Gibraltar leads on ICO regulation

Gibraltar has been in the spotlight in recent months following the jurisdiction’s milestone DLT regulations. The DLT regulations, which came into force on 1st January 2018, received a warm reception by many in the FinTech space. Other jurisdictions are now keen to address the blockchain technology that is disrupting traditional industries and businesses. They, too, see they need for regulation, and are looking to Gibraltar for inspiration.

In a speech on Friday 2nd March 2018, The Bank of England’s Governor, Mark Carney, stated it was time to “regulate elements of the crypto-asset ecosystem to combat illicit activities”. Gibraltar’s proactive approach has clearly placed the jurisdiction in a unique position as one of only a few jurisdictions to have some form of regulation for this growing industry.

It looks as though Gibraltar will continue to remain in the spotlight as the jurisdiction looks to address concerns surrounding the increasing number of Initial Coin Offerings (ICOs) that are funding blockchain based startups. It has been widely reported in recent weeks that Her Majesty’s Government of Gibraltar and the Gibraltar Financial Services Commission (GFSC) are preparing to release a draft of the world’s first token regulations.

During a presentation at the Gibraltar International FinTech Forum 2018, otherwise known as the Gibfin conference, which took place between 28th February and 1st May 2018, the GFSC provided attendees with more information about the activities that the forthcoming token regulations aim to regulate. The token regulations will regulate the following activities conducted in or from Gibraltar:

  1. the promotion, sale and distribution of digital tokens;
  2. the operation of secondary market platforms trading in tokens; and
  3. the provision of investment advice and ancillary services relating to tokens.

Promotion, sale and distribution of digital tokens

Tokens that are not considered securities, such as utility and access tokens, will be caught by the new token regulations but gifts, donations, virtual currencies (i.e. Bitcoin) and central-bank digital currencies will not.

The FSC clarified that they will not expand the interpretation of what is considered a security in Gibraltar and also have no intention of defining token categories, or the functionality of tokens, either pre or post ICOs. The intention is to ensure that token sale participants’ are presented, in advance, with all relevant information to enable them to make an informed decision.

To be captured by these regulations, the activities will need to be carried out in or from Gibraltar and will include activities:

  • which purport to be or imply that they are made from Gibraltar;
  • are intended to come to the attention of, or be accessed by, any person in Gibraltar;
  • are conducted by overseas subsidiaries of Gibraltar-registered legal persons (in such cases, the Gibraltar person will be liable); or

are conducted by overseas agents and proxies acting on behalf of Gibraltar-registered legal persons, or on behalf of natural persons ordinarily resident in Gibraltar (in such cases, the Gibraltar person will be liable).

It is anticipated that Gibraltar-based token issuing companies will be required to comply with some form of disclosure rules that are yet to be announced. It is expected that the proposed regulations will require adequate, accurate and balanced disclosure of the relevant information to enable potential token sale participants to make an informed decision.

Additionally, token issuing companies will be obliged to collect know-your-customer (KYC) information on their token sale participants in order to comply with financial crime provisions in Gibraltar.

Additionally, entities that wish to conduct an ICO from Gibraltar will need to be sponsored by firms that the GFSC has authorised to perform such a function. Authorised sponsors will possess the appropriate knowledge and experience and will be responsible for ensuring compliance with the part of the regulations. Authorised sponsors will be regulated by the GFSC.

In order to encourage best practice for token sales conducted in or from Gibraltar, authorised sponsors will be required to have codes of practice in place that token sale entities will be required to comply with. Codes of practice may set out such matters as the method for storing, applying and distributing sale proceeds. Codes of practice will require approval from the GFSC and the regulator will establish and maintain a public register of authorised sponsors and their respective past and present codes of practice.

The GFSC will not however regulate:

  • Technology;
  • Tokens, smart contracts, or their functionality;
  • Individual public token offerings; or
  • Persons involved in the promotion, sale or distribution of tokens.

Secondary market conduct

Secondary market platforms, operated in or from Gibraltar, dealing in tokenised assets (including virtual currencies) and their derivatives will be caught by the token regulations. The GFSC aims to:

  • ensure organised trading takes place on regulated platforms;
  • establish transparency and oversight of secondary markets;
  • enhance investor protection;
  • impose conduct of business standards; and
  • encourage competition.

