Pakcoin

Exchanges Round-Up: CME Rejects Altcoins, Waves DEX Hacked on Launch

28/07/2018 by Idelto Editor

In recent news pertaining to cryptocurrency exchanges, the CEO of Chicago Mercantile Exchange (CME) has indicated that the company has no intentions of introducing derivative markets for alternative cryptocurrencies in the near futures; Waves’ decentralized exchange was hacked upon launch; and the founder Pakcoin has attributed Pakistan’s slow rate of cryptocurrency adoption to low literacy rates.

Also Read: FINMA Launches Proceedings Against $100 Million ICO

CME CEO Extinguishes Rumors of Altcoin Futures

The chief executive officer of CME, Terrence Duffy, has indicated that the company has no plans to introduce derivatives markets for additional cryptocurrencies.

Mr. Duffy stated that he “will take a wait and see approach with [BTC] for now, adding “I will not just put products up there to see where they’re going to go.” Mr. Duffy also emphasized that cryptocurrency futures contracts are “highly volatile and new.”

In an interview in March, Dennis O’Callahan, the director for product development of Chicago Board Options Exchange, responded to a question concerning whether CBOE was exploring listing derivative markets for other cryptocurrencies, stating: “Being in product development our task is to look for new products all the time, so we are constantly evaluating that market, and we are evaluating other cryptocurrencies too, among other items. But we have seen how Bitcoin has worked, so we are definitely monitoring other termarkets to make sure that the infrastructure and everything is in place in case we want to pursue other cryptocurrencies.”

Waves’ DEX Gets Hacked Upon Launch

Earlier this week, Waves officially launched its decentralized exchange following a year-and-a-half-long beta period. The Waves DEX reportedly facilitated $6 million worth of cryptocurrency transactions at the conclusion of its beta testing, surpassing the daily volume of many rival decentralized exchanges. The company claimed to be host to 330,000 wallets belonging to 90,000 traders.

Despite the company’s confidence heading into the launch, Waves’ exchange and main company websites were seized by hackers seeking to phish for users’ information pertaining to wallets. After several hours, Waves was able to restore access to its DNS server and return its platforms online.

The chief executive officer of Waves, Sasha Ivanov, discussed the incident with media, stating: “Someone just faked my passport and gave it to support [staff] at the domain company and they changed the password at his request. Then the attacker was able to change the main website.”

In response to the attack, Mr. Ivanov stated: “We and the whole industry need to work on decentralized domain name systems.” A spokeswoman for Waves added that “the DNS servers of the Waves website are maintained by the registrar, and in this case, their security is beyond our control. Nevertheless, the security levels of the registrar are, indeed, in question, and so we are currently considering further action … to make sure that this one-time breach will never occur again.”

Pakcoin Founder: Slow Rate of Cryptocurrency Adoption in Pakistan to Low Literacy

Abu Shaheer, the founder of Pakistan-based altcoin Pakcoin, has indicated that the number of Pakistanis investing in cryptocurrencies is increasing slowly, attributing the slow speed of uptake the low rates of literacy in Pakistan.

“People are turning to cryptocurrency as an investment, but slower than the western world as the literacy rate is lower here and its a totally new phenomenon for them,” Mr. Shaheer said. “Some are using it as alternative means of payments. Most people using cryptocurrencies are day or short-term traders finding investment opportunities in crypto and are growing in number.”

According to the United States Central Intelligence Agency, approximately 57.9% of Pakistani citizens over the age of 15 are literate.

When do you think we will see mainstream financial institutions offer derivative products for a wide range of cryptocurrencies? Join the discussion in the comments section below!

Images courtesy of Shutterstock, Wikipedia

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Pakistanis Find Ways to Trade Bitcoin Rendering Ban Ineffective

14/05/2018 by Idelto Editor

The crypto ban in Pakistan is proving to be not as effective as expected. If anything, the State Bank has barred commercial banks and financial firms from dealing in cryptocurrency which, of course, makes life harder for local exchanges. Individual traders, however, are finding alternative ways to acquire or sell cryptocurrencies, defying the warnings and the prohibitions.

