Connect with us


Anti-Money Laundering Acts Amended to Regulate Virtual Currencies to Taiwan




The Legislative Yuan passed amendments Friday to existing anti-money laundering and terrorism financing prevention laws that regulate transactions of virtual currencies such as bitcoin to help combat online financial crimes.

The amendments to the Money Laundering Control Act and the Terrorism Financing Prevention Act give Taiwan’s Financial Supervisory Commission (FSC) the authority to crack down on anonymous virtual currency transactions.

The FSC can now demand that operators of virtual currency platforms, including bitcoin, implement “real-name systems” that require users to register their real names, according to the new provisions.

If they don’t, banks can reject anonymous virtual currency transactions and report them to the FSC if they deem them suspicious.

The Ministry of Justice (MOJ) said the amendments not only align Taiwan more closely with international standards but also make Taiwan’s anti-money laundering system more complete and support efforts to build a culture that values legal compliance.

A compliance culture and mindset is an important part of effectively fighting money laundering, and that culture and mindset can only be fostered through good habits and practices in the operations of local companies and institutions, the MOJ said.

Although the Money Laundering Control Act was amended in 2016, it has not fully prevented related financial crimes, the MOJ said, and the ministry expected the new amendments to help Taiwan perform better in its upcoming evaluation by the Asia/Pacific Group on Money Laundering (APG), which will take place from Nov. 5 to 16.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Zhiyuan Hui, the World’s Largest Volunteer Platform, Announces Blockchain Dapp Based on everiToken



Blockchain Solutions

Hangzhou, China, January 12 — Zhiyuan Hui, the world’s largest volunteer service platform, signed a strategic cooperation agreement with everiToken. The Chinese non-profit will build a volunteer service application based on the everiToken blockchain.

As of December 2018, Zhiyuan Hui has over 71 million registered users and serves more than 430,000 non-profit organizations. Volunteers have worked over 100 million service hours through the platform, which is valued at over $500 million by the “China Volunteer Service Economic Value Measurement Report” issued by the United Nations.

One of the biggest challenges of operating such a large platform is verifying the authenticity of volunteer hours and service. In order to prevent fraud or data alteration, Zhiyuan Hui has partnered with everiToken to develop a blockchain-based volunteer tracking platform built on the everiToken public chain.

The new open public welfare ledger transparently records volunteer activity and service duration, issuing points called Yi Coin to nearly one million volunteers per day and guaranteeing authenticity through a decentralized blockchain ledger. All volunteer data is stored on-chain, which prevents tampering, and can be instantly verified through evtscan, ensuring transparency, reliability, and security.

Zhiyuan Hui’s new platform will be among the first to realize Edgar Cahn’s “time bank” concept, enabling volunteers to accurately record their hours and receive a Yi Coin reward for their volunteering contributions when they most need it. everiToken safe contracts, everiPass, and everiPay will help volunteers receive, store, and spend Yi Coin points.

Governments, enterprises, non-profit organizations, and other foundations can distribute Yi Coins to volunteers in return for their contributions, while volunteers can use Yi Coin to buy goods from select vending machines and convenience stores. Currently, volunteers can already use Yi Coin to buy basic goods, like food, electronics, and hygiene products, in nearly 100 unmanned retail locations with everiPass.

Further, the everiToken-based system provides audit trails for various stakeholders with access rights, including governments and funders, eliminating the possibility of fraud for the various poverty alleviation projects and government foundation subsidy programs managed by Zhiyuan Hui.

Token-customized public chain everiToken is a market leader in tokenization and token economy infrastructure. everiToken’s payment solution, everiPay, delivers best in class speed (up to 10,000 transactions per second), transaction confirmation times (as fast as 1 second), and fees as low as $0.00006 per transaction. The company’s newly developed “Safe Contract” greatly simplifies smart contract development by enabling users to call token-related APIs. everiToken raised over $10 million in an ongoing private funding round from several high-profile crypto funds, including Asian market leader Fenbushi Capital.

Continue Reading


ICOs Continue to Raise Money via SEC Back Door



French ICO

The number of initial coin offerings getting through the back door at the Securities and Exchange Commission skyrocketed last year, as the securities regulator sent mixed messages about the future of investment contracts based on digital assets.

MarketWatch counted 287 ICO-related fundraisings accepted by the SEC with a total stated value of $8.7 billion in 2018, peaking at 99 in the second quarter. That’s a significant increase from 44 fundraisings filed with a total stated value of $2.1 billion in 2017.

