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Belarus adopts crypto-currency law to woo foreign investors

by UNTV News   |   Posted on Friday, December 22nd, 2017

FILE PHOTO: A man walks past an electric board showing exchange rates of various cryptocurrencies including Bitcoin (top L) at a cryptocurrencies exchange in Seoul, South Korea December 13, 2017. REUTERS/Kim Hong-Ji

MINSK (Reuters) – Belarus has legalized transactions in crypto-currencies, part of a drive to foster private sector growth and attract foreign investment by liberalizing parts of its Soviet-style economy.

President Alexander Lukashenko signed a decree on the move on Thursday, his press service said.

Bitcoin, the world’s most popular crypto-currency, has lost a third of its value BTC=BTSP since hitting a record high of close to $20,000 on Sunday, but its supporters dismiss warnings over volatility and say it is the start of a new monetary system not dependent on central banks.

“All smart and intelligent people know what stability and order are,” state news agency BelTA quoted Lukashenko as saying earlier this month. “They’re all trying to reach that shore. We’re prepared to arrange a dock and even a harbor.”

The former Soviet republic, squeezed between Russia and the European Union, is still dominated by the state, weighed down by bureaucracy and inefficient state-owned enterprises, and dependent on Russian money and subsidies.

But Lukashenko, a former collective farm manager who once called the internet “garbage”, has introduced some reforms to improve the business climate and shore up the economy after recession in 2015 and 2016.

Belarus has developed some globally recognized IT brands, belying an image of a country stuck in a Soviet time warp.

The decree is designed to attract digital coin entrepreneurs, who are moving businesses to locations more welcoming to crypto-currencies as they face intensifying scrutiny from regulators over digital currency fund-raising, known as initial coin offerings.

“The decree is a breakthrough for Belarus,” Anton Myakishev, the head of Microsoft’s (MSFT.O) Belarus office, told Reuters.

“It gives the industry the possibility to make a leap forward in its development and allows foreign capital the possibility to come to Belarus and work in comfortable conditions.”

AVOIDING RED TAPE

The decree legalizes initial coin offerings and transactions in crypto-currencies, including their exchange for traditional currencies on Belarussian exchanges, while all trades will be tax-free for the next five years.

It also allows local IT companies to operate in part under English law – a boon to potential foreign investors, who can struggle to navigate the Belarussian legal system.

“We regularly faced legal problems. When a Western company buys a Belarussian company they try to structure the deal outside Belarus,” said Denis Aleinikov, senior partner in a private law firm Aleinikov and Partners in Minsk and the main author of the decree.

“Investors don’t want to deal with Belarussian legislation,” he told Reuters.

Viktor Prokopenya, a prominent investor in the Belarussian IT sector, said Reuters the legislation and other measures showed the government fully supported the industry.

The Belarussian IT sector has flourished despite the country’s wider economic slump, attracting foreign workers, expatriate Belarussians and locals to jobs that pay about five times the average wage.

Dozens of software companies operate in Minsk’s high-tech IT park, including U.S.-based EPAM Systems (EPAM.N), founded by two Belarussians in 1993. Belarussian software engineers are also behind the Japanese-controlled Viber messenger and the popular video game World of Tanks.

The bright outlook for the IT industry is not matched in other sectors of the Belarussian economy, which remains hamstrung by loss-making state-owned companies that have seen little or no reform since the collapse of the Soviet Union.

The economy is expected to return to growth of 1.7 percent this year, but the International Monetary Fund in November said growth will remain around 2 percent annually over the next few years if state-run heavy industries don’t modernize.

Writing by Alessandra Prentice, editing by Matthias Williams and Timothy Heritage

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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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