Author: Karson Yaara

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The latest about Facebook’s cryptocurrency project known as Libra, is Calibra’s shift in the development of a conventional payment processing system.

The partnership with the non-profit Libra Association is no longer focused on developing blockchain technology to support FB’s Libra token. It can be recalled that the plan encountered serious opposition from legislators and regulators. During last year’s Congressional hearings, FB officials who were grilled by House Representatives failed to provide credible defense of its ability to protect potential consumers, who will consider using the Libra cryptocurrency.

Can FB’s Calibra Offer the Same Financial Services of WeChat Pay?

The opposition to Facebook’s cryptocurrency project is mostly due to the social media site’s involvement in several scandals affecting the security and privacy of user information. Nonetheless, the FB subsidiary still plans to launch a payment processing system called Facebook Pay.

In doing so, FB will be able to offer FB users the same e-wallet services that leading mobile social-app WeChat provides to its millions of app users. Although it is not yet clear if Calibra will have the same features as WeChat Pay and its QR Code payment protocols.

The Calibra platform’s digital payment system will accept government-backed currencies like the U.S. dollar, U.K pounds, Canadian dollars, Australian dollars and the likes. Eventually, Calibra’s payment systems will include Libra tokens as part of the currency options available to FB users

FB’s payment processing subsidiary is set to launch its platform in October, after Trump’s ban on the China-developed mobile messaging and social app WeChat, takes effect on September 20, 2020.

However, it is still not clear whether U.S. lawmakers and regulators will allow Facebook to operate its Calibra subsidiary as a financial services provider, Zuckerberg’s plans to capture former WeChat app users via a Calibra app, can still face regulatory pressures.

The government of Singapore has taken a step forward in recognizing cryptocurrencies as legal tender through the Payment Services Act (PSA).

The Act, which passed parliamentary legislation last January 2020 includes cryptocurrency as among the specific payment services allowed as part of the country’s payment systems; officially categorizing digital coin payments under “digital payment token services.”

The PSA sets the regulatory guidelines that the Monetary Authority of Singapore will follow in overseeing not only cryptocurrency operations but all other payment services currently being utilized in the country’s payment system.

The list of specified payment services mentioned in the new legislation includes: payment accounts creation, local money transfers, foreign or cross-border money transfers, merchant-purchases payment services, e-money issuances, digital or cryptocurrency payment services and money-changing activities.

MAS Allows 7 Cryptocurrency Firms to Operate Pending License Approval

As a demonstration of the government’s willingness to promote new and innovative payment methods, the Monetary Authority of Singapore gave 7 cryptocurrency operators temporary authority to operate.

Within a period of 6 months, Coinbase, Binance, Bitstamp, Luno, Gemini, Wirex and Upbit can offer cryptocurrencies as modes of payment, while pending the MAS’ decisions on whether to approve or reject their respective license application.

Their immediate acceptance as part of Singapore’s payment system was in line with their early compliance in notifying MAS about their cryptocurrency operations in Singapore

While the U.S. SEC sees the rise in cryptocurrency a good sign, the FBI sees the increase as a sign of more cryptocurrency frauds taking place.

Only recently, Ms. Hester Peirce, the current commissioner of the U.S. Securities and Exchange Commission (SEC), was pleased to note that many investors are carrying out investment strategies by diversifying portfolios; including investing in cryptocurrency markets.

The SEC Commissioner, who has oft been described as crypto-friendly, said the COVID-19 crisis, albeit disrupting all industries, has underscored the significance of conducting work and business using virtual spaces. That being the case, many have also shown interest in diversifying their investment portfolio by way of the crypto space.

However, the Federal Bureau of Investigation (FBI) is seeing a different side when it comes to increased cryptocurrency demand. The FBI is wary that with the increase in demand for cryptocurrency, there will be a corollary increase in cryptocurrency scams and fraud schemes.

New Modi Operandi Employed by Crypto Scammers

The FBI gives advice about new cryptocurrency fraud schemes by providing details on how scammers and fraudsters carry out their crypto-malfeasances.

