Breaking: UK bans sale of Bitcoin Ethereum and XRP derivatives to retail consumers

Breaking: UK bans sale of Bitcoin, Ethereum and XRP derivatives to

retail consumers

Breaking: UK bans sale of Bitcoin, Ethereum and XRP derivatives to retail consumers

The market for crypto-derivatives, e.g. BitcoinEthereumXRP and other cryptocurrencies has taken a severe hit. The UK Financial Conduct Authority (FCA) has banned its trading for retail customers.

In the official announcement, the regulator declared that the above products are “harmful” to consumers for 5 main reasons.

Firstly, the regulator stated that the underlying assets do not have a reliable basis to protect their value.

(Editor Comment: How about letting the Free Market determine the Value instead of Manipulative Regulators as in the Fiat currency market.)

Second, the FAC believes that abuse, illegal activities and financial crime are widespread in the secondary crypto market.

(Editor Comment: Abuse, illegal activitties and financial crime have been widespread in Fiat Currencies forever. How about banning them? (Coming soon) )

In addition, the FAC argues that cryptocurrencies are extremely volatile and that end-users “do not have a sufficient understanding” of the underlying assets.

(Editor Comment: The Stock Market can be extremely volittile and many end-users have little understanding of the underlying assets.)

Finally, the FCA claims that investing in derivatives of cryptocurrencies is “harmful” investment.

(Editor Comment: Harmful to who? The Regulators because they don't have manipulative conttrol?)

The regulatory authority states:

These features mean retail consumers might suffer harm from sudden and unexpected losses if they invest in these products (…) which includes well-known tokens such as Bitcoin, Ether or Ripple (XRP). Specified investments are types of investment which are specified in legislation. Firms that carry out particular types of regulated activity in relation to those investments must be authorised by the FCA.

UK’s FCA targets Bitcoin, Ethereum and XRP derivatives

The UK regulator claims that the ban on crypto derivatives will save UK consumers around £53 million a year.

(Editor Comment: It will also keep the UK consumers that have made profits from receiving them.)

In addition to the ban, the FCA has determined to prohibit the distribution and marketing of any derivatives to UK consumers. Specifically, the FCA mentions the following derivatives: options, futures, contracts for difference (CFDs), and exchange-traded notes (ETNs).

The measures apply to companies and firms “operating within or outside the United Kingdom”. The Executive Director of Strategy and Competition for the FCA, Sheldon Mills, stated:

This ban reflects how seriously we view the potential harm to retail consumers in these products. Consumer protection is paramount here.

(Editor Comment: This ban reflects how seriously they view manipulative Control over consumers. Regulator's Manipulative Control is paramount here.)

Significant price volatility, combined with the inherent difficulties of valuing cryptoassets reliably, places retail consumers at a high risk of suffering losses from trading crypto-derivatives. We have evidence of this happening on a significant scale. The ban provides an appropriate level of protection.

(Editor Comment: This ban provides nothing except Regulator Control over the UK cittizens.)

According to the FCA’s announcement, the prohibitive measures will take effect from 6 January 2021. The regulator has asked companies and firms that trade in crypto derivatives to stop their operations before this date. In the meantime, the regulator advises investors to “stay alert” for crypto-scams. From now on, they qualify all companies offering crypto derivatives products to retail consumers as “possible scams”.

(Editor Comment: It takes one to know one.)

In a separate document, the FCA also clarified that its measures will affect firms that issue or create crypto derivatives, firms that distribute them (brokers, financial advisors, and investment platforms), marketing firms that reference the referred derivatives, traders, consumers, and retail consumer organizations. With regard to consumers, the FCA states:

Retail consumers with existing holdings can remain invested following the prohibition, until they choose to disinvest. There is no time limit on this, and we do not require or expect firms to close out retail consumers’ positions unless consumers ask for this.

(Editor Comment: Fascism Marches On in the UK.)

 

(Editor Note: this Post is based on information collected by Reynaldo of Crypto News Flash)

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Chris Corey

Bitcoin Halving: How the Miners are Faring So Far

Bitcoin Halving: How the Miners are Faring So Far


On May 11, 2020, Bitcoin successfully executed its third block reward halving.

