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Paxful Facing Accusations of Fraud in Nigeria After Suspending User Accounts

Peer-to-peer (P2P) payment logistics platform Paxful is under scrutiny after being accused of defrauding thousands of Nigerian clients of funds accumulated from online trade in digital currencies.

The company has gained popularity on the African continent, principally due to P2P becoming the preferred trading method and also the multitude of ways cryptocurrencies can be purchased on its platform. Unlike many other regions around the globe, cryptocurrencies such as Bitcoin have very little speculative value in Africa. With local currencies often struggling, cryptocurrencies are often simply used as payment for goods or transferring funds as a more viable and reliable alternative to local fiat.

However, all is not well according to the United Global Resolve for Peace, who has forwarded a claim to the Economic and Financial Crimes Commission that Estonian-based Paxful has suspended the accounts of Nigerian subscribers effectively barring them from access to their funds.

The petition claims that there is no evidence that the Nigerian clients have been involved in any illegal activity which might in some circumstances result in accounts being shut down:

“A few days ago, our organisation was approached by some Nigerians who complained bitterly that Paxful Incorporated, the company that owns the online cryptocurrency trading and exchange platform, ‘https://paxful.com’ has been ripping them of their life investment in cryptocurrency by suspending their accounts, deactivating their wallets and refusing to return the value in their accounts to them even after investigation and finding that they were not involved in any fraudulent activities.”

One victim, who suggested that the total of Nigerians now using the platform has risen to over three million, claims he approached Paxful Managing Director, Ray Youssef, after being denied access to his USD 60,000 balance only to be told that he had created a false profile online, a charge he denied.

In response to the claims Paxful states that it only shuts down accounts which are suspected of being used illegally, claiming:

“All accounts that have been shut down have a reason for it. We will not shut down any account unless they violate our TOS (Terms of Service).”

The Economic and Financial Crimes Commission has said that it intends to follow up the petition to investigate the fraud allegations against the company.

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Coming In from the Cold: The Old Soviet Union’s Crypto Mining Adventure

Coming In from the Cold_ The Old Soviet Union's Crypto Mining Adventure

Since the breakup of the Union of Soviet Socialist Republics commonly known as the Soviet Union on 26th December 1991, the map of Central Europe has been turned on its head.

With an area of 22,402,200 square kilometres (8,649,500 sq mi), the Soviet Union was the world’s largest country, a status that is still retained by the Russian Federation, covering a sixth of Earth’s land surface.

In 1991, countries that had been under Moscow’s one-party state rule between 1922 and 1991 were freed from centralized control and finally left to re-establish their own national identities. For Moscow this was often at odds with their own, causing volatile relationships with Georgia and Ukraine with disputed Crimea a continual flashpoint.

Ukraine, Uzbekistan, Kazakhstan, Belarus, Azerbaijan, Georgia, Tajikistan, Moldova, Kyrgyzstan, Lithuania, Turkmenistan, Armenia, Latvia, and Estonia all broke loose as the USSR crumbled in 1991 with Soviet communism in tatters.

The lengthy restructuring of many of these countries’ economies resulted in some re-joining another league of nations, this time the 28-member European Union.  Estonia, Latvia, and Lithuania took this route whilst others from the old USSR still chose, some reluctantly, to maintain their ties to Russia as part of their own unique plans of economic reconstruction.

Since the creation of Bitcoin in 2009, many economies have begun to look to cryptocurrencies as part of a restructuring of outmoded financial systems, with both governments and central banks exploring the adoption of cryptocurrency and blockchain technologies for retail and large-value payments.

Russia

The Russian government has even considered the prospect of a crypto rouble as a foil to US sanctions. President Putin stated earlier this year that Russia cannot be “late in the race” for blockchain adoption, which he says includes crypto mining arguing, “Russia cannot allow this.” The country’s cold climate has been a pull, as companies draw on this as an important feature for cutting down energy costs associated with the cooling needs of mining infrastructure.

Crypto mining in Russia has become a huge industry on an individual level, but more importantly for the government at an industrial scale also. This is now driving operators towards locally run Russian mining pools. The Russian Association of Crypto Industry and Blockchain (RACIB) claims that there are now over 400,000 people employed in the sector. 70,000 enterprises operate hundreds of thousands of mining rigs, with an increase in one-man operators working from their homes.

The fall in the value of cryptocurrencies has consequently had a recent effect on hardware pricing though, with rigs that might have sold for USD 3,500 in January 2018 now achieving prices some 37.5% less a year later as demand falls. Although small-scale mining by amateur miners is clearly being hit hard, companies are developing more financially viable ways of operating.

