Day: May 1, 2018

IMF risk report on global finance isn’t concerned by crypto #NEWS

In a step towards mainstream adoption, Peter Thiel’s venture-capital firm is backing a startup that intends to bring Wall Street electronic-trading expertise to the cryptocurrency market.

Thiel’s firm, San Francisco-based Founders Fund, is one of the investors behind the early-stage startup, called Tagomi Systems Inc., according to people familiar with the situation who spoke with the Wall Street Journal. The startup has raised $15.5 million to date, one of the people with knowledge of the firm’s plans said, and is still refining its strategy —which could see a name change — the person added.

Tagomi — whose co-founders include Greg Tusar, the former head of electronic trading at Goldman Sachs — intends to be the cryptocurrency version of a traditional broker-dealer. Tusar is a well-known and respected figure in the electronic-trading business. He worked at Goldman for almost 15 years before joining high-speed trader KCG Holdings Inc., where he spent the next four years. 

Bringing Wall Street Ingenuity to Crypto 

Tagomi does face an uphill battle, despite the involvement of Thiel’s organization. Some investor enthusiasm has cooled since December, when the industry registered all time highs for cryptocurrencies. In the U.S., there are also worries surrounding the uncertain regulatory status of the industry.

The problem the startup is looking to tackle is related to the buying or selling of large quantities of digital currencies, which is difficult because of market fragmentation across hundreds of exchanges around the globe. Connecting to all of them requires different accounts, and cryptocurrency exchanges generally impose limits on the amount of funds that can come in and out in a given day.

These obstacles make it both difficult and time-consuming to execute big trades — and another problem is the price of the coins can fluctuate before an investor finishes the buying or selling process.

This is where Tagomi steps in, intending to make trading easier by borrowing a page from the stock market. In U.S. equities, broker-dealers use systems called ‘smart order routers’ that dispatch their clients’ buy and sell orders to various venues, including a dozen exchanges and more than 30 over-the-counter platforms called ‘dark pools.’ These routers make immediate and calculated decisions about which market is the best place to execute a trade at any given time, and Tagomi is looking to develop a similar tool for use in the online cryptocurrency exchange market.

Napoleon Ta, a partner at Founders Fund who leads the firm’s crypto strategy, as well as Tusar, are listed on the March 15 U.S. Securities and Exchange Commission filing as being among the startup’s directors.

As of now, it isn’t clear how much money Founders Fund have invested in the startup. Overall, Thiel’s firm has more than $3 billion under management and has taken stakes in more than 100 companies, including Facebook and Airbnb Inc. Thiel, has many times stated that Bitcoin could become the digital equivalent of gold and is a potentially useful hedge against global chaos.

Image from Shutterstock.

The post Peter Thiel-Backed Tagomi to Bring Expertise to the Online Cryptocurrency Market appeared first on NewsBTC.

Federal regulators are undecided as to whether or not Ethereum (ETH) should be classified as a security, the WSJ reports #NEWS

The chief executive of British multi-national investment bank, Barclays, has announced that they are not planning on launching their own cryptocurrency trading desk anytime soon. The revelation came during the bank’s annual general meeting earlier today.

Barclay’s Crypto Trading Desk Rumours Appear to Be Unfounded

Jes Staley spoke on cryptocurrencies in response to a shareholder’s question posed to him. According to London’s Financial News publication, he acknowledged that the bank was indeed exploring the potential impact of cryptocurrencies on the current financial sector, but stated that he remained sceptical of the technology because of compliance and regulatory issues:

“Cryptocurrency is a real challenge for us because, on the one hand, there is the innovative side of it and wanting to stay in the forefront of technology’s improvement in finance… On the other side of it, there is the possibility of cryptocurrencies being used for activities that the bank wants to have no part of.”

Barclays had been rumoured to be considering a move into the cryptocurrency space by launching their own trading desk to facilitate clients buying and selling the emerging asset class. According to some ‘insiders’ the move was going to involve a partnership with Goldman Sachs, another major financial institution who are currently exploring cryptos. However, last month a spokesperson for Barclay’s stated that there had been no plans to partner with the US-based investment bank. Today’s statements from Staley only serve to support the sentiment expressed by Andrew Smith:

“We constantly monitor developments in the digital currency space and will continue to have a dialog with our clients on their needs and intentions in this market.”

