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Ukraine Pursues Crypto Tax Bill

Ukraine is looking to pass a bill that would tax both cryptocurrency operations and assets, according to a draft version of the laws shared by the country’s parliament, the Verkhovna Rada.

A 5% tax on individuals and legal entities is proposed on operations utilizing cryptocurrencies and tokens, with businesses that claim crypto-related profits suggested to pay 18% tax on this total amount. This 18% is the standard corporate and business tax rate in the Eastern European nation.

The proposed legislation is the result of a 23-member strong parliamentary team who are looking to implement the changes to the tax plan gradually between 2019 and by January 2024. The motivation for these individuals lies in a desire to create more state revenue and promote cryptocurrency activities by offering a legally compliant, regulated environment.

A figure of UAH 1.27 billion (approximately USD43 million) is cited by the politicians as the potential amount of state budget revenue that could be collected annually between 2019 and 2024 if the bill is approved by the parliament.

Right now, cryptocurrency operations are not technically controlled by the government, meaning that many are concerned about the legal implications of entering the market and are therefore choosing not to do so, and also that crypto-related businesses are technically working in an unsustainable grey zone, dissuading them from expansion and potentially innovation.

In September last year, the Ukrainian Cabinet of Ministers on the Financial Stability Board held a discussion to determine the legal status of all virtual currencies, overseen by the Verkhovna Rada. The outcome of this was, however, unsatisfactorily clear, and has led to crypto mining operations being raided and shut down, with secret service agents even allegedly stealing profits from the miners in several cases.

With Ukraine still subject to occupation from separatist groups in the regions of Donetsk and Lugansk, the government claims that one of the largest mining raids was connected to Russian banks that were financing the occupation. The Kvazar semiconductor plant in Kiev was raided last year, with over USD 4 million of mining equipment taken, including 1,000 graphics cards and 1,500 hard disks.

Regulating and taxing the cryptocurrency space in Ukraine could well prove to be the solution for solving the troubled climate that seems to be partly a result of the autonomous nature of the space.


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ECB Chief Reiterates Lack of CBDC Justification

European Central Bank (ECB) president Mario Draghi has reconfirmed to the European Parliament that there are no plans to create a central bank digital currency (CBDC).

Draghi cited a lack of any prevailing economic conditions to warrant such as step, going on to suggest that DLTs hadn’t been severely tested as yet and still required “substantial further development before they could be used in a central bank context”.

The fact that discussions around the world about CBDCs is gaining some impetus hasn’t escaped the ECB or EU financial regulators, particularly in the light of Sweden’s Riksbank considering its own e-krona due to dwindling interest in cash and a rise in the use electronic money in that country.

The ECB, at one time scathing in its condemnation digital currency, has recently demonstrated a change of its stance, even suggesting that cryptocurrencies have a place in the future. It recently suggested that the financial body should begin to “…work on exchanges and platforms which provide services at the interface between crypto-assets and the real economy”. The comments were made earlier this year by Bank of France Governor Francois Villeroy de Galhau who also sits on the ECB’s Governing Council.

Bitcoin’s rising popularity currently feeds the debate globally whether the future direction of money is electronic rather than paper. The ECB chief has suggested however that an ECB digital currency would mean that the central bank would set itself against the banking sector in such a scenario and lead to potentially substantial operational costs and risks.

A view held by some experts is that a CBDC could make quantitative easing more effective bypassing the banking sector, also as a substitute for bank deposits, strengthen the transmission of monetary policy changes to the economy. Such views assert that a CBDC need not be nearly as disruptive as the ECB maintain in its criticism of the concept.


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Oregon Pushes Ahead with “Blockchain State” Plan

With many states in the US beginning to push various blockchain projects through state legislature, Oregon state in the country’s Northwest has also made a claim to the “blockchain state” handle.

The Oregon Blockchain Venture Studio in Portland has been set up to further this aim, with a number of companies and organizations from the fields of education, business, and technology linking their know-how to push the new tech in the state.

