#DLT Registration Online Link

[smsidea]

[alexiarhiya]

Review Of Ninjacoin- Services That Ensure Complete Transparency And Traceability Of Collectibles

People are looking for an authentic investment platform in this fast-growing Decentralized Finance (DeFi)era. NinjaCoin is not only a safe cryptocurrency, but it also has the best-earning potential. As a result, users will be able to spend without risking their portfolio, grow alongside the platform, and participate in decision-making. Every transaction, purchase, and online expenditure made on this platform helps to expand the ecosystem.

About NinjaCoin

All of your NINJA transactions are unlinkable because NinjaCoin transactions are untraceable, completely anonymous, and encrypted information flows on a decentralized P2P network. It's a decentralized peer-to-peer exchange network and medium with no centralized management or issuer, ensuring privacy and anonymity of activities without the involvement of intermediaries or regulators. The information and exchange units of NinjaCoin are cryptographically secured (encrypted). They are protected from copying and counterfeiting by blockchain technology. NinjaCoin’s main goal is to offer a simple way to exchange money at a very low cost. They will achieve this goal through the technical development, deployment, and marketing of NinjaCoin.

Let me explain Blockchain technology to you if you are not unfamiliar with it.

Ninja in Blockchain Technology

Blockchain is referred to as Distributed ledger technology (DLT) which makes the history associated with any digital resource unalterable and clear through the use of decentralization and cryptographic hashing. An easy analogy for understanding blockchain technologies is actually a Google Doc. Once we create a new document and share it with a group of people, the document will be distributed instead of duplicated or transferred. This creates a decentralized distribution chain that will give everyone accessibility to the document at the exact same time. No one is locked out there awaiting changes through another party, while all modifications to the doc are usually being recorded within real-time, making adjustments completely transparent.

Problems faced without Ninja

When relating to companies (producers) and Consumers (end users) relationships, the end-users hardly feel like they belong, as a result of their loyalty not being rewarded and most often are not considered during decision making.

● In the event that the blockchain that has a DeFi project is flimsy, the undertaking unexpectedly acquires this unsteadiness from the host blockchain.

● Exchange is amazingly costly on the occasion of blockage.

● Savvy contract weakness is a significant cause of issues for some DeFi projects. In the event that there is the smallest defect in the code of a savvy contract, it can prompt loss of assets.

● Transactions take a long time to be confirmed

Solutions with Ninjacoin

Fast Transactions

Ninjacoin is creating blocks every 30 seconds, as opposed to every 10 minutes. Your money travels 20x faster on Ninjacoin than on Bitcoin or BitcoinCash.

Privacy

Ninjacoin has the same privacy features you'll find in Monero. Every transaction is private, by default.

Easy To Mine

Ninjacoin can be easily mined from your computer, it can also be mined by smartphones. They recommend NinjaMiner or NinjaRig Miner for PC and Webminer for Smartphone.

If you're interested in investing but can't discover any trustworthy options, consider Ninjacoin. I've had a great experience with them. Ninjacoin has created a decentralized digital one-stop-shop marketplace economy powered by blockchain and cryptocurrency that is functional and efficient. So join this platform and enjoy your crypto journey.

Visit to know more :

Website: https://ninjacoin.org

GitHub: https://github.com/NinjaCoin-Master

Twitter: https://twitter.com/ninjacoin_org

Facebook: https://www.facebook.com/Ninjacoin

Instagram: https://www.instagram.com/ninjacoin

Discord: https://discord.com/invite/KKPRwJ4

Telegram: https://t.me/ninjacoin_org

ANN: https://bitcointalk.org/index.php?topic=5137001.0

Author By:

Proof Of Registration Link : https://bitcointalk.org/index.php?topic=5341266.msg57327451#msg57327451

BitcoinTalk username : alexiarhiya

My Bitcointalk Profile Link : https://bitcointalk.org/index.php?action=profile;u=1607501

NINJA Wallet address: Ninja137GLSU16djRzYBMLZbTSevZWzs38PHAP15XU8S5f5ryj6tG6a2FKd4uWhBsd84c2Ydjnfe6g5eAMS2cZpK7XbPNv7ErGo1W

[courtneyvbrooks87]

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

The Italian House of Representatives has approved a bill defining distributed ledger technologies (DLT) such as blockchain, Cointelegraph Italy reported on Feb. 7.

With 275 votes in favor, 206 against and 27 abstentions, the bill dubbed “Semplificazioni” has moved forward. The Agenzia per l’Italia Digitale will now define the technical criteria that smart contracts will have to comply with in order to have legal validity.

Maria Laura Mantovani, a member of the Italian Parliament in the Movimento 5 Stelle party, told Cointelegraph Italy that a favorable use case for blockchain is its application in online voting.

However, Mantovani noted that there are not projects in place to implement such systems. According to her, the M5S party is currently looking for researchers able to prove the efficacy of blockchain for voting.

As Cointelegraph recently reported, the Italian bill had been already approved by the Senate on Jan. 23. This bill also establishes that digital records stored on blockchain will be considered a legal validation of documents at the time of registration.

In December last year, the Italian government published its list of 30 blockchain high-level experts to further its integration of the technology at state level.

Source link http://bit.ly/2Soq1gs

[adrianjenkins952wblr]

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

The Italian House of Representatives has approved a bill defining distributed ledger technologies (DLT) such as blockchain, Cointelegraph Italy reported on Feb. 7.

With 275 votes in favor, 206 against and 27 abstentions, the bill dubbed “Semplificazioni” has moved forward. The Agenzia per l’Italia Digitale will now define the technical criteria that smart contracts will have to comply with in order to have legal validity.

Maria Laura Mantovani, a member of the Italian Parliament in the Movimento 5 Stelle party, told Cointelegraph Italy that a favorable use case for blockchain is its application in online voting.

However, Mantovani noted that there are not projects in place to implement such systems. According to her, the M5S party is currently looking for researchers able to prove the efficacy of blockchain for voting.

As Cointelegraph recently reported, the Italian bill had been already approved by the Senate on Jan. 23. This bill also establishes that digital records stored on blockchain will be considered a legal validation of documents at the time of registration.

In December last year, the Italian government published its list of 30 blockchain high-level experts to further its integration of the technology at state level.

Source link http://bit.ly/2Soq1gs

[vanessawestwcrtr5]

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

The Italian House of Representatives has approved a bill defining distributed ledger technologies (DLT) such as blockchain, Cointelegraph Italy reported on Feb. 7.

With 275 votes in favor, 206 against and 27 abstentions, the bill dubbed “Semplificazioni” has moved forward. The Agenzia per l’Italia Digitale will now define the technical criteria that smart contracts will have to comply with in order to have legal validity.

Maria Laura Mantovani, a member of the Italian Parliament in the Movimento 5 Stelle party, told Cointelegraph Italy that a favorable use case for blockchain is its application in online voting.

However, Mantovani noted that there are not projects in place to implement such systems. According to her, the M5S party is currently looking for researchers able to prove the efficacy of blockchain for voting.

As Cointelegraph recently reported, the Italian bill had been already approved by the Senate on Jan. 23. This bill also establishes that digital records stored on blockchain will be considered a legal validation of documents at the time of registration.

In December last year, the Italian government published its list of 30 blockchain high-level experts to further its integration of the technology at state level.

Source link http://bit.ly/2Soq1gs

[teiraymondmccoy78]

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

The Italian House of Representatives has approved a bill defining distributed ledger technologies (DLT) such as blockchain, Cointelegraph Italy reported on Feb. 7.

With 275 votes in favor, 206 against and 27 abstentions, the bill dubbed “Semplificazioni” has moved forward. The Agenzia per l’Italia Digitale will now define the technical criteria that smart contracts will have to comply with in order to have legal validity.

Maria Laura Mantovani, a member of the Italian Parliament in the Movimento 5 Stelle party, told Cointelegraph Italy that a favorable use case for blockchain is its application in online voting.

However, Mantovani noted that there are not projects in place to implement such systems. According to her, the M5S party is currently looking for researchers able to prove the efficacy of blockchain for voting.

As Cointelegraph recently reported, the Italian bill had been already approved by the Senate on Jan. 23. This bill also establishes that digital records stored on blockchain will be considered a legal validation of documents at the time of registration.

In December last year, the Italian government published its list of 30 blockchain high-level experts to further its integration of the technology at state level.

Source link http://bit.ly/2Soq1gs

[mccartneynathxzw83]

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

The Italian House of Representatives has approved a bill defining distributed ledger technologies (DLT) such as blockchain, Cointelegraph Italy reported on Feb. 7.

With 275 votes in favor, 206 against and 27 abstentions, the bill dubbed “Semplificazioni” has moved forward. The Agenzia per l’Italia Digitale will now define the technical criteria that smart contracts will have to comply with in order to have legal validity.

Maria Laura Mantovani, a member of the Italian Parliament in the Movimento 5 Stelle party, told Cointelegraph Italy that a favorable use case for blockchain is its application in online voting.

However, Mantovani noted that there are not projects in place to implement such systems. According to her, the M5S party is currently looking for researchers able to prove the efficacy of blockchain for voting.

As Cointelegraph recently reported, the Italian bill had been already approved by the Senate on Jan. 23. This bill also establishes that digital records stored on blockchain will be considered a legal validation of documents at the time of registration.

In December last year, the Italian government published its list of 30 blockchain high-level experts to further its integration of the technology at state level.

Source link http://bit.ly/2Soq1gs

[bobbynolanios88]

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

Italian Parliament Approves Bill Defining Distributed Ledger Tech, Blockchain Terms

The Italian House of Representatives has approved a bill defining distributed ledger technologies (DLT) such as blockchain, Cointelegraph Italy reported on Feb. 7.

