Tag: cryptocurrency

By James Preston for SA Crypto

SA Crypto’s chat channels were abuzz last night as MyBroadBand released an article reporting on a big decision by FNB: The bank announced that they will be shutting down all bank accounts related to cryptocurrency businesses. This includes large exchanges such as Luno, VALR, AltCoinTrader, iCE3X among others. The closures will be effective from end of March 2020.

The news stirred numerous conversation on the groups as users were stunned at the shortsighted move by what is seen as a progressive bank. First it was on Telegram where a user shared the article, were immediately the response was a negative one.

30 minutes later, SA Crypto’s primary Whatsapp group began fluttering with chatter around the subject.

The conversation continued for some time, with very little positive outlook. The reasonable users among the group objectively hoped that such a move by FNB would be an isolated one, a perspective reaffirmed by VALR CEO, Farzam Ehsani.

Ehsani weighed in on the conversation on both Telegram and WhatsApp, eventually stating that he would do an AMA (Ask Me Anything) on his Twitter profile to discuss his viewpoint as the CEO of a major cryptocurrency in South Africa. Especially considering his previous role as “Head of Blockchain” at Rand Merchant Bank, a sister division to FNB.

After some interesting perspective from SA Crypto users, including a Bitcoin “Over The Counter” broker, Ehsani announced his AMA.

In addition to his AMA, Ehsani shared a public statement to all VALR users assuring them of their continued positive relationship with other banks in South Africa, and such a move by FNB wouldn’t adversely affect operations.

Meanwhile, Luno have released an official statement on their website, along with FAQs around how the move by FNB could impact existing Luno customers. The statement confirms that Luno is affected by FNB’s decision, as they anticipate their FNB business bank account being closed in the second quarter of 2020.

SA Crypto was alerted to this news on a recent visit to the AltCoinTrader offices, where one of the executives revealed they had just come back from a meeting with their relationship manager at FNB. The manager disclosed to AltCoinTrader that FNB was planning the closure, stating that FNB’s executive committee were considering its risk appetite, and deemed “virtual currencies” as too unclear from a regulatory perspective and thus were going to announce the discontinuation of banking support.

At the time, SA Crypto was unable to confirm the news, with it now being officially made clear in a letter from FNB.

Both iCE3X and Luno have responded to the FNB announcement, stating that, like VALR, they have good relationships with a number of other primary banks in the country, and deposits and withdrawals will be able to continue as normal, with FNB bank details requiring a change. Eugéne Etsebeth, COO at iCE3X, confirmed on Twitter this morning that clients would be unaffected by FNB’s announcement.

The move does raise some concerns for cryptocurrency users in South Africa, as it opens the door for other banks to question their relationships with cryptoasset companies. It would be extremely surprising however to see these banks follow suit, as the revenue generated from banking fees with these companies must be considerable, although the fact that FNB are willing to sacrifice such revenue is worrying to say the least.

FNB have stated they are open to reversing this decision should South African regulators provide further clarity on virtual currencies.

The news comes in conjunction with equally stunning news from RMB Holdings, who announced last night that they will be selling off R130 billion worth of First Rand shares in a major portfolio restructuring move. The figure is the total sum of the full 34% stake RMBH has in First Rand Limited, the company that operates FNB.

In reaction to the announcement, former FNB CEO Michael Jordan took to Twitter to share his surprise.

The RMB Holdings statement did not give a reason for the unbundling of the First Rand shares, but said there would be a detailed explanation before the end of the first quarter 2020.

It is strangely coincidental that the announcement comes on the same day First Rand-owned FNB announce their distancing from cryptoasset companies. And while it would be irresponsible to jump to conclusions, the gravity of both of these announcements makes it difficult not to.

By Kevin Lancaster for MyBroadband

Discovery Bank, Bank Zero, and TymeBank – South Africa’s newest banks – are set to “disrupt” the local banking scene in 2019.

Disrupt – an almost meaningless word which is akin to “millennial” in terms of its flagrant use by anyone who wants to show they understand trends and marketing – is not enough, however.

The new banks must destroy everything in their path, particularly the banking fees South Africans pay today.

We recently showed that compared to Bitcoin and Ethereum, and their respective blockchains, local banks are slow and cumbersome.

Where it took Bitcoin and Ethereum under 10 minutes to send tokens from one account to another, a local bank transfer from Standard Bank to Absa took almost 12 hours.

The cryptocurrency transfers did accrue a small transfer fee while the bank-to-bank transaction was free, but there are no monthly fees for most cryptocurrency wallets – unlike a bank account.

The potential of cryptocurrency transactions is not truly realised with local payments, however, and where they truly shine is in international payments.

