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Feb 26 2021

Southeast Asian Fintech Grab to Create 350 New Jobs in Singapore during 2021 to Support Business Growth and Development Plans

Southeast Asian Fintech firm Grab has revealed that it will be creating about 350 new jobs in Singapore during 2021 in order to support its ongoing growth and development plans.

These new roles and requirements aim to support the Fintech company’s expansion of products and services to support the digitalization of micro SMEs and also the delivery of digital financial services across the Southeast Asia region. Grab is also committed to the development of the “digibank” which will reportedly be led by a Grab-Singtel consortium.

Grab’s announcement to hire more workers has come at a time when the company has signed a Memorandum of Intent (MOI) with the Infocomm Media Development Authority (IMDA) and Digital Industry Singapore (DISG).

Per the terms of the MOI, Grab will be working cooperatively with IMDA and DISG to grow its main line of products and also its engineering teams’ capabilities via the support of talent development programs like the TechSkills Accelerator (TeSA).

These programs are designed to enhance the technical skills of experienced professionals and offer practical, hands-on training to those who are interested in exploring different roles in the technology industry.

Some of these new hires will be specialists focused on AI, cybersecurity, data science, software development, and product management and design.

Grab stated that it will also be providing various employment opportunities in key areas like finance, operations, legal, public affairs and business development.

Tan Hooi-Ling, Co-founder, Grab, stated:

“As a Singapore-based tech company, Grab fully supports the development of the tech ecosystem here. We are building products that positively impact millions across Southeast Asia, and we want to continue deepening our R&D capabilities and push the boundaries of innovation, right here at our strategic base. This is only possible with the support of Grabbers across different business functions, who are continually learning and adapting to new technologies and customers’ requirements.”

Lew Chuen Hong, Chief Executive, IMDA, noted that in order to secure its digital future, Singapore “must be the place where companies choose to build unique digital products that cater for global markets.” Hong also mentioned that this is “the only way that Singapore can sustainably capture value and differentiate ourselves in the digital economy.”

He added:

“We are pleased to partner Grab, to strengthen Singapore’s tech ecosystem in these two key areas – to build our local talent in product development, and grow Singapore as the base for high-end R&D in tech.”

Source

Written by bizbuildermike · Categorized: Crowdfunding · Tagged: 2021, accelerator, AI, AIM, Asia, business, Co-founder, company, cybersecurity, data, data science, Design, digital, digital financial services, economy, employment, Engineering, expansion, finance, financial services, fintech, Future, General News, Global, grab, grab financial services, imda, innovation, Jobs, legal, lew chuen hong, LINE, linkedin, markets, Media, more, new hires, product, Products, science, Singapore, Software, Southeast Asia, tan hooi ling, tech, Technology

Feb 23 2021

Bancor Lawsuit Tossed: “New York is not a reasonable and convenient place to conduct this litigation”

A New York judge has tossed a lawsuit filed against Bancor, or BProtocol Foundation, that claimed the sale of unregistered securities, according to an Order Granting Motion to Dismiss received by CI. Judge Alvin Hellerstein dismissed the case and the Plaintiff’s offer to re-plead was denied.

BProtocol Foundation (Bancor) is organized under the law of Switzerland, with offices in Zug, Switzerland, and Tel Aviv, Israel. In 2017, Bancor raised about $153 million in a token offering.

According to company representatives, the ruling is decisive as Judge Hellerstein canceled an oral argument that had been scheduled. The ruling may impact other cases that seek to apply US securities law to digital offerings that sold outside the US.

According to the document, the case was filed on behalf of Timothy C. Holsworth. Holsworth, who replaced the initial plaintiff William Zhang, alleged that he purchased 587 BNT digital coins on September 4, 2019, from Wisconsin, on COSS, a digital exchange in Singapore, for an aggregate cost of $212.50.

The lawsuit alleged that Bancor “made numerous false statements and omissions that led reasonable investors to conclude that the BNT tokens were not securities.” The Plaintiff argued that BNT is a security and thus falls under US securities law.