One of the most common is by sending out emails containing threats of blackmails. The modus operandi is to demand crypto payment in exchange for a piece of information that could embarrass you, your family or your business. Currently during the COVID-19 health crisis, blackmails come with threats of infecting you and everyone close to you, with COVID-19, regardless of whether the blackmail threat is founded on truth or conjectures. :

Some work-from-home (WFH) employees have been duped into believing that a caller is his or her employer, who is making a request to deposit crypto funds to a nonprofit organization as donation. The request is made on the pretext that the employer does not have cryptocurrency but would like to make a donation to an organization that is accepting only crypto money. The WFH employee will be given assurance that the employer will reimburse him or her as soon as the crypto donation has been confirmed.

Luring customers to buy non-existent treatments or or a piece of equipment that comes with guarantee to protect buyers from coronavirus infection. However, the seller accepts only cryptocurrency payments being a more secure form payment during the COVID-19 pandemic.

These are only some examples of cryptocurrency frauds that have surfaced ever since countries have put citizens under national lockdown due to the COVID-19 pandemic.

After Great Britain’s Brexit, or withdrawal from the European Union, became official last January 31, 2020, the country’s Financial Conduct Authority (FCA) came out with a formal announcement of its sole authority to monitor and regulate cryptocurrency-related activities.

According to the FCA announcement published last January 10, 2020, the focus of supervision will be the UK-registered businesses engaged in cryptocurrency operations and their compliance with Anti-Money Laundering (AML) and Counter Terrorist Financing (CTF) regulations and requirements.

Even prior to Brexit, the FCA had issued a warning in July 2019 to UK-based cryptocurrency firms. As a regulatory body, it deems cryptocurrencies as “ill-suited” to offer as investment products to small investors. The FCA believes that cryptocurrencies offered as exchange-traded notes and derivatives, pose a great risk to consumers due to the widespread misinformation about them as a financial product.

The Financial Conduct Authority is the regulator for all financial services companies and financial markets in Great Britain. On the other hand, banks, credit unions, insurers, major investment firms and building societies, are under the regulatory supervision of the Prudential Regulation Authority (PRA), to which the primary goal of regulations is to promote the safety and soundness of those types of firms.

FCA’s List of Requirements for Cryptocurrency Businesses Based in the UK

Along with the announcement of its authority to regulate UK firms engaged in cryptocurrency operations, the FCA also provided a list of requirements with which such businesse must comply.

1. Conduct risk identification and assessment pertaining to AML and CFT

2. Development of policies and controls aimed at eliminating identified risks related to AML and CFT.

3. Apply customer due diligence by identifying and verifying customers by obtaining customer name and photograph based on an official document confirming a person’s identity, date of birth and residential address.

The FCA also stated

“We intend to proactively supervise compliance with the new regulations, and will take quick action when and where firms fall short of desired standards in ways that cause risks to the integrity of the UK market”

China’s Cryptography Law, which the National People’s Congress legislated and passed sometime in October 2019, took effect last January 01, 2020. The law intends to regulate cryptocurrency encryptions as a way of strengthening the safeguards against the threats posed by cryptocurrency operations to China’s national security.

In fact instead of combatting the blockchain technology system supporting cryptocurrency operations, the China’s State Cryptography Administration (SCA) of the Chinese Communist Party, developed the guidelines on how cryptography should be used by both the private and public sector.

According to reports, it took the SCA five (5) years to develop the initial draft that details the guidelines promulgated as Cryptography Law. Although viewed as a way of fostering the cryptocurrency business in China, it is largely perceived as a precursor to future laws that will govern the use, operation and application of China’s own Central-Bank backed cryptocurrency.

Currently called as the Central Bank Digital Currency or CBDC, its introduction will make China the first country to introduce a national cryptocurrency unit.

Overview of What China’s Cryptography Law Includes

The primary purpose of China’s Cryptography Law is to regulate encryption in its use for cryptocurrency operations that fall in line with the blockchain technology. The Cryptography legislation enumerates and describes three different types of encryption : Core, Common and Commercial encryptions.

Core and Common encryptions pertain to codes used in safeguarding all state secrets, which are further sub-categorized as “Secret,” “Highly Secret” and “Top Secret”. The Cryptography Law requires all agencies of the public sector to use core and common encryption in storing and transmitting state secrets contextual to China’s national security.

Private sector firms on the other hand have to use Commercial codes to protect their proprietary trade secrets.

In imposing the Cryptography Law, the main guiding principle is the protection of China’s national security. Therefore the new law sets forth guidelines on how cryptography should be used to help safeguard national security against cyber security threats on a nationwide scale.

