Two Brazilian Banks Reopen Accounts of Local Crypto Exchange to Avoid Fines

Two major Brazilian banks have reopened the banking accounts of one of the local crypto exchanges experiencing banking issues recently, local crypto outlet Portal do Bitcoin reports Wednesday, Oct. 31.

The preliminary decision to reopen accounts in major banks Banco do Brasil and Santander Brasil for local crypto exchange Bitcoin Max was granted by the Federal District Court. The  judge ruled that the mentioned banks failed to notify the exchange of account closure, which was treated as “abusive conduct” violating consumer protection rules. The court then ordered to unlock the accounts within five days.

In case of non-compliance with the injunction, Santander Brasil would have to pay up to 5,000 Brazilian reals (about $1,300), and Banco do Brasil — up to 20,000 Brazilian reals (about $5,400). Leonardo Ranna, a lawyer for the crypto exchange, told local media that the accounts of Bitcoin Max and its partners were subsequently quickly reopened.

However, Portal do Bitcoin stresses that the legal battle is not over as the Federal District Court’s decision is only seen as a “preliminary” kind of injunction. Moreover, Banco do Brasil has also blocked the additional 120,000 Brazilian reals ($32,400) of Bitcoin Max’s funds. The court ordered to return them in 24 hours, according to the report.

As Cointelegraph reported in September,  Brazil’s antitrust regulator, the Administrative Council for Economic Defense (CADE), started inspecting six major national banks, including Banco do Brasil and Santander Brasil, for alleged monopolistic practices in the crypto space. The watchdog tried to reveal whether Brazilian banks deliberately closed the accounts of local crypto exchanges following several complaints.

A month later, in October, CADE sent a questionnaire to ten Brazilian crypto exchanges whose banks accounts have previously been closed, with deadline to respond set for mid-October. The companies were requested to explain how their business functioned in Brazil and clarify if they were unable to open a bank account, or if the account was closed by some financial institution.

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Major Profits for Early Bitcoin Investors, What Will the Next Ten Years Bring?

In investing, what is comfortable is rarely profitable and several findings support this popular claim. Back in 2014, a study The Digital Dividend-First Mover Advantage, published by Harvard Business Review Analytic Services and sponsored by Verizon Enterprise Solutions, found that early adopters of technology—in finance or otherwise, are more likely to experience better business outcomes in terms of revenue and market position.

Needless to say, Bitcoin is a success story for early adopters and has clearly put this assertion to test. Like it has been the case in anything potentially disruptive and against status quo, Bitcoin faced a lot of opposition in early days with some even claiming that the peer-to-peer cash payment system is too libertarian, too rebellious and a tool for money laundering.  It is 2018 but some critics, as the London-based entrepreneur Jez San even say, Bitcoin is “is way too hard to use – it’s so user unfriendly that the man in the street just can’t use it”.

On the other hand, evangelists such as the Winkenvloss Twins who have since made billions and are known serial investors, believe Bitcoin is a trillion-dollar asset waiting to blow up despite price roller-coaster ride since inception back in 2008.

A Bitcoin Success Story

Bitcoin prices have been volatile to say the least. And it was even worse in the early days because despite retailing for cents, liquidity was shallow. Luckily, operators were technology lovers not speculators. In 2011 for example, Bitcoin was cheap retailing at around 30 cents apiece.

An initial purchase of $100 would turn in around 333 BTC. At current market rates, this investment is worth $2.131 million at $6,400. But, since the markets are down 70 percent from their peaks, this $100 purchase would have been worth a massive $6.66 million in late 2017. This $0.30, $1,000, $6,000, $20,000 and $6,000 rise and falls are the hallmarks of a volatile market.

Though the rise has been precipitous, the path has been murky to say the least. And not surprising, those who bought their coins when it was worth cents are not bothered. They have been in the game for a while now they are used to the eruptions and resulting cool-offs.

