Europe’s first dedicated blockchain research facility and the world’s first advanced blockchain identity laboratory has been launched in the Scottish capital of Edinburgh.
Known as the Blockpass Identity Lab, the pioneering blockchain research facility will focus on exploring ways in which blockchain technology can be applied in protecting personal data online according to The Scotsman. Built at the Merchiston Campus of the Edinburgh Napier University, the laboratory is part of a £600,000 collaboration between the Hong Kong-based blockchain-based identity application firm, Blockpass IDN, and the Scottish university.
Under a three-year partnership, funding will be provided to support research staff, 5 PhD students and a virtualized blockchain environment. The facility will place emphasis on the key challenges revolving around identity as it seeks to build new data infrastructures that respect the privacy, rights and consent of netizens.
“This exciting work to explore how blockchain technology can protect personal data from online scammers and hackers carries on the tradition of innovation and excellence exemplified by John Napier [the Scottish mathematician that the Edinburgh Napier University is named after],” said Kate Forbes, the Scottish Minister for the Digital Economy.
Conferences and Hackathons
To mark the launch of the blockchain research facility there will be various activities held and this includes a conference on advanced cryptography, blockchain and digital identity. Additionally, there will be a hackathon where participants will be required to develop prototype applications that focus on blockchain, digital identity or other decentralized and distributed ledger technologies.
Plans for the research facility were initially announced in April this year. At the time the chief marketing officer of Blockpass, Hans Lombardo, cited various online data breach scandals which had served to make clear the risks that come with storage of sensitive personal data in a centralized location.
No Single Point of Failure
“We continue to see identity management at the forefront of blockchain and cryptography discussions as the price of consumer data abuses becomes clearer and more pertinent,” said Lombardo in a statement. “The creation of this lab in conjunction with Edinburgh Napier University will provide a space where further research and innovation can lead that discussion to newer and more advanced grounds.”
While much of the attention on data breaches has been focused on the United States and firms based there such as Equifax and Yahoo, Europe, where Blockpass Identity Lab will be based, is not alien to the problem as about 17% of the population is estimated to have fallen victim to identity theft, one way or the other. Last year, for instance, it was estimated that the cost of credit card fraud on the continent exceeded £1 billion leading to cancellations of the cards by more than 5 million people.
A couple in the city of Sydney Australia has allegedly converted a fraud proceed of $300,000 to cryptocurrencies.
According to the police who arrested the couple and seized computers, laptops, storage devices, mobile phones, and documents, more than $300,000 were converted to cryptocurrency and sent to several offshore crypto wallets.
As usual, the anonymity of cryptocurrency transactions was to blame for the unfortunate incident. A police detective Arthur Katsogiannis said:
“The semi-anonymous and decentralised nature of many cryptocurrencies make it desirable for criminal activity, particularly for those groups who are operating offshore,”
Prior to the arrest, an arm of the police Strike Force Breabank had carried out investigations on online purchases in which questionable credit card numbers were used and found that 45 companies had been created as part of the fraud and also bank accounts in which the cash was deposited.
Meanwhile there was another alleged fraud earlier this month in which the police Cybercrime Squad said $3 million was stolen through business email compromise.
Information from the countries anti-money laundering laws suggest that its citizens are more attracted to cryptocurrencies because of certain characteristics of the transactions which make it easier to transfer funds for any cause.
In order to effectively fight financial crime in the country, its prime financial regulatory body AUSTRAC was empowered in 2017 by a new government legislation that enables it to better gather intelligence and effectively fight financial crimes.
According to the CEO of AUSTRAC Nicole Rose at the time of the legislation,
“AUSTRAC now has increased opportunities to facilitate the sharing of financial intelligence and information relating to the use of digital currencies, such as bitcoin and other cryptocurrencies, with its industry and government partners.”
She further added:
“The information that these businesses will collect and report to AUSTRAC will have immediate benefit in the fight against serious crime and terrorism financing.”
