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Regulation

Government Of China Is Preparing To Block Access To 124 Offshore Crypto Exchanges

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It seems like the government of China is tightening up its regulation in regards to cryptocurrencies. In the latest news, the government prepares to further block access to more than 120 offshore cryptocurrency exchanges whose websites are still accessible by the Chinese.

The news first appeared on the South China Morning Post, which is a major financial news outlet, the authorities associated with the Leading Group of Internet Financial Risk Remediation – founded in 2016 by central bank officials – are apparently planning to begin blocking the IP addresses of the 124 cryptocurrency trading platforms that still serve the Chinese mainland residents.

Obviously, the goal for the government of China is to only allow access to domestic cryptocurrency exchanges. However, the entire action seems coordinated – starting from the earlier news that the authorities in Beijing raided shopping malls and hotels and stopped them from hosting cryptocurrency-related events.

As a cherry on the cake, the China-based social media giant WeChat also shut down the accounts run by at least eight blockchain and cryptocurrency media outlets for “violating the regulations from official Internet censors.”

Some analysts also said that these actions were made in order to ‘celebrate’ the one year anniversary of China’s initial coin offering (ICO) and crypto trading ban. What’s certain is that the regulation in China is tightening and more similar laws are expected in the future.

As a result of this, the bitcoin price declined by 3% while many other large-cap coins saw decreases of up to 6%.

 

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Bitcoin News

Israeli Court Rules In Favor Of BTC Mining Company Against Igud Bank

Israminers, an Israeli Bitcoin (BTC) mining company sued Bank Igud (the Union Bank of Israel Ltd.) in May 2018 and seems like the Israeli court ruled in favor of the mining company after the bank shut down the company’s accounts over money laundering concerns. The crypto news and business outlet Calcalist reported the developments just yesterday. Israminers faced a lot of problems with cash flow after the bank blocked the company’s deposits after claiming that the deposits are against the terms of the bank. A long appeal process followed and a Tel Aviv district court judge explained that the policy of the bank on cryptocurrency clients is way too broad and should not include automatic rejections. Limor Bibi who is the judge in the case was quoted saying:
 “I believe that the sweeping policy, which does not distinguish between different types of activity, the scope of activity and different types of customers — in the field of digital currencies — is unreasonable.’’
At the same time, Bibi explained that the banks have a right to refuse deposits that originate from cryptocurrency trades.  However, the process continued and the regulatory attitude towards crypto trading showed the impacts on the legacy banking system. As previously reported, multiple banks claimed that they have issues with servicing private investors or small business who trade cryptocurrency. Banks usually have a hostile stance on cryptocurrency but their actions are quite contradictive. For example, The United Kingdom Barclays bank also shut down multiple accounts after developing a relationship with a few crypto exchange giants including Coinbase in order to speed up deposits and withdrawals. The Union Bank, on the other hand, appears that senior executives have benefited a lot from education in the blockchain sector when the local Bit2c startup held a seminar on its projects and developments in November 2018. At the start of March, a committee from Israel’s securities regulator officially issued a paper on recommendations for governing the economy around cryptocurrency which can help the bank to improve their treatment on crypto investments more uniformly in the future. The report noted:
 “The committee recommends considering adjustment of the existing regulation to create more suitable regulatory infrastructure for this trading activity in order to better cope with the risks incurred in this activity.’’
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Blockchain News

Companies Dealing With Crypto Need Rules, Not Crypto Itself: Winklevoss

Cameron Winklevoss’ statements reached our crypto news today for stating that crypto doesn’t need rules but the companies who deal with them need the rules. His statement comes as a response to the happenings with the QuadrigaCX crypto exchange. The Winklevoss twins are among the business owners who demanded the crypto market to be regulated since their Gemini exchange is ‘’fully regulated.’’ They aimed to change the image of the crypto industry as a place where theft, hacks and fraudulent activities occur by using cryptocurrency. Their campaign that crypto needs rules didn’t really catch the eye of most bitcoin users. Bitcoin was initially created so people can make transactions without having ‘’to trust’’ anyone. Cameron noted:
 “QuadrigaCX was editing its own internal ledger to move customer funds into special accounts controlled by insiders, who were allowed to trade using those funds and even transfer cryptocurrency out to external wallets.’’
Companies that offer custodial services by holding the bitcoins of their customers should be regulated in order to prevent another QuadrigaCX scandal happening. He added:
‘’Every incident in crypto to date has been/would have been PREVENTABLE w/ proper rules and thoughtful regulation.’’
Describing the failure of Mt.Gox and Quadriga, Cameron addressed the problems that still hover around in the crypto industry and he told while speaking at the Southwest Conference in Texas by saying:
‘’There are a lot of carcasses on the road of crypto that we’ve seen and learned from. At the end of the day it’s really a trust problem. You need some kind of regulation to promote positive outcomes.’’
The twins experience growth over the past few years and said that as long as crypto is growing, Gemini will continue to grow as well. They pointed out that the company had only 20 employees at the beginning and that they reached up to 200 nowadays. Their growth means that the stakes are becoming much higher today. Cameron wrote in a blog post:
 “As crypto has grown up a lot so has Gemini. We’ve grown from 25 to 200 employees…In 2016 crypto was niche — today it is something — tomorrow it will be everything.’’
According to him, it is time to regulate the industry because even the ‘’trustless’’ cryptocurrencies will require a trusted third-party.
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Regulation

