The Advisory Council of the United Arab Emirates Banks Federation (UBF) discussed applying blockchain in its member banks, according to the Dubai-based English language newspaper Gulf News on Dec. 17.

The Advisory Council of UBF, a non-profit organization representing 50 member banks in the country, considered using blockchain to improve Know Your Customer (KYC) processes at entrant banks. UBF’s chairman, Abdul Aziz Al Ghurair, claimed that the discussed initiative represents an effort to create and maintain a “thriving banking ecosystem.”

Participants also discussed issues pertaining to the country’s national digital transformation program and Emiratization — a government employment initiative to place its citizens in roles in the public and private sectors.

Aref Al Ramli, chairperson of UBF’s Digital Banking Committee, presented a blockchain-based study that explores the benefits of digitizing various processes within member banks via distributed ledger technology (DLT). The study has outlined a number of blockchain applications by banking institutions, including cross-border payments, compliance reporting, customer onboarding, and others.

Al Ghurair said that emerging technologies are “continuing to shape customer needs and expectations,” putting banking industry participants “at the forefront of innovations.” He also claimed that new technologies like blockchain can assist banks in creating new revenue streams, “which will in turn drive sustained business growth.”

In late November, the governmental AI and Blockchain Joint Working Group hosted an annual meeting that concluded with the launch of two initiatives intending to boost blockchain and artificial intelligence (AI) development. At the meeting, participants considered strategies to attract foreign investments and build a necessary infrastructure by using AI and blockchain.

Also in November, Abu Dhabi-based Al Hilal Bank announced it completed “the world’s first sukuk transaction” based on blockchain technology. Sukuk, a legal tool that is known as “sharia compliant” bonds, allows investors to generate returns in compliance with Islamic law.

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The traditional 12 days of Christmas is continuing crypto-style with Coinbase using the song to promote its worldwide services, focusing Day 6 on supporting refugees.

In tune with the season of goodwill, the global exchange giant has promised to make an announcement that will profit someone each day leading up the big day itself. The latest gift has gone to Kurdistan and Beirut through GiveCrypto.org, a nonprofit organization that distributes cryptocurrency to people living in poverty.

GiveCrypto has sent USD 10,000 to support 15 Yazidi families and 5 Syrian families living in Kurdistan and Beirut to follow up on its last gift which went to the wallets of over 100 families living in the Venezuelan border town of Santa Elana de Uairen, located in Bolívar state near the border with Brazil and Guyana.

The plight of Yazidi families made world news in 2014 when 1,200 refugees fled Syria leaving less able families stranded in the Sinjar mountains without food or water, relying only on air drops from the Red Cross and NGOs.

Similar to the Venezuelan project, this latest of its humanitarian gifts will enable the 20 families to be able to buy essentials through receiving the funds in local fiat currency. A Coinbase announcement on its latest humanitarian offering stated:

“With Coinbase’s support, GiveCrypto.org is poised to support even more refugee families in Greece, where crypto transfers can do even more to support those rocked by unstable financial institutions and lack of access.”

This only the second humanitarian gift so far; other gifts have included Coinbase announcing that users could buy gift cards so that family and friends could get Uber, Adidas and Nike surprises through its U-gift program.

On the weekend, Coinbase made one of its more materialist gifts, which allowed its US customers to withdraw their Coinbase balances to Paypal giving them access to a fast payments platform. Some more critical observers would like to see such gifts follow the form of the Venezuelan and refugee payments maintaining a strictly humanitarian focus, putting money where it is really needed.

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Japan’s financial regulator has established a classification for cryptocurrencies that are traded online like money, this according to a report from The Japan News on December 15, 2018. 

Avoiding Confusion

According to the article, the nation’s Financial Services Agency (FSA) has decided to position bitcoin and other cryptocurrencies under the category of “crypto-assets.” Furthermore, the intention behind the move is to clarify that the government does not recognize them as legal-tender; a panel of advisors to the FSA suggested in a report submitted (Dec. 14th), that the term “virtual currency” has the potential to cause a misunderstanding.

