India is taking a step backward in innovation as it proposes to a blanket ban on cryptocurrencies and severe punishment for those caught on the wrong side of the law. Justin Sun’s delayed his charity lunch with bitcoin critic Warren Buffett due to kidney stones. A bank in the Philippines has launched its own cryptocurrency. Cryptocurrency exchanges need to beef up their security strategies as new reports suggest that they lost $1.2 billion in theft and fraud in Q1 alone.
Indian panel proposes cryptocurrency ban and jail time for offenders
India’s hostile position on cryptocurrency does not seem to be taking a turn for the better. A high-level panel created by three institutions – Ministry of Electronics and Information Technology, the Securities and Exchange Board of India, and the Reserve Bank of India – has recommended the banning of private cryptocurrencies issued in foreign lands by private enterprises.
On a slightly positive note, the panel recommends that the Reserve Bank of India (RBI) can create its own cryptocurrency, noting that it could be a boom.
The inter-ministerial committee instituted in 2017, said, “The committee recommends that all private cryptocurrencies, except any cryptocurrency which may be issued by the government, be banned in India.”
In an interview with the India Economic Times, the RBI governor Shaktikanta Das said private currencies would destroy financial stability.
“You cannot have private entities issuing currency instruments because that will completely undermine and destroy macroeconomic and financial stability.”
If the Indian government accepts the proposed ban, this would affect Facebook’s Libra cryptocurrency that is reported to be targeting the Indian market. This will likely drive cryptocurrency exchanges out of the country and lead to job losses, something that can be avoided should the government take a more innovative approach to the whole situation.
Ten-year jail time for dealing with cryptocurrencies
India is not only planning to ban cryptocurrencies but to severely punish those dealing with digital assets. The committee proposed heavy fines or jail time of up to ten years for cryptocurrency offenders in the country.
This, by any standards, is an unfair outcome from the research panel and it will likely be met with resistance from existing cryptocurrency businesses or organizations. It will likely force the Indian public to trade digital currencies under the government’s radar.
Tron leader Justin Sun apologizes for missing charity lunch with Warren Buffett
The founder and CEO of Tron, a blockchain firm with ambitions to decentralize the internet has apologized for failing to attend the highly hyped $4.6 million charity lunch with legendary investor and bitcoin critic Warren Buffett.
The Chinese blockchain entrepreneur announced in June that he had won a $4.6 million lunch with Buffet at an auction. He later said he would use the meeting to educate the billionaire investor about crypto.
Buffett has on numerous occasions dismissed cryptocurrencies, particularly bitcoin, calling it a gambling device and rat poison squared.
It was reported that Sun would miss the event due to kidney stones but reports from Chinese media outlets suggested that the Tron founder was denied exit visa from the People’s Republic of China while his company was under investigation from authorities.
He debunked the rumors and posted a video of himself in San Francisco and proved that he was not stuck in China.
He wrote a blog post acknowledging that he had excessively promoted the event. He added that doing so “produced a lot of consequences that I completely did not expect.”
Sun promised to take along a powerful team of seven friends to dinner to convince Buffett that he is wrong about crypto. Litecoin founder Charlie Lee will be attending. Changpeng Zhao, the founder of cryptocurrency exchange Binance turned down an early invitation.
Cryptocurrency exchange lose $1.2 billion in Q1
The cryptocurrency industry is not doing itself any favors as it faces regulatory scrutiny from regulators and lawmakers.
Cryptocurrency exchanges have lost $1.2 billion from thefts and fraud in the first quarter of this year, The Nikkei Asian Review reported. Using data from American crypto intelligence company CipherTrace, the losses in Q1 alone now make up about 70 percent of all the 2018 losses that amounted to $1.7 billion.
The alarming rate of thefts and hacks has put exchanges under pressure as they face attacks from hackers who want to make a quick buck off them. With targets on their backs, cryptocurrency exchanges have to work extremely hard or think outside the box in order to ward off attacks from cybercriminals.
Cryptocurrency exchanges came on the spotlight when Coincheck lost more than $500 million in a hack in January last year. And to make matters worse, highly respected and secure exchanges such as Binance have fallen victim to hacks this year.
Binance lost around 7,000 bitcoins in the hack and initially suggested to ‘roll back the Bitcoin network’ in order to reverse the theft.
The majority of the hacks involve hot wallets – crypto accounts constantly connected to the internet although exchanges are aware that they need to store customer assets in cold wallets. However, customers are forced to keep their cryptocurrencies in hot wallets if they want to make transactions.
While this figure is too high already, CipherTrace reckons that there are several hacks that are yet to be discovered.
And it goes without saying that customers should take it upon themselves to safeguard their own digital currency and not fully trust exchanges which have become a playground for thieves.
Iran legalizes green lights cryptocurrency mining
Iran has moved forward with legalizing cryptocurrency mining as an industrial activity. The new decision was made by a cabinet meeting chaired by the president Hassan Rouhani.
Other firms with activities in the industry are required to obtain licensing from the country’s Ministry of Industry, Mine, and Trade.
Many experts are already claiming that this is the first step in Iran’s plan to counter the devastating sanctions imposed on it by Washington. The country has hinted in the past that cryptocurrencies could be used as a tool to dodge sanctions.
Despite this progressively ruling, it does not mean that cryptocurrencies are now accepted in the country. The cabinet meeting ruled that using digital assets for local transactions remains banned and those who transact using crypto assets will bear the risks associated with them and will not get any help or guarantees from the government.
According to local reports, the subsidized electricity costs have prompted miners from as far as China to relocate to the country.
Philippines UnionBank launches own cryptocurrency
The Philippines UnionBank has become the first bank in the country to launch its own cryptocurrency, a stablecoin known as PHX.
The bank’s vice president and chief of the fintech business group Arvie de Vera said the stablecoin connects the bank to rural banks.
“PHX is a stable store of value, medium of exchange and is a programmable token with self-executing logic. It enables transparent and automatic execution of payments,” said de Vera.
The stablecoin is tied to the Philippine Peso. Transactions involving the stablecoin are implemented on the i2i network.
The stablecoin will initially be available to i2i participants who can buy it from their UnionBank accounts. PHX is interoperable and in the future, will be used on a global scale.
UnionBank uses this project as a means of providing value to customers through innovative solutions.
Four South Korean exchanges face banking challenges in South Korea
Four of South Korea’s well-known cryptocurrency exchanges – Bithumb, Upbit, Coinone, and Korbit – are facing strict regulations as they work to renew their banking accounts. The difficulties come after the Financial Action Task Force released new recommendations on virtual currencies.
The new framework requires digital asset service providers to comply with anti-money laundering and approach finance terrorism procedures in the same manner as traditional finance firms.
The new guidance by the FATF is not strictly enforced but countries that don’t comply run the risk of being excluded from the global financial network.
A report by TheBchain suggests that banks servicing crypto firms will be legally held liable if there are cases of money laundering.
An official from one of the country’s trading sites that this would negatively affect smaller exchanges who may be forced to close shop.
“In order to meet this standard, small- and medium-sized exchanges that lack the necessary funds are likely to disappear from the market.”
This should not come as a surprise as several banks will look to protect themselves by cutting ties with exchanges that may land them in hot water.
South Korea approves a blockchain-free regulation zone
The South Korean government has approved Busan – the country’s second-most-populous city with a population of 3.6 million – to be a blockchain-free regulation zone. This comes after the city got the nod for this purpose from the Ministry of Startups and SMEs in April.
It has also been reported the regulation-free zone does not come with many benefits such as exemptions from the ICO ban in the country. And it seems that the only cryptocurrency recognized in the zone is a regional stablecoin.