With 275 votes in favor, 206 against and 27 abstentions, the bill dubbed “Semplificazioni” has moved forward. The Agenzia per l’Italia Digitale will now define the technical criteria that smart contracts will have to comply with in order to have legal validity.

Maria Laura Mantovani, a member of the Italian Parliament in the Movimento 5 Stelle party, told Cointelegraph Italy that a favorable use case for blockchain is its application in online voting.

However, Mantovani noted that there are not projects in place to implement such systems. According to her, the M5S party is currently looking for researchers able to prove the efficacy of blockchain for voting.

As Cointelegraph recently reported, the Italian bill had been already approved by the Senate on Jan. 23. This bill also establishes that digital records stored on blockchain will be considered a legal validation of documents at the time of registration.

In December last year, the Italian government published its list of 30 blockchain high-level experts to further its integration of the technology at state level.

Source link http://bit.ly/2Soq1gs

[awesomeblockchain]

Information contained on this page is provided by an independent third-party content provider. Frankly and this Site make no warranties or representations in connection therewith. If you are affiliated with this page and would like it removed please contact to a report by Netscribes, the global Blockchain market is expected to grow at a CAGR of 42.8% from 2017 to 2022, resulting in a global revenue of USD 13.96 Billion by 2022. Blockchain technology is increasingly being used in the Banking Financial Services and Insurance (BFSI) segment for financial transactions and cross-border payments. The report indicates that the technology is also employed across a variety of sectors including healthcare, supply chain management, energy, media, informatics, etc. BFSI holds the largest share of the market, while Blockchain in the retail industry is the fastest growing sector. GreenBox Pos LLC (OTC: GRBX), Marathon Patent Group, Inc. (NASDAQ: MARA), SPI Energy Co., Ltd. (NASDAQ: SPI), Seven Stars Cloud Group, Inc. (NASDAQ: SSC), DPW Holdings, Inc. (NYSE: DPW)

Blockchain technology is still an attractive proposition to investors. Earlier this week, the Wall Street Journal reported that a software company, Block.one, raised USD 4 Billion for its EOS project from investors on the promise that the blockchain platform could change the way the internet works. "EOS is a network that allows developers to build and host applications. It is similar to Google's Android, but because it is based on the concepts behind blockchain, a software protocol designed to run on a network of linked computers, there is no central authority," the report explained.

GreenBox Pos LLC (OTCQB: GRBX) announced yesterday that, "QuickCard, the company's latest Blockchain payment and E-Wallet technology development has now passed all deployment criteria, including release criteria and compliance requirements. This robust, world class technology, is now available for most platforms, and will gradually replace existing installations of GreenBox payment technology and be the only available payment infrastructure for new clients moving forward. The company's flagship product, taking full advantage of Blockchain benefits like security, privacy, reliability and extendibility, is also the first system to offer instant settlement capabilities and an end-to-end, natively-integrated product suite. GreenBox existing and new clients have lined up to be among the first to adopt the new technology, and full-scale installations are now ongoing. The company already sees a dramatic improvement to earning quality and predictability and expects this trend to persist. GreenBox's success in securing robust commitments pipeline to deploy the new technology created opportunities in several new business verticals for the company. As a result, updated gross revenues projections reflecting that for the next 18 months have more than doubled."

Marathon Patent Group, Inc. (NASDAQ: MARA) is an IP licensing company. Following the acquisition of GBV, the combined company will focus on the development of GBV's new business involving the blockchain ecosystem and generation of digital assets. Marathon Patent Group, Inc., recently announced that the Company has amended the terms of the pending acquisition of Global Bit Ventures Inc., a digital asset technology company that mines cryptocurrencies. GBV and the Company have both entered into three-year master service agreements with BlockMaintain, Inc., an affiliate of Alchimista Inc., whereby BlockMaintain will run the day-to-day mining operations of GBV and the Company and, after the merger, will oversee all future expansion of the combined Company's mining operations. The combined 2,700 Bitmain Antminer S9 miners are expected to produce approximately 33 Ph/s of ASIC mining capacity in addition to GPU mining servers owned by GBV, comprised of 28,000 GPUs, which are capable of 630 Gh/s. Merrick Okamoto, the Company's Interim Chief Executive Officer and Executive Chairman of the Board of Directors, stated, "Today's announcement represents a substantial reduction of the price paid for GBV and 56,000,000 shares in reduced dilution to our shareholders."

SPI Energy Co., Ltd. (NASDAQ: SPI), a global provider of photovoltaic solutions for business, residential, government and utility customers and investors, recently announced the Global Bitcoin Miner Hosting. The Company operates an online energy e-commerce and investment platform in China, as well as B2B e-commerce platform offering a range of PV and storage products in Australia. SPI is committed to providing customers or organizations with safe, compliant, efficient Bitcoin mining farm hosting services with top-level hash-rate and professional maintenance in Malaysia/U.S./Canada mining farm locations. Along with the hosting service, the company launched the website globalming.com, which functioned as the introduction and work on agreements for users.

Seven Stars Cloud Group, Inc. (NASDAQ: SSC) is aiming to become a next generation Artificial - Intelligence & blockchain-powered, fintech service company, focusing on digital asset production and distribution. The Company recently announced a Joint Venture with The Centre for Digital Revolution. The JV will establish and develop the premier global standards of issuance, sales and distribution of digital assets, with operations out of the U.K. and mainland Europe. The JV will operate within, and be one component of, the previously announced NextGen X Sales, IEO and Trading Network. In addition, the Company again notes that SSC will be changing the name of NextGen X to GenXPlus, moving forward. Mr. Eric van der Kleij, the CEO of the Centre for Digital Revolution, said, "Over the last 10 years, the rapid development of Blockchain/DLT and Artificial Intelligence has seen an ocean of startups and corporations experimenting and conducting pilots to understand the potential of this breakthrough technology. This year marks the moment when the world's major financial institutions begin the serious adoption of these technologies, and the adoption of professionally created tokenized digital assets."

DPW Holdings, Inc. (NYSE: DPW) is a diversified holding company with a growth strategy of acquiring undervalued assets, disruptive technologies, sustainable solutions, and exciting ventures for incubation and development to their full potential for long-term growth and investor returns. The Company recently announced that it has used Bitcoin, the cryptocurrency its subsidiary Super Crypto Mining, Inc., or SCM, has mined through its operations, to reduce the Company's debt, marking a milestone for the Company and possibly the use of Bitcoin on a commercial basis. SCM actively mines the cryptocurrency, Bitcoin, and, since late 2017 has held its inventory of Bitcoin as one of its long term operational and investment strategies. "We believe this transaction of reducing the debt incurred from the purchase of Enertec with the cryptocurrency we have mined validates Bitcoin's value as a commodity and the use of cryptocurrencies as an alternative to fiat currency. DPW will expand its cryptocurrency mining operations as well as explore other paths to further advance the use of Bitcoin," said Milton "Todd" Ault, III, the Company's CEO and Chairman.

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[mccartneynathxzw83]

Blockchain Week in Review – February 2019 | Perkins Coie

Blockchain Week in Review – February 2019 | Perkins Coie

U.S. Developments

Kik Publicizes Response to Possible SEC Enforcement

On January 27, the Wall Street Journal published an article describing the impending legal battle over cryptocurrency Kin and its 2017 ICO. That same day, Ted Livingston, the founder and CEO of Canadian company Kik Interactive (Kik) and the developer behind Kin, published the Wells Notice he received from the Securities and Exchange Commission (SEC) on November 16, 2018, as well as Kik’s response.

By way of procedural background, a “Wells Notice” is a communication of a preliminary determination by the SEC Enforcement Staff to recommend an enforcement action or administrative proceeding against the recipient.  The Wells Notice generally identifies the possible charges to be made against the recipient.  The recommendation is made to the SEC Commissioners, who determine whether to accept or reject the Enforcement Staff’s recommendation.  For the most part, the SEC almost always provides proposed defendants and respondents the opportunity to submit a written response to the allegations contained in the Wells Notice, although not technically required to do so.  In addition to filing a response, a recipient of a Wells Notice may request access to parts of the SEC’s investigative file, as well as meetings with the SEC Staff to discuss the enforcement action recommendation.

At issue here is Kin’s 2017 ICO, in which roughly $100 million of Kin was sold. Kin is a cryptocurrency native to the Kik app and built on Ethereum to the ERC-20 standard. The SEC’s Wells Notice warned Kik that the SEC would allege that the Kin ICO violated Sections 5(a) and 5(c) of the Securities Act of 1934 (issuing non-exempt securities without SEC registration).

On December 10, 2018, Kik responded to the Wells Notice by making three arguments against enforcement. First, Kik argued that Kin is a “currency” and therefore cannot, by definition, be a security under the federal securities laws. Second, Kik argued that the token pre-sale and public distribution were not “investment contracts.” Third, Kik argued that public policy advises against enforcement because Kik attempted to comply with current guidance and because an enforcement action would amount to “regulation by enforcement.”

In a post on Medium, Ted Livingston wrote: “This situation is not unique to Kik. There are dozens of projects at a similar point with the SEC. We all believe that this industry needs regulation, but we also believe that this is not the way to get it.”

To date, the SEC has not concluded whether to accept the Enforcement Staff’s recommendation.  Stay tuned as this action unfolds.

Please click here for the Kik Interactive Wells Notice and Wells Submission.

ISDA Guidelines for Smart Derivatives Contracts

The International Swaps and Derivatives Association (ISDA) has published the first in a series of guidelines for smart derivative contracts. This series of papers is intended to “provide high-level guidance on the legal documentation and framework that currently governs derivatives trading, and to point out certain issues that may need to be considered by technology developers when introducing technology into that framework.”

