Major Chinese Exchange Platform Looks Towards International Market

One of China’s largest cryptocurrency exchanges has been bought by an unnamed Hong Kong investment group. According to a statement by BTCC today, the buyout aims to help develop an international facing platform, expanding the company’s remit outside of China.

Senior Vice President of BTCC Mining Pool, Denver Zhao, said:

 “We now have the resources to more fully realise our vision of safeguarding and stabilising digital currencies’ blockchains… Going forward, we’ll provide better, fairer, more transparent, and more comprehensive mining services to our customers worldwide.”

Such a change in company direction has likely been driven by the recent crackdown on cryptocurrency products and services within China. The nation, which was once one of the largest markets for digital currencies, has moved to a more hostile stance against the space in recent months. Their offensive has largely focused on initial coin offerings, as well as mining and exchanges.

With such an unsure environment, it’s no surprise that BTCC have made the decision to move operations elsewhere. The founder of the company, Bobby Lee, stated:

“Today’s acquisition is an incredible milestone for BTCC that validates all of our hard work over the past few years. I’m very excited about the resources this gives BTCC to move faster and aggressively grow our businesses in 2018 and beyond”.

Founded in 2011, BTCC was China’s first Bitcoin exchange. However, according to today’s statement, they will now focus their three major products on a more global market. These are their mining pool, BTCC Pool, their cryptocurrency wallet, Mobi, and their USD Exchange. Bloomberg report that it will be Denver Zhao, Mark Ma, and Aaron Choi who will lead each respectively.

The statement from BTCC included an optimistic outlook for the company’s future by Bobby Lee:

“I’m excited about this new chapter in BTCC’s future — the acquisition poises us for success in 2018 and beyond,” Lee said. “The resources we’ll gain and the new set of experienced and talented executives we’ll have joining the BTCC team give us impetus to lead every segment of the digital currency ecosystem, including the pool, payments, and exchange businesses.”

At present, scant details are known about the acquisition. Despite his appearance at Blockchain London on January 23, Bobby Lee and company are yet to disclose either the figure or the name of the company who have decided to take on BTCC.

 


 


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Valuable items will always attract criminals. Cryptocurrency is no exception. However, with a security model as strong as Bitcoin’s it’s very difficult to compromise individuals’ assets. It’s also likely that if a cyber criminal could indeed appropriate funds from random Bitcoin wallets, the value would drop hugely, rendering the whole endeavour pointless.

Rather than target individual wallet, therefore, hackers have turned to more devious tactics to get their hands of digital currencies, as well as personal information about those who hold them.

App stores explioted

An online threat management company called RiskIQ has been studying various app stores. Their researchers have discovered over 600 malicious applications with a cryptocurrency theme amongst Apple, Google Play, SameAPK, APKPlz, and other popular markets that people use to source applications for their devices. These apps have been officially blacklisted by cyber security vendors but remain available for download.

According to their research, RiskIQ have identified that almost 3% of applications with “Bitcoin Exchange” in their title were suspect. Meanwhile, 2.6% and 2.2% of apps with “Bitcoin Wallet” and “cryptocurrency” in the name were also blacklisted. Those behind the creation of such malicious applications hope to trick unsuspecting users into sending large sums of cryptocurrency, fiat currency, or even just personal data for the financial gain of the criminals involved.

Those stores with the most dangerous applications were Google Play with 272, APKFiles with 54, and 9Apps with 52. Fabian Libeau of RiskIQ gave advice to BetaNews to help keep anyone trying to find Bitcoin or digital currency-themed applications for their devices safe:

“We are seeing threat actors around the world exploiting what is already a hostile currency in a lawless digital world… Before handing over any cash or personal data, investors should carry out thorough research into the exchange and wallet apps they intend to use. By checking the developer’s name, user reviews and the number of app downloads, investors can measure the validity of an app and be more confident in their choice.”

