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EY: Blockchain Not Understood by Almost 70% of Firms in Asia-Pacific

Over two-thirds of enterprises in the Asia-Pacific region lack a solid understanding of blockchain tech and how to apply it, a new EY poll reveals.

Over two-thirds of enterprises in the Asia-Pacific region lack a solid understanding of blockchain tech and how to apply it, a new Ernst & Young (EY) poll reveals.

The Business Times of Singapore reports on July 16 that the “Big Four” auditor consultancy firm conducted its poll during a live blockchain webcast with 576 attendees from in Asia-Pacific, 13.7% of whom were from Singapore.

Noting that 68% — over two-thirds — of polled attendees responded by admitting that they lack the knowledge and sufficient training to implement blockchain and its applications, EY remarked that this lack in education represents the greatest barrier for boards and executives to proceed with adopting blockchain solutions.

Furthermore, 66% of respondents voiced their belief that they would need a firmer understanding of the possibilities, risks and benefits of blockchain before they could apply it within their organizations. 

The Business Times cites Adam Gerrard — partner at EY LLP, and EY Asia-Pacific Assurance blockchain leader — who noted:

“Trust is a key factor and current barrier for companies in Asia-Pacific. Understanding and education is required to build trust and confidence with aspects of a business.” 

The poll further revealed that 46% of respondents cited the trustless nature of blockchain systems and the fact that they don’t need a central authority as being the so-dubbed myth they have most often encountered in regard to blockchain.

Gerrard remarked that this principle of trustless systems is not so much to be regarded as a myth, but remains poorly understood in the business sector. 

The second most prevalent quasi-myth that circulates is the unhackable or immutable nature of blockchain architectures, respondents revealed, which Jimmy Ong — partner at EY Advisory and also an EY Asia-Pacific blockchain leader — similarly noted was misunderstood by most enterprises.

While the blockchain ledger underlying applications may indeed be immutable, Ong noted, the applications built on its basis may not always prove to be as resilient.

As previously reported, EY has this year rolled out a range of solutions largely aimed at making public blockchains more secure and scalable for enterprises — including analytics tools, smart contract security services and even — with a slightly different focus — tax accounting resources for blockchain-based assets.

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Euroclear, EIB, Santander and EY to Pursue Blockchain Pilot for ECP Settlement

One of the world’s largest securities depositories says it will push forward with building the pilot blockchain-based platform.

Euroclear, one of the world’s largest securities depositories, says it will push forward with building a pilot blockchain-based platform for the issuance and settlement of European commercial paper (ECP). The news was reported by EuroClear on June 19.

Euroclear settled €791 trillion ($885.48 trillion) in securities transactions and held an average of €28.8 trillion ($32.24 trillion) in client assets in 2018, according to results published this March.

The financial services titan has today revealed that it successfully completed a proof-of-value study for an ECP-focused blockchain platform together with the European Investment Bank, Spain’s Santander and “Big Four” auditor EY.

The blockchain platform will reportedly serve end-to-end for issuing and settling ECPs — unsecured short-term debt instruments issued by banks or corporations, which represent a $1.2 trillion market.

The press release notes that “based on the initiative’s success, Euroclear intends to move on to pilot phase soon.”

A disintermediated blockchain platform would provide time efficiencies by replacing cumbersome bilateral processing between market participants with a consolidated system, according to the press release. Euroclear has reportedly further outlined that:

“Other key benefits of this blockchain solution would be full transparency and traceability of ECP issuance related activities […] making ECP same day issuance a new market standard.”

As reported, German financial services company Commerzbank, French corporate and investment bank Natixis, and Dutch financial services firm Rabobank jointly completed a live commercial paper transaction using the Euro Debt Solution application developed by enterprise blockchain consortium R3’s for its Corda platform.

Back in 2017, Eurcolear and blockchain trust company Paxos abruptly ended their joint cooperation on developing a settlement service utilizing blockchain technology for the London bullion market — despite having completed a series of successful tests.

Paxos has since released its own Ethereum (ETH) blockchain-based stablecoin, dubbed Paxos Standard Token (PAX).

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Ernst & Young Exec: Most Ethereum Decentralized Apps Not Used Productively

The head of innovation at Big Four audit firm Ernst & Young argued that blockchain disruptors should “go back to first principles.”

83% of decentralized applications (DApps) on the Ethereum network are “not in the most productive uses,” according to Ernst & Young’s (EY) head of innovation.

Paul Brody, Global Innovation Leader for blockchain at Big Four audit firm EY, spoke about developments in the blockchain and digital asset industries during a Fintech Forum hosted by the United States’ Securities and Exchange Commission’s (SEC) on May 31.