ICO promoters gained access to accredited investors through a back door called Form D, as first reported by MarketWatch in February of last year.

Form Ds are notices filed by a company for an offering that is exempt from full SEC registration requirements. The key criteria for the Form D exemption is that only “accredited investors,” that is, individuals that have a net worth of over $1 million, or that have consistently made over $200,000 per year in income, or companies that have over $5 million in assets, can invest. Companies don’t have to file the Form D before the offering takes place, but instead within 15 days after the first sale of securities in the offering.

MarketWatch searched the SEC’s Edgar database for mentions of words including “coin,” “ICO,” “token,” “initial coin offering” and “saft.” The SEC has been taking steps to warn investors and limit the number of scams from initial coin offerings. Chairman Jay Clayton repeatedly reassured markets in 2018 that no ICOs were “registered” by the SEC.

In May, the SEC’s Office of Investor Education and Advocacy’s tried to capture investors’ attention by setting up a mock ICO website using a bogus coin offering to educate investors about scam red flags. The SEC called it, after the SEC v. Howey, the Supreme Court’s test for whether a transaction qualifies as an “investment contract” and is therefore regulated by the SEC.

In November, the SEC settled its first cases imposing civil penalties solely for ICO securities offering registration violations. The SEC had charged two companies that sold digital tokens in ICOs in 2017 — Airfox, a Boston-based startup that raised $15 million and Paragon, an online entity that raised approximately $12 million — without registering the tokens as securities or filing periodic reports with the SEC.

Later that month, the SEC brought their first cases over touting violations for initial coin offerings, charging boxer Floyd Mayweather Jr. and music producer DJ Khaled.

Based on MarketWatch’s analysis, the SEC’s actions may have helped to slightly staunch the demand for more offerings. But the public statements and speeches of SEC officials belied a reluctance to close the door completely on digital assets and the investment contracts based on crypto-concepts.

SEC commissioner Hester Peirce is a crypto booster, industry advocates say. They’ve nicknamed her “Crypto Mom” after remarks in dissent of a decision by the SEC to reject the application from Cameron and Tyler Winklevoss for a bitcoin-backed exchange-traded fund.

In a speech via video to the Crypto Valley Summit in Zug, Switzerland on Nov. 7 she acknowledged that U.S. regulators are “admittedly sending mixed messages” because they are “coming to terms with crypto in different ways” and not always coordinating with each other.

“For example, our sister regulator, the Commodity Futures Trading Commission, has allowed the development of crypto-derivatives markets, but the SEC so far has not approved any application to list an exchange-traded product based on cryptocurrencies or crypto-derivatives trade on U.S. exchanges,” she told the audience.

Peirce said, “regulators have an unfortunate habit of allowing their own conservatism and their legitimate fear that they will be blamed when investments go wrong to curtail investors’ options.” She favors a different approach, one that “allows investors—informed by good information about the relevant exchange-traded product and encouraged to exercise a healthy dose of skepticism—to choose whether or not to buy the product. I am working on convincing my colleagues.”

In April reported that Clayton told a Princeton University audience he rejected the idea that all ICOs are fraudulent, even though in February, in he said that he believes “every ICO” he’s seen qualifies as a security. Clayton opened the talk by saying he believes that “distributed ledger technology has incredible promise for the financial industry.”

On Dec. 6, Clayton told an audience at Columbia University, “I believe that ICOs can be effective ways for entrepreneurs and others to raise capital,” Clayton said, while also warning that “the novel technological nature of an ICO does not change the fundamental point that, when a security is being offered, our securities laws must be followed.”

These ICOs could potentially become available to retail investors and consumers, who are supposed to be protected from scams by SEC, as a result of the growth of secondary markets for the crypto-tokens that were created by these ICOs.

Several cryptocurrency-related firms are pursuing alternative trading systems or ATS licenses with the objective of providing trading platforms for ICO tokens and other cryptocurrencies. The SEC regulates these trading platforms, which trade securities listed on national exchanges but are not registered as exchanges themselves.

Coinbase acquired three firms, one of which — Venovate Marketplace — is registered as an ATS. Overstock already had an ATS from a previous acquisition. One of its subsidiaries, tZero, is using it to build a security token exchange.

