Why Crypto Bot Trading Is Choking Mass Adoption

Regulators are not going to help the industry, until it helps itself.


To a crypto layperson, hearing about Bitcoin price manipulation via sophisticated yet easy-to-procure trading bots may conjure dime-a-dozen conspiracy theories.

The deeper one delves into the intricacies of this exciting and often treacherous crypto industry though, the more sense such talk makes.

Not only is price manipulation very real and – at a closer glance – quite blatantly obvious, it is yet another major hurdle in the path of regulation, institutional adoption, and by extension: mass adoption.

According to CoinList’s Andy Bromberg, such practices “hurt the market’s reputation and they hurt individual investors”.

How do crypto trading bots work and why do people use them?

Long story short: trading bots are algorithmic auto-traders, capable of opening and closing positions, mimicking the activities of several trading accounts and pulling off a number of other hair-raising stunts that squarely put a nail into the coffin of crypto trading legitimacy, every time they’re executed.

These bots can be programmed to push a number of abusive trading strategies long banned in other markets, such as “wash trading” (the artificial generation of seemingly massive trading volumes, through the simultaneous opening of buy and sell orders) and “spoofing” (the opening of fake orders to generate fake buy- or sell-volumes, thereby pumping or driving down the price of an asset) etc.

The goal of such shenanigans is always to make money at the expense of the ‘honest’ trader.

Price manipulation hurts individuals, and it hurts mass adoption

How price manipulation hurts individual traders is self-explanatory: the mini pump-and-dump schemes resulting from abusive trading activity net profits for the bot users at the expense of regular, well-intentioned traders who believe they’re playing on a level field.

The damage wrought upon the overall direction of the crypto industry by these short-term profit-chasers is truly massive. They de-legitimize the very mechanisms responsible for crypto asset price-discovery, compromising the integrity of the market and prompting regulators to squarely deny ETF proposals, citing these issues.

It’s the reason that the CBOE wouldn’t get anywhere with its ETF proposal – and therefore withdrew it from consideration just minutes before publication of this article.

Can the industry self-regulate and rid itself of this “disease”?

The short answer is yes. The Winklevoss twins are already involved in various efforts and initiativesaimed at self-regulation, and the community as a whole acknowledges the need for some sort of market regulation.

But the real problem is that instead of punishing such activities, exchanges often welcome them as means to pump their own volumes. Indeed, some exchanges are known to readily put bots programmed for abusive trading activity at the disposal of their users.

While all this goes on, crypto enthusiasts over at Reddit entertain themselves by dabbling in a bit of attempted price manipulation of their own: a thread aimed at tricking bots into gleaning positive crypto sentiment off internet chatter was launched, and it took off big time.

Unless of course, the bots upvoted it themselves… oh dear God, Skynet.

Author: James West
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Cryptocurrency Regulation battle Intense In Africa, Regulators Pin Down Suspicious Cryptocurrency Projects

Cryptocurrency craze among African audience is at its peak but 2019 might see many African countries imposing cryptocurrency regulations. The latest report released on January 03, 2019 indicates the initiative of ‘Africa’s new regulatory working group’ created to find out the potentials of blockchain and cryptocurrencies within the nation.

Regulators keen to impose cryptocurrency regulations in Africa

Consequently, on January 07, 2019, an African local media ‘IT Web Africa’ unveiled the upcoming plans of ‘Capital Markets Authority of Kenya (CMA). According to the reports, CMA cautioned public over ‘KeniCoin crypto tokens and crypto trading in Kenya’. KeniCoin is a digital token launched in July 2018 and has promised to provide 10 percent monthly returns on investment to the users.

CMA warns crypto enthusiasts in Kenya ‘to be caution in dealing with such firm’ and as such, the regulatory body is investigating ‘Wiseman Talent Ventures’, the ‘company behind the KeniCoin crypto tokens’. After the viable investigation, Wiseman Talent Ventures is quiet and has not discussed anything on the claims.

Also called as Capital Markets Authority, the CMA is an independent governmental body, supervising, licensing and monitoring the market activities. Addressing KeniCoin trade nature, CMA counseled that;

Further, the Capital Markets Authority has noted discrepancies in the information provided in the website http://www.kenicoin.com and the information given to the authority during interviews of Wiseman Talent Ventures leadership in relation to the total number of Kenicoin sold and the total funds raised. CMA is currently investigating the operations of Wiseman Talent Ventures.