The introductory ISDA guidance, published on January 30, discusses what smart derivative contracts are, the legal complexities inherent in such arrangements, principles and models for smart derivative contracts, and considerations for technology developers.

According to the ISDA, derivatives provide a clear use case for smart contracts, as derivative payment and delivery is largely dependent on conditional logic. However, derivatives transactions create a web of legal complexities that a smart contract would need to accommodate. The ISDA guidelines articulate several principles to guide development of derivative smart contracts, including compatibility with existing standards and required legal validation.

Please click here for the guidelines.

House Passes Bills to Study Cryptocurrency’s Link to Crime

The U.S. House of Representatives passed a bill on January 28—H.R. 502, named the “Fight Illicit Networks and Detect (FIND) Trafficking Act of 2019”—that would require the Comptroller General of the United States to investigate how cryptocurrencies and online marketplaces enable sex and drug trafficking. The result of such a study would be regulatory and legislative recommendations to impede such illicit uses of cryptocurrencies.

In a press release, Representative Juan Vargas noted, “While evidence points to the growth of virtual currencies as a payment method for illicit sex and drug trafficking, the true scope of the problem and potential solutions are still unknown.”

This type of research-related bill dovetails with another bill in the House—H.R. 56, named the “Financial Technology Protection Act”—which would establish “the Independent Financial Technology Task Force to Combat Terrorism and Illicit Financing, which must research terrorist and illicit use of new financial technologies and issue an annual report.” This bill was passed by the House by a voice vote on January 28.

Industry Developments

SWIFT Announces Blockchain Project with R3

SWIFT, the global financial messaging service, announced on January 30 that it was partnering with R3, a blockchain startup aimed at bridging the gap between blockchain and the banking industry, to launch a proof-of-concept project. The project, called gpi Link, will utilize the blockchain platform Corda to allow institutions to authorize and settle payments through banks and receive credit confirmations on distributed ledger technology. SWIFT’s announcement for gpi Link claims that 50% of SWIFT gpi payments are credited within 30 minutes.

The gpi Link project will initially focus on utilizing R3’s distributed ledger technology. However, the hope is that it will expand to support other blockchain and non-blockchain environments in the future. SWIFT’s chief market officer noted that “[w]hile DLT-enabled trade is taking off, there is still little appetite for settlement in crypto-currencies and a pressing need for fast and safe settlement in fiat currencies.” The results of SWIFT’s trial will be presented at Sibos—a banking and finance conference—in September 2019.

Please click here for the SWIFT press release.

International Developments

QuadrigaCX Applies for Creditor Protection

Canadian cryptocurrency exchange QuadrigaCX filed for creditor protection with the Nova Scotia Supreme Court on January 31. According to a statement on the company’s website: “For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful.”

According to CoinDesk’s review of QuadrigaCX’s court filings, the exchange owes customers roughly $190 million. Much of its cryptocurrency holdings are in cold storage, meaning the tokens’ private keys are stored offline for greater protection. QuadrigaCX’s founder Gerald Cotton controlled the company’s cold storage. Unfortunately, Cotton passed away in India in December 2018, which means access to the stored tokens is uncertain.

Saudi Arabia and UAE “Aber” Project

On January 29, the Saudi Arabian Monetary Authority (SAMA) and the United Arab Emirates Central Bank (UAECB) issued a joint statement about launching Aber, a blockchain technology for financial settlements between the two countries. The hope is that digital currency technology will support the development of international remittances. Both countries are also interested in learning if distributed ledger technology can be used as “an additional reserve system” for domestic payment settlement in case of systematic disruption. The initial steps toward this project were taken in December 2017, when the UAE Central Bank governor, Mubarak Rashed Al Mansouri, first announced that Saudi Arabia and the UAE were discussing developing a cryptocurrency for cross-border transactions.

Iranian Draft Cryptocurrency Regulations

According to Al Jazeera, the Central Bank of Iran has released early drafts of cryptocurrency regulations. This release coincides with the Electronic Banking and Payment Systems conference being held in Tehran. The draft regulations would recognize cryptocurrencies and authorize initial coin offerings. However, the regulations would restrict the use of cryptocurrencies (other than a state-backed cryptocurrency launched by Iran’s Central Bank) as a method for payment within Iran, as well as require special licenses and certifications for banks and trading platforms within Iran handling cryptocurrencies. According to an official statement (link in Persian) from the Governor of the Central Bank of Iran, Abdolnaser Hemmati, regulations will not be finalized until there is adequate input from technology experts in the field.

This is a change in outlook from April 2018, when the Central Bank of Iran banned Iranian banks and credit institutions from dealing in cryptocurrencies. Additionally, in November 2018, the U.S. Department of Treasury’s Office of Foreign Asset Control (OFAC) took action against two Iranian citizens and their Bitcoin wallets, citing their use in the SamSam ransomware scheme. This was the first time OFAC included digital currency addresses in its Specially Designated Nationals and Blocked Persons List. You can read more about the OFAC actions here.

South Korea Continues Ban on ICOs

South Korea’s Financial Services Commission (FSC) will continue its 2017 ban on raising money through virtual currencies, including ICOs. In a January 30 press release, the FSC discussed the results of a survey sent out to 22 companies. The takeaways from the survey include the following: (i) investments in ICOs are still very risky, and poor returns for ICO purchasers is a cause for concern; (ii) companies outside of South Korea are conducting ICOs in more favorable jurisdictions and raising funds from domestic Korean investors; and (iii) there is still a lack of uniform data and information for investors to digest before making ICO investment decisions.

Because of these issues, the ban on ICOs in South Korea will continue. However, the FSC’s press release also discussed plans by the Korean government to research and foster regulated blockchain initiatives. These include pilot projects, tax credits for research and development costs, and training initiatives.

Please click here for the press release.

[View source.]

Source link http://bit.ly/2DiohuW

[courtneyvbrooks87]

Blockchain Week in Review – February 2019 | Perkins Coie

Blockchain Week in Review – February 2019 | Perkins Coie

U.S. Developments

Kik Publicizes Response to Possible SEC Enforcement

On January 27, the Wall Street Journal published an article describing the impending legal battle over cryptocurrency Kin and its 2017 ICO. That same day, Ted Livingston, the founder and CEO of Canadian company Kik Interactive (Kik) and the developer behind Kin, published the Wells Notice he received from the Securities and Exchange Commission (SEC) on November 16, 2018, as well as Kik’s response.

By way of procedural background, a “Wells Notice” is a communication of a preliminary determination by the SEC Enforcement Staff to recommend an enforcement action or administrative proceeding against the recipient.  The Wells Notice generally identifies the possible charges to be made against the recipient.  The recommendation is made to the SEC Commissioners, who determine whether to accept or reject the Enforcement Staff’s recommendation.  For the most part, the SEC almost always provides proposed defendants and respondents the opportunity to submit a written response to the allegations contained in the Wells Notice, although not technically required to do so.  In addition to filing a response, a recipient of a Wells Notice may request access to parts of the SEC’s investigative file, as well as meetings with the SEC Staff to discuss the enforcement action recommendation.

At issue here is Kin’s 2017 ICO, in which roughly $100 million of Kin was sold. Kin is a cryptocurrency native to the Kik app and built on Ethereum to the ERC-20 standard. The SEC’s Wells Notice warned Kik that the SEC would allege that the Kin ICO violated Sections 5(a) and 5(c) of the Securities Act of 1934 (issuing non-exempt securities without SEC registration).

On December 10, 2018, Kik responded to the Wells Notice by making three arguments against enforcement. First, Kik argued that Kin is a “currency” and therefore cannot, by definition, be a security under the federal securities laws. Second, Kik argued that the token pre-sale and public distribution were not “investment contracts.” Third, Kik argued that public policy advises against enforcement because Kik attempted to comply with current guidance and because an enforcement action would amount to “regulation by enforcement.”

In a post on Medium, Ted Livingston wrote: “This situation is not unique to Kik. There are dozens of projects at a similar point with the SEC. We all believe that this industry needs regulation, but we also believe that this is not the way to get it.”

To date, the SEC has not concluded whether to accept the Enforcement Staff’s recommendation.  Stay tuned as this action unfolds.

Please click here for the Kik Interactive Wells Notice and Wells Submission.

ISDA Guidelines for Smart Derivatives Contracts

The International Swaps and Derivatives Association (ISDA) has published the first in a series of guidelines for smart derivative contracts. This series of papers is intended to “provide high-level guidance on the legal documentation and framework that currently governs derivatives trading, and to point out certain issues that may need to be considered by technology developers when introducing technology into that framework.”

The introductory ISDA guidance, published on January 30, discusses what smart derivative contracts are, the legal complexities inherent in such arrangements, principles and models for smart derivative contracts, and considerations for technology developers.

According to the ISDA, derivatives provide a clear use case for smart contracts, as derivative payment and delivery is largely dependent on conditional logic. However, derivatives transactions create a web of legal complexities that a smart contract would need to accommodate. The ISDA guidelines articulate several principles to guide development of derivative smart contracts, including compatibility with existing standards and required legal validation.

Please click here for the guidelines.

House Passes Bills to Study Cryptocurrency’s Link to Crime

The U.S. House of Representatives passed a bill on January 28—H.R. 502, named the “Fight Illicit Networks and Detect (FIND) Trafficking Act of 2019”—that would require the Comptroller General of the United States to investigate how cryptocurrencies and online marketplaces enable sex and drug trafficking. The result of such a study would be regulatory and legislative recommendations to impede such illicit uses of cryptocurrencies.

In a press release, Representative Juan Vargas noted, “While evidence points to the growth of virtual currencies as a payment method for illicit sex and drug trafficking, the true scope of the problem and potential solutions are still unknown.”

