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Russian prime minister proposes legal steps to bring order to crypto market

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Russian prime minister Mikhail Mishustin has appeared to express support for the further development of the local cryptocurrency market.

At a recent governmental meeting held on Nov. 26, Mishustin proposed the introduction of legal protections for crypto holders in the country in order to contribute to the growth of the new industry.

According to Mishustin, such a framework would develop the industry in a “civilized way so that the owners of such assets can protect their rights and interests,” while at the same time preventing “shadow schemes.” 

As part of the plan, Mishustin proposed amending the Russian Tax Code to recognize cryptocurrencies like Bitcoin (BTC) as property, stating:

“Let’s make a number of changes to the Tax Code so digital financial assets can be recognized as property, and their owners will be able to count on legal protection in the event of any illegal actions, as well as to defend their property rights in court.”

Mishustin replaced Russia’s former prime minister Dmitry Medvedev in January 2020, whereupon he urged the country to prioritize the development of a digital economy. However, the current status of the local crypto ecosystem remains in doubt because the government is planning to officially ban payments in crypto in January 2021. Russian authorities also want to introduce prison terms for failing to report annual crypto transactions of about $600,000.

Meanwhile, major Russian financial institutions are rushing to launch crypto and blockchain-related services abroad. On Nov. 19, Gazprombank Switzerland, a subsidiary of one of the largest banks in Russia, debuted its Bitcoin transaction service following regulatory approval by Swiss regulators. 

Russian prime minister proposes legal steps to bring order to crypto market

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Rapper T.I.’s associates to cough up $100K in FLiK token case with SEC

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Three associates of Clifford Joseph Harris Jr., a rapper also known as T.I. who was responsible for helping launch the FLiK token, have agreed to pay more than $100,000 after a U.S. district court approving a settlement.

According to records filed Nov. 17 in the U.S. District Court for the Northern District of Georgia, Chance White, Owen Smith, and William Sparks Jr. will pay $102,992 in a settlement covering penalties, fees, and disgorgements for their role in selling tokens in initial coin offerings, or ICOs, for FLiK and CoinSpark. T.I., a rapper, singer, and songwriter, has won three Grammy Awards and had several hit singles including Whatever You Like and Live Your Life.

The SEC announced charges against the three in September along with Ryan Felton, founder of video production company AVA, and T.I., alleging that the ICOs were “unregistered and fraudulent.” Sparks, who is T.I.’s social media manager, was charged with violating registration provisions by allegedly selling FLiK tokens on the rapper’s social media accounts.

White and Smith, who are both involved in the Atlanta film industry, were charged with violating registration and anti-touting provisions for allegedly promoting CoinSpark without revealing they were being paid for their endorsement of the token.

The trio agreed to settlements at that time, which were approved by the court on Tuesday. The SEC’s case against Felton is reportedly still ongoing, while the commission ordered T.I. to pay a $75,000 penalty and not participate in offerings or sales of digital-asset securities for at least five years.

FLiK was one of many tokens announced during the 2017 ICO boom. When the token was launched that September, Felton claimed on social media that FLiK would see “tremendous growth in one year” and be redeemable for $14.99 in 15 months. However, the price of the token only reached $0.21 at its peak on Oct. 17 and is currently being traded at $0.000289 according to data from CoinMarketCap.

In 2018, a group of 25 investors named Felton and T.I. in a class-action lawsuit accusing them of running a pump-and-dump scheme with FLiK by hyping up the token using misleading information and celebrity endorsements.

The group’s legal team later amended the lawsuit to include comedian Kevin Hart for his alleged role. A U.S. district judge dismissed the suit against T.I. earlier this year, stating he found no concrete evidence of securities violations or negligent misrepresentation regarding the rapper touting FLiK.

Rapper T.I.’s associates to cough up $100K in FLiK token case with SEC

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Blockchain Platform Sikoba Partners with Horizen to Bring “Transparency” to Decentralized Credit Market

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Horizen, a tech platform that allows businesses and developers to launch their own public or private blockchains, has partnered with Sikoba, a “decentralized” blockchain-enabled system for peer-to-peer IOUs.

According to a release shared with CI, Horizen and Sikoba will offer their users “the ability to obtain legal certainty, establish credit history, and verify financial transactions in a safer and more secure manner.”

Sikoba plans to make informal credit (when IOUs are used instead of making cash payments) a lot more efficient. Informal credit is used by SMEs in developing nations, however, it suffers from “a lack of legal recognition, the inability to transact outside of one’s trusted network, and the absence of a verifiable audit trail,” the release noted.

Sikoba aims to address these challenges by registering debt on a public blockchain-based platform.

As explained in the announcement:

“Through Sikoba, users obtain legal certainty, have the ability to establish a credit history and can transact beyond their immediate circle of trust with identified trusted intermediaries. Finally, Sikoba also reduces the need for cash settlement by automatically clearing circular debt. As debts and credits registered on Sikoba’s federated blockchain fall into the category of financial data, this information must remain private, and within a trusted system. Sikoba users, however, should still have the ability to verify and generate proofs of their transactions, within a public ecosystem, as needed.”

Alex Kampa, Founder at Sikoba, noted that to implement the solution, they will be writing these proofs onto a public Horizen sidechain, by using Horizen’s zero knowledge toolkit and the Zendoo interoperability protocol. He explained that Horizen technology will allow them to offer a key service to Sikoba users.

As mentioned in the announcement, Zendoo (which is Horizen’s sidechain technology) will be integrated into Sikoba’s platform. This will allow for an additional layer of security and transparency for its users.

Sikoba will be anchoring its own distributed ledger tech (DLT) platform to Horizen’s public blockchain by building on top of Horizen’s sidechain protocol, Zendoo. As explained in the release, the Merkle root of each block of Sikoba’s federated blockchain will be recorded on a Horizen sidechain.

The release further explained that Sikoba will also “generate a corresponding Merkle path for every transaction.” After this step, users can then “verify their transactions using only the Merkle root on the public blockchain and the transaction’s Merkle path.” And “by layering the two chains, utilizing Zendoo, Sikoba can establish trust that its users’ debts and credits are properly registered.”

Rob Viglione, Co-Founder of Horizen, remarked:

“Due to the nature of Sikoba’s financial data, its blockchain system needs to be completely reliable for data management – Horizen is thrilled to partner with Sikoba to provide this, and to help its users obtain transaction certainty and establish a credit history via the blockchain. Horizen’s partnership with Sikoba is a great early use case for Horizen’s sidechain technology, Zendoo, as it showcases one of the many mainstream adaptations for interoperable and transparent sidechain tech.”

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