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Zebpay Exchange Halts Fiat Ops as India Crypto Banking Ban Deadline Looms

One of India’s largest exchanges Zebpay announced it was freezing Indian rupee deposits and withdrawals July 4, a day before a controversial bank ban on cryptocurrency businesses comes into effect.

In a warning statement, Zebpay said current events were “beyond its control,” having previously warned users that rupee deposits and withdrawals “could” stop if the ruling from the Reserve Bank of India (RBI) went ahead.

“INR deposits and withdrawals have been paused in the Zebpay app until banks allow us again,” an update to the original warning reads.

On Tuesday, India’s Supreme Court upheld the ban deadline, declining to grant an extended grace period to cryptocurrency businesses which rely on banking connections to serve customers.

The decision means the July 5 deadline still holds, while the Supreme Court confirmed it will hear a petition against the ban July 20.

Since the plan was formally issued April 6, some businesses have sought alternative means of providing fiat support, fellow exchange WazirX revealing it would transform into a P2P platform so that no in-house conversion between crypto and fiat would be necessary.

“If banking is something the exchanges are not allowed to do, then the solution is something that direct banking doesn’t come in,” CEO Nischal Shetty told local news outlet Economic Times.

Zebpay had previously struck a confident tone in the face of the ongoing uncertainty surrounding cryptocurrency in India.

During an interview with Cointelegraph in February, co-founder Sandeep Goenka said he “welcomed” government proposals to crack down on illegal activity, calling for a joint effort to stabilize the local economy.

“We encourage the government to work with our members, as we are committed to detect, report, and eliminate suspicious transactions in pretty much the same way as other institutions do,” he commented.

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Bloomberg Terminal Lists Crypto Market Index From World’s Third Largest Exchange Huobi

Bloomberg Terminal, a paid financial data monitoring service, will now list crypto exchange Huobi’s Cryptocurrency Index, according to a press release shared with Cointelegraph today, June 21.

Bloomberg Terminal will also list prices for nine crypto trading pairs, denominated in Tether (USDT), including Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), Ethereum Classic (ETC), Ripple (XRP), Dash, EOS, and ZCash.

The Huobi 10 Index, designed by the Huobi Group, is calculated using asset classification and a weighted average method to track the performance of the top 10 traded digital assets on Huobi’s exchange.

The press release notes that Bloomberg Terminal’s addition of a crypto index is a mark of bringing cryptocurrencies into the mainstream financial marketplace. Cheng Huixin, Associate to CEO of Huobi Group, stated in the press release that the “index reflects the overall trend of the market, index investments can diversify investment risks and are a mature and rational investment method.

Huobi is currently the third largest exchange in terms of daily trading volume on CoinMarketCap, seeing about $517 mln in trades over the past 24 hours to press time.

In May, Bloomberg had partnered with Mike Novogratz’s crypto merchant bank Galaxy Digital Management in order to release the Bloomberg Galaxy Crypto Index (BGCI), which tracks the top ten currencies from the “largest, most liquid portion of the cryptocurrency market.”

At the beginning of June, Huobi announced the creation of a cryptocurrency trading platform in the U.S. via a newly created San Francisco-based company, HBUS. Earlier in the month, the exchange had also reported on launching its own public blockchain, the Huobi Chain Project (HCP), that will be bankrolled with a $100 million development fund.

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Bloomberg: Crypto, Fiat Trading App Robinhood ‘in Talks’ to Obtain US Banking Licence

Stock and crypto trading app Robinhood plans to offer banking services to its 4 mln users, Bloomberg reported June 20, citing anonymous sources.

Robinhood, which in February began allowing zero-fee cryptocurrency trading through its Robinhood Crypto tool, is currently in “constructive” talks with the U.S. Office of the Comptroller of the Currency (OCC) to position itself as a banking services provider.

According to “people familiar with the matter,” Robinhood is going after features such as savings accounts, beating out competition from traditional banks through improved interest rates and an all-in-one financial portal.

The move comes a month after the company announced it had raised $363 mln in funding to expand Robinhood Crypto to the entire U.S. market.

At the time, Robinhood claimed to be “the fastest-growing brokerage ever,” reaching a valuation of $5.6 bln.