The proposed regulations will set out requirements for:

  • disclosure to the public of data on trading activity;
  • disclosure of transaction data to GFSC; and
  • specific supervisory actions concerning tokens and positions on token derivatives.

This second area of focus will be modelled, so far as is appropriate, proportionate and relevant, on market platform provisions under the Markets in Financial Instruments Directive II and Markets in Financial Instruments and Amending Regulation, otherwise known as MiFID II and MiFIR, which came into effect in January 2018.

It is proposed that the GFSC will authorise and supervise secondary token market operators, and establish and maintain a public register of such operators.

Investment Advice

The provision of advice on investments in tokens, virtual currencies and central bank-issued digital currencies will be covered by the token regulations, including:

generic advice (setting out fairly and in a neutral manner the facts relating to token investments and services);
product-related advice (setting out in a selective and judgmental manner the advantages and disadvantages of a particular token investment and service); and
personal recommendation (based on the particular needs and circumstances of the individual investor).

The regulations will seek to ensure that such advice is fair, transparent and professional. This third area of focus will be similar to the investment advice provisions in MiFID II.

It is proposed that GFSC will authorise and supervise token investment service providers, and establish and maintain a public register of such providers

Watch this space

We are expecting to receive a draft of the much anticipated token regulations in the coming weeks. However, we understand that the draft will only likely include the first area of focus concerning the promotion, sale and distribution of digital tokens with the remaining two elements of the token regulations to follow later this year.

While we are eagerly anticipating the release of the draft regulations, which will mark another significant milestone for Gibraltar, the jurisdiction is not resting on its laurels. Her Majesty’s Government of Gibraltar has presented a progressive bill before its parliament to amend the scope of the Proceeds of Crime Act 2015, the jurisdiction’s main legislative instrument concerning anti-money laundering and counter-terrorist financing provisions. The intention is to bring:

“undertakings that receive, whether on their own account or on behalf of another person, proceeds in any form from the sale of tokenised digital assets involving the use of distributed ledger technology or a similar means of recording a digital representation of an asset.”

within the scope of anti-money lauding and counter-terrorist financing provisions.

These developments are further evidence of Gibraltar’s continued effort to make the jurisdiction crypto friendly and provide safe environment for both business and consumers.

 

Hassans International Law Firm is the largest law firm in Gibraltar and a driving force behind Gibraltar’s crypto boom. It enjoys consistently high rankings in leading legal directories and this year has once again been ranked Band 1 by Chambers & Partners. The Hassans’ FinTech team consists of 12 experienced practitioners co-led by partners Anthony Provasoli and Vikram Nagrani.

 

FBI intercepts Manchester-based drug ring for selling £800k worth of drugs on the dark web

Five students from the University of Manchester indulged in a luxurious lifestyle funded by selling hard drugs such as ecstasy, LSD and ketamine on the dark web.

The gang had a taste for the ‘high life’, boasting of their fondness for expensive champagne while partying in the Caribbean and Amsterdam before the FBI cracked down on the drugs ring.

When police arrested the gang in 2013, they were able to trace £812,000 worth of sales that flowed through the gang’s Silk Road account in bitcoin. This amounted to roughly 8000 bitcoins, which were worth around £90 each at the time. Today this equates to a staggering amount of money due to bitcoin’s rise.

Police have so far been unable to trace the bitcoins, but one gang member did pay off his student loan and buy an apartment in the city of Manchester.

Basil Assaf (26), the proclaimed ringleader, was sentenced to 15 years and three months in prison, James Roden (25) was sentenced to 12 years, Jaikishen Patel ([[[age?]]]) received 11 years and two months, Elliot Hyams (26) was jailed for 11 years and three months and Joshua Morgan (28) received seven years, all for playing their part in the drugs operation.

From May 2011 to October 2013, the gang sold 16.7 kg of ecstasy worth $750,000 as well as 1.23 kg of 2CB, a psychedelic drug more potent than ecstasy, and 1.46 kg of ketamine.

The gang were caught due to information leaked when the FBI busted drugs marketplace Silk Road in 2013. The British police raided Assaf and Roden’s flat on the same day, finding laptops used to access the accounts on the drugs marketplace alongside thousands of pounds in cash.

The gang compared themselves to Walter White from hit TV series Breaking Bad. The court was told this was a running joke among the five students.

