People’s Bank of China in Shanghai Warns About Cryptocurrency Scams

Maria Rodríguez
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People’s Bank of China in Shanghai Warns About Cryptocurrency Scams

The report seeks to prevent people from falling in cryptocurrency scams, while the country is preparing its Central Bank Digital Currency (CBDC)

The People’s Bank of China (PBoC) in the city of Shanghai recently published a report with a warning about cryptocurrency scams. The financial institution indicated the number of crypto scams that those who invest in blockchain technology and digital currencies can suffer.

The warning refers to a set of examples related to some known crypto scams within the crypto industry. Besides, this report suggests not investing in this type of digital asset.

According to the warning that the bank published on the QQ web platform last May 12th, there are several ways to detect scams in the crypto world. For this reason, the bank created a total of 16 responses to the most common questions that may arise if users suspect that a crypto-business is a scam.

The article also points out other scam methods that scammers carry out from traditional mechanisms. However, the PBoC emphasizes that users must take special care when they are analyzing a business which includes blockchain technology or digital assets.

Although the article details that scammers still using traditional mechanisms, the increase in the crypto scam is not ruled out. The article also focuses on explaining what an illegal tax collection means, as well as the different ways to avoid and detect it.

Due to the explicit ban on the use of crypto assets that China approved in 2017, it was not possible to specify or name digital currencies and Initial Coin Offerings (ICOs). But most of the signals that the article describes are similar to the methods and ways of managing cryptocurrencies.

Some of these examples mention that, currently, one of the most common scams is related to the sale of “equal division of assets, advice, and the disposition of shares”. This scam suggests the method of tokenization of parts or shares in real estate. As mentioned, the article does not point to blockchain technology. However, it does seem to allude to it.

China and Cryptocurrencies

The Chinese government maintains a strong stance against the use of cryptocurrencies. On many occasions, the government issues statements remembering that the use of crypto assets is illegal in the country. Despite this, China is home to one of the highest levels of Bitcoin (BTC) hash in the world. This factor indicates that the movement of that digital asset in the country is substantial.

The legal loophole that surrounds cryptocurrencies in China generates that some cybercriminals avoid legal penalization. The country has to recognize cryptocurrencies as goods to penalize these criminals.

Despite this position, the PBoC continues to carry out tests on a blockchain platform that would serve as the basis for multiple functions. One of the plans in China is supporting the technological apparatus of the Central Bank Digital Currency (CBDC) that very soon may begin to circulate in a pilot test that includes companies like Mc Donald’s and Starbucks.

China will also use blockchain technology to build a cross-border trading platform that could well start operating on Hainan Island, as well as in other outstanding projects.

By María Rodríguez

FTX Exchange Launches Bitcoin Hash Rate Futures

Willmen Blanco
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FTX has already established three-period futures beginning in the third-quarter of 2020. Bitcoin hash rate futures contracts could be useful to Bitcoin miners.

Cryptocurrency derivatives exchange FTX has become the first notable platform to launch Bitcoin hash rate futures contracts. This product helps miners to have coverage against Bitcoin mining difficulty adjustments.

FTX Bitcoin hash rate futures adjust to average Bitcoin mining difficulty over some time. In other words, the approximations represent the total hash rate used to mine Bitcoin. For that reason, FTX said that it is impossible to accurately measure hash rate, the best thing to do is get a rough estimate of block times and difficulty.

The exchange first revealed its plan to launch Bitcoin hash rate futures last August 2019. The product has finally been launched after around nine months of work.

FTX CEO Sam Bankman-Fried stated that the exchange has seen “great interest” in hash rate futures, particularly from miners and related companies. In that sense, he explained that they have been increasing their relationship with mining companies and intermediaries. Now we think that their network is big enough to introduce real flow and interest to these futures.

Three Bitcoin Hash Rate Futures Contracts

The first FTX Bitcoin hash rate futures contract, for the third-quarter of 2020, expires with the average mining difficulty in the period July-September 2020.

