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 to 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:
[S]erious 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 heading to friendlier shores in Malta.
The CEO of design software maker Autodesk Andrew Anagnost believes blockchain technology can end corruption and improve trust in the construction industry, the Australian Financial Review reports.
Anagnost was speaking at the 2018 Autodesk University conference in Las Vegas when he made the comments while speaking with journalists at a roundtable discussion. California based Autodesk was founded in 1982 as design software for professionals in architecture, construction, engineering, manufacturing, media, and entertainment.
Autodesk’s CEO said the construction design software maker had considered the integration of blockchain for its design software, but the company has refrained from making its view public.
Autodesk’s Architecture, Engineering & Construction (AEC) Collection, which is an all one package, has evolved over the years to cover Building Information Modelling (BIM), which is a tool that gives AEC professionals the tools to plan and manage construction and architecture of buildings. The new shift, which sees Autodesk hosting large data sets in the cloud, opening rooms for collaboration between different professionals leaves room for traceability and accountability.
Anagnost believes the integration of the blockchain technology will help deliver trust in the sector.
“What is blockchain good at? It’s a distributed, trusted ledger that cannot be altered and allows traceability and accountability. A technology like that in an environment like construction where various people involved in the process don’t trust each other is going to find some application.”
The design maker is also working on a digital escrow system to improve the trust environment in the construction industry. But trust is not the only area in the construction sector that needs the blockchain technology; corruption is another area.
“Let’s face it, corruption in the construction industry is not uncommon,” Anagnost explained.
“When people are paying hundreds of millions of dollars on large projects, something is always happening somewhere that isn’t quite right. There’s always someone bleeding off resources or money in some inappropriate way.”
But there is a bigger issue at play for using blockchain in the sector, according to Anagnost. Those who don’t want “a clear record of who did what, when and how,” who he believes would make it difficult to enforce.
“I’ve been on construction sites, and I’ve been with quality checkers. They’re taking pictures, and I notice sometimes they log the issue and sometimes they don’t. So I ask them – why didn’t you log that one? ‘Oh, because I know that guy, I’ll tell him about it.’ So the subcontractor he knows doesn’t get their issues logged, but the subcontractor he doesn’t know gets logged,” he concluded.
October 1, 2017. A clandestine referendum election is held against the Spanish government’s orders across schools and polling stations throughout Catalonia. It was a day of defiance with an overwhelming “yes” vote to sever ties with the rest of the mainland. It was also one marked with bloodshed, voter intimidation, and riots.
The main perpetrators, then-party leader Carles Puigdemont and ex-vice president Oriol Junqueras are in exile and prison respectively, along with several other members of the controversial Catalonian government who instigated its independence.
After a couple of weeks of rising tensions, in which the Spanish government pressured Puigdemont to officially declare independence–and which saw massive capital flight as thousands of key businesses moved their headquarters from Catalonia to other provinces in Spain, while the EU condemned the act, Puigdemont found his friends running out fast.
On October 21, the government of Spain eventually suspended Catalonia’s autonomy, declared article 155, and stated that fresh elections would be held on December 21 for a new Catalonian “Govern.”
It wasn’t the best moment for a Spanish government struggling with corruption cases and a never-ending financial crisis. And it also wasn’t truly reflective of the collective desire, as many of the population abstained their vote. The turnout was 43 percent. Although, of that number, a mindblowing 92 percent voted in favor of independence.
Those who wanted to remain were unlikely to leave their houses to angry mobs chanting for independence with a yellow ribbon pinned to their chests.
The Need to Reduce Voter Intimidation
The case of Catalonia isn’t unique, in so much as voter intimidation and poor turnout are characteristic of many elections globally, as is voter fraud, particularly in developing countries with political despots at the helm. Even in one of the most advanced countries in the world, the last election is still being debated and the 2018 midterm led to yet another Florida recount.
There has to be a better way, right?
