Tag: Crypto

Crypto Innovations and IBM’s Role in the Evolving Payments Landscape

by Blockchain News

As the world of finance undergoes rapid digital transformation, the introduction of novel payment methods, including cryptocurrency and the much-anticipated Central Bank Digital Currencies (CBDC), is reshaping the industry. Prakash Pattni, in his recent analysis, highlights the challenges and opportunities this presents, especially for traditional banking institutions.

The rise of disruptive digital entrants has intensified competition in the payments ecosystem. With an array of choices now available to customers, from cryptocurrencies to CBDCs, traditional banks are grappling to retain their market share. The introduction of CBDCs, hailed as a significant step towards the digitization of national currencies, further underscores the urgency for banks to modernize their payment systems.

Regulatory bodies, recognizing the potential risks associated with the rapid integration of non-traditional players like fintechs and neobanks, are enhancing their oversight. Financial institutions, in response, are expected to adapt swiftly to these evolving compliance standards, ensuring the safety, efficiency, and resilience of their payment infrastructures.

Amidst these challenges, the need for seamless customer experiences remains paramount. Pattni emphasizes the importance of understanding the entire payment process, from the initial point of sale to the final transaction. With the majority of initial customer interactions now occurring through digital channels, the IT architecture supporting these transactions must be robust, secure, and efficient.

Enter IBM. The tech giant is offering solutions tailored for this new era. Their “Check Payments on IBM Cloud for Financial Services” is a testament to this commitment. Operating in a secure cloud environment, this service ensures compliance with financial regulations, addressing the needs of banks in an age where, despite the decline in daily check transactions, the overall value of processed checks remains significant.

IBM’s collaborative approach, working with over 130 tech partners and fintechs through the IBM Financial Services Cloud Council, further solidifies its position as a leader in this transformation.

In conclusion, as the payments landscape continues to evolve, driven by innovations like cryptocurrencies and the introduction of CBDCs, the onus is on both traditional and non-traditional financial institutions to stay ahead of the curve. Leveraging partnerships with tech giants like IBM, and ensuring a continuous commitment to digital transformation, will be key to navigating this new frontier.

Disclaimer & Copyright Notice: The content of this article is for informational purposes only and is not intended as financial advice. Always consult with a professional before making any financial decisions. This material is the exclusive property of Blockchain.News. Unauthorized use, duplication, or distribution without express permission is prohibited. Proper credit and direction to the original content are required for any permitted use.

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Galaxy Asset Mgmt Secures FTX Crypto Sale Bid; Weekly Cap Set at $50M

by Blockchain News

Key Takeaways

Galaxy Asset Management winning the bid.

The court-approved sale of FTX’s crypto assets.

The capped sale of $50 million per week.

Jeff Dorman, CFA and CIO of Arca, shares updates regarding the court-approved sale of FTX‘s crypto assets. Contrary to rising concerns, Dorman sheds light on the meticulous and strategic approach to the asset sales.

Galaxy’s Role and Regulations

Galaxy Asset Management, distinct from its trading desk, emerged victorious in its bid for the crypto assets. They have been mandated to function as fiduciaries, implying sales must be gradual and opportunistic. Notably, court documents restrict sales to a maximum of $50 million per week. Moreover, sales necessitate a written notice prior to their execution, while hedging remains at the discretion of the investment manager, presumably Galaxy.

Market Sentiment and Realities

Galaxy’s win has spurred massive reverse inquiries, ranging from legitimate funds to mere fishing expeditions. However, over-the-counter (OTC) sales are expected to dominate the buying process, reducing the likelihood of extensive selling on exchanges. Contrary to some speculations, Galaxy is unlikely to impulsively sell $3 billion in futures. Dorman asserts that the objective is to outperform a static portfolio, rather than converting the estate into a L/S fund.

Legal Constraints and Planning

It’s imperative to understand that Galaxy can’t “front-run” the sales for internal profit, as such a move would be illegal. Their asset management business remains insulated from their prop desks & Novgratz’s PA. As Dorman emphasized, this isn’t a hasty plan but a result of prolonged collaboration with courts.

Bankruptcy and Sales Strategy

Bankruptcies, particularly those as intricate as FTX, require time. The endgame is to maximize the estate’s value rather than expedite distributions. This approach might limit short-term gains but ensures there’s no hurried sale into weakness.

Market Makers & Selling Dynamics

Market dynamics often witness traders selling more than anticipated ahead of known block sales. To illustrate, if PIMCO sells $100 million of bonds and ten funds sell $50 million each in preparation, the actual coverage of the $500 million sold remains questionable.