Filed yesterday, the Order said the Plaintiff has not shown that he was directly contacted by Defendants or that he purchased securities as a result of any active solicitations by Defendants. The Order adds:

“Wherever the current business location of Bancor, New York is not a reasonable and convenient place to conduct this litigation.”

Thus the motion to dismiss was granted in favor of the Defendants.

Bancor was represented by Alex Spiro of Quinn Emanuel, a law firm that specializes in litigation and is active in multiple high-profile crypto and Fintech cases.


Source

Written by bizbuildermike · Categorized: Crowdfunding · Tagged: 2017, alex spiro, bancor, Blockchain & Digital Assets, bpprotocol foundation, business, company, crypto, digital, exchange, fintech, Israel, Law, lawsuit, legal, New York, Offerings, other, Politics, Legal & Regulation, quinn emanuel, said, securities, security, Singapore, Switzerland, token, tokens, us, Wisconsin

Feb 16 2021

GameStop and DeFi: Let’s Not Be So Quick To Judge

Fellow DeFi adherents, let’s slow down on the outrage about GameStop (NYSE:GME) and the traditional finance system (TradFi).  

Blockchain and DeFi offer lots of advantages over TradFi, but TradFi is not completely broken and DeFi is not necessarily vastly superior.  Two core characteristics make them look very similar in a way that undercuts the criticism and negative judgments against TradFi. 

First, DeFi and TradFi both require collateralization, they just implement it in different ways. 

Second, just like collateralization can break down in TradFi, DeFi has a significant exploit that lessens the effectiveness of the collateralization requirement.  And away we go!

Short selling has been much debated and criticized in DeFi and blockchain circles in light of the short positions and short squeeze on GME.  All of the points raised by DeFi maximalists are well-founded but are also well-known in TradFi circles, having been the subject of discussion and regulation for decades.  The Securities and Exchange Commission has strict rules on the subject, and market practice not only seeks to enforce those rules but has its own requirements that go further. 

The biggest way that the rules and market practice seek to rein in illegal short-selling (including “naked” shorting) is through collateralization.  Every borrowing of stock must be collateralized and that collateral is subject to loss if the borrow is not returned.  That is, the borrower posts collateral in order to receive the stock to sell short, and the lender keeps the collateral if the borrower does not return the stock upon demand.  Moreover, the amount of collateral required is marked to market every night, so the borrower is constantly posting additional collateral as the stock price rises.  A short squeeze would not be possible without the collateralization requirement and nightly mark to market.  They are why it can become prohibitively expensive to maintain a short position.

On the DeFi side, lots of commentators pretend that everything is free and easy.  In reality, DeFi relies on collateralization, including versions of a mark to market requirements. 

Maybe we can pretend it is different because DeFi often doesn’t use the term “collateralization,” preferring the term “locking” since the smart contract takes the relevant assets and holds (“locks”) them until the relevant activity is complete.  The smart contract refuses to release the assets unless it is certain that the correct, countervailing value has been credited. 

This locking mechanism is the reason that the concept of “total value locked” makes sense as one measure of the success of DeFi. 

Without locking assets, nothing in DeFi works: not DeFi lending, where assets are locked before the loan is made; not automated market making, where the smart contract locks up amounts of each of the pair of assets being traded; not wrapped BTC, which locks Bitcoin in a smart contract before issuing the token representing that Bitcoin; not even trading on a DEx, where the smart contract locks up the tokens being bought and sold before doing an atomic swap or other exchange between accounts.  

We who espouse the benefits of DeFi on blockchain and criticize TradFi need to recognize this parallel.  We need to explain how collateralization in DeFi is better because it is instantaneous and controlled by smart contracts rather than left to manual processes where errors (including failures to post collateral or mark-to-market) are more possible.  We also need to remind ourselves that a badly programmed smart contract can be just as error prone as manual processes, and with potentially irreversible consequences. 

We also should jump down from the high horse of criticizing TradFi for the fact that short interest can exceed total float (that is, there can be more GME sold short than there are GME shares in existence).  DeFi’s Achilles heel is yield farming. 

