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Billionaire VC Tim Draper Busts a Crypto Rhyme at Amsterdam Conference

Billionaire Venture Capitalist and crypto pundit Tim Draper is never far from the news, and as such has lived up to expectations with an on-stage interview and impromptu rap at a recent Dutch tech conference, reports Bloomberg.

His way out of tune crypto rap at the TNW Conference Europe 2018 Tech Conference at Westerpark in Amsterdam followed an on-stage interview. Sporting a bitcoin adorned purple tie he launched into his 3-minute rap to a bemused audience, singing:

“We want a new world order/we want to pay across the border,” the chorus went. “I just wanna be a Hodler on my Bitcoin hustle.”

Prior to his stage “performance,” he continued to promote bitcoin in typical Draper fashion ignoring the market’s current downturn. In an interview at the “Next Web” conference, he stuck to his recent position of bitcoin reaching $250,000 by 2022, suggesting that the market will regroup once the current halt on spending increases.

Draper has always backed Bitcoin since 2014, when he bought about 30,000 Bitcoins from a U.S. government auction, since investing in blockchain startups, including Tezos and Bancor. As such he has never been shy of interviews and predictions. His most recent, reported by CNBC, claimed bitcoin could be bigger than the internet, claiming.

”It’s bigger than the Iron Age, the Renaissance. It’s bigger than the Industrial Revolution. This affects the entire world and it’s going to be affected in a faster and more prevalent way than you ever imagined.”

Soundbites are very much the Draper style, a more recent claim from last month suggested:

“In five years you’re going to walk in and try and pay fiat for a Starbucks coffee, and the barista is going to laugh at you because they’re going to say, “What is this? Are you counting out pennies? Give me shells?”

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Bank of Spain’s Governor Calls Crypto “Spurious Novelties” but Govt Sees Potential

Luis Maria Linde, Banco de Espana governor, said in a recent speech that cryptocurrencies presented more risk than they did benefits, although blockchain technology could improve efficiency and costs, according to Coindesk.

The comments made during a recent speech organized by multinational professional services firm Deloitte referred to cryptocurrency tokens as “those spurious novelties that do not provide significant improvements and that should be tackled as soon as possible”.

Spain’s stance on cryptocurrency is heavily nuanced towards regulation. A recent investigation implemented by the National Office of Fraud Investigation (ONIF) has passed data on the Spanish Treasury which will attempt to enforce new requirements regarding cryptocurrency payments, writes the Daily Express.

Under the plan, 16 financial institutions based in Spain will be required to pass on their information to the ONIF in relation to overseas accounts.

In his speech, Linde did concede that digitalization could offer interesting possibilities as could blockchain technology, providing that underlying technology is “well used and managed”. However, he signaled that:

“….the move to a more digital economy is accompanied by greater cyber threats and it is necessary to develop new measures to protect processes, assets and customer data.”

Like countless other countries at present, the Spanish government is continually referring back to the misuse of cryptocurrency such as organized crime and fraud and regulating in order to address the issues, often ignoring the underlying advantages. In Spain, this is very much the case and cryptocurrencies such as Bitcoin are not recognized as legal tender.

However, of late, despite the comments of Governor Linde regarding cryptocurrency, there have been attempts to create more flexibility in the space, including Prime Minister Mariano Rajoy’s consideration of possible tax breaks to attract blockchain investments. Registered funds can now theoretically invest in cryptocurrency under law 22/2014 passed by Spain’s National Securities Market Commission (CNMV – Comisión Nacional del Mercado de Valores).

According to lawmaker Teodoro Garcia Egea, it is in Spain’s national interest to attract blockchain companies to the country, as they can inject new life into areas such as health, finance, and education, writes UTB.

Rajoy’s Peoples Party is now considering government regulations which will enable businesses to use blockchain technology and carry out coin offerings in the light of its benefits to these areas.

 

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“Krypto” Fights Back After Polish Government Attack on Crypto

The Polish crypto community has responded to a government-backed social media campaign against cryptocurrency with a video of their own.

On 6 May, crypto enthusiast Piotr Pacewicz screen wrote and directed ‘Krypto’, a short piece outlining the facts about cryptocurrency and blockchain. The video was produced by a small film company with the aim to “educate, educate and educate. Because [almost] no one knows the fundamentals about Bitcoin and blockchain,” explained Pacewicz.

The video was a direct response to a perceived campaign of casting fear, uncertainty, and doubt over the cryptocurrency in the country. It has been stepped up this month by the government’s latest plan to promote a social media campaign against digital currency, according to Cointelegraph.

