Binance’s Partner Allows Users to Buy Crypto with Credit Card in JPY and CAD

Binance’s Partner Allows Users to Buy Crypto with Credit Card in JPY and CAD

Israeli-based fintech and crypto firm Simplex now supports two new fiat currencies — the Japanese yen and the Canadian dollar.

Israeli-based fintech and cryptocurrency firm Simplex now supports two new fiat currencies — the Japanese yen (JPY) and the Canadian dollar (CAD).

Following the addition, users at some of Simplex’s partner exchanges such as Binance will be able to buy crypto via credit cards using JPY and CAD, industry publication The Block reports Dec. 9.

Not all Simplex’s partner exchanges will be supporting JPY and CAD by default

Cointelegraph contacted both Simplex and Binance in order to confirm the news. Simplex’s spokesperson confirmed the report, noting that the company’s partners are now able to allow their users to buy crypto using CAD or JPY on their credit card. The representative hasn’t specified what companies would be first to enable the feature.

Binance hasn’t responded to Cointelegraph’s request for comment at the time of publication. This article will be updated upon receipt of those comments.

Simplex announced a new partnership with OKEx

In conjunction with new currencies’ addition, Simplex has also announced a new partnership with major cryptocurrency exchange OKEx. According to a tweet from Dec. 9, Simplex has partnered with OKEx to allow its users to buy Bitcoin (BTC), Ether (ETH), XRP, Bitcoin Cash (BCH) and Litecoin (LTC) via debit and credit cards.

The new feature is available on OKEx’s official website.

Simplex plans to add Russian ruble and Turkish lira soon

Additionally, Simplex CEO and founder Nimrod Lehavi reportedly revealed the company’s plans to add Russian rubles and Turkish lira support “very soon.” Lehavi claimed that Japan and Canada are not only two of the top markets for crypto but also “among the top 10 territories for credit card usage globally,” the report notes.

As previously reported, Simplex is a European Union-licensed financial institution and payments processing provider. With offices in Israel, the United Kingdom, the United States and Lithuania, the company provides “fraud-free” payment processing services to companies including Shapeshift, the Litecoin Foundation, Xapo and Changelly.

According to the report, Simplex supported three fiat currencies before adding CAD and JPY: the U.S. dollar, euro and the British pound. Alongside Binance, other partner exchanges include OKCoin, KuCoin, Huobi, and Poloniex, among others.

Binance partnered with Simplex to unlock credit card crypto purchases in January 2019.

Cryptocurrency Exchange OKEx to Launch Options Trading This Month

Cryptocurrency Exchange OKEx to Launch Options Trading This Month

Malta-based cryptocurrency exchange OKEx announced that it will launch crypto options trading on Dec. 27.

Malta-based cryptocurrency exchange OKEx announced that it will launch crypto options trading on Dec. 27.

In a press release on Dec. 9, the exchange said that the addition of options makes OKEx the “first crypto exchange to offer C2C, spot, futures, perpetual swap, and options trading under the same roof.” 

The options will allow the platform’s users to buy or sell an underlying asset after paying a premium. While real options trading will begin on Dec. 27, simulated trading is scheduled to start in just three days, on Dec. 12.

A major upgrade for OKEx

To implement options, the firm reportedly upgraded its entire system and infrastructure, including the addition of an anti-price manipulation system.

The option price is determined in real-time by employing the Black-Scholes pricing model, which considers volatility, option type, underlying asset price, time, strike price and risk-free rate. OKEx CEO Jay Hao commented:

“Options is a unique instrument that enable traders to manage, price and hedge the volatility of crypto assets with a combination of option contracts. It also gives a trader the ability to take advantage of more than just market direction. As the crypto market evolves, we aim to build a complete derivatives product suite, delivering solutions to optimize users’ trading strategies.”

Users wanting to access OKEx’s options trading service must first undergo Know Your Customer procedures and pass a suitability test proving that they understand the products they are buying.

The competition in the cryptocurrency derivatives space is seeing an ever-growing number of products being announced and released. In one of the latest examples, the Chicago Mercantile Exchange Group announced that it expects to launch options on its Bitcoin futures on Jan. 13, 2020.

OKEx Secures Support From Four New Partners for Its Utility Token OKB

OKEx Secures Support From Four New Partners for Its Utility Token OKB

Malta-based cryptocurrency exchange OKEx has secured support from four new partners, including hardware crypto wallet Ledger, for its utility token OKB.

Malta-based cryptocurrency exchange OKEx has secured support from four new partners, including hardware crypto wallet Ledger, for its utility token OKB.

OKEx announced the news in a press release shared with Cointelegraph on Nov. 22, detailing that it had partnered with Ledger, Vietnam-based over-the-counter exchange Aliniex, fiat-to-crypto exchange Bvnex, and virtual blockchain-powered retailer Cryptomall.

Bringing crypto trades into the mainstream

The collaboration is aimed at moving the OKB ecosystem into the mainstream, as well as making it more comprehensive for its global user base. The company specified in the release, that OKB will be listed on Ledger’s hardware crypto wallet, Aliniex and Bvnex. Aliniex, which enables users to purchase and sell digital currency with Vietnamese Dong (VND), will also support OKB/VND trades.

Cryptomall — a marketplace that maintains transaction records on the blockchain — will now accept OKB, thus giving OKEx users’ access to more than 1 million products. Andy Cheung, head of operations at OKEx, said that the partnerships will “expand OKB’s utility, making it easier for traders to participate in the cryptocurrency markets all over the world.”

OKEx’s other recent developments

Earlier in November, OKEx launched Bitcoin (BTC) futures contracts that are margined with the Tether (USDT) stablecoin. Previously, OKEx announced its intention to launch USDT-settled futures trading with up to 100x leverage at the end of October. After conducting a simulation that began on Nov. 5, the exchange listed the BTC/USDT offering on its trading platform.

In late October, OKEx announced that it was joining Klaytn, a global public blockchain platform developed by Kakao subsidiary Ground X. The exchange called this partnership an opportunity to build a stable blockchain ecosystem and connect to different networks and portfolios in the blockchain industry.

