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Swiss Regulator Imposes 800% Risk Coverage on Crypto Trading

Posted on November 7, 2018November 6, 2018 by Laura P.

The Swiss Financial Market Supervisory Authority, otherwise known as FINMA, has instructed Swiss banks that are dealing in crypto assets to apply an 800 percent risk weighting the market value of said assets when “calculating loss-absorbing capital buffers. The news of this was delivered in a confidential letter that the regulator recently sent to swissinfo.ch.

What It Means

As per the terms of the regulator’s new requirements, securities dealers and banks will be required to assign a flat risk weight of 800 percent – which will be used to cover both market and credit risks – against digital assets. Therefore, considering bitcoin’s current value or price ($6,000), the banking institutions would be required to value each of the coins on their books at $48,000 when making decisions regarding adequate levels of buffer. This is regardless of whether the positions are held in a trading or banking book.

Even though FINMA has openly allowed banks in the country to trade bitcoin and other crypto assets, the regulator has not made any effort to integrate cryptocurrencies into the country’s liquidity ratios or Base III capital requirements. Risk weightings are a measure of an asset’s volatility as well as their potential to compromise the capital base of any given bank. Naturally, a higher risk weighting is largely an indication of skepticism – the higher the risk weighting, the lesser amount of the asset that a bank should hold.

“FINMA has recently received an increasing number of enquiries from banks and securities dealers holding positions in crypto assets and are subject to capital adequacy requirements, risk distribution regulations and regulations for the calculation of short-term liquidity ratios,” the letter, dated October 15, reads.

This move is an indication that FINMA is clearly still very skeptical of digital currencies despite the fact that some of them have steadily stabilized over the past year. Bitcoin, for instance, has been priced at around $6,000 over the past few months.

Not So Surprising Positive Reactions

It is undeniable that the asset class is extremely volatile but there is a lot of great signs with more and more banks all over the world offering crypto related products. Switzerland happens to be one of the few places where banks and trading products have been in business for quite a while. SEBA Bank, one of the Swiss banks that is hoping to win a license to operate full banking services to bridge fiat currencies and crypto.

“It’s encouraging to see banks no longer turning down the increasing number of client requests for crypto services but asking for guidance and providing their input along the way,” the Bitcoin Association of Switzerland stated. “This is the Swiss financial center’s first step towards moving into the next decade where assets are no longer held in single, central custody but instead are held on the blockchain.”

FINMA’s new regulations are certainly going to present a new set of hurdles for banks hoping to offer crypto trading services but with such positive reactions, something good may eventually come of it.

Institutional Investors Making Huge OTC Crypto Purchases

Posted on October 3, 2018October 3, 2018 by Martin S.

While most of the world expected the bitcoin ETF to be the tipping point that would allow institutional money to come into the cryptocurrency market, it seems like the institutional investors have once again had their way despite the uncertainty that looms over the BTC ETF. In fact, according to recent OTC Trade Data, these institutional investors now dominate bitcoin markets with high volume trades. Yes, that is right – institutional investors are becoming more and more involved in the $220 billion cryptocurrency market than many people may realize and this is perhaps because they have been using back-doors for the purchases.

Many people believe that the next bitcoin bull run will be entirely driven by institutional investment which will be encouraged by the acceptance of a bitcoin ETF such as the those that are currently in the works at the United States Securities Exchange Commission.

The Current Situation

While some crypto market data analysts and providers estimate that the daily trading volumes of bitcoin are at around $4 billion, ShapeShift’s Coincap.io has revealed that the actual trading volume of bitcoin falls at around $2.7 billion. Coincap.io further revealed that, for most of the large-scale investment companies, institutions, and retail traders, the global crypto market has not reached enough liquidity to process the multi-billion-dollar trading orders. In other words, major digital asset trading platforms could liquidate large orders but it may have a large impact on the short-term price movement of cryptocurrencies.

