Tag: crypto exchange

Exclusive: Is Belarus the Heaven for Tokenized Exchanges?

Exclusive interview with George Paliani

In this interview with George Paliani, CBDO of Currency.com, we explored the fundamentals of the tokenization of assets and its underlying regulatory requirements. George explained that Currency.com is not just an ordinary exchange, where it is a platform with cryptocurrencies and traditional financial products such as commodities, indices, stocks, bonds. He then explained the key differences between security tokens and tokenized securities and the significance of “Decree No. 8” in conducting crypto-related business in Belarus.

What are the differences between security tokens and tokenized securities?

To understand the difference, you must be able to differentiate between traditional securities and security tokens. Security tokens represent tokens that have gone through security token offerings, as they have tokenized their assets. Each security token can represent partial ownership of a particular asset. We don’t list these tokens; we list traditional securities found in the traditional financial markets. We only list traditional assets from the financial markets that already exist and have done an IPO.

Tokenized securities, for example, Tesla shares, can be traded on the traditional financial markets. At Currency.com, we have tokenized it and put it on our platform. Not only can you trade cryptocurrencies on our platform, but many tokenized shares can also be traded on our platform as well. We offer our clients to trade traditional financial assets. 

Users on Currency.com can use Bitcoin and Ether to purchase tokenized securities. How do you address the volatility concerns of these two cryptos?

We genuinely understand that volatility is a huge issue in the cryptocurrency markets. We solve this by a process by having our own version of stablecoins. Therefore, the funds deposited into your account from the bank will be the exact sum you will find in the Currency.com wallet, enhancing the trading process and user experience. 

How does Currency.com compare to other competitors in the market?

One of the significant advantages that we have is regarding regulation. We are a fully licensed exchange, regulated by law and the government, audited by a big 4; we are entirely transparent about this with our users and the government. 

We also offer margin trading with leverage of up to 100x, which is unique in this market. It is an option that we provide, and for professional traders, it is a very manageable risk. 

Which regulatory approvals have been obtained to become the first regulated tokenized exchange?

We are a European regulated exchange, under the Decree No.8, which was issued in Belarus in December 2017. Being regulated, it allows us to operate in a completely transparent regulatory space. There is an ongoing development in the legal and regulatory space as they are adding more laws and decrees in Belarus; we consider it one of the best legal space to work in the twenty-first century. 

Currency.com excluded the USA and the jurisdictions on the FATF list for 1000 tokenized securities to both private and institutional investors. What are the regulatory reasons behind this move?

We do not work with the FATF blacklist, not with the FATF countries. And we do not work with the US for the reason that for the financial activities related to crypto it is obligatory to get the MTL in the several states as well as the approval from the United States Securities and Exchange Commission (SEC). 

Currency.com recently issued Belarusian government bonds, is it because of the special regulatory environment in Belarus? Which country’s government bonds will be the next?

Issuing the Belarusian government bonds was the first step as an experiment for us, as they were the first to be issued on our exchange. We have already offered this service to several counterparties, under an NDA. You will be able to see shortly that other bonds will also be on our platform available for traders.

Due to its success, subsequently, we have access to tokenize government bond number 252 with up to 4.2% per annum yield to maturity. The tokens will be denominated in USD, and each token is worth $1000. It can be reinvested into more bonds or other products on the platform and users that have purchased a whole token can request a transfer of the corresponding physical bond at any time. 

As you mentioned, Belarus introduced “Decree No.8” last year to promote crypto-related business. How does Currency.com accommodate to this new regulation?

I would say that it is one of the strictest decrees that I have ever encountered. When you enter the Currency.com website to begin trading, you will need to follow the KYC instructions and procedures, as one of the most critical requirements. Necessary personal information would be required, such as your ID or passport as well as your proof of address; this process can be done in under five minutes.

AML, KYC procedures are all regulated and are under Decree No. 8. It is one of the most transparent and strictest decrees I have come across, which makes us one of the most transparent and regulated exchanges in the world. The authors who have written this decree, have extensive experience and are experts in the field.

Crypto Exchange Huobi Plans to Reverse IPO in Hong Kong

Cryptocurrency exchange Huobi has reportedly been planning a reverse initial public offering (IPO) according to a document revealed by the Hong Kong Stock Exchange (HKEX).   

