Microsoft Innovation Center Partners with æternity in Malta

æternity, an open-source blockchain, has partnered with Microsoft Innovation Center (MIC) to support the growth of blockchain technology in Malta, according to a release.

æternity’s investment arm, AE Ventures, and Microsoft are expected to host frequent blockchain events in Malta.

Malta, a member of the European Union, is well known for its crypto friendly jurisdiction. It is also home to one of the largest crypto exchanges – Binance.

Mary Downing, Manager of Microsoft Innovation Center, said that after all of the blockchain hype it is now time to time to “demystify all the doubts there could still be about this technology.”

“We are very proud to have æternity on board as our second Microsoft Innovation Center partners. Having æternity promote and nurture blockchain startups from the Microsoft Innovation Center will not only bring a more flexible development of new technology but will also be an opportunity to promote blockchain as a tangible technology that brings real value,” said Downing.

The first event hosted by Microsoft Innovation Center and AE Ventures will be a weeklong training program for blockchain startups.

æternity Starfleet, a global accelerator program, is said to have reviewed more than 100 blockchain startups from around the world and invited 15 to participate in the program, which begins November 4, 2019.

Following the Starfleet global acceleration program, 10 startups will be selected for an additional five weeks of mentorship. This will culminate with a Demo Day at which selected teams will win an investment offer of up to $100,000 USD in AE tokens and an additional six months of mentorship and acceleration.

“We are excited to be partnering with the Microsoft Innovation Center and we see this as the next step in æternity’s global policy,” said Jarek Bialek of AE Ventures. “Malta is a great place for developing blockchain ideas and bringing them to life, this is why we believe that more Starfleet alumni will choose to incorporate their companies here.”

Dr. Joshua Ellul: Chairman of Malta Digital Innovation Authority Reveals Motivations Behind Launching a Masters in DLT Program at University of Malta

We recently caught up with Dr. Joshua Ellul, chairman of Malta Digital Innovation Authority and director of centre for DLTs at the University of Malta.

Last month, the island country of Malta introduced a Masters in Blockchain and Distributed Ledger Technology program. The crypto-friendly jurisdiction in the Mediterranean has taken several measures to support the development of its emerging blockchain industry.

Malta has established a government authority to assess and certify distributed ledger technology (DLT) platforms. The nation has also created a regulatory framework for smart contracts and introduced comprehensive guidelines for conducting digital token sales. 

Dr. Ellul says he’d like to see increased adoption of crypto assets and DLT-based technologies in the coming years. He also told us about why he decided to create a Masters in blockchain tech program.

Crowdfund Insider: Please tell us about what inspired and motivated you to develop the Masters in DLT program at the University of Malta.

Dr. Joshua Ellul: “Whilst working with lawyers and various business professionals during consulting we had provided regarding technical aspects of Malta’s proposed blockchain-related laws, we had noticed the disconnect and communication barriers between the various professions. 

Noting that Blockchain and DLTs were bound to impact many different sectors and services, and how smart contracts posed new challenges and opportunities for integration within legal frameworks, we identified the need for professionals who are not only specialized in their areas of expertise but who were also familiar with other professions that worked closely to theirs.  

Therefore, we set out to develop a multidisciplinary Masters in Blockchain and DLT, allowing students to gain a deep specialization in their particular area and also a broad introduction to the other peripheral areas.”

Crowdfund Insider: Where do you see the crypto and blockchain space in 5-10 years from now? Do you think there will be more advanced DLT-focused, undergraduate and Ph.D. programs offered in the future?

Dr. Joshua Ellul: “What I would like to see is mass-adoption of Blockchain, DLT and crypto usage.  That being said, mass-adoption or rather the use of blockchain may become a reality without many even realizing that they are using a blockchain system since this change could be made by various institutions and service providers that may want to disintermediate their services (for whatever reason, due to public pressure or to ensure transparency). 

Crypto mass-adoption, on the other hand, has some challenges to reach mass adoption including non-tech savvy user adoption, and jurisdictional and regulatory challenges. We are seeing initiatives that could turn this into a reality, however, it’s hard to say where this will be in 5 years since it is highly dependent upon social aspects.

Education is key. Indeed, I think we will see more DLT-focused Master’s programs over the coming years. It is my personal opinion that specializing at the undergraduate level in DLT may be too early given the various aspects that the DLT field covers including technical, business and legal aspects. 

Though indeed we should see aspects of DLTs covered within various ICT, business and law undergraduate programs. PhDs are really dependent upon the research question the student aims to tackle, so most definitely we will continue to see more PhDs in the area.”

Crowdfund Insider: What can students expect to learn after completing the Master’s program? What kinds of jobs are currently available for people who’ve earned a Master’s degree in Blockchain technology?

Dr. Joshua Ellul: “All students will learn about fundamental Blockchain, DLT and smart contract concepts, aspects of the DLT business world and entrepreneurship. Then depending upon the area of specialization students will cover topics that may include in-depth smart contract programming, DLT architecture and internals, and verification of smart contracts; legal aspects of blockchain and crypto; applied economics and tokenomics, and money, banking and cryptocurrency-related issues.  

Students that are not specializing in the ICT stream will receive an introduction to smart contract programming. Students that are not specializing in law will receive an introduction to the law and blockchain-related law. 

Depending upon their areas of expertise, students could thereafter work as smart contract/blockchain developers, legal consultants, managers, or business developers or any other aspect of a blockchain-related business even up to a C-level job (obviously depending upon the student’s aptitude and character).”

Crowdfund Insider: What do you think is the most important part of the University of Malta’s DLT program?

Dr. Joshua Ellul: “It’s two parts: 1. deep specialization in the student’s area of expertise; whilst at the same time 2. a broad introduction to the various other professions.”

