Rep. Davidson Sees Place for Blockchain in US Manufacturing Despite Congress’ Concerns

United States pro-crypto Congressman Warren Davidson (R-OH) has once again called for clear regulations of blockchain industry to maintain U.S. economic dominance.
On Nov. 4, Davidson published a letter in the Wall Street Journal in response to an Oct. 24 report on automation in manufacturing. The congressman urged the U.S. government to encourage innovators to stay in the country. The letter read:

“If we allow fear to stifle their efforts, we risk surrendering global superiority and sacrificing improvements in quality of living.” 

Rust-belt woes in the face of changing manufacturing
The report to which Davidson was responding focused on concerns that robots and artificial intelligence were taking jobs from U.S. workers. Commenting on manufacturing in the Midwest, it reads: 

“[T]here is compelling evidence that factory automation swung three key Rust Belt states — Michigan, Wisconsin and Pennsylvania — in favor of Donald Trump in the 2016 election.”

Davidson’s letter expressed similar concerns that Americans were letter fears in the face of blockchain innovation prematurely shut down the market.
Davidson — who represents Ohio’s 8th district and is a member of the congressional steel caucus — is optimistic that the improvements crypto technology can bring to manufacturing will outweigh the cons. He told Cointelegraph:

“From improving capital formation, supply chain logistics, reinventing shop floor operations, product identification and traceability, U.S. manufacturers could stand to harness the power of blockchain to unleash incredible innovation and manufacturing growth.”  

Sharing skepticism about Facebook’s Libra project
In the letter, Davidson emphasized that a number of industry-related companies are already moving in countries such as Switzerland, seeking a friendly regulatory ecosystem.
While sharing some of his colleagues’ skepticism about Facebook’s proposed Libra project, Davidson claimed that he treats their fear of blockchain and crypto “shortsighted.” According to Davidson, by deterring initiatives in the industry, the U.S. government risks is “surrendering global superiority and sacrificing improvements in quality of living” just in order to preserve the status quo.
Davidson urges passage of the Token Taxonomy Act reintroduced in April
In a tweet on Nov. 5, Davidson expressed hope that his colleagues in the House Committee on Financial Services can find a way to fight their fear of blockchain so that the U.S. can “maintain technological and economic dominance.” Urging passage of the Token Taxonomy Act, reintroduced in April 2019, the congressman wrote:

“In the midst of technological change, consumers, innovators, and investors need regulatory certainty to keep America’ economy working for them. FinTech is just one example…”

Official: Binance Chain and BNB Will Be Traceable via CipherTrace

American blockchain security firm CipherTrace will provide Anti-Money Laundering (AML) controls for Binance Chain and its native asset Binance Coin (BNB).
CipherTrace to increase AML checks on Binance Chain
Binance Chain, a public blockchain of major crypto exchange Binance and the underlying blockchain for Binance DEX, is expected to improve its AML procedures through CipherTrace, Binance announced on Nov. 5.
Specifically, CipherTrace will be providing Binance Chain with institutional-grade AML controls to increase adoption of the Binance Chain blockchain.
Within the initiative, CipherTrace will enable global developers, investors and regulators to access the Binance Chain blockchain for discovering data such as high-risk addresses. Moreover, CipherTrace will be helping those entities to set various controls to protect decentralized applications, exchanges or other crypto-based applications, Binance wrote in its blog post.
Customer data will not be shared with third parties, Binance COO says
Samuel Lim, chief compliance officer at Binance, claimed that the initiative will not affect Binance users’ security and data protection. Speaking to Cointelegraph, the executive noted that customer information will not be shared with third parties as a result of the new AML practice, adding:

“Users can rest assured that Binance will uphold its usual high standards of user security and data protection.”

Lim also denied to specify to Cointelegraph whether this move would affect listing of privacy coins such as Monero (XMR) in the future, saying that Binance does not comment on specific tokens and maintains the highest integrity in its listing due diligence process.
In the announcement, Lim considered the move as a “major win for the community-driven Binance Chain,” noting that Binance users can soon expect more digital token support across its ecosystem.
Meanwhile, online critics have outlined the third party disclosure risks associated with AML practices by companies such as CipherTrace and Chainalysis. Twitter account theonevortex wrote:

“Looking forward to chain analysis companies like @ciphertrace and @chainalysis getting hacked. These people sell your data to 3 letter agencies and governments WITHOUT your permission.”

CipherTrace recently expanded its platform to support 700 tokens
CipherTrace’s support for BNB and Binance Chain follows the recent expansion of CipherTrace services to up to 700 cryptocurrencies including Ether (ETH), Tether (USDT), Bitcoin Cash (BCH) and Litecoin (LTC) on Oct. 15. Claiming that CipherTrace has expanded to support 87% of the transactional volume of the top 100 cryptos, the firm denied to specify which cryptos will not be supported on the platform at the time.
On Oct. 21, CipherTrace CEO David Jevans argued that crypto regulations by global regulators such as those by the Financial Action Task Force’s would trigger a shift of criminal activity from Bitcoin (BTC) to privacy coins.

