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Chinese Smart Courts Leveraging Blockchain and AI

Smart courts in China are reportedly leveraging a range of innovative technologies to settle legal cases. The online judiciary courts utilize big data, cloud computing, artificial intelligence (AI) and blockchain.

As reported by Xinhua news agency on Dec. 5th—over 3.14 million litigation activities from March to October of this year have been settled through the blockchain and AI-powered smart internet courts in China.

Courts of the Future

China says millions of legal cases are now being decided by “internet courts” that do not require citizens to appear in court.

The “smart courts” include non-human judges powered by AI. People seeking legal action can register their case on the internet. They can then take part in a digital court hearing. The system gives citizens the chance to communicate and receive court decisions by text or through major messaging services.

China’s first internet court was established in the eastern city of Hangzhou, a technology hub, in 2017. Last week, the country’s Supreme People’s Court released a report on the court’s activities. According to a white paper issued entitled—Chinese Courts and Internet Judiciary—1.16 million people and 73,200 lawyers have now been registered in smart courts.

Blockchain EvidenceIn September 2018, China’s Supreme Court ruled that evidence authenticated with blockchain technology is binding in legal disputes and further declared that the “Internet courts shall recognize digital data that are submitted as evidence if relevant parties collected and stored these data via blockchain with digital signatures, reliable timestamps and hash value verification or via a digital deposition platform, and can prove the authenticity of such technology used.”

Qatar Issues Crypto Ban, Digital Securities Still Allowed to Roam

Qatar’s regulator has blocked all crypto asset services in the nation. The Qatar Financial Centre Authority (QFC) mentioned in a statement that all “Virtual Asset Services may not be conducted in or from the QFC at this time.”

The Middle East country banned any product of value that “acts as a substitute for currency, that can be digitally traded or transferred and can be used for payment or investment purposes.”

Some of these services include crypto-to-crypto trading, custody, fiat-to-crypto, and financial services related to virtual assets. Due to the tightening of anti-money laundering (AML) regulations, cryptocurrency firms have been shutting down.

Qatar’s central bank has made Bitcoin trading illegal in the country since 2018, saying, “This cryptocurrency is highly volatile and can be used for financial crimes and electronic hacking as well as risk loss of value because there are no guarantors or assets.”

Digital forms of securities and other financial products that are regulated by the Qatar Central Bank, the Qatar Financial Markets Authority, or the Regulatory Authority are still deemed as legal.

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Australian Judge Allows Plaintiff to Use Bitcoin as Collateral Bond

In Australia, a New South Wales (NSW) court has allowed a cryptocurrency exchange account to be used as a collateral bond for legal costs.

The NSW District Court, hearing a defamation claim, was asked to force a plaintiff to put $20,000 into a court-controlled bank account. The amount would cover some of the defendant’s expected legal costs, should the plaintiff lose or withdraw the case.

According to the Australian press, the plaintiff was granted permission to offer their cryptocurrency holdings in lieu of fiat currency.

Volatility Issues

The defending legal team countered that despite the plaintiffs crypto holdings meeting the AUD $20,000 value, due to the volatility of cryptocurrency the bond offered may not be suitable.

The presiding Judge Judith Gibson said she was prepared to accept cryptocurrency was volatile but, she said, “ However, this is a recognised form of investment.”

Judge Gibson addressed the volatility issue, the plaintiff agreed to provide the defendant’s legal counsel monthly statements for the investment account and is obligated to alert them if the account’s holding do drop below AUD $20,000 in value.

The plaintiff will also have to alert the solicitor when the account drops below $20,000, should that occur. “These are uncertain financial times.” Judge Gibson concluded.

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How the New Crypto Law in India Could Play Out

After the celebration seen in India’s Supreme Court as the verdict was given against the Reserve Bank of India (RBI) in its action of restricting financial institutions from providing banking services to cryptocurrency-based businesses, interested parties are wondering how the recent news will play out. Although the decision is not yet final and enforced as the law.

Concerned parties are still wary of a draft bill already in place since Feb. 28, 2019, to ban cryptocurrency, this is because it could still move through the parliament. With this bill in place, some analysts are of the opinion that the recent victories for cryptocurrency in India’s Supreme Court could be short-lived.

