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Russia Postpones Its Crypto Law Again, Now Blaming Coronavirus

After facing multiple delays, the adoption of Russia’s major cryptocurrency law will be postponed again, now due to the coronavirus.

Anatoly Aksakov, chairman of the Russian State Duma Committee on Financial Markets, says that the country’s crypto law — the bill “On Digital Financial Assets” — is now finalized but won’t be adopted before the end of the spring 2020.

Russian authorities have been arguing about crypto regulation since January 2018

According to a March 31 report by Russian news agency RBC, Aksakov has admitted that previous delays in the bill’s adoption were caused by disagreement on the new asset type between local authorities. Aksakov, who is also chairman of National Banking Council at Russia’s central bank, reportedly elaborated that the central bank opposed legalization of crypto while the State Duma advocated some crypto initiatives.

However, the long-awaited law is being postponed for another reason now. As Russia shifts its focus to priority actions against the COVID-19 pandemic, all legislative processes have slowed down, Aksakov reportedly noted. As reported by Cointelegraph, the bill has seen a number of delays after first being introduced in January 2018.

Aksakov says that Russia’s crypto law will not hinder operation of local crypto exchanges

Aksakov reportedly added that Russia’s upcoming crypto law will provide a definition of cryptocurrencies and prohibit the use of crypto as payment. Additionally, the law will include the issuance and circulation of digital assets, the official reportedly noted. However, in mid-March, a legal executive at Russia’s central bank said that the bill would ban the issuance and circulation of cryptocurrencies.

Aksakov also emphasized that the new law won’t hinder operation of crypto exchanges in case they won’t be violating it. The official also highlighted that the bill “On Digital Financial Assets” won’t include regulations regarding cryptocurrency mining. However, Aksakov expressed confidence that profits from crypto mining should be taxed, noting that crypto mining is a “type of business that produces value.”

Aksakov’s latest remarks about the new delay in adopting Russia’s upcoming crypto law comes subsequent to Russia recording its biggest one-day rise in coronavirus cases for the sixth day in a row. As reported by Reuters, Moscow’s authorities have already ordered residents to self-isolate, while the nationwide lockdown is being considered.

On March 24, the Ministry of Economic Development of the Russian Federation reportedly released a draft law that would allow the testing of cryptocurrency and blockchain developments within a special regulatory sandbox.

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Brazilian Crypto Exchange XDEX Announces Full Closure

Brazilian crypto exchange XDEX, which is owned by the largest stock broker in Latin America, announced the end of its activities. The company announced its closure on March 31:

“Today, we announce that XDEX is starting the process of closing its activities. Market projection, competition and few regulatory advances reduced the opportunities found at the beginning of the project and were the basis for this difficult decision.”

Take some time

The company offered non-custodial exposure to cryptocurrencies, so customers have up to 30 days from the day of the announcement to close their positions and fully withdraw their balance in reais on the platform. “When making the withdrawal request, the funds will be sent to the bank account registered at XDEX within 1 business day, according to bank records,” the announcement said, adding:

“After the 30-day period, if the customer has not sold the assets, we will do it on their behalf and the amount obtained from the sale will be deposited in the bank account registered with XDEX within 3 business days.”

Failed to take hold

Launched in 2018, XDEX attempted to capitalize on the possible entry of Brazilian institutional investors into crypto, since the platform was owned by the partners of XP Investimentos. One of the largest brokers in Latin America, XP Investimentos manages billions in investments.

This is the fourth company focused on Bitcoin trading that closes its activities in Brazil. Before it, Brazilian companies, OmniTrade, Latoex and Acesso Bitcoin also announced the end of their activities. At the end of last year another Brazilian Bitcoin company called Bitjá revealed its closure.

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French Soccer Star Claims Crypto Scam Impersonated Him

French international soccer striker Kylian Mbappé filed a complaint on March 31 for the unauthorized use of his name on a cryptocurrency scam network, which is being investigated by local authorities.

According to the newspaper L’Équipe, the soccer player, who plays for Paris Saint-Germain, is being impersonated to use his name in advertising campaigns for the alleged scam that involves a cryptocurrency acquisition scheme.

These advertising posts cited false statements by Mbappé, where he allegedly claimed that the formula offered by the network was miraculous and that people could become a millionaire in two or three months.

Fake advertising articles impersonating Mbappé

The crypto scam article that started to circulating was titled “The latest Kylian Mbappé investment that put pressure on experts and scared big banks.”

Anne-Sophie Coulbois, head of the Central Office for the Suppression of Financial Crime with the French Judicial Police, stated the following to local newspapers regarding the modus operandi of this type of scams:

“These pages are used to impersonate future victims, save your contact details, then an alleged vendor calls them to explain the procedure for investing, but there is never a product that is invested in.”

Mbappé’s Twitter account hacked in 2019 by a crypto-related scam

It is not the first time that the French star is affected by alleged crypto scams that use his name without permission.

