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Will SEC’s Decision Not to Classify Ether as Security Fuel Demand for Decentralised Applications?

  by David Drake   Since the Ethereum blockchain network went live in 2015, it has significantly impacted the cryptocurrency industry. The network has been used by developers to create decentralized applications (DApps) and launch cryptocurrency based projects due to its smart contract feature. Additionally, ether, the utility token that runs on the Ethereum network, has been used to power decentralized applications developed on the network. For the past one year, the number of Initial Coin Offering (ICO) projects launched on the Ethereum network have increased significantly across sectors. Revolutionary projects in sports and finance sectors like SportsFix and URAllowance have joined the growing list. Despite this growth, ether, like other leading cryptocurrencies in the market, has faced uncertain times that have seen its prices fluctuate since the beginning of the year. When the Securities and Exchange Commission (SEC) chair said all tokens would be considered as securities and would ... Read More »

What Can the Crypto Market Expect following SEC’s Announcement that Ether is Not a Security?

  by David Drake     Ether, the digital currency based on the Ethereum blockchain technology, will not be considered as a security. This is according to William Hinman, the Securities and Exchange Commission, (SEC) Corporate Finance Division Director. Speaking during the Yahoo Finance All Markets Conference, Hinman made it clear that ether need not be regulated like stocks and bonds. This is because Ether, as well as Bitcoin, use decentralized networks and do not have defined structures like corporate stocks. Based on Hinman’s statement, it is clear that the SEC will stop considering cryptocurrencies that get fully decentralized as securities. The ICO Challenge The main challenge facing ICOs is a lack of a clearly defined regulatory framework. Also, there has been little transparency as to how the regulator applies the securities laws on digital assets with compound issues involved in outlining the probable use of various laws. However, the move ... Read More »

How SEC’s Clarity on Ether Could Boost Cryptocurrency Growth

  by David Drake     Ethereum network has played a significant role in the growth of the cryptocurrency market. As the network on which the digital currency, ether, runs, Ethereum provides a platform for developers to create decentralised applications. Earlier this year, there was uncertainty among crypto-developers when the Securities and Exchange Commission (SEC) through its Chairman, said tokens and digital assets would be considered as securities. Ether was originally offered as an initial coin offering (ICO) but has since been highly decentralised. The statement by SEC’s director of corporate finance, Mr. William Hinman has clarified that the digital currency is not a security. This means it would not be regulated the same way the SEC regulates corporate bonds and stocks. The main reason for not classifying ether as a security is the fact that it functions in a way similar to commodities such as gold, due to  its high ... Read More »

What SEC’s Latest View of Decentralized Currencies Means for the Crypto Industry

  by David Drake     Earlier this month, the Securities and Exchange Commission (SEC) announced that ether, a virtual currency, will not be regulated as a security. These news alone saw the price of ether rise by 9.4%, from $468 to $515. The price of bitcoin also rose by 4.8%, from $6,300 to $6,645 following a statement made by William Hinman, SEC’s Director for Corporation Finance. Speaking at a finance conference in California, Hinman went on record having said that based on ether’s current state, its decentralized nature, its present offers, the Ethereum network and its sale, its transactions do not constitute securities. According to Jori Falkstedt, CEO of GlobalSpy, the Ethereum platform has multiple uses and this recent statement by Hinman seems to acknowledge this fact. He says, “Ethereum has many uses from exchange instrument to crypto project’s operating environment and its enormous popularity, has already acquired a position ... Read More »

Recent Hacks on Crypto Exchanges Fuel Increased Government Intervention

Recent Hacks on Crypto Exchanges Fuel Increased Government Intervention

by David Drake Japan has cracked down on two crypto exchanges and issued a warning to five others, after Coincheck lost over $500 million to hackers in late January. During the heist,hackers accessed hot wallets and made a series of transfers before they were eventually stopped. Japan was the first country to institute regulatory measures to govern cryptocurrencies in October of 2017 and has now threatened punitive measures in an attempt to bolster consumer security. Should exchanges fail to comply with the requirement to improve security by the March 22, 2018 deadline, the regulator could force them to suspend business. Japanese crypto exchanges, BitStation and FSHO were ordered to halt business for the next 30 days, starting March 8, 2018. This is because the authorities discovered that a business executive from BitStation used consumer funds for personal benefits while FSHO failed, in general, to offer consumer protection. Coincheck, already ordered ... Read More »