Former Guns N’ Roses star goes into crypto

‘Sweet coin of mine’ isn’t going to be Guns N’ Roses next hit single, but their former drummer Matt Sorum has been putting a great deal of effort into the launch of a new crypto payment solution, called Artbit.

The Rock and Roll Hall of Famer, who was also a member of Velvet Revolver, is helping launch the payment crypto for artists, which is built on top of Hashgraph and works via blockchain technology.

The aim of Artbit is for artists to receive their fair share of money after a gig and for that payment to be made into a digital wallet, without any middlemen involved in the transaction.

Although it is still a little sketchy with the details, Artbit has announced that it will work using gamification and augmented reality. It is thought that artists and bands can generate income by posting and hosting live performances. The curating public will also have an option to take home a share of the pie.

Sorum told Yahoo finance that he feels that this new currency is an essential development within the music industry.

He said: “My interest is in cutting the middleman,That’s been something on artists’ minds for years. There’s all these people you got to pay along the way. With blockchain, imagine if you bought a song online for 99 cents and that money was automatically distributed straight to all the contributors—the producer, all the writers of that song.

“With this technology, the money can go into everybody’s wallets automatically, it doesn’t go into a bank account where somebody’s making all that money and interest.”

Sorum added that he believes the current industry isn’t working hard enough for the artists, but cryptocurrencies can change all that.

He added: “Any new or young artist has really got to work really hard to even get on the front page of a platform like Spotify—and even at that point you can’t really monetize your art.

“With Artbit, we’re going to have direct access, people are going to be able to get online right away, not be served a bunch of ads, and have a direct community to be able to monetize their craft now, with no middleman, direct payout, with a wallet, with crypto, and a community that’s safe and secure, powered by Hashgraph.”

There will be a token sale, but no details regarding the ICO have yet been released. Artbit hopes to launch by the end of this year.

Bolster your cryptocurrency portfolio with these five breakthrough altcoins for 2018

Despite early investors making impressive gains with Bitcoin, and many experts predicting that the cryptocurrency will reach as much as $50,000 this year, opinions continue to be divided, with its future as a currency and an investment solution faltering. The project’s ageing architecture and lack of innovation are central in this debate and continue to drive investors and enthusiasts alike into more exciting and innovative projects that are built on more able and scalable blockchain platforms.

Why trust us? Last year we tipped HelloGold, Cindicator, VeChain, Tronix, Request Network, and Utrust as projects to keep your eye on.  See for yourself here.

With that in mind here are a few upcoming ICOs to keep your eyes on in 2018.

Databroker DAO

databroker dao icoGovernments, researchers, companies and individuals are currently maintaining roughly 6 million IoT sensors worldwide, with this number rapidly growing every day. The data collectively generated is worth an estimated $600 billion per year and is simply sitting in storage, locked away.

Blockchain startup Databroker DAO aims to unlock and monetise this IoT sensor data by creating a marketplace for data to be bought and sold. In doing so, these entities can create new revenue streams whilst also making all industries across the board better informed and more effective.

Databroker DAO is planning a pre sale and public token sale, enabling investors to contribute directly. The sale starts on 26 March 2018 and will run until 23 April 2018.

It’s also worth noting that the CEO of Overstock sits on the advisory board alongside three other key advisors, putting the project in a good, well managed environment.

Website: https://databrokerdao.com/

EQUI

EQUI ICO LOGOEQUI aims to be a revolutionary investment platform by bringing venture capital into the modern world.

Powered by Blockchain technology, the platform enables anyone to combine funds and invest in sectors that have previously been accessible only to the rich. This is achieved by purchasing EQUI tokens which open up access to the platform to invest in approved projects. Projects that make a profit also offer a dividend, which is returned to investors via their Ethereum wallet.

EQUI is backed by a number of entrepreneurs with a wealth of experience across many business sectors. This Blockchain startup was co-founded by Baroness Mone of Mayfair, OBE, and Doug Barrowman.

The EQUI pre sale will run from 1 March to 8 March 2018.

Website: https://www.equi.capital/

Skyllz

skyllz icoSkyllz will change the way we access and manage employment in the near future.

With a rapidly growing technology sector that continues to dominate every other job market, the need for a better, more qualified workforce is no longer being met by traditional institutions. What is being taught and learnt in colleges and universities is becoming less relevant, with many opting for self-taught courses instead. This has become all the more popular with online universities, webinars, remote learning resources and YouTube.