Many African countries including South Africa are part of Financial Action Task Force(FATF), a group of 37 countries, which is planning to formulate governing rules and guidelines to govern cryptocurrency exchanges. It will principally make sure effective countermeasures are in place to prevent activities such as money laundering and terrorist funding, according to a Japanese government official familiar with the matter.

Status of Cryptocurrency regulations in Africa

  • March 2018 – Central Bank of Kenya warned general public over-investment in Bitcoin and other cryptos
  • May 2018 – South African Reserve Bank called digital currencies as ‘cyber –tokens’
  • CMA sent out ‘caution notice’ to all crypto investors’ citing global market volatility
  • January 2019 – South Africa’s revenue service urged to amend ‘tax return forms’ to add cryptocurrencies as a better approach to impose cryptocurrency regulations
  • Africa’s government announces the initiation of ‘unified inter-governmental regulatory framework’
  • January 2019 – Capital Markets Authority (CMA) cautions public over KeniCoin and subsequent crypto trading in Kenya

Finance minister Tito Mboweni responded to the question of local African media that the cryptocurrency regulations in South Africa are likely to subject under tax consideration. He said that’

“Taxpayers who have made some form of declarations regarding cryptocurrency trades have captured such trade as a form of ‘other trade income’ or ‘other trade loss’, and have made reference to a description of digital/cryptocurrency trading (e.g. Bitcoin Cash, Litecoin (LTC), Ethereum (ETH), Zcash (ZEC) to name a few).”

Africa is bird’s nest for many successful cryptocurrency projects and the future of cryptocurrency depends on the nature of regulations that will be imposed on cryptocurrency project by African countries.

Author: Tabassum
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South African Officials Create Regulatory Working Group Dedicated to Cryptocurrencies

The Minister of Finance of South Africa, Tito Mboweni, explained in a letter on Jan. 2 that the region’s government has created a regulatory working group dedicated to cryptocurrencies. According to Mboweni, the working group includes representatives from multiple South African agencies and aims to produce a comprehensive regulatory response to the growing digital asset economy.

South African Regulatory Working Group Aims to Provide a Cohesive Regulatory Response to Cryptocurrencies

South African Officials Create Regulatory Working Group for Cryptocurrencies
South Africa’s Finance Minister Tito Mboweni.

The cryptocurrency economy has grown significantly in South Africa according to multiple studies conducted last year. Last November, research commissioned by the firm Luno indicated that 70 percent of South African consumers define digital currencies as an investment, with respondents also claiming to hold cryptocurrencies over the long term. The peer-to-peer exchange Paxful has seen a 25 percent increase in 2018 and Localbitcoins volumes have swelled as well. The South African government has noticed the rising trend and members of the SA Revenue Service (Sars), South African Reserve Bank, Treasury, Financial Sector Conduct Authority, and Financial Intelligence Centre have formed a cryptocurrency working group to better grasp the situation.

In a written letter to parliament, Finance Minister Tito Mboweni explained the new regulatory group will dedicate resources toward a governmental response to cryptocurrencies and the technology’s surrounding economy. Additionally, Mboweni detailed the group plans to publish a study of its findings and some of the working group’s ideas toward a unified cryptocurrency regulatory standard throughout South Africa.

“It is anticipated that, following broad industry comment and participation, the crypto assets regulatory working group will be ready to release a final research paper on the subject during the course of 2019,” Mboweni emphasized in his letter to Parliament.

South African Officials Create Regulatory Working Group for Cryptocurrencies
Research from Luno suggests 70 percent of South Africans have heard about virtual currencies, and most people have been using them as a hedge against inflation.

Mboweni: ‘Crypto-Taxation Is Still Difficult and Needs Reform’

The Minister of Finance and former Governor of the South African Reserve Bank further explained that Sars was having a hard time trying to track the number of capital profits and losses declared on cryptocurrency investments throughout the year’s collection of income tax return forms. Mboweni believes provisions must be added so South African taxpayers can declare the earnings and losses citizens record annually with these types of financial instruments.

