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Swiss Banks Join Forces to Launch Ethereum Platform

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Switzerland’s largest banks have converged on a new blockchain initiative powered by the Ethereum network. The new program will be implemented just in time for new regulations related to counter-party reference data.

Banking giant UBS announced Monday it has united with Barclays, KBC, SIX and Thomson Reuters to advance the MiFID II data collection project. MiFID II is a revamped version of the Markets in Financial Instruments Directive, which is intended to offer greater protection for investors. MiFID II officially comes into force Jan. 3, 2018.

The joint program will be powered by Ethereum smart contracts, and will be run on the Microsoft Azure cloud platform. Specifically, it will allow participants to align their Legal Entity Identifier (LEI) reference data against industry consensus. In other words, it will allow financial institutions to identify and sort out anomalies. The smart contracts will reconcile anonymized reference data on the blockchain without compromising the bank’s exclusive access to the source data.

The program was incubated in London at a UBS blockchain development lab.

“Traditionally, a firm such as ours quality checks data against multiple sources but we do not have a quality baseline against peers”, Christophe Tummers, Head of Data at UBS, said in a statement released Monday. “Through using blockchain-inspired smart contracts, the reconciliation of data can happen in almost real-time for all participants, anonymously.”

UBS blockchain strategist Emmanuel Aidoo said this was an important project because it “establishes blockchain benefits in a broader context than clearing and settlement.”

Blockchain technology has been well received by the traditional banking community, which views the new technology as a conduit for future growth, transparency and resiliency. However, these same institutions have been much more critical of blockchain-based cryptocurrencies, such as bitcoin and ether.

The announcement had no discernible impact on ether prices. The world’s second-largest cryptocurrency by market cap continued to trade around $470 U.S. Ether briefly traded at record highs over the weekend before giving up gains ahead of the planned launch of bitcoin futures. Ethereum continues to be the platform of choice for developers, startups and financial institutions looking to leverage smart contract capability.

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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4.6 stars on average, based on 504 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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“We should prohibit U.S. persons from buying or mining cryptocurrencies,” says Rep. Brad Sherman

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A Congressional Financial Services Committee meeting today turned alarmingly hostile to cryptocurrencies and blockchain technology as a whole.

This hostility stemmed initially from Democratic Representative Brad Sherman, who stated,”We should prohibit U.S. persons from buying or mining cryptocurrencies.”

According to a senior political journalist from Politico in attendance at the meeting, Rep. Sherman believed that mining is so exceptionally energy intensive and that it’s so much much more environmentally damaging than it’s potential utility is worth and thus, that the government should ban it to eliminate the possibility of further destruction.

Importantly, but likely not coincidentally, is the fact that Rep. Sherman’s biggest campaign contributor was a credit card processing company.

The company is Ally Wallet, which describes itself as, “The preferred online merchant services company and online global payment gateway solution for businesses that need to accept online payments.”

Unfortunately, Rep. Sherman’s utterances were not the only anti-cryptocurrency statements at the hearing. Specifically, Alex Pollock, a fellow from the Pro-Free Market think R Street Institute, stated his view that, “a central bank virtual currency is one of the worst ideas in recent times.”

When this is combined with Fed Chairman Jerome Powell’s comments earlier this week that, “a Fed-backed cryptocurrency is not something we’re looking at”, it paints a picture of a government increasingly alarmed by the growing use of cryptocurrencies in general.

Chairman Powell, also raised an issue with Bitcoin’s use in money laundering and other financial fraud. He elaborated further by stating that “there are too few places taking crypto as payment and the value is too volatile to be a stable store of value. Cryptocurrencies undermine the U.S. sanctions regime against terrorists/adversaries.” Powell concluded when pressed that he saw, “more risks and concerns in cryptocurrency than in its potential use.”

Additionally, at the same meeting, Representative Ryan Peterson stated that “I’m someone who believes we should still be on the gold standard and I think we need to audit the Fed because I don’t trust them.” Rep. Peterson also allegedly stated his belief at the meeting that, “digital currencies are Ponzi schemes.”

It is somewhat alarming in the opinion of this analyst that an ignorant consensus seems to be forming in the upper echelons of government that views cryptocurrency as inherently a threat to their power, and that as a result it must be stopped.

Luckily, there was some pushback from a representative of “Bitcoin University”, albeit after the meeting. This individual confronted Rep. Andy Barr, who is a Financial Services Committee member, and exclaimed that “he needed to bring more Bitcoin experts into the next hearing.”

Whether these combined statements is ultimately reflective of a US federal policy shift remains to be seen. But for proponents of Bitcoin and cryptocurrency, they serve as a reminder that those in positions of power will not lose their status without a fight.

