Four Influential U.S. Financial Regulators Join FCA’s GFIN

Andres Chavez
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Four Influential U.S. Financial Regulators Join FCA’s GFIN

Having knowledge about the latest innovations in the financial services industry is a must for any country that has intentions of properly regulating all the innovative technologies that are quickly taking the scene. If that knowledge can be shared and discussed by several regulators and watchdogs around the world, the whole field will be improved.

Thankfully, a positive development took place in the last few hours, as the United Kingdom’s Financial Conduct Authority, or FCA, received four new organizations in its international alliance of regulators with the objective of sharing policies, experiences, and bolstering the future of Fintech in general.

The Global Financial Innovation Network

The body promoted by the FCA is called the Global Financial Innovation Network, and it was announced via a joint press release that four prominent United States-based regulators would be joining it, cementing its place as a truly international institution.

The four American financial watchdogs joining the alliance are the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC.)

The four financial regulators are arguably the most influential in the United States’ current landscape. All of them are widely recognized at a global scale and make for welcome additions to the strategic partnership promoted by the UK’s FCA.

Proactive Steps to Enhance Regulatory Clarity

“U.S. financial regulators have taken proactive steps in recent years to enhance regulatory clarity and understanding for all stakeholders and promote early identification of emerging regulatory opportunities, challenges, and risks,” per the joint statement.

The cooperative network was initially formed in August 2018. The participation of the four new American members will bring federal watchdogs into the equation, which will benefit an organization that wants to develop what it calls a “global sandbox” for innovations in the ever-changing industry.

The joint press release that announced the news had the regulators saying that “by promoting knowledge-sharing on innovation in financial services, U.S. members of GFIN will seek to advance financial and market integrity, consumer and investor protection, financial inclusion, competition, and financial stability.”

Representing the Interests of the Nation

The document also said that taking “participation in international organizations such as this helps U.S. financial regulators represent the interests and needs of the nation and its financial services stakeholders.”

Ever since the GFIN was up and running last year, the organization found other institutions with a keen interest in studying cross-border solutions ranging from distributed ledger technology (DLT) to initial coin offerings (ICOs.) Some of the alliance’s members had begun using cross-border payment channels and tools via the DLT.

There are other 46 financial authorities that are currently members of the alliance. Some of the members are regulators whilst others are central banks and international organizations from several nations around the world. The group’s primary intentions are to foster cooperation in various points, fields, and topics, including regulatory approaches towards specific assets, and lessons to be learned.

By Andres Chavez

Paying Taxes with Cryptocurrencies Is Possible in Bermuda Now

Maria Rodríguez
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Paying Taxes with Cryptocurrencies Is Possible in Bermuda Now

The Bermuda government announced that public services may be paid, among other things, with the stablecoin USD Coin.

In recent statements issued by the Bermuda government, it was known that taxes in that country can now be paid with cryptocurrencies. Among the details of the news, it was assured that the stablecoin USD Coin (USDC) can now be used.

This stablecoin is a cryptocurrency which works under Coinbase’s tutelage and was born thanks to that company’s alliance with Circle. It is known that this digital currency is backed by the US dollar and that, currently, little more than 1 billion dollars have been issued in this cryptoactive.

Regarding this new method of payment, government entities assured that it will now be possible to use the USDC as an asset to settle debts with the State, pay government services, and cancel the payment of public fees.

In addition to this news for cryptocurrency users in the country, it was also revealed that the public administration is generating some projects in order to change State policies on decentralized services, protocols, and stablecoins. The idea is to give more space to blockchain technology, and also to cryptocurrencies as a form of payment.

One of these projects includes the incorporation of digital currencies into the volume of operations conducted by the government. This, in order to perform certain government transactions with these assets.