While maintaining fast transfer times regardless of where in the world you send tokens, the fees you pay do not change. If you send Ethereum to Durban or Dubai, it will take the same amount of time and you will be charged the same fee.

The same cannot be said for bank transactions. “International fees” are charged when you make a payment across a border.

A practical example of this is when you pay your Netflix subscription fee, you pay extra – as the money goes to the company’s operation in Amsterdam.

A Netflix Premium subscription costs R169, with a transfer fee of R4.65 added on top of this.

International fees
These bank fees extend to “currency conversion” charges, too, which means that if you make a payment in an international currency with your card, you will have to pay for the pleasure.

Nedbank, Absa, FNB, and Standard Bank all charge this fee, which ranges from 2% to 2.75% – depending on which bank you are with. Capitec told MyBroadband that it does not charge a currency conversion fee.

While 2% does not sound like much, this accumulates rather quickly when making multiple transactions.

I discovered this on a recent work trip to the US, where I used my South African credit card to pay for items in US dollars.

After checking my online banking a couple days into my trip, I immediately switched to drawing cash for the day and sucking up the once-off withdrawal fee as opposed to making all payments with my card.

And yes, there is an “international fee” when withdrawing cash from an ATM in a foreign country.

Before switching to cash, these are the international fees which I accrued on my card:

R5.47
R6.99
R16.03
R13.56
R4.60
R0.79
R8.01
R3.37
R5.48
R313.72

The total: R378.02.

Whether these fees are implemented by the local bank, international banks, or a combination of the two is irrelevant – as the consumer this is what you pay.

Admittedly, the example of international transactions is an extreme one but it nonetheless serves as a reminder of the culture of fees worshipped by local banks.

These fees extend far beyond international payments and see users being charged to send an email payment confirmation to a recipient.

Before you fill in the text box at the bottom of your online payment confirmation window, entering the beneficiary’s email address so the bank will send them a mail confirming your payment was made, first check how much it will cost.

For me it was R1.10. My bank charged me R1.10 to send an automated email confirming a payment – another discovery made during the fee investigation.

Discovery Bank, Bank Zero, and TymeBank have all talked a big game about disrupting the local banking scene when they launch.

Let us hope they can deliver on their promises and that they will do more than merely disrupt – they must destroy and replace.

SA is most crypto-friendly country in Africa

By David Kariuki for Cryptomorrow 

French banking group BNB Paribas and IT company Capgemini has released a report stating that South Africa is Africa’s most crypto-friendly country having allowed cryptocurrency payments, trades and investments to flourish almost without restrictions.

The country is also leading in Africa with regard to crypto regulation, adoption and development, which is not a surprise because the country leads in many areas and is Africa’s most sophisticated economy. For instance, it hosts a number of bitcoin ATMs and digital currency exchanges – including Luno. Luno has more than two million customers around the world and allows people to buy crypto using Rand fiat.

In South Africa, the scenario is developing favorably for cryptocurrency industry because of the open-mindedness of the South African Reserve Bank (SARB). The bank does not recognise crypto as legal tender but also has not banned or prevented trades related to cryptocurrrencies. The bank announced in April that it would create guidelines for cryptocurrency markets in the country. It has also tested an inter-bank settlement system called Project Kohka, which hopes to use the Ethereum blockchain in order to speed up payments.

A Bitcoin ATM in Nelson Mandela Square, Sandton. Credit: LinkedIn

Also, in South Africa, a number of companies including banks are starting to set up operations relating to cryptocurrencies. Baclays Bank has also said that it will host a number of events to help audience understand benefits and risks of cryptocurrencies.

R552bn wiped off cryptocurrencies after hack

By Eric Lam, Jiyeun Lee and Jordan Robertson for Bloomberg / Fin24 

The 2018 selloff in cryptocurrencies deepened, wiping out about $42bn (about R552bn) of market value over the weekend and extending this year’s slump in Bitcoin to more than 50%.

Some observers pinned the latest retreat on an exchange hack in South Korea, while others pointed to lingering concern over a clampdown on trading platforms in China. Cryptocurrency venues have come under growing scrutiny around the world in recent months amid a range of issues including thefts, market manipulation and money laundering.

Bitcoin has dropped about 12% since 5 pm New York time on Friday and was trading at $6v756, bringing its decline this year to 53%.

Most other major virtual currencies also retreated, sending the market value of digital assets tracked by Coinmarketcap.com to a nearly two-month low of $298bn. At the height of the global crypto-mania in early January, they were worth about $830 billion.

Enthusiasm for virtual currencies has waned partly due to a string of cyber heists, including the nearly $500m theft from Japanese exchange Coincheck Inc. in late January. While the latest hacking target – a South Korean venue called Coinrail – is much smaller, the news triggered knee-jerk selling, according to Stephen Innes, head of Asia Pacific trading at Oanda in Singapore.