Crypto Exchange OKEx Launches Bitcoin Futures Margined With Tether

Crypto Exchange OKEx Launches Bitcoin Futures Margined With Tether

Cryptocurrency exchange OKEx announced the launch of its Tether-margined Bitcoin futures contracts.

Cryptocurrency exchange OKEx has launched Bitcoin (BTC) futures contracts that are margined with the Tether (USDT) stablecoin. OKEx announced the new offering in a press release on Nov. 14.

OKEx first announced its intention to launch USDT-settled futures trading with up to 100x leverage at the end of October. Now, after conducting a simulation that began on Nov. 5, the exchange listed the BTC/USDT offering on its trading platform.

The exchange previously said that offering a stablecoin-based derivatives contract will make it simpler and more efficient for traders to navigate the market and calculate risk. OKEx CEO Jay Hao commented:

“The simulation of our USDT Futures Contract was very successful, and we received positive feedback from traders in the OKEx community.”

The derivative in question is quoted and settled in USDT and each BTC/USDT contract has a face value of 0.0001 BTC and has an available value range of 0.01 to 100 times. The platform’s users can take both long and short positions on the contract.

More assets to come

In the future, OKEx will also launch USDT-margined futures for other crypto assets. More precisely, the firm announced plans to launch such contracts for EOS, Ether (ETH), Litecoin (LTC), Bitcoin Cash (BCH), XRP, Ethereum Classic (ETC), Tron (TRX), and Bitcoin SV (BSV).

As Cointelegraph reported yesterday, Bakkt announced that its Bitcoin futures trading on the Intercontinental Exchange will expand to include a cash-settled option.

Crypto Exchange OKEx Is Listing Tezos With Bitcoin, Tether Pairs

Crypto Exchange OKEx Is Listing Tezos With Bitcoin, Tether Pairs

The world’s 3rd largest crypto exchange OKEx has announced it will be listing Tezos later this week.

The world’s 3rd largest crypto exchange OKEx has announced it will be listing Tezos (XTZ) later this week.

In an announcement shared with Cointelegraph on Nov. 4, OKeX said that XTZ deposits will be available as of 09.000 UTC on Nov. 6, with XTZ spot trading against Bitcoin (BTC) and Tether (USDT) to launch at 9.00 UTC on Nov. 7. 

XTZ withdrawals will be functional from 09.00 UTC on Nov. 8.

Driving participation

Tezos — founded by former Morgan Stanley analyst Arthur Breitman and Kathleen Breitman — is a multi-purpose blockchain platform that supports decentralized applications and smart contracts. 

The open-source protocol uses a proof-of-stake (PoS) consensus algorithm, with stakeholders able to govern upgrades to the core protocol and governance structures in a way that avoids having to hard fork the blockchain. These principles of sustainable flexibility and open participation are ostensibly intended to drive the widespread adoption of the technology. 

In a statement, OKex Head of Operations Andy Cheung said:

“Tezos is a highly respected project with a robust community, and we’re happy to be able to add the value of the XTZ network to the OKEx ecosystem.”

Binance’s prior moves

OKex’s listing of Tezos follows its recent announcement of plans to launch Tether futures trading, offering a linear futures contract with leverage of up to 100x. USDT Futures Contracts will be launched on Nov. 14, with USDT Perpetual Swaps slated for Nov. 30.

This fall, OKEx was prompted to refute fresh allegations from the Blockchain Transparency Institute that wash trading is purportedly rife on its platform.

In late September, Binance listed Tezos trading, with pairs against Tether, Bitcoin and native exchange token Binance Coin (BNB). The exchange swiftly followed the listing with a rollout of a dedicated staking platform, enabling its users to stake their holdings (in custodial wallets) and earn rewards without having to set up their own nodes.

In October, Binance’s research arm argued the case for the transformative impact that staking will have on the crypto industry, proposing that Ethereum’s pending switch to the algorithm will accelerate the process.

Not a Fee, But ‘Long-Term Payment’ — How Crypto Exchanges List Tokens

Not a Fee, But ‘Long-Term Payment’ — How Crypto Exchanges List Tokens

Even though cryptocurrency exchanges claim to not call them listing fees, they still accept payments before adding tokens to their platforms.

Visit the website of any stock exchange platform, like the Nasdaq or the New York Stock Exchange, and the listing fees for new companies are there to see. There is hardly any controversy when it is clearly stated like this, but the same cannot be said for the cryptocurrency space. Here, numerous reports show that crypto exchanges are being decidedly opaque about the structure of their listing fees.

Take Blockstack, for example: A recent filing with the U.S. Securities and Exchange Commission revealed a $250,000 payment to Binance in its listing of STX token. The cryptocurrency trading giant, however, denied reports that the payment constituted a listing fee.

Likewise, some major exchanges say they have no listing fees, but reports abound of projects being charged significant sums to have their crypto tokens added to the trading catalog. Other platforms looking to cash in on this goldmine reportedly engage in wash trading, obtain false trading volumes, and charge exorbitant fees for the right to list tokens on their platforms.

There are even suggestions that some exchanges go on to pump these tokens after charging the expensive fees. Once the tokens reach a certain price ceiling, a massive dump follows, and the exchanges purportedly make an extra profit.

Listing fees or no listing fees?

As reported by Cointelegraph on Oct. 28, Blockstack’s SEC filing shows Binance receiving the sum of $250,000 tagged as a “long-term payment” to keep STX listed on the exchange for a year. Blockstack will also make three similar payments of 833,333 STX (currently worth $250,000) to cover for an additional three-year listing period plus an additional $100,000 marketing fee.

In total, Blockstack is committing to about $1.1 million in “fees” over a four-year period. This revelation calls into question a previous statement from Binance that it did not charge Blockstack any listing fee for adding STX to its platform.

Cointelegraph reached out to Binance to get a better understanding of the matter. According to a Binance spokesperson, the crypto exchange did not charge Blockstack any listing fee, and that “a long term payment fee is an incentive proposed by Blockstack for Binance to keep the token listed on the exchange. This is a new payment fee proposed by Blockstack.”