In a notice published on September 10, the Hong Kong-listed electronics manufacturer Pantronics Holdings Limited, which was a company that was acquired by Huobi in 2018, uncovered that it would be renamed to Huobi Technology Holdings Limited.   

Patronics Document. Source: HKEX

According to the disclosed documents, the company transferred more than 221 million ordinary shares in favor of the Huobi Group at the acquisition stage. Resulting in a $77 million deal, Huobi became Pantronic’s largest shareholder with more than a 73 percent stake. It has been assumed that the ultimate goal of the deal was to allow Huobi to conduct a reverse IPO in Hong Kong.   

Stricter regulations on reverse IPOs from the HKEX planned ahead for October 1 may affect the company’s move. HKEX stated that it would change current regulations, meaning it would be harder for those that acquire a publicly listed company in different industries based in Hong Kong. 

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Germany’s Federal Financial Regulator Warns Investors Over Bulgarian Crypto Broker

Bulgarian crypto broker, 5 Capital, has been offeringfinancial services to investors without being approved by the Germany financial watchdog, the Federal Financial Supervisory Authority (BaFin). This is against the regulations that guide crypto firms in Germany, as every crypto firm is expected to apply from and obtain an authorized license from BaFin before entering into operation.

In the report, BaFin pointed out that the mentioned Bulgarian crypto broker, which is based in Sofia, offers German customers contracts for difference (CFDs) that supposedly expose them to cryptocurrency instruments.

As a way to keep Germany crypto market safe and reliable, crypto firms operating in Germany are expected to apply for a license from BaFin by the end of 2019 as the new anti-money laundering (AML) regulations have been put in place.

Being wary of the cryptocurrency industry, BaFin has been warning investors about the potential risks associated with the market, especially Bitcoin and other cryptocurrencies.  It also warned clients over initial coin offerings (ICOs), informing them of the high risk often associated with various unrealistic technological claims and even scams projects. It focused on brokers who do not provide negative balance protection, which exposes investors/customers to unlimited losses.

BaFin then encouraged traders to be careful while on the 5 Capital website. They advised clients against funding an account or investing via this specific company, strongly warning that non-compliance would not receive any assistance if he/she is duped. What this means is that if 5 Capital ever wishes to function, it has to apply for a license and be in full compliance with BaFin regulations by the end of the year.

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Binance CEO Boosting the Super Exchange Ecosystem, With the Possibility of Adding Options

Changpeng Zhao (CZ), CEO of Binance, the world’s largest crypto exchange, was a keynote speaker at multiple blockchain-themed events in Singapore in mid-November. During these events, CZ made new announcements regarding the company’s new partnerships and new products that will be rolling out.  

  

Blockchain.News took this opportunity to speak with CZ, one of the most successful entrepreneurs in the crypto industry at Blockshow Asia 2019, held in Singapore to gain a more in-depth understanding of the new partnerships and products that Binance has to offer. 

What has Binance been up to lately? 

Binance has been adding a lot of new functions such as staking and airdrops and the support for forks. CZ mentioned that later on, there may be plans to support payments and other features. The concept of a super exchange was aimed to allow users to have access to various value-added services on the app. He mentioned: “We are in the mobile internet stage area now, so we got a lot more features on the app. We do see a majority of people using exchanges for crypto, on the go. We’ve got to make our app a lot better.” 

DeFi vs. CeFi: What does Binance have in store? 

Legacy banking services have very high demand, according to CZ. “We pushed out fixed-term lending and also released variable term lending, which means you can lend and redeem at the same time. The interest rates are much better compared to traditional financial banks or financial markets,” explained CZ. The focus of the release of the lending platform was to benefit users as they would be able to earn up to 15% interest on their BNB, ETC, and USDT.  

  

“DeFi is a very hot topic in our industry, right now, we want to do that as well, but before that, with CeFi [centralized finance] we also want to provide whatever our users demand first,” said CZ. 

Binance Futures requested by active traders 

Binance Futures launched in September, shortly after its launch, an all-time high record was recorded at 315,000 BTC being traded in 24-hour volume, which was around 2.9 billion USD. Binance Futures allows for highly leveraged trading using a sophisticated risk engine and liquidation model, as well as a built-in hedging tool to enable traders to manage risks.  