Cointelegraph Brazil reported last April, that Mbappé’s official Twitter account had been hacked with tweets where he encouraged his followers to make investments in crypto scams.

The Financial Markets Authority of France said that in 2018 they received nearly 1,100 complaints about this type of scam, which ended up stealing 55.5 million euros.

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Unofficial Iranian Telegram Applications Leak Data of 42M Users

While Telegram isn’t giving up its ongoing legal battle with United States regulators to launch its TON blockchain project, some online perpetrators are taking advantage of the messenger’s popularity to expose millions of user records of third-party versions of Telegram app.

Per an investigation by cybersecurity firm Comparitech and security researcher Bob Diachenko, at least 42 million Iranian “Telegram” usernames and phone numbers were leaked via unofficial Iranian-made versions of Telegram, while real Telegram is banned in the country.

42 million Iranians that are willing to use the banned messenger got their data exposed

According to a March 30 report compiled by Comparitech, those records were publicly exposed online on the web without any authentication required to access it. The data was reportedly exposed on distributed search engine Elasticsearch for about 11 days until it was removed after Diachenko filed an abuse report.

Diachenko elaborated to Cointelegraph that the number of leaked records purportedly corresponds to the number of “Telegram” users affected. He said:

“42 million is the number of the records in the database which, we assume, are unique and correspond to the affected persons number.”

The reported data breach definitely poses significant risks like SIM swapping and phishing attacks as well as other scams using the phone numbers in the database. Moreover, the leakage reveals data of as many as 42 million Iranian people who were trying to still use Telegram despite the application being banned in the country since 2018.

Telegram blames Iranian people for using unofficial Telegram apps despite multiple warnings

The exposure wouldn’t have been possible without people using unofficial versions Telegram messenger, a Telegram spokesperson reportedly told Comparitech. Telegram emphasized that the leaked data came from unofficial Telegram applications or so-called “forks” of Telegram that are not affiliated with the official company. This became possible because Telegram is an open-source application that allows third parties to create their own versions of it.

Telegram reportedly said:

“We can confirm that the data seems to have originated from third-party forks extracting user contacts. Unfortunately, despite our warnings, people in Iran are still using unverified apps. Telegram apps are open source, so it’s important to use our official apps that support verifiable builds.”

As reported by local publications, Iranians created a number of “fork” Telegram apps like Telegram Talaeii and Hotgram in response to the messenger’s ban in the country. According to estimations, Talaeii and Hotgram amassed about 30 million users as of December 2018. According to BBC, real Telegram messenger was estimated to have about 50 million users in Iran as of 2018 before it was banned in the country.

While the latest data breach doesn’t involve the official Telegram company directly, the actual messenger suffered a major hack in Iran back in 2016. According to reports, Iranian hackers were able to compromise more than a dozen accounts to identify phone numbers of 15 million Telegram users in Iran despite the messenger’s focus on user privacy and security.

In mid-March 2020, Cointelegraph reported on Chinese social media giant Weibo experiencing a massive data breach that reportedly led to 172 million users having their account information leaked.

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DeFi Cannibalizes Ethereum Block Space

Data published by Ganesh Swami, the co-founder of Ethereum (ETH) analysis firm, Covalent, indicates that decentralized finance, or DeFi, transactions are representing an increasing share of Ethereum block space at the expense of ETH transfers.

Swami analyzed the gas costs incurred by Ethereum transactions over time in order to estimate the share of network activity represented by ETH transfers, simple ERC-20 transactions, and the complex interactions with smart contracts usually associated withDeFI protocols — as each transactional category incurring progressively larger gas fees.

DeFi transactions ‘cannibalize’ Ethereum block space

Swami identifies what “seems to be a natural ceiling to the total gas consumed across all types of transactions,” indicating “the intense demand for block space of Ethereum” and the network’s “lack of scalability,” adding:

“In an ideal scalable world, all types of transactions have room to grow. But on Ethereum today, for one kind of transaction to grow, it has to cannibalize the others.”

When looking at the relative proportion of transactions represented by each of the three categories, the data shows a steady increase in the number of complex transactions at the expense of ETH and ERC-20 transfers — with complex transfers growing from roughly 5% of network activity at the start of 2017 to hover between 20% and 30% in recent months.

Relative share of gas fees for each transactional category on Ethereum: Covalent

The graph also illustrates the rise and fall of initial coin offerings, with ERC-20 transfer accounting for 20% of network activity during early 2017. ERC-20 transactions would hover between 10% and 15% throughout the rest of 2017, before sliding as low as 5% by mid-2018.

After a short bounce back up to 10% during the later months of 2018, ERC-20 transactions have consistently fallen — with ERC-20 transfers currently representing less than 5% of Ethereum network activity.

