$2.5 Billion Sent Out of Iran to Purchase Cryptocurrencies

$2.5 Billion Sent Out of Iran to Purchase Cryptocurrencies

Finance

The chairman of the economic committee of Iran’s parliament has revealed that Iranians have sent more than $2.5 billion out of the country to purchase cryptocurrencies with. His statement follows the country’s central bank banning local banks from dealing with digital currencies including bitcoin.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

$2.5 Billion Capital Flight

Mohammad Reza Pourebrahimi, the Chairman of the Economic Commission of the Parliament of Iran, was quoted saying last week by Ibena.ir news agency:

Based on the existing data, few people in Iran are cryptocurrency users and more than 2.5 billion dollars has been sent out of the country for buying digital currencies.

$2.5 Billion Sent Out of Iran to Purchase CryptocurrenciesCentral Bank of Iran building.

He previously told Isna newspaper that Iranians had transferred $30 billion out of the country over the few months ending March. “Iranians do not have access to the international banking system and the transfers can only occur through unconventional ways, such as exchange dealers or international travelers,” Radiofarda explained.

The chairman’s statement came on the heels of the Central Bank of Iran (CBI) banning banks and financial institutions from dealing with cryptocurrencies, citing money laundering and terrorism financing risks.

Iran’s National Cryptocurrency

$2.5 Billion Sent Out of Iran to Purchase CryptocurrenciesIran’s Information and Communications Technology (ICT) Minister, Mohammad Javad Azari-Jahromi, recently confirmed that an experimental local cryptocurrency has been developed and a test model was ready.

However, in an interview with Ibena.ir last week, Pourebrahimi said that “No virtual national currency has been designed in the country at the present [time].”

Nonetheless, he explained that Iran’s national crypto can “facilitate economic deals and circumvent sanctions,” the news outlet conveyed. Citing that “the future of the world economy will be done on digital currencies,” the chairman was quoted asserting that the national cryptocurrency “can pave the path for multilateral currency swap agreements between Iran and countries which are enthusiastic to have economic cooperation with Iran but they couldn’t have it so far owing to the sanctions.” He also elaborated:

The structure of the cryptocurrency should be suitable for economic activity and be acceptable at the international level simultaneously.

Pourebrahimi believes one of the benefits of cryptocurrencies “is [the] absence of [the] American regulator,” which he admitted can circumvent sanctions. His statement echoes Azari-Jahromi’s statement made last week that “All cryptocurrencies have the ability to circumvent sanctions because they are not under the supervision of the US financial regulator.”

Meanwhile, U.S. President Donald Trump has withdrawn the US from the 2015 Iran nuclear deal by restoring sanctions on Iranian oil exports.

What do you think of Iranians spending $2.5 billion to buy crypto abroad? Let us know in the comments section below.


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All Cryptocurrency Exchanges in Japan Must Comply With Five New Criteria

All Cryptocurrency Exchanges in Japan Must Comply with Five New Criteria

Services

The Japanese financial regulator has imposed five new criteria for all cryptocurrency exchanges operating in the country. These rules apply to existing exchange operators as well as new ones applying for registration for the first time. On-site inspections will be conducted on all exchanges prior to approval.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Preventing Coincheck 2.0

All Cryptocurrency Exchanges in Japan Must Comply with Five New CriteriaThe Japanese Financial Services Agency (FSA) has set new rules for the registration of cryptocurrency exchanges, Nikkei reported on Sunday. The agency aims to promote compliance and protect customer assets as well as “forestall another digital currency heist like the Coincheck scandal,” the news outlet added.

Coincheck, one of the largest crypto exchanges in Japan, was hacked in January and lost 58 billion yen (~US$531 million) worth of the cryptocurrency NEM. The exchange has since been acquired by a leading online brokerage firm, Monex Group.

An FSA official explained to Nikkei that in addition to documentation, the registration process would now include preliminary visits to ascertain how the exchanges operate. The publication elaborated:

Exchange operators registering with the government will now need to satisfy five broad criteria.

The Five Criteria

All Cryptocurrency Exchanges in Japan Must Comply with Five New CriteriaThe first of the five criteria concerns system management. The agency will ensure that exchanges “will not store currency in internet-connected computers and will have to set multiple passwords for currency transfers,” the publication detailed.

Money laundering preventative measures make up the second criterion. Exchanges “will need to work harder to prevent money laundering, through such means as verifying customer identification for large transfers.”

The management of customer assets is the third. The FSA wants to ensure that they are “carefully managed separately from exchange assets.” According to the news outlet, exchange operators will be required to check customer account balances multiple times a day for signs of diversions and “have rules in place to keep their officers from using client money or virtual currencies.”

