Hot Topics

Advertisement

Advertisement

Cryptocurrency In The UK. Blockchain Regulation | Crypto-Geography

Cryptocurrency In The UK. Blockchain Regulation | Crypto-Geography

We continue talking about how the cryptocurrency sphere is developing in different countries.

Today we review the state of crypto in the United Kingdom: what’s new with cryptocurrency regulations, what are the FCA and Coinbase, is cryptocurrency legal in the UK, and other highlights.

Cryptocurrency Regulations in the UK

The UK is one of the leaders of fintech industry, counting more than 1,600 fintech firms and generating GBP 6.6B of annual revenue per year. They are developing so well that they can overtake the title of fintech unicorn capital of the world from San Francisco. However, the UK is not as favourable to cryptocurrency as it is to the fintech sphere.

Thankfully, the UK hasn’t banned crypto, but still it hasn’t issued any specific laws for digital money like Bitcoin, Ethereum, Stellar etc. Basically, the UK hasn’t implemented any active measures and is mostly sticking to the ‘wait and see’ strategy.

The Bank of England claimed that the size of the cryptocurrency market is not big enough to influence the financial stability of the United Kingdom or put their monetary system at risk. The Bank of England even decided not to classify digital currencies as money because of their limited adoption within the UK’s financial system in 2014. Of course, since then, the number of use-cases has significantly increased, though the definition of cryptocurrencies by the BoE remains the same. 

One of the very few initiatives in the cryptocurrency sphere is the creation of the Cryptoassets Task Force. It is a group of senior representatives from the Bank of England, the Financial Conduct Authority (FCA) and HM Treasury that is studying cryptocurrencies and their technology, evaluating the associated risks and potential benefits, and developing an approach to cryptocurrencies within UK regulations. However, the working group hasn’t published any significant results of their findings yet.

Another step to was made for crypto when the FCA announced that 29 companies were accepted in to the 4th regulatory sandbox in July 2019. 11 of these firms are blockchain startups. The regulatory sandbox will allow companies to test their projects in the UK market in a regulatory environment. 

Recently, the FCA published a guidance on digital currencies illustrating “a number of different elements that firms need to take into account when considering the regulated perimeter”.

The FCA also provided several important clarifications and definitions: 

  • Cryptocurrencies like Bitcoin and Ethereum are classified as exchange tokens. They won’t be regulated but will fall under anti-money laundering regulations.
  • Security tokens are classified as a specified investment and will fall under FCA jurisdiction. 
  • Utility tokens will not be regulated by the FCA only if they are defined as e-money.
  • Stablecoins can be defined as e-money, which is subject to the FCA’s control.

When it comes to taxation, Her Majesty’s Revenue and Customs were among the first authorities in the EU to release clear guidance on cryptocurrency taxation in 2014:

  • Mining income is not subject to Value Added Tax
  • Loss and gains from holding and selling virtual currencies will be treated as gains made in other commodities or currencies
  • Digital currencies purchased and stored for personal reasons and not speculation won’t be taxed
  • The services and shops should pay value added tax (VAT) when they sell their services and goods for crypto in the UK etc.

The only thing the UK’s government has banned is investment products connected with cryptocurrencies like derivatives and Bitcoin futures. The main reason is to protect retail investors as the crypto market is highly volatile. The final rules of investment tools based on cryptocurrencies will be developed in 2020.

Is Cryptocurrency Popular in Britain?

The Bitcoin market in the United Kingdom is one of the most active and liquid markets in the world. According to CryptoCompare, the trading activity there is so significant that the UK is in the 11th place of the most active Bitcoin markets. 

However, like in any other country, not many people are aware of cryptocurrencies in Britain. According to a survey by the FCA, only 27% of people defined the term ‘cryptocurrency’ correctly. These citizens were mostly men aged 20 to 44 who had learned about crypto through online news and traditional media.