Bitcoin halving events usually occur every four years, and the first and the second events took place in 2012 and 2016, respectively. Since miners’ rewards for verifying blockchain transactions are usually trimmed by 50% following a halving event, past events have forced miners to adopt numerous changes to cater for the drops in profitability. What about the recent halving event? How have things unfolded for miners this time around?

Mining Inefficiencies

One obvious impact of a halving event is the reduced revenues miners receive. To remain profitable, miners are expected to increase their operational efficiencies, and one probable way of doing so is shifting to new mining equipment with more hashes per second and reduced power consumption. According to Ramak J Sedigh, Pouton Mining’s CEO, miners who are still using old generation equipment may be forced out of business unless the price of Bitcoin reaches an all-time high after the May 11 halving.

Price Didn’t Move As Expected

While it was expected that the third halving would have a significant negative impact on Bitcoin prices given that it occurred during the COVID-19 chaos, it was actually eventless. On the contrary, the prices have continued to climb. And because of the BTC price stability, more investors may even be lured to mount for bullish positions in the coming months.

Mining Difficulty Adjustment

BTC blockchain usually adjusts mining difficulty after every 2016 blocks following a drop or rise of the hash rate. So, when some miners close shop due to reduced block rewards, the BTC mining difficulty is also expected to automatically adjust to cater to block interval movements. Over the years, this mining difficulty adjustment has prevented a potential cascade of miner capitulation, and this is what’s expected to happen after the third BTC halving.So, How Exactly Are Miners Faring and Where Do They Go From Here?

What we have witnessed so far is a mini death spiral scenario. While revenues have been reduced and some miners forced off the chain, there is still some light at the end of the tunnel:

  • BTC price has continued to rise.
  • The cost of transaction fees is increasing, thanks to network congestion. Higher transaction fees translate to more revenues for miners.
  • Power costs are expected to go down with the onset of the monsoon season in China.

Should miners’ revenues reduce further, there are still other steps they can leverage to stay afloat. For instance, they can scale up colocation services and earn extra revenue from hosting and power fees. They can also upgrade their equipment to lower potential exposure to price actions.

Some of these strategies were discussed in the recent online conference organized by Terracrypto on May 19, 2020. They made some valid points that are noteworthy, such as the fact that the hash rate distribution could be another option for increasing mining earnings after the recent Bitcoin halving. This method could allow miners to get higher earnings per tera hash even after the halving. At this point, only the miners will have to deal with this new development. Bitcoin brokers, such as Tenkofx, and traders will continue their daily routine with the hope of taking advantage of the situation. Even if the profitability of BTC mining reduces after the third halving event, the hash rate may not experience significant hikes. That said, the stability of BTC price in the coming months and the ability to adopt efficient equipment will be key to ensuring that the mining business remains profitable.

Article Produced By
Bill Adams

Bill Adams has been into currency trading for over 5 years. After taking a short course about Forex and Cryptocurrency, he decided to put his knowledge to good use as a writer and trader at Tenkofx. His educational background in Business Administration and Economics has given him a broad base from which to approach Forex and Cryptocurrency topics.

 

https://cryptocurrencynews.com/bitcoin-halving-miners-faring/

Chris Corey

SEC brings John McAfee to court over ICO promotion

The cybersecurity millionaire and former presidential candidate sees new additions to his legal woes.

Update: The Justice Department reports John McAfee has been arrested in Spain for tax evasion and is awaiting extradition to the United States.

On Monday, the U.S. Securities and Exchange Commission filed suit against John McAfee for allegedly promoting initial coin offerings (ICOs) without disclosing that the ICO issuers were paying him, a violation of U.S. securities law.

Per the complaint: "From at least November 2017 through February 2018, McAfee leveraged his fame to make more than $23.1 million U.S. Dollars ('USD') in undisclosed compensation by recommending at least seven “initial coin offerings” or ICOs to his Twitter followers."

The SEC mentions seven unidentified ICO issuers who privately communicated with McAfee's team to get him to publicly endorse their ICOs in exchange for payment in those coins and in Bitcoin. This is illegal, and has previously previously provoked the commission to go after celebrities like DJ Khaled and Floyd Mayweather, who also promoted ICOs without disclosing their financial interests.

