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18/04/2018: Biggest Stories in the Cryptosphere

  1. Russia Attempts Crack Down on Telegram

Some websites and services in Russia are experiencing outages as Russia attempts to crack down on Telegram following it successful ICO pre-sale. Telegram is an encrypted messaging service that is particularly popular in Russia. It recently raised $1.7 bln in two private ICO pre-sales, possibly why the Russian communications regulator Roskomnadzor is coming down on it now. The Russian government wants to be able to view the messages on its network, but Durov, a known libertarian, wrote on Telegram that he had “promised [Telegram] users 100% privacy and would rather cease to exist than violate this promise”. However, despite the blocking of various IP addresses, Telegram remains operational in Russia.

2. Bank of Japan Views Cryptocurrencies as Destabilising, But Remains Open-Minded

Bank of Japan’s Deputy Governor Masayoshi Amamiya discussed cryptocurrencies and digital innovation during a closing speech at a FinTech conference on Monday. He pointed out how important technological innovations have been in making finance more inclusive over the past years. This echoed comments made by Singapore’s Minister for Finance recently. However, he expressed concerns that cryptocurrencies could be disruptive to the traditional “two-tiered” system of a central bank and private banks. However, Japan is one of the countries that has been the most open to cryptocurrencies, blockchain, and associated technologies. The speech ended on an optimistic note: “Although the Bank of Japan does not have a plan to issue its own digital currency at this juncture, the Bank fully acknowledges the importance of deeply understanding innovative technologies not only for maintaining financial stability but also for seeking the possibility of applying them to central bank infrastructure in the future.”

3. Korean Blockchain Association Releases Rules for Self-Regulation

As government regulators struggle to keep up with the pace of blockchain innovation, self-regulation has become an important issue for those operating within the industry. The Korean Blockchain Association has 14 crypto exchanges as members, including Bithumb, the largest country’s largest. It has issued some rules to help them self-regulate, and will then examine them for compliance. These rules are focused on stopping illegal activities like money laundering and insider trading, and protecting customers. They include regularly publishing financial reports and audits, managing clients’ coins separately, and holding a minimum of $1.8 million in equity (2 bln won).

4. New York Attorney General’s Office Launches Inquiry Into Crypto Trading Platforms

New York is also interested in protecting clients of crypto trading platforms, announcing an inquiry yesterday. New York Attorney General Eric T. Schneiderman will be launching the “Virtual Markets Integrity Initiative”, which will inspect their “policies and practices”. The exchanges will have to fill out questionnaires with questions on issues such as how they protect their customers funds, and how they prevent insider trading. Questionnaires were sent to major exchanges including Poloniex, Kraken and Bitfinex. The press release stated that the initiative aims to promote “the accountability and transparency in the virtual currency marketplace that investors and consumers deserve.”

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