The real estate market of Hong Kong is said to be one of the most expensive in the world, alongside New York, London, and Sydney. Yet, crypto startups are moving into the most valuable skyscrapers in the city.

On August 22, CCN reported that BitMEX, a popular cryptocurrency exchange that facilitates Bitcoin and Ethereum margin trading, moved its headquarters to Cheung Kong Center’s 45th floor, renting out 20,000 square feet at $28.66 per square foot.

Its old headquarters were based in Victoria Harbor, a region within Hong Kong that is known for expensive residential properties. In Victoria Harbor, BitMEX paid around $3.18 per square foot and in Cheung Kong Center, BitMEX is paying $573,200 per month, at a rate of $28.66 per square foot.

BitMEX will operate its office in the most valuable skyscraper with Hong Kong alongside major financial institutions such as Bank of America Corp, Barclays Plc, Bloomberg LP, Goldman Sachs Group Inc and the Securities and Futures Commission of Hong Kong.

Banks are Moving Out of Skyscrapers

According to a report released by SCMP, a mainstream media outlet in Hong Kong, even major banks like Goldman Sachs and BNP Paribas have started to explore cheaper locations for their offices in Hong Kong due to rising rental fees.

Annual office rental costs in Hong Kong Central average around US$307 per square foot a year, a rate that easily surpasses London’s West End and Beijing’s Finance Street.

BitMEX and Diginex Global, two crypto startups based in Hong Kong, are renting out 72,000 square feet in total, paying around $1.3 million per month.

“Blockchain companies show no signs of slowing their expansion in Hong Kong. These firms are leasing space in top-tier office buildings to attract and retain talent.” Philip Pang, an associate director of office services at Colliers, told SCMP.

The local publication reported that Goldman Sachs is relocating from Hong Kong Central to Causeway Bay in the next few months to save 30 percent on rent. BNP Paribas has also relocated its office to Swire Properties’ Taikoo Place.

While JPMorgan has leased the Quayside in Kwun Tong near Victoria Harbor, the cost of rent comes nowhere close to the rent BitMEX will be paying throughout the years to come.

Landlords Not Confident in Crypto

Over the past nine months, despite the 80 percent drop in the valuation of the crypto market, cryptocurrency-related businesses have prospered. Specifically, exchanges have continued to generate large revenues.

However, local publications have reported that Cheung Kong Center demanded BitMEX to pay a year’s rent upfront, which is estimated to be around $6.8 million, demonstrating the lack of confidence in crypto-related businesses by major landlords in the Hong Kong real estate market.

“It’s pretty common for landlords to ask for larger deposits from tenants with weaker covenant strength. Landlords are always open to taking on new tenants, it’s just a matter of balancing rent against flight risk,” said Denis Ma, head of research at Jones Lang LaSalle.

With the one year’s rent at Cheung Kong Center, it is possible to purchase multiple story buildings in many major cities like Kuala Lumpur, Ho Chi Min, Tokyo, and Busan.

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It has not been smooth sailing for the Port of San Diego’s IT department this week following a cybersecurity breach.

In a statement, the Port of San Diego has disclosed that its computer systems were hit by a ransomware attack with the attackers demanding to be paid in bitcoin before they can decrypt files. According to the chief executive officer of the port, Randa Coniglio, the breach which was initially reported on September has led to the disruption of the IT systems of the agency. While acknowledging that the cybercriminals demanded ransom Coniglio did not reveal how much they were asking for.

“As previously stated, the investigation has detected that ransomware was used in this attack,” said Coniglio in a statement. “The Port can also now confirm that the ransom note requested payment in Bitcoin, although the amount that was requested is not being disclosed.”

FBI and DHS Now Involved

Perhaps an indication of the seriousness of the incident, the port facility located in San Diego County, California has called in the U.S. Department of Homeland Security (DHS) and the Federal Bureau of Investigation (FBI). The port is also closely communicating and coordinating with the U.S. Coast Guard.