The Binance spokesperson’s claim that the $250,000 payment was Blockstack’s idea was corroborated by Blockstack CEO Muneeb Ali, who told Cointelegraph: “Their standard agreement has a listing fee which is called the ‘Technical Integration Fee’. The technical integration fee is $0 as publicly disclosed in the filing.” The Blockstack chief further revealed that the long-term payment was a unique agreement proposed by his company. According to the Blockstack CEO:

“This long-term payment is meant to watch out for the Blockstack ecosystem by incentivizing Binance to list Stacks over many years and aligns well with our long-term focus. The marketing fee is a joint marketing campaign that we plan to run later on, again that is not a ‘listing fee’ but a marketing campaign that we plan to launch in the near future.”

So, to recap, Binance did not charge a listing fee for Blockstack’s STX token. However, Blockstack offered to pay $250,000 as long-term payment to keep its token on the Binance exchange. When asked about the platform’s standard listing practice regarding fees, the Binance representative revealed that the exchange does charge listing fees, though this long-term payment fee was not listing fee, adding that listing fees are usually charged to cover the cost of integrating a token into the platform.

What some cryptocurrency exchanges say

Binance updated its listing fee in October 2018, promising to ensure transparency in its altcoin listing process. At the time, the exchange giant announced that it will be donating all listing fees to charity via its nonprofit Binance Charity Foundation. Given Binance’s explanation that the $250,000 payment received from Blockstack isn’t a listing fee, it seems highly unlikely that the exchange will donate that sum to charity. Binance also has a marketing fee, which was explained by the spokesperson:

“The marketing payment is an amount of tokens sent to us which will be used as rewards for any promotion to be run on Binance.com in the future and will be 100% given to users as rewards, including but not limited to trading competition, community airdrop, etc. Binance has taken no fee or revenue from this amount.”

The Binance representative did, however, state that such payments do not factor into the decision to list a token. Binance CEO Changpeng Zhao once famously quipped:

“We don’t list shitcoins even if they pay 400 or 4,000 BTC. Question is not ‘how much does Binance charge to list?’ but ‘is my coin good enough?’ It’s not the fee, it’s your project! Focus on your own project!”

These comments came after Christopher Franko, creator of blockchain platform Expanse, claimed that a Binance representative demanded $2.6 million to list its project’s token. There are numerous similar stories where projects claim crypto exchanges have charged them fees as high as $15 million to be listed on their platforms.

Binance DEX charges a standard flat listing fee of 1,000 BNB. Earlier in 2019, the Binance CEO declared that the fee was necessary to raise the minimum entry barrier on the platform to prevent adding tokens with little or no economic and technical viability — or as they are colloquially known, shitcoins.

Even when there isn’t any listing fee, projects typically have to put up some form of advance payment before their tokens appear on these platforms. Exchanges say these payments help them to market the new token listing as well as take care of sundry administrative costs. OKEx, another major crypto exchange, does not charge listing fees. Commenting on the matter, Andy Cheung, head of operations at OKEx, wrote to Cointelegraph:

“We don’t have a standard listing fees. Some 3rd party cost could incur such as compliance, legal and due diligence of the project when it comes to listing, depending on the complexity of the token structure and design.”

The OKEx executive also maintained that the platform does not charge integration or other tech-related fees, declaring, “We believe as an exchange we should support as many as protocols as possible so to support a variety of token for our Users. The cost that we are paying is the time in testing and integration.”

Cointelegraph also reached out to Kraken for comments about its listing process. A spokesperson for the cryptocurrency exchange revealed that Kraken does not charge listing or integration fees, declaring:

“Kraken maintains a rigorous listing evaluation that incorporates a cross-functional team including Business Development, Kraken Intelligence, Legal, Compliance, Product and Engineering. As with everything we do, we have been deliberate in our listing approach to design a process with a strong rationale for new assets listed on our exchange.”

Should listing fees be a controversial issue?

Some critics rail against the existence and magnitude of listing fees charged by cryptocurrency exchanges. Ethereum co-founder Vitalik Buterin famously protested the activities of centralized platforms, remarking that he hoped they would “burn in hell.”

At the time, exorbitant listing fees formed part of Buterin’s grouse with centralized crypto exchanges, adding that they essentially had the power to make or break crypto projects. Some crypto exchange stakeholders like the Binance chief did take Buterin to task for his comments, highlighting the fact centralized platforms have played a huge role in the development of the digital currency market.

According to Cheung of OKEx, crypto exchange platforms have to a strike a balance between enabling greater participation in the ecosystem and maintaining the integrity of their token listing process: 

“We firmly believe that a long term approach to working with quality token teams is the key to successfully fostering a healthy ecosystem and providing our community with a variety of sustainable, interesting, and useful tokens to trade.”

Buterin isn’t the only crypto founder to lambast exchanges on account of listing fees. In 2018 tweet, the Bancor team accused platforms of charging more than mainstream stock exchanges like Nasdaq.

The tweet also brought up the fake trading volume — an issue that is not unrelated to discussions surrounding cryptocurrency exchange listing fees. According to several reports, most exchanges exaggerate their trading volume figures in the hopes of commanding higher listing fees.

The opaque nature of the listing process on crypto exchanges also arguably contributes to the air of controversy surrounding the issue. In the absence of publicly stated listing procedures — as is common with mainstream stock exchanges — rumors and speculation take center stage. According to the spokesperson from Kraken, cryptocurrency exchanges need to do more in lifting the veil of their listing processes, remarking:

“It’s important to educate the marketplace about the listing fee process. When an exchange lists a new asset, it takes on the financial, security and regulatory risks associated with listing an asset.”

There is an argument to be made that libertarian ideals form the core of the cryptocurrency philosophy. In this regard, exchanges charging fees at all — let alone demanding seven-figure payments — is a reality that shouldn’t sit well with cryptocurrency purists.

Thus, while it is standard for listing agreements on the likes of the NYSE and Nasdaq to have fees, the existence of such for cryptocurrency exchanges remains a topic of considerable discontent.

Are Stablecoin Futures Built to Last?

Are Stablecoin Futures Built to Last?

If a stablecoin is truly stable, why is a futures contract needed, as there is no risk to hedge?

