Germany: Proposed Bill Set to Introduce Cryptocurrencies at Local Banks

Cryptocurrencies might get the same treatment as fiat money in Germany. A newly introduced bill hints at authorities looking to allow German banks to sell cryptocurrencies and provide custody solutions.

According to local news agency Handelsblatt the new bill was proposed for voting in the Bundestag, the German parliament and has seen positive reception. Now, it requires consensus across the country’s 16 federal states to be successfully implemented.

As it stands, banks and financial institutions are restricted from allowing transactions related to cryptocurrencies for clients. The proposed legislation, if approved, will make a monumental difference for cryptocurrency availability in the country.

If the states agree upon the legislation, German citizens will be able to buy and hold Bitcoin, Ethereum, along other cryptocurrencies directly with their banks. The whole spectrum of banking services might be available for cryptocurrencies as well.

Banks have been eager to get into the cryptocurrency industry as the interest for digital currencies seems to be mounting both from consumers as well as governments and corporations. The bill is set to be implemented in 2020, as Handelsblatt outlines:

“​​Starting in 2020, financial institutions will be able to offer their customers online banking, virtually at the touch of a button, along with classic securities such as stocks and bonds, as well as cryptocurrencies.”

The new legislation has seen wide support and enthusiasm from the domestic industry. The Association of German Banks — a major lobbying group representing over 200 financial institutions — is a huge advocate of the bill, arguing that established financial institutions have the experience and risk mechanisms in place to safeguard client assets.

In October, the Association released a paper arguing that the European economy may benefit from a programmable digital euro.

At the same time, there have been mixed signals towards cryptocurrencies from various governments. The Bundestag has recently shared an opinion that cryptocurrencies such as Bitcoin are not real money, citing their volatility and allegedly limited use for payments. Concurrently, nation states have been quick to dampen the development of Facebook’s stablecoin, fearing a potential disruption of the existing monetary system.

The European Central Bank has also been stringent on digital currencies, stating that global stablecoin payments raise potential risks across a broad range of policy domains, which is the primary objective of a central bank.

Poloniex Announces Acquisition of TRXMarket, a Tron-Based DEX

Cryptocurrency exchange Poloniex has just announced its acquisition of TRON-based decentralized exchange (DEX) TRXMarket. Several reports indicated that this acquisition was partly funded by TRON’s founder Justin Sun in addition to some others, who had previously invested in Poloniex Exchange with some noteworthy investment fund.

Poloniex confirmed the news via an official post on Medium, stating that it had bought TRXMarket for an undisclosed amount. According to the post, TRXMarket will operate under the umbrella of Poloniex and all of the exchange’s functions will remain the same, however, under a new name – Poloni Dex.

The post further indicated that users looking for decentralized trading services can find them on the Poloniex official website or by going straight to Poloni DEX.

Poloniex has been one of the top 3 digital currency exchanges. Founded in 2014 by Tristan D’Agosta, Poloniex is a cryptocurrency exchange that offers over 100 bitcoin (BTC) markets available for trading.

Furthermore, the platform provides its customers with a secure trading environment as well as advanced charts and data analysis tools. With no deposit or withdrawal fees, it charges a flat rate of 0.2% on all trading transactions.

In October, Poloniex spun off from Boston-headquartered Circle. Prior to this, Goldman Sachs-backed startup Circle had acquired the cryptocurrency exchange startup in February of 2018.

Poloniex noted that it had acquired TRXMarket to expand its decentralized trading ecosystem in an effort to provide its users with varied trading options – a long-term strategic design that Poloniex had been working on since 2018. This acquisition comes as a significant boost to both Tron and Poloniex as its partnership continues to create ways for more innovations within blockchain and cryptocurrency.

Meanwhile, the newly acquired TRXMarket is the first TRON-based decentralized exchange, and it executes all transactions through TRX smart contracts that are stored safely and transparently on the blockchain. The exchange does not require private keys to make a payment as users’ private assets are securely isolated from the exchange.

TRXMarket is one of the most used DEX on the TRON network, listing amongst the 127 TRON Super Representatives. In addition to that, the DEX it records, on average, a 7-day transaction volume of $30 million and has long been a top ten DApp by transaction volume according to DApp Review.