Why Crypto Exchanges Crypto Business Needs Stringent Regulations

Why Crypto Exchanges Crypto Business Needs Stringent Regulations

  by David Drake Regulation is one of the factors that has been linked to the unprecedented plunge of Bitcoin prices since December of last year. However, Bitcoin, the biggest cryptocurrency by price and market cap, is expected to gradually bounce back. Growth in the cryptocurrency industry has largely been spontaneous, generating mixed reactions on its sustainability. By the end of this year, the crypto market cap is predicted to reach $1 trillion. According to experts, this will only be achieved if a proper regulatory framework is put in place. It is in this spirit that the Japanese regulator, Financial Service Agency (FSA), along with the  U.S. Securities and Exchange Commission (SEC) are cracking down on unregulated crypto exchanges. Current Situation The ongoing crackdowns and warnings by financial watchdogs in the U.S. and Japan are good for the industry. In the coming months, other countries are likely to follow suit because ... Read More »

Regulators Crackdown on Crypto Exchanges in the U.S and Japan, What Can we Expect Next?

Regulators Crackdown on Crypto Exchanges in the U.S and Japan, What Can we Expect Next

by David Drake Financial Services Agency (FSA) in Japan has suspended trading in two exchanges and issued orders to five other trading platforms to improve their system security. This move has come after a probe was launched into a $530 million heist on Coincheck’s crypto platform. In the U.S, the Securities and Exchange Commission (SEC) has issued warnings to cryptocurrency exchanges claiming that they could do anything with investors’ money. As a result of these incidences, the regulation debate rages on as governments look into ways to regulate the cryptocurrency market. The recent crackdowns have created uncertainty in the market with players eager to see what other measures financial regulators across the globe will take. Heavy vs Light Regulation Industry players hold different views on whether government regulation is good for the cryptocurrency industry. According to Ben Way, CEO of Digits, the regulation debate has to be well balanced and properly reasoned. He ... Read More »

Why there is Need to Boost Security in Cryptocurrency Exchanges

Why there is Need to Boost Security in Cryptocurrency Exchanges

by David Drake Last week, Japan’s Financial Services Agency (FSA) halted two cryptocurrency exchanges in the aftermath of a $530 million heist on Coincheck. FSA suspended operations of Bitstation for using client funds for personal transactions and FSHO, and for giving inadequate protection to its customers. In addition, Japan’s regulator sent out business improvement orders to five exchanges, including CoinCheck, requiring them to strengthen their internal management and improve operations. Japan became the first country to regulate crypto exchanges at the country level in 2017. Sixteen (16) crypto exchanges are registered in Japan, and 16 more have applied for registration, which include CoinCheck. The United States, on the other hand, recently issued subpoenas to 80 crypto firms for possible violations of the SEC’s investment laws. SEC also suspended several firms for possible violations of its rules. As of this writing, the country has no crypto regulations yet, and maybe this development is ... Read More »

Will More Corporates Adopt Blockchain Technology From Now On?

Will More Corporates Adopt Blockchain Technology From Now On

by David Drake Looking at the 2018 Bitcoin and Blockchain industry report released by Coindesk, one cannot help but notice that the crypto market has had a tremendous growth.  This does not in any way mean the market has not experienced its fair share of challenges, far from it. At the turn of the year, speculations over ‘Bitcoin Bubble’ saw some governments ban trading in cryptocurrencies and regulatory boards launch crackdowns in the industry. Though a lot still needs to be done about regulation of cryptos, there are signs governments in the U.K., U.S. and European Union are making efforts to understand  crypto operations with the aim of mainstreaming and nurturing the technology behind it. On the brighter side, there have been news that governments, such as Russia and Cambodia are currently working on issuing national cryptocurrencies. Adoption of blockchain technology has been gaining traction steadily in corporates  with businesses ... Read More »

Government Regulations is the next move after Self-initiated Regulations by Cryptocurrency Companies

Government Regulations is the next move after Self-initiated Regulations by Cryptocurrency Companies

By David Drake Unhampered by regulations, the cryptocurrency industry has grown globally as seen in its  market cap of more than $480 billion, and the latest monthly market volume of $723 billion as of February 21st of this year. However, recent developments in the space like the latest cryptocurrency hacks in Japan, Italy, and South Korea, the stolen ICOs early investor funds, and the China ban on foreign cryptocurrency platforms have raised anew the issue of government regulations in this space. Is the bonding together of seven large crypto companies to form CryptoUK, the first UK trade body for the industry, a move towards this direction? “In the short term, I see governments giving the industry some leeway to police themselves while keeping a close eye on how the sector manages due diligence and protection of consumer funds. Crypto is on the radar of many governments, and they will always be watching how we manage our businesses. With ... Read More »

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