Spokespersons at the SEC and CFTC did not respond to requests for comment due to the government shutdown.

Continue Reading


Hong Kong regulators say IPOs by cryptocurrency businesses are premature, putting Bitmain’s US$3 billion fundraising plan in peril



Hong Kong

Hong Kong’s stock market regulator and operator have signalled their reluctance to give their green light to an initial public offering (IPO) by the world’s largest assembler of cryptocurrency mining equipment, while a regulatory framework is still being drafted to ring-fence the disruptive technology.

It is premature for any cryptocurrency trading platform – or business associated with the industry – to raise funds through an IPO in Hong Kong before the proper regulatory framework is in place, according to two sources familiar with the matter, speaking to the South China Morning Post on condition of anonymity.

The reluctance by the regulator and market operator, which provide policy advice to the Listing Committee of the Hong Kong stock exchange (HKEX), could be an insurmountable hurdle in the US$3 billion IPO application by Bitmain Technologies, the world’s largest maker of cryptocurrency mining computers.

Hong Kong’s listing rules provide for a closed-door hearing before the Listing Committee, which gives the final approval or rejection within six months of an application, after all questions are answered. If the applicant fails to hear from the Listing Committee after the six-month period, the listing lapses.

A spokeswoman at the HKEX said the market operator could not speak about individual cases. China International Capital Corporation (CICC), the sponsor of Bitmain’s IPO, declined to comment. Bitmain’s spokesman declined to comment.

A rejection for Bitman’s fundraising would be another blow to the nascent industry that now finds itself hemmed in by an increasing number of regulatory hurdles, as central banks and other financial regulators worldwide seek to exert control over the disruptive technological phenomenon.

Founded in 2013, Bitmain is the largest assembler of the data-hungry computers used for mining cryptocurrencies, and operator of mining collectives.

Its explosive growth from start-up to unicorn – a company exceeding US$1 billion in value – traced the 15-fold surge in bitcoin’s value in 2017, which created a demand boom for Bitmain’s Antminer computers.

The size of conventional servers, Antminers are filled with dozens or hundreds of high-powered computer chips known as ASICs that crunch the data needed to verify cryptocurrency transactions. Their cheapest configuration starts from US$200 in Hong Kong, going up to several thousand dollars.

Continue Reading


GSR Capital Engages tZERO to Develop Commodity Contract Token



Bitcoin-29000, Inc. and its subsidiary tZERO Group, Inc., the global leader in blockchain innovation for capital markets, announced that Hong Kong-based private equity firm GSR Capital has retained tZERO to develop a smart contract token that will be utilized for an upcoming sale of cobalt. Subject to compliance with applicable regulatory requirements, the sale is expected to offer recurring tranches of electric vehicle (EV) battery-grade cobalt, with up to $200 million of the material projected to be available for sale in 2019, with more planned for 2020.

tZERO and GSR Capital intend to build an ecosystem in Asia for tokenized commodity purchase contracts that would simplify the process of identifying, purchasing and tracking the supply of rare minerals. The companies also envision adding a security token trading platform in the region, subject to compliance with applicable regulatory requirements.

To accommodate an additional key partner in that project, the companies will be extending the deadline to finalize their previously-announced equity investment until Feb. 28, 2019. More information on the previously announced equity transaction can be found in a letter to investors in the Form 8-K filed by Overstock on December 17, 2018, which can be found on the company’s Investor Relations page.

“GSR Capital and our partners are pushing forward with our plans to create a first-of-its-kind cobalt offering in 2019,” said GSR Capital’s Chairman and Founder, Sonny Wu. “We are proud to partner with tZERO for this token offering and believe that their leadership in this space will benefit our shared global outreach. GSR and our partner will be doing more than just cobalt tokenization, and we see further growth in our partnership with tZERO including consummating an investment directly by next quarter.”

“We are excited to work with GSR and their partner on this innovative cobalt token offering,” said Overstock CEO and tZERO Executive Chairman, Patrick M. Byrne. “Smart contract automation of these transactions will significantly reduce overall costs while effectively improving transparency in rare earth metals purchases throughout the supply chain process. We look forward to bringing the future of commodities purchasing to the global marketplace.”

Continue Reading


Hong Kong to Tighten Cryptocurrency Rules



Kristoffer Inton

Hong Kong is set to tighten regulations on cryptocurrencies, with plans to put exchanges, traders and other related companies under the oversight of the Securities and Futures Commission.