Siberia

Still in Russia, and renown for the Gulag where Stalin imprisoned political dissenters in appalling conditions between 1930 and 1945, the region’s freezing conditions in winter has become the crypto miner’s best friend. Siberia is fast becoming Russia’s mining hub with most activity centered around Irkutsk, 2600 miles east of Moscow with an average temperature of just one degree above freezing. In Irkutsk the cost of labour is low and real estate is cheap, giving miners an extra incentive for making the move to Russia’s wild frontier. The most significant boon to miners is the cost of electricity. On average in Russia, one pays nine cents per kWh versus 12.7 in the U.S.A and 25 in the U.K.

Bitcoin Babushkas: Cryptocurrency mining in Siberia

Latvia

Latvia has the crypto bug, but not necessarily the support it would want from its government, with the Latvian central bank maintaining a keep-away stance as its advice to customers. The Cryptocurrencies’ exponential growth in the Baltic country has generated increased interest from the government as potential tax revenue.

Ukraine

In the Ukraine capital, Kiev, such is the hype surrounding Bitcoin that a statue of the pseudonymous creator of Bitcoin was ordered for construction in the same location where a statue of Russian communist revolutionary Lenin, used to stand. In March, the Minister of Economic Development said the government was planning to include cryptocurrency mining into the official state register of economic activities.

Last year police department employees were caught mining cryptocurrencies using the department’s resources for over four months before they were discovered and their mining farm seized. This kind of enthusiasm illustrates the way many Ukrainians view crypto mining; as a quick fix to hardship.

Crypto mining has become a significant factor of cryptocurrency activity in Ukraine with a recorded USD 80 million invested in this area. However, Ukraine still hasn’t endorsed legislation to legalize cryptocurrencies despite increased activity in the country’s crypto space; legislation talks which are reported to be looking at blockchain and the storage and trading of cryptocurrencies are long awaited by exchanges and miners.

Estonia

Estonia even toyed briefly with launching its own cryptocurrency, the Estcoin, through the country’s e-residency program, but later shelved the idea. One reason for Estonia’s raised profile in the region is due to the country’s proximity to Russia, where the future of cryptocurrencies continues to be uncertain, despite Vladimir Putin’s recent comments on adopting a state crypto-rouble, according to Entrepreneur Europe. This makes neighboring states an attractive proposition for Russian investment.

Lithuania

Lithuania has recently become a growing center for ICOs and crypto projects. Latest figures show that Lithuania is now attracting an impressive 10% of all global ICO investments, with cryptocurrency bringing in half a billion euros from such activities.

Georgia

The greatest cryptocurrency success story of all has to be ex-soviet state Georgia which has now reached the lofty accolade of becoming the number two crypto mining location in the world. Wedged between two giant economies on the top ten mining charts, China and the US, Georgia has utilized cheap hydroelectricity and friendly regulations to create its current standing.  However, US company, BitFury controls most of the mining activity supported by the Georgian government through preferential tariffs and a waiver on the payment of value-added tax.

The poor economic conditions of the country, with many Georgians living below the national average of USD 400 a month, it is unsurprising that cryptocurrency mining has been identified by the fast money associated with digital currencies. Georgia is among several jurisdictions in the post-Soviet space that have been attracting crypto miners with friendly regulations and low operating costs. In terms of mining profitability, the country ranks second only to China.

Such is the demand for mining Bitcoin in the old Soviet region that the consumption of electricity has become a worry for some government regulators. In Abkhazia, recognized as an independent state by Russia, but part of Georgia by UN decree, the situation has become strained due to cryptocurrency mining. As a result, the Republic of Abkhazia has now cut power to some of the cryptocurrency mining farms in the region in order to conserve energy and as part of a series of “temporary measures to limit the consumption of electricity by certain categories of subscribers.”

Given that Bitcoin continues to hold its own on cryptocurrency markets, the future of many ex-Soviet nations is best approached from out in the cold.

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Estonia to Amend Recently Passed AML Law to Include Crypto Services

Estonia

A financial newspaper from Estonia, Äripäev reported that the local government is going to amend one of its recently passed financial bills to include crypto related clauses.

The new version of the Anti Money Laundering and Terrorist Financing Prevention Act will be going through these changes in less than a week of its passing. The amendment is being done to comply with European Union’s Fourth Money Laundering Prevention Directive. The original bill had initially mentioned tighter rules for “alternative means of payment service provider”. The alteration in the bill would replace it with “virtual currency exchange service providers” and “virtual currency payment service providers.”