OKEx, the world’s fifth-largest crypto exchange, announced on Oct. 29 plans to launch Tether (USDT) futures trading, featuring a linear contract with leverage of up to 100x. Stablecoin futures, the exchange said, offer a simpler and more efficient means to navigate the market, and could open the door for many new retail traders.

Related: Bitfinex Cries Fraud as Crypto Capital Executive Indicted by US

This news prompted a few murmurs. Stablecoin provider Tether, after all, has been the subject of some unsettling news stories, as Cointelegraph recently reported.

Is USDT broken?

Kevin Batteh, who serves as the Chamber of Digital Commerce’s chief policy advisor, a partner at Delta Strategy Group and CEO of Jenga Advisors, told Cointelegraph that stablecoins, by definition, are meant to be a stable proxy for the underlying measure of value they represent. 

So, for example, one unit of USDT should be worth one United States dollar. The market may price in some small differential for ease of use, redemption costs, cost of carry, etc., but for something like a USD stablecoin, that differential should be marginal. Batteh added:

“If there is great interest in a USDT futures contract that would tell me that USDT is broken and that there is a lack of trust in Tether. If a stable coin has auditable reserves backing the coin, transparent governance, etc, then there probably wouldn’t be interest in a futures contract — because there is very little risk to hedge.”

Batteh added that the new USDT futures product would be illegal if offered to a U.S. person, because Malta-based OKEx is not a U.S.-registered exchange. 

A Rorschach test?

Others, however, don’t see it quite this way, particularly Asian-based traders and exchanges. Indeed, Tether, seems to present a kind of Rorschach test: Your perception of it depends on whether you look at it from an Asian or United States perspective. 

USDT is actively traded and trusted in Asia, CEO of Seychelles-based crypto exchange CoinFLEX Mark Lamb told Cointelegraph. In the West, by contrast, trust in Tether is low. In January, CoinFLEX introduced a new stablecoin-to-stablecoin futures contract that offered Tether against Circle’s USD Coin (USDC). 

Tether is the most popular stablecoin by far, and its $4.2 billion in market capitalization ranks it fifth among all cryptocurrencies (stablecoins and nonstablecoins included). It is also among the most widely traded products in the cryptocurrency industry, with its current trading volume being the second-largest after Bitcoin, according to Coin360.

Over the past year, USDT’s price has ranged from a low of $0.98 (Nov. 19, 2018) to a high of $1.03 (Dec. 29, 2018). By comparison, Gemini Dollar (GUSD) — a stablecoin collateralized by USD held at State Street Bank and audited every month by San Francisco accounting firm BPM to ensure its dollar reserves match up — fluctuated more over the same period, from a low of $0.98 (Dec. 14, 2018) to a high of $1.06 (Dec. 19, 2018). One might have expected the opposite to be the case if traders were seriously worried about Tether’s reserves.   

An alternative to the banking system

One attraction of crypto derivative exchanges is that they allow investors to sidestep the traditional banking system. At exchange BitMex, for instance, collateral can be posted in Bitcoin (BTC) as opposed to U.S. dollars. 

In Asia, many retail customers do not have access to U.S. dollar accounts. But on stablecoin-supported crypto exchanges, they can trade Bitcoin (purchased with local fiat currency) against stablecoin dollars, without getting involved with the banking system. Lamb added:

“Stablecoin creates something that is an alternative to an exchange using banking services. It is the bridge between the fiat world and the crypto world and it’s like a gateway for people to crypto from fiat.”

Many U.S. and Western banks have been reluctant to work with crypto exchanges because they are unregulated, and this effectively means the exchanges can’t settle trades in USD. Timo Schlaefer, CEO of Kraken Futures, told Cointelegraph:

“A trading platform may use stablecoins in settlement in an effort to avoid using U.S. dollars and associated payment rails.”

Asked if his firm, which is based and regulated in the United Kingdom, would be introducing a stablecoin futures product in the future, he answered, “I would never say never, but one advantage we have as an exchange is that we are regulated, so we find it easier to settle in fiat currency.”

At CoinFLEX, which focuses on the Asian professional retail trader market, traders can place bets with up to 20 times leverage. As noted, OKEx will allow up to 100 times leverage when its USDT Futures Contracts are launched on Nov. 14. In addition, BitMEX offers up to 100x leverage on its derivatives offerings.

Related: Are Trading Vehicles Dragging Crypto Into Maturity?

Leverage is a double-edged sword, though. It can be a hedge against risk, but it can also be a speculative tool, and too much speculation can upset markets. According to Batteh, who is also a former enforcement lawyer, stablecoin futures are arguably more of a speculative tool than hedge:

“To the extent there is uncertainty around the stability of a ‘stablecoin’ then the futures contract can serve a risk management purpose. With 100x leverage, though, it seems to me they are marketing to speculators, not hedgers.”

Lennix Lai, the financial market director at OKEx, rejected the implication that the new stablecoin futures product is inherently speculative or risky. He told Cointelegraph, however, that he would not recommend novice traders engage with such a highly leveraged product, adding that: 

“We think a Tether-based product is definitely an easier product to understand than other futures in OKEX which are margined at its underlying [asset]. Btcusd futures mean you have to margin with BTC, for example.”

He also emphasized that 100x is the maximum leverage that a trader can deploy, with 0.01 acting as the minimum accepted amount.  

New records

While Kraken Futures’ Schlaefer currently has no particular interest in stablecoin futures trading, he still expects derivatives to power the growth of the crypto markets. Over the past year, futures volumes have been gaining strongly versus spot trading. In late October, Kraken Futures set a record $368 million in trading volume over a single 24-hour period. 

Lamb, too, anticipates that the crypto derivatives market will expand dramatically and dwarf — by twentyfold — the Bitcoin spot market by the end of 2020. It’s an evolutionary process, and derivatives will be the drivers of growth, he said. 

But this kind of exponential growth is being held back by the lack of physical delivery, according to Lamb. Cash-settled trades, which are employed at the largest exchanges like the Chicago Mercantile Exchange, have eroded trust in the process, particularly in the prevention of index manipulation.