Over the Counter (OTC) Trading

A number of high-net-worth individuals have been buying into cryptocurrencies and considering the amounts that they have been spending, it is safe to assume that these “individuals” are institutions or are at least part of them. As mentioned above, a peek into recent OTC trading data reveals a huge interest in bitcoin from these supposed institutional investors.

“Bloomberg reports that in April, daily OTC trades varied anywhere between $250 million and $30 billion, while exchanges only handled about $15 billion daily in that time by contrast. Corroborating this, Circle Financial CEO Jeremy Allaire confirmed that his company is seeing a triple-digit increase in OTC volumes. By contrast, according to data from CryptoCompare, exchange trade volumes are down 80 percent from their peaks at the same time as the increasing popularity of OTC,” reads Cryptoglobe’s comment on the issue.

This over-the-counter crypto market has facilitated between $250 million an $30 billion in digital currency trades per day in April, according to researchers. But, why is this happening?

Well, as it turns out, large digital currency traders like private sales simply because exchanges can move coin prices. Private sales are more appealing since the trading parties can fix the price in advance instead of having to worry about the fluctuations that are rife in the crypto market. Also, exchanges sometimes limit the number of coins that can be traded and this is certainly not ideal for large traders.

Google Ends Cryptocurrency Advertisement Ban

Posted on September 26, 2018September 25, 2018 by Laura P.

Barely five months after it rolled an advertisement policy that banned cryptocurrency advertisements, Google has decided to lift ban with plans to allow regulated cryptocurrency exchanges to buy ads in the United States and Japan. This new policy is scheduled to be rolled in October 2018 and will require the advertisers to apply for certifications within the specific countries within which their ads will be circulated.

The rapid growth in the popularity of cryptocurrencies has been great for the industry but it has also attracted additional scrutiny. For instance, in the United States, the Securities and Exchange Commission recently created a Cyber Unit tasked with handling online financial crimes to begin investigating companies that had stakes in the crypto or blockchain industry. The Cyber Unit also issued several subpoenas and charged a number of firms for alleged cryptocurrency fraud. Similar and even worse crackdowns have also been seen in other countries including China and India.

Widespread Rollout

Even though the digital currency boom has been a great source of wealth and excitement, it has been accompanied with quite a number of negative aspects that include spawned fraud as well as high-profile scams, both of which resulted from the lack of well-defined regulatory frameworks. It is for this particular reason that for a better part of the first of the year that many of the world’s leading tech giants – Google, Twitter, Facebook and Snapchat among others – moved to crack down on crypto-related advertising in a bid to stop some of the criminal activities associated with crypto. Unfortunately, the restrictions also affected legitimate crypto-related business and this is perhaps why some of the companies, namely Facebook and Google, have taken a step back.

“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution,” Google’s Scott Spencer cited in June during the company’s original crypto ad ban.

The Updated Policy

While the tech giant’s updated ad policy will apply ton advertisers all over the world, the advertisements will only be allowed to run in Japan and the United States – hopefully, this will also change soon. Furthermore, as mentioned earlier the advertisers will be required to apply for certifications from each of the countries that they wish to advertise in (which are now only Japan and the U.S.) to have their ads served in those countries.

“The Google Ads policy on Financial products and services will be updated in October 2018 to allow regulated cryptocurrency exchanges to advertise in the United States and Japan. Advertisers will need to be certified with Google for the specific country in which their ads will serve. Advertisers will be able to apply for certification once the policy launches in October. This policy will apply globally to all accounts that advertise these financial products. For more details, see About restricted financial products certification. The Financial products and services page will be updated once the policy goes into effect,” Google wrote.

NY AG Says Crypto Exchanges Are at Risk of Manipulation

Posted on September 19, 2018September 19, 2018 by Martin S.

The New York Attorney General’ office on September 18 published a report that says that cryptocurrency exchanges are vulnerable to conflicts of interests, manipulation as well as many other consumer risks. The 32-page “Virtual Markets Integrity Report” highlights concerns that exchanges are not doing much to protect investors.

