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Azerbaijan Government Partners With IBM on Blockchain Customs Deal

IBM is expanding its partnership work with Azerbaijan’s government to bring blockchain technology to customs procedures, Central Asian-focused Trend News Agency reported on June 12.

Following a reported deal with the country’s central bank in October 2018 — which should see blockchain deployed in various areas over a five-year period — IBM will now use the technology to target cargo transportation.

The news came from Azerbaijan’s State Customs Committee, the chairman of which, Safar Mehdiyev, spoke about the plans at a press conference during the ongoing IT/TI Conference and Exhibition of the World Customs Organization.

“It will be possible to obtain the necessary information from the database online, without outside interference,” he explained. Mehdiyev added:

“It will be useful for both entrepreneurs and customs authorities, as it will improve the quality of customs services provided.”

Blockchain’s potential in customs procedures has long been a source of interest for governments worldwide, including the United States, which last August launched a pilot scheme with the tech of its own.

Baku, meanwhile, wants to further use the new tool beyond its borders, with Mehdiyev adding there were plans involving nearby Moldova and Ukraine, along with neighboring Georgia.

“In this direction, we are implementing a project with Ukraine with the support of Georgia and Moldova,” Trend quoted him as adding.

Another Azeribaijani government organ in the form of the justice ministry has also expressed interest in blockchain for its own processes, Cointelegraph reported late last year.

Legal & General Partners With Amazon to Use Blockchain for Pension Deals

Online retail giant Amazon has partnered with United Kingdom-based insurance agency Legal & General to create a blockchain system for managing corporate pension deals, according to a report by Reuters on June 11.

Legal & General will reportedly make use of the Amazon Managed Blockchain for its bulk annuity transactions, which happen when companies transfer their pension schemes to Legal & General for insurance.

According to an article by the Financial Times, companies make bulk annuity transactions to insurers like this so that they are not ultimately responsible for personally paying their employees’ pensions.

CEO of Legal & General Reinsurance Thomas Olunloyo commented on how a blockchain solution is fitting given the longevity of annuities:

“… it allows data and transactions to be signed, recorded and maintained in a permanent and secure nature over the lifetime of these contracts, which can span over 50 years.”

As previously reported by Cointelegraph, Amazon released its managed blockchain service in April through its subsidiary Amazon Web Services. This blockchain-as-a-service (BaaS) allows users to more easily create and maintain blockchains on the Ethereum and Hyperledger networks by automating certain aspects of blockchain management.

According to Rahul Pathak, the general manager of Amazon Managed Blockchain, the service “… takes care of provisioning nodes, setting up the network, managing certificates and security, and scaling the network.”

DOrg LLC Purports to be First Legally Valid DAO Under US Law

Decentralized Autonomous Organization (DAO) developer cooperative dOrg has created a limited liability company (LLC) to grant its native DAO legal status, according to a report by independent law firm Gravel & Shea on June 11.

As its name implies, a DAO is a firm with no centralization or hierarchy, and is instead governed by open source digital rules on a blockchain — a smart contract — and operated publicly by users via a consensus voting mechanism.

According to Gravel & Shea, the native DAO of dOrg, underpinned by the DAOstack framework, is now the first legally established entity of its kind in the United States. The DAO rules and implementation are available on the Ethereum blockchain, and the DAO is licensed as a Blockchain-Based LLC firm in Vermont called dOrg LLC.

The upshot is that this DAO can now participate in contractual agreements and provide liability protection, as per the report.

DOrg reportedly contracted Gravel & Shea to provide a “legal wrapper” for DAOs. Oliver Goodenough, special counsel to Gravel & Shea, commented on the dOrg DAO’s legal status, saying:

“We believe that dOrg is now the first legal entity that directly references blockchain code as its source of governance. Its material operations and ownership interests are managed entirely on-chain.”

Per a statement ratified by dOrg’s proposal engine, the collective hopes to make it easy for other DAOs to obtain legal status in the future:

“We want to make what we just did accessible to anyone in the world. Ultimately, the process of configuring and deploying a legally registered DAO will be as easy as creating a social media account.”

As previously reported by Cointelegraph, the U.S. Securities and Exchange Commission (SEC) ruled in 2017 that tokens issued by the now-defunct “The DAO” project were to be classified as securities. Despite being a crowdfunded firm, the SEC ruled that The DAO could not be included under its Regulation Crowdfunding exemption since it was not registered as a broker-dealer/funding portal.

