Japan’s FSA approves 11 companies as operators of cryptocurrency exchanges
TOKYO (Reuters) – Japan’s Financial Services Agency approved 11 companies as operators of cryptocurrency exchanges, the financial watchdog said on Friday.
The Japanese government has recognized bitcoin as legal tender in April and required cryptocurrency exchange operators to register with the government.
The move was aimed at avoiding a repeat of a failure in 2014 of Tokyo-based Mt Gox, the world’s largest bitcoin exchange at the time.
The financial watchdog has laid out various requirements, such as building a strong computer system, segregation of customer accounts and checking the identity of customers, a key issue given concerns cryptocurrency could be used for money-laundering.
Trading in bitcoin and other cryptocurrencies among Japanese investors has gained momentum this year, helped by the legal recognition as well as spectacular surges in the price of bitcoin and ethereum.
With the new regulation, Tokyo aims to balance the need to protect investors with the need to support fintech innovations, FSA officials said.
Officials this month said they have no plan to ban ICOs although there have been few such offerings in Japan to date.
Tokyo’s stance is in contrast with those of other regulators in Asia.
Beijing this month ordered some bitcoin exchanges to shut. And earlier on Friday, South Korea’s financial regulator said it will ban raising money through all forms of virtual currencies.
Written by Reuters
Central Banker Reveals Unlikely Next Act: Helping Merchants Mint Cryptocurrency
While the Bank of Russia has long been at the forefront of central bank cryptocurrency exploration, for Vadim Kalukhov, its recently departed director, exploration alone wasn’t enough.
Instead, Kalukhov wanted to move faster than central banks typically do, experimenting and in turn, launching a product. So in May, Kalukhov left the central bank to start something of his own. Flash forward to today and Kalukhov is chief information officer at Crassula, a brand-new blockchain startup that’s anything but ordinary.
In his first interview revealing the project, Kalukhov, who helped develop the Bank of Russia’s masterchain blockchain platform, described how his experience in global finance prepared him to help others do what had previously been the exclusive domain of central banks: mint money.
Kalukhov told CoinDesk:
“The Crassula open system will allow merchants to build add-ons including their own cryptocurrencies.”
Similar to how ethereum enables users to launch tokens through initial coin offerings (ICOs), Crassula is aiming to help corporates (and eventually governments) issue their own cryptocurrencies. While Kalukhov declined to share details about the platform’s construction, he did give insight into a couple features that stand out.
Unlike ethereum, the platform will be designed as a private blockchain solution with a native wallet for digital fiat and cryptocurrencies. The platform is also expected to run code from the open-source Lightning Network, a scaling proposal originally developed for the bitcoin blockchain.
But technology aside, what is perhaps the project’s most interesting trait is its evolution out of an existing payments startup in Russia, one with both existing clients and existing profit.
Indeed, the story isn’t as simple as Kalukhov just launching his own endeavor.
Shortly after leaving the Bank of Russia, Kalukhov began discussing ideas with Daria Dubinina, a co-founder of Payment Ninja, a venture-backed startup that bills its service as “almost free” payments using the Symfony PHP web application framework.
With Payment Ninja’s mission basically the same, save for its use of technology, Crassula was soon spun-off with the goal of creating an ecosystem where users could spend cryptocurrency on everyday products. It wasn’t a huge leap, in that Payment Ninja had already created an ecosystem of merchants and was interested in experimenting with blockchain as a way to make its platform even more useful.
After exchanging a series of “small white papers,” Kalukhov was won over by the idea of a collaborative effort with Payment Ninja.
In interview with CoinDesk, Dubinina described the network, saying:
“The final stage of building the Crassula ecosystem would be an open platform on which each company, no matter if it’s a small business or a big business, a financial organization or a governmental organization – any company – could issue their own cryptocurrencies and build their own payments systems.”
But whereas ethereum has helped startups use the ICO mechanism to raise capital, Crassula hopes to leverage its existing merchants and new clients to create an ecosystem that powers the exchange of goods.
Planning for growth
And for this, existing merchants that are migrating to the Crassula platform could prove highly important. For one, they mean the company is not only generating revenue, but is profitable, according to Dubinina.
As a result of that existing momentum, earlier this month Crassula hired its eleventh employee and first lead blockchain architect, Anatoly Resin, who was previously a core developer on the Decent blockchain.
Yet, building the blockchain platform won’t be cheap, and so to continue growing the team Crassula is planning to launch its own ICO.
Fresh off winning a startup “battle” in Kiev, Crassula plans to formally reveal details about its token sale campaign, which will have a soft cap of $7 million and a hard cap of $35 million, this autumn.
But while this all may seem like an unlikely turn for a central banker, Kalukhov argued that utilizing the more experimental capabilities of blockchains is perhaps best viewed as a matter business.
“We are doing this work because we believe in the project, and we invest our time and our money in order to reach the time when our project is live and it will be easy to deliver this widely to the people.”
Vadim Kalukhov image via Crassula
Written By Coin Desk
One Huge Ethereum Mixer Controlling 65% of All Transactions Volume: Analysts
According to the analysis, over 65 percent of all ETH transactions are generated using temporary addresses. In other words, funds come into the address and leave the address again, usually within an hour, and the addresses are never used again.
