Ruling means no specific licence needed to buy or to sell crypto-currency
Bitcoin, a Florida judge says, is not real money. Ironically, that could provide a boost to use of the crypto-currency which has remained in the shadows of the financial system.
The July 22 ruling by Miami-Dade Circuit Judge Teresa Pooler means that no specific license is needed to buy and sell bitcoins.
The judge dismissed a case against Michel Espinoza, who had faced money laundering and other criminal charges for attempting to sell $1,500 worth of bitcoins to an undercover agent who told the defendant he was going to use the virtual money to buy stolen credit card numbers.
Espinoza's lawyer Rene Palomino said the judge acknowledged that it was not illegal to sell one's property and ruled that this did not constitute running an unauthorized financial service.
"He was selling his own personal bitcoins," Palomino said. "This decision clears the way for you to do that in the state of the Florida without a money transmitting license."
In her ruling, Pooler said, "this court is unwilling to punish a man for selling his property to another, when his actions fall under a statute that is so vaguely written that even legal professionals have difficulty finding a singular meaning."
She added that "this court is not an expert in economics," but that bitcoin "has a long way to go before it is the equivalent of money."
Bitcoin, whose origins remain a mystery, is a virtual currency that is created from computer code and is not backed by any government. Advocates say this makes it an efficient alternative to traditional currencies because it is not subject to the whims of a state that may devalue its money to cut its debt, for example.
Bitcoins can be exchanged for goods and services, provided another party is willing to accept them, but until now they been used mostly for shady transactions or to buy illegal goods and services on the "dark" web.
Bitcoin was launched in 2009 as a bit of software written under the Japanese-sounding name Satoshi Nakamoto. This year Australian programmer Craig Wright claimed to be the author but failed to convince the broader bitcoin community.
In some areas of the United States bitcoin is accepted in stores, restaurants and online transactions, but it is illegal in some countries, notably France and China.
It is gaining ground in countries with high inflation such as Argentina and Venezuela.
But bitcoin values can be volatile. Over the past week its value slumped 20 percent in a day, then recouped most losses, after news that a Hong Kong bitcoin exchange had been hacked with some $65 million missing.
Impact across US, world
Arthur Long, a lawyer specializing in the sector with the New York firm Gibson Dunn, said the July court ruling is a small victory for the virtual currency but that it's not clear if the interpretation will be the same in other US states or at the federal level.
"It may have an effect as some states are trying to use existing money transmitting statutes to regulate certain transactions in bitcoin," Long told AFP.
Charles Evans, professor of finance at Barry University, said the ruling "absolutely is going to provide some guidance in other courts" and could potentially be used as a precedent in other countries to avoid the stigma associated with bitcoin use.
Bitcoins can store value and hedge against inflation, without being considered a monetary unit, according to Evans, who testified as an expert witness in the Florida trial.
"It can be used as an exchange," he said, and may be considered a commodity which can be used for bartering like fish or tobacco, for example.
Evans noted that "those who are not yet in the bitcoin community will be put on notice: as long as they organize their business in a particular way they can avoid the law."
But he added that "people who are engaged in illegal activities will continue to do what they are going to do because they are criminals.- AFP"
Aug 25, 2015 ... Tokyo (AFP) - The arrest of MtGox boss Mark Karpeles has begun to shed light
on the defunct Bitcoin exchange after hundreds of millions of ...
Jun 27, 2016 ... Despite the increase in the price of bitcoin amid the UK's recent EU referendum,
a new research note from Needham & Company asserts it ...
Mar 30, 2014 ... It seemed ludicrous that the man credited with inventing Bitcoin - the world's most
wildly successful digital currency, with transactions of nearly ...
Securing the bitcoin trading platform has proved elusive.
The price of bitcoin fell sharply today exacerbating an already ongoing decline as global market participants reacted to news that one of the largest digital currency exchanges had been hacked. Bitcoin Drops Nearly 20% as Exchange Hack Amplifies Price Decline
The price of the virtual currency bitcoin fell sharply after Hong Kong-based digital-currency exchange Bitfinex said it was hacked, resulting in the possible theft of about $65 million worth of bitcoin.
News of the Bitfinex hack hit the price of bitcoin hard in heavy trading on Tuesday. It fell to $540 by late in the day, down about 12% from its level near $613 early Tuesday, according to CoinDesk. At one point, it traded as low as $480, down about 22%, though it recovered to about $548 by late morning in New York on Wednesday.