The Polish Financial Supervision Authority (KNF) held a tender order on 10 May costing around USD 170,000 to disseminate the risks of cryptocurrency trading. This is the second of its kind recently; the last one in February of this year, this time commissioned by Poland’s Central Bank, in which anti-crypto video was produced for the sum of about USD 25,000 or PLZ 91,000 (Polish zloty).

The video, produced in partnership with Polish YouTube partner Gamellon, Google Ireland, and Facebook Ireland titled “I lost all the money” credited no endorsements to the government sponsorship or its co-sponsors. The film illustrated the rise and fall scenario of a Polish blogger who ends up fishing for fiat coins out of a public fountain after losing his newly-acquired wealth on crypto dealing.

Although Poland recognizes cryptocurrency trading, the trend is generally negative, including the recent dismissal of Anna Streżyńska, the former crypto-friendly minister of digital affairs.

The current situation seems to be, apply pressure on the crypto space until the public respond. Such was the case earlier this month when the government announced lifting income tax after an immediate public response through a Change.org petition, which gained over 5,000 signatures asking for tax exemption for crypto technology dealings.

Polish journalist and YouTube blogger Karol Paciorek, spoke out against the video release:

“There was a product placement deal between NBP and three large YouTube channels: Marcin Dubiel – 937,000 subscribers; Wiśnia – 818,000 subscribers; and Planeta Faktów – 1 mln subscribers. It’s an educational campaign paid from a government-based organization. Someone asked NBP how much they have paid for the campaign and got an answer.”

Jacek Walenski, the secretary of the Polish Bitcoin Association (PBA) branded the video as “unprofessional and stupid”, but doubts if it had the impact desired by the Central bank of Poland. Bitpay, Poland’s largest cryptocurrency platform, reported no loss of clientele after the video’s airing on YouTube.

Krypto‘s director says that the film is a “brick [for building] a better world, [one] with a financial system where everybody is equal”. At the time of publication, Krypto has just over 23,000 views on YouTube.

 

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James Rodriguez Launches JR10 Coin in Wave of Superstar Crypto Endorsements

James Rodriguez, an icon of Colombian football commonly known as James, has announced that he is partnering with SelfSell to launch his own crypto token called the JR10, reports USA Today.

The launch of the JR token, so named after his number 10 position in the Columbian squad, will elevate him to being the first active international player to move into crypto space through the launching of his own asset.

In next month’s World Cup in Russia, James, who also plays for German club Bayern München, will lead a Columbian squad competing against group members Japan, Senegal, and Poland.

Rodriguez is not the first footballer to embrace the blockchain space following Barcelona and Argentina star Lionel Messi’s recent affiliation with Sirin Labs who have marketed a blockchain smartphone with the superstar’s endorsement. Michael Owen, ex Liverpool and England International, also recently unveiled his merchandising, Owen Coin, supported by the Singapore-based Global Crypto Offering Exchange (GCOX).

The exchange scored another coup in March, this time signing a boxer to promote the exchange. Philippines Senator, Manny Pacquiao, better known for being the only eight-division world boxing champion, invested in the company which specializes in allowing celebrities to create their own digital currencies.

Sportsmen joining other crypto-crazy celebrities dipping their toes into fintech water include Jamie Foxx, Paris Hilton, football superstar Luis Suarez, rapper The Game, and stand-up comedian Kevin Hart and Canadian two-time speed skating world record holder Ted-Jan Bloemen who became the first cryptocurrency-sponsored athlete, according to Cryptovest.

The most notable event this year was American Boxer Floyd Mayweather’s endorsement of blockchain firm Stox to 16 million Instagram followers raising USD 33 million in 34 hours. This resulted in charges being made against the company by the US Securities and Exchange Commission (SEC) over allegations that the (ICO) was a fraudulent activity.

Rodriguez claimed that he will be involved in a range of activities following the launch including interacting with his fans, suggesting that the coin can be used to “become a new engine to grow the global football market”.

 

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Deutsche Boerse Becomes Second German Stock Exchange Embracing Crypto

Deutsche Boerse, the owner of the Frankfurt Stock Exchange, is evaluating whether to offer cryptocurrency products, according to Bloomberg.

If this is the case, this will be the second German stock exchange to make announcements this year regarding a move towards the adoption of cryptocurrency related products, after Boerse Stuttgart Digital Adventures announced the release of its Bison app in April.