The aim is to specifically target 20 to 30 companies in the state over three years, hosted by digital agency R/GA, while forming a partnership with two state universities, Intel and sports giant Nike. The Venture Studio will also benefit from a USD 250,000 commitment through Business Oregon and the Oregon Growth Board.

The main idea of a studio is to give local companies opportunities similar to those that venture capital might offer. Jeff Gaus of Oregon Blockchain Venture Partners suggests that the “Oregon ethos exactly maps to what is required for blockchain to work”, adding that the state could become “what Pittsburgh is to steel or Detroit is to autos or Seattle to manned flight”.

Selected investors in the studio will contribute USD 3 million a year, each receiving investment capital of USD 100,000. Potential investment dollars will also be available from studio partners.

Although other US states are pushing their own blockchain plans to elevate their profile around the nation, Business Oregon spokesman Nathan Buehler claims that no state has really staked its claim as yet. He feels that Oregon is well placed through its established hardware and software industry to “establish an advantage” over other states.

Governor Dannel Malloy of Connecticut has recently signed off on a law in that state that will employ a blockchain working group, in order to further study the technology and how it can be utilized in state legislation. It is reported that the governor’s intentions are to make Connecticut “a leader in blockchain technology”.

It appears as though the United States is undergoing radical changes at institutional and governmental levels; in late July, blockchain technology in public sector projects also received a guidebook from a US-based IT industry trade association called CompTIA.


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The Rise Of Centralized Cryptocurrencies

The Gemini Dollar (USDG) is a new stable coin pegged at parity to the USD. It has been launched by the Gemini Exchange headquartered in the United States. Crypto coding expert Alex Lebed found that the USDG is completely centralized. Meaning, Gemini can freeze accounts, freeze the entire USDG coin supply, and print infinite USDG. But this is not just an isolated case as centralized cryptocurrencies like the USDG are becoming more common these days.

There are actually a couple of centralized cryptocurrencies hiding in plain sight among the top 10 cryptocurrencies by market cap. Tether (USDT), with a market cap of USD 2.76 billion, is the most popular stable coin, often used in place of the USD when the USD is not available. The popularity and success of USDT probably has a lot to do with the creation of USDG, and just like USDG the USDT is centralized to an extent. USD 30 million of USDT was stolen in a hack, and Tether Limited unleashed an emergency hard fork which reversed the hack.

This means USDT is not immutable, where immutable means transactions cannot be reversed. Immutability is one of the key advantages of Bitcoin. The fact that USDT is not immutable makes it much like fiat currency payment networks, such as banks or PayPal, and means users could have their funds reversed or frozen at any time.

EOS has a market cap of USD 4.84 billion, and it is run by a centralized organization of block producers. The EOS block producers work together and have in the past frozen EOS accounts since it was reported that a hack occurred. This means all EOS accounts can be frozen, just like when using a bank or PayPal. This likely is part of the reason EOS’ price dropped significantly after launch.

The People’s Bank of China (PBoC) is planning on launching a Chinese national cryptocurrency, and it is clear that the PBoC will have centralized control to print this crypto at will and freeze accounts. When the PBoC crypto launches, it has the potential to be one of the top cryptos in the world, since it would be the only crypto in China that can be traded legally for fiat.

Essentially, regulations on cryptocurrency are becoming tighter with each passing month, and it is much easier to get a crypto approved for launch by the government if it is centralized. If the government comes to Gemini or Tether Limited with any concerns about money laundering regarding a specific account, Gemini and Tether Limited can simply freeze the account. For centralized cryptocurrencies like USDG and USDT, the government has just as much control as the organizations running the crypto, and this creates a precarious situation for users of those cryptocurrencies.

Crypto users should be careful and fully understand a crypto before they buy it and begin making transactions, and it is best to avoid centralized cryptocurrencies. Most cryptocurrencies are still decentralized and immutable, and these are optimal for business since there’s no chance of the government or a corporation freezing the money. There’s even a decentralized stable coin called Stableunit, created by Lebed, the same person who discovered that USDG is centralized.

