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Japan Issues Licenses for 11 Bitcoin Exchanges

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Japan’s Financial Services Agency (FSA) has issued operating licenses to 11 bitcoin exchanges.

In an announcement today, the regulator confirmed the action, one that follows an amendment to the payment services law that mandated all cryptocurrency exchanges register with authorities by the end of September. Passed in April, the new law established bitcoin as a legal payment method and extrapolated security guidelines for cryptocurrency exchanges.

The licensing enforces certain operational requirements for the exchanges, including high standards for cybersecurity, the segregation of customer accounts and the verification of customer identities.

Seventeen applications are still in review, while 12 firms have closed their doors in light of the new regulations.

Local cryptocurrency exchange Quoine – one of the 11 firms to receive a license – said in a press release that it will work alongside regulators “towards the healthy development of the cryptocurrency industry within Japan and on a global scale.”

An FSA executive said earlier this week that it intended to foster “sound market development” by working with the exchanges.

Japan is uniquely proactive in its cryptocurrency regulations. Lawmakers have previously stated that this was driven by the now-notorious collapse of local bitcoin exchange Mt Gox in 2014, which led to the loss of millions of dollars in customer funds.

The news comes at a time of regulatory shifts in the broader cryptocurrency landscape. Earlier this month, China issued a blanket ban on fundraising methods involving token sales, or initial coin offerings (ICOs), and local cryptocurrency exchanges have indicated they will cease domestic trading following the ban.

South Korea has also stated ICOs are illegal as of today, as well as tightening the rules for exchanges.

Swiss Finance Regulator Is ‘Investigating ICO Procedures’

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Switzerland’s top financial markets regulator is investigating the practices behind an undisclosed number of initial coin offerings (ICOs).

Though it didn’t name any specific token sales, the Swiss Financial Market Supervisory Authority said today that it is examining “a number of ICO cases to determine whether regulatory provisions have been breached.”

Specifically, the regulator wants to see whether organizers of ICOs, who sell cryptographic tokens in a bid to bootstrap blockchain networks, have violated any laws around anti-money laundering, securities or collective investment schemes.

FINMA said:

“Given the close resemblance, in some respects, between ICOs/token-generating events and conventional financial-market transactions, one or more aspects of financial market law may already cover ICO campaigns according to their various models. FINMA is currently looking into a number of different cases.”

That the agency would begin investigating the funding use case in Switzerland is perhaps unsurprising, given the growing number of regulators that have undertaken such actions in recent months. For example, South Korea’s government unveiled new measures today to restrict ICOs, stating that token sales run afoul of domestic capital market slaws. That move followed a similar crackdown in China earlier this month.

Yet how the situation in Switzerland will develop remains to be seen. According to FINMA, ICOs are not regulated under Swiss law because they do not have a third-party intermediary and are launched for one own’s platform. However, that does not mean ICOs are completely free from legal obligations, the agency added.

“Due to the underlying purpose and specific characteristics of ICOs, various links to current regulatory law may exist depending on the structure of the services provided,” FINMA wrote.

Zk-Starks? New Take on Zcash Tech Could Power Truly Private Blockchains

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“A myth,” that’s what one developer called it.

At a meeting of the team behind the monero cryptocurrency last week, suspicion was high about a new item on the roadmap – so-called “zk-starks.” Described as a “trustless” solution to a problem that’s long prevented anonymous blockchains, to some of the developers assembled it sounded like fantasy.

But while the blockchain industry is certainly no stranger to outlandish claims, the cryptographic technique is perhaps setting records in the levels of eyebrow-raising it has triggered. Heralded as a more secure version of zk-snarks, the creators of zk-starks claim their cryptography can remove the need for the contentious “trusted setup” necessary with the previous iteration of the idea.

Stepping back, zk-snarks are an evolution of a cryptographic technique first described in the 1980s. While seemingly complex, the idea is simple at heart – zero-knowledge proofs enable parties to verify if a statement is correct without receiving anything more than a true-or-false statement. In the blockchain world, the idea has become most often associated with zcash, the first large-scale blockchain that baked the cryptographic tool into its protocol layer.

But, while heralded at the time as a breakthrough, the platform’s use of zk-snarks left room for improvement. For one, there’s the fact that there’s no way to tell with any real certainty that the elaborate procedure used to set up the cryptocurrency wasn’t in some way compromised.

A year after the launch, the zcash team is still putting out audits on the matter. Yet as critics point out, their results, while helpful in mitigating doubts, can’t ever be conclusive.

