Bitcoin Dealer Without Money Transmitter License Held ...

Do you need a money transmitter license in California to operate a Bitcoin ATM? /r/Bitcoin

Do you need a money transmitter license in California to operate a Bitcoin ATM? /Bitcoin submitted by BitcoinAllBot to BitcoinAll [link] [comments]

Question: Does a Bitcoin Exchange, developed in NYC, with servers in California, but for Customers in a latin american country, who only exchange that country's Fiat for BTC need a money transmitter license in California? and Bitlicense in NYC? (x-post /r/Bitcoin)

Question: Does a Bitcoin Exchange, developed in NYC, with servers in California, but for Customers in a latin american country, who only exchange that country's Fiat for BTC need a money transmitter license in California? and Bitlicense in NYC? (x-post /Bitcoin) submitted by acoindr to bitcoinxt [link] [comments]

Question: Does a Bitcoin Exchange, developed in NYC, with servers in California, but for Customers in a latin american country, who only exchange that country's Fiat for BTC need a money transmitter license in California? and Bitlicense in NYC? /r/Bitcoin

Question: Does a Bitcoin Exchange, developed in NYC, with servers in California, but for Customers in a latin american country, who only exchange that country's Fiat for BTC need a money transmitter license in California? and Bitlicense in NYC? /Bitcoin submitted by coincrazyy to BitcoinAll [link] [comments]

Subreddit Stats: btc top posts from 2019-01-06 to 2020-01-05 11:19 PDT

Period: 363.85 days
Submissions Comments
Total 1000 86748
Rate (per day) 2.75 237.19
Unique Redditors 317 7747
Combined Score 194633 356658

Top Submitters' Top Submissions

  1. 31014 points, 162 submissions: Egon_1
    1. Vitalik Buterin to Core Maxi: “ok bitcoiner” .... (515 points, 206 comments)
    2. These men are serving life without parole in max security prison for nonviolent drug offenses. They helped me through a difficult time in a very dark place. I hope 2019 was their last year locked away from their loved ones. FreeRoss.org/lifers/ Happy New Year. (502 points, 237 comments)
    3. "It’s official Burger King just accepted Bitcoin Cash and GoC token as a payment option in Slovenia." (423 points, 112 comments)
    4. "HOLY SATOSHI! 😱😱 I did it! A smart card that produces valid BitcoinCash signatures. Who would love to pay with a card—to a phone?? Tap took less than a second!👟..." (368 points, 105 comments)
    5. Chrome 'Has Become Surveillance Software. It's Time to Switch' -> Brave to support BCH! (330 points, 97 comments)
    6. Gavin Andresen (2017): "Running a network near 100% capacity is irresponsible engineering... " (316 points, 117 comments)
    7. "Evidently @github has banned all the Iranian users without an ability for them to download their repositories. A service like Github must be a public good and must not be controlled by a centralized entity. Another great example of why we as a society need to make web3 a reality" (314 points, 117 comments)
    8. Roger Ver: "Bitcoin Cash acceptance is coming to thousands of physical shops in Korea" (313 points, 120 comments)
    9. Paul Sztorc: “Will people really spend $70-$700 to open/modify a lightning channel when there's an Altcoin down the street which will process a (USD-denominated) payment for $0.05 ? Many people seem to think yes but honestly I just don't get it” (306 points, 225 comments)
    10. Food For Thought (303 points, 105 comments)
  2. 29021 points, 157 submissions: MemoryDealers
    1. Bitcoin Cash is Lightning Fast! (No editing needed) (436 points, 616 comments)
    2. Brains..... (423 points, 94 comments)
    3. Meanwhile in Hong Kong (409 points, 77 comments)
    4. Ross Ulbricht has served 6 years in federal prison. (382 points, 156 comments)
    5. Just another day at the Bitcoin Cash accepting super market in Slovenia. (369 points, 183 comments)
    6. Why I'm not a fan of the SV community: My recent bill for defending their frivolous lawsuit against open source software developers. (369 points, 207 comments)
    7. History Reminder: (354 points, 245 comments)
    8. It's more decentralized this way. (341 points, 177 comments)
    9. The new Bitcoin Cash wallet is so fast!!!!! (327 points, 197 comments)
    10. The IRS wants to subpoena Apple and Google to see if you have downloaded crypto currency apps. (324 points, 178 comments)
  3. 6909 points, 37 submissions: BitcoinXio
    1. Tim Pool on Twitter: “How the fuck are people justifying creating a world like the one's depicted in Fahrenheit 451 and 1984? You realize that censorship and banning information was a key aspect of the dystopian nightmare right?” (435 points, 75 comments)
    2. The creator of the now famous HODL meme says that the HODL term has been corrupted and doesn’t mean what he intended; also mentions that the purpose of Bitcoin is to spend it and that BTC has lost its value proposition. (394 points, 172 comments)
    3. Erik Voorhees on Twitter: “I wonder if you realize that if Bitcoin didn’t work well as a payment system in the early days it likely would not have taken off. Many (most?) people found the concept of instant borderless payments captivating and inspiring. “Just hold this stuff” not sufficient.” (302 points, 66 comments)
    4. Bitfinex caught paying a company to astroturf on social media including Reddit, Twitter, Medium and other platforms (285 points, 86 comments)
    5. WARNING: If you try to use the Lightning Network you are at extremely HIGH RISK of losing funds and is not recommended or safe to do at this time or for the foreseeable future (274 points, 168 comments)
    6. Craig Wright seems to have rage quit Twitter (252 points, 172 comments)
    7. No surprise here: Samson Mow among other BTC maxi trolls harassed people to the point of breakdown (with rape threats, etc) (249 points, 85 comments)
    8. On Twitter: “PSA: The Lightning Network is being heavily data mined right now. Opening channels allows anyone to cluster your wallet and associate your keys with your IP address.” (228 points, 102 comments)
    9. btc is being targeted and attacked, yet again (220 points, 172 comments)
    10. Brian Armstrong CEO of Coinbase using Bitcoin Cash (BCH) to pay for food, video in tweet (219 points, 66 comments)
  4. 6023 points, 34 submissions: money78
    1. BSV in a nutshell... (274 points, 60 comments)
    2. There is something going on with @Bitcoin twitter account: 1/ The URL of the white paper has been changed from bitcoin.com into bitcoin.org! 2/ @Bitcoin has unfollowed all other BCH related accounts. 3/ Most of the posts that refer to "bitcoin cash" have been deleted?!! Is it hacked again?! (269 points, 312 comments)
    3. "Not a huge @rogerkver fan and never really used $BCH. But he wiped up the floor with @ToneVays in Malta, and even if you happen to despise BCH, it’s foolish and shortsighted not to take these criticisms seriously. $BTC is very expensive and very slow." (262 points, 130 comments)
    4. Jonathan Toomim: "At 32 MB, we can handle something like 30% of Venezuela's population using BCH 2x per day. Even if that's all BCH ever achieved, I'd call that a resounding success; that's 9 million people raised out of poverty. Not a bad accomplishment for a hundred thousand internet geeks." (253 points, 170 comments)
    5. Jonathan Toomim: "BCH will not allow block sizes that are large enough to wreak havoc. We do our capacity engineering before lifting the capacity limits. BCH's limit is 32 MB, which the network can handle. BSV does not share this approach, and raises limits before improving actual capacity." (253 points, 255 comments)
    6. What Bitcoin Cash has accomplished so far 💪 (247 points, 55 comments)
    7. Which one is false advertising and misleading people?! Bitcoin.com or Bitcoin.org (232 points, 90 comments)
    8. A message from Lightning Labs: "Don't put more money on lightning than you're willing to lose!" (216 points, 118 comments)
    9. Silk Road’s Ross Ulbricht thanks Bitcoin Cash’s [BCH] Roger Ver for campaigning for his release (211 points, 29 comments)
    10. This account just donated more than $6600 worth of BCH via @tipprbot to multiple organizations! (205 points, 62 comments)
  5. 4514 points, 22 submissions: unstoppable-cash
    1. Reminder: bitcoin mods removed top post: "The rich don't need Bitcoin. The poor do" (436 points, 89 comments)
    2. Peter R. Rizun: "LN User walks into a bank, says "I need a loan..." (371 points, 152 comments)
    3. It was SO simple... Satoshi had the answer to prevent full-blocks back in 2010! (307 points, 150 comments)
    4. REMINDER: "Bitcoin isn't for people that live on less than $2/day" -Samson Mow, CSO of BlockStream (267 points, 98 comments)
    5. "F'g insane... waited 5 hrs and still not 1 confirmation. How does anyone use BTC over BCH BitcoinCash?" (258 points, 222 comments)
    6. Irony:"Ave person won't be running LN routing node" But CORE/BTC said big-blocks bad since everyone can't run their own node (256 points, 161 comments)
    7. BitPay: "The Wikimedia Foundation had been accepting Bitcoin for several years but recently switched pmt processors to BitPay so they can now accept Bitcoin Cash" (249 points, 61 comments)
    8. FreeTrader: "Decentralization is dependent on widespread usage..." (195 points, 57 comments)
    9. The FLIPPENING: Fiat->OPEN Peer-to-Peer Electronic Cash! Naomi Brockwell earning more via BitBacker than Patreon! (193 points, 12 comments)
    10. LN Commentary from a guy that knows a thing or 2 about Bitcoin (Gavin Andresen-LEAD developer after Satoshi left in 2010) (182 points, 80 comments)
  6. 3075 points, 13 submissions: BeijingBitcoins
    1. Last night's BCH & BTC meetups in Tokyo were both at the same restaurant (Two Dogs). We joined forces for this group photo! (410 points, 166 comments)
    2. Chess.com used to accept Bitcoin payments but, like many other businesses, disabled the option. After some DMs with an admin there, I'm pleased to announce that they now accept Bitcoin Cash! (354 points, 62 comments)
    3. WSJ: Bitfinex Used Tether Reserves to Mask Missing $850 Million, Probe Finds (348 points, 191 comments)
    4. Bitcoiners: Then and Now [MEME CONTEST - details in comments] (323 points, 72 comments)
    5. I'd post this to /Bitcoin but they would just remove it right away (also I'm banned) (320 points, 124 comments)
    6. So this is happening at the big protest in Hong Kong right now (270 points, 45 comments)
    7. /Bitcoin mods are censoring posts that explain why BitPay has to charge an additional fee when accepting BTC payments (219 points, 110 comments)
    8. The guy who won this week's MillionaireMakers drawing has received ~$55 in BCH and ~$30 in BTC. It will cost him less than $0.01 to move the BCH, but $6.16 (20%) in fees to move the BTC. (164 points, 100 comments)
    9. The Bitcoin whitepaper was published 11 years ago today. Check out this comic version of the whitepaper, one of the best "ELI5" explanations out there. (153 points, 12 comments)
    10. Two Years™ is the new 18 Months™ (142 points, 113 comments)
  7. 2899 points, 18 submissions: jessquit
    1. Oh, the horror! (271 points, 99 comments)
    2. A few days ago I caught flak for reposting a set of graphs that didn't have their x-axes correctly labeled or scaled. tvand13 made an updated graph with correct labeling and scaling. I am reposting it as I promised. I invite the viewer to draw their own conclusions. (214 points, 195 comments)
    3. Do you think Bitcoin needs to increase the block size? You're in luck! It already did: Bitcoin BCH. Avoid the upcoming controversial BTC block size debate by trading your broken Bitcoin BTC for upgraded Bitcoin BCH now. (209 points, 194 comments)
    4. Master list of evidence regarding Bitcoin's hijacking and takeover by Blockstream (185 points, 113 comments)
    5. PSA: BTC not working so great? Bitcoin upgraded in 2017. The upgraded Bitcoin is called BCH. There's still time to upgrade! (185 points, 192 comments)
    6. Nobody uses Bitcoin Cash (182 points, 88 comments)
    7. Double-spend proofs, SPV fraud proofs, and Cashfusion improvements all on the same day! 🏅 BCH PLS! 🏅 (165 points, 36 comments)
    8. [repost] a reminder on how btc and Bitcoin Cash came to be (150 points, 102 comments)
    9. Holy shit the entire "negative with gold" sub has become a shrine devoted to the guilded astroturfing going on in rbtc (144 points, 194 comments)
    10. This sub is the only sub in all of Reddit that allows truly uncensored discussion of BTC. If it turns out that most of that uncensored discussion is negative, DON'T BLAME US. (143 points, 205 comments)
  8. 2839 points, 13 submissions: SwedishSalsa
    1. With Bitcoin, for the first time in modern history, we have a way to opt out. (356 points, 100 comments)
    2. In this age of rampant censorship and control, this is why I love Bitcoin. (347 points, 126 comments)
    3. The crypto expert (303 points, 29 comments)
    4. Satoshi reply to Mike Hearn, April 2009. Everybody, especially newcomers and r-bitcoin-readers should take a step back and read this. (284 points, 219 comments)
    5. Bitcoin Cash looking good lately. (235 points, 33 comments)
    6. Roger Ver bad (230 points, 61 comments)
    7. History of the BTC scaling debate (186 points, 54 comments)
    8. MFW i read Luke Jr wants to limit BTC blocks to 300k. (183 points, 116 comments)
    9. Meanwhile over at bitcoinsv... (163 points, 139 comments)
    10. Listen people... (155 points, 16 comments)
  9. 2204 points, 10 submissions: increaseblocks
    1. China bans Bitcoin again, and again, and again (426 points, 56 comments)
    2. China bans Bitcoin (again) (292 points, 35 comments)
    3. Bitcoin Cash Network has now been upgraded! (238 points, 67 comments)
    4. So you want small blocks with high fees to validate your own on chain transactions that happen OFF CHAIN? (212 points, 112 comments)
    5. It’s happening - BTC dev Luke jr writing code to Bitcoin BTC codebase to fork to lower the block size to 300kb! (204 points, 127 comments)
    6. Former BTC maximalist admits that maxi's lied cheated and stealed to get SegWit and Lightning (201 points, 135 comments)
    7. Just 18 more months to go! (172 points, 86 comments)
    8. Bitcoin Cash ring - F*CK BANKS (167 points, 51 comments)
    9. LTC Foundation chat leaked: no evidence of development, lack of transparency (155 points, 83 comments)
    10. A single person controls nearly half of all the Lightning Network’s capacity (137 points, 109 comments)
  10. 2138 points, 12 submissions: JonyRotten
    1. 'Craig Is a Liar' – Early Adopter Proves Ownership of Bitcoin Address Claimed by Craig Wright (309 points, 165 comments)
    2. 200,000 People Have Signed Ross Ulbricht's Clemency Petition (236 points, 102 comments)
    3. Street Artist Hides $1,000 in BTC Inside a Mural Depicting Paris Protests (236 points, 56 comments)
    4. Craig Wright Ordered to Produce a List of Early Bitcoin Addresses in Kleiman Lawsuit (189 points, 66 comments)
    5. Ross Ulbricht Clemency Petition Gathers 250,000 Signatures (163 points, 24 comments)
    6. Ross Ulbricht Letter Questions the Wisdom of Imprisoning Non-Violent Offenders (160 points, 50 comments)
    7. Expert Witness in Satoshi Case Claims Dr Wright's Documents Were Doctored (155 points, 44 comments)
    8. California City Official Uses Bitcoin Cash to Purchase Cannabis (151 points, 36 comments)
    9. Money Transmitter License Not Required for Crypto Businesses in Pennsylvania (141 points, 9 comments)
    10. McAfee to Launch Decentralized Token Exchange With No Restrictions (137 points, 35 comments)

