The Daily: Fake Trezors, Catching Knives, Stablecoins With Everything

The Daily: Fake Trezors, Catching Knives, Stablecoins With Everything

The Daily

There aren’t many prices that cryptocurrency traders can bear to look at right now, but stablecoins are one of the few exceptions. In this edition of The Daily, we consider the latest cryptocurrency niche that dollar-pegged coins are encroaching on, but not before we’ve addressed the serious business of fake hardware wallets and how to call the bottom in a market that won’t stop falling.

Also read: Fear, Loathing and Opportunity: How Traders Are Handling the Drop

Fake Trezors Found in the Wild

As if cryptocurrency investors didn’t have enough woes to deal with right now, there’s a bunch of fake hardware wallets doing the rounds. The Trezor lookalikes are manufactured cheaply in China, the land of knock-off electronics. If an offer looks too good to be true though, it probably is, and traders would be advised not to endanger their funds by storing them in a copycat wallet that could be backdoored or simply insecure.

The Daily: Fake Trezors, Catching Knives, Stablecoins With EverythingFake Trezor on the left, authentic Trezor on the right

“You would not entrust your money to somebody who has already cheated you by selling you a different product than you thought you were buying. We, therefore, recommend not to use this [fake] device,” wrote Trezor, before explaining how to tell the difference between the company’s official holographic seal and that used on the ersatz imitators.

Knife Catching Is a Dangerous Game

Earlier today, we wrote about cryptocurrency investors scrambling to sweep up cheap coins as Bitcoin holds its very own Black Friday sale. While the temptation to splurge on discounted crypto can be strong, catching falling knives is a dangerous game. For those brave enough to try and time the bottom in this market, crypto Twitter has some advice. “A crash like this usually ends with a ‘big bang’ and a quick V shape reversal. So far we’ve only seen ‘slow’ decline. Don’t try to fight the trend just wait for confirmation,” urged one source.

Respected analyst Willy Woo got a little more technical, tweeting: “RSI reading more FUD than the Feb 12K->6K crash. We have decent volume profile support in this 4.4K region … very unlikely to slice through… if anything the brave can go knife catching.”

Perhaps Jackson Palmer put it best, though:

Stablecoin Watch

It’s always interesting to check in on stablecoins during days of extreme market volatility. What’s particularly interesting is noting which way different dollar-pegged coins bend when their volume starts to stack up. At the time of writing, USDC and TUSD are trading at one to three cents over the dollar, while USDT is under, with each tether trading for an average of $0.97. Dai, the stablecoin that is collateralized using ether, is sitting just under $1. Earlier today, a $50 million collateralized debt position had to be liquidated and the eth locked in the contract sold off, after falling cryptocurrency prices left the dai contract under-collateralized.

“In the last few days we’ve seen a drop of more than 30 percent for BTC and even greater for other cryptocurrencies,” said Ronny Boesing, CEO of stablecoin developer Openledger. “One kind of crypto that has not been affected by this is collateralized stablecoins such as dai by Makerdao and our own bitcny, available on Bitshares. Bitcny operates as an ERC20 token, issued by Openledger and backed by the Bitshares network, with an equivalent amount of Smartcoins held in a multisig account. These are issued purely on the basis of supply and demand.”

The Daily: Fake Trezors, Catching Knives, Stablecoins With EverythingBitusd (light blue) is the only stablecoin showing major divergence, trading at $0.91

Lest we needed further proof of how badly this bear market is biting, blockchain conferences are being challenged by a new kind of digital asset convention — the stablecoin conference. The Stablecoin Foundation Conference takes place in New York on Nov. 26. The prospect may sound about as alluring as watching paint dry, but if this market downturn persists, stablecoin conferences could soon become the norm. While day traders thrive on volatility, most cryptocurrency investors would love nothing more than a spot of stability right now.

What are your thoughts on today’s news tidbits as featured in The Daily? Let us know in the comments section below.

