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Kazakhstan Is About to See Its First Cryptocurrency Backed by Fiat Money

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Cryptocurrency is coming to the Republic of Kazakhstan, according to a recent press release from the Astana International Financial Centre (AIFC), a developmental body established by President Nursultan Nazarbayev.

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Kazakhstan Gets Its First Cryptocurrency

Astana is teaming up with Exante Investment Company to develop the Eurasian country’s cryptocurrency market. The announcement came by way of memorandum, where Exante agreed to cooperate in spearheading AIFC regulation pertaining to digital assets.

Exante is an investment services company specializing in Direct Market Access (DMA), an electronic trading facility that gives investors entry into order books. The company has offices in at least seven jurisdictions, including Moscow, Dubai, Riga and Cyprus. Exante has several blockchain projects under its portfolio.

A public-private partnership to streamline cryptocurrency regulation is certainly a unique proposal. Governments around the world have taken a more adversarial approach to digital assets, with some issuing outright bans and others seeking to limit the spread of blockchain-powered currency.

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According to the AIFC press release, “leading financial regulators are actively working to create favourable conditions for the development of financial companies” in hopes of transforming Astana into a global fin-tech hub.

Kazakhstan isn’t the first country to express interest in launching its own digital currency. This past summer, Estonia proposed its own state-backed cryptocurrency. Japan has also signaled interest in launching its government-backed digital asset, called J-Coin. It also appears that Russia is set to move forward with the CryptoRuble, according to the TASS news agency.

Stasis

Kazakhstan’s entry into the cryptocurrency market will be backed by Stasis, Exante’s new blockchain platform. Unlike other digital ledger projects, Stasis is backed by fiat money. This setup is intended to facilitate transactions between cryptocurrency and traditional finance.

Antoly Knyazev, co-founder of Exante, has joined several working groups on cryptocurrencies, having held meetings with the governments of Malta, Cyprus and Kazakhstan. This suggests that the Stasis project, or others like it, could become more common in the future.

Stasis has been described as a transparent cryptocurrency because it is tied to physical assets and backed by fiat money and bonds. The cryptocurrency enables instant payments at lower fees and increased transaction speed. The platform has also been audited by the government of Kazakhstan.

Knyazev expects the market cap for Stasis to reach 2-3 billion euros or their equivalent.

With assistance from Anastasiya Ernays.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 415 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Regulation

U.S. Authorities Probe Shady Bitcoin Trading Practices

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U.S. regulators are cracking down on the cryptocurrency market, probing individual coins and projects including a newly launched investigation into possible manipulation of the bitcoin price. According to a report in Bloomberg, the U.S. Department of Justice (DOJ) has launched a criminal investigation to determine if traders are manipulating the price of bitcoin and other cryptocurrencies, known as altcoins.

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DOJ prosecutors have teamed up with the Commodities Futures Trading Commission (CFTC), the regulatory body under whose jurisdiction bitcoin futures trading belongs, to investigate whether price manipulation is occurring. They are focusing most heavily on the No. 1 and No. 2 cryptocurrencies by market cap, bitcoin and Ethereum, respectively.

Wild West Stigma

The investigation is only fueling a stigma already attached to the cryptocurrency market as a Wild West ripe with illicit activities ranging from money laundering to now price manipulation. If cryptocurrency investors are wondering why the broader market can’t seem to get out of the doldrums, it could be the uncertainty that is exacerbated by developments like this one.

The bitcoin price has lost more than half its value from its December 2017 highs of nearly $20,000 and is hovering at about the USD 7,500 level. If the catalyst for the market recovery is institutional capital pouring into the market, investors may need to get used to the volatility. Now the market will either take a step backward or forward, depending on the mechanisms that are put in place to prevent further bitcoin price manipulation.

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Investigators are probing specific nefarious behavior like a rush of fake orders to mislead other traders to buy or sell, a practice that is also known as spoofing. They are also looking into wash trading, an illegal behavior that also occurs in the equities and derivatives markets where an investor takes both sides of a trade — buyer and seller — to create false market demand.

Task Forces and Sweeps

Separately, a North American crypto-sweep is underway, led by the North American Securities Administrators Association. They’re probing the ICO and blockchain startup side of the market and have nearly 70 investigations happening this month alone. Member states and provincial securities regulators are hunting “fraudulent Initial Coin Offerings (ICOs), cryptocurrency-related investment products, and those behind them.”

Exchanges like US-based Coinbase have worked alongside regulators during tax season, while founders of rival bitcoin exchange Gemini, the Winklevoss twins, have launched a self-regulated cryptocurrency trade group, the Virtual Commodity Association. But prosecutors are worried that exchanges aren’t doing enough to uncover fraudulent trading activity in this loosely regulated cryptocurrency market.