Blockchain startup Skyllz hopes to tap into this gap in the market by creating an open source public skills validation platform to showcase, track and rate candidates. This immutable CV will reflect human-based metrics on a global scale that is based on actual skill.

The Skyllz team founded Workkola, an already fully working platform utilising the Skyllz technology.

The pre sale is scheduled for February to March, and the public main sale is going to happen between July and August 2018.

Skyllz has a strong team behind it with a range of advisors from multiple industries to drive the product forward.

Website: https://skyllz.org/

Momentum

momentum icoMomentum makes it easy for brands to create their own cryptocurrency to reward and incentivise customers. It claims to be the world’s first Blockchain-based automation platform that rewards customers with cryptocurrency.

Customers are rewarded for being loyal, telling friends about a product, leaving reviews etc. This creates an incentivised ecosystem where both company and buyer benefit. Customers earn tokens for marketing the brands they love, with the added bonus of trading, gifting or selling tokens on, all from one simple handy wallet.

Momentum spotted a gap in the market due to current loyalty programmes not rewarding customers, as the points have little to no value, expire quickly and sit on customers’ cards unused.

Momentum is already working with some big-name brands such as Burger King and Firelli and has seen a large increase in activity on its apps.

With Momentum already working with real companies, the ICO is the perfect opportunity to invest in an established project.

The public token sale starts on 26 March 2018.

Website: https://momentumtoken.io/

Nexo

NEXO ICO LOGONexo aims to cater for a growing market of cryptocurrency enthusiasts who need access to fiat but don’t want to part with their cryptocurrencies.

Nexo plans to make this easier by offering people an instant overdraft secured by their own cryptocurrency assets. Customers simply import their cryptocurrencies such as Bitcoin into their Nexo wallet, where they are provided with a fiat credit limit. Fiat currencies can be withdrawn using various methods, including bank transfer. It’s a win-win for both parties involved; once the overdraft has been paid back, customers can withdraw their cryptocurrency assets.

Nexo is one of our favourite ICOs this year. It’s been developed by the same people behind Credissimo, a leading FinTech group with a wealth of experience in the finance industry.

The Nexo token sale starts on 1 March 2018, with a fundraising goal of $50 million.

Website: https://nexo.io/

 

CoinShares announces two new flagship crypto investment funds

Crypto investment is nothing new, but CoinShares‘ recent launch of two flagship funds both designed to invest in a diverse range of cryptocurrencies, certainly is.

The two funds: ‘Active’ Fund – a multi-coin, alpha-generating, active strategy; and ‘Large Cap’ Fund – a passive basket fund; represent a natural evolution of market approaches based on the current trajectory of the crypto-asset economy.

CoinShares hopes to provide users with less volatility than other single purpose funds and also aims to provide more of a reward, without the higher risk some would assume to be in place.

Ryan Radloff, CEO of CoinShares suggested that this is the way forward for folks who are looking for a way to invest in cryptocurrencies. He said in a statement: “If you wanted to invest in the internet through a diverse mix of strategies focused on everything from servers, fiber-optics and silicon to search engines, social network start-ups and e-commerce infrastructure – this would be that fund; but for the crypto-economy.

“We are very excited about bringing this fund and Block Asset Management’s expertise to our investor base; both the strategy and team will be a great complement to CoinShares’ growing platform of strategies.”

The experience on the Block Asset team suggests this may be true, with their team holding experience from the likes of Credit Suisse, Societe General, Citibank, UBS, Barclays & Lloyds.

CoinShares are definitely hoping to take advantage of this market, as they have also announced that they would be introducing two other crypto asset funds just a month ago. Thus, it’s not surprising that they are the European leader in crypto-finance, holding over $1b in crypto-assets across their investment products.

This announcement follows the group’s October launch of the first Ether Tracking, Exchange Traded Products on Nasdaq Stockholm. These ETPs now comprise more than $350M of assets less than 4 months post launch.

Potential investors should take note however, that cryptocurrencies typically deal in a very volatile market. Thus, it is advised that investors should only invest if they can afford to do so, as their capital will be at risk and there is no guarantee of a return.