Launched in April, the “Virtual Markets Integrity Initiative” kicked off when Eric T. Schneiderman, the then-New York Attorney General, sent letters to thirteen cryptocurrency exchanges requesting information on their operations, internal controls as well as other key issues.

“The New York State Office of the Attorney General (the “OAG”) launched the Virtual Markets Integrity Initiative to protect and inform New York residents who trade in virtual or “crypto” currency. As a medium of exchange, an investment product, a technology, and an emerging economic sector, virtual currency is complex and evolving rapidly. The OAG’s Initiative, however, proceeds from a fundamental principle: consumers and investors deserve to understand how their financial service providers operate, protect customer funds, and ensure the integrity of transactions,” reads the statements from the Attorney General’s office.
“The industry has yet to implement serious market surveillance capacities, akin to those of traditional trading venues, to detect and punish suspicious trading activity.”

The Key Findings

The study found that the absence of accepted methods of auditing virtual assets has resulted in the lack of a consistent and transparent approach to the independent auditing of digital currencies trade on the exchanges. This, therefore, puts the customers’ funds in the various exchanges at risk of theft or cyber-attacks.

“New Yorkers deserve basic transparency and accountability when they invest – whether on the New York Stock Exchange or on a cryptocurrency platform,” Barbara Underwood, New York’s current Attorney General said in a statement. “Many virtual currency platforms lack the necessary policies and procedures to ensure the fairness, integrity, and security of their exchanges.”

One of the more bizarre revelations was that only four cryptocurrency exchanges have mechanisms for market manipulation detection and prevention in place. The four exchanges – HBUS, Coinbase, Gemini and Bittrex – are therefore the safest options for crypto investors.

On the flip side, the report went on to refer three major New York crypto exchanges – Gate.io, Binance, and Kraken – to authorities over charges of violation of state law for allowing trading on the part of New Yorkers.

The report has attracted an equal measure of support and criticism from the crypto exchanges and other stakeholders of the industry. Still, it is going to be a while before we finally see the ramifications of these findings.

The Lightning Network Hits 100 BTC and 12K Channels

Posted on September 5, 2018September 5, 2018 by Martin S.

Even though the price of bitcoin has been facing a bear market lately and the innovative Lightning Network is still facing some issues, the latter is growing bigger by the day. Bitcoin’s Lightning Network became bigger than ever before this month when its capacity finally crossed the 100 BTC mark (about $73,000). This can partly be attributed to the fact that bitcoin has managed to grow its popularity immensely – this has, in turn, lead to the hastening of the development progress of the off-chain payment protocol in the past few months.

The proposed second-layer scaling solution which was as low as 3 BTC at the beginning of the year has shown a great deal of promise not just for bitcoin enthusiasts but for the cryptocurrency community as a whole. While getting to the 100 BTC mark took a relatively short time (a little over half a year), getting to that point was certainly not an easy task. The Lightning Network first hit 50 BTC capacity back in July this year which seemingly pointed to the fact that the network is finally scaling the way it was intended.

More Nodes and Channels

Also, the total network capacity of 101.7 BTC is contributed to by 3,350 nodes and more than 12,000 channels. The number of nodes has increased by 11 percent in the past 30 days with the capacity and number of channels going up 4 and 7 percent respectively. Reports from the past month reveal that recent experimentation on the network account has influenced certain accounts to markedly increase their individual capacity to process payments.

As mentioned earlier, July was a pivotal escalation point for the network – overall capacity shot up 85 percent when compared to the month of June. There is still a lot more that has to be done in terms of the node count before the Lightning Network is at full speed but from the looks of it, everything is certainly headed in the right direction.

Dealing with Scaling Problems

All of the mentioned improvements are indications that many developers and crypto enthusiasts are committed to ensuring that the Lightning Network is a success – some of them include SatoshiLabs and Bitrefill who have been working diligently to improve the network. Unfortunately, we may have to cope with a few discrepancies which will hopefully be addressed as development progresses.