Top Commenters

  1. jessquit (16708 points, 2083 comments)
  2. Ant-n (7878 points, 1517 comments)
  3. MemoryDealers (7366 points, 360 comments)
  4. Egon_1 (6205 points, 1001 comments)
  5. 500239 (5745 points, 735 comments)
  6. BitcoinXio (4640 points, 311 comments)
  7. LovelyDay (4353 points, 457 comments)
  8. chainxor (4293 points, 505 comments)
  9. MobTwo (3420 points, 174 comments)
  10. ShadowOfHarbringer (3388 points, 478 comments)

Top Submissions

  1. The perfect crypto t-shirt by Korben (742 points, 68 comments)
  2. The future of Libra Coin by themadscientistt (722 points, 87 comments)
  3. when you become a crypto trader... by forberniesnow (675 points, 54 comments)
  4. A Reminder Why You Shouldn’t Use Google. by InMyDayTVwasBooks (637 points, 209 comments)
  5. Imagine if in 2000 Apple just sat around all day shit-talking Microsoft. Apple would have never gone anywhere. Apple succeeded because they learned from their mistakes, improved, and got better. BCH should do the same. by guyfawkesfp (552 points, 255 comments)
  6. Bitcoin made The Simpsons intro! Sorry for the potato quality by Johans_wilgat (521 points, 44 comments)
  7. Vitalik Buterin to Core Maxi: “ok bitcoiner” .... by Egon_1 (515 points, 206 comments)
  8. Can't stop won't stop by Greentoboggan (514 points, 78 comments)
  9. These men are serving life without parole in max security prison for nonviolent drug offenses. They helped me through a difficult time in a very dark place. I hope 2019 was their last year locked away from their loved ones. FreeRoss.org/lifers/ Happy New Year. by Egon_1 (502 points, 237 comments)
  10. Blockchain? by unesgt (479 points, 103 comments)

Top Comments

  1. 211 points: fireduck's comment in John Mcafee on the run from IRS Tax Evasion charges, running 2020 Presidential Campaign from Venezuela in Exile
  2. 203 points: WalterRothbard's comment in I am a Bitcoin supporter and developer, and I'm starting to think that Bitcoin Cash could be better, but I have some concerns, is anyone willing to discuss them?
  3. 179 points: Chris_Pacia's comment in The BSV chain has just experienced a 6-block reorg
  4. 163 points: YourBodyIsBCHn's comment in I made this account specifically to tip in nsfw/gonewild subreddits
  5. 161 points: BeijingBitcoins's comment in Last night's BCH & BTC meetups in Tokyo were both at the same restaurant (Two Dogs). We joined forces for this group photo!
  6. 156 points: hawks5999's comment in You can’t make this stuff up. This is how BTC supporters actually think. From bitcoin: “What you can do to make BTC better: check twice if you really need to use it!” 🤦🏻‍♂️
  7. 155 points: lowstrife's comment in Steve Wozniak Sold His Bitcoin at Its Peak $20,000 Valuation
  8. 151 points: kdawgud's comment in The government is taking away basic freedoms we each deserve
  9. 147 points: m4ktub1st's comment in BCH suffered a 51% attack by colluding miners to re-org the chain in order to reverse transactions - why is nobody talking about this? Dangerous precident
  10. 147 points: todu's comment in Why I'm not a fan of the SV community: My recent bill for defending their frivolous lawsuit against open source software developers.
Generated with BBoe's Subreddit Stats
submitted by subreddit_stats to subreddit_stats [link] [comments]

Playing with fire with FinCen and SEC, Binance may face a hefty penalty again after already losing 50 percent of its trading business

