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The rise of cryptocurrency exchanges

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In front of a displayed Binance logo, representations of the cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple and Litecoin can be seen. Photo: REUTERS / Dado Ruvic / Illustration

Cryptocurrency exchanges hit the headlines in 2021 thanks to Coinbase’s (COIN) IPO in New York and, more recently, regulatory scrutiny of Binance, one of the largest and fastest growing private exchanges.

Exchanges are an important part of the cryptocurrency landscape, much like the stock market. The cryptocurrency market is generally accessed through online exchanges where traders with fiat currency deposits can buy or sell from debit or credit cards.

In contrast to public stock markets, which are dominated by national exchanges, the landscape of crypto exchanges is less obvious from the outside.

When the ecosystem was still in its infancy, buying Bitcoin (BTC-USD) was a daunting task. Only the really stubborn managed to transfer funds to obscure exchanges like the Japanese Mt.Gox, which was founded in 2010. Buying crypto on this early exchange involved transferring money through an intermediary in Cyprus called OKPAY. Berg Gox finally went bankrupt in 2014 after a catastrophic hack – a cautionary story that has led many crypto veterans to keep a watchful eye on today’s exchanges.

Today, the top five crypto exchanges are in order of trading volume: Binance, Huobi Global, Coinbase, Kraken, and FTX. Each of them makes billions of dollars in trading every day.

Exchanges in this new and relatively unregulated industry come in two forms: centralized exchanges (CEXs) like Binance, where you entrust your coins and passwords to a third party; and decentralized exchanges (DEXs) like Pancake Swap, which do not involve a central authority and give users full control over their private keys and digital assets.

Watch: What is Bitcoin?

Most of the top exchanges, aside from Binance and FTX, list Ethereum as their number one cryptocurrency by volume. Binance and FTX list Bitcoin as their most traded asset.

Exchanges usually differ in the services they offer to users. Binance is known for the speed of its transactions, Coinbase for its user-friendly interface and FTX for its range of crypto derivatives.

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Cryptocurrency exchanges also differ in the fees they charge and how seriously they take security. Exchanges do not offer nationally secured deposit insurance, such as the Federal Deposit Insurance Corporation (FDIC) in the US or the Financial Services Compensation Scheme (FSCS) in the UK. However, some exchanges offer insurance against theft or exchange failure.

Perhaps the most trustworthy exchange is Coinbase. The company is listed on the NASDAQ (^ IXIC) and is based in the United States, which means it is subject to a high level of regulation. Coinbase has a custody service that offers insurance against stock market hacking. In addition, the US dollar holdings of the exchange’s US customers are protected by pass-through FDIC insurance of up to US $ 250,000 per person.

People watch as the logo of Coinbase Global Inc, the largest U.S. cryptocurrency exchange, is displayed on the Nasdaq MarketSite jumbotron in Times Square in New York, United States, on April 14, 2021.  REUTERS / Shannon Stapleton

People watch as the logo of Coinbase Global Inc, the largest U.S. cryptocurrency exchange, is displayed on the jumbotron of the Nasdaq MarketSite in Times Square in New York, the United States, April 14, 2021. Photo: REUTERS / Shannon Stapleton

Activity on Coinbase is dwarfed by that on Binance, the world’s largest cryptocurrency exchange. Binance’s daily trading volume of around $ 11 billion is almost ten times larger than Coinbase’s. The exchange is characterized by the large number of coins listed and its low transaction fees. Investors can trade 372 different coins and tokens on Binance, compared to just 74 on Coinbase.

Since 2018, Binance has offered customer protection through its Secure Asset Fund for Users program, which offers a partial refund of user assets if the exchange is hacked and funded through trading fees.

Binance recently made headlines for its troubled relationships with regulators in various jurisdictions. Last month, the UK’s Financial Conduct Authority (FCA) ordered Binance to cease conducting regulated activities in the UK. Binance claimed the FCA move would have no impact on UK users looking to trade through its Binance.com website, but Barclays subsequently blocked UK customers from sending funds to the company.

Continue reading: Why the UK banned Binance and what it means for your crypto assets

The FCA’s order was followed by similar interventions in Japan and the Cayman Islands, as well as a criminal complaint for unregistered operations in Thailand. Binance’s holding company is reportedly registered in the Cayman Islands, but the company has a less transparent corporate structure than publicly traded rival Coinbase.