It is tough to criticize GME’s massive short interest where, for example, your Dai locked at yEarn becomes yDai that you take to Aave to receive aDai that you take to Uniswap to receive its liquidity tokens that you take to another DeFi protocol and so on, earning yield at each step but locking up no new collateral.  This daisy chain all rolls back to the same original locked assets, such that if something happens anywhere along the string, the consequences could be significant.  As such, the chain of assets created in DeFi is parallel to the outsized short interest people are complaining about in TradFi when that daisy chain is not nearly as strong as the blockchain on which it is built.  

Nothing in this article is intended to express a view on whether TradFi stock shorting, DeFi daisy chains, or the collateralization practices and methodologies in each, are good or bad, compliant or non-compliant, or even sensible.  The point is that all of these things exist and everyone should study the parallels before launching their criticisms and especially before participating in the different markets. 

Remember, one definition of DeFi is the use of smart contracts on decentralized blockchains to duplicate the products and services of TradFi.  Perhaps that includes some of TradFi’s more challenging features as well.



Lee A. Schneider is General Counsel at Block.one, one of the world’s largest blockchain companies and creator of the EOSIO blockchain protocol.  In that role, Schneider is responsible for various aspects of the legal function as well as the company’s government affairs initiatives. He joined Block.one after leading the blockchain, Fintech, and broker-dealer practices at two major international firms.  Lee has been recognized as one of the leading voices in blockchain-related regulation and compliance and has played a role in structuring several of the largest and most successful blockchain-related projects. Schneider co-hosts the Appetite for Disruption podcast with Troy Paredes and is the contributing editor for the Chambers and Partners Fintech Practice Guide. He is the contributing editor of the Chambers and Partners 2019 Fintech Practice Guide. All views expressed are in his personal capacity and reflect only his personal views and not those of Troy, Chambers, or block.one or its directors, officers or employees. His views do not constitute legal, investment or any other type of advice.

Source

Written by bizbuildermike · Categorized: Crowdfunding · Tagged: Aave, article, bitcoin, blockchain, Blockchain & Digital Assets, blockchains, btc, compliance, compliant, creator, DAI, decentralized, defi, DEX, exchange, exploit, Featured Headlines, finance, fintech, GameStop, General News, Go, government, international, investment, lee schneider, legal, lending, linkedin, market, markets, more, opinion, other, perspective, podcast, Products, Regulation, return, securities, Securities and Exchange Commission, shares, Short Selling, smart contract, smart contracts, step, stock, Study, token, tokens, trading, uniswap, view, Yahoo, Yearn

Feb 16 2021

Bitcoin (BTC) Price Prediction: BTC/USD Rallies to $50,500 High but Fails to Sustain the Upturn

Bitcoin (BTC) Price Prediction – February 16, 2021
Today, Bitcoin bulls have broken the $48,000 and $50,000 resistance levels. BTC/USD has reached the high of $50,500 but was resisted. The bullish momentum could not be sustained because of overwhelming selling pressure above the psychological price level. The price eventually dropped and found support above $48,000.

Resistance Levels: $48,000, $49,000, $50,000
Support Levels: $35,000, $34,000, $33,000

BTC/USD – Daily Chart

Today’s price action is very significant as buyers were able to push Bitcoin above the $50,000 resistance but pulled back to $48,000 low. Analysts believe that if the $50,000 resistance is breached, Bitcoin will have an accelerated price movement on the upside. In today’s price action the candlestick has a long wick above the $50,000 resistance. The long upper shadow indicates that there is strong selling pressure above the $50,000 resistance. That is the reason BTC price fell from the high of $50,500 to $48,000 low. Bitcoin is trading at $48,309 at the time of writing. On the upside, if the bulls break the $50,000 resistance and bullish momentum is sustained, this will propel the price to rise and rally above the $60,000 high. However, if BTC price faces another rejection, the market will drop to as low as $44,000.