Malicious software appears to be the latest effort from the cyber criminals of the world to get their hands on cryptocurrency through illegitimate means. Previously, exchanges and other centralised stores of digital currency have been targeted. There were a spate of attacks against Korean crypto exchange YouBit last year, eventually causing the company to declare bankruptcy. This was followed by hacking of cloud mining service NiceHash. Their security was compromised to the tune of $60 million in December.

 

Image: PixaBay

 

The South Korean government has started to focus on fostering and regulating the local cryptocurrency market to protect investors and ensure businesses have robust infrastructure to secure sensitive information.

Major Banks Supporting Cryptocurrency Exchanges

Earlier this month, several officials in the South Korea Finance Ministry told local investors that banks and financial institutions within the country will begin cutting off money flow into cryptocurrency exchanges and trading platforms.

Investors became increasingly concerned when Kookmin Bank, the country’s biggest financial institution, stopped providing virtual bank accounts and banking services to cryptocurrency exchanges.

On South Korean bitcoin trading platforms, each user is granted a virtual bank account issued by local banks. With it, traders can initiate trades and execute orders without directly moving funds to their original bank accounts. Instead, traders can choose to keep their funds on virtual bank accounts on the exchanges to swiftly trade cryptocurrencies to fiat.

Korbit and Bithumb, two of the largest cryptocurrency exchanges in the market, revealed this week that Shinhan Bank along with five other major banks in South Korea will begin supporting cryptocurrency exchanges with virtual bank accounts. As such, by the end of this month, new users will be able to open accounts on trading platforms and existing users will be permitted to trade large volumes once again.

Previously, the Justice Ministry, which was heavily criticized for its premature statement on a cryptocurrency trading ban bill that was later refuted by the South Korean government, suggested that it will request banks to cut services to both investors and exchanges in the cryptocurrency market. However, with the exception of Kookmin Bank, all of the country’s major banks will continue to support cryptocurrency exchanges.

Cryptocurrency Exchanges Fined For Poor Security Measures

Today, on January 24, eight cryptocurrency exchanges in South Korea including Korbit and Coinone were fined $130,000 in total for implementing poor security measures. The South Korea Communications Commission (KCSC) penalized local exchanges for violating the Information and Communication Network Act and Privacy Act.

The KCSC, which led an investigation into 10 cryptocurrency exchanges in cooperation with the South Korea Technology, Science, and Information Ministries, discovered that the majority of exchanges have had poor security breach prevention systems, unsecure user information storage protocols, and unreliable storage technology for sensitive user information.

The eight cryptocurrency exchanges each received a fine in the range of $10,000 to $25,000. Analysts stated that the fines were significantly small relative to the magnitude of the business local cryptocurrency exchanges operate. The KCSC noted that small fines were imposed because poor security measures on cryptocurrency exchanges were discovered for the first time and since the exchanges have been provided with a 30-day window to implement stronger systems.

The strict regulation of the South Korean cryptocurrency market by the country’s Finance Ministry and KCSC is an optimistic sign for the long-term growth of the industry, because it demonstrates the unwillingness of the government to ban the market and cryptocurrency trading.

Blockchain Capital, a cryptocurrency-focused hedge fund and venture capital firm, has revealed in survey that 30 percent of millennials would rather invest in bitcoin and the cryptocurrency market than government bonds or stocks.

Millennials Prefer Bitcoin Over Stocks

In an interview with Forbes, Timothy Tam, the founder of CoinFi and former hedge fund trader, emphasized that millennials and investors from the traditional finance industry have become more intrigued by bitcoin due to its fixed supply and its exponential growth rate.

“There’s limited supply because, aside the fact that there will only ever be 21 million Bitcoins in circulation, most of the holders of Bitcoin are long terms holders. The demand on the other hand keeps soaring,” said Tam.

In December 2017, billionaire investor Mike Novogratz described bitcoin as a speculator’s dream, because of its fixed supply and rising demand for the asset class.

