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Malaysia’s Securities Commission Legalizes Digital Asset and Crypto Trading

Malaysia’s Securities Commission (Shariah Advisory Council) has announced that the trading of digital assets is now legal in the country. The Securities Commission is the regulatory authority that oversees the implementation of Islamic laws in the operations of Islamic financial institutions.

Datuk Syed Zaid, the Chairman of the Securities Commission, said that the regulator has resolved key issues facing regulations of digital currencies in a principled manner.

Big Crypto Gains

Malaysia has experienced exponential growth of interests in the crypto market but there have also been inside trading abuses, market manipulation, and some exchanges were even involved in predatory and deceptive practices. All these have led to the need to reposition the existing financial regulatory framework to incorporate the supervision of the crypto market in the country.

Datuk stated that the regulator has resolved that trading and investment of digital currencies and tokens are permissible in registered digital asset exchanges. He said that in a teleconference panel session at Invest Malaysia 2020 here today. He said: “This is a really ground-breaking resolution by SAC (Shariah Advisory Council) that could spur greater development and investment in digital assets.”

Datuk stated that the commission’s resolution has been finalized, and the agency would issue further details later.

The commission has currently allowed three digital asset exchanges (including Tokenize, SINEGY, and Luno) to operate in the country.

As per the report, the agency has approved at least four digital assets in the nation up until this month.

SINEGY is the first crypto exchange approved by Malaysia’s securities regulator. The founder of SINEGY, Kelvyn Chuah, termed the announcement as having extreme significance as more than 60% of Malaysians are Muslims. He said that the announcement has cleared several ambiguities associated with digital assets. Chuah is delighted by the announcement that the country has made. He revealed that Malaysia aims to become the hub of Islamic fintech and finance.

Chuah said that currently, all regulated trading activities of digital assets are allowed, but many non-compliant activities are not permitted. He said that the crypto industry in the country is closely waiting for the commission’s full guidelines on trading and issuance of digital assets. Chuah mentioned that crypto operators think that the regulatory authorities may consider creating a regulated digital asset derivatives market in the future.

As the Malaysian Muslim community is still awaiting a Shariah-compliant resolution for the trading of digital assets, crypto firms such as SINEGY now can explore potential services, which may welcome more Muslims into the digital asset space.

Malaysia Leading the Way in Crypto Regulation

The status of the cryptocurrency industry in the country had been unclear until the recent announcement by the Securities Commission. Crypto trading was not termed illegal but remained unregulated.

In February 2019, Securities Commission Malaysia (SC) announced that the nation would be implementing new regulations on the trading of digital assets and ICOs (initial coin offerings). Malaysia’s finance minister, Lim Guna, said that new regulations guiding cryptocurrency trading would assist in serving as criteria for exchange operators and coin issuers. That would also assist in ensuring standard practice in terms of trading, pricing, and asset protection.

The new regulations require any digital asset offering to get approval from the Securities Commission. Such offerings are also required to meet counter-terrorism financing and anti-money laundering rules. Any trader identified trying to bypass the law would be subjected to a fine up to US$2.4 million (RM10 million) or a prison sentence of up to 10 years. The country’s central bank and the Securities Commission said that new rules aim to help protect investors’ assets and create fair trading.

CFTC Committee to Hold Virtual Meeting on Digital Currencies and Blockchain

The Commodity Futures Trading Commission (CFTC) is set to hold a virtual meeting centered around digital currencies. The meeting scheduled by the Technological Advisory Committee (TAC) of the CFTC has drafted discussions centered around decentralized ledger technology (DLT) and digital currencies per its agenda. The CFTC has been showing a positive attitude towards digital currencies as detailed in its earlier released regulatory framework. The TAC meeting is scheduled for the 16th of July and will feature public hearings from TAC sub-committees.

The CFTC is Bullish on Digital Currencies

As a regulatory body, the CFTC has adequately recognized the role of digital currencies and decentralized ledger technologies in today’s changing digital economy. In its framework, the commission acknowledged cryptocurrencies as commodities that can be traded. The CFTC has affirmed that it will utilize a “principle-based” system in driving innovations in the blockchain advancements as well as other tradable markets under its purview.

As part of the arranged virtual meeting, the TAC will have hearings based on the scalability and resiliency of decentralized ledger technology systems with Shaunna Hoffman, a Global Cognitive Legal Leader with IBM, an organization renowned for advancing blockchain development. The meeting will also feature CentralBank Digital Currency design, the volatility of Bitcoin (BTC) against other assets as well as the impact of Covid-19 on asset price correlation.