“Work is underway within Sars to consider the amendment of the tax forms for the 2019 tax season in order to cater for the description of other assets (which will include cryptocurrencies) by means of a specific description field on the form,” Mboweni noted.

The Finance Minister continued:

Taxpayers who have made some form of declarations regarding cryptocurrency trades have captured such trade as a form of ‘other trade income’ or ‘other trade loss’, and have made reference to a description of digital/cryptocurrency trading (e.g. bitcoin cash (BCH), litecoin (LTC), ethereum (ETH), zcash (ZEC) to name a few).

The recent Taxation Laws Amendment Bill of 2018 details how cryptocurrencies should be treated when it comes to filing income tax and VAT records in South Africa. Mboweni concluded that the amendments proposed in that bill would bring better efficiency to the tax office as cryptocurrencies grow more popular in the region. Further, Mboweni noted that the amendments should clarify whether or not cryptocurrencies can be classified for personal use or for taxes involving capital gains.

Author: Jamie Redman
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Colorado Regulators Shut Down Four More Fraudulent ICO’s

According to a recent press release, Colorado Securities Commissioner Gerald Rome signed orders instructing four companies to cease offering unregistered securities in the state.

Colorado’s Department of Regulatory Agencies (DORA) took a firm action against four Initial Coin Offerings (ICOs). DORA has ordered the companies to immediately stop and refrain from conducting all activities in violation of state finance laws. The latest crackdown brings the total number of “cease-and-desist orders” against cryptocurrency companies in Colorado to 18.

The affected ICOs include Cybersmart Coin Invest, CrowdShare Mining, Cred, and Global Pay Net. While the companies’ locations are unknown, according to a spokesperson for Colorado’s Division of Securities, they advertised their fraudulent products and services to residents of Colorado.

Global Pay Net

According to the press release, Global Pay Net is a company that claims to offer GLP Coins, which provides a blockchain-based international financial platform. The company also listed several prominent figures on its websites who have denied any knowledge of the company.


The second company is Cred, which according to the report, claims to offer a tokenized mobile application that promotes green energy. The firm markets as an ICO for its cryptocurrency dubbed “Cred (CX).” “The website asserts that “Cred holders can rest assured knowing that their Cred will be worth tangible value,” the post reads.

CrowdShare Mining

The third company is known as CrowdShare Mining (CSM) which claims that it will mine digital coins on behalf of investors through green energy sources. In return, investors will pocket 50 percent of the mining profit.

CyberSmart Coin Invest

The last company is CyberSmart Coin Invest which offers digital token named “CyberSmart Coin (CBST).” According to the site, they use bots to trade on Bitmex and other cryptocurrency exchanges. The site also claims to have a secret method of gaining profit. Investors also get 20-35% dividends on a monthly basis.

At least two more cessation orders are still pending, according to the official announcement.

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India to [Finally] Draft Cryptocurrency Regulations in December: Report

After years of ambiguity, the Indian government might, at last, reveal a regulatory draft for the cryptocurrency sector in the country before the turn of the year.

A panel tasked by India’s finance ministry to regulatory norms and guidelines for domestic cryptocurrency trading and the blockchain industry is set lay bare its draft next month, according to a Quartz report on Tuesday,

The notable development came to light in a counter-affidavit filed by India’ ruling government in a Supreme Court case which currently sees India’s domestic cryptocurrency exchange industry challenging the banking ban enforced by the central bank earlier this year.

An excerpt from the government’s counter-affidavit reads:

Serious efforts are going on for preparation of the draft report and the draft bill on virtual currencies, use of distributed ledger technology in (the) financial system and framework for digital currency in India.

The affidavit goes on to reveal that the draft bill and report will be forwarded to members of the finance ministry’s inter-ministerial committee. Subsequently, the committee will hold a meeting on the drafts which will be made available to its members sometime in December.

First established in early 2017, the country’s finance ministry formed an inter-governmental committee that was tasked to examine global regulatory and legal frameworks for cryptocurrencies. The committee, which includes India’s taxation, budget and economic affairs ministries as well as central bank representatives, has the mandate of suggesting measures to propose a regulatory framework for cryptocurrencies – both in usage and trading – in India.