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BitGo Becomes Officially Qualified Crypto Custodian in United States

BitGo has received approval from the South Dakota Division of Banking to be a public South Dakota Trust Company. This makes it an officially licensed crypto custodian in South Dakota, and the rest of the United States, because other states generally practice reciprocity when it comes to this sort of license.

BitGo claims to be the first qualified crypto custodian in the United States, although, there are certainly other major crypto custodians active in the United States such as Coinbase and Xapo. At the least, BitGo is probably the custodian with the most cryptos available – more than 75, including major cryptos like Bitcoin and Ethereum, and numerous Ethereum based tokens.

Mike Belshe, the CEO of BitGo had this to say:

“Custody has been the missing piece of cryptocurrency market infrastructure and this gap has kept institutional investors out of the market. Traditional custodians don’t have experience handling cryptocurrency. Exchanges that double as custodians present a conflict of interest and raise regulatory concerns. BitGo Trust Company is a qualified custodian, and therefore the only custody offering that delivers the highest levels of both security and regulatory compliance”.

In this statement is a direct jab at Coinbase, which runs both an exchange and a custodian service for crypto.

Indeed, crypto custodianship is an essential piece of infrastructure for institutional investors, and BitGo will be specifically targeting institutional investors with this new trust company. Institutional investors deal with large amounts of money in the USD 1 million to USD 10 billion range, and they need a crypto custodian to bank their crypto to ensure no chance of getting hacked or robbed. Crypto custodians are generally insured, leaving no chance of losing crypto for people using a true crypto custodian service.

Also, when dealing with large amounts of crypto, it is essential to follow know your customer (KYC) and anti-money laundering (AML) laws to ensure no violations of regulations. BitGo will make sure institutional investors don’t have any run-ins with the law.

Crypto custodians like BitGo Trust Company are essential for crypto hedge funds. There are at least 466 crypto hedge funds and that number is rapidly growing. Crypto hedge funds will link up with crypto custodians, creating optimal investment conditions for institutional investors that want crypto. This institutional investment infrastructure could lead to the next big crypto rally.

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Binance CEO Predicts 1,000 Times Swell in Crypto Market

As the crypto community discussed the future of the market this week, Binance CEO Changpeng Zhao has disagreed with recent remarks by Vitalik Buterin, suggesting that the Ethereum founder’s comments about a squeeze on cryptocurrency growth are completely wrong.

Buterin has denied that he made exactly those comments, Tweeting, “I never said that there is no room for growth in the crypto ecosystem. I said there is no room for 1000x price increases.” Buterin has claimed that the crypto market has practically reached its ceiling.

Further explaining that a thousand-fold growth would equal to 70% of the world’s entire wealth seems to have done little to halt Zhao’s charge that cryptocurrencies will go mainstream over time, and thereby reach exactly that level of growth and possibly more.

Zhao maintains that Buterin’s mistake is to view such a huge level of growth in terms of the traditional financial market, in which such a market expansion would be totally unrealistic. He feels that cryptocurrency is capable of making such an impact once it becomes fully operational with an accompanying derivatives market in full sway. He argues:

“I will say ‘crypto will absolutely grow 1000x and more’! Just reaching USD market cap will give it close to 1000x, (that’s just one currency with severely restricted use case), and the derivatives market is so much bigger.”

It is the case now that more central banks are on board with, or if not, certainly examining, cryptocurrencies with more than just a passing glance, and as such, the industry is gaining respect. Blockchain technology is now becoming influential in banking and business at the highest level, having gained respect from some of the world’s major players such as IBM and Microsoft. As central banks begin to delve deeper into the space, it is highly likely that smaller banks will also begin to take an active interest.

The more positive the impact that cryptocurrency makes on the financial system, the more that regulation is likely become not only clearer but more accommodating as crypto becomes the normal way to conduct business.