Jeffrey Tellsler, Deutsche Boerse’s head of clients products and core markets, spoke to an industry event in London organized by the Association for Financial Markets in Europe on Wednesday suggesting that the company was “deep at work with it”. Tellsler went on to comment:

“Before we move forward with anything like Bitcoin we want to make sure we understand the underlying transaction which isn’t the easiest thing to do.”

The company’s rivals in the US, Cboe Global Markets Inc and CME Group Inc, became involved in Bitcoin futures last November, and due to regional regulation, no European company had been able to follow suit until this latest move, although he did admit that as yet Boerse Deutsche wasn’t at the same level.

Germany, along with France who is more supportive of ICOs, has been vocal within the EU in supporting blockchain technology and has joined 21 other countries in supporting initiatives with the aim of reinforcing local innovation.

Last June, Deutsche Boerse revealed a plan to move the majority of its post-trade services to a blockchain, using Hyperledger’s open-source Fabric protocol to transfer securities and move commercial bank money.

The firm is clearly moving into the crypto space arena with some urgency, following its announcement in March of a securities lending platform using R3’s Corda blockchain technology. Tellsler explained that before they could proceed, the firm needed to ensure that they understood the volatility of the Bitcoin market, and made sure clients and regulators were in line before moving forward.

In a recent Sowa Labs survey of 1,019 German crypto traders, 16.9% owned a single cryptocurrency, while 18.2% confessed to owning several. Of the respondents, 81% were male, 19% were female, and 54% were 35 years old or younger. More than 80% of respondents opened their first trading account from 2017 onward.

 

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Over $1 Billion in Crypto Stolen Since 2017

Recent reports from the Anti-Phishing Working Group (APWG) show that USD 1.2 billion in cryptocurrencies has been stolen since the beginning of 2017. Less than 20% of the stolen funds have been recovered.

Bitcoin received a massive influx of popularity in 2017 due to price increases up to USD 20,000, which has brought attention to this sector. Over 1,500 alternative cryptocurrencies have emerged as well, with some of the biggest thefts coming from altcoins.

“One problem that we’re seeing in addition to the criminal activity like drug trafficking and money laundering using cryptocurrencies is the theft of these tokens by bad guys,” Dave Jevans, CEO of cryptocurrency security firm CipherTrace, told Reuters in an interview.

Ethereum alone has seen millions lost in hacks. The Ether stolen from the DAO hack would now be worth USD 2 billion but was an event in 2016. Even so, the Ethereum community went through many hardships in 2017 due to Parity hacks.

Also Read: New EU Privacy Laws Brings Parity’s PICOPs to a Halt

Despite the massive losses, Bitcoin has taken quite a beating as well. Last year saw Nicehash being hacked and many users are still experiencing the aftermath of Bitfinex and Mt Gox.

But NEM takes the cake with the Coincheck hack earlier this year, which saw USD 500 million worth of the tokens being stolen from a Japanese exchange.

The EU’s new GDPR will make it harder for Bitcoin companies to function in the future, and will also enable further thefts and hackings in the future Jevans said.

“GDPR will negatively impact the overall security of the internet and will also inadvertently aid cybercriminals,” said Mr Jevans. “By restricting access to critical information, the new law will significantly hinder investigations into cybercrime, cryptocurrency theft, phishing, ransomware, malware, fraud and crypto-jacking,” he added.

The chairman for APWG predicts more cybercriminals will move to Europe and exploit GDPR. Many cryptocurrency projects are based in Europe, due to the United States’ strict and sometimes ambiguous regulations regarding crypto. This makes them easy targets for hackers, due to proximity to servers.

 

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US Department of Justice Opens Criminal Case into Bitcoin Price Manipulations

The US Department of Justice (DOJ) has opened a criminal investigation into whether traders are manipulating the price of Bitcoin and other cryptocurrencies, according to a report published Thursday by Bloomberg.

The most notable concern coming from the DOJ relates to a suspected potential that the volatility of the market creates an opportunity for investors to push price valuations in a way to favor themselves.

Additionally, authorities feel cryptocurrencies are particularly susceptible to fraud due to a concern over the lack of regulations, as well as skepticism that every exchange actively pursues those deceiving the rules of the platform.

Spoofing and wash trading

People familiar with the situation told Bloomberg that the DOJ is specifically looking into spoofing and wash trading from colluding traders. These two illicit tactics are forms of market cheating that have been combated by regulators in the futures and equity markets for years.