The hack marks one of the largest thefts in bitcoin’s short history and follows a separate alleged theft of an estimated $60 million worth of ethereum, a rival virtual currency, in June. In 2014, investor confidence in bitcoin also was dented by another larger cybersecurity breach, at the Japanese exchange Mt. Gox.
Hacking and thefts of investor property stand as two of the biggest issues that may prevent the fast-growing digital currency from gaining more widespread use. Bitcoin trades on an open ledger known as the blockchain that has excited technologists for its ability to cut out expensive layers of bureaucracy in various areas of commerce.
But securing the bitcoin trading platform has proved elusive. Tuesday, Bitfinex acknowledged the latest theft in a statement on its website and said it was halting all trading on Bitfinex as well as the deposits and withdrawals of digital tokens.
“The theft is being reported to—and we are co-operating with—law enforcement,” the statement said. “We are deeply concerned about this issue and we are committing every resource to try to resolve it.”
Zane Tackett, Bitfinex’s director of community and product development, confirmed that 119,756 bitcoins were stolen and said the company knows “exactly how relevant systems were compromised.” At Tuesday’s value, the amount of bitcoin stolen was worth about $65 million. Mr. Tackett said the company is working with law enforcement and analytics companies to try to track down the stolen coins and is working to get its platform back up so customers can check their accounts.
It wasn’t clear what percentage of Bitfinex’s overall assets were stolen or whether or not the company had adequate insurance to cover the theft.
“We are investigating the breach to determine what happened, but we know that some of our users have had their bitcoins stolen,” the statement added. “We are undertaking a review to determine which users have been affected by the breach. While we conduct this initial investigation and secure our environment, bitfinex.com will be taken down and the maintenance page will be left up.”
In 2014, the Tokyo-based exchange Mt. Gox collapsed after a yearslong series of attacks resulted in the theft of about 850,000 bitcoins, at the time worth about $450 million. About 200,000 were later recovered. In June, Mt. Gox Chief Executive Mark Karpales was released from a Japanese prison on bail, after serving 10 months. The company’s liquidation is ongoing.
Bitcoin rallied earlier this year but had been selling off lately after an anticipated event known as a “halving” in early July lowered the subsidy paid to bitcoin miners supporting the network.
In 2015, Bitfinex switched to a system protected by what is known as “multiple signature” security, a feature that requires multiple “keys” to access bitcoin in a virtual wallet, and keeps the customers’ money in separate accounts, rather than pooling them into one larger account.
The exchange was fined $75,000 by the U.S. Commodity Futures Trading Commission in June for offering illegal off-exchange commodity transactions financed in bitcoin and other cryptocurrencies and for failing to register as a futures commission merchant. The CFTC said at the time that Bitfinex cooperated with its investigation and voluntarily made changes to its business practices to comply with regulations.
- The Wall Street Journal BY PAUL VIGNA AND GREGOR STUART HUNTER
Bitcoin worth US$72 mil stolen from Bitfinex exchange in Hong Kong
A Bitcoin (virtual currency) paper wallet with QR codes and a coin are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015.
Reuters/Benoit Tessier/File Photo
HONG KONG (Aug 3): Nearly 120,000 units of digital currency bitcoin worth about US$72 million was stolen from the exchange platform Bitfinex in Hong Kong, rattling the global bitcoin community in the second-biggest security breach ever of such an exchange.
Bitfinex is the world's largest dollar-based exchange for bitcoin, and is known in the digital currency community for having deep liquidity in the US dollar/bitcoin currency pair.
Zane Tackett, Director of Community & Product Development for Bitfinex, told Reuters on Wednesday that 119,756 bitcoin had been stolen from users' accounts and that the exchange had not yet decided how to address customer losses.
"The bitcoin was stolen from users' segregated wallets," he said.
The company said it had reported the theft to law enforcement and was cooperating with top blockchain analytic companies to track the stolen coins.
Last year, Bitfinex announced a tie-up with Palo Alto-based BitGo, which uses multiple-signature security to store user deposits online, allowing for faster withdrawals.
"Our investigation has found no evidence of a breach to any BitGo servers," BitGo said in a Tweet.
"With users' funds secured using multi-signature technology in partnership with BitGo, a lot more is at stake for the backbone of the bitcoin industry, with its stalwarts and prided tech under fire," said Charles Hayter, chief executive and founder of digital currency website CryptoCompare.
The security breach comes two months after Bitfinex was ordered to pay a US$75,000 fine by the US Commodity and Futures Trading Commission in part for offering illegal off-exchange financed commodity transactions in bitcoin and other digital currencies.