Meanwhile, securities regulators like the SEC and lawmakers agree it’s not a good idea to rush into any regulatory policy, so as not to create another cumbersome policy like Dodd-Frank. In the meantime, the cryptocurrency market is largely being policed by regulatory task forces and sweeps.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 7 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. Full disclosure, she's invested in bitcoin.




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Market News

Parity Wallet’s ICO Passport Services Are Shutting Down

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Parity Wallet has succumbed to EU regulatory pressure and is shutting down it’s PICOPS services on May 24th, 2018.

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EU Crackdown

PICOPS, a service which allowed customers to associated a single Ethereum address with their identity to simplify KYC requirements, allegedly due to the more stringent requirements of the EU’s new GDPR legal framework.

The Parity Wallet team itself posted a statement saying, “We are looking at ways of resolving the uncertainty and making PICOPS compliant with GDPR while keeping it useful. However, as things stand the solutions we have identified restrict the service to a very limited set of features.

Because of this, the significant resources required to make PICOPS GDPR-compliant, and the fact that PICOPS is not part of our core technology stack, we have decided to discontinue the service despite overwhelming market needs and demand.”

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The team remained open to restarting the service in the future however, stating, “These challenges make running a service like PICOPS more difficult. We are looking at ways of resolving the uncertainty and making PICOPS compliant with GDPR while keeping it useful. However, as things stand the solutions we have identified restrict the service to a very limited set of features.

Because of this, the significant resources required to make PICOPS GDPR-compliant, and the fact that PICOPS is not part of our core technology stack, we have decided to discontinue the service despite overwhelming market needs and demand. PICOPS’s deprecation does not mean that we are going to wait and see what happens to blockchains under regulation.”

Ethereum founder Vitalik Buterin tweeted his disappointment with decision on Friday, but didn’t go into specifics about the state of EU regulation.

Based on the company’s statements, it seems likely that Parity Wallet will continue to be an active voice in trying to steer more crypto-friendly regulations into law. But the shuttering of an incredibly useful tool could be interpreted as a byproduct of international government’s growing hostility to all things blockchain.

Governments around the world are still in the very early stages of understanding, defining and adequately regulating cryptocurrencies. The state of crypto regulation varies wildly across the board, with some nations recognizing cryptocurrency as money and others banning them outright.

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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Regulation

Asia Sees a Mass Exodus of Cryptocurrency Exchanges

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As Japan rolls out tougher cryptocurrency regulations, exchanges are thinking twice about expanding their services in the world’s third-largest economy. In fact, the Asian region as a whole is experiencing a mass exodus of exchanges. Their destination: Europe.

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Japan Introduces New Crypto Rules

Japan’s financial regulator has announced stricter guidelines for cryptocurrency exchanges in the wake of a large-scale cyber attack earlier this year, according to the Nikkei Asian Review. The new framework, which will be implemented this summer, will govern the operations of cryptocurrency exchanges currently registered with the Financial Services Agency (FSA) as well as any new service providers seeking to enter the market.

Exchanges that fail to meet the new guidelines set forth by the Financial Services Agency (FSA) will be advised to discontinue operations.

The FSA has been developing new regulatory guidelines in the wake of the Coincheck cyber attack, which resulted in the loss of $530 million worth of NEM tokens. It was the largest crypto heist of the year and second biggest of all time.

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Exchanges Step Away from Asia

Japan and the rest of Asia are becoming less attractive for cryptocurrency exchange operators. Last month, digital currency exchange Kraken announced it is stepping away from the Japanese market amid regulatory uncertainty.

Binance is also fleeing the region. The world’s largest crypto exchange has announced plans to relocate to blockchain friendly Malta from Hong Kong. The tiny Mediterranean country has positioned itself as a trailblazer for the blockchain industry, mirroring a highly successful shift in neighboring Cyprus, which has emerged as a global center for forex exchanges.

Meanwhile, Bitfinex announced in March that it was planning to relocate out of Hong Kong, which is one of China’s Special Administrative Regions. The exchange, already the fourth largest by trade volumes, is eyeing Switzerland as its next base.

Binance CEO Jean-Louis van der Velde told Handelszeitung, “We are looking for a new home for Bitfinex and the parent company iFinex, where we want to merge the operations previously spread over several locations.”

Though London was on Bitfinex’s short list, the company seems to favor Switzerland above all.

The country is the home to “Crypto Valley,” a mass effort to bring blockchain businesses to the picturesque European nation. Favorable regulations, a budding startup community and the recognition of blockchain as a future business driver have made Crypto Valley highly attractive.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 415 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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