Previously, Barclays had also likened the spread of cryptocurrency to an infectious disease that had already been treated against and was thus in decline. The model labelled members of the public as either ‘infected,’ ‘susceptible,’ or ‘immune’ to the spread of digital currency. The methodology used predicted that Bitcoin was currently on a downwards spiral that would take it well below $6,000 a unit. Since then, the price of Bitcoin has continued to increase from around the $6,800 mark to today’s price of over $9,000.

The topic of cryptocurrencies continues to divide opinion in the world of traditional finance. Whilst the likes of Goldman Sachs seem to finally be embracing the financial innovation, others such as JP Morgan CEO Jamie Dimon retains his fierce anti-Bitcoin stance. He famously called Bitcoin a ‘fraud‘ last September before claiming that he regretted making such a comment because it was all people wanted to talk about with him.

Image from Shutterstock.

The post Barclays Rule Out Launching Their Own Crypto Trading Desk appeared first on NewsBTC.

Let’s continue evaluating banks and crypto – this time in the Western hemisphere #ANALYSIS

SBI Holdings has made its intention to enter the cryptocurrency industry pretty clear in the past twelve months. The group intended to launch a cryptocurrency exchange in late 2017, but those plans were postponed in the end. It now seems the company has updated its original plans, as the launch of their exchange will still be going ahead in the coming months.

SBI Holdings Wants in on the Cryptocurrency Action

Japan has proven to be a very open-minded country when it comes to Bitcoin and other cryptocurrencies. It is also one of the few countries in the world where Bitcoin is considered to be a legal form of money. As such, the ecosystem can genuinely thrive in that part of the world without risking government intervention unless things get really dicey.

Major companies in Japan have been looking to enter the cryptocurrency space. SBI Holdings made their intentions quite clear some time ago, but it seems their initial plans had to be postponed for a while. More specifically, SBI Holdings initially planned to launch a cryptocurrency exchange in the autumn of 2017. That time frame had to be adjusted, mainly because of the hack of the Coincheck exchange.

Additionally, SBI Holdings ran into some minor issues with their business alliance agreement formed with China’s Huobi Group. Two such setbacks in quick succession forced the company to delay the launch of the exchange, but the plan was never scrapped entirely. Instead, SBI Holdings went through the process of obtaining a license to operate a cryptocurrency exchange in Japan, despite not having a working project.

According to new information shared by the company late last week, the cryptocurrency exchange is now set to launch this summer. No specific date has been announced as of yet. Considering that this platform was built from the ground up, it will be interesting to see what SBI Holdings’ new venture will look like. They have been offering a limited version of the platform to a select few customers since late January to properly test the infrastructure and possibilities.

At this time, it remains unclear which cryptocurrencies will be supported exactly. The most popular currencies, such as Bitcoin, Ethereum, and XRP, would make a lot of sense in this regard. Bitcoin Cash and Litecoin are also strong contenders. It seems all supported currencies will have a Japanese yen trading market, yet it remains to be seen if this will apply to all currencies from day one. There are still a fair few unknown aspects to contend with, yet the impending launch is something to look forward to.

There’s no lack of ambition when it comes to SBI Holdings’ cryptocurrency venture. The firm is utterly confident that their trading platform will become Japan’s largest exchange in very short order, and may even bring competition to some of the world’s leading platforms. Living up to those expectations may prove a lot more difficult than the group anticipates, though, as this is a cutthroat business.

Bitcoin rallied more than 33 percent in April, making it the coin’s best month of the year to date.

The Financial Services and Treasury Bureau (FSTB) in Hong Kong has released its 2018 Money Laundering and Terrorist Financing Risk Assessment Report.

The report comes as financial crimes are on the rise, and some are questioning what the city is doing to combat this. Businesses in and around Hong Kong — particularly ones involved with cryptocurrencies — are upset because they are being denied banking services on a large scale, primarily due to the banks fears of money laundering risks. 

According to the statistics, the number of ‘suspicious transactions’ in the finance world has quadrupled in the past six years, while at the same time convictions have gone down.

The FSTB’s report stresses that no specific regulation exists around trading of the coins, and that Money Service Operator (MSO) licenses only need to be obtained for money services conducted in fiat currencies. The report advises that some tokens qualify as securities, while others are considered ‘Stored Value Facilities’ (SVFs), which apply to services offered by Paypal, WeChat Pay, and Alipay. Monitoring began in 2013, and since then police have received only 167 crypto-related reports (most of which related to ransomware). 