A quick breakdown of the legal battle

Reviewing the 180 paged judgments, it clearly shows that the premises on which the final verdict was made are not in line with what the industry has assumed to offer.

In reality, the whole verdict tilted on the violations of one of the fundamental rights of the Indian constitution—Articles 19(1)(g), which guarantees the freedom to practice any profession. The Supreme Court came to the conclusion that the action employed by the RBI’s violated the above-mentioned article for virtual currency exchanges, and that such action by RBI is tantamount to a threat. The verdict also concluded the central bank had not provided sufficient data or credibly examined alternative measures to deal with the situation.

Despite the verdict, some believe the major reason the Supreme Court ruled in favor of the crypto industry was that there was no law that forbids the use of cryptocurrency in place, which implies the outcome could have been entirely different if such law was in existence.

To see a reversed verdict or favorable appeal, the central bank can only try to gather credible and valid evidence of a monetary risk from the use of cryptocurrency.

Crypto Industry savors its victory

Despite the potential of a reversal of the judgment or another lawsuit action spring up, many see the victory as a welcomed one long overdue, aside from the reality of financial regulators and legislators there have been many government voices speaking up for a more progressive approach to blockchain in India.

The action of the federal ministry for IT recently released draft on national strategy for blockchain, the state of Karnataka regarded as the equivalent of Silicon Valley and many other government bodies have shown a clear tilt towards embracing, and implementing the use of blockchain to solve day to day issues which also includes the use of cryptocurrency.

In the midst of all of these happenings, the verdict from the Supreme Court should be taken as a step in the right direction towards the adoption of blockchain and cryptocurrencies in the country and as such, all those who took the bold step to take on the RBI head-on deserves the right to a toast to victory.

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US Congressman Set to Implement the Cryptocurrency Act of 2020

A congressman from the United States of America recently stepped up the bid to clarify which regulatory agency is responsible for digital assets otherwise known as cryptocurrency.

Paul Gosar of the House of Representatives introduced the “Crypto-Currency Act of 2020,” on March 9, a bill that is set to choreograph a wide range of digital assets to be liable to the appropriate regulatory bodies and agencies assigned to it.

Purpose of the proposed regulatory bill

While speaking to the cryptocurrency news outlet, Gosar’s legislative assistant, Will Stechschulte stated that- “the bill looks to provide not only clarity but legitimacy to crypto assets in the United States.”

The proposal by Gosar partitioned digital assets into three categories which are, crypto-commodity, crypto-currency, and crypto-security. These three categories respectively, are to be controlled by the Commodity Futures Trading Commission (CFTC), the Secretary of the Treasury via the Financial Crimes Enforcement Network (FinCEN), and the Securities and Exchange Commission (SEC).

Surprisingly, the language of the bill looks to cement the status of digital assets like Bitcoin as crypto-commodities instead of crypto-currencies. The classification of crypto-currency is now described as “representations of United States currency or synthetic derivatives” — more likely to mimic stablecoins like Tether (USDT).

The new bill is the updated version of the first one that was leaked to the public last December. The updated version of the bill features well-clarified definitions for terms like “Decentralized cryptographic ledger” and “smart contract” — concepts that U.S legislators have been struggling to deal with.

Related legislation

The year 2019 had seen a number of newly drafted bills, especially in response to Facebook’s Libra white paper. The fear of encountering regulations by the SEC most likely added to several changes to Libra’s initial version of a managed stablecoin based on a “basket of currencies.”

However, the closest bill to Gosar’s new bill is Warren Davidson’s Token Taxonomy Act, initially introduced in 2018 and later updated and re-introduced in April 2019.

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Is Bitcoin in India about to Boom? Paxful Survey Projection

Paxful, the peer-to-peer Bitcoin marketplace, has released a survey that indicates India’s enthusiasm for Bitcoin has been reignited following the landmark decision to lift the ban on crypto trading.

Paxful, conducted a survey around the future potential of cryptocurrency in India. The survey finding have highlighted which industries are most primed for adoption, as well as uncovered the feelings of Indian citizens,aged 18 – 55, towards crypto and bitcoin.

