My Opinion

Thanks to a new money laundering law, German banks will be able to retain Bitcoin and offer crypto services in the future. An important step in the adaptation.

From 2020, it will be legal for German banks to sell cryptocurrencies like Bitcoin. German financial institutions are not yet allowed to sell cryptocurrencies directly to their clients, but this could change in the future. Thanks to the planned law implementing the EU's fourth money laundering directive. This should allow German banks to keep Bitcoin and offer other crypto services in the future.

As decided last week in the Bundestag, crypto values in Germany are becoming an official, regulated financial instrument. The new money laundering law allows banks to store and offer cryptocurrencies. This could open up a new business area for German banks from 2020 onwards. Currently, no institute offers its clients virtual assets, except for the Bitwala bank in Berlin. The law has already been passed by the Bundestag and now awaits the consensus of the 16 federal states.

The German crypto community is satisfied with the bill and thinks that Germany is well on the way to becoming a crypto-heaven. If the federal states agree with the proposal, German citizens could hold their digital currencies directly with banks. In doing so, banks will provide appropriate online banking solutions for the full range of assets, including stocks, bonds and cryptocurrencies. This means that crypto owners can access their credit at the push of a button.

The final bill also provides for a deletion of the so-called separation bid. According to him, the re-regulated crypto-surplus transaction should not have been offered together with other regulated banking operations from the same legal entity. Until now, banks had to resort to special subsidiaries or external depositaries.

Interestingly, the Federal Association of German Banks (BdB) welcomes the new regulation. It is argued that lenders already have experience in storing client assets and risk management. The new law could prevent cryptographic money laundering and allow German investors access to the crypto room through domestic funds.

However, not everyone is satisfied with the bill because critics fear less consumer protection. The consumer center of Baden-Wuerttemberg fears that the banks with the new products will sell more aggressively and with all means at new customers. However, there is a risk that customers may not be sufficiently informed about the potential risks of investing in cryptos. When it comes to the safekeeping of crypto assets, Bafin¹ supervision must also intensively examine the additional IT risks, since storing Bitcoin places entirely new demands on the technical infrastructure.

The term "crypto values" will now appear and be defined in German law for the first time and is thus considered the core of the new regulation. By definition, crypto-values are digital representations of a value that has not been issued by any public authority or central bank but is used for investment purposes and accepted as a means of payment and exchange. On November 29, 2019, the Federal Council finally adopted the law, which means that the new regulation can enter into force on January 1, 2020.

¹⁾ Bafin - Federal Financial Supervisory Authority
The Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) is a German public-law institution with legal capacity based in Frankfurt/Main and Bonn. It is subject to the legal and technical supervision of the Federal Ministry of Finance.

Upbits, Cryptopia, Binance. Some crypto exchange hacks have been announced this year.

During the year 2019, several crypto exchanges were infiltrated worldwide, stealing millions of dollars worth of digital assets. However, as a survey by Binance Research revealed, 92% of investors still keep their cryptos on exchange wallets of the crypto exchanges. A surprising number, if you look at the crypto exchange hacks this year alone.

First, it caught the New Zealand cryptocurrency exchange Cryptopia. On January 14, the company announced an emergency maintenance. The next day, the website of the stock exchange went offline with the blog and support pages. Cryptopia subsequently announced that it had suffered significant losses through a security breach. According to data analyst Elementus, the loss of ERC 20 and Ethereum tokens was estimated at $ 16 million. In addition, the hacker had stolen the private keys of Cryptopia and was able to withdraw another 1,675 ETH.

Two other crypto currency exchanges lost funds in March. Singaporean DragonEX reported on the official telegram channel that the crypto-exchange was compromised and $ 7 million worth of assets had disappeared. The South Korean Bithumb Exchange issued a statement in the same month that an abnormal and unauthorized withdrawal resulted in a loss of $ 13 million. The company suspected that this was an insider job and took full responsibility for the lost funds.

Even Binance, the world's largest crypto exchange, similarly experienced a security breach worth around $ 40 million. It was about 7,000 BTC and according to Binance CEO Changpeng Zhao, the hack stole about 2 percent of the BTC holdings on this crypto exchange. However, no user funds were affected and this incident is fully covered by SAFU funds.

Singapore-based Bitrue announced on June 27 in a series of tweets that the "risk control protocol" was exploited through vulnerabilities that allowed cybercriminals to access nearly $ 5 million in personal funds. It affected the crypto assets of about 90 Bitrue users from the hack.

A little later, the Japanese BITPoint lost $ 28 million in an attack, directly affecting over 50,000 users. According to BITPoint CEO Genki Oda, 5,108 LTC, 11,169 ETH, 1,225 BTC and 1,985 BCH were stolen. The company promised all users to refund their cryptos.

The biggest known crypto poll of the year took place last week in South Korea. UPbit, one of the largest crypto currency exchanges in South Korea, announced that 342,000 ETH were transferred from the hot wallet of the stock exchange to an unknown wallet. The loss is worth $ 51 million. The company behind UPbit, however, insures to cover all losses with enterprise values.