But, for millennials and the vast majority of investors, bitcoin’s presence is more significant than a speculator’s asset. It is a robust store of value and a decentralized currency, which is unalterable and consequently, resistant to censorship. It serves the $40 trillion offshore banking industry better than the banks that dominate the space, as BlockTower’s Ari Paul previously noted.

Hence, given that bitcoin is still in its early stage in development and adoption, the fact that the relatively large portion of millennials are willing to and prefer to invest in the cryptocurrency market instead of the traditional finance sector is noteworthy. Bitcoin has already begun to evolve into a major asset class, as JPMorgan global markets strategist Nikolaos Panigirtzoglou said:

“In all, the prospective introduction of bitcoin futures has the potential to elevate cryptocurrencies to an emerging asset class. The value of this new asset class is a function of the breadth of its acceptance as a store of wealth and as a means of payment and simply judging by other stores of wealth such as gold, cryptocurrencies have the potential to grow further from here.”

Where Does Bitcoin Go in 2018?

Panigirtzoglou explained that bitcoin has started to evolve into a major asset class with the listing of bitcoin futures by leading markets like the Chicago Board Options Exchange (Cboe) and CME Group.

But, the truth is, the global cryptocurrency market and exchanges within it have become multi-billion dollar companies of their own, and have started to process more volumes that stock markets. Bithumb for instance, the world’s second largest cryptocurrency exchange based in South Korea, has started to process more volumes on a daily basis than the KOSDAQ, the country’s main stock market.

In 2018, with the entrance of millennials and young investors, analysts expect the price of bitcoin to reach the $50,000 mark, and become the first cryptocurrency to reach a $1 trillion market cap. The introduction of bitcoin exchange-traded funds (ETFs) by the New York Stock Exchange (NYSE) and Cboe could bring the price of bitcoin to $50,000 much quicker than the expectations of investors.

Over the past 24 hours, the bitcoin price has regained momentum after two major corrections, recovering to $15,000 across all major bitcoin markets including the US and Japan.

In South Korea, the demand for bitcoin still remains significantly high, as it is being traded with a $4,000 premium at a price of $19,000.

$60,000 Mid-Term Target

Julian Hosp, the founder of TenX, a popular cryptocurrency visa debit card service provider and cryptocurrency analyst, stated that the price of bitcoin will likely surpass $60,000 by the end of 2018, achieving a multi-trillion dollar market. A $60,000 price per bitcoin would place the market valuation of the cryptocurrency at $1.26 trillion.

“I think we’re going to see bitcoin hitting the $60,000 dollar mark, but I also think we’re going to see bitcoin hitting the $5,000 dollar mark. The question is though, ‘Which one is it going to hit first?'” said Hosp.

The prediction of a major correction of over 50 percent is exaggerated, and the price of bitcoin will likely not plunge to $5,000 given that it already has experienced and recovered from large price corrections.

Contrary to the claims of many analysts, corrections are beneficial to bitcoin and the rest of the cryptocurrency market because they prevent the occurence or formation of short-term bubbles. Through corrections, the bitcoin market stabilizes and strengthens, as weak hands and speculators fall off.

Hosp added:

“For experts that have been in the market, this was actually a welcome dip. This dip for us was very, very healthy, and some of us have used it to buy a little bit more because suddenly we had 40-45 percent discount to all-time highs. I don’t think right now, but I think in the long run, we will always see a little bit of an up move, and then a dip down.”

A correction of 66 percent at this phase of adoption, development, and market growth is not likely, considering that leading multi-billion financial institutions such as the Nasdaq and New York Stock Exchange (NYSE), two of the world’s largest stock markets by trading volume and market capitalization of listed companies, have started to embrace and provide support around the cryptocurrency.

NYSE Focuses on Bitcoin

As of June 2017, the market capitalization of companies listed on NYSE amount to a staggering $21.7 trillion. Despite that, NYSE chairman publicly expressed his regret for not listing bitcoin futures ahead of the Chicago Board Options Exchange (Cboe) and CME Group.