This is because cash-settled futures exchanges use an index for settlements and margin calls. These indexes are constructed by tracking the average or median prices of some major spot exchanges, which are much less liquid than futures products, and that makes these cash-settled exchanges easily manipulable. Lamb added:

“If you place an order that is big enough to move the price of one or more of these spot exchanges, you can make the index price move in your favor and benefit from the highly leveraged futures exchange at a relatively cheap cost.”

But do other exchanges expect to introduce stablecoin derivatives in the near or distant future? Rahwa Berhe, head of digital assets at crypto exchange Bittrex, told Cointelegraph, “As the market matures, so do the needs of our customers and we at Bittrex are listening very closely.” She also added: 

“The largest obstacle the industry faces for stablecoin derivatives to become viable is clear regulation and adequate protection for users.” 

A necessary stopgap?

Historically, price volatility has been one of the highest barriers inhibiting cryptocurrency acceptance. Futures trading has been seen as one hedge against this volatility. Stablecoins, too, were developed specifically to ensure the stability of a crypto’s price. 

In a sense, stablecoin futures seem almost redundant. But given that many crypto exchanges are unregulated and lack access to Western banks, they may be using stablecoins as a proxy for U.S. dollars in settling trades. 

As the industry matures, however, and these smaller exchanges grow and become regulated, they may gain access to U.S. dollars. At that point, it should become clear whether stablecoin futures are built to last — or are a short-term stopgap.

OKEx to Launch USDT Futures Trading With Up to 100x Leverage

OKEx to Launch USDT Futures Trading With Up to 100x Leverage

The world’s 5th largest crypto exchange OKEx is planning to launch Tether futures trading, offering a linear futures contract with leverage of up to 100x.

The world’s 5th largest crypto exchange OKEx is planning to launch Tether (USDT) futures trading, offering a linear futures contract with leverage of up to 100x.

According to a press release shared with Cointelegraph on Oct. 29, the contract will have daily settlement and offers supported pairs with Bitcoin (BTC), EOS, Ether (ETH), Litecoin (LTC), Bitcoin Cash (BCH), XRP, Ethereum Classic (ETC), Bitcoin SV (BSV) and Tron (TRX).

Stablecoin-based derivatives can simplify trading

OKEx argues that offering stablecoin-based derivatives contracts will offer a simpler and more efficient means for traders to navigate the market and calculate risks.

A USDT-based derivative, in particular, will purportedly reduce the hassle of needing to switch between cryptocurrencies for those who book their profits and losses in USD value. 

Lennix Lai, Financial Market Director at OKEx, has indicated that the exchange platform could roll out further USD-based stablecoin derivatives to provide similar, simplified hedging instruments.

Lai also pointed to the reasons behind the exchange’s choice to offer linear — rather than inverse — futures contracts for USDT:

“Most of the time, users are not willing to hold altcoins as margin, and they also see inverse contracts itself are complicated to understand. We see this linear contract would be an open door to many new retail traders.”

Nov. 6 launch date

USDT Futures Contracts will be launched on Nov. 14, and simulation will start on Nov. 5. USDT Perpetual Swap will be launched on Dec. 9, and simulation will start on Nov. 30.

For USDT futures, the contracts will have a fixed delivery date, with the price set at the mean value of the index at the hour preceding delivery. OKEx has indicated that it will use a mark price to calculate users’ unrealized Profits and Losses (PnL) to mitigate unnecessary liquidation in volatile market conditions.

A daily settlement process will move unrealized PnL into realized PnL to ensure higher flexibility of capital utilization. The platform is also offering hedging tools such as insurance to assist traders.

OKEx had confirmed its intentions to launch USDT futures in late September — the same day as the exchange was once again prompted to refute fresh allegations of manipulative practices such as wash trading on its platform.  

Earlier this month, Binance’s newly-launched Bitcoin futures product was an outlier in the crypto spot and derivatives markets, hitting a $700 million record as other platforms saw lackluster activity.

Crypto Exchange OKEx Joins Internet Giant Kakao’s Blockchain Project

Crypto Exchange OKEx Joins Internet Giant Kakao’s Blockchain Project

Cryptocurrency exchange OKEx is joining Klaytn, a global public blockchain platform developed by Kakao subsidiary Ground X.

OKEx announced that it is joining Klaytn, a global public blockchain platform developed by Kakao subsidiary Ground X.

On Oct. 25, OKEx wrote in a press release that blockchain project Klaytn will be onboarding the crypto exchange into their ecosystem aiming to expand blockchain adoption.

OKEx is joining a number of industry giants such as Samsung Blockchain, IDG Capital, and Shinhan Bank. The exchange called this partnership an opportunity to build a stable blockchain ecosystem and connect to different networks and portfolios in the blockchain industry. Andy Cheung, Head of Operations of OKEx, commented on the partnership:

“Exchanges and projects itself should work together to define and adopt standards that will promote digital asset adoption globally.”

Recently, cryptocurrency exchange Binance joined Klaytn’s governance council. Binance, together with another 24 member companies such as LG Electronics, Unionbank of the Philippines and Celltrion, will make key decisions for Klaytn’s business and technical developments.

OKEx announces 14 new partnerships

Following the news of OKEx joining Klaytn, the exchange reported in a press release that it had established another 14 partnerships with service providers to promote the adoption of its utility token OKB. Cheung said:

“The 14 new partnerships is a shot in the arm for OKB. Together with our community, we will continue to explore the possibility of OKB. By offering a wider array of applications, OKB holders will be able to enjoy the fruit of blockchain technology and the appreciating value of our token.”

Accusations of wash trading 

In September, OKEx refuted allegations of manipulative practices such as wash trading on its platform. The exchange said that the allegations made in a recent report from the Blockchain Transparency Institute (BTI) were “not accurate and misleading.”

Bitcoin Price: Which Countries Have the Biggest Premiums?

Bitcoin Price: Which Countries Have the Biggest Premiums?

Crypto price premiums are a thing! Which countries suffer the most and how big is the difference in price for a Bitcoin?