Ismael Peña-López, Director General of Citizen Participation at the Government of Catalonia certainly thinks so. According to an interview with the La Vanguardia, one of Spain’s most prominent newspapers, he’s all for seeing the electronic voting law amended. Why? Because something isn’t working quite right.
The chaos of the October 2017 referendum and separatist tendency flared up strong emotions throughout the nation, dividing the public (and even families) in two.
It spurred a record number of votes from Spanish citizens outside of Catalonia in the December 21 election. However, turnout was 81.94 percent at the schools and polling stations–compared to just 12 percent of voters registered electronically.
Of all the 226,394 registered voters living outside Catalonia, there were just 27,231 votes, according to the Official Electoral Census.
This poor participation has led Catalonia’s government to approve a law to amend the electronic vote for residents living outside of Catalonia.
While it’s not a process that’s going to happen overnight, it’s projected to be ready as soon as 2020. And, in fact, is a project that was already begun under the leadership of the ousted Puigdemont.
Rolled Out in Three Stages
The new electronic voting will be rolled out in three stages, starting with those living abroad. It’s not that these votes matter less, Peña-López points out, but should anything go wrong with the new system, the damage will be more easily contained.
“It’s not that external votes are less important but we suffer less if it goes wrong, and if it works well, the gain will be enormous and could have a huge impact. This way, the risk is controlled, as it should be.”
Once the new system has been proven with citizens living abroad, it will extend to the anticipated vote, and finally to all citizens, with the main goal of improving voter participation. Although, Peña-López admitted that it would not be easy to make the electronic voting system quickly available to all due to legal, technical, social and economic issues.
An electronic vote costs about one-fifth of a regular vote although, the more the system is used, the more profitable it becomes. Peña-López says that it will increase participation and lower the cost at the same time.
The Problem of Security
While electronic voting is good for people living abroad, for those short on time, or who want to avoid the polling stations, there’s still the question of security. How do citizens know that their vote won’t be tampered with, lost, replicated, or deleted? How can voters be sure that their votes aren’t being monitored, and who takes charge of the data?
These are all questions that naturally arise and complicate the matter. While Peña-López argues that it’s also possible to tamper with urns, he understands the concerns–and the need for a system that would detect any votes that had been tampered with and reject them:
“It’s harder to change 1,000 votes in a physical urn than electronically… That’s why it’s important to audit all votes and that there is a system in place with strong encryption.”
He points to several options for security and to ensure that voters are who they say they are, including biometrics, 2-factor ID, and e-voting in the local embassy.
The Catalonian government hasn’t yet decided the most efficient way of doing this although many are talking about blockchain.
“One interesting option is using blockchain… But we haven’t yet started with the electronic vote. The Government of Catalonia hasn’t laid out a clear bet for blockchain and is still exploring what options there are before deciding.”
However, he added that he had no doubt that the technology is secure and mentioned various examples of companies and parties using it successfully for voting.
Yet Peña-López Isn’t All for Blockchain Voting
Surprisingly, after speaking about encouraging greater voter participation, he says that fewer people would have participated in the Catalonia referendum if it had been done electronically, contradicting his earlier statements.
“It wouldn’t have been the same, it was like a ritual and we needed to see each other, stand together, and be with each other.”
He added that electronic voting loses the magic of mixing with the public and defending the urns.
So, while there is no clear decision on the technology to use for secure, encrypted electronic voting (or indeed a clear will to roll it out to all citizens and move away from traditional ballot boxes), Catalonia is considering blockchain. And just like everything to come out of this rebellious province, if they do go ahead, it will be a country-wide first.
The US Department of Justice (DOJ) has reportedly opened a probe into whether Tether, the eponymous issuer of the USD-pegged cryptocurrency stablecoin tether (USDT), has engaged in illegal market manipulation to prop up the bitcoin price.