“We may be stupid for not being first on that. I don’t have the answers, I wish I knew. I don’t know what to make of cryptocurrencies,” said NYSE Chairman Jeff Sprecher at an investor conference sponsored by Goldman Sachs.

Given that NYSE has fallen behind other options and stock markets in facilitating the demand for cryptocurrencies from investors in the traditional finance market, the company has focused on introducing investment instruments and regulated platforms for cryptocurrency trading.

This month, NYSE filed two bitcoin exchange-traded fund (ETF) applications to the US Securities and Exchange Commission (SEC), which are expected to improve the accessibility of bitcoin on regulated exchanges.

One of the world’s largest crypto exchanges, Coinbase, has been struggling to meet the demand of the flurry of activity on its servers as Bitcoin breaks more price barriers. In the last 24 hours, the daddy of all coins broke $11,000 and transactions were at their highest levels. Exchanges have been struggling to keep up and Coinbase went offline with a blue error screen for thousands of crypto traders wanting to get in or out of the action.

If that wasn’t bad enough the exchange faced a new challenge from the US government this week as a district judge ordered them to hand over thousands of user records to the Internal Revenue Service (IRS). Being one of the largest exchanges Coinbase has seen billions of dollars through its systems and the US government is not happy about it.

This week’s court order requires Coinbase to divulge details on all customers who made a transaction worth $20,000 or more between 2013 and 2015. The exchange has estimated that this request would total 8.9 million transactions between 14,355 different account holders, according to the court order.

Information requested includes names, birth dates, addresses, tax IDs, transaction logs, and account invoices of the Coinbase users. This is less information than was demanded by the IRS in a November 2016 summons that sought details on every single transaction on the exchange for the period. Coinbase argued that this was an invasion of its customer’s privacy and ignored the original request before the IRS filed a petition to enforce the summons in March 2017.

The IRS has noticed that the number of tax returns claiming gains from virtual currency did not line up with the emerging popularity of cryptocurrencies as an investment vehicle. The court documents noted that “only 800 to 900 taxpayers reported gains related to bitcoin in each of the relevant years and that more than 14,000 Coinbase users have either bought, sold, sent or received at least $20,000 worth of bitcoin in a given year suggests that many Coinbase users may not be reporting their bitcoin gains,”

Crypto aficionados and traders will not be happy with this outcome, especially if they are American. Several exchanges such as Bitfinex already limit or prohibit US citizens from opening accounts for fear of government intervention. It seems that those living in the “land of the free” are some of the most financially enslaved people in the world.

As India’s finance watchdogs attempt to create a concrete regulatory framework for the decentralized virtual currencies, the netizens have already embraced Bitcoin and other digital currency assets for trading and remittance purposes. The Bitcoin transaction volume from the Asia’s second largest economy is on its way up, and it is opening up opportunities for many new players.

Belfrics Global, a Malaysia-based startup, appears to be prepared for an all-around Bitcoin demand. It is a conglomerate in itself, offering everything from wallet to trading to a payment gateway. The services are eye-catching, to say the least. But can Belfrics deliver? We tried to find out by inviting Praveenkumar Vijayakumar, the Chairman & CEO of Belfrics Global, for a quick Skype conversation.

Excerpts from our conversation:

YG: What prompted the launch of Belfrics Global?

Praveenkumar Vijayakumar, the Chairman & CEO of Belfrics Global

PV: For over a decade, I have served the OTC FX and commodity market and have provided solutions to multiple exchanges in Asia and Asia Pacific. I was always in the pursuit of providing a more sustainable trading product. When I stumbled on Bitcoin and blockchain technology, it was a natural choice for me to embrace the platform. There is a huge scope for the technology to contribute effectively into the financial systems. The current financial system, with all the regulatory guidelines in place, still lacks the transparency, efficiency, and scalability. I was convinced that this is the technology that will script the future of money. Belfrics was conceptualized to play a major role in the crypto revolution.