Coinbase Card Launches in Six European Countries

United States-based cryptocurrency exchange and wallet service Coinbase has launched its Visa debit card in six European countries, CNBC reports on June 11.

As of today, cardholders in Spain, Germany, France, Italy, Ireland and the Netherlands will be able to use the cards, which sync directly to their Coinbase accounts. The card comes as both a mobile app for iOS or Android, and as a physical card that can be used to withdraw fiat currencies from automatic teller machines.

Coinbase’s new offering purportedly allow users to spend cryptocurrencies they hold at any merchant that accepts Visa cards. Users can decide which cryptocurrency they wish to use to make a payment in the app, while Coinbase subsequently converts the crypto to cash, for a fee.

Coinbase U.K. CEO Zeeshan Feroz said, “You can buy groceries on bitcoin (BTC) and then coffee on litecoin (LTC) right after.”

The card first launched for users in the United Kingdom in April of this year. The card was issued by Paysafe Financial Services Limited, which is regulated by the Financial Services Authority as a certified issuer of electronic money and payment instruments.

The San Francisco-based exchange has been expanding its offerings significantly over the course of the year. Last month, it expanded trading services to 50 more countries and added trading support for its stablecoin USDC in 85 countries. Coinbase also added the dai stablecoin to its Coinbase Earn program, which rewards users with crypto for watching educational videos.

Despite its recent additions, Coinbase Vice President of Business, Data and International Emilie Choi said that it is not currently investing in the decentralized exchange sector even after the acquisition of decentralized peer-to-peer trading platform Paradex last year. Choi said:

“We have to make sure that if we offer a dex that we’re doing it in a way that is safe and secure and compliant. I think that there’s not a lot of clarity right now on how that would work. We think this space is interesting but we’re not actively investing in it right at this moment.”

Major Pan-African Insurance Firm Rolls Back Insurance for Crypto Mining Equipment

Pan-African insurance company Old Mutual has opted out of insuring cryptocurrency mining equipment due to the absence of regulation in the industry, local technology-focused new outlet ITWeb reported on June 10.

Following comprehensive research of the industry, Old Mutual has arrived at a decision not to insure equipment used for digital currency mining because of the unregulated nature of the industry.

Among other reasons, the company also named cryptocurrencies’ exposure to fraudulent activity and modified electronic infrastructure of mining equipment that leads to overheating and other malfunctions.

Christelle Colman, an insurance expert at Old Mutual, said that “we have chosen not to provide cover for this type of risk as it is quite tricky to conduct a proper risk analysis of an unregulated fledgling industry that is already on the radar of financial authorities due to the unfortunate association with money laundering and cyber crime.” Colman added:

“It is also a highly volatile industry that attracts a lot of speculators so there is no proper risk rating structure in the local market for this type of risk. Even doing a comprehensive inventory of the insured equipment is difficult because the value of the highly modified computer equipment is typically inflated and almost impossible to verify as it is usually imported from obscure suppliers in the Far East.”

Old Mutual released an annual Savings and Investment Monitor survey for South Africa last July, which polled respondents on awareness of and attitude toward cryptocurrencies in the country. The study showed that respondents generally had a positive regard of digital currencies, with 38% of respondents agreeing with the statement “I wish I had invested in [crypto] before” and 71% agreeing that “You can make a lot of money with them.”

At the same time, 43% of respondents agreed with the statement “They are bad news, like a pyramid scheme” and 53% said they do not understand how cryptocurrencies work. In terms of overall awareness, 40% of respondents answered that they were aware to varying degrees, while 60% said they were not aware of cryptocurrencies.

As reported in January of this year, the South African Reserve Bank issued a consultation paper assessing the benefits and risks of cryptocurrencies. In the paper, South Africa’s government clarified that it did not intend to ban either cryptocurrency trading, or crypto payments at the time.

Standard Tokenization Protocol Raises $750K in Eight-Second Token Sale

A token sale for Standard Tokenization Protocol (STP) raised $750,000 and sold out within eight seconds, a news release claimed on June 11.

The project says it offers an open-source, decentralized standard for the tokenization and issuance of any asset.