One of the most prominent of these issues is the user-friendliness of the network, or rather its non-user-friendly nature. To put this into perspective, many of the transactions on the network still fail and this affects the overall usability and outlook of the network. Hopefully, this should be fixed sooner than later if mainstream adoption is the ultimate goal. Till then, so far so good.

Google Play Store’s Crypto-Mining Ban Not Going So Well

Posted on August 29, 2018 by Laura P.

A little over a month ago, Google banned cryptocurrency mining apps from its Play Store – this was made official when on July 27 the company pushed an update reading “we don’t allow apps that mine cryptocurrency on devices” to its developer policy. All of the existing apps that were in violation of the updated policy were given a 30-day grace period within which they were to revise their products to ensure that they comply with the new terms or face removal from the Play Store.

It has been 30 days since the ban was issued but despite the fact that the deferral period has expired, some apps that enable on-device crypto mining can still be found on the Play Store. Google is not entirely at fault in this case since it has been purging some of the offending apps. However, as it turns out, there is still a lot more work to be done. The company’s inspiration can be partly attributed to a number of security concerns that have led to probes and investigations into ICOs and crypto firms.

Earlier this month, the Google Play Store reportedly hosted an Ethereum (ETH) scam application. Discovered by Lukas Stefanko, a Slovakian malware researcher, the fraudulent “Ethereum” app was being offered for purchase at a price of around $388. According to Stefanko, the scam app was intended to dupe uninformed buyers into purchasing it when they mistook it for the original Ethereum cryptocurrency.

Some of the apps that are reportedly in violation of Google’s new developer policy but are still being hosted in the Play Store include Crypto Miner PRO, Pocket Miner, NeoNeonMiner and Pickaxe Miner. MinerGate, one of the mining apps that was axed from the store boasted of more than a million Android installs. The developers behind the app are however not amused because according to them they had made changes to the app in order to comply with Google’s updated developer policy.

“Mining on your phone directly was among the core features of the MinerGate app before the last changes in Google Play Development policies.” MinerGate wrote in an email addressed to Hard Fork. “With the last update, we are removing this functionality to meet the updated requirements.”

App Developers Going Rouge

Google begin its crackdown on crypto mining software when it announced that it be removing mining extensions from its Chrome Web Store following a revelation that a huge number of them were supposedly not in compliance with the company’s policies. The focus has since shifted to the Play Store and the affected parties are being to get crafty.

Many developers are already trying to find ways to bypass Google’s ban and distribute apps and Chrome extensions with on-device mining capabilities. Still, it will be up to users to decide on the best cause of action with regards to accessing apps with similar functionalities – downloading and installing apps from third parties is very risky. Be warned.

eToro Signs Bitcoin-funded Sponsorship Deals with EPL Clubs

Posted on August 22, 2018August 21, 2018 by Martin S.

Bitcoin is making yet another entry into the mainstream world through sports. Soon, teams and clubs may be able to buy football players using bitcoin thanks to recent sponsorship deals between seven English Premier League clubs and renowned online trading platform, eToro.

The Premier League Clubs – Tottenham Hotspur, Leicester City, Southampton, Cardiff City, Brighton, Newcastle United and Crystal Palace – are set to begin participating in cryptocurrency trials on Monday and this will be facilitated by eToro. The goal of the trials is to have bitcoin being used in place of the pound sterling for player transfers in the Premier League. The online trading platform also paid the clubs (in bitcoin) to have them participate in the trials.

The sponsorship deal will also see eToro appear on in-game advertising boards at the homes of all the seven clubs as well as within their advertising spaces.

“As a global multi-asset platform where you can purchase the world’s biggest crypto assets alongside more traditional investments, we are excited to be partnering with so many Premier League clubs and make history by being the first company ever to pay for a Premier League partnership in bitcoin,” Iqbal V. Gandham, UK Managing Director at eToro.

In most of the sponsorship and partnership deals with sports clubs, the extent of digital currency involvement is often limited to payment. However, eToro believes that the blockchain will have a pretty significant impact on the future of various sports operations very soon.