Malta’s Financial Services Authority Reportedly Received 21 Requests from Digital Asset Exchanges Interested in Acquiring Operational Licenses

The Malta Financial Services Authority (MFSA), the financial regulator of Malta, has reportedly received 21 requests from digital asset exchanges that are interested in acquiring operational licenses under the island country’s Virtual Financial Assets (VFA) Act.

As noted in a November 1 announcement on MFSA’s official website, the 21 digital currency exchanges are among the 34 prospective VFA service providers that submitted letters of intent to the nation’s regulatory authorities in order to obtain a VFA Services Licence.

The MFSA said that, until the end of last month, digital asset service providers had been conducting business operations under the transitory provisions outlined in Article 62 of the VFA Act. 

These crypto-related firms will now have to obtain authorization from the MFSA, if they want to continue providing products and services in Malta, the announcement stated.

As reported by Finance Magnates, the MFSA will ensure that applicants are placed into one of four categories that outline the requirements that license holders must satisfy. Malta’s financial regulator also intends to enforce various administrative penalties in cases of non-compliance, the report noted.

The official announcement stated that the MFSA said it plans to contact the applicants in order to conduct an initial meeting. Following the consultation, applicants will be given 60 days to complete and send an application to the MFSA.

As mentioned in the announcement, the MFSA received 30 registration applications of VFA Agents, with 18 of them that have already completed the registration process. 

A list of the registered agents can be found on the MFSA website.

The VFA Act came as part of Malta’s blockchain and distributed ledger technology (DLT) legislation that was passed last year. The island nation also introduced the Malta Digital Innovation Authority Act and the Innovative Technological Arrangement and Services Act. 

In September 2019, the MFSA released a strategic plan that aims to monitor and reduce or eliminate potential business-related risks that blockchain startups might encounter.

On October 31, that MFSA issued a warning, stating that there’s a new Bitcoin-related fraudulent scheme, called “Bitcoin Future.” The regulatory agency said it appears to be somewhat similar to a previously identified scam, known as the “Bitcoin Revolution.”

Stock Exchange of Art: Monart Seeks to Tokenize Art, Provide Secondary Trading in Tokens

Paris based but regulated in Malta, Monart has launched a blockchain-based marketplace to tokenize art. Monart recently held an opening event in Paris at the offices of Beaux-Arts Magazine.

According to a company release, Monart is targeting a market estimated at $67 billion annually. After several years of research and development, Monart is live and selling shares of art for “major international artists as well as emerging ones.” Monart describes itself as the “First stock exchange of art.”

Monart is positioning itself as the “safest and most exciting art market system” by using blockchain with its model of “selling parts of premium selections of works of art to participate in the growth of the art market. contemporary art.”

The first “collection” is live now on Monart called the “Monart Wave” seeking €500,000 from investors at €100 per part.  Additional individual items of art are available for investment as well.

The trading portion of the site is expected to be live soon.

Malta Introduces Masters in Blockchain and Distributed Ledger Technology Program

Malta, a crypto-friendly island in the Mediterranean, has established a government authority to assess and certify distributed ledger technology (DLT) platforms. The nation has also developed regulations for smart contracts and introduced a framework for conducting initial coin offerings (ICOs).

Recently, the island country launched a blockchain master’s program.

The University of Malta’s Masters in Blockchain and Distributed Ledger Technology was introduced in October 2019. Only around 35 students enrolled in the nation’s DLT-focused masters program, which is notably one of the few such programs in the world.

In April 2017, prime minister Joseph Muscat announced plans for Malta to become a ”global trail-blazer” in the DLT industry.

Regulators in the country have passed crypto and blockchain-friendly laws. This has led to  high-profile industry participants such as Binance, the world’s largest crypto exchange by adjusted volume, shifting their operations to the island.

Masters Program Director Joshua Ellul, who’s also chairman of Malta Digital Innovation Authority, said that 15 companies have contacted his DLT program students. Ellul revealed that there’s high demand for government-led blockchain contracts, projects and initiatives.

While speaking to students at Malta’s DELTA Summit, where the University of Malta’s DLT Masters program was introduced on October 3, Ellul said:

“And this year, here you are. The future Blockchain and DLT specialists – who will lead and drive the Blockchain Island forward.”

In 2018, the island country’s government issued €300,000 in grants to fund different scholarships.

The master’s blockchain course trains students in DLT-related laws and regulations, business and finance, and information and communications technology (ICT). Students work on their focus concentration for three semesters while taking courses in two other fields.

Ellul said that a wide range of courses help students learn about many different crypto-related topics. 

He also mentioned:

“We noticed a huge problem between techies and lawyers and business professionals. There was a communication disconnect between us. We thought: ‘this would be the perfect place to have a master’s, one serving the multidisciplinary purposes of the different specializations.’”

Malta’s DLT masters program was created by Ellul and Dr. Gordon Pace, a professor in the University of Malta’s computer science department.

Explaining how Malta’s blockchain masters program was developed, Pace noted:

“We had a feel about what they needed, what type of experts they needed. Right from the very beginning the idea was to have a broad, yet deep program.”

Binance is Coming: Formidable Asia-Founded Crypto Exchange Will Begin Registering Traders on Compliant US Exchange Next Week

Binance, believed to be one of the world’s largest crypto trading platforms, will begin registering users wanting to trade select “crypto assets” on the company’s “Binance.US” platform next Wednesday.

Binance.US will open account registration and begin accepting deposits of BTC, ETH, XRP, BCH, LTC, and USDT on Wednesday, September 18, 2019 at 8am ETThis kicks off our first phase as we gradually roll out access to our digital asset marketplace across America,” the exchange announced September 11th in a dedicated blog post.