Also, the FSA will be revising laws and regulations such as the Payment Services Law based on this advisory panel’s report; in doing so, the agency intends to request the implementation of “strict management systems” from crypto-asset handling enterprises. It also highlighted the need for a mechanism that protects crypto-asset users in the event of particular problems, such as cash outflow.

International Nuance

The approach taken by the FSA in this instance is less radical than that of other nations who are scrambling to establish a legal classification for digital currencies, which in turn would allow for numerous regulatory hurdles to be overcome.

For example, this year the United States Securities and Exchange Commission (SEC) contentiously classified cryptocurrencies outside of bitcoin and ethereum as securities, which in turn has led to a string of rather aggressive in their clampdowns of initial coin offerings (ICOs), and even the promotion of ICOs in the wake of the DJ Khaled / Floyd Mayweather ICO scandal.

Though the move comes in a bid to battle corruption, fraud and bolster consumer protections in the space, it has been met with a great deal of scrutiny from U.S Judges who have contested the SEC’s classification, as well as investigations which firmly argue that treating ICO issued tokens as securities is pushing domestic startups to seek greener pastures.

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Comparatively, Japan’s FSA recently decided to empower domestic cryptocurrency businesses with self-regulatory authority; this directive was passed on to the Japan Virtual Currency Exchange Association (JVCEA), a consortium of local cryptocurrency exchanges, who can now “police, raid and sanction nefarious” activities. To further protect investors, the FSA is preparing to “launch a transparent ICO regulatory framework“, further signaling Japan as a bullish-blockchain contender for 2019.

One of the most interesting takeaways from this decision is the recent declaration from the FSA that stablecoins like Tether (USDT), Gemini Dollar (GUSD), USD Coin (USDC) and Paxos Standard (PAX) are not cryptocurrencies, but instead under the law are pre-paid payment instruments.

At the time, the FSA stated:

“In principle, stable coins pegged by legal currencies do not fall into the category of ‘virtual currencies’ based on the Payment Services Act.”

Ground-Work

By the rest of the world’s expectations, Japan is a bustling crypto-nation, though according to an article written by BTCManager’s Chief Editor Liam J. Kelly, it “isn’t all that it’s cracked up to be.”  Having visited the crypto-country, what he found was positive sentiments in the lingering fallout of major crypto-exchange hacks, and crypto-investors who use cryptocurrency meetups as a way to promote the acceptance and adoption of bitcoin cash in places such as bars and restaurants.

Liam writes that crypto-payment adoption Is “crucial” for the wider community, though very few utilize their crypto within their local economy, which is widely believed to be down to Japan’s capital gains tax laws which on occasion can be extremely high.

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An Indian government panel has reportedly suggested a new legal framework within the Reserve Bank of India (RBI) that completely bans cryptocurrencies in the country. English-language Indian media outlet CNBC TV18 reported on the framework on Dec. 6.

The article cites an unnamed source as noting that “the panel has categorically said that all such currencies should be treated as illegal” and that “any kind of dealing in such currencies should be treated as [such].”

CNBC TV18 notes that the Indian government had created a panel to create “norms” for digital currencies — headed by Secretary of the Department of Economic Affairs (DEA) Subhash Chandra Garg — which submitted its report to Indian Finance Minister Arun Jaitley.

The debate over crypto’s legality began in April of this year, when the RBI stated it would no longer provide services to persons or legal entities involved with crypto. In response to the ban, eleven crypto-related businesses filed a suit against the bank in the country’s Supreme Court, with the legal outcome still unclear.

As Cointelegraph reported in November, the Indian government is also working on cryptocurrency regulation, with the legislation expected to become public this month.

The current climate isn’t friendly overall to crypto enthusiasts in India. Also in November, the developers of India’s first Bitcoin “ATM” were arrested on criminal charges.

