Kraken responds to New York crypto exchange crackdown

Kraken responds to New York crypto exchange crackdown

This week, New York Attorney General (AG) Eric Schneiderman announced that his office is opening an inquiry into cryptocurrency exchange operations. Several exchanges, including Gemini, Binance, bitFlyer, Bittrex and Kraken are targets of Schneiderman’s wrath, with the inquiries being focused more on the companies’ business practices and systems. Kraken’s co-founder, Jesse Powell, took to Twitter to give his take on the situation, calling the investigation “insulting.”

Powell started by saying, “Somebody has to say what everybody’s actually thinking about the NYAG’s inquiry. The placative kowtowing toward this kind of abuse sends the message that it’s ok.” He went on to point out that it is obvious that regulators are clueless when it comes to discerning what businesses want, as well as what consumers want.

Kraken wisely exited the state in 2015. Many in the cryptocurrency industry, including Powell, feel that New York is hostile to digital currency. Their estimation of the crypto atmosphere in the state has a solid foundation, as the exchanges have been presented with a 34-page demand by AG Schneiderman that has to be completed and returned within two weeks.

Everything was running relatively smoothly in New York pre-2015. However, that year, lawmakers approved a series of regulations called BitLicense, and more than 10 exchanges called it quits, removing their operations from the state. To date, only three BitLicenses have been awarded, going to Ripple, Coinbase and Circle. Other applicants have applied, but they were all rejected.

Schneiderman initiated the inquiry in conjunction with his Virtual Markets Integrity Initiative. While it may seem like a solid effort to protect consumers, it would be highly prudent to ask who will be reviewing the information submitted by the exchanges, if they choose to buckle. What experts in the fields of cryptocurrencies and finances have been sought out to analyze the data? Nothing in his résumé indicates that he has formal training in either category.

It’s a safe bet that Kraken doesn’t intend to respond to the inquiry, and others may follow suit. What ramifications will follow remain to be seen, but it’s important that business leaders stick to their guns when facing illegitimate attacks. Powell made a good suggestion in his Twitter rebuttal, stating that perhaps the markets themselves should decide what’s important to consumers.

Powell signed the tweet with a succinct, yet poignant, “Good luck, New Yorkers.”

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
New York wants cryptocurrency miners to pay premium rates for electricity

New York wants cryptocurrency miners to pay premium rates for electricity

New York doesn’t seem to be getting along with cryptocurrency companies until now.

The New York Power Authority has slapped cryptocurrency miners with a decision stating that such activities will now be charged premium rates for electricity. The move would protect other electricity consumers from fluctuations in electricity costs, which is a likely possibility should cryptocurrency miners set up shop in the city and consume huge amounts of power, spiking up demand for energy supply and with it, kilowatt hour prices.

“If we hadn’t acted, existing residential and commercial customers in upstate communities served by a municipal power authority would see sharp increases in their utility bills,” commission chair John Rhodes said.

This is additional bad news, especially for companies who have just finally reconciled with the fact that they have to acquire a Bitlicense to operate in New York. One company in many people’s minds is CoinMint, which only recently was able to secure the approval of lawmakers to set up a cryptocurrency mining farm in a decommissioned smelter in the town of Massena after promising 150 jobs to residents of the state. It’s now in question what their next move will be given the new decision, which will make their original plan more expensive and therefore less profitable.

In June 2015, the New York Department of Financial Services (DFS) handed down the Bitlicense regulation, which requires that anyone—companies or individuals—engaging in cryptocurrency-related activities such as mining would have to apply for the license. But instead of compliance, this forced companies like Bitfinex and Shapeshift out of the state, with more protesting and saying that the heavy-handed regulation has created circumstances that may force them out as well. Companies argue that the requirements are quite costly, and that the standards were much higher than those imposed on traditional financial institutions.

“We don’t transmit or exchange real digital currencies for our customers,” he remarked. “Kadena is a tech startup company. We’re not a financial institution. We don’t do [anything with money]. Because of the BitLicense, we might leave New York,” says Will Martino, a co-founder of distributed ledger startup Kadena.

Last month, lawmakers said they were open to revisiting the regulation, after it has become apparent that businesses do not support it, with very few applying for the license to date.