Thomas Heller, Director of global business for the F2Pool mining pool, reported that he is excited to see the launch of the product. “Until now, there have been limited mechanisms to cover the risks of mining farms.” He said that users can use FTX hash rate futures to structure various types of financial products for miners.

Heller added that anyone can now participate in the mining ecosystem, even without any hardware. This is because FTX’s third-quarter product is based on the average network difficulty for the entire period.

Furthermore, FTX has also launched Bitcoin hash rate futures for the fourth quarter of 2020 and the first quarter of 2021.

New Things

Bitcoin hash rate futures themselves are not a new product. Cryptocurrency brokerage company BitOoda already launched hash rate contracts. Interhash, a partnership between Canaan Creative and market maker GSR, was also seeking to offer derivative products to miners.

However, a currency exchange that launches these types of products would have more liquidity and access to retail investors, compared to a brokerage company, according to an industry expert.

Bankman-Fried also seems to be less concerned about liquidity problems. He says that there are generally a lot of liquidity providers on FTX, and more will probably join shortly.

Darius Sit, Co-founder and partner manager of the cryptocurrency market maker QCP Capital, noted that FTX is not the first exchange to launch Bitcoin hash rate futures. He added that LedgerX has been offering them for almost a year. However, there seems to be no public information about it. Probably, the product has a low open interest.

The launch of the new FTX product happens at an interesting time, just a few days after the third Bitcoin halving, which saw the mining reward drop from 12.5 BTC to 6.25 BTC. The halving is likely to result in a decrease in hash rate and mining difficulty, and thus Bitcoin hash rate futures could prove useful to Bitcoin miners.

By Willmen Blanco

According to a Study, More Information about Cryptocurrencies Is Needed to Create Greater Confidence

Willmen Blanco
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According to a Study, More Information about Cryptocurrencies Is Needed to Create Greater Confidence

The American company Edelman interviewed more than 34,000 people for the study. A total of 76% of the surveyed users know very little about cryptocurrencies or blockchain technology.

Edelman, an American public relations and marketing consulting firm, published a survey on user confidence in cryptocurrencies.

The online survey started with an interview with more than 34,000 people in 28 different markets. The company collected the data from October 19th to November 18th, 2019. Some of the surveyed countries were Italy, China, Spain, Canada, Germany, the United States, Mexico, Argentina, Brazil, and Colombia.

One of the central points of the study concluded that the population should receive more education about cryptocurrencies and blockchain technology. This is because 34% of the respondents reported not knowing anything about the subject, and 42% said that they knew very little. This motivated Edelman to ask the respondents whether they believed that the impact of cryptocurrencies and blockchain technology would be greater with the increase in education on the subject.

According to the answers to this question, 71% of respondents believe that higher levels of information about cryptocurrencies would have a positive impact. Edelman notes that the more informed users are about cryptocurrencies and blockchain technology, the more they can see its potential for the future.

Education as the Focus of Efforts

On the other hand, the users could choose from different options to solve the problem of low levels of information on the subject. The first four solutions that they chose were: indicating their disadvantages, indicating their benefits, creating a code of ethics, and creating educational and training programs.

In this way, the Edelman study established completing four essential points to increase users’ confidence in cryptocurrencies. The first point is “addressing the benefits and risks of innovation.” The respondents said that knowing the advantages and disadvantages of cryptocurrencies and blockchain technology could motivate new users to learn more about the subject.

The second point is “strengthening education and awareness.” Even though there are already university studies in blockchain technology and cryptocurrencies in several parts of the world, the general population has very scarce knowledge of the subject. The third point is “demonstrating their utility and positive social impact,” since knowing what cryptocurrencies are for and how they would help the society is one of the reasons that informed people see potential in the technology.

The fourth point has to do with “committing to an industry code of ethics to create confidence.” As it is a very recent market, less experienced users are afraid that no regulation provides them with peace of mind as they enter the world of cryptocurrencies and blockchain technology.

The Bitcoin exchange bitFlyer Europe published the results of its second crypto-confidence index. To conduct this survey, the bitFlyer team interviewed 10,000 people in 10 European countries. The study indicated that users in Spain and several other countries in Europe increasingly trust Bitcoin.