On 14 June, Binance announced that it “constantly reviews user accounts to improve (their) platform security and to comply with global compliance requirements”, mentioning that “Binance is unable to provide services to any U.S. person” in the latest “Binance Terms of Use” attached within the announcement.
According to the data from a third-party traffic statistics website, Alexa, users in the U.S. form the biggest user group of Binance, accounting for about 25% of the total visitor traffic.
In the forecast of Binance’s user scale compiled by The Block, the largest traffic is dominated by users in the U.S., surpassing the total of the ones from the second place to the fifth place.
Also, considering that the scale of digital asset trading for the users in the U.S. far exceeds that of the users of many other countries, it could mean that Binance may have already lost 50 % of the business income by losing users in the U.S. Apparently, such an announcement by Binance to stop providing services to users in the U.S. means Binance has no other alternative but “seek to live on.”
So, what are the specific requirements of the U.S. for digital asset exchanges and which of the regulatory red lines of the U.S. did Binance cross?
Compliance issues relating to operation permission of digital asset exchanges
In the U.S., the entry barrier for obtaining a business license to operate a digital asset exchange is not high. Apart from the special licencing requirements of individual states such as New York, most of the states generally grant licences to digital asset exchanges through the issuance of a “Money Transmitter License” (MTL).
Each state has different requirements for MTL applications. Some of the main common requirements are:
Filling out the application form, including business address, tax identification number, social security number and statement of net assets of the owneproprietor Paying the relevant fees for the licence application Meeting the minimum net assets requirements stipulated by the state Completing a background check Providing a form of guarantee, such as security bonds
It is worth noting that not all states are explicitly using MTL to handle the issues around operation permission of digital asset exchanges. For instance, New Hampshire passed a new law on 12 March 2017, announcing that trading parties of digital assets in that state would not be bound by MTL. Also, Montana has not yet set up MTL, keeping an open attitude towards the currency trading business.
On top of obtaining the MTL in each state, enterprises are also required to complete the registration of “Money Services Business” (MSB) on the federal level FinCEN (Financial Crimes Enforcement Network of the U.S. Treasury Department) issued the “Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies” on 18 March 2013. On the federal level, the guideline requires any enterprise involved in virtual currency services to complete the MSB registration and perform the corresponding compliance responsibilities. The main responsibility of a registered enterprise is to establish anti-money laundering procedures and reporting systems.
However, California is an exception. Enterprises in California would only need to complete the MSB registration on the federal level and they do not need to apply for the MTL in California.
Any enterprise operating in New York must obtain a virtual currency business license, Bitlicense, issued in New York
Early in July 2014, the New York State Department of Financial Services (NYSDFS) has specially designed and launched the BitLicense, stipulating that any institutions participating in a business relevant to virtual currency (virtual currency transfer, virtual currency trust, provision of virtual currency trading services, issuance or management of virtual currencies) must obtain a BitLicense.
To date, the NYSDFS has issued 19 Bitlicenses. Among them includes exchanges such as Coinbase (January 2017), BitFlyer (July 2017), Genesis Global Trading (May 2018) and Bitstamp (April 2019).
Solely from the perspective of operation permission, Binance has yet to complete the MSB registration of FinCEN (its partner, BAM Trading, has completed the MSB registration). This means that Binance is not eligible to operate a digital asset exchange in the U.S. FinCEN has the rights to prosecute Binance based on its failure to fulfil the relevant ‘anti-money laundering’ regulatory requirements.
Compliance issues relating to online assets
With the further development of the digital asset market, ICO has released loads of “digital assets” that have characteristics of a “security” into the trading markets. The Securities and Exchange Commission (SEC) has proposed more comprehensive compliance requirements for digital asset exchanges. The core of the requirements is reflected in the restrictions of offering digital assets trading service.
In the last two years, the SEC has reiterated on many occasions that digital assets that have characteristics of a security should not be traded on a digital asset exchange
In August 2017, when the development of ICO was at its peak, the SEC issued an investor bulletin “Investor Bulletin: Initial Coin Offerings” on its website and published an investigation report of the DAO. It determined that the DAO tokens were considered ‘marketable securities’, stressing that all digital assets considered ‘marketable securities’ would be incorporated into the SEC regulatory system, bound by the U.S. federal securities law. Soon after, the SEC also declared and stressed that “(if) a platform offers trading of digital assets that are securities and operates as an “exchange,” as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”
On 16 November 2018, the SEC issued a “Statement on Digital Asset Securities Issuance and Trading,” in which the SEC used five real case studies to conduct exemplary penalty rulings on the initial offers and sales of digital asset securities, including those issued in ICOs, relevant cryptocurrency exchanges, investment management tools, ICO platforms and so on. The statement further reiterates that exchanges cannot provide trading services for digital assets that have characteristics of a security.
On 3 April 2019, the SEC issued the “Framework for ‘Investment Contract’ Analysis of Digital Assets” to further elucidate the evaluation criteria for determining whether a digital asset is a security and providing guiding opinions on the compliance of the issuance, sales, holding procedures of digital assets.
As of now, only a small number of digital assets, such as BTC, ETH, etc. meet the SEC’s requirement of “non-securities assets.” The potentially “compliant” digital assets are less than 20.
Early in March 2014, the Inland Revenue Service (IRS) has stated that Bitcoin will be treated as a legal property and will be subject to taxes. In September 2015, the U.S. Commodity Futures Trading Commission (CFTC) stated that Bitcoin is a commodity and will be treated as a “property” by the IRS for tax purposes.
On 15 June 2018, William Hinman, Director of the Corporate Finance Division of the SEC, said at the Cryptocurrency Summit held in San Francisco that BTC and ETH are not securities. Nevertheless, many ICO tokens fall under the securities category.
So far, only BTC and ETH have received approval and recognition of the U.S. regulatory authority as a “non-securities asset.”
Since July 2018, the SEC has investigated more than ten types of digital assets, one after another, and ruled that they were securities and had to be incorporated into the SEC regulatory system. It prosecuted and punished those who had contravened the issuance and trading requirements of the securities laws.
Although there are still many digital assets that have yet to be characterised as “securities”, it is extremely difficult to be characterised as a “non-securities asset” based on the evaluation criteria announced by the SEC. As the SEC’s spokesperson has reiterated many times, they believe the majority of ICO tokens are securities.
Under the stipulated requirements of the SEC, Coinbase, a leading U.S. exchange, has withdrawn a batch of digital assets. The assets withdrawn included digital assets that had been characterised as “securities” as well as those that have high risks of being characterised as “securities.” However, it is worth noting that although the risk to be characterised as “securities” for more than ten types of digital assets, which have not been explicitly required by SEC to be withdrawn, is relatively small, they are not entirely safe. With the further escalation of the SEC’s investigations, they could still be characterised as securities and be held accountable for violating their responsibilities. However, this requires further guidance from the SEC.
*Coinbase’s 14 types of digital assets that have yet to be requested for withdrawal
Poloniex announced on 16 May that it would stop providing services for nine digital assets, including Ardor (ARDR), Bytecoin (BCN), etc. under the compliance guidelines of the SEC. On 7 June, Bittrex also announced that it would stop providing trading services to U.S. users for 32 digital assets. The action of the SEC on its regulatory guidance was further reinforced apparently.
In fact, it is not the first time that these two exchanges have withdrawn digital assets under regulatory requirements. Since the rapid development of digital assets driven by ICO in 2017, Poloniex and Bittrex were once leading exchanges for ICO tokens, providing comprehensive trading services for digital assets. However, after the SEC reiterated its compliance requirements, Poloniex and Bittrex have withdrawn a considerable amount of assets in the past year to meet the compliance requirements.
In conclusion, the takeaways that we have got are as follows: Under the existing U.S. regulatory requirements of digital assets, after obtaining the basic entry licences (MSB, MTL), exchanges could either choose the “compliant asset” solution of Coinbase and only list a small number of digital assets that do not have apparent characteristics of a security, and at all times prepare to withdraw any asset later characterised as “securities” by the SECs; or choose to be like OKEx and Huobi and make it clear they would “not provide services to any U.S. users” at the start.
Binance has been providing a large number of digital assets that have characteristics of a security to U.S users without a U.S. securities exchange licence, so it has already contravened the SEC regulatory requirements.
On top of that, it is also worth noting that the rapid development of Binance has been achieved precisely through the behaviours of “contrary to regulations” and “committing crimes.” Amid the blocking of several pioneering exchanges, such as OKCoin, Huobi, etc. providing services to Chinese users in the Chinese market under new laws from the regulatory authorities, Binance leapfrogged the competition and began to dominate the Chinese market. Similarly, Binance’s rapid growth in the U.S. market is mainly due to its domination of the traffic of digital assets withdrawn by Poloniex and Bittrex. One can say that Binance not only has weak awareness of compliance issues, but it is also indeed “playing with fire” with the U.S. regulators.
In April 2018, the New York State Office of Attorney General (OAG) requested 13 digital asset exchanges, including Binance, to prepare for investigations, indicating it would initiate an investigation in relations to company ownership, leadership, operating conditions, service terms, trading volume, relationships with financial institutions, etc. Many exchanges, including Gemini, Bittrex, Poloniex, BitFlyer, Bitfinex, and so on, proactively acknowledged and replied in the first instance upon receipt of the investigation notice. However, Binance had hardly any action.
Binance has been illegally operating in the U.S. for almost two years. It has not yet fulfilled the FinCEN and MSB registration requirements. Moreover, it has also neglected the SEC announcements and OAG investigation summons on several occasions. The ultimate announcement of exiting the U.S. market may be due to the tremendous pressure imposed by the U.S. regulators.
In fact, the SEC executives have recently stressed that “exchanges of IEO in the U.S. market are facing legal risks and the SEC would soon crack down on these illegal activities” on numerous occasions. These were clear indications of imposing pressure on Binance.
Regarding the SEC’s rulings on illegal digital asset exchanges, EtherDelta and investment management platform, Crypto Asset Management, it may not be easy for Binance to “fully exit” from the U.S. market. It may be faced with a hefty penalty. Once there are any compensation claims by the U.S. users for losses incurred in the trading of assets at Binance, it would be dragged into a difficult compensation dilemma. It would undoubtedly be a double blow for Binance that has just been held accountable for the losses incurred in a theft of 7,000 BTC.
Coincidentally, Binance was tossed out of Japan because of compliance issues. In March 2018, the Financial Services Agency of Japan officially issued a stern warning to Binance, which was boldly providing services to Japanese users without registering for a digital asset exchange licence in Japan. Binance was forced to relocate to Malta instead. Binance may have to bear hefty penalties arising from challenging the compliance requirements after it had lost important markets due to consecutive compliance issues.
The rise of Binance was attributed to its bold and valiant style, grasping the opportunity created in the vacuum period of government regulation, breaking compliance requirements and rapidly dominating the market to obtain user traffic. For a while, it gained considerable advantages in the early, barbaric growth stage of the industry. Nonetheless, under the increasingly comprehensive regulatory compliance system for global digital asset markets, Binance, which has constantly been “evading regulation” and “resisting supervision” would undoubtedly face enormous survival challenges, notwithstanding that it would lose far more than 50 per cent of the market share.
https://www.asiacryptotoday.com/playing-with-fire-with-fincen-and-sec-binance-may-face-a-hefty-penalty-again-after-already-losing-50-percent-of-its-trading-business/
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Ask Roxy: Should I accept payment in bitcoins?

Ask Roxy: Should I accept payment in bitcoins? submitted by allinfinite to Bitcoin [link] [comments]

Crypto ‘Exchange of Exchanges’ ShortHop Expands to 7 US States

Crypto ‘Exchange of Exchanges’ ShortHop Expands to 7 US States

https://preview.redd.it/jvp4ecyji3j31.png?width=860&format=png&auto=webp&s=c9eaf7617de65fa6822d20c7bd01593cfa275e6d
ShortHop, an “exchange of exchanges” for cryptocurrency trading, has launched in seven additional U.S. states.
Revealed exclusively to CoinDesk, the exchange and brokerage has opened for business in Indiana, Massachusetts, Nevada, New Jersey, Rhode Island, Arizona and Montana. The Wilmington, Del.-based ShortHop was already live in California, Washington and Illinois.
While the exchange’s parent company, technology provider Velocity Markets, is registered as a money services business (MSB) with the Financial Crimes Enforcement Network (FinCEN), ShortHop had to apply for money transmitter licenses in each state where it does business. The company also expects to be licensed in Utah and Pennsylvania next week.
As a “spot fill market,” ShortHop allows customers to transact digital asset listings from multiple order books on one screen in addition to its own orders to provide customers with the lowest price, said Velocity Markets CEO Jonathan Kelfer.
“You might find that when you go on Binance, the spot price for bitcoin is the quoted price. When you go on Gemini it’s the quoted price there as well,” Kelfer said, by way of example. “We’ll use that in aggregate to get the best price across the ecosystem.”
In this way, the company’s model resembles those of Voyager and Fidelity Digital Asset Services, both of which act as brokers, helping customers find the best deals in a highly fragmented market. The difference is that ShortHop also has its own exchange.
“ShortHop is a spot market first, but we’re aggregating liquidity across the ecosystem,” Kelfer said, adding that the service is currently plugged into a total of eight exchanges and OTC desks.
ShortHop’s organic orders get treated like any other order on the marketplace, but “the more orders, the better the price,” Kelfer said.

Skipping between assets

Kelfer founded the company in the early part of the initial coin offering (ICO) boom, seeing a need for reliable American exchanges.
“It was my perspective that there wasn’t a U.S.-based presence where people could reliably base these assets,” Kelfer said. “You really had to get on some Chinese exchange, because U.S. exchanges weren’t listing most of these tokens.”
Currently, ShortHop just lists a few major cryptocurrencies. Users can acquire and trade bitcoin, ether, litecoin, bitcoin cash, XRP and Stellar lumens (XLM). ShortHop also allows customers to “hop” between these assets without having to go through multiple conversions on different exchanges. Its technology accomplishes this by cross ordering books to create synthetic pairs.
Velocity Markets is also building a digital securities exchange. It owns a broker-dealer under the legal name Distributed Technology Markets that has an alternative trading system form on file at the U.S. Securities and Exchange Commission. The company will be using the broker-dealer license to enable the digital securities exchange, but the company would not disclose when it plans to launch.
Right now, new users on ShortHop’s platform receive $25 worth of bitcoin for signing up. The platform at the moment is feeless, and Kelfer plans to subsidize retail users by offering a plug-in service to institutions who want to connect to the exchange’s capabilities.
“We’d rather do this than nickel-and-dime retail users who should have access to the same quality of infrastructure that large players do,” Kelfer said. “That’s not to say we won’t layer on fees in the future.”
Jonathan Kelfer image via Velocity Markets
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TOP 3 ICO in November

1. BitDegree

Education seems to be of those areas where a blockchain could be used to improve most aspects of the traditional ways of interacting, transacting, and storing data. It's also an area that has received relatively little attention compared to the things like banking. BitDegree is an online education platform on the Ethereum blockchain. They want to improve return on investment for learners and the availability of people with the skills that companies need. Companies act as sponsors, buying tokens in the recruitment process, while building their brand and advertising. For students, coins are used to purchase educational services and as an incentive structure similar to scholarships.

Market

Team

BitDegree has a strong team that contains a good mix of roles, including several people with technical experience (as opposed to the teams composed almost entirely of businesspeople that we see all too often). The CEO previously built the cloud web hosting provider 000webhost. The team does not come from a background in education or education administration/management. However, they seem to have a good understanding of the market and its problems.
Notable advisors include: - Jeff Burton, Co-founder of Electronic Arts - Arnas Stuopelis, CEO of web hosting provider Hostinger

Relevant Partners

Accountability (where BitDegree suffers a bit)

Summary

ICO Dates

December 1 - December 31

2. Qchain

I've been following Qchain for some time now, and they've just recently started their ICO. Qchain is a marketing and advertising platform built on the Ethereum and NEM blockchains. Their main product is an accessible direct-buy ad marketplace, with a focus on native advertising and integrated personal data management features. They want to use blockchain tech to provide more control to advertisers and publishers, increase transparency and privacy, and cut out overhead from middle-men. In my opinion, this is one of the more underhyped and undervalued ICOs.