All Cryptocurrency Exchanges in Japan Must Comply with Five New CriteriaThere will also be new restrictions on the types of cryptocurrencies listed on exchanges. Specifically, the publication emphasized. “Those granting a high level of anonymity and easily used for money laundering will as a general rule be banned.” News.Bitcoin.com recently reported on rumors that the FSA is pressuring exchanges to delist privacy coins such as Monero.

Lastly, exchanges’ internal procedures must be strengthened. They “will need to separate shareholders from management. System development roles will also be separated from asset management roles to keep employees from manipulating the system for their own gain.”

5-Point Framework Applies to All Exchanges

All Cryptocurrency Exchanges in Japan Must Comply with Five New CriteriaThe five criteria make up the FSA’s “new five-point framework,” allowing the agency to “perform a detailed assessment and identify potential risks in advance,” the news outlet described. The new rules will apply to existing exchanges as well as new ones entering the market. Those that cannot comply with these five rules are encouraged to exit the business.

Currently, there are 16 government-approved crypto exchanges operating in Japan. In addition, there are still seven others that are allowed to operate under the revised Fund Settlement Act while their applications are being reviewed by the agency.

According to Nikkei, the FSA is likely to start accepting new registration applications for exchanges in the summer. The agency recently revealed that there are approximately 100 companies interested in applying for registration. The news outlet elaborated:

The FSA will first review documents submitted by operators seeking government registration. It will then send inspectors to those that pass the initial screening to review their system operations and verify the number of employees.

What do you think of the FSA’s five new criteria for crypto exchanges? Let us know in the comments section below.


Images courtesy of Shutterstock and Nikkei.


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Ripple Sued for Alleged Violations of US Securities Laws

Ripple Sued for Alleged Violations of US Securities Laws

Finance

A class action lawsuit has been filed against Ripple Labs, its CEO, and subsidiary. The plaintiff alleges that the defendants have violated the state and federal securities laws, engaging in schemes to raise hundreds of millions of dollars through the sale of unregistered ripple tokens (XRP).

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Class Action Lawsuit

Ripple Sued for Alleged Violations of US Securities LawsSan Diego resident Ryan Coffey has filed a “securities class action” lawsuit against Ripple Labs Inc, its CEO Bradley Garlinghouse, its wholly owned subsidiary XRP II LLC, and ten related persons. Attorney James Taylor-Copeland representing Coffey filed the lawsuit with the Superior Court of the State of California, seeking damages on behalf of Coffey and all others similarly situated.

According to the court document dated May 3, Coffey purchased 650 XRP at $2.60 per token around January 6 and sold them at approximately $1.70 per token around January 18. Coffey described:

[The lawsuit] arises out of a scheme by defendants to raise hundreds of millions of dollars through the unregistered sale of XRP to retail investors in violation of the registration provisions of state and federal securities laws.

‘XRP Genesis and the Never-Ending ICO’

Ripple Sued for Alleged Violations of US Securities LawsCoffey detailed in his filing, “unlike cryptocurrencies such as bitcoin and ethereum…all 100 billion of the XRP in existence were created out of thin air by Ripple Labs at its inception in 2013.”

Citing that 20 billion tokens were given to Ripple Labs’ founders and 80 billion to the company itself, he alleges that the defendants “earned massive profits by quietly selling off this XRP to the general public,” adding:

From 2013 to the present, [the] defendants have been engaged in an ongoing scheme to sell XRP to the general public in a never ending ICO…Defendants’ sales of XRP to the public accelerated rapidly in 2017 and early 2018.

He also claims that “these ICOs have become a magnet for unscrupulous practices and fraud.”

Coffey alleges that the “defendants market XRP to drive demand and increase [its] price,” including “blur[ring] differences between Ripple Labs’ Enterprise Solutions and XRP.” Other tactics include offering a bribe to Coinbase and Gemini exchanges to list XRP and promising R3, an enterprise software firm with a network of banks and financial institutions, a 5 billion XRP option, Coffey added.

At the time of this writing, XRP is trading at $0.91 on Bitfinex, a 73% drop from its high of $3.30 in January.

Ripple Sued for Alleged Violations of US Securities Laws

Violations of Securities Laws

Citing that the US Securities and Exchange Commission (SEC) has made it clear that digital tokens including XRP often constitute “securities and may not be lawfully sold without registration with the SEC or pursuant to an exemption from registration,” Coffey elaborated:

The XRP offered and sold by [the] defendants have all the traditional hallmarks of a security…However, [the] defendants did not register XRP with the SEC, and many of the representations [the] defendants made regarding XRP were designed to drive demand of XRP, allowing defendants to obtain greater returns on their XRP sales.

Last month, the SEC stated that both XRP and ether could be classified as securities. However, Ripple’s chief market strategist, Cory Johnson, told CNBC in early April:

We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law.

Do you think this securities class action lawsuit against Ripple has any legs? Let us know in the comments section below.


Images courtesy of Shutterstock, Trading View, and Ripple Labs.


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