Registrations will be taken but trading will not go live until the company announces an update. When the update can be expected is not yet clear.

Binance.US says it will be offering different “tiers” of verification to registrants:

“During this initial registration phase, you will be able to sign up for a Binance.US account and select the tier of verification required to achieve your desired withdrawal limits. Once verified, you will be able to make deposits across the initial selection of digital assets. Shortly after registration opens, we will provide an update detailing when trading will go live for specific pairs.”

After trading of Bitcoin, Ethers, Ripple, Bitcoin Cash,Litecoin and Tethers gets underway, Binance.US says it will be, “…continually adding to the selection of digital assets available for verified users to deposit and eventually trade on Binance.US.”

Tokens and cryptocurrencies added in the future will be chosen based on the platform’s “Digital Asset Risk Assessment Framework.”

Binance.US headquarters will be located in San Francisco, where the platform’s main US competitors, Coinbase and Kraken, also keep headquarters.

According to data at Coinmarketcap.com, Binance, which is domiciled in Malta, is the 7th busiest exchange on the planet.

The site shows Binance processed $804.47 million USD in crypto trades in the past 24 hours and $15.65 billion USD in volume in the past 30 days.

Binance announced last week that it had acquired a crypto derivatives platform called JEX:

“JEX will join the Binance ecosystem as Binance JEX and focus on further building the cryptoasset derivatives market, providing Binance users with professional services including futures contracts, options and other derivative products.”

JEX, its team and its exchange token program (similar to loyalty points) will now come under Binance auspices.

Binance, World’s Largest Crypto Trading Platform, Acquires JEX Derivatives Exchange

Binance, a platform reportedly handling 55% of the world’s crypto trading traffic, has acquired a crypto derivatives platform called JEX, Binance has announced:

“JEX will join the Binance ecosystem as Binance JEX and focus on further building the cryptoasset derivatives market, providing Binance users with professional services including futures contracts, options and other derivative products.”

JEX, its team and its exchange token program (similar to loyalty points) will come under Binance auspices. This may give more traction to JEX tokens, Binance writes, suggesting JEX users might be able to use JEX tokens on Binance and/or Binance users may be able to use “Binance coin” (BNB) on JEX:

“Binance will manage the JEX team and the JEX tokens run by its Foundation, introducing more utility to the JEX token. In a longer term, JEX tokens will be gradually distributed to all users via marketing activities and community incentives; subsequently, the tokens will be gradually retrieved and burned in various forms including trading commission deductions and so on.”

Binance founder Changpeng Zhao became a billionaire less than a year after starting Binance thanks to technical know how and fortuitous timing that coincided with Bitcoin and crypto’s boom of 2017.

Trading volume at crypto exchanges across the board was reportedly down by 50% this summer, and Binance is likely looking for ways to capture more trading revenues.

The JEX website boasts a fairly simple interface and does not indicate in English whether JEX offers leveraged trades.

The website also does not offer an email for press contacts, so comment has been sought at the general email. Any remarks will be appended to this article.

Binance writes that it is pleased it will be selling crypto derivatives through Binance JEX:

“We welcome the JEX team and more partners to join the Binance ecosystem. We look forward to delivering more innovative derivative products in the future with Binance JEX.”

Hacker Attempts to Extort Binance, World’s Largest Crypto Exchange

A hacker has started leaking KYC (know your customer) data he or she claims is from Binance, the world’s largest crypto exchange by volume.

The data, which includes photos of passports and other IDs, is now being circulated on a Telegram channel with 10 000 users that Newsweek says was, “seemingly created to share the images after the failed blackmail attempt.”

Yahoo Finance says that more than 400 images of people holding their passports have been circulated on the channel so far:

“The leak includes at least one British driving license and passport, as well as documents from France, Turkey, the Unites States, Japan, Russia, and South Korea.”

Binance contests the “legitimacy and relevancy” of the exposed data in a blog post titled, “Statement on False ‘KYC Leak.'”

“First and foremost, there are inconsistencies when comparing this data to the data in our system,” the exchange writes. “At the present time, no evidence has been supplied that indicates any KYC images have been obtained from Binance, as these images do not contain the digital watermark imprinted by our system.”

The exchange also says the data is from February 2018, and that the same batch of stolen data was already reported on in January 2019, when a hacker called “Dread” was shopping around a stolen cache.

Unfortunately, stolen data can be easily duplicated and is often sold and resold many times over on the Dark Net. The data in this case could easily be recycled.

Binance says the hacker refused to prove the origins of the data and instead, “demanded” 300 bitcoins (approximately $3.5 million USD) for its return. Binance refused.

Rebuffed, the hacker then, “went to the press under false pretenses,” Binance claims, and began pushing the story.

The exchange is offering a reward of up to 25 bitcoins for information relevant to this extortion case. “You may submit this information by opening a support ticket at https://support.binance.com.”

Binance was started in China but is now headquartered in Malta.

It’s founder, ChangPeng Zhao, became a billionaire in less than a year after the exchange opened its doors thanks to the crypto craze of 2017.

OKEx Donates $4.5 Million Worth of Bitcoin to Perpetual Swap Market Insurance Fund

OKEx, a Malta-based digital assets exchange, announced earlier this week has donated $4.5 million worth of Bitcoin to its perpetual swap market insurance fund to encourage customer confidence in trading cryptocurrencies. OKEx reported that last year it introduced perpetual swap trading along with the new risk management system which their customers widely benefited from. The platform revealed:

“Since the adoption of the new risk management system, the exchange has recorded zero clawback for the futures and perpetual swap markets, even under extreme volatility. The donation to the perpetual swap insurance fund will now provide an extra layer of protection to the customers, further ensuring that all customers’ interests are safeguarded.”

