Day: July 9, 2018

According to a survey conducted by U.S. law firm Foley & Lardner LLP, investors and executives prefer Ethereum over Bitcoin and other leading coins like Monero, Dash, and Zcash. At the same time, there is a desire for more regulations in the crypto market.

Survey: Foley & Lardner

The survey — completed by more than 60 professionals, the majority of whom are investors or business executives — contained questions related to regulations, investments, initial coin offerings (ICOs), the likelihood a crash, and market capitalization, providing important statistics that enthusiasts should pay attention to in the coming year.

It showed that most of the respondents want a more regulated industry in the U.S, because, as of now, there is a lack of clarity on how to apply the current financial rules and regulations to the digital asset market.

With regards to the top coins, 43% of participants believe that Bitcoin has the greatest likelihood for point of sale (POS) purchases, but only 35% believe that it is the best investment opportunity. In fact, it is beat out by Ethereum at 38%.

As for ICOs, 84% of those surveyed by Foley & Lardner believe that the fundraising method should be regulated. At the same time, 86% said that the crypto industry needs to develop global regulatory standards.

According to the findings, the crypto industry is facing other risks too. For example, hacks and security breaches are the most pressing threats to the viability and growth of the ecosystem. 71% of respondents indicated that theft of cryptos is a strong or very strong risk.

With regards to the future, 41% of the respondents said that they thought the market would crash in the next 12 months, and another 29% believe that this will happen in the next two to five years. That said, in attempts to take advantage of the volatility in the market (the respondents were primarily executives and investors, remember), almost 60% of them would take risks in order to obtain gains.

Allison Charney, partner and member of Foley & Lardner’s Blockchain Task Force, said of the survey:

“The U.S. has long-standing anti-fraud laws that apply to cryptocurrencies, but there are potential gaps and shortcomings in this developing area. While worries about fraud aren’t necessarily surprising, they do provide another sign that industry insiders view regulation on the whole as a good thing.”

Another point of interest is that those surveyed believe Bitcoin’s market capitalization is going to be surpassed — at some point — by another digital currency like Ethereum. A combined 45% said that they believe it is “possible” but it’s too early to tell when, 5% said that it will happen within one year, 14% said that it will happen within 1 to 2 years, 18% said that it will happen within 2 to 5 years, 5% that it will happen in more than 5 years, and 11% said that it will never happen.

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European Parliament asked academics to share their insight on cryptos, and they advised ECB to stay cautious, although stressed that VCs won’t pose any serious risk in the near future

The French government seems to be moving towards regulating ICOs in 2018, according to a recent Autorité des Marchés Financier (AMF) annual report, writes CoinGape.

According to AMF’s report,  ICOs are most definitely on the agenda for further regulatory framework as Robert Ophèle, President of the AMF indicated recently, suggesting that the government body will:

“…continue to reflect on changes in the regulatory framework in the face of new offers, in particular, the Initial Coin Offerings (ICO), and to promote at European level the French regulator’s approach to innovation.”

The AMF last published an update in February of this year with its analysis of the legal qualification of cryptocurrency derivatives, as well as ICO guidance resulting from a public consultation of the relevant actors on the French market, according to law firm Kramer Levin.

The AMF has now launched a program of research called UNICORN (Universal Node to ICO’s Research & Network) in order to give greater clarity to those involved and to better protect potential investors. The government body has also suggested that more academic research is necessary, although it has rather followed the direction of many governments globally of promoting awareness campaigns to point out the risks of Bitcoin to “unsuspecting” potential investors.

On a positive note, it appears that the AMF has accepted that ICOs may have a productive place within France’s financial structure in the not too distant future. Ophèle said:

“In parallel, considering that certain forms of ICO could in the future constitute an alternative mode of financing for a segment of the economy in connection with blockchain technology, the AMF has launched a program of support and research of ICOs.”

The French press is far more upbeat on the question of coin offerings, recently suggesting that France should become ‘la Capitale des ICO’. The recent AMF suggestions require that best practices should be clear and complied with, also that they could extend the scope of current regulations which treat ICOs as public offerings of securities. Another suggestion is to issue an ICO license based on the regulatory model.

In response to these suggestions, the AMF received 82 responses, most of which chose for the new regulation to be optional, with a specifically tailored framework.

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It’s been a standoff between the bitcoin bulls and bears over the past few days, but the bulls might getting ready to take charge.

The highly sought after domain name Crypto.com — of which for years the owner refused to sell — has been purchased by cryptocurrency wallet provider Monaco. In turn, Monaco has rebranded itself as “Crypto.com.”