This type of research-related bill dovetails with another bill in the House—H.R. 56, named the “Financial Technology Protection Act”—which would establish “the Independent Financial Technology Task Force to Combat Terrorism and Illicit Financing, which must research terrorist and illicit use of new financial technologies and issue an annual report.” This bill was passed by the House by a voice vote on January 28.

Industry Developments

SWIFT Announces Blockchain Project with R3

SWIFT, the global financial messaging service, announced on January 30 that it was partnering with R3, a blockchain startup aimed at bridging the gap between blockchain and the banking industry, to launch a proof-of-concept project. The project, called gpi Link, will utilize the blockchain platform Corda to allow institutions to authorize and settle payments through banks and receive credit confirmations on distributed ledger technology. SWIFT’s announcement for gpi Link claims that 50% of SWIFT gpi payments are credited within 30 minutes.

The gpi Link project will initially focus on utilizing R3’s distributed ledger technology. However, the hope is that it will expand to support other blockchain and non-blockchain environments in the future. SWIFT’s chief market officer noted that “[w]hile DLT-enabled trade is taking off, there is still little appetite for settlement in crypto-currencies and a pressing need for fast and safe settlement in fiat currencies.” The results of SWIFT’s trial will be presented at Sibos—a banking and finance conference—in September 2019.

Please click here for the SWIFT press release.

International Developments

QuadrigaCX Applies for Creditor Protection

Canadian cryptocurrency exchange QuadrigaCX filed for creditor protection with the Nova Scotia Supreme Court on January 31. According to a statement on the company’s website: “For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful.”

According to CoinDesk’s review of QuadrigaCX’s court filings, the exchange owes customers roughly $190 million. Much of its cryptocurrency holdings are in cold storage, meaning the tokens’ private keys are stored offline for greater protection. QuadrigaCX’s founder Gerald Cotton controlled the company’s cold storage. Unfortunately, Cotton passed away in India in December 2018, which means access to the stored tokens is uncertain.

Saudi Arabia and UAE “Aber” Project

On January 29, the Saudi Arabian Monetary Authority (SAMA) and the United Arab Emirates Central Bank (UAECB) issued a joint statement about launching Aber, a blockchain technology for financial settlements between the two countries. The hope is that digital currency technology will support the development of international remittances. Both countries are also interested in learning if distributed ledger technology can be used as “an additional reserve system” for domestic payment settlement in case of systematic disruption. The initial steps toward this project were taken in December 2017, when the UAE Central Bank governor, Mubarak Rashed Al Mansouri, first announced that Saudi Arabia and the UAE were discussing developing a cryptocurrency for cross-border transactions.

Iranian Draft Cryptocurrency Regulations

According to Al Jazeera, the Central Bank of Iran has released early drafts of cryptocurrency regulations. This release coincides with the Electronic Banking and Payment Systems conference being held in Tehran. The draft regulations would recognize cryptocurrencies and authorize initial coin offerings. However, the regulations would restrict the use of cryptocurrencies (other than a state-backed cryptocurrency launched by Iran’s Central Bank) as a method for payment within Iran, as well as require special licenses and certifications for banks and trading platforms within Iran handling cryptocurrencies. According to an official statement (link in Persian) from the Governor of the Central Bank of Iran, Abdolnaser Hemmati, regulations will not be finalized until there is adequate input from technology experts in the field.

This is a change in outlook from April 2018, when the Central Bank of Iran banned Iranian banks and credit institutions from dealing in cryptocurrencies. Additionally, in November 2018, the U.S. Department of Treasury’s Office of Foreign Asset Control (OFAC) took action against two Iranian citizens and their Bitcoin wallets, citing their use in the SamSam ransomware scheme. This was the first time OFAC included digital currency addresses in its Specially Designated Nationals and Blocked Persons List. You can read more about the OFAC actions here.

South Korea Continues Ban on ICOs

South Korea’s Financial Services Commission (FSC) will continue its 2017 ban on raising money through virtual currencies, including ICOs. In a January 30 press release, the FSC discussed the results of a survey sent out to 22 companies. The takeaways from the survey include the following: (i) investments in ICOs are still very risky, and poor returns for ICO purchasers is a cause for concern; (ii) companies outside of South Korea are conducting ICOs in more favorable jurisdictions and raising funds from domestic Korean investors; and (iii) there is still a lack of uniform data and information for investors to digest before making ICO investment decisions.

Because of these issues, the ban on ICOs in South Korea will continue. However, the FSC’s press release also discussed plans by the Korean government to research and foster regulated blockchain initiatives. These include pilot projects, tax credits for research and development costs, and training initiatives.

Please click here for the press release.

[View source.]

Source link http://bit.ly/2DiohuW

[adrianjenkins952wblr]

Blockchain Week in Review – February 2019 | Perkins Coie

Blockchain Week in Review – February 2019 | Perkins Coie

U.S. Developments

Kik Publicizes Response to Possible SEC Enforcement

On January 27, the Wall Street Journal published an article describing the impending legal battle over cryptocurrency Kin and its 2017 ICO. That same day, Ted Livingston, the founder and CEO of Canadian company Kik Interactive (Kik) and the developer behind Kin, published the Wells Notice he received from the Securities and Exchange Commission (SEC) on November 16, 2018, as well as Kik’s response.

By way of procedural background, a “Wells Notice” is a communication of a preliminary determination by the SEC Enforcement Staff to recommend an enforcement action or administrative proceeding against the recipient.  The Wells Notice generally identifies the possible charges to be made against the recipient.  The recommendation is made to the SEC Commissioners, who determine whether to accept or reject the Enforcement Staff’s recommendation.  For the most part, the SEC almost always provides proposed defendants and respondents the opportunity to submit a written response to the allegations contained in the Wells Notice, although not technically required to do so.  In addition to filing a response, a recipient of a Wells Notice may request access to parts of the SEC’s investigative file, as well as meetings with the SEC Staff to discuss the enforcement action recommendation.

At issue here is Kin’s 2017 ICO, in which roughly $100 million of Kin was sold. Kin is a cryptocurrency native to the Kik app and built on Ethereum to the ERC-20 standard. The SEC’s Wells Notice warned Kik that the SEC would allege that the Kin ICO violated Sections 5(a) and 5(c) of the Securities Act of 1934 (issuing non-exempt securities without SEC registration).

On December 10, 2018, Kik responded to the Wells Notice by making three arguments against enforcement. First, Kik argued that Kin is a “currency” and therefore cannot, by definition, be a security under the federal securities laws. Second, Kik argued that the token pre-sale and public distribution were not “investment contracts.” Third, Kik argued that public policy advises against enforcement because Kik attempted to comply with current guidance and because an enforcement action would amount to “regulation by enforcement.”

In a post on Medium, Ted Livingston wrote: “This situation is not unique to Kik. There are dozens of projects at a similar point with the SEC. We all believe that this industry needs regulation, but we also believe that this is not the way to get it.”

To date, the SEC has not concluded whether to accept the Enforcement Staff’s recommendation.  Stay tuned as this action unfolds.

Please click here for the Kik Interactive Wells Notice and Wells Submission.

ISDA Guidelines for Smart Derivatives Contracts

The International Swaps and Derivatives Association (ISDA) has published the first in a series of guidelines for smart derivative contracts. This series of papers is intended to “provide high-level guidance on the legal documentation and framework that currently governs derivatives trading, and to point out certain issues that may need to be considered by technology developers when introducing technology into that framework.”

The introductory ISDA guidance, published on January 30, discusses what smart derivative contracts are, the legal complexities inherent in such arrangements, principles and models for smart derivative contracts, and considerations for technology developers.

According to the ISDA, derivatives provide a clear use case for smart contracts, as derivative payment and delivery is largely dependent on conditional logic. However, derivatives transactions create a web of legal complexities that a smart contract would need to accommodate. The ISDA guidelines articulate several principles to guide development of derivative smart contracts, including compatibility with existing standards and required legal validation.

Please click here for the guidelines.

House Passes Bills to Study Cryptocurrency’s Link to Crime

The U.S. House of Representatives passed a bill on January 28—H.R. 502, named the “Fight Illicit Networks and Detect (FIND) Trafficking Act of 2019”—that would require the Comptroller General of the United States to investigate how cryptocurrencies and online marketplaces enable sex and drug trafficking. The result of such a study would be regulatory and legislative recommendations to impede such illicit uses of cryptocurrencies.

In a press release, Representative Juan Vargas noted, “While evidence points to the growth of virtual currencies as a payment method for illicit sex and drug trafficking, the true scope of the problem and potential solutions are still unknown.”

This type of research-related bill dovetails with another bill in the House—H.R. 56, named the “Financial Technology Protection Act”—which would establish “the Independent Financial Technology Task Force to Combat Terrorism and Illicit Financing, which must research terrorist and illicit use of new financial technologies and issue an annual report.” This bill was passed by the House by a voice vote on January 28.

Industry Developments

SWIFT Announces Blockchain Project with R3

SWIFT, the global financial messaging service, announced on January 30 that it was partnering with R3, a blockchain startup aimed at bridging the gap between blockchain and the banking industry, to launch a proof-of-concept project. The project, called gpi Link, will utilize the blockchain platform Corda to allow institutions to authorize and settle payments through banks and receive credit confirmations on distributed ledger technology. SWIFT’s announcement for gpi Link claims that 50% of SWIFT gpi payments are credited within 30 minutes.

The gpi Link project will initially focus on utilizing R3’s distributed ledger technology. However, the hope is that it will expand to support other blockchain and non-blockchain environments in the future. SWIFT’s chief market officer noted that “[w]hile DLT-enabled trade is taking off, there is still little appetite for settlement in crypto-currencies and a pressing need for fast and safe settlement in fiat currencies.” The results of SWIFT’s trial will be presented at Sibos—a banking and finance conference—in September 2019.