Speaking about the donation, Andy Cheung, Head of Operations of OKEx, shared:

“We strive for developing a healthy trading environment. No clawback has occurred on OKEx perpetual swap since its launch. We introduced a new risk management system to strike a better balance between avoiding early liquidation and maximizing traders’ benefits. We believe the $4.5 million donation can give extra confidence for customers trading on our platform. Developing a robust crypto marketplace where everyone can trade freely in a fair manner is something that has always been our mission.”

Cheung went on to add:

“Customer satisfaction is the core of our service. The key to delivering the best user experience to our customers is security. Our founding members and executives are all tech and internet experts, allowing us to lead in product and technology development. As believers in Bitcoin and blockchain, we are dedicated to bringing more positive changes to the existing financial system, bridging the traditional and crypto markets with our technologies.”

Hackers Sell Bitcoins Stolen from Binance…on Binance

Binance, a major cryptocurrency exchange that suffered a $44 million USD hack in May, recently processed some of the Bitcoins stolen from it on behalf of the hackers, digital currency Regtech firm Coinfirm reports.

According to data Coinfirm furnished to Coindesk, hackers have been moving the coins from wallet to wallet on several exchanges, possibly in order to move those funds out onto other coins.

By hopping small sums of the coins from wallet-to-wallet and coin-to-coin, hackers are likely trying to make the coins harder to trace.

As well, the price of Bitcoins has gone up since the hack, and hackers may be trying to sell while prices are still relatively high.

According to Coinfirm’s Grant Blaisdell:

“Analysis of one of the mainchains used by the hacker in layering stolen funds shows that they were able to liquidate at least 1.8087 BTC (21,000.00 USD) on the following exchanges:

Bitfinex: 0,7934 BTC

Binance: 0,4294 BTC (emphasis added)

Bitmex: 0,0022 BTC

KuCoin: 0,0713 BTC

Kuna: 0,2482 BTC

Bitmarket: 0,2560 BTC

Crypterra: 0,0072 BTC

Bitcoin.de: 0,0007 BTC

WazirX: 0,0003 BTC”

As Coingeek points out, the incident is somewhat damning for Binance, as it suggests that the exchange’s anti-money laundering controls are so weak that Binance cannot even detect funds stolen from itself, and has in this case aided hackers in the laundering of about $5000 USD in Bitcoins.

Regulators around the world are now coordinating rules to govern the crypto sector under new guidelines ratified in June by the FATF, a powerful global anti-money laundering intergovernmental body capable of advising sanctions against non-compliant jurisdictions.

Binance is currently headquartered in Malta, a region known for its less restrictive regulating of cryptocurrency firms. Malta is currently not a member of the FATF.

EU Asks Malta to Boost Policing, Anti-Corruption and Tax Measures as Local Cryptocurrency and Gaming Industries Boom

In its latest “country-specific recommendations,” the EU has advised officials in Malta to enhance oversight of the country’s booming cryptocurrency and gaming sectors, to boost rules and address understaffing in the country’s Economic Crimes Unit, and to act against “aggressive tax planning” (evasion) executed by individuals and companies in the region.

The EU highlights financial and governance “integrity risks” posed by the rapid growth of the country’s services sector:

“In the last decade, Malta experienced a pronounced shift towards the services sector, with a strong focus on internationally oriented areas such as financial services, tourism, and remote gaming. The expansion of the services sector contributed to fuel economic growth and to develop a large surplus in the current account. At the same time, the increasing reliance on sectors that are considered vulnerable to financial integrity risks creates challenges to the governance framework, putting pressure on the supervisory and enforcement capacity.”

Growth in gaming and cryptocurrency sectors imply increased risk of money laundering, the EU writes, risk that should be addressed:

“In particular, the size of the financial and the gaming sector, the efforts to attract crypto-currency operators require an effective anti-money laundering enforcement.”

Steps in the right direction taken by the country are acknowledged in the reports:

The recent increase in the human and budgetary resources of the Financial Intelligence Analysis Unit as well as the enhancement of its procedures and processes are positive steps.”

But still-weak anti-corruption measures, including understaffing at the Police Economic Crimes Unit, suppress the country’s foreign investment prospects, report authors state:

“Governance shortcomings, particularly in the fight against corruption, may also adversely affect the business environment and weigh negatively on investment. In particular, there is a risk of conflict of interest at various levels of government.”

Targeted legislation and follow through are, accordingly, in Malta’s best long-term interests:

“Improving the governance framework and ensuring an effective implementation is a key element to preserve Malta’s attractiveness and protect the economy from reputational risks.”

Though Malta has actively courted “the blockchain sector,” the EU claims that, in other regards, “The proportion of innovative enterprises is still lagging behind… it is critical to invest even more in administrative and supervisory capacity.”

As well, “Research and innovation performance need…(to) be strengthened by smart specialisation so that this may contribute to growth in productivity.”

The country’s leaders have grown services, but, “…(have) not yet set up the formulation of a coherent, comprehensive and long-term competitiveness strategy for moving the domestic economy up the value chain.”

Politicians are also asked to make, “…further investments in intangible assets including research and development, addressing skills deficits and gaps and facilitating science-business links, all within more effective governance of the research and innovation system.”

…and to address the country’s gender gap, the worst in the EU:

The gender employment gap remains the largest in the EU and women’s participation in the labour market declines strongly from their mid-thirties, largely due to caring responsibilities. More labour market support for unemployed informal carers could address this gap.”

It should be noted that politicians, in their push to court key services sectors, have improved employment in Malta:

“The employment rate in Malta, now above EU average, is still increasing. A special emphasis in this regard could benefit people with disabilities.”

