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Back to Square One
Blockchain technology has the potential to change the form of internet data storage and transfer and to assist in the elaboration and implementation of new solutions to secure the digital environment. In this issue, we recommend the text “4 Promising Use Cases Of Blockchain In Cybersecurity”, published by Forbes, which lists 4 models of blockchain use in cybersecurity.

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Block News

QuadrigaCX is being investigated by four institutions of different countries – As reported in our newsletter from 02.12.2019, 03.12.2019 e 04.11.2019, there are still many chapters to be written in the QuadrigaCX history. This time, George Kinsman, assigned judicial administrator and member of Ernst & Young (EY), disclosure, through a report, some information about EY’s attempt to retrieve the exchange money in favor of its creditors, in both cryptoassets and fiat money. In this report, Kinsman describes that the exchange is being investigated by the Royal Canadian Mounted Police, by the FBI, by the Australian Investigative Agency, and by another institution not disclosed. To access the report, click here. (COINDESK; 08.27.19)

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Network from Ukraine nuclear plant was used by its workers to mine cryptoassets – The Ukrainian Secret Service – SBU is analyzing a possible security breach at their nuclear plant after discovering that their employees were connecting to the internet through the local network to mine cryptoassets. The investigators are examining if an intruder has used the mining platforms to access the nuclear plant network to collect information about the nuclear plant system, such as data related to its security system. The incident took place in July at the South Ukraine Nuclear Power Plant, located at southern Ukraine. The authorities confiscated some equipment and several employees, besides not being arrested, are being indicted by the case. (ZDNET; 08.22.2019)

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Swiss Financial Market Supervisory Authority (“FINMA”) grants licenses to cryptoassets banks – The banks SEBA Crypto AG and Sygnum AG have been authorized to offer cryptoassets banking services under FINMA supervision. The banks are allowed to issue, store, commercialize and control cryptoassets, convert them into fiat currency such as Swiss francs, American dollars or Euro. However, to render these services, they will have to fulfill some requirements made by FINMA, yet not disclosed to the public. Besides the regulatory inflexibility, Swiss is still much more advanced than other countries regarding the reception of business involving cryptoassets. (BITCOIN.COM, 09.04.2019.)

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Brazilian Securities and Exchange Commission (“CVM”) convene a public hearing to deliberate on the creation of experimental regulatory environment – The CVM announced a draft of a Normative Ruling to the public hearing to establish a regulatory sandbox. The draft was made from researches on “international best market practices in formation and operating regulatory sandboxes”. According to the CVM Superintendent of Market Development, Antonio Berwanger, regulatory sandboxes are an effective instrument in fostering innovation in the financial and capital market by temporarily modulating regulatory burdens and advising entrepreneurs on the legal and regulatory standards applicable to their activities. Comments on the draft shall be sent until September 27, 2019, to the email audpublicaSDM0519@cvm.gov.br. (CVM, 08.28.2019)

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Cielo accepts cryptoassets payments on its devices through QR Code – Cielo, one of the leading payment solution companies in Brazil, is now accepting cryptoassets as payment methods. The payment is possible due to the integration between Uzzo and Criptohub, which allows Cielo’s machine to generate a QR code, which, when scanned by the user’s device, ccompletes the payment. Cielo’s goal is to further expand alternative means of payment, aiming the development of a functionality that is fully operated by the application. (CRIPTOFACIL, 09.02.2019.)

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Third parties fundraising for investments in Bitcoin requires the approval of the Brazilian Securities and Exchange Commission (“CVM”) – According to the agency, the advertisement of the investments in Bitcoin offers and other cryptoassets to Brazilian citizens, made by nationals or foreign people, requires authorization from CVM, even if the applications are made entirely with cryptoassets. (COINTELEGRAPH, 09.10.2019.)

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Brazilian Central Bank recognizes cryptoassets as “assets” and includes them in its statistics – According to an official publication, the Brazilian Central Bank recognized cryptoassets as “assets” and included the trading of digital assets in the country’s trade balance statistics. Thus, the autarchy followed the guidance of the Balance of Payments Statistics Committee, an advisory body to the International Monetary Fund (IMF) Statistics Department. Following the recommendations of the “Treatment of Crypto Assets in Macroeconomic Statistics” it considered crypto mining as a productive process. (COINTELEGRAPH, 08.26.2019.)

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France will not charge taxes from trading operations of crypto-to-crypto – According to French Economy Minister, Bruno Le Maire, crypto-to-crypto transactions are exempt of income taxation. The gains obtained with cryptoassets will only be taxed at the time of their conversion to fiat currencies. (THEBLOCKCRYPTO, 09.12.2019)

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US Government has a “hidden weapon” to suppress misuse of cryptoassets – The Banking Secrecy Act, a law wich is nearly 50 years old, states that financial institutions in the United States have to help law enforcement agencies sin verifying money laundering practices. The law could authorize the government to impose strict controls on the application of blockchain-based currencies, under the pretext of combating illicit financial practices. (MIT TECHNOLOGY REVIEW, 09.06.2019)

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A new set of global rules on combating money laundering changes the scenario of exchanges – The rules for crypto trading have been established by the Financial Action Task Force (FATF), an intergovernmental organization that sets standards for combating money laundering and financing of terrorism. The rules, which involve the sharing of users’ personal information, are controversial, as they differ, somewhat, from the idea of privacy brought about by cryptocurrency operations. However, adopting these practices will make the industry more attractive and safe for leading institutions and users. (MIT TECHNOLOGY REVIEW, 08.15.2019)

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The Brazilian House of Representatives is close to initiate a Parliamentary Commission of Investigation (“CPI”) of cryptoassets – According to the newspaper Correio Braziliense, Federal Representative Áureo Ribeiro defends the opening of a CPI to investigate the Brazilian cryptoassets market, especially the exchanges. The purpose of the CPI will be to investigate crimes involving “financial pyramids”, “Ponzi schemes” and other types of financial illicits. The request will be based on an estimative that 4 million Brazilians citizens have already been victims of cryptoassets scams. (CORREIO BRAZILIENSE, 09.05.2019; ÉPOCA, 09.15.2019)

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Blockchain Desk Recommends

Swiss Financial Market Supervisory Authority (FINMA) has published its new rules on blockchain-based means of payment approval requirements. In this issue, we recommend reading its “Payments on the Blockchain” manual, which provides information on the application of these requirements to financial service providers under FINMA supervision.

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Blockchain Desk.