Covalent predicts upcoming ‘flippening’ within Ethereum

Swami predicts that complex transactions will continue to represent a growing percentage of network activity as an increasing number of decentralized organizations (DAOs), games, and other applications for non-fungible tokens (NFTs) launch on Ethereum.

As such, the analyst expects the trend will soon drive a ‘flippening’ in which complex transactions overtake ETH transfers.

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Institution-Focused Crypto Trading Platform Reports 737% Revenue Increase in 2019

Hong Kong Stock Exchange-listed BC Group, the operator of institution-focused digital assets trading platform OSL, reported a 737% increase in revenue in 2019.

On March 31, BC Group revealed that its OSL digital assets platform had been its largest 2019 earner, accounting for 44% of the Group’s revenues — up from just 6% in 2018.

The OSL digital assets platform offers institutions services that include over-the-counter brokerage, Software-as-a-Service tools, custodial services and institutional digital asset exchange.

Regulatory progress

Total year-on-year revenue for BC Group in 2019 was RMB72 million ($10 million) — up 737% from the previous year, as noted above.

This increase in revenue was accompanied by OSL’s submission of an application for licenses to conduct regulated activities under the Hong Kong Securities and Futures Commission’s new regulatory framework for digital asset trading platforms.

Submitted in November 2019, the license application is judged by the firm to be a milestone in its digital assets business development, with BC Group CFO Steve Zhang stating:

“We view the introduction of licensing for digital assets in Hong Kong in 2020 as an inflection point. This will galvanise institutional participation in the digital asset space and accelerate growth of BC Group and our OSL digital asset platform business as traditional securities continue to digitize.”

Noting that the digital asset securities market is forecast to grow by over 5,000% to $11 trillion by 2024, BC Group says it has focused its energies on strengthening management and rebranding is digital assets products and services.

Strategies include opening a new OSL office in Singapore in July 2019, intensifying SaaS sales efforts to major institutions, and issuing a $36 million share placement in January 2020 to fund continued expansion.

Despite the turmoil in world markets amid the COVID-19 pandemic, the firm does not believe this will impede the transition of financial services towards digital assets.

In February, Cointelegraph reported that Fidelity International had acquired a stake in BC Group, purchasing 17 million shares for a 5.6% ownership position.

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Bitcoin Starts Strongest Quarter Q2 With Price Down Just 10% YTD

Bitcoin (BTC) has in total suffered just 10% from the coronavirus outbreak which obliterated stocks and caused the United States to print $6 trillion.

That was according to the latest quarterly price data from monitoring resource Skew.com on March 31, which showed that for Q1 2020, BTC/USD is only down by around 10.7%.

Bitcoin streets ahead of macro assets in 2020

At press time, the pair remained higher after seeking new support at $6,500 on Monday.

At those levels, the pair is just $700 lower than its position at the start of 2020, and $3,800 beneath its current year-to-date all-time high of around $10,300.

Bitcoin has advanced 75% in the two weeks since hitting its quarterly low — in a volatile period, that recovery at one point reached 90% as markets peaked at over $7,000 on some exchanges.

Bitcoin versus U.S. 10-year bond yields, 1-year chart. Source: Skew

As such, Bitcoin now looks increasingly resilient as an investment option versus traditional markets, which are still trailing much more as a result of coronavirus.

That was despite intervention by central banks on a scale never before seen in history — as Cointelegraph noted, the U.S. money printing exercise alone recreated the country’s entire GDP of 1990 and added it to the dollar supply.

Indicator flashes green as lucrative Q2 looms

Statistically, Q2 in a given year tends to be the most profitable for Bitcoin holders. Since 2013, just one Q2 has delivered negative returns, Skew reveals, with average gains totaling 65%.

Bitcoin quarterly returns since 2014. Source: Skew

Signs of potential are becoming visible on some indicators. As Bloomberg reported on Tuesday, the GTI Vera Convergence Divergence Indicator is giving the Bloomberg Galaxy Crypto Index its first “buy” signal in three months.

The mood among analysts is also turning more optimistic. In his latest forecast on Monday, veteran trader Tone Vays said that he no longer expected BTC/USD to find new lows of less than $3,700.

Earlier in March, he had warned that Bitcoin could plunge to as low as $2,800. Even if this were still to happen, he added, it would not pose a threat as long it was before May’s block reward halving event.

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Cardano Releases Solution that Scales More Than Visa’s Payment Network

On March 25, Cardano launched its off-chain scalability protocol, Ouroboros Hydra, after 5 years of development.

An announcement sent to Cointelegraph claims that the protocol vastly increased scalability and low latency for the Cardano blockchain while using little storage on the network’s nodes. The solution also reportedly allows for applications such as micropayments, voting, insurance contracts, and other uses that require low fees or instant transactions.

According to a spokesperson of IOHK — the firm behind Cardano — Hydra is the result of a five-year European Union-funded collaborative research project, and could theoretically scale to a million transactions per second. Such a throughput is — according to him — in excess of the current generation of global payment systems.