By Willmen Blanco

Government of Spain Will Support Blockchain ​​Technology Projects

Maria Rodríguez
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Government of Spain Will Support Blockchain ​​Technology Projects

The financing is to support different technological sectors, the training of young people, and the promotion of small companies.

Last May 5th, the government of Spain approved the necessary budget to finance technological projects of different sectors. According to sources linked to government authorities, the main objective is to develop digital solutions that boost the technology industry in the country.

The financing measure includes a budget of 70 million euros, which will seek to boost various projects that include the development of technologies such as blockchain and other related platforms.

According to the recognized local media El Mundo, the government launched the proposal to support new companies and young scientists. This is the way that the Spanish government implements to accelerate digitization in Spain.

Besides, the Ministry of Economic Affairs and Digital Transformation of Spain hopes that this initiative help reduces the impact that the Coronavirus pandemic generated on the different aspects of citizens’ daily lives.

The financing also responds to a recognized program to boost small sectors called AceleraPyme. In this way, the ministry seeks to directly support technological development with a total of 35 million euros for companies linked to the program. This response to half of the budget. These different sectors will administer the budget directly.

Although an important part of the budget is aimed at the development of blockchain solutions, the program covers a large number of areas in technological development such as Cybersecurity, Internet of Things (IoT), Robotics, Nanotechnology, Digital Identity, Virtual Reality, inter alia.

Another important aspect is that the program includes a training system aimed at young people outside the conventional educational sector. For this reason, the Ministry of Economic Affairs and Digital Transformation will allocate 20 million Euros to educate young people in areas such as Big Data, Video Game Development, 3D Design, Programming, among others.

Lastly, the government will allocate 15 million Euros to the sector in charge of developing digital content such as music, animation, audiovisual programs, social networks, and the creation of new digital content. The program also includes the creation of mobile applications, among others.

No Date to Start

Although it is still unknown how the selection process will be to receive financial support, the community expects that the call takes place soon through the web, using the address of Red.es. Said web site will also be responsible for managing the contribution to those selected. This web platform is a public entity that is in charge of “digital convergence with Europe to improve public services and develop the digital economy”.

The government has not provided further details about how the process will be like. It has also not set a limit to receive the projects that would receive financing. However, the government clarified that it will properly separate the areas to have better control of the contributions.

It is not the first time that the Spanish government offers a financial contribution to the development of blockchain technology. In April 2019, the Ministry of Economy and Business of Spain approved a budget of 9 million Euros to support technological areas such as Robotics, Artificial Intelligence (AI), and blockchain technology. This contribution could continue.

By María Rodríguez

Vietnam Will Create a Group to Investigate the Use of Cryptocurrencies in the country

Alexander Salazar
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Vietnam Will Create a Group to Investigate the Use of Cryptocurrencies in the country

The government of Vietnam hopes the research to help streamline crypto policies.

In a public announcement, the Vietnamese Ministry of Finance approved the creation of a research group that will be in charge of evaluating cryptocurrencies and other digital currencies. The goal is to help the country develop adequate policies for this type of financial technology.

According to the announcement, nine experts in economic and technological affairs are part of the group. The Vice-Chairman of the State Securities Commission, Phan Hong Son, will be in charge of the group and guide these experts, according to the needs of the local government.

Other members of the group are officials from different government entities. In this way, there will be a representative of the General Department of Vietnam Customs, the General Department of Taxation, the National Institute for Finance of Vietnam, the Securities Regulator of the country and, finally, representatives of the Department of Banking and Financial Institutions of the State Bank of Vietnam.

The announcement explains that the group will have the main task of keeping abreast of new changes that arise in the technological activity of the blockchain. This will help authorities adapt to changes and modify regulatory policies in the country. They hope that the group will provide quick and efficient solutions to local problems, using blockchain technology.