Sales Tempo

If the market observes swift sales, it indicates strong demand and the market’s capacity to absorb it – a bullish sign. Conversely, slower sales suggest a lack of bids, which can also be seen as bullish or at the very least, neutral in its market impact.

In summary, Dorman believes that the sales process will be systematic, strategic, and potentially slower than expected, ensuring an organized transition. Traders and investors are advised to be informed and cautious in their decision-making.

Disclaimer & Copyright Notice: The content of this article is for informational purposes only and is not intended as financial advice. Always consult with a professional before making any financial decisions. This material is the exclusive property of Blockchain.News. Unauthorized use, duplication, or distribution without express permission is prohibited. Proper credit and direction to the original content are required for any permitted use.

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Report: Visa Blocks $30 Billion in Fraud, Highlighting Crypto and NFT

by Blockchain News

Visa Inc. (NYSE:V), a global pioneer in digital payments, unveiled its Fall 2023 Biannual Threats Report, spotlighting the escalating sophistication of fraud schemes in the retail and eCommerce sectors.

Key Takeaways

Phishing Schemes Amplified by AI: The report underscores a notable surge in phishing schemes, now amplified by generative AI tools. This evolution marks a new chapter in the cyber threat landscape.

Ransomware Attacks on the Rise: March 2023 set a new record with approximately 460 ransomware attacks, marking a 91% spike from February 2023 and a 62% increase year-over-year. Notably, these attacks aren’t solely targeting payment data but are compromising any accessible data, including personal identifiable information.

Enumeration Attacks Surge by 40%: The first half of 2023 witnessed a 40% uptick in enumeration attacks. Visa’s real-time Account Attack Intelligence played a pivotal role in identifying and mitigating these threats.

Online Merchants Bear the Brunt: Online merchants accounted for 58% of total fraud and breach investigations, with physical retailers at 20%, and ransomware/fraud schemes at 7%.

Retail-Specific Schemes Gain Traction: The past six months saw a measurable increase in retail-specific fraud schemes. These include counterfeit merchant sites, malvertising, flash-fraud scams, and the emerging “free gift” crypto scam.

Paul Fabara, Chief Risk Officer at Visa, commented, “The $30 billion of fraud prevented in the last six months is a testament to Visa’s proactive approach, even as fraudsters become increasingly sophisticated.”

Global Collaborative Efforts

Visa’s collaboration with global law enforcement has led to significant crackdowns on cybercrime. Noteworthy actions include:

Try2Check Platform Takedown: In May 2023, the US Secret Service dismantled the cybercrime platform Try2Check. Its administrator, Denis Gennadievich Kulkov, now faces a potential 20-year prison sentence.

Operation Urban Justice: This California-based operation targeted Electronic Benefit Transfer (EBT) fraud, resulting in the arrest of 20 suspects linked to an Eastern European crime syndicate.

Genesis Market Takedown: April 2023 saw an international coalition arrest 119 individuals associated with the cybercrime platform.

Visa’s multifaceted approach, from its Risk Operations Center to its Payment Threat Intelligence team, showcases its commitment to safeguarding the global economy.

Visa has recently unveiled its enhanced stablecoin settlement capabilities. As reported by Blockchain.News, this expansion includes the integration of the Solana blockchain. Furthermore, Visa has embarked on pilot projects in collaboration with merchant acquirers Worldpay and Nuvei.

Disclaimer & Copyright Notice: The content of this article is for informational purposes only and is not intended as financial advice. Always consult with a professional before making any financial decisions. This material is the exclusive property of Blockchain.News. Unauthorized use, duplication, or distribution without express permission is prohibited. Proper credit and direction to the original content are required for any permitted use.

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Bloomberg: FTX Bankruptcy Triggers 30% Profit Margin Drop for Crypto Market Makers

by Blockchain News

According to Bloomberg‘s report dated September 5, 2023, liquidity providers Auros, GSR Markets Ltd., and Wintermute Trading Ltd. have disclosed that the bankruptcy of the FTX exchange has led to a 30% reduction in profit margins for crypto market makers. “The FTX debacle was a wake-up call for the industry,” commented Le Shi, head of trade at Auros.

In the wake of the FTX bankruptcy, market makers are re-evaluating their risk profiles and are advised to diversify their operations and store their digital assets away from trading platforms. Auros further elaborated that using intermediary services for collateral storage contributes to a 20%-30% decline in profitability, compared to leveraging coins directly on a trading site.