The big news here is that the government’s risk assessment for aforementioned SVFs are much higher than with cryptocurrencies. The Hong Kong Police Force (HKPF) notes that they see ‘no apparent sign’ of organized crime, money laundering, or terrorist financing related specifically to the trading of cryptocurrencies.

“Hong Kong is one of the world’s freest economies with a vibrant foreign currency exchange market and no capital controls. VCs are therefore not as attractive as in economies where people may try to circumvent currency controls or seek refuge from a high inflation rate,” the report reads.

ATMs, Exchanges, and Fraud

Despite this lack of a connection between the crypto-space and financial crime, police do closely monitor the number of Bitcoin exchanges and ATMs in Hong Kong, noting that seven such machines exist — although according to the Bitcoin Association of Hong Kong, the number may be closer to 15. Four exchanges are active in the city, though the report suggests that ‘they are not popularly used by people in Hong Kong.’

Fraud on social media appears to be particularly common. While the individual loss from such cases are only in the hundreds to thousands of Hong Kong dollars, the total loss to such schemes amounts to HK$6.4 million (about $815,000) in 2015 and 2016.

The report comes only two months after the Hong Kong government announced new measures to combat money laundering, aimed at company service providers and trusts. The updated measures introduce a new licensing regime and place a higher burden on those setting up shell companies and trusts.

Image from Shutterstock.

The post Low Connection Between Cryptocurrencies and Organized Crime in Hong Kong, Report appeared first on NewsBTC.

Bitcoin has fallen by roughly $400 and is now trading for $8,900. Yesterday, we discussed potential resistance between the $9,000 to 9,300 range, and now that speculation is crossing into reality, though it’s unclear if the currency is slated to stay here for much longer.

Prior to the drop came a bitcoin trading ban in Iran. The country has long allocated fears and rising concerns due to money-laundering, volatility and the loss of investor assets, and now it appears they’ve become too much to bear. Crypto trading – predominantly bitcoin trading – was halted in Iran earlier this week, and now the country is issuing a state-based virtual coin to help boost the country’s economy.

Iran’s national form of fiat – the rial – ultimately plunged following President Trump’s pressure on European nations to assist the United States in rebuilding the nuclear deal it presently holds with Iran. Trump will decide on May 12 whether the U.S. should pull out of the deal, and sanctions are expected that could cripple Iran’s financial infrastructure. The digital currency it’s now issuing is a “back-up plan” that representatives and state officials have had in motion since February.

Iran’s information and communications technology minister Mohammad Javad Azari-Jahromi explains:

“Last week, at a joint meeting to review the progress of the local cryptocurrency project, it was announced that the experimental model was ready. The Central Bank’s ban does not mean the prohibition or restriction on the use of the digital currency in domestic development. The CBI ban on bitcoin dealings was made due to concerns that the volatility in the crypto market could lead people to lose their assets. Bitcoin is not the one and only cryptocurrency.”

The good news is that bitcoin is slated to survive this setback and mark a path towards $12,000 by summer. It’s the first objective of the coin on its way towards higher record prices, though it appears these records are dependent on external factors. For now, the currency continues to react in a mostly positive manner towards trends, news and political data, but investors are warned to stay cautious.

Presently, support sits at $6,000, thus cancelling any bearish objectives. Granted this breaks down, however, downward motion is expected in bitcoin’s future, though this isn’t to be expected immediately. In fact, bitcoin could rise as high as $13,000 following its $12,000 jump, followed by $15,000 and $16,000 respectively.

Despite this, reactions to cryptocurrencies and the outcomes they present remain relatively mixed. A new report issued out of Hong Kong, for example, declares the risk factor with cryptocurrencies as “medium-low,” saying that while volatility exists, bear patterns and financial crime are not presently strong enough to increase risk levels within the region.

On the other hand, Vinay Sharma – senior trader at Ayondo Markets – feels that the “buzz around cryptocurrencies is dissipating,” and that the “question of their use and viability” remains intact.

“In my view, the chances of crypto being used as a viable medium of exchange in the future is very slim,” he stated. “In my opinion, cryptocurrencies aren’t really currencies at all, with volatility so high they become assets that traders and investors can speculate on, and I imagine this will continue to be true in the long term.”