Scheduling this meeting following its released framework gives an inclination that the CFTC is keen on consolidating its bullish approach towards digital currencies.

Expectations of Massive Crypto Boom

The CFTC role in the blockchain space has been conspicuous in recent times. In November 2019, the United States CFTC commissioner Brian Quintenz acknowledged that crypto powered derivative contracts have had an enormous impact on the U.S economy. The relevance of blockchain technology during the COVID-19 induced pandemic has also shown how invaluable decentralized ledger technology and cryptocurrencies can be. The CFTC is thus set to assert a positive oversight role in order to “stay ahead of the curve” as CFTC Chairman Heath Tarbert asserted.

Bitcoin Will Be the Best Performing Asset in Two Years by a Big Margin, says Wall Street Veteran

Wall Street veteran and CEO of Real Vision Raoul Pal believes that Bitcoin will be the best performing asset in the next two years. Although Bitcoin’s price has struggled to stay above $12,000 twice this month, he thinks that the world’s first cryptocurrency could rally to $100,000 soon, even mentioning the $1 million threshold.

Raoul Pal was the former head of sales at Goldman Sachs’ hedge fund and has been a Bitcoin bull since he realized the potential Bitcoin has.

The investment strategists debunked the notion that only gold could perform as a safe haven asset in times of monetary inflation. He explained that G4 central bank balance sheets have grown much faster than traditional safe-haven assets like gold.

Pal added that Bitcoin is the only asset in the world that is has outperformed the growth of the G4 central bank balance sheet.

So far, central banks around the world have tried to combat the economic downsides of the coronavirus pandemic by printing money. With the ongoing macroeconomic environment and recent geopolitical issues, Pal said that Bitcoin (BTC) will be the best performing asset in the next two years, by a big margin. He tweeted:

“These are all INCREDIBLY BULLISH long-term chart patterns. The probabilities in the charts suggest that Bitcoin is likely set to be the best performing major asset in the world over the next 24 months and by a big margin.”

Bitcoin recently witnessed a major push, as the world’s largest intelligence firm, MicroStrategy announced its new capital allocation, with a purchase of $250 million in Bitcoin. The investment decision was made as part of the company’s two-pronged capital allocation approach as announced in the company’s second-quarter 2020 financial results in late July this year.

MicroStrategy’s CEO Michael J. Saylor stated that Bitcoin is “harder, stronger, faster, and smarter than any money that has preceded it.”

A British hedge fund manager with tens of billions of pounds under management predicted Bitcoin could trade at $40,000 to $50,000 within two years in the best-case scenario. Bitcoin (BTC) could see a fivefold increase in value by 2023, as traditional investors enter the market.

The fund manager further stated that the fund could end up moving 30 percent of its gold investments into Bitcoin for 18 months to profit from a “sharp rise” in price if other institutional hedge funds did the same; seeing that Bitcoin’s price has surged 70 percent in 2020.

According to JPMorgan strategists, while the younger cohort is starting to invest in cryptocurrencies like Bitcoin, the older cohort remains to favor gold.

Mongolia’s Oldest Bank Will Soon Offer Comprehensive Crypto Services

Mongolia’s Trade & Development Bank (TDB Bank), the oldest and one of the largest banks in the nation, seeks to enter the crypto space by offering various services all under one roof, in line with its objective of promoting the Mongolian virtual asset financial business.

Pooling resources together

TDB Bank has partnered with Delio, a white-label technology firm, and Hexland, a blockchain development company, to pool their resources together so that the Mongolian consumer can benefit from comprehensive crypto-related services, such as asset management, loan (landing), deposit, remittance, and virtual asset custody.

The agreement also incorporated MDKI, a mineral resource transportation company, whose partners include Bitfury, a Netherlands-based crypto mining giant.

The bank has made a name for itself as it serves nearly 400 Mongolian companies offering services like financial consulting, trade loans, investment loans, and project loans. Furthermore, it has 50 branches spread across the country and ranks second based on total assets.

Hexland is expected to offer blockchain-based expertise, given that it was founded by Samsung Electronics developers. Its area of specialty includes wallet development and blockchain smart contract development and verification.