Tether Interview (spoiler: they ignored us)

With the recent media controversy surrounding Tether we reached out to the team with 13 interview questions at the start of December, heres what they had to say ( more precisely didn’t say):

  • The UK government along with banks have been very strict and often reluctant to provide any banking solution to crypto related businesses, often forcing them to look to places like Poland. How do you plan to tackle this with the GBP Tether plans?

Failed to respond.

  • Do you have a approximate date for when the JPY and GBP Tether currencies will be available?

Failed to respond.

  • Matthew Leising in a recent Bloomberg article was concerned about whether the exact amount of Tether ration exists 1-1 dollars within a bank?

Failed to respond.

  • Oguz Serdar claims Tether will not allow him to exchange his $1 million worth of Tether for US dollars and that Tether refused to disclose the bank Tether held the funds in. To avoid confusion how do you respond to this as various sources are claiming that Tether have issued more tokens than it has assets for, which of course is a great concern for those wanting to start using Tether.

Failed to respond.

  • People are very concerned about the link between Bitfinex and Tether, more specifically Phil Potter’s/ Giancarlo Devasini role as per the connection found in the Paradise Paper’s leak. Can you comment on this?

Failed to respond.

  • Bitfinex has hired a law firm to counter claims which you say are untrue regarding the Bitfinex/ Tether connection. Can you elaborate on this?
    Is it possible/ likely that you will be more open/ provide evidence of where funds are held to calm investor concerns?

Failed to respond.

  • When will the full audit of Tether’s assets be available to the public?
    Will you be launching on any exchanges in the future?

Failed to respond.

  • Your recent audit by Friedman LLP has been discredited by many. What have you learnt from this and how to you plan to overcome the naysayers?
    What are Tether’s plans for 2018?

Failed to respond.

  • Do you have any update on the recent “$30,950,010 USDT Tether hack? Are authorities any closer to resolving this?

Failed to respond.

  • Can you provide more information on how Tethers are created. Specifically what determines the creation volume. For example what prompted the creation of $70 million Tethers in Early September?

Failed to respond.

British banks strangle UK crypto-startups

bitcoinDo British banks fear cryptocurrency startups?

We asked Santander, Barclays, the RBS, Metro Bank, Halifax, Standard Chartered, HSBC for their side of the story.

The UK’s financial service sector adds more than £6.6 billion into the economy each year, employing hundreds of thousands of people. The City of London and Canary Wharf are often portrayed as the hub of fintech, with many of the world’s biggest financial firms operating there. With such an influential and active global presence one might think Britain would be at the forefront of blockchain innovation and adoption. Unfortunately the reality is quite the opposite, with banks demonstrating cartel-like behaviour and overplaying the money laundering card to actively discredit and cut off these startups.

With the recent exponential growth of blockchain technology, many of these startups are seeking to create innovative financial products by mixing old money with new − and this means obtaining a bank account like any other business. Unfortunately, in the UK, adoption has been thwarted at every turn by the country’s banking elite, often forcing these firms to seek banking partnerships elsewhere in Europe, such as in Poland, Bulgaria, Latvia and Estonia, and thus the startups often end up based in those countries too.

Blockchain is undoubtedly one of the most exciting technologies of our time and it will probably change the world we live in by redefining and streamlining every industry, be that through global distributed ledgers, smart-contract-based automation or even global collaborative systems and resource sharing. Some examples include:

  • charities using blockchain technology to provide transparent processing of donations/aid relief,
  • green energy startups using blockchain to offer transparent, distributed peer-to-peer energy, resulting in a national grid that allows anybody to generate, sell and consume energy,
  • medical research institutions that use the technology to harness, combine and manage computing power. This allows anybody to donate their idle laptop/computing power to a distributed network to help process things such as misfolding and protein aggregation, to help find cures for Alzheimer’s, Huntington’s, cystic fibrosis etc.

Where does the government stand on this?

Earlier this year even HM Treasury’s special envoy for fintech, Eileen Burbidge, said:

“The UK is already the best place in the world to start, grow and scale a FinTech company”.

Chancellor of the Exchequer, Philip Hammond, said:

“The FinTech sector is one of our fastest growing sectors, adding more than £6.6 billion into the UK’s economy and attracting more than £500 million of investment.”

And yet, despite these boasts from the UK government, the country’s own banks downplay and stigmatise the technology and refuse to service any crypto-related companies.

