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<img class="alignright wp-image-5551" src="https://theblockchainmonitor.bakerhostetlerblogs.com/wp-content/uploads/sites/24/2019/02/bitcoin-digital-currency-iStock-880896372_1200x630pixel.jpg" alt="shiny bitcoins with stock market background." width="438" height="230" />In this issue:
• <a href="#Cryptocurrency">Cryptocurrency Exchanges Obtain New Licenses Across Globe Amid Market Growth</a>
• <a href="#Corporations">Corporations Continue New Blockchain Pilots, New Market Projections Released</a>
• <a href="#Libra">Libra Faces Skepticism, Virtual Commodity Organization Launches, French Law Set to Take Effect</a>
• <a href="#Exchange">Exchange Hacked, Analysts Warn on Sanctions, Miners Targeted in Iran and China</a>
<a id="Cryptocurrency"></a>Cryptocurrency Exchanges Obtain New Licenses Across Globe Amid Market Growth

By: <a href="https://www.bakerlaw.com/JoannaFWasick">Joanna F. Wasick</a>

The New York State Department of Financial Services (DFS) announced early this week that it approved a virtual currency license for Seed Digital Commodities Market LLC (SCXM), and a virtual currency license and a money transmitter license for Zero Hash LLC. Both companies are subsidiaries of Seed CX Ltd. SCXM will serve as a matching engine and platform for cryptocurrency buyers and sellers. Zero Hash will function as the money transmitter for SCXM’s trading activity. In the announcement, DFS noted it has now approved more than 20 virtual currency businesses. In Europe, Prasos Ltd., a Finland-based cryptocurrency brokerage and exchange firm, was granted a Payment Institution License, enabling it to offer specific fiat currency payment services and to have a customer fund account from a Finnish credit institution. Prasos is only the third cryptocurrency firm in Europe to receive this license.

The Japanese government has reportedly taken major steps to establish an international network for cryptocurrency payments, similar to the SWIFT network used by banks. A person purportedly familiar with the plan stated that it has already been proposed by Japan’s Ministry of Finance and its national regulator, the Financial Services Agency (FSA), and was approved for oversight by the Financial Action Task Force. In related news, the FSA recently announced that 110 cryptocurrency exchanges are in various stages of registration with the Japanese government. This marks a significant change – in 2018, the FSA approved zero such exchanges, and in 2017, approved only 16.

According to a recent report, as of mid-July, the Bitcoin network is moving over $3 billion daily on average – a 210% rise since April. The spike in volume is significantly higher as compared with other cryptocurrencies, such as Ether (which saw a 77% increase over the same time period) and XRP (up 61%).

For more information, please refer to the following links:
<ul>
 	<li><a href="https://www.dfs.ny.gov/reports_and_publications/press_releases/pr1907151">DFS GRANTS LICENSES TO SEED CX COMPANIES TO PROVIDE VIRTUAL CURRENCY SERVICES FOR INSTITUTIONAL CUSTOMERS</a></li>
 	<li><a href="https://www.coindesk.com/crypto-broker-prasos-wins-eu-payment-institution-license">Crypto Broker Prasos Wins EU Payment Institution License</a></li>
 	<li><a href="https://uk.reuters.com/article/uk-japan-cryptocurrency/japan-to-lead-development-of-swift-network-for-cryptocurrency-source-idUKKCN1UD06X">Japan to lead development of SWIFT network for cryptocurrency – source</a></li>
 	<li><a href="https://www.coindesk.com/110-crypto-exchanges-are-reportedly-trying-to-get-licensed-by-japanese-regulators">110 Crypto Exchanges Are Reportedly Trying to Get Licensed in Japan</a></li>
 	<li><a href="https://cointelegraph.com/news/bitcoin-network-is-moving-3-billion-daily-up-210-since-april">Bitcoin Network Is Moving $3 Billion Daily, Up 210% Since April</a></li>
</ul>
<a id="Corporations"></a>Corporations Continue New Blockchain Pilots, New Market Projections Released

By: <a href="https://www.bakerlaw.com/DianaJStern">Diana J. Stern</a>

Name-brand food and telecommunications conglomerates recently announced that they have joined a pilot program to test whether blockchain technology can provide end-to-end supply chain transparency for digital ad spend. The Joint Industry Committee for Web Standards (JICWEBS), a British United digital ad trading standards body, developed the pilot that was first announced in May.

Late last week, the fifth-largest oil and gas company in the world invested in New York blockchain startup LO3. LO3’s Ethereum-based platform, Exergy, aims to facilitate markets for locally produced energy, like windmills or solar panels, where individuals can verify the energy they purchased came from those sources. According to reports, the platform will require tokens; and while LO3’s ICO plans are on hold, the oil and gas investor has the option to convert its investment into tokens when Exergy is launched.