Justice Department Investigates Tether for Crypto Manipulation
Citing three people familiar with the matter, Bloomberg reports that federal prosecutors — who had already opened a broad investigation into the cryptocurrency market — have narrowed on Tether and Bitfinex, the crypto exchange giant with whom it shares a management team.
Tether, whose crypto token has a circulating supply of 1.8 billion, alleges that every unit of USDT is backed by $1.00 stored in a company-owned bank account. The firm’s current banking partner — there have been almost too many to list — recently published a letter indicating that it was holding enough USD to cover the outstanding USDT, but some lawyers stated that the letter was written in such a way to absolve the institution, Deltec Bank, from any liability regarding its veracity.
Most tethers enter and exit circulation by way of Bitfinex, who always values USDT at $1.00 regardless of its price on the global market. Critics, including researchers at the University of Texas, have alleged that Tether at least occasionally operates a fractional reserve bank, pumping unbacked tethers into circulation to stabilize the bitcoin price and then selling enough BTC to rectify its reserves.
The company has denied these allegations, and industry stakeholders such as Mike Novogratz have said that Tether’s ability to redeem more than $1 billion worth of USDT when the cryptocurrency fell below its supposed $1.00 peg in October is a strong indication that the token is fully-backed by USD. Subsequent research from the University of Queensland Business School further argued that tether grants had no impact on the bitcoin price.
Justice Department, CFTC Will Coordinate Probes
Bloomberg had reported earlier this year that the Commodity Futures Trading Commission (CFTC) had sent subpoenas to Tether and Bitfinex last December, and today’s report indicates that the DOJ and CFTC are coordinating their efforts. Professor John Griffin, one of the University of Texas researchers who authored the paper alleging that tethers are used to manipulate the bitcoin price, is said to have briefed the CFTC on his findings.
Crucially, though, the report notes that, even if illegal activity has occurred on Bitfinex, the exchange operator’s executives may not necessarily be implicated.
“It couldn’t be determined whether government officials are solely investigating activity that occurred on Bitfinex or if exchange executives are suspected of illegal behavior. Neither the Justice Department nor the CFTC has accused anyone of wrongdoing, and authorities may ultimately conclude that nothing illicit occurred.”
It’s unclear to what extent, if any, the Justice Department’s probe into bitcoin price manipulation has put downward pressure on the crypto market, which is now trading below $150 billion after taking $60 billion in losses in just seven days.
According to Michael Moro, the CEO of a major over-the-counter (OTC) crypto trading firm, investors that bought Bitcoin in early 2017 are now starting to sell.
Speaking to The Block, Genesis Global Trading CEO Michael Moro, who provides institutional investors access to block size liquidity to purchase or sell cryptocurrencies like Bitcoin, Ethereum, and Bitcoin Cash, said that large investors have started to move funds garnered when the price of Bitcoin was just about $1,000.
“We are seeing the folks who bought in early 2017 sell for the first time today,” Moro told Frank Chapparo, adding that the majority of Bitcoin investors that bought into the market in the first quarter of 2017 have started to see near to zero return on investment off of their cryptocurrency investment.
Bitcoin at $4,200
On November 20, CCN reported that the price of Bitcoin reached a new yearly low once again for the second time in a week, falling below the $4,200 mark to $4,170 on fiat-to-cryptocurrency exchanges like Coinbase and Kraken.
The price of Bitcoin on cryptocurrency-only exchanges did not drop below $4,400 due to the premium on the Tether-to-BTC pair created by a decline in the price of the US dollar-backed stablecoin.
“The bears aren’t even pushing, BTC is just free-falling. Very weak dump, imagine what it looks like when the volume comes in. A short-term reversal could happen at any moment – shorting with high leverage is a terrible idea. However, if you are trying to knife catch, be patient. No one should be in a rush to long this,” one technical analyst said.
However, over the past 12 hours, the volume of BTC has increased from around $5 billion to $8 billion, by more than 60 percent, suggesting that BTC could establish a bottom-like trend in the low region of $4 billion.