Chaired by Subash Chandra Garg, the head of the committee and secretary of the Department of Economic Affairs, the panel’s approach to regulation will be revealed at a time when the government is considering a ban on the use of private cryptocurrencies In India.

In a televised interview in June, Garg hinted that the committee had “moved quite a lot” in drafting the regulations despite repeatedly missing deadlines on revealing the drafts.

An ongoing ban enforced by the central bank barring banks from providing services to cryptocurrency exchanges has largely chocked the industry in India. It was no longer “reasonable” to continue operations as a crypto exchange, major trading platform Zebpay said in September while ending its operations before headling to friendlier shores in Malta.

Author: Samburaj Das
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Congress Urged To Step Up Cryptocurrency Legislative Efforts

Stakeholders in the cryptocurrency industry have urged the U.S Congress to step up its legislative efforts or risk seeing the country fall behind in the emerging global cryptocurrency and blockchain technology narrative.


Securities Laws Inadequate for Virtual Currency Oversight

Recently, Rep. Warren Davidson (R-Ohio) hosted over fifty digital currency leaders to a roundtable discussion at the Capitol Hill. Other attendees included Andreessen Horowitz, Nasdaq and the U.S. Chamber of Commerce.

One of the top issues discussed was the regulation of cryptocurrency markets. According to CNBC, the chief policy officer at Coinbase, Mike Lempres, said that all the crypto industry wanted was a fair regulation of the virtual currency market. Lempres further stated that the Congress should try new methods of regulation.

Another issue that was brought forward was the application of the Howey Test to cryptocurrencies. The securities law originated from a Supreme Court decision in 1946, which determined if a digital currency was a security or not. SEC boss, Jay Clayton, has, however, stated that there would be no upgrade in standard to favor digital currency.

The crypto group also said that because of unclear regulatory policies, most crypto companies couldn’t tell if their ICOs are regulatory compliant. The industry founders further noted that some of these ICOs should be treated as a commodity.

Moreover, if the government employs stringent regulations or is uncertain, there was going to be an exodus. Most companies will move to friendlier crypto countries, leaving the U.S. behind.

Falling Behind Europe and Asia


The United States is at the risk of falling behind its European and Asian counterparts who have strong cryptocurrency regulations. Some of these countries strive for blockchain and cryptocurrency dominance.

Malta, popularly referred to as the “Blockchain Island,” has attracted significant crypto companies to its soil. When Binance faced regulatory issues from Japan, the company moved to Malta, with Prime Minister Joseph Muscat welcoming the cryptocurrency. Other crypto exchanges like BitBay equally announced its move to the Island. The Island approved three cryptocurrency bills back in June.

Apart from Malta, Switzerland is also struggling to become a Blockchain hub. Initially regarded as “the crypto nation,” the country’s status dwindled as its financial institutions were unfriendly towards crypto companies.

Thailand is also favorable towards cryptocurrencies, as the country’s regulatory body approved seven crypto exchanges. Japan’s stance on crypto, however, is firm. But the regulatory agency has stated there are no plans to curb the crypto market.


Capitol Hill and Cryptocurrency

There have been various deliberations by U.S. Congressmen regarding cryptocurrency. While some support the digital currency, others outrightly kick against it. One of the opponents of cryptocurrency is Rep. Brad Sherman, who called for the outright ban of Bitcoin mining. Also, Rep. Emanuel Cleaver called for a crypto probe, as it is used for illicit activities.

However, some members of the Capitol Hill favor the advancement of cryptocurrency. Congressman Tom Emmer recently pledged his support for blockchain technology and digital currency.

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Regulators Land Punches, But There’s a Long Fight Over Crypto Ahead

There are shifts at ShapeShift and not everyone’s happy with them.

When the token exchange recently announced a new “membership” model with mandatory account identification, there was outrage from certain members of the cryptocurrency community who felt it was abandoning its pledge to privacy and destroying its core value proposition.

Bitcoin developer Peter Todd, for one, was brutal:

ShapeShift described the move as a way to provide added perks to loyal customers and to explore approaches to tokenizing that loyalty. But it was clear that the threat of action by regulators played a big hand in the move.

