My Opinion

The Swiss financial regulator will in future ban anonymous transactions of bitcoins and other virtual currencies. It is causing a negative excitement in the crypto industry.

According to their name and their intention, virtual currencies like Bitcoin should be "cryptic" - that is, secret, of unclear origin. Therefore, they are also a popular means of money laundering and covert financing. The Swiss financial regulator (Finma) now wants to put an end to this in its area of responsibility and requires an "address slip" for every transaction. This is making big waves in the crypto industry.

Although the announcement already took place on August 26, 2019, it is only now really being noticed by the players in this sector and is provoking some violent reactions. Critics fear a paradigm shift, speak of the "end of crypto payments", a "technology-discriminating practice" and a location disadvantage for the Swiss banking center.

In fact, the federal supervisory authority now applies the same "Travel Rule" to transactions with cryptocurrencies that already applies to banks' normal payment transactions and that makes binding information on the sender and beneficiary for each order. This is intended to enable verification and comparison with sanction lists. The introduction of this so-called "Travel Rule" is not an invention of Finma, but essentially implements the guidelines agreed in June 2019 by the OECD working group "Financial Action Task Force on Money Laundering". The aim of the agreement is to better combat money laundering and terrorist financing.

So there are also more sober voices: According to the head of the blockchain department of management consultancy PwC, Daniel Diemers, this step corresponds to "the general weather situation". The discussions of the International Monetary Fund, the Bank for International Settlements, the ECB and the European Financial Market Authority went in the same direction. After all, traditional banks are also not allowed to process anonymous payments. However, it is still unclear how the new regulation can best be implemented technically for Switzerland. The travel data could be given in the blockchain or noted centrally and then linked to the chain.

In terms of secrecy, token suisse founder and CHIEF executive Alain Kurz pours plenty of water into the wine, because "although many investors believe that bitcoin can be paid anonymously, the opposite is true". This guarantee would only be provided by private coins such as the Monero. With this digital money, most payments would now be processed on the infamous darknet.

Which technical solutions the financial service providers offer to implement the new Finma regulation is still unclear. Bitcoin Suisse has set up an open discussion platform at openvasp.org. What is certain is that the costs will increase - however, according to Daniel Diemers, crypto transactions should remain cheaper in the future than traditional payments.

The country wants to use a new law to ensure that crypto-tokens and other virtual currencies are formally classified as digital assets.

With South Korea, one of the crypto-friendliest countries now wants to create a foundation for the business of cryptocurrency companies. As officially reported in the English language version of the Korea JoongAng daily newspaper, the National Policy Committee of the South Korean National Assembly has passed a bill to regulate cryptocurrencies in the country. The law creates a framework by which crypto-tokens and other virtual currencies are formally classified as digital assets.

Crypt currency exchanges in South Korea have not been classified as financial institutions, but as information providers. Therefore, they fall under the jurisdiction of the Korean Ministry of Science and not the Korean Financial Supervisory Authority. After accusing the government of not doing enough to prevent hacking damage, the Financial Supervisory Service (FSS) said it would broaden its accounting practice to include the country's large crypto currency exchanges.

The bill also sets rules for companies related to cryptocurrencies and other virtual currencies. All companies that hold or trade in virtual currencies must now receive an ISMS (Information Security Management System) certificate from the Korea Internet and Security Agency (KISA) and become a company with digital assets at the Financial Intelligence Unit (FIU) to register.

In addition, cryptocurrency companies must ensure that their anti-money laundering systems comply with the best practices from the International Financial Services Task Force (FATF). Companies that do not comply with these standards will be punished and serious legal measures will be taken against them. After the South Korean constitutional process, it takes about a year for the law to come into force.

This is not the first time that the South Korean government has attempted to regulate the crypto space within its borders. Last year, the authorities banned the anonymous cryptocurrency trade and later introduced new anti-money laundering standards. South Korea is one of the few countries in the world that has turned out to be cryptocurrency-friendly - at a time when most nations are still grappling with the notion of decentralized ledger technology.

According to the recent report of the Central Bank of South Korea, the South Korean stock exchanges have approximately $ 1.9 billion of cryptocurrencies in their accounts.

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.

Includes 500,000 infected machines used to mine cryptocoins (without user knowledge).

The hacker group "Stantinko" already attracted attention with one of the largest botnets in the world due to the theft of credentials, fraud and the manipulation of banners. Researchers at security researcher Eset have recently discovered a new business model for botnet operators: cryptomining on more than 500,000 computers. So that their machinations remain undetected, they camouflage their malicious program on the infected machines. If the person in question opens the Task Manager or if the affected device goes into battery mode, the coinminer from Stantinko shuts itself off and remains invisible.

To conceal the communication, the malicious program works with proxies whose IP address is determined from the description text of Youtube videos. This technique is very sophisticated, because visiting the video platform is not uncommon. Youtube got informed and deleted the videos.

Not surprisingly, the criminals behind Stantinko are looking for new ways to further increase their financial profits through the botnet. Cryptomining is more profitable and harder to track than its old core adware business. With more than half a million infected computers, the cybercriminals will be attracting lucrative revenue. However, the new scam has the disadvantage that the mining of cryptocurrencies consumes enormous system resources, It makes even the opening of the browser a game of patience. Here, the criminals try tricky ways to go to disguise the malicious program from ordinary Internet users. Where previously advertising was only intrusive, the new mesh interferes with even the simplest work.

Is somebody available, who can explain me the advantages of cryptocurrencies?

If I'm using inside the European Union a normal bank transfer, the transfer is free of charge and the receiver see it the next banking day on his account. If I'm transferring money from one bank account inside the European Union then I need to pay a transfer fee of € 7 and up to an transferred amount of € 1.500 € 4 (in total € 11). If I'm transferring more than € 1500 than for the amount above € 1500 will get added around 2‰ on fees.

On the other hand if I'm transferring Bitcoins I have to pay fees:

• If I'm transferring bitcoins from the left hand wallet to the right hand wallet
• If I'm buying Bitcoins
• If I'm selling Bitcoins

Why shall I use in this case Bitcoins if I'm even not able to transfer them from one wallet to another one without fees?

Please tell me, where is the mistake or my thinking error and where are really the advantages from cryptocurrencies.