Meng Hwee Neo, managing director of trading and Singapore co-head at GSR Markets, told Bloomberg that market makers are increasingly focusing on Bitcoin and Ether in a “flight to quality” strategy. While this shift may result in slimmer profit margins, it offers greater volume and business opportunities.

CCData statistics, as cited by Bloomberg, reveal that monthly spot trading volumes on centralized crypto exchanges have plummeted 74%, dropping to $445 billion in August 2023 from $1.1 trillion in January 2022.

Market-making firms like Jane Street Group and Jump Crypto are retreating from the digital asset market due to low trading volumes, increased volatility, and heightened U.S. regulatory scrutiny on exchanges such as Binance Holdings Ltd. and Coinbase Global Inc.

 The repercussions of FTX’s insolvency extend beyond market makers to encompass nearly all entities in the crypto sector. BlockFi’s CEO, whose company also went bankrupt, previously admitted to disregarding advice from their risk management experts on lending assets to Alameda Research and FTX.

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Binance Introduces “Word of the Day” Game to Enhance Crypto Literacy and Offer Rewards

by Blockchain News

The world’s largest cryptocurrency trading platform, Binance, has introduced a new feature to its website known as “Word of the Day” (WOTD), which is designed to educate consumers on various crypto-related terminology, according to official annoucement. In addition, participants have the opportunity to earn Binance Points, which may later be redeemed for a variety of other prizes. This promotion’s activity window runs from September 4, 2023 at 00:00 Coordinated Universal Time (UTC) through September 10, 2023 at 23:59 Coordinated Universal Time (UTC).

Details

The WOTD feature is an educational word-guessing game designed to help users expand their cryptocurrency vocabulary while keeping abreast of market trends. The theme for the week starting September 4 is “Recurring Trading.” Binance has invested significantly in trading education. Yesterday, Binance issued a tweet cautioning against emotional trading, accompanied by an article titled “Trading Psychology: How to Trade Without Emotions.”

How to Participate

According to the official announcement, all users are eligible to play up to two WOTD games per day. To be eligible for a share of the 500,000 Binance Points pool, participants must get a total of five correct answers during the activity period. These points can be used to redeem rewards at Binance’s Rewards Hub.

Additional Features

After completing the first WOTD game, users can unlock a second game by sharing one of the selected articles of the day on social media. The second game is accessible once the shared link is clicked.

New User Incentives

New users who register for a Binance account using the referral code “WOTD2023” during the activity period will receive a 10% discount on spot trading fees. Additional welcome rewards can be earned by completing tasks at the Rewards Hub within 14 days of registration.

Terms and Conditions

The terms and conditions for this activity specify that only users from qualified regions who complete account verification are eligible to participate. All Binance Points will be distributed within two weeks after the activity ends. Each Binance Point will expire on the last day of the same month when it was first distributed a year later if not used at the Rewards Hub.

Implications

This initiative by Binance serves as both an educational tool and a rewards program, potentially increasing user engagement on the platform. However, it’s worth noting that the products and services mentioned may not be available in all regions.

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Gala Games Co-Founders Sue Each Other Over $130M Crypto Theft

by Blockchain News

A recent lawsuit filed in the United States District Court for the District of Utah has revealed internal strife at Gala Games, a leading company in the web3 gaming industry. Co-founders Eric Schiermeyer and Wright Thurston have filed lawsuits against each other, with the documents becoming public on August 31, 2023.

Detailed Allegations from the Lawsuit

According to the 76-page Verified Shareholder Derivative Complaint filed by Eric Schiermeyer, Wright Thurston and his investment vehicle, True North United Investments, LLC, are accused of stealing 8,645,014,077 GALA tokens from the company.

These tokens are integral to the Gala Games ecosystem. The lawsuit alleges that Thurston initiated a “complex web of obfuscatory transactions” to move, exchange, or sell the stolen tokens, amounting to approximately $130 million, before the company could take action.

Founder and Chief Book Wizard at MagicBookAI state,

BREAKING: Gala Games, one of the largest ecosystems in the web3 gaming industry, is facing internal strife as two of its co-founders have filed lawsuits against each other.

SEC’s Previous Involvement

The lawsuit also brings to light that the United States Securities and Exchange Commission (SEC) had previously sued Thurston and True North for alleged fraudulent activities related to “Green Boxes,” an energy-efficient crypto token venture.

Company and Tokenomics

Gala Games, incorporated under the laws of Wyoming, has developed a blockchain-based gaming infrastructure where GALA tokens serve as the core utility token. The tokens are used for in-game purchases and as a medium of exchange between players. The company also offers Gala Nodes, which are capped at 50,000 and can be operated to earn GALA tokens.