BITCOIN SLUMP
Tuesday's breach triggered a slump in bitcoin prices and was reminiscent of events that led to the 2014 collapse of Tokyo-based exchange Mt Gox, which said it had lost about US$500 million worth of customers' Bitcoins in a hacking attack.
Bitcoin plunged just over 23% on Tuesday after the news broke. On Wednesday it was up 1% at US$545.20 on the BitStamp platform.
Tackett added that the breach did not "expose any weaknesses in the security of a blockchain", the technology that generates and processes bitcoin, a web-based "cryptocurrency" that can move across the globe anonymously without the need for a central authority.
A bitcoin expert said the scandal highlighted the risks of companies using cryptography for their ledgers.
"The more you rely on its benefits, the greater the potential for damage when keys are stolen. We still have some way to go to create highly secure but convenient systems," said Singapore-based Antony Lewis.
The volume of bitcoin stolen amounts to about 0.75% of all bitcoin in circulation.
It is not yet clear whether the theft was an inside job or whether hackers were able to gain access to the system externally. On an online forum, Bitfinex's Tackett said he was "nearly 100% certain" it was no one in the company.
Bitfinex suspended trading on Tuesday after it discovered the breach. It said on its website that it was investigating and cooperating with the authorities.
The security breach is the latest scandal to hit Hong Kong's bitcoin market after MyCoin became embroiled in a scam last year that media estimated could have duped investors of up to US$387 million. The bitcoin trading company closed after the scandal.
The president of the Hong Kong Bitcoin Association said the only way to protect information is to disperse it in so many small pieces that the reward for hacking is too small.
"For an attacker, the cost-benefit strategy is quite easy: How much is in the pot and how likely is it that I'm getting the pot?" said Leonhard Weese.
The attack on Bitfinex was reminiscent of a similar breach at Mt. Gox, a
Tokyo-based bitcoin exchange forced to file for bankruptcy in early
2014 after hackers stole an estimated $650 million worth of customer
bitcoins. - Reuters
Aug 25, 2015 ... Tokyo (AFP) - The arrest of MtGox boss Mark Karpeles has begun to shed light
on the defunct Bitcoin exchange after hundreds of millions of ...
Jun 27, 2016 ... Despite the increase in the price of bitcoin amid the UK's recent EU referendum,
a new research note from Needham & Company asserts it ...
Mar 30, 2014 ... It seemed ludicrous that the man credited with inventing Bitcoin - the world's most
wildly successful digital currency, with transactions of nearly ...
Apr 14, 2014 ... The Internet has spawned a new form of currency that's purely digital called
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KUALA LUMPUR: If you are surfing the Internet on a public Wi-Fi, always assume someone is watching you out there.
Better yet, do not connect to any public Wi-Fi at all, said LE Global Services (LGMS) executive director Fong Choong Fook, whose private cybersecurity firm employs hackers to test the network security of the country’s major banks.
“I would never use a public Wi-Fi,” he said.
“Even an IT person may not be able to tell if the access point he is connected to is safe or if the activities are being watched.
“There may be signs like your Internet is slowing down but hackers can make it so elegant that you won’t even notice,” he said in an interview.
Malaysia’s national cybersecurity agency CyberSecurity Malaysia (CSM) said hackers could position themselves between a person’s device and the Wi-Fi router and are able to record sensitive data that the surfer is keying into his device.
Hackers can also “create” their own Wi-Fi and trick people into thinking they are connected to a credible public access point like the one from a restaurant, airport or office – when in actual fact these devices are connected to the criminals’ hardware.
Thus, they would be able to remotely watch everything a person is sending out on the Wi-Fi like passwords, e-mails or credit card information.
As frightening as these attacks may sound, Fong said this had been going as early as the 1990s.
Demonstrating to The Star how a hacker could steal information, LGMS set up an “evil twin” Wi-Fi using a laptop and named it after a famous franchise restaurant just below its office in Puchong, Selangor.
Fong connected two devices to this Wi-Fi and proceeded to log into social media, e-mail and Government websites.
Within seconds of logging in, the hacker’s computer began recording the activities in both devices in the experiment – recording every e-mail address, username and password that was keyed in.
Though the demonstration was only meant for the devices in the controlled environment of the LGMS office, three other users got connected to the dummy Wi-Fi, thinking they were linked to the franchise restaurant’s Internet, during the experiment.
“Hackers can target one specific person or they can target everyone in a cafe to get their devices to send all their data through their dummy Wi-Fi
“When they have your information, they can steal your identity. They can pose as you on Facebook, or send out e-mails to your contacts under your account,” he said.