Prior to the Indian Supreme Court’s reversal of the ban on digital assets, Paxful data showed Indian sentiment around digital currencies did not reflected the concerns of their government.

In January, Paxful has recorded over $3 million in trade volume in India.

According to the March survey, 93.8% of respondents invested in crypto prior to lifting the ban in 2020, with 90% holding Bitcoin and 44% holding Ether.

The Survey found that prior to the ban lift, almost 94% of the respondents had already invested in crypto with the majority holding BTC and about half holding Ether. An interesting finding was that of the 75% of respondents that claim to rely on crypto for money remittance cited the need to bypass a corrupt banking system.

Per the report, “The future of cryptocurrency in India looks bright, and the survey respondents agree with 43.40% stating that they look forward to an increase in jobs and the ability to take on entrepreneurial endeavors. It is expected that cryptocurrency usage will continue to flourish, a conclusion that can be based on the statistic that 40.40% of respondents would invest in digital currency over any other investment option with stocks and bonds to follow (30.00%) and real estate and gold coming in at 14%.”

R3’s Marco Polo Network Sees India As Key Area for Growth

As reported by Blockchain.News on March 27, The Marco Polo Network announced on Thursday that India’s leading provider of digital transformation, Tech Mahindra became the first corporate in India to join the R3’s open-source blockchain-based Marco Polo Network for facilitating cross-border transactions.

With this new partnership, Tech Mahindra carried out several digitized trade finance transactions, facilitated by its partnering bank DBS Bank, utilizing Marco Polo’s Receivables Discounting tool. This tool is a solution that enables effective management of working capital, enhances liquidity and reduces any risks associated with credit.

Rob Barnes, CEO of the Marco Polo Network and TradeIX, the company behind the Marco Polo Network highlighted that the decision behind bringing an Indian company onboard was due to the fact that “Asia serves as a key area of growth for the Marco Polo Network.”

“We are in extremely difficult and challenging times now, with facilitating trade and minimizing supply chain disruptions becoming even more important now than ever,” stated Barnes. “This is a great achievement with two leading institutions with more collaborations planned in the near future.”

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HSBC Chief Legal Officer Stuart Levey Gets Appointed as Libra’s New CEO, Expert in Dealing with Regulatory Backlash

The Libra Association appointed its first CEO, Stuart Levey, the Chief Legal Officer at HSBC Holdings. Levey will be overseeing the Libra digital currency and payments system and holds a strong compliance track record and is expected to join Libra in the coming months. However, HSBC has not shown the same upright compliance record.

Levey is also expected to “combine technology innovation with robust compliance and regulatory framework.” The Facebook-led project has invited scrutiny from global regulators, with concerns over its threat to national sovereignty with its potential launch. Many of Libra’s original members, including Vodafone, PayPal, and Visa have also chosen to leave the association.

Being a Harvard graduate and having spent more than ten years in the US government departments, Levey served seven years as the Under Secretary of the Treasury for Terrorism and Financial Intelligence during the George W. Bush and Barack Obama administrations.

“Technology provides us with the opportunity to make it easier for individuals and businesses to send and receive money, and to empower more than a billion people who have been left on the sidelines of the financial system, all with robust controls to detect and deter illicit financial activity. I look forward to working closely with governments, regulators, and all of our stakeholders to realize this vision,” said Levey.

HSBC invited Levey onboard to address the scandal HSBC faced after the company was found to have laundered money for a drug cartel in Mexico totaling to $881 million. HSBC was fined for its malpractices for a whopping $1.9 billion.

The digital currency initiative was announced in 2018, which took the world by storm with its controversial project. With the ICO bubble having expanded exponentially in 2017, the public started to become aware of cryptocurrencies. Digital currency and cryptocurrency were still seen in the light of being scandalous, illicit, and unfamiliar.

Taking the regulated road

After surviving months of intense backlash by global regulators, the project had been called to a halt. The Libra Network will no longer be permissionless and will be adding comprehensive anti-money laundering and combatting the financing of terrorism protocols, to be able to enforce sanctions over coins in the network and to be able to handle requests from law enforcement.

