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See below all the important happenings this week in the world of crypto, presented by the experts at Kraken:

1. Cointelegraph: Bitcoin SV Splits Into Three Chains Following 210 MB Block
   • Following a recent BSV hard fork on July 24th, resulting in a block size increase from 128MB to 2GB, the network saw a three-chain split after a 210 MB block involving 808,633 txs was mined on Aug. 3rd by CoinGeek miner 
   • BitMEX Research reported that 65% of nodes were located on the current tip, while 17% were stuck on the 210 MB block and 19% hadn’t even upgraded and were on the old pre-hard fork chain
   • BSV supporter and CEO of BSV-powered payment system MoneyButton Ryan X. Charles stated that his BSV node for MoneyButton went down for three hours because it ran out of memory and crashed during a stress test, “Running a node is expensive. Our new instance will cost thousands of dollars per month to operate. As blocks continue to get larger and we have to upgrade the instance many times, this cost will balloon. Since we do not earn money from transaction fees like miners, it will be too expensive for us to run a node”
   • According to TrustNodes, Coin Dance service is now on the new BSV chain while the older chain will likely be discarded, meaning miners who got stuck on the old chain may have lost some money as those blocks could now be discarded
2. PressTV: Iran announces new rules to regulate cryptocurrency market
   • The Iranian Cabinet ratified a bill that said the gov’t won’t recognize any trade activity carried out inside Iran involving crypto as lawful, won’t view digital coins as legal tender and the Central Bank won’t guarantee their value
   • The bill would allow the mining of digital currencies inside Iran under certain conditions, including miners being required to obtain the approval of Iran’s industry ministry and forbidden from mining inside a 30 km boundary of all provincial centers except for the capital Tehran and the central city of Esfahan 
   • The bill would result in mining farms being charged for the electricity used for mining, or the natural gas used to generate electricity, and taxed like industrial manufacturing units unless the owners return the money earned from the export of their digital currencies back to Iran’s economic cycle
   • The new rules would also allow Iran’s ministry of industry to devolve its powers to authorities in special economic zones if foreigners want to set up mining farms in those areas
3. CoinDesk: Mastercard Is Building a Team to Develop Crypto, Wallet Projects
   • Mastercard is looking to hire a senior blockchain engineer and engineering lead, director for product development and innovation, VP for product management and director of product management for crypto and wallets
   • The director of product management for crypto and wallets will “lead the ideation, definition, design, and development of innovative crypto currency solutions, including wallet solutions,” and have an experience in this field
   • Along with the director for product development and innovation, VP for product management, the wallet director is in charge of Mastercard’s patent portfolio and filing new patent applications
   • The new leadership team will advocate blockchain concepts within Mastercard itself, and will need to “establish shared vision across the company by influencing and building consensus among the various stakeholders”
4. The Block: SEC Commissioner Peirce says US is not sitting ‘idle’ over crypto regulations, but could learn from other countries
   • SEC commissioner and “crypto mom” Hester Peirce said the U.S. hasn’t been sitting “idle” toward finalizing crypto regulations, but a lot of activity is happening outside the U.S., “we have to think about our regulation with a sensitivity for cross-border considerations, cooperation, and what I call co-learning”
   • She said the SEC could take ideas from countries such as Singapore, Thailand, Hong Kong and Japan, as well as Malta, Switzerland, and Bermuda to focus on “untangling some of our most difficult legal and policy questions [in the cryptospace] … Just as states take different approaches and learn from one another in the U.S., crypto regulation affords international regulators the opportunity to learn from one another”
   • The commissioner reiterated her concern that the U.S. will fall behind other countries in attracting crypto-related businesses if it doesn’t move forward with a clear regulatory regime, “I would like to see more focused momentum at the U.S. SEC toward finalizing our regulatory regime for digital assets”
5. The Block: Crypto mining giant Bitmain incurs $310M net loss in Q1 2019
   • According to Tencent’s news portal QQ, Bitmain Technologies Ltd. incurred a net loss of -$310M in 1Q19; Bitmain has monthly net income of -$345M, -$280M, and +$315M in January, February, and March 
