In a recent interview with Bloomberg, Ravi Menon, managing director at the Monetary Authority of Singapore [MAS], spoke about the present cryptocurrency scenario and also pointed out the different use cases of utility tokens and security tokens.
Menon stated that cryptocurrencies like Bitcoin [BTC] should not be called currencies but should rather be called ‘digital tokens’. He said this as a follow up to the lack of clarity and speculation that is prevalent in the cryptocurrency market right now.
The MAS official went on to say that calling the tokens a currency is wrong because it does not have the qualities of mainstream fiat currency yet. According to Menon, fiat currency’s factors like stable value, accreditation by a centralized authority all make it more valuable than cryptocurrencies. There is a trust factor that is deeply ingrained in fiat currency that is just not present in the digital asset market, he said.
He then went on to differentiate between the two types of digital tokens, that is utility tokens and securities token. Menon stated:“Utility tokens are imperative to the functioning of the blockchain are used to buy services, namely cloud services. The main difference factor is that utility tokens do not come under the regulatory ambit. Security tokens are issued by companies that raise capital and to provide funding.”
Ravi Menon made it clear that dealing with security tokens is much more tricky because of the regulatory crackdowns. He advised ICO players to be careful while crossing the ‘utility token-security token’ boundary because it will lead to the ICOs suffering the full force of authorities like the Securities and Exchange Commission [SEC].
Ravi Menon was also in the news earlier when he had said that the financial regulator is ready to help cryptocurrency firms which are finding it difficult to set up local bank accounts. Menon said:“What we are trying to do is to bring the banks and cryptocurrency fintech startups together to see if there is some understanding they can reach.”
To create more jobs and diversify the financial sector, Singapore had opened its economy for the development of the fintech sector. Nevertheless, to be cautious of the new players in the market and to reduce the chances of fraud, the financial regulator had imposed a lot of restrictions, significantly hindering operations of cryptocurrency firms in the country.
This Crypto Exchange Just Pulled A $3M Exit Scam
Cobinhood, a well-known exchange, is being accused of pulling an exit scam. Last month, their associated company DEXON Foundation and its token DXN raised $3 million, but on May 20 the exchange has been reported to have filed for bankruptcy.
Classy exit scam from @COBINHOOD & @dexonfoundation (same company). After raising $3M just last month (!!!), they unlocked all tokens, dumped on the market (!!!) and announced that they appointed a liquidator. Remember these people $DXN #Cobinhood $COB https://t.co/xUGJiUQBrr pic.twitter.com/ZUPyP2Bhg7
— TSS (@SandorReport) May 20, 2019
Cobinhood has not made an official statement about the allegation
Illegal crypto-mining: Australian man could face 10 years in jail for illegally mining cryptocurrencies using government devices
An unnamed man from Killara in New South Wales, Australia, is being charged by the Australian authorities for making use of government computer systems to mine cryptocurrencies for self-gain. The man, formerly an Australian government employee, worked as an IT contractor and has been accused of converting government computers into cryptocurrency mining devices.
The man made himself more than A$9,000, according to an announcement by Australian Federal Police. The charges he is likely to face are the unauthorized modification of data to cause impairment and unauthorized modification of restrictive data. The charges, if proven in court, can result in a maximum of ten and two years of imprisonment, respectively.
According to Acting Commander Chris Goldsmid,“Australian taxpayers put their trust in public officials to perform vital roles for our community with the utmost integrity…. Any alleged criminal conduct which betrays this trust for personal gain will be investigated and prosecuted.”
Since cryptocurrency mining requires large amounts of electricity to run the corresponding mining equipment, government computers were specifically targeted by the accused individual.
In another case, a Chinese school principal, Lei Hua was reported to have run an Ethereum mining rig at the cost of the school’s electricity bill. The principal was later fired.
TD Ameritrade invests in crypto-trading platform Eris-X, to offer spot exchanges and future contracts
TD Ameritrade, one of the biggest companies in the United States offering an electronic trading platform for trading financial assets, recently announced that it was going to launch cryptocurrency trading on its parent platform.
Now, according to an official announcement, the organization revealed that they had made an investment in ErisX, a company which is planning to offer both cryptocurrency spot contracts and future contracts in a single exchange.
The website stated,“TD Ameritrade will be working with the team at ErisX as they develop and launch their cryptocurrency trading products. This strategic investment is yet another way to demonstrate our ongoing commitment to innovation—and bring our clients a best-in-class investing and trading experience.”
TD Ameritrade had announced the addition of cryptocurrencies to its portfolio last month after Charlie Lee, the CEO of Litecoin, tweeted about tests conducted on its platform.
Bitcoin Futures contract trading was initiated on the official platform earlier, but was only open to high-volume traders. On TD Ameritrade’s platform, the minimum deposit required for trading BTC future contracts was $25,000, at press time. The potential traders also needed two advisory notes from CFTC and NFA to keep in check the risk associated with virtual assets.
Eris-X, a CFTC-regulated derivatives exchange, will now be open to retail crypto-traders and according to the official statement, the firm has plans to offer both spot exchanges and futures contracts based on the digital currencies.
The official statement mentioned,“This strategic investment is yet another way to demonstrate our ongoing commitment to innovation—and bring our clients a best-in-class investing and trading experience.”