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Banks in Britain and U.S. ban Bitcoin buying with credit cards

by UNTV News   |   Posted on Tuesday, February 6th, 2018

FILE PHOTO: A Bitcoin (virtual currency) coin is seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, June 23, 2017. REUTERS/Benoit Tessier/Illustration

LONDON (Reuters) – Banks in Britain and the United States have banned the use of credit cards to buy Bitcoin and other “cryptocurrencies”, fearing a plunge in their value will leave customers unable to repay their debts.

Lloyds Banking Group Plc (LLOY.L), which issues just over a quarter of all credit cards in Britain, and Virgin Money (VM.L) said they would ban credit card customers from buying cryptocurrencies, following the lead of U.S. banking giants JP Morgan Chase & Co (JPM.N) and Citigroup (C.N).

The move is aimed at protecting customers from running up huge debts from buying virtual currencies on credit, if their values were to plummet, a Lloyds spokeswoman said.

Concerns have arisen among credit card providers because their customers have increasingly been using credit cards to fund accounts on online exchanges, which are then used to purchase the digital currencies.

However, other banks said on Monday they will continue to allow credit card customers to buy cryptocurrencies.

“We constantly review our protections for customers as a responsible bank and lender, and are keeping this matter under close review,” a spokeswoman for Barclays said.

Barclays is Britain’s leading credit card issuer with a market share of around 27 percent through its Barclaycard brand.

“At present UK customers can use both their Barclays debit card and Barclaycard credit card to purchase cryptocurrency legitimately,” the Barclays spokeswoman said.

Spain’s second-biggest bank BBVA (BBVA.MC) also said it has no restrictions in place on such purchases.

Last week Mastercard Inc (MA.N), the world’s second biggest payments network, said customers buying cryptocurrencies with credit cards fueled a 1 percentage point increase in overseas transaction volumes in the fourth quarter.

At that time Bitcoin was staging a spectacular rise in value, reaching a peak of $19,187 on Dec. 16 on the Luxembourg-based Bitstamp exchange.

But the biggest and best-known cryptocurrency has since fallen dramatically and on Monday was down by 11 percent to $7255 at 1719 GMT on Bitstamp, extending losses from Friday amid worries of a global regulatory clampdown.

CREDIT RISK

The decision on whether to allow credit card users to buy cryptocurrencies is a credit risk decision made by the card-issuing banks, a spokesman for Mastercard said.

A spokeswoman for Chase bank said it is not currently processing credit card purchases of cryptocurrencies because of the volatility and risk involved, while a Citi spokeswoman confirmed a similar ban, but did not give a reason.

The bans extends only to credit card purchases, with debit card users still able to buy cryptocurrencies.

“Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies,” the Lloyds spokeswoman said in an email.

Lloyds did not say how it planned to enforce the ban, although the Telegraph newspaper reported on Sunday that its credit card customers will be blocked from buying Bitcoin online through a “blacklist” that will flag sellers.

A spokeswoman from the Royal Bank of Scotland (RBS.L) declined to comment on the bank’s policy.

Europe’s biggest bank HSBC (HSBA.L) did not respond to requests for comment on whether it permits credit card purchases of cryptocurrencies.

Concerns about the use of Bitcoin and other such currencies extend beyond the use of credit cards for borrowing.

British Prime Minister Theresa May has said Britain should take a serious look at digital currencies such as Bitcoin because of the way they can be used by criminals.

Additional reporting by Anjuli Davies in London and Jesus Aguado in Madrid; Editing by Peter Cooney and Alexander Smith

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EXCLUSIVE: G20 financial heads to urge crypto-asset monitoring to safeguard financial stability

by UNTV News   |   Posted on Thursday, March 15th, 2018

Cryptocurrencies are seen on a website that tracks the value of initial coin offerings (ICO) in this illustration photo taken September 5, 2017. REUTERS/Thomas White/Illustration

BRUSSELS (Reuters) – The world’s financial leaders will call on international standard-setting bodies on March 20 for stronger monitoring of crypto-assets and to assess the need for a multilateral response as such assets could at some point threaten financial stability.

The call appears in a draft communique prepared for the meeting of finance ministers and central bank governors of the world’s 20 biggest economies in Buenos Aires on March 19-20, seen by Reuters.

The financial leaders will say the technological innovation behind crypto-currencies has the potential to improve the efficiency and inclusiveness of the financial system.