Vietnam and Its Policy On Cryptocurrencies

Since 2018, Vietnam has considered the use of cryptocurrencies as illegal. In 2017, the Prime Minister of Vietnam prepared some statements related to cryptocurrencies. After these plans, the authority was going to prepare a legal framework that would be ready by the middle of 2018. This legal framework was going to support the use of cryptocurrencies in the country.

However, the opposite happened. In April 2018, the Vietnamese authorities declared the use of bitcoins as illegal for the acquisition of goods and services. Although the authorities considered that the use of cryptocurrencies for payments is something illegal, some companies could make use of this asset to make private investments. The ban only specified the use of bitcoins as a local currency.

Days after the ban, a decree announced that credit institutions will not be able to provide services to any type of virtual currency. In the same vein, government representatives clarified that this decision emerged as a measure that would prevent the use of these institutions for money laundering and other illegal acts.

The government of Vietnam has not modified its regulatory policy on cryptocurrencies. At the moment there are no rules that control or audit exchange companies or that use digital currencies as a source, channel of financing, or commercial movement.

As there are no laws or regulations that guide exchange companies, in recent years, people have established a large number of companies that use these assets frequently or as the main source of commerce.

An example of this is evident in the establishment of the Binance and Paxful trading platform, in the commercial market in Vietnam. Besides, Binance has sought to build an entrance channel for the Vietnam Dong, since last January. The use of cryptocurrencies could continue.

By María Rodríguez

Concern about Privacy Increases Due to COVID-19-Tracking Plan in Argentina

Alexander Salazar
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Concern about Privacy Increases Due to COVID-19-Tracking Plan in Argentina

The government will know each user’s data and geographical location at all times. The application CuidAR (Taking Care ARGENTINA) already has 1.5 million users, but the number of expressions of rejection is growing.

Since last May 8th, Argentine citizens have been expressing concern, not only about the coronavirus (COVID-19) but also about privacy. On that date, Alberto Fernández said that those who resume their jobs after the quarantine will have to comply with the requirements established on the CuidAR platform.

The Secretariat of Public Innovation and the Ministry of Science and Technology of the Nation created the application CuidAR. Those people that need to work outside of their homes have to download it on their smartphones. The measure is causing concern in the population about how the government could use the personal data available to them.

The application aims to explore the symptoms that citizens could have, to track patients with coronavirus from their geolocation. According to local media, the government will know each user’s geographic location at all times, as well as his or her health data. It will also be able to share some data through social networks, such as Facebook.

Dangerous Data in Wrong Hands

Although more than 1.5 million Argentines use the application, expressions of rejection have spread through social networks. Many people fear that the application might have sinister implications and give greater power to the State over citizens, thus violating several articles of the Argentine Constitution, according to lawyer Alejandro Fargosi.

Computer expert Javier Smaldone requests that the Argentine Government publish the source code. This is the version of the application that programmers can detail order to understand and verify how it works. The developer also requests that non-essential functions, such as surveillance and monitoring, be removed and not required.

Health Solution but Privacy Problem

As a first step, the self-test through the CuidAR application measures the user’s body temperature. Then, the user must answer a series of questions about other symptoms related to COVID-19, such as loss of the senses of taste and smell, sore throat, and respiratory distress. Finally, the user must report if he or she has diabetes, cancer, or any kidney, cardiological or respiratory diseases.

After that, the application establishes if the individual has symptoms related to COVID-19. If the answer is negative, it issues a certificate so that the user can go to work for 14 days. However, it recommends repeating the test every 48 hours. If the answer is positive, the application provides details of the care measures that the user needs to take, and establishes a 14-day isolation countdown.

Argentina is not the only country to implement COVID-19 contact tracking technology or the only one where there is a privacy concern. China, the USA, Singapore, and several European countries have developed similar applications. Some public health experts consider that these applications can help control virus outbreaks. However, privacy specialists warn of the need to limit and protect the data collected.

The solution would be based on a private blockchain network and would allow the results of the tests to be entered and consulted in real time. Contact tracking is the process of locating and isolating people that may have been exposed to an infectious disease after someone tests positive. Today there are multiple tracking applications, but very few are based on privacy.

By Alexander Salazar

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