It appears the move for regulation of cryptocurrency may become reasonable with the increasing wave of financial crimes involving cryptocurrencies which range from hacks to frauds like this couple’s case.
But will regulation really take care of the crimes associated with cryptocurrencies? Some people have argued that fiat currencies are regulated but are still used to finance all kinds of things and cryptocurrency regulation may not make any difference other than removing a key feature from the system – decentralization.
Despite the Chinese government’s frequent warnings and unprecedented actions to block their citizen’s access to cryptocurrency, the country’s middle class is becoming increasingly interested in cryptocurrencies as an investment vehicle.
Although the middle class is expressing more interest in digital currency investments, the government’s anti-crypto actions have been effective, making it significantly harder to access digital investments than in other, freer, countries.
A recent report, titled The New Middle Class, analyzes the investments and spending habits of the Chinese middle class, and for the first time ever, added Bitcoin and other cryptocurrencies as investment options, reports Tech Node.
The report concludes that 10% of China’s middle class has invested in cryptocurrency, coinciding with the growing popularity of cryptocurrency in China despite the government’s ban. Although there is interest in cryptocurrency among the middle class, it is currently the least popular investment when compared to private equity, cash savings, and precious metals, and funds.
The paper, which was published by famed financial writer Wu Xiaobo, notes that the middle class in China is incredibly risk adverse and are mainly concerned with stable financial growth. When taking into consideration the volatility of crypto and the risks of obtaining and trading the digital assets with the government’s ban, 10% suddenly seems like an incredibly high rate of middle class crypto ownership.
China’s Government Clamping Down Amidst Growing Illicit Cryptocurrency Ownership
The Chinese government has been struggling to fully reduce the amount of cryptocurrency ownership within the country.
The People’s Bank of China (PBoC) recently released a warning to citizens that outlined the dangers posed by cryptocurrencies, and specifically Initial Coin Offerings (ICOs). The latest warning came just over a year after the authorities banned ICOs.
The PBoC notes to investors that in addition to being risky, ICOs are also “suspected of illegally selling tokens, illegally issuing securities, illegal criminal activities, financial fraud, pyramid schemes and other illegal and criminal activities.”
Although the ICO and cryptocurrency ban have been successful, reducing global Yuan trading volume from 90% to less than 5%, citizens are still buying and selling cryptocurrencies by using multiple methods to access them.
Virtual Private Networks (VPNs) are one method that some Chinese citizens are using to access offshore exchanges, which allows them to access foreign domains without being blocked by the government’s internet safe-guards that restrict the free flow of information and sites.
Another way in which investors are circumventing the ban is by conducting peer-to-peer transactions, where a buyer and a seller utilize cold-storage solutions to exchange fiat currency for digital currency, which, although effective, can make it hard for investors to rapidly sell their holdings.
Some cryptocurrency exchanges are also catering to “underground” Chinese cryptocurrency investors, utilizing frequently changing domain names in order to bypass the government’s efforts to block the domains of well-known exchanges.
Chinese companies are also working with the PBoC to eliminate illicit trading activities, with social media platforms like WeChat and Tencent, banning cryptocurrency news publications and banning users trying to sell cryptocurrencies.
SEBA Crypto AG, a startup based in Switzerland, has raised 100 million Swiss Francs (around $103 million) to launch a bank which offers services related to cryptocurrencies.
Facilitating Institutional Investors
Headed by former UBS bankers Guido Buehler and Andreas Amschwand, the Swiss startup, SEBA Crypto AG, has successfully raised $103 million to establish a bank which offers cryptocurrency-related services.
As Reuters reports, the group will be seeking a banking and securities dealer license by FINMA in order to be able to manage cryptocurrency trading as well as investments on behalf of banks and qualified investors.
Speaking on the manner, Buehler, who is the acting CEO of the company, said:
SEBA wants to bridge the gap between traditional banking and the new world of crypto. […] With safety, transparency and performance as core values, our ambition is to become a market leader in the convergence of traditional finance with the crypto economy.