It’s a Catch-22 situation: on the one hand you have the UK government harping on about fintech and IoT while, on the other hand, British banks, supported by the government, are flat-out refusing to work with such companies by denying them basic access to services such as bank accounts without any justifiable reason.

Her Majesty’s Treasury is reluctant to intervene in any banking decisions, stating:

“Which businesses banks choose to offer services to is a commercial decision for each individual bank and the Government does not seek to intervene in these decisions.”

“The Government encourages banks to take a risk-based approach in their management of money laundering and terrorism financing risk, to ensure that the measures they take are proportionate and effectively mitigate the risks that they face.”

“We recognise the significant benefits that virtual currencies and the related technologies could bring, as well as the potential risks such as money laundering and terrorist financing.”

It would appear that change is on the horizon, as the Financial Conduct Authority, which operates independently of the UK government and regulates the financial industry, carried out sandbox testing with blockchain firms.

Following a feasibility report in 2015, the Financial Conduct Authority (FCA) established a regulatory sandbox, which enables financial firms to test innovative products, services and business models in a live market environment while adhering to appropriate safeguards. But, unfortunately, multiple participants in the sandbox programme, the aim of which was to create innovative services with distributed ledger technology (DLT) were given “blanket refusals” from banks and “denial of banking services”. Furthermore, even individual enthusiasts exploring blockchain technologies have been penalised and deterred through bank account closures and warnings.

Due to the reluctance of banks to open accounts for cryptocurrency-related firms, the FCA is concerned about banks hindering competition, especially after many banks flat-out refused several start-ups entering the FCA’s sandbox programme to test their business models under its guidance.

The government is essentially taking a backseat in the matter and giving banks free reign on blockchain adoption, or rather the lack thereof.

“We are concerned that denying certain customers bank accounts on a wholesale basis causes significant barriers to entry and could lead to poor competition in certain markets,” said the FCA.

“We work to ensure that the UK financial system is a hostile environment for money launderers. However, we are clear that effective money laundering risk management need not result in wholesale de-risking, and are aware of the risks this may pose to innovation and competition and intend to continue our focus on this issue,” said the FCA.

Speaking to the Financial Times, James Godfrey, head of capital markets at BlockEx, said:

“Nobody will give us a bank account in the UK.”

“Having [Bank of England governor] Mark Carney standing at the front of the shop and saying ‘raa, raa, fintech’ just doesn’t do it for me.” James continued to say that London-based Metro Bank shut its UK account, forcing it to rely on a lender in Bulgaria.

We reached out to the Bank of England for a comment on this, and they said:

“We do not have a comment for you on this issue.”

We spoke to Jamie McNaught, founder of Solidi, a peer-to-peer cryptocurrency exchange based in the UK:

“Our cryptocurrency exchange has implemented some of the most advanced AML and fraud detection systems in the industry; this has resulted in our fraud rate being below £3 per £1,000,000, much lower than card fraud statistics.”

“Multiple banks have refused our banking applications without a plausible reason; this is not just a problem for blockchain startups but also other innovative products in fintech. We are even part of the FCA Sandbox programme and with this accolade we’re still having little success with banks.”

We spoke to Marc Warne, the founder and CEO of Bittylicious:

“I can confirm the banks have remained hostile for the last five years; there are no crypto-companies allowed to open bank accounts in the UK [including those selling or operating ATMs].”

“Bittylicious and other companies in London regularly have meetings with representatives from the FCA to see if there is any power to change this – it’s a slow process but we’re trying hard.”

“The government is encouraging technology like this but the UK only has five real banks: they appear to have the same policies and block our industry quite easily.”

“Some exchanges are using banks on the continent too − it’s expensive and a waste of money, but there are ways around this.”

Jesse Powell, CEO and co-founder of Kraken Digital Asset Exchange:

“There are banks that see bitcoin and digital assets as an innovation they want to explore and leverage for good. These are the banks we choose as our partners. We choose to partner with the banks that are courageous enough and have the foresight to see opportunity and possibility in what’s new and different.”

UK Finance

What is UK Finance? It represents nearly 300 of the leading firms providing finance, banking, markets and payments-related services in or from the UK. They said:

“We can’t comment on individual banks and their activity.”

We contacted Santander, Barclays, the Royal Bank of Scotland, Metro Bank, Halifax, Standard Chartered and HSBC, among others.