While the IT systems of the port which handles nearly three million tons of cargo annually have been disrupted with some of them being proactively shut down out of caution, operations at the facility are going on normally with a few exceptions.

“The temporary impacts on service to the public are in the areas of park permits, public records requests, and business services,” added Coniglio.

Despite reports suggesting that cybercriminals are embracing cryptojacking malware at the expense of ransomware, incidents of the latter are still common though they have fallen by around 22.5% according to Kaspersky Labs, as CCN recently reported:

“The total number of users who encountered ransomware fell by almost 30%, from 2,581,026 in 2016-2017 to 1,811,937 in 2017-2018.”

Still Lucrative

Earlier this month, for instance, Midland, a Canadian town in the province of Ontario disclosed that it had paid ransom in bitcoin in order to obtain encryption software from hackers who had infiltrated its computer network. While regretting that it had given in to cybercriminals, authorities in Midland argued that they had been left with no other option.

Additionally, the servers of Professional Golfers Association (PGA) of America were last month compromised by hackers who decrypted files consisting mostly of creative materials meant for use in print and digital marketing communications. At the time the golfing body indicated that it would not pay the ransom.

But while some ransomware creators, such as those who targeted the PGA, may fail to hit pay dirt, this has not been the case with the makers of the SamSam ransomware who are estimated to have obtained bitcoins worth more than US$6 million since late 2015 per Sophos, a cybersecurity firm.

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AT&T has introduced a suite of blockchain solutions to allow enterprises in various industries to track and manage information more efficiently, the telecom giant announced on its website. The solutions include technology from Microsoft and IBM and can benefit users in industries ranging from manufacturing to retail and healthcare.

The company noted it is combining its “edge to edge” capabilities with distributed ledger technology (DLT). AT&T’s Internet of Things (IoT) solutions provide monitoring and automation capabilities to various business processes.

Manufacturing, Retail And Healthcare

For manufacturing companies, AT&T’s blockchain solutions can track the movement of goods through factories and monitor product quality from its creation to its delivery to the end user.

For retailers, the firm’s DLT services can ensure product authenticity by tracking its movement from order to delivery, as well as by reducing waste and unneeded stock.

For healthcare organizations, AT&T’s new products can support secure sharing of up-to-date patient records and directories.

Also read: IBM patents system that creates audited blockchain ‘checkpoints’

Tapping IBM And Microsoft

AT&T’s consulting team can design and manage solutions utilizing both IBM’s DLT platform and Microsoft Azure.

IBM Blockchain supports a wide range of industry use cases such as logistics, supply chain, and provenance. AT&T Solutions will integrate its AT&T Asset Management Operations Center with IBM’s Maximo Network on Blockchain and its Maximo Health Insights, providing reliable networks to manage infrastructure assets.

Microsoft Azure, built on an open, trusted cloud platform, supports a range of ledger protocols such as Corda, Chain, Quorum, HyperLedger Fabric and Ethereum. The platform also provides topologies for multi-member and single-member consortiums, as well as for testing and development.

“Blockchain is far more than just bitcoin or cryptocurrency. It’s transforming the way many companies conduct business,” Andy Daudelin, vice president of AT&T Business’s Alliances Business Development, said in the announcement. “Blockchain improves security and enables better management of transactions through complex processes. Utilizing our global network and IoT capabilities, AT&T enhances blockchain by providing edge-to-edge solutions that automate the tracking and that can even monitor the environmental conditions throughout the process.”

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The chairman of the Distributed Ledgers and Artificial Intelligence taskforce, Bitange Ndemo has advised the Kenyan government to tokenize its economy in order to deal with the increasing issues of corruption and uncertainty.

Ndemo made known his opinion during a meeting between the Kenyan ICT ministry stakeholders and members of the private sector. He noted that the East African country needs a digital currency that would stand side-by-side with fiat.

