Category Archives: FMA

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Bitfury and Swiss Investors Launch Bitcoin Mining Fund

Bitcoin Mining Fund

Bitcoin mining technology firm Bitfury Group, recently valued at USD 1 billion, has entered an alliance with Switzerland-based investment firm Final Frontier to launch a regulated Bitcoin mining fund, as reported by Reuters.

Under the supervision of Liechtenstein’s financial regulator, the Financial Market Authority, the fund was developed for both institutional and professional investors to claim access to “the esoteric world of bitcoin mining”.

Bitcoin mining is basically the means by which the Bitcoin network is secured and transactions validated, using computing power to solve extremely difficult cryptographic puzzles. A computer, or a collection of computers connected to a node, credited with solving the next puzzle will have built a block. New blocks will include verified transactions and are added to a chain of chronological blocks, hence adding on to a blockchain. The node credited with finding a new block also receives a block reward of freshly minted bitcoin, so this is also a way of minting new coins, hence, Bitcoin mining.

It has proven to be a profitable business for almost a decade now, with home mining on personal computers very quickly switching to more powerful processors, and eventually companies like Bitfury manufacturing highly specialized equipment called ASICs. Bitfury’s part in this new deal will be to supply the hardware and end-to-end services for the Bitcoin mining fund. It will also be responsible for scouting out the new sites for the activities, deploying equipment and servicing them later.

Ultimately, the fund hopes to invest in mining sites operating with the lowest costs featuring Bitfury data centers. Final Frontier co-founder Imraan Moola aid:

“With the bitcoin price down significantly from its all-time high, yet institutional interest growing every day, now may be an opportune time to consider investing in Bitcoin mining.”

 

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NZ’s “Friendliest” Exchange Launches Country’s First ICO

New Zealand is finally about to launch its first ICO with cryptocurrency exchange Coingrid planning to begin a USD 3 million fundraiser in the next two weeks.

Although New Zealand’s Minister of State for Trade and Export Damien O’Connor is positive there is a real desire in the government to be in the vanguard of promoting new technologies in the region, cryptocurrency has not had such an easy ride. SBS Bank’s group chief executive Shaun Drylie reflects the current feeling that while blockchain is here to stay, cryptocurrency still needs to convince New Zealand’s traditional financial community:

“We think, and the common consensus is, that it [blockchain] has real merit. Cryptocurrencies, we’re not too sure, and if you look at the volatility of cryptocurrencies that would suggest the market is not too sure as well.”

Despite New Zealand being one of the strictest countries in the world regarding cryptocurrency, this hasn’t stopped Coingrid forging ahead with their plans to break new ground with plans for a domestic ICO launch on 23 November.

Coingrid says that it is the country’s “friendliest cryptocurrency exchange” although it is not exactly clear what it’s based its self-description on. However, to avoid New Zealand’s still somewhat unclear regulations regarding the trading of cryptocurrencies, Coingrid have been dealing directly with regulators. ICOs are generally registered overseas to avoid government regulations, which still lack clarity.

The approach by Coingrid is an, as yet, untested approach by other cryptocurrency exchanges. By dealing directly with New Zealand’s Financial Markets Authority (FMA), the exchange is now able to launch New Zealand’s first domestic ICO.

Despite the county’s crypto caution, stablecoins continue to attract attention. There are plans to peg the New Zealand Dollar (NZD) to the NZDT, a stablecoin issued by the country’s leading exchange Cryptopia which has a daily trading volume in excess of USD 2 million.

 

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Austrian Financial Authority Calls for Crypto to Be Treated Like Securities

Board directors of the Austrian Financial Market Authority (FMA) are proposing tighter cryptocurrency regulations, reports a Dutch news outlet.

The proposals are driven by Klaus Kumpfmüller and Helmut Ettl who are asking for a threshold dependent requirement of 2 million euros for ICO’s. Distributors of cryptocurrencies will come under the current legislation for securities.

Austria has been considering regulating cryptocurrencies for some time along with its European neighbors, most of who are at different stages of applying tighter rules for digital currency in their jurisdictions. This drove Austria to use the model for its existing rules applicable to the trading of gold and derivatives as there is a lack of an active system relating to cryptocurrencies in place. The government’s main concern is curbing the use of cryptocurrencies for money laundering,

Ettle complained that there were no existing regulations on cryptocurrency in place, as there were with financial institutions, and he says that this should change, arguing, “For the purchase and sale of foreign currency you need a mini-bank license.”

In the absence of restrictions in Austria concerning cryptocurrency, the FMA submitted around 30 statements regarding suspected legal violations in connection with cryptocurrencies and ICOs to the public prosecutor’s office last year.

Change has been made more difficult due to accusations by the FMA that Austrian Finance Minister Hartwig Löger has plans to strip them of some of their authority for lack of “regulatory responsibility at the ministerial level,” according to the minister.

However, Loger and the FMA do agree on aspects of regulatory control when it comes to cryptocurrencies with FMA board members participating in a Fintech Regulatory Council, earlier proposed by the minister. Such a body is sure to address FMA’s major concerns which center around money laundering concerns.

Austria’s National Bank governing board member Kurt Pribil caused a stir earlier this year when he said, “Bitcoin etc. are by no means currencies, because there is definitely no real value,” adding, “Shares and bonds are also volatile, but there are values behind them – there is only greed and the principle of hope behind bitcoin.”

 

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