A day after crypto derivatives exchange BitMEX, its associated companies, and its executives got hit with charges, the exchange is still fully operational. 

Yesterday, the United States Commodity Futures Trading Commission (CFTC) charged Seychelles-based derivatives exchange BitMEX with operating an unregistered trading platform and breaking anti-money laundering regulations, but the company doesn’t seem phased. 

Relying on decentralisation to avoid the law

It has long been known that BitMEX has all but ignored even basic AML and KYC requirements, seemingly confident in relying on its decentralised structure to evade any repercussions. However, there is an increasing awareness that, although authorities in a specific country like the United States, may be unable to directly shutdown operations completely, they could still effectively disrupt operations by targeting key individuals and third-party service providers. 

Indeed, even BitMEX itself eventually acknowledged it couldn’t continue to ride roughshod over regulations indefinitely, introducing mandatory KYC requirements in April 2020. In July, BitMEX’s parent company, HDR Global Trading Limited, also restructured and rebranded as ‘100x Group’ , possibly in an effort to further distance itself from its past behaviour. But, it looks like that was far too little, far, far too late. 

According to a statement released yesterday, the CFTC has filed a civil enforcement action in the Southern District of New York, against five corporate entities and three individuals who are allegedly responsible for owning and operating the exchange. 

As expected, the individuals include Arthur Hayes, CEO of BitMEX, along with Ben Delo and Samuel Reed. The corporate entities charged are HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited (BitMEX).

Civil and criminal charges

The CFTC alleges BitMEX has illegally offered services to retail trades amounting to a staggering $1 trillion USD since launching in 2014, and is seeking disgorgement of all “ill-gotten gains”, civil monetary penalties, permanent trading bans, and injunctions against future violations. Specifically, the CFTC says BitMEX received $11 billion in BTC deposits and raked in over $1 billion in fees, “while conducting significant aspects of its business from the US and accepting funds from US customers.” 

The US attorney for the District of New York has also indicted Hayes, Delo, Reed, and BitMEX’s head of business development, Gregory Dwyer, for violating and conspiring to violate the Bank Secrecy Act. If convicted they could each face fines of up to $250K and up to five years imprisonment. 

Citing the audacity of the operation, FBI Assistant Director, William Sweeney, commented:

“One defendant went as far as to brag the company incorporated in a jurisdiction outside the U.S. because bribing regulators in that jurisdiction cost just ‘a coconut.’ Thanks to the diligent work of our agents, analysts, and partners with the CFTC, [the defendants] will soon learn the price of their alleged crimes will not be paid with tropical fruit, but rather could result in fines, restitution, and federal prison time.”

As of last night, Reed was the only individual to have been arrested. Meanwhile Sean Hecker and Jenna Dabbs, partners for Kaplan Hecker & Fink, the law firm representing Dwyer, sent out statements insisting that their client had complied with the CFTC investigation, had never even been invited to talk with US prosecutors, and had “always worked in good faith to comply with all applicable regulations and requirements. 

HDR Global responds

In a statement, an external spokesperson for HDR Global, said:

“We strongly disagree with the US government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously. From our early days as a startup, we have always sought to comply with applicable US laws, as those laws were understood at the time and based on available guidance.”

The BitMEX platform has continued to operate normally, and the company has assured customers that their funds are safe. 

AYO.NEWS says:

Yesterday’s charges were hardly surprising, and everyone at BitMEX and its associated companies must have seen them coming months ago. Indeed, we first reported about a possible US investigation of BitMEX way back in July 2019. Perhaps most surprising is that Samuel Reed hadn’t already ensured he was out of reach. 

Will the US be able to exert enough pressure in the right places to get BitMEX itself shutdown, or will this just turn into one very long and very costly circus that results in nothing more than a few more wealth crypto exiles who simply avoid every stepping foot on US territory (or anywhere with easy extradition) again? 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Romanian authorities have announced the country’s first ever auction of seized crypto assets. 

Earlier today, Romania’s National Agency for the Management of Seized Assets (ANABI) confirmed it will be holding an auction for confiscated Bitcoin (BTC) and Ether (ETH). The action is in response to a ruling from the Prosecutor’s Office in the Ploiesti Court, and involves cryptocurrency seized during a fraud case. 