Images courtesy of Shutterstock, Trezor, and Stablecoin Index.

Need to calculate your bitcoin holdings? Check our tools section.

Fear, Loathing and Opportunity: How Crypto Traders Are Handling the Drop

Fear, Loathing and Opportunity: How Crypto Traders Are Handling the Drop

Markets and Prices

The last 24 hours have been the worst the cryptocurrency markets have seen since the 24 hours prior. Things have been looking grim for weeks in fact, but on Nov. 19 the situation went from bad to critical as BTC fell below $4,500, dragging the rest of the market down with it. While some investors used this latest blow to bow out, others have used it as an opportunity to re-up on cheap coins.

Also read: Hash Wars: A Successful BCH Upgrade and a ‘High Risk’ Exchange Listing

Mind the Drop

There’s rarely a dull day in cryptocurrency, but Nov. 19 will go down as a particularly memorable one, albeit for all the wrong reasons. Plummeting crypto prices, on top of a week of plummeting crypto prices, have left many traders in despair and others vowing to rage quit. So somber is the mood that the normally morbid humor that accompanies a price drop has been largely absent from crypto Twitter.

“Now is the time for compassion, patience, respect,” tweeted Andreas Antonopoulos. “Lots of people have lost lots of money recently and it is not helpful to make empty promises, share shitty memes, or criticize others’ choices.”

On 4chan’s /biz/ messageboard, the atmosphere was equally downbeat. “That’s it, I sold,” conceded one poster, accompanied by an image of weed-smoking Elon Musk photoshopped to resemble Brendan Fraser being justed. “I’m free. I’m finally free from this fucking hell of scammers … It was fun and games for a while, but now it’s just a cruel sick joke. I bought [BTC] at 15K. No human can look at their money disappear before their very eyes and not be bothered. You know we’re going to 3K, right?… Let’s all stop pretending that this is gonna be anything but a bear market until 2020.”

One Man’s Fear Is Another’s Opportunity

Fear, Loathing and Opportunity: How Crypto Traders Are Handling the DropPeople respond very differently in times of crisis. For those who missed out on buying bitcoin during last year’s bull run, now blessed with fiat currency sitting on the sidelines, today has been most serendipitous.

“I’ve transferred 100 now for bitty,” read the message I awoke to from a friend. “If it goes down I’ll pick a tiny bit more up, if not, at least I got a wee bit at a decent price.” I duly hooked her up with BTC, and true to her word, she messaged later to say “I transferred another 100 … bitty is having a dip again.”

How many more dips bitcoin can endure before it finally bottoms out is anyone’s guess. What can be said with confidence is that sub-$4.5K BTC is an attractive proposition for investors who thought this day would never come. While some members of crypto Twitter sought “the best capitulation tweet” (and found no shortage of candidates), more sanguine heads have urged delicacy. The majority of cryptocurrency traders had the perspicacity not to invest more than they could afford to lose. For those who got greedy, however, the current market has brought nothing but pain and regret.

Fear, Loathing and Opportunity: How Crypto Traders Are Handling the Drop

There are also those whose very jobs could be at stake should assets such as ethereum fail to recover. One ICO that raised funds in 2018 and elected to keep its war chest in ETH has conceded it will struggle to cover its payroll should current prices persist for another two months. Despite conceding that his job may be at risk, an employee told “this is Wall Street crash ’87 for the modern age. It’s actually extremely exciting.” Few would dispute that assessment but they would welcome some respite from a year that started with a roar only to finish on a whimper.

Where do you think the cryptocurrency market goes from here? Let us know in the comments section below.

Images courtesy of Shutterstock and Twitter.

Need to calculate your bitcoin holdings? Check our tools section.