Thurston’s Checkered Past

The lawsuit delves into Thurston’s history, highlighting his involvement in multiple companies that have faced litigation, insolvency, or bankruptcy. It states that Thurston has been sued by the SEC in the past and has been involved in numerous failed ventures, including multi-level marketing companies.

Legal and Financial Repercussions

Schiermeyer’s lawsuit seeks disgorgement or restitution for the stolen cryptocurrency, compensation for the damage caused to Gala Games, and the removal of Thurston as a director. The lawsuit also mentions that Thurston purchased a $40 million house in Puerto Rico in March 2022.

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SEC’s XRP and Grayscale Bitcoin ETF Cases Challenged by US House Majority Whip Tom Emme

by Blockchain News

House Majority Whip Tom Emmer has once again taken to Twitter to challenge the U.S. Securities and Exchange Commission’s (SEC) approach to cryptocurrency regulation. Citing the SEC’s recent legal losses against Ripple and Grayscale, Emmer suggests that the regulatory body’s stance on crypto is misguided. His latest comments, dated September 3, 2023, have garnered significant attention, amplifying the ongoing debate on the appropriate level of crypto regulation.

Emmer’s Latest Remarks

In a tweet on September 3, 2023, Tom Emmer stated, 

SEC loses on Ripple… SEC loses on Grayscale… We will see how pending litigation plays out, but it should be increasingly obvious to policymakers that, despite @GaryGensler’s mass marketing campaign, crypto is not an industry ‘rife with noncompliance.’

Checks and Balances in Focus

Emmer’s critique resonate with previous tweet, emphasizing the role of checks and balances in holding the government accountable.

Our system of checks and balances holding the abusive Administrative State accountable,

he wrote, quoting a previous tweet that announced a DC Court of Appeals decision in favor of Grayscale on August 29, 2023.

A Consistent Critic

Emmer has been a consistent critic of the SEC’s regulatory approach to cryptocurrencies. As early as November 4, 2021, he sent a letter to SEC Chairman Gary Gensler, questioning the inconsistency in the agency’s treatment of Bitcoin futures ETFs and Bitcoin spot ETFs. “I’ve called out @GaryGensler’s regulatory hypocrisy for years,” Emmer noted in a tweet on August 30, 2023.

Implications for Policymakers

Emmer’s recent comments add another layer to the ongoing debate among U.S. policymakers about the future of cryptocurrency regulation. With the SEC facing legal setbacks, the question arises whether its current approach is effective or even appropriate, a point that Emmer’s latest tweet underscores.

Conclusion

As the SEC grapples with legal challenges and increased scrutiny, Tom Emmer’s tweets serve as a timely critique from a high-ranking government official. His comments suggest that the debate over the regulatory landscape for cryptocurrencies is far from over, and they call into question the SEC’s current strategy.

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SEBA Hong Kong Gains Preliminary Approval for Crypto-Related Services

by Blockchain News

SEBA Hong Kong, a subsidiary of Swiss-based SEBA Bank AG, has been granted an “Approval-in-Principle” (AIP) by Hong Kong’s Securities and Futures Commission (SFC). This preliminary approval positions SEBA Hong Kong to become one of the first licensed corporations in the city to offer crypto-related investment services.

Regulatory Green Light for Crypto Services

The AIP allows SEBA Hong Kong to proceed with its license application for conducting regulated activities in the city. The scope of the license includes dealing in securities and virtual assets-related products such as OTC derivatives and structured products. Additionally, the firm is authorized to advise on securities and virtual assets and manage discretionary accounts in both traditional and digital assets.

“The AIP marks a significant leap forward in SEBA group’s mission to secure the future of the global crypto economy and, in turn, validates SEBA Hong Kong’s position in the market as a trusted and regulated partner,” said Franz Bergmueller, Group CEO of SEBA Bank.

A Strategic Move in Asia Pacific

The AIP is a crucial step in SEBA Hong Kong’s broader Asia Pacific strategy. The firm aims to offer wealth management, investment, and advisory services with the security and customer experience that accompanies a regulated institution. “This AIP signifies that all our efforts are heading in the right direction,” commented Amy Yu, CEO APAC of SEBA Hong Kong.

Aligning with Global Regulatory Standards

SEBA Bank already holds licenses from Swiss regulatory body FINMA and Abu Dhabi’s Financial Services Regulatory Authority (FSRA). The Hong Kong AIP “significantly extends our global regulatory footprint,” Bergmueller noted.