The event was organized by the SEC’s Strategic Hub for Innovation and Financial Technology (Finhub, which) launched in October 2018 to facilitate the commission’s engagement in the fintech space, including distributed ledger technology (DLT) and digital assets, among others.

During the first panel of the forum, called “Capital Formation Considerations,” Brody outlined a major issue regarding the implementation of blockchain technology.

Brody said that, in order to make blockchain technology successful, global crypto disruptors should “go back to first principles,” to understand how this technology should be applied to bring solutions, as opposed to just “money chasing” in the digital environment.

As such, Brody pointed out that the purpose of capital markets is to take money from investors and to put it into productive use. Brody hinted that crypto space is “not doing very well” in this regard, claiming that the most part of DApps on the Ethereum blockchain are “maybe not in the most productive uses.”

Brody cited data from the Q1 2019 report by blockchain analytics firm DApp.com. The expert noted that 14% of Ethereum-based DApps are used at crypto exchanges, while most of them are used for gambling and gaming, accounting for 44% and 13% of DApps, respectively.

Brody argued that the technology implementations should focus on more productive applications like distributed computing, fractional real estate, new business models, and fractional infrastructure instead. According to the expert, such a strategy will contribute to a “tremendous lasting legacy that is positive.”

In late 2018, Brody compared the initial coin offering industry with late 1990s’ internet startups, claiming that the space looked “worse than we thought.” Earlier today, Ernst & Young open sourced the code for its Ethereum private transactions solution called Nightfall.

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EY Launches Beta Test Version of Smart Contract Analyzer for Ethereum Blockchain

Big Four auditing firm EY has launched a private beta test version of its new Smart Contract Analyzer tool for the public Ethereum blockchain.

Big Four auditing firm Ernst & Young (EY) has launched a private beta test version of its new Smart Contract Analyzer tool for the public Ethereum (ETH) blockchain. The news was announced in an EY press release on April 16.

The tool is described as a testing and security service that will allow companies and individual investors to assess smart contracts and associated tokens for known security risks.

Developed by the EY Blockchain Security Lab in Israel, the tool works for tokens and contracts either prior to their launch or after they have gone live on the public blockchain.

EY states it has created a list of over 250 standard tests, which cover aspects such as potential malware and coding errors, as well as verifying whether tokens conform to accepted industry standards.

The auditor giant indicates that its assessment parameters target both security vulnerabilities as well as efficiency shortcomings. The press release also notes that the service will support the development of customized testing and ongoing monitoring of contracts and token as they undergo changes.

Paul Brody, EY Global Innovation Leader for blockchain, has stated that as adoption rises, blockchain-based investment systems should be provided with the same audit tools as enterprise computing systems are more broadly. He added:

“It’s not enough to test static code, we need to see how contracts and tokens perform under real transaction conditions. The simulator allows many different transaction scenarios to be tested using the full Ethereum blockchain, without changing its state. This includes all kinds of standard activities like code updates, lock-up rules and transfer restrictions.”

EY states that the smart contract testing service will be integrated later this year into the new version of its Blockchain Analyzer.

As Cointelegraph reported yesterday, the latter is a blockchain analytics, tax and monitoring platform that has just undergone major upgrades. Also yesterday, EY released a zero knowledge proof protocol, which aims to facilitate the adoption of secure, private transactions over public blockchains.

This March, cybersecurity solutions firm Kudelski Security entered into a strategic partnership with smart contracts auditor Hosho to cooperate on providing better security solutions to firms and public sector organizations that use blockchain.

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Major Auditing Firm Ernst & Young Releases Updates to Two Blockchain-Related Products

Ernst & Young has released a new version of its blockchain analyzer and zero knowledge proof protocol.

Big Four auditing firm Ernst & Young (EY) has released two new blockchain developments, a new version of its Blockchain Analyzer and a zero knowledge proof protocol. The company revealed the products in two separate press releases on April 16.

EY has launched the second generation of its analytics tool EY Blockchain Analyzer. While the first generation of the product was available to only EY audit teams facilitating gathering companies’ entire transaction data from multiple blockchain ledgers, the upgrade made the analyzer accessible for EY teams and non-audit customers as a business application.

Paul Brody, EY Global Innovation Leader for blockchain, said that the company intends to build a platform solution that can be deployed for various purposes, including audit, tax and transaction monitoring. The new version of the analyzer will support tax calculation for crypto assets from the Andy Crypto-Asset Accounting and Tax (AndyCAAT) tool that automatically calculates capital gains and losses on transactions in compliance with United States tax law.

As for EY’s zero knowledge proof protocol, the company aims to facilitate the adoption of secure, private transactions over public blockchains. Paul Brody, EY Global Innovation Leader, Blockchain, said that “making public blockchains secure and scalable is a priority for EY. The fastest way to spread this privacy-enhancing technology was to make it public.”