President Erdogan: Turkey to Finish Testing Digital Lira in 2020

Turkey’s President Recep Tayyip Erdogan directed that the government should finish testing the national central bank digital currency (CBDC) in 2020. The country’s national blockchain-based digital lira is planned to be issued by the Central Bank in accordance with the 2020 Annual Presidential Program, Cointelegraph Turkey reported on Nov. 5.
Digital lira ‘instant payment’ pilots should be finalized by the end of 2020
Published on Nov. 3, the Presidential Program specifies that the first trials of the digital lira should be conducted and finalized by the end of 2020, according to a document published by Turkey’s official national publication Resmi Gazete on Nov. 4.
Within the pilots, the government reportedly plans to develop a software platform for instant payments based on the digital lira. Alongside the central bank, the project will also involve the national tech innovation agency — the Scientific and Technological Research Council of Turkey, also known as TUBITAK.
As reported by Cointelegraph Turkey, the launch of the digital lira is part of the country’s objective to strengthen the local economy. The document reads:

“The main objective is to establish a financial sector with a strong institutional structure that can respond to the financing needs of the real sector at a low cost, offer different financial instruments to a wide investor base through reliable institutions and support Istanbul’s goal of becoming an attractive global financial center.”

Industry adoption rises in Turkey
The inclusion of the digital lira in the 2020 Annual Presidential Program of Turkey follows previous plans outlined by the state in the country’s 2019-2023 economic roadmap issued in July 2019. In addition to a CBDC, the government is interested in implementing blockchain technology for transportation and customs as well as public services and administration.
In September, the government of Turkey announced plans to set up a national blockchain infrastructure to deploy distributed ledger technology in public administration.
As reported Nov. 1, Changpeng Zhao, CEO of major cryptocurrency exchange Binance, will be a speaker at the Turkish Capital Markets Summit 2019 in Istanbul from Nov. 19–20, 2019.

New Official Register in San Marino Recognizes and Regulates Blockchain Firms

The Republic of San Marino has officially adopted the Register of Blockchain Entities, inviting companies in the industry to apply for certification.
Companies can apply for blockchain certification online
The project was initiated by San Marino’s fully state-owned tech innovation company, the Institute for Innovation of the Republic of San Marino, Cointelegraph Italia reports Oct. 22.
According to local public service broadcaster San Marino RTV, companies in the microstate of San Marino can now apply to be recognized as a blockchain entity via an official form on the official website of the Republic of San Marino Innovation Institute. As per the report, the certification will be granted in accordance with the provisions of the Delegated Decree number 86 of 2019.
Annual checks for certification renewal
According to the report, the newly launched Register of Blockchain Entities will only include entities that fully comply with the rules in the industry. The applicants will have to pass necessary examinations in order to ensure transparency, quality and proper market positioning, the report notes. Additionally, the Institute will conduct constant checks as well as annual examinations in order to renew certifications. Sergio Mottola, president of San Marino Innovation, said:

“The interest of foreign investors has been very high and we believe that this project will have a significant impact on the entire economic system of the Republic, giving the Blockchain Entities the great advantage to act in a legislative framework with clear and defined rules. The registry will allow a fast and clear dialogue with all public and private stakeholders…”

In July 2019, the Republic of San Marino signed an agreement with blockchain application platform VeChain to deploy blockchain tech to provide incentives for sustainable ecological behavior from citizens. In June, the captains regent of the Republic of San Marino, Nicola Selva and Michele Muratori, issued a governmental decree on blockchain tech for businesses.