According to a crypto media outlet, a major global technology company has increased its blockchain-related patents by more than 300% this year, with 108 active patent families. In other news, a multinational automation company is reportedly investigating enterprise use cases for blockchain technology, particularly permissioned blockchains, in areas including mobility, supply chain and manufacturing.

A new research report revealed that while blockchain and the self-sovereign identity movement are experiencing an average yearly growth of 35%, less than 10% of dedicated identity apps are expected to use blockchain by 2023. Another recent report projects that the global blockchain and healthcare market will reach more than $1.7 billion in value by 2026.

For more information, please refer to the following links:
<ul>
 	<li><a href="https://marketingland.com/nestle-mcdonalds-virgin-media-first-to-test-jicwebs-blockchain-solution-for-digital-ad-spend-transparency-263814?utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=feed-main">Nestlé, McDonald’s, Virgin Media first to test JICWEBS blockchain solution for digital ad spend transparency</a></li>
 	<li><a href="https://cointelegraph.com/news/mcdonalds-nestle-and-virgin-media-join-blockchain-in-advertising-pilot">McDonald’s, Nestlé and Virgin Media Join Blockchain in Advertising Pilot</a></li>
 	<li><a href="https://www-forbes-com.cdn.ampproject.org/c/s/www.forbes.com/sites/michaeldelcastillo/2019/07/10/shell-invests-in-ethereum-hybrid-giving-real-power-to-the-people/amp/">Shell Invests In Ethereum Hybrid That Gives Real Power To The People</a></li>
 	<li><a href="https://www.forbes.com/sites/benjaminpirus/2019/07/15/siemens-evaluates-blockchain-potential-for-carsharing/#4f0eb1ae6c00">Siemens Evaluates Blockchain Potential For Carsharing</a></li>
 	<li><a href="https://www.investorideas.com/news/2019/technology/07091DigitalID.asp">Digital ID Platforms to be used by 5bn people in 2024, as Emerging Economies go Mobile-First</a></li>
 	<li><a href="https://www.globenewswire.com/news-release/2019/07/16/1883471/0/en/Blockchain-in-Healthcare-Market-Value-Hit-US-1-7-Bn-by-2026.html">Blockchain in Healthcare Market Value Hit US$1.7 Bn by 2026</a></li>
 	<li><a href="https://beincrypto.com/ibms-blockchain-related-patents-have-grown-by-300-this-year/">IBM’s Blockchain-Related Patents Have Grown By 300% This Year</a></li>
</ul>
<a id="Libra"></a>Libra Faces Skepticism, Virtual Commodity Organization Launches, French Law Set to Take Effect

By: <a href="https://www.bakerlaw.com/RobertAMusiala">Robert A. Musiala Jr.</a>

This week, David Marcus, the blockchain lead of the social media giant that intends to launch its own cryptocurrency, Libra, testified in two separate hearings before the United States Senate Committee on Banking, Housing, and Urban Affairs and the United States House of Representatives Financial Services Committee. The day before the first hearing, the U.S. House of Representatives Financial Services Committee circulated draft legislation, titled “Keep Big Tech Out Of Finance Act,” that would prevent large technology firms from acting as financial institutions or issuing digital currencies. Also, U.S. Treasury Secretary Steven Mnuchin held a press conference on the day before the first hearing, where he discussed money laundering and terrorist financing risks related to cryptocurrencies. Later in the week the president of the G7 group of advanced economies held a press conference, where he cited “serious regulatory and systemic concerns” related to Libra.

Late last week, a group of four major cryptocurrency exchanges – Gemini, bitFlyer, Bittrex and Bitstamp – announced the formation of the Virtual Commodity Association, a new self-regulatory organization for the cryptocurrency exchange industry. And in France, the country’s Financial Markets Authority recently took steps toward approving the first group of companies that will operate under a new legal framework, set to take effect at the end of July, that is intended to attract cryptocurrency and blockchain-related businesses to France by simplifying and clarifying applicable regulations.