“We must begin to tokenize the economy by giving incentives to young people to do things which they are paid through tokens that can be converted to Fiat currency,” Ndemo said

Kenya is Open to Innovation

Kenya is one of Africa’s leading countries in terms of blockchain and cryptocurrency development. Some of the region’s largest blockchain remittances originated from Kenya. Beyond remittances, the East African nation is notable for the friendly environment that it provides for not just blockchain, but technological innovations in general.

Active legislative discussions over blockchain and cryptocurrency related programs show the interest that the Kenyan government have in blockchain technology. This is evident in the government’s effort towards finding proper regulatory frameworks for the technology over time.

In August 2018, the country’s electoral commision even showed signs of adopting blockchain technology in voting processes.

According to Ndemo, Tokens are like bonga points given by mobile operators or loyalty points given at the supermarkets, it can be converted to coins and used to buy goods of any choice by the user.

More Education Needed

The Distributed Ledgers and Artificial Intelligence task force which was inaugurated in March has earlier recommended a Central Bank Digital Currency to operate in fixed nominal terms and as a valid legal tender. This is an idea that has been abolished, or rather sidelined for the time being.

ICT’s Jerome Ochieng, however, noted that there needs to be an increased level of awareness about tokens and how to use them before any major steps can be taken. He sees public enlightenment in this area as a very crucial factor that must be put in place before any advanced government action.

“We are not very enthusiastic at the moment, of course, it will come, but we first want people to understand use of tokens”, says Ochieng.

Ndemo’s task force continues in its assignment to determine the appropriate and implementable use cases of blockchain technology within the Kenyan technological and economic environment. This will further enhance the country’s position as a hub for innovation and a fast developing nation, especially when it comes to innovation.

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Chinese billionaire and co-CEO of technology company Ideanomics Bruno Wu believes the blockchain could be the solution that helps African countries trade their minerals and natural resources efficiently and profitably.

Wu made the comment while speaking to entrepreneurs and investors at the Africa House Collective event, held in New York recently.

Wu’s company Ideanomics, formerly called Seven Starts Cloud Group, has invested heavily in artificial intelligence and blockchain companies through companies they acquired and partnered with. The tech company uses the new technologies to disrupt new markets. The U.S. based company recently announced a joint venture that removes intermediaries in the port supply chain.

Speaking on how Africa can leverage blockchain, Wu said digitizing asset production and distribution would put the continent on the forefront of the commodities market, same way it leads the mobile money market.

“Having a better tomorrow for Africa is about having a more transparent future. And blockchain can help there.”

In an interview with Quartz, Wu said his company is currently studying the African market and is open to partnering with countries such as Nigeria and Kenya.

He believes the continent can profit from adopting the blockchain technology and use it to save millions of dollars earned from the sale of commodities, which is often lost to corruption and money laundering.

Wu’s desire to see Africa profit from the blockchain technology follows a similar assessment from the CEO of diversified financial company Alexander Forbes Andrew Darfoor.

Darfoor had told CCN in an interview in Harare:

“Blockchain is something that we are investigating, and we are assessing it. I think blockchain has benefits, but I think it’s a broader digital strategy.”

Africa has a continent has been on the fence regarding the use of blockchain. It’s been a mixture of reticence and strong-handedness. So far, Kenya has been the focal point in the continent, where the government has set up a task force, hoping to study its benefits and challenges. This hasn’t stopped the adoption of the technology, as it’s being applied for elections and in the health sector. Other African countries like South Africa have taken it a step further by running a blockchain pilot for the banking sector to cut down processing time for settlement.

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A U.S. district court on Wednesday gave leave to the U.S. Commodity Futures Trading Commission (CFTC) to proceed with the lawsuit against Nevada-based My Big Coin Pay Inc. who had allegedly been operating a $6 million fraud, per the court’s Memorandum of Decision. The federal judge who presided over the case affirmed that the cryptocurrency in question falls within the definition of a commodity, and as a result gave the regulator the authority to charge for fraud since it falls within its jurisdiction.