While the charges haven’t been disclosed, local mainstream media reported that they include criminal conspiracy, cheating and forgery. The developers were also the co-founders of the country’s first crypto exchange, Unocoin.

At the same time, one of the leading global auditing companies, Ernst & Young (EY), announced that they are looking to hire 2,000 employees in India. The objective is to expand its digital services, including artificial intelligence (AI) and blockchain applications.

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According to cryptocurrency intelligence firm CipherTrace’s Q3 Cryptocurrency Anti-Money Laundering report, as of quarter-three, 2018, cryptocurrency thefts had already reached $927 million. The blockchain cybersecurity professionals identified theft and hacks at platform layers and exchanges to be a major problem, evolving further from its Q2 findings.

In the CipherTrace second-quarter report, the company identified that there were more thefts during the first half of 2018 compared to the entire year of 2017 alone. Some $731 million worth of cryptocurrency was stolen from exchanges with some of the most notable hacks including that of Japanese exchange Coincheck at $530 million, and BitGrail that lost some $195 million dollars’ worth of tokens.

As of the Q3 report, the number now stands at $927 million lost in cyber attacks and CipherTrace predicts that this trend will continue. By the end of the year, they say, thefts will add up to well over $1 billion.

In fact, the report already leaves out some $50 million swindled in CoinHoarder phishing attempts and the company further claims to be aware of at least $60 million cryptocurrency that was stolen but not made public.

Major Cryptocurrency Thefts of Q3

The report highlights the main cryptocurrency thefts of Q3 2018 as Bithumb, which lost some $30 million in a “cyber intrusion,” and Bancor that lost $23.5 million due to a breach in a smart contract and was forced to shut down operations.

Another Korean exchange Coinrail also lost over $40 million in altcoins while the Bitcoin Gold 51% attack netted thieves in excess of $18 million.

Of note is the fact that the US came out as one of the most vulnerable countries to cryptocurrency theft, with 56% of all attacks happening here.

With cryptocurrency tanking and holders’ portfolios losing value daily, the last thing they need is to have their cryptocurrency stolen due to a cyberthreat.

This report just goes to highlight the importance of correctly storing your cryptocurrency in a hardware wallet. Never leave it exposed in a hot wallet on an exchange where a hacker has a good chance of reaching your funds.

This post is credited to ccn

A South Korean blockchain startup, Presto, will reportedly file a constitutional appeal over the county’s ban on Initial Coin Offerings (ICOs), South Korean economic media outlet Sedaily reports Dec. 6.

Presto claims on its website that it provides a “total solution to development teams from website building to token issuing.” The startup was reportedly trying to run a Decentralized Autonomous Organization-based Initial Coin Offering (DAICO) in South Korea for the first time.

As Cointelegraph explained in a dedicated guide, DAICOs aim to improve the ICO fundraising method by integrating some features of Decentralized Autonomous Organizations (DAOs).

This fundraising method enables users to use smart contracts to vote for a refund of the funds if they stop trusting the developers or lose faith in the project, Sedaily notes.

As Cointelegraph reported, South Korea banned all ICOs in September last year. Sedaily reports that Presto’s CEO and founder, Kang Kyung-Won declared that the startup has “been hitting a snag as the government and the National Assembly have done nothing over the last one year since the government’s blanket ban on ICOs.”

He then announced their intention to file a constitutional appeal:

“We will ask the court to rule on the ICO ban and the legislature’s nonfeasance.”

Sedaily explains that according to Presto, the ban infringes on “people’s freedom of occupation and property and equal rights and scientist’s basic rights.” Kyung-Won said that given the fast pace of technological development that came with the fourth industrial revolution, “such unconstitutional and pre-modern measures as the ICO ban should not exist any longer.”

South Korea’s stance to crypto regulation stands in clear contrast with other countries like Malta. As Cointelegraph reported in July, Malta has been acclaimed as “the blockchain island” after the local parliament approved three bills that gave the crypto industry unprecedented legal clarity.