In Hydra, each user who connects to the network generates 10 heads, which are throughput lanes for data and transactions. Because of that, the system reportedly gets faster and decreases its latency as it scales.

More scalable than Visa

Simulations made by the University of Edinburgh show that each Hydra head can handle around 1,000 transactions per second, but according to the announcement, the process can be further optimized. The announcement reads:

“With 1000 heads the network could theoretically scale to a million transactions per second – comfortably in excess of current global payment systems such as VISA.”

Furthermore, according to the announcement, Hydra approaches the theoretical maximum amount of transactions possible within the limitations of network speed, geographical distance, and the number of participants. The paper reads:

“Essentially, the bottleneck becomes the network connection between the participants, not the protocol.”

The IOHK spokesperson did not answer Cointelegraph’s inquiry by press time.

Scalability is blockchain’s holy grail

Director of Edinburgh University’s Blockchain Laboratory, Aggelos Kiayias, commented on the development:

“Solving the scalability question is the holy grail for the whole blockchain space. The time has come to apply a principled, evidence-based approach in designing and engineering blockchain scalability solutions and this research is a decisive step in this direction.”

Recent evidence suggests that the Ethereum Foundation gave up on its second-layer solution, Plasma, without announcing it.

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BMW’s Blockchain Solution for Supply Chains to Roll Out in 2020

World-famous car manufacturer BMW Group plans to roll out its blockchain supply chain solution to 10 suppliers this year.

Dubbed “PartChain,” the platform has already been successfully tested by BMW in 2019, an official announcement on March 31 revealed.

In its early version, PartChain is designed to ensure traceability and immediate data transparency for automobile components across complex supply chains that engage multiple international parties.

The 2019 pilot implemented the solution for purchasing and tracking front lights, with the involvement of two of BMW Group’s total 31 plants, as well as three locations of the supplier Automotive Lighting.

Andreas Wendt — a member of BMW AG’s Board of Management, who is responsible for the Group’s purchasing and supplier network — said that BMW now wants to expand the project to “a large number” of other suppliers, with 10 selected for 2020.

Combining blockchain with cloud technology

In the long-term, Wendt said that BMW’s vision is to use blockchain to create “an open platform that will allow data within supply chains to be exchanged and shared safely and anonymized across the industry.”

Whereas the pilot had been limited to component tracking, BMW sees the platform’s future applications extending to tracing critical raw materials for manufacturing “from mine to smelter.”

Together with blockchain — which provides for tamper-proof, verifiable data collection and transaction — PartChain uses cloud technologies from Amazon Web Services and Microsoft Azure.

Intra-industry development

Wendt revealed that BMW now intends to share the PartChain solution with other members of the Mobility Open Blockchain Initiative (MOBI), which BMW co-founded back in 2018.

As Cointelegraph reported at the time, MOBI is the result of a collaboration between BMW, GM, Ford and Renault — as well as high-profile blockchain, tech and engineering firms including Bosch, Hyperledger, IBM and IOTA.

The project has led to the creation of the MOBI Vehicle Identity Standard, which aims to establish a blockchain-based database for Vehicle Identity Numbers. This supports unique digital certificates for information such as vehicle identity, ownership, warranties and current mileage, which can be securely stored in an electronic wallet.

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Bitmain’s Antminer E3 to Continue Mining Ether With New Update

While some cryptocurrency miners are purportedly shutting down due to unprofitability, Chinese mining giant Bitmain continues to not only see its new products sold out but is also improving some of its older flagship devices.

Bitmain’s Antminer E3, a popular ASIC miner was suspected to become obsolete by April 2020, will continue mining Ether (ETH) at least till October 2020.

Bitmain previously confirmed that Antminer E3 would stop mining Ether

According to a March 30 blog post, Antminer E3’s lifespan is prolonged with specifically designed firmware launched by Bitmain. According to the announcement, the new firmware was developed to allow miners to continue using Antminer E3 “even after March 2020.”

Specifically, Antminer E3’s new firmware addresses a problem with directed acyclic graph (DAG) files, which was first reported by altcoin mining pool 2Miners in February 2020. According to 2Miners, DAG growth was the primary reason for limiting the capability of Antminer E3s for mining Ether and Ethereum Classic (ETC) due to limited memory capacity.

While Bitmain subsequently confirmed the DAG growth problem, stating that its double date rate (DDR) memory was approaching the limit of 4GB, 2Miners calculated that Antminer E3 would stop Ether mining roughly on April 8, 2020.

Bitmain’s firmware addresses DAG growth issue directly

However, Antminer E3’s lifespan has now been extended with the new firmware that addresses the DAG problem directly. According to Bitmain, the new firmware will expand the usage of DDR memory, as more space is needed to process DAG files.