“We want to put that out there, circulate it and really figure out how we can make this license in New York state something that works for the residents of New York state and the state economy,” State Senator David Carlucci told CoinDesk. “We’re going to do this again in a month, month and a half from now,” Hamilton said.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Circle snaps up cryptocurrency exchange Poloniex for $400M

Circle snaps up cryptocurrency exchange Poloniex for $400M

The rumors are true, Poloniex has indeed gone full Circle.

On Monday, the Goldman Sachs-funded payment company announced that it has acquired Poloniex cryptocurrency exchange for $400 million in a bid to extend “its commitment to a new vision for global finance.”

The acquisition was first reported by Modern Consensus in early February, although it was shot down as fake news. Now, the two companies are coming clean, and making some pretty big promises about scaling “risk, compliance, and technical operations.”

Poloniex, one of the most well established cryptocurrency exchanges, is the latest addition in Circle’s product offerings, which also include Circle Pay, Circle Trade, and the upcoming Circle Invest. According to Circle, “Poloniex addresses another key element of Circle’s product foundation: An open global token marketplace.”

Poloniex is the 14th largest exchange by 24-hour volume, according to CoinMarketCap data. Acquisition aside, Poloniex said it remains “committed to preserving the features and functionality that first drew interest” to the platform.

“Any updates we make in the course of this transition will be behind-the-scenes and focused on strengthening user experience, platform performance, and security,” Poloniex said in a blog post.

Scalability, reliability, robustness

Goldman Sachs-backed Circle is no stranger to cryptocurrency. In 2015, the payment platform is the first to receive New York’s elusive BitLicense. Circle also holds UK’s first virtual currency license, which was awarded to the company in 2016.

The Poloniex acquisition is expected to boost Circle’s presence in the cryptocurrency market, all while revitalizing the trading platform’s fortunes. The first order of business, according to Circle co-founders Jeremy Allaire and Sean Neville, is to “address customer support.” Circle also plans to scale Poloniex “up and out” via market expansion, localization, increased token listings, and adding connectivity to fiat currencies including USD, EURO, and GBP.

“We envision a robust multi-sided distributed marketplace that can host tokens which represent everything of value: physical goods, fundraising and equity, real estate, creative productions such as works of art, music and literature, service leases and time-based rentals, credit, futures, and more,” according to Circle.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
South Korea won't ban crypto trading

South Korea won’t ban crypto trading, but may control it

One of the reasons cryptocurrency prices took a nosedive recently was because of the remarks made by South Korean officials, which were taken to mean that a ban on cryptocurrency trading was imminent, resulting in traders becoming spooked and leading to massive selloffs. Now, regulators have clarified their position and, at least for now, cryptocurrencies were safe.

In comments made on Valentine’s Day, government officials said that what they want to do was curtail illegal acts or “uncertainties” in cryptocurrency markets. Hong Nam-ki, minister of the office for government policy coordination, said the government was moving towards legislation that would promote blockchain technology while working toward preventing it from being used for malicious activity such as fraud or money laundering. The clarification came as 280,000 signatures were gathered on a petition last month against the potential ban and drastic regulations. In accordance with state law, the government has to respond to petitions that receive more than 200,000 in 30 days.

In mid-January, Justice Minister Park Sang-ki publicly announced that the government could be contemplating a complete ban on cryptocurrency exchanges and trading. His comments were subsequently refuted by the finance minister on January 31, who simply stated that there was no intention to ban or suppress cryptocurrency. The diverse views at high levels of the government indicated that there was still no clear course of action ready to be instituted in the country.

In a move that might appeal to the general public, South Korean officials announced that they were reviewing the possibility of introducing an approval system for exchanges, similar to that of New York’s BitLicense, which has been controlling cryptocurrency interactions of residents or businesses in the state. The New York State Department of Financial Services implemented BitLicense in August of 2015. Although the office has received numerous applications, only four licenses have been granted. Circle was issued the first in 2016, followed by Ripple in 2016, Coinbase in 2017, and more recently, Bitflyer.