Everything That’s Wrong With Roubini’s Central Bank Crypto Love Letter

Everything That’s Wrong With Roubini’s Central Bank Crypto Love Letter


Whenever Nouriel Roubini talks smack about Bitcoin, it’s hard to know how to respond. Do you ignore “Dr. Doom,” mindful of the mantra to not feed the trolls? Or do you tackle him head on, shooting down his fallacies, but granting the attention he so desperately craves? It’s a conundrum, but in the case of the doc’s provocative new piece, a paean to central bank coins, the only option is to shoot for the heart. Here’s everything that’s wrong with Roubini’s latest brain dump.

Also read: A Brief Introduction to Voluntaryism for Crypto Neophytes

Oops He Did It Again

Everything That's Wrong With Roubini's Central Bank Crypto Love LetterNouriel Roubini

Those of us who were raised in the internet trenches, on the sort of forums where trolls like to troll trolls, know that giving attention-whores the oxygen they crave is generally a bad idea. Sometimes, though, your bête noire comes out with something so asinine the only option is to take the bait. From the title alone — “Why Central Bank Digital Currencies Will Destroy Cryptocurrencies” — you can tell that the author of the hit piece is faded economist Nouriel Roubini. You can also tell that at the end of each sentence, the excitable Dr. Doom had to pause to wipe the spittle from his screen.

The career of the Stern School of Business lecturer has been on a downward trajectory ever since BTC was changing hands for 40 bucks. Having been wrong about cryptocurrency for six years straight, Roubini isn’t going to change his tune now. Stubbornness is one of his many attributes. It’s a shame, because if it were only possible to see past his Trumpian bluster, Roubini occasionally has some good points to make.

Our subject begins his tirade by acknowledging that we’re transitioning to a cashless society and explaining that central bank digital currencies (CBDCs) are on the horizon. Up until now, Roubini is on solid ground. Unfortunately, he then ruins it by going full Dr. Doom:

Starry-eyed crypto-fanatics have seized on policymakers’ consideration of CBDCs as proof that even central banks need blockchain or crypto to enter the digital-currency game. This is nonsense. If anything, CBDCs would likely replace all private digital payment systems, regardless of whether they are connected to traditional bank accounts or cryptocurrencies.

Somebody Call a Doctor

As is often the case with Roubini’s unhinged rants, there are grains of truth scattered in there, such as the observation that central banks won’t use conventional blockchains to issue their digital currencies. That much can be safely assumed. But then our protagonist’s argument starts to rapidly unfold with the assertion that “If a CBDC were to be issued, it would immediately displace cryptocurrencies, which are not scalable, cheap, secure, or actually decentralized.”

It’s hard to know where to start with this sentence, which is filled with more logical fallacies and doublethink than the notion that “XRP was gifted to Ripple.” Apparently:

  • CBDCs will “immediately displace” cryptos – citation needed
  • Cryptos are “not cheap” – explanation needed
  • “Not secure” – citation needed
  • “Not actually decentralized” – and CBDCs are?

“Yes. Everyone will love using backdoored central bank digital currencies and no one would ever want to use anything else ever,” read one sarcastic response to Dr. Doom’s word salad.

If you can stomach more sensible chuckles, let’s read on to where Roubini claims “Enthusiasts will argue that cryptocurrencies would remain attractive to those who wish to remain anonymous. But, like private bank deposits today, CBDC transactions could also be made anonymous, with access to account-holder information available, when necessary, only to law-enforcement authorities or regulators, as already happens with private banks.”

Everything That's Wrong With Roubini's Central Bank Crypto Love Letter

Moving on from sensible chuckles to sides leaving orbit, Roubini continues: “By transferring payments from private to central banks, a CBDC-based system would be a boon for financial inclusion. Millions of unbanked people would have access to a near-free, efficient payment system through their cell phones.” Cos, you know, the only thing preventing impoverished Somalis from accessing banking services is the lack of a central bank cryptocurrency. The global financial system totally wants to include the downtrodden; it was just waiting to invent a centralized cryptocurrency before inviting them to the party.