Boosting Mongolian crypto penetration

The decision by the TDB Bank to enter the crypto space will be a stepping stone towards enhancing cryptocurrency adoption in Mongolia. It intends to serve both industrial and individual investors in this venture.

A Delio official noted:

“Through this partnership, we are in full swing to enter the global virtual asset financial market.”

Mongolia has been in the limelight when it comes to blockchain integration. As reported by Blockchain.News on January 9, a Toronto-based digital transformation company, Convergence.tech, deployed an Ethereum-based traceability platform dubbed “Backbone” to assist Mongolian nomadic farmers in maximizing returns on their cashmere product.

This blockchain-based solution was supported by the United Nations Development Program (UNDP) and touted to be instrumental in enabling the farmers to eradicate income instability.

PayPal’s Crypto Trading Services Officially Launch in the United States, Driving Bitcoin’s Price Past 16K

PayPal’s crypto services are officially available for use. US PayPal users will now be available to buy, sell, and hold cryptocurrency assets securely through the payments network.

The crypto services will be available in all states, except for Hawaii. The financial service provider will feature Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, which can all be stored on the application’s digital wallet. The addition of other cryptocurrencies is still to be announced.

Due to high demand, PayPal has also decided to up its weekly cryptocurrency purchase limit to $20K, so that users can now trade up to that amount. The waitlist to leverage PayPal’s US crypto services has also been waived, as of now.

PayPal’s “Cryptocurrency Hub” platform was much anticipated and expected, as many institutional investors worldwide have increasingly added crypto assets like Bitcoin to their agenda. PayPal’s payment rival, Square, figures among the corporate giants who hold BTC in its treasury reserves, with a purchase of 4709 Bitcoins. With that announcement, many have indicated that it was only a matter of time before PayPal followed suit.

Currently, PayPal is working to enable crypto payments across 26 million merchants worldwide. If all goes well, a new form of payment service on PayPal may be available in 2021.

Digital currency adoption is coming

PayPal’s CEO Dan Schulman previously disclosed that the launch of crypto services on the payments platform is designed to bolster the adoption and integration of digital currencies, as the technological wave and shift to virtual currencies is undoubtedly coming. It has also been implied that in the near future, when central bank digital currencies (CBDC) come into play, PayPal will be among those that will facilitate the use of CBDCs on its payments network, as the financial firm has been in talks with central banks.

Introducing a cryptocurrency trading platform may be a small step forward, but whether or not it is a bold enough move to attract investors to leverage the services remains a question. Currently, the terms and conditions of PayPal indicate:

“You currently are NOT able to send Crypto Assets to family or friends, use Crypto Assets to pay for goods or services, or withdraw Crypto Assets from your Cryptocurrencies Hub to an external cryptocurrency wallet.”

What may be interesting for PayPal users would be if cryptocurrencies could be used as a means of payment, since transacting with virtual currencies seem to be an eventuality.

Bitcoin spikes and surges past $16K

Following the news of the “Cryptocurrency Hub” launch on PayPal, Bitcoin’s price rallied higher, pushing past the $16K level. Currently, it is trading at $16,399.30 on CoinMarketCap, as market bulls have responded optimistically to PayPal’s crypto asset integration.

The mainstream cryptocurrency has been performing bullishly this month, although it has been consolidating below $16K for awhile. Bitcoin’s rally has been exciting for investors, as it even managed to push past the $16K mark momentarily. The last time Bitcoin’s price surged past that range was in January 2018.

In response to the news, Bitcoin bulls have tweeted their enthusiasm. Gemini co-founder Cameron Winklevoss said, “What I like most about hitting $16K #bitcoin is that it’s been a steady climb. No heroics, just grinding day in and day out.”

Only 5% of Financial Executives Want to Invest in Bitcoin in 2021, According to Survey

Gartner consulting firm has released a survey showing that only 5% of financial executives intend to invest in Bitcoin as a corporate asset this year. The survey comes at a time when Elon Musk’s Tesla invested $1.5 billion or 8% of its cash reserve into Bitcoin and MicroStrategy software company announced its intent to buy more Bitcoins.

The survey interviewed 77 financial executives, including 50 chief financial officers who expressed differing views based on the financial industry.

According to the survey, 84% of executives revealed that they did not plan to invest in the leading cryptocurrency as a corporate asset since it is just too volatile. And 16% of the surveyed executives stated that they expect their firms to be investing in the cryptocurrency, by 2024 or later. Only 5% said that they intend to invest this year. And 1% of the respondents stated that they would hold the cryptocurrency at some time in 2022-2032.