With less stringent rules on digital currencies than mainland China, where all crypto-related commercial activities are effectively banned, Hong Kong has become a thriving market for initial coin offerings. But growing concerns over fraud and money laundering have prompted the regulator into action.

According to the SFC’s guidelines, investment funds will be required to obtain a license if more than 10% of the assets they manage are made up of bitcoin or other cryptocurrencies, and will be allowed to sell related products only to professional investors.

Under the voluntary scheme, exchanges will be able to test virtual currency products or services temporarily in a “regulatory sandbox” before deciding on whether to seek a license.

The proposed regulations, which are to be implemented in stages, will also mean that companies can only issue ICOs for tokens that fulfilled SFC’s requirements. For instance, the tokens must have existed for at least 12 months.

In February, the SFC sent warning letters to seven local exchanges after receiving complaints from investors claiming they had been unable to withdraw fiat or cryptocurrencies from their accounts. Certain exchanges were accused of misappropriating assets or manipulating the market.

In March, the commission ordered Black Cell Technology to halt its ICO and charged the company with conducting unauthorized promotional activities.

Hong Kong’s actions reflect a growing trend. The Group of 20 leading economies is considering ways to regulate virtual currency assets as part of the global fight against money laundering.

As a financial center closely linked to mainland China, Hong Kong is taking steps in the right direction with measures like requiring identity verification for transactions, said Daisuke Yasaku of the Daiwa Institute of Research.

But the “cost of regulations will be high,” he warned.

Depending on the design of its platforms, an exchange can be required to report frequently to the authority and subject to rigorous inspections and monitoring, Yasaku pointed out.

“The requirements of the SFC initiative may prove too burdensome for some operators”, said Timothy Loh, who manages a law firm in the territory. Some will decide not to join the new framework in order to maintain their current shares in the market.

Some argue that higher trading costs also risk discouraging institutional investors from entering the market, dampening hopes that their presence will help stabilize it. The counter argument is that tighter regulations may lead to greater investor confidence over the long run.

Continue Reading


Cryptoassets Should be “Outlawed” – Allianz GI CEO



French ICO

The head of one of Europe’s largest asset managers has called for global regulators to ban cryptoassets, scorning them for wiping out people’s savings.

After a spectacular boom in 2017, cryptocurrencies have fallen to earth this year. The best known one, Bitcoin, has lost three-quarters of its value while Ripple and Ethereum, the second and third biggest cryptocurrencies, have both slumped nearly 90 percent.

“You should outlaw it”, Allianz Global Investors Chief Executive Andreas Utermann said during a panel discussion in London on Tuesday.

“I am personally surprised that regulators haven’t stepped in harder.”

Utermann made the comments sitting next to Andrew Bailey, the head of Britain’s Financial Conduct Authority. Bailey responded saying “that’s quite strong actually!” before adding there was “no intrinsic value” in cryptoassets.

“We are watching that very closely.” Authorities also had crypto coin offerings (ICOs), which firms have used as an alternative way to raise funding, under surveillence too, Bailey said.

Continue Reading


STO Business Essentially an Illegal Financial Activity in China




The People’s Bank of China officially banned security token offering (STO) businesses on Saturday, in another blow to digital currencies in mainland China. An STO is an initial coin offering (ICO) backed by tangibles such as assets, or profit or revenue of a company. An ICO is fundraising activity that allows digital currency start-ups to raise funds through the creation and sale of digital “tokens”.

Pan Gongsheng, a deputy governor of the People’s Bank of China, the country’s central bank, told an internet finance forum in Beijing that “illegal” financing activities through STOs and ICOs were still rampant in the mainland despite a nationwide clean-up of the cryptocurrency market last year.

“The STO business that has surfaced recently is still essentially an illegal financial activity in China,” he told the forum, according to state-owned China Central Television. “Virtual money has become an accomplice to all kinds of illegal and criminal activities.”

In what amounts to a top financial official acknowledging the ban on ICOs and STOs for the first time, Pan said most of the financing operations conducted through ICOs in China were suspected of being illegal fundraising, pyramid sales schemes and other financial fraud.

Beijing launched a crackdown on ICOs in September last year, ordering all platforms to halt digital currency issuance immediately. Before the crackdown, 80 per cent of the world’s virtual currency transactions and ICO financing took place in mainland China.