The move, in accordance to EU’s policies, has been introduced after Estonian Financial Supervision Authority (FI) said that cryptocurrencies and platforms offering crypto services give undesirable elements the opportunity to conduct money laundering easily.

Estonia is a country known for being extremely crypto friendly, with a significant number of crypto platforms and services from around the world registering in its jurisdiction. It also recently dropped plans for a national cryptocurrency after European Union Bank’s president, Mario Draghi opposed the move.

The Estonian initiative to make regulations for cryptocurrencies is part of a global move by governments to control, or at least ensure, that decentralized digital currencies and asset providers are more diligent about who can use their services. This is largely due to concerns about terrorist and money laundering entities utilizing cryptos to avoid sanctions and restrictions.

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Estonia’s Own Private Bull Run Boasts 900 Crypto Firms in Less Than a Year

Bitcoin News has been following Estonia’s cryptocurrency march with some interest this year, and with over 900 licenses granted within the first year of the regulator’s initial registration ruling in that country, there seems to be no stopping its enthusiasm for the enterprise.

Estonia was one of the first jurisdictions in the EU to legislate cryptocurrencies and many companies are now doing business there. The Baltic region is fast becoming a northern crypto-paradise with Lithuania, Latvia, and Estonia all experiencing a recent economic boom. This has made Estonia a breeding ground for new startups.

Even its neighbor Latvia, though behind Estonia in cryptocurrency adoption, is beginning to make real inroads into developing a positive input to the industry. In March 2018, Latvia hosted an international discussion between industry experts on the future of fintech in the Baltics and the overall EU, which featured the vice-president of the European Commission Valdis Dombrovskis as keynote speaker.

But it’s Estonia breaking the records at present due to a progressive approach to cryptocurrency, despite the country abandoning its plans to introduce its own cryptocurrency after being warned by President of the European Central Bank Mario Draghi earlier this year.

500 licenses have been issued to date with over 400 wallet providers also being issued permission to operate. It appears that obtaining a license to operate a platform in Estonia is relatively simple according to Nikolay Demchuk from the law firm Njord which works in the sector. As Estonia operates under EU rules, the main emphasis on obtaining accreditation is complying with local and EU rules. Businesses applying also need to prove that they can operate with adequate KYC and AML protection.

Approval only takes about two weeks and are issued by the local regulator, the Estonian Financial Intelligence Unit (FIU), but companies must begin operating within six months of receiving their licenses under the pressure of losing them.

The biggest drawback in Estonia concerns banking as there is still a reluctance among the country’s banking community to provide services to cryptocurrency exchanges. However, the e-residency program, introduced in 2014, allows non-Estonians access to Estonian services such as company formation, banking, payment processing, and taxation. The program also allows anyone in the world to apply for a digital ID card and gain access to Estonian e-services when planning to start a company in the country.

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Blockchain Voting May Be Only Route to Accuracy at the Polls

Paper-based voting is beginning to have its detractors, despite an African politician’s recent animosity towards electronic-based counting techniques planned for the polls in the lead up to Congo’s General Election in December.

Blockchain is being tested in all areas and voting is a field where it could have a significant impact, improving on some existing electronic methods which have been introduced in some regions to provide speed and clarity to the process of electing a government, council or simply making some changes to civic laws.

As the US administration still hedges its bets that things will blow over regarding accusations of Russian interference in the process which led to president Trump’s election, nations around the globe are looking for ways to add far more transparency to the end product of electioneering.

The US has already trialed blockchain voting technology. West Virginia trialed it in this year’s mid-term Senate elections, while the labs in Switzerland’s Crypto Valley experimented with eID, a system designed to allow residents to vote electronically on civic matters. In Indonesia, a country with a 20-year history of vote rigging, an Australian blockchain company is currently working on a digital ballot box based on blockchain to solve this problem, after initial trials in Sumatra.

Estonia in Eastern Europe has been far ahead of the rest, using electronic voting in its elections since 2005 with 30.5% of all votes in their 2015 parliamentary elections cast through the country’s i-voting system. Japan has taken things further by trialing electronic voting with the secure backing of a DLT-based system using ID swipe cards, which are then encrypted.

While electronic voting is a step forward, it isn’t infallible unless backed by DLT. One non-DLT electronic voting system used only in Virginia recently subtracted one vote for every 100 cast. Another used in 23 US states had an unpatched vulnerability for over 11 years.