   • Weak demand for Bitmain’s 16nm range of mining machines, which were sold at lower prices to clear inventory, was ostensibly the key reason for the loss
   • Bitmain’s IPO in the U.S. is “coming soon,” aiming to raise +$1B
6. Fed: Federal Reserve announces plan to develop a new round-the-clock real-time payment and settlement service to support faster payments
   • The Fed will develop a round-the-clock, real-time payment and settlement service, called the FedNow℠ Service, to support faster payments in the US for more than 10,000 financial institutions, “The Federal Reserve believes faster payment services, which enable the near-instantaneous transfer of funds day and night, weekend and weekdays, have the potential to become widely used and to yield economic benefits for individuals and businesses by providing them with more flexibility to manage their money and make time-sensitive payments”
   • Fed Board Governor Lael Brainard said, “FedNow will permit banks of every size in every community across the country to provide real-time payments to their customers”
   • The Board is requesting comment on design suggestions for the new service to most effectively support the full set of payment system stakeholders and the functioning of the broader U.S. payment system; comments are requested within 90 days of publication in the Federal Register, which is expected “shortly”
   • The Board plans to explore the expansion of Fedwire Funds Service and National Settlement Service hours, up to 24x7x365, to facilitate liquidity mgmt. in private-sector real-time gross settlement services for faster payments and to “support a wide range of payment activities, beyond those related to faster payments”
   • FedNow is expected to launch in 2023 or 2024
7. Reuters: North Korea took $2 billion in cyberattacks to fund weapons program: U.N. report
   • According to a confidential U.N. report, North Korea used “cyberspace to launch increasingly sophisticated attacks to steal [and launder] funds from financial institutions and cryptocurrency exchanges”, netting them $2B to use for their “WMD (weapons of mass destruction) programmes”
   • Pyongyang also “continued to enhance its nuclear and missile programmes although it did not conduct a nuclear test or ICBM (Intercontinental Ballistic Missile) launch”
   • The U.N. experts are investigating “at least 35 reported instances of DPRK actors attacking financial institutions, cryptocurrency exchanges and mining activity designed to earn foreign currency” in ~17 countries
   • DPRK’s attacks against crypto exchanges allowed it “to generate income in ways that are harder to trace and subject to less government oversight and regulation than the traditional banking sector”
8. CoinDesk: British Tax Authority Seeks Data from Crypto Exchanges in Search of Tax Evaders
   • Industry insiders stated that the British tax authority, HM Revenue & Customs, is pressuring crypto exchanges to reveal customers’ names and tx histories, “HMRC is looking to work with exchanges when it comes to finding information on people who have been buying and selling crypto. I think they will only go back a couple of years, two or three years”
   • HM has sent letters to at least three exchanges doing business in the U.K. – Coinbase, eToro and CEX.IO – in the last week or so
   • The source noted it would be very difficult to provide ten years’ worth of info for any platform, “If they [HMRC] do only go back two or three years, I think the interesting thing here is, that the individuals who went into crypto very early on in 2012-13 will not be affected. The ones who probably made the largest gains won’t be affected, it will be the people who came in around the time crypto peaked”
   • In response to a Freedom of Information (FOI) Request submitted by CoinDesk, HMRC said it was withholding details since disclosing them could jeopardize the assessment or collection of tax, but the agency confirmed such demands are within its remit, “These exchanges can retain information on their clients and the transactions that they have completed. These transactions may result in potential tax charges and HMRC has the power to issue notices requiring exchanges to provide this information”
9. Cointelegraph: IBM Launches New Blockchain Platform for Supplier Data Management
   • IBM and blockchain company Chainyard jointly developed a new blockchain network for supply chain mgmt., dubbed Trust Your Supplier
   • The network’s founding members also include US brewing company Anheuser-Busch InBev, tech companies Cisco, Lenovo, Nokia, Schneider Electric, British pharma company GlaxoSmithKline and telecoms company Vodafone
   • The product is built on the IBM Blockchain Platform and aims to eliminate manual time-consuming processes and help reduce the risk of fraud and errors
   • Trust Your Supplier creates a digital passport for supplier ID on the blockchain that enables suppliers to share info with selected buyers on the network