Should zk-starks be able to remove this roadblock – the impact could be felt far and wide. While there may be little that seems to unite the diverse developers working on private and public cryptocurrencies, privacy has emerged as perhaps a universal touchpoint.

Groups as diverse as banking consortium R3 and ethereum have had zk-snarks on their list for exploration, despite their different needs and technologies.

And zk-starks could find a similarly broad reception – the new technology promises to be cheaper, faster, more scalable and more secure than zk-snarks.

Slowing emerging

But despite the possibilities, little information about zk-starks has been published to date.

First presented at an ethereum meetup back in January, the team behind the tech – comprised of researchers associated with zcash – are still working to complete the code. To date, just one aspect, called the FSA algorithm, is available online.

One of the team’s more public figures is Eli Ben-Sasson, a professor at the Technion Institute of Technology in Israel, who helped pioneer zk-snarks back in 2015 and whose work draws on a long lineage of computer scientists dealing with zero-knowledge proofs.

Speaking to CoinDesk, Ben-Sasson said he was “a big believer in transparent proofs,” and has been “passionately researching” the topic for 15 years. Still, he summarises the challenge he faces in building zero-knowledge designs as one that’s core to cryptography.

As he explains:

“Hiding information is very easy using encryption. The hard part is proving and maintaining integrity under the veil of encryption.”

Perhaps because of this, Ben-Sasson admits the issues inherent in the zk-snarks used to establish the zcash blockchain, believing the technology is too risky for valuable or business-sensitive information.

With zk-starks, however, he sees room for big improvements.

The stakes

One of the key problems zk-starks can solve relates to the need for zero-knowledge blockchains to create a “master key,” according to Ben-Sasson.

In the case of zcash, it’s believed the key was destroyed, but the implications that it could be out there are chilling. For one, this key would allow a bad actor to forge false payments and completely ruin the integrity of the blockchain. Further, in order to destroy the key, a coordinated effort is required in what is known as the trusted setup.

But this setup is complicated to perform securely. For one, it’s difficult to verify it really happened, because it can’t have any witnesses (anyone viewing the ceremony could reversibly generate the key).

When zcash performed its ceremony, the team went to great lengths to ensure it wasn’t compromised, but it’s next to impossible to completely secure. And for a high-profile entity like a bank, there’d simply be too much interest in trying to sabotage it.

Ben-Sasson said:

“There’s going to be a huge incentive for governments and central organizations to try a put their hands on this key that will allow them to write a cheque for any amount … with increased value there is increased incentive to attack.”

Zk-starks seek to remove this risk, and in the process, take a lot of the heavy machinery associated with zk-snarks with it. Unlike zk-snarks, zk-starks don’t rely on public key cryptography at all.

Actually, all zk-starks need to function is one algorithm similar to that performed by computers when mining the bitcoin blockchain.

However, while mining involves the same encryption pattern repeatedly, zk-starks use random numbers so the steps involved cannot be predicted.

The use of a single algorithm is minimal compared to zk-snarks, which by contrast relies on a cluster of the tools. The impact of is that while a zk-snark takes about 28 minutes and 18.9GB to compute, a zk-stark promises to reduce calculation time down to a fraction of a second, and storage down to 1.2MB.

Monero’s motives

And monero’s interest in the scheme, while early, is perhaps proof that there might be further development of the concept across blockchain communities.

One of the more innovative privacy-focused blockchains, monero uses entirely different cryptography than zcash based on a combination of stealth addresses and ring signatures. Rather than use zero-knowledge systems, the cryptocurrency offers privacy by heavily distorting information.

Because its system is well-functioning today, it arguably hasn’t had a need for zero-knowledge proofs, but the idea that the network could further toughen privacy measures is leading the developer team to consider it.

Currently, zk-snarks are being considered for sidechains which would increase privacy by allowing payments to occur from separate blockchains –and which would then self-destruct following the transaction.

But to implement the idea, monero would have to face the problem of the trusted set up – making the zk-starks concept an enticing one.

So enticing, in fact, that lead developer Riccardo Spagni, who has called zcash “a complete security farce” – seems willing to look past the rivalry toward a common goal. He describes zk-starks as “preferable” and told CoinDesk that monero will be looking to integrate the tech if and when it’s usable.

And they’re not the only ones who have problems will the trusted setup. If ethereum is to implement zk-snarks as formerly planned, it’ll have to run an equivalent of the zcash security ceremony – but one that can scale to thousands of participants.

Such complications show that the concept is one that meets a compelling need – one likely to be further developed in a new white paper published in the next year.