The SEC's complaint refers to a famous moment in McAfee's long history of outlandish predictions for Bitcoin's price. He ultimately walked back those predictions and claimed he had only been trying to draw public interest in BTC.

 

written by Kollen Post

https://cointelegraph.com/news/sec-bring-john-mcafee-to-court-over-ico-promotion

Chris Corey

ADVN Stock Exchange: Bitcoin May Surfer Major Price Crash before November

ADVN Stock Exchange: Bitcoin May Surfer Major Price Crash before November  

Chris Corey

Bitcoin use rise in Egypt amid economic recession

People continue to turn to Bitcoin and other cryptocurrencies to boost their profits even amid a pandemic.

As the COVID-19 pandemic pushed the Egyptian economy into recession and deepening unemployment, more and more Egyptians see the benefits of trading and mining Bitcoin as an alternative source of income.

According to Al-Monitor, many Egyptians, particularly young people, are interested in cryptocurrencies. Wael al-Nahhas, an economist and financial advisor to several investment institutions in Egypt, said:

“Many young Egyptians started investing in small amounts despite the increase in the value of the bitcoin. They started mining Satoshi, which is 100 millionth of a bitcoin, and on a daily basis they are making profits of 4% to 5% from the difference between buying rates during the timing of demand decline and selling rates at the time of peak demand, besides some quarterly or yearly profits from unexpected hikes in bitcoin rates.”

Unemployment in Egypt jumped from 7.7% during the first quarter of 2020 to 9.6% during the second quarter, meaning more than half a million Egyptians have lost their jobs, recent numbers from the Egyptian Central Agency for Public Mobilization and Statistics said.

Bitcoin trading then looks very attractive.

Muhammad Abd el-Baseer, a Bitcoin miner and member of the Bitcoin Egypt Community, said other factors also made it easier for people to turn towards Bitcoin. He said the move to work from home, reducing working hours, and new curfews encouraged many Egyptians to invest in Bitcoin in their spare time. He estimates more than 16,000 Egyptians have joined the Bitcoin Egypt Community. However, he noted this number could be higher as people may teach their friends and family how to invest in cryptocurrencies.

But while more Egyptians become interested in mining and trading cryptocurrencies, many are concerned that people could be targeted and accused of fraud without proper legislation. A law clarifying what activities can be considered legal or not around cryptocurrencies could come soon, according to experts.

 

written by Husayn Hashim

https://cointelegraph.com/news/bitcoin-use-rise-in-egypt-amid-economic-recession

Chris Corey

KuCoin CEO claims hacking suspects identified

They’ve already gotten the police involved.

As the fallout from the hack on its platform continues, KuCoin said it has identified suspects and have now officially involved law enforcement in the investigation.

KuCoin CEO Johnny Lyu tweeted on Oct. 3 that the exchange now has substantial proof that identifies who hacked the service on Sept. 26.

Lyu added that as of Oct. 1, KuCoin has managed to wrestle another $64 million in assets from suspicious addresses with the help of its partners in the industry. This brings the total value of recovered assets to $204 million.

The exchange is also slowly coming back to full functionality, said Lyu, and has reopened deposit and withdrawals for 31 tokens. Services for BTC, ETH, and USDT will follow.

The KuCoin hack is the first major case of a decentralized exchange being used to launder funds. It’s estimated that around $200 million in assets were stolen, but analysts fear more tokens could’ve been comprised.

 

written by Emilia David

https://cointelegraph.com/news/kucoin-ceo-claims-hacking-suspects-identified

Chris Corey

Crypto ‘Is Now Finally Being Taken Seriously’ By Taxman

Crypto 'Is Now Finally Being Taken Seriously' By Taxman


The major consulting company, PwC said that the increased interest in cryptoassets from tax authorities and other regulators shows that this asset class is now finally being taken seriously.

(Updated at 14:59 UTC: the new last paragraph has been added). "What our research shows is that the guidance issued by many tax authorities is already getting dated. Yes – it is important that people know how to account for tax on the trading of bitcoin and other cryptocurrencies but that is really crypto tax 101," Peter Brewin, Tax Partner, PwC Hong Kong, was quoted as saying in a press release. However, he stressed that in nearly all jurisdictions the crypto industry is still lacking principles-based guidance that is fit for the new decentralized economy.