With the new firmware update, the final approximate block height of the Antminer E3 is 11,400,000, the blog post says. While Bitmain is confident that E3 miners will continue being operable after April 2020, the miner will still support mining until October 2020, according to the firm’s calculations. Bitmain had not responded to Cointelegraph’s requests for comment.

Released by Bitmain in April 2018, Antminer E3 was touted as the “world’s most powerful and efficient EtHash ASIC miner.” As reported by Cointelegraph, Ethash is the Proof-of-Work (PoW) hashing algorithm used by Ethereum and a variety of other altcoins such as ETC. Meanwhile, the Ethereum network is poised to gradually shift from PoW to Proof-of-Stake consensus.

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Singapore Crypto Exchange Eyes US Expansion After Registering With FinCEN

While global cryptocurrency firms increasingly come to Singapore to benefit from its crypto-friendly ecosystem, some local firms are also expanding their operations beyond local jurisdiction.

Bitget, a Singapore-headquartered digital asset platform, has obtained regulatory approval from the United States Financial Crimes Enforcement Network (FinCEN), the primary regulator for money service businesses in the country.

MSB license is part of Bitget’s strategy to be compliant in “as many regions as possible”

According to public records, the FinCEN granted Bitget a Money Service Business License (MSB), authorizing the Singaporean company to act as a money transmitter or foreign exchange dealer in the U.S. with its office in Denver, Colorado. By acquiring the MSB license, Bitget joins major global crypto players like U.S. crypto wallet and exchange service Coinbase and Huobi exchange.

A Bitget spokesperson told Cointelegraph that the MSB is the company’s first step in entering the U.S. market. The exchange plans to apply with other U.S. regulators. The representative added that the MSB registration is part of Bitget’s global compliance strategy, as the firm is willing to be compliant in “as many regions as possible.”

Bitget says daily trading volume adds up to $1 billion

Founded in 2018 in Singapore, Bitget exchange currently has regional offices in Japan and South Korea, with its platform also maintaining operations in other locations like China and Russia.

While Bitget isn’t listed on popular trading volume trackers like Coin360 or CoinMarketCap to date, the Bitget spokesperson said that Bitget’s daily trading volume accounts for $1 billion so far, which would make it one of the largest exchanges in terms of trading volume.

The spokesperson attributed Bitget’s absence from these volume trackers to their limited exposure to an English-speaking audience. Bitget’s three top markets are China, South Korea and Singapore. Bitget’s push into the U.S. market is part of its wider plan to enter English-speaking countries in Europe as well as Canada and India in 2020, the spokesperson said.

Bitget is among firms exempted from the Payment Services Act till July 2020

While Bitget has ambitious global compliance strategy plans, the exchange is compliant with authorities in its home jurisdiction. On March 24, the Monetary Authority of Singapore (MAS) listed Bitget among companies that are allowed to operate in the country without holding a license under the Payment Services Act (PSA), adopted in January 2020. Specifically, Bitget is allowed to provide digital token service till July 2020 alongside companies like Ripple, Coinbase and Binance, according to the MAS’s statement.

Bitget’s representative noted that the platform is currently in the process of the PSA license application, targeting June or July 2020 to receive the license.

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Tokyo District Court Extends Mt. Gox Rehabilitation Plan Deadline

The trustee of now-defunct Japanese cryptocurrency exchange Mt. Gox has extended the deadline for the submission of rehabilitation plans.

According to an official announcement published on the company’s website on March 30, Mt. Gox Rehabilitation Trustee Nobuaki Kobayashi filed a motion with the Tokyo District Court to extend the submission deadline of a rehabilitation plan. On March 27, the court released an order to extend the deadline to July 1, 2020.

Kobayashi was granted a similar extension in April 2019, which pushed the deadline at that time to October.

Deadline moved due to ‘matters that require closer examination’

Once a rehabilitation plan is submitted, former Mt. Gox crypto and fiat currency holders may be able to receive some of their funds back. However, the wording of the announcement is vague, citing “matters that require closer examination with regard to the rehabilitation plan” as the reason for the delay.

The fall of crypto exchange Mt. Gox

As Cointelegraph has reported, the 2011 Mt. Gox hack and subsequent collapse in early 2014 affected nearly 24,000 creditors, mainly those holding cryptocurrency. These events resulted in the loss of 850,000 BTC, approximately $460 million at the time and $5.5 billion as of this writing.

Japanese courts approved a petition for the exchange to begin civil rehabilitation in June 2018. Koyabashi finally released a draft of this rehabilitation plan on March 24, 2020.

Under the proposed draft, former Mt. Gox users who held BTC, Bitcoin Cash (BCH), fiat currency, and other cryptocurrencies on the platform will have their claims honored. Funds will be allocated toward the rehabilitation proceedings first, with creditors receiving funds thereafter.

Other factors at play in the court’s decision?

The Tokyo District Court’s decision came the day before a “soft lockdown” was implemented in the capital city by Mayor Yuriko Koike for March 28-29. Though there has been speculation that Tokyo or all of Japan will begin to enforce more stringent measures to prevent the spread of COVID-19, nothing has been announced as of this writing.