The finding, on the cyberFund blog, indicates that an ‘Ethereum mixer’ is moving funds into temporary addresses, mixing them around from address to address, and then outputting them into more fixed addresses on different exchanges. The graphic below indicates the process.
The issue with these transactions is that they represent a massive part of all Ethereum transactions taking place, indicating that funds are being moved rapidly, and for some purpose that is not evidently clear. The analysis that at least one of the following possible options must be true of the mixer.
1. The protection offered to clients by crypto-exchanges: all clients’ funds are mixed so that the funds’ sources cannot be tracked and those holding clean money cannot be unjustifiably accused of any illegal activity
2. A mechanism set in place to protect US residents who wish to avoid control from US regulatory bodies
3. A mechanism used by a large private exchange to preserve the privacy of its clients; this exchange might be operating with fiat money
4. A mechanism used to securely transfer crypto-assets between crypto-exchanges
5. Any kind of Ethereum-laundering scheme
Which of these options is actually the purpose remains to be seen. However, if such a high volume of transactions is being carried out by a single mechanism, it calls into question the market growth of Ethereum and its actual use.
South Korea ICO ‘Ban’: Bitcoin Price, Ethereum Show Market Not Impressed
South Korea potentially “banning” ICOs has unsettled markets Friday, as regulatory statements from earlier this month come back to haunt investors.
Comments from the country’s Financial Supervisory Commission published in local news outlet FN News Sept. 3 hints that it will be illegal to issue digital tokens later this year.
“It is almost a gamble,” the publication quotes an official as saying.
“If there is an unlawful act, a third party has to intervene, but it is difficult to intervene until the transaction volume or price soars.”
South Korea had issued strong warnings regarding ICOs around the time China announced its own full ban on the practice.
As such, some commentators are now saying the negative outlook was effectively priced into the market.
Bitcoin had lost around 3.7 percent in the 24 hours to press time Friday, coming off multi-week highs to retest support at $4000.
In December meanwhile, more stringent identification of virtual currency holders who convert funds to fiat will come into being, with the onus on businesses to ensure they can identify customers behind the conversions.
Banks will also monitor “unusual” cashflow events.
“We will start the transaction by confirming the identity of the bank and monitoring the flow of funds,” the official continued.
“It will facilitate tracking of funds … and provide a basis for preventing money laundering such as suspicious transaction reports.”
Tokenization: The Force Behind Blockchain Technology
In the current era of Blockchain evolution a new concept has emerged: tokenization. Tokenization is an intrinsic part of the Blockchain technology that serves the purpose of platform identification and accessibility.
The power of tokens
Every Blockchain platform is powered by tokens, sometimes also referred to as “coins.” Bitcoin is a token, as is Litecoin, Dash, and other currencies that function over a Blockchain. While tokens can represent money, as in the case of the above, they can also represent other things.
The demand for a particular Blockchain product is usually the main determinant of the value and eventual market price of its token. This is why there is a variation in the prices of different altcoins in the Blockchain environment. For example, Bitcoin is more readily accepted by merchants than Litecoin, and is consequently more valuable.
The force behind Ethereum
Ethereum, despite coming after many older altcoins, remains the third most valuable cryptocurrency in existence behind only Bitcoin and the its recent fork, Bitcoin Cash.
Ethereum’s value is largely determined by the demand for its platform by distributed application (dApp) developers. Many of these developers issue tokens to grant access to their services, essentially building their own Blockchains atop Ethereum’s platform. In many cases, developers pre-sale their tokens as part of an initial coin offering (ICO), and they usually accept Ethereum’s token “ether” as payment.
In essence, the organic value of a given token or cryptocurrency is determined not just by the functionality, but the demand for its Blockchain product.
Blockchains and their tokens
There are numerous Blockchain products in existence claiming to offer different solutions to various problems. Many more are still in the development. Below are some examples of Blockchain products and what they do:
Steemit is a social network that rewards users who participate in various ways. The Steemit token is called STEEM. It is used to reward content creators and curators of the best content on the site.
Dash, which stands for “Digital Cash,” is a fork of Bitcoin that is fine-tuned for more privacy and instant transactions. The platform’s token is called DASH. Dash is also self-funded through its own Blockchain (a portion of mining rewards fund the currency’s development) and features a working governance model.
The token for Zcash is called ZEC. ZCash is a cryptocurrency that grew out of the Zerocoin project which aims to improve anonymity for Bitcoin users. Zcash payments are published on a public Blockchain, but users are able to use an optional privacy features to conceal the sender, recipient, and amount being transacted.
WishKnish is a network of social marketplace communities that allows its users to create storefronts for various kinds of services. The platform also permits individuals interested in discovering products, services and communities that fit their needs. Participation in activities is rewarded in the platform’s local token, Knish.
LAToken is an asset tokenization platform that allows users to convert tangible assets such as real estate or precious art works into tokens, thereby making them sellable in fractions. The token that powers the LAToken platform is the LAT.
Tokens are for identity and investment
The above mentioned are just a few of the numerous cryptocurrencies and the platforms that they represent. While the first three are well-established entities that are listed on major exchanges, the others are still in their developmental stages.
The strength and identity of a Blockchain product is most often represented by the characteristics of its token.
However, while these tokens stand as the identity of their respective Blockchains, offering access to the services or solutions provided by their resident platforms, they also double as digital assets and opportunities for investment depending on how much the community values their platforms.
Written by Cointelegraph