Take Marshall Hayner for example. An earlier adopter who took a chance with the fledgling technology and started mining Bitcoins back in 2009. He remains a staunch believer of Bitcoin and even with mild market moves, he believes Bitcoin is still a winner:

“I have seen these run-ups and drops in bitcoin and I did not even flinch as a believer in this technology. I really believe that bitcoin is the next digital gold” he told Reuters.

His overview is confirmed by Daniel Peled, an Israeli Entrepreneur who is happy regardless of the next turn of price.

The Trillion-Dollar Market in Waiting

While price and resulting market caps of digital assets are important, investors and traders alike should look at other metrics like use and adoption rate. Bitcoin might be facing some opposition in certain areas because of the global, decentralized nature of its underlying technology. Add that to the fact that money is involved, governments are clamping down on rogue elements. To some  degree, this hampers adoption.

But behind it, its infrastructure is flourishing. As the market tapers off and finds support at $6,000, Bitcoin is poised to take off. This is more so the case once a regulatory balance is struck and developers devise efficient solutions such as the Lightning Network that allow payment channels with micro-transactions at near real time settlement.

Merging all these factors it is easy to see why Bitcoin is here to say. In years to come, it could quickly turn into a store of value or a medium of exchange. Regardless of what it becomes, early investors, or even those that get in now could be set to reap big rewards.

 

Image from Shutterstock

Goldman Sachs is Now Offering Bitcoin (BTC) Derivatives Products, No Ether (ETH) Contracts For Now

/latest/2018/10/goldman-sachs-is-now-offering-bitcoin-btc-derivatives-products-no-ether-eth-contracts-for-now/

Goldman Sachs is Now Offering Bitcoin (BTC) Derivatives Products, No Ether (ETH) Contracts For Now

goldman-sachs-is-now-offering-bitcoin-btc-derivatives-products-no-ether-eth-contracts-for-now

Giant Wall Street investment bank, Goldman Sachs, has reportedly started offering bitcoin (BTC) derivatives products to its clients. At present, the New York-based financial institution is not planning on offering similar contracts for Ether (ETH) or other major cryptocurrencies.

According to TheBlock, Goldman Sachs will not be rushing to launch new crypto-related products, and its bitcoin non-deliverable forward contracts (“a derivative product tied to futures”) is only available to a select few clients of the bank for now.

With over $900 billion in total assets, Goldman Sachs is currently looking into various options which would allow it to offer custody solutions for cryptocurrencies. There had also been reports earlier this month that the multinational financial services company was “actively exploring the creation” of an ether-based non-deliverable forward contract.

Inaccurate Reports Regarding Ether Futures

This was first reported by the Abacus Journal, however, a source closely following Goldman Sachs’ operations told TheBlock that the bank was not planning to introduce any type of derivatives product for ether (anytime soon).

Moreover, it might not be possible at this time to launch an ether-based product as ether futures contracts are not currently issued by any regulated US-based exchange. The Chicago Board Options Exchange (Cboe) Global Markets had said earlier this year that it would soon be introducing ether futures contracts, however, the exchange holding company has not yet followed through with its plans.

Meanwhile, sources familiar with Goldman Sachs’ internal operations have said that the bank’s customers are not really looking for any new crypto-related products at this time.

Coinbase Receives “Qualified Custodian” Status

Although many institutional investors have begun to take more interest in cryptocurrencies, they have not yet made substantial investments in them due to their volatile nature. Institutional clients are also looking for reliable custodial solutions for digital assets.

San Francisco-based crypto exchange, Coinbase, has been actively working to develop custodial solutions for cryptos. Launched in July of 2018, Coinbase Custody has now become an independent qualified custodian under New York State Banking Law.

Coinbase Custody’s qualified custodian status allows the company to offer regulated custodian services for bitcoin (BTC), ripple (XRP), litecoin (LTC), bitcoin cash (BCH), ether (ETH), and ethereum classic (ETC).

BlackRock CEO: Clients Not Interested In Crypto

Although it appears that crypto firms are trying to meet the demands of institutional clients by introducing products specifically for their use, many would-be investors are trying to better understand crypto assets.

Sources close to Goldman Sachs have said that the institution’s clients have been contacting its senior bankers to inquire about how they can “break into the market.”