IMF’s Lagarde: Ignoring Cryptocurrencies ‘May Not Be Wise’

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The head of the International Monetary Fund (IMF) believes that cryptocurrencies may give traditional government-issued ones a “run for their money.”

Speaking at a conference in London, IMF chief Christine Lagarde told attendees that she thinks “it may not be wise to dismiss virtual currencies.”

Notably, she outlined possible scenarios in which a country – particularly those with “weak institutions and unstable national currencies” might actually embrace one more directly.

“Instead of adopting the currency of another country – such as the U.S. dollar – some of these economies might see a growing use of virtual currencies. Call it dollarization 2.0,” she said.

One of the driving factors behind that potential evolution would be a shift in consumer preference for new currencies that are “easier and safer” than existing ones. That scenario could be further hastened if cryptocurrencies “actually become more stable,” she said.

Lagarde went on to say:

“So in many ways, virtual currencies might just give existing currencies and monetary policy a run for their money. The best response by central bankers is to continue running effective monetary policy, while being open to fresh ideas and new demands, as economies evolve.”

That said, Lagarde noted earlier in her speech that such an outcome is, in her view, a distant prospect, saying that cryptocurrencies are “too volatile, too risky, too energy intensive, and because the underlying technologies are not yet scalable.”

To date, the IMF has advocated a balanced approach on cryptocurrency regulation, voicing that position in a January 2016 staff paper. Lagarde has also voiced support for financial applications of blockchain, a subject that the IMF has explored on an organizational level as well.

Edward Snowden: Zcash Is ‘Most Interesting Bitcoin Alternative’

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NSA whistleblower Edward Snowden weighed in on anonymity-centric cryptocurrencies, calling Zcash the “most interesting bitcoin alternative.”

Snowden, a former U.S. intelligence contractor who leaked National Security Agency (NSA) documents revealing that the agency had was spying on private citizens who were not the subject of active investigations, now serves as the president of the Freedom of the Press Foundation’s board of directors.

Snowden briefly shared his thoughts about cryptocurrency in a thread posted on Twitter, stating that “Zcash’s privacy tech makes it the most interesting Bitcoin alternative. Bitcoin is great,” he added, but “if it’s not private, it’s not safe.”

Agree. Zcash’s privacy tech makes it the most interesting Bitcoin alternative. Bitcoin is great, but “if it’s not private, it’s not safe.” https://twitter.com/masonic_tweets/status/912551989938212864 

Indeed, despite the widespread belief among the general public, bitcoin is not de facto an anonymous currency, blockchain tracing software can often be used by law enforcement to help them establish the identities of individual wallet holders. The privacy-conscious can use services such as cryptocurrency tumblers to mask transactions, but these services usually charge a fee and many casual users are unaware of their existence. The activation of Segregated Witness (SegWit) is expected to allow developers to add more privacy features to the bitcoin ecosystem, but this process could take some time.

When asked about his thoughts on Monero, another prominent cryptocurrency that advertises the ability to make anonymous transactions, Snowden stated that it was a “great project, but the problem with amateur crypto is mistakes happen and have huge consequences for people like me.” Because Zcash was created by professional academic cryptographers, he feels more confident that the technology is truly secure.

Snowden’s comments echo those he has made in the past. In 2015, he stated in an interview that “Bitcoin by itself is flawed,” citing concerns over the ability to directly link addresses to a person’s identity, as well as the perceived threat of 51% attacks. Last year, he apparently mentioned Zcash as a “solution to the surveillance risks of Bitcoin” during a video conference talk, according to Zcash founder Zooko.

Zcash is currently trading at $297, making it the 14th-largest cryptocurrency by total market cap. Earlier this week–by no fault of its own–the coin became the center of controversy after a Bithumb employee and his or her associates allegedly engaged in insider trading ahead of the news that the Korean exchange would add Zcash to its trading platform.

Cryptocurrency Analysis: Coins Recover Strongly after South Korea Scare

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Crypto bulls should be delighted by the market action today, as the major coins rebounded quickly from the South Korean ICO ban sell-off. Bullish reaction to negative news; it is arguably one of the strongest indications of buying power behind a trend. That said, the most valuable currencies are still fighting with strong resistance levels, as Bitcoin remains close to $4150, while Ethereum is still stuck below $300. ETH’s exposure the ICO’s caused a deeper decline today in early trading but the $285 support held up once again, and the coin continues to act positively.