Meanwhile, competition for banking customers is increasing in the cryptocurrency-oriented sector.

Goldman Sachs-backed Circle, which in February acquired cryptocurrency exchange Poloniex, revealed it was also pursuing a banking licence with the OCC earlier this month.

Coinbase, the largest U.S. crypto exchange and wallet provider, also began talks with the OCC regarding obtaining a federal banking licence and its “business model,” Cointelegraph reported in May.

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Japan: 2 Bitcoin Exchanges Choose Shutdown Over Regulatory Compliance

Japan’s financial services regulator continues to reshape the country’s cryptocurrency exchange industry as two operators announce they are closing, local source Nikkei states March 28.

Two Japanese exchanges, Mr. Exchange and Tokyo GateWay, will cease trading once they have returned customer funds, according to Nikkei.

The news comes as financial regulator, the Financial Services Authority (FSA) challenges exchanges to prove their security credentials in the wake of Coincheck’s $530 mln hack in January.

As a result of FSA inspections and requests, several operators have opted to stop servicing the Japanese market, Cointelegraph previously reported.

Prior to their closure, Mr. Exchange and Tokyo GateWay were both in the process of securing a license as part of a scheme introduced by Japan in April 2017.

In a blog post March 29, the former confirmed it had withdrawn its application:

“While this is a regrettable result, at present we have determined that it is difficult to be in a state of readiness to be able to respond to changes in the virtual currency landscape, so we decided to withdraw the application for a virtual currency exchange business.”

Tokyo GateWay’s website is currently offline, with no official correspondence available to confirm the Nikkei report.

The FSA meanwhile continues to drip-feed new market players to Japanese consumers, with 16 exchanges obtaining a license since the scheme opened.

This week, internet giant Yahoo! announced it would seek to launch its own operation by April 2019.

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Unconfirmed: Circle In Talks To Acquire Crypto Exchange Poloniex

According to an exclusive report on Blockchain technology blog Modern Consensus, Circle, a multi-currency money-sending app, is reportedly in the works to acquire Poloniex, a major US-based cryptocurrency exchange.

Modern Consensus cited two unnamed sources that had information about the potential deal.

However, when asked about the reported acquisition of Poloniex, Raj Date, a board member of Circle, told Modern Consensus:

“I can’t comment on anything like that. I’m actually in Europe right now. Thanks for the reach out.”

Ari Paul, the CIO at digital currency hedge fund BlockTower Capital, denied the legitimacy of any deal on Twitter, citing his own source at Circle and calling the Modern Consensus article “fake news”:

Modern Consensus is a blog founded by Ken Kurson, former editor-in-chief at the New York Observer, that covers technology news in the cryptocurrency and Blockchain spheres.

Another twitter user responded to Paul casting doubt on his alleged Circle source, given that Kurson put his reputation at stake in publishing the news:

Kurson cited one of the sources, who he referred to as “highly placed”, with apparent access to the acquisition discussions as saying:

“Circle and Poloniex agreed to terms and Circle has already approached the regulators. The regulators came back with a list of KYC demands [Know Your Customer] and Circle has agreed to meet all the conditions.”

Both Circle and Poloniex did not respond to Cointelegraph’s requests for comments on the pending deal by press time.

Circle, which received $50 mln from Goldman Sachs in a funding round in 2015, contains Circle Pay for fiat transfers, Circle Trade as a liquidity provider of cryptocurrencies, and soon will add Circle Invest, an app allowing retail customers to invest in crypto markets.

Poloniex is currently the 14th largest crypto exchange by 24-hour volume on CoinMarketCap, trading a total of almost $300 million on the day to press time. The exchange allows users to trade in 68 different coins, a huge number as compared to Coinbase’s popular crypto exchange platform GDAX, which offers only four, but is in 7th place by trading volume. The Poloniex exchange faced problems this year with incorrect user balances and a very slow withdrawal waiting period.

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South Korea Ends Anonymous Cryptocurrency Trading, Exchanges to Finally Add New Users

As of Jan. 30, South Korean cryptocurrency traders will no longer be able to trade cryptocurrencies like Bitcoin and Ethereum anonymously.