The Alleged My Big Coin Scam

As the crackdown on virtual currency scams gained momentum, the CFTC pursued a case against technology entrepreneur, Randall Crater, and his corporate entity — My Big Coin — in January. Crater had allegedly perpetrated a $6 million fraud on naive individuals who were keen on purchasing the shady virtual currency.

In the lawsuit filed against Mr. Crater and My Big Coin, the CFTC accused the defendants of misappropriating $6 million from 28 clients by selecting a name that sounds like bitcoin and also claiming the cryptocurrency was backed by gold. The plaintiff further alleged the defendants falsely indicated the cryptocurrency had trading representation on several currency exchanges. Mark Gillespie, an associate of Crater, was also accused to have conned investors of their funds and then redirected such funds to personal bank accounts in connivance with Crater.

The defense counsel, however, attempted to dismiss the case on the grounds of virtual currency not being a tangible good or service on which futures contracts are being traded — the agency’s clear jurisdiction.

Judge Questions Both Parties

cryptocurrency derivatives CFTC
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In reaching his judgment on the definition of a commodity, U.S. Judge Rya Zobel in Boston put questions to the defendants and plaintiff about the operations of cryptocurrencies. Zobel did not unilaterally overrule Cater’s request for the case to be dismissed but maintained she would decide in the shortest possible time.

In her judgment, she noted that My Big Coin fell under the classification of a commodity in line with the definition of the Commodity Exchange Act which incorporates broad categories. Following her clarification on the commodity status of virtual currencies and bitcoin futures, the CFTC by extension can exercise its oversight function on other virtual currencies.

“That is sufficient, especially at the pleading stage, for plaintiff to allege that My Big Coin is a ‘commodity’ under the Act,” she wrote in Wednesday’s judgment.

Controversy Still Remains

The lacuna on the jurisdiction over cryptocurrency remains evident in the United States. Earlier this year, a judgment delivered by U.S. District Judge Jack Weinstein in Brooklyn stated that CFTC could regulate virtual currencies as commodities. This ruling was leveraged by Crater’s counsel, who disputed its application over bitcoin on which futures contracts are traded.

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Europe’s first dedicated blockchain research facility and the world’s first advanced blockchain identity laboratory has been launched in the Scottish capital of Edinburgh.

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Blockpass Identity Lab @ Edinburgh Napier University launches today! @scotlandis @BlockpassIDLab @EdinburghNapier

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Known as the Blockpass Identity Lab, the pioneering blockchain research facility will focus on exploring ways in which blockchain technology can be applied in protecting personal data online according to The Scotsman. Built at the Merchiston Campus of the Edinburgh Napier University, the laboratory is part of a £600,000 collaboration between the Hong Kong-based blockchain-based identity application firm, Blockpass IDN, and the Scottish university.

Under a three-year partnership, funding will be provided to support research staff, 5 PhD students and a virtualized blockchain environment. The facility will place emphasis on the key challenges revolving around identity as it seeks to build new data infrastructures that respect the privacy, rights and consent of netizens.

“This exciting work to explore how blockchain technology can protect personal data from online scammers and hackers carries on the tradition of innovation and excellence exemplified by John Napier [the Scottish mathematician that the Edinburgh Napier University is named after],” said Kate Forbes, the Scottish Minister for the Digital Economy.

Conferences and Hackathons

To mark the launch of the blockchain research facility there will be various activities held and this includes a conference on advanced cryptography, blockchain and digital identity. Additionally, there will be a hackathon where participants will be required to develop prototype applications that focus on blockchain, digital identity or other decentralized and distributed ledger technologies.

Plans for the research facility were initially announced in April this year. At the time the chief marketing officer of Blockpass, Hans Lombardo, cited various online data breach scandals which had served to make clear the risks that come with storage of sensitive personal data in a centralized location.