Congo’s upcoming election to replace President Joseph Kabila after 17 years as the country’s leader is already running into problems due to electronic voting before a vote has even been cast. The introduction of this form of voting and the government’s exclusion of a number of candidates from the ballot has enraged opposition parties. The introduction of tablet devices for the purpose of casting votes has provoked accusations that the machines are even more vulnerable to vote-rigging than paper and that Congo’s poor power supply could cause systems to fail during the election.

“They are not voting machines they are cheating machines,” argues opposition leader Jean-Pierre Bemba. “They are not reliable, too slow and there are 10 million fake voters who have already been registered. We, the opposition, have united to say no to the machines.”

According to followmyvote.com, who are attempting to build an online voting platform using blockchain tech, DLT is the only accurate and truly transparent way of reflecting the will of the people precisely and without error, suggesting on their website: “This way, everyone can agree on the final count because they can count the votes themselves, and because of the blockchain audit trail, they can verify that no votes were changed or removed, and no illegitimate votes were added.”

In the words of Joseph Stalin, perhaps one of recent history’s most infamous manipulators:

“It is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything.”

 

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Latest Report Shows US at Top of Most Favorable Countries for ICOs

The US has been ranked as the “most favorable” country for Initial Coin offerings (ICOs) according to a recent report linked to the Crypto Finance Conference, writes Cointelegraph.

According to the report, figures show that the US has seen 30 crypto start-ups launched, along with Switzerland and Singapore in the top three with 15 and 11 project launches respectively. The data was compiled by examining 100 ICO’s worldwide in terms of fundraising and designating their countries of origin.

The report also identified Russia, the UK, and Estonia as good locations for startup fundraising industry. Many crypto companies are now doing business in Estonia with Lithuania and Latvia, also experiencing an economic boom recently. Estonia’s widespread adoption of cryptocurrencies and fintech has become a breeding ground for new startups.

The start-up frenzy reached it hiatus in March of this year with $2.94 being raised in one month, although as many as 1000 cryptocurrencies have gone to the wall on the back of Bitcoin’s recent declining fortunes this year. The good news for the industry is the doubling of 2017’s start-ups in just the first half of 2018.

Second place Switzerland on the ICO report seems to be going from strength to strength with regulators attempts to support mainstream use, and startups in Crypto Valley are thriving as a result. Another step along that road has been the recent announcement that the country’s stock exchange, SIX, will open its doors to digital currencies.

Third place Singapore continues to deal with regulatory issues as it grows as an Asian start-up hub. Singapore, always at the forefront of technological advancement saw startup Tangem release its own version of a physical bitcoin banknote recently.

The US, in top place in the recent report in the ICO popularity stakes, continues to focus its attention on regulating the industry, particularly at State level. New major mining projects are making use of past defunct industry locations and making new homes in such installations, replacing steel for the cryptocurrency as the states attempt to integrate crypto into existing tax legislation.

Arizona is one of many states regulating ICO’s with a view to paving the way for regulatory framework for initial coin offerings (ICOs) in the state, although earlier this year both New Hampshire and the state of Georgia failed to pass a bill that was to require the state to accept cryptocurrencies for payment of taxes and license fees.

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Which Countries Are Most Likely to Adopt Bitcoin First?

Bitcoin replacing a country’s government currency would be a huge achievement for cryptocurrency as well as a historical milestone. But which countries are most likely to adopt such a nascent currency?

One of the biggest drivers for adopting a cryptocurrency would be necessity. Countries where citizens experience hyperinflation, political instability, or other factors that shake confidence in a government currency typically see higher demand in alternative currencies like Bitcoin.

Countries possibly adopting Bitcoin on a major scale, for this reason, would be Iran, Venezuela and Argentina, to name a few.

Iran has made headlines with plans to withdraw EUR 300 million from German banks. Rising tension since 2015, when the US left the Nuclear Agreement, has only amplified with Trump entering the presidency.

The tension has only weakened confidence in the Iranian rial, leading to higher than market prices within Iran borders. Couple this with the US sanctions placed restricting liquidity and hyperinflation of 112%, and Bitcoin easily becomes the currency of choice for Iranian citizens.

While rial’s hyperinflation will lead to holders of the currency losing more than half of their value, this is nothing compared to Venezuela’s economic crisis.

A year ago, a cup of coffee in Venezuela was 2,200 Venezuelan bolivar (VEF), or around USD 0.20. Since then, inflation has been rampant, causing that same cup to be sold at VEF 1,400,000, for an effective annual inflation rate above 60,000%.