Market

Team

Qchain has a strong team that hails from a variety of big names in the media, tech, financial, and academic sectors. One of the biggest draws here is that most of the team has both a technical background and varying degrees of experience in advertising, marketing, financial, and media roles. They have one of the most relevant advisory boards I've seen for any ICO.
Notable advisors include: - Lon Wong, President of the NEM Foundation - Kailin O'Donnell, NEM Foundation founding member and core team developer - Misho Ceko, COO of the University of Chicago Harris School of Public Policy - Grant Fondo, Chair of the Blockchain Technology Practice at Goodwin Procter LLP - Evgeny Yurtaev/Alexey Bashlykov, CEO/CTO of Zerion (one of the original Solidity development groups)

Relevant Partners

Accountability

Summary

ICO Dates

Now - December 5

3. Bankera

Though certainly not a small fish, I'm including Bankera here because it's actually an interesting project with long-term prospects, among the field of various financial ICOs that have sprung up.

Team

They have a solid team, with a mix of technical experience and relevant industry experience. Unlike most of the banking ICOs, they are building off an existing product -- Spectrocoin, a cryptocurrency exchange and wallet service that includes a debit card for spending with Bitcoin.
Notable advisors include: - Lon Wong, President of the NEM Foundation - Modestas Kaseliauskas, Former Head of Lithuania's State Tax Inspectorate - Antanas Guoga/Eva Kaili, European Parliament members
While Spectrocoin is a far cry from Bankera's stated objectives, this shows they actually have existing financial infrastructure to attempt something as ambitious as Bankera. Contrast this to the likes of Monaco and Centra, which have yet to answer to investors or deliver a coherent plan, and are perhaps most notable for defrauding investors by selling them on a made-up partnership with VISA (way to burn a bridge with the world's largest card processor outside of China). Bankera is aiming for legitimate integration into the banking sector, with banking licenses in the EU, UK, Japan, and Singapore on the roadmap (the US is not specifically mentioned, more on this later).

Accountability

Investor Caveat

A lot of ICOs are using a blanket claim of being a 'utility token' and not a security (however most do not have any clear utility like BitDegree and Qchain do).
Bankera's token is explicitly a security, as the entire purpose of the BNK token is to entitle holders to a dividend from Bankera and SpectroCoin's revenue. This in and of itself is okay, as Bankera intends to integrate into the existing banking system and obtain banking licenses according to its whitepaper. The first con associated with this is that by integrating into existing banking sectors subjects, it itself to much of the central control and limitations of traditional banking.
The other potential issue, which is probably of greater interest to token buyers, is how the token is treated in locales where Bankera has not established legitimate banking ties. While this is probably not a problem Bankera's home locale of Lithuania, it will likely be an issue in large markets such as the US (which Bankera has not named among its target markets in its whitepaper roadmap) if Bankera does not specifically target these markets and acquire the appropriate local licenses. For example, in the US, Bankera's model blatantly violates federal securities laws unless Bankera registers with the SEC and obtains a money transmitter license.
As for the token itself and investors, this becomes problematic if (when) the SEC and its counterparts in other countries start imposing regulations on cryptocurrency exchanges. Otaining proper licenses to conduct banking, money transmission, and securities issuing activities are not simple, fast, or cheap processes. Following the US/SEC example, a plausible worst-case scenario would see BNK tokens ineligible to listed on (or be delisted from) US-based exchanges (which includes Poloniex) until all the bureaucracy is sorted out. Of course, this would present liquidity problems to all of the investors in these locations. While Bankera may end up getting the proper licenses in the US and elsewhere, this presents a tricky situation in general, as you have the traditional banking and securities regulations of every country versus a blockchain token which is an inherently global asset.

ICO Dates

November 27 - ?
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Trading Cryptocurrency Markets