Aside from New York, Japan also has a licensing structure in place. It launched the system last year, and it has been high successful. To date, the country has approved a total of 15 exchanges since being implemented in September, with multiple others being denied for not meeting the proper criteria. Licensing systems are probably the most secure route to ensure a healthy, stable future for the cryptocurrency industry.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Licensing scheme on the horizon for South Korea cryptocurrency exchanges

Licensing scheme on the horizon for South Korea cryptocurrency exchanges

After weeks of signaling a possible ban on domestic cryptocurrency exchange operations, authorities in South Korea have pulled a one-eighty and are now reportedly considering a licensing system to regulate virtual currency exchanges in the country.

On Monday, Korean news outlet Business Korea reported that members of the government’s virtual currency task force are examining a “cryptocurrency exchange approval system.”

“We are positively considering the adoption of an exchange approval system as the additional regulation on cryptocurrencies. We are most likely benchmark the model of the State of New York that gives a selective permission,” a government ministry official told the Korean news outlet.

The system will be based on New York’s BitLicense, which was introduced in June 2015 shortly after the collapse of Japan-based Mt. Gox. The license defines virtual currency businesses based on their activities—storing, holding, maintaining custody of a virtual currency, and performing exchange services. So far, only four exchanges have been granted the elusive BitLicense: Coinbase, Circle, Ripple, and recently, BitFlyer.

For the past few months, South Korea has been in an upheaval over the government’s mixed messages regarding the legality of cryptocurrencies and transactions that involve digital coins. In January, the local crypto community was rattled by news that Seoul is banning cryptocurrencies. That turned out to be a false alarm, prompting South Koreans to call for the termination of Justice Minister Park Sang-ki, who announced the supposed ban.

The confusing reports have resulted in more than 228,000 residents to petition South Korean President Moon Jae-In and his government to leave the cryptocurrency market alone.

It appears that the government is paying attention to the South Korean residents. Deputy Prime Minister Kim Do-yeon recently said there’s no need “to get rid of or suppress digital currencies.” In fact, the Ministry of Strategy and Finance, which Kim also heads, is reportedly aggressively planning to adopt the exchange approval systems.

A final decision, however, isn’t expected until June.

“We will hold a meeting to respond to national petition related to digital currencies this month but we are highly likely to make up for the defects of existing measures only at the meeting,” the official said, according to Business Korea.

Crypto regulation is coming and it’s OK

Crypto regulation is coming and it’s OK, says nChain CEO

Traditional banking has its days numbered given the steady growth of Bitcoin, whose underlying technology promises to cut out the middleman—along with their outrageous fees—and help secure transactions using a distributed ledger system, resulting in decentralized transactions with relatively low fees.

The lack of central exchange is putting many governments in a bind, resulting in regulations that seek to stifle the growth of the cryptocurrency sector. Regulations, however, are not all bad, said Jimmy Nguyen.

During the recently held Blockchain& Bitcoin Conference Philippines, the CEO of blockchain research and development outfit nChain Group discussed how the eCommerce sector will change with the advent of cryptocurrency, specifically Bitcoin Cash (BCH), which is considered the true remaining Bitcoin as intended by the original Satoshi Nakamoto white paper.

And one of the five keys needed to achieve a Bitcoin commerce (bCommerce) world is “sensible regulation,” according to Nguyen.

“A lot of people in the crypto community are afraid of law and regulation. They think that the Bitcoin world shouldn’t be regulated,” the executive said. “The reality is you can’t regulate the network because it’s decentralized but all of the companies including people in this room who operate businesses interfacing with Bitcoin and real life consumers, I’m going to tell you, regulation is coming and it’s OK. You should be thankful for it, [as] it would normalize and support the industry.”

Sensible regulation

To be considered “sensible,” regulations must incorporate two things, Nguyen said.

First is that governments need to recognize cryptocurrencies as a legal form of payment and tender, which, in turn, will compel crypto companies to register and comply with know-your-customer (KYC) and anti-money laundering (AML) requirements. Such was the case in Japan, which is the first country to formally recognize virtual currencies like Bitcoin as legal tender.

“Why is that a win? It’s because it increases the trust of consumers as well as businesses in Bitcoin when the government says this is a legal form of payment and tender, and it also increases adoption by merchants. And we’re seeing that because just last year, Japan has seen a number of its major retailers start accepting Bitcoin in light of this,” Nguyen said.

The second component of a sensible regulation is a clear definition of what it does and does not cover.

