A side view on a digital panel merging binary numbers with an integrated circuitIn this issue:

Blockchain Property Records Trial Completed, Energy Grid Project Continues, New Patents Granted

New Stablecoins Announced, New BitLicense Granted, New Crypto Debit Card Launched

Blockchain Capital Markets Solutions Continue to Advance in US and Abroad

Cryptocurrency Enforcement Actions Continue in US and Asia Markets

Blockchain Property Records Trial Completed, Energy Grid Project Continues, New Patents Granted

By: Robert A. Musiala Jr.

According to a press release issued late last week, U.K.-based firm Instant Property Network recently completed a successful simulated trial of a blockchain solution for property sales transactions, powered by the Corda blockchain. A Bloomberg report stated that 40 companies were involved in testing the new platform, including two major global banks. The press release estimated that if the efficiencies demonstrated by the trial were applied to the global property market, it could result in annual savings of approximately $160 billion.

The U.S. Department of Energy (DOE) has begun Phase II of an electrical grid security project that leverages a patent pending blockchain solution to increase cybersecurity in power plants. DOE is working with Colorado-based firm Taekion on the project. According to another recent report, Bitfury and Longenesis have teamed to launch a “blockchain-based consent management system for the healthcare industry” that seeks to improve compliance with the General Data Protection Regulation (GDPR), the Health Insurance Portability and Accountability Act (HIPAA) and other applicable laws. Also this week, the World Economic Forum published an article advocating blockchain as a potential solution for limiting waste and promoting transparency and efficiency in the construction industry.

Late last week, a major global technology firm, a major U.S. bank, a global news organization and a global consulting firm all had patents granted for blockchain-based business solutions. The patents address data management for self-driving vehicles, identity management and validation, authentication of content provider data, and blockchain interoperability.

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New Stablecoins Announced, New BitLicense Granted, New Crypto Debit Card Launched

By: Robert A. Musiala Jr.

Late last week, Canadian cryptocurrency platform Coinsquare announced its plans to launch eCAD, the first stablecoin pegged 1:1 to the Canadian dollar. Similar to most stablecoins, each unit of eCAD cryptocurrency will be backed by a Canadian dollar held in a traditional bank account. In Japan, the fifth-largest bank in the world announced plans to launch its own stablecoin that would be backed 1:1 by Japanese yen. According to reports, the bank is seeking to design functionality that would allow bank customers to use an app to automatically convert bank deposits into the stablecoin.

Earlier this week, Bitstamp, Europe’s largest cryptocurrency exchange, became the 19th company to receive a BitLicense from the New York State Department of Financial Services (DFS). This week DFS also rejected the BitLicense application of Bittrex, a major U.S. cryptocurrency exchange based in Seattle. According to reports, DFS denied the application based on deficiencies in Bittrex’s capital and anti-money laundering requirements.

This week Coinbase announced the launch of Coinbase Card, a card that looks and is used like a traditional debit card in point-of-sale transactions, but that is funded by customers’ Coinbase account balances. According to a Coinbase blog post, the Coinbase card is available to Coinbase customers in the United Kingdom and will be available soon in the European Union. In a final note related to the cryptocurrency exchange industry, the court-appointed monitor of the defunct Canadian exchange QuadrigaCX recently recommended that the exchange should be transitioned from restructuring to bankruptcy proceedings.

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Blockchain Capital Markets Solutions Continue to Advance in US and Abroad

By: Simone O. Otenaike

Late last week, a leading trading services firm and Templum Inc. announced a strategic partnership that allows Templum to expand into the public markets and move toward developing a fully regulated exchange to list and trade digital securities. Subject to Securities and Exchange Commission (SEC) approval, the new public exchange would be SEC-registered and operated by the trading services firm.

On the international front, the Hong Kong Securities and Futures Commission issued a policy statement summarizing the legal and regulatory requirements applicable to security token offerings (STOs). The new guidance offers companies that plan to market or sell STOs in Hong Kong a regulatory framework to evaluate whether security tokens qualify as “securities” under the guidance. The Gibraltar Stock Exchange (GSX) also made news this week with its announcement that financial firms can now list digital or tokenized corporate and convertible bonds, asset-backed and derivative securities, and open-ended and closed-ended funds on its platform. According to reports, membership in the GSX is also now open to licensed financial services firms outside the European Economic Area.

In Bermuda, the Ministry of Finance reportedly approved Velocity Ledger Holdings Limited (VLHL) to conduct an initial coin offering (ICO). The ICO will fund operations for VLHL’s two subsidiaries, VL Financial and Velocity Ledger Technology Limited (VL Tech). VL Financial operates as a digital asset exchange in Bermuda that supports asset-backed investment and real estate tokens, while VL Tech is a private blockchain-enabled platform that operates as Software-as-a-Service. The ICO is expected to commence this month.

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Cryptocurrency Enforcement Actions Continue in US and Asia Markets

By: Jordan R. Silversmith

Earlier this week, a U.S. district court in California sentenced a bitcoin dealer to two years in prison and ordered him to forfeit $823,357 in illicit profits from an unregistered cryptocurrency exchange. Jacob Burrell Campos, a U.S. citizen, pleaded guilty last October, admitting that he operated a bitcoin exchange without registering with the Financial Crimes Enforcement Network (FinCEN) of the Treasury Department and without implementing the required anti-money laundering safeguards. Meanwhile, on April 10, Texas regulators issued an emergency cease and desist order against a cryptocurrency and foreign currency trading platform. According to the regulators’ order, FxBitGlobe, which markets itself as an investment company, published forged government documents, used a fake address and falsely claimed to be a registered broker-dealer.

On Wednesday, Singapore authorities charged two men for promoting cryptocurrency fraud scheme OneCoin. The two men reportedly engaged in, among other things, incorporating a subsidiary to promote OneCoin and signing up new members and taking in investments in exchange for educational courses and OneCoin tokens. Various governments worldwide, including the United States, have issued warnings against OneCoin. In South Korea, officials recently used artificial intelligence to arrest suspects behind a cryptocurrency Ponzi scheme. The scheme reportedly stole 21.2 billion won ($18.3 million) over six months in 2018, but it came to an end when the Seoul Special Judicial Police Bureau for Public Safety trained robots to nab participants in the scheme by using keywords and other clues. And in Japan, a local news outlet reported that G20 member countries will meet on June 8 and 9 in Fukuoka, Japan, to discuss international anti-money laundering regulation with a focus on creating a framework to combat cross-border, international crypto-enabled money laundering and terrorism financing.

A British bank recently issued a study detailing Iranian virtual currency activity and risks posed by Iran to financial institutions. The study noted that, given the current geopolitical environment and the ongoing sanctions against the Iranian government, there has been a movement by both citizens and the state toward use of virtual currency. Finally, a report by a blockchain analytics firm provided details on a recent alleged hack of CoinBene, a large cryptocurrency exchange. According to the report, hackers redirected $105 million in cryptocurrencies from CoinBene to three different addresses using a pattern that indicates an attempt to obfuscate the source of funds and the identity of the alleged hackers.

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