Up until early 2018, major cryptocurrency markets the likes of South Korea and Japan demonstrated high premiums for Bitcoin. At the 2017 peak, when the Bitcoin price was trading at around $20,000 in the U.S. spot market, Bitcoin was being traded in South Korea’s cryptocurrency exchange market for around 26,000,000 Korean won, equivalent to about $22,000. This difference is now known as the Kimchi premium.

Since then, starting with the introduction of various regulatory frameworks by South Korea to reduce regional premiums that included the prohibition of trading cryptocurrencies with foreigners in the local market, premiums in major markets have declined substantially.

Still, due to the lack of supply and the relatively high demand in some markets, Bitcoin is being traded at a premium in certain regions — some higher than most. 

Hong Kong’s OTC Bitcoin market: 2% to 4%

Following the prohibition of cryptocurrency trading by the People’s Bank of China, local banks in China were ordered not to work with local Bitcoin exchanges to prevent individuals and businesses from trading digital assets. Over time, the government of China also ordered payment processors such as AliPay to stop processing Bitcoin exchange-related transactions, according to report form Chinese blockchain publication 8BTC. 

But reportedly, individual investors have continued to invest in Bitcoin after the ban. The imposition of a ban on cryptocurrency trading by China forced investors to move over to neighboring countries like Hong Kong, essentially initiating trades in a peer-to-peer manner.

On the over-the-counter (OTC) trading platform of OKEx, for instance, investors can trade Bitcoin using Tether (USDT), a stablecoin backed by the U.S. dollar, and then sell the USDT for the Hong Kong dollar. The premium on Bitcoin emerges when investors exchange USDT that they use to buy or sell Bitcoin for HKD, similar to most peer-to-peer OTC markets. On OKEx, USDT is being traded at around $1.02 to $1.04, which indicates a premium ranging from 2% to 4%.

Japan and South Korea: 0.2%

Most fiat-to-crypto exchanges in Japan and South Korea more or less follow the price trend of the U.S. spot market for Bitcoin. On Upbit and Bithumb, two of the biggest cryptocurrency exchanges in South Korea, Bitcoin is being traded at 9,900,000 Korean won, equivalent to $8,365. On Coinbase, Gemini and Kraken, Bitcoin’s price, as of Oct. 12, 2019, is hovering at around $8,345, indicating a slight premium of less than 0.25%.

While South Korea remains a relatively small market in comparison to Japan, the U.S. and Hong Kong, the prohibition on foreigners trading cryptocurrencies has eliminated a large portion of the demand for cryptocurrencies. In the 2017 bull market, the majority of large-scale trades in the South Korean market are said to have come from Japanese and Chinese investors and miners, decreasing the supply of exchanges.

The Japanese exchange market is also showing a slight premium of 0.2% and has seen most of its premium decline in the past two years. For spot or brokerage buys, which involve a direct wire transfer or a transaction through a payment processor directly to the exchange, there is a premium of 3.59%. On BitFlyer’s brokerage, the price for Bitcoin buys is estimated to be 936,621 Japanese yen, which is equivalent to $8,635 — nearly $300 higher than the global average spot price.

Malaysia, Philippines, Thailand: 1%–3%

The cryptocurrency exchange markets of Malaysia, the Philippines and Thailand are mostly dominated by brokerages such as Coins, which is the largest exchange in the Philippines and was acquired by the largest ride hailing app in Indonesia called Go-Jek. Coins, which has more than 5 million users in the Philippines alone, enables users to buy or sell Bitcoin based on precalculated price like BitFlyer’s brokerage, which also typically sees a premium of over 3%.

On Coins.ph, the Philippines arm of Coins, Bitcoin has a buy price of 440,280 pesos, around $8,530, indicating a premium rate of 2.2%. BuyBitcoin.ph, the second most widely utilized brokerage in the Philippines, has a buy price of 443,300 pesos, showing a premium close to around 3%. On Coins.th, the Thailand arms of Coins, the buy price of Bitcoin is hovering at 256,637 baht, or $8,425, a premium of less than 1%.

Thailand had a dominant spot exchange called BX Thailand, but the local Securities and Exchange Commission (SEC)-approved exchange shut down on Sept. 30, citing a low level of volume. The closure of popular exchanges could result in a larger price discrepancy in the short term as volumes shift to brokerages. However, over the long term, the gap should close.

Chile and Brazil: 0.34%–1%

On exchanges that have been operating for years in South America, the price of Bitcoin closely matches that of the U.S. spot market, even on brokerages that have fixed buy and sell prices. On ChileBit, the Bitcoin price is being traded at around $8,374, with a 0.34% premium and on FoxBit in Brazil, the Bitcoin price is trading at $8,440, with a 1% premium. The premium of brokerages and spot exchanges in South America in general — with the exception of a few countries such as Venezuela and Argentina — is close to zero.

The low premium may indicate a low demand from local investors as Chile, Brazil and other bigger markets in South America are not known to have large-scale mining centers that provide liquidity to the global Bitcoin exchange market.

Unique markets: GBTC in the U.S., Venezuela and LocalBitcoins

Apart from small cryptocurrency exchange markets with relatively low liquidity, strictly regulated products that are often utilized by institutional and accredited investors to invest in the Bitcoin market consistently demonstrate substantially higher premiums.

The Bitcoin Investment Trust (GBTC), for instance, which oversees close to $2 billion in assets and enables institutional and accredited investors to invest in Bitcoin through a regulated OTC exchange in the U.S., has a share price of $9.81. Each share of GBTC represents 0.00097368 BTC, which would imply that around 1,200 shares are equivalent to the price of 1 Bitcoin.

Based on the $9.81 share price of GBTC, each Bitcoin bought through the Bitcoin Investment Trust would be worth more than $10,000. Based on the current price of Bitcoin at $8,300, GBTC indicates a premium of over 20%.

Investors pay higher premiums for products like GBTC and exchange-traded products (ETPs) because they rely on third parties to secure their Bitcoin holdings. In recent months, GBTC has been trying to enable users to invest in Bitcoin at face value without the substantial premium by operating a private placement window. Whether this will decrease the premium of GBTC remains uncertain.

‘Hurun China Rich List 2019’ Features 12 Crypto Magnates

‘Hurun China Rich List 2019’ Features 12 Crypto Magnates

“Hurun China Rich List 2019” published by Hurun Report, a research, media and investments firm, features 12 local crypto magnates.