Bitcoin could drop to $50 and it would still be a better investment than any CBDC. Whatever happens to central bank digital currencies, they will never displace decentralized cryptocurrencies, just as Roubini will never displace the gnawing pain that tells him he should have bought bitcoin in 2013.

Everything That's Wrong With Roubini's Central Bank Crypto Love LetterDays without Nouriel Roubini being wrong.

What are your thoughts on Nouriel Roubini’s latest rant? Let us know in the comments section below.

Images courtesy of Shutterstock.

OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. does not endorse nor support views, opinions or conclusions drawn in this post. is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.


Ends in 10 day(s)


Sparklemobile seeks to connect it’s users with a network of local professional automotive detailers that provide high quality mobile detailing services


Required tools:

  Telegram   Twitter   Facebook   Reddit   Instagram   Others

  1. Go to the airdrop page (‘JOIN THE AIRDROP’  button)
  2. Sign up and verify your email
  3. Complete social media tasks

Imaginative Ways to Buy Crypto, Explained

What is the best way to buy crypto?

A lot of this depends on which cryptocurrency you’re buying, how much you want, and where you are based.

As long as you are in a country which hasn’t banned purchasing digital currencies (attitudes vary around the world,) you’ll probably be able to use a crypto exchange. There are dozens of outlets to pick from, and each support different fiat currencies – meaning you can get your hands on Bitcoin, Ethereum and others irrespective of whether you use US dollars, euros, pounds or Japanese yen as a payment method.

Many of these centralized exchanges claim that they make purchasing cryptocurrencies as easy as splashing out on a pair of socks on Amazon. Although this is true to some extent, there are some legal requirements to bear in mind. Depending on the payment method you use, and the quantity of crypto you are buying, photo ID is needed to verify your identity. Decentralized exchanges are another option, with smart contracts and atomic swaps used to facilitate peer-to-peer transfers and eliminate the need for a middleman.

It’s also crucial to research whether an exchange’s transaction fees are higher than the market average – and double check that an organization is reputable. Paying too much to acquire crypto is one thing, but losing your funds to a devastating hack is quite another. Even big brands such as Mt. Gox have fallen victim to cyberattacks in the past, so do bear in mind that convenience doesn’t necessarily absolve risk.

I can get other currencies from ATMs. Can I get Bitcoin?

Yes – there are now thousands of cash machines offering Bitcoin worldwide, and prospects for growth are promising.

As reported by Cointelegraph, the market for crypto ATMs is expected to soar to $144.5 million by 2023 – that’s compared with a meagre $16.3 million in 2018. Demand is likely to be spurred on by so-called “two way” machines which enable users to convert digital currencies to fiat, and vice versa.

However, coverage of crypto ATMs is not geographically universal – and if you’re not in a major city, your nearest machine could be many hundreds of miles away. You’re most likely to be able to pop to a machine if you’re based in North America, which is forecast to have the biggest market share in five years’ time. There’s also good news if you’re based in Germany and Japan, where crypto adoption is considerable.

That said, there are hurdles – especially from a regulation viewpoint. Last year, two Bitcoin ATMs in St Petersburg vanished inexplicably amid tensions with the authorities. Meanwhile, back in August, a Japanese security specialist uncovered malware designed to exploit vulnerabilities in these ATMs which would allow hackers to steal Bitcoin worth $6,750 without a cardholder’s knowledge.

Can’t I just get paid in cryptocurrencies to begin with?

Potentially in the future – but mainstream adoption seems premature right now.

Tax implications vary vastly depending on where you live, and the dramatic shifts in a cryptocurrency’s value can make employers and employees alike nervous. Statistics help to paint the mood: in Germany, just 6 percent of the public believes that it will be feasible to purchase a car using crypto in two years’ time – and indeed, a poll of 300 financial experts from major corporations found that most were skeptical that the likes of Bitcoin would even be used for buying a cup of coffee come 2020.