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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Government of Malta Passes New Cryptocurrency Legislation

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Malta’s embrace of digital currency came full circle Tuesday after lawmakers passed three separate crypto-related bills that could transform the island nation into a blockchain powerhouse.

‘First in the World’

CCN broke the news Wednesday that all three bills have gone through Malta’s legislative process, putting them on track for full implementation. The second reading of the bills was carried out Tuesday night in a plenary session that began at 6:00 p.m. local time, parliamentary records show.

The approved bills include the Virtual Financial Assets Act (VFA),  the Innovative Technology Arrangements and Services Act and  the Malta Digital Innovation Authority Act (MDIA).

VFA deals specifically with the regulation of initial coin offerings (ICOs), ordering new token projects to publish whitepapers and detailed descriptions of the entire project.

The  Innovative Technology Arrangements and Services bill governs blockchain startups and other businesses looking to leverage distributed ledger technology.

MDIA will effectively serve as an industry-specific governing body that will support the development and implementation of blockchain-based regulations.

Parliamentary Secretary Silvio Schembri said the bills were a ‘first in the world’ development and also announced the person heading the newly created MDIA:

“Today Maltese Parliament unanimously approved 3 bills on DLT/blockchain, a 1st in the World. Honored to have driven these bills. Announced that Mr Stephen McCarthy will be the CEO of the new #Malta Digital Innovation Authority.”

Blockchain Island

Malta has quickly emerged as a prominent player in the blockchain industry, having already lured major exchanges and businesses to its borders. Binance has announced plans to relocate to the tiny Mediterranean nation and earlier this month disclosed that it has opened a bank account in the country. OKEx, another prominent exchange, has also announced plans to make Malta its new home.

Binance and OKEx are the world’s largest cryptocurrency exchanges by trading volume, each processing more than $950 million in daily transactions.

Binance’s decision to relocate was largely driven by its desire to enable fiat-to-crypto deposits and withdrawals, something Malta says it will accommodate through local bank partnerships.

Changpeng Zhao, Binance’s CEO, has described Malta’s regulatory stance toward blockchain and cryptocurrency as “logical, clear and forward-thinking,” adding that “dozens” of similar exchanges are planning to relocate to the country.

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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4.6 stars on average, based on 504 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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Bithumb Hack Prompts South Korea to Hasten Cryptocurrency Regulation

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South Korea’s second-largest cryptocurrency exchange suffered a security breach on Wednesday, prompting local authorities to hasten their adoption of stricter regulations.

Bithumb Hack

Bithumb confirmed Wednesday that cyber criminals “seized” 35 billion won ($31.6 million) worth of digital cash in an apparent attack targeting user accounts. The exchange halted deposits at approximately 00:53 UTC and began a wholesale transfer of funds to cold storage to prevent further theft.

“We checked that some of cryptocurrencies valued about $30,000,000 was stolen,” Bithumb tweeted Wednesday. “Those stolen cryptocurrencies will be covered from Bithumb and all of assets are being transferring to cold wallet.”

The exchange has confirmed that it will fully compensate affected users.

An earlier update on Bithumb’s Twitter account reveals that a security upgrade was being carried out last week where it transferred to a cold wallet for safe storage. However, it is unclear whether the upgrade is linked to the theft.

In terms of trade volume, Bithumb is the world’s sixth-largest cryptocurrency exchange. The platform processed more than $355 million worth of digital currency transactions in the last 24 hours, according to data provided by CoinMarketCap.

Bithumb is the second South Korean exchange this month to have been hacked. Less than two weeks ago, more than $37 million was compromised in a coordinated attack on Coinrail. The attackers went after the exchange’s coins and lesser-known ERC-20 tokens.

South Korea to Boost Regulation

South Korea’s financial regulators have announced plans to implement stricter guidelines for virtual exchanges, and to do so more expeditiously than previously planned. The announcement, which came on the heels of the Bitthumb attack, follows months of deliberation about whether to regulate cryptocurrency exchanges like banks and other financial institutions.

As CCN notes, cryptocurrency exchanges are presently regulated as “communication vendors,” which means virtually anyone can launch an online trading platform. This designation prevents direct oversight of digital currency exchanges by financial regulators.

New crypto regulations are expected to be rolled out in the coming months, which will put South Korea’s financial authorities on par with their counterparts in the United States and Japan. In those countries, cryptocurrency exchanges must comply with laws pertaining to security and consumer protection.

Park Yong-kin, a committee member of the National Assembly, has championed stricter regulations since last year. According to local media, his views are now being echoed by other government officials.

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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4.6 stars on average, based on 504 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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