Also read: India’s Supreme Court Keeps Ban on Banks’ Crypto Services, For Now

Central Bank Can’t Ban Cryptocurrency in Pakistan

Pakistan’s experience with cryptocurrencies offers another example of how ineffective financial authorities can be when trying to fill a legal vacuum with prohibitive administrative measures. Central banks often forget they are neither parliaments, nor governments, and their regulatory overreach cannot legitimately substitute the normal legal process. The recent decision of the State Bank of Pakistan to ban crypto-related activities proves that observation.

In early April, the SBP issued a circular on the “prohibition of dealing in virtual currencies”, right after a similar measure by the Reserve Bank of India, the regional rival. Unlike their Indian colleagues, who gave banks and traders three months to comply, Pakistani central bankers imposed the ban with immediate effect. SBP said virtual currencies and tokens were not legal tender and reminded it had not authorized any individual or entity to issue, sell, purchase, or exchange any such coins in Pakistan. All banks, microfinance entities, payment system operators and service providers were “advised to refrain” from dealing in cryptocurrencies.

The local market is by no means comparable to India’s booming crypto sector. According to Danyal Manzar, CEO of Pakistan’s first bitcoin exchange Urdubit, about 100 different digital coins were being traded daily across all mediums before the ban. His trading platform decided to close down permanently following the prohibition. “The decision was made in haste. Ample time should always be provided for a proper shutdown. But we respect the SBP’s decision,” he told The Express Tribune.

Immediately after the ban, Urdubit warned its clients to withdraw both their fiat and their crypto funds. A month later, however, some of its users still have bitcoins in their accounts on the platform. Manzar believes that those who want to trade will continue to do so because “alternative ways still exist that will continue to be tapped no matter how risky they are.” He thinks that cryptocurrencies would only disrupt the stock market, and not the entire monetary system. “About 80 to 85% of the traders from stock exchanges came to try their luck in virtual currency,” he said.

Localbitcoins PKR Trade Spikes After Ban

Recently, Pakistani crypto traders told Asia Times that the central bank’s move initially caused a dip in the crypto market but the volume of trading has gradually picked up after alternative trading methods were discovered. “Traders realized that the SBP hasn’t, and can’t ban cryptocurrency in Pakistan,” Lahore-based trader Majid Ali commented. “What the State Bank has done is ban banks from entertaining crypto, so if you’re not dealing via banks, you [still] can own and trade virtual currency in Pakistan, which comes under the IT ministry,” he explained.

Indeed, as the chart of the weekly Localbitcoins volume from Coin Dance shows, trading has spiked after the release of the circular. It peaked in the week of April 28 to more than 163 million Pakistani Rupee (>1.4 million USD), almost reaching December-January all-time highs.

The price of Pakistan’s first and only cryptocurrency, Pakcoin, which was explicitly mentioned in the SBP’s prohibition, has also jumped – by over 60% since the ban. Pakcoin founder Abu Shaheer says that the central bank’s measure has actually worked in favor of his crypto by “serving to expose Pakcoin’s name [and] more people got interested in it.” The digital token is already used for mobile phone credit top-ups.

Islamabad to Prohibit “All Forms of Virtual Currency” After All

Sources from Pakistan’s Ministry of Information Technology and Telecommunication have told Asia Times that the government in Islamabad does plan to formally declare cryptocurrencies illegal in the country. “We have forwarded our recommendation for a ban on all forms of virtual currency trading, and proper legislation is being worked on,” a government official said.

According to crypto trader Majid Ali, however, while the legislation is likely to hit trading, there are alternatives for dealing with cryptocurrencies. “The government of Pakistan can’t stop the trade in an international commodity that is accepted in other countries,” he said. Majid also warned that the ban actually opens transfer channels that can be used for illegal purposes.