Regulatory expert Wayne Johnson told Yahoo Finance UK that global regulators were trying to “get a grip on a payment technology that crosses national borders and is not subject to the rules and laws associated with fiat systems.”

Changpeng Zhao, CEO of Binance, speaks at the Delta Summit, Malta's official event for blockchain and digital innovation to advance cryptocurrency, in St. Julian's, Malta on October 4, 2018. REUTERS / Darrin Zammit Lupi

Changpeng Zhao, CEO of Binance, speaks at the Delta Summit, Malta’s official event for blockchain and digital innovation to advance cryptocurrency, in St. Julian’s, Malta, October 4, 2018. Photo: REUTERS / Darrin Zammit Lupi

In an open letter, Binance’s founder and CEO Changpeng ‘CZ’ Zhao wrote: “Binance has grown very quickly and we haven’t always done everything just right, but we are learning and improving every day.

“We hope to clarify and reiterate our commitment to working with regulators and to proactively recruit more talent and put in place more systems and processes to protect our users.”

In addition to pure crypto exchanges, people can also buy cryptocurrencies through traditional financial services apps like PayPal (PYPL) and Revolut.

Wherever you buy cryptocurrencies, you should always stay away from the risks. Regulators warn that cryptocurrencies could drop to zero, exchanges could be hacked, and investors could be wary of rug pulls where scammers get away with cash. Make sure you research both the project you are investing in and the platform you are using.

View: What are the risks of investing in cryptocurrency?

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Cryptocurrency

Why Ethereum Could Surpass Bitcoin In The Near Future – Crunchbase News

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By Ahmed Shabana

Even after major cryptocurrencies experienced a threatening collapse from their all-time highs in April, most have soared 200 percent to 300 percent or more from that point in the past year. Bitcoin is making all the headlines, and there are legitimate concerns about its roller coaster nature.

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But what about Ethereum? Ethereum was conceived in 2013 and is an open source platform that helps develop and implement new decentralized applications with the same core concepts as blockchain.

The difference between Ethereum and Bitcoin has caught the attention of large market players like Goldman Sachs, who recently advised investors that Ethereum has a good chance of surpassing Bitcoin’s market cap of $ 660 billion.

The Ethereum network holds more promise because of its real world applications and its ability to store value. Ethereum represents the future of programmable money and smart contracts in ways that older cryptocurrencies like Bitcoin cannot.

Ethereum simplifies worldwide payments

Since the Ethereum network supports the development of new applications in its infrastructure and enables their creation, it is potentially a more valuable resource in the long run. Ether (ETH) will be used to pay for these transactions, as last seen with the booming popularity of NFTs this spring. The result is a much higher usage rate for Ether with far more transactions than Bitcoin in the last 12 months.

Ahmed Shabana from Parkpine Capital

Despite the recent decline in cryptocurrencies, ether rose nearly 1,000 percent in the past 12 months, compared to the 300 percent increase in Bitcoin. Where a Bitcoin is a pure token of value – a currency that is backed by the perceived value of those who own it – Ethereum and the ETH blockchain fuel each other. The recent upgrades to the Ethereum network are helping it to scale much faster and lower transaction costs on the network, which further drives the price of the tokens up.

Instead of having a central instance that monitors how the applications run on the Ethereum network and which transactions are processed, Ethereum-based apps are booming. The most common types of these apps are DeFi. These apps saw 2,000 percent growth in 2020, with more than $ 16 billion in crypto assets stored in their logs by the end of the year.

The future of ETH

Ether started 2020 at $ 125.63 and grew nearly 500 percent to $ 729.65 by the end of the year. It hit $ 4,380 briefly in 2021, but has since hovered between $ 1,700 and $ 2,500, sometimes rising or falling as much as $ 1,000 in a single week.

The big question is where will ETH end in 2021. Many projections are relatively optimistic, with an average price target of between $ 3,500 and $ 4,500 by the end of the year and average long-term projections of $ 11,170 by 2025. However, there are some who see it even faster and more substantial during this time grows.

In a recent Forbes article, a panel of crypto experts including Sagi Bakshi and Lex Sokolin predict that ETH could climb as high as $ 19,842 by 2025 and that by the end of 2022, due to its growing utility in the world, it could increase the The most common cryptocurrency could be the marketplace.

These experts name a number of upgrades that will be made to the network in 2021 that will lower the currently high transaction costs and dramatically increase the benefits. An expert on the panel, Sarah Bergstrand, estimates that ETH could reach US $ 100,000 by 2025.