Monaco Becomes Crypto.com

According to insider Niko Younts — owner of over 1,000 crypto-related domain names — the cost of the domain could be between $5 to $10 million. Younts, who spoke with The Verge, noted that the term “crypto” is a big one for industry leaders from a marketing perspective. As of now, the numbers surrounding the deal have not been made public and Monaco CEO Kris Marszalek has declined to go into any specifics.

The domain name was first registered back in 1993, years before we saw the emergence of Bitcoin, by professor of computer and information science at the University of Pennsylvania Matt Blaze — who also sits on the board of directors of the Tor Project.

Although the professor has received an increasing number of offers for the domain name over the past few years, Blaze has repeatedly said that Crypto.com was “not for sale.” He stated the fact on Twitter in September of last year, when cryptocurrencies were attracting a lot attention due to the increasing value of the coins, and again in January.

Despite this, Blaze has agreed to a deal with Monaco, a cryptocurrency platform that offers wallet and exchange services and is also developing a crypto-backed debit card in cooperation with Visa. As noted, the numbers have not yet been released, but according to Monaco’s CEO the deal wasn’t all about the money, the sale was more about finding the right home for the domain: “If it was only about money he’d have sold it a long time ago,” Marszalek said. He continued:

“This is a very powerful identity that we are taking on. It’s representative of the entire category so it comes with a huge responsibility on us to carry the torch. We don’t take it lightly and this is one of the things that I think we conveyed successfully, that, as a company, we do have a higher purpose.” He added:

“Fundamentally, blockchain and crypto will enable [the next generation] to control their money, to control their data and to control their identity, these are the three fundamental things that weave the fabric of society. For us this is the purpose, we want to [accelerate] the world’s adoption of cryptocurrency.”

Considering the price of other domains in the market, it is likely that the Crypto.com sale is a multi-million dollar deal, as other popular domains have drawn in big bucks. Block-chain.com was bought in May for 1$ million.

Prior to this transaction, the most expensive blockchain and crypto-related domain names sold were Btc.com (which sold for $1.1 million in 2014) and Eth.com (which sold for $2 million in October 2017). Ethereum.com’s asking price is $10 million. Blockchain.us is on sale for $3.45 million.

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This article originally appeared on Bitcoin Magazine.

Australia’s tax authority has declared intentions to track citizens who hide their cryptocurrency gains offshore using data-matching services that also target “unexplained assets and wealth”.

Taxation

Earlier in 2018, the Australian Tax Office (ATO) published guidelines on the taxation of virtual currencies. It highlighted Bitcoin and other cryptocurrencies that behave similarly to Bitcoin as neither being money, or foreign currency, but a property deemed similar to assets, making them liable for capital gains tax.

Despite the bullish comments from Tony Richards, head of the Reserve Bank of Australia (RBA) in June, it was evident in his eyes that the mainstream adoption of virtual currencies wasn’t to happen in the foreseeable future, which may have contributed to the “asset” classification.

“100-point” check

Also in June, ATO announced its enforcement of crypto tax requirements through a 100-point check, which is a system that will be utilizing sophisticated data-matching techniques and is a system already favored by the Australian government as well as other sectors.

Through existing data-sharing agreements with over 40 other nations, the ATO can now target crypto-investors trading on offshore exchanges. It is estimated by the country’s accounting body CPA Australia that this will be the first time ever that “hundreds of thousands” of Australian taxpayers will make cryptocurrency tax declarations.

However, ATO acting deputy commissioner Martin Jacobs believes it is impossible to tell just how many will be including gains and losses on cryptocurrencies in their tax returning this year.

End of double taxation

Up until now, there had been a “double tax” on cryptocurrencies which lifted on 1 July 2018. The 2017-2018 Budget Summary writes: “The Government will make it easier for new innovative digital currency businesses to operate in Australia… purchases of digital currency will no longer be subject to the GST.”

It later added: “Currently, consumers who use digital currencies can effectively bear GST twice: once on the purchase of the digital currency and once again on its use in exchange for other goods and services subject to the GST.”

Speaking with local media outlet the Australian Financial Review (AFR) Jacobs said, “Our feeling is that the vast majority of investors who joined the bubble in 2017 are likely to be in the loss position as opposed to a gain… The other assumption is they probably haven’t disposed of their cryptocurrency. They might just be holding it.”

Under that condition, there would be no tax implications; Jacobs did reveal that the ATO isn’t “alarmed” by the crypto-specific tax compliance risks.