   • Renee Ure, Chief Supply Chain Officer for Lenovo’s data center group, said that by deploying the platform users can reduce the time and cost associated with qualifying, validating and managing new suppliers, “Blockchain has the ability to completely transform how companies onboard and manage their supplier network for the future. Through Trust Your Supplier, both buyers and suppliers will see the procurement benefits of blockchain through reductions in cost, complexity and speed”
10. CoinDesk: North Carolina Congressman Reintroduces Crypto Tax Bill
    • The Virtual Value Tax Fix Act, which would free crypto txs from double taxation and record-keeping immediately in an effort to refine the IRS’ treatment of crypto, was reintroduced by US House Rep. Ted Budd (R-NC) on July 25th
    • In what Budd calls a national security issue, the bill would end the double taxation on crypto txs by amending 1986’s Internal Revenue Code (i.e., gains and losses in txs of real property of like-kind remain unrecognized), which currently places a 40% tax rate on txs
    • Budd said tax concerns and tx record-keeping act as a deterrent to adoption, “The use of digital assets is already treated as a sale of the asset, even though the economic reality of the transaction is a purchase of a simple consumer good”
11. VeChain: The Wine Traceability Platform Co-Developed by VeChain and D.I.G. Kickstarted its Second Phase with the Introduction of Penfolds Bin 407 English
    • VeChain partnered with Australian winemaker Penfolds to release a case of blockchain-encrypted wine bottles for sale, marking the start of VeChain’s Wine Traceability Platform (WTP) phase 2
    • The bottles are available at the Waigaoqiao Int’l Alcohol Exhibition & Trading Center, D.I.G.’s  Flagship Store and the Sen Lan Shang Du in Pudong New District
    • Each bottle comes attached with an encrypted NFC chip that contains the bottle’s provenance info on a blockchain, which is verified by third-party auditors and can be accessed with a chip reader
12. The Block: European Central Bank seeks to increase monitoring activities of cryptocurrencies with on-chain data
    • The European Central Bank (ECB) outlined plans to devise a monitoring framework of the crypto market, using both on-chain data and metadata related to off-chain txs
    • The bank’s monitoring activities are relying “to a great extent” on publicly available data such as market cap, prices, and trading volumes, however it also plans to use commercial data, market indicators, and on-chain data to aid its understanding of the crypto market
    • The ECB noted that the traditional financial system is subject to risks from crypto due to their close connection, and “spillover effects may also be transmitted to the real economy [from the cryptocurrency market]”
    • The most prominent challenge the ECB faces in understanding the nascent market is the data gap related to the crypto holdings of financial corporations and payments with crypto
13. The Block: SEC v. Kik – Kik files aggressive answer to SEC lawsuit
    • Kik filed an aggressive answer to an SEC complaint filed in June, contending that the SEC took key evidence out of context to create a “highly selective and misleading depiction of the record”
    • For example (one of three examples provided by Kik), the SEC alleged that a Board member said that “Kik decided to ‘pivot’ to an entirely different business and attempt what a board member called a hail Mary pass,” but Kik actually said, “The more I think about it, I think this is a great idea. [p]eople call [a cryptocurrency] a hail Mary, but to me that is a longshot and I really do not think it is a longshot”
    • Kik portrayed itself as a successful and ethical company which resisted an acquisition overture because “the philosophy of the acquiring company was to collect and sell user data, contrary to Kik’s core principles”
    • Kik took swipes at the SEC early and often, e.g., “while it is difficult to explain the Commission’s apparent contempt for the idea that a company would sell a product to generate revenue, Kin was not simply a means to fund operations”
14. CoinDesk: The City of Seoul Will Create a Cryptocurrency for Citizen Rewards
    • Blockinpress reported that the Seoul Metropolitan Gov’t will establish its first blockchain-based administrative services in November
    • The city’s blockchain points system will be introduced and Seoul residents will receive S-coins for the use of public services (e.g., paying taxes and participating in public opinion polls), which are redeemable for rewards
    • Seoul’s point system will be integrated with ZeroPay, a city-gov’t sponsored QR-code-enabled network that allows customers to pay for goods/services using their phones and doesn’t charge merchants commissions
    • A blockchain service for digitally submitting qualifications is also on the list for completion by November, as is the enhancing of the Seoul Citizens Card with blockchain to enable digital authentication for the use of public services
