Month: October 2020

One of the leading Bitcoin payment service providers, BitPay, has decided to function permanently on a remote basis. BitPay’s CMO, Bill Zielke, recently said to the press that the company’s entire team is working remotely and would continue to do so until further notice. The decision to shift towards remote work was taken by the company’s management due to the ongoing Covid-19 pandemic situation. Bill Zielke further added that the company’s employees would have the option to continue working from home or use the company’s offices once the pandemic situation gets better. The office spaces would be dominantly used for company events, meetings, customer events, meet-ups, training, and other such activities.

The co-founder and chief executive officer of BitPay, Stephen Pair, said to techtimes.com that the company has been following the Covid-19 pandemic from the very beginning. Due to the seriousness of the situation during the pandemic, the executive team of BitPay decided to continue business as a visual from home. It would help the employees stay safe and ensure the business activities don’t get negatively impacted. The work from the home policy adopted by BitPay turned out to be fruitful, and it is for this very reason, the company has decided to switch to cyber-platforms going ahead.

Cryptocurrency is an internet-based industry, and thus, it seemed only natural that the firms in the cryptocurrency sector would flourish through remote work. Other major firms, including Binance, have announced that it would be operating under a remote work mechanism until the situation gets better. As per an internal release of BitPay, the majority of the employees amounting to over 85 percent, would prefer working from home. It is primarily because the employees feel they are more productive when working from home. It is what helped BitPay’s executive team to shift to work-from-home on a permanent basis.

Andrew Kelin, BitPay’s marketing director, stated with regards to this shift that it took a bit of time-management and adjustment as he and many of the company’s employees are social and have outgoing personalities. However, the shift to work-from-home has been immaculately well-integrated and collaborative. The virtual platforms available today have helped the teamwork efficiently as we were working side-by-side. The fact that no negativity is reported from the company’s staff during the shift to remote work has clearly proved that it is meant to stay. The company’s Argentina team preferred working from home, whereas 86 percent of the US team and 75 percent of the Amsterdam team also opted for work from home going forward.

In Russia, too, the work from home culture has been flourishing rapidly. It is partly evident from the fact that there has been a massive surge in demand for graphic cards. However, the demand for graphic cards and high-end PC accessories also stem from the increasing trend of digital mining activities. Due to the Covid-19 pandemic, not only the company in the crypto world but just about every firm in the different sectors has made the shift to work from home, partially or completely.

There are many advantages that have come into the limelight of working from home, one of which is the amount of time saved from the daily commute to and from the office. It lowers the company’s operating costs drastically while ensuring that the team’s productivity remains high at all times. The employees are found to be more engaged and productive as they get the flexibility they are looking for. Like in any work culture, there are pros and cons of working from home, but overall this shift has proven a key to ensuring fluidity in business during crisis situations the world is facing today.

The U.S. derivatives regulators have canceled the registration of the swap execution facility or SEF of TeraExchange, a US-based Bitcoin company. The company, which is based out of New Jersey, received the licensing back in 2016. It was among the first companies in the U.S. to receive the license to offer crypto derivatives services. In a largely publicized event, the world woke up to the news of the first Bitcoin derivative transaction being taken place on a regulated and licensed platform. It was a huge success for the Bitcoin community and was considered the first step towards the Bitcoin revolution.

Derivative trading is considered to be one of the best ways to hedge Bitcoin holding while reducing their risks. It led to the beginning of a new era where the Bitcoin derivative market could grow. It also led to large banks and financial institutions to invest capital into Bitcoin. But, the platform has not facilitated any transaction in the past three years continually. The U.S. Commodity Futures Trading Commission released a statement stating that TeraExchange, LLC, has been provided with an Order of Reinstatement. The order, which was affected immediately, was issued based on Section 5 of the Commodity Exchange Act and also the CFTC Regulations 37.3(b) along with 37.3(d).

TeraExchange was one of the first companies to be offered a Bitcoin swap agreement in 2015. It laid out the legal framework that allowed any two parties to exchange their cryptocurrencies based on certain standard terms. The regulatory body found that the decision was taken after the company failed to stop wash trading and also prearranged trading on its platform. The CFTC came to know about two suspicious offsetting transactions but was told that it was just to test their systems. But, the very next day, the company released a press release informing that the first Bitcoin derivative transaction took place on the exchange. Since CFTC sees such transactions and its publicity as a violation of their rules, TeraExchange was asked to clarify its stand. The company did not admit or deny any wrongdoing and settled those charges with CFTC without paying any fines.

SEFs work under CFTC’s regulations if they want to clear any OTC products such as OTC interest rates or credit swaps. The new services were included in the draft as part of the Frank Act and Consumer Protection Act (2010). According to this, the NDFs are financial establishments that needed clearing from the regulatory body. It helped the government in providing pre-trade and also post-trade transparency. In the past, the U.S. regulatory body has issued licensing to many blockchain start-ups and companies. But it was not just the crypto market where the facility did not take off. Only a few of the big companies are now operating in the market, such as CME Group, ICE, Tullet Prebon, and Bloomberg. Here, Bloomberg has about 50 percent of the total swap trade market.

There are other companies such as LedgerX that are not careless as TeraExchange. The company is already taking multiple steps and going beyond what is expected from them to ensure compliance with the regulation. Apart from registering themselves with the SEF, they have also registered themselves with the derivatives clearing institution. Even though the company already has the SEF registration, it is not yet ready to launch its services. Once they have both the licenses, they would launch themselves in the market. Thus, even with the setback of TeraExchange, the future of bitcoin derivates looks good.

The European Union, even in the very recent past, did not have any regulations on cryptocurrencies. However, the European Commission, the EU’sEU’s executive arm, has come up with regulations to overlook the cryptocurrency world, which is believed to be a significant step for monitoring digital assets.

What kind of regulations are expected?

The leaked European Commission draft suggests that every cryptocurrency should be treated as any other regulated monetary instrument. As per Markets in Crypto Assets (MiCA), new rules on digital assets custody and the capital requirement will be provided. The regulations would also define the relationship between the token issuer and the token holder with proper guidelines to file complaints against projects.

The idea of a regulatory sandbox initiative for companies developing infrastructure for trading and settlement of digital assets has also been highlighted in the proposal. The new regulations aim to give legal certainty to the issuer of the digital assets simultaneously, reducing the risk of the investors.  

As per the proposal laid down by the commission, the cryptocurrency developers should issue “white paper” providing detailed information about the issuer, the token, and the trading platform so that it becomes easy for the potential purchaser to make an informed decision and also understand the risk related to his investment.

These documents are to be vetted by the EU regulators before the issuer commences the operation. The draft also highlights that the European Banking Authority (EBA) shall be empowered with rights to carry on site investigation and impose fines up to 5 percent of the total annual revenue of the crypto firm or double the amount of the profits gained by these cryptocurrencies because of the violation of the guidelines.

One of the main aims of regulating cryptocurrency is to reduce market fragmentation. The new regulation suggests that the cryptocurrency companies authorized by any of the 27 countries under the European Union will be able to operate across all other member states.

How would the Cryptocurrency world react?

Experts think that the regulations will bring hindrances in the growth of the cryptocurrency world. With a community of 2.7 billion people, Facebook’sFacebook’s Libra is a concern for the regulators. Backed by Central Bank issued currency like U.S. Dollars and government debt, the stablecoin could enable money laundering and destabilize monetary policy while jeopardizing user privacy.

The final word

The regulation update is based on the leaked 167 page draft by the European Commission. It is, however, going to see the light of the day by this year. If passed, MiCA would turn the European Union into the largest and most regulated space for cryptocurrency across the world.