“The main component allows for secure, private transfers and payments on the public Ethereum network. This supports fungible token payments compatible with the ERC-20 standard and unique asset transfers compatible with the ERC-721 standard.  The ERC standards are publicly accepted open standards for tokens on the Ethereum blockchain,” the release explains.

EY also notes that since the launch of the initial prototype in 2018, the company has managed to  significantly reduce transaction processing costs by more than 90%. Currently, the software code is reportedly undergoing final reviews and is scheduled to be launched into the public domain in the next four to six weeks.

In March, EY launched a tool called EY Crypto-Asset Accounting and Tax (CAAT) designed for accounting and preparing taxes on cryptocurrency holdings. The product can reportedly get information about cryptocurrency transactions from “virtually all” major exchanges, consolidate data from various sources, and automatically produce reports, including cryptocurrency-related U.S. Internal Revenue Service tax returns.

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Ernst & Young Argues That Crypto Exchange QuadrigaCX Should Be Placed in Bankruptcy

Ernst & Young has argued that the now-shuttered Canadian crypto exchange QuadrigaCX should be placed in bankruptcy rather than undergo restructuring.

Big Four audit firm Ernst & Young (EY) has argued that the now-shuttered Canadian crypto exchange QuadrigaCX should be placed in bankruptcy instead of being restructured as part of ongoing creditor protection proceedings. EY proposed the course of action in its “Fourth Report of the Monitor” filed with the Supreme Court of Nova Scotia on April 1.

As previously reported, QuadrigaCX reported it had lost access to its cold wallet holdings following the death of its founder, Gerald Cotten, in December 2018 — Cotten having ostensibly been the sole person with access to the wallets’ corresponding keys.

With the reportedly inaccessible crypto accounting for the vast majority of the exchange’s assets, QuadrigaCX owes over $198.4 million to an estimated 115,000 users. QuadrigaCX filed for creditor protection in early February, appointing EY as a monitor to the proceedings.

In the auditor’s fourth report as Monitor for the case, EY’s legal team argues that the ongoing restructuring process for QuadrigaCX under the Companies’ Creditors Arrangement Act (CCAA) should shift to an alternative process under the Bankruptcy and Insolvency Act (BIA). The authors propose:

“Given the present circumstances, the possibility that Quadriga will restructure and emerge from CCAA protection appears remote. The ongoing investigation to locate and recover assets for distribution to creditors with the intent of optimizing recoveries for the Applicants’ stakeholders can be efficiently administered in a proceeding under the BIA.”

The benefits of shifting to proceedings under the BIA, the report argues, include the fact that bankruptcy “would allow for the potential sale of assets, including but not limited to Quadriga’s operating platform,” as well as streamlining administrative burdens and cutting procedural costs.

Moreover, the report argues that transitioning to BIA would provide EY with “enhanced investigative powers” in its prospective role as trustee-in-bankruptcy for the exchange. The trustee, appointed for Quadriga CX and Quadriga Coin Exchange, would also ostensibly address governance issues by removing the need for a chief restructuring officer or directors.

BIA proceedings would remove the onus of formal updates to the court — as is currently required under CCAA — with the trustee prospectively providing reports directly to affected users during the bankruptcy.

EY’s report further explains its ongoing investigations into QuadrigaCX’s missing funds, with reference to several third-party payment processors currently holding fiat currencies on Quadriga’s behalf.

EY has also filed an Asset Preservation Order request — that would involve all assets held by the Cotten estate his spouse, and others — due to its concern that “the corporate and personal boundaries between Quadriga and its founder Gerald Cotten were not formally maintained.”

As previously reported, EY’s last report was published this March, revealing details of the auditor’s ongoing investigations into wallets and transactions associated with the exchange.

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PwC is Top Recruiter for Blockchain-Related Jobs on Indeed, Big 4 Auditing Firms Follow

Big four auditing firm PricewaterhouseCoopers (PwC) is the top recruiter for blockchain-related jobs on recruitment platform Indeed.

Big four auditing firm PricewaterhouseCoopers (PwC) is the top recruiter for blockchain-related jobs on recruitment platform Indeed, search results showed at press time on March 30.

At press time, PwC is responsible for 40 blockchain-related job offers on the platform. Other big four auditing firms are apparently recruiting professionals in this niche on the platform: more precisely, Ernst & Young posted 17 such announcements, while Deloitte posted 10.

This leaves Klynveld Peat Marwick Goerdeler (KPMG) as the only big four auditing firm not recruiting blockchain professionals on the platform. Tech giants IBM and Oracle posted ten job offers related to blockchain as well, while global management, consulting and professional services firm Accenture posted 11.