Please click here for the SWIFT press release.

International Developments

QuadrigaCX Applies for Creditor Protection

Canadian cryptocurrency exchange QuadrigaCX filed for creditor protection with the Nova Scotia Supreme Court on January 31. According to a statement on the company’s website: “For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful.”

According to CoinDesk’s review of QuadrigaCX’s court filings, the exchange owes customers roughly $190 million. Much of its cryptocurrency holdings are in cold storage, meaning the tokens’ private keys are stored offline for greater protection. QuadrigaCX’s founder Gerald Cotton controlled the company’s cold storage. Unfortunately, Cotton passed away in India in December 2018, which means access to the stored tokens is uncertain.

Saudi Arabia and UAE “Aber” Project

On January 29, the Saudi Arabian Monetary Authority (SAMA) and the United Arab Emirates Central Bank (UAECB) issued a joint statement about launching Aber, a blockchain technology for financial settlements between the two countries. The hope is that digital currency technology will support the development of international remittances. Both countries are also interested in learning if distributed ledger technology can be used as “an additional reserve system” for domestic payment settlement in case of systematic disruption. The initial steps toward this project were taken in December 2017, when the UAE Central Bank governor, Mubarak Rashed Al Mansouri, first announced that Saudi Arabia and the UAE were discussing developing a cryptocurrency for cross-border transactions.

Iranian Draft Cryptocurrency Regulations

According to Al Jazeera, the Central Bank of Iran has released early drafts of cryptocurrency regulations. This release coincides with the Electronic Banking and Payment Systems conference being held in Tehran. The draft regulations would recognize cryptocurrencies and authorize initial coin offerings. However, the regulations would restrict the use of cryptocurrencies (other than a state-backed cryptocurrency launched by Iran’s Central Bank) as a method for payment within Iran, as well as require special licenses and certifications for banks and trading platforms within Iran handling cryptocurrencies. According to an official statement (link in Persian) from the Governor of the Central Bank of Iran, Abdolnaser Hemmati, regulations will not be finalized until there is adequate input from technology experts in the field.

This is a change in outlook from April 2018, when the Central Bank of Iran banned Iranian banks and credit institutions from dealing in cryptocurrencies. Additionally, in November 2018, the U.S. Department of Treasury’s Office of Foreign Asset Control (OFAC) took action against two Iranian citizens and their Bitcoin wallets, citing their use in the SamSam ransomware scheme. This was the first time OFAC included digital currency addresses in its Specially Designated Nationals and Blocked Persons List. You can read more about the OFAC actions here.

South Korea Continues Ban on ICOs

South Korea’s Financial Services Commission (FSC) will continue its 2017 ban on raising money through virtual currencies, including ICOs. In a January 30 press release, the FSC discussed the results of a survey sent out to 22 companies. The takeaways from the survey include the following: (i) investments in ICOs are still very risky, and poor returns for ICO purchasers is a cause for concern; (ii) companies outside of South Korea are conducting ICOs in more favorable jurisdictions and raising funds from domestic Korean investors; and (iii) there is still a lack of uniform data and information for investors to digest before making ICO investment decisions.

Because of these issues, the ban on ICOs in South Korea will continue. However, the FSC’s press release also discussed plans by the Korean government to research and foster regulated blockchain initiatives. These include pilot projects, tax credits for research and development costs, and training initiatives.

Please click here for the press release.

[View source.]

Source link http://bit.ly/2DiohuW

[bobbynolanios88]

Blockchain Week in Review – February 2019 | Perkins Coie

Blockchain Week in Review – February 2019 | Perkins Coie

U.S. Developments

Kik Publicizes Response to Possible SEC Enforcement

On January 27, the Wall Street Journal published an article describing the impending legal battle over cryptocurrency Kin and its 2017 ICO. That same day, Ted Livingston, the founder and CEO of Canadian company Kik Interactive (Kik) and the developer behind Kin, published the Wells Notice he received from the Securities and Exchange Commission (SEC) on November 16, 2018, as well as Kik’s response.

By way of procedural background, a “Wells Notice” is a communication of a preliminary determination by the SEC Enforcement Staff to recommend an enforcement action or administrative proceeding against the recipient.  The Wells Notice generally identifies the possible charges to be made against the recipient.  The recommendation is made to the SEC Commissioners, who determine whether to accept or reject the Enforcement Staff’s recommendation.  For the most part, the SEC almost always provides proposed defendants and respondents the opportunity to submit a written response to the allegations contained in the Wells Notice, although not technically required to do so.  In addition to filing a response, a recipient of a Wells Notice may request access to parts of the SEC’s investigative file, as well as meetings with the SEC Staff to discuss the enforcement action recommendation.

At issue here is Kin’s 2017 ICO, in which roughly $100 million of Kin was sold. Kin is a cryptocurrency native to the Kik app and built on Ethereum to the ERC-20 standard. The SEC’s Wells Notice warned Kik that the SEC would allege that the Kin ICO violated Sections 5(a) and 5(c) of the Securities Act of 1934 (issuing non-exempt securities without SEC registration).

On December 10, 2018, Kik responded to the Wells Notice by making three arguments against enforcement. First, Kik argued that Kin is a “currency” and therefore cannot, by definition, be a security under the federal securities laws. Second, Kik argued that the token pre-sale and public distribution were not “investment contracts.” Third, Kik argued that public policy advises against enforcement because Kik attempted to comply with current guidance and because an enforcement action would amount to “regulation by enforcement.”

In a post on Medium, Ted Livingston wrote: “This situation is not unique to Kik. There are dozens of projects at a similar point with the SEC. We all believe that this industry needs regulation, but we also believe that this is not the way to get it.”

To date, the SEC has not concluded whether to accept the Enforcement Staff’s recommendation.  Stay tuned as this action unfolds.

Please click here for the Kik Interactive Wells Notice and Wells Submission.

ISDA Guidelines for Smart Derivatives Contracts

The International Swaps and Derivatives Association (ISDA) has published the first in a series of guidelines for smart derivative contracts. This series of papers is intended to “provide high-level guidance on the legal documentation and framework that currently governs derivatives trading, and to point out certain issues that may need to be considered by technology developers when introducing technology into that framework.”

The introductory ISDA guidance, published on January 30, discusses what smart derivative contracts are, the legal complexities inherent in such arrangements, principles and models for smart derivative contracts, and considerations for technology developers.

According to the ISDA, derivatives provide a clear use case for smart contracts, as derivative payment and delivery is largely dependent on conditional logic. However, derivatives transactions create a web of legal complexities that a smart contract would need to accommodate. The ISDA guidelines articulate several principles to guide development of derivative smart contracts, including compatibility with existing standards and required legal validation.

Please click here for the guidelines.

House Passes Bills to Study Cryptocurrency’s Link to Crime

The U.S. House of Representatives passed a bill on January 28—H.R. 502, named the “Fight Illicit Networks and Detect (FIND) Trafficking Act of 2019”—that would require the Comptroller General of the United States to investigate how cryptocurrencies and online marketplaces enable sex and drug trafficking. The result of such a study would be regulatory and legislative recommendations to impede such illicit uses of cryptocurrencies.

In a press release, Representative Juan Vargas noted, “While evidence points to the growth of virtual currencies as a payment method for illicit sex and drug trafficking, the true scope of the problem and potential solutions are still unknown.”

This type of research-related bill dovetails with another bill in the House—H.R. 56, named the “Financial Technology Protection Act”—which would establish “the Independent Financial Technology Task Force to Combat Terrorism and Illicit Financing, which must research terrorist and illicit use of new financial technologies and issue an annual report.” This bill was passed by the House by a voice vote on January 28.

Industry Developments

SWIFT Announces Blockchain Project with R3

SWIFT, the global financial messaging service, announced on January 30 that it was partnering with R3, a blockchain startup aimed at bridging the gap between blockchain and the banking industry, to launch a proof-of-concept project. The project, called gpi Link, will utilize the blockchain platform Corda to allow institutions to authorize and settle payments through banks and receive credit confirmations on distributed ledger technology. SWIFT’s announcement for gpi Link claims that 50% of SWIFT gpi payments are credited within 30 minutes.

The gpi Link project will initially focus on utilizing R3’s distributed ledger technology. However, the hope is that it will expand to support other blockchain and non-blockchain environments in the future. SWIFT’s chief market officer noted that “[w]hile DLT-enabled trade is taking off, there is still little appetite for settlement in crypto-currencies and a pressing need for fast and safe settlement in fiat currencies.” The results of SWIFT’s trial will be presented at Sibos—a banking and finance conference—in September 2019.

Please click here for the SWIFT press release.

International Developments

QuadrigaCX Applies for Creditor Protection

Canadian cryptocurrency exchange QuadrigaCX filed for creditor protection with the Nova Scotia Supreme Court on January 31. According to a statement on the company’s website: “For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful.”

According to CoinDesk’s review of QuadrigaCX’s court filings, the exchange owes customers roughly $190 million. Much of its cryptocurrency holdings are in cold storage, meaning the tokens’ private keys are stored offline for greater protection. QuadrigaCX’s founder Gerald Cotton controlled the company’s cold storage. Unfortunately, Cotton passed away in India in December 2018, which means access to the stored tokens is uncertain.

Saudi Arabia and UAE “Aber” Project

On January 29, the Saudi Arabian Monetary Authority (SAMA) and the United Arab Emirates Central Bank (UAECB) issued a joint statement about launching Aber, a blockchain technology for financial settlements between the two countries. The hope is that digital currency technology will support the development of international remittances. Both countries are also interested in learning if distributed ledger technology can be used as “an additional reserve system” for domestic payment settlement in case of systematic disruption. The initial steps toward this project were taken in December 2017, when the UAE Central Bank governor, Mubarak Rashed Al Mansouri, first announced that Saudi Arabia and the UAE were discussing developing a cryptocurrency for cross-border transactions.

