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Skirting U.S. sanctions, Cubans flock to cryptocurrency to shop online, send funds

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HAVANA (Reuters) – Jason Sanchez, 35, was able to start buying spare parts online last year for his cellphone repair shop in Havana thanks to the advent of cryptocurrency trading in Communist-run Cuba.

Cuba, which in many ways remains stuck in the analogue past, may seem an unlikely hotbed for cryptocurrencies – digital tokens that use encryption techniques to secure transactions.

Yet the roll-out of mobile internet nearly a year ago has opened the way for cryptocurrency transactions, and enthusiasts have multiplied as the currency helps overcome obstacles created by U.S. sanctions on Cuba.

The decades-old U.S. trade embargo cuts Cubans off from conventional international payment systems and financial markets. Cubans cannot obtain credit or debit cards for international use on the island and struggle to do so abroad.

So Cubans like Sanchez are buying digital currencies, which are mostly unregulated, decentralized and anonymous, to make purchases online as well as to invest and trade.

“This is really opening new doors for us,” said Sanchez, who uses Bitcoin, the most well known cryptocurrency, to purchase parts not available new in Cuba from an online Chinese store.

Alex Sobrino, founder of the Telegram channel CubaCripto where Cubans debate and trade digital currencies, said he estimated some 10,000 Cubans were using them.

“We are using cryptocurrencies to top up our cellphones, to make purchases online, and there are even people reserving hotel rooms with (it),” said the 33-year-old, who trades crypto as a side gig to his family’s baking business.

To be sure, it is unlikely the digital coins will become a primary payment method for the Caribbean island’s 11.2 million inhabitants any time soon.

Cryptocurrency trading still falls in gray legal territory in Cuba.

And since Cubans mostly do not have credit cards, many have to ask relatives abroad to purchase them their first installment of cryptocurrency or buy within the community on social media channels like CubaCripto, which has more than 400 members.

Often the two sides of the deal meet face to face for the buyer to hand over cash and the seller to carry out the transaction on a laptop or phone.

Sanchez bought fractions of Bitcoin – which are worth around $10,000 each – through a startup founded a year ago by Cubans in Brazil that aims to make crypto purchases more businesslike.

CUBA’S FIRST CRYPTO EXCHANGE

Fusyona, which bills itself Cuba’s first crypto exchange, uses the hard currency of people abroad who want to send remittances to Cuba to invest in any of nine major cryptocurrencies via a larger exchange.

It then uses the pesos of Cubans who want to invest at least the equivalent of $150 in crypto to pay the remittances. The website, which charges a fee of up to 10 percent, has some 1,300 users to date.

“For foreigners, cryptocurrencies is just another option,” said founder Adrian C. Leon, a 31-year-old Cuban computer scientist based in Rio de Janeiro.

“But for Cubans it is a necessity and can be a solution to their exclusion from the global financial community.”

Several crowdfunding platforms shut down accounts for victims of the tornado in Havana earlier this year, for example, despite donations being legal, simply due to the mention of Cuba.

Foreign platforms are nervous about carrying out even legal transactions regarding Cuba due to past multimillion-dollar U.S. fines on institutions for violating sanctions.

Fusyona however set up its own donations account in Bitcoin that faced no such problems.

CUBAN GOVERNMENT CRYPTO?

The Cuban government said in July it was itself exploring the potential of cryptocurrency, following in the footsteps of other countries under U.S. sanctions like Venezuela and Iran.

During a brief stay on the island, U.S. fugitive, crypto evangelist and founder of McAfee antivirus software John McAfee made headlines saying he would be willing to help Cuba in the endeavor.

However Cuba could, like Iran, choose to develop an experimental national cryptocurrency even while banning trading in existing digital currencies due to concerns about money laundering or a clash with its Communist principles.

“We worry the government will restrict us, prohibit things, start to say this is illicit enrichment,” said Sobrino.

By: https://ca.news.yahoo.com

Cryptocurrency

VanEck exec claims Visa, Mastercard were forced to stay away from Libra

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While several dissed Facebook’s cryptocurrency venture, Libra, a few others envisioned the social media giant’s move to be a boost to the crypto-industry, due to its global reach. However, the regulatory climate that surrounds the project has been hindering its launch. Recently, the five companies that backed Libra, namely, Visa, Mastercard, eBay, Stripe and Mercado Pago, followed the footsteps of PayPal and announced that they would no longer be part of this project.

Director, Digital Assets Startegy at VanEck , Gabor Gurbacs, is the latest to comment on the issue, claiming that these companies are being urged to leave the crypto-project. He took to Twitter and said,

“Every company that is leaving #Libra is likely, in some ways, forced to do that. It’s unfortunate and I am sorry that capital markets aren’t free.
Now you have a first-hand understanding why censorship-resistance is important!
> Welcome to #Bitcoin!”

Recently, these companies received letters from a few US senators, urging them to withdraw from the project. The letter stated that if the companies didn’t steer away from the project, they would have to encounter regulatory obligations. Gurbacs addressed the same in his tweet and said that regulatory burdens have hindered these companies from experimenting and innovating. He concluded his tweet by saying,

“America can do better!”