But despite, “…relatively high amounts (invested) in education and training…this is not yet reflected in better outcomes for all…(and) Despite measures to tackle early school leaving, the rate is still one of the highest in the EU.”

Regarding these issues, the EU advises:

“The investment strategy would benefit from further focus on correcting social disadvantage, to be in line with the Social Pillar principle on EN 5 EN quality and inclusive education.”

Malta also appears to be continuing to act as a haven for tax evasion:

“Malta has taken measures against aggressive tax planning, but the high level of royalty and dividend payments as a percentage of GDP suggests that Malta’s tax rules are used by companies that engage in aggressive tax planning. The absence of withholding taxes on outbound (i.e. from EU residents to third country residents) dividends, interest and royalty payments made by Malta-based companies may lead to those payments avoiding tax altogether, if they are also not subject to tax in the recipient country.”

Malta has been previously accused by EU council members of selling EU passports to high net-worth individuals, including people from countries suffering from high levels of corruption and organized crime.

The same passport programme has potential tax evasion functions, the EU writes:

“Although Malta Individual Investor Programme and Malta Residence and Visa Programme do not automatically grant residence for tax purposes, if requirement(s) are met, income may be exempt under the ‘non-dom’ regime, if income is not remitted to Malta, without substantial physical presence requirements. They may facilitate aggressive tax planning practices…”

In 2017, dogged Maltese anti-corruption journalist Daphne Caruana Galizia was murdered when a bomb in her car exploded as she drove away from her family home.

Prior to this, Caruana Galizia’s family home had been attacked by fire twice and three family dogs murdered.

All three of her children have now gone into exile though her husband remains in Malta.

Caruana Galizia chronicled what she identified as incessant corruption in Malta relating to the country’s function as a passport dealer and tax-avoidance/money-laundering destination of choice for international criminals.

Caruana Galizia accused many Maltese politicians of corruption in her blog posts, and at the time of her death, was facing down 42 cases of libel brought against her by people she had accused.


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Following VC round Standard Tokenization Protocol to Issue IEO on Bittrexx

Following a recent VC round where they raised a reported $7 million,  Standard Tokenization Protocol Partner is now pursuing an Initial Exchange Offering (IEO) by partnering with Malta-based Bittrex International.

Bill Shihara of Bittrex International said that every action they take is guided by their commitment to promoting blockchain innovation:

“The STP team share that same vision and they are making it a reality for projects all over the world to simplify the tokenization process and remain compliant. This partnership is perfect fit and we are extremely proud to help STP raise additional funds to continue their great work.”

According to note from the firm, “authorized” users will be able to purchase the tokens, Standard Tokenization Protocol tokens (STPT), at a fixed cost on Bittrex beginning June 11th. The authorized part most likely means – no US investors.s

Bittrex International operates within the regulatory framework established by the Maltese Government, including the Malta Virtual Financial Assets Act. The company says it will apply to the Malta Financial Services Authority to become a regulated Virtual Financial Asset exchange.

Bittrex also operates a US facing crypto exchange.

Funds raised will be utilized to further develop the bespoke blockchain and “realize their vision to seamlessly enable the execution of token issuance, providing issuers with a fundraising method that is faster and cheaper than traditional means.”

Standard Tokenization Protocol is an open-source standard and decentralized network that seeks to simplify the tokenization and issuance of assets.

Mike Chen, CEO of STP, stated:

“The IEO is only the beginning of our long journey to create a decentralized network for compliant and transparent tokenization.”

Bittrex International customers can read about all the IEO details here.

OKCoin Announces Expansion into Europe; Launches Euro Trading & Malta Office

Global digital asset exchange OKCoin announced on Tuesday it has expanded its services into Europe as well as launched Euro trading and opened its Malta office .OKCoin users outside of the U.S. may now deposit and withdraw euros and all OKCoin users can participate in euro spot trading for leading digital assets, such as Bitcoin, Ethereum, and Bitcoin Cash.

“We will be adding more euro digital asset pairs to OKCoin in the future, so our users should monitor our platform for an up-to-date list. Oh, and did we mention that from now until September 4th, you can deposit and withdraw euros for FREE!”

While sharing more details about the new office, the OKCoin team stated:

“We’ve also opened a brand-new office in Malta, the “Blockchain Island” of the European Union. Our new office is part of the chiliZ Blockchain Campus, an accelerator and hub connecting some of the industry’s largest stakeholders across Asia and Europe. Our new European OKCoin affiliate will feature a tailored set of trading services and digital assets that are compliant with the Virtual Financial Asset Act (“VFAA”), regulated by the Malta Financial Services Authority.”

Speaking about the expansion,  Jovan Gavrilovic, General Manager of Europe at OKCoin, added:

“Europe is essential to the evolution of the cryptocurrency markets. It is home to many progressive ideas for innovating and disrupting the status quo of the global financial system while maintaining a balanced regulatory approach. We are very pleased to bring digital asset trading to the European market in a secure and reliable manner, enabling users to trade digital assets for euro easily and safely.”

Digital Challenger Bank Founders Bank Hires Former Senior Deutsche Bank Exec as CEO

The Founders Bank has appointed Kenan Altunis as Chief Executive Officer. Altunis was most recently Global Co-Head of the Institutional Client Group within Deutsche Bank’s Corporate and Investment Bank where he was responsible for a multibillion-dollar revenue operation and a team of over 1000 people.

Altunis is said to have worked directly with the world’s largest institutional investors and regulatory bodies, and was a member of its Executive Committee, reporting directly to the Deputy CEO of the bank.

Altunis will begin as CEO of Founders Bank upon cessation of his Deutsche Bank commitments in early June 2019.