The biggest upgrade contemplated by investors is EIP-1559, which will overhaul the transaction fee system used by Ethereum. Instead of sending charges to miners who perform tasks on the network, users send the charge to the network itself, which wipes out the charge, reduces the overall supply, and then increases the value of the currency.

The future of cryptocurrency regulation

Ethereum represents a sustainable, function-oriented approach to cryptocurrencies that will support the future of DeFi. But many people stay on the sidelines waiting for government regulations to be implemented.

While longtime cryptocurrency investors lament the idea that regulations limit the freedoms currently available in the market, large investors and corporations see the inevitable implementation of such regulations as a source of stability that could lead to mass adoption.

After several months of chaos, the Biden government is examining how to tackle the markets. A congressional committee has been set up to review digital currencies, the FDIC has asked banks to provide documentation on how they use digital assets, and auditor Michael Hsu is reviewing all current and past guidelines on cryptocurrencies. The chairman of the US Securities and Exchange Commission warns bad actors of impending enforcement and regulation.

Overall, many view these changes as good. When markets are regulated, they become safer for everyday users, and Ethereum can go “normal” with the range of decentralized apps that support and enable it.

Ahmed Shabana is a venture capitalist, startup advisor, investor and entrepreneur. He is Managing Partner of Parkpine Capital, Founder of the Global Ventures Summit, and Creator of The Hungry Company.

Illustration: Li-Anne Dias

Stay up to date with the latest financing rounds, acquisitions and more with the Crunchbase Daily.

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Google’s New Cryptocurrency Ad Policy Goes Into Effect – Featured Bitcoin News

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Internet giant Google’s new advertising policy has come into effect. The company now allows certain cryptocurrency displays, such as: B. those that advertise the exchange of cryptocurrencies and wallets. Advertisers must meet certain requirements and be certified by Google.

Google now allows some crypto ads

Google’s new advertising policy for financial products and services, announced in June, has come into effect. A note on the internet giant’s website:

Starting August 3, advertisers offering US-targeted cryptocurrency exchanges and wallets will be able to advertise these products and services if they meet the following requirements and are certified by Google.

To be certified by Google, advertisers must either be registered with the Financial Crimes Enforcement Network (FinCEN) as a money services company or be a federally or state-recognized bank. They must also meet the relevant legal requirements and their ads and landing pages must comply with Google’s advertising guidelines.

In 2018, Google banned ads related to “cryptocurrencies and related content (including, but not limited to, Initial Coin Offerings)”. [ICOs], Cryptocurrency exchanges, cryptocurrency wallets and cryptocurrency trading advice) ”as well as advertisements for crypto-related“ aggregators and affiliates ”. Google then allowed selected crypto ads in the US and Japan.

Last June, Sydney-based law firm JPB Liberty filed a class action lawsuit against Google, Facebook and Twitter for banning cryptocurrency ads.

While the new policy allows certain crypto ads, Google still doesn’t allow ads for ICOs, defi-trade protocols, and those that “promote the buying, selling, or trading of cryptocurrencies or related products.” In addition, “ad targets that aggregate or compare issuers of cryptocurrencies or related products” are prohibited.

One of the prohibited ad categories is “Celebrity Cryptocurrency Recommendations”. Many scammers have taken advantage of Google and Youtube to promote fraudulent Bitcoin giveaways. Apple co-founder Steve Wozniak sued Google and Youtube last July for promoting Bitcoin advertising fraud using his name and likeness. However, the court ruled in Google’s favor.

What do you think of Google changing its policy to allow ads in cryptocurrency? Let us know in the comment section below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation to make an offer to buy or sell, or a recommendation or endorsement of any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Can I use cryptocurrency towards my house purchase?

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Cryptocurrency updates

I’ve invested a modest amount in Cryptocurrencies which I would now like to use to buy a house. However, my lender tells me they cannot accept this, and neither does the attorney I was hoping to use. How best to use these funds for this type of purchase?

Daniel Browne, Senior Associate at Kingsley Napley, says sellers currently have very little interest in accepting cryptocurrencies across the UK. If you want to use your crypto investments to buy a house, it usually involves converting them to a government-issued currency such as the pound sterling.