Throughout the past two days, the volume of BTC remained relatively low despite its steep decline from $5,500 to $4,300, leading investors to be concerned about the short-term trend of the digital asset.
Gloomy Period For BTC
In consideration of poor market conditions and the intensity of the drop of BTC in the past five days, investors, even those that bought BTC at $1,000 to $2,000, are expected to sell a significant chunk of their holdings fearing a further drop below major support levels.
Investors from the first quarter of 2017 are still up 50 to 100 percent on their investments. But, the cryptocurrency market has not seen a correction of this scale since 2014, when the value of BTC dropped by more than 85 percent.
BTC is yet to achieve an 85 percent drop from its all-time high at $19,500. An 85 percent drop from $19,500 is $2,950, and the dominant cryptocurrency would have to drop by more than 32 percent from $4,400 to dip below $3,000.
If investors from nearly two years ago are starting to clean up their portfolio, the vast majority of investors who entered the space in mid to late 2017 have likely existed from the market. The next mid-term rally of BTC and other major cryptocurrencies would require a new wave of investors, which could result in a months-long consolidation period.
Thai citizens will have to be patient in the wait for a retail central bank digital currency that will save them from carrying cash around.
According to the governor of the Bank of Thailand (BoT), Veerathai Santiprabhob, plans to switch from cash to a digital currency will not happen within the ‘next 3-5 years’. This is because the process of creating a central bank digital currency (CBDC) ‘is not easy’ and is time-consuming due to the complex nature of the monetary system.
Santiprabhob noted that though there has been significant progress with regards to CBDCs in some developed countries, it will be harder to replicate that success in developing countries within the next half a decade.
While the Bank of Thailand has not announced any plans for a retail CBDC (digital currencies meant for use by the general public in transactions), it announced three months ago that it had commenced work on a wholesale CBDC (digital currency meant for use by financial institutions in settling inter-bank payments, cross-border transfers etc.)
As CCN reported at the time, BoT is using the Corda distributed ledger technology platform in building the proof-of-concept prototype which will be used in enabling fund transfer among local banks. Dubbed ‘Project Inthanon’, eight commercial banks are participating in the initiative spearheaded by the BoT. The first phase of the project is expected to end by next year in March. During the second phase the initiative will embark on widening the scope:
“Building upon the findings and outcomes from Phase 1, the project participants aim to further develop the capabilities of the prototype for broader functions including third party funds transfer and cross-border funds transfer.”
Public Policy Goals of CBDCs
The comments by the BoT governor come in the wake of a call on central banks by Christine Lagarde, the head of the International Monetary Fund, to consider issuing CBDCs. According to Lagarde, such CBDCs should achieve three public policy objectives:
“This currency could satisfy public policy goals, such as (i) financial inclusion, and (ii) security and consumer protection; and to provide what the private sector cannot: (iii) privacy in payments.”
Though Santiprabhob did not touch on the risks associated with CBDCs, Lagarde warned that there are three downsides to the state-backed digital currencies. Besides posing a risk to financial integrity and stability, the IMF boss noted that CBDCs held the potential to stifle innovation. This is because with central banks offering a full-service solution that extended from the digital wallet to back-end-settlement services, a lot of fintech firms and other players in the sector would go out of business.
However, this could be solved by central banks forging partnerships with banks and other players in the sector with the role of the central banks being limited to back-end-settlement while their partners handle client interface and innovation.
The Malaysian Ministry of Education is turning to blockchain technology to combat degree fraud in order to maintain the integrity and reputation of universities in the South East Asian country.
This has seen the ministry unveil an issuance and verification system for university degrees based on the NEM blockchain. Known as the e-Scroll system, the idea of the blockchain application was mooted early this year by the Council of ICT Deans of Malaysian universities.