“This is ‘If it can happen to A, it can happen to B and it can happen to C,’ then people panic because someone is selling,” Innes said.

A cryptocurrency slump

The slump may have been exacerbated by low market liquidity during the weekend, Innes added.

“The markets are so thinly traded, primarily by retail accounts, that these guys can get really scared out of positions,” he said. “It actually doesn’t take a lot of money to move the market significantly.”

Coinrail said in a statement on its website that some of the exchange’s digital currency appears to have been stolen by hackers, but it didn’t disclose how much. The venue added that 70% of the cryptocurrencies it holds are being kept safely in a cold wallet, which isn’t connected to the Internet and is less vulnerable to theft. Two-thirds of the stolen assets – which the exchange identified as NPXS, NPER and ATX coins – have been frozen or collected, while the remaining one third is being examined by investigators, other exchanges and cryptocurrency development companies, it said.

Coinrail trades more than 50 cryptocurrencies and was among the world’s Top 100 most active venues, with a 24-hour volume of about $2.65 million, according to data compiled by Coinmarketcap.com before news of the hack. Read about Trusted Brokerz and start capitalizing on Bitcoin to make virtual currencies part of your portfolio.

The Korean National Police Agency is investigating the case, an official said by phone.

In China, the Communist Party-run People’s Daily reported on Friday that the country will continue to crack down on illegal fundraising and risks linked to Internet finance, quoting central bank officials. The nation’s cleanup of initial coin offerings and Bitcoin exchanges has almost been completed, the newspaper said, citing Sun Hui, an official at the Shanghai branch of the central bank.

Reserve Bank trials blockchain successfully

By Hanna Ziady for Business Live 

Payments between SA’s banks, averaging R350-billion daily, can be settled using blockchain technology, tests demonstrate.

“Project Khokha”, whose results the Reserve Bank announced on Tuesday, successfully trialled interbank settlements using distributed ledger technology (DLT), of which blockchain, the mainstay of cryptocurrencies such as bitcoin, is one type.

Distributed ledgers use independent computers to record, share and synchronise transactions in online ledgers, without the need for an independent third party to verify those transactions. DLT could “fundamentally change the financial sector, making it more efficient, resilient and reliable”, according to the World Bank. In the long term, it could usurp a large portion of the work performed by trusted intermediaries such as banks and clearing houses.

DLT developments

Central banks around the world, meanwhile, are grappling with the implications of financial technology (‘fintech’) for financial markets and their supervisory roles in those markets. That Project Khokha has been a success puts the Bank at the cutting edge of developments in DLT, alongside the likes of the Bank of Canada and Singapore’s central bank.

The trial was designed, built and executed in three months. Key role-players included the Bank’s fintech unit, established in August 2017, and SA’s six biggest banks, as well as newcomer Discovery Bank.

The results show that the typical daily volume of SA’s payments system, averaging R350bn, could be processed on a distributed ledger in less than two hours with full confidentiality of transactions.

This has considerable implications for future applications of blockchain technology in SA. Future “blockchain experiments” might involve other central banks on cross-border payments, said Bank governor Lesetja Kganyago.

The Bank had “pushed the envelop in a number of ways” on the project, said Peter Munnings, technical lead of enterprise delivery at New York-based ConsenSys, a blockchain software technology firm and the Bank’s technology partner.

“There are many issues to consider before the decision to take a DLT-based system into production can be taken,” the Bank said.

“Some of these issues relate to the practicalities of implementation, but also to legal and regulatory factors, and to the broader economic impact.”

One of the objectives of Project Khokha was to better understand how the South African Multiple Option Settlement (SAMOS) system would integrate with a DLT system. SAMOS is the current interbank settlement system provided by the Bank, allowing banks to settle their obligations in real-time.

By Jillian D’Onfro for CNBC 

Google is cracking down on cryptocurrency-related advertising.  The move follows a similar ban by Facebook earlier this year. The company will no longer allow ads about cryptocurrency-related content, including initial coin offerings (ICOs), wallets, and trading advice across any of its ad platforms.

The company is updating its financial services-related ad policies to ban any advertising about cryptocurrency-related content, including initial coin offerings (ICOs), wallets, and trading advice, Google’s director of sustainable ads, Scott Spencer, told CNBC.

That means that even companies with legitimate cryptocurrency offerings won’t be allowed to serve ads through any of Google’s ad products, which place advertising on its own sites as well as third-party websites.

This update will go into effect in June 2018, according to a company post.

“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution,” Scott said.

Google’s hard-line approach follows a similar ban that Facebook announced earlier this year.