Fong advised users to avoid connecting to public Wi-Fi or to only limit their browsing to Internet searches if they must connect to one.
The firm also suggested users to subscribe to VPN (virtual private network) technologies to secure their traffic.
VPN encrypts data on devices, making it hard for hackers to spy on the user’s online activities. Most VPNs are available on a subscription basis, much like an anti-virus programme.
So far this year, CSM has recorded eight instances where private Wi-Fi networks were hacked and 1,462 cases of online intrusions have been reported, which is nearly double the number of incidents compared to the same period in 2015.
It advised users to keep their Internet browsers up to date and to disable the feature which automatically saves password in the cache –as it makes it easier for criminals to steal.
by Nicholas Cheng The Star/Asia News Network
82% of travellers would use public Wi-Fi
KUALA LUMPUR: You are on a holiday in a foreign country. Naturally, you want to upload pictures to your Facebook or send messages to your friends back home or trawl the Internet for places to visit.
Chances are there is no Internet data connection where you are and you would search for whatever free Wi-Fi there is at the airport, hotel or cafe to stay connected.
An estimated 82% of travellers would choose to connect with unsecured public Wi-Fi, a practice which could up risks of cyberattacks, said Kaspersky Lab.
The cybersecurity company surveyed 11,850 people worldwide and found that people on holiday would be carefree when it comes to their personal data protection.
The study found that 42% of travellers said they were less likely to care about the credibility of the Wi-Fi when they were on holiday compared to on business travels.
A third (33%) admitted to visiting websites of sensitive nature using foreign Wi-Fi, while almost half of the respondents conducted online banking (48%), shopped online (46%) and made private calls (35%) when they were abroad.
In a separate study, it found that at least 22% of travellers who conducted transactions online had experienced money loss while 8% had had a credit card compromised while in a foreign country.
Most of the time, victims do not even know they are being watched.
CSM advised users to keep an eye on their devices’ firewall alerts. Any trigger may indicate that a third party may be trying to access their devices illegally.
A report by MasterCard estimates that 10.9 million Malaysians travelled for overseas holidays in 2014, with the numbers expecting to hit 15.2 million by 2020.
The Kaspersky study also found that people were more likely to throw caution to the wind while on holiday with respondents saying they were 18% more likely to let strangers handle their smartphones to take pictures, 28% more likely to leave their devices unsupervised, 18% more likely to contact strangers online and 6% more likely to engage in “sexting”.
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According to Cybersecurity Malaysia, an average of eight personal accounts ...
special devices in the market that enabled anyone to “sniff” WiFi networks.
Dec 21, 2014 ... 2014 has seen a tsunami of epic hacks and identity thefts, including the ... said
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China launches 23rd BeiDou satellite into space - CCTV News - CCTV.com English http://t.cn/R5SsGFc
China eyes Silk Road countries for its Beidou satellite system
18 satellites to launch for BDS by 2018
China on Thursday vowed national efforts to complete its Beidou satellite navigation system to serve global users by 2020, with priority going to countries involved in the new Silk Road initiative.
The current goal of developing China's BeiDou Navigation Satellite System (BDS) is to "provide basic services to countries along the land and maritime Silk Roads and in neighboring regions by 2018, and to complete the constellation deployment of 35 satellites by 2020 to provide services to global users," said a white paper released Thursday by the State Council Information Office.
A "globalized" BDS would have "positive and practical significance" in terms of connectivity around the globe, especially the interconnection between China and Southeast Asian countries under the Silk Road plan, known as the Belt and Road initiative, Huang Jun, a professor at the School of Aeronautic Science and Engineering at Beihang University, told the Global Times on Thursday.
In line with the Belt and Road initiative, China will jointly build satellite navigation augmentation systems with relevant nations and promote international applications of navigation technologies, the white paper states.
To fulfill the 2018 goal, the country plans to launch some 18 satellites for the BDS by 2018, Ran Chengqi, BDS spokesperson, told a press conference on Thursday.
"In priority Chinese cities such as Beijing and Urumqi in Northwest China's Xinjiang Uyghur Autonomous Region, as well as low latitude countries like Thailand, the BDS is capable of offering a positioning accuracy of better than five meters," said Ran, who is also director of China's Satellite Navigation System Management Office.
Since 2015, the country has sent up seven more satellites into space in support of the BDS, including five navigation satellites and two backup satellites, Ran added, citing Sunday's launch of the BDS' 23rd satellite - a backup satellite - as an example.