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One in Four Trading Firms Have Adopted Crypto in Some Way

A report produced by derivatives analysis firm, Acuiti, has revealed a growing interest in listing crypto assets among institutions, despite lingering compliance concerns. The report was compiled in partnership with exchanges, Bitstamp, and the Chicago Mercantile Exchange (CME).

The study surveyed 86 “senior executives from the buy-side, sell-side, and proprietary trading groups specialized in traditional derivatives trading, clearing and execution.”

The report also supplemented its findings by surveying trading firms which specialize in cryptocurrencies.

26% of trading firms have adopted crypto assets in some form

The report found that 17% of traditional trading firms have already adopted crypto assets — with adoption defined as “trading or enabling the trading and clearing of at least one digital asset spot or derivatives instrument.”

Looking at all trade service providers, the study found that one-in-four respondents support crypto assets. In all markets surveyed, client demand for digital assets was found to far outstrip the willingness of trading firms to list cryptocurrencies.

Sell-side firms providing digital asset services are limited to supporting either CME or Bakkt’s derivatives — with CME seeing twice the adoption of Bakkt.

Crypto assets are ‘on the cusp’ of significant mainstream adoption

The report found that 45% of the firms that do not currently support crypto assets are planning on revisiting the idea within the next 6 months.

Further, 97% of firms indicated a willingness to reconsider their decision within two years.

Asian digital asset adoption significantly outpaces North America

The study notes much higher rates of adoption from trading firms based in the Asia-Pacific regions — where adoption rates are 57%. North American firms were found to have the largest differential between demand and adoption — where only half of the demand for digital assets is met.

Will Mitting, the managing director of Acuiti, stated that the firm identified “a growing split between demand from traditional trading firms to broaden their coverage of digital assets and the willingness or ability of sell-side firms to provide access.”

The majority of firms that have adopted crypto did so within the last 12 months.

Institutions identify security and custody as major crypto risks

The survey asked all respondents to cite the three greatest risks that they associate with listing digital assets.

Across the board, general security concerns and fears of getting hacked were cited among the chief risks identified. Traditional trading firms also emphasized unease regarding the custody solutions available for storing crypto assets.

Both traditional firms and crypto exchanges identify market-making opportunities

The report found that market-making was the common strategy employed by both crypto asset exchanges and traditional trading firms.

Unlike institutions, crypto exchanges were found to also devote significant resources into over-the-counter trading.

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Binance Academy Launches Blockchain Accelerator in China

Binance Academy, the educational arm of leading crypto exchange Binance, announced the establishment of a blockchain research institute in Shanghai on March 30.

The Lingang Blockchain Technology and Industry Research Institute is intended to operate as a think-tank and talent hub for distributed ledger technology (DLT) innovation in China.

Binance to integrate blockchain with other innovative technologies

To accelerate the application of DLT in China, Binance’s blockchain institute plans to integrate blockchain with other emerging technologies with an established foothold in the country — including artificial intelligence, big data, and internet-of-things.

The blockchain research institute is headed by Don Tapscott, who will also act as the honorary dean of the organization.

Tapscott describes DLT as representing “the second era of the Internet — the Internet of Value,” adding that blockchain technologies will drive the creation of “innovative and productive organizations.”

Binance’s Helen Hai, who is credited with spearheading the Lingang initiative, stated that the institute is “committed to building the blockchain industry, driving blockchain research, and cultivating top blockchain talent.”

Binance takes steps toward re-establishing in China

The institute’s launch comprises a tentative step toward the Binance re-entering China, with the exchange having shut down all Chinese operations in September 2017 amid China’s cryptocurrency crackdown.

In January, Binance Charity committed to purchasing $1.4 million in medical supplies that would be donated to more than 300 hospitals and medical organizations hardest hit by the COVID-19 pandemic.

In November 2019, rumors that Binance was seeking to establish an office ran rampantly across the crypto community — comprising the first indication that Binance may be seeking to re-establish itself in China after more than two years.

One month prior, Binance launched peer-to-peer trading services for Chinese Yuan pairings against Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).

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China’s Oldest Exchange OKCoin Readies for Move Into Japan

OKCoin, one of the oldest exchanges in China, is continuing its crypto exchange business expansion, announcing on March 30 that it has officially secured licensing in Japan.

OKCoin has been anticipating this day

Per its announcement, OKCoin Japan has completed its registration with the Kanto Local Finance Bureau. According to the firm, this makes OKCoin the first international exchange to obtain a cryptocurrency exchange license through the official application procedure in Japan.

OKCoin Japan said that ever since its establishment in September in 2017, it has been preparing itself to be in a position to achieve a business framework that can comply with Japanese law. OKCoin marketing manager added that:

“OKCoin wants to get recognition from the Japanese authority in terms of their own technologies, products, teams, compliance & regulation system and internal management system, etc., in this way, they finally get approved by the license.”