The Maltese government is also reportedly working on an artificial intelligence (AI) strategy of which the ultimate objective is to “explore a citizenship test for robots in the process of drafting new regulation for AI.”

That being said, South Korea recently overtook the Maltese crypto exchanges daily trading volume in November according to a CryptoCompare report. In the document, analysts suggest that the reason behind this shift are “competitions, trans-fee mining and rebate programs.”

This post is credited to cointelegraph

South Korea‘s Finance Ministry is considering taxation on cryptocurrencies and Initial Coin Offerings (ICOs), daily English-language newspaper The Korea Times reports Monday, Dec. 3.

Hong Nam-ki, South Korea’s new Minister of Economy and Finance as well as new Deputy Prime Minister, revealed that а crypto taxation plan will be finalized according to global taxation trends in the industry.

Pointing to the current ICO ban in South Korea, the deputy prime minister stated that the authorities will also form a new stance to the crypto industry, based on careful consideration of “market conditions, international trends and investor protection issues.” In his written answer submitted to the National Assembly for his confirmation hearing planned for Tuesday, Dec. 4, Hong continued:

“We will determine our policy orientations on ICOs with relevant agencies after reviewing the results of the financial regulator’s market survey and getting feedback from experts.”

The minister revealed that South Korea’s government is planning to set up a task force formed from relevant state agencies, such as the National Tax Service, in order to examine foreign cases of taxing crypto as well as the ICO industry.

In the statement, Hong wrote that cryptocurrencies are “electronics signs of values issued privately,” as compared to assets issued by central banks or other financial institutions.

The minister has urged for crypto regulation that would be developed and agreed upon internationally, noting that there are around 2,000 cryptocurrencies traded worldwide, with 160 of coins operating in the domestic market. At the same time, Hong stressed that the authorities “need to be careful” in setting up a due regulatory framework.

As well, the deputy minister claimed that authorities “will do [their] utmost to nurture” blockchain technology, stressing that 90 percent of blockchain-related businesses, except crypto exchanges, can be considered as venture companies, citing Statistics Korea.

In October, Cointelegraph reported on South Korea’s government allegedly planning to announce its official stance towards ICOs in November, as revealed by South Korea’s then-“top official,” Hong Nam-ki.

After banning ICO sales back in September 2017, South Korea’s government began to consider legalizing the sphere in August 2018, which went in line with the country’s plans to build its own “blockchain island” in the Jeju Island Resort. In October, a member of South Korea’s National Assembly Min Byung-doo called on the state to “open up the road” to ICOs, urging that “prohibition is not the only way.”

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While initial coin offerings (ICOs) are unregulated in many well-developed nations, Japan and Singapore are keen to provide clear guidance and implement new regulations for the cryptocurrency industry. According to a JiJi Press’ article published on December 1, 2018, the Japanese Financial Services Agency (FSA) will launch a transparent ICO regulatory framework shortly, with the intent of protecting their investors from scams and Ponzi Schemes.

Japan Will Launch Regulations Concerning ICOs

The JiJi Press reported that Japan is set to launch regulations concerning ICOs, a fundraising approach many startups use to raise capital by issuing native cryptocurrencies.

While ICOs democratize early-stage investing and can help startups gro, in light of the high number of fraudulent ICO cases abroad, Japan’s financial watchdog will limit the amount an individual can invest in an ICO to protect retail investors.

According to the New York-based Statis Group, studies indicated that in 2017, almost 80 percent of ICOs were scams designed to trick retail investors. For example, Arisebank recently tricked investors and promoted themselves as the first decentralized banking platform. Jared Rice, the CEO of Arisebank, was recently arrested as he allegedly defrauded investors of over $4 million in the scam.

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To ensure even greater investor protection, any businesses that want to raise funds via a token sale also need to register with the FSA first. For the regulations to pass, the FSA will submit these bills to revise the financial instruments, payment service laws, and exchanges in the next parliamentary session in early next year, January 2019.