In 2020, the BDS might offer different positioning accuracy choices and could provide centimeter-level accuracy under certain requirements, said Lu Weijun, a BDS expert at Beijing University of Posts and Telecommunications.
Unique features
Despite being a late starter compared with the US-developed GPS, China's BDS has unique features, Huang said, citing the BDS short-message communication service as an example.
"The short-message communication service is mainly useful in places with insufficient ground and mobile communication capabilities, such as deserts, seas and disaster areas where communication facilities have been destroyed," Lu told the Global Times.
More than 40,000 fishing vessels along China's coastline have been equipped with the BDS application terminals, Ran said, adding that they also provided better communication for islands near the coastline.
The BDS short-message communication service is mainly handled by five Geostationary Orbit (GEO) satellites, Lu said. Located above China, the five GEO satellites mainly serve a coverage area of Chinese territories and the Asia-Pacific region" and "could be used to locally enhance the signal in wartime, when other satellites might have been closed."
An independently designed global navigation and positioning network would also contribute to national security, Huang said.
Industrial chain
China is developing chips, modules and other basic products based on the BDS and other compatible systems, and fostering an independent BDS industrial chain, the white paper noted.
"By the end of April, the BDS technology has been applied to more than 24 million terminals and over 18 million mobile phones," Ran said.
It is expected that by the end of this year, up to 50 million mobile phones will have been installed with domestic chips that will be compatible with three satellite navigation systems, namely the BDS, GPS and Russia's GLONASS, Wang Hansheng, vice president of Olink Star, a Beijing-based company that makes navigation satellite system products, told the Global Times.
May 9, 2016 ... The Long March-7 rocket departed for its launch base in Hainan on ... A container
carrying China's new-generation Long March-7 rocket is ...
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rendezvous and docking CCD optical imaging sensor. It will be used on China's
... China's Space Age Grows Up As U.S. Space Race ..
May 30, 2016 ...China plans to launch the world's first quantum satellite that can achieve ... Chinaspace station will be completed by 2020, the super "eye" to ...
Dec 28, 2011 ... Ran Chengqi, the Director of the China Satellite Navigation Office introduced .....
China plans to launch the world's first quantum satellite that can achieve ... Chinaspace station will be completed by 2020, the super "eye".
Jun 24, 2012 ... [Shenzhou 9: China's 1st Manned Space Docking (Pictures)] ... "Heavenly Palace
" in Chinese) is a prototype for China's first manned space station, ...... China
plans to launch the world's first quantum satellite that can achieve...
Jun 25, 2012 ...China has to develop her own space station due to USA ..... China plans to
launch the world's first quantum satellite that can achieve ... first..
China is poised to become the first country to send encoded information from space that cannot be hacked. Scientists are making final adjustments to China’s first quantum communication satellite. The project chief describes it as a revolution in communications.
China will launch its first experimental quantum communication satellite in July, according to the Chinese Academy of Sciences.
BEIJING, May 28, 2016 (Xinhua) -- Deputy chief engineer Zhou Yilin (3rd L) discusses with other technicians beside the quantum satellite at Shanghai Engineering Center for Microsatellites, under the Chinese Academy of Sciences, in Shanghai, east China, May 25, 2016. China plans to launch the world's first quantum satellite that can achieve secure communication in July. The satellite is dedicated to quantum science experiments. (Xinhua/Cai Yang)
China is poised to become the first country to send encoded information from space that cannot be hacked. Scientists are making final adjustments to China’s first quantum communication satellite. The project chief describes it as a revolution in communications.
A quantum photon cannot be separated or duplicated, which means if someone tried to decode information, the encryption would change, and the receiver would know that his letter was opened by someone.
Scientists hope the new technology will protect China from future cyber issues. In 2015, cases involving information technology in China rose by more than 120 percent, according to survey by a non-profit cybersecurity institution. China plans to use its quantum satellite system to cover the planet by 2030.
On the ground, China is also building its own quantum information sharing network for use in national defense and security. At some point, China plans to connect the ground network to the quantum satellite system.
It has taken five years for Chinese scientists to develop and manufacture the first quantum satellite. In June, it will be transported to the Jiuquan Satellite Launch Center in southwest China for final preparation and launch in July., 2016
China wins space race to launch world's first 'quantum communication' satellite in fight against hackers
May 9, 2016 ... The Long March-7 rocket departed for its launch base in Hainan on ... A container
carrying China's new-generation Long March-7 rocket is ...