In this way, Jeremy Allaire, who is CEO of Circle, gave his opinion on this matter and congratulated the Prime Minister of Bermuda on the new government policies. “Bermuda is focuses on enabling financial services to be built and delivered using cryptocurrencies and digital assets (…) Congratulations to Prime Minister (of Bermuda), David Burt, who continues to show leadership on these issues and remains well ahead of other governments in the world”, he concluded.

The Bermuda government had already made other movements related to the crypto world. In 2017, the government launched, together with the Bermuda Commercial Development Agency (BDA), the creation of a working group that would seek to know the benefits and mistakes of blockchain technology.

It also promoted a bill to regulate the so-called ICO (Initial Coin Offerings), in addition to creating a regulatory “cashier” for crypto companies that are established in the country.

Although this represents a great advance for the crypto world, governments in some other countries they do not seem to think the same about this initiative. Bermuda was not the first country to accept this payment method for users to pay their taxes. It happened previously in Ohio, the United States of America. However, this measure was recently revoked since accepting this type of payment was against the laws of said state.

As Bermuda has done, other countries of the world are developing public cryptocurrency projects that will be administered by their governments. That is the case of China. In this way, if a particular launch is achieved, it would lead to a regulation which will allow the use of these assets for the payment of taxes and public services.

By María Rodríguez

Extreme Fear Seized the Sentiment of Bitcoin

Willmen Blanco
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Extreme Fear Seized the Sentiment of Bitcoin

Fear gripped the cryptocurrency market after Thursday’s red day. This is confirmed by the Bitcoin sentiment index.

Financial markets are strongly influenced by the expectations of investors, and that of cryptocurrencies is no exception.

To stay on top of the feeling of Bitcoin, Alternative.me has created a simple index that tracks the mood of investors. Thursday, October 24th, was a red day for the cryptocurrency market. According to this index, extreme fear took hold of the market expectation for BTC.

What Made Extreme Fear Seize the Sentiment of Bitcoin

At approximately 12:45 p.m. (GMT time), the Bitcoin price lost almost USD 500 in less than 15 minutes. After the volatile bearish movement, it reached a low of USD 7,293.55 during the day on Thursday, according to Bitstamp.

This fall also caused the breakdown of a strong support located at USD 7,750 that kept a small positive expectation among investors alive.

Just before the strong bearish momentum, BTC was making a slight recovery that led it to touch the psychological level of USD 8,000, and even exceed it a little bit.

The bearish movement came to reduce the price of Bitcoin by more than 8%. At the same time, fear and uncertainty took hold of retail investors.

During Thursday, the Fear and Greed index showed a sentiment of fear marked with the number 33. On Friday, October 25th, the index went on to show the number 20, which falls into the range of extreme fear.

The Fear and Greed index is designed with a simple meter that ranges from 0 to 100, where 0 means extreme fear while 100 means extreme greed.

Meanwhile, Bitcoin managed to receive a resting support that kept it consolidating all day on Friday.

Using Information Provided by Fear and Greed Index

It can be seen that the price of the different assets is strongly influenced by emotions.

Greed takes hold of investors when the market is bullish, which is indicated with green numbers. On the contrary, fear reigns when the red numbers are seen.

This index is of great help to get a general idea of ​​the sentiment of Bitcoin at a specific time.

When greed arises, markets tend to correct themselves, since the price has probably been inflated by unscrupulous investors. When this occurs, the best thing is to remain aloof from it.

Although it may be found hard to believe, when fear is the one that takes hold of the feeling of Bitcoin, a good choice is to buy. This occurs because people tend to sell irrationally on a red day, and thus good prices emerge.

In fact, this should not be taken as the perfect indicator for an effective investment method. On the contrary, this is just a small indicator that may support a more complete strategy.

It is advised that people learn more about this interesting and useful index, which can help make better investing decisions. As stated above, the sentiment of Bitcoin exerts a great influence on the level of investment in the cryptocurrency market.

By Willmen Blanco

Private Keys Safe from Hackers and Natural Disasters Thanks to New Physical Device

Willmen Blanco
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Private Keys Safe from Hackers and Natural Disasters Thanks to New Physical Device

Designers recommend dividing the seed following the Shamir Backup (SLIP39) method. The device allows you registering hexadecimal sequences of up to 123 characters.