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Major Exchanges
In finance, an exchange is a forum or platform for trading commodities, derivatives, securities or other financial instruments. The principle concern of an exchange is to allow trading between parties to take place in a fair and legally compliant manner, as well as to ensure that pricing information for any instrument traded on the exchange is reliable and coherently delivered to exchange participants. In the cryptocurrency space exchanges are online platforms that allow users to trade cryptocurrencies or digital currencies for fiat money or other cryptocurrencies. They can be centralized exchanges such a Binance, or decentralized exchanges such as IDEX. Most cryptocurrency exchanges allow users to trade different crypto assets with BTC or ETH after having already exchanged fiat currency for one of those cryptocurrencies. Coinbase and Kraken are the main avenue for fiat money to enter into the cryptocurrency ecosystem.
Function and History
Crypto exchanges can be market-makers that take bid/ask spreads as a commission on the transaction for facilitating the trade, or more often charge a small percentage fee for operating the forum in which the trade was made. Most crypto exchanges operate outside of Western countries, enabling them to avoid stringent financial regulations and the potential for costly and lengthy legal proceedings. These entities will often maintain bank accounts in multiple jurisdictions, allowing the exchange to accept fiat currency and process transactions from customers all over the globe.
The concept of a digital asset exchange has been around since the late 2000s and the following initial attempts at running digital asset exchanges foreshadows the trouble involved in attempting to disrupt the operation of the fiat currency baking system. The trading of digital or electronic assets predate Bitcoin’s creation by several years, with the first electronic trading entities running afoul of the Australian Securities and Investments Commission (ASIC) in late 2004. Companies such as Goldex, SydneyGoldSales, and Ozzigold, shut down voluntarily after ASIC found that they were operating without an Australian Financial Services License. E-Gold, which exchanged fiat USD for grams of precious metals in digital form, was possibly the first digital currency exchange as we know it, allowing users to make instant transfers to the accounts of other E-Gold members. At its peak in 2006 E-Gold processed $2 billion worth of transactions and boasted a user base of over 5 million people.
Popular Exchanges
Here we will give a brief overview of the features and operational history of the more popular and higher volume exchanges because these are the platforms to which newer traders will be exposed. These exchanges are recommended to use because they are the industry standard and they inspire the most confidence.
Bitfinex
Owned and operated by iFinex Inc, the cryptocurrency trading platform Bitfinex was the largest Bitcoin exchange on the planet until late 2017. Headquartered in Hong Kong and based in the US Virgin Island, Bitfinex was one of the first exchanges to offer leveraged trading (“Margin trading allows a trader to open a position with leverage. For example — we opened a margin position with 2X leverage. Our base assets had increased by 10%. Our position yielded 20% because of the 2X leverage. Standard trades are traded with leverage of 1:1”) and also pioneered the use of the somewhat controversial, so-called “stable coin” Tether (USDT).
Binance
Binance is an international multi-language cryptocurrency exchange that rose from the mid-rank of cryptocurrency exchanges to become the market dominating behemoth we see today. At the height of the late 2017/early 2018 bull run, Binance was adding around 2 million new users per week! The exchange had to temporarily disallow new registrations because its servers simply could not keep up with that volume of business. After the temporary ban on new users was lifted the exchange added 240,000 new accounts within two hours.
Have you ever thought whats the role of the cypto exchanges? The answer is simple! There are several different types of exchanges that cater to different needs within the ecosystem, but their functions can be described by one or more of the following: To allow users to convert fiat currency into cryptocurrency. To trade BTC or ETH for alt coins. To facilitate the setting of prices for all crypto assets through an auction market mechanism. Simply put, you can either mine cryptocurrencies or purchase them, and seeing as the mining process requires the purchase of expensive mining equipment, Cryptocurrency exchanges can be loosely grouped into one of the 3 following exchange types, each with a slightly different role or combination of roles.
Have you ever thought about what are the types of Crypto exchanges?
  1. Traditional Cryptocurrency Exchange: These are the type that most closely mimic traditional stock exchanges where buyers and sellers trade at the current market price of whichever asset they want, with the exchange acting as the intermediary and charging a small fee for facilitating the trade. Kraken and GDAX are examples of this kind of cryptocurrency exchange. Fully peer-to-peer exchanges that operate without a middleman include EtherDelta, and IDEX, which are also examples of decentralized exchanges.
  2. Cryptocurrency Brokers: These are website or app based exchanges that act like a Travelex or other bureau-de-change. They allow customers to buy or sell crypto assets at a price set by the broker (usually market price plus a small premium). Coinbase is an example of this kind of exchange.
  3. Direct Trading Platform: These platforms offer direct peer-to-peer trading between buyers and sellers, but don’t use an exchange platform in doing so. These types of exchanges do not use a set market rate; rather, sellers set their own rates. This is a highly risky form of trading, from which new users should shy away.
To understand how an exchange functions we need only look as far as a traditional stock exchange. Most all the features of a cryptocurrency exchange are analogous to features of trading on a traditional stock exchange. In the simplest terms, the exchanges fulfil their role as the main marketplace for crypto assets of all kinds by catering to buyers or sellers. These are some definitions for the basic functions and features to know: Market Orders: Orders that are executed instantly at the current market price. Limit Order: This is an order that will only be executed if and when the price has risen to or dropped to that price specified by the trader and is also within the specified period of time. Transaction fees: Exchanges will charge transactions fees, usually levied on both the buyer and the seller, but sometimes only the seller is charged a fee. Fees vary on different exchanges though the norm is usually below 0.75%. Transfer charges: The exchange is in effect acting as a sort of escrow agent, to ensure there is no foul play, so it might also charge a small fee when you want to withdraw cryptocurrency to your own wallet.
Regulatory Environment and Evolution
Cryptocurrency has come a long way since the closing down of the Silk Road darknet market. The idea of crypto currency being primarily for criminals, has largely been seen as totally inaccurate and outdated. In this section we focus on the developing regulations surrounding the cryptocurrency asset class by region, and we also look at what the future may hold.
The United States of America
A coherent uniform approach at Federal or State level has yet to be implemented in the United States. The Financial Crimes Enforcement Network published guidelines as early as 2013 suggesting that BTC and other cryptos may fall under the label of “money transmitters” and thus would be required to take part in the same Anti-money Laundering (AML) and Know your Client (KYC) procedures as other money service businesses. At the state level, Texas applies its existing finance laws. And New York has instituted an entirely new licensing system.
The European Union
The EU’s approach to cryptocurrency has generally been far more accommodating overall than the United States, partly due to the adaptable nature of pre-existing laws governing electronic money that predated the creation of Bitcoin. As with the USA, the EU’s main fear is money laundering and criminality. The European Central Bank (ECB) categorized BTC as a “convertible decentralized currency” and advised all central banks in the EU to refrain from trading any cryptocurrencies until the proper regulatory framework was put in place. A task force was then set up by the European Parliament in order to prevent and investigate any potential money laundering that was making use of the new technology.
Likely future regulations for cryptocurrency traders within the European Union and North America will probably consist of the following proposals: The initiation of full KYC procedures so that users cannot remain fully anonymous, in order to prevent tax evasion and curtail money laundering. Caps on payments that can be made in cryptocurrency, similar to caps on traditional cash transactions. A set of rules governing tax obligations regarding cryptocurrencies Regulation by the ECB of any companies that offer exchanges between cryptocurrencies and fiat currencies It is less likely for other countries to follow the Chinese approach and completely ban certain aspects of cryptocurrency trading. It is widely considered more progressive and wiser to allow the technology to grow within a balanced accommodative regulatory framework that takes all interests and factors into consideration. It is probable that the most severe form of regulation will be the formation of new governmental bodies specifically to form laws and exercise regulatory control over the cryptocurrency space. But perhaps that is easier said than done. It may, in certain cases, be incredibly difficult to implement particular regulations due to the anonymous and decentralized nature of crypto.
Behavior of Cryptocurrency Investors by Demographic
Due to the fact that cryptocurrency has its roots firmly planted in the cryptography community, the vast majority of early adopters are representative of that group. In this section we cover the basic structure of the cryptocurrency market cycle and the makeup of the community at large, as well as the reasons behind different trading decisions.
The Cryptocurrency Market Cycle
Bitcoin leads the bull rally. FOMO (Fear of missing out) occurs, the price surge is a constant topic of mainstream news, business programs cover the story, and social media is abuzz with cryptocurrency chatter. Bitcoin reaches new All Timehigh (ATH) Market euphoria is fueled with even more hype and the cycle is in full force. There is a constant stream of news articles and commentary on the meteoric, seemingly unstoppable rise of Bitcoin. Bitcoin’s price “stabilizes”, In the 2017 bull run this was at or around $14,000. A number of solid, large market cap altcoins rise along with Bitcoin; ETH & LTC leading the altcoins at this time. FOMO comes into play, as the new ATH in market cap is reached by pumping of a huge number of alt coins.
Top altcoins “somewhat” stabilize, after reaching new all-time highs. The frenzy continues with crypto success stories, notable figures and famous people in the news. A majority of lesser known cryptocurrencies follow along on the upward momentum. Newcomers are drawn deeper into crypto and sign up for exchanges other than the main entry points like Coinbase and Kraken. In 2017 this saw Binance inundated with new registrations. Some of the cheapest coins are subject to massive pumping, such as Tron TRX which saw a rise in market cap from $150 million at the start of December 2017 to a peak of $16 billion! At this stage, even dead coins or known scams will get pumped. The price of the majority of cryptocurrencies stabilize, and some begin to retract. When the hype is subsiding after a huge crypto bull run, it is a massive sell signal. Traditional investors will begin to give interviews about how people need to be careful putting money into such a highly volatile asset class. Massive violent correction begins and the market starts to collapse. BTC begins to fall consistently on a daily basis, wiping out the insane gains of many medium to small cap cryptos with it. Panic selling sweeps through the market. Depression sets in, both in the markets, and in the minds of individual investors who failed to take profits, or heed the signs of imminent collapse. The price stagnation can last for months, or even years.
The Influence of Age upon Trading
Did you know? Cryptocurrencies have been called “stocks for millennials” According to a survey conducted by the Global Blockchain Business Council, only 5% of the American public own any bitcoin, but of those that do, an overwhelming majority of 71% are men, 58% of them are between the ages of 18 and 35, and over half of them are minorities. The same survey gauged public attitude toward the high risk/high return nature of cryptocurrency, in comparison to more secure guaranteed small percentage gains offered by government bonds or stocks, and found that 30% would rather invest $1,000 in crypto. Over 42% of millennials were aware of cryptocurrencies as opposed to only 15% of those ages 65 and over. In George M. Korniotis and Alok Kumar’s study into the effects of aging on portfolio management and the quality of decisions made by older investors, they found “that older and experienced investors are more likely to follow “rules of thumb” that reflect greater investment knowledge. However, older investors are less effective in applying their investment knowledge and exhibit worse investment skill, especially if they are less educated and earn lower income.”
Geographic Influence upon Trading
One of the main drivers of the apparent seasonal ebb and flow of cryptocurrency prices is the tax situation in the various territories that have the highest concentrations of cryptocurrency holders. Every year we see an overall market pull back beginning in mid to late January, with a recovery beginning usually after April. This is because “Tax Season” is roughly the same across Europe and the United States, with the deadline for Income tax returns being April 15th in the United States, and the tax year officially ending the UK on the 6th of April. All capital gains must be declared before the window closes or an American trader will face the powerful and long arm of the IRS with the consequent legal proceedings and possible jail time. Capital gains taxes around the world vary from jurisdiction to jurisdiction but there are often incentives for cryptocurrency holders to refrain from trading for over a year to qualify their profits as long term gain when they finally sell. In the US and Australia, for example, capital gains are reduced if you bought cryptocurrency for investment purposes and held it for over a year. In Germany if crypto assets are held for over a year then the gains derived from their sale are not taxed. Advantages like this apply to individual tax returns, on a case by case basis, and it is up to the investor to keep up to date with the tax codes of the territory in which they reside.
2013 Bull run vs 2017 Bull run price Analysis
In late 2016 cryptocurrency traders were faced with the task of distinguishing between the beginnings of a genuine bull run and what might colorfully be called a “dead cat bounce” (in traditional market terminology). Stagnation had gripped the market since the pull-back of early 2014. The meteoric rise of Bitcoin’s price in 2013 peaked with a price of $1,100 in November 2013, after a year of fantastic news on the adoption front with both Microsoft and PayPal offering BTC payment options. It is easy to look at a line going up on a chart and speak after the fact, but at the time, it is exceeding difficult to say whether the cat is actually climbing up the wall, or just bouncing off the ground. Here, we will discuss the factors that gave savvy investors clues as to why the 2017 bull run was going to outstrip the 2013 rally. Hopefully this will help give insight into how to differentiate between the signs of a small price increase and the start of a full scale bull run. Most importantly, Volume was far higher in 2017. As we can see in the graphic below, the 2017 volume far exceeds the volume of BTC trading during the 2013 price increase. The stranglehold MtGox held on trading made a huge bull run very difficult and unlikely.
Fraud & Immoral Activity in the Private Market
Ponzi Schemes Cryptocurrency Ponzi schemes will be covered in greater detail in Lesson 7, but we need to get a quick overview of the main features of Ponzi schemes and how to spot them at this point in our discussion. Here are some key indicators of a Ponzi scheme, both in cryptocurrencies and traditional investments: A guaranteed promise of high returns with little risk. Consistentflow of returns regardless of market conditions. Investments that have not been registered with the Securities and Exchange Commission (SEC). Investment strategies that are a secret, or described as too complex. Clients not allowed to view official paperwork for their investment. Clients have difficulties trying to get their money back. The initial members of the scheme, most likely unbeknownst to the later investors, are paid their “dividends” or “profits” with new investor cash. The most famous modern-day example of a Ponzi scheme in the traditional world, is Bernie Madoff’s $100 billion fraudulent enterprise, officially titled Bernard L. Madoff Investment Securities LLC. And in the crypto world, BitConnect is the most infamous case of an entirely fraudulent project which boasted a market cap of $2 billion at its peak.
What are the Exchange Hacks?
The history of cryptocurrency is littered with examples of hacked exchanges, some of them so severe that the operation had to be wound up forever. As we have already discussed, incredibly tech savvy and intelligent computer hackers led by Alexander Vinnik stole 850000 BTC from the MtGox exchange over a period from 2012–2014 resulting in the collapse of the exchange and a near-crippling hammer blow to the emerging asset class that is still being felt to this day. The BitGrail exchange suffered a similar style of attack in late 2017 and early 2018, in which Nano (XRB) was stolen that was at one point was worth almost $195 million. Even Bitfinex, one of the most famous and prestigious exchanges, has suffered a hack in 2016 where $72 million worth of BTC was stolen directly from customer accounts.
Hardware Wallet Scam Case Study
In late 2017, an unfortunate character on Reddit, going by the name of “moody rocket” relayed his story of an intricate scam in which his newly acquired hardware wallet was compromised, and his $34,000 life savings were stolen. He bought a second hand Nano ledger into which the scammers own recover seed had already been inserted. He began using the ledger without knowing that the default seed being used was not a randomly assigned seed. After a few weeks the scammer struck, and withdrew all the poor HODLer’s XRP, Dash and Litecoin into their own wallet (likely through a few intermediary wallets to lessen the very slim chances of being identified).
Hardware Wallet Scam Case Study Social Media Fraud
Many gullible and hapless twitter users have fallen victim to the recent phenomenon of scammers using a combination of convincing fake celebrity twitter profiles and numerous amounts of bots to swindle them of ETH or BTC. The scammers would set up a profile with a near identical handle to a famous figure in the tech sphere, such as Vitalik Buterin or Elon Musk. And then in the tweet, immediately following a genuine message, follow up with a variation of “Bonus give away for the next 100 lucky people, send me 0.1 ETH and I will send you 1 ETH back”, followed by the scammers ether wallet address. The next 20 or so responses will be so-called sockpuppet bots, thanking the fake account for their generosity. Thus, the pot is baited and the scammers can expect to receive potentially hundreds of donations of 0.1 Ether into their wallet. Many twitter users with a large follower base such as Vitalik Buterin have taken to adding “Not giving away ETH” to their username to save careless users from being scammed.
Market Manipulation
It also must be recognized that market manipulation is taking place in cryptocurrency. For those with the financial means i.e. whales, there are many ways in which to control the market in a totally immoral and underhanded way for your own profit. It is especially easy to manipulate cryptos that have a very low trading volume. The manipulator places large buy orders or sell walls to discourage price action in one way or the other. Insider trading is also a significant problem in cryptocurrency, as we saw with the example of blatant insider trading when Bitcoin Cash was listed on Coinbase.
Examples of ICO Fraudulent Company Behavior
In the past 2 years an astronomical amount of money has been lost in fraudulent Initial Coin Offerings. The utmost care and attention must be employed before you invest. We will cover this area in greater detail with a whole lesson devoted to the topic. However, at this point, it is useful to look at the main instances of ICO fraud. Among recent instances of fraudulent ICOs resulting in exit scams, 2 of the most infamous are the Benebit and PlexCoin ICOs which raised $4 million for the former and $15 million for the latter. Perhaps the most brazen and damaging ICO scam of all time was the Vietnamese Pincoin ICO operation, where $660million was raised from 32,000 investors before the scammer disappeared with the funds. In case of smaller ICO “exit scamming” there is usually zero chance of the scammers being found. Investors must just take the hit. We will cover these as well as others in Lesson 7 “Scam Projects”.
Signposts of Fraudulent Actors
The following factors are considered red flags when investigating a certain project or ICO, and all of them should be considered when deciding whether or not you want to invest. Whitepaper is a buzzword Salad: If the whitepaper is nothing more than a collection of buzzwords with little clarity of purpose and not much discussion of the tech involved, it is overwhelmingly likely you are reading a scam whitepaper.
Signposts of Fraudulent Actors §2
No Code Repository: With the vast majority of cryptocurrency projects employing open source code, your due diligence investigation should start at GitHub or Sourceforge. If the project has no entries, or nothing but cloned code, you should avoid it at all costs. Anonymous Team: If the team members are hard to find, or if you see they are exaggerating or lying about their experience, you should steer clear. And do not forget, in addition to taking proper precautions when investing in ICOs, you must always make sure that you are visiting authentic web pages, especially for web wallets. If, for example, you are on a spoof MyEtherWallet web page you could divulge your private key without realizing it and have your entire portfolio of Ether and ERC-20 tokens cleaned out.
Methods to Avoid falling Victim
Avoiding scammers and the traps they set for you is all about asking yourself the right questions, starting with: Is there a need for a Blockchain solution for the particular problem that a particular ICO is attempting to solve? The existing solution may be less costly, less time consuming, and more effective than the proposals of a team attempting to fill up their soft cap in an ICO. The following quote from Mihai Ivascu, the CEO of Modex, should be kept in mind every time you are grading an ICO’s chances of success: “I’m pretty sure that 95% of ICOswill not last, and many will go bankrupt. ….. not everything needs to be decentralized and put on an open source ledger.”
Methods to Avoid falling Victim §2 Do I Trust These People with My Money, or Not?
If you continue to feel uneasy about investing in the project, more due diligence is needed. The developers must be qualified and competent enough to complete the objectives that they have set out in the whitepaper.
Is this too good to be true?
All victims of the well-known social media scams using fake profiles of Vitalik Buterin, or Bitconnect investors for that matter, should have asked themselves this simple question, and their investment would have been saved. In the case of Bitconnect, huge guaranteed gains proportional to the amount of people you can get to sign up was a blatant pyramid scheme, obviously too good to be true. The same goes for Fake Vitalik’s offer of 1 ether in exchange for 0.1 ETH.
Selling Cryptocurrencies, Several reasons for selling with the appropriate actions to take:
If you are selling to buy into an ICO, or maybe believe Ether is a safer currency to hold for a certain period of time, it is likely you will want to make use of the Ether pair and receive Ether in return. Obviously if the ICO is on the NEO or WANchain blockchain for example, you will use the appropriate pair. -Trading to buy into another promising project that is listing on the exchange on which you are selling (or you think the exchange will experience a large amount of volume and become a larger exchange), you may want to trade your cryptocurrency for that exchange token. -If you believe that BTC stands a good chance of experiencing a bull run then using the BTC trading pair is the suitable choice. -If you believe that the market is about to experience a correction but you do not want to take your gains out of the market yet, selling for Tether or “tethering up” is the best play. This allows you to keep your locked-in profits on the exchange, unaffected by the price movements in the cryptocurrency markets,so that you can buy back in at the most profitable moment. -If you wish to “cash out” i.e. sell your cryptocurrency for fiat currency and have those funds in your bank account, the best pair to use is ETH or BTC because you will likely have to transfer to an exchange like Kraken or Coinbase to convert them into fiat. If the exchange offers Litecoin or Bitcoin Cash pairs it could be a good idea to use these for their fast transaction time and low fees.
Selling Cryptocurrencies
Knowing when and how to sell, as well as strategies to inflate the value of your trade before sale, are important skills as a trader of any product or financial instrument. If you are satisfied that the sale itself of the particular amount of a token or coin you are trading away is the right one, then you must decide at what price you are going to sell. Exchanges exercise their own discretion as to which trading “pairs” they will offer, but the most common ones are BTC, ETH, BNB for Binance, BIX for Bibox etc., and sometimes Tether (USDT) or NEO. As a trader, you decide which particular cryptocurrency to exchange depending on your reason for making that specific trade at that time.
Methods of Sale
Market sell/Limit sell on exchange: A limit sell is an order placed on an exchange to sell as soon as (also specifically only if and when) the price you specified has been hit within the time limit you select. A market order executes the sale immediately at the best possible price offered by the market at that exact time. OTC (or Over the Counter) selling refers to sale of securities or cryptocurrencies in any method without using an exchange to intermediate the trade and set the price. The most common way of conducting sales in this manner is through LocalBitcoins.com. This method of cryptocurrency selling is far riskier than using an exchange, for obvious reasons.
The influence and value of your Trade
There are a number of strategies you can use to appreciate the value of your trade and thus increase the Bitcoin or Ether value of your portfolio. It is important to disassociate yourself from the dollar value of your portfolio early on in your cryptocurrency trading career simply because the crypto market is so volatile you will end up pulling your hair out in frustration following the real dollar money value of your holdings. Once your funds have been converted into BTC and ETH they are completely in the crypto sphere. (Some crypto investors find it more appropriate to monitor the value of their portfolio in satoshi or gwei.) Certainly not limited to, but especially good for beginners, the most reliable way to increase your trading profits, and thus the overall value and health of your portfolio, is to buy into promising projects, hold them for 6 months to a year, and then reevaluate. This is called Long term holding and is the tactic that served Bitcoin HODLers quite well, from 2013 to the present day. Obviously, if something comes to light about the project that indicates a lengthy set back is likely, it is often better to cut your losses and sell. You are better off starting over and researching other projects. Also, you should set initial Price Points at which you first take out your original investment, and then later, at which you take out all your profits and exit the project. That should be after you believe the potential for growth has been exhausted for that particular project.
Another method of increasing the value of your trades is ICO flipping. This is the exact opposite of long term holding. This is a technique in which you aim for fast profits taking advantage of initial enthusiasm in the market that may double or triple the value of ICO projects when they first come to market. This method requires some experience using smaller exchanges like IDEX, on which project tokens can be bought and sold before listing on mainstream exchanges. “Tethering up” means to exchange tokens or coins for the USDT stable coin, the value of which is tethered to the US Dollar. If you learn, or know how to use, technical analysis, it is possible to predict when a market retreatment is likely by looking at the price movements of BTC. If you decide a market pull back is likely, you can tether up and maintain the dollar value of your portfolio in tether while other tokens and coins decrease in value. The you wait for an opportune moment to reenter the market.
Market Behavior in Different Time Periods
The main descriptors used for overall market sentiment are “Bull Market” and “Bear Market”. The former describes a market where people are buying on optimism. The latter describes a market where people are selling on pessimism. Fun (or maybe not) fact: The California grizzly bear was brought to extinction by the love of bear baiting as a sport in the mid 1800s. Bears were highly sought after for their intrinsic fighting qualities, and were forced into fighting bulls as Sunday morning entertainment for Californians. What has this got to do with trading and financial markets? The downward swipe of the bear’s paws gives a “Bear market” its name and the upward thrust of a Bull’s horns give the “Bull Market” its name. Most unfortunately for traders, the bear won over 80% of the bouts. During a Bull market, optimism can sometimes grow to be seemingly boundless, volume is rising, and prices are ascending. It can be a good idea to sell or rebalance your portfolio at such a time, especially if you have a particularly large position in one holding or another. This is especially applicable if you need to sell a large amount of a relatively low-volume holding, because you can then do so without dragging the price down by the large size of your own sell order.
Learn more on common behavioral patterns observed so far in the cryptocurrency space for different coins and ICO tokens.
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submitted by UBAI_UNIVERSITY to u/UBAI_UNIVERSITY [link] [comments]