Threats include encryption efforts deemed as causing harm to the Chinese Communist Party and any application that undermines public interest and the country’s national security.
That being stated, China’s Cryptography Law also gives details about punishment on anyone found using codes that threaten the state and its citizens.

Moreover, the law specifically states that companies in the business of providing cryptographic systems to consumers must first undergo examination and and authentication performed by the Chinese state.

China’s Cryptography Law Does not Bar Foreign Participation in China’s Cryptocurrency Industry

Enactment of the Cryptograph Law does not bar foreign users and providers of foreign encryption systems to participate in the country’s cryptocurrency industry.

However, international legal experts are wary of the conditions under which foreigh digital currency will work. The Cryptography Law allows a foreign cryptocurrency entity’s participation provided it merits the approval and certification of the state; albeit without any clear descriptions on how this condition can be met.

The condition also denotes that the Chinese government has the right to examine the underlying source code of any new digital currency technology, as a means of ensuring the protection of national security. It worries lawyers that in vetting a cryptocurrency company toward the issuance of a certification, the Chinese government will have backdoor access to the private and/or foreign entity’s cryptocurrency system.

The U.S. Securities and Exchange Commission (SEC) finally came out with an official decision to dismiss proposals for creating a Bitcoin ETF market. The rejection though does not come as a surprise to Bitcoin ETF proponents, given the complexity of how cryptocurrency exchanges work via the blockchain technology.

According to legal experts, the SEC’s main worries include the bitcoin market’s high level of potential for fraud and manipulation; whilst regarded by U.S. regulators as an investment tool that is yet too small and still immature to support.

Although Bitwise officials contended in its proposal that the need for a Bitcoin ETF arises from their research findings that 95% of crypto currency tradings are not legitimate, this reasoning did not work to support its case.

What Makes a Bitcoin ETF Different from Bitcoin?

Bitcoin may be the largest digital currency in the crypto money market but is still unregulated, despite its popularity as a digital asset that can be exchanged and traded for profit.

If recognized by the SEC as legitimately traded investment tool, the price of Bitcoin ETF will be monitored and tracked. That way, interested bitcoin investors need only to determine the current price and market performance of bitcoins, without having to own and trade bitcoins just to do so.

An SEC approved Bitcoin ETF eliminates the need to be invested in bitcoin, which comes with worries on how to best deal with the complexities of its storage and security features. Bitcoin digital money is unlike the more common types of ETFs, such as shares of stocks and/or commodities bonds, which simply have investors looking closely at a related price when venturing into buying or selling an ETF commodity as an investment asset.

In becoming a Bitcoin ETF, the cryptocurrency becomes a type of marketable security that investors can buy and trade based on current index price and performance. As such, bitcoin companies will be under SEC’s system of surveillance-sharing agreement, to which they will allow tracking and close monitoring of how the bitcoin digital money is moving in terms of buying and selling activities.

The bitcoin though flows in a largely unregulated environment; making the SEC hesitant to allow a Bitcoin ETF participating as a type of publicly traded investment tool.

Many of the UK’s elderly population are looking for ways to beef up their retirement fund while still able. The most common financial tool they have resorted to is the equity release mortgage. It is a type of loan available to older adults who are at least 55 years old or older, which allows them to take out a loan using their real property as collateral.

Overview of an Equity Release Mortgage

A loan under an equity release arrangement offers older adults the chance to borrow money that does not have to be paid off periodically and immediately. Settlement of the debt will take place at a future time; either when the senior borrower passes away or has reached a point of needing long term care in a nursing home.

The equity release scheme operates on the principle that real property appreciates in value. Therefore, the proceeds of a future sale based on the appreciated value, will more than cover the total amount due on the outstanding loan including all interests compounded through the years. The only drawback is that the lump sum payment will greatly reduce the potential value of the senior borrower’s legacy for his or her heirs.

Nonetheless, equity release mortgages in the UK are backed with a No-Negative Equity Guarantee. This feature ensures that in case the total debt exceeds the proceeds from the sale of the property, the agreement does not include a transfer of debt to the borrower’s heirs. Once the property has been sold to satisfy the borrower’s equity mortgage debt, the loan will be deemed as fully paid.