    • By EOY Seoul plans to have its part-time workers rights program up and running to allow part-time and temporary employees to sign simple contracts with employers, keep track of their work histories, and maintain time sheets, as well as help them properly register for the county’s four major social insurance programs aiming to improve trust and relations between small companies and part-time workers
    • Other programs mentioned but not with year-end completion deadlines include smart healthcare, donation management and online certificate verification
    • The blockchain services will be controlled by the city, but operated by private enterprises
15. Bloomberg: Just 318 Crypto Addresses Control 80% of Tether
    • According to Coin Metrics, 318 USDT wallet addresses (on OMNI and Ethereum blockchains) each contain more than +$1M worth of USDT, or ~80% of the total supply (~3.2B out of ~4B USDT)
    • In comparison, ~18,830 BTC whales hold +$1M and ~14,000 wallet addresses comprise ~20% of BTC’s circulating supply (~16.8% of total)
    • John Griffin, a finance professor at University of Texas at Austin, stated, “The concentration of Tether suggests that control of Tether is in the hands of a few central players who can swing Bitcoin prices, and have a vested interest in doing so … It also suggests that many exchange players have a vested interest in keeping the Tether game going”
    • Coin Metrics co-founder Nic Carter added that among the big USDT holders are brokers that cater to Chinese investors needing to exchange CNY and HFTs
    • Link to Cointelegraph’s report
16. Cointelegraph: Commerzbank Tests Blockchain Machine to Machine Payments with Daimler
    • Frankfurt bank Commerzbank tested blockchain-based, machine-to-machine payments with trucks produced by Daimler, the firm behind Mercedes-Benz, to test next-gen machinery’s ability to operate more autonomously
    • The bank piloted the exchange and settlement of payments between an electronic charging point and a Daimler truck system without any human intervention; the transaction consisted of tokenized EUR being sent on the blockchain to then be received by the automaker 
    • Commerzbank divisional board member tx banking, Stephan Müller, explained that allowing machines to perform mutual payments is the logical next step in increasing supply chain efficiency, “After having completely digitised securities transactions in past pilot projects, the focus is now shifting to DLT-based payment structures. […] As a bank we see our mandate as creating new digital payment architectures for our clients”
17. Alston & Bird: Rhode Island Requires Licensure for Virtual Currency Business Activity
    • Effective Jan. 1st, 2020, any business in Rhode Island that accepts fees for currency transmissions or maintains control over virtual currencies will be regulated under its money transmission laws (MTL)
    • Part of Rhode Island’s licensure for crypto firms are strict compliance metrics, including AML and anti-fraud protocols, security requirements, and requirements for firms to demonstrate an operational ability to “protect the confidentiality, integrity, and availability of any non-public personal information or currency transmission it receives, maintains, or transmits”
    • Many of these requirements are adaptations from the standing MTL legislation in the state, but what’s new is that a firm must maintain holdings of crypto in kind and quantity equal to amount being transmitted by clients
    • In the bill, cryptos are defined as “a digital representation of value that is used as a medium of exchange, unit of account, or store of value, and is not legal tender, whether or not denominated in legal tender”
    • Outside the purview of the law are digital currencies that aren’t exchangeable for fiat, or that exist solely on a gaming or blockchain platform
    • Additional licensing exemptions exist for “personal, family, or household” uses of virtual currencies, academic purposes, and certain escrow services, among others
18. Blockstream: Announcing Blockstream Mining and Pool
    • Blockstream is launching a BTC mining facility and mining pool, dubbed Blockstream Mining, that will host its clients’ mining activities in addition to its own mining operations
    • The facility counts Fidelity Center for Applied Technology and LinkedIn co-founder Reid Hoffman among its initial clients
    • Forbes’ reported that, at full capacity, Blockstream’s mining facility would  “account for roughly 6 exahashes of Bitcoin mining power,” equating to roughly 7% of BTC’s daily hashrate this week
19. Bloomberg Law: CFTC Official Who Led Bitcoin Futures, Swaps Revamp to Leave
    • CFTC Division of Market Oversight (DMO) director Amir Zaidi has announced that he is leaving the regulator in the weeks to come