“The blockchain technology that underpins cryptocurrencies like bitcoin brings transparency, which we believe can improve the experience for everyone who loves the ‘beautiful game’, from fans being targeted by ticket touts, or a club negotiating a transfer, we believe that blockchain will revolutionize the world of football,” Gandham explained.

The move certainly marks another huge milestone for blockchain and digital currency integration in mainstream football. As is stands there have been a couple of experiments that bear similarities to this one such as the one in Turkey where, in January, Harunustaspor hired a professional player for Bitcoin. The clubs involved in the eToro sponsorship deal are also quite excited about the new venture and the path it could take from here on out.

“We are pleased to welcome eToro to the club as an Official Partner, it is exciting to be working with such an innovative industry leader. Much like Leicester City, eToro is an ambitious brand with a significant global reach and we look forward to working together throughout the season,” Jonathan Gregory, the commercial director for Leicester City said.

Indian Government Considering Crypto Tokens for Transactions

Posted on August 15, 2018August 15, 2018 by Laura P.

Following the recent ban on cryptocurrencies by Reserve Bank of India, it was assumed that the country would take a more partial stance as it reflects further on the issue of cryptocurrencies altogether. Well, as it turns out, the country has set up an inter-governmental committee called the “Inter-Ministerial Committee” (IMC) which has been tasked with drafting regulations and a roadmap for the concept of tokenization in both the public and the private sector.

“The committee is examining if crypto tokens can be used to replace smart cards such as metro cards in the public sector to start with. Similarly, in the private sector, it can be used in loyalty programs such as air miles where its use is limited to buying the next ticket and can’t be converted into money.”

Yes, that’s right. The India government may soon allow its citizens to pay for airline tickets and metro cards with crypto tokens regardless of the fact that the ban on decentralized digital currencies in the country is still ongoing.

Slight Delay

The government had previously planned to submit the proposal for the crypto regulations last month but according to a senior official close to the matter, the regulatory framework had experienced some minor setbacks and are therefore likely to be pushed forward to the end of the year. The official further revealed that the reason for the delay was because the “finance ministry panel is still evaluating how to treat blockchain and cryptocurrencies separately.”

“Blockchain is an interesting thing. We definitely want to milk it effectively for financial transactions. So all officials are really trying hard to understand how to separately use blockchain, without cryptocurrency… And understanding a new software takes time,” the official clarified.

Government Issued Crypto Tokens

News about this new development was made public on August 10 through a DNA India report that stated that the Indian government has been “considering launching crypto tokens for financial transactions in the country, even as the existing ban on cryptocurrencies is likely to continue.”

Even though the aforementioned tokens will be based on blockchain technology, they will not form a currency of their own – instead, they will be a mere representation of real money and not its replacement. Heading the committee is DEA Secretary Subhash Chandra Garg who has categorically denied that the government has allowed the use of cryptocurrency in a manner including payment systems – crypto is very poular in India and this was bound to come up.

“The committee is studying the possibility of using cryptocurrencies or the crypto technology (distributed ledger technology) for financial transactions and also what kind of regulations are needed for that. [While] the currency is totally banned, the committee is discussing its other usage and how it can be mainstreamed in India,” he said.

Goldman Sachs Reportedly Considering Crypto Custody Service

Posted on August 8, 2018August 7, 2018 by Martin S.

Having launched bitcoin futures trading in May, New York-based multinational investment bank, Goldman Sachs, is reportedly pondering taking the next step in the cryptocurrency market that will involve the launch of a crypto custody service. If the report, which was filed by Bloomberg, is true the move would make the investment bank the first large and credible institutional player to offer custody for cryptocurrency funds – this is exactly what the crypto market in the United States and the rest of the world have been waiting for.

If attainable, such an asset securing guarantee are at the very “least elusive in such an unregulated and fledgling market.” However, if realized, Goldman Sachs’ cryptocurrency custody services will certainly be a game-changer. In fact, it safe to say that just the talk of the offering itself is enough indication that there is growing demand for such services, and if they materialize they may even encourage more investors to participate.