Here’s what they had to say:

HSBC

“HSBC is monitoring the development of virtual and digital currencies such as Bitcoin as well as regulations governing their use. In countries where use of virtual currencies is permitted by the authorities, we expect any customer transacting in them to comply with all applicable laws and regulations, just as they would for transactions denominated in traditional legal tender. HSBC does not process virtual currency payments and we do not bank virtual currency exchanges.”

Santander

“As an innovative bank, we are interested in new technology and emerging currencies. In line with our regulatory obligations and industry best practice, any company, big or small, will be risk assessed when applying to open an account with us.”

“Santander is a supporter of new businesses and start-ups in the UK and across the globe, making significant investments through our venture capital, Santander Innoventures fund, based in London.”

Royal Bank of Scotland

Failed to respond to our enquiries.

Metro Bank

“We review all applications on a case-by-case basis.”

Halifax

Failed to respond to our enquiries.

Bank of Ireland

We are not in a position to comment.

Standard Chartered

Failed to respond to our enquiries.

Lloyds Bank

Failed to respond to our enquiries.

Co-operative Bank

“The Bank has been through a recapitalisation exercise as we look to rebuild our business, and our strategy is to focus on becoming a smaller retail and SME bank. As such, more specialist areas of finance and banking is not part of our current strategy, which includes new sectors such as blockchain at this moment in time,” said Paul Lawler, Head of Values & Ethics and Communications.

Yorkshire Building Society

Failed to respond to our enquiries.

Deutsche Bank

Failed to respond to our enquiries.

Conclusion

Based on the findings of the FCA, it would appear that some banks have been complicit in anti-competitive practices. The law states that businesses can be fined up to 10% of their worldwide turnover and sued for damages if they are found to be involved in anti-competitive activities. It’s been widely said that the larger banks have formed a “cartel” to block out crypto-businesses.

Hostility has been ripe for many years now (we covered the same issue back in 2014) and yet nearly four years on nothing has changed, with mainstream banks continuing to suffocate blockchain companies across all sectors.

What has changed, however, is the flexible and adaptive nature of some smaller banks in Europe that have started to embrace crypto-businesses. If things continue as they are over the next ten years we will probably see London lose its fintech crown to a more blockchain-friendly country somewhere in Europe.

Steam drops Bitcoin support

Washington-base game developer and distribution company Valve will cease to accept Bitcoin as a valid payment method on Steam due to high transaction fees but. The outfit may re-evaluate in the future.

In a blog post today, Valve said “Steam will no longer support Bitcoin as a payment method on our platform due to high fees and volatility in the value of Bitcoin.”

When the firm started accepting Bitcoin sometime ago the network transaction fees was roughly $0.20, in recent days this has reached around $20 making the purchase of games extremely expensive.

Back in April 2016 Valve partnered with BitPay to utilise their payment gateway enabling customers to pay in Bitcoin. They hoped it would provide a fast, cheap and alternative solution for emerging markets such as China, India and Brazil with no risk of chargeback fraud that comes with card payments. Fast forward today it has become the complete opposite in terms of the currency becoming an overly expensive method of payment.

Valve are stating they have no control over transaction fees due to BitPay automatically presetting them when generating invoices, which are automatically adjusted depending on network congestion.

“When checking out on Steam, a customer will transfer x amount of Bitcoin for the cost of the game, plus y amount of Bitcoin to cover the transaction fee charged by the Bitcoin network,” the company said. “The value of Bitcoin is only guaranteed for a certain period of time so if the transaction doesn’t complete within that window of time, then the amount of Bitcoin needed to cover the transaction can fluctuate considerably. This value has been increasing significantly.”

“At this point, it has become untenable to support Bitcoin as a payment option,” Valve said. “We may re-evaluate whether Bitcoin makes sense for us and for the Steam community at a later date.”

Valve added support for Steam purchases with bitcoin in 2016 as part of a partnership with company Bitpay.

In the last few months alone Blockchain technology has rapidly advanced with newer technologies, Valve may look into Ethereum which would offer a faster checkout process.

Old money meets new: Revolut merges mobile banking with crypto trading

London-based mobile banking outfit Revolut is merging traditional day-to-day fiat spending with digital currencies, enabling customers to buy, sell, trade and hold cryptocurrencies including Ethereum, Litecoin and Bitcoin in 130 currencies in what the firm claims to be a world first.