A spokesperson for Poloniex gave out a statement, in which they explained why the exchange had chosen TRXMarket, emphasizing that they had every reason to choose TRON as their underlying infrastructure over other public chains, who were slow progressing and charged high transaction fees.

“We recognize and value the rate TRON is expanding its ecosystem. Under the leadership of Justin Sun, founder of TRON, TRON’s ecosystem is growing at an exponential speed. After the official launch of TRON public chain in June 2018, within just a year, the total number of accounts on the chain of TRON has exceeded 4.1 million and the daily average number of transactions is over a million, securing a place among the top three public chains in the DAapp ecosystem.”

Korean Crypto Exchange UPbit Lost 342,000 Ether Following Hack

South Korean cryptocurrency exchange UPbit — run by a subsidiary of Korean tech giant Kakao — has been hacked, losing 342,000 Ether (ETH), around $50 million from its hot wallet.

The news has been confirmed by Lee Seok-woo – CEO of Upbit’s operator, Dunamu – via an official statement written on November 27th. The statement explained that the exchange had detected an abnormal transaction from its hot wallet to an unrecognized wallet, which led to an outflow of 342,000 ether (ETH). The exchange did not specify whether it had been hacked.

The statement read as follows:

“At 1:06 PM on November 27, 2019, 342,000 ETH (approximately 58 billion won) were transferred from the Upbit Ethereum Hot Wallet to an unknown wallet. Unknown wallet address is 0xa09871AEadF4994Ca12f5c0b6056BBd1d343c029.”

Following the incident, the exchange apologized to users for any inconveniences caused as the CEO had laid out several measures taken as a precaution. Respectively, the exchange transferred all cryptocurrencies from its hot wallet to a cold wallet and said the loss will be covered by its own corporate assets.

Meanwhile, withdrawals and deposits have already been suspended as a precaution. Later on, Upbit said it will take at least two weeks for deposit and withdrawal services to be back to normal, with Lee Seok-woo promising to inform users as soon as they reopen.

According to Whale Alert – a Twitter service that monitors blockchain transactions – the lost ETH worth $49 million at press time, was sent from Upbit’s wallet to an unknown ethereum address starting with 0xa09871 about 04:00 UTC on Wednesday.

About 30 minutes later, Upbit announced that it had temporarily suspended withdrawals and deposits due to server maintenance. Subsequently, the massive withdrawal alerts did raise suspicions, with several people on social media calling it a hack.

Whale Alert, in fact, noted several withdrawals taking place via UPbit, involving other cryptocurrencies and tokens as well, such as Tron (TRX) and BitTorrent (BTT), amongst others. In fact, more than $100 million worth of multiple cryptocurrencies have been sent out from Upbit today.

However, the exchange stated that only ETH holdings had been affected, and all other recent large-scale transactions were related to the exchange moving assets between hot and storage facilities to prevent further losses.

UPbit’s hack marks this year’s eighth breach, and the total amount stolen from cryptocurrency exchanges to date now stands at around $1.44 billion, according to data.

Meanwhile, Upbit isn’t the only South Korean exchange to have suffered loss. Earlier this year, Bithumb – the second biggest cryptocurrency exchange in South Korea, fell victim to an inside job. According to previous reports, it lost about $13 million in March 2019. In total, the exchange had suffered three major security breaches. Last year, Coinrail was hacked for $40 million.

Ripple Completes $50 Million Investment in MoneyGram

Money transfer company MoneyGram has announced that it has received another $20 million from blockchain service provider Ripple, thus completing a $50 million investment commitment. The funds will go to supporting the use of On-Demand Liquidity, a global payments product that uses XRP.

According to a press release on November 25th, San Francisco-based Ripple Labs has made a final $20 million equity investment in MoneyGram as part of Ripple’s original $50 million equity investment commitment.

In June, Ripple pledged $50 million total and made an initial payment of $30 million. The two companies then entered into a 2 year strategic partnership with the goal to invest in cross-border payments as well as foreign exchange settlements with digital assets.

The funds will be used to support MoneyGram’s continuing use of Ripple’s On-Demand Liquidity service. By using the Ripple-linked digital asset XRP, the global payments product – XRapid – eliminates delays in global payments while also dramatically lowering their cost, thus making cross-border payments instant and inexpensive.