This has led to an extreme demand for the cryptocurrency; peer-to-peer exchange Localbitcoins shows Venezuela traders selling Bitcoin at rates of VEF 9 billion (USD 75,000) to VEF 19.5 Billion (USD 158,531). Despite these massive premiums and the cryptocurrency experiencing a correction of its own, Bitcoin is still a more attractive option than the fiat currency.

Such an extreme devaluation of the currency makes Venezuela a prime country to embrace Bitcoin wholeheartedly.

Argentina is in a similar situation and currently has the higher interest rate in the world (40%). Continually rising prices coupled with increasing unemployment rates makes Bitcoin a viable currency in this case, over the Argentine peso.

Cashless societies could also be primed for a crypto take over but cryptocurrency needs a lot of refinement before this could become a reality.

Contactless payment methods are already very convenient and with credit cards, even offer cashback rewards and customer protection. For cryptocurrency to penetrate markets like Canada, Sweden and the UK, digital currencies must not only offer similar characteristics but be much better than existing systems.

A good scaling solution needs to put in place as well, in order for Bitcoin (or whatever cryptocurrency a society adopts) to handle the number of transactions.

The third set of countries likely to adopt Bitcoin are the ones that are already open to cryptocurrency-related businesses, regulatory wise.

Countries that fall into this category include Japan, Estonia, Singapore, Australia, and South Korea. Sweden also goes into this category because despite its cashless society, recognizing Bitcoin as a legal form of payment.

Countries that are Bitcoin-friendly will typically have a higher percentage of citizens already exposed and actively using the cryptocurrency, making it far easier for Bitcoin to become widespread.

Being on welcoming turf also allows companies to come in and introduce new use case scenarios for the cryptocurrency, thus improving Bitcoin’s penetration rates.

Bitcoin is a fairly new currency and as more people begin to understand and classify it, more countries will become more receptive to the decentralized money. It will be interesting to see which country becomes to adopt Bitcoin as a dominant currency and if it’s from necessity, convenience or another reasons.

 

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Bitcoin is ‘Back in the USSR’

Russia’s launch of its first crypto investment bank is the hot news from Eastern Europe’s sleeping bear, but how is the old USSR and the rest of the eastern bloc holding up in the charge to regulate the nascent industry in the region?

In the Ukraine capital, Kiev, plans are underway to site a statue of the pseudonymous creator of Bitcoin, Satoshi Nakamoto, in the same location where a statue of Russian communist revolutionary Lenin, used to stand. This appears to augur well for the bitcoin community… or does it?

Things are changing since ex-President Victor Yanukovich created his own cryptocurrency oligarchy; the pro- Russian leader is now exiled in Russia and wanted in his home county for high treason. Today, according to businessman Michael Chobanian, who opened the first Ukraine exchange offering national currency hryvnia for Bitcoin: “Ukraine is a haven for cryptocurrency – no one can or will stop you.”

His comments don’t exactly ring true in light of recent swoops by state security forces on Kvazar semiconductor plant in Kiev, where a large mining operation was located. This, a month after armed men from Ukraine’s Security Service broke into the Odessa offices of ForkLog, a major Russian-language crypto news site, and seized its computers and hard drives.

In an attempt to start a dialogue on cryptocurrency, Alexei Mushak, a member of the Ukrainian parliament, has sought to urge the people to comment on Bitcoin, taking to Facebook to do so recently, stating:

“We go to the home stretch to create conditions for digital tokens and cryptocurrency in Ukraine. This is the outcome of many meetings and work of many people. There are many more nuances left to figure out…”

Cryptocurrency regulation in Ukraine remains a work in progress, despite the National Bank of Ukraine (NBU) stating that it was “considering” introducing a digital version of the hryvnia earlier this year.

Ukraine’s northern neighbor Belarus has taken what appears to be a sensible approach to a difficult problem in some of the old USSR states. Both blockchain and cryptocurrency related business activities are legislated under the law in Belarus. Mining and exchanges are not regarded as business activities and consequently are not subject to taxation. In fact, the great news for crypto investors is they are not required to declare crypto income until 2023.

Traveling through the old USSR even further north, Estonia even toyed briefly with launching its own cryptocurrency, the Estcoin, through the country’s e-residency program, but later shelved the idea.

The e-residency program, introduced in 2014, allows non-Estonians access to national services such as company formation, banking, payment processing, and taxation. The program also allows anyone in the world to apply for a digital ID card and gain access to Estonian e-services when planning to start a company in the country.

