News & Insights

Crypto Industry Update - June 2018

The below is an update on the cryptocurrency and blockchain industry.

Russia’s Largest Bank to Pilot First Official ICO

Sberbank CIB, the investment banking arm of major state-owned bank Sberbank, and NRD, which is part of the Moscow Stock Exchange Group, are now finalizing plans with the central bank to launch an experimental ICO by the end of summer 2018, the proceeds of which will reportedly be used to fund new tokenized online services by Level One, a company that runs the largest commercial lecture hall in Moscow.

NRD’s Eddi Astanin told local media platform Vedemosti that the project’s tokens would only be sold for rubles and be open exclusively to “qualified” investors.

Germany’s Second Biggest Stock Exchange Launches Crypto Trading of Bitcoin, Ethereum, Litecoin and Ripple

Börse Stuttgart, one of Europe's biggest stock exchange and Germany's second biggest, handling some $100 billion in trading volumes, has launched crypto trading through a subsidiary.

The move makes Börse Stuttgart the world's first established traditional stock exchange to become directly involved with crypto trading.

Morgan Stanley Says Banks Could Use Cryptocurrencies to Mitigate Financial Crises

A report released by a team of researchers at Morgan Stanley revealed that Bitcoin and cryptocurrencies could help central banks to cut interests rates, which would help reduce the impact of any financial crisis in the future.

During the last global financial crisis of 2007 - 2008, central banks imposed lower interest rates as a way of protecting lenders and consumers from the harsh effect of the crisis.

"Freely circulating paper notes and coins limits the ability of the central banks to force negative deposit rates. A digital version of cash could theoretically allow negative deposit rates to be charged on all money in circulation within any economy,".

French Finance minister: “Let’s make France the first place for blockchain & crypto innovation in Europe”

Minister of Economy and Finance Bruno Le Maire recently revealed his plans for blockchain technologies in France.

“Let's teach this knowledge to our fellow citizen to make France the first place for blockchain & crypto innovation in Europe" said Bruno Le Maire.

While talking about taxations and regulations, Le Maire stated: The proposal to align the taxation of cryptocurrencies with that of precious metals was mentioned, but it is not favourable.

He believes that this move would be risky and prefers to guarantee entrepreneurs and individuals a regime in which they can plan for the longer term.

Nasdaq Collaborates with Crypto Exchange Gemini

The company announced a collaboration with cryptocurrency exchange Gemini, founded by early bitcoin investors Tyler and Cameron Winklevoss.

The deal gives Gemini access to Nasdaq's surveillance technology to help make sure the platform provides a fair and "Rules-based marketplace," for their own participants, Gemini CEO Tyler Winklevoss said in a statement.

"The SEC is right that those are securities and need to be regulated as such." The U.S. Securities and Exchange Commission has cracked down on ICO fraud in 2018, and said in March it is looking to apply securities laws to everything from cryptocurrency exchanges to digital asset storage companies known as wallets.

Australia’s First Retail Crypto Asset Hedge Fund Will Launch This Year

Every Capital is set to become the country’s first retail crypto asset hedge fund. The firm is mainly interested in contributions from everyday individuals, rather than institutions, although their product will attract users from both camps. The main purpose of Every Capital is to make investing in cryptocurrencies a lot more appealing.

One will be able to invest in cryptocurrencies and ICO tokens alike with Australian dollars, allowing for a more diversified investment portfolio.

For the time being, Every Capital’s venture is still in development. It is expected to roll out to select customers later this year.

US Regulators Say They Want to Avoid 'Hindering' Blockchain Innovation

CFTC enforcement director James McDonald and SEC Enforcement Division Cyber Unit chief Robert Cohen agreed that they did not want to hinder innovation or interfere unduly with blockchain or the tokens built on the technology.

They also stated that they had to act against those seeking to defraud or outright steal from participants in the space.

On actually regulating the space, McDonald noted:

"Our mission is to foster financially sound markets, and we understand as a regulator that requires a certain amount of [flexibility] in our approach. We're doing it in a way that doesn't hinder innovation and doesn't interfere with other regulatory priorities."

The Swiss are using blockchain to refine their business incorporation process

Switzerland may be the world's most competitive economy for the eighth year in a row but its also notoriously bureaucratic.  Of the 138 countries surveyed, Switzerland's business incorporation process is the 54th-easiest to navigate and the 56th-fastest to complete.

Entrepreneurs face on average six weeks to register their business.

This looks set to change after a recent demonstration of blockchain technology by a company called Proxeus, which registered the valid legal entity; "Drakkensberg AG", in one hour and 37 minutes

"Without any legislative change, we demonstrated that traditional paper-driven, highly iterative processes can be transferred to the blockchain securely and effectively," said Proxeus co-founder Antoine Verdon. "Our workflow increases efficiency and dramatically lowers costs.".


We are grateful for the contributions by Crypto consultant Nick Hoskins.


If you would like further information please contact: ​

Chris Humphries
Managing Director
Tel:(+1 345) 814 7911
chris.humphries@stuartslaw.com
 

 

This publication is for general guidance and is not intended to be a substitute for specific legal advice. Specialist advice should be sought about specific circumstances.