Following the initial exchange offering (IEO), which was held on Bittrex, STP founder Mike Chen said:

“We are excited to move forward with implementing a powerful funding mechanism for other companies that could potentially save billions in funding costs while staying fully compliant in any jurisdiction.”

As well as being collected as fees and used for gas to help pay compliance validators, STP says its tokens can be staked and “fuel an incentivized governance model that keeps validators efficient and honest.”

A total of 75 million STPT tokens were sold during the IEO. As reported by Cointelegraph last month, Standard Tokenization Protocol earlier raised $7 million through two private rounds led by prominent venture capitalists.

Also in May, rival company Tokenized launched a protocol enabling businesses to create tokens for real-world assets including shares, admission tickets and memberships on the Bitcoin SV (BSV) blockchain.

Traditional Exchanges Pull Back From Reg A+ IPOs Due to Fraud Concerns

Traditional exchanges are holding off on Reg A+ initial public offerings (IPOs) following problematic offerings like that of purported cryptocurrency firm Longfin Corp., the Wall Street Journal (WSJ) reported on June 10.

Earlier in June, the United States Securities and Exchange Commission’s (SEC) filed fraud charges against Longfin. The SEC claimed that Longfin fabricated 90% of its revenue and sold over 400,000 shares of Longfin that it did not have the funds to back in a scheme to secure its spot on the Nasdaq.

The complaint also reportedly stated that the SEC granted Longfin’s Reg A+ offering based on the supposition that the company was principally managed and run in the U.S., when the company’s operations, assets and management were in fact all offshore.

Now, Nasdaq Inc. and the New York Stock Exchange (NYSE) are reportedly shying away from IPOs conducted by companies using Reg A+, a provision that allows firms to have lower accounting and disclosure standards than conventional offerings.

Moreover, Nasdaq has submitted a proposal to the SEC for a rule change that would preclude companies from listing on the exchange under Reg A+ unless they have been in business for no less than two years.

Speaking to WSJ, David Feldman, a partner with law firm Duane Morris LLP, said that a NYSE official told him earlier this year, that the exchange was not interested in new Reg A+ listings at the time.

A Nasdaq spokesman told WSJ that “we continuously examine our listing standards for all companies. We identified a need to enhance the rules in this area and align with our commitment to investor protection.”

According to WSJ, between 2015 and 2018, companies raised around $1.5 billion in 157 offerings under Reg A+, while only a small part of those deals were carried on exchanges. In April of this year, decentralized computing network Blockstack applied with the SEC to launch a $50 million token sale under the Reg A+ framework. If approved, the offering would involve the sale of 295 million Stacks tokens.

That same month, the SEC published the “Framework for ‘Investment Contract’ Analysis of Digital Assets” which aims to help market participants ascertain whether or not a digital asset is deemed to be an investment contract, and therefore a security.

BitMEX Observes Increase in Attacks on Accounts, Stresses Security Measures

Hong Kong-based peer-to-peer (P2P) cryptocurrency exchange BitMEX has reported an influx of attacks on user account credentials, according to an official blog post on June 11.

In addition to covering a litany of best practices for user security, the cryptocurrency exchange stressed the importance of using two-factor authentication (2FA) in particular. The report summarizes 2FA as follows:

“2FA, sometimes referred to as ‘two-step verification’ or ‘multi-factor authentication’, adds an additional layer of security to your account by requiring not only your username and password at login, but also the input of a unique, time-based token. Tokens can be stored on a cell phone within a software-based authenticator app such as Google Authenticator or Authy.”

According to BitMEX, research at Google has shown that virtually all attempts to steal account credentials can be prevented by enabling 2FA. BitMEX concurred that 2FA is the best way to prevent such attacks, and is considering making 2FA authentication mandatory on its platform.

BitMEX also noted that compromised accounts on the exchange are typically associated with weak or reused passwords, hacked emails, or computers infected with malware. Additionally, the exchange discovered some new tactics being deployed in these account hacks, and have updated its policies accordingly.

First, there is no longer an option to disable email notifications about account logins, since hackers were disabling these notifications in order to further hide their tracks. Second, withdrawal requests must now be verified by email, since attackers were making API keys with the hacked accounts, which could be used on their own to authenticate withdrawals.