Furthermore, supposing the offering gets the go-ahead, it will buff up the credibility of the cryptocurrency market, by acting as a vote of confidence of sorts for crypto. This would eventually pave way for the legitimization for the legitimization of the cryptocurrency index and hedge funds in as far as the institutional players are concerned.

According to Bloomberg’s anonymous source(s), deliberations on the matter are on-going but no timeline has been set for when the Wall Street giant will roll out the custody services. Goldman Sachs released a statement recently neither confirming nor denying the existence of such a move.

“In response to client interest in various digital products we are exploring how best to serve them in this space,” a spokesman for Goldman Sachs said. “At this point, we have not reached a conclusion on the scope of our digital asset offering.”

Goldman Sachs has been taking its time with its crypto-related projects – despite announcing a crypto trading desk in May, it is yet to set-up a full-fledged desk for the same. Still, sources close to the company have confirmed that the services are being worked on in the background and will be availed to customers once they are ready.

Still Wary About Bitcoin

Despite Goldman Sachs plans to launch various crypto-related projects, the firm is not going to begin making any bullish bitcoin price calls anytime soon.

“Our view that cryptocurrencies would not retain value in their current incarnation remains intact and, in fact, has been borne out much sooner than we expected,” a recent Goldman Sachs report stated. “We expect further declines in the future given our view that these cryptocurrencies do not fulfill any of the three traditional roles of a currency: they are neither a medium of exchange, nor a unit of measurement, nor a store of value.”

Bitcasino.io Intensifies Focus on Mobile and Adds Ethereum

Posted on July 25, 2018July 24, 2018 by Laura P.

Leading bitcoin-led casino operator Bitcasino.io has made yet another pioneering step forward with some neat features that are tailored specifically to improve its user experience by integrating both a new mobile-first cashier and Ethereum as a payment method alongside bitcoin.

Bitcasino.io’s new mobile-first cashier function is fully optimized and therefore works seamlessly with all mobile or handheld devices. This will allow the operator’s customers to easily track deposits and withdrawals. Also, now that Ethereum has also been added to the mix as an accepted payment method, players who prefer to use the digital currency, which is, by all means, the second most popular cryptocurrency in the world, can now use it on the platform without worrying about any form of conversion. In addition to this, the players will also be able to take advantage of BTCXE, an industry-first fiat-to-bitcoin currency converter that is available on the platform.

“Mobile betting has never been more popular, so it makes sense for us to cater for players to offer the best service possible. We’re always looking to innovate and stay one step ahead of our rivals, and that’s exactly what we are doing with the launch of our mobile-first cashier and addition of the world’s second most valuable cryptocurrency. We are positive players will love both additions,” said Tauri Tiitsaar, the Head of Casino at Bitcasino.io. “We are positive players will love both additions.”

Both of these new features have been introduced in a rather timely fashion as they are now going to be key defining features of the platform especially because it is at a time where mobile gaming is at an all-time high and cryptocurrencies are becoming even more popular. In essence, the move to launch the two features will give players more control over their gaming experience while at the same time keeping in line with the company’s goals of providing a fun, fast and fair casino experience.

Still the Best

Bitcasino.io was founded in 2014 as part of the Coingaming Group. Its unique approach involved a focus on bitcoin, something that has paid off quite well considering the extent to which digital currencies have grown since then. The platform features an extensive, expansive and quality casino product offering that consists of over 1,400 games. These games include a number of the most popular and fan-favorite table games, slots, and live dealer casinos from some the gaming industry’s leading casino software suppliers.

The games are hosted on Bitcasino.io’s proprietary platform that has been developed by some of the best designers and software engineers in the industry. The result is an optimized and outstanding experience that every player will certainly appreciate.

The casino operator also takes pride in being one of the most enjoyable and trustworthy casino gaming services, with withdrawal times of about 1.5 minutes which is amongst the fastest in the gaming industry as well a neat set of the latest and greatest security measures.

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