Aiming to fill the void between digital currencies and old money, customers who have an debit card attached to their Revolut account can purchase goods in real time and have the funds deducted from their accounts in fiat or crypto. More importantly small transactions such as paying for groceries at the supermarket, parking etc are encouraged and work seamlessly at very reasonable rates.

Now, spending Bitcoin with a debit card is nothing new, firms such as Xapo, CEX and CryptoPay have been providing this for some time. The key difference with Revolut is that customers are now be able to tap into extremely low exchange rates resulting in ‘fee-free’ transactions with real exchange rates in over 130 currencies.

Revolut also removes the inconsistencies associated with Bitcoin/ fiat conversions which can be time consuming and expensive, particularly when the exchange is operating in other jurisdictions. These exchanges charge anywhere from 5 percent to 10 percent per transaction whilst Revolut offers a fixed fee of just 1.5 percent.

Revolut’s platform launch comes as Bitcoin continues to blow past ATH’s like $10,000, fight for its legitimacy in the eyes of mainstream users and governments and prepares for futures trading this month. With the Commodity Futures Trading Commission (CFTC) approving Bitcoin futures, cryptocurrencies has grown up considerably since their less stellar dark web days and with services like Revolut now available are ready for mass adoption.

“Despite being one of the hottest trends in the world right now, getting exposure to cryptocurrency has notoriously been time-consuming and expensive,” Storonsky writes.

Nikolay Storonsky, the CEO of Revolut said at this years Techcrunch Disrupt conference in Berlin that users will be able to access the new cryptocurrency trading features on the app from this Thursday.

The company has an excellent track record when it comes to saving customers millions on foreign exchange fees, citing more than $160 million in customer savings since launch. The app is currently servicing over 1,000,000 users in Europe and is growing exponentially and now the company ready to roll out its mobile banking to the masses.

Introducing ‘petro’ – A new oil-backed cryptocurrency being launched by Venezuela

In a daring attempt to boost Venezuela’s economy, the country’s president Nicolas Maduro has announced the introduction of a new cryptocurrency which will be backed-up by Venezuela’s oil reserves.

The currency, which is imaginatively called ‘petro’, was announced by the left-leaning leader on Sunday with an emphatic statement of “the 21st century has arrived.”

Critics may point to the lack of specifics in regard to how this cryptocurrency will function, but nonetheless, President Maduro was adamant that it will be a success during this televised statement.

During the broadcast, he added that “Venezuela will create a cryptocurrency” which will be backed by their natural reserves of oil, gas, gold and diamonds.

The president also referred to the US-led sanctions currently in place and how petro will help his country “make financial transactions and overcome the financial blockade.”

The announcement wasn’t met with universal acclaim however, with political opposition stating that such an act will have to overcome copious amounts of red tape before it becomes official.

oil gas
The “petro,” a cryptocurrency backed by oil, gas, gold, and diamond reserves.

This move further indicates that the sanctions towards Maduro’s government that were put in place by Pres. Trump’s administration earlier this year are hurting Venezuela’s economy. Those moves from the USA include sanctions on officials from the country, PDVSA executives and Venezuela’s debt issuance.

The bolivar, which is the current currency in the country, is at a weak point and the country is struggling to move money through international banks.

Optimism regarding President Maduro’s move has been muted, for many reasons, including his poor economic record.

The bolivar has been on a constant slide as of late, with government controls and the over printing of currency leading to a depreciation rate against the dollar of almost 60 per cent during the last month.

Poverty stricken natives aren’t overly positive about this announcement either, as many think that Maduro’s decisions are creating a complete economic bust.

Economist and opposition lawmaker Angel Alvarado told Reuters that his opinion of the president does not amount to much, adding: “It’s Maduro being a clown. This has no credibility.”

Fellow opposition lawmaker Jose Guerra added to the dissenting voices, telling Reuters that he can’t envisage any future for the cryptocurrency.

However, President Maduro has stated that he is trying his utmost to fight for his country in a monetary “war”.

The recent surge in other digital currency’s value (especially Bitcoin) have without a doubt influenced Maduro’s decision to make this move. Relations between Venezuela and the USA will most likely to continue to be tense, as Maduro looks for alternatives to boost his country’s economy.