However, the technology sector (tech CEOs and big players in mainstream finance) are becoming excited by the digital currency as a store of value, with 50% of the surveyed executives from this industry anticipating investing in the digital asset in the future.

According to Gartner, about 70% of big executives who were surveyed stated that they would still like to hear more from regulators about the digital currency and understand the risks of investing in it before allocating a portion of their company’s cash reserves to Bitcoin.

Alexander Bant, Gartner chief of research, said: “It’s important to remember this is a nascent phenomenon in the long timeline of corporate assets. Finance leaders who are tasked with ensuring financial stability are not prone to making speculative leaps into unknown territory.”

Other concerns highlighted in the research included complex accounting treatment (18%), cyber risks (25%), lack of understanding (30%), slow adoption as an accepted method of payment or exchange (38%), and board risk aversion (39%). Gartner found no difference between small and large organizations.

Why Regulations Set to Benefit the Crypto Industry

Bitcoin’s recent rally to climb an all-time high of $50,000 is more than just a “fad” and represents the growth in the blockchain and cryptocurrency space. However, mass adoption of the cryptocurrency by corporate firms may remain elusive in the short-run because of its high price volatility. Due to the nascent and volatile nature of the crypto asset, few public companies may want to invest in the currency over the next twelve to eighteen months. But an increased number of firms would hold the asset as more regulation and acceptance of the currency are expected in the future. Tesla’s decision to purchase Bitcoin has been a big game-changer, and thus more corporate companies would likely eventually follow the giant electric vehicle manufacturer’s footsteps, if not this year, then later in the future.

Coinbase’s Registration Statement with SEC Reveals What Could Make Bitcoin and Ethereum Prices Plunge

Ahead of becoming a publicly-traded company, Coinbase has submitted a registration statement with the Securities and Exchange Commission.

The filing is part of the cryptocurrency exchange’s registration statement under Form S-1, which will enable the company to eventually become public and issue its Class A common stock.

In the prospectus, Coinbase provided a summary of its financial situation and revealed potential risks that could undermine its business in the crypto sector. As Bitcoin (BTC) and Ethereum (ETH) are responsible for 56% of the total trading volume on Coinbase, the crypto exchange named risk factors that could potentially drive down the digital assets’ prices. The filing read:

“Our total revenue is substantially dependent on the prices of crypto assets and volume of transactions conducted on our platform. If such price or volume declines, our business, operating results, and financial condition would be adversely affected.”

In Coinbase’s prospectus, it named disruptions, hacks, “splits in the underlying network known as ‘forks’”, developments in quantum computing, and cryptocurrency-related regulations as potential risk factors that may hinder Bitcoin and Ethereum’s performance. The filing also cited the identification of Satoshi Nakamoto, the pseudonymous creator who developed Bitcoin, as a potential risk factor that may influence Bitcoin’s price negatively. Many in the cryptocurrency industry have hypothesized that if Nakamoto were to reveal his true identity, this could negate the decentralization and reputation of Bitcoin.

Despite the volatility and uncertainty that may surround the cryptocurrency industry, Coinbase chief executive has stated that the company has taken this into account. In a letter filed alongside the official registration document, Armstrong wrote:

“You can expect volatility in our financials, given the price cycles of the cryptocurrency industry. This doesn’t faze us, because we’ve taken a long-term perspective on crypto adoption.”

With the SEC publishing Coinbase’s filing, it will only be a matter of time before Coinbase’s intentions of going public are achieved. Coinbase’s Class A common stock is to be listed on Nasdaq under the ticker symbol “COIN.”

BlockFi, Neuberger Berman Partner to Offer Crypto Asset Product Suite, Including ETFs

Crypto lending company BlockFi has partnered with New York-based private investment management firm Neuberger Berman to create a new business entity that would develop and offer a new cryptocurrency management product, including Exchange-Traded Funds.

BlockFi announced on Monday, October 25, that the new joint business entity called ‘BlockFi nb’ expects to “launch crypto asset management products, including ETFs and other traditional structures,” that would give investors exposure to cryptocurrencies in their brokerage accounts.

BlockFi nb president, Greg Collett, talked about the development and said: “We are witnessing a significant shift in investor sentiment towards digital assets, and we believe that digital assets should be considered in modern portfolios.”