Libra has applied for a payment system license from the Swiss Financial Markets Supervisory Authority (FINMA), to be able to allow the Libra payments system to be used publicly. One of the major updates of the Libra whitepaper is that it explicitly mentions the limits of what users are able to do on the network, including balance and transaction limits, and the network would only be accessible to regulated crypto firms in the beginning.

Binance believes Libra could be the SpaceX of the payment industry

Binance took a closer look at Libra’s recent whitepaper update and concluded that Facebook’s project could potentially disrupt the payment industry. Taking into account that the Libra Association recently applied to the Swiss Financial Market Supervisory Authority FINMA for a payment system license, Binance stated that such a payment system may very likely qualify as being “systemically important.” By applying for the payment system license, the Libra payments system would be accessible to the public.

Technology entrepreneur Elon Musk, the founder of SpaceX, was mentioned in the report as an industry leader in the space sector due to its significant step forward in improving speed for rocket journeys.

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Bitfinex and Tether Claim Lawsuit Allegations of Market Manipulation are Baseless

BitFinex and Tether have officially spoken out against what they are describing as a baseless lawsuit, designed to undermine the cryptocurrency ecosystem.

Roche Freedman, New York-based legal firm, filed a class-action lawsuit on behalf of those who own cryptocurrency against Bitfinex and Tether and others for crypto market manipulation and creating the largest bubble in history.

In the class-action suit, the New York-based legal firm alleged that Bitfinex and Tether had been involved in manipulating markets and concealing illicit proceeds, as stated in the tweet by the law firm’s founding partner, Kyle Roche.

The complaint filed with the United States District Court in the Southern District of New York stated that Bitfinex and Tether were involved in a sophisticated scheme to defraud investors. The complaint said that the action concerns a “part-fraud, part-pump-and-dump, and part-money laundering.”

Bitfinex and Tether Reject False Allegations

In a release shared with Blockchain.News, Bitfinex, Tether, and their related entities have today officially rejected what they are calling ‘blatantly false allegations’ made in the consolidated class action lawsuit filed against them.

Stuart Hoegner, General Counsel for Bitfinex, said, “Even after taking three full months to amend their complaint, the plaintiffs’ allegations remain untethered to either the facts or the law. They conflate perceived correlation with causation in an effort to prop up theories that are untrue and unsupportable.”

The release highlighted that the plaintiffs’ accusations started with an academic paper whose authors were forced to walk back their central claims. According to the defendants, the only consistency in the arguments leveled against them is the complete lack of evidence, and claim that the Plaintiffs cherry-pick pieces of information and string them together to weave an elaborate narrative unsupported by evidence.

“While suggesting the sheer size of the demand for Tether coupled with changes in the market clearly led to only one conclusion – market manipulation – plaintiffs disregarded the actual workings and financial backing of Tether, the operations of Bitfinex, general principles of supply and demand, and publicly available research that confirms there was no manipulation,” confirmed Hoegner. “If you see a group of people opening umbrellas, that doesn’t mean that they caused it to rain.”

“Tether is proud to play a critical role in the digital token ecosystem. This meritless lawsuit is an insult to the ingenuity of Tether’s customers, as well as the success and innovation of the industry and all who play a role in it. Bitfinex and Tether will vigorously defend themselves, their customers, their stakeholders, and the crypto community against these unfounded allegations and continue to counter fiction with facts,” said Hoegner.

Demand For Stablecoins Up

On-chain activity for stablecoins has surged over the last year, increasing by 800% according to market intelligence, but could the increase in stablecoin issuance create inflation in the cryptocurrency markets as past allegations against Tether and Bitfinex have suggested?

Completely counter to these kind allegations, the official release cites that Tether was created to establish stability – not volatility – in the cryptocurrency market. The first financial technology company to issue a “stablecoin,” USDT tokens are pegged 1:1 to the U.S. dollar, backed by Tether’s reserves. The market demand for this stablecoin has increased significantly, with more than nine billion Tether in circulation today.

