Canadian financial regulatory authorities are considering putting in place rules for cryptocurrency exchanges in the country.
The Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) published a consultation paper on Thursday, seeking input from the fintech community on how regulatory requirements can be developed for cryptocurrency platforms.
“The emergence of digital and crypto assets continues to be a growing area of interest,” said Andrew J. Kriegler, president and CEO of the IIROC in a separate statement on Thursday, adding:
“We must adapt to innovation, and provide clarity to the market about how regulatory requirements might best be tailored and applied to these unique business models, while maintaining investor protection.”
Considering the “novel” features and risks of cryptocurrencies, the regulators proposed applying securities laws wherever applicable.
For instance, if cryptocurrencies are securities and/or derivatives traded on an exchange, that exchange would be subject to securities and/or derivatives regulatory requirements, they said. Most “utility tokens” have involved the distribution of securities, usually as investment contracts, they added.
The agencies are of the view that cryptocurrency platforms are hybrid in nature, meaning they can perform functions of one or more market participants, including alternative trading systems, exchanges, dealers, custodians and clearing agencies.
Therefore, they are considering the preparation of a set of “tailored” regulatory requirements to address the risks and features of cryptocurrency platforms.
Currently, none of the cryptocurrency exchanges in Canada is recognized as an exchange nor is authorized to operate as a marketplace or dealer, according to the paper.
The recent QuadrigaCX saga highlighted the lack of regulations covering the cryptocurrency industry in Canada.
The Canadian cryptocurrency exchange’s CEO, Gerald Cotten, died last December, apparently without leaving a way for staff to access the computer storing the failing exchange’s funds. QuadrigaCX still owes its customers roughly $190 million in both cryptocurrency and fiat.
Last month, the securities watchdog in the Canadian province of British Columbia, the British Columbia Securities Commission (BCSC), said that it has no remit to regulate the troubled exchange.
The CSA and IIROC consultation paper is open for public comment until May 15.
The TIE Concludes Correlation Between BTC 2020 Bullish Prices and BTC Halving
The TIE, an alternative data provider for digital assets, has discovered a definitive correlation between Bitcoin’s market price and the mentions of the upcoming halving. This comes after evaluating the data from various media outlets, inspecting Bitcoin’s price at that point in time.
Definite Connection Concluded
Joshua Frank, the CEO of The TIE, explained the matter in greater detail. He said that his group took notice that the BTC experienced a downward price movement as the mentions of the upcoming halving were starting to decrease, back in the previous fall. He explained that the Bitcoin price, in turn, started to go back up as the narrative of the halving began to pick up steam once more.
On the 22nd of February, 2020, the TIE made a tweet regarding this matter. Attached, they showed a visual graph that demonstrates both the price in BTC, as well as the overall mentions of the halving
The firm concluded that the number of times the upcoming halving was mentioned when it comes to crypto publications, had a direct effect on the overall price movement of BTC. As it stands now, however, the amount of media covering the halving has reached an all-time high. The price of BTC is working to follow that.
Looming Supply Reduction
The halving event mentioned so many times, is referencing the Bitcoin halving that is expected to occur in around May of 2020. This would decrease the mining reward for the cryptocurrency, halving it to 6.25 from 12.5, hence the name. What this entails is that there will be less BTC entering the market consistently, eventually leading to the coin stopping production altogether.
This event happens about every four years of Bitcoin’s existence, with Bitcoin itself already having completed two other halvings in the past. Historically speaking, the development has led to a large amount of hype and thus higher prices for the entire crypto industry, especially BTC. Due to this prior knowledge, many Bitcoin investors are going full bullish for the event.
Sentiments Is King
After reviewing data coming from 22 major crypto media outlets, The Tie has concluded that there is a “moderately strong and positive” correlation when it comes to Bitcoin’s price, and the number of times the upcoming halving has been mentioned.
With any luck, a bubble won’t pop again like the last two times, but many analysts grimly predict the events repeating itself this year. Only time will tell, but probabilities say that another market crash might happen.