Still, to avoid equity release deals that impose unreasonable demands and conditions, it would be best for seniors to enter into this kind of agreement with the help of a professional financial adviser. The first step to take when considering to borrow money under this scheme, is to determine how much can be availed — by using an equity release calculator uk lenders use in calculating how much they can offer.

Is it Wise for Seniors to Invest in Cryptocurrency?

Often times, scrupulous individuals consider senior citizens as easy pray for their scams or illegal activities. Knowing that most retirees have some money stashed away for their golden years, scammers or swindlers often target easy-to-convince seniors.

Although cryptocurrency is receiving much attention as a lucrative form of investment, this is one type of money-making tool that retirees should not at all consider. First and foremost is the fact that the UK government is not supportive of the blockchain technology. The lack of regulatory oversight, makes the platform highly susceptible to manipulations, cyber attacks, and illegal operations.

Last year, major banks in the UK have been weeding out deposit accounts that seemingly engage in cryptocurrency trading. Banks are wary that the frequency and the amounts involved in the exchange could be indicative of money laundering activities. As a result, the crackdown on bank deposits used by cryptocurrency dealers and miners for their exchanges, involved freezing of the accounts. This was regardless of the depositors’ clean and long-standing records with the bank, and their reputation as law abiding UK subjects.

That being the case, it would be best for senior citizens not to be entangled in such transactions, lest they find their retirement money frozen for an indefinite period of time.

During the later part of June, 2019, complaints from Plus Token e-wallet users in China, South Korea and Japan about their inability to withdraw from their account, had prompted Chinese law enforcement authorities to act swiftly. Their initial investigations led to the arrest of six (6) Chinese nationals working as core team of the Plus Token mobile wallet operation.

Dovey Wan Blows the Whistle on Plus Token’s Ponzi-Like Scheme to Alert the Cryptocurrency Community

News of the arrest did not receive wide coverage, which apparently was still under investigations. However, in early July, Dovey Wan, co-founder of cryptocurrency company Primitive Ventures noticed that the Plus Token site was moving out digital money in small amounts.

The movements made use of e-wallets not registered with the company when traded with crypto exchangers Bittrex, Binance and Huobi.

Although Ms. Wan tweeted about a possible Ponzi Scheme happening at the Plus Token site, cryptocurrency exchangers were unable to identify which e-wallet to block, since there were no digital currency transactions directly related to Plus Token.

Apparently, the Plus Token scammers have taken advantage of the sophisticated blockchain system of recording transactions. In using encryptions containing public and private key codes instead of real information about traders, the blockchain system makes it difficult to immediately trace and establish the identity of persons involved in cryptocurrency transactions.

As Dovey Wan had found out and later tweeted, unidentified Plus Token operators still at large were able to transfer around 70K Bitcoin(BTC) and 800K Ethereum (ETH) early in July. Ms. Wan summed up the entire amount that Plus Token had stolen from its investors, and arrived at an overwhelming estimate of about $3.2 billion-worth of cryptocurrency. .

The major players behind the Plus Token Ponzi-scheme still has control over the stolen cryptocurrency. Since July, they have have been transferring the digital money into different crypto wallets from which they can withdraw and convert the cryptocurrency into real money.

Crypto-Analyst Firm Reports that Plus Token Scammers Used Online Mixing Services to Pre-Launder the Stolen Cryptocurrencies

A related report coming from Token Analyst, a London-based crypto-analytic firm, said that the Plus Token scammers have been using online mixing services as a means of masking the origins of their fraudulent blockchain transactions even before the scam was discovered. Doing so enabled the fraudsters to trade the stolen digital currency at legitimate exchangers since the cryptocurrency online mixers were able to mix the money in different e-wallet accounts owned by Plus Token.

That being the case, the stolen money have been laundered and made to look like legitimate funds used for conventional transactions via the blockchain platform.

Cryptocurrencies as medium of payments, investments or borrowings can only transpire by way of blockchain technology. It is important therefore to have a thorough understanding how one becomes a cryptocurrency owner in order to take part in transactions using digital currency as medium.

First off, bitcoin is only one of numerous cryptocurrencies used to transact business outside of the conventional financial institutions. Digital currencies other than bitcoin are collectively called altcoins, which is short for alternative coins. Some examples of popular altcoins are Litecoins, Ethereum, Ripple, ZCash, and Cardano; there are several more available as an alternative to bitcoin.