OKCoin has been expanding its global presence since 2013

OKCoin is now officially headquartered in San Francisco and has a number of offices worldwide including Malta.

OK Group has expanded its business bases in China, the United States, Europe, Malaysia and the Philippines since its establishment in 2013. With the expansion in Japan, the blockchain company is set to employ over 1,000 globally, OKCoin says.

Before OKCoin Japan’s exchange officially launches, users can now pre-register by visiting the firm’s main site to create an account. It will support the Japanese Yen and deal with major crypto assets, including BTC, ETH, ETC, LTC, and BCH.

As Cointelegraph reported previously, OKCoin added support for the Singaporean dollar earlier this month. It is the third fiat currency supported by OKCoin after the United States dollar and euro.

The post China’s Oldest Exchange OKCoin Readies for Move Into Japan appeared first on Coin First.

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Bitcoin Scams Continue to Exploit Covid-19 Chaos in UK

Following a warning from the national watchdog earlier this month, regional authorities across the United Kingdom say Bitcoin scammers are using the coronavirus crisis to hoax citizens.

In a series of consumer fraud alerts published throughout March, Manchester city council and the counties of Pembrokeshire and Norfolk echoed the Financial Conduct Authority (FCA)’s caution against “sophisticated” and “opportunistic” cryptocurrency-related schemes operating during the pandemic.

Misrepresentations

The three regional authorities identify a range of tactics adopted by Bitcoin (BTC) scams to take advantage of the social disorientation and anxiety amid the public health crisis. Manchester city council warns against:

“Fraudsters purporting to be from a research group that mimic the Centre for Disease Control and Prevention (CDC) and World Health Organisation (WHO). They claim to provide the victim with a list of active infections in their area but to access this information the victim needs to either: click on a link which redirects them to a credential-stealing page; or make a donation of support in the form of a payment into a Bitcoin account.”

Similar schemes claiming to offer up-to-date infection tracking data and soliciting payments in Bitcoin are identified on all three regional government sites.

Meanwhile, the FCA has emphasized that high-return investment opportunities, including investments in crypto assets, may be repurposed to take advantage of the current pandemic.

Pandemic opportunism

As previously reported, crypto-related scams have been operating on both sides of the Atlantic during the COVID-19 outbreak.

In mid-March, the United States Commodity Futures Trading Commission highlighted that fraudsters may be exploiting the crisis in order to add credibility to their scam schemes or manipulate emotions.

Misrepresentations of the WHO and fraudulent appeals for donations in cryptocurrency — as well as new ransomware called “CovidLock” — have also been identified by cybersecurity researchers.

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Fake Trading Volumes and the Price of Bitcoin: Are They Connected?

Last year, Bitwise Asset Management reported to the United States Securities and Exchange Commission that 95% of trading volume in Bitcoin (BTC) was fake. Bitwise found that, according to data published by CoinMarketCap — a widely cited tracker of crypto statistics — Bitcoin’s approximate average daily volume in April 2019 was $10 billion. In comparison, just $5.5 billion worth of Apple stock — the most liquid stock in the world — trades daily, and the market cap of Apple stock is nine times the size of Bitcoin’s.

Related: Data Transparency and Fake Trading Volumes — Institutionalizing Crypto

The Blockchain Transparency Institute has been investigating fake volume in crypto markets since 2018. Its April 2019 report suggested that 17 of the 25 largest exchanges listed on CoinMarketCap had more than 99% fake volume. The most recent report from September 2019 showed “wash trading rates at high levels from 96.9% up to 99.7%.”

As recently as 2019, the exchanges reporting the most volume were in some cases unheard of. According to Bitwise’s research, the largest reported exchange from April 2019, FCoin, declared $1.7 billion in daily trading volume, despite at the time having just 4,781 followers on Twitter. It had been mentioned only four times on Bloomberg, all in the context of fake trading volume, and the marketing tool Alexa ranked it as having the 56,539th largest website globally.

The Bitwise study ranked Binance as the largest exchange with real volume, though it ranked 15th overall when those reporting fake volumes were included. During April 2019, Binance reported $218 million in daily trading volume — 1/7th that of FCoin — despite being mentioned 6,830 times by Bloomberg, its CEO being followed by 342,000 people on Twitter, and having a website that ranked 971th in the world, according to Alexa.

The Bitcoin market is steadily maturing, to be sure, and today’s Bitcoin market is not like it was in the past. Many first-generation pillars of the Bitcoin ecosystem were started by first-time entrepreneurs who were simply interested in Bitcoin. Mt. Gox, the beleaguered, Japan-based Bitcoin exchange, was once a site for trading Magic: The Gathering cards. CoinMarketCap, the most popular data aggregator in the space, was started in 2013 as a part-time project run out of an apartment.