This last company, Accenture, is also already a user of distributed technology. In November last year, Accenture deployed a distributed ledger technology platform created to manage and track software licenses.

As Cointelegraph recently reported, a blockchain and financial partner at PwC France declared that central banks should leave issuance of digital currencies to corporations such as Facebook and JPMorgan.

In February, news broke that Accenture is working with major global firms including Mastercard to introduce a blockchain-based circular supply chain.

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US Leads in Blockchain-Related Job Offerings Globally: Report

A recent report from TNW shows that the U.S. leads the world in blockchain-related vacancies.

The United States is the world’s leader in blockchain-related jobs, according to a research by The NextWeb (TNW) published on March 8.

To prepare the report, TNW gathered information from job and recruiting site Glassdoor, finding all the job offerings that had the term “blockchain” in the job listing in countries around the world.

The results reportedly showed that the U.S. is leading the world in terms of blockchain-related jobs, having about half, or 2,616, of a total of 5,711 blockchain jobs listed on Glassdoor globally. The U.S. is followed by the United Kingdom, with 1,015 blockchain-related job ads, while India has taken the third place, with 257 vacancies.

Among the most common jobs posted on the site, “Blockchain Engineer” takes the lead. Such positions as “Senior Software Engineer” and “Blockchain Developer” are the second and third most popular job titles, respectively.

TNW also made a list of companies offering blockchain-related vacancies, wherein tech giant IBM reportedly offers the greatest number of blockchain jobs, and is followed by Big Four accounting firm Ernst & Young and software company Oracle.

In the top 10 companies, only three are reportedly related to digital currencies, which are Foris Limited, Crypto.com, and Wirex. Payment startup Ripple is on the 17th line, and blockchain software tech company ConsenSys is the 13th.

In February, recruitment company Hired released a report showing that the global demand for blockchain engineers is up by 517 percent year-over-year. The second-fastest growing software engineering role is security engineer, with 132 percent growth, and third is embedded engineer, up 76 percent. The blockchain engineer role also consistently stayed among the top-three most-paid software engineering jobs in the various cities covered in the report.

That same month, experts and industry players said that the adoption of blockchain technology is still in its early stages at the annual meeting of The Wall Street Journal CIO Network. Although enterprise blockchain technology has found its practical use, its new applications are not large scale, according to Christine Moy, executive director and head of the blockchain center of excellence at JPMorgan Chase.

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Widow of QuadrigaCX Founder Seeks Compensation for Creditor Protection Court Costs

Jennifer Robertson is seeking $225,000 in repayment for costs associated with QuadrigaCX’s creditor protection proceedings.

The widow of the founder of now-defunct cryptocurrency exchange QuadrigaCX has asked the court for $225,000 in compensation for legal costs, Bloomberg reports on March 4.

Jennifer Robertson, the wife of late QuadrigaCX founder Gerry Cotten, is seeking repayment for financing used to help the crypto exchange acquire court-approved protection from creditors. After $145 million in crypto assets went missing following Cotten’s death, Robertson provided interim financing for legal proceedings.

According to Bloomberg, Robertson paid CA$300,000 (~$225,000), which covered Big Four audit firm Ernst & Young’s (EY) appointment as a monitor to the legal proceedings, in addition to fees associated  with filing under Companies’ Creditors Arrangement Act (CCAA) and appointing new directors. Currently, QuadrigaCX is reportedly overseen by Robertson and her step-father, Tom Beazley, as directors.

While the issue of repaying Robertson was reportedly discussed in court, the law firm representing QuadrigaCX’s affected clients, Cox & Palmer, took issue with the repayment. In a letter filed directly to the court, the firm argued that repayment should not be granted until EY has reviewed asset and transaction information from Cotten’s estate. Cox & Palmer states:

“In our submissions, the repayment contemplated by the cash flow is inappropriate until such time as the Monitor has reviewed the requested information and satisfied itself as to the source of funds used to fund the CCAA Proceeding.”

According to the Toronto Star, Supreme Court Justice Michael Wood has extended the proceedings for 45 days until April 23, and has approved the appointment of a chief restructuring officer to the exchange. He also directed the court monitor, Ernst & Young, to assure that fees for professional services will not be “out of control.” Any decision on repayments to Robertson was also deferred.

Last week, Ernst & Young found that QuadrigaCX’s cold wallets have been empty and unused since April 2018. The firm also discovered several user accounts that “may have been created outside the normal process by Quadriga” and that “[i]t appears that the Identified Accounts were created under various aliases.”

Recently, crypto research and consulting platform ZeroNonCense published a report claiming that QuadrigaCX stored a significant quantity of Ethereum (ETH) in other crypto exchanges, such as Kraken, Bitfinex and Poloniex.