The majority of Brits buy crypto on online crypto exchanges. They don’t borrow funds and rely only on their own money to make such a purchase. According to the FCA, the most popular reasons cited for buying cryptocurrencies were as a gamble (31%), or as part of an investment portfolio (30%). Also, some of the respondents expect to get easy-money from crypto and become rich quickly, and 4% had a strong FOMO effect. Often they bought some cryptocurrency after speaking with friends or acquaintances and colleagues who said they made a profit with crypto. The main things that prevent them from buying crypto are the high risk and a lack of knowledge. 

Register for the CC Forum

The most popular coins among newbies in Britain are Bitcoin, Ethereum, and Litecoin, as they are the best known and often perceived to be the most ‘reliable’, having been around the longest and generated profits for people in the past. What’s interesting, people who are into crypto usually don’t have conventional or steady jobs and prefer freelance and part-time employment. 

If we take a look at the most popular coins in terms of trading volume of the cryptocurrency/GPB trading pair, we see that Bitcoin, as always, takes the very first place. The second place goes to Ethereum and then follows Litecoin. The fourth place is taken by XRP and then comes, surprise surprise, Ethereum Classic.

Cryptocurrency Business in the UK

The regulatory uncertainty bore fruit, and we can say that crypto business in the UK is not widespread. However, there are several notable industry players located in the United Kingdom.

BC Bitcoin

BC Bitcoin is a UK-based cryptocurrency brokerage founded in 2017. It offers the purchase and trade of over 100 different digital currencies including Bitcoin, Ethereum, XRP etc. It supports deposits and withdrawals in Pounds, Euros, and Dollars. 

The company is easier to contact and more responsive in comparison to other Cryptocurrency Brokerages.

CEX

CEX.IO became known as a cloud mining provider and owner of the “GHash.IO” pool, which in 2014 covered 42% of the total mining power of Bitcoins. In 2015, CEX.IO announced the suspension of cloud mining services due to lower bitcoin prices. 

In October 2016, “GHash.IO” was closed, and CEX.IO continued to function as an online cryptocurrency exchange service. The list of cryptocurrencies on the platform includes Bitcoin, Ethereum, XRP, Stellar Lumens, etc.

CloudHashing

CloudHashing is one of the largest BItcoin companies in the world, headquartered in London. The company was founded by a former software engineer of JP Morgan and a contractor for HSBC — Emmanuel Abiodun — in 2013. 

In 2014, they claimed that they had mined over 35k Bitcoins, worth over USD 21M, in eight months. However, in 2016 the company was shut down.

Coinfloor

Coinfloor is one of the most popular exchanges among British crypto enthusiasts. It was the first bitcoin exchange to be registered as a Bureau de change with HM Revenue & Customs.

Also, they were the first to launch an exchange-backed peer-to-peer marketplace for bitcoin trader UK. Buyers can send money right to a broker with a local UK bank transfer. Coinfloor is also the first exchange to employ a sophisticated algorithmic rounding engine for fee calculation.

Circle

Circle was established in 2013 and became a well-known company among cryptocurrency and blockchain enthusiasts thanks to its products: Poloniex Crypto Exchange, USD coin, Circle Pay, Circle Trade, and others. They identify themselves as a “crypto-powered and people-centric” platform. Circle has $250 million support from investors like Goldman Sachs, BitMain, BreyerCapital, General Catalyst, IDG Capital and Accel.

The Prospects of the Сrypto Industry in the UK

The prospects of the crypto industry in the UK are quite vague. Retail investors seem to be safe but the businesses suffer from lack of action from authorities. Lawmakers have taken a sitting-on-the-fence policy and are making very small steps to a clear cryptocurrency regulation environment. Industry figures claim that the UK needs to introduce crypto-focused regulation to clarify how cryptocurrency companies should operate there. Otherwise, Britain might fall behind other countries in this cryptocurrency race. 