ETH/USD, 4-Hour Chart Analysis

The other majors are also lower today, although the losses are limited, and the recent extreme volatility seems to have passed for good. IOTA and Ripple are relatively strong today, and NEO and Ethereum Classic are also holding up well after yesterday’s huge drop. The prior leaders among altcoins are still lagging, as Dash, Monero, and Litecoin continue to trade inside their declining trends. With all signs pointing to a continuation of the rally before the weekend, let’s see what the short-term charts are showing.

Bitcoin

BTC/USD, 4-Hour Chart Analysis

Bitcoin’s price got choppy after the South Korean ban, but the most valuable coin stayed above the key $4000 level, and remained inside the rising short-term trend. The coin is hovering around the $70 billion level in market capitalization, and a really towards $4400 is likely during the weekend, given the recent bullish price action. The coin still faces strong resistance between $4150 and $4200, and above $4400 at neat the $5000 level.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin is still below the $56 resistance level that has been limiting the upside in the coin since the start of the bounce. Today, the coin is also among the weaker majors, and it is still struggling to reestablish an uptrend. While the long-term direction is clearly positive, more neutral price action is expected before a sustained move higher. Above $56, further resistance is found near $64, while support is around the$51 and $44 levels.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is also relatively weak since the strong initial rebound after the China-induced crash, and the coin dipped below $330 today in early trading, and failed to regain the lost ground so far. The long-term picture remains encouraging, but until a break above the short-term consolidation pattern, short-term traders should wait with opening new positions. Resistance is still found at $360 and near the $400 level, while support levels are at $300 and $265.

Ripple

XRP/USD, 4-Hour Chart Analysis

XRP is holding on near the $0.1950 level, showing relative strength once again after yesterday’s deep sell-off. The coin remains above the prior declining trendline, and odds still favor a move above the key $0.22 level in the coming period. Support levels are still found at $0.18, $0.16, and $0.14, with further resistance ahead near the $0.26 and $0.30 levels.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic barely budged during today’s dip, showing significant short-term strength, although the coin remains well below the key $13.50 level that it tested recently. The short-term performance of the coin is encouraging for bulls, but a rally above primary resistance would be needed to confirm the trend change. The current price levels remain attractive for investors, with support found near $11 and $9, while resistance is ahead at $16 and $18.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero remains stuck inside the correction pattern that developed after its stellar August rally, and the coin is trading below the $100 level, although it didn’t suffer too much damage during today’s dip. Sideways price action is expected to continue in the currency’s market, with crucial support at $80 and $68. Above $100 strong resistance is found at $125, with the all-time high near the $150 level.

NEO

NEO/USDT, 4-Hour Chart Analysis

NEO is trading back near the $30 level after dropping sharply yesterday, and the coin remains inside the developing short-term rising trend. A test of the $25 level is still possible, but traders should be looking for entry points, as the long-term picture remains encouraging. Below $25, further support is found at $22, while resistance is ahead at $34 and $40.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is hovering around the $0.60 level after yesterday’s rally and today’s brief dip, and the coin looks poised to test the $0.64 resistance during the weekend. Both the short- and long-term picture looks encouraging for the currency, as it is well above the prior lengthy correction pattern. Support is still found in the $0.45-$0.48 zone, while further resistance is ahead near $0.75.

SEC Charges REcoin ICO Organizer With Fraud

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The U.S. Securities and Exchange Commission has charged a businessman and two of his companies with defrauding investors through initial coin offering (ICO) scams, including the REcoin ICO.

SEC Charges REcoin ICO Organizer With Fraud

According to a SEC press release, Maksim “Max” Zaslavskiy committed fraud by selling unregistered securities backed by nonexistent assets. Zaslavskiy and his companies began the scam with the REcoin ICO, which claimed to be the “first ever cryptocurrency backed by real estate.”

The SEC Claims the REcoin ICO Scammed Investors Out of $300,000.

Purportedly, the company had assembled a team of lawyers, brokers, and accountants who would invest the ICO contributions into real estate, earning investors significant dividends. Despite a comprehensive advertising blitz, REcoin raised just $300,000, although Zaslavskiy told investors the total was between $2 million and $4 million.

The SEC says that Zaslavskiy’s fraudulent activity extended to another ICO, Diamond Reserve Club, which he founded after the U.S. government “interfered” with the REcoin ICO, according to a statement posted on a bitcoin forum attributed to Zaslavskiy. Diamond Reserve Club would purportedly invest in diamonds and provide REcoin owners with “tokenized membership” in the new company. From the post:

“After all, the diamonds are forever, especially stored in secure locations in the United States and fully insured for their full value. This way they are truly not susceptible to any government manipulations….[M]embers will be able to exchange their tokens for physical diamonds on the Club’s platform in real time and hassle free.”