As previously reported by Cointelegraph, United States-based crypto exchange Kraken made 2FA mandatory for its platform at the end of March. According to Kraken’s announcement, 2FA has been optional on the platform since its inception in 2013. The exchange particularly supports 2FA programs Google Authenticator and YubiKey, as per the announcement.

Former US Senator Rick Santorum Joins Catholic-Focused Cryptocurrency Project

Former United States Senator Rick Santorum has joined the board of a Catholic community-oriented cryptocurrency project, according to a press release published on June 4.

The former senator and Republican presidential nominee is now a board member of the Catholic community-oriented cryptocurrency project dubbed Cathio.

The platform is designed to address the needs of the Catholic economy by ensuring lower costs, greater transaction visibility, and improved security for the community.

Santorum was a noted cultural conservative in U.S. politics, who strongly opposed abortion and same-sex marriage on his failed presidential campaigns in 2012 and 2016. Santorum argued that Cathio will also help better engage the youth:

“Millennials don’t carry cash, they date on apps and watch on-demand entertainment. We have to be there, we have to learn from successful tech companies, and we have to provide a universal solution that makes it easy for younger generations to engage with the Church.”

According to former Ambassador to the Holy See and Cathio Advisor Jim Nicholson, Cathio will not only save the Church money, but will also boost transparency of financial transactions and the connectivity of people, including greater donor development and promotion.

Commenting on the initiative, Cathio CEO Matthew Marcolini told the Financial Times that “when somebody’s doing the wrong thing, or if the government has a question, or if there’s any investigation into any wrongdoing, being able to track that information could be helpful for the Church.” However, when asked how to identify wrongdoers while keeping everyone else’s donations anonymous, Marcolini stated:

“The better question to ask isn’t so much about tracking and visibility and everything. But it’s focusing on how to bring millennials and Gen Xers into the fold to help them cultivate a culture of philanthropy or a culture of giving.”

Religion has intersected with the cryptocurrency space in various instances around the world. Last November, Switzerland-based fintech firm X8 AG received a certification from the Shariyah Review Bureau for its Ethereum-based stablecoin. The debate over whether cryptocurrencies are Sharia-compliant is centered on their compatibility with the Islamic prohibition on monetary speculation.

By contrast, Bishop Hilarion Alfeyev of the Russian Orthodox Church condemned the new asset class last January. “This innovation is representative of the entire banking system, where real assets are converted into virtual ones. This paves the way for usury, which the church has always spoken out against, but can do nothing about — we all have to keep our money in banks,” Alfeyev said.

Logistics Firm Panalpina Launches Blockchain Pilots in Its Supply Chain

Swiss forwarding and logistics services company Panalpina has started blockchain pilot projects aimed at optimizing of supply chains, according to a press release on June 11.

After joining the Blockchain in Transport Alliance (BiTA) in May, Panalpina — one of the world’s largest transport and logistics companies, with consolidated profit of $76.3 million in 2018 — has launched two blockchain pilots in the air and ocean freight field with selected customers.

One of the projects will investigate blockchain applications in high-tech industrial goods, and the other will deal with office supplies.

Panalpina thus aims to digitize trade documents, store them in a cloud, and deploy blockchain tech to improve processes and reduce costs in the long term. Specifically, the company will use a blockchain-based tracking system to record the flow of imported goods from Asia to Europe, running in parallel to real shipments and without interfering with current processes. Cedric Rutishauser, senior venture development manager at the Panalpina Digital Hub, said:

“These early-stage projects are 85 percent about digitization and 15 percent about blockchain – we are starting to see clear benefits in cost savings through simplified and speedier processes, and lower document courier costs. But the real advantage of blockchain lies in the ‘single source of truth’. Improved data sharing between trade partners creates more transparency, with clear ownership and responsibility for each documented step in the supply chain.”

While Panalpina is testing various possible applications of blockchain technology in its business processes, it expressed caution regarding the nascent technology.

In the post, the company stresses that blockchain is an emerging technology and cites a study revealing that some senior supply chain managers are skeptical about the tech’s benefits, while others are convinced that it will advance security and transparency in supply chains.

Recently, French retail giant Carrefour reported an increase in sales after the implementation of a blockchain-based tracking system that enables customers to track the supply chain of 20 items, including meat, milk, and fruit from farms to stores. This year, the company reportedly plans to add 100 more products, including non-food lines, to the system.