No Single Point of Failure

“We continue to see identity management at the forefront of blockchain and cryptography discussions as the price of consumer data abuses becomes clearer and more pertinent,” said Lombardo in a statement. “The creation of this lab in conjunction with Edinburgh Napier University will provide a space where further research and innovation can lead that discussion to newer and more advanced grounds.”

While much of the attention on data breaches has been focused on the United States and firms based there such as Equifax and Yahoo, Europe, where Blockpass Identity Lab will be based, is not alien to the problem as about 17% of the population is estimated to have fallen victim to identity theft, one way or the other. Last year, for instance, it was estimated that the cost of credit card fraud on the continent exceeded £1 billion leading to cancellations of the cards by more than 5 million people.

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SEPANG: Malaysia Airlines, which is rolling out new digital initiatives to enhance customer experience, is open to the possibility of accepting cryptocurrency as a payment option in the future.

“We are following very closely what is happening in this area. We see it more as a payment option at the moment but it could become more. I believe there are 1,500 cryptocurrencies out there so it is quite a large number, but they are quite volatile at the moment and not really regulated,” said chief commercial officer Arved von zur Muehlen.

“At the moment, we don’t see it as a payment option but soon, it could become one. If it becomes one, we will handle it as a payment option and blockchain allows us a peer-to-peer interaction with our customers. That could become something interesting,” he told reporters at a briefing on the group’s digital initiatives today.

Muehlen said at the moment, cryptocurrencies do not drive its customers’ experience but once it has reached a certain level of maturity, is less volatile, becomes regulated and is accepted by customers, the group will look at ways to integrate it into its product offering.

“When it becomes a viable payment option then it becomes very interesting for us. Then we will handle it as a payment channel as we handle other forms of payment. We have a lot of forms of payment. In China we allow Alipay, e-wallets, that’s something we are doing already,” he added.

Today, the airline introduced three new digital initiatives namely MHguardian, MHfeedback and MHchat.

MHfeedback is a mobile app that allows customers to immediately share their feedback and is already available for download.

MHguardian and MHchat are both in the trial stage and will be launched in the third and second quarters respectively. The former enables parents or guardians to track unaccompanied minors during their travel with the airline while the latter is an interactive Facebook Messenger BOT where customers can make bookings, payment and retrieve flight itinerary.

“Our studies show a continuous trend of mobile-first in aviation. More than half of Malaysians prefer to plan, research and book their trips via mobile,” said Muehlen.

Head of digital Peter Pohlschmidt said it has a huge pipeline of ideas and expects to launch another three or four more digital initiatives this year, in addition to the three already introduced.

Muehlen said the airline has stringent cost management but digital and customer products are two areas that are exempted from cost cutting. He said it has been prioritising investment in digital advancement over the past year but declined to reveal the investment cost.

“Every app, service or process we have launched in the digital space, the uptake was actually quite good, I would say above our expectations. We also see that our share of online sales has increased. We see interactions have increased. We get a lot of feedback and I think it is the way forward.”

He said the digital initiatives are aimed at providing customers with choices and enhancing their experience but will not replace human interaction as the digital initiatives will not replace travel agents, call centres or ticketing offices.

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Zebpay, one of India’s biggest cryptocurrency exchanges, has announced the shuttering of all exchange services on Friday following the central bank’s banking ban on the crypto industry.

Launch in 2015, Zebpay started trading with an app-only service that quickly became one of India’s most-downloaded bitcoin wallet and exchange apps. With a know your customer (KYC) model, Zebpay struck half a million downloads on Android – the country’s most-popular smartphone platform – in mid-2017 and quickly doubled to hit a million app downloads during 2017’s bear run in October.

The company forecasted up to half a million new users joining the platform every month at the time, up from 200,000 new users already joining the platform.

On its website, Zebpay indicates it has 3 million users using its iOS and Android apps, with support for 20 cryptocurrencies and 22 trading pairs.