Interestingly, Larry Fink, the CEO of BlackRock, an American global investment management firm with over $6.2 trillion of assets under management, said in July:

I don’t believe any client has sought out crypto exposure. I’ve not heard from one client who says, ‘I need to be in this.’

Korea’s Top Financial Regulator: Crypto Exchanges Should Face ‘No Problems’ With Banks

The chairman of South Korea’s Financial Services Commission (FSC) has affirmed that crypto exchanges should face no issues with banking provisions, local media platform Token Post reported Oct. 30.

The FSC’s Choi Jong-Ku clarified that banking support would be provided as long as exchanges have adequate anti-money-laundering (AML) safeguards in place and apply robust know-your-customer (KYC) checks.

In particular, Korean banks previously could offer “virtual” accounts to crypto exchanges to provide traders with more anonymity. In January, South Korea had introduced strict AML rules for exchange operators, designed to prevent anonymous trading by stipulating that all accounts be linked  to a ‘real name’ bank account and leading numerous banks to stop providing virtual accounts in order to comply.

Choi’s statement explicitly addressed this mechanism, saying that with adequate security and compliance measures, banks’ provision of the virtual account service faces “no problem.”

The positive statement is reported to have been well received by the Korea Blockchain Association, whose chairman Chin Daeje, affirmed that regulators’ concern over both KYC and AML compliance has been addressed and “resolved” by the domestic exchange sector.

In late summer, Bithumb, one of the country’s largest crypto trading platforms, regained the support of its banking partner Nonghyup after the latter had ceased its services for the exchange in the wake of a high-profile hack. The exchange clarified in a statement that it had regained banking access by following a series of requirements, including a decision “to keep the investor assets separate, and not [to] accept interest or deposits.”

Choi’s remarks come at a pivotal time for the Korean crypto sector, which awaits the possible announcement of a government decision in November over whether or not to repeal the country’s local ban on Initial Coin Offerings (ICOs), which has been in force since September 2017.

October Close May Prove Decisive for Bitcoin Price

Bitcoin’s (BTC) monthly close today may provide a strong directional bias to the leading cryptocurrency.

Notably, things may get tougher for BTC if prices fail to defend the 21-month exponential moving average (EMA), currently at $6,108, as the EMA has been acting as a strong support since June.

This is evident from the fact that price pullbacks witnessed in June, July, and September had ended near the EMA.

Further, occasional dips below the key EMA support have been short-lived. For instance, BTC fell to a low of $5,900 on Aug. 15. Back then, the 21-day EMA was located at $6,042. However, by month’s end, BTC was sitting comfortably above the crucial support. The cryptocurrency breached the EMA support on Oct. 11 but made a quick recovery to $6,800 on Oct. 15.

The price action is telling that the bears have likely run out of steam and the cryptocurrency may have carved out a bottom close to $6,000. Similar sentiments were echoed recently by the likes of billionaire investor Novogratz and Fundstrat’s Tom Lee.

However, that argument would lose credence if prices close today below $6,108, signaling a resumption of the sell-off from the record highs reached in December last year.

Monthly chart

As can be seen, the 5-month and 10-month EMAs produced a bearish cross last month for the first time since 2014, meaning the bears are already in control here.

Hence, a close below the 21-month EMA will likely prove costly.

The prospects of a bullish reversal above $7,400 (September high) would improve if BTC defends the EMA support for the fifth month straight.

View

  • A bearish close below the 21-month EMA may allow a drop to levels below the June low of $5,777.
  • A defense of the crucial support would be encouraging, however, a bullish reversal would be confirmed only if cryptocurrency puts an end to a series of lower highs by moving above $7,400.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin and USD image via Shutterstock; Charts by Trading View

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Venezuela Begins Public Sale of National Cryptocurrency Petro

The Venezuelan government has opened up an exchange desk for the country’s national cryptocurrency at the headquarters of the Superintendency of Cryptoassets. According to the government, investors can now purchase the petro with a number of fiat currencies and cryptocurrencies. Delegates from China have reportedly purchased some with yuan.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Venezuela Starts Selling Petro

Venezuela Begins Public Sale of National Cryptocurrency PetroOn Monday, the Venezuelan government announced that the public can now purchase the country’s national cryptocurrency directly from the Superintendency of Cryptoassets and Related Activities (Sunacrip). Sunacrip is in charge of regulating all crypto-related activities in Venezuela.

