SEC Charges 1Broker with Securities Law Violation and Closes Down Its Website

In most recent news, the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have announced in a press release that they are suing 1pool Ltd., a Marshall Islands-based securities retailer for allegedly breaking federal law through a bitcoin-based security swap scheme.

The SEC has filed charges against the CEO Patrick Brunner of 1pool Ltd., commonly known as 1Broker as well, citing that the securities company was not registered a “security-based swaps dealer” and “failed to transact its security-based swaps on a registered national exchange.” Moreover, the charges filed against them are for selling security-based swaps to American as well as international investors without following proper “discretionary investment thresholds.” Apparently, investors were able to buy these swaps only with BTC. In addition to that, the CFTC charges filed against 1Broker are under similar reasons as breaking federal laws by failing to enforce anti-money laundering and supervisory features.

In a statement released to the public, SEC explained how they have managed to uncover such deeds:

“The SEC alleges that a Special Agent with the Federal Bureau of Investigation, acting in an undercover capacity, successfully purchased several security-based swaps on 1Broker’s platform from the U.S. despite not meeting the discretionary investment thresholds required by the federal securities laws.”

The director of the SEC’s office in Fort Worth, Shamoil Shipchandler has expressed in a statement that SEC’s duty is to protect US traders across various platforms, regardless of the type of currency used in their transactions, adding as well that international companies that trade with U.S. investors cannot bypass nor avoid compliance with the federal securities laws by using cryptocurrency. Shamoil hopes for a permanent injunction against 1Broker and its CEO as well as penalties and “disgorgement plus interest.”

Subsequently, the FBI revealed it had seized the domain, citing that the company had broken federal laws such as money laundering and wire fraud laws, along with operating as an unregistered broker of securities and as an unregistered futures commission dealer.

As of yet, 1Broker hasn’t released any comments regarding the case.

Bitcoin Mining Giant Bitman Has Filed for IPO on the Hong Kong Stock Exchange

Bitmain, the Beijing-based cryptocurrency mining behemoth, has officially filed to go public on the Hong Kong Stock Exchange (HKEX). Published on Wednesday, Bitmain’s long-awaited IPO announcement follows various news reports that the mining giant has been mulling a Hong Kong listing for a multi-billion dollar public fundraising. The IPO has now placed Bitmain in direct competition with Hong-Kong based Canaan Inc., which also filed for a $1 billion USD IPO in Hong Kong as well as with Ebang International Holdings.

As the process of transitioning from a private to a public company is already underway and currently pending further listing hearings from the HKEX, Bitmain has released their financial books for the first time, giving investors the possibility to assess the company’s financial status. The files disclose that Bitmain saw a profit of $742 million USD come in for the first two quarters of 2018. Seemingly, most of the revenue has come in from the sales of cryptocurrency mining hardware.

The mining company has expressed their objectives regarding the funds raised in the IPO, stating that the money will be eventually put into researching and development in order to increase its production output. As it seems, it is not clear yet which financial target Bitmain hopes to hit once the IPO is finalized. According to sources, the company is allegedly seeking to raise as much as $3 billion USD to $18 billion USD.

Additionally, the IPO could potentially provide Bitmain with opportunities that will allow the company to branch out into various industries. Nothing is yet clear however, as with the IPO finalizing anything could happen.

Nevertheless, CEO and co-founder of Bitmain Jihan Wu has alluded in an interview with Bloomberg to a possible branching out, citing that the next phase of the company would involve “advancing our technology beyond what we’ve already achieved”. Wu has offered that this might include artificial intelligence (AI), which is a typically non-cryptocurrency related industry. This certainly doesn’t necessarily confirm his plans, it merely just suggests the possibility of trying new things.


Google Backtracks on Its Decision on Banning Cryptocurrency-Related Ads

Google will henceforth allow regulated cryptocurrency related companies to use its platform for advertising their products online. Previously, the $828 billion search engine giant, banned crypto related ads, the Google CEO Scott Spencer citing that the industry of cryptocurrency may potentially harm financial markets as the platform had seen enough consumer harm or at least potential for consumer harm, “that it’s an area that we want to approach with extreme caution.”

Therefore the reverse ban on crypto-related ads by Google shows willingness on their behalf to work with legitimate and accredited companies and project within the cryptocurrency industry.

Back in June, according to news reported by CCN, financial experts along with Philip Nunn, CEO of Manchester-based investment firm Blackmore Group, have extensively criticized Google’s move to ban the cryptocurrency industry in its entirety.

Nunn explained in his statement how despite Google’s and Facebook’s interest in the cryptocurrency market and blockchain technology, they still decided to ban the entire market on their platforms. He also pointed out their hypocrisy or unfairness as both Google and Facebook allowed the advertising gambling websites and other unethical practices.

Albeit, at that time both Google and Facebook aimed to ban out ponzi schemes and crypto-associated scams, well-established and accredited companies such as Coinbase and Binance were also prohibited from acquiring ads on the platform. At that time, multi-billion dollar fintech corporation Revolut Head of Mobile Ed Cooper joined in the criticism and voiced out his concerns over the implications of a blanket ban, which unfairly punished legitimate companies within the industry and preventing them to build up their own platforms in order to reach to a larger audience.

In addition to that, Vitalik Buterin, co-creator of Ethereum (ETH) has previously explained and pointed out how crucial is the development of a strong and robust infrastructure for the emerging industry. Despite cryptocurrencies and blockchain technology having reached a tremendous degree of recognition with the mainstream audience, it still remains insufficient as most companies need to build up their digital assets into a major asset class. A blanket ban on the crypto industry prevented legitimate and accredited companies from expanding their reach and consumer base.

