Cryptocurrency

Blockchain Will Make Global Payments System Faster, Cheaper, Greener and Safer

Published

2 years ago

February 1, 2022

Blockchain is set to irreversibly shake up the global payments system – for the better, predicts the CEO of a global financial giant.

The prediction by Nigel Green of deVere Group, one of the world’s largest financial advisory, asset management and fintech organisations, comes amid growing adoption of cryptocurrencies like Bitcoin, and a flurry of global financial innovation as central banks around the world push to develop their own digital currencies (CBDCs).

The U.S. Federal Reserve, the world’s most influential central bank, has for the first time launched an in-depth discussion paper that will act as the basis of what will be a consequential debate about introducing a digital dollar.

But the U.S. is lagging behind economic rival China, which is already piloting a digital renminbi. The European Central Bank has also made significant progress in the move towards a digital euro, the Bank of England has invited comments on a recent discussion paper, Sweden has finalised a technical pilot, and ahead of the pack, last April, the Bahamas introduced the world’s first CBDC.

Nigel Green says: “Bitcoin and other cryptocurrencies are reaching the point of critical mass, the moment at which a new way of doing things crosses a threshold and takes hold.

“Most governments around the world have already realised that digital is the inevitable future of money.

“The move towards digital transactions had been taking place for years but has been accelerated since the start of the pandemic.

“For this reason, and because the likes of Bitcoin are out of their control, they’re in a race to launch digital currencies of their own, fully aware that digital currencies in our digital era simply make sense.”

He continues: “Clearly, there’s growing demand for digital assets from governments and their agencies, businesses, and institutional and retail investors.

“But, besides the existing demand, what will really drive the rise and rise of digital payments will be harnessing the power of blockchain – or distributed ledger technology – which will fuel it moving forwards.

“Recent research being carried out by the Bank of Estonia, amongst others, shows that ongoing developments of the already pioneering blockchain technology will empower a payment system that’s more powerful and faster than the card payment and instant payment systems currently used globally today.

“In addition, it was found that payments made with this tech used less energy than credit card payments by a factor of 1,400.”

Blockchain also provides major opportunities for cost-cutting and for enhanced security too – both for financial institutions and users.

“Major financial institutions, such as banks, could slash perhaps tens of billions of dollars each year using distributed ledger technology by decommissioning legacy systems and reducing operating costs,” says Nigel Green.

“For consumers, high global remittance costs (on average 6.3%, according to the World Bank) that exist because of complexities involved in routing and central intermediaries will be all but eliminated.”

On top of all this, arguably, the strongest advantage that blockchain offers institutions and consumers is against theft and fraud.

“The ability to track funds on a tamper-proof ledger is a powerful preventative security measure.”

Blockchain is still an emerging technology, and there are outstanding areas that need to be addressed, says the deVere boss, and it may take “five to 10 years to reach the ultimate maturity.”

However, he adds: “Due to the lightning pace of blockchain innovation and adoption across every sector, blockchain is set to irreversibly shake up the global payments system. It will be a snowball effect.”

He concludes: “Blockchain will support a payment system that’s faster, greener, cheaper and safer than the systems of today – and, as a result, it will be the main driver for the anticipated global surge in digital transactions.

“Blockchain’s seismic influence will change how we pay and how we do business forever.”

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Cryptocurrency

Binance Boss Behind Bars: CZ Sentenced to Four Months for Crypto Exchange Failures

Published

3 days ago

May 1, 2024

Samed Olukoya

Binance founder Changpeng Zhao, widely known as CZ, has been sentenced to four months in prison for his role in security failures that enabled cybercriminals and terrorist groups to exploit the Binance platform.

The verdict, delivered by US District Judge Richard Jones in Seattle, is the first time a chief executive officer of a major cryptocurrency exchange has been incarcerated for breaching banking secrecy laws.

The courtroom, packed with onlookers and CZ’s legal team, witnessed the billionaire entrepreneur, clad in a dark suit and light blue tie, receive his sentence stoically.

Despite fervent pleas from prosecutors for a three-year sentence to set a precedent in the crypto industry, Judge Jones opted for a shorter term.

In his statement, Judge Jones emphasized that no individual, regardless of wealth or status, is exempt from accountability under the law.

The case against CZ stemmed from a protracted investigation by the US Department of Justice, casting a long shadow over Binance, one of the world’s largest cryptocurrency exchanges, and its high-profile leader.

Prosecutors argued that CZ’s failure to implement adequate money laundering safeguards facilitated illicit transactions, enabling cybercriminals and even terrorist groups like Hamas to operate freely on the platform.

The sentencing also comes on the heels of similar crackdowns within the cryptocurrency space, including the recent conviction of Sam Bankman-Fried, a former crypto titan who received a 25-year prison sentence for defrauding FTX customers of billions of dollars.

CZ’s defense team, however, contended that he should be spared imprisonment due to his non-US citizenship, which they argued put him at heightened risk in a US detention facility.