When Binance first launched, only 20X leverage was available when it came to trading futures. It was a new product at the time, and CZ explained that the company did not know how deep the liquidity would be and whether the company could manage leverage and liquidations properly. 

  

“Binance futures has grown tremendously, and right now the single contracts in BTC futures has surpassed Binance.com spot, in terms of daily volume, with about 170 different coins. We feel that the liquidity is there, and the volume is there, so we decided on the higher leverage of 125x,” explained CZ. He explained that the higher leverage was frequently requested by the active traders on the platform, resulting in the decision to provide the service. CZ encouraged experienced traders to take higher leverage for lower trading costs, as less capital will be tied to trading.

Binance DEX and its ecosystem 

Binance DEX is the decentralized exchange running on Binance’s native chain, Binance Chain. The Binance DEX development team has encouraged projects to participate in issuing new tokens on Binance’s native blockchain. CZ believes that decentralized exchanges bring hope and new possibilities as it offers a trustless and transparent financial system while providing more control over the users’ own assets. According to CZ, Binance DEX is actively being worked on by a team of 50 to 70 developers. There is a hard upgrade every month, and a few new features will be announced soon by CZ. 

Options in the future? 

Binance acquired JEX, an options and futures platform that works differently compared to the traditional financing options. The acquisition of JEX was to boost Binance’s crypto derivatives offerings for pro traders. Binance JEX has “pseudo options,” which CZ refers to, for insurance types of options as well as hedging. CZ announced that in the next three to nine months, Binance is looking to offer options. CZ also mentioned that Binance has been working with several partners to launch social trading in the future. 

Integration of fiat gateway with Paxos 

Paxos, the regulated, New York-based exchange and stablecoin issuer has launched a new fiat gateway service, making swaps between US Dollars and stablecoins available to users. Binance became the first cryptocurrency exchange to integrate the new product, with Binance USD (BUSD). CZ elaborated: “That’s a very easy on and off-ramp from BUSD, or PAX into US dollars into bank accounts.” He also mentioned that the two companies would be working more closely to integrate new solutions. 

‘Every exchange should provide staking rewards’ 

The Binance CEO believes that every exchange should provide staking rewards. “I think this is a fundamental thing that we need to provide. Every exchange should provide that. We try to provide our users with all the benefits that cryptocurrency offers them, including staking rewards, with any coins that have staking mechanisms,” he explained. “We don’t make any money out of it, and we don’t charge any fees, it’s just a value-added service we provide, we believe that is a fundamental right for the users who hold cryptocurrency with us to enjoy those benefits.”

  

He firmly believes that this will encourage more users to hold cryptocurrencies with the company, and does not give anyone an excuse not to, which helps the company’s trading business. “We are in a very strong position where we do have a strong revenue source from trading fees, and we can subsidize all these businesses, and we can support additional businesses this way.” 

Binance’s native phone on its native blockchain 

Another recent announcement that was made was regarding Binance’s partnership with the Taiwanese mobile phone company HTC. The new Binance Exodus phone made in collaboration with HTC,  with an embedded hardware secure wallet, the HTC phone also supports Bitcoin nodes, where 250 gigabytes of Bitcoin data will be available on the phone. “It’s a native phone that is supported by the Binance Chain. It also supports BTC, BTC tokens, and Binance DEX,” said CZ. “I do believe that the mobile phone is a very key device acting as a wallet, and it is a master device we carry around with us every day. I think this is very good progress for us and HTC.” 

eToroX: Leveraging Deep Liquidity and Stablecoins for Institutional Traders

When the eToro group decided to open the doors to the fascinating and fast-changing world of advanced crypto services and blockchain through a separate exchange and regulated wallet, they needed a leader with an established history of leading companies through growth and deep organizational restructuring to facilitate the move — enter Doron Rosenblum.

Doron Rosenblum is the Managing Director of eToroX. We were fortunate to meet up with him at the Blockshow Asia 2019, where he discussed the advanced crypto functionalities of eToroX, liquidity, and regulation.