ANABI has stressed that it will only transfer the crypto assets to a winning bidder who provides public addresses associated with a legal and registered crypto platform, adhering to Romania’s legislative norms, and complying with Know Your Customer and Anti-Money Laundering provisions. 

As previously reported, it was only in July 2020 that Romania finally brought its cryptocurrency regulations up to full 5AMLD standard. 

AYO.NEWS says:

It’s no secret that there’s a whole lot of cryptocurrency sloshing about in the criminal world, so we can expect to see this kind of thing become common as courts and various authorities become more comfortable with handling crypto. In February, the United States Marshals Service (USMS) auctioned over 4,000 confiscated Bitcoins (BTC), worth around $37.4m USD at the time. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Venezuelan authorities have launched a regulatory framework for cryptocurrencies, and  given the green light or a 90-day pilot of a crypto-powered “decentralised stock exchange.” 

On 23 September Venezuela’s National Superintendency of Crypto Assets and Related Activities published its first directives regulating crypto mining activities in the country – marking a U-turn for the government, which had previously opposed all cryptos except the national oil-backed Petro. Unfortunately for Venezuelan crypto miners, the new regulations  also oblige them to join a “national mining pool.”

And, in yet another attempt to use decentralised technologies to circumvent international sanctions, the crisis-ravaged South American country is launching ‘BDVE’ – what it claims to be the “first decentralised stock exchange in the world.” 

Apparently, users will be able to access the exchange from anywhere in the world, and trade both fiat currencies and “alternative digital assets”, without restrictions. Venezuela’s National Securities Superintendency will decide whether or not to grant a permanent license after the 90-day trial is complete. 

Though details are sketchy, BDVE appears to be Ethereum-based, though it isn’t known if the platform will support El Petro – the oil-backed national cryptocurrency.

Venezuelan President Nicolas Maduro has also announced a new “anti-sanctions bill”, which stipulates that private and state-backed crypto assets could be used to help work around international sanctions. 

As previously reported, in July Max Keiser predicted a Bitcoin hash rate war, pitting the United States against Iran and Venezuela, could drive prices to $500K USD. 

AYO.NEWS say.

With the COVID-19 pandemic decimating the global demand for oil, Venezuela’s main export, the country’s government is clearly even more desperate for foreign exchange than usual – hence its sudden acceptance of other cryptocurrencies and new decentralised stock exchange. 

But, will anyone really trust an exchange officially endorsed by one of the world’s most corrupt and incompetent governments? And, what about the 90-day trial? Will traders find themselves unable to access their assets at the end of it? 

We’d say this has about as much chance of working as the Petro. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

The ASX’s long awaited blockchain-based replacement for CHESS has been delayed again, after trading volumes surge during the pandemic. 

The Australian Securities Exchange (ASX) has announced it is delaying the introduction of its blockchain-based replacement for its Clearing House Electronic Subregister System (CHESS) system again, because it wants to triple its planned capacity and make other improvements before it goes live. 

The COVID-19 pandemic triggered a surge in trade volumes from March, causing the ASX to revise the requirements for its new blockchain-based clearance system – which has already been in development for four years.

Originally slated to launch in April 2021, in March 2020 the schedule was pushed back by 12 months, with testing expected to start in December and a full launch in April 2022. Now it appears there will be further delays, with a new implementation schedule set to be confirmed later this month.  

ASX is working with several firms on the project, including VMware and Digital Asset Holding (DA), and is utilising open-source contract programming language DAML. 

Though some have expressed concerns that the new system may suppress competition, by further enhancing the ASX’s monopoly position, and even threaten the survival of brokers, share registries, and other stakeholders, the ASX argues it will actually present new opportunities and greatly improve efficiency for everyone. 

AYO.NEWS says:

Though the delays are sure to frustrate many, and encourage opponents who have vested interests maintaining the status quo, the very fact that there has been such a surge clearly illustrates the need for a state of the art blockchain-based system. 