These cases are again impressive, crypto exchanges offer repeatedly attack surfaces for hackers and scammers. Even if the stock markets fail to sleep in terms of security and to constantly increase and optimize their security measures, there remains a race. Therefore, it is always recommended not to store crypto-balances on wallets at stock exchanges, but to use hardware wallets such as Ledger or Trezor. In the context of crypto exchange hacks surprised the result of a Binance survey. There, more than 90% of the surveyed investors stated that they were storing their wallet balances on stock exchanges.

Facebook met with the Libra project across Europe strong resistance, whether in politics or business and the citizens of the countries. A new survey reaffirms these results, pointing to continued high levels of people's trust in traditional institutions such as banks.

Between Facebook's Libra project and Google's new Google Pay-linked checking accounts, the tech giants are showing big plans to integrate into the digital finance world of Bitcoin and Co. But not many tech and financial experts will seize the opportunity to leverage such services, according to a new survey by Blind, an app-based "anonymous social network".

The published results show that more than 5,000 professionals from various companies, including Apple, Google, Amazon, Facebook and Uber, are skeptical. The study found that the overwhelming majority of professionals, around 62 percent, trusted "traditional banks" as "big tech" even earlier in their financial data. Of the tech professionals surveyed, 57 percent said they trust banks more than big tech companies, while nearly 70 percent of those working in finance said they favor traditional institutions.

In addition, some technology company employees do not even trust their own company with their financial information - least of all on Uber and Facebook. Of the 186 surveyed Facebook employees, only 21 percent said they trusted their data to the social media giants. (Uber scored even less - bleak 16 percent, though only 45 Uber employees took part in the survey.)

The results suggest that even Facebook employees would not trust Libra. Cuire Kim, Blind's brand marketing manager responsible for conducting the survey, made it clear that the survey did not specifically ask about Libra. However, given Facebook's collaboration with Libra, it is not a big leap, despite the company's efforts to separate itself and its reputation from the project.

Libra has experienced a very different response since its creation in June this year. While some saw Libra as a way to capitalize on the crypto-mainstream and legitimize the industry, others, especially the regulators, were reluctant to accept the project as the noble effort it claims to be.

Both Mark Zuckerberg, CEO of Facebook, and David Marcus, head of the company's blockchain division, have been briefed by members of the US Congress on Libra and its perceived potential to combat money laundering and other white-collar crime in recent months silent about the concerns raised by the project regarding data protection.

Given Facebook's many published data scandals, including Cambridge Analytica's fiasco last year, it's not surprising that even its own employees are not too keen to pass on sensitive financial data to the company. Brad Garlinghouse, CEO of Ripple, also says that Facebook has a fundamental trust problem and that trust is actually the foundation of all further steps and actions in a sensitive market such as the financial market. Garlinghouse believes Libra's vision is good, but the company would first have to convince politicians and businesses worldwide that Libra is 100% secure and does not collect data and share it with third parties.

Instead of leaving the field to credit card companies and projects like Libra, the policy should create a digital Euro, demands the trade association.

The German Trade Association (HDE) has called on politicians to create a digital Euro as payment method. The should be an alternative to the major credit card networks and tech companies such as Facebook with the planned digital money Libra. Before the meeting of the EU finance ministers on 5 December, the association also made itself strong by letter to Federal Finance Minister Olaf Scholz.

"Global credit card companies have been using their strong position for years and have already reached a market dominance that trade can not ignore", wrote HDE Chief Executive Stefan Genth, according to a press release. Genth also sees a desire for payment from the hustle and bustle of tech companies "data collection". The trade would lose more and more direct contact with the customer. A state digital currency could offer more independence from such system operators.

Facebook's plans to launch the crypto-currency-based payment method Libra have long been fueling a debate over possible central bank coins. Libra is supposed to become a kind of crypto-money administered by a consortium of private companies backed by a basket of normal currencies such as Dollars and Euros.

This met with politicians and regulators on sharp refusal. Instead, about an e-Euro is brought into play, issued by the European Central Bank. Treasury secretary Scholz has already spoken out in favor, and the German parliamentary group of the CDU was in favor of it. Projects for such digital currencies of central banks already exist from several countries. Among other things, Sweden is working on the E-Krona, the People's Bank of China is also in the starting blocks for a digital central bank money.

Central bank money for end consumers exists in this country so far only as cash, but not in digital form. For payments via the banking system, such as transfers from checking account to checking account, only so-called bankroll money is moved. This is book money generated by commercial banks, which is merely a demand for the disbursement of cash issued by the central bank. From a formal point of view, bankroll is not a legal tender in Germany, so there is no obligation to accept it; in everyday transactions, it still accounts for the majority of payments.

Unknown offenders attacked a popular cryptocurrency exchange and withdrew coins from the currency Ethereum.

The South Korean crypto exchange Upbit has confirmed that 342,000 Ethereum coins worth almost US$ 49 million (€ 45 million) were transferred from their wallet to an "anonymous" wallet on November 27, so the money was stolen. and payments stopped and all reserves moved to offline wallets.

Upbit has announced that it will compensate all damaged customers out of its own pocket. However, it will take about two weeks for the page to work as usual. Until then, all transfers are stopped, as Engadget reports.

Upbit urged customers to block the wallet in question for which the money was flowing. But the owner is completely unknown. These could be external criminals or insiders. It cannot be ruled out that this is a state attack. There have been several reports in the past of attacks on Bitcoin exchanges in North Korea.