A Dedicated Crypto Entity

The eToro group has existed for over 10 years and their trading platform has been incredibly successful with millions of users leveraging the social trading platform. Around a year and a half ago the group decided to establish an entity to execute the vision of the eToro Group, to bring Blockchain and advanced e-Token technologies to everyone—eToroX. Rosenblum said, “We really believe that tokenized assets are going to change the financial world. And we decided to dedicate an entity just for crypto-assets —eToroX.”

eToroX features two products, one is a secure online wallet which allows for the holding and conversion of crypto. The second is a very unique exchange. Rosenblum explained, “The exchange is regulated while most exchanges are not and the security for our exchange was developed by a team in Israel—leveraging their necessary expertise in very strong cybersecurity capabilities. So we have a very strong team that makes sure that you are well protected by the latest cutting-edge technology.”

On top of a fully functional and innovative crypto exchange, eToroX has also developed their own stablecoins via their team in Copenhagen. Rosenblum said, “We have 15 stablecoins now that are basically pegged to major fiat currencies. We just added the Singaporean dollar—they are hedged, fully backed and very transparent. eToro has built a reputation of trust and our users know our stablecoins can be trusted.”

Three Layers of Liquidity

Since the start of cryptoasset trading, the problem of liquidity has existed throughout many exchanges. Liquidity is a vital element for any market. Lack of cash creates an imbalanced environment, and things go out of control. So how does eToroX provide liquidity?

Rosenblum said, “We have three main sources of liquidity. One is the eToro group itself which has a lot of liquidity coming from our broker business. We also work with market makers, like everybody, and the third is that we are connected to many other exchanges. The combination of these three layers provides our customers with a deep pool of liquidity for trading.”

AlgoX Prime

In September 2019, eToroX launched its institutional-grade application program interface (API) trading program—AlgoX Prime. The API had been designed to meet the requirements of institutional traders with eToro’s deep liquidity pool and tight spreads.

Rosenblum said, “This will cater to both the traders of mainstream investment and cryptoassets. We offer investors a set of functionalities that will allow them to trade more efficiently.”

Rosenblum believes that many traders are too interested in zero fees from platforms. While it’s a nice bonus, he believes liquidity and guidance are far more valuable to arbitrageurs. He said, “We have deep liquidity and we are about providing arbitrageurs with information and data.

This type of data is what people usually pay a lot of money from data providers, but we provide it as part of the AlgoX Prime service, enabling users to run their own algorithms and make sure that they function correctly.” He added, “Collocation is also part of it. People can put their servers next to ours, making transaction speeds much shorter, which is critical for arbitrage trading.”

More Stablecoins to Come

In October, the eToroX wallet was updated with UX conversion capability, which is the first time the platform enabled stablecoins to be exchanged for other cryptoassets on your platform.

According to Rosenblum, in order for crypto stablecoins to be efficient and utilized optimally, it is imperative that eToroX provides a wide range of conversion options for its users. He said, “Each of the stablecoins we offer can now be traded against a broad range of instruments from other stablecoins, FX to FX or other crypto-assets. We are also developing more Fiat In-Fiat Out channels for the stablecoins.” He added, “We believe the combination of protection that eToroX offers and its transparency regarding the use of customer’s money will make this product very attractive.”

In addition, eToroX is now offering the conversion of stablecoins into commodities such as gold and silver. Rosenblum said, “Customers of eToroX exchange, can import their BTC or another crypto to our exchange, and trade against crypto assets, other stablecoins, and now—against commodities.”

Before ending our interview we asked Rosenblum about eToroX’s new developments, he alluded to the future offering of unique types of stablecoins, but stopped short saying, “Due to regulatory factors, I can’t really discuss it yet, but I expect it to cause a major shift in the market.”

Nigerians Set to Enjoy Remittances at 1% Cost Through the Strategic Partnership Between Dash And Bitfxt

There has been a strategic partnership between Dash and Bitfxt, a cryptocurrency exchange based in Nigeria, to allow Nigerians to enjoy remittances at a lower cost.

According to the report, this partnership is meant to ensure that Nigeria’s crypto-enthusiasts enjoy remittances at a very affordable rate. While Dash is deemed as a leading digital asset for remittances and international payments with secure, fast and affordable transactions, Bitfxt aims to bring more liquidity to the Nigerian crypto market. The recent development indicates that the team has decided to bridge the gap in remittances for Nigerians through the use of Dash at a 1% cost.