However, as with REcoin, the SEC says Diamond Reserve Club had not purchased any diamonds and had no plans to do so.

The SEC filed a complaint against Zaslavskiy and his companies in Brooklyn’s federal district court and is seeking permanent injunctions, penalties, as well as a prohibition on Zaslavskiy participating in any more digital securities offerings.

“Investors should be wary of companies touting ICOs as a way to generate outsized returns,” added Andrew M. Calamari, Director of the SEC’s New York Regional Office. “As alleged in our complaint, Zaslavskiy lured investors with false promises of sizeable returns from novel technology.”

REcoin did not immediately respond to a request for comment.

SEC Cracks Down on ICOs

The REcoin and Diamond Reserve Club ICOs appear to be the first token sales U.S. regulators have filed complaints against. However, the SEC has been positioning itself to crack down on fraudulent and non-compliant ICOs. Just this week, the agency announced the creation of a new cyber task force designed to protect retail investors against cyber threats, including fraudulent ICOs. Moreover, at least one more ICO, Protostarr, shut down in response to SEC pressure and issued refunds to its investors. As long as the ICO boom continues — and it appears that it will indefinitely — one should expect the SEC to take an even more active role in the U.S. ICO markets.

Roger Ver Bets $4 Million on SegWit2x Hard Fork

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Angel investor Roger Ver has placed a $4 million bet that the coins on the SegWit2x blockchain will ultimately be worth more than coins on the original bitcoin blockchain following the proposed November hard fork.

It’s difficult to remember a time when the bitcoin community was not embroiled in a debate about the appropriate way to scale the bitcoin network. That debate has taken numerous forms but currently centers around the disagreement between supporters of SegWit2x and supporters of Bitcoin Core. The war of words — and hashpower — began shortly after the New York Agreement and has escalated throughout the year as November, the scheduled date for the SegWit2x hard fork, approaches.

Litecoin creator Charlie Lee has been one of SegWit2x’s most vociferous opponents. Friday, he put his money where his mouth — and keyboard — is, initiating a chain of events that have ultimately resulted in Roger Ver placing a $4 million bet on the success of SegWit2x.

The saga began when Lee publicly challenged SegWit2x developer Jeff Garzik, ShapeShift CEO Erik Voorhees, and Digital Currency Group CEO Barry Silbert, all SegWit2x proponents, to trade him 250 BTC from the original bitcoin blockchain for 250 BTC from the SegWit2x blockchain following the hard fork. At current exchange rates, this wager equates to more than $1 million.

Lets do a public 1:1 trade. My Segwit2x 250 BTC for your non-2x 250 BTC after Nov HF. No HF, no trade. @jgarzik @ErikVoorhees@barrysilbert

As of the time of writing, neither Garzik, Voorhees, nor Silbert had responded to Lee’s challenge. However, Roger Ver, a New York Agreement signatory who has embraced bitcoin cash, told Lee he would “gladly accept” the offer. “Deal!,” Lee replied.

Why wasn’t invited? I’ll gladly accept! You are economically illiterate if you think restricting the supply of block space is a good thing. https://twitter.com/SatoshiLite/status/913807452197478400 

But Roger Ver did not stop there. His tweet unleashed a flurry of similar offers, three of which he accepted. As he announced on reddit, he will trade 1,000 non-SegWit2x BTC (worth more than $4 million) to Charlie Lee, BitGo CTO Ben Davenport, Chaincode Labs co-founder Alex Morcos, and crypto economist Tuur Demeester, each of whom will purportedly stake 250 coins from the SegWit2x blockchain.

Time will tell which of them live(s) to regret that decision.

Bitcoin Exchange BTCC Stops Deposits Ahead of Trading Shutdown in China

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BTCC has stopped accepting yuan and cryptocurrency deposits today as it prepares to shutter its operations in China this month.

Chinese cryptocurrency giant BTCC, the operator of the oldest cryptocurrency exchange in what was previously the largest trading market in the world, has stopped accepting deposits today at 12:00 noon, Beijing time. The exchange first opened its trading platform seven years ago.

Today’s notice follows up the announcement from a fortnight ago, when BTCC confirmed it would “stop all trading” on September 30 following the regulatory crackdown led by Chinese financial authorities including China’s central bank.