The petro was originally backed by only oil. However, its latest whitepaper shows that the digital currency is now also backed by gold, iron, and diamond. The Venezuelan government-backed newspaper Correo del Orinoco wrote:

This Monday the sale of el petro cryptocurrency is successfully launched for all Venezuelans and those who want to make financial transactions digitally through this mechanism.

Venezuela Begins Public Sale of National Cryptocurrency Petro
Tareck El Aissami.

Venezuela’s vice president of the economy, Tareck El Aissami, explained that the petro can currently be acquired with a number of foreign currencies and cryptocurrencies. Accepted fiat currencies include the dollar, yuan, and the euro, he elaborated, adding that accepted cryptocurrencies include BTC, ETH, and XEM.

Buyers can visit the Sunacrip headquarters to purchase the petro with cash. Purchasing with cryptocurrencies can also be done on the petro’s official website, El Aissami noted.

A number of Venezuelan government officials turned up to purchase the petro on Monday. Each was issued a petro certificate at the time of purchase. “Superintendent Joselit Ramírez described the day as a success,” El Aissami tweeted. Ramírez replaced Carlos Vargas as Venezuela’s Superintendent of Cryptoassets in June.

Venezuela Begins Public Sale of National Cryptocurrency Petro
Venezuela’s Minister of Agriculture holding a petro certificate at Sunacrip’s headquarters.

Google Suspends Petro Wallet App

At the time of this writing, the links to download petro wallets for Windows and Linux on the official petro website lead to pages that are “not found” on the website’s server. Only user and install guides are available.

Previously, there was also a petro wallet app on the Google Play store which showed over 5,000 installs and 275 reviews. However, El Aissami explained that “on Oct. 15, Google suspended the wallet,” claiming that the internet giant is checking the wallet’s crypto functionality before reactivating it, Que Pasa publication reported. At the time of this writing, the petro wallet app is no longer listed on the Google Play store.

Venezuela Begins Public Sale of National Cryptocurrency Petro
The petro wallet app page that used to be on Google Play.

Additionally, the Venezuelan government’s own block explorer for the petro currently shows a total of 304 blocks despite the whitepaper describing a blocktime of one block per minute.

More Petro Options Coming Nov. 5

Venezuela Begins Public Sale of National Cryptocurrency Petro
El Aissami showing three petro options.

The public sale of the petro was scheduled for Nov. 5. However, Ramirez explained that the launch was moved forward due to “the fluidity with which events developed and the support of President Nicolás Maduro,” El Universal quoted him.

On Thursday, El Aissami unveiled two more petro options which will be enabled on the Sunacrip website on Nov. 5: Petro Pago (pay) and Petro Ahorro (savings). Noting that he has been meeting with representatives of savings banks to discuss starting petro savings plans, he clarified:

We are in the purchasing stage [of the petro]. Next week will be the savings stage.

Chinese Delegates Bought Petro

Venezuela Begins Public Sale of National Cryptocurrency Petro
A Chinese delegate holding a petro certificate.

Venezuela’s Vice President Delcy Rodríguez has been strengthening ties with China through the Chinese Development Bank as part of the Economic Recovery Program developed by Maduro, according to Correo del Orinoco.

“The delegation from the China Development Research Center attended the initial sale of el petro cryptocurrency and as a sign of confidence several of its members bought the Venezuelan digital currency” with yuan, the publication detailed. Rodríguez tweeted:

Thanks to our brothers from the People’s Republic of China … the first in line to buy petros in yuan.

What do you think of Venezuela’s various petro-related announcements? Let us know in the comments section below.


Images courtesy of Shutterstock, Twitter, Correo del Orinoco, and the Venezuelan government.


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