For more information, please refer to the following links:
<ul>
 	<li><a href="https://www.cnbc.com/2019/07/17/facebook-currency-chief-questioned-at-house-financial-services-hearing.html">Facebook currency chief faces withering questioning from Democrats in Congress</a></li>
 	<li><a href="https://www.banking.senate.gov/imo/media/doc/Marcus%20Testimony%207-16-19.pdf">Testimony of David Marcus, Head of Calibra, Facebook</a></li>
 	<li><a href="https://www.reuters.com/article/us-usa-cryptocurrency-bill/u-s-proposes-barring-big-tech-companies-from-offering-financial-services-digital-currencies-idUSKCN1U90NL">U.S. proposes barring big tech companies from offering financial services, digital currencies</a></li>
 	<li><a href="https://home.treasury.gov/news/press-releases/sm731">White House Press Briefing by Treasury Secretary Steven Mnuchin on Regulatory Issues Associated with Cryptocurrency</a></li>
 	<li><a href="https://www.reuters.com/article/us-g7-economy/g7-urges-strict-libra-regime-eyes-minimum-tax-idUSKCN1UD0MS">G7 urges strict Libra regime, eyes minimum tax</a></li>
 	<li><a href="https://www.law360.com/fintech/articles/1177398/crypto-group-launches-committees-in-bid-to-self-regulate-?nl_pk=d839899d-0537-414a-b7cc-d6d00bb8e8ff&amp;utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=fintech">Crypto Group Launches Committees In Bid To Self-Regulate</a></li>
 	<li><a href="https://www.reuters.com/article/us-crypto-currencies-regulation-france/france-to-approve-first-crypto-issuers-as-new-rules-loom-idUSKCN1UB18P">France to approve first crypto-issuers as new rules loom</a></li>
</ul>
<a id="Exchange"></a>Exchange Hacked, Analysts Warn on Sanctions, Miners Targeted in Iran and China

By: <a href="https://www.bakerlaw.com/SimoneOOtenaike">Simone O. Otenaike</a>

According to a recent report, late last week Japanese crypto-exchange Bitpoint lost $32 million in a hack involving XRP, Bitcoin (BTC), Litecoin (LTC), Ether (ETH) and other cryptocurrencies. After news of the incident, Bitpoint’s parent firm reportedly shed 19% of its shares. In related news, a recent analysis by Coinfirm illustrates the movement of bitcoin stolen from the recent Binance hack into exchanges and potentially into other cryptocurrencies. The Binance hackers have reportedly been able to liquidate at least 1.8087 BTC (21,000.00 USD) on several exchanges.

In a recent report on blockchain technology and economic sanctions, analysts predict that cryptocurrencies may reduce the effectiveness of U.S. economic sanctions, which depend on traditional banks to monitor compliance. Currently, U.S. sanctions can still reach businesses in the cryptocurrency and blockchain space because many blockchain ventures still depend on fiat currency and conventional bank accounts; but the analysts warn that blockchain technology may eventually enable U.S. adversaries to operate entire economies outside of the traditional financial system if regulators cannot harmonize the technology with the traditional financial sector.

According to a recent report, the Iranian government is taking steps to prevent individuals from moving their money from the rial into other currencies, including bitcoin. Iranian government officials are also reportedly concerned that bitcoin miners are abusing Iran’s system of subsidized electricity to earn bitcoin by mining at significantly lower electricity costs. In China, late last week Chinese authorities arrested 22 people and seized roughly 4,000 computers used for bitcoin mining after a local power company reported abnormal electricity usage. The suspects allegedly used theft devices to dodge the power bill and stole power worth nearly 20 million yuan for their bitcoin mining enterprise.

To read more about the topics covered in this week’s post, see the following:
<ul>
 	<li><a href="https://cointelegraph.com/news/japanese-crypto-exchange-bitpoint-suffers-32-million-hack">Japanese Crypto Exchange Bitpoint Suffers $32 Million Hack</a></li>
 	<li><a href="https://www.coindesk.com/hackers-are-turning-binances-stolen-bitcoin-into-fiat">Hackers Are Turning Binance’s Stolen Bitcoin Into Fiat</a></li>
 	<li><a href="https://www.fdd.org/analysis/2019/07/11/crypto-rogues/">Crypto Rogues: U.S. State Adversaries Seeking Blockchain Sanctions Resistance</a></li>
 	<li><a href="https://www.apnews.com/4c9acc13f5f64dd4ae123b596bd6abd9?utm_source=Twitter&amp;utm_medium=AP&amp;utm_campaign=SocialFlow">Bitcoin craze hits Iran as US sanctions squeeze weak economy</a></li>
 	<li><a href="https://cointelegraph.com/news/ex-microsoft-employee-arrested-for-10-million-crypto-theft">Ex-Microsoft Employee Arrested for $10 Million Crypto Theft</a></li>
 	<li><a href="http://www.xinhuanet.com/english/2019-07/12/c_138221299.htm">Chinese police seize 4,000 Bitcoin mining computers over electricity theft</a></li>
</ul>

core/freeform

New York

Crypto and Blockchain Markets Signal Growth Amid Regulator Skepticism, Hacks and Sanctions Warnings