Kadena Mainnet Goes Live, New $20M Token Sale Starts Tomorrow

The Kadena network, which is led by JPMorgan blockchain veterans, has gone live on Monday, with the firm announcing a new $20 million token sale.
Kadena mainnet launch unlocks mining Kadena coins
According to an announcement on Nov. 4, Kadena has launched its mainnet Chainweb alongside the Kadena token wallet Chainweaver. The firm is also planning to carry out its third token sale from Nov. 5–Nov. 22.
As specified on Kadena’s website, the launch of Kadena’s mainnet means that miners can participate in the Kadena public blockchain network and mine for real Kadena coin.
Co-founded in 2016 by early JPMorgan blockchain developers Stuart Popejoy and Will Martino, Kadena is touted as a parallelized proof-of-work (PoW) consensus mechanism that is designed to improve throughput and scalability while maintaining the security and integrity of Bitcoin (BTC).
Dual structure for Kadena’s new token offering
Kadena’s new $20 million token offering will be hosted on token sales platform CoinList, in which Twitter CEO Jack Dorsey recently invested. Kadena’s token sale will be divided into two types as it will be offered to both accredited and non-accredited investors.
Within the non-accredited token sale, non-United States investors will be able to buy Kadena coins at $1 per token. The tokens will be limited to trade exclusively on CoinList during the first 40 days of the sale and only allowed for free trading after that period.
The second type of token sale will be conducted as a Simple Agreement for Future Tokens (SAFT) and will only be open to accredited investors in the U.S. or abroad. Within the offering, investors will be able to buy Kadena coins at a discount for $0.50. However, according to SAFT rules, such coins will be locked for a period of one year.
As previously reported, Kadena raised $14.9 million as of August 2019. On Aug. 28, Kadena updated its enterprise blockchain platform on the Microsoft Azure Marketplace.

Court Orders $4M in Penalties for Investment Fraud Involving ATM Coin

A New York court has ordered defendants to pay $4.25 million in penalties for investment fraud involving the cryptocurrency ATM Coin.
Case first brought by the CFTC in April 2018
On Nov. 1, the United States Commodity Futures Trading Commission (CFTC) announced that the U.S. District Court for the Eastern District of New York has entered an order against several entities for committing fraud and misappropriating client funds.
The defendants include Blake Harrison Kantor and Nathan Mullins as well as four related corporate entities: United Kingdom-based Blue Bit Banc, Turks and Caicos-located Blue Bit Analytics and two firms from New York — Mercury Cove and G. Thomas Client Services.
Binary option scam involving ATM Coin cryptocurrency
Brought in connection with the CFTC’s Division of Enforcement’s Virtual Currency Task Force, the case was initially filed by the CFTC on April 16, 2018. At the time, the regulator charged the defendants with fraud in connection with a binary options scam involving a virtual currency dubbed ATM Coin.
While the court eventually charged that the defendants committed fraud and misappropriated client funds through investment in binary options, the ATM Coin cryptocurrency was reportedly used by the defendants as part of the scam scheme. According to the CFTC, the defendants converted Blue Bit Banc investments into ATM Coin — a “worthless” cryptocurrency that Kantor had misleadingly told investors was worth significant sums of money.
According to the CFTC’s Fraud Advisory on binary options, there are several binary options that are listed and registered on exchanges or traded on a designated contract market that are overseen by the CFTC and the Securities and Exchange Commission (SEC). However, it states that a large number of them operate on internet-based platforms that are not always compliant with U.S. financial regulations. 
In late September, decentralized data governance startup Band Protocol released its Bitcoin (BTC) and Ether (ETH) binary options app running on the Ethereum’s blockchain. Users of the BitSwing platform can bet on Bitcoin’s price movements, while a correct guess allows them to double their staked Ether.

21 Crypto Exchanges Ask for License From Malta’s Financial Watchdog

The Malta Financial Services Authority (MFSA) has received queries from 21 cryptocurrency exchanges seeking licensure under the Virtual Financial Assets (VFA) Act.
21 firms out of 34 potential VFA providers are crypto exchanges
According to an official announcement on Nov. 1, the 21 exchanges are among the 34 prospective VFA service providers that sent their letters of intent to the Maltese financial regulator in order to acquire a VFA Services Licence.
The MFSA clarified that, until Oct. 31, crypto providers have been operating under the transitory provisions specified in Article 62 of the VFA Act. In order to continue their operations in or from Malta, those firms will be now required to apply for authorization with the MFSA.
VFA license applicants to fall under one of four categories
According to a report by Finance Magnates, applicants will be classified at the discretion of the MFSA into one of four categories that define the requirements of license holders. The regulator is also planning to enforce administrative penalties for compliance violations, the report states.
In the official announcement, the MFSA said that it will soon be contacting the applicants to schedule a preliminary meeting. Once the meeting is held, applicants will have 60 days to submit a full application back to the authority.
18 VFA agents registered so far
According to the announcement, the MFSA has received 30 applications for registration of VFA Agents, with 18 of them having been registered. The list of the registered agents is available on the MFSA website.
The VFA Act is part of Malta’s blockchain-related legislation adopted in July 2018 alongside the Malta Digital Innovation Authority Act and the Innovative Technological Arrangement and Services Act. In September, the MFSA published its strategic plan claiming that it will actively monitor and manage business-related risks related to cryptocurrency firms.
Yesterday, the regulator warned of a new Bitcoin (BTC) scam scheme dubbed “Bitcoin Future,” noting that it shares the same features as a previously identified fraudulent entity called “Bitcoin Revolution.”