Since it has been identified that sending remittances to Nigeria through the use of gift cards on Paxful is very expensive, as high as 30%, Dash and Bitfxt have come together to minimize such excessive cost. Through this establishment, for volumes of $200 and above remittances, the recipient will receive Dash and can then convert to Naira at the cost of 1% while the conversion rate for volumes of remittances below $200 will be at 2%.

According to the report, in 2018 diaspora remittances to Nigeria were more than oil earnings. It went further to note that a PwC report estimated that diaspora remittances to Nigeria were in the region of $25 billion which represented 6.1% of GDP. This, in turn, represented a 14% increase from the 2017 estimate of $22 billion.

The report held that Nathaniel Luz, the Lead of Dash Nigeria, said, “This move is clearly in tune with the motive of Dash as a digital currency that is meant to always be at the disposal of people with respect to international payments and remittances.”

In the same vein, Franklin Odoemenam, Bitfxt CEO, shared this partnership is indeed the vision of Bitfxt as the leading crypto infrastructure company in Africa which is aimed to connect Africa to the world. For Odoemenam, this partnership is meant to grant access to cryptocurrency for thousands of new people which will give them a better alternative of remitting money and experience. He added, “There’s no other way to grow adoption than the daily use of crypto and that is what this partnership does, opening up thousands of new people to crypto for better money remitting experience.”

Luz believed that the necessity of Dash for developing economies like Nigeria cannot be overemphasized, as there is the issue of high fees from the existing financial infrastructures.

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OKEx Partners with Shrimpy to Foster Crypto Portfolio Automation

According to the official blogpost, cryptocurrency exchange OKEx and Shrimpy, a crypto exchange trading bot for portfolio management and market indexing, have teamed up in a strategic collaboration in order to foster crypto portfolio automation tools which are being utilized by the crypto traders.

Shrimpy expressed their heartfelt interest in having OKEx as an exchange partner. The team, therefore, gave a warm welcome to OKEx in return as they opined that this great business partnership is meant to progress all the tools used for portfolio automation and it is highly expected to improve the way crypto investors automate their portfolio.

Since some of the features of OKEx exchange like fiat on-ramp, futures trading, margin trading, spot trading, and swap trading grant users and traders different ways to manage trading and investment risks while interacting with the cryptocurrency market, there’s a need for them to automate their various portfolios for proper management and indexing of the market.

The report also stated that OKEx has a trading fee schedule that is tiered. Possibly, this is one of the reasons Shrimpy entered into the business deal, noting that the tiered trading scheme gives traders the opportunity to decrease their trading fee from 0.15%Taker and 0.1% Maker fee to 0.03% Taker and – 0.01% Maker fee. However, the traders are expected to either increase their trading volume or hold OKEx’s utility token (OKB). Holding the exchange’s token gives incentives to the users like trading fees reduction and having a share in the fees OKEx realizes.

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Forbidden Wealth: 80,000 Bitcoin Abandoned for Nearly a Decade

A Bitcoin wallet address said to be associated with the now-defunct Mt. Gox Exchange holding an estimated 80,000 Bitcoin worth around $800 million, is said to be untouched revealed by a sourceon Feb 17. The asset is shown to have remained untouched since the days after the hack of the once renowned exchange.

With the funds on the wallet already tainted and duly tagged as high risk making it quite difficult to cash out, spectators are left to wonder if the wallet will ever see withdrawal or transfer of funds as all eyes are well fixed on it from the period after the hack.

As the years after the Mt. Gox disaster continues to roll by, the situation still leaves a bitter taste in the cryptocurrencyworld. Recalling the year 2011, when the now liquidated exchange suffered a high profiled hack and breach of security of the exchange at a time when it boasts of a whopping 70% of Bitcoin’s overall global trade volume.

The official accepted report claimed hackers exploited the already breached Mt. Gox admin account to crash the price of Bitcoinon the exchange. With price artificially pushed down, the hackers went to town, buying up super cheap Bitcoin in large quantities.

Accounts of the exchange users were also targeted, and an estimated loss of 25,000 Bitcoin was stolen from 478 accountstotaling to a huge $8.75 at the time of the hack.

Recent news credited to a Redditor (jwinterm), claims the Bitcoin address, the sixth-largest Bitcoin Address associated with the original Mt. Gox hack has been unearthed. With a balance of 75,957.20 BTC, clearly showing no single satoshi has ever been moved out of it.