To summarize, as things stand right now, getting paid in crypto really is imaginative – but that’s not to say it isn’t happening, nor that there isn’t an appetite for it. A poll of 1,000 people by Sage in South Africa revealed 31 percent are happy to receive all or part of their salary in crypto – with men and millennials most likely to agree to it. Several companies have launched voluntary schemes enabling workers to join the crypto revolution, with one Australian outlet describing the payment method as “awesome” because they can pay international employees instantly without fees.

Do I always have to use cash to buy crypto?

New methods for purchasing cryptocurrencies are emerging all the time – including iTunes gift cards.

This could prove particularly useful if you were given one of these vouchers for your birthday or Christmas but would rather invest in cryptocurrency instead.

Usually, websites that enable you to complete these transactions operate on a peer-to-peer marketplace, where the would-be buyers of iTunes gift cards set out how much they would be willing to pay in Bitcoin. In some cases, these buyers may have a minimum amount of vouchers they’re prepared to purchase, along with a maximum. The exchange rates you’re offered can vary wildly – and it’s important to check whether or not a buyer is reputable before committing to a transaction.

Paxful, a platform which specializes in enabling customers to convert their gift cards into Bitcoin, claims it offers about 300 different payment methods for Bitcoin. Along with iTunes vouchers, purchases can be made with gift cards for an array of well-known brands including Banana Republic, Dunkin’ Donuts, Forever 21, Nintendo and Pizza Hut. The only hurdle is finding somebody who is willing to swap with you.

Can I use text messages and social networks to get paid?

Absolutely – but it’s worth proceeding with caution.

Given how it’s become popular to send and receive old-fashioned currencies on our phones, it’s somewhat inevitable that crypto would follow suit.

Back in August, the US software giant Intuit was awarded a patent for processing Bitcoin payments via SMS – a boon for businesses which focus on crypto. This could have a plethora of benefits, especially for the unbanked, who often rely on their phones for transactions. It’s fair to argue that such easy ways of sending or receiving Bitcoin are instrumental in achieving that mythical milestone: mainstream adoption.

Alas, every time the crypto world takes one step forward, it can feel like it takes two steps back. With new advancements come scams – and last year, it was reported that fraudsters were texting people to say that they have Bitcoins waiting for them in an account. Following the link in such messages puts victims at risk of losing their personal details and becoming a victim of identity theft. With any exotic method of acquiring crypto, it’s crucial to do your due diligence and rely on common sense to avoid being swindled.

Using secure messaging platforms can help – and indeed, it was recently announced that Litecoin holders can start checking their balance and transferring funds via Telegram.

Are there any methods which don’t come recommended?

Cash in the mail is ill advised for buying crypto unless you’re only dealing in small amounts.

There’s always the risk of it being lost or even stolen – and the people who are selling you crypto might not be all they are cracked up to be.

Generally, people who send cash in the mail are motivated by the prospect of greater levels of anonymity – and the ability to receive funds without having to go through ID checks.

Whatever the method, always check to see if there is an escrow service, as these can offer protections for buyers and sellers alike.


Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

OKEx Rebuffs Market Manipulation Claims Over Early Bitcoin Cash Futures Settlement

The world’s second-largest cryptocurrency exchange OKEx hit back at accusations it “manipulated markets” by adjusting Bitcoin Cash (BCH) futures settlements in a fresh statement Nov. 20 sent to Cointelegraph.

The exchange, which opted to deliver BCH futures early due to the coin’s contentious hard fork Nov. 15, subsequently saw a barrage of negative publicity over the decision, pundits complaining it had overstepped its remit in freely deciding when and how futures contracts would be settled.

In particular, a dedicated Medium post by an entity calling itself AMBER AI accused OKEx of “outright market manipulation and one of the more serious acts of fraud in the history of limit order book trading in the cryptocurrency markets.”

Published Nov. 19, the post provides a lengthy analysis of the futures settlement and further alleges OKEx contradicted its own small print several times during the process.