Do you think that bans imposed by central banks can really stop cryptocurrency trade? Tell us in the comments section below.

Images courtesy of Shutterstock, Coin Dance.

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Pakistan’s Central Bank Prohibits Crypto Dealings with a Circular

09/04/2018 by Idelto Editor

The State Bank of Pakistan (SBP) has issued a circular on the “prohibition of dealing in virtual currencies”. The measure comes right after a similar move by the central bank of neighboring India. Commercial banks and payment providers have been told to stay away from crypto operations. They should not facilitate transactions of virtual currencies and tokens, the document states.

Also read: India Orders Banks to Drop Cryptos, Studies Issuing its Own Digital Coin

Bitcoin, Pakcoin, Onecoin… Deemed Illegal

Pakistan’s central bank says virtual currencies like Bitcoin, Litecoin, Pakcoin, Onecoin, Dascoin, Pay Diamond, and tokens from initial coin offerings are not legal tender in the country. These are not guaranteed by the Government of Pakistan, the financial institution notes. SBP has not authorized any individual or entity to issue, sell, purchase, or exchange any such virtual currencies and coins in Pakistan, according to circular No. 03 published on the bank’s website.

No dedicated legislation regarding cryptocurrencies has been adopted in the country yet. Authorities, however, have demonstrated negative attitude towards bitcoin on many occasions. The Federal Investigation Agency, which has conducted several operations against cryptocurrency traders, recently called on the government in Islamabad to declare digital currencies “persona non grata”.

In accordance with the promulgated stance, all banks, microfinance entities, payment system operators and service providers are “advised to refrain” from dealing in cryptocurrencies. That includes the “processing, using, trading, holding, transferring, and investing” in digital coins. SBP also says that banks and companies should not facilitate crypto transactions of their customers and account holders.

Pakistani banks have been asked to “immediately” report any such transaction to the Financial Monitoring Unit (FMU). All crypto transactions have been called “suspicious”. The circular letter is signed by the State Bank’s director Muhammad Akhtar Javed, who asks the banks to acknowledge receipt.

According to Pakistani media, SBP has also warned citizens against using cryptocurrencies to transfer money abroad. Any person doing that will be subject to prosecution. Domestic and international transfer services are regulated by the central bank in Pakistan. It notes that no entity is authorized to offer cryptocurrency remittance services. Pakistanis have been advised not to engage in activities like mining, trading, and promoting virtual currencies.

In the Footsteps of India

The prohibition of crypto-related transactions has been reported as a “major development” by the local press. It follows a similar decision by the Reserve Bank of India. RBU ordered regulated financial institutions in the country to terminate all services to individuals and businesses dealing with cryptocurrencies like bitcoin.

The statement issued by India’s central bank effectively prohibits banks from working with intermediaries such as cryptocurrency exchanges. Major commercial banks, however, had been tightening the clamp even before the order. Citibank, ICICI Bank, HDFC Bank, Kotak Mahindra Bank, and the State Bank of India, have all suspended accounts of crypto traders without a mandate from the central bank. As a result, bitcoin trading on local exchanges has dropped as much as 90% in the last two months, as news.Bitcoin.com reported.

According to Indian media, RBI’s tough stance, amid continuing regulatory uncertainty, is forcing Indian exchanges to look for jurisdictions with clearer policies, like Australia. Trading platforms are also trying to actively respond to the latest challenge. An online petition calls for the reversal of the bank’s decision. A campaign on Twitter has been gathering support under the hashtag #RBICantStopMe.

Much like India, Pakistan has seen an increased interest in cryptocurrencies since last year when the market capitalization of bitcoin and the like reached all-time highs. However, the local crypto sector is not as developed as in other countries, including India.

Do you think the measures imposed by the central banks of Pakistan and India will curtail crypto activities? Share your expectations in the comments section below.

Images courtesy of Shutterstock.

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