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Bermuda Moves Towards Crypto Regulation Seeking To Attract Fintech Enterpreneurs

Bermuda is one of the newest countries that updated their virtual currency legislation. With the newly changed legislation, it seeks to attract fintech entrepreneurs and become a place where everyone interested in the industry can launch a business or work with some of the companies present out there.

The country’s Minister of National Security noted that Bermuda is moving forward on virtual currency legislation while presenting to a standing-room audience at the Bermuda Underwater Exploration Institute.

Even though Bermuda has no nearby example to follow, they proposed the Virtual Currency Business Act – which will serve as a “shining example” for what the country can accomplish. A 150-page paper on the Virtual Currency Business Act was also posted on the BMA website.

According to the VCBA, the “virtual currency business” is the name that is a provision of the following activities:

Isssuing, selling or redeeming virtual coins, tokens or any other form of virtual currency.

Obviously, this also includes an ICO business on behalf of customers and the act would also cover the payment service providers defined as “people whose business includes the provision of services for the transfer of funds.”

Bermuda’s new legislation will also cover virtual currency exchanges, wallets, and services vendors which are defined as any business providing services in the realm of virtual currencies. The legislation is designed to prevent fraud and market manipulation too.

In the end, the government will also attempt to establish an electronic ID scheme this year for its residents – which will be a program that strengthens the country’s fintech credentials and help it attract even more people in this field.

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Regulation

New York’s Attorney General Wants Cryptocurrency Exchanges To ‘Be More Transparent’

“All cryptocurrency exchanges need to focus on transparency” is what the New York Attorney General’s office said this Tuesday. In a letter addressed to 13 cryptocurrency exchanges, the New York Attorney General Eric Schneiderman’s office requested that companies should provide information on a range of topics related to the operation of their trading platforms.

The letter also said:

“Representing a technological advance, a medium of exchange, and an investment opportunity all at once, virtual currencies are inspiring innovators, entrepreneurs, and investors—and are fueling an increasingly diverse ecosystem of companies and applications,” the AG’s office wrote in the letter. “But virtual currency is also a highly speculative sector, featuring significant volatility, instability, and risk. Moreover, published reports indicate the sector has attracted fraudsters, market manipulators, and thieves.”

The cryptocurrency exchanges in New York that received this letter include the names of: Binance, Bittrex, Poloniex, GDAX, Gemini, Bitfinex, bitFlyer USA, Bitstamp USA, Tidex, Gate.io, itBit Trust Company, Kraken and Huobi.Pro.

Each letter also included a 34-point questionnaire which the exchange operators were instructed to complete in full before May 1st. In this questionnaire, there are questions that are quite in-depth – focusing on specific policies and procedures related to trading as well as information about banking relationship and insurance.

The push for transparency at this point is a key component of the new Virtual Market Integrity Initiative which is focused on protecting investors and preserving the integrity of the nascent financial markets. As Eric Schneiderman. the NY Attorney General states in it:

“With cryptocurrency on the rise, consumers in New York and across the country have a right to transparency and accountability when they invest their money. Yet too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms,”

New York is already known to the world for having some of the most stringent regulatory frameworks in the crypto business – where every crypto exchange needs to obtain a special “BitLicense” from the state’s Department of Financial Services (NYFDS) before it can operate. However, this is only done in good intention in order to control every exchange before it can operate in the state.

 

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Altcoin News

Brazil’s Largest Investment Firm Plans To Launch A Crypto Exchange

The largest investment firm in Brazil, XP Investimentos, is now overlooking the crypto space and actively figuring out how to launch a cryptocurrency exchange. As a financial services company that manages over $35 billion for over 500,000 clients, the firm is not linked to cryptocurrencies in any possible way. However, this may change real soon.

According to Brazil’s Department of Federal Revenue, XP Investimentos recently registered XDEX INTERMEDIACAO LTDA – a company with around $7.3 million in registered capital.

The newly available data shows that this company was initially registered in August 2017. During the month of November, when most of the cryptocurrencies were surging, the exchange got its capital and turned to XDEX.