Last week, major cryptocurrency exchanges in the local market including Korbit and Bithumb announced that starting Jan. 30, anonymous traders will be prohibited from investing in the market. Beginning today, investors are required to undergo a rigorous verification process to invest in the market.

The Korbit team said in a statement obtained by Cointelegraph:

“Non-Korean nationals, both resident and non-resident, will not be allowed to deposit KRW at any domestic cryptocurrency exchanges when the new KRW deposit method is implemented. In order to comply with the identification and anti-money laundering regulations being enforced by the government, the current KRW deposit method will be terminated by the end of January 2018.”

Kookmin Bank, the country’s largest bank, has also stopped providing virtual bank accounts to cryptocurrency exchanges. In South Korea, trading platforms provide each trader with a virtual bank account with which traders can use to withdraw and deposit Korean won without using actual bank accounts. From the virtual bank account, traders can then withdraw to their real bank accounts.

Instead, Shinhan Bank, South Korea’s second-biggest bank, along with five more financial service providers have started to support cryptocurrency businesses and investors. Existing traders are required by local exchanges to use bank accounts from Shinhan Bank and other banks in the country that support cryptocurrency investment.

In early December of last year, South Korea’s Justice Minister Park Sang-ki was heavily criticized for his premature statement on a non-existent cryptocurrency trading ban bill. Evidently, since then, the South Korean government has worked towards regulating the market, ensuring that investors are protected and businesses are compliant with regulations.

It is optimistic that the South Korean government has taken the approach of regulating the market rather than banning cryptocurrency trading, as minister Park suggested in December. But, experts fear that the South Korean government is imposing excessive regulations onto the local market that may hinder developments within the cryptocurrency sector.

Earlier this month, Yoon Seok-Hyun, a professor at South Korea’s most prestigious university in Seoul National University, stated that the government is rushing the implementation of strict regulations that could negatively affect businesses and investors in the sector. Yoo noted:

“The false and premature cryptocurrency trading ban proposal introduced by the country’s Justice Minister was rushed and unnecessary. The government must prepare for public Blockchains to be used as innovative platforms after excessive speculation in the cryptocurrency market decreases. It is important for the government to regulate the market properly in an uncertain sector like the cryptocurrency market.”

Taxation policy

Most investors outside of the South Korean market are not aware of the fact that cryptocurrency exchanges will soon be asked to send details of any transaction that goes above a certain amount to the South Korean tax authorities.

Holding onto cryptocurrencies as savings does not leave investors subject to taxes. But, selling cryptocurrencies after recording earnings from the investment can be subject to capital gain tax. Local tax authorities have requested South Korean exchanges to implement a system that autonomously transfer transaction details of users trading large amounts for tax investigation.

Conclusively, the approach of the South Korean government is optimistic given that it has moved on from banning cryptocurrency trading altogether. But, moving forward, it will be difficult for local investors to trade large amounts of cryptocurrencies freely.

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Breaking: Russia Rejects Cryptocurrency as Authorities Block Access to Exchanges

Russia’s central bank is leading efforts to shut Internet access to cryptocurrency exchange websites.

As local news outlet RBC reports Tuesday, Bank of Russia is working with the country’s general prosecutor to block all exchanges offering Russians the opportunity to buy and sell cryptocurrency.

“It’s obvious that when a pyramid (scheme) grows, interest in this pyramid hots up with the high rate of return,” first deputy of the central bank, Sergey Shvetsov, said during an international finance forum in Moscow.

Echoing previous comments, Shvetsov added that the pyramid description is a result of “eyeing Bitcoin’s price dynamics over the past two years.”

The move is the most sweeping yet from Russian authorities regarding cryptocurrency access for citizens, and echoes the less coordinated bans of various industry resources common until last year.

The debate as to how to handle cryptocurrency has raged throughout 2017 in Russia, with various high-profile entities giving conflicting views as to what the future will hold in terms of regulation.

This regulation is ostensibly due to go public by the end of the year.

In the meantime, not just private investors, but also the business sector faces “too high a risk” using cryptocurrency, Shvetsov said.

Financial instruments based on cryptocurrency are “impossible to support,” he continued, adding measures would be taken to “restrict” the ability of the Russian domestic market to interact with them.