Stablecoins Could Have Issues Under The Current Securities Laws: SEC’s Valerie Szczepanik

Valerie Szczepanik, a senior advisor for digital assets at the United States Securities and Exchange Commission (SEC), pointed out that stablecoins could have a hard time under the current securities laws according to the information coming to our crypto news by the blockchain-related website Decrypt. Szczepanik, popularly known as the Crypto Czar, has officially been appointed as the new associate director of the Divison of Corporation Finance and senior advisor for Digital Assets and Innovation or Bill Hinman who is the division director, back in June 2018. When she made her statement regarding the stablecoins, she also divided them into three categories. The first category is the one related to real assets such as gold, the second one is the stablecoins related to fiat currency held in reserves and the third ones are the ones who use market mechanisms to keep the prices stable. She continued:
 “I’ve seen stablecoins that purport to control price through some kind of pricing mechanism, whether it’s tied to the issuance, creation or redemption of another type of digital asset tied to it, or whether it is controlled through supply and demand in some way to keep the price within a certain band.”
Valerie also noted that when a third central party controls how the prices move over time, the last type of stablecoins ‘’might be getting into the land of securities.’’ Also, she believes that if the buyers are promised that someone else will guarantee a profit or that is able to control the price, that token could be considered as security. Finally, she explained that when an asset is labeled as a stablecoin, the SEC will always have their eye on such projects with a high level of scrutiny. She noted:
 “Not to sound cliche, but we’d much rather people come to us and ask for [permission], or come talk to us before they do something, rather than doing something and then coming in and asking for forgiveness.”
For example, the United States-based stablecoin project Basis, stated last December that they will close all operations and all of the investors will get their money back since they weren’t able to avoid a security classification for their secondary token. In the meantime, Jay Clayton, SEC’s chairman, confirmed that Ethereum and other similar cryptocurrencies are not classified as securities under the US law.
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Blockchain News

Blockchain Representatives Raise Concerns About A Nevada Crypto Bill

Blockchain and crypto representatives expressed their concerns about a crypto bill in the Nevada State Senate in a hearing in the Judiciary Committee on March 12, on Tuesday which we are about to read more in our blockchain news below. The bill SB 195 aims to introduce multiple uniform standards to the digital currency industry and also aims to make crypto-related business such as exchanges to be required to register with the Department of Business and Industry in the state. The Uniform Regulation of Virtual-Currency Businesses Act, which is sponsored by the Democratic senator James Ohrenschall comes because of his strong efforts to put forward the Uniform Law Commission to introduce strong regulations for the digital currency industry. Ohrenschall stated in the hearing that the multiple iterations of the bill were already introduced in a couple of state legislatures including California, Oklahoma, and Hawaii. The bill was explained before the committee and the representatives from the crypto industry reacted strongly and protested against the new bill. The Nevada Technology Association (NTA) stated that this crypto bill is way premature and that it would lead the state of Nevada in a strong disadvantage in the blockchain industry because it is still in its development stages. The association also expressed their concerns saying that the bill aims to regulate the evolving technology in a very fast manner which could bring more harm than good for the sector. The vice president of the government affairs and strategic initiatives at Blockchain LLC Matt Digesti stated that no blockchain related businesses were consulted during the drafting process of the new bill. The director of government affairs at blockchain firm Filament Wency Stolyarov published a written statement  saying that the new law would ‘’unintentionally classify us as a money transmitter because we build hardware wallet technology that enables the machine-to-machine autonomous transaction.’’ The bill is still at the beginning stages since it was only introduced in mid-February. The associated press also found out that some countries in Nevada started issuing marriage license on the Ethereum blockchain while their acceptance varies from state to state.
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