On October 21st, the official launch of CryptoSteel Capsule, a solid metal physical device designed to store offline and autonomously private keys, passwords, mnemonic seeds and cryptocurrency wallet recovery data, was announced.

The British company Sword Ltd, which is behind the development of Cryptosteel, announced the launch of its new product through a tweet in which it presents the capsule, which can store important information in a hexadecimal key of up to 123 characters or in a key random sequence (ASCII) of up to 55 characters. The device contains a central column on which the user can manually assemble a sequence of discs on which the characters are recorded.

Among the specifications described on the company’s website, it is indicated that the device allows the user to register backup copies of private keys, simplifying the backup of the seed through the BIP39 process, which generates a series of mnemonic words to represent the wallet recovery phrase, such as 12 non-abbreviated words or 4-letter abbreviations of 24 words.

Likewise, designers recommend dividing the seed following the Shamir Backup SLIP39 method, with abbreviations of 4 letters of 20 word recovery seeds. They even advise using other techniques such as BIP32 root keys, WIF private keys or Monero mnemonic seeds, with 4-letter abbreviations of 25 words.

Other features described on the website emphasize the fact that it is a small and light object that is easy to hide and protect. However, a few hours after its presentation, a comment from Bitcoin developer Jameson Lopp circulated through social networks, in which he wrote about the impact that the device had caused to the authorities.

Jameson Lopp said that he had received a CryptoSteel Capsule at a conference in Germany. He placed the device in his hand luggage for his flight back to the United States, but airport security agents in Germany thought that it was a highly dangerous object, and so he was detained.

On other occasions, Lopp has noted that as a Bitcoin developer it can achieve “the highest level of security and redundancy with cryptographic tools.” Consequently, he has never used physical devices to store passwords or cryptocurrencies. However, this is something difficult for the average user to achieve. Lopp has said that he hopes that in the long term “the recovery of seedless wallets will become a standard” for the average user.

In 2018 the Bitcoin developer compared several cryptocurrency metal wallets, among which was one designed by Cryptosteel. Only two of these wallets were able to pass the different tests to which they were submitted by Lopp, namely Bitkee and Crypto Key Stack.

When it comes to keeping the private keys of cryptocurrency wallets, there are several alternatives. One of them was announced in 2017 with the launch of an accessory that fits in the palm of the hand. Chains with nameplates, bracelets, key chains and even lighters are part of the inventory to be able to carry the digital code everywhere without the need of a mobile device.

By Willmen Blanco

Files Affected by Ransomware Can Be Decrypted with New Tool

Willmen Blanco
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Files Affected by Ransomware Can Be Decrypted with New Tool

It has been reported that the ransomware STOP represents 56% of the attacks registered so far. The number of victims of this malware ranges between 116,000 confirmed cases and 460,000 unconfirmed cases.

Ransomware attacks are on the rise, which has cost victims hundreds of thousands of dollars every month. However, a new tool, aimed at unlocking encrypted data, could mean the end to a particularly virulent malware, known as STOP, which represents 56% of recorded attacks.

The ransomware acts by encrypting the local files found on specific computers, only unlocking them if the victim pays a fee, which is often in cryptocurrencies such as Bitcoin. In recent months, these attacks have experienced a resurgence, especially in municipal bodies, local businesses and schools, among other objectives.

In this case, STOP spreads through links that promise that users can download paid software for free. This type of malware is aimed primarily at older users and children. In this regard, the cybersecurity company Emsisoft explains that STOP hides clues in the encrypted files, which can be decrypted to reveal the key.

The company found a way to restore the hijacked files, without paying the ransom, through a new tool. It performs a review that allows the recovery of the clues, which can be used to discover the code for decryption. Emsisoft spokesman Brett Callow said that this solution can frustrate up to 70% of attacks.