Rumored to be in talks to raise an additional $4 million in funding at one stage, Zebpay is now stopping all exchange services at 1600 local time on Friday. The move is a direct consequence of a crippling policy introduced by the Reserve Bank of India (RBI), India’s central bank, to force all regulated financial institutions – including banks – from offering services to the domestic cryptocurrency industry.

In an announcement, Zebpay said:

The curb on bank accounts has crippled our, and our customer’s, ability to transact business meaningfully. At this point, we are unable to find a reasonable way to conduct the cryptocurrency exchange business.

All unexecuted crypto-to-crypto orders will be canceled, Zebpay added, with all tokens to be credited back to customers’ wallets. The wallet service “will continue to work” for customers to deposit and withdraw their coins, the company said. However, it remains to be seen if wallet gains development support in the future.

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We are stopping our exchange. At 4 PM today, we will cancel unexecuted orders & credit your coins to your Zebpay wallet. No new orders will be accepted. The Zebpay wallet will work even after the exchange stops.

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In late June, Zebpay warned that fiat withdrawals could become impossible ahead of the looming banking ban that took effect on July 5, 2018. A day before the banking freeze, the company stopped all fiat deposits and withdrawals at the exchange. Other exchanges, meanwhile, are finding novel ways to circumvent the ban.

Calls to Zebpay’s representatives went unanswered at press time.

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Former UBS executives raised $104 million to operate Seba, a strictly regulated crypto bank, with a banking license from Finma, the Swiss financial regulator.

The infrastructure of the cryptocurrency exchange market is improving rapidly with Bakkt, Coinbase, and major US-based banks like Citigroup, Morgan Stanley, and Goldman Sachs that have recently released their plans to operate crypto custodian solutions.

Market Decline is Not an Issue

Seba CEO Guido Buehler, a former managing director of asset servicing at UBS, stated that the company has already initiated the process of filing a banking license with Finma and is planing to file the final application by the end of October.

Speaking to Bloomberg, Finma spokesperson said that the agency has seen an increase in license applications from cryptocurrency businesses over the past few months and will issue licenses solely based on the business models and technologies employed by the companies.

“We are looking at every application and pursue a neutral approach to business models and technology,” the spokesperson said.

The all-star team of Seba led by CEO Buehler and chairman Andreas Amschwand, the former UBS global head of foreign exchange, currently employs 17 individuals and by the end of 2019, the company intends to appoint 17 more employees to expand to Singapore and Europe.

Switzerland ICO bitcoin

Already, Seba has raised $104 million from private investors and venture capital firms including Black River Asset Management AG and Summer Capital. As soon as the license is approved by Finma, the company will seek additional funding from investors to capitalize the bank and ensure it can protect the funds of its customers.

Seba is an investment bank and cryptocurrency exchange hybrid, allowing customers to hold and trade fiat and cryptocurrencies by relying on the company’s investment and asset management services. Structurally, Seba will operate similarly as major banks like Goldman Sachs and UBS in that it will offer traditional investment and asset management services tailored to cryptocurrency investors.

“Our vision is when you log in into your online banking, you’d have access to crypto and fiat within one account,” Buehler said.

In regards to the period in which Seba decided to launch its services and file an application with Finma, Buehler emphasized that the cryptocurrency market correction of 2018 poses no concern for the company and for its investors, as the short-term price movement of cryptocurrencies do not affect the long-term validity of the asset class.

“Market decline isn’t impacting my view. Short-term volatility does not undermine long-term validity of digital assets,” he added.

One of a Kind

Coinbase, Bakkt, BitGo, Goldman Sachs, and many other major financial institutions are currently working to strengthen the infrastructure of the cryptocurrency market. But, Seba offers a unique range of products that were previously not available to the cryptocurrency market, which may increase the interest of investors in the traditional finance sector towards cryptocurrencies.

As SEC commissioner Hester Peirce said, investing in cryptocurrencies through exchanges requires a specific set of knowledge and know-how and the vast majority of investors do not have that information to readily invest in the asset class.

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