[Sunday, 25. November]

World News

Parliament has used its legal powers to seize internal Facebook documents in an extraordinary attempt to hold the US social media giant to account after chief executive Mark Zuckerberg repeatedly refused to answer MPs’ questions.
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95-year-old charged as accessory to 36,000 deaths at Nazi concentration camp
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Jamal Khashoggi killing: Finland, Denmark, Germany halt arms sales to Saudi Arabia
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All news, US and international.

Man killed by cops during Alabama mall shooting had a permit: Actual shooter remains at large
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Airlines face crack down on use of 'exploitative' algorithm that splits up families on flights
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U.K. military head says Russia poses an even bigger threat than the Islamic State
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Science

Scientists have developed catalysts that can convert carbon dioxide – the main cause of global warming – into plastics, fabrics, resins and other products. The discovery, based on the chemistry of artificial photosynthesis, is detailed in the journal Energy & Environmental Science.
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A study has found social network bots actually target and pursue individual influencers. Bots tend to generate negative content aimed at polarizing highly influential human users to exacerbate social conflict
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Effects of childhood trauma may be passed on through sperm in humans
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Technology

Bitcoin sinks below $4,000 as the crypto market takes another hefty beating
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An all-electric mini-airliner that can go 621 miles on one charge and replace many of the turboprops and light jets in use now—flying almost as far and almost as fast but for a fraction of the running costs—could be in service within three years.
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LinkedIn violated data protection by using 18 million email addresses of non-members to buy targeted ads on Facebook.
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Sadly, this is not the Onion.

AI Mistakes Bus-Side Ad for Famous CEO, Charges Her With Jaywalking
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Young Scots say not drinking alcohol holds back their career
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Brazilian woman laced vagina with poison to kill husband
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Ask Reddit...

What unsolved mystery has absolutely no plausible explanation?
Comments
What's a fucked up movie everybody should watch?
Comments
Airport security personnel of Reddit, what is the weirdest thing you have seen inside the passengers' luggage?
Comments

Sysadmin

Thank you for the Office365 Admin android app..
Comments
"Well, go unplug one of the VM tanks, if you don't believe me" - put my money where my mouth was, won :D
Comments
Some needlessly angry and probably wrong thoughts about Microsoft licensing
Comments

Microsoft SQL Server

Print book in color or black and white?
Comments

PowerShell

Has anyone made an application out of powershell? If so, what was it?
Comments
Change the cluster size of a volume.
Comments
PS and Excel: I have a solution to share and an extremely odd probelm
Comments

Functional 3D Printing

My last project: remote radio transmitter.
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Solder Fume Extractor and Helping Hands
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Added a height adjustable base to my microscope. Slide locked with 3d printed screw. I spent some time getting it right.
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Data Is Beautiful

[OC] Is someone compensating? Avg Country Penis Size vs Country's Tallest Building
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[OC] Friends TV Series - Most Distinguishing Words of The Main Cast
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SHA-1 Graph Visualization [OC]
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Today I Learned (TIL)

TIL that Steve Jobs often went to his biological father's Mediterranean restaurant in San Jose and even shook his hand. At the time, his dad didn't know that Jobs was the baby he gave away for adoption, and Jobs didn't know that he was his father.
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TIL there is only one person registered as a "Rectal Teaching Assistant" in the UK, traveling the country offering his anus to be examined by trainee doctors. He has since lost his job to a robot anus.
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TIL that "Zohnerism", the use of true fact(s) to lead a scientifically ignorant public to a false conclusion, was coined after 14yr old Nathan Zohner convinced his classmates to join in on banning the ''dangerous chemical dihydrogen monoxide'' (water) from school for an experiment about gullibility.
Comments | Link

So many books, so little time

Do you guys remember Artemis Fowl?
Comments
Who here has read The Legend of Drizzt series? I've been waiting and waiting on them to make it into a movie or a series like on HBO or something.
Comments
I got new books!
Comments

OldSchoolCool: History's cool kids, looking fantastic

Clint Eastwood at home in Sherman Oaks, California, (1960's).
Comments | Link
Rest in Peace Freddie Mercury, September 5th 1946-November 24th 1991. We miss you.
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My grandfather and great-grandmother in 1941. He always wanted to be a pilot in the Air Force but wasn’t allowed to because of his colorblindness.
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aviation

No idea when or where this was but found it in my Dads old shit
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Sexy Corsair right there
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It’s the small things that make you happy (Groundspeed)
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Reddit Pics

After being married for 6 years and being dirt poor for 5 of them, my wife and I bought our first Christmas tree and couldn’t wait to put it up. It’s a small accomplishment, but a welcome one.
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Damn, if that isn't an amazing view..
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The Queen trying not to laugh after being pranked by her husband, Prince Phillip, who has dressed as a guard of the Palace.
Comments | Link

.gifs - funny, animated gifs for your viewing pleasure

Oops, I overslept
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Most beautiful duck
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The best Before/After
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A subreddit for cute and cuddly pictures

22 years and counting.
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I remember the first time I ever looked into your eyes and felt my entire world flip.
Comments | Link
Don’t touch our kids!
Comments | Link
submitted by DangerDylan to DangerDylanTLDR [link] [comments]