Telegram’s Grams Wallet Is Available on GitHub in Test Mode

Telegram’s crypto wallet Grams Wallet is now available for MacOS, Windows and Ubuntu in testing mode, with the source code published on GitHub.
Grams Wallet users can get test tokens
Users can now download the test wallet client from its website, create an address and receive private keys as well as request and test Gram tokens in the app via a special Telegram bot called TestTonBot.
Specifically, TestTonBot invites users to test out the service by requesting 5 to 20 tokens to the generated crypto address on the app. After users request a specific amount of tokens, the bot notifies them about the start of the request execution before sending a separate message that test Grams were credited to the wallet.
Transactions are tracked on the TON testnet
The test transactions are visible on the Telegram Open Network (TON) testnet explorer with details such as transaction time and amount as well as the TestTonBot’s wallet address (sender) and the last recorded transaction.
The TON testnet explorer and node software were released on Sept. 6, 2019, in preparation for the Telegram’s subsequently aborted plans to launch the Gram digital currency in late October. The launch was delayed when the United States Securities and Exchange Commission deemed Telegram’s $1.7 billion Grams token offering illegal on Oct. 11.
The launch of the test version of the Grams Wallet follows a report on Oct. 19 that the District Court for the Southern District of New York postponed a hearing on the SEC injunction filing against the TON. The court moved the hearing to Feb. 18–19, 2020.

Two Pro-Crypto US Congressmen Note Bitcoin White Paper’s 11th Birthday

U.S. Representatives Patrick McHenry (R-NC) and Warren Davidson (R-OH), have encouraged Bitcoin (BTC)-powered innovation on the Bitcoin white paper’s 11th birthday.
U.S. policymakers should not attempt to deter Bitcoin’s tech
U.S. congressman McHenry, who represents North Carolina’s 10th District, urged that American authorities should not stifle the new technology in a tweet on Oct. 31.
According to the official, policymakers should facilitate the development of new technologies. McHenry reiterated his previous bullish sentiments about Bitcoin, stating:

“The world that Satoshi Nakamoto envisioned, and others are building, is an unstoppable force. As policymakers, we should not attempt to deter this technology, but instead ask ourselves: what are we doing to meet the challenges & opportunities of this new world of innovation?”

Bitcoin has big potential in protecting privacy
Rep. Davidson outlined Bitcoin’s potential to protect online privacy, retweeting Cointelegraph’s article on Bitcoin’s whitepaper turning 11 years old. The congressman stated:

“Eleven years ago, this anonymous white paper opened up infinite possibilities for technological innovation and #privacy protections. It’s time the US harnesses this potential and establishes a framework for American #blockchain innovators.”

Earlier in October, Davidson suggested that Facebook adding Bitcoin to its native crypto wallet Calibra would be a “way better idea” than launching their own cryptocurrency Libra.
Unprecedented growth
In a blog post on Oct. 31, major U.S. crypto exchange and wallet service Coinbase pointed out that Bitcoin’s adoption has been developing much faster than other transformative technologies such as email and television. The exchange wrote:

“The television set was invented in 1927 but by the end of the 1940s only 2% of American families owned one. Bitcoin, on the other hand, went from an idea in 2008, and a first transaction in 2009, to over 27 million users in the US alone in 2019, or 9% of Americans.”

According to a survey last spring, as much as 11% of the American population owned Bitcoin as of April 2019.

NY Court Orders Veritaseum to Pay Back $8 Million From Illegal ICO

The CEO of Delaware-registered blockchain firm Veritaseum LLC and New York-registered Veritaseum Inc., Reggie Middleton, was ordered to pay $8.4 million in disgorgement, according to a new court order. Additionally, Middleton is liable for a civil penalty of $1 million, fintech publication FinanceFeeds reported on Nov. 1, citing a court order issued on Oct. 31.
According to the report, a judge at the New York Eastern District Court has approved a motion for a consent judgment in a securities fraud case against several defendants involved in Veritaseum. Specifically, the defendants are jointly liable for disgorgement of $7,891,600, which represents a part of illegally earned profits as well as prejudgment interest amount of $582,535.
Moreover, the report states that the defendants will not be allowed to engage in any offering of digital security, in accordance with the court order. 
Middleton asks the court for more time to respond to the complaint
The case was first brought up by the United States Securities and Exchange Commission (SEC) in mid-August 2019 when the authority filed a complaint against Middleton as well as two of his firms. 
In the document, the SEC alleged that the entities were responsible for an unregistered $14.8 million initial coin offering from late 2017 to 2018 and requested a U.S. District Court to freeze the defendants’ assets.
On Oct. 9, the SEC entered settlement talks with Veritaseum, reportedly rescheduling the initial conference at the New York Eastern District Court for Nov. 14, 2019. Since Oct. 9, Veritaseum (VERI) has dropped about 37% from $24 to $15 per coin at press time, according to Coin360.