Today, PwC released its first annual Global Crypto Tax Report that shows that few or none jurisdictions have issued guidance on crypto borrowing and lending, decentralized finance, non-fungible tokens, tokenized assets, and staking income. "The PwC survey reveals that the most common treatment is to view cryptoassets as a type of property. Often this means that spending these for acquiring goods and services leads to a tax charge on disposal. This will continue to act as a major impediment to mass adoption of many crypto assets as a means of payment, unless technology solutions can be found to ease the administrative burden for users," the company said.

It also published the annual PwC Crypto Tax Index which ranks jurisdictions based on how comprehensive their crypto tax guidance is. Liechtenstein tops this year’s rankings. "Having specific crypto tax guidance is an essential building block of the continuous institutionalization of the crypto ecosystem," Henri Arslanian, PwC Global Crypto Leader, concluded. Meanwhile, as recently reported by The Wall Street Journal, the US Internal Revenue Service is making it a lot harder to pretend you don’t have bitcoin or other cryptoassets hidden away somewhere. They plan to alter the standard 1040 form by putting this question on the front page: At any time during 2020, did you sell, receive, send, exchange or otherwise acquire any financial interest in any virtual currency? The taxpayer must check the box "Yes" or "No."

At the same time, there was mixed news for the Japanese crypto industry as the regulatory Financial Services Agency (FCA), the body that polices the nation’s crypto companies, made no mention of the industry in its latest tax reform request submission. The FCA periodically passes tax reform requests on to the Ministry of Finance, which then has the power to recommend to parliament and the cabinet that these become enshrined in law. But per media outlet Coin Post, the FCA has made no mention of crypto tax reform – meaning that campaigners for more lenient crypto tax requirements could face frustration. However, on the plus side, the FCA’s silence on the matter could also indicate that crypto tax hikes are not on the horizon in the foreseeable future.

Article Produced By
Tim Alper

Tim Alper is a British, South Korea-based journalist, a regular contributor to Cryptonews.com, who covers cryptocurrency and blockchain related news daily, writes in depth analysis pieces about the latest trends in the cryptocurrency and blockchain space. Tim has over 12 years of media experience. He has written for the BBC, the Guardian, the Jewish Chronicle, Chosun Ilbo and many other media outlets, covered cryptocurrency and blockchain related news. He has also collaborated on media projects with the likes of Samsung, Sony, LG, Hyundai, Korean Air, TÜV SÜD and Shell.

https://cryptonews.com/news/crypto-is-now-finally-being-taken-seriously-by-taxman-pwc-7875.htm

Chris Corey

Top 4 Risks DeFi Investors Face

Top 4 Risks DeFi Investors Face


Impressive growth in the DeFi (decentralized finance) market since the start of the year has shown us that there is a high demand for yield-generating protocols, despite the risky nature of these new financial products.

DeFi’s value proposition is easily apparent: borderless access to a host of financial services provides the user with a significant upside while simultaneously increasing their financial sovereignty. Financial inclusion, cost efficiency, composability, and readily available liquidity are among the opportunities created by various DeFi projects. Even if – for now – it’s mostly about yield generation and high risks.

These risks are typically grouped into four major categories:

  • Coding risk
  • Oracle/centralization risk
  • Financial risk
  • Regulatory risk

Coding risk

Coding risks refer to the attack vectors that can be exploited due to the underlying code that supports the protocol or platform. DeFi is simply a suite of software, created by lines of code, that supports a host of financial services. Given the complex nature of DeFi protocols, it is not uncommon for there to be errors in the code that can provide malicious parties with an attack vector through which they can steal funds (and they do). However, outside of the obvious risk of losing funds through a hack, coding risks also pose a significant risk to the greater DeFi ecosystem. Due to the composability in DeFi, if one protocol is unstable, there may very well be a risk for the entire connected ecosystem.

In its most recent report, The 3rd Global Cryptoasset Benchmarking Study, the Cambridge Centre for Alternative Finance explained this risk stating: “Stacking and composability of smart-contracts also pose a risk. Should an underlying smart-contract break then the stack may fall like a house of cards.”