An example of this is New York’s BitLicense, which was introduced in June 2015 shortly after the collapse of Japan-based Mt. Gox. The license defines virtual currency businesses based on their activities—storing, holding, maintaining custody of a virtual currency, and performing exchange services. But what about providers that supply technology in the backend to an exchange? Do they also need a license?

“There’s always grey areas when you’re regulating and writing laws and I think it would be helpful for governments who are actually creating these BitLicense or business licenses to start describing or publicly saying what they do not cover to eliminate grey areas,” Nguyen said.

Judicious regulations will give virtual currency providers room to act, and also pave the way for industry stakeholders to try educate regulators and legislators that there are other types of financial services out there that “could change how people, businesses, and money operate.”

“It’s an exciting world. It’s a world that really could change how people, businesses, and money operate. And in a way, even mothers and grandmothers—even my mother who’s now a grandmother—could hopefully be sending Bitcoin Cash through her mobile phone. I’ll have to help her, but one day, I want to be able to send it to someone in Vietnam or somewhere around the world. I think that’s a powerful and beautiful vision,” Nguyen said.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Japan’s Bitflyer secures regulatory nod to operate in New York

BitFlyer, Japan’s largest cryptocurrency exchange by trading volume, has cleared another hurdle in its bid to set foot on U.S. soil.

The Tokyo-based exchange announced on Tuesday that it has been approved by the New York State Department of Financial Services (NYDFS) to operate in the state as a virtual currency exchange. BitFlyer is the fourth exchange to be granted New York’s elusive “BitLicense,” along with Coinbase, Circle and Ripple.

In an interview with CoinGeek, BitFlyer U.S. COO Bartek Ringwelski said a BitLicense is “incredibly important” for cryptocurrency companies like them that are planning to enter the U.S. market.

“New York is a doorway through which institutional funds will enter the market. We are glad the NYDFS granted us the license,” said Ringwelski.

BitFlyer accounts for more than 80 percent of global BTC-JPY trading volume, according to CryptoCompare data. Founded in 2014,BitFlyer raised an estimated $27 million in a Series C funding round last year. The company said it has facilitated over $40 billion in bitcoin trades, $30 billion of which came in 2017 year-to-date alone.

Following its success in the Japanese market, BitFlyer announced several months ago that it has started preparing to enter United States. The announcement comes at a time when the country’s complicated regulatory framework has resulted in several exchanges to pull out their services in some states.

BitFlyer said it in August that has already been approved to operate in 34 states. That number has since expanded to 42 states after the company secured the “nod of approval from one of the most influential state financial services regulators in the nation,” said CEO Yuzo Kano.

The company plans to bring “deep expertise and proprietary technology to the U.S. market,” with particular interest on the “currently untapped” institutional investors in the United States.

For starters, BitFlyer rolled out a U.S.-based virtual currency exchange platform, which is designed for professional traders who trade US$100,000 or more in cryptocurrency monthly. The BitFlyer platform features “a powerful API for programmatic traders,” allowing investors to place market, limit and complex trade orders.

“Our expansion and upcoming cross-border trading addresses a huge unmet need in the U.S. by institutional traders looking to access large amounts of liquidity across multiple virtual currency markets,” Ringwelski said in a statement. “Through our web interface or API, approved professional traders can be up and running and making trades in a matter of minutes.”

BitFlyer is offering zero percent trading fees in the United States until the end of 2017. The U.S. exchange platform currently supports BTC, but the company said it will expand its offerings to include Bitcoin Cash (BCH), Ethereum, Ethereum Classic, and Litecoin, among others.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Japan’s Bitflyer secures regulatory nod to operate in New York

BitFlyer, Japan’s largest cryptocurrency exchange by trading volume, has cleared another hurdle in its bid to set foot on U.S. soil.

The Tokyo-based exchange announced on Tuesday that it has been approved by the New York State Department of Financial Services (NYDFS) to operate in the state as a virtual currency exchange. BitFlyer is the fourth exchange to be granted New York’s elusive “BitLicense,” along with Coinbase, Circle and Ripple.

In an interview with CoinGeek, BitFlyer U.S. COO Bartek Ringwelski said a BitLicense is “incredibly important” for cryptocurrency companies like them that are planning to enter the U.S. market.

“New York is a doorway through which institutional funds will enter the market. We are glad the NYDFS granted us the license,” said Ringwelski.