This is more likely to be the scenario that Binance’s head envisages in making such predictions; thinking of the big picture rather than the status quo. A USD 200 trillion market would make cryptocurrency the main source of payment and would certainly make stock markets around the world look very different. Clearly, a scenario that Zhao sees as achievable.


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New French ICO Framework Attracts Innovation, Boosts Macron’s Business Plan

France is continuing to follow President Macron’s plan raise its business profile in the world by establishing a legal framework for ICOs.

A recent Autorité des Marchés Financier (AMF) annual report indicated that ICOs are most definitely on the agenda for further regulatory framework as Robert Ophèle, President of the AMF, indicated that the government body would:

“…continue to reflect on changes in the regulatory framework in the face of new offers, in particular, the Initial Coin Offerings (ICO), and to promote at European level the French regulator’s approach to innovation.”

The government has now taken one step further with a new announcement by finance minister Bruno Le Maire that the corresponding legislation, Article 26, had now been “adopted in (parliamentary) committee”, to improve business growth in the country, adding, “This legal framework will attract innovators from around the world of blockchain…”

✅Article 26 adopté en commission #PACTE !

➡Un cadre juridique des #ICO est créé. L’@AMF_actu pourra délivrer un visa aux acteurs respectant des critères de protection des épargnants
➡Ce cadre juridique va attirer les innovateurs du monde entier #blockchain #DirectAN

— Bruno Le Maire (@BrunoLeMaire) September 12, 2018

The legislation will allow the AMF to now approve businesses wanting to launch ICOs in France, given certain criteria are met by companies that “those projects provide specific guarantees for investors”.

Law firm Kramer Levin sees the new legislation providing a clear a definition of tokens for would-be French investors, suggesting that a token is:

“An intangible property representing, in numerical form, one or more rights that can be issued, registered, conserved or transferred using a shared electronic registration mechanism that facilitates the identification, directly or indirectly, of the owner of said property.”

After the lackluster and largely ineffective government led by previous president Francois Holland, Macron’s new regime has taken businesses to task with real vigor in an attempt to refresh outmoded business practices and regulations and inspire overseas faith in a new forward-looking approach, largely driven by government.

President Macron is seen by those that know him well and experts in the sector as a pro-tech leader, believing that he will further the interests of startups in the crypto industry as part of his business rejuvenation plan for the nation.


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SEC Shuts down TokenLot for Unlicensed ICO Trading

The Securities and Exchange Commission (SEC) of the United States has cracked its whip and shut down TokenLot LLC, a platform that offered 200 cryptocurrencies, many of which were initial coin offering (ICO) tokens that could be considered securities. This sends out the message that the SEC is serious about stopping ICO traders who do not have a proper broker-dealer license, which is required to trade securities in the United States. This is the first time the SEC has charged an unregistered broker-dealer in the crypto space.

During 2017, the SEC decided that any cryptocurrency which was being bought by investors who expect profit and is largely controlled by a centralized organization would be considered a security. This includes almost all cryptocurrencies launched with an offering, effectively making ICOs illegal in the United States. It is possible to do an ICO with permission from the SEC but that requires an arduous and expensive legal process. Additionally, trading of crypto that are considered securities cannot be done without a broker-dealer license, which is hard to obtain. Only major firms like Coinbase have any chance of getting a broker-dealer license.

The only exceptions so far are Bitcoin and Ethereum, which have been declared to not be securities by the SEC since they are sufficiently decentralized. Regardless of this ruling, the SEC has been heavily policing the Bitcoin markets by rejecting numerous ETFs and halting an ETN.

TokenLot branded itself as an ICO Superstore and had been both trading crypto securities and actively participating in ICO fundraising, and had over 6,100 investors across 200 cryptocurrencies. Most of their business occurred after the SEC’s 2017 ruling which decided most ICOs were securities.