In a blog post announcing the move, CEO Erik Voorhees, a prominent crypto libertarian and vocal proponent of individuals’ rights’ to private value exchange, acknowledged to his customers that the mandatory aspect of the new model “sucks.” And in a reply to crypto developer Greg Slepak’s suggestion on Twitter that he write an “honest blog” about what happened, Voorhees responded by saying “What I write is being watched very closely. Please give us time.”

But in a statement provided to CoinDesk, Voorhees offered further explanation for ShapeShift’s policy shift. He said an official know-your-customer (KYC) identification system “was not added a result of any enforcement action, but rather a proactive step we took to derisk the company amid uncertain and changing global regulations.”

“We remain committed to the struggle for financial privacy and sovereignty for all humans,” he said, but added,

“Ultimately, ShapeShift is a corporate entity, and we have to abide by laws around the world. “

New York’s AG Office Enters the Fight

Now, with the New York Attorney General’s office releasing a report accusing various crypto exchanges of doing too little to prevent market manipulation, one could conclude that regulators are gaining the upper hand in their ongoing battle with the crypto industry’s more anarchic elements.

Along with the capitulation at ShapeShift, long viewed as a model for those wanting to conduct exchanges outside of the state surveillance ingrained in KYC identification regimes, it does look as if officialdom is striking some heavy blows right now.

But this will be a long struggle, a boxing match, if you will, that still has many rounds to go. New technologies, the dynamic development of token-based business models and an evolving regulatory landscape will continue to create avenues for blockchain and cryptocurrency developers to protect privacy and challenge government intervention.

That, in turn, will spur regulators to pursue new enforcement approaches to maintain their power, which will be followed by new solutions from the crypto side to deal with those efforts. It’s hard to say who will win in the end. Perhaps it will never be resolved.

Some of the battle comes down to defining and managing jurisdictional boundaries — and that doesn’t necessarily go in favor of the regulators.

Crypto technology is, for example, ensuring that the New York Department of Financial Services no longer has the de facto global reach it wielded under the previous assumption that any decent financial entity had to operate in the New York market. The reason old-style financial companies felt compelled to submit to NYDFS rules was that the most important financial intermediaries — the investment banks, the correspondent banks, the custodians and so forth — were based in the state. But crypto technology is explicitly intended to bypass those intermediaries and create peer-to-peer exchange.

This is why exchanges like ShapeShift and Kraken felt comfortable opting out of the New York market when they decided that NYDFS’s BitLicense was too onerous. They could simply choose not to deal with residents of the state — much to the chagrin of the New York Attorney General’s office, which called the exchange’s refusal to cooperate with its request for information “alarming.”

We’ll have to see if there’s any negative fallout for Kraken CEO Jesse Powell, who mockingly responded to the NYAG’s report by comparing the state to “that abusive, controlling ex you broke up with 3 years ago but they keep stalking you, throwing shade on your new relationships, unable to accept that you have happily moved on and are better off without them.” However, Powell’s bravado suggests Kraken is confident it has successfully shut itself off from New York residents and so can, effectively, tell the state’s officers to take a flying leap.

Ironically, Kraken is able to derive that confidence because of sophisticated technological new tools for managing customer accounts that KYC compliance officers call for — such as monitoring IP addresses, which can indicate if someone trying to trade on the exchange’s site is in New York.

New Pro-Privacy Tools

Meanwhile, advances in cryptographic privacy are coming thick and fast, with blockchain developers making strides with tools such as zero-knowledge proofs. Cryptocurrencies such as zcash, monero and dash all enjoy these qualities.

And within Bitcoin Core, work is being done to make it near impossible to trace transactions — a goal that’s critical, not so that criminals can exploit cryptocurrencies, but so that enterprises that might want to use these technologies don’t expose corporate secrets to their competitors.

“Layer 2” solutions such as the Lightning Network, which allow for transactions to occur “off chain” will also enhance the privacy of cryptocurrency users. Meanwhile, related solutions such as discreet log contracts, which essentially blind information oracles from information about the contracting parties they serve, will create extremely private smart contracts and could encourage crypto “dark pools” whose transactions are invisible.

And of course, there’s a big push toward decentralized exchanges. Lawyers often point out that these models are still vulnerable to regulatory oversight, since the developers of the software can be held accountable. But once powerful price discovery systems, atomic swap mechanisms and safe custody models are built so that buyers and sellers can find each other without intermediaries, what’s to stop a new “Satoshi Nakamoto” from anonymously bequeathing such a system to the world and avoiding the clutches of the law?