Bitcoin Fails to Hold $8K as Cryptos Trade Sideways, Stocks Tumble After Recent Surge

Tuesday, June 11 — crypto markets are trading sideways, with the top 20 coins by market cap predominantly seeing red at press time, according to data from CoinMarketCap.

Market visualization from Coin360

Market visualization from Coin360

Bitcoin (BTC) has failed to hold the $8,000 price point that it broke yesterday after seeing another dip below $7,900 before. At press time, bitcoin is trading at $7,878, down 0.82% over the past 24 hours, seeing a sufficient recovery from the intraday low of $7,778. The biggest cryptocurrency is up 1% over the past 7 days.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: CoinMarketCap

Ether (ETH), the second cryptocurrency by market cap, is down 0.85% over the day to trade at $242.97. Over the past 7 days, the altcoin is down around 0.38%.

Ether 7-day price chart

Ether 7-day price chart. Source: CoinMarketCap

Ripple (XRP), the third top cryptocurrency by market cap is down 1.44%. The major coin is down 3.15% over the past 7 days. Yesterday, Ripple was reported to expand its operations to Brazil as part of plans to expand into Latin American markets generally.

Ripple 7-day price chart

Ripple 7-day price chart. Source: CoinMarketCap

While the majority of the top 20 coins by market capitalization are seeing losses at press time, Tezos (XTZ), ranked 19th, is seeing the biggest losses of around 3.2%.

Total market capitalization has recovered to $252 billion at press time after dropping to as low as $248 billion earlier today. Daily trade volume has significantly declined from $67 billion in the beginning of the day to $57 billion at press time.

Total market capitalization 24-hour chart

Total market capitalization 24-hour chart. Source: CoinMarketCap

Earlier today, major South Korean bank KB Kookmin Bank announced a partnership with blockchain technology firm Atomrigs Lab to explore digital asset management and protection solutions. According to a recent tweet by crypto and blockchain writer Joseph Young, Kookmin Bank announced on June 10 that it is planning to launch custody services for digital assets.

Also today, Nasdaq, the world’s second-largest stock exchange, has revealed plans to release an institutional-grade crypto pricing product in collaboration with cryptocurrency data provider CryptoCompare.

The United States stock market has rallied earlier today amid the anticipation that the Federal Reserve should soon reduce interest rates, CNBC reports. However, stocks have subsequently reversed to see losses, with the Dow Jones Industrial Average (DJIA) having dropped about 0.2% at press time. The S&P 500 (SPX) and Nasdaq (NASDAQ) Composite are down 0.2% and 0.3%, respectively.

Oil prices have seen mixed signals today, with the OPEC basket surging 3.5%, while West Texas Intermediate (WTI) crude oil edged up 0.1% and Brent crude dropped 0.1% at press time, according to Oilprice.com.

Meanwhile, gold prices dipped earlier today as investors allegedly booked profits after big gains over the past weeks. At press time, spot gold has tumbled about 0.3%, while U.S. gold futures gained 0.2%.

Austrian Postal Service Releases Crypto Collectible Stamps

The Austrian Post has released a line of crypto collectible stamps, according to a press release on June 11.

According to the press release, the so-dubbed “crypto stamp” is the first stamp in the world to be authenticated via blockchain technology. The postal service has reportedly issued 150,000 copies sold at € 6.90 apiece.

When purchased, the stamp set comes in two parts. As pictured below, the left part, which is stylized with a unicorn associated with Ethereum, functions as a standard stamp that can be used to send mail. The right section, on the other hand, contains the credentials used to authenticate the crypto collectible via blockchain.

Image of stamp set. Source: APA-OTS

Image of stamp set. Source: APA-OTS

As previously reported by Cointelegraph, a crypto collectible (virtual) racing car recently sold for $110,600. The “1-1-1” car, the first and only to be issued, was auctioned off in advance for the release of blockchain racing game F1 Delta Time.

As per the official description for F1 Delta Time, the title is a competitive racing game where different cars have various in-game attributes:

“The game will center around the collection and trading of unique Cars, Drivers and Components – all of which will exist as non-fungible tokens based on the ERC-721 token standard. […] Tokens are produced in limited quantities as determined by their level of rarity, with the rarest tokens possessing the most impressive racing attributes.”