Owners Lenny Kugel and Eli Lewitt responded quickly to the SEC investigation and began unwinding investor positions. They worked with the SEC, resulting in penalties much less severe than they could have been. Ultimately, TokenLot must pay a USD 479,000 fine, and Kugel and Lewitt must pay USD 45,000 each, and are disbarred from securities trading for at least three years. There are no criminal charges, and the owners didn’t have to admit to any wrongdoing.

The moral of this story is that trading ICO crypto securities without a broker-dealer license is illegal and the SEC has the jurisdiction to enact severe penalties on anyone who defies regulations. In the TokenLot press release, the SEC adds a friendly reminder that anyone who wants to trade crypto securities legally can contact them, but not even big exchanges have had any luck at getting a broker-dealer license. Coinbase only managed to get a broker-dealer license by acquiring a company which already had one.


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Crypto Corporates Form Blockchain Lobbying Group in Washington

Blockchain companies in the United States are coming together to promote blockchain and cryptocurrency legitimacy in the form of a new blockchain lobbying group based in Washington DC.

Lobbying the American government

Named “The Blockchain Association”, the group is to represent investors and entrepreneurs in the blockchain/cryptocurrency space who are seeking to operate compliantly with the US political system. Furthermore, the group is setting out address the ongoing and numerous issues relating to the taxation and classification of cryptocurrencies in present US law.

The group will also be with lawmakers to develop clear policies on anti-money laundering (AML) and Know-Your-Customer (KYC). As the new entity grows, it will begin other efforts, although these short-term goals will be the early focus.

As reported by the Washington Post, the founding members of the association have been confirmed as Coinbase, Circle, Polychain Capital, Digital Currency Group and Protocol Labs. The backgrounds of these companies cover certain areas such as technology, cryptocurrency exchanges and investors.

Mike Lempres, Coinbase’s chief legal and risk officer, explained the rationale behind this effort: “The Blockchain Association is an effort to get the preeminent companies in the space together so [policymakers] know they’re hearing from companies that welcome regulation when it’s appropriate. We’re not companies looking to game the system, but trying to develop a legal and regulatory system that’ll stand the test of time.”

The association has begun recruiting already, beginning with former Republican lobbyist and former congressional staff member Kristin Smith on board, as well as Protocol Lab’s General Counsel Marvin Ammori. Founder of public sector technology company Hangar, Josh Mendelsohn is also taking a position.

Jerry Brito, executive director of the non-profit research and advocacy group Coin Center, is reported to have said that the emergence of such associations is a sign of a maturing industry.

Time for change

It appears as though the United States is undergoing radical changes at institutional and governmental levels; in late July, blockchain technology in public sector projects also received a guidebook from a US-based IT industry trade association called CompTIA.

The guide offers insights into how public sector leaders should approach blockchain technologies should they wish to implement and adopt the technology into public sector projects.

In July also, the US Chamber of Digital Commerce published a paper called ‘Understanding Digital Tokens: Market Overviews & Guidelines for Policy Makers and Practitioners’, a document that covers regulations, the need for legal clarifications as well as token classification.

Other entities within the US political system are also making bullish charges for blockchain and cryptocurrency regulation, with the Chairman of the Commodity Futures Trading Commission (CTFC) believing that the United States is falling behind the rest of the world with regards to blockchain innovation.


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P2P Exchange Bisq: “It Doesn’t Get More Decentralized Than This”

With a recent surge in so-called decentralized cryptocurrency exchange platforms, peer-to-peer (P2P) exchange platform Bisq appears to be one of the very few to attempt serious decentralization.

Once the favored method of exchange, P2P volume has fallen over the years but with increasing privacy and security challenges on centralized exchanges, some like Bisq see a revival in the concept of direct exchange via P2P.

Felix Moreno is one of just a few individuals who work on the decentralized P2P exchange platform Bisq openly. Most people working on it volunteer their services anonymously and for free. Why? Because, as Moreno told Bitcoin News, it is the ”holy grail” of decentralized cryptocurrency exchanges.