The Law Is the Law, Though

Still, it’s naïve to suggest that government doesn’t have powerful weapons. If activities that take place on these systems are deemed illegal, then participants must engage them in full knowledge that they are breaking the law. And if they’re caught doing so, prison is always a possibility. That threat can be a strong, moderating force on behavior.

The powers of the state are far-reaching. With the implicit threat of jail time or fines, it can force businesses to spend heavily on legal fees and compliance costs without even taken any action. Voorhees told CoinDesk that ShapeShift spent “over a million dollars of legal expenses on this topic” before making the decision to change policy.

So, in reality, we don’t know who the ultimate winner is in this crypto-versus-regulators fight.

But perhaps this back and forth can have a positive outcome if it sparks a dialogue around the best way to permit innovation and the degree to which privacy needs to be protected. As I’ve argued elsewhere, privacy should be viewed as a key element of an effective system of exchange, without which money can cease to fungible.

That’s why it’s encouraging to see policy makers in various jurisdictions try to give more leeway to innovators in this industry.

On Friday, Rep. Tom Emmer of Illinois, a new co-chair of the Congressional Blockchain Caucus, announced he would introduce three new bills providing safe harbor protections with lightweight regulatory models for blockchain startups. And we’re seeing jurisdictions like Singapore open up a constructive global dialogue on how to encourage innovation in areas such as utility tokens without leaving developers to fall afoul of securities laws.

Such frameworks can give a lease of life to those building a more frictionless, liberal system of value exchange. It could even provide opportunities for ShapeShift, whose new accounts model includes some interesting opportunities in tokenized membership, which could facilitate experiments in disintermediated and decentralized exchange, even within the confines of a KYC regime.

So, grab yourself some popcorn. This is going to be a long one.

Author: Michael J. Casey
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EU Urged to Develop Common Regulations on Cryptocurrency

The European Union should adopt common rules on cryptocurrencies and scrutinize how new digital units are distributed to investors and subsequently traded, according to a report prepared for EU finance ministers.

In the report, the Brussels-based think tank Bruegel argues for EU-level regulation of crypto exchanges and clearer rules on “Initial Coin Offerings” (ICOs) to control risks and exploit the potential of the industry and its underlying Blockchain technology.

The document, seen by Reuters, is due to be presented to the ministers who are meeting on Friday and Saturday in Vienna.

So far EU authorities have avoided comprehensive regulation because of the sector’s relatively small size and the low percentage of trade in bitcoin, the most popular cryptocurrency, into euros. However, they have long worried about the market’s high volatility and the risk of fraud and money laundering.

The market capitalisation of crypto assets, such as cryptocurrencies and crypto tokens issued for an ICO, has fallen to around $200 billion in August from a peak of more than $800 billion in January. Bitcoin has dropped by about 60 percent against the dollar this year.

Now the possible expansion of the crypto exchange business in Europe and considerable interest in ICOs in EU countries, which account for 30 percent of the global market in terms of projects funded, is pushing regulators to take a closer look.

Hong Kong-based Binance, one of the world’s largest crypto exchanges, plans to move to Malta, the EU’s smallest state, after a Chinese crackdown on the industry.

Austria, which holds the rotating EU presidency, is asking whether EU regulations need changing to address “potential risks posed by crypto assets” and harness their full potential, according to a preparatory document for the meeting of finance ministers.

Bruegel says regulation of bitcoins as such is impossible because of their virtual nature, but that of entities dealing with the instruments, such as exchanges, could be subject to stricter disclosure rules or even be banned. “As done in China, mining farms can be forbidden,” the document said, referring to the business of releasing new cryptocurrencies.


New EU rules on money laundering will increase checks on crypto exchanges but are unlikely to be fully operational in all member states before 2020. Regulation of the platform business is largely left to national authorities.

Citing the planned Binance move to Malta, Bruegel said this “might suggest that there is scope for regulatory arbitrage” following a crackdown on exchanges in some Asian countries.

However, the report also said exchanges seeking jurisdictions with lighter regulation might need to be tolerated for some time “to experiment and learn about the best approaches to this fast-developing technology.”