“Crypto currencies, however, raise issues with respect to consumer and investor protection, tax evasion, money laundering and terrorist financing. At some point they could have financial stability implications,” the draft communique adds.

“We agree that international standard setting bodies strengthen their monitoring of crypto-assets and their risks… and assess whether multilateral responses may be needed.”

Regulators globally have raised the alarm over cryptocurrencies, saying they may aid money laundering and terrorist financing, hurt consumers and undermine trust in the global financial system.

Japan was the first country to adopt a national system to oversee cryptocurrency trading. It carried out checks on several exchanges this year after the theft of $530 million from one exchange, Coincheck Inc, in January.

France and Germany have said they will make joint proposals to regulate the bitcoin cryptocurrency market.

The head of the European Union’s watchdog said a short-term strategy could be to focus on applying anti-money laundering and terrorist financing rules, warning consumers of the risk of trading in cryptocurrencies and preventing banks from holding them.

The U.S. Securities and Exchange Commission said last week that many online trading platforms for cryptocurrencies should be registered with the regulator and subject to additional rules, in a further sign regulators are cracking down on the digital currency sector.

In a statement, the SEC said these “potentially unlawful” platforms may be giving investors an unearned sense of safety by labeling themselves as “exchanges.” The regulator said these platforms need to register with the SEC as a regulated national securities exchange or as an alternate trading system, or ATS.

Virtual currencies have existed for years but speculation in them has recently ballooned – along with scams promising investors returns of over 1,000 percent in weeks.

In a time of volatile markets, hackers are also active in the sector.

Bitcoin, the best known virtual currency, lost over half its value earlier this year after surging more than 1,300 percent last year.

Reporting By Jan Strupczewski; Editing by Hugh Lawson

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Singapore explores rules to protect investors in cryptocurrencies

by UNTV News   |   Posted on Friday, March 2nd, 2018

Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 13, 2018. REUTERS/Dado Ruvic/Illustration

SINGAPORE (Reuters) – Singapore’s central bank is assessing whether additional regulations are required to protect investors in cryptocurrencies, an official said in a speech released on Thursday.

The city-state – which is aiming to be a hub for financial technology and so-called initial coin offerings in Asia – does not regulate virtual currencies and last year called for the public to exercise“extreme caution” over investment in cryptocurrencies.

Its central bank does regulate activities involving virtual currencies if they pose specific risks. For example, it imposes anti-money laundering requirements on intermediaries providing virtual currency services.

“We are assessing if additional regulations are required for investor protection,” Ong Chong Tee, deputy managing director (Financial Supervision), Monetary Authority of Singapore said.

Other countries such as South Korea, where trading in cryptocurrencies is more popular, are looking at ways to regulate that activity.

Reporting by Aradhana Aravindan and John Geddie; Editing by Kim Coghill

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Cryptocurrency traders to launch lawsuit against Coincheck on Thursday – lawyer

by UNTV News   |   Posted on Wednesday, February 14th, 2018

Cryptocurrency exchange Coincheck’s signboard is pictured in front of a building where their office is located in Tokyo, Japan February 2, 2018. REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) – A group of cryptocurrency traders will file a lawsuit against Coincheck Inc on Thursday over last month’s theft of $530 million (£382 million) in digital money from the Tokyo-based exchange, a lawyer representing the claimants said.

The ten traders will file the claim at the Tokyo District Court over Coincheck’s freezing of cryptocurrency withdrawals, Hiromu Mochizuki, a lawyer representing the plaintiffs, told Reuters.

The traders will request that Coincheck allows them to withdraw cryptocurrencies to “wallets” – folders used for storing digital money – outside the exchange, Mochizuki said. The group may launch a second lawsuit at the end of the month to claim for damages over the heist, he added.

Coincheck representatives did not immediately respond to phone and emailed requests for comment.

The Coincheck incident highlighted the risks in trading an asset that policymakers are struggling to regulate, and has renewed the focus on Japan’s framework for overseeing these exchanges.

The Tokyo-based exchange, which froze all withdrawals of yen and digital currencies following the theft, resumed yen-withdrawals from Tuesday, according to posts on Twitter.

Coincheck said on Friday it would allow customers to withdraw yen after confirming the integrity of its system security. It added it would keep restrictions on cryptocurrency withdrawals until it could guarantee the secure resumption of its operations.

Coincheck is set to file on Tuesday a report with regulators on the heist, the safety of its systems, and measures it will take to prevent a repeat.

Reporting by Thomas WilsonEditing by Shri Navaratnam

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