While the crypto-currency boom has produced a lot of excitement and wealth, it’s still a largely unregulated space and has spawned countless high-profile scams.

This news comes as Google releases its annual “trust and safety” ads report.

Google said it took down more than 3.2 billion ads in 2017 that violated its policies, which is nearly double the 1.7 billion it removed the year before.

Google parent company Alphabet makes roughly 84 percent of its total revenue from advertising, so convincing advertisers that its ecosystem is safe and effective is critically important.

By Jillian D’Onfro for CNBC 

Over 27‚000 cryptocurrency investors have fallen victim to one of the biggest Bitcoin scams to hit South Africa, TimesLive reported.

Hawks spokesman Captain Lloyd Ramovha confirmed the commercial crimes unit was investigating complaints against BTC Global‚ a company which asked investors to send their cryptocurrency to an online wallet address.

Many of the victims were South African, but the extent of the scam spread to the US and Australia.

“The amount is over $50 million and could rise as more victims come forward‚” said Ramovha.

He said the company was being investigated for violating the Financial Advisory and Intermediary Services Act, but could not confirm whether it was a Ponzi scheme or if the people behind it are South African.

Victims from South Africa told TimesLive they had invested between R16‚000 and R1.4 million with BTC Global.

BTC Global’s selling point was the skill of its “master trader” Steve Twain, whom many victims believe does not exist.

BTC Global promised investors that if they sent their Bitcoin to its wallet address they would receive guaranteed returns of 14% per week.

Its website now displays a message which states that Steven Twain is missing and calls for victims to stop threatening harm to the admin team.

Source: MyBroadband

Craig Wright, the self-proclaimed inventor of Bitcoin, is accused of swindling more than $5-billion worth of the cryptocurrency and other assets from the estate of a computer-security expert.

Wright, who claimed in 2016 that he created the computer-based currency under the pseudonym Satoshi ‎Nakamoto, allegedly schemed to use phony contracts and signatures to lay claim to bitcoins mined by colleague Dave Kleiman, another cryptocurrency adherent, who died in 2013, according to a lawsuit filed by Kleiman’s brother.

Kleiman’s family contends they own the rights to more than 1 million Bitcoins and blockchain technologies Kleiman mined and developed during his lifetime and that the assets’ value exceeds $5 billion, according to the Feb. 14 filing in federal court in West Palm Beach, Florida.

“Craig forged a series of contracts that purported to transfer Dave’s assets to Craig and/or companies controlled by him,’’ lawyers for Kleiman’s family said in the complaint. “Craig backdated these contracts and forged Dave’s signature on them.’’

Wright, an Australian who lives in London, couldn’t immediately be reached for comment on the suit, which also accuses the entrepreneur of violating partnership duties to Kleiman and unjustly enriching himself at his colleague’s expense. There is no attorney listed for Wright on the docket.

Wright and Kleiman formed a Florida-based company, W&K Info Defense Research LLC, in 2011 to focus on cybersecurity, according to the court filing. The pair also had earlier worked together on the development of Bitcoin and had extensive mining operations, according to the family’ s lawsuit.

The pair controlled as many as 1.1 million Bitcoins at the time of Kleiman’s death, according to the suit. They were held trusts set up in Singapore, the Seychelles Islands and the U.K., the suit says.

Wright said in a 2016 blog post and interviews that he was the main participant in a team that developed the original Bitcoin software under the pseudonym Satoshi Nakamoto. After skeptics questioned the claims, Wright said that he decided not to present any further evidence to prove that he is the creator of Bitcoin.

In the filing, Kleiman’s brother includes what he says is email traffic between himself and Wright in which the entrepreneur indicates he may have been holding 300,000 of Kleiman’s Bitcoins.

Dave “mentioned that you had 1 million Bitcoins in the trust and since you said he has 300,000 as his part,’’ the computer expert’s brother wrote. “I was figuring the other 700,000 is yours,” he added in the email. “Is that correct?”

“Around that,” Wright wrote back. “Minus what was needed for the company’s use.”

The case is Ira Kleiman v. Craig Wright, No. 18-cv-80176, U.S. District Court for the Southern District of Florida.

Source: MyBroadband

Top 10 richest people in cryptocurrency

Forbes has released its list of the richest people in the cryptocurrency community.

The net worth of those on the rich list is denoted in range estimates based on estimated cryptocurrency holdings, post-tax profits from cryptocurrency trades, and stakes in cryptocurrency-related businesses.

The net worth estimates reflect the estimated holdings of the rich list as of 19 January 2018.

Forbes acknowledged that it may have missed certain major cryptocurrency holders due to the obfuscated nature of blockchain transactions.

The top 10 richest people in cryptocurrency, according to Forbes, are below:

Source: MyBroadband 

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