Spoofing involves a trader submitting a number of orders, then cancelling them once they are satisfied they have affected the prices enough in the desired direction.

Wash trading involves a cheater creating trades with themselves to create a false impression of market movements, which influences others to move in a specific way.

It was reported that both Bitcoin and Ether are being investigated for this, but the DOJ declined to comment on the case at Bloomberg’s request.

Protecting investors

After a Bitcoin price surge last year spanning between USD 1,000 and USD 20,000, the cryptocurrency industry has found a host of new supporters and investors. The number of ICOs has also skyrocketed, with a growing number of people aware and involved with altcoins.

Regulators across the globe are now seeing the industry as a growing concern, as investors enter the market without a clear understanding of what cryptocurrencies are, and the risks involved.

Cryptocurrency exchange platforms operate internationally, with many remaining unregistered with any government agencies, leading to a heightened fear of fraudulent activities in general.

Of course, the vast majority of platforms maintain there own strict security measures to protect users and are willing to pursue fraudsters, if not only to protect their own reputation.

 

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Economic Savant Martin Weiss Claims Crypto Safer Than Banks

Martin D Weiss, founder of Weiss Ratings Agency has made new predictions concerning proposed legislation aimed at making changes to the Volcker Rule, according to Weiss  Cryptocurrency Ratings.

Next week, US Congress is expected to move towards changing parts of the Dodd-Franks Law, known as the Volcker Rule, writes the New York Times.  The bill, aimed at watering down the legislation named after American economist and former US Federal Reserve Chairman Paul Volcker, would allow thousands of small and mid-size banks to avoid tougher oversight.

Similar legislation has already been passed by the Senate which will allow President Trump to amend the law if the new amendment is passed. The US president also signed a law on Monday nullifying a consumer rule intended to prevent discrimination in auto lending.

The Volcker Rule refers to a part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, originally proposed by Paul Volcker in order to restrict United States banks from making certain kinds of speculative investments that do not benefit their customers.

According to Weiss, this will open the door for banks to take the kind of risks and trade the same sorts of assets which helped lead to the 2008 financial crisis, predicting that if the bill were passed, and the amendments come into law, investors would be compelled to move their money away from traditional banking.

Weiss suggests that this is the worst possible time for such a change in legislation, with risk-taking reaching new levels. He cites the JPMorgan Chase index as an example which has revealed that the debt of American companies has just posted one of their worst 100-day returns since 2000.

Weiss reflects on the apparent short memories of the US banking community, given the events of the global banking crisis when financial institutions helped create a historic speculative bubble in real estate, mortgages and mortgage-backed securities. Rich rewards were available for those banks and insurance companies prepared to take excessive risks.

In view of a revisit to the 2000s and a financial meltdown, Weiss suggests that banks will become once again unsound. He compares the bankless economy of many in the Third World who shun banks, often due to the corruption that comes hand in hand with institutionalized local banking, to the sound man’s thinking, “Better to park your money under the mattress or some equivalent”.

Weiss argues that “cryptocurrencies do such a fundamentally better job as a safe depository, it’s difficult to envision a world in which this technology does not become a game-changer for money and banking,” and adds a reminder that Bitcoin was invented in direct response to global government bailouts.

“This is why Satoshi Nakamoto, the inventor of Bitcoin, wrote on the very first Bitcoin block: ‘The time is 03/Jan/2009. Chancellor on brink of the second bailout for banks’,” he adds.

“At the very core of its design stands this one guiding principle: Everyone should own their money directly. Everyone should trade directly with whomever they please. No third party, no custody, no trust in a central authority.”

Weiss suggests there are two clear reasons why he thinks that Bitcoin hasn’t been more widely adopted today. Volatility remains an issue, which he feels will stabilize in time as liquidity grows, and a general lack of knowledge and information about the space, and “even fewer understand the advantages of cryptocurrencies in a wallet over money in a bank”.

 

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Crypto Skeptic India May Apply Tax Laws on Crypto in Possible Turning Point

Anonymous sources in India are suggesting that the crypto-sceptical nation may be at a turning point with the possibility of a goods and service tax (GST) on cryptocurrency trading.

Bloomberg reported that the government might be applying an 18% GST as there is a chance that the Indian government could classify cryptocurrencies as a supply of “intangible goods” and, therefore, making them subject to the tax levy with separate laws to be introduced that address the use of cryptocurrencies for illicit activities.

The proposal is reportedly being considered by Central Board of Indirect Taxes and Customs which, according to the anonymous source, will be presented before the GST council one it is finalized.