Bitcoin News caught up with Moreno to discuss the logistics of running a nearly entirely decentralized exchange, why they will have to fight tooth and nail to keep it that way, and why know-your-customer (KYC) regulations are really just a way for the government to get into your pockets.

Moreno’s experience

He has been in the Bitcoin world for a long time, suffered through the Mt Gox fiasco and various hacks and scams before, and now wants to do his part in minimizing these experiences for others.

”What do we need that can make exchanging as decentralized as the Bitcoin network itself? This is the closest we have gotten to that ideal,” he said. This is one of the most interesting projects Moreno says he has worked on, both making him understand what makes Bitcoin special and what potential decentralization can unlock, Moreno explains his belief that Bisq’s founders really try and live up to this standard.

A return to private exchanges between crypto users

Bisq founder Manfred Karrer shared these comments about the platform: ”To enable a privacy protecting exchange between fiat currencies and Bitcoin, it is crucial to keep your Bitcoin untainted. Protection of privacy is here directly related to security. There is a long list of hacks of centralized Bitcoin exchanges. In such events, your personal financial data including your residency address can end up in the hand of hackers and criminals. The only protection is to not store user data.”

The Bisq project is open source, operating entirely with the help of informal collaborators besides the founders. There was no initial coin offering held to raise funds; the few who helped contribute the minimal funds pre-launch did not do so expecting to see their money again. The mission getting these people so excited is an ambition to create a platform like BitTorrent but instead of offering music, offering a cryptocurrency exchange for all coins, between people and users instead of companies and banks.

Right now, you can buy and sell Bitcoin and altcoins using dozens of fiat currencies but with more users, this could potentially become hundreds. The platform uses multi-signature transactions on Bitcoin smart contracts to block in escrow the Bitcoins that people use as a security deposit, so there is a mutually assured destruction for both partners in the trade if they don’t complete it correctly.

The privacy measures do not much change the process of using the platform, Moreno detailed: ”There is a local wallet in your computer under your control so there is no way that runners of the project can access it. You can fund the wallet at the moment you want to make the trade by just scanning the QR code and depositing funds straight away.”

Bisq Founder Manfred Karrer

In terms of decentralization, what makes Bisq so different from other exchanges?

Bisq does not require you to have an account or share your information with a third-party company. Your information is stored locally in the Bisq Client, an application that you need to download onto your computer, and only the minimum of this is shared with the trade counterpart and nobody else. For example, if you are trading with fiat, your bank details will be shared. A Bitcoin-Monero trade, on the other hand, will not even share your name with the trading partner, only your wallet address.

”There is no way we could turn into a KYC financial surveillance company because there is no company, there is no one the SEC can send a subpoena to. There is no one in charge,” Moreno explained.

Privacy is crucial for them. Moreno outlined the main issue with centralized businesses: ”Big companies leak large amounts of user data every week, and the ones who are not leaking are the worst offenders, accumulating social media and search engine data to sell to advertisers in the best case scenario. The worst case scenario is something from (the book) 1984.’

Privacy, he added, is especially important with finances due to the risks of theft, fraud, and rich Bitcoin traders that could become susceptible to phishing scams if their data is shared. He also recognized that there are different degrees of decentralization with Coinbase at one end, Hodl Hodl somewhere in the middle, and then Bisq.

”Ideally, Bisq is so successful that it will be copied by a lot of people and because it is open source code this will be easy. I’m fine with that, that’s the spirit of open source,” he explained.

A dying kind

Moreno pointed out that even companies that have tried to offer decentralized platforms, such as Shapeshift, reach a certain level of success and then have to ”ignore the ‘no account needed’ hashtag”. They may not want to impose KYC, he said in the case of Shapeshift: ”I know Eric (Shapeshift CEO), he’s a great guy, really believes in privacy. But once you run a company with dozens of employees and investors you cannot take the legal risk. Shapeshift is incorporated in Switzerland so technically the SEC doesn’t have anything to say about it in theory, but in practice, the long reach of American regulators extends at least over half the world if not more… I don’t think he has a choice.”