India Crypto Ban Is Like Banning the Internet, Says Former Coinbase CTO
There is an impending ban on Bitcoin and other crypto currencies by the Indian government. In late January, the Crypto currency and Regulation of Official Digital Currency Bill have been introduced in India. The bill lays the groundwork for an official digital currency issued and overseen by the Reserve Bank of India. However, an anonymous senior Finance Ministry official spoke to Bloomberg that the upcoming ban was very likely to occur. He indicated crypto investors will have three to six months before converting their money to legal tender.

The former Coinbase chief technology officer, Balaji Srinivasan has indicated that India’s impending ban on Bitcoin and other crypto currencies is like banning the “financial internet.” He further indicated that: “It’s really important that the ban (India’s plan to ban owning, trading, mining or investing in crypto currency) should not go through. It would be a trillion-dollar mistake for India, without exaggeration.”

BTC/USD – Daily Chart

Meanwhile, Bitcoin has made a tremendous move as it broke above the $50,000 resistance. However, the bulls were overpowered because of strong selling pressure. On February 8 uptrend; a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement indicates that Bitcoin will rise to level 1.272 Fibonacci extension or the high of $50,899.40. If price reaches that level, it is expected to reverse to level 78.6 % Fibonacci retracement level where it originated. The price action has already confirmed these levels and reversed.

Bitcoin (BTC) Price Prediction: BTC/USD Rallies to $50,500 High but Fails to Sustain the Upturn

Source

Written by bizbuildermike · Categorized: cryptocurrency · Tagged: analysis, Analysts, ban, Bank, bitcoin, btc, btc price, BTC/USD, chief technology officer, coinbase, crypto, Crypto Ban, crypto currency, Currencies, Currency, data, digital, digital currency, finance, Go, government, India, Internet, Investing, legal, market, mining, money, opinion, other, Price Analysis, Price Prediction, Regulation, Technology, trading, upside

Feb 02 2021

How Tax Authorities Should Treat Cryptocurrency Staking Rewards

Let me start with a confession: I am not smart enough to be a tax lawyer, certainly not a US tax lawyer.  The intricacies of the US tax code defy my brain’s attempts to systematize a coherent taxonomy.  The tax code is too complex and varied for me, even though I have spent my nearly 30-year career untangling the complicated schemes of the federal securities laws and financial services regulatory regimes.  And on top of the rules themselves, there are interpretations and lore that compound the difficulty.

Fortunately, there are people like Abe Sutherland, the author of numerous articles on one very particular area of US tax law: the treatment of cryptocurrency staking rewards created on public, permissionless blockchain platforms that use a proof of stake consensus mechanism (described in more detail below).  Most recently, he put together a primer on the question as a way to introduce more people to the correct analysis.  

Abe thinks this issue is easy because the cryptocurrency tokens created through staking, what he calls “reward tokens”, are new property deserving the same treatment as crops grown from seeds, livestock born on the farm, newly mined precious metals, novels, or songs newly written, newly manufactured items, and the idea for a new financial instrument.  As the primer notes:

“New property . . . is never immediate income to its first owner.”  Rather, “[n]ew property gives rise to taxable income when it is sold, not when it is created.”

I quickly grasped this concept because it made sense with my understanding of how proof of stake consensus works on these blockchain platforms.  An alternative to proof of work consensus used in the original Bitcoin blockchain, proof of stake is the means by which the system and certain of its participants agree on updates to the blockchain.  Put another way, it is how the database gets updated with new information.  

IRS Internal Revenue Service

IRS Internal Revenue ServiceAt its core, proof of stake requires numerous tokenholders to “lock” the native system tokens they hold into the platform for the ability to take turns adding the blocks of data that build the blockchain and update its database.  The tokens are “locked” by posting them into the platform’s staking application (part of its programming) that freezes the tokens so they cannot be transferred until removed from the application. The locked tokens form the tokenholder’s “stake,” which the staking application then evaluates in accordance with its programming to determine when the particular tokenholder takes their turn at validating a block (that is, adding the information to the blockchain database).  