How to Hide Your Bitcoin – Opsec, Anonymity, Cold Storage, Brainwallet, Dexes and Non-Custodials
In an era of increasing economic uncertainty, surveillance, specialized cybercrime and hacking, knowing how to hide bitcoin safely has become a paramount concern for crypto holders. Whether it’s by way of taking wise opsec measures, utilizing noncustodial tools, leveraging a DEX, or even storing seed phrases in your brain, there’s no shortage of measures that can be taken to protect your stash. This article seeks to detail some of the best ways anyone can use to ensure their coins remain safe from bad actors.
Safekeeping for Sats
A “satoshi” is the smallest unit of bitcoin, and when it comes to the popular cryptocurrency, keeping one’s stash safe down to the last sat is important. For those new to the space — and perhaps even for more experienced hodlers who’ve overlooked certain security precautions and tips — what follows is a list of ways to ensure your stack of satoshis remains in good hands: your own.
Opsec Best Practices
Opsec, or operational security, is highly important when securing crypto holdings. It’s not sufficient just to have any old two-factor authentication (2FA), for example, as some variants of the measure like SMS-enabled 2FA can still leave easy attack vectors. SIM jacking is one example of this, and all that’s required is an overly cooperative and friendly customer service worker at a cellular provider.
When it comes to hacks like SIM jacking, where an attacker swaps your device data to a new SIM card by way of social engineering, phone number 2FA won’t help, and gives an infiltrator keys to whatever account is secured by that means. Instead, using a 2FA app such as Google Authenticator — and not a phone number, is a better bet. Be sure to disable SMS 2FA on sensitive accounts — especially crypto exchanges — and switch to a more secure option. When a phone number can serve as a key to your crypto safe, hiding bitcoins behind such info is a bad idea.
For account passwords, usernames, pseudonyms, and other such information used for accounts, be sure to use unique and secure choices. Though you may be a huge Guns n’ Roses fan, having “Axl6969” as a password for everything probably isn’t a good idea. Trusted and verified password managers can make maintaining even a long list of unique and strong passwords fairy easy, and quality services allow users to keep their master password stored locally, and not on any central server.
Anonymity and Social Awareness
Where anonymity is concerned, be sure all records, memos, or other account information which might tie your real identity to accounts and usernames are encrypted. Phone numbers should not be given out publicly, and a secure virtual number service can be used to route public calls to your personal device. The more you secure sensitive information, the less likely it is a bad actor or social hacker will be able to connect the dots and gain access to your bitcoins.
Further, simply knowing when to keep quiet is a great tool for keeping bitcoins secure. As mentioned above, sharing a phone number publicly is not a good idea. Nor is exclaiming to the whole bar on karaoke night that you just made huge gains on Binance and are buying everyone a round. The more people know about your holdings, the more potential interest can be piqued in malicious actors who seek to gain as much info as possible to access accounts. This type of openness can even endanger personal safety, as one of the quickest ways to get to someone’s device for criminals may just be to steal it.
Cold storage refers to storing bitcoins and their private keys offline for greater security. With private keys never being exposed to the internet, the security levels of cold storage options can be significantly higher than other avenues. Examples include hardware wallets such as Trezor and Ledger, which allow funds to be spent without private keys leaving the device, paper wallets created offline, and even more extreme options like fireproof seed phrase capsules. Perhaps most James-Bond-like of all the choices is storing a wallet in something hopefully not cold, but undeniably secure: your own mind.
Known as a “brainwallet,” storing a bitcoin seed phrase in your brain is definitely secure, as long as you don’t forget it or get mixed up. Using a mnemonic device such as a colorful, vivid story, particularly sharp bitcoiners can retain a 12-word seed phrase entirely in their heads. As with all such measures though, there’s a trade off. If you’ve got to run from a bad actor or flee the country and can’t take anything with you, this option is undeniably appealing. But beware: once forgotten, no customer service group on the planet is going to be able to help you retrieve the lost mental bitcoins.
