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Can Introduction of Crypto Regulations Advance US Crypto Market?

  By David Drake   The cryptomarket has been experiencing high volatility in recent months. It has also been prone to risks such as scams, fraud, cyber attacks and price manipulation – mostly targeted towards crypto exchanges. Previously, government agencies have explored ways to identify risks related to cryptocurrency use in illegal activities. At the beginning of 2018, New York Attorney General noted that crypto-exchanges are susceptible to manipulation and lack measures to safeguard consumers from these risks. Consequently, there have been calls for stricter regulation to curb this practice by various stakeholders. Taking Action In a bid to curb price manipulation in the cryptocurrency space, legislators introduced two bipartisan bills to the US Congress. The first bill, U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018, aims at identifying how price manipulation occurs to inform action on ways to prevent further manipulation. On the other hand, the second ... Read More »

US Congressmen Introduce Bipartisan Bills to Eliminate Crypto Price Manipulation

  By David Drake   The need for closer scrutiny of cryptocurrencies, in the face of a strict regulatory environment in the US, has seen Congress develop a contingent solution. In the early days of December, 2018, two members of the US Congress introduced a bipartisan bill proposing elimination of crypto price manipulations. The ability to set and affect pricing in the nascent crypto market has led to increased volatility characterised by sharp price fluctuations. This has created uncertainty in the market, keeping  institutional investors – one of the key groups necessary to validate digital assets – at bay. The two legislative bills put forward by Darren Soto and Ted Budd, are dubbed, ‘U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018′ and ‘Virtual Currency Consumer Protection Act of 2018′ respectively. Until the SEC makes a definitive ruling on an operational definition for digital assets and creates an environment ... Read More »

How Proposed US Crypto Regulation Could Tackle Market Manipulation

  By David Drake   In an ideal situation, markets need to be competitive where there are many buyers and sellers so that no single player can dictate or influence prices. This helps in creating public confidence, resulting to increased trade and efficiency in transactions. But this is not always the case. Due to the urge to make super profits, market players have use numerous manipulation methods to fulfil their needs by selecting players. In traditional markets, regulators have ensured that there are systems in place to monitor, investigate and identify market manipulation efforts with a view of prosecuting individuals involved. Trading Gap In the nascent cryptocurrency market, price manipulation is increasingly becoming an issue of concern and systems need to be put in place. Since the market does not have a  regulation on market manipulation, there are contradicting reports from various stakeholders on this matter. It is important to ... Read More »

Self-Regulation: What Virtual Commodity Association and Blockchain Exchange Commission Should Really Focus On

  by David Drake     Cryptocurrencies and blockchain have become the talk in tech circles in recent years. This has raised concerns with respect to cryptocurrency regulation for industry players and governments alike. This is because blockchain, the technology that underlies cryptocurrencies, has particularly captured the attention of developers and paved way for innovations that seek to solve challenges across sectors. In the marketing industry, platforms such as IOU, Qupon and Noiz Chain are providing online customer satisfaction, marketing of digital coupons and interactive marketing solutions. In the social space, ONe Network facilitates social media security while URAllowance utilizes smart contracts to facilitate family interactions. The finance sector has not been left behind. Key innovations in this space include Gath3r that enhances digital monetization and BlockVest that enables investors to manage their virtual asset portfolios. At the same time, BQT facilitates hedge fund and cryptocurrency trading while LiveTradr enables portfolio ... Read More »

Why Relaxed Regulations in South Korea are Good for the Cryptocurrency Industry

by David Drake   South Korea’s Financial Supervisory Service (FSS), the country’s top financial regulator, has  a new governor after President Moon Jae-in approved Yoon Suk-heun’s nomination. Responding to reporters, Yoon Suk-heun said the FSS will consider relaxing cryptocurrency regulations. The FSS banned initial coin offerings (ICOs) and anonymous trading of cryptocurrencies in September 2017 and January 2018, respectively. South Korea’s Effect South Korea’s effect on the global cryptocurrency market cannot be understated. According to Luis Manuel López, the General Coordinator of Workchain Centers, any regulatory decision South Korea makes has an impact on the global market as it is the third largest cryptocurrency market in the world. He says, “South Korea is the third largest cryptographic market in the world, which means that any regulatory decision in the country has a negative or positive impact on the world market. Rumors of new regulatory bans in January 2018 had a negative ... Read More »