Based in Malta, the Founders Bank is described as a “corporate challenger bank servicing the tech industry.” This includes blockchain and other emerging technologies. Founders Bank is not yet licensed but is reportedly in the process of obtaining a full EU banking license under the regulation of the MFSA and the European Central Bank

World’s largest crypto exchange Binance is an investor in Founders Bank. In a statement in 2018, Binance said Founders Bank will become the “first stable and high tech banking solution not only focused on founders, but also owned by them, bridging the gap between traditional financial world and innovative crypto companies.”

The current team at Founders Bank is said to contain a diverse group of executives with extensive finance experience including tenures at firms like Barclays, HSBC, Citibank, Bank of America, Royal Bank of Canada, Brevan Howard, KPMG, Mastercard, Amazon, Paypal, and Bitpesa.

Founders bank wants to redefine banking services for the enterprise customer.

Altunis commented on his appointment saying he was excited to migrate from traditional banking to creating a world class challenger bank.

“We will focus on servicing technology companies who find accessing and using existing financial services difficult and cumbersome. These will include companies in emerging technologies, such as blockchain and crypto,” said Altunis.

Changpeng Zhao (‘CZ’), CEO of Binance, commented

“As one of the lead investors of the Founders Bank project, we are committed to developing the ecosystem and supporting infrastructure cornerstones to facilitate growth across the broader industry.”

 

CipherTrace CEO: “It is a constant challenge to keep pace with crypto crimes and scams”

CipherTrace is a cryptocurrency cyber assurance and compliance firm that has recently formed some interesting partnerships. In February, CipherTrace was backed by $15 million in venture funding to help fulfill its mission on crypto security.

In January, CipherTrace published a report on the global cryptocurrency market stating that during 2018 fraudsters and crooks stole $1.7 billion during the year. The firm predicted that crypto fraud will get even bigger as regulators and enforcement officials struggle to keep up with bad actors that are quick to adapt.

While the tools may change, the story remains the same. Criminals will always be looking for ways to separate hard earned money from unsuspecting individuals. Cryptocurrency, and the issuance and trading of these digital assets, are just the newest opportunities for cyber thugs.

But while CipherTrace may drive awareness of the intrinsic risk associated with crypto they are also a facilitator for compliant and regulated digital asset platforms. The digital asset sector of finance is changing and evolving rapidly and CipherTrace is one of the security firms facilitating this charge.

Earlier this month, CipherTrace was hired by the Malta Financial Services Authority (MFSA) to provide compliance monitoring and to assist in better managing operational risks regarding digital assets.  The MFSA said CipherTrace will help to automate regulatory processes and audit the risk management of virtual asset businesses that are licensed in Malta. In effect, a Regtech platform for digital assets that help to ensure that crypto friendly Malta stays within the European Union rules.

CipherTrace also provides crypto services to enforcement officials. Everyone knows the world of crypto can be more than a bit opaque. CipherTrace Financial Investigations helps law enforcement investigate dodgy players in the crypto economy. Their services can de-anonymize individuals and transactions for users of Bitcoin or Ethereum who may want to cover their tracks regarding illicit activities. As governmental agencies move to counter bad actors, CipherTrace is well positioned to provide their services.

Crowdfund Insider recently caught up with Dave Jevans, CEO of CipherTrace.

Jevans has a long history of working in tech including the early days of Apple and Netscape. We asked Jevans how the relationship with the MFSA came about. Jevans said that CipherTrace was invited by the MFSA to speak at the Malta blockchain and virtual currency regulation conference in 2018.  CipherTrace was also invited to Malta this past fall to speak at the Delta conference in Malta. After numerous meetings, and competitive assessments, MFSA chose CipherTrace as their trusted provider of crypto asset compliance monitoring and supervisory technologies for their jurisdiction.

So is CipherTrace providing similar services to other exchanges? Jevans confirmed they were:

“Yes.  CipherTrace also provides crypto asset supervisory technologies to the country of Bermuda.
For cryptocurrency exchanges, CipherTrace provides anti-money laundering services which is a related service,” said Jevans.

Recently, there was an uproar regarding Coinbase’s acquisition of Neutrino, a company that reputedly provided surveillance services for repressive regimes.

Some Coinbase users were outraged by the purchase causing Coinbase to issue a public statement on the matter. There have also been rumors that Neutrino was selling data culled from crypto users. Asked if it was widely known that some crypto analytics/security firms were selling the data, Jevans said it was not and added that it was something they would never do:

“No, it is not widely known. CipherTrace does not, and has never, sold customer data to anyone.”

He clarified that this included governmental agencies.

Unsurprisingly, there is a growing concern by certain policymakers that anonymous cryptocurrencies must be stopped, or at least closely monitored. Jevans had this to say about these concerns:

“Policymakers ought to be concerned about anonymous cryptocurrencies since they can be used to anonymize fraudulent gains, illegal sources of funds, and nuclear proliferation. Cryptocurrency exchanges that support trading pairs with privacy coins should be scrutinized.”

[easy-tweet tweet=”Cryptocurrency exchanges that support trading pairs with privacy coins should be scrutinized” template=”light”]

And  how challenging is for determined governments to track these anonymous cryptocurrencies? Very difficult, according to Jevans but not impossible.

CipherTrace does promote its crypto forensic services for law enforcement so we inquired if he could share which government agencies have you aided in their investigations?

“We cannot comment on government customers nor active investigations. It is public record that we assisted Ontario Superior Court of Justice in Canada’s first cryptocurrency seizure case.”