The source makes the case that the income tax department had realized critical nature of taxing digital currencies sooner than later. This is due to the digital asset markets growth which can build up significant liabilities, making recovery difficult in the future.

Early turbulence

The news is oddly contrasting with previous reports that have emerged from India, with April a particularly turbulent period. Earlier in the month, Bitcoin News reported that the Reserve Bank of India (RBI) was prohibiting all banks and financial entities from “facilitating transactions involving cryptocurrencies”, a move that sparked a petition that received 17,000 signatures, backed mostly by younger users who were employed in the blockchain industry.

Bitcoin bull Tim Draper chimed in during the April maelstrom, suggesting that the Indian government’s prohibitions against cryptocurrency would be “stifling innovation”. With that said, in May, Bitcoin News reported that despite the clampdowns, India has a wealth of crypto-savvy software developers that are more than capable of pushing innovation in the country. A study made by Indian HR company, Belong, brought to light the 5,000-strong developers who could drive the industry forward for India.

Efforts to create the taxation and regulatory frameworks were underway in late March when the largest tax filing platform began making inroads toward building appropriate regulations; the attempt to clarify cryptocurrency laws came shortly after exchanges and cryptocurrency traders came under significant pressures from the RBI and other banks.

Tackling cynicism

The decision to apply the taxation laws on cryptocurrencies hinges largely on the outcomes of the ongoing regulatory efforts being made by the department of economic affairs. Indian crypto exchanges believe a complete ban would be “futile” as the RBI not allowing for banks to transact with them would force buyers and sellers to other means of settling trades. This could contribute to illegal activities and, therefore, cause the ban to come down even harder on the industry.

Treating cryptocurrencies as goods and services may allow for the undeniably lucrative market to stay in force in India. Classifying them as currencies, however, would require changes in the law.

Should a positive consensus be reached through the appropriate classification, taxation and consequently, regulation standards, then India could soon follow in the footsteps of other countries embracing the technology.

 

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Bank of England on Crypto: Not If, but When

The Bank of England (BoE) has published recent findings for central bank digital currencies (CBDCs) that indicate such a government-issued currency is no longer a possibility, but an inevitability.

The BoE’s recent findings suggest that a CBDC is entirely feasible and can be introduced with a minimum of risk, although it is unclear exactly what form it will finally take, once commercial banks are forced to adopt a new system.

In line with several countries around the world, the BoE is beginning to examine the credentials of a CBDC in order to streamline its banking procedures, enabling funds to be expedited quickly and efficiency, updating outmoded banking systems.

The possibility of a government-issued cryptocurrency being not too distant is not that surprising, given the current mood at top levels of government in the UK. A ‘Cryptoassets Task Force’ is currently underway to examine the space to see if it can become a feature of the UK financial environment. British Chancellor Philip Hammond recently launched a task force to help safeguard consumers which include representatives from the Treasury, the BoE and financial watchdog FCA. He said the taskforce would help the UK “manage the risks around crypto-assets”.

Such calls for regulation were also made recently by the Governor of the BoE, Mark Carney, when he discussed the impact of cryptocurrencies’ core technology indicating that he was not against innovation provided by cryptocurrencies, stating that regulation could potentially “serve the public better”. This following his comments that cryptocurrency “had pretty much failed” as a source of money.

Three models suggested

The Financial Institution Model (Model F1) is a system where only financial institutions will be able to access the CBDC. The report suggests this is a safe approach offering a stable approach to banking, reports Finder.

The Economy-Wide Model (Model EW) where financial institutions can directly access CBDC, and businesses and households can access CBDC through financial institutions. Under this model, all banks, non-bank financial institutions (NBFIs), CBDC exchanges, households and businesses can have a CBDC account at the central bank itself. But only banks, NBFIs and CBDC exchanges can trade CBDC directly with the central bank. Households and firms can go through the exchanges, which might be standalone entities or banks/NBFIs, to convert deposits between CBDC and pounds.

The Narrow Bank Model (Model FI+). A system where financial institutions can access CBDC, and then use a spin-off “indirect CBDC” (iCBDC) for its business and household customers. This system is designed to include CBDC as the actual central bank money, and iCBDC as the connected digital currency that people interact with on a day-to-day basis.

The main question being asked now that the bank has made these significant moves towards a CBDC is what kind of currency will emerge. Will it be a digital currency for all to streamline the population’s everyday banking needs or will it simply be an instrument with which banks can save costs?

 

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