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In one of our early 2018 articles, we had touched upon the false dichotomy between liberty and security. While the main story there was the evolution of privacy-focused cryptocurrencies such as Grin (which is not as private as it is touted to be, apparently), there is one short snippet that is worth reproducing here..
Where are we going with all this? Clearly, cryptocurrency regulation is front and centre for a lot of regulators, and exchanges, given that they have all the characteristics of traditional banks, are seeing a lot of scrutiny. New EU Anti-money Laundering Directives (5AMLD), that are set to come into effect starting Jan 10, 2010, are set to increase compliance costs for crypto firms
The directive to be adopted by EU countries could have a meaningful financial impact on crypto firms involved in fiat to crypto conversion. The new rules require crypto exchanges and custodial service providers to register with their local regulator and demonstrate compliance with thoroughgoing know-your-customer (KYC) and anti-money laundering AML procedures. The increased compliance costs could force the hand of smaller crypto firms and pave the way for consolidation through M&A route
Already, Deribit, a Netherlands-based crypto derivatives exchange, is planning to relocate to Panama because its home country’s version of AMLD5 “would put too-high barriers for the majority of traders, both regulatory and cost-wise
Another UK-based crypto payments startup announced the closure of its business last month as the company feels that the new AML5 directive forces the company unable to continue. In the blog post, Bottle Pay further emphasizes that “the amount and type of extra personal information we would be required to collect from our users would alter the current user experience so radically, and so negatively, that we are not willing to force this onto our community.” However, how the new regulation will be operationally implemented is still yet to be known
On the plus side, the long-term effect should be greater trust in crypto from financial institutions in Europe. In particular, it should make banks more open to providing their services to crypto companies and attract more institutional capital
Meanwhile in Crypto Wonderland...
“ESMA To Push For Crypto Regulations In EU ”
The European Securities and Markets Authority (ESMA) has announced on Thursday its intentions to focus on the data security of the financial industry, especially for crypto assets. In its Strategic Orientation for 2020-22, the regulatory agency also revealed its plan to bring a legal framework for digital currencies. As mentioned by the regulator, it planned the activities for the coming years based on the challenges faced by the EU, its citizens and capital markets. It will also focus on developing a large retail investor base to support the CMU, promoting sustainable finance and long-term oriented markets, dealing with the opportunities and risks posed by digitalization, the EU’s role in international finance and ensuring a proportionate approach to regulation.
“Crypto Firms To Cover Costs For Regulation”
Cryptocurrency entities licensed under the New York’s Financial Services Law (FSL) should pay the costs of regulatory oversight, Governor Andrew Cuomo believes. The Democratic Governor purportedly wants the state authorities to amend the FSL in order to require virtual currency-related entities within the FSL jurisdiction to foot the bill for examination and oversight conducted by New York State Department of Financial Services (NYDFS). The NYDFS is one of primary regulatory agencies for crypto-related businesses in New York state as the regulator issues a major business license for cryptocurrencies, the BitLicense. As the home of the financial capital of the United States, the NYDFS is often at the front line of new regulation.
“Bux Acquires Blockport”
Bux, the Amsterdam-based fintech that wants to make investing more accessible, has acquired the European “social” cryptocurrency investment platform Blockport. Terms of the deal remain undisclosed, although Bux says the move paves the way for the company to launch its own branded cryptocurrency investment app. Dubbed “BUX Crypto,” it will be available in the nine countries in which Bux operates, and is planned to go live in Q1 this year. In addition, we are told the founders and core team members of Blockport will join Bux and “take ownership” of the Bux cryptocurrency offering.
“R3 Closes The Largest Open-account Trade Finance Trial On Corda”
R3 has closed what it’s calling the largest open-account trade finance trial ever conducted on its Corda platform. This trial included more than 70 organizations from more than 25 countries. Upwards of 340 participants from those organizations were involved and came out from sectors like financial services, information technology, telecommunications, logistics, the maritime industry, real estate, hospitality and the automotive industry. The trial tested working capital applications developed by TradeIX and focused on the receivables finance product on Marco Polo’s platform, TradeIX announced Thursday. Accounts receivables financing, also called factoring, is where a business sells account receivables to a third party at a discount in return for immediate cash payment.
Crypto Twitter Pick
@TraceMayer @saifedean @stephanlivera @pierre_rochard @bitstein @francispouliot_ @CaitlinLong_ @NickSzabo4 In the depths of down-market cycle with panic sell risk, the Buyers of last resort kick-start the recovery by buying with with conviction. The Hodlers of last resort, are also defenders in arms as their conviction helps take Bitcoin off the market and to defend new price floors.
3:14 PM - 14 Jan 2020
What We Are Reading / Listening To
2019 Bitcoin Retrospective by Ria Bhutoria
Overnight Performance of Top 10 Currencies
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