Recently, the New York-based investment giant, VanEck, withdrew its Bitcoin Exchange Traded Fund [ETF] application, a month before the U.S Securities and Exchange Commission [SEC] was scheduled to give its final verdict about the approval or rejection of the application.

Additionally, the SEC also rejected Bitwise’s application that seeked the approval of a Bitcoin ETF. The asset management platform had submitted the application back in January. However, the SEC after delaying a verdict several times over the year, has finally dismissed it.

Source:ambcrypto

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Cryptocurrency

Cryptocurrency market update: Subdued trading action continues on Sunday, XRP/USD gains traction

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  • Bitcoin struggles to determine its next short-term direction.
  • Ethereum rebounds after posting modest losses on Saturday.
  • Ripple remains on track to register weekly gains for the second straight week. 

Major cryptocurrencies stay relatively calm for the second straight day on Sunday and continue to fluctuate between technical ranges in the absence of significant fundamental drivers that could impact the cryptocurrency market sentiment.

Top-3 coins price overview

Bitcoin (BTC/USD) posted small gains on Saturday and closed the $8,300 and is now moving up and down in a tight channel near that level. As of writing, the pair was up 0.5% on a daily basis at $8,345. Unless the pair advances beyond the critical 200-day moving average (MA), which is currently located at $8,700, and registers a daily close there, it is likely to have a difficult time finding its next direction.

Above the 200-day MA, $8,970/$9,000 (Fibonacci %78.6 retracement of June rally/psychological level) could be seen as the next resistance ahead of $10,000 (psychological level/Fibonacci %61.8 retracement of June rally). On the downside, the first technical support is located at $8,270 (20-day MA) before $7,700/$7,800 area (September 26th, September 30th, October 6th, October 7th low).

Ethereum (ETH/USD) lost 0.5% on a daily basis on Saturday and closed at $180. However, this move didn’t have enough momentum to suggest that sellers were looking to take control of the ETH/USD pair’s movements. In fact, the pair easily recovered Saturday’s losses on Sunday and was last seen trading near $182, adding 1.1% on the day. Looking at the near-term technical levels, $185 (50-day MA) aligns as the first hurdle on the upside before $200 (psychological level/October 11th high). Supports, on the other hand, could be seen at $177 (20-day MA), $170 (October 6th, October 7th low) and $152 (September 26th low).

After gaining nearly 2% on Saturday, Ripple (XRP/USD) is outperforming other major cryptocurrencies on Sunday as well. As of writing, the XRP/USD pair was up 1.95% on the day at $0.2783. With this weekend’s rally, the pair remains on track to gain more than 8% on a weekly basis after rising 6.3% in the previous week. 

Looking at the daily chart, the Relative Strength Index indicator continues to stretch higher above the 50 mark, suggesting that bullish momentum is gathering strength. The pair could face the first resistance at $0.29 (October 9th high) ahead of $0.3 (psychological level) and $0.3270 (September 18th low). On the downside, supports are located at $0.2635 (50-day MA), $0.2125 (September 24th low) ve $0.20 (psychological level).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

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Source:coideK

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Cryptocurrencies

SEC Looks to Suspend “Unlawfully Sold” Telegram (GRAM) Cryptocurrency

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The upcoming launch of GRAM tokens has become somewhat of a spectacle for the cryptocurrency community in recent months. With final token disbursement on the horizon, the SEC has filed for emergency action against Telegram and Telegram Open Network (TON), both of whom are offshore entities to the United States. Out of the entire ordeal, the SEC’s classification of GRAM as a security is the biggest risk to the smooth launch and execution of the network, October 11, 2019.

Telegram Crackdown as Expected

Choosing to launch their network and native token without regulatory consultation was seen as a bold move from Telegram; however this appears to have backfired as the SEC has finally decided to “halt” their token offering. Nearly $1.7 billion has been raised by TON to launch a blockchain-enabled payment network that can be used over their messaging app and the scope of potential mainstream adoption is arguably on par with that of Facebook’s Libra, should that ever see the light of day.

The biggest concern for the SEC, at this point, is that GRAM tokens will be sent to respective investors before October 31, 2019. In light of this, the regulator believes this opens up the possibility of the United States market becoming a dumping ground for the tokens.

What irks the regulator the most is when companies issue tokens and don’t register them with the SEC. As the SEC describes, they allegedly evaded registration of their “security” by simply designating it as a ‘cryptocurrency’.

Veering Treatment From the Regulator

In one instance, the regulator could decide to impose a fine on a $4 billion initial coin offering (ICO) that is less than a basic business purchase and allows the project to continue working; or, they decide to completely stop the project from running in the country because they didn’t bow down to U.S. authority, which may open doors for Libra.

By the SEC’s definition, both EOS and Telegram conducted “unlawful digital token sales”. Whether EOS and GRAM are securities or not is up for debate, but that one small difference can’t possibly account for such a large deviation in their treatment.

In the age of decentralized money networks that are self-regulating, the SEC is fighting a very obvious power struggle, and they will do anything to ensure they do not lose their authority over this segment.

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