Traders lost “$24 million” due to the move, the post writes, continuing:

“The course of events surrounding the BCH hard fork are indicative of market manipulation, fraud and deceit.”

Responding, the OKEx exchange sent a circular to users in which it said the futures settlement change was “based on the consideration of market integrity and customer interests.”

“In the absence of evidence, Amber AI alleged us for trading against our own customers and manipulating the markets,” it wrote, adding:

“These are completely false allegations and the defamatory statements have caused serious damages to OKEx’s reputation.”

Markets continue to experience extreme turbulence almost a week after the fork, with BCH losing almost 50 percent of its value in the past 24 hours alone.

OKEx added it would consider legal action against AMBER AI for “interfering” in its operations.

Greek Supreme Court is Violating Alleged Bitcoin Launderer’s Rights, Lawyer Argues

The lawyer representing the alleged former operator of now-defunct crypto exchange BTC-e, Alexander Vinnik, has accused the Greek Supreme Court of “grossly violating” his rights, major Russian state-owned news agency TASS reported Nov. 19.

39-year old Russian national Vinnik, a.k.a “Mr. Bitcoin,” was indicted by U.S. authorities and detained in Greece on July 25, 2017 on criminal charges of fraud and laundering up to $4 billion in Bitcoin (BTC) via BTC-e.

Russia and France have since both sought the defendant’s extradition in regard to a further series of fraud allegations. When a Thessaloniki court ruled in support of Vinnik’s extradition to France this summer, he appealed against the decision at the Supreme Court.

As TASS reports, Vinnik’s lawyer Zoya Constantopoulous has this week accused the Supreme Court of failing to provide translations of court documents at her client’s request, in what she has argued is “a violation” of his rights:

“As of November 17, [Vinnick] did not receive an official translation of the documents of the French extradition request […] these documents were not translated into Russian, they have no seals or signatures.”

The lawyer further accused the Greek judiciary of discrimination on political/national grounds, claiming that the court would not have similarly treated “any Greek or EU citizen.”

Vinnik’s legal representatives reportedly consider that his extradition to France will result in his further extradition to the U.S. Russia’s Ministry of Foreign Affairs issued a comment this July accusing the Greek authorities of “continu[ing] to complicate relations with Russia,” and requesting that Russia’s extradition request be given priority over that of France.

TASS states that a decision over the conflicting extradition requests will likely be settled by the Greek Ministry of Justice, or the country’s leadership.

Following the closure of BTC-e in July 2017, the U.S. has been seeking a penalty of $110 million from BTC-e and another $12 million from Vinnik for his alleged role in the exchange’s anti-money-laundering (AML ) violations.

As he continues to publicly defend his innocence and rebuff that he was ever an operator of BTC-e, Vinnik has further been prompted to deny involvement in the 2011 Mt. Gox hack in response to crypto security experts’ claims he had a direct relationship to the incident.

A New York Times report this fall indicated that BTC-e is suspected of handling funds used by a Russian military intelligence unit, which U.S. investigators have accused of hacking Democrats’ emails ahead of the 2016 presidential elections.

Bank of Thailand Governor: Digital Currency Use Won’t Replace Cash for Three-Five Years

The governor of the Bank of Thailand (BoT) has said that it will take three to five years for countries to switch from using cash to using digital currencies. The bank governor’s comments were reported by the Thai News Agency (TNA), a subsidiary of the Thai state-owned public broadcaster, Nov. 17.  

The central bank’s governor, Dr. Veerathai Santiprabhob, stated that digital currency would not replace fiat currency right away “because of complication[s], a readiness of people and an efficiency of technology.”

Although the BoT has not issued a central bank-backed digital currency (CBDC) yet, the Thai central bank is “now testing the use of digital currency for settling payment among financial institutions,” according to the TNA. The article also states:

“The BoT hopes that full implementation of using digital currency among financial institutions would take place during the first quarter of 2019.”