What new things does Belfrics bring to the Indian Bitcoin sector?

Belfrics is growing at a considerable pace not only in India but also in Africa and other parts of Asia. We have a series of product to be launched in the next two to three-quarters. We will be launching our completely new trading platform with enhanced features which will give a seamless UI experience to the investors and the entire community. We are currently integrating our platforms with an FX grade interface, specifically targeting equity, FX, and commodity market traders.

There is always a fear of security loopholes in Bitcoin businesses? How do you plan to mitigate such risks?

Belfrics is committed towards the security of the investors and has been spending most of our development efforts on enhancing the security features of the platform. Pretty soon, we will be moving from a centralized exchange to a ‘Hybrid’ Exchange model wherein clients will have a better control of their holdings. We believe in absolute transparency and that is exactly what the investors will experience.

How do legal authorities look at Bitcoin exchanges in India?

It is a mixed bag of responses. The Bitcoin volume traded in India is not a considerable value to make an impact on the Indian economy or the financial system. Hence the approach of the entire community, especially for the Indian market, has been to wait and watch. Having said that, ever since demonetization, there has been a huge jump in cryptocurrency based transactions. The considerable increase in the number and the value of transactions and the associated scams has forced the Indian authorities to revisit the crypto regulation, earlier than expected.

What are your expectations from the regulators regarding the upcoming Bitcoin law?

As compared to western regulators, Asian regulators have to deal with both money laundering and capital control issues. The bigger challenge for the Indian regulator would be to address the capital control issue. We are already addressing these issues through a self-regulated FX policy in our exchanges and with the advent of blockchain technology, we are sure that an effective solution and framework will be available to address these issues. It is imperative that a fair degree of regulation should come into action so that we can operate as per the guidelines and can continue experimenting with the technology to provide the much-needed change over to both the regulatory regime and to the financial systems.

And Bitcoin price? Where do you see it in the next five years?

Volatility in Bitcoin price will continue for quite some time. The recent price hike was not a healthy one. Since a majority of the bitcoins are concentrated with few, both upward and downward movements can be quite sharp. If Bitcoin blockchain struggles with its scalability issues, we could see other altcoins, take over a large market share of Bitcoin in the years to come. If the scalability and AML trouble does not hamper much to the bitcoin blockchain, Bitcoin could easily trade well above $10,000 in 5 years’ time.

What are Belfrics’ plans for the future?

Belfrics has already setup a subsidiary in Japan to conduct regulated digital currency operations. We expect to be regulated in the next 2 quarters.

Belfrics would like to position itself as a regional liquidity provider for all major coins.

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One thing a lot of people are concerned over is the time it takes for Bitcoin transactions to confirm. This is especially true when moving funds to and from an exchange platform. Gemini, the bitcoin exchange operated by the Winklevoss twins, is introducing zero-confirmation deposits. This is quite a risky move, as zero-confirmation transactions are subject to double spending.

Introducing zero-confirmation bitcoin deposits is a significant step for the Gemini exchange. Allowing customers to instantly trade their balance without having to wait half an hour will attract more people to the exchange. Deposit delays have been a problem in the world of cryptocurrency for quite some time now. With the bitcoin transaction volume increasing, and the network capacity remaining fixed, confirmations can take much longer than needed.

Zero-Confirmation Bitcoin Deposits Come To Gemini

This is why the Gemini exchange becomes one of the first in the world to allow zero-confirmation deposits. Withdrawals from the platform are confirmed as soon as possible already. With a new aggressive fee algorithm, the exchange pays these costs out of their own pocket. Unfortunately, doing the same for bitcoin deposits has proven to be a much bigger challenge. Gemini can’t control transaction fees on deposit transactions, yet they want to avoid hours of delays.

Every Bitcoin deposit on the exchange will be run through a proprietary analysis to determine its expected confirmation time. Once the transactions passed the criteria, the amount will be pre-credited to the Gemini exchange account in question. In doing so, the company allows users to sell BTC for USD or Ether much faster and more efficiently. Moreover, this allows users to participate in the daily two-sided auction without delays.