Nevertheless, Judge Jones emphasized the gravity of CZ’s offenses, terming them “unprecedented” in scale and impact.

In a post-sentencing statement on social media, CZ expressed acceptance of his fate, vowing to “do his time” and focus on education and philanthropy upon his release.

Despite his impending incarceration, CZ affirmed his commitment to the cryptocurrency sector as a passive investor.

The implications of CZ’s sentencing extend beyond his personal fate, raising questions about regulatory oversight and accountability within the burgeoning crypto industry.

Federal prosecutor Kevin Mosley underscored the deliberate nature of CZ’s violations, arguing that they were not mere oversights but intentional breaches of US law.

As CZ prepares to serve his prison term at Seattle’s Federal Detention Center, SeaTac, the crypto community grapples with the repercussions of his downfall.

The episode serves as a stark reminder that, despite the decentralized ethos of cryptocurrencies, regulatory scrutiny and legal accountability remain paramount in an increasingly interconnected financial landscape.

Cryptocurrency

U.S. Prosecutors Recommend 36-Month Prison Term for Binance Founder Changpeng Zhao

Published

1 week ago

April 24, 2024

Samed Olukoya

In a significant development in the legal saga surrounding Binance, the world’s largest cryptocurrency exchange, U.S. prosecutors have recommended a 36-month prison term for its founder, Changpeng Zhao.

The recommendation follows Zhao’s guilty plea to violating laws against money laundering, a pivotal moment in the ongoing legal battle between Binance and U.S. authorities.

Zhao, commonly known as CZ, stepped down as Binance’s chief last November, simultaneously admitting to the violations alongside the exchange.

The firm agreed to a hefty penalty of $4.32 billion as part of the settlement with prosecutors.

According to court filings submitted to the U.S. district court for the western district of Washington, prosecutors argued that the magnitude of Zhao’s willful violation of U.S. law warranted an above-guidelines sentence.

While federal sentencing guidelines set a maximum term of 18 months in prison for Zhao, prosecutors emphasized the severity of the violations and their consequences in advocating for the extended sentence.

The legal scrutiny surrounding Binance stems from allegations that the exchange failed to report over 100,000 suspicious transactions involving designated terrorist groups such as Hamas, al Qaeda, and ISIS.

Furthermore, prosecutors alleged that Binance’s platform facilitated the sale of child sexual abuse materials and served as a recipient of a significant portion of ransomware proceeds.

As part of the settlement, Zhao agreed to pay a $50 million fine and disengage from any involvement with Binance, the platform he founded in 2017.

The penalties imposed on Binance included a staggering $1.81 billion criminal fine and restitution of $2.51 billion.

The recommendation for a 36-month prison term underscores the seriousness with which U.S. authorities are addressing violations within the cryptocurrency industry.

The outcome of Zhao’s sentencing, scheduled for April 30 in Seattle, will likely have far-reaching implications for both Binance and the broader cryptocurrency ecosystem.

As regulatory scrutiny intensifies, stakeholders across the industry are closely monitoring developments to gauge their impact on the future of cryptocurrency exchanges and their founders.

Cryptocurrency

SEC Philippines Urges Removal of Binance App from Google Play Store and Apple App Store

Published

1 week ago

April 23, 2024

Samed Olukoya

The Securities and Exchange Commission (SEC) of the Philippines has intensified its regulatory oversight over cryptocurrency trading platforms, particularly targeting Binance, one of the world’s largest digital asset exchanges.

In a bold move, the SEC Philippines has formally requested the removal of the Binance app from both Google Play Store and Apple App Store.

The action, disclosed through letters addressed to Google and Apple on April 19, 2024, underscores the SEC’s concerns regarding unauthorized investment solicitation activities facilitated by the Binance platform.

SEC Chairperson Emilio B. Aquino emphasized that allowing access to the Binance app and website poses a significant threat to the security of funds belonging to Filipino investors.

This move represents a significant escalation in the Philippines’ regulatory efforts to safeguard investors and maintain financial stability within the cryptocurrency market.

The SEC’s decision to target Binance reflects growing concerns globally regarding the lack of oversight and potential risks associated with digital asset trading platforms.

Binance, known for its extensive range of cryptocurrency trading services, has faced increasing scrutiny from regulators worldwide.

While the company has made efforts to comply with regulatory requirements in various jurisdictions, concerns persist regarding the adequacy of investor protection measures and compliance protocols.

The SEC Philippines’ call for the removal of the Binance app from major app stores highlights the regulator’s determination to enforce strict oversight and uphold investor confidence in the country’s financial markets.

The move is likely to have implications not only for Binance but also for other cryptocurrency exchanges operating in the Philippines and beyond.

Investors and industry stakeholders are closely monitoring developments, awaiting further updates on the SEC’s regulatory actions and their potential impact on the cryptocurrency ecosystem in the Philippines.

As regulatory scrutiny intensifies, market participants are urged to exercise caution and stay informed about evolving regulatory requirements and compliance obligations in the digital asset space.