The aversion to cryptocurrencies stems in part from their high-profile association with crime and money laundering. The Proceeds of Crime Act 2002 makes it criminal to deal in any way with assets that a person knows or suspects to be the proceeds of crime. This applies to the owners of the assets and their professional advisers who are involved in the transaction.

However, while some lenders are reluctant to loan out some or all of the deposit from the crypto proceeds, some are now ready to do so (including Nationwide, Halifax, and Barclays). Look for a crypto-friendly lender as early as possible in the home buying process.

The challenge is to find a carrier who is willing to transfer the crypto proceeds to their customer account. There are not many.

Daniel Browne, Senior Associate at Kingsley Napley © Petteri Kokkonen

Money laundering regulations require transport companies to take steps to determine who their customer is and verify that the funds they receive from a customer are not the proceeds of crime. This means understanding the origin of the crypto assets, including how they were traded and with whom.

This typically involves the instruction of an expert who is able to conduct a full audit of the crypto proceeds used. This check can then form the basis on which the carrier can make a judgment as to whether the planned transaction can be carried out safely.

Can I apply for a death grant even though we were not married?

My partner recently passed away. We have two children under the age of 18 but we were not married. Can I receive a widow’s pension or some other type of death benefit?

Jo Edwards, Partner and Head of Family Law at Forsters, Says the UK’s main financial support to families after the death of a parent or partner is the Bereavement Support Payment (BSP). This replaced a number of benefits in 2017, including widow’s benefit (WPA), death benefit / widow’s pension and death benefit.

Jo Edwards, partner at Forsters © jameseppyphotography

Currently, BSP is limited to those who were married to the deceased or were in a civil partnership at the time of death. So I’m sorry to inform you that you are currently not eligible for BSP.

That will rightly change soon after the government suffers a string of court defeats for treating unmarried couples and their spouses differently when death ends their relationship. It has become increasingly difficult to justify this discrimination, especially since unmarried couples are the fastest growing family type in the UK.

Four years ago, Siobhan McLaughlin, who was not eligible for funeral money because she was not married to the father of her children when he died, brought this inequality to the highest court.

In August 2018, the Supreme Court found that the narrow eligibility rules for the old EPA violated human rights. She justified this by stating that the benefit is based on the obligations of the deceased and the surviving dependents towards their children, which are the same regardless of whether they are married or not, and that children should not suffer this disadvantage because their parents have decided not to marry.

This was followed by another court ruling in 2020, which found that the same eligibility requirements for the new benefit – GNP – are also incompatible, as children are discriminated against due to the legal status of their parents’ relationship.

After some delay, last month the government announced its intention to extend EPA and GNP entitlements to surviving unmarried partners with financially dependent children. The government intends to have the extended eligibility requirements apply retrospectively until August 30, 2018, with some applicants being eligible for retrospective payments.

As such, you may soon be entitled to GNP, provided you were living together at the time of your partner’s death and the other requirements are met. The changes apply to the whole of the UK.

GNP is paid in one of two installments, with an initial payment of £ 3,500 followed by 18 monthly payments of £ 350 for those eligible for child benefit or who were pregnant when their partner died, or £ 2,500 and then £ 100 per month in other cases (for those who do not receive child benefit). From the day of death, strict application deadlines apply, which can affect the amount received. In your case, you have 12 months from the date the new rules come into effect to receive the full amount.

The rules for WPA are different, but they don’t apply to your case. It is worth researching whether you are entitled to any death benefits that your partner may have accumulated (which are usually not limited to surviving spouses and domestic partners, but check the relevant policy) and whether you are entitled to any such benefits as part of their pension.

The opinions in this column are for general informational purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect consequences, including any loss, arising out of reliance on any response and disclaim all liability.

Do you have a financial dilemma for FT Money’s professional team of experts to investigate? Email your problem in confidence to money@ft.com.

Our next question

My wife and I have been married for 40 years. We are not separated and we do not want to either, but for family reasons she moved back to her home country Norway in 1995, where she now lives as my non-resident wife. We have agreed that after my death you will inherit all of my property and that she will divide it equally, one third each, between you and our two children.

I thought she was going to inherit my estate tax free but was told that it is not as she has not lived with me in the UK for 26 years. Does this mean you will only be given the £ 325,000 allowance and my children before paying 40 percent of Inheritance Tax (IHT) on the balance?

This seems unfair as we consider ourselves to be just as married as any other married couple. What advice can you give us to avoid or limit excessive IHT?

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