Further, BTCChina announced its deadline for withdrawals of digital assets and renminbi – on October 30. The exchange operator insists that all withdrawals will be processed within 3 days, regardless of the digital asset reserve.

A loosely translated excerpt from today’s notice reads:

BTCChina has adhered to the implementation of a 100% reserve system from the first day of its establishment to ensure users of their assets’ security. Withdrawals (including RMB, Bitcoin, Litecoin, Ether etc.) will be completed within 72 hours of processing…

The People’s Bank of China announced a blanket ban on all initial coin offering (ICO) funding, a radical new form of fundraising powered by cryptocurrencies, on September 4. The ban has also extended to bitcoin exchanges in the country.

As BTCC winds down operations in mainland China, its global exchange BTCC DAX, a recently launched ‘pure crypto-to-crypto exchange’, mining operation BTCC Pool, BTCC’s USD exchange and other company operations will continue to operate.

Singaporean Banks Abruptly Terminate Accounts of Bitcoin Exchanges

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Earlier this week, two local bodies representing the local financial technology (fintech) industry have revealed that Singaporean banks have denied banking services to bitcoin and blockchain startups.

Singapore’s Cryptocurrency and Blockchain Industry Association, or Access, submitted a formal complaint to the Singaporean government, requesting officials to step in and create a fair and transparent environment for fintech companies.

“From our analysis, it appears to be common among leading FinTech hubs. If this is the case, we would urge Singapore to take a leadership role and demonstrate how to come to an effective resolution among all parties,” said Access Chairman Anson Zeall.

According to Zeall, 10 companies have already filed complaints to Access alone, and more companies likely filed additional complaints to other fintech bodies and organizations.

Similar to Australia, New Zealand and the UK in 2016

In 2015, leading banks and financial institutions in Australia were investigated by the government for the unfair rejection of services toward bitcoin and blockchain companies. At the time, the Australian Digital Currency Commerce Association Chairman Ron Tucker said in an interview:

“To the best of our knowledge all, or nearly all digital currency businesses have received letters from their bank, or in many cases banks, advising of the closure of their accounts. This includes at least 17, with 13 of these closed permanently. Whilst we’re unable to comment on the banks’ motivations (that is for them to explain) however, the consequences of these moves are becoming more clear.”

Unable to receive any banking services from local financial institutions, the majority of bitcoin and blockcahin startups left the Australian fintech sector in late 2015. Consequently, the Australian blockchain industry, which demonstrated positive indicators of growth, lagged behind China, Japan, South Korea, Singapore, and Hong Kong.

“The Australian Bitcoin industry, as part of a larger revolution in financial technology, has seen its growth severely curtailed by this unexplained wave of debanking,” added Tucker.

Earlier this year, at the Blockchain NZ conference held in Auckland, New Zealand, bitcoin and security expert Andreas Antonopoulos spoke out against the government’s failure to provide a fair and competitive industry for fintech startups. He emphasized that the government can either do nothing and isolate itself from fintech development, or take an appropriate approach in regulating the market.

“Governments can choose to either do nothing – which is okay; make things worse for cryptocurrency trading – like what Australia did by imposing sales taxes on all cryptocurrency transactions; or they can make things easier for companies by reining in the banks and encouraging companies by creating a level playing field,” said Antonopoulos.

The Future of the Singaporean Bitcoin and Blockchain Industries

The Australian government’s failure to provide a fair ecosystem to fintech startups and bitcoin companies led to a shortage of innovative and young startups in its finance industry. As an attempt to recover its bitcoin, blockchain, and fintech industries, the Australian government eliminated double taxation on bitcoin and vowed to provide a better environment for fintech startups in the upcoming years.

While the efforts of the Australian government could restore its fintech market to an extent, it is still struggling to rebound as most of the startups and entrepreneurs have left the space. If the Singaporean government chooses not to interfere and leave its fintech startups without necessary infrastructure and banking services, startups and entrepreneurs in the region will simply move over to countries such as South Korea, Japan, and Hong Kong, that have efficient and practical regulatory frameworks.

Already, Singaporean bitcoin exchange CoinHako announced that it will no longer be able to process deposits and withdrawals for its traders due to the closure of its bank accounts operated by DBS. CoinHako co-founder co-founder Yusho Liu wrote:

“The closure of our bank account might be due to matters pertaining to [anti-money laundering rules and know-your-customer requirements.] [That’s] why we go the extra mile to meet compliance standards set by [the MAS.] Even though we don’t fit anywhere in the current regulatory framework, CoinHako is fully committed to working towards a common consensus with the banks to allow for a more conducive environment going forward.”