Singapore Published Updated ICO Guide

Singapore is, however, even more ahead of Japan when it comes to offering a stable regulatory framework. On November 14, 2017, the Monetary Authority of Singapore (MAS) published a guide concerning Digital Token Offerings. The MAS has recently updated the guide to include information concerning businesses looking to raise additional capital via an ICO on November 30, 2018.

The updated draft goes into greater detail about the Singaporean Central Bank’s position on how financial intermediaries should behave based on Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) policies.

The New Payments Framework emphasized the importance of intermediaries taking appropriate steps to develop and implement internal policies under the appropriate MAS notices. Even if the cryptocurrency token is not a security, it will, however, need to comply with AML and CFT regulations.

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Well, that escalated slowly.

The CEO of “AriseBank,” who CCN previously reported as the target of an SEC injunction and civil proceedings in January, was arrested by the FBI this week without incident on charges of fraud to the tune of around $4 million, according to a press release from the Department of Justice. The arrest comes on the heels of a California US District judge giving some resistance to an SEC request for an injunction against another ICO against which it has a civil suit.

The actions of 30-year-old Jared Rice Sr. are particularly egregious in contrast to those of Reginald Buddy Ringgold III, in that he is alleged to have actually gone on a spending spree even while his unregistered and unregulated security offering was in progress. As DOJ tells it:

“Even as he touted AriseBank’s nonexistent benefits in press releases and online, Mr. Rice quietly converted investor funds for his own personal use, spending the money on hotels, food, clothing, a family law attorney, and even a guardian ad litem.”

A History of Scamming and Domestic Violence

According to public records and the Grand Jury indictment, Jared Rice was previously charged with tampering with government records in Texas for forging the Secretary of State’s seal and signature on incorporation documents. In the same case, which dates back to 2015 and was related to another attempted internet venture, Rice was charged with stealing – in that case, investor funds. This would have been something an ICO reviewer might have come across with any degree of research.

To add a bit of TMZ-style flair to his case, Rice decided to use some of the proceeds of the AriseBank scam to fund his family attorney and a guardian ad litem, which are items related to his apparent domestic problems. In the photo to the right, he is under arrest and held on $15,000 bond for assault on a family member. The domestic violence arrest appears to have been after the charge of defrauding the previous investor, who is not named in the Grand Jury indictment document nor is immediately apparent in other methods of inquiry.

It seems that in all his spending, he did not think to pay to scrub his arrest records, not even with the prospect of millions of dollars more.

The case brings to mind the much more successful scamming of crypto mining executive Josh Garza, who was eventually sentenced to federal prison.

Here is the full indictment:

Jared Rice Indictment by on Scribd

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Japan’s financial regulator is set to introduce new Initial Coin Offering (ICO) regulations to protect investors from fraud, local news outlet Jiji Press reported Dec. 1.

According to “informed” sources cited by Jiji, business operators conducting ICOs will be required to register with Japan’s Financial Services Agency (FSA).

The agency is reportedly planning to submit bills revising financial instruments, exchanges and payment services laws to the ordinary parliamentary session that starts in January.

This action has been undertaken “in view of a number of possibly fraudulent ICO cases abroad” as a way “to limit individuals’ investment in ICOs for better protecting them.”

A study reported by Cointelegraph this July identified 80 percent of the ICOs conducted in 2017 as scams.

As Cointelegraph Japan reported last month, the FSA Study Group on Virtual Currency Exchange industry conducted its tenth meeting to discuss ICOs. The tokens emitted during ICOs where classified into three categories: virtual currencies without issuer, virtual currencies with issuer and tokens with issuers that are also obliged to distribute revenues.

According to the report, the first and second token classifications are subject to settlement regulation such as the Financial Instruments and Exchange Act. The third of ICO tokens is subject to investment regulations like the Financial Instruments and Exchange Act.

This post is credit to cointelegraph