Reportedly, investors include the Hong Kong-based Summer Capital, Swiss-based BlackRiver Asset management, and others from Malaysia, China, Singapore, Switzerland, and Hong Kong.
Earlier in February, FINMA issued ICO regulations which provide certain legislative clarity on the matter without being too loose or invasive.
Shortly after, one of the largest cryptocurrency exchanges in the world by means of traded volumes, Bitfinex, revealed that it considers Switzerland to be its new home.
In July, the owner and operator of the country’s stock exchange, SIX Group, announced that it will be launching a DLT-based infrastructure, further facilitating the access to cryptocurrencies, in general.
What do you think of the move by SEBA Crypto AG? Let us know in the comments below!
Italy is about to enter the European Blockchain Partnership, according to the country’s Member of Parliament (MP) Mirella Liuzzi, as cited by Cointelegraph Italy Thursday, September 27.
According to Liuzzi, the partnership — a collaboration of 26 EU countries — will be signed by the Minister of Economic Development, Labour and Social Policies Luigi Di Maio on September 28 in Brussels. In an interview with Key4biz, Liuzzi added:
“Joining the partnership will allow Italy […] to define its own line in the development of [blockchain] technology — a practice which the previous government had never implemented”.
Luizzi, the MP from the governing Five Star Movement, also mentioned that the government will soon hire experts in blockchain to develop a national strategy for the crypto-related sector.
The European Blockchain Partnership was created back in April 2018 to serve as vehicle of cooperation amongst EU member states. First joined by 22 countries, the organization then extended to include 26 as Greece, Romania, Denmark and Cyprus joined the group.
As Cointelegraph reported in June, the Southern city of Naples had launched a focus group supported by the local mayor to promote blockchain and and a possible municipal Initial Coin Offering (ICO). Later, the Southern region, continuously attempting to expand its autonomy, announced that it was willing to launch its own cryptocurrency.
Italy is reportedly trying to apply crypto-related technologies on a broader scale. For instance, Juventus – one of the most famous soccer clubs in the country — is planning to launch its own “fan token” in partnership with blockchain-based fan engagement platform Socios.com.
The National Stock Exchange of India (NSE) is testing a blockchain platform developed by Elemential Labs to conduct e-voting for listed companies, local news outlet Hindu BusinessLine reports September 27.
The NSE’s pilot will entail tokenizing voting rights and using the blockchain platform to connect the firm, registrar and transfer agents (RTA), and the regulator. Hindu BusinessLine notes that tokenized votes are both easy to transfer and to proxy, and the test will reportedly be used to evaluate how easy it is to audit the entirety of the voting procedure using blockchain.
Sankarson Banerjee, CTO of projects at NSE, is quoted as saying that the blockchain system offers features that can bring the exchange “closer to an environment of improved corporate governance and compliance,” outlining that:
“The immutable nature of blockchain will ensure that every action taken by a network participant is transparent to the regulator. Additionally, the smart contract framework enables synchronisation of the vote count process between the company and the regulator in real time.”
Elemential Labs’ platform uses the Hyperledger framework, and NSE will reportedly take charge of developing and managing the front-end application of the system.
Elemential CEO Raunaq Vaisoha echoed Banerjee in advocating for blockchain’s power to ensure regulatory compliance in real time and to offer “highly transparent and clear corporate governance,” which he considered to be “an operating standard that most companies aspire to.”
As reported earlier this month, the Union Cabinet of India — the country’s chief decision-making body led by prime minister Narendra Modi — has approved a Memorandum of Understanding (MoU) with BRICS members on collaborative research into blockchain and other distributed ledger technologies (DLT).
This summer, the Indian state of Telangana announced it would be signing several MoUs with blockchain firms as to eventually implement the technology across government services.
As blockchain makes inroads with the country’s government, India’s Supreme Court is currently in the midst of reviewing the Reserve Bank of India (RBI)’s controversial ban on banks’ dealings with crypto-related entities. Just this week, the court listened to the final round of petitions on the ban, which has officially been in force since July 6.