Oracle/centralization risk

Many of the protocols within the DeFi space are dependent or make use of a centralized tool. Due to the very nascent nature of the DeFi sector, the developing teams have systems in place that confer certain power to a centralized party to reduce inefficiencies or reduce attack vectors. Ironically, while these centralized systems provide the developing platform with some advantages, they are also a significant risk for the functioning of the ecosystem. (Learn more: Why DeFi Isn’t Always As Decentralized As You Might Think) Take, for instance, Oracles, which are leveraged by a number of Automated Market Makers (AMMs) and decentralized exchanges (DEXs), typically receive data from a single source. This can pose a risk as it is trivial for a malicious party to take control of the singular source of data and manipulate the market to their profit.

While it is important to note that most developer teams are focused on phasing out the centralized aspects of their ecosystems over time, these tools still pose risks while they are in place. According to the Cryptoasset Benchmarking Study, “Oracles, either hardware or software, funnel real-world data to the smart contract. As several attacks targeted at decentralized protocols have shown, oracles are a possible source of systemic risk and their data feeding role is prone to manipulation.”

Financial risk

DeFi protocols are based on public blockchains. These blockchains typically have a native digital asset. The price performance of the asset of the supporting blockchain is likely to affect the value of the holdings locked in a DeFi protocol. While this may lead to profit, it is also possible that there are losses. Additionally, there is a risk of Impermanent loss (IL). Impermanent loss refers to the phenomenon where tokens held in an AMM are seen to have a different value than they would if they were being held in a wallet. Due to the synergistic events that occur in an AMM to keep the ecosystem functioning, one may find that his holdings are of less value in the AMM than if they had just kept the holdings in a wallet.

The Balancer Protocol defines IL as “the percentage by which a pool is worth less than what one would have if they had instead just held the tokens outside of the pool.” It is important to note that IL is seen to balance itself out the longer a user participates in an AMM. However, it still remains a risk.

Regulatory risk

Just like the greater cryptoasset sector, the DeFi industry is subject to an uncertain regulatory environment. Due to its nascence, the blockchain industry is under intense scrutiny from regulators who are tasked with protecting the greater public. Unfortunately, due to a combination of factors, such as a lack of understanding and the complexities in technology, some regulators and jurisdictions are not in favor of the DeFi space. Fortunately, this issue is likely to be alleviated with time. “As the space grows, the response of regulators to decentralized financial applications is a regulatory risk that needs greater study and understanding,” the researchers the Cambridge Centre for Alternative Finance concluded.

Article Produced By
Alex Lielacher

Alex is a former bond trader who now works in blockchain media. He is a regular contributor to Cryptonews.com, among several blockchain news publications where he shares his insights on cryptocurrency investing and blockchain innovation. He has been following bitcoin since 2011.

https://cryptonews.com/exclusives/top-4-risks-defi-investors-face-7892.htm

Chris Corey

Where is Blockchain Not Needed?

Where is Blockchain Not Needed?


A consensus has built in the last few years that blockchain is going to continue to broaden its impact in modern society. Once tied exclusively to bitcoin, the technology has already become more widely useful, and most seem to expect that this trend will continue.

 

For our part, our take on ‘The Next Industries Blockchain Will Transform’ included talking about gaming, healthcare, and real estate. All of these are industries in which the rapid, affordable, and secure transfer of data is increasingly essential, making them natural fits for blockchain technology. Some will take the idea further than even these major aspects of modern life, however. For instance, Newsweek covered the “new internet” potential that some see with blockchain, essentially suggesting that the technology can re-democratize online information, and help to bring about a more decentralized online experience. Given ideas and industries like these that come up in these discussions, it’s becoming easy to assume that blockchain is gradually going to change our lives in virtually every area in which the transfer of information and/or value occurs. It’s almost more sensible at this point to ask where blockchain won’t be needed than where it will be. So we thought we’d do just that, and look at a few tech-related parts of life in 2020 that probably won’t be jumping on the blockchain bandwagon.

Internal Financial Management

There’s a temptation, particularly among those who are only just coming to understand the blockchain, to think that it can and should be used for any and all financial dealings. However, the truth right now is that most businesses don’t really need a tool like the blockchain — particularly where management of internal finances is concerned. A look at whether companies need blockchain by Hackernoon presented a helpful infographic on this topic, suggesting questions company owners should ask themselves to determine whether or not blockchain implementation is necessary. And most of these questions concern needs for exceptionally rapid transactions, contracts about value transactions, and work with digital assets. There’s virtually no consideration of in-house finances, indicating that while it may sound like an interesting idea for a business to record financial data via blockchain, it’s not entirely necessary.