Mar 1, 2016 ...China space station will be completed by 2020, the super "eye" to speed upspace rendezvous ... The "eye" is China's newly developed third-generation
rendezvous and docking CCD optical imaging sensor. It will be used on China's
... China's Space Age Grows Up As U.S. Space Race ... Jun 25, 2012 .
Businesses are embracing it by coming up with their innovations and startups
A BUZZWORD growing in popularity in the financial world today is “fintech”, short for financial technology, which in a nutshell refers to the use of technology to deliver faster and cheaper financial services.
Going by some predications, fintech could take a big chunk of business away from traditional banks as it is being run by smaller more nimble start-ups. But the debate is still out there as to how much that chunk will be. In Malaysia in particular, fintech’s presence is still nascent and small. Fintech transactions totalled a mere US$6.37mil this year compared with a global figure of US$769.3bil, according to Statista, an online statistics provider.
It however predicts that fintech transaction values to grow to US$14.4bil by 2020. A significant number of fintech companies, especially those in the digital payments space, actually work alongside local banks.
Still, fintech is not to be taken lightly. Top bankers themselves are speaking of its imminent threat to their business. Former Barclays CEO Anthony Jenkins referred to it as banking’s “Uber moment” to describe technological advances that could see bank branches close down and people laid off.
Last April, Jamie Dimon the CEO of the US’ largest bank JP Morgan in his letter to shareholders warned that “Silicon Valley is coming.” “There are hundreds of start-ups with a lot of brains and money working on various alternatives to traditional banking,” Dimon wrote.
On the home front, just last month prominent banker Datuk Seri Nazir Razak echoed such views. Speaking at the Star Media Group’s PowerTalk: Business Series held at Menara Star, Nazir opined that fintech companies are disrupting banking.
“Bankers must respond to this Uber moment. People actually dislike banks today, since the global financial crisis. Recent data suggests that in the US, the cost of banking intermediation has not changed for 100 years in real terms. This simply means banks have not gotten more efficient over the years, so its right that banks get attacked by ‘Silicon Valley’, which has identified banking as an industry that is very ‘ripe’ or juicy to disrupt.”
Even the central bank is echoing these views.
In his maiden keynote address at an Islamic finance conference in Kuala Lumpur last week, Malaysia’s newly-appointed Bank Negara governor Datuk Muhammad Ibrahim gave a grim reminder to banks of the threats posed by fintech. In particular, Muhammad quoted from a report by McKinsey that 10% to 40% of banking revenue is possibly at risk by 2025 due to innovations outside banking institutions that are able to offer a significant pricing advantage and that technologically-driven applications had spread to nearly every segment of the financial sector, with the number of fintech start-ups having doubled in the last year. “Fintech is challenging the status quo of the financial industry,” he said.
To be fair, Malaysian banks are quick to point out that while fintech does represent a disruption to business, they are embracing the movement, by coming up with their own fintech innovations or by working with fintech startups.
So what is fintech?
In a nutshell, fintech is an economy of companies using technology to improve efficiencies and effectiveness in the financial services industry. To illustrate the offerings of fintech companies, consider the business model of homegrown start-up MoneyMatch, which is modelled after UK-based TransferWise which began in 2011 and today moves US$10bil a year through its platform.
MoneyMatch has created a platform to match individual buyers and sellers of currencies, with the attraction of both sides enjoying better exchange rates than what banks and even money changers offer. The rate used by the MoneyMatch site is the middle rate of the currency exchange spread. So an individual for example, willing to buy US$100 for his travels will be matched with someone wanting to change his US$100 into ringgit. The parties will be matched on this application and then proceed to make their exchange in an agreed location. MoneyMatch is also entering the area of cross border fund transfers.
“For example, someone in Singapore wishing to transfer money to Malaysia can be matched with someone here wishing to send an equal amount of money across the Causeway. Hence the parties can make the respective transfers to local accounts of their choice after an exchange of information. This means the transfer is done minus any cross-border transfer fees,” explains MoneyMatch co-founder Naysan Munusamy, who had spent many years as a forex trader with a number of banks before venturing out to start MoneyMatch.
Peer lending
One key growth area in fintech is peer to peer or P2P lending, online platforms that match borrowers with lenders, bypassing the traditional financial institutions. The business had even attracted big names such as Goldman Sachs. The most notable name in this space is Lending Club, which had launched its service as far back as 2007 and became the US’ largest technology IPO in 2014, raising around US$1bil.
Lending Club claims that its platform – which enables borrowers to get unsecured loans of US$1,000 to US$35,000 – has now helped originate close to US$16bil in loans.