To Criminalize or Not to Criminalize Bitcoin and Crypto? Moscow Reconsiders

The State Duma is discussing its legislative plans regarding Bitcoin (BTC) and cryptocurrency usage and has been reported to seemingly have a change of heart regarding digital assets adoption in Russia.

Russia Wants to Ban BTC and Crypto

Previously, the Russian parliament was planning on banning all forms of cryptocurrencies once and for all. This implication would have brought severe repercussions for the Russian crypto community, as it would have meant that Bitcoin and altcoin owners would face serious jail time or be slapped with a huge fine if they did not comply with regulations. The rumors around the legislation has caused quite a ripple, as Russian officials have been arguing about crypto regulation since January 2018.

Russian Parliament Revises DFA Bill

However, recent reports indicated that the Russian parliament is discussing the amendment of their legislation regarding cryptocurrencies. Rather than putting Bitcoin and crypto investors behind bars for their involvement with crypto assets, they are thinking of a less punitive law to regulate cryptocurrency use in Russia.

Legislative readings on the Digital Financial Assets (DFA) bill in Russia are scheduled in different sessions, and the State Duma has been thinking of passing their proposal for digital financial assets (DFA) in the autumn one. Russian financial regulators have in fact been hard at work reviewing a newly revised version of the DFA bill, that would not criminalize Bitcoin. However, it is safe to say that there will be imposed regulations regarding cryptocurrencies. During the preparation of the DFA bill for the second reading, industry concepts such as “mining” and tokens” were removed. All that was left was a link indicating that the regulation of crypto assets would be determined in another law; this would be “adopted in the autumn session,” Askakov confirmed.

One thing is for certain: there will be “no responsibility in this bill” and criminal liability for digital currency use may be waived. As for smart contracts, ICOs and mining in Russia, legislation has not yet been determined.

State Duma – Not a Crypto Fan

Though many may view this as an improvement from straight up jailing crypto investors, Russia’s State Duma has been firm in the past regarding its stance regarding Bitcoins and altcoins- it simply does not like it. Chairman of the Duma committee Anatoly Askakov spoke up regarding crypto and expressed his views. He is one of the officials overlooking Russian financial market regulations:

“On the one hand, this is a means of payment in the form of an electronic digital code, but at the same time it is neither an international monetary unit, nor a monetary unit of a foreign state or the Russian Federation.”

China’s Supreme Court Decides to Strengthen the Protection of Cryptocurrency Property Rights

The Chinese Supreme Court has decided to strengthen cryptocurrency property rights. The Supreme Court is looking to further protect property rights, including economic property rights through different ownership systems in accordance with the law.

According to the official document, China’s Supreme Court is looking to:

“Strengthen the protection of new rights and interests such as digital currency, network virtual property, and data, and give full play to the value leading role of judicial judgments in the protection of property rights.”

The document further stated that there would be punishment on all infringements of property rights including the embezzlement of sale of state-owned and public assets.

China considers Bitcoin as virtual property with monetary value

The Shenzhen Arbitration Commission mentioned that cryptocurrency assets should be protected in accordance with Chinese regulations on property ownership in October 2018.

In July 2019, Bitcoin has been recognized as valuable, scarce, and disposable which are attributes of property with protection under Chinese law.

A property dispute involving Bitcoin was held in the internet court in Hangzhou, China on July 18, setting a new precedent by declaring that Bitcoin is virtual property with monetary value.

According to Pang Lipeng — one of the attorneys on the case, the court’s ruling concludes that owning cryptocurrencies in China is still legal and should be protected according to the corresponding property rights.

“This is a clear signal that the financial authorities are starting to loosen control over digital currency and virtual currency,” said Cao Yin, one of the earliest advocators of blockchain technology in China.

China’s civil code protects the inheritance of cryptocurrencies

China recently passed a civil code protecting the civil rights of inheritance, marriage, personality, and contract infringement, and personal legal property, which includes cryptocurrencies.

According to Lixin Yang, a professor at Renmin University of China, the civil code states that “When a natural person dies, the legacy is the personal legal property left by she/he.”

Personal legal property in this case also means “internet property” including virtual currencies. Chinese citizens will be able to leave their cryptocurrency and virtual assets to their heirs, coming into effect on January 1, 2021.