Some of the nefarious activities are aided by unregulated or “dirty” crypto exchanges. Jevans would not name any names when it came to the jurisdictions which host the biggest abusers but he had this to say:

“Dirty exchanges are not going away but they are being relegated to jurisdictions with poor anti-money laundering laws as we showed in our Q4 Crypto Anti-Money Laundering report. As crypto regulations are widely deployed in Malta, Bermuda, the European Union, and G20 countries, these dirty exchanges will have to move to venues with weak AML controls.”

And what about US federal regulators such as the SEC or FINCEN (US Department of Treasury)? Does CipherTrace have a relationship with them?

“Yes. We are a US company and have business relationships with over a dozen governments globally including many agencies in the US federal government.”

One of the biggest challenges is the fluidity of the marketplace. As one type of scam is uncovered another soon follows. Jevans said that cryptocurrency criminals are innovative and smart.

“It is a constant challenge to keep pace with crypto crimes and scams.  CipherTrace has extensive tradecraft and technology in this area.”

As for the newest types of crypto cons, Jevans said exit scams (raise money, fail, and simply disappear) and smart contract backdoors are two of the latest iterations of crypto fraud. As the saying goes, buyer beware.


Malta Financial Services Authority Partners with CipherTrace to Guard Against Crypto Fraud, Money Laundering

The Malta Financial Services Authority (MFSA) has enlisted CipherTrace Compliance Monitoring to better manage operational risks regarding digital assets. The MFSA is implementing the CipherTrace tool which is designed to continuously rate the risks of cryptocurrency businesses to protect consumers, investors, and business partners.

The MFSA is the single financial regulator of Malta overseeing both the securities industry as well as financial services firms.

Malta has emerged as a blockchain friendly jurisdiction. As part of the European Union, operating a blockchain focused firm in Malta forges a path to the rest of Europe. The MFSA has been at the forefront of embracing digital asset innovation. Malta has proclaimed their Meditteranean country “Blockchain Island.”

CipherTrace provides a tool which to enable the MFSA to better manage risk such as anti-money laundering, KYC plus crypto forensics and “blockchain threat intelligence” solutions.

MFSA Chief Executive Officer, Joseph Cuschieri, said they are strongly aware of the risks associated with money laundering and the financing of terrorism. The decision was made to partner with CipherTrace in order to reduce risks of illicit activities and detecting transactions originated from illegal sources of funds:

“CipherTrace Compliance Monitoring will provide the MFSA with powerful oversight tools to automate regulatory processes and audit the risk management of virtual asset businesses that are licensed in Malta.”

CipherTrace Compliance Monitoring is said to use machine learning to “de-anonymize transactions,” to help regulators evaluate and monitor the trustworthiness of virtual asset businesses. The solution will track risk exposure related to cryptocurrency exchanges, collective investment schemes, initial coin offerings (ICOs) while monitoring the “activities of crypto businesses both pre- as well as post-authorization stage,” explained Dave Jevans, CEO CipherTrace.

Jevans added that cryptocurrency businesses often have difficulty establishing trust and maintaining banking relationships because of their perceived risk.

“Banks and other financial institutions use the CipherTrace Compliance Monitoring solution to help decide which virtual asset businesses to trust as corporate customers. These insights help banks avoid de-risking by turning away valuable customers in this lucrative and fast growing sector.”

CipherTrace calculates the risk level for exchanges, addresses, wallets and other entities based on known associations, criminal addresses, and money laundering services.

CipherTrace also profiles global exchanges, dark markets, mixers, gambling services, high-yield investment products, and ATMs to determine risk levels of transactions based on activity related to suspicious addresses and wallets.

While the numbers remain small, the concern is growing regarding illicit activities facilitated by the buying and selling of digital assets. Numerous jurisdictions have reviewed crypto to assess the current and potential threat affiliated with digital assets.

Malta Actor Says His Name and Image Used to Falsely Promote “Bitcoin Related Scam”

A Maltese-Italian actor and model named Davide Tucci has taken to Facebook to warn the public that his face and name are being used in fake Facebook ads, on websites and and in articles to promote Bitcoin-related scams, Malta Today reports.

According to Tucci in the video:

“Please note I have no association with this whatsoever. I have never engaged into any bitcoin trading, nor did I ever approve of such articles, websites or ads. This is a scam.”

Fake Facebook Ads, Articles in relation to Bankruptcy and Bitcoin Trading.

Please Share and Tag your friends below. Trying to raise awareness:It came to my attention this morning that my image and name are being used in connection with a Bitcoin related scam in the form of fake Facebook advertisements, websites and fake articles. Please note I have nothing whatsoever to do with this, I have never engaged in such tradings, never did I authorise or approve of such material being published or advertised. This is clearly a scam and click-bait, please don’t buy into this. The allegations of bankruptcy particularly are very serious – and I intend to take this seriously by reporting the case to The Malta Police Force’s Cybercrime unit. I have worked really hard throughout the years to get to where I am now and I won’t let my name and image to be used for any form of scam or dishonesty. Thank you to my neighbourhood watch, both friends and fans who have reported this matter to me both personally and on Facebook – it means a lot to have your support. If you see these ads, kindly screenshot and report to Facebook. I will try to keep you updated.

Posted by Davide Tucci on Wednesday, January 9, 2019

Use of falsified “celebrity endorsements” in crypto projects is well-documented.

One feature of Ethereum, a successor of Bitcoin, is that that cryptocurrency network allows anyone to create a crypto-token that they could theoretically sell widely to the public if it is adequately promoted.

Over 100 000 tokens have been created using Ethereum’s portal, and about 2000 now trade on exchanges. Many more have been sold in the ICO phase and are now searching for exchanges to accept them.

The ease of creating tokens made the field competitive very fast, and one way to cut through the promotional clamour is to slap the name of a celebrity onto the project for instant clout.