Locally, last month the Securities Commission (SC) launched a regulatory framework for P2P lending, paving the way for small and medium-sized companies to access this new avenue of debt funding. Under SC’s rules though, individuals are not allowed to raise money on the local P2P platforms. Rather it is meant to only fund projects and businesses and a number of safeguards are in place. For example, those behind the operator of the P2P platform need to pass the “fit and proper” test; the rate of financing cannot be more than 18% (as that would be deemed predatory lending) and that the P2P operator has to disclose information related to the issuer and the risk assessment and credit scoring parameters adopted by the operator. There is no authorized P2P platform in Malaysia yet as parties wishing to run such platforms have to submit their application to the SC soon.
In China, P2P lending has virtually exploded. As a recent report by Citibank highlights, “China is past the tipping point”, with fintech companies having similar number of clients as the major banks. The report notes that China is the largest P2P lender in the world, with transactions topping US$66bil, compared with the US with only US$16.6bil.
Regulating fintech
But there are problems. Some unregulated P2P platforms in China had run scams. Others helped fuel an equity roller-coaster by offering funding for stock investments. This led to the Chinese benchmark index rallying more than 150% in the 12 months to last June before abruptly crashing. The Chinese authorities are now cleaning up the P2P sector.
So what are the risks of fintech regulation in Malaysia? And do companies like MoneyMatch need be regulated and licensed?
In an emailed reply to StarBizWeek, Bank Negara says: “Fintech start-ups that engage in activities under the purview of the central bank must comply with existing laws”. Bank Negara explains that regulated businesses include banking, insurance or takaful, money changing, remittance, operating a payment system or issuing payment instruments.
“A fintech company that engages in any activity that falls within the definition of a regulated business must be properly authorised to do so under the relevant laws.
“As an example, collecting deposits via a fintech platform would require approval from Bank Negara.
“A fintech company that is authorised to conduct a regulated business under the laws that Bank Negara administers will be subject to the oversight of Bank Negara pursuant to those laws.”
What this indicates is that Bank Negara is going to regulate fintechs the same way it does banks. But exactly how, it still isn’t clear.
But the good news is this: Bank Negara says it is engaging with firms in this space (and presumably that includes the likes of MoneyMatch), “to understand and where appropriate facilitate their business and provide guidance on aspects on regulation that would be applicable to them.”
Bank Negara adds that it is in the process of formulating a framework that “encourages innovation without undermining financial stability, the integrity of the financial system or the adequate protection for financial consumers.”
The SC has also been pushing for fintech innovation to develop in Malaysia. Last year, Malaysia became the first country in the region to introduce the regulatory framework for equity crowd funding. (While P2P is about companies raising debt, crowd funding is for entrepreneurs to sell equity to investors.)
The SC has also launched aFINity@SC, a fintech community aimed at industry engagement and more recently launched the P2P financing framework, which is aimed at addressing the funding needs of small businesses.
Chin Wei Min, the SC’s new head of innovation and digital strategy, says: “We think fintech can provide solutions to some of the unserved and underserved needs in the capital market.”
Chin adds: “We are also mindful of the risk, fraud and all the pitfalls. We continue to enhance our engagement model. We want to remain very close to the industry.”
Fintech’s hiccups
Some recent developments in the fintech space, however, point to weaknesses in fintech companies. LendingClub, the poster boy company for P2P lending has seen its shares tumble, wiping out about a third of its market value.
This came as it faces scrutiny after its founder and CEO resigned following an investigation into improper loan sales.
The US Treasury has released a report criticising the P2P lending business, recommending it to be more tightly regulated. Some commentators are liking P2P lending to the early days of the subprime mortgage bubble of 2006-07.
It is more likely though that the experiences of fintech in mature markets like China and the US will serve as good guides as to how this business will grow in this part of the world, with the requisite regulations put in place.
And the jury is still out as to whether traditional banks here will lose significant parts of their businesses to fintech start-ups.
Or as one industry observer puts it, fintech is more likely to usurp the business of the shadow banking market here, as some unserved borrowers now have the option to move away from loan sharks or “Ah Longs” and into the crowd funding or P2P platforms. But after that, banks could be next.
By Risen Jayaseelan, Wong Wei-Shen, and Zunaira Saieed The Star
Apr 16, 2016 ... WHO dominates the phone dominates the Internet. The whole world of
information is now available in your hand, replacing your own mind as a ...