The exact methodology used to pick how stakers take turns doing validation is not significant to the tax analysis because for the new property tax analysis it must be true that the validator’s act of forming the latest block simultaneously creates one or more new native system tokens.  These new tokens indicate to everyone that the block has been added to the blockchain and incentivize tokenholders to conduct the important activities of staking tokens and forming blocks in order to secure the network.  That security is achieved by adding new blocks that make the chain too long for an attacker to duplicate with incorrect or manipulated data.  Having lots of staking tokenholders also results in the distribution and decentralization of the network that are required for security and immutability.  The stakers’ job is critical to the survival and integrity of the platform, which in turn is why the forming of a new block results in the creation of new native system tokens.

In addition to the intuitive “new property” analysis, Abe’s primer discusses several other reasons for taxing staking rewards upon sale rather than upon acquisition. 

“To simplify, . . . [t]he practical problems involve the administration of the income tax and the costs of compliance [and t]he economic problem arises from the overstatement of gain – and resulting overtaxation . . ..”  

The primer then explains the practical problems by laying out in detail how difficult or impossible it would be to know when a reward token was created by a staker for purposes of establishing the time at which it would have to be valued under a tax scheme that treated reward tokens as compensation.  Even without the timing question, there are questions about what data source(s) would establish the value.  The primer provides examples of these points utilizing the Tezos, Cosmos and Ethereum 2.0 blockchains.  Both of these problems are solved by taxing reward tokens at the time of sale, when both the correct moment and valuation are easily ascertainable.

The economic problem of overstatement of economic gain stems from the fact that reward tokens do not represent a commensurate increase in the staker’s percentage of all outstanding tokens.  Reward tokens increase the overall token supply and are typically distributed pro rata to all stakers. They, therefore, are not the equivalent of an outsized benefit to the staker who created any particular reward, as one would expect from “compensation.”  As such, the economic benefit to the creating staker is not a payment or income but just a prorated portion of the overall system inflation.

With the analytical framework, practicalities and economic realities supporting his conclusion, Abe continues his quest to make sure everyone understands these issues and sees the proper tax treatment.  With his pleasant demeanor, simple explanation, and dogged determination, the Proof of Stake Alliance (“POSA”), which sponsors his work, has an effective advocate. 

Abe certainly took this scared taxpayer and made me understand.  Perhaps 2021 will be the year that tax authorities agree with him.


Disclosure:  POSA is the leading policy and advocacy organization for proof of stake blockchain networks.  I joined POSA’s Board of Directors effective January 1, 2021, but Abe and I have been discussing his analysis for a good part of 2020.

Lee A. Schneider is General Counsel at Block.one, one of the world’s largest blockchain companies and creator of the EOSIO blockchain protocol.  In that role, Schneider is responsible for various aspects of the legal function as well as the company’s government affairs initiatives. He joined Block.one after leading the blockchain, Fintech, and broker-dealer practices at two major international firms.  Lee has been recognized as one of the leading voices in blockchain-related regulation and compliance and has played a role in structuring several of the largest and most successful blockchain-related projects. Schneider co-hosts the Appetite for Disruption podcast with Troy Paredes and is the contributing editor for the Chambers and Partners Fintech Practice Guide. He is the contributing editor of the Chambers and Partners 2019 Fintech Practice Guide. All views expressed are in his personal capacity and reflect only his personal views and not those of Troy, Chambers, or block.one or its directors, officers or employees. His views do not constitute legal, investment or any other type of advice.

Source

Written by bizbuildermike · Categorized: Crowdfunding · Tagged: 2020, 2021, abe sutherland, acquisition, analysis, author, bitcoin, blockchain, Blockchain & Digital Assets, blockchains, Career, compensation, compliance, Compound, Cosmos, creator, cryptocurrency, data, decentralization, ethereum, Ethereum 2.0, Featured Headlines, financial services, fintech, government, Income Tax, inflation, information, Internal Revenue Service, international, investment, irs, Law, legal, linkedin, more, opinion, other, payment, perspective, platforms, podcast, Politics, Legal & Regulation, precious metals, proof of stake alliance, Regulation, revenue, reward, securities, security, staking, Strategy, tax, Tax Code, Taxes, Tezos, token, tokens, us, Valuation, work

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