Iranian Draft Cryptocurrency Regulations

According to Al Jazeera, the Central Bank of Iran has released early drafts of cryptocurrency regulations. This release coincides with the Electronic Banking and Payment Systems conference being held in Tehran. The draft regulations would recognize cryptocurrencies and authorize initial coin offerings. However, the regulations would restrict the use of cryptocurrencies (other than a state-backed cryptocurrency launched by Iran’s Central Bank) as a method for payment within Iran, as well as require special licenses and certifications for banks and trading platforms within Iran handling cryptocurrencies. According to an official statement (link in Persian) from the Governor of the Central Bank of Iran, Abdolnaser Hemmati, regulations will not be finalized until there is adequate input from technology experts in the field.

This is a change in outlook from April 2018, when the Central Bank of Iran banned Iranian banks and credit institutions from dealing in cryptocurrencies. Additionally, in November 2018, the U.S. Department of Treasury’s Office of Foreign Asset Control (OFAC) took action against two Iranian citizens and their Bitcoin wallets, citing their use in the SamSam ransomware scheme. This was the first time OFAC included digital currency addresses in its Specially Designated Nationals and Blocked Persons List. You can read more about the OFAC actions here.

South Korea Continues Ban on ICOs

South Korea’s Financial Services Commission (FSC) will continue its 2017 ban on raising money through virtual currencies, including ICOs. In a January 30 press release, the FSC discussed the results of a survey sent out to 22 companies. The takeaways from the survey include the following: (i) investments in ICOs are still very risky, and poor returns for ICO purchasers is a cause for concern; (ii) companies outside of South Korea are conducting ICOs in more favorable jurisdictions and raising funds from domestic Korean investors; and (iii) there is still a lack of uniform data and information for investors to digest before making ICO investment decisions.

Because of these issues, the ban on ICOs in South Korea will continue. However, the FSC’s press release also discussed plans by the Korean government to research and foster regulated blockchain initiatives. These include pilot projects, tax credits for research and development costs, and training initiatives.

Please click here for the press release.

[View source.]

Source link http://bit.ly/2DiohuW

[vanessawestwcrtr5]

Blockchain Week in Review – February 2019 | Perkins Coie

Blockchain Week in Review – February 2019 | Perkins Coie

U.S. Developments

Kik Publicizes Response to Possible SEC Enforcement

On January 27, the Wall Street Journal published an article describing the impending legal battle over cryptocurrency Kin and its 2017 ICO. That same day, Ted Livingston, the founder and CEO of Canadian company Kik Interactive (Kik) and the developer behind Kin, published the Wells Notice he received from the Securities and Exchange Commission (SEC) on November 16, 2018, as well as Kik’s response.

By way of procedural background, a “Wells Notice” is a communication of a preliminary determination by the SEC Enforcement Staff to recommend an enforcement action or administrative proceeding against the recipient.  The Wells Notice generally identifies the possible charges to be made against the recipient.  The recommendation is made to the SEC Commissioners, who determine whether to accept or reject the Enforcement Staff’s recommendation.  For the most part, the SEC almost always provides proposed defendants and respondents the opportunity to submit a written response to the allegations contained in the Wells Notice, although not technically required to do so.  In addition to filing a response, a recipient of a Wells Notice may request access to parts of the SEC’s investigative file, as well as meetings with the SEC Staff to discuss the enforcement action recommendation.

At issue here is Kin’s 2017 ICO, in which roughly $100 million of Kin was sold. Kin is a cryptocurrency native to the Kik app and built on Ethereum to the ERC-20 standard. The SEC’s Wells Notice warned Kik that the SEC would allege that the Kin ICO violated Sections 5(a) and 5(c) of the Securities Act of 1934 (issuing non-exempt securities without SEC registration).

On December 10, 2018, Kik responded to the Wells Notice by making three arguments against enforcement. First, Kik argued that Kin is a “currency” and therefore cannot, by definition, be a security under the federal securities laws. Second, Kik argued that the token pre-sale and public distribution were not “investment contracts.” Third, Kik argued that public policy advises against enforcement because Kik attempted to comply with current guidance and because an enforcement action would amount to “regulation by enforcement.”

In a post on Medium, Ted Livingston wrote: “This situation is not unique to Kik. There are dozens of projects at a similar point with the SEC. We all believe that this industry needs regulation, but we also believe that this is not the way to get it.”

To date, the SEC has not concluded whether to accept the Enforcement Staff’s recommendation.  Stay tuned as this action unfolds.

Please click here for the Kik Interactive Wells Notice and Wells Submission.

ISDA Guidelines for Smart Derivatives Contracts

The International Swaps and Derivatives Association (ISDA) has published the first in a series of guidelines for smart derivative contracts. This series of papers is intended to “provide high-level guidance on the legal documentation and framework that currently governs derivatives trading, and to point out certain issues that may need to be considered by technology developers when introducing technology into that framework.”

The introductory ISDA guidance, published on January 30, discusses what smart derivative contracts are, the legal complexities inherent in such arrangements, principles and models for smart derivative contracts, and considerations for technology developers.

According to the ISDA, derivatives provide a clear use case for smart contracts, as derivative payment and delivery is largely dependent on conditional logic. However, derivatives transactions create a web of legal complexities that a smart contract would need to accommodate. The ISDA guidelines articulate several principles to guide development of derivative smart contracts, including compatibility with existing standards and required legal validation.

Please click here for the guidelines.

House Passes Bills to Study Cryptocurrency’s Link to Crime

The U.S. House of Representatives passed a bill on January 28—H.R. 502, named the “Fight Illicit Networks and Detect (FIND) Trafficking Act of 2019”—that would require the Comptroller General of the United States to investigate how cryptocurrencies and online marketplaces enable sex and drug trafficking. The result of such a study would be regulatory and legislative recommendations to impede such illicit uses of cryptocurrencies.

In a press release, Representative Juan Vargas noted, “While evidence points to the growth of virtual currencies as a payment method for illicit sex and drug trafficking, the true scope of the problem and potential solutions are still unknown.”

This type of research-related bill dovetails with another bill in the House—H.R. 56, named the “Financial Technology Protection Act”—which would establish “the Independent Financial Technology Task Force to Combat Terrorism and Illicit Financing, which must research terrorist and illicit use of new financial technologies and issue an annual report.” This bill was passed by the House by a voice vote on January 28.

Industry Developments

SWIFT Announces Blockchain Project with R3

SWIFT, the global financial messaging service, announced on January 30 that it was partnering with R3, a blockchain startup aimed at bridging the gap between blockchain and the banking industry, to launch a proof-of-concept project. The project, called gpi Link, will utilize the blockchain platform Corda to allow institutions to authorize and settle payments through banks and receive credit confirmations on distributed ledger technology. SWIFT’s announcement for gpi Link claims that 50% of SWIFT gpi payments are credited within 30 minutes.

The gpi Link project will initially focus on utilizing R3’s distributed ledger technology. However, the hope is that it will expand to support other blockchain and non-blockchain environments in the future. SWIFT’s chief market officer noted that “[w]hile DLT-enabled trade is taking off, there is still little appetite for settlement in crypto-currencies and a pressing need for fast and safe settlement in fiat currencies.” The results of SWIFT’s trial will be presented at Sibos—a banking and finance conference—in September 2019.

Please click here for the SWIFT press release.

International Developments

QuadrigaCX Applies for Creditor Protection

Canadian cryptocurrency exchange QuadrigaCX filed for creditor protection with the Nova Scotia Supreme Court on January 31. According to a statement on the company’s website: “For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful.”

According to CoinDesk’s review of QuadrigaCX’s court filings, the exchange owes customers roughly $190 million. Much of its cryptocurrency holdings are in cold storage, meaning the tokens’ private keys are stored offline for greater protection. QuadrigaCX’s founder Gerald Cotton controlled the company’s cold storage. Unfortunately, Cotton passed away in India in December 2018, which means access to the stored tokens is uncertain.

Saudi Arabia and UAE “Aber” Project

On January 29, the Saudi Arabian Monetary Authority (SAMA) and the United Arab Emirates Central Bank (UAECB) issued a joint statement about launching Aber, a blockchain technology for financial settlements between the two countries. The hope is that digital currency technology will support the development of international remittances. Both countries are also interested in learning if distributed ledger technology can be used as “an additional reserve system” for domestic payment settlement in case of systematic disruption. The initial steps toward this project were taken in December 2017, when the UAE Central Bank governor, Mubarak Rashed Al Mansouri, first announced that Saudi Arabia and the UAE were discussing developing a cryptocurrency for cross-border transactions.

Iranian Draft Cryptocurrency Regulations

According to Al Jazeera, the Central Bank of Iran has released early drafts of cryptocurrency regulations. This release coincides with the Electronic Banking and Payment Systems conference being held in Tehran. The draft regulations would recognize cryptocurrencies and authorize initial coin offerings. However, the regulations would restrict the use of cryptocurrencies (other than a state-backed cryptocurrency launched by Iran’s Central Bank) as a method for payment within Iran, as well as require special licenses and certifications for banks and trading platforms within Iran handling cryptocurrencies. According to an official statement (link in Persian) from the Governor of the Central Bank of Iran, Abdolnaser Hemmati, regulations will not be finalized until there is adequate input from technology experts in the field.