The e-Scroll system is expected to combat the rising cases of fake degrees in Malaysia some of which are now even being sourced online from ‘diploma mills’. The fake educational certificates not only disadvantage genuine students but also pose numerous dangers to society when critical sectors such as healthcare are staffed with people of questionable expertise.
“Realizing the need to safeguard the reputation and integrity of Malaysian universities, the Ministry of Education has taken a decisive action to prevent such degree fraud which also cheats and unfairly disadvantages genuine students,” said Malaysia’s Ministry of Education in a tweeted statement.
Enhancing Efficiency in Verification
At the moment, universities in Malaysia get thousands of requests from around the world asking for the verification of educational certificates. So far this has been highly inefficient since it is done via emails and over the telephone but this will no longer be a problem with the NEM-based e-Scroll system.
According to Malaysia’s Ministry of Education, the NEM blockchain was picked because it possesses unique features with regards to authenticating and managing traceability. A QR code is printed on the certificate and whenever there is a need to verify, the QR code is scanned from any part of the world as long as there is an internet connection.
During the first stage of implementing the e-Scroll system, all the degree certifications of the Ph.D. students who will be graduating this month from the International Islamic University Malaysia will be embedded on the blockchain.
At the same time, the Malaysian education ministry has also launched a blockchain technology consortium whose membership is largely drawn from universities in the country. The goal of the consortium is to assist in the training of academics and students on blockchain technology. The consortium also hopes to develop blockchain applications potentially making this a revenue generator for the member institutions.
The six founding member universities of the consortium are International Islamic University Malaysia (IIUM), Universiti Utara Malaysia (UUM), University of Technology, Malaysia (UTM), Universiti Malaysia Sabah (UMS), Universiti Malaysia Terengganu (UMT) and Universiti Teknologi MARA (UITM).
Israeli cryptocurrency mining company Bitfarms wants to become a public company in Canada.
According to its press release, the mining company revealed that it had filed a preliminary prospectus with the Ontario Securities Commission, as it commences with the regulatory process for offering public shares on the Toronto Stock Exchange.
Bitfarms, a crypto mining farm provider, is also listed on the Tel Aviv Stock Exchange but the board feels the Canadian-headquartered and operated mining company could benefit from participating in the Canadian public markets.
The board sees the company benefiting from the Canadian capital market, which has raised “over CAD$54B in equity capital during 2017″ and through greater visibility, ” research analyst coverage, trading volumes, and improved access to North American capital markets.” Most importantly, the public listing of Bitfarms shares will also help streamline the fees the mining company currently pays for operating and reporting in different jurisdictions in Canada.
Chief Executive Officer of Bitfarms, Wes Fulford, argued that the firm would have greater visibility and access to funds by listing their shares on the capital market.
“Our analysis suggests that Canada has one of the most active public markets in our emerging industry, with several blockchain infrastructures and cryptocurrency mining companies having listed and raised significant capital over the last twelve months.”
The preliminary prospectus submitted to the Ontario Securities Commission includes the company’s historical financial statements,
Bitfarms pivot to blockchain and merged with Canadian cryptocurrency mining firm Backbone Hosting Solutions Inc. in July 2017. The announcement of the merger, which came on the heels of bitcoin’s incredible run last year, had sent the company’s stock price through the roof, so much that the Israel Securities Authority had to wade in.
The market has been inundated with IPO news from mining firms of late. Just last week, Chinese-based Canaan was rumored to be having second thoughts about its plan to list shares on the Stock Exchange of Hong Kong (HKEX). This is all speculation but the reports point towards the local regulators raising eyebrows regarding the bitcoin mining firm’s business model.
While the industry is still waiting for Bitmain’s planned IPO, Amsterdam-based Bitfury has intensified its efforts as it seeks to float the first cryptocurrency IPO in Europe.
The market cap of the world’s leading cryptocurrency has established its new yearly bottom.