The local Brazilian news outlet Portal do Bitcoin confirmed this data and showed that this company is linked to XP Investimentos. However, there is still a lot that is unknown about this new cryptocurrency exchange. As Portal do Bitcoin states in a post on their website:

“It is not yet known what services the new exchange will provide. A source, who did not want to be identified, said that the action will be in the so-called over-the-counter market. That is: focused on movements of large volumes of capital and BTC.”

What’s most interesting in the entire situation is that XP Investimentos has been researching the crypto space for a while. In October 2017, they revealed that they registered the “XP Bitcoin” brand. One month later, they hired Fernando Ulrich who is a Brazilian cryptocurrency expert.

In Brazil, there are a lot of ‘rival’ associations in the crypto space. Even though associations are not yet certain on how cryptocurrencies should be regulated in the country, the president of one of these associations, Fernando Furlan, recently said:

“There is legal uncertainty. Depending on the purpose, it may be considered a means of payment or a financial asset. “

All in all, XP Investimentos’ move may come at the right time. After Brazil’s largest crypto exchange Foxbit went down for over 72 hours.

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Bitcoin News

Japan Leads The Crypto Trends With 3.5 Million Active Traders

A new report from Japan’s Financial Services Authority showed a huge interest in cryptocurrencies. According to it, Japan has more than 3.5 million active crypto traders residing in the country.

The full survey covered 17 Japanese cryptocurrency exchanges – showing that the most traded cryptocurrencies in the country include the names of Bitcoin, Ethereum, Ripple, Bitcoin Cash and Litecoin.

When it comes to demographics, most of the Japanese traders are aged from 20 to 40 years old. Only a third (34%) are in their 30s. The annual trading, on the other hand, has risen from $22 million in 2014 to a massive $97 billion in 2017 – with the Bitcoin asset trading even higher, increasing from $2 million (2014) to $543 billion in 2017.

Japan’s trading industry is certainly booming. As a result, the country is taking a hands-on approach to ICO regulation. While China and South Korea chose to ban ICOs completely, Japan’s government has collected a team of researchers to work on regulatory guidelines that will grant approval to ICOs whose application is successful.

Currently, the guidelines include identification of potential money laundering activities which are among the main concerns for many government authorities and ICOs. Aside from that, the guidelines will also cover cybersecurity measures in order to prevent fraud as well as insider trading.

The good thing in all of this for traders is that the potential legalization of ICOs in Japan could be the bridge to other regulation by the surrounding (and other active) countries to follow. In an era where cryptocurrencies dominate the markets, there is definitely need for some kind of regulation – and Japan’s efforts may be the answer to legally incorporating ICO  fundraising in the blockchain, fintech and traditional finance markets.

In the end, this makes Japan the world’s largest Bitcoin trading market – which is why its government must meet the issue head-on and explore new ways to sustain this growth.

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Regulation

EU Nation Of Malta Is Moving Closer To Define When ICOs Are Securities

Malta is among the list of the newest countries that are moving closer to introducing a test that would define when the assets derived from ICOs can have the status of securities.

The announcement comes from a consultation paper that has been published last Friday – and one that is currently seeking public feedback. In it, the Malta Services Authority (FSA) set out a proposal for what’s known a Financial Instrument Test which would become part of their proposed Virtual Financial Asset Act (VFAA).

Malta’s agency running this test also announced that the methodology of the test is designed based on the feedback from the previous discussion paper which was released in November 2017. This discussion paper introduced the concept to the public.

In the latest paper, the test comprises of a process in three stages. The first, second and third stage would together verify whether the distributed ledger technology (DLT) asset falls under the category known as “virtual tokens”.

The following is an excerpt taken from the paper:

“Virtual token is a DLT asset which has no utility, value or application outside of the DLT platform on which it was issued and that cannot be exchanged for funds on such platform or with the issuer of such DLT asset.”

The assets that can be traded in a secondary market would then pass to the second phase of the test which will outline the various securities decisions set by European financial regulators – which will then be applied.

Lastly, the third stage of the test would see the ICO tokens regulated under the proposed VFAA. According to the FSA, this process would embrace a hybrid framework that adopts both EU regulations and national ones.

The paper is also open for public input until May 5, according to the agency. The developing regulatory framework is all part of Malta’s effort to embrace blockchain innovation with a legal environment and eventually attract more and more blockchain businesses to the country.

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