Previously this month, the head of the International Monetary Fund (IMF) Christine Lagarde urged the international community to consider the possibilities of endorsing CBDCs, Cointelegraph reported Nov. 14.

Back in July, the Thai central bank’s Santiprabhob had already announced that BoT was reviewing blockchain applications for cross-border payments to “improve regional financial connectivity,” Cointelegraph wrote Jul. 14.

Trezor Urges Caution After Discovery of Hardware Wallet ‘One-For-One Copies’ On Sale

Cryptocurrency hardware wallet manufacturer Trezor issued a warning to users Nov. 19 after making what it called the “startling” discovery that rogue actors were creating and selling fake devices.

Trezor, which together with Ledger and KeepKey forms one of the oldest and best-known wallet manufacturers, said that an “unknown” third party was distributing “one-to-one copies” of its flagship Trezor One device.

“Trezor clones have been released over the years of our activity,” officials said, noting:

“However, in recent weeks, we have discovered something more startling. A one-to-one copy of Trezor One. In other words, a fake Trezor device, manufactured by a different, unknown vendor.”

The latest move to impersonate aspects of the cryptocurrency sphere, the fake appears not unlike the many social media heists offering fraudulent free tokens and endorsements under the name of other well-known figures from the industry.

Scammers have even targeted Initial Coin Offerings (ICO) with fake versions in order to steal funds from would-be contributors.

The Trezor One case involves subtle differences in packaging, Trezor says, confined to areas such as the hologram and barcode sticker.

Seeming to originate from China, the company wrote that users should exercise suspicion when purchasing devices over the Internet from third parties.

“Be very cautious when buying on other marketplaces, such as eBay, Taobao, AliExpress, unknown Amazon resellers or other places,” it added, stating:

“If you are not sure about the authenticity of the seller or the channel, always proceed with the official channels.”

Singapore's Central Bank Finalizes Regulatory Framework for Crypto Payment Services

The Monetary Authority of Singapore (MAS), the country’s central bank, has broadened its regulatory regime for payment providers to bring certain cryptocurrencies under its jurisdiction. The development was reported by English-language local broadsheet The Straits Times Nov. 19.

The new Payment Services Bill (PSB), submitted by MAS board member and education minister Ong Ye Kung before parliament, is set to replace two existing pieces of legislation, the Payment Systems (Oversight) Act (PS(O)A) and the Money-Changing and Remittance Businesses Act (MCRBA).

The new bill, which has passed through two public consultations since August 2016, has reportedly been drafted to better safeguard consumer funds, counter terrorism financing, and bolster cybersecurity. In the cryptocurrency space, it is expected to affect e-wallets and digital payment tokens such as GrabPay, Bitcoin (BTC), and Ethereum (ETH). Both PS(O)A and MCRBA will be repealed when the new, streamlined PSB comes into force at the end of 2019.

The MAS has clarified that PSB comprises two parallel frameworks, the first being a “designation regime” that enables the central bank to name and thereby bring payment systems it considers “crucial to financial stability” under its oversight. The second entails a mandatory licensing regime for payment service providers, who will be required to apply for one of three licenses based on the nature and scope of their activities.

The first license, for “money-changers,” regulates providers primarily for money laundering and terrorism financing risks; a more comprehensive “standard payment institution license” is available for entities that transact over $3 million per month, provided they hold a digital money float of no more than $5 million. A “major payment institution,” the most rigorously regulated tier of license, is available for larger service providers.

The central bank has given digital token payment service providers six months after the PSB comes into force to comply with the new regime; non-crypto payment providers will have up to twelve.

This October, MAS managing director Ravi Menon commented on the need to improve banking support for crypto-related businesses. While conceding that some “opaque” activities within the cryptocurrency space pose particular challenges, he hinted that financial institutions should be encouraged to adapt their existing practices to cooperate with the emerging sector.