Additionally, Gemini improved their Instant ACH deposit system. Funds being available for trading right away is important, both for US Dollars and cryptocurrencies. This new feature will be quite useful to frequent traders on the platform. Gemini is making major strides to become a bitcoin exchange platform with mainstream investor appeal, that much is certain.

Header image courtesy of Shutterstock

Bitcoin wallet and exchange Coinbase yesterday announced that they have obtained the Bitlicense from the New York Department of Financial Services (NYDFS). It is the formal license to carry out digital currency-related businesses in the state of New York.

Coinbase believes that the long-term success of virtual currency and blockchain technologies will require productive partnerships between industry and government. Support from government is seen as essential in longevity of any cryptocurrency even by the other members of the crypto community.

Further, Coinbase sees the Bitlicense as an important validation of its highest priority, which is, to operate the most secure and compliant digital currency exchange in the world. Coinbase plans to continue to make heavy investments in the security and integrity of its operations as it expands business in New York and around the world.

The BitLicense strengthens Coinbase’s operating status even if it was allowed to serve New York customers under a safe-harbor provision while the application process was being conducted.

The BitLicense regulatory guidelines were introduced in June 2015 by the state of New York in its pursuit to scrutinize Bitcoin companies even more than most other financial institutions in the state.

What’s interesting is the timing of the BitLicense which is being viewed as the “validation” of Coinbase’s aim to be compliant with regulatory considerations. The BitLicense comes at a time when the company is already embroiled in an expensive legal battle with the IRS.

The license was issued after a thorough review of Coinbase’s anti-money laundering, consumer protection, cyber security, and financial information policies as required by the BitLicense application.

But BitLicense itself has the Bitcoin community confused if not divided, due to its controversial regulatory structure as it has extensive data gathering standards, associated expenses, and stringent reporting requirements, even after it’s granted.

Moreover, the costly and cumbersome requirements for the license have many companies getting out of the state. And there are only two issued BitLicense before Coinbase, to Boston-based bitcoin startup, Circle Internet Financial Inc., and distributed ledger startup, Ripple.

What sets Remitano Bitcoin P2P exchange apart from its counterparts is that its service in multiple countries operates without the need of a banking partner, completely shielding the service from their whims and fancies.

Remitano provides escrowed P2P Bitcoin marketplace where people buy and sell Bitcoin easily and safely. The platform is a product of Seychelles-based Babylon Solution Limited operating in many countries including the United States, Australia, United Kingdom, Malaysia, Nigeria, Vietnam, Cambodia, China, India, Tanzania and Ghana.

While other centralized exchange platforms currently in the market are heavily dependent on the banks to receive deposits and facilitate withdrawals for customers, Remitano is completely independent from traditional banking partners.

Banks are known to harass centralized exchange platforms. Recently banks caused a great trouble to customers trying to cash out or make deposits at some well known Malaysian centralized exchanges by shutting them down.

People are increasingly moving towards P2P exchange platforms due to such situations. They are looking for platforms that can nullify the ability of banks to shut down or dictate terms to cryptocurrency exchanges.

The Remitano P2P Exchange deals only with Bitcoin and leaves all banking related activities to the users so that the operation is not hindered by banks’ temper.

Remitano’s UI and friendly customer support is what further sets it apart from other existing exchange platforms. To ease the customer experience, Remitano also provides a live chat option to its users in case of any issue. In addition to that, the 0.5% fee charged by the platform is lower than the other major platforms in the market.

Remitano, according to traffic metrics, is the biggest Bitcoin exchange in Vietnam. Other leading sources of traffic on Remitano are Nigeria and Malaysia. The platform is aiming to establish itself as the largest Bitcoin exchange platform in other Asian and African countries. With the introduction of its service in the United States and Australia, Remitano platform is on an expansion spree, which it will pursue aggressively to build a global presence.