Continue Reading


Fundraising Through an IEO Instead of an ICO?




A Blockchain Powered Remittance Platform – REMIIT – completes its IEO through the South Korean cryptocurrency exchange Coinis, raising approximately $2.3 Million over two days.

IEO is an abbreviation of “Initial Exchange Offering” which is a method of fundraising for blockchain businesses where the cryptocurrency of the project conducts fundraising being directly listed on the exchange. The key element to an IEO is to partner with an exchange (or multiple exchanges) to function as the distributor of tokens. Project developers mint the tokens and conduct the sales directly through the exchange, which will then sell the tokens to individual contributors for the corresponding pair.

REMIIT that completed their IEO last November is a blockchain powered remittance platform that builds on Ethereum with the Cosmos Chain as a side chain to enhance the transaction capacity and reduce costs. In the current monopolized remittance industry, REMIIT brings an alternative solution that resolves not only the issues in the banking sector but also the problems that exist in the blockchain remittance businesses. With the REMIIT Smart Contract (RSC) that can be activated with their stable coin REMD at its core, it is expected to minimize the number of intermediaries involved for a faster and cheaper overseas money transfer experience.

After the project launch through the IEO, REMIIT’s CEO Stevie An spoke, “REMIIT has many competitors in the industry but there still remains a large amount of market share available for blockchain remittance” and that “REMIIT will capitalize on the previous remittance business experience to speed up the blockchain implementation in our everyday lives.”

With the support of the REMIIT project from South Korea, it has demonstrated great potential for the possibilities to grow further in the global sector. Despite the difficulties that may lie ahead, REMIIT stands at the forefront to bring adoption of blockchain technology to our everyday lives.

Continue Reading


Startup to File Constitutional Appeal Against ICO Ban



French ICO

A blockchain startup will file a constitutional appeal against the Korean government’s ban on initial coin offerings (ICOs). Presto said Thursday that it would appeal the Constitutional Court, alleging that banning all types of ICOs is against the rule of law and the principle of proportionality, thereby violating basic rights

Presto has been in the spotlight by claiming to apply DAICO, an alternative to ICOs, for the first time in Korea. DAICO, a portmanteau of Decentralized Autonomous Organization (DAO) and ICO, enables investors to use a smart contract to decide on executing funds or getting their money back, resulting in embezzlement or scams being reduced significantly.

“As a blockchain startup, we have been hitting a snag as the government and the National Assembly have done nothing over the last one year since the government’s blanket ban on ICOs,” said Presto CEO and founder Kang Kyung-won, adding that “we will ask the court to rule on the ICO ban and the legislature’s nonfeasance.”

The Korean government formed a virtual currency task force consisting of government agencies including the Ministry of Strategy and Finance and the Financial Services Commission in September last year and banned all types of ICOs including security-type ones. However, there have been no laws and guidelines governing ICOs since then.

Presto contends that the ICO ban is the execution of governmental authority that infringes upon — without legal grounds — people’s freedom of occupation and property and equal rights and scientists’ basic rights. “In this era of the Fourth Industrial Revolution and unbounded competition, one year or two in the science and technology community is comparable to 100 years in the past Industrial Revolution.

Continue Reading


ICOs Offload ETH and Downsize to Survive



Crypto Expected

Having belatedly realized that the crypto market may have further to drop, and that staying all in ETH could be fatal, tokenized projects have begun cashing out and cutting costs. Some, such as Aragon, have shown prudence in their treasury management, maximizing capital through smart cryptocurrency acquisition and liquidation. This week, the project sold $1.5 million of cryptocurrency, including $1 million of ETH, and has sought sanctuary from market volatility by taking out a 1 million loan of DAI, Maker’s ETH-collateralized stablecoin.

Other tokenized projects have not been so fortunate or astute at balancing their budgets however. In addition to Aragon, over 100,000 in ETH has been sold by ICOs in the past week in a belated attempt to stem diminishing funds. A number of projects have also begun to lay off staff, including Steemit, which is shedding 70 percent of its workforce. In a blog post, Steemit CEO Ned Scott attributed the move to “the weakness of the cryptocurrency market, the fiat returns on our automated selling of STEEM diminishing, and the growing costs of running full Steem nodes.” He added:

I would like to thank all of our employees and contractors for their months and years of dedication and hard work. It is incredibly difficult to part with these great people who I have gotten to know well and respect.

Continue Reading