“Hurun China Rich List 2019” published by Hurun Report, a research, media and investments firm, features 12 local cryptocurrency magnates.

The latest list was published on Oct. 10 and includes co-founders of mining giant Bitmain Micree Zhan and Jihan Wu, founder of major crypto exchange Binance Changpeng Zhao and founder of competing OKCoin — Star Xu. Lastly, Leon Li, founder of cryptocurrency exchange Huobi, is also on the list.

Mining hardware producers and crypto exchanges’ CEOs

Bitmain’s Zhan — with his net worth of 30 billion Chinese yuan (over $4.2 billion) — has secured for himself the 100th position on the list. Binance’s Changpeng Zhao is ranked 195th thanks to his 18 billion yuan ($2.5 billion) personal wealth. Interestingly, he moved up 35 positions compared to the 2018’s list.

Founder of OKEx Star Xu took the 398th spot on the list with 10 billion yuan ($1.4 billion). Huobi’s Li is placed 530th with 7.5 billion Chinese yuan (over $1 billion). Hu Dong, founder of mining ASICs producer Ebang, has reached the 684th place with a net worth of 6 billion Chinese yuan ($0.84 billion).

As Cointelegraph reported in September, cryptocurrency exchange Coinbase and Ripple, the blockchain startup behind XRP, have fallen out of the top 10 of this year’s business and employment-oriented service Linkedln’s “The 50 Hottest U.S. Companies to Work For” list.

FATF AML Regulation: Can the Crypto Industry Adapt to the Travel Rule?

FATF AML Regulation: Can the Crypto Industry Adapt to the Travel Rule?

As the deadline for the so-called travel rule looms, crypto exchanges and issuers are responding to the pressure.

Regulators are clamping down on cryptocurrency, and companies around the world are feeling the strain. In late June, one of the most authoritative regulatory organizations worldwide, the Financial Action Task Force (FATF), issued new guidelines on how digital assets should be regulated. 

While FATF recommendations are not legally binding, the G-20 stated that it uses them to regulate cryptocurrencies for Anti-Money Laundering (AML). For businesses that fail to make the grade, this could mean being shut out of lucrative international markets. No punitive measures have yet been imposed, but companies and crypto exchanges alike are acting fast. 

What are the FATF guidelines?

In what has now become known as the travel rule, the FATF guidelines require regulators and Virtual Asset Service Providers (VASPs) — namely, exchanges from various countries worldwide — to collect and share personal data during transactions. The recommendation imposes the same standards on the cryptocurrency sector that are normally shouldered by the banking industry.

Although regulation of cryptocurrency is a hotly debated issue in the crypto community, the FATF guideline amendment proved to be more controversial than usual, as it compels VASPs to share the personal data of their customers. While many exchanges and wallet providers now ask customers to verify their identities, transactions using cryptocurrencies are largely anonymous. Payments are logged in the blockchain, but no personal details are revealed in the process. 

Related: FATF Regulations – Is It the End of Crypto Anonymity?

For some critics, the anonymity of cryptocurrencies makes them a perfect tool for carrying out criminal activity. Despite this, as Cointelegraph has previously reported, the level of illegal activity facilitated by the use of cryptocurrency is dwarfed by cash, and exchanges and wallet providers alike are generally cooperative with authorities. 

The FATF has given local authorities and VASPs one year to form an appropriate regulatory framework that complies with the travel rule. With four months already gone, the pressure is mounting on VASPs to come up with a solution. 

Hopes of privacy coins shattered? 

Privacy coins are cryptocurrencies that conceal user data. They are among the most controversial methods of payment available on the market. Some coins hide user identity, while others go as far as hiding the amount of cryptocurrency held and traded in wallets. 

For some, the need to conceal such information is evidence that the coins are enabling illicit activity, notably the buying and selling of illegal drugs on the darknet or potentially even supporting terrorist activity. For advocates of the technology, it is about autonomy of personal finance and operating free of state surveillance. 

But the new FATF guidelines are set to change everything. Although the deadline for VASPs to comply with the new regulations is still months away, privacy coins are already beginning to feel the heat. 

Related: South Korea Is Hoping for Regulatory Clarity as Crypto Laws Toughen

Earlier this month, OKex, one of the four largest cryptocurrency exchanges, announced the launch of a self-regulated organization that will standardize compliance policies across the world, in observance of the FATF guidelines. The local arm of the Korean trading platform then delisted five major privacy coins, citing the new guidelines. 

Ryan Taylor, CEO of Dash Core Group, told Cointelegraph that although the FATF enjoys global influence, the responsibility to draw up appropriate legislation still lies with local authorities, meaning that the implementations of the travel rule are likely to be unequal: 

 “Thus far, it appears that exchanges are preparing to address the recommendations put forward by the FAFT. However, because the FATF guidance must be implemented in local jurisdictions around the world, and those jurisdictions will undoubtedly act on the guidance differently, exchanges are struggling to understand the specific requirements they will need to meet. For now, that is a guessing game for them.”

Although Taylor outlined his view that the FATF guidelines are largely an attempt to crack down on what it perceives as an opportunity for money laundering and terrorist financing, he emphasized that “the vast majority of people that use privacy-enhancing features are simply using them for personal privacy, not to facilitate nefarious activities.”

Not all privacy coins provide the same level of anonymity. Although the FATF guidelines seem most problematic for privacy-focused coins, Taylor explained that only the most secretive options are at risk from the travel rule:

“Privacy and anonymity are not binary, but rather a spectrum. Coin mixing wallets can be built for any transparent blockchain such as the implementations for Bitcoin and Dash, and those options require no changes to the transparent nature of the blockchain. […] Given the diversity of options, and the differing treatment of these options in various jurisdictions, it is clear that only some of the most anonymous implementations are at risk.” 

Taylor concluded that Dash will be able to comply with the new regulatory standards, but cryptocurrencies that offer total anonymity might not be able to comply with the data required by the FATF.