Alex Tapscott, son of the veteran Toronto business consultant Don Tapscott, disgraced himself and his partner father in late 2017 when he falsely listed four famous blockchain personalities on a promotional deck he circulated to potential investors.

Alex Tapscott was courting the investors to back a project called NextBlock Capital, which he was hoping to sell publicly and expedite into public stock markets via a reverse-takeover in Canada.

Shortly after Tapscott’s misrepresentations were exposed, the Canadian Imperial Bank of Commerce (CIBC) backed out of its plans to back NextbBlock capital in a private placement.

Further investigation of investor decks sent out by Tapscott showed he’d also included a fake photo used to represent an investor who didn’t want his image used.

After the revelations, Tapscott returned investors money and stopped pursuing the listing.

In the Facebook video responding to the fraudulent use of his name and image, the Maltese actor Tucci says he is taking the misrepresentations very seriously:

“I have worked really hard throughout the years to get to where I am now, and I won’t let my name and image to be used for any form of scam or dishonesty. Thank you to my neighbourhood watch, both friends and fans who have reported this matter to me both personally and on Facebook – it means a lot to have your support. If you see these ads, kindly screenshot and report to Facebook.”

Malta Fintech Bankex Set to Launch Security Token Trading Platform

On Thursday, Malta-based fintech BANKEX announced it has launched its own security token trading platform, BANKEX Token Exchange. According to the company, this new platform enables not only the trade of basic pairs of utility tokens but also the trade of complex security tokens connected to real-world assets. While sharing more details about the platform, BANKEX stated:

BANKEX Token Exchange will serve as a secondary market for security tokens and will support ERC-1400 and ST-20 token standards as well as ERC-888 security tokens from BANKEX that incorporate KYC verification methods. The trading platform stores crypto in BANKEX Custody Service, an eminently secure cold storage depository.”

BANKEX reported that over the next year it will make use of a license that its Virtual Financial Assets Act service provider is submitting to the Malta Financial Services Authority. This license is granted only to exchanges that have strong Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures in place. The company also revealed:

BANKEX acquiring a license to list security tokens in full accordance with Maltese legislation is only the first step. In conjunction with this initiative, BANKEX is also working towards getting licenses in Switzerland, South East Asia, the United States, and the Cayman Islands.”

Founded in 2015, BANKEX reported it has developed a crowdsource proof-of-asset protocol of liquidity and an ecosystem built around it. The protocol facilitates digitalization, tokenization, and exchange of real assets.

Our mission is to add liquidity to assets that have an underrated value due to the way that classic financial markets currently operate.”

Malta-Based Digital Asset Exchange OKEx Launches New Product “Perpetual Swap” to Crypto-Base Financial Suite

OKEx, a Malta-based digital assets exchange, announced on Monday the launch of its new product, Perpetual Swap, as part of its crypto-based financial product suites. According to OKEx, users may now perform perpetual swap, futures contract, and spot trading with margin and leverage at one stop.

OKEx described Perpetual Swap as a peer-to-peer, virtual derivative developed by OKEx to enable traders to speculate the direction of the price of digital assets such as Bitcoin. The product has a mechanism very similar to futures contract, but with no expiry, and settlement occurs daily. Each swap contract has a notional value of $100-equivalent BTC. Users may go long a position to profit from the increase of a digital asset’s price, or short a position to profit from the decline of a digital asset’s price, with a leverage of up to 100x. Perpetual Swap’s features include the following:

  • No expiry – positions can be held indefinitely
  • Trade closely to the underlying reference index
  • Leverage level – 1-100x are available
  • Track the price of the spot market through a funding mechanism

Users can also do the following:

  • Mark Price mechanism helps to avoid unnecessary liquidation
  • Lower transaction fees than other similar products in the market
  • Fast settlement – swaps are settled daily, profits can be withdrawn daily;
  • Partial liquidation system – minimizing the market impact during forced liquidation
  • Tiered margin system enables traders to adjust their leverage level according to their risk appetite and market condition

Lennix Lai, Financial Market Director of OKEx, went on to add:

“This marked a key milestone for OKEx. The launch of perpetual swap demonstrated our continuous commitment to build a complete financial ecosystem on blockchain and crypto. With the new offering, investors and traders can select the products which best fit their trading and hedging strategies. However, we would like to remind our users that due to its highly leverage nature, implementing risk control strategies are equally crucial in trading.”

Malta Digital Exchange Signs MOU With P2P Platform finbc to List Security Token FBC

Malta Digital Exchange (MDX), a multi-asset digital exchange, which focuses on security tokens and virtual financial assets (VFA), announced on Wednesday it has signed an MOU with German P2P finance platform finbc for the listing of their security token FBC. According to MDX, finbc will perform a security token offering (STO) and launch one of the first security tokens with its P2P finance platform in early 2019. Under the agreement, the FBC token will be listed as soon as operations commence at the Malta Digital Exchange.

While sharing details about the MOU,  Stefan Grimm, finbc CEO, stated:

“This is a win-win cooperation. On the one hand, not only for private investors but also for the public who will be able to invest in FBC tokens. On the other hand, MDX follows down its path to become a leading securities exchange by enriching its portfolio with another innovative blockchain fintech. Tradability of assets is key to investors. This is why we are happy to jointly contribute to the future success of Security Token Offerings by bringing a credible and promising project with a sustainable business model to one of the most innovative digital exchanges.”

Johan Ditz Lemche, CEO of MDX, went on to add:

“MDX is very pleased that finbc has chosen our platform to offer their security token. finbc has an innovative angle in managing operational assets and general enterprise resource planning via their corporate open peer-to-peer platform, which is in line with the current move towards automating company operations. Partnering with MDX provides finbc with a safe regulatory exchange, where transparency and pricing efficiency are at the forefront.”