Competition among the so-called “third generation” projects is fast brewing in the South Korean blockchain and cryptocurrency market, as companies scramble to find the industry’s “killer app” and spur widespread adoption.
Korea’s Blockchain Push
As reported by Business Korea on Sept. 27, the third generation platforms look to build what Ethereum couldn’t, and primarily tackle the problem of scalability and network congestion. The latter, in turn, is termed the “second generation” blockchain by popular media as it attempted to overcome many of bitcoin’s inherent problems after its launch in 2015.
Ethereum allows developers to build smart contracts to ensure applications free of censorship, fraud, third-party interference. Its native currency, ether, supersedes bitcoin transaction times and charges lesser fees – making the platform token more lucrative to some than the pioneer cryptocurrency.
However, high commision fees and slow data processing plagued the Ethereum network in December 2017 after the protocol’s fabled benefits failed to match up the traffic demands of CryptoKitties, a digital cat collectible game based on the protocol.
Third generation blockchain looks to usurp the world’s second largest cryptocurrency network with faster data processing, transaction times, and cheaper transaction fees.
With regards to the above, a hoard of companies–all at different stages of development–have come out of South Korea and look to dominate the global cryptocurrency market.
Local Coins Lead Movement
For example, ICON (ICX) is a third generation crypto protocol ranked 37th by market cap. The project aims to build sustainable, self-governing communities powered by their respective blockchains and running side-chains to interact with the rules of consensus of other blockchain networks.
So far, no European or American blockchain project has reached the market dominance or adoption that ICON has, giving the Korean project ample first mover advantage to create a long-lasting impact in the crypto-ecosystem.
Another sidechain platform is Orbs, which is garnering attention among Korean investors despite its Japanese roots. The protocol works similar to ICON, but looks to succeed Ethereum instead of being a mere replacement.
Last month, Orbs executives sparked rumors of a potential partnership with stablecoin project Terra, which raised $32 million in August 2018 in a funding round led by Binance, Huobi, Monex, and others.
The project already has an established partnership with Ground X–the blockchain research arm of Kakao Labs–and has privately participated in Puma Pay, a crypto-billing solution that raised $117 million via an ICO in 2018.
Together, the trio looks to tap into TMON–Terra’s parent company and Korean e-commerce giant–and its 40 million-strong monthly user base. The move can help cement the position of all involved parties as one of the blockchain sector’s most noteworthy projects.
Companies and Government Prepare for Integration
Away from the cryptocurrency startup sphere, Korean multinationals are unveiling their native tokens and launching subsidiary blockchain companies. Internet giant Line recently announced the Link tokens, which will undermine its ambitious, reward-based, yet-to-be-released e-commerce and gaming platform.
Kakao, valued at over $7 billion, is developing CLAY tokens for use in the Clayton platform scheduled for an October 2018 launch. Smaller startups are following suit.
The Korean government is steadily warming up to the advent of cryptocurrencies. While special economic district Jeju Island is preparing to welcome blockchain projects and rival Singapore in this regard, the Seoul government is working on introducing robust ICO regulations, reducing taxes for blockchain corporations, and supporting local job creation.
The President’s Trust, a state-backed charity organization in Malta, has signed an agreement to partner with the Blockchain Charity Foundation (BCF), a move which has received praise from Maltese president Marie-Louise Coleiro Preca.
Charity on the blockchain
As reported by local media outlet The Malta Independent on 25 September, Preca was speaking at a United Nations General Assembly (UNGA) event organized by the BCF, Women Political Leaders Global Forum and Finance Center for South-South Cooperation.
The President’s Trust is an organization that Preca founded and is a board member of. As written on the official website, the charity was set up to provide support for “vulnerable young people experiencing inequalities”.