Investing App Robinhood Broadens Crypto Offering with Bitcoin Cash and Litecoin

Investing App Robinhood Broadens Crypto Offering with Bitcoin Cash and Litecoin
https://preview.redd.it/37ias72qjo911.jpg?width=1024&format=pjpg&auto=webp&s=eaa4c8e7d111248e80487864d00bdf9a7c22f467
U.S.-based mobile stock trading app Robinhood has added two new cryptocurrencies to the growing stable of digital assets that users can trade free of charge.
Although cryptocurrencies are on very long losing streak, a rapidly expanding fintech company Robinhood Markets Inc. does not turn off a strong customers’ request to expand the list of trading crypto assets beyond the current options of Bitcoin and Ethereum.
As previously reported by Coinspeaker, the platform has added no-fee trading of the two biggest and best-known cryptocurrencies in February, soon after Bitcoin price had skyrocketed to nearly $20,000. Notably since that time, Bitcoin has lost almost 65 percent of its value and now is trading for around $6,188 according to data from CoinMarketCap.Com.
On Tuesday, the company made an official statement saying Litecoin and Bitcoin Cashare going to widen the Robinhood crypto offerings. The addition of the fourth and sixth most valuable digital currencies respectively, is expected to give a second wind of life for cryptocurrency investors at this difficult time.
As part of the announcement, Robinhood also claimed it had topped 5 million users, marking yet another milestone for the firm, which achieved a $5.6 billion valuation in May at the conclusion of its $363 million Series D funding round.
The platform’s decision to add Litecoin and Bitcoin Cash is not surprising as the cryptocurrencies come with little regulatory risk, based on recent guidance from the SEC. This is not the case with other more centralized digital tokens like XRP and Ethereum, which the agency has warned are akin to securities that must be registered.
Currently, Robinhood is offering a seamless cryptocurrency trading in 17 U.S.states, including California and Texas, while it navigates licensing requirements in the rest of the country. The company’s co-founder and co-CEO Baiju Bhatt previously said that by the end of 2018 Robinhood Crypto would be able to cover the entire U.S. becoming one of the largest cryptocurrency platforms.
With the addition of Litecoin and Bitcoin Cash, the firm also unveiled its plans to add support for coin transfers, likely confirming reports that Robinhood is building an in-app cryptocurrency wallet. At present, users can buy and sell cryptocurrencies on the brokerage platform but cannot deposit, withdraw, or transfer them.
However, users both inside and outside of markets where Robinhood Crypto is currently available can continue to add the broadened list of cryptocurrencies to their portfolio watchlist, while the firm has said it will continue to expand the list of cryptoassets available for trading in the future.
Reportedly, Robinhood has recently approached federal regulators about acquiring the licenses necessary to operate as a chartered national bank, which would allow it to offer traditional banking services to its customers as well as exempt it from the patchwork of state-level regulations governing money transmitter businesses.
By now, there are no details available regarding the Robinhood progress, but other fintech startups including payment service Square have so far been unsuccessful in their attempts to secure national banking charters.
While a growing number of companies offer cryptocurrency, including market leader Coinbase and Square, Robinhood’s service is distinct because the company does not charge direct commissions or trading fees.
Robinhood’s co-founder Baiju Bhatt explains that now the company is not concerned about making money on crypto. Instead, Robinhood sees it as a complement to its core stock brokerage service, which has already notched more accounts than conventional services like eTrade.
Source
submitted by W12io to u/W12io [link] [comments]

Feedback on Coinbase job app

Hey crew, recently dropped an app in for a job with Coinbase as a Legal Associate. The job form had originally asked where Coinbase should file for a Money Transmitting License. I decided to research the issue a bit and use it as my cover letter. I'd like to refine it a bit and use it along with some other apps as a writing sample, wanted to get some feed back:
There are three scenarios that Coinbase could choose to pursue: 1) Request no-action letters from each state under the theory that Coinbase' activities do not fall within the traditional definitions of a “money transmitter” or fall under one of the state exemptions; 2) File for a MTL in California and Delaware where Coinbase has it principal place and is incorporated, due to the high likelihood of being subject to personal jurisdiction in these states; 3) File for a MTL in all 47 states with legislation on the matter.
Under federal law, 18 UCS § 1960, businesses are required to register for a MTL where their activity falls within the state definition of a money transmitter. Under current legislation 47 states require “money transmitters” to register for an MTL. As stated above, Coinbase principal place of business and state of incorporation is California and Delaware respectively. However, Coinbase' services are available to anyone in the United States regardless of their state of residency. This could very likely subject Coinbase to jurisdiction in every state, or at the very least be forced to close operation in states where it does not comply with Anti-Money Laundering (AML) laws.
I. Request for No-Action Letter
Under the first scenario Coinbase could request a no-action letter from each state where it operates. For example: the California Department of Business Oversight (previously the Department of Financial Institutions) in California. Under this theory Coinbase could provide the following argument that its services do not fall within the State's definition of a money transmitter. California law defines “money transmitters” as any business which engages in the activities of: 1. "selling or issuing payment instruments;" 2. "selling or issuing stored value;" and 3. "receiving money for transmission" Cal. Fin. Code § 2003(o).
A. Bitcoin is Not a “Payment Instrument” Under California Law
Coinbase does not operate any services under the first prong of “selling or issuing payment instruments” because bitcoin does not fall within the definition of a “payment instrument” under California law. Payment instruments are defined as “a check, draft, money order, traveler's check or other instrument for the transmission or payment of money or monetary value, whether or not negotiable” Cal. Fin. Code § 2003(q). A payment instrument “does not include a credit card voucher, letter of credit, or any instrument that is redeemable by the issuer for goods and services provided by the issuer or its affiliate." Id.
Coinbase is not the “issuer” of bitcoin because an issuer within the context of payment instruments is “the entity that is the maker or drawer of the instrument in accordance with the California Commercial Code and is liable for payment” Cal. Fin. Code § 2003(k). Coinbase is not the maker of bitcoin because bitcoins are created by the network itself after a user provides proof of work solving the mathematical algorithm to unlock new bitcoins. Furthermore, Coinbase is not under any obligation to remain “liable for payment” to any particular user who wishes to redeem their bitcoin for USD or other currency.
Coinbase is not the “seller” of a payment instrument because bitcoin is not an “instrument.” Under the California Commercial Code negotiable instruments “must involve a written instruction or undertaking” Cal. Comm. Code § 3103(a)(6). With a bitcoin transaction there is no written instruction or undertaking, it is simply a transfer of possession of the private keys associated with a particular bitcoin or fraction thereof.
Each bitcoin is a unique piece of property, not a currency, as evidenced by the IRS Notice 2014-21. The ruling treats bitcoin as property, not as an instrument, note, or draft. Each bitcoin is inherently unique because ownership is based purely on possession of specific private keys associated with the bitcoin and authenticated by the public ledger in the Bitcoin network. Once Coinbase has given a user possession of the private keys associated with a bitcoin, Coinbase is no longer under any obligation to transact with that user again or exchange the bitcoin for another currency.
Because Coinbase is not the “issuer” of bitcoin and bitcoin is not a “payment instrument” rather it is unique property, Coinbase is not engaging in activity described in the “payment instrument” prong of the Money Transmitter Act.
B. Bitcoin is Not “Stored Value” as Defined Under California Law
Coinbase is not "selling or issuing stored value" Cal. Fin. Code § 2003(o).“Stored value” is defined as an agreement to exchange monetary value for a promise to later redeem that value for a fixed amount, “evidenced by an electronic or digital record” Cal. Fin. Code § 2003(v). Coinbase does not offer redemption value for bitcoins sold to its customers. Coinbase service merely transfers property ownership of the private keys to a bitcoin. At no point in time is Coinbase obligated to redeem any specific stored value because the value of a bitcoin fluctuates wildly with the market. Furthermore, Coinbase is not the “issuer” as discussed above because bitcoin is “issued” by the network's proof of work algorithm and verified by peers in the public blockchain ledger.
C. Coinbase Does Not Accept Funds to Be Transmitted to a Third Party
California Finance Code requires that services "receiving money for transmission" register as Money Transmitters Cal. Fin. Code § 2003(o). A service accepts money for transmission where it accepts funds from one user and subsequently transfers those funds to a third party within or outside the United States Cal. Fin. Code § 2003(s). The basis of Coinbase business model is not the transmission of money, nor does it transfer funds, money, instruments, or bitcoin from one user to another. Coinbase purchaces property in the form of each unique bitcoin from its users, Coinbase is then free to keep, sell or destroy that property at will. The fact that Coinbase has simultaneous purchase and sell features does not change the nature of this because at no point in time as any property or bitcoin transmitted anywhere other than from a user to Coinbase, or vice versa.
This conclusion is further evidenced by the Department of Business Oversight's (formerly the DFI) concurrence that “Foreign Currency Exchange Services - Not Subject to money Transmission Act” Available at HYPERLINK "http://www.dfi.ca.gov/Laws/orders_files/Opinion-Foreign_Currency_Exchange_Services.pdf"http://www.dfi.ca.gov/Laws/orders_files/Opinion-Foreign_Currency_Exchange_Services.pdf. There the Department concluded that the sale of pesos in exchange for a fee and U.S. Dollars was not a money transmission. This conclusion was drawn because the service did not transmit money to a third party and it did not remain liable to later redeem value for the pesos. The service described in the opinion is strikingly similar to the service offered by Coinbase.
Because Coinbase does not receive money to be transmitted to a third party and it does not obligate itself to later redeem value for a bitcoin, it does not fall under the regulation of this prong of the California Finance Code.
II. File for a Money Transmitting License in California and Delaware
Should regulations emerge that more clearly place bitcoin under any of the definitions described above, it would be prudent for Coinbase to register for a Money Transmitting License in California and Delaware.
Business entities are most likely subject to jurisdiction where they maintain their principal place of business, and often as well in the state of incorporation. 28 U.S.C. § 1332(c)(1) provides that "a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." Relatively recently, the U.S. Supreme Court ruled that the “principal place of business” is the “nerve center” or decision making headquarters of an entity, as opposed to a main place of manufacturing or lower level of operations Hertz Corp. v. Friend, No. 08-1107, slip op. at 1 (U.S. Feb. 23, 2010).
Because Coinbase main office is located in San Francisco, California and the state of incorporation is in Delaware at the very least Coinbase is subject to jurisdiction and regulation in each state mentioned. Therefore, the first applications for a MTL should be completed in California and Delaware if Coinbase required to comply with money transmitting regulation.
III. File for a Money Transmitting License in all 47 States with Applicable Regulations
The nature of Coinbase business is such that it has users across the nation. At the time of writing 47 states have related legislation regarding money transmission. South Carolina and Montana do not regulate money transmission, New Mexico only regulates “negotiable instruments” which is not applicable to bitcoin, for similar reasons as discussed above. Coinbase possibly avails itself to the laws and regulation of each state it allows customers to transact in. Therefore, Coinbase could be subject to jurisdiction in every state where its services are available.
Individual analysis of each state's money transmitter regulations are beyond the scope of this document. However, I would be happy to research any specific state or federal regulation in furtherance of the application process and pursuit of employment with Coinbase.
submitted by vinnie_james to Bitcoin [link] [comments]

States put heat on Bitcoin. (WSJ - 6/26 - article cut & Paste for w/o Subscription)