He said, “Where people attempt to deliberately avoid these obligations we will attempt to take action. We have a range of existing powers that are designed to address unexplained wealth and conspicuous consumption that may arise through profits derived through cryptocurrency investment.”

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An official report released by the Bank of Korea (BOK) revealed that the outstanding balance of virtual accounts in local banks reached 2 trillion won (US$1.79 billion) as of December 2017. The amount, equivalent to about eight percent of total deposits operated by brokerage houses in South Korea, poses an insignificant risk, according to the central bank.

Bank of Korea Reveals Outstanding Balance of Digital Currency Accounts Worth 2 Trillion Won

South Korea has one of the largest cryptocurrency communities in the world, hosting 23 self-regulated digital currency operators and billions of Won traded daily. The top 2 exchanges, Bithumb and Upbit, have dealt nearly $600 million (89,128 BTC) and $121 million (18,097 BTC) worth of trades, respectively, in the last 24 hours (at the time of writing), according to CoinMarkeCap.

Bank of Korea, the country’s central bank, stated that investment in digital currency assets remained low despite the cryptocurrency fever in late 2017 that sent Bitcoin through the roof, up to the $20,000 all-time highs in mid-December.

In that period, when the total market capitalization of all cryptocurrencies traded in exchanges reached $900 billion, Bithumb held over $6 billion in user funds. The operator revealed the information in April 2018 as, being the only publicly listed cryptocurrency exchange in the world, it is required to disclose its holdings and revenues to investors.

The outstanding balance of digital currency accounts in South Korean banks reached 2 trillion won, which is about eight percent of the total 26 trillion won worth of deposits managed by South Korean brokers. The weight of cryptocurrency in banking accounts, however, is not enough to unsettle the country’s top financial authority, reports the Yonhap News Agency.

“The amount of crypto-asset investment is not really big, compared with other equity markets, and local financial institutions’ exposure to possible risks of digital assets is insignificant. Against this backdrop, we expect crypto-assets to have a limited impact on the South Korean financial market”, said the central bank.

The market value of cryptocurrencies, however, nosedived during the year of 2018 with market capitalization standing at $273 billion today, compared to nearly $600 million on 31 December 2017. This is expected to have made a significant dent in the value of South Koreans’ cryptocurrency holdings year-end.

As South Koreans increasingly adopt digital assets as an investment and as a means of payment, lawmakers have come up with a number regulatory measures, including a real-name account system and a ban on investment by minors. The country’s financial watchdog, the Financial Services Commission, has recently admitted “there are a lot of issues” with the current regulation which need to be addressed and reviewed.

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British business entrepreneur and founder of Virgin is now to host a major blockchain summit at his home in Marrakesh, writes Forbes.

The summit is normally held at Branston’s personal offshore home on Necker Island in the British Virgin Islands. However, it was devastated by last year’s Category Five storms which tore through the island, destroying numerous private residences.

In view of this, an alternative location needed to be found for the high-profile conference, which was responsible for the forming of the Blockchain Alliance which now includes 36 government agencies and the Global Blockchain Business Council, with members from 35 countries.

This year, the founder of the annual event, investor Bill Tai, announced that the event would be held at Branston’s Kasbah Tamadot in Marrakesh, Morocco, with eminent guests Google co-founder Sergey Brin and Kenya cabinet secretary Joseph Mucheru, along with 30 speakers. Building blockchain in Africa is reported to be the central focus of this year’s conference.

Tai commented:

“The whole continent is a bit of an unknown to a lot of folks because they just don’t get much exposure to it, I think getting a lot of people together that are knowledgeable, with reach, and high profile, that collectively can form a view about what are the opportunities at hand can both serve philanthropic and commercial interests.”

Blockchain in Africa is developing slowly but surely. Ghana-based Bitland and Kenya-based Land Layby are working to use blockchain to create formally-recognized infrastructures for proving land ownership, and the technology is increasingly being used in logistics to track goods from growth to table. Many small businesses are getting much-needed support from NGOs and private companies integrating blockchain projects into a range of sectors across the continent.

Tai has his own project in mind which he says he is due to announce, called Barking Dog. The project is reportedly designed to help governments without land titling in place to use blockchain to assure citizens and governments of their rights to land and, once established, to tokenize the assets.

The World Economic Forum estimates that 90% of Africa’s land is “completely” undocumented and Tia maintains blockchain could become a major factor in effecting the necessary changes to the status quo.

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Bancor is said to have suffered “a security breach” this morning.