Callow said that there is “great acceptance” of the tool among users. He adds that the number of victims, ranging between 116,000 confirmed cases and 460,000 unconfirmed cases, forced Emsisoft to outsource customer service for the tool to BleepingComputer, an online cybersecurity community. He said that this was the only way to handle this great flood of inquiries.

BleepingComputer is comprised of hundreds of volunteers, who are responsible for helping malware victims. Lawrence Abrams, community spokesman, explained that, despite how much volunteers have tried to help, in many cases there is nothing that can be done. With the launch of the STOP decryption service, developed by Emsisoft, these volunteers will finally be able to help many desperate victims to recover their files.

There is no doubt that prevention is a better option than waiting for a cure. Callow states that ransomware attacks can be avoided by uploading files to cloud-based services that support “versioning,” which simply means that the cloud service maintains multiple copies of each file. In other words, if the most recent version is encrypted, the option of using an earlier version is available.

Eventually, it is usual for attackers to become more skilled, by becoming familiar with the latest decryption tool, which tends to improve their arsenal. Callow said that that happens all the time, since they manage to solve the encryption while the developers change the nature of things or start again. Its objective is simply to allow victims to recover their data, without having to pay the ransom. At the moment, this new tool will be in charge of doing exactly the job.

By Willmen Blanco

Higher Growth of Open Interest in Bitcoin Futures in CME

Willmen Blanco
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Higher Growth of Open Interest in Bitcoin Futures in CME

The value of traded positions went from approximately 500 BTC to more than 1,000 BTC in October. Bitcoin futures show a growing interest among institutional investors.

The open interest in Bitcoin futures in CME grows again after a fall at the beginning of October. During the first weeks of the month, investments in these types of contracts in the Chicago Mercantile Exchange (CME) market have increased steadily. This is revealed by data from the analysis firm Skew, published on October 20th.

In a graph published by Skew through Twitter, the rise in the value of Bitcoin futures contracts of institutional accounts, which represent long positions, can be seen. The figures related to open interest exceed the equivalent of 1,000 BTC, after the amount was around 500 BTC at the beginning of the month.

The term “open interest” refers to the total number of options or future contracts that have not been closed at any given time. It is also the number of purchase orders that remain open in the stock market before a session starts.

The Skew chart shows that at the beginning of October the open interest in CME fell below 500 BTC. However, during August, trades had progressively increased. At the end of September, open interest figures remained above 1,000 BTC, as can be seen in the same publication.

In the tweet, the firm adds that the term “institutional accounts” refers to pension funds, insurance companies and equity funds, among other accounts whose majority investment is of institutional origin.

Growing Interest in Institutional Investment in Bitcoin

It can be seen that institutional interest in Bitcoin products shows signs of having grown. In fact, the October figures for CME seem to correspond with the intention of the institutional sector to invest in Bitcoin and other cryptocurrencies.

This scenario was reflected in the results of a survey published at the beginning of May this year. According to the consultation, which was sponsored by Fidelity Investments, about 50% of institutional investors consider cryptocurrencies to be a good investment opportunity.

From those who were consulted at that time, more than 20% already had investments in various cryptocurrencies. On the other hand, 72% of the persons interviewed expressed their preference to invest in products derived from cryptocurrencies.

New Boost to Bitcoin Futures Contracts

This growth in CME futures contracts has also been observed in another of the Bitcoin futures providers, namely the most recent case of the launch of BTC futures contracts in Bakkt.

After experiencing a slow start in relation to the expectations generated by the market, reports from the financial products firm and independent organizations registered an increase in the interest in Bakkt’s Bitcoin futures contracts.

With regard to CME, record figures of open interest positions for its Bitcoin futures were recorded last July. In addition, nearly 1,000 new accounts had already been opened on the platform. This figure represented at that time an increase close to 30% with respect to the total number of accounts existing in the CME platform.

By Willmen Blanco

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