This lack of conditions is already affecting some existing firms in the UK. For example, crypto exchanges are facing difficulties in opening bank accounts. According to CryptoUK, 73% of crypto companies have opened their bank accounts in other countries because of complications with banking in the UK. More than half of them were rejected and part of them even haven’t received any explanation from a bank.

Of course, positive moves towards the industry occurred when the FCA released guidance on crypto assets in July, however, it was a minor step. The environment is still confusing and too weak for crypto-related business.

The EU is going to implement the fifth Anti-Money-Laundering Directive in January 2020. The directive will introduce regulations for crypto wallet and exchange firms, forcing them to register with their local authorities. By that time, the United Kingdom will have left the EU so they’ll have to implement this practice by themselves.

The success of the crypto industry in the UK fully depends on the local authorities, who need to create clear conditions for cryptocurrency businesses. This is only a matter of time as the demand is huge. The only question that remains  is how long will it take for lawmakers to become proactive?

You can share this post!

Advertisement

“PayString” trademark filed by Ripple in the United States - what could it be?

“PayString” trademark filed by Ripple in the United States - what could it be?

Quick take

1 minute read

  • Another new trademark has been filed with the United States patent and trademark office by the San Francisco blockchain company Ripple.
  • Filed earlier this month, the filing for the trademark doesn’t give much away in regards to what kind of business or product will be marketed under its name. 

Another new trademark has been filed with the United States patent and trademark office by the San Francisco blockchain company Ripple.

Filed earlier this month on the 6th of November, the filing for the trademark doesn’t give much away in regards to what kind of business or product will be marketed under its name. Known as PayString, this trademark registration is very similar to that of the Ripplenet filing earlier in 2020.

The description indicates that PayString would cover a variety of different categories of electronic financial services.

Furthermore, this could be used for Fiat currency and digital currencies for omittance and gifts.

Earlier this year in August, the company failed to more trademark applications with the patent and trademark office in the US. This included the same application descriptions of PayString and Ripplenet.

You can see the filing here.

This year has been somewhat lacklustre for the XRP token. The price action for the currency has been slow to say the least but some believe that it could be getting ready for some further excitement before the end of the year.

It will also be interesting to see where the PayString trademark goes and what kind of product it will end up becoming.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Related TAGS:

You can share this post!

CNBC’s Brian Kelly predicts bullish YEAR for bitcoin

CNBC’s Brian Kelly predicts bullish YEAR for bitcoin

Quick take

1 minute read

  • Brian Kelly predicts a bullish future for bitcoin.
  • Bitcoin surpasses $16,000.

Brian Kelly, a well-known advocate for bitcoin recently said on the Fast money show for CNBC that the gains that bitcoin is currently making could be extended to a full year following the halving.

In an interview earlier this week on the 12th of November on the show, Brian said that the spike in high-profile and institutional investors that are moving towards cryptocurrency and specifically, bitcoin, could indicate an exciting and bullish future for the king coin.

“There's a lot of scope for upside. Most of the gains that come are the year after the halving, and we’re seven months into that year after the halving, and Bitcoin’s doing what it should do.”

The host, Melissa Lee said:

“So there could be five more months here of pretty good upside.”

Bitcoin has had a very exciting week this week after it surpassed the $16,000 key resistance level following what was a very exciting time during the United States presidential election. Bitcoin has seemingly come out on top with many people now predicting big things in the short and long-term for bitcoin.

You can see his interview here:

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

 

You can share this post!

How Ethereum 2.0 good see strong recovery for ETH

How Ethereum 2.0 good see strong recovery for ETH

Quick Take

1 minute read

  • As we come to the end of the year, there are numerous things occurring in the crypto space that no one could have predicted. 
  • With bitcoin jumping in value over the past few weeks/month, the alternative crypto market is quietly making gains simultaneously.

As we come to the end of the year, there are numerous things occurring in the crypto space that no one could have predicted. With bitcoin jumping in value over the past few weeks/month, the alternative crypto market is quietly making gains simultaneously.

