JustBet has an undeniable Australian link, the site itself is registered by a Panamanian and as revealed by a trace of its IP address, it is based in the Costa Rican capital of San Jose which also happens to be the hub of the international cryptocurrency gambling industry. Interestingly, the operation does not appear to be licensed by any of the gambling commissions in various Australian territories or states. This, according to legal experts, is a clear breach of the Australian federal Interactive Gambling Act that prohibits websites from offering such kind of online gambling to Australian bettors.

The Christmas Island Domain Administration (CIDA0, however, said that unless there is an official request from the authorities or a complaint from the public it could not deregister JustBet.

Not Good Enough

CIDA’s claim has not been accepted by quite a number of people, some of whom are in rather high places. One such person is Mr Wilkie who has been vocal in his advocacy for gambling reforms in the country. To him, CIDA’s statement was not enough to settle the issue.

“The site should be shut down immediately, and the Christmas Island Domain Administration should act straight away to remedy the situation,” he said.

Mr Wilkie’s call and subsequent reports of JustBet’s activities on the Sports Integrity Initiative website, the Australian Communications and Media Authority (ACMA) eventually got wind of the situation and promptly announced that it had begun investigations on JustBet for violations of the Interactive Gambling Act.

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Author: Laura P.