Leveraging DEXs, Noncustodial Options
While popular centralized exchanges like Coinbase, Binance and Kraken can make getting into bitcoin easy, and even storing it for day-to-day transactions, it is never advisable to leave bitcoins sitting around online when not trading. Exchanges have been hacked multiple times, are subject to governmental regulation and technical difficulties, and as such are not secure for stashing sats. Once such an exchange is shut down, hacked, or frozen, so is your money.
Better options include decentralized exchanges (DEXs) with open source code and where software and network data is stored locally. Also, such networks allow for greater anonymity with minimal to no registration requirements, and can afford features such as encrypted chats for P2P trade and blind escrow. The Bisq network is one example of such an exchange. Local.bitcoin.com, another, is a peer-to-peer bitcoin cash marketplace where users need only to enter an email to trade BCH privately for a variety of traditional assets.
Where crypto wallets are concerned, noncustodial options (wallets where the private keys are solely in the user’s possession and are not centrally stored) are always best, as a seed phrase can restore the wallet if an accident happens or a device is lost. When it comes to custodial wallets, however, once the provider is compromised, so is the user. Always be sure to verify any wallet you are using is noncustodial, as the whole point of bitcoin is for you — and nobody else — to be in control of your money.
The Less Trust, the Better
Trust between humans can be a beautiful thing, but when it comes to stashing bitcoins, the less trust, the better. Satoshi himself cited this as the central issue concerning traditional financial systems. The Bitcoin creator noted “the inherent weaknesses of the trust based model” in the Bitcoin whitepaper, and developed the cryptocurrency in answer to these challenges.
When hiding your bitcoins, then, it’s always paramount to remember the reason for the asset in the first place: so you don’t have to trust any central entity to keep your money safe. At the end of the day things like customer service laziness at AT&T, human forgetfulness, and having to trust certain tools or developers may always be an issue, but the closer we can get the trust level to zero, the better.
Binance-Backed FTX Exchange Seeks Billion-Dollar Valuation in Equity Token Sale
Derivatives exchange FTX is hosting a public sale for tokenized equity in the hopes it can attain a billion-dollar valuation.
The Binance-backed platform, famed for creating the Shitcoin Index of low-market coins, announced Tuesday its FTX_Equity token sale would welcome investors willing to allocate a minimum $250,000 each.
Each FTX_Equity token, valued at $2 each, represents an ownership stake in the FTX Trading Ltd., the holding company that owns the derivatives exchange. Investors will be able to purchase the tokens directly through an exchange account with U.S. dollars, bitcoin, ether or FTX’s native FTT token.
Although token holders receive dividend payouts into their exchange accounts, they will not have any voting rights and will not be named individually on the shareholder registry. Investors can convert FTX_Equity into conventional FTX equity, but only in batches of 1.25 million tokens.
It isn’t clear what the exchange rate is between normal and tokenized FTX equity. Although FTX will not accept investment from residents of the U.S. and some other jurisdictions, there appear to be no restrictions preventing retail investors from participating in the sale.
An FTX spokesperson told CoinDesk the equity tokens had not been created “just yet.”
The sale is expected to close March 7.
Launching in May 2019, FTX offers futures, options and perpetual contracts on approximately 30 different digital assets. It raised $8 million in a private equity round in August 2019.
At the time Binance acquired a minority stake last December, the exchange processed approximately $170 million in average monthly volume on its bitcoin and ether futures. That has since increased to nearly $355 million in February, according to data analytics site Skew.
FTX CEO Sam Bankman-Fried told Bloomberg at the time of the Binance investment that the exchange was now valued in the “hundreds of millions of dollars.” Although the number of tokens up for sale has not been disclosed, the token equity sale will take FTX’s value into line with its billion-dollar equity valuation, the exchange said.
Speaking to CoinDesk, an FTX spokesperson said a billion-dollar valuation was in line with the valuations of other similar-volume cryptocurrency exchanges. They added that “revenue would justify that valuation with moderate growth, and would justify a significantly higher valuation if we can sustain the high growth rate we’ve been having.”