Joseph Young, an analyst on Twitter has said that the second biggest cryptocurrency in the space, Ethereum has been performing extremely well over the past two months.

The upcoming Ethereum 2.0 deposit contract announced that the network upgrade would go live on the 1st of December. This has more than likely had a big impact on that open and how it has flourished in value over the past few months.

With the release of Ethereum 2.0, it would remove minors as the proof of work model is substituted for the proof of stake protocol. From here, users will be able to collectively verify transactions on the network without any need for a third-party to get involved.

You can see the tweet here from Joseph below:

Experience for users on the platform is more than likely going to change following the increase of the transaction capacity across the overall network.

The co-founder of Ethereum, Vitalik Buterin has confirmed that what was once a 15 transaction per second on chain processing speed could be increased to somewhere up to 5000 transactions per second on the blockchain upgrade.

The stagnation for Ethereum has technically allowed for the network to consolidate above significant moving averages and will be good for the future of the project.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

You can share this post!

How South Africa's scam history has made its investors stronger

How South Africa's scam history has made its investors stronger

South Africa is a country with great diversity and has a rich history which attracts about 2.5 million tourists into the country every year. But what’s more appealing about South Africa is its gold mining industry which is one of the aspects of the country that makes it very attractive to foreign investors. And it comes as no doubt that South Africa has the most industrialized economy in the continent as a whole. Besides natural endowments history and tourism, South Africa is one of the countries in Africa where the activities of the financial market are widespread. Due to its attractiveness, many individuals have fallen victim to scammers in the country in an attempt to make a decent investment. 

According to numerous reports, many investors and visitors have been scammed by South African citizens or even scammers who are established in South Africa because it is a hub for foreign investment. Scammers go a long way to defraud people and it is always almost genuine, which makes it difficult for the investors to notice. Some examples of these activities involve scammers posing as airport staff, engaging in unexpected chats, stealing from backpacks or carry-on bags, or even fake taxi drivers that take passengers to unknown destinations to defraud them. These scammers go as far as telling passengers to get a receipt for some kind of taxi voucher, bus card, or airport receipt, take them to the ATM to get that non-existent voucher, and then try to see you type your PIN before creating a distraction to snatch and run with your card. 

It does not only end at that the height of this was when several South African investors lost over $13 million to a bitcoin scammer. This is one of the most thought out scams in the history of forex scams in South Africa and there are several more of this magnitude or even worse. 

In this case, the mastermind of the bitcoin scam, Willi Breedt who was the CEO of Vaultage Solutions now defunct, allegedly scammed several investors of over 227 million rands ($13.35 million) and escaped to another country when things got messy. It all started when the scammer abruptly severed all connection and communication between his clients and going on vacation. After several reports from his investors to the authorities, he was under criminal investigation, during which he closed shop, it is alleged that he went into hiding as the investigations went on. Reports by local news outlets indicated that Breedt claims that his troubles started in 2019 when the crypto market slumped. However, the truth of the matter is that the markets immediately recovered sufficient enough for him to recover all his losses. Because the slump was short-lived as it occurred only between one day and recovered the next so all losses were recovered. But Breedt claims to have been bankrupt by the slump and went into hiding to avoid his clients. Investigations on his bank account uncovered fraud as some of his investors stated that they had about $3.15 million in their account and the next day there was nothing and Breedt was nowhere to be found.

The members of the crypto community in South Africa have not been amused by Breedt’s actions because it reflects back to them as untrustworthy. But what’s more, is that it has been so common in the country that investors are becoming more accustomed to it. Although scamming is still prevalent in the country, investors are becoming more cautious when investing in South Africa. They have been scammed so much so that they are now stronger and more aware of scamming activities in the country, making it an even harder task for scammers to cook up any story because they’ve seen all and heard all.

You can share this post!