Through the launch of BlockFi nb, clients will have an asset management product suite that offers access to digital assets and services from experts in investment management and cryptocurrency, Collett said.

According to the two companies, the partnership will combine Neuberger Berman’s suite of crypto strategies with BlockFi’s retail and institutional cryptocurrency solutions. In other words, the product suite would include ETFs and other traditional structures. The crypto products will exist alongside BlockFi’s retail and institutional crypto solutions and Neuberger Berman’s actively managed crypto strategies suite.

Collett further stated that “we think this combination will help us to improve on products currently in the market so that we can give investors cost-effective and convenient access to the performance of digital assets from their brokerage accounts.”

BlockFi offers financial services such as interest-earning accounts and USD loans secured with cryptocurrencies for businesses and individuals across the US and worldwide.

Meanwhile, Neuberger Berman is an 82-year-old private investment management firm that manages $437 billion in client assets as of September 30. The company operates a range of fixed income, equity, hedge fund, and private equity strategies on behalf of individual investors, institutions, and advisors worldwide.

Crypto ETFs Demand Rising

The new partnership by BlockFi and Neuberger Berman comes at a time when cryptocurrency ETFs continue to gain popularity.

As reported by Blockchain.News, the first US Bitcoin ETF began trading on Tuesday, October 19, making the most widely traded cryptocurrency available to most investors with a brokerage account.

ProShares launched its Bitcoin futures exchange-traded fund last week, allowing investors to purchase and sell the assets outside of cryptocurrency exchanges.

Last week marked a milestone for cryptocurrency as investors began trading the ProShares Bitcoin futures ETF, exceeding any other ETF launches, and another, the Valkyrie Bitcoin strategy ETF, started trading on Friday on the public stock exchange market.

With ProShares and Valkyrie already trading their Bitcoin futures ETFs, others are expected to follow as the US Securities and Exchange Commission (SEC) considers other applications.

On October 8, BlockFi applied with the SEC to provide the BlockFi strategy ETF, an actively managed fund that would invest in Bitcoin futures contracts.

In August, Neuberger Berman began providing clients exposure to Bitcoin and other crypto-assets through crypto derivatives like Bitcoin futures and Ether futures, as well as investments in Bitcoin trusts and ETFs to gain indirect exposure to Bitcoin.

Goldman Sachs to Launch Data Service to Classify Digital Assets

Investment bank and Financial service firm Goldman Sachs has revealed it is set to release a data service to classify hundreds of digital coins and tokens so institutional investors can comprehend the rapidly growing digital asset class.

Created in collaboration with global index provider MSCI and crypto data firm Coinmetrics, the data service is called Datanomy. The name was derived from the combination of data and taxonomy – a branch of science focused on naming and classifying the natural world.

Datanomy is created to address the issue of many digital assets not being classified into their respective sectors. As the digital asset ecosystem has been expanding over the years, it could appear overwhelming to grasp if not familiar with the various sectors of the expansion.

Coin Metrics CEO Tim Rice said large asset managers wanted an “adult framework” to understand digital assets better and invariably discuss them.

Rice added:

“We’ve organized it in an intuitive manner that should help asset managers come into this asset class in a much more standardized fashion.This is the next phase of getting the underpinnings of the industry lined up so that everybody can embrace it, and we can figure out what the next directional move in the market is.”

Users can access Datanomy either as a subscription-based data feed or via Marquee – a platform by Goldman Sachs used as a digital storefront for institutional investors.

In addition, Datanomy provides users with analysis and research, as well as benchmarking performance, managing portfolios, or creating investment products depending on the sectors that include decentralized finance, smart contract platforms, metaverse, or value transfer coins.

Anne Marie Darling, head of the client strategy for Goldman’s Marquee platform, noted,

“We’re trying to create a framework for the digital asset ecosystem that our clients can understand because they increasingly need to think about performance tracking and risk management in digital assets.”

Digital assets on Datanomy would be divided into classes, sectors, and sub-sectors based on the usage of the tokens or coins. According to Darling, this will enable asset management firms and money managers at hedge funds to familiarize crypto with how equities can be debatable as industry sectors like finance or technology or themes like growth versus value stocks.

Notably, Datanomy is just one of the products Goldman Sachs has launched in recent times to achieve its expansion goal beyond Bitcoin-focused products in the crypto market. In June, the investment bank launched an Ethereum-linked derivative product to offer institutional investors indirect exposure to the cryptocurrency market.