Bisq Co-Founder Chris Beams

It is not perfect

There are risks to this level of decentralization and the platform itself is not perfect. For one, it exposes Bisq to scammers that in some other places can be stopped with an identity check, but it uses a set of incentives and smart contracts to minimize this risk. Moreno says he has used nearly every trading platform there is and has realized it is much more detrimental to scammers to have a security deposit there to lose than to ask for identification. Bisq has a double security deposit, which when trade is completed, both parties recover but if there are any issues they can lose their money.

One aspect that people may also not like is the fact you have to download a program to run on your computer.

”That’s like early 2000s, who does that anymore?” Moreno joked, clearly aware that this is a problem for some people. It is, however, the only way to exchange completely securely and to let people really have control of their own node, he said.

Some people might also not enjoy the fact that because they are completely in control of their own funds as any mistake is on the user: ”It’s like in the early days of Bitcoin when you send funds to the wrong address – you’re screwed. But that’s your responsibility and some people don’t want that.”

And then there is the issue of speed. You can not simply buy with one click when making a market order as you can on some centralized platforms; the multi-signature which is on the Bitcoin blockchain requires at least 10 minutes for confirmation. Then the speed depends on your payment network; some ways such as through a Revolut account will be quick, but international bank transfers can sometimes take five days or more.

Fighting to stay online, and why regulations are really there

While Bisq may avoid most regulations because of its decentralized structure, the path ahead for them is not easy: ”Bisq is going to have a very hard time surviving the way it is doing things… We will have to fight like hell and use every technological advantage to keep it up.”

If there is a company behind it, Moreno says, every exchange will get a call from local regulators who want first: full KYC and the source of funds for counterterrorism measures especially over certain amounts, and secondly: automatic data sharing like banks already have with tax authorities so they can ”go on phishing expeditions to see who isn’t declaring all their Bitcoin income or whatever”.

Moreno continued, ”KYC is not there out of the goodness of their hearts; it’s a slippery slope towards first identifying you, then getting money out of you. If tax authority lobbyists win, they will allow crypto activities to continue but they will be taxed and if financial industry lobbyists win, they will exclude competition so only big financial companies can run exchanges with proper licenses.”

Industry self-regulation

So is industry self-regulation the way forward? Well, Moreno thinks it could work.

He explained that now, more than ever, there is the opportunity to do it well by using smart contracts and setting up things such as automatic penalties for people who break the rules. ”That can get us very very far, much farther than all the preventative KYC regs”, he said, adding that reputation networks too have always worked because people care a lot about return trade.

”If people are completely anonymous, it’s very easy to have a selfish attitude, but if it’s someone you have some sort of relationship with, it’s only the psychopaths that are going to give that up for a short-term gain,” Moreno remarked.

Bisq Co-Founder Christoph Atteneder

Set the date: 20th September

Right now, trading volumes are comparatively very small: ”Bisq is at 183 on Coincap, it’s tiny.”

For euros and dollars, trading is decent but for some other currencies such as the Argentinian peso, there is hardly anyone on the platform offering pairs. ”Argentina really needs it but again, most people will not do the work of finding decentralized exchanges until they suffer a hack or find their account frozen,” Moreno noted.

To try and encourage traders, Moreno has planned a kick start virtual event on 20 September 2018. He is asking everybody who is interested to go on Bisq and place an ad.

”If you don’t want to trade just say ‘I’m here, I’m interested and when the time comes to buy and sell I will be here,’ especially for lesser used currencies. If we can get 4/5 people for these currencies, other people can see there are people trading around them.”

It may not be the fastest platform, the most accessible or provide some of the assurances that KYC compliant exchanges do, but as Moreno believes, ”Right now, Bisq is the best we have got by far.”

To find out more about Bisq, or to contribute to the platform, join the Slack or follow them on Twitter.


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