The most recent investment acquired shares at a price of $4.10 each, which is 30% higher than the current market price of just over $3. At the moment, Ripple now owns almost 10% of the company’s outstanding common stock and around 15% on a fully-diluted basis including non-voting warrants held by Ripple.

Following the news, Alex Holmes – MoneyGram Chairman and CEO – has stated:

“Our partnership with Ripple is transformative for both the traditional money transfer and digital asset industry – for the first time ever, we’re settling currencies in seconds.”

He further noted that partnerships with companies such as Ripple support and encourage innovation, and allowing them to invest in creating better customer experiences. Following this partnership, Holmes fully anticipates exploring new products and services.

Holmes also commented on initial successes using the On-Demand Liquidity product —Ripple’s XRP-powered payments platform. Since Moneygram’s partnership with Ripple in June, the company has used the service to move around 10% of its Mexican Peso foreign exchange volume. In addition to that, it has expanded its cross-border transactions to Europe, Australia, and the Philippines.

According to the press release, the new funding will also allow the firm to continue using On-Demand Liquidity to increase its trading volume.

Ripple CEO, Brad Garlinghouse, also commented on its partnership with Moneygram, noting that he was encouraged by how much progress had been made since Ripple made its first investment in June. He further added:

“Digital assets and blockchain technology have the potential to make a tremendous impact on cross-border payments – MoneyGram and Ripple is an example of that.”

Thailand Financial Authority Plans to Reform Cryptocurrency Regulation

Thailand’s financial regulator – the Securities and Exchange Commission – has announced their intent to reform the royal decree on digital asset business starting from next year, aiming to facilitate the growth of digital assets whilst protecting investors from unnecessary risks.

According to a local English-language news outlet Bangkok Post reported on November 25th, Thailand is planning to make several significant changes in its existing cryptocurrency policy, in an effort to keep up with the rapid growth of the industry. The SEC will be revising whether the existing royal decree leaves investors vulnerable to risks or hinders the development of digital asset businesses.

In addition to that, the financial regulator will also be revising its poor uptake of its certification and licensing scheme by cryptocurrency businesses.

Ruenvadee Suwanmongkol, the secretary general of the SEC, confirmed the news, stating:

“The regulator must be flexible to apply the rules and regulations in line with the market environment,[…] For example, laws should not be outdated and should serve market needs, especially for new digital asset products, and be competitive with the global market. We need to explore any possible obstacles.”

The royal decree came into effect in May last year and classifies the digital asset businesses into four types of secondary business intermediaries, which are digital exchanges, brokerage companies, dealers and token portal service providers – or commonly known as initial coin offering (ICO) portals.

The existing regulatory framework covers digital tokens, digital currencies as well as any other electronic data, as indicated by the SEC. In order to be able to operate on the market, exchanges, brokers and dealers are required to apply for licenses from the Finance Ministry, whilst ICO portals are to be approved by the SEC.

“The legislation also aims to protect investors from risk of fraud and deception by dishonest persons, money laundering and exploitation of digital assets to facilitate illegal financial transactions, while ensuring regulatory clarity to facilitate legitimate uses of digital assets,” said former SEC secretary general Rapee Sucharitakul last year.

The royal decree has stringent penalties regarding unapproved digital token issuers and solicitors of illegitimate crypto investments, which includes possible fines up to 500,000 baht ($16,540), two times the value of the digital transaction or a two-year jail sentence.

Since last year, only five companies have been granted a license for digital asset exchange, and of those, just two have launched – Bitkub Online Co Ltd and Satang Pro Corporation.

Meanwhile, the country’s ICO portal SE Digital is poised to make a debut with the first investment token in the country with a target transaction size of THB 2 billion and THB 3 billion ($65.8 million and $98.7 million respectively).

SE Digital is amongst the only three ICO portal companies to have been approved by the SEC, the other two being Longroot Thailand Co Ltd. and T-BOX Thailand Co.

Although, the SEC has yet to announce further details about the imminent amendments to the royal decree, it is clear that the financial regulator is putting in effort to identify potential loopholes in the existing framework and subsequently eliminating them in order to facilitate legitimate development of the digital asset businesses.