Staying with Digital Asset’s DAML, last month it was confirmed as the exclusive contract language for China’s Blockchain Services Network (BSN). 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

SingularityNET, the AI company best known for its Sophia robot, is considering ditching Ethereum and migrating to Cardano. 

The company has announced a partnership with IOHK – a company run by Cardano founder, Charles Hoskinson – and expressed serious concerns about the speed and costs of Ethereum, and the feasibility of the still in-development Ethereum 2. 

With the explosion in DeFi projects using Ethereum, gas fees have hit as high as $17 per transaction, and worsening congestion is causing major speed issues. 

According to Dr. Ben Goertzel, CEO and Founder of the SingularityNET Foundation, the partnership with IOHK, and possible transition of SingularityNET onto modern blockchains like Cardano, will enable SingularityNET-based services to scale.

Transitioning to Cardano would mean SingularityNET replacing its native ERC-20 AGI token, and abandoning the Solidity smart contract programming language, in favour of Cardano and its Plutus language. 

SingularityNET’s long-term plans involve the development of Artificial General Intelligence (AGI) – a machine intelligence that matches human intelligence. It will involve an ecosystem that enables different AIs to work together and even outsource to other, better suited, AIs. All rather Skynet.

As if that wasn’t scifi enough, Sophia – the face of SingularityNET – has applied for Maltese citizenship. 

AYO.NEWS says:

It’s obvious now that the DeFi revolution has overwhelmed Ethereum, and the much vaunted Ethereum 2 isn’t going to come to the rescue any time soon. But, though some will mourn the fall of Ethereum, there are now much better protocols out there – like Kadena’s 20-chain sharded and scalable layer-1 public blockchain that can handle 480,000 transactions per second, while keeping costs and environmental impact low, and security high. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020

Blockchain fantasy football platform Sorare has launched out of Beta in the UK, and welcomed Paris Saint-Germain as its 100th club.

The 2020 Champions League Finalist, which is the 100th club to join Sorare, has entered an agreement that will see digital collectibles of its players made available on the platform. This includes ‘legendary players’ from 2013, including David Beckham. 

From today, collectors and gamers in the UK and elsewhere will be able to freely buy, sell, and play with limited edition digital player cards of PSG players including Neymar and Kylian Mbappé, and historic players from 2013 such as David Beckham.

Discussing developments CEO of Sorare, Nicolas Julia, said:

“We​ are delighted to officially launch in the UK today, getting Sorare one step closer to closing game changing partnerships with major teams and clubs in the country. The​ European Fantasy Football market was estimated at close to USD 900M per annum1 in 2018, and expected to double in the next five years. Expanding into more European markets early on in our growth is a strategic step for Sorare both in terms of market acquisition and brand recognition with users, football teams, and investors alike. 

“With the inclusion of PSG to the platform, football fans in the UK and elsewhere will be able to leverage their football knowledge to play as a strategic manager and compete for rewards with skin in the game. PSG fans will be able to join the economy of their passions in a way that wasn’t possible before Sorare’s global fantasy football.”

While Head of Merchandising and Brand Diversification at Paris Saint-Germain, Fabien Allegre, added:

“Paris Saint-Germain is the new generation club. We are driven by our values of competitiveness. At the forefront of innovation, we are always looking ahead, looking to the future, to offer our fans new experiences. To constantly improve them, and to offer better coverage for our brand, Sorare will enable us to reach out to new, young communities, especially in Asia and America. We are proud of this new collaboration.”

The UK currently ranks 5th in terms of total numbers of Sorare users, though it is number one in terms of time spent per player on the platform. According to the company, its launch out of Beta paves the way for significant partnerships with UK-based football clubs.

Since launching early in 2019 Sorare has seen an average month-on-month growth rate of 52%, and now has more than 40,000 worldwide.

AYO.NEWS says:

With the COVID-19 crisis still meaning many football matches are being played behind closed doors, platforms like Sorare are providing a valuable way to boost fan engagement, and we expect the market will keep growing rapidly. 

Staying with non-fungible token-based sports collectibles, in August Dapper Labs launched a marketplace for its Flow blockchain-based NBA Top Shot. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

All original content featured on this site is © Pentagon Digital Limited, 2020