Preca, who is also a chairperson of the BCF’s Senior Advisory Board, said, “In my role as chairperson of the Senior Advisory Board, of the Blockchain Charity Foundation, I believe that we will have the ability to utilize such innovations to improve the socio-economic conditions experienced by too many individuals and families who are living in precarity or vulnerability.”
President Preca praised other ongoing efforts by the BCF to utilize blockchain technologies in order to meet the goals of the United Nations 2030 Agenda and Sustainable Development Goals (SDGs). She believes that blockchain can be transformative for the creation and regulation of charitable organizations in the future.
Reflecting on the growing potential of blockchain technology for businesses and other organizations, the president drew comparisons between the tech and trust saying that they were “at the core of our socio-economic interactions, thereby boosting transparency and emphasizing the importance of an economy and a society which is built upon trust”.
Preca is confident that such transformations will provide a positive impact for most people, saying, “This is what real justice and effective social solidarity is all about.”
The president described the “ongoing” national development of blockchain legislation, the efforts of the Malta Digital Innovation Authority Act, as well as “the Virtual Financial Assets Act, and the Technology Arrangements and Services Act”, which are all proving to be transformative forces on the island, encouraging those present at the side-event to explore Malta as a leader in blockchain regulation and what it this offers to businesses.
Malaysia’s top three industries are being propelled into blockchain adoption in an effort to promote economic growth alongside transparency, efficiency, and sustainability with the help of a government task force.
In the energy sector, the government task force has held discussions with local companies to investigate how blockchain can assist in the growth of renewable energy users. Blockchain was decided to be of use in this area by providing transparency over how the energy was generated, be it from sustainable sources or not, meaning that customers can choose to purchase only green energy if they wish to do so.
Palm oil has become a contentious commodity due to a lack of ethical labor practices in its production, including reports of child labor coming from several countries. With blockchain, MIGHT wants to give buyers the ability to see that the palm oil they are purchasing from Malaysia comes from a government-approved ethical production line, while also setting up the government infrastructure necessary to monitor production in the country. Australia has also used a similar blockchain strategy to monitor the origin of sugarcane entering the country.
On Tuesday (25 September 2018), CNBC reported that Google, from October, will end its outright ban on all crypto-related advertising, and allow regulated crypto exchanges to buy ads on its platform in the U.S. and Japan.
On 14 March 2018, Google announced that it had updated its financial services related ads policy to disallow all crypto-related advertising; this included ads related to initial coin offerings (ICOs), crypto wallets, crypto trading advice, and even crypto programming courses. Crypto companies of any kind would not be allowed to advertise via any of Google’s ads products. This ban would go into effect in June 2018.
Back then, Google’s Director of Sustainable Ads, Scott Spencer, told CNBC:
“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution.”
What Google seemed to be doing was following in the footsteps of Facebook, which had announced its own ban on all crypto-related advertising on 30 January 2018. Ads that violated Facebook’s ads policy would be banned not only on the Facebook app, but also “in other places where Facebook sells ads, including Instagram and its ad network, Audience Network, which places ads on third-party apps.”
Google announced today’s change in policy via the Advertising Policies support section of its website in a Change Log post titled “Update to Financial products and services policy (October 2018)”:
“The Google Ads policy on Financial products and services will be updated in October 2018 to allow regulated cryptocurrency exchanges to advertise in the United States and Japan. Advertisers will need to be certified with Google for the specific country in which their ads will serve. Advertisers will be able to apply for certification once the policy launches in October. This policy will apply globally to all accounts that advertise these financial products. For more details, see About restricted financial products certification. The Financial products and services page will be updated once the policy goes into effect.”
This new policy is applicable to advertisers located anywhere, but the ads can only be run in the U.S. and Japan.
Google seems to be once again copying Facebook when it comes to crypto-related advertising. On 26 June 2018, Facebook announced that it was going to relax the ban it had introduced in January, saying that from this date, it would be allowing “ads that promote cryptocurrency and related content from pre-approved advertisers” (while continuing to “prohibit ads that promote binary options and initial coin offerings”).