SAN FRANCISCO — Who is Satoshi Nakamoto? For many in the tech world, the identity of bitcoin's elusive creator has been a long-running parlor game. And the speculation might not be over.
Australian entrepreneur Craig Steven Wright, who announced Monday that he founded the digital currency , convinced at least one longtime bitcoin contributor that he's the real deal. He managed that feat via a technical demonstration involving Nakamoto's secret bitcoin keys. But Wright's public documentation, which he posted online Monday , underwhelmed others and left the question of Nakamoto's true identity far from settled.
"There's no way you can conclusively prove that you are the creator of bitcoin," said Jerry Brito, executive director of Coin Center, a Washington, D.C.-based crypto-currency think tank, who is skeptical of Wright's claims.
Tracking a pseudonymous cryptographic genius would be challenging under the best circumstances. And here we're talking someone who invented a way for people to send money around the world anonymously, without banks or national currencies. Someone who apparently disappeared five years ago for unknown reasons.
None of that has stopped people from trying. Journalists, researchers and amateur detectives have scoured Nakamoto's emails and online posts, plus the original bitcoin code, for unusual phrases, cultural references and other potential clues to their author.
One of the most celebrated candidates — to his own dismay — was an unassuming Japanese-American engineer who found himself in the cross-hairs of Newsweek magazine in 2014.
Dorian Satoshi Nakamoto was wrongly identified as the inventor of Bitcoin in 2014
A Newsweek cover story fingered Dorian Satoshi Nakamoto, a retired resident of suburban Los Angeles County, after citing circumstantial clues and a vague comment that Nakamoto made when confronted briefly on his front doorstep. The article sparked a media frenzy and a car chase with reporters that ended at the Los Angeles offices of The Associated Press — where Dorian Nakamoto emphatically denied any involvement with bitcoin.
An earlier contender named in a 2011 New Yorker magazine piece was Michael Clear, then a graduate student in cryptography at Trinity College in Dublin. The New Yorker cited some of Nakamoto's writings, which used British slang such as "maths" for mathematics and "flat" for an apartment. It also noted that Clear had worked on currency-trading software for an Irish bank and co-authored a paper on "peer-to-peer" technology similar to that used in bitcoin.
At first, according to the New Yorker, Clear was evasive when asked at a cryptography conference if he had created bitcoin. But he later denied it repeatedly. He also suggested another candidate to the New Yorker reporter, naming Finnish researcher Vili Lehdonvirta, who studied virtual currencies and created video games.
"I would love to say that I'm Satoshi, because bitcoin is very clever," Lehdonvirta told the New Yorker, after laughing for several seconds. "But it's not me."
Speculation has also focused on a Hungarian-American computer scientist named Nick Szabo, who was called a likely candidate by linguistic experts who conducted their own "reverse textual analysis" — essentially, looking for distinctive phrases or word patterns — on an early white paper by the bitcoin creator.
The only problem? Szabo, who has worked on other digital currencies, has repeatedly denied creating bitcoin.
Other scientists' names have surfaced over the years; some theories pose the notion of two or three working together. But denials have usually followed each new mention.
At one point, two Israeli mathematicians floated, and later retracted, the notion that bitcoin was created by the founder of Silk Road, an online bazaar known for trade in various illicit goods.
Conspiracy theorists have even speculated it could have been the work of some shadowy government agency — no one's saying which government — to undermine established currencies or somehow monitor online transactions. (That theory depends on the unproved notion that the creator retained the ability to decode bitcoin's encryption.)
Vice magazine once suggested Nakamoto might be Gavin Andresen, an American software expert and early bitcoin enthusiast who has helped push bitcoin forward in Nakamoto's absence. Andresen has denied it — and on Monday declared that he believes Wright is Nakamoto.
But other cryptocurrency enthusiasts aren't convinced it's Wright. The truth, they say, is still out there. - AP
Indeed, the way Wright has stage-managed the latest revelations about himself seem inconsistent with what we know about Nakamoto. Wright chose to give his scoop to the BBC, the Economist, and GQ. These are all excellent publications, but none of them are known for their in-depth coverage of computer security. The real Satoshi Nakamoto should have anticipated that no one would give much weight to a GQ scoop about his identity.
Bitcoin was Nakamoto's attempt to create a financial system that didn't require trusting the fallible human beings that run the banking system. Yet when Wright decided to reveal his identity as Nakamoto, he chose to do it via face-to-face meetings with a handful of journalists and Bitcoin insiders instead of providing mathematically rigorous proof that anyone could verify. It's hard to believe that's what Nakamoto would have done.
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