Related: Mt. Gox Casts a Dark Shadow of Crypto’s Collapse — A Long Fight for Justice

Today, the best-known crypto exchanges are large enterprises operating in a maturing ecosystem. Regulated Bitcoin futures, the development of institutional short lending, large algorithmic market makers, Bitcoin custody and custodial insurance have added to the efficiency of the market. Despite Bitcoin’s faked volume, and a spot market smaller than commonly thought, its price is more accurately determined every day.

Bitcoin spot prices, as well as other larger-cap cryptocurrencies, are considered accurate, thanks to an established global market for Bitcoin trading and the prevalence of exchanges around the world. What’s more, traditional data aggregators — think Nasdaq, the Intercontinental Exchange, Bloomberg and Thomson Reuters — are entering the industry, which will give us only a clearer picture of the data that affects Bitcoin trading.

Internet attention and the price of Bitcoin

Researchers from the University of Cagliari in Italy used Google Trends, which illustrates how frequently a fixed term is looked up, to study the interplay between Bitcoin and Google’s search engine. They specifically researched the relationship between Bitcoin’s trading volumes and the volume of Bitcoin-related search queries made using Google.

In a report titled “The Predictor Impact of Web Search Media on Bitcoin Trading Volumes,” the researchers found “significant cross correlation values, demonstrating search volumes power to anticipate trading volumes of Bitcoin currency.”

The researchers studied the period between June 2014 and July 2015 and compared Bitcoin trading behavior with data on search queries obtained from Google Trends. The report concluded:

“We can afﬁrm that Google Trends is a good predictor, because of its high cross correlation value. Our results conﬁrm those found in previous works, based on a different corpus and referred to a different Bitcoin market trend. As future advancement, we are thinking about the possibility to apply this kind of approach to different contexts in order to better understand the predictive power of web search media. An other likelihood could be to consider not only search media but also social media like Twitter, Facebook and Google+.”

As trading both digital assets and more traditional stocks and commodities become progressively digitized, online mentions will likely play a key role in determining and predicting the sentiment of various markets, not just cryptocurrency.

Crypto has “no exposure” to stocks and macroeconomics

In a 2018 report titled “Risks and Returns of Cryptocurrency,” researchers Yukun Liu and Aleh Tsyvinski from Yale University found that the risk–return tradeoff of Bitcoin, Ether (ETH) and XRP differs from those seen in stocks, fiat currencies and precious metals. “Cryptocurrencies have no exposure to most common stock market and macroeconomic factors,” they wrote. “They also have no exposure to the returns of currencies and commodities.”

The authors concluded that cryptocurrency returns can only be predicted by aspects specific to crypto:

“Specifically, we determine that there is a strong time-series momentum effect and that proxies for investor attention strongly forecast cryptocurrency returns.”

In short, cryptocurrency returns have little exposure to traditional asset classes, such as stocks, fiat currencies and commodities.

The researchers determined that cryptocurrency returns are predicted by two factors: momentum and investor attention.

“Our findings call into question popular explanations that supply factors such as mining costs, price-to-‘dividend’ ratio, or realized volatility are useful for predicting the behavior of cryptocurrency returns.”

How is Bitcoin trading regulated?

When trading Bitcoin, knowing the rules and regulations is essential. The U.S. Internal Revenue Service declared in 2014 that Bitcoin was property, not currency. Any profits made from Bitcoin investing and trading, therefore, would be taxed at each investor’s capital gains rate, not an ordinary income rate.

In July 2019, the IRS sent letters to 10,000 digital-currency holders who failed to pay taxes or properly report taxes on digital assets. IRS Commissioner Chuck Rettig stated:

“Taxpayers should take these letters very seriously by reviewing their tax filings and when appropriate, amend past returns and pay back taxes, interest and penalties.”

Altcoins and having a plan

There are other things to keep in mind when trading. Before trading a specific digital asset, especially those considered altcoins, investigate its trading volume. If you’re considering trading a more obscure altcoin, then you should learn how many such tokens are being bought and sold daily.

The higher the trading volume, the easier it will be to buy and sell the digital asset. Low trading volume, on the other hand, suggests a lower level of liquidity; that is, a trader could struggle to buy or sell the digital asset on the open market. Crypto exchanges have even delisted tokens with dubious or declining trade volumes.

Having a plan for every trade can help ensure you don’t make a knee-jerk reaction in a fit of emotion-based trading. Disciplined investors and traders draft a game plan for the prices at which they intend to buy and sell an asset and don’t deviate from this plan. In order to manage this, traders can use stop-loss orders, which ensure an asset is sold at a predetermined price.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and you should conduct your own research when making a decision.

Justin O’Connell is the founder of ChangeOutput.com, a communications shop for blockchain. He first wrote about Bitcoin in early 2012 and has worked in the industry ever since. He has software engineering experience, and his written work has appeared throughout the industry over the years.

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