Content Management

In a sense, many people think of the blockchain as something of a content management system. That is to say, with all of the data and funds changing hands — and the fact that the blockchain is usually described as a ledger for recording those exchanges — it can in a sense seem like one giant filing mechanism. It may well be that content management on such mechanisms will become a more popular blockchain function. But here again, it’s not exactly necessary. Today, the cloud content management systems listed by Box showcase how businesses and individuals with significant content management needs already involve highly capable cloud systems. Even a large business can reliably manage all of its content on the cloud, enabling seamless workflow and providing employees with easy and efficient access to all content relative to their work. There simply isn’t much of a need to organize blockchain-based content organization, even if it might sound logical at first thought.

Remote Communication

Finally, there’s remote communication, which has become a particularly significant topic in 2020. Here too though we have a trendy, tech-forward aspect of modern society for which blockchain just doesn’t seem to be much of a fit. Already, there are encrypted services designed to facilitate chats and messages all around the world. And for more business-oriented needs, a flurry of workplace communication systems such as the ones listed by WSJ have emerged to create their own competitive market, packed with solutions for everything from messaging to video conferencing. So, while the blockchain could conceivably be used to package communications quickly and securely over distance, this sort of use isn’t likely to be a priority for developers.

None of this is meant to suggest that blockchain technology isn’t useful, nor that it won’t continue to spread. But with so many lofty ideas about its potential beginning to take root, it’s worth keeping in mind that it’s not necessarily needed everywhere.

Article Produced By
Carolyn Coley

https://smartereum.com/188203/where-is-blockchain-not-needed/

Chris Corey

This data metric suggests the crypto market could soon see another altseason

This data metric suggests the crypto market could soon see another “altseason”


The crypto market has taken a beating throughout the past few days and weeks,

with sellers taking full control over altcoins as Bitcoin oscillates within a relatively wide trading range between $10,200 and $11,200. This has created an air of uncertainty amongst investors, who are now fleeing what are referred to as “beta assets” in order to preserve their capital in case further downside is imminent.

The crypto market has been dealt multiple blows throughout the past week, starting with the $150m KuCoin hack, followed by news surrounding the CFTC’s pursuit of the BitMEX co-founders on charges of violating multiple regulations. Turbulence in the traditional market as a result of President Donald Trump’s Coronavirus diagnosis added to the crypto market’s weakness and may continue creating fear amongst investors. Until Bitcoin is able to stabilize around its current price region or begin pushing higher, there’s a possibility that altcoins will continue seeing intense selling pressure. That being said, one fundamental metric does seem to indicate that upside could be imminent for altcoins, and particularly those residing within the DeFi sector.

DeFi crypto tokens hit hard by market-wide turbulence

The digital assets within the decentralized finance sector have been particularly struck by the recent crypto market downturn. This is partially due to the highly accelerated bubble cycle that these tokens underwent throughout July and August, as many of them saw returns of 100 percent or more throughout the span of just a few months. According to CryptoSlate’s proprietary data, the DeFi coin sector has shed 11 percent of its value throughout the past seven days. Over the past 24-hours alone, this sector has declined by 4 percent. As long as there is turbulence throughout the broader market, these crypto assets will likely continue seeing a pattern of underperformance.

This indicator suggests the DeFi sector may soon kick off another uptrend 

Analytics platform Santiment explained in a recent post that trading volume on decentralized exchanges like Uniswap provides insight into future trends within the DeFi sector. They note that there is an obvious downtrend in volume that, once broken, could be a sign that a leg higher is imminent for this fragment of the

crypto market.

“We believe there is fundamental metric that could possibly confirm the altcoin season quite early… DEX volumes are kind of a proxy of people gambling. More people trading means the crowd gets excited. In the middle of the cycle people will be talking about it everywhere again.”

Article Produced By
Cole Petersen

https://cryptoslate.com/this-data-metric-suggests-the-crypto-market-could-soon-see-another-altseason/

 

Chris Corey