BitFlyer accounts for more than 80 percent of global BTC-JPY trading volume, according to CryptoCompare data. Founded in 2014,BitFlyer raised an estimated $27 million in a Series C funding round last year. The company said it has facilitated over $40 billion in bitcoin trades, $30 billion of which came in 2017 year-to-date alone.

Following its success in the Japanese market, BitFlyer announced several months ago that it has started preparing to enter United States. The announcement comes at a time when the country’s complicated regulatory framework has resulted in several exchanges to pull out their services in some states.

BitFlyer said it in August that has already been approved to operate in 34 states. That number has since expanded to 42 states after the company secured the “nod of approval from one of the most influential state financial services regulators in the nation,” said CEO Yuzo Kano.

The company plans to bring “deep expertise and proprietary technology to the U.S. market,” with particular interest on the “currently untapped” institutional investors in the United States.

For starters, BitFlyer rolled out a U.S.-based virtual currency exchange platform, which is designed for professional traders who trade US$100,000 or more in cryptocurrency monthly. The BitFlyer platform features “a powerful API for programmatic traders,” allowing investors to place market, limit and complex trade orders.

“Our expansion and upcoming cross-border trading addresses a huge unmet need in the U.S. by institutional traders looking to access large amounts of liquidity across multiple virtual currency markets,” Ringwelski said in a statement. “Through our web interface or API, approved professional traders can be up and running and making trades in a matter of minutes.”

BitFlyer is offering zero percent trading fees in the United States until the end of 2017. The U.S. exchange platform currently supports BTC, but the company said it will expand its offerings to include Bitcoin Cash (BCH), Ethereum, Ethereum Classic, and Litecoin, among others.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.

Japan’s Bitflyer secures regulatory nod to operate in New York

BitFlyer, Japan’s largest cryptocurrency exchange by trading volume, has cleared another hurdle in its bid to set foot on U.S. soil.

The Tokyo-based exchange announced on Tuesday that it has been approved by the New York State Department of Financial Services (NYDFS) to operate in the state as a virtual currency exchange. BitFlyer is the fourth exchange to be granted New York’s elusive “BitLicense,” along with Coinbase, Circle and Ripple.

In an interview with CoinGeek, BitFlyer U.S. COO Bartek Ringwelski said a BitLicense is “incredibly important” for cryptocurrency companies like them that are planning to enter the U.S. market.

“New York is a doorway through which institutional funds will enter the market. We are glad the NYDFS granted us the license,” said Ringwelski.

BitFlyer accounts for more than 80 percent of global BTC-JPY trading volume, according to CryptoCompare data. Founded in 2014,BitFlyer raised an estimated $27 million in a Series C funding round last year. The company said it has facilitated over $40 billion in bitcoin trades, $30 billion of which came in 2017 year-to-date alone.

Following its success in the Japanese market, BitFlyer announced several months ago that it has started preparing to enter United States. The announcement comes at a time when the country’s complicated regulatory framework has resulted in several exchanges to pull out their services in some states.

BitFlyer said it in August that has already been approved to operate in 34 states. That number has since expanded to 42 states after the company secured the “nod of approval from one of the most influential state financial services regulators in the nation,” said CEO Yuzo Kano.

The company plans to bring “deep expertise and proprietary technology to the U.S. market,” with particular interest on the “currently untapped” institutional investors in the United States.

For starters, BitFlyer rolled out a U.S.-based virtual currency exchange platform, which is designed for professional traders who trade US$100,000 or more in cryptocurrency monthly. The BitFlyer platform features “a powerful API for programmatic traders,” allowing investors to place market, limit and complex trade orders.

“Our expansion and upcoming cross-border trading addresses a huge unmet need in the U.S. by institutional traders looking to access large amounts of liquidity across multiple virtual currency markets,” Ringwelski said in a statement. “Through our web interface or API, approved professional traders can be up and running and making trades in a matter of minutes.”

BitFlyer is offering zero percent trading fees in the United States until the end of 2017. The U.S. exchange platform currently supports BTC, but the company said it will expand its offerings to include Bitcoin Cash (BCH), Ethereum, Ethereum Classic, and Litecoin, among others.

Note: Tokens in the SegWit chain are referred to as SegWit1X (BTC) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true  Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.