Clearer rules on ICOs could also be useful as most involve utility tokens, where future services are promised in exchange for a current payment – a business that is currently often unregulated. Only the smaller share of ICOs that are securities usually fall under EU financial regulations.

Author: Francesco Guarascio
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UK Financial Watchdog Issues Second Crypto ‘Clone Firm’ Warning This Week

The UK Financial Conduct Authority (FCA) has sounded an alarm over yet another clone company on the cryptocurrency scene. In a second such warning in a week, the financial regulator said on Wednesday that a company called Good Crypto was impersonating FCA-authorized firm Arup Corporate Finance to lure and possibly scam investors.


Currently, the website of the fake venture is still live, offering a wallet that supports various digital currencies, including Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), NEM (NEM), NEO (NEO) and Dash (DSH). The firm assures investors that the service is “highly stable and secure”.

Apart from the questionable advertisement, Good Crypto provides contact details, which the FCA warns “may be false” or “mixed” with details of Arup. The regulator further noted that the real, registered firm has no association with Good Crypto.


The FCA warning comes just a day after the authority brought another suspicious operation to public attention. Fair Oaks Crypto has been revealed to be manipulating investors by claiming the name, the company reference number, and the address of asset management and advisory services provider Fair Oaks Capital.

“[F]raudsters usually use this tactic when contacting people out of the blue, so you should be especially wary if you have been cold called. They may use the name of the genuine firm, the ‘firm reference number’ (FRN) we have given the authorised firm or other details,” the FCA stated.

As cryptocurrencies are not regulated by the FCA, investments are not protected by UK’s Financial Services Compensation Scheme and victims are unlikely to recover lost funds. Thus, FCA has asked investors to be vigilant when investing in any company, noting that they should check first if the company is in the Financial Services Register or the Interim Permission Register. In the event that one finds a clone company, they should report the company to the FCA to stop the fraudulent activities and bring the criminals to justice.

Earlier this year, the FCA launched a cryptocurrency task force in collaboration with the Bank of England to examine the various ways cryptocurrency technologies can be supported and regulated by the authorities. In another attempt to protect investors, the FCA opened investigations on 24 cryptocurrency businesses to determine whether they require FCA authorization.

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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G20 Watchdog Releases Framework for ‘Vigilant’ Crypto Monitoring

The Financial Stability Board (FSB), an organization focused on analyzing and making recommendations to the G20 on global financial systems, has presented a framework for monitoring cryptocurrency assets.

It notably lists several metrics that the FSB will use to keep an eye on the developing crypto markets and “should help to identify and mitigate risks to consumer and investor protection, market integrity, and potentially to financial stability.”

The standardized framework was published along with a report on Monday and has been submitted to the G20 nations’ financial ministers and central bank governors.

According to the document, the FSB’s monitoring efforts will focus on crypto assets’ price volatility, the size and growth of initial coin offerings (ICOs), crypto’s wider use in payments and institutional exposure, as well as the market’s volatility when compared to gold, currencies and equities.

The FSB – which is led by Bank of England governor Mark Carney – will also periodically compile qualitative reports to gather intelligence for market confidence, the report says.

The organization further sets out the reasoning behind the framework, saying:

“While the FSB believes that crypto-assets do not pose a material risk to global financial stability at this time it recognizes the need for vigilant monitoring in light of the speed of market developments.”

The report indicated that, apart from the FSB, other international regulatory organizations too are stepping up their efforts in monitoring specific areas of the cryptocurrency industry.

For instance, International Organization of Securities Commissions, a global regulatory body made of securities watchdogs, is developing its own framework in an effort to help member countries better analyze the impacts of domestic and foreign ICOs on investors.

Meanwhile, the Basel Committee on Banking Supervision (BCBS) is gathering data on its member banks’ direct and indirect exposure to cryptocurrency in an effort to quantify the potential impact of the technology.

The FSB report comes as the result of the G20 meeting in March this year, at which there were calls for global regulation of cryptocurrencies. As previously reported by CoinDesk, member countries agreed at the time that initial recommendations were required over what data should be used to monitor the crypto space, and set July as a deadline.

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

Author: Wolfie Zhao
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