Market Implications

The move is indicative of Hong Kong’s growing role in the global crypto economy and sets a precedent for regulatory standards in the digital asset space. “We see enormous potential in Hong Kong’s journey to becoming a global crypto market leader,” said Yu.

 SFC’s Comprehensive Virtual Asset Framework

The SFC has been a pioneer among major jurisdictions in establishing a comprehensive regulatory framework for virtual assets, commonly referred to as cryptocurrencies. Under the guiding principle of “same business, same risks, same rules,” the SFC aims to regulate various virtual asset-related activities. These include the operation of virtual asset trading platforms, fund management, and advising or dealing in virtual assets. The regulatory body’s approach aims to balance investor protection, market integrity, and risk management for financial institutions.

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India Advocates for Global Cryptocurrency Framework at G20 Summit

by Blockchain News

At the latest Group of 20 (G20) summit, Prime Minister Narendra Modi of India highlighted the need for international collaboration in crafting cryptocurrency guidelines. With India holding the G20 presidency, it is actively pushing for a cohesive global strategy on cryptocurrency governance.

The G20, comprising 19 countries and the European Union, serves as a pillar for the world’s dominant and emerging economies. It plays a crucial role in reinforcing international structures and decision-making on key global economic concerns.

In an interaction with a domestic publication, Modi delved into the future of nascent technologies like blockchain and cryptocurrency. He emphasized their potential to influence globally, stressing the need for regulations that transcend national boundaries. Drawing an analogy with the aviation sector, Modi noted that in the same way there are standardized rules for air traffic and security, cryptocurrencies should be governed by global standards.

Modi elaborated on India’s contributions to the global crypto dialogue, stating, “India’s G20 presidency expanded the crypto conversation beyond financial stability to consider its broader macroeconomic implications, especially for emerging markets and developing economies. Our presidency also hosted enriching seminars and discussions, deepening insights into crypto assets.” On August 1, India released a presidency note detailing its perspectives on a global framework for cryptocurrency. This note aligned with guidelines from the Financial Stability Board, the Financial Action Task Force, and the International Monetary Fund, while also incorporating additional suggestions tailored to developing economies.

Despite India’s push for a global crypto framework, the nation’s own regulatory environment for cryptocurrencies remains ambiguous, marked by high taxation and a lack of clarity. In 2022, India introduced a 30% tax on cryptocurrency gains, which resulted in a significant departure of emerging crypto companies and a marked decrease in cryptocurrency trading activity.

The G20’s role in international economic cooperation is crucial in addressing and harmonizing regulations for emerging technologies. With India at the helm of the G20 presidency, the country is poised to influence the global conversation on cryptocurrency regulations, emphasizing the importance of a unified approach.

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dYdX Founder: Focus on Overseas Markets Over US for Crypto

by Blockchain News

On August 26th, dYdX founder Antonio Juliano shared his views on Twitter about the US crypto landscape. He advised crypto developers to prioritize overseas markets due to the existing regulatory hurdles in the US. “Crypto builders should just give up serving US customers for now and try to re-enter in 5-10 years,” Juliano tweeted, emphasizing that the majority of the market is overseas. “Innovate there, find PMF, then come back with more leverage.”

Juliano further clarified his stance, stating that in the broader picture, very few people currently use or are concerned about crypto. His primary focus is on the long-term growth of the crypto sector, aiming for a 100x increase. He believes that the key to this growth is finding a stronger product-market fit, which doesn’t necessarily require perfect distribution. “There is a plenty big overseas market to experiment in,” he added.

However, Juliano did not dismiss the importance of US crypto policy. He acknowledged its significance, especially since many countries often follow the US’s lead. He emphasized the need for crypto products with massive usage, which would influence policy decisions. “We need to have products with massive usage where users (voters) say ‘wait, I need this’,” he pointed out.

The dYdX founder also highlighted the importance of builders being able to remain in the US, given the concentration of tech talent in the country. He expressed his frustration over the fact that many Americans, including those in his New York office, cannot use products that address long-standing crypto challenges. “Crypto is aligned with American values… America will realize that eventually,” Juliano concluded.

In response to Juliano’s tweets, Brian Armstrong, CEO of Coinbase, offered a more optimistic outlook. He believes that the situation in the US will improve sooner than Juliano anticipates, possibly by next year. “The U.S. always gets it right, after exhausting every other option,” Armstrong tweeted, expressing confidence in the country’s ability to adapt and support crypto progress.

Both leaders, while having different timelines in mind, seem committed to navigating the challenges and ensuring the growth and adoption of crypto in the US and beyond.

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