Many crypto companies are now doing business in Estonia and the Baltic region is becoming a “Northern crypto-paradise” along with Lithuania and Latvia, both also experiencing an economic boom recently. Estonia’s widespread adoption of cryptocurrencies and fintech has, therefore, become a breeding ground for new startups.

Latvia has the crypto bug, but not necessarily the support it would want from its government, with the Latvian central bank maintaining a keep away stance as its advice to customers.

Latvia currently levies a 20% capital gains tax, and applying it to cryptocurrency would reportedly require a change in the country’s tax laws. Currently, cryptocurrencies are not recognized under existing legislation. However, its exponential growth in the Baltic country has generated an increased interest from the government as a potential tax revenue.

Lithuania has recently become a growing center for ICOs and crypto projects. Latest figures show that Lithuania is now attracting an impressive 10% of all global ICO investments, with cryptocurrency bringing in half a billion euros from such activities.

 

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Latvia Joins Baltic Neighbor Estonia to Drive Fintech and Blockchain Charge

The Baltic state of Latvia may be a fledgling in terms of fintech development but it is beginning to make real inroads into developing the space, writes Fintech Switzerland.

Fintech has a rapidly growing footprint in the startup scene and cryptocurrency interest is growing despite government’s uncertainty regarding regulations in the sector.

Latvia currently levies a 20% capital gains tax, and applying it to cryptocurrency would reportedly require a change in the country’s tax laws. Currently, cryptocurrencies are not recognized under existing legislation. However, its exponential growth in the Baltic country has generated an increased interest from the government as a potential tax revenue.

Latvia is still lagging behind its crypto-friendly neighbor Estonia, which is beginning to attract outside companies due to its innovative and vibrant crypto community. Estonia has a significant internet penetration and has recently considered its own national token, the Estcoin, although it later rejected the proposal for a CBDC.

However, Latvia is well networked, occupying the third position in the OECD with its fast fiber-optic broadband and has several government programs active after launching the introduction of a startup visa in 2017. This change to legislation introduced new tax laws which effectively doubled venture capital investors’ money for new companies.

Along with an EUR 15 million hand out to seed investments and several conferences held in Latvia’s capital Riga every year, the fintech space is catching up with its neighbors. The Latvian Startup Association also promotes new business in the country, although with such a small market and a population of 2 million, business is increasingly searching for new overseas markets.

In March 2018, Latvia hosted an international discussion between industry experts on the future of fintech in the Baltics and the overall EU, which featured the vice-president of the European Commission, Valdis Dombrovskis, as keynote speaker.

European fintech platform and community B-Hive recently released a research paper showing that the most developed technological area in the country’s economy is now fintech with a startup industry worth USD 878 million, with blockchain technology a contributing factor.

 

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Unique Trading Fee Models Emerge as Exchanges Compete

As exchanges fight for space in a proliferating sector, newer exchanges are implementing alternatives to fee-based trading to attract traders. Current leaders like Binance offer lowered fees when trading using its own native digital tokens, while others like CoinBene and Bit-Z have introduced a “transaction fee mining” concept that generates new cryptocurrency by trading.

Estonia-based DX cryptocurrency exchange won’t be launching until July 2018, but has already pre-registered 500,000 users. It is attracting so much interest because it offers a unique subscription model where traders pay EUR 10 monthly and then can trade EUR 50,000 without any further fees.

DX says it has attracted institutional investors and brokers since it is officially licensed by Estonia’s Ministry of Economic Affairs and Communications. Additionally, it has forged a partnership with global stock trading powerhouse Nasdaq.

CEO of DX, Daniel Skowronski, says money managers have been in talks with DX to use it as a cryptocurrency custodial service, expected to pave the way for large amounts of money to enter the cryptocurrency markets from institutional investment.

Typical exchanges charge at least 0.25% per cryptocurrency trade. At that rate, EUR 50,000 of trades would cost EUR 125 of fees. Therefore, a subscription-based model makes it very attractive for cryptocurrency traders. Institutional investors often trade much higher amounts in excess of EUR 100,000 per trade though, and it is unclear what the fees will be for such trades.

DX says it will be integrating Nasdaq’s matching engine to process trades, and although this is unconfirmed by Nasdaq itself, it wouldn’t be the first time Nasdaq has licensed its technology for use on a cryptocurrency exchange. For example, major US cryptocurrency exchange Gemini uses Nasdaq technology to prevent fraud and market manipulation.

 

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