Chainalysis, a blockchain analytics firm that has been keeping a close watch on the stolen Bitcoin while speaking to Decrypt, suggested that the issues surrounding the address have kept the funds in a state of being treated as a poisoned chalice that should be distanced from.

According to Chainalysis representatives Maddie Kennedy, it is of the opinion that there exist two assumed possibilities why the funds have not been moved, which includes loss of access to the address or simply the fear of moving the funds without being tracked down.

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Nifty Launches First USD-Based NFT Exchange Backed By Winklevoss Twins

Nifty, a centralized USD-based exchange for non-fungible tokens (NFTs), has announced that the Nifty Gateway 2.0 upgrade is live as of March 17.

The platform was bought by Gemini, the crypto exchange and custody provider owned by the Winklevoss twins, in late 2019.

According to the announcement, Nifty Gateway 2.0 is the first USD-based exchange for NFTs, also known as Nifties. All services are available to users globally with the exception of withdrawal to fiat currency, which is only available to US users for the time being.

New NFTs Will be Listed Cautiously

With the revamped marketplace, users can put NFTs up for sale in USD, but Nifty has declared it will be taking a “slow and intentional” approach to approving any new token listings.

Per the announcement, “You may also deposit NFTs from other projects and put them up for sale on the marketplace — however, for the time being, we will be slow and intentional about which NFT projects we support, so that we can handle the volume, and deal with any fraud issues that may arise.”

What are Nifties?

Unlike traditional cryptocurrency like Bitcoin, nifties are unique cryptographic tokens that represent a specific asset on the blockchain.

Leveraging blockchain technology, gamers can use nifties to trade and buy interoperable digital collectables, such as dances, skins, and in-game items. This approach can, therefore, propel the value of virtual goods.

Tyler Winklevoss, the CEO of Gemini, acknowledged: “Non-fungible tokens and the digital goods (collectables) will play a major role in the next era of the digital economy. They are the perfect form factor for crypto-collectables, crypto-art, and much more – laying the foundation for entirely new multi-billion dollar industries to emerge.”

He also added: “We’re excited to be working with Nifty Gateway to extend the reach of crypto across other concepts and build a bridge between NFT creators and the growing ranks of everyday consumers looking to purchase them.”

Conversely, Nifty Gateway’s co-founder, Duncan Foster, noted: “Nifties are a fundamentally new type of digital good and are an important tool for ownership as our lives move more and more online.” 

15,000 Bitcoins Transferred to Exchange Wallets Caught in Action: What Does This Mean for the Market?

In the last couple of weeks, Bitcoin (BTC) and the crypto market as a whole has witnessed some serious movements in their price charts. Bitcoin changed its course from a staggering $9,000 on March 7 to mere $4,200 on March 13, 2020. However, it later bounced back to $6,500 range with the help of an external stimulus by the European Central Bank (ECB) as they executed a bond buyback of EUR 750 Billion. 

However, since the last week, Bitcoin has been stuck in the price range of $6,100 to $6,600 with no significant fluctuations being observed. According to the tweet shared by Whale Alert, there have been transactions of 15,000 Bitcoins worth $99,702,423 from unknown wallets to different exchange wallets like Binance, OKEx, Coinbase, and Poloniex within 24 hours.  

The largest transaction executed was worth $33 million (5,000 BTC) from an unknown wallet to Poloniex.

The Whale Alert also shared the details of the rest of the transaction in a series of tweets. Some of them have been shared below.

On March 12, 2020, Bitcoin took a big blow as it lost half of its value from $9,200 to $4,200. Many people suspected the involvement of such whale traders and accused them of market manipulation. However, it seems like they had no role to play in it. According to many market analysts, the Bitcoin market crash was attributed to the US Stock market crash, Oil price fluctuation, and the ongoing coronavirus outbreak.  

The transfer of Bitcoins from ‘unknown wallets’ to exchange wallets can be interpreted in many forms. This could mean that big investors are actively accumulation BTC. It could also mean that investors are planning to invest in some altcoins and buy a big chunk of it. However, in the worst-case scenario, it could also mean that the whales are planning for a massive dump in the market to manipulate the price and take advantage of it.  

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