Bitcoin on Monday continued its downtrend, and its valuation dropped to a new bearish low at $92.53 billion. At the same time, the price of the digital currency fell to an average of $5,322, according to aggregate data available at CoinMarketCap.com. Overall, the bearish action intensified the possibility of Bitcoin establishing a double bottom anytime this year.
As reported on CCN last week, the forking of Bitcoin Cash has turned out to be the main catalyst behind the market-wide downtrend. Bitcoin is an asset that is more stuck inside unwelcomed negativity, especially when the chief of a big mining company decided to reallocate their Bitcoin hash power to support Bitcoin ABC, one of the Bitcoin Cash blockchain splits. While the trend should live for short, it has left a big dent on the face of the entire crypto market, which now appears more unstable to potential investors than ever.
Analysts now forecast an extended downside run for Bitcoin. Leading crypto pundits Willy Woo and Crypto Rand believe that the digital currency could drop further towards the $4,500-5000 range. The prediction via Bitcoin NVT ratio, which divides the digital currency’s market cap by its average daily volume, is also bearish. It plays into a narrative of bitcoin doubling down its value in the near-term future.
A different analysis by Bitcoin bull Tom Lee predicts Bitcoin to reach $15,000 by the end of this year, calling the aftereffects Bitcoin Cash forking short-term. However, Fundstrat founder has deviated away from its $25,000 prediction made earlier this year, indicating that it is going to change every time in the face of new fundamentals.
The latest price action does not surprise CCN’s technical outlook. It had predicted that Bitcoin price would attempt to retest its previous low – or the lower trendline of the current falling wedge formation at most. There is a strong likelihood that bulls will try a strong upside correction, giving adequate long opportunities towards the level mentioned via the Fibonacci retracement graph in the chart below.
A further breakdown from here could bring the Bitcoin market towards the bearish targets of prominent analysts – as mentioned above. Therefore, $5,000 serves as a potential primary downside target should the price breaks below the lower trendline of the falling wedge formation.
As the dust begins to settle from last week’s Bitcoin Cash hard fork, crypto exchanges are now signaling which version will receive the “BCH” ticker symbol, as well as to what extent and on what terms they will support the other blockchain.
US crypto exchange Kraken, like the majority of other BCH trading platforms, has elected to list Bitcoin ABC’s BCH implementation under the “bitcoin cash” label while also opening trading markets for Bitcoin SV (BSV) — the chain launched by Craig Wright and Calvin Ayre through their respective crypto companies, nChain and CoinGeek.
However, Kraken included a lengthy disclaimer in the announcement, stating that BSV is “extremely high risk” and does not meet the exchange’s usual listing requirements.
“WARNING: Bitcoin SV does NOT meet Kraken’s usual listing requirements. It should be seen as an extremely high-risk investment. There are many red flags that traders should be aware of,” the post read, before listing a litany of reasons why investors should only purchase BSV with eyes wide open:
No known wallets supporting replay protection (be careful!)
No support in major block explorers
Miners apparently subsidized or operating at a loss
Representatives threatening and openly hostile toward other chains
Chain’s survival may be mutually exclusive with other chains
Supply is temporarily constrained because of limited wallet support
Some large holders have indicated they’d be dumping everything ASAP
Kraken has done only very minimal code review
Further still, the San Francisco-based crypto exchange noted that BSV partisans have threatened to attack BSV holders who use or otherwise provide support for the other chain. If that happens, the post warned, the exchange would “socialize” losses among all BSV holder on Kraken, which is particularly noteworthy since users cannot currently withdraw BSV into user-controlled wallets.
“Custodial losses taken on due to attacks originating from nChain or its affiliates will be socialized among all BSV holders on Kraken. Given the volatile state of the network and threats that have been made, Kraken cannot guarantee perfect custody of BSV.”
As of the time of writing, bitcoin cash (whether listed under BCH or an “IOU” symbol such as BCHABC) was trading at a 165 percent premium to BSV, while the latter’s markets had been more heavily traded.