Travel rule could level the playing field 

Cryptocurrencies themselves are not the only entities at risk from the travel rule. Exchanges are the hubs through which thousands of investors buy and sell crypto. Although cryptocurrency enables peer-to-peer trading without an intermediary, exchanges form a vital part of a healthy and accessible cryptocurrency sector. 

Cointelegraph spoke to John Roth, chief compliance and ethics officer at American cryptocurrency exchange Bittrex about how the changes are likely to affect trading platforms. According to Roth, the guidelines are only the latest in a long series of recommendations from the FATF: 

“The new guidance about emerging technology is not a surprise. The industry is currently split between compliant, regulated exchanges and those that are not. Hopefully the attention FATF is giving to the space will force non-compliant exchanges to join the mainstream. Currently, exchanges that chose to bear the costs of compliance, which are considerable, are at a competitive disadvantage in the global marketplace. Uniform rules uniformly enforced will level the playing field.”

While admitting that the FATF guidelines could bring about a more standardized approach to compliance among exchanges, Roth told Cointelegraph that, “Criminal actors do not need to use exchanges to engage in money laundering, and in fact are well advised to stay away.”

He further added that regulators are ignoring several fundamental truths of how cryptocurrency operates, that transactions are easily traceable on the blockchain and analytical tools can be used for tracking: 

“This means that while compliant exchanges and honest actors will bear the cost and inefficiencies involved in the rule, criminal actors can circumvent the requirements with a click of a mouse. It increases the costs and complexity of compliance without addressing the real concerns about money laundering.” 

Although the FATF has given a one-year deadline to VASPs, Roth said that a suitable solution may take longer due to the industry’s diversity and the potential expense of a new method of collecting the necessary information: 

“No one in the industry is currently compliant with the travel rule, an issue that us and other exchanges are discussing solutions to. The issue here is that a solution would require consensus in the industry and require the use of new and untested solutions to handle the speed and volume of data.” 

Bitpanda CEO calls for legal clarity

Bitpanda, a Vienna-based cryptocurrency that launched its global exchange service in June, is also wary of the potential impact the FATF guidelines could have on the industry. Bitpanda CEO Eric Demuth told Cointelegraph that although the shockwaves are likely to be wide-reaching, he believes that the industry is in a good position to adapt: “These rules and the requirement to register is actually a good thing. What we still miss in this regard is legal clarity.” He went on to add:

“We strongly urge the FATF and all other regulators to verify the technical feasibility first, before setting such rules. The effects on the industry, especially on a global level, are from our side not yet clear. Compliance must be possible from a technical perspective and there is no clear way how to achieve that yet.”

Regarding the effects that this could have on smaller players in the industry, Demuth explained to Cointelegraph that this could encourage companies operating on a smaller scale to develop an anti-state mentality: 

“Our estimation is that smaller players are either choked out or go to the ‘dark side’ in the sense of offering services without a license. If this happens those VASP would lose all incentives to stick to any rules and might not stop by breaking only these rules. This could lead to a situation like in the old days of Crypto, where there was more a mentality to work against the state. Currently, most VASP try to stick to the rules.”

Although Demuth expressed his reservations about the travel rule, he is not against regulation of the crypto sector as a whole. While admitting the investment in securities and crypto assets should be regulated, Demuth said that other restrictions are not conducive to a healthy cryptocurrency sector: “The industry should be heard before setting new rules in place.” 

Similarly, Serhii Mokhniev, regulatory affairs counsel at London-based cryptocurrency exchange CEX.IO, told Cointelegraph:

“To succeed, regulation should be proper, reasonable, and proportionate. Overregulation may be even worse than no regulation at all, because the regulatory burden may kill the business or the very idea before it’s introduced to the public.”

Time to draw a line in the sand

Regulation is necessary in order to ensure that wider adoption of cryptocurrency is possible and that future investors are protected. But the question remains: Regulation on whose terms? Companies and exchanges alike are well known for paying lip service to the need for regulation. 

Related: Why Regulation Is the Best Thing for Crypto

Across the industry, there is a consensus that measures need to be put in place to prevent terrorist financing and stamp out money laundering. Beyond this, there is no clear direction for the industry as a whole. 

The travel rule from the FATF is a sign that the time has come to establish a boundary between regulation, technology and privacy. But what remains unclear is where that line should be drawn. As it stands, only the most private currencies face a serious existential crisis. With time quickly running out, VASPs are still scratching their heads about how to negotiate the looming regulations. Those that don’t comply will find themselves left out in the cold.

Cryptocurrency Exchange OKEx Korea Delists XMR, DASH, ZEC, ZEN, SBTC

Cryptocurrency Exchange OKEx Korea Delists XMR, DASH, ZEC, ZEN, SBTC

Cryptocurrency exchange OKEx Korea has halted trading of Monero, DASH, Zcash, Horizen and Super Bitcoin.

Cryptocurrency exchange OKEx Korea announced the end of Monero (XMR), DASH, Zcash (ZEC), Horizen (ZEN) and Super Bitcoin (SBTC) trading as of today, Oct. 10.

Per the Oct. 2 announcement, the assets have been delisted today. A previous version of the announcement was published on Sept. 10. That being said, since then the support for privacy coins ZEC and DASH has been defined as temporarily suspended due to regulatory concerns.

Regulatory concerns over privacy coins

More precisely, OKEx Korea reports having received a request to end the transaction support and review the compliance with the ‘Travel Rules’ according to the Financial Action Task Force recommendations. The exchange promised that the final decision concerning the support of DASH and Zcash will be announced at a later date in a separate announcement.

Delisting of privacy coins over regulatory concerns is nothing new. In September, South Korean cryptocurrency exchange Upbit announced that it would stop trading for six cryptocurrencies, including some so-called privacy coins.

Other recent delistings

Also in September, major cryptocurrency exchange Binance announced that it is removing about 30 trading pairs from its platform. Interestingly, six of those trading pairs involved tokens launched on Binance Launchpad — its initial exchange offering platform.

As Cointelegraph reported yesterday, crypto exchange Poloniex has announced that it is delisting six digital currencies: Clams (CLAM), Pascal (PASC), Steem (STEEM), Navcoin (NAV), GameCredits (GAME) and LBRY Credits (LBC).