This is a change in outlook from April 2018, when the Central Bank of Iran banned Iranian banks and credit institutions from dealing in cryptocurrencies. Additionally, in November 2018, the U.S. Department of Treasury’s Office of Foreign Asset Control (OFAC) took action against two Iranian citizens and their Bitcoin wallets, citing their use in the SamSam ransomware scheme. This was the first time OFAC included digital currency addresses in its Specially Designated Nationals and Blocked Persons List. You can read more about the OFAC actions here.

South Korea Continues Ban on ICOs

South Korea’s Financial Services Commission (FSC) will continue its 2017 ban on raising money through virtual currencies, including ICOs. In a January 30 press release, the FSC discussed the results of a survey sent out to 22 companies. The takeaways from the survey include the following: (i) investments in ICOs are still very risky, and poor returns for ICO purchasers is a cause for concern; (ii) companies outside of South Korea are conducting ICOs in more favorable jurisdictions and raising funds from domestic Korean investors; and (iii) there is still a lack of uniform data and information for investors to digest before making ICO investment decisions.

Because of these issues, the ban on ICOs in South Korea will continue. However, the FSC’s press release also discussed plans by the Korean government to research and foster regulated blockchain initiatives. These include pilot projects, tax credits for research and development costs, and training initiatives.

Please click here for the press release.

[View source.]

Source link http://bit.ly/2DiohuW

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Blockchain Week in Review – February 2019 | Perkins Coie

Blockchain Week in Review – February 2019 | Perkins Coie

U.S. Developments

Kik Publicizes Response to Possible SEC Enforcement

On January 27, the Wall Street Journal published an article describing the impending legal battle over cryptocurrency Kin and its 2017 ICO. That same day, Ted Livingston, the founder and CEO of Canadian company Kik Interactive (Kik) and the developer behind Kin, published the Wells Notice he received from the Securities and Exchange Commission (SEC) on November 16, 2018, as well as Kik’s response.

By way of procedural background, a “Wells Notice” is a communication of a preliminary determination by the SEC Enforcement Staff to recommend an enforcement action or administrative proceeding against the recipient.  The Wells Notice generally identifies the possible charges to be made against the recipient.  The recommendation is made to the SEC Commissioners, who determine whether to accept or reject the Enforcement Staff’s recommendation.  For the most part, the SEC almost always provides proposed defendants and respondents the opportunity to submit a written response to the allegations contained in the Wells Notice, although not technically required to do so.  In addition to filing a response, a recipient of a Wells Notice may request access to parts of the SEC’s investigative file, as well as meetings with the SEC Staff to discuss the enforcement action recommendation.

At issue here is Kin’s 2017 ICO, in which roughly $100 million of Kin was sold. Kin is a cryptocurrency native to the Kik app and built on Ethereum to the ERC-20 standard. The SEC’s Wells Notice warned Kik that the SEC would allege that the Kin ICO violated Sections 5(a) and 5(c) of the Securities Act of 1934 (issuing non-exempt securities without SEC registration).

On December 10, 2018, Kik responded to the Wells Notice by making three arguments against enforcement. First, Kik argued that Kin is a “currency” and therefore cannot, by definition, be a security under the federal securities laws. Second, Kik argued that the token pre-sale and public distribution were not “investment contracts.” Third, Kik argued that public policy advises against enforcement because Kik attempted to comply with current guidance and because an enforcement action would amount to “regulation by enforcement.”

In a post on Medium, Ted Livingston wrote: “This situation is not unique to Kik. There are dozens of projects at a similar point with the SEC. We all believe that this industry needs regulation, but we also believe that this is not the way to get it.”

To date, the SEC has not concluded whether to accept the Enforcement Staff’s recommendation.  Stay tuned as this action unfolds.

Please click here for the Kik Interactive Wells Notice and Wells Submission.

ISDA Guidelines for Smart Derivatives Contracts

The International Swaps and Derivatives Association (ISDA) has published the first in a series of guidelines for smart derivative contracts. This series of papers is intended to “provide high-level guidance on the legal documentation and framework that currently governs derivatives trading, and to point out certain issues that may need to be considered by technology developers when introducing technology into that framework.”

The introductory ISDA guidance, published on January 30, discusses what smart derivative contracts are, the legal complexities inherent in such arrangements, principles and models for smart derivative contracts, and considerations for technology developers.

According to the ISDA, derivatives provide a clear use case for smart contracts, as derivative payment and delivery is largely dependent on conditional logic. However, derivatives transactions create a web of legal complexities that a smart contract would need to accommodate. The ISDA guidelines articulate several principles to guide development of derivative smart contracts, including compatibility with existing standards and required legal validation.

Please click here for the guidelines.

House Passes Bills to Study Cryptocurrency’s Link to Crime

The U.S. House of Representatives passed a bill on January 28—H.R. 502, named the “Fight Illicit Networks and Detect (FIND) Trafficking Act of 2019”—that would require the Comptroller General of the United States to investigate how cryptocurrencies and online marketplaces enable sex and drug trafficking. The result of such a study would be regulatory and legislative recommendations to impede such illicit uses of cryptocurrencies.

In a press release, Representative Juan Vargas noted, “While evidence points to the growth of virtual currencies as a payment method for illicit sex and drug trafficking, the true scope of the problem and potential solutions are still unknown.”

This type of research-related bill dovetails with another bill in the House—H.R. 56, named the “Financial Technology Protection Act”—which would establish “the Independent Financial Technology Task Force to Combat Terrorism and Illicit Financing, which must research terrorist and illicit use of new financial technologies and issue an annual report.” This bill was passed by the House by a voice vote on January 28.

Industry Developments

SWIFT Announces Blockchain Project with R3

SWIFT, the global financial messaging service, announced on January 30 that it was partnering with R3, a blockchain startup aimed at bridging the gap between blockchain and the banking industry, to launch a proof-of-concept project. The project, called gpi Link, will utilize the blockchain platform Corda to allow institutions to authorize and settle payments through banks and receive credit confirmations on distributed ledger technology. SWIFT’s announcement for gpi Link claims that 50% of SWIFT gpi payments are credited within 30 minutes.

The gpi Link project will initially focus on utilizing R3’s distributed ledger technology. However, the hope is that it will expand to support other blockchain and non-blockchain environments in the future. SWIFT’s chief market officer noted that “[w]hile DLT-enabled trade is taking off, there is still little appetite for settlement in crypto-currencies and a pressing need for fast and safe settlement in fiat currencies.” The results of SWIFT’s trial will be presented at Sibos—a banking and finance conference—in September 2019.

Please click here for the SWIFT press release.

International Developments

QuadrigaCX Applies for Creditor Protection

Canadian cryptocurrency exchange QuadrigaCX filed for creditor protection with the Nova Scotia Supreme Court on January 31. According to a statement on the company’s website: “For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful.”

According to CoinDesk’s review of QuadrigaCX’s court filings, the exchange owes customers roughly $190 million. Much of its cryptocurrency holdings are in cold storage, meaning the tokens’ private keys are stored offline for greater protection. QuadrigaCX’s founder Gerald Cotton controlled the company’s cold storage. Unfortunately, Cotton passed away in India in December 2018, which means access to the stored tokens is uncertain.

Saudi Arabia and UAE “Aber” Project

On January 29, the Saudi Arabian Monetary Authority (SAMA) and the United Arab Emirates Central Bank (UAECB) issued a joint statement about launching Aber, a blockchain technology for financial settlements between the two countries. The hope is that digital currency technology will support the development of international remittances. Both countries are also interested in learning if distributed ledger technology can be used as “an additional reserve system” for domestic payment settlement in case of systematic disruption. The initial steps toward this project were taken in December 2017, when the UAE Central Bank governor, Mubarak Rashed Al Mansouri, first announced that Saudi Arabia and the UAE were discussing developing a cryptocurrency for cross-border transactions.

Iranian Draft Cryptocurrency Regulations

According to Al Jazeera, the Central Bank of Iran has released early drafts of cryptocurrency regulations. This release coincides with the Electronic Banking and Payment Systems conference being held in Tehran. The draft regulations would recognize cryptocurrencies and authorize initial coin offerings. However, the regulations would restrict the use of cryptocurrencies (other than a state-backed cryptocurrency launched by Iran’s Central Bank) as a method for payment within Iran, as well as require special licenses and certifications for banks and trading platforms within Iran handling cryptocurrencies. According to an official statement (link in Persian) from the Governor of the Central Bank of Iran, Abdolnaser Hemmati, regulations will not be finalized until there is adequate input from technology experts in the field.

This is a change in outlook from April 2018, when the Central Bank of Iran banned Iranian banks and credit institutions from dealing in cryptocurrencies. Additionally, in November 2018, the U.S. Department of Treasury’s Office of Foreign Asset Control (OFAC) took action against two Iranian citizens and their Bitcoin wallets, citing their use in the SamSam ransomware scheme. This was the first time OFAC included digital currency addresses in its Specially Designated Nationals and Blocked Persons List. You can read more about the OFAC actions here.

South Korea Continues Ban on ICOs

South Korea’s Financial Services Commission (FSC) will continue its 2017 ban on raising money through virtual currencies, including ICOs. In a January 30 press release, the FSC discussed the results of a survey sent out to 22 companies. The takeaways from the survey include the following: (i) investments in ICOs are still very risky, and poor returns for ICO purchasers is a cause for concern; (ii) companies outside of South Korea are conducting ICOs in more favorable jurisdictions and raising funds from domestic Korean investors; and (iii) there is still a lack of uniform data and information for investors to digest before making ICO investment decisions.

Because of these issues, the ban on ICOs in South Korea will continue. However, the FSC’s press release also discussed plans by the Korean government to research and foster regulated blockchain initiatives. These include pilot projects, tax credits for research and development costs, and training initiatives.

Please click here for the press release.

[View source.]