Now, starting from October, only verified crypto-associated companies within the US and Japan will be able to purchase ads on Google. Nonetheless, companies will be allowed to file applications with Google to run ads in other countries as well, which eventually is expected to grow into an international reverse ban on crypto ads. Consequently, the reverse ban of Google will allow institutions as well as individual investors to build confidence and presence within the crypto market.

For security reasons, Google will manually approve ads from blockchain projects and cryptocurrency-related businesses, which is considered to be a positive change, as it will filter out illegitimate services and scams that could impact both Google and the cryptocurrency industry negatively.

Thailand’s Largest Bank is Testing Visa’s Payment Platform Built On Stellar Ledger

In most recent news, Kasikornbank (Kbank) Thailand’s largest bank by market capitalization has tested the new Visa program, a cross-border B2B blockchain platform built on Chain, a blockchain company which has been recently acquired by Stellar. The new Visa platform has been devised in order to provide financial and economic institutions a safe and fast way to process corporate cross-border B2B payments.

The program ‘’Visa B2B Connect’’ was launched only last year and is currently getting ready for a commercial launch this year. Additionally, Visa has been recently working with several banking partners such as Commerce Bank in the US, Shinhan Bank in South Korea, Union Bank of Philippines and United Overseas Bank in Singapore.

Following this new venture, Visa aims to facilitate the processing of bank-to-bank transactions on the blockchain and to establish a more efficient, secure and faster business-to-business payment transactions to be made across borders. Apparently, Visa has already had the concept for this program outlined since October 2016. In an extended statement made by Visa, one can easily decipher the intention and purpose of this program:

“Building on this technology, Visa is developing a new near real-time transaction system designed for the exchange of high-value international payments between participating banks on behalf of their corporate clients. Managed by Visa end-to-end, Visa B2B Connect will facilitate a consistent process to manage settlement through Visa’s standard practices.

With Visa B2B Connect, Visa aims to significantly improve the way international B2B payments are made today by offering clear costs, improved delivery time and visibility into the transaction process – ultimately reducing the investment and resources required by banks and their corporate clients to send and receive business payments.”

What does this mean though? With Visa B2B Connect, predictability and transparency is being built and established, which determines that banks and their corporate clients receive near real-time notifications and finality of payment. More security is promised as signed and cryptographically linked transactions are devised to ensure an immutable system of record. Last, but not least, all parties within the network are known participants on an authorized private blockchain platform that is being operated by Visa, thus a sense of trust is built between all parties.

Kasikornbank (Kbank) is the first financial institution to take part in this program.

In addition to that, according to a news report, Suripong Tantiyanon, manager of Visa Thailand has also commented on the concept of the new program in a statement:

“Building on the enterprise blockchain technology, Visa B2B Connect is a new transaction platform designed for the exchange of high-value international payments between participating banks on behalf of their corporate clients. Managed by Visa end-to-end, Visa B2B Connect combines Visa’s core capabilities in security, governance and distributed ledger technology.’’

As it has been mentioned earlier, the Visa B2B Connect blockchain platform is built on Chain. The US based fintech startup, was founded in 2014 and has several major partners with which they work routinely such as Visa, Capital One, Citigroup, Fiserv, Nasdaq and Orange. However, Chain was recently acquired by Lightyear, the commercial development branch of Stellar, and rebranded as InterStellar.

CEO of Interstellar and co-founder of Chain, Adam Ludwin, has stated that most of their clients have shifted from using a traditional database model to using a tokens model, whilst distributing assets on a local setting. Additionally, he claimed that “by partnering with Stellar you can fire an asset to another institution.”

Dubai Department of Finance Started Implementing Blockchain-Based System For Government Structures

As reported by local news site Zawya, on September 23rd, the Dubai Department of Finance (DoF) has joined with Smart Dubai Office (SDO) in order to launch a blockchain based system.

The new platform has been officially launched on Sunday, entitled “Payment Reconciliation and Settlement”, which will allegedly be used by governmental institutions such as the Dubai Police, Roads and Transport Authority (RTA), Dubai Health Authority (DHA), and many others.

According to the news outlet, the current implemented payment system for the government of Dubai is tedious and slow, taking up to 45 days to complete any transaction.

The main purpose of this new platform has been designed by the DoF and the SDO as a way to provide more accuracy and transparency for governmental transactions, as well as allowing real-time payments within and among governmental institutions.

Apparently, the new blockchain based system is already being used by several governmental institutions, after having completed a testing phase, the number of transactions amounting to more than 5 million. The Dubai Electricity and Water Authority (DEWA) and the Knowledge and Human Development Authority (KHDA) are some of the governmental institutions that are already operating the new system.

General Director at SDO, Dr. Aisha Bin Bishr has cited that the new blockchain based payment system is “one of the most promising of [emerging] technologies.” Back in 2017, the Smart Dubai Office had been awarded top honours at the Smart Cities Expo and World Congress in Barcelona, having received the City Project Award from amongst 308 other teams for their Dubai blockchain Strategy. The Smart City Project had been introduced to the public back in 2013 by Vice President and Prime Minister of the UAE and Ruler of the Dubai Emirate Sheikh Mohammed bin Rashid. With the support from government and its adjacent private and institutional partners, the central concept of the project was to supply a smart ecosystem for collaboration between governmental institutions, its residents and visitors.

However, Smart Dubai is not the only government supported initiative that aims to employ major emerging technologies such as blockchain in the country.

The UAE Vice President and Prime Minister launched the “UAE Blockchain Strategy 2021” initiative this last April, with the intent to achieve the position of a global leader in assimilating the blockchain technology.

In July, the Dubai International Financial Centre (DIFC) revealed its partnership with Smart Dubai to create and build a “Court of the Blockchain.” Both establishments aim to delve into the potential of blockchain technology in addressing the flaws of the UAE’s legal system, for instance by introducing blockchain-based verification of court judgements.