Traceable Cryptos Not Wanted in Japan’s Exchanges, Here’s Why

  by David Drake   The financial regulator in Japan is working quietly to reduce cybercrime associated with cryptocurrencies. The Financial Services Agency (FSA) is hoping to persuade cryptocurrency exchanges to quit handling digital currencies largely preferred by criminals who are out to launder money and engage in other criminal activities, including terrorism. Sources that are close to the regulator confirmed the agency is taking action to discourage trading of altcoins such as Zcash, Monero and Dash. These cryptocurrencies are not easy to track which is why they’re largely preferred by the underworld. Even so, Luis Manuel López, General Coordinator at Workchain Centers, feels this isn’t the real problem. He says: “The use of these cryptocurrencies to fund illegal activities is a challenge that Silk Road and Bitcoin had to face six years ago. However, the measures taken to address it should not be limited to tools of payment that criminals ... Read More »

How Crypto-Related Cybercrime Should Be Fought

by David Drake   One of the main features of cryptocurrencies is anonymity. However, this has its dark side, and this is currently one of the major concerns in the cryptocurrency industry due to its linkage with cybercrime. In anonymous cryptocurrency trading, traders do not have to verify their identity or provide personal details. They can open virtual bank accounts and make transactions using digital currencies. This anonymity has made the industry an easy target for scammers, hackers, terrorists, criminals and gangsters. To address this problem, Japan’s Financial Services Agency (FSA) has decided to pressurize cryptocurrency exchanges to delist anonymous cryptos. For many people in the cryptocurrency space, this is neither the best nor a lasting solution to crypto-related cybercrime. In the recent past, we have witnessed big corporates, including banks, get hacked, losing billions of dollars or personal details of millions of customers in the process. Most of these hacking ... Read More »

Will Japan’s Efforts to Halt Trading of Dash, Zcash and Monero Succeed?

  by David Drake   The financial regulator in Japan, Financial Services Agency (FSA), has been quietly advising cryptocurrency exchanges in the country to quit trading Zcash, Dash and Monero. The three cryptocurrencies are seen to be favoured by money launderers as well as others who engage in criminal activities. The decision to discourage cryptocurrency exchanges from trading in these altcoins is largely informed by a report released by Europol last year. In the report, Europol indicated that these altcons are among the prefered digital coins of underworld participants because they are not easy to trace compared to currencies such as bitcoin. Real threats In the past, Monero has been targeted in cryptojacking attempts with hackers causing malware infections on computers in order to hijack their CPUs and then use them for mining the digital currency. But will ceasing their trading address the problem of cyber crime that has become ... Read More »

With Crackdown on Exchanges, Is the Crypto Market Headed for Tougher Times?

by David Drake In an unprecedented move, the Japanese financial regulatory authority recently suspended operations in two crypto-trading platforms and issued business improvement orders for five other exchanges. This came after Coincheck lost an estimated $534 million in NEM currency. Coincheck is one of the leading crypto exchanges in Japan. But Japan is not the only country that is grappling with regulating in the uncharted world of cryptos. In a draft statement released by the world’s richest countries during the just-concluded G20 summit, global leaders acknowledge cryptocurrency as a significant technological innovation. G20 countries are also cognizant of the potential cryptos have in enhancing inclusiveness and efficiency in financial sectors and economies as a whole. Global Vigilance While appreciating the innovation behind cryptocurrencies, the G20 summit raised concerns over issues as such low investor protection relating to tax evasion, terrorist financing, money laundering and market integrity which affect the crypto ... Read More »

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