Source link http://bit.ly/2DiohuW

[teiraymondmccoy78]

How blockchain may kill the password

How blockchain may kill the password

Imagine a company that can verify the background of a new employee and onboard them with the click of a single virtual button, or a banking customer who can verify their identity for a loan without exposing personally identifiable information – again with a click of a button.

That’s the potential blockchain holds for decentralized identity management. It’s done  by creating a digital wallet that serves as a repository for all kinds of personal and financial data, info that can only be shared after a specific request and only with the permission of the owner.

Blockchain distributed ledger technology (DLT) – in combination with digital identity verification – holds the potential to solve online privacy issues that plague everything from consumer sales and bank know-your-customer regulations to employee credentials that allow access to confidential business systems.

“There are multiple vendors in this space that are either in the early R&D stage or testing their products in pilot projects,” said Homan Farahmand, a senior research director with Gartner. “It is too early to declare any winner, by any means, because just having a working product is not enough. Decentralized identity requires a vibrant ecosystem, a robust identity trust fabric built on a distributed ledger or blockchain, tools to support user-friendly functionality and good developer experience to support broad adoption.”

One considerable security attribute of storing digital identities on an encrypted, distributed blockchain ledger is eliminating “honey pots,” or central repositories for customer account information, according to Julie Esser, chief engagement officer for CULedger, a Denver-based Credit Union Service Organization (CUSO). Those repositories are prime targets for hackers.

Credit Unions are already testing ID management

Like other CUSOs, CULedger is a cooperative owned by multiple credit unions for the purpose of providing back-office services; it was created a year ago to build out a blockchain-based identity management platform called My CUID. The platform is expected to launch in the second half of 2019 and will hand the keys to data protection over to customers who sign up for an app. CULedger has 36 investors – 26 credit unions and several CUSOs.

In October, CULedger began piloting My CUID with five other credit unions and another CUSO; it eliminated the need for user names and passwords and relieved credit union call centers from the obligation of resetting them when a customer loses them.

How it works: a new or current customer of a member credit union contacts a customer service call center, which sends a text message to the customer’s mobile device with a link to download the My CUID app. The credit union’s rep then issues the customer their credentials – a digital wallet, which holds personally identifiable information obtained during the initial customer contact. That information is encrypted and can only be accessed with the member’s authorization, which is requested when they make a transaction.

Each time a customer using My CUID contacts the credit union – or vice versa – their smartphone or tablet receives a pop-up dialogue requesting they confirm their membership before any transaction is completed.

“You’d click OK or Not OK. It doesn’t feel a lot different than what happens with other apps on your phone,” Esser said. “It’s all based on…the encrypted channels we’ve created, which is really cool. You’re creating a two-way secure communication channel. So, not only does your credit union know it’s you they’re talking to, but you also you know it’s your credit union calling you.”

CULedger has set a goal of issuing 1 million digital identities to credit union members in 2019. Because credit unions must comply with Know-Your-Customer federal regulations, the blockchain-based digital ID service would also fulfill regulatory compliance, Esser said.

Along with giving the customer control over their identity by handing them the blockchain encryption keys, My CUID would eliminate the need for user login names and passwords and dramatically reduce the time it takes for a credit union call center representative to authenticate a member.

It can take a rep from 60 to 90 seconds to authenticate a member before a transaction even starts. That can be reduced to 5 seconds or less with My CUID, according to Esser. “It’s not a pleasant experience to phone a call center because the customer is welcomed with 20 questions to identify who you are, so it’s a wonky process that needs fixing.”

Traditionally, credit unions and other financial services firms rely on third-party service providers for call center and customer authentication services, many of which are located outside the U.S. CULedger would place control back in the hands of member credit unions, Esser said.

In 2019, CULedger plans to begin building out its production customer permission network; it is currently considering several blockchain platforms, including IBM’s Hyperledger Fabric service and R3’s Corda, the biggest commercial blockchain consortium among banks, insurers and other financial service firms. CULedger is also considering working with the Hedera Foundation, the creator of Swirlds, a software platform for creating distributed applications (dApps).

Swirlds is based on the Hashgraph protocol, a DLT well suited to the financial services industry because it can process more than 100,000 transactions per second, unlike bitcoin, which processes three to four transactions per second.

“We need the ability to conduct transactions instantaneously – in real time,” Esser said. “We’d planned to create our own platform, but with the focus on a decentralized identification piece, this allows us to not recreate the wheel. There may be some applications that require different [blockchain] platforms.”

How a self-sovereign ID works

For consumers who are mindful of their online information – credit card numbers, date of birth, annual income, etc. – blockchain has the potential for “self-sovereign” identities like CULedger is creating, meaning the user controls who can see their data or get purchasing approval without releasing their income details.

Self-sovereign identities work like this: the user has a bank confirm a credit limit or an employer confirm annual income; that confirmation information is then encrypted, but available, on a public blockchain ledger to which the consumer holds the private and public cryptographic keys.

If a buyer wants a car loan from an auto dealership, for example, the consumer can give them permission through a public key to confirm that he or she has enough credit or annual income without revealing an exact dollar amount. So, for example, if the car dealer wants to ensure a consumer earns more than $50,000 a year, that’s all the blockchain ledger will confirm (not that they actually earn $72,587).

The confidentiality technique is known as zero knowledge proof (ZKP), a cryptography technology that allows a user to prove that funds, assets or identifying information exist without revealing the information behind it. Ernst & Young has created a public blockchain prototype it plans to launch in 2019 that lets companies use ZKPs to complete business transactions confidentially.

Sovereign IDs in the enterprise

CULedger is also working with the Sovrin Foundation, a new nonprofit that has created the blockchain-based Sovrin Network; it enables anyone to globally exchange pre-verified data with any entity also on the distributed ledger.

The online credentials issued via the Sovrin Network are akin to a physical ID you might carry in your wallet, such as a driver’s license, a company ID or a bank debit card. The virtual encrypted wallet (or crypto wallet) would link back to the institutions that created them, such as a bank, a government agency or even an employer, which, through the blockchain, would automatically verify the needed information to a requestor.

“Our market strategy involves working with enterprise partners to solve their ID problems rather than trying to go direct to end users, so yeah, we’re working hard in that area and have a number of partners who are doing things there. Three who come to mind are Government of British Columbia, CULedger and IBM/ATB Financial,” said Phil Windley, chair and co-founder of the Sovrin Foundation.

The Government of British Columbia and the Government of Ontario have already rolled out a production system using the Sovrin Network for business registration and licensing; together they’ve issued over 6 million credentials, according to Windley.

Sovrin development partners IBM, Workday and ATB Financial (a bank in Alberta) have also started pilot tests of the Sovrin Network.

The partners are demonstrating how digital credentials could work for IBM employees. ATB Financial issues a digital credential, which can be used for both logging into the bank and IBM’s user network. Along with validating the employees’ financial information, the distributed ledger application eliminates the need for employees to have a username or password, Windley said.

“Because it’s cryptographically based, it has a public key associated with them, and you [the employee] own the private key,” Windley said.

Gartner’s Farahmand said self-sovereign identities based on blockchain distributed ledgers are being eyed for all kinds of enterprises uses, including onboard new hires.

Each time a new employee is hired, a new decentralized identifier is generated by the that employee and passed to the enterprise. That identifier can then be propagated within the internal systems for user authentication to the enterprise network and applications, Farahmand said.

“This can be a powerful proposition as it speeds up the onboarding process and subsequent identity life cycle management activities, as well as enabling password-less authentication. It also helps with converging multiple personas a person can have relevant to the organization,” Farahmand said, explaining that the digital IDs can be used to access multiple systems within a company based on organization-based permissions.

A popular design pattern for decentralized identity is comprised of a core identifier and a set of “pairwise” identifiers, each for a relationship the user has with an organization. Pairwise identifiers are cryptographically derived from the core identifier. The pairwise identifier enables an enterprise system to uniquely verify a user identity for each relationship and potentially prevent correlation of user activity across different relationships, enabling privacy-by-design principles at the protocol level, Farahmand said.

For example, a bank employee can be a bank customer at the same time while using the same self-sovereign ID. The two personas are typically represented by two digital identities in two siloed systems – one as an employee and one as a customer of the bank.

“In case of a decentralized identity model, the same person can have two sets of identifiers … mapped to the same core digital identity, which can potentially simplify reconciliation of user activities,” Farahmand said.

Another benefit to a self-sovereign ID is the ability to streamline B2B scenarios where an employee of one organization can have access to systems in another. For example, Farahmand said, if the host organization trusts the decentralized identity that is attested by the guest organization, then a new pair-wise decentralized identifier can be generated to authenticate the user; that simplifies the onboarding and access governance for business customers or other partners.

Significant hurdles remain

While self-sovereign IDs based on blockchain hold significant promise for increasing privacy and efficiency, there are also significant technology hurdles that have yet to be vaulted. For one, trust in blockchain.

A 2018 Gartner CIO survey revealed on average that only 3.3% of companies worldwide had actually deployed blockchain in a production environment.

In a blog post, Avivah Litan, a Gartner vice president and distinguished analyst, listed eight hurdles blockchain needs to surmount before it can become a cure-all for virtually any international, transactional network need – from fee-less, cross-border payments to supply chain tracking.

One significant challenge is integrating DLT systems with legacy databases, the current repositories for corporate employee identities. A decentralized identity system also requires a vibrant ecosystem, a roust identity trust fabric built on a distributed ledger or blockchain, tools to support user-friendly functionality and good developer experience to support broad adoption.

“While we encourage our clients to watch this space and do some limited experimentation or even proof-of-concept projects,” Farahmand said, “we also caution them to make sure these products are battle tested, hardened and ready to withstand different types of attacks.”

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