    • Zaidi was at the CFTC since early 2017 and was responsible for setting policy on BTC futures trading and redrafting the rules on OTC swaps markets
    • Vincent McGonagle, former DMO director and current deputy director of Enforcement,  will likely serve as acting DMO director after Zaidi’s departure
20. Nikkei: 15 Nations Plan Global Crypto Monitoring System Under FATF
    • About 15 countries, including the G7 members Australia and Singapore, plan to create a new system to collect and share personal data on individuals who conduct crypto txs in order improve upon AML/CFT measures
    • The system, which will be designed by FATF, is to draw up detailed measures by 2020, and to have the system up and running a few years later; once in place, the system will be managed by the private sector
21. Forbes Contributor: Allianz In ‘Advanced Stages’ Of Accepting Crypto For Payment
    • Insurance giant Allianz Global Corporate & Specialty SE (AGCS) is developing a blockchain “token-based” ecosystem for its global insurance payments, “AGCS is further exploring blockchain technology to simplify and accelerate cross-border insurance payments for its corporate customers. A project team is in the advanced stages of development for a token-based electronic payment system to allow for frictionless, transparent and instantaneous money transfers for a range of different types [of] payments”
    • The “internal token” will address issues and clunkiness currently surrounding worldwide money transfer for “its global affiliates,” CoinDesk noted in an April 2019 article
    • The token will run on “a proprietary blockchain” built for the endeavor by the blockchain company Adjoint
    • The token is still in a phase of experimentation, “The basic core infrastructure has been built and tested, and the next step will be to trial money transfers with a limited scope and for a short period of time to conclude testing and prove hypothesis”
22. Yahoo Finance: Ripple eyeing ‘multiple’ deals after MoneyGram investment
    • Ripple CEO Brad Garlinghouse said the firm is looking to sign “multiple” investment and acquisition deals after its $30M investment in money transfer giant MoneyGram, “We’re in a very strong position, our business is growing strongly, we have a strong balance sheet, and I intend to press our advantage”
    • Garlinghouse didn’t provide specific details about potential investments, as deals are “always very, very hard to predict”
23. Prime Trust: Prime Trust Becomes The First US-based Qualified Custodian To Secure Digital Assets with Fireblocks Breakthrough MPC & SGX Technology
    • Crypto custody firm Prime Trust partnered with Fidelity-backed crypto security firm Fireblocks to strengthen its solution to protect digital assets it holds in custody from potential hacks and thefts
    • Fireblocks uses multiparty computation (MPC) and patent-pending chip isolation technology (SGX) to secure digital asset txs, “Fireblocks’ technology provides a ‘secure highway’ for crypto that eliminates the theft of private keys or compromise of credential/API keys and deposit addresses”
24. Bitcoin.com: Indian Supreme Court Heard Crypto Case in Depth Today
    • After being postponed several times in the past month, the Indian Supreme Court met to discuss the government’s outstanding crypto policy and write petitions to challenge the RBI’s banking restrictions on crypto-related businesses
    • Crypto Kanoon reported that the provisions of the RBI Act and the Banking Regulation Act, along with the RBI’s circular in April 2018 banning regulated financial institutions from providing services to crypto businesses, were all analyzed in court to ascertain whether the central bank has the power to impose such a ban, “[The] RBI is only a delegatee of power which cannot exercise [the] same powers as Parliament which has a direct impact on legitimate businesses”
    • The counsel for crypto exchanges argued that the “RBI restricting banks from providing services to crypto [businesses] is a colorable exercise in the guise of consumer interest. It can exercise power in public interest only to the extent as provided under law such as interest of depositors, borrowers etc”
    • The counsel showed the court that crypto exchanges have suffered losses due to the banking ban including a decrease in the number of users, adding that it couldn’t work without a bank because any settlements are converted to fiat
    • The counsel argued that crypto “must not be equated to sovereign currency i.e., rupee etc,” emphasizing that the former is a commodity while the latter a currency
    • Regarding the gov’ts policy on crypto, the Indian government “submitted [a] draft regulation before the court which was submitted to it by [the] Garg committee … Govt. requested the court to adjourn the matter till January as it intends to introduce the bill in Parliament in [the] winter session”
    • The follow-up date to resume hearing the case is on Aug. 14

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