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In this issue, we suggest the article “Criptoativos: Introdução sobre os conceitos, usos e responsabilidades associados a esses instrumentos”, published by the Brazilian Financial and Capital Markets Entities Association, which introduces initial concepts of cryptoassets and discusses the growth of this new economy segment.

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Block News

Visa, Mastercard, Stripe and Mercado Pago leave the Libra Association – One week after Paypal left the Libra, Visa, Mastercard, Stripe and Mercado Pago withdrew from the project leaving it without any major payment processor in the United States. Some of the members that left expressed their support for the project. Visa has justified its departure stating that it may return to the project if the Association meets all regulatory requirements. The remaining members are facing pressure from governments and regulators, which consider that the project poses a threat to the financial system. (THE VERGE; 10.11.2019)

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Cooperative family farmers from Bahia (a Brazilian state) start using blockchain technology in business – Farmers of the “Cooperativa de Jovens Água Fria”, headquartered at Bahia, are among the first users of the Online Bidding Solution application (Solução Online de Licitação – SOL, in Portuguese), purchasing app developed and available by Bahia and Rio Grande do Norte (Brazilian states) in order to beneficiary organizations from Projects Productive Bahia (BA) and Citizen Govern (RN) could participate on biddings for properties, services and works purchase or contracting. Besides that, it allows rural productors to send their proposals and follow the biddings’ results, accessing processes and other bidding’s data. Through the application, farmers have already purchased a notebook, printer, and GPS, and all contracts are digitally signed. (EL PAÍS, 10.05.2019.)

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Hong Kong Securities and Futures Commission (“SFC”) launches rules for cryptoassets management – In October, the Hong Kong Securities and Exchange Commission (SFC) published the “Proforma Terms and Conditions for Licensed Corporations which Manage Portfolios that Invest in Virtual Assets”. The guide provides rules for entities that invest and manage cryptoassets, one of which is the requirement for investors to maintain a net worth of 3 million Hong Kong dollars (approximately $ 380,000). Also, there must be sufficient human and technical resources compatible with the size of the project, according to the volume of assets they manage. (BITCOIN MAGAZINE, 10.08.2019)

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United States of America launches Crypto Ratings Council (“CRC”), a board created to grade criptoassets and their regulatory status – CRC claims its grading method is a “scalable, point-based rating system”. The highest rating is a score of 5 and means that the asset has characteristics very close to the Howey Test. Bitcoin, after passing the rating, was rated on scale 1, which is beneficial for investors as the asset is far from being considered a security. (MONEY TIMES, 10.01.2019.)

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Bermuda residents can now pay their taxes using cryptoassets – The Bermuda government has announced that it will allow the payment of fees, taxes and other services with USD Coin, a US dollar-linked stablecoin launched in 2018. The country also plans to release, together with startup Shyft Network, a digital identity program to benefit individuals who want to do business in the region. (COINDESK, 10.16.2019)

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Bitcoin tracking helps USA Police bring down a website that disseminated child pornography – The site worked as a platform in which its users exchanged bitcoins for videos containing illicit content. This case is a good reminder that, contrary to popular belief, bitcoin is not an anonymous or untraceable cryptoasset. As a result of this operation, the site operator and 337 others persons using it were indicted. (MIT TECHNOLOGY REVIEW, 10.16.2019.)

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Commodity Futures Trading Commission (CFTC) classifies the cryptoasset Ether as a commodity – CFTC President, Heath Tarbert, stated that Ether is subject to CFTC regulation. Besides, Tarbert said that he agrees with the initial Securities and Exchange Commission (SEC) guideline which considered that both Bitcoin and Ether are not necessarily securities. I his opinion, it is possible for a new asset to be born as security but eventually become a commodity. (YAHOO FINANCE, 10.10.2019.)

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UN Security Council’s Sanctions Committee report demonstrates that North Korea has been laundering money through a Hong Kong blockchain platform – The report points out that North Korea has hired a man named Julian Kim – who used the pseudonym Tony Walker-, owner of Marine China company, which, through its blockchain platform, was laundering stolen cryptoassets. A previous report informed that North Korea carried out spear-phishing scams, which resulted in losses of more than $ 2 billion to 17 countries. (COINDESK; 11.06.2019)

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European Union project says European Central Bank should issue public digital assets – Following Facebook’s plans to launch its cryptocurrency, the Libra, several regulators responded by saying the initiative would be a risk to the global financial sector. In response, the European Union has suggested that, in addition to the launch of crypto by the European Central Bank, the economic block should develop an approach to the treatment of crypto and may even ban very risky projects. (REUTERS, 11.05.2019)

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Power Ledger and an electricity distribution company conclude peer-to-peer solar energy negotiation test in India – The Australian Power Ledger, blockchain-based energy trading platform, and the Indian BSES Rajdhani Power Limited (BRPL) conducted a large-scale peer-to-peer energy trade test in the Dwarka region, Delhi, which initially relied on 5-6 megawatts (MW) of existing solar infrastructure. The purpose of the test was to provide participants with access to cheaper and renewable energy so that solar infrastructure owners could sell their surplus energy to neighboring families. (COINTELEGRAPH, 11.14.2019)

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Blockchain Desk Recommends
Digital identity has a high level of importance in payment systems and is a recurring theme in the technological world. Aiming to strengthen anti-money laundering regulation, the International Financial Action Task Force (“FATF”) published in early November the “Draft Guidance on Digital ID for Public Consultation“directed to governments, financial institutions and regulators, which we indicate in this issue.

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Blockchain Desk.