Secondly, cryptocurrency transactions require the use of a blockchain platform or application in order to connect to other cryptocurrency users, to third party digital currency brokers, to traders or digital currency-wallet providers.

Thirdly, there are two ways by which an individual can acquire a particular cryptocurrency. One is by buying a preferred type of digital money from a broker or from an e-wallet provider using actual cash. The other method is by earning a unit of cryptocurrency for solving every set of related cryptocurrency transactions recorded in a blockchain open ledger. Solving and linking encryptions used in the blockchain ledger is a method of confirming the validity of a transaction that made use of bitcoin or a type of altcoin as payment or exchange mode.

How Does the Blockchain Technology Record and Validate Bitcoin Transactions?

The reason why this cryptocurrency technology is called a block chain is because several digital currency transactions occurring via a blockchain platform will be linked. The purpose of which is to tell a story of how one bitcoin or altcoin user came to own his or her cryptocurrency, and of how he made use of that particular virtual money.

A block refers to the time-stamped cryptogram code used in recording each related transaction in the blockchain ledger. Every block contains the cryptogram code containing the public key generated by the blockchain platform and the private key supplied by the cryptocurrency sender or payer.

Difference Between a Blockchain Public Key and Private Key

A public key is an encryption that identifies the kind of transaction that the blockchain will record. Let us say BitUser A buys $50 worth of bitcoin from BitTrader B. The public key generated by the blockchain platform will refer to this transaction. In order to complete a block, BitTrader B as sender must provide the private key to validate his authorization for issuing the bitcoin.

A private key therefore validates a cryptocurrency user’s ownership of the digital money being transferred to another. An owner receives a private key every time he receives digital currency as part of a chain of transactions. If the private key is invalid or missing, the transaction will not go through since it remains unconfirmed or unvalidated.

In our example, bitcoin recipient BitUser A received a private key, which serves as his authority to use or transfer the digital money to another recipient. In the same way, the new recipient will also receive a private key that will allow him to transact his own virtual currency deal. Miners will then solve and link all blocks of cryptogram codes connected to the bitcoin purchased by BitUser A. Doing so provides full authentication that all virtual currency used in the series of transactions came from legitimate owners.

Develop an understanding of the importance of a financial strategy when venturing into a business. Bear in mind that going into business is not just about making profit from an innovative product or idea.

Making profit is merely the goal, while the money infused as capital to build the business is the foundation. Money is invested to acquire assets to use in selling an innovation whether as a product or as a form of service. It is therefore pertinent to have a financial strategy on how to make vested money and profit yields work toward building a sound financial condition for the business.

It is not wise to let a business run without having any business financial plan integrated as part of management processes. Simply going where the business flow takes you is a flimsy business finance strategy. Mainly because this is a hit-and-miss stance which could find your business drifting while waiting for a lucky break, or eventually veer away from what you originally perceived as your business mission.

Example of a Business Finance Strategy

We have established beforehand that the main goal of operating a business and of investing seed money into a business is to generate profit. If you are a startup venturer, it is best to keep your profit making goals in proportion to your seed capital. Avoid aiming for big profits by entering into get-rich-quick methods or by way of unfair trading practices. Such methods may work at first, but will eventually backfire on you.

A business finance strategy is incorporated as part of a business plan. In a detailed manner, the strategy specifies how cash that is available on hand will be allocated and used in running the business.

Establishment of a Working Capital Fund

An example of a business finance strategy is one that establishes a Working Capital fund. The fund must be placed in a deposit account in order to segregate money purely for operational purposes. Other liquid capital funds must be allotted for investing on a major additional asset, or for the settlement of current liabilities or long term-obligation in a planned manner.

The next strategy is to implement a system of projecting cash flows for each month, as a way of earmarking Working Capital funds. That way money collected from business operations, flowing in as additional working capital fund will only represent increments. At the end of a cash flow period, any amount exceeding the original balance of the Working Capital Fund will immediately identify the operating period as a growth month.

On the other hand, if at the end of the period the Working Capital Fund is less than the original balance, then a deficit occurred. This denotes that business operations for the month did not bring in enough cash to cover the expenditures for the period, let alone generate potential increments to the capital funds.

In such cases the Working Capital fund requires replenishment, but a review of the cash receipts, expenses and other disbursements must be performed to ensure propriety and validity of transactions that resulted to a deficit.

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