By ROBIN SIDEL and ANDREW R. JOHNSON State regulators are warning virtual-currency exchanges and other companies that deal with bitcoin that they could be closed down if their activities run afoul of state money-transmission laws, according to people familiar with the matter.
According to people familiar with the situation, banking regulators in California, New York and Virginia in recent weeks have issued letters telling the companies that they need to follow the state rules or prove that the rules don't apply to them.
The warnings fall short of formal "cease and desist" orders, which would demand that the companies immediately stop engaging in their business, these people said.
Still, the moves show that state regulators have moved beyond merely scrutinizing virtual currencies and now are taking steps to prevent people and companies from using them for illegal activities. Federal regulators already are cracking down on virtual currencies.
Similar actions are expected from other states in coming weeks and months, according to people familiar with the matter. California, New York and Virginia are three of the 48 states that require the companies to obtain money-transmission licenses to operate. South Carolina and Montana don't have such rules.
The money-transmission rules vary among states, but most require detailed financial data, business strategy and information about the company's management. States also typically require companies to put up a bond that could run as high as several million dollars.
Bits and Pieces
Read about Bitcoin's evolution.
The actions aren't related to the announcement last week that Mt. Gox, the largest bitcoin trading exchange, has halted withdrawals of customer funds in U.S. dollars. The Tokyo company said it was making system improvements.
Unlike dollars or euros that are backed by a central bank, bitcoin users can create the units in a process called "mining." Users also can trade the currency on a number of exchanges or swap it privately.
The state actions come three months after federal regulators issued guidelines placing virtual-currency exchanges under the same comprehensive anti-money-laundering requirements as traditional money-transmission businesses such as Western Union Co. Since then, a handful of bitcoin exchanges have registered with the U.S. Treasury Department's Financial Crimes Enforcement Network.
The California Department of Financial Institutions has issued at least three warnings to bitcoin-related companies in recent weeks, according to people familiar with the actions. One of the recipients is the Bitcoin Foundation, an industry-backed group that promotes the digital cash.
Patrick Murck, general counsel for the Bitcoin Foundation, said it is a nonprofit organization and doesn't engage in money transmission. The group is formulating its response to the letter it received from regulators last week.
A spokeswoman for the California banking department declined to comment on the warning letters, saying the communications are confidential and "the goal is safety and soundness and compliance with the laws that DFI enforces."
California is particularly important to the bitcoin community because many of the startup companies that are tied to the virtual currency are based there. California and New York are known for having stricter money-transmission laws than other states.
Bloomberg News Bitcoin supporter Peter Vessenes
"Bitcoin businesses are spending a lot of time and energy figuring out how to stay out of California," said Peter Vessenes, chief executive of CoinLab, a Bainbridge Island, Wash., company that has registered as a money-services business with the Financial Crimes Enforcement Network. CoinLab is waiting to launch any exchange-related services until it gets its "state licensing strategy sorted," said Mr. Vessenes, who also is chairman of the Bitcoin Foundation.
The New York Department of Financial Services issued a similar letter to BitInstant, a New York company that allows customers to buy and sell bitcoins. The company earlier this month alerted customers on its website that it wasn't accepting cash deposits "as we make steps to transition to our new website."
Charlie Shrem, chief executive of BitInstant, couldn't be reached for comment. The company has registered as a money-services business with federal regulators.
"Virtual currency firms inhabit an evolving and sometimes murky corner of the financial world," Benjamin Lawsky, superintendent of New York's Department of Financial Services, said in an interview.
"The extent and nature of their operations morph constantly, so it's important for regulators to ask the hard questions and stay ahead of the curve in order to root out dangerous or illegal activity," he said.
In Virginia, a company called Tangible Cryptography suspended the purchase of the currency through its service called FastCash4Bitcoins after receiving a letter from state regulators who received a complaint that the company was operating as an unlicensed money transmitter, according to a notice on its website. Company representatives couldn't be reached for comment.
Tangible Cryptography said on its website that its activity is exempt from licensing requirements and that the commission's initial assessment contained factual errors.
"While we respond to the commission's notice, the prudent action is for the company to suspend all new transactions," the company said.
A spokesman for the Virginia Bureau of Financial Institutions declined to comment on whether it has issued similar notices to other companies.
Write to Robin Sidel at [email protected] and Andrew R. Johnson at [email protected]
A version of this article appeared June 26, 2013, on page C1 in the U.S. edition of The Wall Street Journal, with the headline: States Put Heat on Bitcoin.
submitted by siamesefightingfish to Bitcoin [link] [comments]

Feedback on Bitcoin writing sample

Hey crew, recently dropped an app in for a job with Coinbase as a Legal Associate. The job form had originally asked where Coinbase should file for a Money Transmitting License. I decided to research the issue a bit and use it as my cover letter. I'd like to refine it a bit and use it along with some other apps as a writing sample, wanted to get some feed back:
There are three scenarios that Coinbase could choose to pursue: 1) Request no-action letters from each state under the theory that Coinbase' activities do not fall within the traditional definitions of a “money transmitter” or fall under one of the state exemptions; 2) File for a MTL in California and Delaware where Coinbase has it principal place and is incorporated, due to the high likelihood of being subject to personal jurisdiction in these states; 3) File for a MTL in all 47 states with legislation on the matter.
Under federal law, 18 UCS § 1960, businesses are required to register for a MTL where their activity falls within the state definition of a money transmitter. Under current legislation 47 states require “money transmitters” to register for an MTL. As stated above, Coinbase principal place of business and state of incorporation is California and Delaware respectively. However, Coinbase' services are available to anyone in the United States regardless of their state of residency. This could very likely subject Coinbase to jurisdiction in every state, or at the very least be forced to close operation in states where it does not comply with Anti-Money Laundering (AML) laws.
I. Request for No-Action Letter
Under the first scenario Coinbase could request a no-action letter from each state where it operates. For example: the California Department of Business Oversight (previously the Department of Financial Institutions) in California. Under this theory Coinbase could provide the following argument that its services do not fall within the State's definition of a money transmitter. California law defines “money transmitters” as any business which engages in the activities of: 1. "selling or issuing payment instruments;" 2. "selling or issuing stored value;" and 3. "receiving money for transmission" Cal. Fin. Code § 2003(o).
A. Bitcoin is Not a “Payment Instrument” Under California Law
Coinbase does not operate any services under the first prong of “selling or issuing payment instruments” because bitcoin does not fall within the definition of a “payment instrument” under California law. Payment instruments are defined as “a check, draft, money order, traveler's check or other instrument for the transmission or payment of money or monetary value, whether or not negotiable” Cal. Fin. Code § 2003(q). A payment instrument “does not include a credit card voucher, letter of credit, or any instrument that is redeemable by the issuer for goods and services provided by the issuer or its affiliate." Id.
Coinbase is not the “issuer” of bitcoin because an issuer within the context of payment instruments is “the entity that is the maker or drawer of the instrument in accordance with the California Commercial Code and is liable for payment” Cal. Fin. Code § 2003(k). Coinbase is not the maker of bitcoin because bitcoins are created by the network itself after a user provides proof of work solving the mathematical algorithm to unlock new bitcoins. Furthermore, Coinbase is not under any obligation to remain “liable for payment” to any particular user who wishes to redeem their bitcoin for USD or other currency.
Coinbase is not the “seller” of a payment instrument because bitcoin is not an “instrument.” Under the California Commercial Code negotiable instruments “must involve a written instruction or undertaking” Cal. Comm. Code § 3103(a)(6). With a bitcoin transaction there is no written instruction or undertaking, it is simply a transfer of possession of the private keys associated with a particular bitcoin or fraction thereof.
Each bitcoin is a unique piece of property, not a currency, as evidenced by the IRS Notice 2014-21. The ruling treats bitcoin as property, not as an instrument, note, or draft. Each bitcoin is inherently unique because ownership is based purely on possession of specific private keys associated with the bitcoin and authenticated by the public ledger in the Bitcoin network. Once Coinbase has given a user possession of the private keys associated with a bitcoin, Coinbase is no longer under any obligation to transact with that user again or exchange the bitcoin for another currency.
Because Coinbase is not the “issuer” of bitcoin and bitcoin is not a “payment instrument” rather it is unique property, Coinbase is not engaging in activity described in the “payment instrument” prong of the Money Transmitter Act.
B. Bitcoin is Not “Stored Value” as Defined Under California Law
Coinbase is not "selling or issuing stored value" Cal. Fin. Code § 2003(o).“Stored value” is defined as an agreement to exchange monetary value for a promise to later redeem that value for a fixed amount, “evidenced by an electronic or digital record” Cal. Fin. Code § 2003(v). Coinbase does not offer redemption value for bitcoins sold to its customers. Coinbase service merely transfers property ownership of the private keys to a bitcoin. At no point in time is Coinbase obligated to redeem any specific stored value because the value of a bitcoin fluctuates wildly with the market. Furthermore, Coinbase is not the “issuer” as discussed above because bitcoin is “issued” by the network's proof of work algorithm and verified by peers in the public blockchain ledger.
C. Coinbase Does Not Accept Funds to Be Transmitted to a Third Party
California Finance Code requires that services "receiving money for transmission" register as Money Transmitters Cal. Fin. Code § 2003(o). A service accepts money for transmission where it accepts funds from one user and subsequently transfers those funds to a third party within or outside the United States Cal. Fin. Code § 2003(s). The basis of Coinbase business model is not the transmission of money, nor does it transfer funds, money, instruments, or bitcoin from one user to another. Coinbase purchaces property in the form of each unique bitcoin from its users, Coinbase is then free to keep, sell or destroy that property at will. The fact that Coinbase has simultaneous purchase and sell features does not change the nature of this because at no point in time as any property or bitcoin transmitted anywhere other than from a user to Coinbase, or vice versa.
This conclusion is further evidenced by the Department of Business Oversight's (formerly the DFI) concurrence that “Foreign Currency Exchange Services - Not Subject to money Transmission Act” Available at HYPERLINK "http://www.dfi.ca.gov/Laws/orders_files/Opinion-Foreign_Currency_Exchange_Services.pdf"http://www.dfi.ca.gov/Laws/orders_files/Opinion-Foreign_Currency_Exchange_Services.pdf. There the Department concluded that the sale of pesos in exchange for a fee and U.S. Dollars was not a money transmission. This conclusion was drawn because the service did not transmit money to a third party and it did not remain liable to later redeem value for the pesos. The service described in the opinion is strikingly similar to the service offered by Coinbase.
Because Coinbase does not receive money to be transmitted to a third party and it does not obligate itself to later redeem value for a bitcoin, it does not fall under the regulation of this prong of the California Finance Code.
II. File for a Money Transmitting License in California and Delaware
Should regulations emerge that more clearly place bitcoin under any of the definitions described above, it would be prudent for Coinbase to register for a Money Transmitting License in California and Delaware.
Business entities are most likely subject to jurisdiction where they maintain their principal place of business, and often as well in the state of incorporation. 28 U.S.C. § 1332(c)(1) provides that "a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business." Relatively recently, the U.S. Supreme Court ruled that the “principal place of business” is the “nerve center” or decision making headquarters of an entity, as opposed to a main place of manufacturing or lower level of operations Hertz Corp. v. Friend, No. 08-1107, slip op. at 1 (U.S. Feb. 23, 2010).
Because Coinbase main office is located in San Francisco, California and the state of incorporation is in Delaware at the very least Coinbase is subject to jurisdiction and regulation in each state mentioned. Therefore, the first applications for a MTL should be completed in California and Delaware if Coinbase required to comply with money transmitting regulation.
III. File for a Money Transmitting License in all 47 States with Applicable Regulations
The nature of Coinbase business is such that it has users across the nation. At the time of writing 47 states have related legislation regarding money transmission. South Carolina and Montana do not regulate money transmission, New Mexico only regulates “negotiable instruments” which is not applicable to bitcoin, for similar reasons as discussed above. Coinbase possibly avails itself to the laws and regulation of each state it allows customers to transact in. Therefore, Coinbase could be subject to jurisdiction in every state where its services are available.
Individual analysis of each state's money transmitter regulations are beyond the scope of this document. However, I would be happy to research any specific state or federal regulation in furtherance of the application process and pursuit of employment with Coinbase.
submitted by vinnie_james to LawSchool [link] [comments]

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Bitcoin Money Transmitter License Guide. Throughout the world, the idea of using money to pay for goods and services is not a complicated thought for consumers. On the business side of transactions, the movement of money can become more complex, especially for companies that operate as money transmitters. While there is no hard and fast definition of a money transmitter that covers all ... California Money Transmitter Licensing Requirements: Who needs to be licensed as a money transmitter licensee? Under California statute, businesses receiving money for transmission within or outside the US must obtain a money transmitter license in California, whether the transmissions are physically in the state, or with, to or from persons located in California. A bitcoin money transmitter license is the same as the regular MTL required for money services businesses in the United States. Any bitcoin based business that offers the services of transmitting virtual money or currency from one person or place to another is classified as a money transmitter. This means that in most US states, you need to get a license before beginning operations as a ... Keep reading for a brief overview of how crypto is viewed across states and whether you require a bitcoin money transmitter license. How the Federal Government Views Cryptocurrencies Altogether the federal government’s stance toward cryptocurrencies has been to leave states alone in determining how to regulate crypto. The license application process, once complete, is indeed a one-time deal, unless the licensee makes a mistake, misses a renewal period, and needs to reapply. But a state money transmitter license is not like a driver’s license or fishing license that you slip into your wallet and forget about unless a government official asks to inspect it.

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Bitcoin is Money & Money Transmitter License Criteria, U.S. v. Harmon

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